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Monday, 7 March 2016

How many know how to spend well?

Frugality is a virtue.

Nothing to debate here.

I would call myself relatively frugal.

I think.


Eh... I hope so?

As we celebrate frugality in our community, I felt the art of spending money has gotten a bad rep, and unjustly so.

Look, frugality is more about will power and discipline. You don't need mastery, craftsmanship or competence to do it.

Would anyone pay $3,000 to attend a seminar or course on how to be frugal? If you do, you have other problems to worry about... namely the IQ part.

OK, if you don't have will power or self discipline, that's another story. Maybe some coaching sessions with a psychologist would help?

Foreplay done.

Now to the main event - spending!

Spend our way to financial freedom

Hands up anyone who had or seen the below experiences:

1)  Skimp and save money here and there for many years only to see them blown away by one untimely purchase of your property or equity investment.

2)  Skip meals to save money and then develop stomach ulcers. Or buy cheap shoes only to suffer back or foot injuries.

3)  Avoid social gathering at "atas" coffee shops because you rather freeload on your office's 3-in-1 coffee. Why pay when you can get coffee for free?

And you do silly math like if I save $6 per day by avoiding "atas" coffee, and multiply by 365 days and times 20 years, you feel "shiok" thinking of the "big" sum of money you would have saved!!! In 20 years time!? How's that for living in the future? (There must be a medical term for this kind of sickness)

Without the social glue in making people connections, you scratch your head as your peers start to move up the corporate ladder without you. You blame it on favouritism or nepotism. 

Some would call it networking.

In short, have we not found ourselves in situations where we suddenly get the epiphany that we have been penny wise but pound foolish?

None more so than in our journey towards financial freedom right?

In this journey, we would have discovered we are quite lousy at spending money.

We are forever envious of those who have a knack of spending money at the "right" time.

Spending money to get rich is not easy right?

It requires mastery of our craft - be it investing or trading. Very meritocratic. Those with competence and those with less will be poles apart in performance. Unless Lady Luck messes with us!

Self discipline helps here - especially in money management. But no amount of will power will make a difference - you can't chant "If I think I can, I can" your way to financial freedom. Or?

And what's the biggest irony of all?

We need to SPEND quite a lot of money to achieve financial freedom!

Less analysing; more investing (Stolen with pride from the fisherman CW)

The butterfly has written an excellent piece to illustrate the above concept.

Yup. That's how you know whether you have gotten better at spending. Wink.


  1. Hi SMOL,

    Haha, thanks for the link up!

    I think people in generally likes to mix with generous people. Not just about generous with money, but more importantly, generous with their time. I think spending money that can result in more connections is money well spent!

    1. LP,

      Yes, misery with money is the symptom.

      The root cause is a personality that trusts no one, hence the need to surround oneself with inanimate objects.

      "Thriftiness" becomes an excuse not to go out, for everyone knows, once we step out of the house, we have to spend money.

      Less time for people, more isolation.

      We have read about the story of the US pump attendant who was a millionaire who gifted his entire estate to a library after his death.

      No one knew about his wealth? Another way of saying no true friends?

      Money went to inanimate object. No living person he has love for?

  2. The definition of Frugality is often misuse. Just like Warren Buffett's name. The biggest worry is people become obsess with saving money that it's a joy to save and pain to spend!

    Spend more time accumulating more wisdom in life, frugality or even eventual financial freedom and most importantly happiness will come naturally and beautifully.

    Instead most think otherwise that just being giam you can achieve financial freedom which leads to happiness!

    1. Rolf,

      Yes. It's definitely being misused like the word Passion.

      I am not talking about mindless or extravagant spending. But we do gain more wisdom the more often we spend.

      Spending requires us making decision.

      We either make a wise purchase or bad purchase (like some have found recently with their equity buys)

      Muscles grow stronger the more we stress and work them. Similarly our decision making skills will improve the more often we engage in "spending".

      Especially on big ticket items in our lives like property, car, investment portfolios, etc.

      For eg, how about save $ on "atas" coffee and fxxked it all up by making a lump sum all-in purchase of STI ETF in 2015?

      Not that STI ETF no good, its the execution! An investor more skilled in spending would have chosen the Dollar Cost Average method ;)

  3. SMOL,

    You are frugal la. By my standards.

    Actually I was thinking about a post which is related to this. Riches, we can earn it, inherited it or married into it (or divorced into it)

    Say earn it. There are also 2 ways. Specialize path ( doc, lawyer ) some set up businesses ....

    How about Av. Workers earning AV. Pay?

    I am talking purely about number sense, not happiness. I can be sick and poor yet happy. I am talking about cash type

    While I dun agree that Giam is the "personality" that is crowd drawing, I believe "generosity" in building "network" need not really be in dollars and cents. Of course, there would be times I would give others a treat. But if we think about it, once or twice a year, is it a lot of money? If I give them a treat every month, do my bosses then or workers then love me?

