Allow me to answer some of the above. EPF is part of your wealth, so why not? I believe you need MRTA more than life insurance, especially with your low cash holdings. I personally believe you need to be more discipline in the next few months to save more and to apportion some into FD as well.

No, you do not need to convert your properties into a Sdn Bhd. The costs involved is not worth the hassle. Plus the act has been changed recently that expenses for that unit can only be deducted against the rental for that unit unlike previous property investments companies. So no tax benefit. The only benefit would for succession but you are still young so no need to think too much about it.

---

Added on April 10, 2011, 1:06 amWithout knowing your monthly cash flow, it is not easy to work out an ideal but let me give it a try.

Your Condo A installment seemed to be on the high side, you might want to consider asking the bank to reduce your interests (currently the market rate should be BLR -2.3 to -2.5. It is yielding around 5% without taking into account of your management fees and other outgoings, so the yield could be potentially lower. Personally for me, 5% yield is very low. Since you have quite a number of properties, I believe you do want to build up your passive income then you seriously need to reconsider your property investment strategies. An ideal yield should be around 8% or more.

Your Condo B seemed okay but again yield is on the low side.

Condo C, even if it is not fully paid up is yielding good at around 8% (sorry cannot be bothered using calculator.. hehehe)

D, cannot comment since no data.

Being in the sales line a big part of your salary would be commission base, so there are some risks but I am sure you know how to take care of yourself.

Overseas Land banking in my book does not work, so I personally would suggest moving the investment to other more profitable investments. Palm oil I believe would be country heights scheme? coz for RM25k, you cannot even buy 1 acre of palm oil land. It is okay to invest in this for diversification but i won't suggest you into putting more money into it. Wawasan is paying good interests, so it is handy to keep some. UT is something I do not favour as I would personally advise people to buy blue chip shares. You get more dividends and possible capital appreciation.

Info I need: who owns what? condo A, B... so that you can plan your property investment better for future. What is your net cash (income minus all expenses beside your rental income).

In summary from the info I can see, I believe your most important goal is to build up your cash.

This post has been edited by michaellee: Apr 10 2011, 01:06 AM

Hi Michael,

When you say yield is low, how do you make it higher if it is already rented out at market rate? Do you recommend maybe fully furnish it to up the yields?

Thanks

---

Added on April 10, 2011, 10:15 amThis post has been edited by kaiserwulf: Apr 10 2011, 10:19 AM

Hi michaellee
Thanks for a depth analysis on my current investment.
Just wonder ,how should i calculate the property yield / ROI of a prpoerty
For Example When i bought Condo A (200k) at that time is giving me 1,260 rental (nett =after deduct maintenace fees) which giving me 7.5% right?
Now 7 years later still giving me the same rental rate at 1,260 (market rate) ,however my property value have increase to 300k.If i base on
latest value it only give me about 5% from the rental value.So is that mean , i might consider to cash out and move into move higher yield
investment.

Is that impoartant to detrmine who own what ?
Here is the breakdown
Condo A -My self
Condo B - Joint Name
Condo C -My wife
Condo D -My Name
Condo E -Joint Name (own staying_

Land Banking -My Wife
Palm Oil -My Name

My nett cash is about 1.5k to 2 per month.

Hi Groggy
Thanks your value advise .For sure will look into my cash flow (FD) for the next few month Ah need more Discipline


Hi kaiserwulf
Ya my company too give the sames epf contri for commision and +4% from employer.

Aganints Thanks to you all the for the valuable advise.

Age: 24
Occupation: Student (graduating in May '11)

Assets:
FD- 111k
Tabung Haji- 130k
Sukuk Simpanan Rakyat(gov bond)- 50k
Sukuk 1 Malaysia(gov bond)- 50k
Invest some in swiftlet farming- 10k

Liabilities:
Japanese car(market value 50k, fully paid)

Once I start to work, I plan to move my FD monies into tabung haji which distributes dividend around 4-5%. However, is that a wise thing to do?

Plan to dump the bonds into mutual funds once the bonds mature. Again, is that a wise thing to do?

Am planning to buy insurance/takaful(life & medical) but with soo many choices around, I've got no idea which to choose from.

Kindly advice and thank you in advanced

Yes, either you spend minimal to maximise the rental OR dispose and acquire others which are higher yielding. But in doing so, there are of course risks and added costs.

---

Added on April 10, 2011, 5:13 pmDamm, the internet.. heheeh had a long reply for you but all gone.

Ok. ROI. I believe historical costs might not be the right way as it does not give a true picture. an extreme example would be a shoplot bought 30 years ago at RM100k now being rented out at RM12k a month. That means yield is 120% but if shoplot now costs RM3million, suddenly current yield is 5%.

There are ways of enhancing a property's value. You could either cash in and buy another place with better yield (can be risky too). Or you could redo the unit and then maximise the return.

knowing who owns what is quite important. For example, if you are planning to buy another property, perhaps your wife could transfer her 50% in either B or E to you, so that the next property if 100% under her name, she could still qualify for 90% LTV. If she transfer both B & E to you, then she could buy another 2 more under her name with 90% LTV.

One thing, you do need to get some cash at hand. Your net cash per month is quite good at 1.5k to 2k. Assuming it is 1.5k then you should have around RM18k a year. But holding RM5k now is kind of low. You need at least 6 months of total mortgage repayments at hand to ensure that you are prepared for adverse situations.

---

Added on April 10, 2011, 5:15 pmI think your car is an asset as it has been fully paid up and it is a gift to you.

I presume all the monies listed are gifts to you?

