Winners in Malaysia Property Award 2016 by Fiabci Malaysian Chapter

It was an honour for me to have been invited by my good friend Michael Geh to attend the 2016 Malaysia Property Award in One World Hotel recently. Here, I would like to share the Press Release by the organiser. Instead of just any property, how about buying an award winning property? Sometimes, for the same price, it definitely feels better when you introduce your property as an award winning one to your friends. 🙂  The below are the winners in the recent Malaysia Property Awards organised by Fiabci Malaysian Chapter.

KUALA LUMPUR – FIABCI Malaysian Chapter celebrated the 24
th
 anniversary of Malaysia Property Award
TM
 yesterday with 13 winners, including two individual awards, the Property Man, Tan Sri Dato’ Danny Tan Chee Sing, the Founder and Advisor of Tropicana Corporation Berhad, and Mr. Lee Liam Chye, the Group Chief Executive Officer of Perdana ParkCity Sdn Bhd

The awards presentation ceremony which was held at a gala dinner yesterday was graced by D.Y.M.M Sultan Ibrahim Ibni Almarhum Sultan Iskandar, Sultan of Johor.

13 awards were given at the Ceremony including two individual awards, they are:

Property Man – Tan Sri Dato’ Danny Tan Chee Sing,
Tropicana Corporation Bhd

Property CEO – Mr. Lee Liam Chye,
Perdana ParkCity Sdn Bhd

Environmental (Rehabilitation/Conservation) Category – Sungai Satu River Rehabilitation by
Selangor Dredging Berhad

Hotel Category – G Hotel, Kelawai
submitted by

Architect T.Y Au

Industrial Category – Hap Seng Star Mercedes-Benz Autohaus @ Balakong by
Hap Seng Land Sdn Bhd

Master Plan Category – Bandar Rimbayu by
IJM Land Bhd

Office Category – Menara LGB by
Bellworth Developments Sdn Bhd

Public Sector Category – Menara Kerja Raya 2 (KRR) by
Public Work Department Malaysia (JKR)

Purpose Built Category – Chengal House by
Paramount Corporation Berhad

Residential (High Rise) category – One Tanjung by
Province Valley Sdn Bhd

Residential (Mid Rise) category – By The Sea by
Selangor Dredging Berhad

Residential (Low Rise) category – Senibong Cove – Isola Villas by
Front Concept Sdn Bhd

Retail category – IOI City Mall by
IOI City Mall Sdn Bhd

FIABCI Malaysia President YM Tengku Dato’ Ab. Aziz Tengku Mahmud congratulated the winners and pointed out that the Award serves as a benchmark and driving force for developers to continue to develop more creative and innovative projects that benefit the entire industry. Ab. Aziz is pleased to observe that excellent development projects were already in the market and these projects have raised the bar among local property development that only led to one conclusion which is that local developers’ capabilities were greatly proven.

“One of the members of the Panel of Jury from overseas was so amazed by the creativity, technology and innovation of the participating projects, that he commented that Malaysian development projects are even greater than those in his own country!” added Ab. Aziz.

Meanwhile, on the other hand, Dr Yu Kee Su, the Secretary General of FIABCI Malaysia cum the Organising Chairman of the Award was proud that said the Organising Committee is entrusted with the task of upholding the premium standard of the evaluation process and judging criteria.

One of the efforts including adding a new assessment criteria that was approved this year, i.e safety and maintenance. It has become relevant, as according to Fire and Rescue Services Department, about 6,000 premises are destroyed by fire every year.

Without regular maintenance and property safety system in place, Dr Yu said, fire could happen even when all buildings were Uniform Building By-Laws compliant and granted Certificate of Completion and Compliance (CCC). Hence, he said, adding safety and maintenance into the judging criteria will increase the awareness on the importance of building safety and maintenance and, perhaps, encourage the authorities to make it a compulsory practice in future development projects.

Yu pointed out that the entire judging process of the Award was conducted in a professional manner whereby the Organising Committee had to abstain from the evaluation and judging process. “Evaluators appointed are senior management staff in real estate industry with vast experience while the Panel of Jury members and Independent Judges are not directly related to FIABCI Malaysia. This is to ensure a transparent and fair judging process. The final marks computated are verified by an Independent Auditor.” added Yu.

Ab. Aziz said that several Independent Judges have opined that the Malaysia Property Award
TM
 has contributed significantly to the growth of the Malaysian real estate industry as it sets a stringent and high judging standard which in turn serves as a benchmark for continuous improvement by local developers to achieve greater height in their future project development planning.

The push for excellence has spurred local property development to achieve a standard that is at par with international level. “The blueprint and judging criteria of Malaysia Property Award
TM
 is mirrored by FIABCI World Prix d’Excellence Awards at the international arena!’’ exclaimed Dr Yu.

He added that the high standard of Malaysian developers is evident when they succeeded to bag eight awards; four gold and four silver, at the FIABCI World Prix d’Excellence Awards 2016 which was held recently at Panama City, Panama on 25
th
 May 2016 which gives him a boost of confidence that local developers will do well with this year’s winning projects that are going to participate in the FIABCI World Prix d’Excellence Awards 2017, which will be held at Andorra La Vella, Andorra, in May 2017.

On the same note, Dr Yu urged all property developers irrespective of the sizes of their property developments, to take part in the Malaysia Property Award
TM
 and he reiterated that the award’s objective is to ‘Recognise Excellence in Real Estate Development’ and the judging criteria for participating projects is based on overall merits, not the sizes of the buildings.

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Fiabci Prix d’Excellence Awards 2016 – Malaysian winners

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FIABCI Malaysia: No property bubble bursting soon

These days, in my talks, people no longer ask me about the potential of property bubble bursting. Maybe they have forgotten a viral Whatsapp just a few months back about an imminent property bubble bursting. Maybe they are ow very confident with the new government? Anyway, every time anyone asked, I would point out to them that they should know better by just looking at a few key signs.
Here are those signs.
In brief, it is not likely currently. Okay, situations can suddenly change if some financial crisis happens in any of the advanced countries yeah.
This is one of that advanced country.
 As for the potential for property bubble bursting, let’s hear what FIABCI Malaysia has to say.

Article in TheStar here.
FIABCI Malaysia secretary-general Dr Yu Kee Su believes that while the property market will remain slow going into 2019, he is, however, optimistic that the sector will not result in a property bubble burst. He said, “Demand for homes will always be there. Banks continue lending to qualified home buyers. Developers are also continuing to introduce creative packages in helping home buyers and we’re not hearing of additional cooling measures.” In fact he shared that even though the property market seem sluggish currently, it is not as bad as it seems. Yu is also confident of the new government. He said, “We’re hopeful that the new government can and will do better. They should introduce policy changes in line with its election mandate and manifesto promises, for economy expansion to benefit people at large. The government ought to manage national wealth carefully so as to minimise additional risks to economy.”
Article in TheStar here.

Well, another prominent property expert has lent his weight on the notion of ‘no property bubble bursting soon.’ Remember yeah, if we are buying a home for our own stay and we absolutely loves it, property bubble may burst but we will still own our home as long as we keep our job. Even in the 2008 Subprime Mortgage crisis which was caused by all round GREED, many stakeholders took a huge ‘haircut’ and the market has recovered. Property bubble will burst when the affordability disappears from the market. Most developers today are already focusing on affordable units.
Article about Latest launches here.
The government is also focusing on ensuring the B40 is able to afford a home. All these are helping to keep the property bubble away. Happy understanding.

written on 27 Nov 2018

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FIABCI Premium Property Showcase 2014 @ Penang is here. It brings with it a wide selection of premium properties and property investments talks this weekend, 12th to 14th September. Developers participating include Ideal Property, Hunza Property, UEM Sunrise and Mah Sing. This may not be the best show if you are looking for affordable properties but for those who are looking for a more luxurious place to upgrade to, perhaps this may be you chance. As usual, whenever I go for any property fairs, I would always look at the list of speakers. The speakers this time include a good friend who always update and remind me on property statistics, the FIABCI vice-president Michael Geh and also someone I have known for a few years, the auctioneer Jeevan Muniandy.

Michael’s talk would be on ‘Penang Property Outlook’ at 2pm on Friday. Please do go and ask lots of questions. Other talks include: Investment Opportunity in Nusajaya, Johor, Mortgage Insurance, To buy or not to buy?, Properties, Numbers and You, Next Transformation of Singapore, How to successfully finance your house purchase, Why invest in property? and Will GST affect your property purchase?.

Speakers for the talks include mortgage insurance specialist Ms Elane Goh, numerologist Master Marinah, Head of Marketing of Far East Organisation, Singapore Mr Jacky Lim, Vice President (Finance & Investment) of MPI Mr Ronald Pua, CEO of Zerin Properties Mr Previndran Singhe, Director of Ho Chin Soon Research Ho Chin Soon and National Tax Director of TY Teoh International Mr Richard Oon amongst many other professionals. There will also be talks on Property hot spots in Penang and Malaysia, The Best Luxury Apartment in Perak and Property Investment: Legal Issue make easy on Sunday.

