The Lord also will be a refuge for the oppressed, a refuge in times of trouble. And those who know Your name will put their trust in You; for You, Lord, have not forsaken those who seek You.
Psalm 9:9-10
It was sprawled in the news yesterday, FMT reported “Property Auction Market Sees 20% Rise In Listings After OPR Hikes” (https://www.freemalaysiatoday.com/category/nation/2023/07/11/property-auction-market-sees-20-rise-in-listings-after-opr-hikes/).
Spike in bank loan base-lending rates are causing many property owners to default, unable to pay their monthly mortgage repayments. The interest rate hikes came like a double whammy, right after an already difficult period when the nation was lock downed for 2 years, since 2020.
In our churches, you’ll occasionally hear preachers suggest that putting money down in property is always a sound investment. My ex-pastor spoke openly, to encourage believers to make what he thought are good choices in life, but stopping short of claiming that God told him to say so to his congregation.
Whereas in Diakonia, another lukewarm church situated in Rawang, one of their pastor also doubled up as an expert investment guru, dishing out what appears to be solid advice for anyone wishing to retire early, according to his limited definitions.
The Race For Greed
Personally, I’m not against investing. More than two decades ago, I too have been a heavy property investor, the market then was good and thriving.
I remembered the first property I purchased was a two room apartment located in Setapak, which I bought at the price of RM55,000.00, in the early 90s, when I was hardly 20 years old. Yes, you read that right, I took a loan to buy a property before I even bought my first car.
By 25 years of age, I started courting my wife, and I recalled telling her to her disbelief, that I owned a few apartments. This happened after our few initial dates, and my wife found it difficult to believe, until I brought her with me, to collect rent money from my tenants, at the end of the month.
I am not new to property investment. At the time when I was dabbling in the property market, these preachers and folks in the town of Rawang, are probably still in school or drinking milk from their plastic bottles. But even as an experienced proprietor during times of a thriving property market, I found it hard to make money from my investments.
Each apartment sets me back by RM380.00 in monthly installment. And I was happily collecting RM700.00 to RM750.00 monthly from each of my tenants. On the surface, it appeared profitable. I had surplus collection of RM300.00 per unit, and technically my tenants are paying my bank installments for me. To the naked eye, this is certainly more than a good deal.
False Conflation
But after I took my calculations further, I began to see the hidden truth of investing in properties. My bank loans are for a full 30 year tenure, which works out to more than RM150,000.00 that I have to repay in principle and interests. Although I am getting a surplus of RM300.00 from each unit every month, managing property investments is no small feat, and requires a lot of effort, time and money, especially if one is taking charge over several properties.
I came to reckon that if I quit my job and started my own business, I would have made significantly more for the same amount of effort I put into my property investments. And I did exactly that, I left my job as a legal consultant in a property developer, and started my own company selling computer systems integration solutions. That was more than 25 years ago, I took the plunge to change, although I hardly know nuts about computers.
Fast forward today, I often find it intriguing, when I see my friends surviving with the age old scheme of property investment. Today, if you buy a property, the rent money you collect, could not even cover your installments or interest you pay back to the bank. But yet, I can still hear of people claiming that they became rich by investing in properties. It’s either I got my calculations wrong or they simply do not know how to count. Or can anyone who had made lots of money investing in properties during the last 10 years, please stand up and let me see your hands?
Unless the properties are acquired by cash purchase without loan assistance or you are a property developer who built your own. And unless proprietors have consistent, occupying tenants paying them rent money for long periods of time. Unless it is so, otherwise IT IS A SURE LOSE game for anyone to buy a property today with a loan, and hoping that he can profit from it.
This false conflation also begets the next question; if I have lots of money, and am able to purchase properties without loans, are there any better options to put my money elsewhere, that guarantees a better return than property investment? Well, I found out many years ago, that the answer is a resounding yes. There are plenty of good options to choose from, if I wanted to double my money in as little time as possible. And one of the ways is to start a good business. There’s a saying, nothing pays like smart and hard work!
If you think that investing in properties is a good thing, I couldn’t agree less with you, especially if you are buying for your own stay or use. But if you are coming with the rent seeking mentality or hoping that you can flip ownership to make a quick buck, or if you listened and believed some crap preachers, who told you that property investment is good investment, then be prepared to take on high risks and lose your pants soon.
Plans to hoard and invest in properties that you have no intention of using them yourself, will not go down well. The Bible stated that ‘The Lord also will be a refuge for the oppressed, a refuge in times of trouble. And those who know Your name will put their trust in You; for You, Lord, have not forsaken those who seek You’ (Psalm 9:9-10). All it takes is for the righteous whom are in need, to pray to God for shelter, and what you think is yours will be removed from you, and to be given those in real need.
Little By Little They Eat You Alive
Investing in property is no different from taking temporary loans to buy shares. As long as there are elements of profiteering, it is still a gamble. It is not only about you, your money, your tenants and your would be buyers. The hidden party in between your deal is your banker. He is the one who leech and earn with minimum risks. The banker pass on the risks to you, while he takes a portion from you each month.
When the time is ripe for harvest, they bring down the economy and raise interest rates, putting you and your plans in a quandary. If you are unable to repay according to the terms of your banking contract, they flush you out. If you think you have holding power and could survive the ordeal, they’ll cause a market crash and also flush you out. In short, it is the same as buying shares and become unintended bag holders for these professionals. You are not an investor, but a fool who happily run to them, and shoulder the risks for them.
If anyone tells you to invest, in whatever assets, always count the risks against the rewards. The ratio must be in your favor before you make any commitment. If the risks are low for a high return, then go all in if you so wish. But if the risks are too high for a small return, then it is better for you to keep your money safe underneath your bed.
When these banksters are prepared to pull the plug, they will do it in an orderly manner. Little by little, they will deplete and shock the economy, to cause you to lose your income. Little by little, they will raise interest rates. Little by little, they will eat you alive. And this little by little that they do to you, is no different from controlled demolition, when they want to bring you down, like bringing down an old, redundant building.
Ignorant Preachers Pretending To Know All
Never listen to preachers in churches who teach people how to make money. They are the last of all people qualified to educate you concerning your finances. Most of these preachers do not know what they are doing, and let alone to even preach the gospel correctly.
The worse among them are the prosperity preachers, and the RM5.00 per entry, preach-for-money false prophets. They will say anything to you, as long as you are willing to pay them a portion of what you have. And the more you give them, the more they promise on behalf of God, that you will be rewarded. Sometimes they claim you will be rewarded in your work. And sometimes you hear them say that if you invest in God (i.e. putting money into the pockets of these fake preachers), God will take care of your investments.
When hell breaks loose, they’ll run to you and claim that it is okay, because it is not your time yet. They’ll tell you the best is yet to come for you, God will still reward you in your time. But they won’t be able to tell you when your time is exactly coming. Soon, when you are closer to your grave, they’ll tell you it is okay, because God have you safe in His arms; if you die today, you’ll be in heaven tomorrow.
They tell you not to be afraid. But what exactly are they saying? Not to be afraid of what? Not to be afraid of losing everything you worked for in your lifetime, or not to be afraid to lose your life? Or worse, not to be afraid of or not to fear God?
Similar to investment gurus and wealth experts who go all out to deceive the masses, false prophets and fake preachers do the same things. Ultimately, their followers suffer the consequences of societal, controlled demolition, aimed at bringing down evil men with their schemes.
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