Blog from Malaysia

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physdude
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Location: Kuala Lumpur

Blog from Malaysia

Post by physdude » Wed Nov 29, 2017 12:56 pm

Since my introduction thread at viewtopic.php?f=1&t=9396 was developing into more of a blog, I thought I might as well go all the way and create an actual blog here.

A nice recent find which I took advantage of again yesterday is a brilliant Arabic buffet right next door to my apartment for under $4 (no lamb though at that price but there are many chicken and vegetarian dishes as well as cut fruits for dessert). It is unfortunately only for Monday and Tuesday afternoons. I still find it pretty insane that this whole buffet costs about the same as a frapuccino at the nearby Starbucks or a pint at a downtown pub (despite Malaysia being Islamic, alcohol is widely and easily available but heavily taxed). Even though I have a lot of economics and finance training, I have no plausible explanation for the insane price differences here.

Over the last week, I have found a few places to play bridge and it has been great to get back into the game. It is mainly expats who play it here and one thing about most of the areas where the expats live is that they are not very accessible by public transport (I myself live in a very local area). In fact, since public transport has come in as an afterthought here, one finds very nice modern trains but little connectivity to surrounding areas via sidewalks etc. and one even has to walk carefully on the road in many instances to get to the destination which might only be a few hundred meters from the train station. Hence, I have had to use a bit of uber and grab (uber competitor in SE Asia) which is a bit un-ERE like though most rides from the nearest train station are likely to be only about $2 or less. On the plus side, there are enough places accessible via the train stations for most of my needs. The bridge games are a worthwhile exception but are great value for money (they cost anywhere from $1-$4 for a 3-4 hour duplicates session depending on the venue in order to defray the cost of supplies, rent and the provided coffee, tea and biscuits). Some of the players are very wealthy and a few are a bit puzzled or somewhat disapprove of my ER but most are fine with it and are quite nice (the disapproval of the few is also mostly just implied and very limited). I must admit that some of the expat meetups I tried before, especially the largely Japanese ones (a lot of Japanese retire in Malaysia), ended up becoming very uncomfortable as most refused to understand why anyone would be doing this with sometimes very direct insults or very direct implications that I must be doing something unsavory to pay the bills.

I am leaving for a 10 day trip to Thailand this weekend as there are a few places there that are on my bucket list. I am going to be doing the train journey over the river Kwai (made famous by the eponymous movie) and the UNESCO world heritage sites Ayutthaya and Sukhothai (the best way to view these sites is via bicycle which seems really cool). The return flight was not the cheapest at US$125 and the whole trip will probably cost me almost US$1k everything included (staying at mid range hotels) but I think it is okay since my expenses have so far been relatively low and it ticks three items on my list.

Looking at how far money goes in Malaysia, I think that geo-arbitrage is the easiest way to attain ER. Living on $600 a person per month takes work in most developed countries but is trivial in places like Malaysia where a lot of the infrastructure is almost as good as Europe or the US (though I do detest the extreme car-centric culture, especially outside the capital - it is, believe it or not, even more car-centric than the US).
Last edited by physdude on Wed Nov 29, 2017 1:50 pm, edited 1 time in total.

MDFIRE2024
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Re: Blog from Malaysia

Post by MDFIRE2024 » Wed Nov 29, 2017 1:37 pm

Hi physdude. Great that you have decided to create a journal an share your stories about ER in South-East-Asia. Someday I also want to travel to the region. As you have said it is (relatively) difficult to live on $600 a person per month in a developed country, but it isn't impossible for ERE-minded people. If you don't mind can you share some thoughts about your ER decision. Are you risk averse and therefore decided to ER on a lower SWR? I do understand that geo-arbitrage is very good in ER-phase, but did you also earn and save your money while living and working in such a country?
Well, would be interesting to read another story how you have achieved ER? Thank you so far and I wish you a great trip through Thailand. Enjoy!

physdude
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Re: Blog from Malaysia

