Skip to Content

How we can Tackle Financial Insecurities

A sub-conscious fear and confusion about some things related to money.

That is the thing I can clearly defined as I hear people talk about their concerns. Or when my colleagues shared with me what their clients tell them or what they managed to detect.

I have less of this problem currently. I think fear used to plague me more. I didn’t think it was a lot but it was sub-conscious. That is why financial prudent folks decide to rank wealth building rather high in their list of priorities. We either try hard to alleviate our fear or something that makes us feel good.

Early Retirement SG (ERS) has a good post last week. In taking care of mental health, He wants to tell his readers that the solutions to a lot of our problems is not by what we do outside but whether we are able to find the answer on the inside.

The main example he use is financial security. It is a good example because I think it plague almost all of us. Whether you admit it or not.

So this post explored a little more on financial insecurities and how we may be able to better solve it in little ways.

These Insecurities Plagues the Wealthier Folks Too

ERS says that he knows there are people with $1 million that does not feel financially secure. He explains that not feeling secure is an internal thing. You cannot be secure financially unless you look inside.

MoneyOwl’s CEO Chuin Ting informed us of this Bloomberg article that underlines this financial security issue. Advisers share their tale of how difficult it is, to get their rich clients to spend money.

If well-off retirees are more frugal than necessary, they end up denying themselves the fruits of a lifetime of hard work. Their heirs eventually benefit, but the vitality of the American economy suffers. “Wealth is getting more and more concentrated among households that are averse to spending it,” says Matt Fellowes, a former Brookings Institution fellow who’s founder and chief executive officer of United Income, a retirement planning startup. “It’s trillions and trillions of wealth that is not benefiting anyone except asset managers.”

Nervous Retirees Are Too Scared to Spend

I am surprised they managed to make this into a reason for greater wealth divide.

“The reason they don’t spend in retirement is because they worry about running out of money,” says David Lau, founder and CEO of DPL Financial Partners. “You don’t know when someone is going to die, you don’t know when someone is going to get sick.”

Nervous Retirees Are Too Scared to Spend

This is very real. It would plague the poor on a daily basis. For the rich, it is fleeting. Some days you will never think about it. Then on certain days, you will wonder about it.

When someone mentions to you that you have a lot of money, you will tell them that it is not really true. There are so much uncertainty in this world.

  1. Your parents healthcare can be on you
  2. You may become disabled
  3. The stock markets are so volatile
  4. Your kids can turned out to be more of a liability than an assets
  5. Inflation is so high nowadays especially for healthcare costs

These are the uncertainty in not just the rich people but also the middle class. You can add a few more and minus some of these, since our priorities are different.

Never Spending the Principal is a Sign of Insecurity?

The Bloomberg article tells us that one of this fear is the notion not to spend your capital:

Many clients think they’re doing something wrong if they spend money in a way that causes portfolio balances to drop. “Never touch the principal” is classic advice that’s a relic of an era of double-digit interest rates, when even conservative investments could produce substantial income. Despite ultra low interest rates, advisers say it can be difficult to persuade retirees to tap savings rather than just live on their tiny bond coupons and dividend checks. “Wealth is really a source of identity for people,” Fellowes says. “By spending their wealth, they’re losing some of their identity. There’s an aversion to seeing their balances go down, even if it’s excess wealth” that they’ll never need.

Nervous Retirees Are Too Scared to Spend

This is pretty common. In how much do you need to be financial independent article, I explain how much is enough based on this framework.

  1. Build up a portfolio of dividend paying stocks
  2. Make sure your dividend income can pay for your annual expenses
  3. Your portfolio of stocks will grow to keep up with inflation
  4. For example, if your expenses is $25,000 and your portfolio of dividend stocks can give a conservative and sustainable income of 4%, then you will need a portfolio of $625,000.
  5. Your principal is protected. It will not run out.

I went through this phase of finding that perfect framework of spending my wealth in a sustainable manner. Come to think about it, the main reason I would do that is due to insecurity.

There is a big part of us worry that the money will run out. For some, there is a bigger fear that their next generation will not have this wealth and because of that, they end up worse off, versus their friends.

My research shows that the dividend income model may be a little flawed. The primary reason is that we estimate too perfect of a future. That usually do not happen. However, this is a story for another day.

To be honest, I wonder how many people could say “This money is not mine. Eventually we are all dead. We only have one life. So why not take the money and use it in a way I think is meaningful to me. Money will work itself out.”

One of my university mates and good pal used to tell me that when we started working. He is right. But right now, 15 years later, insecurity is breeding within him and his wife.

That is life for a lot of people. We go through this cycle of YOLO and Insecurity, YOLO and Insecurity.

Lifestyle Security is What We Seek

Sometimes I think we all benefit by ERS being early retired, not working and writing out his thoughts.

Because some of these things, we seldom hear it anywhere else.

ERS makes the statement :

When people talk about financial security, they usually mean lifestyle security. They want to maintain some form of lifestyle. So… typically, it’s not really ALL about the money. IF you can maintain the same lifestyle WITHOUT money, that’s also ok right?

BUT we lived in a world where the Government says, “Ok, we’ll take care of your food, lodging, medical expenses, if you earn more that’s your bonus.”
There will still be people who feel insecure, although, by right, that shouldn’t make sense.


In a lot of ways he is right.

In the financial planning space this is what we try to balance for our clients often. They will come in with that expectation to secure their current lifestyle. Say they need $200,000 a year.

And they wants this plan to be REAL secure.

So the figure usually comes up to around $6.5 – 7 million. Some of us can be real productive at work. But when you see such a figure, it puts you down. And your plan is to have this within the next 10 years.

This is similar to the project management problem: You can only have 2 of fast delivery, quality and cost.

