Roadmap To Financial Freedom Ebook With Cover

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Advance Praise for
Roadmap to Financial Freedom

The Ultimate Guide to Achieve Financial Freedom
“Roadmap to Financial Freedom is an indispensable asset. At last,

here’s a book on financial freedom that we can all understand and
apply.”
Carol Yip, Author of Money Rules & Smart Money User
"As Yap Ming Hui has revealed, financial freedom is not the
prerogative of the rich alone. This book is a must read for anyone
who wants to optimise his or her financial needs."
Charles Raj, Editor of Malaysian Business
“Thumbs up to Yap Ming Hui for making Roadmap to Financial

Freedom such a worthwhile book. It is a practical guide for people
who seek to preserve what they have worked so hard to build.”
Lim Ee Young, Executive Director of Yee Lee Corporation

Bhd
“Well-organised and practical.”
Lim Yong Keat, Co-founder of ICP Bhd and IJM Corporation

Bhd
I
“An excellent book for everyone who wants to find out how their
future cashflow needs for their children’s education and retirement
will be affected by the choices they make today with regards to their
income, savings and investment returns. ‘Syabas’ to Yap Ming Hui
for putting together this holistic and practical guide that features
lots of real life cases.”
Milan Doshi, Author of How You Can Get Rich From The
Property And Stock Markets
“In a world where wealth management is becoming more complex,

Yap Ming Hui shows how to understand and get the most from your
accumulated wealth.”
Predeeben Kannan, Editor-in-Chief of Smart Investor

Malaysia
“I’ve known Yap Ming Hui for years and, in his new book Roadmap
to Financial Freedom, he looks at the concept of financial freedom
from a unique angle, which taught me great new skills! I particularly
enjoyed Yap Ming Hui’s statement: “… a better lifestyle is not
necessarily a more expensive lifestyle.” In economic terms each
of us should seek to maximise the ‘utility’ value derived from each
ringgit spent. The utility you will gain from purchasing, reading, re-
reading and studying this book will, undoubtedly, be high.”
Rajen Devadason, Co-author of Financial Freedom and CEO of

RD WealthCreation Sdn Bhd
II
“Roadmap to Financial Freedom is spot on helping you to become
an effective CEO of your personal wealth.”
Raymond Chew, Founder & Managing Director of POS Ad Sdn

Bhd
“Roadmap to Financial Freedom is an impressive and much-

needed book. The case studies provide both practical guidance and
sage wisdom.”
Renesial Leong, Author of Property Jewels & Your Tenants, Your

Jewel
“Roadmap to Financial Freedom is essential reading to help

people achieve their financial freedom.”
Richard Wong, Chairman & Chief Listener of Vistage Malaysia

Sdn Bhd
III
“Yap Ming Hui has written another invaluable book - Roadmap
to Financial Freedom – which has three unique features. Firstly,
a detailed calculation with a graphical output showing you what
will happen if one is retired, or disabled, or divorced, based on the
individual’s present net worth, income and expense. Secondly, it
enables us to do future planning e.g. whether we need to earn a
higher income, or need to reduce expenses, or need to retire later in
order to have a secure retirement and not outlive the funds available
at the time of retirement. Thirdly, everyone’s situation, needs and
aspirations are different and Yap Ming Hui has given us many
different scenarios on how the Roadmap to Financial Freedom
can help each of us to achieve our desired lifestyles by planning
ahead.”
Dr Soo Chee Siong, Consultant Cardiologist & Medical Director

of HSC Medical Center
“Yap Ming Hui once again shows us more real examples of

managing our finances better in this latest book. Very relevant to
the average income earner!”
Tay Kay Luan, Director for Asean & Australasia of ACCA
“A terrific primer that will help readers to define their own financial
freedom. Yap Ming Hui empowers his readers by rendering the
complex world of wealth management easy to understand.”
Grand Master Yap Cheng Hai, Feng Shui Master of Yap Cheng
Hai Academy
IV
Roadmap
to
Financial
Freedom
The Ultimate Guide to Achieve
Financial Freedom
V
VI
Roadmap
to
Financial
Freedom
The Ultimate Guide to Achieve
Financial Freedom
_______________________
YAP MING HUI
VII
Published by:
Whitman Independent Advisors Sdn Bhd (526027-A)
No. 19-2, Level 1, Block E1,
Jalan PJU 1/42, Dataran Prima,
47301 Petaling Jaya,
Selangor Darul Ehsan, Malaysia.
Tel: 03-78808359 Fax: 03-78808615
E-mail: enquiries@whitman.com.my
Copyright © 2018 by Yap Ming Hui

ISBN : 978-983-41724-6-6
Second Edition (Aug 2018)
All right reserved. No part of this publication may be reproduced, translated, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without the prior permission of the copyright owner.
Disclaimer
While all efforts have been made to make the information contained in this work accurate,
the publisher, authors and editors are not responsible for the results of any action taken on the
basis of these information, nor for any errors or omissions. The publisher, authors and editors
hereby expressly disclaim all and any liability to any person using the information in this work
as a basis for making decisions or taking action. The publisher further suggests that the advice
of the appropriate professionals be sought in the event of any vagueness.
Perpustakaan Negara Malaysia Cataloguing-in-Publication Date
Yap, Ming Hui, 1970-

Roadmap to Financial Freedom .
Yap Ming Hui.
ISBN: 978-983-41724-6-6
1. Finance, Personal. 2. Financial security. I. Title
332.024
VIII
ACKNOWLEDGEMENT
This book attempts to introduce the idea of Roadmap to Financial

Freedom in Malaysia. Some of the content of this book are made
up of articles published separately over the last two years. I owe a
debt of gratitude to many newspapers and magazines that provided
an outlet for my ideas. However, a special mention must be given
to New Straits Times and Sin Chew Daily.
I would also like to express my deepest gratitude to many people

with whom I’ve worked to produce the ideas that are presented in
this book, as well as for the support needed to complete it.
To Choy Har, my wife, without whose intensity of purpose, passion

to the belief and love for the values, both in our business and in the
rest of the life we share together, neither this book, our business,
nor our marriage would have been possible. Choy Har has been
supportive, wise and optimistic. She has been an ideal wife,
providing encouragement and support even in the circumstance
where I almost give up on myself. She has been a true partner and I
consider myself fortunate, indeed, to be married to her.
IX
To my parents, who have given me love and always been there for
me.
To Xin Ru, Yin Ru, Zhe Yen and Zhe Yi, my children, who have
given me more than they have received, in ways only a father can
truly know. They give me simply the most joy I have ever known
and a reason to spend every moment of my life to be the best I can
be.
To all my valued clients over the years who have put their trust in
our integrity and services. In the process, they taught us at least as
much as we taught them about it takes to optimise wealth. A wise
philosopher once said that “All theory is autobiography,” and many
of my ideas and views have been formed from my own experience
in working with many wise clients. They have provided insights
and suggestions for how we could apply our observations of the
wealth management. They are all instrumental in our success as a
firm as well as with this book.
To all my associates and colleagues at Whitman, present and past,

who believe in my ideas and in me as a person. Their commitment to
the ideas in this book, as well as to our clients, have given meaning
to the words by living them, even when it was impossible. Their
efforts are appreciated by us and most importantly by the clients
who are fortunate to have worked with them.
To my professional counterparts in the US, Australia, Hong Kong

and Singapore who have selflessly shared their professional
experience and technology with us. They make our job rewarding
X
and fun. I’d love to name names, but there are just too many, and I
don’t want to risk offending by virtue of omission.
I have participated in Vistage for the past 6 years. My TEC chair,

Choong Weng Kong, has nurtured and developed my entrepreneurial
instincts and spirit through his dedicated and effective approach to
managing one’s professional and personal life. Thanks, coach, for
your continually support and inspiration.
Writing this book is a humbling experience. I share my ideas out to

you, hoping you will take what applies and achieve your financial
freedom. Thanks, to all my readers for taking your time to read my
words.
Thank you all.
XI
XII
Contents
ACKNOWLEDGEMENT IX
INTRODUCTION XVII
PREFACE XXI
Chapter 1:
What is Financial Freedom? 1
Chapter 2:
Defining Your Financial Needs and Wants 9
Chapter 3:
The 5 Essential Elements of Financial Freedom 15
Chapter 4:
The Roadmap to Financial Freedom 43
Chapter 5:
The Holistic Approach of the Roadmap to Financial
Freedom 53
Chapter 6:
The Benefits of the Roadmap to Financial Freedom 59
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Chapter 7:
What Happens When You Manage Wealth Without a
Roadmap to Financial Freedom? 69
Chapter 8:
Harry – Zealous Over-Saver 75
Chapter 9:
Jerry - Working Too Hard to Retire Early 85
Chapter 10:
Harold – Over-Spending 95
Chapter 11:
William - The Robert Kiyosaki of Malaysia 105
Chapter 12:
Esmond - Start Planning Early
(The Early Bird Catches the Worm) 115
Chapter 13:
Peter - Optimising his Family’s Financial Security 123
Chapter 14:
Debbie - Single Mother Seeks Financial Freedom 133
Chapter 15:
Tony - To Work or Not to Work? That is the Question 143
Chapter 16:
Philips – Tired of the Rat Race 153
Chapter 17:
Michael – Tertiary Education is a Priority 165
XIV
Chapter 18:
Brad - Can’t Afford to Retire 175
Chapter 19 :
Your retirement money should not be sacrificed for your
children’s education 187
Chapter 20:
Roadmap to Financial Freedom in Holistic Wealth
Management 193
Chapter 21:
Frequently Asked Questions 203
About YAP MING HUI 215
About Whitman Independent Advisors 219
XV
XVI
INTRODUCTION
What does financial freedom mean to you?
Does financial freedom mean being able to retire early and living
well into your eighties? Does it mean living in a comfortable
bungalow with a four-car garage? Does it mean being able to send
your kids abroad for a six-figure education? Does it mean being
able to take a trip abroad every year? Does it mean all of these
things or something entirely different?
As you can see from these questions, financial freedom means

different things to different people. This is because each person has
different needs and wants.
Once you have identified what you need and want, it’s time to move
on to the next step: figuring out how to get there. Or to put it another
way: now that you know your destination (your wants and needs),
how do you plot your route there? This is where most people fail,
because they don’t map out their journey. In real life, would you try
getting from Point A to an unfamiliar Point B without the help of a
map or GPS? Of course not!
XVII
This is where the Roadmap to Financial Freedom is a must. It can
help you map out your personalised and individualised journey to
financial freedom. By using the Roadmap, you won’t get lost. Or
take a detour. Or to put it in financial planning lingo: by plugging
in your personal financial details and personal needs and wants into
a financial model, you too can create your very own roadmap to
guide you on how best to balance your optimum wealth with your
optimum financial needs and wants.
You might wonder if you can achieve financial freedom with a

modest income and average assets. The answer is simple – ‘Yes, you
can’. Unlike my other books, the Roadmap to Financial Freedom is
targeted at helping all Malaysians achieve financial freedom. True,
I had previously made a name for myself as the premier financial
coach to the multi-millionaires of Malaysia. Using the skills and
experience that I accumulated for more than a decade, I created
the Roadmap to Financial Freedom, a solution that can be used by
all Malaysians to optimise their own personal wealth management,
regardless of their current wealth and assets.
To tell you the truth, the Roadmap came out of serendipity. I owe
the origins of the ‘Roadmap’ to the persistence of Debbie, a single
mother who called me out of the blue requesting financial advisory.
Initially, I turned her away despite her pleading because she didn’t
meet the minimum wealth threshold of RM2 million set by my firm.
Soon after I had a change of heart; shouldn’t I also be using my
skills and knowledge to help the less privileged, and not merely the
wealthy?
XVIII
And that’s how the Roadmap to Financial Freedom was born.
Together with my team at Whitman Independent Advisors, I
tweaked some tools in our proprietary Family Office solution to
create a financial solution that could be tailored and adapted to meet
the different circumstances of Malaysia’s diverse people.
In this book, you will see how the Roadmap has helped Malaysians
of different ages with different income, asset and employment levels.
Malaysians like Debbie, the single mother whose impassioned
pleading started it all, and George, who like many Malaysians
is clueless about his current financial health. Philip and Brad –
businesspeople who were insecure about retirement – now have a
defined path for when they can retire and how they will enjoy their
golden years, thanks to the Roadmap. The Roadmap can also help
you see if you’re spending beyond your means – like Harold – or
saving too much and depriving your family of vacations and little
luxuries – like Jerry and Harry. The Roadmap can also help you
work out how much you need to put aside each year to provide
that dream college education for your children, much like Michael.
I’m sure you’ll see many of your hopes and dreams mirrored in
these true-life cases. Of course, to protect the privacy of the people
in question, names and details have been changed but the genuine
flavour of their financial challenges remain intact.
These people – who are Malaysians from all walks of life like you
and I - have discovered that they can achieve immediate peace of
mind, and eventually the realisation of their financial goals by using
the Roadmap, which I believe is the ultimate guide to financial
XIX
freedom. If you want to find out if you can achieve financial freedom
now, please read on. You might find that the world could very well
be your oyster, today.
XX
PREFACE
It has been 8 years since this book was first published in 2010.
I originally wrote this book to help all Malaysians achieve financial

freedom. And I am grateful that the Roadmap to Financial Freedom
has since become one of the best-selling personal finance books in
Malaysia.
In this updated version, I have added two new chapters to enrich

your knowledge. One is a chapter on holistic wealth management,
a subject that I am very passionate about. By sharing with readers
like you, the essence and spirit of holistic wealth management, you
will begin to see where Roadmap to Financial Freedom stands in
the big picture of wealth management and how it can play a pivotal
role in developing your ensuing investment strategies to achieve
financial freedom.
The second chapter is an article first published in the Star that

highlights the popularity of parents sending their children to private
and international schools for their primary and secondary education.
In the article, I demonstrated how readers could use the Roadmap
XXI
to Financial Freedom to evaluate the impact of the additional

expenses to their financial freedom goals. In other words, Roadmap
to Financial Freedom can be used to assess your affordability in
sending children to private and international schools.
Since the publication of the book, I have also received many requests
from readers to make Roadmap to Financial Freedom available to
them as a D-I-Y tool. What if I tell you that financial freedom can
now be at your fingertips?
I am thrilled and excited to announce that we have developed a

mobile application of the Roadmap to Financial Freedom. It is
called iWealth. It is available to download for FREE from Google
Play or Apple store.
With this tool, you can now gain a deeper understanding of what
it takes for you to achieve financial freedom. It is just like all the
case studies that you will read in this book but better, because you
become the star of the mobile app, and you can use it to develop
your own personalised roadmap to financial freedom!
If you are serious about achieving financial freedom, you would

need a Roadmap to Financial Freedom. Read the contents of this
book thoroughly and use iWealth to your advantage. Let this book
and iWealth serve as the two most important guide you would ever
need on your journey in achieving financial freedom.
XXII
XXIII
Quick Guide to Roadmap to Financial Freedom Cases
Name Age Employment Status
1 George 36 Employee
2 Harry 36 Employee
3 Jerry 38 Business Owner
4 Harold 39 Employee
5 William 45 Business Owner
6 Esmond 33 Employee
7 Peter 36 Employee
8 Debbie 42 Employee
9 Tony 54 Employee
10 Philips 46 Business Owner

11 Michael 41 Business Owner
12 Brad 53 Business Owner
The Roadmap to Financial Freedom stories referenced in this book are

adapted from the experiences that the author has had in addressing and
serving the needs of various clients. For the purpose of privacy and
confidentiality, however, certain specific circumstances regarding the
clients’ financial matters and the planning related thereto have been
modified accordingly.
XXIV
Annual Family
Sex Main Issue Page
Income (RM)
220,000 Male Clueless on current status 43
330,000 Male Over-saving 75
396,000 Male Stretching to retire early 85
480,000 Male Spending too much 95
400,000 Male Too many properties 105
96,000 Male Young family 115
240,000 Male Under-insured 123
60,000 Female Single mother 133
Dilemma: to work or not to
300,000 Male 143
work?
270,000 Male Tired of the rat race 153
240,000 Male Children's tertiary education 165
360,000 Male Preparing for retirement 175
XXV
XXVI
Chapter 1:
What is Financial Freedom?
When you ask people what financial freedom means to them,

chances are that you’ll get different answers from different people.
Some may say that financial freedom means having RM1 million
in their bank account. Some may say that financial freedom means
being free of debt. Some may say that it means having enough
money to do whatever you like.
I would like to redefine financial freedom as: “An optimum financial

position whereby your wealth is optimised to match your optimum
financial needs and wants.”
Based on this definition, there are actually two main components

to manage in your effort to achieve financial freedom. The first
component involves the optimisation of your wealth. The second
component involves the identification and management of your
financial needs and wants. However, financial needs and wants
should not be viewed only in the financial context, but in the higher
context of your life. You need to identify your financial needs and
1
wants that will give you a good life based on your definition. Doing
this helps you to stop chasing financial freedom as defined by the
society at large. For example, others might want to own a bungalow
with swimming pool, to drive a luxurious car, to wear only branded
clothes. You might want something else entirely. The second
component challenges you to define your own financial needs and
wants, and this will afford you real financial freedom.
Normally, most people understand and focus their attention and

effort on the first component, optimising their wealth. This is natural
because most people start out with few or zero financial resources.
They are very sure that they don’t have sufficient wealth to meet
all their financial needs and wants. As a result, they won’t bother to
really define their financial needs and wants in more details. They
will just focus their financial management on making more money.
That’s not entirely wrong. However, there is no way you can achieve
true financial freedom by just generating more financial resources
without considering what your financial needs and wants actually
are.
Why do I say that?
I would like to redefine financial freedom as:

“An optimum financial position whereby your
wealth is optimised to match your optimum
financial needs and wants.”
2
We must always remember money is only a means to achieve

an end. Money is only a means that we use to support an ideal
or good life that we want. The first component of your financial
needs and wants is the component whereby you translate your self-
defined good life into financial terms and measurements. So, how
can you achieve true financial freedom without using your self-
defined good life as the reference? Without defining your very own
financial needs and wants, it is very likely that you will mistake
other people’s definition of financial freedom for your own. That’s
why there are so many people out there who just want to keep up
with the Joneses.
Based on this definition, we can see that amount required to achieve

financial freedom will vary from one person to another because
different people have different needs and wants. Someone with fewer
needs and wants will require less money to achieve his financial
freedom. Someone with more needs and wants will require more
financial resources to achieve his financial freedom. Therefore, a
There are actually two main components to

manage in your effort to achieve financial
freedom. The first component involves the
optimisation of your wealth. The second
component involves the identification and
management of your financial needs and
wants.
3
multi-millionaire may not necessarily achieve financial freedom yet

if his needs and wants are more than what his millions can meet. On
the other hand, someone who is not a millionaire may still be able
to achieve financial freedom if his financial resources are more than
enough to meet his needs and wants.
The Key Steps to Financial Freedom
The following are the key steps for you to follow in order to achieve
your own financial freedom:
1. Define what a good life is for you
2. Find out the financial needs and wants to support your good
life
3. Test if you have sufficient financial resources to meet all
your financial needs and wants
a. If you have enough…

Congratulations! You are on your way to achieve your
own financial freedom. However, don’t stop there
because you haven’t achieved true financial freedom
yet. Next, you must make sure that your wealth is fully
optimised. Test again to see how you can optimise your
financial needs and wants with your optimised wealth.
There is no way you can achieve true financial

freedom by just generating more financial
resources without considering what your
financial needs and wants actually are.
4
You will only achieve true financial freedom if you can

find an optimum point whereby your financial needs
and wants are optimised to match with your optimised
wealth.
b. If you don’t have enough…

Find out ways to fully optimise your wealth. Re-look and
re-prioritise your financial needs and wants. Test again
if your optimised wealth is able to match your adjusted
financial needs and wants.
i. If it matches, congratulations. You have found the route

to your own financial freedom.
ii. If it doesn’t match, repeat step (3b) until you find the
optimum position whereby your optimised wealth
matches your optimum financial needs and wants.
As we can see, true financial freedom is not only about money or

financial management. It is also about the identification of optimum
financial needs and wants. Only when you can identify and manage
your optimum financial needs and wants, do you have a better
chance of achieving your own financial freedom.
We must always remember money is only a

means to achieve an end. Money is only a
means that we use to support an ideal or good
life that we want.
5
To repeat, financial freedom is about balancing your optimum

wealth with your optimum financial needs and wants.
If you lack sufficient wealth to meet your current financial needs

and wants, you can increase your wealth to meet your financial
needs and wants.
Alternatively, you can re-prioritise and optimise your financial

needs and wants to match your wealth.
To increase your wealth, there is a price to pay. You may have to take
more risks. You may have work harder, longer hours. Effectively,
you have to sacrifice more of your time, suffer more stress or worse,
overstretch your body. However, you may get to enjoy a more
expensive life style. I won’t say it is a better lifestyle because a
better life style is not necessarily a more expensive life style.
On the other hand, to reprioritise and optimise your financial needs

and wants, there is also a certain price to pay. You may give up
some aspects of your lifestyle. You may cut down on some of your
expensive hobbies. However, you get more time for yourself and
family, less stress and improved health.
Without defining your very own financial needs

and wants, it is very likely that you will mistake
other people’s definition of financial freedom
for your own.
6
Which you choose is entirely up to you. It depends on what you

think is more important to you. It depends on how you define a
good life.
My clients fall at both ends of this spectrum. Francis, a business

owner, enjoys the luxurious life. He knows that he has to work
very hard and take a lot of risk to support his expensive lifestyle.
However, he is happy to do so.
Joshua, also a business owner, thinks differently. He knows that he

will need to spend a lot of time and handle more stress to make more
money. He prefers to lower his financial needs and wants to match
his financial resources. For Joshua, a good life is about having more
time for himself and his family with peace of mind. He knows that
if he has to make more money at the expense of his time and peace
of mind, he will not lead a good life anyway.
There is no right or wrong in each case. Francis decided to increase

his wealth according to his own and unique concept of a good life.
Joshua decided to reduce his financial needs and wants also due
to his very own and unique version of good life. By challenging
ourselves to make this optimisation and trade-off, we understand
and identify what is truly a good life for our own selves.
Financial freedom is about balancing your

optimum wealth with your optimum financial
needs and wants.
7
The lesson? Everybody will have their own and unique financial
freedom goal depending on their financial needs and wants. Financial
freedom is never about becoming a millionaire or billionaire
like most people would assume. In fact, the biggest challenge of
achieving financial freedom is about finding out what financial
freedom really means to you. Once you figure out the meaning,
the question of how to achieve financial freedom becomes less
difficult.
8
Chapter 2:
Defining Your Financial Needs and Wants
In order to achieve financial freedom, you must know clearly what

are your financial needs and wants in life. Your personal financial
management should be making a healthy contribution to the
realisation of the life that you think will make you happy.
Contrary to most financial planning practices, I would not suggest

you define financial needs and wants before defining what a good
life means to you. If you expect your money to contribute to your
good life but you’re not clear about what that good life is, how can
you possibly get there?
In order for your money to be a means to attaining your good life,

it is vital that you identify and articulate your very own definition
of the good life. This must not be society’s version of the good
life. Your self-defined good life is your innermost driving force. It
gives you a sense of direction and purpose. It motivates you to your
highest levels of energy, and puts you at your best. Your financial
needs and wants are about supporting a good life that is consistent
9
with your core values and beliefs and this definition is the essential
starting place for any money management. Your own definition of
the good life is there, within you. But most of us simply haven’t
identified it.
How can we define the good life? As a guide, Richard J. Leider and
David A. Shapiro said in Repacking Your Life that the good life is
about:
“Living in the place you belong, with the people you love, doing
the right work, on purpose.”
According to them, a good life is integration – a sense of harmony

among the various components in one’s life. For example, the place
you live should provide adequate opportunities for you to do the
kind of work you need to do. That work gives you time to be with
the people you really love. Your deepest friendships contribute to
the sense of community you feel in the place you live and work.
The glue that holds the good life together is purpose. Defining your
sense of purpose – the reason you get up in the morning – enables
you to continually travel in the direction of your vision of the good
life. It helps you focus on where you want to go and discover new
roads to get there.
By challenging ourselves to make this

optimisation and trade-off, we understand
and identify what is truly a good life for our
ownselves.
10
Your good life could be similar, or it could be different. Only after

defining what a good life means to you can you move on to identify
the financial needs and wants required to support your good life.
The following are some of the questions you can ask yourself to
identify your financial needs and wants in life:
1. How much would I need to maintain my current lifestyle?
My desired lifestyle?
2. When would I want to retire and how much income will I
need to maintain my desired retirement life style?
3. How much tertiary education do I want to provide for each
of my children? When will I need the money?
4. How much do I need to finance my annual vacations? How
about my vacations during retirement?
5. How much would I need to buy my dream house?
6. What are the other financial wants that I would like to achieve
and how much they will cost me at that time?
In fact, the biggest challenge of achieving

financial freedom is about finding out what
financial freedom really means to you. Once
you figure out the meaning, the question of
how to achieve financial freedom becomes
less difficult.
11
A Sample List of Financial Needs and Wants
Below is a client’s list of financial needs and wants as an example:
Based on my definition of the good life,

1. I would like to maintain my current family lifestyle of
RM120,000 per year.
2. I would like to retire at 50 with an annual income of
RM96,000.
3. I want my wife to retire earlier at age 35.
4. I would like to provide RM300,000 each to my children for
their tertiary education expenses.
5. I would like to provide RM20,000 annually for my vacations
and I hope to double it to RM40,000 per annum when I
retire.
6. I am happy with my current house. I will not need to buy
another home.
When you develop your list of financial needs and wants, don’t
be restricted by your current financial resources or the money
you have now. You should focus purely on defining the financial
needs and wants that will really provide the good life you want.
That’s what it means to define the financial freedom goals that you
really want in life. When you do this, you develop a strong sense
of attachment to the financial freedom goal you set because it is
a goal that means a lot to you. When you do this, you will not
blindly follow the common financial freedom goal of just wanting
to become a millionaire or a multi-millionaire.
12
Since each of us will have our own financial freedom goal, each of
us will also have our own code for our financial freedom. Like our
fingerprints and DNA, this code is unique to each of us. We need to
find out what combination of spending, return on investment (ROI),
inflation, time and saving is the right code for us to achieve our own
financial freedom.
Have you discovered your own unique code to financial freedom?

