Stretch your Ringgit – investment & wealth management 101

Recently, i attended Yap Ming Hui talk on "Stretch your ringgit - investment & wealth management 101". He is one of Malaysia's foremost authorities on financial freedom. He is the author of five best-selling books. His latest book is Roadmap to Financial Freedom : The Ultimate Guide to Achieve Financial Freedom:

http://www.mphonline.com/books/nsearch.aspx?do=detail&pcode=9789834172442

Some of my friend able to capture few key point during his talk in Unit trust. And i would like to share with everyone who invested in Unit trust:

1) Time horizon provision

- make sure have holding power

                          Share   Property            Bond     Fix deposit

Potential return    H          H                       M          L

Volatility             H          L                        M          L

Liquidity              M          L                        M          H

The right money in the right bucket

Low risk assets – saving, current acc, fixed deposits(keep ~6months money) à liquidity (low risk low return)

Moderate risk assets – balanced investment, diversified, selected property à retirement, children’s education, wealth enhancement (consistent above average returns, limit downside risks)

High risk assets – direct stock, IPOs, single country, theme funds, lottery à high returns/thrill (high risk high return)

2) Target ROI return – align portfolio with target

Moderate risk investor targeting for 8-10% annual ROI

3) Asset allocation (diversify) avoid concentrated risk and reduce volatility

4) Best of breed funds (invest in good funds, avoid lousy funds) –choose quality investment

5) ROI optimization – optimize portfolio ROI

6) regular rebalancing – help you to buy low sell high

7) dollar cost averaging (DCA) – help you to buy more at low price

8) cost effective and efficient platform - minimize hassle and cost

one more reminder from Mr Yap: if you are not practicing 4 or 5 out of the 8 guideline, or you do not plan to practice more guideline, please do not invest in Unit trust and find other product. For sure you will lose $$.

Retirement Planning Seminar (Part 2)

A lot of time people talk about the inflation. But how much those inflation impact our life? Will it impact our retirement plan? I got some good snap shoot taken during my seminar. I think it is good to share with you.

Do you remember this? Check out the coffee price below. I am not that old to experience RM1 for 4 cups of coffee. But i still remember RM1 bought me 2 cups of coffee ;)

By the way, 4 cups, 2 cups 1 cup or 3/4 cup is not the killing part. The Killing part is Starbuck Coffee. RM10++... My favaourite Green Tea Latte RM15++..... Haha.....

Let review some official inflation data from government web. Do you believe in below inflation figure? Do you think 5.4 for year 2008 is low or high? Don't laugh, you got your inofficial answer ;)

What is the implication of inflation rate toward your Fixed Deposit? you are earning a negative income (real rate -1.7%) for FD in year 2008. Sorry for those who has a lot of FD in year 2008.

How about your retirement fund? EPF. ehm... not too bad... slightly better than FD.... but you are earning an -0.9% in year 2008 as well. Will this -0.9% impact your retirement planning? "probably not for year 2008 data. average return still good with 5%"  ;)

How about below article? EPF has hard time to maintain ~5% return every year. So, what is your action? Do you still want to wait for government to gurantee your retirement fund? Some said your EPF is not sufficient, you need to die before age 77 (life expectancy in Malaysia) like what my previous instructor said ;) another instructor said, die also expensive.... haha.....

http://biz.thestar.com.my/news/story.asp?file=/2009/7/15/business/4318886&sec=business

 What should i do? Where are the source for your retirement fund? Stock? Property? Bond? FD/Saving? Same type of question i have been thinking...............

Below are some of the instruments that you could use to plan for your retirement. Higher risk give your potential higher return. Find your own sweet spot. Talk to your financial planner or unit trust consultant to plan for your future. Let start together... Happy Retiring and Happy Jobless..... ;)

Retirement Planning Seminar (Part 1)

I attended the retirement planning seminar. The instructor was a humourous guy from Public Mutual Brunch Manager, Vincent. He mentioned the top 5 fears for retirement survey result:

1. illness
2. capability to earn income
3. make lost in investment
4. inflation
5. continue prolong for economy downturn.

He joked about those fear also happen every month "Duit habis, bulan tak habis".... haha...
OK, let get into our real biz here today to share some good content during the seminar.

What is retirement planning? It is a plan to save and invest to maintina ones' pre-retirement lifesypte during the retirement years. Do you believe in one must have cash reserves of about RM1mil to be able to maintain one's current lifestyle 20 years after retirement? Check out the article below ;)

source: http://biz.thestar.com.my/news/story.asp?file=/2009/1/28/business/3128286&sec=business

What is your ideal retirement age? Some said 55? 45? 35? The best retirement age is yesterday and today i do not need to work, so nice :) But are you ready for your retirement? can your retire?

RM500,000 only last for 16.7 years if you spend RM2500 per month. Do you have RM500,000 in your bank?

Table below showed how much of Retirement Fund Needed at Age 55. Is your Employee Provident Fund

(EPF) or Government Pension Scheme sufficient to cover below figure?  A person at age 35 with RM2500 monthly expense requires more than RM1million lumpsum in the bank assuming that person live until 77.

I will share about on the inflation and instrument available in the market in my next Part 2 article.