Portfolio - Freedom Fund

Investing in Malaysia is Simple – Get Started!

By Leigh
Updated February 18, 2025 Filed Under: Investment, FI/RE, Portfolio - Freedom Fund 26

Do you want Financial Freedom? Save, Invest and Start Early.

There are countless ways to get rich here in Malaysia. For the average and majority of Malaysians, I urge you all not to get caught up in the many get-rich-quick shortcuts out there. Instead, opt for the winding but proven path of hard work, savings and consistent diligent investing.

The crucial and key thing is to get started and get started early. It’s best to save and begin investing in Malaysia at an early age. You should even start saving and investing on behalf of your kids the moment they’re born to give them an edge in this dog-eat-dog world. And trust me, saving as little as RM100 a month for your children the day they’re born will help them start off with about RM50K in their accounts on their 18th birthday. If I had RM50K to start with, I’m sure my portfolio would be much much bigger now. Start early!

Yes, saving money isn’t fun. Investing in boring index funds and the stock market for the long term isn’t sexy. And yes, it takes years, decades even, to build wealth this way. But trust me, it’ll all be well worth your while when you realize you have enough passive income to sustain your lifestyle.

One advantage I had was learning about the importance of investing at an early age. I was fascinated with the concept of passive income during my university days and started learning how to value stocks. I read tons of books on investments and decided at an early age to embrace frugality and diligent investment. I devoured and poured through books on investing and personal finance. Every day I checked the share prices of stocks I was watching in the newspaper. I loved it!

Investing isn’t just for the Rich

Because I’ve been asked this a thousand times over, I’d like to emphasize – Investing is simple and you can start with ANY amount. The crucial part is just to GET STARTED!

As of 2018, I’m 28 this year with a portfolio (my Freedom Fund) of RM300,000 in stocks. I started out with just over RM10K saved up from my university days. Too many people around me have put off their finances because they claim not to know a thing about investing. The most important step for you to take is to get started. Save up, pick a stock you can understand and invest in it. It doesn’t matter if you have a million dollars or only RM1,000. Just get started.

In fact my very own portfolio is built on frugality. Make savings a priority, get your emergency fund set up, and then get to investing!

Investing in Malaysia is Simple - Get Started!

Investing Analogy

Here’s an analogy on investing I love.

Let’s say you are a farmer, you buy a little baby calf for RM2,000. It eats a lot of grass and over time grows into this big, beautiful, strong cow that’s now worth RM10,000. On a nice Sunday morning, you walk your cow down to the farmer’s market in town, and you sell it for RM10,000. Boom, an RM8,000 profit (and you didn’t even have to pay for the grass). This is your capital gain. Now, in the period before you sold off your cow, your cow produced milk which you consumed and sold off to your neighbours. This is your dividends.

Your cow – Stocks (Asset)
Your milk – Dividends (Cash flow)

Investing is really that simple, and you can start with any amount of money.

Now, let’s take it to another level. You could’ve kept that RM2,000 you had at the beginning in your savings account. Over 20 years based on the 3% interest rate banks are paying now, your RM2,000 is now worth RM3,612.22.

OR, you can invest RM2,000 in the stock market. The KLSE index rose from 838 to close at 1813 on 29th November 2013 from 4 years ago for a total gain of 116%. On average, the compounded annual growth (CAGR) each year is 11%. Historically the markets around the world earn about 10% per annum, so here’s how much RM2,000 might be worth over 20 years, compounded at 10% per annum – RM13,455.00. (Note, this is the simplest illustration and example I could come up with, of course, many other factors come into play when one invests.)

Now compare investing to saving. Which one of these looks like the option to build wealth? Right, investing.

Mutual Funds and Their Damned Fees

You’ve probably heard of investments like mutual funds, target date funds, or index funds. You might even own some of them. All of these funds have fees (also called the expense ratio), and if you’re smart you can save money on them.

Dividend Magic - Mutual Fund & Unit Trust Fees

Mutual funds are the worst (especially in Malaysia) because they rarely beat the market and usually have the highest fees, the average in Malaysia is a whopping 3%, and I’ve seen some as high as 5%. These might all seem like insignificant numbers, so why does it even matter? It matters. Here, I’ll do some calculations to show you.

