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 Personal Financial Management V3, It's all about managing your $$$

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Ramjade
post Dec 15 2015, 09:54 PM

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QUOTE(kelvinftg @ Dec 15 2015, 09:17 PM)
True that Ambank eFD is great for the low 1k for 1 month requirement. Maybbe someone can do the maths? lol. I reckon the difference is not too much or I may be super wrong.
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Well, I did the maths and here is the result. The result on the right shows the amount you get if you place-replace your money for 15months + interest. I stop adding RM3k after April to make the calculations easier.

user posted image

This post has been edited by Ramjade: Dec 15 2015, 09:55 PM
kelvinftg
post Dec 15 2015, 10:11 PM

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QUOTE(Dividend Magic @ Dec 15 2015, 09:28 PM)
Ok as long as you understand that the same house that cost RM500K now will be worth way more in the future. Putting your funds into FD is not an investment in my humble opinion.
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Yea, that's why I am hoping to get some suggestions here with the exception of another property.
Ramjade
post Dec 17 2015, 02:32 PM

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QUOTE(sniperz @ Dec 17 2015, 11:07 AM)
Fund market is the alternatives to FD. Interested, can PM me for nationwide solutions.
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For what when we have FSM. How much is your SC?
sam@bpp
post Dec 21 2015, 03:34 PM

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10 things Yoda would say if he were your financial adviser:
https://www.washingtonpost.com/business/get...blogsandcolumns

May the Financial Force be with you cool2.gif
Dividend Magic
post Dec 21 2015, 06:44 PM

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QUOTE(Ramjade @ Dec 17 2015, 02:32 PM)
For what when we have FSM. How much is your SC?
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Exactly.
If TS is looking to invest in Mutual funds, look no further than Fundsupermart.
Alternative to that would be shares.
pustapazik
post Dec 21 2015, 11:46 PM

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FSM only hv ringgit denominated funds. No hedge funds
bookstore
post Feb 10 2016, 11:41 PM

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Wondering if this thread still active.

Background
Coming into age 30 and planning to get married in 2017.
I foresee my income will decrease 20% (incentive base) this year given the market slow down.
Very low risk appetite with almost 0 financial knowledge.

Monthly Income and Spending
Salary: RM22,000
Rental Income: RM1,100

Saving: RM9,000 - RM10,000
Parent, Siblings: RM3,500
Food, Entertainment, Shopping: RM4,000
Car Related (Fuel, Parking, Maintenance): RM1,200
Phone, Streamyx: RM150
Medical Card: RM250
Life Insurance: RM750
PTPTN: RM300

House Loan 1: RM3,000 installment (own stay)
House Loan 2: RM1,100 installment (rented to couple)
Car: fully paid. 2nd hand national car
Credit Card / Personal Loan: no outstanding

Savings
RM130,000 cash placed in House Loan 2 (flexi loan).
RM100,000 FD

For 2016, I am considering to (but I am worry about $$$ for future wedding, family, kid)
i. Place 10,000 investment in stock market - high dividend stocks
ii. Invest 1 additional sub-sales property < 300,000. Required deposits and miscellaneous of 100,000

Any recommendations or suggestions from sifus?

This post has been edited by bookstore: Feb 11 2016, 01:32 AM
Dividend Magic
post Feb 11 2016, 11:20 AM

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Hey, no this thread isn't dead =)

QUOTE(bookstore @ Feb 10 2016, 11:41 PM)
Wondering if this thread still active.

Background
Coming into age 30 and planning to get married in 2017.
I foresee my income will decrease 20% (incentive base) this year given the market slow down.
Very low risk appetite with almost 0 financial knowledge.

Monthly Income and Spending
Salary: RM22,000
Rental Income: RM1,100

You're in the high income category, even with the estimated 20% decrease in salary. It's time to increase your passive income, I suggest you do this based on the investments you're comfortable with and most knowledgeable in.

