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Ambassadors of financial freedom.

Monday, March 11, 2013

There is this section in The Business Times called "Young Investors' Forum". This is sponsored by Citibank and is targetted at young adults and tertiary students. However, I wonder how many young people read The Business Times?

Now that I have asked this question, I also wonder what is the proportion of young adults and tertiary students in ASSI's readership profile?






We all know that the earlier we start our journey to financial freedom the better it is. Also, there is really nothing smooth about the journey. It is, in fact, rather bumpy as we fall and pick ourselves up again (and again). It also entails sacrifices, many sacrifices.

Everytime I hear a story of some young person who is ruined financially, I would wonder if it was something avoidable. Very often, it was avoidable. If we could help people be more prudent financially, we would be doing good and these people would be better off.






"Today, i counted my life saving."

Today, The Business Times has an article which has some interesting numbers but what proportion of its target audience did it reach? Although ASSI's readership numbers are a small pool compared to The Business Times', I will do my bit.

This is taken from the article:

Saving does not simply help one to accumulate money; it signifies the beginning of one's financial journey.

Realities today further drive home the need for young Singaporeans to save and spend wisely.

A diploma holder earns a starting pay of about $2,000 while a university graduate earns about $2,800 on average.

Using current interest rates for paying a 30 year housing loan and a 5 year car loan, owning a $300,000 4 room HDB flat and a $130,000 Corolla would require a monthly instalment payment of about $2,400!








In such a climate of high housing and car costs, raising a child becomes an even tougher financial decision to make. TheAsianParent last year estimated the cost of raising a child from infancy to 21 years of age to be at least $340,000, not considering inflation.


Although I have blogged about savings and its importance many times before, these numbers are a reality check for anyone who is starting life as a working adult and planning to start a family together with all the attendant expenses. However, how many people who should read the article would have read it?

If we are thinking of buying a property, a car and having children, we should look more carefully at our income and expenses. If we are not saving yet, start saving. If we are already saving, check to see if we are saving enough. What is enough? This would depend on what we want now and in the future. There is, therefore, no one size fits all answer.

The difficult thing for ASSI to do is to reach out to people who have not even started to think about the journey to financial freedom. How do we reach out to these people?







Financial freedom is not a competition. Everyone who achieves financial freedom is a winner. No one is a loser on this journey. There is no fear that having more people on the journey would lower the chances of success for everyone. In fact, the opposite is true.

So, my message to readers is to be ambassadors of financial freedom. Even if the horse would not drink, at least try our best to bring the horse to water. 

We could be saving more than one life if the horse eventually drinks.

Related posts:
1. The very first step to becoming richer.
2. Retiring a millionaire is not a dream.
3. Rich Dad, Poor Dad: 2 are better than 1.

25 comments:

wirbelwind said...

Hi AK71!

I am in university now and I have been following your blog for around a year! Your philosophy in saving and investing has inspired me to plan ahead and I thank you for that!

It is indeed difficult for the BT and blogs like yours to reach out to the youths who have not started on financial planning. The audience is mostly made up of people who are already interested in investing.

I try to share interesting articles from your blog and other websites on facebook or twitter. I agree with you that more should be done to reach out to those who havent started.

AK71 said...

Hi wirbelwind,

You took the words out from my mouth! Yes, this is exactly what I am trying to get at. :D

People who visit personal finance blogs are people who are already interested in financial freedom. What about people who are not in the know or uninterested? How do we connect with them?

Well, I believe that young people like you have a better chance of successfully influencing the way the young think about money than older people like me.

Peer pressure? Yes, but in a good way. :)

If you could share your story in a guest blog, please email it to me and I will be most happy to put it up. :)

Ken said...

Hi AK71,

Of utmost hesitation, I pulled the plug and unveil my queries.

Filled with sheer determination, I'm trying to save every speck of dust. However, in my family clan spectrum, everyone is busy showing off their Beemers, Merces, Audis, R.Rovers, Jaguar etc. I'm facing challenging situations and being manipulated like a chess to depict well-to-do facade.

