??? retirement and education advice ...
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Thread: ??? retirement and education advice ...

  1. #1
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    ??? retirement and education advice ...

    I found this piece of financial advice interesting or to be more precise, misleading...

    http://www.thestar.com.my/business/b...and-education/

    " A client found himself at a pivotal point in his life where he would soon be making a decision on his children’s tertiary education. At 45 years of age, Mr Wong is married with two children aged 16 and 14 respectively. He is the sole breadwinner in the family, bringing home a tidy annual income of RM250,000. His net assets have recently increased to RM5.8mil, of which RM3.3mil are in fixed deposits. He plans to retire at 60 years of age with retirement living expenses of RM120,000 annually until the age of 85 years old. Like many parents contemplating their child’s future, Mr Wong posed me with the million dollar question: Can he afford to send both his children overseas for their tertiary education at a cost of RM1mil each? "

    The answer provided by the expert is NO !! Mr. Wong cannot retire at age 60 if he wants to have living expenses of RM120k annually from his retirement money after sending two children to overseas for RM1million each !!

  2. #2
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    I tried different calculations with different

    - inflation rate (based on 10 years historical)
    - FD interest rate

    I am positive Mr. Wong can retire at 60 years old with RM120k annually contributed form his retirement fund.

    This has nothing to do with future weakening of MYR because he set aside RM1million each for his children. If MYR weaken and the 1st choice of place requires more than RM1milion, he will send them to other places where RM1million is enough. At present moment, RM0.7million is enough for a UK degree, RM0.5million is sufficient for an Australia degree.

  3. #3
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    This article is one where capitalist reign supreme ("more is always better") without other considerations.
    Assuming we are not very good in mathematics, we look at this problem from a holistic view.
    a) Since Mr Wong already have RM 5.8 mio, and his 2 kids need 1 mio each and each of them are almost at the uni age, lets just say he ring fence the entire RM 2 mio out now. So, he now has RM 3.8 mio
    b) if Mr Wong after around 20 to 30 years of working can accumulate clean RM 5.8 mio networth, and he is keen to work until 60, it is only fair to say that he can accumulate another RM 5 mio worth of money in today's value without issue.
    (ie, if one can accumulate 5.8 mio from 25 years of working, working another 25 should be easier to accumulate same worth of assets right?)
    c) so at 60 years old, Mr Wong will have RM 8.8 mio (RM 3.8 + RM 5 from further working) worth of asset that is of value RM 8.8 mio today. This 8.8 is worth today's value/purchasing power, not Year 2042 value.
    d) if Mr Wong can live till 90, he can spend RM 293,333.33 per year. or close to RM 25K per month of today's purchasing power.
    If he can live till 100, he can spend RM 18K per month of today's purchasing power.

    So yes, agree with opulant wholeheartedly. Real question is whether Mr Wong wants to consider early retirement to do something else. The only resource no one can replace properly is Time, and 1 year of time when one is at age 50 is worth a lot more than when one is at 85.

  4. #4
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    I work in the finance industry, and I am very disappointed at so called specialists giving rubbish advice. At best they are just following blindly textbook method. Worse, their advice is to generate fear for more biz.

    Mr Wong should seek proper advice from better specialists and maybe he should consider other issues like insurance to protect his assets/risk to his cashflow like health care, or seek a lifestyle guru to give him advice on how to enrich his life further with positive experience.

  5. #5
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    Quote Originally Posted by IanQ View Post
    ... called specialists giving rubbish advice.... their advice is to generate fear for more biz...
    If you read that article, the "expert" has a website link.
    TheStar did not tag the page as advertisement and yet it allowed for that business link... that is misleading because it did not warn readers.

  6. #6
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    Its in the STAR.

  7. #7
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    This chap most probably owns the firm, and after casually checking the site, no wonder Mr Wong don't have enough to retire. The specialist is trying to bring everyone to a high level of having RM 20 mio as per the firm's aim of offering certain core products. Family Office Service!

    The article is definitely a not-so subtle bait for readers to go to his site. I fell for it now. haha

  8. #8
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    I always amaze how people can make tons of money by "advising " others how to make money.. !! Of course, obviously, I studied the wrong thing and was in the wrong profession...

    I think it is just a thin line between this kind of "expert" and the kind of JJPTR " investment whiz "...

  9. #9
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    ask the so call expert "do you have 1mil hard cash? if not do not advise others. As i have officially retired few years ago i only have a few thousand of hard cash but i have a few condos and houses to collect rent also enough for me to send another kid to Oz land which cost me RM600K for 3 years.I think i am living below poverty line.Correct Opulant?

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    Quote Originally Posted by jan tomaswaki View Post
    ... i have a few condos and houses to collect rent also enough for me to send another kid to Oz land which cost me RM600K for 3 years.I think i am living below poverty line.Correct Opulant?
    Hehehe... got condo and houses to collect rental still live below poverty line...

    Like that I live way below hardcore powerty line... i got no rental to collect, only survive on BR1M...

  11. #11
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    Quote Originally Posted by jan tomaswaki View Post
    ask the so call expert "do you have 1mil hard cash? if not do not advise others ?
    For this particular "expert" that I mentioned in post#1, I think he got many hard cash...

    That's why I am puzzled how people can make millions by "advising " others how to make money...

  12. #12
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    Quote Originally Posted by opulant View Post
    Hehehe... got condo and housed to collect rental still live below poverty line...

    Like that I live way below hardcore powerty line... i got no rental to collect, only survive on BR1M...
    Hahaha...survive on br1m

  13. #13
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    Quote Originally Posted by Naka View Post
    Hahaha...survive on br1m
    Actually by the time you retire or expire , you do not need much things rather than food or travel.Petrol cost me RM250, breakfast only roti and instant coffee,lunch a bit heavier and dinner just some salad or fruits. One month the most RM700. Oh I think I need to apply BRIM and social welfare.

  14. #14
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    Quote Originally Posted by jan tomaswaki View Post
    Actually by the time you retire or expire , you do not need much things rather than food or travel.Petrol cost me RM250, breakfast only roti and instant coffee,lunch a bit heavier and dinner just some salad or fruits. One month the most RM700. Oh I think I need to apply BRIM and social welfare.
    If you pay Tax, all the records are there in black n white.

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