Hi need advise from any of you who are better learned in personal financing.

My wife and i pool our income together every month. Currently, all housing and personal loans are under her name which make up to almost 80% of her income. Myself on the other hand only paying for 2 cars which make up less than 30% of my salary.

My question is, how to balance out the burden between us so that if i was fated so go first she wouldn't have to bare most of the burden.

Can loan be transferred to another name? Is there any other way?

If your concern is about what happens if 1 of you moves on before the liabilities are cleared off the simple answer is life insurance.

Best,
Jiansheng

Hi sifus, any suggestion where to invest around RM25k fresh funds monthly? Low to medium risk.
Asb and Asb2 already max.

This post has been edited by keanoppy: Aug 7 2019, 08:30 PM

Then go for ASM1,2,3

about 300K pa of fresh fund.

Seeking for some financial and maybe even life advice here.
Age 30, single, been working freelance programmer for 2 years, around 48-60k p.a., so that's around 4-5k per month.
Each month save around 3k, currently has ~45k in saving account.

45k saving is not solely for me but also for my parents, because:
- Their house still on loan (~70k), and also a car (but only left 3k installment to go)
- Just found out recently parents has personal loan ~50k from bank as well (borrowed for money game/stock/investment which I think they lost all...)
- Slow income and it's getting worse, retiring soon, ~2k per month which barely covers live expenses + debt repayment
- No EPF and savings AFAIK

For my side, cleared my PTPTN last year so I don't have any debt for now, my monthly expenses:
- Insurance RM320
- Utilities bill ~RM200 (water, electricity, internet, mobile)
- Travel ~RM150 (petrol, touch n go)
- Food ~RM150
- Misc ~RM200 (parents, personal expenses, etc)

I'm afraid they might not be able to clear their debt properly so I've been living frugally to save up to a amount I feel more relief.
For now I feel more 'safe' to have 45k saving, and thinking to start doing some investment with 3k gross income I can do every month.
I've 0 experience in investment and money management, only lately I've started to read and trying to learn in this sub-forum.

Currently my action plan:
- Place 30k into OCBC 360 (4.1% p.a.) (emergency fund for family, need to be liquid)
- Remaining 15k for investment (ASNB ASM1 ASM2, unit trust, ETF StashAway, Stock)
- Each month allocate 2k into investment, 1k into saving (FD/OCBC360)
- 6k-8k per year into EPF (ultimate aim is to have ~600-700k in EPF when I'm around 55 years old, by compounding I hope this is doable...)

I need some enlightenment on:
- How likely is this financial situation allow me to purchase a property?
- Is my action plan make sense? Too risky/'out-of-mind'/nonsense/full of hole?
- What can I do to improve my situation/income? I'm trying hard to increase my income but I'm not so confident that I can increase it a lot.

Honestly I don't feel good with this situation especially seeing many of my friends has already secured a property (be it PAMA or self effort).
Hopefully I can get some advice here be it harsh or soft.

Usually bank approval for housing loan they will look into your credit score and of course your earnings.
As of now, high possibility of tad easier for loan approval due to rate cut.
And you will need to prove your stability in income with your income tax. (The approval level is different bank by bank)
I would suggest using of credit card so that they at least know you are good payer.

Are you bumi? If so, max out all those bumi fund 1st (sorry can't remember the name).

Provided EPF giving average 5.5% interest for 30 years and monthly contribution of at least 700, it is possible to reach 600k. (I'm just doing rough calculation by head, so take it with a grain of salt)

My assumption of free lancer is flexible of time. So use the time to learn more about investment or even do some business as in sorta like reselling product or part time jobs.

How long until your parents retire and how close are they clearing their loan?

Don't sweat too much about property for now. 400k house, installment around 1.9k. including all fee, total payment by your around 850k.. take your time to build your wealth and dream house. Plus high possibility your parents house will be inherited by you. Save you a huge chunk of money.

I think you are doing fine on your personal side, seems to me that your bigger problem comes from your parents. It will be difficult for you to control them since they even take personal loan..

