Thanks!!

hi avatar123,

I did my own calculation but not using XIRR and came to a figure out about 4.06% effective interest per year. In my opinion, this is very good and low cost of loan, even lower than housing loan which I think is lowest at this time (4.4%?)

I think this is your company benefit, something like a financial assistance plan - I know because one of my previous companies also offered same benefit

While it's a good deal, you need to find out these:

1. What happens if you leave the company BEFORE 3 years is up? (or if company let you go, hopefully NOT!) Repay balance one lump sum? What if you do not have that amount to repay at that time?
2. Is this benefit taxable? i.e. reported in EA form? If yes, then you need to factor in that 'cost' too.

and like others have said, you need to make sure you have the discipline to handle the extra cash. Don't spend it, but instead invest it, even in something low risk like bond so that you can hopefully get better than 4.06% returns pa until the end of the 3 years.

P/s : I'm new in this section of the forum, but have been reading/learning a lot about personal finance. Even remember reading an article in personal money by one of the forummers here

Follow AFISH formula,

A- ASN, ASB, ASW2020, Sukuk, bond, etc
F - FD
I - Insurance
S - Share
H - House / Property

how much earn is not a real concern. It is like seizing opportunity. Good time saves more, bad time recession history shows almost 8-10 yrs once, shares goes down buy more, if enough cash buy property - commercial or residential get one for passive income - rental

stinky tauhu business I not yet start.. that is why I just calculate my net profit savings per year that I set is RM25K, after minus everthing personal expenses, etc

parents rich will inheritage at least one residential and one commercial property to take care of inflation- father said so....

At the moment I planning to go for another property around RM200K just waiting for recession time. If to buy a RM400K property- I will move in there to stay, I will pay downpayment RM200K and borrow RM200K, the existing condo rent out to finance the installment of the RM200K...I like financial freedom...continue with my plan the RM2K savings per month without fail ..

if suddenly company lay me off, i just pack my bagpack and go back hometown just add a pair of chopstick eat only...passive income from rental existing condo and some cash in hand interest should be able to sustain daily expenses..Siu sa go back hometown become juru ukur tanah...wait for recession to go away in same time can do business like selling stinky tauhu, etc

Second stage - I follow my parents steps , acquire property in cash that is hard earn and savings one... then holding power long collect rental to sustain life.. if price property go up high high sell lo, keep the cash, wait for next recession time enough money to buy 2 more. I hope I can buy a property every 10 years lo... Now 33 yrs old got 1 oledi, plan to get another 1, at age 43 get another 1, at age 53 get another 1.. Think about it also happy got 1+1+1+1 = 4 properties liao at age 53

I have a target is to achieve RM2 million in 10 yrs time earlier mention the plan + ( 1 hse + 1 commercial shop - this one dunno when can get, no hurry one) inheritage from parents to retire... [coz with 2 million either I cash out] or [existing 2 property I just rent them out and with around RM300k cash and move back hometown] stay with parents to look after them..


I calculate very simple to achieve the financial freedom

RM2 million 5% interest is RM100K
RM100K divide by 12 months - Each month around RM8K, should be sufficient for daily expense for retirement? don;t u think so?

I now like savings RM2K per month I also can live, if I have 4X more money to spend, should be able to happily retired right?

Do inflation happens 4X?

Of course in real life, I do not hold all RM2 million in cash, I put some in property, some in shares that gives good dividen like Public Bank shares, some in bond, here n there..

So u see based on my calculation got so many properties, but I need to diversify my financial management.....I do not like to call it investment because I prefer min. risk type.

