I'm New To Investing. Where Do I Need To Start First?

Posted by Damia Zara on August 7th, 2018

There are a lot of misconceptions about investment around us that has kept many people confused and away from investments. In real, investment is not that complicated. All that you need to know are the concepts of compounding and delayed gratification. So, when you think you want to start investing, it is not mandatory that you need to have a huge amount set aside for investment. You can begin the investment with an amount as small as RM1,000.

The precautionary measure you need to take before investing is to check and confirm that you are not under any kind of debts ranging from credit card bills till any loans. If you owe to any such debts, it is wise to first clear off all the debts and then get into the world of investments.

When making investments, the common knowledge one needs to have is that every mode of investment comes with a risk. The logic goes like, higher the returns higher is the risk involved. So, you need to decide if you want higher returns or you want to keep your money safe and earn a small profit. Let us see different modes of investments with varying risks involved in detail:

Low Risk Investments

  • Fixed Deposit (FD)

Fixed deposit must be the first option that you can think of when you are looking for an investment plan. Mostly, the retired people go for fixed deposits to spend their retirement life because of the ease of the concept and the steady fixed income that is returned. Fixed deposits are known for their strategy of low risk and low returns when compared to other investment options. Fixed deposits are nothing but a bank account where you put some money and keep it there for a long time. You cannot withdraw the deposit amount you put into the fixed deposit account until the deposit tenure is complete. However, you may be allowed to withdraw the interest earned depending on the bank’s policies.

  • Amanah Saham Bumiputera (ASB)

For the benefit of Malaysian Bumiputeras, Amanah Saham Nasional Berhad (ASNB) has launched a unit trust fund named ASB. ASNB is a subsidiary of Permodalan Nasional Berhad (PNB). ASB is a long-term investment that acts as an equity income fund. Each unit costs RM1.00 and you have to buy at least 10 such units to invest in ASB. One can invest a maximum of RM200,000 into ASB. ASNB provides the dividend on your investment on yearly basis i.e., 31 December is considered to be the closure of the year. Though the returns are given on a yearly basis, they are computed on a monthly basis. You can expect an interest rate of 8.5% p.a. or above on your investment. This interest rate is high enough comparatively and so ASB gets its popularity. However, this scheme is limited for Malaysian citizens and is not applicable for foreign citizens.

Medium Risk Investments

  • Unit Trust Funds

Unit trusts are categorised to be medium risk investment mode because it needs a higher level of knowledge to understand the scheme. Unit trust is a collective investment tool where people with similar view point come together to invest on a particular portfolio. These funds are pooled on a portfolio in different forms such as cash, bonds, shares or commodities. Investors earn equal returns on each unit based on the level of distribution or capital appreciation. Investing on Unit Trust Funds include fees and charges like sales charge, trustee fee, etc. But if you invest on Unit Trust, it is good to approach with an agent so that the unnecessary fees and charges can be cut off. This can be a good option to start investment with because it works with a small capital and is convenient for a first-time investor to enter into the market.

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Damia Zara

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Damia Zara
Joined: April 13th, 2018
Articles Posted: 2

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