"70% of retirees use up all their EPF money within three years after retiring."
Why… Poor financial management? Probably it happens to only a few people.
"Only 5% of Malaysians are prepared for retirement."
Ok, so it does not happen to only a few people. Maybe it’s because their EPF is too little?
"Inflation rate is 6% in urban areas."
"RM500,000 in your EPF at retirement may have the purchasing power of RM145,053 in 20 years."
"3 meals a day at RM20 now may cost RM64 in 20 years."
"A family with 2 kids and 2 cars needs RM747,000 if the retired wage-earner were to live for 25 years after retirement. But in average, he only has RM106,000 in his EPF when he retires."
So, inflation is the culprit. Remember how people always say money is never enough? It’s true! Half a million may not be enough to see you through your old age.
On the day of your retirement, you go and cash in your EPF. The first question you’ll ask yourself is, which will happen first – death, or bankruptcy?
Let’s say after you cash in your EPF, you go for a medical checkup.
Doctor: I’m sorry, Mr. Lim. You have less than 20 years left to live.
Mr. Lim: You mean I won’t live past 20 years, starting from today?
Doctor: Umm… Yes, I’m afraid so.
Mr. Lim: You mean… I’ll die before my EPF runs out?
Doctor: I… Umm… I guess…
Mr. Lim: YES!!! I mean… oh no… ummm… *confused*
And as if it can’t get any worse…
"Medical inflation is 15% each year."
-all quotes taken from The Star, May 27.
So what do we do?
We can earn as much money as we can, while we can! No… That doesn’t sound right, does it? That will be going down the path of materialism.
The other alternative is, we can invest! Yes… Even Jesus said in a parable that it is better to invest than to do nothing with the money.
But invest where?
On one end of the spectrum, people who don’t want to worry about money invest in fixed deposits. It’s the safest thing to do. It keeps your attention off money, gives you peace of mind, and it gives you a guaranteed profit upon maturity.
However, the interest rate for fixed deposits is 3.80% per annum. It’s below the inflation rate of 6%. Your money will just shrink with time. At your old age, you’ll still be wondering if death or bankruptcy will happen first.
On the other end of the spectrum, people who are risk-takers invest in the stock market. Big profits in a brief period of time.
However, the thing about stocks is, it can go up today. And it can also go down tomorrow. So you’ll have to monitor your stock investments all the time. Your attention will be captivated by the stock market. You can’t pass a day without worrying about it. Hence, you lose the fight against the lust of materialism.
In the middle of the spectrum, people who are moderate investors go for trust funds. But consider the irony…
If you invest in normal trust funds, you can be sure that your investment will be go into tobacco, alcohol or gambling. That doesn’t sound quite right, does it?
If you invest in Islamic Trust Funds, you can be sure that your investment won’t go into tobacco, alcohol or gambling. But the thing is, you’re investing in an Islamic thingy. That doesn’t sound quite right either, does it?
Is this one of the cases where there is no such thing as doing the right thing?
A friend said that it can be seen in this way: You invest in normal, non-Islamic trust funds. Your money goes to tobacco, alcohol or gambling. Those “sinful” companies will reap big profits. Therefore, they will pay big amounts of “sin tax” to the government. And the government can use the money to build infrastructures, develop rural areas, improve economy, etc. Hence, it gives rise to a better Malaysia and a better life.
So, it’s a case of “turning evil into a better good”, huh?
But when you walk by a liquor store, when you see families being broken because fathers are drunkards, when you see under-aged youth buying cigarettes when they could’ve had healthier addictions, when you see aunties and uncles wasting their EPF money at casinos, lottery tickets and “da ma cai”… How much do you really wanna be part of the cause?
I wonder and wonder…
I think and I ponder…
I think about my mansion in heaven. Where I don’t have to worry about house loans, car loans, investments and inflation. Where the rich don’t live in debt. Where the rich in God are truly rich.
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10 comments:
If a suicidal person was looking for just that extra bit to push him/her over the edge, reading this will guarantee it.
*sigh*
But thank God we have God. Jehovah Jireh. He will provide.
Economically speaking, when inflation goes up, so does interest rates. Technically if you at least put your money in interest bearing accounts after withdrawing your EPF, you're not that much at loss.
Great story though!
I was just discussing about this with Anna the other day. This article really got to us. Especially the part where they said that 20 year olds don't plan for their retirement because they think it's still too early. That describes us to the T!! Die! Haha..
My dad feels the article is for people who still want to keep a high level lifestyle after they retire. At the same time, it pushes younger people to chase after money now, when we should be chasing after life.
