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 Personal financial management, V2

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BabySteps
post Mar 29 2012, 08:05 PM

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QUOTE(chabalang @ Mar 26 2012, 04:41 PM)
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Hi BabySteps, since no one responded (except a "potential" sales reply) after two days, I will give it a try.

i) Overall - you are doing Well. Saving 26% of your net income is certainly a good start. Why don't you slowly bump up the % savings to 30+% more consistently? (since you have some spare change after your expenditure, "forced savings" + feel good spend).
Sure will keep increasing the savings till I have gam gam enough to spend.

ii) A couple of your expenditure items are on the low side...you indicated transport expense of RM50/mthly (it is for weekend use? what about insurance/maintenance expenses?) - why I bring this up is that expenses are commonly understated in financial planning.
Transport are actually claimable so it's quite low. Then insurance vice, i've a ing card from company and a hospitalization coverage sponsored by parents.

iii) Your asset allocation is skewed towards "safety"/ comfort zone. I normally hesitate to give a recommended asset allocation because it has to be tailored to each person's personality (e.g. risk-return profile), time horizon, needs, etc. Since you have a decent amount of $$$ in your FD (above "emergency fund") , you may want to consider investing in equity unit trust/shares. BUT WAIT, please go and educate/learn more on investing before putting your hard-earned money to work. Start small so that the 'tuition fees' will be less...
Just started with the bond fund. Still in the process of reading n learning b4 I start putting more money into it.

iv) As for your plan to buy a house in 2 years' time - it depends on your forward earnings ability and mortgage rate/policy in 2 years' time. From your current position and normal trajectory forecast, you should be able to afford 300k house (assumption: 80%, 30 years loan with i/r of 4.5% p.a.)...400k will be a stretch (sorry, no calculations or spreadsheet like Mr Wong - my numbers are primitive back of envelope calculation but it should be okay). That is assuming that you have no other major commitments like CAR loan. BTW, banks are currently assessing bank loans on a net income basis (who knows what will be the loan approval conditions/policies in 2 years' time). I wanted to write more on cars and car loan - a significant financial planning/management problem in M'sia...maybe another time/day to prevent another long posting.
Currently i'm quite worried for this plan as the property price is shooting up like a rocket. Just worry that I could not get a home by 28.
*
chabalang
post Mar 29 2012, 10:49 PM

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QUOTE(BabySteps @ Mar 29 2012, 08:05 PM)
Currently i'm quite worried for this plan as the property price is shooting up like a rocket. Just worry that I could not get a home by 28.

*
Even though I am not in your age range, I can empathize with the "property/home worries" of the younger generation. While some properties in Klang Valley have "shot up" significantly since 2009, there are still quite a fair bit of affordable ones (mainly high-rise ones) - I will not elaborate more since there is an active property thread in LYN.

All I wanted to tell you is that don't worry about missing the boat (planning ahead is good but unnecessary worry will only zap your energy)... you are still young - focus on your career and increase your earning capacity.

Added on March 29, 2012, 11:05 pm
QUOTE(xander @ Mar 27 2012, 11:25 PM)
Age: 25
Net Income : RM 3600

Monthly Expenses
Rental RM420
Food n stuff RM 700

Credit Cards
currently holding 3 with some ezy payment on 2 of it.

CC1 - Insurance(RM333) and some ezy payment(RM250) 10 months more to go)
CC2 - Ezy Payment RM 400 ( 8 months more to go)
CC2 - For petrol. RM400

Debts
Done with car installment.
Currently paying back 1k to my parents for 6 months as i borrowed some money from them to purchase a property

Looking at how my badly managed finance is now, i probably only can start my saving after m settle with all my ezy payments.

any advise for someone who's really keen to improve his financial?

Thanks
*
Hi Xander, while your net income is quite good for your age, your expenditure (Ezy payment part) NEEDS some "work out"(or rather your spending habit).

1) Personally, I Hate Ezy Payment (even those with ZERO interest rate) - call me a dumb-dumb or whatever. For consumer items, I only buy when I afford it upfront (i.e. can pay with CC but have the ready $$$ to pay it off immediately in the next month)

2) You bought a property - what is the monthly payment?

3) Advice for someone who wants to improve his financial position: BUY only things that you can really afford. Keeping up with the Joneses is expensive and bad for your financial health. It takes quite a fair bit of willpower to ignore the crowd and other people's perception of you. Kindly note that I am not telling you to be stingy or live like a miser - need to balance spending and saving for the future.