Post by physdude » Wed Nov 29, 2017 2:37 pm

I was already familiar with Malaysia as I had lived in nearby Singapore (which was itself part of Malaysia in the past and which therefore has a very similar culture) for an entire decade earlier. I also knew that it had an incredibly low cost of living (the lowest I have seen so far by wide margin), decent infrastructure and that it had a great visa program suitable for early retirement (MM2H). Given that my nationality is third world and I missed a great opportunity earlier to acquire a first world nationality (I am not divulging it right now for privacy reasons but it is probably not that hard to guess if you read my posts carefully), the last point was very important to me. Interestingly, I would have probably still chosen Malaysia even if there were no visa/stay issues anywhere in the world with other possibilities being Bali or eastern Europe (though both these places don't offer as good value for money as Malaysia). While third word nationality has never caused me any economic loss, it is a major hassle when it comes to travel, particularly to Europe, and many countries like Thailand charge high visa on arrival fees when you are from a third world country (which is still better than Europe where I have to plan and book every single bit of the trip months in advance before I can even apply for a visa which will take a couple of months to process and which is usually given for just a single trip).

I mostly earned my money in HK and a few more details are available on my introduction thread linked to in the first post. The cost of living there is about 5-10 times higher than in Malaysia and is very much on the higher end of the spectrum.

For a really ERE inclined person, I think it wouldn't be difficult to live on very, very little in Malaysia. Renting a modest 2br apartment in a small town would be under $150 a month, food in small towns is about the same as or a bit cheaper than in KL (about $1.5 for a decent meal or about $150 per couple per month) and high deductible health insurance would cost about $25-30 per month. I am not sure how you could avoid a car in a small town here due to the extremely car-centric culture and facilities but a simple low cost car like an old Toyota or similar could be run on as little as $100-150 per month. Adding a bit for utilities which are quite cheap here means a budget of about $500 per month for a couple is quite doable without any significant discomfort (in fact, some families here do live on less). If one likes gardening, one could also rent a house with a large garden for the same price in most towns (apartments are more expensive in Malaysia in small towns) and reduce the food budget further as it is a fertile place which is easy to grow food in.

This isn't even getting into other options which I have thought about theoretically but which are way too crazy for me. Living near a Sikh temple (all Sikh temples always serve free food) could send your food costs to near zero, living in a large van which I have heard about in the US could send your rental to zero in exchange for slightly higher car costs etc.

Since I had a pretty good income in HK and saved a lot of it, my SWR for my normal living expenses excluding travel is under 3% even in KL. Hence, I have not focused on cutting expenses too much. On the other spectrum, some of the expats I have seen who have retired here are USD multimillionaires. The place I played bridge in yesterday was in the house of one such person, the house being a large mansion with its own private pool (not a small one either). Another expat there was mentioning how many staff they had to employ to take care of the 12 bathrooms in their house etc. (you get the picture).

physdude
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Re: Blog from Malaysia

Post by physdude » Wed Nov 29, 2017 3:15 pm

Since I had too much coffee late in the day, I feel like writing a bit more though a lot of this is probably only relevant for those seriously considering moving to Malaysia.

There are a few downsides to living in Malaysia which I think I should mention to even out the discussion. Needless to say, I think the advantages outweigh them by a wide margin as I wouldn't be here otherwise.

The first is that you should never discuss much politics or religion (especially the state religion here which is Islam) which is probably good advice anywhere anyway. This is even more important here as being atheist is technically illegal and, while nobody is likely to care enough to actually do anything about it, it is way better to not mention it (I am an atheist and did mention it until I became wiser). Even though the country is officially Islamic, it is not strict and pretty much every corner store will sell you a beer (heavily taxed) and the bar district and nightlife in general in KL is fairly active. I find that most of the people here have a simple live and let live attitude which is pretty good.

Another topic not to discuss is homosexuality which is also technically illegal here even though one of my old Malaysian classmates who is settled here is gay and lives quite happily and openly with his partner with no interference despite the official stance (again, the live and let live attitude unless you go out of your way to point out that you are different).

As in any other place, you will have some weirdos and offensive people. Casual racism is also quite prevalent among some and is not considered particularly bad in general unlike in the west. In any case, it is easy to avoid these people if you are ER but I have been reliably informed that working here is not that great due to this reason.

