New House Renovation Part 3

There is not much excitement in this week unless you are interested to learn the process to build a house. I like to talk to the contractor the process being done, their importance and how they will be done. In this way, I appreciate more the difficulty the people who build my house. Almost every day I came to visit the site. Some new ideas appeared during these visits.

Some of the 3rd week work progress are:

 If you look back in my Part 2 entry, there is some changes to the side window of the kitchen. Can you see the different? This is the latest trend in a kitchen window design. The funny thing is my contractor had to demolish the previous built window. He was fine with it as long as it still in the development process. This is one of the reason we should always visit the development site, and compare with new housing developments. This is a modified version from based on our observation. And as always, I emphasized on practicality than trendy or aesthetic values.

Sometimes, the tools being used is more important than the work being done. How the tools being organized and used are usually depend on a standard technique. But, the art of the actual usage depends on one's experience. The more organized you are, the more efficient you will be and hence save a lot of cost and time.

 If you understand this picture, you will understand the practicality issue I mentioned before.

The kitchen area is 14 feet width times 17 feet long. It is a large area to satisfy my wife's need especially during preparing for a kenduri.

The following weeks should be more interesting and educating.

Saving Power Consumption and Water Utilization

In order to save resources, we have to use them less. But sometimes you have no choice but to use them more as you need them more either for entertainment, business or health etc.. As your family grow larger or maturing, a lot more resources are needed. Currently, the cost of electricity and water are too much for some people. Be reminded, these cost will keep increasing in the future. Future war may occur due to water shortages.

Thus rather than limit the electricity and water consumption, alternative ways to accumulate free water and electricity should be done. To save free rain water, you need a method to store the water. New houses in many states in Malaysia already required to have rain water storage, and a separate piping to use it. To save power consumption, the water tank should be at the top of the house so that gravity can be used to pour the water whenever we want to use it. Some housing development are forcing users to use water pump. They provide water tank with electric pump. But electricity cost is higher than water cost. So it is not practical to use water pump. Some rain water storage system is dangerous because it is very easy to cultivate mosquito. The water tank placement uses space which can be used for a better usage.

The best place is to put the tank exactly just under the roof so that when it is raining, the water is immediately stored in the tank. The tank is elevated so that the water can easily be used. However, this means a reinforced structure is needed which is expensive. But, the space under the tank can be used for other purpose such as to become a custom cupboard. Hence, the money is well spent.

In some states, the reason to add the rain water storage is to help to reduce flash flood in the surrounding area. Although the storage space is not much, if every house has one, the overall area has a large temporary storage of rain water to prevent flash food. However, the design of rain water storage is not yet standardized. In fact, I don't satisfy with the design used in my new house. A major design modification was done to ensure the rain water storage can be used for other purposes.

In Johor Bahru especially on the Eastern part of the state, the area was under water ration. The most affected area was Permas Jaya, Masai, Pasir Gudang, Kota Tinggi, Penawar and Pengerang. Since last October 2015, the water tap is only available in an alternate day. During a worst period, for every three days, the water tab was only available for one day. Many people avoid living the area during these troubling time. However, the funny thing is during these periods, there were a lot of rain water drops. But, the infrastructure is not available to store the rain water and use it.

Thus, one of the major modification I did in my rain water storage is to ensure the storage can be used during any emergency. During non-emergency, the rain water can be used to fill my planned pond, watering the vegetable plants and many more. The plan sounds easy. In reality, the piping structure must be carefully designed and implemented. Future expansion plan must also be considered.

I may patent the rain water storage design!!

New House Renovation Part 2

     My contractor has done a superb job. These are the 2nd week work progress. The weather was also good. There was alomst no rain while the foundation work was done. Thus the work was done without any interruption.

     This is the new kitchen area. The original kitchen and store room were torn down to become the main dining hall. The new kitchen was planned so that my wife have large space to work on the dishes especially when we organize any function or kenduri. However, a reminder: the bigger the kitchen, the more effort is needed to ensure its cleanliness. I would not get involve in its maintenance operation even though once in a while I prefer to cook myself.

     The main door is facing the fence's front walls while the windows on the left is facing the fence's walls on the left.

ASB Investment as an Economy Indicator

     ASB dividend and bonus for 2015 were announced as 7.25% and 0.5% respectively. This is the worst dividend from ASB investment since 2002. However, the low dividend was compensated by the higher bonus at 2%. Therefore, the combination of dividend and bonus in 2015 is the worst...so far. We can expect the worst in 2016. If we calculate carefully, 2015 return of investment is really bad because the bonus is an average of investment for the past ten years! This historical ROI of ASB investment is shown in the table below (updated from my previous article in Simplest Way to Start in Investment while Accumulating Capital):

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
2014	7.50	1.00	8.50
2015	7.25	0.50	7.75

     But does this mean ASB investment is no longer a good investment? If you invest using cash money, you should continue to do so. The ROI is still a lot better than a fixed deposit in any bank (unless you can find a Quick Rich Scheme Bank).

     If you invest using ASB loan, does the calculation in my old article is still profitable? For a RM50,000 investment using an ASB loan, the return is:
a) A direct calculation of RM50,000 X 7.25% = RM3,625
b) By monthly calculation, the total dividend = RM3,747.91
    (provided investment were done before 26 Dec 2014)
c) Bonus = RM50,000 X 0.5% /10 years = RM25
d) Total Return of Investment = RM3,625 + RM25 or RM3,747.91 + RM25
                                                = RM3,650 or RM3,772.91

The annual loan payment:
a) monthly for 25 years = RM314
b) a year payment = RM3,768

Profit/loss = RM3,650 - RM3,768 or RM3,772.91 - RM3,768
                 = -RM118 or RM4.91

Is it a profit or loss? It all depends on how you calculate and what is your target period of investment. Let assume, an investor has current investment using ASB loans as below:
a) RM50,000 loan for more than six years at RM334 per month
b) RM50,000 loan for more than two years at RM314 per month
c) RM50,000 loan for more than one year at RM315 per month

The ASB loans ROI is:
a) By monthly calculation, the total dividend are = RM3,747.91 X 3 = RM11,243.73
c) Bonus for 3 different periods = RM150 + RM50 + RM25 = RM225
d) Total Return of Investment = RM11,243.73 + RM225
                                                = RM11,468.73

The annual loan payment:
a) Monthly for loan of 6, 2, 1 years = RM334 + 314 + 315 = RM963
b) a year payment = RM963 X 12 = RM11,556

Profit/loss = RM11,468.73 - RM11,556
                 = -RM87.27

     But, if the investor did not invest in any ASB by loan, the investor is not sure whether he can accumulate cash in hand. By using ASB loan, the investor have forced to accumulate the capital for the past six years+. While the two loans which are two or less years can be assumed there is no capital gain.  If the investor sell the ASB loan which have been serviced for more than six years, the capital gain is about RM10,185+.

Therefore, the actual gain for 2015 = RM10,185 + (-RM87.27)
                                                         = RM10,097.73

Thus, ASB loan is still profitable for a medium term investment with high liquidity after the 2nd year.

Does this mean it is still wise to add more investment using ASB loan? You should decide what is the period, the risk you are willing to take and if there are other better alternative of investment to be done.

With the deteriorating of ASB investment return, does this mean Malaysia will face a lot of tougher economy condition this year?

HAPPY INVESTING!!