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.

Loans

Do we need loans in our life? Is it important in our life? Some says, it's not recommended to have loan or many loans. I believe most of us have heard or seen about good debts and bad debts right? So, how to know whether the loan we are acquiring is good or bad? Simple concept on this good and bad debts is on the impacts from these two (2) debts/loans; good debts/loans is something can make us richer and richer, whereby bad debts is something can make us poorer and poorer.

As discussed earlier, there are so many products in banking world and to be more specific; they are so many loan types based on needs and requirement. Sometime due to our knowledge level, we may acquire bad debts. This may happen accidentally or unfortunately. Another rule of thumbs is that it is very to get good debts and it is very easy to get bad debts. Sounds good so far? Let us discuss further in upcoming articles.

Shopping

Shopping is an activity in which a customer browses the available goods or services presented by one or more retailers with the intent to purchase a suitable selection of them. In some contexts it may be considered a leisure activity as well as an economic one (source: http://en.wikipedia.org/wiki/Shopping)

Shopping is very synonym with us and it is very popular during festive seasons due to our culture to buy new items during this season. Most of us been thinking that shopping is something ended-up with buying. This is especially those never had experience window shopping. For those who had experienced window shopping might be more confident when telling that shopping not necessarily ended with buying goods. Even window shopping sometime not really a good practice because ended-up with buying the interested items sooner or later.

I define shopping for my own use as evaluation process before purchasing any interested items so that we are getting the best of the best in the market. It could not be the real best of the best but at least the best of the best among we evaluated. Hence, we'll have some confident when making judgement to purchase it whether in term of price or quality. So far I'm been writing about shopping normally done by us as human being.

Come into real picture about shopping for me actually is about getting the best deal which lead us to achieve our goal financial freedom slowly but consistently. I've been writing about increase our financial knowledge by reading books, attending courses, attending seminars, etc. So, how we can apply the concept of shopping in this field? You may go shopping for books available in the market about financial education to educate us about how to succeed or at least to prevent for losing our hard-earned monies. When you start reading, you may know later how to go shopping on money related courses and seminars. Knowledge is actually preparing us shopping for better choices mainly related to good shopping; namely shopping for credit cards, shopping for lawyers, shopping for loans/mortgage, shopping for real estates, etc.