FACULTY OF BUSINESS MANAGEMENT

BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE

(BA242)

PERSONAL FINANCING PLANNING (FIN533)

INDIVIDUAL ASSIGNMENT: FINANCIAL PLANNER ON MR OMAR’S FAMILY

PREPARED FOR:

MADAM HAJAH SITI AMINAH BINTI HAJI MAINAL

PREPARED BY:

LUQMAN SYAFFIQ BIN OMAR 2018683066

 1. INTRODUCTION

Mr Omar bin Omar is 56 years old and has a family. His wife is Mrs Zanariah binti
Bujor and she is 52 years old. Mr Omar works as an Officer at Pendidikan Pelajaran Daerah
(PPD) located at Sabak Bernam, Selangor, Malaysia. His spouse, Mrs Zanariah works as a
teacher in primary school at Sungai Besar. They are gifted with 4 children which is 3 girls and
1 boy. The eldest one is Nurul Shuhada binti Omar, 27 years old and work as a teacher in
private school at Kuala Lumpur. Second is Nurul Shahida binti Omar, 25 years old and work
as a teacher in secondary school in Kuala Lumpur. Third one is Nurul Shahira binti Omar, 23
years old and work as teacher in Taska at Sungai Besar. Lastly the youngest is Luqman Syaffiq
bin Omar, 21 years old and studying in UITM Puncak Alam pursuing his degree in Bachelor
of Business Administration (Hons) Finance. This family lives in Taman Setia Jaya, Sungai
Besar Selangor.

This family lives in their lovely house in Taman Setia Jaya, Sungai Besar Selangor. Mr
Omar also owns two car which is Honda CRV and Hyundai Atos and also a motorcycle for
daily commute to workplace. His wife, Mrs Zanariah on the other hand owns a Proton Persona
for her use commute to workplace. Relationship between me and Mr Omar and Mrs Zanariah
is they were my lovely father and mother since the day I been born in this cruel world

Mr Omar earns of gross income RM8,000 a month and his wife Mrs Zanariah earns
RM6,200 a month. They always been alert about their financing, how they manage their money
to make sure that it can be used accordingly to what is needed.

Mr Omar has one housing loan 6 years remaining, hire purchase loan, personal loan
and credit card outstanding balance that is maintained by him. Mrs Zanariah on the other hand
has only one hire purchase loan to be maintained. Calculations and formulations that we
derived are shown in the following section of this assignment.

Regarding this family’s duration of loan repayment period, this diagrams are shown below
Particulars Remaining period
House loan 6 years
Honda CRV 5 years
Proton Persona 1 years
Personal Loan 2 year

LOAN OUTSTANDING CALCULATIONS

i) House Outstanding Balance

House Price : RM138,000
Down payment : 10% (RM13,800)
Loan Tenure : 25 years
Interest : 4% pa
Total Payment : RM194,621
Monthly Installment : RM649
Outstanding balance : RM649 x 12 mths x 6 years = RM46,728
ii) Honda CRV Hire Purchase
Car Price : RM148,000.00
Downpayment : 10% (RM14,800)
Loan Tenure : 9 years
Interest : 3% pa x RM133,200 (loan amount) x 9 = RM35,964
Actual price = RM133,200 + RM35,964 = RM169,164
Yearly = RM169,164/9 = RM18,769
Monthly = RM18,769/12 = RM1,566.3
Outstanding balance = RM18,769 x 5 years= RM93,845
iii) Proton Persona Hire Purchase
Car Price : RM50,300
Downpayment : RM5,699
Loan Tenure : 9 years
Interest : 3.25% pa x RM44,601 (loan amount) x 9 = RM13,045.79
Actual Price = RM 44,601+ RM 14,045.79 = RM57.646.8
Yearly = RM57,646.8/9 = RM6,405.2
Monthly = RM6,405.2/12 = RM533.8
Outstanding balance = RM6,405.2 x 1 years = RM6,405.2
 iv) Maybank Credit Card Outstanding
Card balance = RM6,000
Interest Rate = 15% pa
Payment per month = RM300.00

v) Personal loan
Borrow Amount : RM25,000
Profit rate : 4.90%pa
Financing tenure : 3 years
Interest: 4.9% x RM25,000 x 3 = RM3,675
Total personal loan = RM28,675
Yearly : RM28,675/3 = RM9558.33
Monthly : RM9558.33/12 = RM796.53
Outstanding balance : RM9,558.33 x 2 = 19,116.66

