Tag

malaysia

[SPONSORED] The Beginners Guide to Warrants in Malaysia

On 27 April 2019, I attended my first warrants-specific talk.

The event was called Demystifying Structured Warrants, which is apt tbh. I’m a complete beginner in this financial instrument. I know almost nothing about it. 

This was my second engagement with the Kenanga Investment Bank, after writing about the Market Outlook Symposium 2019: Smart Investing or Dare Betting? investment event back in January 2019.

I’m happy to report I liked two out of two Kenanga-organised events so far. Good content. No fluff, just lots of good info. Then they gave free food some more.

Like the first article, this is a sponsored post, but all opinions are mine. It’s great that I can share what I learned about warrants from the event, as someone completely new to the world.

#1 – What is warrants?

This is the textbook definition:

warrants in malaysia

Does that make sense to you? I kinda sorta understand… ish. It’s a very theoretical financial instrument. I feel like I’m learning quantum physics.

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The Real Answer to ‘How Much Should I Spend On A Car?’

How much should I spend on a car? I’ve thought about this question many, many times.

The answer is simple: whatever is the amount, I should make sure that I can afford it. Like every other purchase.

But it’s also not that simple, because if it is, how come 1 out of 4 bankruptcies in Malaysia is due to car loans?

If you’ve been wondering how much you should spend on a car and avoid it being repossessed by the bank, here are some answers. Thanks to all contributions from the RoR audience!

#1 – How many % of monthly salary to go towards car payment?

How much should a person spend on a car, actually?

Some said 15% of monthly salary just for the car instalment:

Tasya OmarIdeally, the monthly loan repayment should not be more than 15% of the monthly income. Of course, not everyone gets RM5k as their first salary. If one is disciplined enough to put aside RM800 per month – RM500 for monthly loan repayment, RM300 for the upkeep/ spare parts and whatnot – I think that should be ok.

Some said no more than 1/3 of their pay:

Jonathan Goh – Not more than 1/3 of their pay or the monthly repayment. If people follow the principle of partitioning their monthly wages, they will have enough to cover the petrol and car maintenance.

Let’s say a guy who brings home RM3k after deducting EPF. His monthly car payment should be RM1k. Now if he is savvy he will get a Myvi with a monthly payment of RM800. He now can save RM200 for the car in case of emergencies/auto insurance

Some base it on annual income, too:


(Effectively 8.33% of monthly salary for car instalment, and no more than 15% of monthly salary for all car expenses)

Amirah Nazarudin – I followed that the car price can be equivalent to 36 months of your salary, at most. I heard this advice after attending a seminar 3-4 years ago. Couldn’t remember who it was.

But to me, a car is a liability. I’ll try not to spend so much on it. Having Proton is good enough. If I do want to splurge I’ll go for Toyota or Honda.

(Effivetively up to 25% of monthly salary for car instalment)

So… it looks like it’s common to spend between 8-33% of your monthly salary on car payments. That looks like an okay amount right? You still have 67-92% of your salary to play around with.

No, not really, because…

#2 – Car ownership costs much, much more than you think

Your car instalment may be as cheap as a few hundred ringgit per month, but you need to pay for a bunch of other stuff too. Depending on variables like your car model and frequency of usage, you have to at least double or triple the car instalment amount.

You need to pay for the road tax. The car insurance. The car service and maintenance and car washes. The petrol and tolls.

Additionally, and unfortunately, car ownership is a major contributor to unexpected expenses too. Throughout the duration of car ownership, many will have to shell out money for major repairs after getting into accidents, to replace batteries and alternators, to fix the aircon, to get new tyres, to settle unexpected summons, and more.

So not only you need more money than you think for car-related expenses, it is essential to have emergency savings.

This prompted this rule of thumb by a RoR audience:

Viknesh Victor SekaranMy rule of thumb is to only buy the car you want if you wouldn’t think twice about the cost of changing all 4 tyres. For example, Vios continental tyres would cost around RM1k+ to replace. You can get more familiar with tyre prices by Googling the tyre specifications

#3 – The lower the cost of car ownership, the better

So by now you know that if you have RM1000 extra in your monthly budget, you shouldn’t get a car with RM1000 monthly instalment. You should instead get a car that costs, say, half that amount, or even less. Because you’re going to need the other half for the other car-related expenses.

