ooo...ic...I really tot u just want to relax and having a good time by age 40...ok ok...I got what u mean...u just want to have low-load job...and easy with life...

btw...how old r u rite now?

You dont think your rent income will double every 12 years too? This is why I invested in real estate, it's inflates with inflation

If you looked at my calculation, I'll have extra RM1600 coming in monthly (RM2600-RM1000). If I put that in a mutual fund from age 40-65 (25 years, 65 being a non-productive no-working age) that averages a lousy 7%, I'll have a cool RM1.3mil when I'm 65.

This is not considering inflation (that will be covered by my rental income), and I dont work after 40 and living on barebone budget. Which is planning for the worst, I must say. Also, this is not adding EPF, income after 40 and other misc stuff.

But we as a family sacrifice now to get there. we drive a 20 year old car with no car loan so that I can channel most of my income paying for our small apartment. My apartment to income ratio is really small, hence visitor tend to snigger at our place when they come over but hey, I plan to be financially free as soon as possible

Wow, less than one thousand a month for expenses when you are married and have at least one kid seems impossibly low to me. I am married but with no kids, and I estimate our food costs (including eating out) alone to be at least 1k.

EDITED TO ADD:

Also, do you really think a mutual fund can average at least 7% a year over a span of 30 years? Remember that there are years when you lose money instead of earning, so that has to be averaged out. I use an average of only 5% for my own retirement plans. If I can rely on 7%, I will be able to retire much earlier than planned!

This post has been edited by wankongyew: Jun 8 2010, 03:14 PM

I guess I have an advantage - I can cook

RM2 of sawi can supply veges for all of us for 6 dishes. RM1.50 cabbage, 8 dishes. I portioned RM6 worth of sotong for 3 dishes. RM14 worth of XL prawn can last 6 dishes. Chicken is even cheaper - RM8 medium-sized chicken can divide for 6 dishes (1kg chicken potong 12). We buy some of our wet supplies at Pasar Borong Selayang (kirim to my husband's friend who owns a gerai tomyam).

You can choose to spend 1k on food alone but we've been living just fine with RM200-300/month for basic groceries.

Btw I didnt calculate my husband's income as part of retirement planning. Cause I consider his income gravy too.

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Added on June 8, 2010, 3:30 pmIf I change the figure to 5% average for 25 years, it's not gonna be RM1.3mil but RM950k. Still not too shabby

This post has been edited by Syd G: Jun 8 2010, 03:30 PM

Hi guys,

I've got around 20k capital to invest in property which I was planning to but then now I plan to buy a used car bcos current car breaking down soon (worth 60k). And if i were planning to put a large down payment, there goes my capital am planning to take 5 years loan and after that I should be able to invest in housing property, am not sure if this is this the proper way

Any comments?

Settle down for something more affordable? to me my car should only be 5% of my income. Even it means i have to repay in 9 years reason so? I need more capital, so save, to invest and to plan

Your car loan shud not be more than 10% of ur salary else your not too healthy financially.

Mind sharing what's the current car that's worth 60k but breaking down soon?

So that we all can avoid that car.

If you factor in the 1-2.5% annual management fee your mutual funds pay the management, your fund actually returns around 7%. You can consider some ways like bypassing the mutual fund and invest yourself.

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Added on June 8, 2010, 11:49 pmMaybe you can get a good mechanic to change the necessary parts, and that should be cheaper than paying for a new car. That's what I do to my 35 year old and 12 year old cars. The servicine and parts fee are definitely cheaper than the interest i need to pay for new cars. And i get to save on the capital expenditure of buying a new car. I used the money to generate income instead.

This post has been edited by newbie99: Jun 8 2010, 11:49 PM

10% of my salary is too less in my case
I am fresh grad and my expected salary is 3k, thus I am planning to buy the 60k car with 15k d/p and 900/month for 5 years which is 30% of my salary, not bad huh?

Sorry my mistake, the correct sentence should be "I plan to buy a 60k used car bcos current car breaking down soon".
Current car is 16y.o already, I don't feel safe anymore after driving for 3 years, especially in highway
My second choice is 30k used car. But I hope to have a more comfortable car and perhaps I can use longer.
Overall, I am not sure if this is a good way to dump my capital just for the sake of having lower interest charged.

Get the used car or cheaper. When you earn more, upgrade. You cant afford the 60k car.

Just for fun add petrol, toll, parking, maintenance, repairs into the mix. You'll end up like one of my colleague - paying 40% of income paying for something that depreciates faster than a falling brick.

Well, if I get cheaper used car and then sell it off for upgrade, still it will depreciate just lower depreciation.
Thanks, will think of it.
For 15k d/p, I still got 5k in hand I guess can handle kua
Just that I will have to wait for 5 years to settle the loan and then only I can invest in property, by then I am 28 y.o

If I were you, i rather go for properties rather than a new car. I bought a property way before I bought a new car. Buy a cheaper car (<40k), pay off in 5 year installment and 10% d/p, use the rest of your cash to invest. Isn't that a better financial solution?

Anyway all my property loan installment are currently fully paid by my tenants every month, I don't have to cough up even 1 sen.

This post has been edited by gark: Jun 9 2010, 11:43 AM

Talking about investment in property, mind to share your current property? ie. type, place, the price, d/p, monthly installment

I was planning if buying a unit in a flat that cost around 50k and then rent it out and still able to earn a lil more than the installment like my friend did

Very bad la bro, 30% not inclusive of your other car expenses. you must think of, maitenance, petrol,break down and so on. Ill recommend you to go for 1st hand local car like myvi or so. even if you are a freshie you should be paying installment for about 15 - 20% la. i seen a few peeps paying 30 - 40% for their car, they are so tied down that when they wanna leave the company for other opportunity, still seems impossible for them. haha. beware when u invest might have side effect.

Current property,
condo, damansara, d/p 30%, monthly installment = rent
commercial, subang, d/p 20%, monthly installment > rent

Beware of low cost flats, many risk involved, late payment, no payment, run away at night also got. Make sure you get a good yield.

This post has been edited by gark: Jun 9 2010, 10:37 PM

You got your point "low cost flats", I like this word
A medium/high cost apartment/condo can get you lower stress

But don't aim too high, I have found out that condo's about rm 1,000-1,500 per month rental is the easiest to rent out hassle free. Target young working professionals, usually will at least take care of your property and pay on time. High cost condo is harder to rent out cause, you will need to make the condo very nice and only expat will rent from you.

I found out that government servants are good tenants too. They pay on time and since you have contract and all, they're more scared of thrashing your property

Rarely get govt servants, I thought they all have free housing, no? U41 and above consider professional already lar. Also the people who are likely to trash your property are students, foreign students and foreign workers. Avoid them or charge them high high premium for the future repairs or you will regret.

The singles would rather rent with friends and get big fat COLA money n housing allowance

For foreign workers, deal with the employer instead of the workers.