Looking for Investment Advice for small sum of money

[caleb86]

Hi r/MalaysianPF, I am a 23 y/o fresh graduate who currently has abt 30k in the bank from past job savings. Currently I am working full time with a 3k salary.

Currently what I have been advised is:
- save 6 months of salary (18k) as an emergency fund in FD or Savings Account
- save an additional 19% of my income into EPF
- use the remaining as investment funds to grow a diversified mid-risk portfolio.

Looking for:
- pointers, where and how to start. What should I he investing in. Technically open to everything stocks, funds, crypto, epf, reits, propety etc.
- how much should I diversify to each category of investment.
- MPlus, Rakuten or other trading platforms, whats the difference and why?
- should I be getting a credit card to pay bills to start building credit score ? (Not a heavy spender, generally spends on necessities and occasional food hunts)

Thank you fellow Redditors in advance. Am abit dumb when it comes to investment / money

 

[magda0316]

@caleb86 Firstly, props to you for thinking about investing at a young age.

To answer your questions:

• As you're working, you're automatically contributing to EPF (unless you're not, then that's a separate issue). Crypto is very risky (more so than the rest), so do your own research and invest *very* sparingly. Not saying go all-in, but don't discount it.
• Stocks has some "required reading and analysis" before you start, so you'll need to do research before committing to buying any stocks. If you're not too sure what to buy, do an analysis of "companies that are involved in your life" to narrow down which companies you should research. This also applies to REITS as well.
• If you're a bit lazy to do the groundwork, you may opt to invest in unit trusts/mutual funds. Same thing applies though: you should know what companies are in your unit trust/fund. You can do your own research or have an agent recommend some funds to you. (I can do that; message me if you'd like).
• Property might be a bit early to think about at this stage but perhaps in the future, you may consider getting a loan for a place and renting it out for the income. Looking for tenants and maintaining the place will be part of the challenges you might face.
• The differences between the trading platforms lies mainly in their fees and their user interface. You may need to shop around and see which one you'd like.
• You *can* get a credit card, but be wary of going ham on the spending. You might be a light spender now, but it may get out of hand if you're not careful.
• Investing is all based on your goals, time horizon and risk tolerance. Consider these before REALLY starting your investment journey.

I encourage you to do your own research. If you'd like to talk about it further, don't hesitate to DM me.

 

[snowlico]

@caleb86 I like gold (not physical) . My small investment in 2nd week of March can potentially net me 550+usd i(>15%+) n profit if I decide to sell. I deal directly with a local gold company (cut out banks etc as middlemen). Most people I mention it to dislike the idea this company exists and claims they are not reliable. I guess by association the banks that source their gold from them are unreliable too eh.
After reading several posts and comments about FD, I'm not keen unless I want to store emergency funds for super mega rainy days since it sounds like you need time/hassle to withdraw. I just make an FD pledge credit card instead.. Mostly to monitor my spending on necessities other than loans. Plus the bonus cashbacks and reward points don't hurt.

 

[dlovingbrother]

@caleb86 I was basically in your position when I started working about 5 years ago, I had about that amount of savings and earned the same salary at my first job. You could look at my profile to see what my investment looks like.

I really think the emergency fund amount is based on a case-to-case basis. For example many of my friends who live with their family and use the family car to commute don't bother having a large emergency fund - they may save 1-2 months to cover any sudden car costs but that's it. I saved about 4 months of emergency funds at the start (meaning that I could cover my living costs for 4 months if anything happened) because if something did happen, I had family/very close friends who I trust to help me out (e.g I could move home or crash at a friend's place to cut out rent.) However if you're on your own, you may want to save up to 12 months to account for time you need to spend job hunting if you lose your job, which is the most common need to draw on the funds.

I invested into Stashaway because it was easy, on my posts you can see many people criticising that choice haha. I appreciated that it introduced me into investing and as someone who was starting out, the ease of use and low risk was appealing to me. If you like to be more involved, you can try buying local stocks (everyone and their grandmother recommends Maybank). For ETFs, try reading up at r/Bogleheads.

I got a credit card, I wouldn't say it has incredible benefits because I'm a low spender (a lot of cards give you better benefits if you spend more.) I get about RM7-10 cashback every month from groceries, which is better than nothing.

 

[cataline]

@caleb86 For your first question, the answer lies on your own risk- rewards tolerance. The higher your tolerance, the more risky/rewarding asset classes you can invest in (after doing due diligence). Half the battle of investing is with your emotions, no point investing in something too volatile and selling the wrong time.

 

[blueskies88]

@caleb86 FD, for now. its not often you can get 4% .

 

[phoenix70]

@blueskies88 There is Maybank 4%

 

[judenshabbot]

@caleb86 Stretch that emergency savings to 12months. 6 months is from very old data, like 10 years ago. At least 9 months.

 

[daisy34]

@caleb86 buy reit. slightly risky compared with FD but higher return.

 

[phoenix70]

@caleb86 If you not good with stocks. Let remiser handle it for you. If u have medium risk appetite go for unit trust. Not necessarily u need to have 12 months of emergency. What? Is it you going to laid up to 12 months? Not logic there. Like me 3 months more than enough. And for epf ya you can go for more. As long as u consistent. The most important thing u should go for having medical card first

 

[niv80]

@phoenix70

If you not good with stocks. Let remiser handle it for you.

I'd be more careful with "let remisier handle it". Remisier earns money from transaction fees, not the stocks profitability or dividends. They might want you to keep trading as often as possible even if it means you are losing money in the long run.

 

[weeone54]

@caleb86 Consider creating an IBKR brokerage account and a Wise account to trade in ETFs.

IBKR has very low commission fees and Wise has cheaper currency conversion fees. You need to convert your MYR to USD to trade there.

If you're going to hold long term (10+ years), it is a good idea to check out ETFs like VT or VOO.

For disclaimer purposes, this is not financial advice.

 

[loreina11]

@caleb86 Credit card allows for added flexibility so as long as you have good self-control and pay on time, I can’t recommend enough. It also enables you to keep less liquid money for emergency as you can just use credit card and pay later.