HOW TO MAKE RM18,000 EVERY YEAR???

UNITS GROWTH!

In Unit Trust investment, many investors often focus on the price movement, or what we call "capital gain / loss".

They forgotten to focus on UNITS, though the investment is named "UNIT Trust".

I knew of this client of mine who invested RM100,000 back in 2013. Let me share with you his story. 

He focuses on cash-flow, to assist in his retirement planning. Hence invested in a fund that produces INCOME, or distribution every year. Here are the distribution details:

2013 - RM 5,204.51
(re-invest the amount above to grow his units, from 177,997 units to 186,769 units)

2014 - RM 7,367.37
(re-invest the amount above to grow his units, from 186,769 units to 200,186 units)

2015 - RM 6,005.58
(re-invest the amount above to grow his units, from 200,186 units to 212,205 units)

As you can notice from above, you can choose to reinvest to grow your units. Over 3 years, he has increased his units by 25,436 units. In the next 6 to 7 years, his total units should reach the 300,000 mark.

The average distribution of the fund over 10 years period is 6.36 cents. To be conservative, let us just take 4 cents in our calculation, that would be RM 12,000 distribution per year (rm0.04 x 300,000 units).

If he chooses not to re-invest, but receives the distribution to his bank account, that would be RM 12,000 every year to his bank account for LIFE! He can even passes it to his children for almost "infinity". (just kidding, the fund has only been around since 1981, but it should last for a long long period to come).

RM 12,000 every year, that's 12% distribution yield from RM100,000 investment. And that is based on a conservative figure of 4 cents. If we were to take the 6 cents (10 year average), that would be RM18,000. 

TIME is a crucial factor here, so please make it your friend and not an enemy. And one has to have PATIENCE to allow the investment to grow.

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