Investment is one way to fund the surplus money caused by our growing economy. Did you know it contributes to inflation? The OPR (Overnight Policy Rates) is increasing to reduce individual spending to avoid excessive spending. Due to the OPR going up three times, the price of goods became more and more expensive.
In his video entitled “Ten Investments in Malaysia, which one to choose? (10 pelaburan di Malaysia [Investment] Nak labur mana?),” FinancialFaiz suggests investments you can do according to your financial capability, from low-risk to high-risk! It is a better way to avoid inflation and one of the ways for you to get a good return when investing (well, everyone must want to make a profit when investing). Interesting, isn’t it?
Talking about the investment, it is very beneficial for an extended period. However, if you want to profit in the short term, it is possible. Earn more by investing more.
Three essential pieces of information you need to know!
Risk
In investment, you need to understand three basic things. First of all, it is a risk. Your money is at risk of disappearing if you don’t get a lot of returns or zero returns. Even if you think a small or zero return means a profit in a year. Know that you are wrong! In terms of inflation, it does not bring profit because day by day, the price of the merchandise is increasing. Your investment amount should increase over time. You must get at least a small amount of return. Otherwise, you will be getting a negative real return.
Expected Return
Regarding returns, it will touch on upswings and downswings. Even if your return is negative, it still counts as a return. For example, if you put your money in stocks, you will get three returns: capital appreciation, depreciation, and dividends. You will get depreciation returns if the stock price falls. However, your investment will not guarantee the same return every year.
Liquidity
The term liquidity is used to determine which assets can easily give you a return in the form of money.
Ten types of investment you can choose in Malaysia
Low-risk investment
1) ASB
A form of a unit trust. One unit is sold at a fixed price of RM1. ASB returns are dividends that will be announced at the end of the year, namely ASB1, ASB2, and ASB3. These three ASB are the same but start and end in different months. ASB is only open to bumiputeras. Returns have reached as much as 5% lately and have never been negative.
2) Tabung Haji
Tabung Haji gives a lower return than ASB. The advantage is when you earn the capital and returns, Tabung Haji will use it to pay zakat. For Muslims, it will undoubtedly make your zakat payment process more manageable.
3) Fixed Deposit
Fixed deposit returns are not significantly different from OPR. For example, if OPR goes up, Fixed Deposit will go up, and vice versa. The downside of Fixed Deposit is that you have to resubscribe every time the promotional period ends, unlike ASB and Tabung Haji.
4) SSPN
The advantage of SSPN lies in its tax relief. For example, suppose your income reaches RM100k, and you insert an amount of RM8000 in the SSPN account of your legitimate child (biological child, stepchild, or adopted child). In that case, your tax bracket is 21%. Thus, 21% multiplied by RM8000 equals RM1680. So, you don’t have to pay a tax of RM1680 to the IRB.
5) EPF/KWSP
EPF payments are deducted from your monthly salary by 11%. The return given is also never less than 2.5%. However, the downside is that you cannot withdraw the money until retirement. EPF is an illiquidity asset.
Medium-risk investment
5) Gold
To those interested in investing by buying gold, you cannot practice it if you do not have a long-term savings plan. The main disadvantage of gold investment is Spread. Spread is the difference between the selling and buying prices of gold. So, you can’t sell it in a short time. Gold investment is only suitable for long-term plans.
6) Unit Trust
The unit you buy is part of a large fund invested in underlying assets such as stocks, bond markets, money markets, or a combination of all three. With low risk, you can buy unit trusts in blue chip companies such as Apple, Axiata, Digi, and Petronas. Why? Because blue chip companies have a low probability of going bankrupt.
7) Shares/Stocks
You can buy shares directly and become one of the minority shareholders, retailers, and small investors. For this type of investment, you can choose to make Intraday trading or Positional trading.
8) Property
Property is an investment branch that belongs to illiquidity. To invest in property, you need to take a loan, and you will be dealing with property leverage. A significant investment makes it difficult for you to end it if the market faces a downswing.
High-risk investment
9) Forex
Forex is being confirmed as non-compliant with sharia. Due to the small price changes, most traders will use the leverage from brokers for trading in Forex.
10) Crypto
Examples of crypto are Bitcoin, Ethereum, Luna, etc. Crypto allows you to lose a lot of money while receiving a lot of money simultaneously. Crypto also will enable you to use leverage to buy many coins. However! If the platform makes a margin call, you risk losing your capital.
Sources: Youtube FinancialFaiz
