The Reason Behind Investing: Is It Just the Ultimate Rat Race? And Who Is Actually the Successful Figure? (2026)
Contents
Ask ten Malaysians why they invest and nine will say “to make money”. Ask what for, and the answers thin out: a house, the children, retirement, “so I don’t have to work forever”. Underneath all of them is the same wish, which is to stop running. The rat race is the life where every month’s income is spent by the next, so you must keep running to stay still. Investing is supposed to be the way out.
Except for many people it becomes a second rat race: chasing returns, comparing portfolios, checking prices at breakfast, never arriving. This article is about the reason behind investing when it is done well, why it so often turns into another treadmill, and a definition of “the successful figure” that has nothing to do with who has the most.
📌 Key points
- The rat race is a cash-flow problem, not an income problem. Earn more and spend more and you are still running.
- Investing exists to turn work into assets, so that at some point the assets pay for the life and the work becomes optional.
- It becomes a second rat race when the goal shifts from “enough” to “more”, because “more” has no finish line.
- The successful figure is not the richest person. It is the person whose assets cover their life, whose time is their own, and who knows the number that got them there.
- The way out is arithmetic, not luck: a number, a savings rate, a return you can actually get, and years. Malaysian tools cover most of it.
What the rat race actually is
The phrase comes from the hamster wheel: running hard, going nowhere. In money terms it describes a household where income arrives, expenses consume it, and the next month depends entirely on the next pay cheque. Nothing is accumulating. A better job raises the income and, almost always, the expenses with it, so the wheel turns faster but the position does not change.
The trap is not low income. Plenty of Malaysians earning RM15,000 a month are on the wheel, with the car, the condo, the school fees and the credit card calibrated to exactly that number. The trap is that everything earned is converted into consumption, and consumption produces nothing next month. The wheel only stops when some of the income is converted into something that pays you back.
The reason behind investing
That conversion is the whole reason. An asset is anything that puts money in your pocket without your time: a dividend, rent, interest, EPF’s annual dividend, a business that runs without you. Investing is the act of moving money from the consumption side to the asset side, so that each ringgit, instead of being gone, keeps working.
The goal is not to be rich. The goal is a specific moment: when the income from the assets covers the cost of the life. At that point the pay cheque becomes optional. You may keep working, and most people do, but you are no longer running to stay still. That moment has a number, and the number is smaller than most people assume.
Here is the Malaysian version of the arithmetic, with round figures.
| Monthly cost of your life | Yearly cost | Assets needed at a 4% withdrawal | Assets needed at 5% |
|---|---|---|---|
| RM3,000 | RM36,000 | RM900,000 | RM720,000 |
| RM5,000 | RM60,000 | RM1,500,000 | RM1,200,000 |
| RM8,000 | RM96,000 | RM2,400,000 | RM1,920,000 |
| RM12,000 | RM144,000 | RM3,600,000 | RM2,880,000 |
The withdrawal rate is the share of assets you can spend each year with a reasonable chance they last; 4% is the common rule of thumb from retirement research, 5% is more aggressive. EPF’s own 2026 adequacy framework points the same direction: it sets a Basic Savings target of RM390,000 at 55, an Adequate level of RM650,000 and an Enhanced level of RM1.3 million, which is the fund’s way of saying that the number depends on the life you want, not on a single figure for everyone.
Notice what decides the number. Not the market, not a stock pick. The monthly cost of your life. Halve it and the finish line is half as far. That is why people who escape the rat race are rarely the highest earners; they are the ones who decided what “enough” costs and stopped moving the line.
How investing becomes the second rat race
It happens when the goal quietly changes from “enough” to “more”.
- Comparison. A friend’s portfolio did 30%. Yours did 8%. Yours was on track for your number; it now feels like a failure.
- Chasing. The 8% becomes a search for 30%: a new fund, a hot stock, a trading account opened for the wrong reason. Returns are chased instead of earned, and the risk goes up exactly when it did not need to.
- Lifestyle creep in disguise. The target rises with the income. RM1.5 million becomes RM3 million because the condo got bigger, and the finish line walks away at the same speed you run.
- Measuring the wrong thing. Net worth becomes the score, and net worth has no finish line. There is always someone with more, so there is never enough.
