Life expectancy of Malaysians and the thing about not looking at the stars every night – kopiandproperty.com
Personal Finance 101: Life expectancy of Malaysians and the thing about not looking at the stars every night
Property Investment is NOT needed these days… (some experts say)
Let’s get straight to the point. Yes, this is about the articles you read / videos you watched about some personal finance experts telling you that property investment is not necessary, about renting being better than buying, about lots of savings hacks or that investments in stock market being superior to property investment.
First up, the life expectancy for a Malaysian. It’s good news. We are expected to live longer than the 70s or the 80s or even the 90s.
Rental numbers – first 20 years
Secondly, after the life expectancy number, let’s now look at the rental numbers. Since buying is so expensive better rent like what the ‘experts’ say.
First 20 years of renting a room… We assume a room is all one needs… We assume the homeowner is a very nice lady and she did not increase rental for 20 years… We assume the electricity rate stays the same even if the subsidy is now being cut… We assume even after getting a partner or getting married or even after one baby, a room is enough for the first 20 years of working life. As conservative as we could get in terms of calculation.
RM800 (medium room) x 12 (months) x 20 (years) = RM192,000
If one were to rent an apartment instead? Here’s the typical amount:
RM2,000 (medium-end apartment) x 12 (months) x 20 (years) = RM480,000
Above are all the amount one would have to spend and it will be a total loss yeah. The home owner will be happy to receive all these though.
Rental numbers – final 30 years
Third, let’s now look into the next 30 years. This time we assume the person will continue to rent the same apartment and that the rental has increased by a little.
RM2,500 (rental increase a little) x 12 months x 30 years (74 is the typical life-expectancy for a Malaysian) = RM900,000. (I am not sure if anyone of us love to gift RM900,000 to someone, surely not me)
We can earn a lot higher than the rental?
Let’s be direct here. If one is able to earn a much higher salary and the rental becomes just a small part of the monthly salary, then rent all we want yeah. I mean, Elon Musk certainly does not need to buy and property and can rent for 20,000 years or more, maybe. He can even rent one whole hotel if he wants.
So, the decision also depends on how much we could earn, whether we are working or whether we are an entrepreneur. As they say, whether something is expensive or cheap also depends on how much we earn yeah. A RM1,500 handbag can be very expensive or it could be a small change for some people.
What if the business is doing extremely well?
I have many good friends who are business owners. I tell them this fact. “When our business is doing very well and the home owner knows about it, they either increase the rental or they would think how to do the same business in the same unit which we are renting from them.”
This meant that we would need to move to another new premise if we did not agree to the rental increase and once we move, the owner may start the same business in the same unit and some of our customers could be taken over by them. Alternatively, we agree to the rental increase and well, imagine what will happen next year if the owner knows that you will agree to another rental increase since the business is so good.
Now imagine if we own the unit which we are doing business with? Well, first of all, the amount we pay for the property remains the same, we face no pressure from the owner and we also gain from the property appreciation over the years that we own the unit and conduct our business. I think this is a better scenario.
That’s all for the numbers
I may ruffle some feathers here, especially the many ‘amazing’ personal finance experts in the market today. I actually do not mind whatever product or service that you want to share with the world but if any of you are to say foolish things about property investment, then stop telling everyone about your personal finance tips yeah. That RM5 savings hack or even that RM200 savings hack from buying in bulk etc is NOT going to be enough if your reader / follower / supporter do not own a property to their name because they will be poor forever and ever.
Here are some articles about poverty and property and how it is closely related
Property Rights for Poverty Reduction?
Lift poor people out of poverty and own a property
For the government of the day, this is what you MUST DO
It’s not just building affordable homes or even pushing developers to build affordable homes. It is important to ensure those who could not afford these affordable homes also have access to a property so that their monthly rental does not eat into their income and make them poor forever. Lifting people out of poverty has to start from property, actually.
I love to look at the stars but…
Every night, I love to see the stars. I could even appreciate to see the stars for 10 minutes, maybe 20 and be awed by them. However, I do not want to be lying on the road or some park and seeing the stars until I fall asleep every night. I also wish no one has to see the stars every night until the dawn breaks.
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