while waiting for financial/accounting sifus to response....
may I give a quick and simple sum up.....
32K loan 7 yrs to go
save 5K if settle now
5k divided by 7 yrs = saving of 714 per year.

27k (if did not use the monies to pay back loan but LEAVE them in investment house)
27 X 6% (app interest pa) = 1600 pa

need to redo calculation...maybe my cal are wrong

You are comparing your car loan with the return from investment house ?

I would just enter the 2.98 % flat rate interest and the loan tenure ( 9 years ) into online conversion formula, you will get a 5.46% of annualized percentage rate. If your return from the investment house could achieve > 5.5 % return ( roughly) , then it's better to keep the loan and harvest the return from the investment house.

But do keep in mind some of the return higher than FD will carry significant risk which can affect the principle.

This post has been edited by puchongite: May 24 2015, 01:28 PM

The above question from titanic_crash is the same as considering which method is more 'profitable': pay lump sum or take a loan.

Without further thoughts, people will start pulling out their calculators to compute the 'profit' on how much they would make by putting the lump sum into such and such FD or other investments.

And left out one simple fact: one need to pay back the loan. The loan must be paid back in monthly installments. Add this into the equation, the profit margin would be reduced. (As the installment reduces the amount of "clean and interest-free" money that could be put into the investment every month.)

Secondly, another common rational has been blurred; which is as far as possible, try not to invest using borrowed money.

Thirdly, by keeping things simple, we readily knows how rich (or poor) we are. It is much simpler to compute how much we have when there is x amount in the bank account and hardly any debt, than computing a bigger X amount in the bank account and having to keep in mind there are loan a, loan b, and loan c to pay.

The bigger X amount in the bank, plus easy loans will more often than not, tempt one to spend beyond one's means.

Easy loan meaning: bigger loan, and longer tenure; meaning: lower down-payment, and lower monthly installments.

It is so tempting, with the extra money, to go for a German-brand car or a corner-lot house... or go for a more extensive renovation and/or more expensive appliances and furniture.

yes...my investment house referring to ASB,ASB2 and Tabung Haji

So you have rm100k of savings.
Your monthly income?
For me, regardless of house loan or car loan, it is still bad debt. So settle all of them will be a good option.
House loan another 5 months to go, I'll consider cash settlement now then follow by car loan.
You need to know when is you car loan's starting date. If your starting date is 1st March 2 years back, you shall cash settlement it by Feb next year, since bank charge the interest upfront on 13th month each year.
All the funds you mentioned are sure make money funds with rm0 admin fees, so you shall not listen to any of trust fund or insurance agent's bullshit and let them make money from you.
Once you are at rm0 debt, fill up back the hole created by cash settling your loans and not looking for other holes.

Now that there is 1MDB added into the equation. You will need to be aware that it will add risk into the investments.

absolutely correct
good financial planning is to have 0 debts,no investment is bereft of risk-risk is an inherent or rather integral component of any investment instrument be it bonds/equity.even the short term 91 day T bill which is the benchmark of risk free asset is vulnerable to sudden changes of interest rate however miniscule n insignificant that may be which will ultimatelly have an affect on the actual return on the investment

return and risk are inseparable,harping on the fabulous or incredible return without measuring the impact of the risk of those investment is a self fulfiling prophecy.in other words the emphasis should be on return vs risk rather than just on the return

cost of mutual funds
many forummers mentioned that switching funds within xxx company is free or does not incur any cost .however,when you sell A fund to buy B fund the hidden cost will rear her ugly head and surreptitiously lower your expected return assuming that you do make the right bet.when you sell fund A,the mutual fund co. will be quoting the lowest/share NAV of the day (in the course of a normal trading day shares fluctuates within a 1% range) and when you buy its the exact opposite(highest nav ie 1% ) in other words its 2% of your monies

anyway stocks/equity fund are extremely volatile investment vehicle in the short term and delivers spectacular return and rewards in the long run to those who have the patience and can stomach the undulating rides

Well, as said before, insurance and trust fund agents will only cheat and mislead to secure a business. If they tell you the facts, I'm willing go to Iraq and let IS militant to cut my head
But sadly to those agents that are cheating or misleading to earn a living, this can only happen in their dream
Gambling in share market are better, either you win or lose. Every month I'm making rm300-400(not a greedy man) by making 2-3 calls to my remiser. No doubt I can do online trading that save me the broker fees a bit more, but I just want to have another friend that give me tips every now and then.

