How I find meaning in my work (+ Last-minute tax reliefs)
Have you ever lost passion in your work?
As a self-employed creator, I struggled with 'meaning' in my career way too often in the past 7 years.
For instance, I always doubt the impact of my work because, most of the time, I don't get to see the people (like yourself) who read my articles.
"Do my readers find value in my work?"
"Do my readers resonate with my experiences?"
"Is it useful for them?"
Hence, while being a 'content creator' seems like a sexy and desirable career, the truth is that I spend the majority of my time typing in front of the laptop.
Kinda like most 9-5s, but more like 24/7 in the world of self-employment.
What changed my perspective?
2 things happened to the person I loved most lately - my mom.
- She now needs to rely on a walking stick to walk due to intense pain in her leg muscles.
- We found out that there's a lump in her breast (non-cancerous, luckily), but it has to be removed just in case.
In the first case, a physio friend of mine helped my mom relieve her muscles (p.s. reply to this email if you need more info!). The latter, the doctor who'll perform the surgery, is coincidentally a neighbour in my housing area.
Besides being grateful, something clicked for me:
The beautiful things that we experience in our lives are thanks to the people who show up daily to perform their craft.
This includes people like you and me.
Don't underestimate the impact you bring to the society
Regardless of your craft and expertise, you will always leave an impact on society.
Like how a chicken rice uncle would serve a hungry doctor, and the doctor would treat a sick teacher, to how the teacher would, in return, build the next generation of students.
Every craft has its place in the world because they make the society a better place to live in - yours and mine included.
This is the mindset that I'd like to keep going into 2026:
To produce quality content to make a difference in your life, so you can use your craft do the same for others too.
Last-minute tax reliefs (do before 2025 ends)
Ok, here is a list of last-minute tax reliefs that you can take advantage of:
- Boost your EPF contributions: RM7000
- RM4000 from mandatory contribution (if your salary >RM3030, then you'll hit this one already)
- RM3000 from voluntary contribution
- Deposit into SSPN (saving for kid's education): RM8000
- Contribute to PRS: RM3000 (Guide: How to choose a PRS fund)
- Buy medical insurance: RM4000
- Health screening (RM1000), Dental checkup (RM1000), Vaccination (RM1000) - applicable for self, spouse, or child
- Lifestyle: RM2500
- Books, Computer/Smartphone/Tablet, Upskilling courses, Internet Subscription under your own name
- Sports equipment and gym membership (RM1000) - applicable for self, spouse, child, or parents
Hope this is helpful!
2025 has been great thanks to you. See you again in 2026 - enjoy the year-end!
[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.
A simple, fool-proof plan to make my (future) child a millionaire
"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.
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.
Guide: When to deploy your extra cash into the stock market?
Recently, a good friend of mine asked me:
"I have some extra 'bullets' (cash)... but given the stock market at an all-time high (ATH), I am not sure if I should deploy them right now. Any thoughts?"
That is a valid concern.
Timing the market is extremely difficult to do - but let me share the next best thing with you:
How I spot ideal risk-reward opportunities:
Personally, I have my fixed monthly investing routine. At the same time, I always have some extra 'bullets' ready in case the market drops.
But how much of a 'drop' would it take for me to consider deploying my 'bullets'?
The short answer: I look at past data.
It's pretty simple - let me show you how:
The picture above shows you the annual return of the US stock market, the S&P500, over the past 45 years (1980 - 2024).
Now, I want you to focus on the red dots. These dots reveal the largest decline each year.
What can you observe from the red dots?
Here are my insights:
- Purple zone: It is common to see a decline of <20% in the S&P500 in a year. That happened in 36 of the past 45 years (80%).
- Green zone: Meanwhile, a decline of >20% only occurred in 9 of the past 45 years (20% of the time). For me, that's the ideal risk-reward zone to deploy my bullets in the S&P500.
- Simply put, our 'bullets' have a higher chance of delivering more meaningful returns (relative to risk taken) the closer we get to a 20% drop.
In my opinion, using past data is one of the simplest ways to gauge if it is a good window to deploy your extra cash.
But it is not the easiest to execute in real life.
Caveat: The data shown above is specifically for the S&P500. Please gather your own data if you are curious about other markets.
Psychological Challenges:
- You might feel FOMO and deploy your bullets too early. (Confession: That was me)
- You might be too afraid to deploy your capital when the market drops >20%. By then, social media would have painted the sentiment as if it is the end of the world.
- Since big declines are rare, you might not see the drop you want. You will need to be at peace with your 'bullets' not being invested.
- eg. In 2023 and 2024, the largest declines in the S&P500 were only 10% and 8% respectively.
Ultimately, I'd say one will become better with more experience with stock market fluctuations.
My approach:
My biggest challenge is that I can't stand seeing my 'bullets' not invested.
So these days, I do two things:
- I still invest monthly regardless of market conditions (Dollar Cost Average)
- I save my 'bullets' in low-risk funds to generate returns while waiting for market opportunities. That helps with my psychology.
