Retirement planning: how to build your wealth for retirement


The third pillar of our accumulation of wealth for retirement would be cash investments.

Mr Vinod Nair, CEO of MoneySmart, said his recommendation was for people to learn how to invest their own money.

There are three main categories that most investors consider. They can choose to invest directly in stocks. The second option is exchange-traded funds (ETFs), which invest in a basket of securities that track an underlying index. The third category is that of mutual funds, which invest in a group of companies around certain themes.

To mitigate investment risks, the advice is to diversify.

“If you don’t put all your eggs in one basket and diversify into different asset classes, in different geographies and markets, it gives you a better chance of success with better results, with lower risk.” , said Mr. Rhee.

“The second thing is really cost-oriented. Cost reduction has a direct impact on returns. Because if you save 1% on costs, that’s 1% more of your return. And if you invest for 30 years, that 1% compounds to make a difference of over 240 percent. And that’s a huge difference in returns over 30 years.

As all the markets move up and down, one way to stay invested is to use the average dollar cost.

“You don’t time the market and you just set aside a set amount each month or year, regardless of that period, so that you can invest in these instruments. So when it’s low you end up getting more units; when it’s high you end up getting fewer units, but that’s a conservative way instead of trying to wait for the downside and buy the downside, ”Mr Nair said.

“It’s a passive strategy. If you do it consistently, don’t touch it, don’t take it off. And leave it there for a long time, your money will pile up and grow for you in the long run. .

“The only time you need to reassess is when the fundamentals change. So if you think China is off a growth path and maybe it’s in decline, then this is it. that you may want to re-evaluate to assess if this is the right option.

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