“What’s your financial advice to Malaysians so they can do well in 2018?”

To help us kick off 2018 in style, I asked the above question to a variety of finance writers. Some of them are CEOs, others are independent financial advisers, and I was even lucky enough to get a few Twitter-famous personalities.

If you recall, I did the same “Expert Roundup Article” thing last year. But this year, I decided to sharpen the focus. Not only did I ask the general question, I also asked the experts for more specific advice — especially in the focus areas below:

• General Personal Finance
• Investment
• Property Market
• For Bumiputeras
• For Women
• For Young Graduates
• Bitcoin / Cryptocurrency
• Credit Cards / Fixed Deposits
• The Exciting Fintech Scene in Malaysia
• Contrarian Investing
• Regional Perspective

So I hope you’ll find something useful for you this year. This is what the experts told me:

 

General Personal Finance

1. Lee Ching Wei, Group CEO of iMoney

(iMoney is the leading Malaysian financial-comparison website, which also hosts a great personal finance Learning Center. Ching is the big boss there.)

My advice is still very much consistent:

Stay diversified (by asset class and currency), and avoid any short-term / speculative investments.

The equity markets have had a good run over the last five years, and whilst no one can time the market — it is prudent to take some time this new year to review, take profits and rebalance your portfolio.

 

2. KC Lau, Founder of KCLau.com

(I’ve been a fan of KC Lau‘s writing since more than a decade ago. He’s a legendary pioneer in Malaysian personal finance websites.)

The topic of personal finance is vast, but it can be stripped down to three essential areas. In 2018, or any other year, focus on these three items:

1. Make more money

If you are an employee, how do you increase your productivity? How do you create more value for your employer? How do you get to the next level? These are the things you need to focus on — so you get a promotion, a 20% salary increment, or a fat bonus.

If you are a business owner, how do you get more customers? How do you increase your sales volume? How do you get better profit margins?

Putting most of your efforts for better income yields the best results, even for the long term. It is because when you can make more this year, you will get to another level next year!

2. Maintain a healthy savings rate

I recommend a savings rate of at least 30% — saving RM 300 from every RM 1,000 you make. So if you are not yet there, do a budget now in January so you can get to 30% at least — by cutting unnecessary bills (especially the recurring ones).

3. Invest for the long term

Whether you invest in properties, stocks, business, or your self-improvement — always think about 3, 5, 10, 20 years later. For example, let’s say you are going to buy a property in 2018. Consider how the property will turn out to be in 3, 5, 10 and 20 years later. If you’re confident it will turn out well in the long term, it will be a very safe buy this year. Most investors have near-term pessimism, and most of them end up doing nothing.

 

 

Investment

3. CF Lieu, CFP, Founder of howtofinancemoney.com

(CF Lieu, CFP is an independent financial adviser (IFA) licensed by the Securities Commission of Malaysia. His IFA means his advice is unbiased. I asked him, “What would be your choice of asset to invest in?”)

I frankly tell my clients this if they expect any investment can do miracles for them:

The best asset class is yourself. Because if you’re such a valuable asset to your clients or employers, the ROI generated (being paid) in exchange for the value you deliver trumps any asset class in the investment world.

Whether you invest in Bitcoin or put everything into Fixed Deposits, it stops being relevant anymore.

Whether you pay 1% or 5% fees on any financial products pales in comparison to the cash flow you generate from being a valuable asset yourself.

 

4. Divvy, Founder of Dividend Magic

(Divvy is only 29 years old, but already has a six-figure stock portfolio worth more than RM 400,000. He writes about stocks, dividends, and even shares details about his investment portfolio.)

2018 will bring about a few BUY opportunities, especially since it’s election year. So be ready with cash in hand.

Always do your research and be on the lookout for financially sound companies.

As with all forms of investing, to do well in 2018 and the many years after: invest! And invest for the long term.

Stay the course and let time and the market grow your wealth.

Remember compound interest — it will be the difference between you having a couple of million or a few hundred thousand in your account in 30 years.

Onwards and upwards!

