As far as i understand from my muaalaf clients, they would like to see your nric to show "islam" on it.

Not sure the implications of converting to previous religiong though.

I have no idea on the forecast. When calculating, i use 6 to 7% as the assumed rate - in financial planning both parties have to agree on the asumed rate, otherwise it would not get anywhere

Sorry late reply haha

1. Financing rate is currently at 4.85% p.a., with a 40-year tenure

2. Last year ASB return was 7% p.a.

Since this is a financing (amortization) and an investment (compounding interest), you can't calculate the total returns by simply finding the difference between the two figures. You need to run both accounts (loan and investment) amd compare the results. Check out the examples below.

As per any calculation, we need to make some assumptions. We are assuming that the interest and installment remain throughout the 40-year tenure at 4.85% p.a. and RM945/m; as well as a yearly return of 6.5% p.a., with compounding interest (meaning distribution is allowed to be reinvested into the fund)

a. Loan account, total payment of RM0.453M


b. ASB account, total return of RM2.483M


This post has been edited by wild_card_my: Dec 15 2019, 07:06 AM

Yes, you could. A lot of people do that to double their "capital". Remember, borrowed capital is still capital. While you have to pay financing costs (profit/interests) to the bank, the financing rate is lower than the distribution rate thus you end up with a profit.

Without having any commitments, at the age of 35 and below: the minimum GROSS SALARY to get a 200k financing is RM2000.

I am not kidding. ASBF is the least risky financing for the banks as the collateral doesn't change in value, unlike properties.

There are six fixed-price funds available to invest in. If you already have those filled up, you likely already know what you are doing.

Not yet, I doubt it is coming anytime soon. They do not know how to do with excess capital since they are too new, at least compared to ASB which already has funds and prior investments due to its age

I know right? Plenty of people have made millions from ASB FInancing schemes. It is open to all races, Bumiputra as well as Non-Bumiputra. But it has a caveat:



By 18 you should ask them if they would like to open their own account, as they should be given the opportunity to invest on their own too. But I have been have young, 19 year olds to open ASB-financing as my clients. Their parents are paying and guaranteeing the financing of course

Well it can start with you. If you have kids (even if you dont, you can plan on this) you can start investing into their accounts as well as yours, and by the time they are 18 years old finance another RM200k on their behalf.

Your parents couldn't do it for you, but here you are listening to me. Meaning you are doing better than most Malaysians who couldn't even think about getting a 200k financing. The change starts from you

Yeah, I have them, I always compare different scenario of savings, including loan (thus the installments) vs cash investments. I will plug in the numbers and share it here soon, need to do some comparisons since we may need to deal with historical figures.

Yeah, as a broker, I am able to help connect clients with the best package available for any banks. But attached below is the installment options ya for 4.85% p.a. financing



This post has been edited by wild_card_my: Dec 15 2019, 08:59 AM


Attached File(s)
 ASB_Financing_Monthly_Repayment_Table_3.2.1109.pdf ( 110.34k ) Number of downloads: 10

You can always cancel the financing at the point where you think it may not be profitable. The capital remain RM1/unit, so your unit value remains as it was originally. You can still keep all the distributions earned, you just wont be investing with the original capital anymore

That was when RM350 was added into the calculation as minimal insurance. It would cover RM100k and for only 5 years. Useless type of insurance but it was cheaper than having the rate increased from RM4.85% to 4.95%

This is correct, this is called a softcap increment. When you open an ASB account, everyone starts with this:

a. Hardcap: RM200,000
b. Softcap: RM0
c. Loan-block limit: RM200,000

1. The total units you can buy is the combination of hardcap and softcap

2. The softcap can be increased based on the cumulative distribution earned. The hardcap does not change.

For example, in the first through fifth years you have received RM5,000 a year in distribution. Total cumulative distribution earned is RM5,000 x 5 years = RM25,000. On the sixth year, your softcap would be RM25,000. Regardless of the actual balance of your account. You could withdraw all the RM25,000, and your softcap remains at RM25,000 until the next distribution payment.

