Money Smarts

Well, in line with my latest attempts to start acquiring some financial smarts and being more fiscally responsible and prudent, let me attach the below link. It's written by Scott Pape, the author of the Barefoot Investor.
Caught my attention several years ago in uni, and writes very handy, practical and down to earth advice, instead of the typical run of the mill rich-dad poor dad crap that spouts rhetorical nonsense without providing real world tips.

http://www.news.com.au/heraldsun/story/0,21985,24475836-664,00.html

It does contain some really good tips, some basic fundamental stuff we all should know. If you are between 25-30, have had barely any savings, try to read through some of his previous articles as well.

I've got a very basic plan to get back into financial health.

- Settle all my credit card debts, keep one just for petrol and other expenses, and the other for non essential items, e.g. dinner, entertainment. Thats it. Carry just 2 cards.

- Submit my claims to the company. That comes to a few k.

- Collect debts from friends.

- Hence forth, keep a running balance of about 3k in my savings account, which generates negligible interest anyway, for use as petty cash and to pay off expenses. Keep another account, an FD, and stick everything else in there, and when I get my salary each month, stick the balance in after topping up the expense account. Although the FD account only generates 3.7% interest per annum (compared against the real inflation rate of 4 to 5 %), it is still better than other packages out there. This is because other funds require (a) a certain minimum deposit amount (b) insurance packages which I don't need and am already covered for (c) are either very risky or long term (d) tie me down, which is not a good idea at this point until I have a more stable cashflow (e) are essentially gambles, like in shares or unit trusts or other managed funds, which I do not have time to monitor yet or to figure out my investing strategy. Once I have a stable cashflow, and excess cash leftover after a 6 month buffer at current salary, then I'll use that to invest.

- When the Aussie dollar looks to have fallen as low as it can fall, quickly deposit as much as I can afford into my Aus account, so that I can benefit from the inevitable rise back to the 6 plus percent interest rates it was although this might take 1 year.

- Have my eyes on a few local and Aus shares. When the drop seems to be levelling off, not anytime soon I'm sure, I will snap up some.

- Right now is not a good time to purchase property. Perhaps in a year or so, when prices bottom out. When prices bottom out in a year or 2, I'd be in a stronger position to purchase something as significant as property. Although changing a car is a freat and attractive idea, at this point, again, it is definitely not something I want to do, given that interest rates on cars just increased, the economic situation is dubious at best, and that I might not be around in M'sia after next year.

At this point, this is the best plan I can think of, unless better ideas are encountered.

What's your plan? Time to start drafting one!