Surviving early retirement

Attaining financial independence and retiring early (FIRE) may not be as exciting as it sounds.  Friends of my age, especially ladies, have been talking about it for years but still working until today.  I know someone in particular who decided to retire early at the age of 54 but returned to work in less than a year and still working today beyond the age of 60.  It has been exactly two years today since I opted for early retirement in July 2023 at the age of 46.  Things have been great so far.  Given a second chance, I would still choose to retire early.  How did I survive?  Here are two tips from me.

First and most important of all, you have to have adequate savings to support your lifestyle post retirement.  This is of course not something that you start working on a few months or even a few years before retirement.  It has to be way earlier.  In my case, I started working with early retirement in mind.  So, I planned and tailored everything accordingly.  Savings, lifestyle, loan tenures et cetera.  The key is to live moderately below your means.  Not to the point of starvation of course.  We travel a lot and dine out quite often.  We could have done more, but we didn’t.  That’s the point.  This is also useful after retirement because you basically just maintain the lifestyle.  No downgrading required.

Secondly is to find ways to keep yourself occupied each day.  Your mind and body are so used to doing full time job for years and it is not a good idea to suddenly stop everything, though it may sound pleasing.  This is the time for you to do all the things that you like and are passionate about but never get the chance to do because of you were busy with work.  Your brain and body need to keep moving.  At least, create something that you can look forward to each coming day.  For me, I occupy myself with two things in particular, gardening and investing.

Since most of my investment instruments are based in Malaysia, my days start as early as 3.30 a.m. when funds like Versa and Wahed update their prices, and KLSE pre-opens.  I usually get up at 3.00 a.m. for Subuh prayer, depending on the season.  Subuh prayer time ranges from 3.30 a.m. to 5.30 a.m. throughout the year here.  Between 4.30 a.m. and 6.30 a.m. I’ll be busy preparing husband & daughter for work & school respectively, ironing clothes, cooking breakfast and all.  I will resume monitoring investments from around 6.30 a.m. after the leave, until 7.30 a.m. when the market takes afternoon break.  Funding Societies and CapBay also usually publish new investment opportunities after and around 7 a.m. as well as crediting any principals and/or profits returned.

During the market break from 7.30 a.m. to 9.30 a.m., I will tend to my plants, wash clothes, which is not done daily and defrosting the necessary to prepare for lunch.  Stock market here starts at 10 a.m.  At 11 a.m., I will battle for Funding Societies investment opportunities if there are any, and also check on new opportunities that will start at 3 p.m. (8 p.m. MYT).  When KLSE ends at 11.45 a.m., it’s time for me to go to the kitchen and start cooking for lunch, which will usually last until after 1 p.m.  That will be the time for me to check on the last batch of investment opportunities from Funding Societies that will open at 5 p.m.

At 1.50 p.m. I leave home to pick up daughter from school.  While waiting for her in the car, I will check on the performance of Halogen funds, which update at 2 p.m. every weekday.  At 3 p.m. and 5 p.m., I will battle for investment opportunities at Funding Societies, if there are any of interest.  Throughout the day too, I will check on the performance of various unit trust funds and foreign currencies that update at different times.  Stock market here ends at 3 p.m.  After 7 p.m., I will check on the investment instruments in Malaysia that give daily returns.  Five hours later, often in my dream, I will check on the similar investment instruments here.  Then the next day repeats …

First visit to Madinah as a Saudi resident

We visited Madinah the first time as a Saudi resident in September 2023.  Yes, this post is long overdue.  We drove there 😅.  That was the only striking difference I think.  It took us around seven hours to get there from Riyadh.  This visit was also to complete my Hajj trip.  I didn’t get the chance to visit Madinah after Hajj as I had to leave early.  For record, I left for Hajj with KT110 and returned with KT9 😬.

Achik was super excited because everything was like new to her.  The last time we visited Madinah was in March 2013.  She was few months shy of three years old then and could barely recall anything from the umrah trip.

2013

Ten years later

One year experience with Funding Societies

In the search for an alternative investment instrument that can potentially gives higher returns than the EPF, I stumbled upon Funding Societies.  Crowdsourcing was one of my research areas, so it is not that difficult for me to understand the mechanisms behind it.  The experience is not bad at all.  In a year, I’ve managed to gain more than RM2k returns from a total of RM 50k capital that I gradually increased from few hundreds initially.  As of today, my annualised profit rate is 8.8%.

Returns growth to date.

However, like any other investment types, it is not without risk.  The risk is when the issuers (SME companies that make loans) default payment.  The Funding Societies team will do the necessary and take appropriate actions if that happens and we will be informed.  Nothing we can do beyond that.  Fortunately, for me, all such issues have been resolved.

My practice is to balance between guaranteed loans and non-guaranteed loans.  The former has lower profit rate (but still higher than most other instruments) but repayments are guaranteed.  For non-guaranteed loans, I will take time to go through the factsheets before investing.  I will only invest in companies that have excellent (prompt) repayment track records.  This will help to reduce defaults, although there is no guarantee.  My advice is to avoid setting the auto-investment bots, unless for guaranteed loans. 

How to avoid unit trust’s sales charge?

If you’re used unit trust investment, you will notice that there is sales charge that comes with its subscription, usually deducted from the total amount.  That means, the number of units are purchased after deducting this charge from the total amount invested.  The sales charge can range from 1.5% to 3%, which can be significant if you are investing a large amount.

I recently found a trick to skip this charge.  Very simple.  Purchase the unit trusts via KWSP (EPF) i-Invest feature.  EPF allows its contributors to use up to 30% of their Account 1 (now Retirement Account) balance for the purpose of unit trust investment.  Based on my experience so far, there is no minimum amount required and all unit trusts purchased so far via -Invest are free of any sales charges.

If you’re concerned about using up your EPF savings, fret not because you can always voluntarily contribute up to RM100k/year to make up for the ‘lost’.  One of the cons that I can think of is that, you are limited to the list of funds that EPF has approved i.e. funds that are regarded as safe.  These usually exclude the high-risk-high-return ones.

Mission 1300

This is another challenge that I’ve created to keep my brain working.  I have SAR1k that I want to keep in my multi-currency account.  Sadly, it only accepts deposit in RM.  So I had to sell the SAR first before I can keep it in the account.  I sold the SAR1k and was paid RM1220 based on the exchange rate at the time.  Now, I want to buy back the SAR1k and of course I won’t be able to get it with RM1220 due to the spread.  At the current rate, I will need around RM1300 to buy SAR1k, hence the mission.  That is about RM80 or 6.5% more.  Can I possibly get it without using my own money?

Fortunately, there is a number of options nowadays for investments that offer high liquidity i.e. that allows you to withdraw anytime, as early as T+1.  I tried and compared three options.  The newly launched Maybank goal-based investment (GBI) and Halogen crypto currency-based fund (subscribe here), and a regular savings account that offers 3.88% p.a. profit.  GBI is like a portfolio comprising a maximum of five funds that you can choose and determine their respective percentages.  Most importantly, all of them, at the time of writing, are free of any subscription/sales charges.

 

Option	Buy date	Buy price (RM)	Sell date	Sell price (RM)	Return (RM)
GBI	13/05/2024	1220	31/05/2024	1249.33	29.33 👎
Halogen	15/05/2024	1220 (NAV 1.2048)	31/05/2024	1557.61 (NAV 1.5382)	337.61 👍
Savings	15/05/2024	1220	31/05/2024	1221.94	1.94 👎

Halogen is therefore clearly the winner in this case at this time around and managed to meet my target.  I finally bought the SAR1k happily ever after at RM1292.20.