Wednesday, July 18, 2012

Keyman Insurance & Income Tax


Are you buying Key-Man Insurance for your business?


Two common questions?
1) Premium can claim tax (deductible for income tax)?
2) Insurance Proceeds need to pay tax (taxable receipt)?


The answer is, it DEPENDS.


The taxability of the insurance proceeds depends on whether it is a Term Life policy, Accident policy, Whole Life policy or an Endowment policy. If it is a Term Life or an Accident policy, the proceeds receivable will be taxable on the employer or the Company since the Insurance Premiums are allowable for tax deduction.


Conversely, where it is a whole life or an endownment policy, the proceeds available will be considered to be a capital receipt and not taxable on the employer or the company since the insurance premiums are not allowable for tax deduction.


In short,


Whole Life / Endowment => Premium NOT Deductible => Proceeds NOT Taxable


Term Life / Accident => Premium Deductible => Proceeds Taxable


Source / Reference:
Publlic Ruling No 2/ 2003 issued by Director General of Income Tax Department (aka LHDN)

Sunday, July 15, 2012

Risk-Free Rate AND Investment in Equities

What is Risk-Free Rate ("RFR")?


In Malaysia, RFR usually refers to Fixed Deposit ("FD") Rate, currently about 3.00% p.a.


However, FD is not totally Risk Free if you place more than RM250,000 with a bank (PIDM-Deposit Insurance), thus making anything above RM250,000 not risk-free. If you have RM2 million, you need to place RM250,000 with 8 banks, in order to enjoy "risk-free" status.


Well, what is RFR to do with Investment?


Every Investment involves certain degree of RISK. Therefore, it is only logical to invest with the investment generate above and beyond the RFR.


The higher the potential risk, the higher the ROI (Return on Investment) must be as compared to RFR.


I would prefer to invest in a company with Dividend Yield of at least 6% (with high certainty on the consistency) as compared to a company where no dividend or low dividend yield.


Investment in Gold gives you 0% yield, thus dangerous as it solely depends on the 'hope' that the gold price will goes up. No yield, you can not enjoy the benefit of "compound interest" - the 8th Wonder by Albert Einstein.


Investment in Property may also gives you much lower than RFR (as property price is at all time high now) and therefore one may have to seriously consider the asset allocation (i.e. how to allocate our limited resources effectively).


Example: If a condominium unit generate a 3% rental yield (Gross Rental / Market Value), then the owner should consider to dispose it as.........


1. Property price may not always up (supply vs demand)
2. Rental Yield of 3% is gross, after deducting for expenses and income tax, you may ended up with only 2% or lesser.
3. There is always a risk where the property price may go down due to reasons beyond our control.
4. Likely to continue appreciate??



Friday, July 13, 2012

5 common ways to fund education for your child



Common questions and my opinions

When should I start the education fund?
Now. As early as you can. The longer period you have, the higher fund size will be available or the lower contribution you need to save to achieve the same desired fund size as compared to if you start late.

How much is the education fund is required?
It depends on various factors. Type of course, where to attend, how long it takes etc. I would say at least in between RM100,000 in 2020 (10 years later) or RM200,000 in 2030 (20 years later)......

How much I need to save monthly?
It is highly depends on your situation. You may start with RM100 per month or RM2,000 per month...... it depends.......you may need to discuss it with your financial planner (or your spouse). Click here if you need the service of a planner.

If you save RM500 into FD per month and earn 3.0%p.a. for next 15 years, you will have about RM113,770
Therefore, it looks like RM500 per month is not a big sum for a education fund.


Where should I put my money in to fund my child's education?
That is why I table out the 5 common ways for your consideration. I prefer to use combination of at least 2 methods and insurance is the must use method due to the nature of protection and high safety of principal with reasonable rate of return (as compared to FD and PTPTN).


Lets compare the pros and cons for first 3 items listed above. Item 4 and 5 are in different category, may be discussed separately in future post.





Cons of the methods
Save in FD and Save with PTPN doesn't give you the protection against the potential major events (36 critical illnesses, total disability and death) that interrupt yours ability to save for next 5, 10 or 18 years.

