BRIGHT YOUTH ORGANIZATION
Our Curriculum
1
Financial Planing
Objective: To recognize the importance of financial planning and methods of saving money that are suitable for yourself.
► The Importance of Financial Planning
► How to Plan Finances
• Steps in Financial Planning
• How to Set Financial Goals
• Tools for Financial Planning
► Tips for Saving Money
2
Digital Financial Literacy
Objective: Understand financial services in the digital age and be able to choose and use services appropriately and securely.
► Payment and Spending Channels
• Electronic Cards
• Online Banking
• Prompt Pay
• QR Code Payment
► Deposit and Withdrawal Channels
• Digital Savings
• Cardless Cash Withdrawal
► Recommendations for When Transferring Money Incorrectly
► How to Spend Safely in the Digital Age
5
The financial economic system
Objective: Recognize the importance of key external factors that affect our money
► Economic System
• Market, Economic Units, and Economy • Inflation and Deflation
• Monetary Policy
• Fiscal Policy
► Financial System
• Financial Institutions
• Financial Products & Services
• Financial Regulatory Agencies
6
The rights and responsibilities of financial service users
Objective: To be aware of financial service users' rights and to maintain the rights that should be had, to prevent exploitation, and to perform the role of a financial service user appropriately
► The importance of knowing the rights and responsibilities of financial service users
► Rights of financial service users
► Responsibilities of financial service users
8
Debt and Debt Management
Objective: ensure that borrowing is done responsibly to meet financial needs while maintaining the ability to repay the debt in a timely manner, minimizing costs, and avoiding financial distress.
► Causes of Debt Problems
► Knowledge to Prevent Debt Problems
• Knowing Types of Debt
• Knowing Types of Loans
• Suitable Debt Repayment Rates
► What to Do When You Can't Pay Your Debt
9
Planning for Retirement
Objective: Be aware of the importance of planning for retirement early, as it allows time to manage your money to achieve your goals without having to use a large amount each year
► The importance of retirement planning
► How to calculate the money needed for retirement expenses
► 4 factors that may cause retirement funds to be insufficient
01
Financial Planning
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Financial planning is a tool that helps prepare and lead life toward financial stability. It should start with instilling the habit of saving and spending money reasonably from a young age to cultivate financial discipline early on.
Financial planning is a tool that helps manage money systematically and efficiently, ensuring that income is sufficient to cover expenses, having funds for emergencies, savings for earning interest or investing, securing a stable future, and having money for retirement. Regardless of your age or profession, financial planning is essential because money is important and necessary for living and can help make dreams come true.
The importance of financial planning
Methods of financial planning
The steps in financial planning are as follows: Financial planning has 5 steps.
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Self-Assessment: Examine how much income you have each month and what expenses you have. Also, predict any upcoming expenses and when you might need a large sum of money.
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Budgeting: Allocate a portion of your income to savings before spending. Save at least 25% of your income, or start with 10% and use the remaining money for expenses. Saving before spending helps you keep funds for emergencies or invest to generate returns.
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Create a Savings Plan: Once you have a savings goal, divide the amount you want to save by the time frame to determine how much you need to save each month. Then find ways to save that amount, such as reducing expenses and/or increasing income. Assess whether each method meets your goal and create a savings plan accordingly.
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Follow the Budget and Savings Plan: No matter how well you set your savings goals and plan, achieving them will be difficult if you don’t stick to the plan or get distracted by things not in the plan.
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Adjust the Plan According to Circumstances: Regularly check if you are saving according to the plan. If not, identify the reasons and then find ways to fix or adjust the plan to align with current circumstances. Remember, the key to following a plan is to do so without being too rigid or too lax.
The method for setting financial goals: a good goal should follow the "SMART" principles.
S = Specific Clearly specify what you want to do and for what purpose
M = Measurable Quantifiable with numbers
A = Achievable Achievable and knowing how to reach the goal
R = Realistic Feasible and not fanciful
T = Time Bound Has a specific time frame
Example of a good financial goal: Andrew wants to save money for a graduation project in the amount of 2,000 baht within 2 months.
