At the beginning of this month, I bought the YNAB budgeting software. I have to admit that I don't think that I require a budget software as I myself do not spend that much. However, being a numbers and chart geek, I went on ahead and made the purchase. To be perfectly honest, I am extremely addicted now. Very nice and easy to use system.
Anyway, what I do is split my expenses into a few main categories. Shared needs, shared wants, personal needs, personal wants and investments & savings. Starting this month, I have decided to share my expenses here. What I hope to achieve is to show that we can live a frugal yet fulfilling life. Its all part of my grand experiment 2014. See here to find out more; or simply read on.
Anyway, some facts first - My wife and I used to merge all our income and expenses, however, for the coming year 2014, I have decided to see whether I am able to live off my investment income alone. This is not to say that I'm not going to continue working. It's just that I will not touch any active income, only portfolio income and interest. This is to simulate the situation should I decide to retire early in the future - not too distant I hope. We will contribute equally to all shared expenses and separately to our individual needs and wants. The expenses from now till end of the year would be before we move to our new home and would be very different from 2014 as we are currently staying with my parents. For more information please see here for my previous post.
Without further ado,
Shared Needs - $490.85/2 =245.5
Condo management fees: Applicable only after our we get our house in 2014
Internet and cable: Applicable only after our we get our house in 2014
Utilities: Applicable only after our we get our house in 2014
Housing maintenance: Applicable only after our we get our house in 2014
Furniture and fittings: Applicable only after our we get our house in 2014
Mortgage repayment: Applicable only after our we get our house in 2014
Eating out: $402.3
Groceries & Stuff: $88.55
Shared Wants - $0
Special occasions:$0 - Nothing this month, but next will be substantial due to anniversary and mothers birthday.
Vacations: $0 - Aussie trip was counted in last month's budget.
Personal Needs - $372
Food: $77 - Spent an average on $4 a day for lunch, dinner usually taken at home.
Mobile: $0 - Company paid but will start tracking in 2014 to simulate E.R.
Transport: $285 - Vicom inspection, Cashcard & Petrol
Grooming: $10 - Cut my hair only once in 2 to 3 months.
Insurance: $0 - Insurance for 2013 already paid.
Medical: $0 - Hope this will always remain $0
Personal Wants - $130
Vacations: $0
Gambling: $124 - Random 4d and soccer bets - lousy month. Gonna cut this off by half
Gifts: $0 - Nothing this month, but next will be substantial due to anniversary and mothers birthday.
Alcohol: $0 - Hoping to keep it this way, easy this month as drinking buddy is overseas.
Games & Gadgets: $6 - Bought new screen protector.
Books: $0 - bought a few from kindle last month already none this month.
Others: $0
Total = 747.5
Below Average monthly investment income? YES! - But real test comes in January.
*Will be selling the car end of this year, might get a smaller one eventually.
*Currently have whole life, endowment and hospitalization, endowment premiums already fully paid and will be changing from whole life to term.
* Emergency Fund - $10k
* 1 off expenses for new home won't be included as that has been accounted for.
* Investments and Mortgage repayment will not be included as well.
Thursday 31 October 2013
Wednesday 23 October 2013
When Will Your Start Living Phase of Life Begin?
We all have that vision and goal that one day, after so much hard work and time spent, we will be able to start living our dreams. More often than not, we tend to skip the entire planning stage of how to get there. We continue working and dreaming without ever knowing when is enough, when to start living.
We never know when to get off the hamster wheel, never know when will the rat race end. I'm not saying not to work hard. I'm saying that we should know when is our enough. We should know that we are at our destination when we get there and not continue going another round around the world just to find yourself staring at your coffin.
You will most likely fall into one of the two categories of people. The first are those that are living today. They are those that enjoying their life to the fullest now whilst at the same time working. They are at jobs they enjoy and have a good work life balance.Perfect. However most of the people I know belong to the other group.The work first enjoy later bunch. It's perfectly fine to have this mindset as long as you know when the race is done.
To be able to know when enough is enough, as with all things, we must have plans and goals. Whether or not the plan changes in future does not matter. What matters is that we have a plan. In that plan, we must set our goals. What do we want in life, what are our passions, how old do you want to be before you retire, how much money you need to retire and other stuff like that.
It works better when you write it down. Write them down big and bold. Seeing it written down makes your goals and plans more concrete, more real. You will of course have to make them realistic, otherwise you might as well say that you want a trillion gazillion dollars.
Examples of knowing when is enough are statements like theses (applies to everything in life):
The secret is to plan well and once you have reached your destination, stop and enjoy the view around you. Take in the fresh air and give the people around you warm hugs and kisses. Don't continue climbing the never ending mountain. Take pleasure in all you have achieved and start living.
I hope this little post get you thinking on when is enough enough especially here in Singapore where the majority believe that enough is never enough. Where we want more than everyone else, we must win everyone else. It's good to be competitive on a small scale, but let's not let it possess our lives to the point of not being able to live a happy life.
My friends, life is short..stop putting it on hold. Make a plan, execute it and stop when you have arrived at your destination.
As always save more, spend less and invest wisely.
P.
We never know when to get off the hamster wheel, never know when will the rat race end. I'm not saying not to work hard. I'm saying that we should know when is our enough. We should know that we are at our destination when we get there and not continue going another round around the world just to find yourself staring at your coffin.
You will most likely fall into one of the two categories of people. The first are those that are living today. They are those that enjoying their life to the fullest now whilst at the same time working. They are at jobs they enjoy and have a good work life balance.Perfect. However most of the people I know belong to the other group.The work first enjoy later bunch. It's perfectly fine to have this mindset as long as you know when the race is done.
To be able to know when enough is enough, as with all things, we must have plans and goals. Whether or not the plan changes in future does not matter. What matters is that we have a plan. In that plan, we must set our goals. What do we want in life, what are our passions, how old do you want to be before you retire, how much money you need to retire and other stuff like that.
It works better when you write it down. Write them down big and bold. Seeing it written down makes your goals and plans more concrete, more real. You will of course have to make them realistic, otherwise you might as well say that you want a trillion gazillion dollars.
Examples of knowing when is enough are statements like theses (applies to everything in life):
- When my passive income covers all my expenses plus holidays.
- When I reach XX Kg in weight.
- When I have worked for XX years.
- When I have amassed XX dollars.
The secret is to plan well and once you have reached your destination, stop and enjoy the view around you. Take in the fresh air and give the people around you warm hugs and kisses. Don't continue climbing the never ending mountain. Take pleasure in all you have achieved and start living.
I hope this little post get you thinking on when is enough enough especially here in Singapore where the majority believe that enough is never enough. Where we want more than everyone else, we must win everyone else. It's good to be competitive on a small scale, but let's not let it possess our lives to the point of not being able to live a happy life.
My friends, life is short..stop putting it on hold. Make a plan, execute it and stop when you have arrived at your destination.
As always save more, spend less and invest wisely.
P.
Tuesday 22 October 2013
Early Retirement plan Step 4 - Insurance
When it comes to an early retirement, we have to realize that we have to view the need and type of insurance differently. Before, we would have to insure against a break in our income due to job loss, illness or death. We had to make sure that no matter what happened to us, our dependents would not have to make too big a change and sacrifice in their lifestyles.
However, after stepping into early retirement, we no longer have to worry about the break in income due to job loss or illness as we are no longer dependent on physically doing something in order to earn money. Our money would by then be "earned" via our streams of incomes such as portfolio income, rental income, annuities and other investments.
With that in mind, the insurance that I feel are necessary after retirement are death, hospitalization and probably some critical illness. The reason I chose these is because these are situations that are unexpected and will no doubt consume a large amount of money which your emergency fund might not cover. During times of crisis, especially after retirement, we do not want to sell away our investments to pay for these emergencies. Selling away our investments would not only decrease the amount of income we will receive in future but also cause plenty of unnecessary stress and worry.
It might be all good if we needed the money and sold out investments when the markets are up. However, what if the markets are down when we needed the money? We would definitely be selling at a great loss we might never recover from. That is not something we should risk out money on.
We should therefore hedge the majority of our risks by buying the required insurance. We should not buy insurance that are no longer essential to us as they will only hinder our cash flow whilst providing minimal returns.
Don't settle for the first company that approaches you, do some shopping around and see which plan suits your budget and needs. Read about the types of policies that are available and try as much as you can to understand how they work. There are as many unscrupulous advisers as there are advisers with good intentions out there. Don't fall victim to their words of infinite possibilities. Listen to what they say and make your choice. Don't let them make the choices for you.
As always, save more, spend less and invest wisely.
P.
However, after stepping into early retirement, we no longer have to worry about the break in income due to job loss or illness as we are no longer dependent on physically doing something in order to earn money. Our money would by then be "earned" via our streams of incomes such as portfolio income, rental income, annuities and other investments.
With that in mind, the insurance that I feel are necessary after retirement are death, hospitalization and probably some critical illness. The reason I chose these is because these are situations that are unexpected and will no doubt consume a large amount of money which your emergency fund might not cover. During times of crisis, especially after retirement, we do not want to sell away our investments to pay for these emergencies. Selling away our investments would not only decrease the amount of income we will receive in future but also cause plenty of unnecessary stress and worry.
It might be all good if we needed the money and sold out investments when the markets are up. However, what if the markets are down when we needed the money? We would definitely be selling at a great loss we might never recover from. That is not something we should risk out money on.
We should therefore hedge the majority of our risks by buying the required insurance. We should not buy insurance that are no longer essential to us as they will only hinder our cash flow whilst providing minimal returns.
Don't settle for the first company that approaches you, do some shopping around and see which plan suits your budget and needs. Read about the types of policies that are available and try as much as you can to understand how they work. There are as many unscrupulous advisers as there are advisers with good intentions out there. Don't fall victim to their words of infinite possibilities. Listen to what they say and make your choice. Don't let them make the choices for you.
As always, save more, spend less and invest wisely.
P.
Friday 18 October 2013
Grand Experiment 2014 - Simulated Retirement
Unfortunately, the simulation is only of the income and expense portion. Work continues. What I hope to achieve is to determine whether my passive and portfolio income will be able to support my current lifestyle. Work related expenses will not be taken into consideration. Moreover, this would only serve as a rough guide for me.
The expenses I would have to pay would be my half of our shared expense,half of our shared wants, my personal needs and my personal wants. All active income will be purely put towards investing and saving purposes.
Given my lack of need to spend, I am quite confident that I would be able to achieve this. That's not to say that it would be easy as my passive income is still not where I would want it to be to achieve a real early retirement. Travel would be my number one expense in the future and with current levels of income, I would only be able to make one big trip a year with a bare essentials daily budget.
To make things easier and more realistic, I am giving myself a 15k emergency fund as my passive income will not be consistent. Some months would have more income while some would not have any at all.
I plan to start this experiment in the year 2014 because that would be about the time my home would be ready thus providing a more realistic picture.
I will be providing my expenditures every end of the month starting from this month so as to get the habit of logging it down started. As I am currently still uncomfortable with releasing the amount of passive income I have, I will only be posting whether it will be a positive or negative month.
This is just an experiment for now. Hope to turn it into reality with a more buffed up and meaty passive income in the near future. Let's see how the next year turns out.
Here is how it's going to work:
The expenses I would have to pay would be my half of our shared expense,half of our shared wants, my personal needs and my personal wants. All active income will be purely put towards investing and saving purposes.
Given my lack of need to spend, I am quite confident that I would be able to achieve this. That's not to say that it would be easy as my passive income is still not where I would want it to be to achieve a real early retirement. Travel would be my number one expense in the future and with current levels of income, I would only be able to make one big trip a year with a bare essentials daily budget.
To make things easier and more realistic, I am giving myself a 15k emergency fund as my passive income will not be consistent. Some months would have more income while some would not have any at all.
I plan to start this experiment in the year 2014 because that would be about the time my home would be ready thus providing a more realistic picture.
I will be providing my expenditures every end of the month starting from this month so as to get the habit of logging it down started. As I am currently still uncomfortable with releasing the amount of passive income I have, I will only be posting whether it will be a positive or negative month.
This is just an experiment for now. Hope to turn it into reality with a more buffed up and meaty passive income in the near future. Let's see how the next year turns out.
Here is how it's going to work:
- Start with a $15,000 fund on Jan 1 2014
- All active income will be channeled to savings and investments.
- All expenses and passive income will be logged down.
- All expenses will be drawn from the $15,000 and all passive income will be pumped into it.
- Any excess flow of Passive income not used will be put into investments so as to let it grow.
- No borrowing of funds from anyone or anywhere else other than the $15k
- Experiment is a success if I end 2014 with more than $15k left in the funds.
