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Saturday, 28 May 2016

Financial Security, Financial Independence, Financial Freedom?


I got give chance.

Waited and waited.

Since no one wants to poke it, I'll take the bait!


Different words have been thrown around carelessly. What the fish is Financial Freedom compared to Financial Independence and Financial Security?

Let's play a Sesame Street game! See if you can match the above 3 definitions with the below scenarios:


Scenario A

You are the instructor of elite military forces like Commandos or Guardsman, how do you motivate your troops? Remind them they are the best of the best!

You are training Olympian athletes, and you never fail to drill into your sportsmen nobody remembers who came in second...


Scenario B

Your students are studying in a neighbourhood school, and it won't be any stretch in imagination to know they won't be moving on to Ivy League Universities anytime soon...

This is how my secondary Geography teacher cheered me on, "Jared, others spend 10 minutes study they understand; you spend 7 hours never mind. Once you understand, there's no difference!"

This is where you stress "My Pace".

Its all about finishing the Marathon. Never mind if you come in later than the "official" 6 hours cut-off time.


Scenario C

"Oh little Timmy you're so cute! Now, don't over exert yourself. Give it a rest."

"Don't do it! You'll fall and hurt yourself."

There is an overflow of love and concern - so much so that we forget we could be condescending towards or patronizing the same person whom we are desperately trying not to hurt...

You, you, and you - go to that stream. You, you, and you - I know for sure you are monolingual, don't exert yourself. It's for your own good.



Self discovery

It requires wisdom to discover who you are; and making your own decision on which path to take.

To let others influence or tell you what to do... Well, you know the story of The man, his son, and the mule... 

Now you know why I'm not a fan of Warren Buffett.

It's like me getting my 10 bagger from trading, and when you seek my advice, I tell you to do Passive Indexing instead. How's that for see you no up?

That's not how I work as an ex snake-oil, coaching facilitator, and oh so charming guy with some flower in his hair...

I'll just encourage you to discover yourself and try all vehicles; see which ones fit you the best!

You have your own karma; I have mine.

I can't do the walking for you.


 



28 comments:

  1. SMOL

    Can't Link the 3 scenarios with the 3 terms lei. Can't really tell the difference between freedom and independence though

    ReplyDelete
    Replies
    1. Sillyinvestor,

      It's good you are not in the hair splitting game and can't see the differences ;)

      Then no worries and no need to "Ah Q" ourselves :)

      Delete
  2. Hi SMOL

    Let me try

    Scenario A : Financial independence. ( No choice kana instructed one , no freedom. Need to be independent.)

    Scenario B : Financial Security. ( Aiyo, sooner or later will secure one, why the rush ? )

    Scenario C : Financial Freedom. ( Freedom is a choice. who are you by the way ?)

    ReplyDelete
    Replies
    1. Small Time Investor,

      Thanks for having fun!


      The scenarios are written from the perspective of motivational authors/speakers adapting their spin depending on the audience they wish to reach.

      There are no right or wrong answers since its all based on opinions :)

      Let's see who else is not afraid to have fun ;)

      Delete
  3. Financial Security - Just as long we have a regular income/job, and we don't spend beyond our means, we'll have it.

    Granted not anyone and everyone can do it - there will always be some who can't keep a regular job or can't control spending beyond their means.

    But still, its hardly a motivating factor; at best a hygiene factor.


    Financial Freedom - There is a reason why this definition is on most people's lips. Especially to those who hate their day job or felt they have hit the career ceiling...

    Those with holes in their hearts yearn financial freedom the most! Its the dream of the many to have their assets produce enough income to cover their existing expenses.

    With it, they'll have the "freedom" to change jobs, work less hours, stay at home, travel, volunteer, or do whatever they like - now that money is no longer an issue.

    Guess why most motivational speakers love to "sell you" Financial Freedom?


    Financial Independence - Think about it. Why most motivational authors/speakers seldom dangle this carrot in front of you?

    The answer is:

    The Position of F You

    When we have reached this "F you" position, how else to "motivate" you unless its self actualisation or beating the crap out of your competitors?