Later I go back hometown, I go meet those millionaire old man sitting at coffee shop every morning to ask them more advise on financial management...

they also very kiamsap one...

they go jogging every morning, then go coffee shop order kopi o satu, sit one table together read newspaper for free, chit-chat with friends and enjoy the fan for whole morning...They tell me cheap lo just need to pay the kopi o one glass only ma, can read newspaper and enjoy the fan..home no need order newspaper and waste electricity on fan...can enjoy some more chatting with friend..then 11 smtg the go round round their business...Crazy lo...u see their Ah Mat come big car benz pick them up one..

then we one day talking how long do u use the soap (sabun). I tell them I use till very thin, then I throw away already...they laugh at me...They tell me the secret to become millionaire is u stick the thin soap onto a new soap and continue using till the end no waste....HAhahahaa......No wonder they so rich...they really practise a simple life yet when look at their lifestyle they really pay attention to details on waste management...

these are my heroes.... Except the mercedes part... Unless of course the benz is a tool for them to earn even more money (vs just a status symbol)

Huh,,,they shared with me too the story on the benz part...

early stage when they do business, cash not enough, thus need to buy benz big car hire ah mat - so they can easily secure loans financing from banks, relatives, along, etc. They aka bank, along, relatives etc will not rush him to pay back quickly, coz look at his life style got big car where can be no money or pokai one..so they just pay back loan in a timely manner..

later stage, money too much dunno where to spend, they ask their accountant calculate lo, instead give govt tax may as well buy big car and sit lo...comfortable and nice status too..



This post has been edited by AAAABBBB: Jan 23 2013, 11:42 PM

Yeah exactly, they use the car to make more money (in early stage) instead of just getting it for the sake of it and for status symbol. So in a way can be considered an asset in their business as they get more deals...

Secret to becoming a millionaire is "stick the thin soap onto a new soap"?

That thin soap is a tiny piece of a one whole complete soap, which costs say (very expensive) RM5. So the small thin soap costs about say 1/20th of RM5, which is 0.25sen.

Let's say you use 1 complete soap every 10 days, so you save 0.25sen very 10 days. Equals to savings of Rm9.125 every year. You save that for 100 years, that would total a savings of Rm912.

So from an arithmetic point of view, saving RM912 over a lifetime is NOT GOING to make you a millionaire. You would probably die before 100 years, so that saving is going to be less.

Maybe there is a problem with my arithmetic. If so, please let me know.

Do u notice I put the word "practise a simple life yet when look at their lifestyle they really pay attention to details on waste management"?

They just give a simple example to test ppl IQ, live simple, pay attention to details on management, for example if you own a business, stationary etc no matter how small it is you are still forking out money to buy them. If u can pay attention and managed them well you can be successful and business/company can earn more profit.

every cents count is the moral of that story.

This post has been edited by AAAABBBB: Jan 24 2013, 12:15 AM

Did you notice how I pointed out your example to "becoming a millionaire" doesn't add up.?

Who are they trying to "test"? Before I pointed out why it doesn't make arithmetic sense to give a "soap" example, you sounded like you fell for it, hook, line, and sinker.

Did they fool you? If not, why are you giving an example that makes no sense?

Who are you trying to fool?

Whose IQ are you trying to test by posting the example?

By the way, can you give real Financial examples that make sense? This is a Financial tread - if you want to post Morals, go post somewhere else.

This post has been edited by howszat: Jan 24 2013, 12:41 AM

No need get mad bro . This is financial management, I do give real examples what millionaire think differently. To understand their success and mentality.

Actually this link below come out sometime in Sep 2012. The one I discuss with those milionaires to understand their thinking was sometime in year 2000 like the example of the soap. Indirectly the millionaires are sharing with me his lifestyle and how he success.

Just sharing

http://finance.yahoo.com/news/21-ways-rich...y.html?page=all


Look at example 12 & 13

12. Average people live beyond their means. Rich people live below theirs.

"Here's how to live below your means and tap into the secret wealthy people have used for centuries: Get rich so you can afford to," he writes.

"The rich live below their means, not because they're so savvy, but because they make so much money that they can afford to live like royalty while still having a king's ransom socked away for the future."


