You have a degree. You have a good job. You save your money. You’ve just bought the new Segment B Japanese car. There’s the Vios, City, Mazda 2 and the Almera. You drive it to a friend’s party.
How likely is it that all your friends will be swarming around that car and congratulating you on having finally “arrived”?
Assuming everyone in the party is doing precisely that, you had better wake up and understand that you are mixing with the wrong crowd. Some senior managers earn more than the price of a segment B car.
Have you ever wondered why you bought that car? Does it save you lots on petrol? Is it problem free? Was it the best car you could afford at the time? Actually, that last reason is the actual reason.
Most people want to buy the best they can afford at any given time. And it’s likely most of their peers do not share their level of success and are able to afford a Japanese branded segment B car.
Their peers may likely still be stuck driving a national brand. Or they may still be driving an old car. So, you find you are one or a few steps ahead of the pack.
Well, if that’s really the reason behind your recent purchase, here’s a better way of showing the others you’re ahead of them – buy a property. Even if it’s an affordable one below RM300,000.
Stay in it, save on rental and start planning for an upgrade in the next five to 10 years. Continue to receive rental from that first property after you have upgraded to a better one.
By the way, will your friends be impressed with your sub-RM300,000 affordable property? Probably not because they may be staying in a much better equipped condo even though they are paying a high monthly rental for it.
They have the style. You just own an affordable apartment. Should you be impressed with their rented condominium then? Well, how about visiting them often, enjoying the facilities, saying some nice words and continuing to be friends with them?
They are not impressed with your apartment, so why are you so impressed with their rented condominium?
But life’s like that. Do you enjoy the seaside better when you are in the Maldives versus the sandy beaches of Pulau Perhentian? You may feel much better but only because you paid so much more to go to the Maldives.
By the way, this is how much a RM200,000 property may appreciate in 30 years. Briefly, it’s hedging against inflation.
If you absolutely must buy a new car, base Viva starts from RM23,000 and base Saga from RM28,000.
This article first appeared in kopiandproperty.com
Charles Tan blogs at property investment site kopiandproperty. He dislikes property speculators and disagrees that renting is better than buying. He thinks it’s either property or poverty. He is presently the CEO of an auction house auctioning assets beyond just properties.