Our ability determines what we could afford, very true indeed!

In one of the first few property books I read, Azizi Ali shared that if the reader of his book is currently earning a salary of below RM2,500 he should work harder and earn a higher salary. Else, he can forget about property investment. I read this over 15 years ago and guess what, it is still true today! I have also written a number of articles about working professionals. If we have yet to realise, let’s understand that only the top 10 percent of employees in the company would get higher increments or promotions while the remaining 90 percent gets the usual; slightly above inflation rate kind of increment. The number of managers (earning higher pay) or higher position level is also most likely be just 15-20 percent of all employees in the company. This is why only 20 percent of Malaysians are classified under the T20. Read here to understand more. 
What happens to the rest of all working professionals? Two obvious choices; work much harder and smarter OR invest to create more wealth and not spending whatever we have. After having worked in a Japanese MNC (travelled to the Tokyo, Singapore and London offices), a Malaysian MNC (which is extremely cost conscious!), an Australian MNC (travelled to HK, SG, Indonesia, Thailand and even Philippines), I can safely tell everyone that all these percentages are quite accurate and managers are not necessarily richer than their staffs. (I have a colleague who could buy a shop-office and a semi-detached home at the same time! Her manager stays only in a terraced home. Another colleague owns two units of condos within walking distance to KLCC. Her manager has just one property currently. Nope, they did not come from rich families. They worked very hard and well, invested well.)  Let’s now read what a property expert has to say.
My good friend Alan Poon, Founder and CEO of SuperiorWealth Group writes regularly under his Borak Real Estate column in TheStar. In his recent article: Afford “ability” for properties, he talked about a topic close to my heart. He shared what people usually think when it comes to affordability. A famous study is the one by Khazanah Institute which showed that to be affordable, a home should only be RM270,000. (Well, perhaps this is also why the affordable homes of 800 – 900 sq ft being launched these days are usually priced as close as possible to this RM270,000 number.)
He also shared that different locations would provide different affordability level because the salary vs home prices are likely to be different too. (Very true and yet sometimes, salaries may be low but property prices may be high! My wife comes from Sabah and she could attest to this fact since the day she started working over 20 years ago. She’s a housewife today)  He concluded his article by saying this, “Afford-ability is a choice. It will always be your choice to ensure that you grow the ABILITY to generate income over time which in turn helps you to AFFORD to buy your desired property.”  Please read his insightful article here. 
To rise up faster in the corporate world, it pays to be very good in what we do. Plus, join a good organisation yeah. There are some companies which will never be able to help us grow much. In my 20 years thus far, I am very lucky to have joined all good companies. Oh yeah, a higher degree helps even if not vital. To invest in a more calculated-risk mode, it pays to read more. In fact, property talks in many property fairs are usually free. These helps to push up the learning curve tremendously. Beyond just property talks, do we understand about all the other types of investments available? Reminder yeah, diversification is key. Putting all our money into property is likely to be extremely risky yeah. An earlier article here: Lacking in financial awareness today? Peril awaits    Happy working and investing, at the same time please.
written on 26 June 2018
Next suggested article:  Consolidation is good. Huge debts means high risks. (Always a balance)


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