Hey guys,

This is just a heads up that next week’s summary may not happen as I’m going to be climbing a mountain (Mount Kinabalu in Malaysia) at that time. I’m excited and nervous. Nervous in that this is the first time I’m climbing something that takes more than one day to accomplish and excited because this is the first mountain (of many) that I get to climb over the period of two days.

Anyway, hope you enjoy this week’s set of articles!

From Our Own Site

Why Saving For Retirement is Bad Advice
Let’s get something clear – I agree that people do not have enough money for their life after they stop working. What I disagree with is the answer to the problem is telling people to save.

Instead, I’m a much bigger fan of having people use that money to buy back some of their time (whether that’s taking a month or two off between jobs, or taking unpaid time off) and exploring things that they think they would enjoy doing during their retirement years. 

Once there’s clarity on the things they would love doing, something magical happens…

From Traditional Media

Three behavioural barriers to solid retirement planning, and how you can overcome them
Barrier 1: People will avoid making a retirement plan because of the perceived length and complexity of the process.
Barrier 2: People tend to go with the default option, and the default is not to plan for retirement.
Barrier 3: The idea of retirement planning can bring on strong negative emotions and people may put it off to avoid those emotions.

The writer provides some good suggestions for each of those barriers and although I do not believe in saving for retirement in your 20s, I do agree that these are all huge barriers need to be brought down for those that have a clear goal for their life at retirement.

From a few Canadian Bloggers

When we are living much longer… better prepare MORE
Malaysia is starting to run into the same troubles that developed nations run into. In some studies, Malaysia will have more people who are going to be in the “retirement phase” of life than in the income producing phase. Not only that, but the life expectancy will also continue to improve.

Now that’s great news from person to person, but it’s actually a tough spot for a government because they will have more people to take care of than people who are paying taxes. The government has already increased retirement age from 55 to 60, however, that number will only go up. In Canada, it’s already at 67.

This is one of the reasons why I don’t believe in relying on the government for retirement. By the time I get to that age, the age would be much higher, or the income they provide will be much lower. But more importantly, I don’t believe in waiting until I’m that age to be able to do what I want (more on that in the future).

Take away: create your financial plan under the assumption that you will not get any support from the government. If, by the time you’re at that stage in life and there is some sort of support, then it’ll be the cherry on top.

The One Major Move To Increase Your Net Worth
One of the biggest obstacles to building wealth is not necessarily having a low income – it’s having high living expenses. And the biggest living expense if the cost of your home (whether that’s renting or paying a mortgage).

Although the article goes into giving an argument for moving cities and finding a new job, I find that far too extreme. Instead, I would suggest that you live further from work or from the super popular places. 

The best example I can give is what I’m about to do. I work in the Bangsar area. Bangsar is known to be the expat area which means that not only is rent here super high, but so is the cost of food and groceries. Although many of my colleagues decide to live in this area, I decided to move 30 minutes away by LRT. The price of the place I got is 1800 for a 2 bedroom (whereas that won’t even get you a bachelor pad in Bangsar). To top it up, I am splitting the rent with a friend which drops to under RM1000 a month. This move will save me at least RM500 a month in rent, but equally as important, saves me money for groceries and food (I’m a lot closer to cheap delicious food now). I believe that the total savings would be close to RM1000 / month compared to what my colleagues would be paying.

Take away: think about living further away from work as a way to save some major money.

You Can Do It! Meal Planning for Beginners
Malaysia’s one of the only places that I’ve been where eatign out at a mamak can be as cheap as making your own meal. However, if you leave the mamak world (because you want to eat healthier or different), cooking will become cheaper than eating out for sure.

This blog gives you the basic steps in planning out your meals. I found it super helpful as I’m looking to be more conscious of what I eat so to have a list of meals I know will take care of my health and how I would go about making them regularly is super helpful.

From a Few International Bloggers

What your flippant beliefs cost you
If you’re thinking about automating your investment, this article does a great job in pushing you over the fence. Remit is actually writing about a study that was done that showed how much worse off you would be by somehow missing some of the biggest stock market rallies. 

For example, did you know that if you had somehow missed the 5 biggest stock market rallies over the past 20 years, your portfolio value would be 45% lower!?

