Capital

This is the main issue for new house purchaser to get their first house. They always claim how to buy if the down-payment itself can cost almost RM 100,000 and hundreds of excuses will be thrown to whoever advising them to buy the first house.
 

So, are we agreed with all these new purchasers? If yes, then I have to further give reasoning to eliminate similar excuses related to high down-payment. Why am  saying so? It's simple because whichever stopping factor can listed out so that can be resolved one-by-one. Firstly, why the purchaser need this amount of money as the down-payment? What could be the price of the property or house he's/she's going to buy? How to develop the capital for down-payment? Is he/she eligible for the loan with the selected property?
 

Let us discuss on the amount which is RM 100,000 and he/she needs this amount? Any idea? Yes! At least 10% from the selling price has to be paid as down-payment if no rebate or discount is given by developer or the owner. Why not the purchaser looking for some units which giving some discount especially rebate for the down-payment by allowing us to pay only booking which varies between RM 1,000 - RM 10,000. Furthermore, why this purchaser(s) are looking for property something his/her dream house? Would it be good to purchase whichever can give us back some money to create positive cash-flow, wouldn't be?

 

Employee Provident Fund (EPF) – Part 2

Let us focus on withdrawal of EPF savings to pay-off housing loan where I have highlighted earlier in previous article. How to choose among all four (4) types to be the best option? Let us discuss further on we can manipulate so that we can benefit. Not to forget, all these are legitimate and halal to be executed and it depends on how and what we choose on the withdrawal type.

Very common for new buyer to withdraw for the new and/or first house to avoid any down payment with own cash. However, have we ever noticed aware something not good by using or cash? Again this is based on case by case where if it’s required or mandatory to pay down-payment of 10% then no choice besides to pay the amount. If we’re buying with some rebate by the developer or by the owner, there might be some scenarios where we’re not really required to pay the down-payment besides some charges and fees for lawyers. So what would be the scenario where the purchaser normally still withdrawing the EPF account 2 amount to pay as down-payment? Let us discuss further about this scenario to have better clarity.

As discussed earlier, new purchasers for the first house don’t have any experience in purchasing a house, hence, end-up with some technical issues which will make the decision made is not beneficial for them. Our mentality to reduce as much as possible for housing loan must be removed from our mindset. Some may say that our house to be stayed must be loan-free property because it takes money from our pocket. YES! I agree with you but let us manipulate first so that we can manipulate for our benefit. There are some winning points I would like to share for our benefit mainly on documentation required, financing profit rate, and loan amount. There might be some area I missed out you may leave the comment for further discussion.

The most significant benefit is mainly on the financing profit rate where as everybody aware the concept for housing loan, “higher the loan amount, lower the profit rate” and this is very common in most of the banks. This is not something I’m sharing just by reading but based on personal experience where profit rate for loan below RM 100,000 is BFR – 1.6 and above RM 100,000 is BFR – 2.2 (this is before new mechanism on profit rate is introduced). Just to share in term of monthly instalment, my monthly instalment for housing loan of RM 108,000 is same as my housing loan of RM 91,000 which is approximately RM 500. Let us read and digest first before we go further discussing other types.

Cash-flow

Why we always talk about cash-flow? Why flow? What would be the main criteria for the health specifically on our blood circulation system? How about our plumbing system? How to judge our plumbing system is good enough? How about the traffic? What is the main criteria to claim that our traffic is good? YES!!! The answer is very simple where the FLOW is the main criteria to gauge the healthiness of all the above mentioned. Hence, the main criteria to gauge our health level in our financial report is the cash-flow. Some would say that this cash-flow is only applicable to business and not for individual which salary based source of income. Great! Let us discuss further about the cash-flow that we can apply in our day-life.

I believe most of us have read my previous article on Saving - Part 1 and Saving - Part 2 which is the main criteria to start our investment portfolio. I also have published on our first investment would be our steady savings which can be read here. As highlighted earlier where people may claim that cash-flow is only applicable for business and not much related to person with salary based source of income. This scenario is not really a credible scenario because the first investment portfolio is via our saving, you may read Investment – Savings. Hence, cash-flow for an individual as a start will be the amount allocated for the savings every month. If you noticed that you can’t able to manage your cash-flow at least with certain amount to show the positive cash-flow then you have to develop attitude towards investment mindset, you may read here to have some idea.

When you have developed to have positive cash-flow from your monthly income which is your salary based income source then with some capital you have developed from your saving you may start our investment portfolio. Bear in mind that when we discussing about the investment portfolio, it is not necessarily to be portfolio creating millions of dollar in our cash-flow but at least something positive which could be just RM 1. As we discussed earlier, we’ll find that our portfolio slowly will give more and more cash-flow which ultimately will create our multi-million wealth portfolio. How to reach that? Be patient and passionate with our goal to achieve our financial freedom. Remember the double-P!