An Open E-mail to the Bidayuh Young Ones…

From:	“Brader Ah Long Mao” <the_prosperous_dragon@yahoo.com.sg>
To:	“The Bidayuh Young Ones” <daridayungbidayuh@gmail.com>
Subject:	Money Talk – Part II
Date:	Fri, 28 Mar 2008 23:59:48 +0800

My dearest young friends – wherever you might be within Malaysia,

As you we are categorized under the second class of “BUMIPUTERA LAIN-LAINs” (a term adapted from http://partistar.wordpress.com/) or better known in short as “BU.L.Ls. (?)”, we do have the privilege given by the gomen. Each one of us has been given an opportunity to be rich through legal means. One of the legal means is that every BU.L.L. like you and I is entitled for a RM200K (or RM200,000.00) investment loan through ASB (Amanah Saham Bumiputera). Such investment looks attractive as it includes INSURANCE COVERAGE – could you disagree more? UNFORTUNATELY, most of us – the BU.L.Ls. – have lack of information regarding this ASB Investment Loan, including basic knowledge on matters related to investment. And that’s the main purpose I wrote this article – free of charge! Well, do remember that this Brader Ah Long Mao tolong maah… and that’s all, lah! Yes, there are readers out there who are filthy rich (read: stingy) by now after they get involved in this ASB investment, but then, they just kept quiet and don’t want to share their investment experience… Ooops! Never mind, lah… Better late than never or it’s NOW or NEVER!

Do you know that WHY, whenever there is an announcement by the gomen that it will launch the new investment scheme, most of us – the BU.L.Ls. – will give a lukewarm response to it, unlike other Non-BU.L.Ls.? Again, the reasons are due to lack of information lah; we are made “poorer and poorer” each and every day lah (you do know what I mean, right?!); etc. BUT THEN, not many of us knew that we – the BU.L.Ls. – are very fortunate to have the privilege and opportunity to be rich. Of course, some of us were not born to be rich (as Swisserikin…), but, whenever there’s a will, there’s a way, lah!

Before you proceed, ask yourself a question on what is your VISION for the next 20 years. For example, “Have I seen the target (apart from light) at the end of the tunnel?!” In the context of “Money Talk – Part II”, the answer is, “Yes, I want to be another Orang Kaya Baru (OKB) on the block…” Then, ask yourself another question on what is your MISSION objective such as, “How to snipe the target, then?” In this context, the answer depends on you, my friends! Only through strict discipline that you can involve in “Forced Saving” by taking the ASB Investment Loan and repay the loan as low as ± RM100.00 per month (fixed, monthly payment) for the next 20 years! Well, please be informed that the monthly amount to be paid is LESS than RM100.00 for RM10K loan and I just give the round figure, lah. Easy for me to do the calculation, what?! Anyway, kindly check the latest figures with any local commercial bank…

OK, you have two options: (i) to invest through the ASB Passbook (i.e. using your own savings without getting any bank loan); and (ii) to invest through the ASB Investment Loan (with a maximum loan of RM200K per individual). But, so as not to confuse my young readers and make them understand the investment concept, let me focus my explanation/discussion based on RM10K investment first. I chose the 8% dividend as the average point, as this value is currently in use by the local banks. A word of caution: There is NO GUARANTEE that the 8% dividend will be maintained for the next 20 years, and thus, such value is used mainly for illustration only. In fact, this article serves as an investment guideline for our young fellow Bidayuhs (including other BU.L.Ls), who have entered the work force and don’t know what to do with (or where to dump) their excess disposable income – if any, lah!

Let me illustrate the first option. You have a disposable income of RM100.00 per month and you are intended to save the same, fixed amount of RM100.00 into your ASB Passbook on monthly basis for the next 20 years (a long term investment). See Table 1 below. (NOTE: The bank officer in-charge won’t give you the following tables during consultation!)

Table 1. Basic Investment via ASB Passbook (to start with a new balance of RM0.00).

