Elon Musk wants freedom. Selling his homes.  Do you want your freedom too?

Do you know who is Elon Musk? He is the founder of Tesla and SpaceX. You have to know that Tesla is a manufacturer of electric cars. SpaceX has a vision of one day transporting people to Mars. One earlier article about how affordable it is to one day travel to Mars from Earth.
When Earth gets too expensive, let’s move to Mars
  So, yea, he is quite a famous guy who has a networth of US$39.6billion (RM170 billion). Recently, he said he wants “freedom” and that’s why he intends to “own no house.” Now, let’s have some idea how much property he has, shall we?

Article in forbes.com
    One of the home which has appeared for sale is that which once belonged to actor Gene Wilder. It appeared on Zillow for sale with an asking price of US$9.5 million (RM40.9 million).   The description of the house says that it was the former homeof Gene Wilder, best known for playing Willy Wonka. The property faces the Bel-Air Country Club Golf Course.

Another of his homes is also a For Sale By Owner on Zillow and this is a 16,251 square-foot French Chateaustyle six-bedroom, 11-bath home in Lower Bel Air. It has an asking price of US$30 million( RM129 million). It also has a two-story library, theatre, wine cellar, pool,fruit orchard, lighted championship tennis court and a 5-car garage too as some of its amenities. Bel Air has some of the highest-priced homes in Los Angeles and has long been a celebrity home base. Please do read the full article for more details.
Article in forbes.com

Elon Musk is 48 years old this year. And he wants his freedom. So,he has started to sell his homes. Any kopiandproperty.com readers here thinking of the same thing? Selling all your properties so that you have your freedom? Okay, perhaps not during current COVID-19 situation but let’s say after COVID-19 pandemic? For those who are thinking the same, congratulations, you have reached Elon’s level of achievement.

As for me, this ‘freedom’ thought may also be on my mind but that would be after I retire and may just want to do more travelling. If that comes true, then yeah, I do not think I want to own any property. Let me be free by then. For all the rest, a better time to stop owning a property is after we retire. Sell all the properties and just stay anywhere you want.  Before that happens, please keep investing and make sure property is one of it. Happy understanding and do go and test drive a TESLA.  I heard it’s exhilarating.

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Embracing technology will make RENs better. Actions help a lot.

kopiandproperty.com was invited to attend
MAREC 2018 (Malaysian Annual Real Estate Convention)
 as a media representative. The theme was very apt not just for real estate but for all industries. “Embracing Changes with Innovation.” It’s from 2nd – 3rd March @ the Sime Darby Convention Centre in Kuala Lumpur. I know some of the speakers personally and one of them gave a very interesting talk on Day 1. He is Sr Adzman Ariffin who shared about “How PropTech is transforming real estate activities.” Some of the things he shared include usingGoogle Street View to enhance consultative skills of RENs, drones to help with a better overall view of an area, SISMAPs, Periscope houseviewings, Speedrent, WeChat, Igloohome, Mhub etc.
Sr Adzman Ariffin is the CEO of Exastrata Sdn Bhd
 and I know him as a humble and yet entertaining guy. His talk on the first day kept everyone’s attention and kopiandproperty representative jot down a lot of good inputs.

During the Q&A session, someone asked him if all these Proptech meant that sooner or later, real estate negotiators (RENs) will be out of job. He responded very well and thorough and the person seems satisfied. Let me also provide my personal answer as well. The reason why RENs are paid a professional fee is because the sellers and the buyers expect a professional service. If RENs are only to open the home and then stand there while the buyer tours the house, then these RENs should be out of job very soon. Are RENs able to provide consultative service? No one expects them to be property experts but surely the below should be something the RENs must prepare, especially with all the available proptechs today, whether free or not free.

RENs representing the buyer (only a few examples)

1. What’s the typical home prices for the area. Are there cheaper options and why are they cheaper? Are there more expensive options and why are they more expensive? (For example, I bought my Kelana Jaya condo because the agent told me about the typical rental, about the competing condo prices of the two projects beside and one opposite as well as the fact that I would be saving over RM15,000 just from the kitchen cabinet alone…)

2. What’s the typical jam like, on a weekday morning, from the property to the office. (Please ask in advance where the potential buyer’s office is!)

3. The directions of the unit, will it be hot, what are the possible things to be done to keep out the sun etc.

4. How much savings would the buyer be getting with the existing renovations, electrical goods etc.

and more… (Above answers, RENs are already able to get some ideas by using technology. From brickz.my to GoogleMaps and even to understand some of the typical renovation costs and prices of electrical goods?)

RENs representing the seller (Only a few examples)

1. What’s the current prices being offered in the market. Is the price offered realistic? If not, what are the potential selling points, how can the owner make the house look better? (For example, within few days after I repainted my condo upon the advice from an awesome REN, my condo was sold. It was NOT sold for 2 months before that even with viewings.)

2. Ask the right questions to get answers from the owner, some of the advantages that the owner has enjoyed while staying there. These may not be available online….  (Favourite mamak stall, super cheap pasar pagi etc etc…)

3. How much was the renovations, electrical goods, have a list for all these so that the REN is able to show to the potential buyer.

And more…. (Most of these answers, RENs are able to get help from proptechs…)

PropTech should be embraced by all RENs. Actually even for some which seeks to replace RENs, this will work as soon as the current RENs retreat back to become just someone with a key to a property. If I am a potential buyer and I get a
very helpful and consultative REN,

I will recommend this REN to friends and every time I need to buy one more property, I will seek out his / her help first. When we look at the real estate industry, don;t we just wonder why there are top performing RENs year after year and why there are RENs which could not survive even for a few months? It’s not proptech that will replace the RENs. It is the actions from the RENs themselves. Ready to earn more $$ or well, just trying a new job? Cheers.

written on 3 Mar 2018

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EMCO in Selangor and KL yeah. What’s allowed and what’s not?

I thought everyone knows about this news. I also thought everyone realised that it’s quite important to know that vaccination numbers are going up (6000 plus for the past 3 days despite 5000 plus on average for the month of June) but the number of new infections are still persisting, so we should slow it down further. Makes logical sense, no?

To those who still THINK nothing as changed since FMCO, please do note that FMCO ACTUALLY started 1st June.  The number of infections during the time was 8,000.  Today, we are at 6,000 plus for the 3rd day.  We have been at 5000 plus on average for month of June. So, now with the EMCO, they just want to push the numbers down, please just stay home lah. Help our medical frontliners a bit. They work whole day, we just need to stay home whole day.

The reason for this article? My friend just said, “now you cannot even go out after 8pm unless you have emergency.” My friend ah… after 8pm, if you have no emergency, WHY DO YOU WANT TO GO OUT? This is still FMCO period… okay? And yes, now it’s going to be back to EMCO by 3rd July 2021. So, technically, can still go out tomorrow and I really hope no one goes crazy again in buying things because the markets REMAIN OPEN throughout EMCO.

Article in thestar.com.my
  Factories producing food items are allowed to operate.  For example, rice, bread, sugar, cooking oil, wheat, fresh milk, baby formula, medicine and face masks. (From me, the rest please do not operate…)

8pm curfew will start EXCEPT for emergencies.

It’s back to ONE passenger inside taxis and e-hailing vehicles.

One member of a household (does not need to be ketua rumah okay) can go out to purchase essentials within a 10km radius of their homes. (From me, please just buy at the nearest kedai runcit outside your house, go so far for….??)

If you have vaccinations appointment, please do proceed. Remember to show your MySejahtera application when asked.

Airports and harbours will be allowed to operate as per normal.

Public transport will also be allowed to operate at a 50% capacity.

Only essential services such as utilities, sewage and cleaning can operate from 8am to 8pm.

All employers not under the approved list MUST not ask their staffs to go to the office.

Only take-away or drive-through services will be allowed at restaurants.

Petrol stations will be allowed to open from 6am to 8pm, however, those along highways can run 24 hours.

Wholesale markets are allowed to operate from midnight to 6am. Pasar tani (farmers market) and markets can operate from 6am to 2pm.

No sports, social and recreation activities are allowed throughout this period.

Thank you thestar.com.my for this good reference. There are other things in the article too.
Please read here: thestar.com.my

My advice?

Just follow lah. This is really not the time to give this question and that question. If you have vaccination, if you have emergency, you will definitely be allowed to travel. Period. Otherwise, stay home and let’s see the number stabilise again in 14 days. Hopefully within these 14 days, we manage to jab another 300,000 x 14 days = 4.2 million jabs!  Yes, I do think my second AZ jab will be within July since it’s been announced that the dosage period is now 9 weeks and no longer 12 weeks. On behalf of all Malaysians who intend to follow, THANK YOU to all the rest who were still thinking of going out after 8pm without any emergency.

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Financial Management 101? Start with Emergency Fund lah.

Let’s talk about Emergency Fund today. Stop all these invest into whatever to earn whatever super duper returns thoughts first. Are we actually prepared if we suddenly lose our monthly income today?

