I could not afford it but now I can.

In the past, my mattresses cost between $150 to $400 each. I am usually not very picky and the price is more important a consideration. 

My last mattress was a queen size mattress from IKEA that cost about $400. Maybe, a bit lesser than that.

However, as I age and am more prone to aches, I have become more aware of why I should get a good mattress that is suitable for me. So, I decided to "invest" in a good mattress in the hope of sleeping better. 




OK, we can have a debate on whether a good mattress is an investment or a consumption item later.

Anyway, I visited quite a few stores and two of them were branches of big local chain stores. There were so many brands available and almost all of them had some kind of special offer going on. The many different types of mattresses on offer were impressive.

Some salespeople were very good while some really needed more training. Some stores had more ammunition to help their salespeople get more business too.

I lingered on a couple of mattresses because I rather liked them. They cost between $3,000 to $4,000. 

Almost right away, the salespeople would say how I could pay for them with easy instalments and that I should not have to worry about the seemingly high prices.

OK, it might be my fault for giving them the impression that I needed to pay by instalments because I was wearing a very worn (and some parts torn) cargo pants and a ratty looking t-shirt. 

However, I wondered how many people bought those mattresses even though they might not have been able to pay $3,000 to $4,000 in a single payment?


"I could not afford it but now I can."

Sounds good?

That sentence is incomplete, actually.

"I could not afford it but now I can because they are letting me pay in instalments."

Doesn't sound so good anymore, does it?

In fact, even if we had the money to pay $3,000 to $4,000 for a mattress in a single payment, we might want to try delaying gratification. Put the money to work and, then, buy the mattress 10 years later.


OK, I can imagine some readers getting ready to give me a piece of their minds on this matter now. 

Just because I waited almost 20 years to get an atas mattress doesn't mean that others must do it too.

Well, it doesn't have to be a mattress per se but you get the idea.



Could be mistaken for a mattress.

Payment by instalments for consumption items is really giving in to instant gratification. 

It does nothing to create wealth and, in fact, holds us back for as long as it takes to make full payment for these purchases. The opportunity cost could be quite astounding too.

So, what would sound good?

"I could not afford it but now I can have it and keep my money too."

Wait, I close my door first. OK, you can start throwing things at me now. Nothing explosive, please.

Related posts:
1. The evil instalment schemes and their minions.
2. The Millionaire Next Door.
3. An easy way to improve cash flow in life.

Are you financially on track for retirement?

I chanced upon this over the weekend and think it is interesting enough to share.

Source: JP Morgan Asset Management

So, according to this, if we are 40 years old and making $75,000 a year, we should have $120,000 put aside for retirement by now.

By putting aside, it doesn't mean just stashing the money in a mattress or a mooncake tin, it means having money in investments which are producing a 7% annual return.

I thought of tweaking this so that it takes into consideration CPF savings. After all, a Singaporean who is 40 years old could have been working for 15 to 20 years already. There could be quite a bit of savings in his CPF account.

Then, I decided not to bother because most Singaporeans will use their CPF savings to pay for their home. How much of their CPF would they utilise and whether they would monetise their home now or in the future is hard to say.

Anyway, this table also assumes that there is a 2.5% annual wage increment (and no chance of any job promotion). There are also the assumptions that the retirement age is 65 and that the accumulated money must last for 30 years of retirement (i.e. till age 95).

In case you are wondering, Singaporean females have a life expectancy of 85 years and males have a life expectancy of 80 years. So, 95 seems to be generously realistic.

Of course, there are probably quite a few holes we can poke in the table above. However, I feel that this table is useful as a wake up call for people who do not have at least what it says we should have in liquid assets at this current point in time earmarked for retirement, excluding CPF savings and emergency funds.

They are probably not saving enough and should take action to improve their financial health quite rapidly. The earlier they realise this, the better. The longer they have to save and invest, the better. If we know of such people and if we could give them a nudge in the right direction, the better.

Related posts:
1. To retire by age 45, start with a plan.
2. How to have a comfortable retirement?
3. IPS Forum on CPF: Housing and the CPF.
4. 5 points you ignore at your own risk.
6. SRS: A brief analysis.