One of the quote that I remembered most fondly from last year was posted by United States financial blogger Financial Samurai about saving money.
If you don’t find it painful saving money, you’re not saving enough. If you’re not sweating at the gym and your muscles don’t feel sore the next day, you might as well go eat a double cheeseburger with a milkshake and fries because you’re just wasting your time. The same goes with saving.
I think he wouldn’t made this quote for no reason. This quote was made, possibly due to the culmination of what he observed, heard about and interact with people.
The sentiments is that he felt people are not trying hard enough.
And you might be thinking: Hey everyone have their own set of baggage in life, who is he to dictate how much I should spend?
And if that is your thinking, then the question is why are you searching for some “help” about saving money?
A lot of times we hope that the solution to our problem is not so drastic, and that it is something we can work with.
In How Much should You Save Each Month in Your 20s, I brought up what some of you are really interested in, when you chanced upon an article such as this:
I want to spend but I want to do the sensible thing, just tell me how much percentage of my take home pay I should save, so that I look like I am somewhat of a responsible person.
And I guess this is what he seems to observe as well.
The idea is not the absolute amount saved, a whole $1 million, or a large sum that would make the 4% safe withdrawal rate work.
The question is whether we pushed the sport of savings hard enough until you start to feel the strain?
When you pushed hard enough few things happen.
You know a little more of how the edge feels like. And you know a little bit more about yourself, in relation to what you really want.
This becomes an anchor point in your memory, whether you really need to do something like this.
Most of all it might generate that internal conversation with yourself about why are you subjecting yourself to things like this.
This push has a limited duration.
It is one year.
And after one year, you could choose to reflect and think what you learn about it.
1. Try Channeling 70% of your Disposable Income to Building Wealth
This should be painful enough and from what I gather very hard to do for a lot of people.
Put 70% of your money into building wealth:
- Paying down your debt aggressively
- Channeling them into some kind of investments
- Put away in high savings account and do not touch
There could be some conclusions when you tried to do this:
- You tried hard to work on 30% and you realize that it is just not possible and give up
- Something similar to #1 but you realize by stepping down to 60% it is very livable
- You realize that doing it long enough and it does not hurt so much
- You realize how tough it is to explain to your friends why you cannot join a lot of the activities
- When you revert back to your old lifestyles, you suddenly realize how little luxury feels like (now that you have more free cash flow)
A key benefit is that this experience is anchored in your memory.
In the future, if you suddenly incurred $100,000 in debt, due to some mistakes such as becoming a guarantor for a friend and needing to pay back this amount of money, you know its doable, because you did that once in the past.
2. Try doing something Non Finance that is Hard
Actually, if we are in the corporate world long enough, we would have pushed the limits a lot.
In my early days at work, we went three days without going home, trying to frantically set up a system with limited resources.
We weren’t familiar with the systems. The documentations was not complete. And we cannot bring in additional human help. We cannot use Google. We tried, and when we are tired we took a chair, sit on it and slept, woke up and then continue to try. When you are the most senior in the food chain doing these technical work, there are not a lot of people that could help you.
I am sure some of you will have something worse to share.
So we live past those times and both me and my ex colleague then probably have that burned into our memories.
It was burned in to our memories because it was significantly tough enough.
That episode have a severe influence on me regarding documentation and keeping a knowledge base. It would triggered me when I see someone going through some really tough technical shit and how to make the environment more conducive for problem solving.
Every problem that comes after that, it would always be measured against that severely painful situation, and often it will feel less bad and doable.
I have this idea that those that are married, and have children, they tend to be better managers because of the things in life they have to overcome:
- You have to deal with personal conflict
- You need to deal with family conflict
- Your money is scarce and you need to think about what to do with it
- You need to endure sleepless nights, and then go to work, when your child is infant
Basically you have to cope with a lot of little failures, little distresses, little complications and thus you are more experience in dealing with things the right way.
In contrast those of us who are old and single, we have some quirks that make us problem managers.
Building family can be tough, and that is why you learn more things than not taking the plunge.
What are the More Painful Things that you Might want to Embarked on?
One of the things that requires the most endurance was going 3 days without food. And the lesson learn for myself is that it ain’t so bad and rather doable.
You could lose a lot of weight (even for a skinny guy like myself!). My conclusion was that doing a 1 day fast every 30 days probably is not hard to do, if its a good reset days like what a reader shared with me.
However, this is more of an article to trigger you, to try something.
And I hope that you can share with me some of the things that you have been thinking of doing, but are on the fence about.
Here is a good trigger list to help:
- Every time, I see my equity portfolio go down by 5%, I re-balance more into equities
- Turning away from food and shopping when I feel my self worth being questioned by myself or someone
- Raising the saving rate by 3% every month. Your savings rate should be 36% at the end of the month
- Eat from only 3 designated stalls in your local working food place for 1 year
- Don’t drink Bubble Tea for 6 months
- Whatever that you did not spend, put them into your HDB mortgage payback for 1 year
- Don’t eat grains, sugar and flour for 1 month
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Here are My Topical Resources on:
- Building Your Wealth Foundation – You know this baseline, your long term wealth should be pretty well managed
- Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
- Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
- Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
- Free Stock Portfolio Tracking Google Sheets that many love
- 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
- New 6-Month Singapore T-Bill Yield in Early-December 2023 Should be Slightly Higher at 3.85% (for the Singaporean Savers) - November 30, 2023
- Have the World or Emerging Market Healthcare Stocks Outperform the World and EM Index? - November 26, 2023
- Retirement Spending Can Vary from 25% to 100%. Not your usual 2% to 3% a Year. - November 23, 2023