$$ Tips

Today my female boss told me she plans to retire earlier and she read about how to save money. Her plan is to save a lot of $ to settle her debts (loans) as soon as possible.

I asked her "Do you know how much a person needs to earn before he/she can retire?" I ever calculated, it's RM2 million - RM3 million on a basis of living a reasonably good life! That includes the expenses on food, house, car, bills, traveling, medical etc.

Therefore for an average income group, it's quite impossible to go for early retirement by just saving $$. Instead of saving, one needs to do investment to earn at least 10% yearly return. The rule of thumb is, if u put ur $$ at a place which can gain 10% yearly return, within 7 years, it will double up. Say for e.g. if you invest 50k with 10% yearly return, in 7 years it will become 100k. Then in another 7 years it will turn into 200k. Then in 35 years time, it will become 1.6 million.

On the other hand, if you have debts, don't worry about settling them fast. Let's say if the interest rate for your debt is 5-6%, then you should invest your $$ at somewhere you can get a higher return. In that case, it can cover your interest loss and at the same time earn another few % of investment return. If one dumps all the $$ to settle debts, then he/she will have no $$ for any investment => no multiplication on the $$.

Ok now everyone pays me RM100 for the tips!

Haha... however the challenge in Malaysia is to find a place which can offer 10% yearly return at low risk...