30,000 people to be unemployed this year?

In the competitive world of today, businesses which has been around for a very long time may not be around forever. From Walmart to Toys R Us and even the few famous handphone brands. When companies are no longer competitive, this meant jobs are no longer secure. The reason for uncompetitiveness may be due to many reasons but the reason for the unemployed is really due to the person. Let us remember that the days where we do the same thing day in day out and get paid every month as well as increments every year are long gone. Today, everyday we work, we should add value so that the company could move us around and thinks of us as a talent rather than a ‘worker.’

Article in NST here.
Human Resource Minister M. Kula Segaran said the claim that 30,000 people will become unemployed is not true. He said that less than 24,000 unemployment positions were recorded last year. He said, “The unemployment rate shows nothing unusual, nothing frightening.” MEF executive director Shamsuddin Bardan recently estimated that 30,000 workers are to lose their jobs, while citing the increasing cost of doing business as the main reason for the great number. Shamsuddin said the economy within and without Malaysia was a challenge for employers to maintain their profitability.
Article in NST here.

A check in Malaysia’s leading job portal, JobStreet.com reveals that the number of positions which companies are hiring are over 25k currently. In other words, the total jobs available are far higher than the number of roles. This is just one job portal. I think even if the 30,000 number unemployment prediction happens, the more important thing is for the economy to grow and thereby produce more job opportunities so that these people could then move on to the next job quickly. As for everyone who’s working today, what have we been doing differently this year than the last?
It’s all about competitiveness or nothing is left

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Article written and edited by Charles. News article summarised by Dina Batrisyia.

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Buying a 600k condo, having a 300k cash?

A reader wrote in with an interesting question. I think there are many buyers who are really cash rich but may either hold back or are thinking of the best way to proceed. Among my many colleagues, I already know many whom if they want could just view a unit or two and issue a cheque as downpayment on the spot. However, they may not think of property investment as the main investment for them under the current situation.

The question from the reader as follows:

Assuming you are buying a 600K condo and you have 300K in the bank, how much loan would you still take? Do you go for the maximum allowable loan amount (90%) or do you actually use the 300K as downpayment so that you only need lesser loan and thus lower monthly repayment? Which one makes more financial sense? Or would you take 90% loan and put the 300K in the loan account (say Flexi-loan) to reduce the interest?

My answer – Actually, it’s hard to answer your question as every one is so different in what they intend to do. Also, whether it’s first home, investment purpose and even risk appetite. Your two suggestions above are okay! (i) Put in more, lower installments or  (ii) “throw” it into a flexible account to reduce interests. Both are fine, actually.

Personally, if I have an extra 300k in the bank and I could still qualify for 90 percent loan, I would take up 90 percent loan instead. I would then use whatever remaining to buy up another unit, whether with 90 percent loan or even 70 percent loan. By doing this, besides having a place to stay, I would also be starting my property investment journey by using other people’s money (via rental). Note, I would ONLY focus on secondary property for this case. I do not wish to take more risks because 300k is a lot of money and I would prefer to take a calculated one. I would already know if that secondary property that I am buying could be rented out easily or not as there are today lots of reference points or I could ask my friendly neighbourhood agents too.

The basic assumption must be followed though. We should not overstretch ourselves too much. As for RM300k, I seriously think it’s enough for 2 properties conservatively. If you ask the more aggressive ones, I think they may tell you that with this 300k, you could become a millionaire in no time. Haha. Just be reminded that risks increase when we aim for fast returns, regardless of the type of investments.

The market is really soft currently thus we should be able to get pretty good deals. Unless another crisis happens, there is no way market will be down forever. Uncertainty Means New Opportunities. Last but not least is that, keeping 300k under your bed versus a staying in a fully paid rm300k home has no difference. Our only gain would be the rental that we would need to pay if we were renting instead of owning. Of course the home you are staying should continue to appreciate but if you are staying, would you sell and move? Get my meaning? Paper gain means nothing if we are not using it to build more. Read here:
We have limited wealth, thus stay focussed on building it up

Happy investing.

written on 21 Feb 2016

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30,000 units of affordable homes in Selangor (below RM250k, in 5 years)

Selangorians needing an affordable home can now rejoice. As per an
article in Edgeprop.my
, Selangor Menteri Besar Amirudin Shari said that the state government aims to launch 30,000 units of affordable homes under its Rumah Selangorku housing scheme over the next five years. He said, “We are targeting 60% of these houses to be priced below RM200,000 and 40% to be priced below RM250,000.” He also shared that since 2014, Rumah Selangorku scheme has received a good response. As at September 2018, there are a total of 204 approved projects offering 104,460 affordable homes to eligible buyers. Out of these approved projects, 6,303 units have been completed and handed over to homebuyers, while 22,336 units are under construction and will be handed over in phases from this year to 2022.

He also said that under the Rumah Selangorku 2.0 housing scheme, the state has refined and implemented new changes since April 2018. The minimum built-up size for a Rumah Selangorku unit has been reduced to 900 sq ft from 1,000 sq ft while the allocation of Rumah Selangorku units in a project has been reduced by up to 10%. Due to this, the state government is also looking into reducing the maximum price tag for the upcoming Rumah Selangorku units by RM20,000 to RM230,000 compared to RM250,000 previously. He added, “With the RM20,000 reduction, I hope it will be easier for the buyers to own the house.”
Please refer to the full article in Edgeprop here.

900 sq ft is actually a good size if the layout is planned carefully. These days, private developers are building smaller sized homes so as to make the price as affordable as possible but when we look at many of these sub 900 sq ft homes, it looks really spacious and not cramped at all. If the homes are for working professionals, they (homes) could be built a little further away but make sure it’s connected to the public transport stations such as LRT / MRT or KTM. Three reasons for this suggestion; homes can be made cheaper, it’s connected and we reduce the need for every working professional to drive ONE extra car into the city everyday. The numbers of cars on the road can be reduced tremendously. Let’s hope the state government sees this suggestion. Cheers.

written on 23 Oct 2018

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31 new MRT stations; look out for more choices

I was often asked this question. Where to buy? Well, I asked them back, ‘where do you think you should buy?’ The answers are mostly those few areas. Haha. Yes, they include the MK, the B, the C, the DPC and even the P. Haha. Maybe you can guess who are some of those friends who asked me by just looking at these areas. 🙂   I think buyers of these areas could not go wrong. These areas are mature enough and has everything that most of them would need. Beyond familiarity however, some of these areas are already extremely jammed today while some are already priced way above those from areas just 10 minutes away! Surely there are other choices? Let me think……….

Fortunately, there are now more choices. Take a look at the image of all the MRT stations in MRT 1. A total of 31 stations of which 15 will be completed by end of 2016 and another 16 by July 2017. Should we not look for secondary properties around these stations instead? Secondary properties which are properly priced per sq ft so that we can afford them? Secondary properties which will give us almost immediate access as soon as we finish with some minor renovations instead of waiting for 3 years to get the keys? Of course, there are also new launches around these stations. As long as the prices are within your budget and you prefer the feeling of owning something new, please do go ahead. Oh yeah, what about the future? Say few years later?

Hey, there’s the confirmed MRT Line 2 which was supposed to start in Q2 of 2016? Now, everyone can be connected? Total number of stations would be 36 and this simply meant that there are even more areas which we did not consider previously can now be part of a debate of where’s cheapest and biggest versus the convenience in the future. As usual, the closer the home to the station, the more premium one has to pay. Walking distance would be more expensive than driving distance. Do note that parking is a cost for consideration while walking is free and perhaps healthier too. One word of caution, paying too much is not advisable unless we intend to stay in that home forever.

Yes, there’s also the existing and new LRT stations, the current running and ever more BRT lines, KTM City express and not forgetting that one loop Monorail within the city centre. Driving may really be a thing of the past? Well, until today Singaporeans with babies would definitely prefer to drive during the weekends versus trying their best to balance the baby, the carrier, the baby bag and loads of shopping bags. Malaysians, let’s aim at driving ONLY during the weekends? Well, once MRT Line 1 is completed, I do hope that the number of cars can be reduced further. Happy hunting and searching.

written on 25 Mar 2016

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33 percent fall in property transactions value in Iskandar

It does seem that negative news continue to surround Iskandar these days. Oversupply situation today, potential further oversupply for the next two years as well as the much lower demand these days with the negative sentiment. The craze of Singaporean buyers with Iskandar has reduced tremendously too. I remember just a few years ago, Singaporeans were visiting Iskandar in busloads. Of course, the buying is still continuing today but it’s more selective. Read here:
Iskandar for Singaporeans: Reversal or realisation?

Then again, when we think objectively, perhaps this is better than simply buying and later simply dumping?

In terms of actual numbers, the the value of property transactions in Johor had fallen by 33 per cent quarter on quarter (q-o-q) in the fourth quarter of 2014 (4Q14). This compares with minus 12 percent for KL while Selangor and Penang both had some small increases of 2 percent and 8 percent respectively. The launching of projects with thousands of units per developer does not help matters too. More new units are coming and for the developers who can wait, they are really waiting today. Maybank IB Research said that industrial properties are a better investment choice in Iskandar because of the relocation of small medium enterprises (SME) from Singapore as well as the smaller supply compared to the usual residential and commercial properties.