    Invest to achieve anyone?


    But then, not exactly mass market is it?




    Look around you next time you are in a investment seminar or talk.

    See if you spot the majority who are there to seek ways to "escape"?

    Though fewer in numbers, can you single-out those who are there to "achieve"? Do not leave out the speakers or organisers ;)

    OK, this one is sensitive. Be aware that your facial and body language does not belittle or tone of voice condescends if you spot those who are in such a financial hole that all they seek is financial "security".

    ReplyDelete
    Replies
    1. I will re-visit these talks whenever I feel the goodness of having free kopi since I have unlimited senior citizen travel pass. I will take note and post my observations. LOL!

      Delete
    2. CW,

      Do that!

      I signed up for a free property talk 2 weeks ago to size up this speaker with a "Dr" in front of his name.

      As a shepherd myself, I do drop in on such talks from time to time to keep myself abreast on the latest snake-oil techniques. And time was on my side anyway ;)

      I walked out when his underlings informed us at 6:50 pm that the supposed talk at 7:00 pm will start at 7:30 pm???

      Right from the bat if you don't respect other people's time, you don't deserve my time.

      While on the way home after doing some sightseeing downtown, I realised that could be an interesting "filtering" technique!?

      Those who let others "abuse" them and still remain for the talk, they make a great "pre-qualified" captive audience!!! Clever! (Meek is the word?)

      Those of us who left are those you can't herd anyway. Now that's a good way to get rid of unwanted "pests"!

      Delete
    3. Hahaha I had an image flash across my mind. You, being the speaker of a snake-oil seminar, berating attendees who are late and refusing to let them in.

      Delete
    4. Kevin,

      I did that in Shanghai on a smaller scale when facilitating internal courses on Supply Chain :)

      Isn't being on time the essence of Supply Chain?

      My antics spread like wild fire. LOL!

      HR and other frustrated expat facilitators were patting me on the back.

      They were too "respectful" of the local "rubber time" culture to dare touch it.

      Human nature has not changed for the past 5,000 years - chop off a few chicken heads; the monkeys will behave ;)

      Delete
  4. Hmm. If there is no need to escape, would a person still pursue financial freedom/independence? Or simply be contented with financial security?

    It's funny because I just read this post yesterday about the life on the other side. You know, the extremely rich & high earning folks, and their possible mindsets. Here's a short excerpt :

    "What isn’t clear to folks who are in love with their earning power though is the fact that these acquisitions become golden handcuffs.

    The human psyche never wants to go backward, and so these belongings chain people down. Someone who has driven a Mercedes for more than 10 years would never consider a non-luxury car option if they are still earning the same amount of money or more when the next car is purchased.

    This slippery slope is, in essence, the struggle that everyone must reckon with regardless of their paychecks, and it is the number one perpetrator of substandard and/or captive career paths.

    The reason why financial independence isn’t a goal for many people, and particularly the rich, is because they haven’t bothered to do the hard work of unearthing their passions and/or interests."

    Just some things to think about. Full article here if anyone is interested : https://www.youneedabudget.com/blog/post/what-i-misunderstood-about-financial-independence

    ReplyDelete
    Replies
    1. Kevin,

      Thanks for the link!

      I much prefer articles sharing our personal opinions and thoughts instead of parroting ad nauseam what most people already have read or know...


      Financial Freedom usually involves $X amount by Y year targets - there are milestones to check-off much like running a Marathon.

      Some will never start, some can't finish, and for the rest, its more a matter of WHEN we can finish the Marathon.

      Some do it less than 3 hours, some take more than 10 hours. But once we finished the Marathon, everyone is the same :)


      Financial Independence is more a mindset thing than anything else. Money is involved, but its not what most people think.

      If my monthly take home is $3K, my expenses 2K, no debts, and I have a skill or competence that is widely known in the industry, and I have firm offers from shepherds and land owners in competing firms willing to take me in anytime I nod my head, tell me that is not Financial Independence???

      Now that's what we call a F you position!


