I received this email from a reader seeking for financial advice. In these current times of financial difficulties any form of savings, however little, is a great way to start. However, with interest rates at an all time low and threatening to dip further, a good investment vehicle to grow your funds in are currently a little hard to find.
As I am no financial expert, I would like to post this email here for any comments or financial advise from all of you out there!
I am a student myself, thus saving money is really difficult seeing that the economy doesn’t favour us to do so. Besides, I already have debts i.e. education loan which costs about RM22,000 in hand. The future scares me for not having a back-up plan never mind the fact that I am covered by insurance yet. Despite the fact that I have little knowledge in investment and financial plannings, I plan to throw in RM1000 from my meager savings in unit trust and start saving RM100 each month after that, for as long as I can.
Money from my scholarship will be coming in soon so, I need advice on how to save and grow them in small scale. What can I do with as little as RM300-RM500 monthly to spare in order to assure myself financially in the years to come (to buy my own car, support my parents, to splurge on personal wants etc).
What do you experienced adults suggest to a young adult with limited fund in planning his/her financial future?
Please feel free to drop your advice in my comments box below.
March 23rd, 2009 at 8:28 pm
I’m also a young adult, I’ve been in the workforce for 3 years now, and the biggest advise I can give you is try to diversify where you put your money.. It would be too difficult for anyone without much knowledge on investment to find the Holy Grail of investment returns, but if you try several instruments that are low-risk and decent return, in the long run you’ll be better off. Here’s a couple ideas:
* If you have any special talent.. invest on it, and use it part time: Now that you are student, you may have a little bit of free time to do something on the side. Don’t go for the usual jobs, test your talent and you may be rewarded. I made a decent student living by tutoring and working as a “sound guy” for small concerts.. Here’s how it worked, with the little money i was making as a tutor, I bought a few mics, cables, and a mixing board with a friend and started working in small nightclubs.. I recover my investment and made more money
* Start putting aside some money for the long run. Invest in an account were you can profit out of compound interest (if you don’t know what it is, go read about it right away).
* If you like the stock market, try to look for investment funds that are low risk and start learning about it.
What I have learnt so far is that making money is a endurance race, you have to be persistent and dedicated.. if you sprint you may lose..
March 30th, 2009 at 2:57 pm
Hi Richardo – Thanks for your comments. I hope it helps Uninsured Kid. I like your last comment on it being an endurance race!
June 3rd, 2009 at 11:24 am
I hope that this advice is still relevant, I’m not sure if your reader is still monitoring this post
My best advice for Uninsured Kid is NOT to make any investments YET.
Instead, he/she should spend time doing the following:
a) Join a library with a good selection of personal finance books. I find the PJ library to be excellent, but I”m not sure about the others.
b) Read as much as possible. Learn about the different investment methods so you don’t go in blindly or by using wrong justifications.
c) Find someone who can give him good advice. Make sure those people do not give biased advice (this rules out insurance agents and unit trust salesmen)
In this period of study, he/she might learn that unit trusts may not be the best investment tool.
My second best advice is DON’T SPEND MONEY on the latest gadgets, clothes, cars and eat at expensive restaurants. All this money you are spending today means you are losing thousands tomorrow!
Regarding insurance, go for TERM LIFE or hospitalization coverage only, and never go for those investment linked plans. Insurance should be insurance, and not used for investment.
June 4th, 2009 at 10:08 am
Hi again Mr Beagle – Thanks for your advice! Hopefully our young reader learns from your valuable tips here!