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Monday, November 10, 2008

Why you should invest

Investing for retirement gets more and more important as time goes by. Yes, in Singapore, there's a safeguard against old age by the government named CPF. However, it is only sufficient for the bare essentials and should only be relied on as a last resort.

When is the best time to start investing for retirement? I would say, right now! The earlier you start, the better. Yes, I'm already thinking and planning for retirement at the present age of 25. That's because I don't want to wake up one day and discover that I have little cash/assets, and yet no longer have the ability the earn a steady income to support myself.

About a year ago, I was still putting money in fixed deposits at a rate of around 2% p.a. Happily, I thought my money was growing. How wrong I was! Inflation was at around 3%, and so I was losing money at a rate of around 1% p.a. to inflation! If I spend the money, I would have little left; yet if I save and put it into fixed deposits, I would still lose it to inflation.

This is where investing comes in. We invest for higher returns. Invest to match or beat the inflation rate. Invest for a comfortable retirement nest egg. Investing is a way of attaining the things that you want, such as a new home, a college education for your children, or expensive ‘toys.’

Of course, your financial goals will determine what type of investing you do. The final destination when we embark on investing is to create wealth and security. It is of utmost importance to remember that you will not always be able to earn an income; you will want to retire eventually.

An investment is a plan, a plan for the future, a plan for retirement, a plan to enjoy life and live it to the fullest. My plans and strategies have been discussed earlier; I invest in blue chips, and I invest my time in creating websites (virtual assets). It is a plan/strategy that should be refined, tweaked, and optimised as we go along.

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