AVOID THREE EXPENSIVE ERRORS IN PROPERTY INVESTMENT

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!

QUESTION:
Dear Azizi,
I’m currently using the sample Tenancy Agreement from your book. My tenant and I signed the Tenancy Agreement. But I did not get it to be stamped. (Mine is a low cost flat and the tenant was reluctant to pay for the stamping cost.)
I wonder if it will be of any good in the court of law should I have any problem with my Tenant?
ANSWER:
Yes and no!
Firstly, an agreement does NOT have to be stamped to make it legal. In fact, stamping it does not make it more or less legal. An agreement that is signed by both parties are legal and binding.
Why do people stamp agreements then?
The answer is because only an agreement that has been stamped can be admitted to court. No stamping, no admission.
In your case, if you need to go to court later on, all you need to do is to have the agreement stamped at that time. Of course, you will be charged a higher fee for the late stamping.
The sad reality is that a tenant that cannot afford to pay the stamping fee will very likely be unable to afford the rent payment as well!

QUESTION:
Assalamualaikum En. Azizi Ali dan Pihak Millionairesplanet,
Pertama sekali, saya ingin mengucapkan jutaan terima kasih kerana banyak memberi ilmu-ilmu kewangan kepada saya melalui buku-buku dan laporan-laporan yang diterbitkan oleh pihak Tuan. Bagi saya yang baru sahaja bekerja selepas tamat pengajian, ilmu kewangan adalah satu ilmu yang wajib saya ketahui untuk mengurus dan mengembangkan kewangan saya. Sekali lagi, saya ucapkan jutaan TERIMA KASIH. Untuk pengetahuan pihak Tuan juga, saya kerap membeli buku-buku dan laporan secara online dari Millionairesplanet, dan setakat ini, servis yang diberikan tidak mengecewakan. TAHNIAH!!
Kedua, jika diizinkan, saya ingin bertanya dan mendapatkan tips dari En Azizi Ali mengenai pelaburan dalam BSKL. Saya tahu idea dan tips dari Tuan ibarat emas yang tidak ternilai dan saya amat-amat menghargainya. Persoalan saya:
1. Sekiranya saya ingin membuat pelaburan, apakah yang harus diberi keutamaan selain dari figures yang diperolehi dari akhbar?
2. Masih diterima pakai kah istilah, “Buy when price is low, sell it when it high”?
3. Apakah perbezaannya jika saya melabur di dalam First Board atau di Second Board? Mana yang lagi menguntungkan dan mencabar?
4. Bolehkah Tuan memberikan contoh buku-buku atau rujukan yang boleh saya perolehi?
Saya mengucapkan jutaan terima kasih di atas jawapan serta tips yang akan diberikan. Saya juga mengharapkan, jika berpeluang, saya ingin membaca sama ada buku atau laporan dari tulisan En. Azizi Ali mengenai pelaburan saham di Malaysia.
ANSWER:
1. Baca sebanyak yang anda boleh. Buku-buku tentang pelaburan saham dan unit amanah adalah mandatori. Baca majalah-majalah dan sertai juga seminar-seminar kewangan.
2. Sudah tentu. Tetapi anda perlu tahu bilakah price is low dan bilakah price is high.
3. Kedua-duanya boleh membawa keuntungan, jika ada tahu apa yang anda lakukan. It is not the investment that is risky, it is the investor.
4. Diantara buku-buku yang boleh anda baca ialah Jutawan Saham dan Panduan Pelaburan Unit Amanah.

QUESTION:
I’m so proud of the information about how to be a millionaire tips by Mr. Azizi Ali. Thanks for the info. I have a questions here. Hopefully the answer would be usefull tips as a first journey to be a millionaire.

Questions for millionaresplanet.

Question 1
My monthly net income is only under RM500 per month. What strategy for me to make my balance income as an investment.

Question 2
How can i make myself as a millionaire with that income.
ANSWER:
Your current income is insufficient to become a millionaire. The first answer is that you must find a new job that pays a higher salary. You may not believe me but you should be able to do this without too much difficulty. Often time, all you need to do is to find a new employer! The second and more important answer is that you must educate yourself so that you become more marketable so you can earn even more.
At the same time, you must also educate yourself on financial matters because making more money by itself does not help. You must be good at both – making more money and growing that money – if you want to become a millionaire.

