Last Updated on November 21, 2025 by Chin Yi Xuan
“What’s the simplest, yet fool-proof way to make your child a millionaire ($1,000,000)?”
Recently, I asked this question to a friend – so I figured it’d be fun to do this with you too.
Give this a thought, I’ll show you my plan at the end of this newsletter.
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Now, 2 quick (and important) updates:
Firstly, I’ve recently become an Associate Member of the Financial Planning Association of Malaysia (FPAM)!
This means I am about halfway through my Certified Financial Planner (CFP) journey – can’t wait to share many more takeaways with you!
Secondly, in my CFP class, I’ve been fortunate to learn about Estate Planning, including will-writing, directly from Mr. Azhar, the group CEO of Rockwills.
Let me tell you – this is one of the most interesting classes in my journey so far!
Next, back to our question:
“What’s the simplest, yet fool-proof way to make your child a millionaire ($1,000,000)?”
“Invest loh” my friend said
Investing is one way to build 1 million for your kids, but it is certainly NOT fool-proof.
- Say, from the time your kid is born, you invest RM250/month in an investment that generates an average return of 8% every year. That’d take close to 43 years to hit a million.
- What if… you pass away from an accident (*touch wood*) after the first year investing? Your kid would be left with some of your invested funds, but definitely very far off from RM1,000,000.
Don’t get me wrong, PLEASE invest for your kids.
My key message here is that investing is not fool-proof… so what is?
My simple, yet fool-proof way to build RM1,000,000 for my (future) child:
Get a life insurance policy with RM1,000,000 coverage, naming my child as the beneficiary.
Simple as that. Here are why this is fool-proof:
- As long as I pay for the policy, I can be 99% certain* that my child will get the payout if I pass away. It could be tomorrow, next month, or 10 years later – the timing risk is eliminated.
- *An exclusion is if su(i)cide happens within a certain window of time, usually 1 – 2 years after the policy is issued. (p.s. YOU MATTER. Seek help, okay?)
- It is also affordable. As an example, at 31, I can buy a RM1,000,000 term-life insurance coverage online for RM233.95/month, locking in the price for the next 20 years.
- Finally, if I pass away, payout from life insurance bypasses any court procedures. This means my child will be able to access the money quickly to sustain their life.
In my opinion, life insurance is one of the most affordable and reliable tools to leave wealth to your loved ones, but…
But my friend foresees a problem:
“What if your child is still too young to make good use of the RM1,000,000?”
That’s a valid concern. This is where ‘Trust‘ comes in.
In estate planning, a Trust is a legal arrangement where one person transfers his assets to a 3rd party (a.k.a. a Trustee), who manages them for the benefit of the beneficiary.
Examples of companies that offer Trust services are Rockwills Trustee and RHB Trustee (note: I am not affiliated with them).
Simply put, for my case:
- I’d set up a Trust, placing the RM1,000,000 life insurance policy under the Trust – with specific instructions.
- When I pass away, my Trustee would receive the RM1,000,000 payout.
- The Trustee would distribute the RM1,000,000 to my child according to my instructions. It could be something like:
- “Every month, pay RM3,000 to my child’s guardian for living expenses.”
- “Reward my child with RM10,000 if he achieves 10 As in SPM.”
- “Distribute everything to my child once he hits 30 y/o.”
Doing so ensures that the money will be spent wisely until my child becomes mature enough to manage it on his own.
Final note:
I hope this newsletter has been helpful – especially if you are a parent who is planning to leave something for your child.
What I shared with you today is just a glimpse of what is possible when we combine financial tools like insurance and Trust.
And we are barely scratching the surface!
Stay tuned, as I will share more useful insights like this in my upcoming newsletters!
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❓Question: Do you find this newsletter useful? Feel free to share your thoughts with me by leaving your comments below!
Disclaimer
Not financial advice. Sharing is based solely on my own research. Do your own due diligence and seek guidance from a licensed financial planner.