- Experiment is a failure should I exhaust my funds anytime in the year 2014 or have less than $15k at the end of 2014 - Means income is less than expense.
Thursday 17 October 2013
The Urge to Splurge
 |
| Burning money = Burning Time |
I often wonder why do we always have to urge to splurge, we always have this urge. We have it when we in the morning, the afternoon, the evening and at night. What I want to find out is whether we are hardwired to splurge or whether it was something that we picked up along the way.
What I have deduced it that the act of splurging gets derived from wanting to reward ourselves. If you think about it, it is a vicious cycle. Chicken, egg, egg, chicken. Let me explain:
1) We have to work hard and trade our time and skill for money
2) After a hard week at work, we feel that we deserve to reward ourselves with something nice, could be a nice meal or a new toy.
3) We spend that hard earned money so we now have to go back to work to continue earning more.
4) Repeat point 1
That's the gist of it, although in reality it's more complicated than that. Why do we always splurge on things that we feel like getting at the moment. These 'rewards' are mostly things that we will never use. Come to think about it, this behavior might have stemmed from our younger days where we get rewarded by our parents or teachers for getting stuff done. Thereby resulting in us expecting a reward for our current hard work done. Since there is no one to reward us, we use the money we ourselves earn to reward ourselves. Still with me?
I recently saw a quote somewhere online, can't remember where therefore I cannot give credit to the author. It states that: "You do not pay with money; you pay with hours of your life!" It's so damn true. As I always say, money is infinite, while time is a very very finite resource which you cannot control. These days, when I have the urge to splurge, I will roughly estimate how many minute, hours or days of my life I'm trading for. Is the purchase more valuable than those hours of my life? Most of the time, the answer is no. Is getting the new phone worth trading xx hours of my life? I think not. I would rather spend my time and money on experiences that enriches my life and the life of those around me. That does not mean splurging freely, or forever continuing trading my time for money. These are the steps I choose to take:
1) Save and invest hard for a couple of years
2) Live frugally
3) Use the dividends and interest from investments to reinvest.
4) Reach my desired passive income
5) Be free to choose to work, travel or pursue passion.
I know that some outside our circle might think of my views as naive, but I do not really care. I believe in it and will do everything in my power to make it happen. I am however willing to take constructive criticisms and not brush them aside. Angry words borne out of envy or lack of understanding will be wind to my ears.
See the light in not trading your time for money, stop splurging away the hours of your life. I urge you to start saving and investing today so that one day, you will let money work for you instead of you working for money. We are not born to be slaves, we are born to be free..masters of our own life.
Early Retirement plan Step 3 - The talk with the anti-financial HULK
This post is steered more towards couples, but I'm sure there are stuff anyone can pick up on.
It's perfectly true that opposites attract. That's what bring about the spice and excitement in relationships. We humans are curious creatures and find joy in dissecting and finding out how the other person ticks. I for one love talking to my wife to find out why she behaves the way she behaves or talks the way she talks. The problem is that she does not take it the right way every time, resulting in her morphing into the anti-finance Hulk.
Sure there are times where I may have layered my questions with other obvious intentions, but I swear that for 99% of the time, I really do just want to find out more. If you have been reading my blog, you will know that the major difference my wife and I have is our perception of time and money.
My wife has no qualms about trading her time for money which in turn would be traded for stuff she likes. As for myself, I prefer not to trade my time for money. Money is in a way, an infinite resource as you can earn it back almost every time. Time however is a very very very limited resource. Once it is spent, you can never get it back ant the worst thing is that time is automatically being spent whether you like it or not.
I'm always trying to impart my beliefs to my wife with hopes that one day she would see the error of her ways. =)
Anyway, back to the topic before I lull anyone to sleep with my incessant chatter on my views - call me if you have insomnia and I'll finance chat you to sleep.. free of charge*. Terms and conditions apply.
So, as I was saying, one of the steps that you will definitely have to take before proceeding on your journey towards an early retirement is to have the talk with your other half. The reason as to why many of us have yet to do this is because we are uncertain about what our other half has to say and this uncertainty leads to fear.
Let me tell you this. The situation is what it is. Whether or not you have the talk, your other half will have a certain view about it. They might be supportive of your choice, or extremely adverse to it. The problem is that you will never find out, thus continue living in fear and ignorance which in the end leads to you not carrying out what you seek to achieve.
I say talk to your other half about what you have in mind, tell them your plans and how you plan to carry them out. - You obviously should have a damn good plan before even considering this right? If they support your choice, great on you. It's a burden off your chest and you can have an extra head in helping you think of ideas to generate more income.
If they are not supportive, at least now you know and can think of ways to convince them otherwise. Show that you can achieve financial stability without a 9-5 job. Show that you will not be a burden to them -( I feel that many do not agree to your choice as they are afraid that you will not be able to support yourself after retirement thus becoming a burden.) and most of all, let them know that this is what you really want.
Since you made a choice to be together, you have to learn how to work together. Every different situation warrants a different game plan. There are 1 to retire, 1 to continue working kind. There are the 2 to retire kind and there are also the typical 2 to work till 65 kind of couple out there. Whatever your situation is, discussing it out openly is almost always the best choice. Do it in a relaxed environment and remember, don't get too agitated.
How is your situation like? How old do you plan to retire and on roughly how much? I would love to hear more from people with these kinds of situations out there.
As always save more, spend less and invest wisely.
P.
It's perfectly true that opposites attract. That's what bring about the spice and excitement in relationships. We humans are curious creatures and find joy in dissecting and finding out how the other person ticks. I for one love talking to my wife to find out why she behaves the way she behaves or talks the way she talks. The problem is that she does not take it the right way every time, resulting in her morphing into the anti-finance Hulk.
Sure there are times where I may have layered my questions with other obvious intentions, but I swear that for 99% of the time, I really do just want to find out more. If you have been reading my blog, you will know that the major difference my wife and I have is our perception of time and money.
My wife has no qualms about trading her time for money which in turn would be traded for stuff she likes. As for myself, I prefer not to trade my time for money. Money is in a way, an infinite resource as you can earn it back almost every time. Time however is a very very very limited resource. Once it is spent, you can never get it back ant the worst thing is that time is automatically being spent whether you like it or not.
I'm always trying to impart my beliefs to my wife with hopes that one day she would see the error of her ways. =)
Anyway, back to the topic before I lull anyone to sleep with my incessant chatter on my views - call me if you have insomnia and I'll finance chat you to sleep.. free of charge*. Terms and conditions apply.
So, as I was saying, one of the steps that you will definitely have to take before proceeding on your journey towards an early retirement is to have the talk with your other half. The reason as to why many of us have yet to do this is because we are uncertain about what our other half has to say and this uncertainty leads to fear.
Let me tell you this. The situation is what it is. Whether or not you have the talk, your other half will have a certain view about it. They might be supportive of your choice, or extremely adverse to it. The problem is that you will never find out, thus continue living in fear and ignorance which in the end leads to you not carrying out what you seek to achieve.
I say talk to your other half about what you have in mind, tell them your plans and how you plan to carry them out. - You obviously should have a damn good plan before even considering this right? If they support your choice, great on you. It's a burden off your chest and you can have an extra head in helping you think of ideas to generate more income.
If they are not supportive, at least now you know and can think of ways to convince them otherwise. Show that you can achieve financial stability without a 9-5 job. Show that you will not be a burden to them -( I feel that many do not agree to your choice as they are afraid that you will not be able to support yourself after retirement thus becoming a burden.) and most of all, let them know that this is what you really want.
Since you made a choice to be together, you have to learn how to work together. Every different situation warrants a different game plan. There are 1 to retire, 1 to continue working kind. There are the 2 to retire kind and there are also the typical 2 to work till 65 kind of couple out there. Whatever your situation is, discussing it out openly is almost always the best choice. Do it in a relaxed environment and remember, don't get too agitated.
How is your situation like? How old do you plan to retire and on roughly how much? I would love to hear more from people with these kinds of situations out there.
As always save more, spend less and invest wisely.
P.
Friday 11 October 2013
Clutter Rage
While I was studying in Australia years back, my family shifted to a smaller house due to the fact that the previous one was too big for them. See, the thing is that in this smaller house, there was no designated room for me and whenever I came back to visit, I would have to bunk in with my little brother.
However, to remedy this problem when I decided to come back for good, they used some random space and "created" a room for me. Therefore it goes without saying that this "room" is super tiny which by the way was fine as I did not have many possessions due to my dislike for clutter and useless things. What I had to store my possessions were 4 layers of drawers, about 8 layers of shelves and a 1.5m horizontal pole to hang my more formal wear. This was enough, or should I say, this was way more then enough. I still had loads of space.
Fast forward a few years. Just got hitched. Enters the wife. A.K.A Junior Shopping Champion 7 years in a row and professional hoarder. Get this straight, in her house, she still has an entire room, bigger then mine filled to the brim with stuff. I kid you not what I say that there is no room to maneuver in there. So anyway, when she gained a PR status in my room, I gave her 1 out of 4 of my drawers, 2 of my shelves and half the 1.5m hanging pole which i thought was pretty generous considering that was all the space I had. No entire room to fill my stuff with. It started out well, no boundaries crossed....for like 2 weeks.
Like algae or weed, boundaries began to disappear, what was mine became hers and what was hers was still hers... which brings me to my eventual clutter rage.
Clutter Rage T-5mins: The wife was taking shower while I sit quietly on my bed reading.
Clutter Rage T-4mins: I take a breather and looked around the room and felt a super uneasy claustrophobic feeling. (Not exaggerating)
Clutter Rage T-3mins: It comes to my realization that she has overtaken my room with too much stuff. She was using 2 drawers, 3/4 the hanging pole and most, if not all my shelves. The tiny walking space I had was now filled with countless shoes and shoe boxes.
Clutter Rage T-2mins: I do not know why but like the hulk, rage started to build and boil over. How could she be so different from me.
Clutter Rage T-1min: My brain starts formulating ways to make her get rid of all that stuff...I was about to explode with rage.
Clutter Rage T-0min: The wife eventually emerges and I tell you, last warning man.... All hell broke loose.
Anyway, to cut the long story short, in the end, we came to a compromise...well, more like I came to a compromise. She had to clear the walkway of her shoes and boxes, she gets to keep the shelves and drawers.. and she could only buy new stuff if she has given or sold her older stuff away.
Till this day, I still do not understand the need to have more than you require. You only have a pair of feet, which you can only wear a pair of shoes at any given time. Why do you need a dozen dozen pairs - not a typo...but really a dozen dozen pairs, like 144. Don't even get me started on clothes and handbags.. I might break my monitor with my fist..(Perhaps I should go for anger management classes.)
I mean, to have a measure of safety, the maximum we should have is a backup pair of each type of shoes. For example, 2 sport shoes, 2 formal shoes, 2 sneakers and 2 flip flops which in my opinion is already 1 too many.
Clutter never serves any purpose, it just goes to show that we are not using what we have efficiently enough. It takes up space, which in turn take up money which come in the form of having to have an additional room just to store things that you might or might not use.
We should learn to maximize the use of any products and reduce clutter in our lives. I assure you that we will feel more free, more refreshed and less stressed up. Take a look at your stuff this weekend, are they things you use, or are they things that you never use but keep just because you think that you might use them.
Don't be mistaken, I love my wife to bits. I would tolerate most things but not everything. Sometimes you compromise but sometimes you have to fight for what you believe in. She might not see the benefits of cluttering now but I'm pretty sure that I will change her mind one day.
Do you have the same circumstances? I'm quite sure in many relationships, there are collectors and throwers. Would love to hear more about how you deal with it or if you managed to convince someone that clutter = BAD.
Remove clutter and feel the difference.
P.
However, to remedy this problem when I decided to come back for good, they used some random space and "created" a room for me. Therefore it goes without saying that this "room" is super tiny which by the way was fine as I did not have many possessions due to my dislike for clutter and useless things. What I had to store my possessions were 4 layers of drawers, about 8 layers of shelves and a 1.5m horizontal pole to hang my more formal wear. This was enough, or should I say, this was way more then enough. I still had loads of space.
Fast forward a few years. Just got hitched. Enters the wife. A.K.A Junior Shopping Champion 7 years in a row and professional hoarder. Get this straight, in her house, she still has an entire room, bigger then mine filled to the brim with stuff. I kid you not what I say that there is no room to maneuver in there. So anyway, when she gained a PR status in my room, I gave her 1 out of 4 of my drawers, 2 of my shelves and half the 1.5m hanging pole which i thought was pretty generous considering that was all the space I had. No entire room to fill my stuff with. It started out well, no boundaries crossed....for like 2 weeks.
