r/financialindependence • u/almost_retired • Aug 11 '21

Malaysia just removed itself from the list of FIRE destinations for most people.

You can find my original post about retiring and moving to Malaysia here

The "Malaysia My Second Home Program" (MM2H) targeting foreign retirees had been suspended since August last year. The Malaysian government has just re-launched the program, but with some very steep requirements:

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  • Demonstrable monthly offshore income of $RM40,000 (~US$9,500) vs 25% of that previously.
  • Bank deposit in Malaysia of $RM1 Million (~US$235K) vs 25% of that previously.
  • Must spend at least 90 days a year in Malaysia vs 0 days minimum previously.

Malaysia used to be a very desirable FIRE destination because it was inexpensive, safe, English speaking, had good infrastructure and it was relatively easy to get a retirement VISA.

That last item is pretty much gone. If you are FIREd and pulling $10K a month, you probably have better options than Malaysia.

Oh well.

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179

u/scorp171 Aug 11 '21 edited Aug 11 '21

I used to live in Malaysia. I'm nowhere near my FIRE number, but always had Malaysia at the back of my mind.

I'm still trying to comprehend what will one do with RM40k monthly. I lived a king lifestyle with a meagre salary of RM5100 after tax. A beautiful 3br condo with a view of the KL tower, enjoyed the nightlife/food, traveled across.

Even with SWR of 4%, I'll have to target C$3M nest egg for a return of RM40K. Boom, there goes Malaysia off the list.

Edit: I was single, often threw parties for people/friends, maintained 3br for friends to crash rather than taking Grab (their Uber), In my condo, had access to a 24*7 swimming pool, Steam sauna, an amazing gym.

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u/gRod805 Aug 11 '21

Yeah its crazy that they would do something like this considering that usually expats want to live near other expats to some extent, so even if you do have $10K a month pension, I doubt you'd want to be the only expat around.

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u/vanisleGray Aug 12 '21

My guess is that they have more than enough people willing/able to pay this new amount, that they can raise the cost and limit those coming in. Malaysia is next door to China, which has 5.3million Millionaires:

https://www.asianinvestor.net/article/millionaires-in-china-to-nearly-double-by-2025-credit-suisse/470521#:\~:text=Ranked%20second%20globally%20in%20terms,on%20Tuesday%20(June%2022).

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u/2OP4me Aug 11 '21

Because it’s in no way their interest to furnish your retirement into a closed economic system that has minimal benefits for their nation?

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u/pdoherty972 FIREd @ 54 Aug 11 '21

How are they “furnishing your retirement” when you’re bringing money in from another country and paying for everything in their country? It’s literally an economic benefit to them.

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u/gRod805 Aug 11 '21

Its not a closed economic system. The retirees will spend money at restaurants, tours, services in the local market.

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u/2OP4me Aug 11 '21

Oh wow, I wonder if the East India company said the same thing .

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u/TheGamingNinja13 Aug 11 '21

So watch the money leave the country. How will Malaysia replace the money lost?

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u/2OP4me Aug 11 '21

You lack an incredible amount of self awareness if you don’t realize how much everything you’re writing lines up with colonialism. Just because you bring some money to an underdeveloped country does not mean that the relationship isn’t exploitive or harmful. How much of that expat money is truly leaving their enclave? How much is going to what remains a gated or closed community? How much is just going to corrupt government officials?

If you can’t realize how fucked this practices like this are, no amount of discussion will get through to you.

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u/TheGamingNinja13 Aug 11 '21

Are they bringers workers with them when they land? Are they even allowed to set up businesses on those visas? No. Which means literally every single thing they pay for is owned by a Malaysian person benefitting from having a person with money spend it in their country.

That gated community has utility expenses. These expats need to eat. They need taxi services. They enjoy their leisure time at spas, clubs, bars, restaurants, malls, etc ALL of which are owned by Malaysians. The whole point of this visa was to make sure one was self sufficient so they could come spend money but not earn it there.

