Before We Even Talk About Investing...
Give me a moment, because this part is equally important.
Before thinking about investing, make sure a few foundations are in place first.
If you're self-employed, become very good at making money. Build yourself. Build your skills. Build your business. If you're employed, become very good at managing money.
Why?
Because before you can invest money, you first need to save money.
And before investing, make sure you have an emergency fund set aside. Life happens. Unexpected expenses happen. Investing should come after you have a solid foundation.
Now let's talk about the HOW and WHERE.
How do I start? How do I identify opportunities? How much money do I need?
Where should I put my money? Where do I learn? How do I learn?
Where should I put my money? Where do I learn? How do I learn?
Firstly, please understand this:
No one can truly tell you what to do.
This is your financial journey.
Only you can decide what you want in life, where you wish to see yourself, what your goals are, and what financial freedom means to you.
Naval Ravikant once said:
"True intelligence is the ability to design a life where you get what you want with the least amount of effort and struggle."
Take a moment to contemplate on that.
Because your answers will determine:
- Your timeline
- Your risk tolerance
- Your investment style
- Your investment choices
- Your financial decisions
Move with clarity.
Otherwise, you'll find yourself constantly being pulled left and right by salespeople, marketing campaigns, social media influencers, and the latest financial trend.
That's simply how the system works.
A Harsh Reality
Let me share something that may help you make better decisions. Have you ever seen someone driving a supercar and wondered:
"How is that even possible?"
On a positive note, understand that most people who legitimately own extraordinary assets are usually doing something extraordinary.
They may have built successful businesses…They may be skilled investors….They may be high-performing executives…They may have developed specialised knowledge, networks, and financial habits over many years.
This is why I often say:
If you want the results of the 1%, you must begin thinking differently from the 99%. Not necessarily copying their lifestyle but understanding their mindset, money habits, decision-making process, and long-term thinking. Because if you're doing exactly what the majority is doing, there's a good chance you'll end up where the majority ends up.
The reality is that the system is designed to guide people towards an ordinary path:
Study. Work. Pay bills. Follow the life cycle. And… “hopefully” retire at 60 to enjoy life.
The reality is that the system is designed to guide people towards an ordinary path:
Study. Work. Pay bills. Follow the life cycle. And… “hopefully” retire at 60 to enjoy life.
There is nothing wrong with that path. But if you desire something different, it requires courage, passion, curiosity, and a willingness to seek a different way.
Whether that's:
- Building a business
- Growing a self-employed career
- Becoming a highly skilled professional
- Building multiple streams of income
- Creating an investment portfolio
The goal is ultimately the same:
To build wealth, experience life, and spend more time doing what you enjoy.
To build wealth, experience life, and spend more time doing what you enjoy.
Three Frameworks I Personally Consider Before Investing
1. Timeline
Before asking: "What should I invest in?"
Ask: "When will I need this money?"
And perhaps more importantly: "How long am I comfortable leaving it untouched?"
Generally speaking, the longer the timeline, the more options become available.
Which is why starting early is such a huge advantage.
Think in terms of:
- Short-term (0–3 years)
- Medium-term (3–10 years)
- Long-term (10+ years)
Your timeline often determines the investment more than anything else.
2. Risk
This is usually the biggest pain point.
Ask yourself: "What happens if this investment drops 30%, 50%, or even goes to zero?"
Can you handle it emotionally? Can you handle it financially?
Risk generally falls into:
- Low risk
- Moderate risk
- High risk
Most people want high returns until they experience high volatility.
One important thing I've learned:
There is no such thing as zero risk.
There is no such thing as guaranteed returns.
There is no such thing as guaranteed returns.
Unless you're placing money into government-backed instruments or banking products with fixed returns. (covered by PIDM)
What truly exists is risk management.
A smart investor is not someone who avoids risk. A smart investor understands risk.
They calculate what they are willing to lose and structure their portfolio accordingly.
Risk vs Reward
Some people ask: "Why would anyone willingly risk their hard-earned savings?"
The answer is simple:
Risk. Reward. Probability.
Think about a casino. The casino doesn't win every bet. Some gamblers walk away with RM50,000. Some walk away with RM100,000. Yet casinos become extremely wealthy.
Why?
Because they understand probability. Over thousands and thousands of bets, the odds are in their favour. The same principle applies to investing.
A good investor asks:
A good investor asks:
- What are my chances of success?
- How much can I gain?
- How much can I lose?
Investing is not about being right every time. It's about putting money where the odds are reasonably in your favour over many attempts.
For example: You find a property.
- Market value: RM300,000
- Purchase price: RM250,000
- Renovation cost: RM10,000
Total cost: RM260,000
Potential selling price: RM300,000
Potential profit: RM40,000
Potential selling price: RM300,000
Potential profit: RM40,000
Now ask yourself:
- Is there demand?
- Have similar units sold at that price?
- Can I hold if the market slows?
If the answers are mostly yes, then perhaps:
- Downside: Lose RM10,000–RM20,000
- Upside: Make RM40,000–RM50,000
You are risking RM1 to potentially make RM4 or RM5.
That is what investors call favourable risk-reward.
You don't need to be right every time. You simply need the probabilities and rewards to work in your favour over the long run.
Which is why Warren Buffett famously says:
Rule No. 1: Don't lose money.Rule No. 2: Never forget Rule No. 1.
What he really means is:
Protect your downside first.
Then look for asymmetric upside.
3. Knowledge
One of my personal beliefs is this:
The more you understand an asset, the lower the risk becomes.
The less you understand an asset, the higher the risk becomes.
The less you understand an asset, the higher the risk becomes.
A stock is not risky simply because it is a stock.
Crypto is not risky simply because it is crypto.
Property is not safe simply because it is property.
Ignorance creates risk. Knowledge reduces risk.
The more time you spend learning, observing, participating, and understanding an asset class, the better your decision-making becomes.
And that brings us to the next topic.
In the next blog, I'll share some general knowledge about different asset classes, how they work, their pros and cons, and where they may fit within a person's financial journey.
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