This post has been edited by chabalang: Apr 1 2012, 05:32 PM
Milshah
post Apr 1 2012, 05:26 PM

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Hi All,

Just a short question, if for car loan, if you pay more than the required monthly installments, will the loan period be reduced? Are there any penalties for paying more?

Thank you in advance.

smile.gif
chabalang
post Apr 1 2012, 05:59 PM

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Hi iStevei, by the virtue that you have taken the first step to evaluate your financial health/position is already a good start to "financial freedom". I am certain if you have the determination and discipline, you CAN ACHIEVE financial freedom. I hope I am not "overwhelming" this thread (I would prefer Mr Wong to reply since he has been doing a good job, and I would rather read than write).

Your income/expenditure - you did not mention your age (assuming that you are in the twenties):
1) Some of your expenses seemed to be low (e.g. food - only RM100/mthly). Car maintenance/toiletries/gifts/etc.? I presume you are staying with your parents?
2) A big chunk of your expenditure is going to car expenses/loan and entertainment (998 out of 1458 or 68.4%) - to me, that's quite a large % for discretionary expenses. I do not like to recommend what are appropriate expenses as I am on the "thrifty side"and am trying my best not to impose my "lifestyle choice"on others.
3) Your saving rate of >30% is commendable and certainly put you on the right track.

Your financial position:
Asset/liability looks ok with me (as usual, I don't comment on personal asset allocation without knowing the person). You are right to consider putting your savings to work harder (make sure you have set aside your “rainy day” funds first)- shares or properties are two of the most common form of investments.

I will comment more on shares (or equity) since I am more familiar with it.
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This post has been edited by chabalang: Apr 1 2012, 10:18 PM
iStevei
post Apr 1 2012, 10:46 PM

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Hi chabalang,

Thanks for your input. I'm 28 years old now. And yes staying with my parents at this moment.

1) I did not include car maintenance cos work place is very near my home. In a month or two, normally i would go for biz trip hence the allowance given is more than enough to cover my car maintenance and etc.

2) Ya my car is the culprit. Trying to cut on entertainment. But nowadays everything is expensive cry.gif
400 bucks for entertainment include family dinner=100 bucks (once a month), gift/fren wedding=100 bucks, 200 bucks is for myself tongue.gif

3) I'm a saver. But certainly not an investor haha still learning though. Thanks for the link.

Plan to get a house when my car is fully paid.
But i still thinking of going SG work probably this year. Is it advisable base on my current situation?
Seem like need to pay twice more than car loan which means my budget gonna be tighter
And also ya, i plan to get a medical card as well which is about 100-150/mth sad.gif
LameAsH
post Apr 2 2012, 02:04 AM

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Hi,

I need some guidance about income tax, i sell things through the net and now im making average of 3k income per month.

May i know what documents do i need to prepare to apply for income tax? Need some input and advice, because im planning to get a house loan in very soon future.

By the way, is it possible to get housing loan without payslips or not paying income tax?

Thanks.
skiddtrader
post Apr 2 2012, 09:07 AM

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Just wanna congratulate wongmunkeong on his ELITE status. Keep up the good work. rclxms.gif
HughieRmX
post Apr 2 2012, 10:48 AM

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QUOTE(skiddtrader @ Apr 2 2012, 09:07 AM)
Just wanna congratulate wongmunkeong on his ELITE status. Keep up the good work.  rclxms.gif
*
Agreed ! Thumbs Up for that ! .. thumbup.gif
Kaka23
post Apr 2 2012, 01:00 PM

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yea! thumbs up for WMK!
chabalang
post Apr 2 2012, 02:20 PM

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QUOTE(iStevei @ Apr 1 2012, 10:46 PM)
Hi chabalang,

Thanks for your input. I'm 28 years old now. And yes staying with my parents at this moment.

1) I did not include car maintenance cos work place is very near my home. In a month or two, normally i would go for biz trip hence the allowance given is more than enough to cover my car maintenance and etc.

2) Ya my car is the culprit. Trying to cut on entertainment. But nowadays everything is expensive  cry.gif
400 bucks for entertainment include family dinner=100 bucks (once a month), gift/fren wedding=100 bucks, 200 bucks is for myself tongue.gif 

3) I'm a saver. But certainly not an investor haha still learning though. Thanks for the link.

