Frank Comments by Dennis Ng on various Topics

[racoon12]

SOS message:

Hi All
"This forum will discontinue unless 30 participate to Give" http://www.masteryourfinance.com/forum/ ... =16&t=2690

please support by doing 3 charity work: and report in on the above forum

1. do a donation
2. tell them about this forum information able to enlightened them on crisis preparation
3. teach kids or children to be good by sharing what they have on their hands
4. Tell them about positive debts & negative debt difference

[candy_chia]

化 悲 伤 为 力量

Let's turn the tide of grief into an IMMENSE FORCE to fulfill our beloved sifu's dream

Let's all do our part to help bridge the Rich Poor Divide.

If it is not ME, then who?

If it is not NOW, then when?
(this is what Serene Loong's friend's grandmother shared with him and it seem exactly similar to the 3 questions that Jim Rohn in the video ask us to ask ourselves.

[candy_chia]

SAFRA Essential Term as highlighted by Dennis is the most cost effective terms insurance.

There is cost Saving of $34,630 if one is insured under SAFRA Essential Term plan compared to NTUC I-Term for 29 years till 70 years old.

I always share that one of the best ways to "protect" ourselves is to increase our financial knowledge.

A person having financial knowledge would probably know that one reason Why most people are UNDER-INSURED is becos they BUY MAINLY WHOLE LIFE INSURANCE where premiums are high

that it is almost impossible for an average person to comfortably afford sufficient insurance coveage.

A S$500,000 Coverage might cost S$8,500 insurance premiums a year compared to about S$1,500 for Term Insurance.

[candy_chia]

Applause to kklok for the effort to share the last recording on Dennis view over feasibility of undertaking home loans with 50 years tenure.

Tomorrow, Channel News Asia is interviewing me on my comments on 50 years loan period for Home Loans. Not sure when they will telecast, maybe for tomorrow News.

Tonight on Channel News Asia Singapore News 10 pm to 10.30 pm, I'll be sharing my comments whether a 50 year loan period makes sense or not? Why it may make sense for investors but NOT for home buyer...watch out for it.

Hi All,

This is the last recording that I have done for Dennis on 230712 (CNA news).

http://dl.dropbox.com/u/34170769/CNA_230712.avi

Cheers
KK

[candy_chia]

http://www.todayonline.com/Business/EDC ... term-loans

a longer report on Channelnewsasia.com
http://www.channelnewsasia.com/stories/ ... 58/1/.html

S'pore homebuyers likely to opt for shorter term mortgage
By Millet Enriquez | Posted: 23 July 2012 2343 hrs

SINGAPORE: Homebuyers in Singapore will likely opt for mortgage loans with shorter repayment periods.

She added: "I wouldn't want to be servicing a home loan after retirement because I think there will be other expenses that I might have to take care of like medical expenses, etc."

UOB has come up with a first by offering home loans that stretches repayment to 50 years and a maximum age of 80.

UOB said that for the maximum tenor of 50 years, the requirement is to have at least 35 years remaining on the lease for leasehold property and no more than 80 years of age at end of loan tenor.

Dennis Ng, who is the founder of mortgage consulting firm HousingLoansSG.com, said: "A longer loan repayment period may make sense for INVESTORS because the investor is always looking for return on investment. So the less capital they put into the property, the higher their return."

For ordinary home buyers, experts said they should TAILOR their LOAN REPAYMENT PERIOD to the AGE they WANT TO RETIRE.

While a 50-year tenor may reduce monthly repayments, experts said interest could push the loan's amount by up by 15 to 20 per cent.

For example, a S$1 million loan at 50 year tenor will total to S$1.45 million by the end of its term - much higher compared to the S$1.3 million principal and interest if the loan was taken up at a 35-year tenor, according to DBS.


HousingLoansSG.com, which sees 20 to 30 enquiries a day, said around 70 per cent of its clients opt for 25 to 30-year loans, while 15 per cent go for the 30 to 35 year loans. The rest prefer terms of less than 25 years.

