I'll make RM2mil from selling my business, how do I achieve financial freedom?

[blessed2day]

I am very fortunate to be in the position of receiving RM2 million at the end of this year from selling my business. I am in my early 30s, and am grateful to have a loving wife and two beautiful young children. I have 2 cars, a home, and no liabilities.

I am seeking this community's advice on how to achieve FIRE (Financial Indepence, Retire Early) with the RM2 million, as well as to pass down more wealth to my children than I will receive from my inheritance. My household spending is RM18,000 per month. I have about RM250,000 in my bank account and RM100,000 in VWRA.

In 20 years time, I should inherit >RM20mil in Malaysian real estate assets and cash.

While I am so fortunate to eventually receive this inheritance, I hope that FIRE may be achieved independent of it.

I have two investment options in mind:

• Option A: Invest everything in VWRA, draw down 3% per year, and reduce spending to live within that amount.
• Option B: Invest everything in EPF, draw down 3% per year, and reduce spending to live within that amount.

In either case, I think my draw down would be about RM5k/mth?

I am leaning towards Option A because of my inheritance. Firstly, the inheritance is based in Malaysia, thus I should diversify out of Malaysia. Secondly, the existance of the inheritance means that I can take more risk in my personal RM2mil investment.

I would greatly appreciate your advice on Option A/B or any other Options C, D, E... etc.

While I plan to FIRE... realistically I am probably still going to continue to work, but just that now it would be for passion and purpose rather than financial.

Edit 1: added what FIRE is.
Edit 2: just learnt that EPF has a contribution cap... So I guess I have to go option a?

 

[zainonechia]

@blessed2day 2 million is not enough to FIRE is your monthly expenditure is 18k per month.

Plus your inheritance is not guaranteed. Your old man may spend it all away, get scammed or get eroded away after a bad business decision.

 

[blessed2day]

@zainonechia Yea, a lot of my expenses now are convenience costs that have arisen because I do not have time to look at the household. Eg. let go of my maid. I'm hoping that with time on my hand I can bring my expenses down to 8k/mth. I'm tracking my expenses closely.

While I think there's a high chance that the 20m will be there, I don't really want to rely on it.

 

[zainonechia]

@blessed2day if i were you, i won't sell my business. Continue to grow it and only sell it later when it is big. Just like inside scoop. Got sold for 50 million and it all started by some guy who make ice-cream cuz his wife likes ice-cream.

 

[varden]

@zainonechia That's what yahoo think too and the rest was history

 

[idrys]

@varden Good example.

 

[zainonechia]

@varden true, i guess nobody has a crystal ball that can predict the future.

Or it could be like instagram. Sold to fb for 1 billion at 2012. At 2019, instagram ad revenue was 12.4 billion per year and it only grows since then.

I guess it depends on OP and his view on his business. If there are more and more competitors rising, selling off could be a good choice if his business has no innovation that sets itself higher than competitors.

 

[plentyofpaper]

@zainonechia Instagram only grows so fast because of FB team back it up, bro

 

[zainonechia]

@plentyofpaper and?

A decisive factor on how to determine the buying price of an entire business is its POTENTIAL growth and earnings.

 

[elephant]

@zainonechia Hindsight is 20/20. Without FB and their diverse team of data scientists to sieve through users data and targeted ads, instagram would be worth 1/10 today than when was sold. The founder knew, because apps like Snapchat and vine was rising fast back then

 

[maninthefaith]

@varden There always a risk in business. Yahoo just making bad decision with their investor money and then the internet stock crash happen.

 

[blessed2day]

@zainonechia Without going into details, I think it was the right time for me to sell.

 

[mattmanticus]

@blessed2day Two million is nowhere near enuff for FIRE. Even at 6% yield it's only 120k a year.

Just your kids education fund would bleed that dry

 

[blessed2day]

@mattmanticus Yeah... I'm thinking the same. Sigh.

 

[freedom7]

@blessed2day You need to find a financial adviser. One that just does advice and doesn't push products.

 

[blessed2day]

@freedom7 Totally agree. But haven't found one yet that doesn't push products. That's why I just want to put all my money in EPF or ETF.

 

[suzsim1985]

@blessed2day Reach out to Wealth Vantage - they’re one of the established firms in MY

 

[blessed2day]

Ok, managed to find some decent leads here:

https://ringgitohringgit.com/personal-finance-community/financial-planner-in-malaysia/

 

[deliaraz]

@blessed2day Does your parents have FP? With 20mil in asset I imagine they would have. Maybe can use the same one, so that your dad and what you’re trying to do will be aligned.

 

[debwater]

@blessed2day 18k is a lot, plus with the way things are going, you will probably spend a lot more moving forward.

Things like childrens education is crazy expensive.

No amount of money is enough if you spend it without saving. It's not how much you make, it's how much you save.

Suggest to cut spending and don't count on the inheritance.