You can no need to follow.
But once you have a family and parents to take care of, you will know the pain

For me its 36%..

85% in average

at times there is NO buffer or "negative buffer" yet the bank approves it...
a friend of mine
income RM 8000 pm
minus EPF, PCB tax, Socso
net about RM 6000 pm
recently bank loan approves RM 4000 per month loan installment.... ....
to add some thought....he is a bread winner with a wife and 2 kids....
just wondering what is the loan approval criteria?

Already came out from newspapers, we are the highest in Asia currently

% 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.

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

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.

Many thanks for the suggestion. KLSE is like insane mode to me, while I can barely survive playing in beginner mode. But nevertheless, appreciate with all the suggestions given. Nowadays economy is bad and everything is getting price hike. Wonder when the property bubble burst.

Btw, saw in FD thread, currently the highest FD for 12 months entitle me to get 4.5% (glance through only). Is it good or consider moderate compare during good economy days?

OFF TOPIC: I overheard on radio that OSK are having the scheme of buy now pay later, where you can pay after you purchase the house 2 years later. Is this a good deal? OSK do have property near my area and that's what I am looking for also..

10 years ago I also on your boat.
But what I did was, pay 10% of DP, take 20 years of repayment period. Then save money as much as possible and dump in to reduce principle. End up my name being slashed from the bank after 7 years.

To cut the story short, it does not matter much if you pay more deposit or less or take a longer term or shorter term AS LONG AS you invest whatever excess you have into some long term stocks portfolio or pay off loan balance periodically if you wished.

I assume that whatever returns you can generate from long term stocks investing should be about 5% to 10% in the long run. Your effective loan interest should be about 5%. However, paying off loan means guaranteed return of 5%. Investing in stocks should get higher return but not guaranteed. That is why I say invest some in stocks and pay off loan with some excess cash. You really should concentrate on your working income. Whether you invest or pay off should not be of much difference. Just my humble opinion.

You don't really need a financial planner when common sense applies.

Higher downpayment and shorter loan tenure = less interest paid is true.

We take as much loan as we needed to - not more, not less, just adequate; just as we buy something we truly need, we buy enough and not frivolously more than necessary.

First, think what you need to bridge the gap between owning the house and what you have in hand. This gap is the amount you need to borrow from the bank.

Then think how much you can comfortably afford to pay every month back to the bank.

(One may do a bit of projection into the next few years like salary increment or job promotion, and have slightly more added into the installment amount, and this means a tighter monthly budget till the increment or promotion.)

You then approach the bank with the loan amount you need to borrow, and the installment you could afford and like to pay every month. With these 2 figures, the bank can work out the loan tenure; and you won't be distracted by any offers for a bigger loan or longer tenure or what special promotion they have.

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

If we could only afford to buy with the most minimal downpayment and the longest tenure available, maybe we should think again whether we can really afford the house and whether we should wait till there are more savings and continue looking for the right house at the right price.

So what is the right house at the right price? According to some financial rule of thumb, it is about 2.5 times the annual salary; monthly installment of not more than 36% of your gross monthly income, and at least 20% as downpayment. 

http://money.cnn.com/pf/money-essentials-home-buying/

Can these rules of thumb apply to Malaysia? Maybe, maybe not, or maybe they should be adjusted a bit like 3 to 3.5 times the annual salary, monthly installment about 30-40% of net salary, and 15-25% as downpayment. The adjustments should not be too far off the rules of thumb.

Good luck, and happy house hunting.

I wouldn't call that a smart move. You are still with the old mindset of paying off home loans fast. But it was valid back then cuz home loan rates were about 7-8% unlike the current 4%+.

What's the point of having a fully paid up house? Your value is stuck on the house and u cant touch it unless you sell/refinance. Its just a feel good feeling that you have a fully paid up home.

If u were a savy investor, u would know how to utilise loans to grow your money and your NAV faster. I would rather have 4 properties on loan (with high capital appreciation) vs 2 fully paid up properties.

We should focus on growing our money not saving. Saving is a very slow process towards financial freedom. Learn to diversify, invest and grow your NAV. You can achieve a much faster growth rate than just saving.

I grew my NAV by RM1.8mil within 9 years using this method.

Bro, use flexi loan and you will have a lot of flexibility. Your above 2 concerns will be solved.

1. Higher downpayment ?
Flexi loan allows you to dump your excess cash into the current account to reduce the amount outstanding, thus reducing your interest expense. While the excess cash can still be withdraw out for your own use later (if you can find some investment with good return for example). That is the beauty of flexi loan.