Some say they want to retire by 35. Usually the younger ones. Or the ones who think they are still young. They call it Financial Independence, Retire Early a.k.a as FIRE.
Article about FIRE here for reading.
A slightly older group says that they will retire at 60 so that they could still enjoy what they wanted to do as they are still fit enough. Which group are you? I am the group where I will
work, save, preserve and invest. Here’s that article. Article about me here.

Photo by Pixabay on
Pexels.com

However, if I were to just tell everyone this super important starting point, it is the below:

EMERGENCY FUND, do you already have it?
 Before 2020, most people would say that emergency fund should be 6 months of our current monthly pay.  The reason is because in case we lost our jobs, then at least we could continue to pay all our bills for 6 months while we look for the next job. However, after 2020, I think everyone would suggest 12 months at minimum. So, I would also advise that everyone should have 12 months worth of emergency fund.

Calculation example:  Monthly Salary x 12 = Emergency Fund

Remember, it is very scary to see a depleting account balance when we lose our job and is struggling to find a new one soon enough.

EMERGENCY FUND, is it SAFE?
Let me direct. Every month, when we receive the pay and we withdraw the money and put into our wallet, we will feel RICH. Everything seems a good buy. Towards the end of the month when the wallet is already super thin, suddenly we are able to refrain from buying. This is why the emergency fund must NOT be saved or kept in a place which is easily accessible by you…  Be serious yeah. Fixed Deposit can be a good option yeah.

EMERGENCY FUND, but… it’s emergency for me everyday.
 Sit down, write down all our expenses for the last 7 days. Ask ourselves this question for all the things.

i) Could I do without this?

ii) Could I find something cheaper?

iii) Could I delay buying this?

If the question is a Yes to ANY of these questions, then just start doing it the next week please. Many times, just these savings along would already help us tremendously.

EMERGENCY FUND, statistically speaking.
32% Malaysians could only cover 1 weeks’ expenses if they were retrenched (read here).

 The ‘strongest’ country in the world,
40% of Americans could not cover an emergency expenses of US$400 (read more)
  Meanwhile in the UK,
20% of Britons have no emergency savings
.  In the country many believe is a good example to follow:
2/3 of Singaporeans do have enough savings to maintain current lifestyle beyond 6 months if they lose their job (read here).

Conclusion

So, this issue of sufficient emergency savings continue to be a serious issue during emergency. Move forward quickly if you have a job and is able to start saving albeit slowly. That emergency fund will surely start building up before you need it. Hopefully we do not need it and this emergency fund becomes that extra money we suddenly found out we have in the future. Are you starting today? Happy saving yeah.

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Emerging Trend or Desperation?

Did you notice that advertisements by property developers on television (TV) are increasing? Especially during the Chinese New Year period of 2015? There used to be just one name a few years ago. This year, I have counted 5. Eco World, SP Setia, Mah Sing, R&F and Country Garden. If anyone saw more than 5, let me know. If advertisement attractiveness is the only reason to buy, out of these 5, I think I will buy Eco World. Haha. Of course some may prefer others because advertisement likeability is always a personal preference. Oh yeah, no need to ask. I own no properties from any of these 5 developers. Perhaps in the future. Of course there are a few big names missing from the top 5 above. Perhaps next year, we will see 20 different advertisements.

Is this an emerging trend? If this an emerging trend, I think the property prices may have to also be adjusted upwards once more developers jump on the band wagon. The bigger developers, by virtue of their gross development value (GDV) would be able to afford these grossly expensive advertisements but for the mid-tier to smaller developers, these TV affairs are very ‘painful’ especially if their TV advertisement has to be shorter, cheaper and less attractive and happen to be advertised at the same time slots as the bigger ones. Seriously, just let the bigger ones do it and I personally do not think TV advertisements are more effective than any other medias except that it gives the idea that the developer a good and premium branding.

Do you see this as an act of desperation? Especially coupled with the current slowdown in the property market? Perhaps they have felt the effects earlier due to their GDV size and just wanted to add another promotional avenue to all their existing medias? I have not yet personally read or heard of any acts of desperation though for some smaller players, I know that some of them have begun to offer very attractive discounts and packages. TV adverts are thus not an act of desperation in my opinion. Their GDVs happened to be huge and the usual marketing budget is able to pay for TV advertisements and they are just taking advantage of it.

As a buyer however, nothing beats the actual site visit to see with our own eyes and touch with our own hands. A key theme moving forward would always be affordability because the prices has risen way faster than income for the past many years and this cannot continue forever or the market may crash. As for TV advertisements, just enjoy them. Decisions to buy? Please do not make your final decision by referring to just a very attractive TV advertisement. Happy watching and Happy Chinese New Year!

written on 24 Feb 2015

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Financial news: Employers should contribute 20 pct for employee’s EPF?

Minimum wage, Living Wage and EPF contributions are the three important things for the employees

“Malaysia increased the national minimum wage in May 2022 by 25 percent from 1,200 ringgit (US$273) to
1,500 ringgit (US$341)
, however, employers with less than five employees were granted an exemption to the hike until January 1, 2023, before being extended again to July 2023.”
(Full article here: aseanbriefing.com)

“The government is studying a proposal by Bank Negara Malaysia (BNM) to implement a living wage, says human resources minister V Sivakumar. Sivakumar said the BNM 2017 annual report had proposed a living wage of RM2,700 for single persons living in urban areas, RM4,500 for couples without children, and RM6,500 for couples with two children.”
Full article here: freemalaysiatoday.com

Minimum wage means all employers must pay this to their employees. The amount is now RM1,500 per month.Meanwhile Bank Negara Malaysia in a study has proposed a living wage of RM2,700 for single persons living in urban areas. There is a big gap between the minimum and the living wage. I think this will continue to take a lot of study, discussion before any further changes to this gap can be addressed.

Meanwhile, there is now a proposal for employers to contribute 20 percent towards employee’s EPF. Yes, you read correct. 20 percent.

Article in thestar.com.my
   Datuk Seri Anwar Ibrahim said that the proposal by employees for employers to contribute 20% towards the Employees Provident Fund (EPF) will be discussed.

“We have received such a request but have yet to discuss it. It will be brought to the Cabinet for discussion.”

Presently, employees contribute 11% of their monthly salary to the EPF, while employers contribute another 12% or 13% of the person’s salary according to the statutory rate.

Anwar was asked to comment on Union Network International-Malaysia Labour Centre’s 12-point request, which included the raising of employers’ EPF contributions and the retirement age.
Article in thestar.com.my

20 percent contribution is possible IF all Malaysians are talents the employers need for their globalised business

The world is today a small place because it is not interconnected and today we could make payment to anyone in the world within a short period of time. (depending on which country you send to). We could buy something online from a country we have never been before within minutes. This is why the talent workforce woul be anyone who could do the role and not necessarily someone within a certain country. Thus, employers would want the best talents possible as they navigate the world to expand their business. The question is always are we ready?

If we are not ready and we push the current local employers to pay an amount they could not, this will just cause them to close down thier business. People lose jobs. The global employers who are here today, are they prepared to do so? If they do not have any other choice, they will have to pay until they have another better choice. When that happens, people lose jobs. What about potential new employers intending to set up base in Malaysia? If they have a better choice elsewhere, they will not come. People do not have more jobs to choose from. I hope this explains super briefly.

Upgrade the workforce. The salary will soon follow without the need to compel. Think about it. If we are a talent and our employer does not appreciate us, we can just leave for another job. Happy understanding.

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So many empty units, why prices stayed the same?

Whenever we drive past some newer condo projects these days, many times the number of occupied units might just be 20 percent or 30 percent. True? I think this is true not just within the Klang Valley but also Penang island. It includes one of my old friend as well who bought a condo unit in Penang but is not rushing to move. Reason is because he has yet to get the offer that he can accept for the place he was staying currently. He had hopes to sell his
secondary apartment with a higher price
 but transactions are fewer and buyers are much more cautious these days. This would be just one of the reasons.

As for the other empty units, surely the buyers bought because they wanted to sell and get profits, right? Cash in as soon as key is handed over, right? Since the units are RM500,000 or more today, how long can they hold? Actually, they can
hold for quite a long time
, as long as they do not lose their job. Remember how tough it was to borrow money for home loans from banks? It was very stringent. Thus, those who were able to borrow would have been those who have shown that their salary could support that unit they were buying, whether or not they own other units. Due to this, many may choose to stay put and wait for better times.

Would they let go? Based on the prices they paid a few years ago versus the current price, I think majority of everyone would not have any losses when they sell. Maybe less profits than what they expected but certainly not losses. Yes, another major reason is also because of the
Real Property Gains Tax.
 Many felt that the tax they would be paying is too steep. RM100,000 profits would mean up to RM30,000 tax! Read here:
Scared of RPGT but willing to wait and risk?

However, if they sell today, what would they be investing in? Another new property which is priced around the same as their current property and wait for a few more years for completion? Actually, they are a little worried that the same situation may happen again, or worse. After all, they bought during boom times and currently, everyone is forwarding negative news. Buy today may mean by the time they can sell, Malaysia is already in a crisis?