13. Average people teach their children how to survive. Rich people teach their kids to get rich.

Rich parents teach their kids from an early age about the world of "haves" and "have-nots," Siebold says. Even he admits many people have argued that he's supporting the idea of elitism.

He disagrees.

"[People] say parents are teaching their kids to look down on the masses because they're poor. This isn't true," he writes. "What they're teaching their kids is to see the world through the eyes of objective reality––the way society really is."

If children understand wealth early on, they'll be more likely to strive for it later in life.


I like this
18 Means for Living Below Your Means
http://www.marcandangel.com/2008/10/20/18-...low-your-means/

This post has been edited by AAAABBBB: Jan 24 2013, 02:18 AM

No, not mad

But many questions. Did you notice all the question marks? Just because millionaires share their lifestyle, it doesn't mean all their tips will make you rich.

Being able to discern which are applicable, and which are not applicable is far more important I believe, but it looks like you are not that fussy about that distinction.

PS: Just saw this from your link,
Wouldn't that suggest you should not focus on saving that small piece of soap?

This post has been edited by howszat: Jan 24 2013, 02:30 AM

yup. I did notice those question marks. But when I share the soap story, it is not like 1 millionaire agree to it. But almost all of them agree to sticking the thin old soap to a new soap and continue to use till the very end.

Even millionaires live below their means. Why? They are also worried that they may ran out of money.

The soap is just merely an example or something small that everyone use everyday, but how often do we pay attention, think creatively how to maximize it. But those millionaire can give such an innovative and creative answer, that is the key to their success.

In financial management, most important is belief. U able to come out an example although it maybe skew from other ppl norms, but the outcome results is achieveable, ppl belief and willlingly to work hard towards it. Just like earlier I share an example the millionaire give me guidance how to be financial free from 2 biggest headache in life - hse loan and car loan. She shows me how to achive those in 6 years through savings, I follow and success, now looking towards acquiring 2nd property by cash. The guidance work especially for fresh graduate.

http://www.freemoneyfinance.com/2012/05/ma...illionaire.html

http://money.usnews.com/money/personal-fin...nagement?page=2

17. Average people focus on saving. Rich people focus on earning.Wouldn't that suggest you should not focus on saving that small piece of soap?

I think here the millionaire trying to share is using the small piece of soap no matter how small it is , add to the big piece of soap you got a bigger chunk of soap to use. Bigger piece of soap bigger the earning right?

actually I admired 1 of the millionaire is he used to clean even the toilet. He tell me he is given a toothbrush to clean it. He did his very best to clean the toilet to become shinny. His boss enter the toilet, saw he did very well and later they become partnership. Small details like cleaning the toilet till shinny shinny what else can stop him from managing the team? he is paying attention to small details that eventually matter much in big decision making.

This post has been edited by AAAABBBB: Jan 24 2013, 02:59 AM

The soap story is must one of many. It's the mentality that is important, not the calculation on how much you save out of that soap. While i personally don't subscribe to such extreme ideas (maybe thats wh i'm not a millionaire... Yet) it's interesting to understand their thinking.

In the story, they also spend time at the coffee shop, drinking coffee, reading free newspaper, and using the shops electricity instead of their own. We may laugh at this as being trivial, but similarly with compounding interest, the effects will be there over a long period of time.

Rich ppl focus on high earnings AND living well below their means.
Poor ppl focus on spending what they have earned, now and future earnings.

There is no point earning high but yet spending is high too right? One will LOOK rich but actually have not much net worth. Look at well paid footballers and you'll see. Few hundred k per week, but yet some of them are bankrupt.

That book mentioned in the second link is a fantastic book. It really does give insight to how millionaires think and i think some of the principles can be applied here too. I mean, things like millionaires cutting out discount coupons, going for survey just to earn a hundred bucks, these are beyond my normal comprehension but it shows their mentality towards living well below their means and that is inspiring.

