You Cant Go Home

Went home for the National Day weekend by train. I love trains. But JB has turned into a real horrible town where nothing happens and properties are in shambles. Or maybe it has always been that way. It took moving to KL for me to realise it. Probably. I was contemplating selling my condo and working myself out of debt. That was when I realized: I will never be rich. Not in the material sense. I doubt I am or will be in the spiritual or intellectual sense either. I am far too lazy and dependent on the kindness of others. But does it really matter? I think buying property is probably the greatest scam ever. Did you know that the Founding Fathers of the USA actually hated banks and money? They figured that usury and a monetized economy where papers are worth more than labour and land is morally wrong.

What if we did not own any property? People keep telling me: It is better that you own property than renting from someone. At the end of the day, at least you would own a piece of land or building. Is this a logical argument? So what if you owned the property? When I die, it will be inherited by somebody or if you have no will it will be ‘absorbed’ by the government. So, it is better to invest in a good company, where moneys will be flowing through the economy. That is why I think it is better for you to own shares or invest in REITs. From these investments, you shall be able to generate sufficient cash flows at a lower risk. This is because you will be investing in a tradeable security and the income therefrom you can rent a property in which to live. Only if you have a child, I think it would make sense for you to purchase any property. Even if you are married, it would be more worthwhile to rent because of the freedom it affords.

So my advice to those who just started work:
1. Insure yourself heavily by spending most of your money on insurance for the next 5 years. After that, the interest will be able to cover the premiums. As you get older, the premiums will cost you more, hence saving you money. Set a goal such as sum insured of RM1 million by 40 years old etc.
2. Write a will. This will teach you about yourself and assess your life’s goals and to chart the path forward. For instance, why do you want to earn so much money for? Is it for your retirement? When will you retire? Is it for posterity? Will you want to bequeath your wealth to a charity or close friends and/or family members?
3. Put away 6 months income in cash or bonds before you invest in shares or property.
4. Use credit wisely. If you have a guaranteed income, it is better to use other people’s money first. I figured, if you die, you can always use the insurance money to pay off your debts. However, if you are unable to generate income due to illness etc. Then credit is a waste of money. Thank god you have insurance!
5. Purchase only good shares (i.e. blue chips) such that their cumulative worth is equivalent to 6 month’s income before you invest in property.
6. Do not purchase property until you are ready to have children. I assume that you will share parental duties with another person who will either organise your personal life better to get ahead in your career or you both have a steady income flow. Thus allowing you the luxury of buying your own home. Otherwise, don’t do it! The hassles of having your own home is not really worth it. There are so many incidental expenses.

But then again, a home is a comforting place. And for some its worth every penny just to get a slice of that.