Plan to get a house when my car is fully paid.
But i still thinking of going SG work probably this year. Is it advisable base on my current situation?
Seem like need to pay twice more than car loan which means my budget gonna be tighter 
And also ya, i plan to get a medical card as well which is about 100-150/mth sad.gif
*
1) Depending on your work/job, I generally encourage younger generation to explore the world. I have worked overseas for a number of years but back in M'sia for family reasons. So why not, if you can get a good job with a good pay in SG? Just a couple of points: (i) housing is getting more expensive in SG - a simple HDB room rental will cost around 700-800/mthly and (ii) you need to be "tough" - staying far away from your family and friends. You only have a car and study loan outstanding - it should not prevent you from seeking greener pasture. There is an active thread on Working in Singapore in LYN (already many versions).

2) Don't quite understand "Seem like need to pay twice more than car loan which means my budget gonna be tighter" - you meant repaying car loan early/faster? In M'sia, as far as I know - you will get only some (a little) rebate for prepayment of car loan (NB: I am not familiar with car loans) - there are some threads discussing on car loan early settlement in LYN. Generally, it is rather Punitive to settle car loan early in M'sia but that is going to change from July 2012 - the implementation is yet to be seen (have to wait until July 2012 to see how the banks will implement BNM's guidelines).
http://www.bankinginfo.com.my/04_help_and_...ntArticleID=111

3) Being a saver is a first step to investing. If no savings, what to invest? Investing is to yield higher returns than FD rates (in recent years, savers have been getting the "short-end of the stick" - we have been getting Negative real interest rates (i.e. FD rate lower than inflation rate)). So, investing is to preserve or enhance the purchasing power of your hard-earned money.

iStevei
post Apr 2 2012, 03:50 PM

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QUOTE(chabalang @ Apr 2 2012, 02:20 PM)
2) Don't quite understand "Seem like need to pay twice more than car loan which means my budget gonna be tighter" - you meant repaying car loan early/faster? In M'sia, as far as I know - you will get only some (a little) rebate for prepayment of car loan (NB: I am not familiar with car loans) - there are some threads discussing on car loan early settlement in LYN. Generally, it is rather Punitive to settle car loan early in M'sia but that is going to change from July 2012 - the implementation is yet to be seen (have to wait until July 2012 to see how the banks will implement BNM's guidelines).
http://www.bankinginfo.com.my/04_help_and_...ntArticleID=111
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What i mean is car loan is RM498 (2 yrs to go)
House loan will cost approximately bout RM1k.

If i plan to get a hse after finish repaying my car loan, my loan will be double, compare car loan with hse loan. So will have tighter budget.

Hope my above explanation is clear.
Sorry for the confusion smile.gif
chabalang
post Apr 2 2012, 04:38 PM

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QUOTE(iStevei @ Apr 2 2012, 03:50 PM)
What i mean is car loan is RM498 (2 yrs to go)
House loan will cost approximately bout RM1k.

If i plan to get a hse after finish repaying my car loan, my loan will be double,  compare car loan with hse loan. So will have tighter budget.

Hope my above explanation is clear.
Sorry for the confusion  smile.gif
*

My apologies..it was an misinterpretation on my side.

A housing loan instalment of 1k - will only translate to a housing loan of around 200k (i/r: 4.4%, 30-yr loan)
By then, your salary will have Increased - hopefully, more than RM500/mthly.
wongmunkeong
post Apr 2 2012, 07:46 PM

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QUOTE(skiddtrader @ Apr 2 2012, 09:07 AM)
Just wanna congratulate wongmunkeong on his ELITE status. Keep up the good work.  rclxms.gif
*
Thank U bro SkiddTrader, HughieRmX & Kaka23.
Paiseh paiseh - just got "promoted" by Admin-san AND ngam ngam my employer's financial year end and brain dead after office hours, thus can't really help/share much here for now (until the auditors and stuff are gone + other deadlines for April).
Argh.. the "stress" of living up to & beyond expectations sweat.gif

Anyhow, Bro Chabalang is adding more views & experience which is great - i too do not wish to "overwhelm" in this particular topic notworthy.gif
Personal Financial Management is, after all, PERSONAL first and foremost. No righter right - just a matter of priorities.

Begging your pardon ar Mods - just wanted to share why i've not done much in-depth sharing for last 2 to 3 weeks.

This post has been edited by wongmunkeong: Apr 2 2012, 07:49 PM
Kaka23
post Apr 3 2012, 08:10 AM

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QUOTE(va1kyr13 @ Apr 3 2012, 02:43 AM)
I really want to share here....

15-17% p.a return...
Time period 5-7 years.
Update frequently.
Low risk.
Big capital.
Might double you capital in 7 years.