If you have, congratulations. You are on the right track to achieving
your own financial freedom. If you haven’t, you had better start
cracking your code now before it is too late. Deciphering your code
too late will cost you time. Without the essential element of time, it
is going to be very difficult, if not impossible to achieve your own
financial freedom.
Visit www.whitman.com.my to learn more ways to crack your own

code to financial freedom.
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Chapter 3:
The 5 Essential Elements of Financial
Freedom
In order to achieve financial freedom, you must at least understand

and manage the 5 essential elements of financial freedom effectively.
Without knowing how to manage these 5 elements effectively,
financial freedom will only be a dream, not a goal, for most people.
Therefore, it is very important to understand what these 5 essential
elements are and how to manage them.
Spending
Spending is one of the 5 essential elements of financial freedom.

Unless you understand the impact of your spending on your
achievement of financial freedom, it is unlikely you will achieve
your financial freedom. We need to understand that the more we
spend, the less we save. The more we spend, the more money we
will need to maintain our lifestyle during retirement. Your spending
level affects your needs and wants, which is the first component of
the definition of your own financial freedom.
15
Inflation
Inflation is another essential element that will make or break your

planning and attainment of financial freedom. Why? Inflation will
not only deplete your accumulated capital, but also reduces your
purchasing power. Inflation is one of the most challenging elements
to understand and manage because it is intangible and essentially
invisible. You can only feel its impact over an extended period of
time, say 10 years or more. The fact is that many of our important
financial planning goals like retirement planning and children’s
tertiary education planning have a very long time horizon. If we
do not invest to grow our money faster than the inflation rate, our
savings will shrink 10 or 15 years later, when we need to use our
savings. As a result, we will have to save much more than what we
presume we need. Throughout my professional career, I have seen
many people who fail to take into account the real and damaging
impact of inflation on their financial position. If you think that you
understand and know inflation, think again.
ROI
Compound interest helps offset the negative effect of spending and

inflation in order to achieve financial freedom. The higher the rate
of your return on investment (ROI), the better you can make your
wealth work for you. Conversely, if you don’t achieve a certain
ROI for your money, your efforts to achieve financial freedom will
be very much discounted by the impact of inflation and spending.
However, there is no free lunch. The higher the ROI you target, the
higher the risk that you may lose your money. Beware!
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Time
Time is another essential element to consider and integrate in your

financial freedom planning. Based on our definition of financial
freedom, we need to clarify the times when our financial needs
and wants appear. For example, in which year will you need to
finance your first child’s tertiary education? In which year will you
need to buy your house? In addition, you need to know the time
horizon that you have to accumulate your financial resources. Is
your horizon short-term, medium-term or long-term? Only then
will you be able to structure your investment properly to achieve
your funding targets.
Saving
The importance of saving in achieving financial freedom needs no

further emphasis. The more we save, the less we spend. As a result
we have a less expensive lifestyle to maintain when we retire. In
addition, the more we save, the less ROI we will need to achieve the
same accumulation target. For example, if you can save RM16,000
per year, you will need to achieve an annual ROI of 18.3% to
accumulate RM1 million in 15 years’ time. However, if you can
save RM36,000 per year, you will only need to achieve an annual
ROI of 8.3%.
THE IMPACT OF SPENDING
Sir John M. Templeton, the founder of one of the largest investment

funds in the world, once said: “Those who are thrifty will grow
wealthy, and those who are spendthrifts will become poor. During
17
my first 15 years after college, I made a game of adhering to a

budget that included saving 50 cents out of every dollar earned.”
The discipline of being able to control our spending and

save consistently would make or break our success at wealth
optimisation.
Case Study
Many years ago, I met Eugene, the managing director of a multi-

national corporation. Back then, in his late 40s, he was earning
RM600,000 per year. Given his hefty income, I expected him to
have accumulated a substantial amount of wealth over the years.
However, I found that his total assets were less than RM2 million
while his net worth was less than RM1 million. More than 70% of
his net worth was from EPF savings.
Where had all his income gone? Eugene hadn’t a clue. Every
month, he and his family just spent his income on maintaining their
lifestyle. At the end of the month, there was nothing much left to
accumulate and invest. Every time he received a salary increment,
he just increased his spending accordingly. This is a classic example
of excessive spending.
In order for your money to be a means to

attaining your good life, it is vital that you
identify and articulate your very own definition
of the good life.
18
The Problem
Eugene is definitely the classic victim of Parkinson’s Law, which

states that your expenditures rise to meet your income.
Let’s say that your average starting salary when you began working
was RM1,500. For many of us, that’s barely enough money for
monthly bills, and none for saving. However, we anticipate that
when our income increases in future, we’ll be able to save. After a
few years, our income rises to RM3,000 per month. Do we really
end up saving more? No. Instead, expenditures actually rise along
with incomes. As a result, you don’t save much. The same thing
happens when your income increases to RM5,000, RM10,000,
RM15,000 or more. In Eugene’s case, his expenditures rose to
match his income of RM50,000 per month.
When you suffer from an excessive spending syndrome, your

wealth optimisation efforts will face the following problems:
A. The More We Spend, The Less We Save
The first problem is simple and obvious. The more we spend, the
less we can save. As a result, we have fewer resources for investing
and growing our wealth.
Your financial needs and wants are about

supporting a good life that is consistent with
your core values and beliefs and this definition
is the essential starting place for any money
management.
19
B. The More We Spend, The More We Need to Sustain During

Retirement
When you spend the bulk of your income to maintain your current
lifestyle, you create a huge challenge: that of maintaining your
lifestyle in the event that your active income ceases. Take Eugene.
He spends almost all of his take-home income almost every month
to maintain his extravagant lifestyle. Should he retire, he will have
to maintain his retirement lifestyle of RM30,000 per month without
an active source of income. This will present a huge challenge.
However, imagine if he were to control and reduce his living
expenses to RM20,000 per month. Not only will he have an extra
RM10,000 to save, he will only need to maintain a lifestyle of
RM20,000 per month instead of RM30,000 per month during his
retirement.
C. The More We Spend, The Higher The Rate of Return on

Investment (ROI) Needed
If we spend more and save less, we need to take more risk in wealth
accumulation planning. Let’s say you set a goal to accumulate
RM5 million (see Table 1). Assume you are 45 and plan to retire
at 60. If you can save RM180,000 per annum, you need to achieve
a return on investment (ROI) of only 8.3% of return. If you save
less at RM120,000 per annum, you need to achieve a higher ROI
of 13.4%. If you can only save RM50,000 per annum, you need
to achieve a ROI of 23.9% to achieve your goal of RM5 million.
Therefore, the less you save, the higher the ROI required to achieve
your accumulation target. As a result, you will need to take a higher
20
investment risk to achieve the same goal. When we do not need to

achieve a high ROI, we do not need to stomach too much risk and
volatility. The less risk we need to take, the more peaceful our life
will be.
Table 1: Wealth Accumulation Goal of RM5 Million in 15

Years’ Time
Rate of Return
Annual Saving
Required
50k 23.9%
80K 18.3%
100K 15.6%
120K 13.4%
150K 10.6%
180K 8.3%
Alternative Solutions
1. Acknowledge the danger of Parkinson’s Law - To avoid
the problem of excessive spending, you must be aware
of the impact of Parkinson’s Law. You need to know that
saving does not come naturally unless you make an effort to
control your spending. Unless you acknowledge the danger
of Parkinson’s Law, it is very difficult for you to see the
problem of excessive spending and start taking corrective
action.
2. Spend after you save (Pay Yourself First!) - The most
effective practice to avoid excessive spending is to spend
after you have provided for saving.
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Income – Savings = Expenses

NOT
Income – Expenses = Savings
By forcing yourself to save more, you would definitely have
less to spend. As a result, you are able to control your living
expenses and live below your means.
3. Conduct a life long cash-flow planning exercise – In order

to know your optimum lifestyle (living expenses) and the
savings required to support your lifestyle without active
income, you must conduct a life long cash-flow planning
exercise. This cash-flow planning exercise will project your
annual income and expenses until the last day of your life.
By doing this exercise, you can find out the living standard
that you can afford and determine the savings needed during
the years when you are earning an active income. As a result,
you can appreciate how challenging it is to sustain high living
expenses without an active income. It is imperative that you
recognise the urgency and importance of starting to save
now.
THE IMPACT OF INFLATION
If you throw a frog into a pot of boiling water, it will jump out.
But if you place a frog into a pot of lukewarm water and slowly
turn up the heat, the frog will not jump out. The frog stays in the
pot because its body can gradually adjust to the rising temperature.
However, when the water boils to an unbearable level, the frog will
22
die. This is what we call the boiling frog syndrome. Inflation is

no different. We have grown immune to inflation over the years.
However, that doesn’t mean inflation won’t hurt us financially if
we continue to ignore it. Inflation can definitely impact our wealth
optimisation success.
Case Study
50-year old Tim used to own and manage a successful chemical

material distribution company. Last year, he sold his company
to a multinational company for RM3 million and retired. Due to
bad experiences in stock market investing, he decided not to risk
his hard-earned money. Therefore, he put all his money in fixed
deposits to earn interest. Tim believes that he can live off the interest
earned from fixed deposits and eventually leave his capital of RM3
million to his children when he dies. Based on his own calculation,
the interest generated from fixed deposits per year should be about
RM120,000 (RM3 million x 4% annual interest rate). Therefore, he
believes that he can maintain a living standard of RM120,000 per
year for as long as he lives because his RM3 million will always be
there. Would you agree? What is the flaw in his retirement plan?
The Problem
Tim’s retirement plan is typical of wealth optimisation plans that

don’t consider the impact of inflation. Tim’s plan treats inflation as
if it is non-existent. He presumes that the RM120,000 in interest
generated by his fixed deposits will continue to be worth RM120,000
10 or even 20 years later. He also presumed that his RM3 million
will continue to be worth RM3 million 10 or 20 years later.
23
Here’s a very simple example to illustrate the impact of inflation

using a 6% average increase in the cost of living (inflation) and a
4% annual investment return.
Capital @ 6% Income @ 4%
Year
inflation Return
Now 3,000,000 120,000
12 years later 1,500,000 60,000
24 years later 750,000 30,000
36 years later 375,000 15,000
Let’s look at the middle column first. Note that if we start with RM3
million of capital and average 6% inflation, it takes only about 12
years for the value of the wealth, in today’s dollars, to decline by
50%. In other words, if you took RM3,000,000 and buried it in
your garden, then went back and dug it up 12 years later, assuming
the average inflation rate of 6% during the 12 years, your money
would be worth only half as much as in current dollars as when you
buried it. And every 12 years thereafter, its value would likewise
be cut in half. So, this is the first negative impact of inflation – it
destroys wealth. If Tim dies at 86, he would have left his children
with wealth worth RM375,000 instead of the RM3 million that he
originally planned.
For most of us, accumulating capital is only an intermediate step.

The real reason we invest is to provide income at some point in our
lives. Ultimately, we all want to replace our working income with
investment income. The only difference among us is when we want
to begin receiving that income. Some people want it right away like
Tim because they are already retired. Others won’t need it for 10,
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20 or 30 years. So, assuming income from your investment is your

ultimate goal, let’s look at what 6 % inflation does to investment
income over time. That’s the third column.
In Tim’s example, a 4% return on RM3 million invested would

yield RM120,000 annually. But at the same 6% inflation rate, the
purchasing power of that income in 12 years would buy only half
as much as it would today. In other words, if you can buy a cup of
coffee at RM1 today, it will cost you double (RM2) to buy the same
cup of coffee 12 years later. As a result, your RM120,000 income
can only afford you half of the current purchasing power 12 years
later. By the time Tim reaches 74, the purchasing power would be
cut in half once more. If Tim was fortunate enough to live to age
86, he would need to get by on one-eighth of the purchasing power
he had when he retired.
Inflation is a very serious problem. Although its severity goes up

and down, it never disappears completely (the water continues to
boil even though the frog doesn’t feel it). Inflation always cycles
back from low to high. In the long run, loss of purchasing power is
the greatest investment risk we face because like Tim, many of us
underestimate the impact of inflation.
Alternative Solutions
1. Acknowledge the impact of inflation – Change your
paradigm. Recognise the existence of inflation and understand
the damage it can do to your created wealth. Without seeing
the problem, you will never feel the need to take any action.
25
2. Identify the actual time horizon of your investment

portfolio - Many people think that their investment time
horizon is equal to the difference between their current and
their desired retirement age. So, if you are 50 and plan to
retire at 55, you’ll think that your investment time horizon
is 5 years. Therefore, you may fail to take inflation into
consideration in your retirement income planning because
you think that you have a very short time horizon. This is
a major mistake. The truth is that inflation continues well
beyond your retirement age. As a result, if you die at 80,
your actual time horizon is 30 years (80-50 =30).
3. Invest into inflation-hedged investment – Once you know
your actual time horizon, now you can afford to invest in
long-term investments that will grow faster than inflation,
like properties and equities. You don’t need to put your whole
capital into these investments. You can always structure
a balanced portfolio investment that will grow faster than
inflation after considering your cash-flow requirement.
4. Consult a professional – If you are not sure about
structuring a balanced investment portfolio, speak to a fund
manager to get professional help. Please note however, the
Good life is about:

“Living in the place you belong, with the
people you love, doing the right work, on
purpose.”
26
fund manager may not take your unique financial goals and
cash-flow into consideration. If you want an investment
portfolio that takes into account your unique circumstances
like financial goals and cash-flow, you may want to consult a
financial coach licensed by the Securities Commission. Log
onto www.whitman.com.my to find out how to choose the
right financial coach.
THE POWER OF RETURN ON INVESTMENT (ROI)
ROI is a very important ally in our process of attaining financial

freedom. While we face the threat of excessive spending and
inflation erosion in our process of attaining financial freedom, we
can use ROI wisely to help us. If we are serious about achieving
our own financial freedom, it is important to understand and know
ROI better.
The Power of Compound ROI
When asked what was man’s most powerful discovery, Albert

Einstein replied without hesitation: “Compound interest!”
The following table shows the compounding effect of RM100,000

invested at different compound ROI rates over 36 years. From the
table, we can see that differences in ROI that may appear moderate
Only after defining what a good life means to

you can you move on to identify the financial
needs and wants required to support your
good life.
27
in the short-term can, with compounding, multiply into very large

and quite obvious differences in the long term.
Capital ROI After 36 Years

100,000 2% 204,000
100,000 4% 410,000
100,000 6% 815,000
100,000 8% 1,597,000
100,000 10% 3,091,000
100,000 15% 15,315,000
Let’s say you are a passive saver. You leave your capital in a savings
account to earn about 2% ROI. With 2% ROI, your RM100,000
will multiply by 2 times to 204,000 after 36 years. If you put in a
little extra effort to transfer the money into a fixed deposit, you may
earn about 4% ROI. Your RM100,000 grows by 4 times to about
RM410,000. If you are willing to put in more effort to explore
investment opportunities, you may be able to grow your money at
8% ROI. With 8% ROI, your RM100,000 will multiply by 16 times
to about RM1,597,000. With a slight increase of your ROI from 2%
to 8%, you end up with a huge difference in savings of RM1,393,000
(RM1,597,000 – RM204,000). With that slight increase in ROI,
you end up with about 8 multiples of RM204,000. If you are able
to grow your money at 15% ROI, your RM100,000 will multiply
by 153 times to about RM15,315,000. Of course, increasing the
ROI doesn’t come free. The higher the ROI you try to achieve, the
higher the risk of losing your money. That is why we also need to
know about the price we pay if we lose our money.
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The Price of Making a Mistake
Most people underestimate the magnitude of the ROI rate required

to recover investment losses. For example, if you start with RM100
and lose 50% of it, you would have to earn 100% on the remaining
RM50 just to get back to where you were at the beginning.
The following table shows the ROI rates required to overcome

various losses. The time period is 5 years, and there are two
scenarios – a 10% target ROI and a 15% target ROI.
Annual ROI Required Over Next 4 Years to Meet Original

Target
First Year Loss 10% Target 15% Target
10% 16% 22%

15% 17% 24%
20% 19% 26%
25% 21% 28%
30% 23% 30%
40% 28% 35%
For example, you may have a plan to grow your money at 10% ROI
for the next 5 years. Unfortunately, instead of achieving the 10%
target, you end up with a 25% loss. In order for you to reach your
original target, you would need to achieve 21% ROI for the next
four consecutive years. That’s the price you have to pay for losing
25% in the first year. Is it easy to achieve 21% ROI for 4 years
continuously? No.
29
In addition, you will also notice the spread between the amount of
the loss and the required ROI over the next 4 years widens as the
magnitude of the loss is increased. For example, in the 10% target
scenario, with the 10% first-year loss, the increased ROI required is
60% higher than original target (16% versus 10%). At a 25% loss,
the increased ROI required is more than twice as high (21% versus
10%). As we can see, the larger the losses, the more difficult they
are to overcome. That’s why the first rule to investing according to
Warren Buffett is: “Never lose your money.” And the second rule is
to refer to the first rule.
The Inflation-Adjusted ROI
We all know that our money is subjected to the depletion of inflation

at any time. Therefore, we must not assume that any ROI is good
to help us grow our money. To effectively grow our money, we
need to attain a ROI higher than the inflation rate. For example, if
inflation is 4%, the 3.7% interest rate that you earn from your fixed
deposits is not very helpful to grow your money. In the long run,
fixed deposits help you to lose your money safely. The inflation-
When you develop your list of financial needs

and wants, don’t be restricted by your current
financial resources or the money you have
now. You should focus purely on defining
the financial needs and wants that will really
provide the good life you want.
30
adjusted ROI for fixed deposits in this scenario is actually -0.3%

(3.7% - 4%).
Therefore, in order for us to grow our money, we need to seek

not only ROI, but inflation-adjusted ROI. We need to subtract the
inflation rate from the expected ROI to arrive at inflation-adjusted
ROI.
To achieve financial freedom, we need two levels of understanding

on ROI. First, we need to understand the concepts of ROI explained
above. This is what I normally refer to as textbook knowledge
or academic knowledge of ROI. This level of understanding
doesn’t guarantee financial freedom. However, without this basic
understanding, it is almost impossible to achieve your financial
freedom.
The second level involves understanding what rate of ROI you

actually need to achieve your very own financial freedom. When
I ask some people what ROI they target for their investment, their
answer is: “As high as possible.” This answer clearly shows that
they don’t understand the risk-reward nature of ROI. By desiring
the highest ROI possible, they will inevitably expose their money
to the highest possible risk of loss. Instead of achieving their
target ROI, they may lose a big chunk of money. There is always
an optimum ROI rate for you to target and achieve for your very
own financial freedom. This optimum ROI rate should be higher
than the inflation rate but not too high that you risk losing money.
Therefore, the challenge for all of us who want to achieve financial
freedom is to find out what that optimum ROI is.
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THE POWER OF TIME
Time is another important element for us to manage in order to

achieve our financial freedom. It is doubtful that you can achieve
your financial freedom effectively without making use of the power
of time.
The Relationship Between Time and Your Investment Return
The longer you hold your investment, the closer you will come to
the expected average return. Let’s say you expect an average annual
return of 10% from Malaysian equity. You are not guaranteed a 10%
investment return exactly at the end of one year in which you’ve
invested your money. After one year of investing, you may get a
13% return. You may get a 4% return. You may even get a -18%
return. However, when you are able to hold your investment over a
10-year period, you will achieve an investment return that is closer
to your expected average return of 10%.
In the short term, say less than 3 years, market fluctuations are
very high. However, over time, the fluctuations get smoothed out.
People frequently have concerns about market volatility, especially
on Bursa Malaysia. Such people may want to invest in capital
guaranteed products to avoid the capital losses due to volatility.
However, if we understand the relationship between volatility and
time, we would know how to use it to our advantage and worry
less.
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Paying Too Much Attention to Short-Term Results
The sad fact is that most people pay too much unnecessary attention
to short-term performance. As a result, they tend to make the wrong
investment decisions at the wrong time, due to two main reasons.
The first reason is that most people underestimate their time horizon.
They think that their investment time horizon is 3 to 5 years. So,
they tend to invest in an investment vehicle for 3 to 5 years and then
withdraw the investment.
Provided that they have made a proper provision for emergency

cash, most people tend to have a very long time horizon. A 40-year
old client told me that his investment time horizon should be 15
years because he intended to retire at 55 (55 – 40 = 15). But he
doesn’t need to use all his investment money the moment he touches
55. At most, he will only use a small portion of it to maintain his
lifestyle. I told him that his investment horizon is in fact longer
than 15 years. It could be as long as 35 years depending on how
fast he spends his money and how long he lives. In his case, he had
investable assets worth RM5 million. With proper investment and
careful spending, his wealth could outlast his lifetime. In his case,
he had an investment time horizon of at least 35 years. By correctly
identifying his time horizon, he has developed the patience to let
the time factor work for him, instead of against him. Without such
an understanding, he might pay too much attention to short-term
performance and exit from his investment too early and at a loss.
The second reason for making wrong decisions is that most people
never do a thorough job of selecting their fund manager. They
33
lack the necessary knowledge and don’t apply the proper selection
criteria when making their choice. As a result, they don’t have
confidence in the manager they select. Worse, they are very keen
to find out if they chose the right manager very shortly after they
invest with him. Therefore, they will monitor their fund manager’s
performance after a year, or even after 6 months. Since the market
is volatile in the short-term, there is a very high possibility that
the fund manager is not performing up to their expectations. Using
short-term performance as the criterion, some investors will decide
to cut their losses. They make the wrong decision at the wrong
time. On the other hand, if you handled your asset allocation and
fund manager selection correctly, you will be confident that the
fund manger will do a proper job. You will continue to allow the
manager to perform his role as long as he remains professional,
competent and committed.
Since each of us will have our own financial

freedom goal, each of us will also have our
own code for our financial freedom. Like our
fingerprints and DNA, this code is unique
to each of us. We need to find out what
combination of spending, return on investment
(ROI), inflation, time and saving is the right
code for us to achieve our own financial
freedom.
34
With a proper understanding of the time principle, you can build

up momentum for your investment portfolio. You will have the
wisdom and confidence to let time and money work for you.
Leveraging on the Power of Time
If you let time work for you, how great can your RM100,000
investment portfolio grow? If you invest RM100,000 at 10%
ROI per annum, in just 36 years your investment will grow to
MYR3,091,000.
On top of that, the longer you allow time to work for you, the less
you will need to save to accumulate your desired target. Let’s look
at the following table.
Monthly Savings Required to Accumulate RM1 Million by