Investing in Islamic banking doesnt sound rite? Think about how jacob got his wealth? Perhaps this is what went through his mind, hmmm.... u cheat me off my wife and want me to work more, I cheat all ur goats and sheep. Smart investment in a wrong sense? Oh well, Jacob lives up to his name. When his name changed to Israel, he still had his wealth.
Think about it, if we were to separate everything and be clear cut in even investing in Islamic banking, then we should do the same in all sense. Are we spiritualising investment as well? I think we should. SPeaking of which, what isnt spiritual in our daily life? Everythin is.
When got blessed Job even more the 2nd time, I don't think it was overnight. How could he gain his wealth overnight? How could he even gain the number of family members back overnight?
I think God gave Job much experience in perhaps investment and Job was wise in his business. Job's realtives all gave him an ear ring and some money. I dont think those we're more than his previous wealth to make him double wealthy. He invested his initial capital. Only difference, whatever he choose to invest, God chooses to make his path smooth and double his blessings.
And I don't think he could finish spending his retirement fund before his last breath. Be wise in your earthly investment, but be wiser in your heavenly investment. So we are reminded that this place is not our home. And we're just passing through.
-KC
yo josh =)
i don't think there's anything wrong with investing in islamic trust funds (tho i may b wrong).
and your depiction of stock market investor sounds more like a short-term speculator. those are the guys who buy stocks like gambling. proper investing's supposed to be long-term one.
i'm thinking, wait for the next economic crisis when stock prices are rock-bottom, then choose the ones that will surely recover and buy those. not sure if it will work tho. and hv to wait years for the economic cycle to run it's course.
Actually, if I'm not wrong, all the operations of Islamic banking is exactly the same as conventional banking. Except that they don't invest in non-halal things, like gambling, alcohol, tobacco, etc.
I talked to a CIMB advisor recently. He said, in Islamic investments, basically you're pooling your money together with rich, Arabic investors who put their money into halal products. The halal market is so strong, that people see it worthwhile to invest in it. That's just it.
So, if my logic serves me right... If it's wrong to pool our money together and gain mutual profits with Muslims... Should we then visit the mamak stall? All of the them are run by Indian Muslims. All the profit goes to Muslims.
Also, should we then buy halal products? Like Adabi chilli powder? Sos Maggi? All its profits goes mainly to Muslim owners.
Siehjin is rite, its those ppl who normally look for quick gains thus reflecting on their greed. Then the sky is the limit in what they want.
Investment is like the parable of talents. If you could get more in returns for what you put in, why not?! Even the advice given was You fool, you could have put it in the bank and gain the interest. So don't stuff ur money under your pillow!
Its sometimes the struggle between the right attitude and the sinful self that is tough. Thats where we constantly need to realign out thoughts right before God and keep focus on the real trophie in the race of life.
So looks like investing in Islamic Funds are safer and "cleaner" in a way if you overlook the spiritual word of Islam. Lets not be too like the pharisees and say I don't wanna relate to anything that is not from Christianity. If so, perhaps you could buy ur own island and stay there.
Toshua, whats in the name? hehehe....
-Kenny
ya, islamic banking is exactly the same as conventional, just that they change the terms into cool-sounding arabic words and get around the interest problem. for example, under syariah law one can't charge interest for loans; so if u take a housing loan in the islamic scheme (if my understanding is correct) the bank buys the house and then sells it to you at a higher price which you pay off in instalments. the only difference is, they don't call what you pay 'interest' =)
josh, i don't think u're right about the 'cannot give islam profit' thing. that would mean we can't buy anything from any non-christian either, cos that would be profiting buddhism/taoism/bahaiism/atheism/ whatever faith the shopowner believes in. and the final outcome of such a worldview is the setting up of monastic communities, which are cut off from the rest of the world, where you only do business with fellow christians. in view of the injunction to be "in the world but not of the world", this does not seem to be a good model for the christian community to function as salt and light.
Yaloh. Takkan we cannot go to mamak stall, rite? Cannot be what.
In fact, Islamic investments are actually more "right" than conventional investments in its operations.
Don't you think it's weird... That the Islamic world is big enough to come up with Islamic banking and Islamic investments because of its legalistic rules? Does that mean the Christian world is not big enough to make an exclusive stand that affects banking and investments?
The Jewish law also prohibits taking interest from a fellow Jew, doesn't it? They cannot eat non-halal food too. But how come there's no Jewish bank?
Well... Maybe it's because people don't even want them to have their own land. What more a bank :)
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