Little by little, a little becomes a lot

NOW that Christmas, New Year and Chinese New Year are over, many of us have started to reconcile the amount spent for these celebrations.

Not surprisingly, many have underestimated the current cost of living and have therefore overspent.

Hence, it did not come as a surprise to me when I overheard one of my relatives saying that the price of an eight-course Chinese New Year package at the restaurant that she often frequents has increased by 15% from RM898++ to RM1,028++ within a year. Not only has the price increased, she also noticed the serving portions were smaller than the previous year.

The rising cost of living caused by the depreciating ringgit, hike in transportation costs, the goods and services tax implementation, etc, was the hottest topic of discussion during these festive gatherings. Among the various counter-measures, some young ones welcomed the option to reduce the Employees Provident Fund (EPF) contributions, citing that it would help relieve their burden.

The reduction in EPF contribution came about early this year when the Government announced that employees had the option to reduce their EPF contribution by 3% from March 2016 until December 2017 to spur economic growth and at the same time, put more money into the rakyat’s pockets. According to our Prime Minister who is also the Finance Minister, this move is expected to increase consumer spending by RM8bil a year.

It sounds good as we now have the option to have more disposable income. Yet, should we encourage spending or saving during this challenging time.

Before answering this question, let’s ask ourselves what we should do with the extra disposable income. Repay credit card instalments, go after items such as expensive household goods, electronic gadgets or gourmet food?

If we are not careful, we will end up spending based on our desire instead of necessity. Hence, having more money to spend is not necessarily good. It depends on how we plan our future finances, and whether we spend the money on “good debt” or “bad debt” as explained in my previous articles.

If we unnecessarily spend the additional income on luxury goods such as a new car which depreciates over time, we are practically paying for “bad debt”, as these items are liabilities instead of assets.

In contrast, if we convert the additional income into “good debt” such as investing in commodities/ shares or to fund our housing loan, we can enjoy the long-term benefits as the value of these assets will likely appreciate over time.

At a glance, 3% taken out from the EPF per month may not be seen as a lot. However, it will become a significant amount in the long term.

For an individual earning RM5,000 a month, 3% equals to RM150. As such, the total amount is RM3,300 for the duration of 22 months (March 2016 to December 2017). Assuming the average EPF interest rate at 6.5% per year (based on the dividend declared this year), the compounding rate for RM3,300 could potentially become RM23,190.64 after 30 years!

Therefore, unless there are really good reasons to use this additional disposable income, it is better to retain this seemingly small amount as retirement funds, giving its potential to grow significantly in the longer term. Besides, the savings in the EPF can also be withdrawn during rainy days to fund the payment for children’s education, purchase a new home and payment of medical expenses for treatment of critical illnesses.

At this testing time when many are faced with the burden of rising costs and economic slowdown, it is important to resist the temptation of instant gratification, be prudent in spending, and be able to differentiate between “good debt” and “bad debt” in making financial decisions.

For those who have yet to opt out from reducing the EPF contribution from 11% to 8%, it is important to use the additional money wisely so as to ensure that your retirement fund is not affected. Every ringgit saved or invested is essential in making a difference in our future financial position.

When I was a kid, my parents encouraged me and my siblings to save. Each of us would have our own piggy banks and they would continue to remind us about the beauty of saving. Until today, I still like this Malay proverb – ‘Sedikit, sedikit, lama-lama jadi bukit’ (little by little, a little becomes a lot).

Datuk Alan Tong has over 50 years of experience in property development. He is the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Old and ageing abused by their own Children

PETALING JAYA: When his son left him at a bus station, John (not his real name) waited patiently for him to return. Five hours later, he was still waiting. Passers-by noticed him and called the police.

The 72-year-old man has dementia and was sent to hospital. Medical social workers managed to get him to recall his son’s telephone number.

When they called John’s son, he did not want to take his father home.

People like John are vulnerable to abuse and neglect, and he is not eligible for government shelter for the elderly because he still has a family.

John is among many Malaysian elderly folk who are facing abuse and neglect. According to a study, one in 10 urban elderly Malaysian is abused, with financial abuse being the most common.

The survey by a team of researchers from the Department of Social and Preventative Medicine under Universiti Malaya’s Medical Faculty said psychological abuse was the next most common followed by physical abuse.

