Sayeed is a senior manager in a large MNC in Penang. Following his association with the world of investments focused in the past 5 years, both Sayeed and his wife are confidently leading to a financial successful lifestyle, his wife retired as an employee and today runs her own business, blessed with 2 kids, this couple have learnt through tough times about their financial literacy. Sayeed is currently focus in accumulating wealth and dreams of helping others achieve financial success. You can read his first post here.

Recently sitting in a restaurant, my buddy, commented on the few articles I have written before at; “Sayeed, why are you so materialistic. You wanna have big house, big car, million ringgit, various properties, just to show others, and how well you want to do!?” he continued, “Is this a satisfaction to you?, or show off to others of what you’ve got?”. Well, being a friend of mine, I didn’t really expect him to ask such a question, but to a certain extent he was really looking at the other side of coin that I have not seen yet. I knew that the reason I shared my story in earlier blog was to give hope and support to others that if I suffered, yet able to do it, so can you, and also put in a few strategies that may help others. Well, good, at least his question had me to share an interesting concept, on reasons why I want to have a Million.
Let’s go back to our current lifestyles, we live on an income, and we have expenses and tax that are unavoidable. Let say our household income is $10k a month, with expenses of house mortgage, car loan (some people got 2), child care, utilities bills (water, electric, phone, internet etc), credit cards, groceries, pocket money (inclusive of petrol money, food, drinks, movies); and finally let say we save $2000 a month, which means that our monthly living expenses would be $10 income – $2k saving = $8k expenses. While assuming all our months are same in terms of daily activities and expenses, which is not true, we need $8k to survive without savings. Now, I am not saying that all of us have $8k lifestyle, some people only live on $3k, $5k, while other may live on $15k, $20k depending on the lifestyles. So let’s take the example of $8k expenses monthly. Which means in a year, we need $8k x 12 to survive, which is $96k per annum. Do you agree so far? Now I am not putting in other expenses like holidays, festive season shopping etc with assumption we have had buffer in the $8k lifestyle.

The question would be, if we are not working after 55, or 60, our expenses remains the same and the source of income that stops for those employees and most employment in Malaysia are without pension schemes. So where is your source of income comes from ? Most people have a few options :

a. Live with their children, baby sit the grand children so that you get roof and food daily. – the lifestyle have changed, no free meals, even from our children in future. I know many may disagree with me but this is the truth.

b. Work part time while you can, but with the part time job, you may not earn as much as you were an employee, so re-size your lifestyle to what you can earn while keeping yourself fit for the job – better option would be not to retire anyway.

c. Have savings to earn up and replace your salary with similar returns as passive income, retire with a stagnant income as per your employment or even better.

I guess, you have already got the option right. (c.) Have savings to earn up and replace your salary……but there is an interesting twist to this. So I am very worried about my future now, what would happen to me when I pronounce retired!!, I wouldn’t want to be at (a.) or at (b.) that is a choice for now and the only way we can, while we can, change that is now to plan our future.

First of all, is the question of what type of passive income business is there with ROI for us to generate $96k lifestyle per annum ? Well, if we barely look into cash and savings accounts, at 3% interest, it would be $3.2M savings, if 5% then we need $2M and if 8%, we need $1.2M, finally with 10% returns, we still need $1M. So, if there is a savings or investment scheme (proven/legal/working) that gives us a 10% return per annum, year in year out, we need to have a saving of $1M!!.

The news is if you are 30 years old and plan to retire at 60, for the next 30 years every month you need savings of $2K to achieve that million (assuming all the compounding interest). Now that is if you have a place with 10% returns!! It doesn’t exist, what would be the best return rates that we have in market today – 5%?, 7%?, or 8%? The fix deposit is hardly at 3%, EPF 4%….so let say we got the best deal of 7% somewhere, Bank A; then we need to have savings of $1.4M !!, again if you are 30, and retiring at 60, so you need to start saving $3.5k a month, you can do the math.
So whether it is, fortunate or unfortunate, savings may be only one of the options here. But those already hitting at a million, you are save for now. I am not going to confuse all of us with the inflation rates and so on because your $8k lifestyle may not be the same in terms of buying power in next 10-15-20 years. But let’s assume, we are okay with that number and hope Malaysia will rule the world in terms of economy and the inflation doesn’t goes that high up. We have high hopes, Malaysia Boleh!!. What would be the other options ? That is part of the strategy that you ought to put into your plans, how are you going to achieve these retirement planning? Can the financial advisor and an insurance agent sit down with you to outline the retirement plan, if yes, then sit with them and have a plan, with a goal that when we say “RETIRED”, we want to retire in style.
I don’t see anything wrong, if we want to retire with a monthly steady income from our investments, with that income not only we are able to survive, but be able to provide to others, our spouse (that is a great time travelling and spending time together), our children (although earlier I said no free meals, but parents are always parents), our grand children (imagine them having to come to grandparents house to be pampered), and have our health taken care ( that should come from our insurance policy and not savings).
Do you have your plan ready ? Have you thought about it? Remember, procrastinating each day, you are losing the interest rates and days in mathematical calculations for your saving plan. We are still lucky to have started at 35. You?

