wa then the variable interest charge by HLB more expensive than normal flat rate by other bank.. Cheater.. lucky i close my account wif the bank liao

We (husband & wife) has not much investment portfolio and these years just saved and accumulated emergency fund of 16 months of our total gross income. All into FD and ASB only.
We have one children, and one to be due end this year.

My question is:

1.) Do i still continue keep saving or shall i start to invest in shares, properties & etc? Do 16 months emergency funds sufficient for rainy days?

IMHO 16 months of GROSS INCOME is more than sufficient, I think 18 months of EXPENSES should be ok. Let your money work harder for u

Different investment product have different risks.

Make sure you understand all the risks before putting in your hard earned money.

Mind to tell us your risk appetite? Whether you are a risk taker or more to conservative.

You see these years we only put into FD and ASB already know we are conservative, rite? Recently, we have thought into shares and properties. Had surveyed properties and the price is expensive and seems some sell like hot cakes. All sold out.

We will definitely will not touch the 16months emergency funds, we will newly start to save again for any further investment.

if u are conservative and got not much time to research and monitor (I see u have a kid and another one coming soon), unit trusts should suit u. Talk to a financial planner or a good UT consultant or if u are comfortable investing DIY, u are welcome to visit Fundsupermart.com thread at LYN, we have a number of DIY UT investors here.

by your name: then i assume you born 1981, then you age is 32. Correct?

Any housing loan or car loan ?

How much you can save per month ?

IMHO 16 months gross income is a bit overboard for emergency funds, but I see you have kept some in ASB. I would rather keep only 5 months in FD and 1 month in savings account, with the rest in ASB. Investment in ASB is not really considered emergency funds and is more like investment.

Since you quality for ASB, suggest you max up your 200k ASB contribution before you consider other investment. ASB is the best risk adjusted investment out there.

Yea

Think along this line...every month we receive our NET INCOME, and then we pay our EXPENSES and save the excess.

Thus, when planning for emergency funds, it would be better to have in multiples of net income or monthly expenses rather than gross income.

Like myself I put 12 months worth of net income in FDs, thus theoretically I can be out of job for 12 months without affecting my lifestyle.

Any excess cash after that 12 months FDs I park in bond funds which yield above FD rates.

so good to see different approaches and thinking. for me, i think 16 months or even 12 months is way too much. i keep about 3 months only for CRUCIAL xpenses. that means some other luxuries are NOT catered for, e.g. entertainment.

maximize the rest in investment, whether ut or property or shares...

if there is a serious need for more than 3 months then there is still sufficient time to plan.

just my views but i agree everyone will have different planning/requirements.

yup yup - different ideas, different reasons.

IMHO - it depends on whether:
a. One is the SOLE breadwinner ie. lost of job or incapacitation = 100% loss of income
b. One has how much investment assets generating cash flow ie. lost of job or incapacitation = how many % of total income loss?
c. One's ease to find work - ie. specialist in marine biology working in Dubai or CFO/COO level = hard (ie. more than 6 months) to find similar jobs

Thus, IMHO, based on the 3 items above, examples would be:
Sole breadwinner AND no/low investment assets generating cash flow AND hard to find work?
>=9 months' worth of expenses in emergency buffer

Sole breadwinner AND with good investment assets generating cash flow AND hard to find work?
6 to 9 months' worth of expenses in emergency buffer

Sole breadwinner AND with good investment assets generating cash flow AND easy to find work ?
3 to 6 months' worth of expenses in emergency buffer

For non-sole breadwinners, i'd suggest:
1. logicallizing out the ratio of one's income to the partnership's total income
2. taking the % and multiplying with the above's "sole breadwinner" thoughts

Just bouncing my 2 cents worth of thoughts

I am the wife, using hubby account. Yea, my hubby is 32, but I am elder than my hubby. Throughout the years, we felt that 6 months buffer not sufficient for emergency especially for family that have children. That's lead to after 6months and continue now till 16months.

This emergency funds is purely capable to support all expenses if both of us jobless for 16months.

We are non bumi, to say that my buffer funds is 90% FD and 10% ASB.

Yea, we have a house loan which currently we stay at, a car with loan. Hubby has company car.

We saved abt 40% monthly nett income.

May I suggest?

12 months x expenses (based on your statement above, would be 60% of net income) in FD or equivalent

Then at least 3 months worth of expenses in bank savings account

Anything extra, invest. Make your money work for u

Hmm ...

If sole breadwinner, but monthly passive income > monthly expenses, then 1 month emergency more than enough? Or no need to have emergency fund...

This post has been edited by gark: Feb 28 2013, 02:29 PM

Hmm... how did you get ASB if non-bumi? Loophole?

Or you meant ASM, ASW... etc?

This post has been edited by gark: Feb 28 2013, 02:34 PM

heheh boss, dont lar
if passive income > expenses, wont be poking here liao

Rental house collapse like Highland Tower, how?

Wah ... u really 'kiasi' leh Can think until this scenario...

Think of the tiny tiny % it will happen to you, if really happen accept fate lar.

Sorry. It is ASM.

So u guys invest in properties as such condo, is it for ur children education? I seen ppl mostly buy condo and wait after 20 years and sell it off for children education.