Increasing interest rates will bring prices down to earth (Don't think and grow rich!).

UPDATED (JULY 2018):






"Interest rates are like gravity in valuations. If interest rates are nothing, values can be almost infinite. If interest rates are extremely high, that is a great gravitational pull on values and we had that in the early 1980s." Warren Buffett
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I read the opening paragraphs of the following article and got rapid heart palpitations:

"Boomers lost a significant chunk of their retirement nest eggs in the recession, but it was members of Generation X who were really hit the hardest, according to a report released Thursday.

"If they don't start paying off debt and saving more, Gen Xers (those between the ages of 38 and 47) and younger Boomers (those in their late 40s to mid-50s) are on track to retire financially worse off than the generations before them..."

..




I am a Gen Xer!

Reading on, I realised the author was referring to Americans. 

Whew! That is a relief!

However, what was described in the article could happen to Singaporeans too. 

Don't be too complacent. 

Things look rosy here now but it wasn't too long ago when they weren't.





I know friends who think that Singapore's economy will continue to boom and investing in real estate here is a no brainer as prices will only continue to go up. 

Well, I am not saying that they are definitely wrong but it would be prudent for them to contemplate the possible downside.

Anyway, to grow rich, what can we learn from the American experience? 

Don't think!

Yes, don't think of 3 things. 





Constantly remind ourselves:

1. Don't think that cheap money is here to stay.

Gen Xers were also plagued by significantly higher debt levels, including mortgages, auto loans, credit card and student loan debt -- much of which was accumulated in the years leading up to the recession.





2. Don't think that the value of real estate will only go up.

And while only two-thirds of Gen Xers owned homes in 2010, those who did saw their median home equity plummet by 27% during the past three years.





3. Don't think of ever stopping to save and invest for our retirement.

By the end of the recession, Gen X held investments, retirement plans and savings with a median value of just $14,500, down from $19,382 in 2007.... Including Social Security benefits, Gen Xers are projected to have enough money in retirement to replace only half of their annual pre-retirement earnings.





In our personal finances, if we save more, invest wisely and have less debt, we cannot go very wrong.


Read full article: here.




Related posts:
1. From rich to broke?
2. Slaving to stay in a condominium.
3. To be a happy peasant.
4. Millionaire or not, plan for retirement.
5. Young working Singaporeans, you are OK! Really?

High class ice cream without the high price.

I have two big weaknesses when it comes to food: chocolates and ice cream. Put the two together and it is a killer combination as far as I am concerned!

Fairprice Express, the supermarket chain found at Esso petrol stations is running a "Buy 1 Get 1 Free" promotion for this particular ice cream:

So, as you might have guessed, I gave in to the triple temptation of chocolate, ice cream and reduced price.

The box has a cute little badge at the bottom left hand corner:

Wah! Environmentally friendly ice cream! Eat with less guilt!

The box opens like a treasure chest. Oooh, that's different:

It is a bit like a Black Forest Cake but without the cake:

After I was done, I took a closer look at the box and found that the ice cream was produced in Germany! Wow! Atas!

Price: $4.90 for two.
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Added on 7 August 2017:

Burp.