Most of the times when I ask people to start their property investment portfolio they will say “wait”. Sometime I really don’t know what they are waiting for. But can you afford to wait? Do you think next year the landlord going to sell you his property exactly same price or lower as what he expected last year? The answer is NO!!! Let me share with you one of my good friend sad story.
The Cost of Waiting
Mr. A was the real estate company staff which I knew in year 2002. We start searching for a good deal to buy and until few months ago when I met him again yet he’s still searching. 7 years!! Imagining within 7 years he is yet to find his favorite property. But the good location price in Kota Kinabalu has almost doubled since 2002. That is the cost of waiting.
How long can you wait?
Actually how many “time” in life we have to wait? For me, I always believe we only have 20 years. The most productive time in our life is from 25 – 45 years old. If you can’t capitalize these golden opportunity years, virtually you can consider yourself to be a failure. The first 10 years is the best time for us to earn, save, and stay invested.
The second period is where all your commitment started like buying a house to stay, buying a car, getting married and having kids. I don’t think you can save and invested much of your money during this second period. Sad to say most of the people I meet daily has reached second half with no investment portfolio in hand. They have 101 good reasons to convinces themselves that’s they are right 
. Virtually they only have their saving which depreciated due to inflation, EPF fund which grows not big enough to support their retirement life and current employment that doesn’t guarantee their future earning. Not only has that, their children growing up needed more expenses including education fund. This group of people will invest nothing but to wait for good deal.
Do you have the gut?
My friend, to start property investment we need to builds our guts through reading, sharing & experiencing. I always believe our gut is built throughout times. Imagining that if you play football, you can play when you are 20 years old. But can you play football when you are 60 years old? You can be golfer when you are 5 years old and continue to play until you are 80 years old.
But in most people investment portfolio, they only invest in Fixed Deposit and other fixed and secure unit trust like bond, which for me its “old man” tools to invest. It’s a “NO RISK & NO BRAIN” investment tools. But why young generation now play with all these tools even they are educated with more complicated and faster tools with highly protected investment risk like property? I also don’t know. For me, you can have all Fixed Deposit inside your portfolio when you are 90 years old. But what happen if you are only 30 years old? Do you think you can afford to save all your money in fixed deposit until you reach 55? The fact is if you don’t start diversifying your portfolio into property investment now, you will never make it as you grow older. Not only your guts getting smaller but property price also continues to go up.
When is the best time to buy properties?
Anyone know when is the best time to buy property? Actually I also don’t know. As I know, I will buy when I have the money. For me there is no perfect timing when to buy property especially when we talk about vacant land. No one know when the land will be developed and commercialized. The only thing I know is its value continues going up day by day. Do you know that Mont Kiara is once rubber plantation estate 20 years ago which might cost less than RM 0.50 per sf? But now it cost you easily RM 200 per sf. That is about 400 times @ 40,000% over your capital invested.
It’s the same thing happen to our Kelombong industrial area. Back in 1960’s one of my client intend to buy a land costing RM500 an acre @ RM 0.011 per sf but decided to call off as the whole area is swampy area. But today you need to have at least RM2 Millions @ RM50 per sf to convince the owner to sell to you!! That is 4000 times @ 400,000% returns. Remember this situation happens everyday. That is the wonders of land.
So do you still want to wait, wait and wait? Rather keep waiting to buy, why not I change the rules for you…BUY now and WAIT… I can assure you, your life will be happier than ever once you added property into your portfolio.
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Hi Wong,
You were recommended by KC Lau. I enjoyed reading your blog. I was just wondering do you invest in Land banking? If so, what is your response.
Thanks
cheers
james
James,
. Furthermore our country still got a lot of potential land to buy, so why invest in other people country? Anyway this is only my personal view. Happy Investing.
Thanks for the compliments. What land banking you refer to?You mean Walton International or EdgeWorth Property? If this is what you talk about. I can tell you, I don’t invest with them. I don’t want to betray my own country
Ck Wong
Hi CK,
I fully agree with u.
Cheers
You has style, like KC Lau. I bookmarked your blog!!