Like algae or weed, boundaries began to disappear, what was mine became hers and what was hers was still hers... which brings me to my eventual clutter rage.
Clutter Rage T-5mins: The wife was taking shower while I sit quietly on my bed reading.
Clutter Rage T-4mins: I take a breather and looked around the room and felt a super uneasy claustrophobic feeling. (Not exaggerating)
Clutter Rage T-3mins: It comes to my realization that she has overtaken my room with too much stuff. She was using 2 drawers, 3/4 the hanging pole and most, if not all my shelves. The tiny walking space I had was now filled with countless shoes and shoe boxes.
Clutter Rage T-2mins: I do not know why but like the hulk, rage started to build and boil over. How could she be so different from me.
Clutter Rage T-1min: My brain starts formulating ways to make her get rid of all that stuff...I was about to explode with rage.
Clutter Rage T-0min: The wife eventually emerges and I tell you, last warning man.... All hell broke loose.
Anyway, to cut the long story short, in the end, we came to a compromise...well, more like I came to a compromise. She had to clear the walkway of her shoes and boxes, she gets to keep the shelves and drawers.. and she could only buy new stuff if she has given or sold her older stuff away.
Till this day, I still do not understand the need to have more than you require. You only have a pair of feet, which you can only wear a pair of shoes at any given time. Why do you need a dozen dozen pairs - not a typo...but really a dozen dozen pairs, like 144. Don't even get me started on clothes and handbags.. I might break my monitor with my fist..(Perhaps I should go for anger management classes.)
I mean, to have a measure of safety, the maximum we should have is a backup pair of each type of shoes. For example, 2 sport shoes, 2 formal shoes, 2 sneakers and 2 flip flops which in my opinion is already 1 too many.
Clutter never serves any purpose, it just goes to show that we are not using what we have efficiently enough. It takes up space, which in turn take up money which come in the form of having to have an additional room just to store things that you might or might not use.
We should learn to maximize the use of any products and reduce clutter in our lives. I assure you that we will feel more free, more refreshed and less stressed up. Take a look at your stuff this weekend, are they things you use, or are they things that you never use but keep just because you think that you might use them.
Don't be mistaken, I love my wife to bits. I would tolerate most things but not everything. Sometimes you compromise but sometimes you have to fight for what you believe in. She might not see the benefits of cluttering now but I'm pretty sure that I will change her mind one day.
Do you have the same circumstances? I'm quite sure in many relationships, there are collectors and throwers. Would love to hear more about how you deal with it or if you managed to convince someone that clutter = BAD.
Remove clutter and feel the difference.
P.
Early Retirement Plan Step 2 - Eliminate Debt
The root cause of many financial ruins and disasters is debt. Be it individual, corporations or countries. Luckily, as individuals, it is far easier to reign in this horrific occurrence by being prudent, frugal and having sound financial sense.
Personally, I feel that it would be impossible or extremely difficult to be able to retire and have unsettled debts at the same time. Retirement, in my definition would include freedom and debts means the ball and chain keeping you from being free.
In our lives, especially in Singapore, I feel that is is not very possible to live without borrowing money. This is especially so when it comes to purchasing your home. With HDBs costing about $300,000, ECs Costing about $800,000 and private housing costing millions, its not easy.
After housing comes private transportation. With the COE at such a high level, even buying a small car would cost about $100,000. But even at this high pricing, Singaporeans are continuing to purchase vehicles freely. Are these people purchasing these vehicles really that cash rich? Or are they playing the debt game?
Credit cards are extremely easy to obtain as well and are a double edged sword depends on how you use them. More can be read here. Buying more than you can pay off is a path we should never venture towards.
Anyway, debt elimination is one of the most important steps to attain financial freedom and an early retirement. If you have been reading personal finance blogs, you would have noticed that there are dozens of pointers to eliminate debt. Here are some random ones off the back of my head:
Always trying to achieve a higher social status will only bring about more debt. We ourselves are the best judge to determine what is best and affordable for ourselves. Stay in a home that is best for you, not what others think is best for you. You don't have to own a car just because everyone has one and you don't. By walking or cycling that bit more, you will definitely be healthier. Let them flaunt their wealth now, let them continue reaching for the unreachable status goal. One day soon, at 9 A.M. in the morning, we would be sipping aromatic coffee at some cafe whilst watching them make the rush to another whole day at work. Sorry about the mean streak...or not..
As always, save more, spend less and invest wisely.
P.
Personally, I feel that it would be impossible or extremely difficult to be able to retire and have unsettled debts at the same time. Retirement, in my definition would include freedom and debts means the ball and chain keeping you from being free.
In our lives, especially in Singapore, I feel that is is not very possible to live without borrowing money. This is especially so when it comes to purchasing your home. With HDBs costing about $300,000, ECs Costing about $800,000 and private housing costing millions, its not easy.
After housing comes private transportation. With the COE at such a high level, even buying a small car would cost about $100,000. But even at this high pricing, Singaporeans are continuing to purchase vehicles freely. Are these people purchasing these vehicles really that cash rich? Or are they playing the debt game?
Credit cards are extremely easy to obtain as well and are a double edged sword depends on how you use them. More can be read here. Buying more than you can pay off is a path we should never venture towards.
Anyway, debt elimination is one of the most important steps to attain financial freedom and an early retirement. If you have been reading personal finance blogs, you would have noticed that there are dozens of pointers to eliminate debt. Here are some random ones off the back of my head:
- Stop using your credit cards NOW if you are in any form of credit card debt. Credit cards have one of the highest interest charged and once it starts to snowball, it rolls..and boy does it roll fast.
- When paying off your debts, start with the one with the highest interest charged 1st as these are the ones that will do the most damage.
- For housing, don't just stick to your regular mortgage payments. From time to time, make lump sum payments to reduce the loan.
- If urgent, cancel or reduce all unnecessary subscriptions like magazines, television and cell phone plans. It is far more important to get urgent debts paid off first rather than to spend that few hours watching tv.
- Have a budget set up, cut whatever you can cut and put all surplus funds towards the elimination of debt.
Always trying to achieve a higher social status will only bring about more debt. We ourselves are the best judge to determine what is best and affordable for ourselves. Stay in a home that is best for you, not what others think is best for you. You don't have to own a car just because everyone has one and you don't. By walking or cycling that bit more, you will definitely be healthier. Let them flaunt their wealth now, let them continue reaching for the unreachable status goal. One day soon, at 9 A.M. in the morning, we would be sipping aromatic coffee at some cafe whilst watching them make the rush to another whole day at work. Sorry about the mean streak...or not..
As always, save more, spend less and invest wisely.
P.
Wednesday 9 October 2013
Travelling - The No.3 In my Life
If I were to give you 5 seconds to think of the 3 things you love most in this world, what would be the top 3 that comes to mind? For me, they are My family, Financial Freedom and Travel. I wonder whether it would be appropriate to blog about my travels and my love of traveling here. But come to think about it, one of the reason for having an early retirement would be to have more time to travel so I'm just going to go ahead and do it.
So starting from now, whenever I travel, I would post a little of the joys that it gives me. And hopefully share and show a little more of this wonderful world to you.
Just last month, the wife and I went on our yearly pilgrimage to Western Australia(WA). We studied there during our university days and have been going there yearly ever since. Contrary to popular/unpopular beliefs that WA is a very boring place, I find it to be very peaceful, fun, beautiful and relaxing. On this trip, we decided to explore a little more of WA.
Albany
On previous trips, we would drive mid-way down south to Margaret River, the famous wine region in Australia. However, this time, we decided to be a little more adventurous and take the 5 hour drive to Albany. As it was our 1st time exploring Albany, we did not know what to expect but boy were we surprised.
Pristine beaches with clear blue water and almost pure white sand lace the entire coastline of Albany. If you love marvelous scenic views of mother nature, you would drool at what Albany has to offer. Due to its close proximity to the sea, you can expect to find loads of seafood. The 1st meal we had there was at this rustic place called the Old Marron Farm. We ordered the platter which consisted of marrons, prawn, trout, anchovies and a side of salad. Needless to say, it was absolutely delicious and extremely fresh. - Come to think of it, I think my number 1 love might be food.....wife.....food....wife.....=X
Next destination we decided to explore was the wind farm, there is something about windmills that are so....tranquil and zen. Might be the constant wooshing sounds of the blades that creates a sense of lull. Anyway, whilst I was driving there, I was seriously expecting maybe 2 or 3 windmill. What was I thinking..What kind of wind farm consists of only 3. There were DOZENS stretched almost further that the eye can see along the coast. What a sight. I swear that we could have sat there for hours if not for the constraints of time. There were several viewpoints by which you can view the wind farm. All within walking distance.
In case you cannot see the picture directly above properly, it's a picture of an Australian Aboriginal Belief that I find to be extremely true. It says that "We are all visitors to this time, this place. We are just passing through. Our purpose here is to observe, to learn, to grow, to love... and then we return home." I feel that this saying really resonates in my heart. It somewhat parallels with my beliefs. Whatever material things we possess or want to possess cannot be taken with us when we go. What we should aim for is experience instead. Experience love, new adventures, new feelings, new countries. Experience and memories will be forever with us.
We did not have sufficient time in Albany to see everything so we had to see the best of what we could see. Upon asking, we were told that there was a beach nearby that was called "Little Beach" and it was supposed to be one of the top 10 beaches in Western Australia. We were definitely not disappointed. The beach was nothing short of breathtaking. The color of the sea was, I kid you not, sapphire blue. with white frothing waves crashing onto beautiful pearly white fine sand. Not able to resist the urge, I kicked off my shoes, rolled up my jeans and rushed towards the water. Cool clean water embraced my feet while crisp salty ocean air filled my lungs. Pure joy I tell you. If these did not bring you any pleasure, I do not know what would. Anyway, to the left of the beach were giant rock formations which you could climb to get a different view of the beach. We climbed to the top, poured myself a glass of wine ( Yes, no surprise there. I do love my wine.) and laid there in the sun while the winds and the sounds of the oceans caressed us to utter bliss.
The pictures do no justice.
Anyway, this short post concludes the Albany leg of my Western Australian trip. Hope you will be able to visit this wonderful place too.
To love, Experience and Travel.
P.
So starting from now, whenever I travel, I would post a little of the joys that it gives me. And hopefully share and show a little more of this wonderful world to you.
Just last month, the wife and I went on our yearly pilgrimage to Western Australia(WA). We studied there during our university days and have been going there yearly ever since. Contrary to popular/unpopular beliefs that WA is a very boring place, I find it to be very peaceful, fun, beautiful and relaxing. On this trip, we decided to explore a little more of WA.
Albany
 |
| Little Beach - Albany - Western Australia |
On previous trips, we would drive mid-way down south to Margaret River, the famous wine region in Australia. However, this time, we decided to be a little more adventurous and take the 5 hour drive to Albany. As it was our 1st time exploring Albany, we did not know what to expect but boy were we surprised.
Pristine beaches with clear blue water and almost pure white sand lace the entire coastline of Albany. If you love marvelous scenic views of mother nature, you would drool at what Albany has to offer. Due to its close proximity to the sea, you can expect to find loads of seafood. The 1st meal we had there was at this rustic place called the Old Marron Farm. We ordered the platter which consisted of marrons, prawn, trout, anchovies and a side of salad. Needless to say, it was absolutely delicious and extremely fresh. - Come to think of it, I think my number 1 love might be food.....wife.....food....wife.....=X
 |
| Marron Platter at Old Marron Farm Albany |
Next destination we decided to explore was the wind farm, there is something about windmills that are so....tranquil and zen. Might be the constant wooshing sounds of the blades that creates a sense of lull. Anyway, whilst I was driving there, I was seriously expecting maybe 2 or 3 windmill. What was I thinking..What kind of wind farm consists of only 3. There were DOZENS stretched almost further that the eye can see along the coast. What a sight. I swear that we could have sat there for hours if not for the constraints of time. There were several viewpoints by which you can view the wind farm. All within walking distance.
 |
| Albany Wind farm |
 |
| Albany Wind Farm |
 | |||
| Australian Aboriginal Belief |
In case you cannot see the picture directly above properly, it's a picture of an Australian Aboriginal Belief that I find to be extremely true. It says that "We are all visitors to this time, this place. We are just passing through. Our purpose here is to observe, to learn, to grow, to love... and then we return home." I feel that this saying really resonates in my heart. It somewhat parallels with my beliefs. Whatever material things we possess or want to possess cannot be taken with us when we go. What we should aim for is experience instead. Experience love, new adventures, new feelings, new countries. Experience and memories will be forever with us.
