All You Need to Know about Dividend Withholding Tax for Malaysians (stocks & ETFs)
Did you know? Depending on where you invest, a tax may be charged on your dividends!
Dividend withholding tax is something that most investors are unaware of when investing.
In this post, let's learn about dividend withholding tax as a Malaysian, how it affects your investments, and what can you do about it!
Related Read:
Highlights of dividend withholding tax
- Dividend withholding tax is a tax that investors incur while receiving dividends from their investments.
- Depending on what you invest in (stocks or Exchange-Traded Funds (ETFs)), the withholding tax rate will apply to you differently.
- Dividend withholding tax impacts each investor differently. In particular, dividend investors should be mindful of the tax when making their investment decisions.
What is dividend withholding tax?
Withholding tax is a method that a country uses to collect taxes from non-residents who have derived income from the country.
As an example, when we invest in stocks in a foreign country (eg. the US), the dividends that we received from our investments are usually charged with a withholding tax. To be precise, that’s what we call ‘dividend withholding tax’.
So, how does dividend withholding tax work? How does it affect us as an everyday investor?
Let’s find out!
How does dividend withholding tax work?
Depending on what you invest in, the way a dividend withholding tax will apply to your investments will differ:
Scenario 1: You invest in stocks
If you invest in stocks, your dividend withholding tax rate is determined by your country of residence.
Most of the time, the rate is determined by whether Malaysia has a tax treaty with the other country.
So, if you invest in US stocks as a Malaysian, you are charged with a 30% dividend withholding tax. If you invest in Singapore stocks, you will enjoy a 0% rate as a Malaysian.
Scenario 2: You invest in funds such as Exchange Traded Funds (ETFs)
The dividend withholding tax rate of an ETF is determined by the country where the fund is domiciled in.
Simply put, ‘domicile’ refers to the country where a fund’s holding company is legally incorporated.
What’s the difference though? Glad you asked.
Essentially, not every ETF listed in a country is necessarily domiciled in that country.
For instance, Singapore has its own S&P500 ETF (which tracks the top 500 listed companies in the US) listed on its exchange, namely the SPDR S&P 500 ETF Trust (SGX code: S27). However, if you dig into the fund’s prospectus, you’d notice that S27 is actually a US-domiciled fund.
Hence investors of S27 ETF, regardless of country of residence, are subjected to a 30% dividend withholding tax.
Meanwhile, S&P500 ETFs such as CSPX and VUAA are Ireland-domiciled ETFs listed on the London Stock Exchange (LSE). Since Ireland has a tax treaty with the US, Ireland-domiciled ETFs are only subjected to a 15% withholding tax.
As a result, instead of investing in US-domiciled funds, Ireland-domiciled ETFs are usually the go-to choice for investors outside of the US to gain exposure to the US market due to favourable tax conditions.
READ MORE: Guide: How to invest in S&P500 as a non-US resident
So, how do we pay our dividend withholding tax?
Essentially, there is no need for an investor to 'pay' dividend withholding tax directly, as it is deducted automatically from your dividends BEFORE it is distributed to you.
As an example, Apple decides to pay out $0.10 distribution per share to investors. Let’s say you own 1,000 shares, you’d receive:
- With dividend withholding tax deducted (30% for US-listed stocks): $70 in dividends ($0.10*70%*1000 shares)
Be mindful of the latest 2% dividend tax
That said, Malaysians should be aware of the latest 2% dividend tax (which is different from dividend WHT) under budget 2025, which targets Malaysians who generate more than RM100,000 in annual dividends from local companies.
Find out more about the latest 2% dividend tax for Malaysians HERE.
Dividend withholding tax rates for Malaysians
Below, you can find the dividend withholding tax rates relevant to most Malaysian investors:
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| Country | Dividend Withholding Tax Rate |
| Malaysia | 0% (10% for REITs) |
| Singapore | 0% |
| Hong Kong | 0% |
| UK | 0% |
| China | 10% |
| Canada | 15% |
| Australia | 15% on unfranked dividends. 0% on franked dividends. |
| Japan | 15% |
| Ireland-Domiciled ETFs (London Stock Exchange) | 15% |
| US | 30% |
How does it affect you?
Dividend withholding tax affects investors differently.
-
Growth investing - minimal impact
If you invest in growth-related stocks or ETFs like Tesla and ARKW, the impact of dividend withholding tax is minimal.
The reason is, growth stocks do not usually pay high dividends (or they do not pay dividends at all).
-
Dividend investing – significant impact
As for dividend investors, it is essential to be aware of dividend withholding tax while investing.
Since dividends make up a significant portion of the overall return of dividend-focused stocks/ETFs, it is crucial to take into account the impact of withholding tax.
For instance, assuming you invest $100,000 in a US dividend portfolio that generates a 6% dividend yield annually.
Below is the total dividend that you'd earn without dividend withholding tax (0%):
In this case, a 30% dividend withholding tax would cause you to end up with over 42% (~$93,000) less in dividend income over the span of 20 years!
In short, it is obvious that dividend withholding tax will impact the returns of dividend investors as a whole.
How to deal with dividend withholding tax as an investor
Usually, most investors would look to the US stock market while investing globally.
However, the 30% dividend withholding tax from the US can be very costly, especially to investors holding stocks where dividends form a significant portion of their returns.
Here are some of the things you can do to reduce the impact of dividend withholding tax on your long-term returns:
- Generally, avoid dividend stocks/ETFs that are listed or domiciled in the US. For ETFs, you can find out the domicile details on the official site or prospectus of the fund.
- Opt for stocks/ETFs that are listed or domiciled in markets with 0% withholding tax, such as Singapore and Hong Kong.
- Alternatively, you can also opt for Ireland-domiciled ETFs that are listed on the London Stock Exchange (LSE) or Canadian-listed stocks/ETFs, which are generally more tax efficient (15%).
Regardless of the market, Interactive Brokers (IBKR) has you covered with access to over 150 markets in 34 countries (US, Canada, Malaysia, Hong Kong, China, Japan, UK, Singapore, Europe, and more!).
Check out my review on Interactive Brokers HERE.
Side note:
With 0% withholding tax, the Singapore REIT market is one of the most established REIT markets in Asia, and it pays a decent dividend as well! Click HERE to learn more about Singapore REIT ETFs!
A word on tax on Foreign-Sourced Income (FSI) for Malaysians
As of the production of this post, Malaysians are not required to pay any further tax on dividends received from overseas investments, aside from the existing Dividend WHT explained in this article.
In Budget 2025, the Malaysian government has extended individual income tax exemption for Foreign-sourced Income (FSI) from 2026 to 2036.
In short, for your overseas dividends, you are not required to pay any tax aside from the Dividend WHT mentioned in this post - at least until 2036.
Will any of these policies change (for the better or worse)?
Based on my understanding of the Malaysian government’s policy-making habits, I think it is hard to tell and I have zero control over this. So, I will focus on continuing to grow my dividend portfolio instead of worrying about the things that may or may not happen.
I will keep this section updated if there’s any news!
No Money Lah Verdict
I hope this guide has been clear and helpful!
I’ve received many tax-related questions on dividends in the past and I think we may have overcomplicated things due to a lack proper of information.
If you have any questions, feel free to let me know in the comments section below!
FAQ on Dividend Withholding Tax
Q1: How do I pay for dividend withholding tax on my dividends?
You DO NOT need to pay for dividend withholding tax directly. Instead, they are deducted before your dividends are paid to you. In short, the dividends that you are receiving have been offset by withholding tax – there is nothing you have to do on your end.
Q2: Is dividend investing still a reliable approach with dividend withholding tax around?
Personally, I think dividend investing is still the most reliable way to build passive income. Meanwhile, dividend withholding tax is just part of the game, not a bug.