Save with insurance company requires discipline and long-term commitment as the early termination may be costly (i.e. surrender value < total payment made). It is commonly known as a force-saving method for people to save money for some serious purposes like education and retirement. We called it Serious Money Management.

Retirement Age Going Up

Generally, the following are true and fact

  • Governments are finding it more difficult to pay for pensions as life expectancy rises
  • Governments may likely further increase retirement age i.e. longer working life
So who should look after your financial health at retirement?

The most painful realities about retirement is that your money runs out.

Looking after your financial well-being is no longer a choice!

Plan now, don't just retire, retire rich.


Inflation

MALAYSIA (From 1973 to 2010)

GDP Growth 9.54% p.a. (Source: WorldBank Data)

However,

M3 (Money Supply) Growth 14.08% (Source: Bank Negara Malaysia)

What does it means?

More money was created than the actual production of goods and services during 1973 to 2010 thus creating INFLATION, the different of over 5% over such a long period of 37 years.



SINGAPORE (From 1982 to 2010)

GDP 11.05% p.a. vs M3 9.66% p.a.

No wonder now S$1 = RM2.45


From 1973 to 2010 at 14.08%, it means 130 times.

Value Investing

Most people know, Buy Low Sell High but how to achieve?


First Rule #

Buy only when there is big discount, i.e. Price much lower than the Value.

Second Rule #

Sell only when the Price is much higher than the Value.

Motor Insurance - What if I under Insured?

If your Honda Civic is worth RM80,000 on the market (i.e. you can easily sell to anyone at this price) but in order to save money, you insured for only RM50,000 for motor insurance purposes.

What will happen if you have a claim?

The following extracted from Policy (Standard Clause):

If your motor vehicle at the time of any loss or damage (be it partial/total loss) insured against be of greater value than the insured value stated in the policy, you shall be considered as being your own insurer for the difference and shall bear a rateable proportion of the loss accordingly. However, this clause shall not apply unless the market value at the time of the loss exceeds the insured value by 10%. The market value of a vehicle would be determined in accordance to Endorsement 99 on "Indemnity In The Event of Total Loss Clause".

Basically it means you can not claim FULL in case of a total loss, instead of getting back RM50,000 you may only get back RM31,250 (RM50,000 x RM50,000 / RM80,000).

Is it a risk you willing to take in order to save on few hundred ringgit?

Thursday, July 12, 2012

Mortgage 101 (FAQ) - Independent Mortgage Consultant


FAQs

Q1. How much it costs me to use your service?
A1. Nothing. We get paid from bank (outsourcing marketing fee). 

       Instead, we help you to save time and money and give you your best-interest.

Q2. How much I can withdraw from my EPF saving?
A2. Click here or contact us

       In a nut shell, you can withdraw all balance in account 2 or 10% of the purchase price, 
       whichever is lower.

Q3. How much I can borrow (80% or 90% or more)?
A3. It depends. Type of property. Valuation of the property by panel valuer of the bank. 

       Your age. Bank's policy from time to time. Contact us for consultation.

Q4. What are the documents required for loan application?
A4. Click here.
  Do you have any questions for us?


  Contact us.
  

Mortgage Protection

Mortgage Protection = An insurance policy that will repay your mortgage in the event of your death, 
disability or some incapacitating disease. 
All of us want to protect our asset, right?

I believe many have heard of MRTA (Mortgage Reducing Term Assurance) when they get a mortgage 
for property.MLTA (Mortgage Level Term Assurance) is not quite new but gaining popularity over the 
past few years.

What are the REAL benefits of 
MLTA ?

1. MRTA is an traditional product - Designed long long time ago with no flexibility and mainly to ensure
 the lender (i.e. the Bank) will get paid first.

2. 
MLTA provide more than one feature - Protection plus accumulation of cash value.

3. 
MLTA 's cash value is guaranteed* - therefore you will have total peace of mind knowing your family 
as well as property are in good hand when bad thing happened.

4. 
MLTA pays direct to you or your nominee - you or your nominee has control over the situation. MRTA
 pays direct to bank, not a choice for you. Your spouse or other survivors might be better off 
continuing to pay the loan -- assuming that's possible -- and putting insurance proceeds to other purposes.

