Housing Loan

When we got married in 1990, my husband and I pooled our income together to buy a house. It is a corner, double storey terrace house. At that time the house was RM150K. 20 years later, which is now, we were told the house can fetch RM500k because of its locality.

Half a million as compared to RM150K seems to be a good price. However, punching number in my financial calculator, the annual growth was 6.2%. If I factor in the interest which we paid to the bank, the annual growth is merely around 3%, not very impressive as compared to fixed D!

20 years ago, the loan interest was calculated using a formula BLR + ? %. The BLR kept increasing until our housing loan interest became double figure! That means the monthly prepayment was not even sufficient to cover the interest! It was some kind of Ah Long dilemma. We were somehow sort of lucky during that period because my company introduced housing loan subsidy. The interest was brought down to flat rate of 4%, and we managed to settle the payment in year 2000.

Checking with the PBB and BSN today, the housing loan interest is calculated based on BLR-2.2% for the duration of the tenure. BSN will pay for the legal fee, transfer fee etc which they call 0% moving fee, but if you decide to settle in full before the tenure term ends, penalty is 3% of the loan amount. Whereas PBB only implement 3 year lock-in period but you have to be responsible for the moving fee yourself.

Nevertheless, I should think that it is quite a good time to take up a housing loan now as compared to 20 years ago.

Year BLR Remarks
2009 6.50 5.95 (February)
5.55 (March)
2008 6.75
2007 6.75
2006 6.00
2005 6.00
2004 6.00
2003 6.50
2002 6.50
2001 6.75
2000 6.75
1999 8.00
1998 10.50 12.27%
1997 9.25
1996 8.50
1995 6.60
1994 8.25
1993 9.50
1992 9.00
1991 7.50
1990 7.00

What is life insurance all about

Once I read a story which explained very well of how insurance works.

Long ago, there was a village with 100 households. They were all padi farmers. Not far from the village lived a gang of robbers that came down from the mountain on the last day of each year. The robbers would target at the village and shot an arrow. Whichever house nearest to the fallen arrow would be required to give the robbers 100 sacks of rice. 100 sacks was in fact all the padi harvested in a year, living the family nothing to live by for the following year!

One day, a wise man from the nearby village heard about the ill-fated village and decided to pay the village a visit. He shared with them an idea of how every one can help each other to reduce the loss to the minimal. The brilliant idea was for each household to contribute a sack of rice at the end of the year. 100 household would mean 100 sacks of rice. At year end, no one should be in fear anymore of losing his fortune for a year!

This concept is similar to life insurance. Every policyholder does contribution from his premium to form an insurance pool. Should any of the policyholder pass on, the money from the pool is used for compensation.

Technical definition would be:

Insurance provides financial protection against a loss arising out of happening of an uncertain event. A person can avail this protection by paying premium to an insurance company.

A pool is created through contributions made by persons seeking to protect themselves from common risk. Premium is collected by insurance companies which also act as trustee to the pool. Any loss to the insured in case of happening of an uncertain event is paid out of this pool.

Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that it spreads the risk of a few people over a large group of people exposed to risk of similar type.

Medical Card - To upgrade or not to upgrade?

My husband bought a medical card from a renowned insurance company 7 years ago. The cover was RM100 for Daily Room And Board, RM50K for annual hospitalization and surgical procedure, RM150K lifetime limit, expired at age 70. No claim has been made so far.

Now that he is 7 years older, at the age of 50, we feel that 70 years old is not very far away. Reviewing the medical policy, we ask ourselves whether it is necessary and worthwhile to upgrade the medical card to a higher plan, or buy a second medical card to maintain the terms and conditions in the first medical card. The T&C was better and insurance charges was cheaper.

On inquiry, upgrading to age 80 will cost an additional monthly premium of RM191.30. To purchase a second medical card will cost another monthly premium of RM250 on top of what he is already paying RM150p.m.

After evaluation of the objective of upgrading, which is to ensure some kind of hospitalisation protection after age 70 to 80, we decide to invest RM250 monthly in an investment tool that can give us an average return of 8% per annum. This will give us an estimated dedicated hospitalization fund of RM137K at age 70.

Living in Kota Kinabalu

It is a blessing to live in Kota Kinabalu. My life is casual and relaxing.

My house is located at a convenient spot. I can buy groceries and daily needs just about any direction near my house. My office is 10 min within walking distance. My children's school is 6km away from my house, and most of the time I can avoid traffic jam at different hours using different routes. I love jogging at Taman Tun Fuad Stephen early in the morning especially after rainy nights. The fresh air and the sound of stream flowing down from the slope is simply refreshing. Sometimes I choose to jog round the man-made lake at Likas Sport Complex. When time is a bit rush, I jog at Taman Tropicana.

A cup of hot chocolate

I read this in a Chinese magazine, which speaks to me what is really important in life. How we now live, is really the choice made by us.

A group of graduates, well established in their careers, were talking at a reunion and decided to go visit their old university professor, now retired. During their visit, the conversation turned to complaints about stress in their work and lives. Offering his guests hot chocolate, the professor went into the kitchen and returned with a large pot of hot chocolate and an assortment of cups – porcelain, glass, crystal, some plain looking, some expensive, some exquisite – telling them to help themselves to the hot chocolate.

When they all had a cup of hot chocolate in hand, the professor said: “Notice that all the nice looking, expensive cups were taken, leaving behind the plain and cheap ones. While it is normal for you to want only the best for yourselves, that is the source of your problems and stress. The cup that you’re drinking from adds nothing to the quality of the hot chocolate. In most cases it is just more expensive and in some cases even hides what we drink. What all of you really wanted was hot chocolate, not the cup; but you consciously went for the best cups… And then you began eyeing each other’s cups.

Now consider this: Life is the hot chocolate; your job, money and position in society are the cups. They are just tools to hold and contain life. The cup you have does not define, nor change the quality of life you have. Sometimes, by concentrating only on the cup, we fail to enjoy the hot chocolate God has provided us. God makes the hot chocolate, man chooses the cups. The happiest people don’t have the best of everything. They just make the best of everything that they have. Live simply. Love generously. Care deeply. Speak kindly. And enjoy your hot chocolate.

Protecting my mangoes

In the previous mango season last year, bats came to enjoy my ripe mangoes at night leaving behind the mango skin with the flesh gone. This year I wrap the fruits about to ripe with plastic bags. This way keep the mangoes away from the bats. The birds like to poke on the fruits as well. I just couldn't wrap every fruit so let the birds enjoy the fruits together with me.

Mango Tree

It is now mango season. I have an apple mango tree just in front of my house. The flesh is smooth and sweet and juicy. Yummy! I eat at least 2 to 3 fruits everyday. This is also the season I find myself a few kilos heavier.

Mangoes are usually given to my family members and guests. Everyone loves my mangoes.......