I will give additional thoughts into withholding tax while doing my research, but it will not deter me from building my dividend income portfolio!
Q3: What is the difference between ‘franked’ and ‘unfranked dividends’ for Australia-listed stocks/ETFs?
A franked dividend is a system set by the Australian government to eliminate double taxation in dividends.
As such, franked dividend is paid with a tax credit attached, where shareholders submit the dividend income plus the franking credit as income but will only be taxed on the dividend portion.
Meanwhile, unfranked dividends carry no tax credit. Since the company has not paid tax on the dividends paid, you will have to pay income tax on the particular dividend that you received as an Australian.
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.
This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link
SCHD Review: Still my favorite US dividend growth ETF?
The Schwab US Dividend Equity (SCHD) ETF is one of the most well-received ETFs among dividend investors.
As an ETF with a track record of consistently growing its dividend, SCHD is a key position in my Freedom Fund, making up >10% of the portfolio:
In this post, let us take a deep dive at SCHD, and 3 key reasons why it is my favorite dividend ETF to hold for the long term in my Freedom Fund!
RELATED LINKS:
- [Portfolio] A detailed look at my Freedom Fund
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p.s. Check out my go-to broker to invest in SCHD below!
Quick Recap: What is an ETF & why dividend ETF?
Exchange-Traded Funds (ETF) are essentially low-cost funds listed in the stock market, where you can buy and sell just like stocks.
Simply put, ETFs are funds that track the performance of a basket of assets (eg. Stocks, bonds, commodities).
As such, dividend ETFs are ETFs that track a basket of dividend-paying assets, such as stocks and bonds.
Why invest in dividend ETFs?
Dividend ETFs make it easy for investors to gain diversified exposure to a basket of dividend-paying stocks (or other assets), without having to pick individual stocks.
The diversified nature of ETFs significantly reduces the impact should a single company perform badly.
LEARN MORE: Introduction to Exchange-Traded Fund (ETF)
What is Schwab US Dividend Equity (SCHD) ETF?
Schwab US Dividend Equity (SCHD) is a dividend ETF listed in the US stock market since 2011.
Key info of SCHD:
- ETF manager: Charles Schwab
- Expense Ratio: 0.06% per annum
- Holdings: US-listed stocks
- Dividend payout: Quarterly
How are stocks selected to be part of SCHD?
SCHD tracks the Dow Jones U.S. Dividend 100 Index, which measures the performance of fundamentally solid US-listed companies with a track record of consistent dividend payment.
Essentially, stocks are filtered based on the following criteria:
- Dividend payout: Minimum 10 consecutive years of dividend payments.
- Size of the company: Minimum Float Adjusted Market Cap of $500 million.
- Liquidity: Minimum three-month Average Daily Volume of Trading of $2 million.
Then, qualified stocks are further ranked as per the following criteria:
- Dividend yield
- 5-year dividend growth rate
- Company’s financials (ie. Free cashflow vs debt)
- Return on equity (ROE)
As a result, companies that are selected to be part of SCHD holdings are usually companies with strong financial foundation and a solid track record of dividend payout.
3 key reasons why I invest in SCHD
#1 SCHD has a strong track record of growing its dividend payout
Since its inception in late 2011, SCHD has recorded more than 10 years of distribution growth streak (even as Covid broke out in 2020!).
| Financial Year | Dividend Payout ($) | Annual Payout Growth | Yield-on-Cost if you invested on 2/1/2014 (Entry Price: $36.54/share) |
| 2023 | 2.6580 | 3.77% | 7.27% |
| 2022 | 2.5615 | 13.90% | 7.01% |
| 2021 | 2.2490 | 10.88% | 6.15% |
| 2020 | 2.0284 | 17.64% | 5.55% |
| 2019 | 1.7242 | 19.79% | 4.72% |
| 2018 | 1.4393 | 6.96% | 3.94% |
| 2017 | 1.3457 | 6.97% | 3.68% |
| 2016 | 1.2580 | 9.72% | 3.44% |
| 2015 | 1.1466 | 9.52% | 3.14% |
| 2014 | 1.0469 | – | 2.87% |
From the above dividend data, we can see that SCHD has consistently grown its dividends for the past 10 years.
The dividend growth by SCHD also means that investors that invested in SCHD a decade ago, while started with a small 2.87% yield, would be enjoying 7.27% in yield-on-cost (p.s. click to find out what yield-on-cost means) in 2023:
i. Continued dividend growth streak in 2024
As of the 1st half of 2024, SCHD continues its dividend growth streak compared to the prior years:
ii. Why is SCHD’s growing dividend payout so attractive in the long term?
For investors looking to live off their dividends one day, SCHD can be an ETF to look out for thanks to its solid track record of dividend growth.
If you invested in a unit of SCHD 10 years ago (assuming 1st day of 2014) at $36.54/share, your yield-on-cost in the first year was just 2.87%.
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During the first year (2014), you’ll be paid $10,469 in dividends (10,000 units x $1.0469), which translates to 2.87% in dividend yield.
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10 years later (2023), your original investment in SCHD will pay you $26,580 in dividends (10,000 units x $2.6580), translating to 7.27% in dividend yield.
Thanks to the growth in dividends, your dividend payout increased from $10,469 to $26,580 in 10 years – a whopping 153% growth!
[IMPORTANT] It is important to note this discussion is a reference to the past, and past performance is NOT indicative of future returns.
#2 SCHD displayed decent overall performance
SCHD not only shines with its impressive track record of growing dividends.
With a 10-year annualized return of 10.99% (as of May 2024), SCHD’s overall performance (inclusive of dividends) has also been decent for the past decade.
#3 Relatively Low volatility
On top of both key reasons stated above, SCHD also produced returns at relatively lower volatility than the stock market (S&P500).
Beta measures the volatility of a stock in comparison with the market (usually the S&P500) as a whole.
As of July 2024, SCHD recorded a 5-year beta of around 0.77 (source: Yahoo finance), while the S&P500 has a beta of 1.00. This means SCHD is about 23% less volatile than the S&P500.
In other words, compared to the S&P500, investors who invest in SCHD tend to enjoy a more stable return with less intense market swings.
SCHD Holdings
As of March 2024, SCHD holds about 103 stocks. The top 10 companies make up about 40% of SCHD holdings:
Top Sector Exposure of SCHD
In addition, SCHD filtering method also means companies that qualified are commonly found in more stable sectors, such as the financials and healthcare sectors.
3 things/risks to know while investing in SCHD:
At a glance, SCHD is a pretty balanced dividend ETF with 103 holdings across different sectors. That said, here are 2 key things we need to know while investing in SCHD:
#1 Geographical risk
SCHD offers 100% exposure to US-listed companies. This means any domestic/international US-related events & conflicts will influence the performance of SCHD.
#2 Risk of dividend cut
While it is undeniable that SCHD has been growing its dividends for 12 years in a row, it is still not a guarantee that it will stay that way forever.
As such, investors should always be prepared for the possibility of a dividend cut, especially when the market & economy is not doing well.
#3 Dividend withholding tax (WHT) for non-US residents
For foreign investors that invest in US-domiciled ETFs such as SCHD, there is a dividend withholding tax (WHT) for dividend payouts.
As an example, there is a 30% dividend WHT for investors from Malaysia and Singapore.
Example: 3.5% dividend yield – 30% WHT = 2.45%
Personally, while this is not ideal, I still find SCHD’s solid track record of increasing dividend payout outweighs the dividend withholding tax factor.
It is the only US-domiciled dividend ETF that I wouldn’t mind investing in.
LEARN MORE: A guide to Dividend Withholding Tax (WHT) - all you need to know!
My thoughts on SCHD after investing in it for 2 years (2022-2024)
It is no secret that the dividend-investing community loves SCHD. Aside from growing its dividends consistently, SCHD has delivered a reliable return for many years.
