Do you feel broke most of the time? Many people do. 
In a recent study, 69% of respondents think that they have not prepared enough for their retirement, nor started to prepare for it.
If you are 40 years old, and you plan to retire when you turn 60. Assuming the average human lifespan is 85 years, you will only have 20 years of time to save money for 25 years of post-retirement life.
For example, if you have $50,000 of savings now, and you would like to have $1,000 of spending money per month after you retire, how much money do you need to save?
Assuming a 5% annual return on your current savings, and a 3% of inflation rate; you will need to save $724 per month, and accumulate a total fund of $434,319 when you turn 60 years old.
But if you start saving when you are 30 years old, $439 per month (39% lesser compared to $724) is all you need to hit the figure.
Therefore, the key is to start saving money early.
People may think that their current income is low, and would start to save when they have extra income. In fact, the crucial point about saving is not the amount of money you put into the bank account, but how soon you can start saving.
You may start by saving $1 every single day. Most people lack of persistency to save money every month because they have set their saving targets way too high. Reducing the amount you plan to save every month and lengthen the duration will not only reduce your burden, but also make savings goals easier to achieve.
By making saving an easy habit, you may gradually increase the savings amount overtime.
Besides picking up the habit to save, you need to learn how to make more money out of your savings. Most of the money savers have established good saving habits but unclear about appreciation. You can easily estimate an investment’s doubling time by using a simple calculation technique called the “Rule of 72”.
For instance, if you were to invest $10,000 with compounding interest at a rate of 1% per annum, the rule of 72 gives 72/1 = 72 years required for the investment to be worth $20,000.
Similarly, with compounding interest at 10% per annum, it will take slightly more than 7 years (72/10 = 7.2) to double the initial investment.
Another factor to pay attention to is the inflation rate, where general level of prices of goods and services increase over a period of time. From 2008 to 2009, the average inflation rate in Malaysia was 3.04 percent. With the current Fixed Deposit (year 2010) interest rate per annum at 2.85 persent, you are in fact losing 3.04-2.85 = 0.19% of your money in terms of purchasing power if you keep your money in the Fixed Deposit.
This is exactly where people start to think that they are rich. The figures in their bank statement shows that they have more money, and therefore willingly to spend more on their daily expenses, move into bigger house, getting a better car, etc. However, in reality, they end up spending more (and end up poor) because the purchasing power of their money reduced!
Therefore, to reach the financial independence state (some called financial freedom), learning to invest and sustain growth in monetary sense is crucial.
No one was born with investment skills – the wealthiest group of people went through the same process before they achieve financial freedom – by learning to invest.
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