Financial Planning Tools
There are two financial planning tools:
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Income and Expense Log: This involves recording every time we receive income and noting what we have spent it on. This helps us understand our "spending patterns," such as how a significant portion of our monthly expenses goes toward food and beverages, with a secondary amount spent on clothing, etc.
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Budget Plan: This involves recording how we will allocate expenses when we receive income in the future and planning to address upcoming expenses. For example, we need to assess whether our income will be sufficient to cover expenses or if we need to find additional sources of income or reduce expenses. This helps us allocate funds and plan for future expenses in a timely manner.
Financial Planning Tools
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Save Before Spending: If you spend money before saving, you often end up saving less than intended or may not save anything at all. Therefore, if you save before spending or save immediately when income comes in continuously until it becomes a habit, it will make saving money easier.
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Save 25% of Monthly Income: However, this ratio can be adjusted as appropriate, depending on current income and financial plans. But if income is still low and there are many necessary expenses, you might start by saving 10% of your income.
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Divide Savings According to Goals: You can divide your savings objectives into 5 goals as follows:
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Emergency Savings: This is the first type of savings that everyone should have, ideally 3 to 6 times their essential monthly expenses. It is important to keep this in an account that is easily accessible so that you can withdraw the money if an unexpected event occurs without having to rely on others.
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Savings for Large Expenses: If you know in advance that you will need a large amount of money at a certain time, such as for buying a mobile phone, you should plan to save money well in advance. Save a little each month until it accumulates into a large sum, so you won’t face heavy expenses all at once.
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Savings for Desired Items: This is saving to use the money for things you want. Typically, these are non-essential expenses, which is not a problem as long as it does not cause financial strain or debt.
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Investment Savings: This is saving money to invest and generate growth, creating long-term financial security.
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Retirement Savings: In retirement, most people do not have additional income. Saving this amount will ensure you have money for use in retirement without difficulty.
4. Fun and easy money-saving techniques can help create discipline and motivation to save money regularly. For example, putting 10 baht in a piggy bank before leaving the house each day, saving spare change from income, saving change from purchases, saving 50 baht notes, and saving money rather than spending on unnecessary items, etc
02
Digital Financial Literacy
Nowadays, technology plays an increasingly important role in the financial system to support the transition to a cashless society. This makes financial transactions and daily spending much more convenient, comfortable, fast, and easy. Understanding spending in the digital age will enable us to choose financial services appropriately, safely, and to their fullest benefit.
Payment and Settlement Channels
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Electronic Cards: These are plastic cards used instead of cash, divided into 3 types based on the timing of payment or debit from the deposit account, as follows:
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Cards that make immediate payments upon use: These include ATM cards and debit cards.
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Cards that make payments after use: These include credit cards.
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Cards that require preloading before use: These include electronic money cards, commonly known as e-Wallets, such as transit cards and various Money wallets.
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Online Banking: This refers to financial transactions conducted through the bank’s website or application where we have our deposit accounts. Whether it’s transferring money, paying bills, checking account balances, or shopping online, we can perform these transactions via the internet on a computer. This is called Internet Banking. If the transactions are done via the bank’s mobile application, it is referred to as Mobile Banking.
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PromptPay: This is a system for transferring money to deposit accounts or e-Money accounts using a mobile phone number, national ID number, or e-Wallet number of the recipient. If the transfer amount does not exceed 5,000 baht, the sender does not need to pay a fee.
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Payment via QR Code: This involves using a QR Code to access payment information, such as the name and account number or e-Wallet of the merchant. Sometimes, it may also indicate the price of the goods.
Deposit and Withdrawal Channels
Recommendations for Incorrect Money Transfers
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Contact the originating bank to report the issue.
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Bring the transfer evidence to file a report at the police station.
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Take the police report to the originating bank to coordinate with the receiving bank to follow up on the refund.
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The receiving bank will refund the money to the sender once written consent is obtained from the recipient.
