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Monday, September 26, 2016

FAQ - How to Start Investing in Unit Trust Fund?

In my previous post regarding "Start Invest As Low As RM100!", many have come to me and ask how do they actually kick start. So I figured that perhaps I should write "How to Start Investing in Unit Trust Fund". If you are reading this now, that's great because you have the urge to kick start now, so don't let it stop and follow the 4 easy steps below! 

Prospect(s): "How to Start Investing in Unit Trust Fund?"

By now, you should be convinced on why you should start investing now, otherwise, here's a quick recap:
4 Reasons to Invest NOW:

Step 1: Choose your channel
There are a few channels that you could go through to invest in unit trust fund:
1. Institutional Unit Trust Advisor (IUTA) - Usually those in banks
2. Unit Trust Consultant (UTC) - Agent that attach to only one Principal
3. Corporate Unit Trust Advisor (CUTA) - Independent Financial Advisor
4. Online - FundSuperMart

Each has different sales charge and level of service. Check out this post, you will be able to tell the difference of UTC and CUTA. So choose the one that best suits your needs. For more info on the clarification of IUTA, CUTA, UTC and so on, check out Securities Commission Website.

Since #YourFinanceDoctor is an Independent Financial Advisor under CUTA, hence the following steps are only applicable if you have decided to choose #YourFinanceDoctor.

Step 2: Read thru FIMM Pre-Investment Form
Like I always said, knowing what you invest is utterly important! So read through as you will need to sign this form before investing in unit trust fund (that's why it's called Pre-Investment Form). No worry, #YourFinanceDoctor will explain to you again as well during the appointment.

Step 3: Fill up the form

Step 4: Voila! That's all!
Congratulations for taking the first step to your better future!

That's all for now, Happy Investing!
Coming up next, "Why your Agent does not find you anymore?" Stay tuned for the next post!
If you have any question to ask #YourFinanceDoctor, feel free to email here.

Tuesday, September 13, 2016

FAQ - Any Fund Performs Better Than 6.4%(EPF)?

Following the well response from the previous FAQ post on how #YourFinanceDoctor charges in Unit Trust Investment (read here if you haven't), I have decided to write on this first before the "Why Your Agent Does Not Find You Anymore?". So as usual, here's the question:

Prospect Teoh: "Any fund outperforms 6.4% (EPF)?"

YES OF COURSE! But first let me go through some introduction to Unit Trust. Unit trust fund may not be well known enough in Malaysia as compared to other countries due to the lack of financial literacy among Malaysians. As of 31 July 2016, statistic from Securities Commission Malaysia has shown that there are a total of 636 approved funds from 35 management companies which amounted to RM352 billion of total net asset value (21% of Bursa Malaysia Market Capitalization). 

Captured from Securities Commission Malaysia website

So the question is, are you aware that there are a total of 636 funds from 35 different management companies for you to choose from? Probably not! Most of the people #YourFinanceDoctor came across only know a few of them which are well known (company with strong marketing) such as Public Mutual and probably a few others like CIMB or RHB. Hence it is normal to jump into conclusion that unit trust doesn't perform well when you are not expose to all the available funds. 

Instead of telling you what are the Top Funds with Highest Return, here's how you can learn to fish for yourself! ;)

Step 1: Go to and Click "Fund Selector"
FYI, Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. Take note that it is important to go for independent website to get unbiased/neutral data
(Ads: Just like you should hire Independent Financial Advisor like #YourFinanceDoctor !) 

Step 2: Click "Search" to see all the available funds in Malaysia
When you are familiar with the website, you can then play around with the filters like sort the funds by categories such as fund type, base currency, local representative, investment provider and so on!

Step 3: Click on "Performance" tab and Click "10 Years Annualized(MYR,%)" to sort
Don't be overwhelmed by the long list of funds! Good thing about this website is that you can get all sort of information of the funds. So sorting by 10 Years Annualized Return will give you a list from highest to lowest. As you may see, Kenanga Growth Fund, Eastspring Investments Small-cap and Affin Hwang Select Asia (ex Jpn) Quantum are the top 3 funds. Their return? Easily more than 6.4%!

Step 4: 10 Years too long? Click 5 Years Annualized then!

Step 5: 5 Years is still too long? Click 1 Year Return then!
Upon this step, you may realized that why in short term the return could be as high as 69%?! Well the truth is anyone in the market can tell you how good they are to earn 2 or even 3 figure return in percentage. But how many of them can continuously and consistently doing that? RARE! So same goes to unit trust fund, you may required to do research on each funds. 
(Ads: That's why you pay #YourFinanceDoctor to do all the hard work!) 

