Dear Friends & Fellow Investors,
We should first work to accumulate money when we are young. Then we must channel our monies into investments & let monies work for you later.
Because of high inflation Cash in the Bank cannot cover purchasing power in the future. Those who depend on fixed income on retirement are at a disadvantage. As the years creep up they slowly sink into poverty. If someone retires at age 55 with a pension of Rm800 a month in year 2,000 – by today he is only 72 years old & Rm800 today is only worth Rm400 to Rm500 in real purchasing power.
Why is it so?
Cement was Rm10 to Rm12 a 50 kg bag
Now cement is Rm18 to Rm20 a bag
Up from 33% to 100%
Workers wages was Rm60 a day. Now Rm100. Up 66%
Houses in KL, Penang & Johor have gone up in price by 100% to 200%.
So how to retire on fixed pension of Rm800 a month today compared to year 2000?
That’s why we must accumulate wealth by working for cash & then let CASH WORK FOR US LATER.
Cash in FD is a no no even if you have Savings. Bank FD at 3.5% has a P/E of 28.5 which is expensive as an investment.
3.5% cannot even cover GST of 6% now.
This is what a wise Investor said about Money:
- Money with 4% yield is dead money.
2. Money with 5% to 8% yield is safe money (For Malaysia it should be at least 6% & above to be safe)
3. Money with 9% to 12% yield is healthy money.
4. Money with above 12% yield is Wealthy money.
Is it possible to achieve 12% and above yield? Yes, it is possible if you invest carefully.
Note: People think the Stock market is a place to make 100%, 200% or more?
Calvin thinks that is not possible longer term as market goes through boom and bust cycles.
The best performance were people like Peter Lynch of Magellan Fund at 39% for 9 years and Warren Buffet at 20% to 25% for many decades.
So anything between 15% to 30% should be considered very good. Anything above 30% is a bonus. This is for longer term investment as opposed to rampant speculation in the KLSE. Great Sifu like Dr. Neah Soon Kean of Dynaquest think a 10% performance should be ok for times like these.
Coming up Next:
BJ CORP & MUI BHD – The Twin Pillars of Great Latent Value Stocks of KLSE
A Deeper Look into the Colossal Assets of Bj Corp & Mui Bhd
Writing in process….