It is a catchy acronym for being financial independence and able to retire early. Officially our retirement age in Malaysia is 60 years old, while in some countries the age is 65 or more.

So how early is early? I think the most talk about age would be in the late forties - around 46 to 49. Age 50 to 55 is not that "early" since our retirement age used to be 55.

Mid thirties to mid forties would be too early... these are the most productitve age for most in their careers, where they would be due for job promotions and higher earnings.

If I am in your shoes at your age of 22, I would not be too concern about resigning and retiring from work... more concern with the job and job promotion and earning higher and higher salary. Learn to live within the salary, with some savings aside from our savings in EPF.

And try to be free of debts as soon as possible... so there is no burden and commitment to service the debts every month. Just in case you need to walk away from your job before the official retirement age. As you grow older, there could be ethical issues involved in your job.

When you are pressured to do something unethical by your boss or immediate superiors, being debt-free and financially independence would allow you the luxury to say 'screw this job' and walk away.

My #4 is splurging on a car that I don't mind driving and yet within my affordability - something that makes me want to drive to work every morning.

#5, one of my first milestones when I was younger was more materialistic, a watch costing me one whole month wage. Years later, upgraded to a 2 months salary piece... another milestone achieved.


This post has been edited by j.passing.by: Sep 8 2018, 09:03 PM

Jack Ma, age 54, just announced his retirement.

Do read the long post above on making comparison between yourself and others... it can be meaningless.

Just like comparing how much one should save, it all depends on one's individuality and lifestyle.

Years ago when James Clavell wrote Noble House, the drop dead money was 2 million. I guess it should be 5 million now. But of course it could be less and enough for anyone to retire.

With house, car and other assets fully paid, the minimal can be as low as 2k. Or 24k per year.

At 4% interest from a fixed deposit, the untouched nest egg to generate this 24k is 600k.

This post has been edited by j.passing.by: Sep 9 2018, 01:55 AM

you are right.

To be really FI/RE at a young age of 45 and below, you would need much more if you are married with several children still in school/college.

Those, me inclusive, who were talking about retiring a few years earlier than the mandatory retirement age were talking about retirement in general.

To be really FI/RE, I don't think working part time or having a business that doesn't require your presence all the time counts as 'retirement'.

FI/RE is possible if your spouse is working!

On the other hand, you can plan not to have a family and children.

If getting married, marry someone who is financially independence and don’t have to rely on you financially. In fact, this will cut down your housing cost, be it renting or owning, as each of you are booting half the cost.

Being debt free is not really that difficult. The biggest expenses are on houses and cars. So don’t own a house or a car. Rent and use public transport. And Grab is as convenient as having your own car. In fact, you are living the high life with a chauffeur at your beck and call.

Think of all the maintenance costs you can save by not owning a house or car, and not to forget the cost of interest you don’t need to spend on the loans in making these purchases.

How much you need to retire early depends on you. How you want it to be is up to you. There is always a way if you want to do it.

What stopping some people from doing it is also due to personal reasons, like the job has fringe benefits like flying on business class and 5-star hotel stays and it is hard to give them up. Or the job and position comes with ‘power’ and everyone is nice and courteous to you because of the position… the attention and ego fawning which you shall no longer get when you step down.

The major decision on early retirement is still on money. And making this decision is not that difficult as you think… since we can count money while other things as mentioned above is more difficult to analyse.

Do you think you have enough money or do you think you need more? Do you need to be greedy for more and more? Any particular reason you have to live in an expensive place like KL? Would it not be nice to live in a quieter place? Would it not be nicer to move around and staying a few months in different towns and cities?

So how much do you really need?

You can break this money issue into 2 parts, if there is EPF. This is the untouched nest egg that you need to carry you over the final part of your life. Determine how much you need to have in EPF at age 55.

At about 5.5% annual dividend, it would take 13 years of compounding interest to double the initial amount. So work backwards on the initial amount you need to have in EPF. This will set you a figure to target to achieve when you reach the age you want to stop work.

The second part is the shorter term savings you need to have before the supplementary income from EPF kicks in. If the income from EPF is inadequate, then you need to put aside some money for the longer term too.

You might or might not need to let the dividend in EPF compound itself a few more years till age 60 or later before touching it. The main concern here is running out of money before we run out of time. That is the money dries up before we are dead. Living on the dividends and not touching the principal amount ensures this from happening.

And since if the plan is to rent and not own any living space, and if you happen to live till a ripe old age, you will need to ensure that the longer term savings and EPF savings is enough to get you register into a private nursing home for the final years of your life.

If there is a will, there is a way. Go see “Captain Fantastic” for inspiration on living cheaply at low cost. There are parts that you can learn from… but not the part of being so cheap until funeral cost is saved by flushing the wife’s ashes down the toilet!