There are two ways to reduce the cost of car ownership:

(1) Get a basic car with minimal cosmetic add-ons

Andaq FithryI spend very minimal on the basic. No extra, no accessories, no mods. Extra is want, not need. At my age, I don’t want to spend money on strut bars, gt-wings or performance kits. Those are extras. I’d rather spend on other kinds of extras like flood insurance, windshield coverage, etc.

(2) Buy a secondhand car and pay it in full

This works really well if you have savings. By paying for a car upfront and in full, you’re eliminating 5-7 years worth of monthly car instalment payments.

It’s a popular strategy among personal finance bloggers, too. Here are some that I know:

You can also combine (1) and (2) – that would significantly lower the cost of car ownership for sure!

#4 – What if the dream car that you really, really want is out of your budget?

My dad is a car guy, and while I don’t understand his love for cars, I know that it’s something that makes him really happy. I like seeing him happy.

I think it’s okay to want your dream car. If you can’t afford it now, then the solution is two words: delay gratification.

These guys suggested saving up and making a huge down payment for the car:

Calvin Boey – (To get your dream car,) delay the purchase by a year or two, place the money aside and put a huge downpayment.

Samuel JinI think owning a car you will really like to drive is important regardless of the price because modern vehicles are depreciating asset anyway. Save up enough to pay more on the downpayment so that instalment won’t be huge burden afterwards.

While these guys suggested avoiding car ownership first:

Moses Francis – Personal take is, if single you no need a car. You can just rely on Grab and trains. I’ve sold my car and never been happier. I believe the relationship status matters too (with car ownership). Especially if a person is married – they might have some emergencies with kids and can’t rely on Grab or public transports.
Caleb WoonFor me, I used a simple calculation. If the total amount used for public transport and ride-hailing such as Grab is less than the cost of owning a brand new Perodua Axia (petrol, instalment and other fees), then I won’t get a car yet. 

Last words

You may think that a car purchase is a practical decision. But let’s not forget it is also an emotional decision.

You may have these thoughts yourself:

  • I am cool and edgy, so I should get that cool and edgy car so everyone knows it (me).
  • I need freedom and convenience. And the ability to go anywhere I want. (me).
  • I have a family. I don’t want people to think I can’t provide for them.
  • I need to impress my clients. A cheap car won’t cut it.
  • I am single. Need to show potential partners that I have money.

All of the above are valid points. The car you choose does reflect your personal identity. You do want your family to be as comfortable as possible while travelling. Some clients you’re hoping to conduct business with do care about wealth and status.

But all of them may also push you to buy a car that’s out of your budget. And cause your bankruptcy.

Instead of ending this article with ‘don’t buy a car that you can’t afford to pay’ tone, I want to ask you this instead: what car do you want and why do you want it? What exactly about it is appealing for you?

Let me know in the comments section. A little bit of soul-searching and self-awareness exercise will do you good 🙂

Link Roundup #26: 10 Things to Know This Week

Accelerate your personal finance knowledge with this regular feature on Ringgit Oh Ringgit – the Link Roundup! I promise you’ll find these 10 links informational 🙂

1. 6 things you must organize to be healthy, wealthy, and happy – The Ladders

Sometimes I’m not sure if I’m a ‘go with the flow’ type of person, or an organised person. I guess I’m a little bit of both, like most people.

On a scale between 1-10, how well-organised are your environment, money, relationships, health/fitness, spiritual life and time? Answering that is like doing a regular checkup, a self-assessment.

If you’re giving yourself a low score, the checklist in the article is pretty helpful to get you back on the right track.

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Affordable Housing in Malaysia: 6 Alternatives to Consider

This article is dedicated to everyone who ever uttered the phrase: ‘I can’t afford housing in Malaysia, it’s so expensive!

Which, if I’m honest, is the majority of you, at one point or another. It’s one of your favourite complaints. The default, almost.

(You are right though. It is expensive, especially in Kuala Lumpur and Penang. According to Khazanah Research Institute, property prices in Malaysia is ‘severely unaffordable’ at 4.4 times the median annual household income in 2014. A more acceptable range is 3x.)

