Had a conversation on FaceBook regarding the costs involved in creating a retirement fund... Thought it might be helpful to share it here :)
The above stated savings plan is a straight-forward savings plan which does not take into account advanced (and riskier) strategies such as leveraging (the use of loans) and active investment through stock market valuations etc. This form of saving and investing is suitable for salaried professionals and executives who do not have the time to actively manage an investment portfolio. It is automated and robotic.
Many people do not like the idea of 'taking risk' with their money by investing, but they forget that inaction equals to taking risk with the quality of your life after employment. Most would end up spending the money of frivoulous stuff anyway. Remember that your LV will not help you when you are out of the workforce. A realistic look at the true situation and planning for the future is vital.
If you haven't started, there's not much time left...
Private questions are welcomed at iInvest@hotmail.my
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I love your statement of "inaction equals to taking risks". By the way, can I assume the calculation of your 1-million retirement fund already takes inflation rate into consideration?
ReplyDeleteHi TC, yes, it is 1 million in FUTURE dollars (25 years time), which is roughly equivalent to about 500,000 in today's dollars assuming 3% per year inflation rate for the next 25 years :)
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