Bank Negara Malaysia’s decision not to cut interest rates at its latest policy meeting would have seen more than a few fund managers breathe a sigh of relief.
As it is, nearly half the income of the Employees Provident Fund (EPF) — 48% to be precise in June — comes from fixed-income instruments and 52% of the fund’s total RM690 billion is invested in fixed-income instruments. So any further rate cuts will hurt returns at all the big pension funds, no question.
Low rates usually mean a rough-and-tumble move into longer-term bonds, and as the recent mad rush into 10-year sovereigns shows, once the dust has settled on the buying frenzy, there really is not much of a yield proposition left.
For evidence of this, look no further than the roughly US$14 trillion worth of bonds in negative rate territory and one begins to see why bond investor Bill Gross is so concerned.
In such a low-yield environment, there really is not much out there for the hungry investor, other than a few risky bets and twiddling one’s thumbs, waiting for the Day of Reckoning to arrive.
So how about an alternative investment?
In exchange for discipline, time and commitment, this punt promises infinite returns, incredible emotional highs (and lows) and unquantifiable happiness.
That investment is yourself. And it could possibly be the biggest one you make.
How opportune then, that as global markets reel in shocked response to each rate cut, further spiralling into negative territory (and expanding the so-called “Supernova” that Gross warns will zap us into oblivion), who should come into the public consciousness but two gentlemen who remind us that there is so much more to life than what we know.
The first is named Yusuf Hashim. He was once an oil man but is now an intrepid traveller and so-called “Gypsetter”. More on that strange term later, but the key lesson to learn from this septuagenarian is the fact that when he attained the not-old age of 53 a couple of decades ago, he called time on a lucrative career in the energy markets to hit the road and see the world while he was still young and fit enough.
Why? Because, in his own words, “your money is not your own until you spend it”.
At a time in his life when only half of his classmates are still alive and all but him of the seven who remain healthy enough to do anything remotely physical are still going to work, he asks, “Why on earth are you still going to the office when you have all that money?
“If you have more than enough money, quit working. Spend your children’s inheritance while you can, because if you don’t, they will.”
As Charles Devan, the editor of the luxury lifestyle magazine The Grid wrote in its August issue, which profiled Yusuf, “even the best of us can get too caught up in pursuing opulence that we forget to live”.
Devan’s father, recently diagnosed with lung cancer, spawned that touching observation.
And following that diagnosis he remarked quite poignantly to those among us afflicted with, or knowing someone suffering from a terminal illness or disease, “since when does the future move from being one filled with promise to becoming a threat?”
For so many of us whose lives are filled with pursuing “The Number” — that ephemeral retirement amount we think will be enough to tide us over when we are no longer able to work — oftentimes, that chase envelops us until it is too late.
What if we were able instead to call time — or at least occasionally take stock of where we are — to enjoy the world’s beauties before the ravages of time on our bodies or climate change on the earth alters either of us irrevocably?
It is entirely possible, and while it requires a huge amount of courage and reorientation of one’s life and beliefs it can throw off some enormous benefits, not just in terms of fulfilling one’s childhood dreams, but also the discovery of one’s self along the way.
Since retiring from the corporate world all those years ago, Yusuf has now ticked the following off his bucket list: Patagonia, Greenland, Svalbard and the Arctic. The Himalayas, the Northwest Frontier of Pakistan, the South Island of Aotearoa, the Sahara Desert and the Atlas Mountains and the Serengeti.
He has also been to the Atacama and the Salar de Uyuni, the Makgadikgadi Pans and the Okavango Delta and, finally, Antarctica. Not to mention logging over a million kilometres in his Toyota Land Cruiser traversing Asia, Africa, South America and Europe.
In much the same vein, the other gentleman is an intrepid grandfather and former BMW bike salesman named B K Lim, who rode his 125cc Honda Wave 38,000km from Downing Street in Penang to Downing Street in London (yep: No 10).
It was a dream that he told the press he had had since he was young. And he made the journey in spite of his age (62 years old) and the steel plate (38cm) in his left leg thanks to a biking accident in 1991.
Lim and eight others started the incredible journey, but only three of them finished it.
One couple went their separate ways and another lost his life en route. The others simply dropped out, unable to take the physical strain or the hardships of the five-month odyssey.
But what the trio achieved upon reaching the British prime minister’s office last year will stay with them for the rest of their lives.
And the cost of that entire trip? Under RM20,000 as they “camped out a lot, cooked their own food and put up at kind strangers’ houses in villages and their friends in some European cities”.
None of them were spring chickens when they completed their journey. B K and Eric Lim were in their early sixties while Timothy Wooi was 55.
Lim and Yusuf may now be advanced in years but they were reasonably young when they made their respective decisions.
I guess what the duo show is that one does not have to enjoy life only upon retirement. The world really is out there — one just has to want it badly enough.
So yeah — whether you are a wealthy Gentlemen of Leisure and Gypsetter (definition: a gypsy-like nomad who roams the world with the sophistication of a jet setter) like Yusuf Hashim or a budget-conscious grandfather like B K Lim, living an alternative lifestyle is entirely possible.
It may not offer the financial rewards of a well-plotted investment, but on the evidence of these two gentlemen, there are equivalent and perhaps larger rewards in the sense of achievement and adventure.
Something to think about perhaps when one looks at the sad returns of a time deposit or the high-risk proposition of an equity instrument.
Khoo Hsu Chuang is contributing editor at The Edge
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