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MyFinance.com.my - Building Personal Financial Confidence
MyFinance.com.my - Building Personal Financial Confidence

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3 Ways to Manage Your Money Without Taking Much Of Your Time

Keeping the financial books in order may not be an easy task for many, but it does require some effort and time. If your daily schedule is so packed that you can't even spare a few minutes a day to review your budget, track on your spending, or check on your savings’ progress, you could be letting money slip through your bank account without even realizing it. If you are the type of person that do not spend much time looking into your finances, here are three things you have to do to at least keep your finances on the right track.

1. Be on Top of Your Finances

When you've got more than one savings accounts, a checking account, two or three credit cards, a personal loan and a mortgage, staying on top of them all can be overwhelming. Fortunately, we have a program for you to manage your finances. With MyFinance Budget Portfolio, you can update your savings account, loan accounts, credit card accounts, and mortgage accounts. The system analyzes your accounts to see what you're paying in fees and recommends monthly tips to improve your credit performance, by recommending credit cards with lower finance charges, or recommending credit cards that suits your lifestyle based on your category of spending. And keeps you alert on your bill payment due dates. You wont have to worry about security details about your accounts, because MyFinance will never request for your personal financial information from you, and you are entering your details as an anonymous user where only you can view what you have, without any confidential personal or banking information. Good news is that you can set up a budget portfolio, create your credit profile and access it straight from your phone.

2. Automate Your Finances

If paying your bills is taking up a lot of your time, try setting your bill payments on auto debit, or also known as standing instruction. When you set up automatic payments for your bills or even for your credit card & loans, you won't have to worry about the late payment or the interest charges that comes with it. Most banks offer auto debit at no extra charges, so it might be a good idea for you to take advantage of these features. It will just take a few minutes to apply by calling the Bank’s customer service, and providing them the bill’s account number and your credit card information. And this very few minutes will save you many more hours over the coming months.

3. Consolidate Your Credit Loans and Benefit from The Lower Interest Charges

Using MyFinance Budget Portfolio to manage your accounts can relieve some of your financial headaches. But you can take it a step further by consolidating your credit loans or reducing your credit cards you have. If you've got balances on five or six credit cards, for example, transferring them to only a few cards with a lower or zero percentage balance transfer rate means you will be consolidating your credit cards to only a few payments to keep up with and the best part is that you will be paying less in interest charges (at least temporarily).

MyFinance Tips

Neglecting your finances is always common for people with very busy lifestyles. And it can be very financially unhealthy when it comes and infect your banking accounts. While you probably can't afford to completely neglect your finances, finding for ways to squeeze some time into managing your money could be a smart move and will benefit you in the long run.

Read More : http://MyFinance.com.my/articles/details/3-Ways-to-Manage-Your-Money-Without-Taking-Much-Of-Your-Time

We also provide various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
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The 10 Commandments of Personal Finance

Thinking of how to be on top of your finances? Here are some basic guidelines, and follow these 10 commandments:

10. Start Taking Action

Reading about how to be on top of your personal finances is a good start, but it wont improve until you start taking action and putting what you learn into motion. Before you can start seeing improvement in your personal finances, you need to begin, right now. Continue reading the commandments below, and you have to follow these steps if you want to be on top of your personal finances.

Print out this list and place it where you will see it every day, so that you are constantly reminded that your personal finance is a priority in your life and that you will take some action each and every day to try to improve.

9. Pay Off All Credit Card Debt

Credit card debt is, and in most cases, the Number 1 enemy to your personal finances. It can have a huge negative impact if you constantly have huge oustanding credit card bills every month. Work out a plan to pay off any credit card debt that you currently have. Begin by paying off the outstanding with the highest interest then to the highest, using the snowball method that best fits your spending profile. Make this a top priority.

8. Differentiate Between Wants and Needs

To keep your personal finances in order, you need to understand the difference between wants and needs. There is nothing inherently wrong with small luxuries, and you should be able to enjoy many of the non essential things you have. However, it is important to realize that wants are not needs. If you master this skill, your spending order will be in much better shape.

Take some time to carefully look at your needs vs. your wants. If you are having trouble identifying the differences, draw up a plan to eliminate impulse spending.

7. Spend Less Than You Earn

There are no two ways around this one. If you want to keep your personal finances in order, you need to spend less money than you earn. That means either paying for items and services that are less than you currently earn, or figuring out a way to increase your salary so that you can spend more, but still less than you earn. Either of these is perfectly fine.

Start tracking your spending to see if it is more or less than you are earning each month, and create a budget so that you can continue to track in the future. If you are spending more than you earn, you need to decide whether to cut down on unnecessary costs or alternatively, figure out how to increase your income.

6. Pay Yourself First

Before you pay any of your bills, you should first pay yourself a minimum of 10% of your monthly salary. This money is not part of your monthly spending budget and is meant only for your own savings.

