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:

逾半国人储蓄难撑3个月 About half of Malaysians' Savings Can't Last for 3 Months

新洲日报2019年10月5日财经版第3页

看到这篇报导，感到些许无奈。原来马来西亚人的储蓄是那么的少。到底问题出在哪儿？

二十几年前，刚大学毕业的我刚开始工作时，薪金也是惨不忍睹。当时的我只是一味的量入而出，不浪费辛苦赚来的钱。有规划的消费，从来没当过月光族。就因为这样，那时的我因工作的关系虽居住在外地，每个月还能储蓄超过七成的收入。虽然低薪但至少还有储蓄。在那同时，我也努力学习投资。在投资领域里我也跌到过。但我从错误中学习让我创建自己的投资模式。之后收入虽然增加，也因为结婚，生子，买屋，买车等等负担下，我还能存下至少四成的收入。控制花费，储蓄，投资与积极的财务管理让我在30岁时达到无债务，40岁时完成财务自主，47岁正式提早退休。因此，我还是真的不是很理解为何当下那么多的马来西亚人的储蓄撑不过三个月。

我认为国人应该留意自个儿的消费模式。当我在外走走时，我不会随意消费。但我观察到那些奶茶店却挤满了年轻人。他们面不改色的花超过马币10块钱来买一杯奶茶。我的眼镜几乎要掉了下来。我可以在普通咖啡店里用不到马币1.60喝到的奶茶，为何那些年轻人要多花超过10倍的数额购买？为何时下的人们愿意花千元换手机而不储蓄？说到底，不就是要跟潮流，要最新最好的，只为了一时的过瘾。其实我们只要在消费时三思，情况肯定会好转，想成为月光族都很难。就从今天开始，好好研究消费模式吧！

This Chinese article is sharing some information about 43% Malaysian's savings can't last for more than 3 months. I was shocked when I saw this report. It turns out that the savings of Malaysians are so small. What is the problem?

Twenty over years ago, when I was a fresh graduate, my salary was terrible. However, I did not waste my hard earned money. Careful consumption planning had make me saved more than 70% of my monthly income. Although my salary was low, I was still able to some some. Meanwhile, I also learned to invest. I failed in  investment as well but I learned from my mistakes. This has make me to create my own investment model. Years after, even though my income increases, burden on marriage, childbirth, buying a house, buying a car, etc. increase, I still able to save at least 40% of my income. Continuous spending control, savings, investment and active financial management have allowed me to reach debt-free at the age of 30, financial free  at the age of 40, and early retirement at the age of 47. Therefore, I still don't really understand why there are so many Malaysians don't even three-month savings.

I believe people should pay attention on their own consumption patterns. When I walk outside, I don't simply spend. But I observe that the tea shop was crowded with young people. They queue to buy a cup of tea that cost more than RM10 while I can have the same at RM 1.60 in a regular coffee shop. Why do those young people spend more than 10 times more for a cup of tea? Why people willing to spend thousands of dollars to change their mobile phones? In short, it is just to follow the trend for the moment of fun. In fact, as long as we think twice before we consume, the situation will definitely be improved. Start today and study the consumption model!

Life of Early Retirement

During chatting, I ask my wife what I have changed after my early retirement. She says I have become friendlier, more smile on face and spend more time with the family. My kids tell me that I have become more patient. My observation to myself is that I walk at slower pace to make myself easy. No work pressure has make me to show my real heart on greeting with my neighbors and friends when meeting each other. I strongly believe that relaxing mindset and feeling happy are keys to remain healthy.

After Thought After Reading "Quit Like a Millionaire"

In early August 2019, when I was browsing a book catalogue of a local famous bookstore, I came across an introduction of the book which as shown over the left hand side. Even though I have achieved early retirement for more than half a year ago, the introduction of the book in the catalogue still make me to buy this book. 

The book author is from China and currently staying in Canada. Her poor family background has caught my attention on how she able to survive in high cost city in Canada. She hated her unpleasant full time job and wanted to quit as soon as she can. She, together with her husband, able to retire at the age of 31 with a net worth of $1 million. The author explained all these at the beginning of the book. In this review, I would like to pick up some points to share and discuss.

到底为什么？ What is happening?