5. MLTA is transferable in case you sell your house and buying another bigger one in 5 or 10 years later.

6. 
MLTA ensure your insurability (that is mean insurance company want to deal with you). Can you 
guarantee 10 years later your health condition is as good as now? You may want to buy but insurance
company may not want to sell because of health condition turns bad.

7. 
MLTA ensure you lock-in the low-rate now. If you buy MRTA and need another 10 years later, 
guaranteed it is much more expensive.

8. 
MLTA comes with flexibilities to package other benefits into a plan e.g. special benefits for maternity and women illness or Personal Accident or even Hospitalisation Benefits etc.


Illustration:
Scenario AMr. Dell has no 
MLTA but bought MRTA for his mortgage for his home.

He suffers TPD in year 4. Loss his ability to generate income, whole family in financial difficulty.

Since he can't serve the mortgage installment, he must claim the MRTA to cover the outstanding loan. 
Bank will gets the compensation from insurance company. Mr. Dell get his property for free, so to speak.

But, he has no other source of fund for his family (unless he bought some life insurance other than 
this MRTA).

Scenario B
Same as Scenario A, except that during the 4 years, BLR increased and therefore there is a shortfall
between the compensation from insurance company and the outstanding loan amount. Mr. Dell have to 
settle the different else the house is NEVER his. How to settle when one is already in financial difficulty?

Scenario C
Mr. Dell bought 
MLTA instead of MRTA because he believe in the new concept.
When TPD strikes, the compensation is more than outstanding loan by RM20,000

He and his family has the choice to:
1. Continue the installment with the compensation received from insurance company; or
2. Settle the whole loan and get the extra RM20,000 to cover other expenses.

Do you want to have the choices in your hand (instead of in the Bank's discretion)?
[never come across any bank puts borrower's interest in front of them, if you ever found one, let me know]

* depends the plan you sign up for.

Why use MSolutions Advisory's services?

We provide you solutions (Time, Money and Information)
  • We represent you, not any particular bank.
  • We can help you on multiple submission to different bank.
  • We provide you advice at your best-interest
  • You don't have to waste your daily lunch hour or take 1/2 day leave just to meet the bankers.
  • You can save time & get a consultation before submission.
  • You don't have to make sets of documents for each and every application. 
  • Best of all, at no cost to you. It is because incentive comes from bank (their outsource marketing cost).

Why borrow as much as possible?


Borrowing money from banks at zero interest rate?
Milan Doshi shows you how

Posted Date: May 14, 2010

By: Milan Doshi
Effect of Inflation on Bank Loans
Borrowing money from banks at zero interest rate? Milan Doshi shows you how
If you were to ask any person from our parents’ generation, the common advice they would give is:
  1. Don’t borrow any money
and
  1. If you really need to borrow, borrow as little as possible and return it back as soon as possible
Their reasoning is that having a peaceful sleep at night is extremely important. If you were to owe anyone any money, there is this deep-rooted fear that someone might knock on your front door in the middle of the night demanding that they be repaid on the spot.

I am not too sure but perhaps it could partially be due to movies. In many movies, there are scenes where the greedy landlord and his henchmen come knocking on the poor farmer’s door demanding that they be repaid on the spot. When the poor farmer is unable to do so, the landlord then forcefully takes over what few possessions the farmer has and kicks the poor farmer and his family out of the house.

There is no way we can fully appreciate what our parents might have gone through in their generation which shaped their beliefs. Many of them would have lived through the Second World War, the OPEC oil crisis, racial riots, etc. In those days, being able to have 3 decent meals a day was a luxury, something that we today take for granted.


Leveraging on bank borrowings
As a result of this misplaced fear, many of our parents have completely missed out on the power of leverage by using bank borrowings for property investments. In fact, I recall the day my father bought a double-storey house in Singapore in 1973 for S$120,000 which was a big sum in those days. He had taken a 25-year loan and one of his life’s goal was to look forward to the day the property loan is fully settled and the house finally becomes his. The loan was finally settled in 1998 and my father sold off the house for around S$1 million a few years later and moved into a condominium as both my parents had trouble climbing stairs.

Another reason why their generation didn’t like to take up big bank loans for property purchases is that the amount that has to be repaid back over long periods is close to double the original loan amount. They prefer to work hard, save money for a few years and then take a small loan to save on bank interest costs. Unfortunately, their well-meaning advice given while we are growing up makes many people afraid to take on big loans. Hopefully, this article changes your perspective on this issue.


