HI All, sorry for the late Post. I was having my fasting month and just celebrated Eid festival. Now i am back and i will talk about on why we need so much money when we Retire.

 I believe this is the ultimate key of all the post that i had written. All the savings and the amount of money that we must have  is to be used on our glory days.  Let me point out why we need so much money for our retirement:

 1. We will have no other source of income at that time.

 2. We still be spending money just to live.

 3. We are going to live long after retirement.

 4. We want to able to live a long time after retirement.

 5. The money has to cater inflation.

 6. The money has to last a long time- ideally forever

 I will continue later on to analyze each point.

1. They Have no other Income source at that time

This is straightforward. If we are retired, not working and therefore have no income source. In fact, if we discount the pension, most people do  not have any income source at all.( Their static assets such as a  house, while being valuable, do not provide any income.

2. They will still be spending money just to live

Now while they do not have any income source, they will still be incurrring expenses and spending money. That does not stop. They will still need to buy food, shelter, clothes and pay the bills. And this is just the basic stuff, purely for survival. But You and I know that we all spend more money on other things as well and not just on survival alone.

3. They are going to live for a long time in their retirement

The average life of expectancy at birth for males In Malaysia is now 71 and 75 for females. The figures have risen over the years and will continue to rise in the coming years. This rise is due to the better healthcare, better medicines and an increase in health consciuousness among the population.

However, the key word here is average. What that mean is that some people will die before 71 while some others will die after 71. If they are fortunate enough to die before the money runs out, then great (if you call dying early is great).If they live beyond that age, then a wholly different story emerges.

You are certainly not average; you are above average!! In other word, you will be live beyond those figures. Particularly those who take good care of their health and have a history of longevity in the family.

The point here is, living longer will also mean that you will require more money.

4. They want to be able to live the life that they desire

The money should do more than just allow them to exist. It should be enough for them to live the life that they desire. Yes, the usual food, shelter,bills and clothing. But also enough to travel, play golf attend the theatre, buy a new car and perhaps even do some investments.

Historically, retirees tend to spend betweem 70 to 90 percent of their last drawn pay. That means that if their last salary is $5000USD, they’re looking at spending anywhere between $3500 to$4500 a month when they retire.

I suppose that kind of plan is acceptable for the average retireee. Personally though, i think that such plans are flawed. I think a man should be rewarded after working 40 years. I think a man should get more, not less, money after retirement. In fact, the idea of getting  less money after working had for 40 years is absurd to me.

 While its not wrong or illegal, it certainly does not make much sense to me. So i do not have such distorted plans for myself. I plan on having more and not less money, at my disposal after retirement.

Now, this is not to say that im going to spend it all. But i want to know that money is there and available should i choose to do so.

5. The money has to cater for inflation

This is a very strong point. The money has to cater for infaltion.It is fine to say that they want to have $2000 or $3000 or hihger a month. BUt if that figure remains constant throughout the retirement, then they will be in big trouble. That’s because inflation will erode the value fo their income.

With an inflation rate of 4.5% percent a year, $2000 will only be worth $1600 in 5 years time and $1288 in 10 years time. The buying power will be reduced and the quality if their life will be downgraded  drastically. To downgrade a little bit is fine but downgrading drastically is another story all together. I highly recommended against it. So you would want the money to rise appropriately to cater for inflation.

By the way, this is exactly whats hitting the current pensioners. When they retired a few years ago, their pensions, while nothing specatcular, enabled them to lead a descent lifestyle. However, as it did not cater for inflation, the value of the money was eroded. End result, pensioners are being squeezed by inflation each passing year.

6. The money has to last long time, ideallly forever.

The last but certainly not lest point is that money should last forever.

“Forever”..Yes folks, forever. What is the point of living high and mighty for a few short years, and be totally broke for the rest of your life? What’s the point of having money for a period of time and then zero later on? And do you want to be broke in your old age? The answer is obviously no.

That is why the money should last for a long time, ideally forever. The only way this is going to happen is when the capital amount is large and substantial enough(for their purpose) to begin with. When  the initial capital is large enough, they will just be spending the interest  and dividend portion of the money, never the principal.

That way, the capital remains intact. This means that the money will remain there forever financing the lifestyle. But the moment they start taking out the principal, they begin the slide downwards. As the principal amount is less, the returns will also drop. And as they dip more and more principal, they’ll earn less and less. Eventually, all the money will run out.