“A pilot survey was done among the urban poor in Kuala Lumpur in 2012 involving 291 individuals above the age of 60. There were elders living in low-cost government-subsidised flats. Of the total, 9.6% said they experienced one or more forms of abuse within the last 12 months of the survey,” said Dr Noran Naqiah Hairi.

By S. Indramalar The Star/Asia News Network

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Dr Noran is leading the Prevent Elder Abuse and Neglect Initiative (Peace) with her colleague Dr Clare Choo.

The team also found that one in 20 rural elders have experienced abuse based on a survey they did among 2,000 respondents in Kuala Pilah, Negri Sembilan.

The most common abuse reported among rural elders is psychological followed by financial.

Anita (not her real name) is a subject of financial abuse. As she has arthritis, she found it difficult to go to the bank. Her son persuaded the 68-year-old retired clerk to give him the authority to handle her finances.

Soon after, he got his widowed mother to sign over her house to him.

“I didn’t want to, but I was bullied into signing my house over. He kept accusing me of not trusting him.

“At first, everything was all right. But then he began investing my money in all kinds of ventures. I have no say in what he does with my money. When I ask him, it gets unpleasant.

“But I am worried what will happen when my money runs out,” laments Anita, who lives with her son in Petaling Jaya.

Still, she would never report her son because elder abuse is not a topic Malaysians discuss openly.

Deputy Women, Family and Com­munity Development Minister Datin Paduka Chew Mei Fun admits that reported figures do not paint the actual picture.

“These are only the cases that come to us. There may be more that we do not know of,” she said.

Most of elder abuse cases go unreported as many see it as a “family problem” which can be dealt with behind closed doors.

Only 23 cases of elder abuse and neglect were reported in the past three years, according to statistics from the ministry.

The study, however, shows it is far more prevalent.

“The Peace study is the first of its kind in Malaysia and it corroborates prevalence rates of elder abuse and neglect in other Asian countries which range from 14% to 27.5%,” added Dr Noran.

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Malaysia slides in global Corruption perception index

KUALA LUMPUR: Malaysia's ranking dropped four places in the Corruption Perceptions Index (CPI) last year.

The index, released by Transparency International, showed that Malaysia was ranked 54th out of 168 countries this year compared to 50th out of 175 countries last year.

Malaysia ranked 52 the previous year.

The CPI scores and ranks are determined by the perceived level of corruption in the country's public sector.

Transparency International-Malaysia president Datuk Akhbar Satar said Malaysia's position would be even worse if seven other countries were included in last year's evaluation as their scores were above Malaysia in 2014.

"Despite many steps implemented, the level of corruption experienced in Malaysia does not seem to be decreasing," he said.

Globally, Denmark received the highest rank with a score of 91 followed by Finland (90) and Sweden (89).

Malaysia slides four points down global corruption perception index

Issues surrounding 1Malaysia Development Berhad and the RM2.6bil donation were among reasons why Malaysia slipped four points down the global corruption perception index (CPI).

The survey of the CPI of 168 nations for 2015 revealed the country's score dropped from 52% to 50% compared to 2014 while its ranking slid from 50 to 54.

Transparency International Malaysia president Datuk Akhbar Satar said the recent controversy surrounding 1MDB and the RM2.6bil donations contributed to the drop.

"There were 175 countries that were surveyed last year.

"However, seven countries were not included in the survey which would have pushed our ranking down further," he said during the announcement of the global CPI

Among the nations that scored the top marks were Denmark (91%), Finland (90%), Sweden (89%), New Zealand (88%), Netherlands and Norway (87%).

Among the nations to score the lowest were Angola, South Sudan, Sudan, Afghanistan, North Korea and Somalia.

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South China Sea among world's freest and safest shipping lanes

China was the earliest to explore, name, develop and administer various South China sea islands. Our ancestors worked diligently here for generations. Beijing's control is justified, says Wang Yi

http://t.cn/RGEz7El

BEIJING: The South China Sea is one of the world’s freest and safest shipping lanes, Chinese Foreign Minister Wang Yi said, arguing that Beijing’s control over the disputed waters was justified because it was the first to “discover” them.

China has come under fire from the United States and its allies in recent months over its land reclamation activities in the South China Sea, through which US$5 trillion (RM20.3 trillion) in ship-borne trade passes annually.

The US Navy has carried out freedom of navigation exercises, sailing near the disputed islands to underscore its rights to operate in the seas. Those patrols, and reports that China is deploying advanced missiles, fighters and radar equipment on islands there, have led Washington and Beijing to trade accusations of militarising the region.