Age 55
Monthly Savings
Starting at Age
(RM)
50 12,807
45 4,841
40 2,393
35 1,306
30 747
Assumptions
1. Return on Investment – 10% per annum
The table shows that if one were to start at age 50, he would need
to save RM12,807 every month for him to accumulate RM1 million
by the age of 55. If he were to start at age 45, he would need to save
much less at RM4,841 per month. If he were to start at age 30, he
35
would need to save RM747 per month which is a more realistic

target. Therefore, if you were to start saving early and allow time
to work for you, becoming a millionaire is within your reach The
earlier you start saving, the smaller the amount you need to save
every month to achieve your target accumulation.
Do use the power of time to your best advantage on your journey to

financial freedom. By making time work for you, you can optimise
your wealth no matter how much you have now. There is no better
time to start tapping into the power of time than right now.
THE POWER OF SAVING
As a Financial Freedom Coach, I’ve heard myriad excuses for under

saving, even from this class of high net-worth people. Even with
their monthly double-digit and triple-digit incomes, their excuses
are the same as those I’ve heard from middle-income earners. “I
don’t have excess income to put aside for retirement or for my kids’
tertiary education,” “I can’t afford insurance against premature
death,” “It’s all I can do to meet expenses; I just don’t make enough
money to put anything aside for the future,” and the list goes on
and on.
Many affluent couples have told me that they really want to put
some money aside for retirement and for their children’s tertiary
Without the essential element of time, it is

going to be very difficult, if not impossible to
achieve your own financial freedom.
36
education. But with monthly expenses, festive season spending and

yearly vacations to Europe and the USA, there just isn’t enough left
over to save. “If only we made more money,” is a common refrain.
Thinking that they have no money is a common mistake. Many

people pinpoint insufficient income as the reason for not saving.
The only solution they see is in making more money. It seems
impossible that they might restructure their financial priorities and
discipline themselves to save rather than spend. In the book The
Law and The Profits, author C. Northcote Parkinson introduced a
famous Parkinson’s Law: Expenditures rise to meet income. He
went on to say, individual expenditure will not only rise to meet
income but it tends to surpass it, and probably always will.
Therefore, “not having enough income” is not the problem. The

true problem is the reluctance to reexamine your current life style
and reset financial priorities. In financial freedom planning, what
matters is not how much income you make but how much saving
you make.
In order to achieve financial freedom, you must

at least understand and manage the 5 essential
elements of financial freedom effectively.
Without knowing how to manage these 5
elements effectively, financial freedom will only
be a dream, not a goal, for most people.
37
The discipline of being able to save consistently and on target could

make or break our quest for financial freedom. There are three main
reasons why saving is important:
A. The More We Save, The More We Accumulate
The first reason is simple and obvious. The more we save, the more
we can accumulate. Obviously, we would have more resources to
invest to grow our assets.
B. The More We Save, The Less We Spend
When we force ourselves to save more, we definitely have less to

spend. As such, we are able to control our standard of living and
live below our means. Throughout my practice, I have come across
clients who are able to accumulate substantial assets through prudent
spending and disciplined saving. When we consciously lower our
standard of living, it makes it easier to maintain our lifestyle during
retirement.
People fall at both ends of the spectrum. On one end, some people
do not make much but save a lot. On the other end, some people
earn high incomes but save very little.
C. The More We Save, The Lower the Rate of Return on Investment

(ROI) We Need
The more we save, the less risk we need to take in financial freedom
planning. Let’s say you want to accumulate RM5 million (see Table
1). Assume you are 45 and plan to retire at 60. If you can save
RM50,000 per annum, you need to achieve an ROI of 23.9% to
achieve that RM5 million goal. If you can save RM120,000 per
38
annum, you need to achieve an ROI of 13.4%. If you can save

RM180,000 per annum, you need to achieve an ROI of only 8.3%.
The lesson here is that the more we save, the lower the ROI rate
required to achieve the same accumulation target. When we do not
need to achieve a high ROI, we do not need to stomach too much
risk and volatility. The less risk we need to take, the more peaceful
our lives.
Table 1: Wealth Accumulation Goal of RM5 Million in 15

years’ time
Rate of Return
Annual Saving
Required
50K 23.9%
80K 18.3%
100K 15.6%
120K 13.4%
150K 10.6%
180K 8.3%
How Much Should We Save?
Most of us understand the importance of saving. The media loves to

ask me this question: “Mr. Yap, how much of their income should
The more we spend, the more money we

will need to maintain our lifestyle during
retirement.
39
Malaysians save?” Many financial planners are ready with an

answer. Some say 20%. Some say 30%. Some will even say 40%.
However, this is quite a tough and tricky question for me. I have
substantial experience in developing tailor-made financial plans for
clients. Therefore, I know that the right savings rate varies from
one person to another. If you have a monthly income of RM3,000,
the right savings rate for you may be is 20%, because you need to
spend the bulk of your income to sustain your lifestyle. However,
if you have a monthly income of RM50,000, the right savings rate
for you may be 50%, because you don’t need to spend most of your
income to sustain your lifestyle.
This shows that there is no standard and right savings rate for
everyone. Each of us should have a tailor-made financial plan to
determine the right savings rate for our financial freedom. Only
then will we know that we are saving enough to meet our future
commitments.
What if Your Savings are Below Target?
If your savings are less than your planned target, you may fail to
achieve your financial freedom. If the gap persists, chances are that
you may not be able to achieve your original financial goals. If
actual savings are less than planned, you must review your cash
flow statement to identify the discrepancy and take the necessary
steps to recovery. If you confirm that the planned savings target is
unrealistic, it is important that you readjust some of your financial
goals and asset allocation strategies.
40
APPLYING THE 5 ESSENTIAL ELEMENTS TO YOUR

OWN LIFE
All these 5 essential elements are closely related and inter-connected.

One essential element will affect another essential element. For
example, how much you spend will affect how much you save.
Your time horizon will affect the ROI you need to achieve an
accumulation target. Therefore, understanding each of the essential
elements is not enough. You need to understand the combined result
of these 5 elements.
As I mentioned before, each of us will have our own financial

freedom goal. Therefore, each of us will also have our own code
for our financial freedom. As a result, we need to find out what
combination of spending, ROI, inflation, time and savings is the
right code for us to achieve our own financial freedom.
Have you found out your code to your financial freedom? If you
have, congratulations! You are on the right track to achieve your
financial freedom. If you haven’t, you better start deciphering the
code now before it is too late. You don’t want to leave it too late.
By then, without the essential element of time, it is going to be very
difficult, if not impossible, to achieve your financial freedom.
Inflation is one of the most challenging

elements to understand and manage because
it is intangible and essentially invisible.
41
42
Chapter 4:
The Roadmap to Financial Freedom
Previously, I shared the 5 essential elements of financial freedom:

spending, inflation, return on investment (ROI), time and saving.
If you picked up some new knowledge, it is good for you. If you
already knew this before, it is good to refresh your knowledge.
However, just knowing and understanding the 5 essential elements
alone will not guarantee your financial freedom.
Knowledge is not power. Knowledge is only powerful when you

apply it. Therefore, the challenge is to apply the knowledge of the
5 essential elements into your own real-life situation. By reading
ahead, you will learn how to do so. After reading this book, you can
also continue to learn more on how to achieve financial freedom by
logging onto www.whitman.com.my.
Let me tell you about George:

• He is 36 years old and his wife is 34 years old
• He has two children aged 8 and 5
43
• He works as a senior manager in a multinational corporation

with an annual income of RM120,000. His wife works
as an administration manager with an annual income of
RM100,000
• He has the following financial assets:
• House – RM500,000 with a RM250,000 mortgage loan
• Unit Trusts – RM30,000
• Bank Deposits – RM200,000
• EPF – RM200,000 (himself), RM150,000 (wife)
• He and his family currently enjoy a life style of RM120,000
per year, excluding mortgage repayment, insurance premiums
and income taxes.
• He and his wife intend to retire at 55 with RM96,000 living
expenses per year up to age 80
• They would like to provide RM200,000 each for their
children’s tertiary education.
By looking at George’s financial information, do you think he will

be able to achieve his financial freedom goal?
The most effective practice to avoid excessive

spending is to spend after you have provided
for saving.
Income – Savings = Expenses
NOT
Income – Expenses = Savings
44
It is not easy to answer this question, and the solution can’t be

found offhand. The best way to answer this question is to plot a
Roadmap to Financial Freedom for George. The Roadmap to
Financial Freedom is an intellectual model that I have developed
to provide a comprehensive, holistic and lifelong ‘big picture’ for
an individual to make decisions and take actions to achieve his or
her financial freedom. When developing the Roadmap, I take into
consideration the individual’s relationship with the five essential
elements of financial freedom: spending, inflation, ROI, time and
saving as defined in Chapter 3. In addition, the calculation has also
taken into consideration personal information such as age, number
of children, EPF, various financial goals, various sources of income
and various forms of assets and liabilities. Certain reasonable
assumptions have also been made in order to complete the full
picture of an individual’s financial position. The purpose of the
Roadmap is to give an individual an indication of where he stands
on his or her journey to achieve financial freedom.
If you took RM3,000,000 and buried it in your

garden, then went back and dug it up 12 years
later, assuming the average inflation rate of
6% during the 12 years, your money would be
worth only half as much as in current dollars
as when you buried it.
45
After keying in George’s personal information, his Roadmap looks

like this:
Current Roadmap to Financial Freedom for George
The Y axis of the chart represents George’s net worth. The X axis
of the chart represents his age. From the roadmap, we can see
George’s net worth will grow to about RM400,000 when he is 45.
His net worth drops to almost zero at age 46 when his first child
enters university. Then, his net worth will grow slightly but drop
to zero again at age 49 when his second child enters university. His
net worth stays at zero until he reaches 55 and withdraws his EPF
money. Then, his net worth grows to about RM1,100,000. At age
When asked what was man’s most powerful

discovery, Albert Einstein replied without
hesitation: “Compound interest!”
46
57, his wife withdraws her EPF money and their family net worth
grows to about RM2,450,000. From there, their net worth continues
to drop. Their net worth becomes zero when George is at age 65.
In another words, George’s wealth will run out by the time he is at
age 65.
Based on George’s desire to have his wealth last until age 80, the
roadmap clearly shows that George’s current money management
will not achieve all his financial needs and wants. In another words,
George will not achieve his financial freedom.
It is important for each of us to have a Roadmap to Financial

Freedom to help us translate our financial freedom dream into a
coherent set of financial performance measures. With the roadmap,
we will be able to measure our progress towards our goal of financial
freedom. With the roadmap, we will know where we stand now on
our journey to financial freedom destination. Unless and until we
know where we stand now, we will not be able to take the necessary
actions to move towards our destination: financial freedom.
Without a Roadmap to Financial Freedom, you will not know if

you have enough financial resources to meet all your goals. Without
this knowledge, you may continue to over-spend and under-save.
When you realise the problem at age 50 or 55, it is certainly more
The first rule to investing according to Warren

Buffett is: “Never lose your money.” And the
second rule is to refer to the first rule.
47
challenging but it is not too late to take action and enjoy the effect
of compound interest.
Without this knowledge, you may also continue to over-save and

under-spend. This is what we mean by compulsive saving. This is
not as bad as under-saving. But let’s say that you realise that you
have over-saved when you are 55. There is no way you can turn
back time to age 40 to spend on something you wished for at that
time that could have improved your quality of life.
In short, managing your personal finances without the Roadmap to

Financial Freedom is like shooting at a target in the dark. You don’t
know where the target is and you don’t know whether you hit the
target or not.
By knowing his current roadmap, George will be able to take

action and reprioritise his financial needs and wants to achieve his
financial freedom. First, he can restructure his investment portfolio
to achieve a higher ROI. His current investment’s ROI is 3.8%. If
he is able to achieve a 9% ROI for his investment portfolio, his
roadmap will look like this:
If inflation is 4%, the 3.7% interest rate that

you earn from your fixed deposits is not very
helpful to grow your money. In the long run,
fixed deposits help you to lose your money
safely.
48
After increasing his ROI, George’s net worth will last longer, up
from age 65 to age 68. This is better but still not good enough. His
target is to have his money last beyond age 80.
In that case, he will need to reprioritise and adjust his financial needs
and wants. He may want to reduce his spending on living expenses
during his retirement from RM96,000 to RM84,000. It means
about RM12,000 less per year which is equivalent to RM1,000 less
per month. George is willing to make the adjustment to make his
wealth last longer. If he is willing to do so, his roadmap will look
like this:
Provided that they have made a proper

provision for emergency cash, most people
tend to have a very long time horizon.
49
After reducing his expenditure on living expenses during retirement,

George’s net worth will last longer, up from age 68 to age 71. This
is better but still not good enough.
Based on the adjusted roadmap, George will need to adjust his

spending on his current lifestyle to increase his savings. If he is
able to reduce his current spending per year from RM120,000 to
RM105,000, he will have an additional RM15,000 in savings per
year. His roadmap will then look like this:
When we consciously lower our standard

of living, it makes it easier to maintain our
lifestyle during retirement.
50
After reducing his current spending to save an additional RM15,000

per year, George’s net worth will now last longer, up from age 71 to
age 83. By making those adjustments that George and his family are
C urre nt Adjus te d
comfortable with, he will be able to achieve his very own financial
freedom.
With a tailor-made Roadmap to Financial Freedom, George will

know the impact that various current actions and adjustments will
make on his attainment of financial freedom. He can try different
actions and adjustments to see their impact. By doing that, he will
arrive at the optimum actions and adjustment that he feels most
comfortable with to achieve his financial freedom. In the end,
George will also arrive at an optimum lifestyle for him and his
family. Log onto www.whitman.com.my to find out how you can
produce an Optimum Roadmap to Financial Freedom for yourself.
51
3 Levels of Financial Freedom Planning
Based on George’s story, we can see that there are actually 3 levels
of financial freedom planning:
1. You don’t know where you stand in your journey to financial
freedom.
2. You know where you stand today on your journey to financial
freedom but don’t know how to optimise your wealth to
achieve financial freedom.
3. You know where you stand in your journey to financial
freedom and you know how to optimise your wealth to
achieve financial freedom.
If you are serious about achieving your financial freedom, it is

imperative for you to know your current level today so that you
can move yourself to the third level of financial freedom planning.
You can only achieve your true financial freedom if you manage
your wealth from level 3. If you remain at level 1 and 2, it is almost
impossible to achieve your financial freedom.
52
Chapter 5:
The Holistic Approach of the Roadmap to
Financial Freedom
Compared to the common financial planning approaches available

in the market, the Roadmap to Financial Freedom is unique in the
sense that it gives you a holistic view of your financial status.
Most financial planning approaches will assess the attainment of

a specific financial goal like retirement goals, children’s tertiary
education funding and other goals one at a time. When you only
look at one specific goal at a time, you are only looking at one
segment of your total financial picture. You are unable to see how
it will affect your other financial goals. In short, you are working in
a silo and not taking a holistic approach to planning your financial
freedom. Let’s say you’re looking solely at how to achieve your
children’s tertiary education funding goal; you won’t know how this
will affect your retirement planning. You can only tell how much
you need to save or provide for your children’s tertiary education
but you won’t know how your provision will affect your retirement
53
funding. In reality, the more financial resources you provide for

your children’s tertiary education, the less financial resources
you will have available for your retirement funding. That’s why
most financial planning approaches in the market which adopt the
segmental approach don’t give you the big picture.
In comparison, the Roadmap to Financial Freedom takes a holistic

approach to give you the full realistic picture. The Roadmap to
Financial Freedom will look at all your financial needs and wants
in your lifetime at the same time and tell you if you have enough
financial resources to meet them all. Essentially, the Roadmap to
Financial Freedom offers you a new financial management model,
a fresh way of thinking about what matters most in your life and
how to attain it.
There are many financial planning approaches out there.

However, most if not all share the assumption that life can be
compartmentalised. Most put forth the position that people can
work on a specific financial goal independently of other financial
goals. That’s not true and definitely not effective.
The Roadmap to Financial Freedom takes a radically different

approach – radical in its simplicity. Instead of breaking things down
We need to find out what combination of

spending, ROI, inflation, time and savings
is the right code for us to achieve our own
financial freedom.
54
into parts, this approach focuses on reintegration of the whole.

It’s about putting it all back together. Instead of viewing personal
financial management as a collection of compartments, it takes a
holistic approach that takes into account the financial needs and
wants critical to a good life.
By knowing how different financial goals affect each other, you will
be able to adjust each of your financial goals to reach the optimum
or most comfortable point for you.
What can the Roadmap to Financial Freedom do for your

personal financial management?
1. It helps you to define how much wealth is enough for you.

In this modern world, we need money for almost everything.
As a result, one tends to work untiringly for more wealth.
The trouble starts when you don’t know when enough is
enough. In the end, money becomes the end rather than a
means to your life. The Roadmap to Financial Freedom can
solve this problem by first helping you calculate how much
money is enough. Instead of chasing more and more money,
the Roadmap to Financial Freedom gets you to identify the
financial needs and wants in your life that will give you the
life you crave for – the good life.
2. It helps you determine whether you will have enough

financial resources to meet all your financial needs and
wants. How will you know if you will have enough money to
meet all those financial needs and wants? By taking a holistic
approach, the roadmap is able to tell you if you have enough
55
money to meet all your financial obligations in life. If your

wealth runs out before age 80 (which is the estimated average
life expectancy), it means that you don’t have enough. If your
wealth lasts longer than age 80, it means that you have more
than enough wealth.
3. It helps you understand the relationship between different

financial needs and wants. When you plan your finances
based on one financial goal, you are not able to see how it will
affect another financial goal. The most common situation is
the relationship between children’s tertiary education funding
and your retirement funding goals. As a result, you are always
not sure if you are over-providing for one financial goal at
the expense of another. By using the Roadmap to Financial
Freedom, you get to see how extra provision for one financial
goal will affect another financial goal.
4. It helps you find out the right code (combination) of the 5

essential elements of financial freedom: spending, inflation,
ROI, time and saving. All these 5 essential elements are
only academic concepts unless you are able to apply them in
It is important for each of us to have a

Roadmap to Financial Freedom to help us
translate our financial freedom dream into
a coherent set of financial performance
measures.
56
your own life. By using the Roadmap to Financial Freedom,

you get to see how each of these essential elements should be
applied to achieve your financial freedom, like in the equation
below:
Optimum Spending
+ Optimum Inflation
+ Optimum ROI
+ Optimum Time
+ Optimum Saving
Your Very Own Financial Freedom
5. It helps adjust your actions and goals so you can achieve

an optimum point for your financial management. We now
know that the achievement of financial freedom is not only
about making more money. It is essentially about how you
balance your financial needs and wants with your financial
resources. Using the Roadmap to Financial Freedom, you
can find the optimal balance between your financial resources
and your financial needs and wants. If you live your life and
manage your wealth according to this optimum point, you
can surely achieve your financial freedom and minimise your
financial worries in future.
6. Once you identify the optimum point or the optimum

Roadmap to Financial Freedom, you will also identify key
performance indicators (KPIs) to keep yourself on track
to financial freedom. With your own optimum Roadmap
to Financial Freedom, you will be guided by certain key
57
performance indicators (KPIs) in your personal financial

management. For example, you will know much savings you
should put aside annually; what is the average ROI you should
target and achieve every year; what level of spending can you
afford; and what inflation rates to monitor. As a result, you
will have a very clear guideline to effectively manage your
wealth. As long as you manage your wealth according to the
target KPIs, you can rest assured that you are on the right
track to financial freedom.
58
Chapter 6:
The Benefits of the Roadmap to Financial
Freedom
In order to understand the full benefits of the Roadmap to Financial

Freedom, don’t just study its features and functions at a technical
level. Ideally, we should look beyond personal wealth management
to fully appreciate the benefits of the Roadmap. Let’s look at the
Roadmap to Financial Freedom in the context of our whole lives.
What are the benefits?
1. The Roadmap to Financial Freedom lets you become

the master of your money. With the Roadmap to Financial
Freedom, you enjoy clarity and control of your personal
financial management. As a result, you become the master
of your money. Without the Roadmap to Financial Freedom,
you are in the dark as far as personal financial management is
concerned. You are always trapped by your money problems.
You worry that you over-spend. You worry that you under-
save. You worry that your investment return is too low. You
59
are not sure if you can provide for your children’s tertiary
education. You are not sure if your wife can stop working
to take care of the family full time. You are not sure if you
should start your own business or change jobs to increase
your income. You are not sure when you can retire.
You have so many questions about money in your life with

no certain and clear answers. In short, your life is always
troubled with money worries and concerns. Without clarity,
you end up making a lot of life decisions based on money as
the top priority. You look for jobs that give you the highest
pay, not the job that suits your interests and matches your
strengths. You look for investments that give you the highest
return, not the investment that fits your risk profile and time
horizon. Money governs all decision-making processes of
your life. In that case, you are not the master of your money.
In fact, money is the master of you and your life. Isn’t that
sad?
With the roadmap, we will know where we

stand now on our journey to financial freedom
destination. Unless we know where we stand
now, we will not be able to take the necessary
actions to move towards our destination:
financial freedom.
60
Take my friend, Chris, who wants to purchase a house near

his parents’ residence in order to take care of them in their
old age. He has been successful in business and accumulated
some wealth over the years.
Lately, Chris has been house-hunting around his parents’

neighbourhood. Catching up with him one day, I asked
him how his search was going. Chris said, “The owner of a
house two houses away from my parents offered to sell his
house at RM250,000. He bought the house 10 years ago at
RM190,000.” I said, “That sounds like a good buy. Are you
taking up the offer?” His answer flabbergasted me. “I think
that the price is still rather expensive. I will only buy if the
price drops to RM220,000. I believe that the price will drop
further if the economy gets worse. Only then will it be a good
bargain. In the meantime, I can invest money in stocks to
generate more return.”
This is just one example of making major life decisions

using money as the priority. In the first place, Chris is doing
well financially. Second, he is not buying the property for
Managing your personal finances without the

