A story of a typical Malaysian walking a path less travelled. Ian approach me to help resolve his debt problem.
“Where do I go? Who can I turn to?”
I met Ian (not his real name) when I went back to serve as a coach in one of the property investment courses I previously attended in 2013. He was introduced to me by a friend, who said that I needed to help him.
During our first meeting at Old Town Coffee at Kuchai Lama over lunch, Ian shared with me that he was working as a Graphic Designer and has been working for more than 10 years but finds it very hard to have any savings. I see him as someone who has a dream, and ambition because he told me “People around me, my colleagues, friends and even relatives have already had their own families and even owned a few properties”.
Yet he is still single and haven’t bought his first property nor started any investment.
This was his situation:
- Credit card debts, personal loans & Car Loan close to RM66,000
- Negative cash flow of RM 1,767 (Outflow more than monthly salary)
- Earns RM5000/month salary
- His CCRIS has been badly affected, as he wasn’t prompt in paying his debts
- Total commitments and loans of RM4,870/month (97% of his salary)
To be honest, I thought he was in a worse-off situation. But after reviewing his situation, I share with him two strategies to resolve his situation. The first strategy is called Debt Consolidation Strategy, as he had multiple loans which needed to manage.
The second strategy was to use the World’s Simplest Money Management System, which help him not to fall back into the same situation moving forward.
Here is his situation before and after:
Ian’s situation before applying the Debt Consolidation Strategy
Ian’s situation after applying the Debt Consolidation Strategy
” If there’s the slightest chance for you to make a change in your life, don’t let go of it. Keep moving and going and you will find a way.”
After applying the strategy, he managed to:
- Reduce RM3,152/month after restructuring his debts from RM 4,870 to RM 1,718 per month
- Ian could now save RM1,650/month as a result (Monthly salary having surplus)
- Save on interest of 7-9% on average for his credit card debts & personal loans
- Bought his first property for RM200K & subsequently another RM900K with his property investor team
- Avoid being ‘EARMARKED’ by not going to AKPK else he wouldn’t be able to buy property. (I don’t have anything against AKPK, as they genuinely help people restructure their debts, but they need you to pay off your debts fully before taking on new debts)
Ian Was A Mr Nice Guy To Others, But Is He Nice To Himself?
So with these two financial strategies, Ian can free himself from his debt problem and pursue his dream of owning his own property. What I notice about Ian was, that he was an easy-going and easy to ‘trust people kind of guy’ which led him to this problematic situation.
This same trait led him to trust his friend, his friend’s MLM products because he didn’t know how to say NO. And as a result, he doesn’t know how much he has spent over the years. After this experience, he is much more aware of his financial situation.
How Do You Restructure Your Loans When Your CCRIS Is Not Great?
“How do you qualify for more loans since Ian’s CCRIS is koyak?” If this is the same question you are wondering about, congratulations!
It means two things. Firstly you are very aware of what you are reading and you probably have a high Financial IQ. Secondly, you could be in the same situation and you need help. Regardless, the solution to your problem is simple but not easy if you are not equipped with proper financial education.
Learn how to overcome your debt situation by enrolling to Debt-Free Code here.
*DISCLAIMER – All strategies listed here are not a recommendation or advice. The article is written purely for the purpose of education and journaling only. The content of this article is an expression of my opinion and should not be taken as professional advice. If you are seeking professional advice, please consult me personally. You should do your own research and/or seek expert advice when overcoming your debt circumstances.
Source: J Advisory