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TABLE OF CONTENTS
Here’s what happens if you DON’T invest
Imagine this: you’re chilling in your gaming chair, immersed in an intense online battle with your buddies on the latest video game (we’re all guilty!), and suddenly, you remember that stack of cash collecting dust in your savings account.
You think, “It’s fine, it can stay there. No biggie, right?” Hold on, my friend, let’s dive into the consequences of letting your money idle.
1. Inflation bites 🦈
I can still remember when a bowl of laksa 🍜used to cost RM4. Ah, really missed the good ol’ days! But now, thanks to the inflation, it can go more than RM8 easily!
If your money isn’t growing through investments, it’s losing purchasing power.
With Malaysia’s last reported inflation at 3.7%, your money’s value shrinks each year making your everyday treats more costly.
2. Retirement goals? But…
If you’re not investing, you’re missing out on a key tool to build a comfortable retirement nest egg. With life expectancy in Malaysia reaching 75 years, we’ve got a lot of post-retirement years to cover!
Without investing, everyday people like you and I might have to rely solely on your EPF savings, which may not be enough to maintain your desired lifestyle in your golden years.
3. Opportunity Cost, Oh My!
By not investing, you miss out on the power of compounding interest, to put it in perspective, let’s say you have RM10,000 today. If you invest that money at a 7% annual return (historical average for the stock market), you’d have about RM76,000 in 30 years.
If you leave it in a savings account earning just 1%, you’d only have RM13,000. Ouch!
4. No passive income, no chill ❄️
One of the joys of investing is creating passive income streams, allowing you to make money while you sleep (or binge-play games).
Without investments, your income is tied to your job or business, making you more susceptible to financial setbacks.
Here’s the takeaway💡
Don’t let your hard-earned money wither away in a savings account. Embrace the world of investing, we are on this journey together!
So, let’s hit the pause button on the video games for a moment, and make our money work for us, shall we?
Word of the week: Valuation
Definition: The process of figuring out how much something is worth, usually referring to a business, investment, or property.
When a private company goes public, it needs to determine the value of its shares before selling them to the public. This involves considering various factors like financial performance, growth potential, and market competition. By doing this, the company can decide how much to charge for its shares and attract investors to buy them.
In Airbnb’s case, before its December 2020 public offering, investment banks and financial advisors analyzed various aspects, including revenue, potential for expansion, and competitors. Based on their assessment, they recommended a valuation range of $30 billion to $35 billion. This would help Airbnb set an appropriate initial share price to attract investors.
Key Economic Dates:
- 3rd May: Fed Interest Rate Decision
- 5th May: Nonfarm Payrolls (Apr), Unemployment Rate (Apr)
- 10th May: Core CPI (MoM) (Apr), US CPI Inflation (Apr)
What I’ve been reading:
Here are the top stories that caught my eye:
- 19 nations eye BRICS expansion; Summit in South Africa
- Microsoft, Google outperform expectations; Tech stocks rally
- Apple plans AI-powered health coaching service, mood tracker and iPad health app
- ByteDance launches new US app amid TikTok ban threat
- First Republic Bank seized and sold to JPMorgan
You’re all caught up!
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Cheers,
Ziet
