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As ringgit falls, gold gains currency among young Malaysians

KUALA LUMPUR — The strain of higher living costs, and now the ringgit’s drop in value against the US dollar, have made for tough times for many Malaysians, and those who feel secure enough are those who have managed to save abroad or who hold investments in gold. This includes youngsters, such as college student Muhammad Syarifuddin Mohd Jamil, 21, who is also a part time gold dealer. The engineering student at Australia’s University of Wollongong, began investing small amounts in physical gold early last year, after learning about it from a financial seminar for students in Sydney.

Student Muhammad Syarifuddin Mohd Jamil now has nearly 100 clients who have bought gold through him worth over RM200,000 in the last 10 months. Photo: Syarifuddin Mohd via The Malaysian Insider

Student Muhammad Syarifuddin Mohd Jamil now has nearly 100 clients who have bought gold through him worth over RM200,000 in the last 10 months. Photo: Syarifuddin Mohd via The Malaysian Insider

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KUALA LUMPUR — The strain of higher living costs, and now the ringgit’s drop in value against the US dollar, have made for tough times for many Malaysians, and those who feel secure enough are those who have managed to save abroad or who hold investments in gold. This includes youngsters, such as college student Muhammad Syarifuddin Mohd Jamil, 21, who is also a part time gold dealer. The engineering student at Australia’s University of Wollongong, began investing small amounts in physical gold early last year, after learning about it from a financial seminar for students in Sydney.

After listening to the seminar, Mr Syarifuddin said he felt the need to act on saving more even while studying.

“I was keen in real estate but I was in no position to buy any real property. So I did some research and found that gold and silver were the next best investments, were more convenient and easier for me to secure,” he said in an interview.

“The country’s political turmoil worries me. I know there’s nothing much I can do as a student except to start making small change to secure my future. So I started out buying 1 gold dinar (4.25g) with 91.6 purity. Then another gold dinar with 99.9 purity,” Mr Syarifuddin, who is from Penang, said. The student faced opposition from his family, who worried that he would fall victim to scams.

But his gold savings grew from one to 10 dinars. He met a dealer who then took him under her wing, and observing his enthusiasm, made him her understudy.

“She had faith in me and that made me want to do more to show that a young person like me does think about the future.

“Not just to secure a good education but to actually secure some wealth while studying,” said Mr Syarifuddin, admitting to wanting to be a millionaire before he turns 30.

He now works as a gold dealer with a company in Malaysia, all the while studying from abroad. Operating outside Malaysia is not impossible as long as there is a good Internet connection, he said.

“The company operates 24-7. It allows people to buy gold at any time of the day. You can save up in gold accounts which are backed by physical gold or just order real gold right away,” said Mr Syarifuddin. He still buys physical gold and uses the commission earned from introducing new clients to reinvest in the precious metal. With nearly 100 clients who have bought gold through him worth over RM200,000 in the last 10 months, Mr Syarifuddin says his family is finally supportive of him, looking at his success. He has also taught other friends about the value of saving in gold for the future.

“We do not have much money but if we can discipline ourselves buying as small as 1 gramme a month is good enough,” he said.

A GOLD CUSHION FOR UNCERTAINTY

The trend of young people investing in gold is growing, said financial and investments expert Shan Saeed, as more of them learn about how assets are important in savings, and not cash alone.

The chief economist of IQI Holdings said he observed a 20 per cent increase in gold investments among Malaysians over the last four years, with young people and students going for gold, while working adults in their 30s and 40s tended to prefer investing in real estate.

“If they want to have insurance over their money, it’s gold, silver and real estate that can actually save you in risky times,” Mr Shan said in an interview.

Mechanical engineering student Ahmad Sayuti Abu Khuzafar, 22, is another example of such a youth.

The student at Technical University of Malaysia (UTEM) in Malacca said he was motivated to invest in gold even at this stage in the hopes that working life after graduation would not be such a struggle.

“I bought some gold few months ago. I started to think about gold investment after one chit chat session with my friends at the coffee shop,” said Mr Sayuti. The youth from Perak said he was encouraged to invest in gold after doing more research and upon the advice of an introducer.

“Having cash is good but looking at how our ringgit has depreciated against the US dollar over the fast few months made me feel insecure about my future.

“Gold has always been the real currency, so I thought why not. This is not paper gold. This is physical and I bought it from a reputable company. I try to buy at least 1 gramme a month,” he said.

Asked if he had a specific goal, Mr Sayuti said he wanted to have at least enough so that by the time he graduated, he could use the savings as downpayment for a car, or an apartment, or to pay off his student loan – things an increasing number of young Malaysian graduates say they cannot afford to pay for with their starting salaries.

SAVING ABROAD

Uncle and nephew duo, Jeva and Sree, not only invest in gold but in fixed deposits, and have US dollar savings accounts in India and Singapore. Declining to give their full names, Jeva, a businessman, and Sree, an oil and gas executive, said most of their fixed deposits were in India, where interest is better. “The interest there is better. We also own property there because we travel to India a lot,” said Jeva. Last year, their family decided to invest in US currency in Singapore.

“It’s a pool account among the siblings. We feel like we need to diversify our investment,” Sree said.

Jeva added that the current economic instability had made them more cautious about investing within Malaysia.

“We have some here but we also put our money elsewhere. At this age, I don’t think I will migrate. Malaysia is still home despite all the happenings. I am just looking after my children,” said Jeva, a father of two.

Mr Shan, the economist, said it came as no surprise that Malaysians were diversifying and moving their assets and savings abroad.

But many still invest in Malaysia, especially in real estate, metals bonds and even in art pieces, he added.

Malaysia still had strong economic fundamentals, generally, he added, and estimated that 95 per cent of Malaysians still held investments locally.

While Malaysians are dabbling in different portfolios, art being a relatively new trend, real estate and stocks remain the traditional preferences.

“But since stocks are very volatile right now, savvy investors are actually pulling their savings out of stocks and moving towards real estate.”

He said the last four years have seen an increase by 50 per cent in real estate investments by Malaysians.

The ringgit has dropped to its lowest value in 17 years and is Southeast Asia’s worst performing currency.

In addition to depressed commodity prices and other external factors, there are also fears that Malaysia can be once again exposed to speculative attacks.

Working class Malaysians have already been grappling with a higher cost of living, and in April this year, the goods and services tax at 6 per cent took effect. THE MALAYSIAN INSIDER

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