Roadmap to Financial Freedom is like shooting
at a target in the dark. You don’t know where
the target is and you don’t know whether you
hit the target or not.
61
investment. He is buying the property to be near his family so

that he can take better care of his elderly and aging parents.
However, due to his habit of making all decisions using
money as the yardstick, Chris can’t help but muddle his
decision-making. Subconsciously, his mind was dominated
and influenced by the urge for more money.
In hindsight, the house is not really that expensive. It only

appreciated 24% over last 10 years, or about 2.8% annualised
growth. Again, due to the habit of always looking for more
financial gain, Chris can’t help putting financial gain at the
centre of the whole decision-making process. Instead of
assessing whether the house is suitable for the purposes of
planning his life, he jumped straight into money matters. This
is what I mean by letting money run our lives, instead of us
running our lives using our money.
The Roadmap to Financial Freedom can help you view your

money in the right context, which is to support and serve your
life. The Roadmap to Financial Freedom helps to remind you
that money is only a means to attain an end. It is never and
should never be an end in your life. Knowing this, you can
You can only achieve your true financial

freedom if you manage your wealth from level
3. If you remain at level 1 and 2, it is almost
impossible, to achieve your financial freedom.
62
achieve a sense of control over your money and stop letting

money run your life. You will make your money work to
support the good life that you want, not the other way round.
That, I am sure you will agree with me, is the real purpose of
money and money management.
2. The Roadmap to Financial Freedom gives you the feeling

of financial freedom today. We all want to achieve financial
freedom. The reality is that financial freedom can’t be
achieved overnight. Most people require many years before
they can achieve financial freedom. However, do we need to
really achieve our financial freedom in order to really feel
the peace of mind gained from financial freedom? If that’s
the case, we can only feel the peace of mind gained from
financial freedom many, many years later. For most people,
this could be at the age of 50 or even later. From now until
you reach that age, you just live your life feeling insecure and
uncertain about the attainment of financial freedom. In this
case, you are treating financial freedom as a destination. You
only feel happy and have peace of mind when you attain the
Reality of Financial Freedom.
When you only look at one specific goal at a

time, you are only looking at one segment of
your total financial picture. You are unable to
see how it will affect your other financial goals.
63
But with a Roadmap to Financial Freedom, you can achieve

the peace of mind of your financial freedom today. Why?
When you have your very own Optimum Roadmap to
Financial Freedom, you’ll know that you are on the right
track to your financial freedom. As long as you manage your
money according to the key performance indicators (KPIs)
highlighted in your Roadmap to Financial Freedom, you are
most likely to achieve your financial freedom. Therefore, you
know in your heart that financial freedom is not a dream for you
but something you can achieve given time. In the meantime,
you can live your life feeling secure and comfortable that
your financial freedom is within reach. In this case, you treat
financial freedom as a journey, not a destination. You can start
to experience the Feeling of Financial Freedom while you
are on the journey to your financial freedom. As a result, you
don’t have to wait until you really become a multi-millionaire
to feel the peace of mind of financial freedom.
At the end of the day, aren’t we all just looking for peace of
mind? When we live our life with peace of mind everyday
until we breathe our last, we get to live a happy and good
The Roadmap to Financial Freedom will look

at all your financial needs and wants in your
lifetime at the same time and tell you if you
have enough financial resources to meet them
all.
64
life. Without that peace of mind, there is no way to achieve

and feel happiness no matter how much money you have.
When we have our very own Optimum Roadmap to Financial
Freedom, we give ourselves the gift of living a good life
today, not in the future.
3. The Roadmap to Financial Freedom frees your mind from

money-related worries so that you can enjoy more of other
important things in your life. The Roadmap to Financial
Freedom is important in helping one achieve a balanced life
style. With your very own Optimum Roadmap to Financial
Freedom, you have the confidence that your personal finances
are in order. With an Optimum Roadmap to Financial
Freedom, you have managed to define how much money is
enough for you and you know that you will eventually have
enough money. Without worrying about money management,
you can focus more on and enjoy other important things in
your life. These things are non-financial wealth, like your
physical wealth, your spiritual wealth, your family wealth,
your mental wealth and social wealth. I discuss non-financial
wealth in detail in my earlier book, MaxWealth.
By knowing how different financial goals affect

each other, you will be able to adjust each of
your financial goals to reach the optimum or
most comfortable point for you.
65
I am not saying that you have never explored or spent time

on these types of non-financial wealth. All this while, you
probably were involved in these activities. However, without
a peace of mind, you probably were not able to enjoy and
experience your non-financial wealth whole-heartedly.
Without the confidence that your personal finances are in
order and on the right track, there is always some sense of
guilt and discomfort when you invest time into activities that
don’t contribute directly to your financial well-being.
Let’s say you want to spend more time on community service.

Without knowing that your personal finances are on the right
track, you will still be able to squeeze in some time for
community service. However, you might not be able to enjoy
it 100 percent. Why? In the middle of community service,
something long outstanding about your personal finances may
bug you. You may also doubt if you are doing the right thing
at the right time. Instead of spending time on community
service, perhaps you should be working to get more money
to improve your family’s financial security. If your personal
finances aren’t in order, you won’t be able to focus on non-
financial wealth activities and enjoy them completely.
One tends to work untiringly for more wealth.

The trouble starts when you don’t know when
enough is enough. In the end, money becomes
the end rather than a means to your life.
66
With an Optimum Roadmap to Financial Freedom, you free

yourself from worries about money matters. You’ll be free
to focus on and enjoy other important things in your life
like never before. Conventionally, you would only enjoy
this feeling of FREEDOM when you have actually achieved
your financial freedom and have millions in your bank. Most
of my multi-millionaire clientele admit they feel this sense
of freedom. However, you don’t have to wait until you too
become a millionaire to enjoy this feeling of FREEDOM.
Once you create an Optimum Roadmap to Financial Freedom
and start acting on it, you too can enjoy the same feeling
In fact, not all multi-millionaires are certain to enjoy this
feeling. If their personal financial house is not in order and
they continue to chase after more wealth, I doubt that they
will enjoy any feeling of true FREEDOM.
If you are able to feel FREE despite possessing less wealth

than these multi-millionaires, aren’t you ‘wealthier’ than
them? This is what it really means to be financially free.
When you achieve the feeling of financial freedom, you also
attain freedom in life.
With your own optimum Roadmap to Financial

Freedom, you will be guided by certain key
performance indicators (KPIs) in your personal
financial management.
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For me, the Roadmap to Financial Freedom is essentially

the foundation for a balanced, successful and happy life
in our modern society. In a world whereby you and your
family can’t survive without money, it is almost impossible
to achieve freedom without putting your personal financial
management in order. By achieving freedom in your personal
financial management, you free yourself to start exploring
how to achieve the ultimate freedom in your life. Therefore,
the Roadmap to Financial Freedom is not only a personal
financial management tool. In a larger and higher context, the
Roadmap to Financial Freedom can be seen as an essential
life planning and management tool.
Many books have been written on how to live a good and

balanced life. But there’s a missing link. Have any books
been written on how you can link your personal financial
management to your exercise in planning a good and
balanced life? This Roadmap to Financial Freedom is that
link, integrating optimal personal finance with an optimal
life.
I am confident that this Roadmap to Financial Freedom

will serve as a useful guide for those who want to link
your personal financial planning to planning for a good and
balanced life. Planning for a good life in modern society can
never be complete without incorporating personal financial
planning. I strongly believe that there is no way you can lead
a good life without first putting your Roadmap to Financial
Freedom in place.
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Chapter 7:
What Happens When You Manage Wealth
Without a Roadmap to Financial Freedom?
Sometimes we can’t grasp just how valuable something is simply

by enumerating the benefits. Instead, there are some things that we
only learn to really value when they’re missing from our lives.
One of my favourite authors wrote: “Sometimes we can’t see the

real value of a thing by just asking what its benefits are. We need to
ask what problems we will face if we do without it in order to see
the real and full value of something.” I believe the same applies to
the value of the Roadmap to Financial Freedom. What problems
would someone face in managing personal wealth without using a
Roadmap to Financial Freedom?
A great metaphor for the Roadmap is a literal one. Let’s say you
want to go to a new destination in a city that you’ve never visited
before, like Paris. What are the questions that you will try to ask
and answer to help you reach your destination? Think about it.
You’ll realise that there are three questions that you need to find
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the answers to in order to find out how to reach your destination

efficiently and effectively:
1. How far are you from your destination now?
2. What are the different routes to reach your destination?
3. Which route is the most suitable route for you?
What’s the best way to find the answer to these three questions?
Consult a road map. First, you use the road map to identify your
current location and your desired destination. By doing this, you
find out how far you are from the destination. Second, you use
the roadmap to map the different routes that can get you to your
destination from your current location. Third, based on the time
you need to reach your destination, the transport available, traffic
conditions, and stopping points, you choose the most suitable route
for you to reach your destination.
Imagine not having a roadmap. What problems would you face?

Without the road map, you’d lack the “big picture” needed to
answer all your three questions. Without asking around, it would be
The Roadmap to Financial Freedom can help

you view your money in the right context,
which is to support and serve your life. The
Roadmap to Financial Freedom helps to
remind you that money is only a means to
attain an end. It should never be an end in your
life.
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difficult, if not impossible, to reach your destination. Even if you

were to reach your destination regardless, you would have wasted
a lot of unnecessary energy and resources and added unnecessary
stress to the journey.
Logically, you should ask three similar questions if you want

to achieve your financial freedom in an effective and efficient
manner:
1. How far are you from your financial freedom now?
2. What are the different routes to reach your financial
freedom?
3. Which route is the most suitable route for you?
Of course, the best way to find the answer to these three questions
is to use a road map in the personal financial management context:
the Roadmap to Financial Freedom.
Without the Roadmap to Financial Freedom, you won’t know

where you stand now on your journey to financial freedom. Are
you there already, are you halfway through or are you hopelessly
lost? You just won’t know. Without knowing how far away you
are from your financial freedom, you won’t know what actions to
take to move you closer to your goal. Even if you do take some
action, without knowing the right direction you may be heading
With a Roadmap to Financial Freedom, you

can achieve the peace of mind of your financial
freedom today.
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further away from your financial freedom. For example, you may
invest in an investment product that promises high returns so you
can achieve your financial freedom faster. However, this may turn
out to be too risky an investment that loses you money instead and
pulls you further away from your destination: financial freedom.
When you have no big picture of the various alternatives or routes
to help you reach your financial freedom, you don’t have a clear
guide on what you should do to achieve your financial freedom. As
a result, it is very unlikely that you will be on the most suitable or
optimum route to your financial freedom.
Without using the Roadmap to Financial Freedom, you have no big

picture of the state of your financial freedom. It’s like the story of
the blind men and the elephant. As the story goes, these blind men
had never seen an elephant. One fine day, they had an opportunity
to touch a real elephant. One touched the body and said the elephant
is like a wall. Another held the tail and claimed that an elephant is
like a thick rope. Another put his hand on the elephant’s leg and
said an elephant is like a tree trunk. Since they could only touch
one section of the elephant at a time, none of them got the real “big
picture” of the elephant.
When we have our very own Optimum

Roadmap to Financial Freedom, we give
ourselves the gift of living a good life today,
not in the future.
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It’s the same when you manage your wealth without a big picture.
Like the blind man and the elephant, your financial planning and
actions will only impact a limited portion of your financial freedom
and not the total picture. As a result, your actions may only help you
to achieve some of your financial planning goals (such as children’s
tertiary education, retirement, investment planning, and insurance
coverage) but not all of them. Without the whole elephant, you will
not know how your actions impact your overall journey towards
financial freedom.
Without this big picture and a clear and suitable route to get you
to your own version of financial freedom, it is all too easy to make
mistakes and waste your wealth unnecessarily. Since our wealth
is always limited, we should optimise every single ringgit of our
wealth, instead of wasting it. Therefore, arm yourself with the big
picture and the best routes today by creating your own Roadmap to
Financial Freedom.
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74
W
Roadmap
Chapter 8:
Harry – Zealous Over-Saver
Dissatisfied with their unit trust agent, Harry and his wife came
to see me in 2008. Due to their frugality and Harry’s career as a
research & development manager for a large multinational chemical
company, they had built up a good income and sizeable assets.
Harry and his wife were very specific and particular about the
characteristics their financial coach would need to possess. At our
first meeting, they quizzed us relentlessly about our experience,
education and financial planning philosophy. They also freely
provided the necessary information about themselves.
The fact-finding process revealed the following financial details

about Harry and his wife:
• He is 36 years old and his wife is 34
• He has a son aged 8
• He earns RM180,000 in annual income
• His wife works as a human resources manager with an annual
income of RM150,000
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• He and his family currently enjoy a lifestyle of RM84,000 per
year, excluding mortgage repayment, insurance premiums
and income taxes.
expenses per year up to age 80
• They would like to provide RM200,000 for their son’s tertiary
education. They would like to provide more if possible
According to his wife, Harry has been very thrifty all these years.
They knew that they were financially secure but want to confirm
that fact. Furthermore, I discovered that Harry was so caught up
in saving that it had almost become an addiction. He didn’t care
that furniture needed to be replaced and wasn’t interested in taking
vacations, since he was keener on saving money. Basically, he
denied his family modern conveniences, comfortable furniture
and periodic vacations that their friends on much smaller budgets
routinely enjoyed.
By looking at Harry’s financial information, do you think he will be

able to achieve his financial freedom (assuming that he expects to
live until the age of 80)?
Will he or will he not?
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When I plotted a Roadmap to Financial Freedom for Harry, his

roadmap looked like this:
Current Roadmap to Financial Freedom for Harry & His

Family
Based on the roadmap, Harry’s net worth will grow to about RM2.5
millon when he is 45. His net worth drops to RM2.4 million at age
46 when his son enters university. After that, his net worth will
peak at RM12 million at age 64. From then on, his wealth will start
dropping continuously when he and his wife have no more active
income. From the roadmap, it can be seen that their wealth will last
beyond Harry’s 95th birthday. If Harry were to pass away at age 80,
he would leave about RM9 million to his wife and son.
Harry and his wife were quite shocked to find out that they were
in such a strong financial position. All along, they had known that
77
their finances were solid but didn’t exactly know how strong their
financial position was.
Next, we asked Harry what he would do differently in his personal

financial management now that he knows his financial position.
Harry told us that he had always wanted to retire early and become
a Christian missionary. However, he dared not make a commitment
to his church because he was unsure about his family’s financial
security. He also intends to travel more when he retires. His wife
hoped to provide more money for their son’s tertiary education and
take annual family vacations.
Roadmap to Financial Freedom for Harry & His Family

(Stress Test for Early Retirement)
Based on Harry’s wishes, we performed a stress test to see how

early Harry and his wife can retire without affecting their financial
78
freedom. Based on the graph above, Harry and his wife can retire at
age 49 and their wealth can still last till Harry’s 81st birthday.
We also performed another stress test to see how much extra money
Harry can provide for his overseas traveling when he retires. If he
and his wife were to retire at age 55, we can see that they can afford
an extra RM40,000 a year for their overseas traveling. In another
words, they can spend up to RM100,000 a year during retirement
and their wealth will still last up till the year Harry turns 81.

(Stress Test for Extra Money in Retirement)
To see how much extra tertiary education funding Harry can

afford for his son, we performed the following stress test. Without
changing his retirement age and retirement spending, we discovered
that Harry can afford up to RM1.2 million for his son’s tertiary
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education. From the roadmap below, we can see that their wealth
will still last till Harry’s 84th year.

(Stress Test for Extra Tertiary Education Funding)
After a few more rounds of stress-testing and reprioritising financial

goals, Harry and his wife discovered that they are most comfortable
with the following actions for optimisation without affecting their
financial freedom:
1. Restructuring their existing investment portfolio with
an estimated average of 3.8% ROI to 8% ROI. They feel
If you are able to feel FREE despite possessing

less wealth than these multi-millionaires, aren’t
you ‘wealthier’ than them?
80
comfortable taking a little risk to beat inflation and generate

some extra ROI.
2. Both Harry and his wife plan to retire at age 46 instead of
age 55 so that they can start their missionary work.
3. They will allocate an extra RM24,000 for overseas travel every
year during retirement. In total, they will spend RM84,000
every year for living expenses during retirement.
4. They would like to have RM10,000 per year for their family
vacation, since his wife feels strongly that it will improve
their quality of life.
5. To increase their son’s tertiary education funding from
RM200,000 to RM500,000. For Harry and his wife, an
excellent education is the best present they can give their
son. They don’t believe it is important to bequeath a lot of
financial assets to children.
Taking into consideration the combined effect of various

optimisation actions, the optimum Roadmap to Financial Freedom
for Harry and wife will look like this. Their wealth will last till
Harry’s 81st year.
In a larger and higher context, Roadmap to

Financial Freedom can be seen as an essential
life planning and management tool.
81
Optimum Roadmap to Financial Freedom for Harry & His

Family
The Value of the Roadmap to Financial Freedom
With the help of the Roadmap to Financial Freedom, Harry and his
wife discovered that they would end up leaving about RM9 million
to their son. This would happen at the expense of their current
quality of life and most important of all, their passion for life.
Through the optimisation of their roadmap, they have redesigned

their life according to their ideals and desires. By following their
Optimum Roadmap to Financial Freedom, they now know that
they can afford to improve their current and future quality of life
by taking an annual family vacation. They have peace of mind
knowing that they can provide an excellent tertiary education for
their son. Most exciting of all, they really look forward to pursuing
82
their passion of serving as Christian missionaries. For them, that is

the life worth living.
Key Performance Indicators
Now, Harry and his wife know that they have a few key performance
indicators (KPIs) to monitor to really enjoy what they are planning
for. They know that they should only spend RM84,000 for yearly
living expenses and RM10,000 on their annual family vacation.
They know that they should achieve an annual ROI of 8% on
average. They also know that their budget for their child’s tertiary
education expenses should be RM500,000.
Now, they can really taste their financial freedom. At the same time,
they also feel that they are freer to spend time on church activities.
In short, they are truly the master of their money.
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Chapter 9:
Jerry - Working Too Hard to Retire Early
38-year old Jerry is a freelance management consultant for small

and medium industry. His wife, Mary, 38, is a marketing manager
in a local conglomerate. Both Jerry and his wife are very busy with
their work and travel extensively outstation and overseas. They
have three children aged 12, 7 and 4. When they work, the children
are cared for by their Indonesian maid at home.
Jerry told me that he wants to retire at age 43 so that he can have

more time to himself. His work gives him tremendous stress and
has triggered health problems. He believes that he will enjoy a more
relaxed life once he retires and will be able to spend more time
with the children. From the expression on his face while he was
confiding in me, I can see how eagerly he is awaiting his retirement
day. In the mean time, he didn’t mind burning the midnight oil to
meet his clients’ deadlines.
Jerry came to see me to find out if he would be able to retire at age

43 as planned. He and his wife have saved and accumulated some
85
wealth over the years. Jerry is confident that with an additional five
years’ savings, he should be able to afford to stop working for the
rest of his life.
The fact finding process revealed the following financial details

about Jerry and his wife:
• He is 38 years old and his wife is 38 too.
• He has 3 children: a son aged 12 and 2 daughters aged 7 and
4 respectively.
• He earns an annual income of RM300,000.
• His wife earns an annual income of RM96,000.
• Shares – RM300,000
and income taxes.
• He and his wife intend to retire with RM72,000 living expenses
per year. Jerry plans to retire at 43 and his wife will work till
55.
• He would like to provide RM500,000 each for their medical
expenses in old age.
• They would like to provide RM200,000 for each child’s
tertiary education.
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According to Jerry’s wife, they intend to move out of their house

in PJ SS2 because the area is too busy and congested. They want
a place in a greener location with better air quality. Recently, they
found their dream house costing RM1.2 million in Shah Alam. They
liked it so much that they booked the house upon their first visit to
the show house. They plan to go back soon to pay the deposit for
the house.
Based on the information provided by Jerry, do you think he will

be able to retire at age 43 and still achieve his financial freedom
(assuming that he expects to live until the age of 80)?
After keying Jerry’s information into the computer, I discovered that

Jerry’s current Roadmap to Financial Freedom looked like this:
Current Roadmap to Financial Freedom for Jerry & His

Family
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From the roadmap, we can see their net worth will grow to about
RM2.1 million when Jerry is 43. Their net worth drops to RM1.9
million at age 46 when their son enters university. After that, his
net worth will stay within the region of RM2 to RM2.5 million.
Their net worth will peak at RM3.3 million at age 55 when his wife
retires. From thereon, his wealth will start dropping continuously
when his family has no more active income. From the roadmap, we
can also see that their wealth will last until Jerry is 65.
All things being equal, Jerry will have to increase his income for
the next 5 years from RM300,000 at present to RM600,000 to make
his wealth last till age 80 as shown in the following chart. Due
to the nature of Jerry’s consultancy business, this is not entirely
impossible. However, Jerry will have to work harder and longer
hours and this may see his health condition deteriorating from bad
to worse.
Without the Roadmap to Financial Freedom,

you won’t know where you stand now on your
journey to financial freedom.
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Roadmap to Financial Freedom for Jerry & His Family

(Stress Test for Higher Income)
Jerry’s wife was very concerned about the impact on his health if
he were to pursue his plan to retire at 43. There’s no way she would
allow Jerry to sacrifice his health for the sake of more money and
early retirement. The solution? I asked to them to reconsider buying
the RM1.2M house. They agreed to lower the budget for their new
house to RM800,000. By doing so, their chart looks like this, and
their wealth will now last until age 71 instead of 65.
Even if you do take some action, without

knowing the right direction you may be
heading further away from your financial
freedom.
89

(Stress Test for Reduced New House Budget)
Next, I asked Jerry if he would be agreeable to retiring later, at age

48, while working at slower pace. Instead of making RM300,000
per year, he can take on fewer clients to earn RM250,000. If he
agrees to do this, his roadmap will look like this:
Without big picture and a clear and suitable

route to get you to your own version of
financial freedom, it is all too easy to make
mistakes and waste your wealth unnecessarily.
Since our wealth is always limited, we should
optimise every single ringgit of our wealth,
instead of wasting it.
90