We did not have sufficient time in Albany to see everything so we had to see the best of what we could see. Upon asking, we were told that there was a beach nearby that was called "Little Beach" and it was supposed to be one of the top 10 beaches in Western Australia. We were definitely not disappointed. The beach was nothing short of breathtaking. The color of the sea was, I kid you not, sapphire blue. with white frothing waves crashing onto beautiful pearly white fine sand. Not able to resist the urge, I kicked off my shoes, rolled up my jeans and rushed towards the water. Cool clean water embraced my feet while crisp salty ocean air filled my lungs. Pure joy I tell you. If these did not bring you any pleasure, I do not know what would. Anyway, to the left of the beach were giant rock formations which you could climb to get a different view of the beach. We climbed to the top, poured myself a glass of wine ( Yes, no surprise there. I do love my wine.) and laid there in the sun while the winds and the sounds of the oceans caressed us to utter bliss.
The pictures do no justice.
 |
| Rock Formation at Little Beach Albany |
 |
| Rock Formation at Little Beach Albany |
 |
| Rock Formation at Little Beach Albany |
 |
| Albany - Little Beach |
Anyway, this short post concludes the Albany leg of my Western Australian trip. Hope you will be able to visit this wonderful place too.
To love, Experience and Travel.
P.
Frugality
Very often these days, I have been hearing fellow Singaporeans using the words frugal and cheap. On one hand, is felt quite nice that many in Singapore are becoming more enlightened to the frugal way of life. On the other, I kept having the nagging feeling that an equal amount of people are confused between being frugal and cheap. They are most definitely not the same thing.
Here is the definition of these words I have found on dictionary.com .
Frugal - Economical in use or expenditure; prudently saving or sparing, not wasteful.
Cheap - Of little account; of small value; mean; shoddy: cheap conduct; cheap workmanship.
To my understanding, being frugal means to not waste. To use everything to the fullness of its value and also to maximize efficiency. Excessive obsession on frugality might sometimes lead to cheapness, the evil twin of frugality. Cheapness is then you buy products of cheaper quality, cheat people of what they deserve or deliver sub par quality or services.
What we should aim for is to be frugal and not cheap. If people do not understand and call what you are doing cheap, it would be nice to educate them on the difference a little. Show them the difference that you are frugal and not cheap. You carry quality products which you use to the fullest and leave little waste. You use what you have efficiently and effectively so you do not need to spend unnecessarily.
Here are some difference between being frugal and cheap.
Frugal - Buying healthy and nutritious groceries only when you have finished those that you have.
Cheap - Buying loads of cheap low nutrition food at low cost because they are on sale.
Frugal - Buying a good quality shoe at reasonable prices which can last you years.
Cheap - Buying the cheapest shoe you can find which last you only 6 months.
Frugal - Inviting your friends over for dinner instead of dining out to and still have the same amount of fun at a lower cost
Cheap - Go out with your friends and hope or ask them for a treat.
You get the point..
Moving further on to the subject of frugality, I have to emphasize once again, as with all other things, that even being frugal must be done in moderation. Being overly frugal can be detrimental to your life as you might miss out on enjoying the most beautiful things in life. Spend and quality and not quantity. The only times one should take frugality to the extremes would be when one is in high interest debts. In this case, I feel that everything that should be cut must be else the debt snowballs into an avalanche. Even in this case, after clearing the debt, one should not continue this extreme frugality lifestyle but slowly ease back into a more normal kind of frugal.
I urge you all to find that point between bring frugal, too frugal and plain cheap. The rule is to be frugal, cross over to too frugal only if you really have no choice and never ever cross over to being cheap.
Would love to hear your views on this topic.
As always, save more, spend less and invest wisely.
P.
Here is the definition of these words I have found on dictionary.com .
Frugal - Economical in use or expenditure; prudently saving or sparing, not wasteful.
Cheap - Of little account; of small value; mean; shoddy: cheap conduct; cheap workmanship.
To my understanding, being frugal means to not waste. To use everything to the fullness of its value and also to maximize efficiency. Excessive obsession on frugality might sometimes lead to cheapness, the evil twin of frugality. Cheapness is then you buy products of cheaper quality, cheat people of what they deserve or deliver sub par quality or services.
What we should aim for is to be frugal and not cheap. If people do not understand and call what you are doing cheap, it would be nice to educate them on the difference a little. Show them the difference that you are frugal and not cheap. You carry quality products which you use to the fullest and leave little waste. You use what you have efficiently and effectively so you do not need to spend unnecessarily.
Here are some difference between being frugal and cheap.
Frugal - Buying healthy and nutritious groceries only when you have finished those that you have.
Cheap - Buying loads of cheap low nutrition food at low cost because they are on sale.
Frugal - Buying a good quality shoe at reasonable prices which can last you years.
Cheap - Buying the cheapest shoe you can find which last you only 6 months.
Frugal - Inviting your friends over for dinner instead of dining out to and still have the same amount of fun at a lower cost
Cheap - Go out with your friends and hope or ask them for a treat.
You get the point..
Moving further on to the subject of frugality, I have to emphasize once again, as with all other things, that even being frugal must be done in moderation. Being overly frugal can be detrimental to your life as you might miss out on enjoying the most beautiful things in life. Spend and quality and not quantity. The only times one should take frugality to the extremes would be when one is in high interest debts. In this case, I feel that everything that should be cut must be else the debt snowballs into an avalanche. Even in this case, after clearing the debt, one should not continue this extreme frugality lifestyle but slowly ease back into a more normal kind of frugal.
I urge you all to find that point between bring frugal, too frugal and plain cheap. The rule is to be frugal, cross over to too frugal only if you really have no choice and never ever cross over to being cheap.
Would love to hear your views on this topic.
As always, save more, spend less and invest wisely.
P.
Tuesday 8 October 2013
Early Retirement Plan Step 1 - Reduction of Spending
Dear readers, this is part one of a multiple part post. In these posts, I will be discussing the steps to be taken to achieve an early retirement, mainly in the context of Singapore but I'm very sure it applies in most countries as well. These are my views and beliefs which you are welcomed to share.. or not. Either way, you comments and criticism will be well accepted.
I feel that many of us these days are more enlightened to the fact that there are ways to escape the much mentioned rat race. Many personal finance bloggers have been popping up in recent years stating the merits of proper financial planning, frugality, saving and investing of money. I have read through dozens and dozens of them and I definitely share their thought. Some more than others.
There are many schools of personal finance beliefs, many are mixes and matches of one or the other. Everyone has to seek and find the right mix of beliefs and strategies to match their lifestyle and circumstances. There is no such thing as a definite path, there are many.
As for myself, I subscribe to the belief of an early retirement which will be achieved through being frugal, avoiding excessive consumerism and careful investing for passive income which brings me to my step 1.
No matter how much money you earn, be it a $1000/month to $100,000/ month, you will never be rich or financially free if the amount of money you spend exceeds the money you earn, even by a single dollar. To remedy this fault, there are only 3 routes you can possibly take, besides windfall gains. They are either to cap your spending and increase your earnings, cap your earnings and reduce your spending, or the best option which is to increase your earnings and decrease your spending.
For the majority of us common folks, increasing our earnings would not be easy. Ways to do so would be to get a second or third job, ask for a pay raise or start a side business. These methods would either be tough to administer or would take too long, which might cause your interest of being financially free to wane.
What would be an easier and more immediate path would be to reduce our expenses and be more frugal. Studies have shown that most of our purchases end up as waste. This means that we are not effectively utilizing what we purchase. If we could cut these waste and purchase only what we could effectively use, it would not only save our wallets but also the earth simultaneously.
Taking a look at an example close at hand would be food. If like the majority, we buy so much of it and end up throwing away the excess when they expire while continuing to buy some more. This is an endless cycle. What we should be doing is to make sure we finish up whatever we have purchased before going out to purchase more. One simple way of making sure you do not waste is to monitor which products are expiring and use them first.
Another example would be electronic products. These things get obsolete so fast and since they have become such a major part of our lives, we find it very difficult to live without them. As part of the consumerism movement, we are programmed to keep up with the latest gadget even though the changes and upgrades to them are ever so minor. We love being trendsetters but this is something that we have to change if we want to reduce waste and increase frugality. We should use our gadgets till they are no longer useful.
There are millions of other examples that I can list out but I'm sure that you are able to think of them.
So for today, list out your list of things that you commonly spend on. Break them down into 2 categories, needs and wants. The list under wants should be cut down first before the list under needs. Make the choice and effort to really reduce these expenses. If you are seriously and truly searching for an early retirement and/or financial freedom, start by following step 1 and you will be a step closer.
I am pretty sure there are many items which can be reduced and many items which can be used more effectively without the need to consume more. I am looking forward to hearing your thoughts on this matter.
As always, save more, spend less and invest wisely.
P.
I feel that many of us these days are more enlightened to the fact that there are ways to escape the much mentioned rat race. Many personal finance bloggers have been popping up in recent years stating the merits of proper financial planning, frugality, saving and investing of money. I have read through dozens and dozens of them and I definitely share their thought. Some more than others.
There are many schools of personal finance beliefs, many are mixes and matches of one or the other. Everyone has to seek and find the right mix of beliefs and strategies to match their lifestyle and circumstances. There is no such thing as a definite path, there are many.
As for myself, I subscribe to the belief of an early retirement which will be achieved through being frugal, avoiding excessive consumerism and careful investing for passive income which brings me to my step 1.
No matter how much money you earn, be it a $1000/month to $100,000/ month, you will never be rich or financially free if the amount of money you spend exceeds the money you earn, even by a single dollar. To remedy this fault, there are only 3 routes you can possibly take, besides windfall gains. They are either to cap your spending and increase your earnings, cap your earnings and reduce your spending, or the best option which is to increase your earnings and decrease your spending.
For the majority of us common folks, increasing our earnings would not be easy. Ways to do so would be to get a second or third job, ask for a pay raise or start a side business. These methods would either be tough to administer or would take too long, which might cause your interest of being financially free to wane.
What would be an easier and more immediate path would be to reduce our expenses and be more frugal. Studies have shown that most of our purchases end up as waste. This means that we are not effectively utilizing what we purchase. If we could cut these waste and purchase only what we could effectively use, it would not only save our wallets but also the earth simultaneously.
Taking a look at an example close at hand would be food. If like the majority, we buy so much of it and end up throwing away the excess when they expire while continuing to buy some more. This is an endless cycle. What we should be doing is to make sure we finish up whatever we have purchased before going out to purchase more. One simple way of making sure you do not waste is to monitor which products are expiring and use them first.
Another example would be electronic products. These things get obsolete so fast and since they have become such a major part of our lives, we find it very difficult to live without them. As part of the consumerism movement, we are programmed to keep up with the latest gadget even though the changes and upgrades to them are ever so minor. We love being trendsetters but this is something that we have to change if we want to reduce waste and increase frugality. We should use our gadgets till they are no longer useful.
There are millions of other examples that I can list out but I'm sure that you are able to think of them.
So for today, list out your list of things that you commonly spend on. Break them down into 2 categories, needs and wants. The list under wants should be cut down first before the list under needs. Make the choice and effort to really reduce these expenses. If you are seriously and truly searching for an early retirement and/or financial freedom, start by following step 1 and you will be a step closer.
I am pretty sure there are many items which can be reduced and many items which can be used more effectively without the need to consume more. I am looking forward to hearing your thoughts on this matter.
As always, save more, spend less and invest wisely.
P.
Friday 20 September 2013
Early Semi Retirement - The best of both worlds.
How often have you wished that you were able to do what you love and still have enough money to see to all your expenses? Kudos to those who are currently loving their jobs they are at but many of us are stuck working at places we have no wish to be at.
We might not dread going to work, but that does not mean that its the place to want to be at the moment either For us who do not yet have a big enough investment fund to retire, one of the options that we have would be to semi-retire. However, I am going to have to remind you that tradeoffs would have to be made to get there. These tradeoffs and problems could come in many forms, most common of them are:
Its not all just fluffy dreams, it can definitely be achieved. But careful plans have to be made, you must be confident that your finances can hold up, you must acknowledge that you cannot afford to spend as much as you did when you were working full time and you must definitely have a contingency plan. Here is a check list of the things that you need or will have to do.
As always, save more, spend less and invest wisely.
We might not dread going to work, but that does not mean that its the place to want to be at the moment either For us who do not yet have a big enough investment fund to retire, one of the options that we have would be to semi-retire. However, I am going to have to remind you that tradeoffs would have to be made to get there. These tradeoffs and problems could come in many forms, most common of them are:
- Less income coming in every month - This could be mitigated by building a passive income enough to cover half or the entire of your expenses.
