Aiyo, these people always easily get conned by bank. Go do your own calculations lah.

If you put RM 7,224 cash every year for 20 years AND if you can get 7.3% interest annually AND reinvest your dividends, your money will be worth RM 328,326.39 due compounding effect of interest. If you take the loan you will get RM 100,000 and not much else. Where does the extra 238,326.39 goes to? Ask the bank, as they will love you.

This post has been edited by gark: Mar 24 2010, 04:41 PM

Yes you can get the dividend to pay the loan and principal, but if you calculate properly, you can get much more by paying direct to ASB.. your choice of whether you want 100k or 300k. If you keep paying the loan with dividend basically your money will not grow for the next 25 years. Inflation will eat you alive. Look at the calculation of my last reply.

This post has been edited by gark: Mar 26 2010, 11:35 AM

No one is asking you invest 200k cash lumpsump. . Just imagine since you are going to pay Maybank RM 1,100 for 25 years, what if instead you pay the bank but pay to ASB instead? What will the results be like?

Use back your assumption of 7% dividend, and pay RM 1,100 a month.

(a) if you pay RM 1,100 per month to ASB and reinvest the dividend, after 25 years you will get = RM 893,329.41

(b) if you pay RM 1,100 of the dividend is used to pay Maybank, after 25 years you will get =RM 220,000.00

Which one you prefer? You still pay the same amount at RM 1,100 per month either to the bank or ASB only. Don't get conned by bank easily.

This post has been edited by gark: Mar 26 2010, 01:02 PM

There is no free money, just that you are surrendering your future profit. In the end what is it that you want to achieve? You want to earn big money for a comfortable retirement right? If you want good profits then you must not use leverage for this kind of investment, you need blood, sweat and tears to earn and invest the money. If you want to go for the loan way, another simple calculation for you to open your eyes.

You pay Maybank Rm 1,100 per month for 25 years = 1,100 x 12 x 25 = RM 330,000

Your gains after 25 years = RM 200,000 (principal) + (RM 800 (extra dividend) x 25) = RM 220,000

Your profit = RM 220,000 (your gain) - RM 330,000 (your liability) = - 110,000 (Realized loss), YES that is a NET loss of RM 110,000 for entire loan/investment period.

So the compounded returns of your investment (ROI) via Maybank's ASB loan is - 1.6077 % Even put money in 0.2% interest savings account also don't lose like that.

The above is a very simple accounting, yet so many have their eyes clouded by instant gratification or money that they lose sight of their future plans, that they are willing to lose money in the long term. The bank is the one earning YOUR money.

Sigh, so many falls for this.... . I must give credit to the banks, they are very smart in marketing these ASB plans. Kudos to them. (Time to buy more Maybank shares. )

This post has been edited by gark: Mar 26 2010, 03:34 PM

Omels,

Investment is easy, just set up your bank to auto deduct lar.... think of RM 800k, sure can already. Also refer to my last post, are you sure you will goyang kaki for 25 years? Not the bank goyang kaki ah? Invest via maybank you will lose -1.6% per year wor....

This post has been edited by gark: Mar 26 2010, 07:46 PM

Well it's a choice everyone must make. Seems like you are willing to pay RM 330,000 to gain RM 220,000. Well it's not my cup of tea.

This post has been edited by gark: Mar 26 2010, 09:02 PM

I suggest you calculate it again in terms of compounded interest, if you pay the installments directly to ASB you will get more returns, with the simple reason that you do not need to pay the bank interest. Not to mention BLR has already increased 2-3 times already...

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Added on July 30, 2010, 9:01 amHere is a sample calculation for those who not able to calculate compounded returns.

Using Maybank- ASB loan financing Table

Calculation 1 : ASB Loan

Loan Amount : RM 100,000
Repayment : 20 years @ BLR-1.65%
Monthly Payment = RM 642 x 12 = RM 7,704 per year
Total payment after 20 years = RM 154,080

Expected Dividend = 8.5% (Based on last year dividend + bonus)
Dividend per year = RM 8,500 x 20 = RM 170,000
Total Returns after 20 years = RM 100,000 + (Rm 170,000 - RM 154,080) = RM 115,920

Calculation 2 : ASB Investment

Monthly Investment : RM 642 x 12 = RM 7,704 per year
Expected Dividend = 8.5% (Fully reinvested)

Total returns after 20 years = RM 404, 375

Well it's your choice if you want to pay the banks or pay yourself?



This post has been edited by gark: Jul 30 2010, 09:01 AM

The point is to highlight the differences in the total amount you get after 20 years. IMHO, the calculation by Masami is not correct, as it does not assume the interest & principal payment to the bank. You think the bank no need to makan kah? The 154K is used to pay bank your bank loan. If you want to let the bank earn most of the investment money, you are more than welcomed to do so. Just don't miss any payment in the 20 years, or your ASB certs will be forced sold.

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Added on July 30, 2010, 9:47 pmEven if you do not deduct the payment then, RM 100,000 + RM 170,000 in dividend = RM 270,000. If you pay the 7,700 per year directly to ASB account then you get RM 404,000 in 20 years with all dividend reinvested. There is no need to minus the total amount paid because it is your own money. Which one you will choose is up to you.

Anyway the money is yours, so do whatever you want with it.

This post has been edited by gark: Jul 30 2010, 10:04 PM

Well there is always many sides to an opinion, there is no right or wrong just different approach. If you do feel strongly on yours, well you should go ahead with your financial plan. Good luck.