Smart Investor Malaysia

Retirement Planning with the Right Tools in Hand


When it comes to retirement planning, investment is one of the tools that can help us to achieve our goals. The famous quote by Benjamin Franklin rings true;

If you fail to plan, you are planning to fail!

Recently Smart Investor spoke to Isnaliyah Sarwadi, director, business development of PMB Analytics Sdn Bhd (PMBA) which is a subsidiary of Pelaburan Mara Berhad, to get her views on the topic at hand.

According to her, there are many investment vehicles to support our retirement planning, but the two  vehicles that she believes could warrant the achievement of the goal are through unit trust and property investment.

Unit Trust and Property


Unit trust investment is one of the most common investment vehicles in Malaysia. It is easily accessible by everyone and it also has a very low entry barrier. You can start investing in unit trust from as low as RM100, which makes it affordable for everyone. It can also be used as a tool to invest regularly each month.

One must emphasize asset allocation and diversification strategies to benefit the most from unit trust investment. With just a small amount of money, you can already be exposed to global markets such as the United States, ASEAN, China and the rest of the world. Just ensure that it matches your investment objectives, investment horizon and risk tolerance level.

Secondly, there is property investment. With the right selection of property especially the right location, it can save you time and money to access to your work place. On top of that, price of a good property will always grow over a long period of time. When it appreciates in value, instead of selling it to buy bigger property (an upgrade of lifestyle), one may lower or maintain the lifestyle by buying two properties to accommodate two purposes (accommodation and investment).

Hopefully, when you combine these two investment vehicles, you will enjoy strong financial standing when you retire. These investments can also be liquidated and used for other purposes such as for your children’s education or to start off a new business.

Another tip by her is the new age comes with the latest technology. You must equip yourself with new skills as well. If you start saving early, over time, you will have money to start great things in life as the savings will enable you to start small businesses (become an entrepreneur). Immediately, the money will provide you with working capital or a deposit to buy machinery or vehicles for transportation to start the business. In addition, it will provide you money for upskilling since you will need to attend courses of your preference, for example, culinary, bakery, saloon, sewing, massage technique, writing technique, etc.

Why Aren’t We Able to Retire Well?

The reason that some of us are not able to retire well is caused by the low awareness of personal financial planning. We tend to spend more than what we earn, which then causes us to borrow in order to carry on with our lives.

The credit card debt trap which can be a very vicious cycle. Once you are trapped as you are only able to pay the minimum amount each month, it will be very difficult to get out of it. It can snowball to a huge amount over a period of time.

It all boils down into a mismatch of lifestyle against income. Ever heard of the quote, “We buy things we don’t need with money we don’t have to impress people we don’t like.”

We also tend to fall prey to “ponzi” schemes and scammers out there. We are easily blinded by the promise of getting rich instantly and receiving extraordinary monthly returns.

Tackling the Rising Inflation and Interest Rates


Finally, we have to deal with the issue of rising inflation and interest rates. Here are some tips that Isnaliyah is kind enough to share with us. To help us weather the storm, we should do the following:

  • Prudent management of cash flows and personal budgeting requires you to choose wisely between needs and wants
  • Structure your retirement portfolio well. The investment horizon is for the long term and should the market tumble, don’t panic and don’t abruptly restructure your existing portfolio.
  • Invest in upskilling so that you can look for additional income streams if the need arises.

Retirement planning is something that we should not take for granted. As the years pass so quickly, especially these days, we will be staring at the day we retire very soon.

If we do not take action, we may have to work until our golden age. So do not delay; start to plan for your retirement now.

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