Warren Buffett once said that “If you don’t find a way to make money while you sleep, you’ll work until the day that you die.” Which begs the question – do you really have to work your whole life?
Everybody hopes to retire someday, I mean who doesn’t? Unfortunately, not all of us are taking adequate steps towards that goal.
To put things into perspective, let us take a look at the statistics from a study conducted by OCBC in October 2019.
34% of Singaporeans did not invest.
48% had no passive income.
36% were victims of investments that do not perform to targets.
And 27% were guilty of speculating excessively for quick gains.
(Source: OCBC Financial Wellness Index)
Now why is it important to invest, you may wonder.
Imagine this scenario – you have to go up a 30-storey building. Would you rather take the stairs or the elevator?
If the answer isn’t already obvious, add on the fact that you have to carry a 10KG sack of rice that gets heavier with each step.
Not investing is akin to taking the stairs, and the sack of rice represents the inflation that you will have to bear along the way.
Albert Einstein, another famous figure that we all know, said that Compound interest is the most powerful force in the universe.
He invented the famous Rule of 72; Dividing 72 by the interest rate to estimate the number of years required to double your money.
For example, in a savings program that offers 4%, it would take approximately 18 years to double that amount.
An investment program that offers 10% takes you just a little over 7 years!
Hence, it is absolutely vital that you have some form of investment going on. Especially if you would like to retire comfortably later in life.
That’s all from me today. In the next article, I will be talking about passive income as well as speculating excessively for quick gains.