QUESTION:
Assalamualaikum En Azizi,
Saya ingin bertanya kepada En Azizi apakah saya akan digelar brankrup-C?
Terlebih dahulu biar saya terangkan keadaan yang sebenarnya. Saya seorang ibu tunggal yang mempunyai 3 orang anak, dulu saya adalah seorang Unit Trust Consultant dan taklah berjaya sangat mungkin kerana bekas suami saya terlalu cemburu bila saya ada appointment dgn kaum lelaki. Setelah berpisah lebih kurang 2 tahun yang lalu banyak masaalah dan rintangan yang saya lalui seperti anak bongsu saya yang berumur 2 tahun dilahirkan tak cukup bulan dan dibedah jantungnya dan keadaannya yang selalu keluar masuk hospital membuatkan saya tak dapat bekerja tetap.
Akhirnya lebih kurang 2 bln ini saya baru menceburi bidang Insurance Agent dan Insyallah ada rezeki nampaknya. Tapi yang saya risaukan sekarang ialah apartment di Damansara Damai saya baru-baru ini telah dilelong kerana saya tak mampu membayarnya? Saya telah cuba menjual dan menyewakannya sebelum ini, tetapi tak berjaya jua. Adakah saya akan diketagorikan Bankrup? Apa yang perlu saya buat sekarang?
Saya berharap agar En Azizi dapat memberikan pendapat yang berkesan bagi saya.
Sekian didahului dengan ribuan terima kasih.
Yang benar,
Ibu tunggal yang malang
ANSWER:
Apa yang dimaksudkan dengan bankrap ialah apabila mahkamah menjatuhkan hukuman tersebut ke atas seorang individu (atau syarikat) yang tidak berupaya membayar hutangnya. Selalunya, ini berlaku apabila pihak yang memberi hutang membawa kes itu ke mahkamah dan mahkamah kemudiannya menjatuhkan hukuman tersebut. Apabila seorang itu bankrap, pengurusan kewangannya akan diuruskan oleh seorang pentadbir yang akan mengagihkan wang yang diterima oleh sibankrap sehinggalah semua hutang-hutangnya diselesaikan.
Jadi buat masa sekarang, anda belum bankrap.
Dalam masa yang sama, puan perlu berkerja lebih keras dan lebih bijak lagi untuk memperbaiki keadaan kewangan diri dan keluarga. Ianya tidak senang, tetapi puan perlu terus berusaha. Jangan menyerah kalah, kerana esok masih ada mentari.
QUESTION:
Dear Azizi
Firstly, thanks for keeping me in your mailing list. I have bought two of your books and of course, I liked them very much. I really hoped that you would have a Consultancy Firm in Johor Bahru.
I am 32 and and earning a reasonable gross salary of $3K per month + variable income. My car loan installment is about 37% of my salary. The problem is that I have an overdraft of $12,000 at 13% interest per annum. I have the following options:
1. Use my whole life insurance cash value loan facility at 8% p.a. to pay up the entire overdraft;or
2. Refinance my current car HP at 3.75% p.a. (balance outstanding $30,300) to a new HP at 4.5% for a 6 years term (new amount $43,000) and use the difference amount of $12,700 to pay for my outstanding overdraft of $12,000;or
3. Any recommendation from you?
Your advice is critical to my financial survival. Appreciate your expert comments.
Thanks and best regards

ANSWER:
1. You have at least 2 problems: one is the OD and two is the car loan (you bought a car that is too expensive).
2. Yes, settle off the OD because the interest rate is killing you.
3. Sell off the car and buy a cheaper car.
4. Don’t take another OD or loan anytime soon.
5. Read Millionaires are from a different Planet.

