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Sunday, 5 October 2014


Went back to attend the "94'南华国中毕业20周年纪念之回家". This is 2nd 10 years gathering, the previous was 10 years ago. Nice to meet up with all friends face to face.

Some of them from KL,Singapore,Penang and Bangkok. Surprise to received a token of souvenir too.

Organizer done a good job for this, kudos for them.
In the gathering,my teacher exchange her property investment journey with me. She said that Nan  Hwa is her first school until today. When she graduated from University Malaya, and posted to Nan Hwa school in 1991. 3 years later she bought a house at $60K, today the house is rented out. She bought her 2nd property few years later at $110K, currently also rented out.
Her 3rd property is a double storey corner link house at Taman Pelangi 2, on 2010 with $400K. This is 2nd phase by the developer. The 1st phase is selling $220K and it gone up to $400K in 2 years. All her relatives and friends this is crazy and should not buy.

Guess how much it worth today?It is about $600K. Wow......
I am sure she is on her right path for creating her own wealth. She is a dedicated teacher and passionate about her students.

She as me a question: "Would I advice her to dump in a one lump sum of money just to reduce the mortgage loan?", She said that her other student said not advisable.

My answer as below:

There is no right or wrong answer for this question because it all depends on the individual.

By right, if the house is for own stay, we should pay off as soon as possible. Because, the house we stay on our own, it is not an asset. It is liability as we need to pay the bills every months.  
Maybe by answering the following question can help to clear some for the doubt.

1) What is the purpose to pay one lump sum for this mortgage?
2) Is there any other better investment vehicle available?
3) What if there will be another good investment opportunity land in front of you in next few months?

For an investor, we would not pay the lump sum just to reduce the loan mortgage. Whereas we will go to ask for refinancing to pull out capital for next investment plan. Hopefully, my advice would help her to make the decision.

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