Is investment all about profit? 

Hi, my name is Ka Hoe and I’m the founder of J Advisory and today, I want to share with you a sharing which I did to one of the people that actually came highly recommended to me by one of my clients right because he was actually looking for a way how to grow his EPF Account 1 and in the conversation, I just want to thank him because for reminding me on this particular topic, which I always wanted to share but you know, it just gets lost after a while. So, what is it in our conversation that triggered this particular topic? So let me share with you what happened. He came to me and he wanted to actually invest his EPF Account 1 and it started with two questions. Number one is that should I even invest my EPF Account 1 because EPF is actually doing very stable. And I think I did a video on this earlier and the second question was he was asking since that EPF is doing very stable. 

To withdraw or not to withdraw? 

So here’s what I told him naturally because he is somebody who’s a bit more conservative because it has a family and you want to make sure that he is able to retire comfortably and the sharing or what I share with him was that ultimately, the first thing first is really about whether you should actually take out the money for EPF comes back to the question of are you able to retire by leaving the money in EPF? Because a lot of people can the problem is a lot of people do not know whether they can or cannot because number one they didn’t do up their financial situation. Number two is that they never projected the goal of being retired. When do they want to retire? How much do they want to get when they retire? So without having all these then basically, you can’t be able to answer this question. Assuming you have done all this and you’ve got all the answer and what you saw let’s say, for example, your retirement goal is 3 million and right now based on what you’re investing in EPF, can only get you to 2 million and that’s a 1 million gap so I told him that eventually, you’ll be able to see that, you need to mobilize or move your assets to working to close that 1 million gap. And of course, this is after taking into account, whatever money that you put aside and growing at a certain percentage. And of course, let’s say you would grow at five-six percent and you cannot naturally you have to grow it as something higher maybe seven-eight percent. So that is to answer the first question. 

Close that gap

That means if you have a gap in your retirement and currently based on the EPF it cannot reach your goal. Then you must find ways to work your current assets harder, right? So the second question is he keeps asking is that you know, can it give me consistent return like EPF where you get like five-six five-six five-six So I told him naturally it’s also not about getting the five-six, but eventually when you actually withdraw from EPF into this type of unit trusts schemes and you know, unit trust and shares are a bit more volatile, right because they are investing into equities. So when you have the volatility, you will not get the 5656 because he could be like 5 one year plus 2 one year that you could be a negative 10 one year then you will be having like a plus 20 so the end goal of you when you’re trying to hit 8 percent return is from all these plus and minuses when you average out and you divide over that 4 years. Can it give you an 8, 8, 8, 8 that will be something that you should be focusing on right and I shared with him this golden nugget which I feel that everybody of you should know as well? 

The golden nugget 

Sometimes it’s not really about when your investments are making a profit and that you can be happy and shaking your leg. It’s about when your investments are not profitable what type of strategies, do you know what can you do at the point when it’s down. To basically ramp it up again. Do you have a strategy and actually shared with him 2 fundamentals things that he need to look at and what he can do during those times. So if you’re curious leave me a comment, I’ll share with you what I was sharing with him If you have any other questions relating to investments and personal finance and will do leave them in the comment section. I’m going to share it with you in the next video. Take care guys.