Advises from Advisors?

At all time, I am a strong advocator of doing financial planning by own self. Reason being no one knows me better than myself. Of course, by doing so, I have to spend lots of time and resources to equip myself with the ability of doing self-financial planning. Learning is one thing, keep updating myself is another important step to enhance this ability.

I know, many of you may claim that you don’t have time to learn. Why do all these hassles while you could opt for experts to manage your money? Yes, they claim themselves licensed financial planner.  But how do you know what they are thinking of.  If they are truly an expert in their field and care about you, why they bother to earn your commission by selling you their expert advice. Do think about it.

In this article, I would like to share my personal experience on dealing with these experts. 

Two year ago, in the year of 2020, the local savings interest rate kept dropping a year after my retirement. Even though it did not affect me much in long term but getting an average interest return of less that 2% p.a. from more than 4% p.a. in short term did bother me. In another words, my passive return was slashed by more than 50% a year. I therefore seek for an expert to help me to diversify savings so that it could at least maintaining at 4% p.a. That expert advised me to invest in unit trust while she could reduce the initial charge from 5% to 1% and help me to monitor it. She selected a few funds for me and I went in. Sad to say that those funds she selected for me did not perform well. After making a 12% loss within a year, she asked me to top up since the market is low but I rejected. It turned out my decision was correct; those funds gave me a total paper loss of 22% in subsequent 6 months. When it recovered slightly to a loss of 15%, I cut the loss and went out. The market did not perform well since then. Lucky me. She apologized to me but I didn’t even bother to look at her. I don’t trust her anymore. This is a very typical example that I didn’t do the selection by myself and left it to the experts. I have to accept this consequence.

Another story is about deceased income tax declaration for my mother. My mom passed on August, 2021. I was very sad but I know very well that the income received on her assets must be handled carefully before they are transferred to respective beneficiaries. While waiting for Administrator Order hearing which I had applied it in August, 2021, I asked an expert about the declaration of a deceased income tax. She advised me to do it after I got my Administrator Order. During the tax season in 2022, I asked again as I worry there will be a penalty if I did not declare timely. She said again to wait for my Administrator Order. After I requested her to double confirm with her financial planning company about the process, they replied that they only handover it to their tax agent for their client and have no idea how they handle it. For my case which I will do it by my own, they only ask me to check with my tax agent which I don’t have one. I was shocked about the reply from a financial planning company. I finally received my Administrator Order a year after. When I checked with Inland Revenue Board, the replied that I’ll have to pay the penalty over the applicable tax payable after my mom passed. Luckily there was no tax payable for my mom’s income after she passed and, therefore, the penalty is zero. So, can I trust these experts?

There is no doubt that there are good advisors around, if you and me are lucky to meet one. So, instead of listening to their advises blindly, do your homework.

Beginning of 3rd Year of My Retirement

Today, February 11, 2021, is marked as the beginning of 3rd year of my retirement.  Since I retired at the age of 47 in 2019, I have never regretted the decision I make.  

I recall that some of my friends told me that I would definitely get bored in 3 months based on their unfavorable experience (They wasted their time and sat there doing nothing. Pity them) but it did not happen to me.  Even until today, some of my friends are still asking me what I do daily during retirement.

As a matter of fact, it took me some times to adjust myself to get use to my retirement life.  At the beginning, I realize that I lost my  corporate identity.  I was a Senior Manager in an Japanese company based in Malaysia. I was also a head of 5 departments with more than 35 subordinates.  The job did give me opportunity to grow in corporate world with tremendous exposure in various aspects of business world.  I learned how to handle people in and out, how to see problems in widen angles, how to get around with the top management and many more.  Some of you might wonder, since this was the case, why I still decided to have early retirement.  Well, simply put, this is not the life I wanted.  I like my job but I dislike to get around with people, see people, think people and react accordingly.  I felt like I wasn't myself but an actor.  I had to absorb all the favorable and unfavorable consequences as my superior won't care and my subordinates couldn't effectively assist me on the problem I faced.  Huge work pressure had affected my health and temper.  To me, no matter how much I earn, I just couldn't buy my health if I lost them.  Since I was financially ready as I started my financial plan in more than 25 years ago, without any hesitation, I tendered my resignation the 3rd time on January 1, 2019.  I still can recall the sweetness of being released.  Finally, I am the owner of myself.  But loss of corporate identity means that I no longer need to wake up early and rush to work which make me uncomfortable in the initial 6 months when I saw the other rushing to work in the morning while I took my time for morning jog.  I felt shame when my neighbor saw me taking care of my plants at 10am in the morning.  I hate people asking where do I work.  I finally get rid of these feeling and proud of who I am 6 months later.

