SG BONUS for all Singaporeans.

I received an SMS earlier today to say that I am getting a $200 red packet.

Wow! There is such a thing as a free lunch, after all!

Actually, $200 could probably buy me lunch 50 times over!

What am I talking about?

SG BONUS, of course.

Eligible Singaporeans will get a minimum of $100.

How much we get depends on our income in 2016 (YA 2017).

See the table here:

All eligible Singaporeans will be paid by end of this year.

Now, if only income in 2017 (YA 2018) was used instead, then, I would get $100 more and could include some ice cream for lunch.

I was still doing some part time work in 2016.

A short video on Budget 2018:

If you are a Singaporean and have yet to receive notification, you can use your SingPass to check online as to how much you will be getting.

Check with your SingPass: 

HERE. 

Crazy Rich Asians or Pragmatic Rich Asians?

I know my blog has some reach beyond the shores of our tiny island nation of Singapore.

Remember how I received a not too glamorous award from a forum in China recently?

See:
Once upon a time in China, Weibo says 铁公鸡AK 还好没结婚!






I would like to share a conversation I had with a reader from Hong Kong some time ago:

Reader says...
Hope you don't mind a guy from H.K. dropping a line.

Indeed I used to stay in Singapore for a few years back 20 years ago.

As far as I know Singaporeans at that time liked luxury items, and home as well of course.

It is kind of having face, isn't it?

Glad to find AK's blog which share a different view from the majority (Forgive me, if this sounds offensive, on my poor English).

Personally I do agree with your mentality but I think You would appear a bit odd in the main stream?






AK says...
I think having face is more important in Asian societies compared to western societies.

I could be wrong but this is from my own observation and Hong Kong is probably the same as Singapore in this respect.

Me? 

I am crazy. ;p

(But not a Crazy Rich Asian hor.)







Reader says...
You are right that face matters in Asian community so does it in H.K. as well.

I am not sure if I still understand Singaporean correctly now but as far as Honkies, I think they are more pragmatic than their counterparts.

I don't say they don't care face but when it comes to money, they prefer money more than face.

People on the street don't put many luxury branded things on them.

I think they like the (saved) money better.





I did find that you guys discussed a lot on financial freedom but don't you guys have the CPF which is supposed to support the post retirement living?

Is it not adequate for the purpose or you guys just want a better than standard living, apart from the possible and unpredictable retrenchment?

Guys, here in H.K. also has a growing concern about financial freedom because our MPF, a copycat of CPF but much less effective, is just a joke.

We really need to be on our own feet after retirement.

No la, you are not crazy at all but just pragmatic and rational.






AK says...
Thank goodness we have the CPF! :)

However, not every CPF member knows how to make good use of it.

For those who know, who are able and willing to, they could have a million dollars in their CPF by the time they retire from active employment.

Enough or not?

That depends on the individual. ;)

A problem with our CPF system is that the government allows members to use their CPF savings for too many things and people forget the primary purpose of the CPF.

More and more CPF members who have used their CPF savings to pay for their homes might find out as they grow older that they might not have enough CPF savings to fund their retirement.






Is it true that Hong Kong people are more pragmatic than Singaporeans?

Do they care more about having money than having face?

I don't know but I know that housing cost is through the roof in Hong Kong and I know that unlike our CPF system, their MPF does not provide a relatively reasonable risk free return.

So, perhaps, this is why they are more worried than Singaporeans about their personal financial health.





I was once told that if we can climb the corporate ladder in Hong Kong successfully, we can do well anywhere in the world because it is that stressful.

I am very fortunate to be a Singaporean and this is one blessing I count all the time.

My fellow Singaporeans, we might not be Crazy Rich Asians but if we do the right things, we will be Pragmatic Rich Asians.

If AK can do it, so can you!






Related posts:
1. If we are not rich, don't act rich.
2. Almost 55, worried about CPF.
3. FRS by age 35 and $1M in CPF.

Give me the freedom to enjoy life!

Reader says...

Excluding cases where they need to work to have the $ to pay bills, be it for self, family or descendants.