载自新洲日报投资致富2019年8月19日第24页

看到这标题体，你有什么感想？你是否也面对同样的窘境，甚至有过之而无不及？

就一般而言，我们必须拥有至少三个月的生活费的值作为紧急基金。重点来了。何谓生活费？这必须包括衣食住行的基本需求但不包含不必要的花费。如果能累计到六个月的生活费的值那会更好。但以此文章而言，看来半个月的需要都拿不出来。为什么呢？这只有从你的日常消费来找出个所以然。除非你有记帐的习惯，要不是不可能完成的。

从日常帐目中，寻找那些没必要的消费。小心研究是否可以避免或减少。我的建议是那些适当有意义的消费（如旅游，親子，家庭聚餐等等）可以加以控制。若因为省钱而完全没适当的娱乐，人生也没什么意义了。

再来就是债务重整。在债务方面，你必须务实。尤其必须避免无意义的债务（如信用卡）。在来就是如何尽快解决大债务如房贷。唯一能做的就是能够存多少，尽可能将房贷尽早缴清。我个人就是用这方法将房贷在五年内缴清。在这五年里，我的确过得很清寒。但对我而言，辛苦也不过这五年。而且当时我还年轻，也没家庭负担（还没成家立室）。所以，我建议那些还没结婚成家的年轻人，就让你的年轻吃点苦，以后的日子也会好过些。我就因为在31岁时已将房贷供清，下来我便可以专注在财务累计上，才能成就我今日的财务自由，才能做回我自己。也就是说，时间绝对是你财务成功的朋友。越早开始，成功地几率就越大。

我身边有许多朋友到了我这年龄，都羡慕我能这么早得到自由。我反问他们当我在年轻时为房贷缩衣简食时，他们在干什么？他们说在享受花费带来的快乐。这就是因。现快乐，辛苦就随之而来。中国人有一句话说得好：先苦后甜。我对这句话深信不疑。

现在就别再没方向了，快点设定你的财务目标，划定你的财务路线图，脚踏实地去执行吧！

This Chinese article is talking about an average American can't even take out RM1,680 (US$400) immediately if required. What do you think about this? Are you facing the same dilemma, or even worse?

In general, we must have a minimum of three months of living expenses as an emergency fund. What is the cost of living? This must include the basic needs of food, clothing, housing and transportation but exclude unnecessary expenses. It would be better if you could accumulate the value of living expenses for six months. But in this article, it seems like average American can't even take out half a month's needs. Why? This is only can be found out from your daily consumption. You could only complete this by having the habit of tracking your expenses.

From the daily expenses records, look for those are not necessary items. Carefully study whether they can be avoided or reduced or not. My advice is that appropriate and meaningful consumption (such as travel, family gathering etc.) can be controlled. If there is no proper entertainment for the sack of savings, life will become  meaningless.

Then there is debt restructuring. In terms of debt, you must be pragmatic. In particular, it is necessary to avoid meaningless debts (such as credit cards). It is important to reduce huge debts such as mortgages as soon as possible. The only thing that can be done is fully utilize how much you saved and pay as much as possible for the mortgage as soon as possible. I personally use this method to payoff my mortgage within five years. During this five years period, I lived frugally. But for me, I only suffered in that five years. Further, I was young and I didn't have a family burden (I was yet to get married). Therefore, I suggest young people who have not yet married to work hard for your better future. I have already cleared my mortgage at the age of 31. Therefore, I can focus on the financial accumulation. This is how I achieve my financial freedom today and be my own. In other words, time is definitely a friend of your financial success. The sooner you start, the greater your chances of success.

Many of my friends with similar age are envying me able to be free so early. I asked them what they were doing when I was a young and focusing on clearing my mortgage. They say that they enjoyed the joy of spending. So, this is the cause. There is a Chinese proverb that says work hard now and enjoy later. I am fully convinced on this.

So set your financial goals, draw your financial roadmap, and implement it at no time!

Half a Year after Early Retirement

For the past one month, I have been busying on sending my father for medical follow up. We had spent lots of time on getting information on his illness and the doctor suggested for an operation after 1.5 months of medication and following up.

Critical Success Factor #1 on Achieving Financial Freedom: Control Your Expenses

There are two critical success factors to attain early retirement:

1. Control your expenses
2. No debt

 Today, I will like to talk more about factor #1.

Five Months after Early Retirement

Time flies. I have early retired for five months.

For the past one month, I was busy on taking care of my parents. Old age has been deteriorating their health. My father admitted hospital and managed to be discharged two days later. These incident has enhanced my belief on maintaining good health. I have been maintaining a good lifestyle by:

Four Months after Early Retirement

Today to be marked as full four months after my early retirement. I just completed my financial review recently and glad to see that my income is higher than while my expenses is lower than my plan. This means I am in a better position even without active income.