Are bank loans making you poorer? 
Let’s take the example of a loan for RM1 million at a fixed interest rate of 5% per annum for 25 years. The yearly installment works out to RM70,952 per year or RM5,913 per month. Multiply by 25 years and the amount works out to a staggering RM1,773,800! Imagine borrowing RM1 million but having to pay RM1.773 million back i.e. the principal amount of RM1 million plus interest costs of RM773,800. As a result, many people would rather avoid borrowing money and hence miss out on property investments. Their logic would be “Why take unnecessary risks to make the banks richer and yourself poorer”?

Unfortunately, these people are looking at things from the wrong angle. They don’t realize that the money returned back while in absolute terms is totalling RM1.773 million, its value after taking inflation into account is completely different. You are not paying RM1.773 million today, but RM70,952 per year spread over the next 25 years. The purchasing power of RM70,952 today and its value 5, 10, 15, 20 and 25 years is vastly different.

For readers who are not mathematically-inclined, let me first explain the effects of inflation in an easy manner. Let’s assume RM1,000 today can buy you 1,000 lollipops. If inflation is running at 4% per annum, the value of
                                                    1,000 lollipops
RM1,000 one year from now  = -----------------------
                                                      1 + Inflation Rate
                                                  1,000 lollipops
                                              = ------------------------
                                                      1 + 4% (or 1.04)
                                              = 961.5 lollipops

Hence RM1,000 one year from now can only purchase 961.5 lollipops. Therefore, the value of RM1,000 one year later is the equivalent of RM961.5 in today’s value if inflation is 4% per annum.
                                                       Value of RM1,000 one year from now 
RM1,000 two years from now  = -----------------------------------------------
                                                                      1 + Inflation Rate
                                                         961.5 lollipops
                                                = -------------------------
                                                        1 + 4% (or 1.04)
                                                                    1,000 lollipops
                                              or   ------------------------------------
                                                        (1 + Inflation Rate)2  or 1.042
                                              = 924.5 lollipops

Therefore, RM1,000 two years later is only worth RM924.5 in today’s ringgit.
The formula to compute the Present Value of Future Dollars is:
                                                                                    Future Amount
Present Value of Amount nth years from now =  ----------------------------
                                                                                (1 + Inflation Rate)n
Let’s compute the Future Value of RM70,952 per year over the next 25 years assuming the inflation is 4% per annum:
Year                Amount (RM) in Present Value
   1                     70,952 / (1 + 4%)1 = 68,223
   2                     70,952 / (1 + 4%)2 = 65,600
   3                     70,952 / (1 + 4%)3 = 63,077

Calculate until Year 25 and add up all the various Present Values gives the answer of RM1,108,425. What this means is that while we will be paying in absolute terms a total of RM1.773 million, the actual value after inflation at 4% per annum is only RM1.108 million.

Suddenly borrowing money doesn’t look so scary.

In fact, it will start to make even more sense. Study the table below for the Present Value of a loan of RM1 million for 25 years at interest rates of 4% and 5% for various inflation rates:


Notice that if your bank interest rate is 4% (or 5%) and your inflation rate is 4% (or 5%), the Present Value of the Total Installment paid over 25 years will be equal to your bank loan of RM1 million. The bank interest cost and inflation cancels each other out. It’s equivalent to borrowing money at zero interest rate!


Inflation cancels out bank interest cost
If your personal inflation rate is above the bank interest rate, you actually end up paying less back. For example, if the bank interest rate is 4% (which is the current rate of BLR – 1.8% for residential properties) and your inflation is 5%, you actually end up paying back RM902,181 for a loan of RM1 million. Unbelievable, but it’s true.

Malaysia’s official inflation rate is around 3% per annum. Unfortunately this is not what most of us experience on an annual basis especially in recent years. Most families’ inflation rate will hover between 5% – 10% per annum depending on the parents’ (around 4-6% pa) and their children’s (around 6-10% pa) lifestyles. The inflation rate for children is usually higher than their parents due to their different consumption pattern and spending habits. This higher inflation rate actually works in your favor as the bank interest cost is only 4% per annum (i.e. BLR – 1.8%), far below your family’s average inflation rate.