Investment Year	New Balance (RM) (A) = start-up or previous (E)	Annual Investment (RM) (Jan – Dec) (RM100.00/month x 12 months) (B)	Grand Total (RM) (C) = (A) + (B)	8% Dividend (RM) (D) = (C) x 0.08	Accumulative Total (RM) (E) = (C) + (D)
1	0.00	1,200.00	1,200.00	96.00	1,296.00
2	1,296.00	1,200.00	2,496.00	199.68	2,695.68
3	2,695.68	1,200.00	3,895.68	311.65	4,207.33
4	4,207.33	1,200.00	5,407.33	432.59	5,839.92
5	5,839.92	1,200.00	7,039.92	563.19	7,603.11
6	7,603.11	1,200.00	8,803.11	704.25	9,507.36
7	9,507.36	1,200.00	10,707.36	856.59	11,563.95
8	11,563.95	1,200.00	12,763.95	1,021.12	13,785.07
9	13,785.07	1,200.00	14,985.07	1,198.81	16,183.87
10	16,183.87	1,200.00	17,383.87	1,390.71	18,774.58
11	18,774.58	1,200.00	19,974.58	1,597.97	21,572.55
12	21,572.55	1,200.00	22,772.55	1,821.80	24,594.36
13	24,594.36	1,200.00	25,794.36	2,063.55	27,857.90
14	27,857.90	1,200.00	29,057.90	2,324.63	31,382.54
15	31,382.54	1,200.00	32,582.54	2,606.60	35,189.14
16	35,189.14	1,200.00	36,389.14	2,911.13	39,300.27
17	39,300.27	1,200.00	40,500.27	3,240.02	43,740.29
18	43,740.29	1,200.00	44,940.29	3,595.22	48,535.52
19	48,535.52	1,200.00	49,735.52	3,978.84	53,714.36
20	53,714.36	1,200.00	54,914.36	4,393.15	59,307.51
		24,000.00*

Notes:

1. Income (profit) to be made in the next 20 years = RM59,307.51 – RM24,000.00 = RM35,307.51 2. The numbers affixed with * indicates the total investment to be made by the end of 20 years of investment. 3. No interest rate will be charged; instead you’ll get the annual, 8% dividend (the average point). But then, is it achievable? It depends on your financial/investment planning and discipline, lah… 4. No break-even point/pay back period is available for this type of investment. Ada kah???

Here comes the second option – the ASB Investment Loan. Well, the story is exactly the same. You have a disposable income of RM100.00 per month and you are intended to repay your bank loan the same, fixed amount of RM100.00 on monthly basis for the next 20 years (a long term investment). Yes, you have to loan from any local bank in order to purchase your ASB shares; otherwise, you’ll not help much in the generation of our economy, right?! Sort of learning “economic recycling theory”, lah. See Table 2 below.

Table 2. Basic Investment via ASB Investment Loan (to start with a new balance of RM10,000.00).

Investment Year	New Balance (RM) (A) = start-up or previous (D)	Loan Repayment (RM) (Jan – Dec) (RM100.00/month x 12 months) (B)	8% Dividend (RM) (C) = (A) x 0.08	Accumulative Total (RM) (D) = (A) + (C)
1	10,000.00	1,200.00	800.00	10,800.00
2	10,800.00	1,200.00	864.00	11,664.00
3	11,664.00	1,200.00	933.12	12,597.12
4	12,597.12	1,200.00	1,007.77	13,604.89
5	13,604.89	1,200.00	1,088.39	14,693.28
6	14,693.28	1,200.00	1,175.46	15,868.74
7	15,868.74	1,200.00	1,269.50	17,138.24
8	17,138.24	1,200.00	1,371.06	18,509.30
9	18,509.30	1,200.00	1,480.74	19,990.05
10	19,990.05	1,200.00	1,599.20	21,589.25
11	21,589.25	1,200.00	1,727.14	23,316.39
12	23,316.39	1,200.00	1,865.31	25,181.70**
13	25,181.70	1,200.00	2,014.54	27,196.24
14	27,196.24	1,200.00	2,175.70	29,371.94
15	29,371.94	1,200.00	2,349.75	31,721.69
16	31,721.69	1,200.00	2,537.74	34,259.43
17	34,259.43	1,200.00	2,740.75	37,000.18
18	37,000.18	1,200.00	2,960.01	39,960.19
19	39,960.19	1,200.00	3,196.82	43,157.01
20	43,157.01	1,200.00	3,452.56	46,609.57
		24,000.00*

