And so we arrived at Chiang Mai International Airport, checked our documents at the counter and went right through security without checking any bags. Having never flown in Asia without the hassle of waiting for checked bags, it felt strangely liberating but also like we’d forgotten something. Taking a three-day jaunt to Kuala Lumpur to officially terminate our participation in the MM2H Retirement Program, we took the only daily non-stop flight on Air Asia and touched down around 9:30 PM. Given the detail-oriented nature of our agent who insisted on being in constant touch by text and the late flight, we knew we’d better take care of data services ahead of time rather than rely on our shitty old Malaysian carrier.
Hitting the mall earlier, we visited the AIS store (our Thai cell carrier) and despite their limited English skills, they sold us a data-only plan in Malaysia with 2 Gb of data for 7 days at a ridiculously low cost of 300 Bhat (about $9.25 USD). All we had to do was click the roaming button on arrival and sure enough, when we attempted to use our old Malaysian carrier’s app, the phone number and our profile were long gone. Because I had a new passport, my agent said I could enter on a 90-day tourist status but it might be better to show them the old passport with the laminated MM2H visa instead. Hoping it wouldn’t confuse them, I walked to the counter, explained I had a new passport and without saying anything, the stern stone-faced Malaysian customs agent walked out of the booth and disappeared. Having just read a story about an American family that was detained for 14 days in Malaysia due to a snafu at the Malaysian/Thai border, this unnerved me a bit and Diane watched carefully where he went while I stood at the counter. Apparently never having come across that situation before, he spoke with a supervisor for about ten minutes and finally returned. Gruffly telling me I needed to leave Malaysia within 30 days, he stamped the passport, wrote my status as “special” with a note to visit Putrajaya (where the Immigration Ministry is) and sent me on my way.
Having left just enough Ringgit in our bank account to pay our agent’s fee (900 MYR) and have some spending cash for food and shopping, I’d searched the bank’s website for the ATM but naturally, it was hidden in some shit little corner that took us about 20 minutes to find. Unlike cards back home that usually expire in a few years, our card’s expiry date was 2025, 10 years after its issue date. Despite this, the machine decided to play bank police and displayed a message saying “Card is expired and has been retained”. Naturally, the plane was 30 minutes late and the currency exchange places closed at 10 PM. Luckily, one place was still open so we had no choice but to sell 2,000 Thai Bhat at God knows what shitty rate. Wanting us to arrive at the crack of dawn the next morning, our agent apparently didn’t feel like waiting six years at the Ministry and must not have had much other business that day so we had no time to search for an ATM the next morning. Smartly, I’d purchased two round trip tickets for the KLIA Airport Ekspres high-speed train that gets you to the city’s main transit terminal in 35 minutes. From there, it’s five stops on the KJL train line which has been expanded by about 15 stops since we left Malaysia two years ago.
Always staying at The Traders Hotel by Shangri-La whenever we’re in Kuala Lumpur, it’s normally a quick seven-minute walk through the majestic Petronas Towers and then a shortcut through one of the many indoor pedestrian walkways. But despite most of the western world not giving a shit about dark-skinned terrorist bombings in Muslim nations, Malaysia took the 2019 Sri Lanka Easter Sunday bombings as a wake-up call and initiated major security at the malls, hotels and public places similar to any other big city like London or New York. So now nobody enters the towers after 10 PM, the mall doors are locked late at night and this meant a long detour around the park that surrounds the hotel and concert-style security checks at every entrance to the hotel. Finally getting checked in well after midnight, we admired the amazing view from our room before settling in. Always requesting a tower facing room on a high floor, we indulged in one of the few five-star hotels in Asia that fall within our budget. Although the price doesn’t include breakfast (which sucks by western standards anyway), a 340 sq meter room with great amenities, amazingly comfortable king bed and shower that blows away every hotel on earth runs about $155 USD. While we hated living in Penang, we love the surrounding area and highly endorse this hotel should you find yourself needing a room in KL.
