Psychological is as Important as Capital in Property Investment

A lot of people give many reasons why they have not buy a house. For those who already have one, they are also pesimis when asking why not investing on a new house or commercial property. Including my good friends, their main reason is always affordability. Little did they know that a lot of people can buy a house, and many people can make property investment if they have the right mind set.

A lot of us were involved in sports when we were in school. Some of us managed to become the champion in our respective fields while a lot of us fail to achieve much even though we have put a lot of effort. For a high level sport, we can always see the difference between the champion and the secondary achievers are always their psychology endurance.

However, in property investment it is difficult to become a loser if you have properly done your homework. A detail study of the property development plan, stage of development, target market etc. are some of the essential information must be studied. But, some people who have the opportunity for the correct information still have not make the investment due to poor psychology assessment.

Below are some of the psychological stress to be prepared:
- your quality time is spent at home
- look for cheaper or free entertainment
- your relatives thought you are rich and can buy whatever you want; so stay low profile in any expenditure
- advertisement is an art
- be prepared to resist to turn to the dark side: too friendly or entertaining ridiculous demand from potential tenant can be stressful. Learn to be diplomatic to refuse.

Below looks like financial stress, but there are psychological impact which you must also be prepared and get harder as your family grow older.
- restrict your expenditure (very difficult to discipline)
- less eating out when there is no tenant (very difficult to discipline)
- less travel holiday
- capital needed for maintenance, cleaning and refurbish

- use old car or whatever you already have

You can add the both list above. Due to age factor, the earlier you start a property investment, a better prepared you are for any future property investment.

First is a must

Second is the hardest

Third is difficult

Fourth is possible

Fifth is graduation

Sixth and above are your freedom.

A house an investment worth to die for

Last week was eventful with shopping campaigns. Some people were willing to queue for days in order to buy not necessity stuffs such as branded smartphone, clothes, shoes etc.

It was a joyful moment for these people as stated below.

In some places, there were incidences where people fight to buy and or fall sick while buying.

If you want a more detail analysis of black friday violence, you can read it here.

Now, how much are you willing to fight, queue and sacrifice to buy a house or invest in a property for your future?

But for sure looking at the sales figure, during these Black Friday, a handful of people become millionaires and billionaires. And definitely, they are not those buyers:

For me, it is the best and cheap entertainment for me to watch idiots fulfilling their desire!

Teaching Chess for Primary School

I have been requested to train the chess team from Sekolah Kebangsaan Taman Universiti 4. As part of my social works, I accepted the job. The school has a bunch of talented students. However, they lack of practise and theoretical exposure.

There are two or three students who are quick study. But, we have limited time to prepare for the tournament. Two weeks before the tournament day, we spent almost every day to practise. In addition, I spent one of my weekends to teach them.

The girl's team has limited number of members. So, I asked for the juniors to attend.

Meanwhile, one of my daughter took part in the tournament in secondary school section. She won the 10th prize. She could do better if she was willing to spend more time to learn and practise.

A Property Investment is like an accumulation of Games

During university study, my friends and I always spent time to play Monopoly. I believe almost all the people in the world know this game. We spent hours during weekends to play this game. Somehow, I have the talent in this game. I may not always the one who won everything, but I hold the longest record who never became the 1st player who lost the game. I don't remember the exact duration but it was for months. In the end, I became the first person to lose because the other players gang up to defeat me.

This made me realize that in the real world, I can always be in a winning situation as long as I am not the first to lose. This can be achieved with careful planning and execution. And the most important thing is it is impossible for everybody in the real world to be against you unless you are really in a terrible situation. Even though Monopoly is just a game of chances, you can still put some effort to analyze the situation and hedge your situation.

As an amateur chess player, I did once won Boston, USA tournament in 1994 when I was in a long semester break. It was a tough competition. But, I have good friends who help me to strategize to prepare for the competition. In the end, I won the prize which was worth more than two months of my scholarship allowance.