 

 

Property Market

5. Charles Tan, Founder of kopiandproperty.com

(Charles is a Malaysian property expert who writes at the beautiful kopiandproperty.com. He’s also the COO of an asset auction company (“pays the bills” he says…)

In 2018, start focusing on “Why” instead of “Where” all the time. The underlying reasons to buy are always different for everyone; and it does not have to be those same few spots which are already priced at a premium. Unless for example, you absolutely must stay next to your in-laws.

Focusing on WHY allows for better investment decisions, potentially cheaper property prices, as well as a better ROI — because you would usually start lower. It is not risky to buy or not to buy — it is far riskier to buy the wrong property in 2018.

 

For Bumiputeras

6. Suzardi Maulan IFP a.k.a. Pakdi, Founder of rancangwang.com

(Pakdi writes in Bahasa at rancangwang.com. He’s been in the personal finance space since 2005, and is also a certified Islamic Financial Planner. I asked him if he had any advice especially for my Bumiputera readers.)

As a matter of principle:

1. Avoid investments you don’t understand e.g. if you can’t explain how cryptocurrencies work in layman terms, avoid them.

2. The main focus is always to maximize your Amanah Saham Bumiputera (ASB) i.e. RM 200K. The same amount in Tabung Haji (for Muslims only) if you don’t have ASB.

Focus on other assets once you have maximized your ASB.

 

 

For Women

7. Anna Haotanto, CEO of The New Savvy

(Anna is the founder and CEO of  The New Savvy, a financial, investments and career platform for women in Asia. I asked if she had any specific advice for women.)

Firstly, know your objectives — what are your financial goals? Most people don’t even know what they want. It’s hard to work for something when you have no idea what it is. Most of us have career goals — we want to get promoted or achieve certain milestones in life. But we don’t focus on what and where we want to be financially.

Secondly, know the difference between income, value and growth investing. Then, find out what your investing style is and what you are comfortable with. This makes it easier to pick investments that suit your needs.

Lastly, don’t invest in anything you do not understand.

 

8. Dawn, Founder of SG Budget Babe

(Dawn writes about achieving a financially-free lifestyle in Singapore at SG Budget Babe. I really wish that more young women would get interested in personal finance, so hopefully Dawn’s thoughts give you some inspiration.)

There’s no knowing where the future will take us. Hedge against the unknown by investing in yourself, building up knowledge, and forming good financial habits that will serve you well on this journey of life.

1. Aim to save at least 30% of your paycheck, or 30% more than what you saved last year

The key is personal growth. Don’t feel compelled to compare how much you’ve saved vs others, as the monetary value is nowhere as important as the habits you learn while trying to save money. Learn how to budget, and stick to a budget.

You’ll soon find that branded goods and mindless consumerism may give you a thrill — but they cannot feed you. Look for value-for-money alternatives instead.

2. Clear your high-interest debts

There is little point in investing when you still have outstanding debts, unless you’re an expert who’s able to generate high returns consistently without ever losing money. There’s no point in filling a leaky bucket with water if you don’t patch the hole first. Focus on clearing your debts with the highest interest first.

3. Maximize cash back returns from your credit cards

Make good use of the tools available to maximize your returns for every dollar you spend (on current expenses).

4. Invest in yourself and learn how to grow your money

Pick up knowledge on personal finance, including basic insurance know-hows and investments in the market. Learn how to make your money work for you in the market.

For the risk averse, government bonds and fixed deposits could be a good starting point. Otherwise, the savvier folks can look at investing in the stock market. My personal preference would be to look for stocks that are either undervalued or with high-growth potential.

Most importantly, feed your brain a healthy diet of media content that adds value to your life and personal development. Bookmark financial websites or bloggers whose content you follow and enjoy. The journey is a lot more fun when you realize there are plenty of like-minded folks out there in the world as well! 🙂

 

 

For Young Graduates

9. Farid Bahrudin, Guru to Young Graduates

(Young people don’t read enough? Well maybe they just read in different ways. Farid Bahrudin regularly shares advice for young graduates to >100,000 followers on Twitter. Follow him at his personal account here: @faridbahrudin)

2018 might be difficult for fresh graduates if they are not well prepared. Try to find a job (don’t be too choosy), and kindly save your earnings to have more chances to invest. Start early with a financial plan, and aim for 3 – 6 months of emergency savings.