Rather than moving FD to tabung haji, you can consider buying properties with some of the money for investment purposes. Your parents have not bought any insurance or medical for you? No point to overspend on insurance.

This post has been edited by michaellee: Apr 10 2011, 05:15 PM

Mike, could you advise on mine? Cheers.

For 2.5 years effort, it looks good especially on the EPF side.

Personally, I have not touch stocks and not planning too on any big way. But I believe if you play blue chips, it can be good investments. Not sure if you should go into speculative shares. Personally, I have been concentrating and putting all my eggs into properties and so far it has worked out well for me.

(1) I would not spend too much for my own stay, with the assumption you are not married. Depending on your salary bracket, I would say if you can find some low or middle cost apartment which normally brings quite good yield, easy to sell, get that as your first unit. Maybe not to stay but to start off your passive incomem adventure. Your proposal of 100k for renovation would wipe out all your FD and stock UNLESS you are planning to get it from "somewhere". RM400k house would mean repayment of RM2k (quite high).

(2) Again, unless someone is funding your car purchase, avoid getting an expensive car. A cheapo Malaysian made car of around RM50k would does the job just as well. But again, it is your personal preference. Remember a car is more of a liability than an asset.

(3) I wish you success in this venture.

(4) As per above, good luck.

So far they are blue chips. Apartments in Penang for 1000+ sqft cost around 350k (if youre lucky) and up. Please blame speculators and subsellers. On the side, reno won't start until I start to move in years after- I nid to feel safe having own home first and I put the number there just as a target renovation goal. If 200k around like you suggest, I would be thinking youre referring to Klang Valley area which I am not keen to invest unless I am living there.

Speaking of properties as investment, as is with stocks, it is only worth that money when you cash out- which frankly I think our market right now is overpriced. At a later stage, personal appetite would be on agricultural investments (farm, PO, rubber etc) because I believe them to be fundamentals in any market.

Would you agree with me that capital growth is crucial for a sub 30 year old person? Damn open to any opportunities for this. Businessmen, people with good track records, hear ye hear ye! This man here is open for partnership and ideas! PM me

Salute you and at the same time wondering the ways where u could have saved plenty of money for FD, Bond etc...where u manage to get or earn the money source from?

Yes, most of it comes from my dad. I only managed to save up to 22k for 3 years ever since I started my degree.
Speaking of properties, many new housing developments(shah alam, klang, putra heights) are priced at 400k and above.
I don't think I can afford one with that price tag just yet, which makes me depressed.

22k for 3 years wasn't really bad, are u under scholarships or u work part time during your break?

I would presume it is savings from allowances given by parents which if true is still admirable. Most teenagers nowadays would spend everything given that it is a very material world.

Kokkeehouw,

Being business does not mean must be Sdn bhd. You can be in business as a a sole proprieter.

Xuzen

---

Added on April 11, 2011, 3:27 pmHow much does one need to go to Haj? Is RM 130K enough (i think with RM 130K can go for two trips lar). Therefore it makes no logic to move from FD to Tabung Haji - 3% to 4% is not logical.

You have very little actually no equities exposure. You are too overweight in fixed income. You need to rebalance your portfolio by divesting into a higher percentage in equities.

Xuzen

This post has been edited by xuzen: Apr 11 2011, 03:27 PM

Sole proprietor for properties? I think the bank will tell you to use your individual name as it is the same.

Dad gives me RM 1k for my monthly allowance which is used for rental, utilities, petrol, food and miscellaneous. Normally I save RM200 - RM300/month.
I don't work part time during my break coz my break is short, 3 weeks the most.

Yes, I've seen some of my friends who are under ptptn loan splurge the money to buy new clothes, shoes, handphones etc. Sometimes I envy them coz they're able to spend lavishly. And they teased me for wearing the same old shirt, same snickers and using an old school handphone.

As of right now, it is RM 10k per trip. That does not include any compulsive spending once I'm there. But I planned to have RM 15k for my haj in say 10 years time as the waiting list is long.

I can't agree more, however, am not willing to invest into mutual funds due to high(I stand corrected) management fees and annual fees. Been looking at Pubic Ittikal (public mutual) for quite some time now.

And to invest in equities, I do not know which broker should I use as there are many out there. I've heard stories from my tutor and friends, where the broker will simply call you up and suggest to buy/sell just to earn commission.

If you save RM200-300 a month, it would mean around RM10k max for 3 years effort. In between you received "well behave" bonus? hehehe

---

Added on April 12, 2011, 10:22 amSo sorry I am not into shares, so cannot comment much on them. I supposed Penang is getting expensive for everything. I guess you have your finances planned. Good luck in your quest!

This post has been edited by michaellee: Apr 12 2011, 10:22 AM

You can say so. Lol. Monies from duit raya and kongsi raya. Unfortunately I don't receive any for deeparaya. Besides, I have sukuks' coupon credited every 3 months.

i worked for almost 2 years now.
most of my money is placed in FD... around 10+k.
bought 1 kancil to rent to people and i am driving another national car.
finished paying for both car independently (both second hand la)
got 2k worth of share but not performing.. just to try out and collect dividends.

any suggestion on how i could improve financially? Seems that both my car is worth 40k but cash wise..i'm not performing.

minus the epf la... that's for my retirement tho long way to go..

Already 30 yrs of age but my net worth like very little.

Saving = 5K
FD = 30K
UT = 32K
Wawasan = 22K
Stock = 7K

Loan/debt = Nil (Car loan cleared)

Currently looking for a house. Not easy to find reasonable price house here.

How to increase my saving?