"HOW I MADE MY FIRST RM100,000!"

"The more you learn, the more you earn" 

I achieved my first RM100k after 3 years of employment through consistent learning, saving & investing. After graduating from university, I entered the job market at age 22. My first pay was RM2,200, after deducting from EPF / Socso, my net pay was around RM1,900. That's is how low it is... 

After working for several months, I realized that there is no such thing as job security in the labour market. Your manager / boss can just fire you anytime (MAS, Megasteel). In addition, I dislike reporting to someone, and the need to follow instructions especially if its not a good one. Also, I recalled some colleagues were complaining about the skyrocketing property price, and so I went to my office desk and did some calculation. I realized that I could not buy a decent property if I were to continue my way of life. My yearly increment is only 5%, and after 2-3 years of work, the promotion is another 5%. That is when I realized its time to do something serious about it. Simple maths would tell me merely relying on employment would not bring significant change in my life. And I am always at my management's mercy. 

IMMEDIATE STEPS:

1) I commit to SAVE at least RM1,000 every month. With my low salary, it is really difficult to save. However, it is a COMMITMENT and not merely a want. In order to save, that means only economy rice (rm5 to 6) for lunch everyday, forget about restaurants. In order to save, that means no overseas vacation, only domestic travel. No shopping, no car purchase (walk / public transport), no gym membership etc.  

2) I commit to increase my INCOME by giving tuitions and workshops. At that time, I knew how to make rm100k in 3 to 4 years, and shared that to others who are willing to take a chance on me with a fee. Am grateful and thankful for the support. In addition, I sold unit trust funds too. 

3) I commit to LEARN. I started to read financial books, and attended numerous financial talks (sometimes I have to take a cab / bus just to attend a talk). Educating myself is a must in order to get ideas on what I needed to do in order to make that change. I even attended free unit trust classes and follow closely the analysis of unit trust agents who are very good in picking good funds. The class is free as I am an agent too (Now you know why I am a unit trust consultant then huh :P)        

4) I commit to INVEST. After learning how to invest, it is time to pull the trigger. I invested in shares and unit trust and monitor their performance. Of course mistakes are made along the way, but never say never. Keep learning and have confidence to do it again and again, till I make it. 

5) At age 24, after 3 years in employment, I managed to make my first RM100,000. Am grateful for that, the journey has been an amazing one. The struggles are definitely worth it. As some say, "the bitter the struggles, the SWEETER the victory." 

That was also the year I completed the Master's Degree!

And the year I published my first Financial Book :)

WHAT ABOUT NOW:

To be frank, I am still doing all the above except I pamper myself more now. Every weekend, I would dine in restaurants and go for overseas vacation once or twice a year with my passive income. I love shopping once in a while. I go for "Go-Karting" and rock climbing too. 

I do keep track of my spending though, just to make sure I am not carried away by the world. 

THE PLAN FOR THE FUTURE

The plan is to be FOCUS and remain DISCIPLINE in learning, earning, saving and investing. It is important to allow the 8th wonders of the world to work, and that is the "POWER OF COMPOUNDING".

So what about you? How is your journey?

I wish your journey is an amazing one as well.

Please "LIKE" and "SHARE" my page in Facebook (George Leong's Investment Journey). 

Do register for Saturday's (5 November 2016) "FREE FINANCIAL SHARING SESSION" at Subang Jaya, 10am to 12pm with the following link: https://goo.gl/forms/juEU5keEN1jrnZLC3   

.  

Join us and learn:
(a) How You Can Buy A Property at AGE 22!
(b) How You Can Have RM100,000 Net Worth by AGE 25!

Take Massive Action in your sweet twenties! :) 

"THE BIRTH of a HOMELESS GENERATION"

Is owning a property a dream to many? Would you like to have your own home one day? I guess many do want it. Sadly, as I conduct a research, I discovered there is this growing phenomenon facing the youth population in our country Malaysia, that is "The Birth of a Homeless Generation'.

Affordability

1) Based on Budget 2014 announced by our Prime Minister Najib in October 2013, per capita income is estimated to grow to US$ 17,173 (RM 54,253.97) from US$ 16,743 (RM 52,895.49).For your information, per capita income refers to average income and is used as a measure of the wealth of a country's population. 

