3 good reasons to buy a car. (Buy a car with 4D winnings or win again?)

Reader:
I want to thank you... A friend shared your 4d pick at a gathering... I am a gambler and I bought the most... I have never won so much money gambling before...  He told me to top up my CPF but I have been thinking of buying a car...








AK:
Welcome to my blog. I will not tell you not to buy a car if you are one of the following:

#1 If you NEED a car and if you have the money for the upkeep, buy it. Upkeep? Yes, road tax, insurance, maintenance. You know. Upkeep. Paying for fuel, parking and ERP are just the smaller expenses.





#2 If you are able to make more money from owning a car, why not? If you are an UBER driver renting a car now, for example, you could save (what an UBER driver told me) $70 a day in rental. That works out to be $2,100 in a 30 day month! That's a lot of money.






#3 If you have enough money today to last you till the day you die without having to work another day of your life, if you WANT a car, what's stopping you? Hey, Y.O.L.O. See? AK is not unreasonable nor extreme like what some people say.

Now, if you are none of the above, what do you do? 

Don't buy a car! 

Why not consider this instead?

The CPF Full Retirement Sum (FRS) is now $166,000. So, you are allowed to top up your CPF-SA to $166,000.





30 years from now even if there should be no more contribution to your CPF-SA from today (i.e. if you stop working today), compounding at 4% per annum, you would have $538,403.99 at age 55.

Then, after setting aside the prevailing FRS in your CPF-RA, you could withdraw the rest of the money if you like. 10 years from then, at age 65, you would also get a monthly income for life.






Oh, the calculation above did not take into consideration the additional 1% interest paid on the first $40K in your CPF-SA. Aiyoh, never mind lah. 1%? That is small money when you are rich, right? Kidding!

100% win rate. There is no easier way for a gambler to win money. Believe it!





Related posts:
1. Chinese New Year lucky 4D.
2. Don't have to be smart to be rich.
3. Showing off my CPF numbers!

The best insurance to have in life.

"Income investors love them and growth investors rarely expect them, but just what are dividends?"

I have blogged about how having passive income that equals our earned income over time will give us the option to work because we want to and not because we have to.

I have also blogged about why there is a higher purpose to having passive income in our lives.




Personally, I find all these reasons very persuasive and make working towards having a passive income stream in my life worthwhile.

Over the years, I have made contact with people who are not convinced. One example:

"I make so little money. Can't save much. Invest so little, what is the point?"





Aigoo... (I have been watching K-drama).

Actually, having passive income is also really a form of insurance.

It is an insurance against the possibility of an economic recession and a pay cut.

It is an insurance against the possibility of retrenchment.

It is an insurance against the possibility of disability which restricts us from active employment.




Insurance is important because bad things happen in life. Passive income is important and it is not just something that is nice to have.

Passive income is the best insurance to have in life because it is able to free up the most valuable resource we have in life and that is the resource of time.

Gradually, as our passive income grows from a stream to a river, our earned income could become something less critical.




Over time, our earned income could become something that is only nice to have.


Related posts:
1. Building an income portfolio.
2. Passive income: A higher purpose.
3. Do the right things and transform our lives.
4. Millionaire or not, plan for retirement.
5. Win $14,000 to $19,200 a year?
6. Matthew Seah on financial freedom.

Want to win $14,000 to $19,200 a year?

I know someone who would bet $300 to $400 every week on 4D and Toto. It is simply mind-boggling to me.

When I found out, I suggested that he should save the money every week instead.




To me, it is a no-brainer. 

I explained to him that, in a month, he would save $1,200 to $1,600 and in a year, he would save $14,400 to $19,200!

That is quite a lot of money.

His reply to me,

"Hey, what if I gave up and one of the 4D or Toto combinations I always buy appear as first prize har? You compensate me har?"

I was speechless! 




I mean if he had listened to me, I would have gone on to explain the next step of how he could invest that $14,400 to $19,200 a year for a dividend income of $720 to $960 a year which although not a lot is nice to have.

Then, imagine doing it year after year!

Gambling is like a drug.

This person is so hung up on the possibility of striking it rich and he has been doing this for so long that he is unable to quit for fear that all his previous "investment" would go to waste.




Chances of winning first prize in 4D is 1 in 10,000. 

Chances of winning first prize in Toto is 1 in 8,145,060!

