Episode 19 – Can watching Yap’s Money Life Show replace the role of a Qualified Wealth Advisor?

Episode 19 – Can watching Yap’s Money Life Show replace the role of a Qualified Wealth Advisor?


Welcome to Yap’s Money Life Show.
Thank you again for your interest and support. Recently, a long time client of mine,
left a message in the YouTube comment section. He said: Based on my experience as a client of Mr. Yap, by just listening to the Yap’s Money Life Show, I don’t think anybody can do it by yourself to achieve
a complete set of financial freedom or retirement plan. I suggest you to appoint either Mr. Yap or other qualified wealth management adviser to be your advisor to manage your wealth to achieve your financial freedom.
What do you think Mr. Yap? First of all, I must say I’m very happy to hear from
this particular client and I want to say thank you to him for his recommendation and
his vouch of confidence in us at Whitman. So I want to take this opportunity to share with the viewers, what is the difference between the show that
we are doing here, and the service that we offer. Or to be more exact, I want to share what this show
can do and cannot do. So basically in this show,
we can do the following 3 things: 1) We can share the best practices of wealth management. For example, we can share with you
what are the criteria for you to consider when you want to evaluate an investment proposal,
to decide whether you should invest or not invest. 2) We can share with you my personal view on
certain event or certain investment product. For example, Bitcoin. I can share with you what do I think about Bitcoin, whether it is worthwhile to invest? But I must say that, whatever I share,
may not be completely correct to some people. But, that is my own point of view. 3) We can share the mistakes made by our clients. Then what you can do is that you can learn from the mistakes, and you can avoid these mistakes in your personal wealth management. In this show, we are not able to do the following 3 things: 1) We can’t give you specific recommendations.
The reason is because everybody has got different financial situation and
different financial needs. For example, I can’t tell when you can retire
or when you can’t retire. I can’t tell you, how much you should invest into one particular investment because that depends on your unique financial situation. 2) I can’t assist you to implement the best practices that I shared in the show. For example, in real life, we can help our
client to select the right fund manager, or we can help them to get rid the fund manager.
This thing we can’t do it in the show. 3) We can’t monitor your actual progress in your personal wealth management, because we don’t even have any financial
information of yours. For example, in reality, we can help the client to measure the actual growth of their wealth or net worth in the year 2016. So, these are 3 major things that we can’t do in the show but our advisory service can deliver such a thing to the client. So that’s what my client mean by, the show is more for knowledge. It does not really give you that assistance to apply the concept, or the ideas into your personal wealth management. However, despite the limitation, I believe Yap’s Money Life Show can still help you to enhance your financial knowledge, and also use my sharing of ideas to improve your investment management. And I believe with proper application of the knowledge and your self discipline,
you should be able to grow money with high certainty. Now I have a question from Mr. Kelvin Yap.
He is from Penang. His question goes like this: I am a subscriber of your show
and I have a question to ask. How much foreign investment asset should I have? Currently I have 0% and I’m very concerned on the impact of depreciating RM on my wealth. Kevin, you are right! You have every reason to be concerned, because if 100% of your wealth is in local investment asset,
then your wealth will shrink whenever RM depreciates. For example, if RM depreciated by 10%,
then your wealth will also shrink by 10%. But, I must say that you are not very unique, because I have seen a client who has got 50 million worth of wealth,
but all his assets is still in Malaysia. And this is especially true for those investors who have very heavy weightage into property investment. To mitigate this problem, I would suggest that
you divest part of your wealth to overseas. But when you do that, you must not put too much of your asset overseas. For example, some people may over do it. They may actually put 80% of their wealth outside Malaysia. So that will give you problem.
Why do I say that? There are 2 reasons: 1) After all, we are still living in Malaysia and spending RM. So, if you put too much asset outside Malaysia,
you may have cash flow problem in Malaysia. 2) If you put too much asset, say for example,