This is the major reason why
transactions are falling
. Sellers do not have another investment that they want to pursue yet. It’s not that clear. Buyers meanwhile are cautious. Who dares to buy when everyone they know is saying that a financial crisis is about to happen. There are just too many what ifs. Selling and enter the stock market of today? The ‘everyday falling’ share market? Haha. Yes, I think the transaction numbers would continue to fall until and unless the negative sentiments start to change for the better. My advice? Sell if there’s a good enough profit. Enjoy some of the profits with your loved ones and use the remaining for a secondary property which can be rented out easily. Think longer term and everything should be just fine, at least that’s what I wish and hope. Happy waiting for better times.

written on 9 July 2015

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En bloc sales, property market and maturity readiness

Recently, I read an interesting article by Chris Tan of Chur Associates. I have listened to him 2 times, both times I felt that his presentation is easy to understand and he is indeed a passionate guy in the legal aspects of real estate. His recent article touched upon en bloc sales and he gave the example of both Hong Kong and Singapore and how en bloc sales are done in both countries. En bloc sales, in one sentence means, ‘when majority in the block wants to sell, the minority cannot block the sale and this is legalised. It’s main purpose it to ensure the increase in supply of properties in areas where more residential properties may be needed. For example, instead of a 20 level condo building, it can be demolished and a 60 level building be built instead, with more modern facilities and thus giving greater value to more residents.

This has happened in Hong Kong in 1990s and Singapore in 1999. Chris said that perhaps this would be the way to go for Kuala Lumpur due to the continuous urbanisation as well as the need for more affordable housing. On paper this looks viable and I would love for this to happen too. I support anything which boosts the real estate development because this is the correct way to go instead of always shortage of supply and too much increase in prices within a short period of time. In fact I spoke to my Malaysian friends working in Singapore about this before many years ago. I said, one of these days, surely Kuala Lumpur would have en bloc sales. They are actually not that agreeable to en bloc sales but I told them some of the benefits then and they sort of said, they will see when it comes. Few years later, I read about this article by Chris Tan. 🙂

 If we look at Hong Kong and Singapore, there are actually no such thing as affordable properties. In terms of pay, a Hong Kong retail sales person earn 6 times or more than Malaysians in similar job. In fact a typical teacher’s pay is around RM10,000 per month. You can see the huge gap with us. Singaporeans earn roughly 3 times more due to exchange rate. Thus, in terms of earning power, both countries can be said to be well ahead of Malaysia. However, when we look at the most expensive asset that all of us would be buying in our lifetime, the cheapest properties in Hong Kong are at least 10 times more expensive than Malaysia and only between 400-500 sq feet. In Singapore, a typical HDB flat is also around 8 times more expensive. Thus, you can see that in terms of available choices, KL does have more affordable choices. Just go to any online property sites, search for the 700sf apartments. I do not recommend the low cost flats. The choices for these older properties are still around RM200,000 or lower, depending on areas. In fact, even in an island like Penang despite all of its expensive condos, you can still buy a 700sf apartment for less than RM250,000. Yes, these apartments may even come with swimming pools!

Maturity readiness. When we look at the readiness, I seriously doubt so. I think the minority of people who oppose to such en bloc sales would not just use legal means but might even resort to means that is unimaginable. Think stopping the tractors from going in to demolish the building. Think about building their own walls to stop the trucks. Think about threatening the contractors from carrying about their job. Yes, it’s true, legislation helps but the issue would definitely be blown up, depending on which political parties these people go to who may exploit this to their advantage. At this very point in time, I do not see this maturity building up as well.

I think Chris Tan sums it up best when in his final sentence, he said, “
En bloc sales could be the way of the future for Malaysia to ensure housing for the population of tomorrow given that affordable housing is the flavour of the day.”  It may be happening in future but personally, I do not believe this will be happening even within the next 5 years, if not more. En bloc sales has to be supported not just by legislation but also the property market affordability level and available choices plus the readiness of the people to accept such possibility.

written on 20 May 2014

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Enjoy! MRT Putrajaya Line – FREE RIDE until 31st March 2023

They say one picture tells a thousand words. Take a look a the photo below from the MRT Corp’s Facebook page yeah. Highlighted in yellow is “Free Ride for MRT Putrajaya Line starting 16th March until 31st March 2023 – PM Anwar.” It is a not a lot of money for two weeks but it is still a lot of good savings for meals, kopi-O and even some supper of roti canai! I am not sure if I would have the time but will see how to bring my kids for their second ride since it’s free.

Some details on MRT Putrajaya Line

The length of MRT Putrajaya Line is 57.7 km. 44.2km is elevated (yes, when you drive on the road, it’s usually on top of you) and 13.5km of the alignment within the city centre is underground. There are 9 stations which are underground. It has a total of 36 stations. It starts at Kwasa Damansara (a new township next to Kota Damansara and Sungai Buloh) and it ends at Putrajaya Sentral. The Putrajaya Line has 17 stations with Park & Ride facilities, with a total of 6,416 bays.  The MRT Putrajaya Line has 49 units of electric trains and each train set has four cars with a capacity of 1,200 passengers. It’s a fully automatic driverless system, but the train can be driven manually if needed.

Happy riding!

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Who enjoys more, an investor or a consumer? The answer is…

Every financial guru would tell us to exercise delayed gratification. In brief, it meant we should NOT be materialistic until we really could afford to buy things without a need to ask for the price first. Well, for some of us, that may take like, forever? Haha. Anyway, I personally think delayed gratification is to be an investor first and consumer later. An investor is always on the lookout for investment diversification. He could not be a consumer at the same time because he knows that whatever spent will not go into his investment and well, the wealth multiplication becomes much slower. So, who do we think will be happier? Actually, it may not be the investor! Haha. The reason is because the investor may take it way too seriously until he turns into a scrooge. Meaning: A
scrooge
 is a person who is stingy with money: scrooges would rather do anything than part with their money.

So, is the consumer happier? I think they are. A real example? Before they bought that latest smartphone, they will feel happy to read about its superior features compared to other older models. When they bought the model, they feel happy because they own a phone which majority could not afford. When they start to use the smartphone, they feel happy every time people exclaimed, ‘Wow, that’s the latest model!’ Anyway, soon they will get used to the phone and another new model comes out. That’s when a consumer starts thinking again how to make himself happier. An older model certainly does not help them in their happiness anymore. So, a consumer is happier for a short period of time. What’s the cost for their happiness? RM4,000? Actually, it depends on how long are we talking about yeah. Just a RM4,000 in the FD account would become RM4,883 after 5 years at 4 percent interest per annum. That’s not a lot but the consumer is also not someone who would change a smartphone only ONCE every 5 years…

The following questions help us to determine for sure if we are an investor or a consumer.

#1 – How do we deal with any extra cash? Say, a 2 months bonus payout from the company? I would not recommend saving every sen lah. However, it’s great to be able to save it so that we build on a stock pile of fund which we could utilise for potential investment deals. OR do we think of all the stuffs that we have been eyeing for a long time? It’s great to spend some of the money to make us happy, to make our loved ones happy. This will certainly motivate us to work harder. Spending all of it and more is another matter. Depending on whether the stuffs we do are FULLY on getting returns or FULLY on just happiness would already give us the answer.

#2 – Do we focus on the return on investment (ROI)? Do we even know what are our potential returns? If we like to think of us an investor, then it’s important to understand the types of investments available. The risks associated with each one of them and the potential returns from what we put in. When we buy stocks for example, it does not mean that we simply buy the famous bluechips. This is because they are usually fully priced. How do we then identify the unknown stocks which could potentially give ‘bluechip’ kind of returns? An investor would seek answers to all these. A consumer may just simply buy into some investments which their friends tell them about.

The purpose of this article is not to determine who will be happier though. It is meant as a guide for us to know that over a period of many years, an investor would have accumulated far more returns to buy far more stuffs compared to if we have bought them earlier. Of course, for a property, the price is usually up OR the size goes down if the price is to stay affordable. For many other types of goods, the prices usually stays almost the same but the features and the specs may be getting better (especially technology goods). Assuming we still have a working phone today and we are in the market for a new phone. RM2,800 would buy us the latest phone today. Next year, a phone with the same specs would be half the price while RM2,800 would get us a much better phone. Yes, this is the reason why consumers will always be poor. They want to stay AHEAD of everyone else. An investor may not feel that much happier but in the longer term, they will be AHEAD, financially. No prizes for guessing if there are more investors or consumers today.  Happy investing or buying. Both can be a source of happiness.

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written on 30 July 2018

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Ensure growth, maintain fiscal deficit target.

