Simple: Just keep your money in the bank - look for highest FD rate. Reason: Keep you money safe - to me, that's main priority for a student.

When you are earning and saving more in the future, you can start to invest. But please EDUCATE yourself on investments before you start to invest your hard-earned money.

PLEASE, please - do not "invest" into products that promise higher returns than FD but yet low risk. To me, only the special M'sian Govt Bonds which offers 5% p.a. or ASB have such profile in M'sia.

1) I am not too sure which bank currently offers the highest rate. Maybe there is a thread in LYN on it? You can find the banks' promotions in their respective websites. Generally, FD less than 1 year offering around 2.7% p.a. and 1 year is around 3% p.a. Occasionally, there are special rates for a promotion period (pls note a number of them are tied to unit trusts or other sales gimmick - pls read the FINE PRINT or asterisks...). If the placement amount is not very big, just go for any bank (generally, Msia banks' rates are quite similar) that is most convenient - not worth the hassle or effort to travel far away for banking.

2) Foreigners can buy bonds BUT the minimum amount of a corporate bond in M'sia is prohibitive (too large) for most retail investors. An alternative exposure to bonds is via bonds funds - you have to incur entry + management fees. Too much hassle for a student. Just keep it simple, put the money in savings or FD (for the funds that you do not need for near future). But do learn how to invest young, when you are READY with money in the future (be prepared to pay some "school fees" )

This post has been edited by chabalang: Jan 13 2011, 08:09 PM

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

1) You need to get more information from the bank to work out the effective interest rate and can ask them to show you the calculations (information on their website is not complete). Please take note the phrase: "Enjoy attractive and affordable interest rates from as low as 0.90% per month depending on your loan amount." The lowest possible is around 11.3% p.a. (on a monthly compounded basis) - it's higher than your 10.8% (which is 12 x 0.9%). You also need to know whether the interest rate is calculated upfront or amortized...I know that I sound rather technical but you need to know some finance basics to unravel how banks "disguise" effective interest rates. Anyway, personal unsecured loan is always one of the more expensive forms of financing (like credit card balance financing) offered by banks.

2) As mentioned in a above post - please avoid taking personal loan to renovate. Renovate only if you have the spare cash/$$$ UNLESS the renovation is really important and necessary - if not, you will be burdening yourself unnecessarily.

I think WMK has already answered you well... I want to add a little more. You are NOT AKPK's case yet but heading towards it. The GOOD thing is that you are aware of your problem and seeking advice.

1) Your current, main problem ("unnecessary outflow") is your repayment of (a) personal loan + (b) outstanding credit card...total of RM915 (18% of your nett pay). Guess this is due to "your lifestyle" (by choice) and not due to unforeseen circumstances (correct me if my guess is wrong). You need to "attack" this twin evils of personal loan and credit card - try to repay them off as quickly as possible. Do you know how high the effective interest rates of personal loans and credit cards are....for credit card - normally, it's 18% p.a. (rates vary but still above 10% for non-promotional rate).
First action: repay credit card balance ASAP and always pay off in FULL any credit card balance each month.
Next, changing lifestyle is not easy BUT you need to change if the personal loan/credit card balance were used to support your lifestyle - that's solving the ROOT of the problem.

2) As for selling your VIOS. Please check your outstanding car loan to be settled (early prepayment of car loan will only get interest rebate for the total interest amount payable)...Will you get any money after selling the car AND settling your car loan? Personally, I feel buying a VIOS at your income level is quite a stretch (this is my personal opinion - likely to be not representative). But since you need to drive from Klang to KL to work (return journey of more than an hour), you may want to stick with your VIOS. The mthly payment is RM700 (less than your personal + credit card).

This post has been edited by chabalang: Aug 20 2011, 10:57 PM

Agreed - never invest in something you do not fully understand or "too difficult to understand". You are just so polite as usual to avoid telling him off. I am sure you are smart enough or have sufficient financial knowledge to understand the salient points of va1kyr13's "financial product" (most consumer financial products offered in M'sia are not that complicated).

As for va1kyr13's reply: "well it hard to tell in here cause you will not really understand how it work just by reading the whole stuff." I volunteer to decipher/simplify it for fellow forumers (subject to some time lag since I may not have access to the Net occasionally). I have some experience in structuring financial products in IBs/securities firm and have taught UG/PG students in evaluating new financial products and innovation in the markets (or rather it was an assignment for them to pick new financial products and evaluate them during tutorials).

