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MILLIONAIRESPLANET EZINE
money . success . freedom
Jan 2005 Issue #29
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Welcome to the latest issue of
"MILLIONAIRESPLANET EZINE"
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IN THIS ISSUE
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1. Feature Article
2. Quote of the Month
3. Your Question Answered
4. Special Offers
5. New Books by Azizi Ali
6. Disclaimers
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1. FEATURE ARTICLE: Property Jumbo Answers (Session 3)
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Since it proved to be a hot thing, I'm answering more
property investment related questions this month.
As usual, the questions are presented the way they came in
- broken English, wrong grammar and all.
Q1: I have benefited a lot from your books. The recent one I
read was "How to Become a Millionaire Landlord". Great stuff
and I was really inspired and get off to the field to find
suitable properties.
I have some liquid money that can be invested into a few of
these types of properties. Also, I am really excited to
read your chapter 18 with respect to tax. In chapter 18,
you mentioned about Section 4A of the Income Tax Act 1967 –
i.e. treating the rental income as a source of business
income, and therefore can deduct any loss (or claim capital
allowance) from my other income sources. Do these other
income sources include salary income.
A1: It used to be. Sadly, the IRB came up with a ruling
recently that rental income qualifying as a business income
is only applicable for business (Bhd or Sdn Bhd), and not
to individuals anymore.
Still, I'd like to make the point of investing to make money.
Never plan to purposely lose money on your investments just
so you can deduct the loss – it's a bad idea.
Always invest to make money. Anything else, including the
tax deductions and breaks are just bonuses. Make the money
first.
Q2: After reading your most recent ezine's feature
section, I have a question for you. You mentioned if the
property that we buy is generating negative cash flow, it is
best to sell off the property. Are you recommending only to
buy property that generates positive cash flow, and not to
buy property for its capital appreciation?
A2: In an ideal world, all our properties should generate
positive cash flow. Firstly, that's how people build wealth.
However, if you can afford the negative cash flow (which can
and may last for years), of course you can invest purely for
capital gains. But obviously you cannot buy too many such
properties, can you? This is why I invest only in
positive cashflow properties. Having one negative cash flow
property (the house that I'm staying in) is plenty.
Q3: I've read most of your e-zines and your articles in
Personal Money column are simply fantastic! And your
books and property seminar which I had the honor to attend
last year was simply amazing. Keep it up!
I would like to ask you a question on renting out a house.
Recently, there is an international company that wants
to rent out my second house. I've just received the CF for
it. The house cost me somewhere in the region of RM250,000
(I bought it with cash). The company offered me a monthly
rental of RM2800 for a fully furnished unit. Assuming I
would put in another RM20,000 in the house, I would have a
gross yield of 12.44% for one year, right?
Another thing is, should be any different in the tenancy
agreement between renting out to individuals vs. renting out
to a company?
A3: 1.Yes, you should certainly rent the house to them.
A 12.44% gross yield is excellent. (For the benefits of our
readers, yield is calculated by dividing the rental over the
price. In this case it's RM 33,600 / [RM 250,000 + RM 20,000]
= 12.44 %.)
2. Normally, there is no difference in the tenancy
agreement. However, the company may want to add additional
clauses (with your permission, of course).
3. Is this international company looking to rent
other properties as well? Ask them to call me!
Q4:I am now 30 years old and working with one of the
commercial banks in Malaysia. As at now I have no saving
from my monthly salary and sometimes it is deficit. This is
because the sum is just enough to pay my debt such as
housing loan, car loan, personal financing and etc. My wife
had bought a house at Serendah, Selangor and we planned to
move there since the prospect to rent the house there is
very low and rent our existing house at Cheras to get
additional income.
My question is which is more profitable to invest whether
I sell my house at Cheras and get the money in bulk or
collect a monthly rental or maybe you have your best opinion
to share.
A4: 1. Move to Serendah
2. Sell the house in Cheras
3. Pay off your debts
4. Stop taking more debts
5. Start saving
6. Build a new happier life
Q5: I have been tried everything how to make money but until
today my way never success. What is your suggestion because
I only earn RM1,000 a month? Do you have any idea to solve my
problem? Please help me regarding this matter. Thank you.
A5: If I tell you to read my books, would you accuse me
of trying to sell you something? If the answer is yes, then
my guess is that you will remain where you are.
If the answer is no, and you are serious about climbing out
of your pot hole, then get the books now!
Q6: I've read your book "Millionaire are from a Different
Planet" and I got to say that book really quizzed my nerves
and made me come back to the real world. Thanks to you.
