He can retire now & afford his daughter’s RM300k education fund-KC Lau

Sumber:http://kclau.com/make-money-tips/retire-now/
Below is another case study I’ve done for a reader. This is the email I received from him.

Dear KC,
I will be 40 years old soon. I am married with a 10 years old daughter. My wife is same age as me, she is a housewife. I have very little knowledge about the profession of financial advisory as retirement always seem far and away. Reading your book awakes me to the importance of financial planning and the quality of life.
My asset as bellow:
1) House (own stay) – Market value of RM800K with RM470K loan outstanding.
2) Second house tenanted at RM850/month. The market value is RM300K with no loan.
3) Share holding of RM840K, all invested in KLSE.
4) EPF RM460K.

Could you please advise if I have saved enough to meet the following requirements?
1) Do I have enough for retirement with monthly income of RM6500? I plan to retire as soon as possible. I will still continue to work after retirement but it would be nice not have to work for money.

2) Education fund for my daughter at about RM300K current value. The education fund is my second goal. It is up to my daughter where she chose to study. I hope to have the resources available if needed.

3) I do not have any insurance except those provided by the employer. Please recommend basis insurance requirement after retirement. Currently the employer provides PA & medical for family. No coverage upon cessation of employment. Should I take up medical insurance upon retirement? How much is sufficient for the family?
I plan to sell the second house and invest the proceeds in equity for higher return.
Thank you.
Ron

Retire with monthly income of RM6500

To retire now with passive income of RM6500/month (78,000 per annum), assuming that the average annual return of 8%, Ron would need to have an investment portfolio of RM975,000.

Looking at Ron’s current asset:
– Share holding of RM840k in Bursa Malaysia
– Second house of RM300k
– EPF RM460k

His total assets are RM1.6million. Let’s exclude EPF from the portfolio, he still have RM1.14 million. To get RM78k return per annum from RM1.14 million worth ofinvestment assets, he just needs to generate 7% return.
His retirement need is met in this case. To generate a 7% return per annum, it is pretty much achievable with the right mix of asset allocation.

Ron mentioned that he plan to sell the house to be invested in equity. But I wouldn’t suggest that because of several reasons:

1. If all his money is invested in equity, it is like putting all your egg in the same basket. Unless he is very good in stock picking and knows what he is doing. Warren Buffett invests almost all hismoney in stocks and he takes care of his portfolio really well.

2. His second house is giving a return of 3% per annum [RM850 x 12)/300k], which is much lower than the required return of 7% per annum. But properties appreciate over time. Another option is to refinance the house in order to withdraw more capital to be invested in the stock market. Doing this, he can still grab the full return when the house appreciates, while he is making money in the stock market and only paying low interest charges to the bank.

Anyway, there is no absolutely right answer for this. If Ron knows stocks very well compared to real estate, he can definitely sell the house and make moremoney from stock using the same amount of capital.

As a conclusion, Ron can retire already!
Education fund of RM300k

Since Ron’s daughter is only 10 years old, she will only need the large amount of education fund maybe 8-10 years later. At that time, Ron can withdraw his EPF account 2 for his daughter’s education fees.
Insurance Planning for retirement

Basically, Ron would need to get his family well-covered with insurance protection to prevent any unforeseen illness. Since Ron can afford to retire now, if he chose to stop his employment, it is advisable to get his personal insurance coverage effective.

There are 5 categories of life insurance coverage:

1. Personal Accident plan – this can be purchased from general insurance companies and also online at Tunemoney.

2. Hospitalization and surgical benefit – this is the medical card we often talk about. Most medical card cover until age 80 with adequate lifetime limit. It depends on the hospitalization package you prefer. I would suggest to get a lifetime limit coverage of not less than RM300,000 per person.

3. 36 critical illnesses – For a person who is actively earning money now, I suggest to be covered at least 3 times of your annual income. But for a retiree, probably RM100,000 would be enough just to fund the nursing care and some outpatient medication. Most of the major medical fees are covered if you have a medical card.

4. Total Permanent Disablement – This benefit is included when you are covered for 36 critical illnesses.

5. Death benefit – This benefit is also included when you are covered for 36 critical illnesses. For a retiree, death benefit is not so important compared to those actively working adults who are the breadwinners in their families.