 

10. Mohd. Kauthar Rozmal, Aspiring Financial Planner and Writer at The Sophisticated Investor

(Kauthar is a really knowledgeable 20-something-year-old who tweets about personal finance to almost 10K followers at @mohdkautharr. He also writes at tsi.my)

Here’s my advice to young graduates out there: I know it’s tempting to spend your first salary to buy things you want; but remember — always spend less than you earn.

Also, never use credit cards to buy on credit, but use them only for their benefits. And always use the cheapest mode of transportation.

Lastly, learn more to earn more. Your learning does not stop when you graduate.

 

11. Faiz Wahab, Investor, Speaker, and Writer at InvestorMY

(Faiz tweets about finance and investment in layman language at his 21K Twitter account @faizwahab. He’s also a public speaker and writes at FaizWahab.com)

Take every opportunity that comes, because we never know when the next opportunity will arise. For example, the government’s initiative for PTPTN borrowers — who’ll get an extra discount if they do direct salary deductions.

Next: never stop learning. For fresh graduates — don’t feel your certificate is sufficient. Find classes to develop your own self. For example, you can join a public speaking class to make yourself better at presentations. This will help you in your career development.

Finally, try to be out of your comfort zone. Orang muda kena challenge themselves to be better. Never feel “enough” with your current position, but try to be better from time to time. For example, if you’re able to save 10% of your income right now, try challenging yourself to save up to 20% of your income instead.

 

 

Bitcoin / Cryptocurrency

12. Suraya Zainudin, Founder of Ringgit Oh Ringgit

(Suraya’s Ringgit Oh Ringgit has become one of the best personal finance blogs in Malaysia. However you may not know that she’s also the Vice President of Access Blockchain Association Malaysia. Which means she knows her cryptocurrency well.)

I’m going to give advice that I personally want to take in 2018, because it’s relevant to my situation.

Financially, 2018 is still uncertain for many of us. Salaries and incomes are stagnant, so I’d like to re-balance my investment portfolio and channel some of the money in my high-risk investments to low-risk investments.

Personally, my crypto investments paid off big time in 2017. While that’s good, this gives me a lot of mental stress; and I just want to be in the position where if I lose my crypto (touch wood), I can still be financially okay. In a nutshell, I don’t want to put most of my eggs in the same basket. So look into your own basket — see if there’s a need for re-balancing risks.

I also want to urge everyone to have multiple passive income streams. Right now Google Adsense and various affiliates give me ~RM 1K more or less per month. I’d like to double that in 2018. Perhaps create a digital product? Trying out various passive income streams is fun, so I look forward to focusing more of my energy in this in 2018. Here’s all the passive income streams that I know off.

 

13. CJ Ong, Columnist for Simply CJ, The Edge Malaysia Weekly

(CJ is a high-flying banker who writes a financial column at The Edge Malaysia Weekly and a personal finance blog called Small Change. She gave me the below advice with regards to cryptocurrency.)

After a fantastic 2017, a lot of investors are sitting on lofty returns. It’s times like these that investors can’t wait to share their recipes for success. If you randomly threw a rock last year, there’s a high chance you would have hit something or someone that made money.

Be wary. Most investors suffer from recency bias, a behavioral phenomenon where we expect investments that have done well, to continue to do well. Left unchecked, this could be a portfolio killer as you are making investment decisions based on their historical performance.

There should be more to your investment strategy than that. Don’t slack off on due diligence when markets are good — especially when everything seems to have done well.

 

 

Credit Cards / Fixed Deposits

14. Mr. GenX, Founder of GenX GenY GenZ

(Guess who’s back… He disappeared (to Ahch-To?) for a while, but the Grand Jedi Master of Credit Cards has returned. When I was still a young padawan, he taught me almost everything I knew about credit cards. All hail the return of GenX GenY GenZ; the best place to learn about credit cards and fixed deposits in Malaysia.)

