07.17.09
Pay Insurance Premium Monthly and Get Double Protection
A few days ago I attended an interesting presentation from an insurance company (Sequislife Indonesia). Some details of the illustration:
- The sum assured for life insurance is Rp.100,000,000 (USD 10,000) and there is an additional investment in mutual fund managed by Schroder. It is assumed that the return of the investment is around 17% a year.
- There is also a health coverage for critical illness, hospital expenses up to Rp.220,000,000 per year.
- The annual premium is Rp.15,000,000 (around USD 1,500)
- The payment premium period is 8 years
Although it is a very good program, the considerably high annual premium payment may deter some people to take this program. The insurance company offers a monthly payment program but there is better alternative.
The solution is to use an automatic saving plan offered by some banks. In this case, I’ll use Mandiri Tabungan Rencana (MTR) offered by Bank Mandiri. Some details of MTR:
- The minimum term is one year (it can be up to 20 years)
- The minimum monthly saving is Rp.100,000 (USD 10)
- The interest is 0.5% higher than the bank saving rate. At the time of writing, the interest is 4.25% p.a
- There is an insurance coverage from PT AJ Manulife up to Rp.5,000,000 (USD 500) per month in case of death or total permanent disability. The insurance premium is basically free because it is paid by the Bank.
How can you use this?
- If you decide to take the program illustrated above this month, you need to pay the first annual payment, Rp.15,000,000 in full.
- In the same month, open an account in Bank Mandiri and start an MTR program.
- Choose one year term and monthly saving of Rp.1,250,000. It will be automatically debited from your account every month so you do not need to worry about missing any payments.
- At the end of the one year term, use the collected amount of Rp.15,000,000 to pay for the insurance premium.
- Repeat Step 3
What are the benefits of using this method?
- Pay monthly instead of annually
- Get additional protection for free
- Earn interest on your monthly saving that’s even higher than the interest in regular saving account
You may be able to use this method with any insurance company or banks of your choosing that may offer similar programs. Please check thoroughly with your insurance company or bank before making any decision.
Learn and Grow!
Disclaimer:
All information provided on this site is for informational purposes only. This blog post is not meant as a financial advice. I’m only sharing my experience.
11.18.08
Prosperity Jars – Money Management System
These are my prosperity jars, a complete set of six jars for money management.
My current money management system:
- 10% for Financial Freedom Account
- 10% for Long Term Savings for Spending Account and Debt Repayment
- 10% for Education Account
- 50% for Necessities Account
- 10% for Play Account
- 10% for Give Account
Each jar also has a corresponding bank account in different banks.
I currently use BCA Bank for Necessities Account because it has the best facilities such as internet banking, mobile banking and ATMs everywhere. It is very convenient that I can do almost everything from home. Since a lot of people have an account in BCA, it is the most widely used to pay other people. The drawback of this account is low interest rate, monthly bank fees of Rp. 10,000 (USD 1) and transfer fee to other bank of at least Rp. 5,000 (USD 0.50) per transaction.
I use Danamon Bank for my Financial Freedom Account (FFA) and Give Account. I use an account called Danamon Lebih that does not charge monthly fees as long as the balance is above Rp. 100,000 (USD 10). I use it to hold daily deposit of FAA until the amount is big enough to be invested in term deposit or other investment instrument. Currently the term deposit rate at Danamon Bank is 10% for 3 month term. The drawback of Danamon Bank is its extremely slow service and limited facilities.
My LTSS Account resides in BII Bank. I am sorry to say that I am quite disappointed with BII because it offers a lot of facilities such as internet banking and mobile banking BUT those facilities simply do NOT work! Until now I have not been able to login to their internet banking site! Why do I still use this for my LTSS account? This account serves me a purpose of discouraging me taking money out of this account.
I locate my Education Account in Mandiri Bank. Mandiri Bank also has a lot of facilities. Some advantages of using Mandiri Bank are: the ability to invest in term deposit account online, cheaper fees to pay bills and credit card balance, cheap and easy access to various mutual funds.
I have my Play Account and some of my Give Account in cash so I can use it anytime.
I also keep updating my money management system so that it is getting better everyday. Next time I’ll share with you some money management software to help you manage your money better.
If you want to learn more about the money management system or some advice on managing your money, please contact me at ingesantoso(at)hotmail.com
Learn and Grow!
Inge Santoso, B. Com
11.12.08
Money Management Jars
In the Millionaire Mind Intensive Seminar, we were taught a simple and effective money management method using six different jars. They are: Financial Freedom Account, Long Term Saving for Spending, Education, Necessities, Play and Give.
Although most of the money is kept in separate bank accounts. The actual jar serve as a visual reminder. The jars enable us to have a physical experience, to see, touch, hear even smell the money.
When we were at the seminar, they sold six-jar-set with labels for S$25. I prefer creating my own customized jars 
Hmm…more beautiful and cheaper too. These amazing jars cost me less than S$10. Awesome!
If you want to learn more about money management, I can help and coach you. You can email me at ingesantoso (at) hotmail.com
10.15.08
Blog Action Day – Poverty
Today is Blog Action Day and the topic this year is about poverty. I am joining other bloggers around the world to write about poverty.
What can I do to help and make a difference?