You can allocate 5-10% of your income for insurance planning. Normally it is adequate to get your family well covered. In Ron’s situation, he can allocate about RM400-600/month for insurance planning.

Ron, well done!

You are doing a lot better than majority of the population at you age.

Buy term and invest the difference

This insurance buying “philosophy” has been preached many many times by some of the top personal finance gurus and authors, especially those from foreign country. What I am talking about is the technique of buy term and invest the difference (BTID).

I haven’t written anything about it, yet. Mooi (a blog reader and a regular forum contributor) actually asked this question in the forum. There is a very interesting discussion. You should really take a look at the forum post about what we’ve discussed so far. In this post, I will share my view about the reality and practical part of making use of this well-known strategy.
Story about Jack and Marry

Jack and Marry are husband and wife. They just got married and felt that they should insure themselves with proper life insurance policies.

Jack told the agent,”I want to pay the lowest premium to get the highest coverage.”

Agent replied,”You should buy a term policy.”

Marry disagreed,”I want something that gives return. I don’t want to pay premium and get back nothing at the end!”

Agent said,”Whole life assurance plan provides some decent saving. So Jack, whole life or term?”

This is a usual dilemma. I won’t say who’s right or wrong. They just have different opinion.
What’s Buy Term and Invest The Difference

Let’s say you can afford to buy a whole life participating policy which requires RM5000 annual premium. In order to get better value out of yourmoney, you can instead buy a term insurance with exactly the same sum assured, and use the extra money to invest.

In other words. You can use RM2000 to buy only term insurance, not whole life plan. And the other RM3000 can be invested to get better return.

This strategy is based on the believe that you can invest better on your own instead of relying on the insurance company to give you mediocre cash bonus return.

BTID emphasize on paying the least amount of insurance premium possible, and use the monetary difference to save and invest. If you are paying too much for insurance, there is not much left for investment.

In long term, say 20-30 years later, you might have invested enough and become wealthy. Then insurance is not an issue anymore because you are already rich! You don’t really need insurance when you are rich right? This is the concept behind BTID.

I don’t agree with this statement completely because I know the richer a person gets, the more insurance he buys. This is a fact, not an opinion. I will share more about this other time.
How do you do it in Malaysia?

The financial industry in Malaysia is still many years behind those developed nations.

Unlike in the developed nations such as US and UK, the term insurance in Malaysia is not really cheap. I checked with some online insurance websites, the term insurance selling in the US and UK is much cheaper. The premium is 20-30% cheaper than a term insurance available to Malaysian.

However, there are some other options to choose from, such as group term insurance, probably offered by unit trust companies, or through some association of private companies which is exclusively for employees and members only. And there are also some disadvantage of insuring yourself under a groupterm insurance. Some plans premium can be revised. Some may require good health at renewal. And these kind of plans are not easily accessible.

To buy cheap term insurance online, we would still have to wait. I don’t know how long it’s going to take. Until the day you want to buy insurance spontaneously (without agent sale-pitching you), probably insurance companies will cut the premium because they can reduce the commission paid to insurance agents.

When you are able to get sufficient coverage by paying the least amount of premium, the extra money you saved should be invested wisely.
Term insurance or Investment-linked?

Based on the Great Eastern Gelsis quotation software version 5.05, a male life assured aged 30, buying an insurance plan with sum assured of RM250k (Death and Total Permanent Disability benefit only), would need to pay

1. Term Assurance (30 years)
– annual premium – RM1617.50
– cash value after 30 years – NIL
– total premium paid – RM48,525 in 30 years

1. Investment-linked Policy – Greatlife Portfolio
– annual premium – RM1200
– cash value after 30 years – range from zero to RM20k (very much depends on investment return)
– total premium paid – RM36,000 in 30 years

In my opinion, there are no such “cheap” term insurance in Malaysia. The best term insurance you can buy is to package the investment-linked policy in such a way that it gives you maximum coverage on the lowest premium paid.

