Negative interest rate - get paid from borrowing and get charged from saving

If you think that you can earn some interest by depositing your money in bank, and you will be charged with interest for borrowing money from bank, you have to reverse your mind-set in certain places that are having negative interest rate policy now.

I'm not kidding. The European Central Banks (ECB), Switzerland, Denmark, Sweden are already having negative interest rate for quite some times. Lately, Japan has joint the league too!

(Chart produced by Toronto Star)

The ECB started this game by charging banks that hold their cash overnight and at the same time offering a premium to banks that borrow in order to extend more loans.

During economic uncertainty time, people tend to be conservative with spending and/or investing and more keen to hoard money in their bank accounts. They are willing to do so even with zero interest rate. This brings the danger of deflation, and as an extreme measure to counter this situation, the banks started to "punish" people that keep money in their bank accounts by charging interest instead of giving interest, and to encourage people to take up loan for business and investment activities by giving interest instead of charging interest.

When this negative interest situation occurs, the traditionally safe havens to put your money, namely bank deposit and bond market, will become the places that most likely cause you to lose money. Yes, fixed deposit is dangerous, bond market is dangerous, because your money will go down the drain if you put it there, in the era of negative interest rate.

However, this measure doesn't seem to be effective to stimulate the economy, as people there are still very cautious and tend to hoard with their money. With the negative interest rate, they are forced to take out their money from bank deposit account, and then they are keeping the money in their drawer or safe instead of spending it. (Reuters: Negative ECB rates fuel demand for safe deposit boxes, German banks say)

The impose of negative interest rate in Eurozone and Japan has shown unfavourable sign of worldwide economy. What will be next after quantitative easing and negative interest rate? If there is no more option ahead, we can foresee a huge economic catastrophe forming and will hit all of us at anytime.

Are you prepared for it? And the question is: how to get prepared for it?

Income tax declaration of property rental - which expenses are deductible and which are not?

For most property owners in Malaysia who rented out their property, the rental collected from tenant is regarded as a non-business source of income and therefore is charged to the owner's income tax under section 4(d) of the Income Tax Act, 1967.

The amount of property rental income need to be declared is the gross rental income deducted by certain expenses incurred by the property in order to generate the rental.

The expenses that are income tax deductible including:

• Assessment
• Quit rent
• Property loan interest
• Fire insurance premium
• Expenses on rental collection
• Expenses on rental renewal, including the stamp duty
• Expenses on repairs and maintenance
• Expenses on replacement of rental assets
• Property service charges, maintenance fees, sinking fund, and Indah Water bills
• Legal expenses on renewal of tenancy agreement, recovery of rental arrears, etc. 
• Expenses on pest control
• Property agent fees/commission to renew the tenancy

The expenses that are not income tax deductible are initial expenses before the property is rented out, including:

• Advertising cost to get the tenant
• Property agent fees/commission to obtain the tenant
• Legal cost and stamp duty for initial tenancy agreement
• Expenses on renovation and improvement to get higher rental or to be more attractive to potential tenant

If the total rental income received is less than the total deductible expenses for the year, which shows that you have rental income loses instead of rental income gains for the year, then your taxable rental income for that particular year will be zero.

Note that rental income losses cannot be used to offset your other taxable statutory income of the year. The losses also cannot be carried forward to the next taxation year.

For more comprehensive information, you can refer to LHDN Malaysia Public Ruling No. 4/2011 : Income From Letting of Real Property.

WiFi technology - from Beamforming to MU-MIMO

Modern WiFi routers come with new selling features such as Beamforming and even MU-MIMO. What are these new features about? Will your home and/or office WiFi network be benefited with these new features? I also have the same questions, and here is the answer from my research.

Beamforming Technology

Beamforming is a kind of wireless transmission method introduced to reduce interference and improve the reliability of WiFi signal. It is adapted in the 5th generation WiFi standard 802.11ac.

Beamforming is based on Digital Signal Processing (DSP) logic and Multiple Input Multiple Output (MIMO) technology. Using a procedure called channel calibration or channel sounding, it changes the phase and relative amplitude of the signal, creating a constructive interference and destructive interference to make the signal in preferred direction stronger and others weaker.

In this way, the WiFi router can focus the signal towards the direction of your WiFi devices connected to it, making the wireless connection stronger, more stable, and further reaching. As effective WLAN bandwidth degrades with weaker signal and longer distance, beamforming can help to reduce this degrading effect, therefore making the network faster.

However, bear in mind that your WLAN network is still limited by the maximum supported bandwidth of the WiFi router and the WiFi client, and your Internet bandwidth is still limited by the maximum bandwidth of your subscription package. Your network still won't be faster than these limitation.

Certain 802.11n routers and devices also support beamforming, but unlike 802.11ac, there is no common standard with beamforming in wireless-N.

In order to benefit from the beamforming technology, both your wireless router and wireless device (computer, tablet, handphone, smart TV, etc.) must support this technology. If they are of wireless-N device, then the beamforming of the wireless client must compatible with the wireless router as well, preferably from the same brand or manufacturer.

Beamforming is standardized in wireless-AC, but that does not mean that all wireless-AC has this feature. You have to ensure your wireless-AC device comes with beamforming technology to get its benefit.

MU-MIMO

Traditional wireless router or access point, even with MIMO technology, can only serve one wireless client at one time. If it is connected to multiple WiFi devices, each of the devices take turn to be served. The more wireless devices you connect to the WiFi router, the less bandwidth is available for each one of them.
Multiuser MIMO (MU-MIMO) is introduced in the 5th generation WiFi standard 802.11ac. In a wireless system that uses MU-MIMO, the router can direct separate streams of bandwidth to up to 4 different devices simultaneously, as long as the devices are also able to use MU-MIMO technology.

For a MU-MIMO router with 4 antennas, each antenna can serve an individual MU-MIMO supported wireless device. Each of these devices can utilize the full WLAN bandwidth supported by the router.

If there are more devices, then the 5th onwards still need to share antenna with other device.

So, one MU-MIMO router is equivalent to 4 virtual MIMO routers, in the condition that the wireless clients connected to it also support MU-MIMO technology.

What if your wireless device is not supporting MU-MIMO? The router is backward compatible to act as single-user MIMO (SU-MIMO) router just like the older MIMO, and you won't enjoy the benefit of MU-MIMO in this case.