wmkeong, thanks for your uploaded file on portfolio management.

have you had training/exp in investment advisory before? because it looks like you do.

@jeff_ckf:
There is this screenshot people has been posting around about Bumi vs non-bumi installment plan... dunno its real or fake but i really dont think its that much of a difference... SOURCE
i was asking the question, 2 things, ideally and minimum income to support a family... there are family with income below the poverty line but still managed to raise more than 3 kids... but is that advisable or ideal?

@map:
I have a different opinion as you.. i prefer to budget lower.. so that when coming up with a budget, i can squeeze every single cent out that are unnecessary.. even if exceed so wont be exceeding much rather than giving higher budget and have a mentality that its ok to spend since within the budgeted target.. but thats just me..

ya im planning financially with my significant other as well.. she's a bumiputera and im not.. seeing her benefits such as ASB and loans makes me feel so discriminated by the gov..

@wongmunkeong:
agree that marriage is about building a life together.. but since marriage is once in a life thing, so its one of those time you can spend for your other half.. coz i have a perception that every girl has fantasized about their ideal wedding before.. i know it wont be perfect, but at least i want it to be memorable..

and thank you so much for sharing the info.. thats what i am looking for actually.. best is you compile a list out of it..
sometimes small stuff/expenses that we ignores, adds up to be a huge amount..

@SilverfoX:
I am currently 23.. plan to save enough for emergency fund, necessity like house and bills before i start thinking of investment.. the investment plans offered by those insurance companies and banks seems so unprofitable, when taking inflation and other things in mind.. i prefer when i am stable to go for high risk high returns investment.. i really do think should have saving before investing..

TeeHK_Tee, nope, never had CFP or CFA "training" before - read a lot, tested / simulated a lot & thunk (past tense of think? ) a lot about these though. Had to - no one in my circle of friends & family had such knowledge, skills and thoughts, thus DIY to help myself and them + got severely fed-up with being conned silly by (sales) agents of mutual funds, insurance agents (forced savings my foot), mortgage agents (with hidden clauses & costs), etc. There are 1 or 2 very good ones that i can trust though, AFTER i became more learned about financial stuff - not all are bad but about 80% are "sales" oriented only.

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Added on May 21, 2011, 6:29 amSilverfoX, i can't remember per se - it's all in my spending tracking (Excel). Going foggy , thus every income & expenses tracked via Excel.

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Added on May 21, 2011, 6:32 amAh! A fellow engineer (measure twice, cut once). Remember to inject inflation into your calculation too yar - Sum = Principal * (1 + rate of inflation %)^years away from 2006 (2011 for kindie). And yup, my little sunshine girl is on my Avatar - she's so ugly but adorable (cute)

This post has been edited by wongmunkeong: May 21 2011, 06:39 AM

Hi all,

I am 28 this year and working in KL. My monthly salary is RM3.8k and estimated extra RM300 to RM500 sales bonus monthly. So after deducting monthly expenses, tax and EPF, I could save range from RM1.6k to RM2k. I don't have a car and am currently renting a room at PJ, so I am taking LRT go work at KL everyday.

Whereby my personal balance sheet is shown as follow:
Investment Portfolio = RM140k (estimate market price)
1.8 acres land at Ipoh = RM200k (estimate market price)
1 double-detached storey house at Ipoh (share with elder brother) = RM160k (estimate market price)
Savings/Fixed-Deposit in Bank = RM8k
EPF = RM36k
PC Installment = RM1,000 (To settle RM200 per month in another 5 months)

As my mum is retired, so she plan to come to stay with me or my brother in KL (mum and dad are divorced and they are not staying together in Ipoh). Mum also told me as I am not young anymore, she hope I should start to plan to buy a house in Klang Valley. However, I am quite reluctant to do so as I think the price of landed houses in Klang Valley is over-priced and with my peanut salary I feel like not able to afford a house with the price of RM400,000 to RM600,000, and this is not even take into consider of renovation .

