You have worked for 10 years and you do not have even RM10,000 savings yet?

You have worked for 10 years and you do not have even RM10,000 savings yet?

Without savings, there’s no way one would have a property. Without a property, one will have to keep renting lah. How much could we save every month? How much should we save every month? If we could not save enough and it’s always just enough every month, how will this impact our future? Or perhaps we can keep earning a higher salary then to solve this issue of insufficient savings?

Fundamental to Personal Finance 101 as per Charles is…

Earn – Save – Invest and Protect. Earn enough and keep increasing the earning so that we have more money to save. Once we have saved, we need to invest these savings so that the returns are much higher than the typical fixed deposit. During this period of earning good returns, we just need to remember to protect our wealth so that we do not lose it all just because of one trip to the hospital for a treatment. So, if one has already worked for 10 years, how much should one have saved?

A simple calculation, maybe?

RM200 savings per month x 12 months x 10 years = RM24,000. Include in the compounded interest and voila, we should have around RM30,000 in the bank account at the end of year 10. So, RM10,000 should be very easy since RM30,000 seems doable as well? I know, maybe in year 1, saving RM200 could be hard. However, it’s like after working for 5 years, we could not save RM300 per month?

I do think this is a conservative number because the salary would continue to increase and if we are well equipped with the right attitude and communication skills, we will definitely be doing well enough for 2 promotions during this 10 years of working life. Agree? I know, there are so many temptations… Shopee… Lazada… iPhones…

iPhones could be the reason for the failure too

The below seems to be the cheapest model of latest iPhone currently. Let’s not talk about the Pro version. Assuming it’s RM4,000 and as soon as we buy, we use this for 5 years and we refuse to change to iPhone 18, 19, 20, 21 and only change when it’s iPhone 22. 🙂 We also assume the price only increased by RM1,000 at that time which meant that it would be RM5,000 per iPhone 22. This is just my own estimation yeah. No idea if there’s such a thing as iPhone 22 even.

Just these 2 phones will set us back RM9,000. (No wonder… this is where that RM10,000 savings went) This is assuming we only change once every 5 years. So, as soon as we change one every 3 years or even lower, the number quickly adds up and of course our savings plan will fail. No way anyone can go near RM30,000 if there are these temptations yeah. Of course I know, when we hold an iPhone, we get the recognition. We are part of a group of elite people. We also tell people that iPhones are the best because it’s not like Android phones which is less stable, more vulnerable etc.

This was one recent viral piece of news:

Article in therakyatpost.com “A Malaysian’s social media post questioning whether 30-year-olds without RM10,000 in savings have “something wrong” has created a massive online conversation that shows no signs of slowing down.

The person claimed that 30-year-olds should have at least RM30,000 in savings, arguing that after years of working, those who can’t even save RM10K “definitely have something wrong with them.” Article in therakyatpost.com

kopiandproperty.com readers, your thoughts? RM10,000 should be easy, no?

If you ask me, RM10,000 is possible. In fact, it could be more. RM10,000 is a good amount for emergency savings. Nothing more. However, if the younger generation has always been spending without a lot other thinking, then chances are even this RM10,000 is hard to do. This is also the reason why many people say it’s not possible to buy a property nowadays. Without savings, there’s no downpayment. Without downpayment, there’s no chance for a property yeah. Without a property which will become an asset when we retire, then we just have to ensure by then we somehow have enough money to keep renting.

Aim to have enough as emergency savings

In an advanced economy such as America, things are also looking foggy too. Emergency savings are not so common. Article in fortune.com. One in three Americans has no emergency savings set aside, according to a new survey from Empower. Gen Z is hit hardest, carrying record debt and struggling to find jobs as entry-level hiring slows. 75% of Americans in the survey agreed emergency savings are essential for financial security.

For one in three Americans, a single surprise bill could spell financial crisis. Article in fortune.com.

Please do our best not to have the same situation.

Cheers.

Happy learning. 

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