Love this thread!!

Thanks for all the advice given.

Thanks Wong….you really superb for this thread. Need your more idea or suggestion here .
The following is my explanations for the earlier info and some questions here;

For the food, at least RM30/per day spent for eating. And we always bring my mum eat in restaurant and cost me at least RM40+ for 1 times. Which mean at least RM900 spent in food.

I assume, average RM600 spent in Hyper market for the groceries, I am the junk food "terminator", always looking for some special and expensive junk food to try. Haha. Actually this groceries normally is for 3 pax only. We also include those installment within this category. Example, facial treatment installment, travel package installment etc.

About the else category, this is some unexpected expenses for every months. Like travel to somewhere, balik kampong etc.

Question:
1. Base from my above explanations, how do I increase the % of the investment? We are travel lover, we will think travel oversea at least 1 time per year is the min target for both of us. How do balancing our life with our financial management?
2. We can tap our EPF A/C 2 into our Loan Account or use it as REITs investment? We are not aware of this, please share more. But as mentioned earlier, we already withdraw our EPF money to invest our 2nd house. Possible to withdraw again?
3. Will u suggest us to save the back up savings to FD account or put into our housing mortgage? Currently we are put into the housing mortgage, as saving and able to reduce the interest. But 20k is not much .
4. My investment house currently increase 50k , got value but hard to predict the market in next 2 years. We are plan either move in to the 2nd house and sell the current house. Current house with value and market. At least earn 100k if we sell it. Any suggestion here?
5. UT still in lose level my relative as our agent are helping monitor for us. We are interested with the share market but we have no knowledge and we always think we have no extra $$ to play. Can you please advice for this?

Thank you!

Just some personal observations/sharing yar, not "right" per se as each of us have our own priorities/wants.
a. >=$30/day spent on eating out?
+Assuming 1 person working day only, er.. i think U can save quite a bit here if U & Missus were to eat 1 or 2 home prepared food / day
+simple eg.
1 cup of coffee made at home = <$1.00 VS 1 cup of StarBucks $8 to $10

b. Eating out with mum @ restaurant >=$40/week OR per day?
+Understandable per week. Per day.. when U are millionaire investment asset holder ok ar.. now.. a bit stretching it lor

c. $ for "groceries" include junk food, facials INSTALLMENTS, travel package INSTALLMENTS, etc
+I'd suggest U break down and separate proper groceries into one segment, and the rest are "Fun / Feel Good spending"
Thus, U know what are your NECESSITIES and FUN SPENDING - most people will be surprised at the amount splashed on Feel Good Vs Necessities
Hint hint - junk food, that new golf set, changgih branded jeans & bags arent "Necessities"
+I noticed "installments" here.
IMHO, installments may mean "i havent saved up for that yet BUT I NEED IT NOW / I DESERVE IT", which usually follows with "oh crap.. where's all my $ going to". However, U may be one of few that saved up first, then took the installment plan coz it's the same cost, for your "feel good" stuff

Bottom line: Save mercilessly on items that are not your priority.
Since U prioritized travelling - then cut out expensive junk food, eating out all the time during weekdays (er.. i ass-U-me k, coz >=$30/day is a bit crazy for me per meal for a normal weekday), etc.

Personally, i prioritize health/security & education/learning, thus i KILLED on fine dining unless really special occasion (like 1 a year) + severely limited stuff like cinema, liquor, junk food, TV, etc. + nearly killed off branded clothes/bags spending.
See how cutting certain things actually helps my priorities other than redistribution of $?

