1 00:00:06,618 --> 00:00:11,729 Speaker 1: Ring it and sense on BFM 89.9, the business station. 2 00:00:12,948 --> 00:00:15,658 Speaker 1: I'm Jake Lim and this is Ringgit and Sense, the 3 00:00:15,658 --> 00:00:20,099 Speaker 1: show all about personal finance. Recently, a local consumer financial 4 00:00:20,099 --> 00:00:24,179 Speaker 1: expert commented that fear of missing out or FOMO is 5 00:00:24,179 --> 00:00:28,179 Speaker 1: causing young Malaysians to fall into debt. That's something I 6 00:00:28,179 --> 00:00:31,689 Speaker 1: can somewhat relate to because I caved and bought an 7 00:00:31,689 --> 00:00:35,318 Speaker 1: anime figurine that I really wanted last week, even though 8 00:00:35,318 --> 00:00:38,929 Speaker 1: I probably shouldn't have. It's that thought of. 9 00:00:39,278 --> 00:00:41,868 Speaker 1: Oh, this thing's really popular. What if it sells out 10 00:00:41,868 --> 00:00:44,539 Speaker 1: before I can buy it, you know. So this week, 11 00:00:44,708 --> 00:00:48,228 Speaker 1: I'll be delving into why people feel FOMO, just how 12 00:00:48,228 --> 00:00:50,588 Speaker 1: bad it can be for your bank balance and how 13 00:00:50,588 --> 00:00:54,269 Speaker 1: to be more disciplined financially. Joining me for this conversation 14 00:00:54,269 --> 00:00:58,188 Speaker 1: is Kimberly Law, a licensed financial planner and co-founder of 15 00:00:58,188 --> 00:00:59,429 Speaker 1: Uno Advisors. 16 00:01:00,169 --> 00:01:03,489 Speaker 1: Kimberly, thanks so much for joining me today. Let's start 17 00:01:03,489 --> 00:01:07,009 Speaker 1: with the basics, right? What's financial FOMO and why is 18 00:01:07,009 --> 00:01:09,919 Speaker 1: it becoming a bigger issue nowadays in Malaysia? 19 00:01:10,128 --> 00:01:12,409 Speaker 2: Well, FOMO is a fear of missing out. So there 20 00:01:12,409 --> 00:01:15,409 Speaker 2: are actually two types of FOMO. It's either FOMO investing 21 00:01:15,409 --> 00:01:19,369 Speaker 2: or FOMO spending. So in terms of uh FOMO spending, 22 00:01:19,488 --> 00:01:23,609 Speaker 2: that actually could lead to debt, could lead to people 23 00:01:23,609 --> 00:01:27,119 Speaker 2: taking up a lot of uh maybe buy now pay later. 24 00:01:27,479 --> 00:01:31,628 Speaker 2: They would actually spend money that they cannot afford. And 25 00:01:31,628 --> 00:01:34,579 Speaker 2: buy now pay later actually helps them with their cash flow, 26 00:01:34,829 --> 00:01:35,348 Speaker 2: quote unquote. 27 00:01:35,498 --> 00:01:38,698 Speaker 1: So they feel like they can afford something while they 28 00:01:38,698 --> 00:01:39,348 Speaker 1: can't actually, right? 29 00:01:39,488 --> 00:01:43,878 Speaker 2: They can't afford. So buying this so-called buy now pay later, 30 00:01:44,668 --> 00:01:47,748 Speaker 2: it's like micro loans, allows you to own something and 31 00:01:47,748 --> 00:01:50,308 Speaker 2: it will actually affect your spending power for the next 32 00:01:50,308 --> 00:01:51,498 Speaker 2: few months. 33 00:01:52,308 --> 00:01:52,509 Speaker 1: I 34 00:01:52,509 --> 00:01:54,789 Speaker 1: just have, I'm just curious like where. 35 00:01:55,109 --> 00:01:57,948 Speaker 1: You know, this pressure of FOMO is coming from, especially 36 00:01:57,948 --> 00:01:58,848 Speaker 1: for spending. 37 00:01:59,018 --> 00:02:02,488 Speaker 2: I would say it is definitely from either societal pressure 38 00:02:02,818 --> 00:02:07,598 Speaker 2: or social media. We are, we are so exposed to media. 39 00:02:07,888 --> 00:02:08,058 Speaker 1: Everything 40 00:02:08,058 --> 00:02:10,017 Speaker 1: looks so good right on social media and 41 00:02:10,018 --> 00:02:12,238 Speaker 2: you want to have it, you want to have that license. 42 00:02:12,668 --> 00:02:15,389 Speaker 2: You want to buy the particular items so that you 43 00:02:15,389 --> 00:02:17,828 Speaker 2: feel you feel the sense of belonging. It's like, oh, 44 00:02:17,869 --> 00:02:21,468 Speaker 2: you feel that status. So this type of like formal 45 00:02:21,468 --> 00:02:24,029 Speaker 2: spending could actually lead you to spend things that you 46 00:02:24,029 --> 00:02:24,268 Speaker 2: cannot 47 00:02:24,268 --> 00:02:24,628 Speaker 2: afford. 48 00:02:24,908 --> 00:02:27,548 Speaker 1: Even friends can sort of like give out the pressure 49 00:02:27,548 --> 00:02:29,589 Speaker 1: to you right let's say they have that. 50 00:02:30,158 --> 00:02:33,238 Speaker 1: That really nice new handbag from that luxury brand and 51 00:02:33,238 --> 00:02:35,389 Speaker 1: you feel like you really want it, you can't help 52 00:02:35,389 --> 00:02:37,919 Speaker 1: but compare yourself to them, right? Like some people might 53 00:02:37,919 --> 00:02:38,078 Speaker 1: feel 54 00:02:38,078 --> 00:02:42,238 Speaker 2: that. It's not only just like items but also lifestyle. 