That’s Money Talk Right There

FEBRUARY 22, 2015

illustrasi hal21

While the days of saving money underneath your mattress at home are long gone, the habit of saving money for those rainy or unfortunate moments continue. 

Almost every Indonesian has some type of savings in the bank. But while the bank offers a safe place to store our money, over the long term, the value might only increase in small margins. For long-term investments, gold and property have long been considered some of the safest bets for returns. 

But with fluctuating gold prices over the past couple of years, it can be difficult to know where to invest your money. 

 “The current trend is that Indonesians are more sophisticated in investing their wealth,” says Edhi Widjojo, president director of AXA Asset Management Indonesia. “And we are indeed transforming from being passive-income societies to investment-active societies.”

 According to Aidil Akbar Madjid, chairman of the Indonesian Chapter of the International Association of Registered Financial Consultants (IARFC Indonesia), there are four layers in the pyramid of investments.1

“At the base is property,” says Aidil, who adds that the other conservative forms of investments on top of this stage include bank savings, deposits and gold. “This is what everyone basically needs and the first thing that they will buy when they have the money.”

Stocks are at the next layer of the pyramid

“But many [Indonesians] actually skip this stage and jump over to the next stage,” explains Aidil.

Collectibles make up the top of the investment pyramid. These include items such as handbags, traditional textiles and watches.

“This [type of investment] is usually done by creme de la creme,” he says. 

Chairani Kalla, the youngest daughter of Indonesian Vice President Jusuf Kalla, agrees with the financial planner’s investment pyramid, insisting that she is more of a collector. 

“I haven’t invested in stocks yet,” says Chairani, who collects traditional Indonesian textiles at home. “I want to. But I don’t really understand how.”

While Chairani is not alone when it comes to knowing how and where to make a fruitful investment, The Peak talks to a handful of experts to find out just what kind of choices are available.


“Property is a friend that will safeguard our wealth until old age,” explains Nathalia Sunaid, chief executive of Rotterdam Properti and Samara Dana Properti.

“If it weren’t for [my father’s] properties, he wouldn’t be able to pay for these expensive medical treatments,” adds the businesswoman, who says she witnessed how her father’s investment properties helped him finance his treatment for kidney failure, for which he had to undergo dialysis twice a week.  

According to the 34-year-old, investing in property in Indonesia will definitely yield a profit in the long term. 

“Indonesia is a paradise for property businesses,” she explains. “Even though you buy one in a not-so-prime location, it will surely profit over the years.” 

But Nathalia warns against jumping too quickly to invest abroad. 

“Without proper know-how, you may indeed lose a lot of money [when investing in land or property] abroad,” she says. 

Land prices in the Jabodetabek area — Jakarta, Bogor, Depok, Tangerang and Bekasi — increase on average at 20.17 per cent per year, while property prices increase at 12.62 percent per year.

The continual increase of property prices in this area stems from the growing backlog between the demand and supply of properties.

According to data from Indonesia Property Watch, there was a property backlog of 21.7 million across the archipelago in 2013. The number is estimated to increase by 50 percent each year. 

In Jabodetabek, the backlog of properties is estimated to be reach about 1.65 million in 2015. 

While investment properties are generally profitable, there are several factors that need to be addressed before making a purchase. The first factor is to make sure the location is near the city center. 

“Those [properties] that are within the city will literally sell like kacang goreng [fried peanuts],” explains Nathalia.  

Secondly, investors should do a thorough check of the property developer’s history to ensure they have a good track record before ensuring that the property they are planning to buy has excellent infrastructure and supporting facilities. 

“Developers usually offer fantastic discounts when you pay in cash,” adds Nathalia, who encourages people to buy in cash, if possible. “Therefore, you’ll profit even more when you finally sell it.”

But while properties are often fail-proof investments, experts advise buyers to keep in mind that these are long-term investments. 

“[Properties] are not very liquid [quick to sell],” explains financial planner Aidil. “And thus, your money may not be readily available when you need it.”

Savings/bank deposits

While bank savings and deposits make up some of the most liquid investments, financial experts warn of the risks that come with the fluctuating economic environment.

“But [in bank savings and deposits], your money will literally be eaten up by the high rates of inflation these days,” explains AXA’s Edhi.

On average, the interest rate of savings in Indonesia vary between 1 to 4 percent per annum, while bank deposits vary around 5 to 8.8 percent per year. Indonesia’s inflation rate fluctuates between 6 to 8 percent each year. 

“The costs of certain things, such as children’s education, may escalate much higher than that,” adds Edhi.

Aidil agrees: “At a glance, it would appear that your money is perfectly safe in the banks, while actually it’s value is fast depreciating.”


It has been one of the most trusted assets since back in the old days, but the fluctuating price of gold may sway some of the traditional investors. 

According to the financial planner, the shifting prices of gold over the past couple of years has come as a result of the recessions in China, Europe and the United States — which he says has pretty much diminished the demands for gold. 

“But I believe that gold is still a good mid-term investment,” Aidil notes. “It’s still a good place to ‘park’ your money between one and five years.”

In the past several years gold prices have fluctuated between 12 to 30 percent.

“I don’t think [the market for gold] will ever crash,” Aidil says. “Gold is the main component for computer and smartphone chips. So, in this era of technology, the demands for gold will remain high.”


Before one decides to invest in stocks, it takes a lot of money, skills and knowledge, says Aidil. The financial planner suggests that investors need between Rp 100 million and Rp 500 million ($7,900 and $38,900) for just one lot.

“And to be on the safe side, investors usually buy 10 different types of shares, which means you’ll need around Rp 1 billion to Rp 5 billion to invest in stocks,” Aidil explains. 

While beginners may hesitate to invest such a large amount of their own money into stocks, Aidil assures newcomers that you don’t have to take a gamble on your own. Investment management companies can manage personal funds and invest them accordingly in reksa dana (mutual funds). 

Among them is the AXA Asset Management, a privately owned investment company that currently manages more than Rp 15 trillion of mutual funds in Indonesia.

“It is already proven by statistics that in the long term, stocks will give you the biggest returns [compared with other types of investments],” says Edhi. “But on the other hand, stocks also pose higher risks to your money.”

To manage these risks, investment companies now offer cost-averaging mutual-fund investments, in which investors can invest a small amount of money regularly over a period of time.

“The key to a successful investment is to invest consistently and regularly notwithstanding of the market movements,” said Edhi.

Under the cost-averaging mutual-fund investment, investors may invest from as little as Rp 100,000 per month over a certain period of time.

“If you want to invest in stocks, you should do it for at least five years to avoid major losses,” Edhi suggests.

Danareksa Investment Management, a state-owned investment company that manages more than Rp 16 trillion of public funds, offers a similar scheme.

“We’ve made it very easy for everyone to invest in stocks,” explains Winnie Rahmi Maulidya, assistant vice president and head of the retail marketing division of Danareksa Investment Management. “And everything is also very safe and transparent, so you don’t need to hesitate any longer.”

For would-be investors in stocks, Winnie suggests people to think of the bigger picture. 

“Switch your mind-set,” she urges. “Investing should be your top priority. It’s not something that you do if you have money.”

The interest for mutual-funds investments at Danareksa Investment Management range from between 14 to 15 percent each year, a figure much higher than bank deposits — which vary from 5 to 8.8 percent each year — or bank savings at 1 to 4 percent annually. 

Edhi, however, advises people to shift their stocks, as they grow older. 

“The nearer you are to your retirement age, you should try to decrease your stocks and switch to the more conservative types [of investments],” he explains. 

By doing so, Edhi says, investors can avoid the unpleasant surprises that could occur — such as stocks crashing — when people are about to retire. 


Investments don’t necessarily have to come in the form of gold, stocks or property. Take for example a designer handbag or timepiece. These material items often used everyday, can often become more valuable as the designs change and supply decreases. 

“While they do it [purchase designer bags or watches] as a hobby, the prices of these items at secondary markets can be quite high,” explains Aidil, who adds that hobbyists also collect valuable and traditional textiles or antiques at home. Aidil himself collects luxury watches.

“I was quite amazed that the Rolex Daytona that I bought at Rp 18 million in 1994 was sold at Rp 85 million in 2004,” he says. “It’s just mind-blowing.”

If collecting items as an investment, it’s important to ensure that they are well looked after. 

“You should keep them in mint condition,” explains Aidil, adding that handbags, textiles and luxury timepieces may require special storage and treatment to keep them in prime condition. “Any chips or discolorations may greatly affect its re-selling prices.”

But to ensure that you will be able to find a buyer for your collectibles, Aidil suggests that you “create the market.”

“Join special associations or gatherings of people with similar hobbies,” Aidil says. “This way, you are creating the market for your collectibles in the future.”