Most of the people I know in their 50-70’s would prefer working than the so-called relax life.

A granny lament she would rather work than “enjoy life” at home.






2 other aunties I know of took up a 4-5 hour/day job after retiring.

Their jobs are not the physically demanding kind. It’s mostly light duties in a comfortable pace environment.

Not everyone views work the same way, like a chore.






AK says...

Of course, not everyone is lazy like AK. ;p

I am not suggesting nor would I ever suggest that everyone be like me.

What would happen to Singapore then? :o






"If AK can do it, so can you!"

It isn't a war cry for people to achieve financial freedom and become a full time gamer like me.

It is simply an encouragement for people to achieve financial freedom because being financially free gives us options.






Simply put,

We want to work because we want to and not because we have to.

Financial freedom affords us this enviable position in life.









If we are working because we need the money, how like that?

If we are working because we want the money, why like that?

If we are working because we simply enjoy working, why not like that?

Give me the freedom to enjoy life!









Related post:
Average income workers can be rich too!

Survivability and opportunity in times of distress. ("E-book")

Be warned.

This blog could be considered heavy reading, especially on a weekend.

From time to time, I still read or hear people say that an emergency fund is really over rated and that there is no need to have one.

Of course, regular readers know that I disagree with this and that I even have an emergency fund that does not only cover 24 months of my own expenses but my parents' as well (and then some).

Bad things do happen in life and that is what insurance is for but if we buy insurance for all the things we could possibly think of that could go wrong in life, we could go broke.

Yes, buying insurance for everything that could go wrong in life is wrong and I have blogged about this before too.

See Chapter 1:
How insurance weakened a family?






Then, there are those investors who have an emergency fund but do not believe in having a war chest, preferring to stay almost 100% invested all the time.

To me, there are times to be 100% invested but, most of the time, it probably isn't a good idea.

There are many reasons why and one is that those who do not have a war chest might be tempted to use their emergency fund, if they have one, to invest with if Mr. Market goes into a depression.

No! No! A thousand times, no!

I have said before that we should not invest with money we have earmarked for other purposes.

We do not want to be caught in a situation where we have to sell at whatever price Mr. Market offers because we have no choice.

See Chapter 2:
This way to $50K passive income?





Yes, it can happen.

Remember, if Mr. Market goes into a depression, possibly, it is because the real economy is in a bad shape and we might lose the job we depend on to bring home the bacon.

Of course, if you are born with a spoon made of some precious metal in your mouth, please ignore this blog.

See Chapter 3:
My family almost went bankrupt.






The no emergency fund and no war chest camp sometimes say that the option to borrow money is always available.

Of course, regular readers know that I think it is a bad idea to think like this.

The Global Financial Crisis happened 10 years ago but human beings have a short memory.

Still, some of us might remember how difficult it was to borrow money then.

Don't put ourselves in a situation where we have to borrow money.

It is not a good place to be.

See Chapter 4:
Compared to anger, shame is a thousand times worse!

So, is debt a bad thing?

No, that is not what I am saying.

I am saying that depending too much on debt is a bad thing.

Debt is really just a tool.

If we think about it, it is just a tool that magnifies our financial decisions.

If we make good decisions, they will look better with debt.

If we make bad decisions, they will look worse with debt.

See Chapter 5:
Gear up and receive more income?






Debt cuts both ways but it is just a tool.

The danger always lies in human behavior and their feeling of invincibility.

If we keep using debt, we might get drunk on debt and history has shown this to be the case.

Overly dependent on debt, people over extended themselves.

Overly leveraged, when things did not go as planned, they could not repay their debt sufficiently and went bankrupt.

See Chapter 6:
When are we over leveraged?







So, I did not mention the Global Financial Crisis just for fun.

It should be remembered and be used to stress test our finances as the worst possible financial storm that could hit us.

Without an emergency fund and a war chest but, instead, have quite a bit of debt, could we survive or do better in another Global Financial Crisis?

It doesn't matter if we have good or bad debt, debt is debt and this question should be in our base plan.

Do you believe that good debt can go bad quite quickly during hard times?

