Why Do I Keep Worrying About Having Not Enough Money?

The fear is real... the worry of having not enough money is causing me sleepless nights sometimes. Is this normal I ask myself? I have savings, I have a stable job and earn a decent fixed monthly salary. I have enough to live my life and still having savings every month. But there is one thing I am constantly worried about, and that is having not enough for retirement. 

No matter how much I budget and plan and forecast, there is still a lingering worry in me even though I try to assure myself as much as possible that its all ok. There is one reason I identified, the reason is the future is so unpredictable that there is no way to actually predict what will happen. Even if I plan all the way, the outcome may still be not what I want it to be. 

Life throws in all kinds of nonsense at you along the way. I'm lucky not to have met too much nonsense thus far but I've seen nonsense being thrown at people and depletes all their savings instantly due to high medical bills and long term healthcare cost. 

There are many Singaporeans who do not have to worry about money. We can see it on social media channels Youtube, Facebook, Instagram, Tiktok. Many people have the means to renovate their house nicely, buy a car, buy a luxurious condo, stay in 5 star hotels and eat good food all day. Some are spending beyond their means, some do not plan for the future but there are some who really have too much money to spend because they earn extremely a lot too. 

For me, spending money was a taboo all my life. Yes its hard to spend money because we always didn't have much anyway. When its my turn to spend money, I buy nice furniture for my house, eat good food, spend on luxurious staycations because I can afford it but guilt sets in. Its a funny feeling of enjoying but at the same time fear.  

Psychologically, I would think I need a breakthrough. Its like when you first started investing and you are brought on an emotional ride of thrill when the market goes up and fear when market goes down. Its not easy to overcome but as years goes by, you get better at it. 

I'm not sure if anyone has the same thoughts and experience as me but if you do, I would encourage you to keep going when it gets tough. The light is always at the end of the tunnel. Worry is a normal process and it should spur us to achieve more in life. 

The Class Divide In Singapore - Does Having More Money Makes Us More High Class?

Many of us would have seen a video by Channel news Asia about a few students from different backgrounds voicing out their views on class divide issues in Singapore. This video went viral and was debated widely even by Ministers.

The class divide - Education tracks & Money

Besides the different education tracks which cause class divides (eg express, normal academic, normal technical stream), another apparent issue which emerged out is the class divide regarding money. I was surprised that kids as young as 10 years old are comparing who has the more expensive school bags and pencil boxes with their classmates.

You can watch a snippet of the video below:

"If you've the most expensive things, you're the most popular also". This was commented by a young primary school girl. The class difference only gets worse and worse as students are divided into different streams in secondary school and it even continues in adult working life. 

Our society has gotten use to this kind of segregating people in life. In schools, the better students are put into special or express streams while the weaker ones are put into normal academic and normal technical streams. This makes the students who are in the normal streams feel less inferior to their peers in the express and special stream while the express stream people tend to look down on the normal stream people too. 

Then, as we proceed to the higher education level, there are some people who get into Junior college,  some into Polytechnic and some to the Institute of Technical Education (ITE). Thereafter, some proceed to local university such as NUS, NTU and some choose to go private universities. The difference is again apparent as even employers sees the degrees differently. 

It doesn't stop here. In the workplace, we continue to segregate people into different class through the management associate program where it is a fast track program for employees to advance their career faster. People in this program tend to be treated differently at workplace and also get promotion up to twice as fast as another employee who is not in this program. The starting salary and future salary adjustments may be different too. 

The above are just some of the examples of how we as a society contribute to class divide unknowingly. While in this society nothing is fair, those who make misinformed choices in life at an early stage will inevitably lag behind in life.

How would you describe the expectations your parents have of you?

In the video, it is apparent that those who end up in the normal stream have thoughts which are different from the students in the express or even integrated program. Parents of these students have different expectations of them too which is quite distinctive. 

For students of integrated program, their parents expect them to pursue education such as law. They also expect them to get at least an A for their exams. 

For students in the normal stream, when asked what's their parents expectation of them, they say they just expect them to just pass. They don't expect very high grades

Does Having More Money Makes Us More High Class? 

In the same full 48 mins video about class divide, it goes on to discuss on how higher class people look down on people such as security guards, cleaners and so on. A condominium security guard who was interviewed said he has been shouted at by residents and called names such as stupid security guard. This shows the great disrespect these people have and think they are high class living in a luxurious condominium. 

You can watch the full video here. 

Ultimately, I always believe that having more money does not make us a bad person but it amplifies whatever character we have no matter if we are poor or rich. Having more money does make us feel better about ourselves especially when our income power increases. But, we should always remember not to look down or show disrespect for those who are worse off in life. At the end of life, we are actually only just a normal human being no matter which social class we belong to. 

Some of us may have made misinformed choices when we were younger and regretted the choices we made back then such as not studying harder and in the end didn't manage to get a good job to earn higher income. In any case, there are people who still manage to become successful even though they came from a lower class background. With some knowledge of financial planning, it helps along the way to become more financially secure for our lives. 

Feel free to join in an AMA session which I have on DBS NAV website. Just ask any questions you have at this link on any issues or topics, no restriction. You can help answer some questions too in the community. 

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The Regrets Of Saving Money For FI vs Spending To Get Happiness

Have you ever struggled with the thought of saving more money for financial independence vs spending to get happiness now? For people like me who are on the journey to financial independence, we often think that if we don't spend more on some items we wanted to, then we can achieve financial independence earlier. Its always a trade off for saving money vs spending to get happiness.

In recent weeks, the conflict of saving money vs spending to get happiness right now is constantly on my mind. It went on into a state of confusion and anxiety as well. I have been a saver all my life and spending more money on something which I don't think is valuable affects me a lot. The numbers run through my head and my mind keeps thinking what if I didn't spend this amount? Will this affect my plan of financial independence?