A simple way is just to allocated % of yr monthly net income (EXCLUDING investment income) like:
10% for emergency buffer (once 3 to 12 months' average expenses buffered, channel $ to investments)
10% for feel good
10% for investments
10% self / children education/improvement
10% for accumulating future spending goals (eg. holiday, travel, expensive/specialized junk food splurge, home theater, PS3, new property downpayment, new car downpayment, etc. )
50% for necessities

OR simpler yet
10% for emergency buffer + 10% for investments, the rest spend, needn't track the rest
or 15% for emergency buffer + 15% for investments, the rest spend, needn't track the rest
and again, once emergency buffer is built, channel to investments

If U noticed, by doing so, there is a balance of "existing" VS "feel good" (now we are LIVING) VS "just in case" VS "future growth"

-----------------
Specific / Technicalities - my humble opinion / feedback
1. Base from my above explanations, how do I increase the % of the investment?
We are travel lover, we will think travel oversea at least 1 time per year is the min target for both of us. How do balancing our life with our financial management?
Prioritize and have a discipline structured money management enforced, like the above example

2. We can tap our EPF A/C 2 into our Loan Account or use it as REITs investment?
We are not aware of this, please share more. But as mentioned earlier, we already withdraw our EPF money to invest our 2nd house. Possible to withdraw again?
Yes U can tap EPF A/C2 for your mortgages - either yearly or monthly withdrawal, with differences between yearly Vs monthly, as stated in earlier feedback.

3. Will u suggest us to save the back up savings to FD account or put into our housing mortgage?
Currently we are put into the housing mortgage, as saving and able to reduce the interest. But 20k is not much .
IF you've a flexi mortgage, store at least 3 months expenses buffer $ there, not FD.
IF your mortgage isn't a flexi mortgage AND the % is competitive, dont knock down your mortgage yet as the opportunity costs and risk isnt worthwhile.


4. My investment house currently increase 50k , got value but hard to predict the market in next 2 years. We are plan either move in to the 2nd house and sell the current house. Current house with value and market. At least earn 100k if we sell it. Any suggestion here?
I'd suggest that U stay in the house that is not too big for your family OR the area/environment that U prefer.
To sell or to rent out - no idea since not enough information (like cost of purchase, rental pm, financing years & %, maintenance cost, etc.) - all these may take 2 pages to explain/get data


5. UT still in lose level my relative as our agent are helping monitor for us. We are interested with the share market but we have no knowledge and we always think we have no extra $$ to play. Can you please advice for this?
As per any investments or trades, i'd always suggest learning up on:
Asset Allocation, Value Averaging, Value Investing + specific investigation/analysis of a particular stock/property/equity fund/bond fund/REIT and having a total Big Pix plan (strategy) + entry/exit execution plans (operational).
Thus, when the conditions/triggers are right, U are prepared.
U dont want to "find out where's the fire exit" DURING a fire right?
Be prepared with the plan, reasons and triggers first - then execute with confidence.

Whew.. sorry for the long winded reply . Old folks like me membebel a lot
I hope these ideas help U formulate / crystalize your own plans rather than make U more

This post has been edited by wongmunkeong: Mar 15 2012, 02:10 PM

Just some personal opinion sharing here, no "right or wrong", merely individual choices.

If yrs mom or wife can do 1 or 2 home cook/day, the cost for a good home cook meal is arround RM15/day, further more the drink use to be FOC, not like eating in a restaurant, all drink will be chargeble eg, RM3.50 for a orange juice, 4 person will be RM14.00 +ST, A typical person will look at the pricelist for the food, while not realise the small item like drinks. Let assume not all call orange juice, a typical bill for drink for a night out will be around RM10.00. One month can easily save you RM300.00.

A good pratice will be doing own cook on weekday, and have a family gathering like once a week at restaurent, thus the cost will be RM40X4, around RM200/month.

On travel to somewhere else cost/expenses., nowayday with AA, you can get pretty cheap airfare provide you plan ahead 6-9 months, and try not doing on ad-hoc basic, the expenses will make yours wallet light alot especially travel with family member.

This post has been edited by youngman28: Mar 15 2012, 03:34 PM

husband income = 3800
wife income = 4250
total = 8050

husband expenses = 3730
wife expenses = 3950
total = 7680

cash on hand/emergency fund = 20,000. this means that ur fund can last for 3 months only. recommended fund is 6 months during this unforeseen economy nowadays. it should be ok if u have family support.

there is nothing much u can do to reduce the expenses. EPF money u can forget about it as u cannot do anything unless u are qualified to draw out. any property under mortgage service is considered a liability.

any investment will not help much unless u are real confident in certain stocks to perform well.