Yes, it can be done. Of course there is some risks to take on buying an ILP. But it can be overcome by proper strategy, which I shared previously how to avoid investment-linked policy from being lapse.
Pros and Cons of buying term and investing the difference

Pros:
1. When you are able to save insurance premium, you shall have more money to invest

2. You will have more control of your investment.

Cons:

1. It is almost impossible to get total coverage.
Let’s say you earn RM50,000 a year. 20 years down the road, you will be able to earn at least a million ringgit! It makes sense to buy a million ringgit policy now! The premium is RM6470 (30 years old, term 30 years). Can you afford it? If yes, would you buy it?
In practical, some other very useful rider can be added to meet the shortfall, such as the investment-replacement feature and the income-replacement rider. It is not so simple of just buying a term policy. You should ask a trustworthy agent to plan for you.

2. Some people are not disciplined.
Instead of buying term and investing the difference, some people spend the difference!
How about Jack and Marry?

I would say that different plan suits different people with different values.

Jack learns a lot about investment and he can pretty much handle his investment portfolio well. Then for Jack, to buy term and invest the difference totally make the best sense!

But Marry don’t like about investment. She fears losing money. She even trembles when people talk about share trading. She thinks that it is gambling. Furthermore, she can’t see the “money” sitting in the bank because she would most likely spend it. In this case, locking her money in an insurance plan is really beneficial to her.

How about you? Do you think buying term and investing the difference is your cup of tea?

Sumber:http://kclau.com/insurance/buy-term/

Bila merajuk jadi budaya

Merajuk telah menjadi budaya manusia

Budaya yang sama-sama manusia tidak mahu

Tapi sama-sama membudayakannya

Budaya merajuk itulah yang menyusahkan manusia

Yang menjadi racun di dalam keluarga dan di dalam pergaulan mereka

Banyak kerja terhalang, tidak kurang kerja terbengkalai dibuatnya

Banyak kerja tidak sempurna, diganggu oleh budaya merajuk

Buat itu tak kena, buat ini tak kena, serba terganggu, merajuk menghantui perasaannya,

Setengah jiwa yang terlalu lemah, jiwanya merana…

Budaya merajuk ini berlaku setiap hari,

Di dalam rumahtangga, di tempat kerja, di dalam parti.

Bahkan lebih sedih, di rumah Allah berlaku juga.

Tidak ada akta dan peraturan yang boleh membendungnya

Justerulah akta dan undang-undang tidak dilagang.

Penyakit merajuk ini dia serang tidak pilih orang.

Semua golongan bisa diserang.

Budaya merajuk ini mudah saja terjadi

Suami lambat balik pun isteri masam muka, hilang manisnya

Layanan kepada suami pun dingin sahaja,

Belum lagi suami berkahwin dua !

Merasakan diri tidak dihormati, pertengkaran pun terjadi, adakalanya sampai mati!

Suami pula terpelengok, pun merajuk sakit hati, sebagai tindakbalas terhadap isteri…

Ibu bapa pun selalu merajuk, tersinggung dek anak-anak yang berbagai kerenah

Anak-anak lambat ziarah atau lambat menerima surat atau memberi pendapat

Tidak senang sahaja, marah-marah sahaja, merungut-rungut dan membebel tidak tentu hala

Apabila anak-anak balik kerut mukanya, bila ditanya diam sahaja,

Tidak kurang juga ada yang menyergah macam singa!

Di pejabat-pejabat ada staf-staf merungut tidak habis-habis

Merasakan tertekan oleh majikan, kerana terlalu banyak kerja

Atau gaji tidak seimbang dengan kerja, majikan tidak dihormati lagi

Di belakang dikata-kata dan dihina, ada yang terus lari dari kerja

Majikan pula susah hati, merajuk pula, marah-marah kepada staf-stafnya

Adakalanya nafsu gagal dikontrol, maki hamun semahu-mahunya

Merajuk juga berlaku di dalam parti

Setelah jatuh dari jawatan parti oleh undi, tenaga dan pengorbanan dibekukan

Kalau dulu aktif, sekarang pasif. Dahulu cergas, sekarang culas.

