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> ASB loan, worth to get it???

YuNGSeNG
post Dec 13 2008, 11:10 AM

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QUOTE(darkknight81 @ Dec 13 2008, 12:37 AM)
Of course ... for those who are greedy and want fast return they won consider ASB at all....What is 7 % per annum ??

They can earn 20% one day by trading stock (that is their mindset)

So its all depend on how you think....

But really if you got few k savings in asb you will not see much return base on 7% annual return unless you keep for long long time.

Been fans of ASW and ASM since 12  wink.gif now is almost 13 years already ... Every you can reciv dividend which is higher than FD... At least can hedge against inflation
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So, are you mean the best investment (long term investment but not speculation) for bumiputera will be ASB ?
darkknight81
post Dec 13 2008, 11:32 AM

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QUOTE(YuNGSeNG @ Dec 13 2008, 12:10 PM)
So, are you mean the best investment (long term investment but not speculation) for bumiputera will be ASB ?
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I din say it is the best investmet... The best investment is depends on individual....

But if i am bumi i won play any UT i would rather put my money into ASB. Like currently i am doing my saving in ASW and ASM... Did not invest 1 sen even in any UT.

This post has been edited by darkknight81: Dec 13 2008, 11:34 AM
Vieri777
post Dec 15 2008, 03:15 PM

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Just went to see Maybank ASB loan promo n I think its very attractive.
1-3yrs = BLR - 1.45% = 5.05%
Thereon..BLR-1.30% = 5.20%

Somemore loan is REDUCING BALANCE !! and bear in mind, dividend is compounding. I think this is a very2 good deal indeed.

This post has been edited by Vieri777: Dec 16 2008, 06:03 PM
darkknight81
post Dec 15 2008, 05:06 PM

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QUOTE(Vieri777 @ Dec 15 2008, 04:15 PM)
Just went to see Maybank ASB loan promo n I think its very attractive.
1-3yrs = BLR - 1.45% = 5.05%
Thereon..BLR-1.30%  = 5.15%

Somemore loan is REDUCING BALANCE !! and bear in mind, dividend is compounding. I think this is a very2 good deal indeed.
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Yup provided you are bumi nod.gif
Syd G
post Dec 15 2008, 05:49 PM

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2008 return is 8.75 sen/unit. I'm not sure how much is dividend and how much is bonus.
afique
post Dec 15 2008, 07:40 PM

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7% divident and 1.75% bonus. a slightly lower than last year punya divident and bonus.
Anyway thanks to PNB and our G rclxms.gif
QD_buyer
post Dec 15 2008, 08:26 PM

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under 18 eligible to apply this loan ? biggrin.gif
Syd G
post Dec 15 2008, 10:34 PM

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QUOTE(afique @ Dec 15 2008, 07:40 PM)
7% divident and 1.75% bonus. a slightly lower than last year punya divident and bonus.
Anyway thanks to PNB and our G rclxms.gif
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Bonus is pretty worthless. 7% dividend only?

Bonus is only good if uve been maintaining stable balance for the past 10 years or so shakehead.gif
Hadey
post Dec 16 2008, 07:20 AM

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From what i understand is that using this method we can get roughly 1-2% of annual return. So i just wanna ask how good is taking up loans for ASB to protect against inflation? I always thought that these days inflation can easily go to 4% and that alone is already enough to outweight our annual return.
Syd G
post Dec 16 2008, 09:24 AM

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A lot of people take ASB loan as a mean of 'forced saving'. You can sometimes get more return compared to saving on ur own but you also have to take into account the probability of BLR going up, and if you fail to service your loan, they'll just sell your cert and make more money out of you.

I take the middle road - use savings to buy ASB cert and do an OD against it. Improves my cashflow a lot and I dont hv to worry about interest or repaying back too much - I only hv to serve the interest of whatever amount that I withdrew. At the same time my ASB is still untouched and can get decent amount of dividend smile.gif



Vieri777
post Dec 16 2008, 09:33 AM

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typical. already get free money but still wanna complain. only 7% lah, lousy bonus lah. please wake up n realise that this is FREE MONEY and RISK FREE. try n go see the queue when PNB launch any funds that is open to non-bumi as well. i guarantee you if they also open ASB to non-bumi, it will be finished in a blink !!!

by taking a loan means you get to leverage and you are compounding your leverage by about 7-8% interest every year ! u think got loan for ASW2020 ? ASM ? why u think only got loan for ASB ? still complain ka ?
think about it....

apologies if i sound too harsh, but sometimes it just get on my nerves.
no offence intended.
peace. icon_rolleyes.gif

This post has been edited by Vieri777: Dec 16 2008, 09:38 AM
Syd G
post Dec 16 2008, 10:54 AM

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Vieri,

Hi. Appreciate your thoughts smile.gif First of all, it's not risk free. Investment-linked products are never risk free. Yes ASB typically beats returns from other type of investments as well.

But you have to remember that prior to 2004, ASB loans were BLR+something, typically BLR+1.00 (this was when BLR was around 6.00). If they take a loan during this period, after 2006, they have to serve 7.75% interest on 7.30sen return (2006) and 8sen return (2007).

(1.25% / 1% / 1.75% bonus is only worth something if you've been maintaining a good balance for the past 10 years). This year, they're paying 603m every 1% dividend and only 678m on 1.75% bonuses.