Notes:

1. The numbers affixed with * indicates the sum of money that you’ll have to pay for the bank loan. Using a straight forward calculation, the total amount of interest payable to the bank for the next 20 years = total installment – total loan = RM24,000.00 – RM10,000.00 = RM14,000.00 (or RM700.00/year); or the annual interest rate = [(RM700.00/RM10,000.00) x 100] = 7%. It’s quite high, though… 2. The numbers affixed with ** indicates the year when you can start making money (break-even point/pay back period), i.e. let say in the second quarter of the 12th year. This is where the amount of money generated will surpass the total amount of loan repayment (RM24,000.00). 3. The income (profit) to be made = RM46,609.57 – RM24,000.00 = RM22,609.57 4. Compare the difference in the amount of annual dividend to be gained with Table 1.

So, did you notice the difference between those two options?

What?! You have a blurred vision?! OK, let me explain…

For Option 1 (i.e. investment using your own savings), you’ll have zero capital at the start of your investment year, whereas for Option 2 (i.e. investment using the ASB Investment Loan), you’ll have the RM10K capital. It will take you more than 7 years to achieve the RM10K capital for Option 1, whereas for Option 2, the capital will be increased almost 50% within the same time frame (see Tables 1 and 2). You will also notice the difference in gained dividends for both options – see the difference in amount gained and the time frame. For example, the RM1K mark will be gained during the 8^th year for Option 1, whereas for Option 2, the same RM1K mark will be gained during the 4^th year. Yes, the element of time plays an important role here. There’s a saying, “With time, you’ll be there…“  Well, you can make simple graph comparisons on capital investment and dividends for both investment options using Microsoft Excel – a little homework for you, lah!

You’ll also wondering as why the profit from ASB Investment Loan is smaller compared to “self-induced” investment. Hello, my friends! The reason is that you’ll have to repay your bank loan (including interests), what?! But then, the MAIN ADVANTAGE is that we have been given the privilege to get such loan from any local bank to purchase the ASB shares up to RM200K; make some fortune out of it, which is TAX-FREE and the future profit is to be guaranteed by the gomen.

You can use Option 1 if you are “loaded” and have a stable and fixed disposable income at RM100.00 per month for the next 20 years, BUT THEN, is that a reliable option? The temptation is there whenever you look at your accumulated “capital” for Option 1. Let say a year or two after investing, for sure you’ll siphon your money, right?! So, that’s the disadvantage of using personal savings for ASB investment. Lots of Bidayuh old folks (not to politically gossiping them, lah!) succumb to this kind of ideology due to limited amount of cash in their hands, as they need it for keeping their school-going children, other loans, etc. And that’s the main reason why I focused my attention to the Bidayuh young ones to start their own savings via ASB Investment Scheme… And please remember that we live our daily life under the constant pressure of variable costs created by the Barang Naek (BN) gomen… Harga minyak (masak) naek, gula naek… You name it!

That explained why the ASB Investment Loan is a VIABLE option. You’ll have the substantial amount of start-up capital at RM10K (engraved in the certificate and NOT in cash) and you’ll constantly “upgrade” (accumulate) the amount on yearly basis. Yes, the year-end dividend will be accumulated, together with the previous balance. In your ASB Passbook, however, only annual dividend will be made available. Other amounts are safely hidden somewhere to prevent any mismanagement of the investment. Thus, it is advisable that you should practice a very STRICT DISCIPLINE, i.e. not to withdraw the money BEFORE the maturity period (i.e. before the break-even point/pay back period), otherwise, your investment planning will be disrupted! It is also known that the investment money is able to generate itself by the end of second year of the investment, but then, you still have to repay your bank loan (including interests). You can only withdraw the money within the second quarter of 12^th year of investment, where your loan repayment is now complete. However, if you are planning to get the money even before its maturity period, the bank can determine the balance amount that belongs to you after it carry out the deduction process of your loan balance. But then, the investment effort is no longer worth, lah…

