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:

• 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?

From what I see, it boils down to 2 main issues, fear and laziness. Sometimes, we just need to want it bad enough or be pushed to the edge to give ourselves no choice but to bite the bullet and jump in. Would you want to put in the effort and take the risk of starting your own company if you are currently having a secure job with a comfortable salary?

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.

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:

• 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.

These are some of the examples that I have thought of. I have to admit that i am guilty of some of them, especially showers since its so darn hot and humid here in Singapore. These are habits that we have formed over the years which are bad. We have to try our best to either reduce these habits or cut them off completely.

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.

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.

• 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.

So there you have it, some pointers to consider in order to make sure that you are ready when the time comes. I wish you all the best whether you are just about to start your journey or are towards the end of it.

As always, save more, spend less and invest wisely.

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:

• 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.

Before you ask, no, I do not only have those 3 emotions or feelings but those are the most general ones. Once again, don't let your emotions take a toll on your budgeting. Counter this by setting up a bad mood fund - Read more about it here. It is basically a fund set up in a separate saving account to spend without guilt when you are in a mood. The emotion attached is called bad because I assume that most people spend more when they are in a bad mood, hence the need of "therapy".

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.

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):

• 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.

 How do you feel about the points that he has brought up? I feel that they are extremely valid. I do not really care much about the first and second point as I do not really care what outsiders judge me and I do not really covet what other people have. However, I realized that I have neglected to account for point 3. I have accounted for monthly allowance for when they stop working but have not done so for the later stages of their lives. Costs such as their hospitalization, their insurance or even their holidays.

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.

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.

My Portfolio Allocation May

Here is my portfolio allocation:

• Cash...................39%
• Stocks................43%
• Bonds.................8%
• Gold...................3%
• Unit Trust............7%

Over the past month, I have sold off quite a bit of SMRT shares which is one of the bigger portions of my portfolio. I did it to cut loss and to be able to buy is back at a lower price. Which it did, about 10 cents lower at $1.4. During this time, I also bought into VARD Holdings, formerly known as STX OSV. Won't be going into details as to why I bought in this post, maybe a later one as this post is basically just allocation of assets. Anyway, Macquarie(MIIF) also divested TBC and I have opted not to take cash. Took shares instead so that doesn't change my percentage in share. Bonds, gold and unit trust amounts remain the same.

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.

Set Mini Crossover Points to Spur you towards the Ultimate Crossover Point

The ultimate crossover point is when your passive incomes are finally more than your total expenses. This is when you know you have reach financial freedom. At this point, you will no longer be bound by the need to have a job. You will have this very special reward called choice. Choice to work or just to stay at home the entire day. Choice to travel for an entire year and choice to never work again.

The only problem is that the journey to this crossover point is long and tedious. Different people set different points as spending and saving needs and powers are different. For example, if you spend very little and save a lot, you will reach your crossover point very quickly. And if you spend a lot and save very little, you will reach your crossover point very late in life or never at all. No pain no gain.

However, for the average folks like me who save a decent amount and are not mad spenders, the journey would still be quite a long and arduous one. To keep ourselves motivated and to prevent the thought of giving up, we should set mini crossover points. These are like mini goals to reach, one step at a time.

Here are some mini crossover points to help you generate more ideas.

1. Positive Net Worth - In Singapore, I assume that when we get a house, we will fall into negative net worth. Getting back to positive net worth will require work  but will definitely be a welcomed crossover point.
2. No Debts - Another point to cross would be to have no debts. Student debts, credit card debts or renovation loans.
3. Passive Income to cover certain Expenses - Break your expenses up into different categories. For example, telephone bills, water bills, electricity bills or groceries and such. Every time your passive income cover one of the expenses totally, you have reach a mini cross over point. It feels good to know that at that point, you will never need to worry about paying for that expense again.

Now that you have gotten an idea of mini crossovers, you can come up with a list of your own. I hope this helps motivate and spur you on.

As always, save more, spend less and invest wisely.
P.