    I think we must be generous in other areas.
    Generous in forgiveness with honest mistakes
    Generous in giving time for one to learn
    Generous in seeing the strength of others
    Generous in sincerity

    That is more like my wish list that analysis. What do I know? Lol dun throw eggs at me. I am still a man whore at the office. Hehe but I am a happy man whore

    1. Sillyinvestor,

      Spending time with people is more "expensive".

      How many of us volunteer our time to charities? It's easier to donate (spend) money right?

      Why do grown up children hire maids or send their parents to old folks home? Spending money on caregivers is cheaper right?

      Don't need big wish lists.

      We just need to start at home.

      I applaud those brave souls who are giving up their lucrative careers to be stay at home moms or dads.

      Its so much cheaper to send kids to child care...

      You'll probably argue how to buy condo and car in Singapore with a single income?

      Well, who said making spending decisions were easy?

      Go save money, that's much easier!


  4. Now go back to AV. Workers earning 4K ? FI at 55? Dun Giam can make it ??

    I say impossible ... But as you say, success is the price you pay. FI but maybe not very happy? Some FI then use the energy and time to be happy.

    But i realize we can be more thrifty la . But Giam is a personality but a lifestyle ... You are Giam u are Giam rich or not, u are not Giam u are not Giam, poor or not

    1. Sillyinvestor,

      Did you recognise me in my AV cameo appearances while holidaying in Japan?

      Wait... Oh! You meant something else! Phew!

      I like the way you have made up your mind and ask a rhetorical question.

      Well, how many people you know are Financially Free through giam?

      Mr Money Moustache? He makes 400K a year from his blog. No wonder so many people nowadays want to blog for "passive income"? Collect emails, monetise your readership, etc. Is that saving more or earning more?


      Why are you spending money on shares? Shouldn't you just hoard all the cash?

      Cash is King!

      Aha! That's the little irony. Without spending on property, equities, or other investment vehicles, how to be financially free?

    2. Hey SmOL,

      That is cheating ... Spending on investment ... Spending time also count... Like that u win already lor...


      But what counts is we have a good time
      Bantering lol

    3. Sillyinvestor,

      It's called employing literary devices to express a viewpoint ;)

      You are right! What's more important is we had fun!

      You think why I enjoy arguing with the STOP sign and people brighter than me?

      Need to exercise the empty space between my ears mah!

  5. Hi SMOL,

    I think I read the atas coffee as an example on one of the commercial blogger's post before...later you get into trouble siah!

    I used to drink atas coffee with my ang moh colleagues because that's all they drink...they are not into local coffee so it serves as a good networking opportunity just to step out of the office and chat about office politics. I think it's money well spent.

    Frugality is a virtue and I think some people are frugal to themselves but generous to their family members...I'm a benefactor from such family members :p

    Giamness is more than just being stingy with money, it also extends to time and love which could be far more hurting than money at times.

    1. Joyce,

      You and LP have hit the nail on the head!

      The most ideal is frugal with ourselves; but generous to others :)

      How many leaders we know are "giam"?

      No right?

      Most are so generous to others with money and time to a fault that their love ones constantly have to remind these bleeding hearts to take care of themselves first!

      Please hor. The original "atas" coffee example came from the States. Most commercial bloggers just pour old wine into new bottles.

      And that would include me. I stand on the shoulders of giants before me. Only difference is I do share whom I've stolen with pride from ;)

      For eg, I won't write "Less thinking; more doing" and pretend I came up with it when it's clearly a rip-off from CW's famous "Less analysing; more investing

    2. Kopithiam black kopi is called coffee mixture. Of course, it is frugal coffee drinking. LOL!

    3. Newspaper prices went up; kopi also went up :(

      Now I better aim for free coffee.

      I'm thirsty ;)

  6. How many know how to spend well?

    Why should we care or worry?

    Our money will never disappear!

    One day, these money will be somehow well spent.


    1. CW,

      I'll practicing my craft so I can be the ultimate market timer.

      Spend most of my wealthy just before I go! Some 18 year old mei meis will be unhappy :)

      Of course must leave something behind as "incentive" for others to do the cremation and scattering to the wind ;)

  7. Hi Jared,

    Before I forget what I want to say and start blabbering, let me share my thoughts. I guess it depends on whether we are concerned with the tangible or intangible benefits of spending.

    Tangible benefits, easier to identify I suppose, if we want do some analyzing. Spending now saves me even more money, or time, in the long run? Just like how people think I'm nuts to spend money on a budgeting app but neglect to consider the time and money I would save. Spending on something that in turn (helps) make more money faster? Maybe a vehicle for the sales guy, or kitchen equipment for the baker? It is a mandatory expense which you have to incur within a fixed time frame, and it is cheaper to get it now. IT show coming, LOL. Now have sale, why don't buy leh?

