Those bei kambings who are voluntarily contributing to CPF and hoping in 30 years' time their future 1 million will have the same purchasing power as today may wish they knew their financial history better!
"Someone who voluntarily contributes to CPF at 25 is getting the "same" interest rate as the saver who voluntarily contributes to CPF at 45. Pause." I think it depends on whether one can compound his money better, from age 25, using CPF or able to compound his money better using other investment means (for retirement purpose).
If one can compound their money better than 4-5% annually, they won't be voluntarily contributing to CPF ;)
Don't get me wrong. Voluntarily contributing to CPF is not "wrong" or "bad" - especially if one already knew the more they "invest", the more they'll lose :(
Or if you are self-employed.
But in your 20s???
Have not even started already capitulate?
(Easy tell they are savers; not investors)
There's a reason why we have a mid-life crisis in our 40s. That's when all the little lies we tell ourselves don't work anymore...
I would think voluntarily contributing to CPF may make more sense in our mid 40s (got horrible investment track record) as we only have to wait 10 years to get our money back - provided the goal posts don't get moved ;)
Would you lock-up your money in 5-year fixed deposits at the same interest rate as 1 year ones?
Of course the savier young ones are those who "say" they voluntarily contribute to CPF.
But their real intention is just to park their spare money there in the CPF Ordinary account, never the Special account.
And when the timing is right, they intend to take that money out to invest in their first property ;)
Just ask your parents or older cousins. If they had voluntarily contributed to their CPFs 30 years ago, would they be financially better off now?
Or are they smiling to the bank as they had "voluntarily contributed" to their first property instead?
That screenshot should specify currency and place of residence to gauge the purchasing power of that one million. Is that $1m in liquid asset form or mostly in residential property? Big difference in terms of lifestyle if networth is mostly in bricks which cannot be eaten.
Millionaire title is a great achievement when I was a kid but it's getting more common these days with some HDBs fetching $1m. It's still impressive but one needs to be careful not to over-estimate what $1m can do today.
Oh ... I am too robotic to appreciate the humour and poke. How much money needed to be a millionaire is already defined in the word millionaire. If someone pose this question to me, I really don't know how to react. LOL. I guess that is why I cannot be facilitator. You've got a challenging job at IKEA. My work is more straight forward.
Since most people are visual (especially men, ahem), early snakeoils have discovered just like ink blots, if we draw lines here and there, we can makeup whatever stories we want!
If we can invent voodoo tales, we can create our own temple and collect 香油钱 ;)
The arabic numbers of a MILLION is NOT subjective - 1,000,000 or 10 to the power of 6 if one wants to be cute ;)
But a "MILLIONAIRE" in Indonesian rupiah, Malaysian ringgit, or US dollars mean totally different thing altogether.
That's why when drafting contracts, if one's england is not powderful, we may need to hire lawyers to go through them ;)
See?
Million is black and white precise; millionaire is grey.
LOL!
As for how much we need to be financially independent, its definitely SUBJECTIVE!!!
You see some US millenia bloggers got passive income of USD$1,000 per month declare they are financially free!?
They sell everything and move to a lower cost of living country like Thailand.
What do they do?
Start a blog and hope they becomes the next Mr Moustache blogger who can "earn" USD$100K per year from blogging alone.
So does Mr Moustache has the competence to Earn More or Save More?
Wink.
Just like integrated medical plans. Some will only choose private hospitals only; some can accept public hospitals just as long its Class A; some don't mind public hospitals class B2 or C.
So what's the point of asking others how much you need to be financially independent?
Our own feet we should know what shoes fit us best ;)
You are right. There's no point of asking others how much one need to be financially independent. I am of view if one asks such questions, this goes to show that he/she is not confident of the amount he/she need to have to be financially independent. Furthermore, as you mentioned, financial independent is subjective and varies from different individuals. This applies to the specific amount.
An example will be:
A feel that $1 million is required for him to be financial independent. B feel that $625,000 is required for her to be financial independent.
Based on the above assessment, A and B are not wrong in their conclusion. The circumstances are likely to be different between them.
As you mentioned, only we knows what shoes fit us best. The views of others on our chosen amount might varies. Furthermore, their views are secondary. There is no need to bother about their views on our matter.
I previously mentioned that I quitted full-time employment. More than a dozen of my peers and friends are sceptical of my status. I did not tell them about my status. They started to comment on my decision and sarcastically stated that I will live to regret my decision and eventually come back crawling and begging for my old position back within a few months' time.
I did not even bother with such comments. These are their opinions and they are entitled to voice it out. It is my decision to decide whether to accept or ignore it (which I chose the later).
I also receive such comments via whatapps. I delete them immediately upon receipt. I do not allow such comments to affect me. I carry on with my free-will lifestyle and glad to enjoy every moments of my life presently.
Once again, thank for your well-said advice and quote.
Well said. By assuming that the worst case scenario which we have tried before, there is nothing to fear about going into FI.