But yes, dismiss the conversation before it began…

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u/sufferingdude Aug 13 '21

Further, the program's usage really doesn't look colonial at all. By far the biggest group is mainland Chinese with Japan and Bangladesh pretty close to each other at 2 and 3. Maybe you could argue that Japan has a colonial history but mainland China and Bangladesh??

(The MM2H ads usually end up showing mostly British and Japanese retirees for some reason so there might be people who actually believe that the majority comes from these two groups. The mainland Chinese on the program outnumber the next 3 countries but that is not surprising because their population is so big.)

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u/ZaviaGenX Aug 11 '21 edited 29d ago

Where were you staying with just rm5k a month with a 3br condo of klcc? Id think rent for a 15000sqft condo there is like rm4-6k/mth alone?

Edit: 1.5k sqft

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u/scorp171 Aug 11 '21 edited Aug 11 '21

I don't know the prices now. I was there in 2016. My company got bulk rental discounts. I think mine was between 2k-2300 per month back then.

Edit: and I wasn't looking to particularly FIRE that time. I was still saving. This was just my deputation allowance and I still got my full salary in my base country which I saved 100% of it(I also got low taxed as a non resident loophole that year). So I made a decision to spend all of deputation allowance to maintain my travels and standard of living.

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u/ZaviaGenX Aug 11 '21

Ah the edit makes sense.

I was a SEA expat at about rm10k+ and I definitely was far from kingly life. 2k is a really good deal BTW. Its crazy expensive especially with a klcc view iirc.

(if anyone is hiring for ops, do PM, miss expat life ) xD

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u/scorp171 Aug 11 '21

True, I think sea expats makes the most sense. You can enjoy 40-50% of the days completely free and make a ton of money. I knew sea expats who were only on deputation, so they received their base salary in base country and 10k+RM there. It would be magical for somebody trying to FIRE.

(Even people from any Big4 consulting firms from developed countries had a similar situation).

1

u/ZaviaGenX Aug 12 '21

Im, uh, from SEA myself. The rm10k was (almost) the whole package 😆. Im like the discount expat.

But yea, had more free time while I was a director then at any point in my career. Was really weird experience when my boss was like "don't work so hard, don't have to be in office all hours" n took a while to get use to.

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u/ManagedIsolation 29d ago

Id think rent for a 15000sqft condo there is like rm4-6k/mth alone?

15,000sqf...? That is a big place.

We lived in a brand new condo, 1,700RM/month for 3 bedroom 1,600 sqf.

Had two rooftop pools, two more pools on the 8th floor with a water park for the kids, also had a community garden where you could get your own little plot and a petting zoo with rabbits, 3 deer, 6 goats, some ducks, a few chickens, a turkey, etc.

We also lived at high-end condos in KL Sentral and KLCC, they were around the 5,000-6,000RM a month mark. They looked a bit more swanky, but wasn't 3x the price kind of better.

1

u/ZaviaGenX 29d ago

Oops 1,500 sqft.

Can you share the loc of the 1,600 place? Looking for a place next year, considering parts of KL

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u/ManagedIsolation 29d ago edited 29d ago

Here you go

Nidoz Residences
https://www.propertyguru.com.my/property-listing/nidoz-residences-desa-petaling-for-rent-by-simon-soon-32165807

And a video on it https://www.youtube.com/watch?v=JLg20biBOIA

There is no public transport so you really need a car there.

The Sentral Residences is also really good, different style and in KL Sentral so really great public transport access.
https://www.propertyguru.com.my/property-listing/the-sentral-residences-kl-sentral-for-rent-by-walter-kwan-32840859

At TSR you have covered walkway all the way to the airport express train which was great when I travelled a lot for work. Get into the airport in Manila, transit in Singapore and be back in my apartment in KL without once going outside.

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u/ZaviaGenX 29d ago

https://www.propertyguru.com.my/condo/nidoz-residences-desa-petaling-11690

Its selling for 600k onwards but renting at 1400? That's less then 3% roi, below most banks BR... Doesn't make sense. Definitely will kiv. Thanks.

1

u/ManagedIsolation 28d ago edited 28d ago

Oh yeah, real estate is a really really shit investment in Malaysia.

The rental income is usually less than the mortgage payments so the landlord has to top up out of their own pocket.