So, take as much loan as possible (90% LTV) with the bank. Then dump in your extra cash into the current account later to reduce interest expense, while still be able to use it when you need money. If you pay higher downpayment, then your cash will no longer be available to you

2. Shorter loan term ?
Again, flexi loan will take care of your concern. Interest is calculated on daily basis based on your balance outstanding. So if you have extra cash, dump everything into the current account. It has the same effect of paying more instalment as a shorter loan term.

So, take loan term as long as possible in flexi loan. Then deposit as much money as possible into the current account. That will save you interest. And you may pay off your loan sooner
By getting flexi loan with as much LTV + as long loan term as possible, it gives you the flexibility to pay lesser interest and at the same time allows you to withdraw the excess money when you need it. And the extra money you paid into your current account will be available for use for a longer period also.

However, flexi loan is of no extra advantage for people who has no extra cash to dump into the current account. For this category of people, there is no difference for them to take conventional fixed loan

Simple way is pay 10%, take the longest tenure and save money in another account. Then reduce principle once every 6-12 months with that money.
Remember, once you own a house, you need to serve loan and other bills.
Now I can live without any income for 5 years as I have no loan at all, following old timer's mindset way of settling loans.

Yes.

With flexi-loan, you take 405k loan at 30 years. When the accounts are in operation, then park your remaining 255k inside the current account. Your interest calculation is effectively on principal of 150k, not 405k.

If you take conventional loan, you have to pay interest on 405k irregardless. The 255k is your separate fund which you have to think how to make good return on it

Another way of viewing the flexi-loan is a "low cost reducing-balance overdraft" (where the overdraft facility is reduced by the monthly instalment amount). The interest rate is housing loan rate (4.xx%) compare to overdraft interest rate of 7.xx-8.xx%. The fund is ready for you to jump on good investment opportunity at anytime. If you cannot find a good opportunity, you are still paying less interest expense as your balance principal is already reduced.

Compare to conventional loan which you take high LTV, you have to pay interest on a full loan, while feel the pressure to look for investment opportunity to cover the interest expense which runs on daily basis

Remember, only you will know how much you can make, no point of envy on others and waste above your means. Driving a fake Lancer and driving a real Lancer at the end of day you are still driving a Lancer.
As for a loan that you take either is flexi or non flexi, self discipline are still important. Like you put all of your cash to the loan's account but suddenly you want to go for holiday and take it out, it is a wrong way.

My current objective is working towards having at least RM20K/month from my investment portfolio. Combination of property(rental income), ASNB (combination of loan and cash), Tabung Haji.

I'm saving more than 50% of my salary. Planning to pay off housing loans as soon as possible. Targeting to achieve this in 8-9 years so that I can spend more time with family, and giving back to community.

Besides rental income, need to ensure the market price for the houses are giving same or more income (dividend) if I sold it off later and put it in the ASNB or Tabung Haji.

EPF just the bonus for me as my last contribution was on 2013. Also plus company saving scheme and company shares.

If the monthly commitment rm1700;
And the rental rm1700/month ---will pay the loan
I will also pay at least the same amount on that month.

The rest of my income/saving will go to asnb/tabung haji.

Any cash incentive or shares that lapsed will also dump to pay off the housing loans..

Consistency and discipline. Hopefully I'm strong enough.

P/s: The timeline is based on current employment which My expenses are mostly covered by company.

The old rule of thumb used to be that you should subtract your age from 100 - and that's the percentage of your portfolio that you should keep in stocks. For example, if you're 30, you should keep 70% of your portfolio in stocks. If you're 70, you should keep 30% of your portfolio in stocks.

https://money.cnn.com/retirement/guide/inve...ymag/index7.htm

if you had been "Happily" and contented with 70% of your net worth is in ASNB holdings which provide about 4-5% returns and known that after inflation, this is almost negligible returns. ....just stay with it....
it has alot to do with your risk appetite, risk capacity, past experience or environment exposure to investing.
Nothing wrong with that...for any change away from that may subject your money to added risk of losing some of it

previously what did you do with your rest of your 30% net worth?

the rule just a guide line for general purpose use only...

assume u r 35 years old , mean 65% (100 - 35) is equity.....
if u r conservative person, try to reduce it below 55% ........
if u r adventurous person , try up it until at least 70%.....

nothing is wrong/ correct bcoz individual person r different risk appetite ..........

i oso ever saw ppl recommend use rule 80 - age (mean 80 - 35 = 45 % in equity )....

i do follow the rule at the starting, but seen like i'm adventurous ppl.....always beyong the limit .....  

if u not sure ur limit, try increased stage by stage (not sure u want try 6 month each stage or not  )
invest in dividend stock or fund with low volatility ....