Offshore investment? Do you mean invest in foreign shares/fund, tax free offshore account or offshore hedge fund.

The first one is very easy with internet brokering, the second one is illegal (and you need to be multi millionaire + pay high fee) which involves money laundering, the third one you need to be an accredited investor (above 1 million) before they will even see you.

Which one are you talking about?

Not really... I don't succumb to peer pressure, I spend what I need not based on other people needs. It is better for other people to accumulate 'things' while i accumulate 'investments', even though he might have a flashy car, iPhone or flashy jewelry, my net worth will be higher, so that gives me pride.

I generally do not spend my money on 'things' such as cars or luxuries which depreciates heavily as long as the one I have serves all the purpose intended for. I 'invest' in long term gains such as property, land, investments and others. I enjoy my nice high end luxury residences, but do not mind driving a local car and use a cheapo hand phone. Heck in one of my condo, I park my proton next to 5 series BMW and i do not feel anything strange about it, nor any peer pressure.

So you don't have to intentionally 'save', but all you need is a spend on the right things that enhance and not depreciate your net worth. It's the mentality that counts. Peer pressure is just an excuse for your lack of self control.

This post has been edited by gark: May 7 2009, 09:16 AM

Like I say, I do not have peer pressure as items not perceived as 'investment grade' do not interest me.

Calculated, I use approximately 35% of my NETT income (after tax and EPF) for my day to day living expenses (food, petrol, entertainment, medical, etc etc), then i 'invest' 50% of my nett income into properties, which returns back at least 25% in rental income. Anyway my properties has already appreciated 30%-40% in value already, so another 10 years or so, the properties going to pay itself back.

For the rest 15% + 25% rental income i budget some for rainy day (cash <5%) and the rest goes into my investment (which i manage myself to save commission). I rarely ever use credit card (in fact my card company refuse to give me renewal cards unless i request), I do not take any personal loan nor have any car loan.

By no means we live like a scrounge, we do what normal family do, like go out for weekend dinners and yearly holidays, it is just that we allocate our money wisely. By allocating wisely means, we spend on the perceived value of the item, like a car is to get you from one place to other, so why do you have to buy an expensive imported car and also a phone is to make phone calls, so do you really need an iPhone? Clothes is to protect your body, so do you have to buy designer clothes/shoes/bags? These are just excuses to show off.

So I do maintain that, peer pressure is due to lack of self control.

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Added on May 12, 2009, 9:16 amHave you seen the interest rate for personal loan, especially unsecured personal loan? If ever resort to such loans for the longer term (unless for short term bridging 1-2 months) you might as well be working for the bank as you will never secure financial freedom. Personal and credit card loans are the worst of the worst financial options you can ever consider.

This post has been edited by gark: May 12 2009, 09:16 AM

Wah.. if got such investment lying around, I am sure there will be no more poor people in this world.

Seriously, returns are correlated to risks, the higher the returns you want, the higher the risk. Most people underestimate their risk tolerance, burned once and they shy out of any investments, i am sure you have seen loads of these cases.

Most 'agent' do encourage people to take higher risk cause there where's the biggest commission is coming from. Got one colleague dumps all his retirement EPF withdrawal in china fund in mid 2007, based on the recommendation of his agent that 'guarantees' sure win one! Showed him all kind of charts and 'predicts' double the investment in a couple of years. Now..... i think he wants to 'murder' his agent.

So the moral of the story, know your risk tolerance before you play the 'game'!

This post has been edited by gark: May 14 2009, 09:39 PM

IMHO, you should not increase your debt to pay off your current debt, this way your bad debts will never end for the next 15 to 20 years. If I am in your shoes, I will pare down my expenses to minimum, cut off any non essential bills and be tough and last through the next couple of months. If it may be then you might need to cut off your car loan and insurance. Get the money and pay off your debts at the bank, as these personal loans have very high interest rate. Then work it out with your friend to pay off rm 500 per month and in 3 years you will be debt free and can start fresh.

Unfortunately there are no 'cheap' index funds for you to invest in Malaysia. Most of the index fund here charge the same as an active fund. Also the index fund variety is extremely poor, only concentrate on Malaysia. For Malaysia low cost index fund you have to buy ETF from the stock market or for variety you have to venture overseas. Too many local UTC need to cari makan.... so there are very less low cost options.

