Personal Finance 101: Not a single property means that advice is wrong
Personal finance ‘expert’ says, ‘property investment is not necessary.’
Yesterday, I had a supper session(mamak session) with a group of ‘old’ friends. They still look young of course but they are same age as me. Haha. Next year is the year of the Snake, it’s my year. So, you can guess my age dee. It’s not 24 and not 36. Anyway, coming back to this topic which I told my few friends yesterday and showed them some samples of a few personal finance ‘experts’ who are always against property investment. Truth is, I am not sure if they actually already own a property yeah. Plus many writers for property column in some main media who’s also writing without much understanding about property investment too.
Here are some FAQs.
#1 – Just rent lah, it’s cheaper.
Very hard to argue with this one because it’s true. A RM500,000 condo will need a monthly repayment of easily RM2,500 but if you rent that same place, probably you need to pay just RM1,800. Maybe. However… this RM1,800 is FOREVER and EVER and EVER. (Even assuming that the rental amount remains the same forever and ever and ever!)
I know some would now argue that they are single anyway. They do not need to give it to their next generation. Whether you give or you don’t give, it does NOT change the above yeah. Renting a place means paying rental forever and ever and ever. So, yes, it’s cheaper per month in comparison to the mortgage payment but it’s forever too.
Feel free to use the calculator in your smartphone to check how much it would be to pay rental for 55 years… You start work at 25, you retire at 60… you only leave this world at 80. That’s why 55 years yeah. Oh yeah, the owner of the property will be happy that you can rent from him / her for 55 years. I thank you on their behalf. 🙂
#2 Many famous people also never own a property mah
Again, this statement is true. One of the friends I was having supper with asked me if property investment is necessary. I looked at him and said, for you, it is NOT necessary yeah. Anyway, he’s a super successful businessman with businesses across many countries.
Warren Buffett is STILL staying in his nice and cosy home and he said he does not need a more lavish home. (Info Source: housedigest.com) Dear all… Warren Buffet has a net-worth of US$104.4 billion. Why does he need to do property investment? As for most of us, unless we are like my friend who’s super successful or already have billions in the bank, better have investments yeah.
Elon Musk said this, “”I don’t even own a place right now, I’m literally staying at friends’ places,” Info source: cbsnews.com Dear all, Elon Musk’s net-worth is right up there with virtually any top billionaires of the world yeah. If he likes, he can just rent the Presidential Suite in some luxury hotel and just stay there as long as he likes. Why need property investment?!
#3 Property price already so high, crazy meh?
Around 35 years ago, my parents bought our Ipoh home. RM85,000. Location was Ipoh Garden South. Relatives asked why buy so expensive home, why not buy in cheaper areas? You see, RM85,000 is also considered very expensive then. Probably 5 years ago, my brother bought the same home on a different row so that we have another house close to my parent’s place. He paid RM540,000 for it. If someone were to ask my parents if the RM85,000 would become RM540,000 they would laugh at the person and label his prediction as crazy meh…
Please however note that if you did not do your homework and simply buy a property, the property price may not move as much. We could have even overpaid for a property if we did not do sufficient research. This is also a fact.
Please do proceed to ask the first phase owners of Desa Parkcity (whom people label as Kepong leh…), or the owners of landed homes in Sunway (whom people say, walao, buy homes in mining land ah?) and even people who first bought into Setia Alam (whom people ask if that’s like in another planet…). Ask them about the price they bought and ask them if they thought the price could have increased so much today versus then. Their answer would have been, ‘crazy meh?’
Why Property Investment is needed is not even due to the 3 reasons above!
The above are all talking about money. This final reason is the most important reason why property investment will always be needed yeah. To those who kept telling people that renting is better, just note that they still must rent from someone who owns a property yeah. You can decide if you like to be the one who receive the rent or the one who pay the rent.
Secondly, whether Warrent Buffett or Elon Musk, both of them still need a place over their head yeah. Of course I am very sure both could afford to buy a huge truck or a huge private jet and stay inside versus staying inside a house but I hope you understand that none of us could afford to always sleep under the sky or next to some bushes every night yeah. That’s why a property is always needed.
Last but not least is that when i write this article, I am very clear with my conscience yeah. There are no links in this article for you to click and buy some property. I do not even have a Real Estate Negotiator Tag yeah. There are also no links to some mortgage brokers. I am also not a mortgage broker too. If you have ever heard me speak at any property event, you would also notice that I share information for you to understand and not a speech persuading you to buy some property on offer yeah. 🙂
We do not need 10 properties yeah (unless we love property investment)
My sharing is just to inform everyone that we do NOT need 10 properties. For those who love properties, go ahead and buy more. For most other people, that one (just one) property is definitely still an investment for our future. One day, we will stop paying the mortgage and we will also stop working too. Thus income will stop too. At that time, the fully paid home can be sold and we could use the money to do things we wanted too. Renting at that time is definitely better than starting to rent today and tomorrow and forever. Cheers.
Cheers.
Please do share if you believe others could benefit too. Thank you.
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
Alternatively, Follow me on Telegram here.
Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles.
Else, follow me on Twitter here.