From 2013 - 2022, SCHD has grown by 244%, outperforming the S&P500 (+207%).
I began to invest in SCHD in 2022, and here is what I observed as an SCHD investor:
#1 SCHD's performance has been lackluster in 2023 and 2024
2023 and 2024 (so far) have been great times for investors, with the S&P500 hitting all-time highs.
However, since 2023, SCHD's performance has been lackluster compared to the S&P500.
From 2023 - July 2024, SCHD has grown by a mere 7.6%. Meanwhile, the S&P500 has grown by over 47% during the same time:
READ: How to invest in S&P500 as a non-US citizen
#2 A lack of tech exposure led to SCHD's underperformance
To understand SCHD's underperformance, it is important to know what is driving S&P500's growth since 2023.
The impressive growth in the S&P500 in 2023 - 2024 is mainly driven by the 7 stocks in the S&P500 - Apple, Alphabet, Meta, Microsoft, NVIDIA, Amazon, and Tesla.
Without these 7 companies (which make up ~26% of the S&P500 total weight), the S&P500 would have returned a rather mediocre performance:
In comparison, SCHD's holding lacks exposure to all 7 stocks mentioned. More so, SCHD has a much lower exposure to the tech sector compared to the S&P500.
As of 2024, SCHD has 8.7% of holdings in the tech sector relative to S&P500's 30.6% exposure. Simply put, SCHD may not fully benefit from the growth brought in by the tech industry:
On the bright side, since SCHD's holdings are more balanced across different sectors (financials, healthcare, consumer staples), any fluctuation in the tech sector will have a smaller impact on SCHD's performance, compared to the S&P500.
#3 Should I choose S&P500 over SCHD?
Given the current circumstances, should one invest in the S&P500 instead of SCHD?
The short answer: it depends on your goal as an investor.
Personally, I have exposure to both S&P500 and SCHD. As explained in my investing strategies, I have a growth investing portfolio and dividend investing portfolio (a.k.a. My Freedom Fund).
To maximize growth, the S&P500 is a significant part of my growth investing portfolio. For consistent & growing passive income, SCHD is an important part of my Freedom Fund.
READ: My investing strategies as I turn 30
#4 My thoughts on SCHD as an investment
At this point, SCHD remains an important holding in my Freedom Fund as it has proven itself with a solid track record of dividend growth.
My goal while investing in SCHD has always been dividend growth first, and capital appreciation (price growth) second.
Right now, SCHD still stands as one of the few ETFs with consistent dividend growth. As such, for the time being, my thesis of investing in SCHD for growing passive income stays valid.
Would there be a time when SCHD becomes obsolete to my investing goal?
Most certainly. The moment SCHD experiences consecutive dividend cuts coupled with poor price appreciation might be the time when I consider other alternatives.
Review: 3 best alternatives to SCHD
Meanwhile, check out my review of the 3 best Ireland-domiciled dividend ETFs HERE, which could be an alternative to SCHD:
Is SCHD for you?
For more than a decade, SCHD has proven itself as an ETF with a solid track record of growing dividends, while providing respectable growth opportunities at the same time.
In my opinion, SCHD would fit well with:
- Long-term investors (>10 years of time horizon) looking to invest for a steady & growing stream of dividend income.
- Dividend investors with exposure to Malaysia and/or Singapore stocks and are looking for diversified exposure to earn dividends in USD.
How to invest in SCHD? (My go-to broker)
Investing in SCHD is easy as many brokers offer access to the US stock market.
Investors can consider Interactive Brokers (IBKR), a global broker that I use to build my Freedom Fund (my dividend portfolio).
READ MORE: Interactive Brokers (IBKR) Review
No Money Lah’s Verdict
So, how do you like SCHD?
As a dividend investor with about 15 – 20 year time horizon, I think SCHD is a gem thanks to its track record of increasing dividends (even more so in a challenging 2022!).
I hope this review has been helpful!
Meanwhile, check out my go-to broker to invest in the global market below!
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced for general information purposes only. It is not intended to constitute professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.
The inclusion of Interactive Brokers’ (IBKR) name, logo or weblinks is present pursuant to an advertising arrangement only. IBKR is not a contributor, reviewer, provider or sponsor of content published on this site, and is not responsible for the accuracy of any products or services discussed.
Moomoo MY Cash Plus Review: How I earn competitive interest on my idle cash!
Since the launch of Moomoo MY in Malaysia in early 2024, they have grown to be one of the top stock investing platforms in Malaysia.
In my initial review during the launch, the lack of ability to earn interest on idle cash was one of my criticisms towards Moomoo MY.
However, with the launch of Cash Plus, things have now changed. As a Moomoo MY client, you can now enjoy a low-risk, competitive return on your idle cash when you sign up for moomoo’s Cash Plus funds!
In this post, let's dive deeper into Cash Plus and look at what Cash Plus has to offer!
RELATED POST:
What is Cash Plus?
Cash Plus is a suite of money market and cash funds offered to Moomoo MY users which invest in high-security monetary instruments, such as government short-term bonds and banks' fixed deposits (FD).
Thanks to this, the funds offered by Cash Plus are low-risk options for investors looking to:
- Earn interest on their idle cash while waiting for the next investment opportunity, or;
- Simply saving towards a financial goal in life.
For me, Cash Plus is also a flexible alternative to traditional Fixed Deposits (FDs), where my deposits are locked in for a fixed period with a penalty usually imposed for early withdrawal.
Moomoo MY Cash Plus Benefits
Having used Cash Plus for a period of time, these are what I like about Cash Plus:
#1 Earn daily returns:
By using Cash Plus, you get to enjoy up to 3.5% p.a.* in daily returns. This daily return is applicable even during the weekends.
This is competitive compared to traditional Fixed Deposit rates from banks, especially considering that they come with lock-in period.
*Based on 1-year past returns on Maybank Retail Money Market-I Fund and United Money Market Fund-Class R as of May 2024.
#2 Low barrier of entry:
It is also easy to get started with Cash Plus. All funds in Cash Plus can be subscribed from RM0.01 for MYR money market funds or USD0.01 for USD cash fund.
There is no maximum amount on how much you deposit in Cash Plus.
#3 Swift deposit & withdrawal
With Cash Plus, you are able to make your deposit and withdrawal swiftly, without the typical lock-in period compared to traditional banks' FD:
Deposit time for Cash Plus funds:
| United Money Market Fund - Class R | Maybank Retail Money Market I-Fund | United USD Cash Fund - Class R | |
| Subscription Cut-off time | 12:00pm | 12:00pm | 9:00am |
| Unit confirmed | Within the same trading day (T+0) | Within the same trading day (T+0) | Within the next 2 trading day (T+2) |
| Return posted | The next trading day (T+1) | The next trading day (T+1) | The next 3 trading days (T+3) |
Redemption time for Cash Plus funds:
| United Money Market Fund - Class R | Maybank Retail Money Market I-Fund | United USD Cash Fund - Class R | |
| Redemption Cut-off time | 12:00pm | 12:00pm | 9:00am |
| Unit confirmed | - | T+0 | T+2 |
| Redeemed amount | T+1 (Before 8pm) | T+1 | T+3 |
#4 Flexibility to redeem MYR money market funds for trading anytime
Even better, with Cash Plus, you can redeem your deposits on MYR money market funds for stock trading at any time, without having to wait for the withdrawal to be completed.
This makes it easy to keep your idle cash in the moomoo app working to generate returns for you at all times until you need it for trading purposes.
Meanwhile, deposits in USD Cash Plus fund can only be traded after redemption is completed.
#5 Zero fees + Shariah-compliant fund
In addition, there is also zero fees charged by Moomoo MY for Cash Plus. In other words, all you earn is yours to keep.