The talks would not be complete without the participation of the state government. As everyone knows, one key element for property market is the state government. On Saturday morning, Penang State EXCO for Housing and Town Planning YB Jagdeep Singh Deo will be talking on a very important subject: Private Public Partnership for Affordable Housing. With Penang’s ambition for
22,500 new units of affordable housing
 and the invitation to the private sector to work together, I think it will be interesting to see what’s the actual model which will be used.

FIABCI Premium Property Showcase 2014. 12 – 14 September 2014. 10am to 10pm at Gurney Paragon Mall.

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Fiabci Prix d’Excellence Awards 2016 – Malaysian winners

My good friend
Michael Geh
 forwarded one piece of good news for Malaysian developers in the world stage. It’s the 67th FIABCI World Congress which was attended by approximately 500 real estate industry leaders from 65 countries. It is held in Panama City, Panama this year. In fact this the first time this respected industry event has taken place in a Latin American country. It was reported in The Edge Property. In the Fiabci Prix d’Excellence Awards 2016, Malaysian projects took home four Gold and four Silver awards. This international property awards is organised by the International Real Estate Federation (Fiabci). These winners are all the
winners from Malaysia
 who are competing with all the winners across the globe.

The four Gold winners from Malaysia are as follows:

S P Setia Bhd’s Setia Corporate Headquarters in Setia Alam, Shah Alam in the Sustainable Development category

The Mansions super-linked homes in Desa ParkCity, Kuala Lumpur by Perdana ParkCity Sdn Bhd in the Residential (Low-rise) category

Selangor Dredging Bhd’s Dedaun, a luxury condominium in Ampang Hilir, Kuala Lumpur in the Residential (Mid-rise) category

Batu Batu Resort Sdn Bhd’s Batu Batu Resort located in Pulau Tengah, Johor, in the Resort category.

The four Silver Award recipients are as follows:

Senibong Cove in Johor by Front Concept Sdn Bhd in the Master Plan category.

UEM Sunrise Bhd’s 28 Mont’Kiara in the Residential (High-rise) category

Mammoth Empire’s Wolo Hotel located in Bukit Bintang, Kuala Lumpur in the Hotel category

Menara Shell by Malaysia Resources Corp Bhd in the Office category.

With these medals, Malaysia won 25 percent of the 16 Gold winners and 30 percent of the 14 Silver Awards. This is definitely a great performance for a country which is growing in stature as a global property destination. The Fiabci World Prix d’Excellence Awards 2016 is held in conjunction with the Fiabci 67th World Real Estate Congress from May 21 to 26. This is an event attended by real estate brokers, property and asset managers, developers, financiers and other real estate practitioners. Happy following.

written on 26 May 2016

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Lucky Draw – late 19th century Straits Chinese Nyonya Phoenix plate.

Message from MNP Auctioneers for the upcoming Straits Chinese Antique Auction in Lot 33, Penang.

Any Penang based kopiandproperty.com readers who want to win a plate with 100 years of historical significance? If you happen to be in Penang do drop by an exhibition of Straits Chinese Antiques happening in Lot 33, Penang. It is in conjunction with the 30th Baba Nyonya Convention in Penang, happening from 23rd to 26th November 2017.
An auction will happen on the 26th November 2017.

This is a LUCKY DRAW. There are also NO FEES to be paid in order to join the lucky draw and win.

Just sign up
 and be present on the day. The draw will be held on 26th November 2017.

Prize No.1 for Lucky Draw

Prize No 1 : ??????????

Straits Chinese Nyonya White Base Phoenix Plate

Late 19th Century, Width: 19.7cm

Maker’s Mark: Wang Sheng Su (????)

Estimated value : RM1,100

This is not the only item. If you did not get Prize No.1, you may still win the second one which in my opinion is pretty cool too! You get two items instead of one.

Prize No 2: ?????????????

Straits Chinese Nyonya White Base Phoenix Plate & Sauce Dish

Late 19th Century, Width : 14.6cm (plate) and 10.8cm (sauce dish),

Maker’s Mark: Xu Shun Chang (????) and Cheng Yi Tai (????)

Estimated value : RM700

All prize comes in wooden frame together with description

Here’s the form again.
 See you there.  2 winners will be selected and announced on 26th October.

For those who are thinking of bidding during the auction which is happening at 11am, just drop by earlier. Alternatively, do everything online.
It’s easy to register as a bidder.
Beyond just the antiques, Best2Bid is a platform for everyone to start their asset investment journey which is not just property.

— End of message —

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FINAL.  No accrual of interest for your Hire-Purchase. Read on to understand.

Full statement below.  Translated into English by me on the important announcement. Where there are discrepancies, the statement by the Finance Ministry is the official copy.

“An agreement has been reached with banking industry to ensure that the monthly instalment amount of the loan will remain the same for the borrower (whether conventional and Shariah) during the financing period.  This meant there are NO additional charges during the moratorium period.  Borrower may continue to pay the instalment as usual based on the terms of the agreement with their respective banks. This includes an additional 6 months for the entire financing schedule is they chose to take advantage of the moratorium.”

Full
Statement from the Ministry of Finance as below.

Media Statement by Finance Minister, Ministry of Finance

TIADA CAJ TAMBAHAN ATAS BAYARAN ANSURAN PERJANJIAN SEWA BELI (KONVENSIONAL DAN SHARIAH)

Merujuk kepada saranan Kerajaan kepada industri perbankan mengenai pelupusan caj tambahan ke atas ansuran bagi pinjaman sewa beli (konvensional dan Shariah), sukacita dimaklumkan bahawa Kementerian Kewangan telah mencapai kata sepakat dengan industri perbankan berhubung perkara ini.

Persetujuan dicapai untuk menetapkan bahawa jumlah ansuran bulanan pinjaman tidak akan berubah bagi peminjam sewa beli (konvensional dan Shariah) sepanjang tempoh pembiayaan tersebut.

Ini juga bermakna tiada sebarang caj tambahan akan dikenakan sewaktu tempoh moratorium (penangguhan).

Sehubungan itu, peminjam akan perlu menyambung pembayaran ansuran seperti biasa berdasarkan terma-terma perjanjian dengan bank masing-masing, termasuk tambahan 6 bulan bagi keseluruhan jadual pembiayaan jika memilih untuk memanfaatkan moratorium tersebut
. Maklumat lanjut boleh didapati daripada bank masing-masing. Kerajaan berharap keputusan ini akan dapat meringankan beban rakyat dalam tempoh yang mencabar ini.

YB Tengku Dato’ Sri Zafrul Tengku Abdul Aziz
Menteri Kewangan
Putrajaya
6 Mei 2020

— end of media statement by Finance Ministry —

Okay, enough of the furore over the interest accrual. The Finance Minister has spoken and I think this should be the final statement already.  Now would be how the banks will carry this out smoothly without a lot of issues. Okay, this may reduce some of the profits for the banks but let’s understand that it is also in the interest of the bank that their borrowers remain good borrowers after the moratorium too.

No point in insisting on winning but in the end if the borrowers go into a default, everyone loses. Of course, if you ask me, this interest accrual should not cause the borrower to default.  I think it may be the full amount that will cause that damage if they are jobless for example. Be happy and well, if you should choose to take up this moratorium offer,
please do what your banks tell you yeah.  Earlier article here.

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Guys ah,moratorium does not delay the desperate sellers, ok?

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Finance Minister says not too much for 10% discount from SST exemption

Time to rejoice for potential homeowners says an article in TheStar.
 Our Finance Minister Lim Guan Eng said, “We placed the exemption because we want to boost the real estate sector. We hope to see a fall in new house prices. Otherwise, we will consider re-imposing the SST (on developers).” He was speaking to reporters at the Parliament today. SST was exempted for construction services and building material costs. He added, “For existing units that have been built, you will have to wait until Budget Day this Friday (Nov 2).” (Readers of kopiandproperty.com, please remember this sentence yeah. There should be goodies for the unsold units… maybe anyway)

Lim thanked REHDA for their support to the government initiative. He said, “I wish that it would be a 10% discount, but we will give Rehda time to work towards achieving that goal. He added, “People asked me if I’m asking too much for a 10% discount with the six percent tax exemption. I said ‘no’, we are very reasonable because we are talking about waiving all construction services, including industrial, residential and commercial. So, to developers who will benefit from the tax exemption, please pass it on to home owners.” Earlier article
quoting Rehda president Datuk Soam Heng Choon here.

As for the article in
TheStar, click here.

Since our Finance Minister has sort of revealed that something will be revealed for the existing units, we should be glued to the television during his announcement. Do buy the newspaper on Saturday because there will be lots of analysis too. As for my Budget 2019 wish list, let’s just say I wish for clarity in the direction the new government wishes to go and for all the ministers to work extremely hard towards what was planned. For our ministry of Housing and Local Government, I offer my assistance too if they need some ideas direct from the ground; working class Malaysian. Happy listening and waiting.

written on 30 Oct 2018

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Finance Minister suggestion to BNM and the banks.

There was a huge issue these two days. It seems that the Hire Purchase moratorium does not include the exclusion of interest. Many have been sending the message that it should be waived and pointed that it was earlier communicated as such. This is the earlier article:
If you need the moratorium, do what your bank says
 Since I have received the message from my bank as well as BNM’s earlier clarification, now we have the words from Finance Minister Tengku Datuk Seri Zafrul Aziz.

