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 Personal financial management, V2

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wongmunkeong
post May 14 2011, 01:42 PM

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QUOTE(mnhma @ May 7 2011, 10:29 PM)
Well, i think i'm a bit late for my future planning. At age 26, no savings at all, quit my job on last Sept and gonna work again starting next monday with RM2k salary. And i have to travel far from home to Cyberjaya daily. Am single, not staying with family (renting), work Mon - Fri, 8.30 am - 5.30pm

EPF: 220
Rental: 250
Car: 450
Toll MEX Highway - RM3 return x 22 days working = 70
Phone: 30
Petrol: RM200 - RM250 (I'm uncertain of this)
Daily Meal - RM450 (please teach me how to set budget RM300 per month)
Education Loan: RM50

Balance only RM230. sad.gif
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Hi MNHMA,

at 26 & U r looking into Personal Financial Management = you'll be doing more than alright as U grow rclxms.gif

Heck, you've got balance of RM230 monthly! Most of the youngsters i know (yeah - i'm soon 40) have a negative amount spending via credit card (with owed monthly uncleared), mostly on lifeSTYLE, instead of LIFEstyle biggrin.gif

Just know that a great tree grows from but a seed. U need to LEARN $ mgt / risk mgt and investment vehicles + how to leverage on your EPF / Cash / Knowledge & Skill. It's actually kind of a grand plan that we start with little and learn from there. If we had tons, we'll never learn OR lose more while beginning our learning sweat.gif

Learning = preparing yourself for opportunities
Saving = preparing your ammunition for those opportunities
Multiply those and you're on a sure fire way to your goals & targets.
wongmunkeong
post May 16 2011, 06:37 AM

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QUOTE(stupidbump @ May 15 2011, 11:46 PM)
Bro, are you sure at age 26 and only starting to look into Personal Financial Management is alright?
I am 27 and my child is due soon in another 3 months.
Total combined income of me+wife is around 6.5k with 30% savings monthly, excluding annual bonuses and incentives.
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Bro (i refuse to call U St****Bump tongue.gif ), yes i'm sure.

Hey, yr partner & U doing 30% savings is GREAT! Excluding annual bonuses & incentives too - whoa notworthy.gif
If U do a spreadsheet on:
30% net salary savings (i "ass u me" U save the bulk of yr bonuses and incentives, not use it to cover spending), thus spend 70% only
AND 8%pa to 10%pa returns on that 30% net savings
U'll see that in about 12 to 14 years time your returns from your grown savings --> investment --> investment cycle will cover your 70% expenditure.

This is a simple calc - assuming no inflation. However if U add in inflation, it'll be a few more years. Hey - U being financially free or with much more options in about 12 years means (27+12) = 39 years old! U tell me who doesn't want that? Even if U factor in inflation, U will definitely be in good shape BEFORE forced retirement. BTW, all these are EXCLUDING your employer's + your EPF savings as well. Good or good? icon_idea.gif

If U want to have the spreadsheet, drop me an email / pm on how to send U (or post here? unsure how to do so).
I've also other spreadsheets like:
a. calculating how much U need by retirement, based on your current expenses pa (assuming this is the lifestyle U want), factoring in inflation and expected total average investment returns pa
b. net worth tracking
c. EPF tracking and extrapolation, broken down to A/C1 & A/C2 & even leveraging a/c1 for mutual fund investments. Has manipulatable variables like expected bonuses pa, expected salary increase pa, expected % from EPF pa, expected % from Mutual Funds pa, expected costs of Mutual Funds pa, expected entry costs of Mutual Funds pa.
Er.. too many to list here - even statistical comparisons of DCA vs VCA vs combination of both, statistical stuff on EPF, BLR, KLSE, Public Mutual's funds financial ratios, etc.

