Push for affordable housing

JOHN, 25, is a new lawyer with a Kuala Lumpur-based legal firm and earns RM3,200 per month. He plans to get married next year, and has been looking for a “nice tiny apartment” to settle down.

After spending many weekends looking around, John says he and his wife-to-be “fell in love with a cozy little place” in Seri Kembangan – a three-bedroom apartment starting from RM460,000.

All looked set for the couple, until his loan was rejected. He had recently obtained a loan for a new car – as travelling to different states for court hearings was the norm at his firm.

This is compounded by the fact that his fiancé was recently retrenched – so it’s no surprise that money has been tight for the couple.

John says he has the resources for a 10% down payment for the apartment, but his bank is only offering an 80% loan facility.

“Because of our salaries, we were not able to come up with the remaining 10%,” he laments.

John’s situation is familiar – many first-time home buyers are struggling to purchase a home given the high cost of living.

“What would be great is the banks are able to provide a higher financing margin, like 90%,” says John.

The budding lawyer had many discussions with his partner on possible alternatives for the remaining 10% – from borrowing from friends, family or ah long.

Out of reach: The oversupply of properties costing RM1mil and above has forced developers to change their strategies.

 

Developers to ‘bridge’ the gap

For John, the recent announcement by Urban Wellbeing, Housing and Local Government Minister Tan Sri Noh Omar that eligible housing developers could apply for moneylender licences and provide loans of up to 100% to property buyers seem like light at the end of the tunnel.

For someone like John, it could also be light from an oncoming train as the interest rates will be very high, compared with commercial banks housing loan at about 4.5% to 5.5%.

The minister said developers can gain from property sales and profit from end-financing as well, while the country’s pool of potential homeowners will be widened.

The licences will be issued by the ministry under the Moneylenders Act 1951 (Amendment) 2011.

The announcement was met with mixed responses. The National House Buyers Association and some developers likened the situation to a licensed ah long, suggesting that this could lead to developers pricing their products at unsustainable prices, thus accelerating a housing bubble.

At a media briefing on Wednesday on its Property Industry Survey for the first half of 2016, the Real Estate and Housing Developers’ Association Malaysia (Rehda) president Datuk Seri FD Iskandar sought for caution as the move comes with risks.

“There are risks involved as not all developers can do this. There’s no such thing as developers who can finance 100%. Not all developers even have the balance sheet to do the 10% to 15% ‘bridge’.”

He emphasised that there is an urgent need to assist buyers, especially those within the middle-income group - like John.

The problem is that buyers get between 75% and 80% of financing. “That’s the average, we’ve checked. But someone has to come in to provide that remaining 10% to 15%, or bridging financing,” FD Iskandar says.

The Rehda survey was conducted in the first half of this year to assess market performance.

Rejection by banks for end-financing affects properties priced between RM250,000 and RM2.5mil, particularly for properties priced between RM500,000 and RM700,000 (24%). Six per cent of properties RM250,000 and below were affected and for properties RM2.5mil and above, 7%.

Because of the high loan rejection rate, FD Iskandar says lending by developers should be capped at properties below RM500,000 to assist first-time homebuyers and genuine upgraders.

Limiting it at the RM500,000-mark would also mean that the move would not see the entry of speculators which will only result in prices spiking – leaving cash-strapped end-users such as John unable to purchase property.

Following a Cabinet meeting on Wednesday, Noh said in a statement that his ministry had been asked to study the effectiveness of the developers’ money lending policy.

One industry observer says young individuals, like John, tend to look for properties that are beyond their pay-grade and should in fact go for something more affordable.

“Instead of looking for a place that they can afford, they go for something that they can’t. So they’ll end up saving and waiting for that property they’ve had their eye on.

“And by the time they can afford it, the price of that unit would have gone up even more and they still can’t afford to buy it!”

One option is to purchase a low-cost apartment or house, he says.

According to Rehda’s Property Industry Survey, a total of 1,022 units of low-cost units with a built-up area of 650 sq ft priced between RM35,000 and RM42,000 were launched in the first half of this year. None of them were sold. A year ago, 650 units were launched, of which 450 units were sold.

This does not necessarily mean that conditions are so bad that people are just not buying properties, says FD Iskandar.

“People don’t live in low-cost homes because the don’t want to be associated with them. If they can afford it, they would prefer to purchase something bigger,” he says.

Confidence factor

According to Rehda’s survey, property sales performance experienced a significant decrease to 39% in the first half of 2016 compared with 52% a year ago.

A total of 7,172 units were launched in the first half of 2016 compared with 10,829 units a year ago. A total of 2,829 units were sold in the first six months of this year compared with 4,371 units in the previous corresponding period.

Half of the residential units launched were priced below RM500,000. Serviced apartments showed a year-on-year increase in sales, rising to 267 units in the first half of 2016 compared with 100 units in the previous corresponding period.

Sales of bungalows and garden villas also recorded a significant increase, with 194 units sold in the first half of 2016 compared with just nine units in the first half of 2015.

The first half of this year also saw significantly more launches of bungalows and garden villas at 361 units compared with just 24 units in the previous corresponding period.

All states were retaining their prices except for Malacca, FD Iskandar says. The “unsold” situation was still manageable despite the decreased in sales performance.

Two- to three-storey landed units have taken over apartments in terms of launches. He says while condominiums and apartments are still available, their take-up rates have dropped.

“The days where people used to queue up are over. That’s not to say that those times will not happen again. The property sector is cyclical. The confidence level is not there.”

FD Iskandar says consumer confidence is influenced by what people see or don’t see. The sight of cranes and workers at construction gives confidence that the sector is doing well.

“What we don’t see, we don’t feel. (The scene of) construction cranes is an indicator that the economy is thriving. But because we don’t see this, it affects confidence.”

With confidence affected and potential buyers such as John having financing problems, Rehda reveals that first time buyers had dropped by 13% during their period surveyed.

First time buyers accounted for 34% of the buyers’ profile compared with 47% in the second half of 2015.

The number of upgraders however increased to 45% from 39%, while the level of investors grew to 18% from 13%. Buyers comprising companies meanwhile grew marginally to 4% from 1%.

Not all gloom and doom

This does not mean people don’t have money, says FD Iskandar.

“If you look at our gross domestic product (GDP), at 4% in the second quarter, it’s still healthy,” he says.

Malaysia’s economic growth had slowed to its slowest in seven years at 4% during the April-June quarter of 2016 from 4.2% in the preceding quarter.

According to Bank Negara, GDP growth in the second quarter was weighed down by the continued decline in net exports and a significant drawdown in stocks. Stronger expansion in domestic consumption growth was the only saving grace for the country’s economy.

FD Iskandar says people are just not spending, especially on houses which are big-ticket items.

But all is not doom and gloom, he says. Sales of properties below RM200,000 grew nearly 2½ times in the first half of 2016, accounting for 14% of total sales compared with just 6% in the previous corresponding period.

A members survey shows that 21% is optimistic about the sectorial outlook for the first half of 2017 while 11% are optimistic about the second half of this year.

“There is a lot of hope that the property market and economy will be better next year,” says FD Iskandar, adding that many developers are using various measures to boost sales.

“These include creative marketing strategies comprising freebies, aggressive participation in exhibitions, review of selling prices and easier financing or payment schemes.”

At the Asian Strategy and Leadership Institute summit in early September, Sunway REIT Management Sdn Bhd’s chief executive officer Datuk Jeffrey Ng Tiong Lip says the current slow market was short-term pain but long-term gain as prices consolidate. 

He expects a recovery in the 2017/2018 period.