End result? They’ll old ,poor and miserable. And that my friends, is the mother of all problems. 

 Thats all for my Posting at the moment. I will continue on the Topic of ” The expenses that goes down after retirement “

Hi All, welcome back after a few days that i had not written anything. So let me share what i know abouut the INTERNET. The internet is the combination of the interconnected- networks. It means that it is a connection between two points.

Historically, the inter connect starts when it is connected between 2 PC’s . From there onwards people start to innovate and make use of the Inter- connect at the larger scale. Now everybody can connect throught out the entire world with just a click of a button.
The greatestr thing of the Internet is that ” Nobody owns it” . We share it all among ourselves.!!!

In this article, you will learn about the basic underlying structure of the Internet. You will learn about domain name servers, network access points and backbones. But first you will learn about how your computer connects to others.

HI all,  welcome to my new category and the name of this category is Internet and computer. Since  i am an electronic engineer that is working at Intel Cooperation. I believe i should share with you all  the fundamental  knowledge  of the  Internet and Computer.

We are using the tools everyday and we need to know the basic understanding so that we can become more knowledgable and effecient. All i say at the moment, the INTERNET is a powerfull tool to convey messages. Look on what i am doing now!!!

Ok Folks, enjoy the ride

                               Don’t become an ex-millionaire

It’s so sad and tragic. After years and years of saving money and careful frugal living, you see all your money disappear in a flash. Just because of one error in judgment - unfortunately in this case, a fatal error - you are now facing a bleak and uncertain future.

One day you are a millionaire and the next, you’ve joined the ex-millionaire club.

Whatever you do folks, make sure that this NEVER happens to you. This is not a case of having loved and lost. This is a case of losing and losing. Hard as it may read, but it is better not to have the big money than to have it, and then lose it all. After all, you never really lose what you never had.

So let’s us look at the three reasons why many folks have been relegated to becoming ex-millionaires. In the hope that it will not happen to you.

1. Starting a business

Starting a business is perhaps the number one reason why a lot of millionaires are now ex-millionaires. Particularly those who have never been in business before.

I realized the temptations are there. You have the cash. Why not earn more returns from your money by starting a business. After all, if the business really takes off, your money will shoot to the heavens.

But think again and again. Then think one more time. First question - what do you know about running a business? If you cannot even answer this question, then case closed. Keep your hard earned money in your pocket.

As mentioned in the book “Millionaires are from a different Planet!”, 80 percent of business close up shop in the first year alone. After five years, only five percent of business will remain open. Now, that’s a mighty high rate of failure. In short, business is already very, very risky. Don’t make it any worse by opening up shop if you don’t know anything about the business.

As a side interest, check out the list of business yours truly have been offered - property development, importing furniture, Network 21, insurance agent, music shop, CD recording, music studio, managing a rock band, Amway, Cosway, internet MLMs, car repair and best of all, cow breeding! While I’m sure the businesses can make money, what I know about them is as much as I know about the sex habit of earthworms - nothing. So thank you very much, think I’ll keep my money this time around.

2. Inappropriate investments

Making inappropriate investments is another culprit. Someone comes around saying why be happy with 12% return from ASB when you can make 30% (or more!) in … (fill in the blanks). The “investment” can be futures, options, currency trading, commodities, properties, time-sharing, gold, silver, opals and the latest - internet ventures.

If you love yourself and your family, take my advice - keep the cheque book and shut the door. All the above - while it can make a lot of money for some selected professionals - will only drain your bank account like a vacuum cleaner on a jihad.

Folks, any investment that is too good to be true, is exactly that - not true. For starters, no one is gonna broadcast on any investment that can provide a return of 30% plus per year. They’ll be too busy trying to keep it to themselves!

3. Buying expensive toys

After years of living from hand to mouth, coming into some big money can drive folks wild to the nth degree. I’m sure you have read reports on some of the big spending Felda settlers. In one extreme case, after getting the money for their land, two sixty plus year olds went out and bought themselves super bikes!

Many others went on a similar buying spree for themselves and their children - gleaming new Protons, big huge bungalows including swimming pools, home theatre systems, gold chains a foot long and just as thick, and any other expensive toys you can think of.

All these wild spending will only take them to one lonely club - the ex-millionaires club. What is worse is that it led them to the ultimate poorhouse - no land, no money.

These are just but three reasons why some folks become ex-millionaires. Now that you are forewarned, make sure you do not join the list.

