Actually if the div is at 6 cents, asbf still profitable. Let me show you in calculation.

100k terminate 5 years. Assume div. 6%

Principal sv - 8172
Compound div - 33,822
Total - 41,994

Cost 5 years - 32,209

Profit - 33,822 - 32209 = 1612.80

This i assume 6% for the whole 5 years. However the profit is not great because the div is too lower and the rates is too high. Usually bank will reduce the rate to make asb div still relevant.

1. For those who have already invested for a while should not be too affected in the event of low dividend-announcement for the year. This is especially true for those who have more asset (units) than their liability (loan outstanding) even if they refinanced back to the maximum RM200k

For example, if an investor-borrower has 250k units (200k certificate and 50k accumulated dividend), even at 6% dividend he would be getting RM15k, and will be paying about RM12,720 (RM1,060*12) in the next 12 months in installment

2. Your mileage will vary, depending on how long you have been investing and the amount you have in the account in the past 12 months leading up to this upcoming dividend

3. The biggest concerns are related to new investor-borrower who may think that the investment may not be yielding enough on a yearly basis (even if they choose to compound), due to the fact that the installments would include the capital repayment + interest/profit

For example, if an investor-borrower took ASB-financing this month at RM200k, and expect a repeat of 6% dividend in January 2020, he would yield RM12k, while having to pay RM12,720 in the next 12 months. However, he must also realize that his outstanding balance would have been reduced from RM200k to RM197k in that year.

4. In short, low dividends would affect those who are just about to start borrowing, especially if they are planning to use the rolling-method and cannot persevere with a "negative cash-flow" in the first year.

Yup... Those already in it for many years won't be affected much. Still positive due to power of compounding interest.

Good question. Reaching my first goal this coming dividend surpassing the 7 digit mark. That's why i'm so stoked about it.

Well anyways... if there are no urgent need for cash, i'll just let it ride... this asb is actually my retirement plan. After next year the dividends per year will be 65k - 70k++ assuming dividends are 6.5% - 7%. And with compounding interest, soon enough it will be 100k per year and beyond

I have 17 more years to work to retirement.... letting it compound till then will net me 3million or thereabouts. This translate to about 195k dividends per year.... which equals to 16k-17k per month. This should be enough to sustain me till I croak. I'm hoping all my properties and vehicles is settled by then. So this figure should be enough to live on without encumbrances.

Assuming also there are no medical emergencies which could derail the whole plan. This ASB also serves as my emergency fund for anything untoward. My immediate concern is parents medical costs

So yeah... that's the plan

1. Having ASB-financing as part of a retirement portfolio is sound financial strategy. There are detractors who claim to get better returns or reach their financial goals earlier and they can be right; however honest investors would disclose the pros and cons of these other investment vehicles/intruments

2. Take property property investment for example. Plenty of people made a lot of money through properties, especially when they bought theirs before and during the property-boom that took place from 2008 through a few years following that. When you compare the two, buying properties with a mortgage is very similar to subscribing to ASB units with ASB-financing. They both:

a. have their financing backed with collaterals (property vs. ASB units)
b. use reducing balance interest calculation (as opposed to upfront interest calculation)
c. have annual and floating interest rates (as opposed to fixed/flat rates)

3. The con, and in-turn the difference between property investment to ASB/ASB-financing would be that the value of the asset (the property) is not fixed. While this is a huge advantage due to the fact that properties may increase in value over time (capital gain), they can also, in-turn lose value over time (capital loss).

4. Do yourself a favor and read on arguments from investment-pragmatic individuals like icemanx and askarperang who are looking at the property-investment situation with a realistic approach. If I got them right, their consensus would be that there were bubbles in the past few years which have started to pop and would get worse over time. Property prices have decreased in some areas, rental yields (rental per annum over MV) have dropped, and lelong units are popping up everywhere with low probability of being sold. High property overhang being reported by developers, agents facing difficulty to dispose their listings, owners having to top up the shortfall between their installments and rental income, etc.

Multiple Signs of Malaysia Property Bubble V20

5. Following point (3), losing value of your property is a huge financial concern. Properties are big-ticket items, unlikely to be bought using cold-hard cash. Mortgages are taken to complete the purchase and in turn would have interest charges on the outstanding each day (daily rest). This is similar to ASB-financing, but while ASB units do not lose value, properties could and have proven to do so:



6. Following point (6), when the market-value or realistic-selling-price of your property has dropped lower than the loan balance, you would have to top-up to repay the bank to dispose the property. For example, if the realistic-selling-price of your property is RM400k, and your loan balance with the bank is currently RM500k, you would have to pay RM100k (excluding other costs, like redemption fee, etc) to the bank for them to release the unit to be transferred to the purchaser
 
7. Some bid their time before disposing their properties - after assessing that they are able to continue paying their installments while topping up the difference between the installment (plus other costs like maintenance) and rental. Some purchasers are not so lucky, and are unable to do so due to cash-flow issues. When they exhaust their cash due to negative cash-flow, unable to repay their installments, and having no cash to top-up (refer to point 6) to dispose the property, the property would be auctioned off

8. But that is not the end of it. Just because the bank has started the process to auction the property, there are no guarantees they would be successful. If the property fails to be sold in the first round it would go for further rounds of auctions, each time the reserve price would be reduced by about 10%. If the winning price is lower than your loan balance with the bank (plus other fees), you would still end up being liable to pay this balance; if you fail to do so within a stipulated time you will be sued in court for bankruptcy

9. No such thing would happen with ASB-financing due to the fact that the ASB-units do not change value. At any time you fail to pay the installments and the bank force-sell the units, the loan balance would ALWAYS be lower than the RM200k certificate value. As any investment vehicles/instruments, there are cons to ASB-financing, but I am not covering that in this post.

As a practitioner in the financial industry, doing both mortgages as well as ASB-financing among other things, these points are a form of summary on investments in property and ASB through my lens.

I am not saying that I know for sure or that I do not know for sure.... But due to TH's hoo-haa, there have been high-level discussions between the government and the organization's reps to monitor the NAV but not to disclose it to the public for reasons I mentioned above - the NEP among other things. But these discussions took place in an alternate reality; no such discussions actually took place i spoke too much already hahaha    

May i ask what's the meaning of "unit dalam edaran (juta)" in this case?

Can you link me where you got these info? Im sure it is on ASNB site but I don't want to go hunting. Ill go over them and let you know.
10 days is the average that I am getting for my clients for their refinancing. Told them to keep calling the loan officer every 3 days.

Hi, please refer to page 86.

PNB themselves are holding 46.840 million units. The "discrepancies" are not errors. 145.903 billion units are in circulation (outstanding units), but only 145.856 billion units are held publicly - this is the amount that the public has deposited into their ASB account including the dividend (actually, distribution) that was reinvested.

145.903 billion - 145.856 billion = ~47million (units held by PNB)

Hope this helps, took me 10 minutes to go through the annual statement because it was published in Malay. You are lucky I was (and still am) waiting for my car to be fixed so I didn't set any appointments. If you appreciate my input feel free to spread the word about me    

same like last year..
better wait official ASNB statement

Could you share the link please.

Thank you in advance.

Yeah, its called compounding.
Confirmed. Dividend is in

To another year of forced saving.
And cant wait for asb2 annoucement

Oh no, there is a grace period every 1st of each month for the calculation of the monthly minimum balance

my soft cap should be 212k only since i just maxed it last year. so how come can still fill until 300k

I think you're missing my point here...
What other threads? I'm just trying to help people realize the obvious before they make the same mistake as me committing to asb loan.