3. The loan-block limit doesn't change. At any one time, you can only get RM200,000 worth of loan-block units. These units will utilize your hardcap and softcap.

For example, your softcap has increased to RM25,000. Your hardcap is RM200,000, soyour total capping is RM225,000. You chose you take a financing of RM200,000, and you added another RM25,000 invested with cash to bring your balance to a total of RM225,000

There are two errors that I am seeing which I am working on the solution with my own table:

1. Alternative 2 should have two investment accounts, each with a capital of RM200,000, for 35 years

2. Alternative 2 should have capital outlay to pay for its monthly installment of the ASBF, which I would recommend either taking it off the investments in ASB2 account on a yearly bases

2b. Alternatively, you can match Alt 1 and 2 in terms of capital outlay by adding adding cash into ASB2 on a monthly basis for the same RM992/m amount

Try this, for 35-year horizon, ZERO capital outlay for both except for the RM200,000:

Method 1

RM200,000 cash invested in ASB, 6.5% p.a. return. @35 years, balance is RM1.812M

Method 2

a. RM200,000 financing invested in ASB, 4.85% p.a. interest, 35 years = RM991/m. For the whole year: RM991*12 = RM11,892. As for the investment portion, @35 years, balance is RM1.812M
b. RM200,000 cash minus RM11,892 for the initial year to pay one-year instalment in (a)
c. RM188,108 cash invested in ASB2 with 6.0% p.a. return, and each year, RM11,892 deducted on the day the distribution is received. I have printed the table. @35 years, balance is RM0.132M



Method 2 (RM1.944M) > Method 1 (RM1.812M)

This post has been edited by wild_card_my: Dec 15 2019, 12:04 PM

What? No, the lowest rate is now 4.85% p.a. at a maximum tenure of 40-years or until age of 65. If you are 25 or younger, you can get 40-year tenure. RM200,000 financing = RM945/m



I have also attached the PDF at the bottom

That is a given. But we work with what we have. This is much better than properties though:

a. fixed price per unit, your collateral remains the same price unlike properties which can fluctuate
b. properties have a lot of hidden costs
c. properties require a lot of management - tenant, payment, damages, etc


Attached File(s)
 ASB_Financing_Monthly_Repayment_Table_3.2.1109.pdf ( 110.34k ) Number of downloads: 14

Yeah, definitely. But there are a few assumption that you need to make, as per any investment return calculation

1. Financing rate is currently at 4.85% p.a., with a 40-year tenure

2. Last year ASB return was 7% p.a.

Since this is a financing (amortization) and an investment (compounding interest), you can't calculate the total returns by simply finding the difference between the two figures. You need to run both accounts (loan and investment) amd compare the results. Check out the examples below.

As per any calculation, we need to make some assumptions. We are assuming that the interest and installment remain throughout the 40-year tenure at 4.85% p.a. and RM945/m; as well as a yearly return of 6.5% p.a., with compounding interest (meaning distribution is allowed to be reinvested into the fund)

a. Loan account, total payment of RM0.453M


b. ASB account, total return of RM2.483M

You can sign up at the banks, or approach ASBF brokers around such as myself.

Totally up to you, no difference on the financing package except they may force you to sign up for Takaful since that is part of your KPI

But first you must be eligibke to open ASB accounts

yes, the NRIC is fine to open the ASB/ASNB accounts, but to apply for a financing, you need more documents than that. I can help with that if you would like to, otherwise, you can always take a trip to the bank. They will require basic financial documents, no different from any other financing


Depends, I don't remember your age because I did not link your name to your lowyat profile. I do remember we met for signing at a mamak near Endah Parade right? Sri Petaling.