55 00:02:42,399 --> 00:02:45,878 Speaker 2: It can even be sports, for example. Everyone is, let's 56 00:02:45,878 --> 00:02:48,708 Speaker 2: say we take a new sport, for example, like golf. 57 00:02:49,199 --> 00:02:51,567 Speaker 2: So everyone's playing golf and golf is actually quite an 58 00:02:51,568 --> 00:02:55,358 Speaker 2: expensive sport. So if let's say your friends are playing 59 00:02:55,358 --> 00:02:57,958 Speaker 2: golf every weekend, you will also want to pick up 60 00:02:57,958 --> 00:02:58,919 Speaker 2: golf and 61 00:02:58,919 --> 00:02:59,479 Speaker 1: you have 62 00:02:59,721 --> 00:03:02,742 Speaker 1: idea of just how expensive golf can be just for 63 00:03:02,742 --> 00:03:03,382 Speaker 1: reference sake. 64 00:03:03,641 --> 00:03:05,802 Speaker 2: I'm not very, not very sure, but I know that 65 00:03:05,802 --> 00:03:08,141 Speaker 2: golf club, like one whole club can actually cost a 66 00:03:08,141 --> 00:03:11,971 Speaker 2: few thousands and you cannot just simply just jump into 67 00:03:11,971 --> 00:03:15,201 Speaker 2: the driving range and simply hit. You have to actually 68 00:03:15,201 --> 00:03:17,522 Speaker 2: um know the techniques, so you either get like a 69 00:03:17,522 --> 00:03:20,761 Speaker 2: personal trainer you how to play golf, OK, so that 70 00:03:20,761 --> 00:03:23,641 Speaker 2: um your friends don't laugh at you because everyone is 71 00:03:23,641 --> 00:03:25,992 Speaker 2: playing golf and you don't want to look like the newbie. 72 00:03:26,242 --> 00:03:28,951 Speaker 2: So you actually like behind the scenes you you. 73 00:03:29,524 --> 00:03:32,085 Speaker 2: take like personal classes to learn how to play golf 74 00:03:32,085 --> 00:03:36,164 Speaker 2: and then the latest golf clubs. You want to go 75 00:03:36,164 --> 00:03:40,365 Speaker 2: to the nicer driving range, so that can actually cause 76 00:03:40,365 --> 00:03:41,524 Speaker 2: more spending. 77 00:03:42,205 --> 00:03:46,714 Speaker 1: Right, that's spending, but there's also formal investing. Can you, 78 00:03:46,764 --> 00:03:48,005 Speaker 1: you know, expand a bit on that? 79 00:03:48,074 --> 00:03:52,085 Speaker 2: Yeah, is all about fear of missing out in terms 80 00:03:52,085 --> 00:03:58,445 Speaker 2: of the latest investments. It's always the exciting and speculative investment. 81 00:03:58,949 --> 00:04:03,429 Speaker 2: That attracts people. Uh, the thing about formal investing, right, 82 00:04:03,518 --> 00:04:07,509 Speaker 2: is some, it's always a very fancy or very nice 83 00:04:07,509 --> 00:04:11,068 Speaker 2: news that just captures you and everyone's doing the same thing. 84 00:04:11,458 --> 00:04:13,878 Speaker 2: And you want to join in, you want to actually 85 00:04:13,878 --> 00:04:17,358 Speaker 2: jump on the bandwagon and also get that same success, 86 00:04:17,438 --> 00:04:20,199 Speaker 2: that same gain that they have. So your friends may 87 00:04:20,199 --> 00:04:22,957 Speaker 2: be flaunting like, hey, I gain like X amount in 88 00:04:22,957 --> 00:04:26,159 Speaker 2: only less than a few days or few weeks because 89 00:04:26,159 --> 00:04:29,518 Speaker 2: I'm investing in this particular item. So you also feel that, hey, 90 00:04:29,638 --> 00:04:31,838 Speaker 2: I'm feel, I don't want to miss out this opportunity. 91 00:04:31,917 --> 00:04:32,798 Speaker 2: I want to do the same thing. 92 00:04:32,909 --> 00:04:35,098 Speaker 2: Or you feel like all your friends are doing the 93 00:04:35,099 --> 00:04:37,248 Speaker 2: same thing, I should do the same thing as well. 94 00:04:37,457 --> 00:04:37,818 Speaker 1: Would you 95 00:04:37,818 --> 00:04:41,658 Speaker 1: say that, you know, when NFTs that's non-fungible tokens, when 96 00:04:41,659 --> 00:04:43,607 Speaker 1: it first blew up in Malaysia a couple of years ago, 97 00:04:43,779 --> 00:04:46,918 Speaker 1: would you say that can be seen as an example 98 00:04:46,917 --> 00:04:49,017 Speaker 1: of FOMO inaction? Oh, it is 99 00:04:49,017 --> 00:04:54,198 Speaker 2: a clear example, definitely very clear of investing. 100 00:04:54,868 --> 00:04:57,508 Speaker 2: Because everyone is just saying that, oh, I make so 101 00:04:57,508 --> 00:05:01,388 Speaker 2: much money from this. So you would want to feel 102 00:05:01,388 --> 00:05:04,577 Speaker 2: like I'm missing an opportunity, I should do the same thing. 