The tell is the feeling. Someone escaping the rat race through investing feels calmer each year, because the gap between assets and costs is closing and they can see it. Someone in the second rat race feels more anxious each year, because “more” never arrives. Same activity, opposite direction.
Who is the successful figure?
It is tempting to name the obvious ones. Warren Buffett, who turned patience into the most studied fortune in history and lived in the same house for decades. In Malaysia, founders like Robert Kuok or the late Teh Hong Piow of Public Bank, who built institutions over fifty years rather than trading them. They are extraordinary, and almost no reader of this article will replicate them, which makes them bad measures of success.
The useful definition is smaller and reachable. The successful figure is the person who:
- Knows their number, the monthly cost of the life they actually want, and has not moved it for years.
- Owns assets whose income covers that number, or is visibly on a path to it, with a date.
- Controls their own time. Work is chosen, not required. Whether they are a clerk with RM1.2 million in EPF and ASB at 55 or a founder with a company that runs without them, the test is the same.
- Is not anxious about markets, because the plan does not depend on next year’s return, only on the long average.
- Can explain how they did it in one sentence, which usually sounds boring: spent less than they earned for a long time, put the difference into assets, did not panic.
By that definition there are tens of thousands of successful Malaysians nobody has heard of, and a fair number of famous rich people who are still running.
The arithmetic of getting out
Three levers, and only three.
The savings rate. The share of income moved to the asset side each month. It is the most powerful lever and the only one fully in your control. At a 10% savings rate the finish line is roughly forty-plus working years away; at 30% it is nearer twenty; at 50% it is around fifteen, almost regardless of income, because a high savings rate both builds assets faster and proves the life costs less.
The return. EPF has paid 5% to 6% a year for decades, 6.15% for 2025. ASB has paid 5% to 7%. A diversified global index fund has returned around 7% to 10% a year over long periods, with bad years inside that. These are the returns to plan with. Plans that need 20% a year are not plans; they are the second rat race wearing a spreadsheet.
Time. The lever that makes the other two work. RM1,000 a month at 6% is RM165,000 after ten years, RM460,000 after twenty, RM1 million after thirty. The last decade does more than the first two combined, which is the entire case for starting now with a small amount rather than later with a large one.
Trading sits outside this arithmetic, on purpose. A trading skill can add income, and for a few people it becomes the main income, but it is built with a separate small account and judged by a journal, not by whether it beats EPF. The foundation that gets you off the wheel is the boring part, and the boring part works.
FAQ
What is the rat race?
A life in which income is fully consumed each month, so the next month depends on the next pay cheque and nothing accumulates. Raising income without raising the savings rate keeps you on it.
How much do I need to escape the rat race in Malaysia?
Roughly 20 to 25 times the yearly cost of your life, invested in assets that pay you. For a RM5,000-a-month life that is RM1.2 million to RM1.5 million. The number depends on the cost of the life, not on how much you earn.
Is investing a rat race?
It becomes one when the goal shifts from a fixed “enough” to an open-ended “more”. The cure is a number you do not move, and a plan built on returns you can actually get.
Who is a successful investor?
Someone whose assets cover the cost of their life and whose time is their own. Famous billionaires are poor measures because their path is not available to most people; the clerk with RM1.2 million in EPF and ASB at 55 is the better model.
Should I trade to get out faster?
Not as the plan. Trading is a skill, built with a small separate account and judged by a journal. If it works, it adds to the plan; if it does not, the plan was never depending on it.
Summary
The rat race is a cash-flow pattern, not an income level: everything earned is consumed, so nothing accumulates. Investing exists to move money to the asset side until the assets pay for the life, and that moment has a number set by the cost of the life, not by the market. It turns into a second rat race when “enough” becomes “more”. The successful figure is the person who knows their number, owns assets that cover it, controls their time and can explain the method in a boring sentence. The levers are the savings rate, a return you can actually get and time, in that order of control, and Malaysian tools like EPF, ASB and index funds cover most of it.
Disclaimer
This article is education, not financial advice. The figures are illustrations using round numbers and published historical returns; future returns are not guaranteed. Consult a licensed financial planner about your own circumstances. Traderpreneur Xcellence Sdn Bhd is a trading education provider and does not provide investment advice, trading signals or account management.
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