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1. FEATURE ARTICLE: More FAQs
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Since it proved to be a HOT HOT thing, I’m answering more questions this month. As usual again, the questions are presented the way they came in, broken English, grammar errors and all. Enjoy!

QUE: Hello Mr Azizi Ali,

Assalamulaikum, first of all, i’ve been reading some of
your books and telling you the truth, it really gives me a
lot of knowledge regarding financial management esp. a
person like me who is from engineering background which has
a little knowledge in that area. Thanks once again.

I have a question for you regarding the 0% installment
which has been offered by some banks now a days when using
their master or visa cards. Some banks offers 6, 12, 18 or
24 months 0% installment. What’s the catch here?

is there any pros and cons for me and the banks?

Your help is very much appreciated. Thank you indeed.

ANS:

1. Yes, this easy payment scheme or zero-interest scheme is
certainly useful. Why? It’s because the credit card company
is not charging us interest on the loan, which is always a
good thing.

2. There is no catch as far as the selling and the credit
card companies are concerned. The selling company would
have build in their cost already into the sale price while
the credit card company would also gain from the sale
(commission charged to the selling company).

3. The only thing is that it may trap us to buy things we
don’t need or buy more than what we can actually afford
(as the payments are spread out).

4. But if you are disciplined enough, the the zero-interest
scheme can be of benefit to you.

QUE: Dear En. Azizi,

I was reading the December E-zine where you briefly touched
on stamping of rental agreement. My questions are:

1. Is stamping necessary?
2. What is the implication of not stamping?
3. Is it a normal practice where tenant have to pay the
stamping cost?

Looking forward to receiving your answers. Thanks.

ANS:

1.Stamping documents is NOT a must. Both parties can just
sign it and it becomes a valid document.

2. So why do we stamp agreements then? The answer is because
only stamped documents are admissible in court. In other
words, if the document is not stamped, it cannot be used in
court - which perhaps beat the purpose of having the
agreement in the first place!

3. Having stated that, the main purpose of agreements is to
spell out the responsibilities of each party so there is
little, or even better, no confusion on the terms and what
is agreed upon.

4. If you have to go to court to enforce it, then you would
have already lost because of the time, effort and cost
involved.

5. This is why an agreement is only as good as the parties
signing them. As I have always said, parties can sign
agreements and even guarantees, but how sure are you that
they can or will honor the agreement? A homeless guy can
sign an agreement guaranteeing you a million ringgit but
it is obvious that he will not be able to honor it, which
makes the agreement worthless.

6. Yes, the tenant pays for the agreement, which is just a
nominal sum anyway. If he is not willing to pay, then look
for another tenant! See point 5 above.

QUE: Mohon penjelasan, adakah wajar saya gunakan pinjaman
peribadi pada kadar 5.7% setahun untuk dilaburkan dalam
unit trust yang mampu beri pulangan 15% setahun?

Terima kasih.

QUE: Assalamualaikum…

Di sini saya ingin meminta pandangan dari saudara tentang
pengurusan kewangan.

Saya bercadang untuk membeli sebidang tanah di Kelantan
dengan harga yang ditawarkan adalah RM50,000. Di sini saya
ada beberapa pilihan untuk membayar harga tersebut:

1. Membuat pinjaman sepenuhnya RM50,000. dengan jumlah
tersebut, adakah mudah dengan membuat pembiayaan peribadi
dan kadar yang ditawarkan adalah dalam lingkungan 5.60% -
5.95% setahun.

2. Membayar dengan simpanan saya dan membuat pinjaman
sedikit, contohnya mengeluarkan simpanan RM25,000 dan
membuat pinjaman RM25,000.

3. Mengeluarkan dari simpanan ASB saya untuk membayar
keseluruhan harga tanah.

Berdasarkan pilihan di atas, yang manakah yang terbaik yang
saudara rasa untuk saya membuat pembayaran tanah tersebut.
Saya sekarang ini keliru yang mana pilihan terbaik yang
menguntungkan saya.

Sekian, terima kasih.

ANS: Kita hanya meminjam wang apabila kita boleh menjana
lebih wang dengan wang pinjaman tersebut, dan pulangannya
daripada pelaburan yang dibuat itu melebihi kos pinjaman.
Sebagai contoh; kalau pulangannya 15% dan faedah pinjaman
hanya 7%, ini bermakna kita patut membuat pinjaman tersebut.
Kalau pulangannya 10% tetapi faedah pinjaman 12%, maka
jangan pinjam.