The Rat Traps to Savings

Dear readers, to save money is one of the most important, if not the most important step to financial independence and retirement.Without this step, nothing will be achieved. No emergency funds, no investments, no safety net. So why is it that so many out there who are able to save still not saving or saving way too little?
I guess the main reason is that they have hit one of the several Rat Traps. Rat Traps are traps that stop you from getting out of the Rat Race. It traps you and keeps you there until you die. Sad but true.

For today's post, I'm going to talk more about the Rat Traps that keep you from saving money. I hope that you are not currently caught in them and if you are, I sincerely hope that you will realize it after reading this post and get out of it and eventually the never ending Rat Race.

So without further ado, here they are.

1. Ready, get set.....NOTHING 
• The hardest part to doing anything new is to get started. There are so many thoughts running through our heads that keep us from taking that first step forward. The 2 largest killing factors are fear and procrastination. For savings, it's mainly procrastination. We always have something we need the money for first, so wait. Too lazy to open a savings account, so wait. Remember, every single day you procrastinate will delay your target date of retirement. Push yourself out of your comfort zone, tell someone or everyone that you are going to start a savings plan and do it. This will push you to not procrastinate and friends and family will from time to time ask you how your plans are going, thus reminding you to keep on doing it.
2. Inconsistent Savings.
• If you are not saving on a regular basis, you will not be able to form the habit of saving. Your conviction to save will be too rubbery. You might fall into the trap of eventually telling yourself, why save and stop saving altogether. Combat this trap by setting up an automated savings account. Most banks have these and the best part is that you wont even have to think about it.
3. Eenie meenie minee mo!
• This trap is, to me, the deadliest of all traps. Conflicting goals. It makes you weigh and choose which situation is the more important one. Conflicting goals are when  you have to choose between saving for that period, or using it to go for that year end holiday you and your family have been talking about all year. If you save, you will be on target to retirement. If you spend on the holiday, your family would be happy. So hard to decide...Set your priorities right, and sometimes, its okay to compromise. The best thing you can do here is to, if you know that you are going to spend on a year end holiday, start setting money aside throughout the year for it. This way, you will not eat into your retirement portions of your savings and your family will be able to have a nice holiday.
4. I'm going nowhere..forget it.
• This is where most people get caught, they have taken the 1st step, and the 2nd and maybe even reached the 10th step. But at a certain point, you will definitely start to doubt and wonder whether all of this is worth the effort at all. Your savings and investments seem to be going nowhere. The balance doesn't even look like its moving. But please, you have pulled yourself this far. Nothing good is ever free or easy. There is a saying that the 1st $100,000 or the 1st $1,000,000 is the hardest and as you go on, it gets easier and easier. Just put one foot in front of the other and keep on going. Set mini goals in between this large goal to keep yourself motivated. Set yearly or monthly goals to save a certain amount, invest a certain amount or pay of a certain amount of debt. This helps, trust me.

Having read about the traps, can you relate to any of them? Are you currently in one? Or did you manage to get out of all these traps? I sincerely hope that we will all escape these traps as soon as possible and get on with out journey towards an early retirement. To those that are still there, don't give up. Try again and never be afraid to ask for help. We come and go from this world alone, but for the span of time that we are in it, we are not.

As always, save more, spend less and invest wisely.
P.

The Savings Gene

These few days, I have been wondering to myself as to whether the habit of savings is something we train to do or is it something deeper. I guess your personal habits of savings can be partially shaped by your family background and upbringing. I stated partially because no matter whether your family is rich or poor, whether your parents are spenders or savers, there are always rebels in the family. ( Are you getting what I'm saying? I think the caffeine from my morning coffee is affecting my thought process..getting the buzz from the overly strong coffee...maybe I should cut down.)

Anyway, what I personally think is that the habit or need to save is ingrained in our genes, in our DNA. There are those that will never save no matter how deeply in debt they are, and there are those who will still save a high percentage of their income even if they are mega rich. I used to tell my friends who lived paychecks to paychecks to try to save a little, only to be dissed off and told that they know what they are doing...I have since tried subtler ways - See this post You can use some of the methods stated there if you have friends like that and want to help them save at least something.