Question: Do you have your own approach to deploy your 'bullets'? Feel free to share with me by leaving your thoughts in the comment section!
Disclaimer:
Not buy/sell advice. Do your own due diligence before investing.
3 tools I use to handle financial emergencies in life (+Dividend Updates)
A late update, but last month (September) has been my largest dividend payout of the year so far:
- Sept 2025: RM970.15
- Sept 2024: RM814.81
- Sept 2023: RM561.38
Hopefully, by sharing my dividend progress over the years, it'll show you that building a low-maintenance dividend income from scratch is not a dream:
3 tools I use to handle financial emergencies:
Liquidity, or how quickly you can access your money, is the most important factor when it comes to handling emergencies.
The first tool isn't my emergency fund. Rather...
#1 ...it is my credit card
Let me tell you why:
Exactly 1 year ago, my dad collapsed while he was jogging in the park.
With age, his heart became weaker, and he had to undergo a pacemaker surgery (a device to regulate heartbeat).
I remember vividly - on the night before my dad's surgery, the nurse came to me and said:
"Sir, we'll require you to pay off the pacemaker device before we can proceed with the surgery tomorrow."
The pacemaker cost RM25,000, and it was not covered by insurance.
Meanwhile, my emergency fund was saved in low-risk money market funds, and it'd take at least 3 working days to access the money.
Guess what came to save the day?
The credit card for which I just increased my credit limit a few months ago.
Used responsibly, a credit card is a liquidity saviour.
#2 Low-Risk Money Market Funds, or Digital Banks
The next tool that I've been using is low-risk money market funds (MMF).
Generally, MMFs pay a return on par (sometimes better) to Fixed Deposits, but with the added flexibility to deposit and withdraw anytime.
My own experience with the withdrawal time of a few common MMFs:
- Versa Cash (3.49% p.a.) and Cash-i (3.27% p.a.): Same day - 2 working days
- 'Save' feature under T&G Invest (3.64% p.a.): 2 working days
- StashAway Simple (3.55% p.a.): 3 - 4 working days
For instant withdrawal, I've recently transferred a portion of my emergency funds to more flexible options - but all of them come with some compromises:
- Ryt Bank Save Pocket (4% p.a., but only for the first RM20,000. 3% p.a. thereafter)
- T&G Go+ (3% p.a.) - Max deposit limit of RM20,000.
#3 Insurance (let me explain)
Finally, for big, unexpected incidents in life, insurance is still my go-to risk-management tool.
Yes, boring - I know. But let me explain with a financial emergency in life:
How life insurance helps in the event of death:
Did you know that upon death, your assets - including cash in your bank account will be frozen?
Even if you have a will, it'll still take a few months before your loved ones get access to your assets.
Having life insurance bypasses the legal process of a will (we call it a 'probate').
In most cases, your beneficiaries will be paid swiftly, ensuring they do not face money pressure upon your passing.
Question: What are your tips to manage financial emergencies in life?
I hope today's sharing is helpful!
My question to you: Are you using any other method to prepare for emergencies in life?
Feel free to share your ideas in the comment section below!
Disclaimer:
Not financial advice. Please do your own due diligence and seek professional help before making important financial decisions in life.
Stacked Confidence: How I manage uncertainties as a solo creator
A confession:
As a solo finance creator for the past 8 years, anxiety is no stranger to me due to the uncertain nature of my career.
Over time, I have become better at managing uncertainty. But this amazing IG reel from podcaster Steven Bartlett, who interviewed many successful entrepreneurs, helped me put things into perspective:
"Your relationship with uncertainty will define your entire life.
If you are the type of person that needs the answer, needs the branch that you're going to swing to, the type of person that can't jump off the tree without the branch being within reach...
You'll end up overstaying your welcome in situations that are no longer serving you."
He further adds:
"The most successful people I interviewed all seem to have in common is they are able to choose uncertainty over certain misery."
Isn't this powerful?
Too many people (including myself) have chosen to stay in situations that make them miserable, be it:
- A toxic workplace
- An unhealthy relationship
- A dying business (more scarily, a slowly dying one)
It is our nature to seek 'comfort' in a predictable life, even when it is slowly f*cking us up.
The question: How do we build up the courage to step into the unknowns?
Managing uncertainties with 'Stacked Confidence'
These days, I'm (slowly) learning to manage uncertainties through 'Stacked Confidence'.
Instead of seeking absolute certainty, I stack foundations that provide me confidence to pursue paths with uncertain outcomes:
(1) Proper Risk Management: Deal with worst-case scenarios
- 6 to 12 months of emergency fund
- Proper insurance coverage
(2) Multiple sources of income
- Different streams of business income
- Low-maintenance dividend income via my Freedom Fund
(3) Continuous upskilling + getting mentors
- Pursuing my Certified Financial Planner (CFP) qualification
- Engaging different mentors, such as a financial planner and a business coach.
(4) The final piece of the puzzle is trusting ourselves.
As my business coach always reminds me:
"You've got to trust that you have the ability to deal with situations when they arise."
As simple as it seems, I am still internalizing this lesson to this day.
