However, my mind was somewhere else and it has been somewhere else for a few days now.
I have been thinking about some money issues.
Regular readers know that I am a worrier.
I used to worry a lot about the possibility of growing old and destitute.
Although my situation has improved over the years, I could not help but continue to worry.
Black swans do exist, after all.
So, over the years, even as my situation improved, I kept trying to grow my passive income.
To be fair, in recent years, I have become much more laid back.
I became less tight fisted with money.
Over the last 10 years, I increasingly spent more money on myself.
Over the last 10 years, I gave my parents more and more financial support.
I did these as I continued to invest more money in businesses which would generate income for me.
I have also been consistently socking away some money in the CPF and, more recently, T-bills and SSBs.
Of course, I did this in the last 8 years while lacking an earned income.
In recent years, I have been publishing blogs on how much passive income I needed yearly to do all the things I wanted to do.
I have always found writing to be helpful in crystalizing my thoughts.
It is also useful if I ever need to remind myself of why I did things the way I did.
Blogging allows anyone who might be interested to eavesdrop to do so, and it could generate meaningful discussions.
In my most recent blog on the topic, I said I needed on a yearly basis:
1. $48,000 for myself.
2. $48,000 for parental support.
3. $38,000 for CPF VC.
Of course, that $38,000 has been diverted into SSBs this year.
With a passive income of $206,000 last year as a guide, I would have an excess of $72,000 each year, all else being equal.
The plan was to continue investing for income with this sum of money yearly.
This would grow my passive income.
Then, why did I say my passive income is all gone in the title of this blog?
Well, the plan has changed.
1. I have decided to increase financial support for my parents again.
My parents are even older than Ng Kok Song or Tan Kin Lian.
No matter how optimistic I am, my parents probably have only 10 to 20 years left to live.
I want them to be able to enjoy their retirement without having to worry about money.
I will give them much larger red packets on their birthdays, Father's Day and Mother's Day.
I will continue to help by paying for some large recurring expenses.
2. I have decided to increase my annual gifts to my siblings.
This will be in the form of larger red packets on their birthdays.
I make more money than my siblings even though I am retired and they are working.
If I can help them to prepare for a financially secure retirement, why not?
3. I am not a Christian but I like the spirit of giving.
So, I will be giving red packets to my family on Christmas.
I started doing this last year, but I will increase the amount of money significantly in the red packets from this year on.
In the spirit of giving, I will also make larger donations to the list of charities I have been supporting.
There are many unfortunate people in this world.
Although we cannot possibly help all of them, if we can help some of them, why not?
It is about doing what we can to make the world a better place.
4. Passive income all gone!
These are the reasons for the title of this blog.
OK, probably not all my passive income is gone but it will be mostly gone.
Consumed.
So, you can imagine that I won't have very much passive income left to increase the size of my investment portfolio meaningfully henceforth.
Having said this, I will continue to making VC to my CPF account or buy SSBs yearly.
This will not change as I believe having some risk free and volatility free investments for income is simply being prudent.
So, how do I feel now that I have decided on all these?
I feel good.
Really good.
It is like a lightbulb switching on in my mind.
In a recent blog, I said early retiree AK still needed $136,000 yearly.
Would I be growing richer or poorer?
That provided the seed for this blog post.
We only need so much money in life and the rest is for showing off.
Hi AK,
ReplyDeleteThis is inspirational.
"We only need so much money in life and the rest is for showing off."
This phase make a lasting impression.
As i get older, i also think about paying forward to the communities
Just this week, i receive an invite from CPF to be become a CPF volunteer. I have just signed up today and will cater some time into it in the near future.
Hi Solace,
ReplyDeleteGood on you!
Volunteering your time to educate people on the CPF system is worthwhile. :)
I have done it myself but through blogging. ;p
Commendable kind gesture to be grateful to your parents (报答养育之恩)!!!
ReplyDeleteI have a sibling who earns likely in your dividend income ($206k yearly is about $17,166 monthly Income)
but only contributes measly $400 monthly allowance to my 88- years old mum! (my dad had passed away)
Hi Candy,
ReplyDeleteThank you for your kind words. :)
I cannot comment on what your sibling is doing or, more accurately, not doing.
All of us have our own beliefs and values, after all.
I can only talk to myself about what I am doing and, hopefully, inspire some people in the process. :)
Hi AK,
ReplyDeleteWhat a kind and commendable gesture of your part! Reminds me of the advice given in the book 'Die with Zero' - to live rich (alongside loved ones around you) instead of dying rich
Hi AK, just to share another 好人好事,
ReplyDeletemy friend's younger sister was very generous to bestow monthly cash blessings of $100 to her 2 daughters
and always dishing out fat angbao ($300) during Xmas, CNY (not required as she's single in her 50's) and their birthdays! 👍
Life is short. If you like it, you want to do it and you can afford to do it. Just do it.
ReplyDeleteLife is too short to have regrets.
Hi AK,
ReplyDeleteIt is a real bummer isnt it? Sometimes we worry we dont have enough and sometimes we also worry that when we have too much much we are showing off?
I always feel that the best way we can help others is to be in a position to help and not be among those that needed help and be competing with them for help. Thus, it is important that we are self reliant first.
Personally I think one of the solutions to address the "on & off" episodes of worrying whether one has enough or not is to work and earn a regular income (this is especially powerful when one has already attained FI). At FI, one can really save 100% or more of the active income every year. Seeing your NW grow steadily and solidifying your FI is good medicine to minimise or remove that worry about not having enough.
The solution to the worry about having too much and about showing off is NOT to show off in the first place. You can continue to channel excess money into the CPF, equities, gold and even property if the excess cash is substantial. You dont see money lying around in your bank account and you wont feel rich.
There are many things to enjoy in life and many of them do not require much money while others do. Have a mix of both types of activities to have a fuller life experience.
Things that one can enjoy without much resources is hiking in nature parks, games that foster social interaction such as tennis, pickle ball, table tennis, badminton etc..,
Things that can enrich one's life and require substantial resource is traveling. Saint Augustine said that the world is like a book. Those who dont travel read only page one. And when you are older, you do want to travel in comfort. No more back packing and no more staying in hostels.
And when you are older, you also eat less. When you can only eat so much, you do want to eat eat better. Better food and in better ambience.
Bottomline is when one grows older, one should pamper oneself and live life with little or no regret. The more resources we have, the more we can do and with better peace of mind.
What I am after :
1. A fulfilling life with little or no regret
2. A life enriched with many pages of the world book read.
3. Peace of mind - free from money worries
4. Helping others in their wealth building journey
I wrongly thought Point 4 was simple but it did not sit well with many FIRErs. Essentially in point 4, I pointed out that when one achieved FI, it is the best time to power boost (& solidify) their FI situation by continuing to work. It is the time where they could theoretically save 100% or more of their work income. Stretch that period a little more and they should see their savings (NW) grow strongly!
I am speaking from my own personal experience. We attained FI in 2016 when our passive income just matched our annual expenses. We continued to work beyond that and saw the savings rate accelerated, further cementing our FI position.
Happy holiday!
Hi AK,
ReplyDeleteUnlike you, I am exploring HDB Lease Buy Back for my parents so I can lower my burden and start to look at my retirement plans while ensuring there is stable continuity in terms of money inflow for them.
Any thoughts you may have of this?
Hi Brina,
ReplyDeleteThanks for the kind words. :)
As much as I like the idea of dying with zero, I still want to leave a legacy for my younger family members.
I also want to start a named bursary for needy students in my final days in the world.
So, I cannot die with zero. ;p
Hi Candy,
ReplyDeleteThanks for sharing. :)
I wish there is more kindness in this world. :)
Hi Capricon,
ReplyDeleteYeah, I like to keep things as simple as possible. :D
Been like this since I retired 8 years ago.
Terminated credit cards until only 1 left.
Shut down bank accounts until 4 left.
Don't want to have too much clutter in my life. :)
Hi TDT,
ReplyDeleteExactly right!
We can go kaput quite suddenly.
I want to do more for my family members while we are all still around.
I want to help as many people as I can while I am still able.
Some say I am already doing this with my blog and now my YouTube videos too.
However, there are many who can never benefit from my ideas because of difficult circumstances.
That's where donations to charities come in. :)
Hi MSI,
ReplyDeleteWell, I do know some people who enjoy seeing their wealth grow even though they have achieved financial freedom.
There is nothing wrong with that, and if it makes you happy, go for it. :)
I mean look at Li Ka Shing and some prominent businessmen who keep growing their wealth.
However, I am more inspired by Warren Buffett and Bill Gates.
I am not suggesting that everyone do what I do.
This is just me talking to myself, as usual. :)
Hi A,
ReplyDeleteFor sure, there is no one size fits all solution.
All of us have our own circumstances to consider.
Whatever works, right? :)
My parents have no intention of doing a reverse mortgage on our family home.
If your parents do not object to your idea of unlocking value using HDB Lease Buy Back scheme, why not?
Hi AK,
ReplyDeleteThanks very much for your responding so quickly with your thoughts. Appreciate it. :)
There is this little part of whether it might be 不孝 or 自私 gnawing.
Do have a good Saturday evening!
Hi AK,
ReplyDeleteI considered myself very fortunate compared to others.
I have been financially supporting my elderly mum as a filial son and my nephew's education for his future. At times I also show some appreciation to strangers. Your sharing is an inspiration for me and i will certainly try to do more in the future.
Hi A,
ReplyDeleteYou are a kind person when you think of your parents and how to ensure they have enough in retirement.
I don't think people can say you are not filial or being selfish without knowing your circumstances.
All of us have different circumstances and would have to do what is within our ability to do. :)
Hi AT_AT,
ReplyDeleteI agree that if we are more fortunate than others, we should help out more.
Investors are definitely a fortunate bunch since we have spare money to invest with.
Of course, how we get that spare money is another topic and sometimes some of us might not have too much to spare. Hard truth.
I am just sharing my future plan in this blog post but if I have inspired some people along the way, I am glad. :)
You are a role model to Singaporeans for your generosity to your parents as well as your ability to be generous.
ReplyDeleteBeing filial is not enough by itself if a person lacks the earning power to repay kindness to his parents. I hope what you did inspires other Singaporeans to strive hard to repay kindness to their loved ones.
Most Singaporeans will not be able to give as much as you did to their parents but we should try our best to repay their kindness as much as possible, as soon as possible before they pass away.
I started reading your blog a long long time ago. I do not read all the articles. I am not into gaming or even building passive income simply for the joy of seeing that number grow. However, when you write articles that inspire people with your generosity, it catches my attention.
Take care!
"I also want to
ReplyDeletestart a named BURSARY for needy students
in my final days in the world." - AK71
Hi AK, that's a particular marvellous idea! 👍💡🏆
A simple criteria like gross monthly household income or gross monthly per capita income will be most helpful for dispensing financial assistance to the needy students.
Don't need to show proof of latest 1 month bank statement like ComC lah! 🤨😮💨
Very grateful to receive bursary from NTU for my boy's 1st year of study.
Simple criteria for NTU bursary: (just list 2 top and bottom limits of Gross Monthly household income (GHI) or Gross monthly Household per capita income (PCI)
1) PCI ($750 or lesser) or GHI ($3k or lesser) - bursary grant of $6,500
2) PCI ($1,876-$2,500) or GHI ($7,51 - $1,000) - bursary grant of $1,350
My girl has a classmate whose family income (family of 4) is about $4k but don't qualify for financial assistance.
ReplyDelete(Comcare requires stringent criteria of monthly household income per capita of $800 and below)
This classmate fare badly in her academic results (E8 in English & Chemistry, likely to get conditional pass for English to progress to Sec 4 next year),
disclosed to my girl that she has neither travel to anywhere, not even nearby Msia trip so nor ever tasted Haagen Daas ice cream, (likewise this was considered a luxury for me for a family of 6 living in 3-rm flat when I was young)
something that most Singaporeans taken for granted.
Hi Market Observer,
ReplyDeleteThere was a time when I was laser focused on growing my passive income.
I was happy just to see the number grow bigger over time.
I am a worrier by nature and I always worried about not having enough money.
About 10 years ago, I started worrying about whether my parents would have enough money.
A few years ago, this worry started a whole series of blog posts on how I was providing my parents with more financial support.
And this blog post is the latest in the series.
I wouldn't say I am a role model and I am definitely not saying that everyone should do what I am doing.
I am not sandwiched since I am single.
So, I can do more for my parents.
Of course, if talking to myself has been a positive influence on readers, I am happy. :)
Hi Candy,
ReplyDeleteI am exploring the possibility of creating a named bursary for undergraduates in NUS.
Personally, I was able to complete my tertiary education thanks to a government scholarship.
Very grateful.
Must count our blessings. :)
Helping needy students financially has always been one of the things I do.
And I will continue to do it. :)
good man, taking care parents and siblings! Money is number, can do something meaningful, feel so good!
ReplyDeleteHi MilkTeaBro,
ReplyDeleteMoney is a non-living thing and if it can be used to help the living, why not?
I like to think that I am growing wiser as I grow older. :)
Thanks for sharing. Your financial journey truly is aspirational.
ReplyDeleteHi zhenling,
ReplyDeleteWell, if I can inspire more people to aspire towards financial freedom, I am glad. :)
I truly believe if AK can do it, so can you! :D
Another inspiring post from AK, which kept me going through some of my darkest days of my wealth journey. We have 2 kids and being sandwich generation, really not easy. Brought our kids to holidays in nearby asean cities in the past 10 years. Even went twice with my own elderly parents. We poor , still stay in small hdb flat and never bought 4-wheels, am big fan of MRT and SBS bus, love it really. Recently I kena flag out by my friend for not willing to spend on thousand dollars smart phone, what surprises me is not the price tag, but needing a overpriced phone or foldable bikes has become the "new normal" for quite a few people around me, wonder how our parents generation even survive without all this. Anyway, keeping fingers and toes crossed, be lucky if we can retire around 57-58 y old, which quite a lot of people tell me is still young to retire. We won't get to FIRE, but more like slow cooked FIRE.. haha, Keep up your good work my friend.
ReplyDeleteHi C,
ReplyDeleteIt is more demanding when we have children, for sure.
So, you are doing a really good job of providing for them and taking care of your parents at the same time.
Ignore your friends who make snide remarks about your prudent habits.
There is no need to keep changing phones or buy expensive anything.
If we keep our needs simple and our wants few, we will have less to worry about financially and we will have a more comfortable retirement.
If AK can do it, so can you. :)
Hi Ak,
ReplyDeleteIt’s great you give to charity. Can share how you go about it and how what are your feelings and thoughts after giving? I share mine first here in interest of open sharing.
1) remember long time ago PM Goh lamented Singaporeans give very little and mused that if only Singaporeans can give 1% of income annually. So wife & I decided we will give 2% of annual
Income and capital gains yearly. For us it’s a 5 figure sum.
2) We give spontaneously based on what we encounter. for new charities I do look at their annual report to make sure decently run. Charity portal lists all of them. Cheque sizes range from $500 to 10k. We track how much each year and keep a tab of how much we still have to give assuming 2% of all gains and income each year is oweing to be donated. I am trying to accumulate a larger 6 digit lump sum to really go deeper down the road.
3) mostly given to really needy (like disaster overseas), catholic welfare organizations and education. I try to avoid helping organizations that are already rich. Eg local universities, IHL
4) we also volunteer on the boards of some education institutes. So we see that as giving our time and dont donate cash to them.
5) we don’t want recognition nor do we want the giving to be high cost of goods to collect. Eg charity gala, auctions etc.
My experience so far giving is we get a nice feeling giving. And it’s a way to remember how lucky we are and help fellow humans. However, it is very bystander activity. So I am leaving a sum to snowball to maybe $250-500k. Then it can be a meaningful bursary or endowment for really needy organization and for that org, we will want to get involved with selection and our time…
Do you think similar thoughts and is your giving ratio/philosophy the same?
Hi Der Shing,
ReplyDeleteThanks for sharing your thoughts and methods on being charitable.
I have always believed in being charitable.
There are always people less fortunate.
I have been blogging about being charitable ever since I started my blog.
This was from 2013, for example:
An appeal for funds.
This was an invitation from NUS to attend a dinner function to thank their bigger donors but I didn't attend:
Invitation by NUS.
To be honest, I don't really care for such events.
I plan to die penniless and will set up named bursaries in my old age.
So, unless something terrible happens to my portfolio, I would create many bursaries and they should be worth a few million dollars in total.
We only need so much money in life; the rest is for showing off. ;)
Ak, thanks for replying. I think it’s make perfect sense to give everything away since you don’t have kids to pass to.
ReplyDeleteCan you share how you go about deciding how much while still alive to give annually? Do you have a formula like we do?
Also how do you decide who to give to? New ones each year or always same beneficiaries? How do you feel about donating then it goes into an endowment ? Esp for those already very rich institutes? You do know NUS and like are super rich in endowment terms while some other charities have only 0 or 1 year reserves. Not trying to question but want to hear your logic.
My side, we have 4 kids and so have not decided how much to give to charity when much older or after death. The 2% rule is while we are still very much alive. Right now, I would think if it’s in millions, probably to underprivileged kids in ITE or to help people in bottom 10% of population who really don’t get much help. Or even global charities that are helping the dirt poor in 3rd world countries.
Hi Der Shing,
ReplyDeleteTo be quite honest, even if I had kids, I would not leave them a lot of money.
Regular readers of my blog would know that I like to say children should find their own way in life and create their own wealth.
Easy money for children is a bad thing.
As for why I donate to NUS, quite simply, it was my school and I want to help my juniors. ;)
I did donate to NTU once at the request of a reader but they were terrible.
Did not issue me a receipt and when I tried to get in touch, no response.
Anyway, no formula for annual donations for me.
I just feel a total of $10,000 a year is a pretty good number.
In percentage terms, that would be about 5% of my 2022 passive income.
I have a list of charities in Singapore I am comfortable with and have no intention of adding to the list.
Can't help all the people in the world, of course. ;)