Need advice for the next 5 years

[yourfatcousin]

Hello kawan-kawan! I'm a 27 y/o trying to get my finances in order before its too late. Some context on my current financial situation:

Been working for 2 years, first year I basically saved nothing and was quite reckless with my money. Reality hits hard when I had to take over commitments that were previously paid for by my parents. Started this year, with RM0 in savings (used to spend my paycheck throughout the month) and now I've decided to get my shit together financially.

1) Current Pay = RM4700 (increment to RM5300 end of June, yay!)

2) Essential expenses = ~RM1300 (rent/utilities/internet) + ~RM1100 (food)

3) Non-essential expenses = RM500-RM700 (petrol/entertainment/etc)

4) Savings AC = RM1300, FD = RM1000, Versa Cash = RM2000, Unit Trust = RM200

How do I proceed from here? Build my emergency funds in my savings AC or Versa Cash? Bet it all on black in Genting? Expand into ETFs (I have not done any research on this)? A guiding hand would be greatly appreciated, thanks in advance!

 

[revtyl]

@yourfatcousin All on black

 

[sheshell675]

@revtyl Dear OP, please take this advice. This is the most simple yet useful advice I ever seen on this channel. You got 50% of success rate.

 

[jesseb04]

@sheshell675 U forgot to include 0 or 00, my friend.

 

[012546]

@revtyl

 

[holyspirit2014]

@yourfatcousin Man, how do you spend 1100 on food? I barely spend 600 on food every month.

That aside, I guess the best bet would be to build up emergency funds up to hit a value that you are comfortable with (Some people are ok with 10k, some 50k. I will leave that to you).

After that, perhaps you can consider investing. It is a pretty unpredictable time atm, so don't go all in with investing. Financial gurus will ask you to "go broke" every year. Don't believe them. We are nowhere their lifestyle. Just invest a certain portion of your income each month. Imo, anywhere in the 10-20% range is ideal.

Once you are overall better, you can consider purchasing a house for investment/own stay. But this is another story altogether. The general idea at that point will be to never believe real estate agents. They will almost always lie to just get that deal done because most of them are paid by commissions. So, please do your own research.

Disclaimer: Everything I said here are merely suggestions and not financial advice.

 

[tlc1]

@holyspirit2014 hard to save on food in subang/pj area unless you really cook urself everyday. mixed rice in our area never goes below rm8, even for my boss who order with no rice. mine usually 9 or 10 cos i eat alot and with drinks to wash it down + not everyday mixed rice meals come out to a little over 30 per day at minimum. weekends even more, end up budget for eating almost 1.2k per mo

 

[yourfatcousin]

@holyspirit2014 I really love food and trying all kinds of new stuff. I suppose RM36/day for food is quite extra and I can definitely cut some expenses there.

Thank you for your insight!

 

[dazza_73]

@yourfatcousin I truly understand the love for food part. I don't eat out often but I do eat expensive. Had steak for lunch, kbbq for dinner today. The occassional bubble tea and fancy western brunch and i eat Chinese hot pot on a weekly basis. I allocate 2 - 2.5k per month for food alone.

Food is a guilty pleasure and as much as we try to save, we all have a motivating factor to keep us going, and for both me and you, that's probably food. Since we are likely the people who find joy in eating food, I wont ask you to cut on food expense. Keep going, and enjoy the life that food have to offer.

 

[holyspirit2014]

@yourfatcousin Now that you mention it, yeah it makes sense. Adjust your expenses as per your wish. No need to take the word of a random dude on reddit to cut cost. At the end of the day, we need to enjoy ourselves. It just happens your window of enjoyment is food. Mine is usually free games (they are not free, they cost your sanity) such as CoD, ML, WR and so on.

 

[012546]

@holyspirit2014 …and mine is beer.

 

[jmh96]

@holyspirit2014 If you have a girlfriend easy hit 1k on food

 

[mkdrive2]

@yourfatcousin 1)Build your emergency fund first. At least 3-6 months salary. Maybe can build further to 6-9 months salary.

2)cut down a bit on expenses so that target funds can be achieved much earlier.

3) open up asb/asn ..best to force saving a fixed portion of your salary into these acc. Much lower risk.
Once a desirable target amount is achieved then can start to move towards a more riskier investment.

 

[yourfatcousin]

@mkdrive2 Thanks for your input!

Any specific reason to go with ASB/ASN over conventional FD or MMF like Versa Cash?

 

[mkdrive2]

@yourfatcousin Management fees for mmf
Return from asb/asn/asm as for now slightly better than fd.
Its only my opinion..if im just starting out. I really dont want the fees to slowly eat up my capital

 

[daniellehunt]

@yourfatcousin Hey Goobbie, the easiest way now is after your salary increment, save that rm600 every month, you can start from there without changing your current lifestyle.

If you want, you can downgrade a bit, on entertainment or food. then save extra rm200-300.

Saving rm 600 for 12 months will net you rm7200 (before tax). Do hold yourself back though, from "rewarding" yourself with expensive vacation, and new toys

 

[yourfatcousin]

@daniellehunt Oh yikes, its as if you can see my future plans!

Before making this thread I was going save the additional RM600/month for a trip overseas by the end of next year. I suppose its still doable but I'll need to be more mindful on the immediate goal of my emergency fund.

Thanks!

 

[trm16]

@yourfatcousin 1) atleast 3-6 months emergency funds

2) Plan out a budget for every category, cut down unnecessary expenses

U can cut down on food, thats ridiculously high (for a single person I presume). I normally spend RM 750 ish on food, mostly deliveries like Grab, so you can definitely survive around with RM 650 ish.

Split your petrol from your entertainment and misc expenses to get a clearer overview on what you're spending. It is unclear to me how much you're spending for entertainment because of your consolidation of these distinct categories under one, but my guess anything above RM 250 is too high.

3) Doesnt matter too much where u park ur emergency funds, as long as its easily liquidable then go for it.

4) Address your debts. Car debts, PTPTN, CC debts.

5) Solve your emergency fund, budgeting, and your debts and only then consider investing. Like others said, if you're bumi take advantage of ASB. You'll need to do your own research on what investments is available out there and what is relevant to your current situation based on your risk appetite and capital.

 

[yourfatcousin]

@trm16 Hey, thanks for the insight!

The recurring sentiment I'm getting is that my food expenses is abnormal, and yes its just for a single person haha. Gotcha on splitting my expenses further and budgeting them. I've been using a money tracker app for the past year and should have enough data to get some averages by expense category.

I'm fortunate and thankful to be debt-free, car is paid off, no student loans and no CC at the moment. As a side question, should I consider signing up for a CC at this point in time to build a credit score? From what I understand (or have been told), Malaysian banks typically don't really care about your CTOS and will handout a housing loan for first time house buyers relatively easily.

 

[trm16]

@yourfatcousin

As a side question, should I consider signing up for a CC at this point in time to build a credit score?

Yes, but only if you understand how CC works. Its not free money, its the bank's money loaned to you which u have to pay back every month on what you spent. Be careful with CCs, late repayment and interest rates will compound and affect you heavily if you dont put it under control. My advice is to be discipline and pay it off every month.

Malaysian banks typically don't really care about your CTOS

In my case, they do care about your CTOS, that's affecting whether or not they would give the loan out to you as well as the interest rates that they offer to you. It shows that you make timely repayments, less likely to default on the loan.

It is always important to keep your CTOS score at a optimum level, and thats by ensuring that you have no late payment fees (e.g. astro, unifi, mobile plans, PTPTN) because although it may not guarantee success, its way better than not having it at all.