Under the recalibrated budget 2016, there were 11 measures to do two important things. Ensuring growth by encouraging it and maintaining the fiscal deficit goal of 3.1 percent for 2016. The new budget would be based on oil price staying at around US$30 – 35 per barrel. This is a big change from the previous assumption of US$48 per barrel. I think it’s quite clear that the government is pushing for domestic consumption and thus growth. It is also unimaginable to increase the fiscal deficit forecasted earlier, especially with all the focus from the international rating agencies. Current Investment grade rating assigned to Malaysia is already the lowest possible by all three rating agencies. What are the 11 measures? They are as follow, with some brief explanation.

1. Beginning March 2016 until December 2017, employees portion for the Employees Provident Fund contribution would be reduced by 3 percent.
This would increase the money available for spending. Employees who do not wish for this may still opt not to.

2. One time special tax relief of RM2,000 for individual taxpayers with monthly income of RM8,000 or below for the year of assessment 2015.
This is another measure to ensure these individuals have more money to spend or even invest.

3i.Liberalising the control on import or Approved Permits (APs) on eight agricultural produce including, buffalo meat, raw coffee beans, beef and mutton.
With more competition, hopefully prices would go down.

ii – Ten MyFarm markets by Federal Agriculture Marketing Authority selling agricultural produce directly priced between 5 per cent to 20 per cent below market price.

iii- MyBeras programme – 20kg rice for the hardcore poor every month until December 2016.

iv – More Fair price shops. 640 to 1,000 and more stricter enforcement by Domestic Trade, Co-operatives and Consumerism

v – RM50 cash provided for every metric tonne of cleaned paddy given to farmers as input incentive.

4. New projects for houses with prices up to RM300,000 is reserved only to first-time home buyers.
I think this is a good move. Everyone deserves a roof over their head. Else the investors would buy these and rent it out.

People’s Housing Programme for homes priced at RM35,000 will get a financing package at 4 per cent through Bank Simpanan Nasional and Bank Rakyat.
This is significant because most of the time, this group of buyers would never be able to obtain any financing due to the nature of their job.

5. Thirty per cent from the levy contribution to the Human Resources Development Bhd will be provided to enhance competency and skills of employees through reskilling and upskilling, including for retrenched workers.
 (Seriously, please make sure the programmes are really useful ones)

6. Enhance the efficiency and amount of tax collection by following steps:

i- Government will give special considerations on relaxation for penalty on taxpayers to declare past years’ income, and tax arrears must be settled before 31 Dec.
(Pay soonest, else get penalty)

ii-Selling channel of cigarettes and liquors in duty free islands would be limited to duty-free outlets licensed by Customs Department.
(Ensures as high collection of tax as possible)

iii-Free duty treatment on imported vehicles in duty-free islands to be tightened.
(I think the restrictions to bring out these vehicles would be tightened)

iv-Government will get more revenue from bidding and redistribution of telecommunication spectrum.
(Hopefully, more competition which meant cheaper broadband)

7. Levy for foreign workers to be clustered into two categories excluding foreign domestic maid. Government to implement the Rehiring Programme to provide opportunities to Foreign Workers Without Permits (PATI).
(Easy to understand, illegal ones meant the government gets nothing. With these programmes, levy can be collected instead of nothing from the illegals)

8.
This one is tough
 but the government said it will be prudent in spending in supplies and services, continue to rationalise the provision of grants to Government Trust Funds, federal statutory bodies and government linked companies (GLCs), as well as rationalise and restructure entities.
Without penalising / punitive measures against those who simply spend, this is hard to enforce.

9. For development expenditure, focus is on projects which benefits the people and high multiplier effect as well as low import content. Physical projects that will be prioritised include construction of affordable houses, hospitals, schools, roads and public transport as well as security.
 I think construction sector can heave a sigh of relief, more jobs are coming.

Non physical ones including those under study would be postponed. This should save RM5 billion and would not affect the economy.

10. Development Financial Institute (DFIs) and government owned financial venture capital (VCs) to increase financing funds by RM6 billion for small medium enterprises (SMEs).
Always note that countries with a huge pool of SMEs is much better than one where only MNCs operate. SMEs will not run away but MNCs may close with very short notice, as what has happened recently.

11. GLCs urged to narrow the income gap between higher management and employees gradually.
To be paid higher, the role must be enhanced and not just being paid higher. Else, Malaysia would soon be uncompetitive as all the under-qualified ones are also paid way above those of other cheaper countries.

Last but not least, the government will expedite the e-Visa and free Visa is given to Chinese tourists from March 1 to December 31 2015. I think tourism is a serious money generation industry because the visitors needs to fly in, book hotels, shop till they drop, lots of food and many other miscellaneous expenditure. Great money with the weak Ringgit and lots to offer. No special measures to reduce the cooling measures in place for the property market. I think the time has yet to come. Even Singapore has not done anything yet despite the falling prices and transactions coupled with a huge incoming supply of new units into the market. Happy spending though I would prefer whatever extra money is used wisely.

written on 28 Jan 2016

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Entrepreneurship and a degree when parents are rich

Do you know that when venture capitalists invest in firms, they do lots of due diligence? Yet, most of the companies they invest in do not become a star performer? Then, why are they doing it all the same? It is because that one company that do become a star performer would provide them returns far higher than all the losses they incurred from those that did not. It is the same for some entrepreneurs, the very aggressive ones, before they hit pay dirt. (became hugely successful)  Mr. Donald Trump has taken SIX business bankruptcies.
Here’s the article in TheWashingtonPost.
However, he became a very successful businessman and just a few months ago became the latest President of the United States of America. He was given those chances to try again based on the laws of the U.S. I am not sure if he has any mentors but he has an economics degree from the Wharton School. (University of Pennsylvania).  This is a very good university and one
which Dr. Zeti Aziz
 graduated from too. Okay, this concludes my introduction.

This brings us to this question that is in my mind. Assuming the parents are very rich, should they provide funds for their kids to start their own business (many times since the first few times may not be successful) or for their kids to complete a degree first? Oh yeah, what we study during those 4 years of degree may not be very applicable when we graduate. By the way, even for Medical degrees, the doctors would have to keep themselves updated, else what they knew then may not be what is applicable today. For majority of us, we may not even be working on fields which we majored in! To me, it does not matter. A degree would be a foundation that my kids should have and I do not think it is a waste of funds or time. Once they have a degree, what they want to do next is up to them. Seriously, it should not just be how to earn more money lah. As long as it is what they love, what they are passionate about and they do it extremely well, the money would not be too bad. They may even find their best friends during those years and they would forever be laughing about their ‘stupid’ time in the university. Yes.. I still reminisce those foolish things I did even till today. I am fortunate that I met my wife then.

Entrepreneurs are amazing people. They can build up their new businesses that would then be able to provide lots of jobs to people. As the owner of a business /organisation, in the corporate world, we need good people. Many times, good people that we are looking for would become our senior managers, our general managers and these people would be those who has a good working experience gained from companies that hired them because they had a good degree in the first place. Personally, I think even for rich parents, encourage your kids to strive for things that they are passionate in. Provide them those opportunities since you could. As for that first degree, well, I would certainly think it is necessary no matter how rich the parents are. I remain just a
full-time working professional

who drives a Proton Persona to office everyday. Happy playing with your kids.

written on 1 July 2017

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Press Release: E&O- Elevating Penang on the World Property Stage

Seri Tanjung Pinang and Andaman build on group’s impressive track record to chart new heights

While usually associated with tourism, heritage and food culture, Malaysia’s northern state of Penang has also garnered prominence in recent times for its vibrant and dynamic property landscape.  Although the second smallest state in the country after Perlis, the state’s property landscape is second to none, garnering both local and international interest.

Of the many developers who have invested in Penang’s property infrastructure, few can boast a wide and impressive track record as that of Eastern & Oriental Berhad (E&O).

Across Malaysia, the group is well known to command a premium with its portfolio of iconic addresses. Among these are The Mews, St. Mary’s Residences, Dua Residency and the up-and-coming Conlay in Kuala Lumpur, as well as the Avira Garden Terraces in Iskandar, Johor, among others. The group has also carved a name for itself in the intermational property arena, with notable projects such as The Lincoln Suites (formerly known as Princes House) in the United Kingdom. Particularly noteworthy is the fact that all these projects, both local and international, are situated on prime and highly sought-after locations, further increasing their value.

Building on these credentials and remarkable performance, E&O is on a mission to take Penang’s property landscape to new heights, drawing on its rich heritage and legacy in the state dating back to 1885, when the iconic Eastern & Oriental Hotel was established. Known affectionately as the “Grand Dame” of Penang, the hotel remains a prominent landmark lending its charm and elegance to the surrounding vicinity, as E&O continues to redefine and reinvent Penang’s property landscape to this day.

STP: A pioneering masterplanned development

In 2005, E&O embarked on the first-of-its-kind masterplanned seafront development of Seri Tanjung Pinang (STP). The unprecedented project involved the reclamation of 240 acres of seafront land at the upper-class residential suburb of Tanjung Tokong, located between the UNESCO World Heritage City of George Town and the beaches of Batu Ferringhi.