Okay, here is the table to get 40-years tenure, it depends on your age. How old are you? if you are below 30 years old, it may be worth refinancing to get the longer tenure, but it is your call, I cannot force you to do one (status quo) or another (refinancing):




Due to the the fact that there is always a margin between the financing rate (4.85%) and the ASB distribution rate (7% last year), it is always much more beneficial to invest through financing. As someone below said, it is "free money".

Consider these calculations, assumption a return of 6.5%, and even if they fluctuate, both investments would be experienced the same amount of fluctuations since they are both invested in the same ASB account:

1) Cash investment, for RM945/m, 40-years, maturity value: RM2.061M



2) ASB Financing investment, for RM945/m, 40-years, maturity value: RM2.483M




That is correct. In a a way it is like any other investments. I will compare it to properties:

1. In properties:

a. You get rental income
b. You get capital appreciation (or if you are unlucky, depreciation)
c. You get a loan, and need to serve the instalments

2. In ASB-Financing:

a. You get distribution income (yearly basis)
b. Your capital is fixed though, the RM200,000 units that yo buy remain that way forever
c. You get a loan, and need to serve the installments

Investment in properties and investment in ASB through financing are similar in that they are both using the asset as collateral to get lower financing/interest rates. With these low rates, there is a margin between the financing rate vs the return rate. We earn a profit by profiting through this margin.

The risk-levels are vastly different though, since with properties:

a. Capital can appreciate or depreciate
b. Fixed asset, takes time to dispose
c. Fixed asset, costs a lot of money to dispose including agent fees and applicable taxes (RPGT), charge to discharge
d. Require general (fire) insurance
e. Tenant default
f. Damages to the property

The list goes on. So for those who are eligible for ASB and thus ASB Financing, this is a no brainer.

This post has been edited by wild_card_my: Dec 16 2019, 03:35 AM

Cannot, CIMB max is 35-years. There is a specific method that I need to use to get you the 40-years. Also it depends on your age, how old are you?

I understand where you are coming from. However it must first be understood that inflation needs to be taken into account regardless of your investment position and portfolio: be it in monthly cash investment (into ASB account), or through financing (ASB financing). The calculations made above output the nominal value of the investment accounts after 40 years. This nominal value is unadjusted, it does not take into account of the inflation rate unlike real values.

In addition, keep in mind that inflation has a positive correlation to the consumer price index which is an economic indicator, due to this inflation has an interchangeable link to the GDP: where high inflation suggests the economy has outperformed its potential; likewise low inflation comes with lower than expected GDP. Inflation is just an indicator, it is neither good nor bad; but when it comes to investments, especially one with a portfolio made of companies in the main market, high inflation correlates to higher returns.

But to answer your question: Today's real value of RM2.483M in fourty (40) years based on 3% inflation rate is RM761,000.

For the uninitiated: Due to inflation, the purchasing power of your money today will reduce over time. As such, the RM2.483M calculated above may only have a real value of RM761,000 today. What can you buy today with RM761,000? A good house in the city center. That's what you are likely to get in 40 years - a good house in the city center, with a purchase price of RM2.483M! But if you do not start investing now, you will have RM0 and won't have the money to buy that house anyway

Do not allow inflation to deter you from investing though. Inflation affects your money regardless of your portfolio. Ideally we would like to fend off inflation by earning more than the inflation rate. Now for those who are not eligible for ASB/F, their safest option to keep their savings while fending off inflation is by putting their money in FD. Typically investors prefer returns a few basis points higher than the expected inflation rate. If inflation rate is 3%, they expect a return on their deposits of about 3.5-4%.

Another note about inflation: it is based on the consumer-price-index (CPI), but the figure is NOT known ahead of time. Economist derive the inflation figure based on historical (past years') figures. These figures can also be different from one economist to another.

This post has been edited by wild_card_my: Dec 16 2019, 07:43 AM

1. Actually investment ROI doesn't work that way. You cannot figure out the ROI by deducting the capital outlay off the maturity value.

