FIN 533 INDIVIDU LATEST

FACULTY OF BUSINESS AND
MANAGEMENT (e-PJJ)

FIN 533 PERSONAL FINANCIAL PLANNING
ASSIGNMENT INDIVIDU

Prepared for:
DR. Norliza Binti Che Yahya

Prepared by:
Muhammad Fazlee Bin Anaz Anizan

(2019989329)(NBM4A)

Family background

For this project, I have choose my friend's family as my interviewee. In that family, there four
person which are Mr Ahmad Idham Bin Razali as the husband, Mrs Bariah Binti Sazali as the
wife and their two lovely boys Ahmad Albab and Ahmad Mahmud.

Mr Ahmad Idham Bin Razali was born on 15th March 1975 in Johor Bahru, Johor Darul
Takzim and her spouse Mrs Bariah Binti Sazali was born on 23th September 1980 in
Georgetown, Pulau Pinang. This couple get married on 23th December 2000. This family stay
in Klang, Selangor Darul Ehsan.

Mr Ahmad works as customer service at Telekom Malaysia Berhad. His scope of job are
answering calls and forward any problems to technical department. His wife, Mrs Bariah works
as lecturer at a public university. She already served for 10 years in Universiti Teknologi Mara.
Currently Ahmad Albab just finished his SPM and now further his studies in management at
UITM. Ahmad Mahmud still in school and going to sit SPM next year.Mr Ahmad gain RM
2,200 per month and Mrs Bariah gain RM 5,870 per month. With combine total of RM 8,070,
they can be consider as M40.

They have 2 houses which in Cheras and Klang. This family stay in Klang and rent the other
house as their side income. Beside that, they have three cars where Mr Ahmad use Perodua
Avanza to go to work at Bangsar. Mrs Bariah use Perodua Axia as her daily car to work and
Proton Saga for their son, Ahmad Albab to go to his daily classes. Ahmad Mahmud go to school
by motorcycle since his school quite far from their house and he only has B2 driving license.

Today I will share and discuss this family's financial situation based on their annual revenue
and expenses. In the end of this discussion, we can see if this family has a good financial
planning or a bad one. Then, we can advise them how to overcome the problem and manage
the money more efficient.

Mr Ahmad's family monthly expenses

Age Husband Wife Son 1 Son 2
Occupation 45 35 19 16

Bank account Customer Lecturer Student Student
Car Value Service
Motorcycle value 1,000 Assets 40,000 300
Samsung mobile 70,000 27,685 2,400
phone 6,000 12,000 400
Lenovo mobile phone 2,100
Samsung tab 699 2,000 400
Asus laptop 2,400
Acer laptop 600 2,150
Clothing value
Jewelry 1,500 700
Education takaful 297 3,000
Takaful mabrur 8,200
House in Cheras 3,000
House in Klang 26,400 200,000
3,000 300,000
Credit card 6,000 Liabilities
TM accrued 2,904
Personal loan 3,600 60,000
Car loan balance
Housing loan balance 9,840 35,000
Income
Salary 1,200 70,440
Bonus 1,000
Rental income
Expenses
EPF contribution
Annual tax 2,257
Electricity, water and
internet bills 12,000
Klang house monthly
payment 3,600
Cheras house monthly
payment 1,800
Avanza monthly
payment 1,200
Samsung mobile 3,600
phone
Acer laptop
Shopping
Clothing

Etiqa insurance 1,200 7,200
payment 1,000
Expenses
Ez takaful payment 1,000 1,200
Maintenance 5,712
Parents 1,000
Hari Raya 42 500
Appliances 2,400
Vacation
Transportation
(fuel,maintenance,toll)
Zakat

