DUOS/U - Decreasing Units of Satisfaction/Usefulness

More is always better. The saying, while true to a certain extent does not apply to everything. The usefulness and the satisfaction an item brings diminishes as the quantity of that item increases.

Take for example your clothes. Say you are currently naked and you go to the store to buy a set of clothes. The set of clothes would be extremely useful because it keeps you covered and protects you from the cold. If you bought 2 set of clothes, it would still be mightily useful because it allows you to remained clothed while you are washing the 1st set of clothes. Now fast forward to the 100th set of clothing. How useful would that set be? I highly doubt it would bring about much more use or satisfaction then the 99th set.

This applies to everything else, even money. ( Yes, that's right, I said money..so shoot me.) Only we ourselves would know what is enough. Spending $1000 might allow you 100% satisfaction, however, spending $5,000 might not get you 500% satisfaction. Most likely, it will be along the range of 101% to 200%.

If we stop and make the decision to cut out spending on things that brings us little value, we would be able to save the money and use it for things which will bring us maximum satisfaction. Rather than spending on the new tablet with a larger screen size, why not spend it to see a loved one smile. A nice dinner or a short getaway perhaps.

What are the things you continue spending on or doing that are producing diminishing satisfaction and usefulness? Are you ready to take the next step towards life by cutting down on these? Please do share your experiences.

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

Dealing with Early Retirement Obsession

There will come a point, no doubt, in every early retirement preppers journey where he/she will become extremely obsessed. (At least i hope that its not just me.)

You will start counting every day and dollar you have to retirement. You will search for every book and blog for every single detail which increases your chance of early retirement. And if you are like me, you will tweak and tweak your early retirement spreadsheet several times a day before you feel at ease. Don't judge me, you will get to this point if you want early retirement bad enough.

The key point is to realize that this is merely a stage that you have to go through and that these are just the means and not the ends of your goal. I have to admit that i am still at this stage, although i feel that I'm exiting it for the next soon.

For those of you who are beginning this stage or are stuck chest deep in this obsession, here are a few pointers to hopefully help you out.

ps if you say you are not obsessed and immediately have to check your spreadsheet or  think of new methods straight after you read my blog...sorry bro.. you are.

To the therapy room ~

• First of all, like all problems like alcohol or gambling addiction, the most important step is to realize and admit that you are obsessed with early retirement. Only then can you see the full picture. Having this obsession for a short while is okay as it drives you to save more in the early stage. Dragging it out for too long is where this obsession gets unhealthy, not unlike any other obsession.

• Next, you will have to realize that after the initial stage of planning and savings, the small little obsessive tweaks here and there will at most shave a few days off your retirement. The time spent will not be worth it. You should instead be spending your time with your family. All you have to do is stick to your decided path and only tweak or tinker when you hit a major milestone or feel that your are drifting off your path.

•  Lastly, pick up as many new skills and hobbies as you can - inexpensive ones of course. There are 2 reasons for this pointer. The first would be that it takes your mind off constantly obsessing about early retirement. The second would be that these skills and hobbies are the things that will keep you occupied and your mind alert when you are finally into retirement.

There it is, my humble advice to you. I really hope it helps, however much or little.

My last parting advice would be to always share your plans, your feelings and even your obsessions with your family or spouse. I know its hard...as a guy to share his feelings..(Gals have no issue in this department..at least my wife doesn't - sometimes i think i should invent pills for verbal diarrhea).

Anyway, sharing will really bond you and take some burden off your shoulders. Remember that you are never truly alone. Family is forever.

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

Are you commited to your cause? Hear no Evil, See no Evil.

Good morning everyone, its finally Saturday. What a relief after such a long week at work.. Thankfully there are only 4 of those next week.

So...What is everyone planning to do later? What??? Window shopping at the mall? (HisssSsSsS!!!)... Just kidding. Anyway, have you ever wondered how committed you are to your cause? How much temptation or peer pressure can you resist to in order to get to where you want to be faster?

To me, I have never felt the need on spend on most, i repeat MOST consumer goods. My only kryptonites being the latest gadgets and drinking. I kind of understand the obsession my wife, C has over shoes and bags and clothes and jewelry and wallets and macaroons and... did i mention shoes(100 pairs...OMG..WTH... FML..feel free to add any other abbreviations.)

On second thoughts i realize that i don't. How can someone be obsessed with so many different things..erm.. ok, enough of my rants.. back to the topic.