The need to protect their lifestyle and be real secure is real for a lot of people.

The Solution… I Think… for Now….

At 39 years old, I am not going to say I figured everything out to say this is the solution.

I worked this problem out enough that I think I have a framework or list for you to explore.

Here it is.

1. Reflect and List Down a List of the Financial Fears that Plague You

ERS is right. The thing you are searching for is inward.

But to help yourself, you need to find these “monsters” first. You need to prioritize time to reflect. Sometimes, it is not that. Maybe always have a list in your phone. Whenever you come across these concerns, list them out.

I would give you a trigger list for a start:

  1. Your wealth is not enough for _____________
    1. lasting for 1 month, 3 months, 1 year, 5 years, 30 years, perpetuity
  2. I have wealth but I am worried about___________
    1. Me dying and what will happen to my family
    2. Can I sustain my parent’s future health cost
    3. Not reducing the quality of life

If you still say you do not know, then you better sit down with someone you trust, that is a good critical thinker, asks good questions to try and get this out.

2. Find the Framework or Models to Solve These Financial Insecurities

For each of these financial worry, there are usually a money value that you can assign to it.

For example, you do not know how much you need to be financially secure.

I would say KNN, you have been reading this blog long enough, you should notice a few variation of looking at it. Collate your expenses. Build wealth so that it is large enough to cash flow to pay for the expenses.

How much is more secure?

  1. There is the conservative dividend paying model.
  2. There is the withdrawal rate model.
  3. There are the variable withdrawal rate model.
  4. There is the endowment model.
  5. You can also figure out roughly how to generate cash flow perpetually.

The idea is that these topics are rather popular and prevalent. If this is a worry that is big enough, then you should prioritize to go down this rabbit hole and seek out how much you need.

That is one of the main way I solved a large part of my insecurity. At least now I know “damn this is a big figure” or “OK I am not so far off”

We want to know where we are on this ruler.

You will tell me but some of these things are so uncertain. Like healthcare cost. Like whether your parent will have dementia and how long they are going to live.

For most things, you can put a value to it.

Don’t know the inflation rate of medical cost? You can work out the present value of a stream of expenses on 3%, 5%, 7%, 10% inflation rate. For different duration.

If you are so insecure, then take the largest one. 10% inflation and for 40 years. This is a future financial liability. Save enough of this Sinking Fund.

For all financial insecurities, there is usually a value attached.

3. Reflect upon these Financial Insecurities

Assigning the real values removes uncertainty and confusion. But it does not solve the insecurity.

ERS is right. You have to look inward.

You might be looking for lifestyle security. But how much of this lifestyle to you really wish to secure? All of it?

You have just listed out 10 things you are worried about and here are the costs. Realistically can you save and fund all these 10 financial liabilities?

How do people with less money tackle all these things? How did people with NO money tackle these worries?

Some of these questions, take you down some mental rabbit hole and hopefully, you come out of these to a better place.

Your Network is More Important than Your Net Wealth

I reflected upon my experience building wealth and learning about spending wealth and recently, I lean towards this idea.

There is the net wealth you need to build up. But your network may be far better.

I dunno how to describe it. Maybe this will be another post. But it seems that how you carry yourself, and how open you are to create deeper relationships will allow you to have a safety net.

  1. People you help to take care of little chores. They help you take care of little chores
  2. People that refer you for work. You do the same if they need it
  3. People show you where to get food and supplies
  4. People giving you medical help

If you rely on money solely, it is going to be expensive. Perhaps not enough. But you also can’t depend on network alone. You also need money.

Figure out Enough then Let it Go, Let it Flow

My solution is to figure out the framework and model to look at these money insecurities. Then look inward.

After that, let it go after you know you have explored enough. ERS is also right. The more you look at this, and trying to seek the holy grail, the more fxxked up it feels.

But I do caution: Most people never found these models that help them quantify these financial worries.

But they choose to let it go.

This is not Zen. This is postponing the inevitable. You may have a financial fall out big enough that you could have easily prepared for.

Going down this financial independence rabbit hole for many is a journey to tackle our insecurities. For most, we emerge in a better place. But many still have a lot of worries.

In that case, maybe the answer is not financial anymore. You might need more spiritual help.

I invested in a diversified portfolio of exchange-traded funds (ETF) and stocks listed in the US, Hong Kong and London.

My preferred broker to trade and custodize my investments is Interactive Brokers. Interactive Brokers allow you to trade in the US, UK, Europe, Singapore, Hong Kong and many other markets. Options as well. There are no minimum monthly charges, very low forex fees for currency exchange, very low commissions for various markets.

To find out more visit Interactive Brokers today.

Join the Investment Moats Telegram channel here. I will share the materials, research, investment data, deals that I come across that enable me to run Investment Moats.

Do Like Me on Facebook. I share some tidbits that are not on the blog post there often. You can also choose to subscribe to my content via the email below.

I break down my resources according to these topics:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I used to work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for the first meeting to understand how it works
  8. Havend – Where I currently work. We wish to deliver commission-based insurance advice in a better way.

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Tuesday 27th of August 2019

We may have many worries but we can reduce one thing less to worry at a time over a period of time. We will be better off ahead of our times.


Tuesday 27th of August 2019

this is profound in itself.


Tuesday 27th of August 2019

Hi Kyith, Thanks for the backlink and reference. Glad you liked that post :)



Tuesday 27th of August 2019

Hi ERS, Thanks for the great post and visit!


Tuesday 27th of August 2019

Hello there,

What kind of spiritual methods do you use?


Tuesday 27th of August 2019

Hi Andreas, I would say I have not used any, but for most of my friends, when they couldn't figure out these things based on the usual means, they have to try seeking guidance from their faith.

This site uses Akismet to reduce spam. Learn how your comment data is processed.