Can the sentiment become positive again? Some said that it may become better once the cooling measures by the government is removed. Especially the two percent levy on foreign purchases and a higher floor price for foreign buyers. I do not think this would be the key issue. I think the key issue remain that there must be changes or improvements which can be seen or felt. For example, the start of the High Speed Rail or the connection between Iskandar and Singapore is enhanced further. Secondly, the number of jobs available, especially the higher pay ones starts to increase. Third, the whole sentiment for ASIA is up again, led by China and not currently where even China is ‘coughing.’ Can these three happen? Happy anticipating.

written on 17 Apr 2015

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334sf for RM5 Million. Pretty expensive? It’s a ‘modernised’ historical unit.

334sq ft home for RM5 million in London. Read this piece of interesting property news in Propertyguru. The price is said to be the highest ever for such a unit. The unit is a 100-year lease studio flat at 42 Upper Brook Street. A long history was mentioned for the units which was designed way back in 1928-1929. Today, it has been refurbished with new luxurious fitting and fixtures. In one sentence, modernised unit with a historical background. Some other features mentioned in the article included: “a living/entertaining area with wooden floors, ceiling spotlighting and a bespoke cabinet with TV screen and shelving and a separate drinks cabinet for storage and entertaining guests. Behind this is a generous sleeping area large enough to accommodate a double bed and side table with reading light. The flat has a separate fully fitted kitchen and a bathroom suite with large format stone flooring and wall tiles and a spacious walk-in shower.”

The price is thus a whopping RM15,000 / sf.  Buying just 40sf is enough to buy the current place that I am staying including some minor renovations. Haha. Typically, for smaller units, the prices per sf may be higher. Thats why for SOHO the price per sf is normally higher than the usual standard units. I think there is a chance for Penang island, especially within the UNESCO site to test new highs per sf. It would be as expensive as the one in London but tell me, if its 350 sf but it’s sold for RM1 million, don’t you think it would already be on all major newspapers in Malaysia within the next day?

Who can they target for such units? Well, if it is a serviced apartment, the ‘super rich’ and ‘pretty old’ may be the target. As for Malaysia, I think only the expatriate or the international buyers. I am not sure what would I do with the unit if I am super rich, except to tell people that I like to show off? I think if I want to show off, I would be better off building a bungalow from scratch instead of buying that small unit and could not even invite more than a few friends over for a meal. Anyway, that’s just me and the problem is that I am not super rich. That’s why I love these news but would never buy one. If they update who the buyers are, perhaps I will write another article on them. I mean, we should get to know who these people are and the reasons why they buy too.

written on 4 Oct 2014

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RM348,000 for a 12-square metre car park slot.

Reported in dailymail.co.uk was a piece of news which shows how ‘crazy’ some markets could be when it comes to just one car park spot. In north Sydney, in Kirribilli, one single outdoor car parking space was sold for AUD120,000 (RM348,000). The size of the space? 12-square-metre. Yes, just the right size for ONE car. It was sold off in an auction where a crowd of 60 gathered to bid and though bidding started at AUD25,000, it quickly went up to AUD120,000. Winner owns an apartment nearby the car park spot.

According to the auctioneer, there were no such prior car park auctions, thus there were no history to follow upon. One major reason stated was because of the lack of parking space in Sydney. This made me remember what a good friend told me. In Hong Kong, ANY parking space is a premium and the monthly rental can reach RM5,000! A check online showed that Kirribili is located three kilometres north of Sydney and it is the city’s most established and affluent neighbourhoods. Suddenly it seems clear why that one car park slot can be bid up to AUD120,000, right?

Two weeks ago, I went to KLCC Aquaria, parked there for many hours and the parking came to RM32. The only reason why the fee is so high is because choices are limited. When choices are limited, any parking space automatically becomes a premium. In the near future, auction of any such parking spaces would fetch almost similar amount to the one in Kirribili. Looking forward to seeing some of you in such car park auctions in future yeah. RM348,000 only.

written on 14 June 2015

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Maximum loan tenure – 35 years enough lah

My first home loan tenure was for a period of 25 years. It was for a small apartment of 730 sq ft. I stayed there for 4 years. During the time, my brother-in-law stayed for a while, followed by my sister and later my brother too. So, I think it’s well worth what I was paying. I have since sold the property many years ago, during the 9th year I think. It would not make such a huge difference whether the tenure was 25, 30 or even 35 years. Buy a property and use it. Not buying one and wait to flip, I think that’s a
very wrong concept to have.

Reported in
The Star,
 according to Bank Negara Malaysia (BNM), the current 35 year maximum tenure is enough for the borrowers to settle their housing loans by their retirement age. It also said that even assuming borrowers were 25 years old when they got the loan, a 35-year tenure would already extend the loan up to the retirement age of 60. It further pointed out that “In addition, increasing the loan tenure to 40 years will further add to the total cost of financing without significant improvements in the affordability of one’s monthly instalment.”

I personally do not think the amount of monthly mortgage will be reduced even when the tenure is extended to 40 years. The reason is very simple, buyers would just
buy a more expensive property
 instead and in the end, still stretched to the limit. Besides, if the bank does not wish to approve the loan application, it would mean that the buyer should buy something cheaper and not skip buying or ask for a longer tenure so that they can still buy the SAME property which they could not in the first place when the tenure was shorter. Come on, 35 years is already a very long one. Of coarsen some developed countries, the tenure is even longer but we will reach it in the future, just not now.

Other interesting facts revealed in the article included the fact that about 75 percent of borrowers (1.5 million borrowers) have just ONE housing loan! It was 84 percent not too long ago. Read here:
84% of homebuyers have only ONE (1) outstanding home loan. 🙂

BNM shared that two main issues should be focused upon. They are affordability and shortage of reasonably priced houses. If I am asked to advice BNM, I would also tell them to advise everyone to be more rational and objective when they buy. That perfect property everyone is looking at is going to be priced so high that only few could afford. Time to expand the choices!

written on 21 Sep 2016

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After working for 35 years, we get many millions of ringgit, good?

How much do you think we would have earned if we have worked for 35 years? Started at 21 and retired at 56, perhaps. Let’s just say that we started at RM2,000 and we retired with RM10,000. For ease of calculation, we use RM6,000 as the mid point. Then, it will be RM6,000 x 12 (months) x 35 (years) = RM2.52 million! Now, who says working cannot make us a millionaire? Ok,ok, we will still need to use the earnings for food, car, property, vacations and many happy hours etc.

No wonder everyone says they have very little actually saved when they retire. By the way, the example as above does not even count what we have in our EPF account and does not count the bonuses and it does not also count all the dividends. This is why it’s so important to keep improving ourselves to get ever higher salary yeah. By the way, if we happened to be promoted to become a CEO one day, the pay may just be many, many times higher… Now let’s be awed by pay of one CEO of the two major airline manufacturer brands of the world.

Article in The New York Times here.
   Dennis A. Muilenburg, the CEO of Boeing who was ousted last month will be leaving the company with more than $60 million (RM249 million). In a statement, the company said, “We thank Dennis for his nearly 35 years of service to the Boeing Company. Upon his departure, Dennis received the benefits to which he was contractually entitled and he did not receive any severance pay or a 2019 annual bonus.”

Meanwhile the new chief executive Mr. Calhoun will receive a base salary of $1.4 million and be eligible for an annual target bonus of $2.5 million, long-term incentive awards worth $7.5 million and restricted stock units worth $10 million. Besides these, if Mr. Calhoun reaches key milestones including fully returning the Max to service, then he will receive an additional bonus of $7 million. Please do read the full
Article in The New York Times here.

Truth is, most of us will never become a CEO of an international airplane manufacturer. We may never become a CEO in our career lifetime. However, as shown from the example earlier, even as a typical senior manager here in Malaysia and our income is within the T20 household, we will retire with many millions of ringgit if we do the right things yeah
(Earlier article here: Earn, Save, Invest and Preserve)

It’s time to get hold of the fact that we too have the potential if we did not spend our time away doing nothing much. Example: Never ending ‘Facebooking’ or Korean dramas. Or we spend our money away buying something which will mean nothing much after a couple of weeks. Example? The LATEST model of smartphone. Happy climbing the corporate ladder and achieve a lot more before we retire.

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Of tourism, thriving businesses and contribution to the economy

Tourism is huge money for many countries, including Malaysia. For Thailand, there’s an estimate that 20 percent of the GDP is related to tourism.
Here are the top 10 most visited countries in the world.
Thailand is number 10. For Malaysia, the number of tourists have always been healthy and there’s an estimate that for 2017, total tourists to Malaysia would exceed 30 million. In 2016, it was 26.8 million. Some information in an award winning travel site here.
blog.malaysia-asia.my
According to the site, the top 10 countries visiting Malaysia in 2016 were as follows: (The first three should remain the top 3 because one is near, with currency advantage. Another one is a very populous nation while China should soon overtake Indonesia I think.)

