Smart Investor Malaysia

A Real Life Investment Question Answered 


Dear Mr Neoh, I was hoping that you can give me some advice on my situation, below is a bit about me:

I am Malaysian, now 62 years old. I am currently single, and I am still working for a living. My take home income is about RM3,000. I do have two children who are now already working and in their late 20s/early 30s. I am feeling a bit insecure because currently, I only have about RM40K in savings with me, and this represents the only money (savings) that I have. What should I invest in order to get extra when I am no longer able to work for a living? Recently, I was approached by a Unit Trust person from a reputable unit trust company who invited me to take up a scheme with her in order to grow my wealth. Since I have never had any investment experiences in life, I honestly think that I lack knowledge about investments. I don’t feel confident about this investment. In fact, I feel a little confused. Can you please give me some advice? 

Mr Ng


Hi Mr Ng,

Thank you for your email, I hope after reading this response, you will feel less confused but empowered to make a decision regarding the above.

I understand that you are still working, and I am assuming that the take home pay of RM3,000 mentioned here is a net income, consistent month-to-month.

While I agree that you should actively look for options to invest your money, it is very important for you to ensure that you make a good, quality decision.

This is because, if you invested into something that is too risky for you, or into something that is not what it seems to be, your chances of losing your money will be higher. This will be very dangerous for you, considering that you are now in your sixties.

Based on the illustration above, let us assume that you invest all RM40,000 but you suffer a loss of 50% in the first year. You will end up with just RM20,000. If this misfortune happens, you will then need a long time to get back to the original amount of RM40,000, assuming you are able to rebalance the remaining RM20,000 to an investment or portfolio that can grow at 10% pa.

The above projection shows that if invest RM20,000 into something that can generate 10% a year for the next few years, you will need seven years and four months before you can get back to the original amount of RM40,000; and by that time, you will be 69 or 70 years old.

Of course, if you can only feel comfortable investing into a “safer” investment generating 5% a year, you will need 14 years to get back to the original amount of RM 40,000 as can be seen in Illustration 3. By then, you would be 76 years.  

The above example is why it is very important for us to ensure we don’t lose our money by investing into things that we do not understand, or are too risky to match our risk profile.

At the age of 62, and with RM40,000 being your total savings at this point, you may want to be conservative with your money. Having said this, it does not mean that you should just keep all the money in a savings account or all of it in Fixed Deposit. Because this is also dangerous since our purchasing power will decrease every year due to inflation (where you need to pay more to buy the same or even lesser amount of the item you need).

Therefore, you should consider investing not more than 20% of your money into equity (stocks or shares). But investing in shares requires knowledge, time, effort, and you will also need a bigger capital to have a reasonable holding of stocks that are properly diversified.

I suggest you invest into stocks or shares through a Unit Trust fund. You can invest into a Unit Trust fund that invests in “Blue Chip” stocks as it is more stable and less volatile compared to other stock funds.  An alternative to a blue-chip stock fund, will be a Balanced or Moderate fund.  This type of fund typically invests 50% of the money into stock and 50% into fixed income instrument, so it will be quite safe, since we limit your exposure to not more than 20% of your wealth.

I do not know the kind of fund or scheme the unit trust agent recommended that you invest into, therefore, I cannot comment on the suitability of the fund for you.  

It is however very important for us to note that no matter what you will eventually invest in, the investment has to be one that suits your current needs, your capacity for risk-taking, and if things go south, will not put you into a position that will likely lose most if not all of your savings.

About the author

kevin neohKevin Neoh is a NextGen Money Coach who works with people to help them transform their relationship with money to improve their lives with the money they have. Kevin can be contacted at and

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