KUALA LUMPUR: Despite efforts by the government and private sector, young Malaysians are still lacking in financial knowledge, especially in investing.
Youth and Sports Minister, Khairy Jamaluddin said for the young, the idea of saving in their Savings accounts, where only the spare change was kept, was an inaccurate method as inflation and the cost of not investing will decrease the real value of the savings, year on year.
‘Their complaints on the cost of living can never be appeased by merely asking for pay or income increase as long as they don’t start building on their wealth through investing in stock market and unit trusts,” he said during the launch of the InvestSmart Fest 2017 by the Securities Commission Malaysia (SC).
Quoting the Personal Wealth’s Young Investor Survey 2016 carried out by The Edge, Khairy said only seven per cent of the respondents invested more than 30 per cent of their monthly income while 45 per cent only allocate five per cent or less of their monthly income for investment.
‘The rest just don’t invest at all. Lack of interest, insufficient knowledge, low financial literacy, shortage of funds and capital are among the major contributors to this worrying trend.
‘Government organisations and private firms alike, be it for profit or not, albeit differences in intents and goals, are all working towards the same purpose, which it to get more young people to invest for their financial security,” he said.
Khairy said the mission to have more young people to begin investing was imperative as more mega trends come to knowledge.
‘Malaysia will face an aging population when more than 15 per cent of Malaysians will be older than 65 by 2035, and this reminds us of the need for individual financial security, A systemic safety net put in place might face a strain it never faced before.
‘We have made measurable steps forward, especially with the amendment to the Insolvency Act 1967 just last week, but it will take time for the Malaysian youths to start seeing opportunities through investing as a reward, not just purely risk.”
It is essential, Khairy said, to take a step back and recalibrate the initiatives to effectively get the young ones to invest according to their mindset of wanting simplicity and instant gratification, even if they were to invest.
However, he said Malaysia is moving towards the right direction when Bank Negara Malaysia Governor, Tan Sri Muhammad Ibrahim called for financial institutions to embrace opportunities from FinTech innovations.
He added that with a young generation that does not invest for their future, the nation risks in building a society that will not be able to withstand potential shock of an aging population, economic inequality and post-work or post-wage; eventually.
Happening for three days over this weekend at the Kuala Lumpur Convention Centre, InvestSmart 2017 aims to promote financial and investment literacy in enhancing investor empowerment.
Since its launch in 2014, the fest has reached out to over one million Malaysians through seminars, roadshows and engagement with community leaders nationwide.
This years’ fest brings together 65 capital market institutions including associations, industry players and government agencies under one roof to educate people in promoting long term savings, investments and retirement planning.