Woah, this statement is like "If you want to drink coffee it doesn't matter what the price is".

You are buying a properties that you may have up to 25~30 years of paying installment, and it is for staying.

Means that:
1. No liquidity. Investment properties already has the lowest liquidity, own stay properties is worse than that.
2. Let say DDD, no job, need money, also cant afford installment. Its either you let go at a price that benefit the "Vultures" or you default your loan to banks.
3. Let say UUU, your house doubled in price, but there is no point as you are staying in it. No increase in rental or no gain in capital. You can only proudly says your house worth $$$$ but it just on paper.
4. Increase in BLR also will bleed you to death if you buy overpriced house.

It doesnt mean dont buy. It means dont buy at overpriced value for whatever purpose.

I think that is the best strategy. No point buying something you dont like. Heck, why must be slave to banks for 20++ years for something you dont like.

Found a place you like, just buy but dont buy ovepriced value. If you really like it, it will be worth it if you try to nego it to a win-win price.

It only become npl if the money stop coming.

I maybe wrong but my point is like this:

1. You bought a flat at RM30k for own stay
2. At today price, it shoot up to RM80k

Now I ask you, Are you gaining anything? In "value", yes your property has increase tremendously but as long you are not using it as collateral or refinancing, it will only look nice on paper.

I know this because my parents flat which I am staying has increase in price but in no way we feel richer or helping us in economic matters.

In a way, that is the correct way to look at it.

When their stock crashes, Bill Gates and Warren Buffet will be affected the most. However, that will not be the case as they already invested some of their in other forms of commodities or land asset.

It will be silly of them to amass their richness only in paper form. Especially not when their gov printing money like no tomorrow.

And dont assume people are not looking for properties because paper gain is not a gain. People have different strategies of investing. But by buying a house for own stay, you risking yourself from future opportunities if you are too attached to your prop (i.e. heavily invested on renovation).

I am sure that there people or investor that buy investment properties but also make it for own stay and ready to cash out on good deal.

Wow. Im not belittling you but you need to read more.

Rich people keep money in bank? That is so old school. Have you ever heard of bank runs? Or have you read about how Cyprus froze the bank accounts and force a tax cuts?

Rich people do loan, but their loans is good debts. That is what the flippers and renters are looking for, good debt.

Middle class people is the most class that have money in banks. And most of the loan is bad debt.

No lar got also. I just read here, "if for your own stay just buy at any price"

Ok, I will use different kind of asset to explain, commodities. Similar like properties, commodities also has up and down. The particular commodities I will use is silver.

There is a movement in graph last 2 year, where it looks like it will skyrocketed. The unfortunate thing is that I was buying when the graph is going up. Now, silver spots is way lower than the time where I enter silver investment.

I buy at spot RM100/oz
Today Feb 2014, silver spot is RM67. I bought 13 oz.

Do I lose money? In a way yes, my silver is priced less. But, if Im holding it, I am also holding from losing.

If in Feb 2015, silver spot soar to RM120/oz, will I have gains? In a way yes, my silver now priced more. But, if Im holding it, I am also holding from gaining.

P/S: But silver is not like gold and properties. At least gold can be "pawn"ed. You can not refinance using silver and Im not using loan to buy the silver. But it definitely show you that paper gain and lose is nothing until you transact the goods.

That is called wealth protection. That is why they are rich but it doesnt means they do not loan. Just that they transfer the risk of the loan to other entities. It doesnt make sense if you have 1 million in the bank, sitting there with sheety interest, only to be eaten by inflation.

But what do I know, Im not rich.

I was scared to promote him as people like to see him as scammer. Thanks to him, I finally understand on how the wealth flow. Why rich people take loans, why does US print money and they got away, why there is bubbles. He doesnt teach, he enlighten.

Can you quote when or where this is stated? More debts doesnt mean you are bankrupt. You bankrupt when you are not paying your loan.

The reason you loan is so that you dont have to use cash for liabilities and you can use the cash for other opportunities. And te other benefit is that your loan will worth less in the future because of inflation. But I, myself, am not a rich guy, so even I dont understand how they play the game.

This called leveraging on OPM (Other People's Money)

P/S: Dont compare with RosM, she is gov related. They are not tied with the money rules, they are above it.

Ok.

We mean that the mark to market method is not wrong but only bank or official accountancy use it. But if you are aiming to be wealthy, it is not good to use the method for your benchmark. If you want to use mark to market, then by definition my net worth is half million due to fact that I am insured for my death. It doesnt matter if Im not dead because on paper the company already promised to pay me upon death.

Does this mean Im rich? Heck no. Can I cash out? No. Similiar to own stay home. Even the value increase, it doesnt matter coz you cant sell it.

That is what Im saying all along. You only gain when you sell. It doesnt matter how many increase in price or value, as long as you are not selling, there will be no gain or profit. If the said bungalow is bought at 4.5m and i use another 0.5m for renovation, selling it off at 5m will means that there is no gain even on paper it increase 0.5m in value.

What I want to show you is that method is useful to calculate capital gain but not cashflow. To retire, it is better to aim for cashflow rather than gain.

I use this last example, if this cant explain it then It just mean that im not a good explainer:

U bought land 1 at rm20k.
The price increase to 100k. But as long as you are not selling, you are not profiting.

U bought land 2 at 35k, u add 30k loan to develop into plantation. Positive cashflow +rm500
The price fall to 25k as there are many nearby seller selling cheaply. Are u at lost?

Actually land 1 is called capital gain investment. While land 2 is your cashflow investment. Both are what properties investor are looking. Basically, land 1 is good for flipper, while land 2 is good for passive income.

But if you buy a house for own stay, you cant use the above principal unless you are willing to move out and downgrade.

Come on man. You check back our discussion. That is what I am also saying all along. You only make the gain when you sell. The point is when you are not selling, it doesnt matter. I am not saying you should not downgrade but if you chose to hold, you would not gain. Paper gain is not gain. Unless that paper you trade for green paper.

That is not correct. I am no where stating that. That is why I dont like to mention his name. Traditional people will get defensive. If an asset has increase in capital gain, it still is an asset but only beneficial when you sell. But people who play for capital gains are considered flipper not investor by Kiyosaki rule.

And it is not wrong to be a flipper but as this thread is all about flipping is going to be hard as DIBS has been removed and RPGT is being introduced.

In buble burst scenario, of corz flipper will jump from their properties but investor a.k.a landlord may be affected less or non at all.

Ceh, that field, 10k++ at 30 is also possible.

Maybe only those VVIP (very very important prop) is overinflated. Have to be extra aware of the opportunity as the Jerung also are looking for it.

So dear Jerung, you all go play those 500k unit and leave the 100k~200k unit to my gen to start playing

I think you miss his point.

Like me, my salary is 2.4k. A 3k salary is likely to be junior exec. This is the case for non O&G company. So, your 10k before 30 is just absurd in many level at normal industries.

A junior exec is most likely to own a car. With salary like that, we are expected to travel occasionally. But what brand he will choose to ride? If he like me, buy a 1st hand SV, already has to RM400/month. 2nd car might be a lot cheaper. But will he willing to buy a 2nd car or cheap car?