- Spousal disagreement - If you are married, you have made a choice that every decision you make involves 2 persons now. Make sure your spouse is agreeable with the choice that you are makingso as not to cause any future disagreements and resentment.
- Emotional Abuse from others - This would most probably happen if you are young and not of the "proper" semi retirement age. That is why, before making the choice, you have to give it very very serious thought and once you have decided, hold on to your choice and never let anyone talk you down. There will definitely be people who don't understand, people who are angry with your choice or people who are jealous of what you are doing just because they do not have the courage to seek what they desire. Let me remind you this - THIS IS YOUR LIFE, not theirs. If you succeed, it is YOU who succeeds and if you fail, it is YOU who fails. Do not let anyone choose your path for you else you will resent that person greatly in the future.
Its not all just fluffy dreams, it can definitely be achieved. But careful plans have to be made, you must be confident that your finances can hold up, you must acknowledge that you cannot afford to spend as much as you did when you were working full time and you must definitely have a contingency plan. Here is a check list of the things that you need or will have to do.
- Emergency Funds - This is important whether you are still working, semi retired or retired. You never know when an emergency would strike so this fund would definitely come in handy till you figure out your next move. Only you can know the amount of funds to have here. If you have the ability to reestablish your cash flow fast, you will require less.
- Cashflow - If you are partially relying on dividends, you will have to be very careful as it does not come at an equal amount every month. Make sure you always have a cash pool to fund those months you have less.
- Boss's Agreement - This is the most important actually if you do not intend to leave your current employment. You would have to somehow convince your boss to allow you to work part time. If this does not work out, you could always find a less stressful part time job that you enjoy.
- Medical Insurance - I feel that this is an extremely important item that you should acquire as you might not be receiving it from your regular employment. Having unexpected medical emergencies could derail any plan.
- A Plan - It goes without saying that you MUST have a plan, how you are going to fund your expenses, what are you going to do after semi retiring, what backups do you have and what are you going to do when if you do not succeed.
As always, save more, spend less and invest wisely.
Monday 12 August 2013
The Overflow System
Everyone has different ways to save money. Some segregate it by the amount needed while some segregate it by the differing levels of priorities. Whichever your case or reason for saving is, we all have to admit that having that savings is important. Save to invest, save to buy something nice, save to go on a holiday or saving for retirement. Everything starts with putting aside that 1st dollar. I do not know what methods you use but here is what I do.
Firstly, I come up with a list of all the things that I would require the money for - just for stuff with larger monetary outlay. For example :
Annual fixed expenses - For insurance, road tax and stuff like that.
Emergency funds - For unexpected expenses like hospital bills, home repairs or unexpected loss of cashflow.
Large Scale Holidays - For example, I want to go on a month long holiday in 2020 to Alaska.
Impulse Funds - For rare occasions when I feel like I deserve to indulge as I rarely buy stuff anymore - even gadgets. I'll just let this fund grow till I eventually want or need to buy something.
Renovation Funds - As I am getting my new home soon, in hopefully about 6 months, I would need money for renovation and furniture. Now, my home is something that I do not want to stingy with as it would be where my wife and I would be living so I guess I'll need a reasonably large amount of funds here.
Secondly, I would determine the level of importance and the amount of time I have before I would have to utilize the fund therefore setting its priorities. Here is an example
1) Annual Fixed Expenses
2) Renovation Fund
3) Emergency Fund
4) Large Scale Holiday Fund
4) Impulse Fund
The reason I did not put emergency fund as my top priority is because I have already set that aside and will only top it up should I ever utilize it. The large scale holiday fund and impulse funds share the same level of importance so any funds flowing into them will be split 50/50
Anyway, here is how the overflow system works. When funds come into the bank, a portion 1 of it would firstly be set aside for monthly expenses. Portion 2 would be set aside for savings and investments. The third portion would then be put into a holding account. This holding account would then be put to fill up the items on the list. Starting with item one. When that reaches its target, the funds would then overflow to item 2 and so on and so forth. It might sound a little tedious or complicated but once you get used to it, its quite a good way to do things. I love having a system so I don's miss out on important stuff.
How do you prioritize and save for items on your list? Sharing is caring - so please help each other out with ideas.
As always, save more, spend less and invest wisely.
P.
Firstly, I come up with a list of all the things that I would require the money for - just for stuff with larger monetary outlay. For example :
Annual fixed expenses - For insurance, road tax and stuff like that.
Emergency funds - For unexpected expenses like hospital bills, home repairs or unexpected loss of cashflow.
Large Scale Holidays - For example, I want to go on a month long holiday in 2020 to Alaska.
Impulse Funds - For rare occasions when I feel like I deserve to indulge as I rarely buy stuff anymore - even gadgets. I'll just let this fund grow till I eventually want or need to buy something.
Renovation Funds - As I am getting my new home soon, in hopefully about 6 months, I would need money for renovation and furniture. Now, my home is something that I do not want to stingy with as it would be where my wife and I would be living so I guess I'll need a reasonably large amount of funds here.
Secondly, I would determine the level of importance and the amount of time I have before I would have to utilize the fund therefore setting its priorities. Here is an example
1) Annual Fixed Expenses
2) Renovation Fund
3) Emergency Fund
4) Large Scale Holiday Fund
4) Impulse Fund
The reason I did not put emergency fund as my top priority is because I have already set that aside and will only top it up should I ever utilize it. The large scale holiday fund and impulse funds share the same level of importance so any funds flowing into them will be split 50/50
Anyway, here is how the overflow system works. When funds come into the bank, a portion 1 of it would firstly be set aside for monthly expenses. Portion 2 would be set aside for savings and investments. The third portion would then be put into a holding account. This holding account would then be put to fill up the items on the list. Starting with item one. When that reaches its target, the funds would then overflow to item 2 and so on and so forth. It might sound a little tedious or complicated but once you get used to it, its quite a good way to do things. I love having a system so I don's miss out on important stuff.
How do you prioritize and save for items on your list? Sharing is caring - so please help each other out with ideas.
As always, save more, spend less and invest wisely.
P.
Monday 15 July 2013
Gone too Soon
I realize that the title of the post is similar to that of a MJ song, but there is no coincidence. Recently, my grandmother passed away at a relatively young age due to cancer. It felt and still feels extremely surreal and sometimes I do not even remember that she is gone.
While she was alive, I felt that she did live to the best of her abilities. She made plenty of good friends due to her good and loving nature, she traveled often and she will never let an opportunity to help anyone in need pass. What she left behind were good memories of her.
Throughout this time, waves of thoughts flowed through my mind:
1) We never know when the end will arrive - We often procrastinate what we want to do because we always believe that we can do it tomorrow, but what if tomorrow never comes and today is your last? If you knew the exact day and time you would die in advance, wold you live the way you are living now? Would you still plan to retire at 65 if you know you would die at 66? Hell no. The thing is that we do not know when it would happen. That said, we should not just let go and go mad. We should still save and plan for a long life, just in moderation. Balance the joy you desire between now and later. Die smiling with no regrets.
2) The people we leave behind are the ones who suffer the most - When she passed, I was there, together with a few close relatives. She did not suffer, was not in any kind of pain. She went peacefully( Thank God).
As for the rest of us, the emotional pain was excruciating. This was the first time I experienced such a close and loved relative pass away before my very eyes. But what I felt could not have been even a tiny fraction of what my Grandfather who has been her life partner, friend, confidant and soul mate felt. To me, he has always been a very strong man. Never complained, never cried and never troubled anyone for anything. When he broke down, you could really see how much love he had for her. - I realize that this is what I want when I eventually die, to have people who love me surrounding me when I pass on.
3) We really have to set up a will, no matter how taboo it sound. - In this time and age, writing a will is less frowned upon but still a taboo subject. It will solve problems of who gets what. When it comes to money, it's really hard to tell. Maybe that's why they say that money is the root to all evil. Causes family conflicts and complications.
4) Just a memory - In the end, all we become is just a memory to those around us. And when they go, even that memory will cease to exist. We would just be a blip in the everlasting stretch of time, the fire in the matchstick that burn for the briefest of times. If that is the case, I want my matchstick to burn as bright as it can, no matter how brief. Let us live our lives to the fullest, love to the fullest, enjoy to the fullest to the best of your ability.
Joy and happiness does not have to cost a lot of money and spending a lot of money does not necessarily bring joy. Take an hour or two to think of what truly brings you joy. To me, joy is having my wife give me a loving hug when I return from work. Joy is going out with best of friends for a simple meal and having a ball of a time. Joy is seeing the look on my wife's face when I surprise her with a simple gift and most of all, joy is having family and friends who loves you for who you are.
As always, save more, spend less and invest wisely - not too much, not too little=)
P.
While she was alive, I felt that she did live to the best of her abilities. She made plenty of good friends due to her good and loving nature, she traveled often and she will never let an opportunity to help anyone in need pass. What she left behind were good memories of her.
Throughout this time, waves of thoughts flowed through my mind:
1) We never know when the end will arrive - We often procrastinate what we want to do because we always believe that we can do it tomorrow, but what if tomorrow never comes and today is your last? If you knew the exact day and time you would die in advance, wold you live the way you are living now? Would you still plan to retire at 65 if you know you would die at 66? Hell no. The thing is that we do not know when it would happen. That said, we should not just let go and go mad. We should still save and plan for a long life, just in moderation. Balance the joy you desire between now and later. Die smiling with no regrets.
2) The people we leave behind are the ones who suffer the most - When she passed, I was there, together with a few close relatives. She did not suffer, was not in any kind of pain. She went peacefully( Thank God).
As for the rest of us, the emotional pain was excruciating. This was the first time I experienced such a close and loved relative pass away before my very eyes. But what I felt could not have been even a tiny fraction of what my Grandfather who has been her life partner, friend, confidant and soul mate felt. To me, he has always been a very strong man. Never complained, never cried and never troubled anyone for anything. When he broke down, you could really see how much love he had for her. - I realize that this is what I want when I eventually die, to have people who love me surrounding me when I pass on.
3) We really have to set up a will, no matter how taboo it sound. - In this time and age, writing a will is less frowned upon but still a taboo subject. It will solve problems of who gets what. When it comes to money, it's really hard to tell. Maybe that's why they say that money is the root to all evil. Causes family conflicts and complications.
4) Just a memory - In the end, all we become is just a memory to those around us. And when they go, even that memory will cease to exist. We would just be a blip in the everlasting stretch of time, the fire in the matchstick that burn for the briefest of times. If that is the case, I want my matchstick to burn as bright as it can, no matter how brief. Let us live our lives to the fullest, love to the fullest, enjoy to the fullest to the best of your ability.
Joy and happiness does not have to cost a lot of money and spending a lot of money does not necessarily bring joy. Take an hour or two to think of what truly brings you joy. To me, joy is having my wife give me a loving hug when I return from work. Joy is going out with best of friends for a simple meal and having a ball of a time. Joy is seeing the look on my wife's face when I surprise her with a simple gift and most of all, joy is having family and friends who loves you for who you are.
As always, save more, spend less and invest wisely - not too much, not too little=)
P.
Monday 8 July 2013
Financial Compromise = Long Lasting Happiness
Due to the weather being pretty warm and humid last Sunday, my wife and I decided to go for a swim.( To be brutally honest, all we did was soak.) On past occasions that these soakings occurred, we always got to talking about our future and also our financial plans and goals and this time was no different.
Sometimes, we would disagree and more often than not, irritation would get the better of us. Thankfully this time, this was not the case and I found this discussion to be extremely insightful. The main topic revolved around what we valued more and what we valued less. I found that we had very, I repeat very different views on money and material items. I realized that the reason why I prefer to save and invest is because I value money and freedom high above any material items I could purchase.
That being the case, why would any normal person want to trade something he/she loves more for something he/she loves less. I would not want to trade money to buy new clothes but I would trade money to invest to earn more money to give myself financial freedom.
My wife on the other hand stated that she would want to work till the normal retirement age of 65 as she wants to be able to continue buying anything she wants....which is practically everything. I felt that is was fair as she would be trading something she loves less(money) for something she loves more (bags, shoes, clothes..and the list goes on..)
In the end, soaked and wrinkled like raisins soaked in rum, we came to a compromise which would invlove 2 step.The 1st step was that we would, together, work towards reaching an investment portfolio value which would give us enough passive income to cover all our basic needs. This would include stuff that we could not live without like utility, mobile phone charges, food and stuff like that.
The 2nd step would proceed after we have achieved step one. It would be that whatever else we earned after step one would be used to do whatever we wanted, or more likely, whatever she wanted. The 1st priority will no longer be to save but to spend. Although this goes heavily against my nature, I felt that it was only right since she went along with me for part one.