(Stress Test for Later Retirement Age and Lower Income)
From the roadmap, we can see that Jerry’s wealth will last longer
till he’s 82. Although Jerry and his wife were already thrilled with
the new vistas opening up in their life, I added icing to the cake. I
suggested that Jerry’s wife retire now to take care of the children.
In the meantime, I also suggested they increase their average
investment portfolio ROI from 5.52% to 8%. By taking these steps,
their roadmap will look like this:
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(Stress Test for Wife’s Immediate Retirement and Higher
ROI)
Based on the roadmap, Jerry’s wife will be able to stop working

now if they are able to achieve an average ROI of 8% which is not
a difficult target. Finally, Jerry and his wife agreed that this is truly
their Optimum Roadmap to Financial Freedom.
In order to follow their Optimum Roadmap to Financial Freedom,

Jerry and his wife will need to take the following optimisation
actions:
1. Restructure their existing investment portfolio from an
estimated average of 5.22% ROI to 8% ROI. They feel
confident taking a little risk to beat inflation and generate
some extra ROI.
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2. Jerry will slow down business activities to generate a lower

income of RM250,000 a year to reduce stress at work.
3. His wife can retire now to pay full attention to their
children.
4. They will settle for a more affordable new house costing
RM800,000 instead of RM1.2 million.
Optimum Roadmap to Financial Freedom for Jerry & His

Family
The Values of the Roadmap to Financial Freedom
With the help of the Roadmap to Financial Freedom, Jerry and his
wife discovered that the price being paid for Jerry’s early retirement
was simply not worth his sacrifices. Early retirement will only be
achieved at the expense of Jerry’s time and health, and importantly,
quality time with the children.
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Through the optimisation of their roadmap, Jerry and his wife

managed to re-design their life into a balanced and inspiring one.
By following their Optimum Roadmap to Financial Freedom, they
know that Jerry can afford to take it easy in his current business
and there’s no need to rush into early retirement. Jerry’s wife can
even afford to stop working now. For Jerry and his wife, this is a
good life, if not their dream life. By using their roadmap, they have
managed to rethink their life plan and explore other possibilities
that they might never have imagined before.
Of course, Jerry and his wife know they have not fully achieved
their financial freedom yet. However, they now have clear key
performance indicators (KPIs) to guide them towards financial
freedom. They are no longer in the dark when it comes to personal
finance.
They know that they can only spend RM72,000 on annual living
expenses and RM10,000 on their annual family vacation. They
know that they should achieve an annual ROI of 8% on average.
They also know that their budget for each child’s tertiary education
expenses should be RM200,000.
They can really grasp that sense of financial freedom now, not later.
At the same time, they have freed their minds of financial worry
and are free to spend time with their growing children. In short,
they have now become the master of their money, not servant to it.
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Chapter 10:
Harold – Over-Spending
Harold makes a good living as a top sales professional in a multi-

national corporation. Although Harold was only 39 when we first
met, he was already earning RM360,000 in annual salary and
bonus. However, he had almost zero savings every month. His
wife is an accountant in a public listed company. She makes about
RM120,000 salary and bonus annually.
Harold told me that he was interested in creating a roadmap to

find out where he stands on his journey to financial freedom. He
wants to know if he can retire comfortably at 55. He is aware that
he hasn’t been saving and accumulating his wealth, since he and
his wife have spent most of their income on maintaining their
expensive lifestyle. They use mostly branded or designer items,
live in a big and expensively-renovated semi-detached house and
take luxurious overseas vacations every year without fail. As age
catches up, Harold is becoming uneasy about how he and his wife
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spend their money. Therefore, he wants to find out where he stands

and how to move on from here.
The fact-finding process captured Harold’s financial details:

• He is 39 years old and his wife is 32.
• He has 3 children: 1 son aged 10 and 2 daughters aged 9 and
7 respectively.
• House – RM1,000,000 with RM700,000 mortgage loan
• He and his family currently enjoy a lifestyle of RM160,000
and income taxes.
• They spend about RM50,000 a year on family vacations.
• He and his wife intend to retire with RM160,000 living
expenses per year.
• Harold and his wife plan to work till age 55.
expenses at old age.
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Based on the information provided by Harold, do you think he will

After keying Harold’s information into the computer, I discovered

that his current Roadmap to Financial Freedom looked like this:
Current Roadmap to Financial Freedom for Harold & His

Family
From the roadmap, we can see Harold’s net worth is in the negative
from age 39 to 44 because his total investable assets are less than
his mortgage loan for his house during this period. From age 44 to
47, his net worth will be positive once again. However, Harold’s
net worth drops into the red again at the age of 48 when his eldest
child enters university and remains negative until Harold reaches
the age of 54. At 55, he withdraws his EPF and his net worth will
jump to about RM3 million. After that, his net worth will continue
97
to drop until his wife withdraws her EPF. By then, their net worth
will jump to about RM3 million and continue to drop till zero until
Harold hits 67. Therefore, we can see from the roadmap that their
wealth will last until Harold’s 67th year.
Although they knew they weren’t in good financial shape, Harold

and his wife had no idea that their finances were so atrocious. The
roadmap to financial freedom they created confirmed their gut
instinct that they had to take action before it was too late.
The first adjustment that I made for Harold and his wife was to
increase their average investment portfolio ROI from 5.57% to 8%.
By doing this, their family wealth will last till age 69.
Roadmap to Financial Freedom for Harold & His Family

(Stress Test for Higher ROI)
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Next, I asked Harold if he would agree to save another RM40,000

annually by reducing his current living expenses to RM120,000 per
year. By doing this, his roadmap will look like this:

(Stress Test for Increased Saving)
From the roadmap, we can see that Harold’s wealth will now
last longer till he’s 74. However, his wealth needs to last beyond
the age of 80. Therefore, Harold’s wife suggested reducing their
annual vacation budget from RM50,000 to RM30,000 annually.
She believes that they can have an enjoyable holiday with a lower
budget if they plan meticulously.
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(Stress Test for Lower Vacation Budget)
Once the Roadmap incorporates a reduced vacation budget of

RM30,000, we can see that Harold’s wealth will last till he hits 81.
Although this means that Harold and his family have achieved
their goal of financial security until his 80th year, there were other
positive changes that could still be made. In particular, I pointed out
to Harold that RM200,000 for each child would be insufficient to
fund a decent overseas tertiary education. I suggested that Harold
increase education funding for each child from RM200,000 to
RM300,000 and he agreed. Therefore, his adjusted roadmap looks
as follows:
100

(Stress Test for Higher Education Funding)
From the adjusted roadmap, we can see that Harold’s wealth will
last until the age of 78. As a result, we needed to make another
adjustment. I suggested that Harold adjust his retirement living
expenses from RM160,000 to RM144,000 and both Harold and his
wife agreed. With the new adjustment, their roadmap looks like it
does below. As you can see, Harold’s wealth will last till the age of
81.
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(Stress Test for Lower Retirement Living Expenses)
At the end of Harold’s Roadmap to Financial Freedom exercise,

Harold and his wife have managed to produce an optimum roadmap.
Harold and his wife will need to take the following optimisation
actions:
estimated average of 5.27% ROI to 8% ROI.
2. Harold will start a new regular saving programme to save an
additional RM40,000 a year.
3. Harold’s wife will plan their holidays within the annual
budget of RM30,000.
4. They will increase their children’s tertiary education funding
from RM200,000 to RM300,000 per child.
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5. They will adjust their retirement living expenses from

RM160,000 to RM144,000 per year.
Optimum Roadmap to Financial Freedom for Harold & His

Family
The Values of Roadmap to Financial Freedom
Thanks to the roadmap, Harold and his wife discovered they are
not saving and growing their wealth sufficiently to achieve their
financial freedom. However, the Roadmap’s timely diagnosis meant
that it is not too late to start saving more during their prime earning
years.
By optimising their roadmap, Harold and his wife discovered that

they can still achieve their financial freedom without drastically
changing their current life style too much, and making only some
small adjustments. Now they can banish their guilt and truly enjoy
their life and lifestyle with complete peace of mind. In order to
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monitor your progress it is important to update your roadmap at

least once every year to increase its accuracy.
Of course, Harold and his wife know that they have not fully achieved
their financial freedom yet. They still have a few key performance
indicators (KPIs) to monitor. They know that they have a yearly
budget of RM120,000 for living expenses and RM30,000 for
annual family vacations. They should invest to achieve an annual
ROI of 8% on average, and they have set their budget for each
child’s tertiary education expenses at RM300,000.
Thanks to the Roadmap, they are no longer lost lambs when it comes
to personal financial management. With the Roadmap’s guidance,
they are firmly on the path to achieving their own brand of financial
freedom.
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Chapter 11:
William - The Robert Kiyosaki of Malaysia
Business owner William is a great fan of Robert Kiyosaki. He

religiously applied what he learned from Kiyosaki’s books and
invested in several properties. He is convinced that by investing
in these properties, he can collect rent to pay his loan installments.
Eventually, when the loans are settled, he will fully own the
properties and enjoy the passive income. This is definitely a
fantastic idea. Over the last seven years, William has invested in
12 properties, which he is still holding. He put most if not all of his
savings into property investments believing that these will make
him very wealthy, just like Robert Kiyosaki.
When he invested in his first three properties, his plan was on track.
He collected rental to service his loan installments and property
management fees. However, his luck didn’t hold. After investing
in more than five properties, he couldn’t get tenants for some
properties.
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When we met, William had about RM6.6 million worth of properties

but total rental collection was only RM120,000 per year. Seven
properties were not rented out. Out of the seven properties, three
were not properly maintained because they were located in a less
than prime area. Another property was abandoned halfway through
construction, but William still has to service the loan.
My fact-finding process revealed the following financial details

about William and his wife:
• He has 4 children: 2 sons aged 12 and 9, and 2 daughters aged
6 and 2 respectively.
• He earns an annual income of RM400,000, while his wife
doesn’t work.
• A fully paid-up house – RM1,200,000.
• Properties – RM6,600,000 with mortgage loans of
RM3,200,000.
• Bank Deposits – RM150,000.
• EPF – RM650,000 (himself), RM80,000 (wife).
and income taxes. They spend another RM50,000 on their
annual vacation.
• He intends to retire with RM120,000 living expenses per
year.
• William plans to work till age 55.
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expenses at old age.
Based on the information provided by William, do you think he

will be able to retire at age 55? Will his wealth last beyond the age
of 80?
William’s current Roadmap to Financial Freedom looked like this:
Current Roadmap to Financial Freedom for William & His

Family
From the Roadmap, we can see William’s net worth excluding his
home and EPF is about RM3.7 million. His net worth will grow
to about RM4.8 million when he reaches age 50. After that, his
net worth will drop slightly when his eldest son goes to university.
At 55, he withdraws his EPF and his net worth will jump to about
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RM6.2 million. Subsequently, his net worth will continue to drop

until hitting zero at age 69. From the Roadmap, we can see that his
wealth will only last until William is 69 years old.
All along, William was quite concerned with the performance of

his property investment, which wasn’t quite fantastic. However,
he didn’t know how it would affect his overall financial position.
Despite the setbacks, he still has enough income to pay his mortgage
installments. As a result, he doesn’t feel the pain of his unsuccessful
property investments.
This is a common problem among high-income earners. High-

income earners never really feel the agony of their wrong investments
because their high income helps them absorb the losses. What they
don’t realise is that they still have to pay the opportunity cost of
these mistakes. Had they not needed to pay mortgage installments,
they would have been able to divert their wealth to a higher-earning
opportunity. Most people only realise the pain of these erratic
investments when their income drops or ceases. By then, it will
be too late to do anything. The peak income earning years which
could have been spent in accumulating significant wealth have been
wasted.
William is lucky that he realised the calamity of his situation in his

prime, while he can still take the necessary measures to salvage his
wealth.
By using the Roadmap to Financial Freedom, William finally got

the big picture of his personal finances.
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My first recommendation to William is to review his property

investment portfolio. By selling his non-performing properties at
RM3.3 million, he will reduce his mortgage loans from RM3.2
million to RM1.6 million. From the sale, he would raise about
RM1.7 million cash to invest into other investment asset classes.
The idea is to generate better investment ROI and at the same time,
achieve better asset diversification. If William is not able to sell the
properties at RM3.3 million, he can afford to lower his asking price
by RM500,000 just to get rid of them. In this worse case scenario,
he will raise RM1.2 million cash after selling the properties. By
reducing his mortgage loans, he will also reduce his monthly
mortgage loan repayment from about RM24,000 to RM12,000.
In addition, he must also actively look for a tenant for one vacant
property that he intends to keep. If he does this, he will generate
an additional RM40,000 in rental every year. By reviewing and
restructuring his property investment, we can see that his wealth
will last longer.
High-income earners never really feel the

agony of their wrong investments because
their high income helps them absorb the
losses. What they don’t realise is that they
still have to pay the opportunity cost of these
mistakes.
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Roadmap to Financial Freedom for William & His Family

(Stress Test for Reduced Property Holding)
From the Roadmap, we can see that William’s wealth will now last
longer until he is 75 years old. By lowering his opportunity cost
through getting rid of non-performing properties, William is able to
free up his cash and increase his cash flow by reducing his monthly
mortgage repayment. He can then invest the extra cash into other
investments to generate better returns.
Next, I asked William if he could adjust his annual vacation budget

from RM50,000 per year to RM25,000. I suggested that they can
reduce their two expensive overseas trips to one expensive annual
trip. Alternatively, they can still go for two less expensive overseas
trips. If he agreed to do that, his roadmap will look like this:
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Roadmap to Financial Freedom for William & His Family

From the Roadmap, we can see that William’s wealth will now
last longer until he is 81 years old. By restructuring his property
investment portfolio and adjusting his vacation budget, William
and his wife have managed to produce an optimum roadmap for
themselves.
To recap, in order to follow their Optimum Roadmap to Financial

Freedom, William and his wife will need to take the following
optimisation actions:
1. Sell off non-performing properties worth about RM3.3
million. Even if they have to sell at a loss, they can afford
to discount the price by RM500,000 to get rid of the
properties.
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2. Invest the extra cash from property sales and monthly

cash flows to generate an average 8% ROI. They can now
see the benefits of diversifying from property into other
investments.
3. Get a tenant for one of his vacant properties for a minimum
annual rent of RM40,000.
4. Reduce their annual vacation budget from RM50,000 to
RM25,000.
5. Maintain their annual living expenses at RM120,000.
Optimum Roadmap to Financial Freedom for William & His

Family
By producing a Roadmap to Financial Freedom for their family,

William and his wife found out that they have not been optimising
their wealth due to a skewed emphasis on property investment.
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Thankfully, they discovered this early so that they don’t hold on to

the non-performing properties for too long. The longer they hold
on, the higher the opportunity cost. Excellent property management
is critical to ensuring that your property remains an asset and not a
liability.
By optimising their Roadmap, the Williams discovered that they can

still achieve their financial freedom without radically changing their
current lifestyle. All they need is to restructure their investments.
After this exercise, they can better enjoy their comfortable lifestyle
without feeling insecure.
Of course, William still has a few key performance indicators (KPIs)

to monitor to keep his personal finances in order. He knows that
he should only spend RM120,000 for family living expenses and
RM25,000 for annual family vacations. He knows that they should
invest to achieve an annual ROI of 8% for their wealth. Best of all,
William and his wife will be able to provide RM500,000 each for
tertiary education expenses for their four children.
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114
Chapter 12:
Esmond - Start Planning Early
(The Early Bird Catches the Worm)
After one of my seminars, Esmond, a 32-year old engineer, enquired

if it’s too early for him to create a Roadmap to Financial Freedom.
I assured him that it is never too early to start on a roadmap to help
guide your personal financial management. In fact, the earlier you
start, the more advantages you enjoy.
One week later, Esmond came to my office with his wife, a secretary.
They got married five years ago and now have a son aged 4 years.
Esmond told me that he and his wife would like to make sure that
they save enough for his son’s tertiary education. Therefore, they
want a Roadmap to Financial Freedom to see how they can make
that happen. Although their income might be small now, they are
willing to make some sacrifices and adjustments to achieve their
goal.
I assured them that we can always achieve an optimum point in

our financial management by using the Roadmap to Financial
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Freedom. Since they are willing to start early, they will have even
more options and opportunities to optimise their wealth.

about Esmond and his wife:
• They have a son aged 4.
• House – RM250,000 with RM200,000 mortgage loan
• He and his family spend about RM48,000 per year, excluding
his mortgage loan repayments, insurance premiums and
vacation expenses.
• They spend about RM5,000 for their annual overseas
holiday.
• He and his wife intend to retire with RM48,000 living expenses
per year at age 55.
• They would like to provide RM200,000 for their son’s tertiary
education.
Based on the information provided by Esmond, do you think he will

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After keying in Esmond’s financial information into the computer,

the current Roadmap to Financial Freedom for the Esmonds looked
like this:
Current Roadmap to Financial Freedom for Esmond & His

Family
From the Roadmap, we can see that Esmond’s net worth is in

negative territory from age 32 to 39 because his home liability is
bigger than his total net worth. His net worth will start growing
again from age 39 to about RM111,000 when he is 45. His net worth
drops to negative again at age 46 when his son enters university.
Subsequently, his net worth remains negative until age 55. At age
55, his net worth rises to RM727,000 when he retires and withdraws
his EPF. Three years later, when his wife retires and withdraws her
EPF, their net worth rises to about RM1.4 million. From there, their
net worth will continue dropping till zero at age 66.
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Both Esmond and his wife were quite unhappy with their current
roadmap. Despite all their hard work and controlled spending, they
still can’t achieve their simple financial goals.
Is there anything they can do? First, I suggested that they increase
their investment ROI. Currently, their investment ROI is only at
5.36%. I told them that they must be willing to take some risk to
generate higher ROI. They should target an investment ROI of 9%.
If they are able to increase their ROI to 9%, their roadmap will look
like this:
Roadmap to Financial Freedom for Esmond & His Family

By increasing their ROI, their wealth will last slightly longer until
age 68. Next, I asked the couple if they are willing to reduce their
annual vacation expenses from RM5,000 to RM3,000. They can
either take their annual vacation in Malaysia or go for an overseas
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holiday once in every two years. If they agree, their roadmap will
look like this:

(Stress Test for Lower Vacation Expenses)
From the Roadmap, we can see that Esmond’s wealth will last
longer until he’s 72 years old. That’s still not good enough since
Esmond would like to see that his wealth will last till age 80.
Next, I suggested that they adjust their retirement living expenses

to stretch their wealth. After much discussion, they believe they
can still enjoy a decent lifestyle on RM3,000 because by then they
would no longer be paying mortgage installments and insurance
premiums. If they make these adjustments, their roadmap will look
like this:
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(Stress Test for Lower Retirement Living Expenses)
By adjusting their retirement living expenses to RM3,000 per

month, Esmond and his wife will be able to make their wealth
last until Esmond’s 80th year. Finally, they agreed that this is their
Optimum Roadmap to Financial Freedom.

the Esmonds will need to take the following optimisation actions:
1. Restructure their existing investment portfolio with estimated
average of 5.36% ROI to 9% ROI. They feel comfortable
taking extra risk to generate a higher ROI. Their relatively
young ages allow them the leeway to take higher risk.
2. They will reduce their annual vacation budget from RM5,000
to RM3,000.
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3. They will adjust their retirement living expenses to RM3,000

per month.
Optimum Roadmap to Financial Freedom for Esmond & His

Family
With the help of the Roadmap to Financial Freedom, Esmond and

his wife are now confident that they can adequately provide for their
son’s tertiary education and their retirement despite their middle
income bracket.
Through an optimum Roadmap, the Esmonds will be able to live a

reasonably comfortable life within their means. Even though they
won’t enjoy a luxurious lifestyle, they know that they can still afford
a decent life and achieve their financial goals. Knowing this, they
can stop worrying about their financial future and start exploring
other ways to enrich and fulfill their lives.
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Of course, their Roadmap to Financial Freedom is not static. It

will be dynamic and evolve according to the changes in their lives.
If their income increases in future, they can always adjust their
roadmap to see if they can allocate a larger budget for their financial
goals. However, the Roadmap will only be updated as and when
they receive their increments.
In the meantime, Esmond and his wife know that they have to monitor
certain key performance indicators (KPIs) to keep themselves on
track. They know that they should only spend RM48,000 for living
expenses and RM3,000 for their annual family vacation. They
know that they should achieve an annual ROI of 9% on average for
their saving and assets. They also know that they can only afford
RM200,000 for their son’s tertiary education.
Now, financial security and freedom are within their grasp. At the
same time, they feel they can now focus more on their careers and
family rather than worrying about money. Essentially, they have
now become the master of their money and not the other way
around.
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Chapter 13:
Peter - Optimising his Family’s Financial
Security
I met Peter at a seminar I gave at his company. He was especially

concerned about his family’s financial security after I shared the
challenges of managing personal finance for single mothers.
Peter knows that he has neglected the issue of providing adequate
insurance coverage in the event of his death.
The reason for this lay deep within his childhood subconscious.
When Peter was young his father was cheated by an insurance
agent. Instead of paying his father’s premiums towards the policy,
the insurance agent spent it. Peter’s father became aware of the
fraud only after many years. Since the incident, Peter’s family has
turned away all insurance agents. Until today, Peter has very little
insurance coverage. The only insurance policy he has was purchased
when his first child was born at his wife’s insistence.
Knowing his aversion to insurance and financial planning, Peter’s

wife was quite taken aback at Peter’s initiative to explore their
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financial planning but gladly joined him during our meeting. After
some preliminary discussion, I found out that Peter holds a very
senior position in his company despite his young age. As the senior
marketing manager, he earns a salary and additional sales incentives.
His wife is a full-time homemaker taking care of their two sons.

about Peter and his wife:
• He has two sons aged 8 and 5.
• He earns RM240,000 in annual income.
• His wife doesn’t have any income after she stopped working
two years ago.
• Unit Trusts (bond funds) – RM150,000
and income taxes.
• Currently, they spend about RM5,000 for their annual family
vacation.
• He and his wife intend to retire at 55 with RM60,000 in annual
living expenses till Peter’s 80th year.
• They would like to provide RM200,000 each for their sons’
tertiary education.
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Based on his financial information, I plotted a Roadmap to Financial

Freedom for Peter which looked like this:
Current Roadmap to Financial Freedom for Peter & His

Family
From the roadmap, we can see Peter’s net worth will grow to about
RM1.2 million when he is 45. His net worth will drop to RM990,000
at age 46 when his eldest son enters university. Subsequently, his
net worth will grow to RM1.2 million again at age 48. At age 49,
his net worth will drop to RM855,000 when his second child enters
university. His family’s net worth will peak in Peter’s 57th year
when his wife withdraws her EPF. From thereon, his wealth will
start dropping continuously when he and his wife have no more
active income. Based on their roadmap, we can see that their wealth
will zero out by the time Peter reaches the age of 71.
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The roadmap didn’t come as a surprise to Peter because he knew

that he hasn’t been making his money work hard enough. The
average annualised ROI for his wealth is only 3.76%. At that rate,
his wealth will shrink instead of growing due to inflation. I asked
Peter and his wife if they are willing to take some extra risk and
effort to increase average ROI to about 8% and they agreed. Based
on this assumption, their revised roadmap looks like this:
Roadmap to Financial Freedom for Peter & His Family

