tag:blogger.com,1999:blog-6361125136923734190.post3606545378398605894..comments2020-08-09T06:53:36.682+01:00Comments on SERIOUS Investing: Personal Money: How much is enoughfelicityhttp://www.blogger.com/profile/18387927527867436718noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-6361125136923734190.post-76783094630898351982013-02-03T16:25:27.439+00:002013-02-03T16:25:27.439+00:00Hi David,
Interesting info. Could you kindly shar...Hi David,<br /><br />Interesting info. Could you kindly share the spreadsheet with us so that we also can calculate our own numbers? Thank you!Anonymoushttps://www.blogger.com/profile/07574631681230646933noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-42059122870596927132013-01-11T17:27:18.959+00:002013-01-11T17:27:18.959+00:00In my opinion, not all hope is lost. If Mr. X insi...In my opinion, not all hope is lost. If Mr. X insists on having an annual expenditure of RM159,200 p.a. upon retirement, ceteris paribus, the plan could be modified as follows:<br /><br />First, in order for Mr. X to enjoy RM159,200 p.a.indefinitely upon retirement, an investment mix of 40% equity + 60% bond of about 8% p.a. would be recommended instead. Therefore:<br /><br />Amount of Retirement Investment Needed = (RM159,200 / 8%) x 100% =RM1,990,000<br /><br /><b>Revised Plan:</b><br />Target Retirement Investment Value : RM1,990,000<br />Average Investment Return : 12% per annum<br />Initial Investment Amount : RM18,000 (20% of his current annual salary)<br />Investment Period : 21 years<br /><br />Now, as somoene aptly pointed out - is 12% yoy really achievable? IMHO, 12% investment return p.a. is not too far-fetched, although it does take quite some effort and discipline to manage the investment portfolio and buying only investment-grade stocks. Here are some examples (investment-grade stocks with consistent dividends) without delving into too much detail:<br /><br />1. NESTLE : Full-history price appreciation (1989 - 2011) = 8.8% yoy + average 10Y dividend yield = 4.8%<br />2. DIGI : Full-history price appreciation (1997 - 2011) = 21.2% yoy + average 6Y dividend yield = 7.4%<br />3. DLADY : Full-history price appreciation (1968 - 2011) = 12.3% yoy + average 10Y dividend yield = 7%<br /><br />Assuming Mr. X's salary increases by 4% yoy, and he invests as much as 25% of his annual income every single year into his portfolio with 80% equity (12% return yoy) and 20% bonds (4% return yoy), he would have amassed as much as RM1.83mil by the time he reaches 55yo, which may still be short of the RM1.99mil target, but not too far off.<br /><br />Illustration : https://dl.dropbox.com/u/72612763/mrx.png<br /><br />One may argue if it is possible for someone to save/invest 25% of his/her income. But for Mr. X to reach his goal, he either has to commit to this, or something's gotta give. Eg. he could instead increase his exposure to equities, start with a higher amount etc etc etc.Phantom78https://www.blogger.com/profile/07802652045968873160noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-92013785604203551372013-01-11T06:47:06.538+00:002013-01-11T06:47:06.538+00:00It is indeed very difficult to save enough money f...It is indeed very difficult to save enough money for retirement. When one is young, he doesn't earn much. When he is in his thirties and forties during which he earns more, he probably has a family to care of, plus installments for cars and house. In fact his spouse would have to work to contribute to household expenses. Otherwise it would be tougher. When he is in his fifties, he still have to pay for car and house installment plus quite some money required for children's education, especially if he is thinking of providing them with better education overseas. Yeah unless he has some inheritance, or marry a billionaire's daughter, it may not be an easy task to achieve financial freedom at the age of 55 and be able to retire. Achieving 12% in equity investment? It is not easy too unless he is a savvy investor. Otherwise the costs of investing in a unit trust would eat away at least a third of the normal long-term return of the market. Invest himself? The costs could be even higher if he has no knowledge in investment, some one following others to buy Patimas. K Chttps://www.blogger.com/profile/02986490115485764028noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-32825433670150007792013-01-11T05:23:34.178+00:002013-01-11T05:23:34.178+00:00this is indeed a guideline towards retirement. if ...this is indeed a guideline towards retirement. if we can come close to that figure, that's fantastic, if we can't at least there is a certain amount accumulated by then + epf(if we contribute) regularly.