The Affluent Wealth Continiously Grow

Time is Everything..

All the while, vacant land is less favorable tools that average investors use to keep their wealth. One of the main reasons is holding period which is too long. The vacant land you purchase might only be valuable after 30 years. So do you have 30 years to wait? Not many people can afford to wait for that long. But the beauty of vacant land is mainly depending on how long you can hold on your land. As I always mention, for vacant land investment, timing is the most crucial factor that we need to adapt and comply on. The rules of the games are simple; you are required to hold on your property as long as possible because the longer you hold the higher your capital appreciation.

5 Star Shangri-la Hotel at Tuaran

This proven true when one of my business associate brothers makes few millions from selling his beach front land at Tuaran lately. For your information, Mr L is hardcore land accumulator especially beach front land in small Tuaran for the past 30 years. He never sold any piece until last year when he sold his first piece for almost RM 1M per acre and recently he sold another pieces for RM1.8M per acres pocketing more than 100 times profit over his invested capital. Since 1980s when he was around 30’s years old, he already started his land accumulation plan. Today he own more than 100 acres mostly prime beach front land with total acquisition cost of not more than RM 1M. My dear friend, base on simple calculation we know that money proceed from his first 2 pieces of land sales is more than enough for him to retired comfortably leaving the rest of the acreage unsold as net profit yet to be harvest.

Land Below The Wind - Perfect Prime Tourism Land

That’s worth hundred millions over the next few years. Couple with last week announcement by Bina Puri Bhd on their Master Development Plan at Tuaran comprising resorts, hotel, high-end condominiums and villas worth RM1.5B definitely added more spice into Mr L portfolio. Remember, nothing going stop the growth of Mr L wealth until the day he decided to sale his entire land portfolio. But why still a lot of people don’t really invest heavily in land?

The dilemmas of the vacant land acquisition are:

Young Generation 

Direction of Life

25 years old to 35 years old: No money to buy simply because just started their career life. Furthermore this group is the most active in consumer market especially electronics, luxury holidays, luxury cars, and branded goods. All these spending as flatten their saving capacity for investment. The best that they achieve is purchase a house or apartment for owner occupied.

Middle Generation 

Looking for better life

36 years old to 45 years old: They are tied up with all the family commitment especially children education and personal career pressure. During this period, most of them are working to repay banks loans especially their life time housing loans and short term loans like cars, credit cards, personal loans, children education loans and renovation loans. So they will totally reject your suggestion of purchasing vacant land for keeping hoping for future appreciation.

Peak Generation 

After few decade of hardwork..

 46 years to 70 years old: They are reaching pre retirement life whereby they will not buy any vacant land to keep due to time constraint. But this is the toughest period for them when they found out their retirement fund is not sufficient to support their remaining non-income life time. At most they will buy some rental collection properties at this stage provided they realize early. If not, they are spending their entire working life to fulfill their own needs, wants and responsibilities ignoring their own retirement and future generation wealth.

Moreover, to invest in vacant land you need to have huge initial capital. That mean you need to come out with at least 50% cash of the purchase price as the bank are providing low margin of financing.

High Interest Rate

And even they did the interest rate is too high which will increase your holding cost over the long run if you purchase the land to keep and hold. It will be more worthwhile if you purchase expensive land for immediate development as the interest expenses can be share once the development started.

Despite long holding period for harvesting, low margin of finance provided by financial institution, high interest rate and huge initial capital, yet some smaller group of people around us like Mr L, Mr W, Mr S, Mr C, Mr T, and a lot more make it. Why? Remember we are all equals. Why some make it and a lot don’t. Ask yourself why you can’t make it since we are having same 24 hours a day, 7 days a week and 365 days a year.

So act now and create some exciting bedtime story for your kids to tell your future generation for what you have done today. It would not be selfish if you leave your future generation with solid wealth as capital for them to explore further knowing the future is more challenging than today. On average people that I know trying not to understand the beauty of property ending up they keep so much cash in hand and some even worst blowing it on consumers good and luxury living.

Brighter future within your reach

My dear friend, life is all about how you build your solid wealth and pass it on to the next generation. Don’t be so selfish acting on your own. Think twice whenever you spend and invest if you don’t want to leave a haunted bedtime legacy for your kids to tell in the future. Happy Investing.

Related posts:

1. Keep Leveraging in Wealth Building
2. You cannot Grow Land