Hi Mango27,
May i bug U for your current rental cost? Hheh - need more complete data to simulate better and bounce ideas with U here.
I noticed U are not staying in your own home (aiming to buy or not buy, thus your post), but no rental costs?
OR is it lumped into the "Others: $500 ~$600"?

BTW, i've also noticed that your "free money" is about $2,071 after taking the minimum $6,497 and LESS maximum costs U stated above for Fixed & Variable Expenses, quite a bit off from $2,471 U stated U should have to spare for paying off a home loan. Heheh - sorry ar, i'm using the least net income VS most variable expenses for prudence sake

This post has been edited by wongmunkeong: Apr 25 2012, 08:56 PM

memberiii,

Thanks for the input.......Yeah im guessing I should use the money for investments such as ASB or others. Appreciate it mate!

What should I do best with 60k cash in hand?

Note: I am eligible to invest in ASB.

Thinking to spend in gold a bit and invest in unit trust. Which fund?

Commitment:

Rental: 550
Car Loans @ 2.87% interest: 641 monthly
140k housing loan: BLR-2.1 29 years (tenanted property @ 650 monthly)

This post has been edited by techie.opinion: Apr 25 2012, 08:38 PM

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Added on April 26, 2012, 10:34 amNow staying with my mom.. No rental cost.. Hehe.. Others is for entertainment etc..

I have enough to pay off home loan.. But is it wise to do so? A 35 years loan interest would cost around 300k.. Even if pay of early to 25 years still would cost around 200k.. Not so good of an investment I would say.. its a condo so appreciation won't be much. So would investing in asb better?

Also now my expenses is low cause still young. Driving a 9yo paid off car. So it would last me for another few year then new commitment comes. Then other thing like marriage and etc need big amount of money. Thus the dilemma now.

This post has been edited by mango27: Apr 26 2012, 10:36 AM

May i take a stab at this?
Hm.. let's go by the numbers first shall we (based on attached ZIPped Excel file which U can play with to see "what if"):
 Mango.zip ( 276.31k ) Number of downloads: 42


Please keep in mind, i'm taking your "higher" expense variables and "lower" net income just to be prudent
% of net income

VS

1. Spending on "Feel Good" is about 16.55% of your net, which IMHO, is a wee bit too high
2. NOW you're doing well with 41.59% savings & investment
3. WITH HOME your savings & investment will drop to $964 or 14.84% of net income - impact, please see 2nd part of opinion/feedback
4. WITH HOME your net income % allocated to monthly loan repayment + fixing + cukai pintu/tanah is about 26.75%, which is slightly high for comfortable level
5. However, since your partner & U are just starting out and can see increments coming in by the dollops, should not be a prob if U decide to buy a $300K home


Savings & Investments extrapolated to 01/01/2025 based on 7%pa growth

VS

a. Please note that i did not extrapolate how much EXTRA per year you'll save, just to keep it simple.
If U wish to simulate, please change cell C3 of "NetSalarySave&Invest-NoHome" and "NetSalarySave&Invest-WithHome" worksheet

b. There is a variance of about $290K between both scenarios, about 64% difference.
Note: I did not include the worth of your house into the scenarios since it's a home, not investment/rental property, making U $ or easily disposed

c. As U anticipated earlier.. whoa.. buying a home MAY not be a good idea in terms of growing investment returns


IMHO, bottom line:
+Buying a home is NOT an investment per se UNLESS... maybe if there is a huge property market crash when U buy and U intend to rent out a few rooms heheh.
The main objective of buying a home is to have a place to be yours, grow roots, etc. and totally be yourself.

+Since you've thought it out well (location of your $300K home) and reasoned it well + we didn't include ANY bonuses nor average increments... it is safe enough to consider buying.
Combined net income for the loan & operations of the home looks ok - 26%ish excluding net income growth AND bonuses.

