How do you define “millionaire”? Having total net assets worth RM 1M after minus all liabilities? Or having net inflow of cash RM 1M per year? Or having RM 1M cash in hand? The actual definition is varying from me and you.
For me having a net worth of RM1 M is as easy as eating rice. You should agree with me. If you are not agree that means you are joining the common club known as “millionaires in millions”. Imaging having free from encumbrance’s property of Double Storey Semi Detached at prime location in KK easily can add RM500K into your net worth. And in metropolitan place like KL, any semi detach at Mont Kiara might reach few millions. So it’s not logic if you calculate base on property net worth unless you have few property under your portfolio.
What about having net inflow of RM 1M per year? Sound too scary to a lot of people who dream of becoming rich. Even sound wired to me. I presume 90% or more of the total population in Malaysia is not having net inflow cash of RM 1M per annum. Better don’t scare all of you; otherwise all of you will give up of becoming rich.
Or having RM 1M cash in hand? I ever saw such cash amount at Genting casino before. Feel like want to own it but I don’t dare to calculate how much I need to give to Uncle Lim in order to claim for my RM1 M cash. So are you entitled for millionaire’s status if you have RM1 M cash in hand now? Maybe not. Why I say so? Let us look at inflation rate in Malaysia for the past 12 months compare to now? Any increase in our general inflation rates? What is the actual inflationary rate in Malaysia? Do you agreed with government measurement? I only follow my own measurements. I would say inflation has filter at least 30% of my portfolio value since last year. That means if you hold cash of RM 1M last 12 months, the value has fallen to RM700K even though the figure is still the same. So think twice when you place your Fixed Deposit with Bank as they only give you average of 2% return per annum or less than 0.2% per month. After minus inflation rate, your net growth is -28%. The longer you hold the poorer you are.
The definition of “millionaires” for me is combination of all the above. Sound so scary, but that is the fact you have to accept. By means of having property worth exceeding RM 1M, net inflow of RM 1M per annum and cash in hand of not less RM1M only then you can have your permanent status of millionaires. To achieve the above sound impossible to a majority of the people. But bear in mind, you have no better choices than if you want to maintain your living style and the most important is to hedge against risk of future inflation which is unknown. Or else you can take an odd chance of investment with Uncle Lim & Uncle Vincent Tan whereby the chances is virtually one in few millions.
But how many people around us can have so much cash money in hand while continuous receiving cash inflow of RM 1M and not forgetting value of asset of more than RM 1M? Not many I think. So sad to say, I’m also not qualified to join the club yet. I only achieve first level of millionaires that is having net property worth exceeding RM 1M. It’s still a long way to go for myself to join the club. Looking at it, next level I need to generate more cash flow from my property portfolio while continue looking for better investment that will help to improve my inflow.
Those who are beginner, make sure you spend carefully and invest wisely as every dollar is your million dollars seed of success. I always believe a dollar today is worth more than a dollar tomorrow. The more money you invest today, the more you will be rewarded tomorrow. So remember, to be millionaires is easy but to maintain millionaires lifestyle take a lot effort and sacrifice of current lifestyle.
Looking at my dad (KH Wong), he has been living in frugal since 1970’s till now and that is the time where he started accumulating a lot of worthless land which no body foresee the value. And today he is retired with land value grow much above his expectation. Despite low income earner as driver, today he own multi pieces of land worth millions of dollars in his portfolio. How many of you can sacrifice your current living status in exchange for future comfort and lifetime enjoyment? My dad did it and I’m following his path hoping to harvest better result compare to him as I’m well educated while my dad not even a primary six graduates. I really salute for his effort and sacrifices thus I granted him an “extra ordinary multimillionaires” status and I promise to do better years ahead with more of his guidance’s.
So millionaires’ definition starts from having strong mindset of savings, investing and continuous of learning. You have to develop more good habits in the process of becoming real millionaires and not millionaires in millions. Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
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{ 14 comments… read them below or add one }
“net worth of RM1 M is as easy as eating rice” This sentence make me sweat a while.
Before reading this post, having 1M net worth for me is successful and true millionaires already. After reading your post, I revise my definition of millionaire. I still consider net worth of 1M as millionaire if I can sell my asset for 1M. Having net worth of 1M plus net income 1M and cash 1M, I will consider it as multi-millionaire.
How come the inflation had filter 30% of your portfolio in 1 year plus? From which aspect you calculate it?
Hi,
I calculate based on my own daily use product like foods, petrols, and other general expenses.
Eg. Maggie mee last year only cost me RM2.80 for 5 packet but today it cost me RM4.20. That is increase of 50% increase.
Eg. Petrol has increase to RM2.05 last week costing me additional of 13%
This is not counting on other general expenses like outside food and etc…furthermore my salary only increase less than 5% and FD return has drop to 2% or less. So I use the maximun inflation rate for myself to comfort myself and to fight against future inflation. I think you should agree with me the way I calculate. But if you continue using governmen measurement of 3% (inflation) virtually you are trying to convince yourself that you are still secure which I totally disagree. Its a silence killer for your wealth. Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
Ya, I never really calculate in detail about the price in the market cause I still staying with my family, comfort zone.
