PERSONAL FINANCIAL

PLANNING (FIN533)

PREPARED BY PREPARED FOR

Nurul Azwin Binti Madam Rohanizan
Yusoff Binti Md. Lazan
2021480434
JBA242 3A
FIN533 PAGE 01

1.0 Acknowledgement
2.0 Biodata of The Family
3.0 Financial Information
4.0 Monthly Income and
Expenses
5.0 Balance Sheet
6.0 Cash Flow Statement
7.0 Ratios
8.0 Income Tax
9.0 Comments and Advice on
The Family’s
10.0 Recommendation to
Improve Family’s Financial
Situation in The Future
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1.0 ACKNOWLEDGEMENT

Alhamdulillah, first, I would want to express my gratitude to

Allah for allowing me to successfully complete the report that was
assigned to me. I received such a fascinating assignment from my
lecturer.

I had to seek assistance and direction from a respected

individual, who earned thanks, in order to complete this report
and task. I would like to express my gratitude to Pn. Rohanizan
Binti Md Lazan, the instructor for the course on personal financial
planning. She has helped me with this assignment from start to
finish. I now know how to create a balance sheet, cash flow
statement, and tax computation for the financial planning of Mr.
Allif and Mrs. Nur Shahida Azira's family. I was able to finish this
report thanks to the knowledge I gained, and I was appreciative.

In addition, I want to thank Mr. Allif and his family for taking
the time to share the information needed for this assignment. He
provided me with clear answers to all my inquiries and helped me
to comprehend his financial circumstances. As a result of this
course, I have also acquired vital abilities in communication and
time management. I owe everyone who assisted me in completing
this report a huge debt of gratitude.

Finally, a thank you to my family, who have always

supported me throughout. I value their assistance in providing me
with moral support and in getting this task done. Additionally, I
am very grateful for their assistance in giving me financial
support as I completed my task.
FIN533 PAGE 03

2.0 MR. ALLIF'S

FAMILY
BIODATA
Mr. Allif and Mrs.Shahida both are 30 years old.
Mr. Allif is a government servant while do a
parttime job as property agent and Mrs. Shahida
is a lawyer. Mrs. Shahida who the one related to
me. She is my older sister. They have 1 child who
is 2 years old. They both earns RM4,500 per
month.

Mr. Allif currently own a Produa Bezza that After that, they have been living in double
was purchased for RM 28,000. He paid zero storey house at Kota Masai, Pasir Gudang.
down payment, and the interest rate for They bought the house with RM100,000
the nine-years loan is 3.47%. While Mrs. which he had paid 10% for the down
Shahida owned Toyota Vios that was payment and the interest rate is charged at
purchased for RM16,000. Toyota Vios have 4% for 25 years and the price of the house
no remaining balance because Mr. Allif has keep rising by every year with the market
made settlement on that car. value of the property estimated
RM200,000. Besides that, Mr. Allif own 6
units houses for rent. 4 units of terrace
houses at Pasir Gudang, 1 unit at Kulai and
1-unit flat house at Pasir Gudang. Below is
the pictures 2 units of Mr.Allif property.
FIN533 PAGE 04

3.0 FINANCIAL
INFORMATION
DETAILS RM

Monthly Salaries & Bonus :

Mr. Allif 3500 + 1000
Mrs. Shahida 3500 + 1000

Rental Income monthly 5500

Balance in Savings Account:

Mr. Allif 50,000
Mrs. Shahida 100,000

Cash in hand 300

Balance in Investment Bank 100,000

Market Value of Perodua Bezza 28,000

Market Value of Toyota Vios 15,000

Monthly EPF Contribution 2000

Monthly Taxation:
Mr. Allif 100
Mrs. Shahida 100

Current Value:
Ipad 4000
Laptop 1500

Purchase Smartphone on October 2022 3000

Utilities Monthly 300

Fuel , Touch n go monthly 500

 PAGE 05
Cont...

DETAILS RM

Prepaid/Postpaid Bills Monthly 500

Insurance Road Tax 1500

Car maintenance Monthly 300

Family Vacation (yearly) 3000

Takaful 800

Zakat 6000

Home mortgage 3500

Double Storey House (Market Value) 200,000

Clothing 150

Donation to Wakaf Majlis Agama Negeri Johor 150

Food and Household Supplies (Monthly) 500

Car Loan Payment Monthly 444

Parking and Toll (Monthly) 100

Children Expenses 300

Parents Allowance 1200

Credit Card Outstanding 2000

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4.0 MONTHLY
INCOME &
EXPENSES
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5.0 BALANCE
SHEET
 FIN533 PAGE 08

LOAN
CALCULATION
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6.0 CASH FLOW

STATEMENT
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TOTAL INCOME $
ANNUAL EXPENSES

Based on the pie chart, the cash flow

statement for year ended 31 December
2022 shows that the main income of Mr.
Allif's family is 62% from his and his wife
salaries + bonus which is RM108,000 yearly
and 38% through rental income because
they own 6 units of property . They receive
RM5500 per month and RM66,000 per year.

