Investment Tips for Gen Ys and Zs


With Gen Ys topping bankruptcy statistics in Malaysia, and Gen Zs just entering the workforce, it is imperative for them to understand the basics of investing.

By Yong Chu Eu

When it comes to investment tips, people often look out for shortcuts or tricks to make a quick buck. This is fine provided they know and understand the basics of investment, which from my observation is lacking in most Gen Ys and Zs.

Gen Ys are the hybrid of Gen X and Gen Z. They are more realistic & conservative compared to Gen Z, but more open-minded than Gen X and practice a certain level of self-rewarding. It is a dual-income and educated generation. However, they are highly in-debt and often the major contributor to Malaysia’s bankruptcy statistic.

Gen Zs, on the other hand, have just started to enter the workforce and earn their own income. They are tech-savvy and prefer to enjoy life now. Most of them are either not saving or investing at all, or not owning any asset or debt.

Managing money

So, let’s look at some investment tips that could assist both these generations in managing their money.

Most crucial is to have an emergency fund of at least 6 months in total salary or total expenses. This is to cater to any major emergency expenses like car breakdown, house repairs or loss of jobs, which can drag the cash flow into a negative level or worse, put you in debt.

Put the emergency fund in liquid investment tools like fixed deposits, money market funds or bonds so that you can withdraw them in a shorter time frame.

Since Gen Ys are known to be highly in debt, they should consider restructuring their monthly debt-servicing and ensure it stays below 40% of their monthly salary.

Increasing earnings by taking up a second part-time job can help to bring down the debt servicing ration too. Gen Y should constantly challenge their status quo by leaving their comfort zone to try and explore something new.

The non-saving or investing Gen Z should change their money management skills by delaying gratification. Delaying certain enjoyments now to invest for the benefit of future is a wise move.

It’s okay to spend; after all that’s why we earn in the first place, right? However, spend only after deducting for your savings and paying off your debts. Also, budget smartly in order to get more free cash flow to invest.

Of course, owning a credit card is important too in order to fix limited cash in hand, or medical expenses in non-panel hospitals.

Buying an insurance policy comes next, which is a pretty common occurrence today; yet most of us to place it as a priority. The question is whether you wish to absorb your risks on your own, or transfer them to an insurance company. Of course, the wisest thing will be to do the latter.

See, as individuals, we pretty much have the same risks – death, disability, illness, injury due to accident, liability of wrongdoing and loss of assets. These risks are insurable and it will provide financial aid to you when needed; so why take unnecessary risks on your own?

Imagine this! Without the availability of emergency funding and insurance, you would have to dig into your investment funds when major expenses happen. And this can be a nightmare!

Next ask yourself these questions when you’re thinking about investment:

  1. What is my risk profile? Am I comfortable taking more risks and investing in high-risk-high-return portfolios, or should I stick to low-risk-low returns funds?
  2. What is the purpose of this investment? Is it to buy a property or attain financial freedom?
  3. What is my investment time horizon? Am I investing for short or long term?

The answers to the questions above will narrow down the type of investment which is more relevant to you.

Where to invest?

Choosing a suitable investment tool that matches your strength, position and limitation is also important. This will guide us to choose either to “DIY” the investment ourselves or engage a licensed professional.

For instance, if we have the passion, knowledge and time, we can choose to invest in unit trusts, stocks or retail bonds by studying or conduction a research on our own. Otherwise, engaging a professional to select, manage and monitor your funds is a wise move.

So, you have decided to invest. But wait! You need to find out if the investment is legal and not a SCAM!

One way of finding out is to visit the website of Bank Negara Malaysia, where a list of suspicious investment company/scheme is published quarterly. Also if the return is too good to be true, then it most probably is a scam.

Do take the initiative to check or better, seek professional opinion on some of the investment portfolios that you doubt. Do not blindly jump into the ship because of promotional or marketing gimmicks that forces you to make a decision now!

Both Gen Ys and Zs are exposed to too many investment opportunities and “traps”; so they should focus only on 2-3 investment portfolios that they’re confident about.

Once you’re sure of the investment that is suitable for you, stay committed to it. Being disciplined is always the hardest but this is really the key to investment success.

Lastly, your investment should be in the form of “asset allocation” or “portfolio” and along the efficient frontier curve. Monitor, restructure and rebalance the portfolio from time to time to make sure it is up to date and relevant with the current market situation, trend and investor appetite.

Though what I have shared above may seem pretty basic, but from my observation as a financial planner, these are the main reasons why most people get into financial trouble; because they forget the basics!

Losing our hard-earned money is something very serious as it is not easy to accumulate enough capital again after losing it all. Also, we do not have the luxury to restart because time is against us.  So, we need to get it right the first time.

Yong Chu Eu is a Licensed Financial Advisor/Educator of Fin Freedom Sdn Bhd (CFP, FAR, CMSRL & HRDF Certified). He can be contacted at


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