"If you have problems paying the installment right now when you are much younger and your income is much higher, I think you will have a bigger problem as you age," said Mr Ng.
- CNA/fa

[candy_chia]

Dennis cautioned home buyers on the risk of possible escalation of interest rates when they overextend themselves in their Housing Loan on CNA.

http://www.youtube.com/watch?v=0gnR6z6s ... re=related

http://www.masteryourfinance.com/forum/ ... f=1&t=2255

Hi Dennis,

For floating rate, other than pegging to SIBOR and SOR, I understand that for some packages, board rate is used.

In your opinion, (assuming the terms/conditions are the same) may I know which package is a wiser choice (peg to SIBOR/SOR) vs (peg to Board rate)? Or are they the same?

thanks,
yew meng

Hi Yew Meng,
SIBOR is an Average market interest rate, not subject to manipulation by individual banks.

Board rate is set by individual banks, subject to their discretion.

From past experience, they can increase board rate anytime when interest rate go up, but may not reduce board rate when interest rates go down.

[yhendra]

Hi Alvin,

Thank you for your ever-ready attitude in sharing to others!!
This is the spirit that Dennis had kept telling us: "The more you share, the more you learn... Give and you shall receive..."

I happened to be in his seminar, the Stock Seminar, on 21st/22nd July 2012 at Suntec City, with other 'trainers', Serene Loong, Adrian Chua, Jimmy.
It was our 'revision' to learn more from him in order for us to replace him conducting the seminar in future.
So that he can do some other strategic planning to reach out to more people.
We recorded the seminar for our learning. However, it happened to be his last seminar.

Just for sharing to everybody part of the first hour of the seminar. When I re-watched the video again the day after his wake.

I compiled the video and you can watch it here: http://www.youtube.com/watch?v=zzK998SXgx0

Coincident or not that we recorded the seminar just before his departure,
I hope everybody now knows that he REALLY is SERIOUS about sharing and teaching to more people.

...

Dear fellow graduates, it is heartening to see most us want the forum to continue.
Yew Kin has decided the monthly mentoring sessions will continue.
I will be conducting the next session on 13 Aug 12, Mon.
More details will be released soon.
Keep in touch!

[ngtfook]

Just pen down a view ...

Dennis said investing in property for cashflow does not make one rich or millionaire.

Just work out the simple Maths yourself. If you have a S$100,000 and invest into a property Priced S$500,000 and borrow S$400,000 loan. Each month, instalment may be S$1,800. If the rental income is say S$2,500. Property tax 1 year may be S$2,400 or about S$200 per month, condo management fee S$200, not even counting other expenses, such as Fire insurance, Income Tax on rental, commission on teanancy etc, etc. Your NET Cashflow per month is S$300, or works out to S$3,600 a year. If you want to each S$1 million from Cashflow, it would only take 277.77 years ONLY!!!

I bet to differ.

He missed out a very important factor.... appreciation of property value. When one fully paid off his property mortgage loan in 25 years, the property value is very likely to worth $1M base on 3% inflation rate.

So, with initial $100K investment, his investment grows to $1M in 25 year. The CAGR is ~9.8%

In addition, he still have positive rental income every month. The rental income is likely to increase due to inflation.

The best part is, after 25 years, he owns a $1M property fully paid. The rental rate may increase to $5K per months. Net rental easily >$4K for life!

He can also leave it a legacy when he calls lord.

Bottom line ... cashflow investment can make one rich.

In 1998, when I read "Rich Dad, Poor Dad" by Robert Kiyosaki, the book changed my mindset about money. "Make your money work for you, instead of working for your money"...

However, after buying and reading more than 10 of his books, I discovered that he didn't really share the specifics of HOW to make money work for you. How to choose stocks to buy, How to choose properties to invest in. His many books only touch on general principles and concepts.

I also bought and own his full set of Board Games, namely Cashflow Game 101, Cashflow Game 202 and Cashflow Game for Kids. (total cost S$600, they are the most expensive board games I own, and I own many board games, including those not publicly known such as "Leverage Game - Board game on Business", "From Zero to Hero - board game on Business", Success Board Game, FQ (a Singapore Financial Board game) etc, etc).

