Tax & Net Profit

in this post, lets do some quick calculation to see our net return after tax deduction.

Fix Deposit (FD)
Assume that we invest RM100,000, with 3.5% profit. so, we will get RM3,500 cash on our investment. which is, pretty good. which strangers would want to give you thousands for free?

but, we often do not realize that THAT profit is not net. we still haven't deduct 25% tax which is around RM875. so actually, we will only get RM2,625. which the bottom line is, still good cos which idiots would want to give u thousands too?

Unit Trust (UT)
Assume that we invest RM100,000 with 10% profit. do we smell RM10,000 in there? do we KNOW that it is net? now tell me which bull doesn't want that?

FYI, the average return percentage for FD is around 3.5% - 5.5% p.a (before tax), whereas for UT is around 10% - 15% p.a (after tax). let me stress on that, while FD has hidden tax, the tax for UT is deducted earlier and there, your return is still higher than FD, right?

and while some of you are screaming that ASB is even faster and higher, well, i just don't know what to say. i would say stock are the fastest and highest. but what i can say is that, i advise you to DIVERSIFY.

always bear in mind that, UT, FD and even ASB, is meant for medium-long term investment (tak cepat mana pun tetapi berdasarkan kebijaksanaan kita memilih yang mana lebih menguntungkan). if you want it quick, by all mean seek for other resources but say 'No' to swiss-cash thingy ok ;)

till next time, muah...