Only now I realize how ignorant I was with my financial
planning. But then again better late than never, right?
Ok, my problem is, for my age, I'm earning an ok salary plus
part time income. But still end of the month, I'm broke.
After reading your book, I realized my bad debts (car loan)
are outrageously high - close to 40% of my take home salary.
Thus I decided to push off my 2 years old car and resort to
a much cheaper one. Do you think this is too drastic a move
or is it the right move towards financial nirvana?
If this is the right move, my next question is: currently
I'm paying RM800 monthly for car from my take home salary
of RM2,800 (exclude my part time income). What would be
right figure I shall spent on car loan monthly?
Thanks a lot.
A6: The less you pay for your car loan, the better.
Ideally, it should be less than 17% of your take home pay.
In your case, your car loan should be RM476 or less. In
other words, you have bought a car that is too expensive
for you.
No problem though. Learn the lesson and don't make
the same mistake again when buying the next car.
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2. QUOTE OF THE MONTH
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"Money isn't everything… but it ranks right
up there with oxygen."
* Rita Davenport *
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3. YOUR QUESTION ANSWERED
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Q: I trust you in a good health. I have recently read your
book on being a millionaire landlord. I have 5 mortgage free
houses that yield me income of RM48,000 per year. It was
interesting to read that I could claim for capital allowance
as my rental is considered a business income. How do I
calculate the capital allowance? The funny thing is my
accountant has no idea what I was talking about when I
raised the subject with her. I know it is better to mortgage
the properties and reduce my tax liabilities but as you said
in your book… I sleep well at night not worrying about being
up to my neck in debt.
The crux of my question… what is capital allowance for
properties all about… please shed some light to illuminate
the dark tunnel of my ignorance.
A: First, find a new accountant who is more knowledgeable.
Next, read the article "A brief explanation on Capital
Allowance" on my web-site. Your problems are solved!
* HOT TIP *
Read "The Millionaire Mind" by Thomas J. Stanley
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4. SPECIAL OFFERS: Property Seminar
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Start 2005 with a bang and register for the *number 1*
property seminar in Malaysia!
Title: Be the next PROPERTY MILLIONAIRE
Date: Sat 5th Feb 2005
Time: 9 am - 6 pm
Venue: Holiday Villa, Subang Jaya
Click here to find out how you can benefit from the real
estate revolution.
http://www.millionairesplanet.com/events.html
PS: Each pax will receive a complimentary copy of Azizi's
latest best seller "How to Become a Property Millionaire".
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5. NEW BOOKS FROM AZIZI ALI
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"I admire Azizi's drive and ingenuity. I must say that some
of his ideas and methods are ground breaking...those looking
to better manage their finances and earn more shall gain
considerable knowledge by reading the thoughts and
experiences of Azizi."
YAB Tun Daim Zainuddin
former Finance Minister, Malaysia
That is the comment given by the former Finance Minister of
Malaysia about Azizi's latest book "mXe! five keys to become
an Extreme Millionaire".
As the title suggests, this book is about how you can get to
be a millionaire as quickly as possible while doing the
things that you love.
If you have benefited from Azizi's previous books, then you
will no doubt love this latest offering. You will find gems
inside this book, which include Azizi's own secret of
success and formula of living life.
This book is due to be published in Feb 2005. However, you
can place your order now and be the first to get this storm.
For more details, please click on:
http://www.millionairesplanet.com/pro.html
PS. Win a chance of winning a FREE seat at Azizi's property
Seminar in Feb (worth RM580)! All you have to do is order
mXe! before 31st Jan 05, and complete a slogan. There are
two runner up prizes which is Azizi's Full Powerpack (worth
RM149 each).
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6. DISCLAIMERS
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This e-zine is for educational purposes only. The author and
publisher specifically disclaim any responsibility for any
liability, loss or risk, personal or otherwise, which is
incurred as a consequence, directly or indirectly, of the
use and application of any of the contents of this e-zine.
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So that's it, folks. The latest FREE issue of the
"MILLIONAIRESPLANET EZINE". I trust that you've picked up
some useful stuff that can help you become a Grand Master
of Money.
So tell your mom, tell your dad, tell your girlfriends and
your boyfriends too, and ask them to join the party!
Until the next issue, keep your eyes on the money and
here's to the next million!
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Copyright 2005 Azizi Ali
All rights reserved
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Azizi Ali
*Millionaires Coach*
True Wealth Sdn Bhd
email: info@millionairesplanet.com
website: www.millionairesplanet.com
tel: 03-7880 1051
fax: 03-7880 8051
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