Building courage with 'Stacked Confidence'
One last thing:
When we seek certainty, we hope that bad things never happen.
When we 'stack' foundations to our confidence, we are building faith that we'll have what it takes to come out of obstacles as a stronger and wiser person.
Hope this helps! :)
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p.s. If this resonates, feel free to share your thoughts in the comment section. I’d love to hear how you are building your own 'stacked confidence' in life!
Escaping the Middle-Income Trap Isn’t (Just) About Money
What does it take to be the first in your family to escape the middle-income trap - and more importantly, never fall back into it?
I've been thinking about this lately.
On paper, Malaysia’s middle-income (M40) group earns between RM 5,250–RM 11,819 a month. But today, I’m not talking about income bands - I’m talking about a way of life.
The middle-income trap is when you earn enough to survive, but not enough to live freely.
You don’t have to worry about basic survival - but every life decision feels like a trade-off:
- Want to send your kids to 'brain development class'? That means cutting back on your annual family trip.
- Want to buy a house? That’s 30 years chained to a job you might not even like.
- Want to join that Pilates or yoga class? Then your food budget takes the hit.
Every small upgrade in one area demands a compromise in another.
How most of us got here:
When I was born, my parents only had RM1,000 left in their bank account.
My parents worked and saved hard, ensuring that I received the best education. In my parents' generation, we've climbed from survival to stability.
However, growing up in a middle-income environment, I was exposed to the way of thinking that a lot of us would be familiar with:
- "Investing is risky" (so don't do it).
- "Study hard and get a stable job" (the only way to get money is by exchanging your time).
- "Insurance is a scam" (so don't EVEN talk about it)
- "Having debt is bad" (no one taught me about 'good' debt and 'bad' debt)
- And the things that aren't spoken out loud, but done subconsciously - these are the most difficult mindset to reverse down the road: To prove that you've 'made it' in life, you need to have big cars and houses.
When I started my content creation career in the personal finance field, I noticed something:
The truly wealthy people think about money and wealth VERY DIFFERENTLY.
Heck, even their kids are brought up (thinking) differently.
While the mindset that I was taught growing up ensures survival, the limiting beliefs are also the ones locking many people in the middle-income trap.
In other words, the next leap requires a complete mindset revamp.
Escaping the Middle-Income Trap (MIT) - forever
I learned that to move beyond MIT, I needed to unlearn what once kept me safe.
More importantly, I have to adopt a different way of thinking about money and wealth:
- Money isn’t evil — it’s a tool for optionality.
- Growing income-producing assets while I sleep through investing (taking calculated risk).
- Stacking leverages to grow my income (small targeted effort, big outcome)
- Insurance isn’t a scam - it’s risk management
Also:
You do not need fancy cars or houses to show people that you've 'made it' in life.
Rewriting the Family Playbook
It took me years to rewire my own beliefs about money and wealth.
Even now, I still catch myself falling back into old, self-limiting beliefs at times.
But I’ve decided: I’ll be the first in my family to build the foundation for wealth that lasts.
If I’m lucky enough to raise the next generation, I want my kids to grow up with a different mindset:
- Freedom over materialism
- Leverage time and capital, not just effort
- Understand risk and reward, not fear it
- Seek optionality, not just stability
The Real Goal
Wealth building isn’t about flexing with race cars or designer goods.
It’s about optionality. It's the freedom of choice to:
- Eat healthy and train without worrying about cost.
- Give your parents the care they deserve.
- Pursue projects because they’re meaningful, not because you’re desperate.
One final thought:
The middle-income trap isn’t just about income.
Rather, it’s a mindset range.
The real way out?
Think bigger than survival.
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p.s. If this resonates, hit reply and share your thoughts. I’d love to hear how you’re breaking out of your own version of the middle-income trap.
Guide: How to choose & buy your PRS fund?
What is PRS, and how can I find and buy the best PRS fund?
Private Retirement Scheme (PRS) is an initiative that the Malaysian government introduced to encourage Malaysians to invest for their retirement.
In return, Malaysians can enjoy personal tax relief of up to RM3,000 whenever they enroll or top up their PRS account. As of Budget 2025, this relief has been extended until 2030.
However, how can one know which PRS fund to invest in?
In this guide, I'll cover a simple guide on how to research and invest in PRS fund for yourself!
Step-by-step: Screen for PRS funds using the FSMOne Fund Selector Tool
For unit trusts and funds, I usually refer to FSMOne's Fund Selector Tool as it has one of the most comprehensive fund coverage in Malaysia.
Even better, it is free to use!
Step 1: Head on to FSMOne Fund Selector Tool, and filter for PRS funds
Click the below button to access FSMOne Fund Selector Tool. I've customized the button to go directly to PRS funds:
On the site, you'll notice that the funds have been filtered specifically for PRS funds:
Step 2: Sort your PRS funds by various criteria
One thing I appreciate about the FSMOne Fund Selector Tool is the ability to sort the funds according to different criteria:
(a) Sort by Year-To-Date (YTD) and Annualized Performance
To find out the top-performing PRS funds in the past, you can sort the funds according to their performance at different timeframes.
Example:
- If I'd like to sort for the top-performing PRS funds this year, I'll sort by 'YTD'.
- If I'd like to sort for the PRS funds with the highest average return in the past 3 years, I'll sort by '3y'.
(b) Sort by Calendar Year Performance
You can also compare the funds' performance according to a specific year in the past:
(c) Sort by 3Y Sharpe Ratio
Sharpe Ratio is one of the most useful metrics when researching a fund's performance.
Essentially, Sharpe Ratio helps us compare the risk-adjusted performance between funds. Simply put, we can use Sharpe Ratio to decide if a fund's risk is worth the return.
How to use Sharpe Ratio:
- Sharpe Ratio is best used to compare funds with similar asset classes and geographical exposure.
- Generally, a fund with Sharpe Ratio >1.0 is considered good as it shows that the fund provided excess returns relative to the risk it experienced.
- Meanwhile, a Sharpe Ratio <1.0 is less ideal as it (generally) indicates that the return was not enough to compensate for the risk.
Example:
Principal Islamic PRS Plus Equity - Class C and Kenanga OnePRS Growth Fund are both funds with exposure to Malaysian equities.
Given their similarity, one can use Sharpe ratio to compare their risk-adjusted performance:
(d) Sort by 3Y Volatility
Funds can also be sorted by volatility.
Essentially, funds with lower 3Y volatility have a track record of providing more consistent returns over time rather than chasing short-term performance.
(e) Sort by Asset Class and Geographic Sector
Aside from performances, it is also useful to know the underlying asset class and where the funds are geographically invested in.
(i) Under Asset Class, you'll know WHAT a fund is investing in:
- Equity: Mainly stocks. Generally higher potential return but is more volatile and risky.
- Fixed Income: Exposure to debt instruments like bonds, Fixed Deposits, and money market funds. Generally lower potential return but is less volatile and risky.
- Multi-Asset/Balanced: A mixed exposure of asset classes such as equity and fixed income. These funds generally strike a balance between returns and volatility/risk.
(ii) Under Geographic Sector, you'll know WHERE a fund is investing in:
- Malaysia/Malaysia-focused: Mainly exposure to assets in Malaysia
- Asia: Mainly exposure to assets in Asian countries.
- Asia ex-Japan: Mainly exposure to assets in Asian countries, excluding Japan.
- Global: Gain exposure to global assets.
Step 3: Click on a specific PRS fund to learn more details
Example of information that I'd like to know about a fund:
#1 Holdings: What does the fund invest in?
#2 What are the fees involved when I invest in this fund?
To note:
- All PRS funds under FSMOne have 0% sales charges.
- Fund manager fees include annual management fees, trustee fees, and expense ratios. These fees are deducted directly from the fund's Net Asset Value (NAV) and no additional payment is required.
- PPA fee charged by Private Pension Administrator (PPA) Malaysia
6 Tips to find the best PRS Funds
Here are my 5 general principles for finding the ideal PRS fund:
- #1 Positive past 3y, 5y, or 10y performance.
- #2 Funds that are diversified across different geographical regions or sectors (eg. Global). In other words, I prefer funds that are not dependent or focused on just a single country/region (eg. Malaysia or Asia focused) or sector
- #3 Funds with lower 3Y volatility - which indicate that returns are generated consistently over time.
- #4 Sharpe Ratio higher than 1.0 (if not, as close to 1.0 as possible) while comparing funds with similar geographical traits or asset exposure.
- #5 Relatively low fees/charges
The goal is to strike a balance among the 5 variables above while researching for your ideal PRS fund.
Tips #6: Check out Target Date Funds (TDF)
Target Date Funds (TDF) are unique funds that will, over time, adjust & optimize the assets according to their risk nature.
All you have to do is to decide your optimum retirement timeframe.
As you approach retirement, TDF fund managers will adjust the fund holdings and invest in more stable and less volatile assets.
The Principal RetireEasy and Principal Islamic RetireEasy series are Target Date Funds with different retirement timeframes. As of time of writing, the respective timeframes are 2030, 2040, 2050, and 2060:
Fund comparison feature in FSMOne Fund Selector Tool
What if you have multiple PRS funds that you'd like to compare side by side?
The fund comparison feature in FSMOne is designed just for this:
Step 1: Select the funds that you'd like to compare, then click 'Compare Now'
Step 2: Compare important information for selected PRS funds
Important info such as past performance, asset class & geographical exposure, and Sharpe Ratio I(and more!) can be compared:
How to invest in PRS funds (+🎁 Promo)
One of the best ways to invest in PRS funds is through FSMOne, as you get access to a vast selection of PRS funds from 7 PRS providers (AIA, AmInvest, AHAM Asset Management Berhad, Manulife, Principal, Kenanga, RHB).
🎁 FSMOne PRS Campaign 2025: Enjoy RM40 FSMOne Cash Account! (ending 15/12/2025)
From 6 October 2025 to 15 December 2025, enjoy RM40 FSMOne Cash Account Credits when you invest in PRS Funds via FSMOne!
- 🎁 Reward #1: Receive RM40 worth of FSMOne MYR Cash Account credits when you invest a minimum gross investment amount of RM3,000 in one PRS Fund in a single transaction via FSMOne from 6 October to 15 December 2025.
- Participating PRS Providers for this campaign include:
- AHAM Asset Management Berhad
- Kenanga Investors Berhad
- Manulife Investment Management (M) Berhad
- Principal Asset Management Berhad
- RHB Asset Management Sdn Bhd
- All cash payments and completed forms must reach FSMOne by 11am, 15 December 2025.
- 🎁 Reward #2: In addition, enjoy RM25 MYR Cash Account credits → For new FSMOne users who open an FSMOne account and make their first top up/investment (including PRS) [Campaign: 8/10 - 31/12/2025]
Check out the section below for a step-by-step guide on how to buy your PRS fund from FSMOne.
Step-by-step guide to buy your PRS fund from FSMOne
Prerequisite: Firstly, start by opening your FSMOne account HERE. Skip to Step 2 if you already have a FSMOne account.
- Select 'Personal Account'
- Key in your personal details and create your FSMOne account username & password.
- Key in your tax information
- Verify your identity by taking a photo of your IC
- Enter your address and upload a supporting document (eg. utility bill, bank statement) as proof of your address:
- Enter your employment details. You will also be given an option to open a CDS account with FSMOne, which allows you to trade stocks. There will be a fee of RM10 to open a CDS account, which will be refunded upon successful account activation:
Step 1: Log in to your FSMOne account and click on "Trade"
Step 2: Look for Unit Trust and click "Buy"
Step 3-4: Under 'View By', select Private Retirement Funds and choose Private Retirement Funds
Note: This step only appears during the initial subscription process.
Step 5: Fill in the investment amount and payment method (FPX/Cash management fund/Cash account)
Step 6: Fill in the information and Sign
Note: This step only appears during the initial subscription process.
Step 7-8: Click View Cart and proceed to Check out
(you may add more Funds or proceed to view the Cart, check the details and proceed to check out)
Step 9-10: Agree on Terms and Proceed to make payment
You may click the links to the terms and conditions and check out to proceed to make payment from your personal bank account as we do not accept third-party payments or cash deposits
Step 11: Order completed and click Pay now
Only for PRS Funds from Manulife, AIA, AmInvest, click download PRS Form to complete your transaction.
Step 12: Select your preferred bank and complete the payment
You may select your preferred bank account to proceed to make FPX payment
PRS Frequently Asked Questions (FAQs)
Ques: What is my tax incentive for investing in PRS?
Ans: You get to enjoy personal tax relief up to RM3,000
Ques: Who can invest in PRS?
Ans: PRS is open to individuals aged 18 and above, including both Malaysians and foreigners.
Ques: Can I withdraw/sell my PRS funds?
Ans: Your PRS contributions are allocated to sub-accounts A and B, with different withdrawal conditions:
- Sub-account A (70%): Can be withdrawn upon reaching retirement age of 55.
- Sub-account B (30%): Can be withdrawn once a year (1 year after your subscription), subject to a 8% tax penalty.
Ques: Can I transfer my existing PRS fund to another PRS provider?
Ans: Yes, transfer to other PRS provider is allowed after 1 year from the first subscription date. A RM25 PPA transfer fee per request and other related transfer fees (if applicable) will be incurred.
Ques: Can I switch my PRS fund?
Ans: Yes, with FSMOne, you can: Adjust your portfolio based on market conditions or your goals and switch across 60+ PRS funds from 7 providers.
Disclaimers
All materials and contents herein shall not be construed as an offer or solicitation for the subscription, purchase or sale of any fund, product or services. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons.
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I'll not retire purely off dividends - here's why (and a better way to retire)
Like most dividend enthusiasts, I’ve always dreamt of living purely off my dividends when I retire one day.
However, as I studied the topic of retirement further, I’ve decided not to pursue this path.
In this week’s newsletter, let me show you why, and the better alternatives that I’ll be using:
#1 The problem of retiring purely off dividends
Being able to live off dividends is attractive to many. This is because retirees are not required to sell their investments to fund their expenses - which can be difficult without proper rules in place.
But there’s a problem: To do this, you will need a huge capital.
Let me show you what I mean:
Scenario:
At 30, Adam’s yearly expenses is $24,000 ($2,000/m), and he expects his expenses to stay the same upon retirement, after adjusting for inflation. He plans to retire after 60, and expects to live until 90.
Let’s assume in the long run, inflation is 3%. And let’s also assume that he’ll receive a return of 6% (in the form of dividend yield) on his retirement fund upon retirement.
How much retirement does Adam need by the time he retires?
Here’s how to determine the retirement fund Adam will need:
Step 1: Find out how much his yearly expenses are when he retires ($60,001.93):
- Using this Future Value calculator, key in the following:
- N = 31 (Adam has 31 years before he retires: 60-30+1)
- PV = $24,000 (Adam’s expenses at present day)
- Interest Rate = 3% (inflation)
- PMT = $0
- PMT made at the ‘Beginning’ of each period
- Next, click ‘Calculate’, and we’ll find that $24,000 worth of yearly expenses today will be equivalent to $58,254.30 when Adam retires after 60.
