However, for those skilled employees, the wages are still linked to experience, productivity and demand. Most of the organisations are still willing to offer attractive remuneration packages for candidates equipped with the desired skills. Thus, highly skilled and productive employees are more likely to earn more.

Employers are usually looking at providing lower salary increments while employees are expecting more. Based on the Kelly Employment Outlook and Salary Guide 2011/2012, it indicated that there’s an average of 3 - 5 percent increase in salaries across all sectors.

Nevertheless, this year I’m aiming at 17 - 18 percent adjustment of my current salary. Based on my research, noticed that knowledge-based industries such as ICT will experience a higher salary increase due to the increasing demand for talent. So, I don’t think it will bring much trouble to meet my expectation.

Supposingly, 2012 is going to be a turbulent year due to the Euro sovereign debt crisis. But then, let us all hope 2012 be another great year for better career with higher increment and greater job prospects.

Besides that, I also plan to set aside about 30% of my monthly income to go towards stocks and unit trusts investment. According to Malaysian Employers Federation in its year 2011 MEF Salary Survey, it was reported that the year-end bonuses are reducing at the average 2.13 months forecast for executives in year 2012. Therefore, it’s time for us to spend it wisely during this recession period.

You would need to have a financial plan if you have a great pool of money coming your way and you are not sure how to put it to good use. You can do this on your own or consult financial advisor for assistance.

Tips on Using Your Spare Cash

You have a few choices of investment vehicles such as stocks, gold, unit trusts or property. You can consider stocks if you are well versed with particular companies or industries. When analyzing a company stock performance, you would need to know the stocks price earning (P/E) ratio, consistency of dividend payout, net profit and etc. If you are not well versed then a safer bet would be gold and unit trusts.

However, if you’re already invested in stocks, gold or unit trusts and you do not have your own property, then you may consider using your year-end bonus as a down payment for one. If you are already own one, then consider buying a second property which will give you rental income or capital appreciation. But, always take into consideration of the property’s location and the developer’s track record.

P/E ratio is commonly used by stock traders to value a company. It reflects whether a company’s share price is overvalued or undervalued.

PE (Price per earning) = Current share price / EPS

It’s crucial for us to focus on individual stock using the market P/E ratio. It can prevent investor from being traded into a bubble situation which is the riskiest environment for an investor to indulge in.

However, there are 2 very important points to take note when using the P/E ratio as indicators to choose stocks:
i. Compare those companies within the same sector.
ii. Comparing the past year and current year performance for the selected stock to determine the stock potential.

Thus, a reduction in the personal tax rates will appeal to high income earners working in Malaysia and it could attract more foreign talents to work as it will allow them to retain higher level of disposable income.

Meanwhile, a further increase in personal relief will also help in increasing the disposable income of the citizen. One of the reliefs that could be increased is through the contribution made on the EPF or life insurance premium. Currently, the maximum relief available is RM6,000 per annual with an additional relief of RM1,000 given on insurance premiums paid on annuity scheme.

In addition, the cost of maintaining a child has also been increased. Based on the latest revision, the current child relief is RM1,000 per annual for a child who is not married and below 18 years old. And, a maximum of RM4,000 is granted for a child who is 18 years old and above and is pursuing his higher level of education.

In my opinion, I truly believe that the taxpayers will also welcome to the current move. This would encourage them especially sandwich generation to remain the workforce and contribute to their household income which in turn to sustain the talent pool in the marketplace.

However, giving out a bonus is very subjective. Therefore, it would be inevitable that employees are given a standard bonus. This is because each individual has different perceptive; your manager may rate their employees from their own sets of capabilities instead of their subordinates.

From management perspective, if the company made a profit in the last year and they’d like to recognize their potential employees by rewarding them with a bonus. However, we also know that not every employer will give 100% and sometimes it might cause employees dissatisfaction.

From employee perspective, it’s not fair that every employee gets the same amount while some employees can perform better than others. Therefore, the bonus should be based on how well each employee performs. This is because how the bonus is distributed to the employees can impact their next performance.

My Advice for Those Employees Who Are Not Well Performed

If you’re still younger or new beginners you should try to position yourself for learning, experience and gaining potential rather than the earning itself. This is because learning the right way and practicing how to do things right is much more important at the start of the career. So, if you are not receiving any or less than expected bonus then you can try to improve it based on the results of behavior throughout the year.

Our lifespan is now longer than 75 years. This means that a retiree aged 55 has to support himself for another 20 years or more without an income. The average Malaysian is expected to have RM120,000 in his EPF. That will give him RM500 per month or RM16.67 per day, during his retirement.

However, with the increasing inflation rate it will erode the consumer purchasing power. Meanwhile, the medical and healthcare expenses will also eat up our savings.

For me, 55 is too young for some people to hang up their boots. When my grandfather retired at 55, he was restless and complained that he had nothing to do. So, asking a capable person to retire at the peak of his career does not make sense. With the low unemployment rate in Malaysia and plenty of available jobs that are up for grabs, I don’t think that raising the retirement age to 60 will negatively affect the younger workforce.

The 2nd group comprises middle class retirees who have some savings, investments or pensions to rely on. However, they have to be mindful of high inflation. The 3rd group of retirees is the super rich who do not have financial worries.

I feel blessed to be in the 2nd group. We cannot look into the future, so we are unable to see when our life on this beautiful earth will end and how much money we will need in the meantime to meet out daily expenses. All we can do is have a best estimate, based on our current needs.

No matter how young or old you are, start with a spreadsheet of your daily expenses to manage you cash flow. This helps you to identify your discretionary expenses. Staying disciplined and saving up for something that you have been eyeing can be fun.

My advice to young people is to save as much as they can and only indulge when they have reached their financial goals. Be disciplined and invest early. For better returns, invest your money in the stock market, unit trusts, properties or pensions funds. If you do not have time to monitor your investments then unit trusts will be your preferred choice. Value investing and dollar cost averaging would help to build your returns.

For older people, if you are not sure whether you have sufficient retirement funds, an option is to continue working. The government recent announcement to extend civil servants retirement age to 60 is a good move. In the private sector, working longer will help you to enlarge one’s retirement fund. It also helps you to stay active, which is good for the mind and body.