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 Personal financial management, V2

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BabySteps
post Mar 24 2012, 04:29 PM

Getting Started
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Junior Member
66 posts

Joined: Feb 2012
Age : 24


Income in RM:
Monthly Salary = 2700 after all deduction
Variable Side Income = 0 - 600

Expenses in RM:
Food = 600
Transport = 50 (Touch n Go & Parking)
Entertainment = 100
Phone Bills = 100
Parents = 300
Groceries = 100

Monthly saving into savings acc: 700 (Pay yourself first)

Asset
Saving = 6,000
Fixed Deposit = 30,000
Unit Trust = 2,000 (AmDynamic Bond)

Liability
PTPTN = 20,000 (have not start paying)

Have just started working ard Sep 2011.
Usually the remaining of the salary will be deposit into saving acc on top of the monthly 700 or spend on feel good.

Planning to buy a house by 26 yrs old. Ard 300k-400k.
Hoping to diversify and also put more of my savings into investment.
Any advice here?


This post has been edited by BabySteps: Mar 24 2012, 04:33 PM
BabySteps
post Mar 29 2012, 08:05 PM

Getting Started
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Junior Member
66 posts

Joined: Feb 2012
QUOTE(chabalang @ Mar 26 2012, 04:41 PM)
» Click to show Spoiler - click again to hide... «


Hi BabySteps, since no one responded (except a "potential" sales reply) after two days, I will give it a try.

i) Overall - you are doing Well. Saving 26% of your net income is certainly a good start. Why don't you slowly bump up the % savings to 30+% more consistently? (since you have some spare change after your expenditure, "forced savings" + feel good spend).
Sure will keep increasing the savings till I have gam gam enough to spend.

ii) A couple of your expenditure items are on the low side...you indicated transport expense of RM50/mthly (it is for weekend use? what about insurance/maintenance expenses?) - why I bring this up is that expenses are commonly understated in financial planning.
Transport are actually claimable so it's quite low. Then insurance vice, i've a ing card from company and a hospitalization coverage sponsored by parents.

iii) Your asset allocation is skewed towards "safety"/ comfort zone. I normally hesitate to give a recommended asset allocation because it has to be tailored to each person's personality (e.g. risk-return profile), time horizon, needs, etc. Since you have a decent amount of $$$ in your FD (above "emergency fund") , you may want to consider investing in equity unit trust/shares. BUT WAIT, please go and educate/learn more on investing before putting your hard-earned money to work. Start small so that the 'tuition fees' will be less...
Just started with the bond fund. Still in the process of reading n learning b4 I start putting more money into it.

iv) As for your plan to buy a house in 2 years' time - it depends on your forward earnings ability and mortgage rate/policy in 2 years' time. From your current position and normal trajectory forecast, you should be able to afford 300k house (assumption: 80%, 30 years loan with i/r of 4.5% p.a.)...400k will be a stretch (sorry, no calculations or spreadsheet like Mr Wong - my numbers are primitive back of envelope calculation but it should be okay). That is assuming that you have no other major commitments like CAR loan. BTW, banks are currently assessing bank loans on a net income basis (who knows what will be the loan approval conditions/policies in 2 years' time). I wanted to write more on cars and car loan - a significant financial planning/management problem in M'sia...maybe another time/day to prevent another long posting.
Currently i'm quite worried for this plan as the property price is shooting up like a rocket. Just worry that I could not get a home by 28.
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