13 Malaysians Share How They Diversify Investments
What did you pick as your first investment? Your second? Third? And so on?
As always, when I got curious about anything personal finance, I turn to the crowd. I asked the RoR Facebook community about their first, second and third investments. How did they interpret the common advice to ‘diversify your investments’, and how does the order look like?
Here are some of the replies. Thank you to everyone who agreed to have your answers compiled and posted here. Scroll all the way to the end for my 2 cents on the topic.
Malaysians And Their Investments
Anung Un Rama
First investment: Gold – because it’s easy to buy and sell
Second investment: ASB and Tabung Haji fund – I took them because they are low-risk and safe investments
Third investment: (In planning) Property
First investment: Fixed Deposit. I use it as a buffer for emergency funds and will liquidate this when I need it for contingency purpose. I don’t want my extra funds to just sit in the normal savings account, thus FD.
Second investment: ASB – To me, ASB is an alternative to EPF, just its not for only retirement purpose. I will liquidate it for certain financial goals in life, for example, education funds for my kids.
Third investment: Unit Trust – It is not easy to buy ASB. Unit trust is more accessible, plus the choice of risk level is wide, from low to high-risk funds. For my unit trust investment, I go for balanced-high risk portfolio for my current financial goals that are at least 10 years away. Longer investment horizon allows me to take higher risk. I treat it as a place whereby my funds are locked here and letting it grow.
Alan ‘Jordy’ Toh
First investment: Stock Market. I have been trading in stocks since 14. Over the decades, I have had my fair share of hits and misses (often times bigger misses than hits). Though the journey wasn’t a very pleasant one, but investing in financially stable and fundamentally strong companies have given me the best returns in terms of passive income. It will be the main vehicle to fund my retirement.
Second investment: EPF. It is a no-brainer for those with no access to ASB. At an average CAGR of 6%, it is the next best capital-guaranteed fund to be invested for the long-term. The fund will provide the additional boost to my retirement funds when I reach the withdrawal age at 55.
Third investment: Passive Business. Setting up a business that could complement my retirement income is the third on my list. The business should not occupy too much of my retirement time. I have been operating my e-commerce store (AJ Group Marketing) on several popular platforms as a side hustle since 2014, and so far the results have been encouraging. The business has garnered quite a substantial following as I put customer service as the top priority. I hope to sustain the income generated from this business throughout my retirement years.
Jason Arvin Tan
First investment: Stocks – I love investing in stocks, simply because it gives out good returns for short/long term if invested properly. The advantages of stocks investment is that it helps my money to grow in various ways which are through capital appreciation, dividends or right issues when a particular company does well financially. Moreover, stocks are one of the assets which are highly liquid. If I need some money for an emergency, I could sell off my stocks and withdraw money within few days. I can’t do the same if I owned lands or properties.
Second investment: EPF – Even though I’m just 24, I have started to plan and save out early for my retirement through EPF account. If we look at the past 10 years records, EPF gives us an average of 6% return per annum, which is good compared to an average savings account. The earlier I save, the more I gain when I retire!
Third investment: Currencies– I always look to buy foreign currencies when I have some extra money in hand, The reason I buy foreign currencies is to protect the value of our weakening ringgit. This strategy of investment is also called hedging! Other than that I feel the thrill of owning different denominations of currencies
Tya Shatirah from www.nakweekend.com–
First investment: Gold saving started from my parent who buy me gold bracelet and neckless. Now I add couple sets of them for investment purpose
Second investment: ASB – started from my mom opening an account and putting in RM50 every month. I continue the practice until now.
Third investment: Property – for rental income purposes
Alex B Day
First investment: I’m starting investment with ASNB through ASB-financing & ASB2-financing. Sacrified some of my income applying asbf, slowly max out asb2f. The ROI are not bad expecially when include principle return plus can serve as emergency fund too. Currently, I’m just letting them compound interest.
Second investment: Stock – For capital gains and dividend returns. Currently I’m more into REITS while searching/learning other stocks to invest in
Third investment: ETF through robo-advisory platforms. Low fee, less headache to manage
First investment: KPF (Koperasi Permodalan Felda) – Open for Felda settlers including family and Felda staff. It has 7-10% investments return
Second investment: EPF since 2005. I’m lucky as my company contribution is quiet high compare to other company around 16% while my contribution is 11%
Third investment: Other Amanah saham such as ASBN and ASW2020. I have Tabung Haji as well – registered my name for hajj with minimum deposit of RM1300.
Nur Hidayah Abu Bakar
First investment: ASB – because its low risk, has consistent dividend, ease of transaction, long-term
Second investment: Property – medium risk, high CA/CF, medium to long-term, requires a lot of cash
Third investment: Gold – sturdy against inflation, ease of requirement, long-term
First investment: ASB – my parents help me to open up since i was a lil kid, maxed up ASB1 years ago and now halfway to max up ASB2 without loans. I also put spare change in ASW2020.
