If you could gaze into a crystal ball and observe your future life after retirement, how would you like it to look?  A life of idleness, boredom and staying at home? Or a healthy and happy life of adventure travelling the world -- climbing Mount Fuji, flying to Niagara Falls, exploring the Amazon forest? No doubt this seems a better future. 

But the dream of retirement travel requires extra retirement savings. If you set this as a financial planning goal, there are several ways you can better reach the target. 
 

First, use the “two money bags” savings technique. Split your monthly savings into two bags. Let the first bag cover your retirement living expenses.  The second will be your money bag for exploring the world someday. You need to fill both bags with money every month. Then you’ll have enough retirement money for both a comfortable daily life and some travel. 

In the competitive world of business, people often talk about the importance of gaining a “first-mover advantage,” which opens the way to market leadership and profits.  In the world of personal finance, the key point is the “advantage of early saving.”  The sooner you start to save, the richer you will become, especially compared to someone who starts later. Let’s consider an example.  Mr. Vier has started to allocate savings in mutual fund, which yields a 10% return each year on average. He is investing only 5,000 baht a month and started the program when he was 30 years old. By the time he reaches the age of 60, he will earn a total of 9,700,000 baht! That’s nearly 10 million baht, just from saving money bit by bit. This demonstrates the power of starting to save early in life.

By way of contrast, let’s look at Mr. Vier’s friend, Mr. Tak. He started to save money when he was 40 years old. He has been putting away 10,000 baht a month, twice the level of Mr. Vier’s savings. But by the time he reaches the age of 60, he will have saved only 6,800,000 baht in total, almost three million baht less than Mr. Vier. The difference is that he started ten years later. Now which saver would you rather be?

Retirement savings is simple. If you want to live comfortably later in life, start saving now. No matter how old you are, you need to save money as soon as possible. Of course, it’s also important to do it the right way.  Don’t put all of your money in a savings account because it will yield just a tiny amount of interest. Another important point is increase how much you save each year. If you start by saving 5,000 baht a month this year, raise the level to 5,100 baht next year. This will fill your money bags faster so you can live your dream after retirement. 

Which investment vehicles should you use for your savings? For your money bag for daily expenses, we recommend that you start putting at least 5% of your income into one or more retirement mutual funds (RMFs). For your world travel savings, devote another 5% or more to investment in long-term funds (LTFs). The good thing about either type of mutual fund is that it will help you sustain your saving discipline every year. Both types of mutual fund have complicated redemption conditions, so it will be harder for you to cash out than for other types of funds. For example, an RMF allows you to sell the units only upon reaching the age of 55. For an LTF, you need to hold the units for the period of time specified by law. These clever schemes encourage you to save enough money for your old age because they prevent you from making withdrawals too easily.  And both types of mutual fund offer the extra benefit of tax incentives. Factoring in this advantage, your savings will be even bigger.  

So make your savings simple: split it into two bags, and start putting in money when you reach working age. If you start today, you’ll have a better life in the future. You can even live your dream of travelling around the world, since you’ll save enough to do it. 

But there is one more thing that is as important as planning your finances: your health.  Take good care of your physical and mental condition. Eat right, get enough rest and exercise regularly. Maintaining good health is like putting money in the bank. When retirement comes, you'll be physically able and mentally vital. Then you can truly enjoy the fruits of your lifelong savings discipline.