Unless we are rich, be pragmatic and not romantic.

A conversation with a reader:

Dear AK,

Finally, my husband and I have set aside $10K as emergency fund and will be contributing to this fund on a monthly basis. T

o us, this is a "giant" step as we never have any such funds before we got married.

We enjoyed reading on the couple who could save $100K in 18 months and valued their beliefs. 

The post got us thinking, if we continue saving $2000 for 5 years, we would have at least $120K in cash.

I grew up in XXXXX and my matrimonial home is also in XXXXX. We like the convenience to town and the amenities the area provides. 

However, respectively to frugality, even if we buy a new HDB 4-room flat in XXXXX, it will cost at least $500K. We felt guilty even at the thought of it.

Sell our flat in XXXXX and move to Punggol/Sengkang, maybe? That is when we will see a profit from the sale of our flat. 

However, our hearts could not bear to leave XXXXX.

Have you had such dilemma before?

AK's reply:

Hi A,

I stayed in XXXXX for many years of my life. In my mid 30s, I bought a condo in XXXXX, stayed there for almost 5 years. 

Price shot up. I loved the place but I sold it. I am a pragmatist.

Singapore is a small place. Nowhere is really too far especially with so many new MRT lines now and in the future.

Having more money earlier is a winning combination for the financially savvy. Money needs time to grow. 

The earlier we have more money, the better.

Best wishes,
AK


I know this is an emotive topic and there will be people who will disagree with me. Feel free to disagree.

I believe that only the rich can afford to have romantic ideas about their possessions. The rest of us are better off being pragmatic and ensuring that possessions (or the lack of) afford us a better future.

Related post:
New money habits led to $100K in 18 months.

"Aiyoh, people so sour grape to say you how lian!"

An email from a very regular reader:

Saw your post on CPF balance. 

Aiyoh, people so sour grape to say you how lian. 







But nevermind, I support you to be how lian, k?


SMOL's comments soooo hilarious. Really made my day! ROFL. 


Honestly, OA savings aside, I think growing the SA is quite achievable.








In Jan 2008, I only had $17,084 in my SA, accumulated through the course of my active employment. 

Was contemplating to do the transfer earlier but decided to keep the money in OA for investments. 








I first transferred some funds from OA to SA in 2009 and by end 2009, I had $52,893 in SA after earning $1670 interest for the year.  

In 2010 I didn’t do anything cos I resigned from XXX and took 6 months sabbatical to finish my Masters.


No income, so nothing much to transfer. :P







Then I resumed the transfer in 2011 to 2013 till I met the prevailing CPF ceiling. 

My CPF-SA now stands at $182,213.73 after earning $7,474 of interest last year.







This year there will be more contributions accumulated since the ceiling has been raised to $6K. Happy!

So, don't say it cannot be done.

Never try, why say cannot?

Don't sour grapes.

Grapes can be sweet.





I know because I am eating sweet ones now.


Related posts:
1. AK is showing off his CPF numbers.
2. 2016 changes to the CPF and SRS.