Hedging Your Worth from Currency Depreciation

Last week Ringgit Malaysia greatly depreciated against US dollar. It was really bad that it seems like 1998 all over again. But, the real effect will only be felt next year when old stocks are depleted and especially if the goods we want to use are imported. This is like a wake up call again for local companies and MNCs in Malaysia. They should depend less and less from imported goods to do their business in Malaysia. I have met a few MNCs who had raised this concern a few years ago. But, I do not know how much they have successfully use more local goods and services.

As an ordinary citizen, this also means next year our personal expenses will greatly increase. To make it worst, government may reduce her expenditure since the oil and gas tax is less than this year. This reduction has its own multiplying effect: first Petronas contractors will reduce their expenditure and second, government contractors, supplier and agencies will have less budget to consume. For the past 3 months, RM has depreciated for 8.61%. Three months ago, 1 USD worth for RM3.203. Today, 1 USD worth for RM3.478. Hence, a RM1,000 in hand may only be worth 91.39% or RM913.9. But, if government and Petronas reduce their expenditure, the actual RM worth may depreciation more than double. Consequently, a RM1,000 in hand may only be worth 82.78% or RM827.8!

How are we going to protect our RM worth? We cannot. It is the work of Bank Negara Malaysia. It is all depend on how good is BNM dancing with the international bankers, and financiers. And it is also depend on how good is our local bankers are. In the last financial turmoil in 1998, there were some traitors among the local bankers. Let us pray the current bankers in Malaysia are more patriotic than before.

As an individual there is still a small step can be taken. We should continue invest in good property and hold on to them. It is still the best method to hedge against the inflation and grow the wealth. The RM depreciation also means 3 months ago, if a person have properties worth for RM3,200,000, the person is a millionaire. Now, a person is only a millionaire if the properties are worth for RM3,478,000. It is not really a big worry for a property investor with that kind of properties worth because every year the properties value will increase between 5% to 10% depending on the location.

There is a good side effect to RM depreciation to property investors in IRDA. You should analyze why so that you will not be left behind.

Patent Registration and Investment

Currently, I am attending a patent drafting course in A'Famosa Melaka. This is the 3rd related courses I have attended. The first one was about patent search. The second one was about patent drafting level 1. While the current one is about patent drafting level 2. It is interesting to see how ideas are protected by registering them under patent, industrial design, trademark or copyright.

Currently, Malaysia government is aggressively encouraging companies, research institutions and individuals to register their ideas under MyIPO. This is to ensure your ideas are protected while seeking for financial returns. Among the protections, patent registration is the most difficult one, tedious, long hours and need careful drafting to ensure the idea is properly protected. Besides protection under MyIPO, our ideas can also be protected internationally. We can do that by registering the ideas on many countries or we can register the idea under PCT (Patent Cooperation Treaty) to save time and capital.

How can we monetize the patents in Malaysia? You can sell the patent, manufacture and sell the product or service, or finance them! Yes, now it is possible to get finance from your patent as written in the relate article:

http://www.thestar.com.my/Business/SME/2014/05/29/Monetising-intellectual-property-Plan-to-provide-financing-backed-by-ideas-as-collateral-starts-to/?style=biz

Can we register our investment ideas as protection in either one of them? Yes and no. It is quite easy to get registration under industrial design, trademark or copyright. But, it is difficult to register your ideas into a patent. Whereas, patent is the most wealth generation than the others. First of all, you have to make sure the idea must involve innovation process which provide a new way to do something or offers a new technical solution to a problem. For example, it is not possible to patent your investment procedure and experience. However, if you can create a systematic way to predict whether a property investment is sound or bad, then it is possible to be patented provided it is not purely mathematical equations.

There are many others rules and regulations which must be observed and followed before a patent can be registered. After attending this level 2 patent drafting, I am planning to take the exam to qualify as a patent agent. So, if any of you have an idea about investment which has the potential to be patented, you can discuss with me and ask for my help for registration.

Successful Personal Finance Management and Property Investment Seminar on 8th November 2014

I was glad the 3rd seminar was a success especially when at the end of the seminar the participants were eager to formulate the planning for property investment and clear what need to be done and what more do they need to learn. This time, most of the participants already bought 2 or 3 units of property. Thus, it is easier to show them what more can be done. This is very true especially when we show a practical example by a new guest speaker Ms Nurul on her new home ownership.

She bought a two storey cluster home with size of 34' x 70' for RM430,000. Her salary last year at the time she bought the house was only RM2,000! A lot of people would said it is impossible to get the loan approval. But she managed to do so in June 2013. When I taught the theory in the morning, no body bother to ask. But when she show her case study, questions started to pour in. She will get the house's keys in December 2014 which is next month. And she already advertise the house in mudah.my.

As usual, the seminar was honored by an hour of Q&A from a multi-millionaire Mr Zabri Mokhtar. He was not well on the day. But, since the event was long planned, he managed to finish answering all the relevant questions. Most participants were surprised when he revealed how he managed to bought more than 30 shop lots. Capital problem is not really a problem. It is also why we formulated it to be no. 5th in our six investment principles.

IR Nasir Hashim from Haikal Engineering officiated the event before the lunch break. He is also the Timbalan Ketua Bahagian UMNO Gelang Patah. Early in his carrier as a professional engineer, he was working for JCorp until 1992 Now, he is practicing civil engineering in his own firm. As a professional engineer and someone who worked in JCorp before, he clarify certain misconception in property development and investment. He encourage participants to invest in property since he also already done so by owning two shop offices.

Participants really understand now what they have missed and what should they do to improve their knowledge and planning for their next investment. Instead of blaming other people or the condition we live, we should really understand the industry. Once we have the right knowledge, there are many possibilities for us to grow. Below is an interesting review from a participants which make other people want to quickly joint the next seminar:

Some people regret that they missed the event.