Well past my bedtime, I finally drifted off for a few hours and we got up before sunrise which is an hour later than Thailand due to the time zone change. Having sold their Southeast Asian businesses, Uber is no longer in Malaysia which makes Grab the only ride service in the country. Unlike the moronic “legal, not legal” revolving door of ever-changing rules in Thailand, Malaysia not only embraces Grab but advocates its services for other conveniences like online shopping and food delivery. So the app remembered our credit card and the guy showed up in five minutes. Contrary to Thailand where no Thai citizen has any interest in ever leaving, Grab drivers in Malaysia talk your ears off and want to know everything they can learn about your background, finances, and culture which probably helps them figure out ways to get the hell out of Malaysia. Providing us with a detailed little map to ensure we didn’t go the wrong building, we showed it to the friendly driver, texted our agent and arrived at The Ministry of Tourism Malaysia MM2H Immigration Center in Putrajaya about 25 minutes later.
A few days before we arrived, one of our readers wrote to tell us you need to arrive at the MM2H office in the wee hours of the morning to secure a queue number. Thankfully, our agent did this for us but we can confirm that at 8:15 AM, the last available ticket for the day was taken so if you need to go, take note of this. Entering the dinky little office with not nearly enough seats, we took the last two and proceeded to sit around and wait. Asking our agent what our number was, she said 38 and we noticed that they were on 002 and of course, there were two agents working in a ten counter office. Typical of everything in Malaysia, several staff members were milling around doing nothing and after they finally opened another window at 9 AM, it improved to the snail’s pace of about five or six numbers per hour. Knowing we use the best and most reliable agent in Malaysia, we assume she has some clout with the staff and after only about 45 minutes waiting, she handed us back our passports with a new “valid until” date in the laminated visa despite being dozens of numbers away from our turn.
Handing us a letter that authorized our bank to release our fixed deposit funds with accrued interest, our agent drove us back to a local train station but before leaving, we headed downstairs and posed with the poster that promotes Malaysia as a utopian wonderland for retirees. Curiously, like everything in today’s world, it seems like we got in (and out) of the program just in time. Getting approved in less than three months, we bucked the new rules which have tightened up to the point of ridiculous. Apparently taking almost one year for approval, they now submit all the application paperwork to The Ministry of Home Affairs for additional scrutiny. They’ve also eliminated various privileges like the conversion of foreign driver’s licenses to Malaysian ones and the tax-free car incentive.
And Chinese applicants are subject to even more rules like various documents being translated, notarized and duly certified by both the Ministry of Foreign Affairs & the Malaysian Embassy/Consulate in China. Like many governments, immigration is a sensitive topic now, even for middle class retired folks that simply want to live in a safe, inexpensive environment. Thankfully for us, Mexico still requires only a two-page form and twelve months of bank statements showing 20,000 times Mexican Minimum Wage for permanent residency so that’s one reason we’re headed there next. So for all my readers new and old, this is the very last you’ll hear me talk about Malaysia and the MM2H Retirement Program. While it’s still a respectably good long term retirement program for those seeking a Southeast Asian expat retirement home, the benefits are shrinking, the bureaucracy is getting worse and if you expect them to roll out the red carpet and welcome foreigners with open arms simply because you plop 150,000 Malaysian Ringgit in their banking system, you may be sorely disappointed.
Back at the bank, the real frustration began. Notoriously incompetent in all banking affairs, Malaysian banks test your patience and although we had an appointment, that meant nothing. Heading upstairs to the “Premier Banking” department, our relationship manager that we never met was of course out of the bank so we had to talk to the information counter guy. But just like I remember before they laid me off, the financial industry worldwide is suffering from understaffing and low profits so they make one peon clerk guy serve as chief cook and bottle washer. Waiting over 30 minutes while some annoying Chinese Malaysian guy argued with the clerk over who knows what, four Malaysians tried to butt in front of us which forced me to lose my patience and raise my voice. (That makes everything worse because Malaysian culture doesn’t include responding to anger). But, unlike Thailand, Malaysians with some money are pushy and think they’re heavily entitled. Eventually, the guy went away after four different employees explained whatever in Chinese, Malay and English and apparently, the information counter guy now handles virtually everything while the few RM’s that are in the bank walk around aimlessly.
And here’s the dinger. Promising I’d do a more detailed post about financial matters, here’s a point you want to study up on if you’re considering retirement in a country that uses a currency besides your own. (Ecuador and Panama, both popular expat destinations, use the US Dollar, which is a huge financial burden lifted if you’re American).
Currency risk is the potential risk of loss from fluctuating foreign exchange rates when an investor has exposure to foreign currency or in foreign-currency-traded investments. Currency risk is important to understand because foreign currency exchange rates can drastically change an investor’s total return on a foreign investment, despite how well the investment performed. Currency risk is the potential risk of loss from fluctuating foreign exchange rates when an investor has exposure to foreign currency or in foreign-currency-traded investments.
