What Can You Invest With RM1,000 as a Student?

Does the term “investment” bring up thoughts of guys in suits, briefcases full of cash and people avidly watching the stock market on a busy screen?

Well, you don’t have to be the Wolf of Wall Street to start investing. And what’s more, you don’t necessarily need a lot of money to do so! In reality, as a student, you may still increase your money with what little you have, whether it’s to save up for the newest iPhone or for something greater like studying abroad.

In this post, we explain what you can achieve with only RM1,000 as a student.

#1. Fixed deposit (FD)

If you’re thinking about beginning with anything that’s reasonably low-risk, fixed deposit is where you should turn to.

A fixed deposit, or FD, is a form of savings or investment account where you deposit your money for a specified length of time ranging from 1 month to many years. During this time, you are discouraged from taking the funds out of this account. In exchange, after the tenure is finished, the bank will compensate you with an interest depending on the amount of money you placed.

Compared to your savings account, FD normally guarantees a greater interest rate at roughly 2% for a 12-month period as compared to a measly 0.25% for conventional savings accounts. However, compared to other kinds of investments in this article, FD offers a lesser return on investment.

Risk/Return Profile: Generally low risk; poor return

#2. Digital investment managers

So, you want to start investing but finance is not your strongest suit and investment jargon makes your head ache. If only you could give over your money to someone and have them invest it for you.

Well, that’s actually doable. And no, you don’t have to employ personal financial gurus. Instead, a group of algorithms will perform all the work for you.

Digital investment managers (or often called as robo advisers) is a service that integrates technology to automate your investment portfolio. When you join up, you’ll need to answer a series of questions about your financial intentions and risk appetite. Subsequently, the algorithm will automatically invest your money, often in Exchange Traded Funds (ETFs), which is effectively a group of equities that constitute an index such as the S&P 500 or the FTSE Bursa Malaysia KLCI. They will also regularly adjust your portfolio depending on what’s presently occurring in the market.

In Malaysia, robo adviser platforms include StashAway, MYTHEO, Akru and Wahed. If your academics and college activities are making it hard for you to keep track of your assets, try utilising these platforms for a simpler approach.

Risk/Return Profile: Medium to high risk; medium to high return, depending on your portfolio

Pro Tip: Risk is the cornerstone of investment. In general, the riskier the investment (which indicates that there is a significant potential of losing all your money), the bigger the return. Learn more about this with a finance degree.

#3. Peer-to-peer lending (P2P)

What if we tell you that you may become investors to companies and get a profit in return even as a student? With P2P lending, you can!

P2P lending is when you lend money to companies using internet channels. Initial investments may start from as little as RM50 and you can pick which firms you’d like to invest in. The business that you lend money to will subsequently make regular repayments coupled with interest.

This sort of investing draws medium to high returns from 10% to 18%. However, since organisations that seek funds via such platforms are often not as well-established (there’s a reason why they’re turning to private investors instead of banks), there is a danger that they might fail on their repayments, leading you to lose your money.

It’s advisable to pick trusted P2P lending sites such as Funding Societies and Fundaztic. You may also verify whether the P2P lending platform you wish to invest in has been regulated under the Security Commission Malaysia here.

Risk/Return Profile: Medium to high risk; medium return

#4. Equity crowdfunding

Equity crowdfunding is another kind of financing that enables small enterprises to get funds from individual investors. But unlike P2P financing that gives monthly repayments, equity crowdfunding delivers return in the form of equity (or shares) (or shares).

If you participate in equity crowdfunding, you’ll become a shareholder that has partial ownership of a firm and may stand to benefit if the company performs well. The potential return from equity crowdfunding is bigger too (it may be up to many multiples of your contribution) since it’s contingent on how well the firm performs and does not have a predetermined rate of return like P2P lending.

However, if the firm fails to deliver, you’ll risk losing your shares and all of your money. Not to add, it might take years to actualize your gains since you may only be able to sell your shares when the business exits (i.e. becomes public or is purchased by another firm) (i.e. goes public or is acquired by another firm).

If you want to get a taste of what it’s like to possess shares at a young age, equity crowdfunding platforms such as pitchIn is a terrific place to start!

Risk/Return Profile: High risk; high return

Pro Tip: There’s more to investing than shares and the stock market. If you’re interested in the study and management of money, a Finance course will fit you.

#5. Amanah Saham Bumiputera (ASB) (ASB)

As a young adult struggling through adulthood, investing enough for a retirement plan could seem premature. But in truth, there’s no harm in putting away some money since it may make a tremendous difference in 20 years.

Amanah Saham Bumiputera (ASB) is a unit trust fund for bumiputeras that’s backed by the government and administered by Amanah Saham Nasional Berhad (ASNB) (ASNB). ASNB combines the money from its investors (unitholders) and invests in a range of assets. The gains are subsequently funnelled back to the unitholders through annual distributions.

The maximum investment amount is dependent to availability of units of the fund however you may start as low as RM10. ASB provides a pretty respectable return of 5% to 10% with zero sales taxes.

Risk/Reward Profile: Low risk; medium return

#6. Gold

Did you know that gold has the capacity to hedge against risk or inflation? This explains why your parents and grandparents still maintain the gold they acquired from the bygone days because of its rising worth.

Instead of purchasing gold from Poh Kong for souvenir, you may now create a gold investment account and receive the profits for its worth. You may acquire gold based on the bank’s current selling price and sell them based on the bank’s purchasing price. The profit or loss you receive from gold is intrinsically dependant on the bank’s trading price.

Keep in mind that gold investment accounts don’t have an interest payment. Instead, what you receive from it is reliant on the volatility in the value of the gold itself. This investment has a high risk since it’s susceptible to market forces and vulnerable to gold price volatility but you may reap a huge return if market circumstances are in your favour.

Platforms you may invest your RM1,000 include HelloGold, Maybank Gold Investment and CIMB Bank Gold Investment.

Risk/Return Profile: High risk; high return

If you don’t have RM1,000 as capital to invest, don’t despair. You may always start with saving and investing the extra change from your everyday expenditures.

In Conclusion

We hope this post has thrown some light on the investments you may make as a student. Keep in mind that every kind of investing comes with pros and downsides, so it’s wise to conduct your research before making any selections. All the best!

Happy Investing! 😉