Let’s say you invest RM10,000 and earn 7% over 50 years.

0.0% fee: RM10,000 grows to RM294,570
1.0% fee: RM10,000 grows to RM184,202, and you lose RM110,369 in fees
2.0% fee: RM10,000 grows to RM114,674, and you lose RM179,896 in fees
3.0% fee: RM10,000 grows to RM71,066.83, and you lose RM223,503 in fees

I cannot emphasize how fees can kill your investments. I hope the above illustration will get through to my fellow investors out there. With a 2% fee, you’re essentially losing more than 50% of your investment to fees alone. What’s even worse is that the above example assumes you’re earning a 7% return p.a., what if you’re losing money? The funds still collect the fees from you! Isn’t that outrageous?

Investing in your own portfolio of shares means more money for you, and less for the fund houses. Also to note are low-cost Index Funds from companies like Vanguard that serve to mimic the market. The day that they come to Malaysia is the day I’ll dump most if not all of my savings into them.

(I understand some of you may be mutual fund agents and investors here so if you disagree, please do provide me your reasons for it. Don’t just send me hate messages and emails.)

I’ve written an updated article on mutual funds and unit trust here.

Hacking inflation

People love to get really worked up about inflation. Here’s what I think about it.

The best savings accounts earn about 1-3%. These accounts are great to stash money for an emergency, or to save a down payment for a house. The best Fixed Deposits (which you can only get if you deposit about RM10,000 and above for a few years) usually earn just less than 4%.

With Malaysia’s official inflation rate averaging roughly 3% (we all know it is much higher, I reckon it is close to 4.5%), keeping money in a savings account or FD are bad for building wealth because they don’t even keep up with inflation.

However, I always recommend keeping roughly 6 months of your take-home pay in FDs as your emergency fund. The rest should be invested.

Going from RM0 to RM1,000,000

I want to show you something. Assume you’re 25 right now, and by age 50 you want RM1 million. To accomplish this goal, assisted by a conservative 7% return p.a., you need to save and invest just RM1,235.24 a month. Think about what happens when you increase this amount as you progress in your career. RM1 million isn’t a far-fetched dream, it’s actually very much attainable and we should in fact aim higher.

The key takeaway from all this? If you really want to build wealth, you need to start investing right now. The longer you put it off the harder it becomes. And for you people whose time is not on your side, you should start investing too, it is never too late. More importantly, instil this lesson in your children and future generations.

GET STARTED!

If you find the above makes sense and you’re ready to start investing, I suggest taking a look at – A Guide to Stock Investment in Malaysia.

If you’re interested in the stocks I invest in, you may find a full list of them in my portfolio – The Freedom Fund.

Again, be sure to read up and understand the company you’re planning to invest in. Keep it simple and consistent, and invest for the long term. Remember, start early and start now.

For the next article of the Investing Series, check out article 008 – DIVIDEND MAGIC Recommends: Stuff I Use.

As always, Facebook and Instagram. Follow, and keep up to date. Keep up to date and help support the blog by following and sharing this article. Thank you!

“The best time to plant a tree was 20 years ago. The second best time is now.”

I’ll see you in 30 years.

Disposal of Shares – AirAsia Berhad

By Leigh
Updated August 2, 2016 Filed Under: Dividends, Portfolio - Freedom Fund, Recent Buy / Sell 4

AirAsia

Earlier today I disposed off my holdings in AirAsia Berhad at RM2.95 per share. I had purchased 4,300 units of AirAsia mid June 2015 for an average price of RM1.66 per unit. Factoring in dividends and brokerage fees, I made a gain of RM5,669.75 which is a 79% capital gain.

Why Air Asia?

As most of you know, the Company’s share price took a tumble for the past year and only recently sky-rocketed. Ever since Tony Fernandes and co took over the Company, I’ve always seen AirAsia as very well managed. With the Company’s slump back in 2015, I saw an opportunity to purchase one of the most well known company in Malaysia if not South East Asia.