Stay a millionaire. It’s much, much better. For starters, you have more money!

      Simple ways to cut your electric bill

We often take our electric bill for granted. And as time goes by, as sure as the sun will rise tomorrow, the bills will creep up. Sadly, even when we see it going up, we just shrug our shoulders and accept that it is the cost of living and maintaining our house.

But it ain’t necessarily so. I have discovered that I can cut down at least twenty percent of my electric bills by making some simple changes. It does not take much doing but it saved me a lot of money. Some of the things you can do to save on your electric bills are listed below.

Use fluorescent bulbs

Use fluorescent light bulbs instead of incandescent bulbs. They are more efficient and longer lasting. My electric bills have dropped some RM40 per month since I changed to fluorescent bulbs.

Use energy efficient light bulbs

I realized that saving energy is not a big thing in this country. But these energy efficient bulbs - while being just as bright - can reduce your electric bills in the long run. The manufacturers claim the savings to be over 25%. And that’s some big money right there.

Use low wattage light bulbs

For areas that do not need very bright lights and illumination, use low wattage bulbs as they are cheaper to run. Of course, you should also ensure that you do not fix a high watt bulb into a low wattage fixture. For example, putting in a 100 watt bulb into a 60 watt fixture is triple doo-doo. Not only it wastes energy and money, but you also run the chance of damaging the fixture. Banyak rugi loh…

Switch off lights when not in use

Maybe obvious. But guess who is guilty of this? That’s right. Yours truly. I often leave lights on even when going out of the room on the basis that I may return in a short while. But often time, I come back two hours later. An expensive two hours, I may add.

Not anymore though. I now switch off ALL electric appliances if I’m going out of a room. After all, if it can reduce my bills and save me money, why not? Heck, I’ll switch off anything if I can save money by doing so!

Don’t set the temperature of your air-conditioner too low

Of course the whole idea of having an air-conditioner is too keep a cool comfortable temperature. But that does not mean that you have to set the temperature down to Arctic conditions. Other than freezing you to death, it is also very expensive. Choose a comfortable temperature setting - say 24 degrees Celsius - and stick with it.

You should know that each degree lower drains your wallet.

Use ceiling fans instead of air-conditioners

Ceiling fans are very effective while being a lot cheaper to run. So whenever it is not too hot, switch on the fans instead of the air-con.

And according to Consumer Reports in the US, by turning both the air-con and the ceiling fan on, you will also save money. For example, set the air-con at 25 degrees and the fan will reduce the temp by a further two degrees. In other words, the room now is a comfortable 23 degrees.

Don’t set the temperature of your refrigerator and freezer too low

You can turn up the temperature of the fridge and freezer by a couple of degrees and your food will remain as fresh as ever. But your electric bills will go down. You win both ways!

Of course, do check the owner’s manual as to the recommended setting.

And if you want more…

If you like to find out more ways to reduce your expenses, check out the book 1001 Ways to Cut Your Expenses” by Jonathan D. Pond. Needless to say, it is full of ideas in which you can save money. Even some far-out ideas that no one will think of in a thousand years. Examples - ask for a modest tombstone or even more drastic, to be cremated instead of being buried! Nothing will top that!

Hi Folks, last time we talk about 5 ways to keep your savings. Of course, there are other things that we are paying throughout our savings.  The payment of cars, house, loans and other stuff that are preventing us from savings.

All these other goals, wants are just screaming for a piece of our cash pie.Which one gets the money? And yet another reality is that some unexpected things will crop up, divorce but it happens. No one gets married with the intention of getting divorce, but it happpens.Once it happens, you have to deal with it. Often time, it will cause a major drain to your bank account.

 Lets see what these realities of life are and how they can affect your retirement savings.

 1. Buying a House

This is the main major expense that people spent which is the mortgage payments. They often take away at least 30% of the salary. And thats a lot of money for 1 item.  If we add another 20% for settling other debts such as the car loan, that leaves only 50% over to live and do other things including our retirement fund. This explains why most people never have enough money to save for anything, let alone their retirement.

2. Unexpected major financial expense

If anything is for certain, some unexpected financial expense will crop up at one time or another. So, perhaps, we have to expect the unexpected! Statistics have shown that 75% of families would have some major financial expense in any ten year period.

What can these be? A lot. Pregnancy ,loss of job, repairs to a home, car or major of appliance, accidents and of course, death of a major breadwinner. These affects live tremendously, which will obvioulsy include the retirement plans. 