That said, the important thing was to have no more debts and enough investment income to last till the end.
What kinds of compromise have you made with your spouse or even yourself? Are you happy with the compromise? We must always seek balance and try to provide happiness for our significant other. If one party is not happy in a relationship, it will be extremely hard for it to blossom.
As always, save more, spend less and invest wisely.
P.
Sometimes, we would disagree and more often than not, irritation would get the better of us. Thankfully this time, this was not the case and I found this discussion to be extremely insightful. The main topic revolved around what we valued more and what we valued less. I found that we had very, I repeat very different views on money and material items. I realized that the reason why I prefer to save and invest is because I value money and freedom high above any material items I could purchase.
That being the case, why would any normal person want to trade something he/she loves more for something he/she loves less. I would not want to trade money to buy new clothes but I would trade money to invest to earn more money to give myself financial freedom.
My wife on the other hand stated that she would want to work till the normal retirement age of 65 as she wants to be able to continue buying anything she wants....which is practically everything. I felt that is was fair as she would be trading something she loves less(money) for something she loves more (bags, shoes, clothes..and the list goes on..)
In the end, soaked and wrinkled like raisins soaked in rum, we came to a compromise which would invlove 2 step.The 1st step was that we would, together, work towards reaching an investment portfolio value which would give us enough passive income to cover all our basic needs. This would include stuff that we could not live without like utility, mobile phone charges, food and stuff like that.
The 2nd step would proceed after we have achieved step one. It would be that whatever else we earned after step one would be used to do whatever we wanted, or more likely, whatever she wanted. The 1st priority will no longer be to save but to spend. Although this goes heavily against my nature, I felt that it was only right since she went along with me for part one.
That said, the important thing was to have no more debts and enough investment income to last till the end.
What kinds of compromise have you made with your spouse or even yourself? Are you happy with the compromise? We must always seek balance and try to provide happiness for our significant other. If one party is not happy in a relationship, it will be extremely hard for it to blossom.
As always, save more, spend less and invest wisely.
P.
Thursday 4 July 2013
DUOS/U - Decreasing Units of Satisfaction/Usefulness
More is always better. The saying, while true to a certain extent does not apply to everything. The usefulness and the satisfaction an item brings diminishes as the quantity of that item increases.
Take for example your clothes. Say you are currently naked and you go to the store to buy a set of clothes. The set of clothes would be extremely useful because it keeps you covered and protects you from the cold. If you bought 2 set of clothes, it would still be mightily useful because it allows you to remained clothed while you are washing the 1st set of clothes. Now fast forward to the 100th set of clothing. How useful would that set be? I highly doubt it would bring about much more use or satisfaction then the 99th set.
This applies to everything else, even money. ( Yes, that's right, I said money..so shoot me.) Only we ourselves would know what is enough. Spending $1000 might allow you 100% satisfaction, however, spending $5,000 might not get you 500% satisfaction. Most likely, it will be along the range of 101% to 200%.
If we stop and make the decision to cut out spending on things that brings us little value, we would be able to save the money and use it for things which will bring us maximum satisfaction. Rather than spending on the new tablet with a larger screen size, why not spend it to see a loved one smile. A nice dinner or a short getaway perhaps.
What are the things you continue spending on or doing that are producing diminishing satisfaction and usefulness? Are you ready to take the next step towards life by cutting down on these? Please do share your experiences.
As always, save more, spend less and invest wisely.
P.
Take for example your clothes. Say you are currently naked and you go to the store to buy a set of clothes. The set of clothes would be extremely useful because it keeps you covered and protects you from the cold. If you bought 2 set of clothes, it would still be mightily useful because it allows you to remained clothed while you are washing the 1st set of clothes. Now fast forward to the 100th set of clothing. How useful would that set be? I highly doubt it would bring about much more use or satisfaction then the 99th set.
This applies to everything else, even money. ( Yes, that's right, I said money..so shoot me.) Only we ourselves would know what is enough. Spending $1000 might allow you 100% satisfaction, however, spending $5,000 might not get you 500% satisfaction. Most likely, it will be along the range of 101% to 200%.
If we stop and make the decision to cut out spending on things that brings us little value, we would be able to save the money and use it for things which will bring us maximum satisfaction. Rather than spending on the new tablet with a larger screen size, why not spend it to see a loved one smile. A nice dinner or a short getaway perhaps.
What are the things you continue spending on or doing that are producing diminishing satisfaction and usefulness? Are you ready to take the next step towards life by cutting down on these? Please do share your experiences.
As always, save more, spend less and invest wisely.
P.
Tuesday 2 July 2013
Click - Fastforward the week, or two
We all have those kind of weeks where time seems to crawl, things don't go right and you can't stop feeling nauseous. I often wonder why some days seem longer than the rest. And also why do bad things always seem to happen at once. These days, I often feel like fast forwarding time by a week or two.
The reason for all these negative feelings, in my opinion stems from having to work 5 days a week. My ideal workweek would consist of 3 workdays where every hour would be utilized to the max. Currently, there are pockets of idle time riddling through my work hours. As time goes by, I feel that its getting harder to bear. I wonder how you guys feel about your work week? Is 5 days of work too much or too little?
I have thought of a few ways to counter this negative feeling and change my life a little, some drastic and some minor changes. Not sure whether they will work but I might just give it a go in the near future.
1) Quit my job and work part-time/freelance.
2) Request to work lesser days for a lesser pay, make up for loss cash flow by working or doing something more enjoyable part time.
3) Take a break and go for a short getaway to recharge my batteries.
4) Take a long break - like 6 months - and backpack. (would love to do this but... so many reasons I cant afford it - later retirement date, new company, new house coming up, planning for kids.... sigh..)
5) Suck it up and take it like a man.
Have a few more ideas which are too ridiculous to be listed here lest I get flamed. Anyway, I would appreciate it a great deal if anyone could give me ideas to mitigate the negative feeling. I'm pretty sure many of you have felt the same way or are feeling the same way right now. I know we all have to go through this work life to earn enough for retirement, but some days... you know? Enough of my rants, thoughts please?
As always, save more, spend less and invest wisely.
P.
The reason for all these negative feelings, in my opinion stems from having to work 5 days a week. My ideal workweek would consist of 3 workdays where every hour would be utilized to the max. Currently, there are pockets of idle time riddling through my work hours. As time goes by, I feel that its getting harder to bear. I wonder how you guys feel about your work week? Is 5 days of work too much or too little?
I have thought of a few ways to counter this negative feeling and change my life a little, some drastic and some minor changes. Not sure whether they will work but I might just give it a go in the near future.
1) Quit my job and work part-time/freelance.
2) Request to work lesser days for a lesser pay, make up for loss cash flow by working or doing something more enjoyable part time.
3) Take a break and go for a short getaway to recharge my batteries.
4) Take a long break - like 6 months - and backpack. (would love to do this but... so many reasons I cant afford it - later retirement date, new company, new house coming up, planning for kids.... sigh..)
5) Suck it up and take it like a man.
Have a few more ideas which are too ridiculous to be listed here lest I get flamed. Anyway, I would appreciate it a great deal if anyone could give me ideas to mitigate the negative feeling. I'm pretty sure many of you have felt the same way or are feeling the same way right now. I know we all have to go through this work life to earn enough for retirement, but some days... you know? Enough of my rants, thoughts please?
As always, save more, spend less and invest wisely.
P.
Monday 1 July 2013
Job Loss - Utilisation of the Emergency Fund
Dear readers, I was just thinking to myself how I would handle loss of income should both my wife and I happen to be jobless at the same time. Not that it is happening now, but who is to say that it will never happen.
My wife and I are currently in the midst of starting a new company and we have decided that in order to increase the success rate, she would have to quit her current job. The reason as to why her and not me is because she knows the sector way better than myself. Therefore during these few months ( 4-6 ), we will be relying only on my income which means that our savings and investment amount will be cut down by a lot.
I was thinking, what if during this period of time, I was to lose my job as well. Would it be as disastrous as I think it would be? Upon careful consideration, I do feel that the emergency fund would suffice for these 6 month. We would have to cut down on eating out or going for holidays as my planned emergency funds was supposed to cover just our basic needs - plus or minus.
Everyone has different needs to be drawn from the emergency fund. Here are mine should I have to ever utilize it. - Fingers crossed that I will NEVER.
1) Car Expenses - About $300 ( should be a lot less since won't have to commute to work.)
2) Utility bills - About $250
3) Food - $700
4) Wife's Transport - $150
5) Mobile - $60
6) Cable - $50 ( would most likely cancel this, but would be a good replacement for going out which would cost more money)
7) Toiletries - $50
8) Condo Fees - $350
Total a month would be about $1500-$1900
6 Months would be about $9000 to $11400
I used to be pretty paranoid about having a huge emergency fund to last me a long time, somewhere along the line of 2 years worth. However, I have deemed it to be totally unnecessary and have cut it down to about $15k. The rest were put to better use in investments.
How much emergency funds do you think is enough? 3 months? 6 months or like the old me, 2 years? What are your basic needs and how much can you cut it down to? I'm sure I can cut mine down by quite a bit but I do not see the point as I do not feel that both my wife and I would be out of job at the same time for too long a period of time. An emergency fund is a definite, the question is how much.
As always, save more, spend less and invest wisely.
P.
My wife and I are currently in the midst of starting a new company and we have decided that in order to increase the success rate, she would have to quit her current job. The reason as to why her and not me is because she knows the sector way better than myself. Therefore during these few months ( 4-6 ), we will be relying only on my income which means that our savings and investment amount will be cut down by a lot.
I was thinking, what if during this period of time, I was to lose my job as well. Would it be as disastrous as I think it would be? Upon careful consideration, I do feel that the emergency fund would suffice for these 6 month. We would have to cut down on eating out or going for holidays as my planned emergency funds was supposed to cover just our basic needs - plus or minus.
Everyone has different needs to be drawn from the emergency fund. Here are mine should I have to ever utilize it. - Fingers crossed that I will NEVER.
1) Car Expenses - About $300 ( should be a lot less since won't have to commute to work.)
2) Utility bills - About $250
3) Food - $700
4) Wife's Transport - $150
5) Mobile - $60
6) Cable - $50 ( would most likely cancel this, but would be a good replacement for going out which would cost more money)
7) Toiletries - $50
8) Condo Fees - $350
Total a month would be about $1500-$1900
6 Months would be about $9000 to $11400
I used to be pretty paranoid about having a huge emergency fund to last me a long time, somewhere along the line of 2 years worth. However, I have deemed it to be totally unnecessary and have cut it down to about $15k. The rest were put to better use in investments.
How much emergency funds do you think is enough? 3 months? 6 months or like the old me, 2 years? What are your basic needs and how much can you cut it down to? I'm sure I can cut mine down by quite a bit but I do not see the point as I do not feel that both my wife and I would be out of job at the same time for too long a period of time. An emergency fund is a definite, the question is how much.
As always, save more, spend less and invest wisely.
P.
Friday 28 June 2013
No one Likes the Downside.
Dear readers, we have often read or heard about the positives of having an early retirement. Some might feel that it's pretty easy to achieve, but is it really? The answer is no, unless you have a huge inheritance, strike the lottery or invented a cure for cancer.
The road to an early retirement is filled with sacrifice, people putting you down and loads of complaining and grumbling. Here is a list of downsides that we might experience depending on our individual situations.
The Want That Now Syndrome - As humans, we are often tempted by advertisements of new and interesting "toys". Companies spend millions to create and cultivate this 'want that now' syndrome in all of us. However, in order to retire early and still maintain our current level of lifestyle, we have to learn to cut off this habit. We have to sacrifice what we might want but not need now in order to have an early retirement with all our needs satisfied. You might not have what your friends are having now, but 10 - 20 years down the road, they will not have what you will have then. Freedom.
Where's Dad/Mom? - This might not be applicable to most people, only to those who are really hardcore about early retirement. I would not say whether this sacrifice of current family time is right or wrong. It's a matter of your personal preference and priority. However, I do have something to advice. If you sacrifice too much family time now, you might not have the chance in the future to spend time with them. Second or even third jobs will bring in that extra money and cut that time to retirement down. Worth it or not, you have to decide.
When I grow up, I want to be a... - It extremely rare to have everything in life, God is fair. You win some you lose some. More often that not, we have to sacrifice what we always wanted to do or be in order to achieve a goal, which in this case is early retirement. To achieve early retirement, we first have to get at least a moderate paying job. Being a writer or an artist probably won't get you there - unless you are some kind of a genius in that field. We all have to be realistic. We might have to get a job we do not like so much but pays well in order to have enough money to invest for an early retirement.
