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F.I.R.E. lean or shaky? AK still worried? Confession.

Monday, January 23, 2023

Change is the real constant in life, many would say.

Back in June 2020, I published a blog on how worried I was. 

Why was I worried?

Dividends from my investments during the COVID-19 pandemic reduced pretty significantly.

The central banks were also lowering interest rates again in order to keep their economies alive. 

That meant even lower interest income for my fixed deposits.

It was a double whammy. 

Without an earned income, the double whammy was pretty impactful for me.

Fortunately, being a worrier, I built buffers before retiring early so many years ago.

I had an emergency fund which I was prepared to dip into if things got even worse in the same way our country dipped into our reserves during the pandemic.

It is imperative to hold a buffer against possible crises.

Our country has reserves and we should have emergency funds.

Readers who have been following my blogs for some time know what I say about regular folks like us keeping our needs simple and our wants few if we want to achieve financial freedom earlier.

It means to live well below our means.

There are people who then retire early once their passive income is able to cover their basic necessities in life with very little or no room for error.

They call it lean F.I.R.E.

I think it should be called shaky F.I.R.E.

OK, maybe I am just mental but I like to have buffers in case things go wrong.

If I didn't have buffers, with reduced dividends and interest income during the COVID-19 pandemic, I might have had to look for a job in a very difficult environment.

Just thinking of the possibility is giving me an anxiety attack.

Yes, PTSD moment right there.

What is the opposite of lean F.I.R.E. then?

Fat F.I.R.E. sounds unhealthy but maybe that is what it is.

While lean F.I.R.E. is about having just enough passive income to cover basic necessities in life, I suppose fat F.I.R.E. means being able to afford some luxuries as well.

There is a limit to how tight lean F.I.R.E. can be while the sky is the limit for fat F.I.R.E.

If I am a very sensible person, I would live like I am on lean or shaky F.I.R.E. when I have already achieved fat F.I.R.E.

This is because we don't know what we don't know.

However, I am not very sensible, so, I live in a shoebox condominium and I own a car, both of which are so expensive in Singapore.

Hence, when things took a turn for the worse like what happened during the COVID-19 pandemic, I worried as I also wished to provide my parents with greater financial support.

Don't be like AK.

Be sensible, very sensible.

Anyway, two and a half years later, how have things changed?

Things have changed a lot.

I have made changes to my investment portfolio in the last two and a half years.

The aim was to have a more resilient investment portfolio.

Passive income received from my investment portfolio has grown significantly, year on year.

Inflation has shot up and it has remained elevated.

Interest rates have increased rapidly as central banks try to tame inflation.

Cost of living crisis has become a trending topic for some time now.

However, this development is good for the financially prudent people who have been living well below their means.

Inflation affects them too but not by very much as they are used to keeping their needs simple and their wants few.

Higher interest rate is good for them too as they have ample savings in the form of a meaningful emergency fund and also a float.

Interest income is not a negligible sum anymore.

I see my interest income increasing many folds. 

In fact, the percentage increase is very much higher when compared to the increase in dividends and distributions received from my investment portfolio, year on year.

So, is AK worried no more?

I shared in a recent blog that we could see a recession this year and with inflation staying high, we could see stagflation.

So, people like AK might be quite comfortable now but don't be complacent.

Give ourselves a little treat from time to time but don't overdo the "revenge spending."

Remember, swans are not always white in color.

It is safer to stay worried!

Wishing all readers good health and abundant wealth in an energetic Year of the Rabbit!
Essential reading:


Sandra said...

Thanks for your constant reminder ☺️ Gong Xi Fa Cai !

AK71 said...

Hi Sandra,

Alamak, it means I am growing old.

Old trees have many roots.

Old people have many words. -.-"

Gong Xi Fa Cai! :D

MK - don't know much, want to learn more said...

The Price Of Freedom = Constant Vigilance ;P

AK71 said...

Hi MK,

Alamak, you must remember that AK is mental. (TmT)

Many people would say that AK worries too much and they could be right. -.-"

Fortunately, achieving F.I.R.E. has allowed me to be lazier most of the time and that was the primary motivation for me. ;p

ML said...


AK71 said...


Gong Xi Fa Cai! :D

garudadri said...

Dear AK
Thanks and happy new year!
Rather than be satisfied with lean fire or end up as “fat” FIRE, I would advocate aiming for a “Muscular FIRE”
Muscles are heavier than fat weight wise but not only are they useful in terms of strength and aesthetics but also give you dynamicity and mobility
An ideal portfolio therefore must have robust dividend growth companies and not just REITS
You have recognized that and resolved to increase your bank stakes
Just like me!
I would say that it is better to have lower yields if growth and total share holder returns are better rather than end up with high yields and nothing at all in terms of capital growth
Muscular FIRE however needs taking on some risk
I would say that while people have active income from work, they should build up their muscular portfolio with good mix of dividend growth plus pure dividend blue chips and have some small allocation to growth stocks that are risky plus a larger allocation to REITS in the SG context
Some real estate adds to the mix
As someone with no CPF, using the full SRS allowance and investing those funds in reliable steady companies like SG banks, Wilmar, ST ENgg and good REITS will deliver 10% at least annually even accounting for occasional disasters like CDG and COVID like events as the tax saved will more than make up for these
To summarize, aspire for a “muscular” FIRE whilst working and then relax later
Regards and best wishes

AK71 said...

Hi Garudadri,

I like the sound of "muscular F.I.R.E." very much. :D

Unfortunately, I am no longer working and do not have any earned income. (TmT)

A portfolio that is concentrated in REITs is definitely a bad idea although they are surely relevant instruments if we are investing for income.

Being 100% in REITs makes for a fragile portfolio.

I recognized that REITs could be impacted negatively when interest rates rose again one day.

So, I began allocating resources more aggressively to non-REITs in 2015.

In 2016, when the common stock of DBS sank to under $14 a share, I became a shareholder.

Hard to believe but it has been 7 years since.

I agree that anyone who is gainfully employed and paying income tax should have a SRS account and make yearly contributions. :)

I have not been doing it for more than 6 years as I have been unemployed. (TmT)

I second your call for achieving muscular F.I.R.E. :D


1. SRS: A brief analysis.
2. Why work hard and plan early for retirement?

Yv said...


I think giving ourselves (and our loved ones) little treats now and then are nice and good to have. Nothing too extravagant but just a conscious choice to enjoy and appreciate each other.

Wishing you a 大有前兔 and 兔飞猛进 2023!

AK71 said...

Hi Yv,

I enjoy puns very much.

Thanks for the puns on the word "rabbit" in those Chinese sayings. :D

Yes, there are affordable luxuries in life and we should treat ourselves better.

It is something I have come to realize only in the last few years.

Not as tight fisted with money compared to my younger days. :)

I don't have any clever puns like yours.

Wishing you 身体健康 and 新年快乐. :D

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