But back to answer to the question, YES OF COURSE there are plenty of funds outperform 6.4%! A quick sort on 1 Year Return from Largest to Smallest, you will see that the outperforming funds stop at Affin Hwang Select AUD Income with a 1 year return of 6.43%! Take note that it is on page 9, so with 30 funds per page, that will be [(9 x 30) - 13] = 257 funds outperform 6.4%! Which means, out of 670 funds, 257 funds or equivalent to 38% of chances that you will earn more than 6.4%

And if we want to see which funds consistently outperform 6.4%, then let's sort by 10 Years Annualized Return Largest to Smallest. Again as you can see, it stops at Public Asia Ittikal with 6.43% 10 Years Annualized Return on page 5. So that will be [(5 x 30) - 14] = 136 funds outperform 6.4%! However, out of 670 funds, there are only 277 funds that are existed for more than 10 years. So that means out of 277 funds, 136 funds or 49% of chances that you will earn more than 6.4%

P/S: Do take note that funds that are approved for EPF Withdrawal for Investment will be much lesser (Please refer here for more info)

Take example of the top fund in the list of 10 Years Annualized Return, Kenanga Growth Fund. If you have invested a once-off lump sum of RM10,000 in 15th September 2006 (10 years ago), with 10 years Annualized Return of 17%, you will now have RM48,533.92! (Yes without doing anything!) 

RM10,000 -> RM48,533 (10 years in KGF)
RM10,000 -> RM14,802 (10 years in Bank FD)

Chart taken from Morningstar!

So you see, this is why, again and again, #YourFinanceDoctor would urge all of you to start investing! One question that you should always ask yourself... 

Yes you may be hardworking,
But is your money hardworking than you?
Slide taken from one of #YourFinanceDoctor talk
Do take note that all the above does not indicate any recommendation to buy. You are advised to do your research before investing into any particular funds. Otherwise, you should get a Independent Financial Advisor like #YourFinanceDoctor (Contact me here!)

Counting Money photo giphy.gif

That's all for now, Happy Investing! 
Coming up next, "Why your Agent does not find you anymore?" Stay tuned for the next post!
If you have any question to ask #YourFinanceDoctor, feel free to email here.

Wednesday, August 31, 2016

FAQ - How Do You Charge in Unit Trust Investment?

Sorry for the long hiatus as #YourFinanceDoctor was lack of time and effort in blogging, but here I am, trying another new approach of writing, by answering some of the frequently asked questions. So long story short, here's the first one:

Prospect J: "How do you charge in Unit Trust Investment?"

Unlike typical agent that you frequently came across on the street, you will be investing with #YourFinanceDoctor thru a Wrap Account. This may sounds new to you as it is not common in Malaysia yet. But let's take a look at the definition given by Investopedia

So instead of charging just a once-for-all upfront sales charge like what typical agent does, #YourFinanceDoctor would charge a much lower sales charge plus annual wrap fee. To make things simple, here's an illustration of how it works. 

Imagine if you have RM100,000 to invest and here are two options for you to choose!

Surprise surprise! The return is a lot higher even when you are investing with the same amount of money in the exact same funds at the same time and same price. Most importantly, I think the biggest advantage of #YourFinanceDoctor is to have the same objective as the client, which is to earn more for client so that we earn more thru the annual wrap fee too!

That's all for now! Happy Investing!

Coming up next, "Why your Agent does not find you anymore?" Stay tuned for the next post!
If you have any question to ask #YourFinanceDoctor, feel free to email here.

Tuesday, June 14, 2016

Financial Precautions You Should Take In An Uncertain Economy

During uncertain economic times, you can soothe your fear by taking some financial precautions to protect yourself and your money. Fear is about uncertainty. It's about not being able to predict what will happen next. This unpredictability breeds anxiety. And in the midst of uncertainty, fearless people react very differently than fearful ones do. 

So here are the financial precautions that fearless people take.

100% Principal Protection
Losing your hard earned money is horrible. The last thing you want would be having to worry that your hard earned money are all gone over the night. So during market uncertain, keeping the principal safe with no downside risk is the number one priority. 

Diversification to Worldwide
Never put all your eggs in one basket. It is common sense that you do not want to put all your money into only one investment vehicle and solely relying on it to make more money for you. That's like walking on a thin rope! Hence, diversified to all the world's major stock market indices would be the best bet during uncertain economy.   

Potential for Growth
Being safe is the bottom line, but the upside gain would be desired as well. The return of the investment should have 100% participation in the growth performance. Advanced investors usually will seek out for those company shares with what they deem good growth potential. Otherwise, you may just pick on a broader investment such as MSCI Emerging Market, S&P 500 and so on, that you think they may grow tremendously in the future.