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If the recipient does not consent, the sender may need to file a lawsuit to request a refund.
How to spend safely in the digital age
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Contact the originating bank to report the issue.
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Bring the transfer evidence to file a report at the police station.
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Take the police report to the originating bank to coordinate with the receiving bank to follow up on the refund.
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The receiving bank will refund the money to the sender once written consent is obtained from the recipient.
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If the recipient does not consent, the sender may need to file a lawsuit to request a refund.
How to spend safely in the digital age
In the digital age where everything is so easy, even data theft or fraud can lead to various financial threats. To protect yourself from potential financial risks, try to make these behaviors a habit for financial security in the digital era.
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Limit the transfer limit and separate the account. Make online transactions from savings accounts.
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Take care of your computer or smartphone to be safe.
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Prevent viruses
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Do not use pirated programs
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Lock the screen
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Do not use Free Wi-Fi.
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Think before you click. Use secure websites/applications.
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Set a username and password that are hard to guess but can be remembered.
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Check the accuracy before confirming/Check the movement of money in the account.
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Contact the bank immediately if you find any unusual transactions or when changing personal information.
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Disclose information on social media only as necessary
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Digital Deposit (e-Saving): This is a deposit service where customers can open an account by themselves via the internet or the bank’s application without needing to visit a branch, and no passbook is required. Generally, it offers higher interest rates than regular savings accounts. However, identity verification is required through an ID card at the bank’s service points or through the National Digital ID (NDID) system.
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Cardless Withdrawal: This is a service for withdrawing cash from an ATM by making transactions through the bank’s mobile application instead of using an ATM card.
03
Financial Awareness To Threats
Financial threats or scams that criminals use to deceive victims and steal money have been modernized in line with technological advancements, causing widespread damage to the public and increasing the value of losses. Therefore, financial service users must be cautious and aware of these scams to avoid falling victim to criminal gangs.
Understanding Financial Scams
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Here are examples of popular financial scams that you or someone close to you might have encountered or heard about frequently:
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Ponzi Schemes: These are fraudulent schemes that collect money from the public through a network, often advertised with promises of higher returns than typical investments. Ponzi schemes often disguise themselves as legitimate businesses or invite people to invest in highly profitable ventures. They continually recruit new members to use their initial membership fees or initial investment funds to pay returns to earlier members, thus encouraging further investment.
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Call Center Gangs: These operate as a team, randomly dialing numbers to reach potential victims or using automated messages. They impersonate government officials, police officers, or bank employees to scare, excite, or tempt the victims into quickly making transactions at an ATM or transferring money via applications, without realizing they are sending money to criminals.
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Cyber Criminals: These are online criminals who use various tricks to deceive people into giving away information or transferring money. Their methods include:
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Pretending to be a bank by sending SMS or email to deceive victims into entering their information on a fake bank website or application, then using the obtained information to steal money from their accounts.
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Impersonating you on social media such as Line or Facebook to deceive your family or friends by claiming to be in trouble and urgently asking them to transfer money to help.
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Romance scam: typically initiated through dating websites or social media by using a profile picture of an attractive foreigner. After a period of conversation to gain the victim's trust, the scammer will deceive the victim by claiming to send property or gifts, but the victim must first transfer some money.
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Pretending to be an online store, tricking victims into paying for cheaply priced products, but then not sending the products and disappearing.
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Pretending to be an online customer, purchasing products and sending a fake payment slip, thereby receiving the products for free without payment. Alternatively, the scammer may deceive the seller into providing account numbers, phone numbers, or other personal information from the seller's ID card to open e-wallet accounts and transfer money out of the victim's bank account.
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Financial protection spell
Three financial safety spell include:
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Don't believe: Stay calm and don't believe things that make you panic. Always question yourself if this is real. If unsure, immediately call the agency being impersonated to verify.
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Don't click: Don't accidentally click on strange links sent via SMS or email, as they may lead to fake websites designed to steal your personal information to rob money from your account.