Take in to account that your mortgage will be like 30 years, maintenance will go downhill after a couple of years as the developer leave the property at the end of the defect period.

Once the developer is gone, the owners are then responsible for maintenance and everyone wants to reduce the cost and maintenance is skimped on. Buildings start to fall into disrepair after 5 years, and turn to shit after 10. Would have to think what they'd be like after 20 let alone 30 years.

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u/ZaviaGenX 28d ago

Hard disagree. Hence i wanted to know that location cos it was an abnormally.

I have 1 investment property there, from 2016-2020 I collected 7.5% p.a. in rent. Another local friend has one in Subang Jaya from like 10 years ago... 9ish% based on purchase price.

(i lost my tenant early this year, sigh. But its paid off till next year so not too worried.)

Due to inflation, a long loan is profitable. Also afsik economic pressure would equalize the rental and sale price. Im told long ago the average rental return for residential is 4-6% p.a., assuming 3.5% in mortgage interest. (adjust accordingly).

Maintenance is up to the owners imho, hard to predict. Stupid hoa/jmb/mc can screw a property. But the Strata laws does limit it, I decided against property in Indonesia (even more inflation lol) cos their laws and enforcement regarding property is worse even tho I predict a more profitable investment. Higher risk higher reward.

Do you own property in Msia to have that kind of opinion? Sounds like a interesting story behind it. 😅

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u/ManagedIsolation 28d ago

Nah, I own property elsewhere.

4-6% isn't worth getting out of bed for.

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u/ZaviaGenX 28d ago

That just rental. Capital appreciation in a developing country is also high.

Covid fucked my capital appreciation tho. Lost almost all the cap appreciation since 2017 in 36 months. Sigh.

Whats your returns like wherever you are? And the mortgage interest. If you don't mind sharing percentages.

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u/mawhonic Aug 11 '21

I think the guys adjusting this were thinking about it from a younger person's point of view. You need money to save for retirement mentality since the haven't wrapped their head around FIRE.

Alternatively, they might just be forecasting super high inflation post pandemic?

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u/Grim-Sleeper Aug 11 '21

Or maybe, they just want to be selective about who they attract into the country. Everything else being equal, it's not unusual for countries to prefer well-off immigrants. A low-budget retiree isn't doing much to contribute to society.

And ultimately, it is their prerogative to set the rules.

1

u/pdoherty972 FIREd @ 54 Aug 11 '21

Selective maybe. But at the astronomical level they’re setting no one will go there, as there are far too many other places with reasonable requirements and that are as nice or nicer places.

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u/mawhonic Aug 12 '21 edited Aug 12 '21

I think you're giving them too much credit. I'd normally agree but with the numbers they are asking for, it crosses the line between being selective vs being completely prohibitive.

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They should split the program into a MM2H retirement for long term visas with a minimum age limit and a Digital Nomad short term visa which is a bit more expensive but without the age limit vs trying to merge them all together here. One of the toughest parts about SEA nomads is the continuous visa runs, it would be nice to have a base where they can opt to stay longer if they want to avoid travelling for a while.

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u/OpposablePinky Aug 12 '21

This change seems like a way of reducing an influx of older, unemployed immigrants. Countries want younger immigrants that will work and contribute.

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u/FantaMenace2020 Aug 12 '21

I'm still trying to comprehend what will one do with RM40k monthly.

That's hookers and blow level of money in Malaysia, like throughout the month.

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u/yongelee_ Aug 11 '21

How did you find that condo? Airbnb or local listing? And how much was it?

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u/scorp171 Aug 11 '21

I found it through my company. They have deals with the condo management companies and got a bulk discount. I think mine was around 2k-2300RM per month.

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u/yongelee_ Aug 11 '21

Ah cool, do you think someone could contact those kinds of companies and get a deal like that? Or do you have any idea of how to get those deals independently? Like what to look for

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u/scorp171 Aug 11 '21

You'll have to be employed by those companies - and seeing the work culture of Malaysia, I would say it would beat the purpose of this subgroup.

I would value my 70-80hrs/week way more than 1000-1500rm per month.