I would very much like to join u guys!!
Better get my FSM account activated lol
Anyone going from Puchong area? I'm not really familiar with KL

The activation process is very simple to be honest.
It was done within 2 hours.
Troublesome part is having to print out he form, sign it and scan it back to them (unless you use fax).

I am going from pj, taking the lrt..

yea i think i might do that as well. looking forward to it man

Guys, something to ponder on this weekend...

Have u ever worked this out

Investing in UTs vs investing in real property

Seems to me that the latter is beating the former

Assuming no further cash injection into my UT portfolio, at current IRR, it would grow at the rate of RM300++ per month.

Whereas some of my friends buying property for investment, their net cash outflow (loan repayment less rental income) per month would be a few hundred (less than RM500 I think), after 20-30 years they would be holding a property worth a few hundred thousand RM.

Let's say I pump up to RM500 into my UT portfolio every month and let it grow for 20-30 years, do u think I could beat or even match those property investors?

This post has been edited by Pink Spider: Jan 6 2013, 01:48 PM

My 2 cents:
a. UT is generally not leveraged Vs properties leveraged (usually to the hilt)
b. Thus, not proper comparison if generalized (leveraged risk vs unleveraged risk)
c. Try modelling IF U use leverage (20% down, 80% borrowed) for UTs
OR
modelling property investments' return WITHOUT the leverage - yes, theoretically coughing out at least $300K+/- cash
THEN compare

Anyhow, no assets class is perfect. Mix & match IMHO is the best (unless one has working crystal balls ).
Just a thought.

This post has been edited by wongmunkeong: Jan 6 2013, 02:07 PM

How about evaluating on purely cash flow basis? I.e. I cough out X per month dump in UTs, my friend also cough up X per month (net negative cash flow i.e. repayment less rental income), at the end of 30 years who will have the greater net worth?

Have u evaluated on this basis?

Leveraging in UTs...hell no

To be honest, I don't really like property investment because of the hands-on stuff (finding tenant, managing tenant, managing the property, legal stuff, etc)

This post has been edited by Pink Spider: Jan 6 2013, 03:25 PM

IMHO - no point evaluating U cough up $xxx pm for UNLEVERAGED equity VS friend $xxx (same) pm for LEVERAGED equity.
Grapes Vs Durians

Yeah - being a landlord is NOT as passive as REIT-lord & can be hell if U get a tenant from hell that knows the law
Possible to solve but takes time, $ and effort to evict effectively + chances of recovering rental & "make good of property" is "colder than water" when one gets tenants like those.

Of course filtering helps but there WILL be some that gets through - heck, just like job interviews, sometimes we get conned by candidates OR interviewers, right?

Just a thought

Wong Seafood,

Do u have the data for the average returns on residential property for recent years?

Talking about leverage, we can also borrow money i.e. leverage on our share investments, right? But me being an accountant by training, don't really feel to leverage my investments...don't wanna risk more than I can afford to.

This post has been edited by Pink Spider: Jan 6 2013, 04:55 PM

Data for residential? Got ar - from Personal $ mag. I gotta hunt it down (scan & email U)

Leverage on stock investments? Margin account?
Nah - not as LEVERAGED as properties leh
Share margin financing 40%/60% (http://www.hlb.com.my/pfs/loan/loansmf.jsp?flag=loansmf) i think + much higher interest rate.
VS
properties' 30%/70% or 20%/80%

Well, IMHO, leverage is useful at the right time & assets.
Why not think of your investing as a biz.
A good/effective biz's D/E can/should run up to how much max?
ie. if U invest in a company's stock, what's the max threshold of D/E would U stomach as "good use of leverage"?
IMHO, i look for D/E < 33.3333% (1/3), thus i put myself the max D/E for "WMK Inc" as well - ie. in my net worth, my D/E must be <=33.3333%

Just a thought, may not work for everyone

This post has been edited by wongmunkeong: Jan 6 2013, 06:09 PM

I once thought of this...refinance my home and use the proceeds to buy dividend stocks

Normally we often read / listen something like this when it comes to property investment :

1 )Ali bought a condo 2 years ago for 500,000 and now the price rise to 600,000 leh
2) The more you borrow , the richer you are ( According to Milan Doshi )
3) It doesn't need money to make more money. ( Borrow from bank and the loan repayment bear by tenants)

But lets not forget property investment do have risk as well.

1) Illiquid.When it comes to emergency and u need large chunk of money , it can be inconvenient.Same as business , even one have many assets but no cash for immediate use also unsustainable when crisis hit.
2) Interest rate risk . When interest hike , more loan repayment.
3) Maintenance fees , renovation , Wear & tear , sinking fund etc can be a huge amount too.
4) Tenants problem which sometimes can bring u headache.

Thats my thoughts Feel free to point out if anything wrong .

Disclaimer : I'm not against Property investment . Just to highlight some risks as i noticed many people buy property,stretch the loan to max and expect the price will always up without knowing the risk.

Spot on Smurfs - nothing goes up indefinitely, not even inflation (heck, look at Japan ).
IMHO, the result of "sure win" mindset = kablooey sooner or later (we saw that up in US 2008 + MY/SG/TH/IN 1997/1998)

Pinky - until i hunt down that Personal $ mag, have a look & chew at these stats attached.
Mods - my apologies yar, serong a bit not FSM related but discussion on comparing mutual funds VS properties.


Attached thumbnail(s)


Attached File(s)
 Property_indeksQ1Q2_2010.pdf ( 192.05k ) Number of downloads: 4

Taking year 2000 as 100, 2009 it goes to 131.8, in simple math it goes up by about 3.5% per year, if annualised it would be slightly lower than that, am I right?

If that's the case, a systematic, disciplined UT investment would beat it hands down...

There are always pros and cons of any investment class. UT, Property, Gold, stocks, or even antiques, wines, paintings.

As i shared in other threads. The rich people in the world has one thing in common, they either make their fortune from properties, or they keep their wealth in the form of properties, or all the above.

Personally I don't believe in single asset class investment.

No doubt every asset class have got it own risk, pro and con. As I personally does not work since 2008, I have to depend on my investment for income and wealth building for my family nest egg.

From my experience each asset class have it best year and bad year. So I am a strong believer of multiple source of income, no matter how big or small.

Because of that I make sure almost all my assets are generating positive cash flow first and capital appreciation second. As for me properties are the asset class that help me make the most in capital again on top of my business income during the good years.

During the properties run up, I dispose those property that have good capital gain and currently keeping those with good yield of > 10%

The message I am putting across from my own personal experience is don't ignore other perfectly good asset class and build a well balance portfolio, it will take care of you during different market cycle. So everything will balance up nicely and will not effect your life style.

Just my personal sharing. Again there are many way of getting from financial point A to B.

yeah. if we were to compare Unit Trust and Property investment, the later needs more skill, studies, and research.
Same as bro Aron Teh, I made more money from property than mutual funds, in the ratios of 80:20. both using leveraging method.

Thanks for all the golden words from the sifus

Arrgghh... not capable to get a house for investment purposes!

I thought of buying a house for investment too.

JB properties price skyrocketing now due to a lot of singaporeans staying JB. Ugh.. can't afford now =(