In property investments, inflation not only works by pushing up asset values. It also reduces your borrowing costs when inflation is taken into account! This is another powerful reason why you must invest in good investment properties and borrow as much as possible provided the yields are higher than your borrowing costs. Then sit back, relax and let inflation work its magic on both sides of your Net Worth.

If you have any comments on this article or questions, please email to me at http://achievers88@yahoo.com. I would highly recommend that you sign up at our moderated getrichbook egroups at:

http://finance.groups.yahoo.com/group/getrichbook/
It's free for all my book readers and readers of this article. Only relevant emails pertaining to finance, property and stock investments will be approved for broadcast.
Article Contributed by
Milan Doshi
Financial Trainer and Best Selling Author of
“How You Can Become a Multi-Millionaire Real Estate Investor!”
For more information, visit www.milandoshi.com

投资赚钱靠“增值”

投资赚钱靠“增值”,增值需要时间。

投资回酬与风险往往成正比,通常时间越长,风险越低,时间越短,风险越高。
股票投资,每天抢进杀出,长期结算,赚钱的少之又少,非累积财富之道。
一个小心挑选的股票投资组合,持握10年,没有人会亏本。

因此靠投资累积财富,长期是最佳途径。要长期,必须要有耐性。耐性是纪律的表现。

许多人投资失败,是因为不守纪律,不守纪律是因为你的“情商”(EQ) 高过你的“智商”(IQ)-受情绪控制,而不是受理智控制。

受情绪控制,你就无法克制你把金钱化在消费品上的冲动。
消费品只会贬值,不会增值。

把钱花在只会贬值的消费品上,你就很难储蓄。
而储蓄是累积资本的原始手段。
没有储蓄就不会有资本,没有资本,就无法投资。
无法投资就无法达到财务自主。

投资产业

买产业是工薪阶级的最佳选择,除非买错地点、买错价格,投资产业失败者少之又少。交20%的头期,买一间屋子,只要涨价20%,就取得100%的回酬。
借贷越高,回酬越高,一间50万令吉的屋子,如果头期只需5万令吉 (10%),20年供完,如果每月租金足够摊还每月供款的话,20年后即使产业没有涨价,你也有了50万的财产了。

所以,买屋应成为职场新鲜人的第一项投资.



退休年龄,由55岁提高到60岁,已势在必行

提高退休年龄,是世界潮流,经济上轨道的国家早已实行,大马现在才跟上,实际上已嫌略迟。

紧跟着退休年龄的提高,提取全部公积金的年龄亦相应提高到60岁。

工薪阶级的薪金,通常在55岁时已到顶薪,公积金的缴交额达到最高,加上累积公积金所赚的利息也最大,故由55至60岁的5年,公积金可增加20%,使上班族的黄金岁月过得较宽裕。

但只是“较宽裕”而已,还是不足以保障晚年生活。

调查显示,公积金会员在55岁时提完公积金,有72%在3年内花光。
其馀28%不是不花光,只是在3年后才花光而已。

现代医药发达,除非患上绝症,要活到80岁并不难。

退休人士钱不够用
由55岁到80岁的25年,属黄金岁月。而最少有72%的乐龄人,要在钱不够用的窘境中,度过他们人生最后的22年。
这是多么残酷的事实,多么痛苦的人生。
大部分退休人士还是要靠儿女,或别人的资助,才能度过晚年。
换句话说,大部分退休人士,都无法做到财务自主,都面对钱不够用的窘境。
没有财务自主的晚年,不可能是潇洒的晚年。
黄金岁月也不可能是金光闪闪的岁月。
有财务自主潇洒晚年,才有可能好梦成真。
退休后财务自主,潇洒地度晚年应成为每一个上班族终身奋斗的目标。
从众多工薪阶级退休后,都得依靠亲人过活,说明了单靠薪金,无论如何节衣缩食,都无法达到财务自主。