FYI - I'm a nut in "being as sure as possible" by doing statistical & financial calculations brows.gif - what to do, i'm a working ant not a bizman, thus need to ensure $ work harder than me + some sort of assurance i'm on the right track. Heck, i've not met a person as crazy as me as to have a will + list of assets/insurances & how to get to them + how to manipulate them to live on them forever (assuming spending about $2K pm lar) laugh.gif

Ah - found out i can share via GoogleDocs.
My usual = YELLOW CELLS are variables that U can manipulate
Savings: https://spreadsheets.google.com/ccc?key=0Aq...uthkey=CPz7k4gG
U can go there, FILE | SAVE AS > EXCEL and manipulate it from there

Hm.. can anyone tell me how to LOCK / PROTECT the cells in GoogleDoc while enabling a few cells to me manipulate-able? Worry JoePublic changes the formulas and others get wrong results sweat.gif

This post has been edited by wongmunkeong: May 16 2011, 08:19 AM
wongmunkeong
post May 16 2011, 01:07 PM

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QUOTE(debbieyss @ May 16 2011, 11:48 AM)
Read through your excel file.

In fact I have calculated the way that you do, but I only find this formula quite insecure, and it would be very tiring. 20 years later, no doubt you can save up RM500K or so, but don't forget this hasn't included the inflation, and your medical fee when you are old. If you have children, where do you want your children go for education? If you are staying with parents, is the house under your name in future? Or you got to buy a new house or second-hand house? If you are buying, I don't think the RM500K is enough for retirement.

That's why I said, the conventional saving plan (save up certain percent monthly from young), may not enough for your retirement.
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Hi DebbieYSS. This spreadsheet is a "simple" version, for people "toe-ing" into the idea of saving XX% of net pay.

Much more in-depth version also ada - taking into account of inflation and one version, even taking into account of segregating $ into "pots" , retirement pot + child education pot. I'll add it to the google docs later with the rest of the Excels /PowerPoints U asked about in another thread/topic tongue.gif. My only worry is most people (unless statistically & financially literate) will be overwhelmed. I'll try it out later and see if anyone curses wub.gif

As for home, i'm in one and still paying off. Note that the mortgage goes into my necessities (50% of net pay).
Thus, the "problem" i find with most buyers = they'll buy the biggest house they can afford now (i did the same thing last time and nearly killed me). A house is a BLACK HOLE OF $ sucking evil UNLESS U can rent it out well. Heck, worse still, the bigger and better location it is, the more services cost (like repairs, maintenance & renovation). Dont believe me? U go try asking the same contractor to do the same thing at SS3 semi-Ds VS Puchong Terrace.

Now, i'm happily in a house with a mortgage less than 20% of my net salary.
Before U think i'm making 10s of thousands, let me just say i earn less than $8K pm ok. High? maybe higher than some BUT definitely lower than most high fliers. "One Mountain got One Mountain bigger" tongue.gif
With the mortgage less than 20% of my net pay, everything else fell into place + to make it EVEN easier on me, i rented out 2 of my rooms to friends or friends' friend. Woohoo!

Ooo did i mention i'm driving a 19 to 20 yr old Wira? In good condition (no black smoke, good tyres & brakes, can run 175km/h UPHILL at NKVE) but just old. Hhehe - it's a choice, my girl's education & my financial security comes first, then only a changgih house (personal use), then a changgih car (if ever - actually last on my list) rolleyes.gif

This post has been edited by wongmunkeong: May 16 2011, 01:09 PM
wongmunkeong
post May 16 2011, 08:30 PM

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QUOTE(debbieyss @ May 16 2011, 01:11 PM)
wongmunkeong, ok thanks.

I think you can straight away attach the file here, no need to upload your file to Google one... wink.gif

Look forward to download your excel file.
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DebbieYSS - I must be blind biggrin.gif, i missed the "Attachment" thinggy in the reply function

Anyway, attached is the ZIP file - Excels + PowerPoint. Please note that these are just some of my personal approaches and calcs - works great for me (in addition to tracking my net worth + Investments monthly). Your mileage may vary - do throw in some ideas that i may better them.

I've not yet had the time to put in the NetWorth & Investment tracking - way too many links and automation to remove & yet be useful heheh.
My Excels are reading direct from Web for Prudential & PM mutual funds + exported CSVs from my online stock market webclient. May not be worth while for most people - i track by PER TRANSACTION and even distribute dividends to EACH transaction that generated the dividends, to get as correct as possible CAGR / PA net profits / losses.