Saving: RM9,000 - RM10,000
Parent, Siblings: RM3,500
Food, Entertainment, Shopping: RM4,000
Car Related (Fuel, Parking, Maintenance): RM1,200
Phone, Streamyx: RM150
Medical Card: RM250
Life Insurance: RM750
PTPTN: RM300

You're savings almost 50% every month and that's fantastic, not many people are able to do that, keep it up. I don't see any problems with your other expenses as well, considering you salary, your entertainment expenses of RM4K a month is fine.  I'd suggest you take advantage of the discounts PTPTN are giving and pay off your loan.

House Loan 1: RM3,000 installment (own stay)
House Loan 2: RM1,100 installment (rented to couple)
Car: fully paid. 2nd hand national car
Credit Card / Personal Loan: no outstanding

No problems here either, just consider settling your own home loan asap.

Savings
RM130,000 cash placed in House Loan 2 (flexi loan).
RM100,000 FD

I did a quick calculation and came to a net savings of around RM7K after taking into account your installments. (which isn't bad)
I'd consider your RM230K as your emergency funds and they are sufficient.
This leaves your investment in your 2nd property, which is netting you ZERO. You've not even taken into account the maintenance fees, taxes and misc. costs. Not sure what the value is now if you sold it off though.



For 2016, I am considering to (but I am worry about $$$ for future wedding, family, kid)
i. Place 10,000 investment in stock market - high dividend stocks
ii. Invest 1 additional sub-sales property < 300,000. Required deposits and miscellaneous of 100,000

If you're into stocks, consider reading up on it. After that, with your savings, I'd suggest you do a monthly investment from RM2K to RM5K. Not sure what industry you're working in, but leverage on your expertise if you can.


Any recommendations or suggestions from sifus?
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This post has been edited by Dividend Magic: Feb 11 2016, 11:23 AM
ashx
post Feb 11 2016, 11:35 AM

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Ya from what DM said. I hardly see any problem with your cashflow. How much actually you intend to spend for your wedding?

If you save 10k each month, i think you may want to think to put some to short term FD like max 3 mth coz if wedding is in 12 months you can't get the benefit ya?

Then the rest put into cash management fund for liquidity and better rate than SA. I don't see why you want to go into equity for wedding plan. You willing to take the risk?

But kids fund etc then diff i supposed. That's at least 20-30 horizon. by all means go for investment/stocks.

Take note i'm just a dude who's just realised i need to get my financial in order as well.
bookstore
post Feb 11 2016, 03:20 PM

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@Dividend Magic

What is the healthy level for emergency funds? I.e. putting aside 6 / 8 / 12 months of salary?

Do you think getting 1 additional property (use up RM100,000 of cash as downpayment and miscellaneous) will stretch up my cash level? Or it is better to use the cash to payoff House Loan 1, to reduce bank interest charges?

Thanks.

@ashx

Considering not to have any banquet, as we don't have many relatives. Instead, we are looking at Bali for a small wedding ceremony. At the moment, we are still comparing different packages for the wedding, yet to confirm.

For these emergency funds, what other financial options do we have, besides placing FD in the bank?
At the same time, I am looking for 20 year insurance with high cash value on maturity, to serve as kids education fund. What do you think?
ashx
post Feb 11 2016, 04:32 PM

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ah Bali is nice. Well good luck in budgeting that. 😅

Again I'm no expert, I'm learning along the way. DM is way more knowledgeable.

As for emergency fund, other alternatives is ASB or ASx products.it's about 6% pa.


as for child, depending on your willingness to hands on. I might suggest splitting life/med insurance away from investment link policy.

Get maximum coverage what you deem is fair up till 20 years old maybe? then put the rest to mutual funds. follow exactly which funds the insurance company is investing. walla! you have yourself a diy investment link insurance plan 😅

I wish we had the options like now earlier in my years. we can do our own investment via FSM/eUnit for mutual fund.

do share what you come up with. I'd like to know what you decided

Dividend Magic
post Feb 11 2016, 06:32 PM

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QUOTE(bookstore @ Feb 11 2016, 03:20 PM)
@Dividend Magic

What is the healthy level for emergency funds? I.e. putting aside 6 / 8 / 12 months of salary?