Article in thestar.com.my
  This is what our Finance Minister Tengku Datuk Seri Zafrul Aziz is suggesting to Bank Negara and the banks with regards to the accrual of interest or profit imposed by financial instituions on hire purchase during the 6-month moratorium period. He said, “Considering that there is a possibility that this can be implemented and after listening to the people’s demand, I would like to recommend that all financial institutions, especially those that are involved in offering the moratorium to consider waiving the accrued interest (for hire purchase loans) or profit (for fixed-rate Islamic financing loans) during the six-month moratorium.”

While the issue is under Bank Negara, Tengku Zafrul said, “We, at the ministry, are ready to collaborate with Bank Negara and the banking sector to ensure the implementation of the proposal. The government is sensitive to the voice of the people, especially those from the B40 and M40 groups. I hope that this view can be considered by Bank Negara and the financial institutions in the country.”  Do read the full article in
Article in thestar.com.my

I do hope we have this cleared soon.  However, let’s also understand that when banks lose the interest which they should be collecting, it will reduce their profit numbers. Their shareholders would actually be on the losing end yeah. Do not believe me? Look at what happened to the banks’ stock price when it was revealed that they may be suffering losses due to a defaulting Singaporean listed entity just a week ago?  As for what’s right? Well, it was supposed to be paid yeah. Anyway, let’s just wait for the conclusion which I think will need to wait till Monday. This article will be up in Sunday and no one’s working on Sunday, I think?

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Finance Ministry: FundMyHome NOT a monopoly

I have been speaking to a number of property people in the industry. The question most of us have is when will there be other FundMyHome kind of initiatives by other companies. Currently we have just one which was officially launched by Finance Minister Lim Guan Eng two days after he gave his first Budget speech; Budget 2019. If it’s going to be something that will help the home buyers to own their first home, of course the more of these the merrier and the better it will be. A monopoly is never a good idea regardless of the country, especially in the new Malaysia of today. Well, we have our answers today.

Article in FreeMalaysiaToday.com.

Finance Minister’s political secretary Tony Pua said that the
peer-to-peer crowdfunding platform, FundMyHome is NOT a monopoly. He said, that Securities Commission (SC) will regulate the initiative as more exchange platforms will come in. He also shared that
the main aspect of the scheme is to protect both house buyers and investors. After the rules are finalised in the first quarter of 2019, then the first exchange can take place. He however said that there were risks such as the initiative contributing to a property bubble but this was being looked into.

He shared that the reason behind the speedy launch of the FundMyHome scheme, operated by EdgeProp Sdn Bhd, was because the company was the one that had come up with the idea. He said, “They (EdgeProp) were the ones who came up with the idea. Let’s not deny it. They came up with the innovation and they launched it because they wanted to publicise the mechanism.” Pua added that the platform would transform the entire lanscape of Malaysia if it worked. He said, “It’s a very innovative idea. Does it work? Is it 100% workable? I think it’s 95% workable as there’s still 5% risk there. So should we be conservative or do we try and do a pilot project? We get the SC to come up with the guidelines, protect the buyers, protect the investors and see how it goes.” Here’s that article in
FreeMalaysiaToday.com for reference.

Since the Finance Ministry has already explained, I think we can be assured that there will be many more choices from other companies and it need not be just the only one which has been launched currently. Currently, it will definitely be good for the Securities Commission to look through all the aspects of the P2P financing. Courtesy reminder, the risk assessment must not be confined to just the 20% owner but should also be seen in the context of the whole market. As much as I would welcome any new measure which help potential buyers own their first home, I would not want a property market full of buyers who were those who could not qualify for a loan in the first place. That should not be the aim of this P2P scheme anyway. Happy waiting for the SC’s full set of guidelines.

written on 10 Nov 2018

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Finance News: Moody’s has downgraded outlook on the US banking system

Financial Crisis is always a possibility

I felt first hand the ASEAN financial crisis in 1997 / 98. The exchange rate of Ringgit to UK Pound went to as high as 1 Pound to RM8 at one point. Today, the exchange rate is 1 Pound to RM5.44 Please refer to the image from google as below:

Malaysia’s Bank Negara Malaysia took one important step in my opinion. It forced the merger of the huge number of banks for a small country like Malaysia into just 10 banking groups. This ensured that the attention and help could now be focused on specific groups versus every individual banks. Moody’s said this about the Malaysian banking industry less than 2 weeks ago:

“Moody’s Investors Service said Malaysia’s banking system outlook remained stable underpinned by strong economic growth and robust credit metrics across the system.

“While weakening exports will weigh on Malaysia’s economic growth, strong domestic demand will support it as the country’s labour conditions improve and inflation will remain lower than regional peers.

“Banks’ ample loan-loss buffers and the ongoing forbearance measures will mitigate asset risks from weak borrowers,” it said.”
Source:

themalaysianreserve.com

There was however a big news recently about the failure of a big bank in the United States. Do read about it below:

News in nst.com.my
   Moody’s Investors Service said that has downgraded its outlook on the US banking system from stable to negative after the collapse of one of the 20 largest lenders in the United States that analysts say could create a contagion.

In a report, it said, “We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank and, Signature Bank (SNY) and the failures of SVB and SNY.”

SVB is the largest US lender to fail since Washington Mutual collapsed in 2008 at the height of that year’s financial crisis. Investors at the California-based bank withheld US$42 billion in deposits last week, triggering a 60 per cent plunge in its share prices.

SVB provided financing for almost half of US venture-backed technology and healthcare companies. At the end of 2022, the bank said it had US$151.5 billion in uninsured deposits, US$137.6 billion of which was held by US depositors. Its total assets were US$209 billion as of the end of 2022. Do read the full article here:
News in nst.com.my

Funds in the bank – are they protected?

In Malaysia, under the Financial Sector Masterplan, Perbadanan Insurans Deposit Malaysia (PIDM) was established in 2005 to protect the savings of bank depositors via its Deposit Insurance System (DIS). This mechanism ensures that the savings of depositors and benefits of takaful certificate and insurance policy owners are intact in a failure of any PIDM member bank or insurer. As a result, financial consumers can remain assured and confident in the Malaysian financial system during good and bad times.

PIDM protects up to RM250,000 per depositor per member bank. There is separate protection for conventional and Islamic deposits held by individuals, joint owners, sole proprietorships, trustees, partnerships and companies. PIDM deposit coverage protects 96% of depositors in full.
Do read about PIDM here.

Source: pidm.gov.my

I wish that there are no global financial crisis in the future

Central banks all over the world have taken many steps to ensure historical kind of financial crisis does not recur. I do believe this is sufficient check and balance to guard against most of the typical type of financial crisis. We just need to hope that the people in these central banks continue to have the foresightt quickly take appropriate actions and protect all of us, the depositors who would lose everything we own should the bank we kept money in goes under and we were the last to know.

I hope my wish will come true and we will never have another 1997 / 98 kind of financial crisis anymore. Not even that 2008 mortgage crisis which started because of pure greed of the banks.

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Mr-Stingy’s ‘interview’ of 16 experts and 1 blogger (me!) for financial advice in 2018

A few weeks back, a prolific blogger, writer and good friend asked me for some property advice for 2018 to be shared with his readers. His articles have appeared in The Huffington Post which is like SUPER WOW for me. Oh yeah, his name is Aaron. 🙂  Here’s what I have to say for 2018. All in all, he featured 17 people for 2018.
In 2017, he featured 14.
 The below comments from me are extracted from his site.
Mr-Stingy.com

— start —

PROPERTY MARKET

5. CHARLES TAN, FOUNDER OF KOPIANDPROPERTY.COM

(Charles is a Malaysian property expert who writes at the beautiful
kopiandproperty.com
. He’s also the COO of an asset auction company (“pays the bills” he says…)

In 2018, start focusing on “Why” instead of “Where” all the time. The underlying reasons to buy are always different for everyone; and it does not have to be those same few spots which are already priced at a premium. Unless for example, you absolutely must stay next to your in-laws.

Focusing on WHY allows for better investment decisions, potentially cheaper property prices, as well as a better ROI — because you would usually start lower. It is not risky to buy or not to buy — it is far riskier to buy the wrong property in 2018.

— end —

There are also a few other advice that I personally like and I extracted them as below as well.  Do enjoy and visit his site for ever more money related articles. Trust me, we learn more than just finance related stuffs in his site. We learn how to write eloquently too.  Cheers.

Mr. Lee Ching Wei, CEO of
iMoney
 -“Stay diversified (by asset class and currency), and avoid any short-term / speculative investments.”
 (Comments by me:  VERY TRUE! Come on, we have built everything up over a long time, perhaps we should protect what we have too. Regardless of how much we love a certain type of investment,
always seek to diversify.