The Regrets Of Saving Money vs Spending To Get Happiness

I chanced upon a podcast which was a conversation between 2 people who had achieved financial independence early in life. They both had enough passive income to live their life in their late 20s and early 30s but it was through extreme saving and investing. In the podcast, they were talking about the regrets they had because they turned down friends gatherings and forego trips just to save more. After they achieved financial independence, they looked back in their life and felt lots of regrets for sacrificing so much early in life.

Another thing which caught my attention is that they also mentioned the motivation for achieving financial independence early is because of anxiety. This is the anxiety that money is not enough and they wanted more to feel secure. To think of it, actually my motivation for achieving financial freedom is also because of anxiety. This made it very difficult for me to spend money unnecessary without comparing prices to get the best deal. Even when I tried to live away from a budget, mentally in my mind, the numbers are always there and when I spend a little more, my mind would give out an alert.

I have also lived with the notion that money does not buy happiness and spending unnecessary on material goods does not give lasting happiness. However, in actual fact, money does buy happiness especially when we spend on experiences with people. It also builds relationships and create memories of a lifetime.

Spending a little more doesn't hurt?

If money does buy happiness and can create memories, so spending a little more doesn't hurt right? I am still trying to learn this part where I just spend money without thinking about the trade off for financial independence. In fact, spending a little more doesn't really deviate myself from the financial plan. Instead of focusing on how much more I can save, I should focus on what I can spend more meaningfully on. This doesn't apply to everyone. If you're already spending close to 100% of your salary, then you should be focusing on saving more. For those of us who are already saving perhaps more than 50% of our income, then it may be good to review our expenditure to spend a little more on meaningful things.

Meaningful things which we can spend on includes:

• Gathering with friends
• Overseas trips with family or friends
• A nice meal treat for your loved ones
• Participating in events to create memories
• Buying gifts for people

What about financial independence if I spend more?

Now, spending a little more doesn't hurt but does it affect our goal to reach financial independence? Or maybe I should put it in another way, if we can't reach financial independence earlier, then does it matter if we reach it later? 

Many financial bloggers have wrote about how they saved more than 100K in their 20s. More often than not, this is done through lots of sacrifices unless we have a high income which is not the case for most people in their 20s. I used to save even on drinks and food just to save that extra few dollars. Looking back, maybe if I didn't do that, it wouldn't hurt much also. I would think there are some regrets which I had, living a life of fearing to spend money. 

As my income grows, spending money is not as painful but there are still conflicts in my mind on this when it comes to certain spending. In the podcast which I was listening to, it was also mentioned that one of them couldn't bear to spend $13 on breakfast when on the same morning she got a $6000 cheque for a side hustle. Its really not about how much money we have or earn but the mindset that we have. 

Never in my life would I have thought that the ability to spend more could be as bad a problem as the ability to save more. We have often heard of people who can't control their spending but not much have been said of people who do not spend a lot. For our own life, I always believe there should be a balance. Life is short so spending some money on people we love is really a privilege. We may not have a chance in the future when they are gone. There will be lots of regrets by then. 

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The Nail Of Life - How I Got Out Of Painful Situations in Life

I've not been writing much about my life lately as many things happened and I wanted to at least wait for things to settle down before I pen my thoughts down. This will probably be a short post to summarise my life in general.

Life is full of ups and downs as always. Readers would know I had a bad year end in 2017 where I saw how fragile life was. It was a struggle for me to understand and digest and accept what happened. You can read about what happened last year here. The start of the year was extremely painful for me too as I had to handle the emotions of not just myself but of my loved ones as well. I struggled to stay happy even though I know happiness is a choice.

I used to write about life lessons on my blog but realised I haven't been doing that for a long time. Oh well, when I cannot handle myself what right do I have to tell people about happiness? This was what went through my mind which stopped me from writing more. I had thoughts to just get out of Singapore and travel alone so that I can escape from the world but didn't do that in the end.

Work didn't come easy either. My department was restructured and the manpower was cut into half. Half of us were transferred to another department. I was one of those being transferred. I thought I could learn more by doing new things but the department was fire fighting all day long with back to back meetings for the past 2 months. I've had maybe 20 meetings in the past 2 months and some lasted as long as 12 hours. It was extremely difficult to absorb and learn the information myself while I struggled to understand what is going on in the meetings. It didn't helped when the management didn't gave clear direction of what they wanted to do either.

For investments, the market had a significant sell down a few weeks back and my portfolio went down by the thousands. Thankfully, the market went back up again and dividends were paid recently too. The worst investment this year which I made had to be in Hyflux where I invested in its preference share. I went to the town hall session just last week and it is still unknown whether they will pay back the money. It was a really bad town hall with the place very hot and stuffy and the management didn't really gave clear directions on what would happen. It seems like they were as lost as us even though they had the best legal, accounting and C-Suite level professionals in the town hall session. I hope the CEO will keep to her word where she said she will want to take care of the minority stakeholders interest as much as possible.

Then, things started to turn around. Some good news happened just this week. I was so sick and tired of everything that I told myself enough is enough. I am going to get out of my situation and move forward. Just 2 weeks back, 2 recruiters called me and proposed jobs which I may be interested in. I went for one of it and may get a job offer soon. I am really contemplating to leave and will think about it and see how it goes when they call back next week. Its a meaningful job where I get to make impact in the lives of others.

I saw a video on Facebook which talked about "How to Un-Stub Your Toe on the Nail of Life". Are you in situations where you feel pain but you still stay on the pain and unable to get out of it? Watch this short 3 mins video and hope it motivates you in your life:

If you've been in pain for the longest time in your life, now is the time to say enough is enough, I am getting out and moving forward in life again. Turn your failures in success today!

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Everyone hates the corporate world but what can we do about it?

Everyone seems to hate the corporate world but we have no choice but to work for a living. Let's face it, even if you like doing the job, you won't like handling the bosses or the office politics that comes your way.

Your choices affect your outcome in life

A fellow blogger and friend who blogs at Investment Moats wrote a post which recounts his conversation with a fellow colleague who decided to call it quits in the corporate world. He resigned from the job at the age of 45 without another job. This was possible because he choose this path right at the start. He planned out his path to exit the corporate world many years ago when he was much younger.

Most people do not act like the colleague above. In fact, most will never even think that they could exit the corporate world so the only choice is to climb the corporate ladder or choose a role which is less tough to deal with. In my previous company, there were many people in their 40s who didn't want to be promoted because they know that they would face more shit if they go higher up the corporate ladder. Well, its a personal choice and there is no right or wrong in our choices in life.

Also in my previous company, I saw some colleagues who were able to call it quits and enjoy the freedom which they set out for in their early years. Yes, all these people have one thing is common. They made this choice early in their lives.

In my current company, most are young people around my age and a lot are busy climbing the corporate ladder at this age. I too am climbing the corporate ladder but I know my end destination should not be getting stuck in this rat race. I do like my analysis job but there are many re-organisation happening which affected morale a lot and having to deal with this is not something pleasant. There are also many additional "jobs" which are not in my control. People not cooperating is another issue to deal with coupled with demanding and unreasonable bosses.


Why its hard to enjoy your work even if you like it?

Its a irony that I deal with data analysis on my blog too which I often break down numbers and create charts to analyse as well. This is similar to what I do at work. However, it is very hard for me to enjoy the same analysis work in office because of the deadlines, bosses comments, approvals and the many meetings (which may be pointless).

Imagine if I have to meet a deadline for a blog post or having to seek approval just to post an article on my blog. Add in many pointless meetings and presentations just to post that one article. That will be disastrous. Ideas flow because of the freedom to think and not fearing of what will happen if we do the wrong things.


What can we do about it?

Getting out of the corporate world does not mean retiring totally. There have been much discussions on the idea of retiring partially which can be achieved at a much younger age. Instead of doing work we do not like and staying in the corporate world, we can generate enough passive income to cover our fixed expenses and do some freelance work to supplement our variable income lifestyle.

Imagine if you have $300,000 savings and invest it to get 5% passive income, you would be able to get $15,000 annually which is $1250 per month. This can cover some fixed expenses or probably most fixed expenses if you have no outstanding debts. Thereafter, some freelance or part time work can be done to get additional few thousand dollars monthly to supplement our income. This is just an example and it really depends on individual lifestyle on how much they need monthly to survive.

The most important thing is what we set out to choose early in our lives. Do you choose to stay in the corporate world till you're old or you choose to have the freedom in your life? This is an important question and whatever choices we make will ultimately lead us to that end destination which we choose. Remember, there is no right or wrong choices. There are people who like the corporate world but I just don't think that's me. How about you?

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Why Young Adults Should Not Focus On Investing At The Start Of Their Career

Two young adults, Kimberly and Johnathan starts out in their careers at the age of 25. Kimberly saves $20,000 a year and invests her money to earn only 4% investment returns while Jonathan saves $15,000 and invests his money to earn 7% investment return. Who will have higher net worth after 15 years?

Surprisingly, it turns out that Kimberly would have higher net worth in 15 years at age 40 even though she achieved lower investment returns. How is this possible?

Let's take a look how this pans out in a chart as seen below:

As we can see, because Kimberly saves an extra $5000 a year, she is ahead of Jonathan even though she only earns an investment return of 4% vs 7% which Jonathan earns. This shows that investment returns doesn't matter as much at the start of our lives or career. We should focus on saving more and earning more in order to save more.


The different income levels in Singapore

Much have been said about paper qualification and not to paper chase in the society. However, reality still hits us hard on the different income levels in Singapore especially those of the graduates and the non graduates. A recent article on the straits times said that fresh university graduates earned a higher starting pay last year, with some getting as much as $4,000 to $5,000 a month in areas such as business and computing. As compared to a non graduate, the startinf pay is only about $2200.

MOM releases statistics on the different graduate starting salaries of those from ITE, Polytechnic and Universities. The latest I found is for the year 2016. Let's take a look at some of the different salaries for the different groups of graduates.


ITE graduates

Course	Median Gross Monthly Starting Salary ($)
Higher Nitec (Engineering)	$1,700
Higher Nitec (Business & Services)	$1,652.50
Higher Nitec (Info & Communications Technology)	$1,650
Nitec (Engineering)	$1,545
Nitec (Business & Services)	$1,690

Polytechnic Graduates

Course	Median Gross Monthly Starting Salary ($)
BUILT ENVIRONMENT, ENGINEERING & MARITIME	$2,200
INFORMATION & DIGITAL TECHNOLOGIES	$2,100
APPLIED SCIENCES	$2,000
HEALTH SCIENCES	$2,400
BUSINESS, MANAGEMENT, DESIGN & OTHERS	$2,000

University Graduates (NUS, NTU & SMU)