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Don't transfer: If asked to transfer money in advance, do not do it under any circumstances. This is the final trick scammers use to steal money from your account.
04
Career paths and finances
The Importance of Knowing Yourself
Exploring oneself early on, starting with one’s dreams, helps us understand ourselves better. Moreover, it is undeniable that every dream we want to pursue involves money to drive that dream to success. The sooner we understand ourselves, the sooner we can plan our finances to support those dreams.
Understanding Your Career
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What is a profession? A profession is a job where one uses “effort” or “knowledge and skills” to exchange for compensation, which often comes in the form of salary, wages, or profits from sales.
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Why pursue a career? Because having a career provides us with financial returns, which are necessary for living. Additionally, a career is linked to the economy and society because our income is spent on goods and services, leading to production in the economic system. When producers earn money from selling goods and services, they also spend that money, creating a cycle in the economic system. Although a career is a primary tool for generating income for our livelihood, if we do not manage our finances well, it may lead to future financial problems.
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Learning Skills is crucial in today’s rapidly changing world. There are two types:
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Re-skill: Acquiring new skills to adapt to changes, such as adding sales skills and media use for farmers to meet current market demands.
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Up-skill: Improving existing skills to a higher level, such as learning new technologies to update work processes in a digital-era industry.
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Understanding Your Finances
Studying finance is essential and beneficial for students as it helps them plan for long-term living, such as what profession to pursue, whether to marry and start a family, when to retire, and how to live post-retirement. Having a vision of oneself in the future helps in estimating the amount of money needed and managing oneself today to achieve those goals. Educational systems abroad increasingly emphasize financial education, with some countries requiring personal financial planning as a condition for high school graduation, such as the United Kingdom, Northern Ireland, and Scotland.
05
The financial economic system
Learning about personal financial planning requires us to understand the surrounding context of the country's economic and financial system. Although it might seem distant, it actually has the greatest impact on our personal finances
Economic System
Self-exploration from an early stage, starting with one’s dreams, helps us understand ourselves better. Moreover, it cannot be denied that every dream we wish to achieve requires financial involvement to drive that dream to success. Knowing oneself early allows us to plan our finances to support those dreams more promptly.
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Market and Economic Units
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Market: This refers to a place where there is “exchange” of goods and services of the same kind through multiple transactions. Exchange occurs when buyers and sellers agree on the price and quantity of purchases at a level both parties are satisfied with. When multiple markets for goods, services, and financial assets come together, it is called an “economic system.” For an economic system to function, it requires circulating capital as a medium of exchange.
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Economic Units: These are entities involved in trading within the economic system, divided into three sectors:
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Households: These are individuals or the general public who act as consumers and own resources or factors of production for goods and services.
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Business Sector: These are individuals or groups who operate businesses to produce and sell certain goods.
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Government Sector: This includes the government and the central bank. Both are responsible for setting national policies, but each focuses on different aspects of policy.
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Inflation and Deflation
In an economic system, the prices of goods are determined by demand (buyers' desire to purchase) and supply (sellers' willingness to sell) for that product. If buyers demand more of a product than what sellers can produce, the price of the product will rise, leading to inflation in the economy. Conversely, if the demand for a product is less than the amount sellers can produce, the price of the product will fall, leading to deflation in the economy.
Inflation
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Prices of goods and services are rising
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Production costs are uncertain
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The amount of money in the economy is excessive
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The value of money decreases / Purchasing power decreases
Deflation
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The prices of goods and services have decreased.
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Employment has decreased.
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The amount of money in the economy is too low.
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The value of money has increased / Purchasing power has increased.
Monetary Policy: It is one of the tools used to maintain the stability of the economic system but operates through the financial system or by controlling the money supply in the economy to ensure currency stability (neither too weak nor too strong). The central bank or the Bank of Thailand (BOT) sets the monetary policy. When the goal is to stimulate economic growth, the BOT will lower the policy interest rate, which makes the interest rates charged by commercial banks to borrowers cheaper. This encourages people to borrow more money for investment or spending, which in turn helps stimulate economic growth. Conversely, when the goal is to slow down an overheated economy, the BOT will increase the policy interest rate, making borrowing more expensive and thereby reducing spending, which helps to control inflation.