We may not earn the most when some certain investment shoots through the ceiling but at the same time, our losses are usually not going to be fatal too… )

Mr.KC Lau, Founder of
kclau.com
 – Make more, Save more and Invest for LONG TERM.
(Comments by me:  VERY TRUE! Without a higher earning, it’s going to be
hard to save more and invest more.
 Think about it.  Perhaps writing a blog may earn you more extra income? Not immediately lah, 2 years later perhaps)

Divvy, founder of
dividendmagic.com.my
 – Remember compound interest — it will be the difference between you having a couple of million or a few hundred thousand in your account in 30 years.
(Comments by me: Forget spending RM100 per month for years and it’s not such a
big thing but 30 years later?

WOW….)

Dawn, founder of
SG Budget Babe
 – There’s no knowing where the future will take us. Hedge against the unknown by investing in yourself, building up knowledge, and forming good financial habits that will serve you well on this journey of life.
(Comments by me:  Read and Learn. Do not believe everything because most of the time, these experts may also have some bias. Their situation may not be applicable to us too.

Financial awareness is of course a must!
 )

Suraya Zainudin – Founder of
ringgitohringgit.com
 – I also want to urge everyone to have multiple passive income streams. Right now Google Adsense and various affiliates give me ~RM 1K more or less per month.
(Comments:  See, RM1,000 per month extra. Go read about Goodle Adsense and how to earn it. One way is to start writing….. online. )

CJ Ong, columnist for The Edge Malaysia weekly – Be wary. Most investors suffer from recency bias, a behavioral phenomenon where we expect investments that have done well, to continue to do well.
(Comments by me: Remember, many times when we start to know about something, it might be because the
 whole world already knows about it.
 Think a bit before jumping in.)

next suggested article:

Communication skills, world happenings, learning and personal finance

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Households Malaysia: Financial assets up RM97.9bil vs RM70.4bil up in debt

First, let’s talk about potentially a bad news. Malaysia’s household debt-to-gross domestic product (GDP) ratio increased to 89.1% in 2015. It was 87.9 percent as at end 2014. Read here:
Household Debt Malaysia? Better

In other words, the household debts in total is actually worsening. Want to know what some other countries are doing? Well, take a look at the chart beside. Malaysia really is the highest among all the ASIAN countries listed. The full article accompanying the chart is here:
cityam.com – debt-map
  Well, before everyone start withdrawing their money and keep them under the pillow, do note that Bank Negara Malaysia said that the ability of the households to service the debt remains sound. It added, “This continued to be supported by a broadly stable domestic employment and income outlook.” Economy? Read here:
Malaysia in recession? Not in 2015

If we look at that few countries that Malaysians love to buy properties in, I think the picture is a whole lot clearer that if we are to keep our money under our pillows, there are also other countries which are in similar predicament. Among them, the UK, Australia and closer to ASIA, it’s South Korea. Let’s just hope none of these countries spark anything serious because any ‘fire’ starts, it will spread quickly. Just as positive sentiment quickly pushes up transactions and prices, a sudden overflow of negative news would create lots of fear and frantic selling may start. Perhaps not stretching too much is a better strategy for now? Read here:
Stay strong. Shed the depreciating debts

For households with incomes of less than RM3,000 a month, their share of borrowings continue to drop from 28.4 percent in 2013 to 24.3 percent in 2014 and 23.6 percent in 2015. Whether this is good or not would depend really on whether it’s because they save more or actually spent more due to rising living costs, thus have less need to borrow in order to purchase a home, for example.  The household balance sheets remained healthy as financial assets grew faster than debt in 2015.

A positive sign would be the rising household wealth which is estimated at an annual growth rate of over 11 percent over the past five years as more households bought properties for many reasons including to help finance children’s education, provide some financial security for the next generation and prepare for retirement, including medical costs. Household assets-to-debts ratio remained above two times which meant that we are at a strong position currently to withstand sudden shocks. Bank Negara said that the banks have sound underwriting standards and risk management. I think this also meant that loan rejections are high. Read here:
Jan 2016: Whopping 62 percent loan rejection

Last but not least, over 80,000 people, half of which earned less than RM3,000 a month went for counselling from The Credit Counselling and Debt Management Agency. Let’s note that overspending is the worst case scenario when the living costs are rising. Opting for cheaper options are always better than to buy first and regret later.
Overspending to enhance image is very Sxxxxd.

Oh yeah, where bankruptcy is concerned, it’s very clear that property may not be the main cause. In fact, it may help one from spending on unnecessary too. Read here:

Bankruptcy before property, not after property perhaps

  Happy following.

written on 24 Mar 2016

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Yes, it’s definitely safe for a very long time yet

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My personal finance and discipline, during those early years

First of all, I am still not as disciplined with my finances as my good friend, Suraya. She knows in full details of the 4Ws and 1H of her monthly spendings. This helps a lot in reducing the unnecessary. Want to learn from her? Here’s her insightful blog.
 www.ringgitohringgit.com

However, I can safely say that from that day that I started working which was way back in July 1998, I have never asked for money from my parents. Not even that few times when I REALLY ran out of money and was barely scraping through with lesser than RM50 with a week more before salary day. I dare not imagine what would have happened if the salary was delayed! Haha. What did I eat during those days? For lunch, I had no choice but to eat at ‘restoran’ with my colleagues. For dinners, it was really just Gardenia bread plus margarine and kaya. (Yes, still a luxury and still tasty!)  Occasionally, it’s nasi lemak biasa tambah nasi and lots of kuah sambal ikan bilis. I also did not drive back to Ipoh because the toll itself would have ‘killed’ me.

Moving back slightly further, when I was still in college and I needed money to keep in touch with my girlfriend in Ipoh. I must call her right. At that time, phone bills were exorbitant because there were no WhatsApp or even MIRC ( if you know what this is. 😛 ). Phone bills typically come to a few hundred per month. You see, there were so much to chat about then because there were no Facebook or Google. Haha. I do not have unlimited allowance. Thus,

I worked part-time. TWO JOBS!

One, as a student helper in the college. That one would happen during weekdays, after my classes. I also do one more during the weekends. As a promoter for a brand called Body Master. When I left, my supervisor gave me two T-shirts for free! Haha. Yes, two jobs to make sure I have enough money to pay for my phone bills as well as those birthday gifts, valentine’s day’s gifts etc. Not easy but I have to just do it. (My girl friend then is NOT my current wife. Shhh….)

After I started working, I knew that my parents sacrificed a lot for my studies. I was the ONLY one who went overseas. My brother got into an Engineering matriculation programme (local Uni) and my sister completed her IT Degree within Malaysia. (UK University) I gave my parents allowance monthly, from then till today. 1998 until 2017. Yes, this is also a discipline and it helped tremendously because I already know that if I have those extra $$$ every month, it will go into new gadgets and whatever ‘useless’ stuffs I could think of. After a few years’ of working
,
 I ‘forced’ myself to save.

Whether those LEGITIMATE savings plans or unit trusts, I forget all these funds and just let it run. This made me even more ‘poorer’ every month. This was then followed by some investments into stocks and then every few years, a property. My most expensive watch ever? A Tissot. The watch I am wearing currently? An Alba because the Tissot needs a new battery which I have yet to change.

When I look back, I think my parents influenced me a lot. Plus the fact that I am from Gen-X helped a bit too. Hopefully, I can also teach my kids to have
 some personal finance discipline
too. I will save enough for their education and that’s about it. I think my wife and I deserve more holidays as I am working so hard everyday and she is ‘going crazy’ looking after both of them everyday. Haha. if you are also a Gen-X like me, do share. I think the world may be a safer place (no financial crisis) if there are more of us around. Okay, okay, plus also those fast learning super Gen-Ys too. Personal finance is thus knowledge plus lots of discipline to stay the course because money does not fall down from the sky. Stay away when something gives us returns which are way too high and way too fast. After 19 years in the working world, I can safely tell you that it is NOT REAL. Happy investing.

written on 7 May 2017

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Why did I fear property investment, then?

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Financial Freedom to Owning a Home

Press Release from IOI Properties.

In response to the government’s efforts to stimulate the residential property sector, IOI Properties Group has unveiled a host of home ownership incentives under an unprecedented
 IOI F.R.E.E. Ownership campaign.

Announced by Finance Minister YB Lim Guan Eng in January 2019, under the government’s Home Ownership Campaign (HOC), buyers are exempted from paying stamp duty on the transfer of property priced up to RM1 million and stamp duty on the loan documents for properties priced up to RM2.5 million.

Taking advantage of this, the “IOI F.R.E.E. Ownership campaign takes things one step further for greater savings. Encapsulating the program’s benefits, the name ‘IOI F.R.E.E.’ is an abbreviation for Flexible financing options, Rebates, Extra rebates and Exemptions on stamp duties. The best time is now to own your dream home!

Flexible Financing: IOI Pay Later Buy Now
helps prospective homeowners move forward with the next phase of their lives. Eligible prospects will enjoy a low down payment and an extended period of 5 years to settle their differential sum payments, free of interest! With the flexibility afforded under this program, homebuyers will get extra cash in hand, and would be able to go ahead with their other plans, such as marriage, investment or renovating and decorating their new home during the 5 year deferment period!

Need more cash? There’s more! Free up some cash and reduce your monthly instalment payment by opting to service only the loan interest (without the repayment of principal loan sum) for the first 5 years of the loan tenure. IOI Rent To Own as the name suggests, allows homebuyers to stay in a home of their choice now and own it later, and it also comes with a rental refund of up to 100% that goes towards offsetting the property purchase price.