Ooo U may also be interested in this - i shared another ZIP (stats) on PM's funds 10yrs, 5yrs, 3yrs & 1yr ending 2011 this month, 20101231, 20091231 & 20081231 (just to prove how bad equity funds can be hit during a global crisis). http://forum.lowyat.net/index.php?showtopi...&#entry42394542

To those SALES AGENTS lurking around - please do NOT use my files on your customers. U may use it for yourself, learn then build better ones for your customers.

This post has been edited by wongmunkeong: May 19 2011, 08:03 AM


Attached File(s)
Attached File  Personal_Financial_Planning__PFP__Ideas_and_Calc.zip ( 448.52k ) Number of downloads: 790
wongmunkeong
post May 17 2011, 07:50 PM

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QUOTE(cshong @ May 17 2011, 05:55 PM)
I do hope that some financial experts here can help me with my situation below.

Right now, I am just a student. Left few more months to graduate. Since I am fresh, I expected my monthly salary will be maximum RM2k. Originally, I am ok with that. But, now, cannot. Please see my following situation.

After I graduate and get a job, the first thing I will do is to repair my broken house that damaged thanks to those white ants. Last time, the floor in my uncle's room at upper floor nearly complete falling. RM2k has been spent just for rebuilding the floor of one small room. The upper floor of my house consist of 3 rooms (including my uncle's room) and a large living area. I believe not long after that, same thing will be happened to other rooms and living area at upper floor. A few months ago, I started to feel something wrong with my room's floor. In these few days, it is getting more and more worst. Not only my room. The whole upstairs floor started to be problematic.

So, repair 1 small room's floor = about RM2000, Repair the whole upstairs floor = how much?? Can guess yourself. I assume at least RM10000 has to be spent.

Not only the floor problem. Something is wrong with the upper floor toilet, because of this, there are sign of water coming up from the wall at ground floor. My house's main power switch and a lot of sockets were installed nearby the area where the water is coming out from. If, one day, the water hit the main power switch or just any socket nearby, you can guess what will be happened. We haven't repair the toilet yet because of financial problem. Engineer quoted RM3000 for repairing the toilet.

To protect my family members, my house need to be repaired as soon as possible. RM10000 + RM3000 = RM13000. If my salary is maximum RM2k, minus other necessary expenses, guess how long I need to wait until I am affordable for repairing my house?

I am one of the owners of my house after my grandmother transferred her ownership to me before she passed away. It seems like I have to pay for the repairing cost myself because it seems like my other family members prefer to spend their money on other things rather than contribute in repairing my house.

If my house has no such problem, RM2k salary may be enough.

So, expert, your advices please.
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CSHong - are U the only breadwinner? If so, personally, i think U guys are living in TOO BIG a house - sell it and get into something more manageable.
My apologies for being blunt - Murphy (as in Murphy's Law) will visit U often even if U manage to dodge the bullet this time as a house which is "too big" will eat U alive (from experience)

If U are not the only breadwinner AND the house is fully paid off, U may want to look into refinancing it, use the $ to repair (not renovate). U may want to get 2 to 3 quotations, and if possible, from trustworthy contractors.
wongmunkeong
post May 17 2011, 08:26 PM

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QUOTE(cshong @ May 17 2011, 08:15 PM)
That house exists before I born. I am now 23 years old. So, I guess my house was being built for more than 30 years. I am not the only owners of my house. My uncles are also the owners. I cannot decide to sell it myself.

If we buy a new house, that also need $$$.

And, if we sell this house, we also need to at least repair it first, else who want to buy such a danger house?
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CSHong, I can feel your pains & being boxed in. If the other "owners" refuse to cough up their fair share to repair, then U want to be "the sucker" every time? If so, continue on then.

Yes, U need $ to RENT another house or buy.
Yes, U can SELL the current without repair - there are buyers that are willing to buy fixer uppers, especially those connected with contractors and know they can fix it up with $xxxxx and sell for $yyyyyy.

