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How to multiply your children’s ang pao money

Chinese New Year is almost upon us.  No doubt many are looking forward to the long weekend to visit relatives, enjoy good food and of course, giving and receiving of ang paos.

As parents, your annual practice would be to either keep your children’s ang pao money for them or let them manage it themselves. Some choose the former because they are worried that their children will all their ang pao money on things they don’t need. On the other hand, keeping the money for them in a savings bank account generates less than 1% of interest per year. At that rate, you’ll be losing some of that money to inflation! In addition, handling your children’s money for them may not necessarily teach them how to manage the money you have saved up for them wisely when they are old enough.

A good alternative is to use this festive season to teach them to think about multiplying their money instead of spending money.  While some investments require a large capital, there are a few options you can use to introduce the idea of investing to your children even with their modest ang pao collection.

Here are 4 investment options you can participate in with RM100-RM500 or less this year:

1. Amanah Saham Malaysia

The government unit trust is comprised of two types of funds:


  • Unit price is fixed at RM1 per unit.
  • Your capital is guaranteed by the government.
  • You can expect annual returns of between 6% – 9%.


  • Unit price changes daily according to the market.
  • Capital is not guaranteed.
  • Returns are based on how the fund performs.

2. Private Retirement Scheme

This is a long-term investment scheme to assist Malaysians to have more money when they retire. Contribution to this fund is entirely voluntary, so you can deposit different amounts of money in it whenever you want. Return rates vary but are higher than those offered in a traditional savings account.

3. Local Stock Market

The minimum number of units you can purchase is 100. Some stocks on the KL Stock Exchange are priced at RM1 or less per unit, making it more affordable that it initially appears. Note, however, that this requires some prior research on your part before committing to a certain stock if you want to avoid losing money.

4. Global Stock Market

The Internet and information technology have made a lot of things that were once inaccessible to us easily available.  Did you know that you can invest in companies like Apple, Google, Facebook, Starbucks and Alibaba by just a few clicks on your computer?  These are companies that has been enjoying strong and consistent growth because they have a global revenue stream.  So next time your teenagers use their iPad, go on Facebook or visit Starbucks with you, you can talk about how those companies make good money and why it makes sense to invest in companies like them!  Even though those stocks can be deemed as expensive, there is no minimum unit to invest, unlike Malaysia.  Most banks now offer the option to invest in global markets through their investment products, or you can also learn to do it on your own.


These 4 options allow you to explain the concept of compounding effect to your next generation. They will be able to see firsthand that money can compound over the years and reap the rewards of their patience at the end of the term. Seeing results for themselves is an effective way of reinforcing the importance of setting aside money to invest in their minds.

Getting your children to start thinking about money multiplication early prepares them well to handle larger investments as adults.

Take this small step this Chinese New Year for a wealthier, prosperous future for your children!

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