Singapore (6,596,452)

Indonesia (1,378,699)

China (992,463)

Thailand (864,453)

Brunei (637,369)

India (359,853)

South Korea (228,023)

The Philippines (220,163)

United Kingdom (206,313)

Japan (198,693)

Here’s another very good article talking about tourism in Malaysia.
www.hospitalitynet.org
 It says, “Today, Malaysia is the 12th most-visited country in the world and the third most-visited country in Asia after China and Thailand. The Malaysian government has made great efforts to ensure that tourism plays an important role in the country’s economy. In 2016, travel and tourism directly contributed MYR58 billion to the country’s GDP equaling 4.7% of total GDP, according to the World Travel and Tourism Council’s economic forecast.” (4.7 percent of total GDP is very good. If it hits 31 million for 2017, this percentage is likely to rise further. LIKE) Malaysia’s retail development is also very healthy and ranked extremely high; third in the world. Do read the
article in NST here.
So, when tourists come to Malaysia, it’s BUY BUY BUY. 🙂   (Pun intended in relation to property investment)

Tourism is great for many reasons. Malaysia gets more foreign currencies. Businesses get more businesses which in turn needs more workers and this would in turn meant that more people having more money to spend. This pushes up the domestic consumption which helps ensure more new businesses are set up. More hotels would need to be built which in turn helps the construction industry too. Beyond just hotels, assuming just 2% of all these tourists prefers AirBnB, that’s 53,600 rooms needed! Assuming these rooms were rented out at just RM100 per night by the owners, this would mean the owners have an extra RM5.36 million to spend. Using a multiplier effect of 4, this is RM21.44 million Now do we understand why property investment should also be something good for the long term? We have yet to even talk about the potential profits to airlines flying into Malaysia.
Definitely good news for the economy when traffic grow
s
  Let’s keep welcoming more of them! I think I should think how to profit from this too. Haha. Happy visiting Malaysia, Truly Asia everyone.

written on 6 June 2017

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Highest and with a 360 degree view. Selling at less than RM100 million. Haha.

How much should a penthouse in Melbourne be? Just a year ago, the
Melbourne Median House Price
 was about AUD745,000. FYI, Australian engineers do earn the same as Malaysian engineers, number wise. Well, regardless of the price that we used to know, it will soon change because SP Setia Bhd’s project in Melbourne would be setting a new benchmark for Melbourne. It is a 650 sq m (6,996 sq ft) luxury penthouse on top of Sapphire By The Gardens. This is definitely a bungalow in the sky and at that height, there’s nothing next to it like the landed bungalows. It is priced at A$29 million (RM95.5million) and will occupy the entire top floor of the 57-storey residential tower, boasting spectacular views of Melbourne. The full article in
The Star here.
SP Setia’s project to set record for Australia’s most expensive penthouse

Other details from the article: Sapphire By The Gardens comprises a residential tower, reportedly with 345 units of apartments with a gross development value of A$376mil (RM1.24bil), that is connected by a sky-bridge to a second tower, which will host Melbourne’s newest five-star Shangri-La Hotel. It is not yet known if the penthouse was sold. The chief executive officer of
SP Setia’s operations in Australia Choong Kai Wai said,
“Sapphire By The Gardens is perfectly located, and offers incredible access to world-class infrastructure, transport and education facilities as well as having Melbourne’s newest five-star hotel – the Shangri-La – right next door. He added, “
It is rare to find an opportunity to purchase CBD property that overlooks parkland, and the 360-degree view from the penthouse will be comparable with some of the most sought-after views overlooking famous locations, like Hyde Park in London or Central Park in New York.”The property would come with 10-car spaces.
Full article in TheStar here.

When it comes to these iconic or exclusive properties, it’s very hard to define a price per sq ft for it. In reference to this particular penthouse, the price per sq ft is around AUD 4,145 per sq ft. When compared to Hong Kong, this is actually ‘not much.’ Well, it will be owned by someone who’s worth billions I guess. Surely not someone buying it to do AirBnB? 🙂  My current plan is to visit Melbourne for the very first time next year. Well, hopefully by then, I could drop by and take a look at the garden, if not the residential tower yet. Based on one latest piece of news, the property prices in Melbourne is still rising even as Sydney’s prices drop. Here’s that latest article in
The Guardian. Sydney property drops after 17-month climb but Melbourne rises.
Happy visiting or buying?

written on 8 Oct 2017

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362.8km of tolled roads in Malaysia belongs to IJM, soon.

One thing which some developers do, once they obtain sufficient reserves from the years of profits would be to buy up businesses with recurring income. This helps to stabilised their earnings as well as to ensure they are still profitable even during slow times or if it should happen again, a financial crisis. A new deal is being finalised by IJM’s wholly owned subsidiary, Road Builder (M) Holdings Bhd with Silk Holdings Bhd. The deal? Acquire all the 220 milion shares in Sistem Lingkaran – Lebuhraya Kajang Sdn Bhd for RM398 million cash. Yes, cash. Thats how rich some of these listed companies are. 🙂

Nevertheless, all these would be subject to approval by Economic Planning Unit, Unit Kerjasama Awam Swasta and shareholders of Silk Holdings. IJM said the purchase consideration was agreed on a willing buyer-willing seller basis after considering the actual traffic and discounted future cash flow projections for Silk. Silk is the concession holder for the 37-km Kajang Traffic Dispersal Ring Road (Silk Highway). This concession runs till July 31, 2037. Adding this to their current toll roads, IJM would soon own 362.8km of tolled roads. This is about the distance of KL to Penang. For Silk, according to its executive chairman, the time was right to sell these non-core business. For the past three years, 70% of its revenue has been coming from its oil and gas division.

According to Wikipedia, the total tolled roads in Malaysia is 1,630km and divided into a total of 27 highways. Thus, IJM owns about 22% of all of these. Quite a significant numbers. Toll operations are considered quite a stable business because cars will increase but the % is likely to be in single digit and thus the revenue that these highways generate would be a recurring and continuous. What else can we learn from this purchase? I think it is now safe to say that buying properties in Kajang may just be the right choice many years down the road. I am quite sure IJM has done lots of study and research on this before they buy. Thus, let’s believe their analysts.

written on 28 May 2014

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Definitely not something to be proud of. 38 percent of youths have personal loan.

One close friend who’s around the same age as me does not have a credit card today. (I am 41) He used to have many and it gave him lots of debts. These days, cash is king for him.  Well, this was shared in FB today. 47 percent of youths have high credit card debt. No fifures were mentioned but do note that within 2017 alone, more than more than 3,400 people between the ages of 20 and 30 sought counselling and help from the Debt Management and Counselling Agency. (AKPK)
The news article was in TheStar.com.my
  The news came from Bank Negara Malaysia (BNM) Assistant Governor Nazrul Hisyam Mohd Noh. He challenged the youth to manage their finances better. He said, “I challenge all of you to break the myth that the young generation are not financially savvy and do not contribute to these statistics.” (By the way, personal loan is a ‘later stage’ than credit card. Usually, personal loans were taken to pay for the credit card debts….

Debts aside, how are we in terms of protecting our wealth, whatever we have today? LIAM President Anusha Thavarajah said that 56 per cent of Malaysians are currently insured, with the figure to reach 75 per cent by 2020. (Actually, 75 percent is pretty okay to me.) Thavarajah also shared that a few insurance companies have come up with the “Perlindungan Tenang” scheme targeting the bottom 40 per cent household income group (B40) for as low as RM3.80 sen per month. His worry is real when he said, “Our main obstacle is lack of awareness by the people on insurance. We hope with this competition, more awareness can be created especially among youths.”
Here’s that article for reference.

Personal finance to me consists of 4 things.
Earnings, Savings, Investing and Preserving. Here’s that earlier article for reading.
  We have no choice but to do all four. Earn too little and there’s no way we could save enough for investing. We could suddenly incur high debts if we do not have insurance coverage because a medical card may be as cheap as RM100 or lower per month but if we do not have it and we needed to do a minor surgery, that’s easily RM10,000 gone. One kidney stone removal operation for example would already be around this number and this is a common one for Malaysians. My dear readers, we are no longer living in yesterday when people say 20 sen is enough for two meals. Poverty happens everywhere in the world and we just have to keep up with how the world is progressing. Someone posted this in Facebook today. He said that his biggest ‘financial’ gain was to get married to a good wife and they are now bringing up their family.’ Let me tell you that if you really do love your family, then support and provide coverage for them financially. Happy investing!

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written on 5 Sept 2018

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4.4 percent dividend yield plus potential price appreciation

Personally, I
love stocks.
 I think if we buy a good one, its equivalent to a fixed deposit with potential capital appreciation. Nope, I am not talking about buying and monitoring every minute and selling followed by buying again. I have no interest to spend my time this way. Also, there’s no such thing as certainty when it comes to potential dividend yield from a stock that we buy. However, if we believe Macquarie Research, then we may be interested to take a closer look at a listed developer,
Mah Sing
. Perhaps even buy a few units in anticipation of a 4.4 percent dividend yield, if the share price stays the same as currently. If the share price do move upwards, then there’s a potential to enjoy some profits when we sell later on.

In a report in The Star (31 May 2016), Macquarie Research has retained its outperform rating on Mah Sing with a fair value of RM1.72.This is a 30 percent discount to its realised net asset value (RNAV) estimate of RM2.45 a share. In brief, buying today is considered safe. Mah Sing’s share price closed at 1.44 on 31 May 2016. Take a look at some other price targets in the image from
http://klse.i3investor.com/servlets/ptg/8583.jsp
 I think we can see majority of price targets to be close to Mah Sing’s current share price already.

Macquarie further shared that other reasons for their analysis is because Mah Sing is focussed on
affordable housing
 (50 percent of FY16E launches) in key economic areas, especially in the central region. It then shared something that I did not know. It said, Mah Sing has a weighted average take-up rate of 90% across its portfolio of 23 development projects, much above the Malaysia average of 63%, as per data by the National Property Information Centre (NAPIC). 90 percent meant the developer would now be focussed on building so as to realise the profits.