This post has been edited by poolcarpet: Jan 24 2013, 08:35 AM

it 's not about the soap laaa
it's way beyond that...u need to think outside the box
the school of thought based on this statement

Old ppl sit at coffeeshop drink kopi o drive Mercedes
Young ppl go Chatime drink bubble milk tea struggle to pay instalments for Myvi

Think...

No, it's not about the soap.

For many millionaires, their savings habit comes naturally and they tend to apply it across the board, for all items big or small or tiny. It's a natural part of their mentality, their thinking, their instincts, as someone already mentioned.

But for others, savings does not occur that naturally - it's something they have to make an effort to focus on. In such cases, it is better to focus on and start with the things that make can actually make a difference as opposed to things that are insignificant. Drinking kopi at a kopitiam as opposed to drinking at Starbucks is going to be far more significant in savings. One cup's savings will probably equate to many months, if not years of saving that tiny little piece of soap. Even more so if you drink regularly.

So, no, it's not just about the soap.

In my years of experience and talking with those old uncles at coffee stores. Sure they do know how to hustle and make lots of dough, but they rarely drive Merc and BMWs. This is just a myth of those people who preach frugal living giving extreme examples to justify their position which is rather silly.

It is true however young people these days spend carelessly without giving a second thought.

Of course, the best is being able to drink as many chattime drinks as you want while owning a Merc but that is apparently out of the question in this forum so I will refrain from sharing that lifestyle.

This post has been edited by Beachkid: Jan 24 2013, 08:27 PM

There are a few kinds of millionnaires. The most important is what are they giving up to earn or store those millions.

The millionaire next door (Stanley and Danko) which is what MOST of the percentage of millionaires are made of.

and

The lavish millionaires which do not have to calculate the price of a soap bar to become a millionaire. They make 300 000 a month minimum and can enjoy life based on their freedom without subjecting themselves to miserly acts.

Secondly, I can't debunk this myth enough:

Those old uncles drinking kopi-o with kaya bread reading newspapers are rarely secret millionaires. This is some romantic fantasy those frugal Malaysians teach us. It sounds nice on paper and it sounds like an inspiring story but to be true-if you have time to sit at a coffee store 6 hours a day smoking and talking with your buddies, you are probably a taxi driver or beca man.

If they ARE millionaires they are the exception not the rule.

Compounding interest will not make you millions if you do not have large capital. You will only make probably 4 million when you are in a wheelchair at an old folks home.
Compounding interest will make you a millionaire with big initial capital. This will rocket you to a millionaire by at least 30 years old or younger.

Yes that is correct: But I will add some other individuals:

Rich people with a rich lifestyle( freedom and choice)=have high earnings, high savings, high spendings(if they choose to)-the best

Rich people with poor lifestyle=have high OR low earnings, high savings, low spendings

Rich people with rich lifestyle ( but in deficit) =high earnings, low OR deficit savings, high spendings- like footballers/moviestars that are bankrupt

Poor people with rich lifestyle (deficit) = have high OR low earnings, low OR deficit savings, high spendings

Poor people with poor lifestyle-have low earnings, low savings, low spendings

There you go. Life is not about money alone-you must see what the money makes for the individual.

So yes,
There are millionaires who buy secondhand clothes, second hand cars and eat frugal everyday.
There are millionaires who buy supercars who are up their nose in debt and are soon to be bankrupt.
There are millionaires who have supercars OR secondhand cars if they choose to and after all that still have 10 mill in the bank.

Which millionaire do you want to be?

This post has been edited by Beachkid: Jan 24 2013, 08:46 PM

So if an individual can drink kopitiam in the morning. Then he decides to go for a frappe at starbucks in the afternoon.

After 20 years of doing this, he still has more savings than a person drinking kopitiam exclusively AND the person drinking frappes exclusively.

Wouldn't this be the best reality?

This post has been edited by Beachkid: Jan 24 2013, 08:42 PM