“We have to look at national and global macro economy,” he says. Property consultants Savills Malaysia managing director Allan Soo expects a 2019 recovery while Jones Lang Wootton executive director Malathi Thevendren prefers not to put a time line to it. 

Whatever state the sector may be in, FD Iskandar says that there will be demand for housing as Greater Kuala Lumpur population expands from the current seven million to 10 million. There will be a need for an average of 200,000 new units from this year through 2020. “We need about 200,000 new houses per year. Last year, there were only 80,000 units,” he says.

source:  http://www.thestar.com.my/business/business-news/2016/09/17/push-for-affordable-housing/

RE: Malaysia vs Germany

Hey guys!!

So we always seem to want to explore and learn about different types of cultures right?
I mean, how about the drinking culture that goes "ole ole!" when a  beer is raised? Sounds October fest enough to you?

Well today I have something interesting.

Lets compare between Penang and Germany is the terms of "Working style"

Here is an article to brighten up your eyes...err...work; haha!

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Why Germans Work Fewer Hours But Produce More: A Study In Culture

When many Americans think of Germany, images of WWII soldiers and Hitler often come to mind. But what many people don’t realize is that Germany is the industrial powerhouse of Europe, and is a leading manufacturer of goods for export to developing Asian nations. We don’t hear about the superiority of German engineering in Volkswagen commercials for nothing!
The economic engine of the EU, Germany single-handedly saved the Eurozone from collapse in 2012. At the same time, German workers enjoy unparalleled worker protections and shorter working hours than most of their global counterparts. How can a country that works an average of 35 hours per week (with an average 24 paid vacation days to boot) maintain such a high level of productivity?

Working Hours Mean Working Hours

In German business culture, when an employee is at work, they should not be doing anything other than their work. Facebook, office gossip with co-workers, trolling Reddit for hours, and pulling up a fake spreadsheet when your boss walks by are socially unacceptable behaviors. Obviously, in the United States these behaviors are frowned up on by management. But in Germany, there is zero tolerance among peers for such frivolous activities.
In the BBC documentary “Make Me A German“,  a young German woman explained her culture shock while on a working exchange to the UK.

“I was in England for an exchange… I was in the office and the people are talking all the time about their private things… ‘What’s the plan for tonight?’, and all the time drinking coffee…”

She was quite surprised by the casual nature of British workers. Upon further discussion, the Germans reveal that Facebook is not allowed in the office whatsoever, and no private email is permitted.

Goal-Oriented, Direct Communication Is Valued

German business culture is one of intense focus and direct communication. While Americans tend to value small talk and maintaining an upbeat atmosphere, Germans rarely beat around the bush. German workers will directly speak to a manager about performance reviews, launch into a business meeting without any ‘icebreakers’, and use commanding language without softening the directives with polite phrases.Whereas an American would say, “It would be great if you could get this to me by 3pm,” a German would say, “I need this by 3pm”.
When a German is at work, they are focused and diligent, which in turn leads to higher productivity in a shorter period of time.

Germans Have a Life Outside Work

Germans work hard and play hard. Since the working day is focused on delivering efficient productivity, the off hours are truly off hours. Because of the focused atmosphere and formal environment of German businesses, employees don’t necessarily hang out together after work. Germans generally value a separation between private life and working life.
The German government is currently considering a ban on work-related emails after 6pm, to counter the accessibility that smartphones and constant connectivity give employers to their employees. Can you imagine President Obama enacting such a policy in the United States?
To occupy their plentiful Freizeit, most Germans are involved in Verein (clubs); regularly meeting others with shared interests in their community. Common interests in Germany include Sportvereine (sports clubs), Gesangvereine (choirs or singing clubs), Musikvereine (music clubs), Wandervereine (hiking clubs), Tierzuchtvereine (animal breeding clubs – generally rabbits/pigeons) and collectors’ clubs of all stripes. Even the smallest village in Germany will have several active Vereinen to accommodate residents’ interests. Rather than settling in for a night of TV after work, most Germans socialize with others in their community and cultivate themselves as people.
Germans also enjoy a high number of paid vacation days, with many salaried employees receiving 25-30 paid days (the law requires 20). Extended holidays mean families can enjoy up to a month together, renting an apartment by the seaside or taking a long trip to a new, exciting city.

Business Respects Parenthood

Germany’s system of Elternzeit (“parent time” or parental leave) is the stuff of fantasy for most working Americans. The United States does not currently have laws requiring maternity leave, while Germany has some of the most extensive parental protection policies in the developed world. The downside of these maternity leave benefits is that employers may avoid hiring women (with the fear that they will take advantage of the extensive benefits), and German boardrooms are consistently male-dominated at a higher rate than other developed nations, although the government is working to eradicate this trend. The financial benefits of staying home (from both Elternzeit and Elterngeld or parents’ money programs) are often too good to pass up for German mothers, and can lead to stagnant or non-existent careers.
Since “at will” employment does not exist in Germany, all employees have contracts with their employer. Parents who have been gainfully employed for the previous 12 months are eligible for Elternzeit benefits, which include up to three years of unpaid leave with a “sleeping” contract. The employee is eligible to work part-time up to 30 hours while on leave, and must be offered full-time employment at the conclusion of the parental leave. Parents may also choose to postpone up to one year of their leave until the child’s 8th birthday. Either parent is eligible for parental leave, and many couples make the choice based on financial considerations.
In addition to the preservation of the employee’s contract, the state will pay up 67% of the employee’s salary (with a cap of 1800 Euros per month) for 14 months. Parents may split the 14 months however they choose. These benefits apply equally to same-sex couples.
Have you picked your jaw up off the floor yet?

Put Some German In Your Office

The German work culture is very different from the average American office, but there are certainly lessons to be learned from our German counterparts. The diligent focus Germans bring to their working life is to be admired. Separating work from play can help us lead a more balanced life; putting the phone down after hours gives us a mental break from stressing about work, and we can return to the office refreshed in the morning. When it’s time to get something done, closing Facebook and turning off push notifications helps keep our minds quiet and the flow steady. Direct conversation can lead to increased efficiency, and more clarity of communication among team members.
Americans often equate longer hours with increased production and superior work ethic, but examining the German model makes one wonder: When it comes to time at work, maybe less really is more!

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Wow, what a read right?
So after reading this...what do you think of your own working style now?
Please share below :)

source

RE: Fear can paralyze you & how to come out of it

So guess what? 
The biggest obstacle in our damn hearts (I use the word "damn" because to me, sometimes i'm so frustrated with myself for not being courageous enough and this, mind you -is a personal opinion) is FEAR

So here is an article which I came across online and I wanted to share it to remind mainly myself on:

Don’t let fear paralyze you

One of the biggest obstacles in becoming an entrepreneur is fear. Think you are not afraid? Do you keep searching for the right opportunity but just can’t find the perfect deal? That’s fear. Your aversion to risk keeps you in constant analysis and research. This is commonly referred to as analysis paralysis. When this happens, you may end up doing nothing. Don’t let fear or perfection paralyze you.

Matt Clark, our featured entrepreneur guest these last few blogs, has this to say about perfection:

When trying to develop the “entrepreneur mindset” you must stop trying to be perfect. Frequently, if you haven’t achieved a goal it’s because you’re trying to do the perfect action or take the perfect path to achieving that goal.

The problem with this is that you don’t know what the perfect path is or else you would have already taken it. Being perfect leads to the perfect way to fail… doing nothing. The only way to make sure that you get anything done is by not trying to be perfect. Instead focus on taking action. Take that leap of faith, or take a lot of little hops of faith.