It has unbilled sales of RM4.75bil (1.8 times revenue from property development in FY15) and this should provide the company with steady earnings for the next 3 years. Mah Sing has a total of 2,470-acre land bank of which 75% is still at the initial life cycle stage. It concluded, “We believe the company has the right strategy and ammunition to sustain growth going forward.” It however revised the FY16E/FY17E profit after tax by -10.5%/-11.8%, due to adjustments to its revenue and EBITDA margin assumptions. In other words, sales are continuing but the margin is squeezed due to the focus in the affordable segment.

I will not be buying additional Mah Sing’s shares beyond the 3,300 units I have currently. Let’s hope Macquarie is right. I can then enjoy a cuti-cuti Malaysia from the share price appreciation. Happy investing.

written on 31 May 2016

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4.7 pct for 2018 is healthy. (Of course it is)

I was sharing my thoughts about the property market in Melaka yesterday
(Yes, it’s still doing okay of course)
and I touched upon the economy. I shared predictions by our Finance Minister, the IMF, the World Bank but before that I asked if there are people who thinks Malaysia will be going into a recession this year (2019). There were a few people who put up their hands. Hmm… Frankly, I do not think Malaysia will be facing a negative growth for 2019 yeah. I think we will continue to grow unless external factors suddenly become very bad. Then, I read about Malaysia’s GDP growth for 2018 as 4.7 percent. I think that it’s pretty good. I am not the only one though. There are many economists saying so too.

Article in Edgemarkets.com here.
 Alliance Bank Malaysia Bhd chief economist Manokaran Mottain said the 4.7 per cent growth was still considered healthy for a developing country like Malaysia, compared with 4.2 per cent expansion the country recorded in 2016 and 4.7 per cent in 2013. He said, “As long as the growth is still above the three per cent level, the economy may yet to experience a recession.”

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said Malaysia’s economic growth was higher in Q4 2018 compared with 4.5 per cent and 4.4 per cent in Q2 2018 and Q3 2018 respectively, primarily driven by consumer spending which has been growing at above-trend level. He said, “The turnaround in exports to 1.3 per cent in Q4 after contracting 0.8 per cent in the preceding quarter has also helped the overall growth in the final quarter of last year.”

RHB Research Institute economist Peck Boon Soon said that although the overall 2018 GDP growth represented a slowdown in economic activities, it was still considered healthy as it was underpinned by stronger growth in private consumption and partly boosted by three months of tax holiday.

Malaysian Institute of Economic Research (MIER) executive director Emeritus Professor Dr Zakariah Abdul Rashid said last year’s GDP growth could be better, if public confidence was not impacted by the structural reform that took place. He said, “Malaysia is currently undergoing structural reform, so when we decided to do that, the economy will slightly slow down initially, but we will be experiencing more sustainable growth in the long run.”

Meanwhile,  Zakariah pointed out that internal factors such as public confidence, especially in terms of the current structural reforms which involved some adjustments in the macroeconomic management, along with external factors like the trade tension between US and China and crude oil prices, would weigh on the GDP to expand at a slower pace of 4.5 per cent in 2019. All these economists actually share even more of their thoughts.
Article in Edgemarkets.com here.

I think I have to reiterate the need for a vision of what the country aspires to be. Perhaps the newly formed Economic Action Council (EAC) can provide some inputs and the government of the day is able to decide on our next 20, 30 or even 50 years. Every company needs a vision which the CEO and his team would then start building the momentum towards. This is no different from a country. The PM and his team of ministers would need a vision to do their work on a holistic manner. I seriously believe Foreign Direct Investments are also waiting eagerly for it too. Please do start believing that Malaysian economy needs more work but it is not in ICU! Happy following.

written on 18 Feb 2019

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4 babies is all it takes to have ZERO income tax for life

How many babies would you like to have? When I first got married, my wife and I decided on 3. Today we have 2. My wife said, ‘kedai sudah tutup.’ (factory shutdown) Haha… For an ageing nation like Singapore, they offer cash bonus of S$8,000 (RM24,000) – SG$10,000 (RM30,000) per baby! That’s not all, there’s a matching grant of up to S$15,000
per baby. More details here.
By the way, ageing nation is an issue for many countries and not limited to just advanced countries yeah. Another country had just announced an awesome deal for babies. Anyone with 4 babies and they will have ZERO income tax for life! The country is Hungary. It’s a country in Europe and it’s part of the European Union.
Here’s that full story in CNBC.

Hungary’s prime minister announced a waiver on personal income tax for women raising at least four children for the rest of their lives and subsidies for large families to buy larger cars. There will also be a loan program to help families with at least two children to buy homes. Every woman under 40 will also be eligible for a preferential loan when she first gets married. The government will create
21,000 creche places
. In addition, grandparents will be eligible to receive a childcare fee if they look after young children instead of the parents. Hungary is worried about its declining birth rate. Birth rates in Hungary are below the EU average – In Hungary the crude birth rate in 2017 was 9.7 per 1,000 residents, just below the EU average of 9.9 per 1,000 residents. In 2017, 94,600 live births were registered in Hungary and 131,900 deaths were registered, equating to a population decline of just over 37,000 people, Eurostat data shows. (This meant that the population for the country is actually decreasing…)
Here’s that full story in CNBC.?

Would the Malaysian government be doing something similar? Perhaps we are not at that stage but I guess the time will come when the government gets really serious with this ageing nation issue which we would become one in 2035. Our Deputy Prime Minister mentioned about a similar issue just a few days ago. Article here:
Age-Friendy City
 Just a more objective purpose, I asked 4 female friends if they were willing to have 4 children so that they could have zero income tax forever. All said NO… they’d rather pay the income tax which is yearly! Taking care of the babies is like forever… Hahaha.. Okay, one of the 4 female friends is my wife. Actually, the issue of lower birth-rates is already serious in Malaysia. Earlier article here:
Dropping birth-rate / fertility rate for Malaysia
 Happy following.

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written on 20 Feb 2019

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4 Considerations – Condo for rental yield

Almost everyone think of huge capital appreciation when they enter the property market. Nearly everyone thinks buying a condo means good rental and a landed property means good capital appreciation. Let’s look at just the condo part today. Assuming that we just want a stable rental income and wants the condo to be easy to rent out. What are some of the key considerations?

Location, location, location. Famous slogan repeated by property gurus in their seminars, workshops, books and more. However, have you ever thought about, what is a great location? Is location equal to any area? Personally, choose an area you are most familiar with. If you stay in Cheras, you would know Cheras more than anyone. You should know where the jams are, where some of the hotspots for rental, where the colleges are etc. Reason why I say so is because when you are familiar, it is easy for you to rent out as well as you know exactly how to tell people why they should rent your place.

Distance from city. In this case, distance from KL city centre. Why is this important? Well, there are MANY people working in the city. There are MANY MNC headquarters in the city. There are MANY different office towers in the city. There are MANY other happenings happening in the city. You may ask, why then not buy in the city? Well, if you can get a good place with positive yield why not? Otherwise, personally I would set a maximum distance of 15km from the city. In other words, when there are no jams, I can be anywhere I want to go in the city within just 15 minutes.

Convenience. Are there shops, clinic, restaurants, shopping malls, hypermarkets, Chinese primary schools etc? These should be within 2-5km away so that you can reach them easily. A plus point would be a hospital nearby. Tell the tenant, ‘touch wood’ but if some emergency happens, you have access to doctor almost immediately. The last thing you want is for the ambulance to face a traffic jam on its way to reach you.

Size of the condo. There is no need to buy anything more than 1,200 sf because you are unlikely to be renting out to a family of 3 or 4. Keep it simple, rent it out to working couples. Even if you are renting to students which I do not really recommend there is no need for such a large unit. The students needs just their room. However, do not buy too small units because capital appreciation may be limited as well. RM500,000 for a 1,000sf condo is quite likely in future but RM500,000 for a 650sf condo? Logically, tough.

Last but not least, check first, is it really easy to rent out. Go online, check the rental rates. Make sure the condo does have a lot of other issues such as too many foreigners or even lots of unit leaking. The toughest part of buying a condo for rental is the time needed to search, view, decide and the documentation process. Once rental starts, it will be continuous for a while. Who knows, your tenant may rent from you until the day you sell!

Jointly written by asali and charles on 11
th
 March 2014.

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4 or 5 or 6 hours? Now imagine the potential.

Someone I looked up to in my ex-company (he mentored me in my career) told me that he thinks Iskandar is a white elephant. He said this just 3 years back, when all the property markets in Malaysia have slowed down. I replied that market slowdown does not happen just in Iskandar.  He said there’s just too many homes being built there and there’s not enough Johoreans who is buying or could afford to buy. Actually, whether there are way too many homes or not depend on the number of supply. It depends on the potential demand. Kedah state builds far fewer homes than KL. Number of unsold units there are far higher in terms of percentage. Anyway, let’s look at the potential. We look at just the first P (People) in the 4Ps (People, Price, Policy, Preference)

Article in StraitsTimes.com here.
  On a daily basis, the jam between JB and SG is pretty bad. It took me nearly 3 hours to cross from SG back to JB just a month ago and the time was 8pm. Well, during holidays, it could well be 4, 5, 6 or even more hours to cross over. Do read the article in StraitsTimes yeah. Anyway, we should understand that IF everyone takes the bus, then every bus will reduce the number of cars tremendously. Perhaps 25 cars per every bus. The jam is due to CARS. Now, for something real. Perhaps ONLY 5 percent of Singaporeans own a car. There’s fewer than
600,000 cars in Singapore (total number of cars)
while in Malaysia, over 600,000 cars are sold every year. Can see my meaning, yet? Imagine also if the travel time is just 1 hour while the other 5 hours were spent using money in JB.

