Bottom line, have Malaysian give it a deep thinking on their personal financial planning? What is their income tax strategy?

Anything from Malaysian Budget they have fully utilized to enjoy rebate/incentives?
PRS is sure listed...

KWSP, free administratives and whatever charges. Guaranteed by statute 2.5%? 6% average past 10 years return? Worry free and only collapse of the country and government that you need to think about.

PRS....adminstratives charges or whatever management charges. Not guaranteed by statute and can goes negative -%? Worry a lot and have to do own investigation and watching (time is money) and collapse of the company means the money gone. So which you think will collapse faster, a private company or a country.

Nobody knows, sorry.

Arguably, KWSP have been there for I donno how long. The government is there almost 50 over years.
Most of UTMC, company that sell Unit Trust is as old as 30 +- years.

The Malaysian EPF was established in 1951.

URL: https://en.wikipedia.org/wiki/Employees_Pro...Fund_(Malaysia)

On this matter, I have said this before and I let me repeat. When KWSP was first launch, a lot of Malaysians (according to my father) was also very skeptical. The said the same thing, what happens to the money? What if the govt collapse, what if the money dissapear into thin air? Yada yada yada....

Today, the next generation think so highly of KWSP. And now they say the same argument about PRS.

I suppose History does repeat itself. And the cycle repeats ad nauseum; ad infinitum.

Xuzen

What I'm afraid is they stop the relief and then all the fund providers stop proactively managing it because it's no longer profitable/no new funds coming in.

On fears of this / that:
1. Invest in funds that feeds into existing fund house's mutual funds.
Big bunch of PRS mutual funds does that - not specifically setup to be ran/managed by itself.
Problem solved?

2. Collapse.
If fund houses can collapse & i cant get my PR$ back- i think it'll the least of my worries... thus, nearly in the same pile as "what if EPF/Gov collapse / nuclear/zombie holocaust"

3. er.. where were we again? oh yeah - $3K pa + get tax relief summore + incentive (if youngster)
i think most youngsters spend more than that on mobile network AND phone(s) per year so.. ho hum.

The tax relief given is lower than SSPN of RM 6k yearly.

I believe most investors if not all, only contribute Rm3k a year. Its worth as a investment option to diversify into many baskets. Even collaps, also dont loose out all Rm3k a year since already earned tax relief.

If i am not mistaken, someone posted that tis 6k is till tis year....next year goes bsck to 3k

D tax relief were meant till 2021 roughly 9-10years. By then prs shud hav matured n hav track record wether it works or not. They will hav to stand by their own by then. For now, its learning process.

ill always choose prs compare to mutual funds though

Even other prs is greener doesnt means switch to it is beneficial. As long d prospectus ngam ur taste jus go ahead. Fund manager come n go. D fund business plan itself r fix. If u guys keep on switchin u gonna lose out on d pricing although u gain it on dividend itself.

Imho, switchin shud b done when there is huge change of economy / financial stability needs

I'll stop this once the tax relief is finished.

I've asked this in the FSM thread but apparently it's more suitable here since it's related to PRS:

Hello, first time investor here, got my FSM account ready last year but decided to hold till this year to get the RM1k incentive.

I've decided to invest RM3k per year to maximise the tax rebate too.

My question is, should i just invest may be around RM1100 for one fund (to get the incentive) and then take my time to invest the remainder in the next few months? I think it would be safer to break into a few PRS funds right? What funds would be recommended for a beginner to start?

Agreed, switch only if it is cheaper and safer, better fund out there.
Always calculate your lost once switching comes to your mind

I have been deposit some of my money to my PRS account and my wife's. I do think PRS is a lot safer than conventional Unit Trust.
Why I am saying that is that normal Unit Trust have this Diversification for you, at a reasonable price.

Unit Trust

If you are nobody, to get diversification using your own money, you buy share by yourself, in my calculation in the past PIEF (it's a public mutual product) based on 2014 annual reports, you need to have 100k minimum for a sets of share of diversification.

But by having it only by units, you can start investing with the same level of diversification (do not put your egg in one basket) at roughly around 1000 ringgit, and you will get roughly 4000 units. You share with fellow investor which also on the PIEF the cost to accumulate 100k for a set.

PRS vs Unit Trust

Then you have Feeder fund, or FUnd of Fund. Where one fund in PRS is consist of a few other Fund which is each is already well diversified. Diversify a diversified portfolio.

So this is my gut feeling, PRS with the same level 4 risk is not as risky as than comparable Unit Trust of risk level 4. So, don't think too much, go for the highest risk if your appetite is big like me. You have ample time to retirement anyway. Stay on one fund, trust me it is very well diversified.

This post has been edited by AbangCorp: Feb 6 2017, 04:43 AM

Some caveat needed. Some prs only feeds to one fund. so essentially, you are still only exposed to one fund. so, it's not necessary very-well diversified fund.

1) Why RM1,100 in the first round? You don't necessary have to invest RM1.1k in the first time to get the incentive, it is based on the total accumulated in the year. Just FYI, in case you don't know. doesn't mean shouldn't.

2) Try reading up on Dollar-Cost Averaging. Some people don't practise DCA, doesn't mean it's wrong but the benefits of DCA are there.

3) As the other forummer mentioned, some funds are actually fund of funds. You can refer to Affin Hwang PRS funds. So, in a way it's quite diversified. Myself only invest in one fund, cause to me the amount i invest in PRS, compared to my other money is not a lot. I diversify other money... but not PRS. Btw, the fund i invest in, only feeds into 1 fund, not affin hwang funds.

PS: while i try to remain unbias, my advice is to stay away from manulife PRS. they have the highest fund management charge, at 2.25% where as other fund houses charges about 1.5% (that's additional 50%), based on FSM info.

Abang,What is your basis to say PRS is safer than conventional unit trust? Even if you say the typical fund componsition are make up of both equity and bonds, it's of the same risk levels as balanced funds. Besides, as other forummer rightly pointed out, there are 100% EQ funds fed into another high risk equity fund as well

While your explanation of benefit of unit trust is that you can buy into a large pool of diversified asset is correct, a more balanced view would b, it does come with the price of management fee, and lack of control from the investor's perspective. So it's good for those who wants a hands off, no eye see approach, not so good for those who want complete control and most cost effective method

Again, I have to disagree on the same level 4 risk in PRS not as risky as unit trust level 4. I'm guessing you are talking about public mutual risk ratings, which I'm not familiar with. But I would be really skeptical if Public Mutual put in risk ratings that are not comparable across similar products. If they do that, then what's the point of having risk ratings in the first place.
But disclaimer is, I've not read their methodology of assigning risk ratings. If you want to talk about FSM risk ratings, I'd be more than happy to do so.

Recently I come across AIA start to offer PRS also. Anyone tried, how is the investment doing? Not sure if AIA (their investment specialist) manage funds better than Public Mutual.

Sorry, newbie on investment here.

This post has been edited by Eddy924: Feb 6 2017, 11:49 AM

AIA suxs!

PM PRS suxs!