January 25, 2017
It’s important to have resources to guide our investments. Starting right is half the battle won. Today, I will recommend three sites for all of us. These are the three sites that should give us an idea where we are today and where we could possibly arrive at in the future. We can even predict what will happen to our EPF savings if we get only an increment of 5 percent per year for the next 35 years! First one is close to what most of us are doing; our careers. You can visit the KWSP / EPF’s site which provides to us an EPF Savings Calculator. Please refer to image. For those of us who started with RM2,500 as basic pay, we can predict what will happen to us when we work till 60. Yes, 36 years of non-stop working. Scary yeah. Haha. We also assume average increments of 5 percent and average bonus of 1 month per year. Actually, the final result is not shabby at all. Even with these consistent and I would say conservative numbers, we will have RM648k when we retire! So, for fresh graduates, the key is to work hard and climb the corporate ladder, regardless of our major.
Second one is about our foundation; savings. Do we save enough for retirement? According to some financial planning experts, if we save 1/3 of what we have today continuously, we would have 2/3 of what we have when we retire. Here’s the article: Save one-third to have two-third when we retire. The website to take a look at how much we can save and how much our savings can grow is this: www.calculator.com.my. Let’s look at some assumptions. In the beginning of our career, it’s not easy to save RM1,000 per month. Do note though that when my wife was working in Sandakan and her salary was RM1,300 she could still save half of it! Haha. Yes, she stayed with her family. However, further down the road when our income becomes higher, saving RM1,000 becomes easier and later when we are a senior manager, saving RM1,000 is considered super easy. So, if we save RM1,000 per month till we retire with an annual interest rate of 4 percent, we would have very close to RM1,000,000! For those who would like to save more or lesser, use the calculator and see for yourself!
For those who would like to see how much would our home become 30 years later when we have finished paying for it, you can use this: www.timevalue.com. With some assumptions such as continuous price increase of 3 percent every year, you will be happy to note that the affordable apartment that you bought today may just be close to RM1,000,000 30 years later. Note that all these are based on ASSUMPTIONS yeah. Plus the apartment you bought has to be completed and people are staying there lah. It cannot be in the middle of nowhere, not connected, not completed etc etc. I also do not dare to think what’s the actual value of RM1,000,000 by then. Perhaps it’s the same value as RM400,000 today. Actually, even if it is just RM400,000 in value, it’s not bad at all. It meant that you have hedged against the inflation and your home value stayed the same 30 years later. No huge gains either though.
Hope you would benefit from these three new resources. If you know of any good calculators out there, please share with me too. Every time we share, we gain together. Happy calculating!
written on 22 Jan 2017
Next suggested article: Maximising our resources, rent the home we currently stay?