Invest to make money to improve :
MEANING :
The commitment of current
resources/money with the
expectation of receiving a larger
amount of resources in the future
Age play an important role
determining the suitable types of
investments.
YOUNG – Classified as a risk taker
because it may assume higher risk
since the time factor allows you to
recover potential losses
OLDER – May not want to be a risk
taker because of their time factor.
They will come together with
returns; higher risk, higher return
expected
Welfare
For Financial Security
Have funds for emergencies
Reach financial goals
For a secured retirement
In Islamic investments should not involve :
 Interest/usury
 Gambling
 Alcohol
 Pork
 Conventional insurance
 All investments must be permissible to gain
barakah/good benefits
 TYPES OF
INVESTMENTS

Investments
Investments in fixed
Investments Investments
in savings deposits
in shares in bonds
account account or
time deposits

Others
Investments (Cooperatives
Investments
in real , Lembaga
in unit trust
properties Urusan and
Tabung Haji)
 Investments risks

• Can reduce real purchasing power as changes in the

price of goods and services due to inflation affect
Inflation Risks investment returns

• The risk associated to changing market interest rate

which mainly affect fixed income investments like
Interest Rate Risks bonds and preffered shares

• The uncertainty of markets due to changing political

and social conditions
Market Risks

• Arise may due to a possibility of bad management,

unsuccesful products, competition or any factors
Business Failure Risks that will cause the business to be less profitable
 REWARD AND RISK OF INVESTMENTS

A risk adverse person in contrast simply

A risk taker will invest a mojority of his
prefers to take less risks. investments in
funds in high risk investments and have
fixed income securities become a priority
lesser amounts to be invested in
and she/he is willing to accept lower
moderate and/low risk investments
returns for investment securities

Investment risks that may affect us vary from

time to time. The risks are :
 Inflation risk
 Interest risk
 Market risk
 Business failure risk

The higher risk, higher returns

 INVESTMENT IN SAVINGS ACCOUNT

The depositor can earn interests or can Formula to calculate interest

participate in profit sharing with the
bank. Have two savings account; one
account is to meet daily expenses while
the second account is used for wealth
accumulation. Necessary for a better
retirement
In a short term, a savings account can be amount of simple interest :
used to meet the unexpected use of cash, to
buy short term assets or to go for a vacation.
A savings account is an interest-bearing
deposits account Interest amount = Principal x Time
x Rate

Savings account can be divided into three

The profit distribution can be calculated based on the account average daily balance and types :
by using this formula : i ) Individual savings account
ii ) Joint savings account
Profit = Cumulative daily balance for the month X RATE X 1/12 iii ) Savings account for associations,
Number of days in the month societies and clubs.

A bank offers trustee accounts and accounts for minors. Interest on a savings account is calculated on the account's outstanding balance
at end of each day. The interest is credited to the account every six month on June 30th and December 31st each year. Offered unde
Islamic Syariah principle by Bank Islam, Bank Muamalat and conventional commercial banks. Al Wadiah saving account can be opened by
individuals, societies, associations and clubs whether or non-Muslims. The customers are given the savings passbooks or statements sent
by mail or statements online
 INVESTMENT IN FIXED DEPOSIT (FD) ACCOUNT OR TIME
DEPOSITS

I. This types of imvestment has better returns than a savings account. The fixed period can be 1, 2, 3 …. And 60 months. Fixed deposits
withdrawn.
II. The interest rate for more than 12 months can be negotiated between the customer and the bank. Banks are allowed to accept deposits
of any amount for time deposits except for time deposits of one month.
III. The minimum amount of deposit is RM5000.
IV. FD withdrawn before maturity is allwed but the payment of interest is subject to Association of Bank Malaysia (ABM) procedures, are :
No interest will be paid on any 1 month, 2 months or 3 months FD that has not run the full period
No interest will be paid on FD of 4 months and above if withdrawn before the completion of 3 months
The rate payble for FD withdrawn before maturity is half the contracted rate for each completed month the funds have been
deposited
V. Interest amount of FD is calculated based on simple interest formula :

Interest amount = Principal x Rate x Time

VI. The Islamic FD uses the al-Mudharabah concept which are offered by Bank Islam, Bank Mualamat and other commercial banks that offer
Islamic products. There is no interest. FD can be opened by :
Individuals aged 18 and above including non-residents of Malaysia (external account)
Joint individuals
Sociaties
Associations and clubs
Companies
 The formula used to calculate the profits earned by customer :
Profit = Principal x rate x Period of months
100 x 12
 INVESTMENT IN SHARES
Common stock holder is the type of stock is
sold to the public. Buying common stock
enables the stockholder to accumulate
wealth in two ways through capital
appreciation and receiving dividends.
Counter categories can be recognized as
consumer products, industrial products,
construction, trading, services, hotels,
finance and properties.
Types of Common Shares :
i ) Blue Chips shares
ii ) Growth shares
iii ) Income shares
Shares can be purchased either in primary
market through Initial Public Offering (IPO)
or secondary market that is the Bursa
Malaysia or formely known as Kuala
Lumpur Stock Exchange (KLSE)
In order to start buying or selling stocks
that are listed in Bursa, will start open two
types of accounts :
i ) Central Depositary System (CDS) Account
ii ) Trading Account
Features of common shares :
i ) Claims on income
ii ) CLaims on assets
iii ) Voting rights
iv ) Preemptive rights
v ) Limited liablity
 INVESTMENT IN BONDS

