Future Investment as The Important Component in Our Life

Future investment can be categorized as the important component in our life. One of the ways to do so is by practicing saving. Most of the young people nowadays did not realize the power of saving for their future. From only one ringgit per day to a bunch of money. According to the American Bankers Association (2013) “Invest a little for a long time and you end up with a lot”, this practices really help us when we need them. This is all about our life planning from the young.

“Putting off your wants now for a future reward is the key to reaching your goal. It will be a lot easier to save your money if you know what you’re saving for.” American Bankers Association (2013)

From the statement above, there will be a key to keep saving on priority by setting our mind to discipline our self to do it. Thus, it will make the saving is a habit and as a commitment that encourages us to do the saving without any hesitation. It is supported by Personal Wealth Advisory (2016) “One key to financial independence is a disciplined mindset”. This mindset setting should be instilled in children`s mind because it is easier for them to build habits such as financial discipline when they are young. Without a mindset setting, it could be just a waste when it becomes a task and tasks are often postponed and finally failed in saving. Then, when it becomes a habit, this is the best time to improve the saving rate and keep improving regularly.

The most important question that will lead us to do saving for the future is how you will pay for an emergency? Though, this question also is the answer to why we must do the saving. Some tips to do saving is by setting your goal first either a short-term goal or long-term goal. With this saving, it will help us in the future.

Furthermore, one of the advantages of saving is for retirement financial backup. However, many of the students are not realize the importance of saving for the future. As for the argument, the government should influence young people about saving behavior. There are many ways that can be done by the authorities to attract young people to do the saving. One of the ways is establishing a scheme that can bring beneficial reward for them like what has been done by Bank Simpanan Nasional (BSN) on SSPN. It is because “Investing in bringing youth into the financial system at a young age should help create a generation of adults with stronger money management habits”.

For a further step in future investment is expanding your saving wisely. There are many ways for a student to invest their money in a proper way. One of the right places is putting your money on business or doing entrepreneurship. Furthermore, our beloved prophet of Muhammad was an entrepreneur before and he had encouraged us to do so.

“And when the prayer has been concluded, disperse within the land and seek from the bounty of Allah, and remember Allah often that you may succeed” surah al-Jumu’ah.

Even the noble Quran asks us to do entrepreneurship because it is the best way of growing our money. But, as a Muslim, we must adhere the Syariah compliance to get a reward in this world and hereafter.

Other than that, instead of doing business there are many ways that can be our platform to grow our money. Nowadays, we can do investing with our saving as we called unit trust. One of the most popular unit trust in Malaysia is Amanah Saham Nasional Berhad (ASNB). The government of Malaysia encouraged all the citizen to do this investment as a future investment. Though, this platform also approved by Securities Commission Malaysia who responsible to look after trading investment company as adhering to Syariah compliance. In addition, most of the bank institution in Malaysia offers Islamic banking services.

Moreover, some of the students are disclosed to the good of the real investment world. The existence of Bursa Malaysia is one of the ways in doing the investment. However, before putting our money in stock trading, we must really understand the consequences of pros and cons about this platform very well. In the same way, goes to trading in cryptocurrency that has been popular a few years ago with the existence of Bitcoin and Ethereum. This blockchain technology is totally different compared to stock exchange process whereby there is no proper policy guided by the world banking institution and it's totally risky. However, most of the trader is attracted to invest their money in this platform because of their high-profit possibility.

According to Pamane & Vikpossi (2014), “investments with high levels of systematic risk can be expected to produce a high return”. This statement has been agreed by all economic scholars over the world. It was the reason why people still invest their money in cryptocurrency even they already knew their risk. But, if you can understand the market flow and the economic condition, so it might be the advantage to do some estimation on the market movement. As a student, we must explore how the real world is working as much as we can. Birgitt Flohr (1997) wrote an essay that quote “all our knowledge is founded” in “experience”, this statement is totally on the right track whereby we are now studying our life at all time.

Personal wealth growth

According to Investopedia, the definition of wealth is to measure the value of all the assets that owned by a person, company or country. Wealth is determined by calculating all the tangible and intangible assets and the capability of the individual or firm in consuming the goods and services. Basically, this is the sum of all property of them. The personal wealth growth planning has to start early by understanding the concept of wealth management and related between purchasing power and consumer behavior. Those ideas were an appropriate knowledge that student must acquire to manage their property well. This is also a crucial element to be a successful person.

A study conducted by Sarah Cormack in 2014 indicates that parents should allow their children in managing their wealth. They must be responsible for all their action toward their money. young people nowadays are more depending on the parent`s wealth. We also agree that the wealth can be inherited by children but are they ready in managing the property properly. Therefore, we have stood with the good strategies to avoid the pitfalls and applying the best practice to step forward. Cormack (2014) says that “great wealth is matched equally by challenges”.

Islam highlighted the importance of helping others because all people in this world are our responsibility. Because of that, Zakat has been introduced to help the people who entitle to get it such as student, poor and large debt person. All of this kind people we called as “asnaf”. All of our action is being seen and evaluated. So, put your wealth in the right place.

What we should do in wealth management is cash flow planning over each transaction. This strategy is in understanding your financial capability without using your money with a surplus. It might be difficult to control the consumption, but we must do it for future investment. Equally important is investment planning and management. As mentioned above the types of investment, we must verify which kind of investment that suits us whether active or passive investment. In my suggestion, as a student, we are encouraged to do passive investment such as the open saving account in ASNB or other unit trust institution that has low risk. This investment plan is basically depending on your goal and willingness to take the risk.