Setup a banking account so that your monthly salary is automatically deposited into another account that is different from your monthly expenses.

5. Set Financial Goals

In order to achieve your financial goals, it is very important to know what those goals are. Nobody can determine these goals except for you. You need to take the time to figure out exactly what your financial goals are so that you can take the necessary steps to reach them.

If you are not sure what your financial goals are for this year, next year and 10 years from now, start thinking of your goals now and list them.

4. Educate Yourself and Be Responsible for Your Decisions

Although it may be more convenient to hand over all your money issues to somebody else, it is time you stop doing this. Part of being financially responsible is having the final say in all decisions about your finances. That does not mean that you can't seek advice or get opinions on your finances, but in the end your money is your responsibility, and you are the only one who is going to truly look after your own interests.

If you have appointed someone else to take care of your finances, begin to take back control. No matter what, spend an hour or two each week reading our personal finance articles in the MyFinance Library section or email us if you have any questions.

3. Save and Invest

Take the money that you pay yourself first and either save or invest it to make it grow and work for you in the future.
If you are carrying credit card debt, pay it off first. But also make sure to take full advantage of the saving and investing opportunities that are available. Make sure you have an emergency fund.

2. Protect Your Finances

You have to take the necessary steps to make sure that your assets are protected in case of a disaster, usually through an insurance plan.
Take the time to make sure that all your assets are properly insured, and re-evaluate this every few years or whenever a major change in life’s journey occurs, such as marriage or a new addition to the family. Also be sure to compare insurance premiums and coverage on a regular basis, since there might be cheaper and better plans every once a while.

1.Donate to Worthy Causes and The Less Fortunate

No matter how difficult your personal finances may appear, there are a lot of people that are far worse off than you are in the world. It is important to nurture a sense of giving and to be thankful for all of the things that you do have. That means donating to worthy causes on a regular basis.

Find a few causes that you believe in, and donate to them generously. Don't assume that money is the only way that you can donate. Volunteering time and skills are also appreciated by most charitable organizations. You can research organizations at charity homes in Malaysia. Or you can zoom into the states that is convenient for you. Donating is helping others and you will be blessed in many other ways.

Read More : http://myfinance.com.my/articles/details/the-10-commandments-of-personal-finance

We also provide various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
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The Cross-Sectional Relationship between Ratings and Yields

Chart: Sovereign Bond Spreads by Credit Rating

In the findings of a study “Determinants and Impact of Sovereign Credit Ratings” it was clearly proven that sovereign yields tend to rise as ratings decline. This pattern is evident in the Chart, which plots the observed sovereign bond spreads as well as the predicted values from the average rating specification.

Debt papers that are rated BB or lower by Standard & Poor's or Ba or lower by Moody's are generally considered speculative in nature and are not considered to be investment-grade bonds. They have a higher risk of default and are classified as high-yield bonds. To entice investors and to compensate them for the attendant risks, issuers with lower-rated credits must pay a higher rate of interest than companies whose bonds are given an investment-grade rating. This in turn generates a higher “yield” for investors. For example, suppose a company that qualifies for the highest rating (AAA/Aaa) issues a 10-year bond with a yield of 6%. To compete for capital, a company rated single-B may need to offer a yield of 9% to 11%.

Financial markets generally agree with the agencies’ relative ranking of sovereign credits, they are more pessimistic than Moody’s and Standard and Poor’s about sovereign credit risks below the A level. Sovereign credit ratings effectively summarise the information contained in macroeconomic indicators.

In a study “Sovereign Credit Ratings and Financial Markets Linkages” by the European Central Bank it was evident that an upgrade in rating which points to less risk of default resulted in both a drop in yield spreads and credit default spreads (CDS). On the other hand, a downgrade conclusively directs spreads higher to account for higher default risks.

Yield spreads before and after an announcement

Note: based on 73 upgrades, 31 downgrades, 37 positive outlook and 28 negative outlook announcements for the 3 agencies.The number of days is in the horizontal axis.

CDS spreads before and after an announcement

Note: based on 36 upgrades, 63 downgrades, 23 positive outlook and 44 negative outlook announcements for the 3 agencies. The number of days is in the horizontal axis

Read More : http://MyFinance.com.my/articles/details/the-cross-sectional-relationship-between-ratings-and-yields

We also provide various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
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Credibility of Rating Agencies

Credit rating plays an integral role in the world of financial markets. They are some of the most powerful players in world finance. Pre-2007/08 financial crisis, they were trusted and listened to by most investors.

The crisis unveiled the weaknesses of their rating system and they came under intense scrutiny. Example of some blunders - in 2009 Moody's issued a report titled "Investor fears over Greek government liquidity misplaced". Yet within six months, the country was seeking a bailout. Meanwhile, S&P's sovereign debt team miscalculated US debt by as much as $2tn when it downgraded America's credit rating last August.

