First of all, put at least 3 months of your savings away as emergency funds, in your case at least RM 10k. This money should not be invested at all or put inside close to zero risk types of investment. Preferably, put it somewhere you can easily withdraw if something happens to you or you are unemployed.

The rest RM 20k should be invested but this would highly dependant upon what you want to achieve. You said you hate commitments in serving loans but these things are a necessity when it comes to buying property. Rather, the advantage of investing in property is the fact you can use someone else's money to generate income but in return you are stuck on that continuous financial commitment plus the risk of property market going down and interest rates going up.

If you are planning to invest on property in the future, best would be to just put your money in FD, while waiting that you accumulate enough money to invest in property. Another option would be to put that money on low risk unit trust investments such as money market or bonds though be informed that most does not outperform FD, mainly due to the annual management fee and the sales charge. If you can swallow some risk of delaying your property investment which the potential of accelerating your property investment, you can opt for dividend or income fund as these funds have lower risk than equity funds but give decent returns.

If you prefer not get stuck on commitments, you can either invest your money in unit trust (REIT's included), stocks or ETF. Unit trust are not just limited to Public Mutual and there are a lot of funds out there that outperform Public Mutual funds. You can either go for Institutional Unit Trust Advisors (IUTA) or check out online unit trust platforms like fundsupermart.com or eunittrust.com.
If you want to go for stocks, you need to have patience, time and effort to learn about the market. Go for blue chip stocks (high market capitalization stocks) first as these stocks are less likely to lose to much of it's value and give decent returns for the long term. If you are busy daily or prefer not to spend to much time on investing, either just go for unit trust or ETF. ETF have lower sales and management fees than unit trust but with potentially lower return (highly dependant on the unit trust you choose). ETF are mostly horrible for short-term investment unless you are an active investor who constantly took the effort to time the market.

The questions of how long you wanted to invest, your risk tolerance, how much you want to commit your time to learn on investing and your financial objectives are important as this allows people to advise you better on what investment vehicles you should opt for. I would also advise to put a small portion of your savings (probably like RM 100 per month) to investment that focus on your retirement/long term as a good retirement is the kind of financial goals that is best plan early.





And of course, all of this are opinions not rules.

This post has been edited by eternity4life: Jan 15 2015, 12:44 PM

Hi, I would like to understand the reason and your perspective on why you said insurance will not protect you? Did you have experience of bad claims before? Or currently you feel you don't have that much commitment hence insurance is not important for the time being?

As someone who is working in the financial planning industry (not insurance agency etc2), wealth management is prioritize by the order of wealth protection, then wealth accumulation, wealth conservation and lastly wealth distribution. Insurance is considered as one of the main financial products for wealth protection. The reason to this is because if you are diagnosed with one of the 36 CI, you cannot work which stops a large(if not all) part of your income. You would also be faced with a huge medical fees to undergo medical treatment.

Insurance acts as an income replacement while you recover. Medical expenses are one the most likely incident that would eat up all our savings hence the reason one of the main causes of people gone into bankruptcy(base on AKPK) was making loans to pay for medical expenses. There's no point of accumulating wealth if it's all going to go down the drain paying for hospital bills hence the reason financial planners focus on this first especially for the mass affluent.

Even if you feel that insurance is not important for the time being, I would advice on at least buying a medical card for yourself. Good luck with your financial management. All the best.

I am glad that you understood the importance of wealth protection. Medical card is not the same with insurance but some insurance (mostly investment-link) can be attached with medical card. If you just want medical card you should go for a stand-alone medical card as it is usually cheaper but with no insurance or add on benefits. Some stand-alone medical card might be sold by general insurance company.

There`s a few things you should look up for when buying a medical card.

1) Guaranteed renewal - which means your medical card can be renewed every year with no exclusion. Some medical cards with no GN might put exclusion on your current illness which leaves you unprotected since you cannot buy new medical card due to the illness.

2) Cashless - this allows you to enter hospitals without the need to pay as the insurance company will issue a guarantee letter to cover your expenses. Most medical card should have GN and cashless. Without cashless you might need to pay first the hospital before your expenses are covered.

3) Hospital/clinic panels - depending on the medical card you bought, some companies have more panels than the other. Panels allows you to enter cashless instead of reimbursement basis. I do have a list for comparison but its company`s confidential.

4) Annual limit, lifetime limit and R&B - this limit determines your maximum usage per year and for the whole policy. Logically, higher limit means higher cost but better protection. Room and board determines the hospital room (single, double, shared room etc) covered by policy. Some companies require copayment if you exceed the r&b while some ask you to pay the difference.

5) Co-insurance or deductible - some medical card might require you to pay a certain percentage of the fees after a certain amount, only pay out if the medical fees is above a certain portion and many more. This is dependent on how the product is and for some (like deductible) is set by the agent. Co-insurance and deductible is not always a bad thing as it reduces the medical card cost by a lot.

6) Age limit - Some medical card last until 99 while some until 80. Lasting longer is not always a good thing as this gives company an excuse to charge extra on your medical card.

7) Extra bonuses, advantage, etc2 - a lot of companies have their own bonuses like increase annual/lifetime limit if you make no claims, increase r&b and many more. Some even have 15% premium giveback. Some have unlimited lifetime limit. Bear in mind that although this sounds great and all, most are redundant and give extra cost to your premium.

There`s a lot of other things that can be discussed but kinda hard to explain this through chat. I usually provide better insight through appointments, but i hope this helps.

For college students, since you are young, your medical card should be cheap, around RM 150 per month with insurance or around RM 100 for stand-alone medical card if you are going for minimal cost.

I agree that medical card depreciates over time but it does not make it completely useless nor redundant. Hence the reason why it is good to have an independent advisor who can do policy review for you after buying the policy, and usually after 10 years or less ask this advisor to do another policy review for you. Although I do agree that insurance and medical card depreciates, mainly due to inflation, it does provide a certain level of protection for the upcoming future and guarantees enough protection for the present. Just like safety equipments for construction for example, some might become no longer useful after a certain period of time due to wear and tear, but does that mean you should not have any safety equipment at all? Certain insurance companies does realizes this problem of depreciating protection hence the reason certain insurance companies provide autoupgrades on their product's sum assured like Hong Leong Assurance (with increase premium of course). Certain insurance company like Allianz also has a track record of increasing their current client's lifetime limit (with no additional charge I believe). I heard similar news of other insurance companies structuring their product to make it more time resistant as well.

Although I do agree that some insurance agents can and had misled people to secure a business, I believe they are not the majority. What I do agree also is the way certain agencies/companies impose quotas and provide lucrative sales reward to agents does make it likely to go on a mad selling hunt in selling products regardless of the clients situation. Nevertheless, I am sure there are a lot of insurance agents out there as well who do care in providing beneficial products and good services to their clients rather than just trying to fulfill sales quota.

It's understandable that you might have a negative perspective on insurance once you have a bad claim experience. I respect your opinion but I hope that one day you can see that one bad apple does not makes the whole basket rotten. The insurance industry is not as bad as you make it out to be and had benefit the lives millions of people.