So you are new at investing, and wondering what you could invest with RM1000 that you’ve finally, painfully saved up.
That is not an insignificant amount to you. Truthfully, even though you’ve been told ‘investing is important!’ and ‘you should invest early!’, you’re afraid.
There are two types of fear here, and they compound each other. One is the fear of losing money, which is understandable. The second is the fear of playing it too safe and NOT maximising profit potential!
It’s ok, I’ve been there, I’ve felt the nerves you’re experiencing. Here are some suggestions on where and what you can invest with RM1000, written for beginners in mind. Disclaimer: Not financial advice.
First off – Pay off debt
Before you start investing, take note of what you owe first. Credit cards, bank loans, and other high-interest loans charging 8% or so in annual interest MUST be paid off first.
Why? Because if you skip this step, whatever profit you get from your investments goes straight into paying off those interest instead of padding your pocket. If your investment return is less than your debt, you’re even making nett loss! No point in investing like that.
No bad debt? Good. Go on to the next line.
#1 – Invest with RM1000: Practical Mode
If you want to be really practical about it, you can prioritise these investments:
- EPF (Employees Provident Fund aka KWSP) – for retirement
- PRS (Private Retirement Scheme aka kinda like optional, secondary EPF) – for retirement
- SSPN/SSPN-i (education fund for your children) – for children’s education
Read more about these investment options in: 3 Most Practical Investments in Malaysia (Prioritise These Over Others
These are the most ‘practical’ investments to make, even if they’re not particularly exciting. You’ll need the money in the long term anyway so might as well start now. You get tax relief and other benefits too.
The only downside for these investments is you CANNOT withdraw and use the funds before retirement/for its intended purposes. If that’s important for you, then consider…
#2 – Invest with RM1000: Emergency savings
Unlike #1, these options does NOT ‘lock’ your money – you can withdraw them anytime. This is a good option if you want to grow your savings while studying other investment options in #3. They are easy to understand and have minimal maintenance – just deposit and get on with your life.
- ASB/Tabung Haji
- High-interest savings Account
- Fixed deposit/cash management portfolio (ok FD does lock your money for the short term, so the latter is better)
- Foreign currencies
Read more in: 5 Best Places to Save Money in Malaysia, Ranked
By this point, you have easily used up your RM1000 allocation – it’s not uncommon for people to save up six, seven-figure amounts in the options in #1 and #2 alone. Personally, I would divide my first RM1000 into 2, 3 or even 4 different ones, just to learn by doing.
#3 – Invest with RM1000: Diversification mode
It’s been a few months/years since you worked on increasing your savings in #1 and/or #2. And you’re thinking of yourself – now that my ‘safe’ investments are sorted out, maybe I should use some (not all!) to diversify into other investments. What other options are out there?
Lots. Too many, perhaps. Let’s see..
There are roboadvisor platforms (a great place to start tbh) Best Robo Advisor in Malaysia: Lowest Fees, Syariah-Compliant, Global Exposure and More
There are individual unit trusts, some of which you could get under EPF i-Invest [SPONSORED] All You Need to Know About Buying Unit Trust Through EPF i-Invest
There are cryptocurrencies How to Buy Cryptocurrencies in Malaysia [2021 Guide]
There are real estate investment trusts aka REITs 5 Things I Learned About REITs in Malaysia (From a Bursa Malaysia-Sponsored Workshop)
There are warrants (do stocks first) [SPONSORED] The Beginners Guide to Warrants in Malaysia
There are p2p lending [SPONSORED] I Asked Hard Questions to the CEO of Funding Societies Malaysia
Which one to pick from #3? Follow your curiosity. If you’re like most people, you will have a natural interest in one or more options, so you’ll start your exploration there. For example, stocks appeal to people who like keeping up with news about what big companies do. That’s already a ridiculously big world to explore.
Personally, I don’t care about stocks and properties, so I don’t even bother with them. I absolutely love cryptocurrencies and roboadvisors, so those are my picks. You can see my portfolio breakdown here: Breakdown of My (SUPER HIGH RISK) Investment Portfolio
Important: you don’t have to rush #3. It’s good to just take your time learning as much as you can, without making rash decisions.
So, what will you do? What will you invest with RM1000 (or more) that you have?
As mentioned, start with #1 and #2, then slowly introduce #3 into your life. In any case, the key is to START, then learn as you go along.
Hope this helps anyone looking to start investing their first RM1000. Questions? Give em here or comment via FB, Twitter, etc 🙂
P/s – Have you gotten insurance? It’s not strictly an investment, yes, but I argue the best offense is useless without a good defence. It’s like putting all attack-type players in your party with no healers – bad idea. Read my insurance article: 9 Things You MUST Know Before Buying Insurance in Malaysia