Sigh, guessed I am screwed up in all ways :'(
Never be Penny wise, Pound foolish.

Warmest Regards,
Empathetic Gen Y
Ken

EC said...

Hi AK,

Thanks for posting another great blog post. BT is targeted towards the business community but laymen like us can still benefit from some of the informative articles. However it is behind a paywall with a much smaller print circulation than the ST, so its reach is definitely lesser. Copyright might be an issue if the entire article is to be shared online.

I support your stand of reaching out to more people but as you have said, ASSI is more or less 'preaching to the converted'. People who are already interested in personal finance/ investments will naturally seek out financial blogs and possibly ASSI too.

Somehow I feel it's difficult to get people to be interested in this topic - it's something like a personal volition. I guess what you have been doing is to provide more insight and perspectives from an experienced point of view to those who are inclined to find out more - and for this I applaud your efforts.

I guess ignorance and risk aversion go hand in hand. Many people have heard (rightly or wrongly) about the horrors of the stock market/ investments which might pose a significant hurdle to getting them on the 'correct mentality'.

Best wishes,
Eugene

SnOOpy168 said...

Wirbelwind . You have youth at your advantage. Good to hear that you are doing something about it.

Had I been able to rewind my financial clock, perhaps things will work out differently. But I wasn't sure if information was this easily available and accessible then. Internet was still at 54.4kbps dial up and had to fight with everyone in the house for the uninterrupted usage. My ISDN line (max 128kbps) was the 1st in the entire neighbourhood.

Perhaps the best way to help others is by peer influence & pressure. If you are building and doing well over time, and shared about (like Sifu AK), others will take note and follow, at their own will.

There will be lots of naysayers. You will have to make a judgement Afterall, they won't share your losses if you believed and listened to them. BUT expects a treat, had your make your pile of $$ in the process.

AK71 said...

Hi Ken,

I am not against people buying BMWs and MBs per se. Really, I'm not.

There are people who are financially very secure and who are able to really afford such luxuries. They could pay for a $400k MB and still have millions of dollars in net worth.

So, if your family and extended family members are very well off, don't stand in their way to enjoy the finer things in life. The economy needs them. :)

AK71 said...

Hi Eugene,

I am forever mindful of copyright issues as I don't want to end up with a lawsuit. Being a minority shareholder of SPH probably does not offer any protection at all. ;p

The copyright law allows copying not more than 10% of any publication for research and discussion purposes, I believe. So, I have extracted not more than 10% of the article to share with readers here. :)

I understand that some people have an aversion to the stock market. It is natural for people to fear things they don't know.

However, ASSI is not just about investing in the stock market. This blog post is about being prudent in personal finance matters and sometimes, I think, I spend more time talking about this than I should.

It bothers me somewhat that I am only "preaching to the converted" and that I am unable to reach out to people who really need talking to.

EY said...

Hi AK,

Following your strand of thought, were you bothered when you could only teach 1 class when you were a teacher? Perturbed when you could only give tuition to those who came to you and unable to reach out to kids who really need help? :P

Everything has its time and place. Whether a seed will germinate depends not on who sows it but where and when it is sowed. So why take it upon yourself that it has to be you? You have done good enough by many measures. Good of course can become better but please don't overly 'bother' yourself. :)

Cheers,
Endrene

wirbelwind said...

Hi ak71

I am really flattered by your offer to do a guest post! Will consider it really carefully!!

Anyway i will just share with you what of my friends think about investments and financial planning. Most of them are too preoccupied with school work, CCAs and relationships to learn something that seems so complicated. It does not help that even the school investment club use ridiculously cheem ( even for a finance major like me!)models to determine investment choices.

People who genuinely know investments are unwilling to advise friends to try their hand as they have gotten their hands burned before and don't want their friends to go through the process. Moreover, many of them are like me, penny-pinching individuals that would rather be exploiting the under-priced canteen food than enjoy their youth with more frivolous spending. It is hard for us to advise our friends to invest when we know that they don't have the discipline to save a consistent amount of cash for investments.

That being said, I don't think that we need to worry too much about youths. While we may not have the frugality of the older generations, we are more educated and more net-savvy so I think we can make more "informed" decisions. We probably need a few knocks and falls to let us realize the importance of frugality.

AK71 said...

Hi Endrene,

I would usually do what I can and let nature run its course. I am only one person after all. However, lately, I wondered if I could reach out to many more.

I don't know how to explain it but there is just this feeling in me that I could do more but how? Not a nice feeling.

I spent almost two hours talking to a good friend last night on personal finance. He was receptive and asked many questions. I am sure that the conversation did some good. However, it did take two hours of my time talking to just one person.

A blog is relatively more productive but is it more effective?

Of course, I try to keep my blogging style conversational and motivational. I also reply to all comments and emails promptly to keep the interaction level high. Even so, it does seem to lack something.

How long have I been feeling this way? I can't say for sure but at least for a few months and I suspect it has to do with coming across many more cases of people being less than prudent with money.

I think I need a break and not think of it all for a while. :)

wirbelwind said...

Hi Snoopy

I do hope I can last the long run with my careful spending and investments. After all I have not started work yet and its still a long time before I can build up a capital base that will let me enjoy a huge absolute returns for a sustainable 6-10% return.

I think I am not missing out a lot in life as compared to my free spending peers. I can only hope that I don't regret it in the future.

Thanks for the encouragement anyway! :)

AK71 said...

Hi wirbelwind,

Indeed, the School of Hard Knocks does a good job. ;)

Thank you for sharing your observations. It feels like a breath of fresh air.

I don't know about others but after a while, I get tired of reading my own writing! ;p

If ASSI is able to have even just a few regular guest bloggers, I believe it would make it a more interesting and satisfying read.

So, my invitation to you is not to do a guest post but to do as many as you like! :)

SnOOpy168 said...

wirbelwind

one final word of advice. Set up a "purely for savings" account that you will put your planned and left over cash into, monthly. However little each top up is, it will grow over time. This will be the basis for your emergency fund and your primary investment cash.

Your income & your savings rate will grows over time. There will be a point in time, like some of us, that the stock purchases can be easily made via the salary account. Easily.

When to invest in which stock and when ? That topic is well covered in ASSI, which I learned : Whenever you think it is good deal & value to you.

Hoped this helps.

SnOOpy168
(the kiasu and pro passive income investor, who is still licking his wounds from the unit trust & insurance linked investments of his younger days.)

AK71 said...

Hi SnOOpy168,

Time for you to be a guest blogger and share your story here.

You have made good progress in your own journey and I am sure your story will be encouraging to many who have just started on theirs. :)

EY said...

Hi AK,

Wah, you are promoting yourself to Chief Editor ah?

Yes, yes, SnOOpy168 and all other lucky readers, please send your entries to AK@Sillypore and you get a chance to win 24 hours of fame on ASSI! Hurry, while stocks last! (Pun intended) :P

Hahaha...

Hey, sometimes we have to think less and feel lesser. Take a break and stop worrying for others! All of us have our own path to walk. Good enough that you offer to walk along and shine the torch.

Take heart, the cow will come home some day and drink when it has eaten enough grass! Hmmm...eating grass...like soooo familiar. Yucks! *SPIT* :P

Cheers,
Endrene

AK71 said...

Hi Endrene,

Hahahaha... You really have a flair for writing. It is a precious gift. :)

I am growing lazy lately and trying to get others to write for ASSI. Shhhh... Secret. ;p

SnOOpy168 said...

Aiya AK. You flatter me, on this cool sunny morning with this honourable invitation to guest blog.