Tidak terlantik di dalam pencalonan

Atau digugur di dalam jawatan parti atau barisan pentadbiran

Hati sakit, merajuk pula. Muka pun tidak nampak lagi, membawa diri

Entah mana perginya, kalau mati ada kuburnya

Bila mati barulah media massa membuat berita

Setelah lama menghilang diri dari gelanggang masyarakatnya

Di masjid pun berlaku budaya merajuk

Waktu jadi imam, di masjid setiap waktu, ibarat merpati masjid

Tidak lekang-lekang di masjid, macam rumahnya

Bila jawatan diganti orang, masjid tidak nampak lagi

Bahkan waktu sembahyang pun dia tidak muncul-muncul lagi

Hanya kelihatan pada hari Jumaat, itupun duduk di tepi-tepi

Mukanya masam tidak berseri

Habis sahaja sembahyang tidak sempat sembahyang sunat

Cepat-cepat cabut pergi..!

Orang ramai hairan semua memerhati

Pada tok imam pun boleh berlaku, kata setiap hati…

Marilah kita servis hati di bengkel rohani…

Sumber:http://bengkelrohani.blogspot.com/

FCPO-Info 2

1. Underlying assets
Perdagangan kontrak hadapan CPO adalah disandarkan dengan aset komoditi sebenar, iaitu kelapa sawit mentah. Malaysia adalah pengeluar kelapa sawit terbesar di dunia.

2. Leverage
Leverage dalam CPO sudah ditetapkan oleh Bursa Malaysia. 1 tick = RM 25. Tiada pilihan leverage yang lain.

3. Two ways market
Keuntungan boleh dibuat semasa pasaran menaik mahupun menurun sama seperti pasaran matawang.

4. Masa
Tidak seperti pasaran matawang, pasaran CPO hanya dibuka pada jam 10:30 pagi – 12:30 tengah hari. Sebelum bersambung pada sesi petang dari jam 3:00 petang – 6:00 petang pada hari bekerja Malaysia.

5. Broker
Semua broker perlu berdaftar dengan Bursa Malaysia / Suruhanjaya Sekuriti dan anda sebagai pelabur dilindung oleh undang-undang. Sila rujuk senarai broker yang disahkan oleh Bursa Malaysia untuk mengelakkan anda terlibat dengan urusniaga yang tidak sah.

Urusniaga masih memerlukan anda menelefon FBR / dealer yang mewakili syarikat broker anda.

6. Real Time Monitoring
Anda perlu membayar sewa kepada pengeluar data CPO yang disahkan untuk monitor harga secara real time charting, tetapi real time price quotes telah banyak disediakan secara percuma oleh syarikat broker.

Dalam bengkel yang akan diadakan nanti, anda akan diajar kaedah monitoring secara manual tanpa menggunakan sebarang software.

7. Deposit Margin
Kira-kira 2 tahun dulu, deposit margin yang diperlukan hanyalah sekitar RM 1,000. Tetapi kadar deposit margin telah dinaikkan sehingga RM 5,700. (Ia berubah-ubah mengikut market volatility) Justeru, anda memerlukan RM 3,000 – RM 5,000 untuk terlibat dalam dagangan secara intra-day (bergantung kepada syarikat broker) dan antara RM 5,000-10,000 untuk position trading.

8. Fundamental & Technical Knowledge
Sekiranya anda sudah mempunyai pengetahuan asas technical analysis, maka anda boleh memulakan urusniaga dalam pasaran CPO.

Dan sekiranya anda terlibat dalam industri kelapa sawit secara langsung dan tidak langsung (seperti anda adalah anak FELDA, pekebun kecil kelapa sawit) maka anda mempunyai maklumat fundamental yang lebih baik dari orang biasa.

9. Syariah Compliance
FCPO telah disahkan produk patuh Syariah oleh Majlis Penasihat Syariah Suruhanjaya Sekuriti.

FCPO-Intro

FCPO adalah salah satu dari produk futures yang ditawarkan oleh Bursa Malaysia Derivatif (BMD). Ia adalah produk futures yang mematuhi syariah (syariah compliant) yang disandarkan kepada pasaran fizikal kelapa sawit dunia.

FCPO diniagakan dalam Ringgit Malaysia. Satu pergerakan minima harga (satu tick) bagi FCPO adalah RM1 di futures yang membawa nilai sebenar RM25. Oleh itu jika harga FCPO bergerak sebanyak RM5, ini bermakna nilai sebenar kepada trader adalah RM25 X RM5 = RM125.

FCPO didefinisikan sebagai suatu kontrak derivatif (yang diperakui undang-undang Malaysia) diantara pembeli dan penjual untuk menerima atau menghantar minyak sawit mentah (1 lot FCPO bersamaan dengan 25 Tan Metrik minyak sawit mentah) pada suatu masa tertentu di masa hadapan.