Although you don’t need to reside in Malaysia to remain on the MM2H Program, you do have to place 150,000 Malaysian Ringgit in a fixed deposit at a Malaysian bank before they’ll approve the visa. Should you leave Malaysia, as we did, you’re allowed to keep the funds on deposit and keep the unlimited entry privileges of the visa program. Given the favorable 3.5% interest rate and using the visa as a security hedge in case Thailand didn’t work out, we chose to leave the funds in the Malaysian bank and withdraw them later when we planned on leaving Asia. Generally preferring participants to take a one year term, we convinced them to give us a three-year term after our first one matured because rates increase with longer terms. Unfortunately, I made a rookie mistake and didn’t realize the ramifications of withdrawing the funds too long before the maturity date.
In most developed nations, banks charge you an early withdrawal penalty if you cash in a fixed deposit before its maturity date. In the USA, that penalty is usually between one and three months’ interest which is deducted from the total proceeds. While nobody wants to lose interest, sometimes you need your money and there are even cases where it’s financially beneficial like during a period of falling interest rates. For example, I recently cashed in some fixed deposits in the USA that matured next year and reinvested the proceeds for a longer-term after the banks expectedly began rapidly lowering rates thanks to the Federal Reserve’s decision to give in to President Shitbrain and begin a campaign of lowering interest rates. Despite the penalty, I expect fixed deposit rates to be significantly lower by next year so when you do the math, the higher interest today in a new fixed deposit compensates for the early withdrawal penalties.
But there’s no currency risk involved in the above example and the early withdrawal penalties are reasonable. When we transferred our funds to buy the fixed deposits in 2015, we received 3.7613 Malaysian Ringgit for one USD which means we paid $39,879 to buy 150,000 Ringgit. In a perfect world, the exchange rate would stay somewhat the same and if we chose to cash it in at its August 2020 maturity date, we’d have earned 3.5% interest (compounded monthly) and assuming exchange rates remained relatively stable, we’d have walked away with our principal plus about $7,000 of interest (give or take any fluctuations and exchange fees). Instead, the US dollar began rising aggressively against the Ringgit in 2015 and never looked back. Peaking as high as 4.45, it now hovers somewhere around 4.17. Simply put, a rise in your home currency versus another nation’s means if you ever need to exchange it back, you get less because you’re selling a currency that’s declined in value versus the US Dollar. That’s currency risk in a nutshell.
Tracking our total net worth every month, I expected to get a lot less than I’d originally hoped for but I still figured we’d get back enough to have earned a net 1 to 1.5% interest on the fixed deposits. Unfortunately, the assholes in the Malaysian banking system decide to penalize you the entire amount of interest that remains in the term of the fixed deposit. So for us, we cashed it out just under 12 months early and not only got screwed on the exchange rate decline but for an entire year’s worth of interest. So after the one-year penalty, we walked away with so little Malaysian Ringgit that it came to less than what we deposited when converted back to US Dollars. Thankfully, it’s the first major financial blunder for us since retirement and we both agree that we couldn’t have foreseen leaving Asia earlier than expected. But as I wrote about in my post on Thai Retirement Visas, a change in the financial requirements made it impractical for us to stay in Thailand past next year given our resources so we sucked it up and I’ll be much more careful about this topic in the future.
Honestly, it feels better to have our money out of Malaysia anyway and while still at the bank, we used the online global transfer function to instantly convert the Ringgit to US Dollars and simultaneously send it back to our US bank with no international wire fees (Ask me privately if you want more information on how to do that). And since we didn’t have any cash to pay the agent thanks to the moronic ATM that stole my perfectly valid card, we had to leave enough local money to arrange a wire transfer. And as the final Malaysian pain in the ass, you can’t close the account without being physically present in Malaysia. But you can ask a branch of the bank that’s located in another country to send the appropriate paperwork to Malaysia so we left 0.02 in the account and will deal with that when we stopover in Canada next year before moving on to Mexico. We did have some fun eating, shopping and visiting our friend who was our original banker so I’ll write one more post with the fun stuff later.
Summarizing our experience, we have no regrets and living in Malaysia was a worthwhile and rewarding time in our lives that taught us a lot more about life than many intolerant closed-minded folks will never understand. Their loss. So thanks for the memories and good luck to one and all who venture there. Cheers from Chiang Mai, Thailand.