Vice President XXX - A high post would be something that we have to admit will not be attained if we are to choose early retirement. We would be retired before we are able to reach that level. There is just not enough time. One of the traits to reach early retirement is to be contented. Knowing when is enough. Well, technically you could still hold a high position in a company and still be retired. It all depends on what your definition is. It could be - Not working for the rest of your life OR Having the CHOICE of not having to work when you do not want to. I prefer the latter as working kinda keeps your mind active. Working whilst retired takes out all the stress and pressure of having not enough to survive. ( I hope you understand what I'm trying to say)
Why's the Grape so Sour?? - I think that I have talked about this point in a previous post. People are always jealous of what they cannot have or achieve. They will try to talk you out of it, say nasty things behind your back or simply ignore you. Guess what, we should not care. It's our life and we own it. We should live or die by our very own rules and choices. If you have made the choice, stay committed no matter what. No one every achieves anything by backing out of everything.
There you have it, some of the down sides en route to an early retirement. Hope you get pass all these downners and emerge victorious. All these are temporary. Freedom( If well planned) is forever.
As Always, save more, spend less and Invest wisely.
P.
The road to an early retirement is filled with sacrifice, people putting you down and loads of complaining and grumbling. Here is a list of downsides that we might experience depending on our individual situations.
The Want That Now Syndrome - As humans, we are often tempted by advertisements of new and interesting "toys". Companies spend millions to create and cultivate this 'want that now' syndrome in all of us. However, in order to retire early and still maintain our current level of lifestyle, we have to learn to cut off this habit. We have to sacrifice what we might want but not need now in order to have an early retirement with all our needs satisfied. You might not have what your friends are having now, but 10 - 20 years down the road, they will not have what you will have then. Freedom.
Where's Dad/Mom? - This might not be applicable to most people, only to those who are really hardcore about early retirement. I would not say whether this sacrifice of current family time is right or wrong. It's a matter of your personal preference and priority. However, I do have something to advice. If you sacrifice too much family time now, you might not have the chance in the future to spend time with them. Second or even third jobs will bring in that extra money and cut that time to retirement down. Worth it or not, you have to decide.
When I grow up, I want to be a... - It extremely rare to have everything in life, God is fair. You win some you lose some. More often that not, we have to sacrifice what we always wanted to do or be in order to achieve a goal, which in this case is early retirement. To achieve early retirement, we first have to get at least a moderate paying job. Being a writer or an artist probably won't get you there - unless you are some kind of a genius in that field. We all have to be realistic. We might have to get a job we do not like so much but pays well in order to have enough money to invest for an early retirement.
Vice President XXX - A high post would be something that we have to admit will not be attained if we are to choose early retirement. We would be retired before we are able to reach that level. There is just not enough time. One of the traits to reach early retirement is to be contented. Knowing when is enough. Well, technically you could still hold a high position in a company and still be retired. It all depends on what your definition is. It could be - Not working for the rest of your life OR Having the CHOICE of not having to work when you do not want to. I prefer the latter as working kinda keeps your mind active. Working whilst retired takes out all the stress and pressure of having not enough to survive. ( I hope you understand what I'm trying to say)
Why's the Grape so Sour?? - I think that I have talked about this point in a previous post. People are always jealous of what they cannot have or achieve. They will try to talk you out of it, say nasty things behind your back or simply ignore you. Guess what, we should not care. It's our life and we own it. We should live or die by our very own rules and choices. If you have made the choice, stay committed no matter what. No one every achieves anything by backing out of everything.
There you have it, some of the down sides en route to an early retirement. Hope you get pass all these downners and emerge victorious. All these are temporary. Freedom( If well planned) is forever.
As Always, save more, spend less and Invest wisely.
P.
Wednesday 19 June 2013
Stages to Personal Financial Awakening
Dear readers, first of all, I would like to apologize for the massive lack of postings. The reason being that I am starting up a new company of my own and have been so damn busy settling administrative issues. I will still try to post as and when I can so don't write me off just yet. =)
Anyway, today I would like to talk about the stages we would all eventually go through before our financial eyes open. So without further ado, here they are:
Stage 1 - What?
This is the stage where we know close to nuts about personal finance, we save minimally or not at all, we don't invest, we spend a hell lot of things we do not need and we might even be in plenty of consumer debt.
We are basically clueless and lost, living life a day at a time or pay check to pay check.
Stage 2 - Oh Snap!
One day, you realize that living life this way is not for the long term. This is the road to financial Armageddon. Thoughts, questions and ideas start forming in your head. How am I going to reduce my spending? How am I going to save more? Will I have enough when I eventually stop working? Is my CPF enough to sustain me?
The credit card debt is taking away so much of my salary! This is the stage where you have awakened, there is now growth is your financial body. You start to save more, spend less and study and learn more about investing. You pay down your debts with the amount you would have otherwise spent.
Stage 3 - BAM ( Kenna Stuck )
Some time into you awakening, you might run into a pit of tar. Stuck and not moving anywhere. Everything is taking too long. You start questioning whether the sacrifices you are making are worth it. You start missing spending money without a thought on your budget. You start missing going out with your friends all the time. What happens next is highly dependent on what you do at this point. Do you have the will power to struggle and break free of the tar pit, or will you give up and be stuck there forever?
Stage 4 - 2nd Awakening and realization
This is where you will end up should you break free of the tar pit. You will realize that in everything, there must be balance. Putting too much money to either savings or spending is not healthy. We should not be sacrificing too much currently to enjoy in the future. Neither should we be spending too much now and suffer in the future. Finding that balance is not easy and we must work at it constantly. We should be frugal, no cheap. Spend on things that have value and not things that serve no purpose in enriching your life of the lives of your loved ones.
Stage 5 - Stability
You have found your balance point. You are happy and contented with what you have achieved. Additional money could now be used to buy yourself additional time. Be it retiring early or having less days to work a week. Even at this stage, we have to constantly work at improving our personal finance. Balancing work, play and family.
Remember that asking "are we there yet?" a million times will not get you there any faster. We have to work hard and plan wisely in order to do that.
As always, save more, spend less and invest wisely.
P.
Anyway, today I would like to talk about the stages we would all eventually go through before our financial eyes open. So without further ado, here they are:
Stage 1 - What?
This is the stage where we know close to nuts about personal finance, we save minimally or not at all, we don't invest, we spend a hell lot of things we do not need and we might even be in plenty of consumer debt.
We are basically clueless and lost, living life a day at a time or pay check to pay check.
Stage 2 - Oh Snap!
One day, you realize that living life this way is not for the long term. This is the road to financial Armageddon. Thoughts, questions and ideas start forming in your head. How am I going to reduce my spending? How am I going to save more? Will I have enough when I eventually stop working? Is my CPF enough to sustain me?
The credit card debt is taking away so much of my salary! This is the stage where you have awakened, there is now growth is your financial body. You start to save more, spend less and study and learn more about investing. You pay down your debts with the amount you would have otherwise spent.
Stage 3 - BAM ( Kenna Stuck )
Some time into you awakening, you might run into a pit of tar. Stuck and not moving anywhere. Everything is taking too long. You start questioning whether the sacrifices you are making are worth it. You start missing spending money without a thought on your budget. You start missing going out with your friends all the time. What happens next is highly dependent on what you do at this point. Do you have the will power to struggle and break free of the tar pit, or will you give up and be stuck there forever?
Stage 4 - 2nd Awakening and realization
This is where you will end up should you break free of the tar pit. You will realize that in everything, there must be balance. Putting too much money to either savings or spending is not healthy. We should not be sacrificing too much currently to enjoy in the future. Neither should we be spending too much now and suffer in the future. Finding that balance is not easy and we must work at it constantly. We should be frugal, no cheap. Spend on things that have value and not things that serve no purpose in enriching your life of the lives of your loved ones.
Stage 5 - Stability
You have found your balance point. You are happy and contented with what you have achieved. Additional money could now be used to buy yourself additional time. Be it retiring early or having less days to work a week. Even at this stage, we have to constantly work at improving our personal finance. Balancing work, play and family.
Remember that asking "are we there yet?" a million times will not get you there any faster. We have to work hard and plan wisely in order to do that.
As always, save more, spend less and invest wisely.
P.
Tuesday 28 May 2013
Want Something? Do Something!
We are all creatures of comfort, we love to dream and talk about having this and achieving that. We all know that talk is easy, talk is cheap but we stick to it without any form of action anyway. How many times have we seen someone else selling an idea we had years ago but did not put in the effort to get off our butts to kick start something?
Why is it that we do not always have enough drive to get something started? Majority of us would cite reasons such as:
How about if you just found out that your current employment company was going to fold soon? Would you be pushed to take the leap and start your own because you have nothing to lose? ( Just an example )
What I'm trying to say is that, if you do not have that drive to get something done, you have 2 choices. The first is to find a partner who is action oriented. Someone who will get the ball rolling and push you along as well. The other is to develop a mindset that to start that something is what you really NEED and have no choice but to push yourself off the edge.
Whatever the method and whatever the reason, the most important part of anything is the 1st step. Without it, no one is going to get anywhere. It relates to everything from your new start up, your savings plan or even getting the leaky faucet fixed.
Get something that you have been procrastinating on done today, take the 1st step, no matter how small and get the avalanche flowing.
As always, save more, spend less and invest wisely.
P.
Why is it that we do not always have enough drive to get something started? Majority of us would cite reasons such as:
- It might not even work or sell.
- What if I fail?
- I do not know how to do this?
- How do i even start?
- What if no one supports my idea and people start laughing at me?
How about if you just found out that your current employment company was going to fold soon? Would you be pushed to take the leap and start your own because you have nothing to lose? ( Just an example )
What I'm trying to say is that, if you do not have that drive to get something done, you have 2 choices. The first is to find a partner who is action oriented. Someone who will get the ball rolling and push you along as well. The other is to develop a mindset that to start that something is what you really NEED and have no choice but to push yourself off the edge.
Whatever the method and whatever the reason, the most important part of anything is the 1st step. Without it, no one is going to get anywhere. It relates to everything from your new start up, your savings plan or even getting the leaky faucet fixed.
Get something that you have been procrastinating on done today, take the 1st step, no matter how small and get the avalanche flowing.
As always, save more, spend less and invest wisely.
P.
Monday 27 May 2013
The Tiny Ship Sinking Holes
More often than not, as we look back at the past months expenses, we are able to see what the major portions of our money is spent on. All those large purchases are easy to spot however, it's the little tiny ones that are slowly doing the damage. It's the many tiny little cuts on your financial body that hurts the most.
These tiny expenses are those that we deem too tiny or insignificant to bother about. But over the long run, can accumulate to quite a substantial sum. Everyone has these cuts I'm sure, even the thriftiest of us. Examples of these tiny leaks are as follows:
Patch the tiny leaks and holes in your financial ships as soon as you can, lest it sinks you before you are able to reach your port of freedom.
As always, save more, spend less and invest wisely.
These tiny expenses are those that we deem too tiny or insignificant to bother about. But over the long run, can accumulate to quite a substantial sum. Everyone has these cuts I'm sure, even the thriftiest of us. Examples of these tiny leaks are as follows:
- Forgetting to turn off electrical appliances when you are not using them.
- Food wastage.
- Credit card annual fees.
- Phone or cable contracts that are above what you need.
- Too much snacks (Harmful to both body and fiance)
- Leaky water taps, pipes or toilet bowls.
- Taking long showers too often.
Patch the tiny leaks and holes in your financial ships as soon as you can, lest it sinks you before you are able to reach your port of freedom.
As always, save more, spend less and invest wisely.
Thursday 23 May 2013
Know When To Alight
Dear Readers,
I'm pretty sure that like me, most of you have a set retirement date and amount of money you want to have at retirement in mind. However, can you honestly say that when you eventually reach that much awaited point in your life, you could just stop what you have been doing for say 20 years and start a 'new' life?
I wonder what I would feel at that time as a person who likes to have a large margin of safety. I guess I would wonder to myself as to whether I have sufficient funds to allow my family to live comfortably. I would also ask myself what I would do with so much of my time. I do have a list of things I would love to do now, but would it be the same 15 years down the road?
Anyway, what I wanted to say in this post is that, besides having enough money, there are other things to consider before alighting at your retirement stop.
As always, save more, spend less and invest wisely.
I'm pretty sure that like me, most of you have a set retirement date and amount of money you want to have at retirement in mind. However, can you honestly say that when you eventually reach that much awaited point in your life, you could just stop what you have been doing for say 20 years and start a 'new' life?