Don’t reflect too much on whether what you’re doing is perfect. If you experience a setback, the fastest way to get back on your feet emotionally is to take more action.

When you start taking action, and you stop reflecting on whether that action is perfect, you stop reflecting on your current situation. In order to take that new action, you actually have to focus on it, which means that your focus is not on the negatives of the current situation or how much stuff you have that you don’t like or don’t want. Your focus is on actually doing those new, positive action items.

Matt is right. Perfection is the enemy of motion. 

Perfection stops entrepreneurship. That is not to say there is no need for setting high standards and going out and achieving them. What we are saying is that too much focus on being perfect leads to inaction and focusing on the wrong things. Too much focus on perfection is usually a subconscious focus born out of fear.

You have your left brain—the logical, analytical, practical side of your world – which is usually where the need to be perfect lives. And you have your right brain—the creative, innovative, intuitive part of your world. And then you have the physical, the spiritual, and everything in between. Rising to meet your financial dreams takes all of it. It takes all of you. Just be careful not to let the desire for perfection ruin your dream of being an entrepreneur.

Source

RE: 3 keys for an entrepreneur just starting out

Hey,
any richdad readers out there? I'm sure all, well maybe not ALL, NUT most of us want out of the rat race right?
So, we think of being an entrepreneur just to start the business and be on the way to owning those BMW's, Big houses with pools, travel the world and wake up at whatever time we want.
Now, hows that for a "life"?
Just to post a photo on social media (facebook, instagram) and say to the world "I've made it"! Proud and oh, so very loud! 

But is it easy to be a millionaire? This article by Robert Kiyosaki at his richdad website strikes a very good point here. Here he talks about a young adult that hasn't even reach his 30's yet and had achieve what I would like to personally call the "million dollar dream" 

Here is the article, a certain good read for start ups and budding entrepreneurs!: 
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3 keys for an entrepreneur just starting out

Posted on: Monday, September 08, 2014Written by: Robert Kiyosaki

I recently spoke at a large event in Las Vegas. After the event I met a young man named Matt Clark. Matt has built two multi-million dollar companies from scratch and he is not even thirty yet. I was so impressed with his success at such a young age I wanted to sit down and talk with him. I was not financially free until my 40’s and that was with the teachings of rich dad. Had business changed at all from my day as a start-up?
Matt attended one of the top entrepreneur colleges. When I was young there was no such thing. The university taught Matt about customer service, brand-building, operations, finance, accounting, marketing, etc. But Matt said that’s not really where he learned the most. The best education he received was by actually going out there and just doing it. Matt’s best teacher was experience. That hasn’t changed since my day. Nothing teaches better than going out there and just doing it.
I asked Matt what advise he would give to an entrepreneur just starting out. He said that after building and starting two multi-million dollar companies and talking with lots of very successful entrepreneurs along the way, there are three fundamentals that, if any entrepreneur implements into his or her business, will increase the likelihood of creating a fun, profitable business immeasurably:

1. High Margins
2. Recurring Revenue
3. Measurement

High Margins

For a successful business, not one in which you’re scraping by, you should shoot for a 500% or more markup on the products or services you sell. Matt struggled for many, many months operating a business with only 30-40% profit margin. It wasn’t until he started selling his own brand of private-labeled products with a 600% margin, that he really began to experience the level of profitability a small business needs to survive.

Recurring Revenue

Matt’s second fundamental is recurring revenue. This is one of those business mindsets that become more and more powerful with time. Recurring revenue can be a subscription model business or a business that that sells an add-on product. Matt uses the example of the Keurig coffee brewer and the little K-cups you HAVE to buy each and every time you want to use the machine.
If you implement a recurring revenue component right now into your business, you’re only going to get those same people re-billing next month – nice, but that’s not the big payoff. But, if you keep it up, continually adding more and more recurring customers each and every month, 6 months, 1 year, 2 years down the road, you’ll have more than your company is making now on AUTO-PAY.
Matt is right. The recurring model does not make you an overnight success but if you keep at it, it can be very profitable. I’ve found the key to recurring revenue is quality. You are only as good as your last customer experience. Rich Dad just started our Insiders subscription model. I know that if I do not deliver quality lessons and insights ever week the Insiders members will stop paying. My team’s job and my job is to keep delivering quality.

Measurement

Lastly, measurement is a MUST for any business of any size. For any business, online or offline, if you’re spending money on advertising, your business will never experience the gigantic leaps in growth a profitable advertising campaign can produce if you are not measuring.
What Matt calls measuring I call feedback. Feedback comes through results, through listening to customers and through the numbers you get when you measure. Being in business is not a hobby where you do what makes you feel good. You need to get the numbers, know how to read the numbers and adjust based on what the numbers are telling you.
I asked Matt about the importance of your businesses’ mission. He looked at me with a smirk and said, “that’s a given.” I knew I liked this kid.

source

RE: Water shortage puts private projects in jeopardy

So, we have been hearing about the recent news which is quite worrisome - that there will be a season of drought coming soon

While Penang has been blessed with Rain this August, else where in Malaysia there has been some scarcity of rain, thus water levels at containment area are seen to be dropping past "Safe" levels very quickly and the effects are truly devastating.

How does water affect real estate project development?

Water shortage puts private projects in jeopardy

PETALING JAYA, Aug 15 — More than 800 development projects in the Klang Valley are being jeopardised by the water issue in Selangor, National Water Services Commission (SPAN) revealed yesterday.

Sungai Selangor dam – Picture by Zuraneeza Zulkifli

Its executive director, Mohd Ridhuan Ismail, said these private sector projects were being reviewed by a special committee comprising the state government and the water companies.

The housing, factory and commercial projects would be individually reviewed by the committee with special attention given to smaller projects that had been given prior approval.

“The projects suffered delays or failed to get approval due to the water shortage. The reason why the developments were not approved was because it was just impossible to do so. At present, there is no water for the reserve margin required for every project,” he said.

Asked if this meant the state’s current water supply could deplete if all the projects are carried out, Mohd Ridhuan said “yes”.

However, he could not provide the total value of the projects affected.
Cloud-seeding operations are being conducted over the water catchment areas across Selangor every day to raise the water levels at the dams.

Meteorological Department (MET) deputy director-general Alui Bahari said a team comprising officers from the department and members of the Royal Malaysian Air Force would begin the day with a briefing session before heading out to fly over the dams.

“Within two to three hours, the plane would have flown over two or three areas, and the operation will be complete,” he said.

Alui said the department would then, through the use of radar technology, monitor cloud formation activity to gauge their success rate as well as for analysis purposes.

“When we are very successful, a lot of rain will fall on the catchment areas,” he said.

The department has forecast isolated storms and rain throughout the weekend in the Klang Valley, which Alui attributed to the monsoon season.

As of 8am yesterday, the water level at the Sungai Selangor dam remained at 32.10 per cent and recorded a total of 19.01mm rainfall from the day before.

- The Malay Mail

RE: A tax guide in Malaysia

So how about a good guide to paying income tax in Malaysia?
This is good article that I have found for all newbies, like me!

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Whenever the tax season rolls around (that’s 1st March to 30th April), there is inevitably a sense of worry amongst the public because there are many financial, technical and even legal considerations to be taken into account when filing in at Lembaga Hasil Dalam Negeri (LHDN or Hasil) or online.

One of our most popular guides on this site last year, the Malaysia Personal Income Tax Guide 2013 – Rates, Exemptions, Rebates is now updated for this year.