So, are you getting excited now? Wow… that’s good! How about the RM50K loan? I’m sure that you’ll be more interested. The RM50K loan is viable for those who have substantial amount of disposable income and yet they don’t have the idea on where to dump their excess money. The best proportion is RM50K:RM50K:RM50K:RM50K, which equals to RM200K. Better start with RM50K for the first phase, and then another RM50K for the second phase until you reach the maximum investment of RM200K. If you are married and still being a young, honeymooner couple (like TBS Bidayuh & wife… Heh!), then you can combine your future wealth with your spouse. The road to OKB Club is there for you and your family… It’s true, given that you’ll practice a very strict discipline in both planning and managing your investment. Besides, doing investment with ASB can be considered as a LOW RISK INVESTMENT and the profit is to be guaranteed by the gomen, where you don’t have to fork out more for capital investment.

To further illustrate, let’s make a comparison between putting all your money that you have to set up a grocery shop versus putting your money (at fixed amount on monthly basis) by repaying your ASB (bank) loan for the next 20 years! For grocery shop, you need more capital investment, but then, at the same time it doesn’t guarantee you a profitable business, as you have to face stiff competition from your competitors, etc. For ASB investment, you need only an affordable capital at regular basis (for bank loan and interest repayment) and your investment will be monitored by ASB fund managers, so you don’t have to worry much about your money whereabouts. Yours is “money back guaranteed” by the gomen. What you have to do is to trust those fund managers to manage your money while at the same time, you can do something else, lah! In fact, housing and car loan repayment applies the same rule, but with ASB Investment Loan, you need not have to worry about maintenance cost, depreciation value, irregular resale value (including fuel prices), etc.

OK, let me illustrate the following example using RM50K as basis for an investment. The previous explanation still applies here, except that there’s a difference in amount of money involved. For example, you have a disposable income of RM365.00 per month and you are intended to save the same, fixed amount of RM365.00 into your ASB Passbook on monthly basis for the next 20 years (a long term investment). See Table 3 below.

Table 3. Basic Investment via ASB Passbook (to start with a new balance of RM0.00).

Investment Year	New Balance (RM) (A) = start-up or previous (E)	Annual Investment (RM) (Jan – Dec) (RM365.00/month x 12 months) (B)	Grand Total (RM) (C) = (A) + (B)	8% Dividend (RM) (D) = (C) x 0.08	Accumulative Total (RM) (E) = (C) + (D)
1	0.00	4,380.00	4,380.00	350.40	4,730.40
2	4,730.40	4,380.00	9,110.40	728.83	9,839.23
3	9,839.23	4,380.00	14,219.23	1,137.54	15,356.77
4	15,356.77	4,380.00	19,736.77	1,578.94	21,315.71
5	21,315.71	4,380.00	25,695.71	2,055.66	27,751.37
6	27,751.37	4,380.00	32,131.37	2,570.51	34,701.88
7	34,701.88	4,380.00	39,081.88	3,126.55	42,208.43
8	42,208.43	4,380.00	46,588.43	3,727.07	50,315.50
9	50,315.50	4,380.00	54,695.50	4,375.64	59,071.14
10	59,071.14	4,380.00	63,451.14	5,076.09	68,527.24
11	68,527.24	4,380.00	72,907.24	5,832.58	78,739.81
12	78,739.81	4,380.00	83,119.81	6,649.59	89,769.40
13	89,769.40	4,380.00	94,149.40	7,531.95	101,681.35
14	101,681.35	4,380.00	106,061.35	8,484.91	114,546.26
15	114,546.26	4,380.00	118,926.26	9,514.10	128,440.36
16	128,440.36	4,380.00	132,820.36	10,625.63	143,445.99
17	143,445.99	4,380.00	147,825.99	11,826.08	159,652.07
18	159,652.07	4,380.00	164,032.07	13,122.57	177,154.63
19	177,154.63	4,380.00	181,534.63	14,522.77	196,057.40
20	196,057.40	4,380.00	200,437.40	16,034.99	216,472.40
		87,600.00*

Notes:

1. Income (profit) to be made in the next 20 years = RM216,472.00 – 87,600.00 = RM128,872.40 2. The numbers affixed with * indicates the total investment to be made by the end of 20 years of investment. 3. Again, no interest rate will be charged, instead you’ll get the annual, 8% dividend (the average point). But then, is it achievable? It depends on your financial/investment planning and discipline, lah… 4. No break-even point/pay back period is available for this type of investment. Ada kah???

Here comes the second, RM50K option – the ASB Investment Loan. Well, the story is exactly the same. You have a disposable income of RM365.00 per month and you are intended to repay your bank loan the same, fixed amount of RM365.00 on monthly basis for the next 20 years (another long term investment). See Table 4 below.

Table 4. Basic Investment via ASB Investment Loan (to start with a new balance of RM50,000.00).

Investment Year	New Balance (RM) (A) = start-up or previous (D)	Loan Repayment (RM) (Jan – Dec) (RM365.00/month x 12 months) (B)	8% Dividend (RM) (C) = (A) x 0.08	Accumulative Total (RM) (D) = (A) + (C)
1	50,000.00	4,380.00	4,000.00	54,000.00
2	54,000.00	4,380.00	4,320.00	58,320.00
3	58,320.00	4,380.00	4,665.60	62,985.60
4	62,985.60	4,380.00	5,038.85	68,024.45
5	68,024.45	4,380.00	5,441.96	73,466.40
6	73,466.40	4,380.00	5,877.31	79,343.72
7	79,343.72	4,380.00	6,347.50	85,691.21
8	85,691.21	4,380.00	6,855.30	92,546.51**
9	92,546.51	4,380.00	7,403.72	99,950.23
10	99,950.23	4,380.00	7,996.02	107,946.25
11	107,946.25	4,380.00	8,635.70	116,581.95
12	116,581.95	4,380.00	9,326.56	125,908.51
13	125,908.51	4,380.00	10,072.68	135,981.19
14	135,981.19	4,380.00	10,878.49	146,859.68
15	146,859.68	4,380.00	11,748.77	158,608.46
16	158,608.46	4,380.00	12,688.68	171,297.13
17	171,297.13	4,380.00	13,703.77	185,000.90
18	185,000.90	4,380.00	14,800.07	199,800.97
19	199,800.97	4,380.00	15,984.08	215,785.05
20	215,785.05	4,380.00	17,262.80	233,047.86
		87,600.00*

Notes:

1. The numbers affixed with * indicates the sum of money that you’ll have to pay for the bank loan. Using a straight forward calculation, the total amount of interest payable to the bank for the next 20 years = total installment – total loan = RM87,600.00 – RM50,000.00 = RM37,600.00 (or RM1,880.00/year); or the annual interest rate = [(RM1,880.00/RM50,000.00) x 100] = 3.76%. Well, it can be considered as low, though… 2. The numbers affixed with ** indicates the year when you can start making money (break-even point/pay back period), i.e. let say in the first quarter of the 8th year. This is where the amount of money generated will surpass the total amount of loan repayment (RM87,600.00). 3. The income (profit) to be made = RM233,047.86 – RM87,600.00 = RM145,447.86 4. Compare the difference in the amount of annual dividend to be gained with Table 3.

Is it sounds bombastic and fun-tastic, Mr. & Ms. Lobak Merahs?! Oh yes… Well, there’s no need for me to beat around the bush again, as you can evaluate the pros and cons about this ASB Investment Loan. In fact, the figures will tell you something, what!? So… easy-easy, just drop by at any local commercial bank (of your preferred choice) that offered ASB Investment Loan and talk to the investment officer in-charge (or Consumer Sales Officer) for more details, lah… And DON’T FORGET to bring along photostated copies of your N.R.I.C., the 3-month pay slips and ASB Passbook (if any). Scanned copies are optional if you are communicating with the bank officer in-charge through e-mailing – just like myself, as I live and work in a remote area – deep in the jungle in the middle of Sarawak!