Ya, have to agree with you inflation is the wealth biggest enemy. Price double for stuff in average every 12 years but our salary never double. So, slightly increase in salary cannot compete with inflation at all. Employee struggle harder as they work longer.
Hi,
Sad to know that. But a lot of people surrounding me still choose not to do anything. They try their best NOT TO UNDERSTAND and try not to change. They are expecting to harvest durian from their rambutan tree.. What to do.. Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
Is it someone who earns a million dollars in a year? If so, is it based on gross income, or net after expenses and taxes? Is a millionaire someone with a net worth over a million dollars? Since most people have a huge chunk of their net worth tied up in their homes (a relatively illiquid asset), shouldn’t a true millionaire be someone who can lay his/her hands on a million bucks with a moment’s notice? Then again if you convert your Ringgit into other currencies say Baht, Rupiah or Yen and then owning millions of them, does that make you a millionaire? Everyone may have their own definition. As can be seen in his blog, CK Wong has his own definition which may differ from other people.
It is funny that while we are talking about the wishes of becoming millionaires many are not even sure what contitute a millionaire; and the definition can be quite subjetive depending on your environment. Just take our neigbhour Singapore for instance where the exchange rate of S$ 1 = RM 2.32, buying a house or condo there would automatically make anyone dealing with equivalent of RM 1 million. Let say a char koay teow seller decide to buy such property there (not much choices, even HDB flat would cost RM 1 million) and finally fully paid for it. By virtue of owning an HDB flat worth RM 1 million in Singapore does that make him a millionaire from Malaysian point of view?
How about another char koay teow seller living in Petaling Jaya who owns 4 of similar flats but their total value is less than RM 1 million. Between these 2 char koay teow sellers who do you think is richer from a Malaysian perspective?
I think many Malaysians in big cities such as KL are very rich. Their purchasing power is enormous as can be seen by the cars they drive, the expensive places they stay and how fast high end properties got snapped up in every launching.
The measurement of wealth could be rather ambigous and the value of portfolio vary drastically. Let me give you an example, say land bank. If you own even 1/2 acre in Petaling Jaya that would make you truly rich. But in Sarawak for instance, people who own 1,000 of acres of NCR land in rural area can barely escape from poverty. So how would we compare the wealth of a person who own 1/2 acre against a person who own 1,000. The law of relativity certainly stretches itself to a great deal.
There are definitely very few out of the 26 million Malaysians whose monthly incomes are up to RM 1 million. Businessmen might have such incomes at their disposal but is it really their money? Thus putting ourselves into the RM 1 million per month league is extra stressful and not necessary. From my personal perspective, a Malaysian millionaire should be a person who has no debt whatsoever, having RM1 million in cash on top of his properties. His properties should constitute what deemed to be normal for rich people, thus the expensive cars, fully paid big house, etc.
It is pointless to me to be rich or considered yourself a millionaire if you don’t live by it. A small town towkay who might have million Ringgits worth of asset but only own a small 2nd hand car, living upstairs of his shop, walking about shirtless in front of his shop, etc., is really not a millionaire. On the other hand people like Ting Phek King who flies in personal helicopter, etc are the real millionaires. Again this is a big league and not so relevant for any aspiring young people who wish to become a millionaire at young age.
RJ,
I agree with you. But bear in mind, not many people who know how to make money will know how to spend and enjoying life. Normally thoese who earn and save will have strong “un-spending” habit. While these who dont know how to earn and save will have extra strong spending habit. So its happen many ways. Anyway as long as you make sure your portfolio is reccession proof while continue receiving passive income then you consider your are a successful millionaires. Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
My idea of millionnaire is different from the rest of you. Ladies and Gentlemen, i am a MILLIONHAIR. Yupe you heard me right, and i’m proud of it cause it keeps me warm.
ITs not about how much you have. Its more about the journey to getting there that’s both interesting and challenging.
Hi Joe,
When you have it..its a number games..but when you dont have it..its totally different story!!
Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
For me, it is networth that add-ups to how much million or billions you want to have. It is how much Assets you have minus out all the Liabilities.
Hello CK Wong..
Thanks a lot for sharing your thoughts ..What would you advise in investing higher end projects like d ‘banyan .
Tq
Hi VJ,
Let me ask you back, what price you expect to sell year from now? What is your buying price? What is the expected rental yield? Happy Investing.
You cannot Grow Land.. Ck Wong & KH WOng
My buying price is around 1.5 M.. expected to sell after 5 years. Expected rental yield should be 15k per month ..
HI VJ,
So far I never found any residential property rented for that price. I’m less confident on this price. By the way, how many property you own now? What happen if the property is not rented out for the first 12 month? Are you financially capable of supporting 1-2 yrs negative cash flow? After 5 years what is your expected selling price? Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong