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How & When Should I Start Investing?

Here is what Malaysians need to know before they invest their hard-earned money.


How many times have you heard people giving themselves excuses such as “I am too young to invest”, “I don’t have enough money to invest” or “It’s too late for me to learn how to invest”?

Are you one of them?

You Are Getting Poorer By The Day

The truth is, if you don’t invest, you are actually getting poorer by the day, because of this annoying little phenomenon called “inflation.”

While the Malaysian government would like us to believe that our inflation rate is only around 3% per annum, the real inflation rate is probably closer to 10%. This is because the official inflation rate released by our government takes into account the prices of goods that are heavily subsidised by the government such as sugar, cooking oil, flour & rice.

How do we arrive at a rate of 10% per annum, you ask?

A 10% Inflation Rate

It’s pretty simple, just take the price of something that isn’t heavily subsidised by the government; for example, your favorite “Milo Ais” at the mamak stall or a can of soft drink and compare it with the price it was selling at 10 years ago.

You’ll realise that the price of most goods would have almost doubled over 10 years!

A cup of “Milo Ais” can sell for almost RM2.50 nowadays compared to RM1.20 or so 10 years ago in 2006!

That would mean the price of goods have increased 100% over the span of 10 years, which works out to be about 10% a year.

That’s why, if you were to leave your money sitting in the bank doing nothing, that same amount of money would be able to buy a lot less in 10 years time!

What If I Don’t Have Any Money To Invest?

We understand that making the first step to invest can be a daunting task, especially when we find out about the minimum amount of capital required to participate in the various types of investments available to us in Malaysia.

It is true that our investment options are often limited by the amount of capital we have.

However, the good news is that any amount of capital is still money you can invest.

Even a meagre RM1 or RM100 is still capital!

Make The Best Out Of What You Have

If you have RM10,000 to spare, it is sufficient for you to start dabbling in stocks, mutual funds or bond funds; if you have RM100, you can buy a good book on investment to help you figure out how to start investing; if you only have RM1, you can still buy someone who is consistently successful at investing a cup of iced water so you can ask for their advice and guidance on how to get started.

It all comes down to how badly you want it, how much effort you are willing to put in & whether you’re willing to learn.

The Best Investment You Can Make Is In Yourself

The best investment you can make is always in yourself, in acquiring the skills, knowledge and network that’ll help you make the right investment decisions and discover the right opportunities again and again.

Once you know how to fish, or in this case, invest, you’ll have fish (money) for the rest of your life. No one can ever take the skill and knowledge you’ve acquired away from you.

But of course, by investing in yourself, we don’t mean splurging on luxury cars or bags; those expenses are liabilities, which you can choose to indulge in once you’ve made enough money.

We’re referring to the skills & knowledge required to help you make wise investment decisions, not forgetting your health, which you’d also need to see those investments through and enjoy the wealth that you’ve accumulated.

Hence, it might also be a good idea to start your journey in investing by getting a comprehensive Medical Card.

How Do I Start?

Here are a few simple steps you can follow to kick-start your journey as an investor.


Before you start investing any real money, it is important for you to first understand the fundamentals of investing.
You should be familiar with concepts such as building a diversified portfolio, fundamental analysis, technical analysis and various investment vehicles, opportunities and their respective risk profiles.

Buy Books On Smart Investing Habits

A good way to get your hands on such information would be to get self-help books on the topic of investment. There are plenty of such books out there, but be sure to do your online research beforehand so you can tell the good ones apart from the bad ones.

Once you’ve grasped the basics, you can then move on to more technical ones for the specific types of investments that you’re interested in.

Buy A Mentor Coffee

Whatever you learn from books and articles will always be limited to theories and hypotheses. Nothing beats learning from the experience and real-life stories of someone who has been there and done that, and has been consistently successful at investing.

However, do exercise caution when you’re choosing a mentor, because not everyone who has made money in the stock market or in a one-off investment is a good mentor.

You’ll soon learn that almost everyone makes money during an economic boom cycle, but that not many of them actually end up keeping that money when recession finally hits.

Find someone who is a seasoned investor who has made money consistently over many years and has a deep understanding of how the market works and is able to explain each investment decision they have ever made rationally, analytically, and in detail to you.

Your typical uncle or aunty who makes stock-buying and selling decisions based purely on what they read on the newspaper and what their friends at their favorite coffeeshop tell them might not be the best candidates to approach, as they are usually the ones who get in too late and become too emotional to cut their losses when the market eventually crashes.

We’re not saying that all uncles & aunties are bad. There are many seasoned investors who hang out at coffeeshops too. We’re suggesting that you should find someone who really knows his or her stuff and analyses the market and investment spectrum well.

Read Our Articles & Do Your Own Research

When it comes to money, the duty to safeguard it always lies with you.

Since investing always comes with varying degrees of risk, the onus is on you to make sure that you do your research and analysis before you make any investment.

Do not take any advice that your mentors or self-help books give you at face value. You owe it to yourself to always probe deeper, cross-reference your sources and make sure that you truly understand and believe in your own analysis after you’ve done all your homework.

This is because you’re ultimately the one responsible for your own money and investment decisions.


After you’ve understood the fundamentals of investing, your investment options, their respective risk profiles from self-help books and consultation sessions with your mentors, you’ll have to discover and determine your own risk appetite, which will in turn influence your investment strategy.

How Much Do You Have To Work With?

One of the factors that you’d have to take into account would be the amount of starting capital that you have to work with.

If you have more, you might be able to invest in more secure investments that require higher amounts of starting capital such as commercial properties that you can rent out. It might also be wise to allocate a larger portion of your portfolio to low to medium risk investments that generate a stable return of 5-10% annually so you have a stable stream of income while growing your portfolio steadily.

If you have less, you might have to limit yourself to a couple of good time-sensitive and probably higher risk investments to grow your portfolio such as the recovery-boom cycle of fundamentally strong stocks following a global recession, which usually only happens once every 7-8 years or so.

Your Age

Unless you’re from an incredibly wealthy family or have already made your fortune at a very young age, you’d probably also have to take into account your age as it determines the buffer (in good working years) you have to earn your investment capital back should anything go wrong in your investment, which in turn affects your risk capacity.

Your Earning Power & Risk Appetite

But ultimately, all of us have different earning powers and risk appetite regardless of our age. Some of us are naturally more aggressive and have higher ambitions while some of us are naturally more conservative, easily contented and prefer to play it safe.

We’d just have to make sure that we decide on an investment strategy and risk appetite that we’re comfortable with.


Once you’ve decided on an investment strategy and corresponding risk appetite that you’re comfortable with, it’s time to put them to the test.

“Belum Cuba, Belum Tahu”

Otherwise, your strategy will always remain a strategy and will never turn into real money.

You should also understand that it is normal for people to get their strategy wrong the first time, chances are you probably would too.

Hence, always start small.

You’ll never know which strategy works and which doesn’t until you’ve tried them all.

Be Rational

One of the most important skills you’d need to master when investing is to know when to cut your losses.

We are all emotional beings, and tend to get overly attached to the investment decisions that we’ve made.

However, the art of investing is actually a cruel science, oxymoronic, we know, but it’s true.

If you’ve made a wrong decision and things aren’t working out, make sure you cut your losses and pull the plug in time instead of allowing yourself to lose more than you have to.

Be Comfortable With Mistakes

We’ll soon realise that even the best investors in the world are only right 70% of the time.

Even if you were one of the top investors in the world, you’d still make losses on about 3 in 10 investments you make. The trick to being successful in investing is to consistently make more right decisions than wrong ones of equal weight.

What differentiates successful investors from unsuccessful ones, besides their acumen and analytical skills, is their ability to cut-losses when they’ve made a mistake and move on to make more right ones instead of sticking to a wrong decision emotionally.

So, be comfortable with mistakes, learn from them, and you’ll get better over time.

(4) Learn From Experience, Adjust & Improve

Experience is our best teacher, and practice makes perfect. The more we invest, the more we’ll learn and the better we get. We’d just have to make sure we don’t lose more than we can afford by ensuring that our portfolio is properly diversified and balanced, and that we can recover from a loss.

If we do it right, we would be able to attain the financial freedom and passive income that would allow us to live comfortably and do what we love instead of what we need to survive.

Find A Strategy You’re Comfortable With Over Time

As we experiment with various investments and portfolios, we’d eventually find a strategy we’re comfortable with that works for us.

Keep Building Your Portfolio

By which time it would be second nature for us to keep building our portfolio and look out for new investment opportunities to grow our portfolio steadily.

It Is Your Duty To Be Financially Literate Enough To Invest

We can’t choose how wealthy we are when we’re born, but we can certainly choose whether we want to have financial freedom for the second half of our lives.

With the plethora of knowledge and resources accessible to us on the internet and libraries, the tools for us to connect with almost anyone in the world for advice and the various avenues for us to experiment and find investment opportunities, we owe it to ourselves to be financially literate enough to invest and achieve financial freedom if we want to.

DollarsandSense is a website that aims to help people make better financial decisions, one interesting bite-sized article at a time. Like us on Facebook to stay in touch with our latest article. 

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DollarsAndSense Malaysia is a website that aims to help people make better financial decisions, one interesting, bite-sized article at a time. Like us on Facebook to stay in touch with our latest articles.