Easy Steps to Effective Investment Planning

Investing your money is important to secure and magnify your wealth, meet your needs and attain financial freedom. Saving is not enough. It should be complemented with investing.  Here are steps to effective investment planning.

Know your cash flow

Your cash flow pertains to the money that you earn and spend.  This is the first step because investment entails money. Knowing your cash flow will either tell you to earn more or trim down on your expenses to produce or save the money to invest.

Set your goals

Once you have determine the source where you can get that extra money for investment, the next step is setting a goals.  Depending on your current needs, your priorities, your age and your preferences, among other things, people have different goals. The common general goals included saving for retirement, saving for children’s education, or achieving financial independence.

Estimate how much savings you need

For Children’s education.  Approximate the education cost of your child by factoring the date when and place where your child will study, type and length of course and inflation rate of school expenses. It is to consider the rising cost of living, worsening effects of inflation and the mounting educational costs.  Based on this, you can calculate how much money you need to save and invest.

For your retirement. Estimate how much money you need for a comfortable retirement by factoring your annual expenses based on the lifestyle you want to achieve, the age you plan to retire, number of years until retirement, expected salary, your estimated life expectancy, inflation rate, and investment returns if any. It is also important to know if your will solely rely on yourPension Fund, Private Retirement scheme (PRS) savings or you have other means to supplement your income.

For other goals. Whether for achieving financial independence or purchasing a home, determine how much money is needed for buying a house including the effects of inflation or estimate how much money you need to consider yourself financially free.

In any case, you might consider using the automatic calculator available at publicmutual.com.my to do your planning.


To determine where you are going to allocate your assets, you should research your investment options and decide which best fits your goal within your specified time frame. Asset allocation pertains to the different portfolio investment you make such as stocks, bonds or commodities, etc.  For instance, it would advisable for you to invest in Amanah Saham Didik (ASD) if you are planning for your children’s education. However, you are only eligible to invest in this fund if you have a bumiputra status. If you are ready for long terms investments that can potentially earn higher yields, you might consider investing on global markets. At this point, it is also notable for pension fund members to utilize their  membersinvestment scheme which can facilitate their investment conveniently by allowing a portion of their pension funds for investment in various approved fund management institutions.