Why EPF is better than ETFs and Unit Trusts (mostly)

[@FIRLco]

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[@anthony.L]

Im a foreigner living in Malaysia since 6.5 years. Your EPF system is so great, better than any European country! The fund has a great diversity and capital is guaranteed! As my greedy employer doesn't give me his 13% part, (not compulsory for foreign employees) I put 40% from my salary on EPF. I also put 1k/month on PRS and 1k/month on unit trust. (PS: Im single man, no kids and no gf that's why I'm able to save a lot XD)

[@FIRLco]

Wow thanks for sharing. Hope you get a better employer haha.

[@zoomfin]

And you lose in forex as the MYR continously devalues.

[@anthony.L]

@@zoomfin Im not planning to send my money to my home country as Im not planning to move back there!

[@hansontan6025]

@@anthony.L if he plans to live in msia after 55 then it shld be ok … dont under estimate the power of compounding (exponential)… really a snow ball effect which is more than inflation and rm depreciation

[@Mugenstylo]

Beware, if you pass away here. Your family / beneficiary will have to personally claim it here.

[@ahmadfadzlizulkifli1329]

Thank you FIRL. Clear and easy to understand. Keep the content coming

[@lazyguycooks6244]

Good sharing man. With possibility to top up 60k per year plus reaping dividends till 100 is another bonus with EPF.

[@adrianlim116]

Simple but informative and easy to understand. Thank you for this video and explanation. Keep up the good work.

[@FIRLco]

Glad you liked it!

[@sonialee8888]

my experience on mutual fund was my return after 10 years is negative 50 %

[@sonialee8888]

His is right 1 million in bank only give 18,500 to 29000 interest in one year .Just enough to survive 4,6 months without house loan car loan .If EPF ,dividen about 60,000 per year enough 1 year expenses. Better start transfer saving to EPF. yearly. .

[@shaunyap9663]

1 1:27 History 2 2:45 Financials 3 4:25 Comparison 4 5:49 Portfolio 5 8:34 Advantages 6 13:30 Risks & Disadvantages

[@FIRLco]

Hei Shaun thanks again for the timeline subs - please check your Whatsapp we dropped you a message

[@cawan15]

Thanks for very good knowledge.

[@FIRLco]

Glad you like it!

[@stevenjames2874]

Because it is likely worry free unlike unit trust, insurance savings plan (which possibly ended up with negative returns), etc.

[@AilemaKamwei]

Gain so much new knowledge from this video. Gave me new perspective whether to retain my money in Acc 1 or invest into mutual fund.

[@FIRLco]

Glad you learned something

[@veron4best]

u have to study what instrument did mutual fund invested into. your horizon of investment. when we say withdraw money from Acc 1 to invest. but we tend to forgot we also invest using EPF too. Think of risk and reward vs EPF 6% if ur mutual fund able to churn out 9% annually in long run, what's the risk u r taking. does it worth the extra 3% return of reward. EPF is more of like ponzi too. haha. since the return is above average in the world.

[@FIRLco]

@@veron4best But our inflation rate is slightly higher, so not surprising our dividend rate for EPF needs to be higher.

[@sonialee8888]

You are absolutely right

[@rhuyisia8163]

Thanks John for sharing! 👍

[@FIRLco]

Welcome!

[@KLPMBOYZChannel]

Great explanation 💯

[@FIRLco]

Glad u enjoyed it

[@michaelbyz23]

Thank you. Good information!

[@twlim08]

Awesome video. 20 years with Mutual Fund, given enough time and allocation, poorly return for my case.

[@JohnHuoVUCA]

@Eric Lim, sad to hear about your case.

[@paulpaul7777]

Great video❤ I would like to confirm with u if KWSP has implemented Tiered dividend as u mentioned (as a down side) at the end portion of this video?

[@JohnHuoVUCA]

Not yet as far as I know! But you never know....

[@MaverickEchoJuliet]

If you emigrate out of Malaysia, you are allowed to withdraw all of your EPF savings.

[@jye7027]

the problems with the "top" Malaysia mutual fund company are as follow : a) lousy consultants that unable to provide sound investment ideas. They just push the funds selection to the investors themselves. b) only few funds doing well c) fund managers do not explain why their funds did poorly d) limited good funds using epf money e) last 2 years the fixed income funds (bonds) get negative return instead f) most of the funds are too diversified and mostly invested in China

[@chelvik3975]

Thanks for sharing 🙏

[@FIRLco]

Welcome!

[@abulashraff]

Good sharing!

[@myyong6613]

Hi FIRL team, thanks for sharing this. May I know your view on the voluntary contribution to top up EPF up to RM60k per year? Is it a worth considering option?

