short term vs long term

I'm talking about Strategic Savings!


for short term goals and long term goals.


If you are going to lock in all your money to get higher returns over the long term for potential very high returns, then you wouldn't be able to achieve your short term goals.


Longer saving periods without flexibility(access to your cash as and when you want) will definitely gives you a higher returns.
Shorter saving periods/ with flexibility will compromise on your returns.


The same concept applies to fix saving & investments over the long haul.

However, there investors who does value investing and those "safer" investors who buy into blue chips companies.


True, there are people who make decent amount in the stock market everyday, but not everybody have the skills or/and capital to do it.


And saving for your retirement might be quite a chore to most of you, and to some of you, you might not even be thinking about it, but the past 2 weeks sunday times had been talking about retirement and we need to keep in line with them, i guess it's due to our aging population in singapore.


You just graduated & is excited about owning your first car and first house, and probably this will be the 2 most expensive purchases you will make in your life.


So Where do we go from here ?


Let's take for example, you want to retire at the age of 65 years old and you passed on at the age of 85 (average, lifespan increases due to medical advancement, is that a blessing or a curse ? )


monthly expenses $3000( in today's dollars) x 12 months x 15 years = $540,000 today's dollars


That's provided there's no inflations.


Let's assume and which is inflation on average work out to be 3% a year, and it's compounding and it's being the 8th wonders of the world ( if you don't know what it is, it means that you guys haven't been reading my blog! )


The amount will work out to be, $2,668,752.01 ! wow! compounding is really the 8th wonders of the WORLD !


ok you still have abit of CPF money to help you with this, not too bad.


then some of you protest, eh i won't be spending $3000 a month in today's dollar when i retire.

ya, some of you will have the self discipline to do that.


But i ask you ar, do you spend more during weekends or weekdays ?
Do you spend more when you go on a holiday or when you're working ?


ya! that answers your question. When you retire, it's like holidays everyday and gone are the days when you will be like those uncles sitting at the community center playing chess ?


How many of you knows how to play chinese chess? English chess ?

Think about it my friends :)