Sorry to be blunt - if i were in your shoes, and i do have some black sheep uncles and gangster ex-inlaws, i'd sell OR walk-away from the house. Pardon my french but WTF for? Milk me for $ to fix & maintain but all the flers dont chip in. Heck, this may be a blessing in disguise for U & yr loved ones to break away from these bunch. Well, then again, that's just me. Your mileage may vary. U will definitely need to have a long adult discussion with the rest of the "owners" and ppl living with U who are making $.

Pardon me if I'm too blunt - like i said, i feel your pains personally and i hate these kind of "relatives".

This post has been edited by wongmunkeong: May 17 2011, 08:28 PM
wongmunkeong
post May 18 2011, 10:58 AM

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QUOTE(cshong @ May 17 2011, 08:50 PM)
I can't blame them. Because most of them are really poor and one of them is currently having cancer treatment.

The most annoying part is, for the one with high salary - my elder brother whose name is not in the list of owner, he work as doctor, his basic salary is RM3xxx + he also work as part time seller for some medicine products = RM6xxx income per month, just because of he is my brother my mom and I and my uncles let him live with us for free and yet he rather spend his RM6xxx on something else rather than contribute in repairing my house.
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Brother?! sheesh... well, the other option i can see is refinance lor. This doesn't solve the "leeching issue" though ;P AND U will bleed profusely for several years. Unless U work in SG or other countries, freshies max here is about $3K and that maybe tak cukup makan, financing the mortgage, even if U eat bread daily and run/walk to office shocking.gif

Any other bro with ideas? Other than doing nasty stuff to his older bro lar sweat.gif
wongmunkeong
post May 18 2011, 01:19 PM

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QUOTE(vendetta87 @ May 18 2011, 12:30 PM)
Bros, need some insights on how to save/invest my money...almost every month dry....

Salary : 2100 after epf,socso
Rent : rm400
Petrol : rm200
Give parents : rm200
PTPTN : rm200
The rest i spend mostly on food, and entertainment or misc ?
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Bro - your "necessities" are only $1,000 leh. What happened to the other $1,100? The answerto your "how to save/invest" lies in your own Q.
Makan - assuming U eat-in rather than eat out 100% of the time, max $300. Yes - cook & bring food to office my dear if need be. Or do bread. Not 100% of the time lar.

That leaves $800
You're entertainment & miscellaneous budget will then be $800/$2100 = 38% of your net salary. See the answer to your Q on "how to save/invest"?

10% of net salary for fun / feel good is generally good enough. That leaves 28% for savings & investing. That's a great start.
Just a 2 cents opinion.
wongmunkeong
post May 18 2011, 01:46 PM

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QUOTE(vendetta87 @ May 18 2011, 01:22 PM)
hmm.gif sounds viable....but the cooking part susah bro...i wake up at 6 to leave for office, come back at 8-9.....
where to invest 1st ???
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Bro vendetta, i wake-up at 4:40am to excercise, prep for daughter, grandma & dog's breakfast, prep my lunch, prep myself then go go go by 7:10amish brows.gif
Ohh - i zzz early though, about 9:30pm wub.gif Old liao, can't handle 24 to 48 hrs non-zzz

Ok ok back to "business".

May i suggest these ratios (massage it to your own requirements):
50% for necessities (like rental, groceries, clothes -not fun clothes ar tongue.gif )

10% for savings to build buffer fund. Once buffer reaches 6mths or more (you're choice here) of average monthly expenses, pour this amount into investing

10% for savings to invest.
Plan out an Asset Allocation big pix kinda thing first.
No idea? Then just do a simple
34% Equity excluding REITs / exProperties
33% Bonds
33% Properties/REITs
Once U've the big pix plan, then U should filter out what to buy & when to buy these Assets.
Please take a look at the ZIP file i shared earlier on example of Asset Allocation, methodologies, etc. - it's in the PowerPoint file.
http://forum.lowyat.net/topic/1577849/+400 Post #411 i think
Try to do it with a Big Pix (Strategical or Vision)
Then plans to achieve the Big Pix (Tactical)
Then the methods to execute each plan (Operational)
Every ENTRY reasons must have one or more EXIT rules

10% for feel good (charity, boys night out, that changgih Android GingerBread thinggy, fun clothes, fun food, gifting, etc.)