    Intangible benefits, harder to quantify. Like you mentioned for example, what is the value of networking? Spend money travelling, but the exposure and experience make me an infinitely better person than I could ever be - how to value something like this?

    Yes, we need to spend time and money to achieve financial freedom. Nobody said it will be easy. But if we could learn to save better, and spend better, why not? People can harp on funds expense ratio and criticize fund XXX for charging that extra 0.5% or 1% compared to ETFs. Why don't they also use cash-rebate credit cards and get 1% on all their monthly expenditure?

    Perhaps thru' what we write, we can help people to save some time. But first, they have to spend time reading/understanding - the irony!

    1. Kevin,

      Hee hee.

      I'm just doing my clownish attempt to bring balance in the Force :)

      Fully agree that spending and saving work hand in hand ;)

      When too many people move to the "save more" camp; I go to the other side of the boat and shout, "Some of you come here leh! If not the boat will capsize!"

      And vice versa if too many move to the "spend more" side.

      I'm like what the Hokkiens say, "Human is me; devil also me!"

      However, I would like to think I'm the 2 tiny dots in the Tao symbol :)

    2. I think the world needs tiny dots more than it needs Tao symbols heh.

  8. “Diligence and Frugality build character as they create wealth.”

    Not my words, I am not wise enough for something like that. The wise man was Benjamin Franklin.

    Jared, you and the other bloggers have covered that part on frugality very well already.

    My interpretation of that diligence-thingy is: It takes money to make money. So, we have to be diligent on how we deploy our money to make money.

    Saw a fitting cartoon recently in that regard. Alamak, not able to attach any picture to this tiny comment box though.

    1. Andy,

      I hear you.

      Deploy, plant, incubate, invest - these are synonymous with "spending".

      And wise old Benjamin Franklin beautiflly adds another angle on it - diligence as in "spending" blood, sweat, and time ;)

      There is always a duality to everything: Tall/short; big/small; hot/cold; etc.

      He who flies with both wings has a higher chance of success than those who fly with one wing - I said that!


      You guys are great!

  9. Who is to judge what is "spending well"?
    Losing money by investing in STI eft in 2015 might have bought a fella who has no experience with market cycle a painful lesson - if he choose to learn from it and do something abt it.

    For the $$ which we realised are not well-spent, perhaps we should reflect on WHY is it not well-spent. If others say your money is not well-spent, we could either reflect upon it or ignore it (because it should have brought you some gratification which others don't get).

    1. Rainbow lady,


      We need to question this behaviour of benchmarking and comparison with others - isn't it a kind of seeking affirmation from others?

      Especially if we are retail investors. We ain't going to get performance bonuses, or out to attract investors to invest in our funds ;)

      Like alcohol or substance abuse - the first step to recovery is to admit there's a problem.

      Let's say one spends money on an investment, suffers a heavy unrealised loss, and excuse it as a LONG term investment or they are in it for the dividends; will we improve the next time round?

      Like that might as well close our eyes and pinch our nose and enter anytime we want! Look ma! No brains!

      Like you have said it so eloquently:

      "if he choose to learn from it and do something abt it."

      Unlike saving, "spending well" requires competence. A desire to get better or mastery of our craft.

      Just look at our community. It easy to spot who are the competent ones and those who are still work-in-progress.

      There are those who "spent" on stocks when STI was nearer to 2500.

      Then there are those who waited till STI is above 2800 then shared - Shit! They should have bought earlier ;)


  10. Hi SMOL

    Spend if you are happy and not sad.
    Spend if you see someone in need and not in want.
    Spend only if it meets your need and very very little on your wants

    Alamak! i spend 38K on COE renewal for 5 years.
    And actually it is not exactly what i want.
    (Know how to earn don't know how to spend ma)

    Now who can complain of LUXURY?
    So spend even on LUXURY if it is within your means?
    Have i spend well this instance?
    Of course my wife is happy.
    But funny thing, she is against me buying a new car.
    She said not time yet.

    1. temperament,

      I see someone is in poetry writing mood :)

      Even buying a car got "market timing". And involves savviness in "spending" for new or used!?

      A bit like knowing when to switch to cash/bonds; when to switch to equities ;)

      Or when to lease and when to buy our property to live in.

      Interestingly, Jim Rogers with all his millions prefers to lease than buy his Singapore property.

      The rich and generous ones spend money to make this world a better place. They don't hoard their money to their graves.

      They built hospitals, schools, orphanages, nursing homes, etc. I benefitted from one - thank you Mr Gan Eng Seng!

      For lesser mortals like us? Spend money on people that matters to us makes us happy.

      They happy; we happy.

