Increasing interest rates. Bad news or good news?

Many people fear interest rates hike. Yet, many economists would tell you that increase in rates is not necessarily abad thing. If anything, it may even be signifying a stronger economy. With regards to interest rates, there’s one article worth reading. Briefly,
 it’s here in TheStar.
Even more briefly, it says of potential interest rate hikes in many countries in the world, including Malaysia. Wait, how can interest rate increase be a good news? Haha. It will affect borrowers, right? Then, if the borrowers are unable to pay, they will be in trouble and when they are in trouble, banks would be affected and stops lending. Without loans, it would be much harder to set up new businesses, no? Without new businesses, then no new jobs are created. The unemployment goes up and demand for property goes down. So, prices would go down as well, right? Okay, if it is this easy, then all the economists would not be needed anymore. 🙂  By the way, the only reason why the U.S. is increasing their rates or is saying that they will increase their rates is because their economy is growing, strongly. (according to the Federal Reserve based on available numbers)
Here’s that article again.

Well, generally, the interest rates are used by central banks to ensure the economy is moving in the direction that it should. Low interest rates are usually accommodative but should be adjusted accordingly so that the economy is moving but inflation is controlled.
Accommodative stance for interest rate.

(As for me, I still think accommodative stance is good and we should just let the Fed increase their rates first. Let the adjustment to the currency value continue. Then, when we finally increase the rates later, it will be more beneficial.)
There are definitely benefits for higher rates.

1. Older folks and even savers get more from their savings.

2. Helps in containing inflation (real demand is encouraged instead of overspending)

3. Usually helps currency to be stronger (Ringgit remains undervalued as per trade numbers)

4. Helps people be more rational in their stock picks. (Instead of low dividends from stocks, people may prefer higher interest rate returns instead)

Disadvantages for increase in interest rates?

1. People may think twice before buying a property. (Only applicable to those who are stretching themselves to the limit. Else, it should be still fine)

2. Potentially higher savings rate? (Arguable but usually will help a bit.)

3. House prices start to go down? If demand slows, naturally prices would soften. (Only for short term demand. Once people get used to the new rate, demand usually continues. Prices is however subjective lah)

My personal advice? Do not think too much about rates increase. We should focus on the reason for our loan application instead. Evaluate also what we actually buy because if a
1 percent rate increase is considered ‘too much,’

then something must be wrong with what we intend to invest in. Remember the financial crisis in 1997/98? Some ‘clever’ institution asked Malaysia to increase the rates tremendously and ‘kill off’ all the unhealthy companies. FYI, this is NOT the solution because no healthy company dealing with international trade can still operate if the currency suddenly loses 30 percent of your value… If their margin used to be 15%, they IMMEDIATELY swing into loss. Understand? Happy following.

written on 14 Dec 2017

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Interest rates still high and EPF is needed to buy property

Do you withdraw from your EPF to have enough downpayment for a property? This seems to be the usual for many Malaysians these days. Besides that, half of all Malaysians feel that the interest rates are too high. Well, Bank Negara Malaysia is still maintaining the rates so that it can be accommodative to the economy. Do read on for the full report of PropertyGuru Malaysia’s Consumer Sentiment Survey below.

— start —

Home Loan Situation Improving

But Malaysians Unhappy With Interest Rates

i) Half of Malaysians feel interest rates are too high

ii) More consumers dipping into EPF to buy property

KUALA LUMPUR, 13 SEPTEMBER 2017
 – According to PropertyGuru Malaysia’s recent
Consumer Sentiment Survey
, more Malaysians are now experiencing less difficulty in obtaining home loans however many still remain dissatisfied. They cited interest rates as too high and should be lowered given the present economic challenges faced by the
rakyat.

According to PropertyGuru’s Consumer Sentiment Survey, 46 percent  of people say that interest rates are too high compared to just 31 percent  who felt present interest rates charged on home loans are acceptable. Another 23 percent don’t know or prefer not to comment.

Home loans remain a vital component for the property eco-system. According to PropertyGuru data, a whopping 91 percent of respondents stated that they’ll need a bank loan to secure a home. Of which, 45 percent would opt for 90 percent financing while 25 percent would go for 70-80 percent financing. Another 18 percent would choose 100 percent financing.

The latest results coincide with findings that the Malaysian property market has reached a more stable position with gradual but sustainable price appreciation compared to the steep rise in the past 2-3 years.

Given this scenario, Malaysians continue to face challenges in pursuit of home ownership even though they are willing to transact. Obstacles still remain for purchasers especially for first time home buyers who are left with insufficient funds after paying their monthly instalments or meeting upfront costs such as stamp duties, legal fees, moving costs and so on.

“While more loans are being approved, especially due to more joint loan applications, many consumers are declining these loans due to the margin of loan approved and the monthly instalments to be paid. Banks are now approving more applications but, at times, the package offered is not attractive to consumers,” said PropertyGuru Malaysia Country Manager, Sheldon Fernandez.

Fernandez added that perhaps one solution is to offer first-time home owners a special interest rate if they bought affordable properties within a specific price range in transit oriented developments (“TOD”).

“There is a need to have a clear definition of what is an affordable property in terms of price, size, location and factoring close proximity to the public transportation network. This will not only promote home ownership, but also public transport ridership towards reducing traffic congestion and a more sustainable urban lifestyle,” he added.

More Consumers Dipping Into EPF to Buy Property

43 percent of Malaysians mentioned they have used their Employee Provident Fund (“EPF”) savings to purchase property, either as part of the initial down-payment or to offset their principal home loan amount. This is a 5 percent increase in the sentiment this year compared to 38 percent in H2 2016.

Fernandez added that the use of EPF funds, which are essentially retirement savings, provides much insight into the mind-set of consumers.

“Generally speaking, dipping into one’s retirement savings to buy a property is a sign of unaffordability in the market. It could also mean that consumers are prioritising home ownership over their retirement years. Others may feel that returns from EPF are not that attractive, hence the money is better invested into a home that would generate capital appreciation and also provide a roof over their heads,” added Fernandez.

About PropertyGuru’s Consumer Sentiment Survey

Conducted half-yearly since 2009, PropertyGuru’s
Consumer Sentiment Survey
 measures property sentiments and expectations around the property market to enrich decisions by helping consumers, property agents and developers gain a better perspective of the local property market. The H1 2017 survey saw 949 respondents in Malaysia and more than 3,100 respondents across Southeast Asia.

— end —

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Property Investment 101: Every 1% increase in interest rate means how much extra repayment per month?

Rising interest rates are quite common in recent years

Whether it’s the U.S, or Australia or even the UK, the central banks of these countries have been increasing their rates. Generally, they say it’s to fight the rising inflation. Briefly, when too many people are spending too much of their money and the prices moved up too fast because too much money chasing too few goods, the central banks will increase the rates. People may prefer to keep their money versus spending it since they will get higher returns. Theoretically, that’s what they say.

Well, Malaysia has not much choice but to follow suit. Just look at the US$ versus RM and you get some idea why we cannot let the difference between rates be too big. By the way, exchange rates SHOULD be determined by trade and NOT speculative purpose. Period.  Today, let’s just look at numbers which will affect homeowners who are still paying monthly mortgage repayments. Yes, I am one of those affected too and I am happy to be part of this group too.

Calculations, just calculations

Not too long ago, home loan rate used to be 3%. Today it’s around 4%. Taking a look at the
 calculation from calculator.com.my
, 1% increase in the rate increase the monthly repayment from RM1,897.22 to RM 2,148.37.  This is an increase of RM251.15 or around RM8.40 per day. Technically, it is possible to save RM8.40 extra per day if we did not eat at a restaurant but eat at stalls instead. Alternatively buy bread, magarine and kaya and one can save even more. Haha. Okay, so 1% is not crippling unless when we gotten this loan, we were already over-stretched financially yeah.

How about from 4% it goes up to 5% then? Take a look at the picture below. If the interest rate is 5%, then the total repayment per month is RM2,415.70  Compared to the original 3% interest rate, this is an increase of RM518.48 or RM17.30 daily. If we used to have a Coffee Lean latter daily, we can save RM17.30 if we stop having this latte every day yeah. In other words, lifestyle would determine if we could still keep paying the repayment even if interest rate has increased by 2%.

How about 6% rate then? Total repayment is now RM2,697.98 per month. This is an increase of RM800.80 per month or RM26.70 per day. What could one do? Skip the Coffee Bean latte and also eat at the local stall for three meals versus restaurants. What I wanted to tell everyone is that the truth is, we could save a lot of money if we are really pushed to save it. Okay, sometimes, the latte and the air-conditioned restaurant is needed. If that’s the case, the other way is to buy a cheaper property yeah.

What has happened to the interest rates thus far?

