“Make your hard-earned money work for you!” As we step into adulthood, we often hear the people around us emphasize on the importance of savings and I believe this mindset has actually been implanted in our head since we were a kid. However, when we start having the capability to earn, it is common that many of us feel that our spending are justified. What more when shopping has now become just few taps away and more attractive with the revolution of technologies and groundbreaking business models. Therefore, self discipline is the key in managing our spending desires which will eventually save us more money for our future. Click here to read more on ways to manage your spending.

In contrary, saving money isn’t just about putting them into our bank savings account which may yield less than 1% return unless you have a OCBC 360 savings account. It is vital to put our money into a good financial instrument that will yield you at least 5% return to compete with our current inflation in Malaysia. Otherwise, your savings will not be able to keep up with inflation and ultimately, your savings will deplete with the given “negative return”. Having said that, the key ingredient in compounding your savings is time. Acting NOW will outweighs how much you save as the effect of compounding interest is astonishing.


Let’s use 3 scenarios to distinguish the relationship between savings and time. With a similar 6% annual return rate given to their investment funds:

  • Benedict starts investing RM 12,000 annually at the age of 20 and he continues investing until his retirement age of 55. By then, he has invested for 35 years and a total capital of RM 420,000.
  • Jennifer also invests RM 12,000 annually starting from the age of 20. However, after investing for 15 years, she decided to stop. By then, she has invested a total of RM 180,000.
  • Walter also invests the same amount but he only began at the age of 30. He continues investing RM 12,000 annually until he retires at age 55. By then, he has already invested for 25 years and a total capital of RM 300,000.



Unquestionably, Benedict’s wise move to begin saving early and never stops made him the richest one among the three of them. His retirement fund is significantly higher than Jennifer and Walter.

However, as you can see, Jennifer’s account is much higher than Walter’s despite only saving for 15 years. On the other hand, Walter saved for a longer period of time and a much higher amount than her. This is the “snowball” effect Jennifer earned from the early years of her savings. The only way for Walter to catch up is to invest more every month to compensate for time.

Beginning saving at an early age give you a huge edge on your finances, especially your retirement fund. Stop giving yourself an excuse that you need to enjoy life while you’re young. Start saving for your future now! As the saying goes “Do something today that your future self will thank you for!”

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