This guide was written for the January – December 2013 tax year, but we will be sure to update this whenever the Government decides to make any changes throughout 2014. Remember that you file in March/April 2014 for the 2013 calendar year of income and expenses.



Malaysia Personal Income Tax Rates 2014
Two key things to remember:
Tax rates are Progressive, so you only pay the higher rate on the amount above the rate (i.e. you will never have less “net income after tax” by earning more!).
Tax rates are on Chargeable Income, not salary or total income. Chargeable income is calculated after tax exemptions and tax reliefs (more below).

First off, we start with the table for personal income tax rates in Malaysia for the Assessment Year 2013, so everyone would be able to cross-check the tax bracket and the amount of tax needed to pay.

Chargeable Income	Tax Rate (2013 and 2014)	Cumulative Tax	Tax Rates (2015 - )	Cumulative Tax	Saving
From RM1 - RM5,000	0%	RM0	0%	RM0	-
From RM5,001 - RM20,000	2%	RM300 (RM0 after RM400 rebate)	1%	RM150 (RM0 after RM400 rebate)	-
From RM20,001 - RM35,000	6%	RM1,200 (RM800 after RM400 rebate)	5%	RM900 (RM500 after RM400 rebate)	RM300
From RM35,001 - RM50,000	11%	RM2,850	10%	RM2,400	RM450
From RM50,001 - RM70,000	19%	RM6,650	16%	RM5,600	RM1,050
From RM70,001 - RM100,000	24%	RM13,850	21%	RM11,900	RM1,950
From RM100,001 - RM250,000	26%	RM52,850	24%	RM47,900	RM4,950
From RM250,001 - RM400,000	26%	RM91,850	24.5%	RM84,650	RM7,200
RM400,001 and Above	26%		25%

Budget 2014 update: 1-3% reduction in tax rates but only after 2015!

Many would have heard about the announcement in the Malaysia Budget 2014 (on 25th October 2013), where personal income tax rates are being reduced across the board by 1-3% for the assessment year 2015 (filing in March/April 2016). As it doesn’t affect Assessment Year 2013 (or even 2014) tax returns, we’ve put it in this accordion, but we’ll come out with a full guide once its closer to the date.


Chargeable IncomeTax Rate (2013 and 2014)Cumulative TaxTax Rates (2015 - )Cumulative TaxSaving
From RM1 - RM5,000 0% RM0 0% RM0 -
From RM5,001 - RM20,000 2% RM300 (RM0 after RM400 rebate) 1% RM150 (RM0 after RM400 rebate) -
From RM20,001 - RM35,000 6% RM1,200 (RM800 after RM400 rebate) 5% RM900 (RM500 after RM400 rebate) RM300
From RM35,001 - RM50,000 11% RM2,850 10% RM2,400 RM450
From RM50,001 - RM70,000 19% RM6,650 16% RM5,600 RM1,050
From RM70,001 - RM100,000 24% RM13,850 21% RM11,900 RM1,950
From RM100,001 - RM250,000 26% RM52,850 24% RM47,900 RM4,950
From RM250,001 - RM400,000 26% RM91,850 24.5% RM84,650 RM7,200
RM400,001 and Above 26%
25%



The SaveMoney Malaysia Income Tax Calculator 2014

Our very nerdy web team has created a simple calculator (Android and Online App, iOS app coming soon!) which helps you calculate your tax based on how much you earn (or hope to earn!). Many people may be paying the wrong amount of tax!
Malaysia Personal Income Tax Calculator 2013 (Filing in March / April 2014)

For those who prefer worksheets, you can also download the Excel version here.
How Much Do I Have To Earn Before Paying Income Tax?

For most residents of Malaysia, the key figure to take note of is about “RM36,704 per year (about RM3,060 per month)” which is inclusive of all benefits, allowances, bonuses, overtime and commissions. If you’re earning anywhere below that figure, then there’s no need for you to open up a file for tax to be deducted from your income (while the con is that you’re not earning as much as you’d like, the pro is that there’s less hassle from a tax perspective!).

How did we determine that any income below RM36,704 (about RM3,060 per month) is not taxable? Take a look at our quick guide to the tax cut-off point for Malaysia below.

However, if you do earn above that, you need to have a tax file opened with your income tax automatically deducted from your income (welcome to the world of big money!).

Some extra notes about income tax that you may find interesting:

1) For non-residents of Malaysia (people who have been living in the country for less than 182 days per year), the tax rate has been set at 26% on all the income that has been earned in Malaysia. regardless of your citizenship or nationality. However, there are some exceptions to the matter. Certain professions such as public entertainers (15%) as well as those who receive payments for services in connection with the use of property or installation, payments for technical advice and rent (10%) are taxed differently.

2) You may still be overpaying or underpaying on your tax, even if you are a salaried worker or civil servant under a Potongan Cukai Bulanan (PCB), a Monthly / Schedular Tax Deduction (MTD) system or if you are self-employed / own your own business.
What is Chargeable Income in Malaysia?

As mentioned before, the tax rates above are effected on a person’s Chargeable Income (rather than salary or total income, in fact, the amount of the chargeable income is usually much lower). Now I’m sure many of you first-timers may be wondering what your “Chargeable Income” is.

You take the following equation and apply where necessary:
Chargeable Income = Taxable income – Tax exemptions – Tax Reliefs

Check out the example below for a general idea:

You are earning a RM40,000 salary, you have a RM2,000 local bank interest income as well as RM13,000 from property rental income a year. That should bring your chargeable income to RM55,000 correct? Nope, that’s not the way to go about it. Even without taking into account the many tax reliefs available, every taxpayer gets the standard RM9,000 individual tax relief as well as a maximum relief of RM6,000 for EPF contributions. That means your EPF contribution is calculated at 11% of RM40,000, i.e. RM4,400. Also, while “interest” is taxable income (more on this below), all local bank interest income is tax exempted (lucky us!).

Therefore, your Chargeable Income (by applying the aforementioned formula) will actually be:
RM55,000 – RM2,000 – (RM 9,000 + RM4,400) = RM39,600.

And there you have it! A much lower figure than which you initially thought would be the amount!
Taxable Income in Malaysia

Taxable income actually refers to the “base upon which an income tax system imposes tax”. In general, the Lembaga Hasil Dalam Negeri (LHDN) organisation includes all kinds of earnings which the Malaysian taxpayers have to pay for, but which is reduced by expenses and other deductions. Some of them include the following:
1. General Taxable Income

a) Business or Profession
b) Employment
c) Dividends
d) Interest (except bank deposit interest)
e) Discounts
f) Rent
g) Royalties
h) Premiums
i) Pensions
j) Annuities
k) Others
2. Perquisites

Perquisites are taxable benefits that can be converted to cash and are given to an employee from his/her employer.

Examples of which include:
1) Bill Claims


If your employer pays your utility, mobile phone, income tax, road tax or car insurance tax bills for you, then the amounts paid are considered to be perquisites and are taxable.

Example: John’s company pays his RM100 mobile phone bill. Then the amount of RM100 is a perquisite and is taxable
2) Company Credit Card


If your employer provides you with a credit card to make purchases on behalf of the company, but you use that card instead for personal use, then any retail purchases you make including the annual fee of the credit card are considered to be perquisites and are taxable.

Example: Tom uses the company credit card which has an annual fee of RM200, to purchase a flat screen TV worth RM5000 for his home. Then the amount of RM5200 is a perquisite and is taxable.
3) Loan from Company


If your employer provides you with a interest free loan and the source of funds for the loan is derived from extra company funds, then the loan is considered to be a perquisite and is taxable.