If you are interested to join but already missed the boat, you can contact our secretariat at 011-32506847. The next seminar will be held in March 2015. But, if there are more than 20 people who want the seminar ASAP, we will conduct the seminar soon. We are also planning to conduct the similar seminar in Shah Alam or KL next year. So, if you live in Klang valley, you can also register with us.


Notes:
I would like to thank to all the committee members who help to organize and manage this event and make it a success.

Invest your child in skills development ASAP

My team have prepared a few skill development activities for secondary school students to fill their long holiday as below. All of the activities were supposed to explore secondary school students ability and talent both in electronic engineering and software development. Besides, participants will see the importance of learning and applying good English language skills.

The admission is strictly for secondary school students. It is good to explore the youngster talent As Soon As Possible in life in order to build self confidence and sense of carrier direction. Based on these skills development experience, students should know whether they like the field and have the necessary talent to pursue it in a higher level learning institution.

1. Smartphone Software Development
    Software development for smartphone application is getting more important. The percent of growth in Smartphone sales has overtaken PC sales all over the world. Having android based software development skill will open a lot of opportunities in the student's life. It is so important that nowadays, even electronic engineers are learning the skills in universities.

Admission fee is RM100 per secondary student.

2. PIC Microcontroller
    Embedded system design is the art of miniaturization of a PC into a smaller based design known as a microcontroller. It is used for a specific task such as processing a washing machine, traffic light control, automatic gate control and various control mechanisms in a car. This short course will expose participants to basic electronics design, and C language programming. Participants will learn that logical thinking is very important in this field.

Admission fee is RM100 per secondary student.

3. Personal Computer Assembly and Maintenance

    PC usage is very important in daily work and as a university student. It is a frustration if a PC breakdown while using it to complete an assignment. Sometimes, the damage is only minor. But without the necessary knowledge and skills, it is impossible to repair the PC on own. Beside, if a students know to assemble a PC on his or her own, the configuration can be customized for specific usage and reduce the purchasing cost.

Admission fee is RM200 per secondary student.

All short courses will be conducted in Universiti Teknologi Malaysia, Skudai, Johor. Since the space and equipment are limited, the number of participants who can be admitted are also limited.

Simplest Way to Start in Investment while Accumulating Capital

Whenever I have a discussion on property investment, capital is always a big issue for beginners and intermediate investors. There are many ways to raise capital. Prudence and long term goals are always good for them. And the simplest way to invest is the best for those who have no experience in modern, complex and various methods of investment. If the promised return of investment is too high, there are high risk associated to it which the promoter don't want you to know. There is high probability it is a Quick Rich Scheme.

Some people would like to accumulate their capital by saving. Well, saving is simple but not a smart way to grow your investment. But at least it is a good start. Whenever we do saving, we should look for the highest rate of return or annual dividend. Some saving like saving in Cooperatives can give you a return as high as 15% (or more!) per year. But it may lack the liquidity. Most people especially youngsters need immediate cash for whatever reasons. So, the best investment should also consider liquidity as an important consideration.

One of the best and simplest investment which give high return and liquidity is Amanah Saham Bumiputera (ASB). Below is its historical annual returns:

Year	Dividend (sen)	Bonus (sen)	Total (sen)
1990	8.00	6.00	14.00
1991	8.50	4.00	12.50
1992	7.50	5.00	12.50
1993	9.00	4.50	13.50
1994	9.50	4.50	14.00
1995	10.00	3.00	13.00
1996	10.25	3.00	13.25
1997	10.25	1.25	11.50
1998	8.00	2.50	10.50
1999	8.50	1.50	10.00
2000	9.75	2.00	11.75
2001	7.00	3.00	10.00
2002	7.00	2.00	9.00
2003	7.25	2.00	9.25
2004	7.25	2.00	9.25
2005	7.25	1.75	9.00
2006	7.30	1.25	8.55
2007	8.00	1.00	9.00
2008	7.00	1.75	8.75
2009	7.30	1.25	8.55
2010	7.50	1.25	8.75
2011	7.65	1.15	8.80
2012	7.75	1.15	8.90
2013	7.70	1.00	8.70

I am sorry to my non-bumiputera readers, you are not eligible to invest in this scheme. But you may find similar loan scheme and do you own calculation and risk assessment.

Now, the trick is how to maximize the investment return.

The answer to that question is simple: use ASB loan.
There are three main reasons to have an ASB loan:
1. Force yourself to have saving and reduce expenditure on non-essential
2. The rate of return is a lot higher in the long term compared to manual saving.
3. An assurance to your family.

First, one of the main reasons people especially those who are new in the market force cannot make any saving is they always calculate the budget based on what they have in their hands. So, let us reduce what we always have in hand by automatically facing ourselves to do investment in an ASB loan. There is also a small side effect of investing in ASB using a loan. You can get back what you have spent!

Imagine, if you are allowed to spend RM3,600 a year in a shopping complex and at the end of the year, you can get back the whole money. Are you going to take the offer? Only an idiot will not! That is what actually happen in an ASB loan. Before we go further, the discussion is based on below parameters:

          a) Loan amount: RM50,000
          b) Loan tenure  : 25 years

          c) Monthly installment: RM302 (RHB bank)

If the announced dividend is 7% and bonus is 1%, the estimated annual return is about RM4,000.

The annual payment is RM3,624.

The estimated loan reduction is about RM2,000 per annum. Of course in reality, the calculation is more complex than that.

So, after spending RM302 every month, you can get back the money on 2nd January every year. In fact, there are some balance. And what you also get is an increasing principle. Combining both of them, you get back more than what you spent!