[@LA-ly1nt]

Yes, worth it. Just to share my calculation for myself. So far, my and my employer's contribution is RM 750. I made voluntary contribution of RM 250 monthly, consistently. If I continue this until my retirement, I will achieve over RM 600K in EPF. The beauty of self contribution is, if you in dire need to use the money for a few particular months, you don't have to make voluntary contribution. Of course, if you wanna make it work, you must be disciplined and determined. This is the money that you will spend in retirement, when you no longer have any source of income.

[@arvinpillai681]

Does the global comparison of pension fund returns take into account respective currency inflation?

[@FIRLco]

No it doesn't. Inflation depends on your lifestyle.

[@arvinpillai681]

@@FIRLco while I think I understand what you're saying the cost of basic goods that make up the CPI generally affect everyone's lives regardless of your lifestyle. Which means that respective currency inflation still matters, Malaysia had an average inflation of about 3% but Singapore's is much lower which means the net returns may well be higher in foreign pension funds if adjusted for inflation.

[@FIRLco]

​@@arvinpillai681 Perhaps. But if you're spending in RM it doesn't really matter. However, we can all agree both the CPF and EPF are well run.

[@ytoh6408]

As Malaysian population gets older, there will be a point where withdrawals are more than contributions. Wonder if there are any countries where this is already happening.

[@FIRLco]

probably the european countries soon.

[@stanicng]

Good sharing. I have a question, if a person migrate to other country and surrender the citizenship before it turn 55, can the person withdraw all the money?

[@JohnHuoVUCA]

Yes they can @Stanic Ng

[@carrotsak]

The problem is the MYR going smaller and smaller. Sgd is 1 vs 3 now.

[@FIRLco]

Not sure how this is relevant. Can you explain more?

[@pc6879]

If you're planning to retire in Singapore, then it's a problem. If not then there's no problem as your investment returns in RM is to pay for expenses in RM. Plus, which Malaysian retire in Singapore? If you're planning to do so, then perhaps you might need to start investing in the Singapore bourse instead or bang on the NYSE.

[@FIRLco]

@@pc6879 good point

[@zoomfin]

@@FIRLco It means that real inflation will be higher for the common public in retirement.

[@FIRLco]

@@zoomfin Inflation depends on your lifestyle.

[@sonialee8888]

depreciation in RM kill our saving in EPF

[@naifongkoh6953]

Sounds like great…but what about the devaluation of RM against USD

[@FIRLco]

if the productivity growth in Malaysia (GDP produced per employment) can outpace wage growth, then we might see MYR strengthening. Other factors are the US lowering interest rate that may boost MYR.

[@naifongkoh6953]

@@FIRLco Yes, perhaps the new Mandani initiatives might attract sufficient higher-value investments eg. Tesla/SpaceX, digital economy, aerospace technology etc, slow the brain drain and extricate the country from the perpetual cycle of relative high cost, low wages, low profits and relatively lack of competitiveness…

[@sonialee8888]

you do not need to promote.After many years ,our experience tell us you are right.

[@JuanYeoh]

The biggest problem with investing with EPF is that gains are calculated in ringgit. If you look at inflation adjusted gains, US ETFs are still a bigger gain.

[@JohnHuoVUCA]

Fair point, but the base denomination of the contribution is in MYR so we can't benchmark their gains in USD dollar terms.

[@dhashanisivaratnam2126]

Its a goood place to save for retirement, but the fact that one cannot touch it till 55 is a bit demotivating. But then again, we neet to have 6-8 months of emergency fund, then whatever is extra I guess can put here. Please make a video on where we can keep our emergency funds, and get back some good returns, at the moment I just put it with my housing loan to reduce the interest rate but is there anything better?

[@voshak]

What happenned to John???

[@FIRLco]

full context: kzbin.info/www/bejne/sILSoql3gNdmetk

[@sonialee8888]

EPF support many members to survive during MCO

[@CodeCrafted1008]

why did you guys left mr money tv?

[@FIRLco]

We're also wondering why. We're as clueless as you.

[@carpetsomalia7904]

EPF and ASB and Tabung Haji is only holy grail investment in Malaysia. Free risk and consistent return but Tabung Haji doing poorly since 2018.Go read unit trust factsheet,their 5 years return is generally poor compared to EPF and ASB

[@zoomfin]

Mutual Funds sucks!

[@FIRLco]

Most of them yes

[@Jeffreyckcheah]

Epf doesn’t have any service charge or maintenance fee like banks atm , current ac etc(Epf doesn’t provide that kinda services, so why charge?) Now, let’s look into an average 10 years return of 10% while Epf only average around 6%, Where’s does the other 4% goes to??? It’s call back end charges which is even more expensive than bank charges. In the long term, invested fund in EPF keeps growing in size(6% compounding rate), 4% compounded rate is gonna be huge opportunity cost!!!

[@yazidtaib4566]

why bother invest in unit trust ? why EPF allow such thing?

[@FIRLco]

Expanding options for EPF holders

[@sonialee8888]

only advisable to withdraw for this purpose if saving has exceed 1million