The Overnight Policy Rate (OPR) is set by our central bank,
Bank Negara Malaysia (BNM)
. It is a rate a borrower bank has to pay to a lending bank for the funds borrowed.

A lower OPR creates the domino effect of lower interest rates – this is meant to encourage consumer spending and spur borrowing activities which in turn, will stimulate the domestic economy.

A higher OPR, on the other hand, will translate into a higher interest rate and make the borrowing cost expensive for borrowers such as home buyers and businesses.

All the changes in the OPR

Malaysia’s Overnight Policy Rate was maintained at a historical low of 1.75% since it was reduced from 3% in 2020 due to the Covid-19 outbreak, until BNM increase it to 2% on 11 May 2022, 2.25% on 6 July 2022, 2.50% on 8 September 2022, and 2.75% on 3 November 2022. Currently, the OPR remains at 2.75%.

The 1.75% was the lowest OPR on record, according to
BNM data that dates back to 2004 on its website
.

Changes In OPR Malaysia

Date
OPR Malaysia
March 2023
2.75%
January 2023
2.75%
November 2022
2.75%
September 2022
2.50%
July 2022
2.25%
May 2022
2.00%
July 2020
1.75%
May 2020
2.00%
March 2020
2.50%
January 2020
2.75%
November 2019
3.00%

Fear not about interest rate, fear about buying the wrong property or over-stretching

One does not lose money until one sells. Thus, when interest rate for loans moved upwards and you could still afford the repayment, one does not lose any money even if property prices drop. Just need to keep paying until the rates come down or one earns more salary. Meanwhile, just remember not to buy the wrong property yeah. For that one, even low interest rates cannot save you.  Happy thinking.

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If interest rates kept going up, how long could we keep paying?

Briefly (Usually), when the economy is doing well, interest rates may be raised. The main reason is to prevent unwanted speculative activities. So, if the rates are raised and we have existing home loans, have we ever wondered how big would be the impact to our monthly mortgage payments? If the economy is in need of a boost, the interest rates may be lowered to encourage people to invest instead of leaving their money in the bank and earning way too little returns.  Learning from the world’s largest economy.  The U.S Federal Reserve Chairman Jerome Powell said that the U.S. economy is doing well; jobs are up and inflation is only around 2 percent. This will last for the next few years. He says that with this, the central bank will continue its gradual increase in interest rates.
The post in cbsnews.com here.
 In terms of jobs, the unemployment rate for the U.S is expected to fall to just 3.7 percent by the end of 2018.
Here’s that report in WSJ.com in their survey of economists.

Coming back to Malaysia. Let’s take a look at what would happen to our loans when the interest rates are raised. Assuming we have a RM500,000 loan currently. All the calculations are as per the image. Monthly payment is RM2,253 per month. If we are paying RM2,253 per month, when would we feel the burden becoming way too high? I think if the household is not buying at the maximum level they could afford, an increase of RM100 should still be comfortable. Perhaps anything above RM300 will be an issue?

When the rates are raised by 0.5 percent, the impact would be as follows: The monthly repayment is now RM2,388 or an extra RM135. The next question would be, HOW PROBABLE will the interest rates be raised by 0.5 percent? Bank Negara Malaysia said this when it kept the Overnight Policy Rate (OPR) unchanged at 3.25% at its Monetary Policy Committee meeting recently. It said in a statement that the degree of monetary accommodativeness at the current level of OPR, is consistent with the intended policy stance, taking into account monetary and financial conditions. MIDF Research also said the same thing. “We expect domestic economy will continue to expand at a moderating pace this year. Hence, we maintain that Bank Negara will keep the OPR unchanged for the rest of 2018.”
Here’s that article in thesundaily.my for reference.

What this tells us is that the likelihood for changes is not yet apparent. For those who are afraid of rates being increased, at least you would feel more relieved. Secondly, perhaps this tells us that the economy is performing well enough so that interest rates do not need to be lowered to encourage more investments. Anyway, all these are just estimations yeah. Changes to the economy would continue to affect what the BNM would do with the rates. The best advice would always be to buy well within affordability. Instead of buying the most expensive that we could afford which is likely to be very risky (if rates suddenly change), how about having some allowance so that should the interest rates are raised, our financial standing continue to be just fine. Happy investing yeah.

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written on 20 July 2018

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Interest rates will rise in H2 2022. Let’s be ready and be happy too.

If rates were to rise, what will happen?

Well, if the interest rate rises, the cost of borrowing will increase. Business will need more money to serve their loans. People buying a home may have to factor the extra amount of instalments for their home purchase. Some may also use this as an excuse not to buy.

Some businesses which wanted to expand in the current situation may have to rethink and recalculate. They may still proceed of course as the business turnover is likely to be far higher than the little extra due to rates increase. Anyway, are the interest rates really rising? Well, we have chief economist of ASEAN and South Asia of Standard Chartered Bank giving us the view and analysis.

Article in nst.com.my
   Lee Wee Kok, the Standard Chartered Bank chief economist for Asean and South Asia said that he expects Bank Negara Malaysia (BNM) to start hiking interest rates in the third quarter (Q3) of 2022 with two 25 basis points (bps) hikes and another 25 bps increase in the fourth quarter, taking the policy rate to 2.5 per cent by the end of the year.

He said, “Despite a challenging Q3 2021, we expect the economy to rebound strongly in the quarters ahead due to a successful vaccination programme, strong external demand, and supportive monetary and fiscal policy. We expect the output gap to close in late 2022. Given the historically low policy rate, we expect BNM to start normalising in Q3 2022 in order to realign monetary policy settings with the strong economic recovery.” Do read the full article here:
Article in nst.com.my

Why should we be happy?

When the Malaysian economy is not doing that well, our Bank Negara Malaysia (BNM) would do their best to be accommodative to economic growth. There is the monetary policy which BNM could use. Usually, interest rates are lowered to encourage spending, investments and thus would help to propel economic growth.

Briefly, when rates are low, people may take their money from their accounts to invest, corporations may also want to borrow to expand, more people may choose to buy a property since rates are now even lower. These are just some examples of what happens when rates are lowered.

When the economic growth starts to move, it may also spark a rise in inflation and BNM would thus need to balance between growth and inflation concerns. This is where interest rates may be raised. Thus, raising interest rates are also showing a positive sign for the economy too. This is why we should also be happy.

Happy knowing that the economy is indeed moving enough that BNM could even make this decision of raising the interest rate.  Cheers.

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Header Image by
mohamed Hassan
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Interest remains high, but buying still doubtful

Q4 2016 is about to start. How’s Malaysia property market thus far? Specifically how’s KL property market? One word? Subdued. Not much actions they say even though transactions wise I think the numbers are holding up. We will have to wait for the final numbers for 2016 next year to know for sure. What’s real? A few of my friends who has more than one property were still buying. Yes, within 2016 I did sign another SPA for a small apartment. As for many of my younger friends including colleagues, inaction would be an appropriate description. My friend Miichael Yeoh then invited me to speak in My First Home 3.0 seminar and I agreed because I also wanted to gauge the market,especially for first-time buyers.

Today was the seminar. It’s from 9am till 5pm consisting of following speakers. Image. Since these attendees  were willing to wake up early Saturday morning to listen to a few peoplespeak on buying that first home, I am quite sure they are interested. However, when I asked who will be buying this year, only three put up their hands. Haha. I think the rest were shy or still not confident about the state of the property market. More importantly however was the fact that many are interested in buying their first home. In fact many have their own ideas about property investment which shows diversity in the market.

During the break, one participant asked me about potential for agriculture land. On Thursday evening, a friend was telling me about a piece of land for resort in Taiping. Just two days ago, another colleague was also asking me about orchard land. Hey, is this the craze currently? I really have no idea and does not have enough experience to comment. My only real encounter with this was when a few friends and I went up a small hill in
Balik Pulau, Penang

to view an 11-acre durian farm land. We did not buy and I learnt recently that the price of that piece of land was already three times the price we were offered. Well, life’s like that.

Another participant told me she believes
landed will always be scarce
 and is worth investing in. I told her that I do agree but the prices today would be quite prohibitive for buying and renting and the type of potential returns we are looking at will never be like the few years before. Prices have appreciated so much that one has to be really rich to buy. My friend staying in PJ summed it up best. He said, ‘If I were to sell my current place, there’s no way I can buy back anywhere nearby for lesser.’ The only choice would only for him to sell and move further away. Else, he would not be enjoying the capital appreciation at all.

Today, I learnt that even if interest level is high, it does not necessarily translate to purchases. When I asked if there are anyone looking to
 buy within 2016
, only three put up their hands. Haha. The rest must be too shy. It is also very good to note that many people have their own way of looking at real estate investment and this is definitely healthy. So, what’s your thought on this? Happy following.

written on 24 Sept 2016

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Interested with Semenyih’s property potential?