(Having said that, Malaysia’s housing market is nowhere near as bad as the Top 10 most unaffordable locations globally. Hong Kong is 20.9 times (!!!) the median annual household income as of 2018)

But still, ok, just because we’re not the worst doesn’t mean the situation is good for us. What can you do if you can’t afford the housing in Malaysia? What are your options when it comes to living situation?

Here are some alternatives.

#1 – Pick one: A Just-OK place in the city OR A Great place far from the city

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Malaysians Share Actual Unpopular Opinions About Money

It all started when I posted this on Ringgit Oh Ringgit’s Facebook and Twitter page:

It got some pretty freaking amazing answers. Rather than losing them forever in social media, I thought I’d compile them and turn it into unpopular opinions: money edition-article. Thank you so much for everyone who gave me permission to post their answers here.

Here are some unpopular opinions about money, in no particular order:

#1 – ASB and EPF will no longer deliver high returns

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How Zero Waste Malaysia Helps Me Save Money (& the Environment, A Little Bit)

Confession: I entered the zero waste world a few years ago for its money-saving potential.

It’s been great. The communities are helpful, warm, encouraging. I had fun testing and trying out new lifestyle changes inspired from members of the zero waste community, sustainable living community, low impact community and so on. Among others, they encouraged me to:

  • include more plants and grains in my diet,
  • use a menstrual cup,
  • carry my reusable water bottle when going out,
  • stay car-free,
  • keep used coffee grounds to use as fertiliser,
  • significantly reduce my fast-fashion shopping,
  • and even helped me stay smoke-free (no more cigarette butts waste!)
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Selling Online in Malaysia: My Book Sold Well So Here’s A Case Study

In February 2019, I released my first book, Money Stories from Malaysians Volume 1 after almost a year of working on it.

It made RM9.5k within 2 weeks.

selling online in malaysia

… Actually, it made over RM10k. I received some generous donations as well. For example..

I know. I didn’t believe it at first. Just stared at that text for a long time, digesting what just happened. And that’s not the only donation I received too. Including this amount, I can safely say that I’ve recovered all upfront costs, and then some.

To show you my gratitude, I would like to break down the details and behind-the-scenes of selling online in Malaysia in this article. My product is a book but you can apply the knowledge to anything else. Hope it’ll be useful for you, for your own ecommerce shop (now or future).

#1 – Calculating cost price – Beyond the printing cost

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Link Roundup #20: 10 Things to Know This Week

Accelerate your personal finance knowledge with this regular feature on Ringgit Oh Ringgit – the Link Roundup! I promise you’ll find these 10 links informational 🙂

1. 7 Ways To Deal With Burnout, According To Science – Bustle 

“There are.. three main elements to burnout: “exhaustion, cynicism (less identification with the job), and feelings of reduced professional ability.”

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[SPONSORED] I Asked Hard Questions to the CEO of Funding Societies Malaysia

What does Mr-Stingy, Dividend Magic, KC Lau, Blackbelt Millionaire and myself have in common? Aside from the fact that we all maintain websites with personal finance content, that is.

All of us do P2P financing as one of our investments. We lend money to companies.

In particular, and most strikingly, all of us chose Funding Societies Malaysia as the P2P financing platform of choice (note: referral code. You get RM50, I get RM50).

My experience with Funding Societies Malaysia so far

(scroll down if you just want to read the interview with Kah Meng)

When Funding Societies Malaysia contacted me for a collaboration opportunity, I was excited. I was already an existing user, with RM10,000 in my account.

funding societies malaysia
My dashboard
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How My Dream Home in Malaysia Would Look Like

I’d like to introduce to you one of my favourite books in the world, New Aging: Live smarter now to live better forever by Matthias Hollwich with Bruce Mau Design. Found it at the Big Bad Wolf Booksale some years back for RM12. One of the best purchases I ever made.

dream home in malaysia

New Aging is a guidebook to optimising how we live, how to design our lifestyle so that we encourage lifelong happiness, productivity and self-development. I used to fear the ageing process (as we all), but this book helped me reframe that thinking, and even develop a positive attitude towards it.

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