Take away: Don’t try to time the market. Have your investments automated by purchasing a basic index fund.

When we are living much longer… better prepare MORE.
This article is focused on Malaysia, however the same problem is happening all over the world: the average age is increasing which means there are more old people than young. This is an issue because there will come a day when all these older people are retiring (so instead of providing income to the government, they take money), there are not enough young people to provide the money to allow the government to take care of the pensions.

Combine that with the fact that people are living longer, you get the problem of government not being able to keep up with their obligations. This is why our retirement age was moved from 65 to 67 and I won’t be surprised for it to hit the 70s.

This is one of the reasons why I don’t believe in relying on the government for retirement. By the time I get to that age, the age would be much higher, or the income they provide will be much lower. But more importantly, I don’t believe in waiting until I’m that age to be able to do what I want (more on that in the future).

Take away: create your financial plan under the assumption that you will not get any support from the government. If, by the time you’re at that stage in life and there is some sort of support, then it’ll be the cherry on top.

If You’ve Experienced Lifestyle Creep, Read this.
This is a great blog post about understanding that money is here to help us live the lives we want. The writer talks about starting off his journey with his girlfriend living in a mold-infested place for $350/month and how they slowly moved into nicer, bigger places. How they went from one beat up car to two cars, one of them a Tesla.

The point he’s trying to make is that it’s okay to want more, have more. So long as your income is also increasing (related: the best way to make more money), but more importantly, so long as you are consciously deciding on wanting to make the lifestyle upgrade and not simply caught in wanting it because everyone around you has it.

As the blogger puts it: 
“Whether you tend to spend a lot or prefer to live frugally, the important part is why?

Are you trying to impress someone with your choices? Instead, what about figuring out what you really want, and being true to that? It’s way harder than matching someone dollar for dollar on a fancy new phone (which looks pretty awesome) or pleasing your frugal inlaws, but there’s real magic in aligning your money choices with your truest desires.”

Practical Goal Setting for Finance and Personal Success
A very well written piece around what exactly it means to set goals for yourself. The main steps are:

  1. Live Life
    Good goals are rooted in the reality of your life and your experience and who you are as a person, and that’s different from everyone else on Earth.
  2. When You Notice Something You’re Not Happy With, Don’t Ignore It
    Once you’ve noticed something you’re unhappy with, the next step is to give it some serious thought
  3. Think Through the Problem
    Give yourself some time to think through the problem. 3 ways of doing it are:

    • Spare Thoughts
      Whenever you have a spare moment (stuck in traffic, lining up etc), think about the problem and ask why it is a problem.
    • Homework
      Study the problem in detail.
    • Freeform Journaling, or “Three Morning Pages”
      Spend an hour each day writing whatever comes to you. Not only will you feel much better getting it all onto paper, but you’ll be able to look at it objectively.

    Note: Recognize the Internal Value
    If a goal is not intrinsically tied to one of those things you truly care about on a deep level, it’s probably not going to succeed.

  4. Stating the Basic Goal
    A good goal starts by distinguishing where you’re at from where you want to be.
  5. Making the Goal SMART
    Make the goal specific, measurable, actionable, realistic, bound by time (ie: I will pay off $10,000 of my student debt in the next 12 months).
  6. From Goals to To-Dos and Reminders
    Create a list of things you need to do to make that goal happen and set a bunch of reminders to keep you on track.
  7. Even SMARTER – Evaluate and Readjust
    Your goal will never go perfectly according to plan, ever, and success comes from constantly evaluating and readjusting your goal.

Are you a shopaholic? How to fight a shopping addiction
How to fight the shopping addiction:

  • Cut up credit cards
  • Carry cash only
  • Track every penny you spend
  • Play mind games
  • Avoid temptations
  • Ask for help

What to do when you’re tempted to buy? Ask yourself the following:

  • When will I use this?
  • Do I have another one like this already?
  • If I buy this, where will I put it?
  • If I buy this, can I pay cash? Would I pay cash for this?
  • Can I buy a good quality used version for less?
  • Do I know anyone who already owns one I can borrow?
  • Can I wait to buy this?
  • Why do I want to buy this?
  • Are there better options available?
  • What would my partner say if I bought this?