Hello folks,

I'd like to request for your advice on my personal finance. I'm 30 this year, single (with plans to marry in about 2-3 years) and below is the summary of my current situation. Items are shown as a percentage of my net worth:

Cash, RM, M2U Savers :21.86 %
Cash, USD :29.39%
Bursa (Dividend stocks, REITs) : 7.33%
ASM and AS1M : 41.06%

I don't own a car or property as I currently do not need either of those. I do intend to purchase a house/condo, not necessarily in Malaysia, just before I get married. I'd appreciate some recommendations on possible tweaks I can implement for better growth.

Constructive input please

% in net worth?
there must be some big different in scenario/circumstances between a net worth of RM 50k, USD 50k, RM 200K, Rm 30k...or etc,etc...
just thinking....

I do not know how much you are worth. However you do not need so much cash in hand (21.86 %). Dump them into asm/as1m. Keep what you need for the month. For myself, I set a future target of RM100k each in asm, asw2020, as1m (haven't even have RM100k yet, still planning ) . Why only Rm300k, cause with RM300k, I will be getting approximately RM18k/year free money. I can survive based on that. The rest I will dump into certain unit trust bought via FSM to generate at least min 10% returns/year. If you do not know what to buy, can consult pinky and xuzen. Like mr guy. He buy based on recommendations in the FSM thread and earn min 5%, max 20+%

You should not hold cash. Try openning SG account and buy their reits. Their REITS is able to give a 7% return/year which is equal to ~21% after factoring in the exchange rates.

That's my future plan and hope it helps.

Well it's not a big amount, I'm thinking it wouldn't matter much in absolute numbers but more important in percentage, correct me if I'm wrong.

Thanks for your input, and also for sharing your goals

About the PNB funds, I find that at 41% I'm already pretty exposed, I'd probably stay away from increasing that part for the time being (I'm planning to limit myself to not more than 20% in a given type of investment).

About FSM, I did open an account but never put money into it, it's something to explore right now I suppose.

SG REITs are pretty popular in this forum , there must be some merit to it - I need to get an SG account set up then.

And yes I agree with you on the cash part - it's actually the main reason I'm posting here - I realise that holding more than 50% in cash is pretty foolish when considering inflation.

For me, I never hold more cash than I need. Maybe extra one month cash in hand? My cash in hand will always be in ambank truesavers (2.8%)/ambank islamic efd (3.15% p.a for a month cause is less than RM5k)

ASX FP for me is FD on steroids. Principals are guaranteed in my opinion (buy and sell at RM1/unit). What do you mean by expose? I am a guy who never ventured beyond FD and ASX FP was my first outing. So pardon the rather conservative thinking. Anyway, I will not set a higher target for ASX FP cause in my own opinion, I feel RM300k is just nice.

Q1. Are you happy with your current returns ?

It is all about risk and return. Your current portfolio is very conservative except for your USD.

I would set a target for my desired return first. If I am happy with 4%, then throw everything into FD. If I am only happy with 8%, then I have to take higher risk.

So, all depends on your return expectation


Q2. Are you going to use the above investment as down payment for your house ?

If so, then you have to keep your funds liquid. That would determine which type of investment you need now

The cash in hand part is a pretty good guideline, thanks.

About ASX FP, I used "exposed" to mean I consider I'm vested enough in that class of investment, and prefer to diversify more at the moment. Didn't mean anything else really. And yes, it's surely FD on steroids (if you can manage to get units !).

7% is still 7% whether it is in RM or forex

Eg. S$10k x 7% = S$700 ==> RM30k x 7% = RM2.1k

Thanks, your questions are helpful. And yes, it's a very conservative portfolio indeed.

For Q1, the ASX part of my portfolio provides a better than average return. The other half risks being near stagnant, which is where I'm looking to make some tweaks. However, the more I read, the more it seems to me that yields are getting tougher and tougher to obtain.

For Q2, yes I do intend to keep a stash ready and liquid for a property downpayment - I suppose short term FDs are the way to go here.

if the amount is not big....and there are "Many" other things that you had mentioned that you intend to do (just not sure when)....guess cash heavy with ease of liquidity is the way to go...until you had planned the (timeframe) for other heavier investment like, house, car and setting of a family...
no right or wrong...just individual preferences of how one wanted to max the assets.

Willing to go Iraq? my arse la. U don't even dare to go report to BNM on the so called cheat & mislead. When u hv a proper channel to legally report it and yet u still don't dare, I think u're the one that been cheating & misleading people here with ur cock talking bullshit.

Since you plan to get married in 2-3 years time,
1. How much money do you need for your marriage?
2. Investing in shares and unit trust involve risks. Have you taken risk into account for your marriage funds?