“How would you feel, when you find out you are RM 18,000 short every month?”
James (not his real name) came into my workshop. Normal looking, business owner. Very chill and relax.
Went through the entire workshop & when it came time for our 1 to 1 Personal Coaching, he show me his Financial Compass (his Assets & Liabilities).
I was shocked!!! I ask him, “How do you feel?”. “Like that lo”, was his reply. That was the beginning of how I help James save RM 10,000/month using a Debt Consolidation strategy
“That was during the START of Covid 19 last year in May 2020. Luckily there was the moratorium. So it gives me some relief, but still, it can’t go on. This started even before the pandemic”. That was what James told me during our 1 to 1.
Upon probing deeper, he shared with me it was due to his business failures, being a victim in scams & over-investing in properties.
“What if you are short RM 18,000 every month?”
I could relate as I was in a similar situation. Although not RM 18,000 deficit, it was equally painful. I knew what he was going through. He had to support his family, his wife didn’t work since getting married to James & he had 3 person to support & waiting for him to feed (including his 2 daughters)
Here is a summary of his situation before the Debt Consolidation
- Company loan, personal loans, creditor & car loan close to RM 752,000 (not including his property loans)
- Negative cash flow of RM 18,429 (Outflow more than monthly salary)
- Earns a good salary of RM 27,000/month (including Rental income of RM 7,000/mth)
- His total loan repayment came up to RM 22,360/month
“One of the strategies we use to help him is Debt Consolidation Strategy”
Here is how Debt Consolidation Strategy as an overview
Since he had multiple loans, we use Debt Consolidation Strategy to organize all the loans into 1 Consolidated Loan & 1 repayment. 1 advantage he had was that he bought properties early in his career. The properties have appreciated over the years. That way we could use that property as a “container” to consolidate all his personal loans, creditor loans & car loans.
“After applying Debt Consolidation Strategy, James was so relieved”
After guiding him using the strategy, here’s what happened
- Reduce instalment payment of RM 8,860/month after restructuring his debts from RM 22,360 to RM 13,500 per month
- Save on interest rate of 3-6% averagely from his personal loans & creditor loans
- Save a total interest of 78,602 out of the total interest of RM 146,620
“I brought my whole family for a picnic at the farms & seaside“
“I can only say thank you as I did not expect I could get this kind of result from joining his workshop”, these were James’s words. I saw him started enjoying more of his life with his family. Going to picnics at the farms & seaside, to having steamboat at home, I was so happy for him.
Although his situation could be better, he was grateful for cutting half of his deficit.
For more real-world case studies, you can reach me at my my blog - jadvisory.asia
Ka Hoe is a Licensed Financial Planner having a “Financial Adviser Representative” (FAR) with Bank Negara and “Capital Market Service Representative License (CMSRL) - Financial Planner” with Securities Commission. He is also the Founder of J Advisory, a Personal Finance Academy that helps struggling Malaysians elevate their financial well-being with proven tools, systems and strategies.
DISCLAIMER – All strategies listed here are not a recommendation nor advise. 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 advise. If you are seeking for professional advise, please consult me personally . You should do your own research and/or seek expert’s advice when overcoming your debt circumstances.