Course (4 year degree programme)	Median Gross Monthly Starting Salary ($)
Bachelor of Accountancy	$3,000.00
Bachelor of Accountancy & Bachelor of Business	$3,500.00
Bachelor of Arts (Chinese) (Honours)	$3,300.00
Bachelor of Arts (Economics) (Honours)	$3,300.00
Bachelor of Arts (Education) / Bachelor of Arts with Diploma in Education	$3,525.00
Bachelor of Arts (History) (Honours)	$3,000.00
Bachelor of Arts (Honours)	$3,500.00
Bachelor of Arts (Linguistics and Multilingual Studies) (Honours)	$3,365.00
Bachelor of Arts (Psychology) (Honours)	$3,200.00
Bachelor of Arts (Sociology) (Honours)	$3,500.00
Bachelor of Business Administration (Accountancy) (Honours)	$3,075.00
Bachelor of Business Administration (Honours); Bachelor of Business Management	$3,500.00
Bachelor of Communication Studies (Honours)	$3,000.00
Bachelor of Computing (Honours)	$4,000.00
Bachelor of Dental Surgery	$4,050.00
Bachelor of Engineering (Aerospace Engineering)	$3,675.00
Bachelor of Engineering (Biomedical Engineering); Bachelor of Engineering (Bioengineering)	$3,200.00
Bachelor of Engineering (Chemical & Biomolecular Engineering)	$3,400.00
Bachelor of Engineering (Chemical Engineering)	$3,450.00
Bachelor of Engineering (Civil Engineering)	$3,400.00
Bachelor of Engineering (Computer Science)	$3,500.00
Bachelor of Engineering (Computer Engineering)	$3,710.00
Bachelor of Engineering (Electrical Engineering); Bachelor of Engineering (Electrical & Electronic Engineering)	$3,400.00
Bachelor of Engineering (Environmental Engineering)	$3,300.00
Bachelor of Engineering (Industrial And Systems Engineering)	$3,500.00
Bachelor of Engineering (Information Engineering and Media)	$3,350.00
Bachelor of Engineering (Materials Engineering)	$3,300.00
Bachelor of Engineering (Materials Science & Engineering)	$3,540.00
Bachelor of Engineering (Mechanical Engineering)	$3,390.00
Bachelor of Fine Arts (Arts, Design & Media)	$2,700.00
Bachelor of Science (Physics / Applied Physics)	$3,450.00
Bachelor of Science (Biological Sciences) (Honours)	$3,175.00
Bachelor of Science (Chemistry & Biological Chemistry) (Honours)	$3,149.00
Bachelor of Science (Economics)	$3,700.00
Bachelor of Science (Education) / Bachelor of Science with Diploma in Education	$3,525.00
Bachelor of Science (Honours)	$3,300.00
Bachelor of Science (Information Systems Management)	$3,600.00
Bachelor of Science (Maritime Studies)	$3,398.00
Bachelor of Science (Mathematical Sciences)	$3,500.00
Bachelor of Science (Mathematics & Economics)	$3,300.00
Bachelor of Science (Nursing) (Honours)	$3,500.00
Bachelor of Science (Project & Facilities Management)	$3,000.00
Bachelor of Science (Real Estate)	$3,200.00
Bachelor of Social Sciences (Honours); Bachelor of Social Sciences	$3,300.00
Bachelor of Sports Science and Management	$3,200.00

There are certainly differences with starting salaries for different groups of graduates. It seems like the median income for ITE graduates is about $1600, for polytechnic graduates is about $2200 while for university graduates is about $3400. This is quite a lot of difference for those who are starting out in their career.

Higher income will allow us to save more without compromising on the quality of life we still enjoy. Of course, there are people who are still not able to save even with higher income but that is another issue on its own.

For young people, it is important to invest in our own education to get a better head start in life in terms of the income we earn. Many young people look to investment in stocks thinking it is the answer to a better life but more often than not, it is not the case at all. As seen by the examples of Kimberly and Jonathan earlier on, just saving $5000 more every year will allow us to do better in life even with a much lower investment return for 15 years.

When will investment returns matter more?

Having said that investment returns does not matter as much during our early days, it does not mean we should totally ignore investing in itself. Investment returns will matter more when we have accumulated a substantial sum of money through savings.

Let's look at Kimberly and Jonathan again and extend their life by another 10 years to 50 years old:

This time, Jonathan has surpassed Kimberly as he continues to invest and earns 7% investment returns. But do take note he only surpassed after about 17 years which is really a long time. If Johnathan saves more at the start, he would have been much better off earlier.

Another thing to note is that investment returns are unpredictable. We can never be sure how much investment returns we can make but we can control more on how much money we can save. Increasing your savings rate can have a more massive direct impact on your net worth over the first 15 years.

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5 Lessons I Learnt From Those Who Have Achieved Financial Freedom

Let's be honest, all of us want to be rich. I started my financial journey many years back by finding out how the rich manage their money and how exactly I can do it like them. However, most probably, the information you've been finding is all directed at the super rich. How about common people like you and me? Are we able to have a little more money so we can not worry about it anymore?

Throughout the years, I've had the opportunity to meet and speak to people who have became financially free. Every time I talk to them, I learnt something new and truthfully, its not as complicated as we thought it would be. In this article, I will list down the lessons I learnt from my interactions with these individuals who have managed to get out of the rat race.

Lessons I Learnt From Those Who Have Achieved Financial Freedom

1. Financial freedom is not just about saving money

The first lesson I would bring out is that financial freedom is not just about saving money. Oh wait, do you mean I don't need to save money? That is not true either. I've seen people who have achieve financial freedom as a single person, as a married person and even as a person with kids. When I look at their lifestyle, certainly it is not just about saving money.

Most of the time, we start off our financial journey frantically saving as much money as we can. However, in our younger days, we would realise it is very difficult to save money not because we spend too much but because we have limited income. As our income increases, we would find it easier to accumulate wealth. This brings me to my next point.


2. Low income is not easy to achieve financial freedom

Income is an important equation in financial freedom. To put it simply, if we earn $2000, saving $1000 is 50% of our salary. But if we earn $4000, saving $2000 is 50% of our salary. It is impossible to save $2000 with only a $2000 salary.

Therefore, it is important to focus on upgrading our skills to increase our income. When we are younger, we should focus on getting more experience so our value becomes greater and greater. If we are unable to go up the corporate ladder, there are many other ways to create more income through part time business and freelancing etc.


3. Cash must always be flowing

Another lesson I learnt is about cash flow. The reason why its called cash flow is because it must be flowing. In business, if cash flow stops, the business is in danger. This happened to several oil and gas companies who could not generate enough income to redeem back the bonds they issued out. In our personal lives, this is liken to having not enough income to sustain our lifestyle. This could be due to overwhelming debt because of poor financial management or just pure overspending. It could also be due to not enough income or not enough cash to sustain our life if we lose our jobs.


4. Make your money work for you as early as possible 

This point is about investments. When I speak to those who have achieved financial freedom, they would always say that I'm still young and its the best time to grow my money now. Then, when they talk about investments, its always not about the hot stock or the best tips but about the most boring and routine investments they keep doing over and over again.