I’m not a financial consultant so please take my “advice” with a pinch of salt.

(Aaron’s Note: Many of the experts I’ve met say similar things. What does this teach us? Beware of people who claim to be experts; because the real experts don’t usually consider themselves experts.) 

Nobody knows the future. Look back at 1997 — when everything was going so “well” — then the economy crashed.

That being said, have a goal in mind. Think 5, 10, 15 years ahead and visualize the end result. Then, have a plan to get to that goal.

Finally, there’s no such thing as a “Best Credit Card.” It all depends on your spending patterns. Find one that’s right for you.

 

The Exciting Fintech Scene in Malaysia

15. Vincent Fong, Chief Editor of FintechNews Malaysia

(FintechNews covers insights on digital finance from all over the world. The Malaysian edition was launched just a few days ago by Vincent and his team. I reached out to him because I believe fintech will change the world, and I wanted to hear if he had any tips for Malaysians.)

Though cryptocurrencies are the talk of the town, savvy investors would be missing out if they don’t diversify their portfolios to other investment opportunities — made available by new innovations like Equity Crowdfunding and Peer to Peer Loans. A general piece of advice when dealing with these two categories is to always work with regulated entities to protect your investments.

Another interesting area to keep an eye out on is robo-advisers. The regulators have already announced the framework and the first licenses are scheduled to be issued sometime this year.

 

 

Contrarian Investing

16. Julian Ng, Founder of The Very Long Run

(Julian writes at The Very Long Run while working on a secret project which will soon be revealed. We first met during his “Ringgit and Sense” days at BFM. Over time, I’ve discovered we both have a love for contrarian ideas. So I asked if he had any contrarian thoughts for 2018.)

Unlearn most of what you’ve learned about trading and investing. Adopt the “I don’t know” strategy:

• What’s going to happen to Bitcoin?
• Will property go up or down this year?
• What stocks should I buy?
• Where will the Ringgit go?

The correct answer to all the above and similar questions is “I don’t know.” Your behavior and overconfidence is your worst enemy for your investments.

Instead, have the right split of bond and stock market index funds / ETFs to take care of your financial goals and stress levels. A robo or human adviser can help.

Focus instead on happiness, health and career in 2018.

 

Regional Perspective

17. Kevin L, Founder of Turtle Investor

(I didn’t wanna only have Malaysian perspectives in this article. So I reached out to a few of my Singaporean friends too; perhaps they know something that we don’t? Here’s Kevin L, who writes about index investing and personal finance at Turtle Investor.)

Remember last year when I mentioned to expect the unexpected, and learn to roll with the punches — for every single year? The crash that many predicted didn’t come, but the cryptocurrencies boom ​took the world by storm.

So lets never be afraid to learn new things and venture outside of our comfort zones. Nobody will know what’s gonna be the next “biggest thing” this year!

 

 

Summary

With so many different ideas, I hope you’ve had some things to think about. In case you’re feeling overwhelmed though, here’s a summary of some common points, in my own words;

1. Invest in YOU. Take good care of your health. Keep learning and improving yourself.
2. Whereas experts used to traditionally recommend saving 10% of your salary, more and more are suggesting 20 – 30% today. Perhaps that’s a reflection of the riskier economic world we live in today.
3. The world will continue to change rapidly. There’s no magic investment — whether it’s Bitcoin, stock market or property — that will solve all your problems. Instead, be prepared to adapt.

 

– – –

 

Lastly, I can’t help thinking that if I wrote this article five years ago, it might have been very different. Perhaps we’d just be talking about property hot spots to invest in, or specific target sectors in the stock market.

Instead, I can’t help feeling that we’ve all grown up. We’re talking about deeper things now. It’s nice to see experts saying that investing in yourself is the most important thing. Perhaps, a healthy, fulfilled life is something even all the money in the world can’t buy.

Here’s a big Thank You to all the experts who shared their thoughts. If you’d like to show your appreciation, please take a moment to visit their websites, follow them on FB / Twitter, and send them some Internet love?

Happy New Year 2018. I wish you great financial success, and an even richer life beyond that.

 

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