Second, we must understand how ASB dividend is calculated. The dividend is calculated on every 26th day of the month, and not at the end of the year. The table below shows the detail calculation of a manual saving in ASB investment. The assumption of the calculation are:
     a) The monthly deposit must be made before the 26th on the previous month.
     b) To simplify calculation, only the dividend income is calculated at 7.6%
     c) There is no withdrawal.

You can see the dividend difference in the first year with the same amount of investment. But, let us see what happen if you continue the investment for the next 10 years. After 10 years, you have deposited RM36,240 in either ways.

The investment return difference is staggering. So, why don't you want to invest using ASB loan? There is no point to talk about other investment if you don't have at least RM50,000 ASB loan in your portfolio.

There are many more tricks in ASB loan which I can teach if you enroll in the Affordable Property Investment Seminar. For example, what can you do if you cannot afford to begin with RM50,000 loan? Is there any other way to maximize the profit further? Why I choose 25 years of loan? Etc...

Looking at the calculation, only a fool will say he or she does not have sufficient fund to invest in property after planning for 5 years! And if your couple has the same mind set, you can easily multiply the capital by two. So, you should bring along your couple in the Affordable Property Investment Seminar.

Third, when you take an ASB loan, you can also pay an additional RM10/month for a life insurance. Thus, if the borrower is dead, all principle owed to the bank is paid by the insurance company. And the family of the borrower will get the full amount of the principle. It is a cheap way to insured yourself!

Having look at the above calculation and comparison, that is why I put capital as number 5 in my Affordable Property Investment Seminar.

NOW EVERYBODY CAN INVEST IN PROPERTY!!

Update on 5 January 2015
Here are a few critical questions for thought:
1. In a glance, it looks like as time grow, the ASB investment through cash can accumulate more cash than loan, is it true?
2. There are a few practical questions must be raised in order for cash investment in ASB can really be done by anybody, what are they?
3. How can I optimize the cash return from this investment based on the ROI camparison?
4. If I have only about RM200 of excess money per month, how can I reach a maximum loan of RM200,000?
5. When is the best time to buy or sell my ASB loan investment?

Membeli Rumah Untuk Pelaburan Hartanah Mampu

Berikut adalah perbezaan dua pengalaman pembelian yang selalu akan dialami oleh para pembeli: Amalan biasa di sebelah kiri dan mereka yang bijak akan mempelajari proses di sebelah kanan sebelum mereka membeli.

Sebelah kiri:
1. Majoriti masyarakat mengatakan pembeli memerlukan wang yang banyak untuk membeli rumah. Mereka berkerja keras untuk mengumpul modal membeli rumah.

2. Mereka tercari-cari kediaman idaman mereka. Selagi rumah idaman tidak dijumpai, mereka tidak akan membeli. Lebih lama mereka menunggu, lagi tinggi harga rumah akan naik. Mereka mengharapkan harga rumah akan jatuh. Harga rumah akan jatuh jika ekonomi negara jatuh mendadak seperti krisis ekonomi 1998 dan 1985. Tetapi mereka lupa, pada masa tersebut mereka juga tidak mampu membeli rumah samada kurang pendapatan (tiada kerja lebih masa) atau bank kekurangan modal untuk memberi pinjaman.

3. Selepas menjumpai rumah idaman, mereka akan memohon pinjaman. Mereka akan terkejut apabila mendapati pinjaman mereka tidak diluluskan. Mereka boleh:
a) mencari rumah lain yang memenuhi impian mereka
b) mengumpul lagi wang
c) mempelajari teknik pinjaman bank yang betul yang tidak boleh dipelajari daripada pegawai bank (rajah kanan)

4. Selepas pinjaman mereka lulus, sesetengah peminjam akan menghadapi masalah rumah impian mereka tidak siap dibina. Mereka akan patah semangat atau bermula kembali pada kitaran pertama iaitu mengumpul modal pembelian.

5. Jika rumah dibeli berjaya disiapkan,
    a) pekerjaan bertambah baik, tiada masalah untuk membayar rumah
    b) jika tiada perancangan kewangan, bermulalah mimpi ngeri mereka jika mereka gagal membayar pinjaman tersebut.
    c) atau mereka boleh mendapatkan nasihat pakar dan mereka yang berpengalaman untuk persediaan pembayaran balik di dalaam jadual di sebelah kanan.

Sebelah Kanan:
1. Pemilihan rumah yang Strategik
untuk tujuan Perbezaan Membeli untuk didiami dengan membeli untuk melabur:

2. Pulangan Pelaburan
    Kita merancang, Allah jua yang menentukan kita berjaya atau tidak. Tetapi ramai akan mudah gagal kerana mereka tidak langsung merancang. Ramai menyangka mereka telah merancang tetapi rupa-rupanya ianya lebih kepada angan-angan kerana mereka tidak tahu apa maksud merancang.
   50% kejayaan sudah di dalam tangan apabila kita mempunyai perancangan yang sempurna.

3. Melaksanakan pulangan
    Bagi mereka yang kurang pengalaman, merancang kelihatan mudah tetapi mereka tidak melihat perancangan yang dilakukan dari sudut pelaksanaan dan menyebabkan perancangan mereka gagal dilaksanakan dengan baik. Oleh itu, amat perlu kita belajar daripada mereka yang telah berjaya dan mempunyai pengalaman di dalam perancangan tersebut.

Mengembangkan Pelaburan
Bagi mereka yang telah mula melabur atau membeli rumah, amat penting mereka belajar untuk mengembangkan pelaburan tersebut agar mereka boleh lari daripada masalah inflasi. Merangkak dan berdiri bersama-sama pelabur hartanah merupakan suatu kejayaan tetapi ia masih belum mencukupi. Bagi mereka yang hanya memiliki hanya satu atau dua pelaburan, inflasi hidup keluarga yang semakin bertambah akan cepat mengatasi nilai pelaburan tersebut.

