yes it will.

i dont believe in those types of "investment".

what youre saying by taking that loan is.. i am willing to invest my money FROM THE FUTURE to make more profits than i could by investing the money that i have NOW. The problem with this philosophy is no one can predict the future. If anything bad happens and u need the money, your "investment" will burden you further. Everyone wants instant gratification, but thats not how investment works. Not in my eyes at least.

thats around 50% savings.. (alot)

if u have accumulated enough savings to backup your annual expenses 3300 x 12 months, then u should stop saving.. and start investing.
personally, i would create a portfolio consisting of 30% property, 30% bonds, 30% stocks, 10% precious metals.. but it all depends on your risk portfolio.

some points i have on my mind..

1. save money for 30%-50% down payment house
2. buy house with with loan tenure of 5-7 years. Buy only house at price max 2.5 x annual salary
3. continue saving and plan to start your business, learn how to sell during mortgage tenure. aim 25K savings every 5 years.
4. after 5-7 years u are now debt free.
5. buy 2nd property or start-up a small business for passive income with the 25K savings.
6. aim to increase passive income until u succeed and dont need to rely on your job.. aim for financial independence as fast as possible.
7. rinse and repeat.

using unit trust/investment can get u rich by the age of 50. thats a waste of time and opportunity.
better seek to set your own business and seek 100%200% ROI.
life is too good to waste on cutting coupons and being thrifty all the time.

This post has been edited by myvi5949: Jun 30 2011, 01:10 PM

1. Put in a conservative investment account like FD, sukuk, asw, asb. this is saving not investment. think of investment only AFTER u are debt free and have enough emergency money.

2. Most good financial adviser use 2 - 2.5X annual salary to determine affordability. if you go higher than 2.5x you are risking defaulting on your loan. Back in the 80s they use this figure and they dont ask people to have put zero down on their down payment.

3. let say your income is 2.5k, with house loan 6 years at 30% down payment you aim to buy 50K house. the monthly payment will be RM600. assuming you can save RM800 a month for 10 month for 6 years (800x10x6=RM48,000). Thats already MORE than RM25k. Use the rest of the saving for business capital or to increase your education or buy a second hand car. Can you live on RM1000 a month? I dont know about you but I could.

This is just my way of doing things. This plan is for financial independence. Meaning you aim to be debt free first and work out your way to financial freedom. Using leverage to get a "free" house is risky for me..why?

1. It is a plan under many ASSUMPTIONS and RISK. assuming u can get tenant. assuming your tenant pay the utility bills. assuming tenant wont make stupid business in your house. assuming you can still pay your house 15 years in the future. assuming you still have a job in 15 years. assuming you still healthy and not dead in 15 years time, assuming property price will continue move up... well u get my point.

2. there is no actual "free" house. you are paying interest to the bank. youre slave to the bank and to your employer for 15 years.

3. opportunity cost.. losing the opportunity to accumulate capital and start a business. Most people dont start a business because they are tied to jobs and loans.

4. losing TIME. Time is your biggest asset not money, who wants to be millionaire by the age of 60 or 70? I certainly dont. Why not be rich and do what you want in your 30s or 40s? Getting rich slowly using compound interest is a waste of time and opportunity.

This post has been edited by myvi5949: Jul 1 2011, 06:45 AM

Property is a form of investment. But i dont like people with no homes who just started their first job to directly buy three RM100K house. Thats reckless. When everyone want to be a "property investor" this will create the illusion of demand. Price doesnt reflect demand in some segments. Its a game of musical chairs, the rich getting richer poor gets poorer.. we have seen this before. We all know what will happen eventually.. I only get into an investment when there are blood on the streets not when everyone rushing to buy property at these ridiculous prices.

and it is assuming u can get tenant. assuming your tenant pay the utility bills. assuming tenant wont make stupid business in your house. assuming you can still pay your house 15 years in the future. assuming you still have a job in 15 years. assuming you still healthy and not dead in 15 years time, assuming property price will continue move up... well u get my point.



This post has been edited by myvi5949: Jul 1 2011, 11:12 AM

I think it depends on what you going to do with the extra cashflow if you settle the loan. If you can invest in something that generates higher return compared to the car loan interest then it would be logical to settle the loan. But it all goes back to your priorities in life and your financial goals.