How to Invest RM 10,000 (The Smart Way)

With the advent of the GST, and the subsequent tightening of budgets, investing your money may just be the only option for overcoming price increase and inflation.

Though you don’t need to be a millionaire to make money through smart investments. With the right information and mindset, you can leverage investment opportunities to increase both your wealth and your lifestyle.

Here is how you can invest your first RM 10,000 the smart way.

1. Understand how much risk you feel comfortable with

Not all investments are made equal. From conservative Government securities and bank fixed deposits to riskier equity funds and listed small cap shares, there is a wide range of options, and attached risk, available to you.

Typically, safer investment options yield lower returns but with greater security. While those riskier options can generate a higher return, but they also offer fewer guarantees that you will get a return at all.

As such, it is an individual decision to understand how much risk you are willing to take when looking for a return on your investment. We recommend establishing a safety net of up to six month’s salary before entering into investments. This enables you more room to go after those bigger risk-reward investment options that can pay off big time in the long run.

2. Fixed deposits (FD) offer a great low-risk option

Sadly, interest rates for standard bank savings accounts have remained close to 0% for some years now. However, if you put your money into a fixed deposit, you can find accounts paying around 3 – 4% interest rate. You can make your money work harder for you by making this simple switch.

Also note that fixed deposits in Malaysia are covered for up to RM 250,000 (source: Perbadanan Insurans Deposit Malaysia), making it a low-risk investment option offering steady returns. That said, fixed deposits still operate below inflation, so if you want to grow your wealth considerably, it may not be the best option.

3. Trading shares offers greater rewards, but also additional risk

The epitome of the investment portfolio, buying shares and becoming a shareholder of a listed company offers the promise of great returns. The key is to find quality companies that are undervalued in the market. This could be start-ups that are just about to take off or struggling businesses with room to bounce back stronger.

However, note that none of these investments is secure, and thus thorough research will be your key weapon in making significant money.

4. Commodities have been a strong option historically

Commodities, including gold and silver, are another investment option you can explore with your RM 10,000. Historically, gold prices have provided investors with a healthy profit, although the price fluctuations in recent years have made it an increasingly risky investment opportunity.

5. Diversify your investments

If there is one rule to live by, it is that you should look to diversify your income streams so as not to be overly reliant upon one single stream. The same is true for your RM 10,000.

Look to balance your low-level risk and riskier investments to ensure you are taking advantage of the benefits of both investment types. From the steady interest of fixed deposits to commodity trading, and investing in shares. By incorporating each into your overall investment portfolio, you will be better able to overcome any issues with a single investment item.

With the A-InvestLink Investment Plan you are also able to enjoy greater freedom in your investments. Including the ability to top up your investment amount at your convenience, automatic fund rebalancing, and disability benefits.

If you are looking for a short-pay savings plan, with guaranteed cash payments and potential investment gains, then A-EnrichGold allows you to maximize the returns on your hard-earned money.

By exploring the investment options listed above, you will be well on your way to building your wealth. Although, as with anything wealth-related, markets and investments can fluctuate up, and down. So please do seek consistent professional financial advice, as AIA will not be held responsible for such eventualities.

References

http://www.nst.com.my/news/2016/10/182224/2017-budget-lifestyle-tax-relief-extended

http://ringgitohringgit.com/retirement-in-malaysia/

https://www.blueshorefinancial.com/ToolsAdvice/Articles/FinancialPlanning/TenReasons...

http://www.investologic.in/financial-planing-infographic/

http://www.thestar.com.my/business/business-news/2016/09/03/many-malaysian...

The above articles are intended for informational purposes only. AIA accepts no responsibility for loss which may arise from reliance on information contained in the articles.