Example: Leonard’s boss grants him an interest free loan of RM6000 using extra company funds. Then the amount of RM6000 is a perquisite and is taxable.

Or if your employer provides you with a loan with funds taken from a third party source such as a bank etc. Then the difference in interest paid by the employee and the employer is considered to be a perquisite and is taxable.

Example: Keith’s boss gives him a loan with 4% interest using company funds taken from a local bank. The bank in turn, charged the company 8% interest for the initial loan. If the company paid a total of RM900 of interest payments to the bank while Keith paid a total of RM460 in interest payments to the company. Then the amount of RM900 – RM460 = RM440 is considered to be a perquisite and is taxable.

Or if your employer agrees to waive a loan in exchange for services performed, then the loan amount is a perquisite and is taxable.

Example: Eddie’s boss gives him a study loan of RM30,000 and agrees to waive the loan if he stays and works with the company for a minimum of 36 months. If Eddie successfully completes this agreement and the loan is waived, then the amount of RM30,000 is considered a perquisite and is taxable

4) Sponsored Club Membership


If your employer provides you with an individual club membership (not corporate), then the cost of the membership is considered to be a perquisite and is taxable.

Example: Bruce is provided with an individual country club membership by his company. The annual fees of the membership are RM400. Then the amount of RM400 is a perquisite and is taxable.
5) Sponsored Child Tuition Fees


If your employer pays for your child’s tuition fees, then the amount paid is considered to be a perquisite and is taxable.

Example: Shawn’s company pays for the school fees of his son, Ross. The annual school fees amount to a total of RM10,000. Then the amount of RM10,000 is a perquisite and is taxable.
6) Company Insurance Premiums


If your employer pays for an insurance premium that covers yourself and your immediate family. Then the annual amount of premium paid is considered to be a perquisite and is taxable.

Example: Richard’s company pays for an insurance package that covers himself and his wife and five children. The annual amount of premium paid is RM900. Then the amount of RM900 is a perquisite and is taxable.
7) Personal Driver, Guard or Maid


If your employer allows reimbursements on the salary of personal drivers, guards or maids, then the amount that is reimbursed is considered to be a perquisite and is taxable.

Example: Colin’s company allows him to reimburse 40% of the cost to hire his personal driver, Carlo. Carlo’s annual salary is RM25,000. Then the amount of RM10,000 is a perquisite and is taxable.
8) Special Staff Discounts


If your employer grants special staff discounts for certain products with monetary value such as cars, furniture, electronics etc. Then the amount of discount given is considered to be a perquisite and is taxable.

Example: Nathan’s company, BMW, grants him a special employee discount of 15% if he chooses to buy a BMW. If Nathan buys a BMW worth RM250,000 but only pays RM212,500 due to the 15% discount. Then the discount amount of RM37,500 is considered to be a perquisite and is taxable.
9) Gift Vouchers


If your employer gives you gift vouchers with monetary value during festive seasons such as Chinese New Year or Hari Raya. Then the monetary value of such gift vouchers is considered to be a perquisite and is taxable.

Example: Donald’s company awarded him a RM100 Tesco voucher during Chinese New Year. He subsequently used that voucher to pick up groceries for his family. The amount of RM100 is considered to be a perquisite and is taxable.


3. Benefits in Kind (BIK)


Benefits in Kind (BIK) are taxable benefits that cannot be converted to cash and are given to an employee from his/her employer. Since Benefits in Kind do not have a direct monetary value, there are two ways to determine the value of a BIK, the formula method or the prescribed value method. Examples of Benefits in Kind include company provided automobiles, lodging and household furnishing & electronics.

Formula Method:
Value of asset = Annual Value of Benefit
Life span of asset

Prescribed Value Method:
Assigns a predetermined value from a list sorted by classification of asset.
Example: Company Automobile


If your employer provides you with an automobile to use on the job and privately, then the asset is considered to a benefit in kind and is taxable by the formula method. Any petrol costs and toll bridge costs which are subsidized by the employer are included in the total taxable amount as well.

Example: Christopher’s company provides him with a car worth RM81,000 to use to get to work and travel around in his spare time. He passes by 1 toll bridge on his way to work which charges RM1.50. Any toll payments he makes are subsidized by his employer. In addition, his petrol costs are subsidized by his employer as well. In 2013, he made a total of RM1,800 in toll payments and RM3,000 in petrol payments. For cars, the prescribed average lifespan is set at a fixed 8 years.

Formula Method:
81,000 X 80% (20% abatement represents the value of the car when returned to the employer)
8

= RM8,100 + RM1,800 (toll payments) +RM3,000 (petrol payments) = RM12,900

Prescribed Value Method:



Cost of Automobile (RM) Annual Prescribed Benefit of Automobile (RM)Annual Prescribed Benefit of Petrol (RM)
Up to 50,000 1,200 600
50,001 - 75,000 2,400 900
75,001 - 100,000 3,600 1,200
100,001 - 150,000 5,000 1,500
150,001 - 200,000 7,000 1,800
200,001 - 250,000 9,000 2,100
250,001 - 350,000 15,000 2,400
350,001 - 500,000 21,250 2,700
500,001 and Above 25,000 3,000
Under the prescibed value method, since the value of the car falls between RM75,001 and RM100,000, then the amount taxable is RM3,600. In addition, his petrol costs are also set at a predetermined RM1,200.

Total Cost:
RM3,600 + RM1,200 + RM1,800 (toll payments) = RM6,600


Tax Exemptions on Income in Malaysia



Tax exemptions in Malaysia come in many forms, and can be defined as “a personal allowance or specific monetary exemption which may be claimed by an individual to reduce taxable income”.


Generally speaking, it means they are income items which can be omitted from (we refrain from using the word deductions here, because tax reliefs are also ‘deducted’ from your taxable income) the individual’s paycheck. Below you will find a full list of those items along with their respective descriptions, so that you will get a general idea of what to expect:

1) Leave Passage


Leave passage within Malaysia not exceeding three times in a year and one leave passage outside Malaysia not exceeding RM3,000.
2) Medical and dental benefit


With effect from the year of assessment 2008, medical benefits exempted from tax is expanded to include maternity expenses and traditional medicine like ayurvedic and acupuncture without limit.
3) Retirement gratuity


The full amount of gratuity received by an employee on retirement from employment is exempt if:

i. The Director General of Inland Revenue is satisfied that the retirement is due to ill health;

ii. Retirement on or after reaching the age of 55 years/compulsory age of retirement and the individual has worked 10 years continuously with the same employer or companies within the same group;

iii. The retirement takes place on reaching the compulsory age of retirement pursuant to a contract of employment or collective agreement at the age of 50 but before 55 and that employment has lasted for 10 years with the same employer or with companies in the same group.
4) Gratuity paid out of public funds


Gratuity paid out of public funds on retirement from an employment under any written law.
5) Gratuity paid to a contract officer


Gratuity paid out of public funds to a contract officer on termination of a contract of employment regardless of whether the contract is renewed or not.
6) Compensation for loss of employment


This is payment made by an employer to his employee as compensation for loss of employment either before or after the date of termination.

This compensation is exempted from tax. If compensation received is due to ill health. Compensation received in other cases:

i. Termination before 1st July 2008 – exemption of RM6,000 for every completed year of service with the same employer or with companies in the same group.

ii. Termination on or after 1st July 2008 – exemption of RM10,000 for every completed year of service with the same employer or with companies in the same group

Compensation received by a director (not service director) of a Control Company is fully taxable.
7) Pensions


Pensions received by an individual are exempt under the following conditions:

i. He retires at the age of 55 or at the compulsory age of retirement under any written law; or

ii. If the retirement is due to ill health and the pension is received from the government or from an approved pension scheme.