103 00:05:04,827 --> 00:05:07,749 Speaker 2: But if you actually find yourself in that situation, you're 104 00:05:07,748 --> 00:05:11,819 Speaker 2: actually too late, you will generally lose because the people 105 00:05:11,818 --> 00:05:13,748 Speaker 2: who started it, they are the ones that 106 00:05:13,748 --> 00:05:15,707 Speaker 1: they, they went in early, right? Yes, 107 00:05:15,988 --> 00:05:19,308 Speaker 2: the the the trend starters are the ones that create this. 108 00:05:19,787 --> 00:05:22,508 Speaker 2: create a hype and media picks up on it and 109 00:05:22,508 --> 00:05:26,628 Speaker 2: then they they censor they they actually like um emphasize 110 00:05:26,628 --> 00:05:31,417 Speaker 2: this excitement of, of investing in this particular item. But 111 00:05:31,417 --> 00:05:33,267 Speaker 1: by that point it's too late, right, because you're going 112 00:05:33,267 --> 00:05:35,349 Speaker 1: in on a high and after that you're selling on 113 00:05:35,349 --> 00:05:35,418 Speaker 1: a 114 00:05:35,417 --> 00:05:35,628 Speaker 1: low. 115 00:05:35,748 --> 00:05:37,659 Speaker 2: If you are the majority, you lose. If you are 116 00:05:37,659 --> 00:05:40,917 Speaker 2: the starter, maybe you gain, you gain from the majority. 117 00:05:41,428 --> 00:05:43,659 Speaker 2: So there will always be winners and losers. 118 00:05:43,667 --> 00:05:44,068 Speaker 1: For sure. 119 00:05:44,599 --> 00:05:49,058 Speaker 1: And um how does FOO typically manifest in people's behaviors, right, 120 00:05:49,409 --> 00:05:52,698 Speaker 1: financially speaking, um what red flags should we be looking 121 00:05:52,698 --> 00:05:53,178 Speaker 1: out for? 122 00:05:54,017 --> 00:05:57,248 Speaker 2: Huh, the red flag, I would say in terms of 123 00:05:57,248 --> 00:06:02,649 Speaker 2: formal investing is the, the red flag will be how 124 00:06:02,649 --> 00:06:04,938 Speaker 2: much they're flaunting their gains. 125 00:06:05,068 --> 00:06:06,128 Speaker 1: Oh, OK. Yeah, 126 00:06:06,298 --> 00:06:10,878 Speaker 2: all their success stories with minimum effort. 127 00:06:11,368 --> 00:06:12,448 Speaker 1: Do you have an example of that? 128 00:06:12,607 --> 00:06:12,808 Speaker 2: For 129 00:06:12,808 --> 00:06:14,418 Speaker 2: example, um. 130 00:06:14,988 --> 00:06:17,957 Speaker 2: When you talk about foreign investing, right, the, the meme 131 00:06:17,957 --> 00:06:20,398 Speaker 2: that pops up in my head is like 3 oran 132 00:06:20,399 --> 00:06:23,827 Speaker 2: say that, hey, I bought my crypto, where's my Lamborghini. 133 00:06:24,969 --> 00:06:26,568 Speaker 1: Right, right, I think I might have seen the same 134 00:06:26,568 --> 00:06:27,698 Speaker 1: thing on Wall Street bets, you 135 00:06:27,698 --> 00:06:27,808 Speaker 1: know. 136 00:06:27,977 --> 00:06:32,378 Speaker 2: So, where's my Lamborghini today? So, um, the, the red 137 00:06:32,378 --> 00:06:35,308 Speaker 2: flag is that they flaunt all this success, like, oh, 138 00:06:35,378 --> 00:06:37,458 Speaker 2: I just bought a Lamborghini because I invest in 139 00:06:37,457 --> 00:06:39,619 Speaker 1: crypto and they're the ones who are feeling the FOMO. 140 00:06:39,938 --> 00:06:42,158 Speaker 2: Yes, if you feel that way, you are. 141 00:06:42,357 --> 00:06:44,767 Speaker 2: Trapped in the former, you, you realize that, hey, I'm 142 00:06:44,767 --> 00:06:46,688 Speaker 2: feeling this way. I want to do the same thing 143 00:06:46,688 --> 00:06:51,368 Speaker 2: because my friend gained a very um luxurious item. My 144 00:06:51,368 --> 00:06:54,707 Speaker 2: friend actually managed to buy a Lamborghini because he did X, 145 00:06:54,928 --> 00:06:57,798 Speaker 2: he did Y. So that is actually a big red flag. 146 00:06:58,207 --> 00:07:02,378 Speaker 2: What about then in terms of spending, um. 147 00:07:03,248 --> 00:07:08,688 Speaker 2: Actually, formal spending is not entirely bad. It's not entirely 148 00:07:08,688 --> 00:07:13,518 Speaker 2: bad because um as long as you settle the essentials, 149 00:07:13,689 --> 00:07:17,319 Speaker 2: make sure you every month you settle your your commitments, 150 00:07:17,488 --> 00:07:21,167 Speaker 2: you really put aside for your future, put aside for retirement. 151 00:07:21,569 --> 00:07:25,008 Speaker 2: Uh, for your risk management, everything, then it's actually OK 152 00:07:25,008 --> 00:07:25,328 Speaker 2: to spend. 153 00:07:25,448 --> 00:07:28,007 Speaker 1: You have a little bit of that discretionary spending as 154 00:07:28,008 --> 00:07:30,608 Speaker 1: long as you're doing it within your means, right? It's 155 00:07:30,607 --> 00:07:34,689 Speaker 1: only when um things get extreme, but but what is that? 156 00:07:34,809 --> 00:07:35,849 Speaker 1: What is that sign? 157 00:07:36,399 --> 00:07:37,578 Speaker 1: That we're looking for. 158 00:07:38,029 --> 00:07:42,249 Speaker 2: If you are taking loans to do it, if you 159 00:07:42,249 --> 00:07:46,708 Speaker 2: are taking all these installments to fund this lifestyle and 160 00:07:46,708 --> 00:07:49,869 Speaker 2: to to spend money you don't have, that is a 161 00:07:49,869 --> 00:07:50,228 Speaker 2: big red 162 00:07:50,227 --> 00:07:50,507 Speaker 2: flag. 163 00:07:50,667 --> 00:07:56,238 Speaker 1: BNPL included, right? Just from your observations, are there particular demographics, right, 164 00:07:56,349 --> 00:07:58,708 Speaker 1: let's say young professionals or retirees? 