3 Investing Skills You Must Master & Not Get Cheated

by admin on July 21, 2009 · 12 comments

Global economy starts to show some recovery from the lowest level in Mar 2009. As recovery emerged, the name of investment become increasingly popular lingo among street people. But before you get cheated in any kind of investment, educate yourself by reading this blog post very-very carefully.

Valuation is the Key

Shrewd investors have very fine-skill in valuing investment proposal come to them. They just don’t look at the current price, but how much it can offer in the future. Of course you need to decide some critical economic assumption along the way.

Most of us might think that RM 1.3Mil for 2,500 sq.ft of 2-storey terrace in Mutiara Damansara is so expensive compared to 10,000 sq.ft of 3-storey bungalow in Ulu Yam that cost RM600k.

But the moment you look at 10% potential price appreciation together with 1-3% potential rental income, you will easily find terrace house in Mutiara Damansara possess higher value for money than the Ulu Yam bungalow; which can hardly get 1-2% price appreciation. Btw, asking price is not the same with it current value.

Buy When Others Don’t

Shopping for investment asset in trying times is our expertise. We like it so much because it’s like buying genuine Versace handbag in KLCC for only RM250 with cheque some more.

Other than buying in economic downturn, we also love buying a rundown property (e.g. so buruk that you won’t live in it), depressed asset (e.g. when the owner have problems paying loans or want to move out asap) & seasoned blue-chip (e.g. house in long-time established address). The perfect investment asset would be any combo.

Only recently we managed to secure a property that is 20% cheaper than the transaction recorded in 2007. Moreover, our request for 30%-50% discount for S&P, loan agreement & valuer report was granted too. Very low interest rate is just an icing on the cake. Believe me you won’t get these kinds of discounts in the bull run.

Avoid Free/Cheap Advice

It’s not about you must pay to know something, but don’t expect someone with RM300 per month salary can appreciate the value of condo near KLCC. It’s just like you ask my opinion of paying thousands for Play Stations, I will definitely say ‘membazir’. Unless you ask other game geeks, you’ll certainly get frustrated with me.

Same goes to investment world, ask advice from experienced people only. Sure can get some feedbacks from other corridor talks wherever you want but make sure it doesn’t affect your decision-making. Mass people love to talk about investment even when they know nothing (like me), but taking it seriously can bring damage to you.

Your ability to filter noise & critical info is very important. Do detailed research on your investment and stay firm on your decision. Don’t be deterred with someone out of the league say some inconvenience words like “buat aper beli rumah teres sampai sejuta, membazir je nih” to you; especially your pakciks at kampungs.

Pity them they don’t understand but life as investors has to go on…

I might be missing some more points. If you have one, just drop a comment and share with us LOL.

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