I once so admired him that I actually helped conducted Cashflow Game workshop for 2 years, from year 2001 to year 2002. Later, as I learned from Real multi-millionaires in Singapore, I realised that some of the things Robert Kiyosaki teach are not correct. eg. his definitions of Assets and Liabilities.

http://www.sharesinv.com/articles/2012/ ... are-wrong/

罗伯特清崎对资产与负债的定义有误！
http://www.sharesinv.com/zh/articles/31612/

He keeps emphasizing the Importance of Cashflow, Cashflow, Cashflow in his books and seminars. However, I personally realised that for a person who is starting out and not Rich, focusing on Cashflow or Passive Income will not help you become Rich, to become Rich, to reach your first Million dollars, the FACT is that you need to focus on Capital Gains, how to grow your money from S$1 to S$2, to S$4, to S$8 and repeat the process. That's how I re-started my journey after losing half my wealth in Asian Financial Crisis with remaining S$50,000 and slowly grew my money to reach S$1 million by year 2008, NOT by focusing on Cashflow.

Just work out the simple Maths yourself. If you have a S$100,000 and invest into a property Priced S$500,000 and borrow S$400,000 loan. Each month, instalment may be S$1,800. If the rental income is say S$2,500. Property tax 1 year may be S$2,400 or about S$200 per month, condo management fee S$200, not even counting other expenses, such as Fire insurance, Income Tax on rental, commission on teanancy etc, etc. Your NET Cashflow per month is S$300, or works out to S$3,600 a year. If you want to each S$1 million from Cashflow, it would only take 277.77 years ONLY!!!

So I really wonder how anyone can become Rich focusing on Cashflow.

There is a lot of controversy about him as well, some doubt he really made the money from what he teaches you, but think he makes most of his money from books and seminars. And the Rich Dad which he claimed is a real person in his book, some have checked and doubt that such a person really exist in Hawaii.

Here are some postings I read in the internet which expresses such skeptism:

http://www.arystoteles.pl/robert_kiyosaki_fraud.php

http://www.johntreed.com/Kiyosaki.html

[yhendra]

Hi ngtfook,

Dennis didn't miss out that very important factor. You may missed out his comment:

He keeps emphasizing the Importance of Cashflow, Cashflow, Cashflow in his books and seminars. However, I personally realised that for a person who is starting out and not Rich, focusing on Cashflow or Passive Income will not help you become Rich, to become Rich, to reach your first Million dollars, the FACT is that you need to focus on Capital Gains, how to grow your money from S$1 to S$2, to S$4, to S$8 and repeat the process. That's how I re-started my journey after losing half my wealth in Asian Financial Crisis with remaining S$50,000 and slowly grew my money to reach S$1 million by year 2008, NOT by focusing on Cashflow.

I assume "appreciation of property value" is the same as "Capital Gains" he mentioned in his comment.
The keyword is what we "focus" on, and of course the holding power...

Just pen down a view ...

Dennis said investing in property for cashflow does not make one rich or millionaire.

Just work out the simple Maths yourself. If you have a S$100,000 and invest into a property Priced S$500,000 and borrow S$400,000 loan. Each month, instalment may be S$1,800. If the rental income is say S$2,500. Property tax 1 year may be S$2,400 or about S$200 per month, condo management fee S$200, not even counting other expenses, such as Fire insurance, Income Tax on rental, commission on teanancy etc, etc. Your NET Cashflow per month is S$300, or works out to S$3,600 a year. If you want to each S$1 million from Cashflow, it would only take 277.77 years ONLY!!!

I bet to differ.

He missed out a very important factor.... appreciation of property value. When one fully paid off his property mortgage loan in 25 years, the property value is very likely to worth $1M base on 3% inflation rate.

So, with initial $100K investment, his investment grows to $1M in 25 year. The CAGR is ~9.8%

In addition, he still have positive rental income every month. The rental income is likely to increase due to inflation.

The best part is, after 25 years, he owns a $1M property fully paid. The rental rate may increase to $5K per months. Net rental easily >$4K for life!

He can also leave it a legacy when he calls lord.

