Dear KC Lau,
I’m Julie*, a copywriter and full-time student. I’m turning 21 soon and have just started to settle into a relatively stable monthly income varying between RM9 – 12k. Prior to this, I was bringing in between RM4 – 6k monthly.
Presently, my monthly commitments (car, gym, household etc.) add up to approx RM1,200 monthly, with an additional RM800 allocated for miscellaneous expenses.
Yearly commitments (car insurance, biz expenses etc.) add up to about RM2,000 per year.
Every month, I place a few hundred into 2 separate Stashaway accounts (one being Stashaway Simple, another one more high-risk), as well as a few hundred into a tiered savings account I use as my emergency savings. I try to chuck as little as I can into my checking account.
I do have a few thousand in my EPF from previous work, but am not planning to self-contribute as I’d rather not have my funds locked up.
I plan to buy a landed investment property in 2023 and need to build my creditworthiness as a student, hence will be filing my Form B for the first time next year.
My questions to you are:
- Given my sudden increase in income, how would you advise to best invest it (without keeping it locked up)?
- How can I increase my chances of getting approved for a home loan as a working student?
Your advice is greatly appreciated, thank you!
Glad to know that you are making good money as a student.
Regarding your questions:
#1. I invest mainly in stocks and properties. In your situation, when you are not yet well versed in these two major investments, there are places to start with passive investing. The Stashaway investment is a good start. In the meantime, you can start learning about value investing stocks and properties. The method is to identify good businesses (stocks) and properties and buy when those are selling at a bargain. You can learn these by doing research, reading and attending courses. You will learn much faster with courses. But choose the right ones. Some courses are on trading the market in and out, which I don’t practise.
#2. Bank provides loans to adults who has an income, preferably a stable one. You can start a relationship with banks by first getting a credit card. Proof of income is crucial. So filling income tax on time is one of the ways. You can also register your business, use a business bank account to do business dealing. That can show that you are making legitimate revenue. A credit score takes time to build.
All the best to you!
Kudos on the head start.