2. MONTHLY EXPENSES FROM JANUARY TO DECEMBER 2019

MONTHLY EXPENSES 2019
DESCRIPTION JAN FEB MARCH APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
1 Honda CRV monthly payment 1566.3 1566.3 1566.3 1566.3 1566.3 1566.3 1566.3 1566.3 1566.3 1566.3 1566.3 1566.3 18795.6
2 Proton Persona monthly payment 533.8 533.8 533.8 533.8 533.8 533.8 533.8 533.8 533.8 533.8 533.8 533.8 6405.6
3 Credit card monthly payment 300 300 300 300 300 300 300 300 300 300 300 300 3600
4 House monthly payment 649 649 649 649 649 649 649 649 649 649 649 649 7788
5 Personal loan monthly payment 796.53 796.53 796.53 796.53 796.53 796.53 796.53 796.53 796.53 796.53 796.53 796.53 9558.36
6 Zakat 92 92 92 92 92 92 92 92 92 92 92 92 1104
7 Groceries 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000
8 Fuel, gas and tol 650 650 650 650 650 650 650 650 650 650 650 650 7800
9 Utility bills (astro, electric, water, phone) 800 800 800 800 800 800 800 800 800 800 800 800 9600
10 Insurans and road tax 1,200 2,000 300 3500
11 Medical 150 100 250 500
12 Allowance for children 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
13 Holiday 1,000 1,000 1,000 3000
14 Children education 1,000 1,000 2000
15 Maintenance 200 300 650 800 150 400 1,250 550 700 5000
3. BALANCE SHEET AS AT 31 DECEMBER 2019

BALANCE SHEET OF MR OMAR'S FAMILY AS AT 31 DECEMBER 2019

ASSETS RM LIABILITY RM
Liquid Assets Current Liabilities
Mr Omar Savings Acc 15,000.00 Mr Omar Credit Card 6,000.00
Mrs Zanariah Savings Acc 8,000.00

Total Liquid Assets 23,000.00 Total Current Liabilities 6,000.00

Lifestyle Assets Non Current Liabilities

Honda CRV 120,000 Personal Loan 19,117
Proton Persona 20,000 Honda CRV balance 93,845.00
Yamaha Lagenda 1,500.00 Proton Perodua balance 6,405.20
Hyundai Atos 4,000.00 Housing loan balance 46,728
House 400,000.00
Furnitures 20,000.00
Gadgets and laptops 5000

Total Lifestyle Assets 570,500 Total Non Current Liabilities 166,095

Investments Assets
Mr Omar Tabung Haji 5,000.00
Mrs Zanariah Tabung Haji 5,000.00

Total Investment Assets 10,000.00 NET WORTH 431,405.1

Total Assets 603,500 Total Liabilities 603,500

4. CASH FLOW STATEMENT FOR YEAR ENDED 31 DECEMBER 2019

CASH FLOW STATEMENT FOR YEAR ENDED 31 DECEMBER 2019

INCOME RM RM
Mr Omar Salary (8,000 x 12) 96,000.00
Mrs Zanariah Salary (6,200 x 12) 74,400.00
Bonus 7,000.00
Divident Tabung Haji ( 1.25 x 5,000 x 2) 125.00

TOTAL INFLOW 177,525.00

EXPENSES RM RM
Honda CRV monthly payment ( 1566.3x12) 18,795.60
Proton Persona monthly payment ( 533.8 x 12) 6,405.60
Credit card monthly payment ( 300x12) 3,600.00
House monthly payment ( 649 x 12) 7,788.00
Personal loan monthly payment ( 796.53 x 12) 9,558.36
Zakat 1,104.00
Groceries ( 1,500 x 12) 18,000.00
Fuel, gas and tol ( 650 X 12) 7,800.00
Utility bills (astro, electric, water, phone) ( 800 X 12) 9,600.00
Insurans and road tax 3,500.00
Medical 500.00
Allowance for children (1,000 x 12) 12,000.00
Holiday 3,000.00
Children education 2,000.00
Maintenance 5,000.00