Bottom line ... cashflow investment can make one rich.

In 1998, when I read "Rich Dad, Poor Dad" by Robert Kiyosaki, the book changed my mindset about money. "Make your money work for you, instead of working for your money"...

However, after buying and reading more than 10 of his books, I discovered that he didn't really share the specifics of HOW to make money work for you. How to choose stocks to buy, How to choose properties to invest in. His many books only touch on general principles and concepts.

I also bought and own his full set of Board Games, namely Cashflow Game 101, Cashflow Game 202 and Cashflow Game for Kids. (total cost S$600, they are the most expensive board games I own, and I own many board games, including those not publicly known such as "Leverage Game - Board game on Business", "From Zero to Hero - board game on Business", Success Board Game, FQ (a Singapore Financial Board game) etc, etc).

I once so admired him that I actually helped conducted Cashflow Game workshop for 2 years, from year 2001 to year 2002. Later, as I learned from Real multi-millionaires in Singapore, I realised that some of the things Robert Kiyosaki teach are not correct. eg. his definitions of Assets and Liabilities.

http://www.sharesinv.com/articles/2012/ ... are-wrong/

罗伯特清崎对资产与负债的定义有误！
http://www.sharesinv.com/zh/articles/31612/

He keeps emphasizing the Importance of Cashflow, Cashflow, Cashflow in his books and seminars. However, I personally realised that for a person who is starting out and not Rich, focusing on Cashflow or Passive Income will not help you become Rich, to become Rich, to reach your first Million dollars, the FACT is that you need to focus on Capital Gains, how to grow your money from S$1 to S$2, to S$4, to S$8 and repeat the process. That's how I re-started my journey after losing half my wealth in Asian Financial Crisis with remaining S$50,000 and slowly grew my money to reach S$1 million by year 2008, NOT by focusing on Cashflow.

Just work out the simple Maths yourself. If you have a S$100,000 and invest into a property Priced S$500,000 and borrow S$400,000 loan. Each month, instalment may be S$1,800. If the rental income is say S$2,500. Property tax 1 year may be S$2,400 or about S$200 per month, condo management fee S$200, not even counting other expenses, such as Fire insurance, Income Tax on rental, commission on teanancy etc, etc. Your NET Cashflow per month is S$300, or works out to S$3,600 a year. If you want to each S$1 million from Cashflow, it would only take 277.77 years ONLY!!!

So I really wonder how anyone can become Rich focusing on Cashflow.

There is a lot of controversy about him as well, some doubt he really made the money from what he teaches you, but think he makes most of his money from books and seminars. And the Rich Dad which he claimed is a real person in his book, some have checked and doubt that such a person really exist in Hawaii.

Here are some postings I read in the internet which expresses such skeptism:

http://www.arystoteles.pl/robert_kiyosaki_fraud.php

http://www.johntreed.com/Kiyosaki.html

[ngtfook]

Hi Hendra,

Glad to see your comment.

Dennis example of using property to generate passive income (cash flow) and concluded that cash-flow strategy does not work. He was refer to Robert Kiyosaki's cashflow does not make one rich.

My example show otherwise.

That's why I dispute Dennis's view.

Dennis said one can only be rich or millionaire by investing by focus on capital gain. This capital gain methodology is buy low and sell high. You have to be very skillful and have consecutive win before you can turn $100K to $1,000K. IMO, only few people can achieve that.

Whereas, investing in property for cashflow does not need to buy and sell during the entire 25 years to accumulate the "capital gain". It is quite passive in nature except doing rental errant.

[yhendra]

Hi ngtfook,

It's a healthy exchange of point of view.

Why I reply to your comment, because you mentioned "He missed out a very important factor.... appreciation of property value. "
And, my comment is that he didn't missed that out (he used the term "capital gain").

Anyway, what I saw from Dennis' point of view, or his focus, or his strategy, is on capital gain FIRST.
And if you see that, he based his argument on Robert's own Cash Flow Game, if you ever play, whereby in many ways, the game's strategy is ACTUALLY to get out of the rat-race is by capital-gain-intensive winnings.
THEREAFTER, we can focus on the cash-flow part.