This campaign is specially tailored to give homebuyers a head start in owning their home. Homebuyers are presented with plenty of time to beef up their loan eligibility, save up for a down payment or even try out the development before committing.

Rebates: This is the time for rebates and more rebates. For a start, homebuyers can enjoy a minimum of 10% discount. On top of that, IOI Properties has lined up a host of additional rebates for a host of award-winning developments just for this ‘IOI F.R.E.E Ownership’ campaign period. What’s more, IOI LIVO members get to enjoy a further discount on top of the additional rebates! Exemptions:

In addition to the government’s waiver of stamp duties for both MOT & loan documents, IOI Properties is covering all SPA & loan legal fees. Collectively, the extra cash in hand, discounts, rebates and free legal fees add up to a hefty and neat savings for homebuyers.

Encouraging homebuyers to move fast, IOI Properties Chief Sales and Marketing Officer Jason Tie said “The best time is now. There is no better time to buy a property! It has been announced that the stamp duty exemptions are applicable to all buyers and not just for first time homebuyers. Homebuyers should act now before 30th June 2019 to enjoy all the incredible savings.”

Visit
www.ioiproperties.com.my/free
 for more information on the IOI F.R.E.E. Ownership campaign.

— end of press release —

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IOI Properties’ net profits up 120.5%

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Financial Freedom vs Financial Independence

A relative whom I met recently told me that he will be finishing paying for his condominium in KL very soon, maybe in just one or two more years. He has bought the condo just over 7 years ago. This meant that instead of the typical repayment period of 25-35 years, he would have finished paying for it within 10 years. He should be 35 this year. I asked him, what’s his reason for paying so much and so fast. He said he wants to achieve financial freedom. When asked if he has another property, he said no because he wants to be debt free first before saving up to buy another one. He drives a RM130,000 SUV which he is still paying for. I think a lot of relatives would see him as very successful. Without doubt, I also believe he is successful as he already has his own plan to achieve financial freedom.

Around 7-8 years ago, I told a young friend this story. You can choose to buy one property, pay for it as fast as you can so that you would be debt free as soon as you can or you can buy one, pay for it slowly, leverage on mortgage loan while you save and within five years, buy a second property, rent it out and within another five years, buy the third property and rent it out. After 15 years, you may still be paying for your first property, 2nd property and 3rd property but by the time you are 50 years old, you would have no less than 3 properties, all of which has doubled in value. You have used the rental to leverage on your wealth creation. It means you are three times faster than if you have just one property. In fact, by then, if you sell off two of your properties you should have more than enough to live until the day you say goodbye to this world. This young friend of mine who is now a manager and around 30 years old has two properties and is looking for his third. Both his properties were rented out. I have little doubt that he would exceed my expectations easily.

I am not advocating everyone to follow this young friend. There is nothing wrong to be debt free. However, do read about the concept of good debts by a lot of financial consultants and you would understand that financial independence may be a goal which is actually better than just financial freedom. Financial freedom means you owe no one anything. You can retire happily when you reach 56. Financial independence, depending on when you achieve it means you can retire anytime you want without the worry of losing your job.

Let us be reminded, there’s no difference between staying in a property worth RM700,000 versus RM700,000 under your bed apart from the fact that the property can continue to appreciate but you are not leveraging on it. The most from the savings you can get from a fully paid property is the rental at the market rate at that time.

Do read more about financial freedom versus financial independence online.

written on 30 Jan 2014

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Property Buying – Objectivity matters

Alternatively do read more about ‘
Personal Finance
‘

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That billionaire status is not a realistic goal lah. What is our financial goal, really?

What is our financial goal, really?

Long time ago, millionaires were the focus of many. Everyone would look at becoming a millionaire. These days, depending on the currency you are earning (means in some foreign country), you may already be a millionaire in Malaysia if you exchanged all your savings for the last few years of working and saving back into RM. Thus, these days, many start to say that the focus should be how to become a billionaire instead. Actually, it’s great to have great goals BUT perhaps some milestones would be good.

How do I complete marathons?

I have completed two full marathons and many half marathons thus far. In every race, I barely hit the qualifying time to get the completion medal and T-shirt. Truth is, in every race, my goal is to complete the race ON TIME and it’s never to keep up with even the top 50% of all runners. This is the same principle I apply in the property investment world. There are already those who are very successful, probably owning 50 properties or more? Those are not my target and I have no urge to rush and join them or even thinking that some day I could become one of them. One word for me? Impossible.

Photo by Pixabay on
Pexels.com

Is one property after another so bad then?

Stay focused. Save enough for that first property.
(I did this was back in 2002)
 Stay in there for a few years, rent out one or two rooms if desired for extra financial support to your monthly mortgage. After doing this for many years you would realize you have enough money for an upgrade, better and bigger home.
(I managed to do this in 2007)

Sell the first property for your capital appreciation or continue renting this one out for continuous rental income. Both ways work just fine. You have now two properties. Else, for the next upgrade which is the 3rd property, maybe we could sell the second property if the second property has appreciated more than the 1st property?
(I sold my second property in 2012)
. By selling, we get capital for us to continue our property investment journey too.

There’s NO need to achieve anything close to 50

If you are 30 or older and is in the corporate world as a professional, it’s too late and very impossible to achieve that 50 property goal by 65 years old but it’s possible to aim at having 4 properties which are fully paid. Example?

30 years old – 1st property (probably this is that property which you rented out fully furnished since you upgraded)

37 years old – 2nd property (probably this is your upgrade home)

44 years old – 3rd property (probably bought this with huge downpayment from your capital gains in 1st or second property)

50 years old – 4th property (small unitlah… you do not need so big anymore… go travel when you reach 60 and perhaps rent it out via short-term rental when you are travelling!)

Please do note that the above is a SUPER SIMPLE example which may or may not happen but numerically, it’s way more possible versus trying to become a billionaire and that involves taking super high risks. If that’s your aim; a billionaire then please do skip this article. It’s too slow for you.

What happens at the end, when you stop working?

By the end of the mortgage which is 30 years later, probably all these properties have just appreciated following the inflation rate. So, you did not gain too much but suffice to say, probability of it being RM500,000 per unit on average is definitely there. Yea, 30 years later is 2051. By then the value of RM500,000 would be way lower than RM500,000 today. So, the question is, if you do not buy a property, you think you can save RM500,000 in cash by then? If the answer is yes, then by all means go ahead. Do not bother about property.

Is property the only way?

Answer is a firm NO. We could also save via FD… we could also save via Unit Trust… we could also buy stocks and wait for dividends and there are a lot more other types of investments too. Property is just one of it. The best question is this, ‘Have we started on ANYTHING at all?’ If the answer is not yet, then property can always be a good forced start. If we do enough study, it will not be a FALSE start.

Happy understanding that becoming that billionaire is not the goal for most of us. Perhaps that journey towards 4 properties could be a better journey? It is a choice you would have to make. Happy investing.

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Financial Health: Are we healthy? How do we measure it?

There are many ways to measure our financial health. Here are just 5 ways to measure it. Perhaps some of us are already way above all the measurements. That’s good news. Just remember that EPF is extra savings. It should not be the only or we will definitely not be financially healthy.

#1 Emergency Funds Availability

How many months of emergency fund do we have currently? Before the Covid-19 pandemic arrived, the typical yardstick is 6 months. I think more financial consultants would now say it’s 12 months instead. A good friend who’s already a big boss said, 24 months would be better. Personally, I think a minimum of 6 months is a must and this is 6 x our current monthly income.

Briefly, it’s how long could we last if we lost our job today. If we have 6 months worth of liquid financial resources, then we have achieved the minimum. If we have 12 months, then we should feel safer as we have enough time to look for another job or even to wait for things to get better and we could get back a similar job. If we have 24 months or higher, then yes, I do think we are financially healthy.

#2 Steady income flow?

Before we could have sufficient emergency funds, we need a steady income flow. Do we get our salary on time every month? Please note that if the company could not even pay us our salary on time every month, what is the chance that they can survive any unforeseen circumstances?

Do we get increment / bonus every year? If we did not and it’s because of us, we need self-reflection on whether we are doing good enough at our current role. Increment is for future performance. Bonus is for past performance. So, usually if we performed sufficiently, then we should get both.

If we did not get bonus because the company was not doing well, then it is better to join a company which is doing better in their business.

#3 Expenses in Check?

Do we strive to earn more and then we spend more? Many years ago, a good friend’s husband was driving a Segment B sedan and then he changed to a Segment C SUV.  My good friend said that her husband got a promotion, so he bought a new car. However, they could NOT afford anything more expensive because of the salary. This meant that if his salary was higher, then they would buy a more expensive car instead.

When we earn more, we need to save more. When we save more, we will have more funds to invest. However, if we earn more and we spend all the extra earnings, then our expenses are no longer in check. In fact, with a credit card, we may easily overspend too. Question, do we pay our credit card bills in full every month?

Furthermore, there are now so many Buy Now Play Later (BNPL) schemes that we thought we could afford the item when we actually could not. An easy way to check? If we need instalment plans for a RM1,000 item, forget buying that item for now. We just could not afford it and does not need it until we actually have the money to buy it.

