after 1.5 years of housemanship , I finally bought my own car.

  my budget is below RM50k for a car
 ( to tally with my financial management according to Malaysia's houseman salary )

 popular choice of first car as a houseman based on observation I've made:
 - brand new Honda City / Jazz  - Approx RM80k
 - some are daring enough to even buy a brand new Honda HR-V , Honda Civic,
   which costs RM100k-RM150K OTR

these cars , considering 9 years installment , can easily reach RM800-RM1500 monthly
considering gross salary of HO of RM4500/month ,
RM1500/RM4500 x 100 =  33% of monthly income!

*then they complaint of no money while i'm busy buying flight tickets
  for my travel trips LOL
.........................................................................

why I choose this proton Inspira which costs me RM40k
( my model is a used full Spec 2011  Inspira 2.0L Premium , registered in 2012 )

- It's actually a rebadged  Mitsubishi Lancer GT.
  same 2.0L engine , same gearbox , only minor differences between these cars
  brand new Mitsubishi Lancer : RM120k
  Brand new Proton Inspira :RM90k
  used 2011 Mitsubishi Lancer : RM60k
  used 2011 Proton Inspira : RM35-40k

  i saved  RM80k when buying a used Inspira instead of
  the other twin Mitsubishi Lancer!

- full spec , i got full leather seats , paddle shifters , touchscreen entertainment
  console with reverse camera & GPS , 18" wheels ,
  various electronics here and there  of which similar offerings from
  brand new Honda Civic will easily cost RM120k-RM150k
- police use this car. which means it's fast , reliable , and readily available
  spare parts
- not exceeding 2.0L , means I can still benefit from a lower bracket of
  road tax. Road tax in Malaysia generally increase in a more significant fashion
  above 2.0L
  e.g road tax
  Honda City 1.5L = RM90
  Honda Civic 1.8L = RM280
  Honda Civic 2.0L / Inspira 2.0L = RM380

  then above 2.0L , it goes crazy
  Honda Accord 2.4L = RM780
  Nissan Fairlady 3.5L = RM4380
.........................................................................

which car is affordable for us?

price = Monthly Salary x 12month

say , RM4500 for houseman
RM 4500 x 12 =  RM54000
Petrol RM300 x 12 = RM3600/year


car price = RM54000- RM3600 = RM50400
this , excludes parking tickets , toll , roadtax , maintenance etc

so it's safe to say , a maximum price range affordable for a houseman is
RM40000-RM50000 , of which it the choice narrows down to
a brand new MyVi / Iriz or a selection of used car .

but consider also safety factor. You don't want to be in a car
that crumbles like a biscuit tin in a car accident.

consider Full spec used car with all the safety features VS
brand new lower spec car but with  less features but at the same price.
which one do u think gives more value for money?

but of course , u have the advantage of average 5 years warranty
when you buy a brand new car
try searching from Mudah.my , u'll see most people will sell
their expensive cars after 5 years of usage ,
just right after the warranty ends. this gives u a double-edged sword
option , either u'll have a premium used car at a lower price ,
or a car in a  bad shape but no more under warranty.

obvious example is Ford Fiesta / VW Polo , known for
gear box problem.
U'll see that people will sell these cars a a very cheap price
after 5 years warranty ends , because repairing the gearbox   after that
 is a headache.

..............................................................................



other posts regarding my finance base , click here


p/s
i personally think the most value for money car is Perodua Kelisa.
very good fuel economy  , low road tax , low cost maintenence ,
easy to find parking spots in cities.
and the price never drops less than RM10k regardless 
the manufacturing years.
U buy Kelisa for RM10K now , u can still sell at the same price
in the future.
and, i don't buy RM4k iPhones.


  

  

              retirement at age 50 , supplemented with variable amount
              of PRS contributions


                retire earlier at age 40-45 years


                for salary of RM3000 per month.


  *based on guranteed minimum 2.5% KWSP Dividend

    you need at least RM192000 in savings
    to live with RM800/month for another 20 years
    till you die at age 75 years , after retirement at age 55 years.

   about 70% of EPF account holders has less than RM50k
   in savings at age 55 years , and 50% of them finishes
   all the savings within 5 years.

    look for Shariah Compliance Private Retirement Scheme ( PRS )
    in addition to the existing EPF contributions
    of 11% personal contribution and13% by employer.




   to have RM 1 Million in cash at age 55 years :
   ( based on 2.5% guranteed dividend for KWSP )

    - gross salary RM5000/month , with 3% increment P.A
    - current age : 30 years
    - retirement age : 55 years
    - EPF amount at age 30 years : RM 0.00
    - Total EPF contributions : 23% ( 11% + 13% ) , with 2.5% returm P.A
    - PRS contribution : 7.5 % @ RM375 per month minimum ,
                                      and adjusted according to salary increment P.A
                                      expected return from PRS of 6% P.A

   thus , for a salary of RM5000 per month ,
   by contributing minimum 7.5% from salary per month ,
   by the age 55 years you'll get :

   -  EPF contribution : RM669600
   -  PRS Fund : RM330400
   - total : approx RM 1 Million.

  plus , you can get income tax exemption for RM3000/year
  for the PRS contribution on top of the RM6000/year
  income tax exemption for the mandatory EPF contribution
  and life insurance policies.

   allocate funds from salary
   for EPF and PRS with 10 10 80 rule : click here

  more about PRS : click here

 " When God blesses you financially , don't raise your
    standards of living , but raise your standards of GIVING "

  

    for those who smoke , please consider to quit smoking ,
    and save two years from paying RM600 monthly.

     e.g / home loan RM120k , 4.5% P.A
             RM608 monthly for 30 years.

            if you quit smoking , and use the RM20 cost of a pack of cigarrette
            to pay extra RM20 monthly into the RM608 monthly repayment
            (RM608+RM20= RM628) , your tenure will end at 28years
            only instead of 30 years.


        saving projection and compound interest.
      

             borrow less , pay more monthly , save years and a lot of money.

    reading books regarding finance then extracting important point
    and make a downloadable and printable copy for my
    future reference.

