Tea with TheMinimalist: Financial planning? Start with why!

This is a guest blog by a mysterious and wise man with the codename: TheMinimalist.

Many of us reading financial blogs such as ASSI understand the importance of planning our finances. The maxims of “Spend less than you earn”, “Invest in ETFs/Index Funds” and “Protect ourselves with insurance” immediately come to mind.

We KNOW it is critical to do all the above yet we DO NOTHING about it. Why?

It wasn’t until I met a university friend that I finally got my answer.

Recently, I was looking through my FB news feed and saw that one of my university friends changed his job recently. I didn’t really talk much to him back in school but was curious about how he is doing. It has been about 3 – 4 years since I last saw him. I decided to arrange a nice dinner with him after work.

While I was waiting for him at Raffles City Starbucks, I saw a guy that somewhat resembled him but he looked “bigger” so I looked away. Then, that guy started messaging on his iPhone. “Ok, I think that’s him” and I was spot on when I received the whatsapp on my phone. “Oh wow, you look more prosperous since I last saw you huh…” I commented. “Yeah, I have gained 6-7 kg since I started work, haven’t exercised much you see…” he explained.

My Body Mass Index (BMI) is 21.7 and falls within the normal range. However, the fear of becoming a “fattie” motivated me to take steps to lead a healthier lifestyle by:

• Exercising more frequently after work
• Opting to eat fruits and nuts for my dinner
• Controlling the amount of food intake for each meal

The ongoing efforts of such a healthy lifestyle have paid dividends and I am currently feeling “lighter” and better.

So what is the lesson here?  

 

“Humans are VISUAL creatures, we ACT by EMOTIONS, not so much with reason.”

We can read millions of books on investing, read every single blog post by AK71 and, yet, NOT be motivated to do anything about our money. However, when we SEE our peers doing much better than us during the class reunion, do we not feel something stirring in our hearts? Yes, that feeling that we are not good enough and that there’s so much more we can do in our lives. 

Now, if you are currently struggling with motivations in personal finances, I think I might just have the solution for you.

Here are two simple things you can do immediately to start turning your financial life around:

1.     Find someone who is more successful than you financially (Psst…AK71). Ask him out. Buy him a nice dinner at Tim Ho Wan. Learn as much as you can from him about budgeting, investing and insurance. Most successful people will happily oblige. After all, people LOVE to talk about themselves. Fact of life. 

2.     Find someone who is doing not so well in his or her finances and ask them out for coffee. They can be knee-deep in debt, spending more than they earn, invested in “scams” etc. Your intention is neither to mock them nor to sympathise with them.  Instead, be curious and figure out what got them into such trouble in the first place. Most of the time, it’s due to bad decisions and not by circumstances.

Ask yourself and decide (out of the two) who you want to be like in 3 years' time.  

Next, take out a piece of A5 paper and write down ONE specific thing you will DO from today onwards to better manage your finances. Then DO it.

If you need some inspiration on actionable items, here are some resources you can turn to:

Achieving level one financial security for Singaporeans.

Save 100% of your take home pay! What?

If we are not rich, don't act rich! 

Every single time you find yourself faltering, think back to the two people you have just met. Who do you want to be like in three years’ time? The answer (to your future) is in your hands.

Go try it and share your experience in the comment box below or FB. I look forward to your response to my debut guest blog! J 

AK's note:
I think I have been blogging too hard lately. I might take a long trip overseas to take a break. I should be un-contactable by all modern communication devices then. So, unless courier pigeons are available, invitations to have dinner at the atas tim sum restaurant might not reach this fatty.  -.-"