my bank forced me to sign MRTA which almost wiped out half of first year dividends

im pretty sure there are upfront cost to this

anyways, i dont take it because its full already. but i am facing a problem now beecause ASB 2 and ASB3 also full, and need to claw for units.

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.

can.

but later he tell you asm asm2 also he full already.

Total unit value after 35 years: RM1,812,450.97

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

Alternative 2, invest with loan.. where do you get that 283k?

Seems like you did not calculate the compounding interest of the loan.

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

lol. that 283k is the diff between hard cash monthly deposit with loan.

to me, the approach is like this.

say you have 200k cash. and you have the 2 option you described.

Option A - Put in all 200k in ASB 1

As you have calculated, you will get RM1,812,450.97.
Option B - Put 200k in ASB 2, take loan 200k for ASB1
1) as you have calculated, loan 200k asb1 will give you RM1,812,450.97.

2) but you need to pay loan to bank. so your cost will be - RM416,665.20

3) as you have calculated, 200k asb2 will give you RM1,302,765.00.
so total Option A vs Option B :

Option A : rm 1.8 M

Option B : rm 1.8M + rm 1.3M - rm 0.4 M
No brainer which to take right?

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)

Wah so nice.. Borrow to invest...

Where do I sign up?