However, not to disappoint my mum, I have discussed with my brother and we decided to sell the house at Ipoh. Hope we could then get the proceed of selling at the house and then buy a smaller single storey detached house with a cost range from RM80K to RM100K in Ipoh for my dad to stay. (Dad is currently staying at the house in Ipoh and he gave his consent to us to buy a smaller house in Ipoh for him to stay since my brother and I are currently working in KL and my younger sister is going to complete her college study soon and will start to look for job in KL/PJ, so we seldom back to stay in Ipoh, and it is very difficult for dad to keep taking care a bigger double-storey house). With the extra RM60k，my brother would then try to look a house in KL or PJ with a price within RM300k to RM400k, then he could pay 10% to 20% downpayment, and the remaining amount would be secured via housing mortgage.

However, my mum was very upset when I informed her what we have planned yesterday. She told me I should liquidate my investment portfolio and the land so I could use the proceed to buy a new house, then we won't be worry about to payback mortgage installment every month. Although I have kept telling mum that my investment portfolio has been making a good return of 18% to 20% annually, and this return could be higher than the mortgage rate. But mum then questioned how high the return of the portfolio could have if compare to the return of owing a house, as she is in the view that price of a house could appreciate much higher than any investment tool. I can't answer my mum at that moment as I don't know what is mortgage rate currently .

In view of this, I would like to seek for your opinion that what is the housing mortgage rate currently if my brother is going to take a mortgage loan of RM340k to RM240k for 20 years, and how much he needs to pay the installment monthly? And is that possible for me to own a landed house in KL/PJ with a budget within RM400k? And I also aware that I can take out some money from EPF to buy house, so how many I could withdraw from my EPF account with the amount of RM36k? This is the 1st time I want to buy a house in KL/PJ, and I don't have any idea of how to get an affordable house in this area, so I need your advice . Thanks.

This post has been edited by kinwing: May 21 2011, 03:11 PM

Hey KinWing. Whoa.. looks a bit complicated, i'll take a stab at this but please-be-kind-to-me for some of my personal biases ar

First off, you're 28 this year living in KL with a monthly salary of RM4.1K to RM4.3K AND can save RM1.6K to RM2K monthly excluding EPF savings, that's about 45%+/- savings & investing. Dude - i wish my little girl can save as much % of monthly net salary as U when she grows up

Your Savings / Fixed Deposit of $8K - seems like your buffer is about 3 to 4 months' average expenses right? I'm "ass u me-ing" based on your monthly salary VS monthly savings & investing. If i were U, i'd grow the buffer to >= 6 months' average expenses first BEFORE buying a house/apartment.
Reason: Murphy (as in Murphy's Law) loves home owners, especially homes which may eat its owners alive. In addition, the more "stuff" U own, the more maintenance cost and possible "bad things" happening that cost $ to fix.

Assuming you've no other debts, especially credit card debts, other than the PC, U are more than good to go for a home. Since i do not know your bro's net income & monthly expenses, i'll just put in some general guidelines here. If U or him are OK to share more details, then i guess fellow forummers can be more detailed in feedback .

1. A loan of $340K with no MRTA for 20 years at 6%pa will attract about $2,435.90 pm mortgage
If U want to see other variables ($340K to $240K, with MRTA or without, 30yrs instead of 20yrs, 5% fixed term loan), please do play with the attached ZIP file (excel is inside - monkey around with the yellow cells please)

2. EPF
U can take out from EPF 4 ways
i. For downpayment
ii. For monthly repayment (which U don't have to use to pay down your loan IF U have better options with it)
iii. For yearly repayment (this is FORCED into your loan account - thus guess which i'm doing? heheh)
iv. For helping spouse / bro / sis / parents pay down loan
I've done all 4 of the above before hhehe (not rich mar, thus must be smarter at leveraging on whatever i have)
For more details & updated info, pls do drop by to www.kwsp.gov.my

3. Rules of Thumb
a. Pay at least 20% downpayment
b. Ensure the monthly mortgage payment is LESS THAN 20% of your monthly net salary
c. Renovations? First things first - think of safety & security first. Then, next = electricity savings & cooling / heat shielding & removal
d. A home is NOT an investment - it's a money sucking black hole... UNLESS U rent out some rooms and be a stay-in landlord ;P. Thus, don't "buy the biggest U can afford" unless U are into pain (and whipping?!).
e. Location is more important (personal opinion) than size. However, having said that - nearness to your current work place should not be a determining factor. Perhaps nearness to LRT and stuff would be a better idea as work/jobs change as time goes on.