“E&O’s achievements with STP are not just in terms of its extensive land reclamation efforts to create this remarkable address. Its true success comes from the company’s focus on value creation and community building, by conceptualizing innovative residential enclaves, reinventing tropical architecture, focusing on luxurious details and designing vibrant retail spaces,” says Kok Tuck Cheong, Managing Director of Eastern & Oriental Berhad.

The carefully planned and curated township boasts a mixed development which comprises impressive seafront villas, contemporary terraced and semi-detached homes, luxury condominiums, and executive apartments. These projects combine detailed craftmanship with innovative design features that make them truly stand out.

At the heart of this community is Penang’s first and only seafront retail marina, Straits Quay. Framed by a wide promenade and the open sea, this hotspot adds to the community-centric nature of STP, featuring restaurants, cafes, bars, antique shops and art galleries and a selection of interesting retail options.

In developing STP, E&O also earned the trust of some of the world’s leading architects, landscape designers and lifestyle consultants, with which the group partnered to achieve its vision for the development. Among these include the internationally acclaimed hospitality concept architects Wimberley Allison Tong and Goo, based in Seattle, Washington, who worked in collaboration with Malaysia’s own GDP architects. Specific developments within STP also saw the involvement of notable partners, such as the Quayside seafront resort, for which E&O worked with Seattle-based Geyer Coburn Hutchings and security experts, GDSS systems

Over its 15-year development, STP grew into a vibrant international community of 3,000 homes, purchased by buyers from over 30 countries, further cementing the development’s repute as a desired address of international standards. As buyers saw the proven results through each phase of the development, demand grew, enabling E&O to command benchmark prices, delivering impressive returns to investors, and creating a brand cache that no other property developer has been able to replicate in Penang.

Today, STP remains a sought-after address, while E&O continues to invest in the development, working hand-in-hand with the residents to ensure that this vibrant, safe and close-knit community thrives.

For its stellar offering and proposition presented by STP, E&O has been recognised through a number of prestigious industry awards and accolades. In 2019, E&O was named one of the top 10 property developers for the People’s Choice Award by IProperty Development Excellence Awards (IDEA).

Charting new heights with Andaman

Not one to rest on its laurels and past successes, E&O is now taking its proven track record to a stellar new development which will continue to redefine Penang’s property landscape. Aptly named Andaman after the surrounding sea, it will draw on E&O’s long-established legacy of detailed and thoughtful craftmanship.

The 760-acre development will make up an urban island quite unlike anything seen before in Penang, or even in Malaysia. Located off the foreshores of Gurney Drive and Tanjung Tokong, Andaman is envisioned to become a global prime address that is anchored on four principles – a carefully curated masterplan, having seamless connectivity, sustainability and offering a balanced lifestyle.

As a self-contained island that encompasses the best of peaceful island living and an exciting urban lifestyle,  Andaman will meet all the needs of its multigenerational residents with a carefully curated mix of residential, commercial, retail, health & wellness and education offerings, all contained within the development, which will also appeal to international investors, tourists and homeowners.

E&O’s vision for Andaman is to create an all-encompassing living environment that stays true to Penang’s heritage and provides a high-quality public realm and accessible waterfront, while nurturing a series of neighbourhoods within an integrated mixed-use community.

“Simply put, Andaman is everything investors would expect from E&O, and so much more. With stunning attention to detail and thoughtful craftsmanship, it will be a fine example of the E&O Group’s dedication to creating iconic addresses and thriving multinational communities that stand the test of time,” says Kok.

Bearing testament to E&O’s forward-thinking approach to developing communities, the developer will, for the first time, offer homes targeted to millennial buyers at Andaman, in the form of The Meg – a serviced apartment which not only comes fully furnished but is truly a value for money purchase, starting at a very attractive price points. It’s name takes inspiration from the nutmeg, drawing on Penang’s association with the spice which dates back to the 19
th
 century, when the British East India Company saw the island’s potential for spice plantations.

With the developments of STP and Andaman, E&O has categorically hoisted Penang on the international property map while placing the Pearl of the Orient on par with notable international seafront developments.

The group’s impeccable track record will further help buyers and investors derive much value from these developments, which, will continue to stand the test of time.

-END-

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Good news indeed if EPF 2021 dividend is really 6% or higher.

The days when fixed deposits were firmly an investment for future

I come from a generation where the Fixed Deposit rates were good enough to be known as as investment savings. 5%, 5.5% or even 6% for example. Take a look at the chart below. Yeah, I think I start to know about fixed deposits in the 90s since that was the time when I was completed my secondary school… my university and even started working in July 1998 which was not so rosy because of the ASEAN Financial crisis in 1997.

Source:
https://tradingeconomics.com/malaysia/deposit-interest-rate

Today, the fixed deposit rates are 1.8% or maybe 2% depending on how much we deposit and of course if we are taing a 12 month deposit, it may now be slightly above 2% as well.
BNM is expected to adjust the rates upwards in H2 2022. (Read about the news here)
 Such low rates are not such good news especially for many who may not know about other investments beyond just the fixed deposits.

Article in theedgemarkets.com
  The Edge’s back-of-the-envelope calculation shows that dividend from the EPF for year 2021 is set to beat the rate in 2020. In 2020, it was 5.2% for conventional and 4.9% for shariah. In fact there is that chance that the conventional dividend may reach its highest in three years, maybe even touching 6%.

The reason is because EPF’s performance for the first nine months of 2021 was RM47.67 billion and this is already more than the RM47.64 billion paid out to EPF members in 2020. Do read the full article here:
Article in theedgemarkets.com

What if it reached only 5.8% then?

Assuming EPF was not able to declare 6% but only 5.8%, what does this mean? Well, this meant that the dividend return is higher than the dividend returns from most of the companies which people have invested in. In fact, at 5.8%, it will be more than 3 times higher than the fixed deposit rate of 1.8%!

So, if it is 5.8%, I will personally be very happy. Remember, using Rule of 72, it will take around 12 years for our money to double if it’s 5.8% on average. However, if it’s 1.8% then it will take 40 years. It means that even after we have worked from the day we graduate until the day we retire, the money we have has NOT yet doubled! I am grateful. Thank you for working hard for me, EPF. Cheers.

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Personal Finance 101: EPF Account 2 can now be used to obtain personal financing

PM Anwar announced this plan earlier

Article earlier for reference: EPF savings as collaterals for loans
   Briefly, Prime Minister Datuk Seri Anwar Ibrahim today clarified that the plan to allow Employees’ Provident Fund (KWSP) contributors to use their savings as collateral for loans would not involve any withdrawals from their savings. Now, we have news that the EPF is ready to implement this EPF Account 2 for loans and they have finalised the mechanism and the terms and conditions for EPF members who want to do so.

Article in nst.com.my
   EPF said that the Account 2 support facility, aimed at helping members apply for personal financing from banking institutions would be implemented in two phases. First, members who meet eligibility criteria may apply through participating banks, including MBSB Bank Bhd and Bank Simpanan Nasional (BSN).

The EPF may consider adding more participating banks in the future. Phase 1, which will begin on April 7, 2023, will remain open for one year. Eligible members who are 40 or older may apply, subject to the readiness of participating banks. EPF said the start date for Phase 2 for members under 40 years of age would be announced in due course. Do read in full here:
Article in nst.com.my

Reminder. EPF is really for retirement.

I am not part of those who are asking for EPF withdrawals. Yes, I know MANY who did the withdrawals are because of many other reasons than the fact that they need it for emergency purpose. Just need to remember that the loan we take today would still have to be repaid in the future. IN other words, we are still using our retirement funds well in advance and this is not a good news later on. Well, since this is the case, just have to go on with it and hopefully many would be savvy enough to know why EPF only allowed withdrawal when a member retires.

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EPF: More into private equity, property and infrastructure

Diversification is key to long term returns and safety. Sometimes, this may not provide the best returns but as they say, never put all your eggs into one basket. For investment, I love property the most, maybe because I could actually touch, see, feel and enjoy it. However, I am not convinced to only have properties. Thus, stocks and unit trusts are the other two of my investment pillars. Between all three, I think the lowest returns thus far which is in single digits per year would be unit trusts. Stocks would vary tremendously. One good stock may give us returns so good that even if others merely provide dividends, it is good enough. Tips? Here:
Good notes for stock investing from an investment guru

When we have lots of funds, we tend to have more options. Of course, it also meant that it’s harder to ensure everything we invest in would give high returns. Perhaps some would give exceptional returns but there would also be some that we may have to hold for a while, especially during downturn cycles. Reported in
NST dated 7th Oct 2016
, the CEO of our Employees Provident Fund (EPF) said, “For a long-term investor, you sometimes have to be counter-cyclical, that’s what we tend to be. Typically, when markets suffer major corrections, we come in and buy heavily.” I think this view is by far better than to wait for the best time to buy which usually means nothing because no one would be able to
predict with accuracy
 when’s the actual best date to buy.