I dropped by the
GrenePark Village sales gallery in Semenyih
 a few days go. They were introducing ‘Lifestyle Suites’ to the public for the very first time. Honestly, I did not expect the extent of the number of visitors. Perhaps this is the first time, maybe. They served good street food which is a definite plus but I am not going to bring my family over just for a lunch unless I have interest to also take a look at what
GrenePark Village really is.

Some photos.

I spoke to Mr. Lawah,the Marketing Manager for GrenePark Village and he shared that the interest from the public for this project was beyond his expectations. He estimated around 800 visitors as at 3pm. When asked what’s the two reasons that people are interested with GrenePark Village, he said, “We could now see that Semenyih is already an emerging hotspot. Just look at all the many established and branded developers in Semenyih today. Secondly, GrenePark Village’s concept appeals to them because this is going to the future of developments. A self-contained development open to the public and yet providing great convenience to the owners and working people.” I think another reason would be the appeal from the flexi-suites itself. They come ‘move-in ready’ (even the towels, forks and spoons are provided!)

I used to think of Semenyih as a place I travel to for seafood, Broga Hills and my cousin sister studying in Nottingham University
(ranked 82nd in the whole world. That’s well within top 1% of all universities in the world)
 Then, last year I went to two housewarmings in Semenyih. One bought a semi-detached home for RM1.2 million and another bought a RM700,000 terrace home. Both of them are working in KL city centre. That was when I realised that perhaps it’s time to look at Semenyih more seriously. This time, after looking at the interest for GrenePark Village, perhaps the appeal is now emerging. Happy dropping by their office. Here’s that number to call: +6 012 270 9282.
This is their website to know more.

Cheers.

written on 12 Nov 2018

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Cut rental? Some malls have waived.

These days, it’s common for tenants to try and ask for a waiver from their landlords. Remember that landlord who reduced his tenant’s rental by 60%? Here’s that article:
Let me give you 60% rental reduction
  Well, it seems that he is not the only one yeah. These are all the malls in Malaysia which are also trying to help their tenants. Please
do read this interesting article in FocusMalaysia.my
 with details of the malls which are doing their best to help their tenants.

Some offer half month of rental waiver for half a month while others were giving up till end of April 2020. The few malls I frequent occasionally include the below:

1) Sunway Group – 14 days
2) Pavilion – 14 days
3) WCT Group – Paradigm Mall – 14 days (to be extended)
4) The Gardens Mall – 14 days (to be extended)
5) Capitaland – 14 days (to be extended)
6) IOI Puchong – 14 days (to be extended)
7) AEON Malls & AEON Big 28 days – April 2, 2020

A full list of all the other malls are inside the article yeah (click to read).
  Some other interesting views from the article?  Malaysian Retail Association (MRA) president James Loke says that retailers are grateful that many landlords and shopping malls owners have responded positively to the association’s appeal for free rental during the MCO period. Of the sales for MRA members, he said, “The sales have dropped by as high as 60% in February. We envisage a 90% drop in March due to the MCO.”

Meanwhile, the Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said the government really needs to assist retailers to manage three big cost items – rental, payment of wages and payment of statutory contributions. He said, “The government can mediate with landlords and tenants to bring down rentals. The landlords may be incentivised with a lower tax rate or given tax-free status for income derived from rental for 2020.” Please do read the full
Article in focusmalaysia.com

I think it is quite inevitable for retail lots within malls to ask for rental waiver because all of them are closed during the MCO and thus revenue will be zero for these days which it is closed. Helping these tenants survive would also help the malls because if half of these do not survive, then even the mall would lose its attractiveness and situation may quickly become worse. Besides that, if these tenants were to close, the mall will need time to find new tenants. Thus a waiver not just help the mall in the long run but it will also build goodwill too. As for how long would the waiver be, all of us would have to look at the the Health Ministry’s decision next week. Happy following.

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Another international airport in northern to be ready by 2024.

We should treat this piece of news as something positive for the northern region instead of thinking of one ‘killing’ the other. Whether the arrivals (passengers or cargoes) were via Kulim or even Bayan Lepas, what’s not to rejoice if the investments could spur both states instead of just one? Of course, this would also depend on how the two states will work with one another as partners instead of competitors yeah.

I am saying this because it does seem that the news of an airport in Kulim is very much confirmed. In fact Kedah’s Menteri Besar Datuk Seri Mukhriz Mahathir has even  announced his hope that the new airport will be OPERATIONAL in 2024. By the way, it’s 2020 now which meant that within less than 4 years, we should expect the Kulim International Airport (KXP) to be welcoming planes yeah.

Article in nst.com.my
  Kedah Menteri Besar Datuk Seri Mukhriz Mahathir says that the state government is studying the details on a master plan for KXP. He said, “We hope to have it operational in 2024.”  He also emphasised that KXP is needed because the Penang International Airport (PIA) is focused on passengers while the KXP will cater to cargo and logistics. He added, “As of today, many industries are still freighting their goods by road to the Kuala Lumpur International Airport.”

Mukrhiz also said that the state government is planning to double the size of Kulim Hi-Tech Park and with this expansion, the park will see exponential growth in investments especially in industries involved with artificial intelligence or robotics. He said, “We hope the investments would not be at the same pace as what we did from 1996 to 2019, which only drew RM31 billion in investments.” Please do refer to the full
Article in nst.com.my

By the way, this was what our Finance Minister said recently yeah. “There is no reason for the Penang International Airport (PIA) to fear competition from the proposed Kulim International Airport (KXP) or any other airports for the matter,” Lim Guan Eng told the Penang State Assembly today. He said that each airport, including the PIA has its own strength to
compete with other surrounding airports. (click here to read yeah)

 Happy waiting for more news.

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written on 23 March 2018

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International airport to cater to 27 million passengers and higher. Wow for ASEAN.

I am pro-ASEAN. I believe we have a lot more to propel all ASEAN members upwards and prosperity can be achieved faster when there are more integration. At the very least, visit each other more often!  Just look at the population stats from statista.com below. Combined, we are already 650 million strong… Just have 10% of the total population as visitors to one another and that’s 65 million. Now you see why we should actually do more together?

Source: statista.com (URL as per top of image)

Today, we focus on our lesser known neighbour, Cambodia. I say lesser known because most of us would have visited Indonesia, Singapore, Thailand and the Philippines… Cambodia will have a new international airport to welcome us soon.

Article in nst.com.my
  According to Khmer Times, construction of the Phnom Penh International Airport will be divided into three phases and phae 1 will be completed in 2020. YeeCon Long, from Cambodia AirportInvestment said the process of designing the airport was 60 percent complete. Three Chinese companies will be building the new Phnom Penh International Airport. He also shared the airport is expected to be completed by July 2022. He said, “It will operate on a trial basis.

The airport will be able to accommodate 27 million passengers by 2030 and about 30 million by 2050.”  The airport will cost US$1.5 billion and be located over 2,600ha in the Kandal province. Khmer Times also said that the Changi Airport Group was engaged as airport consultant to plan and advise on the construction of the terminal, passenger flow to facilitate a unique experience, and placement of duty-free shops.
Article in nst.com.my

27 million passengers yeah. This is more than three times the current capacity of Penang International Airport before its newest expansion plans.
(Click to Read here to know more)
 The builders are from China and the airport consultant is from the world’s No.1 International Airport; Changi from Singapore. Beyond just reading this article, start to understand a bit more about Cambodia.
Here’s a BUDGET TRAVEL site for tips to Cambodia.

Their currency is the Cambodian Riel (KHR). It’s around RM1 to KHR1,000. The site says average cost per week per traveller is around KHR1,005,712 which is around RM 1,000. Pretty okay as it includes hotel and meals and this is average number which meant you could do it for less if we needed to. We can visit it once before the new international airport and another time when it opens. Happy travelling.

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Catalysts for the Malaysia property market. More to come.

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This is for Penangites. Especially those who love luxury collections. It may be time to add to your collections. I have seen the list of items which would be auctioned off and they are pretty exclusive. Some are extremely rare too. Anyway, just getting to know and learn about these would already be a plus to attend. There would also be rare and extremely valuable banknotes on display too. (If you like it, offer for it to be auctioned off). Let’s just say that the reserve price could be a six-figure one. The event is RHB Premier International Luxury Collections Week 2017. On 27th October 2017 (Friday), it would be having it’s official grand opening ceremony. The guest of honour is YB Danny Law Heng Kiang, Penang State EXCO Member of Tourism Development and Culture. The event will be held in Atrium, Gurney Paragon Mall, Penang.

On a daily basis, it starts from 10am – 10pm at night. The official opening event starts from 11am and after the opening ceremony, there would be a Jewellery Show presentation by renowned
AMEE PHILIPS.
 All the luxury collections would be displayed to the public afterwards. Feel free to walk around and ask lots of questions!