Satu contohnya ialah bila kita meminjam wang untuk membeli
hartanah yang boleh di sewa atau dijual balik dengan
keuntungan. Lagi satu contoh ialah dimana kita meminjam
wang untuk menyambung pelajaran ke taraf yang lebih tinggi,
i.e. mendapatkan MBA atau PhD. Kenapa? Sebab kelulusan
tambahan itu akan membolehkan kita menjana lebih wang di
kemudian hari.

Dalam contoh di atas, faedahnya 5.7% setahun manakala
pulangannya 15%. Jadi kita patut membuat pinjaman tersebut.

In theory.

In real life, it is very, very difficult for any unit trust
fund to give a 15% yearly return on a consistent basis.
Kalau setahun dua memang boleh, tetapi untuk lima tahun dan
lebih - almost impossible. Malah ASB yang terunggul pun
hanya memberikan pulangan dalam 10 - 12% setahun. And that
is the best in Malaysia!

Semua ini bermakna anda patut berhati-hati sebelum membuat
apa-apa pelaburan, terutamanya apabila hendak meminjam wang
untuk membuat pelaburan tersebut. (Untuk tips yang lebih
komprehensif tentang pelaburan-pelaburan yang menguntungkan
di Malaysia, sila baca Handbook terbaru saya “Ganda Wang
Anda” atau “Growing Your Money”.)

Ini juga bermakna yang kita tidak harus meminjam wang untuk
membeli barangan yang tidak memberikan pulangan wang dan
sudah tentunya barangan yang turun nilainya.
Contoh: membeli kereta, perabut rumah, komputer, dsb.

Sudah tentu semua barangan tersebut adalah penting, tetapi
belinya dengan tunai, jangan pinjam duit. Kalau tak cukup
duit, buat apa yang saya buat - duduk di rumah
senyap-senyap! Simpan duit dulu, dan belinya bila wang
simpanan itu cukup kelak.

QUE: Dear Dr Azizi,

I had attended one of your seminars many years ago. As I
changed jobs and have been overseas for a while I have not
updated my email to you and guess your ezine material has
been sent to my old email address.

I remembered in your seminar that you mentioned it was a
tax advantage to own 4 properties and put them under a
company name to obtain the tax advantages. At that time
some years back I didn’t realise that it was applicable and
didn’t take much notice of it and didn’t follow through as
to what those advantages were.

Today I am lucky to own 3 properties and was thinking that
it may be worthwhile to form a company and acquire the
forth property?

If I transfer the properties to a company would I incur
stamp duty on all of them?

2 of the 3 properties that I have are currently under
financing and with no strata title out yet.

Thank you and regards.

ANS:

1. Firstly, the properties must be owned by a company and
not by an individual to qualify for the tax advantages.

2. Next, the company must own a minimum of 3 or more lots
in a shopping complex or 2 or more shop-houses or 4 or more
residential properties or a combination of any four of the
above to qualify.

3. The advantage here is the being able to treat the rental
income as a business income.

4. As to why we want the rental income to be treated as a
business income, it is because we can claim for capital
allowance (please read article_045.htm on my website for a
detailed explanation on capital allowance).

5. Also, if the company incur a loss on the above, the loss
can be deducted from the income in the subsequent year.

6. Having stated that, one should only consider a company
if one is super serious about the rental business and wants
to have more than 5. This is because of the added cost
involved in forming a company and lower financing margins
from the banks, among other things.

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2. QUOTE OF THE MONTH
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“Money is the root of all excellence.”

* Louis E. Bejarano *

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3. YOUR QUESTION ANSWERED
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Q: I’m unable to manage my finance. I always dream of
becoming a successful businessman and millionaire like Tan
Sri Syed Mokhtar and yourself. How do I start? I’ve bought
your books. I love reading them but I do not practice the
ideas. Please help.

A: While I can share the tools, techniques and strategies
of becoming a millionaire, you are the one that has to
carry them out. If you are not able or not willing, then
the answer is that you will remain where you are.
Millionaires will remain on a different planet for you.
In other words, you have to discipline yourself in order to
achieve your goals and dreams.