As a small fry with a small portfolio and returns, 不敢当 leh.

Endrene is far better word smith than many of us here.

AK71 said...

Hi SnOOpy168,

Not many can write as well as Endrene. She writes better than me too. So, maybe I should not be writing too? ;)

The invitation to blog is about possibly sharing your story and progress. I like inspirational stories and I think ASSI is a good platform to inspire more to embark on the journey.

I will have editorial power over all submissions and will edit and correct where necessary. See? You don't even have to pay someone to proof read your article. ;p

Invitation remains open. Whenever you are ready. :)

EC said...

Hi AK,

See...the amount of feedback shows you are on the right track!

I was thinking how people could have stumbled upon your blog - links from other financial blogs, word of mouth, Yahoo (from your published articles) etc...I think I found it when I did a search along the lines of 'singapore stock market blog' - ASSI is the 1st hit in Google! But I guess ASSI is much more comprehensive than just about the stock market.

Just a thought that people who tried searching something like 'sg personal finance blog' won't see your blog though thefinance.sg which aggregates yours is there haha.

Eugene

AK71 said...

Hi Eugene,

I am an IT idiot. I don't know how to promote my blog. So, being number 1 in a search result is a nice surprise. :)

I have people who wrote to offer their services to promote my blog. SEO and such. Of course, the services are not free. So, I did not take up the offers. :(

ASSI is a personal blog first and I blog about all things which I am interested in. So, readers would have to bear with my "Tea with AK71" blog posts. ;p

Of course, I have advertorials and ads which make me some pocket money. I try to make sure that the ads would be of interest to readers and offer benefits in more ways than one. I have rejected quite a few advertisers actually. Silly me.

TheFinance is a pioneer in Singapore's personal finance blogosphere. The blogmaster is IT savvy and he is providing a wonderful service.

I dream of a day when personal finance bloggers of substance would come together to start one mega blog but that is not going to happen for various reasons. So, TheFinance fills this gap.

What can I do? Continue blogging, I guess. I don't think there is anything else I can do to reach out to more people.

OK, too much rambling. I better stop. Otherwise, I will drone on...

EY said...

Hi AK and SnOOpy168,

*Blush*Blush*

Wah...did both of you rinse your mouth with honey huh?

Can only be grateful that you all appreciate my Ah Lian ramblings lor. Never for a moment suspected that I ran loose from IMH meh?

Hahahaha...

Hey, when more people contribute to AK's Tea with XYZ section, maybe got company, I will start contributing also...like once a quarter or once a year?!? :P

Anyway, think I told AK before. I'm also very lazy. Reading people's writing is easier. And I'm scared to receive hate mail. Hmmm...

Cheers,
Endrene

AK71 said...

Hi Endrene,

Once every quarter sounds good!

Your last blog post was on 13 December 2012. So, I should be expecting your next contribution.... before midnight! ;p

You might be interested to know that your first blog post here in ASSI has been viewed 938 times by now and has maintained a hate mail free record! ;)

Musicwhiz said...

I am surprised that Uni investment clubs use complex models to determine which companies to buy. Does this include EMH , Black Scholes option pricing model and other esoteric concepts like CAPM?

Perhaps they should be teaching stuff like good personal finance habits, how to analyze a company (yes, this includes field trips to visit the company's plant, factory, office etc to speak to Management and key executives), analysis of business models, metrics and ratios; as well as scuttlebutt (calling competitors etc.) These will all help more in determining a suitable valuation for a Company and whether it offer margin of safety, rather than relying on complex models with a dozen inputs - these normally give you a precisely wrong answer rather than an approximately correct one.

And oh yes, I hope Unis don't teach technicals, or do they? Haha.

EY said...

Oorhhh...busted deadline oredi. Then how? Hope that 'cher won't remember, then no need to pass up lor! :P

AK71 said...

Hi Endrene,

Er... Submit 2 articles instead of 1 in June please. Problem solved. ;p

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