Kontrak ini adalah mengikut bulan. Kontrak yang ditawarkan BMD adalah kontrak bagi bulan semasa dan lima bulan berikutnya, di ikuti bulan-bulan seterusnya secara berselang satu bulan, sehinggalah ke bulan 24 yang akan datang. Kontrak akan menjadi matang pada 15 haribulan pada bulan dimana kontrak itu disebut. Contohnya, kontrak bulan Julai 2007 akan matang pada bulan Julai 2007 manakala tarikh akhir urusniaganya adalah pada 15 Julai 2007.

Futures membenarkan kita membeli dahulu dan kemudian jual. Futures juga membenarkan kita menjual dahulu dan kemudian baru membeli. Yang pentingnya, kita melengkapkan urusniaga kita dengan membeli pada harga rendah dan menjual pada harga tinggi; tak kesahlah beli dan jual atau jual dan beli.

Adalah juga penting untuk melengkapkan urusniaga. Kontrak yang diniagakan adalah sah dari segi undang-undang. Jika urusniaga tidak dilengkapkan dan kontrak itu matang, kita wajib meneruskan dengan proses tender fizikal minyak sawit. Dalam kata lain; trader yang masih memegang kontrak belian FCPO pada tarikh matang perlu menerima 25 tan metrik minyak sawit (bagi setiap kontrak) daripada trader yang masih memegang kontrak jualan FCPO pada tarikh matang yang sama.

Trader bebas memilih untuk membeli dan menjual kontrak dari bulan mana-mana sahaja. Namun trader diingatkan bahawa berurusniaga pada bulan yang hampir matang mungkin akan menyebabkan trader terpaksa berurusan dengan minyak sawit secara fizikal.

Jual atau beli kontrak pada bulan yang masih jauh juga boleh memerangkap trader kerana kontrak bulan sebegini, kadar kecairannya adalah rendah. Bila beli, mungkin susah nak jual kemudiannya kerana tiada pembeli. Begitu juga sebaliknya, bila jual susah nak beli kemudiannya kerana tidak ada penjual.

Adalah menjadi kebiasaan trader di dalam pasaran, terutamanya spekulator, untuk berurusniaga FCPO pada kontrak bulan ke tiga. Istilahnya adalah ‘benchmark contract month’. Apabila membeli atau menjual kontrak bulan ketiga, ada cukup masa untuk melengkapkan urusniaga manakala kadar kecairannya adalah paling tinggi.

Masa urusniaga FCPO di BMD terbahagi kepada dua sesi iaitu sesi pagi (10.30 hingga 12.30) dan sesi petang (3.00 hingga 6.00).

Kadar margin atau deposit bagi setiap lot adalah ditentukan oleh BMD Clearing. BMD Clearing akan menyemak kadar ini dari masa kesemasa dan mengubahnya mengikut keperluan pengurusan risiko mereka.

Pada masa sekarang, kadar margin bagi setiap lot FCPO telah ditetapkan oleh BMD Clearing pada RM5,500. Walau bagaimanapun, ada syarikat broker yang membenarkan separuh margin (RM2,750) bagi urusniaga singkat (melengkapkan urusniaga pada hari yang sama).

credit to encik kamar’s blog
Sumber:http://www.carigold.com/portal/forums/showthread.php?t=84919&page=2

Year 2010 Malaysia Individual Income Tax Relief Items

Below is the list of tax relieve for resident individual for the year 2010 from Malaysia Income Revenue Board portal.

No.
Individual Relief Types
Amount
1
Self and Dependent
9,000
2
Medical expenses for parents
5,000 (Limited)
3
Basic supporting equipment
5,000 (Limited)
4
Disabled Individual
6,000
5
Education Fees (Individual)
5,000 (Limited)
6
Medical expenses for serious diseases
5,000 (Limited)
7
Complete medical examination
5,00 (Limited)
8
Purchase of books, journals and magazines
1,000 (Limited)
9
Purchase of personal computer
3,000 (Limited)
10
Net saving in SSPN’s scheme*
3,000 (Limited)
11
Purchase of sport equipment for sport activities
300 (Limited)
12
Husband/Wife/Alimony Payments
3,000 (Limited)
13
Disable Wife/Husband
3,500
14
Ordinary Child relief
1,000
15
Child age 18 years old and above, not married and receiving full-time tertiary education
1,000
16
Child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities
4,000
17
Disabled child

Additional exemption of RM4,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities
5,000
18
Life insurance dan EPF
6,000 (Limited)
19
Insurance premium for education or medical benefit
3,000 (Limited)

Life insurance

Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual’s or individuals’ death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums. There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium. In the United States, the predominant form simply specifies a lump sum to be paid on the insured’s demise.

