With all the limelight showing on the rising living cost, implementation of the new unemployment insurance scheme as well as the weakening denomination of our currency value, it is a common scene to see graduates fresh into working industry in Malaysia struggle to save money at the end of each month. With their pay between RM 2300 to RM 2500, it would be a tall order for them to keep a portion of their savings let alone invest their money in sound investment vehicle. It sounds all doom and gloom right? However, there’s light at the end of every tunnel and we are going to show you how millennials like you could start investing as low as just RM 100!
There are a set of guidelines you should follow in order for you to be on track. And here are the step by step strategy you could implement accordingly to achieve your goals of investing.
- List all your expenses and incomes
It will not be comfortable for you initially but as you grow accustomed to writing down every expenses incurred, the habit will help to reduce your financial burden in the long run. When you know how much income you generate each month and the accompanying expenses, you would have the chance to have a clear look on your financial standings by the end of each month whether you are still within your budget or otherwise. From there you would be able to reduce unnecessary expenses which are all too often the major headache for most people.
- Automate your savings
Set a small portion of your income in either fixed deposits or other investment vehicles each month would help to nurture your habit of savings because the amount of money you could spend has been reduced automatically. When your savings account shows less money in it, you would be reminded unconsciously not to spend out of your budget. A wise act to compel you to save and invest at the same time indeed!
- Start your investment with capital as low as RM100
Once you have all the expenses listed down every month and set a portion of your income away in investment, you will have by now a fair outlook on your cash flow. From here you could adjust your portfolio according to your needs. One thing to note is investing in decent investment vehicle is crucial for you to at least overcome the inflation. Saving all your money in only one investment vehicle, however is also not a wise decision if you are familiar with the saying not putting all your eggs in one basket. Diversify your investment in several portfolios which you are comfortable with. Below are some of the investment vehicles (passive and active investments) which are deemed suitable for people who just start to invest.
Passive Investment (investments that do not require constant monitoring and generally lower risk) :
- Unit Trust– collective investment scheme provided by various investment banks and investment firms with a fixed charge of management fees and transactions fees.
- Amanah Saham Bumiputera (ASB) / Amanah Saham Nasional (ASN)– unit trust schemes managed by government-controlled agency, Permodalan Nasional Bhd (PNB). But this is only open for bumiputras.
- Investment-linked insurance– a life insurance that combines investment and protection. Your premiums provide not only life insurance coverage, but part of the premium will also be invested into specific investment funds of your choice. You get to choose how to allocate your insurance premiums towards protection and investment.
Active Investment (investments that require constant monitoring and generally higher risk) :
- Stocks market– buying stocks of a company listed on Bursa Malaysia. The trading can be short or long term through brokers from investment bank and the minimum investment size is 100 units.
- Exchange traded funds (ETFs)– an open-ended investment fund listed and traded on a stock exchange. ETF combines the features of an Index fund and a stock. This is one of the most cost-effective investment vehicles for investors given its low management fee.
It is always a good habit to keep yourself aware of the current world issues and financial news which could actually help to develop your financial acumen in the long term. That’s how Smart Wealth could help you to actually do just that. We have one of the most brilliant teams of experts that could give you insight and information on the best investment you could involve yourself in. If you are still unsure of how you could step out of your zone, consult us to know more about yourself and your financial roadmap.