I'm very sure that many of us who have made the decision to retire early would have set a goal or goals as to how much they must save a week, a month or a year. In order to attain that early retirement, we would have to strictly adhere to this goal and not waiver as every waiver would cause that much awaited retirement date to be pushed further and further.

We must not give in to the temptation of buying these wants, and if we really do, we must not impulse buy only to realize 2 weeks after that we don't really want that item at all. What i normally do is procrastinate ( naturally gifted in the art of procrastination). This is one of the only few scenarios is life whereby procrastination serves a good purpose. I would start by reading reviews, scouring Cnet for bad review(while secretly hoping to find none). Then i would talk to my wife about it, weighing the reasons as to whether i really do need the items or not. and finally going to a few thousand shops to view the item multiple times - I Kid.....you...not.

The outcome usually turns out the same, i realize that i don't really want the item. ( Mainly because i procrastinate so long that the next version comes along..and my wandering eyes...wander..) On the other hand, when after all the procrastination and pondering and I still want the item..I would then purchase it. With money on hand and not on credit.

That said, as i grow older, I feel that my priorities are changing. I do not feel the need to buy so often anymore. I now shift my focus more towards experiences rather than on consumer products. I would want to learn and experience new things. Learn a new language, a new skill, go hiking and so on. I am beginning to feel less need of material things. I kinda like this change and hope that one day, my other half - that shopaholic, with her morbid obsession to buy - will share my views in life.

Any suggestions as to help her see things my way without counseling will be welcomed! I'll buy you an 8 course meal at a top restaurant if it works.. yes..I'm pretty desperate. =)

ps. you are only as strong as your weakest link.

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

My Checklist for Retirement

Since i have decided to document my journey, i feel that it is only right to roughly state where i am on it. Honestly, i am only at the beginning, i would say that I am at about the 10% to 15% point ( I will show my portfolio allocation in a later post). The requirement for me in order to declare myself retired would be that i would have to have completed the following tasks.

1. Clear my mortgage.
2. Have an income from different streams equal to a min of all my expenses.
3. Have $0 debt.
4. Have an emergency fund of at least 1 year worth of expenses.
5. Have the min sum in my CPF

Sounds easy when generalized into these 5 point but in reality, not so. I have to continuously work hard at achieving these 5 targets should i want to retire before the age of 45. Why 45 you might ask? I chose this number because based on my calculations, which I will show in a later post, 45 would be the age whereby i can achieve these goals without compromising my current lifestyle too much. ( Wife is a spender, new house, new renovation.. etc etc)

45 is also an age whereby I am not too old to do the things i want to do such as travel, hiking and other such stuff. I would still be physically able to backpack Europe at that point, i dream i can only dream of now.

Clear my mortgage

Not clearing the mortgage during retirement would mean that 2 things, i have an added expenditure that is not within my control( cannot choose not to pay ) and my income would be reduced due to the fact that i will not longer be contributing to CPF thus I will have to pay cash for my mortgage. Not a wise choice.

Have different income streams that equals a minimum of my expenses

I would prefer not to draw down on my investment portfolio as i would like to leave it as a form of inheritance to my children. I would therefore try to create as many streams of income as possible to live on comfortably. Currently, my wife and I are working on several projects which should reap fruit in the near future. If not, we are still young and will learn from our failures and try again.

Have $0 debt

Unlike many who believes in good debt and bad debt, i am one who thinks otherwise. To me, all debt are bad debts as it only means that you are owned by someone either directly or indirectly. At the point of retirement, i do not want the chains of debt binding me. No car debts, no housing debts and definitely no credit card debts.( I always pay my credit card bills on time.)

Have an emergency fund of at least 1 year worth of expenses.

In life, nothing is ever certain, you never know when you will need extra money. I hate to think that i would have to borrow from someone to support my family in times of need. Instead, i will have an emergency fund containing at least one years worth of expenses. This would also be a safety net so i will, hopefully never have to sell my businesses or investments at a downturn to fund my living expenses.

Have the min sum in my CPF

 The reason for this option is purely personal. I feel that having an additional income coming in at the age of 65 would be something to look forward to. This extra stream of income would be gotten by putting the minimum sum from both my wife and I into CPF Life which should provide a nice extra monthly income  for several years. An extra benefit would be that after my wife and I leave this place for a better one, our kids would get whatever is left.( Since the earlier we travel to a better place the more our kids get, i seriously hope they will love us enough not to wish us an early voyage.)

These are my requirements i set for myself before considering myself retired. What are yours? I would love to hear about them so please leave comments.

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