How are the odds more attractive compared to a sure win of $14,000 to $19,200 per year?

Of course, let us not forget the possibility of a dividend income if the money was invested.

Well, he must think I am mental. Many patients in Buangkok Green share his view, I am sure.




"rationalizing foolish conduct, based on your subconscious tendency to serve yourself, is a terrible way to think." 
- Charlie Munger.

Update: 27 July 16

Matthew Seah:

TOTO now got more numbers to choose from..

Click to enlarge and be stunned like vegetable!

Related post:
Investing in stocks makes you a gambler.

What a visit to NTUC Fairprice could teach us about investing in stocks?

I have blogged about how to explain to sceptical family members that investing in the stock market is not the same as gambling. I have blogged about how soon should we start the next generation on investing and I have also recommended a book to this end.

These topics are evergreens. 5, 10 or 20 years later, we will still have people facing these issues, I don't doubt. To deal with these issues, it helps if we are more creative. Using examples from our daily life and using language free from financial jargon will probably see positive results.

For example, I would explain to my niece that when we see good value for money, we buy. So, seeing two 1kg packets of rolled oats selling at $6.95 instead of the usual $9.90, I bought right away. It was almost automatic. I didn't really have to think.

How sure was I that it was a good deal? Well, I probably consume more oats than the average Singaporean. I have oatmeal for breakfast everyday and sometimes for both breakfast and lunch. So, I know the price of rolled oats quite well. This is within my "circle of competence", so to speak.

Extending this example to the stock market, when prices of stocks we are familiar with or within our circle of competence fall to levels which offer good value for money, why do people hesitate to buy? Obviously, there is fear that prices could fall further. Then, what if prices did not fall further?

I blog continually about the importance of having a war chest. However, what is also important is having a reliable stream of income, passive income preferably.

If our war chest is smallish, it could get exhausted quickly. So, we will need a constant stream of income to fill it up. This is why investing for income is so relevant and, indeed, important.

Know people who think that investing in the stock market is too esoteric a subject? You might want to share AK's story about his circle of competence with packets of rolled oats which offered value for money.

Related posts:
1. Investing in the stock market is gambling!
2. If AK71 can cook, so can you!
3. At what age to start investing in stocks?
4. Let your child have fun and a head start in life.
5. Teaching young children financial literacy.

Investing in the stock market makes you a gambler!

A friend told me that he found it hard to explain to his parents that investing in the stock market was not gambling. 

They were always telling him to stop gambling in the stock market. 

To that, I said that his parents were right. 

He was shocked.

Why did I say that?

Well, all of us have our own perceptions and, to us, our perception is reality. 

Remember the story about the frog and the fish which shared a pond? 

When the frog told the fish that there was a different world outside the pond, the fish didn't believe the frog.

So, I told my friend that his folks were probably not able to understand concepts they had never heard of in their lives unless we put across the ideas in a way that they could relate to in everyday life.




I came up with this:

Try telling them that many rich people got rich through having successful businesses. 

I think they can understand this. 

Just give them some local examples which they are familiar with. Breadtalk and Old Chang Kee, perhaps.

So, if they want to be rich, they could start businesses too and hope to succeed. 

However, it is probably very risky and most of us do not have the capital, the know how or even the inclination to start our own businesses.




Of course, they could always be partners in a business venture and hope that the managing partners are capable enough to succeed and honest enough to share the fruits later on.

Now, at this point, tell them that the stock market is filled with businesses which they can become "partners" in. 

They just have to pick the right businesses. 

Right businesses? 

Yes, the ones with capable and honest management who are likely to succeed and share the fruits with them.




Well, my friend talked to his parents again and told me that although his parents are still sceptical about the stock market, they agreed that what he is doing seems less dicey compared to gambling. 

Of course, there is more to investing than what has been said but it is a start and my friend is happy enough.

If you find yourself in the same boat as my friend, you might want to give this approach a try. 

It could work for you too.

Related post:
Wealth creation in the stock market.

AK's AEI for Changi Airport!

These photos were taken in Las Vegas:

Looks like a casino?

Where is this place? There is a clue in the photo...

Gasp! The airport?! Bingo!

Singapore Changi International Airport could learn from this and generate extra revenue or not?

We have to make sure that the jackpot machines are found in designated areas only with attendants on duty to prevent under 18s from entering and losing their pocket money, of course.

Instead of painting yellow boundary lines around such areas, let us use green paint (the color of money) to differentiate them from the smoking areas.

You know what is the fantastic thing about this idea? Our country's airport already looks so fantabulous! There is no need to spend gazillions like MBS and RWS did just to house these jackpot machines!

Make full use of existing floor space! S-REITs call it AEI (asset enhancement initiatives)! I like it!

If Singapore takes to this idea, I hope the authorities would credit me with the idea.

Paying me a token (7 figure) sum in appreciation wouldn't hurt either. ;p

See photos of my recent trip to Las Vegas: here.

Related post:
Is gambling a bad thing?

Tea with AK71: Lucky 4D from ASSI.

In a blog post many moons ago, I asked if gambling was a bad thing. In that post, I said "From a money management standpoint once more, if we budget a small sum of money for entertainment and classify gambling as one form of entertainment, as long as we stay within what is budgeted, gambling would not become financially crippling and it might even be rewarding.  The Chinese people have a saying, "mai ge xi wang", or "buying a hope".  This, I feel, is not a bad thing." Read blog post here.

I have a habit of buying a few BIG SWEEP tickets every month. I would also try my luck at TOTO if the prize money is big enough such as the recent $5m TOTO.

Now, with the Chinese New Year coming up, perhaps I should try my luck once more! If we look at our telephones, we would realise that we could dial ASSI and the numbers are 2774. Could these be the lucky numbers for betting at 4D in the first week of the Chinese New Year?

Wishing all Chinese readers a Happy and Prosperous Chinese New Year! GONG XI FA CAI!

Just found this on YouTube. Not one of the traditional Chinese New Year songs. A mixture of new, old and funky! I like:

Money management: Is gambling a bad thing?

At first glance, the title of this post seems like a rhetorical question.  After all, the Chinese people have a saying, which literally translated would say "Ten gamble, nine lose." 

Even though the odds are stacked against us, many are attracted by the excitement that gambling offers and the possibility of instant riches.

Personally, I don't have a very strong stand for or against gambling.  However, from the standpoint of money management, anything that might cripple our finances should be avoided. 

At face value, rationally, since the chances of losing money is much higher compared to making it, gambling should be avoided like the plague (or H1N1, in today's context).

A real life story which I remember to this day was a TV interview with Ng Man Tat, a Hong Kong actor.  Before that interview, Ng was churning out movie after movie with Stephen Chow Sing Chi, the Hong Kong king of comedy, for a few years.  It was during that interview that I understood why. 

Ng was addicted to gambling and lost a fortune.  He approached Chow Yun Fatt, a Hong Kong superstar who has gone international, a very good friend, and asked for a loan but was turned down.  Initially, Ng was very angry with Chow but later on he became grateful as he worked hard to pay off his debts. 

Ng said that if Chow had helped him to pay off his debts, he would never learn and be rid of his addiction to gambling.

Many, if not all, of us must have a story or two to tell about the misfortune that gambling has brought to people we know directly or indirectly. 

However, we have also heard stories of people getting really rich through gambling, haven't we?  I remember reading in the papers how, over the years, in some months, the Singapore Sweep's top prize (which is S$2.2m today) was won by foreign workers who went back to their home country, bought land, became landlords, got married and lived happily ever after. 

OK, the last bit is just my imagination.

So, what am I trying to say? 

Well, I don't think gambling is totally bad.  It is not one of those things which is clear cut like a hit and run (which is what Dr Silviu Ionescu, the Romanian diplomat, is suspected of doing here in Singapore), rape, robbery or murder.  These are just plain evil. 

Gambling is more of a grey area.

From a money management standpoint once more, if we budget a small sum of money for entertainment and classify gambling as one form of entertainment, as long as we stay within what is budgeted, gambling would not become financially crippling and it might even be rewarding. 

The Chinese people have a saying, "mai ge xi wang", or "buying a hope".  This, I feel, is not a bad thing. 

If you are a regular reader of my blog, you could probably tell that I'm a pragmatist, not an idealist.  Everyone has his or her own beliefs and values.  Gambling is one of those issues that will always attract strong opinions.  That is why I thought about it for a long time before deciding to blog about it. 

I hope I won't be flamed for my ideas. -.-"

Interesting article:
http://sg.news.yahoo.com/cna/20100302/tap-130-casino-games-prove-popular-shops-231650b.html