Anyway, va1kyr13's original post: "Well if anyone here got RM35,000 (sound to much huh?!) to spend in investing, would you be interested if i said you can get 15% - 19% return (sound to good to be true huh?!) annually for 4 - 7 years of investing?" When I read the paragraph, RED FLAGS appear immediately - call it instinct or whatever...

This post has been edited by chabalang: Mar 22 2012, 09:22 PM

RED FLAGS mean "a warning signal" - source: http://www.merriam-webster.com/dictionary/red%20flag
- it's a natural instinct (15%-19% p.a. returns will involve significant RISKS) since I have seen/read enough. Kindly note that I did not say it is not achievable but the RISKS have to be known/evaluated

Please note did I ever mention the word "SCAM" . I notice you are being Overly Defensive.

All I ask for is more information...like what Wongmunkeong did. I just wanted to help out fellow forumers to understand the RISKS, instead of just focusing on the returns. Understanding the RISKS is as important as knowing the potential returns... A lot of investors only look at the upside without evaluating/knowing the downside (some do not even bother or too lazy to assess/know the risks involved).

This post has been edited by chabalang: Aug 10 2012, 10:30 PM

Thank you for your kind invitation. I have to politely decline your offer.

For your personal interest (I presume you are working for the firm), any investment product that promises High returns but Low risks - you really need to evaluate it CAREFULLY, very carefully...(i) are the returns achievable (ii) are the risks understated or are there blind spots?

P.s. You can call me Selfish...if I really know an investment that offers HIGH returns but LOW risks - why I should share it with others. Once too many people in the market knows my High-return but low-risk investment/strategy, market efficiency will neutralize the risk-return payoff (i.e. returns will start to fall and risk will increase)...you may say it is too academic but it is the reality. I am semi-retired but still very much involved in the financial industry - getting paid for doing something I like to do during my free time/retirement.

This post has been edited by chabalang: Mar 23 2012, 02:51 PM

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).

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.

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...

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.

From a financial viewpoint, there is no good reason if the loan is a truly ZERO-interest loan. The $$$ in excess of the minimum can be put to better use (for e.g. - put in fixed deposit to earn some interest).

However, if you find that having a loan/debt is like a "monkey on the back" - then paying more than minimum to settle the debt earlier will enable some form of relief (it's an intangible benefit that cannot be measured in dollars & cents).

This post has been edited by chabalang: Mar 27 2012, 09:52 PM

Hehe , a little bit of dreaming is good for creativity and help to relieve stress (but excessive dreaming detaches one from reality).

Back to the part on debt: I am one of those AVERSE to debt (maybe, it has to do with my upbringing - my parents do not like to owe others $$$). My family and I buy all our cars with cash (just make sure - can be accountable to LHDN). My housing/property flexi-loans have near zero balance (functioning like an overdraft). I know that I am SILLY not use to such CHEAP financing (BLR-2.4%) to invest in something that can generate >5% p.a. BUT I can sleep better knowing that I don't owe anyone $$$. I know that I will never be very rich because I do not know how (or rather choose not) to use other people's money to make MORE $$$.

Back the original question on INTEREST-FREE study loan: there is no good financial justification to pay more than the minimum - unless it is for the "debt-free" status. I am not that familiar with study loan (since I have not taken one) - not sure on whether there are special clauses or whatever.

1) Just pay minimum sum since it is a JPA loan - it is a form of benefit from the Govt. Just enjoy the Govt. subsidy.

2) Too bad, there is no tax relief for education loan repayment in Malaysia (only for housing loan interest expense for SPA signed during 9 Mar 2009 to 31 Dec 2010)

3) Prolonged deflation in Malaysia is highly unlikely in the foreseeable future (occasional short-term deflation is possible if the local economy takes a dive along with "global recession"). Why? (i) M'sia is still on a growth path + relatively young demographics -> income growth and increasing household consumption will push prices higher (ii) increasing middle class in large economies such as China and India will ensure continued demand for commodities (yes, commodities prices can swing wildly in the short-run with all the "hot money" and financial derivatives BUT the underlying demand will be intact) - over the long-run, commodities prices are more likely to be on upward trend rather than downwards (iii) a number of developed countries (e.g. US and EU) are so indebted - do you think they will want inflation or deflation? With inflation and weaker currencies, they are repaying "Cheaper" loans.

