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
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| 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.
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