At 3-5pm, there would be a private session which is by invitation only. It is a Historic Artefact Jewellery Show and Sharing Session by Ben Rongen, Kraak Creations PLT. He is a famous Australian jeweller. The event continues and on 28th October, there would be more learning sessions which will be shared by the Asia Gemological Laboratory – The Beauty of Sapphire followed by ‘Investing in Antiques and Art’ which willbe presented by prominent collectors and traders.

On October 29, the AUCTION happens. Drop by and join the bid. Else just get to know how high some of the luxury collections could fetch under the hammer. Yes, I will be personally be there too. Let me know if you are dropping by yeah. We can exchange cards. Cheers.

written on 21 Oct 2017

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Penang island (Central location) condo at RM338k? (15 percent below market price)

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International reserves up and down (at the same time)

International currency reserves for countries is a consideration of whether or not the country is loved by investors or not. Too low and the investors started to get worried. Well, for most countries except the U.S since international reserves are usually denominated in the US$.  Of course, we can also imagine what will happen if some other currencies start to be a major denominator for international reserves and not just the US$. Coming back to Malaysia. The international reserves are both UP and DOWN at the same time. Misleading? How can international reserve be up and down at the same time? Well, we can ‘blame’ the ringgit for rising a bit against the US$ currently. So, in US$ terms, the reserves are UP. In Ringgit terms however, it is down. Oklah, can be considered as good news because we are on the right track as long as the international reserves continue to go up towards a three figure number soon, hopefully. The below would be Bank Negara Malaysia’s statement. Short and sweet.

— Statement from Bank Negara Malaysia —

The international reserves of Bank Negara Malaysia amounted to USD98.9 billion (equivalent to RM424.8 billion) as at 30 June 2017. In USD terms, the level of reserves continued to increase. However, in ringgit terms, it declined following stronger ringgit during the second quarter. The reserves position is sufficient to finance 7.9 months of retained imports and is 1.1 times the short-term external debt.

— End of statement —

Source: Bank Negara Malaysia

Another article on why international currency reserves are important in TheStar here.
 The writer is Martin Khor. He is the executive director at the South Centre.

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BNM’s accommodative stance for the economy maintained

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International travel restrictions? Update from Japan, Australia, Malaysia and USA.

I intend to travel via flights again when international borders are reopened and my children has been fully vaccinated. Perhaps Perth could be one of the choices since it’s near enough and it has handled the Covid-19 situation pretty well thus far. Japan is meanwhile a country I love to visit again and again because it’s just too culturally beautiful and it has all the sights and the food which I love. Plus, the truth is, it is quite affordable too especially when compared to other advanced nations.

Article in themalaysianreserve.com
  Japan will reopen its borders for business travelers and students starting on 8th November 2021. Short-term business travelers only need to undergo a quarantine of 3 days if they were fully vaccinated. Meanwhile longer term travelers and students would have to undergo 14 days of quarantine or 10 days if they were vaccinated with these approved vaccines: Pfizer Inc., Moderna Inc. and AstraZeneca PLC. However, there is still a daily limit of 3,500 foreigners entering Japan. Please do refer to the full article here:
Article in themalaysianreserve.com

Article in nst.com.my
    Foreign Minister Datuk Saifuddin Abdullah was speaking after meeting his visiting Australian counterpart Senator Marise Payne here in Malaysia. He said that Malaysia and Australia are discussing the possibility of reopening their borders as soon as possible.

He said, “The understanding is that, it has to be in stages. What those stages are, is to be announced later, as and when our ministers of health are ready, but as far as foreign ministers are concerned, we need to travel and we want people to travel.” Please do refer to the full article here:
Article in nst.com.my

Article in nst.com.my
   The United States which has closed its borders  in early 2020 by former president Donald Trump will be reopened to foreign visitors fully vaccinated against Covid-19. US health authorities have also announced that all vaccines approved by the US Food and Drug Administration and the World Health Organization would be accepted for entry by air. This includes the following currently:  the AstraZeneca, Johnson & Johnson, Moderna, Pfizer/BioNTech, Covaxin, Sinopharm and Sinovac vaccines.
Article in nst.com.my

Not soon but it will be QUICK when it happens

If we look at just ASEAN and the the question for international travel restrictions is how soon, I do not think it is anytime soon. There would be a lot more discussions before any agreement can be reached. It’s the same with Australia too.

However, if the question is whether it will be very quick once it’s decided, then yes. I do think that once that tipping point is reached, we are going to see the connectivity between countries will quickly reestablished with sufficient Standard Operating Procedures. Yes international travel restrictions once lifted, flights will quickly rise!

That would definitely require ALL foreign visitors into Malaysia to wear masks. If you do not wish to wear masks, please go somewhere else. Plus it would require all visitors to show that they have been fully vaccinated too. Just follow the list of vaccines approved by World Health Organisation for this.  Happy anticipating.

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Internet cities? What’s that, really?

Internet cities? What’s that, really?

We have the internet which continues to have an explosive growth in users and penetration. We also have property development where many are being pitched as self-sustaining new townships where people could work, play, grow and even have fun without the need to drive to the city centre everyday. Now there’s this new term called Internet Cities which I read for the first time. It’s something which Iskandar Waterfront Holdings Sdn Bhd (IWH) and Catch Group Sdn Bhd is exploring together.

Article in nst.com.my
  Internet Cities are said to be designed as technology biz gateways for global tech giants and it will specificially cater to the needs of the local and regional digital start-up and growth businesses. Iskandar Waterfront Holdings Sdn Bhd (IWH) and Catcha Group Sdn Bhd have signed a memorandum of understanding to explore building Internet Cities and technology hubs across South-East Asia.

IWH and Catcha said in a statement today that the Internet Cities will be designed as technology business gateways for global tech giants from the US, China and other major economies who are targeting South-East Asia. The two companies in a statement said that the collaboration will allow the team to research successful Internet Cities and tech hubs in Paris, Silicon Valley and Shenzhen for ideas and inspiration. For Malaysia, Johor and Kuala Lumpur are the first choice for the project. Do read the article in full here:
Article in nst.com.my

It’s not the internet, it’s the environment

By the way, I think what they are saying is that these will be hubs for technology start-ups. It’s not just a place with fast internet speeds yeah. If it’s just fast internet speeds, many already have this.  However, if there is a place where the internet speed is super duper fast and then there are also 500 start-ups within the city and all these start-up founders work, meet and learn from one another everyday, then yeah, we are on to something.

Of course, we can also say, oh… something like Cyberjaya? Hey, that does sound familiar but probably Cyberjaya was aimed at getting big multinationals but this internet city, I think it is aimed at start-ups. Lots and lots of them, all within one place and we will then see an explosive growth. Let’s look forward to hearing more before I make any conclusion. Who knows it may just attract me to think and do more?

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Internet stocks? However high, watch for profitability, first

When markets become very exciting, I always worry for small time traders when certain stocks rise up very high. Seriously, profits for companies do not suddenly change and thus the share prices should not suddenly increase for no apparent reason beyond expectations or sentiment. This is even more so for internet / online counters. Do note that there are internet giants which are profitable and if I may say some are very profitable. Google and Facebook, for example would be these very profitable companies. Apple is another very profitable company even if it’s losing market share in the smartphone business. Right focus matters, really.

However, there are many internet / online companies which are already way over 5 years old and has YET to turn a single annual profit. The argument? It’s focusing on market share. How are some of these companies gaining bigger market share? Sorry, it’ not based on service. It’s merely using ever more money to subsidize ever more new customers. The hope is that the competitors would somehow lose more money and close shop leaving the market with just one player. At that time, this remaining player can start charging more to go into profitability. Absurd idea to say the least. So, please STOP buying all these unprofitable and yet highly valued companies regardless of their brand name. Else, just hope that more new investors would continue to invest because just like the tulip mania, everything may just disappear when people realised that there is no basis for such a high price.
Read about what is tulip mania here.

Oh yeah, there’s a piece of news about
internet counters here; TheStar.
It tells of both the really profitable companies as well as some of the above which is still saying that their focus is on ensuring they have biggest market share, then somehow profitability will happen. Another
piece of news here in Bloomberg
 which tells about how even the biggest brand names that we know may still be suffering huge losses every quarter. To those who are now asking, if these companies are suffering huge losses every quarter, how could they continue operating? Well, there are institutional investors… remember? Instead of putting their money into fixed deposits in some of these advanced countries paying close to zero returns, they would prefer to bet on potentially profitable companies. It’s considered a bet because most of the companies that venture capitalists invest in will never be profitable. That one that got profitable? It would provide returns which is more than the money they lost in majority of all the internet companies it invested in. As for all small traders like most of us, let’s keep this in mind always. Happy investing.

written on 6 June 2017

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Interstate travel is allowed between RMCO states (cannot drive your own car)

Interstate travel is allowed… BUT not for all states and certainly not for everyone yeah. I think the latest announcement about interstate travel is acceptable lah. It’s only between RMCO states and we CANNOT drive our own car for this travel. We need to engage tour agencies who has to get approvals from the police to do so. Well, at least this is one of the ways for those who need to do some revenge travel.