BALANCE SHEET RM

Balance sheet for Mr Ahmad's family as at 31 December 2020 1,000
1,000
LIQUID ASSETS 6,000
8,000
Cash
Bariah's saving account 10,000
Rental at Cheras per month 3,000
Total liquid assets 2,000
750,000
LIFESTYLE ASSETS 300,000
200,000
Furniture 70,000
Jewelry 12,000
Clothing 40,000
Personal Property 2,150
House at Klang 2,100
House at Cheras 6,000
Avanza car 2,000
Axia car 400
Saga car 699
Asus laptop 1,400,349
Acer laptop
Motorcycle 4,800
Mobile phone Samsung 3,000
Samsung tab 2,904
Mobile phone Lenovo 10,704
Total lifestyle assets
1,419,053
INVESTMENT ASSETS

Education takaful
Takaful mabrur
EPF 11%
Total investment assets

TOTAL ASSETS

CURRENT LIABILITIES RM

Outstanding balance on credit card 1,500
TM accrued 297
Total current liabilities 1,797

Non-current liabilities 60,000
8,200
Personal loan 35,000
Car loan balance 103,200
Housing loan balance
Total non-current liabilities 104,997
1,314,056
TOTAL LIABILITIES 1,419,053
TOTAL NET WORTH
TOTAL LIABILITIES AND NET WORTH

CASH FLOW
Cash flow statement for Ahmad's family for the year Ended 31 December 2020

INCOME RM RM
26,400
Ahmad's annual salary 2,904 70,440
Bariah's annual salary 2,257 6,000
Rental income 3,600 3,000
Ahmad's bonus 12,000 1,000
Bariah's bonus 3,600 106,840
Total income 9,840
1,800 79,155
EXPENSES 1,200 27,685
1,200 ( saving )
EPF contribution 7,200
Annual tax 1,200
Electricity, water and internet bills 1,500
Klang house monthly payment 14,400
Cheras house monthly payment 3,600
Avanza car monthly payment 1,200
Samsung mobile phone 2,000
Acer laptop 500
Clothing 2,400
Etiqa insurance payment 1,000
Ez Takaful payment 5,712
Credit card expenses
Personal loan payment 42
Shopping
Maintenance
Parents
Hari Raya expenses
Appliances
Vacation
Transportation cost
Zakat

FINANCIAL RATIO
A financial ratio or accounting ratio is a relative magnitude of two selected numerical values
taken from enterprise or individual financial statements. Often used in accounting, there are
many standard ratio used to try to evaluate the overall financial condition of a corporation or
other organization.
Assets Liquidity

1. Current Ratio

= Liquid asset/current liability
= 8000/1797
= 4.45
The current ratio show high liquidity position because more than 1. It shows that Mr Ahmad's
family has a high liquidity position and able to pay short terms obligations.

2. Liquid assets to take home pay ratio
= 8000/68,183
= 11.73% , 1.4 months

The low ratio implies poor liquidity position for Mrs Bariah. She can only survive less than 1
month using liquid assets.

Level of debt

1. Debt Ratio
Total Liabilities/Total Assets
= 103,497/1,404,053
= 7.4%

Mrs Bariah is manageable because it less than 50%. Mrs Bariah's debt is 7.4% of her total asset.
The ratio indicates low debt and not in a risky position for Mrs Bariah.

2. Debt Service ratio
Take home pay/Debt service charge
=68,183/39/840
=RM 1.71The ratio is more than 1 which shows Mrs Bariah's ability to meet her current
debt obligationof mortgage instalments. This means that Mrs bariah earn RM 1.71 in
take home pay for each RM 1.00 of required debt repayment and interest.

INCOME TAX

Income tax is a type of tax that government impose on income generate by businesses and
individuals within their jurisdiction. By law, tax payers must file an income tax return annually
to determine their tax obligations.