The safer the investment, the better it is. That's the wisdom I learnt. It can be so safe that they even recommend putting your money into CPF to get the 4% interest which is sort of guaranteed by the government. For stocks, we just have to buy low, get dividends and sell high. One strategy I've heard again and again is buying into stocks at an attractive valuation, selling partially when its at a fair price and then buying back again when it goes back down. This is like keeping a base of your capital in the stock and then trading around it over time.


5. Live off dividends and you've reached financial freedom

Many have stopped working because they realised they could survive on stock dividends alone. This is the path to financial freedom. We must know that achieving this is not by buying into the stocks in just a few days or a few months. In most cases, this takes many years to build, buying into opportunities when it comes. For example, some of them have stocks in their portfolio which they bought at such attractive price that the dividends they received have covered their initial cost and they are still getting dividends until now.

When crisis strikes, the dividends can be more than 10% when the stock price is very low. This happens for most Reits during a crisis. If the company survives the crisis, the price recovers and dividends increases as well. Its such a good investment that you won't even have to sell the stock ever again.


Financial Freedom Is A Journey

There you go, 5 lessons I learnt from those who have achieved financial freedom. The last and final wisdom I would like to share is that financial freedom is a journey. It certainly takes time and patience to stick with what we have to do. We should never think of getting rich quick as it could land us into a much worse state than what we can imagine.

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Being Smart or Having Luck In Life and Investing

Is it better to be born lucky or to be born smart? Veteran banker Wee Cho Yaw said that the late former deputy prime minister Goh Keng Swee once told him that it is better to be born lucky than to be smart. This is an abstract from an article on Straits Times which I chanced upon and it really made me think about life. If you did not know, Wee Cho Yaw is the chairman of the United Overseas Bank and United Industrial Corporation in Singapore.

Some people are just lucky while some are smart. How smart we are can be practice and trained while how lucky we are is determined by fate. Is this sentence true? I beg to differ and as written by the Straits Times, it gives us some insight on how our luck can be changed for our lives once and for all.

It is better to be lucky in life

Let's dive in deeper on the topic of luck. I believe luck is a force that is created in our minds. There was a period in my life where I felt I had the worst luck. I was lost, had no opportunities and often failed in many things which I did. Be it in exams or investing, nothing seems to go well for me. Then, I decided I should do something about it to change my luck once and for all.

Did my luck change? Yes it did. Today, I feel I am lucky enough or maybe I just choose to count my blessings. Sometimes life may still not go well but I still choose to believe it is temporary. This is an important aspect for lucky people.


How to change your luck?

Studies have shown that lucky people enjoy certain common traits - thinking positively, seizing "chance opportunities", and adopting a resilient attitude when they encounter a setback. This was what was written in the Straits Times article. This resonates with me a lot especially the part on thinking positively. I realised when I changed my mind to think positively, my luck changes as well.

We've all heard about the law of attraction and how when we think bad things will happen to us, it will indeed happen in one way or another. Likewise, if we think good things will happen to us, somehow good things happen later. I believe this is more of a mindset change which allows us to seize opportunities when the time comes. When we believe that opportunities will come, we will realise when it comes and take advantage of it. But when we believe opportunities do not come to us, even if its right in-front of us, we won't even realise it. That's the difference when we have a positive mindset.


Investing requires some luck

While I do not advocate investing as gambling (which requires a lot of luck to win), however, investing requires some luck too. For investing, we have to understand the business and learn how to choose companies wisely. But, whether a company does well moving forward depends on some luck. How the share price moves depends on whether other investors or big players see the value of the stock. When the value is seen, the share price moves up when investors invest in the company. Also, some companies may just win some big contracts which increases their profits by many folds. There is some elements of luck in this as well.


Do you want to be lucky?

Luck can be changed in our lives. If you want to be luckier, start from changing your mindset. It is the crucial first step to see opportunities in your life. If you are facing setbacks now, see it as temporary. Always believe in the best can change the situation you are in right now. Lastly, think positively. This opens up your mind to take advantage when opportunities presents itself.

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Getting Out Of The Comfort Zone For Better Financial Health

Humans are strange creatures, many of us have different personalities and interests but one thing we all like is this thing called comfort zone. This sets the baseline for our life. The thing about comfort zone is everyone's zone is different. This is what makes it so interesting and how we can make use of this knowledge to have a better financial health.

We often hear the phrase "you need to get out of your comfort zone". This is especially true for young people as its the stage of life to explore and learn. However, even for older people, there's this phrase "it's never too old to stop learning". No matter how much we like the comfort zone and being comfortable with where we are, it can be a bad thing because it certainly means we have stopped learning and progressing.

If we want to continue progressing and having better financial health, getting out of our comfort zone is necessary. Let's explore how we can get through this uncomfortable feeling.

Where is your comfort zone?

Our comfort zone is the baseline for our life. This can be how we spend our money, where we have been working at for the past few years and our routines in life which we are comfortable with. The baseline of our life may or may not be good. We may see some problems for our future if we continue living the way we live now but are reluctant to change. This is called stuck in the comfort zone.

Getting out of the comfort zone is not easy. It requires us to change our routines. I've been blogging lesser due to my recent change in job which requires me to learn and adapt to a new environment. I was in my previous job for 6 years and got too comfortable. Taking the courage to get myself out of my comfort zone is not easy but a necessary part for me to progress in my life. The first 2 weeks were hell and it got way too uncomfortable. I was an engineer and now I changed to become a business analyst. I was overwhelmed with all the things I had to learn and change my routine which I've been doing everyday for the past 6 years. But, after awhile, the new routine starts to set in and a new zone will be formed soon.

Getting out of the comfort zone does not just apply to our jobs. What about our financial habits? For some, the comfort zone is to think before spending while for others, the comfort zone is to spend uncontrollably. Whichever is destructive for our future, we should try to get out of that comfort zone and change for the better.

If we always live from paycheck to paycheck with nothing left at the end of the month, this is our comfort zone. It becomes the baseline for our life where our wants become needs. To get ourselves out of this comfort zone, it requires courage and will not be easy at first. But, after awhile, we'll get used to a new comfort zone only if we take the first step to curb spending. From living paycheck to paycheck, we now have 20% savings left at the end of the month and this will become a new baseline for our life.