For Muslim investors, there is also a shariah compliant MYR money market fund, namely the Maybank Retail Money Market-I Fund that is available to be subscribed by Malaysian Muslims.
#6 NEW: Activate SmartSave to grow your idle cash automatically on Cash Plus!
SmartSave is, in my opinion, one of the best features on Moomoo MY.
By activating SmartSave, the idle cash in your Moomoo MY universal account will be used to buy your appointed MYR Cash Plus funds automatically on each business day.
The good thing? It will not affect your buying power for stocks and subscription to services such as IPO!
In other words, SmartSave allows your idle cash to keep working for you even when it is not invested in the stock market!
3 types of Cash Plus funds
There are 3 funds under Cash Plus. 2 of them are MYR money market funds, and one of them is a USD cash fund:
(A) Cash Plus MYR Money Market Funds
There are 2 MYR money market funds, namely United Money Market Fund-Class R, and Maybank Retail Money Market I-Fund.
| United Money Market Fund-Class R | Maybank Retail Money Market I-Fund | |
| Currency | MYR | MYR |
| Asset Manager | UOB | Maybank |
| 1-Year Return (as of 5/9/2024) | 3.61% | 3.59% |
| Shariah-Compliant | No | Yes |
| Subscription & Redemption fee | No | No |
As a whole, the 1-year return from both MYR money market funds is almost similar. The biggest differentiator for most users would be the Shariah compliance of the funds.
For Muslim investors who seek to invest in Shariah-compliant funds, the Maybank Retail Money Market I-Fund would be the go-to choice.
A major benefit of using Cash Plus MYR Money Market Funds over the USD Cash Fund is the ability to redeem the funds anytime, and even if the funds have not yet arrived, they can be used for trading within the moomoo app.
(B) USD Cash Fund
Aside from MYR money market funds, there is also a USD cash fund to choose from, namely the United USD Cash Fund - Class R:
| United USD Cash Fund - Class R | |
| Currency | USD |
| Asset Manager | UOB |
| 7-day Yield (as of 5/9/2024) | 5.0765% |
| Shariah-Compliant | No |
| Subscription & Redemption fee | No |
United USD Cash Fund - Class R allows investors to gain exposure and earn interest in USD.
The only thing is that unlike MYR money market funds above, I can only use my USD funds for trading once the redemption is complete.
Is Cash Plus safe to use?
- Regulated by Securities Commission Malaysia (SC)
When it comes to regulation, Moomoo MY (registered under the name Moomoo Securities Malaysia Sdn. Bhd.) is regulated by the Securities Commission Malaysia (SC). This ensures that Moomoo MY is always operating in Malaysia as per the guidelines from the local authority.
- CMC Fund Protection
If Moomoo Securities Malaysia Sdn. Bhd. goes bankrupt and you are unable to withdraw your funds, you are eligible to claim up to RM100,000 in compensation from the Capital Market Compensation Fund ("CMC Fund").
Market Risk of Investing in Cash Plus
While being a relatively stable investment, investing in money market fund via Cash Plus still presents exposure to market risk.
One such risk is the fluctuation in interest rates. As an example, if Bank Negara Malaysia (BNM) increases interest rates, MYR money market funds are likely going to generate higher returns. On the flip side, if BNM reduces interest rates, it’ll also affect the returns of money market funds as a result.
Is Cash Plus for you?
Personally, I like the fact that there are both MYR and USD versions of funds available in Cash Plus.
Quick deposit & withdrawal, alongside the ability to access the money in my MYR money market funds for trading purposes, make Cash Plus one of the most versatile cash management solutions that I've used so far.
That said, is Cash Plus for you?
To answer this question, it is best to first know what Cash Plus is NOT:
- Cash Plus does not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect stocks/mutual fund/robo-advisors-like returns.
- Cash Plus does not guarantee returns. Even though it invests in low-risk instruments, returns are still subjected to market fluctuation.
Hence, in my opinion, Cash Plus is great for:
- People with extra cash looking for the next investment opportunity, but wish to earn a stable return in the meantime.
- People looking for a flexible alternative to FD & typical savings account for general savings.
- People looking to save for a specific goal (eg. house, car, wedding).
- People with extra cash and want to save it for the short-term.
How to subscribe to Cash Plus?
Step 1: Before subscribing to Cash Plus, you will need to first have a Moomoo MY universal account. Click on the button below to open your account:
Step 2: Within the moomoo app, select 'Account', then choose 'Cash Plus'.
Step 3: Select the specific money market fund in Cash Plus that you'd like to invest in, and click 'Subscribe' at the bottom of the fund details page.
Next, insert the amount that you'd like to invest, read and agree to the relevant agreement documents, and click 'Confirm'.
Step 4: After confirming the purchase information, enter your transaction password to complete the subscription to Cash Plus.
Verdict: Use Cash Plus to earn competitive interest on your idle cash!
Moomoo MY is one of the most complete trading platform in Malaysia and the introduction of Cash Plus certainly makes it more versatile and complete.
Are you going to subscribe to Cash Plus? Which funds will be you choosing? Feel free to share with me in the comment section below!
Disclaimers:
All views expressed are the independent opinions of myself, which are not shared by Moomoo Securities Malaysia Sdn. Bhd. (“Moomoo MY”). No content shall be considered financial advice or recommendation. Moomoo MY links are included in this post, through which referrals are made and I may receive certain commissions. Please contact Moomoo MY for more information.
2% Dividend Tax in Malaysia - My thoughts as a serious dividend investor
As a dividend investor, the introduction of 2% dividend tax is certainly a key highlight of Budget 2025 for me.
In this post, I'd like to dive into more details of this new dividend tax, and share my 2 cents about how it might affect dividend investors like ourselves.
Meanwhile, check out my go-to broker that I use to build my Freedom Fund:
Context: What is this new 2% dividend tax all about?
Essentially, the new dividend tax is a 2% tax that will apply to people with annual dividend income exceeding RM100,000 starting 2025.
Based on my research, this tax will only apply to the amount above the RM100,000 threshold:
Example:
If your dividend income is RM120,000, the 2% dividend tax will be charged for RM20,000 - translating to a dividend tax of RM400 (RM20,000*2%).
Exemptions:
There are some exemptions to this new dividend tax, namely:
- Dividends from EPF.
- Dividends from unit trusts under Permodalan Nasional Berhad (PNB), such as Amanah Saham funds.
- Foreign-sourced dividend income
Dividend withholding tax (WHT) vs Malaysia 2% Dividend Tax: What are the differences?
A part where I think many dividend investors might be confused with are the differences between dividend withholding tax (WHT) and the newly introduced 2% dividend tax in Malaysia.
Essentially, the main difference between them is at which stage the dividend is being taxed.
| Dividend withholding tax (WHT) | 2% Dividend Tax | |
| When is the dividend is taxed? | Withheld and deducted at the company/fund level | Deducted at personal level. |
| Action required from investors | No | Yes. Declare & pay while filing personal income tax. |
| Tax % for Malaysians | 0% for Malaysian companies (10% for REIT) | 2% |
(i) Dividend Withholding Tax (WHT)
Dividend withholding tax (WHT) is withheld and deducted at the company/fund level. As such, when you receive your dividend from an investment charged with dividend WHT, the tax has already been deducted BEFORE it reaches you.
Simply put, there is no action required from the investor's side as dividend WHT is already settled by the company or fund that you invest in.
- Example: I invest in SCHD, a US-domiciled dividend ETF. As a foreigner, my dividend from SCHD is always deducted by 30% before reaching my brokerage account due to a 30% dividend WHT.
- Note: At the moment, the dividend WHT charged to Malaysians is 0% for dividends received from Malaysian companies (10% for REITs).
