Any marathon runner will tell you: Don’t think of all 42 kilometers at once - that would be very unusual. Instead, describe the race in shorter phases: 5km, 10km, or even one kilometer at a time.
This same philosophy can be applied when saving for your retirement life, especially when it is still decades away. While the idea of saving large sums of money to retire comfortably may seem impossible, investing just RM150 a month for your 20s or 30s seems more plausible-and that can still get you to the savings goal you want at retirement age, with condition you are disciplined, start early, and press your “split,” as runners say.
For the sake of simplicity, let’s set aside inflation, fees, taxes and dividends. Yes, those things matter, but what’s more important is that you’re just getting started, saving on a regular basis, and experiencing the power of revenue aggregation.
Here’s what this example looks like, assuming a market return of 7% per annum. **:
** Returns are estimated for the sake of simplicity as past performance does not reflect future performance.
Due to the strength of the merger, if you invest RM1,000 annually for 30 years, assuming an average return of 7% per annum, the investment could increase to RM94,461. That is a total return of RM64,461. **
All right, take a deep breath. We’ll guide you through these targets and explain why they’re easier to reach than you think - and why, if you’ve reached 30 and haven’t saved too much, it’s not too late.
The first thing you might notice about this chart is that the growth of your money increases rapidly over time. This is due to the pumping strength of the return. You may have heard of mergers before and understanding this concept can be invaluable to your finances. It is often described as profit on profit, which means that if your money increases 7% in a year, and you don’t withdraw the money, the next 7% you earn will be a larger Ringgit increase as it increases from a larger base than the year. first. This goes on and on, giving your money the potential to grow at an exponential rate, which explains the growth of our chart above.
The human brain is not good at estimating exponential growth, so a practical method you can use is rule 72. This is a rough calculation of how many years it takes to double your money; divide 72 by the rate of return. That is 72/7 = about 10 years for double.
With a disciplined and periodic savings / investment strategy, it is very possible to start a humble retirement account in your 20s and 30s and still be a target to retire with a good nest egg. You just have to hit your split.
It is important to remember that even 7% p.a. is a reasonable estimate for the return on investment in the long run, that is not a guarantee. All investments carry risks, and it is impossible to know the actual return you will make on your investments in the future.
Other things to keep in mind about your contributions: As you get older, you’ll probably increase your income, so it’s unrealistic to increase your monthly RM150 into something bigger, add more fuel to your marathon and potentially increase your final retirement fund .
You can think of saving for retirement as you would if training for a marathon. Instead of just waking up one day and striving to run 42km, you need to train, and start striving to take care of your financial health. With our Round-Ups and automated investment features, you can achieve your difference as you go about your daily life.
There is no denying the power of saving, time and common merging. The marathon journey begins with the first step. The journey to RM1 million starts with your first RM100 investment.
Info About Wahed
Wahed Invest is an online halal investment platform, the world's first digital Shariah -compliant investment management service provider where their objective is to provide or make halal investments.
Wahed Invest should be your investment option because it is a SHARIAH COMPLIANT investment. It has obtained a Halal Certificate where Wahed's investment is in accordance with Islamic principles without involving any illegal sectors such as alcohol, firearms, gambling, riba and the like.
Not only that, but it is the world's first Islamic Finance technology company (Fintech). This digital technology investment has been approved by 3 recognized Shariah Advisers, namely Dr Aznan Hasan, Mufti Faraz Adam Hanif and Shaikh Muhammad Ahmad Sultan.
Wahed Invest is also an investment in the Wahed platform starting as low as RM100 with no lock -in period. Wahed’s current investment portfolio options include US and Malaysian stocks, sukuk and gold.
Wahed Investment is registered with the Securities Commission Malaysia (SC). The SC's job is to control anything related to securities to protect investors.
How to Invest Wahed Investment
Download the Wahed Invest app at https://wahedinvest.com/get-started and get a starting bonus of RM10 by using code ‘MOHISM487’ during registration.
In fact, don't forget to enter the reference code "MOHISM487" to get RM 10 from Wahed Invest when you enter the capital.
All investments involve risk, including the possibility of losing the money you have invested and past performance does not guarantee future performance. Return histories, expected returns and probability projections are provided for informational and illustrative purposes only and do not reflect actual future performance. We are not responsible for any liability for your trading and investment results.
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