AirAsia Tony Fernandes — *AirAsia CEO – Tony Fernandes (Source: Time Magazine)*

So, the big question was and still is – Why Air Asia? A simple approach to investing would be to just take a step back and look around us, what product do we as consumers use every day? As for travel, which airline does the average Malaysian consumer fly every single time they travel? The answer is without the shadow of a doubt – Air Asia.

‘World’s Best Low Cost Airline’ has been on every flight I’ve been on with Air Asia, that got me thinking on one such trip – they must be doing something right. Immediately, I got to looking into the Company’s financials after my holiday. Despite some heavy debts which was typical of a young growing company, I liked what I saw. I then only had to wait for the opportune time to purchase the stocks of the World’s Best Low Cost Airline.

Dividends or Capital Gain

As Air Asia was a young and rapidly growing company, I in turn as a shareholder did not expect a high dividend to be paid out but instead for the Company to retain those earnings for further expansion. I received a dividend of RM172 back in June this year, translating to a 2.41% yield for me.

Why Sell?

I would’ve loved to have held on longer to Air Asia but the stock is way overvalued at its current price and I felt it was time for me to take profit. After holding the stock for close to 14 months, I made a 79% profit, a pretty good investment if you ask me.

Conclusion

I will continue keeping tabs on Air Asia further down the road and if the opportunity comes, I will not hesitate to buy more of the airline’s stock provided the fundamentals remain.

A little sidebar here – I’m currently looking closely at Axiata and Spritzer as potential companies to invest in. With the sale of AirAsia stocks, I am currently sitting on a war chest of close to RM30K.

As always, thank you for reading.

IGB REIT – Annual Report 2015

By Leigh
Updated October 30, 2016 Filed Under: Dividends, Companies in the News, Portfolio - Freedom Fund 4

What is a REIT?

So first and foremost, what is a Real Estate Investment Trust (REIT)? A REIT is a company that owns, and in most cases, operates income-producing real estate. They are listed on the KLSE and its shares are open to the public to purchase. Learn more about them here in my Complete Guide to REITs in Malaysia.

Now, on to one of my favorite REITs – IGB REIT.

IGB REIT

I was awaiting the arrival of the dividend voucher from IGB REIT when to my surprise, it came together with its annual report in the form of a CD. Personally, I like how companies are mailing their annual reports in a CD instead of the old days when they printed thick copies of the reports and mailed those to every single shareholder.

Before we go into the details, you may download and open IGB REIT’s annual report here: IGBReit AR15

For the benefit of those who don’t know, IGB REIT’s property portfolio consists of Mid Valley Megamall and The Gardens Mall in the Klang Valley. Their main shareholders are IGB Corporation Berhad and Goldis Berhad whose main shareholders are the family of IGB Corp’s co-founder the late Datuk Tan Kim Yeow.

I will attempt to brief everyone on some of the more significant details of IGB REIT.

Balance Sheet

Dear shareholders of IGB REIT, these are yours.

Photo Source: thisismetrixit.blogspot.com

Photo Source: mapio.net

There were no significant changes in the REIT’s assets and liabilities, value of the company’s investment properties stood at RM4.9 billion. Mid Valley Megamall is valued at RM3.61 billion and The Gardens Mall at RM1.28 billion by Henry Butcher as at 31 December 2015.

Cashflow

A Real Estate Investment Trust’s (REIT) main source of income comes from rentals and the company’s gross rental income increased by 7% in 2015 to RM380 million a year. I particularly liked that IGB REIT also managed to not only keep expenses low, they were able to reduce it by almost RM3 million a year.

However, a lower net profit was declared for 2015 mainly because there was no changes in the fair value of the REIT’s properties. Generally most properties held by REITs would have an increase in value every year, I am not concerned with this aspect of IGB REIT because fair value of properties are paper gains, the true value of a REIT comes from its rental income.

Apart from rental income, I’d like to bring your attention to their Other Income section mainly car park, advertising an kiosk rental. The REIT is rakin in RM44 million a year in parking fees alone, RM6 million for advertisements and a cool RM23 million from renting out kiosk booths. All of which have increased compared to 2014.

My Holdings

IGB REIT has been in my PORTFOLIO since July 2015 with my gross investment at RM1.3152. I’ve been adding to my position when the price was right. As of today (3/3/16), the market price is RM1.54, giving me an unrealized capital gain of 16.33%. I have also received dividend income from IGB REIT recently amounting to RM766.08. Total gains including dividends received stands at 20.93%.