As shown from the pie chart, the highest

expenses is for parents allowance because
he and his wife give to their parents RM300
every month. Mr. Allif only have a mother
while Mrs. Shahida still got parents. RM300
for 3 people per month and make it to
RM14400 per year.
 FIN533 PAGE 11

7.0 RATIOS
Assets Liquidity
Liquid Assets To Take Home Pay Ratio
=Liquid Assets/Take Home Pay x 100
=150,300/108,000 x 100
=139.63%
The liquid asset to take home
pay ratio is 139.63%.Mr. Allif
financial condition is excellent!
The range is more than 50% it
shows that, he knows how to
save more money each month
and maintain the liquidity.

Current Ratio The current ratio is more than

=Liquid Assets/Current Liabilities RM1 . It shows that Mr. Allif is in
high position. It means he can
=150,300/2000 maintain his assets liquidity and
=75.15 times avoid many obligations.

Level Of Debt

Debt Ratio The debt ratio, Mr. Allif's debt

=Total Liabilities/Total Assets x 100 ratio is bad because exceeding
40%. He may face difficulties in
=184,997.01/298950 x 100 getting new loans since he
=61.88% unable to pay his debt.

Based on the calculation, it

Debt Service Coverage Ratio
=Take Home Pay/Debt Service Charge
=108,000/(6998.88+8100+3600+3600)
=RM4.84
shows that Mr. Allif earns
RM4.84 in takehome pay for
each RM1.00 of required debt
repayment and interest. Thus,
the higher the ratio, the better
because it shows that Mr.Allif
has ability to make payment.
 8.0 INCOME TAX
PAGE 12
FIN533
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9.0 COMMENTS AND

ADVICES FOR MR.ALLIF'S
FAMILY FINANCIAL

According to the balance sheet, Mr.Allif's family has a contribution to savings

that is sufficient to pay the liabilities, with total assets of RM298,950 and total
liabilities of RM184,997.10, which is beneficial for the family. As a result, he has no
trouble paying his present bills based on the ratios' percentages. If Mr.Allif makes
more investments to generate more money in the future, it will be simple for it to
pay down its long-term debt. His net worth, which is RM113,953, so accurately
reflects his wealth and serves as a solid foundation for creating a financial strategy.
Mr.Allif's current liabilities include an RM2,000 credit card outstanding. In general,
it is aware that credit cards can be significant debt traps, but it is impossible to not
have any in the modern world because they have uses beyond just a tool for making
purchases. Mr.Allif seems have no problem in saving his money since the savings
account balance for him and his wife both has huge amount of money. They afford to
pay debt on time and know how to save their money well.

According to the cash flow statement, Mr.Allif and family's contributions to savings
total RM100,851.10 because their entire income is more than their whole spending. As a
result, Mr.Allif receives a monthly rent payment from the renter in addition to his
regular income and a bonus of two months each year. In spite of the substantial
expenses, the cash flow is currently positive. Due to the fact that he owns two vehicles,
Mr.Allif spends more annually on automotive expenses like insurance, road tax, and
transportation costs. Additionally, because Mr.Allif's has only 1 son and he has to spend
more money on their costs. In those circumstances, it would be beneficial for Mr.Allif
to stop paying for some of their costs going forward. This would allow them to free up
more cash in their budgets and reduce their propensity to utilise credit cards or loans to
make up for spending shortages. By putting extra money back into his budget, Mr.Allif
can pay off his debt more quickly or even more than the minimum payment. As a
result, Mr.Allif and his family may contribute more to increasing his emergency fund
or retirement savings thanks to the lower outflows.
 FIN533 PAGE 14