#4 Our Cash Balance is ACTUALLY growing

If we have RM5,000 in the bank 5 years ago and we still have RM5,000 in the bank today… then we are not looking healthy in terms of financial health.

If we have RM5,000 in some unit trust investment 5 years ago and we still have exact same amount today, then we have no moved at all in terms of better financial health.

It’s thus easy to see if we are becoming more positive year after year when we look at our cash balance. If it is growing, then we are doing better with every passing year. Just need to remember though that the growth should be a meaningful one.

Let’s be realistic, saving an extra RM1,000 per year is definitely not going to be enough when we need the money after retirement days. A good benchmark would be to grow by around 20-25% of our earnings every year. If we earn RM100,000 per year, then we should be growing our cash balance by RM20,000 – RM25,000 every year.

Some may say we can look at our EPF savings. I think, we should just let that grow continuously and stop thinking of that as the ONLY source of “cash balance.” Just look at it when we have reached that age to withdraw it. Else, keep growing our cash balance and it will complement whatever we have in EPF.

 #5 Are we protected?

If we are hospitalised and the total bill is RM50,000 do we pay with our own funds or do we have insurance coverage / medical card? Just need to note that if we decided not to pay premium and hope to be lucky, then hopefully we are lucky. Else, a hospitalisation of just one week will set us back a year of savings, if not more. This is why we must not be penny wise and pound foolish.

Be savvy and be protected.

#6 Do we own at least ONE Property?

Please skip this if our earnings are so high that we will have no problems in paying rental for 25 years after retirement.

For the majority of us, rental does not stop after we retire. I am telling you this fact as a landlord. I have no intention to tell my tenant to stop paying me rental after they retire. Thus, we better actually own a place so that we could stop paying rental. Example calculation of how much we actually need?

We assume we stop working at 60.  Then, we live till 80.  That’s 20 years.  We also assume the landlord is super nice and does not increase the rental at all. If we rent just a room, than it’s as follow:

RM700 (rental) x 12 (month) x 20 (years) = RM168,000.

If we rent just a small unit instead, then it’s as follows:

RM1,500 (rental) x 12 (month) x 20 (years) = RM360,000.

We can either choose to own a property and actually have extra RM360,000 to go for vacations or spend it all on rental. Choice is ours to make yeah.

Conclusion

These would be the 6 measurements to know where we are in terms of financial health. Yes, we need all 6 and not just one of them. If we are the group looking at F.I.R.E (Financial Independence, Retire Early), then all the above, just need to multiply the speed of achieving them.

No one could foresee unforeseen circumstances. For example, Covid-19. Another earlier example, SARS.  No one could predict financial crisis. For example, 1998 ASEAN Financial Crisis or the 2008 Mortgage Crisis. No one could foresee disruptions which may cause them to lose their job. For example, out-sourcing of jobs to cheaper cost countries or even smartphone cameras killing the whole digital camera industry. This is why we need to prepare and financial health is really that first step we need to do.

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What age could we achieve FIRE (Financial Independence Retire Early)?

Not common during my time (haha)

You want FIRE? You must be younger than me today. This is quite a new concept because people of my generation or even my parents generation are not well known to think about retiring at 40. I am 43 this year. However these days, many do believe it is now possible to achieve FIRE and then they could do what they love to do without needing to do the tasks / projects which the boss wanted them to complete. Let us not debate on whether can or cannot. I am sure many could achieve this. Already I have many younger friends who could just stop working if they like.

Let us look at what may be necessary if one would like to just stop working full-time and do whatever one likes to do. It could be travelling or even as simple as watching Korean drama every night and day. Here are the 4 signs one is ready to FIRE. By the way, ready to FIRE and ability to keep the FIRE until the day we say bye-bye will depend on many circumstances too. Many of these circumstances may be sudden and unanticipated.

#1 – What’s the age target?

We want to achieve FIRE. Have we decided on the age which we would achieve this? When we hit our 35th birthday? When we reach 40 years old? How about 45 then? By the way, even 50 is fine because the life expectancy is no longer 65 like long time ago but it’s 80 these days and the expectations is that this will continue to increase in future. Thus, retiring at 50 still meant another 30 years more to enjoy the FIRE.

#2 – What’s the earning power like?
(Yes, active income has to be way higher than your expenses so that you could save / invest)

Are we also working towards that goal by earning more than what people typically earns every month? Let’s take RM11,000 salary per month for calculation.
This is the minimum household income for a T20 household in Malaysia.
If these T20 households need to work 40 years (retire at 60) before they could retire, then if we wanted to retire earlier than them, then perhaps we stay focused on just working for 20 years and aiming at RM22,000 per month?

#3 – What’s the passive income AFTER FIRE?
(Yes, passive income will now have to be higher than your expenses)

When we actively get a fixed income every month, everything seems fine. As soon as stop working and we do not have a fixed income every month, then we better ensure we have a recurring income every month. Preferably this recurring should be almost the same as fixed income if not more. Just now we used RM22,000 per month as a benchmark. Well, if we want to save enough money into Fixed Deposit to earn RM22,000 interest per month, then we need to have RM13.2 million saved into FD in the bank. Erm… how?

Do note that property investments are illiquid even if we get a positive rental return every month. Meanwhile stock market, even if we were to buy the bluechip counter would still have unforeseen circumstances. Many of these companies which were deemed to be as strong as the oak tree has fallen. Nothing’s certain these days. So, do plan in some disruptions to these passive income which we are earning. It’s like having 6 months of savings just in case we got retrenched and needed a new job.

#4 – Are we protected against unforeseen circumstances?

You want FIRE? Do get ready for unforeseen circumstances too. Do call up your insurance broker friends to understand more about medical cards, about other necessary protections based on our age and lifestyle. Please do not be penny wise and pound foolish because any sudden trips to the hospital for a week will likely to cause a huge dent in the expenses for many months. Suddenly, we are in deficit for the monthly passive income versus the expenses.

#5 – How low could our expenses be?

Beyond just the passive income focus, we also needed to know how low could our expenses go. If we are STILL paying rental, then do remember this amount goes up every year. My advice is to own a property which is fully paid on the day you decided you are ready for FIRE. Do finish paying for the car too and continue to drive the same car. If we intend to travel a lot, have we factored in this into the financial calculation?

If we are used to spending RM100 for food every day, are we ready to spend lesser? All these are to anticipate a sudden drop in passive income as well. No one knows when the future pandemic may strike.

#6 – WHY do we need FIRE anyway?

After all these and now I am saying this? Haha. Truth is, the lifestyle life we wanted need not be the life we need to have everyday. I love to have coffee with friends and just talk about everything under the sun. I do not need to do this daily. I love to jump into the sea and build some bad looking sand castles but I do not need to do this weekly. I have visited probably around 20 countries thus far and I would love to do this more often than every other month but I still love my hometown and all my family members too.

By the way, what if I love my what I do? Haha. I love people interaction. I love to share what I know. I love to write. These are what I am already doing today. As they say, if you love what you do, a job becomes an interest. When it’s an interest, you will be good in what you do and somehow all the rest could just fall in place.

#7 – We may already be some FIRE now.

Sit down and understand what’s the real difference of having a full-time job (which you have maybe 18 days of annual leaves and a total of 120 days of weekends and public holidays) versus a full 365 days of doing what we love to do. Do you want FIRE, everyday? Statistically, we already can do what we like 30% of all the days we have in a year. Not too bad, right? This is especially true if our current fixed income already covers all our expenses including those vacations, occasional splash for tech gadgets and even giving a generous pocket money to parents.

Conclusion

One day, when both my kids are already independent enough, I would not want to keep telling them how to do things my way. By the way, I have not mentioned even one time that they should become a doctor, an accountant or an engineer or even whatever role I think will earn lots of money. They will have their own interest and will have their own lives in the future.

I think by then, I can have my FIRE. Yeah, probably close to 60 years old. Haha. Financial Independence and Retire Early. If I live to 80, by then I would still have 20 more years to do what I like. Visiting a country every 3 months still meant I could visit up to 120 countries. WOW.  I rest my case for my FIRE. You want FIRE? You need to decide. Happy working towards our FIRE.

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Financial 101? Get financial knowledge and use it. Free lunch? Forget it.

When we want to do anything, go get the knowledge. Finance 101? Property investment? Stock Investment? Go read more lah. it’s not as hard as we think these days.  If it was in 2002, it was much harder. At the time, I did not have much information online to read for property investment. Use the knowledge we gained towards achieving our goal(s). Nothing is free in this world, except probably air. Even water is now expensive…

Here are a few FREE stuffs which we always see being advertised. By the way, the speaker has to pay to market the FREE course in Facebook yeah. I am not sure how many people love to do something for free for strangers and yet have to pay to market the free course?

When thousands of his / her students are earning hundreds of thousands…

As we browse through our Facebook or when we are listening to some songs on Youtube, we may be suddenly be shown a video of someone who looks very successful. He / She is very confident. He / She shared that he / she has helped hundreds of thousands of people succeed and they are now earning millions of (any currency).