    29 replies to "Why a million $$ goal?"

    • Chim Weng Cheong


    • Sam

      I am 19 this year, I started to learn how to save and stay at a low cost lifestyle since around age 16~17..I have goals on becoming rich/financial freedom one day even at a young age…

      Now studying in uni, during my free time I always search the internet to find sources of generating income, I am interested in investments, but I do not have anyone to guide me..

      my family do not invest and is still on debt…my parents do not save money, my family lifestyle is higher than the family income…and every time I persuade them to save money, I get scolded…they said I can only budget the income if it is earned by me, if is earned by them is up to them to decide…

      I really do not know what to do, I worry that in the future I have to support family and parents too…then my goals on becoming rich/financial freedom is much harder to achieve…

      need advice on how to persuade my parents to save money, and also need people to guide me on the world of investments…

      • Will

        Hi Sam, if you need any advice in investing in unit trust, feel free to contact me. It is my pleasure to share with you my experience. I start invest in unit trust when I am 20 years old and now I am 26.

    • Sayeed

      Well said Dan…

      Hajamaideen, it always not how much we earn, but also how much we spend. Yes the advantage is for those start saving early in thier lives. But it is never too late, at 53, how much longer would you hold to that job? There is still time to plan and work on other ways of increasing your income.
      KC, I don’t know about you but Hajamaideen would be a good case that I want to see if i can help him to work something out!! Hajamaideen, where about do you live in Malaysia?

      • KCLau

        Sayeed, you are very kind to offer personal help to your reader.

    • hajamaideen

      Hi Sayeed,really interesting to read ur articles.But,is it for 5 figure income earners only? I am sole breadwinner,earning 2k,with a monthly expense of about 1.75k.AND I AM 53 yrs. old.But i am working in a private company,no retirement limit.pls advise.tq.

      • Dan

        at 53 its way too close to retirement, but fret not for all is not loss, read guy kiyosaki rich dad poor dad, i have a friend whose father retired and having no income pick up the book and it inspire him to venture into insurance and MLM, 4 years later his earnings from insurance exceed more than 10 times his former salary, and his earning capacity is not limited to age limit, more so he decided how he want to plan his work!!

    • Matt

      Hi there ,i’m 19 years old now and i’m learning to be mortgage agent while i don’t have the courage to talk to the customers on the phone because maybe my verbal skill is too weak ,and i’m not planning to get into study now because i think studies is just a theories with some paper ,i want to experience real working experience ,so what do you advice me to do ?I can save money from now on but i didn’t earn much ,FYI i still dependent on my family for rental and expenses .


      • KCLau

        You will have more opportunity if you work in the sales and marketing line.

      • Sayeed

        You are an introvert, just like me in the past. We have fear talking to people. I was like that too.
        My advise is meet more people, talk to them….so what if you make a mistake, they laugh? you learn!!…reading a lot of books will help too.
        Go into a sales and marketing line, just like KC Lau have adviced. Better still get KC to mentor you and he can help you in this line as well…right KC?

        • KCLau

          Sayeed, thanks for recommending me in this case 🙂

      • Sam

        Hi Matt,

        I am 19 too, I have friends that do not continue studies after SPM, some even started part time working at age 15 or so…

        From what I have seen among my friends, yes sales and marketing field is the best to fit since you do not really need high qualifications for it. I have a friend selling phones and he can make up to 6k a month at max and average around 3.5k~4.5k a month at age of 18~19…but he started part time working in sales line since age of he learned sales skills throughout those time…

        I also know many friends who are doing MLM…some even make up to 10k+ a month at its peak, and around 5k+ on average a month…they are aged from 20~23 only…mostly are doing it part time as they are still studying in university…

    • Sayeed

      Laikos and Radha;
      John is right, it is never too late.

      Yes Henry, start early means start now, no matter where we are in life. Force saving helps.

      Look for income generating profiles.
      Thank you.

    • John

      Hi Radha, it is never too late. Since you still have 15 years to retirement, you can consider investing your EPF to get higher return than EPF dividend payout.

    • Henry

      Nice article!!

      And I’m agree with you guys! Start early on generating income other than merely depends on your monthly paid.

      For me, the best and a save way is to start on investment on unit trust, be it by Public Mutual or by FundSuperMart. Start it with RM1k, and have it on the monthly top up RM100 – RM500 (depends on your availability), take it as a challenge of force saving, in a long term you will be very grateful on the decision that you made today!

    • John

      Retirement planning requires dedication, skills and discipline. For example if you save RM500 every month for the next 35 years, with 8% return compounded interest per year, you can expect to have RM1.15 million after 35 years. And 8% average return per year is achievable by investing in a good equity unit trust fund for long term. The key is to start early and have the discipline to save for long period.

    • radha

      Already forty this year and dont have any savings except EPF, infact I am paying RM2340/- to credit cards and loans per month. Is it too late to consider retirement plans? Please advise. Thanks.