Interested fellow please to ask me.
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No such thing as high return and low risk!
Smurfs
post Apr 3 2012, 08:54 AM

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QUOTE(va1kyr13 @ Apr 3 2012, 01:43 AM)
I really want to share here....

15-17% p.a return...
Time period 5-7 years.
Update frequently.
Low risk.
Big capital.
Might double you capital in 7 years.

Interested fellow please to ask me.
*
if u really want to share, please post all the details here so that we can learn something new.
skiddtrader
post Apr 3 2012, 08:57 AM

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QUOTE(va1kyr13 @ Apr 3 2012, 01:43 AM)
I really want to share here....

15-17% p.a return...
Time period 5-7 years.
Update frequently.
Low risk.
Big capital.
Might double you capital in 7 years.

Interested fellow please to ask me.
*
You do realise you are in a wolf's den here. Actually trying to convince people in this particular thread about supposedly too good to be true investments will get you eaten alive. biggrin.gif

Please don't bother wasting your time and go troll somewhere else.


cscheat
post Apr 3 2012, 08:59 AM

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From: Mars
QUOTE(va1kyr13 @ Apr 3 2012, 01:43 AM)
I really want to share here....

15-17% p.a return...
Time period 5-7 years.
Update frequently.
Low risk.
Big capital.
Might double you capital in 7 years.

Interested fellow please to ask me.
*
BS
cengkoi
post Apr 3 2012, 06:10 PM

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i just got married last year.still dont have baby.planning too.



Age: 27
Income: 3.3k (2880 minus EPF socso tax),wife 2000 (not fixed position probably change career)

Parent: 100
Rent House: 550
Food: 500 (maybe less due not live together currently)
Bill (astro+streamyx+phone+electric+water):300
Petrol: company give
Others (makan luar,ent,jalan2):200
Insurance: planning too
ASB :270
Car:456 (i have company car oso)
Credit card :250
PTPTN :100

FD : 4.5k
insert FD monthy: 300-500

Income yearly increment: 500

yearly bonuses :3 month

TARGET: buy a house as investment to buy corner lot double story house in future (4-6 year)

pls advice how to achieve my target coz i still dont know how.stil tryin.but i need the best way.

Thanks u!

This post has been edited by cengkoi: Apr 3 2012, 06:13 PM
chabalang
post Apr 3 2012, 08:15 PM

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Hi catfish0001,

I guess no one replied you because you are doing FINE.
Your savings rate of 45% of net income (excluding your ASB loan which is also a form of "forced savings") is impressive.

Although your asset is not diversified at all (all in ASB?), I believe you will diversify once your ASB hit a cap. Personally, I think ASB is one of the best local investment products (in terms of risk-reward profile). You mentioned most money rolled into FD? - good or bad depends (if you do not know HOW to invest, better leave it in FD. If you have gained sufficient knowledge, can try to venture into shares/properties but please start small). I have a fair bit of my asset allocation in liquid assets such as FD (despite the negative real i/r in the recent years) - waiting for opportunities in the market (market downturn/financial crisis are Opportunities for me).

P.s. eventually, you will have to plan to buy a house/property...that will be slightly trickier.

This post has been edited by chabalang: Apr 3 2012, 08:20 PM
catfish0001
post Apr 3 2012, 08:49 PM

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QUOTE(chabalang @ Apr 3 2012, 08:15 PM)
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Hi catfish0001,

I guess no one replied you because you are doing FINE.
Your savings rate of 45% of net income (excluding your ASB loan which is also a form of "forced savings") is impressive.

Although your asset is not diversified at all (all in ASB?), I believe you will diversify once your ASB hit a cap. Personally, I think ASB is one of the best local investment products (in terms of risk-reward profile). You mentioned most money rolled into FD? - good or bad depends (if you do not know HOW to invest, better leave it in FD. If you have gained sufficient knowledge, can try to venture into shares/properties but please start small). I have a fair bit of my asset allocation in liquid assets such as FD (despite the negative real i/r in the recent years) - waiting for opportunities in the market (market downturn/financial crisis are Opportunities for me).

P.s. eventually, you will have to plan to buy a house/property...that will be slightly trickier.
*
tq for replying..yes, i do have view in properties but still not dare enough to enter and playing with the market as im not someone who into market and laws..and to enter real estate world i do believe needs a a strong financial..yes, there is loan to be taken, currently not dare in taking too much loan..

in ur view, how much i can afford if im into real estate with my current financial?..300k?..usually, if 300k,how will the loan payment scheme will be?..
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