Oleh itu, amat penting mereka mempelajari perkembangan pelaburan dari masa ke masa.

Malaysia Budget 2015 - Property Market Assistance or Distortion?

Government by definition is inefficient. Anything being done needs a lot of processes, time and political influence. The more government intervene, the market become less free to find its own equilibrium. Let us see the latest goodies from the government:

For married couples aged between 25 and 40, and without home whose combined income does not exceed RM10,000:
    a) maximum 35 years loan with funding limit RM500,000
    b) monthly financial assistance of RM200 for first two years
    c) 50% stamp duty exemption on the instrument of transfer and loan agreement
    d) 10% loan guarantee to get full financing including cost of insurance
    e) withdraw from EPF account 2 to top up their monthly installment and related cost

This offer is for first come first served for limited 20,000 houses.

At first glance it is a good proposition from the government. But, it is not fair to those who have to tighten their belt to buy their first house.

Let us hope young couple would take this opportunity to buy a house for an investment rather than forever for their own stay. The proposition seems to make young couples look for a house which they actually cannot afford. The two years financial assistance and 10% loan guarantee will definitely ensure they can buy something they cannot afford.

However, if they were thinking to buy the house for an investment and willing to tighten their belt for the next 5 years, this is a huge opportunity for them to have multiple property investment in the future.

But, if they never plan for the worst, and they cannot pay the monthly installment, it will be a disastrous experience for them. A good investor will always make a plan for the worst scenario. What should they do if their income cannot afford to pay the monthly installment?

Another reason why I said it is inefficient proposition: I managed to help a person with RM2,200 monthly salary to buy a house worth RM430,000 without any government assistance. Duh, are we breeding young couples to be ignorant in financial planning that with a combine income of RM10,000 they cannot buy a house worth RM500,000?! Government should appoint me as their consultant to teach young couples to plan their financial instead of giving them goodies which may not last forever.

So in the future, if these group of people cannot afford to pay their bills, they can go to Parliament to ask for more goodies while the rest of the citizen need to suffer to entertain their request!

Give a man a fish, it may last for a day,

Teach a man how to fish, it may last forever!

Pengorbanan Diperlukan untuk mencapai matlamat Pelaburan Hartanah

Sempena menyambut Hari Raya Aidil Adha, saya ingin mengajak para pembaca untuk mengenang kembali perjalanan hidup yang telah dilalui. Apakah kita benar-benar ingin mencapai matlamat bebas kewangan melalui pelaburan kewangan? Jika ya, apakah tindakan-tindakan yang telah diambil untuk mencapai matlamat tersebut? Adakah cukup dengan hanya membaca maka matlamat kita akan tercapai? Apakah laluan yang dipilih terlalu selamat, ringan dan selesa?

Jika jawapan kepada semua persoalan tersebut adalah ya, ini bermakna kita belum benar-benar memahami konsep pengorbanan yang cuba disampaikan oleh nabi Ibrahim. Hari Raya korban disambut bukan sahaja untuk mengimbas kembali pengorbanan nabi Ibrahim dan memberi hasil korban kepada orang ramai. Percubaan nabi Ibrahim untuk mengorbankan anaknya nabi Ismail bukan sesuatu yang mudah dan boleh dilakukan oleh sebarangan manusia.

Menceburi bidang pelaburan hartanah juga memerlukan pengorbanan yang bukan mudah atau sedikit. Kita terpaksa menahan nafsu dari memiliki kemewahan dengan segera. Pelbagai perbelanjaan kehidupan mungkin terpaksa ditangguh sehingga kita benar-benar mampu memiliki iaitu pemilikan kemewahan tersebut tidak akan membantutkan perancangan dan pelaksanaan pelaburan. Sesetengah manusia menyedari perkara ini tanpa dikejutkan oleh para alim ulama. Mereka sanggup hanya menaiki motosikal berulang-alik ke tempat kerja semata-mata untuk mengumpul wang pelaburan, makan dan minum hanya yang disediakan di rumah, atau memiliki peralatan berdasarkan keperluan hidup atau mati daripada untuk keselesaan semata-mata.

Pelaburan hartanah bukan seperti perjudian yang mengharapkan hasil yang besar dengan usaha yang sedikit di dalam sekelip mata. Ia memerlukan pengorbanan yang berterusan sehingga matlamat pelaburan telah tercapai.

Akhir kata, selamat menyambut Hari Raya Korban 1435 Hijrah.

Sertai pasukan kami mempelajari dan merangka strategi pelaburan hartanah mengikut keupayaan masing-masing di dalam Seminar Pelaburan Hartanah Mampu pada 8 Nov. 2014 di UTM Skudai, Johor.

Tempat terhad dan anda hanya perlu membayar RM50 untuk tempahan agar kami boleh menyediakan bahan pengajaran, makanan dan minuman.

Gas Price Increase? Congratulation to All Property Investors!

You have successfully hedge and grow your wealth through investing in property no matter what, where and when you bought them. Your willingness to sacrifice yourself and family for future prosperity is proven once again when the government of Malaysia announce the increment of petrol and diesel prices yesterday in late afternoon ...once again in a very short time. This move was also done as the preparation for GST implementation on 1st April 2015.

No matter how bleak the economy and how hard your life is, as long as your property has the right target market, there is always demand for rent. Hence, you can easily increase the rental price if you manage the property properly. If the government increase the gas price or forcing GST on us, you can pass the cost to the tenant. It is beyond our control and hence you have the right to renegotiate the current rental agreement.