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BTW FI/RE is nothing new. In one of Somerset Maugham’s short stories, there was an Englishman who quit his banking job with enough money to last ten years living cheaply in Spain, and when the time comes to return back to London and work, he found that he could not step back into his former working life… so becomes a homeless drifter living on scraps given by other Brits on vacation.

There was also a blog – years and years ago - by an IT guy on quitting early in his late thirties, who was fortunate to be given shares for being one of the first few employees in a IT start-up, and getting his “drop dead money” when the firm was listed. Quit the city life and bought a ranch or something in Rocky Mountains. Our equivalent would be Sg. Lembing or somewhere more exotic like Laos or Vietnam.

Yes, moving house is difficult when you are in a wheelchair!

And for most people, the desirable way to go is dying in one's own bed at home.

Be prepared to pay cash when buying a roof at senior age. This is when your longer term savings and EPF kicks in, and remember to allocate part of this money for this.

See it this way of not owning a house sooner in life, you are older and wiser at senior age, and won't be buying too much of a house and knows what you are looking for.

Secondly, in the recent years, there are specially build retirement homes for the elderly. And they only open to those age 60 and above. They are on long term lease... but the upfront deposit starts from 300k.

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Come to think of it, I think a retired senior could possibly earn a living as a travel blogger, go visiting all the retirement homes and communities. They are also called retirement villages. Both in the country and neighbouring countries in the Asean region, maybe including other Asian countries like Taiwan, China, India, Korea...

This post has been edited by j.passing.by: Sep 14 2018, 12:51 AM

A young man, 61, just released a new book in recent days… Becoming Ageless… he’s a CEO of a major corporation… he explained his take on ‘ageless’... it is not about immortality or living forever.

“When I was a CEO at 29, people said I’m too young… now, they say I’m too old. You are either too young or too old…”

(I’m just quoting part of his interview… the book is on ways of staying healthy.)

My take on his remarks is not stereotyping your age. “Ageless” means without age and not putting an age tag on whatever you want to do.

One is never too young to quit working and fire your boss for good. And neither too old to begin and start on anything.

Don’t sell yourself short thinking that you are too young or too old.

It won't run empty if only the annual interest/dividends are withdrawn... meaning that the annual interest/dividends are enough for your yearly expenses... meaning that the amount saved is enoght to generate the required yearly interest/dividends.

If you are depending on rental income from properties instead of annual interest/dividends, collecting rental every month can be too much "work" and headache when you are at senior age.

The monthly expenses or pension fund is usually based on the last drawn salary, not including whatever passive income there is currently. And it is usually about 50%.

If you are targeting 70%, it means that your monthly expenses is currently at 70% of your salary and savings at 30%.

It will be hard to jive the numbers to retire early... and working till age 55 is considered normal retirement age since it was just recently changed officially to 60.

A financially successful person doesn't necessarily means he is wise in investing his money. It is more likely that he became wealthy from his earnings and income from his occupation and profession.

Secondly, those who had already retired early doesn't necessarily means they are more financially successful than others... just that they retired early because they already have enough money and enough of the rat race.

What leh... just wasted my data quota reading the link, the writer was talking to a couple of people in their early 30's who were lacking common sense, they were earning minimal and were just making plans to retire early by age 40, and then realised they couldn't hack it.

It would be much better interviewing people who did really retire early years before the usual mandatory retirement age of 60 or 65.

I don't think anyone has posted here any 'suffering' or 'hardship' in making fi/re possible.

To me, it's just going along with the flow of life. Be thrifty and have savings and not spending beyond our means.

If able to stop working and retire earlier when there's adequate savings, take the plunge and do it.

But many will continue working till the official retirement and as long as possible because the job and profession is an important role in their life. It is part of their identity and image and persona.

Without their occupation, they are no longer the Boss, the CEO, Mr. Manager, the person in charge, the captain, the pilot, the teacher, Mr. Lawyer, Mr. Consultant, etc. etc.

Just Mr Dad, house husband/wife and retired person.

Is there such a term as ‘low/high income country? The usual terms are developed and developing countries and 3rd world countries.

I think it is the strength of the Malaysian dollar and its exchange rate you were referring to.

Our currency system is dollars and cents, same as in Singapore, Brunei, USA, Canada, Australia and New Zealand. The purchasing power of the dollar can be viewed as the same in each country. A millionaire is a millionaire.

It is different from other countries that don’t use dollar and cents, as like the Indonesian rupiah. You need thousands of rupiah to buy anything. And the wages is paid in millions. Can this be counted as earning a high income?

Thailand’s currency is the baht. Very few people know that there is satang. 100 satangs is equal to 1 baht. It is rarely in circulation because the satang is so low in value. (In some places like 7-11, the cashier will hand out a sweet in replacement of half a baht or 50 satangs.)

Would it be possible that the Malaysian cents could be the same as the satang in the coming future? We could only speculate…

Yes, if the country’s exchange rate is becoming worse and worse, it would be relatively easier to consider working abroad in seeking better and higher wages for the same effort and talent put into the job.

