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This post has been edited by Kaka23: Apr 19 2012, 11:14 PM

Been a long follower of this awesome thread, started working 8 months ago.

Not married, living with my parents, while the house is taken care of by my dad, i'm just paying for the bills and any loose payments. Parents said do not require me to give money to them yet as they are still capable of taking care of themself.

No properties, no stocks , only RM8000 in the bank.

Salary :RM6200 nett

Fixed Expenses:
Car: RM650 (2nd hand Persona for 5 years, 4 half years to go)
Study Loan: RM1710 (250k study loan)
Electric Bill : ~RM220
Astro: RM164
Water: RM20 (living in an apartment, water is regulated by the apt )
Streamyx : RM135
Insurance : RM550 (Life Insurance 500k) Medical Card (RM120)
Ipad Installment : RM161 (5 Months to go)
Petrol : RM350 ( to get to my workplace, 100km to and fro)
Toll: RM100

Total ~RM4250


Left RM1950 for food/entertainment/date.

Will be my first month next month paying for the life insurance RM550. Have managed to save at least RM1000 per month before that , now the goal is to try to save RM1000 minimum even after paying the RM550.

Been binging a lot on food , as me and my gf are both food enthusiasts we tend to spend a lot on food, when we go out. Trying to reduce it to a minimum!

Gameplan:
1) Reduce expenses, esp misc expenses like eating out, cutting down the snowflake/chatime/starbucks.
2) Save RM20000 and put it in FD. Once i have that will start thinking of investing.

Should i let my 8k just sit here and accumulate for emergency funds or do you guys have better advice for that small chuck of money.

Trying hard to save at least 30% per month. My study loan is a big killer, but what to do haih!

This post has been edited by db07mufan: Apr 20 2012, 12:01 AM

An Objective in Life could be like a simple goal i.e to have a baby at a future date, or saving to buy a house or saving for a retirement.

If you have too many , then priorities them one by one.

I guess to have a baby could be a natural goal, but do plan for the future expenses as well.

REgards

This post has been edited by SKY 1809: Apr 20 2012, 07:02 AM

Last time I used to have half of your salary but I was still able to save 35% to 40%, i.e. around RM1,300 to RM1,600. So I think you should at least aim to save RM1,500 or above.

Emergency fund means it is for emergency purpose and should be put in the most liquid form of asset, i.e. FD. Since you plan to put RM20,000 in FD, now you will have another RM12,000 to go. Once you set up the RM20k emergency fund, then only you start to think about investment in order to look for higher return.

Hi db07mufan,
Congrats on your awareness of food/entertainment/dating being a lopsided % amount of your expenses + aiming to create a buffer emergency fund & investing fund by saving 30%+/-.

If i may suggest:
1. Replace / re-prioritize your love for fun food with another objective/hunger, else it may be hard to "break through".
eg.
by focusing on my net worth's growth and tracking MONTHLY,
i could cut down drastically on my previous habits - spending on gadgets & games (hey, i'm a typical nerd )
coz when i see it growing monthly and yearly (12 months' moving average)
Then it became my "main game" instead of gadgets, computers, PS3s & 360s
Bottom line: Have to replace one burning desire WITH another, else old burning desire hard to control

2. Split emergency buffer into staggered / laddered FD + U may want to put some in bond funds.
eg.
I've 1 year's expenses buffered in my emergency fund.
I store about 4 months' average expenses in my mortgage fund (like FD but more flexible ) + about 8 months' average expenses in bond funds
coz i don't for see touching more than 4 months' average expenses in a sudden crunch / emergency, thus i have time to liquidate my bond funds AND still make more % via bond funds than my mortgage fund's %.
I know i know, the main focus of emergency funds are for emergencies, not to grow %. I just hate seeing $ lying around in cash and losing greatly to inflation, thus i tweak a bit lor. May not work for U