Er.. that's about it. Good luck with your search & plans. And KimWing, i'm very sure BOTH your parents are very very proud of U and the way you have been managing and growing your assets. U may want to humour yr mum but if U know better, please don't. Sometimes, they know better, sometimes we do. Cool?

This post has been edited by wongmunkeong: May 21 2011, 02:53 PM


Attached File(s)
 Amortization.zip ( 69.27k ) Number of downloads: 88

hi munkeong,

I am more confident in economic and company analysis when I am doing research for my portfolio, but I just not interested in properties investment and thus I have no much idea of knowing where to get the relevant information of buying an ideal house. Thanks for your information on the housing mortgage.

Looks like taking the installment for 340k mortgage with 6% for 20 years does cut into the pocket by more than RM2.4k per month. So I have to look for a cheaper department instead of landed house so to borrow less, or extend the repayment period from 20 years to 30 years:(.

Just do some simple calculation by assuming that my brother buys a house and will pay RM2.4k per month, so after deducting the saving of rental of RM700, there is still a cash outflow of RM1.7k per month or RM20,400 per year, which is almost my whole year savings. And my elder brother is earning less than what I am earning, so I don't see the point of taking 340k morgage for 20 years. Furthermore, I don't agree to my mum's thinking that buying landed house is an investment as it will appreciate in price more than other investment tools. Even if the price of the house has increased, are we willing to sell the house and move to a smaller house instead? Buying our own house has never been considered as an investment choice to begin with in my view, as I know I might end up putting in a lot of money for renovation which could cause me to dispose the house in losses in future.

I have made up my mind, I told mum that either we buy a cheaper apartment instead of landed house, or we wait the landed houses' price to drop (my view is that house prices in Klang-Valley are at least in the stage of bubblet, if not bubble), or I have my salary to double in the next few years, or I need to roll my investment portfolio to a bigger size in next 5 years before consider to own a house in Klang Valley. I just cant kill the "golden goose" by liquidating my investment for the sake of the "sense of security for not to worry to pay monthly mortgage installment", just like my stubborness not to own a car unless necassary for work. Owning a house at a very young age involves a big chunk of opportunity cost, this is what makes me to stand firm my point when talked to mum.

Regarding the savings part, assuming I am unemployed and will back to stay at Ipoh. My monthly expenses in Ipoh was less than RM1.3k when I was full-time studying for 2 years from 2008 to 2010. Without committing to any additional liabilities since start to work for 8 months from last year October, thus I can confidently assume that RM8k of savings is more than enough for me to survive in Ipoh for half-year. Of course, it would be different story if I take up mortgage loan

This post has been edited by kinwing: May 21 2011, 07:01 PM

Hi kinweng,

What investment portfolio gives 18% return? Based on purchase cost maybe?

Hi groggy,

I commenced to invest when I was 21. The first 2 years return was not that great, but gradually I come to learn an effective way, in my opinion, of making sustainable return by applying value investing. I invest in equity market and hold my portfolio disciplinarily, buy at very cheap price during bear market and sell at a very good price during bull period. Maybe my capital is small and do not have much impact to the market whever I did the trading, so I am able to take the advantage of irrational market by applying value investing and thus making compounded return of 18% to 20% annually for the last 7 years.

For your information, I have bought a company share with a cost of RM1 and hold it for 4 to 5 years till it increased up to RM5, in another case I bought another company for 4 years at RM2.90 before it increased up to RM6.3, so it's all about discipline and patient when come to invest. I have never dreamed to make few hundrend percent within short period, I just wanna acheive compounded 15% to 20% return annually so I could double my wealth every 4 to 5 years, as simple as that.