    2. Aye, spotted a familiar looking name. No, not Jim Rogers. I spent 4 yrs in Gan Eng Seng School!

    3. Kevin,

      I'm from the 1980-1983 Anson Road batch ;)

      Was fortunate to witness the old Tanjong Pagar with its old pre-war shophouses before the transformation now to glass and steel modernity.

      I am guessing you are from the Spottiswoode Park batch?

      Now the new Gan Eng Seng School is quite nicely located at Tiong Bahru.

      Went there last year to ask whether they still have a copy of the 1983 Yearbook. Wanted to relocate some of my school mates.

    4. Hmm, I see we have a generation gap here haha! That's right, I'm from the railway station batch. Memories of the noisy railway station generator humming in the background as teachers struggle to teach LOL. To be honest I nvr did step into the new campus, guess the feeling is no longer there.

    5. Gents,

      I am a Gessian too! Yes at railway station also.


    6. Rolf! What are the chances haha!

    7. Rolf and Kevin,

      Ahem. That makes me your 学长 ;)

      My Anson time is monastery. Only the pre-u classes got girls, and of course the "jude" female teachers.

      I guess that's where my attraction to 姐姐 came from ;)

    8. Yes I am in the 1991-1994 class. I also rep school for table tennis! :-)

    9. Rolf,

      That's another thing we have in common ;)

      Let's see how many Gessians we can pick up in this watering hole :)


  11. What if our expense is zero and we are leading a happy and meaningful life?

    1. RIP is zero expenses forever and happy somewhere. :-)

    2. Frugal Daddy,

      Qian bei has replied you ;)

      To be living and have no expenses, then we must be the King of Freeloaders!!!

      Either living off parents, big daddy, or married well :)

    3. haha. I think it is possible. Farmers can be self sufficient. Or you are just too creative that you found free roof, free food, free ....everthing...seriously i have no idea how to. But, I guess we don't need to all spend our way to financial freedom. Just by saving and saving and cut down expenses can also help. If can invest then could speed up the process.

    4. Who say everyone need to spend (invest) to reach financial independence? Some doesn't need!


      Save more than 60%. No need to invest??? (3)

    5. Frugal Daddy,

      That China tour guide found a sugar mommy. It's word play. We can incur all the expenses we want; but if someone else is paying for it, it's FREE to us ;)

      Wait, in prison its technically "free" right?

      Free has its consequences :(


    6. CW,

      I knew you would say that ;)

      To do that, we have to EARN more first.

      Try saving 60% of $2K per month in Singapore ;)

      It's like telling those living below the poverty line that to escape the poverty trap, all we need is to "save" more...

      Having said that, I'm with you as I don't think everyone should be involved with DIY investing.

      We all have different skill sets. Sometimes it can be wiser to OUTSOURCE investing to a pro or switch to low cost INDEXING.

      This way, we can SPEND more time:

      1) With people that matters.

      2) Doing self reflections and spiritual matters.

      3) Engaging in activities that bring us joy.

    7. Hi Smol,

      Well put.
      i know at least more then a few persons who don't invest in the stock market.

      They are professional specialist doctors, a scholar selected by GIC to work in US and Europe and a person who works as an analyst in a bank's treasury department.
      And 2 accountants who don't know how to invest in stocks.

      i asked the scholar what is she doing for GIC.
      She answered she specialised in "private equity".
      i asked again how she invested with her own money in the equity.
      She answered, "Oh no, i am very cautious with my money. i have bought a property in London."
      i said, "Yes you don't have to invest in stock if your savings is high enough to buy a property in London."

      As you can see all these group of people don't have to take risks like us - the boh lui kias ai pia cha ay yar.
      They are all high earners in their vocations.
      Now you know who are the people who sing "Ai Pia Cha Ay Yar."
      Me and you lol!

    8. temperament,

      I'll do a song dedication to people like us!

      Life didn't give us a nice hand; but we played the cards we were dealt to the best of our abilities!

  12. Hi Frugal,
    Farmers and all,
    Have to spend to survive against unknown and known circumstances.
    What we spend in the stock market is just only one of the ways.

    i know how nice if we don't have to eat to survive.
    May be this is the "Shangri La" we all secretly yearns in our hearts?

    1. temperament,

      I go paint myself green and stand in the sun like in profile pic ;)

      I'll chant: "I'm a tree; I'm a tree. If I believe I can; I can do photosynthesis. If I believe; I can."

      Why pay others to brainwash myself?

      How's that for DIY brainwashing?


    2. I had an crazy idea. Everyday, there is some event going on that public can tap on. Shop opening buffet, training buffet, conference buffet, free course with food, etc. If you can attend 2 events a day, it is free. Try cycle there. Zero transport cost. No bicycle? Can start walking from 10am. Lol

    3. Frugal Daddy,

      I wonder we can gate crash weddings like in the movie?



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