EPF is also planning to
 diversify its investment portfolios
. The three key areas where it will increase its investment include private equity, property and
 infrastructure
. He shared EPF’s experience. “From our last six to seven years of experience looking at these assets, we’re now fairly convinced that they are viable asset classes, which will help us to meet our inflation-hedging targets.” It is also on the lookout for property assets in the United Kingdom. It currently has a UK property portfolio worth more than £2 billion (RM10.7 billion). On a personal note, even if many Malaysians prefer Melbourne or Sydney properties, I
personally would prefer London
. Only one tiny issue, I have no funds to buy in any of the three cities today or even in the near future. Happy investing.

written on 7th Oct 2016

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Yes, our EPF dividend continues until we are 100 years old.

get to know about your EPF dividend.

Malaysia’s life expectancy is 76.22 years. Well, considering we work till 60 typically, that means we should have enough savings / assets which we could sell OR a lot of EPF savings which could last us 16 years. Speaking about EPF savings, there was this viral piece of news saying that EPF will only pay dividends to its members until a maximum age of 75. That’s apparently not true currently and in fact is an outdated news and thus is no longer applicable.

EPF explained that as per the amendment to the EPF Act 1991 and announced effective Jan 1, 2017, EPF members would continue to receive dividends for the portion of savings they left inside the fund. This is until the member reaches 100 years old. This is applicable as long as members continue to have their savings in EPF.

Article in themalaysianreserve.com
.
 The EPF said in a statement, “We urge members to be cautious of misleading or unsubstantiated information received through social media platforms and refrain from circulating them. Members are advised to always verify the source and date of the information obtained.”

The EPF said members would be informed prior to transferring any unclaimed savings when the member reaches 100 years old. Any claim after the transfer could be made through the Registrar of Unclaimed Monies.  Please do read the full article here:
Article in themalaysianreserve.com

How low could EPF dividends be?

In case anyone is wondering what it the minimum dividend which EPF must give to members, it is 2.5% and this is guaranteed by law. Earlier article for reference here:
Did you know that EPF has a guaranteed dividend rate?

If we look at this guaranteed 2.5% and assuming FD rate does not change, then even at this minimum guarantee, EPF is still giving a guaranteed dividend which is 25% higher than the current FD rate which is around 2%. The image below shows typical FD rates in Malaysia currently.

Please stay healthy if you still have money in the EPF

It’s time to stay very healthy to enjoy more EPF dividends. I mean that’s the only way we maximise the returns we could get from our EPF savings. In fact the healthier we are, the lesser money we would be spending on hospital bills too. As for the viral news, you can now delete it if you see it. Thank you.

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I like the EPF dividends for year 2020.

EPF dividends for year 2020 (how they invested our money) is 5.2% for conventional and 49% for shariah. Most of the comments for EPF dividends seem to be positive but there are also some who said that it should have been higher. I think everyone has their own opinions but here are 7 reasons why this very commendable. Thank you to everyone in EPF who has worked hard to achieve this result. My earlier article here:
We could do better than EPF for dividends? Sure go ahead.
 Let’s read the announcement as per media as below and my thoughts after that.

Article in freemalaysiatoday.com
.
   The Employees Provident Fund (EPF) has announced dividends of 5.2% for conventional savings and 4.9% for shariah accounts for 2020. The dividend is higher than the Amanah Saham Nasional Bhd’s 4.25%. It is also higher than the fixed deposits in the banks too which ranges from 1.8% to 2.2% depending on the amount and period. Of course when compared to 2019, then it is a little lower. In 2019, it was 5.45% and 5% for conventional and shariah respectively.
Article in freemalaysiatoday.com
.

Photo by cottonbro on
Pexels.com

Very encouraging indeed.
This is more than 200% higher than the Fixed Deposit (FD) rate. Both the EPF and the FD are considered safe investments with the FD having no minimum and the EPF has to give a minimum of 2.5% returns to all depositors. This is mandated under the EPF Act 1991.
(Earlier article here)

Despite a very challenging year.
2020 is indeed not a great year. Thus, the ability to still declare any dividends above 5% is really a commendable feat. It meant that EPF did manage to invest into some good assets for the continuous returns and did NOT speculate too much (which they should now) and either earn us a super high return or perhaps losing money.

If you still think it’s low and you could do better externally, EPF actually allows members to choose yeah. I would be very happy for you if the returns are indeed better than EPF. Good job. Just remember not to blame them later for being the one who ‘forced’ you to withdraw our because you think the returns were low. Happy investing everyone.

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We could do better than the EPF dividends? Sure, go ahead.

Someone mentioned that the EPF dividends are not high enough.
(did you know that EPF dividends are GUARANTEED? read here)
 It’s best to withdraw money from EPF using the i-Sinar and then use these withdrawals to invest into some better investments versus the EPF. I have no answer as to how good all these external investments are versus EPF. However, there are a few things which we may just want to be clear about. As long as these are clear to us, of course we could make the best decision for our future. Keyword here is ‘our future.’
(Earlier: There’s also the forecast that EPF may declare a respectable dividend for 2020 despite pandemic. Read here.)

Photo by Gabby K on
Pexels.com

#1 i-Sinar is NOT for investment. It is to sustain living expenses because of COVID-19 effects
. This is the purpose. “membantu anda bertahan ketika krisis COVID-19.” Thus any withdrawal is for this purpose and not for other purpose. I know, it’s the depositors money and they have a right on how to use it, even if this is i-Sinar. As long as this is very clear, all the best and I do wish your investment will be able to higher than EPF returns too.

#2  EPF returns are not super-duper high
(but… 6% per annum for a period of 12 years is really not bad at all)  Take a look at below. Please note that EPF’s investment is not going to be like an Equity based fund yeah. It is likely to be safer investments so that we do not suddenly lose a lot of it away like many equity funds where the returns are huge but if we bought at the wrong time, then we will also be having sleepless nights too.

Image source:
https://ringgitplus.com/en/blog/personal-finance-news/historical-epf-dividend-rates.html

#3 If we are very confident with our own investment skills
.  I have many friends who seem to be able to earn returns which is way higher than what EPF declares as dividend every year. Especially the ones who continue to share their huge returns from the glove counters. If you are also one of them, then go ahead and take the money and invest it to your best ability. Just note that there’s definitely the volatility, so just have to hang on when returns are lower than typical.

#4 This money is for FUTURE yeah.
Whatever returns or however high the returns maybe, that is to be kept for future yeah. It is not for us to spend it all because we have withdrawn the money and this would mean that the returns you see above will no longer apply to that portion of savings which you have withdrawn. It is now up to you to ensure that you are ready for the days when you need the savings.

#5 I invest with my other savings instead.
If we use the same periods of 2008 – 2019, I do think that my property investments thus far have much higher returns than my EPF savings. However, I could not guarantee that for the next 10 years, it will still be better than the EPF. Meanwhile, my Unit Trust investments (I am a PBB Mutual Goal member) has given me higher and lower returns over the same period, depending on the type of fund.

This is why I will just let EPF continue to invest my money while I take care of the rest. It’s just a personal decision yeah and not because I know the EPF CEO. Perhaps I am just one of those conservative people or perhaps I am just at a different stage in my life that I think it is very important to keep diversifying my investments and to ensure continuous and stable returns versus a one year super-duper return and sleepless weeks next year. Happy understanding.

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EPF: Still up as at Q3 2016 but unsustainable moving forward

Feel free to read the full article about a piece of good news, even if it may not be repeating so soon. Reported in
thestar.com.my
 Our Employees Provident Fund (EPF) has a good Q3 2016. Its investment income surged 29.21% to RM12.32 billion in Q3 2016 when compared to the same quarter in 2015 which achieved just RM9.54 billion. Investment assets has also increased from RM684.52 billion as at Dec 31 to RM712.50 billion as at Q3 2016. This is what its Chief executive officer Datuk Shahril Ridza Ridzuan shared, “Our overseas investments continued to enhance returns during the quarter, while non-cash impairments also recorded a significant reduction from last year.”

Other stats include the following: 41.24 percent of total investment assets are equities and this represented 56.96 percent of total investment income for Q3. In brief, equity has given a higher return compared to the investments into it. Earlier, EPF has also stated that it will focus on equity too. Read here:
EPF: More into private equity, property and infrastructure

The higher income in Q3 was because of improvement in equity prices, mainly in the North Asian and developed markets. As at Sept 2016, 49.76% of EPF’s investment assets were in fixed income instruments. Out of this, the fixed income investment provided 36.65 percent of the quarterly investment income. In other words, the returns from fixed income investments are lower when compared to equity.

However, such a good quarter is not sustainable. Shahril shared that the EPF’s cost for overseas investments will increase as it will be at higher foreign exchange rates. Besides that the fixed income investment would continue to be bogged down by the low interest rate environment. He added, “Given the decline in investment income in the first half of the year and the uncertainties expected to remain for the rest of the financial year, it would be a challenge for the EPF to sustain previous years’ returns.” Happy following and yes, I do not mix my
EPF and my unit trusts.

written on 21 Nov 2016

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EPF declares higher dividend than 2019!