Fiscal Policy: It is a tool used by the government to manage the economy through public spending. When the government wants to stimulate economic growth, it needs to increase the money available to the public or the economy by reducing taxes and increasing spending through investments and various measures. Conversely, when the government wants to slow down an overheated economy, it needs to withdraw money from the public or the economy by increasing taxes and reducing public spending.
Financial System
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Financial Institution: Plays a crucial role as an intermediary to mobilize funds and allocate them to various sectors of the economy through lending and providing payment services for goods and services. These institutions can be categorized into three main types:
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Deposit-Taking Institutions: Serve as the main intermediaries by collecting deposits from savers and providing loans to households and businesses, such as banks and credit unions.
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Non-Deposit-Taking Financial Institutions: Act as intermediaries that do not accept deposits from the public but still provide loans or act as intermediaries in investments and insurance, such as securities companies, insurance companies, and lending companies that use their own capital to issue loans.
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Other Financial Service Providers: Offer financial products or services beyond deposits, loans, insurance, and investments, such as electronic payment service providers (e-payment), etc.
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Financial Products & Services: These are financial tools that help create, protect, accumulate, and transfer wealth to individuals or groups. They are categorized into six types as follows:
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Deposit account
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Savings account
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Current deposits
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Fixed deposits
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other types of money, such as tax-free deposits
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Deposit-like products
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Savings lottery
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Savings life insurance
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Money market funds
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E- payment
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Electronic card
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E-money
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mobile/internet banking
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Promptpay
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Loan
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Retail loans such as credit cards, student loans, loans for housing/car leasing/personal loans
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Business loans
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Guarantee
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Life insurance
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Health insurance
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Accident insurance
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insurance
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Investment products
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Debt instruments such as bonds, debentures
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equity instruments such as stocks, mutual funds, derivatives, gold, real estate
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Financial Regulatory Agencies: There are three agencies, including:
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Bank of Thailand (BOT): Responsible for overseeing deposit-taking financial institutions and non-deposit-taking financial institutions that provide loans.
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Securities and Exchange Commission (SEC): Responsible for regulating investment-related businesses such as stocks, mutual funds, and provident funds.
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Office of Insurance Commission (OIC): Responsible for overseeing the insurance industry.
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06
The rights and responsibilities of financial service users
The Importance of Knowing the Rights and Duties of Financial Service Users
Rapid technological advancements have led financial service providers to develop a variety of service models to meet customer needs. As financial service users, we should be aware of the complexities and risks that come with using these financial services.
Rights of Financial Service Users
There are four basic rights that should be received from the practices of financial service providers, which include:
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Right to be informed ( received accurate information)
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Right to be heard ( Right to raise voices)
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Right to choose ( Right to choose products and services freely)
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Right to redress ( Right to receive information)
Responsibilities of Financial Service Users
In addition to financial service providers having to offer services responsibly, customers must also use the services responsibly. This mutual responsibility helps to reduce potential risks and damages. The duties that should be performed as a financial service user are as follows:
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Plan Your Finances
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Stay Informed About Financial News Regularly
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Understand Details and Compare Information Before Using Services
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Verify the Accuracy of Every Financial Transaction
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Pay Debts When Due
07
Taxes and income
Understanding Taxes
The government is responsible for facilitating and providing welfare to the citizens of the country by offering public services such as roads, public transportation, water systems, and electricity, collectively known as basic infrastructure. These services require high investment costs, and the private sector is often reluctant to invest because it may not be financially viable. Therefore, the government must find funds to invest on its own by collecting from those who directly benefit, which are the citizens. Taxes are thus similar to communal fees that citizens must pay. In other words, paying taxes is a duty of all citizens in the country to receive these public services from the government. The amount of tax each person pays depends on their income, spending, and assets. Taxes are divided into two types:
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Direct Taxes: These are taxes collected from the income and assets of individuals or entities. They generally cannot be transferred to others. Examples include inheritance tax, local maintenance tax, and personal/corporate income tax.