Step 2: Find out the total retirement fund required by Adam by the time he retires.
- To do so, we will first need to adjust the rate of return of Adam’s retirement fund (6%) by the inflation rate (3%). This ensures that our calculation takes into account of the effect of rising prices over time.
Adjusted return by inflation
= [(1+Return)÷(1+Inflation)]-1
= [(1+0.06)÷(1+0.03)]-1
= 0.0291 (2.91%)
- Next, divide ‘Future Value’ from Step 1 ($60,001.93) by the adjusted return:
$60,001.93÷0.0291 = $2,061,922
- Finally, add Adam's first year's expenses to his total retirement fund ($60,001.93). This is to cover his Year 1 expenses when he retires before he receives the dividends from his retirement fund:
$2,061,922 + $60,001.93 = $2,121,923.93
In other words, if Adam would like to maintain his current lifestyle purely with dividends when he retires, he will need to accumulate $2,121,923.93 by the time he starts his retirement at 61 years old.
By purely living off dividends, Adam would be left with $5,156,620 at the end of age 90:
The downside of retiring off dividends:
- A relatively large amount of capital is required, compared to the methods that I'll be showing in the next section
- Does not take into account of a difficult market where dividend cuts are possible.
- Retirement capital saved isn't fully used to enjoy life after retirement.
#2 The rule of 25
On the other hand, the Rule of 25 is a rule of thumb that suggests you need to save 25x your expected annual expenses to retire.
This rule is a practical application of the 4% withdrawal rule, implying that if you save 25x your annual expenses, you can withdraw 4% of your savings each year to cover those expenses, without depleting your retirement fund.
In my opinion, while not perfect, the rule of 25 is decent to estimate how much you need to retire.
Scenario:
Jane is 30 this year and her expenses at present day is $24,000 per year ($2,000/month). She foresees her expenses to remain the same after she retires in 30 years, after 3% inflation. As her retirement fund, Jane is building a dividend portfolio that will pay her an average of 6% dividend per year.
Using the rule of 25, how much does she need in her retirement fund when she retires?
Here’s how to determine the retirement fund Jane will need:
Step 1: Find out how much his yearly expenses are when she retires ($60,001.93):
- Using this Future Value calculator, key in the following:
- N = 31 (Jane has 31 years before she retires)
- PV = $24,000 (Jane’s expenses at present day)
- Interest Rate = 3% (inflation)
- PMT = $0
- PMT made at the ‘Beginning’ of each period
- Next, click ‘Calculate’, and we’ll find that $24,000 worth of yearly expenses today will be equivalent to $60,001.93 when Jane retires after 60.
Step 2: Multiply yearly expenses upon retirement by 25
$60,001.93 x 25 = $1,500,048
$1,500,048 is how much Jane would need to fund a 30-year retirement without depleting her capital, assuming a 4% annual withdrawal rate from her retirement fund.
This is significantly lower than the amount required to live off dividends ($2,061,922).
[Tips] To see the yearly withdrawal under the Rule of 25, use the calculator below:
Calculator: https://www.fourpercentrule.com/
Calculator Setting:
- Current age: 60, Retirement age: 60
- Current Assets: $1,500,048
- Retirement years: 30
- Leave all options under ‘Add’ section unticked
- Put 0 for all selections under ‘Contribution’ section
- Inflation: 3%
- Pre-retirement return 0%, Post-retirement return 6%
- Fixed % return: 0%
- % in equity: 100%. % in fixed income: 0%.
- Retirement spending: Using 4% rule
Result:
- Based on Jane’s retirement plan, she can afford to retire after age 60, withdraw 4% from her retirement fund every year (adjusted for inflation), and still have a remaining balance of $1.7 million at age 90.
Downsides of the Rule of 25:
- Assumes a Stable Portfolio: The rule assumes your portfolio will consistently generate enough returns to meet your withdrawals, which isn't guaranteed.
Is there a way to adapt a retirement strategy to the ever-changing market conditions?
#3 Bucket Method
Personally, I am more inclined to use the Bucket Method for my retirement days. This is a more flexible way of adapting to fluctuating market conditions.
The Bucket Method is a simple adaptation of the Rule of 25. The good thing? It is adapted dynamically to market returns. Let me show you how it works:
Scenario:
Nick is 30 this year and his expenses for his basic needs at present day is $24,000 per year ($2,000/month). When he retires in 30 years, he expects the expenses for his basic needs to stay the same. However, he also wishes to go on occasional traveling to enjoy his retirement life.
Nick has a dividend portfolio that pays an average of 6% in dividend yield annually. But this may fluctuate depending on market conditions.
Using the rule of 25, how much does he need in his retirement fund when he retires? Assume a long-term inflation rate of 3%.