10% for education (pay off your PTPTN using this? or accumulate to further your formal education / street smarts via books/courses)

10% for saving to spend in future big ticket items like hm.. LED TV, new 2nd hand-car, downpayment on a home, etc.


Want something EVEN simpler?
Save 30% of your net salary
Sock away 15% into buffer growing as per above
Sock away 15% into investments
That's it - do whatever U wish with the other 70%

Details on actual investing? whoa.. personally i dont think it can be done here - it takes me like 2hrs to 3hrs to explain the basics of $ mgt, risk mgt, investment vehicles AND investing & trading methodologies. Then again, i may be too long winded wub.gif

This post has been edited by wongmunkeong: May 18 2011, 01:59 PM
wongmunkeong
post May 20 2011, 12:40 PM

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QUOTE(map @ May 20 2011, 11:56 AM)
Hehe cos I just discussed the numbers with my significant other recently happy.gif i have a shih tzu now, no kids, that's why! hahahaha for us, 8k is enough to survive but 10k is optimum as buffer.

honestly though, i personally feel worried about starting a family with a combined income of 10k. there'll be other expenses overtime too like buying a new car for 50k each person, giving birth and setting up a nursery and equipment is another 10k not yet plus schooling fees and clothes that will increase every year

then again as jeff pointed out, couples are still surviving with less than 10k combined. two things positive things is that (i) u save a lot of u marry somebody! save on food, save on dating and save on petrol lol (ii) it's always better to suffer and save when you are young rather than to find out later that you're old and broke

if u have someone important to u right now, then that's great smile.gif aim for as much salary as you can get and start saving for your wedding (50k), furniture (40k) for your house and down payment for your house (which is 10% as pointed out). the good news is that you don't have to save for all of this on your own. smile.gif
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Personally, i guess it's down to LIFEstyle or lifeSTYLE desired lor. Kids & pets dont cost THAT much, hey, i'm a father to a little girl (2 legged) and an old boy (4 legged). tongue.gif

RAMBLINGS AHEAD - beware laugh.gif
And if a woman or her family DEMANDS a $50K wedding... <claps hands> NEXT laugh.gif unless one is loaded lar sweat.gif
I thought marriage and partnership is about building something together, not making the hotels + restaurants + tour agencies + photo studios rich, or that's just me wub.gif
Of course there's the other type of "partnership / marriage" lar - woman looks for $ecurity, guy looks for expected services of a W.I.F.E brows.gif, still good as long as both know the reasonings for the partnership/marriage.

This post has been edited by wongmunkeong: May 20 2011, 12:53 PM
wongmunkeong
post May 20 2011, 12:55 PM

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QUOTE(SilverfoX @ May 20 2011, 12:49 PM)
How old are you? And how much is you other half earning?
Saving less than 10% of your salary per month can make things difficult. Try to cut down your expenses, find ways to increase your income. Upgrade yourself or start investing for passive income (i.e. side job or business etc).

A lot of my seniors always tell me that once the baby is here, you will somehow adapt and find ways to survive financially.
Easier said than done. Haha.
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It's kinda easy to adapt smile.gif. By then, U will know your priorities - that sexy HTC DESIRE vXXXX OR milk + diapers + food for family for 2 months. If a father chooses the former.. doh.gif
wongmunkeong
post May 20 2011, 03:08 PM

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QUOTE(map @ May 20 2011, 02:23 PM)
hehe i wouldn't know about that. i'm budgeting for my own wedding, my own retirement, my own investment, my own car, my own bags and jewellery. the only thing i'm sharing the cost with my darling is our house and furniture  smile.gif for me personally, if you expect other people to pay for your own stuff all the time, you'll never be rich smile.gif
i'm also pretty sure weddings don't cost 50k, but i believe that for everything, you should budget higher. if there's extra money and under budget, then the balance masuk pocket lor OHOHOHOH  thumbup.gif
@wongmunkeong, would you mind doing us a favor and help list down how much it costs to

