by Siew Cheng Hoe

Created on: June 27, 2009

While you are still working, you should make as much money as you can. Even if you can save up to fifty per cent of your monthly salary, you should try to make more money.

You do not know what will happen tomorrow. You do not what will happen in the future. You do not know how long you will live after your retirement. The only certainty is that you will have to spend money, regardless of your health condition, your age, your employment status, your marital status, your educational background and your family financial situation.

You need to spend money when you are working. You need to spend money when you are unemployed. So aim to make more money, so that you do not have to worry about retrenchment.

You should make more money while you still hold a full time employment. You should make more money while you still healthy, and able to make a living.

There will come a time when you need to spend money, and you do not have any income.

You have only forty to fifty years to make money. After that, you will retire. You do not know how long your lifespan is. There is a frightening possibility that you live for another forty years after your retirement.

During the forty to fifty years of making money, you have to spend money to buy a house, a car, and on your children (if you have children). Even if you do not have children, you have to support your aging parents, and take care of their medical bills. You cannot rely on the social security to take care of all the expenses incurred by your parents.

On top of that, you have to spend money on yourself, on food, on gas, on holiday, on education and training and other necessities of life.

Do you honestly think you have enough money to support you for another forty years after your retirement?

You may think that regular contribution to the investment fund, and shrewd investments will help you build a comfortable retirement nest. The current recession shows that your money will never follow the projected growth rate as shown in the chart. The colorful brochures may show a growth of ten per cent per year for the investment products, and the expected value of your portfolio by the time you are ready for retirement.

However, reality does not follow the forecast of the colorful investment brochures. In a recession, your portfolio may fall as much as seventy per cent. After the recession, your portfolio will take a few years to reach the former peak.

Investment is good. Wise investment of your hard-earned money is the only way to grow your money. As long as you do not trust the projected figures with your whole heart and whole soul, you will not be disappointed.

While you are still working, aim to make more money, and save more money. When your investment fails to match the projected value, you still have enough money to live on.

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