This article is reproduced with permission from Normandy Advisory Services Sdn. Bhd (Licensed Investment Advisor) 15th Floor Menara Multi-Purpose, No 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur Tel : 03 - 469 5560 Fax : 03 - 294 5561 This article is copyright and no part of it may be reproduced in any form without the prior consent of Normandy Advisory Services

	Very often investors wish that they will receive something with little or no effort. Money like success does not come easy, money will not "drop" on your lap. One has to go and look for it, unless he or she is one of the lucky few who inherited a lot of money or won the lottery. But, what are the chances of striking it rich and making millions? Even if an investor is one of the fortunate few who strike it, he or she has to be able to keep it. Often people who are fortunate enough to strike lottery end up wasting most of the money in a short space of time and soon find that they end up no richer than they were before. Without careful planning, whatever an investor has will soon be gone. Why should one need to save you may well ask. An investor may have enough now and he or she cannot take it with him or her when he or she goes, so why bother? Unless one has a crystal ball in front of him or her and can see the future very clearly, having some savings is a major necessity. One needs to save for "rainy" days especially: during illness for the children's education to start or expand a business to buy a house/settle the loan for wedding expenses to buy a car upon retirement for a holiday for unforeseen circumstances, emergencies and in fact, for almost anything in life The situation becomes more critical when the investor is advanced in age and no longer has the ability to generate and accumulate as much income as before. Assuming the investor retires at 55, and expects to live another 25 years after retirement. Without a fixed regular income to support you what do you live on? If the investor requires a monthly income of RM1,000 over the next 25 years, then he or she will require a lump sum of RM158,425 when he or she retires at 55 (see Table 1) assuming inflation is at a constant rate of 4% per year, an investment rate of return of 10% p.a. on the lump sum. Table 1 Annual Income (RM) Lump Sum Amount at Age (RM) 1,000 2,000 3,000 4,000 5,000 158,425 316,850 475,276 633,701 792,126 Table 1 treats the lump sum as an annuity, i.e. at the end of 25 years the investor will have no capital left.