-----------
IMHO - U've got a good game plan - by managing $ and building up your emergency buffer, before U start investing.
a. The $ put into investments should, IMHO, be conceptually thought as "can't touch this" for several years (at least 3 to 5 years) to AVOID being forced to sell at a bad time. This is where your money management and emergency buffer comes to save the day

b. Use the time (while building up your buffer) to learn about asset allocation, asset & sub-asset classes, what each asset / sub-asset can do for you, investing methodologies like value investing, dollar and value cost averaging, etc. Plan out a cohesive approach for your own financial goals & style/approach to investing

c. Test, track and tweak your plans & style/approach (b)
Without tracking, you won't know how your actions are "performing", thus won't be able to manage effectively & logically.

Just a thought

This post has been edited by wongmunkeong: Apr 20 2012, 09:48 AM

You want to buy a car but you're not using it frequently quite defeat the purpose of buying one at the same time. If you are not relying on the car, do you really need it? If any one of your friends are staying nearby, perhaps you can car pool on them. Not a need to be shy, friends understand and what you can do to repay them is just a small meal treat!

I agree! Thanks!

Think from beginning of next month, i'll take my pay take RM1500 put it in the emer fund account first thing and then the remaining to another account where all my transactions are.

I agree, been spending a lot going to fancy restaurants. Need to frequent coffeeshops more often and cut out on the binge eating. No more exp supper or just pure eating from greed.

Mortgage fund is it like a flexi loan kinda thing? I've read about it but have not understand it fully yet. You put a certain amount of $$ into your loan to reduce your principal, but when u need it you can just take it out.

Thanks, any sugggestion on where i can learn those. Been trying to read up on the stickies in this subforum

I am now 29, close my thirty liao. After working for 6.5 years and save enough, I think it's time for me to have a car, and with that I don't have to trouble my friends and I can go wherever and anytime I want to go out to meet friends.

In addition, after taking into consider that if I am going to buy a car at RM40k and I will pay 20% downpayment for it and the remaining take bank loan with repayment tenure of 5 years, I will still be able to save at least 30% of my salary. So owning a budget car won't cost too much to me anyway.

My apologies - perhaps mortgage fund is my personal English
Yup, it's flexi mortgage - i put my extra $ and buffer $ there, thus i don't have to pay (BLR -2.2%)pa daily rest interest rate, in effect "making" 4.4%pa currently and much more flexible than tenured FDs.

As for where to learn:
1. Basics - google cukup, plenty of write-ups around the web.
Read, process and absorb what U think makes sense to U

2. Details - books (also filter with your mind lar, k. What works then/situation may not work 100% now - just in case some fellow forumers start slinging again, being more than obvious here )
Books like:
+The Art of Asset Allocation: Principles and Investment Strategies for Any Market
+The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
+The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (the big momma of them all, very chewable like leather )
+The Four Pillars of Investing: Lessons for Building a Winning Portfolio
+Value Investing: From Graham to Buffett and Beyond
+Value Averaging: The Safe and Easy Strategy for Higher Investment Returns

Wong Sifu,

Why not you write one book for all your just mentioned.

So we do not have to read so many, just buy your book.

Cost saving also , right

This post has been edited by SKY 1809: Apr 20 2012, 12:00 PM

Your objective will be to build up your savings quickly to a certain level.
Keep your expenses at the present level.
Be frugal in the early years.

Just wondering if your life insurance is worthwhile at this present time.
You are not married and do not have a family of your own.
Do your parents depend on your income?
Will they be financially ruined if you are not around?
Life insurance is for protection, certainly you will need this when you have a family of your own.
Insurance is a poor form of investment.

Bwahhaahah - bro Sky high(five!).
U "look me too high" lar, don't lar put me on the "god's table"
I'm too simple minded to write a book

I'm just a digger and user of info & stats.
Those books i mentioned above are just the tip of the iceberg. I've got "a few" more to recommend IF needed, from Trend Analysis to $/Risk/Sizing management and even "age & goal based" asset allocations, +other more "rojak" hehhe.