By the way, Selangor is still under CMCO, so we are NOT allowed to go for holiday, regardless of whether we drive our own car or someone else is driving. As for when would our CMCO turn into RMCO, I think the next date we need to wait for any new change would be 18th March. That’s next week Thursday. Not that long yeah, wait please. As for that announcement about RMCO to RMCO interstate travel, do refer to the media report as per below.

Photo by Fabian Wiktor on
Pexels.com

Article in thestar.com.my
.
  Senior Minister Datuk Seri Ismail Sabri Yaakob said that from March 10, targeted bubble travel between states under the recovery movement control order will be allowed. He said, “Travel for tourism purposes using private vehicles is not allowed. This is because police will have a difficult time to monitor movements compared to using transport provided by tour companies.”

Basically, even though travelling from one recovery MCO destination to another via a conditional MCO state is allowed, the tour transport operators are not to stop in between destinations. For the full article, do refer here:
Article in thestar.com.my

Go… go for your holidays.

Would I travel between RMCO states if I am allowed to? Yes. Would my wife pester me to travel between RMCO states? Yes!!! So, I am waiting for the day to come. There’s a school holiday end of March. I think this is a golden week for tourism players. Nevertheless, I am all for safety first. Let’s not derail the current recovery in terms of much lower active cases versus just 14 days ago, much lower new cases versus recovery cases versus 10 days ago and basically, the COVID-19 vaccination has just started.

Immunity will support economy

We are nowhere near immunity and only with immunity that we could support the economy yeah. Here’s that earlier article:
Full recovery only in 2024 with vaccinations
 Happy understanding also that vaccinations are necessary and to protect our loved ones, we must protect ourself first. Please do register and go and get vaccinated.
Register now for the vaccination
. Thank you.

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Interstate Travel news. 500 cars asked to turn back! What were all these people thinking?

Interstate travel is NOT permitted. Inter-district travel is also NOT permitted. Okay, unless there are official reasons and one has approvals from the authorities. Well, I read this news and I am like, ‘what were all these people thinking?’ There were OVER 500 cars caught trying to go into Kelantan and they were all without the necessary travelling permits. They were asked to turn back to their original destination. I do hope all of them are back to where they came from and did not try some other ways to sneak into Kelantan.

Article in themalaysianreserve.com
   Kelantan police chief Datuk Shafien Mamat said that more than 500 vehicles attempting to enter the state without interstate travel permit were ordered to turn back yesterday. This number was recorded between 12 am and 5 pm yesterday, at the three main entry points to the state, namely, Gua Musang, Pasir Puteh and Jeli.

Besides not having interstate permit letter, Shafien said there were also a handful of road users who only produced the permit without verification of any police station. He said, “These people were unlucky as the police were able to detect the tactic and they were ordered to turn back.” Do read the article in full here.
Article in themalaysianreserve.com

We are in EMERGENCY, remember?

Dear all, we are in COVID-19 ’emergency’ currently. STAY HOME unless it’s truly necessary to go out. Driving is really not needed unless one has no choice. Remember there’s online order and someone could deliver to your home? By the way, just travelling within the district is already big enough yeah. Lots of good food, just that one could not sit down and dine. Please help Malaysia and Malaysians who wants to break the chain of infection soonest possible. Thank you for your effort and please stop giving lame excuses.

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Action needed lah. No such thing as BEST investment.

How many times have we heard of friends telling us that he is thinking of investing his hard earned money. However he is still thinking about the best way or the best things to invest in? I have many. fortunately some of them would take my advice and really start something, even if it may not be the best. Seriously, WHO in the world knows which investment would give the highest return ever? Haha. Not too long ago, a relative asked me what’s the
BEST stock to buy
. The reason is because so many of her colleagues are now talking about stock and saying how much they have earned from buying and selling. Another relative working in bank sends her all the potential stocks everyday. I told her, I do not know. If I know, why am I still waking up early and working till 6pm everyday? She laughed and I laughed too.

Today, the equity market is volatile even though it has been on a rising trend. The property market has slowed down tremendously but prices have barely moved as can be seen from the
average property prices.

The Fixed deposit rate is still ever so slow. Unit trust needs time because if you were to buy into equity type of unit trusts today, it meant that you are buying at quite a high entry point. Many are still waiting for the affordable schemes by so many different parties, from the state to the federal governments. If the scheme is the very low end, the middle income class do not want to register. Yet, for the properties which are priced higher, say RM400,000, some may feel this is too high.

So, perhaps doing nothing is best, today? Perhaps
keeping cash
 is best so that we can wait for the right opportunity? Haha. May I ask, what kind of opportunity are we supposed to wait? For the whole market to fall? Say, the years of 1997/1998? Think objectively, are you sure you want that to happen, if you are an employee and you are in the middle income group? Since keeping cash is not, perhaps put it into fixed deposit for some returns? Well, truth is, if you already have RM1,000,000 or higher, I think keeping is FD is still ok. It should give you around RM3,000 plus per month. If however you have just RM50,000 and you have a very stable job, perhaps your goal should be to evaluate carefully and buy your first property.

RM300,000 for a condo? Depending on area, yes there are still available units. Buy one, stay there, stop renting. Save more for whatever you want to know but once you have bought that property, you have just forced yourself to save for your future. I do not think you would have the appetite to buy an
expensive car which may cause you to go bankrupt
. The number one cause for bankruptcy in Malaysia is still due to vehicle hire purchase. Of course, if you trust your unit trust friend, you can also put that amount into unit trust but it will at best be double that of your FD within the next few years. Over a much longer period, I really do not dare to say if the return would be enough to help you buy your first property. Okay, actually there are MANY things you can do but doing nothing is NOT a strategy. Happy deciding.

updated on 20 Jan 2017

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Potential Crisis / Danger in the property market. Come listen, yeah.

The event is INVEST ASIA.  The details as per the image below.  I will be answering questions on this topic:  “???????”  Do not miss this yeah because… I will be speaking in Mandarin, again.
Click here to register
 and we will see you there yeah. I think I will get to know more people after this event because all these are prominent speakers in Mandarin. Oh yeah, there’s an English session too and it runs concurrently with the Mandarin one.  Image is after the Chinese session.

Never stop learning and always note that threats will bring opportunities. Anyone staying safe all the time may not be that safe because inflation will continue to eat into the value of our money if this wealth is not used to grow wealth too. Fortunately, we are now living longer, thus we have even more time to do what we love to to. Unfortunately, it also meant that we need to really build upon what we have yeah. See you all.

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Mark your calendars because INVEST Fair is making a comeback!

Salary is never going to be enough, INVEST wisely

This is a common question to me when they know I am the founder of kopiandproperty.com which is Malaysia’s leading independent property blog. “Do you think property investment is the best investment type?” Sorry, my answer is not what most people expect yeah. Investment, as long as it continues to provide good returns, within acceptable risks to the investor and continuous would be needed. Period. It’s all about Investment and not about whether property or stock or whatever type yeah.

Do I have any investment to sell during my talk?

Many speakers would speak about other types of investments during this INVEST FAIR. I will speak on Property Investment. I am also glad to inform that I am NOT affiliated to any developer, I am NOT a real estate agent, I am NOT from the bank and in fact kopiandproperty.com does not and will not accept any commission from the sale of any property. Then, now and future, that’s my promise. So, I will speak as someone just like most of you. Come and find out and come and ask more questions.  See you.

Message for INVEST Fair

Prepare to uncover valuable insights and thrilling opportunities at the panel discussion titled “How to profit from a market crash as a beginner”, featuring Zheng You. Join us at Hall 1, Mid Valley Exhibition Center in Kuala Lumpur on June 3rd from 6:00 PM to 6:30 PM.

For more details, visit
https://bit.ly/3OvWgGD

INVEST Fair 2023 details:

Location: Hall 1, Mid Valley Exhibition Centre, Kuala Lumpur

Date: June 3rd and 4th (Saturday and Sunday)

Time: 10am – 9pm (Saturday) and 10am – 7pm (Sunday)

By registering now, you have a chance to win Apple Airpods Pro! Don’t miss out on gaining insights from renowned financial analysts, KOLs, and public listed CEOs. Connect with like-minded investors and seize valuable networking opportunities.

Additionally, you’ll stand a chance to win RM 20,000 worth of pool prizes by visiting INVEST Fair. This is an incredible opportunity you don’t want to miss.

Register for FREE at
https://bit.ly/3OvWgGD

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Sometimes, the focus can be “Invest for stable returns,” not always for HUGE potential.

