The Ant and the Grasshopper.
If you like to know what’s the ant and grasshopper story, this is the story of the hardworking ant and the lazy grasshopper. The ant works hard everyday, saving up food for the coming winter. Grasshopper did not because food was still aplenty. When winter arrives, the ant has enough food to last the whole winter. Depending on which version you were told, the grasshopper died of hunger or the grasshopper got a reprieve because the ant gave it just enough food to last the winter and when the new season came, the grasshopper also work hard to store food for the next winter.
Got savings or No savings.
In real life, this happens all the time and in all countries. Please stop thinking that this happens only in Malaysia. Within the same graduating class, we will see people who could save a lot of their monthly salary and after a few years, they would have built up a substantial amount in their bank. At the same time, they would have peers who did not have much savings, relied on credit cards and some may even face the potential to become a bankrupt once their financial issues spiral out of control. Earlier article on bankruptcy here. It’s harder to become a bankrupt.
Savings alone is no longer enough.
Sorry to tell everyone this fact. Statistically, we have been working almost the same number of years in the 60s, 70s, 80s and today. We graduate at 23, we work until 55 or 56, roughly 30 plus years. So, if we have saved for the last 30 plus years diligently, then our savings would have been enough if we only need it to last the next 10 plus years.
Life expectancy for Malaysians used to be in the 60s during the 60s and 70s. Today, though we are still working for almost similar number of years, our life expectancy is close to 80. In other words, our savings for 30 years plus will need to be enough for 25 years… Close to 1 versus 1. Do we believe the RM100 we saved when we started working will still be equivalent to RM100 when we retire? Or that the FD rate would help this RM100 to be enough? I have no idea but I think everyone has to realise that just saving diligently is no longer enough.
Understanding the actual life-cyle to prepare for retirement: Earning, Saving, Investing and Preserving. In brief, it involves keep upgrading ourselves so that the salary we earn will go higher every year. It involves saving enough so that we can start investing. Just remember investing is not speculating and is not trading and is not buying. Read more to understand what investment really meant. We also need to protect and preserve what we have versus sudden unforeseen circumstances. Yes, reading kopiandproperty.com helps too.
Happy understanding that sometimes, the story then and the story today will also have to evolve. It’s no longer an ant versus a grasshopper story. Maybe the ant needs to also think of preserving the food they have so that if there are unforeseen circumstances, they still have food which was preserved and could last for more than just 1 season… Happy preparing.
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Next suggested article: What happens when we have no property when we retire