165 00:07:59,689 --> 00:08:04,258 Speaker 1: Who among us are are more vulnerable to financial FOMO. 166 00:08:04,488 --> 00:08:08,929 Speaker 2: It affects everybody, but who's most vulnerable, I would say 167 00:08:08,929 --> 00:08:14,929 Speaker 2: the less financially literate. Yeah, because um they, because um 168 00:08:14,929 --> 00:08:18,038 Speaker 2: they don't know like what is good, what is bad, 169 00:08:18,349 --> 00:08:21,969 Speaker 2: so they would just naturally follow their friends and if 170 00:08:21,969 --> 00:08:24,839 Speaker 2: their friends are doing something wrong, they wouldn't know. 171 00:08:25,249 --> 00:08:28,189 Speaker 2: So it could also be a simple thing like Kutu. 172 00:08:28,518 --> 00:08:29,849 Speaker 2: Kutu is actually like, you know, 173 00:08:31,529 --> 00:08:33,248 Speaker 1: collecting everyone's just a fun thing, 174 00:08:33,288 --> 00:08:37,369 Speaker 2: yeah. And is it good or bad? I wouldn't say 175 00:08:37,369 --> 00:08:37,727 Speaker 2: it's good. 176 00:08:37,839 --> 00:08:38,019 Speaker 1: It's 177 00:08:38,019 --> 00:08:38,209 Speaker 2: hard to 178 00:08:38,208 --> 00:08:40,088 Speaker 1: say, isn't it specifically. Yeah, 179 00:08:40,218 --> 00:08:42,288 Speaker 2: it's hard to say that it's good because like the 180 00:08:42,288 --> 00:08:44,208 Speaker 2: money that you put aside, you're gonna, you only get 181 00:08:44,208 --> 00:08:46,968 Speaker 2: it at the end of the year, for example, or 182 00:08:46,968 --> 00:08:49,838 Speaker 2: end of the month, and you might use it to spend. 183 00:08:50,088 --> 00:08:51,727 Speaker 2: So it's like then what difference does it make? 184 00:08:54,019 --> 00:08:57,019 Speaker 1: Because the money is not being used to generate more money. 185 00:08:57,218 --> 00:08:59,218 Speaker 1: It's just saving up money to spend. Yeah, 186 00:08:59,458 --> 00:09:01,939 Speaker 2: saving up to. So what difference does it make if 187 00:09:01,939 --> 00:09:04,848 Speaker 2: you actually engage yourself in this kind of activity? 188 00:09:05,338 --> 00:09:05,578 Speaker 1: I've 189 00:09:05,578 --> 00:09:08,618 Speaker 1: been speaking to Kimberly Law, a licensed financial planner and 190 00:09:08,619 --> 00:09:12,319 Speaker 1: co-founder of UNO Advisors. Up next, we'll be continuing our 191 00:09:12,319 --> 00:09:18,379 Speaker 1: conversation on financial FOMO, BFM 89.9. Ring it and cents 192 00:09:18,379 --> 00:09:21,809 Speaker 1: on BFM 89.9, the business station. 193 00:09:22,699 --> 00:09:26,939 Speaker 1: BFM 89.9. Welcome back to Ringer and Sense. Kimberly Law, 194 00:09:27,078 --> 00:09:30,458 Speaker 1: licensed financial planner, and I will be talking about financial 195 00:09:30,458 --> 00:09:33,398 Speaker 1: FOMO and how to be more disciplined with your wallet, 196 00:09:33,658 --> 00:09:37,897 Speaker 1: going down the road, right, you know, with FOO spending 197 00:09:37,898 --> 00:09:42,179 Speaker 1: or formal investing. Why is FOMO then so dangerous? What 198 00:09:42,179 --> 00:09:45,737 Speaker 1: consequences uh do people see when they're like really deep 199 00:09:45,737 --> 00:09:46,218 Speaker 1: in FOMO? 200 00:09:46,838 --> 00:09:51,059 Speaker 2: Oh, it's just bad finances and they realize that everything 201 00:09:51,059 --> 00:09:54,718 Speaker 2: is just, they are very strained every month. Every month 202 00:09:54,718 --> 00:09:58,858 Speaker 2: they're just struggling, struggling. I give you an example for 203 00:09:58,857 --> 00:10:00,857 Speaker 2: like formal investing. Let's say. 204 00:10:01,699 --> 00:10:05,107 Speaker 2: Uh, you, you only realize when you invest money you 205 00:10:05,107 --> 00:10:09,559 Speaker 2: cannot afford to invest. You put aside money that is 206 00:10:09,559 --> 00:10:11,439 Speaker 2: meant to be spent in the next like less than 207 00:10:11,439 --> 00:10:15,078 Speaker 2: 12 months. For example, uh, you need to pay for 208 00:10:15,078 --> 00:10:18,238 Speaker 2: a car, you need to buy a car in 6 months' 209 00:10:18,237 --> 00:10:21,638 Speaker 2: time and you use that money, which is initially for 210 00:10:21,639 --> 00:10:23,328 Speaker 2: a down payment to invest. 211 00:10:23,718 --> 00:10:27,228 Speaker 2: And if the market goes down, then by the time 212 00:10:27,227 --> 00:10:29,107 Speaker 2: you need to buy a car, you cannot afford to 213 00:10:29,107 --> 00:10:29,509 Speaker 2: buy the car. 214 00:10:29,749 --> 00:10:31,618 Speaker 1: Because you've lost that money that you've invested, right? Yeah. 215 00:10:32,028 --> 00:10:34,028 Speaker 2: So let's say in the next 2 years you want 216 00:10:34,028 --> 00:10:37,629 Speaker 2: to buy a house and you, if you invest in 217 00:10:37,629 --> 00:10:41,569 Speaker 2: money that is very speculative into something speculative, and the 218 00:10:41,569 --> 00:10:43,708 Speaker 2: next 2 years, like when it's time to buy the house, 219 00:10:43,987 --> 00:10:46,429 Speaker 2: you cannot afford the house. Uh, another example would be 220 00:10:46,429 --> 00:10:48,429 Speaker 2: like uh the most common example is that they need 221 00:10:48,429 --> 00:10:49,527 Speaker 2: to save for a wedding. 