Expose to Foreign Currency 
It has been a bumpy ride for Malaysian Ringgit, especially in the past one year. MYR per 1 USD went from 3.708 in June 2015 to as high as 4.458 in Sept 2015, and now back to 4.089 as of June 2016. So it would be wise if you are able to take advantage on investment that expose to foreign currency.

Online Accessibility
Online accessibility makes life so much faster and easier! You would want to have the control in your hand and all the information of your investment available to you at your fingertips. Be it your personal information, investment transactions and also performance, they should be all available on the internet! 

Plan ahead in case of unfortunate events. You would want to be able to nominate the beneficiaries that will receive the proceeds of your investment with hassle free, especially if one is without will or trust written. Just like your EPF or insurance policy, nomination is needed to ease the whole process of knowing who to transfer the proceeds of the investment to.

All in all, if you don't apply what you learn then learning loses most of its value. So now all you have to do is to reflect upon and take action now! Comment below if you have any ideas to contribute as well! Happy investing! 

Tuesday, May 17, 2016

Look Up From Your Phone, Live Life The Real Way!

I came across this video, Look Up by Gary Turk, and I knew I had to share it out! It is just pure inspiring! Even though the video was published in 2014 but I believe the society we lived in today is still the same or even worse! So here's the beautiful script of the video.

Look Up by Gary Turk

I have 422 friends yet I am lonely.
I speak to all of them everyday yet none of them really know me.

The problem I have sits in the space in-between
looking into their eyes or at a name on a screen.
I took a step back and opened my eyes
I looked around and realized
This media we call social is anything but
when we open our computers and it’s our doors we shut.

All this technology we have it’s just an illusion
Community, companionship, a sense of inclusion
Yet when you step away from this device of delusion
You awaken to see a world of confusion
A world where we’re slaves to the technology we mastered
Where information gets sold by some rich, greedy bastard
A world of self-interest, self-image, self-promotion
Where we all share our best bits but leave out the emotion

We’re at our most happy with an experience we share
But is it the same if no one is there?
Be there for your friends and they’ll be there too
But no one will be if a group message will do

We edit and exaggerate, crave adulation
We pretend not to notice the social isolation
We put our words into order till our lives are glistening
We don’t even know if anyone is listening

Being alone isn’t the problem let me just emphasize
If you read a book, paint a picture, or do some exercise
You’re being productive and present, not reserved and reclused
You’re being awake and attentive and putting your time to good use
So when you’re in public and you start to feel alone
Put your hands behind your head, step away from the phone
You don’t need to stare at your menu or at your contact list
Just talk to one another, learn to co-exist

I can’t stand to hear the silence of a busy commuter train
When no one wants to talk for the fear of looking insane
We’re becoming unsocial, it no longer satisfies
To engage with one another and look into someone’s eyes.

We’re surrounded by children who since they were born
Have watched us living like robots and think it’s the norm
It’s not very likely you’ll make world’s greatest Dad
If you can’t entertain a child without using an iPad

When I was a child I’d never be home
I’d be out with my friends, on our bikes we’d roam
I’d wear holes in my trainers and graze up my knees
Or build our own clubhouse high up in the trees

Now the park is so quiet it gives me a chill
See no children outside and the swings hanging still
There’s no skipping, no hopscotch, no church and no steeple
We’re a generation of idiots, smart phones and dumb people

So look up from your phone, shut down the display
Take in your surroundings, make the most of today
Just one real connection is all it can take
To show you the difference that being there can make

Be there in the moment as she gives you the look
That you remember forever as when love overtook
The time she first held your hand or first kissed your lips
The time you first disagreed but still loved her to bits
The time you don’t have to tell hundreds of what you’ve just done
Because you want to share this moment with just this one.

The time you sell your computer so you can buy a ring
For the girl of your dreams who is now the real thing
The time you want to start a family and the moment when
You first hold your little girl and get to fall in love again

The time she keeps you up at nights and all you want is rest
And the time you wipe away the tears as your baby flees the nest
The time your baby girl returns with a boy for you to hold
And the time he calls you grand dad and makes you feel real old

The time you take in all you’ve made when you’re giving life attention
And how you’re real glad you didn’t waste it by looking down at some invention
The time you hold your wife’s hand, sit down beside her bed.
You tell her that you love her, lay a kiss upon her head.
She then whispers to you quietly as her heart gives a final beat
That she’s lucky she got stopped by that lost boy in the street

But none of these times ever happened. 
You never had any of this.
When you’re too busy looking down, 
you don’t see the chances you miss!

So look up from your phones, shut down those displays
We have a finite existence, a set number of days
Don’t waste your life getting caught in the net
because when the end comes, nothing’s worse than regret
I am guilty too of being part of this machine
this digital world we are heard but not seen
where we type as we talk and read as we chat
where we spend hours together without making eye-contact

So don’t give in to a life where you follow the hype
Give people your love, don’t give them your “like”
Disconnect from the need to be heard and defined
Go out into the world, leave distractions behind

Look up from your phone, shut down the display
Stop watching this video, live life the real way.

