Financial Management

[initialM]

I think now is the best time to discuss over this issue wt current economy situation.Actuall I would like to seek opinion & advice from members. Would like to know how good is my current financial in order for me to make wise decision. Hope I can own & still enjoy BMW after my retirement:love: 1) What is the minimum cash amount (saving) anyone should have at any point of time? 2) Given X amount of loan (debt) & Y amount of cash, is it better to reduce/settle the loan or use the cash for investment or just keep it. Any more opinion & input is very much welcome for the benefit of all.:top:

 

[Fahami]

An ideal as recommended by our religous is to divide by 3 parts, 1part is for foods & expenses, 1part for other/misc, 1part is for future(saving)..

Regards - Fahami

 

[initialM]

An ideal as recommended by our religous is to divide by 3 parts, 1part is for foods & expenses, 1part for other/misc, 1part is for future(saving)..

Regards - Fahami

I believe this is more on the income. Anymore opinion?

 

[loafer]

I believe question no.1 is too subjective. It's different with everyone and there is no definite answer for this.

For question no.2, I'd rather settle debts first.

 

[tamade7]

1) What is the minimum cash amount (saving) anyone should have at any point of time?
10k for those who just started working < 5 yrs. Must be more as the yrs progress. I would say each year one should save 30% of its net income.

2) Given X amount of loan (debt) & Y amount of cash, is it better to reduce/settle the loan or use the cash for investment or just keep it.
Reduce the debt if you are not investing. If your investment gives higher return than your debt interest then should just invest.

 

[initialM]

I believe question no.1 is too subjective. It's different with everyone and there is no definite answer for this.

For question no.2, I'd rather settle debts first.

Agreed on No. 1. So for the sake of discussion here are the hypotetical eg:

Debt
1. House- RM140k
2. Car - RM30K

Cash/saving - RM100k.

For No 2. Yup it best to be debt free but having cash in hand gives kind of security & confidence. As bro Tamade opinion to invest if return is higher than interest of loan but investment comes wt risk. Thanks for all the opinions:top:

 

[mikeyew]

Agreed on No. 1. So for the sake of discussion here are the hypotetical eg:

Debt
1. House- RM140k
2. Car - RM30K

Cash/saving - RM100k.

For No 2. Yup it best to be debt free but having cash in hand gives kind of security & confidence. As bro Tamade opinion to invest if return is higher than interest of loan but investment comes wt risk. Thanks for all the opinions:top:

I would use RM70K to settle the house loan and keep RM30K cash for contingencies. By doing this,
you willbe able to reduce your loan tenure by half thus saving thousands in interest.

 

[funfer_fahrer]

I think now is the best time to discuss over this issue wt current economy situation.
Actuall I would like to seek opinion & advice from members. Would like to know how good is my current financial in order for me to make wise decision. Hope I can own & still enjoy BMW after my retirement:love:

1) What is the minimum cash amount (saving) anyone should have at any point of time?
A minimum of 6 months salary intact. The more you have in cash the better. Why six months? Because, if anything should happen to you the insurance benefits will only arrive after six months.

2) Given X amount of loan (debt) & Y amount of cash, is it better to reduce/settle the loan or use the cash for investment or just keep it.

Reduce the following debt first, in descending order:

1) Credit card debt
2) Personal loan
3) Housing loan
4) Car loan

Once you settle 1) and 2) you can start consider investing because it is not easy to find an investment that gives a higher interest than the credit card interest.

In this current economic situation, it is better to settle whatever existing loan you have rather than looking for new loans. Unless, you come across a very very good investment deal such as 50% discount for a semi-D house in Setia Alam. Upgrading to a new ride is not an investment.




Any more opinion & input is very much welcome for the benefit of all.:top:

my 2 cents

 

[funfer_fahrer]

Agreed on No. 1. So for the sake of discussion here are the hypotetical eg:

Debt
1. House- RM140k
2. Car - RM30K

Cash/saving - RM100k.

For No 2. Yup it best to be debt free but having cash in hand gives kind of security & confidence. As bro Tamade opinion to invest if return is higher than interest of loan but investment comes wt risk. Thanks for all the opinions:top:

1) I would refinance the house with a lower interest while maintaining the remaining number of tenure.

2) I would use my account 2 EPF to pay my housing loan while the government still allows me to do so. (I heard there are plans from the Govt to treat the EPF as a pension scheme)

3) If I don't have EPF. I'd pay 50K to the housing loan after I refinance the house to a daily rest interest (not the revolving credit type). Then, I started paying my loan every fortnightly instead of every month.

 

[initialM]

TQ Bro FF for yr 2 cents:top:. One of the reason I'm askin these info coz I'm buying another car to replace my sold E36. I dun hv credit card debt or personal loan. Only 2 houses & 1 car loan & all these installment is less than 2.2k a mth. 1 house under staff loan & another normal loan. Plan to refinance as now int rate lower compare last time to reduce tenure, loan amount & if possible monthly. How accurate is govt plan on the EPF? I guess I better withdraw to reduce my housing loan. Been contemplating to do small business but not sure yet. Anyway I still need another car. Only that either BMW or not. I guess u know my answer hehehe

 

[umeersipo]

Hey,

I think it is better for you to take a car loan. :listen: One of my uncle too was in the same situation as you are now and he was feeling upset after his retirement as well as he was little bit tight on his economy, however, he prefered to have a car to do some self-business as well as to go here and there, So, I suggested him to take a car loan and he had taken it and earn something and now the car loan had been settled, he is there happy with the car, Try that way.... it will work out for you.

Hope my :stupid:idea helps you, :wink:

Cheers,
UmeerSipo

 

[XXX]

the answer is RECYCLE...


Sound Investment Advice



If you had bought $1000.00 worth of Nortel stock one year ago, it would now be worth $49.00.
With Enron, you would have $16.50 of the original $1,000.00.
With Worldcom, you would have less than $5.00 left.
If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00.
Based on the above, my current investment advice is to drink heavily and recycle.

 

[initialM]

the answer is RECYCLE...


Sound Investment Advice



If you had bought $1000.00 worth of Nortel stock one year ago, it would now be worth $49.00.
With Enron, you would have $16.50 of the original $1,000.00.
With Worldcom, you would have less than $5.00 left.
If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00.
Based on the above, my current investment advice is to drink heavily and recycle.

Bro,

Reading yr post already make me drunk lar:vollkommenauf:

 

[anxious]

Agreed a new ride is NOT AN INVESTMENT, at best you can consider it a reward.

So b4 u decide to "reward" urself, ask urself:

i) Do I deserve to reward myself?

ii) Can I afford to reward myself?

 

[funfer_fahrer]

Agreed a new ride is NOT AN INVESTMENT, at best you can consider it a reward.

So b4 u decide to "reward" urself, ask urself:

i) Do I deserve to reward myself?

ii) Can I afford to reward myself?

Reward or award?

 

[initialM]

Of course new ride is not an investment. In my case I need another car to replace my sold E36 last year. For me car is my passion & hobby which I consider some kind of reward after all the hard work & sacrifice for more than a decade. Sumore I'm not the type that overspent & always careful wt my expenses. Just wanna have some opinion to help my decision. Thanks:top:

 

[shamkasio]

Interesting topic..

Good luck in your search of financial security. Actually I have no solution to offer as I also in search of the thing. However, if you are looking for long term investment with what I would say almost no risk, visit www.kitco/charts/livegold.html (check out the last 2 charts)..