As with most insurance policies, life insurance is a contract between the insurer and the policy owner whereby a benefit is paid to the designated beneficiaries if an insured event occurs which is covered by the policy.

The value for the policyholder is derived, not from an actual claim event, rather it is the value derived from the ‘peace of mind’ experienced by the policyholder, due to the negating of adverse financial consequences caused by the death of the Life Assured.

To be a life policy the insured event must be based upon the lives of the people named in the policy.

Insured events that may be covered include:

* Serious illness

Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; for example claims relating to suicide, fraud, war, riot and civil commotion.

Life-based contracts tend to fall into two major categories:

* Protection policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance.
* Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US anyway) are whole life, universal life and variable life policies.

Sumber:http://en.wikipedia.org/wiki/Life_insurance

Secret Of Property Millionaires Part 2

Secret of property millionaires always remain risk conscious whereby their portfolio is proven workable no matter economy good or bad. Not many people having recession proof portfolio. Recession proof is whereby majority of the assets are having low loan balances or even better if it is free from encumbrances. Yes..Free from any loan and 100% own by you. That means in the event of economy crisis you don’t need to worry about all the repayment and of course spike up of interest rate is not related to you at all. You are basically sitting on the assets especially vacant lands that grow in value day by day like what I mention in my previous articles on “You cannot grow Land”. I have repeatedly mentioned the beauty of owning a land and how the rich’s has benefit from their vacant land portfolio. My advice to all, those who leverage too much with bank facilities must naturalize it by diversify your portfolio into vacant land. I know vacant land can’t give you any cash flow but in long term land has proven to be the best performer in terms of return over your capital. And I also fully aware that you need huge capital in acquiring vacant land but what to do, if you don’t do it now do you think the price will stop rising? The answer is “NO”. Of course another strategy to protect yourself from recession risk is to borrow less every time you purchase property. Say 70%, as this will reduce your monthly commitment and in the event the rental is not coming in, at least you still can cover your low monthly repayment. This will not only protect you from loan default but also help you to save interest cost over the long run.

The last strategy of the property millionaires is to start young. Instead of starting at the middle age of your life, you might as well start now and stop when you reach middle ages. Look at people around you, I bet most of them will tell you they will start next year when they have money. But I can tell you the day will never come simply because as we grow older, our commitment and responsibility will gradually increase together with our earning. Increase in responsibility and commitment simply means increase in our daily expenses. These unavoidable expenses are like housing loans, children expenses, house renovation, marriage expenses and etc. So you have no choice but to cut down all your unnecessary expenses before you are 30 years old otherwise you are “gone”. I assume you are person who take full responsibility as father and husband after you are 30 years old. Don’t ever trade your own life for short term pleasure. Take it seriously as we only walk through our life once. There is no repeat in our life.

With all the above secrets, I can assure you, your destiny to millionaire is clearer and faster. But the main rules to become property millionaires is to start young…with longer time frame you can afford to make more mistakes. So don’t take your life for granted. Everyone here going to be successful if you make it right at the first step and you can even afford to spend all your hard work money if you start young. Look at me, even from today onwards if I decided to stop accumulating property, can I afford to do so? Yes…Why? Remember, as long as I didn’t sell my properties it will continue to grow without much effort. I can start spend every single cent I earned from my employment income enjoying my life especially trip to overseas which I wish to go many years ago. Oh ya..For your information, since I started working 10 years ago, my best trip is only reaching Thailand and that is since 2005.
Only 3/64 pages use after 5 years 😦

Only 3/64 pages use after 5 years 😦

So ashamed to tell you that I only utilized 3 pages out of 64 for my passport before it expired last year!! Hope coming year I will spend more time travelling around seeing other part of the world to expand my exposure and knowledge. So what more you need to wait? Start now when you are young and I hope all of us will get rich and retire young. Nothing is impossible and don’t forget live below your means. Happy Investing.

