To be richer, do not indulge in creature comforts. Really?

I am definitely not one of Starbucks' favourite people as I always tell family, friends and readers of my blog that Starbucks coffee is very expensive. 

I am always using Starbucks as an example of something that is really not a necessity in life. OK, for some of us, we need to drink coffee but do we need to drink Starbucks coffee? OK, definitely, their shareholders don't like me too.

Well, this is one of the perils of being the leader in an industry.  Yes, whenever I think of expensive coffee, I think of Starbucks. 

Depending on how you look at this, it could either be a good thing or a bad thing. So, maybe, they would look at it as a good thing, be flattered and don't dislike me that much.

Anyway, there are times when I would indulge in a bit of Starbucks coffee although I am not much of a coffee drinker, preferring tea most of the time. Iced mocha? I rather like that although friends have told me that it isn't real coffee. It is more like a chocolate plus coffee mixture. Adulterated. OK, I am not into gourmet coffee nor gourmet anything. If I like the taste, it is good for me.

So, when are the times I would indulge? Here is an example:

Yes, I know. I am terrible.

I think some readers would remember that I shared what David Gan said in an interview before:

"Tell you a secret. I have a bad habit. If it is not expensive, I don't buy."

People like David Gan would look down on people like me.

Well, AK has a secret too. Nah, I am not going to say it. I am sure you know what it is.

Anyway, I do agree that there is nothing wrong with indulging once in a while. For example, why have only one Fillet-O-Fish for lunch? Have two!

Easily my favourite thing on the menu at McDonald's but at $3.95 each, it isn't cheap. However, it looks much better when we have this:

It is not about not indulging in creature comforts, it is about looking to get greater value for money and trying not to pay full price for anything.

OK, I am feeling full and doubly happy now.

Related posts:
1. Kopi with Song Stonecold.
2. A meal for $2.00 from McDonald's.
3. Seven money habits of AK71's.

Newly married and planning to have a child: Questions.

Is there anyone here who might be in a similar situation as this reader?

Hi AK,

Happy weekend to you. I see that you have recently posted quite a lot on saving and contribution to SA for retirement. This has really set me into thinking, seeing the benefits of compound interest. 

However, as I only started to work for 2.5 years and juz got married and got a house, my situation may not be favourable for making huge moves in my savings. Below are some pointers that I may need your input.

1) I did think of volunteering to contribute to CPF thru cash but as I juz started a family, cash flow could be very important especially we are planning to have a kid next year. Would you advise us to still bite the bullet (like seriously) and still contribute or wait till we are more comfortable before we start contributing? We both own some small portfolio of reits.

2) As we find it hard to contribute cash to CPF, how about transfer in from OA to SA lump sum when we get our bonuses to exploit the higher Interest rates? Alternatively we can opt to pay down our house with the lump sum, which lower our loan and perhaps it more worth it as the small monthly payments we are paying now in the initial phase mostly go towards interest. :( What would you do if you are us? Haha

Thanks AK. As usual, look forward to your enlightening reply. :)

Regards,
B

My reply:

Hi B,

Yes, the blog posts are meant to set people thinking. They are not meant to be advice. OK, this is where I talk to myself. ;p

1. Get my priorities right. Now, I have a family and planning to have a child next year. Need money. Budget. Make sure that the money needed for this has been or is being put aside.

2. Do I have an emergency fund? Is the emergency fund able to cover 12 months of regular personal, household and other routine expenses? This would include the necessary insurance coverage.

3. Before I do an OA to SA transfer, check whether there is enough funds in the OA to pay the monthly mortgage for at least 12 months? If there is, the balance, I could think of transferring to the SA.

4. What is the interest rate on my housing loan now? Am I able to get better returns by investing my funds instead of paying down the housing loan? However, ask am I risk averse? Would paying down the housing loan give me peace of mind (which is priceless)?

I hope these questions will help you find the answers you are looking for. :)

Best wishes,
AK

If you have any ideas or relevant experience to share, please leave a comment for us here. Thank you very much.

Related posts:
1. Achieving level 1 financial security.
2. Options for CPF-OA with a new flat on the way.
3. PM Lee Hsien Loong on retirement adequacy.

What to do when you have a hole in your backside?

Last evening, when I was walking back to my car after meeting a friend for dinner, I was stopped by a stranger who told me with a smile:

"Excuse me, you have a hole in your backside."






OMG! I was taken aback!

I looked at him and I didn't know what to say to that.

I mean, how would you react if you were in my shoes?

Black hole?

Of course, I have hole in my backside.

All of us do, don't we?






I wondered if he was trying to be funny.

Anyway, I must have stared at him long enough for him to feel uncomfortable after that.

He gave a weak smile and pointed at the back of my pants.






I turned to look and found a big tear in the seat of my pants!

So, that was what he meant.

I smiled and thanked him for telling me.

It must have happened very recently as I didn't see the tear when I did the laundry over the weekend.






I have had this pair of pants for almost 10 years.

I knew it was getting a bit threadbare and even ratty looking in some parts but this particular tear makes it (possibly) indecent to wear out from now on.

Looks like I will have to part ways with another old friend.






Feeling a bit sad but what to do?

Related post:
Parting with an old friend.

Is it wrong to be idealistic and live the good life?

If we should be able to do something we love and be paid well for it, we are very lucky indeed.

Now, if we should be given two choices of 

1. a job that pays us well but we do not enjoy 

and 

2. a job that doesn't pay well but we enjoy, 

which one should we choose?




Which option we choose might depend on whether we are a pragmatist or an idealist.

However, I also believe that which one we choose will depend on how comfortable (or uncomfortable) we are financially.

My breakfast. Cute?

I know young people who are very idealistic and many can afford to be so because they already have a roof over their heads, they get a generous amount of pocket money from their parents and the labour market is generally quite tight. 

So, they can afford to be picky.


Is there anything wrong with this? 




Well, as long as they and their parents are able to sustain that kind of an arrangement almost indefinitely, I don't think so. 

There are families which have enough old money to last them a few generations, for example. 

Lucky people.






However, if we are talking about a regular middle class family, then, I think that such an arrangement could be a problem. 

It could be a problem also because it could become a problem for society at large.





"We can afford this lifestyle. What is your problem, AK?"

Yes, for how long? 

Have they ever asked that question?





"We have a plan. Don't be so nosey, AK!"

Oh, ok, that is good. 

I am so sorry for being a big kay poh.




Bad AK! Bad AK!

(I hope the plan does not include a "RETURN OUR CPF" protest in Hong Lim Park.)

Related posts:
1. Why a wealthy nation cannot afford to retire?
2. Two questions that help us build wealth.
3. Are you a millennial? (30 years old or younger.)
"Millennials' general attitude towards work is a result of having doting parents, structured lives and a high level of connection with others through information technology."