How Strategic Financial Planning Can Help Prepare You For Big Financial Changes

The last couple of years have been trying for most, leading many to reassess their life. This realisation has brought on the Great Resignation with many opting to leave their jobs in search for purpose, peace and better prospects.

According to Employment Hero’s 2021 Report, 61% of Malaysian workers plan to find a new job in 2022 with Gen Z and Millennials leading the pack. 

While these decisions can be positively life changing, it is important to properly evaluate if one is able to financially handle this transition. Here are some key steps to help you assess your circumstances before making that big life change.

Know One’s Strengths and Skillset 

It is first important to identify one’s strengths and skillsets that enable them to make a living. The financial risk is much lower for a move within the same industry. If the decision is to make a 180 change or start a business, one should anticipate taking a financial hit either due to a pay cut or having to bootstrap the startup. 

Plan Ahead

It is important to identify monthly expenditures and plot future expenses such as an upcoming wedding or house purchase to avoid surprises that could derail financial security. By doing so, one can determine the amount of savings and expendable income needed to support one’s lifestyle choices. With ample tools today that simplify keeping track of expenses, taking charge of one’s own wealth has never been easier.

Identify Sources of Income 

Whether one is employed full-time or does freelance work they should always strive to vary their income streams. According to Manulife’s Asia Care Survey, 17% of Malaysians are looking to invest to better manage their finances in the wake of the pandemic. Fortunately, investing is becoming increasingly accessible through the use of technology and many young Malaysians are turning to it as their go-to passive income route.

Explore the World of Investment 

A common misconception of investing is that it requires a large amount of capital. There are many ways to start small, such as through unit trusts – one of the simpler forays into investing. Unit trusts empower individuals to diversify their investments, gain access to worldwide markets and professional fund managers. Given the right knowledge of how unit trusts work, along with better market understanding, they can be more rewarding compared to typical savings accounts that offer fixed returns of 0.2%. Unit trusts also let one opt for larger lump sum investments or staggered monthly contributions. 

Currently, HSBC is offering up to 8.18% per annum on 3 months of Term Deposit-I for those who deposit and invest in unit trust or structured investments, ideal for those who prefer to have an amount of liquid savings with a far better returns than deposit rates while growing their remaining savings. Through HSBC’s EZInvest, a platform on the HSBC Malaysia Mobile Banking app, one can start from as low as just RM500. The platform also grants 24/7 visibility of one’s portfolio, news on market movements and insights from HSBC’s global asset management team to keep updated and make sound investment decisions.

In addition to EZInvest, HSBC has introduced its Unit Trust Browser (UTB) to complement its existing digital wealth capabilities, providing a more comprehensive, holistic approach to wealth management. Through this, users can access a wide range of retail and wholesale funds across varying asset classes, geographical exposure, and risk levels. Furthermore, its interactive and user-friendly interface allows users to quickly get accustomed to personally manage their unit trust funds. 

With big life-decisions looming large for many amid a tumultuous period, it is important to assess your financial health, and explore new ways to grow financially. As investing has become increasingly diversified and accessible, it is now easier than ever to build a financial safety net so you can make big changes for a life you want.

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