2) That will work out to be an average of RM4,521/month per capita income. Could people afford to buy a property based on that income?

Question: So where would you want to stay? 

Answer: Hmm~ I want to stay in a condo within Klang Valley with proper facilities & established public amenities, I want a good lifestyle (LIVE, WORK, PLAY). 

Latest Property Prices, 2016

(a) Setia Walk (Puchong, Selangor)

Selling Price: RM611,000 (1,390sf, 3+1 Bedroom)
Source: Propwall.my

(b) Gembira Residence (Kuchai Lama, Selangor)

Selling Price: RM700,000 (1,168sf, 3+1 Bedroom)
Source: Propwall.my

Alright, assume you are looking for an older condo and found a very good deal with a Selling Price of RM 500,000 ( 3+1 Bedroom, 1300 sf Condo at Klang Valley) 

Please refer to the table below for better illustration:

Item	RM
Property Selling Price	500,000
Down-payment (10%)	50,000
Loan Principal (90%), 35 years loan	450,000
Interest rate (BLR – 2.4%), BLR = 6.6%	4.2%
Monthly Loan Instalment	2,047

Remember about the average income per capita of RM4,521 stated above? Your balance will be:

Balance of Disposable Income: RM 2,474 

(Workings = RM 4,521 - RM 2,047) 

What about other expenses? Lets take a look:

Item	RM
Balance Income	2,474
Car Loan (rm60k +/- car)	600
Petrol	300
Toll	50
Car Park	50
Car Maintenance	100
Insurance, Road Tax etc	200
Car wash	50
Total Car Expenses	1350
Condo Management Fee	250
Food (rm20 x 30 days)	600
Smartphone bills	100
Entertainment (movies, holiday)	200
Clothing	50
Balance (Deficit)	(76)

Wow, negative balance of RM76...

What about parents allowance? baby expenses? property quit rent & assessment fee? holiday expenses? insurance payment? etc

IMPORTANT QUESTIONS WE SHOULD ASK OURSELVES:

(a) Do we have RM100,000 CASH in our bank account by 30?
10% downpayment of rm50k, legal & stamp duty fee for Sales & Purchase Agreement & Loan Agreement of rm20k, renovation, furnitures etc

(b) Is my income sufficient to support my lifestyle expenses and to service a property loan in the future?

(c) Where would I want to live in the future? What type of property? What kind of lifestyle?   

I would say most youth in Malaysia would not have RM100,000 cash by 30, and would not have an income that is sufficient to service a property loan, car loan and daily expenses.

The plan of owning a property is usually delayed, or will become a far-fetched dream. Just look at the youth in Singapore & Hong Kong, it's becoming an ultimate dream to just own one property on their own.

Many youth (I said the word 'many', not all) will choose to deny this phenomenon, they basically live in denial. And many will say, it's alright the property prices will come down, I will make my purchase then. It's true to a certain extent, lets take a look:

Cooling Measures on Property Prices:

Below are 6 measures taken by the government to cool down the property market by reducing speculation and making sure property loans are granted to genuine buyers who can afford to service the loan. (We don't want to be like the United States who is recovering from the subprime-crisis)

1) Removal of Developer Interest Bearing Scheme (DIBS)

2) Higher Real Property Gains Tax (RPGT)

3) Loans to be assessed based on Net Income (after deducting EPF, Socso, other loan payment), and not Gross Income 

4) Loans based on Nett Selling Price for new property launches (after deducting discounts, legal fees etc)

5) Foreigners can only buy properties above RM1 million

6) Refinancing on Residential Props under Individual to a maximum 10 years period

With the measures taken above, property prices is expected to reduce marginally or remain flat in locations that are not very attractive.

However, there are factors that will drive property prices up in good locations (5-10% increase), refer below for better explanation:

Factors to drive Property Prices UP:

1) Subsidy Rationalisation on Sugar, Petrol, Electricity etc 
Just take a look at the prices for 'Teh Tarik', 'Roti Canai', 'Mee Soup' etc. Increase in construction cost or daily expenses will be passed on to the next property buyers.

