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 Personal financial management, V2

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Orange Lunch Box
post Mar 21 2012, 10:51 AM

Casual
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Junior Member
345 posts

Joined: Mar 2012
Hello! Need some guidelines on what to do with my money.

I'm currently making RM1900 to RM2100 a month, depending on amount of OT. Below are my spendings:

Petrol - RM200
Food - RM400
Parking - RM60
Toll - RM176

Total = RM836

Those are the fixed spendings each month, and whatever's left I use for occasional entertainment, which varies around 100-200 each weekends.

I'm currently not in debt, no house/car/education loan. I have 2k+ in savings currently. I have zero knowledge in investments.

Where should I start?
Orange Lunch Box
post Mar 21 2012, 02:06 PM

Casual
***
Junior Member
345 posts

Joined: Mar 2012
QUOTE(wongmunkeong @ Mar 21 2012, 11:14 AM)
Net Income: $1,900 (assumed lower just in case / prudent)
Total Necessities: $836; 44% of net income
Fun/Feel good: $600 (assumes $150 per weekend *4weekends per month); 31.58% of net income
Savings for Buffer & Investing = 100% - (44% +31.58%) = 24.42%

In my simplistic opinion:
1. Nice start - no debts & 24.42% of net income's savings per month
2. Continue to manage your $ as per now OR even better, aim for >=30% savings on net income (excluding EPF)
3. Accumulate $ in Savings A/C, FD and Bonds/Bond funds to cover at least 3 months' average expenses, preferably >=6 months average expenses IF U are the sole breadwinner OR it's hard to move jobs in your area
4. While doing (3.), learn about
a. Asset Allocation and asset classes. From here, U will be able to pickup the basic concepts of risk management VS returns + types of investments' pros/cons/expected returns
b. Value investing, dollar cost averaging, value cost averaging - from here U'd be able to pickup on WHY and HOW to buy/sell/hold
c. Draw up your own cohesive money management + investment plans based on all the above
5. Execute, track, re-plan if necessary (ie. changes in life or yearly/3 years goals not hit)
6. Keep learning - and repeat 4c to 6 biggrin.gif
Thanks! I'll aim for 30% savings on net income!

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