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Added on March 28, 2012, 2:44 pm

Hi SlowCiken, I was waiting for Mr Wong to reply to you since he does a better job than me but it has been three days. I can only give my opinion on a "macro" perspective. I presume your stated income of 4k is Net household income (correct me if I am wrong). Your goal is to afford a house of 350-400k in 4 years' time with a deposit of 50k.

1) Your current position: FD of 10k. Assume no liability/debt? How did you get dividen of 3.2 (you meant interest rate of 3.2% p.a.)?

2) You need to save another 40k over four years. At your current saving rate of 500/mthly, you get only 24,000 (savings) + 10,000 (current FD) = 34,000 principal (in 4 years' time) + around 2,600 interest on savings (depending on i/r and savings interval) = 36,600. You need to increase your monthly savings to around 750 an (increase of 250 from current savings of 500/mthly) to achieve 50k in 4 years.

3) How to increase savings? Two points: (i) 400 for utilities/telco seemed to be high to me. You may want to squeeze 50-100 from it. Use prepaid, cut Astro to a cheaper package (ii) I am not sure I will be accused of evil or not - being filial is good but you may want to cut your allowance to parents. If you are not willing to or unable to, you have to squeeze another 200 from some other expenses OR increase your income by the amount. The trick is to minimize the "pain" or impact on your daily lifestyle but you still have to prioritize what is necessary and what is nice to have but do without it.

P.s. if you are a Bumi, have you considered putting your $$$ into ASB rather than FD? ASB is a good alternative to consider if you qualify for it.


This post has been edited by chabalang: Mar 28 2012, 02:44 PM

Even though I am not in your age range, I can empathize with the "property/home worries" of the younger generation. While some properties in Klang Valley have "shot up" significantly since 2009, there are still quite a fair bit of affordable ones (mainly high-rise ones) - I will not elaborate more since there is an active property thread in LYN.

All I wanted to tell you is that don't worry about missing the boat (planning ahead is good but unnecessary worry will only zap your energy)... you are still young - focus on your career and increase your earning capacity.

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Added on March 29, 2012, 11:05 pmHi Xander, while your net income is quite good for your age, your expenditure (Ezy payment part) NEEDS some "work out"(or rather your spending habit).

1) Personally, I Hate Ezy Payment (even those with ZERO interest rate) - call me a dumb-dumb or whatever. For consumer items, I only buy when I afford it upfront (i.e. can pay with CC but have the ready $$$ to pay it off immediately in the next month)

2) You bought a property - what is the monthly payment?

3) Advice for someone who wants to improve his financial position: BUY only things that you can really afford. Keeping up with the Joneses is expensive and bad for your financial health. It takes quite a fair bit of willpower to ignore the crowd and other people's perception of you. Kindly note that I am not telling you to be stingy or live like a miser - need to balance spending and saving for the future.

This post has been edited by chabalang: Apr 1 2012, 05:32 PM

Hi iStevei, by the virtue that you have taken the first step to evaluate your financial health/position is already a good start to "financial freedom". I am certain if you have the determination and discipline, you CAN ACHIEVE financial freedom. I hope I am not "overwhelming" this thread (I would prefer Mr Wong to reply since he has been doing a good job, and I would rather read than write).

Your income/expenditure - you did not mention your age (assuming that you are in the twenties):
1) Some of your expenses seemed to be low (e.g. food - only RM100/mthly). Car maintenance/toiletries/gifts/etc.? I presume you are staying with your parents?
2) A big chunk of your expenditure is going to car expenses/loan and entertainment (998 out of 1458 or 68.4%) - to me, that's quite a large % for discretionary expenses. I do not like to recommend what are appropriate expenses as I am on the "thrifty side"and am trying my best not to impose my "lifestyle choice"on others.
3) Your saving rate of >30% is commendable and certainly put you on the right track.

Your financial position:
Asset/liability looks ok with me (as usual, I don't comment on personal asset allocation without knowing the person). You are right to consider putting your savings to work harder (make sure you have set aside your “rainy day” funds first)- shares or properties are two of the most common form of investments.