Then it will become easier for someone to have a GREAT cash flow, if you have $1m cash.
Just invest on something that gives you return 3% - 5% per year, it will give you $30k - $50k per year, which is more than enough for one's basic necessities (food, cloth, other expenses).
This is the cash-flow part, which is the SECOND priority.

So, it's just about focusing on the capital gain, which can be "faster" in term of timing to reach the $1m than by focusing on cash-flow.

Based on his experience, that I know of, by focusing on capital gain, from $50k he made $1m in cash within 15 years (saving 10 years), by catching 1 big market cycles from 2003 low to 2008.
He then invested on some properties as well at pretty low price, then this is where the cash-flow is more meaningful, when the property is rented out.

I do agree with you, that property will rise, rental will rise, and eventually one can be rich, using the scenario.

Just for sharing, by focusing on capital gain, I am able from 2012- 2013 to get 30% return, and in this year (2014) about 20% (realised), in stock investment alone (I'm focusing in SG market only).
In 2011, I also bought a property in Tanglin area for that "cash-flow" purpose, and hopefuly, of course, the capital gain in future.

At the end of the day, it all depends on the circumstances of the person (how much capital he has), current cycle (high/low), the investment time horizon, etc.
Each of us will have different point of views and strategies to reach our goals, and it's all about executing the strategies and take necessary actions a long the way.

Hi Hendra,

Glad to see your comment.

Dennis example of using property to generate passive income (cash flow) and concluded that cash-flow strategy does not work. He was refer to Robert Kiyosaki's cashflow does not make one rich.

My example show otherwise.

That's why I dispute Dennis's view.

Dennis said one can only be rich or millionaire by investing by focus on capital gain. This capital gain methodology is buy low and sell high. You have to be very skillful and have consecutive win before you can turn $100K to $1,000K. IMO, only few people can achieve that.

Whereas, investing in property for cashflow does not need to buy and sell during the entire 25 years to accumulate the "capital gain". It is quite passive in nature except doing rental errant.

[ngtfook]

Hi Hendra,

Congratulation to your success in 30% capital gain. You rock!
Is the 30% gain from your total investable fund?

Just for sharing, by focusing on capital gain, I am able from 2012- 2013 to get 30% return, and in this year (2014) about 20% (realised), in stock investment alone (I'm focusing in SG market only).

Back to my point...
I am disputing Dennis view because he said "So I really wonder how anyone can become Rich focusing on Cashflow." You see what I see?

Just work out the simple Maths yourself. If you have a S$100,000 and invest into a property Priced S$500,000 and borrow S$400,000 loan. Each month, instalment may be S$1,800. If the rental income is say S$2,500. Property tax 1 year may be S$2,400 or about S$200 per month, condo management fee S$200, not even counting other expenses, such as Fire insurance, Income Tax on rental, commission on teanancy etc, etc. Your NET Cashflow per month is S$300, or works out to S$3,600 a year. If you want to each S$1 million from Cashflow, it would only take 277.77 years ONLY!!!

So I really wonder how anyone can become Rich focusing on Cashflow.

I fully agree that the most effective way to be rich is to though capital gain. It is a simple process of doubling one's capital every few years.

However, investing is simple, not easy.

He keeps emphasizing the Importance of Cashflow, Cashflow, Cashflow in his books and seminars. However, I personally realised that for a person who is starting out and not Rich, focusing on Cashflow or Passive Income will not help you become Rich, to become Rich, to reach your first Million dollars, the FACT is that you need to focus on Capital Gains, how to grow your money from S$1 to S$2, to S$4, to S$8 and repeat the process. That's how I re-started my journey after losing half my wealth in Asian Financial Crisis with remaining S$50,000 and slowly grew my money to reach S$1 million by year 2008, NOT by focusing on Cashflow.

Yes, every road leads to Rom.

Some could even achieve without much capital, like the recent case of PRC Yang Yin "$30 million fortune". http://www.straitstimes.com/news/singap ... tor=CS1-10

At the end of the day, it all depends on the circumstances of the person (how much capital he has), current cycle (high/low), the investment time horizon, etc.
Each of us will have different point of views and strategies to reach our goals, and it's all about executing the strategies and take necessary actions a long the way.