A bond is a long term debt

The bondholder can claim on
instrument issued by a
the firm's income and assets as
corporation either public or
specified in the indenture. An
private to finance the
indenture is a contract
company's long term assets.
specifying the requiremets of
The maturity of bond between
the bond.
10 to 30 years

Private bond
Malaysian Government
market or private
government Investment Issues
debt securities
securities ( MGS ) (GII)
(PDS)
Types of
instruments
available in Ringgit
Bond Market
Cooperatives Secured bonds Unsecured bonds
 Malaysia Government Securities
(MGS)
is interest bearing bonds issued by
government through BNM. Can raise long
term funds fro domestic capital market to
finance expenditures
Government Investment Issues
(GII)
are government securities issued based
on Islamic principles and are placed on a
non-competitive tender. Maturity
between one to five years
Private bond market / private debt
securities (PDS)
Provides an alternative to bank
borrowings. Comprises of various types of
instruments like fixed rates, floating rates
Cooperatives
Allow bondholders or investors to have
the option of converting the bonds into
common or ordinary shares of the issuing
company at specified times
Secured Bonds
Are bonds that are issued on a secured
basis. Secured by company's specific
assets, usually fixed assets that have
market value higher than the bond issued
Unsecured Bonds
Divided into 3 types; debentures,
subordinated debenture and income
bonds.
 INVESTMENTS IN REAL PROPERTIES

Are investments in shop houses, standard

There are two types of risks involved; physical
lots in shopping or office complexes,
and obselence. Sources we can shop around for
condominiums, flats and residential
property :
homes. Is an important segment in
finance because people are willing to give  Developers
up or forego a capital big sum of money  Real estate agents
 Property exhibitions
 Others
Advantages Risk
Make money as the value of the property The property could be untenanted for
increases a period of time and may get a bad
tenant
Leverage the investment Prices could remain static or even fall
Rental income
Advantages and Risk of Real Properties Investments

Developers Real Estate Agents

Useful if we want to buy properties in the secondary
Normally it will be cheaper to buy a house from a market, agents could advise us on the available chores and
developer rather than buying from a secondary they can help in making decisions
market

Sources
Property
Property Exhibitions
This can be done through taking advantage of sales for
Others
unsold properties at Properties Exhibitions. Seek direct Refer to classified advertisements in the newspaper or we
contact with developers and representatives from banks at can refer to property for auction
exhibitions for financing advise
 UNIT TRUST

TYPES OF UNIT
TRUSTS

Unit trust is a trust that Method to invest in

is established by a trust unit trust :
deed, a deed between a) Monthly regular
an investor, a fund saving scheme
manager and a trustee.
The objective is to get a b) Lump sum cash 1. Conventional Unit Trusts
certain level of return c) EPF withdrawal from *Equity Funds
and with an acceptance Account 1 *Fixed Income Funds
level of risk. A second
party, the manager is *Money Market Funds
responsible for the day- *Real estate Investments Trusts (REITS)
to-day running of the
trust and for investing *Exchange Traded Funds (ETF)
the funds *Balanced Funds
2. Syariah Funds
 Low capital
requrement

Advantages
Diversity the of
Risk Compoundi
ng
Advantag
es
Safety and
less Liquidity
monitoring

Minimized
risk

Lack of publicity

Disadvantages Lack of experience

Lower return
 OTHERS

• Also known as Lembaga Urusan dan Tabung Haji

(LUTH)
Pilgrims • Was set up by the government to promote and
Management and coordinates activities for Muslims going for Haj
• Enables Muslims to have active and effective
Funds Board or participations in investment activities permissible in
Tabung Haji Islam through savings

• The top three cooperatives in Malaysia are Bank

Kerjasama Rakyat Malaysia Bhd (Bank Rakyat ),
KATM, each with more than 65 000 members,
share/subsciption exceeding RM100 million and
Cooperatives assets of over RM400 million
• Is an organization formed and owned by a group of
individuals for purpose improving standard living and
enjoying social services rendered rather than for
profit maximization purpose
 INVESTMENT STRATEGIES

Have a good planning, they may

get the higher return. Before one’s
do the investment, they must
spend some times understanding
the market either through research
or out expert advice.

Know why you want to

invest
Know the key issues to
consider when investing

Four steps strategies

Know the concepts of

investing
Know which investments are
appropriate for you
Know why you • One should known the purpose of investment either their investment fulfill the
financial goals and objectives. One's can achieve their goals by investing savings based
want to invest on the timr frame

Know the key • There nine key issues to consider :

• How much money for a medium long term investing, understand product investing,
issues to intended investment overall portfolio, returns on other similar investments,
consider when understand the risk, expectations returns, time horizon for investments, flexibility sell
investments in event emergencies, monitor performance of investments againts
investing changing needs

Know the • Know the concepts of investing :

concepts of • Diversification, time value of money, impact of inflation and taxes, maximizing
returns, Ringgit cost averaging, Risk return relationship, understanding risk
investing

Know which
investments • Really importance to know how it works.
• Each assets is unique and has a difference risk-return to realise the
are financial goals
appropriate