I was quiet lucky since I just increased the rent of my first house from RM600 to RM800 (33% increase!). While the following year, the rent will be RM880. However, you have to make sure the property you rent out is maintained regularly.

Once the current tenant leave the premise, you should make sure the premise is clean and tidy as much as possible. I just finished repainting some of the walls of the house.

I believe and calculate it is still not too late for other people to join buying a property or two for investment. There are plenty types and location of property which may be suitable to your personality and requirement. But first, you must learn the best and worst criteria of a property to invest in. There are also different strategies for different people's background. You have to learn as many strategies as possible and adopt one of them to suite your needs. In order to do this more efficiently, it is better to learn from experience people such as attending our property investment seminar on 8th November 2014 in UTM Skudai.

Sometimes, you already have the knowledge to invest in property, but you are still reluctant to invest. Thus, you need a mentor to guide and open the door for you. No matter what is the economy condition, there is always a good location and property to buy provided you look hard enough. In the property investment seminar, we will give you some of the tips based on real experience and calculation where to invest.

Once again, I would like to congratulate those who recently bought property especially those who bought after getting assistance from our team!

Petrol and diesel price increase? So what?! 

Join our property invevstment seminar on 8th November 2014 in UTM Skudai to guard and increase your wealth.

Book a seat now for only RM50. The balance can be paid on the seminar day.

Buying a Property without any Capital

Lately, I am really baffle why people don't want to buy a house whereas they can actually afford it. It is one of the best ways to force yourself to save for the future. And if you select carefully, the house can easily generate additional income for you.

In one of my previous blogs, I advertised to sell my first house on 19 August 2014. I rented the house for RM600. The current tenant was a good paymaster. The payment was always made on time. Soon after my advertisement including in my facebook, the tenant told me September will be their last month to rent the house. This was a good news for me. My house is located in a hot market. If the current tenant want to quit renting, I can raise the rental for a new tenant.

My advertisement for rent was published in 6 September 2014. The asking price was set for RM800. After submitting my advertisement, I pray for Zohur. As soon as I finished my pray, someone call me asking to rent the house. Wow, that was fast. Normally, it took a day for an advertisement to get publish. And it took a couple of days for any inquiry on the house. Since, I don't have the house keys, I set the visiting date to be at the end of the week and hoping I can get the house's keys. Within a few days, more than 10 people already expressed their interest to visit the house. Some of them want to move in immediately. But, I cannot allow them to do that until they view the inside of the house.

Unfortunately, I cannot get the house's keys by the end of the week while in the following week, I went to KL and Kuantan. Finally, the visiting day was finalized on 20 September 2014. And there were more than 25 people already contacted me to visit the house. But on 16 September 2014, I visited the house due to Malaysia's day celebration and manage to meet one of the potential customers. This customer is smart since they managed to visit the house earlier by asking permission from the current tenant to get inside! After updating the visiting day to all potential customers, I waited at the house from 12pm to 5pm.

There was one main purpose for me to ask my potential customers to visit the house: to access their background in order to determine whether they are worthy to rent my house. After more than 17 years having tenants for my house, I was very sure what to ask in a way they don't realize what I have been doing. This will be revealed in detail in my 3rd affordable property investment seminar on 8 Nov. 2014.

Some of my potential customers need a few days to decide while a couple of customers wanted to see me on the next day to finalize the discussion.  I finally choose to accept a tenant who was the first one I met and signed an agreement on the following day. There were still a few people visit my house on the following day. To their surprise, they were too late to rent the house when they met me at 5pm Sunday 21 September 2014.

What baffled me towards the end of the tenant hunting, some of them can afford to buy a house in the area based on their background. Here was my simple analysis:

Selling Price : RM150,000
Loan             : RM150,000
Loan length  : 30 years
Interest         : 4.5%
Monthly       : RM760.03

Since, the monthly loan repayment is less than the rental fee, most of them definitely can buy the house with profit. The main question was how to come out with the 10% deposit, lawyer fee and duty stamp? Once you know the tricks, you may bang your head on the wall for not taking the opportunity!

Another question one have to ask is how to make sure the loan is approved. This is also another investment trick which one should learn in order to progress quickly in the property investment industry.

To know the answers for both questions, you should attend my 3rd affordable property investment seminar on 8 Nov. 2014.

Membina Kemahiran Pelaburan Hartanah Melalui Penguasaan Bahasa

Para graduan harus sedar penguasaan bahasa Inggeris bukan sahaja penting untuk mereka bekerja tetapi untuk mengembangkan minda mereka semasa dan selepas tamat belajar di universiti. Kebanyakkan ilmu, coretan dan nukilan yang berharga untuk mengembangkan minda berkaitan isu-isu semasa atau jangka panjang (seperti pelaburan hartanah) ditulis di dalam bahasa Inggeris.

Penguasaan bahasa selain bahasa ibunda juga dapat membentuk minda agar sentiasa berfikir dan bukan menghafal semata-mata. Tidakkah kita berasa pelik mengapa al-Quran diturunkan di dalam bahasa Arab? Tidakkah kita berasa pelik mengapa rukun-rukun penting di dalam sembahyang dan sesetengah ibadat dimestikan di dalam bahasa Arab? Jawapannya ada di dalam surah Yassin. Jika kita rajin membaca terjemahannya kita akan dapat menjumpa sebuah ayat di mana Allah menerangkan mengapa Al-Quran bukan diturunkan di dalam bahasa ibunda kita.

