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.

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.

P.

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.
P.

My Arch-Nemesis... The Evil Sale Sign

Yeah you read it right, my biggest enemy are the brightly colored sales signs that are frekin everywhere. I myself am immune to them, but like all evil villains, they tend to attack those who are closest to you for they know that it is there that you can be hurt the most.

In my case, it's my wife, C. Sale signs really know how to do a number on her without her even realizing it..just like moths to flames. I wonder what this mad incessant need to hover to any sale sign is. It's a typical case of having to spend to save. I can understand if she has only a few pieces of clothing in her possession .. but as you can guess...she has a truckload full of clothes..not the small trucks you often see in Singapore but those large 18 wheeler kinds. I often joke that if i sell all her clothes, shoes and bags, I'll be a multi-millonaire.

I know you are waiting for the part where i give you advice on how to stop this zombie like madness...however, i am sorry to report that as of now, i do not have any remedy or cure.. we can only put up with the groaning and moaning of "Brainssssss..." oh wait, I meant "Saleeeeeee...." Only advice I can offer is not to allow them to gather into hordes.. for example, sisters, mothers and girlfriends. When this happens, bless your soul, there is no stopping the stampede of sale maddened zombie girls.

I hope that upon further research and psychological retraining on my test subject  evil dead   wife, i would be able to report back with a cure. Till then, stay alert and avert their eyes from the signs. I wish you all the best in your endeavor.

Over and Out.
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.