QUESTION:
Hi,
Pls advise the basic planning for personal budget. My big problem now is because my expense is more than my monthly pay! My saving is getting lesser and sometimes especially during hari raya), it will become almost “zero”.
I did plan for monthly budget but I do not know the format on how to plan for a long term (yearly plan/5 years plan/10 years plan). My family is getting bigger and finally I have to spent my money more than what I got monthly. I received 2K salary. I started to realize about my poor budget planning since I can’t afford to send my son to the kindergarten. I’m still dissapointed on my poor planning!
The worst thing is my hubby do not want to have the budget planning together eventhough his income is only 1.5K/month.
I’m interested to learn but I can’t afford to attend your classes. Not even an investment, I do not know how to manage the flow of the money. As per my friends advise, I did some savings for the long term basis:
Item Duration RM Effective year Monthly payment
Insurance 1 20 years 20K since 1994 RM150
Saham ASB 25 years 30K since 2003 RM230
Insurance 2 0 years 88/mthly since Aug 2004 RM88
Monthly payment RM
1. Baby sitter 400
2. Housing Loan 670
3. House Tel Bil +/- 100 (other bills paid by my spouse)
4. Car petrol/mthly +/- 100 (Home - babysitter-work) The car paid by my spouse
5. Credit Card +/-50 (urgent requirement only)
Sometimes, I don’t even have a money to spend for my parents!
Pls help should you can format me the basic of our personal budget planning.
Appreciate your response.
ANSWER:
Firstly, you need to have new answers because what you are doing now is not working. To continue doing the same things will bring you the same results, which can only end in disaster. You need to do something, and do it FAST.
Next, the information you gave is limited so I cannot give the exact answers. However, the following may help you.
1. Buy, read and apply Millionaires are from a different Planet. If you cannot even spare RM39.90, then only God can help you.
2. Cancel Insurance 1 and use the cash value as a Reserve Fund. This will also give you an additional RM150 a month.
3. If you can settle the ASB loan, do so. This will give you an extra RM230 a month.
4. Don’t take any loans or buy anything expensive anytime soon.
5. Don’t make any investments (because you are not ready for it yet).
6. Create Additional Sources of Income. Read The Millionaire in Me on how to do this.
7. Sit down with your husband and discuss this ASAP. Both of you must address the situation quickly. Otherwise, it could end up tragically. A significant number of divorces is due to financial problems.

QUESTION:
Dear Mr Azizi Ali,
Can you give your opinion whether buying a freehold service apartment is a good investment. The developer has an investment plan that have a compulsory lease back for 10 years.
Example of Profit return
A person has purchased one unit at rm250,000, will enjoys:
1. 10% dp (save cash flow, offset by 10% GRS-Guarantee return scheme
= RM25,000
2. 9 years CRA - commercial return agreement. (rm250,000 x 6% x 9 years
= RM135,000
3. Furniture (fully rewarded by end of 10 years contract)
in average = RM30,000
4. Appreciation (forecast 5% growth per year at PJ prime location: rm250,000 x 5% x 10years) = RM125,000
So total return of investment = RM315,000 (126% of purchase price).
ANSWER:
1. The figures do look good, don’t they? BUT
2. How sure are you that the developer will pay you the CRA?
3. If they don’t pay (and there are many examples of this already), you can only take them to court, which equals more outflow of money.
4. The furniture will be worth close to zero after 10 years!
5. How sure are you that the property will grow by 5% for the next 10 years?
In short, why not buy a property without all these ‘promises’? That way, you do not have to be dependant on any company to make money. Only your skills, knowledge and a little bit of luck.
Copyright © Azizi Ali 2010

“If you want to earn more than you get,
you need to be worth more than you are paid.”
* Napoleon Hill *

QUESTION 1:
I was very impressive about the way and the approach implemented my Mr Azizi to reach a better life. Until now I don’t know what to do and where to start. I ‘m being blackened. Honestly I can say, to do investments in properties right now is far from my affordment. “I have not enough bricks to build the wall”.
Is that other way than properties I can start so?
If possible, I would like to met Mr. Azizi in person just to chit chat plainly about how to “turn the keys before accelerating and moving far”. By talk face to face with Mr Azizi we can express much ideas than gathering in group, it also avoid any interference from others.
I hope Mr. Azizi could spend a short time just for a few minutes for me to learn how to “crawling before running”.
If so, just reply me or call me at 019-xxx.
ANSWER:
If I meet all the people that wants to have ‘short chat’ or teh tarik with me, I’ll not have time to do anything else!
As much as I want to help, the other party must also help themselves. Actually, many of the questions above are already answered in my books. So, actually, the first answer is to read my books. Yes, I make a little bit of money when you buy my books but considering the information inside them can help you make or save millions of ringgit, the cost is peanuts.
Two, if you are really really really really serious about wanting to improve yourself financially, then come and join my Inner Circle coaching program. You will see a huge difference in your financial situation.
By the way, just as you cannot buy a Mercedes or BMW on the cheap, you cannot expect to meet the best financial coach in the country for teh tarik!
Good try though!
* HOT TIP *
Read Millionaire are from a different Planet 3rd Edition
by Azizi Ali