Salam semua,

Got this email from Azizi, and have some tips to share with you guys…

—–Original Message—–
From: millionairescoach@getresponse.com [mailto:millionairescoach@getresponse.com] On Behalf Of Azizi Ali & the M-Planet Team
Sent: Tuesday, August 28, 2007 5:38 PM
To: Mohamad Radzi Nazri (CJ/ESM)
Subject: Your Sept M-Planet Ezine Is Here!

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MILLIONAIRESPLANET EZINE
money . success . freedom
Sep 2007 Issue #61
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By subscription only! Welcome to the latest issue of
“MILLIONAIRESPLANET EZINE”

You are receiving this newsletter because you requested a subscription. Unsubscribe instructions are at the end of this newsletter.

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IN THIS ISSUE
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1. Feature Article
2. Quote of the Month
3. Your Question Answered
4. Special Offers
5. New Books from Truewealth
6. Latest News from TrueWealth
7. Disclaimer
8. List Maintenance

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Making Millions From Swiftlet Farming Mini Workshop is back!
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Due to popular requests, we are going to run the second “Making Millions From Swiftlet Farming Mini Workshop”.
Those of you are interested in finding out how to get into this high demand, limited supply (and cash upfront) business, this is your opportunity to do so. Be advised that your investment for this mini workshop is only RM490 compared to RM2,000 for a full day workshop.

Full sign up details is at:

“http://www.MillionairesPlanet.com/swiftlets.htm”

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1. FEATURE ARTICLE: More Answers to Your Questions
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I am great fan of your writings and advice. They have been most helpful. I will share with you a brief background of the properties I own and my financial standing:

Age: 29 years old
Current Savings: RM40,000
Salary: RM6,000

Properties:

* Desa Coalfields, Sg Buloh (Double Storey Corner lot with
land) Purchase price RM 278,000
* Monthly repayment: RM1,437.90
* Company Loan 100 %: 3.5 % for the whole 23 year tenure of
the loan
* Prima Pelangi, Segambut Dalam (Condominium) Purchase price
RM148,000
* Monthly repayment: RM357.00
* Overdraft and Loan of RM85,000: 7.1 % interest for 20 yrs
* Desa Saujana Sri Kembangan (3rd Floor walk Apartment)
Purchase price RM 103,000
* Monthly repayment: RM367.00
* Loan of RM50,000: 6.75 % interest for 28 years

The house is for my future stay and while the other two are for investments. Prima Pelangi is making me a small return while Desa Saujana I am losing money but it is manageable.
Prima Pelangi is being rented out at RM900 a month while Desa Saujana is being rented out at RM500.

Now coming to my question there is a condominium property in Wangsa Maju that going for RM180,000. It has the following benefits:

* 5 minute walk to LRT Wangsa Maju.
* Estimated rental at RM1,200 a month for unfurnished based
on current Alpha Angel Condominium market rate.
* A wide range of amenities nearby, from Jaya Jusco, schools
and lots of shoplots.
* 99 % sold only bumi lots are left .
* Near TAR college.

Downside:

* First time developer, from my conversation with the sales
person doesn’t know much. Concern about the defects.
* My findings at the forum it will likely be delayed.
* Have to add an additional several thousand ringgit in late
fees for loan approval.
* No much of documentation, I foresee a lot of chasing on
my part to do.
* High density.

Based on what you have read, what is your opinion. Should I buy it? Also the fact my other two properties have not met there yield standard yet, can I even afford to do this?
Aside for housing loans I have no other debts.

Your advice in this matter is appreciated.

ANS: Firstly, let me congratulate you on your fine achievement. From what you have stated, you are doing pretty well already when it comes to money. All you need to do now is to keep doing what you are doing (because your formula is working) and keep getting better at it.

Now for this new condo in Wangsa Maju. From what you have written, it appears that it has the potential to be a problem buy. The answer is simple - don’t buy there! Look for another property, one that will meet most, if not all of your requirements. It is not easy to find one of course, but that’s the difference between men and boys. Boys will give up the moment they find it hard but men will find a solution somehow. Look hard and then look harder.
Eventually you will find it.

