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Millennials could not save. What’s the solution, really?

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Millennials could not save. If we google this actual phrase, we get 13,200,000 results. it’s like WOW. Image as below. So, what’s the reason millennials could not save?

millennials could not save

There were many reasons stated about why millennials could not save. It ranges from what they like to how they love to change jobs and also their financial awareness or in some cases, the lack of it. We have another Article in themalaysianreserve.com where Sunway University Business School economist Prof Dr Yeah Kim Leng shared that millennials need to be quipped with sound financial planning skills and knowledge.

He said, “A high level of financial literacy will enhance the resilience of the millennials to the vagaries of the economy and better protect themselves from the various economic and financial shocks that have been occurring more frequently these days.”

He added, “While a high savings economy will elicit investor confidence, it is high productivity and competitive economy driven by strong technological capabilities and a skilled workforce that attract investments and catalyse high growth that will eventually translate into rising wages.” The article is a long one and has many more reasons why millennials are unable to save money. Read it here: Article in themalaysianreserve.com

When I was still in my mid 20s

One major reason I managed to save was because I was ‘forced’ to save. That first property I bought forced me to have enough portion from my monthly salary without fail, else the banks may come after me for the home loan repayment! That was later because before I could buy that property, I was also forced to save the downpayment for it.

So, suddenly 5 years before buying that home, I saved RM15,000 and 5 years after buying that home, I have paid another RM33,000 for the home. (RM550 x 12 months x 5 years). The home price also slowly appreciated. This was what happened when i was in my mid 20s all the way to late 20s.

That UPGRADE happened after 5 years

The reason why I say a dream home will keep on changing is because of the salary we earn. After working for 8-9 years, I was earning higher than when I first started, my wife’s also working and well, we decided to upgrade our home. Again, we were forced to save 5 years before this upgrade and that was another RM30,000 saved. 5 years after purchasing the home, the home price had more than doubled. It seems that the area many said were backwater have suddenly become in-demand.

Forced to save and wealth buildup usually happens TOGETHER

If I was not forced to save for my first home, I would have spent the money. RM15,000 could have funded 2 overseas (ASIA) trips easily. If I did not save for my second home, it could have funded another 3-4 overseas (mostly ASIA) holidays. Yeah, we could see that I could have had vacations in overseas every year.

If I was not forced to save, I could have used those extra funds to afford a more expensive car. It would have made me feel superior versus my peers; that I was more successful than them because they were driving a Proton or a Perodua.

In fact, I could have bought more stuffs, change handphone every year, drink latte in cafes weekly and more. I do hope that we now realise that everything I just said was what all these surveys and studies have said. That millennials do NOT like to own a home… that they like to go for vacations to relax themselves… that millennials love tech gadgets and more. I think they could do all these because they were not forced to save. Period.

It’s important to have priorities because after all these forced savings in the first 10 years of my life, I could now afford to go overseas twice every year (not necessarily within ASIA anymore), if needed I could buy a much more expensive car that that B-segment Japanese car model and if necessary, I could buy that RM2,800 handphone without the need for any instalment plan too. That’s the solution from my personal experience, if the millennials needed one. Happy understanding and maybe do something about it.

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Next suggested article: Millennials are finding it harder to buy a home?

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