Sunday, October 11, 2009

What happen after Automatic Saving ?

Once you have Automated Saving System or ASS setup and running for a while. ( I bet not many of you yet ) You may wonder, "What a crap! I am not financially free yet!"

Thanks to a case study reminding me to move on after ASS is setup. Also inspired by a silent guru - Meshio - somehow some reason I started scratching on a piece of paper when I review that case study. So in short, this may represent what happens after ASS ...

  1. Choose an account that gives highest interest you can find for your ASS account
  2. Decide how much emergency fund you need in your ASS ( usually in number of months or years of your monthly expenses )
  3. Once achieve the emergency fund amount, the overflow should goes into investment
  4. Your investment potential return should be significantly higher than your ASS return
  5. move the emergency fund to FD, Bond Fund or Money Market Fund if interest is higher than your ASS account.
  6. Continue looking, learning, categorizing and revising until your investment return is Passive and higher than your active income.
Finally the most important one #7, comes buy me a bottle of wine and tell me how MalPF can be improved based on your experience.

God did rest on Sunday didn't he ?