Gen Z's money struggles get real on the Life and the City podcast as hosts Aida Ahmad and Farid Wahab breaks down budgeting, debt, and investing with licensed financial planner Hazel Ong Archibald.
From higher costs of living to the rise of the gig economy, young people are facing a multitude of financial challenges including making forceful savings.
Expect eye-opening discussions on smart budgeting, tackling debt, making investments and securing financial stability, including busting the myth that financial planning is only for the rich.
Find out ways Gen Zs can avoid falling for "financial trends" that could hurt their pockets in the long run. Don’t miss this essential conversation — your bank account will thank you!
The podcast series airs fortnightly and highlights topics related to urbanites.
It is available at www.youtube.com/@thestaronline/podcasts and on www.thestar.com.my/metro
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
From higher costs of living to the rise of the gig economy, young people are facing a multitude of financial challenges including making forceful savings.
Expect eye-opening discussions on smart budgeting, tackling debt, making investments and securing financial stability, including busting the myth that financial planning is only for the rich.
Find out ways Gen Zs can avoid falling for "financial trends" that could hurt their pockets in the long run. Don’t miss this essential conversation — your bank account will thank you!
The podcast series airs fortnightly and highlights topics related to urbanites.
It is available at www.youtube.com/@thestaronline/podcasts and on www.thestar.com.my/metro
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
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LifestyleTranscript
00:00You know, Aida, when I was a student in university, I was on government scholarship, so I didn't
00:09care much about financial planning. But it was only after I started working and wanted
00:15to buy my car that I began to realise how important that I, you know, I put everything
00:21on an Excel spreadsheet. I began calculating how much money I would need every month. So
00:25I think for me, financial planning started a bit late. So what do you think?
00:31I think you started off well ahead of a lot of, I would say, the younger generation now,
00:39which is a good thing because we tend to take for granted our financial planning. Am I right?
00:45And that's something that we can talk about today because we have a guest with us who
00:52used to be a journalist and now she is a financial planner. And we will talk about
00:57financial planning and how Gen Zs can prepare ahead because from what we read today, Farid,
01:06it can be quite daunting. You know, from everything to saving in our EPF to private retirement
01:14schemes, you know, it can be confusing and overwhelming. But it's good that we can talk
01:19about it. Before we get to that, here are some of our key stories in The Star today.
01:27One of it is the health ministry has clarified non-regulation of private healthcare facility
01:32fees. That has also been a point of contention in our country. And the other thing is the
01:40whole brouhaha about drugs and concerts. There are no plans for compulsory urine tests for
01:47concert goers. They don't want to write yet heard. And it's Ramadan, so people are happy
01:53checking out their Ramadan bazaars. And we will feature some key favourite ones in Star
02:02Metro soon. Right. Let's introduce our guest, Farid. Would you like to do the honours?
02:09Yes. We have a financial planner with us today. Could you please introduce yourself to our
02:15listeners?
02:16I'm Hazel.
02:17Thank you very much. I'm so happy to be back here.
02:20Yes. You used to work here.
02:23Yes. Well, yes. Technically, but not in this venue.
02:28So Hazel Ong, you are now a financial slash wealth advisor.
02:34Yeah. Licensed financial planner.
02:37That's the operative word. Licensed.
02:39Yes. Licensed.
02:40Because we've heard a lot of, what do you call it? Finfluencers.
02:43Yes.
02:44That's also another key trending influencer now. Finfluencers. Financial influencers.
02:51Please tell us something about what you do, Hazel.
02:55Okay. So, what or who is a financial planner, right? I think this morning, your colleague
03:02Farid asked me. So, I want to throw the question back to Farid. He can again answer it. So,
03:09when I say I'm a licensed financial planner, what is the first thing that comes to your
03:13mind?
03:14My immediate thought was, are you an insurance agent?
03:17Ah.
03:18Yeah.
03:19So, I think the majority of Malaysians think that. Okay. Even if they don't say it, but
03:24they think it. Okay. Because so many years in Malaysia, we have agents. Okay. Whether
03:29they are insurance agents or unit trust investment agents or agents doing wills and trust and
03:36all that. So, they are agents doing their respective areas, which are also pillars of
03:41financial planning, but they don't come together. All right. Or if a person does it, the person
03:47has got individual licenses, but not a financial planner. Now, the difference is a financial
03:54planner, we don't look at what the product is for the client. All right. We first want
04:00to diagnose the client's financial health. So, it's like doing a health check, but a
04:06financial health check.
04:07That's interesting.
04:08Yes. So, when we meet with a client, we will go through the different things like their
04:14cash flow, their asset and liabilities, and then we will ask them their goals and what
04:20they want in the future. So, at the end of that diagnosis, they will know what they have
04:25done well, what they need to improve, what are their blind spots, and what they need
04:32to rectify if they are in a bad situation. And if they are in a good situation, how to
04:38achieve their goals even faster.
04:40Right. So, the key thing that you will educate us on today is Gen Zs.
04:47Yes.
04:48Because what we've read so far and what we keep reading is that people don't have enough
04:54time for their retirement. So, what can people do is to save early. Am I right? I mean, it's
05:00more complicated than that, right? And maybe you can tell us some of the challenges that
05:07you experience when dealing with your clients.
05:12Okay. Gen Z or…
05:14Let's start with…
05:16Okay.
05:17Let's start with, let's say, maybe the middle age and then we get to the Gen Zs.
05:22Actually, I've been reflecting since you gave me this topic. All of us need the same
05:28fundamentals, alright? Whether you are a boomer, whether you are a Gen X, which that's my
05:35generation, yeah? Or whether you are a millennial, or whether like my daughter, Gen Z, the fundamentals
05:43do not change. Just like the law of gravity.
05:45Right.
05:46The law of money is like, you must follow the fundamentals, okay? If this much you earn,
05:54you must live below your means. Not within. Kalau within, there's nothing else to save
06:00and invest for the future, alright? So, below. So, these laws of money, I would say, regardless
06:07of generation, we have to follow them. And a lot of people, right, when they start to
06:14earn a better income, the challenge I feel is because they don't sit down and like Farid
06:20shared earlier before we started, have an Excel spreadsheet to track. In their mind,
06:26they think, wah, income sudah naik. So, I can actually increase my lifestyle without
06:31actually calculating first.
06:33Yeah.
06:34So, many people will just go ahead and buy, especially so much temptation, right? There's
06:38Shopee lah. There is Lazada.
06:41Online shopping, yeah.
06:42So many apps, right? And it's just every time, ting, ting, ting, ting, there's so much of
06:48temptation and people now have a buy now, pay later.
06:52Right.
06:53So, another temptation there, besides credit cards.
06:57Smartphones.
06:58Yes. So, they get trapped so easily. And before you know it, instead of having living below
07:04your means, it's within already or even worse, above. And this above problem is where we
07:10get the deficit cash flow leading to debt problems, you know, hutang banyak and then
07:16some take along punya hutang. So, that is the craziness, personal loan and all that.
07:21So, the sakit that I always encounter, the penyakit, is to make sure that people are
07:28aware that they have a problem, first of all, and to quickly remedy it.
07:35So, yeah, let's get to it. How does the Gen Z's financial situation compare to, let's
07:44say, the previous generation in terms of income, cost of living and stability? Because you
07:49also mentioned, if the income is small, it's more important to plan.
07:53Very important.
07:55Is this what you tell your daughter?
07:56Yes.
07:57Okay.
07:58So, she kind of get, ah, mummy is going to say that already. So, she said, okay. All
08:02right. So, in terms of, let me just see. In terms of income, Gen Z, I think the oldest
08:10would be around 28 this year. So, they are entering a job market where the seniors would
08:16be maybe your generation X people or your millennials. So, of course, they would be
08:23at the entry level kind of income, right? Already that would make them have to plan
08:29much better because if they simply use and they start using credit card, then they will
08:34end up in the hutang punya category, which we don't want, yeah? And cost of living
08:40is so expensive, you can, you don't even have to calculate inflation. I think if you
08:46think back 10 years, how much was food that you buy, you know, or drinks that you buy.
08:53So, these are very real things. And although we say that the income could have increased,
08:59but it doesn't commensurate with the increase in inflation, yeah? So, that's why they
09:04are at a disadvantage in that sense. And financial stability, if they do not plan, then how
09:11to be stable? So, they have to plan. Very important.
09:15Hazel, what are some challenges that are faced by Gen Z today? You mentioned inflation,
09:21how about student debt, affordable housing? Because I'm thinking that there may be some
09:30challenges that Gen Z today face that the older generations probably did not face. Is
09:37that true or do you think that's not the case?
09:40Actually, if you ask me from my own personal experience, it's not that far away. Because
09:47when we were younger, say for example, I look back, I was reflecting last night. Although
09:53the houses were not as expensive, but the income also was smaller, you know? So, it
09:59kind of balanced back, yeah? So, if you really want to say, well, today, everything's so
10:06expensive and all that, but it was about the same, okay? And if there's time, I will
10:12share. Last time, my first paycheck was only a few hundred ringgit.
10:15Same?
10:16Yeah, a few hundred ringgit. And yet, we managed, you know? I can even help support my family
10:21because I came from the 1980s recession. So, at that point in time, we were having a crisis
10:28as well. And I feel that every crisis, right, presents an opportunity. Because when there
10:35is a crisis, Gen Z-ga, Gen X-ga, whatever, we will have to learn to adjust and we will
10:40have to learn how to manage with what we have. So, I think sometimes crisis is also good
10:46in hindsight, yeah? So, when you say, is it very challenging for them? Yes, it's challenging,
10:54but they can overcome it. They can, with proper planning, yeah.
10:59Is there a misconception among the younger people who think that financial planning is
11:06only for people who have a lot of money or high incomes?
11:12To me, I think it's a myth now because the more we put this thought in our mind, oh,
11:19financial planning is only for the high income earners, then we won't seek someone to help
11:24us plan our finances. Or we won't seek resources to plan because, oh, only people with money
11:29only plan. Actually, people with less money, even more important. Imagine, you have to
11:35stretch your ringgit even more, right? So, if you do not sit down and really plan it
11:41out, you're going to be off target a lot, yeah? And that time is too late lah. So, hopefully
11:47today, our podcast, we can help people to take time, sit down and plan.
11:55Hazel, there are jobs today that did not exist back then. And some Gen Z, even millennials
12:01are employed in these jobs, like gig, I mean, they are employed in gig economy, freelancing.
12:07So, how does that factor into their financial planning? How does that change their financial
12:12planning?
12:13Okay. Very good question. I have been thinking a lot about this because my daughter is Gen
12:21Z and she is going to enter into a career soon, yeah? Because she is at the tail end
12:27of her high school. So, being in a gig economy is even, even more important.
12:37Because there's no false savings.
12:38Yes, there is no EPF. If you were to work for a company, they would at least give you
12:44an EPF, a minimum wage, whereas if you work on your own in a gig economy, if you are not
12:50so hardworking or disciplined, you may not get enough to survive also, alright? And without
12:56the EPF, false savings, are our Gen Z disciplined enough to put aside money every month?
13:04To build a nest egg, yeah.
13:06Okay, that is one. If you join a company, they might give you free insurance, okay?
13:13But if you work on your own, anything, yeah, if anything happens and you think,
13:18oh yeah, insurance ah, maybe for older people. No, insurance, the younger you are, the better,
13:23okay? Because you pay less premium for a bigger coverage. And you need that as early as possible
13:29if you are a gig economy person, you know? Because no one is going to pay for your expensive
13:34medical bills which you just mentioned earlier.
13:37And insurance is another topic, big topic.
13:41Yes.
13:42Just to chime in, if I remember correctly, I think a few years ago, Perkeso did introduce
13:47a program where gig workers can sign up for some kind of protection or coverage, but I
13:53can't remember, I need to go back and look at it.
13:55And there are also general insurance companies that are offering much cheaper medical cards.
14:00Affordable.
14:01But still, you have to pay for it yourself.
14:02Correct, yes.
14:03It's not free, but that's another topic. And it is a topic that you cover in, you sort
14:10of take care of in your service, correct?
14:13Planning, yeah, yeah. Because if there's no planning there, it will come back and bite
14:17someone. If they are only focused on savings alone and they don't protect themselves from
14:23disaster or crisis, it will come back, yeah? So, that's why, very important.
14:30Let's talk about financial literacy. It is often overlooked, wouldn't you say?
14:35Yes, very much.
14:36So, how can the Gen Z educate themselves about this? Like you mentioned before, there are
14:45pros and cons to the finfluencers we see now on social media, right? And some of the general
14:53advice doesn't really work, would you say?
14:58Tell us about that.
14:59So, your question was, is it overlooked, financial literacy?
15:04Financial literacy, yeah.
15:05Definitely. Now, I ask you, did you learn money in school?
15:09No, unfortunately.
15:10None, right? Even very highly qualified people on scholarship or even myself when I was studying
15:17my tertiary, nobody taught us about managing our money.
15:20We learn the basics of economics and pedagangan in school.
15:25But that is like doing business.
15:27Correct.
15:28But how about our own cash flow, our own asset liability, nobody talks about that, yeah?
15:33Even I meet some accountants, they said, oh Hazel, I'm only good at managing my company's
15:38finances, my own one, I don't even have time to look at it.
15:41So, personal finance is really overlooked and the literacy level is considered low,
15:47but it's improving, okay? Thanks to technology, thanks to social media, and as you pointed
15:54out, suddenly, right, mushroom here, mushroom there, a lot of fin-fluencer.
15:58Yeah.
15:59Okay, whether they are really qualified to give advice, that is another thing that people
16:03must be cautious, you know? Because sometimes, influencers or financial influencers, fin-fluencers,
16:09they may be getting a gig economy thing, they are paid to promote something and sometimes
16:16it could be a service, a financial service or a training program that they are doing.
16:21So, we want to find out for sure, what is their motive? Are they giving solid kind of
16:27advice? Because, yeah, be careful, okay? And general advice is general.
16:35If I have a life situation that is very unique or I know that I do savings a certain way
16:42or I have to take care of my family, I have all kinds of different commitment in my life,
16:48a general advice does not apply to me, you know? Unless this fin-fluencer come and sit
16:54down with me and then I share what is actually happening in my life, can I take that advice
17:00for real, okay? So, specific advice would be what a licensed financial planner would
17:05give and that would be a better advice than if you were to listen just, you know, for
17:12free advice from fin-fluencers. But of course, having said that, there are good and renowned
17:17fin-fluencers. So, we just have to do our due diligence. If you are Gen Z, please, not
17:23the first thing you hear is the truth, always check it up, alright?
17:27But these renowned fin-fluencers, do you know if they are licensed? How is the licensed
17:33part coming to carry its weight here, being licensed?
17:40Okay, you can go to Securities Commission and you just type the web, you search for
17:45the website, you can actually check if the person who you are seeking advice from is
17:51a licensed planner, alright? You key in their name and then you will see, oh, their number,
17:58okay? Because that is very important. Just like if you go to a doctor, how do you know
18:05a person is a doctor or a quack or, you know? It's because of their certification, right?
18:10That's also another topic. Motivational speakers.
18:15Hazel, social media have, I mean, have a massive influence on people's spending behaviour.
18:22So, for example, when I see photos of my friends travelling, when I see them posting with their,
18:27I don't know, Louis Vuitton handbags, I might want to do the same thing. So, that might
18:32change the way I spend, you know, because I feel I don't want to have this fear of missing
18:37out. So, how much influence does social media have on people's or Gen Z's spending habit,
18:44do you think? I think a lot. I had this conversation, especially
18:49after you invited me with my daughter. My daughter is not at the age where she's buying
18:55Louis Vuitton, but she's at the age where she's looking at her friends having Stanley
19:01bottles. I don't even know what is that, okay? This old.
19:04Fancy, yeah. Yeah. So, the mother is like, what? Stanley
19:08bottle? Yeah, my friend got this. And then there's the La Boubou and, you know, all that.
19:14What's that? La Boubou.
19:16Those dolls, you know. I feel these dolls look like the monkeys.
19:21Yeah, yeah. It doesn't look pleasant to me. It looks scary.
19:25You see, social media has influenced her. Keeping up with the Joneses.
19:30Everyone has it. Maybe I should consider it. But the good thing is she knows La Boubou
19:34is not her thing. But there are other things, you know, that she's influenced. And then
19:39she will come. The good thing is she hasn't earned her own income yet. So, still have
19:43to come and consult. So, I said, okay, you cannot have this because it's not going to
19:49help you in any way. And it's not cheap.
19:51It's not cheap. Those fancy flasks that you mentioned.
19:54So, imagine if she starts earning and there is no filter, no mommy or whoever to filter
20:00it. Imagine what is the first thing? Buy lah. After you buy, buy, buy. At the end of the
20:06month, oh, oh, oh. Sudah merah, red already, right? Deficit. So, yes, it is a very dangerous
20:13world we live in because the algorithms, the moment you search something, right? All your
20:18feed will be filled with all the things you desire.
20:21Yeah, yeah. It's just giving you that instant gratification, that dopamine hit, right?
20:26Yeah, yeah.
20:27Before we get to budgeting and saving, maybe you can share with us, Hazel, what are the
20:33top three red flags when you get your clients coming to you for financial advice? Top three
20:40red flags that we need to know in terms of financial planning.
20:46What do you mean red flags? Maybe you can elaborate.
20:49Meaning, you mentioned that you see people who are in the red but don't know it.
20:56Yes.
20:57Something like that.
20:58I get this quite often. They will tell me, Hazel, I feel I have a money issue. I feel
21:05like I'm spending more than I earn but I don't know lah. I have just a feeling only because
21:11they didn't sit down and do Excel, right? Okay. So, that is one of the red flags. I
21:18can guess it's either they are just like living within their means to the scraping point or
21:23they are actually deficit. And why people don't realize they have a deficit is because
21:28they do have like a savings account or some buffer which they have collected or accumulated.
21:34So, when there is a deficit, it comes from there to save them. So, they know they have
21:40a problem but they don't know exactly how much, yeah? So, when there's no clarity, it's
21:45like you're living in a blur world. So, clarity is power. And the only way to get clarity
21:51is to do that financial health check I told you about, you know, sit down and find out
21:56your cash flow, find out your assets and liabilities and then you will know your position, where
22:01you are now.
22:03Hazel, what are some steps that Gen Z can take? You know, say, you know, someone like
22:10your daughter, maybe in a few years, they will start working. So, what are some steps
22:14they can take to make sure that they don't end up in the red?
22:17Okay. Good thing you say. First, they must get financial literacy, okay? I can't stress
22:26how important that is and that's why I think there are some agencies now, I know, because
22:33my friend's daughter is actually involved in that, where they go to education institutions
22:41and they are trying to bring financial literacy into it. So, if you are a Gen Z and you hear
22:48of these kind of programs, like real renowned programs, do sign up for something like that,
22:54yeah? Workshops and all that. Prepare yourself to know where you are now financially or if
23:01you have not entered the job market, that's the best time because you haven't made any
23:05mistakes yet. Start to plan, okay? Do the budgeting, which we will be talking about
23:13and then the great thing about Gen Z, I would say, I read about Gen Z a lot these days,
23:22I was told, I don't know how far it's true, that you are more environment conscious and
23:28things like that. So, that is a plus point I find because if you are that kind of person,
23:34then some of the habits of environmental friendly people help to save money. One, take public
23:41transport instead of buying a car so fast, right?
23:43And contributing to carbon footprint.
23:45Yes. And you save. Like, I am not a Gen Z but I believe in that. So, like I come here
23:51today by public transport, we spend really little a month and there's no car maintenance,
23:57no road tax insurance and all that, okay? Save a lot. So, if they are very environment
24:04conscious, they can do that. Also, if they really love the environment, they would use
24:09less air con, right? And the electricity bill will also come down.
24:13In this heat, that's quite challenging.
24:15But there are ways. There are ways. Going to, okay, go camping in the nature where it's
24:21cooling and all that. So, you actually save, okay? I advocate that because I love going
24:27to nature. And also, they are more open to thrift stores, buying pre-love things.
24:37Yeah, this is pre-love.
24:38Yeah, pre-love.
24:39Those bundle shops.
24:40It's okay now. It's even trendy, you know, to be pre-love and all that. So, if they can
24:46get into that kind of thinking young now, they really can save a lot. And no, you know,
24:52must only have Louis Vuitton, must only bear branded and all that. And they want branded.
24:58Pre-love branded is affordable, right?
25:01Yeah, there are some good shops out there.
25:02Yeah, so these are the things that before they go out, we have to let them know if they
25:07have no idea yet. I think they are quite good at that. My daughter knows how to do the thrifting
25:12thing.
25:13I think it's good that you mentioned that about how prepare before you go out on your
25:18own, move on your own, get your own car, apartment to rent or whatever. Because I think now,
25:26we tend to, or the Gen Z's tend to take things for granted because a lot of them are still
25:32living at home with the folks. So, folks are paying for the food, you know, electricity,
25:38everything. So, that push to kind of take things to task on their own, plan and do all
25:48that Excel spreadsheet and whatever, doesn't really jolt them on the forehead because they
25:55are still living under the parents' roof.
25:57Okay, so it's a very true thing what you mentioned. But I must say that, remember,
26:02I said every crisis, there's an opportunity. I was from the 1980s recession. So, I learned
26:08budgeting on my own because I had to, right? Now, COVID-19 presented a crisis, global crisis.
26:16And if you are a family hit by COVID-19, I think some of the Gen Z's are more grounded.
26:24I would say that because even my family, our income was hit because of some commission
26:30cuts and all that. So, we had to do this budgeting more stringent, you know, we have
26:36to have a crisis budget and things like that. And so, I feel that my Gen Z benefited because
26:43when push comes to shove, no choice, you have to do it. But families that are still nothing
26:50didn't happen and nothing happened to them, maybe they will have Gen Z's that are not
26:55so willing to budget. That is my take.
26:59Interesting. Yeah, I think you're right. COVID-19 presented a different level of problems.
27:06And yes, while it affected the whole world, there are people who were spared.
27:14They didn't suffer too much. And I suppose it presented perhaps a different set of issues
27:24in terms of post-COVID and then you face some difficulties trying to get back into the action
27:33but you didn't prepare ahead of time. You know what I mean?
27:37True. Hazel, when I first started working at about 25 and I wanted to make a loan for
27:45my car, that was when I first heard the term credit score. I had no idea what that was.