I wonder what I would feel at that time as a person who likes to have a large margin of safety. I guess I would wonder to myself as to whether I have sufficient funds to allow my family to live comfortably. I would also ask myself what I would do with so much of my time. I do have a list of things I would love to do now, but would it be the same 15 years down the road?
Anyway, what I wanted to say in this post is that, besides having enough money, there are other things to consider before alighting at your retirement stop.
- Friends - I'm talking about close friends that have been with you through the years. You having an early retirement does not mean that they too are having one. Will you have to look for new friends to participate in all the activities you planned for during your extra time in retirement?
- Health - Are you healthy? It affects everything, from the amount of money you will have to spend to the changes in your mood. Make sure that you are well covered insurance wise and also please eat healthily and exercise more so as to keep a healthy body. ( Note to self : Please practice what you preach)
- Family - Are your immediate family members supportive of your decision? Is your spouse going to continue working or is he/she going to retire early as well? I feel that everyone in your immediate family should be comfortable with the situation if you are to have a happy and early retirement.
- Career - Are you ready to leave your career behind? Something that you have been working hard for through the past decades of your life? If you are not, you could consider semi retirement first before the transition to a full retirement. Anyway, I feel that we should not let our careers define our lives. Straying a little bit from my point here but I was wondering, at the moment, if someone asked you what you do, without a thought, you would say Engineer or accountant or doctor. What happens when someone asks the same question after you have retired at a young age? Er, I do....things I like? I do..Life? Anyway, just a thought, no further thinking required.
- Hobbies - What are you going to do during all that free time? It's not as easy to fill as you think. I once took a 1 week break and realized that it's extremely boring not to have a goal in mind. What's worse was that I was the only one I knew that was not working that week so in a way, I was alone. Perhaps a preview of early retirement if my wife continues to work. - I'll have to reconsider a full early retirement until my wife retires as well. Actually these days, I'm more inclined towards a semi retirement as my wife and I should be starting a business of our own real soon. Fingers crossed it works out.
As always, save more, spend less and invest wisely.
Wednesday 22 May 2013
Emmotional Spending - A.K.A Retail Therapy
How often have you succumbed to this? What the hell is retail therapy? I feel that it is just another term coined by marketers and advertisers to make us feel as if we can reduce stress and be happier just by spending more money.
I know that most of us work 8 to 10 hours a day, 5 to 6 days a week and all the workload can cause a lot of stress and unhappy feelings. After a hard week at work, we all feel as if we need to reward ourselves. And what better way to do that than to spend, spend and spend. But hold on. Is that you thinking or is that what advertisers and marketers want you to think? We get fed with a whole lot of garbage advertising day in day out. They know best how to lure you in. Words such as pamper yourself, you deserve this, only the best for you etc etc...
Even the best of us are guilty of having done this at least once in their lives. I'm not saying that this is necessarily bad, but please don't overkill and go on a therapy rampage. All you will get is buyers remorse after. It's the guilt after the shopping blood lust wears off. So why substitute one bad feeling for another?
How does your emotions affect the way you spend? Do you spend more or less when you experience certain emotions? Everyone has a different emotional spending habit. As for myself, it goes something like this:
So, how does your spending habits change in light of different moods and situation? Please share so we can give and receive advice on how to better manage excessive spending. We are all here to help each other out.
As always, save more, spend less and invest wisely.
P.
I know that most of us work 8 to 10 hours a day, 5 to 6 days a week and all the workload can cause a lot of stress and unhappy feelings. After a hard week at work, we all feel as if we need to reward ourselves. And what better way to do that than to spend, spend and spend. But hold on. Is that you thinking or is that what advertisers and marketers want you to think? We get fed with a whole lot of garbage advertising day in day out. They know best how to lure you in. Words such as pamper yourself, you deserve this, only the best for you etc etc...
Even the best of us are guilty of having done this at least once in their lives. I'm not saying that this is necessarily bad, but please don't overkill and go on a therapy rampage. All you will get is buyers remorse after. It's the guilt after the shopping blood lust wears off. So why substitute one bad feeling for another?
How does your emotions affect the way you spend? Do you spend more or less when you experience certain emotions? Everyone has a different emotional spending habit. As for myself, it goes something like this:
- Sad - Don't Feel like spending a single cent, I kinda retreat into myself and stone.
- Happy - Feel like spending on something nice for someone to let them share my happiness.
- Stressed - Spend on drinks and food.
So, how does your spending habits change in light of different moods and situation? Please share so we can give and receive advice on how to better manage excessive spending. We are all here to help each other out.
As always, save more, spend less and invest wisely.
P.
Tuesday 21 May 2013
Difficult to Retire Early in Singapore - If you are A dude.
During the week, I happened upon a forum post on an Early Retirement Extreme site. The topic starter was a Singaporean man who is searching for ways to achieve early retirement in Singapore but has yet to do so. What caught my attention was a reply from someone is Australia who has stayed in Singapore for a period of time.
He said some things which caused me to ponder upon some of my decisions, although i will try not to be wavered in my decision - My life my rules..cant rem which advert was that from. Anyway, he said that its difficult for the male gender to retire EXTREMELY early in Singapore due to several reason. Here they are(taken directly from forum):
So far, My plans only include my immediate family consisting of me, my wife and my future children. This once proves that plans are ever changing and we as humans must adapt. I know have to re-strategize to include all these costs which I have missed out. We learn everyday do we not?
Is there anything you have missed out on?
As always, save more, spend less and invest wisely.
P.
He said some things which caused me to ponder upon some of my decisions, although i will try not to be wavered in my decision - My life my rules..cant rem which advert was that from. Anyway, he said that its difficult for the male gender to retire EXTREMELY early in Singapore due to several reason. Here they are(taken directly from forum):
- Patriarchal society. If you are a man - not working is just not the done thing.
- Very consumer driven. Singapore is wealthy and people live well, dress well and drive nice cars. There is also a distinct lake of 'Bohemia' and weirdness which makes being different frowned upon. This is a country that has laws for everything. You cannot chew gum and if you do not flush the toilet in a public place and caught you are fined.
- The other issue is this idea / cultural thing that one must look after the sons parents in old age. Lots of pressure on the sons to keep working and prosper.
So far, My plans only include my immediate family consisting of me, my wife and my future children. This once proves that plans are ever changing and we as humans must adapt. I know have to re-strategize to include all these costs which I have missed out. We learn everyday do we not?
Is there anything you have missed out on?
As always, save more, spend less and invest wisely.
P.
Monday 20 May 2013
Just.One.More.Dollar
Dear readers, somewhere along the way, roughly in the past 2 years, I have come to realize something. Sometimes, the extra dollar saved is not worth the sacrifice you have to make. Yes, I know that every dollar counts but there must also be a limit to how much we can compromise our lifestyle and the lifestyle of those around you.
After achieving your set target for the month, saving those extra dollars will not bring forward the earlier retirement date by much. I would say at most a year or two. Now let me ask you this, would it be worth it to sacrifice for the next 20 years or so just so that you can retire that one or two years earlier? I say no. I do not want to compromise my current lifestyle too much for that. You must know when enough is enough.
What I think we should do is to create a smooth path, one that we enjoy all the way till the end. In moderation of course, and not one where we have to suffer first and enjoy later. In everything we do, we have to think about the people around us, our spouse, our children or our parents. It does not mean that if you do not mind the suffering, they won't mind it as well. They might be appearing to do so just because they do not wish to let you feel disappointed. Spare a thought for them, and if you can afford it, spend those extra dollars to make their day brighter and happier.
I guess this will be a short post. Got so many things to do, so little time.
Anyway, I hope we will not be so overly obsessed with savings that we forget the reason to which we are saving or neglect our loved ones.
As always, save more, spend less and invest wisely.
P.
After achieving your set target for the month, saving those extra dollars will not bring forward the earlier retirement date by much. I would say at most a year or two. Now let me ask you this, would it be worth it to sacrifice for the next 20 years or so just so that you can retire that one or two years earlier? I say no. I do not want to compromise my current lifestyle too much for that. You must know when enough is enough.
What I think we should do is to create a smooth path, one that we enjoy all the way till the end. In moderation of course, and not one where we have to suffer first and enjoy later. In everything we do, we have to think about the people around us, our spouse, our children or our parents. It does not mean that if you do not mind the suffering, they won't mind it as well. They might be appearing to do so just because they do not wish to let you feel disappointed. Spare a thought for them, and if you can afford it, spend those extra dollars to make their day brighter and happier.
I guess this will be a short post. Got so many things to do, so little time.
Anyway, I hope we will not be so overly obsessed with savings that we forget the reason to which we are saving or neglect our loved ones.
As always, save more, spend less and invest wisely.
P.
Friday 17 May 2013
My Portfolio Allocation May
Here is my portfolio allocation:
Well, that's it for my portfolio allocation! What's yours like? Please do share so that we can learn more from each other.
As always, Save more, Spend Less and Invest wisely
P.
- Cash...................39%
- Stocks................43%
- Bonds.................8%
- Gold...................3%
- Unit Trust............7%
Well, that's it for my portfolio allocation! What's yours like? Please do share so that we can learn more from each other.
As always, Save more, Spend Less and Invest wisely
P.
My Fears Related to Early Retirement
I have often wondered how would people around me feel or perceive me should I tell them that I will be retired before the age of 40. Most would just assume that I either struck the lottery, inherited a massive amount of wealth or that I command a massive paycheck. All these are not true. Early retirement, for me is gained by saving hard, cutting the amount of money I spend and also taking the effort and time to find the correct stocks and bonds to purchase.
I also have this fear that should I retire early, especially in Singapore, many would see me and those like me as lazy. Questions would start flooding in, from both relatives and friends. "Why don't you continue working to earn more money?". " Why are you doing non constructive stuff". "Why are you no longer a productive member of the society?" .... So many whys. Well, @!$!@4 you that's why. Just kidding.
I seek early retirement because I do not want to work the best part of my life away. There is only a finite amount of things you need to purchase in life. I want to live, do the things I want to do while I am able. I want to be able to travel without fear of work piling up while I'm away. I want to be able to have a 2 hour lunch followed by a 1 hour stroll and not a 1 hour lunch. I want to be able to take the lessons and courses I have been wanting to take but have no time for. French, bike, diving and powerboat. All these things and many more. You get my drift.
Working will usually drain you of your energy, and at the end of the day, all you want to do is laze on the couch and watch some TV. Is that how you want to live you life till you are 65? I damn well do not.
Therefore, I have come to a conclusion. I will only care what the people directly affected by my early retirement think - A.K.A. My wife and future children. I feel that as long as we are happy, and my wife and I are able to provide for all our and future children's needs, other people can say anything they want and not mean a thing to me.
You know yourself best. If you have set an intended course, do not let anyone sway you from it. Many will sway you out of jealousy. Do not be brought down by their petty remarks. As long as you and your family are happy and contented, nothing else really matters.
Phwoar..really needed to let that out because it has been bugging me for quite some time. Sorry for the rant.
Anyway, as always, Save more, Spend Less and Invest Wisely.
P.
I also have this fear that should I retire early, especially in Singapore, many would see me and those like me as lazy. Questions would start flooding in, from both relatives and friends. "Why don't you continue working to earn more money?". " Why are you doing non constructive stuff". "Why are you no longer a productive member of the society?" .... So many whys. Well, @!$!@4 you that's why. Just kidding.
I seek early retirement because I do not want to work the best part of my life away. There is only a finite amount of things you need to purchase in life. I want to live, do the things I want to do while I am able. I want to be able to travel without fear of work piling up while I'm away. I want to be able to have a 2 hour lunch followed by a 1 hour stroll and not a 1 hour lunch. I want to be able to take the lessons and courses I have been wanting to take but have no time for. French, bike, diving and powerboat. All these things and many more. You get my drift.
Working will usually drain you of your energy, and at the end of the day, all you want to do is laze on the couch and watch some TV. Is that how you want to live you life till you are 65? I damn well do not.
Therefore, I have come to a conclusion. I will only care what the people directly affected by my early retirement think - A.K.A. My wife and future children. I feel that as long as we are happy, and my wife and I are able to provide for all our and future children's needs, other people can say anything they want and not mean a thing to me.
You know yourself best. If you have set an intended course, do not let anyone sway you from it. Many will sway you out of jealousy. Do not be brought down by their petty remarks. As long as you and your family are happy and contented, nothing else really matters.
Phwoar..really needed to let that out because it has been bugging me for quite some time. Sorry for the rant.
Anyway, as always, Save more, Spend Less and Invest Wisely.
P.
Subscribe to:
Posts (Atom)