80% of your wealth outside Malaysia. What happens if RM strengthened?
So if RM were to strengthen, then your foreign investment asset will shrink.
So overall your wealth will shrink. To share my view, based on my experience, how much you’re supposed to divest outside the country, is very much dependent on the size of your wealth. For example, whether you have 1 million, 10 million or 100 million, it’ll warrant you to divest different amount of wealth outside Malaysia. And also it depends on your foreign currency spending needs. For example, you intend to send 3 children to the US to study.
So each child may need to have about USD200,000. So, you may need to have USD600,000 investment asset to be used for this tertiary education purpose. So for that matter, you’ll have more need of USD than other normal people. The rule of thumb is to invest about 30% of your total wealth outside Malaysia. When you try to divest your wealth outside Malaysia, there are 2 points that for you to note when you do that, to make sure that you can divest effectively. 1) When you divest, it’s not necessary for you to really transfer the money outside Malaysia. You can still, for example, buy a Singapore equity fund offered by Malaysia unit trust management company, and you still can achieve the same purpose of divesting your money outside Malaysia. 2) When you try to buy a Singapore equity fund from a local unit trust management company, chances are they may offer a fund in SGD, USD and RM. So, it’s not necessary for you to buy the Singapore equity fund in SGD or USD. You can still buy RM denominated Singapore fund,
as long as the underlying asset of this particular Singapore equity fund is investing in the stocks in Singapore, and that will serve the purpose. To grow our money with high certainty, we must learn how to invest outside Malaysia in order to preserve our wealth. It’s very important for you to refer to Strategic Asset Allocation to determine which part of your wealth to be invested outside Malaysia. Now I have a question from Mr. MK Chin from Puchong. He said: Mr. Yap, I need to get your view on this investment strategy. Can a person accumulate his wealth
by just investing in property only? My answer is very straightforward, NO.
Why do I say so? There are 3 reasons. 1) When you invest into property, you cannot be sure that property can always appreciate in value in every economic cycle. For example, at the current economy cycle,
property is having a hard time to grow. 2) Loan interest. When you invest in property,
loan interest is very important. But when the loan interest is low, for example,
now the effective interest rate is about 4.5 – 5%, then it’s actually considered quite good to invest in property. But, if the loan interest rate is about 9% or 10%,
it’s very costly for you to invest in property, and it’s very difficult for you to make money from property investing. 3) Property Investment is an investment that you can’t really sell fast and turn it into cash easily. For example, if you need money within 3 days, you won’t be able to sell a property and get money within 3 days. My suggestion, Mr. Chin, is to mix your
property investment with liquid investment. What do I mean by liquid investment? Liquid investment could be like shares, bond, REITs, or cash as well. So why do I suggest you to do so? Because by mixing the liquid investment with your property investment, you’ll be able to help you to address the limitations of property investing. Ideally, I would suggest that you hold
50% in properties and 50% in liquid investments. How it will help you?
I’ll share with you 3 reasons: 1) When property sector is depressed, other asset like liquid asset can do well. So you can sell these liquid asset for profit. 2) When loan interest is very high, some liquid asset like cash in the bank can do very well, and give you well good interest. 3) When you need money urgently, you can always sell your liquid investment first so that you can buy time to slowly sell your property later. Given a choice, which is better? 100% in property? Or 50% property & 50% liquid investment? I’m sure your answer would be 50% in property and 50% in liquid investment. However, the challenge for many people is that, they do not know how to manage and grow their wealth using liquid investment properly. So, a lot of time they end up with very little liquid investment in their overall asset allocation. To grow money with high certainty, we must always learn how to invest and grow our wealth using liquid investment. This show will share with you some of the best practices on how to invest successfully using liquid investment, and avoid the mistakes a lot of people made.

One Comments

  • JUN LEE

    October 7, 2017

    If i said I learn flying planes by watching YouTube and a Google, will you trust me to fly you safely?

    Reply

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