Grow Your Wealth with Retirement Savings

Retirement Savings

Grow Your Wealth with Retirement Savings to Ensure a Financially-Stable Future

Growing your retirement savings can seem like an overwhelming task, especially considering the various investment options out there. However, with proper planning and a focus on your goals, you can achieve the financially-stable future you need.

EPF to grow your retirement wealth

If you’re a working professional, a portion of your income is automatically deducted into the our local retirement savings – the Employees Provident Fund (EPF), of which there is Akaun 1 and Akaun 2.

Akaun 1 is off limits until you reach retirement age, which is great because this means you are guaranteed savings when you reach the age of 55. Akaun 2 however, allows you to make withdrawals and this is usually towards purposes that will help you have a more stable retired life such as for education, health, or the purchase of your home. You may read more about the rights with each account in this article.

The great thing with EPF is that you are guaranteed at least a 2.5% dividend on your savings, and in recent times, the dividend has been around 6%. This is the power of compound interest. Your savings will grow year-on-year without you even needing to do much.

If you want to know how much you have in your retirement fund, use the i-Akaun portal which is EPF’s online service. It’s a great tool that helps you achieve your retirement goals, because you can keep a close eye on your funds, make withdrawal requests, and gain access to your latest EPF statements for banking needs.

But first, set your goals.

Before you even embark on investments, we suggest to pause and think about your retirement goals. Here’s how:

  1. Begin with the end in mind: Envision your retirement and think about the kind of lifestyle you would like to have. Thereafter, work backwards to achieve that.
  2. When do you plan to retire?: Legally, the retirement age is 55, however some of you may want to retire earlier in life, or later. Either way, think about how long you have until retirement, how many years do you have left to save?
  3. Think about your lifestyle expenses: How much do you need to survive in your preferred lifestyle once you retire?
  4. Be SMART: Ensure your goals are Specific, Measurable, Attainable, Realistic and Time Bound.

With your retirement goals in mind, you can then embark on putting the plan into action, think about savings accounts that give you a high return on interest.

Compound interest is key when growing wealth, because over time, your money will continually to exponentially grow and by the time you hit retired age, you will be basking in wealth. At least, we hope so. The key though, is to start early and to start young, thus giving you more time for your dividends to grow before you retire.

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Dividend Income – January 2017

Dividend Income

My Freedom Fund is off to an amazing start for the year 2017. The first month of the year of the rooster netted me RM1,180 in dividends from Scientex and CBIP. Compared to the same month last year where I received RM794 in dividends. That’s a whooping 48% increase in dividends for me. I did not increase my stake in either companies, the increase was from sound business conducted by them.

Scientex Berhad

January 2017 Dividends – RM760

Total 2017 Dividends – RM760

Dividend Yield – 3.41%

Weight – 14.68% of the Freedom Fund

Scientex Dividend

As most of you regulars would know, Scientex has been one of the top performing company in my portfolio. I’m always on the lookout to add more of their shares but the price is never right. Maybe a big market crash is the only time I’ll ever get to buy more Scientex.

Back in January 2016, Scientex gave me RM494 in dividends. Fast forward a year to January 2017, they are now churning out RM760 in dividends for me. If you’ve not caught on by now, that’s a 53% increase. I’ve had Scientex in my portfolio since 2014 and the dividends have been increasing ever since. If you’re looking for a fundamentally sound business, keep an eye out for a buy opportunity here with Scientex.

RM760 in dividends translates to a 3.41%. Already at 3.41% and we have another round of dividends to look forward to later in August.

CBIP Berhad

January 2017 Dividends – RM420

Total 2017 Dividends – RM420

Dividend Yield – 1.88%

Weight – 7.84% of the Freedom Fund

As usual, the dividend voucher from CBIP has yet to arrive (same occurrence last year).

The company’s dividends back in January 2016 stood at RM300. The increase to RM420 this year represents a 40% growth. Apart from Scientex, CBIP has been performing wonderfully for me. I expect good things from the company and looking forward to another round of dividends later in July.

End.

Total dividends for the month is RM1,180. Currently, dividend yield stands at 0.38%. It’s only the first month of the year but it’s looking good.

How was the first month of 2017 for most of you? I’d love to hear from you guys on how your investments did in January.