Meaning of RM100,000.00

To Employees

What is RM100K means to Mr. Employees?

You earn and save

In recent month I always ask this question to a lot of my business associates. I received a lot of answer with different views depending on their age and employments back ground. RM100K cash sound like huge amount to working class employees. Imaging if you are earning and save RM5K per month, you need to work for 20 months to accumulate RM100K without any spending. And for those who earn RM2K, you need to spend more than 4 years to accumulate same amount. The worst thing happens when you need to save RM100K cash with your saving of RM1K per month. That means you need to work and save for 100 months equivalent of 8 years or 25% of your working life. With more and more inflation pressure coming in, I presume saving rates will drop especially when GST (Government Sales Tax) introduce next year. This is where rich getting richer while the middle working classes are squeeze for survival.

To Cash Keeper

Fixed deposits are the common tools that people around us use to keep their cash in hand. In return banks are rewarding their customer with 2% return. So with RM100K you are getting RM2000 per annum of RM166.67 per month. Of course some of you might say this is for emergency fund. But for me I prefer to use insurance to cover my medicals and life insurance. I believe once you are protected you don’t need to keep so much cash in hand as emergency fund. Those who just started their career life, you really need to fully capitalize your time and resources as time passed your responsibility will gradually increase and your investment portfolio will plunge further. For me FD means:

How high your wealth can grow?

“FIXED DIED” & “FURTHER DEPRECIATE’. Furthermore costing of putting too much cash in FD is too high especially if you are young. Think twice when you invest in it. This is what I call “No-brain” investment. So sorry for using such strong words but it’s a fact.

To Investors

Property Investors

To investor RM100K cash will be use to acquired more properties either paying cash or leverage further. But with huge escalating properties price recently, actually you can’t even own a 2 bedroom Beverly Hills apartment. Few years ago, 2 bedrooms Beverly Hills apartment are transacted between RM85K-RM100K compare to recently it was between RM100K-RM130K. That why I always as my business associate this question “Do you think the property price going to remain the same the moment you have the capital to invest?” True experience when I entered banking industry 7 years ago, Api-Api Apartment is selling for RM170k-RM200K for 3 bedrooms apartment @ RM130-RM140 per sf. Today the prices are transacted between RM250-RM300 per sf which is more than 100% over the previous prices. This return is excluding the passive income I received from the rental. So putting you money to work is the happiest thing that can happen in your life. It will be a nightmare when you found that your money are sleeping inside bank while you work like hell trying to earn and save your hard earn money.

To Me

To me RM100K is another leverage of RM800K-RM1M.

Increasing you power 10 times higher

I can acquire few residential properties or whole block of 2 storey commercial units which will generate me RM4k-RM6K rental per month. Of course this rental will be use to pay off my bank monthly repayments. But bear in mind, over the time my loan will decreasing while appreciation continue to grow even though I’m sleeping. My wealth is getting more day by day. Frankly, RM100K in today values is “nothing”. If you compare last year RM100K to this year RM100K, the value has easily depreciate more than 30%. The longer you wait, the lower the real value you can enjoy from your hard work.

Virtually we are losing day by day battle against inflation. So waiting to invest will add extra costing to cash keeper despite knowing it’s hard to earn and save in today challenging environment. Party is over, clean up your financial portfolio and start your new investment journey now. Happy Investing.

You cannot Grow Land.. CK Wong & KH Wong

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