This post has been edited by gark: Jan 5 2010, 05:38 PM

Emm the entry cost might be low, but the annual management charge of 1.6% is not exactly cheap. Index fund need to have management fees <0.8% to make it worthwhile.

Oooii, cari loan or cari wife?

There are lots of investment which gives earning of more than 3%. If you want low risk investment, then you can choose AS1M/ASB or bond funds which will get you around 5% earnings. If you want riskier stuff you may go for unit trusts or stock market. Anyway always understand what you invest in.

For other less risky investments that can yield about 5% will be bond funds. Other than that, other investment will be more risky. ASB can be considered as they have good risk/reward ratio.

I have always hedged my money in various currency, just in case a 1997/1998 happen to us again, where our money is heavily devalued. I set aside 30% of my investment in Singapore Dollars and another 20% in other currency. So far since independent from Malaysia, Singapore Dollar has been going up against Malaysian Ringgit, and that is a 40 year track record! Another reason why Singapore is not so depended on a weak currency because they are not a manufacturing industry, but a service industry and import dependent. If the currency are weak, then it will kill their economy. Also another point is that Singapore maintain a stronger currency reserve compared to Malaysia. Oh yeah I am holding on to some Yuan as well, but don't know when they will float the currency. Anyway currency hedging is very risky... but i think by not hedging it will be worse.

P/S Just in case of a 'you tak suka, you keluar' happens, at least i still have some backup money to depend on.

This post has been edited by gark: Jan 18 2010, 12:06 PM

But not necessary true. Even though i have the money to buy a car with full cash, I will still choose to buy with max loan. The reason is that the interest rate are considered quite low nowadays and there are now import cars with lower interest rate for promotion. While I am paying for the long car loan, the extra money I have will be invested separately to get much much higher gains, thus earning positive returns. This is able to be done now because of the historically low lending rate we are having now. Anyway car is a depreciating item, which will write off the full value after 10 years, so can never be considered as an investment item.

This post has been edited by gark: Jan 19 2010, 06:33 PM

Carsonoel,

Well congratulations that you are willing to take the first step to manage your finances. The first step you need to do is to decide how much of your salary that you wish to save, we are suggesting that 20% of your take home salary is a good amount. The total is RM 1,600 x 0.2 = RM 320 per month, you may want to save more but not less than that amount. Update the total every year increasing with your salary. The rest of your money (805) can be spent as you see fit.

You may want to save the money by opening a separate bank account at another bank without an ATM card, this will be your 'savings' bank. Go to your main bank and set up and standing instruction auto debit to your "savings" bank every month, that way the money is automatically transferred and you are not inclined to transfer it.

Keep the money in your 'savings' account until you have at least RM 1-2k, then you may want to put the money into a FD account with your 'savings' bank. Keep a 1 month rolling FD account with interest re-invested option, do not opt for any interest to you bank account. Once you have at least 3 to 6 month of your salary in the FD account, then keep the FD account running and do not add anymore to it. This will be your emergency fund which you can withdraw only during real emergencies, like you got fired or falls sick.

Once your FD account has the requisite amount, then you may opt to invest the rest of your money in your "savings" bank as you see fit. But prepare to read up on the risk of investment before you proceed. You may invest in the several type of investment as below. You may opt to invest in an income generating property once you have sufficient earning power and capital. In the mean time stick to the inbvestments below.

1. Low Risk - ASB, AS1M etc. (~5% pa)
2. Low/Medium Risk - Bond Funds (~6% pa)
3. Medium Risk - Equity Funds (~ 8% pa)
4. Medium/High Risk - Stock Market
5. High Risk - Gold / Warrants

Since you are young, have no dependents and earning salary, you may put your excess funds in the low to medium risk catagory. If you are learned enough and have more experience, then you can got for higher risk investments.

If you have dependents, then you might need to invest in premium only term life insurance to ensure that you can provide for them in case anything happens to you. I would not advocate mixing your investment with your insurance.

Good luck forming your investment plan.