At the current price, dividend yield for the REIT is still above 5%, I will consider disposing off some of my shares in IGB REIT when the yield dips below the 5% mark and will top up on the REIT depending on their next quarterly results.

Do you own any REITs in your investment portfolio?

Thanks for reading.

Is the First RM100K the Hardest?

By Leigh
Updated February 13, 2025 Filed Under: Investment, FI/RE, Portfolio - Freedom Fund 36

My first RM100K – Charlie Munger of Berkshire Hathaway has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth. Making the first million was the next big hurdle. To do that a person must consistently underspend his income. Getting wealthy, he explains, is like rolling a snowball. It helps to start on top of a long hill—start early and try to roll that snowball for a very long time. It helps to live a long life.

Charles Thomas Munger (January 1, 1924 – November 28, 2023) was an American businessman, investor, and philanthropist. He was vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett, from 1978 until his death in 2023.

My First RM100K

I achieved my first RM100K in portfolio market value in the mid of 2014. It took me almost three years to get to that point, starting with RM3,000 I saved for 3 months which I deposited into my Jupiter Securities brokerage account in 2011. Learn how to start investing in shares HERE.

What did it take to get from RM3,000 to RM100,000 in three years?

Well, a lot of hard work, persistence, consistent savings and investing.

I lived below my means day in and day out for years on end. I made a decision to continue living with my parents instead of getting my own place as the property prices were skyrocketing when I first started work. At lunch, I walked out of the air-conditioned premise to a nearby economy rice (‘chap fan’) stall when my colleagues ate at posh restaurants. I couldn’t bring myself to spend RM20 ++ every meal at the office. When I had to stay back to work late, I settled for Maggi and ramen noodles at the office.

Meanwhile, I also put myself in a position to become promoted at work and generate additional income. And I would come home after working for 10 hours to study stocks and try to create additional income above and beyond what my day job provided. I made it a habit of analyzing and looking at at least one new stock every day. I read books and listened to audiobooks on investing during my commute.

I thought about escaping the miserable rat race every single day.

And, perhaps most importantly, I religiously invested all the excess capital generated by living below my means into high-quality dividend growth stocks that rewarded me as a shareholder with growing dividends that allowed me to continue rolling my snowball at an ever-greater velocity.

Sticking To The Plan

What have I been up to since hitting the first RM100K?

What else would I be up to other than sticking to the long-term plan?
My main asset and focus will always be stocks because it is what I understand and what I know.
And if you need a financial plan for yourself, I’ve got one right hERE for you.

I still live with my parents, even though I now own 2 properties which I’ve decided to rent out. I make it a habit of packing food from home whenever I can. I still choose to order the RM10 lunch set instead of the RM20 one.

And although I’m not eating that much instant noodles anymore (my body told me when enough was enough), I’m also not eating steak and going to buffets daily.

I do however find the time to treat myself to a nice meal or holiday now and then. Of course, all of these are within the budget I set for myself.

Now and Beyond

What has all this modest living, saving, and intelligent investing done for me?

Well, my Freedom Fund closed at RM254,3482.62 in total market value on 31 December 2015. My modest portfolio produced a 2.97% dividend yield or RM7,544.14 for 2015.

Update (7 March 2017): As at 31 December 2016, my portfolio has a market value of RM345,955.92. That’s almost RM100K a year for me. With the help of compound interests as well as some diligent investing, I hope to keep this RM100K a year trend going.

Update (1 August 2019): As of 30th June 2019, the Freedom Fund is worth RM439,286.24. Netting me a dividend of RM8,938.36 in the first half of 2019.
It’s yield? 2.46%. I know I said RM100K a year back in 2017, I lied.

I’ve certainly also picked my fair share of duds along the way which has needlessly delayed my progress. But hindsight is 20/20, unfortunately.

Nonetheless, this is a real-time and real-life journey. No backtesting. No hypotheticals. No what-ifs, coulda’s, shoulda’s, or woulda’s. Real-life progress, for better or worse.