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Indirect Taxes: These are taxes collected from consumers when goods and services are sold. The tax burden can be fully or partially passed on to the buyer or consumer, who then pays the tax on behalf of the seller. Examples include value-added tax (VAT) and excise tax.
Income Tax
Income tax is a direct tax collected from individuals who earn income. It is divided into two categories:
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Corporate Income Tax: This tax is collected from the income of entities registered under the Civil and Commercial Code, such as companies and limited partnerships, as well as state organizations and foundations.
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Personal Income Tax: This tax is collected from the income of individuals who are not part of any group or organization as defined by law.
What to Know About Income Tax
Assessable Income: Since individuals have different professions with varying levels of difficulty and costs, the law divides income into categories for fair tax calculation. There are eight types of taxable income:
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Income from Employment
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Income from Service Provision
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Income from Royalties, Rights, and Intellectual Property
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Income from Investments
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Income from Property Rental
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Income from Independent Professions
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Income from Compensation
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Other Income, such as Sales and Profits from Agriculture
Expenses
These are tax benefits prescribed by law, depending on the type of assessable income. For example, office employees have expenses that the government allows to be deducted from their net income, which differ from those of doctors because these two professions have different types of assessable income.
Tax Deductions
These are tax benefits prescribed by law, and each person receives different deductions based on their status or liabilities. We can manage or plan our own tax deductions.
Progressive Tax Rate
This is a stair-step method of calculating tax rates where each bracket of net income has a different tax rate applied. The more net income one has, the more tax they pay; conversely, the less net income, the less tax they pay.
Personal Income Tax Calculation
This is calculated from the assessable income or the income earned throughout the year, minus expenses (either a lump sum or actual expenses, depending on the type of income), and minus various deductions. This gives the net income which is used to calculate the tax at progressive rates.
Calculation Formula: Assessable income (per year) – Expenses – Deductions = Net Income
08
Debt and Debt Management
Causes of debt problems: They can be divided into three main causes as follows.
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An unexpected event occurred
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medical fee and need money urgently
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Unemployed
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Financial disaster
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Deceived into investing
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invited/tricked into gambling
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Lack of financial knowledge
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Using the wrong type of credit
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not being able to assess the ability to repay
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What knowledge will help us avoid debt problems?
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Know the types of debt: Debt is divided into three categories:
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Good Debt: Debt that can generate income for us, such as loans for education or debt for long-term stability, like a home loan for residence.
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Cautionary Debt: Debt that does not generate income or debt that exceeds the ability to pay, such as credit card debt and personal loans.
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Dangerous Debt: Debt taken for gambling, betting, illegal investments, or loans from unregulated sources.
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Know the types of credit: Currently, there are many types of credit, and the most commonly encountered are:
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Credit Card Loans: This is the most common type of credit. We can use credit cards to purchase goods and services without immediate cash payment. There is an interest-free period as determined by the card issuer (approximately 45-50 days). If the borrower does not repay on time or only makes partial payments, they must pay interest, penalties, service fees, and charges to the card issuer.
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Personal Loans: These loans are for consumption without an interest-free period. The borrower must pay interest, including penalties, service fees, and charges to the lender.
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Car Leasing: This is a transaction similar to providing credit, where the lessee pays for the goods in installments over a specified period. During this period, the lessee can use the leased property, with ownership transferring to the lessee once full payment is made as per the contract.
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Housing Loans: Loans for housing, including purchasing land or borrowing for home renovation or improvement, with the house or land mortgaged as collateral with the financial institution.
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Appropriate debt repayment ratio: The total monthly debt repayments should not exceed one-third of your income to prevent overburdening yourself with debt and to ensure you have enough money for daily living.
What to do when you can’t pay off debt?