Credit rating agencies (CRAs) are supposed to provide high quality independent and reliable opinion on the relative ability and willingness of parties with debt obligations to meet financial commitments. They have three functions; to measure the credit risk of the issuer, to provide a means of comparison and to provide a common standard. At the wake of the 2007/08 US financial crisis rooted in the non-performance of mortgage back securities, which were rated AAA during the housing boom one year prior to the collapse of the housing market, the integrity of these rating agencies is now questionable.

Criticism #1 – Accuracy of Rating

In the wake of the 2007/08 global financial crisis they have come under intense scrutiny. In 2008, at the height of the global financial crisis, the investing world woke up to the shocking fact that many of the structured products in default were deemed top-tier AAA material by the credit raters during the housing boom, only to sharply downgrade them when the housing market collapsed. In 2007, as housing prices began to tumble, Moody's downgraded 83 percent of the $869 billion in mortgage securities it had rated AAA in 2006. Some of the highest rated securities ended up being downgraded to the lowest junk ratings as housing prices started falling.

Criticism #2 – Industry Structure: 'Issuer Pays' vs. 'Subscriber Pays'

How do credit rating agencies make money? In the credit rating business, agencies receive payment for their services either from the borrower that requests the rating or from subscribers who receive the published ratings and related credit reports. If you want to be rated, you must pay an agency between $1,500,000 and $2,500,000 for the privilege, depending on the size of your company.

Prior to 1970, the CRAs provided ratings free of charge to issuers and sold their publications to investors for a fee, a model which guaranteed the CRAs independence from the issuer of debts. During the US recession of early 1970s, while competing for limited investment money, issuers were willing to pay for a rating. With increased demand for their rating services, the CRAs’ business grew in leaps and bounds. Issuers, who needed certain ratings in order to sell their bonds to regulated financial institutions, were now able to obtain these ratings by commissioning these agencies for a payment. By 1987, nearly 80% of S&P’s revenues came from issuer fees. By 2006, Moody's had earned more revenue from structured finance—$881 million—than all its 2001 business revenues combined.

Criticism #3 – Industry Structure: Oligopoly

The credit rating industry is a global business, but controlled by only a few players. Together, the "Big Three" global credit rating agencies control nearly 85 percent of the credit ratings market. Of the $5.9 billion in revenue generated by 10 rating firms recognized by the government in 2014, 94.3 percent was pulled in by the Big Three.

Critics of the Big Three in the United States and Europe have voiced concern that the monopolisation of the sector by these agencies has created an uncompetitive environment that leaves investors with few alternatives. One point highlighted by critics was that the ratings agencies had failed to take into account the potential for a decline in housing prices in the US and its effect on loan defaults which had led to the 2007/08 crisis. The agencies’ inflated ratings also failed to account for the greater systemic risks associated with structured products, and they were accused of sacrificing quality ratings to win a bigger share of the lucrative sector.

Action CRAs

The evidence to the truth of some of the criticism was in the actual action taken against these rating agencies. In the United States, several legal and regulatory actions against ratings agencies came to a head in 2015. In addition to its $1.37 billion settlement in February, S&P settled two other cases, paying $125 million to the nation’s largest pension fund, the California Public Employees’ Retirement System (Calpers), while settling with the SEC for $80 million in a post-crisis fraud case.

Dependency on CRAs’s Rating

Moving forward, investors should put in a little more time to understand investment instruments and markets by way of self-education in investment analysis and also make efforts to seek out several professional opinions rather than being dependent on a single advisor, no matter how credible the name may be. The market’s bad experience trusting CRAs should indeed be a loud wakeup call for all investors.

A Bloomberg study in 2012 highlighted the fallacy of using sovereign debt ratings as a guide to investing. The Bloomberg news report examined 314 upgrades, downgrades and outlook changes during the past 38 years. For almost half of these decisions, government bond yields fell when a rating change suggested they should climb, or increased when the change signaled a decline.
In other words, if you want to make the correct decision based on the latest sovereign rating, you could do no worse than ignoring it and flipping a coin instead.
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Credit Default Swaps and Sovereign Credit Rating

Read More : http://myfinance.com.my/articles/details/credit-default-swaps-and-sovereign-credit-rating


We also provide various Financial Information such as, MyFinance Budget Portfolio, Personal Finance, Housing Loan, Personal Loan, Credit Card, Sharper Shopper, Calculators. For more information please visit our website MyFinance.com.my.
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The Consequences Of A Change In Sovereign Credit Rating


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The Importance Of Sovereign Credit Rating


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Determinants Of Sovereign Credit Rating – How Are Ratings Determined

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What Is Sovereign Credit Rating?
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The Good And The Bad That Malaysians Have To Embrace In 2016
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