And I think that’s what I really love about showing how financial independence unfolds in real time with all the victories and setbacks that occur. It shows that it’s possible without nailing the perfect investment. Mistakes can be made. We can fall down. But as long as we get back up and keep climbing, we can reach the top of that mountain.

And I’ve been climbing, guys. For five straight years, I’ve been climbing. I know the view at the summit will be incredible. And because of that climb, the portfolio is now hovering at RM250,000. It’s incredible!

But, as Munger said, it helps to start early and roll for a long time. I didn’t start particularly early. I was almost 21 years old before I opened a brokerage account. But here I am at 26 years old, controlling a portfolio worth RM250,000 that’s chock-full of high-quality businesses across a spectrum of industries. I’m a real estate tycoon. An investment banker. A manufacturer. An insurance giant.

These businesses will funnel ever-growing cash flow into my portfolio, which begets more cash flow in the future. That passive dividend income should exceed RM8,500 this year. And I haven’t even been rolling the snowball all that long.

Imagine what’s possible in five or ten years? Imagine what’s possible for you in five years.

What has your experience been? Was the first RM100K the hardest? Are you rolling your own snowball? Are you climbing the mountain?

Cheers and thanks for reading. I will continue updating this post on an annual basis just to keep track of my progress from the first RM100K to my first million.

A Note

I’ve got too many people asking how I got my first RM100K jump just from investment etc.

Now, I hope everyone is clear that me getting my portfolio to jump by RM50K, sometimes RM100K a year is not 100% from investment returns. I pump in money from savings.

I have a regular income and I have a business income. So what’s important here, and what I want you to focus on, is my savings rate, my dividend yield, and my portfolio’s IRR.
All of the above metrics are on the first post of my Facebook page and I also update these in my annual reviews.

You may not increase your portfolio by tens of thousands, but your savings rate and your yield are what matters. If you have a RM10,000 portfolio, with a 10% yield you save 50% of your income. That’s a huge win. Focus on the right metrics.

For the next article of the FI/RE and Savings Series, check out article 002 – My Portfolio is Built on Frugality.

Fundsupermart and Unit Trusts in Malaysia

By Leigh
Updated May 20, 2017 Filed Under: Doorgift / Goody Bag, Investment, Portfolio - Freedom Fund 11

Fundsupermart

I received Fundsupermart‘s red packets in the mail (Ironman not included) today just in time for CNY this year.

As some of you may know, I’ve been consistently investing in Private Retirement Scheme (PRS) funds through Fundsupermart for 2 years now. The RM500 youth incentive from the government got me started and I’ve been investing RM3,000 annually since then. The tax breaks given by the government are treated as a sort of guaranteed return for my portfolio. One may argue though that the fact that we’re unable to withdraw the funds until after the age of retirement is a drawback. I, however, treat my annual RM3,000 deposits into PRS as my security fund, together with fixed deposits and my EPF.

Unit Trust

I used to invest in Unit Trusts (UT) a few years ago but have since switched over to shares. The UT industry in Malaysia is still in its prehistoric age with exorbitant fees and lousy returns. Some are even charging fees as high as 5% per annum, compound that and you will be paying more than half your wealth in fees. It is my wish and hope that in the future, companies like Vanguard will be able to set up shop in Malaysia. I’d then gladly throw half, if not all my wealth in a passively managed index fund.

As I plan to be transparent with all my investments, I present to you my UT and PRS holdings. I’ve kept some of my investments in bond funds as I have no other means other than UTs to diversify into fixed income investments.

As at 31 December 2015, 37% of my wealth lies in my secure bucket – ie. the bucket where the investments are considered safe. Funds in my savings & current accounts, fixed deposits, PRS funds, EPF and my bond funds make up my secure bucket. I intend to dip into my secure bucket and reduce it to around 30% if and when the opportunity arises.

Till then, happy investing.

End.

As many of you know, I’m not a big proponent of Unit Trusts and Mutual Funds here in Malaysia due to their excessive and ridiculous fees. However, if I were to recommend a platform for Malaysian investors to purchase their funds, it would be Fundsupermart. They offer the lowest fees currently. However, the fees charged by the funds themselves are another matter altogether.

So, if you’re interested in opening an account with Fundsupermart, you may do so hERE.

