1. How much money do I need to start investing?

One rule of thumb, investors of every type should live by: Don’t invest money you can’t afford to lose. Understanding your financial situation is crucial before starting any investment, but it doesn’t mean that if you’re not wealthy you can’t invest. If RM100 is what you can start with, that’s fine. (Sikit-sikit, lama-lama jadi bukit)

 

  1. What money should I invest in, and what money shouldn’t I invest?

One common mistake many new investors make is thinking they can double their money overnight with the right investment. The shorter your time horizon, the riskier your investment becomes. In general, only invest money that you can afford to keep in the investment for a minimum of five years.

 

  1. How do I earn above-average returns without taking on too much risk?

First, it’s imperative that you understand that without risk, there is no reward. Every investment holds some degree of risk — as it should. The trick is to know your personal risk tolerance.

 

  1. What type of investments should I make? 

In Malaysia, there are a few popular investment channels, FDs, endowment plan, unit trust/ASB, shares and property. Each has its advantages and disadvantages. Personally, I would say the type of investments to make, depends on your risk tolerance as well.

For example, FDs, is a safe option with close to zero risk, but the interest return given is usually 3%, sometimes you may find a slightly higher than 4% during bank promo (usually with condition), which is still relatively low compared to other investment tools.

Another example would be Unit trust. The money invested in UT will be gathered in a pool, where the fund managers will diversify it to different shares in the market. Generally, UT have a higher return of about 6% to 9%, depending on the type of funds you choose. Downside of UTs, these funds are still involved in share markets, where returns will be affected when the market is at a downturn. Plus, there are fees & charges involve in investing in UTs as well.

 

Yi Ling Liew

Wealth Planner

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