RM 1000 doesn’t sound like a lot, does it? Especially in this day and age, looking all measly here. Well, money doesn’t grow on trees, and you’ll need to work hard for it. Just like how our elders say, “Save a little change every day, and you’ll have a lot at the end!”
So, how can you grow your money, and where? Is it trusted?
Introducing Investment Funds!
You’ll be surprised to find that there are many reliable investment funds for you to choose from.
Here are 10 ways for you to invest your money!
1. Amanah Saham Bumiputera (ASB)
ASB is managed by Amanah Saham Nasional Berhad (ASNB), a wholly-owned subsidiary of Permodalan Nasional Berhad (PNB) that owns all of its shares. It is a premier unit trust investment meant for the Malaysian Bumiputera.
It is intended to be a long-term investment fund. ASB has traditionally produced great results, however in recent years its distribution rates have declined. Still, its comparatively strong returns redeemed itself, making it one of Malaysia’s top picks on top low-risk investments.
Some highlights to look into:
- Risk Level: Low
- Only RM 1 per unit, with no negative returns until to date
- Maximum investment caps at RM200,000
- No sales or redemption charges
- Returns are between 4.25%, up to 10% per annum.
2. Employees Provident Fund (EPF)
EPF is a scheme that is created when you start a full-time job at a government or private organisation. This investment pays interest and can be used to fund a portion of your post-retirement life or future ambitions!
Although you have contributed to your EPF savings with the mandated rates, you can actually contribute far more now after the Budget 2023 was announced, raising voluntary EPF from RM60,000 to RM100,000. The government will also broaden the scope of insurance premium tax return or Life Takaful contributions up to RM3,000 as well. You may self-contribute to your EPF account through online banking, i-Akaun or even bank agent counters here.
Some highlights to look into:
- Risk Level: Low
- Annual returns between 5% to 6.4%
- Provides minimum payout of 2.5% for traditional (non-Shariah) accounts
3. Private Retirement Schemes (PRS)
The PRS is like your EPF account, with the difference that this investment fund is optional. It allows you to invest in authorized unit trust funds administered by 3rd-party PRS providers.
It’s also hard to withdraw money from it to prevent you from dipping into your investments, so it’s a good way to make you save up too!
You can only withdraw funds for specific objectives, such as housing or healthcare, or you may face an 8% tax penalty.
Some highlights to look into:
- Risk Level: Low – Medium
- Able to receive up to RM3,000 in tax exemptions if you invest in PRS until 2025
- Up to RM900 in taxes saved depending on your income level
- 3% upfront sales costs & 5% annual management costs
4. Real Estate Investment Trusts (REITS)
REITs are unit trusts founded by businesses that purchase and manage real estate with funds raised from shareholders. REITs invest in a wide range of assets, including residential, commercial, industrial, and retail.
This form of investment is preferred by investors as they have better dividend distributions than conventional stocks, between 4% – 8%. The investors are encouraged to give out large dividends since they must transfer at least 90% of their profits in order to be tax-free. You’re able to earn from them as well through capital appreciation.
Some highlights to look into:
- Risk Level: Medium
- Return rates vary from each organisation, so please check beforehand
- Advised to invest funds over a long period of time to have positive growth
5. Unit Trust Funds
Unit Trust Fund is a type of mutual fund that allows investors with similar objectives to combine their funds and invest in a portfolio of securities or other assets. The joint funds are subsequently invested in a portfolio, including cash, bonds, deposit, stocks, real estate, and commodities by a professional fund manager.
From as little as RM 1,000, the Unit Trust Funds allows you to invest in a diversified, professionally managed portfolio! Your ROI (return of investment) will typically be in the form of income distribution and capital appreciation obtained from the pool of assets backing the unit trust fund too.