3. Divorce

Yet another reality is divorce. As i have written above, no one gets married with the intention of getting divorce.(Maybe no one except of few Hollywood Personalities). A divorce is always a bad news. Everyone loses and everyone is hurt in more ways than one.

 But it happens. And as much as it hurts, sometimes divorce is a better alternative (would you prefer to argue everyday  and live miserably with  someone you do not love anymore for the rest of your life?)

  And of course, divorces affect finances immensely. Many  miilionaire became exmillionaire after costly divorces. Estates that took years to build  are split in half, with the lawyers are taking a fair chunk out. And obviously, retirement plans are thrown haywire after divorces.

4. Inadequate insurance coverage

A lot of people have an inadequate insurance coverage. Some do not even have insurance at all!!  As a result, when a catastrophic accident occurs, such as fire burning down the house, they lose it all. They lose the house which is already bad. But now they have to start all over again as the house was not covered by insurance. This will create tremendous pressure on the financial situation of anyone. At that point in time and for the next few years at least, saving for their retirement  would be that last thing on their mind.

5. Loss of assets held in joint names

Some people hold assets in joint names, such as husband  and wife or father and son. The purpose of doing  this is:

1. To enable both parties to claim ownership to the asset

2. To ease the processing of transfering the asset to remaining owner should one party dies

3. to protect the assets from creditors.

Unfortunately, this sword cut both ways. If the other party is declared bankrupt, the asset can also be affected.If creditors sue one party and claim ownership to the asset, it can result in massive problems for the other party. In fact, assets have been lost because they were held in joint names.

6. Frequent Job Hopping

Some workers tend to job hop a lot. While to change employers every few years or so is normal, to do so regularly may not be to the workers advantage.

The main purpose of changing employers is because  of the better pay and benefits offered by the new employer. However, many employees leave for less pay and benefits. Some actually, leave employment without having another job offer in place at all. They leave for reasons such as disatisfaction with the employer, not getting along with fellow employees because of work preassure.

One of my friends told me that some drivers in his company last for only one or two months. As they find the company’s culture of working hard something alien, they leave even if they do not have another job elsewhere yet. That means there are times when they do not have any income and therefore do not contribute anything to the pension fund or retirement fund.

7. Extended periods of no income

There comes a time when an individual goes through a period of no income. This can be due to a temporary disablement, being fired from their jobs, retrenchment or done voluntarily. This period can be for months or years.

So we have to prepare for all this uncircumstances so that we can prepare for our fund throught out the period.

8. Tendency to spend all the income to maintain the lifestyle

I believe most of us have a tendency  to have a good lifestyle.I can say  this is normal especially those living in a main city. We tend to  use all our cash to maintain our cozy, comfortable  and often posh lifestyle. If we can afford a BMW 5 series, than that will be the car that we will be driving. Although we would do just as well to buy the 3 series, few would choose the smaller car.

So its better to have a cheaper car yet comfortable and stylish. Again, what are we competing for. We are just satisfying ourselves!!!  For those who wants to maintain a levish lifestyle will have 2 loses:

1. Leaves us little cash  to spare for our old age

2. makes it difficult to adjust a lower lifestyle after retirement.

So that’s all for the 8 competing goals for us to know. Its already too much!!!.

On the next article, i will write more on ” Why we need money So much!!!”

” What is important is not whether you are busy, but its wether you are progressing “ 

Hi folks, you have not saved a cent for your retirement. Lets get straight to the point.Now lets look at what you can do to offset the problem that we all have.Lets look at the solution so that you can catch up on your retirement savings.

1. Start Saving  Today

Yes, we must admit that we must start Saving today!!.  You must save your retirement regardless of anything.Even if you will not get anywhere to those figures, you must still save. A penny saved today can mean a difference between being out in the streets  and living in your own little house somewhere. While you may not live the life of your dreams, the money that you save today could still enable you to have a decent retirement.

I shall also spell out some strategies that you can do to avoid being old and poor in later articles. But that includes you saving the money right now. So save anyway and start doing that right now.

2. Reduce your expense drastically

Next you also need to reduce your expense drastically. “But I dont see anywhere I can cut down on my expenses,” you may protest. “I am already living a simple life as it is. I just have cafe latte  and cheesecake at Starbucks for breakfast and lunch at Dome and I often cook my own dinner. I only go out once or twice a weak and shop for that latest clothes only every other weekend. I dont think i can reduce it!!!