27:50I don't think a lot of people know what a credit score is.
27:53And soon after, I also applied for a credit card. I started accumulating all these debts.
27:59So, can you tell us what is a credit score and what's the key to ensuring a good credit score?
28:06Actually, credit score would be your ticket to applying for a loan later in your life
28:14or applying for any credit-related thing that you want to do, especially if you want to buy
28:20your car, you want to buy your house. So, a credit score is important.
28:25Having said that, you had a situation where you didn't have a credit history, is it?
28:30Is that why you asked this question?
28:33Okay. You mentioned earlier you were on scholarship.
28:36Yes.
28:37So, that's why there was no credit history.
28:39Some people, they already take a PTPTN loan or a study loan.
28:45So, that actually helped them to build. They do not need to get a credit card.
28:51In fact, I would tell my client, if possible, not to get so early or if you must get, get only one.
28:59Don't get the habit of getting many and then that is where the problem starts.
29:04Why would you need many credit cards anyway?
29:06Some people do.
29:07Yes, they roll it, okay.
29:09This month they cannot afford, then they use that credit card.
29:12Okay, I better not say, then I'll give ideas, okay.
29:15It will snowball to a dangerous level.
29:18That is the problem. So, maybe just delete that part.
29:21So, anyway, once you have a loan, whether it's a PTPTN loan, you have a credit history,
29:28you have to keep it good.
29:30So, say for example, when people start working and they want to buy a house,
29:36they will take a loan because it's such an expensive one, right?
29:39So, yes, you need to make sure that you always have your payment history clean.
29:46You don't like wait too long to pay, you clear your debts early.
29:52So, that will help you continue to have a good credit score.
29:55And you must make sure that when you take a loan, they will look at your income
30:00and they will look at can you actually afford.
30:03They have a calculation to see that it's only a portion of your income.
30:07You cannot exceed like 30% or 35% and so you must never exceed that.
30:13So, then it will be a better look in your credit score.
30:20And also, some gig economy people, their income fluctuates.
30:25They will look at all your income fluctuating and all that.
30:28So, the bank, when they want to offer you a loan, if you're a business person
30:33or a gig economy freelancer, you will need to show more months of your income
30:40to show your stability.
30:43And if it's fluctuating, they will look at your assets.
30:48Do you have assets like your savings?
30:51How big is it?
30:53To let them consider whether to give you a loan or not.
30:57So, I hope this have helped you to think how to get it healthy.
31:02And not say regularly, maybe once a year, you can just go and print out your secrets
31:08or even go to now the apps you can get your report easily.
31:12Just have a check before you want to take a loan like how does my score look like.
31:17Which app is that?
31:18Can I mention the name?
31:20So, Touch and Go, you can easily buy the CITOS report inside your app.
31:26And it's quite affordable to get the report.
31:29And secrets, you don't even have to pay.
31:31You can go online and get the report as well.
31:34Sorry, where can you get the secrets report?
31:37You just search. I always just type secrets and then it will come out the website.
31:43And you can just follow in the website where you can get your report.
31:48It's quite easy.
31:50Nowadays, as I said, tips of our finger, we can get a lot of information.
31:55So, do you still have any issue with your credit score or no more I think?
32:01So far, I've never had any problem repaying my loans.
32:04I've taken another loan for a property recently.
32:07So, thank God, everything is going well for me.
32:12But yeah, this information would have helped me back then.
32:17I think for yourself moving forward,
32:20also just continue to keep your score beautiful by paying on time
32:26and make sure that it's not too much from your income,
32:30the portion that you're paying for your debts.
32:33So, keep it as low as possible.
32:36You mentioned earlier, Hazel, about the ice jar
32:40and how we can learn to set aside for savings, investments and emergency funds.
32:46Tell us about that.
32:47Okay.
32:48This ice jar is the world's simplest money management system.
32:55And I want to give credit to my friend, my colleague,
32:58Kaho, he is the one who came up with this acronym.
33:02He made it easy for people to remember.
33:04Because sometimes you said the one-third rule or the 33% rule,
33:09all these rules, right?
33:10You can't remember.
33:11But I like the ice jar just to give you a concept.
33:15When you are financially stressed,
33:18do you feel like sweating, cannot sleep, like very hot, right?
33:22So, the ice jar is your antidote to cool you down, right?
33:26It gives you balance in your life.
33:28Okay.
33:29So, it's actually the one-third rule.
33:31Now, can you picture the Mercedes sign, the symbol?
33:36Okay.
33:37So, it's like if you have a circle, one-third would look like the Mercedes sign.
33:41Okay.
33:42Now, why I want you to picture that?
33:44Because Mercedes used to be, I don't know whether it's still a car people look forward to buy.
33:49So, it's like your future goal.
33:51So, if you want a peaceful or balanced financial life,
33:56you want to achieve that symbol, yeah?
33:58The other thing is, if I put I, which stands for investment, under the bottom one-third, yeah?
34:07Then, it will look like a peace sign.
34:09Can you imagine?
34:10Yeah.
34:11Okay.
34:12So, when you finally achieve this balance,
34:15you will have inner peace and you can sleep very well.
34:18Now, good or not?
34:19Sure.
34:20Okay.
34:21So, now, I just want you to picture.
34:23If you are earning $9,000, what is the one-third for each category?
34:30So, I is your investment and saving.
34:32So, if it's $9,000, then it's what? $3,000?
34:35Okay.
34:36Then, your commitment would be another $3,000.
34:39And your expenses would be another $3,000.
34:42So, it's I, C, E.
34:44So, investment, savings, and all that is one.
34:47And then, you have your commitment.
34:49And then, you have your expenses.
34:51Alright?
34:52So, if you want balance, you must make sure that it's one-third, one-third, one-third.
