Good for you dreamer....for putting the housing and home loan right. Our car loans are like hire purchase, its higher interest than equivalent home loan.


Stock market: Very very volatile. Have to have guts and control. You can lose lots and lots of money very fast. And you need to be very knowledgeable, have time and interest in stocks. Downfall will be if you get too greedy and take unnessary risks. put in what you are prepared to lose. Also, you need lotsa cash.

Unit trust: Volatile, but less so than stock market. Good thing is you don't have to micromanage, but the fund managers get paid......whether you make money or not. This is why there are so many in the market. 2004 was ok, but 2005 was generally down. Need cash.

Money market: Available now with easing of monetary policies. Must have interest in global economics and keep very up to date with worldwide happenings daily. Probably as volatile as Unit Trusts. Also need cash.

Futures: Forget this if you don't have "real" money. This is generally a rich people play. Volatile

Goods (etc antiquities, watches, paintings): If you have cash and good eye, this is potentially very rewarding. Tip is to buy low and find bargains. Can sometimes be a sure profit, as long as you have a good eye for it. Have to have cash.

Property: I recommend this one strongly. Can rent out, can stay, can wait and sell. Many rich people earn their "real" money with this. Tip is LOCATION. You can't go wrong if you remember this. Also, try look for bargains lah. Quite stable. No need to save enough to buy one.....just enough to pay downpayment and rest, get bank loan.....rates are very good still. Lock in when you can, before it gets higher.

Fixed deposit: You're not dumb. It is liquid, very stable.....almost guaranteed returns. Being liquid can be life saving...so I advise you to keep some in this.

Life Insurance: Returns are limited in a sense that you won't see any returns till you're old. Withdraw early and you will sure loose. But it gives you 2 things.....insurance(don't ever neglect this esp if you're married) and tax deductability (this is the main reason I bought LI in the first place). Another recommendation by me.

minolta

Late reply to someone who asked earlier....



Life insurance

In regards to tax deductability, it is actually quite interesting. It is only really applicable if you're in the income tax paying scale...ie roughly earning >RM2k/month. The higher your income, the more benefits of tax deductability.
If you look into your income tax form, there are 2 deductions for "EPF & Insurance"(which they just increased the allowance for in 2006) and "Medical".

If you buy life insurance in Malaysia, you can have your premium fully tax deductable(to max allowable)

Eg, your life insurance premium is RM3k/year. If you are in the 13% tax scale, then you save 13% of Rm3K from going to the goverment by just buying life insurance. If you're in the 21% tax scale, then you save 21% of RM3k.

Say you are rich and your life insurance premium is RM10k/year and you're in the max 28% tax scale. Thats more than the allowable deduction for "EPF and Life Insurance", so you proportion part of the RM10K till the max of "EPF & Life Insurance" and put the rest into "Medical". You save 28% of RM10K a year. Much much higher than any FD rate.

One thing you have to know is that the life insurance in Malaysia are all "investment-linked". I don't know of any plan in Malaysia that don't have this. This is why the premium is substantially higher than say Canada for such a low coverage.

By investment linked, it means that whatever premium you paid invested. The insurance company will reinvest that back for you(they behave just like a fund manager). The negative thing is that if you surrender the policy early, you only get back a portion on what you paid. For life insurance to be worthwhile, you need to invest for long period, meaning at least 20 years to get benefit (on top of the benefit of tax deductability). Think of this as a life long investment, just like another EPF (the yearly dividend is almost the same).

Don't forget the benefit of medical and life insurance coverage. Eg. if you're sick and your insurance got a good medical coverage, just drop by Gleneagles for a specialist consult charged to your insurance company. You don't have to be rich to go see an expensive doctor/best treatment!



Another tip.....for those who have a home loan and plan to take MRTA, you can get a life insurance cum MRTA plan.....same coverage + with an investment scheme.



Of coourse, all the above are overly simplified!

minolta

BTW, i'm not an insurance salesman.

I feel the market activity is still a bit too early to judge. I'm still cautious. Bull yet? Next week will tell. Right now, my judgement is to keep the blues. Iris is making my heart beat too fast. And with busy activity, I have the impression that my broker's sidelining me....probably got few bigger player client. Anyone knows of broker taking a lesser cut that 0.4% in KL?

I think it a good lesson for him. But this kinda scenario are ripe to happen in USA. Banks there are so loose for them to lend out money to someone with false assets, up to the tune of >$500k, and with 100% on cost of home.