An Intriguing Retirement Plan

wild Retirment Plan

Few days ago, I saw a Chinese investment forum where there were some investors discussing about retirement plans. They were asking how much capital a person required in order to invest and generate comfortable living standard after retirement. One of them mentioned it was up to individual’s dream plan. He said some people do not have big retirement dream. As long as there is a garden, planting flowers, in order to get life going, they will feel this kind of retirement life is good enough. This kind of retirement dream doesn’t require large capital. Indeed, I have seen quite a lot of retirees having such a small dream, just get their retired lives going without any plan to advance in anything.
As for me, however, this kind of retirement life is quite astonishing! Because it seems to have no more life purpose, just waiting to die one day! My expectation of a retirement life should be a life better than present life. Because when we have worked for almost our entire life, our next cycle of life in retirement should be entering into another stage of happiness and enjoyment, instead of retrieving into something backward. If we are expecting a better lifestyle, then we would be excitedly waiting for retirement days to come.

Work after Retirement

One of them mentioned he would work till his last breath, because when we do not do anything after retirement, life will be boring and meaningless! I concur very much with this point. We often hear working people complaint about how hard their works made them, and they began to imagine the wonder of life if they do not need to work at all, just living a life of relaxation, watching TV, movies, eat and drink whole day long! They never realize how unrealistic and impractical this can be. Once this day comes, they will feel very sorry. In fact People lives for personal significance and meaning regardless of age. It is only through personal contribution to others and to the society that a person discovers and experience true meaning of life.

Robert Kiyosaki, the distinguished author of Rich Dad and Poor Dad, mentioned this point in his book. When he was about  35 years old, he finally reached a stage of financial freedom. He thought he would no longer need to work anymore but just to hang around and enjoy life through eating, drinking, playing golf, watching movies and so on. At the beginning, he felt great. But after a few weeks he began to feel bore, life is dull and getting miserable. So from that day on, he began to “work” again. But his work attitude is no longer the same as before, because he found what he likes to “work” with, not for “money” but for significance and meaning. There he found the true fun of life.

Nature of Work for a Retiree

Nevertheless, a retired person has to face the fact that physical strength will gradually decline due to aging. He should not continue to take those works that require physical strength and mental stress. So I will expect myself to continue to “work”, but it will be a different kind of “work”. This work will make me happy, enlightened, and meaningful. This “work” should be easily carried out even to a point of lying in bed. One of those works I came up is full time investment through the internet and help to educate others to invest! This is what I am trying to prepare myself in this blogging business, ha ha…  😀

In the investment forum, they also asked around how much money for a capital they think a retiree will need to generate a comfortable retirement life. There was a consensus of having at least a million Ringgit or more to start with! I also concur without any doubt with this point.  I had one time played with these figures before. If I earn an average of 10-15% of the annual return on investment, I need to have at least  RM 1,200,000.00 and only then I can earn RM 10,000.00 per month. This monthly income is much better than my present income and it can bring me more flexible lifestyle preferences. Of course, by then I do not have to spend all those money away every month. I could have some extra to offset inflation, reinvest to generate compounded capital growth and/or give to charitable activities and so on.

But RM 1,200,000.00 is a gigantic amount of money to most salary earners. It is almost an impossible dreams to most of us even as investors if we started late in age.  So, many forum participants felt quite discouraged looking at that mountainous figure. Nevertheless, I have a good news here in this proposal.

Achievable Excited Retirement Plan

Recently, when I pay attention to Fundsupermart investment platform, I have discovered something very enlightening. Let me share in detail;

Everyone agrees that investment in mutual trust funds is a very stable investment, its return will not be very high, and neither will its price fluctuate too much. I have observed that every month on the Fundsupermart platform, there is a little window showing the highest return of investment of fund performances every month. The performance can be as high as 4-5%, or even higher. As of today, the performance of return of investment is between 6-7%.

Best Fund
Monthly rate of return in Mutual Fund can be as high as 6-7%.

If we try to learn about market movers and increase our investment sensory to invest into the right market at the right time, we only need to expect a return at least 2% per month, then we can made use of RM 500,000.00 capital to generate RM 10,000.00 for monthly passive income after retirement.

The feasibility of this goal is also quite high. Because out of my investment review this year, I found that one of my portfolios not only achieving 2% of return in a month, but consistently for 9 months reaching 2.2% of average rate of monthly investment return (equivalent to 26% annual rate of return). One of the biggest contributors is Manulife India Fund, followed by Manulife Greater China Fund in that portfolio. While some other portfolios are also having 1.8% – 2% of monthly return of investment.

Funding the Capital

As for the capital funding of RM 500,000.00, it is also not a big problem. If a person’s career is working in any professional office even as ordinary officer, for such a lifetime employment, she/he should have that amount of retirement fund from EPF saving, or somewhere near that figure if not equivalent upon the time of retirement.  The only concern now is whether we are learning how to invest in mutual fund effectively. Or whether we know how to find fund that can generate a monthly return of investment not lesser than 2%?

An very encouraging and timely advice I found out accidentally from Robert Kiyosaki is digging deep instead of diversity in investment. He encourages investor to focus on what he is interested and try to discover more skill and knowledge in that field no matter whether it is in paper assets, property, businesses or commodities.

Honestly, I have to admit that currently I have not reached such a sharp investment skill consistently yet.  I can only manage to achieve such result occasionally. I believe if I want to achieve this investment return consistently in the future, I have to pay some more efforts and continue to work on. But I am willing to move in this direction. Because this is an achievable goal and everyone can learn to achieve it through mutual fund investment too!

Do you think so?



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