34:58So, it's very simple.
34:59Not so complicated.
35:01All kinds of formulas.
35:02So, if you can calculate where you are today,
35:05just go back and calculate,
35:07you will find whether you are over-committed.
35:09Commitment would be like all your loans, yeah?
35:12Very difficult to come out one.
35:14Means you have to pay long-term.
35:17Alright?
35:18So, your loans.
35:20Maybe you have some people you support.
35:24Financially, you support them.
35:26So, these are your commitments.
35:27And then, your expenses are all the things that you spend on a daily basis,
35:30which you can easily cut now.
35:32Alright?
35:33And then, your savings and investment
35:35would also include things like actually your insurance plans, you know.
35:38So, you can put it inside there.
35:41Alright?
35:42So, it helps you to budget and keep your cash flow healthy.
35:48Now, we talk about investing.
35:50Is there an age where it's still too early to invest?
35:56Should they start investing in their 20s perhaps?
36:00Okay.
36:01Very good.
36:02Actually, this investing thing,
36:05the best time to start was yesterday.
36:08The second best time to start is today.
36:11Okay, why?
36:12Because time.
36:13A lot of people forget.
36:14It's not the amount of money that you use.
36:18It's actually the time you have.
36:20The more time you have,
36:22there is this magic that Albert Einstein said is the 8th wonder of the world.
36:26And that is the magic of compounding effect.
36:29Compounding effect.
36:30Have you heard of this rule of 72?
36:33Heard of it, yes.
36:35Okay, do you know what is it?
36:38Maybe you can explain.
36:39Okay, okay.
36:40Alright.
36:41Rule of 72 will help us actually know how fast or slow our money double.
36:49So, say for example, I just put 1,000 in a bank.
36:53It will take how fast and how?
36:57Depending on the rate of return.
36:59Okay, so you take 72 divided by 8.
37:03What do you get?
37:059?
37:06Yeah!
37:07See?
37:08So, 9 years for money to double if your portfolio is giving you an 8% return.
37:21When you divide, don't put the percentage anymore.
37:24Just use the number only.
37:26Likewise, this rule of 72 will also help you see how inflation can shrink your purchasing power.
37:35So, the same thing.
37:36If inflation is 8%, for example, then it will be 9 years for your purchasing power to shrink by half.
37:46So, it's both ways.
37:48You can use this formula.
37:49So, by using this, people can see how important it is for them to invest in a vehicle that is at least hedging against inflation.
38:01Because if not, by the time you are older, when you reach your retirement, you may think your 100,000 is worth a lot, but actually...
38:09It won't.
38:10So, this one will help you.
38:12And when you start early, the compounding is very powerful.
38:18The compounding will be you use less money to save for your future goal than if you start 10 years later.
38:29So, time is a very important factor.
38:32And this is the beautiful part.
38:34Gen Z, the thing is they have the most time compared to the boomers, the Gen X and the millennials.
38:42They are very young now.
38:44So, they have at least 30 years before retirement.
38:47So, that's their added advantage.
38:49So, if you're listening Gen Zs, this is your superpower.
38:53Time.
38:54And the term retirement also can be pushed now because a lot of people come to retirement age.
39:02They don't really retire.
39:04They're still doing something.
39:05Getting a part-time job or something like that.
39:08Just to continue while they can.
39:10I think if we don't do that, our brain matter will wither away also, right?
39:17Actually, when we say retirement now, it's choosing maybe something that we really like.
39:23Maybe when we were younger, for the sake of money and income to sustain, we had to do a job we don't really like.
39:30But when we retire, with hopefully our nest egg in order, we can go for our passion career.
39:39And do something we really love.
39:41That will still keep us alert and happy and live a good life.
39:48A purpose-driven life, I would say.
39:50How should the Gen Zs balance short-term wants in travel, lifestyle, long-term financial security?
40:05So again, back to the model I gave, the ice jar, right?
40:09They can use that for their budgeting.
40:12But if they are going to do short-term.
40:16So they know that short-term, what does short-term mean to many Malaysians?
40:21Short-term to many Malaysians is like one hour, one day.
40:25But actually, short-term is longer than that.
40:27Short-term is like one year, two years.
40:33Can it be six months?
40:35That is like super, super short-term.
40:38So if you're doing that kind of planning, it must be in a very safe vehicle if you're saving for that.
40:44So they must understand if they are planning to go for a trip in a very short term,
40:49they have to use vehicles that are very safe, cannot have a fluctuation in market cycles and things like that.
40:57So then they should save their money in that vehicle for their short-term trip.
41:03All right.
41:04Maybe in six months they want to go, I don't know, some Asian country or in two years time they want to go for a Europe travel.
41:11So those kind of savings, they must know that they cannot take too much risk for fluctuation.
41:18But if they are planning to buy a house in five years time and they need a good down payment and some excess,
41:26then they can actually save their money in vehicles that have a little bit of fluctuation.
41:31That's where money grows.
41:33And they can take a little bit more risk.
41:36Again, have to look at their risk profile.
41:40If they are the type cannot, still have to go for safe vehicles.
41:43All right.
41:44So they have to know what are their different jars.
41:47So the short-term jar, they have to put these funds in this vehicle.
41:52And then the longer term in another jar for this vehicle.
41:56So that it doesn't overlap and they don't know where their money is.
42:01They must know where exactly the money is going for what goal or what dream.
42:06So that is a way that we help our clients to think and plan.
42:10Hazel, how can young people or Gen Z plan for making some of the early ticket purchase?
42:17For example, like they want to buy a car, say it's a Myvi.
42:20Or they want to buy a property, say around KL, it's probably around 400,000 now.
42:25Or maybe they want to further their studies.
42:27They want to do a master, which private universities that probably cost you 80,000 at least.
