3 Best Investments in Malaysia (The Best Way to Invest Your Money)

The best investments in Malaysia are INVESTMENTS IN YOURSELF. Invest in your EDUCATION! LEARN! BUY BOOKS AND COURSES.

Lol no jk jk I’m not that annoying (usually). I mean, that advice is true. But it *is* off-topic. 

For real though – here’s the 3 best investments in Malaysia: EPF/KWSP, PRS and SSPN/SSPN-i.

Why these 3? Because you can get income tax relief of up to RM15,000 annually, combined.

Regardless whether the investment performs well or not – and this is outside your control anyway, depends on the economy and all – you will still ‘gain’ via reduced tax payment and other practical benefits uniquely offered from each of them.

Wait, you say. I disagree! I think [insert investment here] is THE best investment in Malaysia!

Who told you there can only be ONE best investment? The best investment strategy is a combination of MULTIPLE investments, and it should include at least one of those three. 

The best way to invest in Malaysia*

*opinion not advice. All standard DYOR disclaimers apply

I’ll just get right to it. MOST people will be okay financially if they use this exact investment strategy, or at least use it as a starting point until they tweak it to fit their personal situation. The strategy is simple enough.

First, accumulate a minimum of 3 months’ worth of expenses in your bank account as emergency fund

• If you spend RM1000 per month, you should have a minimum of RM3000 as emergency fund
• If you spend RM2000 per month, you should have a minimum of RM6000 as emergency fund
• If you spend RM3000 per month, you should have a minimum of RM9000 as emergency fund
• And so on. You can increase it to 6 months’ worth if you want, especially if you don’t have insurance or your income is unstable.

Then, without touching or reducing your emergency fund, transfer the below amounts every single month:

1. RM333.33 per month* to EPF
2. PLUS RM250 per month to PRS
3. PLUS RM666.66 per month** to SSPN
4. PLUS RM250 per month*** to ASB financing for RM50k loan (Bumiputera only) OR ASNB Funds OR Roboadvisor OR Tabung Haji
5. PLUS RM500 per month**** to any ‘Fun’ investment(s) of your choice. Go ahead and do Stocks, REITs, Property, Gold, Crypto, Forex trading, Art, NFTs, whatever you want

• *Skip EPF contribution if you’re a salaried employee earning living wage. Allocate the money to #4
• **Skip SSPN if you don’t have children. Allocate the money to #4
• ***You can mix-and-match #4. For example, you can allocate RM125 each per month to 2 roboadvisors
• ****You can mix-and-match #5. For example, you can put RM100 towards Gold, RM250 towards Crypto and RM150 towards trading. If you’re not interested in any of the ‘fun’ investments, or you want to learn first, then just put the money in #4, not in your bank account. Remember: Time in the market > timing the market

Do all these, exactly in this order, and you’re already investing RM2,000 per month and well on your way to building healthy savings/investment portfolio and a comfortable retirement fund. 

Note: If you have more than RM2000 to invest every month, then you can afford to hire a financial planner. They will be able to give you personalised advice. 

How this investment strategy looks like in practice 

Here’s an example for someone who have RM400 to invest every month. This person is a salaried employee, single and no children, and already maxed out 3 months’ salary worth of emergency fund. Every month, they should put:

• RM250 to PRS (skip EPF because already contributing through salary deduction via employer)
• RM150 to ASB financing for RM50k loan (Bumiputera only) OR ASNB Funds OR Roboadvisor OR Tabung Haji
• Total: RM400 per month

What if you have RM700 per month to invest, same situation?

• RM250 to PRS (skip EPF because already contributing through salary deduction via employer)
• RM250 to ASB financing for RM50k loan (Bumiputera only) OR ASNB Funds OR Roboadvisor OR Tabung Haji
• RM200 to any other investment(s) of their choice (or just add on ASB financing/ASNB funds/ Roboadvisor/ Tabung Haji)
• Total: RM700 per month

How about RM1200 per month to invest, same situation except you’re self-employed (aka no EPF contribution from employer)?

• RM333.33 per month to EPF
• RM250 to PRS
• RM250 to ASB financing for RM50k loan (Bumiputera only) OR ASNB Funds OR Roboadvisor OR Tabung Haji
• RM366.67 to any other investment(s) of their choice (or just add on ASB financing/ASNB funds/ Roboadvisor/ Tabung Haji)
• Total: RM1200 per month

Let’s go into details for EPF, PRS and SSPN, and why they should be your priority.

#1 – EPF/KWSP (Employees Provident Fund/ Kumpulan Wang Simpanan Pekerja)

What is it: You know what this is. The de-facto retirement fund for Malaysians

Why it’s great:

• You can get up to RM4,000 in income tax relief
• if you are salaried employee earning ~RM1600 and above per month, then your plus employer contribution already maxed it out 
• If you are self-employed, you can always do self-contribution (direct online banking)
• It’s for your own retirement. Inability to withdraw is a feature, not a bug. It’s better to have more money than you need after you retire, than not enough
• Aside from retirement, you can make withdrawals for other reasons, including for health and education purposes
• You can also channel a portion of your EPF fund into unit trust. Read: All You Need to Know About Buying Unit Trust Through EPF i-Invest
• You can directly nominate your EPF money to anyone you want. More info here
• You can make use of Retirement Advisory Service, which is free of charge for EPF members!

Official website: https://www.kwsp.gov.my/

#2 – PRS (Private Retirement Scheme)

What is it: Like EPF, but optional (but recommended)

Why it’s great:

• You can self-contribute and get up to RM3,000 in income tax relief
• The money is meant for your retirement. Again, more money is better than less. Retirement is very expensive. 
• Protip: you can get PRS with ZERO sales charge
• You can directly nominate your PRS money to anyone you want. More info here

Official website: https://www.ppa.my/

#3 – SSPN/SSPN-i (Skim Simpanan Pendidikan Nasional)

What is it: A fund to prepare for your children’s education. Note that only parents and legal guardians can open SSPN/SSPN-i accounts for their children

Why it’s great:

• You can get up to RM8,000 in income tax relief (edit: increased from RM6,000. Thanks ck!)
• For me this is a subtle way for PTPTN to let you know that PTPTN loan may not be as readily available for future generation. Whatever is the reason, don’t let your children be affected by the consequences
• You can also double it as insurance/takaful for your child. More info here
• They have a lot of attractive promotions and competitions to attract depositors. Last I checked they have a lucky draw offering RM100,000 cash prize

Official website: https://lovesspn.ptptn.gov.my/

Other Investments in Malaysia: Are they good?

IMO, calling something the ‘best investment in Malaysia’ requires some context. They can be the best investment in Malaysia for you, if you position them in specific light. For example:

• Yes, investing in environmentally-conscious companies are wonderful for our future (you can do sustainable investing easily via BEST Invest)
• Yes, investing in physical gold allows you to have the option to get secured personal financing (as shared by one reader in 4 Things You Can Do If You Need Money URGENTLY in Malaysia article)
• Yes, investing in fixed deposits/bonds/money market funds is safe and therefore can be considered the best investment for those with low-risk appetite
• Yes, investing in gold/stocks/crypto/property/whatever are all good if you have the knowledge

But EPF/KWSP, PRS and SSPN/SSPN-i are probably the best investments of them all, for reasons given above. This is a sample size of one, but I shared this opinion with the CEO of a large fund management company and she agreed with me, so :/

Do you agree or disagree? Feel free to share with me what other investments you think are great. I’d love to hear what you think – leave a comment below.