There’s an infamous saying, “Biar gaya hidup nampak selekeh, tapi duit simpan dalam bank mesti mao ada lebeh…” I shared my vision and mission with my friends and they are interested to join in the band wagon. A RM10K loan for investment seems fine for a start-up venture, especially for those in the lower income group (RM1,000.00 and below). In fact, I have told my colleague that he should go for a RM10K loan for investment – not for himself – but for his first-born son, so that his son would not have financial difficulty to further his studies at any local university in the future. His only reply was “Yes, yes… correct, correct!” Well, I’m not sure whether he would like to apply for ASB Investment Loan to invest or not, as he already been burdened with other loans!

Let me quote in “fast-track” Foochow dialect, “Ke ni kiang chieng, epieng chi ne chieng…“, which can be loosely translated into Chap Ah Pek’s broken Malay as “Lu muang sikit lui apa, tapi lu moleh miking mangiak lui wooo…” or “You spend a little (to invest in a small amount regularly), but then, you’ll reap a big fortune, lah!”. “Sikit-sikit, lama-lama jadi bukit (atau rakit)…” is (modified) Malay saying that could be best described the ASB Investment Loan. The Malay word “rakit“, however, can be perceived as “excessive withdrawal of investment money until it becomes diminish”, lah!

One of my Non-BU.L.L. friends said to me, “Wahlau eh! Ko-at ong-tong lah lu! Ini maciam sinang-sinang lu mikin lui. Kita olang mana lapat, mao ambek itu Amanat Syaham Wawasyan (ASW) pun ko-at sosah. Kita olang tunggu kaunta sana mao tujuh pagi woo (to get and buy the shares)… mikin “queue” pakai nombo, sampai itu nombo lima ahhh, sudah abis jual! Itu kompiute ahhh, sudah tutup!!! Apa maciam mao lapat leh?!” See, how lucky we are, even though we are the second class BU.L.Ls.! 

With the hope of better investment profit in the next 20 years, only then we would have HIGH PURCHASING POWER without returning (or resorting) – regularly - to Wang Mari 555 $ervice$ Enterprise…

From now on, start treating your ASB investment as ONE of your precious money-making businesses!

Well, the final say is yours! So, help spread this good news and happy investing! Till then, bubbye…

With brotherly love,

Note:

Apart from using straight forward calculation, a compound interest formula – [1 + r]ⁿ – can also be used (but very complicated one, lah!), where r = the average point for annual dividend; n = number of years. The following calculations are based on Principal Capital Investment (PCI) of RM50K via ASB Investment Loan with Annual Loan Repayment (ALR) is RM4,380.00.

Given the 8% annual dividend as the average point for 20 years (i.e. r = 0.08), thus the Compound(ed) Interest (CI):

= [1 + r]ⁿ

= [1 + 0.08]²⁰

= [1.08]²⁰

= 4.66

Accumulative Total (AT) for 20 years:

= PCI x CI

= RM50,000.00 x 4.66

= RM233,047.86

Total Loan Repayment (TLR) for 20 years:

= ALR x 20 years

= RM4,380.00 x 20 years

= RM87,600.00 (inclusive of PCI and TPI)

Total Payable Interest (TPI) for 20 years:

= ALR – PCI

= RM87,600.00 – RM50,000.00

= RM37,600.00

Annual Interest (AI):

= TPI / 20 years

= RM37,600.00 / 20 years

= RM1,880.00

Annual Interest Rate (AIR):

= [(AI / PCI)] x 100%

= [(RM1,880.00 / RM50,000.00)] x 100%

= 0.0376 x 100%

= 3.76%

Profit (P) to be made:

= AT – TLR

= RM233,047.86 – RM87,600.00

= RM145,447.86

————————————————————————

Acknowledgements

Yes, yes… correct, correct! I would like to express my gratitude and thanks to my taikors (you know who you are) for their valuable guidance in making this article a success. Thanks are also due to my beloved Amoy for her love and encouragement, lah…

May God bless you all!