You're the man bro KParam

If i can wait and if it's for gifts, i grab them books from Big Bad Wolf book sales. Dirt cheap - about $10!

If i cant wait and it's something new, Popular Bookstore, with of course the 10% to 20% discount for members. Skint flint here


BTW, a Random Walk is a good book too.

IMHO, at the end of all them investing books - you'll have 2 major camps (and many many sub-camps):
Everything is priced in / the Market is efficient (thus buy quality and just do Asset Allocation / rebalancing when needed)
VS
the Market is not so efficient (thus there are opportunities)

Based on which of these two camps U think is right-er (as in "more real"), then U'll face another step - how to execute, and there's more than 3 to 4 major methodologies and their sub-methodologies.

Gambate!

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Added on August 24, 2011, 6:48 amer.. i think it's 3 months' LIVING EXPENSES, not Salary

How many months' living expenses? IMHO, it depends.

3 months' living expenses as buffer / emergency funds should be enough if U are a salaried worker with consistent pay AND have no dependents

6 months' living expenses as buffer / emergency funds OR MORE should be your target IF your pay is inconsistent / fluctuating (think biz men or retired) AND have dependents AND is the only bread winner in the family.

Reason for the crazy difference: Risk - single source of failure

BTW, there is such a thing as "over saving for emergency fund" - coz then U wont move $ much into investments. Emergency funds are usually stored in liquid form - savings & FDs.

Personally - i store:
2 mths in savings
3 mths in flexi mortgage (much higher than FD)
3 mths in bond funds (since i most probably wont touch these until after using the other cache)

This post has been edited by wongmunkeong: Aug 24 2011, 08:00 AM

You're spot on. Flexi mortgage = housing loan.

How it works? Well, the one i'm using (SCB Mortgage One) but Citibank FlexiHome + Alliance FlexiMortgage is similar:

Borrow: $270K for housing loan
Interest rate: BLR - 2.2%
Monthly overdraft cost: $10

2008 Nov:
Took out $270K to pay for property
Interest rate starts counting for the $270K

2008 Dec 30:
Received bonus + salary, dumped in $30K into Mortgage One
Thus, i only pay interest on $270K (less monthly mortgage paid) - $30K from Dec 31st onwards

2009 Jan 20th:
Used Mortgage One online banking to pay credit card $3K
Thus, i pay interest on [$270K (less monthly mortgage paid) - $30K from Dec 31st onwards] + 3K from Jan 21st onwards

By just using the Flexi account such:
a. I knock down the capital owed whenever i have cash just by storing it there (can take back out any time mar)
b. The $ i make is the $ i dont have to pay for the interest rate %. My current rate is 4.4%pa. No FD gives me flexibility like this + such rates, thus, i dont use FD for now
c. Without any other additional payments, assuming i just plonk in my salary and re-draw to pay off credit card & other living expenses, I've extrapolated that i save about 2 years worth of payments from a 28 years loan, JUST BY LETTING MY $ SIT THERE while waiting to be re-drawn.

For the $10 monthly charges, it's worthwhile IF one has the discipline to keep $ rather than having an itchy hand to use re-draw to buy superfluous stuff like new cars, LED TVs, gadgets. In addition, i use it as my horde when market goes to hell and stops falling - to buy mega sales priced equities

Hope the above makes sense and is useful to U. Your mileage may vary - i've been some ppl fall into the trap of using such Flexi account to spend spend spend

This post has been edited by wongmunkeong: Aug 24 2011, 10:29 AM

Yes i "earn" by not being made to pay the amount as loan interest.

Think of it as partial early settlement with no penalties AND can be re-drawn anytime.

8 months expenses buffered only bro .
I'm going into 40s + single father & the only son of my parents, thus quite a bit of economic responsibility & a "single point of failure".
Aiming for 1 year's buffer


Anyway, just to share - for my retirement, my target is:
1 year's expenses in FD & Savings mixed
2 years' expenses in Bond Funds NOT part of investments' asset allocation - just in case equities' & REITs/Properties' returns plummets and doesnt recover for 2 years.

then the rest of my assets allocated (may not be bought in totally yet if market's too crazily high) generally to:
33% bonds
33% equities exREITs/exProperties
33% REITs/Properties
1% as wiggle room heheh

Then every year, the returns from these investments, i "re-charge" 1 year's expenses amount into my FD & Savings + re-invest the variance, thus "living on returns" forever and able to give back something big (to me big lar, to U may be chicken feed ) back to charities.

