GEORGE (not his real name), a 56 year-old senior manager, recently met me to discuss his retirement plans.
At the point of our discussion, he only had RM150 000 in his Employees Provident Fund (EPF) account for his retirement as most of his EPF funds have been withdrawn for his two daughters’ education.
Unfortunately, he still has a younger son who needs education funding while his employment will end at the age of 60. The question is: What is the reason for him to be in this current situation?
The root of his problem is that he never set any proper goals, hence ended up spending too much money to satisfy his family’s immediate gratification such as holidays.
Instead of “waking up” too late at age 56, we should start planning our finances as early as possible.
Your first step is very simple – just take a step back and look at your situation. Think about what your “life goals” are and differentiate between “wants and needs” in your daily life.
Developing foresight
Most of us rarely pause to think about what we really want in our life. We build and think about our goals based on what we see in other people’s lives or are influenced by other people’s needs.
However, is that what you really want in your life? If you decide your goals based on other people’s desires or situations, you will eventually lose the motivation to follow through as those goals are not truly your own.
Let me tell you a story. A client called me to ask if he should buy a new condominium in Cheras. I enquired what is his long-term plan and where he sees himself in five to 10 years.
He said he has plans to retire in his hometown. I then asked him what is the point of buying a property in Cheras if does not even plan to retire in Kuala Lumpur?
Guess what he said – his sister is buying one and his real estate agent (who happens to be his cousin) also said it is good to invest.
What he did not realise is that his actions will end up affecting his other goals such as getting his retirement house in hometown or even his children’s education fund.
When we think about our “life goals”, we have to consider two aspects. The first aspect is our “life responsibilities”.
As part of our Asian culture, it is our filial piety to take care of our aging parents, our growing children and our life partners. So, some of the “life goals” that we want to achieve will definitely be intertwined with our loved ones.
The second aspect is responsibility to ourselves. We want to be able to achieve what we want in life and have no regrets when we look back on it one day.
I came across a very successful software company founder who stepped down recently to pursue his dream of becoming an oil painting artist. He spent his first 15 working years building a successful software company that now gives him sufficient finances to fulfil his life responsibilities to his family.
Once this was achieved, he could then proceed with his own dream of being an artist.
In summary, understanding ourselves is our very first step to our financial success. We must make time or find a quiet place to properly plan for our own “life goals”.
Make a list of life goals that are extremely important to you and prioritise them. When these “life goals” are meaningful and important to you, your actions and subconscious mind will help you to achieve them.
Shing Yee Ling, CFP, IFP, is a licensed financial planner with VKA Wealth Planners Sdn Bhd and a Certified Member of the Financial Planning Association of Malaysia (FPAM).
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
