An economist has predicted a tough year ahead for middle-income earners and advised them to do more of their shopping online and to look into the possibility of starting their own e-businesses.
Yeah Kim Leng, a professor at Sunway University Business School, told FMT the middle class, especially those living in urban areas, should think of 2017 as a year in which to transition to the Internet economy to save and make money.
“This group cannot be spending the way they used to,” he said. “This year is a test of how good the urban middle class is at finding cheaper alternatives.”
He said only the upper middle class and the rich would be able to splurge while the average Malaysian would have to use the ringgit wisely.
Yeah, formerly chief economist for the RAM Holdings group, advised Malaysians to shop online for cheaper alternatives or money-saving offers, such as rebates and cashback returns.
This includes shopping for daily essentials. “There are several online grocery shopping services at the moment in Malaysia but they are not that cheap. It is good to look out for new services that offer cheaper alternatives.”
He also said knowledge of the Internet and e-commerce would come in handy for those wishing to supplement their incomes. He mentioned homemade meals delivery as an example, saying there was a growing demand for it.
Those with extra rooms in their homes could register with Airbnb to rent them out and those with cars could drive for Uber or GrabCar after office hours and on weekends, he added.
“The possibilities are endless. Malaysians will just have to do their market research and do things that fit their lifestyles and passions.”
Yeah said middle class Malaysians were most likely to be affected by the depreciation of the ringgit and higher fuel prices.
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The lower income group was at the moment supplemented by the BR1M cash aid, he pointed out.
Under BR1M (Bantuan 1Rakyat Malaysia), families with household monthly incomes of RM3,000 and below receive RM1,200 for the year while singles above the of age of 21 with monthly incomes of RM2,000 and below receive RM900.
Yeah said the urban middle class, being an educated group, should be capable of venturing into the digital economy after doing some research.
He said the Internet was also a source for more affordable insurance schemes. “Compare prices and look out for genuine companies online. It is a lot cheaper.”
He said middle class Malaysians would remain solvent if they managed to cut grocery and insurance bills and would have money to spare if they built e-businesses.
Due to the shrinking ringgit, he said, it was not advisable to holiday overseas or to send children abroad to study. “The upper-middle income group or the rich can afford to do that at the moment. For those who have not saved up for their children’s education overseas, it is better to look for local alternatives.
“It’s not about being stingy, but beating the situation with cheaper alternatives. This is the only way for the middle income earner to be debt free in 2017.”
Original article from http://www.freemalaysiatoday.com/category/nation/2017/01/03/how-the-middle-class-can-survive-2017/