Mind U, i'm still tweaking and checking stats
I may just simplify to
6 years living expenses in FD, Bonds, MM (just in case a depression cycle takes 5 yrs to recover)
+ remaining 50% in Equities exREITs/exProperties & 50% in REITs/Properties

---

Added on August 25, 2011, 6:43 amYou're nearly spot on - the nuances are:
a. Borrow lump sum (available credit)

b. Can take out bit by bit, neednt take out entire borrowed lump sum
Whatever's taken out incurs loan interest

c. Extra payments any time will knockdown whatever's been taken out, thus neednt incur loan interest
Extra payments can be re-drawn (see b.)

d. All these while, the term of the loan is counting down and i've got less and less amount to use
eg. Bank OKed $10K for 10years
after 1 year down the road, i can only draw/ re-draw up to $9K only (assuming simple straight line maths lar - i know the actual isnt calculated thus, simplifying the example)


Er.. these kinda home loans have been in existence since BEFORE i bought my 1st home in 2001 leh.

Nowadays (or more like a few years back), got even more changgih one - revolving home loan from RHB. Much more flexible in terms of tenure i think. Mind U, not useful for everyone and every situation - fixed % (no BLR based) may be better for some.

This post has been edited by wongmunkeong: Aug 25 2011, 08:27 AM

Get thee behind me devil and offered to dig deeper debt hole of oblivion!

Seriously Bro, what U just did here was like those flees sticking $ & honey stickers on walls & sign posts. Don't lar like that - there are specific threads / topics for these kind of unsolicited kaka

Heheh - sorry bro, i dont follow any deposit schemes much these days due to leveraging on my Mortgage One a/c.

If i may suggest:
a. Throw it into a Bond Fund
b. while learning about investment vehicles, methodologies and drawing up your own plans.
c. Thus making U more than current FD and yet not go through crazy fluctuations of equity markets UNTIL U are ready.

If possible, find a fund house that preferably have some above average bond, money market and equity funds. Neednt be best-of-the-best, but at least upper 50th percentile lar.
Reason: In future, U can SWITCH within that fund house's mutual funds, thus easier to manage & cheaper in terms of entry/exit costs VS moving between 2 different fund houses.

end of $0.02

---

Added on August 28, 2011, 4:19 pmREAD read or flip through?

Nowadays, i flip through like about 3 to 8 (depending on availability of new books) nowadays but actually READ read = less than one on average per month.

As U gain more and more theoretical knowledge + hands-on experience, U'll notice that most books are talking about the same thing but presented in a slightly different manner. Worse still - there are books which present EXACT methodologies / approaches / formulas of other books AND combines a few into one book. It gets harder and harder to find "something new and useful", so much so that to me it's like hitting gold when it occurs

This post has been edited by wongmunkeong: Aug 28 2011, 04:19 PM

Annual income? Whoa bro - that's a heckuva lot of car
I personally buy only with cash (if replacement / 2nd car) or like max 5% of net worth.

Yeah - some of us M'sians lagi changgih, 9 years loan + personal loan for the down payment for a car, a depreciating "asset".

http://forum.lowyat.net/topic/2011608/+2120#entry44963403

it's been bumped down to page 2 of the "Lowyat.NET -> Roundtable Discussions -> Finance, Business and Investment House"
eyes open a bit bigger yar

er.. bro, U may also want to find out how much the maintenance (service) cost + general repair costs too (tyres, radiator, aircond, steering column, brakes, suspension, etc.). These may eat U alive too

Thus far, i've not come across any worthwhile ones unfortunately, from $4K to $8K .

Best alternative IMHO (AND MUCH MUCH more cost effective) for personal financial management:
a. T Harv Ekar's "Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth"
Good read AND action-able steps, especially the money management thing 10% this, 10% that, etc.

b. Robert K's "CashFlow Quadrant"
Good concepts but very little action-able steps

c. Stephen Covey's "The 7 Habits of Highly Effective People"
Good concepts and action-able steps. Hey, if U arent basically effective, you'll not breakthrough in anything

Foot note:
IMHO Ekar & Kiyosaki has some... how to say.. questionable workshops tied to them/their companies. Please open eyes big big before signing up for them yar


Other than the above, there are several specific books i think is great for:
a. Stocks investing & trading - sizing, $ management, risk management + filtering + entry & exit methodologies
b. Mutual fund investing via value averaging or TwinVest
c. General stock trading "truths"

Waaaaaaaaay to many to detail here unless U really want me to. Heheh - i need time to compile the name of the books and the ideas/methodologies presented

This post has been edited by wongmunkeong: Aug 30 2011, 01:58 PM

Bro Khinfai, sorry to hear you're another "victim".

