Monday, 30 June 2008

The corridors of power and our power within..

What would be more ironic than to have our fate determined by those in the Corridors of power? We know that the Petrol price has increased and we cannot stop bitching about it. Similarly, we know the price of electricity, water and most essential items will be increased (if not already increased).

We know (though some maybe doubtful) that Anwar Ibrahim is probably gay and is homosexual and we bitch about his sex life as if his sex life is more important than the price of petrol. We know that we as the citizen do not benefit from any policies of Abdullah Badawi (except Abdullah’s family members that we learn from fellow bloggers like Raja Petra- RPK). We know that Najib Tun Razak having spend almost half his life as a cabinet Minister had never made any stand on his own beside yes sir yes sir and we know that his decision is probably the decision of his wife Rosmah which is doubtful if it is any better than Abdullah whom allow the 4th floor to decide for him on almost all Malaysia matters.

But what would be more ironic than that fate that was determined by those in power is to let the power that you have to be out of control. Yes we don’t agree with all the price increases but hey vote against our MPs that passed and did not debate against the price increase in the next general election. That is your power and your right and what is also within your power and control is your survivability which is more important for now. Even if we bitch every second and every hour and every day about the government’s policies, we still have to refuel our car petrol, pay the toll, pay our utility bills and even have to buy chicken when the price doubled up soon. We cannot stop using the car (or use the bicycle like the stupid display of disagreement by the opposition MPs) especially with the lousy public transportation and we cannot stop eating chicken or use candles instead of switching on the light to avoid paying the electricity bill. The next general election to channel our grouses is in another 4 years. What we need now is to survive more than bitching about everything which does not and will not solve anything. Even Anwar is probably busy with boys when he is not debating. Everybody has to survive.

Let us forget for a moment everything that is not in our control and take control of everything that is in our power? Yes, our disposable income! That is what we can control. True our disposable income is much less now with all the price increase whatever the amount is. Soon the government may use the interest rate to manage the economy and that will further decrease our disposable income. Generally, almost 90% of the working population has either a mortgage or a hire purchase loan or perhaps both. More often, 30% of our income per month is spend on the mortgage or house rental, another 30% on hire purchase car loan and another 10% for income tax, EPF and SOCSO leaving only 30% as our disposable income or the percentage that makes up our lifestyle. The 30% disposable income is usually spend on the following categories:

1) Petrol, car maintenance and toll
2) Utility bills (electric, water, astro)
3) Household expenses (Groceries, toiletries and gardening)
4) Healthcare, doctors, medicines, vitamins
5) Shopping and entertainment
6) Savings.

To be able to sustain our current standard of living or disposable income, we either need to (1) increased our salary or (2) have a higher disposable income. The recent price increased in the essentials also affected the cost of operation of our employer and the likelihood of getting a pay revision is highly unlikely. So we are left with only the latter option, to increase our disposable income.

Generally a total of 60% of our income is spent on mortgage or house rental and car hire purchase loan. We can dispose of the house and/or the car or the second house or second car and buy a cheaper one to have more disposable income but this is too tedious. If we want to maintain the same house and car but would like to have a higher disposable income, we can try to refinanced both the car and the housing loan to a longer period. Housing loan can be extended to a maximum of 30 years and car hire purchase loan (depending on year of manufacture) can be extended to 9 years. Most of the Banks now have various package of refinancing housing loans. This is imperative to ensure that the fix percentage of our spending on fix loans is reduced. A car is a necessity and is inevitable given the current state of our public transportation in Malaysia. Refinancing the car loan will ensure that you can service your hire purchase car loan regularly given further increase in the essential items prices.

With all price increases and soon the interest rate too (hopefully not), if we do not refinance our existing loans and fix the interest rate at the current rate which is still low, we may not only have a lower disposable income but we may not be able to even afford the monthly loan repayment. Thus, take action now before it is too late. In 1998 recession, all new loans we frozen and any refinancing of loans (once we are in recessions) will be impossible.

This reduction in fix loan payment per month can ensure we are ready for any inevitable price increase or interest rate variation (given our indecisive government) but it is also best to avoid any other inevitable expenses such as exorbitant car maintenance and health care.

With smaller disposable income given all price increased, any inevitable cost such as car repair or healthcare will further deplete our negligible disposable income and savings. For a start, our driving behaviour can save petrol consumption by more than 30% if we drive slow and do not step and accelerate above 2500 rpm. Driving behaviour is a start but regular car maintenance will warrant any inevitable damage to the car engine which will cost you a bomb. A normal engine lubrication service starts from only RM80 but will ensure the engine is well maintained and this regular engine lubrication service will also save your petrol consumption further which is a great savings in the long term. Proper wheel alignment and balancing will promote greater fuel savings as well as prolonging the wear and tear of any tyres which otherwise will also cost you a minimum of RM200 per tyre change. With a proper wheel alignment, balancing and driving behaviour, a tyre can last more than 20,000km. Unfortunately, the tyre and engine oil lubrication price will also increase as a chain effect of the fuel price increase… it would be good if we, the public, can hedge the tyre and lubrication oil price at the current price to avoid any further increase in the future as lubrication oil and tyres are essential expenditure for car owner. If we can hedge similar to how Airasia hedge their fuel price, then even the public can enjoy the savings by not paying more when the price increase. Yes, I will make sure Fasfik has this package extended to the public so that car owners can hedge their engine lubrication oil price as well as their tyre price fix on the current price. This is important so that you will not have to further reduce your disposable income unnecessarily.


Medical and healthcare is also a pinch in the pocket. It does not cost you much to be healthy but every time you are sick and have to visit the clinic or hospital, there will definitely be an additional cost for the travelling petrol, time and clinical bills. To avoid unexpected sickness, we have to ensure we are always healthy. All that it takes to be healthy is just a regular daily 30minutes exercise. Perhaps 30 minutes run or a walk in your neighbourhood. These 30 minutes run can improve your stamina, increase your body antibody, reduce your cholesterol or sugar level and keeps the doctors away.

Historically, the economic recession is a 10 years cycle with the last recession being in 1998. Since our country is still recording growth, theoretically we are not in recession.. or rather that is what the Government are misleading us to think. Even the CPI is said to be 5% lower than the inflation rate but we know that we are spending more than 30% our regular spending in bill payment (pertrol, electricity etc) and groceries.

Therefore and needless to say, let us not get conned by whatever the government is saying and let us not bitch too much on whatever the government is doing, let us take control and do something with our ownself before it is too late. Afterall, we need to survive..!

2 comments:

  1. unfortunately though, the 30% disposable income of a lot of ppl cant be spread into the categories that you mentioned. it's just too small.

    ReplyDelete
  2. Zewt,
    however big or small, we still have to manage our disposable income especially the spending on essential items :)

    ReplyDelete

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