OKay, for a start, let's aim for when the child reaches the age of 18.

1. How old are you and the wife?
2. what is your (house hold) income levels now?
3. what kind of insurances do you have?
4. how does your investment portfolio look like (epf, asb, unit trust, savings, yada2)?
5. What are your current commitments, separate them between HARD and SOFT expenses. Hard being something that you cannot avoid paying (such as loans, insurances, etc.) and SOFT expenses are things that you can adjust, reduce, or get rid off completely (food/drinks, entertainment, traveling, etc.)

There are a couple of sensitive questions that I need to ask though, would you like for us to set an appointment for an easy exchange of answers(from your part)-explanation(from my part), do you want to do this through PM, or if you don't mind discussing this over this thread for the benefit and visibility to other forummers?

This post has been edited by wild_card_my: Nov 28 2014, 07:44 AM

Put everything aside, i have reserve rm300 per month for my kids education fund. But i dont have any clue on where to keep it except SSPN or Unit Trust. Is there any other alternative?

Planning requires an objective and a time frame. It is more than just knowing where to place the money. Right after that comes management and overseeing the performance of the funds. You do not want it to be too hot or too cold, you are investing with an objective in mind, it is supposed to be optimized, not maximized. For if we all aim to maximize we can always invest directly into equities which comes with the risks. Seems like you need some tailoring. Hit the number below if you want to meet up.

No i m not going for equities since i am not pro with that
Just want to secure the funds into something better than SSPN if there is alternative

I already had my property, unit trust, and my gold investment
These rm300 is the extra cash that i can allocate for the education funds. That is my target. I can extend up to rm1k if i want to but i had another plan for that amount of money.

Double post

This post has been edited by suadrif: Nov 28 2014, 10:20 PM

@wild_card_my what are your recommendation if I have a 500k full flexi housing loan, interest at 4.4% and 100k in cash.

no other financial commitment other than old parents.

house loan paid off, car loan paid off, my only loan is the 500k housing.

currently im just parking the 100k in the housing to deduct the interest.

thinking of taking a small portion 10k ish to test stock market though..

Hi,

How old are you? Are these all of your assets and liabilities in total (in addition of perhaps EPF)? Not married nor have any children yet? Do you have any medium term goals such as running your own business (if you havent already), thus requiring capital? or are you planning to stay the way it is until retirement? Any short term goals like getting married and children then? Are all your insurances in order, do you know if you are over OR under paying, are the the right kind of insurance that you need or the one your agent told you to get, were you spelled out with the entirety of the terms?

In terms of total financial planning, it is important for one to ask oneself about the objectives, term (time period), and the risks you are willing to take. It goes without saying that an older person would have a harder and riskier parth to prepare for their retirement than a younger person. I have stacks of forms and surveys for you to fill up for those who engage me professionally, details-details-details are the most important source for a good financial planning

As for testing the waters in the stock market, you should be able to do it since your asset/liability is healthy, you may make some profit and the worst case scenario is that you would lost the entirety of the RM10k, which you may chalk it up as a lesson.. However, beyond that... what? Is this going to continue with another RM10k or will you start investing in other schemes? Without proper planning, you would lack a clear division of your wealth; and optimizing your returns to match your objectives are more important than looking for a quick buck. Do you know why gamblers always lose to the house? Because when they win they always think it is their lucky day and roll another dice.

This post has been edited by wild_card_my: Nov 29 2014, 01:27 PM

rm10k can't do much. Just settle the loan first and prepare enough bullet for property market crash.
For me, instead of wasting money to "seek" advise from so-called financial gurus, I'll go to coffee shops and seek advise from those 60-70 years old uncles on how they gain their wealth.
And I met with 1 coffee shop owner(just open it 3 years ago) that never dump money in any of funds, shares but yet his asset are > rm3M. He only mention 1 statement : you need to have right money in the right time.

0 liabilities (well, there is that 500k property). asset, not much to speak of as well, lets say i have around 200k of fairly liquid asset.
not married yet, but aim to start a family within 5 years
no intent of running a business. just a conservative salaryman.
minimal insurance, cause i have minimal dependants, maybe 150k on death to take care of parents.
gross income of about 100k/annum.

aim is to get enough passive income to retire within 20 years.

forget about tailormade boutique plans that you make for your client. i'm not paying so i m not expecting that. what soft of advise would you give to a stranger on the internet?

right time, right place - sounds like your uncle friend got lucky.

I agree with you, but it doesnt seem like i'll be able to get enough bullets the way i'm going about if the crash happens within the next 5 years.. then probably i'll have to wait for another 10-20 years

Is he lucky? Nope, because everything will have a cycle, nothing will forever goes up, sure will come down.
And financial adviser line are created by speculators to continue mislead people.
KLCI are higher and higher, but rm change to SGD or USD are getting higher also. Today we have 1800 but need rm2.6 to change 1SGD or rm3.4 for 1USD. Now my friend that earning USD are really happy with it. He have about USD50000 now, just do the maths how much he got beginning of the year and current. If he dump the money for investment, he can't take out the money already.
That's why I join him to work in Middle East, but I missed the boat, I still gain, but lesser than him already.
You need to have vision and self discipline.

A fairy tale.

It was amazing to hear that there are banks elsewhere in this world that give negative interest. Yes, their customers will have less instead of more after keeping their money in these banks.

