Monday, March 8, 2010

When you are 20’s

Life isn’t same anymore after you leave your university. If you are lucky your parent might support you extra month for your holiday. But if you are unlucky like me, you will start finding the best job suited to your area of expertise to earn for a living the moment you get your education recognition. On average most of the young people are starting their career life at the age of 24. Some are earlier but some are late. I’m pretty lucky started at the age of 20. Yes…I have been working for 10 years. It’s like speed of light. Things happen too fast for me but at least I have something in my hand now. How about you? What you have done to yourself for the past 10 years? Did you getting wealthier? More experience and knowledgeable? Or you are getting worst financially and started blaming surrounding environment? Let me share my view on what have this group has done to themselves financially that might wipe off their entire lifetime earnings.

What is the feeling you have after receiving your first salary from your 30 days of hard work? Are you happy with it? Is that enough? In general, I believe it’s enough as most of your daily expenses are subsidies by your parents. But what is the mistake that people always make at this junction? Buying a car!! Yes this is the biggest mistake that most of the youngest make simply because it’s a ‘depreciating” asset. Have you ever heard people making money buying car? Of course yes especially limited edition like Ferrari, Lamborghini, 911, Bugatti and Classic car.
bugatti100 2 283x300 When you are 20s

"Costing few millions"

But have you heard any salon car, Ninja King, or Pajero Car when up in terms of the value after few years driving? NEVER!! You must remember car is only for “transport” and it will not make you richer the moment you drive it. You will only gain if you are buying buses or taxi for commercial purposes. Otherwise, you are losing money every day not counting on your monthly petrol and maintenances yet which easily reach RM500 per month. Including your monthly bank installment say RM600 plus another monthly seasons parking of RM100. Virtually you are spending more than 40% your monthly income just to settle your transport problem (if you are earning RM3000 per month). This is excluding your foods and your entertainment.

Most of the time I feel shy whenever people talk and share their happy holiday overseas. Frankly my passport was not renew since last year as I know I will not go for travelling the next 2 years. I know life is fun and enjoying when you visited other places and with the further help from Air Asia, I believe it does lower our travelling expenses.
"Everyone can fly now"

"Everyone can fly now"

But it’s still not significant enough to convince myself that why I should spend that much of money for enjoyment. For me at the end of the day, whatever you spend for pleasure is equal to “zero”. Of course some of you might say the experience is different. But frankly how many of you will learn and remember while you travel? I don’t think so. I’m not here to restrict you from travelling but please bear in mind, your hard earn money is getting tough to save day by day. If you don’t capitalize on your current resources for investment, do you think you will still have the resources when you reach above 30’s? Hoping for your boss to increase your paid and bonuses so that you can start your first property investment? Stop dreaming ok… Life is all about you yourself.

Another mistake that the youngster group always make is buying a wrong property for owner occupied. I came across a lot of youngest buying big house for owner occupied. Some even worst spending their entire saving to renovate the whole house and furnish it with furniture but only 2 persons stay inside. Not only that, the wife also taking part renovating the whole kitchen ending up only cooks simply foods like Maggie Mee!!
"Commonly cook at youngster kitchen"

"Commonly cook at youngster kitchen"

Am I correct? Maybe? But this is what I see from people surrounding me. To own double storey terrace house now in KK easily costing you upfront cash of not less than RM82K or more. Let us analyze below case:
Mr. AA and Mrs. AA are newly married couple and their would like to buy a unit of DSTH at Kingfisher for RM300K. The breakdown of the costing would be:
Down payment 10%: RM30K
Legal Fees + Stamp duty for SPA: RM8K (estimated)
Loan agreement + Stamp Duty: RM4K (estimated)
Minor renovation: RM 20K (some built in cabinet)
Furniture: RM20K (including kitchen and living room)
But there are some problems that this young couple needs to settled before they can own their dream home that is:
1. To earn combined monthly income of not less than RM5K
2. To have upfront cash of RM80K
3. To have extra monthly cash flow of RM300-RM500 for utility bills and general maintenance
4. To get bank approval for 90% financing
I’m not discouraging you all from buying property for owner occupied. But please bought house which is affordable with reasonable monthly commitments and cash outflow. At least this will help you in increasing for other asset acquisition.

My advice to the youngster is that please do not waste your resource especially when you are young. Your hard earn money should work harder than yourself. You are the CEO for yourself. But if you fail to plan for yourself, do you think you going to have enjoying life when more and more commitments comes when you reach above 30’s? For me I always believe in 2/60 rules. Yes this CK rules. Do you want to suffer first 2 years then enjoy the rest of 60 years or you want to enjoy the first 2 year then suffer the rest of 60 years? Make your choices.


About This Blog

Was established since 20th Rejab 1430.
Just to educate myself.
`Sharing is Caring-The more you give,the more you get``

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`We are often afraid to do things until we are sure we will do them well.Therefore we don`t do anything...`




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