Making the Best out of Your Idle Money

Unused MoneyRecently my wife suggested to make some changes to the compound of our house so that we can make use of it for the possibility of doing a home business. So I went to the Employee Providence Fund (retirement fund) house to withdraw RM 15,000.00. In my past experience, it took about 3 weeks to finally have my money cash out. So I went to do the documentation early this time. But little did I know, it took only 3 days to realize the cash.

At that time, renovation work has not yet even started. Instead of letting that sum of cash sitting idle in my bank account without any function. I transferred it into Pacific Cash Fund in Fundsupermart platform.  That transaction was done in November 6th 2017 with just a few finger tips. As of today, December 1st, 2017, after 25 days, it has generated an extra RM 23.14. This is good enough for me to treat a friend for a simple meal. Does anyone want to come along?     🙂

We all know that sometimes renovation works do not finish on schedule. There are hip cups here and there. Sometimes, workers problem, material supply delay, modify plan and others may cause us burning inside.  However when I have my budget invested into money market such as Pacific Cash Fund, the more the work delay, the more “interest” I would have earned from there.  It is true now that my renovation work has been delayed, but I am in no way to hurry the work to speed up. I am expecting my interest will grow even bigger from that amount. 😀

Treating Idle Money

I believe some of our readers might have been doing personal or family businesses that have a monthly turnover of around RM 50,000.00 to RM 100,000.00. Or some of us sometimes would have a large sum of money paid by a customer and should in turn pay to supplier later on, or money given by your husband to buy a certain house hold item,  a transitional money ready to pay children school fees when school opens, etc. Somehow there is a small window of delay, caused by various good reason, what would you do with the money?

In the old fashion time, Chinese businessman liked to refer those delay paying money would have earned interest in the bank. However in our financial age under current banking system, there is no more such an opportunity to earn interest from the bank aside from Fixed Deposit. Even Fixed Deposit is also not viable if our money do not have one month allocation. Furthermore it is also too hassle to walk to the bank for physical transaction.

Thank God that we have Fundsupermart platform for Malaysians, Singaporeans, Hong Kong and India. (Other countries might have similar unit trust platform too, if you know of any, please do not hold back to share with our readers at the bottom of this web blog.) This platform was intended for mutual fund investment. It carries hundreds of fund from multiple fund houses in the country.  In those fund houses, some of them also provide money market or cash fund facilities. It is in these facilities that you can make full use of it to earn interest for your “delay” idle money.

Platform that Pay Interest

In Malaysia platform, there are at least 6 money markets that we can use (see table A).

Money Markets
Better than Fix Deposit rate from the banks (Table A)

The annual rate of return is slightly higher than Fixed Deposit from the bank. If you have opened Fixed Deposit account in the bank, you might as well can consider to transfer them into Fundsupermart money market especially if you see their interest rate offered is lower than what you see here.

The best part of it is, interest will be given out on a daily basis. There is no locked up period for any time frame. The best of all is the RHB Cash Management Fund 2.  It has the lowest requirement for initial investment, subsequent investment and no minimum holding requirement. It is also the fastest among all to cash out your money when you need it.

Interests are given out on daily basis including non-working public holidays and weekends. If it is given out on daily basis, it is best not to withdraw your fund from those facilities before 3Pm, the cut off time, on Friday.  If you need the money, it is best that you place your order after 3pm on Friday so that you would still earn interest on that particular weekend.

Managing Monthly Cash Flow

One of the main advantages or reasons for me to open up 7 accounts with Fundsupermart is the use of RHB Cash Management Fund 2.  Because it is so convenient and useful, my 7 RHB Cash Management Fund 2 accounts are fully utilized (One fund with each account). Sometimes, it is not even enough, then I will go for money market funds like the above house renovation budget money case.

I have used this cash management funds and money market funds to help manage my monthly cash flow (monthly expenditure).  There are often times, even though all the bills have been paid and cleared out totally,  there are still some extra money left in the account. Do you know why? The answer is those are “interests” earned because of the delay money from credit card payment and other yearly bills.

Yearly bills are those life, house, cars insurances, house assessment, road taxes and others. Those are large amount I need to pay when the time comes. But I save them up on a monthly basis using those facilities. When the time comes to pay, I don’t even have any pressure of meeting them up but have even some extra interest earned.

There is an anonymous quote saying, “It is not about how much money you made, it is how you save it.”  It is also true that before thinking you can invest successfully, you got to settle how you manage your cash flow. One of the ways is maximizing every cents you have for your benefit, especially in the area of making maximum use of the delay paying money. It is not so much on how much interest you can earn out of it, but on how much a character and skill you can build from doing it.

 

 

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4 thoughts on “Making the Best out of Your Idle Money

  1. Great advice.
    How do you manage your emergency fund?
    Do you do the same here?
    As far as I am concern, to withdraw fund from fundsupermart is not an immediate transaction. It takes 3 day to complete the transaction.

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    1. Thank you for responding. Yes I do the same with my emergency fund. 3 days waiting for the cashing out is still OK with me. I do have a little bit on the liquidity side with the bank. But the big bug is with Fundsupermart. I am even a little bit more naughty … put in bond and equity (safer one) as well…ha ha..

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  2. Postscript: Renovation works have finished. Payment have been mostly paid and now only a small remainder will need to be settled. We are now waiting for the money to be dropped down from Fundsupermart. So far, as I have counted while ago, this standby cash, not only earned an extra of RM 23.14, but RM 116.58. That is because during the waiting period (between November and December), Asian stock markets generally consolidated. I saw this as wonderful chance to do bottom fishing. So I switched half of the Pacific Cash Fund into the Pacific Focus China Fund … there it earned even a higher “interest rate,” ha ha.. that’s so easy…. 🙂

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  3. News Update: Renovation work wages have been fully settled now. Another interesting update for you is this; Out of the remaining fund, a portion of RM 2,301.31 is sitting on Pacific Focus China Fund and it has garnered another RM 113.23 profit as of today. It is a one month investment with 4.92% return. If you are familiar with unit trust investment through Fundsupermart, this is how easy it is to earn extra income with your idle money. I hope you all will also learn how to benefit yourself with this Fundsupermart tool.

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