Secrets of the comfort zone

The secret to getting out of our comfort zone is knowing that this zone is defined by ourselves. After a change, we will get uncomfortable but it gets comfortable again very soon. The standard of that comfort zone also raises as we continue progressing. From being an intern in a company, we move on to taking up small executive roles and proceed to senior roles and finally the management level.

For our finances, progressing in a career will definitely improve our financial health as we have more income. Our comfort level of how we spend then determines where our final financial health will stand. Some of us may be comfortable overspending no matter how much income we have. This is a comfort zone which we may want to change. After being disciplined in our finances for awhile, we will find that we will no longer be comfortable overspending anymore.


How about financial freedom?

I've not talked about financial freedom for a long time on my blog. The past one year focus was on increasing income as I realised my expenses had to increase in the future to be more sustainable. Financial freedom is what many people yearn to have after working hard in our lives. It is the thought that finally I don't have to work in a job I do not like anymore just for the money.

Getting out of our comfort zone ultimately should lead to financial freedom. If we change job and earn higher income or progress better in our career, we can save more money. If we change our spending habits and start saving more money, we can reach financial freedom earlier.

How much exactly to save to reach financial freedom? I wrote some blog posts back in 2014 where if we save 75% of our income, we can retire in 7 years. Here are some other scenarios:

• Save 50% of our income and reach FF in 17 years
• Save 20% of our income and reach FF in 37 years 

Savings alone is not enough. We have to invest and compound the money. For the above scenarios, the compounded rate is 5% before retiring and 4% investment return after retiring. It works out that the amount saved and invested at 5% would have grown to an amount which would cover our current monthly expenses with just a 4% yield. You can read more on how it works here.

Therefore, getting out of our comfort zone to have better financial health requires 3 steps:

1. Getting uncomfortable to progress in our career or business
2. Getting uncomfortable to change our financial habits
3. Getting uncomfortable to learn investing

Both increasing income, saving money and investing requires getting out of our comfort zone. Once we take the first step, it gets easier thereafter. Are you prepared to get out of your comfort zone in the new year for a better financial health? I have to remind myself too.

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Why Its Difficult To Have Happiness In A World Of Consumerism?

I have to admit, the title of this blog post sounds a little too depressing isn't it? Consumerism again, isn't it telling me not to spend too much money to have happiness? Why is life so hard? The fact is, life isn't hard if we know the cycle that makes us unhappy. As humans, ultimately what we do in life is to achieve happiness but somehow, we may unknowingly create unhappiness in our lives instead. Have you wondered why some people are happier than others? Let me show you how does this happen.

Happiness can be explained in psychology. The Mazlow’s Hierarchy of Needs is a popular pyramid diagram which explains the different levels of needs of a human being. The higher we go up the pyramid, the more our needs are met which makes us happy. Here's what the pyramid looks like:

There are five levels:

1. Physiological
2. Safety
3. Love/Belonging
4. Esteem
5. Self-Actualization

Cut the long story short, my point in showing you this pyramid is because unknowingly, humans are stuck at only level 2 of the pyramid which is safety. It is especially true in a world of consumerism where money doesn't seem to be enough always. In fact, people in poorer countries who have the basic food and shelter are happier than people in rich countries. 

The first 2 levels of the pyramid are easy to understand. In the first level, food, shelter, water, sleep are our basic needs. Without these, we will be struggling to survive in life. As humans progress, we get into the second level which is safety. Here, we have a job and we have additional money to do the things we like. The key here is safety where we don't have to worry much about life's basic needs. We then move on to having a family and friendships, achieving more in life in our careers, getting respect from others which boosts our self esteem then to the highest level of self actualisation where we could focus on personal growth. 

Why are we always unhappy?

The world supports us in achieving happiness. In rich cities, everything is quite convenient. We don't just have basic food but exotic dining experiences with different theme restaurants and fine dining food. We have safety in the form of good working environments where we can get a job easily. We have the opportunity to excel and achieve something in our lives so we can be proud of and gain the respect of others. All seems well doesn't it?

However, people in rich cities are still unhappy. They rarely get pass the third level of the pyramid. The pyramid somehow seems stuck at the second level which cause us lots of unhappiness. How could this happen?

There are a few things in life that cause us to be always stuck at the second level of the pyramid. Until we realise how these things in life have been affecting us, we will not be able to proceed up the pyramid to get the happiness we want. So what are these things?

1. Going for too much convenience

Let's face the reality, all of us are in debt or will be in debt one day. Some of us get into more debt because of consumerism. Let me give you an example. Suppose we just started working and received our first paycheck. This adds happiness in our lives as we now have food and also safety in terms of a job and a paycheck. Life is good and one day, we decided its time to buy a house. We look at the houses available and want a house more than just for a shelter over our heads. Maybe we want a house where there are facilities and a security guard. This gives us more security and happiness right? Then, we feel that taking the public transport is too troublesome so we buy a car. A car boost our self esteem and even staying in a condominium gains more respect from others. Friends and family members see that we are successful and we get more happiness.

Credit: https://www.flickr.com/photos/jbhthescots/5227664185

The story above all goes well until the pyramid gets chip off at the safety portion. Yes we have self esteem and love/belonging but there comes a problem when we worry about not being able to pay the bills and not being able to provide the basic food on the table because of the high amounts of debt we have to pay every month for the house and car. This instantly drops us back to the bottom of the pyramid and we stay unhappy until situation improves. 

2. Making our life more complicated

Basic food and safety is what makes us happy and progress up the pyramid but we stay stuck and do not progress. We make our life more complicated by going for the latest gadgets and get sucked into the world of consumerism where we feel insecure and guilty after making an impulse spending. This takes away the safety we have and makes us stay unhappy until we get out of it.

No matter how much we earn or how we think how stable our job is, we will always feel the insecurity with too much spending. Spending within our means is ok but overspending quickly becomes a habit which makes our life very complicated. 

