How a Malaysian employee with salary RM4k a month becomes a millionaire without doing anything

The answer is.....................

Time and EPF!!!

I have been thinking of this for a while. As a 25 year old kid earning RM4k a month, I contribute around RM350++ to EPF monthly, then my employer contributes another RM350++, I end up saving around RM700++ a month or RM8400++ a year.

Lets say I constantly contribute RM8400 a year to EPF for 35 years (I'll be a 60 year old cranky grandpa), and EPF annual dividend is 6%:

RM8400(1.06^1+1.06^2+1.06^3+...............1.06^34+1.06^35)= approx RM1 million

Presto! I'll have RM1 million in my EPF account! Without me doing anything active. Of course if my salary increases and I contributed more to EPF as time goes by, it won't take 35 years for my EPF account to accumulate to RM1 million.

If someone decides to put RM700 monthly under his pillow for saving, hoping to save enough to be a millionaire:

RM1,000,000/RM700= 1428 months or 119 years!!! (Only your skeletons will be left to enjoy the status of being a millionaire) Once again we can clearly see the power to compounding interest (6% dividend by EPF vs 0% dividend under the pillow).

Want to be a millionaire faster? Then you'll need to put extra effort to find investment which can give you a higher yield then EPF's 6% and to save more than RM700 a month.

For example, if someone saves RM2384 monthly in an investment yielding 10%, he can accumulate RM1 million in 15 years.

Others who wants to be an instant millionaire can buy some Indonesian rupiah or Japanese yen.