Disclaimer: This article provides knowledge to readers which does not provide any advices to readers. The writer and the company of this article take no legal responsibilities for any usage of these methods. The readers should consult their financial adviser first before implementing any financial decisions.

Life is full of risks. From small incidents like a bee sting to major events like a car accident, we face risks every day. No matter how careful we are, unexpected situations can still happen. The big question is: are you financially prepared for them?

Without proper risk planning, people often struggle with money after a crisis. They may have cash flow problems, rely on friends and family for help, or even face financial ruin. Even if the risk itself isn’t about money, solving the problem usually requires funds—sometimes as much as the price of a house.

Then, why do you and your business need a risk fund?

1. Personal Reason: The Rising Cost Of Living

Many people find it hard to keep up with increasing expenses. When income doesn’t grow as fast as inflation, everyday costs become a burden—especially for low-income earners. If an unexpected event stops them from working, they might have no income at all.

Having savings equal to at least half of your annual income can help you survive for a few months if a financial crisis hits. While saving money isn’t always easy, having a risk fund can prevent a tough situation from becoming a disaster.

2. Personal Reason: Medical Expenses Are Skyrocketing

Medical costs are rising faster than other living expenses. In Malaysia, the medical inflation rate is one of the highest in Southeast Asia. (Source) Whether you go to a public or private hospital, treatment can be expensive.

To make things worse, the cost of medical insurance and takaful (Islamic insurance) is also increasing. While governments are working on solutions, many people still struggle with rising insurance premiums. Having a risk fund can help cover medical costs and prevent financial stress.

3. Business Reason: Changing Business Laws

Laws change all the time and businesses must keep up. Small and medium-sized enterprises (SMEs) often struggle with new regulations, which can lead to business closures.

For employees, this means job insecurity. Businesses may downsize or shut down if they can’t afford to comply with new rules. A risk fund helps businesses stay afloat and provides financial security for employees who might lose their jobs.

4. Business Reason: Tough Business Competition

Not every business survives. In fact, 60% of new businesses don’t last beyond three years. (Source) Even with great products and strong marketing, businesses can still fail due to tough competition.

A risk fund allows businesses to adapt, develop new strategies, and cover essential expenses during challenging times. Without it, borrowing money may become difficult, making survival even harder.

5. Global Reason: Global Uncertainty

Global issues like climate change and political conflicts might seem far away, but they impact our daily lives. For example, global warming affects food production, leading to higher prices. Wars and political instability can cause shortages in raw materials, making everything more expensive.

Both businesses and individuals need risk funds to handle these unexpected challenges. Businesses must prepare for supply chain disruptions, while individuals need extra savings to deal with rising living costs.

Risk is a part of life, but financial struggles don’t have to be. Preparing a risk fund can help you handle emergencies, protect your business, and secure your future. Start building your safety net today—before the unexpected happens.

Prepare your risk now-It's NOW or NEVER!

To better prepare yourself for risk events and financial uncertainties, consider enrolling in our "Plan For Your Risk" course. These programs are designed to equip you with the tools and strategies needed to navigate risk events with confidence. Sign up today and take control of your future!

Join the course "Plan For Your Risk" and  other PLAN Series courses by Minda Sfera Sdn Bhd if you are interested in learning risk goals setting and risk fund setting. You will get the course now

• through HRD Corp Claimable Course scheme (contact us for more details)

• in Kahoot! courses

REGISTER OR CONTACT US NOW!