Some highlights to look into:
- Risk level: Low – High
- Around 5% in sales charges
- Other fees include platform fees, annual management charges, trustee fees, etc
- Return rates vary from each organisation, so please check beforehand
6. Exchange Traded Funds (ETFs)
ETFs are similar to Unit Trust Funds, as it’s an accumulated investment scheme that allows you to invest in diversified underlying assets. ETFs tend to combine investors’ funds to acquire a portfolio of stocks, bonds, or other investments. Like stocks, it can provide returns through dividends and capital appreciation.
ETFs are advantageous for new investors as they offer rapid access to a diverse set of investments for a relatively small amount of money, which is RM 1,000 in our case. It also has lower fees (usually less than 1% each year). However, ETF fund management monitors or duplicates the performance of a benchmark index rather than choosing specific stocks or assets to invest in as Unit Trust Funds do. So, unlike unit trusts, an ETF’s success does not depend on a fund manager’s forecasts of how the market will perform in the short term.
Its highlights include having risk which varies as it depends on the specific ETFs chosen.
7. Blue Chip Stocks
Don’t be fooled here as blue-chip stocks aren’t regular stocks!
Blue chip stocks are popular shares of corporations with substantial market capitalizations. These organizations offer high-quality and generally recognized products or services. They can withstand economic setbacks, contributing to their long track record of consistent and reliable growth.
Blue chip stocks also pay out dividends regularly (can be quarterly, yearly, etc.), an advantage for investors who seek consistent income from their investments.
Do note that blue stock chips are meant for long-term investment to make a big profit. There are also brokerage and transaction fees, of which generally 0.05% to 0.5% will be charged. There is also a minimum fee of RM 7 to RM 12. Meaning, if you had invested about RM 100, RM 10 will be transaction fees alone.
8. Robo Advisor
A Robo advisor is an automated financial advisor offering algorithm-driven wealth management services with little to no human participation. Algorithms are used by Robo advisor services to automate your investing portfolio.
When joining a Robo adviser platform, a questionnaire will need to be filled out concerning your risk tolerance and investment timescale. The platform will then implement specific algorithms to automatically invest your money (typically in ETFs) and adjust your portfolio in response to market circumstances regularly.
They also offer lower management fees (around 1%) than unit trusts, consuming less of your potential earnings over time. In Malaysia, platforms like Wahed Invest, StashAway, and Akru are all very accessible to many, and anyone can start investing in them with just a few RM too!
RM 1,000 doesn’t sound so bad now in Robo advisor, right?
9. Cryptocurrency
We believe you’ve heard of crypto right?
Investing in cryptocurrencies could take numerous forms, from purchasing cryptocurrency directly to investing in cryptocurrency funds or organizations.
It is an excellent investment if you want to obtain direct exposure to the demand for digital currency, but it is often risky. An option to consider would be buying the stocks of organizations with cryptocurrency exposure.
Although this investment fund is lucrative, it poses high risks and is volatile. It is also susceptible to market manipulation, which would likely lead to a sharp downfall in its value. If you think you can take a shot, look into Luno or Tokenize, as these are currently verified platforms by the Securities Commissions Malaysia.
10. P2P Lending [Debt-Based Crowdfunding]
P2P is another type of crowdfunding. It differs from equity crowdfunding, as P2P involves loaning money to businesses in the exchange for receiving interest payments until the debt is paid off.
P2P provides better returns than bonds or blue-chip organizations, with potential profits hitting 10% a year. With high profits, it comes with high risks, as this form of investment is used by startups or new organisations. You would need to be mentally prepared if the business were to go south.
Generally, RM 1,000 is needed to deposit into your account to start investing but it varies with each campaign you choose. Take note it is a high-risk investment, so do consider it before investing!
Conclusion
To conclude, investment funds are a great option to increase your income! Do note that whichever you select, it should be a long-term investment for it to mature.
Money doesn’t come to you if you dream it, but when you take action to earn that dream of yours! Remember, it can be done over time, not overnight!
IMPORTANT: We do not support nor are promoting these organisation’s words as mentioned here. You are at your own risk in making smart investment choices and IQI Global will not hold responsibility should you make some regrettable decisions.
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