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If I make $25,000 per month, I cannot guarantee I will make sound money decisions

There is a recent article on the Straits Times profiling some of the more senior PMETs who earned quite a high salary, unable to find a matching job and have to step down the jobs they are looking for. You can read it here.

A head of Asia sales in an European bank earning $25,000/m will have to step down to a $3,000/m commissioned based property agent job.

A former general manager in an oil and gas  company earning $15,000/m will have to step down to a taxi driver pay.

Some how I felt that the Straits Times like to highlight these bombastic examples. For those who started working in the last 5 years, they should see the newspapers in 1997 to 2002. This, and the TV show this every other day. It really makes the morale low for everyone.

Come to think of it, its been 12 to 13 years since that period. For me, it was one very challenging period. Not just a lot of well earnings 40 to 50 year old folks lost their job, but many businessman saw their business taking a big hit.

Singapore is in an unusual period. For a long while we have exceptional low unemployment rate. The unemployment rate is what ties everything together. The low unemployment, making it a employee’s market, creates much optimism. With that folks are optimistic about their future, optimistic about what they can spend on and optimistic of servicing property.

Take away the employment, and you should see everything unravel.

Nowadays, you do not need just a general manager or a regional head to earn that kind of salary. My friend who sees these stuff tells me there are more 25 to 35 year old earning this salary.

I think they better build some margin of safety in the life that they live. They better not spend every last penny and make some sound decisions with their vast salary.

Its not always easy making sound money choices

There are many folks commenting that, hey they earn so much! If it was me I would be financially secure with that salary!

I would say… its not so simple.

If you were them, you would be too busy. To be such a performer, you would have to immerse yourself in your job. You would have to mingle well with your peers.

When responsibility rises, so does the expenses.

To make up for the hectic life, you need to pay for it through morale boosting entertainment and holidays. You deserve it. In fact, if you do not have enough of it, you will be burnt out pretty fast.

You are also too busy with what you paid for, that you failed to pick up the module of financial responsibility and sound wealth building.

For those who did, they would have bought a property for investment purposes. However, not everyone buys with the most fundamentally sound ideas. They do not observed value, they erred on how much risk they have undertaken, they did not build up contingency.

What was a ‘passive income’ stream became not so passive, fraught  with work of handling tenants, finding tenants and also realizing their rents during bad times cannot cover the mortgage.

Majority makes poor financial judgments

It does not mean that if you do not make that much, you won’t make unsound financial decisions.

From my observation, it is whether:

  1. Folks are brought up in an environment or have mentors that inculcate the right monetary values to the person when younger
  2. Inquisitive and hardworking to pick up financial knowledge at certain point of their life
  3. Learn enough from their money related jobs to do more of the right money stuff than the wrong ones

2 for me is the most important, and for those who have  2 and establish systems/processes and habits, they are the ones who are likely to earn a lot or little, but still do better.

From my observations, once the low unemployment string is cut, these newspaper articles will be more prevalent.

Let this be a warning to self

Many would think that because they are high performers, they won’t get cut. They are in the civil servant industry, they won’t get cut.

Hell, I have heard folks mentioned the reason  why they stay in my company is because we don’t cut people. Sometimes, just because you didn’t hear it doesn’t mean it didn’t happen. You probably didn’t stayed long enough.

Even if you did, you probably didn’t believe it will happen to you.

That is probably when you will get the most horrific surprise.

I am approaching that age of 40. Still 5 years away, the age where I become more expensive then the peers, and if I do not add enough value, the position gets wobbly.

Perhaps its not the time to think about such negative stuff, but to learn to be glad that I have a job, make sure I have portable skill sets and not take over excessive risks with life.

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Saturday 1st of August 2015

Hi Kyith

I believe highly paid PMET got used to the level of wages, the lifestyle and benefits that comes with it. People tell me that in good times, entire private banking/relationship manager teams would go watch shopping or check out the car dealers after bonus day. Anyone in that situation would feel invincible. The world is your oyster.

It’s easy to get used to the fine dining, quarterly holidays, 5 star hotels, and other finer things in life. We put the golden handcuff on ourselves. When shit hits the fan, the world around us collapse.


Sunday 2nd of August 2015

Hi Chewyc,

I heard of that as well. And to be honest, you cannot not join them all the time and not affect your career, unless you really deliver the goods so damn well.


Rolf Suey

Thursday 30th of July 2015

Hi Kyith,

This is so true. Career success cannot be linked with sound decisions making in life.

Moreover those are not really career success as career success of 15 or 25k per mth needs to be sustainable over a long period of time. Otherwise it can be very well just "fool of randomness!"

Therefore it is more inner self developments over years that equates sound decisions. The art of thinking for yourself and your life is maybe more important, which once it is in place, the rest will somehow falls in place.


Sunday 2nd of August 2015

Hi Rolf,

I think career success breeds wealth. A successful career is one that they end up still employable. Wealth and Career successes does not always come together.


Thursday 30th of July 2015

I think this has to do with our perceptions of a successful life. A lotta Singaporeans are generally exhibitionist consumers so their purchasing habits leave little room for savings/investments. One of the things I'm thankful for is that in the first few years of my career I was broke, and learned how to live very frugally, such that when I landed a decent paying job years later I never knew how to spend my money. I think discipline is the key to any success, and whoever earns 25 grand a month and still struggles needs to re look their priorities. You've been upkeeping this blog for some time with plenty of material highlighting sound financial decision making, so I'm sure you're doing fine.


Thursday 30th of July 2015

Hey ladykiller, thanks for stopping by!

I think it's still the difference in the support structure, independence of a person. I can think of folks in the same position as you starting out but failed to learn that lesson because the parents took pity of them or dote on them.

But I think sometimes the biggest gift in trading and investing is failing first, because it lets you know reality, or that you are not bullet proof. I think at this point the brain have expanded so much that I should have an idea to get by, but had I not been unhappy and despondent in the last year of university, things might go smoothly and I didn't gain this shit, I wouldn't even learn to manage 10k

GP blogger

Wednesday 29th of July 2015

Nice article. In today's brand conscious society value is lost under price tags. we need to rediscover value. this holds true not only for investments & money but in all aspects of life including relationships & friendships.


Thursday 30th of July 2015

Hi Gp Blogger,

very well said.

Adrian Tan

Wednesday 29th of July 2015

Excellent article.

Indeed something must be wrong that you can't be in a better situation after years of making $25K/month. And this isn't counting the bonuses.

I know people who made far lesser and invest their savings in properties. They are already semi-retired now.


Thursday 30th of July 2015

Hi Adrian,

thanks for the support. having less than 25,000 can live a good life and instead of lamenting not having that much its better to look at what you can work with ahead. seems to me property is the best examples as always.

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