How much are you saving every month? I did a calculation on my monthly accounts and was pretty shocked that my wife and I are saving 48.5746% of our take home income. ( Decimal points to add extra effect.....also something to confess.. as a spreadsheet junkie, I did not have to look or calculate to know..i look at it everyday..a habit I want to change..to something like once in 2 days...ok ok... once a month. I'm serious. Maybe we should have something like AA meetings. "Hi, my name is P and I'm a spreadsheedoholic")

Sorry about the ranting, anyway, everyone has different lifestyle and beliefs, but we must all try to save, no matter how much or little..better lean more towards the much. Try increasing your percentage of savings whenever you are able to. You can do this either by cutting your expenses or increasing your income. Always remember that what you can save = your income - your expense.

I hope that you uncover your "powers" of savings which is embedded in your DNA soon. It's never too late until its too late..( Don't Judge). What should a healthy percentage of savings? Like everything else in life, too much or too little of anything can be unhealthy...percentage of savings included.

As always save more, spend less and invest wisely.
P.

Don't Buy Unless It's Broken

Dear readers, you must be wondering what the title is about? What's this joker talking about? Who wants to buy broken stuff?

What I meant to say is, when was the last time you bought a new item only because the current item you are using is totally wrecked, broken and unusable? If you are like most of us, its most probable that you do not remember..unless your laptop just conked out. As hardcore consumers, we tend to use items only till about 30% to 50% of its total usability before throwing or trading the item in for a new piece.

I'm sure frugalists( Is there such a word?) can think of many reasons as to why this behavior is wrong but here I am going to state 2 that comes to mind.

1. We are wasting money by not fully utilizing the item we buy and even worse, we buy another item that does exactly the same thing. It might be newer, shinier or a little faster, but does it justify throwing away your current item when it can still be used for another couple of years?
2. We are indirectly destroying the world, we are taking too much of the Earth's resources to create all these items which we just waste by not fully consuming or utilizing. We waste so much food, water, oil, coal, paper and much much more. I feel that we should be more efficient in consuming and only buy or take what we can fully consume.

We are all guilty of wastage. I know because although I'm trying very hard, I still get tempted immensely when a new tech gadget comes out..( Samsung Galaxy S4...Hint Hint...). But we must all try to learn and change as we age. Remember that no one is perfect and life is a never ending learning journey.

With this, I urge you to try to use most of your stuff till it breaks or becomes unusable from this day onwards. Save both the Earth and your bank account. Buy or take only what you can consume!

As always, save more, spend less and invest wisely.

When Was The Last Time You Felt Happy?

Dear readers, what is the first thing that comes to mind when you think of the words happy and satisfied? Take a few moments to think about it. I'm pretty sure that many things come to mind, but there is something missing in most of the images and you cannot put a finger to it. Could it be that in most of those things do not bring about true happiness and satisfaction?

Now, narrow those thoughts down to just experiences with friends and family, take away material purchases. Think upon for example, finally getting on the plane to for your honeymoon, gazing into the eyes of your better half, when your child was born or when you were on that beautiful beach with your friends, Malibu Orange in one hand, a cigar in the other. What do you feel now? If you are like me, you will sense that longing in your heart to feel that feeling again, you will feel that at that moment, you were truly happy and satisfied. No? er... maybe you have different priorities and needs in life. For me, these are the kind of moments that I truly treasure and savor.

What I'm trying to say in this post is what many other bloggers have said before, I just want to add a more mental picture so you can feel what I'm trying to say. Most things that you buy, say hand phones, new clothes, new car, new laptops and all other consumer products will only bring about a very short lived happiness. After a while, you wont even remember that tiny spike in happiness that occurred when you made that purchase. If that is the case, why not invest your money on providing yourselves and your loved ones with experiences instead?

Experiences don't have to cost a lot, but even if they do, in my opinion, I think they are worth it if it's with the people you love. Instead of buying that new phone, bring your parents or family on short trip, take many photos, laugh and have senseless fun. I'm sure everyone will remember the occasion for years to come.

So this week, think of how you can create experiences which will provide lasting happiness instead of buying another product that will only present you momentary satisfaction.

As always, save more, spend less on material stuff and invest wisely.
P.

Automate Your Savings if You Have Trouble Commiting

Dear readers, how often does your mind tell you "Just one more purchase", or "If I buy this now, I'll just save more next month"? Well, I'm pretty sure we all know how saving that extra next month goes. There is an enormous chance that the savings will not happen as we will have even more commitments or even more new stuff to buy.