QUES: Assalamualaikum, En Azizi. I have one question regarding tax. What is our obligation regarding the rented property? Do we have to declare the income?

For your information, currently I’ve purchased 2 property that giving me +ve income, even though not that much.

Thanks.

ANS: Yes, you must declare the income from your rental properties to the IRB. However, you can also deduct most of the expenses incurred for the properties. These will include insurance, repairs made to the property, assessment taxes, commissions paid to agents (if any), advertisements and the interest portion of the loan (if you took a loan). As you have a positive cashflow from the properties, the ‘profits’
from the rental will be added to your income from other sources (salaries, commission received, etc.). In other words, you will be taxed on the rental income.

I must add that you should not to worry too much about paying taxes. They are just a small part of a bigger picture. Worry about how to make more money.

All the people that I know who pay a lot of taxes do so for one nice reason - they are making a LOT of money. So you should be happy to pay taxes because it means that you are making money.

QUES: I’ve one concern and I would like to ask for your wise opinion on this matter.

Few months ago, a representative from a commercial bank approached me and explained to me on their “ASB investment”
scheme in which we can take a personal loan (minimum RM10,000 and maximum RM200,000) to invest in ASB.

The dividends and bonus 100% belongs to the investor and the payment period ranges from 3 to 20 years.

However, the interest rate is BLR - 1.75% (for the first 2
years) and BLR - 1.00% (subsequent years).

Is this a good investment or is it another “debt trap”?

ANS: The only time you should borrow money is when you can make more money with the borrowed amount. This is the case when you borrow money from the bank to make wise investments such as buying properties in selected areas or to grow your business. Or when you borrow money to further your education (as the higher degree will enable you to make more money).

However, there must also be a generous spread between the cost of borrowing and the expected return. For example, the interest cost is 8% and the return is 15% (or higher). You want this cushion, in case the actual return is not as projected.

Of course, if the spread is too thin, for example, if the interest cost is 8% and the return is 9%, you are taking a big risk. Although the maths will state that you will make money here, how sure are you that the return will not drop below 9%? If it does, and it can happen, you could actually lose money from the investment. Not a desired state of events.

Coming back to your question; you’ll probably make money from the deal as the return from the ASB is higher than the interest charged by the bank - for now. At the same time, the spread is getting thinner and thinner. One day, the return could actually drop below the interest charge although just like you, I hope that day never arrives.

Why not invest your money directly into the ASB every month?
That way, you avoid both the interest charge and also neutralise the danger of the return dropping below the interest charge. All the bonus and dividends are yours to enjoy.

P.S. That’s what I did myself.

QUES: I’m mid 40’s and saya berminat untuk buka business makan. Saya ada beli sebuah kedai baru dua tingkat berhampiran kawasan perumahan. Saya bercadang nak sewakan atau buka restoran menu Johor seperti mee rebus, mee bandung, laksa johor, asam pedas dsb. Saya keturunan Muar, Johor dan saya ada sedikit kebolehan memasak tapi tak mampu jadi tukang masak sepenuh masa kerana saya masih bekerja dgn kerajaan. Saya tidak boleh berkongsi rahsia resepi dengan tukang masak nanti boleh di sabotaj dan kalau dah pandai masak, customer ramai, mula demanding gaji pulak.

Wbpun, Perniagaan di situ nampak macam lembab tapi ada sedikit potensi. Saya juga nampak potensi restoran ala Kopitiam. Saya ada sedikit pengetahuan mengenai accounting, business mgt, insurance, cooking, interior design/decor, marketing, motivational skill etc. I’m confident I can run this kind of business but not on full time basis as I need a qualified runner. Macam Encik Azizi sayang nak tinggalkan your lucrative profession macam tu jugak saya sayangkan post kerajaan.

I cannot open a business merely because my hobby or ’syok sendiri’ and also because I dont have spare money to waste.
I am a determine person for that reason but until now I really don’t know what holding me back and still not pursuing that ‘urging’ interest. Should I pursue that entrepreneurship’s dream once for all or what? Do you have the answer?

ANS: Boy, you are in a real dilemma!

The obvious answer is to open a business on the sidelines while keeping your job with the government. However, it is also an obvious way to lose all your money in exchange for a lot of problems!