要财务自主须学投资
要达到财务自主,必须学习投资。
投资就是以钱生钱,就是让别人为你赚钱。
作为受薪人士,你已经把你的时间卖给雇主,你再也无权支配你的时间,所以你不能兼职。你只能靠“不劳而获”赚钱,那就是“投资”。
投资是让时间替你挣钱,或让别人为你赚钱,你在将“资金”“投”出去之后,什么都不必做,财富却与日俱增,使你在退休时财务自主,潇潇洒洒的度过你的黄金岁月。

工薪阶级最适合买产业
买产业是工薪阶级的最佳选择,除非买错地点、买错价格,投资产业失败者少之又少。交20%的头期,买一间屋子,只要涨价20%,就取得100%的回酬。
借贷越高,回酬越高,一间50万令吉的屋子,如果头期只需5万令吉 (10%),20年供完,如果每月租金足够摊还每月供款的话,20年后即使产业没有涨价,你也有了50万的财产了。
所以,买屋应成为职场新鲜人的第一项投资。

股票简单易行须有智慧
股票是最简单易行的投资,但必须要有智慧。
买股票就是参股做生意,你的成败决定于生意的成败,不是决定于股市的起落。
只要你参股的公司,钱越赚越多,你的股票就一定会增值,又何必担心股价不起呢?

整天盯住股价,不理公司业务是否有进展,是舍本逐末。
舍本逐末,使你的投资走向末日。

所以,股票投资要成功,首先是要具备正确的投资概念--投资于业务。

有前途的企业,其股份(票)才有可能增值。

投资者最常犯的错误,是以为“价值”可以无中生有,殊不知被吹胀的泡沫,破灭只是时间问题而已。
企业必须脚踏实地去经营,才能创造价值。

股票要有价值,才能增值。
惟有投资于能增值的股份,才能致富。能致富,才能财务自主,有财务自主晚年才能过得潇洒。
投资增值,需要时间,所以投资越早开始越好。

现在就开始投资吧!

本文是“度晚年,有尊严”一文的补充(“度”文请见“股票投资正道”第89页)。
股票投资之道,详见“30年股票投资心得”和“股票投资正道”二书,有兴趣者不妨细读、深读,以减少走冤枉路!

如果你想快速致富,你不需要这两本书。

投资赚钱靠“增值”

投资赚钱靠“增值”,增值需要时间。
投资回酬与风险往往成正比,通常时间越长,风险越低,时间越短,风险越高。
股票投资,每天抢进杀出,长期结算,赚钱的少之又少,非累积财富之道。
一个小心挑选的股票投资组合,持握10年,没有人会亏本。
因此靠投资累积财富,长期是最佳途径。要长期,必须要有耐性。耐性是纪律的表现。

许多人投资失败,是因为不守纪律,不守纪律是因为你的“情商”(EQ) 高过你的“智商”(IQ)-受情绪控制,而不是受理智控制。

受情绪控制,你就无法克制你把金钱化在消费品上的冲动。
消费品只会贬值,不会增值。

把钱化在只会贬值的消费品上,你就很难储蓄。
而储蓄是累积资本的原始手段。
没有储蓄就不会有资本,没有资本,就无法投资。
无法投资就无法达到财务自主。

长期投资减低风险
投资必须长期的,一个最重要理由,除了减低风险,就是按照“复利”理论,较后期的回酬率比初期的回酬率高不知多少倍。
后期3年所赚,可能高过前期的10年。

故短期套利,是牺牲了后期庞大的回酬。
致富靠后期的庞大回酬,并非靠初期的低微回酬。
投资一定要有先苦后甜的精神,“先苦”而不半途而废,靠耐性,耐性靠纪律,纪律靠控制情绪,控制情绪靠你自己的意志力。
自救多福,此之谓也。投资的途径很多,买产业和股票是最普通,最易行的途径。

最普通、最易行,却不保证所有人都成功。

成功靠增值。
定期存款之所以不是好投资,是因为母金不会增值。增值是投资成功之钥。
有纪律储蓄才能增值
千里之行,起于跬步,财务自主是马拉松,要达到财务自主的终点,需由本身做起。

