Perhaps like many people these days you work from morning to night. Some evenings, your boss gives you an urgent task 15 minutes before you are ready to leave, and so you end up working until 9 p.m. You miss out on watching your favorite TV shows. Hopefully, this hard work is rewarded by a higher and higher salary, so that you can not only cover all your expenses but save some funds as well.  Someday, you’d like to have a few million baht in the bank so that you can retire.  

But what you might not realize is that your retirement dream won’t come true only through hard work.  You not only need to start saving early, but to invest your savings wisely.  Otherwise your "golden years" might be short on "gold."  

Let’s look at some numbers. Assume that you’ll spend 30,000 baht per month after you retire, and that your retirement lasts for 25 years from age 60 to 85. In that case, you’ll need to save at least 25 years x 12 months x 30,000 baht/month or 9,000,000 baht.  That’s a large sum.

So how can you save up so much? Divide 9,000,000 baht by the number of years from now until your first year of retirement. If you are now 30, the calculation would be 9,000,000/30 = 300,000 baht per year, or 25,000 baht per month. This is a challenging target.

Two ways to reach the goal are to cut your monthly expenses or find ways to earn extra income. But you might already have trimmed the fat out of your spending. Perhaps you are so busy with your existing job that there is no time left over for moonlighting. 

Your best bet, then, is to make sure that your money works for you. That means investing your savings in assets that will grow.  To do this, however, you have to accept a higher level of risk than for a bank deposit. As you wait for your investments to work for you, you can continue to work at your job and save.

The good news is that because your money will grow by itself, you’ll reach your retirement savings goal more easily than you probably expected. If, for example, if your investments earn at least 7% a year, then your monthly savings can be reduced from 25,000 baht to about 8,000 baht and you’ll still reach your 9,000,000 baht goal. If you invest in assets that carry higher risk but that return 10% a year on average, you’ll only need to save 4,560 baht a month.

The joy of investment is that you can make money without investing much of your time and energy. Your money will work for you every day, including weekends and holidays. And investments do not retire.  The longer you keep them, the bigger they grow. But unless you make your money work hard for you – i.e., by not just saving but investing – you probably won’t have enough to spend in retirement. No matter what your age, your best bet for a happy retirement is to start an investment program today.