As a teacher and coach, I usually seize the opportunity to talk about personal finance with my students whenever the opportunity arises. I see a need to teach them about personal finance because:
- Almost all of my university students have no clue about managing their finances;
- They may have heard about interest, yet they do not know the power of compound interest;
- They do not know the danger of consumer debts;
- Negative beliefs about money are prevalent. Scarcity mentality can be found everywhere.
I have a 3-hour seminar about personal finance for young executives, students and teenagers. It is called “The Secret to be A Billionaire” (Billionaire is the new standard for wealth here in Indonesia because almost everybody is a millionaire ha ha ha) I use some of the basic principles written in the book “The Automatic Millionaire” by David Bach and combine them with other financial tips from various sources. I talk about savings, basic investment strategies, reducing debts, giving and shifting beliefs about money.
I want to be given the opportunity by various universities and schools in Solo to give this seminar to their students, so I can help and make a difference by equipping the next generation with better financial knowledge and skills. I hope that by learning about personal finance, they can become catalysts for breaking the vicious circle of poverty.
Learn and Grow!
Inge Santoso, B. Com for Blog Action Day 2008
06.04.08
New Bed and Good Night Sleep
Last week we bought a new Dunlopillo Backsafe mattress, divan and headboard to replace my old bed. I wanted to get a new mattress because the old mattress was too soft and it did not support my back. This time, I specifically asked for a very firm mattress that would support my back, thus avoiding back pain. The divan and headboard were bought as an afterthought because I loved leaning on the headboard when I read at night.
The bed was delivered two days ago and I’ve had such a good night sleep two nights in a row. In the last two days, I woke up about one hour later than my usual wake up time at 5AM. My family commented that it was because of the new bed being too comfortable.
I believe a good night sleep is very important because it is the time when our brain processes and re-organizes information that we receive during the day. It is also the time when our body detoxifies and rejuvenates to prepare us for the next day. (Ahem, my excuses for sleeping longer HAHAHA)
What do I love about this bed?
- It is firm and hard, yet soft and comfortable. I don’t know how to explain it, you just have to feel it yourself
- It provides independent support so that when I twist and turn, I do not disturb the person sleeping next to me
- I was told that it is low allergenic and pollution-free. It has anti-microbes properties and resistance towards dust mites, mould and bacteria. It is basically healthy.
Although it may be a good investment in the long run, but I still feel it is a very expensive purchase. If I want to rationalize this purchase, I would calculate the daily cost over a period of time. It costs me 50 cents a day. The question is…Would I pay 50 cents a day for a good night sleep? Well, yes! Would you?
I am looking forward to having good night sleeps in the days to come.
Learn and Grow!
06.02.08
Credit Card Fraud Incident
Last month when I checked my credit card statement, I was quite surprised to see an unrecognized transaction. It was a purchase in Jakarta by the amount of Rp. 500,000. I was sure that it was a fraudulent purchase because of several reasons:
- I was in Jogja on that particular day. I was having coffee in Starbucks Jogja and the credit card statement clearly stated that I had two transactions in Jogja that day.
- I always keep track of all my expenses, no matter how small or trivial it is.
- I rarely used that particular card because it was an additional card issued by the bank. I only used the card once when I bought something from the bank catalogue the month before. At first I suspected that they double billed me on that transaction because the amount was the same, but the bank said that it wasn’t.
- The card was brand new because my sister just brought it home from Jakarta that weekend.
I called the bank’s customer service and I was advised to block the card and got it replaced, costing me Rp. 50,000. Then they also said that I could get the detail of the transaction so that I could be sure that it was not my transaction, costing me another Rp. 30,000. Since I was convinced that it was not my transaction I followed their advice. I thought if it was really a fraudulent transaction then I could save Rp.420,000 (Rp.500,000 minus Rp 80,000).
I also decided to pay the credit card bill in full because I did not want them charging me interest if it turned out to be a valid transaction. I’d rather have the bank credited the amount back to me if it turned out to be legitimate.
Last week, I received a copy of the transaction slip. When I saw the signature, it surely was not mine but it looked familiar. Finally I recognized the signature, it was my sister’s!
Before lodging the complain to the bank, I’ve already asked my sister whether she ever used my credit card and she said she would never have used mine. I also asked her whether she recognized the name of the store and she said that she didn’t recognized the name. When I showed her the transaction slip, she also recognized her signature. Finally after asking her secretary to search through all her credit card receipts, she found the original slip. It turned out she mistakenly used my credit card because she put my new credit card in her wallet because she was afraid of losing it if she put it in her bag. She took out the wrong credit card when she paid a deposit for her gown.
Yesterday I called the bank to inform them that I wanted to withdraw the complain about that transaction because I already knew what happened. They said that they’d charge me Rp. 80,000 for the cost of card replacement and detail enquiry.
How did I feel about this? First, I was slightly embarrassed because I was so convinced that it was the bank’s fault, yet at the end it turned out to me our own mistake. Second, I was quite annoyed with my sister because she didn’t keep a good record her transactions, otherwise she would’ve known when I asked her the first time. Third, I was upset because I had to pay Rp.80,000 to find out.
Lessons:
- Keep a complete record of all your transactions, especially credit card transactions because it will be very helpful in case your credit card is used by other people.
- Make sure that you check the name on the card before using it to avoid mistakenly using your sibling’s card.
Learn and Grow!
Inge Santoso
