Graduate's Dilemma: Riba' Loan

Summary:

1. Buy a car or a motorbike with monthly installment will result in paying Riba’.

2. Staying with your parents, and commute public transport is the best way not paying Riba’ while having less expenditure

3. Renting a place to stay with friends and buy a car is the highest possible expenditure one will face.

Will result in paying Riba’, and monthly saving is about RM200 only.

4. Some may opt for buy a car (to be used for ‘balik kampung’ and or weekend activities), and buy a motorbike

(daily commute to work). This will result in paying Riba’ as well.

Minimum Expenditure Staying with Parents= RM680;

Total Savings per month= RM2000 – RM680 = RM1320

Annual savings = RM15,840

Minimum Expenditure Staying with friends / Rend a room = RM1160;

Total Savings per month = RM2000 – RM1160 = RM840

Annual savings = RM10,080

Proposed strategy: For Boys

First 6 months to 1 year, commute public transport. Then, if deemed necessary,

buy a motorbike (~RM5,000) with cash.

Annual increment and bonus can be used for other expenses like upgrade hand phone,

laptop, pay back PTPTN, holiday, etc.

Depending either staying with parents or renting a room, minimum saving after 4 years will be RM40,000.

This amount can be used to buy a new car.

I would recommend not to buy a house / apartment in your early career days. Why:

1. monthly payment will be about RM700; this is a Riba’ loan

2. downpayment, lawyer fees, etc, and renovation cost will be about RM60,000.

Some will opt for loan for this as well. Riba’ loan again.

3. no flexibility to venture new job opportunities; far from house, or even another state

4. need to align with your wife’s working place; can easily move to another rental house /apartment

convenient for both of you

Get married only after you’ve bought a car with cash. Remember, this is the most killer expenditure!.

Don’t look for status, rather look for maintainability and practicality.

Proton Saga worth RM40k, and this is sufficient if you want to buy a new car – big space, less fuel consumption.

To buy a second hand car has its own pro and cons.

After marriage, I would recommend that to stay in a rental house / apartment (maximum RM600 a month) until

you have enough cash to buy your dream house with cash.

There is no problem / shame staying in a rental house / apartment.

In Europe, only rich and retired people own a house, the young ones normally will only rent.

With monthly saving of RM1300, After 10 years of your married life, your bank balance alone will be about RM150k.

If your wife is working as well, easily you can afford to buy a house by then.

Be patient, and make your strategy. There is no short cut for success.

Always prepare yourself, avoid taking Riba' loan by any case, and when opportunity knock your door,

you are then ready to take up the challenges, insya'Allah.

Proposed strategy: For Girls

Don't look for a partner that is graduating the same time as you!.

Considering the explanation above, you can make a strategy that your partner is someone that graduated

3-4 years before you, and already bought a car with cash. Smart move is not it?

Immediately after graduation, get married. Then, discuss with your husband about your intention about your career;

whether you prefer to work, or become house wife.

You can now discuss with your husband about renting house / apartment in which area.

Also, if he decide to go oversea to work, you can easily follow him as well.