Car loan is too excessive resulted little saving.
Car is a liability, get a smaller car, RM1000 monthly payment is too much.

Saving is too little, resulted little opportunity for investment that can provide extra passive income.
The second house is crucial, if it is an investment that can yield passive income and cover the loan, then it is still debatable.

With another family adding, this will put the budget even into more stress.
So need to reduce the expenses side.

A household income of RM7000 should have more comfortable zone and more saving. Cars are the main culprit.

This post has been edited by cherroy: Mar 15 2012, 05:51 PM

1. First of all avoid all kinds of installment, like your facial and travel installment, all these leads to unnecessary spending. Budget and save up cash allocated for entertainment accordingly. Set up a budget and perhaps target to save at least 30% of your salary? A lot of people are doing about 60%-70% per month. You have spend a lot of money in cars, which is a depreciating item. Anyway you are wrong to calculate car as asset, it is a liability.

2. Travel lover does not mean that you have to spend a lot of money. Learn to travel within budget and lower your expectations, and utilize especially budget hotels and budget airlines. Backpacking is a good way to travel and it much better than those organized tour. You can save more than 50% this way and see more sights and have complete freedom. A tour to Australia for 2 person can cost only about RM 5k vs 10+K via travel agency.

3. Prepare 6 months expenses in FD or other liquid investment in case there is an emergency, if you put in housing mortgage (flexi) make sure it can be easily taken out.

4. For your extra house rather than flip for a quick gain, keep it and get rental income. Passive income really helps you in the long run. For the UT, buy within your expectations and risk tolerance value, anyway the money is for long term so no need to concern with some losses.

5. Have you given think about retirement, children's education etc? If you think long and hard, and calculate it the cost is going to scare you, so start preparing now.

This post has been edited by gark: Mar 15 2012, 07:47 PM

I'm bad in managing my finances in my early 20's as I got blacklisted for credit card usage when I'm 24. Soon after that I enroll myself with AKPK. I'm now 28 and single and wanted to start a family next year. Now I'm trying to save money but most of the time I bought stupid stuff which is not needed (alot of shoes, football kits, etc.). End of the month I left with only RM100-200 to save and some months there is none. I don't want to be in a family that is full of debt that will break the marriage. I don't want to be that guy. My target by end of this year I must have at least RM15K in savings. Most of my savings I pumped it into long term investment. I really needed an advice/opinion/recommendations. Below is my monthly fixed deduction.


Income:

RM2500 average after EPF deduction.

Expenses:

AKPK : RM200
Astro : RM141
Insurance : RM150
Utilities : RM70
Food : RM700 (I don't know how to cook. Mostly eating out.)
Transport : RM50 (I only have a motorcycle which already fully paid.)
Entertainment : RM300
Phone Bill : RM80

Assets/Savings:

- No cash savings as I'm afraid I will spend it.
- Currently RM4000 saved under bank islam investment account slip. RM1000 for 3 month duration and RM3000 for 12 month duration.
- Unit Trust deduction every 3 months from EPF.

IMHO, U need to replace your spendthrift habit first. Sorry to say, seems like U did not learn much from yr AKPK episode in yr early 20's.
Bro - U must find a bigger reason / burning desire, that makes U want to prioritize savings & investing, else U will ALWAYS be a spendthrift. Just like alcohol, cigarettes & gambling, spending recklessly is an addiction. Been there b4 - speaking from experience. Luckily for me, those days not much $, no credit cards AND no personal loans

Once U replace yr spendthrift habit, then only talk about saving and investing. Investing BUTA is as good as gambling, thus...
BTW, learn how to cook and make sandwiches - $700 on food for 1 person?!

