How to invest when we are used to spending since young? Parents, take note.

It was 4pm on a weekend. My sister suggested a tea break session which was quickly agreed by my brother and I. We went to a nearby cafe. After ordering the food and drinks, we went to find a table. The whole cafe was full of people. Specifically, full of teenagers and young adults. I was definitely the oldest adult there. A latte and a slice of cake is around RM25. Some of the tables had main courses which meant that the total bill would be even higher. Most were chit-chatting and my guess is that they were spending their pocket money or their hard earned salaries. Perhaps they were there for the first time after saving for a few weeks. 🙂 Anyway, my point is simple. If they are already used to spending so much even before they start working, when they start working, it will be hard within their pay. That is why some articles point out the fact that fresh graduates ask for up to RM6,500 per month in starting pay. Here’s that article in FMT. 
Anyway, when the salary is not enough, credit card comes into the picture. Then, there would be those surveys that reveal that young people these days would not want to buy a home. Actually, the major reason would be because they have spent most of it. Second reason would be acceptability. It’s unacceptable to live in a flat or even a secondary apartment. There has also been many surveys which continue to show that salaries for fresh graduates have not changed much through the years. Some would claim that this happens only in Malaysia. Well, it happens in the UK too. Here’s one article in The Telegraph. Retire today and you are 46 percent worse off than 10 years ago. It happens in Australia too. Reported recently in The Sydney Morning Herald: War on wages: Australians are working harder and going backwards  Yes, it happens even in the most powerful nation in the world today. Article in HuffingtonPost here: ‘income and wealth equality.’
I think it is very safe to say that if one were to rely only on salaries alone, it’s going to be a very tough future unless we are really disciplined and save, save and save. Statistically? Based on the usual pyramid of an organisation, perhaps just 20 percent of fresh graduates would move on to become a manager. Out of these managers, perhaps only 20 percent would move on to be senior managers and out of these senior managers, perhaps just 20 percent would become top management. Out of these top management, perhaps just 20 percent would be top management for hug public listed companies or multinationals. In other words, for most of those who started as a fresh graduate, the salary growth is likely to be capped since there are no continuous promotions after a while. Here’s one such story: Don’t pressure your manager, just perform No wonder only a very small number of working professionals could ever afford a RM1,000,000 property in Malaysia. Work harder, work smarter so that we can rise up faster. For parents, perhaps can help by not cultivating a habit of having lots of pocket money to spend? At the same time, INVEST.
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written on 26 Aug 2017
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