222 00:10:49,939 --> 00:10:53,338 Speaker 2: So imagine that you invest money, you cannot afford to 223 00:10:53,338 --> 00:10:56,977 Speaker 2: invest and if the market goes up, then great, you 224 00:10:56,977 --> 00:10:58,939 Speaker 2: have a nicer wedding, but if the market goes down, 225 00:10:58,977 --> 00:11:00,858 Speaker 2: you have to tell your partner like, oh, too bad 226 00:11:00,857 --> 00:11:03,939 Speaker 2: we we need to to get a cheaper wedding venue, right? 227 00:11:03,977 --> 00:11:06,699 Speaker 2: You need to cut down. So in that sense, right, 228 00:11:07,139 --> 00:11:10,629 Speaker 2: that's why you know that you are trapped in FOO 229 00:11:10,629 --> 00:11:12,968 Speaker 2: investing because you invest money you can't afford. 230 00:11:13,379 --> 00:11:17,728 Speaker 1: So ultimately I think um both for more investing and 231 00:11:17,727 --> 00:11:18,458 Speaker 1: for more spending. 232 00:11:18,958 --> 00:11:22,199 Speaker 1: boils down to you're using money that should have been 233 00:11:22,199 --> 00:11:25,277 Speaker 1: either saved, invested or used for something more essential, 234 00:11:25,559 --> 00:11:28,638 Speaker 2: right? So the thing is, right, it's very important like 235 00:11:28,639 --> 00:11:31,509 Speaker 2: when it comes to to formal investing, you need to 236 00:11:31,509 --> 00:11:34,429 Speaker 2: know like what are your actual needs. You know what 237 00:11:34,429 --> 00:11:37,358 Speaker 2: is your need because other people's solution may not apply 238 00:11:37,357 --> 00:11:40,838 Speaker 2: to you and you need to evaluate whether that solution 239 00:11:40,838 --> 00:11:43,838 Speaker 2: will fit your needs. The needs are like more of 240 00:11:43,838 --> 00:11:45,477 Speaker 2: like risk, appetite. 241 00:11:46,179 --> 00:11:49,208 Speaker 2: your risk horizon, like how long can you actually invest? 242 00:11:49,778 --> 00:11:52,658 Speaker 1: I think we'll talk a little bit more about the 243 00:11:52,658 --> 00:11:56,298 Speaker 1: specifics on financial planning, right, when it involves FOMO, a 244 00:11:56,298 --> 00:11:56,898 Speaker 1: little bit later. 245 00:11:57,278 --> 00:11:59,929 Speaker 1: But um I want to get back to recovering from 246 00:11:59,929 --> 00:12:03,088 Speaker 1: uh financial mistakes such as, you know, if you've been 247 00:12:03,088 --> 00:12:06,538 Speaker 1: caught in like a FOO fad or something, right? I'd 248 00:12:06,538 --> 00:12:10,038 Speaker 1: like to ask whether it's riskier today to be trapped 249 00:12:10,038 --> 00:12:14,237 Speaker 1: in like FOMO to make such financial mistakes as these. 250 00:12:14,487 --> 00:12:16,889 Speaker 1: Is it, yeah, is it harder to recover in the 251 00:12:16,889 --> 00:12:17,998 Speaker 1: current climate, do you think? 252 00:12:19,119 --> 00:12:22,848 Speaker 2: It's definitely harder because back in the days there were 253 00:12:22,848 --> 00:12:25,758 Speaker 2: not many solutions. There are not many. We are not 254 00:12:25,759 --> 00:12:30,358 Speaker 2: exposed to so many of these like um activities that 255 00:12:30,357 --> 00:12:33,357 Speaker 2: can allow us to spend a lot. So right now 256 00:12:33,357 --> 00:12:37,519 Speaker 2: we are exposed to so much uh solutions. We are 257 00:12:37,519 --> 00:12:41,908 Speaker 2: literally just spoiled with options that will actually to, to 258 00:12:41,908 --> 00:12:43,417 Speaker 1: invest, to 259 00:12:43,418 --> 00:12:43,679 Speaker 2: invest. 260 00:12:43,759 --> 00:12:45,598 Speaker 1: The barrier entry is a lot lower, right? 261 00:12:45,958 --> 00:12:48,958 Speaker 1: Online shopping, just it's on your phone, investing, it's on 262 00:12:48,958 --> 00:12:49,319 Speaker 1: your phone, 263 00:12:49,679 --> 00:12:52,639 Speaker 2: on your fingertips. You can do all this and um 264 00:12:52,639 --> 00:12:56,038 Speaker 2: and also scams are getting more sophisticated. So you actually 265 00:12:56,038 --> 00:13:02,139 Speaker 2: may jump into formal investing or formal spending into scams. So, um, 266 00:13:02,598 --> 00:13:05,759 Speaker 2: things are improving, but in terms of scams, they are 267 00:13:05,759 --> 00:13:09,679 Speaker 2: getting more sophisticated, it's more believable and if you're not aware, 268 00:13:09,759 --> 00:13:10,418 Speaker 2: if you do not 269 00:13:10,798 --> 00:13:14,838 Speaker 2: Um, check out the, you do not like have do 270 00:13:14,838 --> 