We are by birth not trained to delay gratification. When babies are hungry, all they have to do is cry and parents will come scrambling immediately ( I'm not saying that is wrong - Just using it as an example). When they reach the age of say..5 and see a toy, they would ask their parents and then scream or show a tantrum if they do not get the toy immediately. I'm sure not all are like that but many I have seen are.

Even as we age, we will carry on this impulse buying habit, we want that new phone immediately, we want that new 50 inch flat screen immediately or we want that new car immediately. I feel that this is a habit we have to change if we want to cultivate the habit of savings.

However, should we find ourselves unable to control our urges, there is a way that might help. Yes, you guessed it.. AUTOMATE YOUR SAVINGS. What I am trying to say is that, say you get your pay on the last day of the month. You have to set up an automatic giro that transfers a percentage of your pay on the 1st of every month to a separate savings account which you do not touch for anything other than investments.

The percentage can be any number you decide on. You can start small and slowly increase as your pay increases or expenses decrease. Or you can just bite the bullet and put in a big percentage so you will have no choice but to reduce your spending. Personally, i prefer the latter but as always, the wife disagrees and chooses the former. Those who are single would not have an issue with conflicting interest. Anyway, to compromise, we settled on the former but agree to cut down our expenses whenever we could...(so she says.)

The reason why automating your savings help, i guess, its because what we do not see don't hurt us. Technically speaking, this has been the way since we started working. What am i talking about? CPF! We have been automatically 'Paying ourselves first' since we started working. At first we all grumble a little, but we get used to it and get on with life with whats left of our pay. So why not take that a step further and take another portion of your salary and automate it into your savings account?

We will grumble at first, but as human, we adapt and get on with life while growing and feeding your savings and investment account. The reward being one day, this 'pet' of yours will grow big and strong enough to pay you back for your years of supporting it.. thus enabling you...RETIREMENT.

I know what I have said has been said many times before, but it's always good to refresh and remind. I hope that this piece of advice will help you in your savings journey.

As always, save more, spend less and invest wisely.
P.

Should I Draw down on My Portfolio or Should I create a Dividend Stream

Dear readers, I have realized that I am still undecided as to which approach I should take. Both options have both advantages and disadvantages. This decision is important and should be decided on before you progress to the next phase. This will decide on how and what kind of investments you will have to make. Before I proceed further, here is what I think some of the advantages and disadvantages are.

Drawing Down on Portfolio

• Advantage
• Takes a shorter time to build.
• Requires a smaller fund to build.
• Can retire earlier without too much compromise.
• Disadvantage
• Might run out before I leave this world.
• If the Market turns sour for a few years, I will not be able to sleep without fear of losing a major portion of my portfolio.

Dividend Stream

• Advantage 
• Constant dividends that does not reduce the overall capital.
• Capital can be used as inheritance for children to continue receiving income.
• If portfolio is chosen wisely and is well balance, I will feel safe even in an event of a market downturn.
• Disadvantage
• Requires a large capital outlay to be able to achieve dividends equal to majority of my required expenses.
• Even with careful picking, companies might still stop paying dividends.
• Will still have to constantly monitor the market.          

These pointers are very general and there are many more advantages and disadvantages attached to these 2 strategies. I also have to point out that I will only, if possible, be using these dividends or draw downs to pay for my basic expenses such at utilities, phone bills, internet bills and basic necessities. As for other expenses such as holidays, eating out and stuff, I will have other streams of income such as my online business and hopefully my soon to be set up "physical" business...(not physical in that sense, but a business that is not an online thing. Having quite a mental block now so can't think properly.)

My point of view is that one should never solely rely on the stock market as it's pretty much out of your control. If possible, create more streams of income which you have more control of. These could include Blog shops, online shops, hobbies that generate money and other businesses. Things that you enjoy doing are not considered jobs...in a sense..they are more like an enjoyable activity..or a hobby. Think fishing, soccer, gardening or something along that line.

I hope to hear more about what other options I have besides these 2 and also any other advantages and disadvantages I have not listed. Which are you planning to use?

