6% consistent passive income is not a figure easy to achieve.
Also, there is no guaranteed that EPF payout will be 6% as well.

EPF shouldn't be taken into consideration for FI at the moment, as you can't touch those money until reach retirement age.

This post has been edited by cherroy: Aug 15 2018, 09:30 AM

Not absolute correct. You can withdraw if epf exceed 1mil.

Not aware of this, thanks for the head up.

In fact, one may treat epf as bond and estimate with average 5% return as part of overall portfolio. Self contribution CAN max up to 60K a year. This works better for those high salary earners but super conservative where parking their saving in FD.

6% based on government bonds like ASNB. (i think this is safer compared to share market)

and as sky18 mentioned, can withdraw epf after in excess rm1 mil in case need the funds.

how much did you budget for your kids edu fund? will rm1 mil be ok?

if i double up the amount of savings?

now passive rm5k/month
epf in 10 years rm1.5 mil
(additional cash savings@ retirement =rm1.5 mil) - maybe from insurance payout, company bonus and gratuity

btw with the assumption house/car fully paid off

will this be enough?

How much a person/couple actually needs to generate (in passive income) is a very subjective thing. Now there are a lot of old-aged couples with less than rm3k/mth income (in KL) and they survive very well. Some say they need rm20k/mth (in passive income) to be happy. Most of the time i feel how much we need is actually highly correlated to how much we currently earn (and how much income our income-producing assets can generate). Generally, we tend to spend more when our income increases and this is a behavior that is very consistent in humans (unless we have gone through a lot of financial hardships earlier in life for whatever reasons and this has affected the way we treat money). That is why a lot of financial gurus recommend before we retire, our passive income after retirement should at least be about 60-75% of our take-home income before we retired. So say someone in KL has a income of rm10k/mth before they retire, ideally their investment (epf, dividends, bonds,...) income should be able to generate around rm6,000-7,500/mth in retirement. Don't forget there is inflation every year so maybe have a little buffer to adjust for the inflation. Don't forget if you intend to retire early (like 30s or even 40s), have plenty of buffer because you may live till 90-100. So it is good if a person is very thrifty since their money can go a much longer way and if you have kids you may have to work a lot longer since education in Msia in quite expensive esp if you plan to have your kids go overseas.

I guess if you have no vices (gambling, women, alcohol and cigarettes), your expenses would also be a lot lower than someone who has esp gambling because the addiction is very hard to kick. Also among all the vices, gambling ranks no.1

This post has been edited by Garysydney: Aug 15 2018, 10:58 AM

There is no standard answer for such question " how much is enough".

I had seen how a person that earn Rm2k per month manage to raise a family.
I also had seen how a professional who earned Rm20K+ per month, needed to borrow heavy and "run away".

Some even earn billion, still live in basic way.
While some even just a few thousand, but always want to buy a 5K worth of smart phone.

It is down to the person spending habit and individual behaviour.
We can talk until cow come home, also won't have any conclusion how much is enough. Mainly because we don't know when we will die (don't need money anymore... )

Yes - definitely agree with you.

Most times it is our 'expectation' that gets us into a worry-some state. We worry for nothing. Now when we retire, we will have a 'must-have' (or prerequisite) and a 'optional' (or luxury) basket. For someone with low expectations, his 'must-have' basket has only a couple of things in it - he may have only
(1) 3 simple meals/day
(2) enough money to buy medication if sick
(3) enough clothes to wear

and he has a few in his 'optional' basket, namely,
1) mobile phone
2) wireless at home
3) a small used car
4) occasional eat-out

Now tell me in KL, if he has only those 3 expectations in his 'must-have' basket, how much would he need with only those few expections like that per month? He can probably survive with rm2k/mth for a couple with that few basic necessities.
--------------------------------------------
Now we compare that with a 20+ young man who wants enough passive income to retire. His 'must-have' has a list with about 50 things in it and he probably has only one item in the 'optional' list which is a flight to the moon. Now this young man's 'expectations' are very high and to maintain that lifestyle, he probably needs rm50k/mth.

It all boils down to 'expectations' and if we have only a few items in our 'must-have' basket for our retirement, we don't really need a lot of money to retire.

This post has been edited by Garysydney: Aug 15 2018, 12:17 PM

I bought the flat at MYR800k.
I believe it is more than enough when my kid needs the fund. And he is not necessarily going to oversea University. But the fund is still there. Me only from local public university but lucky to work with oversea company.

Nice experience sharing meonkutu11. Good for those who work in other countries and retire back in Malaysia.

I advised my kids to work towards FI and that's when you upgrade your job from need to work to want to work. Start to save and invest. Good to know a 22 years old asking this question. I wish I asked this question when I was 22.

Please be aware of the pressure to own the latest phone or purchase a new car with loan or monthly payment.

FIRE is basically the option to work not, don't need to worry if you're retrenched.

To achieve that is through combination of saving and investing. Some does not like the idea of saving.

This post has been edited by Ramjade: Aug 16 2018, 09:09 AM

FI pave a way to allow more options and ways to go about life; be it continue enjoy your corporate life, business, charity works, etc.

In general, it go thru these stages,

i. Financial epiphany or slowly awaken & subscribe to the idea

ii. Learn and goal setting.
> getting obsess about FIRE and learn how other archive it
> what is enough? wants and needs.
> pan out your own financial goal, budget, spending tracking etc.

iii. Accumulation stage (of course, many will re-tune their goal along the way as adopt new perspective as aging), if you excel in follow aspects, usually easier and faster reaching the goal.
> Increase earning.
> Control spending.
> Improve return from investment.

iv. Freedom stage.
Practically, you choose what works best for you.
For those who choose retire early (RE) and step way from corporate & business life, likely it need get thru
> cash flow planning and withdrawal strategy.
> mental fighting & inner reset against greed, fear of uncertainty, what if X tragedy happened, etc. which lead to "one more year syndrome".

p/s: Anywhere, if merely view from financial standing aspect, probably can refer here https://www.getrichslowly.org/stages-of-financial-freedom/

Not sure if anyone shared this but this guy's blog (Mr Money Mustache) can be a good start to setting a frugal mindset.

Here's the introduction post in his blog...
https://www.mrmoneymustache.com/2013/02/22/...-one-blog-post/

In life, if you are a very frugal/thrifty person, that is an extremely healthy attitude to adopt because later on in life when your income drops you will not be greatly affected by this dilemma because chances are you will have assets accumulated in the earlier good days - this is why people say 'make hay while it shines' because you will get periods in your life when it doesn't shine esp when you get older and is 'over the hill'. The term 'live within/below your means' makes great sense when it comes to achieving early financial independence which enables you to stop worrying about money matters later on in life.

I am 56 now but if i had known about all this, i could have afforded to stop work a lot younger - when i was young, nobody taught me all this and i have always associated the word thrifty as 'being a loser' in my younger days. Now i can see how wrong i was.

This post has been edited by Garysydney: Aug 16 2018, 12:20 PM

Sometime ignorance is bliss, when u gain this new perspective at late game, isn't it wanderful when u learned that already hit the magic number and can transit into RE.

Many of folks out there struggling during accumulation stage especially those with a less desirable job and escape route is far ahead.

This is very true. If i had known about this earlier, i would have thrown the towel in a lot earlier. Even though i have a very easy job, i don't quite enjoy going to work because i still have to go in to office and my work is not interesting. My wife always remind me to be grateful because she says i am getting 'gaji buta'. She keeps reminding me otherwise i would have quit a long time ago.

i've been following his blog for few months now.....still havent finish reading...hahahaha