I would advise you to postpone your hire purchase and insurance until you have settled your shelter. 46% of loan apportioned to your combined income is indeed risky to me. Here is why:

1. Since you just saved enough for wedding and new house, I assume you don't have much money left after that.

2. If one of you lose your job, the another one is not making enough to cover all the expenses.

3. Insurance is more useful when you have kid. Essentially nothing has change after your marriage until you have children, why bother to buy insurance at this point of time?

4. Your priority is beef up your backup fund. Keep at least 4 ~ 6 months of expenses before looking into car and insurance. Ideally 12 months of expenses if you want to have children.

Just my 2 cents.

This post has been edited by td00164306: Mar 27 2014, 07:01 PM

Insurance is more useful when you have dependants. In your case, I don't think your wife is consider a dependant to you, since she works and can self-sustain (this has been the way all these while, isn't it?). If riding a bike to work is the deciding factor to getting an insurance policy, then it should have been done much earlier. I am not sure about the price but if it fits in your budget well, you can still go-ahead. My point is this is not something essential yet; however this is very subjective.

I personally prefer to use monthly expenses as a unit of measurement for my backup fund because essentially this is the amount that I expect to spend.

There is no fixed formula of "comfortable loan amount approportioned to your combined monthly income". Let say, me and my wife have combined income of 250k ringgit a year and a combined liquid asset of 500k, we can afford to loan even up to 70~80%, since we will still left with adequote money.

In your case, your combine monthly income is only about 5000 with minimal amount of saving now. Loan up to 46% of that amount essentially leave you with less than RM 2500 per month. Taking into consideration of your daily necessities, how much you have left to put in the piggy bank? To me the priority is really:

1. Save up the contigency fund as fast as possible.
2. Get an insurance.
3. Then only buy a car.

If this is not a show-off attempt, then very obvious your are not planning your financial matters properly and I am in doubt of someone who repatriated back and commanding a moderate level of nett monthly salary of 12,000 actually lacks this very basic stuff in his financial management.

Anyway, a more luxury end of lifestyle is always in conflict of interest with your saving account. You can get more saving by trimming your food and entertainment fees, switching to a cheaper car and if essential, reduce your wife pocket money.

To be honest if your wife is not working then your monthly family income is only RM 12,000. It is probably just slightly more than enough to live comfortably in Klang Valley. You need to watch your spending; or; beef up your income.

Assumptions made are: i) You get enough increment over the next 4 years to maintain the same cashflow even started the new property loan repayment. ii) You will be able to sell it off at a good price. The next question you need to ask yourself would be: Can I manage it during a bad time? Say retrechment or any critical event in life. From what I read, you basically have zero cash now and you are planning to get married soon. What is important now is to bulk up your bank account before looking into any investment option. Investment comes with risk and are you sure you want to invest your wedding fund? In the worst case (and unlikely) event that your money got locked in, what can you do? Cancel your wedding plan?

If you can access to ASB2, then just go all in once you have some backup funds for your living (minimum 3 months of your monthly expenses, ideally 12 months).

Essentially the buying power of your money is ever decreasing if you can't beat the inflation regardlessly you spend it or not.

You can live until your last breath with 10 millions today in FD @ 3.5%; but by that time the same 10 millions probably can't buy you the equal value of items. Make sense?

No idea. But we can always used what is published by the authority as a guiding principle.

We should make our investment decision based on return vs risk. One should not forced "Beat the inflation" to be in their investment objectives if they certainly can't take that corresponding level of risk. Inflation is completely out of consideration when I am making a decision to invest into something.

They may be correct in the sense that, FD is going to be outcast by Inflation, but, that should not be the sole reason for you not to put money in FD. Yeah their product give you 20% return but so what if the risk is equally high and you can't afford to lose this amount of money (maybe saving for retirement/children education)?

Again I would like to reiterate my point that one should choose the investment vehicle based on their objective (% of return) and risk profile. If one day inflation also outcast their whatever product, then wouldn't it be equally stupid to invest in their product?

Remember, these whatever financial planner could knows nothing about financial planning. They are just some salesman who tends to over promise. When they say their product going to give you certain % of return, it is appropriate to ask what is the basis and is this written black & white or is only their thought/assumption based on past performance of the product.

Past performance can be used as a benchmark but is never to promise the equal amount of return in the future.

That is the answer to the question of "Can FD beats the inflation?"

If your question is about "Should I still put money in FD? Do I look stupid if I do that?", then it has to be answered differently.

There is no straightforward answer my friend, but let me try to make it simple for you.

Say if you have RM 200,000.

You probably want to keep 25% in blue-chips such as major O&G firm, local banks, nestle and etc. Then you probably want to rip some money from the REIT market, say another 25%. Then you say to yourself, "I think I am comfortable to expose half of my money to risk, where should I put the remaining 50% then?". Options for you could be insurance, FD, bond funds or just continue to let them rot in your saving account.

And all these are influenced by factors such as what is your current age, your next-5-year plan and etc. There isn't a single answer that is suitable for everybody and yet those salesman are selling the same product pitching in the same tone to everyone. Screw them.

Oh ya, if you are a Malay, try ASB and ASB2. To me those are no brainers unless you think Msia government is going bankrupt soon.

If you start off investing thinking that investment can makes you a millionaire in 1 year, then my advice is you better put your money in FD. Always start small cause we all learn from mistakes. It is very dangerous if you don't know much and yet you are greedy.

Read more investment related materials, build your guiding principles and investment style and follow it through and adjust as you go along.

Oh ya, while you are learning, it is not a bad option to put your money in FD first. No matter how, it is better than our ordinary saving account.

This post has been edited by td00164306: Apr 17 2014, 03:46 PM

He does get his peace of mind all the while and made it to his retirement. Doesn't he?

Life is never a race of wealth. While it may be important to most of us, but there are also people who are happy with what they have right now and furthermore he is already a high-earner

Other than your ASB, do you still have any other form of saving? How much is 7k to your saving in cash? I am not entitled to ASB and therefore not sure how fast you can cash out your ASB when you need money.

Specifically to your question 2 ,it's a no-brainer, isn't it? One of the best thing in life is to able to borrow money at no cost.

Mostly are asking to swipe at least once a month to get annual fees waiver.

My take is if you don't use your credit card at least once a month, why bother getting a credit card?

There are some good personal loans out there offer cash at a much lower rate than credit card. Why don't you try that?

14k is not a lot.

Bank rakyat is offering personal loan down to 5% per annum. Flat rate.

If someone has no cash to cover his credit card bills and only able to pay the minimum amount, I don't think you need a calculator to determine the effective IRR.

Edit: Bank islam I meant.

This post has been edited by td00164306: Sep 12 2014, 02:09 PM

Stop travelling. You can save more. Making 3.5k at 27 is consider little, but that is fine. What is worse is you spend your bucks on travel...

You don't have to be in O&G to make a more decent amount at 27.

Travelling isn't so bad, until you put majority of your savings in.

Saving an extra 10k a year, could at least boost ur passive annual income by 400? Some more he has access to ASB.

If he do this for 5 years, very soon this amount he saved out of his travelling can generate him free trips every year. And he isn't 35 yet.

I always go against the idea of "travel must go while you are young, saving come later la". Foolish.

Not until you clear off your credit card debts, and that is given that you don't put yourself into another pile of debts.

Taking a 350,000 thousands loan and your repayment amount is around 1.6k per month? Do the math properly or I shall wait for your house to be listed on the auction list.