Tax Calculation for Mrs Bariah Year Assessment 2019

AGGREGATE INCOME: RM
Salary 70,438.80

TOTAL AGGREGATE INCOME -
(-) Donation

TOTAL ASSESSABLE INCOME 9,000
(-) Relief 1,500
20,000
Individual 500
Parent 3,000
Children 10,000
44,000
Reading Material 26,438.80
Laptop

Housing loan
TOTAL RELIEF:
CHARGEABLE INCOME:

TAX COMPUTATION 900
1st 35,000 1,143.88
2,043.88
Balance (11,432.80 x 10%) 2,770.80
TOTAL TAX CHARGED (726.92)
(-) Monthly tax deduction
TOTAL TAX REFUND

CONSUMER LOAN
A consumer loan is a loan given to consumers to finance specific types of expenditures. In
other words, a consumer loan is any types of loan made to a consumer by a creditor. For Mrs
Bariah, she made a few loan such as credit card, personal loan, housing loan and car loan.
Credit Card (visa)
Limitation amount: RM 4,000.00
Outstanding balance: RM 1,500.00

Personal Loan
Outstanding balance: RM 60,000.00
Monthly payment: RM 1,200.00

Car Loan (Avanza)
Market Value: RM 70,000.00
Outstanding balance: RM 8,200.00
Monthly payment: RM 820

Housing Loan
(Cheras)
Market value: RM 200,000.00
Outstanding balance: RM 35,000.00
Monthly payment: RM 300.00

(Klang)
Market value: RM 300,000.00
Outstanding balance: RM 12,000.00
Monthly payment: RM 1,000.00

Ratio
1. Debt to equity ratio
Total liabilities/Total equity
= 104,997/1,314,056
= 0.08

Able to generate enough cash to satisfy its debt obligation because <1

2. Debt payment to income ratio
Debt payment/Gross income
= 39,840/79,384
=0.5 @ 50%

The gross income is not adequate to make debt repayments because the percentage is exceed
30%.

ESTATE PLANNING
Currently Mr Ahmad and Mrs Bariah have two long-term estate planning which is their terrace
house in Klang and Cheras. This family have stay in Klang which their cost of lifestyle much
more low than in a big city such as Kuala Lumpur and Shah Alam. They also rented their house
in Cheras to other family to gain more income for their family.
House in Klang
Type of house: Terrace house
Market value: RM 300,000

House in Cheras
Type of house: Terrace House
Market Value: RM 200,000

INVESTMENT PLANNING
The couple bought house in Cheras on 2000. At that time, that house only cost RM 90,000.
After 20 years, the market price for that house become RM 200,000 and will keep rise every
year. They rent the house as long-term investment with RM 500 as their side income every
month.
Price of the house in 2000: RM 90,000
Price of the house in 2020: RM 200,000
Percent of profit: 123%

INSURANCE AND TAKAFUL PLANNING
Mrs Bariah subscribe an insurance called Mabrur Insurance from Takaful Insurance. The price
for a premium package are RM 150. For a year, she paid RM 1,800 for her insurance which
cover her whole family.
For takaful planning, she join Child Education Takaful Plan (CETP) from Takaful Insurance
too. This plans for her son's future so they don’t have to makes any loan if they want to further
their studies. Mrs Bariah paid RM 200 each for her sons which makes RM 400 per month.
Annually, she spend RM 4,800 for Ahmad Albab and Ahmad Mahmud future.

RETIREMENT PLANNING
Mr Ahmad contribute 11% of his salary which have to pay is RM 242 for every month which
in one year the total amount is RM 2,904. He plans to retire around 55 years which makes his
EPF income more than RM 100,000.
For Mrs Bariah, she has two choices whether to choose EPF or pension fund. After
consideration she decide to choose pension fund since she wants to serve for Universiti
Teknologi Mara until she retire. With this plans, she will receive RM 3,000 every month as her
pension fund.

PANDEMIC COVID-19
During this pandemic, most of us were affected in term of financial and mental. Mr Ahmad's
family also been affected and they already spend plenty money on masks, hand sanitizer and
etc. So they decide to take precaution steps in order to avoid themselves from infected with this
disease.

SUMMARY

As conclusion, this family has managed their financial planning effectively. They have positive
net worth every month and consistence income. Beside that, they be able to pay short term
obligation such as personal loan, housing loan and etc. Their debt ratio also manageable. They
have some savings to use in case of emergency occur.