Spending Money and Still Be Happy

Some people spend money and feel unhappy, but there are also people who spend money and still are happy. Money can buy happiness but don't allow money to take unhappiness away from you. The key is to spend the money which you have and not the money which you don't have. I have been spending more money and I feel absolutely happy as I know my finances are still in place. I don't have to feel insecure because I spend some money which I don't have. 

Happy or Not comes from our thoughts

On a parting note, our thoughts actually create happiness or unhappiness in our lives. It takes courage to think positive in difficult times. When we see people around us living a good life getting promotions and progressing well in life, we may feel sad at our own lives which has not progressed much. A happy person will take this as a motivation to say I will work harder to progress more and take it as a motivation to improve but at the same time grateful for what he has now. A depressed person will feel lousy about himself and think its impossible for him to have a better life. Same situation but different thoughts lead to different emotions. 

I continue to spend more and live my life to the fullest while progressing in life. Ultimately, our goal is to achieve happiness in our lives so every decision we make (financial or not) should lead to happiness not in the short term but in the long term. Are you making happy long term decisions today?

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Do Not Focus On Investing If You Want To Be Rich

Over the years, I've received many emails from young readers that they want to learn how to start investing. Most will want to invest because they want to make more money or think it will make them rich. I too started with this mindset but I've come to realise that if we really want to grow our wealth, investing should not be the main focus. What should we focus on instead?

Should we focus on budgeting and saving? If we think about it, how much can we save if we scrimp on that $10 a week? Let's do some simple calculations, $10 a week is $40 a month which is $480 a year. That isn't a lot of savings indeed.

How about investing? If we can get 10% return on a little savings of $10,000, it is $1000 a year. Is this a lot of money? Furthermore, 10% investment return is quite a lot and not easy to sustain for the long term.

Don't get me wrong. I'm not saying that budgeting and saving or investing is not important. It is important but there is one key factor which will make budgeting and saving and investing much easier. This key factor is INCOME.

Why is income important? A person who earns $1000 can never save $1000 but a person who earns $5000 can easily save $1000 or more. The more income we have, the easier it is to save money without compromising too much on our lifestyle. A larger savings for investment will make a big difference on our returns on investment. If we invest $100,000, 10% return is $10,000 a year. This is a significant sum of money. Let's compare a person who has $10,000 investment capital vs a person who has $100,000 investment capital:

Year	Person A	Person B
1	$10,000	$100,000
2	$11,000	$110,000
3	$12,100	$121,000
4	$13,310	$133,100
5	$14,641	$146,410
6	$16,105	$161,051
7	$17,716	$177,156
8	$19,487	$194,872
9	$21,436	$214,359
10	$23,579	$235,795
11	$25,937	$259,374
12	$28,531	$285,312
13	$31,384	$313,843
14	$34,523	$345,227
15	$37,975	$379,750
16	$41,772	$417,725
17	$45,950	$459,497
18	$50,545	$505,447
19	$55,599	$555,992
20	$61,159	$611,591
21	$67,275	$672,750
22	$74,002	$740,025
23	$81,403	$814,027
24	$89,543	$895,430
25	$98,497	$984,973
26	$108,347	$1,083,471
27	$119,182	$1,191,818
28	$131,100	$1,310,999
29	$144,210	$1,442,099
30	$158,631	$1,586,309

Assuming person A and B both invest and compound their money at 10% yearly, at the end of 30 years, person A who started with only $10,000 has $158K while person B who started with $100,000 has $1.58 Million. This example shows that our investment capital makes a big difference.

With this, rather than just focusing on investing, wouldn't it be important to focus on our income as well? The more income we have, the easier it is to accumulate a bigger investment capital assuming we are prudent with our money.

The first $100K savings is important. As seen in the calculation above, a person who has $100K compounded at 10% would have 1.58 Million. Even if its just 8%, it would also be close to a Million dollars in 30 years time.

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What Really Is Contentment?

Last week, many of you may have read a Straits Times article about Dr Lee Wei Ling on "More Than Life Than The Pursuit of Happiness". In the article, she said:

" Happiness, in whatever form one sees it, becomes more elusive the harder one tries to pursue it. That's why my personal aim is much more realistic: All I ask for is calmness and contentment. These at least are partially within my control."

In case you do not know, Dr Lee Wei Ling is the daughter of the late Mr Lee Kuan Yew, who's Singapore's first prime minister and minister mentor. Contentment is not easy to achieve in life. But I can see that most people who are contented are happy in life. They don't compare with others, they don't seek happiness from things that are superficial. There is this inner happiness and peace in those who are contented in life. Don't get me wrong. Contentment is not being lazy. It is also not an excuse to not improve or work hard.

Writing a financial blog is not about the pursue of money. It is the pursue of freedom. I have never set myself out to pursue money but its more about learning how to create a system where money grows so that it takes care of itself later on. This lets me have more time for the more important things in life such as spending time with my loved ones and living a fulfilling life that makes a difference. As the saying goes, why work for money if you can have money work for you? Contentment is part of the freedom equation. If we keep seeking more things or more money in life, there will never be an end. We will never achieve freedom even if we work all our lives if we live like this. It is not wrong to be rich but to be blinded by material things will leave us feeling empty.

Anyway, I saw another article written by Dr Lee Wei Ling which is so profound but yet easy to understand. What do we really seek in life? Read on and find out more...

Article written by Lee Wei Ling

In 2007, in an end-of-year message to the staff of the National Neuroscience Institute, I wrote:

‘Whilst boom time in the public sector is never as booming as in the private sector, let us not forget that boom time is eventually followed by slump time. Slump time in the public sector is always less painful compared to the private sector.’

Slump time has arrived with a bang.

While I worry about the poorer Singaporeans who will be hit hard, perhaps this recession has come at an opportune time for many of us. It will give us an incentive to reconsider our priorities in life.

Decades of the good life have made us soft. The wealthy especially, but also the middle class in Singapore, have had it so good for so long, what they once considered luxuries, they now think of as necessities.