Snatch thefts, pickpocketings etc and other non-violent crimes are apparently common here though I have never encountered it myself. In fact, I feel more safe here than most other places and some expats here have also commented to the effect that this concern is overblown.

Weather wise, it is always warm and humid and it rains a -lot- from Nov-Mar. Apart from too much rain, I actually like this weather but ymmv. The rain does mean dense vegetation everywhere and allows for some really nice parks (KL has some of the best parks around) and forests. However, it also does sometimes lead to flooding though I haven't yet encountered it yet.

slowtraveler
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Re: Blog from Malaysia

Post by slowtraveler » Wed Nov 29, 2017 10:11 pm

Thanks for this. I've been following your blog, considering checking out Malaysia either concurrently with or after Thailand but the language barrier could be a challenge.

It seems way cheaper there than Thailand. Here, I'm paying ~$100 for a ~20sqm apartment in the central area in a main town but more than that on food and massages. Transport is cheap here too but I'll probably get a motorcycle soon to lower this even more.

I also feel safer here than I did where I lived most of my years.

MDFIRE2024
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Re: Blog from Malaysia

Post by MDFIRE2024 » Thu Nov 30, 2017 12:41 am

Thank you for sharing physdude! That is great information about Malaysia, especially the part about the difference between working as an Expat and living ER. Now I am a follower of you journal with your experiences about living and traveling in SEA.

physdude
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Re: Blog from Malaysia

Post by physdude » Thu Nov 30, 2017 2:08 am

slowtraveler wrote:
Wed Nov 29, 2017 10:11 pm
Thanks for this. I've been following your blog, considering checking out Malaysia either concurrently with or after Thailand but the language barrier could be a challenge.

It seems way cheaper there than Thailand. Here, I'm paying ~$100 for a ~20sqm apartment in the central area in a main town but more than that on food and massages. Transport is cheap here too but I'll probably get a motorcycle soon to lower this even more.

I also feel safer here than I did where I lived most of my years.
Malay is a very easy language to learn and a few months dedicated work can make one almost a native speaker from what I have seen. It is also written in the Roman script and is phonetic which makes it quite easy to read/write unlike Thai.

The housing here never gets that small (space being no problem here) but I know many people who share an apartment and end up paying around $100 per month for a room in KL and this could be easily reduced to maybe $50 a month in small towns while keeping the area at more than 20 sq m per person. There are even ~60 sq m subsidized apartments for sale for under $20k for poor locals only (https://www.propertyguru.com.my/propert ... 7C%7C8%7C4 for eg) and you could probably get this on rent for really cheap if you find one. Some of the more remote and older individual houses are also sometimes very cheap to purchase though foreigners are not allowed to purchase cheap houses. A quick search yielded a 1280 sf (~120 sq m) house for sale for about $35k (https://www.propertyguru.com.my/propert ... C%7C19%7C4) and it doesn't really look too bad. Rental for something like this is about a $100 a month (https://www.propertyguru.com.my/propert ... 7C%7C9%7C1 for eg).

Labor is not as cheap here as in Thailand so massages are more expensive but food can get -really- cheap. In a small town in Sarawak, I was able to get wonderful freshly made local desserts at less than $0.10 each (3 for RM 1 which is $0.25 or about a third of a price as in KL). As I mentioned earlier, the unlimited Indian vegetarian meals for under $2 which you find in many places is a really great deal.

I had an Australian colleague in HK who had a real bad experience driving in Thailand. He got involved in an accident and police demanded a large bribe which he refused to pay and he ended up being jailed for a month despite being an experienced lawyer! He and his wife were actually planning to retire in Thailand but this experience put paid to that idea. I would be cautious about driving in most of SE Asia due to this reason though it looks cheap to do so. However, I do know a few people who ERed to Thailand and love it there.

Riding a motorcycle instead of a car here would obviously reduce costs considerably, particularly if you are in a small town and some locals do do it. However, the rain can make this a bit of a downer.

I think a committed ERE person could make do on as little as maybe $200 per month ($50 for a room in a house, $75 for food, $25 for internet plus utilities, $50 for a motorcycle).

