Personal Finance 101: Malaysians need to increase our savings. What about Americans?
I was forced to save when I was 26 years old
That was the year I ‘forced’ myself to buy a property (after being reminded by my father-in-law and that was the time when I started to look at everything unnecessary (to buy) as unnecessary to buy.
“Do I need it?” “If Yes, do I need it NOW?” “Can this like wait a few more months?”
Do I even have the money to buy it and still have enough money to pay the monthly mortgage?”
Do I have enough money to go for vacations yet? Hmm… could I like stay in a cheaper place (but clean) and spend the savings on food instead?
That’s how it all got started. Just need to note that savings alone is not enough. We still need to invest the savings so that we have faster and higher returns too.
Now, what about Americans? They represent the largest economy in the world (for now)
Briefly, they are also not saving a lot. Please refer to the infographic below by statista.com
Around 25 percent of Americans have some savings. 10 percent have none. There are however 11 percent of Americans having a minimum of US$50,000 or higher. That’s their top percentile of savers. A good question for all of us. Where are we if we are also in the stats below versus the Americans? Do we have a minimum of RM50,000 or higher?
Or as some Malaysians like to put it, we should use the exchange rate. So, at minimum, Malaysians should have RM230,000 in their bank to be considered as the top 11 percent. Whatever. Actually, it’s equivalent because if our rental is RM1,000 they do NOT pay rental of US$200 plus. They pay a rental of US$1,000 if not more depending on which city you are staying.
This is where Malaysians are at when it comes to savings
70 percent did not manage to savve or save less than RM500 per month. Please refer to the chart below.
Another chart, this one’s on EPF savings. Funds which we do not have access until after retirement.
Another one on actual savings. Source: PIDM
My conclusion?
Generally, Malaysians do save more if we just look at the charts versus the one on the Americans. (No conversion yeah, just using the same number) It’s now more important that we have financial awareness and read more to enhance our financial literacy further as well. Savings can come mostly from not simply spending or earning more so that the same percentage in savings is a bigger number. Regardless of how we save and the ways we save, the most important message is that we must save. It could be for us, could be for our loved ones or just to manage uncertainties. Happy saving.
Please feel free to share this article too. (links are all below) Thank you!
Sign up for daily investment news updates (FREE since Nov 2013 and FOREVER).
Alternatively, Follow me on Telegram here.
Please LIKE kopiandproperty.com FB page to get daily updates about the property market beyond kopiandproperty.com articles.