10.0 RECOMMENDATIONS TO
FURTHER IMPROVE MR.ALLIF'S
FINANCIAL SITUATION

INSURANCE PLANNING
Planning for insurance is an essential component of modern living. While not as
immediate a method of saving as investing, Mr.Allif should safeguard his assets from any
unanticipated catastrophes while he builds his riches. Long-term savings from insurance
planning can be substantial. As of right now, Mr.Allif and family have takaful for the
spouse and his child as well as life insurance for the individual. Mr.Allif also received a tax
deduction for life insurance and family medical insurance. He had 1 child who is 2 years
old. One excellent recommendation is for En Ahnaf to enrol in the Premier Education
Savers programme offered by Maybank Malaysia (Maybank2u, 2020), which is an
investment-linked lifetime plan that combines coverage with smart investments for the
education of his children. When the parent's child reaches the age of 25, the latter has the
option of continuing to save under the lifetime investment option, which has a 100-year
expiration date. Mr.Allif is able to pay the minimal monthly premium of RM100 based on
inflows and outflows. Additionally, Mr.Allif children would benefit if he invested in SSPN
to plan his children's future education.

INVESTMENT PLANNING
Investment strategy is essential to increasing one's wealth. In addition to saves, Mr.Allif
should invest his money for future rewards. Therefore, an increase in cash flow might result in a
rise in capital. It enables Mr.Allif to contemplate investments that will enhance his financial well-
being. Mr. Allif's investment asset is the flat and savings at RHB Bank, according to the balance
sheet. Mr.Allif has been the only owner of a double storey house. Due to the difference between
the purchase price of RM100,000 and the current market value of RM200,000, he realises
greater earnings from the double storey house investment properties. He also owns 6 units
property to rent . In a total of RM100,000 in investment assets. He can still make further
investments before to retirement. Mr.Allif is currently 30 years old.Due to the fact that Mr. Allif
has only invested in real estate and RHB Bank, he will have the option to invest for either 5 to 10
years or the long term in the future. Investing in the Public Mutual unit trust by placing his
money in the appropriate fund that aligns with his family's investment objectives would
unquestionably contribute to the long-term growth of his net worth. As unit trusts are one of the
collective investment plans, investors can contribute as little as RM100 to begin. Additionally,
broad diversification to reduce risk and transactional simplicity (mutual, 2022).
 FIN533 PAGE 15

RETIREMENT PLANNING
Saving for retirement must become a top goal, not an afterthought. This is part
of the process of calculating additional demands and considering how they can be
addressed if Mr.Allif ceases operations. It is advantageous for working individuals
who rely on pensions, gratuities, and other employer-sponsored retirement
programmes during retirement. Mr.Allif, who works in the public sector and relies
only on Employees Provident Fund (EPF), paid 11% of his gross pay each month
towards his retirement. Regarding outflows, he annually contributed RM4620 to EPF.
Due to his obligations, Mr.Allif's retirement income will not be sufficient to cover his
debt and other expenses. Mr.Allif hopes to retire early in the future, but he is
uncertain when this would be possible. He desires it at age 55 but can delay it until
age 60 to accommodate his finances. In addition, Mr.Allif shall invest in a Private
Retirement Scheme (PRS) and declare tax relief of no more than RM4,000.
Mr.Allif's active EPF contributions may not be sufficient for him to achieve his
retirement objective. Each PRS provider is required to choose one of three default
core funds. Mr.Allif is best suited for intermediate funds due to the emphasis on
building the portfolio while seeking income. Additionally, the range of ages between
45 and 54 years old (PRS, 2020).

ESTATE PLANNING
Estate planning is the process of preparing for the transfer of a deceased person's wealth and
possessions. The estate of Mr. Allif and his family consists of all of his assets, life insurance,
investments, real estate, cars, personal property, and debts. Currently, Mr. Allif's and his wife's
names are on the majority of the estate. In the future, Mr. Allif and his family must ensure that
their assets and insurance policies are distributed to the correct beneficiaries. Although it is
essential to have a valid Will, an estate plan addresses numerous other aspects of the transfer
of his fortune after death. An estate plan can manage family trusts, powers of attorney, and
the tax implications for beneficiaries. (Estate planning, 2019). In addition, establishing an
estate plan will assist Mr. Allif's beneficiaries avoid conflicts and disagreements, as he will be
able to specify how much ownership and control each beneficiary has over his assets.
Consequently, lower the tax payable on income and capital gains made on assets, and ensure
Mr. Allif's assets are safeguarded in the event of legal issues such as bankruptcy. Mr. Allif
should revise his will since assets, liabilities, and objectives change throughout time, and his
will should reflect these alterations. It is beneficial to evaluate Mr. Allif's and his family's will on
a regular basis with professionals who can identify any concerns that may impede his aims,
such as excessive risk, inefficient taxation, and others.
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