Okay, I would like to announce that there are another 90 percent of Singaporeans who are not stuck in the jam because they do not own a car. In fact, even if they were to travel for weekend getaway, JB is still not easy to move around without a car. This is why the potential for a much bigger demand for property is definitely there. The question is how do we get more Singaporeans to travel to Malaysia (not just JB) easily. That RTS will be handy and that
High Speed Rail SG – KL will benefit many cities / towns
along the route. Happy understanding.

written on 17 Dec 2018

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4 reasons why Chinese buyers love to buy homes in Johor

Anyone here thinking about buying properties overseas? Well, if I were to buy into another foreign country, these 4 would be my reasons. (in order of preference currently).  Are yours the same as mine? Please refer below:

1. Stable government (Very positive currently)

2. Vibrant property market (Growing, importantly)

3. Continuous economic growth (Investment Grade by all international rating agencies too)

4. My kids’ education (I am looking at university, not the primary and secondary schools)

Remember the news about not wanting the Chinese to ‘control’ Johor? Actually, I do not think that’s a valid reason too but do we want to know what’s the reason(s) for Chinese buyers in buying properties in JB then?
Article in Edgeprop.my here: China homebuyers greatly attracted to Malaysia.
  These are the factors for them (Chinese buyers)

1)Property growth rate

2) Public security

3) Access to educational institutions

4) Healthcare facilities.

Yes, Malaysia offers these things. Moving on,
in an article in TheStar.com.my (click here)
  S P Setia divisional general manager Tony Ling said that good healthcare services, superb access to commercial malls and the low cost of living were the strength of Malaysia in attracting foreign property investors. Beyond this, Asia-Europe Trade Development Association vice-president Chen Chao told
The Star
 that the home prices in China have risen beyond the affordable range for many mainland Chinese. For example, in
Beijing, the residential units around the city centre could hit 100,000 yuan (RM60,278) per sq m. Even in second-tier cities like Hangzhou and Xiamen,
It is around 40,000 yuan (RM24,111) psm.  Besides that, the freehold and 99-year leasehold property titles available in Malaysia is attractive because in China the land usage right for commercial units is 40 years and 70 years for residential units.

I think as long as the reasons to buy continue to be strong, the buying will continue. Malaysia is still a beacon of potential here in ASEAN and Chinese buyers definitely see this country as a much easier to understand one compared to others where Mandarin and other dialects are not widely spoken. Let’s remember yeah, we can say Malaysian’s standard of English is declining but the Chinese’s command of English is far worse. They will need a country where the people could understand them and vice-versa. Tertiary institutions in Malaysia uses English as medium of instruction and this appeals to many of the Chinese parents too. Come on, pay in RM but get a UK / US / AU degree is pretty attractive to me. Yes, I would definitely ‘sell’ the advantages of Malaysia to the world. Happy investing.

written on 5 Sept 2018

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4 reasons that below-market-value (BMV) property is not for you

Do you love below-market-value (BMV) properties? I do. Especially in the vibrant property market of those few hotspots in both Selangor and Kuala Lumpur. However, every time I see this below-market-value word, it’s usually a property at some location where every other property is already at RM800 per sq ft and this particular one is 20% lower at just RM640 per sq ft. Something along this line, “Market value is XXXX, now this property is only at XXXX. You must not miss this!” Should it be a wow? Should it be a must-buy? Let’s come back to the basics. Here are 4 reasons why that below-marke-value (BMV) property may not be for you.

#1 – WHY do you want that property?
If your intention is simply to get a property which is easy to rent out, preferably a small unit of below 800 sq ft and your target are students, please evaluate the property based on all these requirements. Please do not throw away all the WHY just because you know of a property which is BMV but happened to be nowhere near tertiary institutions and is a landed property of 3-storeys… Even assuming it’s 30% BMV, what will you do with it?

#2 – WHERE is this property?
Everyone has their own favourite area / neighbourhood. This neighbourhood may have your in-laws’ home, your favourite friendly barista which you frequent every morning, your favourite curry mee, that hair stylist whose cut made you great looking every time and it’s also one straight road to your office. Now, there is a BMV property at an area you have no idea about and your lifestyle of waking up at 8am everyday will have to change to 7am. Please remember, once you bought it, you will have to live in it for 365 days every year…

#3 – WHAT do you want / need in a property?
 If you are looking for a place to stay because you really want to stop paying rental today, then please look for a place you love to stay! Look for a place which meets your needs. Assuming you are single and you intend to remain single for many more years (unless unforeseen circumstances happen), if the BMV property is 3-storey terrace home, why would you want to buy it?! Oh… because it’s a BMV?

#4 -WHO was the one who said you must / should buy?
 Frankly, STOP buying any property because someone told you so and you stop researching or do due diligence. I tell you this. IF I (that property expert) found a very good deal, I will ONLY tell myself, tell my siblings, tell my best friend and maybe, just maybe tell my boss. (so that he will treat me better). I will NOT tell the whole world that this property is a must-buy because it’s BMV. Of course, if we have done our own due-diligence and found out that what that person said is true, then sure, go ahead…

That BMV property may be a perfect property for somebody. Maybe it is you, maybe it’s not for you. If it’s for you, then please do not miss this opportunity. Now is really a buyers’ market. COVID-19 has helped push the advantage to the buyers too.  If it’s not for you, after you have read all the 4 reasons above, you should already know that it is not for you.

Oh yeah, at the end of 2019 when I could still conduct public auctions, one property was at it’s 4th auction. Briefly, first auction is usually at market price, second auction will be 10% down and so on and it was the 4th auction. So, this is a BMV property, right? A few bidders came because the price was just too attractive. When the bidding was over, the price sold was back to the second auction’s price. Thus it was just 10% BMV. Remember yeah, auction property meant that you may not have seen the interior. Thus, 10% is really a borderline number if we look at it as a margin of safety… Well, happy buying and just remember that not all BMV properties are really BMV for us.

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4 reasons to rent a place to stay versus buying.

Is renting better than buying? Before we delve into property, let’s look at the world in general. Beyond just property, we already have clothes rental, car rental, venue rental and hey, these days, even partner rental during the festive seasons to stop the uncles and aunties from asking when will we have a partner… I could not accept the last one but if the latest generations could, well it’s then a valid ‘rental’ service. Anyway, let’s just focus on property for today yeah. Here are 4 serious reasons to rent a place to stay versus buying a property.

#1 – Really short-term basis.

If we are moving to a new place because of work and we think we may only stay for lesser than 12 months, it may make more time and money sense to rent versus buying a place. The reason is because just the viewing, comparing and even negotiating successfully would take us months, followed by the usual process of applying for a loan and going through land office will take many more months. This is just for the buying part. We have to repeat the process when we sell the place. In this case, rent lah. Makes much more time and money sense.

#2 – Save money every month for other productive purposes.

In the current market, when we buy a RM600,000 property, the mortgage payment per month should be closer to RM3,000. However, if we were to rent this same RM600,000 property today, then the rental may be just RM2,000 and that’s a lot of savings every month which we could get if we were to rent versus buying. The only note here would be how we utilise the savings yeah. These may be what we could start doing too.
Earning, Saving, Investing and Preserving?

#3 – If we are expert with other investment alternatives.

There are people who are extremely good with alternative investments. Stock market for example where these people are able to buy and sell for profits almost instantly by studying charts. I just spoke to a friend who told me that his stock investments trump his property investments by a mile. There are also those who specialises in commodities; for example gold or silver. They always knew the best timing to buy and sell. This is why they should not tie up their money into property. Just let it multiply faster, perhaps.

#4 – Dislike for properties.

In case anyone thinks I am joking, this was the view of a managerial staff of an MNC in Penang many years ago. “Property is not needed at all. Money is needed. Just think very carefully, how many of us could bring our property along when we say goodbye?”  His argument does makes sense yeah. Staying in a rented property and a purchased one gives the same comfort. Just remember that whatever we do, we are earning more than enough to hedge against inflation.

The below is one reason NOT to rent yeah.

Still unable to find that PERFEC
T property. Sorry yeah, for junior executives, that dream home you like will change when you reach the manager level and earning a higher salary. As for those who are already managers, there is no guarantee that you would not fall in love with a new DREAM home and you realised you could actually afford it. This is why there is no such thing as a perfect property. Find a property which meets most of your needs at this point in time plus a few years in the future, that’s all. Happy understanding and yes, I rented for the first 4 years of my working life too. Nothing wrong at all as I needed time to save for my downpayment.

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4 reasons to sell, if you really want to sell.

This article is aimed at sellers who are thinking of selling and has been trying for the past 6 months, with ever lower prices. The reason may be because the initial selling price was way too high. I understand too because I have sold homes before. “Is the price I am selling too low? I think it’s worth higher.”  Before we sell, we will ask around and today, it’s slightly better, we have lots of information to guide us, including
brickz.my
 If we look around and found out that the median transaction is around RM400,000 what is the price we should sell? I leave that to you for now but below are 4 reasons to sell faster, if you really want to sell.

