Do you need to be rich to retire?

Many are interested to make more money, no doubt, who does not want to be rich? But, do we need to be rich to retire?

In the past, I thought that I need to be having a lot of money for me to retire. In fact, I realized I don’t need to have a lot of money to retire, I just need to have sufficient money to retire. How much money is considered as sufficient? It depends on your lifestyle and monthly expenses. If you need RM5,000 a month for monthly expenses, you must have sufficient money to generate RM5,000 a month for you to retire.

If you are putting you money in property that gives you 5% rental income a year, if you have RM 1.2 million property portfolio, it will have given you RM 60,000 rental income a year (5% x RM 1.2 million). Similar to your retirement pot, such as EPF and PRS, if EPF and PRS is generating 5% dividend income, you only need RM 1.2 million to earn RM 60,000 dividend income. Hence, the sufficient money in this case is RM 1.2 million. When you have RM 1.2 million, is it rich?

According to Forbes magazine, rich means having $ 1 million or more a year in income. As such, while having RM 1.2 million worth of assets is no way to being rich yet. However, it can make a person retires if his expenses are only RM 5,000 a month.

The purpose of illustrating this is to make you realize that sometimes you don’t need to be rich to retire. Retirement needs a plan. If you do not know your retirement figure, it is very hard for you to even achieve it. It is a long journey, if you know you number earlier, the chances of achieving it is higher because you have more time to accumulate the figure. Start to understand you figure and work out a plan to achieve it. Read this blog to calculate your figure.

************************************************************************

You can receive constant broadcast message relating to wealth creation to financial freedom through Telegram. Click here to subscribe to the telegram for the weekly newsletter.