Step 5: The Wealth Engine (Investing)
Now that your debts are dominoed and your fortress is built, it’s time to get rich. We do this by buying assets that grow while we sleep.
WARNING: Only consider this step if you have saved for an emergency fund (Mojo) and paid off all high-interest debt. If your Mojo balance is beyond the necessary amount (e.g., >6 months expenses), you can move the excess fund into investments.
The “Sleep Well” Investment Strategy
We don’t day trade. We don’t buy “tips” from uncles at the coffeeshop. We buy the market.
1. The EPF Super-Charger Your KWSP (EPF) is not boring. It is one of the best-managed retirement funds in the world.
- The Hack: Voluntary Contribution. You can top up your EPF account anytime via online banking (limit RM100,000 per year).
- Why? It guarantees a minimum 2.5% dividend by law, but historically pays 5.5% – 6.0%. It has zero sales charge. Crucially, all future returns from EPF are tax-exempt.
- For Gig Workers/Freelancers: You must sign up for i-Saraan. Under Budget 2025, the government increased the incentive to 20% (capped at RM500/year). That is free money just for saving your own money.
2. ASB (For Bumiputera)
- Amanah Saham Bumiputera (ASB) is the holy grail of low-risk investing. The price never changes (RM1.00), but it pays dividends annually (typically 5%+).
- The Strategy: If you can, take an ASB Financing loan only if the dividend rate is higher than the loan interest rate.
- The Logic: This is called “Other People’s Money” (OPM) leverage. If the bank lends to you at 4.6% and ASB pays you 5.75%, you pocket the difference (1.15%) on money you didn’t even have.
3. Robo-Advisors (For Everyone) To get rich, you need to own global companies like Apple, Google, and Nvidia. You cannot easily buy these on Bursa Malaysia.
- The Tool: Use licensed Robo-advisors like StashAway, Wahed Invest (Islamic), or Raiz.
- The Method: Set up a “Recurring Buy” (Auto-debit) of RM200 or RM500 every month. They will automatically invest your money into a diversified portfolio of ETFs (Exchange Traded Funds) across the US, China, and Europe.
- Why? It removes human emotion. When the market crashes, you buy more units cheaply. When it soars, your value goes up.
4. The Stock Market (Advanced) This is a complicated topic. You have many options such as the US S&P 500 or the local Bursa market. Returns are usually better than EPF/ASB over the long run, but the risk is higher.
- The Rule: A lot to learn. Only consider this option after you have maxed out the first 3 methods.
- How to start: If you are ready, use low-fee brokers available in Malaysia like Rakuten Trade or Moomoo. Buy broad indexes (like an S&P 500 ETF), not random penny stocks.
Your Homework:
- Log in to your EPF i-Akaun and check your balance.
- Set up a monthly auto-debit of RM100 to a Robo-advisor.
Congratulations! You are now at the end of the core steps