By Claire Yew
At the age of 30, retirement planning was not even on my mind! I was single, my career was just taking off, and I was enjoying my life. One day, my friend told me about his plan to work very hard to retire at the age of 45. That really struck a chord, as that prompted me to ask myself: “What is MY retirement plan”?
As I delved into it, I found that the amount that I would get from the government pension scheme was pittance. I wanted to be able to retire with a comfortable life, which includes travelling, one of my passions in life. My worst fear was having to depend on my family or my future children to support me in my old age, because in Malaysia, there is no benefit system where you can just sign on if you have no income. I started looking at various ways and saving schemes to achieve my retirement goals, however none of the schemes could provide me with a decent retirement plan without me having to commit a huge proportion of my monthly salary till my retirement age. These savings schemes were not a viable option for me as I do not want to be working like a slave to meet the huge monthly savings contribution that I had committed to only to be able to enjoy my life after retirement.
Fortunately, I found that the best way for me to achieve my goal is through property investment. The main advantage property investment has over the other schemes, is the ability to leverage through a mortgage! With a mortgage, I could purchase a property worth £200,000 with just a £20,000 deposit/savings. This is something that you cannot do with other forms of investment like stocks, funds or even gold, because if you want to buy £50,000 worth of stocks, you need to have £50,000 in cash! Additionally, it would be too risky to put my life savings in stocks, but with property, no matter what happens, there will always be a brick and mortar value, and people will always need a place to live in.
With this strategy in mind, I bought a few properties with 10% deposit on a 90% repayment mortgage, with the plan to rent it out for 25 years till my retirement. By then my mortgage would be paid off and with inflation, the property could easily be worth 50% higher. This means, my 10% deposit would have grown to be worth 15 times more, or 1500% returns on my investment. Aside from the benefit of being able to leverage a mortgage, the other very important advantage is safeguarding against inflation. My rental income would also rise steadily in line with inflation. At the end of the mortgage period, I will have a property that is fully paid for, that I can live in rent free, while the other properties will be unencumbered by that time so my rents would be my net income which will be enough to cover my living and travel expenses.
Life is a box of chocolates; you never know what you are going to get! Shortly purchasing a few properties, I relocated to the UK to start a family. Before I could manage to find a job, I got pregnant, and decided to be a full-time mum. While at home, I learned about property investing in the UK. Fortunately, in just a few years, the prices of the properties which I bought in Malaysia to rose considerably, so I sold them one by one, and because of the unique power of leveraging with a mortgage, I had a 500% returns on my initial investment (my deposit), which enabled me to purchase a property in London for every property that I sold in Malaysia.
In the UK, the rental demand is strong, and there is a specific mortgage product for investors to buy for the purpose of letting it out. I get a net rental profit (after paying off my interest only mortgage & other expenses), so that becomes my income while enjoying the privilege of being a stay-at-home mum while building my property business to a portfolio of buy to let properties, to being a developer and doing joint ventures with other property developers.
As a mother of 2 children, freedom of time is something I value highly; so I never miss any of my children’s events, and they are able to attend all sorts of classes that they have interest in, and I’m always there for them when they need me most. Every holiday, I take my kids to travel and explore different countries without having to worry about taking time off work.
I’m ever so grateful to my friend who gave me the idea to start planning my retirement early, because none of this would be possible if I didn’t start to plan my retirement at the age of 30.
This is why I am very passionate about encouraging people, especially women to start planning and investing wisely from as early as possible. Even if you have a small budget, if you start early enough, and save up for a deposit for even one small investment property every 2 years, in 10 years you would have 5 and 20 years 10!
With that I leave you with a question that changed my life for the better, and I hope it would change yours too – “What is YOUR retirement plan?”
Claire Yew is a Malaysian born, 44 year old property investor with a degree in Veterinary Medicine, and a Masters in Business Administration.
After relocating to London in 2010 after the she got married and welcomed her 2 children, she decided to be a full-time mum, and started investing in properties to let.
As the founder of the Golden Property Group and a growing portfolio, and success, Claire extended her business ventures into property development. She is on a mission to help professionals, especially women, to grow and develop their source of passive income to achieve financial independence by connecting them to exclusive off-market passive investment opportunities.