FYI - there's NO SUCH THING as risk-free investments, especially equity funds. The base vehicle of equity funds are STOCKS. If the base are made of stocks, even though diversified, they'll fluctuate like a basket of stocks - think KLCI Index fluctuation or worse.

Bottomline - you're the ONLY person that can ask the bank people or the fund house customer service how much U made/lost - in total and in per annum basis. Open eyes wide wide and dont be so naive yar - learn from this, thus it's still not a "total lost" per se.

On a brighter note, i've not seen a Malaysian mutual fund going to zero
Only issue now is how much profit or lost - from my understanding, if U bought in 2 years ago, ie. 2009, hey - U should be profiting even in this current depressed market. However, if it's a lousily managed equity fund.... er.. heheh.

Touch wood touch wood - it MAY BE a BOND FUND U bought into, and not an equity fund. IF SO, U should be getting about 5%pa to 6%pa at least, if U bought in in 2009.

Please note - mutual funds, be it equity, bond or balanced, are not "bad" per se. U just have to know what U are buying, why U are buying, have entrie & exits planned, k?

This post has been edited by wongmunkeong: Sep 1 2011, 12:51 PM

Ah - a fellow techie
Bro - dont worry, PROPER investing has methodologies to it, just like research, analysis, design and development. Once developed, deploy, track & tweak / minor upgrades .

If U wish to learn investing (not trading - trading's anothe whole different kettle of fish), look into these areas in sequence:
1. Asset Allocation
2. Stocks, Bonds, REITs/Properties
3. Mutual Funds / Unit Trusts, Equity Funds Vs Bond Funds, Domestic Vs Local Funds

Methodologies / Approaches
4. Dollar Cost Averaging
5. Value Cost Averaging
6. TwinVest
7. Value investing Vs Growth Investing
8. Trend analysis

That about sums it up in a nutshell.
In addition to the about, learn basic money management, AKA budgetting - telling your $ where to go, what to do and for how long . This is the "fuel" and the 8 things above, the "engine" / system.

---

Added on September 1, 2011, 4:00 pmMay i take a stab at this? Please note, just my POV k, no right/wrong yar.

Reducing costs:
Astro - needed? If it's for your retired parents, ok. If it's for U - er.. U got time to watch all those reruns and stuff?
Maxis - whoa, U in the marketing/brand comm/pr/sales line? If not, $250pm is humungous (compared to my $20 to $30pm lar )
Food - this is purely eating out? How about eating in / tah pau from home? FYI - i'm a voracious eater (ie. 2 plates of food for lunch), thus my eating out cost will nearly kill me if i eat out always + the time to eat out (travelling, parking, stress, heat, etc.) is not too fun either.

Investment allocation
FD: Once U've built about 3 mths to 6 mths living expenses, FD is jus to store ammo for investment.
Thus, er.. why the %? Another POV? Can share?

GIA: General Insurance? Or apa ni? Sorry - blur on the 3 letter word
If it's insurances - these aren't investment lar, it's for coverage UNLESS U are a multi-millionaire and using insurance to pass on inheritance without taxes and for credit shielding. If so

CASA: One of the very few four letter words i dont know. Trust me - i swear a lot
What's this ar?

REITs: Bond Funds : Equity Funds
Looks to be 13%: 15% : 10% of your POV

Thus, in pure asset allocation sense, it's:
REITs: 34.21%: Bond Fund: 39.47%: Equity Funds: 26.32%
The above looks quite good by itself.
However, U may want to consider EPF as a type of "bond funds" since its returns & fluctuation is near similar to one.
Thus, if U include your EPF into the "Bond Funds" portion, will your Asset Allocation go totally out of whack based on your personal risk & returns appetite?

This post has been edited by wongmunkeong: Sep 1 2011, 04:00 PM

Just to share, from: http://www.millionairecorner.com/article/h...ome-millionaire
The bolded area is my doing, not ori - just to highlight.

How to Become a Millionaire
ARTICLE | TUE, 04/19/2011 - 11:04

©Spectrem Group 2011
Thousands of books have been written on “How to Become a Millionaire”, some more relevant and interesting than others, but MillionaireCorner.com is taking a research based approach to tell you how other individuals have become Millionaires. In the next few weeks we will be chronicling the stories of some individual Millionaires as well as identifying and explaining the key factors that tend to have the most relevance to ultimately becoming a millionaire.

For every rule, there is an exception. Our goal is to present the research that highlights similarities in attitudes, approaches and investments that apply to a significant percentage of millionaires to allow us to learn from them.