A Review of 2015

By Leigh
Updated March 7, 2016 Filed Under: Dividends, Investment, Portfolio - Freedom Fund 11

The Year 2015

Like most years, the year 2015 had its ups and downs.

My stock holdings as at 31 December 2015 can be found in the table below.

No.	Stock	Quantity	Gross Investment (RM)	Dividends (RM)	Div. Yield
1	AFG	2,100	10,038.00	302.40	3.01%
2	AIR ASIA	4,300	7,138.00	–	0.00%
3	AXREIT	14,236	24,313.66	773.89	3.18%
4	BONIA	33,700	26,990.33	421.25	1.56%
5	CBIP	10,000	14,425.00	600.00	4.16%
6	CYPARK	8,200	17,681.66	410.00	2.32%
7	HLFG	700	10,528.00	266.00	2.53%
8	HOMERIZ	8,300	14,127.21	624.05	4.42%
9	IGB REIT	22,800	20,030.56	612.56	3.06%
10	MAYBANK	1,500	12,450.00	–	0.00%
11	NESTLE	200	13,376.00	610.00	4.56%
12	SCIENTX	3,800	22,267.24	680.00	3.05%
13	SUNCON	360	–	–	0.00%
14	SUNREIT	13,600	19,839.68	685.75	3.46%
15	SUNWAY	3,600	11,264.04	1,332.00	11.83%
16	TUNEPRO	10,800	18,503.64	226.24	1.22%
17	UOA REIT	7,000	10,920.00	–	0.00%
			254,382.62	7,544.14	2.97%

*Sunway Berhad paid out a one-time special dividend when its subsidiary Sunway Construction went public in 2015, hence the 11.83% yield.

You may notice that some of my investments gave me a 0% dividend yield, this is because I purchased them recently and did not receive any dividends from them with the exception of Air Asia which doesn’t pay dividends.

Capital Gains

Photo source: insidetherockposterframe.blogspot.my

As at 31 December 2015, my portfolio registered an unrealized gain of 6.5%.

Now this figure might be important to some of you but for me, dividends and its growth are what matters to me. Combined with my dividend yield of 2.97% for 2015, my portfolio’s total gain was a cool 9.5%. Not too high compared to some of the players out there, but I’d take a steady growth in my investments every year over erratic volatility in them any time.

Top 3 Performers

Scientex Berhad
CBIP Berhad
Homeriz Berhad

I will be actively looking to add more of these 3 stocks to my portfolio in 2016 provided the price is right. Scientex (which is covered here) and CBIP Berhad have both delivered consistently. Homeriz’s financials has been helped greatly by the devaluation of the ringgit which saw my investments double in 2015.

Disappointments

Bonia Berhad
Cypark Berhad
Alliance Financial Group
Air Asia
Tunepro (formerly Tune Insurance)

Collectively, these 5 companies cost me RM14K in unrealized losses. However, the dividends received from them were pretty solid with the exception of Air Asia and Tunepro. I will continue to hold on to them provided the fundamentals remain.

Dividends

I received RM7,544 through dividends alone in 2015, surpassing my target of RM6K per annum. The dividends earned will all be reinvested into the portfolio, letting the 8th wonder of the world work its magic – compound interest.

My next target would be RM8,500 per annum translating to just over RM700 per month, which should in theory be able to cover my most basic living expenses (if I live frugally).

Ultimately, I aim to be able to cover all my living expenses through dividends alone.

I view my investment portfolio as a young tree, with each stock its own branch, branches which I would think long and hard before I’d ever consider chopping them off. Each and every branch of this wonderful tree produces bountiful fruit – in the form of dividends which is what I’ll eventually live off of, choosing to pluck the fruit and leave the branches intact rather than cutting the branches. What with me working and all now, I am fortunate enough to be able to replant those fruits instead of consuming them – reinvesting my dividends every year will eventually snowball into a huge sum in the long term.

Patience is very tough at times, but my progress thus far is proof that patience and persistence works. Since I started investing in 2014, my passive income has been steadily increasing every single year. It takes a little time for this to start noticeably working, but the additional cash flow is real.

CC Image Rosie the Riveter courtesy of The U.S. National Archives on Flickr