And the Investment Scams Malaysians Must Learn to Avoid

Introduction

We’ve all seen it:

“Guaranteed 15% monthly returns!”
“RM10,000 becomes RM100,000 in 6 months!”
“Low risk, high return! Sure win!”

These promises may sound exciting, especially when everyone seems to be getting rich quick. But here’s the truth:

In investing, there is no such thing as high return with low risk.

If it sounds too good to be true, it probably is.

In this post, let’s unpack why higher returns come with higher risks, how to assess them smartly, and how to spot common scams that target Malaysians like you and me.

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1. What Does “Return” and “Risk” Actually Mean?

📈 Return = Your reward

This is the profit you get from investing. It could be:

• Interest
• Dividends
• Capital gains (price increase)
• Rental income

⚠️ Risk = The uncertainty of loss

The possibility your investment might:

• Lose value
• Earn less than expected
• Disappear entirely (in scams)

🎯 The general rule in investing:

Higher return = Higher risk
Lower risk = Lower return

This is called the Risk-Return Tradeoff.

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2. The Risk-Return Tradeoff in Real Life

Investment Type	Average Return	Risk Level
EPF	5–6% p.a.	Very Low
ASB / Tabung Haji	3–5% p.a.	Low
Fixed Deposit	2.5–3% p.a.	Very Low
Unit Trusts	4–8% p.a.	Moderate
Stocks	6–12% p.a. (varies)	High
Bitcoin / Crypto	?? (wildly fluctuates)	Very High

So when someone claims:

“20% guaranteed return every month, no risk!”

You should immediately ask:
“Where is the risk hiding?” (Because it’s there.)

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3. The Psychology Behind “High Return” Temptations

Many Malaysians fall into scams or risky investments because of:

• 💰 Greed – Wanting quick wealth
• 😟 Fear – Of missing out (FOMO)
• 😓 Desperation – Especially in financial stress
• 😴 Lack of financial literacy
• 😇 Trust in friends/family (who themselves got scammed)

Scammers know this. They often use:

• Social proof: “Look, so many people made money!”
• Urgency: “Only 3 spots left!”
• Authority: “Our founder is Tan Sri so-and-so”
• Fake licences, endorsements, and testimonials

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4. Common Investment Scams in Malaysia

🚩 1. Ponzi & Pyramid Schemes

• Early investors paid with new investors’ money
• No real product or investment
• Eventually collapses when no new people join

💥 Example: JJ Poor to Rich (JJPTR)

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🚩 2. Forex / Crypto “Investment Packages”

• Promises 10–30% monthly returns
• Uses “robots” or AI as bait
• Your money may not even enter real markets

💥 Warning: Most are unlicensed and illegal under Bank Negara or SC

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🚩 3. Fake Unit Trust / Insurance Agents

• Using fake agent codes or expired licenses
• They collect lump sums, then disappear

🛡️ Always verify with official platforms:

• SC Licensed Intermediaries
• FIMM Code of Ethics

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🚩 4. Unlicensed Investment Seminars

• Upfront fees (RM1,000–RM10,000)
• Hard-sell you into their “system”
• No license. No accountability. No regulation.

🧠 If they claim they’re “not selling investment products,” but still handle your money, it’s a red flag.

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5. How to Know If You’re Taking Healthy Risk vs Blind Risk

✅ Healthy Risk:

• You understand the product
• You know how the return is generated
• It’s regulated (SC, BNM, FIMM, PIDM)
• You can afford to lose some value short-term
• You diversify (not all eggs in one basket)

❌ Blind Risk / Scam Risk:

• You don’t know how the money is used
• You’re promised guaranteed returns (especially >12% p.a.)
• You’re pressured to “join now”
• No official documentation or track record
• No regulation or oversight

Rule of thumb: If you can’t explain how the money grows, don’t invest.

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6. Real-Life Case Study

Client: Aida, 39, admin executive

• Invested RM50,000 into a “crypto mining platform”
• Promised 15% monthly returns
• Platform shut down after 4 months
• No recovery, no support, no legal action possible

😔 “I just wanted to make money faster. I didn’t realise there was no real business.”

We helped Aida rebuild her savings using:

• PRS (Private Retirement Scheme)
• Conservative unit trusts
• Realistic time horizon

It’s slower, but safer.

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7. What You Should Do Instead

👨‍🏫 Educate Yourself

• Learn how legitimate investments work
• Follow licensed professionals
• Ask tough questions

🕵️‍♂️ Verify Before You Invest

• Check if the product/provider is licensed
• Look for realistic, not magical, returns
• Get it in writing

🤝 Work With Trusted Professionals

• We don’t sell hype—we help you build real wealth
• We assess your goals, risk appetite, and financial timeline
• We recommend investments you understand

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8. IN CONCLUSION

There’s no such thing as a guaranteed high return with no risk.
There’s only:

• Managed risk
• Calculated decisions
• Long-term growth

“Slow is smooth. Smooth is fast.”
That’s how wealth is really built.

Don’t let emotion or greed override your financial wisdom. Trust the process—not shortcuts.

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📞 Book a discovery call to review your current investments and make sure they’re working for you, not against you.