- Example: Let's say you invest in Maybank and Maybank declares RM0.30/share in dividends, you will get 100% of the RM0.30/share of dividends.
(ii) 2% Dividend Tax for Malaysians
On the other hand, the new 2% dividend tax is deducted at personal level. This means that Malaysians will need to track their dividend income from local companies, and pay for the 2% dividend tax should they exceed the RM100,000/year mark while filing for their income tax.
The pros & cons of implementing the 2% dividend tax instead of dividend withholding tax (WHT) in Malaysia:
- Pro: This 2% dividend tax is targeted only at Malaysians with an annual dividend of over RM100,000. Meanwhile, a dividend WHT would (generally) cover everyone regardless of the dividend amount.
- Cons: Malaysians will need to track their dividends and declare them for the 2% dividend tax while filing their personal income tax, which is additional work. Meanwhile, dividend WHT is deducted at company/fund level which requires no additional action from investors' side.
My thoughts on the 2% dividend tax
Initial thought: This 2% dividend tax is not going to affect most investors since it takes a sizable amount of capital to hit RM100,000 in annual dividend income.
Allow me to expand further:
- The capital you need to hit RM100,000 in annual dividend income depends on the dividend yield of your portfolio.
- Below, I share the capital required to hit RM100,000 in annual dividend income based on different dividend yield (%) of a portfolio:
| Portfolio annual dividend yield | Capital required |
| 4% | RM2,500,000 |
| 5% | RM2,000,000 |
| 6% | RM1,666,667 |
| 7% | RM1,428,571 |
Simply put, the capital required to achieve RM100,000 in annual dividend income will take time for most people to achieve.
Even at a 7% dividend yield (which is a pretty high yield for an investment portfolio), it takes more than RM1.4m to achieve it.
As such, in my opinion, the 2% dividend tax is not going to affect most people.
However, it'd be too irresponsible for me to end our discussion here.
What if there are serious dividend investors who are looking to live off dividends someday? For these investors, with time, hitting RM100,000 in dividend income is certainly possible.
2 ways to navigate around the 2% dividend tax for Malaysian dividend investors
If you are a serious dividend investor in Malaysia, here are 4 ways I can think of - which could help navigate through this 2% dividend tax:
#1 Consider adding foreign-listed stocks and ETFs to your dividend portfolio
For serious dividend investors, diversifying into foreign-listed stocks or ETFs is one of the most direct ways to navigate around this 2% dividend tax.
Since this 2% dividend tax applies only to dividends received from local private and public listed companies, foreign-listed stocks and ETFs can be a good addition to our dividend portfolio.
Since tax exemption for Foreign-Sourced Income (FSI) is proposed to be extended until 2036 under Budget 2025, it is one way to prevent our dividend income derived from locally-listed stocks from going beyond RM100,000 annually.
Investing in foreign-listed stocks and ETFs: Be mindful of dividend withholding tax (WHT)
Despite that, please note that investing in certain overseas markets may come with dividend withholding tax (WHT).
For instance, there's a 30% dividend WHT on US-listed stocks and ETFs. However, some markets offer attractive dividend WHT, such as 0% for Singapore and Hong Kong-listed stocks.
Click HERE to check out my article on dividend WHT.
#2 Consider transitioning partially or completely to EPF or Amanah Saham funds
Another way Malaysian dividend investors can work around the 2% dividend tax is to diversify, or transition their dividend portfolio - be it partially or fully, to EPF (self-contribution) or Amanah Saham funds once the RM100,000 annual dividend is achieved on their dividend portfolio.
Both dividends from EPF and Amanah Saham funds are excluded from the 2% dividend tax.
- EPF has been paying decent dividends between 5.20% - 6.90% (2016 - 2023).
- Meanwhile, Amanah Saham fixed-price funds such as the Amanah Saham Malaysia (ASM) have been delivering returns between 4.00% - 6.30% (2016 - 2023).
2 minor downsides:
2 downsides I could foresee from this approach are:
- By investing your money for dividends on EPF or Amanah Saham funds, you'll have to give up potential capital gains from stocks, which could be an opportunity cost that would matter to some investors.
- EPF self-contribution has a limit of RM100,00 per year, while Amanah Saham fixed-price funds have limited units - so both EPF and ASNB funds have their respective limitations.
Arguments around the 2% dividend tax in Malaysia
From my research, I found 2 key arguments for the 2% dividend tax which is related to dividend investors:
#1 The argument for double taxation
Right now, Malaysian companies are paying 24% of corporate tax on their net profits before distributing dividends, while dividends are tax-free for shareholders.
However, under Budget 2025, an additional 2% dividend tax is charged on the shareholders' side. Hence, this is debated as an extra layer of tax on top of the 24% corporate tax paid on the companies' side.
#2 Tracking dividends can be complicated for investors with a diversified source of dividend income
For investors/shareholders that generate dividend income from various sources, such as dividends from private companies and those with investments with multiple stock brokers, tracking dividends accurately could be more difficult.
At the moment, there is no easy way for these groups of people to track their dividends except for doing it manually
Verdict: "Should I continue to invest for dividends?"
Despite the introduction of 2% dividend tax for Malaysians, I think it should not deter us from building our passive income from the stock market.
Personally, hitting a level of passive income in life where I have the freedom to:
- Prioritize my family over work when the time comes (eg. having kids, aging parents);
- Say 'No' to projects or work opportunities that do not resonate with me;
- Travel or take time off without having to stress about money or income.
Achieving this level of freedom in life is so important to me that this 2% dividend tax will not bother me too much.
I hope this makes sense! Feel free to leave your questions in the comment section below if you have any!
Disclaimers:
Any of the information above is produced with my own best effort and research.
This post is produced for general information purposes only. It is not intended to constitute professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.
The inclusion of Interactive Brokers’ (IBKR) name, logo or weblinks is present pursuant to an advertising arrangement only. IBKR is not a contributor, reviewer, provider or sponsor of content published on this site, and is not responsible for the accuracy of any products or services discussed.
2 SECRET reasons that move gold price! - Part 2
Gold is one of the most precious commodities in the world.
Not only gold is rare, but it is also very durable. It doesn't rust, it doesn't tarnish, and you can bury your gold and come back in 50 years (or 5,000 years) and it would still be unchanged.
However, in my previous post, I used past data to prove that gold is not an ideal hedge against inflation, nor it is a stable investment:
That said, gold is an excellent insurance within an investment portfolio when major asset classes like stocks and bonds are tumbling. In other words, gold tends to hold up well when the market gets tough - just look at 2022:
In this post, I want to answer an important question:
If inflation has minimal impact on gold's performance, what actually moves gold price?
If you are looking to invest in gold, this will give you a solid insight into why gold price behaves the way it does!
RELATED POST: Part 1 - Why you need to buy gold (not inflation)
2 underrated indicators that drive gold price
The market is a complex place and there are many reasons that drive the price of gold.
In this post, I want to break down 2 less-talked-about (yet crucial) indicators that move the price of this precious metal:
#1 The health of the banking sector
Banks are an important part of the economy, as they create capital (eg. loans) and provide liquidity to the market.
Therefore, a healthy banking sector indicates a healthy economy.
In this case, the banking sector has an inverse correlation with gold prices. This is because investors tend to flock to gold when there is a negative perception towards the economy.
Check out how gold price has a tendency to move in the opposite direction against the banking sector:
Whenever the banking sector suffers, it has had a positive impact on gold prices as investors are prepared for economic weaknesses.
The health of the banking sector is, therefore, a leading indicator of gold prices.
Try this on your own:
Using my preferred charting platform TradingView:
- Firstly, search for the ticker for gold 'GLD'.
- Next, click the '+' symbol, and search for the ticker 'BANK' which represents the banking sector in the US.