This is something close to my heart and I have written about it a few times. Stop fooling ourselves that internet related startups trying to solve a real world issue must keep losing lots of money for potential earnings in future. Those investors who invest in all these could have invested in something better actually. Consider this, some startups have lost hundreds of millions for a few years. This is the reason why funds, especially those statutory ones must be very careful. You are not a venture capitalist and you should not try to be one. By the way, even if the startups receive lots of funds, it may still fail, ok.
Here’s an article cbinsights.com about it.
In brief, even the most experienced venture capitalists may still fail to identify startups that would DEFINITELY be successful. Let’s look at an article in
TheStar about EPF’s views about investing in technology stocks.

This is the reason why I agree with EPF’s deputy chief executive of strategy division, Tunku Alizakri Alias who said, “We’re also looking at those companies that will be around for the next 20 or 30 years to ensure the savings of contributors is going to be protected. The EPF, will therefore, be very careful in investing in any stocks or companies and take into consideration the risk profile.” (Seriously, how many of us here would want to invest in a technology stock which keeps losing money and thus having our EPF declaring lower dividends for many years? The higher the risk, the higher the returns? The many failures in the technology corporate world would tell us that this is not always true. A venture capitalist may find one winner out of 10 different investments. EPF does not and should NOT have that luxury. Many of our senior Malaysians may not be able to withstand such shocks.) Here’s an article why:
Malaysia: 42 percent senior citizens have zero savings

I had a long chat with my insurance agent this evening. She explained to me the plans that I have bought and shared with me the importance of having sufficient protection since my wife is not working. I told her that protection from
insurance should be started from young.
 In fact perhaps it should be separated from what we are trying to do with other investments that we do. Property investment for example would definitely be different when we are younger or older but insurance is compulsory regardless. In fact the earlier we are protected, the lower the risk that we may lose all that we have gained over the years and having to restart from zero. I think both of us are thinking along the lines of protecting what we have for a very long time. Quite similar to what statutory funds must always do. Briefly,
EPF should be investing for stable returns
,
 not for POTENTIAL of huge returns and thus taking unnecessary risks. Cheers.

written on 2 Aug 2017

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Investable antiques, get to know what, why and how.

Scarcity helps prop up value of properties. That’s why some of my friends would tell me that landed is forever good. High-rise meanwhile depends on the maintenance after some years. What about antiques then? I think it’s even more scarce and most of the time, it comes with ’emotions’ too. Perhaps some famous families have used these items. Specifically, antiques from Straits Chinese?

Let’s not talk about the millions that some SUPER RICH businessmen bought. Let’s talk about something we could actually learn, understand and perhaps think about it as another form of investment. If you are seriously thinking about investing in antiques next, this is one event you should not miss. There’s an upcoming ‘Straits Chinese Antique Auction’ which is being organised by
MNP Auctioneers.
 (Yes, they are also the auction house appointed by
Bank Negara for all its banknote auctions
)  The exhibition itself where you can view and appreciate the items would start from 19 – 20 May (10am – 5pm). This would then be followed by the auction event itself on 21st May 2017. (Time is from 1030am onwards) Be there earlier to witness what happens during an antique auction event. For more details, do refer to the image attached. Happy visiting and investing.

written on 11 May 2017

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Investing into an education township is attractive and possible

My personal experience with education township

I graduated in July 1998. Yes, now you know my generation is known as the Gen-X. It was in 1994 that I started that I enrolled in Inti Subang Jaya for my degree. At the time, all the colleges in Subang Jaya or Bandar Sunway does not have the attractiveness of today. In fact most of them do not even have University status! They are merely colleges and they could not even grant degrees at the end of the studies.

The students would have to transfer to a partner university. The number of students were however increasing even then and one could see this from the many student accommodation advertisements everywhere. At the time, I paid RM250 to stay in a small room and I shared it with two other friends who also paid RM250 per month. Yeah, the owner gets RM750 per month just from that one converted room in their landed home. It’s not the only one… 😛

Student population in education township

I have friends from all over Malaysia and even I came from Ipoh. It was also at this time that I met my wife who was then a student from Sabah. I stayed in one of those converted landed homes and I shared a room with two other friends. Needless to say, those years passed very quickly and I would then moved on to Bristol, UK to complete my degree.

After graduation, many of these students would be working in the Klang Valley and because they are familiar with the area, they may choose to continue staying in Bandar Sunway and its neighbourhood or even purchase a property there too. Please note that when one is familiar with the place, the chance to continue staying there is far higher.

Image courtesy of OCR

The evergreen status of higher education

I will prepare funds for my children to complete their first degrees. I have spoken to many parents who have the same thoughts. In fact, these days it’s a huge disadvantage if one were to start working without a degree. The reason is a simple one. When more people have it, then the people without the qualification will be left behind. This is why tertiary education as an industry will continue to grow for the foreseeable future. Median age of Malaysians is 29 or 30 years old currently.

One major catalyst for townships would be students

In 2002, I started my Master in Business Administration under UUM, Malaysia. It was then that I have gone to Sintok in Kedah for the very first time. There were hardly any shops along the way but when I graduated, there were so many newly built shops and Sintok is definitely a thriving education township even though it was in the middle of nowhere when it started.

Businesses are thriving and the demand for goods and services from just the student population alone could move the local economy.

Image courtesy of OCR

Bandar Sunway is in the Klang Valley

When parents are deciding where to send their children for tertiary education, one obvious choice would be Bandar Sunway. Within the neighbourhood, there are INTI International University, Taylors University, Sunway University, The One Academy, Monash University, SEGI University and many more. This is one reason why it’s a melting pot of students from all over Malaysia. As they say, somehow people just love to go to places where everyone loves to go. Thus, the attractiveness of an education township would keep growing. Well, except for the past 2 years due to Covid-19. However, with all the lockdowns lifted, do try to go to Sunway mall during the weekends of after study hours and you will understand what I mean.

When businesses thrive in an education township

Within a thriving education township, many businesses would also thrive. This is also why it’s a place where finding a shop to rent to start a business is tougher and this is also why it’s always a lively place no matter when we drop by. In fact the accommodation scene is no longer just limited to the converted landed homes and it’s definitely not just one or two of the more contemporary high-rise homes with facilities today. Today, it’s a big industry when it comes to accommodation and it’s also where many property investors may have invested as well.

Image courtesy of OCR

Accommodation as a long term property investment?

We can see clearly that whether it’s back to 1998 or even today, when it comes to student accommodation, it’s always an attractive proposition.  Just remember though that it’s not just buy and forget yeah. Property investment needs time. Time to understand, time to do research, time to view the property, time to get the place ready, time to scout for tenants, time to clean up after the tenant has moved out etc.  This is why it’s important to buy into an area which is already thriving versus another which would need even more effort to secure a tenant.

Here are some statistics of the current rental price for selected institutions within and around Bandar Sunway. This rental projection is based on current available information and provided by OCR’s own research.

Click here for more information on YOLO

Importance of a tertiary education and accommodation for these students will continue growing

From the 90s when I was a student in a college to today when I am in my 40s and another 10 years when my children will be in a university, the importance of tertiary education will not diminish. With the world becoming even more competitive, a basic degree may become the minimum requirement in the future. When more students are in tertiary institutions, the demand for accommodation will continue to grow.

Let’s be realistic on one thing though. Renting to students may not provide a quick road to untold riches. However renting to students would provide a smooth road towards continuous and stable returns. It’s just another option which one could consider. Happy deciding.

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Personal Finance 101: Investing into fast growth companies and ‘normal’ growth companies

I love reading about cars but I prefer buying properties. 😛

Yesterday, I posted something I love to read but is still unwilling to spend money on it; cars. I wrote about the state of EVs, which brand is on top, which brand use to be top and what are the brands which may be the future. There is also a chart for upcoming ones too in the top 10 list of brands which are now selling EVs. It used to be a lonely affair for one major brand yeah; Tesla for EVs. Today, we look at both EVs and one particular company which is the number 1 car seller in the world and yet is not even within the top 10 for EV charts.

Fast and Furious versus Slow and Steady

There was a time when everything looks like an opportunity to show that I could do it. For example, easily climbing over the gate of my parent’s house when I forgotten to bring the keys. For example, riding the racing bike as fast as I could to stay ahead of a Sea Games cycling team and nearly fainting at the end of it. There’s more but you get the idea.

These days, it’s more like, okay how do I get over that drain gap safely? Or even just let that speeding car pass me lah. I am not rushing anywhere anyway. This is also the case for investments too. Just need to remember, there are so many younger people and that’s what’s driving many new trends too. So, understand and absorb all sides so that we could make a better decision based on what we really needs. Everyone is different by the way.

What about TESLA’s shares then?

