KCLau's Money Tips Forum

[khong]

hi kc lau,

this is khong whose originally from melaka but now reside in jb bcos working in sgp for the past 10 yrs.

[Guest]

let me simplify my financial status as below :-

1. debt-free fr housing, cc, car loan or any other loan.
2. i'm 33yrs old w/ a baby boy whose going-to-be a single father soon.
3. i'm having a cash flow of rm200k inside saving acc.

may i know the following :-

1. which is the best way to gain the higher return but in a safer criteris ?? (mid-risk, mid-return).
2. i'm thinking any other investment which can gv me mthly interest once i dump all the $$ in ??

[Guest]

btw, looking at current annual fd of 3.7% out of rm200k & i'm getting typically abt rm600-650/mth.

if there's anything which can make my interest at least rm1.2k above per mth, i'm sure go for it.

kindly pls advise....... as i'll consider any type of plan as long as i'll enjoy the interest once per year. ( not untill 77 or 88 yrs old.... which mean maybe i'm no longer enjoy the hardwork since my younger time).

[KCLau]

Hi Khong,

You've got a pretty good start to have accumulate 200k in cash.
As you said, the money in saving account and FD is giving a low return and barely keeps up with the inflation rate.
If order to get RM1200/month, you have get higher exposure into other asset class.

There are a few ways to accomplish your objective:
1. Real estate investment - you can buy a property in cash with the 200k. The point is to find a great property deal that comes with a tenant that will give you a net rental income of RM1200/month. It is not easy to find such property. Therefore, you need to work hard to find the deal. Probably after >20 properties, you will strike a great deal. A medium cost apartment fully furnish may be able to provide RM1200/month rental income.
But when you money is parked in property, it is illiquid.

2. Invest a portion in unit trust. Normally a balanced portfolio will give return of 10% per annum. That is RM1667/month. Since you are aiming for about 7.5% return per year, you can have a lower risk portfolio. Let's say

20% in FD
30% in bond funds/fixed income fund
30% in dividend funds
20% in equity funds or direct investment in stock market

Good luck to you.

[MIKE]

There is another investment vehicle called exchange traded fund/index fund. This fund basically tries to match the market index, it can be traded in the stock market. The manaement/upfront charges are definitely much lower. Study have shown that 70% of the time, UT does not actually beat the market so why not consider getting one which tries to match the market index.

[Relax]

Wow! RM 200k is 20% of 1 million. That's not far away I suppose.

I think if you are willing to take extra risk, maybe it is a good idea to have an investment portfolio with equity UT fund and property as main ingredian.