Sumber:http://investkk.com/secret-property-millionaires-part-2/

Assets Class under Property

Asset under property can be divided into few levels. All of them build for different purpose, generating different rate of return, commanding different rental, rented to different tenant and the most important bank charging different interest rates. Which asset class gives you the best return? Which one is most easy to manage? Which commands the best rental yield and fastest capital appreciation? Let’s find out more through my sharing below.

The first asset class that is most affordable to majority of people is residential property. Under this asset it’s divided into 2 parts that is landed property and non-landed property. Bank not only preferred this asset but also giving lowest interest among all borrowing security. Bank always believe that no matter what happen to the economy, borrower will never default their home loan repayment. Thus the risk is lower to them. Among residential property bank would also preferred landed property over non-landed due to subdivision land title risk and time frame for subdivision. It would be more risky to bank if they keep borrowed using assignment document as a security. Imaging if suddenly the developer missing, who going to endorse your document? That is what happen to famous and matured residential known as Austral Park at KK.

Residential property for landed can be divided into 3 parts that is terrace house, semi-detached and detached house. While non-landed property is apartment and condominium. Which one command better rental yield and command highest capital appreciation? Based on my experience, non-landed commanding better rental yield compare to landed due to the facility given. Example condominium provide facilities like 24 hours security, swimming pools, cleaning, play ground, sports facility and sauna. While landed property normally don’t have such facilities. That why the rental yield for apartment and condominium can reach even double digit over your purchase price. In terms of capital appreciation, of course landed property will lead the way. But due to low rental yield you might need to subsidies additional fund to cover your monthly loan repayment. Thus over the long run this negative cash flow will filter your appreciation and this is absolutely unhealthy for beginner who just joining the property games. I personally still prefer non-landed as the monthly rental is enough to cover my loan and very likely going to be positive. This fulfilled my objective of having less negative cash flow portfolio which a lot of people say don’t feed ‘alligator” at your own backyard.

Second types of the asset class is commercial property which includes shop lot and shopping mall units. Commercial loans normally will be charge higher interest rates as bank say since you make money out of your property then you should pay more!! Shop lot is good especially if it is surrounded by massive matured residential property just like Damai commercial centre at KK. All the shop is fully occupied and now commanding rental income of not less than RM3500 per month for ground floor. This area is surrounded by matured Chinese resident which have the most purchasing power. Those who own property at this location can laugh all the way as tenant waiting list is there all the time. Both types of property are capital intensive and of course rewarded with higher rental yield. Initial capital for shop lot for 3 or 4 storeys easily cost you more than RM1 Million with expected 70% of the whole block rental derive from the ground floor alone. These upper floors is having high risk of vacant and generating low rental income. Given choice I would only accumulate ground floor or the most 1st floor under my rental portfolio.

Whereas for shopping mall investment can be totally different compare to shop lot. Developer sell shopping units by square feet you own. Just like Suria Sabah, upcoming high end shopping mall at Kota Kinabalu selling for about RM2800 per square feet for ground floor. So if you purchase 1000sf that equivalence to RM2.8M. The rental expected is about RM20 per sf or RM20K per month!! It’s not my cup of tea yet. One of my customer who own a unit ground floor at Wisma Merdeka many years back now he is well reward for his decision as he is collecting RM36K per month!! So owning both shop lot and shopping units is much better compare to residential as the premises is use for profitability activities. And so long their business makes money its make more sense they pay rental more promptly and on time.

Another asset class that a lot of investor ignores is industry land which mainly use for light industry and warehouse purposes. Under this portfolio your tenant is totally different as they might include tenant like consumer distributor Harrisons, pharmaceutical company, hardware suppliers, car dealer, car workshop, shipping company and furniture retailer. The most popular industry land at KK is along Jalan Lintas which is known as Kelombong and Inanam. If you notice most of the business operator here need bigger land size due to their natured of business and spaces required to store their products. The demand for this types of property is very high recently in view of low rental per square feet. Not only that, if you are running same car workshop business at shop lot, it might cause a heavy traffic, car park problem and worst complain from nearby shop. Currently warehouse or showroom with land size of 5000sf – 7000sf at Kelombong is selling not less than RM1M with rental expected around RM6K-RM8K depending on the buildup area. This is definitely a very good area to explore even though initial capital is big and higher risk but it’s still worth considering. I’m searching and wanted to add some of this property into my portfolio in the near future.

