I decide to use my Wednesday to post some short thoughts and answers, away from my usual detail weekend articles.
These are things that I have come across but it’s not large enough to be a topic on its own. They can be finance, or non-finance related.
By doing it this way, it will also allow readers who do not wish to listen to a lot of these stuff to automatically filter them away. It will allow you to have an idea about some of my inner thoughts though.
You can let me know if you like this content to continue.
Do Financial Bloggers Focus Only on Saving Money. What about Enjoying?
This week I saw one question pop up on Seedly Facebook Group Q&A whether financial bloggers focus only focus on saving money. The person asking the question wanted to start a family before 30 years old with his/her other half. That we should not enjoy only in our later years.
This is the phase where our energy is highest.
I think this question, is more like questioning whether us bloggers are doing the fundamental sound things.
It is likely that he/she observe us and think that all we talk about is to delay gratify and deep down we are all suffering badly.
We talk about savings because if you wish to achieve a large amount of wealth fast, a large part will either come from:
- Successful Entrepreneurship e.g. trading by turning $20,000 into $300,000, doing an online business that creates $4500/mth in net income
- Saving a large % of your relatively high disposable income
Due to the short time period, the compounding effect usually take a backseat.
We are financial bloggers and we cannot run away talking about the only few ways that you can build your wealth fast.
If you wish to not be short changed, but live a fruitful life early, you can do that easily.
Have your wife and yourself be in high paying jobs, so that after expenses, your savings rate is still above 60-70%. In that way you can build wealth fast and still enjoy a good life with your loved one.
Life is unequal but you can try and move up to reach your desired kind of life.
Now let me challenge you with something: If we do not spend money does that mean we do not live a fruitful life?
A lot of times I been told you should go out travel the world, then you will live a rich life. Most probably think that is a good rich life because they experienced it and seen the virtues of it.
I went on holidays in the past. I came back. And I realize that my life happiness did not increase or stayed elevated.
I went out with some friends, talk nonsense for 4 to 5 hours and spend $10 on a meal and I enjoyed it a lot but my life happiness also do not stayed elevated.
What is wrong there?
I think we overestimate money and happiness a lot. A lot of times we just wished for some mundane satisfying kind of life. Better life satisfaction seems to be linked with autonomy (having adequate freedom in doing things), mastery (improving and being more proficient in areas of work) and purpose.
I think if you find someone you love and decide to have a family together that is valid.
Despite what we say about how costly having children is, you only lived one life and if you don’t enjoy this process then why are we put on this earth? To learn things, get a good paying job, build wealth for 15 years then be happily retired. And then do what?
The point is that, when we don’t spend money, a lot of things are closed off for us, but it doesn’t mean life is ordinary. If you decide to spend a lot of money, it might not mean you will remember this as a rich life.
There are some things you spend money on that makes you happy and there are things you spend money on that you think makes you happy but in reality do not. The second one is the one that kills a lot of wealth slowly over time.
The strong folks master the above pretty well.
So the result is that they lived a very fruitful life yet they still build wealth. If you become a lemming you get neither.
What we do is try to find the middle ground. We are not sad people. If we become sad, we just pivot. Sing Heng in his AMA for Seedly or in his blog post shared that after he expanded his income he finds more satisfaction spending a little more. So we adjust accordingly.
Fundamentally, we know the extreme ends of spectrum and move between the two. It is not surprising that we realize we are uncomfortable and so we change our opinion.
There are also other writers who write mainly on stock investing, not just on personal finance.
On Bench-marking your Income, Expenses and Quality of Life for Your Own Family
Mr 15 Hour Work Week wrote a post about their benchmarks for their income, expenses, quality of life.
I think we often don’t have an idea whether we are doing well or not. So we end up following others. So when we are able to articulate and write down something like this it means we have thought about the variance in income, expenses and quality of life out there, versus our own situation, and able to articulate our own benchmarks.
When a couple worked on these ideas together, they try to be on the same page (unless this is Mr 15HWW fantasy and his wife does not share it HAHA)
If the benchmark is too easy, the couple tend to lean towards more conservative. I think I am like that more. I would rather err on the safe side.
