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Investing for the first time? Start here!

HeyAlfred is partnering with StashAway; a digital wealth management platform designed to build and protect your wealth, all while making it super easy for every investor whether you’re putting in RM1,000 or RM50 million. Investing is not a one-size fits all and every investor has to start somewhere. Discover investment basics, simple rules to follow and make the best out of your extra cash. If you’re looking for a sign to start investing, this is THE series for you. 

Introduction

Legendary investor Warren Buffet defines investing as, “… the process of laying out money now to receive more money in the future.”

Now you may be thinking, “Ya ya so easy for Warren Buffet to say lor! What if I don’t HAVE that kind of money to LAY OUT in the first place?!”

Lucky for you, investing no longer requires you to be filthy rich to start! Even RM1,000 can give you a wide range of options to choose from! BUT FIRST, here are some golden rules to follow: 

1. Pay off high-interest debt (like bank loans, credit card) – you don’t want whatever profit you get from investing to have to go into paying off these debts! Generally any debts with interest 8% and higher should be paid off ASAP 💨.

2. Have at LEAST 6 months’ worth of living expenses in savings before you start investing. As pessimistic as this sounds, you should only invest money you are prepared to lose i.e. money you don’t actually need to survive. 

3. Make sure you have insurance! Especially for things like critical illness, disability, hospitalisation.

Now that we’ve got that out of the way, let’s take things a little further.

You must be THIS RICH to enter 🙃

Traditionally, financial advisors require clients to have a large minimum sum to start investing.  For instance, a RM 250,000 sum is required to invest in a certain bank (who shall not be named) in Malaysia! That’s a lot of moolah.

Traditional investment platforms aren’t really tailored to a person’s needs – you need a 🍑load of knowledge and a 🍑load of money in order to adapt to the volatilities of the market, and actually make substantial returns on your investment. You’d also pay someone to manage your portfolio, and this fund manager typically charges a 3-5% sales charge, on top of a 1-2% management fee for a total average annual fee of 3-5%.

If you’re already thinking, “Anddd that’s the end of my investment journey!”, don’t go just yet! We got a good solution.

Enter robo-advisory platforms 🤖. 

Robo-Investing: The Lazy Smart Way To Invest

Digital platforms let you access personalised investment products, at a fraction of traditional costs. StashAway is a personal favourite of ours (Did we also mention they’re our partners? 🌝), so let’s take them as an example.

Investors pay StashAway an annual management fee of 0.2-0.8%, and no sales charges (woohoo!). Then there’s the ETF (Exchange-Traded Fund) manager’s fee of about 0.2% – you pay LESS than a total of 1% per annum, meaning you save about 2.5-4.5% in fees compared to traditional platforms.

There’s also NO minimum amount required to invest, so it’s great for everyone not just newbies. Even for people who have more money to invest, invest regularly on a monthly basis and are looking for a lower-cost alternative to traditional institutions.

MATH TIME!

So let’s say you invested RM2,000/month in an investment with 6% gross returns. Here’s what that would look like in 30 years:

That RM 600,000 difference bruh! Almost 50% MORE than your traditional platform!

Using sophisticated algorithms, the robo-advisor does the data crushing for you. And it’s super easy to track what’s happening: in the StashAway app, you can check on your portfolio performance, track your goals and even make profile updates at any time.

Automated Rebalancing 

Alright, the supreme benefit of robo-advisory is in the word: automation. Portfolios made easy for you, all with just a touch. 

In the context of traditional investing, rebalancing involves buying and/or selling and using the proceeds to buy another asset (or several) in order to get a good asset allocation. The purpose of this is to maintain a good risk-to-reward ratio in an investment strategy, and doing it periodically will improve returns and reduce the volatility of your investment. 

(Same same, I want to invest in pringles too *not in any way affiliated with Pringles™️)

The problem with this? It. Is. So. MAFAN! 

The process is tedious, and can put off someone who hasn’t even started investing yet!

We got you. Robo-advisors take care of this process so you won’t have to worry about whether you should make changes to your portfolio: it’s automatically managed and intelligently adjusted to grow and protect your wealth through any ups or downs.

For example, StashAway has its unique technology that utilises Economic Regime-based Asset Allocation® (ERAA®) as its investment strategy.  ERAA® is designed to manage your money through different economic and market cycles, which helps maximise your returns at the risk level chosen by you. 

It’s like maintaining your car. You can’t leave it running for years without taking it to service, even if it’s the most reliable car on the market. Going for robo-advisors is like having your car drive itself to be serviced, whenever required. How cool is that?!

Conclusion 

Now don’t get us wrong, traditional investing platforms aren’t all bad – some people get a thrill out of it and they ENJOY the process of manually monitoring their investments. 

If you’re NOT there yet, you should consider starting with robo-advisories. It’s great for:

  • Beginner or young investors: While you may be young and inexperienced, robo is a good way of investing in a sophisticated way.
  • Investors looking for an accessible, low-cost option to manage their funds: if you have a simple asset allocation – you may not need guidance from a financial advisor to continually rebalance your account. 

And hey whaddya know, HeyAlfred is now in an exclusive partnership with StashAway! (it’s getting serious guys, we think they might propose soon 💍😍💍)

StashAway was the first digital wealth management platform to be licensed by the Malaysian Securities Commission, so you know they’re safe and legit! 

Click here to find out more about this exclusive offer or ask Alfie, our in-app chatbot! 🤗👋 Strap in, and let’s get started on our investing journey!