Second investment: EPF – since I’m 17 years old, when I took factory work after SPM, while waiting to enter uni
Third investment: Unit trust
First investment: Stock market – if you do your homework right, the stocks market can give you high returns over other instruments. Furthermore, one of the advantage for us retail investors is that we aren’t exposed to market risk compared to unit trust (due to their fund size), so retail investor can still outperform the market even when the index go down, except in recession
Second investment: ASNB – no risk of capital loss, with at least 5-6% return per year. Knowing the risk of losing money in stock market teaches me a lot about ‘risk’ in investing. An investment with literally 0% chance of losing money with that 5-6% is kinda big deal.
Third investment: Human capital – The best form of capital is human capital. I believe that even if you don’t have a lot of money, you can still ‘invest’ by reading books, taking courses wether offline or online (Edx & Coursera)
First investment: Cryptocurrency – its easy to get started on crypto
Second investment: ETF – which is also easy to set up
Third investment: Stocks – Invest stock last is because of open a CDS account is very troublesome
First investment: Unit trust
Second investment: ASM. First and second investments are my foundations
Third investment: Stocks, for a bit more aggression
Suraya Zainudin (that’s me!)
First investment: EPF. I started working (as a telemarketeer) at 17, and part of my pay went to this retirement fund. At first I hated having my own money taken from me automatically, but after a while I was thankful of the system. Not every country forces employers to contribute an additional 13% out of their own pocket towards employees’ future.
Second investment: ASB. Found out that it’s a no-brainer so I opened an account. Soon after that I applied for a 25-year RM50k ASB financing loan.
Third investment: Gold. It was my first taste of ‘speculative’ investment. Covered this in more detail in the What You Should Know About Gold Prices In 2008-2018 article
My 2 cents
First of all, remember that the sample size is fairly small. Including my own, there are only 13 examples compiled here, and less than 20 overall (go to the FB mini-forum thread to see more answers). Nonetheless, there are some interesting observations.
Observation #1 – Some investments are more popular than others
A significant number of many Malaysians’ first three investments are these 5 types of investments:
- Fixed Deposit
- Mutual Funds/Unit Trust – which appeared in the form of ASB (dan sewaktu dengannya), EPF, PRS, Tabung Haji, etc
The reason why they are chosen more often over other types of investments is simple: they have history and solid reputation. That’s important in the investing world, especially if you’re just starting out.
I covered more about these investments in the Pros & Cons List of 5 Popular Investments in Malaysia article
For other investment options available for Malaysians, check out the What can you invest with RM1000? article
Observation #2 – Gender differences
It’s interesting to see the gender difference. From the replies, you can see how women tend to be more conservative, while men tend to make riskier investments.
Which investing style is better for the long-term? Women’s. Ironically, men are more emotional when making investment decisions.
Men reading this, calm your ego if it flares up. This information may save you from huge debt or bankruptcy, and by extension, saving you from broken marriages and even suicide in extreme cases (remember the statistics how many divorces are caused by financial troubles? Yeah). My intention is to help. Accept the help, because those situations are too painful for words, and prevention is better than cure.
As for women, know that (1) our natural preference for low-risk opportunities is great, but that also means we lose out a lot in high-risk-high-rewards opportunities, which men tend to take (and sometimes pays off, big time), and (2) you are better at investing than you think.
Observation #3 – ‘Investment’ has a different meaning for some people
My original question asked how Malaysians diversify investments. What I didn’t expect was a few replies which interpreted the question a bit more creatively. Some readers gave these type of answers:
- Investing in own business
- Investing in learning and self-development
- Investing in relationships
They’re not technically investment vehicles, but I love it. Yes, you’re so right, those are worthwhile investments to make!
Observation #4 – Personal interest in a specific investment makes it fun!
Some of you mentioned how your interest in a particular investment vehicle – the stocks market, for example – made you more excited to learn all you can about it. I think that’s really cool! It *is* a lot more fun when you’re enjoying what you’re investing or trading in!
I guess this supports the theories in the 12 Types of Investment Available in Malaysia and The People Who Have Them article. Some people have traits which makes them more likely to prefer one investment vehicle over another.
Well, those were my three observations. What do you think? What were YOUR first three investments? How do YOU diversify investments? Take one min to share what you think 🙂
As a Malaysian expatriate working and living outside of Malaysia, my investments are as follows:
ASB – consistent return of 6-7% and fixed unit value.
Tabung Haji – consistent return of 6-7% and zakat deducted
Unit Trust – freedom to select mutual funds and switch. But fees are expensive
PRS – similar to EPF with freedom to select PRS funds
ETF – lowest fees and good return. Robo-advisory is interesting fintech.
Your portfolio looks wonderful!
Re: Unit trust- how often do you switch and why?