- Right-click the price axis and change it from 'Regular' to 'Percent'.
RELATED POST: TradingView beginner's guide - my favourite charting platform!
#2 Real Yield
Real yield refers to the interest that government bonds pay to investors, minus the expected/actual inflation rate:
Real Yield = Interest from government bonds - Expected or Actual Inflation Rate
A positive real yield means the interest from bonds beats inflation. A negative real yield implies that the interest from bonds is not able to cover inflation.
In this case, real yield tends to have an inverse relationship to gold.
Why so?
- Because when real yield is rising, there is an opportunity cost to investing in anything other than interest-paying assets like bonds.
- Since gold DOES NOT pay interest, that makes the opportunity cost of holding gold much higher, thus suppressing the price of gold.
- Meanwhile, when real yield is dropping, the returns from bonds become less attractive.
- As such, investors will be inclined to take more risks by investing in assets that do not pay interest, such as gold. This will usually push the price of gold in a positive direction.
Try this on your own:
- To start, click HERE to access data for the 10-year US treasury yield graph.
- Select 'Edit Graph'
- Under 'Customize Data', select '10-Year Breakeven Inflation Rate', then click 'Add'.
- Under 'Formula', type 'a-b'. Then, click 'Apply'. You will get the graph I used in this post.
3 recommended ways to invest in gold
Below, let me recommend 3 ways to invest in gold without having to store physical gold:
Method 1: Invest in local gold ETF via Rakuten Trade
The TradePlus Shariah Gold Tracker (code: 0828EA) is a Malaysia-listed Exchange-Traded Fund (ETF) that tracks gold price.
This gold ETF is shariah-compliant and is backed by physical gold bars, ensuring that it tracks the price of gold with precision.
At a low annual fee of 0.56% (trustee, management, custody fees), it is one of the most convenient ways for Malaysians to invest in gold without having to store physical gold!
You can start investing in the TradePlus Shariah Gold Tracker (code: 0828EA) via Rakuten Trade.
RELATED: Rakuten Trade long-term review
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p.s. You can also invest in US gold ETF (Method 2) via Rakuten Trade as they also offer access to the US stock market!
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Method 2: Invest in US gold ETF via Interactive Brokers (IBKR)
You can also invest in gold ETF that is listed in the US, such as the SPDR Gold Shares ETF (ticker: GLD).
GLD is also backed by physical gold so it can reflect the gold price in the closest precision.
Compared to Malaysia-listed gold ETF, GLD is quoted in USD and has a lower annual estimated fee of 0.4%.
If you prefer to have your gold investments in USD, GLD is the way to go.
You can invest in GLD via Interactive Brokers, my preferred platform to buy global stocks:
READ MORE: Interactive Brokers Long-Term Review
Method 3: Invest in gold ETF via Versa Gold
If opening a stock brokerage account overwhelms you, and you want a simple-to-use platform to buy gold, you can consider checking out Versa Gold from Versa.
With Versa Gold, you are essentially investing in TradePlus Shariah Gold Tracker from Method 1 above, but at a much simpler to use Versa app.
In addition, Versa Gold requires a low minimum investment amount of RM100, which is very beginner-friendly if you want to try investing in gold.
No Money Lah Verdict + Takeaways
I hope this post is helpful in showing you what kind of fundamental indication tends to move gold price!
Having this knowledge can help you understand why gold moves and responds the way it does - and it is highly insightful as an investor.
So, would you consider investing in gold? Why or why not?
Feel free to share with me your thoughts in the comment section below!
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.
This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.
The stillness of becoming - My journey of building dividend income from scratch
The Chinese bamboo tree takes 5 years to grow. It has to be watered and fertilized in the ground where it’s been planted every single day. It doesn’t break through the ground for 5 years. But once it breaks through the ground, it grows 90 feet tall in 6 weeks.
"The stillness of becoming" is a quote I came across lately.
And I love it - because similar to bamboo, it reflects our inner resilience in the journey of achieving our goals.
Even when the outcome is yet to be seen.
My slow & steady Freedom Fund Journey
I started building my Freedom Fund (dividend portfolio) from scratch a few years ago.
Because I knew the importance of a stable and low-maintenance dividend income (ie. passive cashflow) in an uncertain world.
- What was my dividend in 2020? RM316 (RM26/month)
- 2021: RM1397 (RM116/month)
- 2022: RM2079 (RM173/month)
- 2023: RM3924 (RM327/month)
- 2024: RM7135 (RM595/month)
- As of May 2025, RM3035.69 (RM607/month)
My eventual milestone? An annual dividend of RM48,000, or RM4,000/month.
Every capital invested now will be my foundation, the roots, to my Freedom of Choice in life.
- To say 'No' to uninspiring projects/work
- To have the freedom to spend time with my loved ones
- To live a life without having to ask for anyone's permission
Do you have the humility to start small & grow steadily?
Every action you take is a vote for the person you wish to become.
- James Clear
Simply put, to get the result you want, you first have to become the person with the habit of getting the result.
The biggest challenge? Our willingness to start small and grow steadily:
- We'd despise a 10-min workout session because it is too short
- We'd rather not read 5 pages of a book because it is not meaningful
- We'd rather not invest the extra $50 because we think it is too insignificant
Everyone wants results; few are willing to take the very first step - showing up.
'The stillness of becoming' = The humility to show up
Stepping into my 30s got me to realize something:
It is more important to build the proper foundations in life than to chase quick results.
This means going back to the basics. Like learning to do proper workouts, building quality relationships with my readers (you all!), and growing my Freedom Fund steadily.
Not all progress is loud. But one day, it all adds up.
And just like the bamboo, when the time is right—your growth will be unstoppable.
3 questions to ask yourself before quitting
20 years ago (2005), Steve Jobs delivered his famous 'Stay hungry, stay foolish' Stanford commencement address.
One specific part of his speech still gets me thinking to this day:
When I was 17, I read a quote that went something like, “If you live each day as if it was your last, someday you’ll most certainly be right.”
It made an impression on me. And since then, for the past 33 years, I have looked in the mirror every morning and asked myself, “If today were the last day of my life, would I wanna do what I am about to do today?” And whenever the answer has been 'no' for too many days in a row, I know I need to change something.
In 2018, this was the video I watched before quitting my (one and only) full-time job to pursue content creation at No Money Lah.
Because 'no' has been my answer for too many months.
This week, I dedicate this newsletter to:
- Friends who are burnt out at work, and/or want to quit a toxic work culture
- You can't imagine yourself doing this in the next 10, 20 years
- Your body and mental state need a break and rest from your intense workflow
The big question: How can you quit without feeling fear and anxiety?
Here are 3 questions to ask yourself before quitting:
#1 Can you afford to quit?
Money doesn’t solve everything, but in this case - being prepared will put you in the position of choice.
Ask yourself:
- Do I have at least 6 months of living expenses saved? 12 months would be even better — and ideally, this should exclude your emergency fund.
The good news? Once you quit, your expenses will likely drop.
No more overpriced lunches, less money spent on transport and expensive coffee to survive soul-crushing mornings.
💡TLDR: Having enough savings will give you the space to rest, heal, and explore without being desperate for the next job.
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RELATED: Freedom Floor: How do you know you've achieved Freedom of Choice in life?
#2 Is your current job affecting your mental health?
If your current job environment is drastically changing who you are as a person, where...
- You find yourself not smiling anymore
- You have trouble sleeping well
- Worst, you find yourself having dangerous or dark thoughts
Leave.
I am sure people who care for you will be more than glad to help you through this transition.
💡 Remember, no job is worth trading for your mental health.
#3 What are you going to do after quitting?
Ask yourself:
- Do I have a general plan or direction for my future path?