#1 – TIME is money too. If the home was not tenanted and you are still paying for the monthly mortgage, a delay of 6 months would have been hundreds or even thousands of Ringgit depending on the price of your home. This is usually unseen because you may have been paying for the mortgage like forever…

#2 – OPPORTUNITY does not wait. When the market is slow, it meant that there are also other opportunities lying around for us. Without the $$ from selling our current property, we may miss out on that opportunity. Imagine if we suddenly know of a condo in an auction at below 40% market value and yet our home is not yet sold simply because of that RM20,000 price negotiation many months ago?

#3 – COST of inconvenience. Time should be put to good productive use. Assuming we engage 5 real estate negotiators (REN), then we will either have to open doors non-stop (better not). Imagine this continuing for the next 6 months? Or we have to give out many sets of keys. (keeping track?) A better way may be to give exclusivity to a REN and get him or her to co-broke with others instead.

#4 –  PRICE may get lower. Your advertisement is out in the market with photos of your whole home. Imagine what happens if the potential buyers kept seeing the same home again and again and with ever lower prices every month? Yes, it becomes a vicious cycle and negotiations will usually get harder with every passing month.

Selling a property is not that straightforward these days. Market is really slow and buyers really do have many more choices. For example, just go to any property site, enter RM400,000 and search and you will find properties from everywhere within the Klang Valley. Coupled with the availability of auction properties from distressed sellers or from the banks and we will understand that waiting is not the best game. It is best to quickly sell and start RE-Investing instead. That below-market-value property may be waiting for you too. Happy selling.

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written on 17 Dec 2018

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4 reasons why America likes Malaysia as a base in Asia

Actually, it’s pretty easy to choose these days if I am an American MNC looking for a base in Asia. If I am an American MNC and I wanted a good base for everything, I would choose Malaysia. Why not Indonesia? Yeah, there’s the ‘feel good’ factor of the new Indonesian President together with a much larger population and thus lower labour cost. However, do you have any HR friends who is hiring in Indonesia or even referred to some of the salary benchmarks for the executives and above? Take a look and then decide if the cost of labour is still low for these higher end workforce. The same thing, do for Thailand too. Many times, the cost of hiring a Country Manager in both countries can be higher than Malaysia simply because of the shortages of choice. I know, many would say this is temporary, soon, they will catch up and Malaysia will fall behind. No wish to debate for now. Just let it happen then.

What are the 4 key reasons stated for them to choose Malaysia as a base in Asia? (According to Deputy chief of mission of the US Embassy in Kuala Lumpur Edgard D. Kagan)

Legal and physical infrastructure – Yes, this is despite the fact that these days anyone mention anything good about Malaysia’s legal infrastructure meant 9,999 other people online would condemn that person. Physical infrastructure wise, even if you focus on the pool of water in KLIA 2 after a downpour etc, reality is we are still way better than many other potential Asian bases today.

Geographical location – Sorry, can’t argue with this. Especially since KLIA is now complemented by KLIA 2 as well. Look at the number of planes of Air Asia versus even Singapore Airlines. Then you would understand why it’s just a matter of time when KLIA and KLIA 2 exceeds Changi Airport.

Capability to undertake research and development (R&D) activities – Log on to JobStreet.com and take a look at the number of jobs available for Research and Development. If you are a Electrical or Electronics or Mechanical Engineering involved in R&D, I can safely say that your pay is definitely higher than those in the supporting functions. There’s even one US MNC which gives their R&D staffs additional 6 months bonus for every 2 years that they stay with the company!  Even my brother who’s working as an Engineer with a US MNC gets stock options which would make many people jealous….

Skilled workforce – We have been a manufacturing hub for longer than many other countries. This is definitely a plus point we have versus others, plus even if the English level is bad, going down and people say that these days education in Thailand and Indonesia is starting to put more emphasis in English etc, etc, etc, sorry yeah, Malaysia is still way ahead of many. Do not jumble thoughts with reality at this point in time.

Long time ago, maybe just 15  – 20 years ago, majority of all the workers in a typical manufacturing plant would be all operators. Today, when we look at the newer plants, we would notice that some plants have even more engineers than operators. This included even my wife’s former company. In fact technicians and operators are minority in their plant! Of course, with more higher end job opportunities, the pay can then be higher. Reason is simple. US$ is 3.3 times higher than Malaysia. Thus, even if they (American companies) were to pay extra 10-20% higher than local companies, they would be able to hire at a much lower cost compared to their home country, America. Once the pay goes higher, well, these engineer couples can then be able to afford an even bigger home which is the reason why these days, the property prices continue to go up. It does not just go up because of cost of materials. It went up because some couples felt that they can afford and thus are willing to pay higher. In the end, prices of course inch higher.

Oh yeah, what happens if these American MNCs closes their plants? Well, in any job at all today, there’s no such thing working till retirement. For that, everyone just have to plan ahead and be ready. There’s no guarantee that these foreign companies would continue to love the bases they love today. Every country is becoming ever more competitive today.

written on 11 Nov 2014

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4 things about personal finance we need to do nowadays.

When I was younger, everything seemed cheaper. The bowl of noodle at my school canteen? 20 sen. Add extra noodle? 30 sen. Haha. Okay, those were the days and only some of you will identify to that.  For the rest of us, a cup of kopi-O in the mamak is now RM1.50, right? This tells us that the value of money continued to go down and this is why the price which we pay will have to go up.
Fortunately, there are still some choices.

Let’s understand that if value of money kept going up, then there is also no need for us to keep asking for higher pay every year… There is also no need for us to keep saving more money and certainly we do not need to invest to earn more. We only need to preserve what we have and not lose them all at once, right? Here are the 4 things we have to do today.

#1 – Earning. Are we earning enough? If the current job is underpaying us, is it because we do not have the skills to ask for higher pay?  Why do we not have the skills? Why not we learn and become very good at something which the company needs? What’s stopping us? Maybe it’s not the company. Are we in the wrong industry? Sometimes, the wrong industry may just wreck havoc to our career plans yea.

For those who are in fixed salary group, there’s also that sales specialisation which will enable us to earn a lot more than fixed salary.  Are we prepared for it? Do we want to do it? How about doing extra work after your official work? GRAB perhaps? Burger stall, perhaps? Online retail store in Shopee, perhaps? Oh… you are not doing all these extra things because you are already tired?  Then, you can skip this article already. All the best to you.   It’s your life, yeah, not mine.

#2 – Saving. We can earn RM10,000 and we could still be in heavy debt. Or, we could earn RM3,500, rent a cheap place, give our parents RM700 per month, drive a reliable but old second-hand car and still have savings in the bank every month. Plus this person who has a just a salary of RM3,500 per month could also be owning TWO properties.  Yes, she is a friend of mine. The two properties are just the typical RM300,000 ones but she has TWO with a tenant covering her mortgage for one.

Oh yeah, not buying that latest and most premium smartphone every time they come up with the latest edition for just 3 years would have saved us easily RM12,000 or more. Crazy but true. Having nasi ekonomi versus sushi (or similar priced meals) will save us thousands every year too. Else, find a partner who will SAVE up all our money so that we could not spend it. My close friend, Mr. C’s wife SAVED all his and her earnings every month. I think Mr. C has a very good wife.

#3 – Investing. Note the word investing. It has nothing to do with speculating (super fast returns, super high risks for example). It has nothing to do with whatever get-rich-quick schemes in the market today. However, it can include buying a property and stretch ourselves to the limit BUT we rent out two of the bigger rooms and we stay in the smallest room. This meant we pay nearly nothing for rental and we have capital appreciation every year.

It can also include buying good stocks from the BURSA which we UNDERSTAND and keep them for dividends. Of course, before we start investing, always ensure we know what we are doing. That means studying, learning and implementing what we studied. It may also include spending time learning a new skill and doing videos and become a successful YouTuber. It could even be writing a blog where NOTHING happens for the first 2 years and today (after 7 years), it has been a profitable Sdn Bhd for the last 2 years…

#4 – Preserving. My dear friends, regardless of how much we have, an admission into the hospital for an appendicitis surgery with complications would easily cost RM15,000. (I know because I was hit with one before many years ago). It may be more in the future.

I know many of us are covered by the company’s insurance and medical coverage but could we guarantee that our company will be around forever?  Could we guarantee we will stay with the same company forever? No one would have any idea if the company shuts down suddenly yeah. Even if the company is already over a hundred years old…

Are we covered by insurance in case we lose our job and we could not continue paying our mortgages? Would our family have to sleep on the streets? Please stop thinking that it may not happen and we are just going to be paying for nothing. That’s why it’s called an insurance and the main reason to pay for it would be to preserve what we have accumulated. For many of these insurance, it’s best NOT to have to apply for it.

What is personal finance, really?
 I do hope that everyone is clear here that personal finance is not just about saving money and buying less stuffs or even going for holiday when the flight tickets are cheap. It is way beyond just saving money tips yeah. Personal finance is all about EARNING (as much as could) and then only followed by SAVING (as logically as possible) and must be complemented by INVESTING (due diligence and understanding is needed) and all these which we have accumulated must be protected by PRESERVING what we have.

Losing focus in anyone of these and the personal finance journey will become shallow after sometime. The world is moving way faster than yesteryears. We need to keep up. Working until we retire is no longer enough. Savings alone is no longer enough. Investing into just Fixed Deposit is definitely not enough anymore. Last but not least, whatever may go wrong may still go wrong, we need to try out best to protect it as much as we could.

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4 things to do before we lose our jobs.