For an employee in the public sector who elects for optional retirement, his pension will be taxed until he attains the age of 55 or the compulsory age of retirement under any written law. Where an individual receives more than one pension, the exemption is restricted to the highest pension received.
8) Death gratuities


Monies received as death gratuity is fully exempted from income tax.
9) Scholarships


Any monies paid by way of scholarship to an individual whether or not in connection with an employment of that individual is exempted from income tax.
10) Cultural performances


Money received under this category is exempted from tax on condition it is approved by the Minister.
11) Interest


Income in respect of interest received by individuals resident in Malaysia from money deposited with the following institutions is tax exempt with effect from 30 August 2008:

i. A bank or a finance company licensed or deemed to be licensed under the Banking and Financial Institutions Act 1989;

ii. A bank licensed under the Islamic Banking Act 1983;

iii. A development financial institution prescribed under the Development Financial Institutions Act 2002;

iv. The Lembaga Tabung Haji established under the Tabung Haji Act 1995;

v. The Malaysia Building Society Berhad incorporated under the Companies Act 1965;

vi. The Borneo Housing Finance Berhad incorporated under the Companies Act 1965.
12) Dividend


The following dividends are exempt from tax:

i. Dividends received from exempt accounts of companies.

ii. Dividends received from co-operative societies.

iii. Dividends received from a unit trust approved by the Minister of Finance such as Amanah Saham Bumiputra.

iv. Dividends received from a unit trust approved by the Minister of Finance where 90% or more of the investment is in government securities.
13) Royalty


Royalties received in respect of the use of copyrights/patents are taxable if they exceed the following exemption limits:



Types of RoyaltyExemption (RM)
Publication of artistic works / recording discs / tapes 10,000
Translation of books / literary works 12,000
Publication of literary works / original paintings / musical compositions 20,000


However, the exemption stated above does not apply if the payment received forms part of his emoluments in the exercise of the individual’s official duties.
14) Income Remitted from Outside Malaysia


With effect from the year of assessment 2004, income derived from outside Malaysia and received in Malaysia by a resident individual is exempted from tax.
15) Fees or Honorarium for Expert Services


With effect from the year of assessment 2004, fees or honorarium received by an individual in respect of services provided for purposes of validation, moderation or accreditation of franchised education programmes in higher educational institutions is exempted.

The services provided by an individual concerned have to be verified and acknowledged by the Malaysian Qualifications Agency (MQA). However, the exemption does not apply if the payment received forms part of his emoluments in the exercise of his official duties.
16) Income Derived from Research Findings


With effect from the year of assessment 2004, income received by an individual from the commercialization of a scientific research finding is given tax exemption of 50% on the statutory income in the basis year for a year of assessment for 5 years from the date the payment is made.

The individual scientist who received the said payment must be a citizen and a resident in Malaysia. The commercialized research finding must be verified by the Ministry of Science, Technology and Environment.
17) Company Special Service Awards


With effect from the 2007 year of assessment, a tax exemption of up to RM1,000 has been allocated for company special service cash or prize awards
18) Travelling Allowances


Travelling allowances of up to RM6,000 for petrol and tolls are granted a tax exemption if the vehicle used is not under ownership of the company.


19) Benefits in Kind Exemptions


Certain Benefits in Kind pertaining to consumable services are not eligible for taxation.

Consumable Services
Example: Dental care, child care benefits, food & drinks, special arranged transportation between pick-up points and special discounts for consumable products that cannot be resold (such as food or toiletries etc.)


What Are Tax Reliefs?

What about a tax relief? It is defined as “an amount that can be deducted from a person’s annual income to reduce the amount on which tax is paid”.

To describe it in a more clear and concise manner, it is actually a way for you to lessen your chargeable income.

Let’s say you took home a monthly paycheck of RM40,000 from your company in 2013 and if there were no tax exemptions or reliefs, your chargeable income will remain the same and your tax for the year would have been in the 11% bracket.

Now say the Government decides that all Residents of Malaysia should get a personal tax relief of up to RM9,000 per year. Your chargeable income will now be RM31,000 which means that your tax would be in the 6% bracket.

These are the following reliefs available for Malaysian Residents:

Included in MTD systemRM
Self and Dependent 9,000
Life insurance and EPF 6,000
Husband/Wife/Alimony Payments 3,000
Ordinary Child relief (per child) 1,000
Total > 15,000


Not usually included in MTD / PCB system but relevant to most taxpayersRM
Interest expended in 2013 to finance purchase of residential property dated 2010 (but interest payments starting in 2011 only) 10,000
Net saving in SSPN's scheme 6,000
Education Fees (Individual) 5,000
Updated: PRS Voluntary Contribution 3,000
Purchase of personal computer (every 3 years) 3,000
Insurance premium for education or medical benefit 3,000
Special relief for tax payers earning an income of up to RM8,000 a month (RM96,000 anually). Only applicable for the 2013 year of assessment. 2,000
Purchase of books, journals, magazines and publications 1,000
Complete medical examination 500
Purchase of sport equipment for sport activities 300
Total 29,300


Not included in MTD system but relevant to certain taxpayersRM
Disabled Individual 6,000
Basic supporting equipment (for disabled self, spouse, child or parent) 5,000
Medical expenses for serious diseases 5,000
Disabled child 5,000
Medical expenses for parents 5,000
Child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities 6,000
Disabled Wife / Husband 3,500
Child age 18 years old and above, not married and receiving full-time tertiary education 1,000
Premium on new annuity scheme or additional premium paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1,000 can be claimed together with life insurance premium) 1,000
Total > 35,500

Tax Deductions vs Tax Reliefs

Most of the time people get confused between Tax Deductions and Tax Reliefs, and its easy to see why. They are for the most part the same thing, as they both allow you to reduce your Chargeable Income (that is, before you even start looking at tax rate tables). In fact most people worldwide use both terms interchangeably, and LHDN goes one step further and classifies Tax Deductions as a reduction in your Chargeable Income as a result of Gifts or Donations.

As a rule of thumb, you can deduct up to 7% of your Taxable Income for gifts to charities and institutions which are approved by the government (not all charities are approved, so be sure to find out before you donate away!), unless you are giving to a few selected government-related bodies, where there is less restrictions on the amount deductible from your income.

For example, if you earned RM60,000 this year, and donated RM5,000 to an approved charity, you may deduct RM4,200 (ie. 7% of RM60,000) off your chargeable income, in addition to all those reliefs above.
What are the Tax Rebates in Malaysia for 2014?

Some people will be having the question of how is a tax rebate different from a tax relief? A tax relief is a reduction in your chargeable income (ie. before you calculate tax) whereas a tax rebate is a reduction in your tax expense after you have calculated your tax for the year.

Tax rebates (or also known as “tax refunds” but done automatically rather than actually refunded to you). Simply put, there are income tax rebates for Malaysian taxpaying citizens who are having a chargeable income of less than RM35,000 which is RM400. There is also an additional RM400 rebate for married couples who have a chargeable income of less than RM35,000 per year and are eligible for the RM3,000 wife / husband / alimony relief.

To give a quick calculation example for tax rebates:

Taxable Income: Salary of RM45,000 a year
Chargeable Income: RM45,000 – RM9,000 Personal Relief – RM2,000 One-off 2014 relief – RM4,950 EPF relief = RM29,050.
Tax calculated using Income Tax Tables (without counting any rebates): RM843
Tax Payable: RM843 – RM400 rebate = RM443

In the above example, you were eligible for the RM400 tax rebate because your Chargeable Income was less than RM35,000 (it was RM29,050 in that example).