I will comment more on shares (or equity) since I am more familiar with it.


This post has been edited by chabalang: Apr 1 2012, 10:18 PM

1) Depending on your work/job, I generally encourage younger generation to explore the world. I have worked overseas for a number of years but back in M'sia for family reasons. So why not, if you can get a good job with a good pay in SG? Just a couple of points: (i) housing is getting more expensive in SG - a simple HDB room rental will cost around 700-800/mthly and (ii) you need to be "tough" - staying far away from your family and friends. You only have a car and study loan outstanding - it should not prevent you from seeking greener pasture. There is an active thread on Working in Singapore in LYN (already many versions).

2) Don't quite understand "Seem like need to pay twice more than car loan which means my budget gonna be tighter" - you meant repaying car loan early/faster? In M'sia, as far as I know - you will get only some (a little) rebate for prepayment of car loan (NB: I am not familiar with car loans) - there are some threads discussing on car loan early settlement in LYN. Generally, it is rather Punitive to settle car loan early in M'sia but that is going to change from July 2012 - the implementation is yet to be seen (have to wait until July 2012 to see how the banks will implement BNM's guidelines).
http://www.bankinginfo.com.my/04_help_and_...ntArticleID=111

3) Being a saver is a first step to investing. If no savings, what to invest? Investing is to yield higher returns than FD rates (in recent years, savers have been getting the "short-end of the stick" - we have been getting Negative real interest rates (i.e. FD rate lower than inflation rate)). So, investing is to preserve or enhance the purchasing power of your hard-earned money.

My apologies..it was an misinterpretation on my side.

A housing loan instalment of 1k - will only translate to a housing loan of around 200k (i/r: 4.4%, 30-yr loan)
By then, your salary will have Increased - hopefully, more than RM500/mthly.

Hi catfish0001,

I guess no one replied you because you are doing FINE.
Your savings rate of 45% of net income (excluding your ASB loan which is also a form of "forced savings") is impressive.

Although your asset is not diversified at all (all in ASB?), I believe you will diversify once your ASB hit a cap. Personally, I think ASB is one of the best local investment products (in terms of risk-reward profile). You mentioned most money rolled into FD? - good or bad depends (if you do not know HOW to invest, better leave it in FD. If you have gained sufficient knowledge, can try to venture into shares/properties but please start small). I have a fair bit of my asset allocation in liquid assets such as FD (despite the negative real i/r in the recent years) - waiting for opportunities in the market (market downturn/financial crisis are Opportunities for me).

P.s. eventually, you will have to plan to buy a house/property...that will be slightly trickier.

This post has been edited by chabalang: Apr 3 2012, 08:20 PM

Hi catfish0001, there is an active thread on properties in LYN. It's anyone's guess how the M'sia property market will fare in the future. I can see that you are prudent (which is not a bad thing) but just be aware that inflation can erode your purchasing power without you knowing if you only keep your money in the bank. Anyway, you are doing well investing in ASB (so far, the return track record of ASB has been quite impressive).

As for 300k loan, your mthly instalment will be around 1,520 (for a 30-year loan at 4.5% p.a.) or 46% of your current net income - it is quite a stretch. Please note that the current M'sia mortgage rate is relatively low (partly due to developed countries' central bankers keeping the interest rates low to "stimulate" their weak economies ) - there is always a risk of i/r increasing in the future when the economy turns around (although not likely to be in the near future).

( I/R ) 4.0% 4.5% 5.0%
20 yrs 1,818 1,898 1,980
25 yrs 1,584 1,667 1,754
30 yrs 1,432 1,520 1,610

This post has been edited by chabalang: Apr 4 2012, 08:41 PM

WMK has been using rather kind words in his response.

BTW, are you new in the company? If yes, please read the following links:
1) http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=1779

2) http://www.freemalaysiatoday.com/category/...itable-uk-land/

3) http://ctchoolawkl.blogspot.com/2011/01/uk...heme-shock.html

4) http://thestar.com.my/news/story.asp?file=...2723&sec=nation

There are a few other "land banking" companies that invest in overseas...I will not name them.

I think a number of the "seasoned" forumers in this thread are well aware of the above. They are trying their best to convince/prevent fellow forumers from PMing you. This thread is meant to protect and grow fellow forumers' hard-earned $$$. Thank you for your attention.