晚年经济独立 Being Financial Independent during the Golden Age

新洲日报 大霹雳 2019年5月18日 第15页

老实说，我从来都不相信养儿防老。因此，我的信念是不要给孩子们增添烦恼，我们俩老自个儿照顾好自己就好了。我们的规划是供养孩子们到经济独立或至多25岁。至此之后，在钱财方面，我们不会烦他们，也希望他们也别烦我们。

也许大家会觉得我好像不尽人情。其实，只要我们俩老不因为金钱而麻烦他们，好让他们能更好的管理好自个儿的家庭已是给他们最好的礼物了。若到了自立的年龄还指望俩老供养，是不是太过分了？我们俩老还要享受下来的日子。若他们有孝心，应该不要因金钱过来烦我们俩老。所谓谈钱伤感情。只要他们日子过得好，也就是给我们最好的报答了。

要做到晚年经济独立，年轻时的规划是绝对不能少的。我的规划是从我25岁时开始的。我是边规划边学习。重点是要有一个精确的最终目标。下来要做的就是画出路线图前往目的地。此图就是所谓的计划书。画出图后，还必须实践，不要只是纸上谈兵。 跟着路线图走的时候需不时检讨路线是否实际并适时调整以确保在指定的时间内到达终点。这就是整套的财务规划。说难不难，说容易也不见得。最难得地方在于自律。许多人就败在这里。当你不能自律的跟随方案进行的话，还谈什么成果。下来就是不愿意学习。财务管理和投资都需要学习。学习过程中难免会有错误。这时以其灰心，不如自我检讨，从错误中学习才是前往成功的不二法门。

那你们开始了你们晚年经济独立计划了吗？

This Chinese article is talking about being financial independent during the golden age. For some parents, they believe that their kids will take care of them when they are old. As a matter of fact, their kids will face other life difficulties as well.

To me, I never expect my children will take care of us. My belief is that we, as parents, will provide them financial support until the age of 25 at most. By then, we will not ask for financial support from them as we hope that they could put more effort on settling down their family. If they success, this will be the biggest gift to us.

To be financial independent during the golden age, you have to start your financial plan as early as possible. I started mine at the age of 25. I learned and practiced at the same time. The first time you need to have is where you want to go and by when. Subsequently, you have to draw a roadmap to get to your destination. Your map will be useless without action. You also have review your progress against your roadmap and make necessary adjustment to ensure you will arrive your destination within the stipulated time. This is the whole financial planning about.

It is actually not that difficult. However, people fail mainly due to lack of self discipline. If you can't even follow your roadmap, don't even talk about success. Also, if you unwilling to learn, you will also not get what you want. The whole process is talking about mistakes and learning form mistakes. By doing so, you will be able to fine tune your route to make sure you reach your destination.

Have you started your financial plan for your old age? 

3 Months after Early Retiremeent

Some of  my friends told me that I would be bored three months after retirement and soon I would look for a job again. Now, 3 months has passed, I don't even have any feeling on going back to be an full-time employee again. This is simply because I very much enjoy my time being filled up with various activities such as having daily morning exercise, having my each meals slowly, taking care of my plants, slow reading, learning Japanese and Hakka, watching my favorite dramas, tutoring on my kids school subjects, helping my wife on house work and cooking, shopping around with my wife during weekdays...(the list goes on). What surprise me is that I only realize that I have so many activities when I am writing this.

Recently, I have dig out my long lost-touched guitar. After replacing the broken first and second strings, I started to play with it a week ago. Since I could only play simple guitar music, I would like to learn more on guitar playing skill at the lowest possible cost.

Health or Wealth, Which One Would You Choose?

Money is important. Without money, we can't even meet our basic needs nowadays. That is why we all work for money in order to survive. We work so hard that we fully utilize almost every awake minute to earn. So hard until we have no idea that we have gradually deteriorated our health. Here comes a question, is it worthy to forego health for wealth?

2 Months after Early Retirement

It has been 2 months after starting of my early retirement. There are some significant changes over my life which I would like to share in this post.

First, my life focus has been gradually diverted from boring & pressurized daily full-time job to life enjoyment. When I was still an full-time employee, most of my day time had been occupied by my then employer. Of course, this is a must according employment contract. Each and everyday then, after a-day work, I was so exhausted. I didn't have any mood to enjoy the rest of my day as my mind was still filled up by work related issues. I still had to consider solutions of those issues even though I was already so tired. I couldn't sleep well due to anxiety. This was really torturing and my health had been affected.