Sensible Ways to Use Your Year End Bonus

Most of my friends plan to invest in property when received their year-end bonus. It would be great to go for property as its potential for capital appreciation and a healthy rental yield. I have been influenced by them and planned to use my future bonuses to invest in a residential property soon.

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.