00:13:17,069 Speaker 2: your own research, I suppose, yeah not like see the 271 00:13:17,069 --> 00:13:19,468 Speaker 2: red flags, then you actually fall into it. 272 00:13:19,879 --> 00:13:22,118 Speaker 1: I think a good sort of rule of thumb to 273 00:13:22,119 --> 00:13:24,199 Speaker 1: think about is if it sounds too good. 274 00:13:24,769 --> 00:13:26,917 Speaker 1: Then it's probably too good to be true, right? There's 275 00:13:26,918 --> 00:13:29,759 Speaker 1: no free lunch to be had anywhere in the world 276 00:13:29,759 --> 00:13:30,227 Speaker 1: right now. 277 00:13:30,398 --> 00:13:30,639 Speaker 2: There are a 278 00:13:30,639 --> 00:13:33,718 Speaker 2: lot of indicators like if the reward is so big, 279 00:13:33,838 --> 00:13:36,519 Speaker 2: I'm here to boost your income. So that is a 280 00:13:36,519 --> 00:13:39,798 Speaker 2: big reflect. The message is very interesting. Their message is 281 00:13:39,798 --> 00:13:43,769 Speaker 2: all about giving you an absolute like an absolute number return. 282 00:13:43,958 --> 00:13:47,737 Speaker 2: For example, you invest 300 ringgit and you get 600 283 00:13:47,737 --> 00:13:50,718 Speaker 2: ringgit in 3 hours' time. Can you imagine? 284 00:13:50,798 --> 00:13:52,439 Speaker 1: That's not possible, is it now? 285 00:13:52,918 --> 00:13:54,218 Speaker 2: But people still fall for it. 286 00:13:54,418 --> 00:13:54,828 Speaker 1: Right? 287 00:13:55,069 --> 00:13:56,259 Speaker 2: People still, um, 288 00:13:56,429 --> 00:13:56,828 Speaker 1: we 289 00:13:56,828 --> 00:13:58,908 Speaker 1: do see that every day in news, don't we? 290 00:13:58,918 --> 00:14:00,958 Speaker 2: Yeah. So how it works is that you get added 291 00:14:00,958 --> 00:14:03,869 Speaker 2: into a group chat and people are constantly texting and 292 00:14:03,869 --> 00:14:05,629 Speaker 2: say like, hey, I got my gains, you know, thank 293 00:14:05,629 --> 00:14:08,668 Speaker 2: you for my gains, and that will actually get people 294 00:14:08,668 --> 00:14:11,848 Speaker 2: to feel like, hey, I'm actually missing out a good opportunity. Yeah, 295 00:14:11,869 --> 00:14:13,028 Speaker 1: if everyone else is gaining, 296 00:14:13,107 --> 00:14:15,108 Speaker 2: right? Everyone else is gaining, but 297 00:14:15,857 --> 00:14:16,828 Speaker 2: Are they real people? 298 00:14:16,908 --> 00:14:17,429 Speaker 1: Are they all 299 00:14:17,429 --> 00:14:18,129 Speaker 2: like 300 00:14:18,129 --> 00:14:21,548 Speaker 1: bots or insiders, you know, working for the scammer? Yeah, 301 00:14:21,869 --> 00:14:26,028 Speaker 2: we wouldn't know because like this messages creates that fear 302 00:14:26,028 --> 00:14:29,538 Speaker 2: of missing out of this like really good opportunity that 303 00:14:29,538 --> 00:14:32,658 Speaker 2: the person invested yesterday and got his written today. 304 00:14:33,028 --> 00:14:35,908 Speaker 1: So we've talked about these mistakes, these holes that we 305 00:14:35,908 --> 00:14:36,988 Speaker 1: can fall into. 306 00:14:37,838 --> 00:14:40,158 Speaker 1: And I think a lot of people realized too late 307 00:14:40,158 --> 00:14:44,648 Speaker 1: that FOMO has led them to um make bad financial decisions. 308 00:14:45,569 --> 00:14:48,238 Speaker 1: How should someone, you know, get back on the right 309 00:14:48,238 --> 00:14:52,119 Speaker 1: track if they feel like they're trapped by these mistakes? 310 00:14:52,889 --> 00:14:55,728 Speaker 2: In terms of, uh, I start with a simpler one 311 00:14:55,728 --> 00:14:57,287 Speaker 2: which is FOMO spending. 312 00:14:57,929 --> 00:15:01,168 Speaker 2: If, um, to, to recover from that, make sure you 313 00:15:01,168 --> 00:15:06,488 Speaker 2: automate your your deductions. Make sure you have auto deductions 314 00:15:06,488 --> 00:15:08,769 Speaker 2: to deduct all your essentials 315 00:15:08,769 --> 00:15:12,238 Speaker 1: for your commitments, insurance, mortgage, car payments, everything, right? Yeah. 316 00:15:13,798 --> 00:15:16,559 Speaker 2: Make sure everything is auto deducted and then whatever balance 317 00:15:16,559 --> 00:15:19,119 Speaker 2: you can spend, you can spend on anything you want 318 00:15:19,119 --> 00:15:22,278 Speaker 2: without worrying or you can have like a separate fund 319 00:15:22,278 --> 00:15:24,999 Speaker 2: to spend on anything without guilt. That's 320 00:15:24,999 --> 00:15:28,199 Speaker 1: just um specifically for discretionary lah, right? 321 00:15:28,759 --> 00:15:32,598 Speaker 2: In terms of formal investment, right? Yeah, um, what you 322 00:15:32,598 --> 00:15:34,249 Speaker 2: need to do is that you need to know what 323 00:15:34,249 --> 00:15:36,718 Speaker 2: are your needs. You need to know like what are 324 00:15:36,718 --> 00:15:40,037 Speaker 2: your investment objectives and you need to see like, do 325 00:15:40,038 --> 00:15:42,439 Speaker 2: you need the money in the next 12 months? Do 326 00:15:42,439 --> 00:15:45,639 Speaker 2: you need to, are you able to to handle or 327 00:15:45,639 --> 00:15:47,798 Speaker 2: tolerate the market fluctuation? 