Another type of tax rebate, but which is only applicable for Muslim citizens, is the zakat / fitrah. Zakat is a compulsory payment for charity and considered to be compulsory as it is one of the five pillars in Islam. It can be calculated via the Muslim taxpayer’s acquired wealth or income. Zakat Fitrah, on the other hand, can be considered to be a small, compulsory levy that is imposed upon Muslim taxpayers only. It used to be calculated in the olden days using a pack of rice grains (one pack is equivalent to approximately 2.7 kg) but in the modern days, it is calculated based on the equivalent price of this pack rice grains. You can read all about Zakat and the various types that exists in our guide Zakat in Islam.
So… why is RM36,704 the cut-off point to pay tax?

Assuming that you made RM36,704 in 2013…
Chargeable Income

Your Chargeable Income = Your taxable income – (Standard RM9,000 individual tax relief + 11% EPF Contribution of your salary + Special tax relief of RM2,000 per month)

which means

Your Chargeable Income = RM36,704 – (RM9,000 + RM4,037 + RM2,000) = RM21,667

Based on the tax rate table above, RM21,667 would be taxed RM300 on the first RM20,000 and RM100 on the remaining RM1,667 which brings it up to about RM400 in tax.
RM400 Rebate

After taking into account the RM400 rebate for those with a chargeable income of RM35,000 or less, you’ll be paying

RM400 – RM400 = RM0 (no tax, yay!)
PCB / MTD System: Has your employer paid too much tax for you?

First off, do you know what the words “PCB / MTD” mean? The words are actually acronyms for “Potongan Cukai Bulanan / Monthly Tax Deductions”.

How this works is that your employer will automatically deduct a certain amount from your salary every month to pay for tax on your behalf, going towards paying your tax for the year. This type of deduction is different from the basic Employees Provident Fund (EPF) and Social Security Organization (SOCSO) monthly deductions.

Therefore, one can sum up that the MTD is calculated from one’s gross salary minus the EPF deductions of up to RM6,000 per year. If you were to take a closer look at the sum of the total MTD for the year, you will realise that the figure will be very close to your actual tax expense for the year, but given that your company has no idea of your additional reliefs other than being married or having children (such as Books, Sporting equipment etc.), they are very likely to have been overpaying for you.

Even without taking into account those extra reliefs, the PCB/MTD schedules aren’t 100% accurate (and typically overpay tax on your behalf), as we will see shortly below:

SalaryGross SalaryMTD SalaryMTD DeductionActual Tax ExpensePaid too much / (little)
Monthly Amount RM3,500 RM3,115 RM34 RM23.55 RM10.45
Total Amount for 2013 RM42,000 RM37,380 RM408 RM282.60 RM125.40

Final Reminder

The 2013 tax assessment year follows the calendar year, so the 2013 tax year is effective from 1st January 2013 to 31st December 2013.

Taxpayers can start submitting their income tax return forms for the year of assessment 2013 through e-filing as well. The due date for the submission of return forms are as follows:

1) Employers (Form E) is 31 March 14
2) Residents and non-residents with non-business income (Form BE and M) is 30 April 14
3) Residents and non-residents with business income (Form B and M) is 30 June 14
4) Partnerships (Form P) is 30 June 14

Finally, do take note that you must keep records for 7 years from the date of filing so don’t throw away any receipts or evidence of tax reliefs, keep them in a file sorted by tax year.
You might also find these interesting:

Everything you want to know about Income Tax, summarised in our Malaysia Income Tax 2014 Infographic.

Have a question you want answered? Take a look at our FAQ: Malaysia Income Tax 2014 guide. This FAQ was designed to give a quick overview of what the SaveMoney.my Community has been asking! Feel free to ask us in the comments section of the guide and we’ll get the answer for you!

Finally, calculate how much tax you have to pay and how you can possibly reduce that sum via relief and rebates. Potentially save RM1,000′s by downloading our SaveMoney Tax Calculator App 2014 today!

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RE: Multiple Income Streams: How They Can Work For You

Let's talk about something interesting...
multiple source of income

Yes all of us want more and more income, I mean - who doesn't right? In fact, the more, the better!

And we spend most of our time thinking about it, especially when we are seemingly stuck at a "crappy" job or even when things are not going our way.

This article gives us good insight on the topic of: why multiple sources of income?

---

For most people, the only income they earn comes from their job. Get up, go to work, come home, and collect their paycheck – and they're perfectly comfortable and believe it is good enough for them.

But then once children come along, when they have to start taking care of ageing parents, medical bills start rolling in with age, they come to one realisation (perhaps a bit too late). Having a job is like putting all their eggs in one basket. All their income is reliant on one job, and if that job goes away, they and their family would be hurting.

The only solution is to create more sources of revenue – streams of income. Even if they weren't as much as a full time job, having income from multiple sources ensures that if something happened to any one (including their job) it would not be nearly as disastrous.

This begs the question: But how can you create more sources of revenue while burdened with debt, holding a full time job, and the needs of a family?

Here's some ideas to help you get started:

1. Start a business on the side.
You could do some freelance work, sell merchandise on eBay, teach classes on a skill you're proficient at, fix computers; it doesn't take much time at all and earns a bit of regular money.

2. Start writing about something you're passionate about.
Start a blog. It could be about cooking or parenting, somewhere to collect your thoughts and experiences. List the "lifehacks" you've discovered, share the knowledge you've accumulated; anything's possible. You won't believe the number of people that will be interested in what you have to say. Once you get it going, you can start earning income from the advertisements. The writing can be done whenever, filling in gaps in your time.

3. Build up a consistent savings fund.
Whatever income you earn, use the income to build up a large long-term emergency fund. While the income stream here is rather small (2-4% interest on several months' salary), the fact that the income is based on your own capital and you don't have to do any additional work for it.

4. Eliminate debt.

5. Look for investments that will earn a better return.

Obviously, these sources all require work, with the exception of the savings fund. These are usually called active income streams. The savings fund, which requires no active work, is a passive income stream. Obviously, passive income streams are better over the long haul because they provide income without additional work contribution. Active income streams generally involve a trade of work for money, which means that your time is consumed. However, passive income streams almost always require some significant money to start with, something many people don't have.

What's the real benefit here?

Why put out a lot of effort for multiple active streams? The reason is the same one you'll find for why you should have a diversified investment portfolio – if one of those streams dries up you're still doing all right because the other ones keep going. And when they're all going, you make significantly more than you spend, so you can pay off debts and eventually build up more sources of passive income.

It all comes back to spending less than you earn; multiple active income streams just ensure that the earnings are pretty stable and that there's a big gap between earnings and spending. Then, when you're debt free, you can start taking those earnings and look for ways to build up passive income through investments.

The first step is to make a serious commitment to spend less than you earn. Without that commitment, none of this will work. Focus on paying down debts with the difference between your earning and your spending.

The next step is to figure out something you're good at. Perhaps you have a knack for cleaning your windows or maybe you know how to arrange furniture so it looks great. Maybe you can write very quickly. Almost any strong trait you have leads directly to some sort of profit-making venture that you can do in your spare time. Spend some time figuring out your talent, then think about how that could make money.

Once you've got something figured out, commit some regular time to it. Give up an hour of television each day to bake bread or matte finish photographs, then find places to sell them. Once you get the kinks of whatever your little business is worked out, it'll become a steady small source of income for you – another income stream.

Then, use that income stream for something financially positive. Don't spend it immediately. Instead, contribute that money to debt repayment or use it to invest in something – stocks or otherwise.