-IF consider buying now, before getting married, be wary of "joint" purchase.
er.. sorry to be a wet blanket.. your current squeeze may not turn out to be your future partner/spouse.. then how ar?
awkward like heck man + may be forced to sell at a loss

Hope some of the ideas/items above + the Excel is of use
Just a thought

This post has been edited by wongmunkeong: Apr 26 2012, 01:05 PM

1. Ya i know that.. Was thinking that im still not married and not much commitments yet, so this is the only time i can afford to spend.. but once all the commitment comes in, it will be reduced... heck i dont even have a credit card yet... i still prefer to spend what i have... a home loan totally change that...
2. Its more on savings rather than investment... i havent even saved enough for the emergency funds of 6 months salary yet...
3. I cant find the "2nd part of opinion/feedback" you mentioned
4. I guess this cant be helped due to the crazy property price nowadays... 10 years back i wouldnt imagine i would buy a house >200k...
5. Hopefully... if Msia economy doesnt crash...
64% is a significant difference by the end of the 40 years loan tenure, i'll be so much "richer" if i dont own a house... and according to your simulation, its like you're suggesting ASB is the best investment option... I feel it to, but is it ok to put all eggs in one basket? a golden basket...
I have been following the property thread for quite some time now.. There are 2 type of extreme there, one so convince that bubble will burst anytime now and another is "if dont buy now, in future fresh grad would not able to buy anymore" type of ppl.. thus, creating a sense that as if if i buy a house now, im rushing to it.. So after your analysis, i give me great relief.. btw, im not in dire need to buy a house since i wouldnt mind staying in the house i am at now after marriage due to that my mom is a widow, so its good also if i stay to accompany her.. so its still a win-win situation if i get or dont get a house.. but like you said, its better to have a place of my own.. and it could yield some rentals if im not staying...

btw, you been of great help... taking time helping a stranger to plan for life... you should get a award for that

Hi Mango27.

Whoops, my bad. 2nd part is suppose to be the "Savings & Investments extrapolated to 01/01/2025 based on 7%pa growth", there U can see the "holy smokes!" difference of impact the home loan does to one.

You're one of the very few folks i've come across which actually doesn't worry about "buying a home", using the logic of cost benefit analysis. Sometimes, rental makes a heckuva lot of sense. Buy in a collapsed property market is a no brainer but at the current situation... In addition, people can speculate properties going sky high summore OR collapse.. it doesn't matter - just build up your assets to be able to buy value lar right? Unless one has crytal balls...

Please note that U don't need to "dump" everything into ASB.
U have plenty of choices like REITs, stocks, bond funds, equity funds, etc. Even SG, AU, HK, US REITs & stocks via online direct OR online via HLeB, CIMB, etc.
U are right - don't plonk everything into 1 (ASB) basket, especially if U have EPF at the mercy (literally) of the Government.
BTW, buying a property to be a landlord may not be that fun/easy, especially if the renter is so-so (may not get great renter even via extensive filtering mar)

Just a thought

This post has been edited by wongmunkeong: Apr 27 2012, 08:37 AM

Some ideas.


For gold, the best is:-

Physical Gold: UOB Kangaroo Nugget 1 Oz (The lowest spread rate between 3-4%, can pawn and sell back to UOB)

Paper Gold: UOB Gold Savings Account (The lowest spread rate of only 1.15%)


For *Unit Trust, recommended unit trusts are:-

Non-Syariah: Kenanga Growth Fund (One of the best performing malaysia equity fund over the years; low volatility against KLCI index, higher sharpe ratio, lower sales charge via Fundsupermart 0.88% - 2% versus Public Mutual 5.5%)

Syariah: Kenanga Syariah Growth Fund (The best Malaysia Islamic equity fund over the years; low volatility against KLCI index, higher sharpe ratio, lower sales charge via Fundsupermart 0.88% - 2% versus Public Mutual 5.5%)


Additional Suggestion:-

Invest RM27k to pay downpayment for a double storey terrace house (freehold) at Pelangi Semenyih Phase 2A, with an estimated ROI of 30 - 35% within 3-5 years (link: http://forum.lowyat.net/index.php?showtopi...43&hl=semenyih)



* Kindly check morningstar.com for the said unit trust details




This post has been edited by izzudrecoba: Apr 27 2012, 11:10 AM

Well done... Yes, I am looking tu buy house for stay in KV for sometime already but still could get the right one with location and cost...