Do you think getting 1 additional property (use up RM100,000 of cash as downpayment and miscellaneous) will stretch up my cash level? Or it is better to use the cash to payoff House Loan 1, to reduce bank interest charges?

Thanks.
Emergency funds I'd say depends on your risk taking habits and age. At 30, you're considered young and not much of a risk taker from what I can tell. So 6 months should be quite enough. However, since you already have about 230K in savings, I'd say use that as your buffer and save up more to invest.

As for you purchasing another property, if you're going to get another one where your mortgage payments will match your rental, I'd say forget it. Wait for better deals to come along, you always want a positive cash flow on your rental property. Instead, purchase high yield stocks, maybe you can consider REITs. You can then compare the returns you get from REITs against actual physical property.
Dividend Magic
post Feb 11 2016, 06:33 PM

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QUOTE(ashx @ Feb 11 2016, 04:32 PM)
ah Bali is nice. Well good luck in budgeting that. 😅

Again I'm no expert, I'm learning along the way. DM is way more knowledgeable.

As for emergency fund, other alternatives is ASB or ASx products.it's about 6% pa.
as for child,  depending on your willingness to hands on. I might suggest splitting life/med insurance away from investment link policy.

Get maximum coverage what you deem is fair up till 20 years old maybe? then put the rest to mutual funds. follow exactly which funds the insurance company is investing. walla! you have yourself a diy investment link insurance plan 😅

I wish we had the options like now earlier in my years. we can do our own investment via FSM/eUnit for mutual fund.

do share what you come up with. I'd like to know what you decided
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I'm also learning my friend heh sweat.gif

Yea TS, do share and update us. What this thread lacks are follow ups and updates.
bookstore
post Feb 12 2016, 01:03 PM

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QUOTE(ashx @ Feb 11 2016, 04:32 PM)
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From what I read on AS1M / ASM - fixed price, potential interest higher than FD, no lock in period. I am asking my banker friend for more information and relevant quotas. It seems to be a good choice to migrate partially of the FD to AS1M /ASM (if there are available quotas).

Separately, my wife-to-be is getting an endowment insurance (no investment link, no medical) which provides RM100k+/- maturity payout for 25 years. Temporally this will serve as kid's education fund. So I can skip this part at the moment.

QUOTE(Dividend Magic @ Feb 11 2016, 06:32 PM)
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I agreed with you regarding the property. There are no positive cashflow from 2nd house at the moment, as rental = mortgage installment. Instead, I am paying RM150+ monthly maintenance fee. Highly likely I will not get 3rd property at the moment, due to uncertain market sentiment and no good property in my mind now. It is better to keep additional cash for coming weddings (as buffer).

I will put aside RM3k per month (allocation of 50% high yield stock / 50% REIT). Once I accumulated RM20k - RM30k in stock market, I will stop , comparing return and review this stock plan.

I would say this is relatively conservative plan, but within my comfort zone. What do you think?

This post has been edited by bookstore: Feb 12 2016, 01:05 PM
langstrasse
post Feb 13 2016, 05:32 PM

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QUOTE(Dividend Magic @ Feb 11 2016, 06:32 PM)
Emergency funds I'd say depends on your risk taking habits and age. At 30, you're considered young and not much of a risk taker from what I can tell. So 6 months should be quite enough. However, since you already have about 230K in savings, I'd say use that as your buffer and save up more to invest.

As for you purchasing another property, if you're going to get another one where your mortgage payments will match your rental, I'd say forget it. Wait for better deals to come along, you always want a positive cash flow on your rental property. Instead, purchase high yield stocks, maybe you can consider REITs. You can then compare the returns you get from REITs against actual physical property.
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Just a follow-up question on this subject : if one already has a sizeable cash or other liquid reserves, would it be advisable to purchase property as a "hedge against inflation" - is this still a valid strategy ?
Dividend Magic
post Feb 13 2016, 05:57 PM

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QUOTE(bookstore @ Feb 12 2016, 01:03 PM)
I agreed with you regarding the property. There are no positive cashflow from 2nd house at the moment, as rental = mortgage installment. Instead, I am paying RM150+ monthly maintenance fee. Highly likely I will not get 3rd property at the moment, due to uncertain market sentiment and no good property in my mind now. It is better to keep additional cash for coming weddings (as buffer).

