University, final presentation, results, convocation, and then we are free! But not quite. After education, most graduates will enter into that wonderful next dimension: WORK.
Welcome to the working world freshies: The ultimate destination after you graduate. Being independent and handling your own money can be a “fun” thing to do, but it can also be a great time to build your wealth for the future. Of course to do so, you will need to let go of these common fresh graduate myths.
I Graduated So I Should Be Paid a Lot
Here is the sad truth, fresh grads: your first salary isn't going to be stellar and it possibly will continue to not be stellar unless you seriously up your game. There are no free lunches in this world and having a degree from an international university no longer guarantees the employers will be lining up at your door. But we can say from collective experience that if you work hard - it should increase with the right employer.
What makes you employable is much more than a scroll of paper and employers want to see that you are really worth the while before they pay you the usual industry wage.
Fresh grads also need to be trained and it will take time before they can be of optimal use to employers, hence the limited payscale but don't let this discourage you - it's not a sign of your worth just yet!
Sometimes, it doesn't hurt to accept a modest wage if the job is a learning experience for you. Don't be quick to dismiss an opportunity based on what may be your own disproportionate view of the 'right salary'. Think about it: 6 months of a low salary still gives you more money (and experience!) than unemployment does (duh!).
Commitment Can Wait, Let Me Enjoy First!
We don't mean the marrying kind but the financial kind. Many young grads want to enjoy their newfound financial freedom by buying new stuff or taking holidays with their first salaries but if you want to build a good empire - starting early is the best you can do for yourself.
Buying your first home; taking out your first fixed deposit or investing in your first unit trust can all give you much more benefits if you start early. Imagine the interest you would have accumulated at the young age of 35; or how much sooner you'll pay off your home loan if you bought early.
You can use your savings and combine your EPF savings from Account 2 to invest in property. Owning a house is a crucial step to build a bright future for your family and yourself. There are also many first home owener schemes such as PR1MA and Skim Rumah Pertamaku to get you started.
As the Malay saying goes, “Bersakit-sakit dahulu, bersenang-senang kemudian”. Try allocating a specific sum of money every month for building your wealth; be it in repaying a home loan or investing in your fixed deposit. Drop by drop creates an ocean, so why not take the aim to start building early?
There is Still Ample Time to Save
Living from paycheque to paycheque is unfortunately the norm for most of us, but it can get harmful if you start adapting to this lifestyle in your early years and find yourself unable to quit it later.
Sure, you may have the luxury of blowing a couple of paycheques on a stereo system or the latest gadget now - but keep doing it every month and you risk damaging your potential for future wealth.
Having a budget which will slowly and steadily help you maintain a good savings account will give you the peace of mind that comes with having an emergency fund as well as seed money for whatever you wish to do in future.
I am Young, I Don't Need Insurance
One never knows then the bolt of thunder will hit him/her. Getting a health insurance will be indeed be beneficial as you will realise it's immense need when you are ill.
A health insurance will not only give you peace of mind, but applying early reduces the risk of you getting a policy that doesn't cover all your medical exigencies. Pre-existing illnesses are a big red flag to insurance companies and this will not only drive up your premiums; it will reduce your cover. Insurance myths like this one abound as well, so do take note of them to ensure your policy is there for you when you need it.
Besides that, depending on how good your insurance coverage is, you will be able to get good health treatment such as treatment at your hospital of choice or full repayment for room and board. Check for the best medical cards that best suit you and your lifestyle.
I Don't Need to Manage My EPF
Whilst the above statement is both true and false; it's important to remember that you do need to pay some attention to what is happening in your EPF account. Your EPF will be able to help you budget and know where you financially stand in your retirement days but that doesn't mean you ignore it until then.
Here are some things you can do to keep your EPF in tip-top shape to enable it to help you when it is supposed to.
1) Make sure your EPF account has a nominee in the event of your demise. Whilst you may not think you will pass on so early - even if the possibility is at 0.01%, is it not worth securing your money?
2) Check that your employer has diligently paid the sum stated in your pay slip. Although rare, some employers have been known to either accidentally or purposefully deny you your EPF payments. Sometimes a mistake may see you getting less. Checking your account once in a 6 months isn't hard to do but you will be able to spot discrepancies faster.
3) Get to know your withdrawal rights. Whilst we are all for you keeping your EPF monies safe and sound until retirement; some withdrawals can be lifesavers such as the withdrawal for medical. You can also use your Account 2 to purchase property as mentioned above so take a good look at your withdrawal options.
Entering the world of work can be a nerve wracking experience but it also can be a super fun time depending on what you make of it. With the right moves; you'll be sitting pretty in your well-earned wealth before you know it.