Hi learn2earn8, thanks for your reply and pointing out some highlight to be clarify clearly with my sis. Appreciate it.

Wondering any others who might share on how or perhaps any other alternative way of saving plan more suite my parent?

Thanks.

hey wongmunkeong
just wanted to say thank you for the revamped excel files
these are very helpful with my numbers

Bro, got no idea why I can't download the spreadsheet that you are sharing over here. No idea why it can't be opened.

a. er.. U can't download
OR
b. U downloaded to yr PC
but U can't open / unzip the ZIP file to a folder
OR
c. U downloaded to yr PC
U can open / unzip the ZIP file to a folder
but U can't open the Excel file?

Better PM me since other forumers seem to be able to download and open with no issue.

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Added on May 2, 2012, 12:55 pmYou're welcome NoTea - glad to be of help.
Any ideas for improvement and feedback on bugs (if any) is welcome

This post has been edited by wongmunkeong: May 2 2012, 12:55 PM

Just want an opinion from you guyz up here.

If we invest in land, did you think it worth it?
i not meant by a condo/property or whatsover.
I meant a RAW land that are reserve for the future development.
What do you think?

Got it .. I will PM you in a short while ..

hi guys, i'm not sure whether this is the right place to ask. but i think it's about money management too.

basically, i'm going to be sent to work in china by my current company. So, i want to ask how and where should i declare my income TAX? i'm wondering should i ask my company to pay me in RMB or RM. whichever that can enable me to pay less tax

i heard that if i'm going to work oversea, i would consider expat and need to pay 26% flat rate! is that true?

it's welcome too if anyone can advise me about China income tax rate. i've searched google and come back with many different result.

Normally it depends on which end are you getting paid, so if the 'earning' is in China, you will be taxed in China and vice versa. Honestly, this issue should be taken up and handled by your company rather than individual.

i think we should have a good business plan, and there is, certainly want the plan to reflect purpose and use it to actually run your business. Still we often don't have a clue how. That's where educating yourself comes in. Take time to understand how to do the math, read market analysis and adopt good business strategies that work. It helps to study business plans that have actually been used to start successful businesses.

Hey guys, just want to enquire. If I have about RM1k to spare after all deductions per month, what should I do with the cash? I am pretty new in investment and all. Current savings that I have is RM10k. Should I start putting money into FD or is there a better to to ensure that my monthly expenses does not cross the line. Please know that I do not have any medical card or insurance and I dun think the time is there to get it yet. I am currently 24 and just started working.

Hi Avengers88,

Just started working? Welcome to slog-athon land
Jokes aside, just to bounce some ideas with U yar for your $1K spare pm:
1. Life insurance with 36 critical illness and disability coverage
U may want to consider this IF:
a. U've loved ones economically dependent on U
b. U want to try and save your life if diagnosed with any of the 36 critical illness (choy choy but...)
c. U need to be able to fend for yourself should disability happen (choy choy again but...)

2. Hospitalization insurance
U may want to consider this IF:
a. Your employer doesn't cover at least $30Kpa hospitalization
b. Your parents, family or U can't cough-up at least $30K hospitalization if U are hospitalized (choy...)
These days, even a simple / minor operation cost about $10K+/- in total.
If it's something more involved, then it starts ratcheting up.

3. Emergency buffer fund
Do U have at least 3 months' average expenses set aside in FD, savings, etc (easy to get to and easy to liquidate/is liquid)?
Before investing in anything, best to have some $ put aside for emergencies coz once invested, costs and market timing comes into play
eg. U invest $1K but in reality U get only $990+ "value" of stocks/bonds/unit trusts/etc. coz of service charges/commissions/brokerage/stamp duties/etc.
Thus, U lose straight off the bat.
Next, if U were FORCED to liquidate your investment prematurely coz U need the $ to cover some emergencies AND the market is bad... double-whammy

Once the above are covered, then only start thinking about investments.
If U noticed, all of the above is about risk management and risk transference. If one can't even "see" these risks, imagine how well one would do in the risky investment world .
Use the time to learn about investments while the above are being covered.

Just a thought yar - no right/wrong