The freedom of navigation does not equal the “freedom to run amok”, Wang told his yearly news conference on the sidelines of China’s annual parliament meeting.

“In fact, based on the joint efforts of China and other regional countries, the South China Sea is currently one of the safest and freest shipping lanes in the world,” Wang said.

“China was the earliest to explore, name, develop and administer various South China Sea islands. Our ancestors worked diligently here for generations,” Wang said.

“History will prove who is the visitor and who is the genuine host,” he said, adding that China would “consider inviting” foreign journalists to islands under its control when the conditions are right.

China was neither the earliest country to deploy weapons to the South China Sea nor the country with the most weapons there, Wang added, without saying which country was. Beijing claims almost all of the South China Sea, but Brunei, Malaysia, the Philippines, Taiwan and Vietnam have overlapping claims.

US Defense Secretary Ash Carter has warned of “specific consequences” if China takes “aggressive” action in the region.

He has said the US military was increasing deployments to the Asia-Pacific region and would spend US$425mil (RM1.7bil) through 2020 to pay for more exercises and training with countries in the region that were unnerved by China’s actions.

Wang was also asked about the Philippines case against China in an arbitration court in The Hague on the South China Sea dispute. Manila has asked Beijing to respect the decision, which is expected in May.

China refuses to recognise the case and says all disputes should be resolved through bilateral talks.

Wang repeated that China was quite within its rights not to participate and accused unnamed others of being behind the case.

“The Philippines’ stubbornness is clearly the result of behind-the-scene instigation and political manipulation,” he said, without elaborating. — Reuters

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MH370 families file biggest lawsuit in Malaysia

KUALA LUMPUR: Seventy-six next of kin of the passengers on board Flight MH370 have launched the biggest suit in the courts here against Malaysian Airline System Bhd and four others over the plane’s disappearance.

With the deadlines to do so up by today, the group – made up of 66 Chinese nationals, eight Indians and two Americans – filed the suit last Thursday, naming MAS, Malaysia Airline Bhd (MAB), Department of Civil Aviation (DCA) director-general, Royal Malaysian Air Force (RMAF) and the Government as defendants.

They are claiming for negligence, breach of contract, breach of statutory duty and breach of Montreal Convention against MAS

Lawyer N.Ganesan representing Indian, Chinese and American families said this is the biggest lawsuit against MAS in Malaysia as it involves a large number of families as plaintiffs.

In the statement of claim filed last Thursday, the families alleged that the plane’s disappearance on 8 March 2014 was caused by MAS’ negligence and the national carrier had breached the Montreal Convention by causing the injuries and death of all 239 passengers and crew..

Besides MAS, the families also named the director-general of the Department of Civil Aviation (DCA), Royal Malaysian Air Force (RMAF), and the government.

They claimed that DCA, RMAF and the government had conspired with MAS in conducting the investigation in a “grossly negligent manner” to delay the search, causing the death of all the passengers and crew.

They also contended the government and MAS had acted fraudulently and in a dishonest manner by hiding information about MH370’s disappearance from the public, and the families of passengers and crew.

The 76 next of kin are seeking damages and losses they suffered after their loved ones went missing.

“The families opted to file the lawsuit here because they have confidence in our court,” said Ganesan when met at the High Court here.

He also pleaded with the government not to move to strike out the lawsuit.

“This lawsuit deserves a day in court, and all the families deserve a fair trial,” he said.

When asked if the families were given consent by the MAS administrator under the MAS Act to initiate the lawsuit, the lawyer said they were denied consent. “They had previously said in the media that they would act in ‘good faith’ to determine fair and equitable compensation.”

“What they said was they were inviting next of kin to initiate lawsuits against them.”

Ganesan disclosed that an American law firm, Hod Hurst Orseck, will be joining the families’ legal team.

“They are the experts in civil aviation. We will be having the firm’s partners, Steven Marks and Roy Altman with me and lawyer Tommy Thomas.”

“When necessary, we will be filing for leave to the court for them to be conducting the trial,” he said.

Last week, 12 families of passengers from Malaysia, Ukraine, Russia and China sued MAS and the government for damages, shortly before the two years deadline for initiating a civil suit under the Montreal Convention.

Sources: The Star news and Free Malaysia Today

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