See Chapter 7:
Don't think and grow rich!







Yes, it is true that there is an opportunity cost in holding an emergency fund and a war chest.

However, having these will improve our survivability and let us capitalise on opportunities in times of distress.

They are self insurance policies.

Opportunity cost?

It really is a small price to pay.

Of course, I have blogged about how having a steady stream of passive income is self insurance too but that is another topic.

See Chapter 8:
Best insurance in life.







No emergency fund and no war chest?

You could be doing yourself a big disservice.

See Epilogue:
How much should you have in an emergency fund?

What is worse than growing old and destitute?

I have blogged about my fear of growing old and destitute many times before.

Indeed, it is this fear that helps shape the person that is AK and not just in terms of money matters.

However, what is worse than growing old and destitute?

Today, I had a chat with a fellow blogger:

FB:
Oh .. I wanted to ask a qn

Suddenly figure out the answwr

Hahahahaha sorry

AK:
LOL





FB:
Was wondering when I buy using CPF, SRS and cash

When I sell, how they know which to sell?

AK:
:o

FB:
Then I realised I put the option

Ya I know I getting stupid hahahahaha

AK:
no lah... growing older is liddat

dementia

cham liao





FB:
I still young at heart

Just old at the mind

How are u getting on

AK:
I am growing old and forgetful like u 😛

FB:
hope to catch u and others at your evening. 

I live by the day,hopefully tickets still available

AK:
I think u missed this blog:

https://singaporeanstocksinvestor.blogspot.com/2018/08/evening-with-ak-and-friends-2018-update.html






Alamak!

So, what is worse than growing old and destitute?

Possibly, being rich and suffering from dementia!

Hey, it might sound funny to some of you but I am serious hor.

OK, at least half serious.





Remember the real story of the rich old lady who was cheated of her money by some tour guide?

At least in that case, her daughter found out and took action.

Or was it her grand-daughter?

Oh, no! I cannot remember.

Anyway, how many similar cases go unnoticed or unreported?





So, what is worse than growing old and destitute?

Maybe it is not being rich and suffering from dementia.

Maybe it is from being rich and suffering from dementia to being old and destitute!

The horror!






Happy Saturday!

Related post (maybe):
CPF is all we need unless we are very rich.

Once upon a time in China, Weibo says 铁公鸡AK 还好没结婚!

A friend told me recently that I have followers in an air mile club and that my blog's outreach is quite widespread.

He went on to share a screen capture when I expressed my disbelief.

Air mile club?

I haven't clocked a single air mile in years.






When I was much younger, I enjoyed taking flights but not anymore.

I find that it is uncomfortable and inconvenient in more ways than one.

However, the catalyst for this blog was really what a reader shared with me recently and it was something that happened in a Weibo forum in China!

Forumer #1
坚决以贫困收入过中产生活本土坡人，很多挺有钱的，却总以中产收入过着贫困线的生活，不舍得吃不舍得穿，铁公鸡一毛不拔，还归因于新加坡太贵啦什么的，明明就是自己格调太低、生活无趣、好吗

Forumer #2
你说的让我想起一个非常著名的新加坡人 AK47
他的博客在这里
https://singaporeanstocksinvestor.blogspot.com/

他47岁，不工作了，住永久地契的公寓，未婚，每个月股息红利超过10,000. 新加坡股息免税， 所以他一分钱所得税也不用交。

然而他每天就吃自己做的青菜。在家看书，听音乐，打游戏。好像也不出国旅游。我估计每个月花费不超过一千。

存在即合理。他之所以这样，部分和他小时候经历有关。他的父母本来中产偏上，后来经济危机，差点破产。所以他立志不要走上父母的老路。他年轻的时候曾经一起打三份工。现在，他说他想做他想做的事情。

他经常戴面罩演讲在投资论坛， 很有名。

Forumer #1
还好没结婚
不然我该同情他老婆或者老公了

(Use Google Translate. I did.)








LOL!

I fell off my chair!

ROFL!

See? I am doing all the ladies a favor by staying single.

AK hero!

