Wednesday, August 29, 2012

Over RM40 Billion assets Unclaimed......

There is RM 40 billion (RM40,000,000,000) worth of assets left by Malaysians and yet to be claimed by their heirs because most of them die without writing a Will. 

Make sure your assets DO NOT add to this unclaimed money!

This was reported on the New Straits Times paper on January 22, 2007By the way, some of this money could belong to.....

Click here for more information.

Mortgage Insurance (MLTA/MRTA) & Estate Planning

Looking at the problem of leaving the world without a Will, it makes sense for one who have a mortgage to buy MRTA or MLTA.

When a person dies without writing a Will, the problems that might be face by your loved ones are: -
  • it cost your spouse/survivors more hassle, time and money to distribute your assets:
    • the longer the process of distribution of the estates, the higher fees will be charged by lawyer. It may take 6 to 12 years or more, to complete the process.
    • hassle of finding 2 guarantors; guarantors are responsible for all your expenses and debts. Most people don’t want to be your guarantor since they will be liable for any expenses and debts.
    • appointment of administrator and trustee. Can you trust an administrator appointed by the court? Remember, nowadays, a person’s total estate could easily be worth more than RM 500,000 (properties, cars, EPF and insurance)
  • do you know that when a person pass away, all their assets will be frozen? It can take 2x longer for your family to get to your money even if it is a joint accounts. They will have cash flow problems! What if they are desperate to pay bills? What happen if your spouse is unemployed? Or worse still, what if both parent died together leaving behind only young children?
  • your children might be taken care off by someone/various relatives that is not of your choice. Besides, if you have several children, they will be “Lelong“, i.e the court will decide and divide who to take care of which child. In the end, they will be separated, especially if a relative can’t afford to keep all of them together. The court decision might not guarantee that person will love & care for your children. There are plenty of cases where children are abandoned after the money you leave for your children got squandered!
  • Can you imagine, someone you don’t like, might get a chunk of your assets?
  • your assets could be mis-handled and less go to your intended family!

Saturday, August 25, 2012

Why having MLTA is not enough?

Many home owners buy MLTA as they see the value as compared to MRTA. (click here for MLTA vs MRTA).

However, is it the end? Mission accomplished?

Financial advisor should have done more than that. By having MLTA, part of the problem solved (having money to pay for debt in case of triggering events) but the other part of the problem still unsolved (how and when to pay the debt?).

Why I say so?

Just imagine, Mr. A bought a condo, bought MLTA.

Triggering event happened to Mr. A (esp. Death), the insurance company will pay a huge lump sum but will that money be eventually goes to settle the loan?

Many things will happen in between, many just beyond imagination, therefore, the house is still not your love one but belong to the bank.

How to solve the problem?

Write a Will or event set-up a Trust. It is not that costly as compared to if something happened without a proper paper like Will or Trust.

Friday, August 3, 2012

Mortgage Application - Market Value of the Property

One of the most important factor in a mortgage application, if the borrower need to get maximum loan, is the OMV (Open Market Value) accepted by the bank.

If seller asking for RM300,000 but the OMV by panel valuer (of the bank that the borrower want to get a max loan of 90%) is only RM250,000, then, the borrower will need to pay very large deposit from own money, i.e. RM300,000 - RM225,000 = RM75,000.

Bank only lends based on OMV, i.e. 90% x RM250,000 = RM225,000

Unless the buyer is prepared with RM75,000 ++ (other expenses like legal fee, Sale & Purchase Agreement stamp duty etc), the buyer will face a serious problem if he/she made the 2% or even 10% downpayment yet can't secure a loan to meet the balance payment.

Therefore, using an experienced mortgage consultant is important to eliminate possible problems.

CSCENIC - Small Cap - Good Dividend Yield

Update 30.7.2012
2Q2012 Results announced within 1 month from closing

  • Better Turnover Q-o-Q and Y-o-Y.
  • Better Net Profit Margin for 4Qs continuously.
Interim Single-Tier Dividend 4.5 sen per share announced, ex-date 10.10.2012 pay-date 29.10.2012.

Based on Closing Price (2.8.2012) RM1.13, the Dividend Yield is 7.96%

17 JULY 2012
Closing Price 16 July 2012 RM0.98 (Range RM0.945-RM1.02)

Track Record for high dividend payout
Net cash position.

Not so good (hope improving in next quarter)
Turnover RED for 3 quarters (lower compared to Preceding Year Same Quarter)
Net Profit RED for 4 quarters (lower compared to Preceding Year Same Quarter)

Can consider adding this to BUY & HOLD portfolio.

Yield Target = DY >8% + Capital Appreciation >2% = >10%

Defence for this stock (Safety of Principal)
1. High Dividend Yield
2. Healthy Cash Flow and Cash Position
3. Undervalued Land & Building (NTA RM0.77 as at 31.3.2012)