We can see that Peter’s wealth will now last till he is 86. Both Peter
and his wife were thrilled to discover that they can achieve financial
freedom just by increasing their investment ROI to 8%, which they
consider a tiny adjustment. In addition, I suggested they also adjust
their roadmap to take Peter’s premature death into account:
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(Stress Test for Death Scenario)
Although this isn’t a welcome assumption, it is necessary. If Peter

were to die prematurely, his wealth will only last until his wife is 43.
Their sons would only be 17 and 14 and would not have completed
their tertiary education yet. After further discussion, Peter and his
wife both agreed that their wealth should last at least until their
younger son reaches 22. By then, both sons would have completed
their tertiary education and be able to start generating income. At
that point, Peter’s wife should be 51.
In order to make his wealth last longer in the event of his early
death, Peter will need to get additional insurance coverage for
RM700,000. I suggested that Peter get term insurance which carries
a cheaper premium. In addition, the family will also need to adjust
127
their living expenses after Peter’s death to RM48,000 per year. With
those adjustments, Peter’s roadmap will look like this:

(Stress Test for Additional Life Insurance and Lifestyle
Adjustment in the Event of Premature Death)
In order to enjoy additional cover of RM700,000, Peter would

need to pay an additional annual premium of RM3,836. With that
additional expense, his roadmap will look like this:
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(Stress Test for Extra Insurance Premium Expenses)
Now their wealth will last till Peter’s 83rd year and not his 86th
year.
The Value of the Roadmap to Financial Freedom
With the Roadmap to Financial Freedom, Peter and his wife

discovered that they have not been making their money work
hard enough. Most important of all, they now know how dire their
financial situation will be if Peter passes away prematurely. Both
Peter and his wife know that they can’t afford to let that happen.
By using different roadmap assumptions, they ascertained the

correct amount of insurance coverage needed to fulfill their wishes.
Otherwise, they would have made the mistake of either being over-
insured or under-insured. With the help of the Roadmap, Peter can
129
now comprehend the importance of adequate insurance for family

security.
Optimum Roadmap to Financial Freedom for Peter & His

Family
With the Optimum Roadmap to Financial Freedom, Peter and

his wife know that they can continue to enjoy their current
lifestyle. However, they know that they have to monitor a few key
performance indicators (KPIs) to fulfil their goals. They know that
they are limited to spending RM84,000 for yearly living expenses
and RM5,000 for their annual family vacation. They know that they
should achieve an annual ROI of 8% on average for their overall
wealth. They also know that they can only afford RM200,000 for
their sons’ tertiary education. If they really want to increase this
provision, they have to review and update their Roadmap.
130
Previously, Peter’s wife had always been concerned about the

family’s financial security should Peter die prematurely. However,
she didn’t know how to convince Peter to effectively address this
concern. Now, she is relieved that the family will be financially
secure despite the loss of the main breadwinner and this has given
her the peace of mind that she lacked before. Both Peter and his
wife have acquired an immediate sense of financial security and
freedom now, which is one of the most important foundations of
any happy family. Don’t you think so?
By using different roadmap assumptions, we

ascertain the correct amount of insurance
coverage needed to fulfill our wishes.
Otherwise, we would have made the mistake of
either being over-insured or under-insured.
131
132
Chapter 14:
Debbie - Single Mother Seeks Financial
Freedom
In mid-2008, I received an inquiry from Debbie, a lady from Johor

Baru. She told me she wanted an independent advisory service for
her personal wealth management. However, I told her that we only
serviced clients with a minimum of RM2 million in assets, and she
didn’t meet this criterion.
Although I suggested that Debbie look for an alternative financial

coach, she complained about the difficulty of getting a professional
and independent advisor. All along, the “financial planners” that
she had consulted so far only wanted to sell life insurance and unit
trusts. None provided independent and professional advice.
She begged me to reconsider her case due to the fact that she is
a single mother with a minor child, which makes her financial
situation more complicated than usual. Due to my business policy,
I had no choice but to turn her away politely.
133
After putting down the phone, I felt guilty for turning Debbie
down. I felt selfish for not sharing my knowledge and experience.
To atone, I became determined to help this single mother. By
modifying a tool in Whitman’s Family Office service, I designed
a new service to help Malaysian families like Debbie achieve their
financial freedom.
That’s how the Roadmap to Financial Freedom was born, and that’s
how Whitman started to offer our service to all Malaysians. When
we were ready to launch the service, I called Debbie and offered
the service to her free of charge in return for her “showing me the
light”, so to speak.
When Debbie came to my office, she shared the following financial

details:
• She is 42 years old.
• She has a son aged 14.
• She earns RM60,000 in annual income.
• She has the following financial assets:
• EPF – RM200,000
• She and her son spend about RM36,000 per year excluding
mortgage loan repayments, insurance premiums and vacation
expenses.
• They spend about RM1,000 for their annual local holiday.
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• She intends to retire at age 55 and would like to provide

RM24,000 in annual retirement living expenses until the age
of 80.
• She would like to provide RM180,000 for her medical
• She would like to provide RM300,000 for her son’s tertiary
education.
After keying in Debbie’s financial information, her current Roadmap

to Financial Freedom looked like this:
Current Roadmap to Financial Freedom for Debbie & Her

Son
From the current roadmap, we can see that Debbie’s net worth
(excluding her home and EPF) will grow to about RM280,000 when
she is 45. Her net worth will drop to negative when she is 46 and
her son enters university. Subsequently, her net worth will remain
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negative until the age of 55. At 55, her net worth rises to about
RM500,000. From then on, her net worth will continue dropping
until it zeroes out at age 65.
Though her roadmap doesn’t look good, Debbie can still take action
to improve her situation.
First, I suggested she increase her investment ROI from 4.22% to

8%. She must be willing to take some risk with her fixed deposits
to generate higher ROI and beat inflation. If she can get 8% for her
money, her roadmap will look like this:
Roadmap to Financial Freedom for Debbie & Her Son

By increasing her wealth’s ROI to 8%, her wealth will last slightly
longer till the age of 69. Next, I asked Debbie whether she prefers
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to work beyond 55 or adjust her son’s tertiary education funding. If

she prefers to work till 61, her roadmap will look like this:

(Stress Test for Working till Age 61)
On the other hand, if she prefers to adjust her son’s tertiary education
funding from RM300,000 to RM180,000, her financial roadmap
will look like this.
137

(Stress Test for RM180,000 Tertiary Education Funding)
After some thinking, Debbie told me that she doesn’t like either
option. She asked me to adjust her son’s tertiary education funding
to RM250,000 and see how long she needs to work.
138

(Stress Test for RM250,000 Tertiary Education Funding &
Extended Years of Work)
By limiting her son’s tertiary education funding to RM250,000, we

discovered that Debbie only needs to work for three years more
until the age of 58 to make her wealth last till the age of 80. Finally,
this was Debbie’s Optimum Roadmap to Financial Freedom.
Debbie was thrilled that she will be able to achieve her goals and
her financial freedom despite her challenging situation.
In order to follow her Optimum Roadmap to Financial Freedom,

Debbie will need to take the following optimization actions:
1. Restructure her existing investment portfolio (which is
mainly in fixed deposits) with an estimated average of 4.22%
ROI to 8% ROI. She feels comfortable taking extra risk to
generate higher ROI.
139
2. Debbie will reduce her son’s tertiary education funding from

RM300,000 to RM250,000.
3. Debbie will work till age 58 instead of age 55.
Optimum Roadmap to Financial Freedom for Debbie & Her

Son
With the help of the Roadmap to Financial Freedom, Debbie

discovered that she can still adequately provide for her son’s tertiary
education and her retirement despite her being a single middle-
income earner. This is very inspiring for her and she is now very
optimistic about the future.
Through the help of an optimised roadmap, Debbie and her son have
been able to design an ideal life within their limitations. Although
they won’t be able to enjoy a luxurious life style, they know that
they can still afford a decent and steady life. Knowing this, she can
140
cease worrying about their financial future and focus on bringing up

her son, which will be her life’s greatest achievement.
Helping people find their optimum solutions for financial freedom

is the most satisfying and meaningful part of my work. I was
especially touched and satisfied to be able to help Debbie to achieve
her financial freedom despite her limitations. Best of all, Debbie’s
case gave me the confidence that the Roadmap to Financial
Freedom can also benefit a lot of people with low or middle
incomes.
Of course, Debbie’s roadmap to financial freedom would not be

static. It will be dynamic and change according to the phases in
her life. In the meantime, Debbie knows that she has to monitor a
few key performance indicators (KPIs) to keep her on track. She
knows that she must limit spending on annual living expenses
to RM36,000, other than her insurance premiums and mortgage
repayments. Debbie will spend about RM1,000 on their annual
family vacation. She also knows that she should achieve an annual
ROI of 8% on average.
With the help of the Roadmap to Financial

Freedom, Debbie discovered that she can
still adequately provide for her son’s tertiary
education and her retirement despite her being
a single middle-income earner.
141
Most important of all, Debbie knows that she can still be the master
of her money despite her challenging circumstances. That’s truly
inspiring. The Roadmap to Financial Freedom can assist income
earners of all levels to achieve their own financial freedom.
Debbie has inspired Whitman Independent Advisors and myself to
give back to Malaysia. Log onto www.whitman.com.my for more
information on how we work to assist single mothers achieve their
own level of financial freedom.
142
Chapter 15:
Tony - To Work or Not to Work? That is the
Question
Tony was introduced to me by another client, Donald. They both

worked in the same multi-national corporation. When I met Tony,
he was 54 and had been offered a contract to continue working for
another three years once he reached the retirement age of 55. The
compensation package to be offered would be the same as what
Tony enjoys now. Tony was, of course, tempted to accept the offer
due to the additional income opportunities.
On the other hand, he has been working very hard for the last 30
years. Understandably, he longs to enjoy his golden retirement
years, and would even like to retire straightaway if possible. Despite
various discussions with his wife, Maggie, he still couldn’t make up
his mind.
Donald suggested that Tony see us for a solution, and Tony and
Maggie came to our office a week later.
143

about Tony and Maggie:
• He is 54 years old and Maggie is 48.
• He has a son aged 23 and a daughter aged 17.
• He earns RM160,000 in annual income as a senior project
manager.
• His wife works as a human resources manager in another
company with an annual income of RM140,000.
• House – RM750,000 with a RM250,000 mortgage loan.
and income taxes.
• They spend about RM5,000 for their annual family vacation.
• He and his wife intend to retire at 55 and provide RM72,000
in annual retirement living expenses until Tony’s 80th year.
• They would like to provide RM300,000 each for their medical
• Their son has already graduated from university in Australia.
They would like to provide RM200,000 for their daughter’s
tertiary education.
When I plotted a Roadmap to Financial Freedom for Tony, his

roadmap looked like this:
144
Current Roadmap to Financial Freedom for Tony & His

Family
From the roadmap, we can see Tony’s C urrenet

nt worthAdjus willte dgrow to
about RM1.3 million when he is 55. Although A d justehis
d daughter
C urre nt enters
university in that same year, his net worth will still grow due to the
withdrawal of his EPF monies. Subsequently, his net worth will
peak at RM2.5 million at age 61 when his wife withdraws her EPF.
From then on, his wealth will start dropping continuously when he
and his wife have no more active income. From the roadmap, we
can also see that their wealth will last till Tony is 80.
Tony and Maggie were quite happy to find out that their wealth
can last till Tony’s 80th year. Before the meeting, they were unsure
if they could live comfortably once they retired at age 55. The
roadmap clearly gave them the answer they were searching for.
With the roadmap’s guidance, Tony decided almost immediately
145
that he will not accept his company’s offer to work for another three
years and Maggie greatly supported his decision.
However, I urged Tony and Maggie not to stop there. I suggested

they explore further options to identify their optimum financial
needs and wants.
First, I suggested they increase their average ROI from 5% to 8%.

If they are able to increase their ROI to 8%, their roadmap will look
like this:
Roadmap to Financial Freedom for Tony & His Family

From the roadmap, we can see that generating

C urre nt 8%Adjus
ROIte dfor their
wealth will make it last until Tony’s 105th year.A d juste d C urre nt
After seeing the roadmap, Maggie told me that they don’t need
their wealth to last that long. Instead, she would rather increase
146
her daughter’s tertiary education funding from RM200,000 to

RM300,000. Tony agreed. After increasing their daughter’s tertiary
education funding to RM300,000, their Roadmap will look like
this:

(Stress Test for RM300,000 in Tertiary Education Funding)
From the roadmap, we can see that theirC urre

wealth
nt will last
Adjus until
te d Tony’s
100th year. They are delighted to know that they A d justecan

d afford
C urre nt to spend
more for their daughter’s tertiary education, which will give their
lives a lot of meaning and satisfaction.
Next, I asked them if they would like to increase their budget for
their family vacation. Maggie would love to double their annual
vacation budget to RM10,000, which give them the flexibility of
choosing a foreign destination nearby. I adjusted the roadmap as
requested and it looked like this:
147

(Stress Test for a Larger Vacation Budget)
This roadmap showed that their wealth will

C urre nt last until AdjusTony’s
te d 94th
year. At this point, Tony voiced his concernA that
d juste d they might
C urre nt spend
more and yet fail to achieve 8% ROI. Tony prefers to have a buffer
in case they don’t realize an 8% ROI. Given his reservations,
I suggested they aim for 7% ROI instead of 8% ROI. After the
adjustment, the roadmap looked like this:
148

(Stress Test for 7% ROI)
With expected ROI at 7%, their wealthC urrewill

nt last till
Adjus Tony’s
te d 85th
year. Both Tony and Maggie felt much moreA d juste
comfortable
d C urre nt with the
new ROI goal, which suited their risk appetite. Finally, they have
found their Optimum Roadmap to Financial Freedom.
Tony and Maggie discovered that they are most comfortable with
the following optimisation actions:
1. Restructuring their existing investment portfolio from an
estimated average 5% ROI to 7% ROI. They feel that 7% is
more attainable than 8%.
2. Tony will not accept his company’s offer for extended
employment and will retire at age 55.
149
3. They will spend RM10,000 for their annual family vacation.

Maggie is very keen to explore new destinations that were
previously beyond their budget.
4. Increasing their daughter’s tertiary education funding from
RM200,000 to RM300,000. They are delighted that they can
provide a more expensive education which they believe is
the perfect present for their daughter.
Optimum Roadmap to Financial Freedom for Tony & His

Family
The Values of the Roadmap to Financial

C urre ntFreedomAdjus te d
A d juste d C urre nt
With the help of the Roadmap to Financial Freedom, Tony and
Maggie can now confidently make their decision regarding the best
time for retirement. Without the Roadmap, Tony would probably
have accepted the offer to continue working for another three years.
He would have made the decision in the dark without knowing there
150
were other better options. That could have cost him three good years
which could be used to pursue other interests and passions.
Through the optimisation of their roadmap, Tony and Maggie have

redesigned their life into a better one. By following their Optimum
Roadmap to Financial Freedom, they know that they can afford to
enhance their quality of life by taking better vacations. They also
have the assurance that they can provide a fine tertiary education
for their daughter.
Tony and Maggie know that they have to follow a few key
performance indicators (KPIs) in their personal wealth management
to really enjoy the fruition of their plans. They know that they are
limited to spending RM96,000 for annual living expenses and
RM10,000 for their annual family vacation. They know that they
should achieve annual ROI of 7% on average. They know they
must keep to the budget of RM300,000 for their daughter’s tertiary
education expenses. By following these clear KPIs, they are imbued
Without the Roadmap, Tony would probably

have accepted the offer to continue working
for another three years. He would have made
the decision in the dark without knowing there
were other better options. That could have cost
him three good years which could be used to
pursue other interests and passions.
151
with a sense of security knowing that they are on track to their

financial freedom. They have discarded the feelings of uncertainty
that used to nag at them.
Now they can really grasp the sensation of financial freedom and
look forward to enjoying their golden years, very soon!
152
Chapter 16:
Philips – Tired of the Rat Race
I’ve known Philips through business connections for more than 5

years and we both belong to a CEO membership body. Philips is the
owner of a small accounting firm. One day, when we met for lunch,
he shared with me his strong desire to stop working and spend
more time with his children. His two teenagers are very rebellious
and cause plenty of stress and problems for Philips and his wife
Jane. Philips is worried that if he doesn’t spend more time with his
children, his family problems may escalate in future.
At the same time, he is tremendously exhausted running his

accounting firm. He faces a lot of stress from having to meet a
multitude of deadlines every year. After spending 20 years of his
life in the industry, he has had enough. Philips has contemplated
selling his accounting firm many times and retiring completely but
fears taking the plunge in case he hasn’t saved enough to finance
his retirement years.
153
As an advocate of the Roadmap to Financial Freedom, I suggested

he draw up a roadmap to guide him out of his financial indecision
and he agreed.
One week later, Philips and his wife, Jane came to my office.
Without further ado, I conducted a fact-finding process and found
that Philips and his wife have the following financial details:
• He is 46 years old and Jane is 44.
• He has a son aged 16 and a daughter aged 13.
• His wife assists him in his accounting firm as the human
resources manager with RM60,000 in annual income.
• House – RM630,000 with a mortgage loan of
RM250,000.
• A fully paid-up shophouse valued at RM800,000 and
generating RM2,500 in rental per month
• Unit Trusts (Bond funds) – RM480,000
• Bank deposits – RM280,000 (local), RM100,000
(Singapore)
• EPF – RM430,000 (himself), RM200,000 (Jane)
and income taxes.
• He and his wife intend to retire 2 years later when Philips is
48 and have budgeted RM60,000 for annual retirement living
expenses until Philip’s 80th year.
154
• They don’t have a budget for their family vacation.

children’s tertiary education. If possible, they would like to
provide more.
• They intend to provide RM300,000 each for their critical
medical expenses.
When I plotted a Roadmap to Financial Freedom for Philips, his

current roadmap looked like this:
Current Roadmap to Financial Freedom for Philips & His

Family
From the roadmap, we can see Philips’ C urre net

nt worthAdjuswill te dgrow to
about RM2 million when he is 47. His net worth A d juste d drops
C urre nt to RM1.6
million at age 54 after his two children complete their tertiary

education. After that, his net worth will continue to grow until it
155
peaks at RM2.7 million at age 64. From thereon, his wealth will
start dropping continuously until it hits zero in Philips’s 80th year.
Philips and his wife were delighted to know that that their wealth
can last them till age 80 even if they were to stop working two years
later, when Philips is 48 and his wife 46. They never imagined that
their dream scenario would be possible. They always thought that
they could only afford to retire at age 55, like most other people.
This was the best piece of news that they had heard in a while.
Although the couple was already satisfied, I insisted on finding

other means to optimise their roadmap and increase their quotient
of financial freedom. One glaring fact was that Philips’ current ROI
on his overall investment portfolio stood at 4.27%, which is rather
low. So, I suggested that Philips increase his ROI to 7%.
Roadmap to Financial Freedom for Philips & His Family

(Stress Test for 7% Portfolio ROI)
156 A d juste d C urre nt
As a result of higher ROI, Philips’s wealth will easily last him

beyond his 100th year. Knowing this, I asked Philips what he would
do differently given the new scenario. Even before Philips could
answer, Jane said that she would like to increase their children’s
tertiary education funding to RM350,000.

(Stress Test for Higher Tertiary Education Funding)
Based on Jane’s wish, we performed aCstress

urre nt test to Adjus
see te the
d impact
of increased education funding on their roadmap.

A d juste d C Based
urre nt on the
roadmap above, Philips’ wealth will still last beyond his 96th year.
This proves the power of compounded ROI. With less than a 3%
increase in portfolio ROI, Philips’ wealth can last so much longer.
Next, I suggested they provide RM10,000 for an annual family

vacation. Both of them agreed immediately.
157

(Stress Test for Family Vacation Provision)
Based on the adjusted roadmap, we can see

C urre nt that their Adjuswealth
te d will
still last till Philips’ 88th year despite the extra RM10,000 annual
vacation expenses.
Next, I suggested that Philips and Jane explore the possibility of

even retiring now.
158

(Stress Test for Philips to Retire at 46)
Based on this assumption, their wealthC urre

willnt be used Adjus
up by te d Philips’
75th year, which was worrisome for the couple. Therefore, I showed
them an adjusted roadmap assuming that both of them will retire 1

year later when Philips is 47.
159

(Stress Test for Philips to Retire at 47)
The latest roadmap showed them thatC urre

their
nt wealth Adjuswilltelast
d them
till Philips’ 82nd year. Needless to say, Philips and Jane were
delighted with the final optimised roadmap, which had ironed out
their financial indecision.
After a few rounds of stress-testing and adjusting their financial

needs and wants, Philips and Jane finally mapped out their Optimum
Roadmap to Financial Freedom. They found that that they are most
comfortable with the following optimisation actions:
1. Restructure their existing investment portfolio with an
estimated average of 4.37% ROI to 7% ROI, which will see
them taking on a comfortable level of added risk to generate
higher returns.
160
2. Philips will retire one year later at age 47 and his wife will
retire at age 45.
3. They will increase their children’s tertiary education funding
from RM250,000 to RM350,000. To them, that is the best
present they can give to their children in addition to spending
more time with them.
4. They will spend RM60,000 every year for living expenses
during retirement.
5. They will budget RM10,000 per year for their family vacation.
Both Philips and Jane are very excited about this and have
already started planning their vacation destination.
Taking into consideration the combined effect of various

optimization actions, the Optimum Roadmap to Financial Freedom
for the Philips will look like this. Their wealth will last till Philips’s
82nd year.
161
Optimum Roadmap to Financial Freedom for Philips & His

Family

C urre ntFreedom
Adjus te d
With the help of Roadmap to Financial Freedom, Philips and Jane
are now certain that they don’t have to force themselves to continue
working. They know that they can stop working one year from
now and still enjoy financial security. Indeed, to be able to quit
his stressful career and embark on a different and more fulfilling
lifestyle is the ultimate freedom for Philips.
Through the optimisation of their roadmap, they have successfully

redesigned their life into one that is more meaningful and inspiring.
By following their Optimum Roadmap to Financial Freedom,
they have the peace of mind that they can provide enough for the
children’s tertiary education. Previously, they had concerns that
RM250,000 may not be sufficient to finance an Australian higher
162
education for their kids. As icing on the cake, they can take a decent
family vacation for RM10,000 every year, which may not be very
luxurious but is certainly reasonable. For Philips and Jane, this is
the definition of an optimal lifestyle.
Thanks to the Roadmap, Philips and Jane also know that they have
to monitor several key performance indicators (KPIs) to optimise
personal financial management. They know that they need to limit
their annual living expenses to RM84,000 and spend RM10,000 on
their annual family vacation. The balance of their income must be
saved and invested. They know that they should achieve an annual
ROI of 7% on average. Last but not least, they know that they will
spend about RM350,000 for their children’s tertiary education
expenses.
For the first time in his life, Philips is enjoying the sense of financial
freedom which goes hand-in-hand with a better quality of life. The
Roadmap has helped Philips and Jane to make an informed decision
to leave the rat race for good and make the most of their lives.
163
164
Chapter 17:
Michael – Tertiary Education is a Priority
Michael and his wife run a medium-size trading business. They are
not highly educated and don’t speak very fluent English. Therefore,
their most important financial goal is to provide a really good
tertiary education for their children. Having been denied university
education, they want to give their children the advantage of tertiary
education especially in this increasingly competitive world.
According to them, their main purpose of creating a Roadmap to
Financial Freedom is to find out how much they can optimally
provide for their children’s tertiary education. Even though they
have held on to this ambition since the birth of their children, they
haven’t really looked into the issue properly.