1. Negotiate with the creditor: If the debt problem persists, approach the creditor to discuss and find a solution together, such as reducing the payment amount per installment, extending the repayment period, or refinancing with a creditor that offers a lower interest rate.
2.If treated unfairly, file a complaint with the regulatory authority: If you feel you are not being treated fairly after talking to the creditor, you can file a complaint with the relevant regulatory authorities.
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Organisation that is in charge ( only in Thailand)
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Bank of Thailand ( Tel.1213): credit card, personal loan, car leasing and housing loans
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Office of the Consumer Protection Board ( Tel. 11660): Hire purchase ( lessor that is not under the supervision of the RTA)
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Informal financial notification center Fisical policy office ( Tel. 1359): informal debt
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09
Planning for Retirement
The Importance of Retirement Planning
To live a happy life after retirement, you need to have enough money to cover necessary expenses and enjoy some small pleasures without being a burden on your children. Unfortunately, many people still mistakenly believe that preparing for retirement is only for older individuals close to retirement. In reality, a comfortable retirement requires long-term planning from the very beginning of your career. Planning close to retirement is not only more challenging and stressful than preparing early on, but it may also be too late.
How to Calculate the Amount of Money Needed for Retirement
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To have a clear and realistic retirement plan, you need to know how much money you need at retirement. This can be calculated using the following formula:
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Amount needed at retirement = "Estimated monthly expenses" x 12 (to convert to annual amount) x "Estimated number of years to live after retirement"
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Example: For a retirement lifestyle where you want to live comfortably, have enough money for daily expenses, sufficient funds for medical care, the ability to travel abroad once a year, and occasionally support your children, you will need 50,000 THB per month. Multiply this by 12 and assume you will live for another 20 years after retirement. The total amount needed at retirement would be 50,000 x 12 x 20 = 12,000,000 THB.
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Once you know the amount of money you need, you can calculate the "monthly savings required" for your retirement plan using this formula:
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Monthly savings required = Amount needed at retirement ÷ "Number of working years" x 12 (to convert to monthly savings)
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Example: If you need 12,000,000 THB for retirement and you work as a salaried employee, planning to retire at age 60 and you are currently 25 years old, you have 35 years of working time. Multiply this by 12 to get 420 months. Therefore, the monthly savings required would be 12,000,000 ÷ (35 x 12) = 28,571 THB.
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4 factors that might cause retirement funds to be insufficient
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Longer Life Expectancy
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(Living longer than expected)
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Due to advancements in medicine, people tend to live longer. Savings may not be enough.
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Sudden Illness
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(Unexpected new diseases)
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Sudden illness can require expensive treatments. Insurance or welfare benefits may be insufficient.
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Inflation Erosion
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(Thinking money will retain its value)
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Inflation can erode the value of saved money. Insufficient savings may lead to a lower return on investment.
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Financial Scams
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(Even if not invited, they come)
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Often, there are professional scammers who target the elderly because they have retirement funds.
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10
investment
Differences Between Saving and Investing
Saving involves putting aside small amounts of money over time to accumulate more as time passes. Savings are typically held in bank accounts, earning interest as returns. In contrast, investing involves using accumulated money to generate returns higher than those from savings. Generally, investments come with higher risk compared to saving.
Assessing Yourself Before Starting to Invest
Self-assessment in all areas will help determine which saving and investment options are suitable for you. You can assess yourself in the following four aspects:
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Investment Goals: You need to answer what you want to invest for, how much money you need, and when you want to achieve your goals.
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Investment Constraints: These include investment duration, liquidity needs, tax burdens, legal restrictions, and specific limitations for individual investors.
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Desired Returns
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Acceptable Risk: This refers to the level of volatility from investments that an investor is comfortable with while holding assets in the specified proportions.
Assessing Yourself Before Starting to Invest
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Tangible Assets: Such as real estate, physical objects, jewelry, gemstones, and amulets.
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Financial Products: Such as savings accounts, savings bonds, bonds, stocks, mutual funds, etc.