These two games made me realized that a lot can be achieved especially in property investment if I can work in a group of similar minded people. We can exchange ideas, strategies, tactics and information. I can also learn from those who already succeed. Their ideas may no longer can be used due to changing circumstances or government regulation, but they are worth to be analyzed, modified if necessary and used when the opportunity arise. And as in any game, to begin is the most difficult part. But as you go along, more knowledge and experience being accumulated, you will be fine. The sooner you start is the better.

But remember, avoid being the first casualty. That is easy actually, always be frugal, calculative in your expenditure, and saves your extra income.

1st Hari Raya Celebration

I moved into my new house on the day before Hari Raya last year. As a result, during the month of Hari Raya 2016, I spent a lot of time to do finishing touch on my house renovation, decoration and cleaning. There was only limited number of old neighbors visited my house.

This year, for the first time, my family organized a small gathering for new neighbors who also just moved into the neighborhood. They are all from the same development phase as me.

In a small group, it is easier to get to know each other. The main hall is comfortable enough to have more than twenty people at a time. But, my wife and I decided to have this special gathering to get to know the new neighbors.

Half of us are property investors. And one of us is a full time property investor. It means he has no other income but only by property buying and selling.

The women were enjoying the fresh air at the outside of the house.

We enjoy each other company until past mid-night.

Traffic Jam due to Poor Mentality

We can have a world class facility or infrastructure, but poor mentality by society always fails us. Developers and government agencies can make good plans and implementation, but in the end, it is always the end users who decide the outcome especially when we are on the road.

Yesterday, my family and I wanted to go to my brother's house at Putrajaya from Rembau, Negeri Sembilan. It was supposed to be about an hour journey. But, we faced a heavy traffic jam before we even reach Senawang exit. It was a long queue with vehicles crawling to almost a halt.

I was wondering whether there was a huge accident ahead. The worst stretch with traffic jam was between Nilai to Bandar Putra Sri Mahkota. After passing Bandar Putra Sri Mahkota, the traffic went faster although it was still less than 50 km/h. Then, I saw the culprit ahead. The drivers on the highway were driving slowing because they were watching a Plus Ronda vehicle was helping a damage car on the emergency lane. Due to this, my travel time became more than two hours.

The drivers were not helping actual. Instead, they were making other people at the back miserable. This is the poor mentality of Malaysian drivers. I hope Plus Ronda can deploy a huge canvas or whatever the material which can cover the entire vehicles involved in any accident, damages or stop. Thus, drivers on the highway cannot see anything and drive their vehicles at a normal speed.

Work harder to settle loans or just laid back and blame the economy

I used to believe loans are bad for personal use. Once a loan was made, I felt happy for a while since my objective to acquire things have been achieved. After a few months, the burden to pay the monthly installment will kick in. I will lost new opportunity to buy other things or invest the excess money. One thing for sure, I have to work harder and smarter to get more income. So, when I want to buy my second home, I calculated I must have a consistent part time income every month.

The question is what kind of part time job should be done. Well for starter, I started with my available skills which is electronic design. Initially, I just followed my friend work on designing automation system using PLC. It was an expensive solution at the time. I want to use custom made microcontroller based design. But, I have difficulty to find the resources at the time. Since the profit was still reasonable using PLC, we save a lot of development time.

At the same time, my hobby was to learn to write programs for Microsoft Windows operating system. It was a hard thing to do at the time since www was at infancy and there was almost no book on it at the time. During my degree program, it was not part of the curriculum. It was a big challenge for me but I love it. After several months learning the tools, my friend asked for my help to build a simple database for Ms Windows OS. It was an instance yes answer even though it was not much. But the experience and the thrill to produce something out of my hobby were really exciting! Another friend of mine ask me to translate the learning process in Bahasa Malaysia and teach his staffs. It was a new challenge to me because I have never teach programming before. Then, my electronic projects demanded me to integrate the electronic designs with database and GUI.

So, my hobby have become my consistent part time job. Even though it was difficult, I really had fun doing it plus the profit keep increasing over the time. And since it was my hobby, I have no problem to accept any new challenge until I manage to reverse engineer Variable Message Signage (VMS) for Perbadanan Putrajaya. My part was worth about half a million but the total project cost was more than six million. It was huge for me.