Overall, the following factors apply to a significant portion of millionaires and ultra millionaires:

-More often than not, wealthy households are highly educated. While some Business Owners may have only a college degree, for the most part a graduate school education of some type (i.e. MBA, JD, PhD, etc) has been achieved. Only small portions of the oldest millionaires have only a high school education.
-Almost all millionaires attribute their success to hard work and, indeed, the average hours worked per household increases as wealth levels increase.
-The wealthiest households generally are business owners. Professionals (i.e. doctors, lawyers, etc.) generally cap out at about $15 million while business owners and senior executives exceed those numbers.
-The wealthiest investors have slightly more aggressive risk tolerance than others. They are not the most aggressive but they are generally not overly conservative.
-Wealthy investors generally use professional advisors of various types. The number of advisors and their expertise varies based on wealth level. Additionally, wealthy households often manage a piece of their assets “on their own”.
-Portfolios are well balanced between stocks and bonds, managed accounts and other types of investments, including alternative investments.
-Real estate, especially income producing real estate, continues to be an important part of the overall portfolio.
-Wealthy investors are continually looking to invest in new ideas or businesses. The most successful often invest in a venture related to something they know and understand rather than an unknown idea or concept.

In the next few weeks, Millionaire Corner will discuss each of the above topics in depth and allow you to determine how you compare to some of the wealthiest households. There may be opportunities you have not considered or even a fresh way to look at your portfolio. Perhaps we can assist you in determining whether or not to invest in a crazy idea or to at least take a structured approach to considering various alternatives.

Today there are 13.5 million millionaires. Millionaire Corner would like to increase the number of millionaires and perhaps some of our insights will help you achieve this goal.

G' day fellow forumers. I've updated/made better the batch of Excel worksheets i posted earlier AND added mortgage, personal/car loan interest rate calc, etc.

My apologies for the previous version's EPF forecasting going nuts if certain combination of data was used.

To use, enter your variables in the YELLOW CELLS in the respective spreadsheets.

Note:
a. Use at your own risk
b. Agents and sale flers - please do not use these bulat bulat on your customers. Please learn, modify and make better. I've purposely left them UNPROTECTED.
c. All feedback and constructive criticism is appreciated, NOT b****ing and playing self-appointed policeman without bringing solutions / better ideas to the table.

This post has been edited by wongmunkeong: Sep 3 2011, 07:45 PM


Attached File(s)
 To_Share___Personal_Financial_Planning.zip ( 297.56k ) Number of downloads: 197

Cheers bro Monsta2011

Bwhahah - the way i track my investments may be too detailed (per transaction, even for DCA & TwinVest, and redistributing dividends based on date of transactions & weighted average) for most ppl . You're welcomed to it but i'll definitely need to walk U through on the usage though as the group of worksheets are inter-linked and purpose built.

Good luck with your CUTE exam. Dont worry - sup sup water for investors, just need to mug up on the "history" and technicalities/rules

G' evening folks. As one of our fellow forumers prompted me for an Excel to track net worth and asset allocation earlier, i'm sharing this here with sample data to see if it's useful to U too.

As usual, yellow cells = variables for U to enter.

Note that U can "Copy & Paste" values to column D, E, F, G, etc. as the months go on (assuming U track per month).
Thus, U can then have a historic view of your net worth and can put in more calculations like average & median growth per month ($ & %) and per year ($ & %), and using like 12 months' moving average, U can extrapolate quite accurately for 1 year or 3 years


Please note that the "Allocated $ but not bought in yet"
being placed in the specific "Asset allocated for"
is just my point of view - easier for me to see how much unused $ i have for each specific asset type.
eg.
Cash in Bank C Allocated for REITs / Properties: $15,000 is placed with the "REITs / Properties" segment in "Net Worth" sheet.
However, in the "Asset %" sheet, i've also categorized it as part of "Fixed Income" Held by way of Categorization.
See the spreadsheets to understand better.


Same caveat as my other shared spreadsheets:
a. Use at your own risk
b. Agents and sale flers - please do not use these bulat bulat on your customers. Please learn, modify and make better. I've purposely left them UNPROTECTED.
c. All feedback and constructive criticism is appreciated, NOT b****ing and playing self-appointed policeman without bringing solutions / better ideas to the table.

This post has been edited by wongmunkeong: Sep 4 2011, 08:15 PM


Attached File(s)
 To_Share___Net_Worth___Assets_Tracking.zip ( 15.99k ) Number of downloads: 111