- give birth in private hospital
- monthly maintenance for one baby girl

thank you si fu  wub.gif
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Personally, i'd think getting rich (say $3M?) is easy compared to getting & being wealthy (enough $ & time for the ppl we love & the things we like + healthy as a race horse) tongue.gif

You're surely a pessimistic optimist Map, $50K budget for something U know will be lower? rclxms.gif
BTW, dont be too sure that weddings dont cost $50K or more. One of my cousins did his in JW Merriot.. whoa.. there's a whole lot of zeroes at the back of the bill. Anyways, one man's meat, may be another's poison


NOTE: all at 2006 value of $. Thus please take the $ * (1 + inflation rate%)^5years

Cost for birth in a private hospital? er.. i took the semi-private route at University Hospital $600 pau kah liao
FYI - planned for a Maternity Hospital earlier in Klang BUT saw a very disturbing thing happened and poked around.
Disturbing thing = an ambulance rushed in carrying no one, but left carrying a woman!
Poked around the medical community and found out 2 major pitfalls with private hospitals:
a. Blood availability (in case of problems, need blood transfusion hayaku hayaku)
b. Experienced staff in birthing (private hospitals handles how many births per day VS University Hospital)
Thus for the safety of my then wife (now ex), we changed our plans. Hey, it's safety first for me & mine. The side benefit was the sticker price lor - didn't expect it to be so cheap.

Setup cost for a baby: about $2K at most
crib which can be changed to toddler's bed + mattress $700
bottles, clothes, carryon/off & double up as baby car seat, stroller $1K or less
BTW, we carried her instead of using a stroller most of the time - it's a bloody pain using a stroller + carrying our little girl feels so right (bonding) + good excercise

Monthly maintenance of a baby:
Milk: I went crazy at first and started on dunno what "... Gold". 500mg cost about $70 to $80!
Then after further reading on nutrition - settled on a good nutrition milk and not some supposed super-serum milk $30 to $40 per kg
Thus monthly cost came down to about $100+pm for milk + vitamins/minerals + this/that medicine

Diapers: about $100+
To cut down costs, best to buy daytime diapers (cheaper ones) and nighttime super absorbent ones (expensive but need only 1 & no worries on leakage)

Mother's recuperation therapy & food: $4k to $6k.

The first 3 months was the worse in terms of $ and stress cry.gif
After that, everything stabilized.


Now, my little girl (going to be 5 this year) pm cost about:
Kindie + day care: $720 excluding new term & stuff costs (REAL Kids - quite ok, checked out several including QDees - my girl personally picked REAL Kids laugh.gif ). If INCLUDING new terms & stuff costs, it'll average about $1K.
NOTE - Kindies & day cares are expensive. When she goes to "normal" school (picked a Sekolah Kebangsaan China nearby my place), it wont cost more than $100-$200pm, unless U aim to have yr little one going to International or Private schools.

Food: $100 to $200 tops. My mum & I cook most of the time - only weekends lunch out.

Clothes: no more that $100 pm tops

Toys & stuff (excluding books & exercise stuff): $8 to $10 pm allowance - 50% for saving, 50% for spending. Up to her what she wants to buy tongue.gif

The above is just 1 father's experience. Others may have better ideas / cost control wub.gif

This post has been edited by wongmunkeong: May 20 2011, 03:21 PM
wongmunkeong
post May 21 2011, 06:27 AM

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QUOTE(teehk_tee @ May 21 2011, 03:16 AM)
wmkeong, thanks for your uploaded file on portfolio management.

have you had training/exp in investment advisory before? because it looks like you do.
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TeeHK_Tee, nope, never had CFP or CFA "training" before - read a lot, tested / simulated a lot & thunk (past tense of think? tongue.gif) 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.