Running a business, particularly a restaurant, is a full time job. Even those people who are running it full time are having their hands full, so how can anyone cope doing it part-time?

While there are a few who have managed to do so, thousands others have failed. I can understand you wanting to be an entepreneur; I had the same burning dreams before. But until you are willing to let go of your job, it is best to let it remain a dream. Less headaches and problems that way.

However, if you are still keen, why not try a business that you can actually do part-time? Among others, being a unit trust consultant, insurance agent, joining an MLM company, becoming a singer or an author. If the attempt works i.e.
you make lots of money from them, then you may want to do it full time.

Whatever your decision, I wish you the best of luck in your future endeavors.

QUES: Hope you can explain to me further on this investment
plan. Why some say (you also suggested this) it is better
to invest in ASB than in unit trust? Robert Kiyosaki also
recommends investing for cash return than capital gain (ASB
gives cash return right?). I understand that when he wrote,
invest in capital gain is like gambling, predicting future.

If I invest in ASB in 2006, I will get dividend of 7.3%. If
I invest in unit trust, say Public Islamic Dividend Fund,
its 1st year Annualized Return is 30.94%. (The fund was
launched in Feb 2006. Figure from Public Mutual Quarterly
Fund Review, Qtr 1 2007). Their other funds too, (for
moderate risk funds, less than 5 yrs), show their
Annualized Return are between 13% - 40%.

I’m a bit confused why it is better invest in ASB? Because
of no-load fund? But return is better in unit trust (example
above). Yes I know past cannot predict future, and return is
not guaranteed, but example above make me wonder whether I
do miss anything anywhere? Appreciate your help.

ANS: Let me first answer your question by talking about
rates of return.

As you already know, rates of returns are measured on a
yearly basis. Further, rates of returns have to be compared
over a period of time, and not just for one, two or even
three years. This is because anybody can give a great return
in one year. It could be down to luck - the manager just
happened to buy the right stocks at the right time. So you
should not get impressed by anyone or any fund or any
investment giving a 20, 30, 50 or even 100% return in one
year. But to give such return year in and year out takes
skill, experience and knowledge. And not many people can do
so. The few who has done so includes Warren Buffett, George
Soros and John Templeton. For example, Warren Buffett’s
Berkshire Hathaway Fund gave an annual rate of return of 22%
for 40 years, and still counting!

While the funds you mentioned gave good returns this year,
remember that the Bursa Malaysia is at an all time high now.
Any fund launched last year will give exceptional returns
at this point in time. But can they do so every year for the
next ten or twenty years? Your guess is as good as anyone
else.

For a more comprehensive answer, please read my Special
Report entitled “Growing Your Money in 2007″ (ordering
details are on the website
www.MillionairesPlanet.com/books_specialreport.htm).

Still, at the end of the day, you will do fairly well
investing in either private unit trusts or ASB. If you can
do so consistently, you are already in the top ten
percentile of the population when it comes to money. Most
people cannot even save a single cent!

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2. QUOTE OF THE MONTH
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“In all cases, the idea is to cut losses early. You take
small loses to protect yourself from big ones.”

* Max Gunther *

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3. YOUR QUESTION ANSWERED
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QUE: Apt saya di kota d’sara berbaki hutang 25k.Saya ingin
membiaya semula 100k, wang ini untuk meyelesaikan
pinjaman peribadi 50k.Jika saya selesaikan skrg saya
hanya perlu membayar 40k,manakala jika 10thn saya
membayar 90k. perlukah saya buat pembiyaan semula atau
meyelesaikan rumah itu?

ANS: Daripada maklumat yang anda berikan, anda patutlah
membiayai semula apartmen tersebut dan membayar habis semua
hutang peribadi. Lebih pentingnya, gunakan wang lebihan 60k
itu dengan bijak. Sebagai contoh, melabur dalam ASB.

Jangan disia-siakan wang tersebut untuk pergi shopping.

Ingat yang setiap hutang yang diambil perlu dibayar balik.
Anda hanya patut meminjam wang apabila anda boleh menjana
lebih wang dengan wang yang dipinjam.