Financial Planning only for the rich?

I was fortunate to join the financial industry when I graduated. I learn a lot about financial planning and management knowledge and practice some of it. I want to share with you today one rule that I have practised since then, which is to pay yourself first. When you receive an income, pay yourself first. What does this mean? It means paying yourself first as a saving for the future or a sum of money you set aside for a purpose, such as savings, buying a toy, buying something, a holiday, etc. We do have to remember one of the reasons we work is to enjoy life. You will develop such a habit and high discipline as time goes by. Today, I meet a person who save a small of money for years so that he can buy a Microsoft Surface Pro 7 for his wife. It struck me when he hand me a stack of hard cold cash. I told him that I received his payment with a heavy heart. I can feel the sincerity and the high self-discipline over the years that he save enough money to buy this item. I wish him the best

i-Sinar i-Lestar & i-Citra you are very lucky

There have been 3 initiatives to withdrawal savings from your retirement account since the year 2020. I just want to quote the below statement from Free Malaysia.

"He cited a recent statement by EPF chief executive Amir Hamzah Azizan that 6.3 million contributors or 42% of the total 15 million members now have less than RM10,000 in Account 1 while 9.3 million people have less than RM10,000 in Account 2."

Now is mathematic time:

42% = 6.3 million contributors

100% = 15 millions contributors

EPF fund size is RM 1 trillion now. Refer to The Edge

Let's continue the maths and my personal assumption:

I assume and round up the numbers of 15 million members has RM10,000 in Account 1, which follow the 70% and 30% split rato. 

Therefore, total EPF account value for the 15 million members is:

= Account 1 + Account 2 

= [15,000,000 x RM10,000] + [15,000,000xRM4,285.71]

= RM 214 billions

Let's continue to the second group 9.3 million people have less than RM10,000 in Account 2

Therefore, total EPF account value for the 9.3 million members is:

= Account 1 + Account 2 

= [9,300,000 x RM23,333] + [9,300,000 x RM10,000]

= RM 310 billions

If we add both groups together, the total EPF account value is RM 524 billion from the 15.6 million contributors. 

I can not brain this mathematics question "What and where is the contribution from TOP20 employees?"

It does not end here, when the government allow to withdrawal RM5,000 via i-Citra, mathematically speaking, 15.6 million x RM 5,000 = RM 78 billion is "injected" into the economy. It might not so much compare to the total injection from the government spending, but RM 78 billion!!!!! Where is all the money?

Finally, if you still have a balance in your EPF account and eligible for this i-Citra, consider yourself as the really fortunate and blessed group. All your hard work and savings in the past brought you to where you are today. Whether you decide to withdraw or not, it is your decision to make use of the money to put food on the table today. Retirement is a distant problem compare to the current economic lockdown situation. I wish all of us will survive this pandemic.

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