 OR IS IT?!!!

The truth is that many of the things we accept as needs today are just wants. For example, 30 years ago, few had television set in their homes. 20 years ago,  few had colour TV’s. 5 years ago, few had PDA’S. I am not saying that we should do away with all the gadgets. They are certainly usefull and make our lives easier and more productive.

 BUt that does not mean we should get everything that come out. If  you look hard enough, you will find many ways in which you can reduce your expenses.You could have coffee and cake in your house instead of Starbucks. You could go out once a  month instead of once a week.  You could buy DVD instead of watching movie at the cinema. You could shop for clothes once in 3 months or 4 months instead of every week. And there’s plenty more you can do to cut down your expenses.

3. Build A Second income

One of the effective ways to boost up your saving is to built your second income. Unfortunately, this is the most difficult thing to do.It  is hard to do not because it is difficult to do.  It is hard to do because of the monster in  your mind.

“Professionals do  not have part time jobs  on the sidelines” is the insaid motto that echoes so loud. Only clerks with low pay do extra  work. Folks all the above are all myth. Where is  the law  that say we cannot earn a 2nd income. While building a second income source may mean having a part time job, it does not necessarily mean having an additional job as we know it. For example, if you rent out properties and get income from that, you do not have a 2nd job.  But you have a 2nd income source.

If you write for magazines and papers  in your spare time. You are not moonlighting. But you have a second income source. And i believe theare are a lot of things that we can do. Even selling old newspapers that we have!!!. Its better than nothing.!! I will elaborate further on this matter.

So , lets think and try folks. If you have the will, you must have GUTS!!!

4. Move to a cheaper place

This is the one step that will make  the most difference. BUt it is also the hardest pill to swallow. Lets Face it. You’ve worked hard all your life to be able to live in a beautifull house in a fine neighbourhood. Unfortunately, this dream is costing you and your family a bomb. The mortgage alone is draining a lot of money from your bank account. Add the maintenance and all, and you can see a lot of money flowing out from the house.

Guys, its time to talk with your wife and children. Ladies its time to confront realities. You do not have enough money for your retirement. You may end up penniless in your age. And that is certainly not cool at all! It is more crtical to have a house than to stay in a house you cannot afford.

So sell  the house and move to a smaller and cheaper house.(I said  cheaper not the slums or the woods). You will win three times by doing this:

1. Probably make some money from the price appreciation of the first property. Often time you can make a susbtantial gain from the sale.

2. Reduce the outflow of cash from maintaining the large house.Your mortgage drops or perhaps eliminated totally if you pay cash for the second property.The maintenance of the smaller house should be cheaper.

3. May enjoy life better at the new place. Living in a main city is expensive. Why dont you stay at a place that is a bit far from the city but had cheaper commodities.This is good, you have nothing to loose. Generally, those who live in the main city cost much higer than living outside  the city.

5. Retire later

The fifth step is to retire latter. Instead of calling it quits, you work. I know this is hard to swallow, but its the way you can save your money a lot. As long you’re working, many good things can happen. You’re employed, you’re making contributions, carry responsibilities, have an income, can continue your savings and at the same time, avoid drawing money from your retirment fund. All these will mean that your retirement funds will last longer which is a great thing.

 God gave us the life so we can do something usefull and contribute to a better world.And having  a job does exactly that. Therefore the longer you keep working, the better it is for everyone.

SUMMARY

So there you go folks, the 5 steps you need to do to catch up on your retirement savings, particularly if you have  been spending out the  money all these years. These may be radical steps for some people but radical times call for radical answers. Crisis times call for crisis answers.

Of course, despite the above   recovery strategies, you may still run short of money. Lets face it folk; it is unlikely that 2 years of extreme saving will make up for a lifetime of overspending.It is doubtfull that sacrifcing the last 3 years before retirement will cover up for the extravagavanza living in the past 35 years. 

It is better that you know about it today. Yes you are going to run short of money when you retire. This is bad news indeed. But knowing about it today when you are still working is a blessing of sorts. You can still do something about it. In the worst case scenario, you could prepare yourselves and your family  for the storms ahead.To be forewarned is to be  forearmed.

Now in later articles, i will talk about other competing Goals.Let us see what are the realities of life are and how can they affect  your retirement savings.

My Offshore Investemt : http://www.penangdollar.myswisscash.com