[yhendra]

Hi,

Yes. 30% of my investable fund. (see my notes below*)

Back to our discussions.

I got your points clearly, and where you are coming from, and I didn't dispute your opinions.
I was just highlighting that Dennis didn't miss out that very important factor of appreciation of property value (i.e. capital gain)

BTW, I have a real-life scenario, a person who earned gross household income $8k per month, with saving per month is $1,000.
The person bought a condo during low-price period, and during the peak price period, and had a paper-profit about $300k (after ALL costs).
The property is the investment property, not for staying. It was within 3 years period (if I'm not wrong 2009 - 2012).

If you were him, would you sell the property or hold it? (I think you could possibly guess my suggestion to him/her, and my reasons as well)


*Notes:-
I applied one of Dennis' wisdoms (or at least I knew first hand from him):
1. "As long as your upside is double than downside, you should invest".
2. Then when you invest in 10 stocks, if you lost 6 and profit on 4 only, you still make... and with a mathematical model I got somewhere else, it shows that it is possible you can achieve at least 20%.
(see the table in the picture below)

upside-downside.png (141.42 KiB) Viewed 31512 times

However, he also mentioned take what works for you and use it.
So, in the past two years I learnt from someone a "great" TA model but then, I simplify and call it "ABC Pattern" in analysing upside & downside.
I shared this, during the last two mentoring sessions in July and Aug.

So, I combined the above wisdoms plus using Fundamental Analysis. At least it works for me.

From Sep 2012 to Apr 2013 I bought and hold about 8 stocks.
From Feb 2014 to Aug 2014 I bought and hold about 15 stocks. After sold some of my holdings, in Aug, now I'm holding only 5 stocks only.
This is where I apply my own "investment cycle"

Hi Hendra,

Congratulation to your success in 30% capital gain. You rock!
Is the 30% gain from your total investable fund?

Just for sharing, by focusing on capital gain, I am able from 2012- 2013 to get 30% return, and in this year (2014) about 20% (realised), in stock investment alone (I'm focusing in SG market only).

Back to my point...
I am disputing Dennis view because he said "So I really wonder how anyone can become Rich focusing on Cashflow." You see what I see?

Just work out the simple Maths yourself. If you have a S$100,000 and invest into a property Priced S$500,000 and borrow S$400,000 loan. Each month, instalment may be S$1,800. If the rental income is say S$2,500. Property tax 1 year may be S$2,400 or about S$200 per month, condo management fee S$200, not even counting other expenses, such as Fire insurance, Income Tax on rental, commission on teanancy etc, etc. Your NET Cashflow per month is S$300, or works out to S$3,600 a year. If you want to each S$1 million from Cashflow, it would only take 277.77 years ONLY!!!

So I really wonder how anyone can become Rich focusing on Cashflow.

I fully agree that the most effective way to be rich is to though capital gain. It is a simple process of doubling one's capital every few years.

However, investing is simple, not easy.

He keeps emphasizing the Importance of Cashflow, Cashflow, Cashflow in his books and seminars. However, I personally realised that for a person who is starting out and not Rich, focusing on Cashflow or Passive Income will not help you become Rich, to become Rich, to reach your first Million dollars, the FACT is that you need to focus on Capital Gains, how to grow your money from S$1 to S$2, to S$4, to S$8 and repeat the process. That's how I re-started my journey after losing half my wealth in Asian Financial Crisis with remaining S$50,000 and slowly grew my money to reach S$1 million by year 2008, NOT by focusing on Cashflow.

Yes, every road leads to Rom.

Some could even achieve without much capital, like the recent case of PRC Yang Yin "$30 million fortune". http://www.straitstimes.com/news/singap ... tor=CS1-10

At the end of the day, it all depends on the circumstances of the person (how much capital he has), current cycle (high/low), the investment time horizon, etc.
Each of us will have different point of views and strategies to reach our goals, and it's all about executing the strategies and take necessary actions a long the way.