Their house still on loan, are they not planning to pass it to you after they are gone? ( I assume you do not have other siblings)

For your action plan, that is consider good too but if you want more details then maybe can PM to talk more

that i already have. those will be used to sustain living otherwise going to be used up for clearing loans only. the issue is the huge imbalance of commitments between both of us

I'm not bumi, but I just opened ASNB this week and trying to invest into ASM1/ASM2/ASM3 (looking at ~5% grow?)

Unfortunately they are retiring real soon, like, maybe in next 2 years?!
Because the business they have is really bad now (some tradition handcraft product) and they seems to have no interest in continue growing it or they couldn't. They used to be earning ~10k per month, but now only ~2k per month or even 0...
AFAIK housing loan has 70k pending, and personal loan 50k pending. They are trying to clear it especially personal loan but since their income is so few I doubt their repayment is enough...
I'm trying to get full detail but they are quite stubborn and refuse to disclose everything.

I wonder usually how people know it's time to allocate their portfolio to include mortgage?
Like, if I able to secure 4k every month in future, should I go for it? Or should I continue building up saving + investment for passive income first?

Yes, they took personal loan without telling anyone and end up lost them all in investment/money game, including their savings...
I have siblings but I'm not sure what's my parents plan on passing down the house.
For what I see they might not be able to clear the debt in time. If they pass it to me I assume I have to clear the remaining loan?

I would rather not put everything in 1 basket, at this point, thinking of diversifying

That's the plan boss

First question can you tahan if your money drop?
Majority if people cannot tahan even if drop 1%. No investment in real life won't go down. Only asnb magically will make you not lose money. So come back to the question. What happen if your money decrease by 10%? Will you panic? Have you experienced it before?

Around 25% drop before. So yeah
Hence the question low to medium risk

how to define low to medium risk in quantifiable terms?
for this general terms of definition may not be of same level as some others .....

hm.. i'll play the devil / bad cop here

1. There seems to be some missing costs in your monthly expenses - eg. obvious one being rental (room or entire apartment/house)
Must be realistic to plan cash flow ahead consistently
eg. even if staying with parents please factor in IF U are by yourself - how much will it cost U?

2. When should one start thinking of buying own home?
Any time - to build-up savings, income, etc in preparation to execute
When should one buy is another question +where +how much.

3. Rule of thumb - your housing cost (mortgage+cukai taksiran+cukai tanah+maintenance+etc.) should NOT be more than 30% of your net income (active income +passive income if U choose so).
Reason - the lower the %, the less of a pain it is to own it +more flexibility in investments.
Note - a home is a cost, not an investment. Yes, it's considered an asset but an asset that sucks up cash flow unless U sell it and hope for profit. Investment properties are different animals.


4. Personal opinions on your action plan:
- Place 30k into OCBC 360 (4.1% p.a.) (emergency fund for family, need to be liquid)
Good - never touch this unless emergency.
And NO, your parents unable to pay their personal loan isnt an emergency. Personal loans and the likes are unsecured loans and choy choy if anything happens to debtors of unsecured loans, banks try to go after what's left of debtors' estate. Sorry for being obvious & fatalistic here ya

- Remaining 15k for investment (ASNB ASM1 ASM2, unit trust, ETF StashAway, Stock)
U better have some sort of equity asset sub-allocation plan & execution here.
ie. dont "all-in" into one-hand like 1 ETF or 1 Stock.

- Each month allocate 2k into investment, 1k into saving (FD/OCBC360)
increasing your emergency buffer until?
gotta re-direct the cash into investing after U reach your emergency buffer goals else U'll never win the game playing defence only. Playing good defence is good but offence is needed too to score goals and win.