Al-Quran juga mencabar manusia agar memerhatikan alam persekitaran dan cuba mencapai sesuatu yang kelihatan mustahil. Adakah kita mampu mencapainya? Tidak, jika kita hanya menggunakan penglihatan dan kekuatan tenaga sahaja. Namun jika kita menggunakan kekuatan akal fikiran, kita akan mampu mencapai sesuatu yang kelihatan mustahil kecuali mereka yang menggunakan akalnya.

http://www.thestar.com.my/News/Nation/2014/09/02/muhyiddin-yassin-english-must-pass-subject-at-public-universities/

Ramai graduan universiti mempunyai falsafah pendidikan yang salah apabila menyangka pendidikan mereka berakhir setelah tamat belajar ijazah di universiti. Mereka seharusnya memperolehi kunci pendidikan jangka panjang iaitu penguasaan bahasa. Berdasarkan perkembangan ekonomi dunia, selain bahasa Inggeris dan Arab, para graduan universiti juga harus digalakkan mempelajari bahasa Mandarin!

My First Shop House for Sale

I am planning to sell my shop house which I bought in 2008. A shop house is a property where the ground floor is a shop while the top floor is a house where people can live. My shop lot has three rooms at the top floor and one kitchen which is fully tiled. But most of the time, the top floor is also being used as an office. The shop lot is located at 31 & 31A Jalan Utama 43, Taman Mutiara Rini, 81300 Skudai, Johor. The front view is shown below. The size is 22' X 75'. The top floor is fully built from the back to the front. The middle of the top floor, the roof is very high where some owners already create another floor in the middle so that they got another half floor at the top. So, the shop lot can become 2 1/2 floors.

Most of the shop lots in the surrounding area are fully occupied. Currently, I already have two tenants: for top and ground floors. At the main road, there is an Affin Bank and a Police station facing the main road. While my shop lot is facing the empty plot of land.  The empty land is underdevelopment since early this year.

Currently, there are two main projects underway which are to develop shop office lots facing Persiaran Utama, and terrace houses at the back. The shop lot prices are RM1,400,000 for 2 storey intermediate lots and RM3,000,000 for 3 storey corner lots. Upon completion in 2016, I estimate the shop lot price will become between RM1,800,000 to RM4,000,000. At the back of the new shop lots, there are many new gated and guarded terrace houses being built. The entry gate will be facing Jalan Utama 46.

There are many interesting new development in the surrounding areas such as Mc Donald, Tesco (more than 50% complete) and Mydin as shown in the picture below. Mutiara Rini developer is also aggressively building the surrounding areas with new houses. Thus, the whole area is getting busier every day. In fact, Mutiara Mas township which is at the front of the McDonald is also getting crowded. The new 3 storey shop lots at Mutiara Mas was sold under sub-sale for RM1,800,000 (originally sold by developer for RM1,200,000) within a few months of getting the keys!

But the most important development to be executed (already approved) is the 2nd link highway exit close to Lima Kedai. In fact, the whole area of Taman Mutiara Rini has been enlarged after the developer got the approval from the authority to develop the 2nd link highway exit. The main road is also under construction to be expanded from two lanes to four lanes connecting the whole area to the 2nd link highway while bypassing Lima Kedai town.

If you are interested, you are welcome to email me for discussion.

SEMINAR PELABURAN HARTANAH MAMPU SIRI 3 (3rd AFFORDABLE PROPERTY INVESTMENT SEMINAR)

JIKA ANDA PERNAH GAGAL DI DALAM PERMOHONAN PINJAMAN BANK UNTUK MEMBELI RUMAH, ANDA DIGALAKKAN MENYERTAI SEMINAR INI DAN MEMBAWA SEMUA DOKUMEN YANG BERKAITAN DENGAN PERMOHONAN PINJAMAN TERSEBUT.

Pihak kami akan memberikan khidmat nasihat untuk mencerahkan peluang permohonan pinjaman pada masa hadapan. Pihak kami telah berjaya membantu pelbagai pihak di dalam permohonan pinjaman.

I am pleased to inform the 3rd seminar will be held on 8th and 9th November 2014. The first day is open for beginner and intermediate property buyers or investors. This time, the short course will be emphasized on the buying process instead of too many technical know how. But participants are still open to ask any relevant question. Potential investors should be able to see their weaknesses and wrong assumption of the industry as shown in the flowchart on the left. 

This single day seminar will cost RM250 per pax. The main focus of the investment is IRDA, Nusajaya and surrounding areas. But the same principles can be applied in other areas of investment as long as investors have done the proper homework based on the taught principles, strategies and tactics.

The second day on 9th November 2014 is for face to face mentoring. Participants should bring their 1st draft  of investment strategy and choices of properties to invest based on the knowledge learnt from the previous day. Mentors will be around to discuss the weaknesses and strength of the proposed strategy based on each investor's strength and weaknesses. The mentoring session is offered at a special price for this event at RM250 per head.

You should also bring your list of questions to be asked on the first and second day. The questions could be what are your main concern which make you hesitate to invest or buy a property.

For examples:

1. How to buy property without almost no deposit (100% loan)?

2. How to get good tenants?

3. How to select a good property which can ensure high quality tenants?

4. My monthly excess is not sufficient to cover the bank loan to buy a new property, what should I do?

Cheap Money is Coming Back to Malaysia

ARE  YOU READY?

Finally, USA admitted, there is no economy recovery...yet in USA. While EU economy is getting worst especially after some 'wise' people trying to blame the Russian for the tragedy of MH17. Sometimes I wonder, why the Europeans are so stupid to sanction Russia without proper solid proof which makes EU economy deteriorates. While USA puppet masters are smiling behind the curtain. What is the bigger agenda? You can read the details here:

At almost the end of the article, pay attention to the red lines:

So, what is going to happen?

1. ECB will print more money, hence reducing its worth. So, where do investors should park their money to maintain the rate of return? Guess where?

