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.