Usually, when a company is growing super fast, it may be putting all its financial resources into growth and thus is unlikely to iffer much dividends. P/E ratio may also be high signifying that people are buying into its shares at a premium because they believe the growth would continue in the near future. This is also common in the technology secotrs where the growth could be explosive. In the car industry, EV brands are considered the future.

Info source: google.com as at 27th April 2023

What about Toyota’s shares then?

If we look at typical traditional car brands like Toyota, then we will see that the reasons to invest will be different yeah. Toyota’s chart right after Tesla’s below. Dividends are offered to investors and the P/E ratio does not show a super high growth phase anymore. Growing is a yes. Growing super fast is no longer a yes. Toyota continues to sell the most cars in the world even if they are not within the top 10 brands selling EVs in the world today.

Info source: google.com as at 27th April 2023

I do not own stocks of both companies yeah

I also have no idea which is a better one to buy too. There was once when I was little crazy and bought one counter non-stop. I have no idea if that’s a good idea or not but then I figured I could afford the loss if indeed my aim was wrong. Fortunately, it was fine but I did not keep the shares long enough. That’s a regret for me until today. This is why we should decide based on our own perspective and then just accept whatever happens because it’s our decision.

Cheers.

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Stop talking about ‘fake’ competition. Build a profitable one please.

This is not a property investment related article. I am writing because too many people have the wrong perception of what’s a competitively profitable company and what’s a famous and likeable company. Two totally different things yeah.  I was chatting with a close friend a few says ago. She was sharing with me about her experience in Singapore
with co-working spaces.
 She’s a marketing manager with a public listed developer company here in Malaysia. She shared with me that many of these Singaporean co-working space operators are now coming into Malaysia strongly. I told her that this should be the trend because the market in Malaysia is bigger and definitely can provide these operators with bigger profits too. They are coming in with funds and experience and this augurs well for co-working spaces in Malaysia. The more competition, the better. These co-working offices help many potential entrepreneurs to lower their cost of operations and provide them with a lot of networking opportunities too. Think about it, even within the same company, when different departments work together, the results are often much better than what one department could do. In fact this is why there are so many business networking meetings organised by different organisations every week.

Then, we spoke about the potential for the weaker co-working space operators to lose money and later has no funds to keep improving and marketing the co-working office. The stronger ones would start getting more popular and get a larger share of the pie and would be able to expand and improve their offerings too. Plus, with more reserves, they can even lower their prices further and kill all those on the edge operators first. She said that perhaps new investors would then pump more money into these loss-making operators to sustain them? I reminded her that regardless of the company, no investor should continue to pump ever more money into a company which just could not breakeven after 5 – 6 years. Not to mention some world famous brands which are STILL losing money after close to 10 years and keep receiving ever more money and valued ever higher every year as they lose ever more money. Well, crazy but true.

For these loss-making companies which could still somehow convince investors to pump more money, be reminded that they are NOT being fair to all other competitors which are in the business for profit and are struggling to fight with these deep pocket companies which does not seem to mind subsidising their offerings to the extent that every time people use them, they lose money!  Real example. Some promotion which tells you that if the travelling distance is less than 4km, then the fare is ZERO.  Seriously, when it’s ZERO, someone has to pay for it right. And they are competing against companies which MUST charge because they could not afford to lose money. Well, guess which company is actually losing market share while somehow, the loss-making company kept getting heaps of praises.

I have been working for nearly 20 years of which 16 years were in online or online related industries. All the companies I work for strive to be as effective and efficient as possible and earn a low profit margin but aiming to have a lot of customers. We do not keep subsidising our services to kill our competitors. There’s not much strategizing needed for these strategies. Just keep convincing more investors for more money and continue killing more genuine competition until you are the only company left. Then, charges can GO UP… Well… some may never reach this stage. They have just created a fake competition. Someday, I hope to do carry out an equity crowdfunding. My aim will NOT be to get money to subsidize my services. It will only be make my company more effective and efficient and be profitable. Cheers.

written on 9 Dec 2017

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Unit trust is not just buy and forget

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No, No, my family does not need me to invest in property

I accepted an invitation for a public talk to share about my property investment experience recently. I think the organiser invited me because I do not represent any developer or real estate agency. I was speaking as a full time employee who loves property investment and believes everyone could the same. Someone who believes that property education is key to a vibrant property market and a fulfilling life.
Continuous learning is key to successful investment.

I started my speech by ruffling some feathers I guess. I said, ‘investing and gambling are two very different things.’ If we want quick profits, go gamble. Investment is always long term. Many people nodded their heads. Read here:
Why rush? Why not immediate, since you are gambling
 When I shared about how property prices would always ‘run’ faster than our salary increment, even more nodded their heads in agreement. It’s the truth, there is just no way that
salary increments would ever catch up with property price increases.
 I think many employees understood this fact and is aware that property investment may be the only way they would be able to retire comfortably.

I then shared that it is our responsibility to ensure we have enough investment returns so that we can treat our loved ones better, I think majority nodded their heads. I have heard this reasoning way too many times. “As long as I have my family, I do not need more money.” There is really nothing wrong with this statement BUT it’s best that we pray that none of them would ever fall sick and that our children would get full scholarships all time. Many more real life examples but I hope everyone gets the picture. Money is nothing more than an enabler for many things that we want to do for our family and loved ones. Do not just love them, provide sufficient ‘coverage’ for them during times of need.

Remember, even if it’s not for ourselves, we must still understand how to invest. Too bad, nothing is certain these days and I read online about the potential for a major international bank to cut their number of staffs globally soon. In fact so many in the oil and gas field were retrenched for the past many months. Still do not wish to invest in properties? Then, invest in something else. Remember,
doing nothing regardless of the market situation
 is not considered a strategy. Assuming, we have no loved ones and we love the world, having more funds would allow us to do more for the world. Your loved ones, your family and the world need you. Start investing right, today.

written on 16 Apr 2016

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Investing in property – the basics (updated)

There are a lot of investments you can do. From FDs to Unit Trusts to Insurance savings plans and even opening your own company, the choices are aplenty. What about property investment? Let me share my reasons why property investment is attractive and applicable to me, who’s working full time, has a lovely wife and a mischievous baby daughter.

Passive income. People can shout all they want but the truth is, there are still a lot of properties available for RM250K to RM300K. The rental is still acceptablelah, even if the yields are notes crazy asa yesterday. There’s potential capital appreciation too,in a few years time. However, you need to have around 15% downpayment for the loan, lawyer’s fee, etc. Depending on how old you are, this is sufficient to cover your mortgage and gives you a positive yield no matter how small this yield may be. If I can, I would like to continue buying to rent out. The reason being after a while, this becomes a passive income for you. The capital investment that you do would most probably be once, apart from the maintenance but the rental will only increase over time and the property will only increase in price over time. If you are able to rent out for a few years, you would notice that the rental yield becomes not just better but GOOD.

Family planning. Don’t tell me you want to buy a property for your kid in the future. Do it now. Chances are when they are old enough, you can either sell the house for their education or even give them the house as a gift. Even if a property is worth just RM300,000 today and rising with just the same rate as inflation, it will more than doubled when you sell it later. If you are staying in a landed property today, when you are older and your kids are no longer staying with you, it may be wiser to move to condo for easier maintenance, security and convenience. By then, your current landed property would be worth so much that after you sell and bought a condo, you would have enough for your retirement. Thus, property buying serves both your kids and even your own ‘ageing’ planning.

Great investment. Honestly, if I was richer or borrowed from my parents and bought double of the properties I bought and sold off everything today, I could now be sipping coffee and reading a book beside my swimming pool. Yes, it is true. However, it is ok, I may still retire earlier by 5-10 years perhaps than the official age of 56. You can save a lot of your income by not going to Starbucks so often, buying a Saga instead of Vios but if you take the ‘save your way to riches’ route, it will take you a very long time. Surely you will get there but it will be slow. You can also borrow huge amounts of money and drive up to Genting and perhaps you may win big or lose it all. With property investments though, the route is faster, more fun and ‘surer’ than many other investments because property is after all, a human need. That’s why they call it ‘home sweet home’, ‘home is where the heart is’ and when you feel tired after a full day of working you call your wife and said, ‘I wanna go home’.

Caution. Property investment is however not without any risks. You must have read sufficiently to be knowledgeable about your buy. You should do a thorough evaluation before buying. There’s no such thing as simply close your eyes, point and buy. The last thing is to listen to your friend. If he is right, you are good. If he was wrong, you have just lost a friend. Secondly, no matter how bullish you are about property, you must have your fundamentals right, sufficient savings in FD, coverage in insurance and work hard in your current job.