I spend tonnes of time on reading in the initial 1.5 years of my retirement and now I am focusing on learning computer programming by writing some programs which I have been thinking of.  It needs commitment and time to learn. As it is my pure interest, I don't feel any pressure on learning it.  I also learn Japanese language just for my own interest.  I have been watching Japanese dramas in order to improve my listening skill but still a long way to go as they are just talking too fast (LOL).

I plant flowers and vegetables myself.  Fertilizing, cutting, clearing weeds, watching up insects are also keeping me busy.  Helping my wife to cook and do housework and get around with my kids (chatting, discussing, advising etc) are also part of my daily life.  I really don't have time to get bored.

I continue to do my own stock investment but less active due to unstable Malaysian stock market.  Due to outbreak of COVID-19 and MCOs, poor economy has make BNM to reduce interest rate in order to stimulate the market.  Low interest regime is a killer to retirees like me.  I used to enjoy at least 4% p.a. on fixed deposit but now only about 1.5%.  I don't satisfy with this.  I, therefore, look for financial advisor to see whether there is any medium to low risk investment options.  I come to know a financial advisor who is introduced by a good friend of mine.  She shares with me her track records on investing in unit trusts which I hate the most previously.  However, her track records really impresses me.  Furthermore, she is willing to reduce the initial charge to 1% from 5%.  Therefore, I give it a try from January 2021 and the result is promising.  So, I continue to top up my investment on unit trust which I also have opportunity on exposing investment opportunity in overseas market such as China.

Two years of my retirement has passed.  My financial performance is lots better than my plan, mainly contributed by relatively lower expenses with higher investment return.  What I am going to do next is to act according to my plan and review my action should overall investment environment change, just like I start my unit trust investment again that able to give me impressive return with low charge and expert monitoring.  I also would like to realize my wish to travel soon after the pandemic is under control.  I was stuck in my house in 2020 due to COVID-19 and I do hope it could this could be over the soonest.

Here, I wish everyone stay safe and stay healthy.  May your financial dream comes true soon.  I also wish all Chinese readers Happy Lunar New Year.

Are You Financially OK?

Malaysian Government implements Movement Control Order (MCO) for 28 days since 18-March-2020. Non-essential businesses are not allowed operation and all people are requested to stay at home in order to curb COVID-19.  

Has Outbreak of COVID-19 Affected Your Life?

It is rather sad to see the outbreak of COVID-19 around the world. Malaysian Government has imposed Movement Control Order (MCO) to curb the spread of COVID-19. Initially, the implementation of MCO was between 18/Mar/2020 and 31/Mar/2020. Within this 2-week period, we are advised to stay at home except purchase of daily necessities. Even so, purchasers are advise to keep their purchase period short and return home as soon as possible. Only shops that are selling daily necessities are allowed to operate while the others must be closed during MCO period. Malaysian Government later announces extension of MCO to 14/April/2020. First few days of MCO, many feel bored at home. I become puzzle how could this happens. Aren't these people having their hobbies? Since they have more time for themselves now, isn't it true that it is a good time to do what you like?

Thank you! My Fellow Readers

Few days ago, I received a postcard from one of my readers, KM (initial of my reader), who shared with me about how he had benefited after reading my "Freedom".

Taking this opportunity, I would like to express my thanks to KM for your praise. KM particularly emphasized on how important on knowing "Personal Inflation Rate". Yes, indeed. Without proper inflation rate on financial needs calculation, your financial plan might not realistic. 

A Sure Way Towards Financial Freedom

Extracted from Sin Chew Jit Poh Fortune Investment Weekly dd 10th Feb 2020 Page 22

This Chinese article is sharing how an 30-year-old American accumulates $1 million at the age of 26. His secret is very simple: Live Frugally. He is a Youtuber cum real estate investor. He claims that he is not a big spender and saves 99% of his income. For example, he doesn't go to expensive cafe for coffee but buying coffee beans and make it at home; he doesn't go for branded outfit but go for cheaper alternatives; he compares prices when shopping etc.

One Year Anniversary of My Early Retirement is Coming Soon

By mid-February 2020, I will celebrate my first anniversary of my early retirement. My friends keep asking me questions like:

1. How do I feel for the past one year? 
2. Do I feel bored? 
3. How do I spend my ample time? 

Do You have to Quit when You are Financially Free?

Last week, I read an article which shares a 32-year-old young retiree goes back to work two years after his retirement. He says the reasons for him to return to work are: