While watching some YouTube videos regarding the economy, a video titled "Are All Singaporeans Rich?" popped up in the right sidebar.
I am usually not interested in videos like this but since I blogged about Singaporeans being obsessed with salaries not too long ago, I decided to give it a go.
Fortunately, the video had timestamps which allowed me to watch the segments I was more interested in.
It is interesting to see that the people interviewed in the streets of Singapore mostly agreed that everything was expensive in Singapore.
Most of them had earned income of $5K a month or more.
Personally, I think I can be quite comfortable with a salary of $5K a month today.
Apart from cars and private housing, I don't think Singapore is expensive.
Why do many Singaporeans think that a salary of $5K a month is insufficient?
Watching the video produced so many "Alamak, AK!" moments.
Someone said he would buy lattes regularly, paying $8 a cup!
Then, there is pubbing on weekends and taking taxis!
(OK, as a ComfortDelgro shareholder, I think taking taxis is a good idea. Please continue.)
Then, some talk about fine dining and how expensive wine is in Singapore!
Hey, we have choices.
If we overpay for coffee and if we choose to take taxis instead of buses and trains, of course, it would lead to a higher cost of living.
If we choose to get our nutrition in fancy restaurants, definitely, it would be costlier.
Such a lifestyle in any country would be more expensive than more humble alternatives in the same country.
Am I right to say that?
So easy to blame others for bad results even when it was our choices that led to those results.
Don't say Singapore is expensive when we make expensive choices.
Wake up.
A lady said that she had to work harder to earn more money.
I don't think that is a bad thing per se.
If she worked harder and put some of the money to work in order to generate passive income, her financial health can only improve over time.
If we do the right things, we don't have to worry too much about our financial future.
If I were 30 years old today and drew a salary of $5K a month, if I were truly prudent, I could probably save 50% of that money each month.
If I were to invest $2K per month in good income generating businesses, with a dividend yield of say 4% to 5%, I would be able to generate a few thousand dollars per year in passive income by the end of the third year.
Yes, it would take only 3 years to see meaningful results!
Over time, if we make more money, we could put more money to work if we stay financially prudent.
I remind myself that it is not how much money we make but how much money we save that will tell us if we are growing richer.
Then, be a pragmatic and patient investor for income and we can only become richer.
Not all Singaporeans are rich but all Singaporeans can be richer.
If AK can do it, so can you!
Related posts:
1. Why obsess with salaries?
2. Passive income as much as earned income?
Good morning AK71,
ReplyDeleteIndeed true that if one gives in to living it up, letting lifestyle inflation creep in when salary goes up, then it will be hard to save.
However I do feel that one should strive to have balance in our lifestyle. That is, not to live in extreme frugality and not to live the high life everyday. Also, the quickest way to grow wealth is to earn high income and spend way below that income. A person saving 100% of a salary income of $3K pm is still just $3K pm saved. On the other hand, a person earning $10K pm and only saves 50% of that, is already $5K saved. It is very likely the guy who spends that $5K pm will have a richer life experience.
At my current age of 62, I do feel the mortality of life more acutely. Each time a friend passes on is always a reminder that time is the more limited resource than money. Not only that, as we aged our energy level also drops together with our agility and reflexes. There are more and more things we cannot do or have no more desire to do.
I see this three phases in retirement for myself:
Go-go phase (62 to 73) : this is the last phase to go travelling, live life that little bit more while we can still eat well and enjoy the food.
Go-slow phase (73 to 80) : not likely to want to travel far nor frequently. Probably eat much less and maybe give up driving
No-go phase (80 to end) : high chance to be home bound. Mobility impeded and may need assistance in moving around.
My advise to younger people is, yes do save money, do spend less than your income, but dont forget that time once passed, is never coming back. Do pursue things that you can derive enjoyment and that enriches your life. Money can be earned.
I travelled widely in my work and on personal holidays, but I still have a long bucket list of places I want to visit and things that I want to do. So my wife and I have been making two trips (one long trip and one short trip) each year. Strike a balance between work and play when you can, meaning you dont have to retire to enjoy life.
Hi MSI,
ReplyDeleteFortunately for me, I do not enjoy travelling.
I am happiest and most comfortable when I am at home.
AK is lazy lah. ;p
To be fair, all of us spend money on some kind of leisure activities.
For me, it is MMORPGs but only the free to play versions in the last decade.
Still, I spent money on a gaming laptop.
High income is of course a good thing but most people will not have high income.
That is the hard truth.
Only 1 in 5 will make $8K or more a month in Singapore.
So, becoming better savers is still the way for most people to achieve financial freedom.
You are in a good place as you seem to enjoy your work, have high income and good money habits.
Gambatte! :D
Hi AK.
ReplyDeleteHope things are well.
I thought "Alamak AK" already has a patent. :)
I hate traveling due to work and no more. But holidays OK lah. Should go while you can. If you don't like package tour, customize one that suits your liking.
Hi Henry,
ReplyDeleteI dislike taking airplanes, whether for work or vacation.
I much prefer going on a cruise and my most memorable was a cruise to Bangkok and Hua Hin.
After seeing what happened during the COVID-19 pandemic, I have decided that's a bad idea.
Floating petri dishes. -.-"
I decided that I am OK just staying in Singapore. LOL. ;p
Tbh, those that often comment xxx/pm or xxx amt is not sufficient are those who spend more than they earn. Ofc there is a difference between spending of a single/married person but end of day, if you choose the lifestyle of spend>earn then any amt will never be enough.
ReplyDeleteLife should never be a a/b choice, needs and wants will shift constantly as we age so as long we keep expectations accordingly most should be fine. Have to know difference between ambitious and being unrealistic.
Btw question for you sir, does dividend payout of eg dbs count into total pnl in the portfolio? Or should it be excluded?
Hi Franco,
ReplyDeleteOur choices in life have consequences.
We should take ownership. :)
Dividend is return on investment or a part of it.
So, it contributes to the performance of our portfolio, for sure.
ReplyDeleteAs I get older, I'm less inclined to pursue things and vain experiences.
Live a simple life, manage the costs of living, spend within my means and save for retirement.
Hi Yv,
ReplyDeleteExactly how I feel. :)
Very aware of how little time I have in this world, I want to spend my time doing what I like.
This means not being frivolous with money which means ending up having to chase after more money. -.-"
I believe there is some relativity here when people say that Singapore is expensive - comparing costs to some neighbouring countries for example. Not just private housing, but public housing is not cheap either : HDB room rentals easily about 1k or more, a whole 2 BR more than 3 or 4k
ReplyDeleteMysecretinvestment makes a very valid point about time as a resource. It is something which I also feel that I need to make the most of. If taking a taxi costs $10 more than taking MRT/bus but saves me 30-45min, that is time that I can use to prepare a meal for my family, read some financial news, do some exercise etc... So, it comes down to what we prioritize and making what we have work for us.
Hi Ana,
ReplyDeleteHey, long time no see. :D
If we are in a hurry, then, of course, spending money to buy time makes a bunch of sense.
It depends on the situation.
All of us are wired differently, for sure.
Like you have rightfully said, it comes down to what we prioritize.
Those who prioritize excessive enjoyment over financial prudence must realize that there are consequences.
Wherever we choose to make our home, we can make humble or expensive choices.
It doesn't help our financial situation to compare cost with other countries is what I am saying.
Many spend too much time comparing and complaining, I feel.
I totally agreed with AK that Singapore is not expensive country. Expensive life style is the individual choice. I originally came from China, started from S pass holder in 2007. Now my family are Singapore citizens, own 4 room HDB without loan. Besides cash, 400k investment portfolio which includes fund, ETF, REIT, SG dividend stocks. passive dividend income was 7K in 2022, and it would be 12K in 2023. I like a small scale AK, look for prudent, predictable wealth growth. I am far away from financial freedom, but my family feel comfortable with current salary income and financial situation.
ReplyDeleteHi MilkTeaBro,
ReplyDeleteThanks for sharing your experience.
You are a good example of how regular Singaporeans can have a comfortable life by being financially prudent and pragmatically investing for greater financial security.
Financial freedom is not a dream for most people in Singapore if they do the right things.
Gambatte! :D
I also dont understand, tak faham lah the mindset/ perspective of those who say SG is expensive. I can find $1 tau huay $1 pastries at ABC Brickwork food market.. Cars expensive then dont buy cars la! #expectations #contentment anyway AK, i was the one who commented that you're the ONLY financial blogger I trust. I threw all my lifesavings into the stocks u say good, I trfr CPF OA to SA topped up rigorously. lol.
ReplyDeleteHi garyp,
ReplyDeleteAlamak, you threw everything including the kitchen sink? -.-"
You very brave! I must learn from you!
I also cannot remember when I blogged about CPF OA to SA liao.
Donkey years ago. ;p
Many bloggers and YouTubers helped to spread the word since then.
Good things must share. :D
Hi AK, if I remember correctly, you own RHT shares. Would you talk to yourself about the ongoing wayang and what can investors do?
ReplyDeleteApology, for off topic.
Hi Henry,
ReplyDeleteMade some good money from RHT and whatever is left is just kept under the pillow.
I don't even look at it anymore. ;p
Just hold and see what happens next, I suppose.