BY the time you read this, my wife Rachel and I would have attended the 100th birthday bash of my oldest client, whom I affectionately call Aunty Ivy.
She's Malaysian but has lived for several years in Melbourne, Australia, with her daughter Hannah and son-in-law K.C. I look forward to telling you about Ivy's centenary bash in a future Money Thoughts column. For now, though, I'll just say it was — and is — a profound honour for me to help Aunty Ivy and her family manage her retirement funds.
Our world is greying at an alarming rate. As a species, the 8.04 billion of us alive today are, in general:
1. Living longer; and
2. Birthing fewer babies.
The net effect of both stubborn demographic trends gaining momentum at the same time is the greying of humanity. With every passing month, the median age of people, both in Malaysia and across the globe, goes up.
According to one report (https://dailypost.ng/2023/05/10/countries-with-highest-number-of-old-peo...), Malaysia has the fourth highest absolute number of centenarians in the world, supposedly 43,600.
However, the three countries ahead of us — the United States (98,000), Japan (90,500) and China (54,000) — all have much, much larger populations (America's population is 10 times Malaysia's; Japan is four times and China is 42 times).
Note: The fifth-place country in that report — with data attributed to an organisation called The World of Statistics (https://www.worldofstatistics.org) — is India, Earth's most populous country with just a slightly larger population than China, yet with only half as many centenarians: 27,000.
Fascinatingly, in a related Wikipedia article (https://en.m.wikipedia.org/wiki/Centenarian) there is an embedded statistical table that shows Malaysia boasting the highest per capita incidence of centenarians worldwide. What does all this mean?
SELF-RELIANCE
First, kudos to the Malaysian healthcare system — both public and private — for keeping so many of us alive for so long despite our gastronomic love affairs with durian, ais kacang, nasi lemak and roti canai.
Second, everyone around the world, Malaysians in particular, should adjust our retirement expectations because of the lengthening lifespan. The best way to do so would be to ratchet up our official national retirement age from 60 to 65, hopefully in stages between now and 2033.
Thankfully, some policymakers are beginning to heed the proliferation of geriatrics looming ahead of us (Incidentally, I applaud the recent move by Malaysian commercial banks to raise their sector-specific retirement age to 61; it isn't enough, but it's a solid step in the right direction).
Long-time Money Thoughts readers know that I believe the helping hands we all need in these trying economic times can be found at the end of our own shirtsleeves. So, if we embrace self-reliance, what should we do to increase our chances of thriving throughout the (likely) many decades still ahead of us?
Here are four dovetailing pieces of advice I give my clients and conference attendees:
1. Stack the odds of living longer in our favour by eating better, exercising more, and scheduling regular medical check-ups;
2. Increase cash buffer reserves by channelling mounting piles of savings into robust and secure fixed deposit accounts and high-quality money market funds;
3. Arrange personal affairs and circumstances to permit working as long past the official retirement age, if possible, to earn extra money to build-up surplus funds to save and invest to build a nest egg for the future and, more importantly, to create steady streams of passive income that gush into our bank accounts — come rain or shine; and
4. Study lifelong investing (and then invest) because there are better than even odds we'll have sufficient time to sow seeds of capital and reap a hybrid harvest of opulent capital gains and steady passive income streams.
A useful tool in managing our life is a long-term diary or any electronic calendar in your smartphone. You could block out chunks of time for planning and thinking about crafting a better, balanced life.
Similarly, creating and tweaking a personal budget that ties-in with your life's priorities will help you spend less money than you earn, save and invest the difference, and do so for a long time.
DREAM LIFE
Amid all the planning, create the life you crave for by ferociously focusing on making career changes that move you closer to, not further away from, your dream of an ideal life.
FACTS:
1. We all crave not to just scrape by at the end of our lives but to finish our mortal race in style.
2. The true metric of success in this corporeal arena is how many people love us unconditionally, not how much wealth we've amassed.
3. Nonetheless, it's better to have sufficient money all our lives than not.
American founding father Benjamin Franklin, through his 1758 classic The Way to Wealth, bequeathed us with profitable principles of diligence, self-reliance, and frugality:
"Sloth makes all things difficult, but industry makes all things easy.
"Keep thy shop, and thy shop will keep thee.
"If you would be wealthy, think of saving as well as of getting. The Indies have not made Spain rich, because her outgoes are greater than her incomes."
© 2023 Rajen Devadason
Rajen Devadason, CFP, is a securities commission-licensed Financial Planner, professional speaker and author. Read his free articles at www.FreeCoolArticles.com; he may be connected with on LinkedIn at www.linkedin.com/in/rajendevadason, or via rajen@RajenDevadason.com. You may also follow him on Twitter @Rajen Devadason and on YouTube (Rajen Devadason).
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