Karnie,
Happy to know you are learning something from me. Please don’t just read for fun. Take action and make of differences in your life. I always believe learning make more fun and faster through “sharing”. Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
Dear CK,
Your advice is too simplistic. Remember the old adage “Fools rush in when angels fear to thread”. I do agree with you if the message you want to send to your readers is that “timing” is important but not critical in real property investment. The problem with the majority of investor is not that they wait and wait but rather that they are “NOT READY” to invest. What I mean is that they do not have the passion, perseverance, patience, knowledge, current information and wisdom to go into property investment. Only a handful of real estate investor really make good money. By sharing anecdotal stories of great success here and there does not mean we can achieve the same success. It can be suicidal. By saying ” I will be a millionaire by 38 years old” and setting that as our goal means we will attain it. I dare say 99% of such people do not meet their targets and are foolish, unrealistic and mad. Why do people still have these crazy notion that the world revolves around them and owe them a million. Hard work, honesty, integrity, contentment, happiness are more important than any of these lofty focal points of life. Enjoy life, make some money, have a good conscience, take care of your self and your family is paramount and primary goal of life if God is not already number one. CHEERS
Old Investor,
Happy Investing.
They simply will not be ready and by the time they ready they might reach 50 years old. That why our mind must be “right” at all time. If not too bad. I’m enjoying life now..life is too good if your asset is growing day by day and you know it will outperform your own living style.
You cannot Grow Land.. CK Wong & KH Wong
Dear CK,
I enjoyed reading your articles and mostly agreed with your points. However, with regard to buying properties vs fixed deposit or unit trusts I beg to differ a little bit. Old Investor has a point up there as through experiences not everyone buying properties would end up making more money. In fact those who are overloaded would end up giving back their properties to banks, go through forced selling and making huge losses. Some even go bankrupt. One of my neighbours bought a million dollars house, after failing to get rental, theu ended up selling the house – fortunately just break even. The place I bought where my family is staying now has the same market value as when we bought it 6 years ago, it is supposed to be a high end area. Of course there are juicy stories about buying properties in up market such as Mont Kiara, Taman Tun, Bangsar, that is if you bought them 10 or 15 years ago; they seem to have jumped up in prices. In the same argument I regret that I didn’t buy a Semi-D at Tropicana Resort in 1999 due to its leasehold; it was then only RM800k, now it stands around RM1.4 and above, well that’s a lot ya.
Your statement on older guys stuck with FD, cash or unit trustsbut and not properties, well lets look at it. Lets say in 1999, I have cash of RM800k, I deposited it in something like ASM which gave about 7% interest and let say it’s having compounded interest, then by now that cash would have been = RM1,573,721.086. I think that is not so bad. Lets say now I decided to buy that same house using the same cash, can I?
You might say if I bought that house in 1999, I would be using loan thus using other people money, instead of using my own (cash) – that’s good, that what Robert Kiyosaki would advise. But it is really? How much are you actually paying for the property if you add on bank interest? A lot more, right?
Lets look at it in another way. Supposing I deposited my RM800k in the ASM in 1999, earning 7% interest i.e. about RM 4666.666667 per month. Let say I still loan from the bank but use thsi RM4666.666667 to pay for the monthly loan installment such that in the end, not only I have a house which has esclated in value, I would also still keep my RM800k cash (inflation or not). What do you think?
Thus if you considered the tendency of over stretching, cannot get rental, slow price appreciation, properties can be quite scary. Robert Kiyosaki made his money by buying an apartment building which price went up a few years later. He was lucky. There are also people who buy for old properties, rebuild or renovate and sell again. One of my brother in laws in Spore had made fortune by doing just that. But my sister in law has just sold a house for S$1.2 million a month ago as she could not get rental and couldn’t afford the loan of 6k per month. Luckily she didn’t lose money. Then again imagine the current properties in USA. It’s the buyer market and you don’t have to be a Robert Kiyosaki to see that if you have money, you should buy those auctioned houses. Too bad this is Malaysia where property prices don’t appreciate in value as much as else where. If they do, consider yourslef lucky.
So for myself and people like Old Investor, I think we will see it with some rationales. If we could afford to it would be a little bit here and a little bit there. Ideally to keep a million dollars in unit trust, buy a couple of condos or a house but never think that properties would be 100% answer to investment.
Anyway nice chatting with you – would appreciate your response as it’s nice to see how other people look at things.
