How Much Capital Do You Need to Start Investing in Stocks?
•By Mahersaham Team
Artikel ini juga tersedia dalam Bahasa Melayu
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When it comes to how much minimum capital is needed to invest in stocks on Bursa Malaysia, it raises further questions in the minds of ordinary folk — is the stock market only for millionaires? Can only the wealthy participate in stock investing?
There is only one way to find out, and that is by referring to the share prices listed on Bursa Malaysia.
On Bursa Malaysia, there are various share prices offered to investors who wish to invest.
Among the cheapest and most minimum-priced shares on Bursa Malaysia is RM 0.005 per unit. YES, that is correct — only half a sen, not even one sen but half of one sen.
As you may already know, the minimum share purchase is 1 lot, which is equivalent to 100 units.
1 LOT = 100 UNITS
Returning to the earlier question of how much minimum capital is needed, the answer is:
= RM 0.005 x 100 units
= RM 0.50
Yes, you can buy shares with just 50 sen of capital!
If anyone asks what the minimum capital is, the answer is as low as RM 0.50.
However, another question arises — can the minimum capital deliver the maximum possible returns?
Can RM 0.50 generate hundreds of ringgit in profit?
Realistically, the answer is no. Our profits and losses depend on how much capital we invest.
So what we need to do for now is accumulate more capital, little by little.
Minimum capital is not the same as optimum capital — they are two different things.
You need optimum capital to get optimum returns, or as people commonly say, returns that are worthwhile.
Bear in mind that stock investing involves various costs. On top of that, you also need to allocate funds for learning.
Register a CDS account with Mahersaham and you will have the opportunity to join exclusive classes for Mahersaham clients twice a week.
For long-term investors, you can start investing with capital as low as a few hundred ringgit.
Why? Because when we talk about investing, it means we intend to hold for the long term — not buying today and selling the next day or in the near future.
As investors, after purchasing shares, we want to hold them for years and, if possible, pass them down to our children and grandchildren.
"Our favorite stock holding period is forever."
Warren Buffett
As long as there is no need or factor compelling us to sell the shares, there is no reason to sell. As Warren Buffett would say.
Traders, on the other hand, are advised to have larger capital. Starting from RM3,000 to RM5,000.
This is because, when trading, you need to buy at least several different shares. You want to diversify the types of shares you purchase.
If your capital is only RM 1,000 to RM 2,000, the number of shares you can buy is rather small and not suitable for trading.
The recommendation is to start with capital of RM3,000 to RM5,000 for optimum returns.
For example, if our target return is 10% of capital, then:
Profit = Capital x Profit Percentage
1) Capital RM 300
Profit = RM300 x 10% = RM 30
2) Capital RM 3,000
Profit = RM3,000 x 10% = RM 300
For those interested in becoming short-term traders (intraday, BTST), the optimum starting capital is RM30,000.
This is because short-term traders need to buy a large number of lots — a minimum of 100 lots.
100 LOTS = 10,000 UNITS
For example, if a share price is RM0.80 per unit, buying 100 lots means the capital for this share alone is RM8,000.
= RM 0.80 x 10,000 units
= RM 8,000
Why do you need to buy so many? Because short-term traders will sell shares even if they rise by just 1 or 2 bids.
A small rise and they sell immediately. For example, buying a share at 50 sen and selling it once it rises to 51 sen.
Short-term traders capitalise on volatility to gain profits in a short period.
A Full-Time Trader (FTT) means you trade full-time, where 100% of your income comes from the stock market.
Want to become an FTT? Sure, no problem — but you need to be conservative because the risk in the stock market is very high.
As mentioned earlier, 100% of your income comes from the stock market. To be safe and succeed as an FTT, your capital must be substantial.
An FTT requires large capital based on your monthly commitments. If your monthly commitment is RM10,000, then you need capital of RM100,000 — which is 10 times your commitment value.
Why 10 times? Because we want to be realistic. If you want to become an FTT, you need to target achieving at least 10% profit every month.
A 10% monthly profit is neither too high nor too low — it is an achievable figure.
If you manage to hit your target, you can cover your expenses and it becomes your income source as an FTT.
Whatever your choice, make sure you have analysed it from every angle.
Avoid making hasty, reckless decisions without expert advice and proper knowledge.
Hope this helps!
The absolute minimum capital to buy shares on Bursa Malaysia is as low as RM 0.50 (50 sen). This is based on the cheapest share price of RM 0.005 per unit multiplied by the minimum purchase of 1 lot (100 units). However, this amount will not generate meaningful returns.
For traders, the recommended starting capital is RM3,000 to RM5,000. This allows you to diversify your portfolio across several stocks and achieve optimum returns. Long-term investors can begin with as little as a few hundred ringgit.
Short-term traders (intraday and BTST) should ideally have at least RM30,000 in capital. This is because intraday traders need to buy large quantities (minimum 100 lots) to profit from small price movements of 1-2 bids.
To become a full-time trader (FTT), you need capital that is at least 10 times your monthly commitments. For example, if your monthly expenses are RM10,000, you would need RM100,000 in capital, targeting 10% monthly returns to cover your living costs.
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