Two Gears To Generate RM1 Million Upon Retirement

So you have a target you want to achieve. What can you do or what are the steps that can be taken to get to your objective?

This may sound elementary and obvious, but there are only two categories you can work on. Increasing income and reducing expenses.

To increase income, there are generally four things. Firstly it would be investing your money for more returns. Secondly it could be renegotiating your current salary. However if that is not possible then you could consider switching jobs to a higher paying role or into a higher paying industry. Finally, if you have the capacity, a side gig or part-time job could supplement your income greatly depending on what role you manage to obtain.

On the other side of the coin, there’s reducing expenses. I like to divide them into three categories for easier management. The categories are big-ticket expenses such as your annual holiday, monthly commitments such as instalments or subscriptions, and daily expenses which is what you spend on a more frequent basis.

The key takeaway for today is that to achieve your target, be it 1 million or something of your choosing, one can either earn a higher income or decrease expenses. That being said, these two usually go hand in hand because if you don’t earn enough to begin with, it is difficult to reduce expenses.

At the end of the day, we need to strike a balance between the two sides. There’s no point in reducing expenses so much until it negatively affects your health. It is also not good to take on too many jobs and deprive yourself of good sleep. I’ll delve into more details for each category in the future.