TOTAL OUTFLOW 108,651.56

CONTRIBUTIONS TO SAVINGS 68,873.44

 5. RATIOS AND COMMENT

RATIO

1) Liqud assets to take home pay ratio = liquid assets/take home pay

2) Current ratio = Liquid assets/current liabilities

3) Debt ratio = Total liabilities/total asssets

4) Debt service coverage ratio = Take home pay/debt service charges

FINANCIAL RATIOS

1 Liquid Assets to Take Home Pay Ratio

23,000 13.94%
164,934
(13.94 X 12)/100
= 1.67 month

2 Current Ratio
23,000
=3.83
6,000

3 Debt Ratio
172,094.9
X 100%
603,500 =28.52%

4 Debt service coverage ratio

164,934
= 42.89
3,845.63
COMMENT ON RATIO

1. Regarding to Mr Omar’s family liquid assets ratio, the current situation for them is not
very good because regarding to this ratio, a person must have liquid assets equal to three
to six month’s worth of take-home pay in order to be on the safe hand. Based on the
ratio calculated which is 1.67 month, they must doing something to make sure the liquid
assets in on safe side such as make more savings account in different intermediaries or
save more money in the account.
2. The current ratio should be more than 1 in order to maintain liquidity. Based on Mr
Omar’s current ratio, it shows that this family has high liquidity position.
3. For a person working in public or government sector, this debt ratio can go high as 40%
to stay not having difficulties about their debt. Based on the ratio, meaning this family
is far from reach 40% so they will not get trouble to settle their debt.
4. Based on debt service coverage ratio, this means that Mr Omar and his wife earns
RM42.89 in total in take-home pay for each RM1.00 of required debt repayment and
interest. The higher the ratio, the better because it means that Mr Omar’s family has the
ability to make payments.
6. INCOME TAX YEAR ASSESSMENT 2018

INCOME TAX COMPUTATION

INCOME TAX YEAR ASSESSMENT 2018
Omar Zanariah
RM RM RM RM
Agregate Income:
Salary 83,325 63,260

Bonus 5,000 2,000

TOTAL AGREGATE INCOME 88,325 65,260

TOTAL ASSESSABLE INCOME 88,325 65,260

(-) Relief
Self 9,000 9,000
Parent Allowance 5,000 1,500
Medical 500 500
Lifestyle 2,500 2,500
Child above 18 and Study 2,000

TOTAL RELIEF 19,000 13,500

TAXABLE INCOME 69,325 51,760

Tax Payable
First 50,000 1,800 1,800
Next 19,325 and 1,760@ 14% 2,706 246
4,506 2,046
(-) Rebate
Self
Wife
Zakat 540 546

TOTAL TAX PAYABLE 3,966 1,500

7. COMMENTS ON FAMILY CURRENT AND FUTURE FINANCIAL PLAN

i) INSURANCE
I believe that Mr Omar should have an insurance for himself and his family. He and his
wife was depend only on the benefit that they get by works in the government. They at least
should have life and health insurance for them and family. These two types of insurance is very
important now days to avoid have trouble in the future if bad things happen to them. In order
to have protection, they should subscribe new insurance for better life.
ii) INVESTMENT
Mr Omar’s and current investment is only in Tabung Haji. I would recommend Mr
Omar to having more investment account and encourage him to invest his savings into Amanah
Saham Berhad that guarantees 7% return every year that is backed by government. His wife on
the other hand, invests her savings in Tabung Haji which are also considered good. They can
also invest their money in ASB to get more savings for them and their children in the coming
year. Future plans of their investment would be, they should diversify their investment portfolio
to unit trust or perhaps higher risk in stock market.

iii) RETIREMENT PLANNING

Mr Omar and Mrs Zanariah has accumulated amounts in his savings account and the
principals and dividends are reinvested for retirement savings. He and his wife also will get
pension by the government right after they retire. At the time of retirement, they would have
sufficient amount to retire depending on his spending later in life.

iv) ESTATE PLANNING

Current estate planning of this family is that Mr Omar has named his wife and his
children for the beneficiaries for his assets should he passed away. I recommend this family to
seek for a lawyer to set up a wills for their wealth to avoid misagreement between beneficiares
later in life.
8. APPENDIX

MR OMAR’S HAPPY FAMILY

 MR OMAR’S LOVELY HOUSE

MR OMAR CAR’S MRS ZANARIAH CAR’S