Cheers
Ruijugah,
Nice learning from you also here. Life is all about sharing. My principles in investing is a bit different from the rest.Maybe I read too many Robert Kiyosaki books. So far my portoflio ratio is:
Vacant Land: Condo/Apartments:Stock: Cash
70:20:8:2
I always believe I have time to wait for my land to grow. When I started buying land using cash 5 years ago, I already expected I might not use the money in the next 10-15 yrs. I also keep buying rental property to increase my monthly cashflow in the future while building up my equity. On other hand I try to gain some luck from market (as I love stock so much).
For me investment in property doesnt mean you need to invest in expensive condo or house. I always believe in “small money make big money”. So far I never purchase any property (condo/apartment) above RM250K. I believe the higher you go the higher the risk and the lower the return going to be. So that where your family member and friend learn the lesson.
On unit trust, I have stop investing since 2008 as I believe I can do same job like what Fund Manager doing. Simple just read their prospectus summary every year and follow which counter they buy. I bet you will notice 90% of the counter is same..few to name is:
1. BJ TOTO
2. Genting
3. Genting Malaysia
4. BAT
5. Maybank
6. AMMB
7. TM
8. Axiata
9. IOI/ KLK
10. few more..
Am I correct? So why depend on Fund Manager? For us to gain back the 5% (the services Charge) I think Index need to go up 50 point!! Too costly for me..Its not my cup of tea anyway..maybe after I’m retired I will consider…Further more its seem like you are bumiputra…you are very lucky. If i got chance to invest in ASM I will do so. But too bad I’m Chinese
Happy Investing.
You cannot Grow Land.. CK Wong & KH Wong
CK, thanks for responding. Your portfolio is pretty much like Kiyosaki’s (I read 2 of his books). After reading your story, it’s kinda re-inforce what I have read. Buying cheaper condo/apt for investment seem like a good advice, like buying 4×25ok apt compare to buy 1×1m penthouse. I am not on stock at all now – I lost a lot of money many years ago! But may be i am wiser now – your counters are in my list too but just monitoring. About the bumi thingy, well what can I tell you? Frankly speaking not much to it apart from able to buy ASM or ASB which have got limits. So if you have more than 200k, you have to invest elsewhere. ASM or AS1M are also open to non bumi. The 5% discount for buying house for Bumi is all craps as the allocated units are the ones which nobody want to buy e.g. no good view, odd shape, lousy feng sui, etc. which are bad investment. Regards.
Hi,
Please designed a perfect “portfolio” for yourself. As time goes by, your portfolio will be your main income generator for you. Try create a “Recession proof” portfolio. I bet you will sleep better and happier than ever..knowing your portfolio growing day by day. As my dad always say “nothing as solid as ground”..Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
Dear CK,
I don,t think Kiyosaki’s portfolia similar to yours as his is pretty much on rental properties otherwise his much talk about Cashflow won work. His emphasis not so much on networth but CASHFLOW !. He doesn’t buy much Land but you has got a nice 70% on vacant land. Which every young person like you should do. Because time is what you have !
There are more adevantages than just the 5 % discount, ASB,AS…. for being a BUMI. We have access to the Malay Reserve land in west Malaysia, NT land in Sabah and the Customery right land in Sarawak( with lower cukai tanah as compare to CL), University intake quota,Contracts, licenses and my list can go on !
And then we have the NEP after the ‘May 13′ . It was a very good policy to re-adjust the wealth of the nation of the different racial groups . I just wonder If the NEP has serve it’s purpose at the end . A lot of us have came to realise that it may not have been as reflected in the last general election. But 1 thing for sure if I am a bumi and well connected political ,,,, the rest is i leave it to your imagination.
Cheers
Azlan
HI Azlan,
Its not my cup of tea to talking about politics here. As I always say, better stay focus and take care of our own pocket money or wealth rather than spending time to analysis why Bumiputra is given so many special rights. I believe we can do much better compare to them even though we are not given these goodies. Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
Dear Ck,
I am not trying to drag your blog into pollitics don,t miis my point. In just merely stating the facts. I didn’t ask why we bumi were given so much special rights ! Did I??? I am just echoing on what RJ has shared about what BUMI is getting.
That’s why I left my answer or opinion open ended for others to think about it (e.g I just wonder If the NEP has serve it’s purpose at the end ‘ and ‘the rest is i leave it to your imagination’ ) I didn’t even say who is and who is not doing better !
While we are focusing on building our wealth we can not run away from being affected by the policies changed by politicians for common good. Who did away the PRGT if not for the politician who debated it in parliment ? Who reduced the satmp duty ? etc.
Thanks
Azlan