Low income equals low savings? Do something about it.

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Someone mentioned that other day that it is not easy to help those with low incomes. The reason he said so was that these people may have way too little to save and without much savings, there’s little they could use for investments anyway. I would not say what he said was not true. However, I think the definition of ‘poor’ may need to be properly addressed. Poor because every sen of their income were used for NEEDS, then yes these poor people needs government intervention. One example? The policy of minimum wage. As long as inflation remains low, an increase in the income will go a long way. If this is the case, then it’s true that without anything left after all the NEEDS were paid for, then there’s no way that the person could start investing. If we were to look at the M40 group for example, they definitely have something to spare,if only they spend on NEEDS and not WANTS. Then again, think harder. What’s the possibility that this person (really no savings) could read, study and rise up the ranks?

What’s the possibility that beyond just read, study and rise up the career ladder, the person should also think about working a few hours extra everyday for the extra money for savings and thus, investing? A close friend is a real estate negotiator and he’s also helping with his family’s orchard and at the same time is also a plumber and electrician. His earnings? Doubled. Somehow, he has time for his family because he loves his daughter a lot. By the way, even Charles of kopiandproperty.com is only blogging on a part-time basis while he is still having a full-time job. Read about his experience with the blog here: the journey to earn more than pocket money  Oh yeah, Charles Tan is me. Haha. The cost to start blogging something of interest? Nearly nil by the way. Just need effort, time and discipline. Most of us would have heard of the famous quote. ‘When there’s a will, there’s a way.’ There’s a similar one in BM too: “Hendak Seribu Daya, Tak Hendak Seribu Dalih.

Conclusively though, low savings equal to low investment potential. Low income can be remedied by getting a promotion or working two jobs. At least for a short period of time and not until the day we retire. However low savings will haunt the person when he is old enough to realise that he should have invested more. Well, if you are reading this now, perhaps it’s time to save more and start that investment journey. Relying on the government should be the last resort. EPF should just be a supplementary savings for the golden days. It should not be the only one. It is already a proven fact that retirees in many developed nations are struggling because they are living longer but financially poorer. Better start something, somehow. Happy understanding.

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written on 12 Aug 2018

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