2) Supply vs Demand in key areas (Greater KL, Klang Valley, Penang, Iskandar Malaysia)

According to a property market report by the National Property Information Centre (NAPIC), average housing completion yearly was 100,000 units (Supply) relative to the average annual household formation, which was 140,000 (Demand).

Therefore the issue of not producing houses fast enough in key locations to cater to the increasing demand arises.

3) Foreign investments

Foreigners from Singapore, China, Hong Kong etc to compete with locals to purchase properties in strategically sustainable locations such as properties within Klang Valley, Greater KL, Penang, Iskandar Malaysia etc.

4) Goods & Services Tax @ 6% (April 2015)

We have already noticed the price hike of daily consumers goods & services, with the increase in construction cost, who do you think the developer will pass on the cost to?


Reflection:

I really hope that I am WRONG and my friends are RIGHT that property prices will go down to an affordable level in the future, as many could afford to buy themselves a property.

But what if I am RIGHT, what if prices went up to RM700,000 for 1,300sf condo in the Klang Valley? In fact, new launches are selling at high prices despite the decrease of property transactions in 2016. For example, a residential tower (Kota Damansara) was launched at rm1,300 psf by Tropicana; another (along Old Klang Road) was launched at rm1,300 psf by Bukit Kiara. You can check at the property launches by these developers (EcoWorld, IJM Land, Gamuda, WCT, Malton, SP Setia, Mah Sing etc), and you would notice most of their prices start from rm700 psf, equivalent to min RM700,000 for a 1,000 sf unit (3 bedrooms) in Klang Valley. Wouldn't it be a BIG BIG PROBLEM for many youth out there.

There is a saying, it's of little use to make any prediction, it's better to be READY at ALL TIME. I prefer the latter over the former.

Solutions:

1) Get one property at a discount AS SOON AS POSSIBLE especially for people without a property.

2) Increase FINANCIAL EDUCATION to make GOOD FINANCIAL CHOICES every day that will make a great difference in your life.

3) Take MASSIVE ACTION to make it happen, merely knowing something without acting on it will only make you a FOOL.

Please "LIKE" and "SHARE" my page in Facebook (George Leong's Investment Journey). 

Do register for Saturday's (5 November 2016) "FREE FINANCIAL SHARING SESSION" at Subang Jaya, 10am to 12pm with the following link: https://goo.gl/forms/juEU5keEN1jrnZLC3   

.  

Join us and learn:
(a) How You Can Buy A Property at AGE 22!
(b) How You Can Have RM100,000 Net Worth by AGE 25!

Take Massive Action in your sweet twenties! :) 

MORAL OF THE STORY: TO BE AWARE OF YOUR SURROUNDING

Back in 2014, I recalled that while traveling on the road, we (my friend & I) noticed there are more newly-designed Mercedes cars on the road. Very quickly, we checked and found this company CCB, the distributor for Mercedes cars in Malaysia. 

The past was history, today there are so many Mercedes cars on the road. Its company profits has increased more than 100% over 1 year. Its share price has increased by 67% over 1 year too. 

Hence, it is vital to pay attention to one's surrounding. The moment you spotted something unusual, it may be an opportunity to invest, and make some money to improve one's life. 

Have a blessed Wednesday :)

Please "LIKE" and "SHARE" my page in Facebook (George Leong's Investment Journey). 

Do register for Saturday's (5 November 2016) "FREE FINANCIAL SHARING SESSION" at Subang Jaya, 10am to 12pm with the following link: https://goo.gl/forms/juEU5keEN1jrnZLC3   

.  

Join us and learn:
(a) How You Can Buy A Property at AGE 22!
(b) How You Can Have RM100,000 Net Worth by AGE 25!

Take Massive Action in your sweet twenties! :) 

ABANDONED PROJECT! - PART 2

Further to my sharing on April 15 on "abandoned project", I would wish to share with you a few STEPS you can take to avoid falling victim. 

Everyone will want to avoid buying an abandoned project but the problem is, not many are willing to do their homework before buying what could be say, the LARGEST ticket item in their lives.