Generally, we'll experience 3 phases upon quitting:
- Honeymoon phase: You enjoy the no-stress life of waking up without an alarm.
- Anxiety phase: You get anxious seeing your peers moving forward in their careers & lives - while you are still unsure about what's next.
- Recovery phase: You now have a direction, and are working towards the new chapter in your career.
The reality of the Anxiety phase tends to hit harder for people who quit without a plan.
Hence, do this this before you quit:
- Decide on 3 goals that you'd like to pursue during this phase of life.
- It could also be courses to upskill yourself for the next phase of your career.
- You can also use this time to pursue activities that you are interested in.
- Also, consider the skills you've developed from your job. Are there skills that you can apply in your field of interest to create different possibilities?
Having a direction upon quitting will reduce your time in the Anxiety phase, and move you to Recovery phase earlier.
💡TLDR: Use your time with intention - be it to heal, or to improve yourself to discover new possibilities in life.
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p.s. I recommend reading The 4-Hour Workweek by Tim Ferriss as you reflect on your career path.
Who shouldn't quit (yet)
- If quitting means you won’t be able to eat or pay rent - you need a financial safety net first.
- If your job still gives you fulfillment, stability, and growth - you probably just need a holiday.
So… Should You Quit?
Not necessarily.
To be clear, this newsletter isn't to encourage quitting.
But you can prepare, so you have the CHOICE to do so when needed.
Quitting is not the goal. The goal is to build a life that feels aligned and sustainable.
Start laying the bricks today - financially, emotionally, strategically.
So when the time comes, you won’t be jumping off a cliff.
Rather, you’ll be walking through a door you built yourself.
💭 I’d love to hear from you:
Have you ever thought of quitting your job? What’s stopping you - or what helped you take the leap?
Let me know by leaving your reply in the comment section, or DM me on IG - I read every message.
Cheers,
Yi Xuan
The REAL reasons why you need to invest in gold (not inflation) - Part 1
For the longest time, investors buy gold to preserve wealth as it is thought to be a stable investment.
In fact, when the Malaysian government granted users special withdrawals from EPF (our retirement fund) in the past few years, many Malaysians went on to - you guessed it - buy gold.
The question is: Is gold a good investment (it depends)? Is gold really stable (nope) and protects your wealth against inflation (...and nope)?
In this post, let's debunk a few myths about gold, and why I think most investors would still be better off investing in gold!
RELATED POST: 2 SECRET reasons that move gold price!
Highlights
- Gold is not a stable investment, and shows little signs that it is a good protection against inflation.
- That said, gold is a solid diversification from assets like stocks and bonds due to its low correlation with these assets.
- Holding gold in an investment portfolio helps with psychology as it helps reduce downside impact, and improve recovery time from a drawdown.
Interested? Slide down to learn more about why you need to invest in gold!
2 wrong reasons why people invest in gold:
Reason 1: "Because gold is a stable investment."
But is it really?
Check out the visual below where we compare the returns of different asset classes for the past 50+ years.
What can we learn from the visual:
- It is not hard to see that gold is actually pretty volatile over the years compared to bonds and home prices.
- If you observe closely, you'd also notice that gold tends to swing to the negative territory a lot more times than the S&P500 (US stocks), and Real Estate Investment Trust (REIT).
From this, we can debunk with confidence that gold is definitely not as 'stable' as most people assume.
Reason #2: "Because gold protects my wealth against inflation."
Another common reason why people invest in gold is to protect themselves against inflation.
However, this perception is far from the truth in reality.
Below, check out how gold performed in the past when inflation in the US is over 4%:
From what you can see, buying gold to 'protect' your wealth against inflation depends largely on luck - because gold can fluctuate both ways EVEN when inflation is high.
So, what does this tell us?
Essentially, on its own, gold's performance is hardly impressive and it does not even protect investors well against inflation.
However, you should not dismiss gold because of the reasons above. In fact, when done right, investing in gold can help you sleep well at night - especially when things get tough.
2 REAL reasons why you (still) need to invest in gold:
#1 Low correlation
Generally, gold has a low correlation when compared to major stocks and fixed-income assets.
In other words, this means when stocks or bond prices tumbled in price, gold tends to hold its ground well, or is faster to recover.
2022 is a solid example:
Check out how gold correlates to equities (stocks) and fixed-income assets (eg. bonds) below:
#2: Gold as a portfolio diversifier
Why is gold's low correlation with other assets important?
This is because while gold does not produce impressive returns on its own, it is an excellent risk diversifier in an investment portfolio consisting of stocks and bonds.
Simply put, gold is highly effective in helping to reduce the downside risk of your entire investment portfolio.
Let's look at an example below:
Scenario: Gold as a portfolio diversifier in a 100% stocks portfolio
In this example, let's imagine yourself investing in a 100% stocks portfolio against an 80% stocks-20% gold portfolio from 1972 - Jan 2023:
We will invest $500 every month in each of the portfolios and see what happens:
What can we infer from the table above?
- Surprisingly, there is only minimal difference in the annual returns (CAGR) between each portfolio in the long run. (22.68% vs 22.3%)
- However, having gold in a stock portfolio would help reduce the max drawdown you'd experience by a significant margin! (-50.57% vs -38.74%)
To give you a better perspective, check out how fast your investments would recover in the past 2 stock market crises (2007 - 2008, 2000 - 2002) if you have gold in your portfolio:
For instance, in the Global Financial Crisis (2007 - 2009), a 100% stock portfolio would need about 3 years and 1 month to recover, while having 20% gold in the portfolio would take 1 year and 10 months to recover.
As an investor that has gone through a tough year in 2022, I'm sure you'll know how valuable a 15-month faster recovery means to your confidence and mental health.
In other words, having some gold in your portfolio can help you sleep better at night, especially during difficult times!
3 recommended ways to invest in gold
Below, let me recommend 3 ways to invest in gold without having to store physical gold:
Method 1: Invest in local gold ETF via Rakuten Trade
The TradePlus Shariah Gold Tracker (code: 0828EA) is a Malaysia-listed Exchange-Traded Fund (ETF) that tracks gold price.
This gold ETF is shariah compliant, and is backed by physical gold bars, ensuring that it tracks the price of gold with precision.
At a low annual fee of 0.56% (trustee, management, custody fees), it is one of the most convenient ways for Malaysians to invest in gold without having to store physical gold!
You can start investing in the TradePlus Shariah Gold Tracker (code: 0828EA) via Rakuten Trade.
RELATED: Rakuten Trade long-term review
--
p.s. You can also invest in US gold ETF (Method 2) via Rakuten Trade as they also offer access to the US stock market!
Method 2: Invest in US gold ETF via Interactive Brokers (IBKR)
You can also invest in gold ETF that is listed in the US, such as the SPDR Gold Shares ETF (ticker: GLD).
GLD is also backed by physical gold so it can reflect the gold price in the closest presicion.
Compared to Malaysia-listed gold ETF, GLD is quoted in USD and has a lower annual estimated fee of 0.4%.
If you prefer to have your gold investments in USD, GLD is the way to go.
You can invest in GLD via Interactive Brokers, my preferred platform to buy global stocks:
READ MORE: Interactive Brokers Long-Term Review
Method 3: Invest in gold ETF via Versa Gold
If opening a stock brokerage account overwhelms you, and you want a simple-to-use platform to buy gold, you can consider checking out Versa Gold from Versa.
With Versa Gold, you are essentially investing in TradePlus Shariah Gold Tracker from Method 1 above, but at a much simpler to use Versa app.
In addition, Versa Gold requires a low minimum investment amount of RM100, which is very beginner-friendly if you want to try investing in gold.
No Money Lah Verdict + Takeaways
- As an individual asset, gold's return is not impressive, and it does not protect against inflation.