If you want to argue about 'free money' on the 1-2% - then I have to agree with you. But remember that , for these people, banks typically push for max loans that they can afford (or cant afford). I was offered 50k ASB loan on 2k salary at BLR+0.5% a couple of months back - go figure. That's excluding hidden fees such as MRTA, stamping fee, agreement fee, sijil fee, early exit fee etc.

Currently the market loan rate is very good. I'd say go for it if you can. Make sure that you have enough money to cover the interest for a year. Dividend is compounding ONLY if u keep them inside (means payment for interest hv to come from your own pocket). Shop around for better rates - Maybank's rate for home mortgage is among the lousiest, I assume the ASB loan rate is the same too.

Vieri777
post Dec 16 2008, 05:49 PM

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SydG,
isnt the capital guaranteed by Gov? doesnt that mean zero-risk? of course return is not guaranteed but what was the lowest return ?ASB can be savings plan/retirement plan/education for kids but definitely not for u to take out dvd n go shopping tongue.gif

key points...
-dvd is compounding n loan is reducing.
-ASB will kira dvd based on lowest monthly balance.
-n dont forget LEVERAGE !
-opss ONE more....loan is insured !

for a 25yr 100k loan, monthly is 611 now...run that on excel and see what happens. whistling.gif

think about it laa bro, why Gov dont open to non-bumi ? why only ASB got loan ?

This post has been edited by Vieri777: Dec 16 2008, 06:02 PM
darkknight81
post Dec 16 2008, 09:23 PM

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QUOTE(Vieri777 @ Dec 16 2008, 06:49 PM)
SydG,
isnt the capital guaranteed by Gov? doesnt that mean zero-risk? of course return is not guaranteed but what was the lowest return ?ASB can be savings plan/retirement plan/education for kids but definitely not for u to take out dvd n go shopping tongue.gif

key points...
-dvd is compounding n loan is reducing.
-ASB will kira dvd based on lowest monthly balance.
-n dont forget LEVERAGE !
-opss ONE more....loan is insured !

for a 25yr 100k loan, monthly is 611 now...run that on excel and see what happens.  whistling.gif

think about it laa bro, why Gov dont open to non-bumi ? why only ASB got loan ?
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nod.gif Yup thats y i mentioned before " the government is trying their very best already to help the bumis... but most of the time... the bumis don know how to help themselves sweat.gif "

What do you expect again....? almost minimal capital to make an almost guaranteed return on investment.....
We chinese got to take so much risk on busines and investment...

Sound harsh but is real fact .....

This post has been edited by darkknight81: Dec 16 2008, 09:25 PM
Hadey
post Dec 16 2008, 09:30 PM

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But what if you take into consideration that inflation rises around 2-3% every year? Then there wouldnt be much use to take up loans for ASB rite? Well thats what i think. RM100k 25 years in the future will be less of value than RM100k now
darkknight81
post Dec 16 2008, 09:45 PM

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QUOTE(Hadey @ Dec 16 2008, 10:30 PM)
But what if you take into consideration that inflation rises around 2-3% every year? Then there wouldnt be much use to take up loans for ASB rite? Well thats what i think. RM100k 25 years in the future will be less of value than RM100k now
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doh.gif Use your logic brother....IF YOU GOT 100K to invest yes you got to consider the inflation.....

But for ASB LOAN... you basically don need any capital ok.....use the dividend to pay the loan.. and you end up own 100k....
Hadey
post Dec 16 2008, 09:57 PM

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QUOTE
Use your logic brother....IF YOU GOT 100K to invest yes you got to consider the inflation.....  But for ASB LOAN... you basically don need any capital ok.....use the dividend to pay the loan.. and you end up own 100k....


Well if u can get a 0% interest loan then ok la.. But loan nowadays has around 6% p.a interest. ASB dividen is around 8% p.a. So ur actual returns per year is only around 2% per annum. Take that 2% annual return that u get, u have to minus with a 2-3% increase in inflation every year. So at last you wont get anything

This post has been edited by Hadey: Dec 16 2008, 10:03 PM
darkknight81
post Dec 16 2008, 10:04 PM

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QUOTE(Hadey @ Dec 16 2008, 10:57 PM)
Well if u can get a 0% interest loan then ok la.. But loan nowadays has around 6% p.a interest. ASB dividen is around 8% p.a. So ur actual returns per year is only around 2% per annum. Take that 2% annual return that u get, u have to minus with a 2-3% increase in inflation every year. So at last you wont get anything
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For my housing loan offer is BLR - 1.88 = 6.5 - 2.88 = 4.62%
Let assume ASB loan to be 5% ASB RETURN TO be 7% annually. You loan 95 k for 20 years and 5k down payment. That means you got to pay RM 627 Monthly and RM 7524 annually. With ASB annual return of 7% you will got RM 7000.00 dividend. So basically
7524 - 7000 = 524 that means you got to pay RM 524 Annually. For 20 years = RM 10480

So total you pay RM 5000 + RM 10480 = RM 15480 only....

Look at it this way you pay RM 15480 to get RM 100K in 20 years time....and the rm 15480 is not one lump sum which you can pay monthly....How many percent return?? 645% return in 20 years.....


Hadey
post Dec 16 2008, 10:56 PM

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OK i see.. so thats the correct calculation for it.. Thanx man
Vieri777
post Dec 17 2008, 11:02 AM

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leverage bro.....leverage.
thats why its worth it.


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