1. Feature Article

Jumbo Answers

Since it proved to be a hot thing, I’m answering more questions this month.

As usual, the questions are presented the way they came in - broken English, wrong grammar and all.

Enjoy!

1: My goal is to attain financial freedom latest by 55 (I’m now 30). I’ve read your books and attended your seminar on property investment. I’m really passionate about property investment and have bought my first rental property under market value. My question is: is it realistic to just depend on property investment to fund my monthly income during retirement (assuming I know exactly how much I need to retire with)? I’ve invested in unit trusts but I plan to have the bulk of it in rental properties.

A: Property investment is excellent. This should form the base of your investment plan. At the same time, you’d do well to invest in stocks and unit trusts. It will complement your plan.

Most important of all, continue your financial education to improve your knowledge on the subject.

2: I just received a license from FMUTM to become a Unit Trust Consultant. Which I have seen one of my friends now driving Mercedes since they got involved in this Unit Trust. What I’d like to know:

a) Is it good for me to quit right away and do full time U/T consultation?

b) Or should I just stay in this company and start doing U/T consulting part time first?

I would be grateful to receive your opinions on my questions.

A: Do it part time first. This way, you can find out whether being a unit trust consultant is for you. If you’re making lots of money from it and you’re happy doing it, and then go full time.

What color is your new Mercedes?

3: This is my first time that I’m forwarding questions to you since you are the expert on property investment. I would like to invest in landed properties. Can you highlights on what are the cost and the hidden cost when investing in it? And how do I know whether the properties are worth investing or not?

A: The cost includes:
- price of the property
- legal fees
- stamp duty
- interest charge
- agent’s commission

The highest cost though, is missing out on one of the best investments if you do not invest in properties.

If it makes money - invest. Otherwise, move on to the next property.

4: I’m still confused where I should invest my money. I can put aside as much as RM500 monthly for saving but I don’t know which Unit Trust is good performer. Could you please give me suggestion or show me at least 3 Unit Trust in Malaysia performing well. Whatever your idea/suggestion in this field will be good words for me.

A: How I wish life was that simple! I’ll tell you what the top 3 unit trust funds are, we’ll make money together and live happily ever after.

However, life and investment are not like that. What is your objective in investing in unit trust - cash flow or capital gain? How long can you stay invested? Can you live with the risks involved? These are just 3 questions that you have to ask (and answer) yourself.

5: I am a Malaysian gyne, working in Oman on a locum basis (part-time). Here I only make 30 deliveries a month, shared by 4 doctors, about 5 cases outpatient a day. By 3 years, I am able to bring back RM1 million, will have time for myself and do not have to wake up at odd hours to conduct delivery.

I am in the mid of making decision of what I want. Probably in Oman I will get money and most precious is time and undisturbed sleep. And I feel proud as they accepted Malaysian qualification.

What’s your opinion?

A: If you are happy, then stay in Oman. You make a lot more money while working a lot less. What could be better?

6: Is bank share a risky investment?

A: Any investment is risky if you don’t know what you are doing. Do your homework first - read at least 10 books on the subject - and then invest. If you think that is a lot of work, then don’t blame anyone when you lose your money.

7: I have a few questions regarding your latest book.

a) You mentioned that if we have RM100k, we can buy 10 properties with RM10k down each. My question is, is it possible to get bank loan for 10 properties?

b) banks will only approve loan – installment for one-third of our salaries and if I’m getting RM3k per month I can only get bank loan that requires me to pay maximum of RM1k monthly. Can you enlighten me on this part, please?

A: Firstly let me clarify the statement again. I stated that it is possible to buy 10 properties with RM10k down in theory. I’m not asking you to do so because you will not be ble to sleep!

And two, you are right. Banks will grant a loan with monthly installments of up to 1/3 of our income. If you have any other consistent source of income other than your salary (e.g. rental income or royalty income), they may consider that as well.

8: I’m approaching 45 (in Sept), I have 1 car which has been paid for, I rent an apartment @ RM 750/mth. (I don’t have a single house), I don’t lead a lavish lifestyle nor a frugal one. I travel on average once a year (the trips abroad cost me a bomb), my take-home pay is RM2.3k (unfortunately), I have some savings (about 20k) and my EPF is about RM110k. Is there any chance I can get to your planet? Btw, I’m single (lucky me).

Also, are unit trusts safe nowadays? (Someone approach me 2 weeks back) and is it wiser to buy a ready property and move in rather than pay the bank (they are more expensive though).

A: Generally speaking, the advantages of buying a completed property outweigh buying off-the-plan. Firstly, the house is completed! You cannot guarantee this with a new development project.

Next, you can have a better choice of location. Just about the only drawback is that you have to pay a little bit more. Still, the extra money is worth it in my opinion, considering all the advantages.

And like I wrote earlier, any investment is risky if you know nothing about it. Learn about unit trusts first before investing in them. You can find out more in my Handbook entitled, what else…”Unit Trust Investment”.

2. Quote of the Month

“If you are willing to do only what’s easy, life will be hard.
But if you are willing to do what’s hard, life will be easy.”

* T.Harv Eker *

3. Your Question Answered

Q: Where’s the best place to invest right now?

A: This is like asking “what’s the best way to raise a child?”. There are a million ways to do it, and all of them are right. But I can tell you this - invest in yourself. This may mean reading books, attending seminars, asking questions or even going back to school. This is a surefire way of getting the best possible return of not only money, but life itself!

* HOT TIP *

Read “Jutawan Era Baru” by Gobala Krishnan