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Added on April 10, 2012, 10:42 pmHi froz3nnoob, your question is rather open-ended. I am struggling to figure out how to respond to your questions. There is NO easy way (even if I know an easy way, I won't tell you or have to charge you "an arm and a leg" to tell you). You have to educate yourself in basic investment concepts (such as risk-return, different asset types and etc.) and have to KNOW yourself what is suitable.

Why educate yourself first? I have seen numerous cases of "ignorant" or greedy people LOSING their hard-earned money in investments - it's painful for me to see how IGNORANT some people can be (I have volunteered in overseas credit/financial literacy counselling (like AKPK in M'sia)). You have to learn the basics of investing. For example, if someone offers you a low risk - high return investment...you have to ask yourself - is it possible??? In fact, I have seen more HIGH RISK - low return investment/financial products in the market than low risk-low return (like FD).

So long-winded, ah. A couple points on investments from me: (i) know thyself - only invest in something that you can sleep well at night regardless how the investment is doing (health is more impt) (ii) there is no quick, easy way to make fast money (yes, there are very SMART and lucky people - but I am not one of them) - if an investment looks too good to be true, it probably is.

The following article is an okay read for a start (with plenty of good links): http://www.investopedia.com/articles/00/08...p#axzz1reFEBVcj

NB: shares/equities, unit trusts, commodities (like gold & silver) and properties are the more common types of investments.

This post has been edited by chabalang: Aug 10 2012, 10:27 PM

Let me make it clear from the start - I am not "picking a bone with you". I am here to provide fellow forumers more information, and let them think and decide for themselves.

1) "One of the biggest mistake made in this forum...advise people to buy just enough term insurance" - there is NO right or wrong (or which is better/worse) - there are pros and cons associated with (i) buy term and invest the rest (ii) buy life. Different people have different needs. For some people who are savvy with investments - it will be better for them to buy term insurance. For people who cannot invest properly on their own or need "forced savings", life insurance MAY be more suitable.

2) "Even in their professional exams, insurance is taught to be unimportant" Have you taken CFP or CHFC examinations before? Insurance is a FULL module for CFP certification: http://www.fpam.org.my/fpam/certification-...ation-syllabus/. The Risk Management and Insurance Planning syllabus cover: http://www.fpam.org.my/fpam/wp-content/upl...-2010-FINAL.pdf

3) This use of "Can any advisers here tell me when is their exact time to leave this world ?" and "may receive a call from God along the journey." - sounds Familiar. I think one of my colleagues got a cold call from an insurance agent/(aka financial planner) talking on "contract with God and etc." - my colleague gave the agent a GOOD scolding and the few of us at his office were

4) I AGREED with "your financing planning is geared towards the goals of that particular individual per se, and not for own self interest of the adviser . Often Goals needed to be motivated to be achieved, and not setting many roadblocks to kill them." It's human nature to "take care of self-interest" - I do not blame advisers for trying to earn more commissions/fees but I believe consumers can be MORE EDUCATED in their financial planning/literacy to know/evaluate what is suitable or not for themselves.

5) For myself, currently I only have medical insurance (so far, I have only taken a short-duration term insurance to cover my first mortgage loan in my younger days - just in case, I am gone and my wife may have not enough $$ to pay off the loan). It's a long and complicated story how one should handle risk management/insurance planning (my family and I believe in self-insurance - I make sure my family will have enough $$$ if I am gone). Nevertheless, what is applicable for me may not be suitable for others. There is still a NEED for life insurance for people who do not know or do not want to spend time/effort to manage/invest their own money and need to have "forced savings". What I do not like about life insurance is the commission/fees/charges earned by the agents/insurance companies. Yes, insurance companies/agents hate me for that.

The debate on "Buy Term and invest the rest" vs "Life insurance" will continue to linger...(this post is getting too long)

P.s. the following links are written by someone who is well-versed in insurance (he was CEO of one of S'pore largest insurance coy for 30 years). Yes, he is trying to sell his book but his blog has valuable info on insurance in Singapore (M'sia is not that diff.) - caveat: he can be controversial at times.

http://tankinlian.com/admin/file.aspx?id=170
http://tankinlian.com/admin/file.aspx?id=589

This post has been edited by chabalang: Aug 10 2012, 10:27 PM