Banks here is even better in their marketing, and are able to get their customers to pay to keep their money with them without the customers realizing it.

Customer John has extra money above his normal savings. He can put in an extra 100k towards a new house for himself and his family, and take a lesser loan of 400k. And with his monthly salary, John can finish paying the loan in 15 years.

When making enquiry at the bank, the loan officer introduces him to a better loan scheme. This flexi loan allows John to put his extra 100k into the account, which also allows him to withdraw at anytime, and it will also offset the interest charges on the outstanding loan balance.

It sounds like a pretty good loan scheme. So, John agreed and take up a loan of 500k.

Since the loan is now at a higher amount, and also the fact that any extra amount he puts in each month (which he will probably will as John is a bright young man and good in his job and his boss pays generous bonus and annual increments) will also offset the interest charges, John decided to have a lesser monthly installment as well, the loan tenure is now 35 years.

As when John puts in extra money above the monthly installment, John calculated that the total cost of interest will be the same whether the loan tenure is 15, 20 or 35 years.

Before I forgot to mention, John is 29 years old. He is married and co-signed the loan and property with his wife.

As said, the banks here is good in their marketing, and able to convince John to commit and locked him into a 35 years loan instead of his intended plan of a 15-year loan.

End of fairy tale.

=================

John is now richer because with the flexi loan, he has an extra 100k which he can withdraw for any urgent needs. He don't have to put aside extra savings as emergency fund.

Don't understand, is it smart move or not for John?

It's a smart move. In Malaysia there isn't any typical loan that does not require you to not pay downpayment for a house anyway, so I am going to ignore that example. But as for the benefits of a longer tenure, look at the picture below and ask me anything for further clarifications.

Taking it for 15 year or 35 year are the same, but by extending the loan tenure, you get to have the flexibility of paying less in the case of emergency. But if you already promise to pay in 15 year, you cannot pay less.



This post has been edited by wild_card_my: Nov 30 2014, 10:45 PM

1. Family within 5 years is a medium term goal, that is fine. I assume your wife would already have her own basic financial needs like insurance met, so let's end it there. Keep note that most couple have the husband take care of the 1st child's insurance. It shouldn't be much, a medical card for the child for less than RM200 should be good enough, any more that that would be a waste and you should invest directly and not through insurance. In addition, the child's education funding will have to be set aside in the future.

2. Now that we have the soon-to-be family out of the way: Seeing that you are all set for the time being, it would be a very smart choice to start preparing for your retirement. Remember, it is never too soon because the longer you wait, the more difficult it would be as you grow closer to retirement age. Now, everyone's retirement age is different, but you mentioned 20 years, that's an ok number of years to start with. Since you are not looking into starting a business, let's just start with something more long term.

3. In general, it is good to diversify your investments into multiple vehicles. You mentioned you have a house, I assume you are staying in it, so that wouldn't be considered as an investment, because are you going to sell it one day and not live in a house? FD has horrible returns, and it is semi liquid being that it is withdraw able within a year. It has but one purpose, read below:

4. Prepare about 3 to 8 months of emergency funds and spread the funds into multiple asset classes - savings vs FD. Don't touch these, but don't add them more than for about 8 months. Anything more than required would just go to waste.

5. If you are not ready for owning equities directly, don't. Take the next 1 year to train yourself, use the trading simulators instead, you would simply be pissing away your money.

6. For the rest, and I am sure you are already doing it, you can invest in managed funds that allow you to transfer between equity - balanced - bond - money-market funds. The lower risk funds like bonds and mm can be used as a hedge during a downturn. Diversify and time your investments, but do not daily-trade, these are not the funds for that due to the fees. Use these investment vehicles to park your money while you get a grasp of the equity market.

7. As part of your diversification process, you could also purchase a property with a mortgage; get a flexi account so the whole process could be used as a hedge during a downturn.

This post has been edited by wild_card_my: Nov 30 2014, 11:06 PM

thanks. thats typical good advise to start with as baseline.

One advice by my immediate superior on making known your views in a meeting (our company have regular weekly and monthly meetings between various HODs): Don't voice your opinion when the other party is not ready or receptive to hear it. They, instead of listening, will be thinking of counter arguments to obstruct your suggestion.

Well, any loan officer will say that it is a good move. But is it?

You will have to brew it and think about it a bit further to arrive at a better understanding. It's still closely related to money matters as in my previous posts - spending and savings.

Just so you understand mortgage brokers like myself don't get differing commissions regardless of the loan tenure. If the customers insist on shortening the tenure I would yield and not without explaining the advantages of prolonging the tenure and if they want to end it earlier they can by simply paying the same amount that a shorter tenure would have them to. Instead of speaking with parables I don't see any of you providing illustrations or numbers to prove your point. All about your experience this and knowing people that.

The numbers speak for themselves.

This post has been edited by wild_card_my: Dec 1 2014, 09:40 AM

Please keep the comments to yourself as my reply was not directed to you. I have already made a stand not to reply to any posters who have a professional motive on opinions, preferring to engage with anonymous posters.

It will draw me into an endless debate since you have an invested interest to win the debate; while I will feel bad if I win the debate and putting you down in the process.

It's fine when a poster with invested motive on a subject presents the facts and numbers. As for opinions...

Fair enough. Have a good day and a productive week