Here’s how to determine the retirement fund Nick will need:
Step 1: Find out how much his yearly expenses are when he retires ($60,001.93):
- Using this Future Value calculator, key in the following:
- N = 31 (Nick has 31 years before she retires)
- PV = $24,000 (Nick's expenses at present day)
- Interest Rate = 3% (inflation)
- PMT = $0
- PMT made at the ‘Beginning’ of each period
- Next, click ‘Calculate’, and we’ll find that $24,000 worth of yearly expenses today will be equivalent to $60,001.93 when Nick retires after 60.
Step 2: Multiply yearly expenses upon retirement by 25 (Rule of 25)
$60,001.93 x 25 = $1,500,048
Step 3: On top of that, save up 2 years' worth of expenses in cash to cater for market fluctuations
$60,001.93 x 2 = $120,003.86
Choices to save in Fixed Deposit (FD) or low-risk money market funds. Key consideration is to have easy access to funds, no lock-in period, and no penalty for withdrawal.
Total Retirement Fund Required: $1,500,048 (Step 2) + $120,003.86 (Step 3) = $1,620,051.86
Example of Bucket Method under different market conditions:
There are 2 buckets to Nick's retirement fund:
- Bucket 1: 2 years' worth of expenses in cash: $120,003.86
- Bucket 2: Invested Retirement fund: $1,500,048
Here is how the Bucket Method would work under different market conditions (Normal Year, Good Year, Bad Year):
Key principles for Bucket Method:
- In a normal year, reinvest all the surplus back to portfolio. Stick to the standard 4% withdrawal rule.
- In a good year where you have an outsized surplus (eg. 3% surplus instead of 2% from the example above), you are free to spend the extra surplus (1%) on enjoyment.
- In a bad year, use Cash Bucket to cover the shortfall in dividend income. Then, use future surplus during a good year to replenish Cash Bucket. The rule of thumb is to always replenish Cash Bucket back to 2 years' worth of expenses.
Downsides of the Bucket Method:
- More hands-on effort is required to manage retirement fund.
Verdict: No perfect style - choose what fits for you
I hope this guide has been helpful!
At the end of the day, choose what style that fits best to your life circumstances!
If you have any questions, feel free to leave them at the comment section below!
Disclaimer:
Not financial advice. Please do your own due diligence and seek professional help before making important financial decisions in life.
Just do it: The biggest challenge I face while writing my dividend investing book
I've been spending the past month working on my upcoming book on dividend investing.
Embarassingly, the progress has been slower than what I initially expected out of myself.
The biggest hurdle?
The constant mental conversation that I have with myself:
"Am I good enough to actually publish a book?"
"Would people actually read this book?"
Running away from my self-doubt
Facing (or more accurately, running away from) my self-doubt has been where I wasted most of my time doing.
When that happens, I'd find myself turning to non-productive YouTube videos.
And it sucks, because I have all the amazing ideas in my mind that got stuck the moment I try to turn them into actual words.
The truth is, in my 8-year content creation career, self-doubt has been the major hurdle that I have never overcome.
I believe it will resonate well if you have a project that you've always wanted to pursue, but never got to make it happen - or gave up in the process.
My misery continues until I come across 3 important principles that helped me slowly get back on track:
#1 B+ instead of A+
Being a perfectionist is one key reason why I got stuck so frequently in my work.
In my mind, I've always pictured my work to be 'the perfect content that everyone would love'.
Pursuing an A+ masterpiece led me to feel stuck whenever I couldn't reproduce what I had in mind into actual writing or content.
Worst, I turn to doom-scrolling YouTube or Instagram when I got stuck - which doesn't help with the situation.
Until recently, I have realized the importance of 'good enough' work:
- To just start writing (or scribbling ideas) instead of expecting myself to produce something perfect at first go.
- To be comfortable with using pointers initially, instead of expecting myself to form perfect sentences.
- To publish my work when it is at B+, even when I don't feel comfortable doing so.
The whole point of publishing my work at B+ is a way for me to show up consistently despite imperfections, so in a year, the quality of my B+ work will outdo my A+ work at present day.
#2 Most people don't care (and that's a good thing)
Another reason why I find myself so miserable while writing is because I care too much about how people would think of my work.
I fear people wouldn't like what I produce. I fear my readers would unsubscribe from my newsletter. I fear no one would find value in what I do.
Until I discovered that... most people really don't care.
Most people are too occupied with their work & life to give a damn about what you want to do - and that's a good thing.
Take this opportunity to share the C+ content, B- article, B+ work, and continue to hone the skills and build momentum with each work that is published.
Eventually, you'll get better and attract the 10% people who would appreciate your work, and find value in what you produce.
That's what makes me feel genuinely grateful when I write for my newsletter subscribers (you guys) every week.
#3 Do it for yourself
Things become easier when I approach my book as something that I wish my younger self had access to when I first started investing.
This reduces the weight that I need to produce a masterpiece that everyone likes.
Instead, when I write for my younger self, I will also help the people who are on the same journey as I am - such as:
- How to prepare for aging parents
- How to build a reliable dividend portfolio against uncertainties in life
- How to build freedom of choice in life via investing
To quote the author of my favourite book, 'The Psychology of Money':
Writing for yourself is fun, and it shows. Writing for others is work, and it shows.