42:33So all these quite big purchases, which a lot of young people make, how can they plan for that?
42:39Actually, it's very much like my answer earlier.
42:42They have to first know these are what they want.
42:45Priorities.
42:46Yeah, they write it down, their priorities.
42:48And is it really a non-negotiable?
42:51Because so many things are occupying our life, right?
42:55We are hit with so many things.
42:56And if that is a non-negotiable for them, they have to make sure that the other temptations do not interfere.
43:05And after that, they have to make sure that they put aside that money to grow in that time.
43:12To accumulate so that they can put a good down payment for the house or the car or the education.
43:17As you mentioned, the other thing about education is can get scholarship also.
43:22So that is one way.
43:24If they really want to reduce spending for education.
43:28Education, if they really want it and they are so good in that field, they can apply for a scholarship that helps as well.
43:36Yeah, I hope I answered your question.
43:40It's all about putting it down actually.
43:43A lot of people, they want to do many things but they don't really put it down.
43:46And they don't take the first step which is to start.
43:50Yeah, starting is the hardest part.
43:53I mean, we talked about financial shocks, economic recessions, pandemic.
43:59How can we prepare for it?
44:04Okay, very good.
44:07I have gone through many.
44:09I've gone through the 1980s recession.
44:11I've gone through 1997 Asian financial crisis, the 2000 bubble, the subprime.
44:18So there's the constant and guaranteed thing is crisis will come.
44:23And COVID also.
44:25So what do we learn from all this?
44:28So I'm sharing this because Gen Z maybe the only crisis you can remember is COVID-19.
44:34But take it from an older person, crisis will come again and again.
44:39So the best way to prevent any shocks is first have your foundation which is your emergency fund.
44:46The emergency fund is for salaried people, six months of your expenses every month.
44:54For gig economy people, at least 12 months I would say.
44:59At least one year for you to like find your footing, find yourself and hopefully, you know, stand back up on your feet.
45:07So emergency fund is very good.
45:09There's one thing.
45:11In good times, which is around now, start to have a crisis budget.
45:17This is something I learned just before COVID because I went for a course myself.
45:22And that thing stuck to me.
45:24We were all like, I want to do this project.
45:26So we had to come up with a crisis budget.
45:29So now my life is like that.
45:31Very nice.
45:32Everything I can enjoy.
45:34But crisis budget just next to it.
45:36How much, what am I going to strip off if a crisis comes?
45:42So some of the things are no longer going to be there.
45:45So a crisis budget is your variables.
45:48A crisis budget are your variables, means things that you don't really need.
45:52All your happy gym, all the things that you will know for yourself.
45:56What are those?
45:57And you strip it down to the bare essentials.
46:01And even after you strip it down, you look at the essentials.
46:05Can I still cut my phone plan?
46:07Maybe now there's a better plan.
46:08Because a lot of people, they have their phone plan.
46:10But some phone plans are getting better, but they didn't take the time to look at it.
46:14So by doing that in your cable, is there a better offer now?
46:18So you have to really go through your list and see what is the bare minimum you can cut.
46:25And just have that crisis budget kept somewhere.
46:28Because when the crisis came, which it did for our family, COVID-19.
46:31I just took it out.
46:32I already have a blueprint to fall back on.
46:35But the thing that don't cut would be your insurance.
46:38Because when a crisis hit and you don't have enough income,
46:43and you need to be hospitalized, then it's worse.
46:46Of course, you say, I can go to the government hospital.
46:48Yes.
46:49So you see how badly you are hit.
46:51You have a priority what to cut first.
46:53We can't often realize on the public health sector because it's already so stretched out.
47:03Stretched to the max already.
47:05I believe I can offer some perspective on this.
47:07Seven years ago, before I got this job, I had experienced a job loss.
47:12I was retrenched 24 hours.
47:15At the time, I was panicking because I had some financial commitments.
47:20So the first thing I did on the first day itself was I went to cancel my gym subscription.
47:26I also went to change my mobile plan.
47:30I got the cheapest one I could find.
47:32And I took out some savings.
47:35But I realized that even though I had savings,
47:37how quickly money ran out when you don't have new income streams coming in.
47:44So I think it's very important to keep that in mind.
47:47But yeah, like you said, cut down whatever you don't need.
47:50Cut the fat.
47:51Yeah, so prepare a crisis budget not during the crisis.
47:56Now.
47:57I mean, when you are not having to be so scared, right?
48:01Because when you enter into crisis, right?
48:03Sometimes your brain cannot function.
48:05You go into self-pity or you go into I cannot think.
48:10And when you have it, you just pull it out and say, okay, maybe you just adjust a little bit.
48:15But it's already prepared and prepared when you can think clearly.
48:18Yeah.
48:19So this is I thought one of the greatest lesson that I had myself and my family, which I'm very grateful for.
48:28So this thing I feel besides the emergency fund is important.
48:32Preparing a crisis budget.
48:34Hazel, do you have any advice for people who are struggling with low incomes, low salaries,
48:41or maybe they don't have a stable income?
48:43So, you know, maybe for them financial planning is a bit difficult
48:47because they don't have much room, much space to work with.
48:50Do you have any advice for that?
48:53What you're trying to say is they are already so tight, right?
48:57How to hire a financial planner and things like that.
49:00How to even have the ICE rule that you just mentioned.
49:05Anybody, right?
49:06If you're tight, because I've gone through in the 80s,
49:09I've gone through days that sometimes I don't know whether I have money to eat.
49:14I've gone through that.
49:15So I understand totally where that comes from.
49:19But having said that, the mindset is very important.
49:23At that point, the questions we ask ourselves determine the quality of our life.
49:29Okay, why I say this is if you are hit like that, right?
49:33You can ask yourself, why me?