2. KLSE and property market will be flooded with cheap money again. But this time, Bank Negara is more cautious.

3. Price of goods and services will go up because RM exchange rate is also tied to Euro while the people will blame on the Malaysian government for introducing GST. Please learn to grow a little bit of foods on your own...just in case. 

4. While people were wasting their time blaming on the government, a small group of people who realize this had happened before when the FED debasing her currency, will prepare their funds to buy more

 property.

5. To maintain profits, MNC will shift their production, operation and design work to Malaysia while offering higher salary for certain group of people (who aware the latest skills and knowledge needed).

6. Property prices will continue their previous growth path especially in IRDA and surrounding RAPID, pengerang.

All of these can happen provided China economy does not crash and there is no World War III!

Property Market Slowing Down - Not in Nusajaya!

My wife and I attended the launching of Grand Medini service apartment by Grand Global, (http://grandglobal.com.my) on 23 August 2014. I have attended several service apartment showrooms but not during the 1st day launch. The sales office is in Medini Hall which is next to Legoland. The trouble to go here is the parking lot is too far away from the Medini Hall.

We arrived at about 11.30 am but the showroom was already full of people. The price was very expensive which is more than RM1000 psf! This price is already like buying a service apartment in the middle of Kuala Lumpur. But, if you buy a service apartment in Kuala Lumpur, the surrounding area is already full of development with some matured areas. In some areas, there are LRT, shopping complex or large office buildings. But it is not so in Medini. Most of the buildings in the surrounding areas are under development especially hotels and apartments.

There are 208 units for sales for Tower B. Once completed, there will be three towers named Tower A, B and C. The company selling points for such expensive price is because the apartment is about 400 meters to Legoland and Medini Hall. Across the road of the apartment, another developer is going to develop Gleaneagles hospital with about 5,000 beds. The apartment is also about 5km to Educity where about 10 international institutions will be located, 3km to Puteri Harbor and Nusajaya administrative center. Since Medini is the center of Nusajaya, LRT station or High Speed Train station will be built somewhere in the area. I believe LRT station is possible but HST is still unclear.

With such high prices and immature area, I was not expecting the sales will be good. In addition, it is difficult to get loan after several Bank Negara new regulations. So, after looking around the kitchen, bedroom, bathroom and the models being displayed, we had our lunch first before we ask for more details. Below is the types of apartments being sold. I have not bought any service apartment before. So, the type of apartments made me wonder who are the actual target market. They are a bit different than most of service apartment shows I have attended.

To my surprise, by 1pm, there are only about 61 units left. 70% of Tower B is sold! Who's saying the property market is slowing down? It seems now the report made in several newspapers that property market all over Malaysia already slowing down is not true. There are several reasons why the slowing down in property market is not affecting Medini, Nusajaya:

1. No RPGT
2. All properties are international status
3. Freehold
4. No minimum RM1million price ceiling

To make it worst for those who did not realize these factors, the other two towers are only on sale in Singapore in near future. If you are planning to buy one, you should hope there are some leftover which are not attracted to Singaporeans!

My First Property for Sale

I bought this house in 1997 after two weeks I got married. It is quite emotional to sell this house. My wife and I have sacrifice a lot to maintain and fully paid the house in 2012. The funny thing is we never slept in the house!

Last year, the house was repainted, fully cleaned especially both toilets, and repaired any damage. The poach was also improved by building the walls on both sides, a new gate and cement the whole poach. I built an L-shape table top in the kitchen so that it is easy to cook in the house. While the renovation was done, a few people already asked to rent the house on the same day! This year, I have to replace the piping from the main road to the main tank since the old pipes already burst in several places. So, whoever buy the house does not need to worry about the condition of the house. It is also one of the reasons why I can easily get a tenant at a high price!

The house land size is 16' X 65'. There are 3 rooms and 2 bathrooms. The asking price for year 2018 is RM250,000 (RM160,000 was 2014) and it is negotiable. If the current tenant quit renting the house, it can be rent out for RM1,000 to RM1,200 depending on your business plan. If you want to make it a homestay, you can get even more. Bandar Seri Alam is a very busy place nowadays especially after UiTM and UniKL already started their operation. When fully operated, UiTM and UniKL are going to have 15,000 and 5,000 student! In 2018, there are more than 6,000 students in UiTM Bandar Seri Alam. This is excluding the workers and other learning institutions in the town. Bandar Seri Alam is also known as Bandar Ilmu (Knowledge City) since there are many learning institutions in the town.

If you visit the house, I can explain the business model I have used for this house, what are other potential business you can do, and how to make sure you can get a good tenant. You have to choose the right strategy for yourself depending on your personality. Originally, the top floor was not tiled. But, I already tiled the top floor about 5 years ago. All the furniture available in the house can be yours as shown in the pictures. There is also a refrigerator in a good condition.

I am not desperate to sell this house especially when I managed to increase the rental for both of my shops recently. In the future, I will explain more in detail how I managed to increase my shops rental by 50%. The traffic flow between Skudai to Pasir Gudang is not getting better for the next two years. So, it is better for me to sell the house and concentrate my investment in the Western part of IRDA. It was a tough decision especially I was thinking to maintain holding the house to stand by if my eldest son will further study in Bandar Seri Alam. My wife's cousin just started his first year study in UiTM Bandar Seri Alam. Guest where he is staying? He have to rent an apartment with 3 rooms for RM1,300! And to cut the cost, he have to share the apartment with another 9 students! It is not only about cost, even if you have money, there is no vacant house to rent in Bandar Seri Alam. If you put an advertisement today, you can get a tenant by today if you are not a picky owner!

HAPPY INVESTING!