Added on May 21, 2011, 6:29 am
QUOTE(SilverfoX @ May 20 2011, 09:16 PM)
Wow, not bad munkeong you still remember all the details. I'm impressed.
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SilverfoX, i can't remember per se - it's all in my spending tracking (Excel). Going foggy blush.gif, thus every income & expenses tracked via Excel.

Added on May 21, 2011, 6:32 am
QUOTE(map @ May 20 2011, 11:40 PM)
Wow... thanks so much, so detailed!

Prep for baby about RM6k
Prep for mom after birth RM6k

After that monthly maintenance for baby about RM300 until she's 5 years old then will be RM1k per month..
Thank you so much, the information is so valuable smile.gif I will keep write it down for future reference! Ahem, I'm a project engineer by profession so we always plan ahead and put safety factors in ma lol

for what it's worth, if that's your baby daughter on your avatar, she's really really cute happy.gif
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Ah! 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) tongue.gif

This post has been edited by wongmunkeong: May 21 2011, 06:39 AM
wongmunkeong
post May 21 2011, 02:45 PM

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QUOTE(kinwing @ May 21 2011, 01:46 PM)
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 = RM2,000 (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 sweat.gif .

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 mad.gif  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 doh.gif .

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 icon_question.gif . Thanks.
*
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 tongue.gif

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 notworthy.gif

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 biggrin.gif.

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. notworthy.gif 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


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wongmunkeong
post May 23 2011, 09:44 AM

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QUOTE(kinwing @ May 22 2011, 11:05 PM)
I am 28. Yup, I am single and no expensive hobby so my living expenses could be low tongue.gif .

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 tongue.gif. 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 tongue.gif
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post May 26 2011, 03:39 PM

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QUOTE(kinwing @ May 26 2011, 03:28 PM)
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 vmad.gif
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)
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post May 28 2011, 02:16 PM

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QUOTE(WTF2008 @ May 27 2011, 11:31 PM)
Hi all experts/sifu,

This thread is amazing and i need advise for my current financial status and more wise planning as well:-

Age 28 now and start savings 2 yrs ago only...

Income
-----------
Net salary = RM 4.3k++
Side income = Rm 500 ++
House rent = rm 600

Expenses
------------
Car = RM 800 (4 yrs more to go)
Insurance = Rm 800++ per year
Petrol = Rm 350++(Travel very far from house to office)
Food = Rm 300++
Entertainment = Rm 200 perhaps , nothin mucn entertainment, mostly is hanging out with fren for drinking or eating nice food
Gym= Rm 129
Phone = Rm 70
Parent = Rm 400 - 600 , depends as if that months got more side income, so give more to parent
CC = Rm 200 free interest becoz in BT and 8 more mths to go

Owning
-----------
Property : Landed house 160k, collect rent mthly rm 600
Mutual Fund: 10k++ (Standing instruction: every mth deduct rm 100 from my account to this fund)
FD: 0
Saving accs : 5k++
Mom EPF: 10k (Invest on my Mum EPF account, higher rate ma..)

Expenses ranging max Rm2500 roughly

So monthly savings Rm2000 roughly

Any way to improve my financial? Regret start savings only last 2 yrs  cry.gif  cry.gif

im thinking to take my UT money since doesnt much improvement, but where i can invest to? Learning and monitoring share investment
but it seems require more money and quite risky for me now since i dont have much savings yet.

Any advise all sifu....?

Thanks in advanced
*
WTF2008 (World Taekwondo Federation? or... brows.gif) I'm not a sifu but may i point out some stuff obvious stuff?

Your average monthly expenses: $2.5K
Your Savings +FD: $5K
I ass-u-me that your mortgage isn't Flexi and that even if it is, U did not paydown extra principal.
Based on the above, U have only 2 months of emergency buffer, not bad and if U grow this further to about 6 months (assuming you're on a single income and your parents needs your economic support), U'd be in great shape fighting off Murphy (from Murphy's Law) when (not if) kaka happens.

