You know, recently I’ve just been talking about savings, spending, savings, spending. It’s really been a while since I talked about investments. So this time, let’s do that! In particular, what can we invest in Brunei? As you may know, investing is putting your money somewhere (I often refer to this as a “vehicle”) with hopes that the money can grow. The financial buzzword/catchphrase they like to drop is “Make your money work for you!”.
This post will talk particularly about the things I can see that you can invest in Brunei. That means without the need to travel somewhere else to open an account. You can do some of it from the comfort of your sofa so long as you have a stable internet connection. But before we “get it on” so to say, let’s have my typical warning for you, dear readers:
This post is strictly my personal opinion and not some fancy financial advice. You can get professional advice from… well… professionals. So take what I say with a pinch of salt (or a tablespoon) because I will simplify a lot of concepts.
That being said, know that investing carries a risk of loss. Even complete loss, if not careful. So read up, do your own research, and don’t fall for “Guru advice” to buy or sell. I did an earlier post on the rule of thumb/Guidelines when it comes to investing. Please have a read if you haven’t already.
Invest in Brunei?
When I say “Invest in Brunei” I also mean “Invest from Brunei”. Meaning some of the things I will list may not be “locally sourced” investment vehicles e.g. investing in the US Stock market. That being said, there’s no right or wrong way to do it as long as it’s legal and you make money. So what are the things I can identify so far?
1. Stocks and Bonds
The stock market is one of the classic vehicles people use to invest. Legendary investors especially Warren Buffet also vouch for it so who are we to say otherwise? The reason I put stocks and bonds both together is because you can access them through the same platform. The trading platform that connects Brunei to the rest of the world is Baiduri Capital (BIBD only have limited selections of stocks if I’m not mistaken). They use the same framework as Phillip Capital so you’re more or less in good hands. Through here, you can access the markets in Singapore, Malaysia, United States and Hong Kong. That’s more than enough when you’re starting out and even as a seasoned stock investor, it should keep you busy.
There are many different strategies employed to invest in stocks and usually the 2 main strategies for stocks and bonds include:
i. Value investing
This is the “buy and hold” method where you pick a stock which has potential to grow. It usually ignores short term volatility. This is advocated by Warren Buffet himself!
ii. Stock trading
This is where you buy low and sell high using the market volatility, trends and usually holding only short terms.
2. Real Estate
Real estate is one of the first things I looked to invest in Brunei because of the books I read that painted real estate as the golden goose. In the end, I didn’t go into it because I didn’t like the market I saw here. That being said, some people are still profiting off real estate but not as much as before. Brunei’s economy is in a bear slump and we don’t know what the future holds. But I believe if the economy picks up, the housing market will also pick up too. I also believe there needs to be a change in policy for people who are holding on to decrepit properties and pushing for high prices. Only time will tell.
There are usually 2 main strategies for real estate:
This is the most common (if not the only) investment method for real estate in Brunei. Buy a place, spruce it up and rent it out to people. Simple, no?
ii. Buy and flip
Not sure how effective it is to do in Brunei because of the bloody long time it takes to transfer property between owners. But this strategy is employed where you buy real estate for cheap, fix it up and/or renovate, and sell for a profit.
3. Starting a business
Nothing says “Homegrown investment” more than a business right on Brunei soil. A lot of people see starting a business as “self employment” i.e. it’s a job but I think that mentality is wrong. A business is an investment. You put in money, time and effort in hopes to turn a profit; not come in at 9am-5pm and get paid a salary from it. Businesses are a whole new level of ballgame so I won’t go into detail here (in the future, perhaps?)
Now, I’m no successful businessman. But I do love success stories. McDonald’s, Facebook, even our local supermarket Hua Ho are inspiring to read about to say the least. And their by-product is ROI that can be said to go through the roof! Why do I think their wealth is a by-product? Like many books may tell you, I believe that their primary objective is to provide a good service that people need. And if there’s a need plus the service is good, people are more willing to pay for it.
4. TAP Housing Fund
If you do not own any real estate for yourself yet, you can consider applying for the TAP Housing Fund scheme. There are conditions to satisfy but hey, if you qualify, that’s a good guaranteed 3% return per annum. It’s not the best, but if buying a house is one of your plans for the future, it’s worth looking into!
5. Investment-Link Policies (Insurance)
ILPs are sort of a wombo combo between a managed fund and insurance. Some say they give the best of both worlds, and there are those who say they don’t do as well as two separate strategies. And I agree with both statements. Wait! Put down your pitchforks and let me explain. ILPs could be part of your financial plan or it might not; it all comes down to your personal financial goals and attitude.
Example: if you just want to invest AND have insurance under one package without needing to bother with either separately, this would be a good choice. If not, be prepared to do lots of research. The payoff is you may be able to beat an ILP’s performance at lower costs but it’ll take time and effort.
It might not be obvious at first when you think about investing especially in Brunei. Those looking to invest in Brunei definitely have a few choices at their fingertips if they’re willing to look and research. That being said, I did not include Forex, Bitcoin and cryptocurrency because I think it’s too speculative to be considered a “typical” investment. You can look into trading forex or crypto, definitely, but it’s not for the faint of heart.
Once again, investing is putting your hard-earned cash into your chosen vehicle in an attempt to make that money grow. Nothing is guaranteed on the financial markets and you should definitely be sceptical whenever anyone tells you a return is guaranteed. The only way to guarantee a return is to have the money come from somewhere when the markets are bad. Ask yourself, “Where?” For example, in TAP’s regards, any shortfall is topped up by the Government.
Invest wisely, readers! Stay savey.
“An investment in knowledge pays the best interest.”
– Benjamin Franklin