At the mean time, my property investment worth and rental fee kept increasing. So, I believe if I did not do any property investment, I will just laid back on the couch and enjoy the TV and video shows every weekends. Why bother to find more money when my salary as a lecturer was stable enough.

Buying Motorcycle for My Son

My son want to have a motorcycle so that he can use it during his study far away from home. After he had surveyed a lot of places, he found the cheapest motorcycle for Yamaha FZ 150. It is a second hand motorcycle. We don't want to waste money to buy a new one. Buying a vehicle is not an investment. Unless, it is meant for generating income, it is worth it to buy a new one.

Although my son work part time during his long holiday, his income is not sufficient to buy the motorcycle by cash. He wanted to buy it by the motorcycle shop's loan. After I shown the calculation, it is very expensive to buy the motorcycle by a loan. Hence, I loan the money to him to buy the motorcycle by cash!

I know my son cannot repay me by monthly since he has just beginning further study for his diploma for a semester. And, I don't want the loan money to lost its value upon my son's graduation. So, he have to calculate the money to be equivalent to gold value which is currently RM191 to 1 gram (Public Gold). The total cost to buy including the road tax and insurance was RM4,232. Hence, he owes me about 22.16 grams of gold.

I prefer the money value to be preserved in gold since this loan is going to be more than 5 years without any interest. Gold is good to hold the value. But, gold as a physical cannot generate wealth on its own.

The booking money was paid to the motorcycle shop, Fook Yong Motor Trading Sdn. Bhd. on 22 April 2017.  The second payment was made on 25 May 2017. The motorcycle was registered under my son's name on 26 May 2017. All the documents were completed by 28th May 2017. Upon completion, I paid the balance on  28 May 2017. Since, my son work until 10pm, I have to bring back the motorcycle on my own on 29th May 2017 as shown in the pictures.

It has been 15 years since I drove a 150cc motorcycle. It felt different. But, it is good enough for my son.

To start Property Investment is as hard as to start a PhD

I started my 1st property investment after I had worked for more than two years and before I started my master study. I didn't have much knowledge in property investment at the time. But I strictly followed my father's advice to buy a house as soon as possible after started to work. It will be a waste of money if I spent a lot of money on paying a car but I have not buy a house. Buying a house will also ensure I spent only on essential.

My first house was under affordable category

I bought my second house after a year I have finished my master study. Although I already have a house, I didn't live in the house because it is far away from my work. It was a no brainier decision to invest on a second house when it is only less than ten minutes to work. The hardest part was to find some capital and reorganized my financial.

My second house is one and a half storey

With two properties, I thought it was enough for me to live comfortably. But, life was not easy especially when you were only a few years growing your own family. In addition, the house I lived in cost almost double than the first house I bought. This means I spent more than the return I got. But, what was done is done. To compensate the expenditure, I did a lot of extra works such as design consultation, trading, charity work and teaching to industry.

This also remind me, my master qualification does not make me a master in property investment. Having two properties does not make me a master in property investment. Both of them were just an introduction in property investment. I always thought I need a lot of money to invest in more property. I need a better plan. In 2002, I realized in my surrounding area, investment in shop lot is better than houses. At the time, the moment you buy a house, you lost about 20% of the value if you want to sell the house in two or three years. But, shop lot prices keep increasing. I also need to learn more especially from those who already invest a lot more in property.

My first shop lot

Although I have done many engineering designs for industry where some of them are world class designs or projects, something was missing. The same feeling can be felt in my property investment. Sometimes, it was not due to lack of knowledge or skills which prevent us from excel in our fields. I felt there was the need to improve my thinking process or also known as philosophy. After some convincing from my peers, mentor and university's policy, I decided to further study for my PhD in 2008. I was reluctant to further study because I was afraid it will prevent me from my commercial activities. Now, I realized how wrong was I. Within a year of furthering study, I found a formula to buy a shop lot! Now, the real property investment began!!