As always, save more, spend less and invest wisely.
P.

Double Edged Sword - A.K.A The Credit Card.

I think that to many out there who are adverse to debts treat credit cards like it's the bane to their existence. They are wary of the high interest rate it carries should payment not be made on time. Legal Loan sharks, I feel is a fair description. But whether you carry credit cards or not, there are definitely benefits and disadvantages that you should know of.

As for myself, I do carry several credit cards. However I pay them off as and when throughout the month and definitely once more at end of every month. You might call me paranoid, which might be true, but i really don't like seeing a debit balance on my credit card statement. On second thoughts, i think i might have mild to moderate obsessive compulsive disorder. Why you ask then do I use credit cards? The reason for me is not to free up cash flow, but to pluck the benefits off the credit card tree. Cash backs, reward points, spend and redeem gifts and sign up bonuses.

Here are some of the credit cards I hold and what i use them for.

Standard Chartered Manhattan Card - Large purchases above $3000

• 5% rebate for purchases above $3k in a statement month.

Standard Chartered Prudential Card - Prudential Insurance

• Convert Point at a better rate to offset insurance premiums.  

DBS Esso Card - Petrol top ups at Esso

• Give a 17% rebate and convenience of having smiles loyalty program in the same card.                       

  POSB Everyday Card - Buying stuff at Watsons and movie tickets.

• 3% cash rebate at Watsons and 6% during their promo periods. I think they have discounted movie tickets when you use the POSB Everyday Card, please correct me if I am wrong.

Throughout these few years, I have gotten quite a lot of gifts and rebates from my credit card spends - Had to pay for wedding, home stuff and also occasionally helped people sign for large purchases. I feel that a credit card should not be used like a credit card, it should instead be used as if its a debit card. What do I mean? Well, simply put, don't use money you don't have. Don't spend your future money. For example, If you have $1000 in your spending account, make sure your credit card spending is less than that $1000. That way, you will always have money to pay it off and not have to pay the late payment and high interest charges.

How and what do you use your credit cards for? To free up cash flow? To be able to spend when you don't have the means now? To get rewards and cash back? Please share and also let everyone know if there is a good credit card out there.

PS: I know this is a post on credit card which = spending, but  why not get back something in return for something that you NEED to spend on anyway.

As always, save more spend less and invest wisely.
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The Spine of Early Retirement

I'm sure that most of you are familiar with some of the steps you have to take to reach early retirement, but bear with me as I repeat them once again for the benefit those who do not. These steps are not concrete and you can choose to take them or not to attain your early retirement but I believe that paths are similar to these. Only difference being your personal tweaks, luck and mistakes.

Without further ado, here they are:

• Start as Early as Possible - This applies not only to those seeking early retirement or financial freedom but to everyone. The earlier you start, the more time you have to allow the magic of compound interest to work. What's more, having more time allows for more margin of error. No one is perfect therefore we should always make allowance for mistakes.

• Manage your Consumption - One of the main reasons why most people are not able to save enough for an early retirement is because they spend to much. We are all wired to consume and many of us can't help it but conform. However, there is this rebel within us that does not want to conform, we want to break free from the norm - these are the people that are able to achieve extremely early retirement. Reduce spending now, stop spending money on too much wants, stick with the needs. You do not need that new hand phone just because it has a battery life of 1/2 an hour more than yours or a screen 1/2 an inch bigger than yours. Remember, you choose your enough, not your neighbor.

• .Cut down on Excess Spending -  I know it's often hard to form new good habits, but trust me, this will benefit you. For just 1 or 2 months, track every dollar you spend and at the end of the month, you will be able to see where you have been spending unnecessarily. These are the parts of your spending tree that you must prune away. If you feel comfortable keeping track of your expenses by then, you can continue doing so. If not, try to stick to your current monthly expenses less those unnecessary expenses and do a follow up 6 months later to find out your monthly expense status.

•  Be Frugal - This step is an acquired taste, once you get it, it becomes something you actually enjoy doing. However i urge you to do this is moderation if you are not alone in your journey. Your significant other might not share the same joys as you in being frugal. You have to take baby steps to let them see the benefits of being frugal. What you must do to be frugal is to view money as an extremely precious resource not be to exchanged for something of lesser value. For me, i feel that lesser value means items that bring no benefit or new experiences to your life. Most of the time, these items just bring you momentary satisfaction that last for a month at most. Not worth it.