STEPS you can take:

1) BUY A COMPLETED PROPERTY
If you are buying your first property, buy a completed property where you can see and touch. This can prevent you to be stuck for many years if your first property happens to turn out to be an abandoned property.

2) CHECK THE DEVELOPER BACKGROUND
Check the developer previous track record, find out more about other completed properties the developer has undertaken. Go and view it yourself. Make sure the company directors are the same. (Explain more in point 4)

3) PROPERTY FORUM
You can view forum like "lowyat" to see what others are commenting about a project. Sometimes, you can find useful info from other users. 

4) AUTHORITIES (SSM)
If the developer is registered under "Sdn Bhd", you can check the company online via SSM (Suruhanjaya Syarikat Malaysia). Just pay not more than rm15 and you can obtain the company details such as:
a) Directors of the company (are the directors the same with other "Sdn Bhd" set up of previous property developments
b) Income Statement
c) Balance Sheet (check its cash position)

5) BURSA MALAYSIA
This would be very much easier if the developer is a listed company. You can check its Annual Report on its previous performance. Besides, you can view its "DEBTS" & "CASH POSITION" from the company's balance sheet. If the company is cash rich, the best if its a "NET CASH COMPANY" (cash > debts), it is very unlikely the company could not complete the project. 

6) COMPETITORS
You can also ask the competitors (staff of other property companies) about the developer reputation and track record. As they are in the same industry, they usually are aware about their competitors actions. You be surprise to receive many vital info from them. 

The above are a few ways you can take to prevent buying an abandoned property. However, it is important to note that there is no such thing as 100% risk-free in investment. 

We can do our best by doing homework, it minimises our risk but it does not eradicate all risk. 

Please PM me if you are interested to learn more about "Stock Investment" and "Property Investment". 

Have blessed day ahead! :)smile emoticoHave a blessed day ahead! :)

"FINANCIAL INVESTMENT WORKSHOP"

"FINANCIAL INVESTMENT WORKSHOP"

Date: 30 April 2016 (Saturday)
Time: 9am - 5pm
Venue: Subang Jaya 

(a) How to make RM100,000-RM300,000 in 4 years or less via savings and investments in the property market and stock market!

(b) How to have RM1 Million Property Portfolio in 5 years or less!

(c) How to invest in the Stock Market and make 10-40% per year CONSISTENTLY using fundamental & technical analysis!

(d) How to build your 6-figures (RM100,000 & above) Stock Portfolio?

(e) How to build your PASSIVE INCOME from the Stock Market!

With the cost of living increasing, let's learn how to make our money work harder for us. PM me in my Facebook page "George Leong's Investment Journey" if u are keen to join. Thank you! :)

ABANDONED PROJECT!

Everyone will want to avoid buying an abandoned project. However, there are several people I knew who are unlucky. 

Not only do they have to continue paying their monthly mortgage over an abandoned property, they have to deal with the psychological battle to having peace in their mind. 

To add to their horror, many may not get to obtain additional housing loan for a 2nd property. In short, they may be stuck for a few years. 

The good news is, the government has taken some approach to work with stakeholders in order to revive the abandoned project. Laws have been introduced to punish these irresponsible developers. 

However, it may take a long time to revive a project. One example will be "Main Place" @ Subang Jaya. It was abandoned for more than 10 years, but luckily it has been revived and is doing extraordinarily well now (Main Place shopping mall by Bina Puri Construction Company).

Besides, whether we have strict enforcement of the laws to prevent abandoned projects is another key issue that has to be addressed. 

In my next post, I will share some ways we could use to reduce our risk of buying a project that could be left abandoned. 

Stay tuned! 

P/s: You may 'LIKE' my page in Facebook (George Leong's Investment 
Journey) and 'SHARE' this post to benefit others as well. Thank you! :)

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.

P/s: You may 'LIKE' my page in Facebook (George Leong's Investment 
Journey) and 'SHARE' this post to benefit others as well. Thank you! :)

Please PM me if you are interested to sign up for my "FINANCIAL INVESTMENT WORKSHOP" or "CONSULTATION".

Have a blessed day ahead! :)