Time and time again, I’d received questions like:


  1. Should I buy Maybank stocks today?
  2. What do you think about oil & gas stocks?
  3. Should I cash out my EPF to pay off my mortgage?
  4. What do you think about Bitcoin?
  5. Is this the right time to buy properties?


And… the list goes on.

So, what are my answers to the questions above?

Personally, my short answer is, ‘I don’t know’. This is because, I do not know whether the above investments are suitable to you as an individual. We need to recognize that all of us are different, uniquely created, and thus, would be investing differently from one another.

I believe, a better answer to the questions above is, ‘What is Your Plan?’ This involves an assessment whether or not, Maybank, oil & gas stocks, unit trust, EPF, real estates, … etc are investments that are suitable to you as an investor.


Why Investing is Confusing?

To many, investing is a complicated subject and one that is overwhelming if you are new to it. The reasons include:


  1. There are different types of investment products in the market. They include stocks, bonds, real estates, commodities and businesses… etc.
  2. There are different segments for each type of investment products as stated above. If we take stocks as an example, we have growth stocks, dividend stocks, value stocks, blue chips, small caps, … etc.
  3. There are different methods of investing for each type of investment products. For stocks, you may choose to buy and hold, do short term trading, invest via unit trust or EPF, short-selling, … etc.
  4. And above all, there are many people who are not really investing but ‘believe’ that they are, in fact, investing. These people include traders, gamblers, and even speculators. Thus, they had made investing into a more complicated subject, especially if they profess to be a successful ‘investor’.


What ‘Investing’ is Really about?

In most cases, the subject of investing is made confused because most people are not aware of the differences between an:


  1. Investment Plan,
  2. Investment Procedure, and
  3. Investment Product


Thus, many today are still trying to get into investment products (stocks, real estates, unit trusts, … etc), or try out investment procedures (buy & hold over the long-term, short-term trading, dollar cost averaging… etc) without having an investment plan first. Hence, many would unconsciously follow this order when buying their ‘investments’:


  1. Select Investment Products
  2. Explore / Test Out Investment Procedures or Strategies
  3. Have an Investment Plan, if ever, it is needed.


This approach to investing is likened to one who is trying to build his house without first having a blueprint. That is not investing and clearly, it may not be a sustainable method to building wealth. So, what then is investing?

Here, I’ll share what I’ve learnt from reading Rich Dad’s Guide to Investing, a solid read for anyone who intends to learn about investing from scratch. I have learnt that – Investing is a Plan, not a Procedure or a Product. Hence, a savvy investor would instead follow this path when investing:


  1. Have an Investment Plan.
  2. Explore and Learn Investment Procedures or Strategies.
  3. Select Investment Products.


It is the exact opposite route taken by most people when investing today and one that helps to build sustainable wealth over the long-term. Here, I’ll touch briefly on the three stated above so that you can appreciate their significance as you journey your way towards financial success:


Step #1: What is an Investment Plan?

An investment plan is like having a travel plan as stated below:


I’m travelling from Subang Jaya to Petaling Jaya in 20 minutes by X vehicle.


It has four elements:

  1. Where You Are Now – Subang Jaya
  2. Where You Want to Be – Petaling Jaya
  3. Duration (Travel Time) – 20 Minutes
  4. How to Get There Safely – X Vehicle

Thus, investing starts with an assessment of your life. This includes your age, marital status, earning capabilities, financial status, set of skills, tolerances of risk, expected returns, and a vision of your future self. Often, it takes quite a fair bit of soul searching to find your unique answers to the questions stated above. So, please take your time to do so. Don’t rush into it.

All in all, the first line of your investment plan should look like:


  1. I want to increase my monthly income from RM 5,000 to RM 10,000 in 3 years by X strategies.
  2. I want to earn a passive income of RM 1,000 a month in 2 years by Y strategies.
  3. I want to grow my net worth from RM 500,000 to RM 1,000,000 in 5 or 10 years by Z strategies.


So, what are your X, Y, or Z strategies? Then, let us move onto Step #2:


Step #2: What is an Investment Procedure?

Let’s use the travel plan stated above:

I’m travelling from
Subang Jaya to Petaling Jaya in 20 minutes by X vehicle

From which, your X vehicle could be any of the following:


  1. A Car,
  2. A Bus, or
  3. LRT


If you know how to drive, then, you would choose a car. If not, you may hop onto a bus / LRT / Grabcar / Taxi to get to your destination.

So, the skill of driving is a procedure, an act of travelling to where you intend to go. Likewise, the skills of investing are procedures that act as transports to bring you to your financial destiny. The more skills you have today, the more vehicles you get to choose from to get to where you intend to be.

In travelling, some procedures include:


  1. Walk or Run,
  2. Riding a Bicycle,
  3. Drive a Car, or
  4. Fly a Plane


In investing, the procedures include:


  1. Working (Get a Job or Start a Business)
  2. Saving (Building Cash Reserves)
  3. Trading (SMA, EMA, Bollinger Bands … etc)
  4. Investing (Growth, Value, Dividend … etc)


If you felt that you are lacking in financial skills, don’t worry. I’m like you too and found that most savvy investors had started off like you too. Fortunately, investing is a learnable skill where the success of an investor lies in his ability and willingness to learning it. So, start and keep on learning!


Step #3: What is an Investment Product?

By now, I think you should get the picture. An investment product is likened to a X vehicle: a Car, a Bus, LRT … etc. One vehicle is not necessary better or worse than other vehicles. It is about suitability.


For instance, two guys: Mr. A and Mr. B want to travel from their residences in Subang Jaya to Penang:


  1. Mr. A is a businessman who intends to reach Penang in 1 hour from Subang Jaya. Hence, he catches a 50-minute flight from the Subang Airport.
  2. Mr. B is on holiday and wishes to have a delicious Ipoh Chicken Rice before reaching Penang. Hence, he drives.


Thus, a car is not necessarily better than a plane. Likewise, investing into real estate is not necessarily better than stocks, bonds, unit trusts, gold, EPF … etc.

Two guys may invest in stocks but for their own reasons. For example,


  1. Mr. C aims to build a stock portfolio that earns RM 1,000 a month in dividend income. He intends to buy and keep dividend stocks as long as their dividend yields are 5% and above. Thus, Mr. C may consider an investment into a REIT that pays 6% dividend yields as the REIT fulfills his investment criteria.
  2. Mr. D aims to build a stock portfolio that appreciates in value for the long-term. He intends to buy and keep stocks that have grown profits consistently and are expandable over the long term. Thus, Mr. D may consider an investment into growth stocks as they fulfill the needs of Mr. D’s objectives much better.



In short, here are some key takeaways:


  1. Investing is a Plan, not a Procedure or a Product.
  2. A Plan helps to determine Your Procedures and Products.
  3. One Product is not necessarily better than Another Product.
  4. Take time to do Soul-Searching.
  5. Read Rich Dad’s Guide to Investing for Ideas & Inspirations.
  6. Your Plan will Advance according to your Skills (Procedures).
  7. Watch Webinar Video – Return on Net Worth Analysis


To Your Investment & Financial Success! Ian.

Ian Tai
Ian Tai

Financial Content Machine. Dividend Investor. Produced 500+ Financial Articles featured in KCLau.com in Malaysia and the Fifth Person, Value Invest Asia, and Small Cap Asia in Singapore. Regular Host and Presenter of a Weekly Financial Webinar with KCLau.com. Co-Founded DividendVault.com, an online membership site that empowers retail investors to build a stock portfolio that pays rising dividends year after year in Malaysia and Singapore.

    3 replies to "Investment is a Plan … not a Procedure or a Product"

    • Chris

      Hello Ian,

      Good info. Any REIT course or book you can recommend to learn more? I’m aware of REITMethod course. Thanks

    • Ian

      I think, investments into REITs can provide both regular dividend income and capital appreciation. Who says you can’t have both? A common myth in investing is that ‘if I invest in dividends, I am forgoing capital gains’ or ‘if I invest for capital gains, I am forgoing dividends.’ But, I believe, ‘investing for dividends = investing for capital gains.’ and ‘not investing for dividends is not investing for capital gains’. Of course, my belief is debatable. But, based on findings of stocks listed in Bursa and SGX, stocks that pay dividends consistently are ones that have appreciated sustainably over the long-term. So, if I am you, I would focus on investing for regular income, let’s say RM 1,000 a month’, and the capital gains would be taken care of by itself. All the best.

    • Albert

      Hi Ian, This is a very good piece or advice/guide. I have a question, it is common for a normal person to have 2 plans? For example, I want to set aside of some money into REIT that earns RM 1,000 a month in dividend income. And at the same time to build a stock portfolio that appreciates in value for the long-term.

      I am thinking maybe I can use the passive income from REIT to build the stock portfolio as Mr. D. But I am not quite sure am I insane by thinking like this?

      Thank you in advance.

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