Foundation & Concept of Financial Management

From research by the world famous financial planner you will need some sort of financial liquid regardless of working people like me or even a business owner. Some people said for a company to have a healthy financial statement are to have at least 6 months of cash flow to cover all overhead costs.

To me the best scenario for business owner or working on their own is to have at least 2 years of monthly expenses. For example, your monthly expenses is RM10,000.00 you will require to have at least (RM10,000.00 x 24 months) RM240,000.00 in your savings to sustain your business if there anything unfortunate happens.

As for working people, they should at least have 6 months of their salary in their savings accounts. You should have sufficient time for you to look for another job and sustain your monthly commitment for over at least 6 months. However if you could save more is always better.

For Malays in Malaysia, I would like to encourage if you could put some of your savings in ASB. ASB is giving the way higher dividend then your normal savings account. On a good time you can at least get 8% return on your investment. Maybe in next post I could explain another secret in using your Overdraft (OD) with your ASB.