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.
Friday 28 June 2013
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.
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