A turn of luck

The Chinese believe that luck (Wun) ranks second to a person’s fate. Since they know that fate is nigh impossible to change they try the next best thing that is to improve their luck. If they failed to improve their fortune then they look towards Fengshui for help. In their attempts to change luck, many tend to believe in things that border onto superstition.

For example, many Chinese believe in lucky numbers say – 1, 2, 3, 8 and 9 and unlucky numbers – 4 & 6. These numbers vary from dialect to dialect which really depend on their tonal sounds. Some Cantonese will say that the number 6 sounds more like ‘rolled over’ (by a motor vehicle) or burned while Fujianese may say the number sounds like ‘luck’. Whatever their dialects most Chinese would agree that the number 4 sounds like ‘death’; and they avoid the number like a plague. But most would love the number 8 since it sounds like ‘Fai’ (prosperous). If you think only the Chinese believe in such things, the West is also known to avoid the number 13 and especially Fridays that happen to fall on the thirteenth day of a month.

If only such beliefs hold true, then everyone on earth will know how to change their luck for the better. However just like fate, one believes that we can change our luck if we diligently work at it.

We tend to believe that people who became rich were just lucky – they did it at the right time and were in the right place, many would say. However, unless they were born with a silver spoon which falls under the realm of fate, the rich have to toil for their riches too – in case readers think otherwise. They sometimes create their own turn of luck going forward and become successful in life.

Obviously a small fry like me cannot dream of becoming as rich as the tycoons in town. That would involve changing fate not just luck. But anyone can keep working at both fate and luck.

I invested in a double storey shop in 1996 because it was affordable and in a good location – the town center of Port Dickson, a popular beach resort. The building was completed a year after the Asian Financial Crisis struck. No tenant wanted it unless they got it for a bargain. Meanwhile the interest rate on the loan almost doubled because banks were badly hit by bad loans and at the time, cash was king. While other owners eagerly let out their entire shops at throw away monthly rentals of RM2, 000 or less, I stuck to my asking price of RM3, 000. The monthly installment for the loan had increased by a third to RM 4, 000 because of the higher interest rates. Life was tough to keep up with the installments, especially after a 50% pay cut and increased household expenditure.

However, once the other shops were fully tenanted, prospective tenants like McDonalds, Bakers Cottage, Telecoms and a couple of financial institutions seemed interested in renting my shop. The ground floor of the shop was finally let out to a financial institution for RM 2, 800 and the 1st floor to a law firm for RM 700 grossing RM3, 500 a month – which almost doubled the prevailing tenancy market rate.

Meanwhile the economy turned for the better and interest rates came down quickly. With a huge sigh of relief, the loan installment went back down to RM 3, 000 a month.

The financial institution had to move out three years ago because it was being merged with its parent. It was paying a revised rental of RM3, 150 before it vacated. The new tenant who immediately took over the ground floor premises from the financial institution has since been paying a negotiated rental of RM 3,500 a month. The law firm has vacated the 1st floor for some time now and one is still looking for a tenant who can pay RM 1,000 a month.

The loan will be fully repaid in a few years time – hopefully with the rent. A bank had approached me with a view to buy the shop because of its excellent road frontage and ample car parks. But since the market for commercial properties had just started to move up, one will wait for the right time to sell.

It is fortunate that one learned how to value realty while auditing a medium sized real estate agency in London in the 1970s. The agency partners had taught me how to. If one could sell it to the bank once commercial properties peak, it would provide a good retirement fund for me.

Therefore if we want a turn of luck for the better, we have to work hard at it. And that would invariably include the right timing.


Note:
Rental figures are provided to emphasize the point of how to turn our luck. It also provides an example of a good investment for those planning for their retirement. When a loan is fully repaid, pensioners will get to use the entire rentals from the commercial property, net of tax and outgoings. It will also provide steady income for our wives and kids if we are no longer around. Yes, one pays income tax on the declared rental income – so no worries with providing the figures!