I used to have reservation about quitting the full-time employment as recently as late Sept 2018 (i.e. the day before I tendered my resignation). Little did I realise that all these reservations are indeed moot and are unwarranted. I tendered the resignation letter on that very day and it's done. I am off from the employer one month later. It is as simple as ABC.
I think that I worried too much about the emotion at that point in time. I have learnt some important things about it.
Decide ---> Take Action ---> Forget about it.
There are just too much matters in life. One cannot manage all matters at one go. Focus on the things which matters the most to us. The rest are secondary.
The above is reinforced by the life unpredictability. One will never know whether tmr may come for him/her. If the inevitable occur in respect of him/her on the very tmr, the FI amount does not really matter to him/her at that point of time. It will be more than sufficient for him/her in fact given that the duration is one day from now.
I think that it will be more sensible to live life under such assumption. Libe the day as if there is no tmr. I am not meaning that one will spend all the fortune. My meaning is to spend the day as per one's term and condition and lead the day to the fullest as if tmr will never occur.
If tmr comes, it will be a bonus. Continue to enjoy the additional bonus with each day of being alive.
I will lead life in such approach with immediate effect.
The US blogger living on USD $1000 per month in Thailand is an interesting one. He sold his previous investment blog for around USD $300K (if I recall correctly) to a commercial entity. After the transaction, the commercial entity realized that the main draw to the blog was the blogger himself. Facepalm, LOL!
Said guy is smart too, he's a motivational blogger and we know what that means. ;) He is not solely relying on dividends alone.
Meanwhile......another US blogger who has retired from work 9 years ago or so, with a net worth of around USD 5 million (my estimates, not sure how accurate), is returning back to work. He wants to buffer up his networth further in light of the upcoming poorer economic prospects, despite having multiple rental properties, dividend income, blogging business, and other businesses. Commenters on that post agreed with him and rolled their eyes on lean FIRE individuals who think USD $300K is sufficient for retirement (not taking into account impending account drawdown and dividend cuts from dividend aristocrats).
Many say they are financially independent or free. But you see them "working hard" at their side gigs or trying to get back into full time employment first opportunity they get...
We can empathise.
Saying you're financially free sounds a lot better than saying you were retrenched or unemployed...
Just like how some have "stolen" Minimalism from the Arts to mean frugality in the financial sense when those who appreciate the minimalism aesthetics lifestyle knew it costs hell lot of money!!!
That's why I've decided on the super grey description of taking sabbatical from full time work.
Wait till......financial bloggers go for their staycations at Lloyd's Inn. Then I can imagine you cringing when they butcher the term "minimalist" further. =P
Haha! In here before the smart Alecs with their $1m rupiah comment :P
ReplyDeleteHappy holidays and merry X'mas!
Kevin,
DeleteLOL!
Holiday mood mah!
Some humour to ease the pain of no Santa Claus rally this year :(
See?
If anyone and everyone were a "millionaire", then being a "millionaire" has lost its meaning ;)
Merry Christmas to you 2!
Merry Christmas SMOL!
ReplyDeleteUnintelligent Nerd,
DeleteMerry Christmas!!!
Happy Holidays SMOL!! :)
ReplyDeleteWhew ... still a million!
Haha, for a minute tot u were gonna show $5,800,000,000.
Which is probably about the inflation adjusted value of a million from 1719, when the French first invented the word. LOL!
Spur,
DeleteHappy holidays to you too!
You sure know your financial history ;)
Those bei kambings who are voluntarily contributing to CPF and hoping in 30 years' time their future 1 million will have the same purchasing power as today may wish they knew their financial history better!
Becoming Middle-aire can already. Don't care how many decades from now and goes with the inflation and population.
DeleteCW,
DeleteYou say you don't care. But if inflation goes above 4%, you'll be first in line to withdraw all your CPF out!
30 years a long time... Not just moving the goal posts policy risks. We may even get regime change... Or have our own Nagib...
Will never happen? Well, did anyone expected Trump to win?
Most bei kambings like to say "long term"...
If they only realise the longer the time horizon, the risker it is.
That's why investors in 30 year bonds demand a higher interest yield than 10 year bonds to compensate them for the greater risks they are taking on.
Someone who voluntarily contributes to CPF at 25 is getting the "same" interest rate as the saver who voluntarily contributes to CPF at 45. Pause.
Wait.
What was I thinking!? I must encourage youths to voluntarily contribute to CPF!
Why say no to youths who want to subsidise us "lau kok kok"?
I'm an idiot!
LOL!
"Someone who voluntarily contributes to CPF at 25 is getting the "same" interest rate as the saver who voluntarily contributes to CPF at 45. Pause."
DeleteI think it depends on whether one can compound his money better, from age 25, using CPF or able to compound his money better using other investment means (for retirement purpose).
Rainbow girl,
DeleteIf one can compound their money better than 4-5% annually, they won't be voluntarily contributing to CPF ;)
Don't get me wrong. Voluntarily contributing to CPF is not "wrong" or "bad" - especially if one already knew the more they "invest", the more they'll lose :(
Or if you are self-employed.
