Start saving for your future

SET aside some money for yourself first when you get your pay cheque, that is the advice given by a chartered financial consultant so that you can retire as a millionaire.

K.H. Tan said the idea of “paying yourself first” was good and should start early in one's working life.

“Paying yourself first means before you settle the bills or spoil yourself on designer coffees, you set money aside for yourself. Now this isn't cash to splurge but cash to save for the future,” he said.

Tan, 38, added that many young executives who had attended his financial seminars felt it difficult to set money aside for themselves.

“Salary adjustments, increments and bonuses are earned. No matter how much you earn, you must force yourself to set aside an amount for retirement. If you don't do it, nobody else will,” he said at his recent I Can Be a Millionaire seminar.

However, Tan said: “Human nature makes it difficult as people think they don't have enough to pay themselves first because there's always something to spend the annual salary increase on.
“We advice many to start on a small sum instead of a ambitious sum.

“As income grows, increase the savings and to make the pay your self first effective, the process has to be automatic. Apply for an automatic bank transfer to take effect each time your income is credited to your account,” he added.

Tan's business partner P. Utama Raj strongly believes in the pay yourself idea and suggest that young executives request their employers transfer a fixed percentage of their income from their monthly pay to an investment portfolio.

“By doing so, the process becomes automatic and it makes it easier to hit that million ringgit mark due to the consistent monthly deposits and power of compounding interest,” he said.

Raj, 35, added that young executives must avoid incurring credit- card debts and spend wisely.
“One good approach to spend wisely is to use cash whenever possible.

“Being discipline does not mean a lack of a social life or depriving oneself of every shopping urge.

“We must keep our spending habits within reason thus exercising delayed gratification,” he said.