- 6k-8k per year into EPF (ultimate aim is to have ~600-700k in EPF when I'm around 55 years old, by compounding I hope this is doable...)
EPF, assuming i am self-employed (freelance, no employer EPF right?), i'd treat EPF as my bonds / Fixed income portion of asset allocation & i'd also go for the max tax-relief $4K pa or more (assuming it meets my asset allocation %).
Whether or not it'll hit 600K-700k when 55, can simulate easily with a spreadsheet. Just assume 5%pa or 4%pa returns to be prudent, even though averaging about 5.5%pa

Hope the above helps in clarifying your thoughts/plans a bit without being too much of a bast*rd/hard knock

I'd suggest not lumping up all problems and trying to solve everything in one shot/plan - ie. noticed i didnt bother stating possible solutions about your parents' home loan and stuff?
Plan A first, things that U can control / foresee enough
Then adjust Plan A for parents' stuff and see if can do Plan B - coz U can't control others +others may not want you being nosy/your help.


This post has been edited by wongmunkeong: Aug 8 2019, 05:36 PM

afaik, those asbn are damn hard to get for non so i just gave up. but you are welcome to try. its good to have
meanwhile, brush up skill/knowledge which type of investment as you mentioned initially suit your style/appetite

hmm.. some tradition handcraft product which earn them 10k a month. please do check if its due to world event or product itself causing the sales to drop.

i guess they have their own reason/pride not wanting to disclose all. i guess all you can do is save up just in case they needed your help. just make sure they are not late with the payment.

its hard to answer, everyone's view and situation is different. but i would advice never go way over your head.
you need to have buffer if you ever consider buying a house. when market is good, earning 10k, market down, earning 2k.

Thanks a lot for your words. I know everything seems a bit nonsense but yeah...so I'm trying to plan everything down and review them over and over now. Perhaps it is late for me to start planning but I hope I can see clearer picture.

1. I used to pay monthly for my car and PTPTN but cleared them last year, currently no plan to acquire another car yet. Used to rent a room ~500 each month before I move back to stay with them. Other costs I may left out are mostly those happens once a year such as CNY, car maintenance, insurance, road tax, wears, etc etc which I think if to divide into months, would be ~RM150 per month (~1.8k per year). Another cost I left out is EPF which is 6k per year (~RM500 per month). I pay for their expenses too but usually their income still covering fine and my siblings will give them some money from time to time, I mainly pay for the bill and any large amount expenses they might not have cash in hand to pay for.

4. This is new to me because one of my purpose for emergency fund is to help relief their debt if really touch wood, or even funeral related fees, I actually fully paid for my grandpa funeral fees last time because parents unable to take out a cent for it and I might be still shocked from the cost of that. Says if their personal loan default will house get taken back by bank? This is what I afraid of actually. Can you enlighten me on what emergency fund should cover in my case?

I'm quite clueless when it comes to attack/defense, that's why I only keep doing saving/FD ever since I work...
I'm still studying on investment tools and learning how to build my investment portfolio, and I admit some of these things I written I have yet to understand them completely, but I'll take your advice into account when planning investment.

Yeah my mind is kinda haywire now, might need to reorganise my mind and plan in stage.
Hard knock may be what I needed right now for me to stop thinking worst situation and exaggerate issues.

10k was like 20 years ago, but since 10 years ago it been dropping and still dropping now. The product is now being mass produced using machine in China and Thailand, that's what they explain to me when I asked. However they have no intention to follow them because (1) machinery is expensive, have to import from oversea as well (2) requires workshop to house the machinery + operator which is expensive too (3) supplier here already import from China/Thailand rather than maker here because they have more competitive price.

Really appreciate everyone's sharing, big thanks to you all.

what kind of portfolio are u looking for?

How about this?

Since you pool your money together, why not treat the loan commitments the same way?

You may choose to insure each of you with half the total loan amount.
Should one of you depart prematurely, the other can opt for a refinancing scheme with the deceased insurance payout and reduce the monthly commitments.

Or do what I do, my wife owes nothing and she will own everything at the end of my numbered days.

Best to insure yourself above your total liabilities.
Why?
Bills still need to be paid, kids still need to have activities, fun, learn, still have academic aspirations, etc.
And there's many ways we can do that, not just with insurance of course. You need to have some investments as well.