MASPEX 8-10 August 2014 at Sutera Mall, Johor Bahru

I visited the Malaysian Secondary Property Exhibition yesterday. There were a lot of property agent companies showing the secondary properties for sale. It is good to have this kind of event especially for those who never buy before. However, there are several major weaknesses which my team have detected.

Weakness:
1. The sales price was not comparable with new properties, no price comparison with new property. Buyers have to figure out on their own. If this important service is not provided how buyers can be convince to buy especially those who are not familiar with the area. The salesmen/ saleswomen are not persuasive enough on why people should buy at the location.

2. Visitors were not greet with golden question: do you come to buy or to sell, do you want to rent in or rent out a property?? Our team went there for both purposes. It turned out we have to ask to be served!

3. None offer any advice how visitors can profit from the property investment either use on own or rent it out. So, my team gave out our training brochure instead! Some agents were quite surprise when I told them I have helped several people who look like will fail the bank loan. But they managed to buy almost half a million or more worth of property!
4. Some companies offer property for auction but none offer the service to be auction agent. Instead I have to ask for the service. They have difficulty to explain to me the procedure and the cost involved.

Overall, it was a good event but there are a lot of improvement need to be done.

Multiple Income Stream and Property Investment

When talk about wealth creation, people talk about multiple income streams. It means the more ways to generate income, the more wealth you can accumulate. For a layman, the more works you do, the more money you can have. For a middle and below workers, this can easily be done by working overtime. Some companies may offer more allowance if you are willing to do more work at a time. For example, as a lecturer beside my main responsibility to teach the students, I can also opt to teach part time students on each semester. In some multi-national companies, engineers are rewarded by doing more work per week.

Young labour force should focus on their permanent work. To get more income, they should spend more hours to learn the trick of trade in the field rather than doing other things in parallel such as Multi-Level-Marketing or MLM. Some people beside having the permanent job, they do another part time job such as being a part time tutor or part time business. We only have two hands, two legs and one brain to do our work. Thus, it is much easier to focus on one job especially if it is a new job. You should learn from more experience workers so that you can increase efficiency and productivity. Sometime, you should also learn something beyond your official job scope so that these knowledge can be used in the future.

However, we must always ask ourselves does the work we do really give us more income or is it a diminishing income? In economy term, it is call diminishing return. It means over time, although the amount of the work being done is the same, the amount you get paid is less than what you expected. But, most people are trapped with the amount they see. They forget to factor in the inflation rate! I was paid for RM4,500 per semester in 2000 for teaching part time students. Guess what?! The rate is still the same until now!

Thus, it is not productive to continuously teaching part time students. But, this does not mean it should not be done at all. Some additional works should only be done for a specific target. For example, to buy a new home in 2000, I have to work part time for the next 5 years. But, once my salary has increased over the years, I have no problem to pay the bank loan even though I did not teach part time students. In fact, I stopped teaching part time students after 2004. Stopping part time students also give me more time and energy to focus on my R&D activities.

We must always look for jobs which give higher return in present and future. We should ask ourselves can our job easily be done by someone else? If yes, it means competitors can easily appear and thus our worth is easily diminish! If the work is specialized and very hard to learn, we can survive as long as we love the work. Another example, when I graduated, I sold PCs which can give me a profit about RM800 per PC. However, after five years, a PC can give me a profit less than RM100. Thus, I shifted my focus from selling a PC to do machinery maintenance and design work. Since both are also my hobbies, I have no problem to put extra effort to learn (see Turn Your Hobby to Income). I don't mean selling a PC is bad. It is just a diminishing return activity for me and thus not profitable for me anymore.

It is unsustainable to do multi-works at the same time forever or until you retire. However, each additional work either part time or small business should come with a medium term target such as accumulating capital for investment. Once the target is achieved, stop do the work for one or two years. You should take a break in order to avoid burn out. Besides, doing the same thing for more than 5 years is counter productive. However, not many people are willing to change permanent job every 5 years. Instead, the part-time job or business should be changed.

Increase Your Worth

After berHari Raya from Monday 28 July 2014, I managed to meet many relatives, friends, and long lost friends for more than 30 years! Here are my conclusion about their mentality of wealth creation:

1. In general, most of them have done well in their life. A house, expensive cars, good family and carrier or business.

2. Most of them live in a big city or our own hometown.

3. While talking casually, we would like to talk about our past experience and how life is going on.

4. Not many people are interested to talk about property or wealth creation. Most of the time, information are in front of the eyes but they never bother to find out. Since, they don't have any information, they cannot see the trend. And without any opportunity to see the trend, they miss the opportunities in front of their eyes.

Although most of them are in (1) and (2), most of them did not take advantage of what they have. None of these people discuss seriously in property wealth. They cannot see the opportunity in front of their eyes. None of them have attended any property seminars! Their mind set, you have to be rich to buy more properties...which is totally wrong. Without knowledge, you cannot unlock the wealth within your possession.

These are some of the property related activities I managed to do:

1. What is the current and past values of the properties I have visited?

2. How is the traffic flow in the area my friends lives? Is it difficult to find the place they live? How long they have been living there? How do they go to work?

3. Most people are sensitive to tell what is their position in a organization. But, based on the job description, I can infer how high up their position is, how much is their salary, and how much stress is in their work. It sounds like I had became a shrink? Sorry, I am not a qualified one. I prefer to ask simple questions for ice breaking while trying to find the area of interest in a discussion.

4. I managed to discuss with a few relatives how they can increase their worth to the bank in order to buy a bigger house, generate more income and calculate the future risks.

5. I also managed to find a few interesting ideas to generate income in property market.

So, what have you done for the past one week? Well, in Johor, we still have another 3 weeks to celebrate Hari Raya. So, I still have a lot of time to do some information digging.