Did you know that over 21,000 Malaysians lost their jobs in 2018? Plus, 50 percent of all these are from the Klang Valley? The four states where most people lost their jobs are Kuala Lumpur, Selangor, Penang and Johor. This was what our Human Resources Minister M. Kulasegaran said, “A significant number, 7,755 workers, who lost their jobs are those from the top three high paying jobs namely managers, professionals and technicians besides associate professionals that require diplomas and degrees for entry qualification. These three categories are limited and they also have to compete with fresh graduates.”
Full Article in worldofbuzz.com here.

Since our unemployment numbers remain low (by world standard yeah), the assumption is that most of these people should be able to get their next jobs easily. However, as someone having worked for the past 20 years of which nearly 70 percent was with Malaysia’s top job portal (from the time when it was not), let me share some tips on what we could do before we leave or were forced to leave our jobs.

#1 – Do More.  Seriously, take up more stuffs. When we are involved in many different projects with many different teams, it’s much harder to let us go and not affect anything in the company. Imagine someone who does only ONE role day in and day out and kept getting paid ever higher… If I want to cut cost, I will have to let him go and hire someone cheaper who could do more than one role…

#2 – Learn. We may be in sales, read about FB marketing.  We may be in marketing, read up about real estate.  We may be in real estate, take up Train the Trainer’s qualification! The world today is a competitive one. Relying on just one skill will make what we are doing today extremely risky. Bosses love people who knows more too and will usually treat them better too. (Nothing to do with being more handsome or attractive!)

#3 – Qualification/ Skill.  Get latest relevant certifications. It can via part-time study for an upgrade in degree. It could be enrichment courses and it could even be learning a new vocational skill every weekend. Actually, we will never know if these qualifications will be useful but if we suddenly need them, starting at the time will be very slow… (Did I get a promotion after my MBA? No. Was my MBA useful in many instances? Yes…)

#4 – Network is networth. Get to know people. Join NGOs, clubs and even Toastmasters. The time spent is not the same as time spent watching the TV or browsing Facebook. One makes you fat from inactivity while the other lets more people know you personally. When help is needed, do you help friends or strangers first? Perhaps a better job offer may come to us too!

I have changed jobs a few times, all are for career upgrades, not necessarily for more money at first. However, every time I start excelling in the new role, the money part takes care of itself. The world changes very fast these days. It’s impossible to change the world. It’s however much easier to get ready for those possible changes instead. This article is applicable even if you love your job a lot. To test ourselves, ask ourselves this question. “If I lose my job today, would I be able to get back a job I like within 30 days?” Hopefully the answer is a YES.

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written on 18 Dec 2018

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4 things to research before buying a property with ‘future potential.’

Too many choices they say when it comes to property. Well, then research before buying a property, please.

Every property looks so attractive. It seems that everything is complete. Some allows us to just move in with out suitcases! Some gives us back money too. Meanwhile every question to the sales person seems to be answered with valid answers too. Well, here are also 4 things we could research by ourselves prior to buying.

#1 –
MRT / LRT or whatever other public transportation with a T within 10 minutes away.
 Please do NOT ask the sales person for this 10-minute rule. Usually, 10-minute rule would mean a distance of around 5km. Please use google maps instead yeah. You could change the time to the peak hours in the morning too. Do take a look at images below.

This one is currently. Sunday afternoon at 6pm. Nice distance, just 13 minutes.

When we add in the day, the time. See the MAJOR difference?

Yeah, do ask if there’s the MRT transit buses for example and the frequency too. Not driving could actually save us hundreds of ringgit every month too.
It’s just RM100 per month for unlimited MRT rides. (click here to read)
 With this first point, it is easy to rent out too if we are not staying in the property ourselves.

Photo by Skitterphoto on
Pexels.com

#2 – Population.
Current population, if possible unless we have good holding power or if it’s for own stay. I have friends who bought in some places which are 45 minutes away from the city centre. One refused to move there and thus renting out the unit for lower than his instalment. Another is staying happily in her new home and using 2 hours daily for the to and fro driving.

Drive around the area we intend to buy, if it has all the usual amenities such as schools, hospitals, malls and McDonalds etc, chances are the population in the area is already sufficient to support the amenities. No malls are crazy enough to open when there’s no one staying around the area, right?  How many private hospitals we know where the number of patients were so few it is forced to shut down? 😛  If enough people stay around, it’s usually pretty okay to buy.

#3 – Representation of major developers in the area.
There are some developers who are able to build one whole township by themselves. It will take time yeah… It pays to ask the sales person this question. Besides you, who are the other developers around this area. What are they building currently? The empty pieces of land, are they owned by developers? If so, who are they?  If the sales person could not answer, get their manager. If their manager could not answer, get out of the sales gallery. 🙂  Sorry sales people, you need enough information for your buyers, else why are you earning commission from the sale?

#4 – Potential future developments?
New MRT station coming up under the MRT Line 2 (SSP) maybe? New expressway which is already halfway being built and should be completed within 12-24 months and the builder is a well-known name in the industry? A new private hospital being built and it’s being managed by names you have heard before? Say hospital brands under IHH healthcare Berhad? They own the Gleanagles and Pantai hospitals. Or hospitals under Ramsay Sime Darby? It does not mean the hospitals managed by them will all be doing great. It simply meant the chances that these hospitals will suddenly being abandoned will be much lower.

Okay, I guess these 4 should be enough to keep you busy in your research before buying any property with a much higher potential in future. As usual, there is no such thing as sure-profit-big-big with property investment. However, buying without anything beyond just the words from the sales people will be much more dangerous. All the best in your next property investment decision.

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4.4 times the median income, so it’s seriously unaffordable. Tomorrow?

Personally, I disagree with any loosening of lending standards. I think it is still possible to get a home loan approved today. I also think it is possible to get a home today but landed homes below RM300,000 in PJ is definitely impossible. Not even when the price is doubled to RM600,000. So, are borrowers still able to borrow from the banks?

Are banks in the lending mood?

According to Bank Negara Malaysia’s (BNM) data, the loan approvals for key cities are near 70 percent or higher. Here’s one recent article in
NST on “Here’s why Malaysians can’t afford a house”
 In fact, BNM says that the property industry should boost efforts to cut costs and accelerate supply. Boosting the number of people getting home loans without actually qualifying for it will come back to haunt us, so please do not even think about it. Yes, I am also talking about those who believe their salaries would be higher next year and thus they could stretch themselves to the limit for a ‘better’ home today. This may not work all the time. When it fails to work, bankruptcy follows.

According to Khazanah Research in a 2015 report, the median house price in Malaysia was 4.4 times the median annual household income. In other words, the housing market is “seriously unaffordable” compared to global standards. Before everyone thinks that Malaysia is the only country in the whole world in such a unique situation, well, here’s the top10, from the most expensive to the least expensive.
Hong Kong (18.1 times)
,
 Sydney (12.2 times), Vancouver (11.8 times), San Jose (9.6 times), Honolulu (9.4 times), Los Angeles, San Francisco, Bournemouth and Dorset (8.9 times).
Here’s that article in CNN.

Singapore’s at 5 times.
 (Yes, this is the truth even if they earn much more when converted to Ringgit).
London is at 14 times.
Based on ‘severely unaffordable’ score of 4.4 times, Kuala Lumpur has failed to make it into all these top 10 lists. Phew. Anyway,
 as per the NST article,
Kuala Lumpur is ranked eighth best in housing affordability out of 18 metropolitan regions around the globe. This is based on the Demographia study.

The NST article also quoted Paul Selvaraj, the secretary general of the Federation of Malaysian Consumers Associations as saying, “The focus should be on
building houses which people can afford,

not building expensive houses and then trying to push them, and then complaining that the banks are not giving loans. The reason people are having problems getting loans is because the houses are not affordable. It’s beyond their repayment” ability.” BNM also shared that this problem of insufficient housing is getting larger over time. There is currently a shortage of 960,000 units of affordable housing in Malaysia and this will increase to 1 million units by 2020.
Do read the full article here.

Please note that if Kuala Lumpur becomes more expensive in the near future, it means that we should buy at 4.4 times today instead of 8.8 times in future, whenever that may be. My mother told me that she and my father their first property in Teluk Intan; a huge semi-detached home for just RM50,000 the life was tough. we had fish to eat only twice per month.

Every cent counted then.
 I
 think even then, it was ‘severely unaffordable.’ Reason? There’s just not much choices and not many types or even 90 percent loans like today. It is not usual for salaries to rise faster than property prices, except for the top 10 percent performers in all companies. This tells us that developers would also have to change their strategy. Selling ever more expensive may not work once ‘severely unaffordable’ becomes ‘totally unaffordable.’ This is why sizes matter. This is why the acceptance of areas further away is increasing today. Happy reading.

written on 11 Oct 2017

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4 to a home versus 3 to a home, the significance?

I read an interesting article by
 Datuk Alan Tong in TheStar.
Do read for more understanding and knowledge about his latest thought about property market Malaysia. One significant point is that Malaysia still have 4 persons to a home today. I think based on how I look at our family relationships here in Malaysia, 4 to a household is true for a long time more. Based on a home of a recently graduated professional who is still working in his hometown, the household should still have 4 if not more. The parents and a few siblings. Based on the home of a couple with a new baby, the household would usually still have 4. The baby sitter, the kid and the couple. As for working adults who do not have kids and staying within the city centre, the home may still have 4 people. It’s possible to just rent out one or two rooms to lessen the mortgage payments significantly while turning that ‘liability’ into an asset.

