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A letter from a reader in his early 20s.

Wednesday, November 17, 2010

I received an email from a reader in his early-20s.  I was very pleased to read it as this is one of the things my blog hopes to do and that is to be a positive influence in the lives of ordinary people, encouraging them to save and invest for a more secure financial future. I am sharing the email here and I hope it would encourage younger readers to plan early and be financially prudent:

:) Read your posts, about financial planning. I realised that in recent months, i have pay for focus on the need to grow my money, even though it may be just 3000/year. I used to spend a lot, sales mean must buy. Now, i focus only on spending for trips to get the experience, and less shopping. Other than that, i did not spend much, and even find reckless spending, and credit buying quite disgusting.
travel means saving on accomodation through hostel or couchsurfing.

Aiming to save 50% of my salary, ex-CPF. 2600 salary, save 1k/month, 500
monthly expenses, 300 to parents, and 200 for whatever bills/medical expenses.

i think the current generations, not a lot of people focus on saving....
 with my friends spending on branded stuff. haiz.


la papillion said...

Hi AK,

Wah, got your own fan mails now :)

For the reader, I think every bit of savings helps. Start off by inculcating the habit of savings, of delaying your rewards a bit later, and then keeping track of your expenses. I find that people who spend a lot usually do not keep a record of how much they spend. If you do, I doubt you'll spend that much, haha :)

The best way to increase savings is to increase income. That's because expenses can only go one way when you age, which is up. You'll have to brainstorm to find ways to make use of your available time to make some more. When we're young, we have to exchange time for money, but hopefully when we're older, it'll be the other way round.

But to reach the other way, it's important to get that first tranche of capital through hard work :)

Kyith said...

wah. at that age i give 500 to parents. am i giving too much lol!


AK71 said...

Hi LP,

Words of wisdom. :)

We should pay heed to LP's words as he is someone who is able to save $50k a year!

AK71 said...

Hi Drizzt,

Er... you make me look bad. I started off giving only $300 to my mom and $50 to each of my grandmas monthly. When my maternal grandma passed away, I gave her share to my mom. So, I give $350 to my mom now. I don't give anything to my dad. ;p

la papillion said...

Hi all,

Haha, to chip in the numbers, I gave 350 to mum and 250 to dad per month...used to give 500 total but mum complained a little, so I gave them a rise :)

They really make up a big part of my expenses per month..but okay lah, can't save on such things :)

AK71 said...

Hi LP,

Since my parents are both working, I guess what I give to my mom is really a token.

My dad makes a lot more money than my mom, so, I don't even give him a token.

Maybe, I should give my dad a token sum too. Hmmm... Will sleep on it first. haha.. ;p

davidk said...

Such young investors are a the current education system does not teach us how to save or even worst how to invest..
I believe it would be a great disservice if we do not teach our own kids how to save and invest properly.

AK71 said...

Hi davidk,

The school system prepares us not for the stock market. I remember asking my Econs lecturer in JC to teach us how to invest in the stock market and she gamely tried but I was just another flighty 18 year old then. We need more teachers like her. I cannot remember her name now.

Raelynn said...

i will always remember what my intro to economics lecturer who flew down from london for a revision course (i'm at SIM doing UOL Economics and management), he says that the stock market is the most irrational thing driven by investors mindset which is far from rational.. to him as an economics academic, was ridiculous. lol.

AK71 said...

Hi Raelynn,

If one believes that the stock market is irrational and I am sure many do believe this, then, TA is more useful as it provides a window into the psychology of market participants. ;)

I didn't know you are an undergrad. Wishing you the best in your studies. :)

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