Interesting discussion. This is my own experience and thought. If say saving from 8k life style to 5k, this is worth it because saving 3k/month is a big deal and will give an impact to retirement. Furthermore, living with 5k lifestyle is really not hard at all. In term of percentage, 8k to 5k is only 37.5% reduction.

However, if say today living already a 3k lifestyle, and die die (borrowing words from Mr. Wong :-) ) want to save more and cut to 2.5k or 2k lifestyle, I think not worth it. That rm500-1k saving at that level means a lot of sacrifices need to be done, and in the end the impact in retirement may not cope up with the damage/loss done in young age. In contrast, I rather work harder or smarter (like taking up part-time job, getting promotion, doing home tuition etc) to make up the additional rm500-1k for saving, while maintain a livable, more comfortable lifestyle at 3k.

Just my 2 cents.

This post has been edited by velo: Jul 17 2014, 05:07 PM

Correct! Live below Your Mean is the principle here. But I would add a bit more so to accelerate the ultimate goal of financial freedom. That is while one's income increases over time, say at an average rate of 20% per year, one need to control lifestyle expenditure increase much below the 20% rate, preferably 5-7% (just to keep up with inflation, or very mild upgrade once every 3-5 years).

That way, the initial saving of 10% to 15% can be dramatically boosted to over 50% over time, and most importantly, without downgrade in lifestyle.

The hardest part here is how to maintain 20% income increase per year. Frankly i don't think a salaried man can sustain that, unless he knows how to make his money works for him too through investment.

This post has been edited by velo: Jul 17 2014, 11:11 PM

BTW, for the saving portion of NAV, don't you think that we should also take out the EPF/pension fund/insurance cash value etc from calculation too?

To me I consider all those are "non-accessible" until you reach certain age. Should not be reflected in our current NAV. Agree?

Actually I'll also take out the house that I'm currently staying from calculation too. This is the one property that I cannot afford to sell as everyone need a roof to live as well.

This post has been edited by velo: Jun 21 2016, 05:12 PM

Yea, it all depend what is one purpose of calculating NAV. If only for "syiok sendiri" and own ego, you can add all the junks to it and blow up the figure.

But if it is for making big decision like business venture, large investment or decision to retire early, then better to be prudent....