This post has been edited by wongmunkeong: Mar 15 2012, 10:01 PM

What wongmunkeong said is true. You need to learn the lesson from your AKPK days. fastest way to cut down expenses is Astro and cut food to RM500 a month(i think this is not too much of a cut), immediately you free up Rm341. You can think of starting a family with your current situation i really salute you. Me and my bf till now still not dare to get married because we still not feel financial stable given that we've worked hard towards our goal in the past 3years

Thanks wongmunkeong & zenwell for waking me up. I felt so stupid when I think back what I've done before and my current situation. I think I will cut half of my entertainment expenses and limit my spending on food. As of my Astro subscription, I will limit the channels that I subscribe. I will update both of you maybe by end of this year so that I thank both of you again if I succeed.

better if you cut off astro temporary. Nowadays i watch online free download drama also tak sempat. IMHO, for young ppl, less TV = more $$ + better future. Spend less time now on TV so that you can watch more later in life

Bro, accepting responsibility for our own mistakes/mis-steps is the 1st step to awakening (financially, physically, spiritually)
Dont worry - some of us have done as bad or worse (i know i have - owed $19K when net income pm was just $3K) in our younger and dumber days

Zenwell shares my experience with "Less TV" = "more income" + i'd add, knowledge & health. The time spent on the idiot box can be used to learn AND practice
+financial management & investments
+learning work skills, working harder/smarter (ie. do a great job, do more than your Job Description, see how Company can be helped)
+starting a side biz
+exercising
+boning up on other knowledge

Dont worry, i dont think it'll take U till the end of the year to sort things out if U focus AND have found a burning desire/passion to reduce cost & increase income/investment assets. U'll see some effects in 3 to 6 months if U are focused - ie. sit down, detail out your expenses, categorize them as necessity (without them die) and "fun". Then U'd know which to chop down mercilessly (note - dont kill all "fun" stuff yar, but IMHO, it shd be just about 10%+/- of your net salary). Take a peek at my earlier posting (i think 3 postings on top of my reply here) - there's some simple framework of money allocation/management which may help.

Gambate!

This post has been edited by wongmunkeong: Mar 16 2012, 08:03 AM

Easy !

Step 1 = CUT your ASTRO
Step 2 = STOP Eating Out !
Step 3 = Reduce Entertainment

Maintain these for 6 months and you will see results !

hi guys, I graduated from secondary school, and will be entering university in either july or september.

and now I'm working part-time,with income about RM 700-900.

after minus all the expenses, I can save about RM500++ per month.
I know the importance of investing earlier, and I've seen people saying that fixed deposit is not worth.

should I start investing by investing in funds??

thanks

U are sure gonna do well in future with this mindset

I started later than u by 2 years.
In my first few years of savings, I invested 50% of total savings in FD, and the other 50% in shares.
I graduated from University with 50k in the bank.

I think u should first invest some money in investment tools and knowledge before committing yourself further.

Hey future multi-millionaire

FD, in my humble opinion, IS WORTH IT for HOLDING idle cash or while U are building up an amount for some investment. That is, unless U have a better option, called "Flexi Mortgage" hehe.

As for investing in funds, stocks, REITs, Properties, Gold, antiquities, women (oops..):
<Copy & pasted from previous post>
As per any investments or trades, i'd always suggest learning up on:
Asset Allocation, Value Averaging, Value Investing + specific investigation/analysis/valuation of a particular stock/property/equity fund/bond fund/REIT and having a total Big Pix plan (strategy) + entry/exit execution plans (operational).
Thus, when the conditions/triggers are right, U are prepared.
U dont want to "start looking for the fire exit" DURING a fire right?
Be prepared with the plan, reasons and triggers first - then execute with confidence.

what do you mean by investment tools? can you suggest me where can I read more about investing besides http://www.investopedia.com/ and here?

thanks

ps
After you cut your ASTRO, you got more spare time
You can use this spare time to Earn extra income. then maybe can still enjoy
Eating Out and Entertainment.
You can do that if you have RM1000/- or RM2000/- extra, right?

hi wongmunkeong,

Can you explain more when you say "FD, in my humble opinion, IS WORTH IT for HOLDING idle cash or while U are building up an amount for some investment. That is, unless U have a better option, called "Flexi Mortgage" hehe." ?

Thanks.