第一步是克制你的消费欲,有纪律地储蓄--每个月领到薪金后,先抽出20%,存入银行,其余的才花用。

不要等到月尾才储蓄,因为不是每一个人都有守纪律的精神,花到月尾时可能已所剩无几,甚至出现负数。

你的公积金数目可观,是因为强迫缴纳。你如果要储蓄成功,最好的方法是强迫自己储蓄。先存后花就是强迫储蓄。

勿把钱留银行太久
强迫储蓄可以培养纪律,纪律可养成耐性,有耐性,投资才能长期坚持,长期坚持才能增值,增值是达到财务自主之钥。

不要把钱留在银行中太久,因为银行给你3.5%的利息,而通货膨胀率为6%,你每存一年,就亏了2.5%, 存得越久,亏得越多。

投资致富的人,多不胜数,却从来没见过靠利息收入而发达的人。

你的金钱必须为你赚取高过通胀率的回酬,就好像投资回酬必须高过投资成本(借钱投资,利息就是成本)一样。

冷眼专栏3天前已刊登于《南洋商报》。敬请订阅《南洋商报》,以利掌握先机。

冷眼 股市基本面大师 

Value Investing - ZHULIAN (5131)

ZHULIAN posted another record high profit after tax (PATMI) of RM29 million for quarter ended 31 May 2012.

Currently trade just below 9.0x PE (based on rolling-4Qs PATMI), still a value buy company where the Dividend Yield (DY) is approx 6% (almost double Fixed Deposit) with at least 5% capital appreciation a year.



MRTA vs MLTA (by Personal Money Nov 2011)


Which is the right coverage for a loan seeker?

Key points in this article:-

  • MRTA - Cheap for a reason.
  • Is it smart to use existing life policies?
  • MLTA - Benefits at a cost.
  • Not cheaper or better.
My conclusion:
MLTA is widely accepted since last two years, thanks to hardworking life insurance agents. It comes as an option for consumer to select a better option for them, no right or wrong, no cheaper or more expensive but something able meet individual's unique requirement.





Source: Personal Money - November 2011 Page 46 to Page 48

Key-man Insurance and Income Tax

Are you buying Key-Man Insurance for your business?

Two common questions?
1) Premium can claim tax (deductible for income tax)?
2) Insurance Proceeds need to pay tax (taxable receipt)?

The answer is, it DEPENDS.

The taxability of the insurance proceeds depends on whether it is a Term Life policy, Accident policy, Whole Life policy or an Endowment policy. If it is a Term Life or an Accident policy, the proceeds receivable will be taxable on the employer or the Company since the Insurance Premiums are allowable for tax deduction.

Conversely, where it is a whole life or an endownment policy, the proceeds available will be considered to be a capital receipt and not taxable on the employer or the company since the insurance premiums are not allowable for tax deduction.

In short,

Whole Life / Endowment => Premium NOT Deductible => Proceeds NOT Taxable
Term Life / Accident => Premium Deductible => Proceeds Taxable

Source / Reference:
Publlic Ruling No 2/ 2003 issued by Director General of Income Tax Department (aka LHDN)

Why do I need to refinance my mortgage (home loan)?

Refinancing property loan is just part of financial planning.

There are many reason why this 'action' is worth doing, amongst the common one are

  1. Lower the monthly installment
  2. Shorten the remaining tenure (e.g. from remaining 25 years to 20 years)
  3. Save interest (can be easily RM20,000 for every RM100,000 outstanding loan). 
  4. Credit Card Debt Consolidation (with the lowest interest in town)
There are cost associated with refinancing but in many case, the breakeven point is within 24 months... some case, can be within 6 months. Why not take a look for yours or someone you know?

Saving money feels good.

Click here to check how long it takes to breakeven and how much you can save in next 5 years.

Refinancing property - required documents

Refinancing (Mortgage) Application - Required Documents for Salaried Person?

* Copy of NRIC (Front and Back, must be clear)
* Property title (that pledged for mortgage)
* Latest 3 months payslips with
* Latest 3 months bank statement showing the salary deposited
* Latest KWSP Statement
* Personal Saving/ Investment Supporting Documents (If any)
* Copy of Letter Offer for existing loan.
* Copy of Sale & Purchase Agreement.
* Latest existing loan statement.
* Latest utility bill of the property (preferably TNB bill)

** For commission earners, 6 months payslips + 6 months bank statement

Incomplete Documents is one of the most common reason application delayed or rejected. Therefore, we help you to ensure it wouldn't happen.