[Guide] How to save MYR, the kiam siap fresh grad edition

[hazelhope]

@cadie In general, one should take riskier investments when they are young because they have the time to earn it back or wait it out for the market to recover.

However, riskier investments does not mean crypto or penny stocks. Equity (stocks) are the risky investment. This means go 100% equity if you are young.

If you get older, you should allocate more to bonds like 60% bonds, 40% equity.

 

[destls]

@hazelhope Also, many forget that the time you have to ride out the riskier investments, is the time when your parents are still around.

So the time isn’t always set in stone. I have a friend who dabbled in various high risk high return investments in previous years but now his father is retired and ailed, and he saw the point I was trying to make. Dude didn’t have 10k in his savings even though he’s closing to 40 now.

 

[hazelhope]

@cadie Well, it is because of my risk appetite. Again, I am not saying all should follow.

High volatility does not mean high returns.

If you invested RM100k into cryptos and it became RM10k (i.e. a 90% loss), you need to find an investment that gives you 900% return on your RM10k just to get back to the RM100k initial investment.

Even if you doubled your money in cryptos, can it double again in the next few years? Finding a consistent tested strategy is important.

Index investing should double my money in 9 years (if not earlier). This is good enough for me. If I combine it with covered strangles strategy, it is possible to shorten this to 4 years with high probability of success.

 

[nekiness]

@cadie Well it depends what you mean by 'high risk' and 'ride it out'. For those who believe in cryptos, they believe a 90% drop will eventually be back up to previous highs. But some don't believe that. Some penny stocks or small company stocks won't recover from a huge hit. So I think he has a point to recommend the conventional wisdom when investing. Of course it's a different story for those who really know what they are doing.

 

[cadie]

@nekiness Better to recommend people learn what to do rather than apply default no brainer strategy to investing, thats why so many people get scammed by investment linked insurances etc, because they dont bother to do any homework for the most important topic in their life

 

[warriorprincess4life]

@cadie This is true dude... Best to invest in yourself

And by that I don't mean the Prada shoes and Gucci shirts ya

 

[cadie]

@warriorprincess4life Only if becoming insuran ajent

 

[nekiness]

@cadie True. But buying a broad market index fund or ETF is a strategy that everyone can do and can almost never go wrong long term. Cryptos and penny stocks, even the veteran investors still have something bad to say about them.

 

[charlesstewart]

@hazelhope Thanks OP for the write. I was astounded that there are people that still practice this kind of budgeting on food and transportation. I have been practicing this budget for about 2 years now, and i have one crucial advice for newbies.

Please prioritise your health rather than your budget. I used a RM10 budget a day that compromise of Nasi Lemak, nasi campur and plain water for about 3 months before i realised the consequences.

Changing recipes is a great way of getting satisfaction on a long run. And please at least once every two weeks, find the budget and time to join your co-workers on lunch, trust me food is great at building small talk.

 

[bartrila]

@hazelhope tbh why put in FD when you can put the money into an OCBC Frank account? It gives 1.8% PA and has the liquidity that Stashaway + FD doesn’t have. Not to mention StashAway withdrawal takes like 5 business days based on the last time I pulled it out.

 

[hazelhope]

@bartrila I don't know about that product but their product sheet says you only earn the bonus interest of 1.50% p.a. if it's in a save pot. Otherwise, it's 0.30% p.a.

The amount in the “Save Pot” is earmarked and cannot be withdrawn or spent. As the accountholder, you decide how much money in your account is to be placed into, or removed from, the “Save Pot”, at any time at your convenience.

 

[bartrila]

@hazelhope Hey OP! It’s actually 1.8% as the base rate of 0.3% is included in the ‘Save Pot’ as well. https://www.ocbc.com.my/assets/pdf/Accounts/FRANK_Account_PIS_ENG.pdf

The ‘Save Pot’ and ‘Spend Pot’ can be easily adjusted in the app and there’s no down time to it btw. Since it’s going to be 3-6 months of emergency fund, liquidity will still be the most important factor so personally I wouldn’t want to put my money into FD.

 

[hazelhope]

@bartrila Interesting.

Are you sure you don't have to spend certain amount using their credit card, save certain amount monthly into the account?

IIRC, their OCBC360 account requires you to do that and bonus interest is only applicable if you meet all criteria and restricted to RM100k only.

 

[bartrila]

@hazelhope Yes I’m sure as of right now although I’m not too sure if there’s a 100k limit like 360. RM20 is the minimum amount you have to maintain in the account.

Frank is a relatively new product by OCBC and I’m guessing it’s to let people have liquidity while earning interest since COVID has been quite...harsh? Suyin also made a video on it about 6 months ago. I’ll link it here:

360 is a totally different account but if you’re willing to put in the work, 2.15% is easily achievable. I missed the days of 4.20% smh

 

[samar619]

@hazelhope EDIT the bigpay out, if u want the post to still be here
it violates their TOC iinm.

 

[hazelhope]

@samar619 I don't see how it violates their TOC.

 

[samar619]

@hazelhope honestly im not sure either, but the mods here remove post/comments regarding bigpay

 

[summerw]

@hazelhope Still can't grasp your low interest borrowing with credit card explanation @.@

 

[hazelhope]

@summerw There is a gap between when time you use your credit card and the time you need to pay. The main idea is to exploit this gap.

Interest rates are measured in fees. A bank may quote you 0% interest rate but charge you upfront fee. This fee itself is interest in disguise. It's a marketing tactic.

 

[steverod]

@hazelhope I like this - like a lot, thanks for sharing man

I've definitely applied all of these especially when I first started out as a fresh grad, I wouldn't recommend borrowing money from credit cards tho but that's my only criticism - otherwise, great job man! Please do more of these!