Now… he / she wants you to also earn hundreds of thousands (of the currency you like) by joining his / her course too.

Two things come to mind. If he / she is so successful and has helped thousands of people to succeed, does he / she need to advertise his service? Logically, if I am his student and I managed to earn hundred of thousands, I would recommend my best friend, my good friend and all my family members to him / her.

Why would I want to be earning hundreds of thousands and all my loved ones still remain poor?

Of course, nothing is free, remember?

The reason why he / she is sharing is because he / she wants you to pay for the learning fee if you like to learn more. If he is going to teach you how to earn big money, we should pay him small money, right? Yes, we should. If I teach you selling skills, you should pay me too because you can use those skills to help you earn more money. I do not run any selling courses though.

Just need to remember this sharing session is to learn what he / she knows because he / she has the experience and it is NOT to buy what he / she is proposing. Usually, to have a more in-depth sharing, then some fees would be payable. This is because nothing is free yeah. The speaker would still need money to pay for a cup of coffee and slice of cheesecake too.

Great investments do not just appear one time

Just remember that most investments in this world today will continue to be available. The reason? If we bought shares in a company which is selling lots of phones, does it stop selling lots of phones after this year? If it does, then why are we buying the counter?

If we bought a company which produces planes, does it stop producing planes in the future? Of course, if we bought into a company producing something which went obsolete, then yeah, it may just be a bad purchase and we may lose money because we invested into it.

If we bought a property and it should increase in price next year, does it stop increasing in price after next year? If it only increases in price for one year, I am not so sure if it is a good property to buy yeah. Just remember that inflation will always be around and it will continue to help increasing anything related to price…

If it’s very limited in quantity and it’s a must-buy

Remember, if this property is limited in quantity (say last 10 units) and is a must-buy, then the seller’s best friend, good friend and family members alone would have purchased all of it. There’s little chance that it will be offered to a stranger.

Buy because it’s undervalued versus similar properties. Do not buy just because it was the last 10 units. Two very different scenarios. Do due diligence and suddenly we would realise why it’s a buy or not a buy. When we know enough, our decision will be better.

Read good books, follow great people on twitter, keep learning

Some authors (he / she) have done lots of research, thus his sharing via a book is a gem. Some people gained a lot through his working experience. The sharing is thus a must-read because reading one book meant that we do not need to have the same number of years of experience to gain the same experience. Some people may just be sharing because he likes to write. Haha.

This includes kopiandproperty.com too. There are no property listings yeah. No courses to sign up yeah. Last but not least, the founder hates speculative buys and prefers investing and not gambling. Happy understanding.

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Financial news: What if your electricity price increased by 3000 pct?

This happened at a DEVELOPED country. I have no idea if this also happens to any developing country but this particular news belongs to an advanced economy or also known as a developed country according to  one particular comedian who’s a former citizen. If you do not know her name, no need to ask me. Go google. Coming back to this alarming piece of news.

Article in themalaysianreserve.com
  Singapore’s Energy Market Authority will cap wholesale power prices from July 1 using a formula tied to natural gas and generation costs. The reason was because the price of electricity jumped as much as 3,000 percent this year even though the cost of liquefied natural gas actually dropped. This increase in price has hurt households.

The prices reached as high as S$3,594 ($2,685) a megawatt-hour in daily trading after a power plant at Jurong Island shut for a turbine upgrade amid unusually hot weather. Meanwhile, the cost of LNG has fallen 86% since March 2022.  Please do read the full article here:
Article in themalaysianreserve.com

Produce more or use less electricity. Hot weather is the culprit.

The need for a formula meant that the electricity price would be sort of controlled. This may not be a happy news for some producers of electricity if indeed their costs are increasing and they could not pass this to the households. Meanwhile any sudden spike in electricity would burden households especially during hot weather times. Perhaps running off to the nearest malls may help? Meanwhile the current producers of electricity, if they do not have sufficient profits, they may be unwilling to invest into more production for the future. This is also not an ideal situation too.

Perhaps can also encourage more Singaporeans to travel out of Singapore during the weekends, that would also help to reduce the electricity consumption too. Just drop by Malaysia anytime. The currency factor helps too. For the households without a car due to the controlled supply of car ownership, just rent a car. Happy travelling and hopefully everyone gets to enjoy cool temperature too.

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Financial news: When inflation strikes hard and fast

Malaysia’s inflation is always ‘known’ as 3%

Anyway, below image shows the inflation for subgroup food and beverages. It’s rising and many are twice the often thought number. There’s hardly any change or very small change for clothing & footwear, alcoholic beverages and tobacco (these are price controlled), health, communication and electricity and water.

However, restaurants and hotels are up 6.8% while food and non-alcoholic beverages (which is not price controlled) are up 6.7%. If we spend a lot of money on these two and our salary increment last year was less than 6.7 / 6.8 percent, it meant that our purchasing power for these items has reduced. We could buy less with the same amount or we have to pay more to get the same quantity. This is why the government must help Malaysian which has fallen into the poverty category.

Source: dosm.gov.my

Inflation is not confined to Malaysia

In one of the most advanced nations in Europe, Sweden’s visible signs of poverty are becoming ever more visible.

Article in malaymail.com
    Hit by the highest inflation in more than 30 years and poised for recession, Sweden’s visible signs of poverty are mounting amid rising inequality.

“So many people are coming here to breakfast,” said Kavian Ferdowsi who runs a charity helping the homeless.

“In the 13 years that I’ve run this, we’ve never had so many people,” he told AFP as his colleagues served up cinnamon buns and coffee.

Sweden has been hit hard by the effects of the war in Ukraine. Its currency, the krona, is weaker than it has ever been against the euro, and aggressive interest rate hikes have left many households with hefty mortgages payments.

After a spike in electricity prices at the start of the winter, food prices are now Swedes’ main concern, up 20 per cent from a year ago.

Inflation has hovered stubbornly around 12 per cent since November, according to official statistics on Wednesday.

“The first wave of inflation was just energy prices and some import prices. But now it has spread to the entire economy,” said Annika Alexius, a Stockholm University economist.  Do read the full article here:
Article in malaymail.com

When currency weakens and the central bank increases rates

Bank Negara Malaysia has chosen to maintain the Overnight Policy Rate (OPR) unchanged. The reason is to be accommodative to the economy. Some say this will cause the ringgit to weaken. The currency which should weaken is the one who kept suffering from trade deficits because people DO NOT NEED your exports. Yet, you are importing so much from other countries that all these countries’ currencies should appreciate against yours. Do read the full article here:
OPR maintained. Negative?

Work hard and stay ahead of inflation

It’s impossible to stop the inflation. If it could be stopped, some of these so-called advanced economies would have been able to do it. This is why the only way to fight inflation is to run ahead of it. Earn more than the rate of inflation and one would be just fine. Hedge against inflation by investing. Property could be one. Stocks with good dividends may be another. Perhaps even occasionally taking up a part-time role. Just a little extra and the earnings would cover the effects of inflation. Hopefully inflation will stay slow and we are able to face it better.

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Financial news: If I am hungry, I could not continue working lah

If I could hire an intern… I would pay the intern. Period.

If there are businesses who needs to hire interns but could not afford to pay an intern, there are just 2 conclusions. First one is that the business is NOT big enough to hire an intern yet. So the business owner just need to work faster, work more hours, work better and do all of the work by himself / herself. Second one is that this business is just NOT sincere and is looking to take advantage of the situation. Decide on which one and then take appropriate actions.

If I am hungry, I could not continue working lah

Imagine an intern who is NOT paid any allowance. How is this intern going to pay for lunch? Perhaps we should assume the intern’s parents would give the interns some lunch money? Whoa… tertiary qualified graduate still asking for lunch money? If this is the case, we better make sure all these interns have parents who could give them lunch money… I assume working hour is 830am to 530pm. By lunch time, if the intern does not eat, there’s no way this intern can keep working till 530pm yeah. Which company really wants to do something like this?

Article in thestar.com.my
  The Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said that the proposal to make it compulsory to pay allowances to students who undergo industrial training in the private sector will discourage employers from offering places for internship.

He said that instead of compelling employers to pay internship allowance, the government should consider giving more incentives to the employers to take in more interns and make it mandatory for all undergraduates to undergo internship. He also said that internship is a chance for students or fresh graduates to gain valuable industry experience that will assist them to be more employable. Please do read the full article here:
Article in thestar.com.my

If I am the intern, I would love to learn and contribute back to the company

If the interns are motivated, they will aspire to do more. If an intern aspires to do nothing for the 8 months which they are interns, I pity them. They have just wasted their 8 months and truth is, without learning much, they would be worse off than when they started because now even theories they learnt would have been forgotten. If I am the intern, I would love to learn and contribute back to the company. However, if I have to worry about money to get to work, money to eat lunch, money to go home after work and money to eat dinner and breakfast everyday, it’s highly unlikely that I would have the motivation to do more. Is that really what the intern wants and what the company hiring the intern wants?

Happy deciding yeah.

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Financial news: What happens when the population is no longer growing?

Where are the countries where the population is already declining?

The below few titles show which are some of the countries where the population number has started dropping. In other words, the number of new babies are much lower than needed for population growth.