Live life the real way!

Monday, May 16, 2016

Get FREE RM500 From Government Thru PRS Youth Incentive!

Private Retirement Scheme (PRS) Youth Incentive is a youth incentive of RM500 to contributors who participate in the PRS scheme. The RM500 is a one-off contribution by the Government to young PRS members to encourage youth to start investing in their retirement through the PRS. 

Government has budgeted a total of RM210million in Budget 2014, which, will contribute RM500 per qualified person to be used to purchase units of PRS funds in the PRS account of youths, whom have accumulated a minimum gross contribution amount of RM1,000 within a year. This incentive will be made available for a period of 5 years from 2014 to 2018. But up to date there are only ~8% that has been payout from the RM210million! 

Malaysian Youth are not aware or it is not attractive?

So if you are aged 20 and above but yet to reach the age of 31, read on! 

Are you qualified?
- Must be Malaysian
- Must be aged 20 and above but have not yet reached the age of 31
- Gross contributions within the calendar year reaches RM1,000

How to start?
- Lump sum of RM1,000 into any PRS fund
- Regular monthly contribution (Invest in PRS as low as RM100)
- Parent contributing to Youth

How to apply for incentive?
You do not have to apply for the incentive. PPA will monitor the eligible accounts and compile a listing of those qualified and notify the Government of the individuals eligible for the incentive. A report is compiled by PPA bi-annually, in order for the pay-out to be made to the qualified individuals automatically.

When will I received the incentive?
The once-off RM500 will be automatically credited into the sub-account A of your qualified PRS Fund once you have met the necessary requirements. PPA will notify you once the Incentive pay-out has been made into your qualified PRS Fund in the form of units.

Can I withdraw the incentive?
As the full RM500 will be utilized to purchase units which will then be created in sub-account A, this incentive is therefore not available for pre-retirement withdrawal.

Is the RM500 incentive eligible for tax relief?
The one-off incentive of RM500 from the Government to qualified contributors is not eligible for the annual RM3,000 tax relief claim as the contribution was not made by the PRS Member in his individual capacity.

I am interested, what should I do now?
Comment below and #YourFinanceDoctor will contact you right away! 

Earn, Save, Invest, Repeat!
Happy Investing!

Friday, May 6, 2016

3 Reasons to Maximize Your EPF Savings

One of the questions that people always asked #YourFinanceDoctor if they should opt to take out their EPF to invest in Unit Trust Fund. (In case you have no idea about this, read here) My answer will always be YES. Here are 3 reasons why you should totally do that!

1. EPF wants you to do so! 
If you visit to EPF website (click here), there's a list of different types of withdrawals. "Members' Savings Investment Withdrawal" is one of it whereby the purpose is to allows members to transfer a portion of their savings from Account 1 for investments in order to maximize retirement savings

2. EPF is not stupid too!
As always, EPF put your best interests in heart! In order to safeguard the members' retirement savings, EPF only allows members to invest not more than 20% from the savings in excess of the Basic Savings amount in Account 1 through the appointed Fund Management Institutions approved by the Ministry of Finance. So that is just a small portion of your EPF savings! FYI, there are a total of 234 trust funds qualified and approved by EPF effective 31st April 2016. (EPF will carry out fund evaluation, funds will be suspended from time to time if fail to meet the strict specified selection criteria)

3. You deserve BETTER! 
Take 2 of the EPF approved funds as comparison. A starting withdrawal of RM100,000 for investment with no additional contribution, after 8 years, the return could almost double the figure of those do absolutely nothing about it! Check out the chart below! 

EPF - 100,000 => 158,761
KGF - 100,000 => 302,104
EISC - 100,000 => 304,373!

Don't get me wrong, EPF is one of the most efficient fund manager. Given such a huge amount of members' savings that EPF gotta handles, it is not easy at all! But there must be a reason why EPF allows us to withdraw for investment right? Well, simply because EPF believes we could do better if given a small portion! So bottom line, always invest in funds that generate higher return than EPF (2015 = 6.4%), otherwise what's the point of withdrawal right? Trust me, #YourFinanceDoctor have seen those that putting in those lower return ones! But do take into consideration on your time horizon as well! So now the question is... can you do better? 

Retire Earlier, Wealthier, and Happier
It's never too late to start maximize your EPF savings and you can get a head start by contacting #YourFinanceDoctor for the latest EPF approved fund tips, retirement planning advice, and the tools you need to make the most of your retirement savings! (click here now)

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