Do Maybank and CIMB Bank **ASB Financing **really help to grow your money faster by using **Power Of Leverage**? Some say yes, some say no. Let’s do some comparison and analysis. Below are the past performances of **Amanah Saham Bumiputera (ASB)**:

The results show that ASB’s average returns of investment (ROI) is 10.74% p.a. Basically, the return is higher than BLR rates as shown for the past 16 years except year 1998 due to global economic crisis.

Therefore, the **Financing Package **offered by bank will be one of the main considerations affecting your make money plan by finance money from ASB loan and invest in the unit trust. Example: **Maybank ASB Financing-i loan **is now offering: -

- BLR – 1.65% (first 3 years)
- BLR – 1.50% (thereafter)

What if the package was offered at **BLR + x.xx%** previously? That makes a lot of different! Click here for more features of Maybank ASB Financing-i

**Can ASB’s ROI Sustain Monthly Loan Installment?**

Let’s do some calculation comparison based on Maybank ASB Financing-i package for loan part and returns based on average performance of ASB since 1993 till 2008.

**ASB LOAN CALCULATION**

**Assumption:** Loan Amount = RM200,000, Loan Tenure = 25 years, BLR = 5.55%, BLR-1.50% (for whole tenure) for easy calculation

**INVESTMENT CALCULATION**

**Assumption:** Lump Sum Investment Amount = RM200,000, Average Return = 10.74% p.a, Investment Time Frame = 25 years

**Note:** Future Value of Investment = RM2,562,376.69 is a compounded return of 10.74% p.a. over 25 years. Assuming this is not happening because you will need to withdraw the returns of ASB after one year to pay off your monthly installment.

**Cash Flow Analysis**

**Cash Flow = Monthly ASB Return – Monthly Loan Installment**- Monthly ASB Return = [RM200,000 x 10.74% p.a.] / 12months = RM1,790/month
- Monthly Loan Installment = RM1,061.20
- Cash Flow = RM1,790.00 – RM1,061.20 = RM728.80

From the calculations, you are earning RM728.80 of **positive cash flow** every month from the investment based on all assumption inputs we have made. It is a good passive income investment!

On top of that, you are actually paying off the portion of the principal loan for every installment you have paid. The best part is, the portion you pay for principal loan is getting increased for every installment. See the table below:

- 1st Month: RM1,061.20(Installment) = RM675.00(Interest) + RM386.20(Principal)
- 300th Month: RM1,061.20(Installment) = RM3.57(Interest) + RM1,057.63(Principal)

After 25 years, the RM200,000 is belong to yours by paying nothing from your pocket! I hope you have a clearer picture now on the Amanah Saham Bumiputera investment by using bank’s money to fully utilize the **Power of Leveraging**.