The last level of property class is vacant land. Bankers don’t like vacant land. I repeat “bankers don’t like vacant land”. Not only providing lower margin (around 60%), they also charge borrower higher interest rate (around 7%-9% per annum). Some banks even give less loan tenure of not more than 15 years. So to invest in vacant land you need to have a lot of capital and bear in mind, your vacant land might not generating cash flow for you in the near term. Therefore you have to subsidies 100% on your monthly repayment. Unless your cash flow is huge or immediate development on the land or high potential of rental otherwise it is not worth to get bank financing to purchase a land. As your land appreciation might not enough to cover bank loan interest. The best land deal I ever heard in town is land near to Likas recently sold for almost RM40M cash and the owner is planning to develop the whole pieces into high end condominium within the next 2 years. It’s going to be at least RM500M project. So with vacant land, there is plenty of choice you can use to utilize the land. The best part is you can build multilevel building with one time land costing. The higher the building the lower your land cost. That is the beauty of vacant land.

In summary, bank love’s residential property and they willing to scarifies their profit by giving lowest interest for housing loan. Whereas for investor, highest returns will be vacant land which gives you unlimited potential of earning and of course those who love simple life, accumulating rental portfolio under non-landed and commercial is a good choice either. The best portfolio character will be combination of all the above asset class which will give you highest returns, recession proof and the most important inflation proof portfolio. Happy Investing.

Sumber:http://investkk.com/asset-class-under-property/

My home loan is blowing my finances! Help!!

Whether you REALIZE this or not, MHL is still going to make this solid statement. Don’t worry if you don’t know, or you’re just a newcomer. We’ll help you sort things out. Seriously, it’s time to face the ultimate groundbreaking, heart-stopping, mind boggling, head smacking TRUTH. This statement do not apply to ALL the home loans out there, but to the common ones, this is it.

For your outstanding balance vs year chart of your home loan, you’re may be bounded to pay interest of more than 100% of your loan capital.

Meaning to say, if your home loan is RM100, you’re may just be paying more than RM100 of interest. Total sum = RM200++. And if this is going to knock you down and demotivate you, please, do not commit suicide. There are other ways of going around this problem.

Several of our favorite responses include:

1. “Don’t try to sell me la, brother.”
2. “What!?”
3. “This statement does not apply to OUR bank’s home loan. Let’s take a look at Bank X’s catalog…”
4. *Turns green, went green, and never saw his face again*

MHL does NOT make money by lying to her consumers. Honestly, we’re just making you realize of monetary facts and showing you opportunities around the problem that many people face.

Refinancing could be just the right option for you, we might say. Let’s take a simple calculation to further strengthen our stand:

After an outstanding loan of 5 years, you still have: RM230,963.00

1. Before Refinancing
1. Interest Rate: 300 months, BLR + 0.25% = 7%
2. Single installment payout: RM 1,662.44
3. Total interest paid: RM233,412.35
2. After Refinancing
1. Interest Rate
1. First 36 months, 5.25%
2. Thereafter: 5.15%
2. Single installment paid: RM1,370.45
3. Total interest paid: RM178,830.68
4. You save: RM54,581

Wah liao eh. Serious or not?

Refinancing may not be the best option for some people, due to the fact that:

1. They have a spending problem.
They spend way too much; disallowing them from making necessary payments at the beginning of each month.
2. They may just extend their loan tenure.
If you paid your home loan for 25 years already, what are you refinancing for? Do you want to add that small amount to another 20 years of your life? Forget it.
3. They borrowed more than 90% of the home’s value.
If their home loan is below 80%, it makes sense. Otherwise, forget it.
4. Cashing out of their refinance.
Honestly, cashing out is their thing, because they see money. They may just end up paying longer.

Does it make sense at all for you?
(You only have to pay your phone bill lah..)

Sumber:http://www.malaysiahomeloan.com.my/category/home-loans/