This would however change in the future when the

fertility rate continues to fall.
 As for marriage, even if people are getting married ever later in their lives, I guess this is not the only reason for people to stay together under the same home. The current fertility rate for a woman (15-49 years old) is 2.0 This is an average number. It is true for my wife, as at today. 🙂  So, for our little family, it is 4 to a home. Generally a home in Malaysia even as at today is still big enough to accommodate 4 if not more people. Even the affordable homes from both the private and government sponsored ones are still above 800 sf today. I stayed with my wife, my brother-in-law and even my sister for many years in my 730 sq ft home in Penang. In the near future, perhaps it would get harder. I am talking about 20 years down the road when the new homes within the city is built ever smaller. Hopefully
not as small as those in Hong Kong.

Datuk Alan Tong mentioned that Australia has an average population of 2.6 per household and the UK is at 2.4 per household. I think this is already reflect that demographics change in Australia. Fertility rate of Australia as at 2015 is at 1.8 which is 10% lower than that of Malaysia today but it (fertility rate) has been below 2.0 since 1977.. 🙂  In 1977, I was born. If our current fertility rate stays the same, my guess is we may be looking at an average population of 3 per household only when we reach 2035, perhaps? That’s also
 when Malaysia turns into an ageing nation.

The United Nation is predicting that
Malaysia’s national fertility rate to drop to 1.91 by 2020.
In terms of just the Chinese population,
the fertility rate is already at 1.4
in 2015. My sister has a son and has said that perhaps he is enough for them (she and hubby). My wife has informed me that two is already a very GOOD number for her. Well…

A changing demographics would also change the future homes being built. There is really no need for 800 plus sq ft anymore if the home is just to accommodate 3 person or fewer. In fact with singles getting more common and couples getting married ever later, perhaps a SOHO or smaller is all we need? Truth is, with prices per sq ft getting ever higher year after year, the only hope for these younger population is to buy smaller. Or would future homes be built based on the changing household composition of Malaysia? Only time will tell but if we look to Hong Kong for some clues, well sizes go smaller, prices stay almost affordable.
Yes, perhaps staying further will be even more true in the near future.
By the way, in order for the population to grow, we need a fertility rate of 2.2, else we would need to take in lots of non-Malaysians like our neighbour or even Australia and many other advanced nations.

written on 11 Sept 2017

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40 minutes extra, RM50 billion lower. Alternative HSR plan. Viable?

Let’s be objective. The typical bullet train I have in mind should run above 300km per hour. I have only taken the Shinkansen extensively thus far. They run at around 320km per hour. Why do I say so?
These are the usual high-speed rails around the world for understanding.

Numbers are in miles so to convert to km, it’s just times 1.6 yeah. The slowest of these would be the one connecting Amsterdam, Brussels, Paris, and Cologne with multiple daily services called
Thalys. Read here for the full article please. Nice reading.

It’s speed is nearly 300km per hour. All these are existing services which meant that in the future, the top 10 list will surely change and the speed is unlikely to go lower yeah. The proposed operating speed for our very own HSR KL – SG was 320 km per hour. This meant that if the top 10 list does not change much, then it will squeeze itself into the top 10 list at No.9 jointly with Eurostar e320 and TGV. Speed is however not the deal-breaker yeah. Let’s look at the financial side and we must also maintain some objectivity in terms of purpose and benefits.

There’s an article in TheStar today: RM50bil cheaper alternative to KL-S’pore high speed rail.

The article says that financially, there’s the huge RM50 billion savings plus we do not need to pay a RM500 million cancellation fee. The way to do it is by upgrading the present infrastructure; utilising the existing double-track infrastructure of Keretapi Tanah Melayu (KTM). Sources say that the Council of Eminent Persons (CEP) has been briefed on this alternative plan. A very nice image by TheStar. ‘HSR vs upgrade of existing rail network. Percentage wise, this is 70 percent lower costs versus the current original plan. Other benefits include, “The upgrading of the existing railway tracks would involve minimal land acquisition, minimal disruption to existing system and complement the entire national railway network. The article quoted our PM, Tun Dr Mahathir who said that the distance between Malaysia and Singapore is short at only 350km and if the existing railway infrastructure is upgraded, it can improve travel time significantly. Estimated travel time is going to be an extra 40 minutes. (By the way, jams at the Causeway during holiday seasons are much longer than 40 minutes.)  There are other references on how the tracks would be upgraded.
Read TheStar article here.

Okay, so what do readers of kopiandproperty.com think? It does seem like a good alternative right? Personally, we need to think a little further than just a connection between KL and SG. This is rail. It’s not like a flight where it must be a significant point to point yeah. My next article will focus on a question many has asked me, what are the benefits to the cities / towns along the line? Not much benefits, right? Haha. Please read the next article yeah. As for now, I am excited to hear what would the CEP be telling us once they have finalised and decided about the HSR KL – SG. Oh yeah, this was what our OM said as reported by StraisTimes: “Malaysia’s Prime Minister Mahathir Mohamad has said the High-Speed Rail (HSR) link between Kuala Lumpur and Singapore is “postponed”, and not scrapped.”
Read the full article here.
 It’s very clear now. The decision is to find that best alternative to do it effectively and efficiently, not scrapping it altogether yeah. Happy believing. (Yes, that field trip with readers to enjoy a cup of coffee in SG taking the ‘HSR KL – SG’ is still on!)

written on 18 June 2018

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40 percent of debts owed by top 20 percent income group

When we earn more, we tend to spend more. This is true even for me until today. When I first started working, on the first few days I got my salary I would spend more. When it’s coming towards the end of the month and my remaining funds are low, it would lead to cheaper breakfasts, lunches and dinners. These days I no longer have that many out of the ordinary expenses. However, I still buy
new clothes during Chinese New Year.
 🙂  This is true for most Malaysians too. According to Bank Negara Malaysia (BNM), the largest share of debt or about 40 percent is owed by individuals in the top 20 income group. This group would be those earning over RM8,000 a month. Full article in
NST here.
  Assuming a couple who’s both in this category, they would have a household income of over RM16,000 per month. Regardless of the depreciation of Ringgit, they should be quite well off unless both are spending way too much.

Based on BNM’s 2016 Financial Stability and Payment Systems Report, the average debt level for borrowers in this group was more than double that observed for other borrower groups. However, it added that “The debt servicing capacity of this group is reasonably healthy as indicated by more prudent debt service ratios. Relative to other income segments, a large share of this debt is secured, with about 77 per cent of debt taken out for the purchase of properties and principal-guaranteed investments which contribute towards individuals’ wealth accumulation.” The more vulnerable group would be those in the bottom 40 income group, earning less than RM3,500 a month. This group accounted for 11.4 per cent of total debt. This is the group which is likely to face difficulty servicing their debt when faced with unforeseen circumstances. Over two-thirds of all debts were acquired by those living in major employment centres, namely Selangor, Johor, Kuala Lumpur and Penang. It added, “A significant portion of debt is for the purchase of residential property, followed by debt for vehicle purchases and personal use, corresponding to the need for greater mobility and higher expenditures associated with raising young families and urban lifestyle choices.”

Top importance – Let’s aspire towards being listed in the top 20 percent income bracket in Malaysia if we are not yet inside. Second importance – If we could not hit top importance, then save MORE than those who earn within the top 20 percent bracket because they may NOT be saving enough. Third importance – Regardless of what bracket we are in, only investment would carry us further than our salary alone.
Money should work for us and not the other way around.
 Fourth importance – When we overspend, no income can save us. Do note that investing and gambling (speculating) are two very different thing. Warren Buffett has this to say, “Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.” Happy learning.

written on 25 March 2017

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40 percent from EPF Account 2 for property?

Employees Provident Fund (EPF) savings is meant for retirees to have something to fall back upon after they retire. Of course, majority may not have enough when they do retire. Read here:
EPF alone is definitely not enough, BEWARE

That’s one reason why EPF allowed members to use

Account 2 to be used for property purchase. Property is an asset, most of the time unless the wrong one was bought. On a longer term basis, that property may appreciate so that one day when the retiree needs more money, they can sell it and use the proceeds for living expenses and perhaps rent a small room or move to smaller and cheaper towns. Yes, I hope
Ipoh is still affordable
 for me then.

Today, reported in an article in
NST
, Second Finance Minister Datuk Johari Abdul Ghani said that there is a possibility that first time homebuyers are allowed to tap into their Employee Provident Fund (EPF) savings to cover the financing. However, details needed to be worked out and discussions are ongoing. This was for the suggestion that funds in the EPF Account 2 be raised to 40 per cent from the current 30 per cent. He cautioned however, “There will not be a blanket increase. We’re looking at a specific percentage and how the EPF can allow part of the money to help top up instalment payments for first time homebuyers.”

I think the following must also be considered.
Is it really necessary
 because this additional 10 percent is not a huge amount unless the contributor has already contributed a LONG time and by then, the property prices may still be prohibitive. Secondly, how would this affect the available fund in the contributors’ account. As it stands today, the amount available is
not really sufficient f
or majority of all contributors. Third is whether EPF would also share some insights as to the type of property which the buyer can focus upon. The reason is simple. The returns from EPF is considered okay but if the buyer bought the wrong property, then he has just made sure his retirement becomes harder. Well, let’s wait for some of these questions to be answered then. I personally believe all buyers should buy based on what they could afford and manage their expectations too. Cheers.

written on 4 Oct 2016

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