328 00:15:48,088 --> 00:15:51,908 Speaker 2: Imagine if like your investment is great. Can you sleep 329 00:15:52,079 --> 00:15:56,478 Speaker 2: well at night? Are you, do you enjoy monitoring the market? 330 00:15:56,598 --> 00:15:57,139 Speaker 2: Do you? 331 00:15:57,439 --> 00:15:58,108 Speaker 1: It's a lot of effort, 332 00:15:58,199 --> 00:15:59,108 Speaker 1: really. Yeah. 333 00:15:59,199 --> 00:16:01,679 Speaker 2: Do you enjoy and do you have the time then 334 00:16:01,679 --> 00:16:04,119 Speaker 2: you need to find a solution and if the solution 335 00:16:04,119 --> 00:16:05,548 Speaker 2: fits you, then 336 00:16:05,603 --> 00:16:08,383 Speaker 2: Maybe it will be good for you, just because it 337 00:16:08,384 --> 00:16:10,454 Speaker 2: works on other people doesn't mean it works on you. 338 00:16:10,624 --> 00:16:14,504 Speaker 2: You know, you cannot force yourself to fit into something 339 00:16:14,504 --> 00:16:16,423 Speaker 2: that really does not fit you. So 340 00:16:16,423 --> 00:16:16,624 Speaker 1: you 341 00:16:16,624 --> 00:16:19,894 Speaker 1: really have to identify what you want, right, like and 342 00:16:19,934 --> 00:16:21,783 Speaker 1: and and a lot of factors that you mentioned earlier 343 00:16:21,783 --> 00:16:25,782 Speaker 1: like your risk appetite and what and sort of like 344 00:16:25,783 --> 00:16:27,983 Speaker 1: the time frame that you're looking at, right, for the investments. 345 00:16:28,538 --> 00:16:30,798 Speaker 1: Um, I do have a question though, um, what kind 346 00:16:30,798 --> 00:16:34,358 Speaker 1: of ratio would you have for, you know, someone's like paycheck, 347 00:16:34,408 --> 00:16:37,278 Speaker 1: for example, like, OK, how many percent goes to the savings, 348 00:16:37,358 --> 00:16:39,798 Speaker 1: how many percent goes to the investing or, or does 349 00:16:39,798 --> 00:16:40,518 Speaker 1: this really depend? 350 00:16:41,459 --> 00:16:46,939 Speaker 2: It depends on the person's objective, the investment objective, like 351 00:16:46,939 --> 00:16:49,008 Speaker 2: what do they want at the end of the day. 352 00:16:49,119 --> 00:16:51,889 Speaker 2: You need to know what are their goals and from 353 00:16:51,889 --> 00:16:53,858 Speaker 2: there you need to back, you have to calculate like 354 00:16:53,858 --> 00:16:56,579 Speaker 2: how much do they need to put aside. So if 355 00:16:56,579 --> 00:17:00,088 Speaker 2: there's a ratio, there's no perfect ratio. It really depends, 356 00:17:00,098 --> 00:17:03,298 Speaker 2: but if you want a perfect benchmark. 357 00:17:03,798 --> 00:17:07,848 Speaker 2: Um, I would say 50% of your income actually goes 358 00:17:08,098 --> 00:17:12,809 Speaker 2: into living expenses and the rest you put aside for mortgage, tax, 359 00:17:12,859 --> 00:17:16,699 Speaker 2: and savings. That's like a very good ratio, but it's 360 00:17:16,699 --> 00:17:19,528 Speaker 2: very hard for people to spend 50% of their income 361 00:17:19,528 --> 00:17:20,758 Speaker 2: on living expenses. 362 00:17:21,298 --> 00:17:24,859 Speaker 1: And I think um very important as well is um 363 00:17:24,859 --> 00:17:27,929 Speaker 1: when it comes to these solutions is speaking to professionals 364 00:17:28,579 --> 00:17:30,739 Speaker 1: when you need it, right, for example, like yourself. 365 00:17:31,117 --> 00:17:34,517 Speaker 1: planner or maybe a therapist because I think a big 366 00:17:34,517 --> 00:17:38,088 Speaker 1: part of FOMO is um your own mindset, right, like 367 00:17:38,088 --> 00:17:42,267 Speaker 1: um how susceptible I feel like you are to peer pressure, 368 00:17:42,757 --> 00:17:46,038 Speaker 1: to these temptations from let's say social media, um, you know, 369 00:17:46,078 --> 00:17:46,838 Speaker 1: what's your take there? 370 00:17:47,459 --> 00:17:51,699 Speaker 2: Um, well, the thing is, right, it's very important to, 371 00:17:51,819 --> 00:17:54,538 Speaker 2: to engage with like a financial planner when it comes 372 00:17:54,538 --> 00:17:57,979 Speaker 2: to your finances because the financial planner will always have 373 00:17:57,979 --> 00:18:01,329 Speaker 2: your back because for us, we represent our clients. So 374 00:18:01,538 --> 00:18:03,778 Speaker 2: if they feel anything, they feel like the fear of 375 00:18:03,778 --> 00:18:07,138 Speaker 2: missing out in spending or investing, they can always come 376 00:18:07,138 --> 00:18:09,459 Speaker 2: to us and ask like, hey, can I join on 377 00:18:09,459 --> 00:18:12,018 Speaker 2: this bandwagon? And what we do is that we evaluate 378 00:18:12,018 --> 00:18:14,118 Speaker 2: