(Author’s note: This article was not published in The Star)
Saturday, 25 July 2015
As the days draw nearer to my 55th birthday, I am undecided on withdrawing my entire lifelong savings from the Employees Provident Fund. No it is not a matter of trust. My issue is with yields. Can I get a better yield than what EPF is giving me? And it is about timing. And perception.
As an entrepreneur for more than half my adult life, I have never considered EPF as my main source of retirement income. That would be a failure mentality of an entrepreneur. I am supposed to make enough money after 32 years of entrepreneurship to retire comfortably.
But money is money and this is my money, saved over 32 years. And I do thank the EPF for managing my money well, growing it with decent compounded interest.
But there are signs of concerns that changes are forthcoming in the way EPF is being managed at the moment. Or is it just my perception?
The recent attempt to suggest extending the withdrawal age to 60 years does not bode well for me. With my terminal disease, statistically I have only a 5% chance of surviving beyond 5 years which means I might not be around to collect my lifelong savings.
EPF is already propping up the entire stock exchange in Malaysia and with more than RM 2 billion inflows a month, yields on a percentage basis of total funds will diminish as good investments are hard to come by. The investment team will have to work much harder and look beyond Malaysia for higher yields.
Loans to 1MDB (and its companies) is just a small portion of its funds and it is guaranteed by the government. Or is it? However a large portion of its funds are invested in Malaysian Government Ringgit Bonds and unless the government goes bankrupt, the investment will be rock solid.
Unlike Greece, Malaysia can print its own money and technically speaking like USA will not go bankrupt. The main worry will be the devaluation of the Ringgit due to excess printing and supply to the market. Then our money is worth nothing versus world currencies.
But we have a solid and reliable Central Bank which has governed our monetary policies so well over the years. But is our Central Bank still reliable? Is it managed by professional technocrats or is it managed by self serving politicians? Perception of credibility is crucial to a national institution like a central bank.
So what can I do with my EPF withdrawal?
At best, I can get 4.2% per annum on a Fixed Deposit with a commercial bank. I should invest in our stock market but my brokers tell me the index is over valued at the moment. In my younger days, I would have plonked the whole sum into my trading business either expanding or extending my product lines.
But times have changed. So has my perception of Malaysia. I am confused at the moment. Very confused. Is anybody managing the country? Are the laws of this land equivocal? Ambiguous and subject to personal interpretation?
If as a local businessman, I am not comfortable with investing in my own country, what more do you expect from foreign investors? The current political climate in our country is not conducive to attract new investments. The game of perception played by all political parties have got to stop.
Anybody and I mean anybody who is guilty of any crimes must be brought to justice. Only when our Judicial branch is perceived to be independent of the Executive and the Legislative, the investment confidence will return to this country.
To all the young entrepreneurs, you should include analyzing political risk in your considerations when you start a new business or when you intend to expand overseas. This charade happening right before you can happen anywhere especially when the politicians think they own the country and can do anything they want.
Thread carefully when you invest overseas. Always have an exit plan in mind. Always remember personal safety is top priority. You might have to leave your assets behind when you have to leave the country urgently so minimize your fixed asset investment. Multinational companies like Proctor & Gamble even leased computers and office furnitures so you will find minimum assets in countries where they trade.
My advise to you is to avoid corruption deals with government officials and politicians as the penalty is high. With an active social media and strong anti money laundering acts, you will be caught sooner or later either as the main actor or as an accomplice. Either way, you are burned for life. No amount of money is worth the shame it will bring to you and your family. And money is poor compensation for loss time in jail. Furthermore it is worth less by the time you get out of jail.
So start your entrepreneur journey the hard way. Play proper, play smart and play clean. You might make a lot of money, you might not. But I guarantee you will have a sense of satisfaction that you have done right and you have done well. How much wealth and savings do you really need to retire comfortably anyway?
So when is enough, enough?
I guess that depends on the individual really. Some ladies would be thrilled to death just to own a LV bag, some are not satisfied with even 10 Birk bags. That’s ok. As long as you have bought it with your hard earned money.
As for me, I have enough of this political charade.
I hope the righteous will triumph and the truth will prevail. Enough is enough.
6 thoughts on “14/2015 – When is enough, enough? (Unpublished article)”
Dear Thiam Hock – I became an instant fan from your very first column. Your articles are always filled with wry wicked humour woven in between hard truths. When you said you were taking a leave of absence from the print media, my reaction was ‘Oh s..t – the authorities had shut you up.’So when you said
your son was setting up a blog for you, I jumped at the chance to subscribe immediately. But you inexplicitely disappeared for the longest time. My Sunday was never quite the same. What joy and sadness when you resurfaced, explaining your 1 year hiatus. And now you disclose the seriousness of your health. I can only humbly pray for you and your precious family.
Dear Mr TTH,
I am a fan of your blog/articles. I read all of them twice. I like your articles because you share your wisdom, experience and knowledge with honesty about doing business where most of us are amateur and keen to learn. I hope you will continue to write even though you are facing health problem. I can only wish you good luck in fighting the cancer and hope you will not suffer and recover soon. I am not writing for advice or tips. Whatever you want to tell/share about entrepreneurship , seems that you have done well in all your articles already. I am in my late 30s and I have saved enough excess cash of about RM400K from working in Singapore before this to start a small business which was my goal (it’s most people’s goal anyway). I did not venture into any business… yet. There are too many cafes / kopitiams. 400K is not enough to hire A-list celebrity to swing her hair from side to side for shampoo advert. I don’t have connections nor will I have any inheritance. (Your article #19 in 2012 : Retired or dabble in business) (Article #11 in 2011 : Know yourself, your business). In the end, I chucked all the money i intend to do business in the cosmetic manufacturing listed company you invested as well since last year. Follow the path of the person I respect.
Your post of yesterday about you statistically have only 5% chance of surviving beyond 5 years due to your cancer saddened me , even though I do not know you personally. Just want you to know you inspired others and you have my respect. Thank you for all your advice about entrepreneurship. All the best you.
Well said TTH. The lust and greed for dirty money destroys everything including the family legacy. Trust God’s mercy and miracle that you will live long enough to fulfill our purpose.
Hi Tiam Hock,
Precise and perfectly articulated piece of work to describe the current pathetic state of affairs in Msia. Real sad but unfortunately true.
Wish you speedy recovery from your illness and looking forward to more articles from you.
Ng Yan Peng
i pray2 for your recovery. I also pray2 for righteous will prevail. For those who are standing up against blatant sloppiness, we shall support U morally and any other way we can.
Truth has been said. Thanks for the genuine advise.