OTW Series EP08: EPF Account 3- Smart Move Or Financial Mistake Is Business Better Employment?

Introduction

In this episode of the On The Way (OTW) series, hosts Dylan and Stephanie delve into an important financial topic affecting many Malaysians today—EPF (Employees Provident Fund) contributions and the broader implications of withdrawing funds from these accounts.

Recently, the Malaysian government announced the establishment of an EPF Tre account, which allows individuals to withdraw their accumulated funds. This announcement led to a significant surge in withdrawals, with approximately 3.6 million individuals opting to take out money from their EPF accounts. As a result, this raised critical questions regarding the implications of such actions both on personal finances and the economy as a whole.

The Pros and Cons of EPF Withdrawals

Dylan begins the discussion by asserting that withdrawing money from the EPF accounts might not be inherently beneficial. While the influx of cash could stimulate the economy, he expresses concern over the potential drop in national savings levels. He cites the growing trend of employers registering for EPF accounts as a positive sign, implying more people are entering the workforce.

On the other hand, Stephanie presents a different perspective. She believes that withdrawals can be a beneficial move if individuals are leveraging the funds for investment opportunities that yield higher returns. Drawing from her personal experience during the COVID-19 pandemic, she explains how she utilized her EPF funds for trading in ETFs, which has proven to be more profitable than the guaranteed returns offered by EPF.

Stephanie highlights the importance of individual intent behind the withdrawals, arguing that using the funds for luxury purchases would be financially irresponsible. From her observations, many people, including millennials and individuals in their 30s and 40s, seem increasingly inclined to enter the entrepreneurial world rather than remain in traditional corporate roles.

The Shift Toward Entrepreneurship

Both hosts notice a trend where younger individuals and even seasoned professionals avoid conventional employment in favor of setting up their businesses. They recount personal experiences and conversations overheard in cafes, noting that this entrepreneurial spirit is flourishing. However, Dylan issues a gentle reminder that running a business is not as simple as it often appears on social media. Successful entrepreneurship requires effort, planning, and a solid foundation of knowledge.

Dylan cautions against the misconception that business ownership guarantees quick and easy financial rewards. He emphasizes the challenges of establishing a successful business, referencing the necessity of having a solid team, effective branding, and good management to ensure success in this competitive landscape.

Long-Term Business Vision

Stephanie adds that to succeed, businesses must solve real-world problems, and sustainability goes beyond just making a profit. Both hosts agree that building lasting customer relationships through strong retention strategies is crucial. They use the examples of popular coffee chains, such as Zeus Coffee and Oriental Coffee, to illustrate how these establishments resonate with consumers and continuously adapt to market demands.

In conclusion, they stress that individuals who desire to transition from the corporate world to entrepreneurship should build experience and knowledge before making a leap. They agree that achieving financial success is a gradual journey requiring patience, dedication, and a willingness to learn from failures.

Keywords

EPF, Employees Provident Fund, withdrawals, investment, entrepreneurship, national savings, financial literacy, business challenges, customer retention, market demand.

FAQ

Q1: Is it a good idea to withdraw money from my EPF account?
A1: It depends on your personal financial goals. If you plan to invest the funds in higher-return opportunities, it could be beneficial. However, withdrawing simply to spend on non-essential items is not advisable.

Q2: What are the implications of high EPF withdrawals on the economy?
A2: High withdrawals can negatively impact national savings levels but can also offer a short-term economic boost if the money is circulated back into the economy through spending.

Q3: Are more people becoming entrepreneurs rather than working in corporate jobs?
A3: Yes, there is a notable trend of individuals opting to start their own businesses instead of pursuing traditional employment, influenced by the current job market and personal aspirations.

Q4: What should I consider before starting a business?
A4: It's essential to have a clear business plan, knowledge of the market, understanding customer needs, and the ability to navigate challenges effectively.

Q5: How can a business ensure long-term success?
A5: Businesses can achieve long-term success by focusing on solving consumer problems, creating strong brand loyalty, and ensuring excellent customer service and retention strategies.