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singvestor
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Re: Blog from Malaysia

Post by singvestor » Thu Nov 30, 2017 4:48 am

Welcome! I will follow your blog and am so curious how it will turn out! I worked next door in Singapore for ten years or so... Worked a lot in Malaysia and at the beginning it was always my hope to retire in Malaysia. After some years I grew very fed up with two, three issues and I have since discarded the plan.

frihet
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Re: Blog from Malaysia

Post by frihet » Thu Nov 30, 2017 5:57 am

Thanks for sharing physdude. Always good to hear about ERE from low cost locations.

Also interesting to hear that capital gains taxes are none existent. I live in Sweden which is quite favorable for living off capital at the moment, personally I'm still in the accumulation phase though. But laws have been passed in the wrong direction recently, slightly higher tax on investment accounts and talk of imposing an emigration tax. Have a feeling that this are just the first steps. So always good to hear about options.


Are you an official immigrant? How does that work? Do you need to show a specific amount of money?

physdude
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Re: Blog from Malaysia

Post by physdude » Thu Nov 30, 2017 8:49 am

The visa I am under is a non-immigrant long term visa called MM2H. More details are under my introduction thread linked to in the first post which explains the procedure in some detail.

taemoo
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Re: Blog from Malaysia

Post by taemoo » Thu Nov 30, 2017 11:15 am

Malaysia sounds like a great place for geo-arbitrage. Although more expensive than some other areas in the region it has a lot of stuff going for it. I wish the MM2H didn't have the income requirement, only way I can get it is to apply for it while I'm working. But I'm not well traveled so I would like to FIRE and see the rest of the world before I settle into one place longer term.

slowtraveler
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Re: Blog from Malaysia

Post by slowtraveler » Thu Nov 30, 2017 11:49 am

Could you apply for MM2H before ERE to show proof of income then pull the plug and move over or do they require ongoing proof of income? Even then, capital gains may count as income.

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Re: Blog from Malaysia

Post by jacob » Thu Nov 30, 2017 11:51 am

@st - Yes (first one). I asked about that already and the answer is likely in the link in the OP.

physdude
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Re: Blog from Malaysia

Post by physdude » Fri Dec 01, 2017 9:07 am

taemoo wrote:
Thu Nov 30, 2017 11:15 am
Malaysia sounds like a great place for geo-arbitrage. Although more expensive than some other areas in the region it has a lot of stuff going for it. I wish the MM2H didn't have the income requirement, only way I can get it is to apply for it while I'm working. But I'm not well traveled so I would like to FIRE and see the rest of the world before I settle into one place longer term.
Some people get the MM2H visa and then travel and use Malaysia only as a base without even renting an apartment. The nice thing about the MM2H visa is you don't -have- to use it (similar to the Philippines one) and the requirements are not really that onerous with the only downside being that some of your capital is tied up but still earning money (same in the Philippines but interest rates and prospective returns for the MYR are higher than for USD at this point).

physdude
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Re: Blog from Malaysia

Post by physdude » Fri Dec 01, 2017 11:08 am

Last post for a while before I leave for Thailand tomorrow (I have been posting a bit too often because I have been largely confined to home for the last few days due to a slightly nasty cold).

I didn't realize how much I have become used to getting only the best value food by habit. I stepped out to a nearby 24hr food stall (plenty of those everywhere in Malaysia) to get a light meal. I ordered some a la carte local bread, a small serving of chicken (maybe half of what is normally served as a quarter chicken) and a hot drink and was slightly surprised to see the bill come out to $2 which is usually what I pay for a pretty full meal but then I remembered the reason why my meals are generally so cheap is that they are cooked in mass quantities and served to a large number of people at the same time while a la carte meals are cooked to order.

To truly see real fast food in action, a visit to a south Indian restaurant during lunch time is a must - vast quantities of the main vegetable dishes, curries and dhals are continuously cooked and served to hundreds of customers sort of buffet style but at the table (if you want a bit more of anything specific you just put up your hand and ask for it). This gives unlimited meals to customers with a considerable variety while keeping it cost effective as the restaurant has to just prepare vast quantities of about 10 dishes giving great scale advantages. I think this captures the true economic concept and advantages of fast food much more effectively than the western version and shows how $2 unlimited healthy meals with a wide variety can be a reality.