10-10-80 Rule



 2015 revised 10 10 80 rule

 2015 second revision.
 recalculated budget for income tax


income statement and cashflow quadrant








   assuming nett salary of RM4000 per month :

   10-10-80 Rule
    - 10% @ RM400 for savings
    - 10% @ RM400 for charity , parents etc
    - 80% @ RM3200 for expenses.
        - 30% @ RM 1200 for mortgage
        - 15% @ RM 600 for car loan
        - 35% @ RM1400 for others

   not more than 50% of salary should be spent for loans.
    - 30% for mortgage
    - 20 % for non-mortgage loans e.g / car loan , personal loans etc

  taking 15% @ RM600 for car loan :
   - petrol : RM200 / month
   - insurance / road tax : RM70/month ( assuming RM800 per year )
   - car loan repayment : RM330 / month

  with RM330 remaining per month ( toll & parking not included though ) ,
  the only affordable car is
  RM25k car ( RM340 monthly , RM2500 D.P , 7 years at 3.85% interest )
  RM30k car ( RM340 monthly , RM3000 D.P , 9 years at 3.85% interest )

 with price range of RM25-30k car , some options available are
 new car : Perodua Axia G 1.0 , Proton Saga FLX
 used car : 2008 Proton Persona , 2012 MyVi , 2008 Honda City


housemanship.
I see the popular choice of car among my HO friends are
Honda City / Honda Jazz.
assuming the average price for these cars are RM80k ,

Honda City 1.5L / Jazz 1.5L 2015
RM72k loan , RM8k DP , 3.85% for 9 years = RM900 monthly.

i wonder how much they could save each month paying
this much amount monthly.
I'd rather buy cheaper new car / second hand car , and save
more with the extra money.

e.g / second hand 2012 Proton Inspira 2.0L  / Toyota Vios " Dugong "
        RM45k , RM4500 DP , 3.85% for 5 years = RM800 monthly
        but I will not have to spend a penny anymore after 5 years
        when the loan term ended.

        continue to save RM800 monthly for another 4 years ,
        RM800 x 48months = RM38400
        with RM38k , i can use it as a downpayment for
        a house worth RM300k , while the guy with th
        brand new Honda Jazz / City is still struggling to
        finish his 9 years car loan term.

        i can even save more if I buy RM20k car or below ,
        like a second hand Myvi or Perodua Kelisa.

   
   still asking around and doing research for my first car to
   purchase anyway.

   before getting a house loan  :

    - affaordable loan repayment is 1/3 from salary @ 33%
        - 30% for housing loan + 20% for non-mortgage loans ,
           so maximum is 50% from salary just to pay loans.
    - reserve. at least 3 months salary in cash for emergency
    - Look for flexibility ( flexi ) loan instead of just loan with low interest.
     pay extra per month with the flexi loan to reduce the interest and principal
     faster.

    - look for syariah compliance Al Bai Bithaman Ajil but with flexi scheme
    instead of fixed payment monthly.

    the key is to pay more , and pay early .

     - pay as soon as loan approved , even before maturity period.
     - pay extra per month , to reduce the principal faster.
       e.g /
              instead of RM1000 per month , pay RM1100 monthly.
              loan period will reduce from 20 years to 15.5 years
              * not an actual figure , just to put things into perspective
     - pay on two-weekly basis. split the monthly amount into two ,
       then pay every two weeks.
       because in a year , there are 12 months , but 26 of two-weeks
       instead of 24 . so we pay 26 times instead 24 times a year , making
       the principal reduce faster.
     - pay extra when we get extra money e.g bonus.
      save at least 10% from extra income to pay house debt
     - withdraw from account 2 KWSP to pay house loan
     - maintain the same amount of payment even though
       the interest rate has reduced.
     - increase repayment amount when salary increases.
       maintain a 30% ratio from salary for housing loan.

   why pay more and pay early ?

   " when the interest part of the loan repayment has been paid ,
      any extra amount paid will reduce the principal for that month.
      subsequently the lesser pricipal leads to lesser interest for
      the next payment "

   I've been receiving wedding invitations from my peers for almost every
   months in 2013-2014 and the number is still counting.
   in 2013 and first half of 2014 only I had at least 20 same aged friends
   getting / already married.

   peer pressure is on. but I can't do anything because I'm not finished
   with my MBBS yet. and tougher years are coming ahead :
   2 years of housemanship in Malaysia.

  but on the positive side , getting settled down significantly later
  than most peers from another field of profession also means
  that I have more time to prepare and construct the foundation
  for my future.

  at this time being the main focus are :
  preparation for housemanship , finance and Marriage.

  and squeezing some time to achieve more in life , and doing things that I like to do :
  bmx , travel , trekking , adventures , fishing etc.
  because I have sacrificed a lot of things in youth time when
  enrolled into medicine course , and now I have this narrow window period
  to do those things i have missed. not to forget , Haji and Umrah also.

  I'm taking advantage of the vast varieties of books at
  significantly cheap price here in India.

constructing financial plan before my first
salary as a doctor next year.
expenses always increases day by day.
i believe that how much we earn every month
is not important , but how we manage it.

works smart , earn enough money.
and with enough money , i don't have to work
harder and sacrifice my precious time.


i don't think I'll be able to retain my skills as a doctor
when I get older , so i have to think of a way
to maintain my finance throughout my life.
and that is definitely not multilevel marketing.

sadly these financial skills are not taught in school.
Anyway , better start late than never.