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7 pertinent questions to help build our wealth.

Saturday, December 19, 2015

28 November 2016:
If you have read this article before and if you fell short, have you made any progress? If this is your first time reading this article and if you fall short, there is no better time to take action than now!






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We might want to ask ourselves a few questions:

1. Do we pay ourselves first each month?

2. Do we dine at restaurants frequently?

3. Do we delay gratification?

4. Do we have the right insurance?

5. Do we maximise benefits from the CPF?

6. Do we have an adequate emergency fund?

7. Do we keep an eye on credit card debt?

Increasing our earned income is but one step in our quest to become wealthier. We must also be prudent when it comes to spending money.

We absolutely should have proper measures in place to guard against involuntary wealth destruction.

Finally, we have to recognise legal and ethical opportunities to build wealth and capitalise on them.





Here is an inspiring email from a reader:

Dear AK,


I was smiling when I was reading this post (I'm not mad) but was delighted to find out someone had benefited from your blog like me. (AK says see related post #2 at the end of this blog post.)


I wrote to you in Aug and four months have past..
(AK says read the blog post: here.)
I hope you don't mind me updating you. 

Salary Management - Now, growing wealth and management have been a common topic between my husband and I. So first salary management, for the two months at home as a "free-loader" cum housewife, I decided to make myself useful and forced myself to write down all the fixed monthly recurring payments and worked out some strategy with my husband. 

Strategy: For the first joint account, we credited our salaries and that will be the spending account. A second joint account is created for savings/travel. Once the $10k is reached, we will transfer that sum to the 3rd joint account as emergency funds. Every month, we will save minimum $2500, of which, $2000 will go to the second joint acct and $500 will go to the 3rd account. 

We hardly eat at restaurants. We don't see a point in celebrating any events by going to expensive restaurants. If we want to pamper ourselves, we would buy good salmon and beef from the wet market, and cook at home. 

A good part of the motivation was achieve financial independence. A small part,it may not sound that nice.   






Delayed Gratification - This probably took some mental muscles. My husband and I are active in sports. We run 10k and half marathons. Now the cycling bug has bitten us. We are the sort where we would pay for quality goods so that the goods can last longer. We set our sight on a $4000 road bike each because eventually we would want to do an Ironman in our lifetime. 
AK is also thinking of buying a bicycle. This costs $138. Hmmm.

Every time, we talked about it, we would feel guilty and sometimes your words would cross our minds. (See! You are that influential!). In the past, once we have saved that budget, then we would spend or use 0% interest free installment. Although we have set that budget, both of us agreed that we should delay the purchase until next year June and save aggressively now till it's way above the bikes' cost. Then decide again.  





Insurance - Two insurance agents I spoke to, asked if I want to be a part-time agent. My husband always laughed when I challenged the agents. We are fixed on buying term insurance. 

CPF - We have transferred part of the amount from OA to SA. The painful part was, I should have read your blog before letting HDB wiped out my OA. That's $38k which could have earned 5% in my SA. Ah... 

Investments - Like what you have recommended when I first wrote to you, we have to make sure that our safety nets are secured and now the priority is to grow our emergency funds and get adequate insurance. Yup, so we would be delaying investments until the first two are settled. 





Credit Cards - We are starting to make it a habit to check the credit card usage at least once every week and not wait until the day our salaries come in. This would prevent overspending. We tried those expenses app where you enter every purchase, that has not gone down too well. To start small, we will check our credit card balance regularly. 

Sorry for the long post and I can see why blogging can also be "talking to myself". Halfway through the email, I also felt like talking to myself. 

Thank you AK,






Impressed? I know I am. Well done!

Remember, for anyone, the best time to start on the journey towards financial freedom is now.

Related posts:
1. 2 questions that build wealth.
2. 7 things a reader did after visiting ASSI.
(Read related posts.)

2 comments:

44b3eb0a-80f7-11e3-9782-000bcdcb2996 said...

Hi AK,

I found my answer to the seven questions to be all no except yes to question two.

Alamak!

Cham liao!

:P

Tree

AK71 said...

Hi Tree,

Alamak indeed! I hope you are kidding me. LOL.

Well, to be fair, if one is born with a silver spoon in his mouth, one doesn't have to worry about such questions too much. ;p

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