Many industrialized nations are realizing the effects of an aging population, such as a decline in the working-age population and a surge in health care costs.

Over 20% of the population of 17 countries consists of persons 65 years or older.1

The decline in the working-age population results in a supply shortage of qualified workers.

Nations with a large senior population depend on a smaller group of people to pay for higher health costs, pension benefits, and other publicly funded programs.

Briefly, it’s not going to be rosy when the population in the country starts dropping yeah. Usually, it’s very hard to reverse this drop yeah. Well, unless of course the country takes in a lot of people from other countries. This is usually not acceptable because they may see foreigners with a different set of lense and perhaps fear the potential problems that would come as well if there are more and more foreigners while the population of the country continue dropping.

Where is the place where the fertility is lowest?

Please refer to the full article in visualcapitalist.com

South Korea has the lowest fertility rate in the world!

What about the place where the birth-rate is highest?

Highest would be Niger with a fertility rate of close to 7 per woman! (average number yeah). What is clear is all these top 10 highest fertility countries are also seeing a decline over the years. In other words, it’s not just the most advanced nations which are seeing a decline yeah.

What about Malaysia’s fertility rate?

Malaysia is also experiencing a drop too. As at 2020, the fertility rate is only 1.82 per woman yeah. Fortunately, I contributed a number which is higher than 1.82 yeah. I have a daughter and a son.

What about Singapore then? Our dearest neighbour

It’s lower than Malaysia yeah. The fertility rate is just 1.1 which meant that not only is the population not growing but it may even be declining unless of course it does something about it. Perhaps attracting more talents would be one such strategy.

According to investopedia, here are the bad effects from economies where the population is aging. In other words, new babies are fewer than the seniors and this has skewed the population to become an aging population.
Read here in investopedia

What happens when population declines?

Many industrialized nations are realizing the effects of an aging population, such as a decline in the working-age population and a surge in health care costs.

Over 20% of the population of 17 countries consists of persons 65 years or older.1

The decline in the working-age population results in a supply shortage of qualified workers.

Nations with a large senior population depend on a smaller group of people to pay for higher health costs, pension benefits, and other publicly funded programs.

Briefly, it’s not going to be rosy when the population in the country starts dropping yeah. Usually, it’s very hard to reverse this drop yeah. Well, unless of course the country takes in a lot of people from other countries. This is usually not acceptable because they may see foreigners with a different set of lense and perhaps fear the potential problems that would come as well if there are more and more foreigners while the population of the country continue dropping.

Happy learning and well, maybe make more babies?

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Financial news: S&P Global comments on Malaysian banks amidst tougher conditions in 2023

SVP Bank versus Malaysian banks? Kidding, right?

A friend asked me what will happen to Malaysian bank if even the 16th largest bank in the US, SVP Bank could collapse. I smiled and said that it’s best to look at them separately. There are many reasons why SVP Bank collapsed. The reasons are not present with Malaysian banks. Read here for the earlier article:
Moody’s downgraded the US banking system outlook
 I shall not comment further about Malaysian banks. We look at the comments by S&P Global instead.

Full article here: focusmalaysia.my
   In a chart-book style report by S&P Global Ratings entitled “Malaysian Banks Outlook 2023: Prepared for Tougher Conditions” it provided all the below numbers.

“Higher funding costs will drag on credit demand in Malaysia.”

“Credit growth could slow to 4%-5% from 6% in 2022.”

Very broadly, the international rating agency expects Malaysia’s economy to expand by 3.2% in 2023 which is a “large comedown” from the strong post-pandemic recovery of 8.7% in 2022.

Net interest margins of Malaysian banks are also likely to decline by five to 10 basis points (bps) as term deposit rates continue to increase in step with policy rates.

Stable employment conditions and adequate household financial assets to be mitigating factors against high household debt.

“We see limited contagion effects from recent troubles at US regional banks and Credit Suisse.”

“Healthy capitalisation and stable retail deposit bases are key credit strengths for Malaysian banks.” Do read the full article here:
 focusmalaysia.my

Not all are rosy, but it’s definitely not gloomy

GDP growth for 2023 is likely to slow. That’s not so positive. However, it’s a positive number from such a strong 2022 yeah. It says that there are no contagion effects from the recent troubles at US regional banks and Credit Suisse. It says that employment is stable and this is likely to mitigate effects from high household debt. Last but not least is that the banks are all having healthy capitalisation and also stable retail deposits. All these answered my friend’s question with actual analysis and numbers. I do hope my friend would read this article in full.

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Financial News: What happened to Credit Suisse?

Recent news about SVB Bank

We just got the huge news about the sudden collapse of SVB bank which was a top 20 bank in the United States just a few days ago. It’s all over all media and it’s still a heavily talked about topic. I have funds in Stashaway and they sent an email to detail to all the investors that its funds are safe and exposure to SVB bank is negligible. I could accept their explanation, so my funds in Stashaway is still in Stashaway.

As for the article about SVB Bank, here’s that article:
https://kopiandproperty.com/finance-news-moodys-us-banking/
 Now, we have negative news about a globally recognished banking brand; Credit Suisse. What has happened?

What about Credit Suisse?

Let’s read from a global media; Reuters.
This is the link if you like to read the article in full.

Credit Suisse will borrow up to $54 billion from the Swiss central bank to shore up liquidity after a slump in its shares and bonds.

The sell-off in Credit Suisse’s shares began in 2021, triggered by losses associated with the collapse of investment fund Archegos and Greensill Capital.

In January 2022, Antonio Horta-Osorio resigned as chairman for breaching COVID-19 rules, just eight months after he was hired to fix the ailing bank.

In July, new CEO and restructuring expert Ulrich Koerner unveiled a strategic review – but failed to win over investors.

Credit Suisse confirmed last month that clients had pulled 110 billion Swiss francs of funds in the fourth quarter while the bank suffered its
biggest annual loss
 of 7.29 billion Swiss francs since the financial crisis. In December, Credit Suisse had tapped investors for 4 billion Swiss francs.

On Wednesday, Saudi National Bank
(1180.SE)
, the bank’s top backer,
told reporters
 it could not give more money to the bank as it was constrained by regulatory hurdles, while saying it was happy with the bank’s turnaround plan.

Reuters Graphics Reuters Graphics

The shares have lost 75% over the past one year.
This is the link if you like to read the article in full.

This is when the central banks need to step in and calm nerves

Banks should not be allowed to grow too big that the whole world is worried if it runs into trouble. I still think the same even if I am the minority. Please do not allow banks to take risks without any check and balance. If they win with their bet, the management team may get a huge bonus. If their risky action fails, many people will suffer and it’s not just the employees in the bank or the people in the country where the bank operates. The world is a small world these days.

Alternatively, there should be regulations in place so that the risks are managed accordingly. Regulators should also be very alert yeah. As we all know, bad news travel fast and it’s sometimes too fast. Reactions due to any rumours may just cause the actual event to happen these days. So, stopping the news would be impossible.

The focus should be on how to take the right actions and provide the right kinds of news to the public and calm nerves. I would not want any global bank to fail because they really do have a lot of shareholders and these shareholders are not the ones who’s managing the bank. I wish things would be more settled soon. I hope my wish comes true.

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Financial news: What happens when most countries have fewer babies?

No one to buy goods and services!

If I am a milk powder producer and I produce only baby milk powders, I should be worried about my future maybe 50 years from now? There are definitely enough time to transform into producing milk powder for the seniors too. The number of new babies are declining throughout the world. There are many reasons but I think the biggest factor would be that people have so many distractions in the world today versus just going home early everyday and lights off by 930pm daily. People are working longer hours. Couples want more time for themselves. Cost of living is increasing especially the cost of raising kids. Travelling is also far easier when alone or as a couple versus as a family of 3 or 4.

What’s ‘down’ with the world in birth dates?

The keyword here is dropping. The measurement is just by how much it is dropping. Before we go will the population of the world be shrinking then? The answer is no.

Image source is visualcapitalist.com

“The current birth rate for Africa in 2023 is
31.599 births per 1000 people
, a 1.27% decline from 2022. The birth rate for Africa in 2022 was 32.005 births per 1000 people, a 1.25% decline from 2021. The birth rate for Africa in 2021 was 32.411 births per 1000 people, a 1.23% decline from 2020.”
Source: mcarotrends.net

Meanwhile this is Malaysia’s number

In 1950, our birth rate was 49.47 per 1,000. Briefly, this meant that new babies are fueling the population growth for the country. In 1990, this has dropped to 27.89 per 1,000 population. Briefly, we are still growing! In 2021, this is down to just 15.24 per 1,000 population. Briefly, our population number would be on a declining trend in the future. First sign would always be the fact the median age will start to rise, number of seniors are more than babies and the supermarket aisles start to be packed with products for the seniors versus for babies.

What about neighbours?

Thailand’s birth rate is even lower than ours. Meanwhile Vietnam is very similar to ours. Meanwhile US and UK is already having birth rates which are too low and may have to think proactively on how to attract talents to go there and work, maybe. This is why sometimes, we can see some policies which would favour certain professionals and make it easier for these professionals to go there and work and then settle down too.

Happy getting to know. Have more babies yeah. Haha.

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