6 ways to turn savings into investments

There are many types of savings and investments which have their level of rish and also level of return. This article I will share what is the pros and cons of them. I will use 6types of common savings and investments nowadays. Please take note that, these are only few examples. There are many more investment in the market. This post aim more only in paper asset. Based on Robert Kiyosaki, a successful investment is when you diversified your portfolio in 4 main investments:
1. business, 2. properties, 3. commodities and 4. paper assets

So now are the common 6 examples of paper assets and property
1. Saving accounts
2. Fixed deposit
3. Property
4. Life insurance
5. Unit trusts
6. Share Markets

1. Saving Accounts

pros

• Easy to open & maintain.
• Minimum requirements, very reasonable.
• Flexible & convenient access to cash.

cons

• The easiness of cash withdrawal can disrupt your saving plan
• Lowest interest (lower than inflation)

risk : lowest

2. Fixed Deposit

pros

• Higher interest rate than savings account
• Money cannot be spent on impulse purchase

cons

• Interest rate still outpaced by inflation
• Withdrawal less flexible

risk : low

3. Property

pros

• A good "forced-savings" plan
• A good hedge or protection against inflation
• Can bring good returns in "boom" economy

cons

• As a starting point for savings, it is difficult; high "start-up' down payment, and need to qualifiy for bank loan
• Long term, inflexible mortgage repayment scheme
• Not readily convert to cash

risk : medium

4. Investment- link Life Insurance

pros

• A useful saving protection vehicle
• As many policies have penalty for premature break or termination. It acts as a mechanism to promote saving
• Proven as an effective "forced savings" plan
• Receive life & medical protection throughout savings period

cons

• Relatively lower returns compared to other long term investment vehicles.
• Lack of flexibility

risk : low-medium

5. Unit Trusts

pros

• The perfect investment vehicle for regular savers who have not much time to follow market condition
• Starting ammounts are not as small as for saving accounts, but are reasonable ( rm1000 )
• Investments are easy to build up on a regular basis
• Benefit derived from dollar-cost averaging.
• Unit trusts give a well-balanced investment portfolio that you do not need to manage yourself
• You can sell your units when the price is right at any time.
• You can use part of your EPF fund to invest

cons

• Affected by ups and downs of share market or other markets that the fund invested in
• High management fees involved, sometimes up to 7%. So you need to ask clearly when choosing an unit trusts

risk : medium

6. Share Market

pros

• More exciting than operating a current account
• Can bring spectacular returns when timing is right

cons

• You need a lump sum to get into the share market
• Not for regular saver investing few hundred/month
• You need vast amounts of market studies and info, time & luck in order to manage your investments successfully

References : Wise to Moves to Retirement, SBB Mutual Bhd

FOR MORE INFO, kindly contact :

Bryan Khoo
0167688136
WealthMap (M) Sdn Bhd

Suite 33-01 33rd Floor 

Menara Keck Seng

203 Jalan Bukit Bintang

55100 Kuala Lumpur.