There, back to three basic reasons and one little caution on why I love properties and perhaps the reasons for you to start loving properties too. Just be reminded, there is no super fast route in property investment. On and off, you may hit a jackpot but that is just pure luck. The fortunate thing is, ‘luck comes to those who work hard’. 🙂

updated on 8th March  2014

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Investing in Property with Charles, kopiandproperty.com

Investing in Property with Charles. Simple title yet I was asked many questions especially related to millennials too. By the way, no selling yeah.  Just personal opinion which I think may just be applicable to many working professionals here in Malaysia. I have found property investment to be rewarding but a point to note is that this is not something we buy because someone told us to buy. That may be a wrong decision which will set us back many years. Read more prior to buying. At least you could do sufficient due diligence.

I was honoured to be featured in Episode 41 of My Personal Finances YouTube channel.  Please do subscribe to their
FB channel here
if you are really interested with everything about personal finance. I think they have lots of awesome resources including articles, videos and sharing of other personal finance tips. It has over 7.3k followers too. I have
personally learnt many things from Stev Yong,
 the founder of My Personal Finances too.

Please do view the video here yeah.

Happy viewing this show yeah. Investing in Property with Charles. Please do share this if you find it informative and useful especially for millennial property investors.

Photo by Snapwire on
Pexels.com

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Investing to grow our wealth with low management fees and low entry cost?

Is stock investment scary for many? I think it is. According to a survey of Americans, 61% of all adults think of stock investment as “scary or intimidating.”
The survey here.
That’s a pretty scary survey result I think. 61% is a very high number. I could not find a similar survey done for Malaysia but I remembered I asked 12 friends here in Malaysia if they are investing in stocks and the answer is only 2 are. The rest are either not interested, had lost money or thinks it’s just too time consuming. They do not have time to keep watching the stock market.

By the way, I said, ‘Invest.’  I did not say trade stocks yeah. Investing simply meant we do due diligence on many potential stocks to buy, identify one for the long term, continue buying it on a monthly basis without fail and after a couple of years, we get good returns on investment. With a good company, the investment returns are definitely higher than the fixed deposit.  Okay, assuming we are really busy and have no time to do due diligence on the stocks which we should buy, then what could we do? Well, we could call up some of our friends who are selling unit trust and tell them that we want to buy. The only issue is, which is the best? Will our friend be a long term contact for our investment? (Most unit trust agents do not last very long actually. Two of my unit trust agents left after 12 and 24 months respectively and my unit trust were then transferred to  a stranger…)

Or we
could read about how Stashaway
 is helping you to invest. StashAway is the intelligent wealth management platform that’s designed to build and protect your wealth, whether that’s RM5,000 or RM50 million. Their motto, “Investing like it should be.”

Stashaway made its mark as Malaysia’s first digital wealth manager when it secured a capital market services licence from the Securities Commission Malaysia (SC) in November last year. It started from Singapore and in Malaysia, it has already secured over 5,000 registrants within the same month it was launched. StashAway co-founder and CIO Freddy Lim said the company enables investors to focus on their long-term investment goals instead of reacting to market and media noise.

He said, “Firstly, StashAway offers individual investors portfolios that are tailored to the appropriate level of risk they should take based on their financial situation, investment horizon and risk preferences. Secondly, as the technology that runs StashAway’s intelligent investment framework makes decisions based on macroeconomic data points, investor’s asset allocation is based on economic fundamentals and not noise created by financial markets.”

Stashaway offers advantages such as low entry cost,
management fees set at 0.2% to 0.8% per annum, and no sales charges and minimum balance, StashAway is providing an affordable alternative for the public looking to gain access to financial markets.  The platform’s users can choose from 31 different portfolios with the most conservative exposed to 55% protective assets while the highest risk portfolio has a 100% exposure to growth assets. Investments are concentrated in fractional shares and exchange-traded funds (ETFs). Just in case you want to know how they help invest our hard earned money,
read here for a better understanding.

Let’s be very objective here yeah. This is not a scheme where everyone thinks about earning double digit returns per year yeah. I think Stashaway offers all investors another avenue to invest some of our savings for better returns. Again, it’s based on the portfolio which we are most comfortable with. When we look at the unit trust for example, if we are very aggressive with an equity type of funds, we may be gaining or losing a lot on paper in a short period of time. However, as we continue the investment via cost averaging, we will soon see a more stable kind of return because fluctuations in the stock market is a certainty.
 Happy investing yeah. Here’s the site again.

article written in
collaboration with Stashaway.

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Advantages of investing when we are younger

I am 44 this year. They say the life of a man starts from 40. Ahem… Haha. Every time people asked what would have happened if I could go back 20 years, I replied in terms of property investment, I would have have purchased more properties than today but in terms of working life, I am grateful for the opportunities given to me and the many coaches and mentors I have then and now and I think for this part, I want to just have the same. I am grateful. Depending on our age, it may yield different advantages.

Any age under the “Too late” category?

Musang King season is over or maybe on the way back depending on when you read this article. Actually, when it comes to durian, many wished they had thought of planting Musang King durian trees over 20 years ago. If they did, they could have earned many thousands of ringgit from just one tree every season.
One tree could yield up to 200 durians (when they are much older okay and the planting was done right)
 Now imagine if they had just 16 healthy and productive Musang King durian trees? How many durian trees could be planted on a 1 -acre land?
1 acre could have 16 durian trees planted. Some readings here.
 If you plant today, you are 10 – 15 years away from starting of a good harvest.

Why younger means better? Stretch It Longer

What about property then? If we are young, it gives us an advantage over older buyers. One major reason is because our monthly mortgage payment could be lower as it is stretched over a longer period of time. Another important reason is because we would have time to upgrade a few years after our first property and could then start our property investment journey on a firm footing; one home for own stay and one for rental income. Perhaps a calculation as below showing two buyers; one a 30-year old and another a 40-year old. Both buying the same RM400,000 property.

30-year old can pay over 35 years.

40-year old could only pay over 25 years

Savings? That is EXTRA for investments (if you did not spend it away…)

Difference is over RM300 and what can this RM300 do? Well, every year, that’s RM3,600 which could have been reinvested into the stock market for extra dividends and that potential price capital appreciation too. By the way, just 10 years and this RM3,600 a year becomes RM36,000. If your investment worked, the money could even double to RM72,000.

If I am younger, can I afford a mistake? FATAL mistake is still fatal.

Let’s understand that if we bought the wrong property, it will still be a huge mistake. Difference is that younger buyers may just have time to recover many years later while older buyers would been disadvantaged versus these younger investors. So, do due diligence and not just rely on some Facebook free seminars yeah. I tell you again, if I know of any SURE-WIN properties, I will just buy and wait and maybe tell all my good friends and siblings, there’s no need to share with the world unless I also have profits from it…

Should I stop investing if I am older than 44?

No quick answer but if you are already a multi-millionaire at least and your are getting a five figure returns in interest every month, I guess one could just choose to stop working and read a book or something. However, if we are still working for a salary every month and if we stop working, we would not be able to survive till we leave this world, then investing is compulsory. Better late than never as they say. It does NOT need to be into property as well.

Happy understanding and all the best.

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Investment is aimed at replacing our day jobs?

My ex-CEO, Mr. Mark Chang the
founder of JobStreet.com (he sold JobStreet.com many years ago)
told us that if we have a job which we love, then we no longer feel that we are working but we would instead love what we do every day. Briefly, we jump out of our beds to go to work everyday and not kept delaying getting out of bed to go to work everyday and then dread it when it comes to Sunday and we have to see our bosses’ face on Monday morning! Haha.  True then and will still be true for a long time to come.

If we somehow do not like our job, then what happens? Many friends have told me that they hope that their investment income could replace their monthly salary. Once this happens, then they could resign and enjoy their lives while money from their investment income continues to flow into their bank account every month. Some say that property investment is the best way to replace our monthly income. I do not wish to doubt what is being said and in fact it does not even have to be property investment.

However, what I would like to add is this. The investment is needed NOT because we hate our jobs. The investment is needed because it will give us more flexibility in deciding what to do in the future. For example, if we had just sold a property at RM640,000 and we bought it for RM247,000 many years ago, then the extra RM400,000 or so will give us some flexibility to resign and think about what we intend to do next. We could even resign first instead of trying to go for interviews when we are still working full-time…  RM400,000 could not last forever yeah but it will be a start to many positive things unless of course we spent all the money on a new car, maybe. Haha.

Assuming we could still hold on to our jobs because our bosses are still tolerable, then that investment will give us more assurance to speak our minds out instead of holding back every time our bosses say something which does not make any sense at all! Who knows, when we really give him a piece of our mind and it makes perfect sense to him, we may even be promoted and given higher responsibilities with higher pay? However, without some assurance from our investments, most of us would just swallow everything our bosses say… right?

There are actually many more reasons to invest but it is perfectly okay not to use it as a replacement to our day jobs too. How about just keep improving ourselves at work so that we continue to grow our monthly salary while at the same time growing our wealth via investments? Well, higher salary also meant more money to invest too, right? Happy working and may everyone be successful at work and in investments too.

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