Many Malaysians grew up with football and nothing beats the feeling of running around the padang with your buddies chasing after a ball.

Whether the football was kicked to the left side or right side of the field, many, regardless of designated roles, would chase the ball relentlessly in a classic display of what Malaysians call kampung football.

In a matter of minutes, everyone would abandon their designated positions as defenders, midfielders, strikers and even goalie, just so they could kick the ball.

No structure, tactics or game plan at all. Just the pure need to kick the football.

This is exactly what transpires when it comes to investing large savings. Most people chase stocks, Bitcoin, or anything that rises just like chasing the football. It is often driven by pure adrenaline.

If you had RM900,000 today in your bank accounts, would this be your preferred game plan?

What if you enter the Champions League?

You can’t play Malaysian kampung football and expect to beat Barcelona or Bayern Munich in a professional Champions League football match.

You would need a fluid formation comprising world-class keeper, solid defensive line, creative midfielders, and skillful strikers. Basically, investing is similar to being a football manager like the great Sir Alex Ferguson.

You need to work on the defense and the offence to win your financial game.

The defensive line

The main objective of having a defensive line is to maintain your family’s lifestyle should you lose your sources of active income. This requires defensive players in your financial team.

In investment terms, these ‘defenders’ include:

1. Emergency funds

Stash aside one to two years worth of living expenses in FD accounts. It is not treated as investments to gain better returns but rather, it is for liquidity purposes.

2. Medical card

This is meant to pay for hospital and medical bills if needed. It is best to get each of your loved ones their own personal medical card.

3. Life insurance with critical illnesses benefits

If you purchase life insurance policies where their collective sum assured would be RM1million, then your spouse and three children will inherit a larger sum of money. Other purposes of getting life insurance coverage are:

a. Fund any medical costs that are not covered by a medical card.

b. Fund living expenses while recovering from a critical illness.

c. Fund living expenses after becoming totally and permanently disabled (TPD).

4. Will document

Consider this. You have a spouse and three children but upon your untimely demise, and that without a will, your RM900,000 will automatically be distributed as below:

• Your spouse will be entitled to RM300,000
• Your three children will inherit RM600,000 (each child inherits RM200,000)

Why is it distributed based on the above ratio? It is based on the Distribution Act 1958 and it is in effect to distribute estates for people who pass away without a will.

This is why you should definitely consider drawing up a will

5. Trust document

Let’s say you wish to leave behind an estate of RM500,000 each for your loved ones but want to distribute their RM500,000 in installments ( monthly, half-yearly, or yearly), you should consider setting up a trust.

The midfielders?

Your active sources of income are the midfielders in your financial team. In general, the midfielders are important as they will finance both the defensive line up.

The strike force

Finally, what makes up your financial team’s deadly attack?

If your objective is to build long-term sustainable wealth, thus you should consider the following:

1. Own and hold stocks for the long-term over having unit trust.

2. Don’t trade stocks for short-term profits. Instead, try and earn dividends from stocks.

3. Own real estate as it is leverageable with low-interest rate debt.

4. Build long-term rental income from properties and don’t flip properties.

5. Don’t be too concerned about debt as it will be eroded by inflation over time.

Basically, your Ronaldos and Messis are just stocks and properties.

Instead of placing money into all kinds of stuff like stocks, unit trust, Bitcoin, Robo-Advisory funds, properties, and P2P platforms, focus on two asset classes such as stocks and properties. Make it a point to improve and enhance your investment skills in them.

Why stocks and properties? This is because they are asset classes that millionaires are investing into so that they can continue to grow their millions into many more millions.

This article first appeared in kclau.com

Ian Tai is a financial content machine, dividend investor and author of over 450 articles on finance featured in KCLau.com in Malaysia, and ‘Fifth Person’, ‘Value Invest Asia’, and ‘Small Cap Asia’ in Singapore. He is a regular host and presenter of a weekly financial webinar with KCLau.com.