For some, the benchmark is a little out of the comfort zone. It enables us to test ourselves and move towards it.
For example, if you make $3,000/mth then targeting to find a job that makes you $5,000/mth is a good target. So in terms of income, you could say that in 10 years’ time, my income should reach $75,000/yr (to balance out the early year’s lower income)
Quality of life is difficult thing to measure tangibly. I think Mr 15HWW idea is that he feels his quality of life is in higher percentile. And he cites many little qualitative factors:
- Able to choose whether to step up or step down his work and therefore his income
- Controlled stress level
- Breaks in between work
- Enough money for little comforts in life yet able to continue to build wealth in a coasting kind of way
On Developing Your Own Safe Channel for Personal Development
Now I have no freaking idea what is a safe channel, whether it is an existing term or a new word. It happens to be a new term.
The idea is to do something that is as if it’s your personal TV channel that is really safe.
The characteristics of the channel are:
- Developed some kind of skill through a regime of deliberate practice
- No external party should assess your proficiency in this skill (meaning you don’t need to pass a certain PMP or CCNA exam)
- Developed primarily for the purpose of having fun and goofing off
Now what are some safe channels?
I think learning about wealth building may not be a safe channel. You need to spend some effort to read, to think, to execute some wealth building ideas, then see the results, assess and reflect, and change your plan. And you need to do it over and over again in the hopes to get better. Usually people can assess by your net worth, by your portfolio’s internal rate of return or TWRR. However, no one is going to pass and fail you. (Well they could by blatantly saying you ‘failed’. This is where wealth building might not fit as a safe channel). To make matters worse, wealth is something of a serious topic and people’s lives are invariably tied to their wealth so its hard to say you enjoy watching your portfolio get cut in half or create humor out of it.
That said I find there are many stuff my friends do that is their SAFE Channel, and eventually it might become their side hustle:
- Learning to grow urban garden of vegetables. Eventually end up helping business set up their roof top garden and selling fertilizers to them
- Converting their love for games with economics, which eventually become creating games such as Wongamania and Debtzilla
- People start making videos on YouTube, which wasn’t so well done. Then along the way they learn how to polish it up and help other people produce their video
- Some folks have a problem and went down the rabbit hole to learn about probiotics
The last one, the person might not create a business from it, but it is a safe channel because they build up a competency over a duration of time and they really gain satisfaction from it.
I think developing safe channels are what makes people happy (going back to the first question), or makes their life more colourful. It involves mastery, autonomy (no grading, no one is judging you) and sometimes there is a purpose to it.
On the Opportunity of Singapore’s S-VACC
Andrea in BIGS World posted this article discussing a new corporate structure for investment funds. Announced in 2016, the Singapore Variable Capital Company (S-VACC) is an open ended investment company scheme designed to promote fund domiciliation in the city state.
While that is rather cheem, a lawyer explains that for this to be a success, the S-VACC should have tax neutrality, access to SG extensive tax treaty network, and ability to satisfy the conditions for the Singapore fund tax incentive schemes.
This will allow the S-VACC to be used by traditional, and alternative funds such as hedge funds, PE, real estate funds, both open ended and close ended.
John in the Facebook Group summarized that this will allow funds to be re-domiciled to Singapore, afford certain flexibilities that are in line with Luxembourg, Ireland and UK, which are the 3 biggest fund domiciliation centres in the world.
With Brexit, there are many funds that are looking to re-domiciled to other countries. In the past the consideration is Ireland and Luxembourg.
By making this change it would help Singapore. It certainly bodes well for Singapore, who have ambition to become a major wealth management hub.
Here are My Topical Resources on:
- Building Your Wealth Foundation – It is imperative you know these stuff as early as possible, because this is the most important stuff
- Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
- Learning about REITs – The Deeper stuff on REIT investing
- 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
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- Why Would My Robo Cash Management Account Have Negative Returns? - January 22, 2022
- What Valuation Will Make Software/Tech Business Look Like Great Investments? - January 17, 2022