Other than that, you're saving about $2K / $4.3K (excluding EPF right?) - 46.51% you're doing very well. I can bet U that if U continue saving & investing at that clip, including EPF, U'd be at least a $3M to 6M net worth before 55. notworthy.gif

Things to watch out for:
a. Over leveraging
b. Back-side itchy (ie. suddenly getting "smart" and changing your savings & investing plan like ROBBING your investments instead of letting them grow or re-allocating them)
c. Women - tongue.gif, i ass-u-me U ain't married yet and are currently focusing on growing your career & assets. Some women are great, some are, hm.. how to put this nicely.. ultra high maintenance. Well, it's your choice - just go with eyes open.
wongmunkeong
post Jun 3 2011, 07:53 AM

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QUOTE(map @ Jun 2 2011, 11:20 PM)
I save for the whole wedding, but doesn't mean that I'll pay for the whole thing geh  blush.gif It's just so in case IF I go all Bridezilla on my fiance, I will be able to do it fairly from my own bank account lol

Boys these days need to have their own savings and buy their own gadgets also ma  rclxms.gif
*
Map, U are truly a thinking & self reliant lady - thinking & acting as a partner to your partner notworthy.gif
wongmunkeong
post Jun 3 2011, 01:52 PM

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QUOTE(+Newbie+ @ Jun 3 2011, 01:30 PM)
wongmunkeong, I'm hoping you could give some advice on your excel stuff. In the file "To share - PFP", spreadsheet "Retirement Plans", cell "C10", what is the rationale for that calculation? Expected Average Returns is for your investments, right? Not your expected expenses. So why not use inflation instead? Is it to ensure you have extra money and it will last in perpetuity?

I really learned some new excel formulas there. Hahaha.
*
Ola +Newbie+. Whoa.. nice pix at your signature, very distracting brows.gif Chasity is a perversion.. Eat veggie, eat veggie tongue.gif

ok - Cell C10 at "Retirements Plan" worksheet - as per snapshot attached, is using
"Effect of 6% Inflation on Item (D) after XX yrs" ie Future Value (FV)
DIVIDED BY
"Expected Average Returns %pa"

"Rationale for the calculation" = in future, inflation will cause the $ needed to be higher than current amount of expected lifestyle.

"Expected Average returns is for your investments, right?". Spot on

I'm a bit unsure on your "So why not use inflation instead? Is it to ensure you have extra money and it will last in perpetuity? "
I dont use inflation because i need to find my total nest egg required by taking amount needed VS expected returns. If i used inflation amount, that gets me..?

The logic is:
a. U know the expected yearly cost required in future
b. U expect X% returns on your total nest egg
c. Calculate the total nest eggs required, based on (b.) to generate (a.) yearly. Thus, U dont eat into your nest egg biggrin.gif


Good? BTW, like i mentioned, it doesnt take into account of inflation AFTER retirement, thus IF one wants to be prudent/safe, U may want to add about 20% on top of the required yearly amount (a.), thus, © also goes up to cover as required. Then SAVE & REINVEST the extras even during retirement. Like that, definitely (unless SHTF) something to give back to the world after one's gone. Good or Good?

This post has been edited by wongmunkeong: Jun 3 2011, 10:17 PM


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wongmunkeong
post Jun 6 2011, 05:23 PM

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QUOTE(Sicarius @ Jun 6 2011, 03:34 PM)
Hi guys,I'm currently 19 and have a stash of cash in the bank. (read:accumulation of 19 years of angpau money and some 'rewards' for academic performance brows.gif ). Is it wise to take 1/3 of it out to lock it in FD for 1 year?I mean all my money now is currently in savings,and as most of you here know,the yield of FD currently is almost 10 times more compared to the yielding of normal savings.  shakehead.gif

My question here is there any extra terms that I have to note for FD?My basic understanding of it is its a lock of the funds for a certain period of time..or is there additional charges or rules ?

thanks in advance cool2.gif
*
Bro, i think U shd just dump them all into a 2 mths or 3 mths FD now, WHILE U learn and plan what to do with yr $ as time goes on.

I'm assuming U dont need to touch these $ ok. If U do, please leave enough in Savings yar.

This post has been edited by wongmunkeong: Jun 6 2011, 05:46 PM
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