I will put aside RM3k per month (allocation of 50% high yield stock / 50% REIT). Once I accumulated RM20k - RM30k in stock market, I will stop , comparing return and review this stock plan.

I would say this is relatively conservative plan, but within my comfort zone. What do you think?
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Sounds good, review it quarterly or half yearly. If you keep it up for lets say 10 years, you'll find your portfolio can be a sizeable sum. Aim for RM100K, then RM1 million, you'll be well on your way to retirement then.
Dividend Magic
post Feb 13 2016, 06:09 PM

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QUOTE(langstrasse @ Feb 13 2016, 05:32 PM)
Just a follow-up question on this subject : if one already has a sizeable cash or other liquid reserves, would it be advisable to purchase property as a "hedge against inflation" - is this still a valid strategy ?
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There are many school of thoughts as to what investments are good hedges against inflation. Personally, I find managing and tending to matters relating to property a huge hassle (I own 2 units of low cost apartments). People are drawn to property mostly because of the potential huge capital gain when they sell. But do keep in mind that you're taking a 90% loan for properties most of the time, if people started taking 90% loans for shares, they'd be getting those huge returns as well. Do a simple calculation and find out the ROI when u purchase a property, then compare that to a 6-7% dividend yield of a REIT.

Of course, to each his own and this is only my opinion, there are many successful people out there making their fortune from properties. I'm lazy and prefer to leave the management to professionals ie. REITs.
jrkt
post Feb 29 2016, 02:55 PM

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Hello fellow financial gurus, I need some basic explanation on what is inflation and how will it affect my saving and returns.

Say for example,

Given Inflation rate of 3%, FD rate of 3.85%, return from stock 12% and from public mutual fund return of 8%. Are all these rate taken inflation into account?

1) How do i compute total return. Do I have to deduct the total return by 3%( inflation rate)

I know this seems a rather dumb question to ask and it is definitely not a homework from school. Sorry if the question is confusing because my understanding on this topic is very limited.

Thanks in advance !

T231H
post Feb 29 2016, 04:32 PM

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QUOTE(jrkt @ Feb 29 2016, 02:55 PM)
.... I need some basic explanation on what is inflation and how will it affect my saving and returns.
......
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hmm.gif found this while googling...hope it helps....
What is inflation and how should it affect my investing?
http://www.investopedia.com/ask/answers/156.asp

How does inflation affect your investment?
https://www.equitymaster.com/detail.asp?dat...your-investment

The relationship between inflation and investment
http://www.investingexperience.com/the-rel...and-investment/

Inflation and Its Effects on Investment
http://econc10.bu.edu/Ec341_money/Papers/Gerolamo_paper.htm

Inflation and Its Impact on Investments
http://www.pimco.co.uk/EN/Education/Pages/...tionPrimer.aspx

Inflation And Investments
http://www.investopedia.com/university/inf.../inflation4.asp

more on google....
jrkt
post Feb 29 2016, 06:54 PM

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QUOTE(T231H @ Feb 29 2016, 04:32 PM)
hmm.gif found this while googling...hope it helps....
What is inflation and how should it affect my investing?
http://www.investopedia.com/ask/answers/156.asp

How does inflation affect your investment?
https://www.equitymaster.com/detail.asp?dat...your-investment

The relationship between inflation and investment
http://www.investingexperience.com/the-rel...and-investment/

Inflation and Its Effects on Investment
http://econc10.bu.edu/Ec341_money/Papers/Gerolamo_paper.htm

Inflation and Its Impact on Investments
http://www.pimco.co.uk/EN/Education/Pages/...tionPrimer.aspx

Inflation And Investments
http://www.investopedia.com/university/inf.../inflation4.asp

more on google....
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Wow thank you kind sir, these articles are very informative indeed. Apparently the term I was looking for is real rate of return. Investopedia did a great job explaining that. biggrin.gif

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