Yes, I know.

Bad AK! Bad AK!





Actually, I like this more:

Why changed topic? I blur.

Related post:
How AK created a 6 digits passive income?

"My parents are my ATM."

Reader says...
Hahaha, AK, I actually really like how you refer kids as consumption or hobby items.

Really turned on a light bulb for me.

Looking back, my kids have indeed been an expensive (underestimated the costs!) but enjoyable hobby for me.






A lot more fun when they were younger... less fun as they get bigger and sad thing is one day this hobby will have to end for me.

Though expensive, but finite, guess I just have to enjoy it as much as I can now and think of way to optimize my expenses on this hobby! :)






AK says...
I like to think that for most people this "hobby" has a finite life as a money sink.

Unfortunately, for some, this "hobby" is a money pit, a bottomless pit that lasts a lifetime.

The horror!

Choy!

Bad AK! Bad AK!






For sure, we always hope for the best in everything we do.

However, having high expectations (i.e. being overly optimistic) could set us up for disappointment.

"Mr Tan retired with a sizeable nest egg. But soon, his children started borrowing money. Money that was never returned."

Watch the video:





Related posts:
1. Regrets helping son buy condo.
2. Attitude towards having children.

Planning for retirement early made early retirement possible.

I spent almost 20 years of my life working, focusing more on the money than on what I love doing.

Even as I made more money, my lifestyle remained more or less unchanged.

Since I did not need more money because I did not crave material upgrades in life, having more and more money didn't really make me happier.





If we are contented with what we already have, even if we make more money, we won't go and buy something frivolous.

As our income increased, if we did not upgrade our lifestyle, logically, there would be less fear of not having enough money in our old age.

I am happier now because I am spending time doing what I enjoy doing although they don't pay me a single cent or in the case of blogging not very well.

It is not about how much money I make anymore but how much joy I get from doing the stuff I do.






However, I am Gen X and I cannot help but wonder sometimes if I should stop bumming around.

Stop being economically inactive!

Hmm.

Nah.

Am I being irresponsible?

I like to think that I am being irresponsible in a responsible manner.

You blur?

I also blur.





To be honest, I have also learned to be reasonably more easy going with money because I can afford to as it makes life easier. 

No man is an island, if you know what I mean.

It is not easy to unlearn certain things but I like to think that I am making progress.

"OK, don't go overboard, AK!"

Who said that? Who? Who?

Must be the other AK.

What? You didn't know AK is mental?

Well, now, you know.






The firm belief that I must plan for retirement early has made my early retirement from employment possible.

I am just talking to myself, as usual.

I don't expect anyone to agree with me.

Remember, I am just a crazy guy.

You must be crazy to listen to a crazy guy.





However, if you are crazy like me, take heart because if AK can do it, so can you! 

100% (bonkers)!

Also published today:
No dividend because CEO was very sick!

Related posts:
1. Start with a plan!
2. Be idealistic?
3. AK should be ashamed!

Growing up to be truly rich!

Although we can say genetics make us what we are, our environment plays a part in making who we are.

If we are not careful, certain things we picked up in our younger days could set us back for life.

"Daddy, my classmate's family just moved into their new condominium. Has swimming pool and tennis court. So nice."

If a child said that to his father, I hope the father didn't say:

"His parents must be rich!"

Then, the child would grow up to think that anyone who buys expensive things must be rich.






"Wow, my colleague just bought a Ferrari. Must be rich!"

or

"Wahhhh. My supervisor just bought a Richard Mille watch. So rich. So good."

Yikes!

It is true that some rich people splurge on luxuries but it is not true that people who splurge on luxuries must be rich!







The truly rich are those who can afford to buy all the stuff they need and want

1. Even if they do not have any earned income

and

2. Without ever going into debt.

I believe that this is something that we should teach our children as soon as possible.






We will be improving their chances of growing up to be truly rich.

Related posts:
1. From rich to broke.
2. If we are not rich, don't act rich.

How to turn $60K into $332K?

Growing our wealth can be a daunting task especially when our resources are limited.