The absurdity of being surprised at a $2 bill also hit home as the amount is now truly small to me even on a daily basis (under $20k using the 4% rule) as my portfolio zooms ahead to make even seven figures seem not that far away in what is clearly a massively overstretched market. I seriously never envisioned getting close to seven figures in NW any time in my life even a few years ago but I am within spitting distance of it now once I include my ten years of basic living expenses (at $1200 a month - covers rent, food, utilities, transport, insurance and other essentials comfortably but no luxuries) that I have in cash. Needless to say, this NW will likely go way down in the next recession but it still seems surreal and it is definitely not going to stop me from looking out for the last dime as is my habit (okay, I do sometimes splurge a lot when I travel but I know I can stop it without any significant reduction in quality of life if needed).

physdude
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Re: Blog from Malaysia

Post by physdude » Wed Dec 06, 2017 9:21 am

Update from Thailand - Bangkok went really well as I had splurged a bit for the hotel. I stayed at the Sheraton as SPG is giving me double nights in order to help me qualify for gold status next year. Further, the Bangkok Sheraton is one of the better ones and a pretty good deal for US$100/night. I got upgraded to the club level but apparently without lounge access. I didn't know that they could do this and assumed it was a mistake and happily used the lounge for breakfast and evening cocktails and snacks (which are actually enough for dinner) as the people going in and out of the lounge meant I didn't have to use my card key. It is only the next day when my card key didn't work for breakfast that I realized that I didn't have lounge access after all. Anyway, this meant I got a full day of great food and a few glasses of wine on the house! While I would have had cheap street food for under $2 without the lounge access (which I did for the second breakfast), it was nice to enjoy the nice location and view.

An old Thai exchange student whom I had befriended in the US showed me around a bit and got me a great local lunch at a nice historic restaurant (I tried paying for it but he got around it by conversing in Thai with the waiter - this was one place where I didn't like the fact that I saved money. I am still trying to see how I can make up for it.) Even more importantly, he told me about the late king's funeral memorial which was an amazing place to see and which I would not have had the chance to see if I missed it as it is due to be dismantled soon. Remarkably, the Thai govt even provided some nice cookies and did not charge for this privilege!

After checking out, I undertook what are two great value journeys - the Chao Phraya river taxi to the Thonburi train station which gives you a great view of Bangkok at about $0.50 (though one has to walk a kilometer at the end) and the train journey to Kanchanburi whose price has been jacked up all the way to $3 from $0.5 for foreigners only. I could have extended the train trip to cover the famous bridge on the river Kwai (actually Khwae in Thai) at no cost but I was going to do that the next day anyway. Taking the morning train from Thonburi to the terminus at Nam Tok and back would cost only $6 ($3 each way as the fare for foreigners is independent of the distance) and would be a very great journey with some very nice views and an amazing amount of history. As it so happened, I had kept this second part of the journey to the next day from Kanchanaburi in order to also have time to see the famous Hellfire pass museum which is where the real tragedy of the railway lies but it turned out I had miscalculated and ended up in Kanchanaburi on one of the five or so days the museum is closed in the year. Hence, I just took the train to the terminus and back, something I could have just done the previous day. Anyway, traveling always brings both positive and negative surprises. If I want to see the full scope of the Death Railway, I will need to make another trip to Thailand.

I really like to undertake great value journeys since they show that low cost things can be really great - some of the best ones I have done are the $0.30 Star Ferry ride in Hong Kong between Kowloon and Hong Kong Island, the $0.70 ferry ride from Parapat to Tomok in Lake Toba and the C$16 ferry ride from Vancouver to Victoria (not really cheap but still pretty good value for the very nice views and ride). Another one I am going to do soon is the $0.30 ferry ride from the World Heritage city of Georgetown on Penang island to Butterworth on the mainland (the train from KL to Butterworth connects to this ferry and this under 4 hour fairly fast train journey averaging about 130 km/hr costs about $20).

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