- However, thanks to gold's low correlation with assets like equities and bonds, gold can be a solid diversification in a portfolio.
In my opinion, investing in gold is a form of insurance for a portfolio. While assets like stocks may tumble in fear or market uncertainties, investors tend to flock to gold in such times.
In a way, owning gold as part of your portfolio keeps you sane in tough market conditions.
So what do you think? Would you consider investing in gold with this new perspective from now on?
Feel free to share with me your thoughts in the comment section below!
Disclaimers
Any of the information above is produced with my own best effort and research.
This post is produced purely for sharing purposes and should not be taken as a buy/sell recommendation. Past return is not indicative of future performance. Please seek advice from a licensed financial planner before making any financial decisions.
This post may contain promo code(s) that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my referral link.
The core skills of 2030: The future belongs to people that create 'possibilities'
Hey guys,
What do you think are the most important skills to have in the next 5 years?
Recently, I came across a chart online titled 'The Core Skills of 2030' by the World Economic Forum.
I want to highlight the top 10 core skills from this chart - and a surprising finding that I'd like to share with you.
Top 10 core skills in 2030:
- AI & Big Data: How do you implement AI in your day-to-day workflow?
- Tech Literacy: How do you adapt to ever-growing AI tools and platforms?
- Analytical Thinking: Are you able to break things down, spot logic, identify bias, and question findings from AI?
- Creative Thinking: How do you find new perspectives and angles while solving problems?
- Resilience, Flexibility & Agility: In a fast-changing world, can you adapt quickly after a setback?
- Motivation & Self-awareness: Can you manage and motivate yourself?
- Leadership & Social Influence: Are you someone people want to follow or collaborate with?
- Curiosity & Lifelong Learning: How open are you to learning and discovering new things in life - even when you are starting from zero?
- Systems Thinking: Can you see the big picture and connect insights?
- Talent Management: Can you see potential in others - and yourself?
Notice a pattern?
(1) It's not about what 'hard skills' you have anymore.
Because for most things like maths, programming, designing - AI can do faster (and soon, better) than you.
In other words, these skills can't be your edge anymore.
Crazy isn't it? These are all the things we learned in school and university.
So, what did I discover?
(2) The people who'll thrive in the future are people who can create 'possibilities'.
I learned that the future belongs to people who:
- explore curiously,
- learn intentionally,
- reflect consciously,
- and never give up, regardless of setbacks
With AI, these people can pick up multiple skills faster than ever, and will produce outside-of-textbook solutions - creating unique value to the society.
The future belongs to people who create possibilities. (think: using sound and light to treat Alzheimer's)
So, how do we prepare ourselves?
(3) You are your most valuable asset
As you think about your own path, ask yourself:
- What skill am I already growing, even without noticing?
- What’s one area I feel drawn to explore—not out of fear, but curiosity?
- What’s no longer serving me that I can gently let go of?
The most 'future-proof' thing isn't a skill - but the quality of a person (you) to keep learning and evolving.
Stay curious, and happy learning!
--
p.s. For books on thinking, I recommend Six Thinking Hats by Edward De Bono
My top 5 tools to build dividend income (Ranked from the least to most passive)
"I want to build my Freedom Fund (dividend portfolio), where do I start?"
I often receive questions like this from friends & readers.
In this newsletter, I'd like to cover my top 5 tools to build dividend income - from the least to the most passive investments:
#1 Dividend-Paying Stocks (Low-Maintenance Score: ⭐)
- Example: Maybank, Tenaga Nasional, DBS Bank (and many more)
- Dividend Yield: 2% - 7% on average
Pros:
- Availability: The MY and SG stock markets offer plentiful quality stocks that pay competitive dividends ranging from 4% to 7%.
- Voting rights: Direct ownership of stocks means you can participate and vote in AGM.
- Concentrated bet: By picking the right stock, you have the potential to outperform the overall stock market.
Cons:
- Individual stock risk: A company can screw up and never recover.
- Frequent monitoring is required for earning reports and industry news.
#2 REIT (Low-Maintenance Score: ⭐)
- Example: IGB REIT, Sunway REIT, CapitaLand Ascendas REIT
- Dividend Yield: 4% - 7% on average
- Guide: How to find quality REITs in Malaysia
Pros:
- Collect rent (dividend) from quality real estates: From malls like Mid Valley, Sunway Pyramid, to office buildings from UOA.
- Stable dividends: REITs generally have multi-year leases = A stable baseline for dividends.
- Professional management: No need to manage the properties yourself. REIT managers will handle everything from tenant management to maintenance.
Cons:
- Lower growth potential: REITs are required to pay at least 90% of their income to shareholders = Less capital to grow the biz.
- Individual REIT risk: Like stocks, a REIT can screw up and never recover.
- Hands-on required: Frequent research & monitoring are required.
#3 Dividend ETF (Low-Maintenance Score: ⭐⭐⭐)
- Example: SCHD, FUSD, USCC.U
- Dividend Yield: 2% - 12% on average (depending on the type of ETF)
- Guides:
Pros:
- No need to pick stocks: Most ETFs have a rule-based strategy to screen for stocks.
- Instant Diversification: ETFs hold a basket of stocks instead of individual stocks.
- Different dividend ETFs available: REIT ETFs, US ETFs, Covered Call ETFs, etc
Cons:
- Fewer ETF choices in MY and SG: Have to explore the ones listed in the US, London, and Canada instead.
- No say over which individual stocks to buy
- No direct Voting Rights
- Still requires due diligence: You must research previous yield, underlying ETF methodology, and whether the ETF’s sector exposure fits your risk profile.
#4 EPF (Low-Maintenance Score: ⭐⭐⭐⭐⭐)
- Dividend Yield: 4% - 6% on average
- p.s. Only available in Malaysia
Pros:
- Ultra-Passive: EPF fund managers handle investment decisions on your behalf
- Relatively Stable Returns
Cons:
- Yearly dividend payout instead of monthly/quarterly.
- Not flexible (except for Account 3): Most of your money is locked in until retirement.
- No say over what to invest in.
#5 Amanah Saham Fixed-Price Funds (Low-Maintenance Score: ⭐⭐⭐⭐⭐)
- Example: ASB, ASM (Only available for Malaysians)
- Dividend Yield: 4% - 5% on average
- Guide: Intro & guide to ASNB
Pros:
- Ultra-Passive: Fund managers handle investment decisions on your behalf.
- Relatively Stable Returns: Earn a respectable and reliable yield
Cons:
- Yearly dividend payout instead of monthly/quarterly.
- Limited availability for non-Bumiputera eligible funds.
- Lower return vs the stock market in the long run.
Which one is for you?
- You like to be more hands-on in investing: Individual stocks and REITs might be for you.
- You like to be more passive & diversified, yet still enjoy the growth & dividends from the market: ETFs might suit you.
- You want something that is truly 'set-and-forget': EPF and ASNB Fixed Price Funds are the way to go.
Also, there is no fixed rule that you can only go for one.
For instance, I build my Freedom Fund mainly around ETFs, with REITs and stocks as a complement.
Disclaimer: Not buy/sell advice - please do your due diligence before investing!
Reminder: Building Freedom Fund takes time
Regardless of the tool, it is important to know that building a Freedom Fund from scratch takes time.
The key here is consistency: Every contribution to your Freedom Fund is one step towards building a life where you get to live on your own terms.
Slowly, but surely.
p.s. Are there any other dividend tools that I missed out on in this newsletter? Share them with me by sharing in the comment section below!
Disclaimer:
None of the information contained herein constitutes a recommendation, promotion, offer, or solicitation of an offer to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Investment involves risks. Investors should obtain their own independent financial advice and understand the risks associated with investment products and services before making investment decisions.
Any discussion or mention of an stocks or ETF is not to be construed as a recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.