Sunday, November 16, 2008

No borrowing 不要举债

Government has announced the reduction of EPF contribution by employee from 11 % to 8% for the next two years. According to a news report, if all EPF contributors (currently 5.5 millions members) choose to reduce their contributions, the 3% would amount to RM 4.8 billions annually. It is a good news to the retail sector, which means we have extra RM 4.8 billions released to the market... more shopping!!

Good news for the shopping complexes, bad news for EPF contributors ( me included). If I choose to reduce my contribution, I am using my future money. For a young contributor, his/her retirement money would be reduced.

Using future money is not good. Take the American as an example. The country and citizens are using future money... on borrowing money. The lived by selling bonds, on properties mortgages, sub-prime mortgages, derivatives, credit cards, personal loan.....and GREED. Today, the country and people are in deep s@%t.

Malaysia is very much better off than them because we have savings, we do not live on loans and mortgages. Our banks are strong because they have reserve, we keep our monies in the banks! Internally, we are safe. However, due to globalisation, we are affected too. But we are in better footing due to our sound banking system and strict governmental monitoring.

The American is a basket case for us to learn from. So don't use future money. Don't borrow unnecessarily. Credit cards are traps. Easy personal loans are hanging noose, keep away. Live within our means and live simple ! Don't be greedy!

However, I see a dangerous trend in our country. Nowadays, our banks and financial institutions are targeting young people as their focus sector. Credit cards are easily obtainable. They offered Easy loans, cash on call (even loan shark feel being threatened) .... Many young people are heavily indebted. They are paying high interest to the bank for the financial facilities, constantly haunted by the re-payment, thus affecting their job performance, their future is in jeopardy.

Many young people chasing lifestyle with indiscipline spending habit and expensive taste have fallen into this black hole.

Our country's economic outlook next year is bleak. Keep you money. Save more for rainy days ahead.

It is wise to opt for No to 3% EPF reduction.

政府作出宣布,降低雇员公积金缴付额,从11% 减到8%,为期两年。根据一项新闻报告,假如所有的公积金会员(目前有五百五十万名会员)都选择这措施,那少交的3%将意味作每年有额外的四点八億令吉流动现金。这对零售市场是个大好消息,也就是说,可以有更多的购物了!










溪水信女 said...

假设 薪水RM4000 (If salary at RM4000)

- 选择 EPF 11%也就是RM440,taxable income 是RM3560,所以tax RM77

(EPF at11% = RM440, taxable income = RM3560, tax = RM77)

- 选择 EPF 8%也就是RM320, taxable income 是RM3680,所以tax RM109

(EPF at8% = RM320, taxable income = RM3680, tax = RM109)

有没有这样的可能?政府揾我们笨!(is this possible/true?)

Simon Phun said...

Yes, it is true your taxable income is higher, means paying slightly higher income tax.