A million ringgit will be completely exhausted in time unless you put the money to work and generate some returns though investments.
The concept of becoming a millionaire resonates with most people. It is literally a dream come true where you can enjoy a comfortable life without working anymore.
As it turns out however, investing the million ringgit to generate even an average return can be enough to help you splurge thousands of ringgit every month for the rest of your life. For example, if we have a monthly budget of RM1,634, we would set aside RM19,608 to spend in the first year and invest the remaining balance of RM980,392.
This example is a useful demonstration of the power of investing. While not investing the million would allow a person to spend only about RM1,000 per month for 50 years, merely generating 3-7% of annual return helps increase this budget to RM2,000 to RM4,000. This is because of a concept called compounding returns.Investing allows your money to earn more money for you, resulting in an exponential growth where each ringgit you invest generates additional returns in the future.
In general, we recommend mixing your investments with some high-risk/high-return investments like stocks with less risky alternatives like bonds.
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