Consider investments in properties, like purchasing a house for rental. For an RM200k mortgage, you would be paying RM1k a month for for 35 years, after the loan is finished, you would have collected all the rentals and the house value has increased, would you deduct the [house price + rental] with the [installments paid]? No you would not. In 35 years, the house and the rental collected is yours to keep - no one would be knocking on your door deducting the value of your house because you "have paid RM1k a month for 35 years". You would already have paid for those installments

2. But to help you with the calculation, I will do it anyway. But please, don't take this figure and deduct it from the RM2.483M. If the assumptions are correct (Rate remains as 4.85% p.a. each year, and returns are consistently 6.50% p.a.), the RM2.483M would be yours to keep, no money would be deducted from this, no one will ask you to pay for the interests or installments anymore as you would already have paid for them:

a. After 40 years, suppose the installment remains the same at RM945 a month, total installment paid to the bank: RM453k



b. After 40 years, suppose the installment remains the same at RM945 a month, total interest paid to the bank: RM253k



Dapat. But you need to convert to Islam first

Imagine the ASB dividend for this year is 6.5%. Those who didn't do sign up for the ASBF when they had the chance would have lost money through opportunity costs this year, and last year, and last year, and last year.

All i am saying is that the investors who utilized the ASBF has been profiting off the scheme. The ones who have been losing the opportunity (Time Value Money) can only seat at the sidelines, hoping others who took the initiates would lose money. Kinda sad when you think about it.

See hellkvr, those who are ineligible are so fed up with the situation as they are barred from profiting in this economic activity, yet there are still many who are questioning the feasibility of the scheme. Really sad and funny when you think about it

This post has been edited by wild_card_my: Dec 16 2019, 09:39 AM

I see, so you are eligible to open ASB account and qualify for ASBF but refuse to sign for a financing ? If you had said this was because of a combination of these concerns:

a. lack of confidence to service the financing installments,
b. interest-rate risks (variable financing rate)
c. distribution-rate risks (returns may be lower than expected)
d. your portfolio being affected by two (2) risks explained above

Or any form of legitimate concerns that we can both discuss and go over - the worst that could happen was for us to agree to disagree but remain respectful and amicable to each other.

However: "say no to tongkat offering aid to bumis means look down on bumis say no to racism against bumis" is not worth any good response from me.

Have a good day.

The best time to start your ASBF is at the age of 18, the next best time is NOW

No, you just need three (3) months payslip. The idea is that the bank financing would provide you with the RM200,000

For a RM200,000 ASB financing? RM2,000 pay a month, age 35 or below, zero commitments. If you have commitments the calculation changes a bit

If you are interested in the financing, my recommendation would be to just go ahead and apply for the financing. The bank will generate your CCRIS report and factor in your commitment (based on the banks' interpretation) and run a debt-service-ratio calculation to determine your financing-worthiness

Your final approved amount will be based on that calculation

This post has been edited by wild_card_my: Dec 16 2019, 06:06 PM

Hahaha. Don't tease them please.

Thank you for your concern.

Yes, it is including the current ASB loan. But your limit might have increased over the years. The limit will increase based on the cumulative distributions earned since the inception of your ASB account

As you can see here:



a. this client has RM9,727.49 in his account.
b. his "Unit Boleh Beli" is RM355,690

This means he can still add another RM355,690 worth of investment into his account; this is beyond the RM200,000 unit boleh beli limit that everyone starts with. This snapshot was taken after his previous ASBF was cancelled. He was my client and took a new ASBF amounting to RM200,000. After the disbursement of the RM200,000 fund from the new bank, his new unit boleh beli would then be RM155,690.

Calculation:

a. Unit boleh beli: RM355,690
b. Unit taken by the loan-block: RM200,000
c. New "Unit boleh beli": RM355,690 - RM200,000 = RM155,690

This post has been edited by wild_card_my: Dec 17 2019, 12:58 AM