- Morgan Housel
What to do if you are keen on pursuing a long-delayed project:
To summarize, here are the bullet-proof mindsets I'd like to share with you:
- Be comfortable with showing your B+ work so that one day your B+ work can outdo your A+ work in the present day.
- Just start - don't worry about what most people would think because they are likely too busy with their own things in life. You'll find your tribe, eventually.
- Do it for yourself. It's less pressure and more fun that way.
Hope this week's newsletter is helpful. All the best! (now i shall get back to writing my book)
Leverage: How to create or make more, while doing less
Everyone has the same 24 hours each day.
And assuming 2 people who start with equal education and financial background, how they accumulate 'leverage factors' will be the biggest differentiating factor in their careers.
Leverage is how you turn a small effort into a relatively bigger outcome.
The outcome isn't just about money, but can be about your autonomy, flexibility, development, or status at work.
I think about leverage a lot in my career. Let me share some key ideas with you today:
Input x Leverage Factors = Magnified Outcome
Factor #1: Time-Based Work
My first job was as a part-timer in those escape game rooms after Form 6. I made RM5/hour.
During public holidays, I get paid RM10/hour - but that's about it. I could serve 5 customers, or 20 customers... but my pay ceiling would not budge.
Time is the first leverage factor that we'll all start with at the beginning of our careers - and it is also the weakest one of all.
You are paid by the hour, no matter how much value you create. You are replaceable because almost anyone can be trained to do your work.
The job isn't about you - it's about the hours (input) you clock in.
Early on, I aspired to reduce reliance on time as my only career leverage.
This led me to the next few factors:
Factor #2: Skills
Things started to change for me when I picked up knowledge and experience in financial planning & investing.
When I conduct workshops, I wasn't charging for hours - I was charging for value. If I manage to help my audience achieve what they want, I could price my work based on results, not time.
Then I stacked writing into the mix. Then marketing. Skill-stacking helped multiply my value, and propelled my income and flexibility at work.
Here are 3 ideas to maximize the value of your skills:
- Challenge yourself to be compensated for the outcome (performance) instead of your input (time). This could mean selling your own products, commission-based work, or taking up a profit-split income model with your employer.
- Stack your skills. Combine your core strength with complementary ones. Yoga + video editing. Investing + copywriting. Coding + storytelling. Every layer magnifies the value of your work.
- Pick the right market. Not all market pays the same for your skills. Choose the market where the rewards for displaying your skills are higher. (eg. Working with US or SG companies/clients)
Factor #3: Your own product or services
During the pandemic years, people were stuck at home with money they could not spend - and they wanted to invest it.
Coincidentally, a blogpost I wrote on an investing platform was discovered by people who'd like to invest in stocks. The result? My readers started to sign up using my referral link, which opened up my career to numerous opportunities down the line.
It was the first time I experienced leverage. I created the content once. And instead of spending time telling people 1-by-1, the internet helped me reach thousands of people overnight. My income was no longer tied to my hours.
Money aside, this incident taught me to start looking at career decisions through the lens of leverage.
Factor #4: Capital
The most straightforward way to use capital (money) as leverage is to invest it.
An example is the stock market, where you buy a piece of ownership in other people's businesses, and get rewarded as the businesses thrive.
That's how I've been building my low-maintenance dividend income via my Freedom Fund. It allows me to get paid while I sleep.
Growth aside, capital can also protect you by giving you choices. To quit a toxic workplace. To say 'No' to uninspiring projects. To take a leap of faith in life.
In addition, capital can also help to magnify outcome. Like running ads to scale your products. Or hire help to deal with accounting and taxes.
Used well, capital can be a powerful lever in your career & life.
Factor #5: Audience
You don't have to go viral - you need to build trust.
An audience is the most powerful form of leverage. Because when people trust you, they listen. When they listen, they buy. And often, they'll buy again.
You do not need millions of followers - you need the right people who resonate with your values, and believe that you can help them.
In his famous essay '1000 True Fans', Kevin Kelly said:
If you have 1,000 people who truly believe in your work and are willing to support you, you can make a living as a creator.
Still unsure about how to build leverage in your career?
Here are what you can do:
- Follow leverage: If your boss/mentor has leverage, it is likely to flow down to you. As they thrive, you will thrive with them.
- Go smaller: Join a smaller company or startup. The smaller it is, the more important you can be - which translates to high leverage opportunities.
- Go together: Join forces with people who have skills that complement yours. That is where you can stake each other's skills and multiply your value as a collective group.
The challenge in building leverage in a career isn't the 'Hows', but the need for you to make a drastic shift in mindset. To step out of the comfort zone of exchanging time for money. To develop your leverage despite the uncertainties. To stay patient before the compounding effect takes place.
Each leverage factor will unlock new perspectives, bringing in more freedom and choice.
Hope this week's newsletter got you thinking. All the best!
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p.s. Feel free to share your thoughts with me too! I read all replies!