The real goal here is financial independence. By making yourself less dependent on a specific revenue stream (i.e., your primary job), you're giving yourself independence and the flexibility to make choices that you never had before.

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RE: Present pleasures vs future wealth

Now how do we go about with the topic of being rich, wealthy and perhaps famous?
It is such a topic that heats up the desires, passion and dreams when it is spoken about..

Well, how do we plan for what is now and the future then? 
The present pleasures or the future wealth? 
This is a great article to read from!

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One of the best known studies in the history is psychology is Walter Mischel's "Marshmallow Test"

In the 1960s, the Stanford professor, took nursery-school students, put them in a room one-by-one, and gave them a treat (they could choose a cookie, a pretzel stick, or a marshmallow) and the following deal: They could eat the treat right away, or wait 15 minutes until the experimenter returned. If they waited, they would get an extra treat. Tracking the kids over time, Mischel found that the ability to hold out in this seemingly trivial exercise had real and profound consequences. As they matured and became adults, the kids who had shown the ability to wait got better grades, were healthier, enjoyed greater professional success, and proved better at staying in relationships—even decades after they took the test. They were, in short, better at life.

Everyone longs for a lifestyle that is "better". Whether the goal is personal fulfilment, health or wealth, it is this pursuit that drives us. This is never clearer than in building wealth. Unfortunately, we tend to get misled by the myth of that "successful lifestyle" filled with sailboats, European vacations, golf resorts, beachfront condos, cars, branded bags and private jets.

But the reality of building wealth is delayed gratification. Wealth builders live modestly by spending less than they can afford (time, money, energy) so they have more to invest and create greater value in the future. They understand happiness does not result from the "stuff" they have because that would only keep them happy for the short-term rather than fulfilling the deeper cause that drives them to success.

There's nothing wrong with having these things but we have to realise that all of us – no matter how rich we are – have the same limited resources (time, money, energy) that we can use either to enjoy our lifestyle or build wealth. They are competing demands for the same scarce resources – and only one can win the battle.

Every day you make a choice between spending today or wealth for tomorrow.

If you're finding yourself in a losing battle to tame your desires, the good news is delayed gratification can be learned at any age. Here's 3 ways to help you do that:

What's Your Why
It all begins with your reason for wanting wealth. If you "WHY" is only to have a good life, then then spending your money will always be your priority and you will procrastinate on building wealth. If you're living for a cause that is greater than yourself and your desires, then your focus will be on doing whatever it takes to grow your wealth so you have the wherewithal to fulfil if.

Celebrate Small Wins
Build into your wealth plan a series of rewards for accomplishment. When you complete something that needs to be done, like a budget, reward yourself. By creating rewards you are ensuring that you are disciplining yourself to delay gratification until after the task is complete and not before. If you can do this in many areas of your life you will eventually be able to delay gratification.

Find Support
If building wealth was easy then more people would achieve it. Yet, few succeed in their pursuit of financial freedom even though it's not difficult to come up with a reasonable plan to become wealthy. The difference is consistent, persistent, focused action. Life has endless distractions that will sidetrack your plans for wealth. The solution is to create a support system that keeps you focused and on track.

Your family environment, work environment, relationships, financial habits, daily rituals and people you seek advice have to support, reinforce and keep you accountable to your wealth building plans.

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RE: There is NO Freedom in being Rich

I came across a very interesting site when browsing about getting rich and ect..
Here is what we think..we want the cool stuff, luxury and all that so that other people will acknowledge that we are indeed somebody. We want to live the freedom of living life and our lifestyle also becomes the goals of others as a bench mark to reach and to obtain some day soon too..

However...this article kinda turn things around..
check this out..very good read!

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What do you and 99% of the population want most? Most people will say "More money." Specifically, we want to be rich. Who wouldn't? If you're rich, you really don't have much to worry about, except maybe what to do with all that money.

More money means material comforts, and doing what you want when you want without having to answer to anybody; being in charge of your own life. Since this is so obvious… why are we even talking about it?

Because sometimes, the obvious is so obvious that we miss the bigger picture. When we talk about wanting to be rich, what are we really talking about; money or freedom?

There's a pretty big difference between the two, no? Does having more money absolutely mean having more freedom, or security, or even peace of mind? Not necessarily. Being rich certainly provides material convenience, but you and I know there are plenty of rich people out there who are completely miserable. Sometimes they miss the whole point of being rich—i.e. freedom and happiness. Instead, they work even more than some middle class people, who struggle just as hard, because some rich folks think they have to work harder in order to stay rich and "free." Can you believe that?!

So in the end, what are we really after? What do we really want?

What we're really seeking is a feeling that we associate with being rich. The house we want can give us a sense of comfort. The car we want can heighten a feeling of importance. Travel and toys can bring excitement and stave off boredom. But you don't have to wait to be rich in order to have these things or experience the feelings of freedom and happiness.

The goal isn't to get rich in order to be free. Let's turn that around! Get freedom first, and then being rich becomes icing on the cake.

How do we get free now? Financially speaking, you do this by creating passive income vehicles—some to build, some to buy—letting those streams gather momentum over a few years, reaping the rewards, then doing more of this with other passive income structures. This way, you get the material wealth that gives you tangible freedom from having to worry about working—one of the basic goals of our desire to be rich—and if you really know what it is you really want, you get the happiness part of it as well.

Freedom is only as good as the results of your true intentions. In other words, keep the endgame in mind. We're not getting rich to be free. We want to be free and then enjoy the benefits of being rich. This is not something we have to wait for to arrive in the future. There's no freedom in waiting. Freedom starts now.

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Developers in bed with underworld contractors face ban, Penang says

We have all heard rumors of developers dealing with underground thugs in development of real estate. Here is a good article that covers that:

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Developers in bed with underworld contractors face ban, Penang says

Penang has vowed to crack down on any developers found in cahoots with 'gangster contractors' who allegedly intimidate and threaten new home buyers into engaging their services. — Picture by K.E. Ooi

GEORGE TOWN, March 28 — Penang will blacklist any developers found in cahoots with “gangster contractors” who intimidate home buyers into engaging them for renovations.

The state government said it has arranged to meet with the Penang police chief to crack down on the group allegedly intimidating and threatening new home buyers into engaging their services, especially in high rise projects.

“We will not tolerate this. If we find any developer involved in designating these gangster contractors to intimidate and threaten home buyers into booking their renovation services at their projects, we will not hesitate to blacklist the developer,” said Penang Housing state executive councillor Jagdeep Singh Deo.

He told a press conference that he had recently received complaints from home buyers who alleged they were threatened for not engaging the project’s designated contractor to undertake renovation works on their newly completed apartment units.

“They now fear for their safety as they had been threatened,” he said.

This is not the first time such incidents took place, and Jagdeep admitted that it has been going on for years in other residential high rise projects in the state.

Such cases involve “designated” contractors who set up temporary stations at newly completed apartments and allegedly coerce home buyers planning to renovate their units to use their services.

Home buyers who appoint their own contractors will be forced to either pay a “fee” or to buy renovation supplies such as cement and tiles from them.

“I have said this before, there is nothing in the law that requires home buyers to up take up renovation packages if they don’t want to and this most definitely is not in any sales and purchase agreement,” Jagdeep said.

He called on all home buyers who faced similar issues at their apartments to lodge police reports against the errant contractors.

“This is criminal intimidation and harassment. The police can take action against them,” he said.

He said the state will urge the police to act harshly against these contractors while the state will check to ensure the developers are not in cahoots with these contractors.

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