As it is currently, one could get better wages and income in neighbouring countries such as Thailand and Vietnam instead of the usual developed countries such as Singapore or Australia.

We still need to plan our finances a bit to achieve anything. Yeah, not something too impractical like already age 35 and then try to quit working in 5 years time at age 40.

Age 40 to 45 is the prime age in one’s profession and earnings… there is past job experience, knowledge and maturity.
For a wage earner, 40 to 50 is the decade when he is at his peak in earnings and if he do it right, he can quit the rat race 10-15 years earlier in his early 50’s.

It is more on the mindset and attitude than on the amount of money to retire early. As said, we still need to plan the finances and expenditures.

If there is no plans to FI/RE, and started off with purchasing a house that is very expensive that he can only paid off with a lifetime loan of 35 years or more, he already set himself to work till age 60.

I think he meant USD 100k or more than RM400k.

4% is not a small number... it is 1 in 25.

If I walk into a big factory of hundreds of employees, the ratio of the high wage employees/staff to lower wage blue and white collar workers could be even higher at 1:50.

“It is meaningless to judge how low or high income based on currency denomination”?
“In practice, one rationalized to USD or myr for comparison”?

Sorry, failed to get what you are trying to say. Let me clarified once again, there is no “low/high income countries”, only low or high income individuals.

Your last sentence contradicts your very first sentence where you mentioned yen, baht, rmb, sgd, etc.

Yes, I repeat, one can and should consider working abroad for higher savings in order to retire earlier.

The percentage from the wages earned maybe the same as the percentage saved working here, but if the exchange rate is high like 3 or 4 times, one is saving 3 or 4 times more and would reach the desired amount in ringgit much, much faster.

As for countries with lower exchange rate (in comparison to Singapore or Australia), for example Thailand or Vietnam which I brought up in the previous post, there are better paying jobs than here; maybe because of labour market demands on some specific skill… or whatever, the point is that if one is stuck in a lower paying job and could not quit working any earlier, then one should consider seeking higher wages abroad.

That is if one is set and aim to be financially independent, and retire early.

Yes, it is. If you can retire... some would have to work till they dropped dead as like the news of the 63yr old bus driver in Penang.

Anyway, the thread is on retiring early, meaning retiring much earlier than the mandatory retirement age of 60. The last few pages were more on seeking wealth and asking for stock tips. LOL.

The "few percentage people" who plans and set to be financially independent as early as possible as opposed to those who seek to spend as much as they earn and carry a housing loan of 35 years or more.

It is a matter of the individual's opinion of what comes first, the chicken or the egg.

In this case, it is a matter to choose between being financially independent earlier by buying a cheaper house with a shorter loan tenure or finding the most expensive house to finance for many more years.

So, its is not "only a number of top people can afford to do so", it is a matter of personal choice if the person is earning slightly above average.

Low minimal wage earners, no need to say lah... they are living from hand to mouth and just making ends meet. And also those on pension plans... where they have to put in the required number of years to qualified for pension.

If you browse back the first several pages in this thread, there were mentions that the retirement savings can be as low as RM400k, provided of course the house is already fully paid off and truly debt free.

RM400k in EPF of approx. 6% interest/dividen is equivalent to RM24k per year, or RN2k a month, which is sufficient for some to live on the interest alone without touching the RM400k at all.

Hence, they can live off the interest for life and don't have to worry about running out of money before they die.

So, if you can set an amount like RM600k and thinks it is sufficient for you to live on its interest alone, then it is a matter of personal choice. It dispels the notion that one has to have millions to retire early.

... which is needless to say on making adjustments for inflation, as am assuming people are somewhat financially savvy.

Catering for inflation doesn't necessarily means 'eating' the whole 400k.

If the monthly essentials is less than 1.2k and the remaining rm800 is for rainy days or extraordinary expenses or for semi-annual or yearend holidays...

Or the targeted retirement savings is enlarged such that the withdrawal is only 3% or 4%, and the remaining interest is kept back and allowed to be compounded for inflation. Thus the principal amount is automatically adjusted for inflation... the annual withdrawal is also automatically adjusted for inflation.

The 3rd option would be drawing down the principal as you age older, nearer to deathbed and no desire to leave a large amount of money to kin and immediate family.

Bank Rakyat does. Some other banks also have monthly interest in fd strictly for senior citizens. Also longer term placements of 24 months and above get higher rates. 60 months placements are not unheard of.

The correct performance chart should be on its growth performance. Ignore those charts plotting the nav prices, the nav prices of mutual funds are erratic due its distribution/dividend, it is wrong and meaningless to plot their nav prices as if they are same as gold prices.

P.s. in a large fd placement, one can also ask/negotiate a better rate than the standard board rate.


This post has been edited by j.passing.by: Nov 23 2019, 05:45 PM