Of course, I have finance background and working in the financial field and these provide me a good fundamental of how to find out a good investment.

This post has been edited by kinwing: May 21 2011, 11:24 PM

u wat ages?

8k half yrs?

no wife?still no child?

I am 28. Yup, I am single and no expensive hobby so my living expenses could be low .

Below is the breakdown of my last year monthly expenses in Ipoh:
Food: RM420
Stremyx: RM100
Phone: RM30
Home Utilities: RM50
Insurance: RM250
Contribution to parents: RM300
Transportation: RM50
Others/miscellaneous: RM100
Total: RM1,300 per month or RM7,800 for 6 months

Wait till U settle down with yr hot woman and start production . Them kids cost a bomb (long run).. but the heart seems to win every time i start my Excel. Irrational feelings vs. Logic - irrational feelings win hands down

My budget of RM8K for 6 months in Ipoh was for single man only lah, as you can see the expenses were so low that not even take into account dating expenses. I just can't imagine the expenses of getting marry with kids, at least not at this moment.

WOW..... no entertainment/shopping/any doodads?

I want go ipoh sell insurance liao....

y u use streamyx rm100?

use p1 rm49

u can save 50% already

@jerry

Entertainment? Yamcha, dota, movie with friends everyweek are not expensive anyway. Don't like go night club, bar message or spa, so entertainment budget is well controlled

By the way, why go Ipoh to sell insurance.

if p1 RM49 is as good as and as fast as streamyx RM100, can consider also, but I am not aware p1 RM49 is that good.

P1? crappo man - hunting signal like baka only
BTW, tested in SJ house, office (2 different floors), production centre, parts centre.... sigh.. and NOT stable, ie. certain fengshui areas & facing, good for awhile until a bird sits next to the fence or a puff of clouds roll in (not cummulus nimbus)

Sorry didn't notice this earlier. Yes, I'm well aware of the screenshot which if I were to take a guess, is circulated by the opposition party for political means but let's not get to that. But like I said, the Bumi deduction does not affect the instalment by that huge an amount.

As to your question on minimum income, it really depends on what kind of children you want to raise up I guess. I know of a low medium income family (to prove that not only rich people raise spoilt kids) who raised a kid who demanded to have the family's only Vios because he needs it to drive to college So if you have a kid like that, then yea, 10k also not enough. Conversely, if your kid knows how money comes about, how much sweat his/her parents used to exchange for it, that kid will turn out to be another different story and that kid will also know how to shoulder some of his/her expenses e.g. via PTPTN if the parents don't have enough to sponsor the education (one of the big ticket items in life).

are you realize with the risk? if you do, i think you must divert the risk to third party

For fellow forumers - the scanned advertisement came out around March 2009 and it's real (it's by Sime Darby Property). Anyone with knows how to calculate monthly instalment will "scratch their head" why the Bumi and Non-Bumi instalments differ so much. Being slightly older than average forumer, I tend to be rather naggy - here's why:

1) The scanned advertisement only shows a small PART of the advertisement. See the double asterisks (**) next to the Monthly Instalment. You need the information at the bottom part of the advertisement (which is NOT scanned) to get the whole picture.

2) The monthly instalment is actually for the 10% downpayment (not the loan amount) over 12 months.

For example, in the first line (if loan 90% - 315,000, means the house price is 350,000).
10% downpayment for Non-bumi is 35,000, monthly instalment is 35,000/12 = 2,916
10% downpayment for Bumi is 35,000 - (discount of 7% of 350,000) = 10,500, monthly instalment is 875
You can try with the second line which is for house price of 500,000.

So lessons:
1) Please see the whole picture (not part of the advertisement that people want you to see)
2) Always read the fine print (such as those with asterisks ***)

This post has been edited by chabalang: May 27 2011, 08:49 PM