Its not about saving. Its about growing your money. Saving was in the olden days where inflation was much lower. In the current economic climate, saving alone will not be sufficient. You have to grow your money thru prudent investments which deliver strong returns.

Be acceptable to taking on more risk in accordance with your financial strength. Never run from risk. Learn to manage risk. There are 4 steps to dealing with risk in anything.

1) Risk Identification
2) Risk Probability analysis
3) Risk Impact analysis
4) Risk Mitigation

Most ppl run at Step 1 thus losing an opportunity to turn the risk into a gain by going through Step 2,3 & 4 properly.

The way to 'deal' with this is for u to work out your retirement nest. There are good online calculators which can give u a reasonable idea of how much u will need post retirement. Once uve calculated this number, work backwards and see how much ull need to grow your NAV every month.

A number of years ago I was earning about 6K a month and eating tomyam kosong 3 nights a day in Sunway where I worked. The meal cost me RM0.50 (for the tomyam) and RM0.50 (rice) and RM0.20 (ice water).

But today with a much higher earning power and successful investments bringing in supplementary income, I do have some good western meals 2-3 times a week but generally its still the usual Subway, nasi campur or mamak goreng for the remainder of the week.

And yes many of us here have a target of early retirement.

This post has been edited by cybermaster98: Aug 18 2016, 04:35 PM

Go put some money into a forex scheme for a short term

Saving is good but will never be enough. Saving alone will still result in significant 'losses' in the long run because in the current economic climate especially here in Malaysia where our money is being 'eaten' by high inflation and rising cost of living.

So even though we may be saving but our purchasing power is drastically reducing daily. The only way to offset this is by growing your savings by prudent investments which give you a min return of 10% per annum.

10%

U need to know that in Malaysia (unlike many developed countries), the inflation rate provided is given as an average for the whole country. That means in lay man's terms, comparing prices of essential goods in the most expensive place in Malaysia vs the most ulu place in East Malaysia. Of course the final figure is going to be crap.

In many developed countries in Europe for example, u can get the country wide inflation rate and also inflation in many key cities. Plus, in Europe, price control is enforced very strictly. Even for market determined prices, there are numerous watch dogs to keep a close eye in ensuring retailers and traders don't purposely hike up prices. In Malaysia such enforcement is lax.

It is NOT extremely high and surely NOT impossible. It only becomes impossible when ure only thinking of investing in mutual funds. There are many investments out there which provide potentially higher returns albeit with higher risks. If one can manage & spread their risk efficiently, its not impossible to achieve ROI of >10% per annum.

In challenging economic times, good investors think out of the box. Following the conventional doesn't work in these times.

And that's why many Malaysians do not take savings & retirement planning seriously. That's also the reason why, most Malaysians do not have sufficient savings in their old age.

You do not use higher inflation figures only because it will show that none of your products will be able to overcome this inflation thus nobody will invest in them. So u downplay the actual inflation figures and use low figures. You are merely misleading your clients and that's the reason why I always tell people never trust financial planners. They will always downplay the real market conditions and try and sell you a product of their bank / financial institution in the end.


You cannot use long term inflation rates when the current inflation rate is much higher than that. And u are also wrong in saying that by assuming higher inflation figures, there will never be enough for retirement. That is again misleading. You can achieve a 10% ROI growth per annum with prudent investments. I am living proof of that and if I can achieve it so can anybody else.

In March 2007, my NAV was only RM196,000. My current NAV is approx. RM2.3mil. And im not someone who earns a super high salary. I just manage my risks, diversify investments and continuously review my investment portfolio every 3 months to ensure im getting maximum returns for every cent.

There is no feeling involved. The facts are clear. The inflation is MUCH HIGHER than the 4% claimed by the Gov. You don't need to be a rocket scientist to see this.

Yes ure 100% correct here.

Investment is just 1 part of financial planning. Its pointless investing if your own expenses are not managed properly. Any ROI from investments will just be 'lost'.

The first thing u have to do is set a retirement fund target. Say RM2mil by the age of 50 for example. This will need to be based on a number of factors e.g salary, fixed expenses, debt levels, family needs, quality of life at retirement, etc

Once uve done that, u then work backwards and come up with a annual target to achieve. This will need to be weighed vs inflation, economic conditions, etc.

Once you have your annual target, then work backwards and set monthly targets.

In most cases, these monthly targets may be a bit out of reach. But that's the challenge question you need to ask yourself which is what do I need to do to achieve these targets?

First step is to closely monitor your daily expenses. If u don't plug the loopholes, you are still going to be bleeding unknowingly. For me, I do a expense check every week. If 1 week my expenses are high, the following week I immediately cut down to bring it back to normal. If u let it go out of control, then ure in trouble.

Once uve got this in check, then focus on what investments to go into based on your disposable income.

Remember the golden rule of investment:
The best investors are those who invest with the least effort, smallest capital, shortest tenure, lowest possible risk and yet make the highest returns.

So when u consider any investment, ask yourself if ure keeping to the 5 criteria above. Note that everything is an investment and there are millions of investments out there. But not all investments are the 'correct' ones to go into. Just because u're investing in something doesn't automatically mean ure making a profit. Every investment needs to be risk adjusted e.g making a 5% gain from a investment which has a 15% risk factor is foolish.

Keep in mind that even the best investors will lose money on some ventures at some point. Nobody makes a profit from everything. But the key is to invest in a number of product classes and spread the risk so that even if 1 goes down, u have another 2-3 schemes to cover that loss.

Remember the 4 step process about risk management:

1) Risk identification
2) Risk impact assessment
3) Risk probability
4) Risk impact mitigation

In everything we do (investment or general decision making), we must go through the 4 step process above. But sadly when it comes to investment, most ppl stop at No 1. If they perceive something to be risky, they just ignore and brush it aside before giving it due consideration through Steps 2,3 & 4 thus missing out on a potential investment opportunity.

The key reason behind this is many do not even know the meaning of the word 'risk'. Therefore they assume something is high risk when it could be a low/medium risk product. We need to also know the source of the risk. Quite often you will meet ppl who will assume something is high risk because they lack the knowledge in that particular scheme. But lack of knowledge is a personal limitation and not a product risk. So we need to deal with that ourselves.