A nationwide survey on the financial management habits of everyday individuals by digital asset exchange Luno shows that Malaysians predominantly view wealth as an important catalyst in attaining greater financial freedom for both themselves and their families.
A majority of respondents (60%) state that the importance of having money to them is for safeguarding their family’s financial well-being. Additionally, 58% of respondents state the importance of attaining a financially flexible lifestyle in the future.
According to the survey, 64% of the total sampled population state that they focus on regular savings. The data also illustrates that respondents aged between 18-34 years old were most likely to be in (66%) the regular saver’s group; in comparison, only 55% of 55 plus-year-olds are regular savers. This indicates that the younger generations of Malaysians tend to be more proactive in their savings compared to the older generations.
In terms of where these regular savers would likely allocate their savings to, the survey found that 46% and 41% of them prefer government-supported unit trust funds (ASNB) and pension funds (EPF/PRS), respectively.
This is possibly due to the fact that these funds are well-established and provide decent investment returns, and will compound in value over time. It is also interesting to note that 26% of these savers state that they would invest their savings into gold as a store of value; possibly as a way to hedge against inflation.
When it comes to making investment decisions, the survey points out that respondents are more likely to be influenced by family members and peers (31%) compared to professional financial advisors or financial service companies (19%).
This can be attributed to the fact that Malaysians, especially younger people, have traditionally relied on their more senior family members for guidance in life. As such, Malaysians tend to adopt the personal financial management best practices that have been tried and tested by their family in the past. According to the data, most (34%) of the respondents tended to seek financial advice about long-term savings and investment strategies, while financial advice on budgeting, financial planning, and debt management was less popularly sought out (24%).
The survey highlights that Malaysian investors are more confident in the idea of using cryptocurrencies as a viable method in attaining long-term wealth creation and preservation. A total of 62% of current investors state that they would consider investing in alternative assets like cryptocurrencies as a way to diversify their portfolios. Furthermore, 37% of respondents state that the ability to utilize cryptocurrencies for long-term investment purposes was an interesting feature of the digital asset. On a similar note, 40% of respondents states that using cryptocurrencies as an alternative store of value was an attractive feature as well.
Malaysians are generally thoughtful and aware of risk management when investing into cryptocurrencies. For example, the survey highlights that 42% of cryptocurrency investors state that they only purchase cryptocurrencies from reputable and trusted exchanges. In turn, roughly 43% of these respondents would ensure that they conduct proper and thorough research prior to committing to a transaction. To limit their financial exposure to cryptocurrencies, 57% of respondents state that they would only invest what they can afford to lose.
Cynthia Magdalen Ignatius contributed to this article