49:36Which is a very kasian kind of thing.
49:39And then you can't find any solution.
49:41But the question I used to ask myself, because I was 17 at the time, just after SPM,
49:46was how can I improve my family's finances?
49:50That was the question I asked myself.
49:52And I started my...
49:54You know, our mind is very powerful.
49:56You will start to see things.
49:58And you will start to see opportunities like,
50:00okay, maybe if I do this kind of work, I can get this kind of income
50:05because I have a strength doing this.
50:07And then you will be able to find it.
50:10I don't know how to explain it.
50:11Because when you are trying to look at ratings,
50:14suddenly your eye can see all the red in the room, right?
50:17Or if you suddenly want to look for blue, you will see all the blue.
50:20Same thing.
50:21If you ask yourself, how can I improve?
50:25What can I do?
50:26Because I cannot answer for every Gen Z in this world.
50:30They have their unique capabilities,
50:33their strength that they can work on and get that income.
50:38So some Gen Zs, if they look inside,
50:41they become influencers.
50:43That's how they earn more, right?
50:45Or they start to sell things and all that.
50:49So that is the question.
50:51It's not just about numbers.
50:53It's about taking care of your mind.
50:58I say that because I've been through it.
51:00So when you start to ask yourself,
51:02how can I make it better?
51:05Then you will find it.
51:07Like for me, even this last COVID crisis,
51:09actually that was what prompted me to take up my license,
51:12financial planning certification.
51:14Because I find that I wanted to upskill.
51:17So you will say, oh, no money to earn.
51:19If you are looking, don't put the word no,
51:23put the word how can I find it?
51:25So you will be able to either get someone to sponsor you,
51:28or get a scholarship,
51:30or talk to your whoever who can sponsor you to upskill maybe.
51:34Or start to find people who can connect you with the right opportunity.
51:41Because whatever it is, if you're tight, you need more income.
51:45You need more income.
51:46If you already cut to the max and you still cannot have,
51:50you need more income, more inflow.
51:53So yes, don't give up.
51:56If there's one thing I want to share with Gen Z,
51:59always have hope in your mind and you will pull through.
52:03Because there are opportunities.
52:06Whether we choose to see it or not.
52:08Yes, so put what you want,
52:11and what is it that you're good at,
52:13and then you will start to see the opportunity.
52:15So the question you ask yourself is,
52:17how can I improve instead of,
52:19why me?
52:20Which most people do.
52:21I think to be fair as humans,
52:23we can have a why me for a while,
52:26but not too long.
52:27Then get back to work.
52:28Yes, get back to how can I improve.
52:31It's also more of what gaps can I fill,
52:36how will this help me,
52:37and who am I helping?
52:39So you're creating opportunities for yourself
52:42and for other people as well.
52:43Very true.
52:47I think we've come to the end of our...
52:50Okay.
52:51You've given us a lot to think about.
52:52Yes, thank you very much.
52:53If you could just give three takeaways,
52:58three key pieces of financial advice,
53:00not even for Gen Zs, but just to...
53:02Everybody, right?
53:03Because as I said, it's a fundamental thing.
53:05Okay, so these three things.
53:07First, find a way to be financially literate.
53:12It means get yourself financially educated.
53:14There are so many resources.
53:16There are many books online.
53:19You can even speak to person or non-person.
53:22The AI is very clever.
53:24Or you know, read the star?
53:25Oh, very good, very good.
53:28Okay.
53:29Second is, I feel that habits determine who we are.
53:34If we know the knowledge,
53:37but we don't do the actions,
53:39and it's the habit,
53:40that means the daily action that lead to the big thing.
53:43We say, oh, I know I have to live below my wings,
53:46but our actions or our habits is the other way around,
53:49then it will still come back to zero, right?
53:52Or negative.
53:53So habits, you need the good and healthy habits
53:57to lead us to the goal that we want.
54:01Yeah, so the habits is very important.
54:03So if we can change our life to have healthy financial habits,
54:08slowly start at least the first step, you know,
54:12inculcate it as young as possible.
54:14As young as possible is easier because less karat, right?
54:19If you have like 50 years already of karat,
54:21then you want to change.
54:22Can still be done.
54:23Can, can.
54:24But Gen Z, you have that time, you're not so old yet,
54:28so less karat to take, okay?
54:30The last one,
54:32last one I think is for Gen Z.
54:37Your superpower is time.
54:40So don't let it slip away from you.
54:43Okay, as I calculated,
54:44you have at least 28 to 32 years of planning
54:49towards your wonderful retirement
54:52or any goal that you want in the long term.
54:55So use this time wisely, okay?
54:59Don't let it slip away.
55:00You can never buy it back,
55:02no matter how much money you have.
55:04And leveraging on what we all have at the moment is technology.
55:09Yes, the other T.
55:11So you have time and you have technology.
55:13Everything at the fingertips.
55:15Yeah, you're in a good generation.
55:20Any parting thoughts, Farid?
55:23Well, now you've given me second thoughts about, you know,
55:25splurging at Ramadan Mazar this evening.
55:29It's still the opposite of not splurging.
55:34So that one,
55:36everyone will have to look at their own planning
55:40and then you will know.
55:41Sometimes I just have to show,
55:43and then people will say,
55:44oh, I need to cut here, cut there.
55:46Nobody will be the best except yourself, right?
55:49You will know yourself.
55:51Thank you, Hazel.
55:52This has been very insightful.
55:56Hopefully, I think we can improve our financial habits.
56:00Yeah, not just Gen Z.
56:01Yeah, all of us.
56:02All of us can learn from this.
56:04Thank you everyone for watching Life in the City podcast.
56:06You can view our next episode on Star TV and YouTube
56:12at Star Online or www.star.com.my.metro