EPF declares higher dividends than 2019!

I wrote about the EPF dividend potential earlier. Read it here:
Good news indeed if EPF dividend is 6% or higher
  Yes, you can say that I was optimistically hoping for higher than just 6% even if 6% is already very encouraging. We have received the good news.

If you have RM100,000 in your EPF conventional savings, it has now become RM106,100. Yes, EPF has just declared a 6.1% dividend for conventional savings and 5.65% for shariah savings for 2021. 6.1% is 300% better than the current Fixed Deposit rate and is comparable to many dividend returns from dividend stocks too. Kudos EPF team. You have done very well. Now I wonder if 2022 may be even higher! 🙂   That’s the wish of all EPF contributors. Do read the happy news below.

Article in theedgemarkets.com
   EPF said its overall investment assets grew to RM1.008 trillion in 2021. This is up 0.8% year-on-year from RM1 trillion in 2020. In February 2021, the EPF said its overall investment assets grew 7.9% to RM998 billion from RM924.75 billion in 2019.

However, the total investment assets slowed down despite strong investment performance because of Covid-19-related withdrawals, including the unprecedented i-Sinar Account 1 withdrawals totalling RM58.7 billion.

At a briefing on Wednesday, EPF CEO Datuk Seri Amir Hamzah Azizan said that the fund had prematurely taken profit on some investments and brought back RM22 billion from abroad to cater to the sizeable Covid-19-related withdrawals last year. Do read the article with a lot more details here:
Article in theedgemarkets.com

EPF has to be last resort, not first

Whatever we earn today, we save and we spend within what we earn. This is how we can also build up reserves and be ready to sustain us when we no longer work. EPF savings will complement that savings. Thus, just think of EPF as last resort and not the first.

Beyond just saving alone, we need to invest. The reason is simple. The FD rates of today are not like long time ago. It used to be easily 6% or higher. These days, 2% is the number we are looking at. Saving our money and earning 2% yearly meant that our wealth is growing smaller and not bigger. Inflation is at least 3% and this chips away our returns easily.

Looking forward to another good year ahead. Yes, I am optimistic that we will learn to live with Covid-19 for a while more.

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EPF: Investing direct, 5.7 pct dividend versus 6.4 pct in 2015.

Do you know that it’s possible to buy and own your own plantation land? Well, orchards for a start? Many years ago, a group of friends and I wanted to buy a durian orchard.Somehow we did not and look at today’s price for Musang King and I am close to fainting. Haha… Anyway, it’s ok lah. Our Employees Provident Fund (EPF) is exploring opportunities to invest more directly into natural resources assets and not just as a shareholder. For example, owning some plantation assets directly. Of course to do this well, it has to be huge enough so that a management team can be set up to manage this. I think these days, it’s quite normal to see EPF taking huge stakes in some huge property developments. From within
Malaysia (BBCC)
 all the way to
London (Battersea)
, EPF is already quite proactive. I think the current CEO has steered it quite well. He shared that EPF has been gradually
gradually diversifying away from pure fixed income and private equity investments in the last few years and expanded its real estate and infrastructure portfolio. For example, EPF was already one of the largest investors in palm oil companies though they have no direct assets yet.

As for 2016, the dividend declared was 5.7 percent. This is lower than the 6.4 percent declared for2015. Yes, I personally think 5.7 percent is an encouraging number. This is still higher than the sudden
‘
highest’ number for inflation

just recently which was higher than even the usual fixed deposit rates here in Malaysia.
With the unemployment rate continue to be low and with more people having higher salaries, the contributions into the fund is on an increasing trend. EPF recorded an annual contribution of RM61.59 billion versus RM46.8 billion withdrawals. So, yes, it is still growing. I think this will be under more pressure in the future when Malaysia becomes an ageing nation.
Probably 2035 based on estimates.

In terms of numbers, last year the
EPF had a gross total of RM46.56 billion invested and it achieved a gross income return on investment of 7.12 per cent. This was lower and a few reasons contributed to this. The slump in crude oil prices, weaker ringgit and corporate earnings, as well as large-scale withdrawals of capital from emerging-market economies into developed countries.
(The last reason has big effects on the ringgit)

Happy following.

written on 23 April 2017

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EPF members with less funds than poverty level

RM20 and 5 days till salary day

When I started working, there was one particular month which due to an unforeseen circumstance, I had just RM20 and it was 5 days till salary day. I was already a working adult and thus did not want to ask my parents for money. Those 5 days were tough because I needed to go to office. I needed to go out for lunch which I did not and gave excuses to my colleagues and drank just the Milo provided in the office. For breakfast, it was Gardenia bread and for dinner it was the same. It was a feeling I would not wish for anyone at all.

This is why I always try to tell everyone that personal finance is not about saving those few ringgit from meals. Personal finance minimum stage is to have one property because otherwise, how could one survive paying rental every month and yet having no income after retirement?

It seems that for some EPF contributors, their retirement will be a tough one.

Article in nst.com.my
 71 pct of EPF contributors aged 55 and below do not have enough to rise above poverty level. Prime Minister Datuk Seri Anwar Ibrahim said this was due to the four special withdrawals approved during the Covid-19 pandemic.

Anwar, who is also Finance Minister, said the number of active members who had reached the basic savings target of RM240,000 by the age of 55 had dropped from 36 per cent in 2020 to 29 per cent at the end of last year.

“The EPF estimated that members are required to work between four and six extra years to rebuild the savings that were withdrawn during the pandemic,” he said in a parliamentary written reply to a question from Datuk Seri Amirudin Shari (Pakatan Harapan – Gombak). Do read here for the full article:
Article in nst.com.my

What does PM meant with ‘poverty level’?

Malaysia’s new poverty line income is RM2,208, over
400k households considered poor (Source here)
  If we assume a household to be two persons, this household has RM1,104 per person for 30 days. If we deduct RM1,000 for rental out of this amount, then it’s RM1,208 per 2 person or 3 persons or 4 persons depending on how many people are in the household. We can see one major reason why poverty happens is because of property. This is true for all advanced countries and not just in Malaysia. Without property, it’s hard to escape poverty. The household would continue to pay rental for generations to come.

Think about this really hard and understand why I always write against personal finance writers who kept writing about saving here and there but continue to say property investment is not needed. I think they must be very rich because they did not have to worry about renting.

Cheers

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RM240,000 is the minimum we need to have in EPF when we retire

Withdraw EPF savings before 55?

If this is a question for me, “Should I withdraw my EPF before 55?” My answer is a simple one, NO.  My main reason is because EPF savings is really for post-retirement, when our active income has stopped or has gone down significantly versus the time when one was still working full time and thus has monthly income. In fact, I would like to leave the savings in EPF inside EPF as long as possible so that I have something to fall back upon.

At the same time, I would ‘FORCE’ myself to do three extra things so that I actually have money to spend and can leave EPF as my last resort to dip in. Before that, let’s see the reason why
EPF says that RM240,000 is the minimum. Click here to read what EPF said.

Why RM240,000 should be the minimum?

If we assume we retire at 55, then we need to be ready with funds to live by for the next 20 years. I assume life expectancy to be 75. It’s higher by the way if we look at the average life expectancy for Malaysians. The RM240,000 meant that the member would have RM12,000 per year or RM1,000 per month. This is RM240,000 divided by 20 years until we say bye-bye to the world. Some would say that this is barely enough today, how could it be enough in the future? This is why EPF savings must not be the only savings. Let’s look at 3 other FORCED savings we could do too.

#1 – Forced saving in the form of a property monthly repayment

When we rent, no matter how high or low or how worthy because the rental is lower than mortgage, at the end of the day, whatever amount we paid for rental does not belong to us. I do not have any friends who gave returns to their tenants because their tenant has paid them 20 years of rental without any delays. I am also not going to allow my tenant to stay for free after their income has stopped or when they retire just because they have rented from me for the past 30 years.

I forced myself to start paying for my first property when I was 25 years old. The first 4 years of working, I paid rental. I pay them on time too. I am happy I forced myself to buy that property because if I did not, the for the past 24 years of working life, I could have paid the following amount in rental. I assume the rental I paid for that one apartment remains unchanged since the first day I stayed there yeah.

RM550 x 12 months x 24 years = RM158,400. Fortunately, I bought that first apartment and sold it many years later for a surplus of RM100,000 over the price I purchased.

#2 – Forced savings means staying grounded

There is little need to force people to think highly of us simply because of what car we drive or what watch we wear. I just remembered that my Persona is in the 12th year now. I finished paying for it 7 years ago. In other words, I have saved RM600 per month x 7 years and that’s a substantial RM50,400. This is also a ‘forced’ saving because for the past 12 years, many people would have seen my Persona and thought, ‘oh dear he’s poor and could not afford a Japanese branded car.’ It’s okay. I prefer RM50,400 versus having my peers thinking positive of me. Anyway, no matter what car I drive, there are still so many people drive better cars yeah. Haha.

