Hi Fellow Automated Millionaires,

I was really astounded when one of my good friends didn't sign up for Regular Saving Plan (RSP) in terms for his investment! He told me that because there is a lock of first S$20,000 by CPF, hence, he decided to invested his CPF money in the market! Great 1st Step! But the question is what's next?

When pertaining Investment, an Automated Millionaire will not do a lump sum investment. Why? For a very simple reason. What if the market when we go in is a pretty high market? We can't really time the market, not even those professional traders. Hence, we need to leverage on Dollar Cost Averaging method which is RSP (for more information on Dollar Cost Averaging, please see my earlier post).

I have done a simple calculation if for my friend who is 25, at the age of 65, with an Annual Return of 10%, my Compounding Calculator return a figure of S$452.592.00. However, if at the same time, he starts a RSP with just S$100.00 a month and with the original amount of S$10,000, compounded with the same Annual Return of 10%, at the age of 65, the calculator return a figure of S$1,169,414.00. A difference of almost S$700,000!

This is the very reason everyone should start a RSP after their restructuring of insurance and automation of their budgeting, even if it is just S$100 per month! :) I really urge you to do the same too! :)

Best Regards,
Max Tay - The Automated Millionaire