So you scored that interview and now you’re part of the working industry, finally earning your own money as you get used to the rat race routine. Problem is, your paycheck is not really millionaire material and that 5L V8 Ford Mustang 2019 will just have to wait. A little longer.
You’re young, you have less working experience, you live from paycheck to paycheck, and you have zero credit record, which means banks don’t trust you just yet.
You can’t change your age. Your experience needs time. The only thing you can change now is your wealth, maximising every little sen in (both) your pockets. So what can you do?
Of course, we’re not talking about property investment, stocks (blue chip), or even Cryptocurrencies. Those are volatile and they require major Ringgit. We’re talking about something with less risk, regulated by Bank Negara Malaysia (BNM), easy to manage, and most of all affordable.
We’re talking about passive investments, something that doesn’t need regular monitoring. The types of investments where you put aside some money and basically leave it there to generate, like a piggy bank that slowly grows fatter and fatter.
So here are FOUR investment schemes that are practically easy to manage and gets you that extra Ringgit at the end of the day. Best of all, they require a very small capital to start. By small we mean RM500-RM1000 so if you’re reading this with your iPhone XS Max, that’s chump change to you!
1. Fixed Deposit (FD)
By far, it’s the safest of all. A no-frills, no-fuss type of investment. The mechanic is simple – you keep some money in a bank, the bank then thanks you paying you back with some extra as a token of appreciation for using their service and allowing them to bankroll that money. Fixed Deposits are guaranteed and regulated by BNM and if the bank decides to bail, the government will replace that lost amount.
How to start?
Most banks nowadays allow you to register online and start your FD straight away. Log on to your bank to find out how.
Err how much?
The average interest rate goes from 2.95% to 4% a year. The lowest deposit with the most gain right now is Bank Rakyat Deposits Account-i where you can start off with RM500 for a 3.5% rate. Another one would be Ambank Conventional Fixed Deposit with the same deposit but 3.3% interest rate.
2. Precious Metals
It’s basically gold and (or) silver. Old school but safe-ish and sound-ish. You buy gold (like gold coins, jewellery or even bars!) then sell it off when the price is right. This type of investment is believed to protect you from inflation and stock crash. There are a few gold investments but our focus for this article, however, is gold coins – convenient, compact, and clear.
How to start?
Rocket science doesn’t really apply here. Like walking into Tesco, you can just buy gold straight from any precious metals distributors, banks, or simply jewellery shops. According to Nubex founder, Bakhtiar Abd Majid, trading gold is simple. Just register your profile, pick your gold, and it will be delivered to you. To trade, Nubex offers a trading platform to sell your coins. The price difference between buying and selling IS your profit.
Err how much?
A piece of gold dinar from brands like The Sentral Mint (for example) can be purchased below the RM1,000 mark while silver dirhams go much lower below RM200. Since gold is a direct investment, there’s no dividends or interest. The trading price, however, is connected to the world market prices, something like a supply and demand situation.
Out with the old, in with the new. Probably one of the most canggih investment platforms to date, StashAway is an automated investment advisor. A robo-advisory platform where it guides you to the most convenient investment channel according to your goal. The goal is set upon registration where you set your aim to buy a home or plan for rainy days. Licensed under Securities Commission Malaysia last year, it recommends financial advisory and fund management tailored to your goal.
How to start?
Download the app or log in here and register your account. It takes only 15 minutes to set it up before you’re prompted to set your goal. It (the robot) then generates a portfolio to risks and plans to guide you with the best investment options out there. We heard it’s good for those medium to long-term investments, plus who doesn’t want to get money tips from an AI?
Err how much?
There’s no minimum amount to invest, according to StashAway, though they do encourage a disciplined monthly investment. Since it’s still a service, the management fee is 0.2–0.3% and there’s no sales charge. In comparison, you’re facing around 3–5% sales charges and another 1.5–2% management fees for traditional fund managers so obviously, robots are cheaper.
4) Private Retirement Scheme (PRS)
Have you heard about PRS? It’s a voluntary long-term savings and retirement scheme available to employed or self-employed to supplement their retirement savings. We spoke to Ismitz Matthew De Alwis of Kenanga Investors Berhad to share a little insight on this scheme.
Introduced by the government to help encourage long-term retirement savings, PRS is meant to assist you in later years to not rely on just EPF alone. With PRS, you can plan your retirement better by increasing your savings on a voluntary basis through various PRS funds. And for this, Kenanga offers the Kenanga OnePRS suite through Kenanga Investors Berhad that has both conventional and Shariah options:
How to start?
Steps to invest in the scheme can be pretty straight forward. You can either sign up HERE get help by calling 1-800-88-3737 and you may also email your enquiries to firstname.lastname@example.org to get more info on the scheme.
Interested investors may choose to have a regular monthly contribution with Standing Instruction OR contribute whenever they wish. To start, the (minimum) initial contribution is RM1,000 (lump sum) per fund or RM100 per fund for Regular Contribution Plan.
He reiterated, for PRS online however, the (minimum) initial contribution is RM100 where some fees and charges will apply.
Why Kenanga PRS?
Well for one, Kenanga has been performing well for periods of 3 and 5 years against the benchmark which is what long term investment saving is all about. Of course, there is a certain degree of risk as it’s not capital protected but with proper portfolio planning over a longer period of time, it’s expected to deliver the returns worthy of comparison with Fixed Deposits (above) or other conventional forms of savings. Investors are advised to read and understand the Disclosure Document and Product Highlights Sheet to understand the risks involved before investing (available on their website).
Investors Grow Rich In Their Sleep
Pretty much sums up what investment is all about. It’s basically planting the seed of financial success where the only strain is time. But do keep in mind to invest in something you know with proper knowledge you get from advisors, friends, family, and us!
Back in 2017, our Youth and Sports Minister, Khairy Jamaluddin, was quoted saying young Malaysians lack financial knowledge especially when it comes to making money grow. With millennials reportedly earning less than their parents (at the same age) and fresh graduate salaries going from RM2,300 to RM2,500, there’s no better reason to start dipping your toes into charted waters.
You may rant and complain on the rise of living costs but change can never happen if you don’t build your wealth today. Yes, saving is a skill but investing is another. All we can say is, don’t put all your eggs in one basket because variation is the key to a successful, reliable investment so start investing now for that Ford Mustang to come sooner than expected.
For now, let’s stick with the old Tiara.