A mobile phone, for instance, is now a statement about who you are, not just a piece of equipment for communication. Hence many people buy the latest model though their existing mobile phones are still in perfect working order.

A Mercedes-Benz is no longer adequate as a status symbol. For millionaires who wish to show the world they have taste, a Ferrari or a Porsche is deemed more appropriate.

The same attitude influences the choice of attire and accessories. I still find it hard to believe that there are people carrying handbags that cost more than thrice the monthly income of a bus driver, and many more times that of the foreign worker labouring in the hot sun, risking his life to construct luxury condominiums he will never have a chance to live in.

The media encourages and amplifies this ostentatious consumption. Perhaps it is good to encourage people to spend more because this will prevent the recession from getting worse. I am not an economist, but wasn’t that the root cause of the current crisis – Americans spending more than they could afford to?

I am not a particularly spiritual person. I don’t believe in the supernatural and I don’t think I have a soul that will survive my death. But as I view the crass materialism around me, I am reminded of what my mother once told me:  ‘Suffering and deprivation is good for the soul.’

My family is not poor, but we have been brought up to be frugal.. My parents and I live in the same house that my paternal grandparents and their children moved into after World War II in 1945. It is a big house by today’s standards, but it is simple – in fact, almost to the point of being shabby.

Those who see it for the first time are astonished that Minister Mentor Lee Kuan Yew’s home is so humble. But it is a comfortable house, a home we have got used to. Though it does look shabby compared to the new mansions on our street, we are not bothered by the comparison.

But I personally think the hard times will hold a timely lesson for many Singaporeans, especially those born after 1970 who have never lived through difficult times.

No matter how poor you are in Singapore , the authorities and social groups do try to ensure you have shelter and food. Nobody starves in Singapore ..

Many of those who are currently living in mansions and enjoying a luxurious lifestyle will probably still be able to do so, even if they might have to downgrade from wines costing $20,000 a bottle to $10,000 a bottle. They would hardly notice the difference.

Being wealthy is not a sin. It cannot be in a capitalist market economy. Enjoying the fruits of one’s own labour is one’s prerogative and I have no right to chastise those who choose to live luxuriously.

But if one is blinded by materialism, there would be no end to wanting and hankering. After the Ferrari, what next? An Aston Martin? After the Hermes Birkin handbag, what can one upgrade to?

Neither an Aston Martin nor an Hermes Birkin can make us truly happy or contented.. They are like dust, a fog obscuring the true mean ing of life, and can be blown away in the twinkling of an eye.

When the end approaches and we look back on our lives, will we regret the latest mobile phone or luxury car that we did not acquire? Or would we prefer to die at peace with ourselves, knowing that we have lived lives filled with love, friendship and goodwill, that we have helped some of our fellow voyagers along the way and that we have tried our best to leave this world a slightly better place than how we found it?

We know which is the correct choice – and it is within our power to make that choice.

In this new year, burdened as it is with the problems of the year that has just ended, let us again try to choose wisely.

To a considerable degree, our happiness is within our own control, and we should not follow the herd blindly.

The writer is director of Singapore’s National Neuroscience Institute. And also Lee Kuan Yew’s daughter…

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Related Posts:
1. A generation of instant gratification - The cause of unhappiness

The Why, What, How In Our Journey To Financial Freedom

It has been quite some time since I wrote about financial freedom and more specifically my journey towards it. Over the years, I realised there are many different views towards financial planning. Some would think it is not necessary to plan ahead and don't have to worry  too much about money. Others will think its important to save money and plan ahead. Ultimately, what I strongly believe in is different mindsets will lead to different outcomes.

For example, if a person thinks his retirement will be taken care of by the government or his children, most probably this person will not plan for his own retirement. I would say everyone worries for their own retirement and whether they have enough to live during their old age but how they see that the retirement is provided will determine what they do now. If they think that other people will take care of them during retirement, what they would do now is nothing.

Financial freedom or financial independence is a different form of retirement. It is not about retiring from work and do nothing but its about making the best out of our lives. In essence, it is about living life to the fullest. More often than not, we humans focus on the what and how of our lives. What can we do to make more money? How can we achieve financial freedom? But, before we focus on the what and how, we should actually think about the "why". Thinking about the "why" will give us a sense of purpose and meaning of what we are doing now.

Why do we work? Why do we want financial freedom? Why do we want to live our lives? Knowing the "why" clearly in our minds will steer us in the right direction. If we just know the what and how, we will start to feel emptiness in what we do at some point in our lives.

I saw a video on the why and what we do which will show you why thinking about "why" we do is important. Check this out:

Comedy is "what" I do
You gotta see WHY this video is AMAZING
Posted by Michael Jr. Comedy on Friday, September 18, 2015

If you know your why, your what has more impact because you're walking in or towards your purpose. This made me think about why I started this blog.

For readers who are new to my blog, I actually started SG Young Investment back in 2013. It has been almost 3 years since I started writing. Back then, it was the busiest period of my life where I was juggling between full time work and part time studies for my degree. It took me a long time to decide which course I want to take. I made a decision why I wanted to go back to studies after working for about 2 years. My motivation was not the certification which I would get, it was the things that I could learn during the course of study.

I was interested in economics and doing research. Throughout the course, I had to do lots of research and reading up and also writing essays after essays. I realised my love for writing and started this blog. But, the main motivation of starting this blog is to reach out to more people on the importance of financial planning. I always feel sad when I see people or families who get into financial problems. All these can actually be avoided if we just have a little knowledge and live our lives more prudently. More than that, I actually believe in financial freedom and financial independence. I believe we can live our lives to the fullest and do what we really like. I don't want to live my life doing what I don't like just for money.

That was the essence of why I started the blog. I still hope to reach out to more people and make an even greater impact. What and how I do has more purpose because of the why. Do you know the "why" in what you are doing in your life now? If you are lost in what you do, consider taking some time to think about the why in what you do. You may just find the purpose to live your life to the fullest.

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