This post has been edited by gark: Jan 25 2010, 02:06 PM

Never read RDPD before because it is too basic, the first investment book I read is titled " Random walk down wall street", a very good book to those who want to learn more about investment.

Crossfire,

For your monthly savings suggest that you save a minimum of 20% every month. For you emergency funds, save 3-6 months worth of salary in FD, then the remaining cash you can invest in long term investment. Any dividend and profit from your investment you must not cash out but return to the investment, that way compound interest can do wonders.But as for every investment, study and know what you are getting into. A little bit of financial knowledge goes a long way.

There are many types of mutual funds, each of the funds have different strategies with a different risk and reward positions. That is why even with the same fund house have multiple funds for you to choose. Here are some basic funds combination widely available in Malaysia.

1. Money Market - Typically the fund will invest in Short and Long Term Fixed deposits and NID's typically you expect to earn nearly or slightly higher than fixed deposit. This is a very safe investment.

2. Bond - Typically the fund will invest in commercial bonds - which are loans to companies in Malaysia. These bonds will pay interest according to the ratings and the length of bonds. Typically you can expect to earn 1-2% better than FD. However there is some risk if interest rate goes up, in which you bond holdings will fall slightly.

3. Equities - Typically the fund will invest in open market stocks and warrants. The fund will have a manager who will monitor, buy and sell stock with an objective to gain dividends and capital gains. Typically have good returns during booming time but however during poor market conditions, you can expect to lose money from these funds.

4. Balanced - Invest roughly half of each bond and equities. Less volatile, but can still lose money.

The above can be further be diversified to specific geographical locations and themes. For example, you can have an equity fund which specialize in China stocks for example or specialize in emerging markets. Themes can range from fund specialize in commodities company or international gold/oil producing companies. Anyway read the prospectus, audited accounts and fact sheets before making a decision to buy. Not all funds are created equal.

CIMB Max Invest Save apparently invest in a multi strategy fund (CIMB Evergreen) which onvest in all instruments according to the managers strategy which includes short/long international stocks, bonds, futures, commodities, real estate, forex and hedge fund. The weightings will change according to the strategy the manager thinks is the best. However as for all hedge funds, the fess will be quite steep.

Read up before you invest, a little financial knowledge goes a long way.

Build up emergency fund of 3-6 month salary and put into FD. This will be your emergency fund for any unforeseen circumstances. As a ballpark figure, you can reserve 20%-25% of your income as savings/investment and 5%-10% as insurance.

For investment, you may opt for managed funds if you are new, be it equity or bond funds. If you are not sure and is risk adverse you can invest 50%/50% in equity and bond. Only if you have learned enough then you may diversify your funds or go into actual stock holding. Suggest 0.5 to 1 years to learn up about investment before you go to stocks. You may aim at about 8%-12% annual compounded gains.

For insurance, if you have dependents then you need to insure heavily. If not, basic insurance will do. There are many types of insurance, look at what you need will be probably, term life and hospitalization. You do not need investment linked or savings insurance as you will be doing your own investment, and generally ILP is very expensive. Pay your premium only.

Before you invest read up on general investment spend 1-2 months exploring your options and read up on investments. Suggest to read 'A random walk' by Burton G. Malkiel as a basic beginner read and also personal money magazine, to look at the the lipper and morningstar fund rankings.

Lastly don;t believe 100% what any investment agent tells you, there is no free lunch. You are solely responsible for your own investment so take a proactive step.

This post has been edited by gark: Feb 23 2010, 08:56 AM

I have this rule of thumb, if anything less than 5% p.a. borrow, anything more than 5% p.a. invest. If inflation reach 5%, run for the hills...

This post has been edited by gark: Apr 12 2010, 09:29 PM

Nope I don't use leverage at all for investments.. too dangerous... . I only use leverage for properties.

This post has been edited by gark: Apr 12 2010, 09:36 PM

Got a half share of commercial and one residential for investment. For the commercial one, i still remember have to pay an 'agent' RM 200 to secure third place at the opening sales. The 'agent' lined up for 2 days for me. For me the commercial is yielding only 3.5% gross while the residential is yielding 7.2% gross. Lucky can still break even...

This post has been edited by gark: Apr 12 2010, 10:21 PM