can anyone confirm whether the divident after investing 200k will also be used to calculate divident for the next year?I understand that there is a limit of 200k ,if we invest directly,but what if the additional amount is coming from the dividen,will it still be re-invested?

i suggest u use this to calculate;
http://download.cnet.com/Home-Mortgage-Cal...4-75326943.html

it is for home mortgage but it is the same principal(reducing balance loan). U just calculate with 25 years loan and check when u terminate at 5 years.

You only have to pay back the balance of the loan( the bank will forfeit the ASB certificate but will give you back the principal amount)

For example,
Scenario 1: Take 200K loan(1169.18 per month) for 25% years with 5% interest(assume constant) , ASB dividend assume constant at 7.5%
-U terminate the loan after 5 years. U will get 109,965.50 (dividend and principal given back by bank)
Scenario 2: Credit 1,169.18 to ASB every month for 5 years. ASB dividend assumed to be constant at 7.5%
- U will get only RM84,797.24 at the the end of the 5th year.

The difference is a staggering, RM25,168!!!

Risk: BLR could increase and ASB dividend decrease which is unlikely as historically, Dividend increase with BLR, heck even FD rate increase with BLR.

This might be shocking to uninformed investor, but the reason you can get this amount is because the dividend is re-invested, which is the case for ASB.

This post has been edited by backspace66: Jan 26 2014, 01:25 PM

some have lock in period. Maybank for example have a 3% penalty if terminate the loan in 2 years. After 2 years no penalty.

Have u heard of building good credit rating by using credit card? By using credit card and paying promptly before due date that itself is sufficient. Bank wont be so hesitant to give u loan after u have build good credit rating.

Never heard of such case before unless his income is less than 2k or he just started working(less than 6 months).

hello, i suggest u learn the basic of investing first. Learn about the yield of ASB first. Assume ASB yield is at 8%. From the 200K you invested, you will get 16K. Sorry for stating the obvious, 16K is less than 25K, you still have to top up 9K every year.

It is not even 1 year yet. You will have to wait until aprol next year for the answer . My guess the yield would be sligthly higher than as1m, maybe 6.8 to 7%.