<br /><br />p.s : who is this Matt guy?.?Shane Seehttps://www.blogger.com/profile/06983060298222800791noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-79345607024445986852013-01-11T04:41:39.600+00:002013-01-11T04:41:39.600+00:00Err fixed income fund return of 6% and equity cons...Err fixed income fund return of 6% and equity consistent 12% is stretching it a bit. Even WB is only compounding at less than 20%.<br /><br />Conservatively one would be better to use 4% for fixed income and 8% for equity. These are based on long term average figures.<br /><br />This means Mr. X needs to invest more and consume less...Garkhttps://www.blogger.com/profile/01768303613739635625noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-42469228466166780272013-01-11T02:48:20.738+00:002013-01-11T02:48:20.738+00:00Hi KC
I think there is a 5% inflation target ther...Hi KC<br /><br />I think there is a 5% inflation target there. I guess the annual withdrawal will only start once that someone retire. hence the 6% return should be able to cover the spending need.<br /><br />However, I am just wondering how is a person with RM72k income able to save RM2660 a month after tax etc.<br /><br />EPF is earning the person max 6+% on a good year. I agree that it is a challenge for an ordinary person to save enough for retirement, buut I guess this is the guide and benchmark. I have seen too many who just gave up as they do not save enough from their 30s or even earlier. Should not be the case. Building the war chest for retirement should be on everyone's mind unless that someone already have very strong inheritance.felicityhttps://www.blogger.com/profile/18387927527867436718noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-57526827347770531282013-01-11T00:37:53.731+00:002013-01-11T00:37:53.731+00:00How to file a compliant against this MATT?
Reall...How to file a compliant against this MATT? <br /><br />Really sick of this type of advertising. Big Seahttps://www.blogger.com/profile/00281973839764140153noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-82347971657022585452013-01-10T20:26:13.198+00:002013-01-10T20:26:13.198+00:00Another comment here. If readers here follow this ...Another comment here. If readers here follow this Matt fellow here and punt on forex, they will never have enough money for retirement, maybe with mountain of debts.K Chttps://www.blogger.com/profile/02986490115485764028noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-27806384061553883632013-01-10T20:24:35.341+00:002013-01-10T20:24:35.341+00:00felicity, good and very useful post for many peopl...felicity, good and very useful post for many people. I doubt many people have looked into their retirement planning which is very crucial for their well being after retirement. I got a couple of comments here. First your friend X would find his standard of living deteriotes year after year after his retirement because your calculation has not included inflation, after X's retirement. Secondly your lump sum requirement is based on perpetual annual withdrawal, which results a bigger amount required as opposed to if you assume X dies at the age say 75. These two factors may balance each other somewhat, but not quite. Actually I feel that doing this type of calculation using real number in terms of expenses required and real return, ie after adjusting for inflation, as opposed to nominal values, would be a more meaningful one.K Chttps://www.blogger.com/profile/02986490115485764028noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-49137869230156771622013-01-10T19:42:16.058+00:002013-01-10T19:42:16.058+00:00To calculate for the inflation rate I use a simple...To calculate for the inflation rate I use a simple formula whereby the current amount is multiplied with (1 + inflation rate%) to the power of the number of years you wish to calculate. Say current amount is RM10,000 and inflation rate is 5% while the number of years is 20.<br /><br />Then the formula would look like this:<br />10,000 X (1+0.05)power of 20<br /><br />For the monthly calculation, you can get that from my Investment Calculator section.Anonymoushttps://www.blogger.com/profile/09670704597582102557noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-54391650456565496402013-01-10T16:02:45.116+00:002013-01-10T16:02:45.116+00:00At the current inflation rate, no one will get to ...At the current inflation rate, no one will get to retire at 55 more like 70!!Anonymoushttps://www.blogger.com/profile/08419163807502624107noreply@blogger.comtag:blogger.com,1999:blog-6361125136923734190.post-75476191087898648162013-01-10T15:26:46.216+00:002013-01-10T15:26:46.216+00:00This comment has been removed by the author.CrabGrillhttps://www.blogger.com/profile/09216191884557923880noreply@blogger.com