• Never Trade Early Retirement for Happiness and Family - This is the last and most important key. You should never trade anything in this world for happiness and your family. What is the point of forsaking your happiness and family to gain early retirement? The point of early retirement is to be able to have time for both. Don't be over obsessed with retiring early that you forgo your current happiness or spend so much time tweaking your spreadsheet or monitoring your portfolio that you neglect your family. You have to set your priorities right.. what is most important in your life. For me, its family, for without them life would be quite meaningless even if u have all the riches in the world.

 I know that everyone will make mistakes as to err is to be human or was it to err is human... Anyway, i hope that on your journey to financial freedom or early retirement, you will make more right choices than mistakes. Ponder upon what is most important in your life, keep it close and never ever trade it for anything this world has to offer.

As always, save more, spend less and invest wisely.
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Thou Shall Not Covet

" Look at your own life to see what is enough, don't look at your neighbors to compare. " Saw this quote or something similar at a blog  i once read. My memory seems to be failing me. Can't decide whether it's due to me getting on in age or just too many things flying around in my mind.

The quote is so true. Since young, we have been 'trained' to always do better than others. Get better results than others, run faster than other, earn more than other or get a better car than others. We often look to our neighbors to compare but is one-upping our neighbor going to improve our lives significantly? There will always be someone else to compare with and in the end, it will form a never ending cycle.

Ask yourselves this, do you really need that extra million to retire? Do you really need that new phone? Do you really need a new car? Sure, these things are definitely nice to have, but do you need them? After earning that extra million, will you stop or will you want to earn another.. and another .. and another.

The important thing is to figure out what you deem is sufficient and work towards attaining that. If you want to get from point A to point B, especially in Singapore, a Honda Civic would do as well as a Porsche. Why get it just so you can feel 'better' than someone?

At the end of the day, what stays with you are memories of the experiences you went through and not the material things that you have accumulated. Don't get on the never ending roller coaster ride of endless consumption. Know what is enough and spend the rest of your energy enjoying the rest of your life.

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C'mon, let's get another round of drinks! Dont be boring.

Does the title sound familiar? I'm pretty sure you have heard something like that before. You can substitute the word drinks for shopping, food, hand phone and so on.

You feel pressured to spend and conform when your friends request that of you. Deep inside, you are feeling uneasy as you know that you are eating into your budget and spending way more than you actually should. Yet, to gain social acceptance, you dig deep into your pockets and scrape the dollars off the bottom.

I feel we should always do things in moderation. If you are always saying no to going out and having fun, soon your friends will stop calling. However, if you are always saying yes, you are seriously endangering your savings and retirement planning. The key is always knowing when to say yes, when to say no and when to give a better and less expensive suggestion.

If they are truly your friends, they will definitely hear you out and understand. (But not before making a sport out of you.)

Here are a few less expensive alternatives:

1. Buying beer from the supermarket and head to one of your homes to drink rather than heading to the pub and paying easily 3 times the amount. What i learnt from experience is that it's always the company and not the venue that decides whether it was an awesome night or not.
2. Get everyone to make some food and head to the park or something for a picnic rather than going to a fancy restaurant to eat. You might find that the fresh air and change of environment is extremely welcoming.
3. Buying a dvd from the store and watching it at home instead of going to the cinema to catch a movie. The dvd would cost between  $10 to $25 for all of you instead of approximately $10 per person should you go to the movies. Buy microwavable popcorn to ease in those hardcore movie goers.
4. Instead of going shopping at the mall, why not visit a flea market and have the same amount of satisfaction. You will be surprised and the amount of stuff you can find at a flea market.

The list goes on and on. Just use your imagination and I'm sure you, your friends and family will have as much satisfaction and enjoyment at a fraction of what you would have spent otherwise. Once again, i would like to say this.. It's the company and not the venue or amount spent that matter. If you are with friends and family, even the simplest of food will be a million times more enjoyable that a royal feast with...for absence of a better word, enemies.

As always save more, spend less and invest wisely.
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