      • Will

        Hi Radha, you may consider use your EPF to invest in unit trust to get higher return in the long term.

    • Headhunter

      Laikos, your approach is exactly correct. Yes indeed, no need to be despaired, even at 33, you are still considered had learnt early, what more to say at 27…Good saving and investment (in properties) habits is the key.

    • Laikos

      doralin – Ah you soo lucky to read this at 27.
      Thanks again to Sayeed for the sharing. Really appreciate it. Even with his article, lowly paid person like me find it troubling every single day.
      Save 3.2K a month – I don’t have, start earlier then 30, I’m already 33. Seems like the only option left is eat maggie everyday. Well, I’m not despaired because saving like waking up early in the morning. It’s really hard to start with at first and it is so easy to slip of the your track doing it. For those who’ve no plan and not yet started, obviously what Sayeed said is right. Get a plan.For some (including me) 1 Million is a crazy amount of money I could never imagine off. But if there’s your problem too. Start small. say 5K in 6 months, or 10K in a year. The idea is to get started to get the hang of it. People says pay yourself first. But don’t over pay, it is as bad as well.
      I started with RM200 believe it or not. Not everyone earn tons of money every month. Once you are comfortable with that amount increase it. After a few months down the road with the habit you will find it very satisfying and you finally get into the habits.
      Again I agree with Sayeed saying procrastinating, you loosing everyday. Be it in investment of higher return or just as simple as ASB. Start ASAP.


    • Headhunter

      Sayeed – what a spendlid analysis you have here! The desire to have RM1 million saving and few fully paid houses and condos is not about showing off at all. In fact looking at the no. of brand new BMW or mercedes benz on the roads, say in KL, it does give us some impression that there are so many richer people. To me RM1 million is a lot of money..I feel good inside to have it in the account but for others, that’s just some chicken feed…so what to show off eh? Of course it boils down to lifestyles; afterall happiness is not necessary measured by how much money you have when you retire, some people are still happy with simple lifestyle. One of my neigbhours are a retired Japanese couple – they play golf almost daily…so their retirement is golf, eat I supposed, friends, entertainment, etc. they dirve a simple car – toyota corrolla..the couple seem contented and happy. My late grandfather who loved river fishing, fish all his life until old age…I don’t think he would want RM8k per month unless the money can enable him to find better river to fish on…so indeed it is a lifestyle thing..for me I may be retiring in KL at 60 or 65 because I cannot don’t work. I am afraid that a not so active lifestyle will shorten my life, so working or joining politics might be the things for me. So what retirement eh? Assuming I work on to 60 or 65, then I should be having enough money to give to my grand kids 🙂 cheers!

      • Sayeed

        Haa haa..thanks HeadHunter.
        Well $8k was just a analysis to look at what would happen in next 20-30 years to our lifestyle. You are right, Million is nothing in today’s world although it is a huge sum to accumulate. Thanks for the feedback and agree with you on lowering to a simple lifestyle as long as we are happy.

        • NAS

          Hi Sayeed,

          A very good article you have there. I have been thinking about my retirement plan as I see cases where retired parents are struggling to make ends meet and become highly dependent on their working children who are also trying to build their own family. I am 33 this year and for the past 2-3 years i focused on building education plan for my son, but now I feel I should start planning retirement for me and my husband. We are hoping to retire without being financially dependent our my son, or sacrifising our lifestyles. Where should I start?

          • Sayeed

            Hi NAS;
            Start with the basics. Know your financial capabilities first, your IN-s versus your OUT-s, then from there you build up your portfolio.
            To be frank, we all need to get out of our traditional way of thinking salary, and look at income generating options besides our career. Reducing expenses or loan free is not the ultimate answer, increasing income then coverting to wealth would be a game plan.
            Read books on finances, I guess you have read “Top $$ Tips for M’sian” by KC as a start. I believe there are lot more article in this blog that we can all learn a lot from.
            The hardest part is to start! Good Luck.

            • Headhunter

              NAS, to add on to Sayeed, I recommend you read “Millionaires are from different planets” by Azizi Ali. For me that book has changed my outlook and confidence in personal finance.

    • doralin

      I’m 27 this year, and just begin to look at this matter seriously. It so scary to think of the future. Thank you for sharing

      • Will

        Doralin, it is never too late to start! Important thing is we must be consistent and persistent.

    • Mond

      is there any plan for the 8-10% fix return in any other way?

      at 33, already exceed 1 million saving, but not comfortable with that, as my initial planning (or comfort zone) is always 2 million (with 5% interest rate) and only then can be a bit relax…my friends many are with 2-3 million saving, but they only save in FD which i’m not comfortable with the low interest rate of now..

      If there is any 8-10 percent return plan (fix) – but not through any kind of insurance based investment, then at least i will be more comfortable with current saving amount i have now..

      • Will

        Hi Mond, you may consider invest in unit trust. The risk is lower than invest in a single stock through diversification in many stocks or bonds and professional management. Historical return of equity funds over long term (5-10 years) is about 8-12%.

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