planning.my

To the dads who work hard, love quietly, and plan boldly...

Happy Father’s Day!

I see you juggling the roles of provider, protector, and planner.

You don’t always get the recognition you deserve...

But today, I just want to say:

You’re doing an amazing job!! 💪🏻💪🏻💪🏻

Enjoy this day. You’ve earned it. 🎉😎

𝗜𝘀 𝘁𝗵𝗲 𝗘𝗣𝗙 𝗥𝗲𝗮𝗹𝗹𝘆 𝗦𝗮𝗳𝗲?

This is a question I hear often, and the answer is 𝗬𝗘𝗦 — especially if you’re in the Conventional (Non-Shariah) EPF Scheme.

Under Section 27 of the EPF Act 1991, your savings are guaranteed to earn a minimum dividend rate of 𝟮.𝟱% per year, no matter what happens in the market. This makes Conventional EPF a secure choice for your retirement.

But there’s more. Historically, EPF has consistently outperformed other risk-free savings options, such as Fixed Deposits (FDs), offering higher returns while maintaining the same level of safety.

For those in Simpanan Shariah, the returns are tied to the performance of shariah-compliant investments, with no guaranteed minimum dividend. While there’s no safety net like the 2.5% in Conventional EPF, it aligns with Islamic principles and offers the potential for competitive returns.

EPF remains 𝗮 𝗿𝗶𝘀𝗸-𝗳𝗿𝗲𝗲 𝘀𝗮𝘃𝗶𝗻𝗴𝘀 vehicle that has delivered solid results for Malaysians over the years.

You shouldn't take profit from your investment and settle for less!

All of us save money for various reasons. However, not everyone invests their money long enough—or lives long enough—to witness the magic of compounding.

If you had invested in a stock/fund, made a profit, and then sold it, did you reinvest the profit to generate future profits? By spending the profit, you deny yourself from the opportunity to benefit from compounding returns.

You must allow your investments the TIME they need to grow exponentially.

A common mistake among investors is to take profits, spend them, and then feel satisfied with the return.

Let's examine the consequences of this behavior.

If you are an investor who can consistently earn a 10% profit each year:

Year Invested Amount Profit Spent
1 $10,000 $1,000
2 $10,000 $1,000
... ... ...

30 $10,000 $1,000

After 30 years, you would still have your initial $10,000, and each year you would enjoy spending the $1,000 profit. Sounds good?

Now, let's consider an alternative approach...

Year Invested Amount Reinvested Profit
1 $10,000 $1,000
2 $11,000 $1,100
3 $12,100 $1,210
4 $13,310 $1,331
5 $14,641 $1,461.10
6 $16,105.10 $1,610.51
... ... ...
30 $158,630.90 $15,863.09

After 30 years, your account would have $174,494. You've built up substantial savings from your initial $10,000 without adding any additional funds.

Do you see why the first behavior can be damaging to your financial growth?

When you start saving early, you give your money the TIME it needs to grow exponentially before you need it.

That's why it's crucial to start saving for retirement as soon as possible. Besides the rate of return, TIME is the most critical factor in determining the size of your retirement nest egg.