I think of wealth building as plucking fruits from a tree.

Being a lazy fellow, I try to use as little energy as possible and would go for low hanging fruits.





Why climb higher up to pluck fruits and risk a bad fall when there are low hanging fruits?

I would climb higher up when my tree climbing skill has improved or if there is a safety net to catch me if I were to fall.

Know what I mean?

Hint, hint.

Nudge, nudge.

Wink, wink.





I received this email from a reader:

Hi AK,
Thanks for sharing your knowledge with us young folks.

Saw you previously at investx.

I just did this calculation last night.

I realized if at 25 years old, you put in 40k into your SA and have 20k in your OA. 





Then you do not contribute a single cent from then on. 

Based on 5% interest on the first 40k in your SA, then 4%, and 3.5% on your first 20k in OA, then 2.5%, at the end of 40 years, at 65 years old, 60k would have become $332k.

This is without doing a single thing. It's actually quite impressive returns.

Cpf is good haha.





“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
― Albert Einstein

Correction by the reader:

The extra 1% from OA doesn't actually compound in OA. It is credited to SA. So for 20k in OA, the interest 1 yr later is 20500 in OA and an additional 200 into SA.

Furthermore, after 55yrs old, first 30k gets another 1%.

CPF has a lot of intricacies, but in the end, the magic of compounding is still wonderful!




This magic is very powerful!

Make it your friend!

If AK can do it, so can you!

Related posts:
1. Upsizing Oppa AK style!
2. $1 million in CPF by 65?

"Retrenched with almost zero compensation in my late 40s but..."

Serejouir said...
Hi AK,

I am a long time reader of your blog and felt compel to write in and share my own experience after reading about the reader who was jobless for almost a year.

I could not agree with you more on living prudently, avoiding unnecessary debt and investing in income generating tool. To add to that, we should also make an effort to to build up transferable skills.






I'm in my late 40s and single, earning $8-9k a month. I was retrenched in Nov last year, a week before my 25th year anniversary with the company, with almost zero compensation.

Thankfully, I have minimal debt - only a property loan that I co-share with my sis, which we managed to 1) re-mortgage a few months before my retrenchment; & 2) rented out albeit lower than our monthly loan payment at the moment.

Thankfully too, I am not into any of those designer stuff nor eating in those fancy restaurant. While I do enjoy an overseas holiday, 5-star hotel and shopping are not my cup of tea; it is also not a must have that I am willing to get into debt for, like many of my friends.

A quick calculation on the back of the envelop, gave me the assurance that my savings + investment returns can last me for 1-2 years, without having to liquidate any of my investment immediately. 

I would still be able to maintain the current lifestyle while still giving my parents their monthly living allowance.






Nevertheless, I also started to examine whether there are any other "frills"/"good to haves" that I can cut back on, so as to make my savings last even longer as well as in anticipation of a drastic pay cut in a new job.

This thought of financial security also gave me the safety net of having a bit of time on my side to evaluate what I want out of life and to get a job that I would enjoy doing, and not one that I have to work for a pay check.

While investing wisely for a secure financial future, I believe one must also look into investing in ourselves, so as to ensure that we have transferable skills that we can bring with us everywhere we turn to.






I also like what you said about keeping an open mind when it comes to job search.

I spent the last 20+ years in technology/manufacturing sector before I was retrenched.

In March this year, 3 months after I was retrenched, I got a new job in the healthcare sector, a totally new and alien industry to me. 

It was a very steep learning curve for me - job responsibilities were very different but I was able to tap on the analytical and management skills as well as various soft skills that I have picked up all these years. 

I find my current job very fulfilling and I really enjoyed what I am doing. To top it off, I not only did not suffer a pay cut but actually was offered a higher salary!






AK says:

Big "thank you" to Serejouir for sharing his experience and advice.

Being retrenched is tough, no matter how we slice it. However, if we are prepared, we will be less badly affected.

So, remember, if Serejouir can do it, so can you!

Gambatte!

Watch the video. He was retrenched after working as a manager for thirty years.







Related post:
Jobless for almost a year and losing my mind.