If U or any bro/sis interested in a list, i can screenshot my ebooks and photo "real" books and post it here for sharing what's interesting to read.
The other books i found so-so or repeating the good ones, all chucked / donated away already hehe

This post has been edited by wongmunkeong: Apr 20 2012, 12:10 PM

Bro, would like to know how to make 4.4% from Flexi Mortgage and thanks for sharing the booklist.

The insurance I kind of deliberated for a long time before plunging in.

The nature of my job requires me to be in tip top health, and half of my salary comes from how much I work. Meaning to say if I do not work that month I'll lose half of my pay.

The insurance I have pays for the days I'm not working. Let's say for health reason I may not be able to work for a month, they will be paying me a amount which is equivalent to what I earn that month working. The sole reason I took is because of that, I may not be able to cover my high fixed expenses if let's say touch wood I break my hand and am not able to work for that month.

I look forward to inputs regarding life insurance and how to not overvalue etc if you guys are willing to contribute.

By getting a flexi loan and manipulating with it, you are odeli an intelligent investor to me.

>Insurance : RM550 (Life Insurance 500k) Medical Card (RM120)<

Life Insurance
$550 per month
What coverage or protection do you get?

Medical insurance
$120 per month
What coverage or protection do you get?
Do you not get this from your employer?

U are kinda insured for loss of profit to me.

Quite well done ( from what I think )

But this thread is kinda downsizing the insurance to me.

A silenced issue here but important to me.

BTW, even to protect yourself from further loss is a Good Wealth Protection Plan to me.

U are a Good Asset , And not a bad liability as many here see.

Best Regards

This post has been edited by SKY 1809: Apr 20 2012, 12:36 PM

I find this site quite informative. This guy discourage using insurance for investment but encourage it for protection.
http://tankinlian.blogspot.com/

Copied & re-posted from previous - google/search functions are your friend, leverage on them

...instead of plonking my cash in any savings or FDs, better to plonk into my Flexi Mortgage as my mortgage is 4.4%pa daily rest - ie. whatever amount of extra $ i have placed in my Flexi Mortgage is considered capital repayment, thus i dont get charged 4.4%pa for that additional capital repaid amount, thus in effect "saving me" 4.4%pa. No FD gives me that % and also flexibility to take out (re-draw).

....Flexi mortgages - U can knock down the principal amount any time/any amount AND re-draw the extra payments any time / any amount via cheques/ATM/online.
When U pay extra / knock down the principal amount, say $100K, U dont pay interest on that $100K UNTIL U re-draw it
eg (simple example only, not spot-on actual mathematically same with banks).
On top of the monthly payment, i plonk in $50K additional on Jan 1
Then later, I took out $20K to buy stocks on Jan 31
a. My mortgage interest calculated from Jan 2 to Jan 30th would be less $50K *x.xx%/364.25 days (mortgage interest charged) *28 days
b. From Jan31 onwards, my mortgage interest calculated would be additional $20K *x.xx%/364.25 days (mortgage interest charged) *xx days

---

Added on April 20, 2012, 12:34 pmRisk transference / management
Everyone needs some sort of it until they can more than self-insure IF they wish.

This post has been edited by wongmunkeong: Apr 20 2012, 12:34 PM

The rm120 has been bought by my mum since last time I'm just taking over payment.

Life insurance covers 36 crit Illness Tpd all the full nine yards.

The big one for me is if I lose the ability to work in my job scope , first year they give me 50k if 2nd year still no, they give me another 50k. Third year still not able to work in the job scope the remaining 400k and policy ends.

Along the way mc allowance per week rm900 and 200rm per day hospital allowance

The insurance is just 10% of my pay so I think it's fair enough. At least I can have a peace of mind knowing if I do not work for one month my bills are paid for.

Anyhow I'm open to debate , appreciate you guys opinion in this issue

This post has been edited by db07mufan: Apr 20 2012, 12:48 PM