about Michael and his family:
• He has a daughter aged 13 and a son aged 10.
165
• His wife assists him in his business and earns an annual income
of RM96,000 annual income.
• House – RM720,000 fully paid
• Property investment – RM1,200,000 with RM600,000
outstanding mortgage loans
• Unit Trusts (Bond fund) – RM200,000
and income taxes.
expenses per year till Michael’s eightieth year.
• They spend about RM20,000 per year for their family
vacation.
• They would like to provide at least RM300,000 for each child’s
tertiary education. If possible, they would like to provide as
much as they can afford.
• They intend to provide RM300,000 each for their critical
medical expenses during their old age.
To start with, I suggested that Michael make provisions of

RM500,000 each instead of RM300,000 for his kids’ tertiary
education.
After keying in the necessary information, Michael’s current

Roadmap to Financial Freedom looks like this:
166
Current Roadmap to Financial Freedom for Michael & His

Family
From the roadmap, we can see Michael’s net worth (excluding

home and EPF) will grow from about RM1 million A d juste d
to about RM1.4
C urre nt
million when he is 45. His net worth will drop to RM0.8 million at
age 46 when his daughter enters university. Subsequently, his net
worth will grow to RM0.9 million when he is 48. At age 49, his
net worth will drop to about RM0.2 million when his son enters
university. When he retires at 55, his net worth grows to RM1.8
million. At age 58, when his wife retires, their family net worth
will peak at RM2.8 million. From then on, their wealth will start
dropping continuously when he and his wife have no more active
income. From the Roadmap, we can also see that their wealth will
finish when Michael is 68 years old. His current average portfolio
ROI is 3.34%.
167
Michael and his wife didn’t seem to be very surprised with their
Roadmap, and seemed to be mentally prepared for the findings.
Calmly, Michael asked me what should they do to make their
wealth last longer. First, I suggested they adjust their retirement
living expenses from RM84,000 per year to RM60,000.
Roadmap to Financial Freedom for Michael & His Family

(Stress Test for Lower Retirement Expenses)
As a result of this adjustment, their wealth can

C urre nt now last tillteMichael’s
Adjus d
69th year. Next, Michael’s wife suggested reducing their annual

family vacation budget to RM10,000 from RM20,000. After this

adjustment, their Roadmap looks like this:
168

From the Roadmap, we can see that the adjustment

C urre nt didn’t
Adjus te dresult in
significant changes, and will only extend their wealth

A d juste d tont Michael’s
C urre
72nd year. I asked them about the possibility of reducing their

current living expenses. However, they don’t think they can reduce
their current expenses at all.
Next, I suggested they increase their investment ROI. Their current

average portfolio ROI is only about 3.34%. However, both Michael
and his wife are very conservative when it comes to investment.
They are very reluctant to take investment risks. Despite their
objection, I encouraged them to keep an open mind and explore
the possibility of generating higher ROI. I then proceeded to show
them their Roadmap which had been adjusted by 1% higher ROI.
169

(Stress Test for 4.34% ROI)
With only 1% extra ROI, their wealth Ccan

urre now
nt last until
Adjus teMichael’s
d
76th year. After seeing what an extra 1% ROIA d juste

cand achieve,
C urre nt Michael
was now more open to the idea of generating higher ROI. Given
their long-term investment time horizon, which in their case
stretched from 20 to 30 years, it is not so difficult to manage risk
and achieve a higher ROI. Therefore, it should be alright for them
to target even 6% ROI. Next, I showed them the adjusted Roadmap
with an assumption of 6% ROI.
170

At 6% ROI, their wealth can now lastC urre

till ntMichael’sAdjus 86th te d year. In
that case, I told them that they can now adjustA d juste
their d
annual
C urre nt
vacation
budget to RM15,000. With that change, their Roadmap looks like
this:
171

(Stress Test for RM15,000 Annual Vacation Expenses)
Even with the increase in their vacation

C urrebudget,
nt their
Adjuswealth
te d will
still last till Michael’s 82nd year. Finally, Michael and his wife
have found their optimum Roadmap to Financial Freedom after a

few rounds of adjusting and reprioritising their financial needs and
wants.
To move from their current Roadmap to their optimum Roadmap,

they will need to take the following optimisation actions:
1. Restructure their existing investment portfolio with an
estimated average of 3.34% ROI to 6% ROI. They feel that
6% ROI is a comfortable risk to take and are confident of
achieving it with professional help.
2. They will spend RM60,000 a year on living expenses during
retirement.
172
3. They will spend RM15,000 per year on their family

vacation.
4. Most inspiring of all, they will provide RM500,000 for each
child’s tertiary education. Where they’re concerned, that is
the best present they can give their children, and the most
important accomplishment of their lives.
Optimum Roadmap to Financial Freedom for Michael & His

Family

C urre ntFreedomAdjus te d
With the help of a roadmap to financial freedom for their family,
Michael and his wife discovered that they can really afford the best
university education for their children. Before this, they had been
thinking and talking a lot without concrete pictures and actions.
They have always wanted to spend more on their children’s tertiary
education. At the same time, they are worried that they may be left
173
with very little money for their own retirement. They’ve wrestled
with this dilemma for a long time without finding an effective
solution. Finally, with the Roadmap, they’ve found an optimum
balance between providing generously for their children and
providing for their old age. Their lifetime’s hard work can afford
them their biggest dream. Now, they can truly enjoy their lives and
look forward to seeing their children graduating from university.
Of course, Michael and his wife know that they will have to make
some adjustments to achieve their optimum Roadmap to Financial
Freedom. They know that they still have not fully achieved their
financial freedom. They have to monitor certain key performance
indicators (KPIs) to really achieve their dream life. They know that
they need to maintain their current living expenses at RM120,000
and limit their annual family vacation to RM15,000. They know
that they should invest to achieve an average annual ROI of 6%
for their wealth. They also know that their budget for each child’s
tertiary education expenses should be RM500,000. The Roadmap
has provided them with a set of very clear and useful KPIs to guide
their day-to-day personal financial management.
174
Chapter 18:
Brad - Can’t Afford to Retire
Brad is a business owner in his 50s. Despite his age, he is unsure

if he can afford to retire completely or whether he has to keep
working. Therefore, he wants to create a roadmap to see whether he
will have enough money to last till he dies if he retires now.

about Brad and his wife:
• He has two sons aged 25 and 18 and a daughter aged 10.
• He makes an annual income of RM360,000 from his
business.
• His wife is a housewife without any income.
• House – RM1,200,000 with a RM250,000 mortgage
loan
175
• 3 investment properties with a total market value of

RM2,300,000 (fully paid-up). He doesn’t collect any
rental on his properties.
• EPF – RM100,000 (himself), RM50,000 (wife). He
stopped contributing to EPF a long time ago.
and income taxes.
• They spend about RM30,000 on their annual family vacation.
expenses per year until he is 80 years old.
• They would like to provide RM300,000 each for their medical
• Their eldest son has just graduated from university in the
United States and has started working. They would like to
provide RM500,000 each for their younger son and daughter’s
tertiary education.
Do you think he will be able to achieve his financial freedom?
Based on this information, Brad’s Roadmap to Financial Freedom

looked like this:
176
Current Roadmap to Financial Freedom for Brad & His

Family
From the roadmap, we can see Brad’s net

C urreworth
nt willAdjus
grow te dto about
RM2.1 million when he is 55. From then on, his
A d juste d wealth
C urre nt will start
diminishing continuously when he has no more active income.

From the roadmap, we can also see that his wealth will run out
when Brad is 63.
There are two reasons why Brad can’t make his wealth last till age
80. First, he has relatively high expenses (annual living expenses of
RM144,000, vacation expenses of RM30,000 and children’s tertiary
education funding goals of RM500,000 each). Second, his wealth
is not generating reasonable ROI (the properties are not rented out
and the total portfolio is generating an average ROI of 3.24%).
Brad and his wife were really depressed to discover that despite
Brad’s high income, their wealth can only last till Brad’s 63rd year.
177
However, I advised them to let go of their frustration since there are

a number of ways that they can optimise their current roadmap and
achieve their financial goals.
First, I suggested they increase their average ROI from current

3.24% to 6%. Understanding that Brad has a low tolerance for
risk, I didn’t advise him to target the usual ROI of 8%. Given his
profile and age, a more conservative target of 6% ROI will be more
suitable. If they are able to increase their ROI to 6%, their roadmap
will look like this:
Roadmap to Financial Freedom for Brad & His Family

Based on the roadmap above, if BradC urre cannt achieveAdjus 6%te dROI, his
wealth can last longer till his 65th year. Since Athis
d juste disn’t good
C urre nt enough,
further adjustments need to be made.
178
Upon seeing the roadmap, Brad’s wife told me that they don’t need
to provide RM30,000 for their annual vacation since they have
visited many destinations over the years. Therefore, they don’t
mind reducing their annual vacation expenses to RM15,000. With
that reduction, their roadmap looks like this:

(Stress Test for Lower Annual Vacation Expenses)
Based on the adjusted roadmap, we can see

C urre nt that their Adjuswealth
te d will
now last till Brad’s 67th year. Not quite good enough. Next, Brad
offered to retire later than 55, which is possible since he runs his
own business. After a discussion with his wife, they agreed that
Brad would retire at 60. After this adjustment, the roadmap looked
like it does below:
179

(Stress Test for Later Retirement)
With that adjustment, the roadmap improves

C urre nt significantly.
Adjus te d Now,
Brad’s wealth will last him till the age of 76. A d juste d C urre nt
Next, I asked if Brad and his wife are willing to reduce their
retirement living expenses from RM120,000 to RM108,000. With
that change, the roadmap looks like this:
180

(Stress Test for RM108,000 Retirement Living Expenses)
Despite this adjustment, there was little difference

C urre nt inAdjus
theteroadmap,
d
which disappointed Brad and his wife. Next, Id offered

A d juste C urre nt them two
choices. One, reduce their children’s tertiary education funding

to RM300,000 each. Two, further reduce their retirement living
expenses to RM84,000. I showed them the two adjusted roadmaps
based on these assumptions:
181

(Stress Test for RM300,000 Children’s Tertiary Education
Fund)
182

(Stress Test for RM84,000 Retirement Living Expenses)
As we can see from the roadmap, either one of the

C urre nt Adjus adjustments
te d
will enable Brad’s wealth to last longer untilA dhis

juste d
80thC urreyear.
nt
I asked
Brad and his wife which option they prefer. After a discussion, they
agreed that they wanted to provide RM500,000 for each child’s
tertiary education. They don’t mind spending less during retirement
and believe that they can make do with RM84,000 per year. Finally,
they have found their optimum Roadmap to Financial Freedom.
183
Optimum Roadmap to Financial Freedom for Brad & His

Family
Brad and his wife are most comfortable C urre nt with Adjus the tefollowing
d
optimisation actions: A d juste d C urre nt

estimated average ROI of 3.24% to 6% ROI.
2. Brad will retire at 60 instead of 55.
3. They will spend RM15,000 per year on their family
vacation.
4. They will still spend RM500,000 each for their son and
daughter’s tertiary education.
5. They will spend RM84,000 per year during retirement.
Although this is very much lower than their original
retirement budget of RM120,000, they believe they don’t
184
need to maintain such an expensive lifestyle during their

golden years.
Thanks to their Roadmap to Financial Freedom, Brad and his wife

now know when would be the ideal time for Brad to stop working.
Without the Roadmap, they ran the risk of retiring too early and
finding out that they don’t have enough money to support their
desired lifestyle. If Brad had retired early, the damage would have
been done and their finances could not have recovered without a
miracle.
That’s why it is always critical to get a roadmap done when you need
to make a major financial or life decision, such as planning to retire,
selling off your business, getting a divorce, buying a dream house,
and sending children overseas for further education. Personally, I
have met many people who made these major decisions without a
full picture of their personal finances and regretted it later.
Through the optimisation of their roadmap, Brad and his wife

have also determined their optimum lifestyle. By following their
Optimum Roadmap to Financial Freedom, they know that they
can achieve all their financial goals. Now, they can discard their
financial anxiety and focus on living their life with peace of mind.
Brad and his wife understand that they have a few key performance
indicators (KPIs) for personal wealth management to follow in
order to attain their financial freedom. They know that they need to
185
cap their current living expenses at RM144,000 per year and their
annual family vacation at RM15,000. They know that they should
invest to achieve an annual ROI of 6% on average. They have also
decided that their budget for each child’s tertiary education expenses
should be RM500,000. These financial KPIs and their Roadmap
will keep them firmly on their path to financial freedom.
It is always critical to get a Roadmap done

when you need to make a major financial or
life decision, such as planning to retire, selling
off your business, getting a divorce, buying a
dream house, and sending children overseas
for further education. Personally, I have met
many people who made these major decisions
without a full picture of their personal finances
and regretted it later.
186
Chapter 19 :
Your retirement money should not be
sacrificed for your children’s education
EDUCATION is possibly the biggest investment parents make for

their children.
A growing number of middle-class families in Malaysia are sending

their children to private or international schools from a very young
age.
According to the Education Ministry, enrolment of students in

international schools in 2013 stood at 20,000 as compared with
15,000 the year before.
The increase in international school enrolment was largely due

to the lifting of a government restriction affecting the number of
Malaysian citizens who are able to attend international schools.
What was once a luxury only enjoyed by predominantly the

expatriate community has now turned into every Malaysian parent’s
aspiration.
187
What is the price?
On average, an international school education costs between

RM30,000 to RM50,000 per annum per child.
Correspondingly, the price of sending a child for tertiary education

overseas (depending on the country and course of study) can go up
to RM500,000 per annum, no thanks to the weakened ringgit.
With so much at stake, how does one know whether he or she can
afford the steep price tag associated with international schools?
Perhaps the better question to ask is – will the cost of giving my
child a quality education cost me my retirement?
One of the most common mistake parents make when contemplating

their children’s education is the tendency to look at affordability
through the lenses of their current cash flow.
For example, parents would measure affordability by dividing the

yearly term fees to obtain its monthly cash outlay. E.g. RM30,000
per year broken down into 12 monthly payments equate to RM2,500
per month per child.
All of a sudden, the cost of sending a child to an international

school becomes more “affordable”.
The reality is more complexed than that.
The real price of education
Many parents end up forking out exorbitant amount of money to

provide their children with the best education without truly knowing
the actual cost of this move, and failing to see the bigger picture.
188
Consider the case of John and his wife Wendy, who like most middle
class families in Malaysia, aspire to put their two children aged
seven and three, through what they perceive as the “best education”
experience ie, international school and tertiary education abroad.
At 36 and 34 years of age respectively, John and Wendy have an

annual household income of RM440,000. They currently enjoy a
lifestyle cost of RM200,000 per year, and intend to retire at the age
of 55 with RM140,000 annual expenditure for 30 years.
Their combined assets currently consist of their home which is

worth RM1mil with an outstanding RM250,000 mortgage loan,
unit trust worth RM480,000, bank savings of RM3.2mil, and EPF
savings of RM600,000 combined.
Without factoring the element of the children’s private and overseas

education, John and Wendy’s projected net worth will last them till
a ripe old age of 95 years (see graphs). Now, let’s look at the impact
to the couple’s net worth when they provide the “best” education
for their children.
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Current Roadmap to Financial Freedom for John & Wendy
25,000,000
20,000,000
15,000,000
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C urre nt
Roadmap to Financial Freedom for John &Adjus
Wendyte d
(Stress Test for Private and Overseas Education

A d juste d for COne
urre nt Child)
12,000,000
10,000,000
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0
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Roadmap to Financial Freedom for John & Wendy

(Stress Test for Private and Overseas Education for Two Children)
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
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At the cost of RM30,000 per annum Cfor urre primary
nt Adjus secondary
and te d
education, and RM500,000 for tertiary educationA d juste d

overseas, the
C urre nt
couple’s net worth would shrink considerably. Their wealth would

now only last them comfortably till the age of 77. And this is just
looking at the impact of one child.
Putting both children though international school and tertiary

education overseas would result in the couple’s entire retirement
savings lasting only four years post-retirement, up till age 59.
The above Roadmap to Financial Freedom simulation is done based

on the assumption that both John and Wendy would stick to their
financial plan and not deviate from it. It is also assumed that the cost
of education remains fairly constant (after adjusting for inflation).
191
The scenario could be worse if spouse is unable to work due to

health reasons or if the cost of education rises astronomically.
The additional education expenditure reduces their savings capacity

which results in less capital available for investing, ultimately
slowing down their overall wealth growth. Many Malaysian parents
tend to overlook and underestimate the impact of spending on big
ticket items like children’s education on their overall net worth.
At the risk of dashing every parent’s dream of providing the best

education for their children, parents need to beware that the real
price of private education may very well be at the expense of their
own retirement.
Therefore, I would urge all middle-income families not to take this

decision lightly. Do not make this monumental decision based on
peer pressure that may come from family, friends or colleagues.
Understand that different families have different priorities and
financial resources – keeping up with the Joneses could bring you
financial ruin.
Consult an independent financial adviser to thoroughly evaluate the

financial impact of your decision using a holistic financial plan.
Only then will you be able to truly see the impact your decision in
a big picture context. If necessary, you would need to adjust your
investment strategies to enable your assets to grow fast enough to
support your financial goals.
As parents, you want to help your child succeed, no matter the

costs. However, one of those costs should not be your retirement.
192
Chapter 20:
Roadmap to Financial Freedom in Holistic
Wealth Management
Time and time again, I have observed how most middle-class

families in Malaysia (those with a combined household income
between RM15,000 to RM 30,000 per month) end up in a net worth
position that does not match up to their years of drawing from high-
income salaries.
In fact, despite proactively adopting forced saving measures and

subjecting their life savings to risky and stressful investment
activities, many middle-class families still fall short of their
retirement goals and wished that they could have accumulated
more wealth
In this day and age, if you’re not taking active measures to grow
your wealth, you are setting yourself up for a disappointing and
financially burdening future.
The solution lies within the principles of holistic wealth management,

a systematic way to grow your wealth and subsequently, net worth,
193
steadily up while keeping risks to a minimum. With the right wealth

management strategy in place, the middle class has the opportunity
to accumulate RM1.5mil to RM3mil more to their net worth.
The process itself is not complex, but it involves carefully thought

out steps and checkpoints to ensure its effectiveness in growing
money with minimum risk.
Here, I’ve outlined the five main steps of holistic wealth

management.
8 Areas of money optimization
Holistic financial planning
Retirement age
Saving %
Asset growth Target ROI
Active performance Cash-flow

management management
Solid & best of Investable

breed investments assets
Risk-calculated Strategic asset
investing allocation
Quota for each asset class
Step 1: Holistic financial planning
The first step is to map out a holistic financial plan to optimise

your money. Whitman’s proprietary Roadmap to financial freedom
is actually a holistic financial planning tool for the middle class.
194
Why is this step so important?
Holistic planning is akin to having a blueprint before you build a

structure. It provides the guide to help determine certain financial
decisions you will need to make to reach your goals.
They include how much money to put aside for savings, adjusting
your living expenses and identifying the return on investment (ROI)
to target for your investments.
Many overlook this step, as they are too keen on only investing
to grow their money. This may not necessarily be a bad thing.
However, the first rule of thumb before you even start to “make”
money is to SAVE money. Doing so without first identifying a
saving rate may run you the risk of under-saving, and eventually
preventing you from accumulating enough resources to achieve
financial freedom.
Bombarded by lots of investment options and don’t know where to

start? A holistic financial plan also helps to narrow down investment
options according to the ROI you will need to attain your goals.
In that sense, a holistic financial plan will alert you if you are taking
excessive risks with your investments, or are being too cautious and
underachieving in your money growth.
For holistic wealth management to work, you cannot merely focus

on a single financial goal, i.e. “a comfortable retirement” – you
need to look at the big picture and take into account all the financial
requirements you will need in the future.
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As you can see by now, roadmap to financial freedom is actually

the backboneof holistic wealth management. You cannot have one
without the other.
Step 2: Cash-flow management
Once you have set a direction for your investment strategies, the
next step is to manage your cash-flow to get an accurate picture of
how much you are able to invest to grow your wealth.
Managing your cash-flow is important to ensure you have holding

power over your investments.
Before investing your money, set aside a cash reserve for a rainy
day – six months of your living expenses for those who are currently
earning, and three years if you are retired .
Padded with a cash reserve, you can afford to wait for a badly-hit
investment to rebound before cashing it in, as opposed to cashing it
in when it hits an all-time low because you are in dire need for cash.
Having sufficient cash reserves safeguards your against

unpredictable financial crashes, because you have the resources to
wait for the market to recover from a crisis.
Similarly, it is also vital to estimate when major life events will be

taking place, like the funding of your children’s overseas tertiary
education, and setting aside cash reserve for that purpose.
That way, you won’t run the risk of making a loss for having to
force sell on an investment prematurely.
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I once knew a high net-worth individual who couldn’t afford to

send her children overseas for education.
Later on, it was revealed that she had put all her money into property
investing, without thinking about her short-term need for cash for
her children’s education.
Hence, without proper cash-flow management, you may find

yourself in a tight spot for cash, or run the risk of a force sale during
a time that’s below ideal.
3: Strategic asset allocation
When you have figured out the optimum amount to invest, the next
step is to allocate your funds to appropriate investments. With so
many types of investments out there, how do we choose which one
to invest?
The key here is to diversify your assets. Different types of asset

classes are associated with different types of risks. When you
diversify your funds, you create a buffer to these risks.
The table illustrates two strategies to invest RM100,000 capital

over 25 years. Each of these investment strategies have a different
outcome, but which do you think will yield the most return?
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Invest RM100,000 for 25 year

Strategy A
Capital ROI
RM100,000 4%
Strategy B
Capital ROI
RM20,000 Total lost of capital
RM20,000 0%
RM20,000 2%
RM20,000 7%
RM20,000 12%
At first glance, it may seem that Strategy A may be the safer way to
go, as it constantly yields a positive rate of 4%.
Strategy B on the other hand, is split up into five smaller investments

and is tainted with a 0% return and one complete loss of capital.
However, after 25 years, Strategy B would grow your capital to

RM501,362, while Strategy A would grow your initial investment
to a mere RM266,584. How did that happen?
This example highlights perfectly the concept of asset allocation.