whether this is a good idea, right? Yeah, so I, 379 00:18:14,179 --> 00:18:14,798 Speaker 2: I have a 380 00:18:14,922 --> 00:18:17,272 Speaker 2: Cases where my clients will come to me like, Hey, 381 00:18:17,361 --> 00:18:19,471 Speaker 2: my friends are doing this, can I do this as well? 382 00:18:19,611 --> 00:18:22,282 Speaker 2: Then I will tell my client, send me all the details, 383 00:18:22,402 --> 00:18:25,231 Speaker 2: let me evaluate. And there are some cases I say, whoa, 384 00:18:25,632 --> 00:18:28,081 Speaker 2: don't do it because it's a scam. And there's some 385 00:18:28,081 --> 00:18:28,851 Speaker 2: cases 386 00:18:28,851 --> 00:18:29,382 Speaker 1: are legit. Yeah, 387 00:18:30,321 --> 00:18:30,961 Speaker 1: yeah, 388 00:18:31,162 --> 00:18:32,321 Speaker 2: there are some of them are like, hey, this is 389 00:18:32,321 --> 00:18:34,282 Speaker 2: a scam. And then there are some cases where I 390 00:18:34,282 --> 00:18:37,081 Speaker 2: would say like, you can do this, so you can 391 00:18:37,081 --> 00:18:39,522 Speaker 2: take an X amount from here to do it and 392 00:18:39,522 --> 00:18:42,241 Speaker 2: don't worry about the rest, you can do an X amount. 393 00:18:42,544 --> 00:18:45,664 Speaker 2: You can do it because it is legit, it does 394 00:18:45,664 --> 00:18:49,095 Speaker 2: fit your goals and it also, you know, um, it 395 00:18:49,095 --> 00:18:52,194 Speaker 2: fits your sense of belonging with your friends, you know, 396 00:18:52,225 --> 00:18:55,034 Speaker 2: you want to join the wagon. We understand because you're 397 00:18:55,034 --> 00:18:59,015 Speaker 2: all humans, we sometimes have that fear of missing out 398 00:18:59,015 --> 00:19:01,814 Speaker 2: and it's OK because you already got your things settled. 399 00:19:01,985 --> 00:19:04,304 Speaker 2: Everything is settled, you can go and play. As 400 00:19:04,304 --> 00:19:06,304 Speaker 1: long as you know your essentials, your goals are sort 401 00:19:06,304 --> 00:19:09,225 Speaker 1: of met or or or in progress on track, then 402 00:19:09,225 --> 00:19:09,745 Speaker 1: you're good. 403 00:19:10,069 --> 00:19:12,288 Speaker 2: Yeah, your homework is done, you can go play, but 404 00:19:12,288 --> 00:19:14,048 Speaker 2: your homework is not done, you better not go 405 00:19:14,048 --> 00:19:14,407 Speaker 2: play. 406 00:19:14,898 --> 00:19:17,028 Speaker 1: You know what, I never took that advice from my mom. 407 00:19:17,378 --> 00:19:19,579 Speaker 1: I think it's too late for me, but it's not 408 00:19:19,579 --> 00:19:22,439 Speaker 1: too late for you guys. Just try your best not 409 00:19:22,439 --> 00:19:26,258 Speaker 1: to fall pay to FOO. But before I let you go, Kimberly, 410 00:19:26,339 --> 00:19:30,298 Speaker 1: I have one last question for you. How important is 411 00:19:30,298 --> 00:19:34,929 Speaker 1: um financial literacy and education to curb FOMO, right? Like, 412 00:19:35,918 --> 00:19:38,579 Speaker 1: you know, what role this um this education play? 413 00:19:39,439 --> 00:19:43,638 Speaker 2: It plays it's a big, big role. It's so important 414 00:19:43,638 --> 00:19:48,288 Speaker 2: because like we are now exposed to scams and if 415 00:19:48,288 --> 00:19:52,508 Speaker 2: let's say you join a a group and everyone tells 416 00:19:52,508 --> 00:19:55,648 Speaker 2: you to invest, you might actually end up investing in 417 00:19:55,648 --> 00:19:57,888 Speaker 2: a scam and you lose all your money. So that's 418 00:19:57,888 --> 00:20:01,609 Speaker 2: very important to actually identify like what is realistic and 419 00:20:01,609 --> 00:20:02,518 Speaker 2: what is not realistic. 420 00:20:02,824 --> 00:20:05,163 Speaker 2: If it's too good to be true, it's, it could 421 00:20:05,163 --> 00:20:05,564 Speaker 2: be a scam. 422 00:20:05,724 --> 00:20:07,964 Speaker 1: Right, if you don't have that knowledge, you might not 423 00:20:07,964 --> 00:20:10,403 Speaker 1: even be able to tell what the red flags are. Yeah, 424 00:20:10,484 --> 00:20:12,724 Speaker 1: and I feel like it's very important to um start 425 00:20:12,724 --> 00:20:15,123 Speaker 1: as young as possible. That's all the time we have 426 00:20:15,123 --> 00:20:18,184 Speaker 1: for Ring and Sense. I've been speaking to Kimberly Law, 427 00:20:18,484 --> 00:20:22,523 Speaker 1: a licensed financial planner and co-founder of Uno Advisors. Join 428 00:20:22,523 --> 00:20:25,873 Speaker 1: us again next week for more discussions on personal finance. 429 00:20:26,739 --> 00:20:29,048 Speaker 1: We have the 100 a.m. news bulletin coming up next, 430 00:20:29,219 --> 00:20:32,729 Speaker 1: followed by Enterprise. I'm Jake Lim from the Morning Run, 431 00:20:33,138 --> 00:20:40,179 Speaker 1: BFM 89.9. Ring it and senses on BFM 89.9, the 432 00:20:40,179 --> 00:20:41,069 Speaker 1: business station.