      Delete
  5. Hi Jared,

    We spoke about this before. All the b...s snake oil courses using FS or FF to bait the people.

    And yet, majority of the people are often blind or choose to be blind or deaf and prefer the "nice to see or nice to hear" rather than to face the truth and to find who they really are!

    So what if ur academics are good?

    After more than two years in the financial platform here, I must honestly say, I am worried about the future of Singapore.

    I see that the most popular bloggers or blog posts are often those which can "sell the best snake oil" not substance, nor wisdom, and definitely not truthfulness in bringing the best out of others, but instead "the advice on what stocks to buy, and the showing of their remarkable portfolio" to attract.

    And sadly in today's society, that is the only thing that can attract!

    In my course of life, I witness one funny phenomenon:

    Average middle class striving for financial freedom and condemn the rich that they are lavish n not frugal and that is incorrect. Imagine even stepping into a condo can be a crime because later u may be attracted to buy and can never achieve FF.

    Ultra hi net worth people looking at the middle class saving every single cents n yet still struggle in life. UHNW strive for more business success to earn more money (not to be lavish) but to have self-fulfillment in “earning”!

    Sometimes I really wondered if both belongs to the same mindset category, just wear different clothings.

    The one that beats both category is those who truly know themselves and what they really want in life and strive towards it. In the process creates value for people around them.

    ReplyDelete
    Replies
    1. Rolf,

      LOL!

      I think we may have another bleeding heart in our community!

      Wow! Worry about Singapore? And all I care is whether I thirsty or not? OK, where can I find a hole to hide?

      If next election you contesting, I can volunteer as one of your "Ra Ra Boys" - wave flags and cheer you on stage. But must "blanjah" a drink, OK?



      Perceptive observation.

      Both groups are still running on the thread mills - just that one is gilded; the other made of lead.

      Too busy running to stop and ask WHY am I running? WHO am I doing it for? WHAT good is all this running? And WHERE am I going anyway?

      The moment we realise we have "enough"; we stop eating right?

      OK, some don't - and that's a disease of the mind.

      Delete
    2. Ha! Ha!
      I don't know it's the truth or not.

      If you keep feeding a goldfish, it will eat non-stop until death due to eating.
      How many of us are not like the gold fish when feeding on the food-money.
      Hey I am still here leh!

      Delete
    3. temperament,

      I goggled and I never knew goldfish will eat until die!?

      Well, I learned something new!


      I only know humans do overworked to death.

      You would think maybe slaves or coolies, but no, in the modern economy, they're likely to be corporate executives.


      Here's to a new day! We survived another night!

      Living is good :)

      Delete
  6. Hi SMOL,

    Haha, like that you also want to poke ;)

    I think you're right. It's a little condescending way to classify the journey towards financial freedom into little steps, so as to make sure everyone achieves something. In their defense, I think it's also to motivate those people to move up one step, to gamify the whole process to make it fun and all.

    It's good to know where I stand sometimes, but I don't ever bother if I actually reach it or not. I always tell my wife that she married a millionaire - just wait and see lol!

    I think those who are looking at blogs could be those that are looking for lobangs - some quick fix and quick picks to quicken their process. They are the ones looking to escape. Even the escape route is not easy, so they are looking for quick fix! I think the process or the journey is as important. If you don't like the journey, maybe even when you've reached your end point, you also don't know or won't like it.

    After reaching the end point, maybe that's only like 1% of the total time. The journey takes 99%. Might as well like the journey and be happy 99% of the time! Haha

    ReplyDelete
    Replies
    1. LP,

      This is a "roar of the heart" post ;)

      I've mellowed; but the memory persist.

      There were idiots early in my career who treated me "different" as if I were "special needs" just because I O'levels, "Little Jared you so cute! Don't hurt your little brain. Here, read these picture books instead..."

      If a mountain is too steep for me to climb, I can find a smaller hill myself - no need for others to decide what kind of mountain or hill I "should" climb.

      Let me fall, bleed, and knock my head first!

      Without crash got sound feedback, how would I know WHO am I? WHAT I'm capable of? To KNOW my range, so to speak.

      There is a reason why some parents of handicapped children fight tooth and nail to send their child to normal schools. Don't you dare treat my child different!


      Agree with you on the journey part. That's why I don't talk so much on goals, plans; etc. I prefer to focus on the 99% part of the journey ;)

      I find it a bit odd. I would think engineering trained financial bloggers would be more process oriented; as a liberal arts guy, why am I holding the banner for process thinking!?

      LOL!

      Delete
  7. Hi SMOL

    Achieving Financial independence have more good than bad. If you enjoy working beyond FI, just continue. FI is just telling you that you have "enough" money to sustain your current lifestyle for lifetime. Don't care whether it is passive, lump sum or drawdown.

    Actually, Singapore financial blog a bit boring after 1 year of reading. It keep on saying similar things and stocks. There are bigger picture than that.

    ReplyDelete
    Replies
    1. Frugal Daddy,

      You think why I nothing to do want to "poke" others?

      I got to keep myself entertained :)



      Delete
  8. Ha! Ha!
    Entertainment may be but if you're really bored in life in everything, i think your days are numbered-Regardless of what's your age now.
    Because what they say can't live in a vacuum I forgot, but I am sure our brain too.
    No matter who and at what age.
    If not why I am here?🤑😊

    ReplyDelete
    Replies
    1. Agreed! Once we feel most of things are damn boring and including what we read in the cyber world and there is nothing else worthwhile to do. Cham liao!

      Good to find something to poke and poke those others don't react violently to such pokes.

      It is entertaining and FOC!

      LOL!

      Delete
    2. Ha ha!

      Lucky I get 不打不相识.

      Unlucky, the worst I've got is "I don't friend you!"


      I'm here to "throw brick attract jade" :)

      Delete
  9. Hi SMOL,

    Thanks for another poke provoking post:)

    Appreciate it. Make me snigger at myself for having the word "passive" for my blog title.

    You are right. Subconsciously, when I started my blog a couple of years back, all I wanted was to achieve financial freedom so as to kiss my lousy job goodbye.

    Thanks to your poke...

    I still wanna kiss this lousy job goodbye! Hahah. Did I get you?

    But then honestly, over the year I realised that I really enjoy my journey to obtain other source of income. Hopefully this momentum will continue for many years to come.

    Anyway, you can utter F U to ur bosses if you are either financially free or independent right? Got difference meh?

    ReplyDelete
    Replies
    1. PassivePeon,

      Yalor. When first saw your nick, I fainted...

      Not only "passive", "peon" some more!

      Well, I guess that would leave a lot of room for - under promise; over deliver!

      You smart :)


      On one side, it's good not to be mislead by words as a rose by any other name is still a rose.

      Then again, words can be powerful to convey a precise meaning - nothing more; nothing less.


      If we lump all 3 definitions together, they are of the same essence - like man, woman, gay person - so yes, we can say they are the "same" since all are human beings.

      Yet, they are "different" too.

      Same goes for financial freedom and financial independence ;)



      Delete
    2. Hahah. Bo bian leh SMOL, nick was chosen years ago, quite a hassle to start a new identity (thought I do not have much identity to begin with:p)

      Income quite impossible to be passive. Gotta work hard for our moolahs even if they are recurring ones; to make sure they do not slowly dry up:(

      Got the gist of your poke already I think. In this case, I hope to be financially free, secured and independent at various points in my life!

      Not too greedy right!

      Working on being more financially secured first then;)

      Delete
    3. Don't work too hard ;)

      Have fun!

      Youth, you don't know what I would give to be young all over again :)

      To wine, woman, and song of wasted youth!

      Delete
  10. Ah. Can't help you with returning ur yesteryears but I hope my naviety will rub off you and give you a sense of youth;)

    Btw, I heard that man are like wine, getting better with age. Then the rest such as woman and songs will fall in place. Hope it's true for you!:p

    ReplyDelete
    Replies
    1. Balance.

      Balance in Life; walk the Middle Path ;)

      Delete

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