By diversifying your eggs instead of putting them all in one basket,
you contain the maximum losses in each basket. On the other hand,
the return for the other baskets in Strategy B is unlimited. As a
result, the combined investment return is more than Strategy A.
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Don’t just limit yourself to one asset class. Expand your investments
to cash, foreign currencies, bond, equities, real estate investment
trust and commodities.
In doing so, you’ll build a balanced portfolio of asset classes so

that no matter what happens to any asset class, your investment is
well-protected.
After deciding where you’d like to allocate your assets, you then
need to determine the quota for each asset class before investing,
based on your personal preferences and appetite for risk.
Let me highlight an example that is closer to home. Our Ringgit has

been at its weakest in recent years.
This phenomenon would affect the value of your net worth due to
the currency depreciation.
If you had taken the step to diversify some money into foreign
currency, however, you would have mitigated the effect on your net
worth altogether.
To recap, if you overlooked this crucial step, you may run the risk
of over-investing into one investment at a great opportunity cost.
Step 4: Risk-calculated investing
Choosing the right investment to put your money into can be

overwhelming. There are many of products out there that promise
high returns, optimum performance, and guaranteed return of
investment.
199
Risk-calculated investing involves doing a thorough background

and fact check of these different products such as the performance
history, the track record of the fund manager and administrative
charges.
This step will ensure that you select only superior, best of breed
investments to put your money into each asset class.
Always be proactive in your research and look for investments that

are resilient. Ensure that you are clear about the policies regarding
the return of your capital.
In many cases, investors focus on the ROI (profits from an

investment) instead of their return of investment (the return of
the initial capital should the investment fail). The loss of the latter
could potentially set you a long way back!
Step 5: Active performance management
Investors often make the mistake of expecting investment to take

care of itself once they have invested.
Therefore, review your investment portfolio regularly. Make

sure that the annualised returns are always positive, and that the
returns are above the current fixed deposit rate. If you find another
comparable investment doing better, do not hesitate to re-allocate
your funds accordingly. Park the profit in a safe vehicle when the
opportunity arises.
Without active performance management, you may not have the

foresight of cutting your losses on underperforming investments
and run the risk of asset depletion.
200
Based on your holistic financial plan, you’d also need to regularly

monitor if your investments are on track towards meeting your
required ROI, and if your net worth is growing correspondingly to
achieve your financial goals.
Once a year, revisit your holistic financial plan. Repeat step two to
five accordingly as you may need to adjust your strategies to reflect
on the progress that you have made.
Final words
When done right, the five steps to holistic wealth management

would not only lead to net worth growth but also allow you to
effectively manage and minimise risk when you invest.
Overlooking any one of these five steps may expose you to the risk
of under-saving, executing a force sale, over-investing or under-
investing, putting your money into weak investments, or the risk of
asset depletion from the failure of cutting your losses.
With that said, perhaps it is now time to begin evaluating your own
choice of investment strategies and processes and plug the gaps that
have caused many middle-class Malaysian not to achieve an ideal,
financially free life.
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202
Chapter 21:
Frequently Asked Questions
How accurate is the Roadmap to Financial Freedom?
The Roadmap is definitely not 100% accurate because it contains

so many assumptions. Take the following assumptions: the rate of
inflation for living expenses is 5%, the inflation rate for tertiary
education expenses is 6%, the salary increment rate is 4% and
so on and so forth. We also assume the ROI for your investment
portfolio.
Therefore, the roadmap will not be fully accurate the moment actual
reality veers away from the assumptions. Let’s say that instead of
an inflation rate of 5% for living expenses, you actually experience
a 4% inflation rate. In that case, the Roadmap will not be 100%
accurate anymore. That’s why we must update our roadmap
at least once every year to increase its accuracy. By using the
latest financial information and assumptions, we can increase the
accuracy and the relevance of our Roadmap. However, it will still
be impossible to achieve 100% accuracy despite your best efforts.
203
However, the Roadmap does not lose its value just because it is not
100% accurate. We must remember that the purpose of the Roadmap
is not to accurately predict our financial future. The ultimate purpose
of the Roadmap is to give us a useful and personalised guide for our
personal financial management. As a result of the Roadmap, we
have a better idea of how much we must save, how much we can
afford to live on during retirement, how much we can afford to
spend for our children’s tertiary education and so on and so forth.
Despite the fact that our financial destiny would not happen exactly
as per outlined in the Roadmap, it won’t be too far off from the
Roadmap if we were to follow the key performance indicators
(KPIs) developed from the exercise.
Therefore, we should not evaluate the value of the Roadmap by

comparing the not so accurate Roadmap with the perfectly accurate
Roadmap. We should instead, appreciate the value of the Roadmap
by comparing the not so accurate roadmap with a situation where
there’s no Roadmap at all. In that context, only then can we truly
appreciate the guidance and direction provided by the Roadmap.
We must remember that the purpose of

the Roadmap is not to accurately predict
our financial future. The ultimate purpose
of the Roadmap is to give us a useful and
personalised guide for our personal financial
management.
204
I am now 56 and retired. Will it be too late for me to have a

Roadmap to Financial Freedom?
When you are retired, you will need to maintain your lifestyle for
potentially another 25 years or more without an active income.
Isn’t it important for you to make sure that your wealth can outlast
you? With a Roadmap, you will know how much you should spend
so that your wealth lasts until you die. You will know how much
you can afford to spend if you intend to leave behind a specific
amount of assets to your children. How will you know that without
a Roadmap? Despite the fact that you can’t use the Roadmap to
guide your income earning years, it can still provide a useful guide
to your retirement years.
How frequently should I review and update my Roadmap to

Financial Freedom?
We all should review and if necessary update our Roadmap every

year. In a year, there would normally be some changes in our financial
situation that warrant an updated Roadmap. For example, some of
your assets like cash and share values may have grown after one
Despite the fact that our financial destiny

would not happen exactly as per outlined
in the Roadmap, it won’t be too far off from
the Roadmap if we were to follow the key
performance indicators (KPIs) developed from
the exercise.
205
year. Your income and your expenses may have also increased in
a year. Therefore, it is important for you to factor in these changes
and see how your Roadmap changes as a result.
However, there could also be other circumstances that warrant a

more frequent update. For example, you and your wife may have
decided to increase your children’s tertiary education funding from
RM250,000 to RM300,000 for every child. In that case, you would
want to update your Roadmap to see how this decision affects it. In
another example, you might inherit RM2 million from your father.
You would also want to update your Roadmap to see how you can
optimise it with the extra assets.
Don’t worry. You can never update your Roadmap too frequently.
The more frequently you update the Roadmap, the more personalised
your Roadmap becomes. The more personalised the Roadmap
becomes, the more inspired and motivated you will be to follow the
Roadmap to really achieve your very own financial freedom.
We should not evaluate the value of the

Roadmap by comparing the not so accurate
Roadmap with the perfectly accurate
Roadmap. We should instead, appreciate the
value of the Roadmap by comparing the not
so accurate roadmap with a situation where
there’s no Roadmap at all.
206
Do you take the inflation factor into consideration when

calculating future expenses like retirement living expenses in
your Roadmap?
Yes. We have factored inflation into all future living expenses

calculation. If someone targets a retirement living expense of
RM5,000 per month 20 years later, his retirement living will be about
RM10,000 with a 3.6% inflation rate in our Roadmap calculation.
The same applies to the other future living expenses.
I am now 26 and have just started working. Is it too early for

me to have a Roadmap to Financial Freedom?
If you draw up a Roadmap now, there will be a lot of changes to

the Roadmap going forward. Marriage, promotions, children, and
house purchases will all cause big changes to your Roadmap. In
short, your current Roadmap would definitely not be a very accurate
Roadmap going forward. However, it is still advisable to draw up a
Roadmap now to guide your current financial management.
You can never update your Roadmap too

frequently. The more frequently you update
the Roadmap, the more personalised your
Roadmap becomes. The more personalised
the Roadmap becomes, the more inspired and
motivated you will be to follow the Roadmap to
really achieve your very own financial freedom.
207
Despite its limitations, you can determine your ideal saving and
ROI levels with a Roadmap. In fact, building a saving habit at an
early stage in life is critical to successful financial freedom planning.
Remember, the more you save, the less you spend.
I feel that my personal finances are in order. Do I still need to

have a Roadmap to Financial Freedom?
I am glad that you feel your personal finances are in order. You must
have put in some discipline and effort to get your finances in order.
Give yourself a round of applause because not many Malaysians
can say so.
However, do you know whether you have optimised the potential

of your wealth? Are you sure that you don’t over-save? If you over-
save, you may deprive yourself and your family of something you
deserve or that may improve your quality of life. On the other hand,
are you sure that you aren’t under-saving? Sometimes, one may feel
that his personal finances are in order because he under-provides
for future major commitments like children’s tertiary education and
retirement expenses. As a result, his personal finances could be in
order now but not in the future.
If you are sure that you are optimising the potential of your wealth
and not over-saving or under-saving, you don’t need a Roadmap.
If you are not sure, I would suggest that you draw up a Roadmap
to confirm whether you are or aren’t optimising your wealth
potential.
208
I am now 35. I don’t have very many assets right now. Should I
draw up my Roadmap to Financial Freedom later?
One should have a Roadmap to Financial Freedom the moment

he starts to earn income and save. The Roadmap can tell you how
much you can spend and save on your current income. Without a
Roadmap now, there is a chance that you may over-spend and miss
building sufficient savings in your good income-earning years. This
is especially critical for those who are in their mid-30s to late 40s.
During this period, your savings and assets may not be significant
yet but your income will increase and reach its peak. By drawing
up a Roadmap now, you can identify the right savings target so that
you don’t overspend when your income increases significantly.
When I fail to follow the KPIs, what should I do?
When you fail to follow your KPIs, such as not saving enough to
meet your target or overspending, it is important for you to review
your KPIs. You need to find out whether your KPI is unrealistic
or whether you lack discipline. If the KPI is unrealistic, you need
to adjust your KPI and update your Roadmap. If you are not
Sometimes, one may feel that his personal

finances are in order because he under-
provides for future major commitments like
children’s tertiary education and retirement
expenses. As a result, his personal finances
could be in order now but not in the future.
209
disciplined, you can either work on it yourself or seek help from a

professional financial coach who can coach you closely to follow
the KPIs.
What if I didn’t get the ROI I set?
When you fail to achieve your target ROI, it is important for you
to review your target ROI. You would want to find out whether
your ROI is unrealistic or whether you don’t have the competency
to achieve the ROI. If the ROI is unrealistic, you need to lower
your target ROI and update your Roadmap accordingly. If you
lack the necessary competency, you may want to seek help from
a professional financial coach. A professional financial coach can
help you to develop an asset allocation strategy to achieve your
desired ROI.
What if my income increases or decreases significantly?
If your income increases significantly, it is definitely good news. I

would suggest that you review your Roadmap to explore ways to
optimise your financial needs and wants. With the increased income,
you may find that you can now afford to spend on certain items that
mean a lot. For example, you can now increase your funding for
your children’s tertiary education or increase your annual vacation
budget.
If the ROI is unrealistic, you need to lower

your target ROI and update your Roadmap
accordingly.
210
If you income drops significantly, you have every reason to review

your Roadmap to find out its impact to your financial freedom.
However, don’t get too frustrated or depressed too early. By using
the Roadmap approach, there are many ways to cushion the impact
and still develop your optimum Roadmap. If you run out of ideas,
you can always seek professional help from a licensed financial
coach.
What if I get retrenched or fired from my existing job?
When you get a Roadmap done, you expect to continue receiving

income from your current job. If you get retrenched or fired from your
job, you won’t have that income contribution anymore. Therefore,
it is always a good practice to keep aside at least six months of
your living expenses as your emergency fund. During the period
of unemployment, this emergency cash will give you some support
while you look for another job. When you are able to find another
job, you should update your latest income in the Roadmap. From
there, you will work again to develop a new optimum Roadmap.
I would like to produce my Roadmap by myself. However, I am

afraid that I may have missed some assumptions.
I must compliment your initiative to produce your Roadmap on

your own. That’s really a good effort.
I also agree with you that you may get your Roadmap wrong. If that
really concerns you, you may want to get a licensed financial coach
to help you with that. Their fees are very reasonable and affordable.
211
In addition, an experienced financial coach can also share with you

many ideas to optimise your current Roadmap.
Under what circumstances don’t I need a Roadmap?
There are two situations in which you may not need a Roadmap.
One, you are very sure that you have optimised fully the potential
of your wealth and you have optimised your financial needs and
wants. In another words, you have already achieved financial
freedom as per the definition in this book. In that case, you won’t
need a Roadmap.
Two, you don’t care if you can achieve financial freedom. In that
case, you don’t need a Roadmap. But if you picked up this book and
have gotten this far– I feel you care.
I am planning to sell my business. Do you think it is important

for me to draw up a Roadmap to guide my decision?
Selling your business is a major event in your life that will have a
big impact on your personal finances. By selling your business, you
will lose your business income in return for a lump sum. Therefore,
it is critical for you to determine the net effect to your Roadmap
when your income drops and assets increase.
I have personally seen some business owners underselling their

business. When that happens, they end up in a worse financial
position than prior to the sale. So, I would strongly suggest that
you create a Roadmap to evaluate the true impact of selling your
business before you regret your decision.
212
My net worth is about RM50 million. I don’t see how I can

optimise my financial needs and wants to match my wealth.
When I talk about optimising financial wants, I am actually referring

to two aspects. One is to increase your financial needs and wants to
benefit yourself directly. These are what I call direct financial needs
and wants. For example, you may buy a more comfortable house
to live in. You may spend more money on traveling if you enjoy it.
Here, you are spending on financial needs and wants that benefit
yourself directly.
Another aspect refers to those financial needs and wants that do

not benefit you directly. These are indirect financial needs and
wants. For example, you may want to leave some assets to your
grandchildren. You may want to donate to charities. These financial
needs and wants benefit others but will still give you the ultimate
satisfaction and benefit.
If you think that you have fulfilled all your direct financial needs and
wants, I would suggest you explore ways to optimise your indirect
financial needs and wants. By doing so, you truly optimise your
wealth in a wiser way that benefits many parties, just like Bill Gates
and Warren Buffett have done. Log onto www.whitman.com.my and
click on ‘Books’ button to find out how the super-rich optimise
their wealth in my book Family Office.
213
214
About YAP MING HUI
Yap Ming Hui is the nation’s leading authority on HOLISTIC

wealth management.
He is the author of six best-selling books:

• You Can’t Manage Your Money: Especially When You’re
Rich
• Maximise What You’ve Got: No Matter How Much you Have
Now
• MaxWealth: How To Maximise Your Wealth Beyond
Investment Returns
• Family Office: The Super Rich’s Secret to Wealth Maximisation
• The Roadmap to Financial Freedom: The Ultimate Guide to
Achieve Financial Freedom
• Set Yourself FREE: How to Optimise Your Money and
Become Wealthy with Minimum Effort and Risk
215
In his professional capacity, Yap Ming Hui is the Founder and

Managing Director of Whitman Independent Advisors Sdn Bhd,
the first and leading HOLISTIC wealth management company in
Malaysia which specialises in helping clients grow money with
high certainty.
Yap’s clients include some of the major owners of public-listed

companies (PLCs) on Bursa Malaysia, CEOs of multinational
corporations (MNCs) and successful small-and-medium enterprise
(SME) companies.
As a recognised authority in holistic wealth management for high

net worth individuals and their families, Yap’s comments and views
are frequently sought by established print and broadcast media such
as THE EDGE, BUSINESS TIMES, THE STAR, MALAYSIAN
BUSINESS, INVESTORS DIGEST, BLOOMBERG, ASTRO,
TV2, BERNAMA, NTV7 and SIN CHEW DAILY.
Yap has an ongoing monthly column in Star Bizweek called Money

& You. He has previously hosted columns in the The Edge, New
Straits Times, Sin Chew Daily. Yap has also appeared on NTV7’s
The Breakfast Show, hosting the Financial Freedom Minutes
segment every Tuesday morning from April 2011 until November
2012.
In 2007, Yap made his voice heard over the airwaves when he was
invited to share his expertise as the recurring guest for Financial
Bizz Buzz on Lite FM.
216
In 2008, inspired by a cold call from a single mother seeking

independent financial advice, Yap transformed his wealth
management solutions to serve the needs of every Malaysian. That
new solution, the Roadmap to Financial Freedom, is showcased
in this book, and delivers Yap’s unique brand of holistic wealth
management to the masses.
Yap presently lives in Kuala Lumpur, Malaysia, with his wife and
four children.
217
218
About Whitman Independent Advisors
An Introduction
Since its formation in 2000, Whitman has successfully helped many

people grow their money with high certainty.
Whitman pioneered a service called ‘Multi-Client Family Office’

in Malaysia. It is based on a similar concept called ‘Family Office’,
originating from the US over a hundred years ago. Entrepreneurs
such as Rockefeller and Carnegie, whose personal wealth threatened
to overwhelm them, employed their own professionals to coordinate
and optimise their personal wealth. The concept recommends that
personal wealth is managed holistically, and executed just like any
businesses.. Bill Gates, Michael Dell and Li Ka-Shing are some of
the prominent names who are proponents of ‘Family Office’ and the
holistic wealth management model.
In 2008, inspired by a cold call from a single mother seeking

holistic financial advice, Whitman extended its services to a
growing Malaysian middle class who now have access to a service
previously available only to the rich and the wealthy.
219
Our Clients
Whitman’s clients range from first generation successful

entrepreneurs to high flying corporate executives. They are people
who know and realise that they need the help of a professional to
grow their money with certainty.
This group of people had initially sought assistance from traditional

wealth management providers – banks, investment management
companies, independent financial advisory firms – to grow their
wealth. However, they soon discovered there are limitations with
these service providers:
First, there is no big picture perspective to their overall wealth

management, as no single person is charged with the overall
responsibility of coordinating their entire wealth management and
be accountable to the end result.
Second, these traditional wealth management providers only offer

standard products, not tailor-made solution. Our clients feel that
not enough effort has been to put by these providers to thoroughly
understand their unique financial circumstances (no holistic
financial plan is done before any product recommendation).
Third, despite providing a wide range of wealth management

services like investment, life insurance, will and trust, loan and
others, the advice given is in silo and not integrated. As a result,
the client ends up paying for it due to the duplication of effort and
wastage of resource.
220
Why is Wealth Management at Whitman Different?
At Whitman, our wealth management is tailored to client’s unique

goals and values. Our team of professionals can bring an objective
perspective to provide clients with solutions that they would not
have to struggle with, emotionally or intellectually.
Banks traditionally offers wealth management service to their

priority, premier, privilege or private banking clients. The promise
is to help the clients to grow their money.
Unfortunately, current wealth management providers only take care

of a portion of the client’s total wealth in their bank. It is actually
a segmental wealth management. Therefore, despite its promise to
help the client to grow wealth, it benefits are limited by not having
the big picture of the client’s financial assets.
In Whitman, we do wealth management differently. We offer

HOLISTIC wealth management that take cares of the entire wealth
of a client. By doing so, we can reduce unnecessary risk exposure.
We are also able to increase return potential of client’s various
investment assets. In short, we help the client to grow every part
of his wealth.
As you can see from the following chart, HOLISTIC wealth

management has additional 3 steps compared to current wealth
management namely holistic financial planning, cash-flow
management and strategic asset allocation. These 3 steps are very
useful in helping a wealth manager to understand the client’s
unique financial position, develop a holistic investment plan
and outline tailor-made action plan before making investment
221
recommendations. This is very important in helping the client to

grow their money with high certainty.
Without these 3 steps, it is very difficult to recommend the right

investments to a client and the result will be very uncertain.
In short, HOLISTIC wealth management is what you need if you

are serious in growing your money.
1. Holistic
Fanancial
Pe an
5. for gem
M
Planning
r a
Ac ma en
tiv nc t
e e
Holistic Wealth Management

(Wealth Management 2.0) 2. Ca
sh
Man Flow
agem
ent
isk
4. R lated
cu g
Cal vestin
In
3. Strategic
Asset
Allocation
222
Pe an
M
rf ag
or em
?
m e
an n
ce t
Traditional Wealth Management

(Wealth Management 1.0)
?
ting
Inves
?
Core Services:
• Family Office Service (FOS)
• Money Optimisation Service (MOS)
• iWealth+ Service
Family Office Service (FOS)
FOS is designed and developed to function as a fully integrated,

comprehensive and proactive service /solution for individuals and
families with an asset net worth in excess of RM 20 million.
223
The Family Office service identifies your unique needs and develops
a strategic plan for your personal wealth. Whitman brings together a
consortium of specialists, all leaders in their respective professional
fields, to execute and manage your strategic plan. With the support
of Family Office, you can make clearer judgements, choose better
options and implement more effective actions to grow your wealth.
Money Optimisation Service (MOS)
Modelled after Family Office, this service is suitable for middle

class clients with less than RM 20 million of assets. Whitman will
work closely with you to grow your personal wealth with high
certainty.
iWealth+ Service
Modelled after Money Optimisation Service, this service is suitable

for middle class clients with less than RM 2 million of assets.
Under this service, we will help you to build a roadmap to financial
freedom.
For more information, please contact us at:
Whitman Independent Advisors Sdn Bhd (526027A)

19-2, Level 1, Block E1, Dataran Prima
Jalan PJU 1/42
47301 Petaling Jaya
Selangor, Malaysia
Tel. No. : 603 7880 8359
Fax. No.: 603 7880 8615
Website : www.whitman.com.my
Email : enquiries@whitman.com.my
224
225
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I

Advance Praise for

Roadmap to Financial Freedom

“Roadmap to Financial Freedom is an indispensable asset. At last,

Carol Yip, Author of Money Rules & Smart Money User

Charles Raj, Editor of Malaysian Business

“Thumbs up to Yap Ming Hui for making Roadmap to Financial

Lim Ee Young, Executive Director of Yee Lee Corporation

“Well-organised and practical.”

Lim Yong Keat, Co-founder of ICP Bhd and IJM Corporation

“In a world where wealth management is becoming more complex,

Predeeben Kannan, Editor-in-Chief of Smart Investor

Rajen Devadason, Co-author of Financial Freedom and CEO of

Raymond Chew, Founder & Managing Director of POS Ad Sdn

“Roadmap to Financial Freedom is an impressive and much-

Renesial Leong, Author of Property Jewels & Your Tenants, Your

“Roadmap to Financial Freedom is essential reading to help

Richard Wong, Chairman & Chief Listener of Vistage Malaysia

Dr Soo Chee Siong, Consultant Cardiologist & Medical Director

“Yap Ming Hui once again shows us more real examples of

Tay Kay Luan, Director for Asean & Australasia of ACCA

YAP MING HUI

Copyright © 2018 by Yap Ming Hui

Perpustakaan Negara Malaysia Cataloguing-in-Publication Date

Yap, Ming Hui, 1970-

This book attempts to introduce the idea of Roadmap to Financial

I would also like to express my deepest gratitude to many people

To Choy Har, my wife, without whose intensity of purpose, passion

To all my associates and colleagues at Whitman, present and past,

To my professional counterparts in the US, Australia, Hong Kong

I have participated in Vistage for the past 6 years. My TEC chair,

Writing this book is a humbling experience. I share my ideas out to

Thank you all.

What does financial freedom mean to you?

As you can see from these questions, financial freedom means

You might wonder if you can achieve financial freedom with a

I originally wrote this book to help all Malaysians achieve financial

In this updated version, I have added two new chapters to enrich

The second chapter is an article first published in the Star that

to Financial Freedom to evaluate the impact of the additional

I am thrilled and excited to announce that we have developed a

If you are serious about achieving financial freedom, you would

Name Age Employment Status

10 Philips 46 Business Owner

The Roadmap to Financial Freedom stories referenced in this book are

When you ask people what financial freedom means to them,

I would like to redefine financial freedom as: “An optimum financial

Based on this definition, there are actually two main components

Normally, most people understand and focus their attention and

Why do I say that?

I would like to redefine financial freedom as:

We must always remember money is only a means to achieve

Based on this definition, we can see that amount required to achieve

There are actually two main components to

multi-millionaire may not necessarily achieve financial freedom yet

The Key Steps to Financial Freedom

a. If you have enough…

There is no way you can achieve true financial

You will only achieve true financial freedom if you can

b. If you don’t have enough…

i. If it matches, congratulations. You have found the route

As we can see, true financial freedom is not only about money or

We must always remember money is only a