Tag Archives: income

4 Pillars of Early Retirement

The journey to your early retirement doesn’t have to be complicated, and sometimes it doesn’t require big change to your life. You simply be more aware of the decisions you made and doing more and better the things you have done right so far. Basically there are 4 pillars you need to take care of before and during your retirement:

1. Income Generating Ability

Money plays a very important part in your everyday life nowadays. Gone are the days where human can survive on the land they reside on and the environment around them. Unless you inherited a big pile of money, we all need to start from the same starting line when come to generate income.

If you were like me, you would be working for a company serving their customer. For the most of us, this the primary way for us to generate income. As saving rate is very important when we talk about retire early, the amount of income you are able to generate every month directly affecting your pace.

For example, it will be easier for a person who earning $120K per year to achieve 80% saving rate compare to another person whose annual earning is $24K. Although monthly income plays a very big role in determines the speed you get to your retirement, there are 3 other crucial pillars in life you need to develop.

2. Investment/Money Management Skill

I recall from some book I read before that financial education is very important in today world. Although I don’t agree his condemn on saving money, his words make some sense about getting ourselves financially educated. Currently I am reading few books recommend by people in this forum post, there are a few online free courses on investment and money management too.

3. Life Skill

Time is money. If you have a lot of money (like few millions dollar), you can really buy your way to your retirement. If you are normal person like me, you will need to invest some effort to learn skill that enhance your life without spending money (or maybe little money).

In my view, cooking skill being one of them. Other skills that I deem essential are cycling, various house improvement skill (paint your house, plumbing, flooring, appliance installment, etc…) and planting(grow your own natural food, good idea?).

4. Frugality

This is one of the trickiest pillars that hold your early retirement. With frugality (whatever your definition is for this word) in place, you won’t need as much income to fund your retirement. I am pretty confident I am doing quite well in this pillar. My expense last month is as below:

Rent: 8.51%

Parent: 8.76%

Food: 7.09%

Transportation: 3.55%

Credit card bill (2 more months to go!): 6.17%

Change to RM: 3.55%

Others: 0.5%

Saving (all going to loan repayment): 61.78%

I foresee my expense will go lower after I pay off my credit card bill and personal loan from my sister (thanks sis!). My transportation cost will go down also if I successfully execute my experiment.

So, I estimate my expense structure will be:

Rent: 9.22%

Parent: 8.76%

Food: 7.09%

Transportation: 1.77%

Change to RM: 3.55%

Saving: 69.61%

I am pretty happy with my progress now (retiring in 8.5 years sounds really good.^^). But I want to go further. I hope to achieve 80% saving rate and retire 3 years earlier. My focus now will be on increase my income because I think I have nothing to shave from current expense structure now and the only way to increase my saving rate now will be either increase my income or create another auto pilot income source.

Now is your turn to make decision. Decide which path you want to take to increase your saving rate and have more freedom now.


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Filed under Personal Development, Save, Spend

How To Get Started In Forex Investment

I realized I have not written much about income generation. Although it is very important to live a frugal life and watch your spending closely, but the income side also very important in the formula to early retirement. With same level of frugal spending, a normal income level can helps you retire in 10 years, but with a high income, you might achieve the retirement in 5 years.

Normal income + frugal life style = early retirement

High income + frugal life style = extremely early retirement

So, I did a simple question and answer session with my friend, Samuel who has some experience in forex investment. Below are the questions and answers; you can take a look if you are interested in learning forex.

1. How did you start your forex investment?

I started my forex investment purely through guessing the market; it is more like a gamble than investment. I lost about 100 dollars during this guessing market period.

After this, I started to source for robot that makes the trade for me automatically based on some preset algorithm. Unfortunately, the robot I purchased was even worse than my instinct; I lost about 200 dollars using the robot.


2.  What is the tool you using now for your forex investment?

I am writing my own robot now for my forex investment. I am still perfecting the investment algorithm in this robot. It has been almost a year now.


3. Do you have any resource recommendation for the beginner?

Beginners can go to www.babypips.com to learn more about forex. The website offered free lesson that teach about the basic of forex and things that investor should pay attention to.


4. What are the things you think beginner should take note when they start?

– It will be better if they can attend the entire lesson on www.babypips.com and learn the basic of forex before start their own investment.

Setup a demo account and try trade for at least 6 months to learn about market trend

– Prepare to lose some money when you doing the real trade.

– It will take about 2-3 years to learn most of the market trend, and don’t be surprise whenever a new market trend appear or a spike in the market


5. What is your plan going forward?

I will continue spend time on perfect my investment algorithm of my robot until it provide a steady income source.


6. What suggestions you want to give to parent like yourself consider the higher commitment level they are having?

– They should discuss among themselves and must agree on what they want to do or achieve in forex investment

– Distribute the work. Have a mutual understanding on who should do what.




Filed under Passive Income

How To Keep Track Of Spending?

In order to cut down our spending, the first thing we need to do is keeping track of our spending. I have been using the tracking style recommended in the book “Your Money Or Your Life”, which is keeping track of every cent that flows in and flows out of your life. You will have to design your own unique category because everyone has his or her own spending habit and financial situation.

“Your Money Or Your Life” is one of the earliest personal finance book I read during my undergraduate time, but I didn’t followed its advice on tracking expense until 2 years after my graduation.

I used my own designed Excel sheet to track my daily expense, income, total of each category and my “real” hourly pay.

If you want to use my designed Excel sheet to track your expense, you can download it from the resource page. There are instructions on that Excel sheet that outlined how to use it to track spending.


Filed under Spend