How I Invest My Own Money

People often ask me for investment advice, and 99% of the time, the responsible answer is: “It depends on your situation.” There are no easy answers in investing, and usually the conversation ends up with me asking a ton of probing questions instead of giving a simple answer.

But I understand that’s an irritating response, especially perhaps when you’re a little younger and looking for some structured guidance. In the spirit of that, while I can’t tell you exactly how you should invest your money — here’s how I invest mine. Hopefully it’ll give you some things to think about for your own investing journey.

Unfortunately, I can’t share exact dollar figures as it’s a little too public here. What I will share is percentages of what I’ve invested in. I’m also big on principle-based reasoning, so I’ll briefly mention investing principles I believe in too.

Please take this article at your own risk. It’s certainly not how I think you should invest your money, but this is what’s worked for me.

Mr-stingy’s Investment Portfolio – July 2020

1. The safe stuff

About 80% of my investments are what I consider “safe”:

• EPF/KWSP: 69.29%
• Amanah Saham: 2.61%
• Bond Unit Trusts: 2.69%
• Insurance-Linked Unit Trusts: 0.63%
• REITs: 0.05%
• Robo-Advisor Low-Risk Portfolio: 5.23%

I’ve always considered the Malaysian EPF underrated. Been delighted with their consistent returns (4.5-6.9%) over the past 13 years of my career. So I’m happy to keep most of my portfolio here — I’ve never withdrawn a single sen — and likely won’t until I retire. Not many know this, but the EPF is required by Malaysian law to pay yearly dividends of at least 2.5%.

Next: Amanah Saham fixed-price funds have never disappointed either — only wish I had the quota to invest more when I was younger. If you’re bumi or manage to get some quota, it’s a no-brainer.

Moving on to the unit trusts I have. They’re all in bond funds (via Fundsupermart) as I’m playing safe right now. Historically, I haven’t done well in choosing unit trusts, which strengthens my belief I should leave most of my funds to the EPF and other passive investments.

A very small (0.63%) portion is in investment-linked insurance plans. These are expensive funds with traditional sales charges (5%) and annual fees, so I’m minimizing the amount of money they hold. I’ve moved much of what I used to have here to my robo-advisor. I also have a tiny bit of “experiment” money in a REIT (via Rakuten Trade).

Finally, roughly 5% of my investments are with my robo-advisor (StashAway), set at the lowest-risk portfolio. Loving this because it’s cheap, convenient, and my assets are valued in US dollars — protecting me against Ringgit drops.

2. The “high risk-high return” stuff

The other ~20% of my portfolio is in higher-risk assets:

• Private Retirement Scheme (PRS) — Equity: 2.66%
• Gold & Silver: 0.79%
• Bitcoin & Cryptocurrencies: 14.42%
• Equity in mr-stingy: 1.63%

My PRS funds are invested in Asia Pacific stocks (via Fundsupermart). Returns have been OK (cumulative 31%) over the last seven years, but this one is really for tax benefits.

I also keep a little bit of gold and silver (via Maybank) as hedges against inflation and currency devaluation. Traditionally, I’ve never been a fan of gold, but watching the US Fed (central bank) print money like a toilet paper factory has convinced me otherwise. Planning to bump this up to 1% shortly.

14.42% in Bitcoin (via Luno) and crypto is probably the one where financial advisors get alarmed and cover their children’s eyes. What can I say? I’m a firm believer in digital assets. (Find a detailed explanation of why here.) This portion is also oversized because of gains — cumulatively I’ve invested only ~9%, but my crypto has grown 63% over the last four years.

Lastly, I have a bit of money invested in mr-stingy LLP, officially the entity that runs this blog. It’s been six years now, and I’m finally generating sustainable income. Due to difficult coronavirus times, I’m donating >80% of revenues this year to charity. Do I get to call mr-stingy a social enterprise now? 🤔

Personal Situation

For further context, I wanted to share my personal circumstances. Just so you understand which stage of life I’m at and where I’m coming from. Here goes:

I’m 36 this year. I work a full-time job (which is challenging but I love) for 45-50 hours/week, plus spend another ~12 hours on this blog. I paid off my student loan before I turned 32. The only financial commitment I currently have is my home loan. (I drive a second-hand car which I paid for in cash.) I’m blessed enough to not have any other expensive health or family-related commitments.

My diverse hobbies aren’t expensive and I’m slightly introverted — social engagements more than twice a week tire me out — so mostly I’m reading and writing at home. I don’t consider myself a great success in any particular area, but rather I take pride in maintaining balance in life.

I recently got married and my wife has a good full-time income too. Planning for kids in the near future.

We’re financially stable, but still far from financial independence or early retirement.

10 investing principles I believe in

Closing this one off with a list of investing principles. Actually, this portion probably deserves a future article with detailed explanations, but consider this a teaser for now.

Here’s what I believe when investing my own money:

1. Keep expenses as low as reasonably possible. I’m frugal in many ways but I also splurge on things that bring me happiness.
2. Be excellent at work. All major income jumps in my life have happened via promotions in my day job. High income + low expenses = more to invest.
3. Invest most funds in SAFE assets (e.g. EPF) with LOW fees (e.g. robo-advisor ETFs). This is protection against losing capital.
4. Allocate a bit in high-risk, high-return assets. Look for asymmetric opportunities — things where I can gain a lot more than I risk losing (e.g. Bitcoin).
5. Never borrow money to invest.
6. Passive investing beats active investing (usually).
7. Automate as much as possible. I don’t have a lot of extra time or energy — so set up systems (e.g. automatic salary deductions) that remove typical human weaknesses.
8. Use technology to make life better. Almost all my investments are done 100% online.
9. Invest for retirement. I’m a long-term investor, not a day trader — so don’t worry about short-term market swings.
10. Never stop learning. How I invest today is very different from five years ago. It’ll probably change again in the next five.

Remember: investing is personal

Would I recommend anyone to follow my investing principles? I think they’re actually good principles for someone who likes their job, is earning a stable income, and wants a balanced life — with time for family, friends and hobbies.

The only part which isn’t mainstream is the 80-20 (safe vs risky) split, which is my take on Nassim Taleb’s barbell investing, whereas a financial adviser might recommend a conventional 60-40 stocks-bonds ratio. Regardless, the idea is long-term balance — something that allows you to sleep well at night, but still wake up one day 25 years later and say “Wow, I don’t think I’ll struggle with money ever again.”

Of course, if you have different targets — say you’re hustling for FIRE (financial independence, retire early) in 10 years or you wanna become a stock market trading guru, you’ll probably need different principles.

Whatever it is, I hope you think hard about your own investing goals. And get to a point where you’re comfortable enough to decide what really works for you.

Investing is a tough open-ended question, but like most meaningful things in life, that’s what makes it sweeter when you finally find the answer.