131) Percentage in Unit Trust Using 3PF

131) How to Calculate Investment Percentage in Unit Trust Using the Retirement Fund.

There are many who had invested into Unit Trust using their Retirement Account.
Let's call the Retirement fund as the 3PF account.

There are also many who are not willing to invest in the Unit Trust using their 3PF fund. The main reason is that it is safer in the 3PF account. There is a guarantee return of at least 2.5% per annum.

I'm sure you had heard on the benefits of investing.You need to make your money to work harder for you.

Do you want to gain the benefits?

Do you know how much you are actually risking your retirement money?

 


Let's use some numbers to show the real implication of investing using money from 3PF account. Look at the actual risk that you are taking. The 3PF fund is divided into 2 accounts. Account I (70%) and Account II (30%). There is also a basic amount required for each age.

You need to minus the Basic Amount from Account I before the balance can be invested. Furthermore, only 30% of Account I can be invested every 3 months.

For example, let's use a 30 year old. He has $100,000 in his 3PF account.
Amount in Account I = $70,000 (70%)
Basic Saving @ 30 year old = $29,000
Balance = $70,000 - $29,000 = $41,000
Max 30% = $41,000 x 30% = $12,300

So, he can invest up to maximum $12,300 into Unit Trust.

That means he can only invest:
= $12,300/$100,000
= 12.3%

His investment is only 12.3% of his retirement fund.

Let's assume no additional amount contributed into 3PF for next 3 months.
He invested again after 3 months.

Amount in Account I = $70,000 - $12,300 = $57,700
Basic Saving @ 30 year old = $29,000
Balance = $57,700 - $29,000 = $28,700
Max 30% = $28,700 x 30% = $8,610.

So, total amount into Unit Trust = $12,300 + $8,610 = $20,910.

After invested 2 times, it is $20,910/$100,000 = 20.91%.

(We used $100,000 as the total Retirement amount is still $100,00 in both 3PF & Unit Trust funds.)


From this calculation, the invested percentage is still a low of 20.91%. 

Even if you lose all your money in the Unit Trust investment, you still have a high percentage in your 3PF. The remaining 79.09%

Let's assume no additional amount contributed into 3PF for next 3 months.
He invested again after 3 months for the third time.

Amount in Account I = $70,000 - $12,300 - $8,610 = $49,090
Basic Saving @ 30 year old = $29,000
Balance = $49,090 - $29,000 = $20,090
Max 30% = $20,090 x 30% = $6,027.

So, total amount into Unit Trust = $12,300 + $8,610 + $6,027 = $26,937.

After invested 3 times, it is $26,937/$100,000 = 26.94%.

Let's assume no additional amount contributed into 3PF for next 3 months.
He invested again after 3 months for the fourth time.
In the fourth time, he is already 1 year older.
He is 31 years now.

Amount in Account I = $70,000 - $12,300 - $8,610 - $6.027 = $43,063
Basic Saving @ 31 year old = $33,000
Balance = $43,063 - $33,000 = $10,063
Max 30% = $10,063 x 30% = $3,018.

So, total amount into Unit Trust = $12,300 + $8,610 + $6,027 + $3,018 = $29,955.

After invested 4 times, it is $29,955/$100,000 = 29.96%.

Let's assume no additional amount contributed into 3PF for next 3 months.
He invested again after 3 months for the fifth time.

He is 31 years now.

Amount in Account I = $70,000 - $12,300 - $8,610 - $6.027 - $3,018 = $40,045
Basic Saving @ 31 year old = $33,000
Balance = $40,0450 - $33,000 = $7,045
Max 30% = $7,045 x 30% = $2,113.

So, total amount into Unit Trust = $12,300 + $8,610 + $6,027 + $3,018 + $2,113 = $32,068.

After invested 5 times, it is $32,068/$100,000 = 32.07%.

Let's assume no additional amount contributed into 3PF for next 3 months.
He invested again after 3 months for the sixth time.
He is 31 years now.

Amount in Account I = $70,000 - $12,300 - $8,610 - $6.027 - $3,018 - $2,113 = $37,932
Basic Saving @ 31 year old = $33,000
Balance = $37,932 - $33,000 = $4,932
Max 30% = $4,932 x 30% = $1,479.

So, total amount into Unit Trust = $12,300 + $8,610 + $6,027 + $3,018 + $2,113 + $1,479 = $33,547.

After invested 6 times, it is $33,547/$100,000 = 33.55%.

Let's assume no additional amount contributed into 3PF for next 3 months.
He is older another year. He is 32 years now.

Amount in Account I = $70,000 - $12,300 - $8,610 - $6.027 - $3,018 - $2,113 - $1,479 = $36,453.
Basic Saving @ 32 year old = $37,000
Balance = $36,453 - $37,000 = -$547.
It is below the Minimum Basic Amount.
No longer able to invest more.

NOTE: Losing all in Unit Trust is almost impossible. For more details, refer to my blog link below:
http://highlevelrules.blogspot.my/2017/07/can-you-lose-all-your-investment-in.html

 
Now, which do you prefer?
A) Keep all your retirement money in the 3PF.
B) Invest a small percentage into Unit Trust.

Get more information on:
Why You Should Diversify Your 3PF into Unit Trust?
http://highlevelrules.blogspot.my/2018/03/diversify-your-3pf-into-unit-trusts.html

Would you like to know more about investing in Unit Trust? 


Please contact your Unit Trust Consultant.
Have an open discussion on the Benefits & Risks of Investing In Unit Trusts.
There are certain strategies you can use to manage your investment better.

The Unit Trust Consultant will be able to guide you on your retirement and other financial goals.