Tuesday, March 13, 2007

Dollars and sense.

I went to a seminar last night. It was a presentation on the upcoming changes in the superannuation (known as employees provident fund (EPF) in Malaysia) legislation which will take effect in a few months. The speaker was talking about how much tax people are going to be saving once they hit the legal retirement age and how to take advantage of the changes.

Hey, if it’s tax we’re saving, I’m all for it but the catch is, contributions to superannuation can’t be accessed until retirement. So, all those baby boomers out there that are nearing retirement will most likely be engaging a financial planner and dumping shitloads of money into their superfunds to take advantage of the change. That’s all good and well but asking a 20 or 30 something to throw money into something they won’t see for decades just doesn’t sit well with me. Even if it means tax savings.

If I have a lazy million lying around, then I’d most definitely do it but there are a lot of ‘what-ifs’ along the way. What if I need the money now? What if I want to help out the family or friends? Does being financially prudent mean one doesn’t need to have a life or have fun? Does it mean one has to be a stingy bastardo or biatch?

I dunno. Maybe some people can do it. At this point in time, superannuation is probably the last thing I’ll think about when it comes to investments or tax savings. I’ve heard the funniest and weirdest stories about friends and relatives who go to extremes to save a buck or two. I’m not saying that being thrifty is bad. Heck! I probably have ‘complimentary’ towels, soaps, stationery, basically everything that wasn’t nailed down, from every single hotel I’ve stayed in. The point is, saving money for a rainy day is good but saving money and not being able to use it when you need it most is just silly. I probably know how those paper millionaires feel now. Having magazines quote their worth when in reality, they might be flat broke.

I keep thinking that by the time one has access to the war chest, one might feel too old to want to do anything with it. All of a sudden, that round the world trip that you planned to have 20 odd years ago just seems too difficult and tiring.

I understand that superannuation is to provide for the retirement years where we can't live from paycheque to paycheque but I just feel that there are other avenues to accumulating wealth other than super for the 'younger' people. Granted that the speaker probably had his presentation geared towards the older crowd when the majority of the audience last night was around the late 20s/early 30s, it just felt like he's saying, 'put all your savings into super otherwise you have shit for brains!'

I’ll revisit this when I’m 45. I’d probably be milking my kids to contribute to my super. Muahahahaha!

Oh! One of the 3 people from the firm that made the presentation looked like a sexier version of Christy Chung. She was in a business suit but imagine if she was in a Lara Croft outfit. HOT DAMN! No wonder we were all wide awake.


zewt said...

it's not compulsory to contribute that in aussie? i would assume aussie govt will be more active in welfare of the work force.

oh... christy chung... the hottest babe ever! haha!

flaminglambo said...

There is a compulsory component but what the seminar was trying to say was instead of investing in property, shares, etc. directly, people should dump it all into their superannuation and use the fund to buy into these property, shares and/or other investments and take advantage of the savings in tax with the upcoming change in super legislation. Only thing is, when you cash out of that investment, you cannot touch your gains until the legal retirement age which could be decades away for some people.

It's a little different than Malaysia's EPF system which allows people to withdraw a portion from it for certain neccessities but I think as the population advances, more and more people will be paying attention to their EPF which will force more changes but who knows if anyone will listen? The only thing that bugs me is their performance. I wouldn't trust them to handle my dry cleaning.

zewt said...

you dont trust the aussie govt in handling your money... gee... do we have hope in malaysia then?

flaminglambo said...

I was referring to Malaysia. Apologies if I didn't make it clear enough. ;)

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