#3 – Forced savings means focus on needs and not wants

There’s also the ‘forced’ saving from not buying unnecessary stuffs during 1.1, 2.2, 3.3 up until 12.12 sale. My good friend whom I always learn a lot when we meet, Suraya of the famous
 ringgitohringgit.com
 shared with me before that when she wanted to buy something, she will delay the decision for a while. If she could survive without it, then the item is actually not necessary. What an amazing way to decide whether it’s a need or actually just a want.

Yes, I think everyone should read her personal finance blog yeah.
RinggitohRinggit.com
. I have also done something similar. I just delay that purchase for one month. If I could not, then it’s really needed. Else, it’s okay not to get it.

That RM240,000 is definitely not enough yeah

This is why it’s best to do extra through forced savings yeah. I do hope my little sharing could help everyone rethink about their financial status today and manage it a little better. By the way, I am not that amazing in saving every ringgit and sen also lah. I have my own interests too. I have over 30 pairs of shoes… Image below shoes just my brown coloured leather shoes.  I have over 15 formal jackets.  I have over 70 long sleeve shirts of different colours and designs. I better stop here… The reason I could have all these? Easy lah. Forced savings when needed.

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Financial news: Only 19% EPF contributors have sufficient savings to live above poverty line after retirement

EPF news: Only 19% have sufficient savings to live above poverty line after retirement

What is the poverty line for Malaysian households?

Statistics Dept: Malaysia’s new poverty line income is RM2,208, over 400k households considered poor.
(Full article here in malaymail.com)
. It means that if a household has a household income of RM2,208 or lower, the household is considered very poor.

As for the household size, it’s 3.8 person for Malaysia as at 2020.
This is a decrease from 4 or higher than 4 previously. Full information from statista.com here.

If we take these two and we combine the info, then RM2,208 divided by 4 persons meant that this household has RM552 per person in the household. Fortunately it’s a household, so whether rental / home loan repayment is just one person and not all. Meanwhile cooking at home will lessen some of the burden versus eating outside. Nevertheless, it’s not a good life and Statistics Department classified any household with RM2,208 as living under poverty line.

Only 19% of all EPF contributors could live above poverty line when they retire

Article in focusmalaysia.my here.
  PRIME Minister Datuk Seri Anwar Ibrahim said that as of December 2022, only 19% EPF contributors have reached the basic savings level based on their age to enable them to have RM240,000 in savings by 55 years old.

He said in a written parliament reply, “This directly shows that 81 percent of contributors aged 55 and below are in a serious situation where their savings will not be enough for them to retire above the poverty level.”

According to the Finance Minister, more than half (56%) of those who will be able to withdraw their EPF savings fully in a year – those who are currently 54 years old – have RM50,000 or less in their retirement fund.

He said then, “RM50,000 can only provide retirement income of about RM208 a month for a period of 20 years.” Do read the full article with more details here:
Article in focusmalaysia.my here.

If not EPF, then what?

Actually the first line of defence against poverty is not EPF. EPF is the final defense line against poverty. We need to build more defense lines before the ‘war’ (retirement). Stay focused at the very least on managing expenses. Build upon our career, work more jobs if needed. When we can manage expenses and have better pay, we will have extra money which we could then use it for investment. I meant, investment. I did not say speculation or gamble.

When salary is okay but expenses are crazy

By the way, in the household income category, we have at least 50-60% who are categorised as T20 and M40. In other words, these two groups have the opportunity to manage their spending if they chose to. Whether it’s a new smartphone or a new car or even exotic vacations, all these are just priorities in terms of spending. We need to remind everyone that EPF is really the final place they could get money from, not the first. Before this last resort, build more others.

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EPF alone is definitely not enough, BEWARE

I just read an article about EPF encouraging people to save as early and as much as they can. Truth is, every employee provident funds or equivalents in all countries are saying the same and this is not just applicable for EPF of Malaysia. Most of the time, the usual recommendation is to save a third of one’s monthly earnings. If we are working full time and when we add the contributions from the employer as well as our own deductions every month, the total comes to around 23 percent or 24 percent. Let’s assume the EPF’s yearly dividend is always above inflation. In other words, when we retire and we live another 20 years, our money in EPF should give us around or at least 23 percent of our monthly pay every month until the day we say bye-bye. Is this enough to sustain our lifestyle then?

Actually the answer depends, really. Besides EPF, most of us should have some personal savings. The luckier ones would have children who should be able to also provide some monthly allowances. The prudent ones might have one property which has been fully paid for. The slightly far-sighted ones would have two properties fully paid for. Even assuming an average property price of just RM500,000 then, this is RM1 million. Considering everyone lives another 20 years, this RM1 million would provide an additional RM4,166per month. As long as the last group did not simply spend, the total from EPF, some personal savings and the two fully paid properties is enough to sustain their lifestyle as long as they do not go on vacations every week.

I am very sure, many would now argue that the inflation is going to chip away a lot of the money or the current belief is that Ringgit’s devaluation would be continuing and all of us would die of starvation because we could not afford imported food. Please, go and take a look at the exchange rate of RM vs Yen over at least past 15 years. If because of the current devaluation, all Malaysians would die of starvation, I do not know how to explain why Japanese are still quite okay today. By the way, for those who are lazy to check, the actual difference is negligible. Yes, I think we may want to read more about investment and not simply listen to some Facebook comments and make a decision to rent since Malaysia is going bankrupt soon. 🙂

Oh yeah, coming back to start saving as young as possible. Hence, in whatever we do, starting as young as possible is always the best. This applies even if we are buying an undervalued stock or even unit trust or REITs. Besides that, getting a home loan with a 40 year repayment period is a HUGE difference compared to one with a 20 year repayment period. I do not wish to even talk about those arguing that if we were to take a 40-year loan, the total interest paid at the end is MUCH higher. Truth is, the extra savings per month that I have from a lower repayment, I can easily use it for other investments which may provide for MUCH MUCH higher returns. If we could not control how we use this extra amount and would use it for useless stuffs like an iPhone, then yes taking a 20-year home loan is MUCH better than a 40-year one. Haha. Yes, I am still using my mid-range OPPO phone for the past 1 year and 9 months.

Okay, final conclusion is what everyone already know. EPF savings alone is not enough. Since we already know, the next step is crucial. Do we still enjoy as if there’s no tomorrow since everyone is saying live life to the maximum? Or do we enjoy responsibly so that we can enjoy more comfortably in future, when we have less money? No right or wrong. It’s our lives and it’s our right to enjoy it the way we want. Happy enjoying.

written on 2 Dec 2015

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EPF’s not perfect and not immune. I know.

I personally think returns from the EPF is good enough for me. Yes, I am speaking only for myself yeah. Surely some have better experience than me and some worse. Yes, I have been investing in unit trust for the last 15 years or more probably. It’s continuous on a monthly basis and I treat this more like a long term savings instead of taking an active approach for it. The average returns from all these funds are identical to what EPF has been giving to me.

So, I think it’s okay not to touch the EPF but to use our savings to invest in more wealth generation investments instead. Yes, I have also withdrawn some funds from the EPF and put it into approved unit trusts but the return has been lacklustre thus far. Bad decision on my part for this and perhaps bad timing. Anyway, it’s not so positive for EPF’s results currently. It has lost over RM8 billion in the stocks which it invested in recently.

Article in themalaysianreserve.com
 As at end June 2019, Employees Provident Fund’s (EPF) investment in 191 stocks has dropped by RM7.9 billion because the local equity market was affected by poor corporate performances and global uncertainties. EPF is Malaysia’s largest institutional fund with over RM730 billion in investment assets and the fifth-biggest national pension fund in Asia. It is the th largest pension fund in the world and has a total equity assets of US$35.9 billion (RM149.7 billion) under management through 249 securities.

A compilation by
The Malaysian Reserve
on Wednesday showed that the total equity value of EPF’s stocks declined to RM149.94 billion compared to RM157.87 billion at the end of the second quarter this year (2Q19), erasing RM7.93 billion in total value. EPF has also warned that the market conditions for the rest of the year would be extremely challenging and volatile.

The fund’s largest exposure is in the financials (38.1%) and consumer staples (15.2%). The remaining include Industrial stocks with 9%, utilities with 8.7%, energy industry with 4.6%, and healthcare (3.4%). EPF’s smallest exposure is in the technology sector with about 0.6%. The article has much more details about EPF’s investments and its return from individual stocks. Please refer to the
Article in themalaysianreserve.com

With a volatile stock market, its going to be tough to stay positive where equity is concerned. However, what EPF has which many may not will be holding power. This is the same as property. Two persons buying the same property may not have the same returns because when the market suddenly dips, the one who could hold will hold while the one who could not hold will sell. Thus, one will lose money while the other may sell when the market becomes positive again. Remember yeah, even the Fixed Deposit rate is now less than 4 percent. Lets have right expectations when EPF declares their 2019 results. Happy deciding and feel free to withdraw and invest in some funds which you believe will do better than EPF this year.

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