But in your 20s???
Have not even started already capitulate?
(Easy tell they are savers; not investors)
There's a reason why we have a mid-life crisis in our 40s. That's when all the little lies we tell ourselves don't work anymore...
I would think voluntarily contributing to CPF may make more sense in our mid 40s (got horrible investment track record) as we only have to wait 10 years to get our money back - provided the goal posts don't get moved ;)
Would you lock-up your money in 5-year fixed deposits at the same interest rate as 1 year ones?
Of course the savier young ones are those who "say" they voluntarily contribute to CPF.
But their real intention is just to park their spare money there in the CPF Ordinary account, never the Special account.
And when the timing is right, they intend to take that money out to invest in their first property ;)
Just ask your parents or older cousins. If they had voluntarily contributed to their CPFs 30 years ago, would they be financially better off now?
Or are they smiling to the bank as they had "voluntarily contributed" to their first property instead?
Merry Christmas to you and your Mama.
ReplyDeleteThat screenshot should specify currency and place of residence to gauge the purchasing power of that one million. Is that $1m in liquid asset form or mostly in residential property? Big difference in terms of lifestyle if networth is mostly in bricks which cannot be eaten.
Millionaire title is a great achievement when I was a kid but it's getting more common these days with some HDBs fetching $1m. It's still impressive but one needs to be careful not to over-estimate what $1m can do today.
hyom,
DeleteThanks and Merry Christmas :)
Eh, you think too much... LOL!
You are not appreciating the poke and the humour of the post.
I am not the only one who loves a good "poke" ;)
When I saw the poke by the author, I knew I had to share it here!
There are people out there who "honestly" don't know how much you need to be a millionaire!!!???
Just like there are those who had to ask others how much they need to be financially independent!!!???
LOL!
Quote : Just like there are those who had to ask others how much they need to be financially independent!!!???
DeleteHmm ... They practice what you say. Trust but verify!
CW,
DeleteThat's not Trust but Verify.
What shoes fit your own feet you don't know or don't trust? Have to check with others?
As facilitators, we lie when we say there are no dumb questions. We want the audience to interact with us.
But we all know the truth.
We cringe whenever we hear someone asks a DUMB question ;)
Oh ... I am too robotic to appreciate the humour and poke. How much money needed to be a millionaire is already defined in the word millionaire. If someone pose this question to me, I really don't know how to react. LOL. I guess that is why I cannot be facilitator. You've got a challenging job at IKEA. My work is more straight forward.
Deletehyom,
DeletePut me in a precision at 4 decimal places environment I'll be lost too ;)
Some prefer numbers; I prefer words.
I was lucky to stumble into that company. They really practice diversity and put a lot of focus on Values :)
Its a Values driven company.
Values are as "grey" as you can get! How do you put a number or measure it?
LOL!
Hi Smol,
ReplyDeleteMerry Christmas. U working today? Actually hor. I dun get the poke too
Sillyinvestor,
DeleteMerry Christmas!
At my former sales gig at Howard Storage World, I worked weekends and public holidays.
For this current one, I just worked weekends.
Getting lazier ;)
Don't worry about it.
Pokes, like jokes, require shared cultural experiences and context.
There are some readers who still can't get it the answer to the below poke is 13:
97% will fail this test
Its not the end of the world.
LOL!
It means.. Why some people need a chart to tell them something so obvious.
DeleteMerry Christmas SMOL and everyone!! Huat Arrr!!!
WolfT,
DeleteMerry Christmas!
心中有剑 (price action); don't need charts ;)
Since most people are visual (especially men, ahem), early snakeoils have discovered just like ink blots, if we draw lines here and there, we can makeup whatever stories we want!
If we can invent voodoo tales, we can create our own temple and collect 香油钱 ;)
Hi smol
ReplyDeleteMerry Christmas :)
sy sy,
DeleteMerry Christmas and Happy Holidays!
Hi all,
ReplyDeleteMy take is that the amount is subjective. I think that the amount is at most $40,000 per annum as per my perspective.
4% withdrawal rate is my derivation.
My two cents of views.
Ben
Ben,
DeleteThe arabic numbers of a MILLION is NOT subjective - 1,000,000 or 10 to the power of 6 if one wants to be cute ;)
But a "MILLIONAIRE" in Indonesian rupiah, Malaysian ringgit, or US dollars mean totally different thing altogether.
That's why when drafting contracts, if one's england is not powderful, we may need to hire lawyers to go through them ;)
See?
Million is black and white precise; millionaire is grey.
LOL!
As for how much we need to be financially independent, its definitely SUBJECTIVE!!!
You see some US millenia bloggers got passive income of USD$1,000 per month declare they are financially free!?
They sell everything and move to a lower cost of living country like Thailand.
What do they do?
Start a blog and hope they becomes the next Mr Moustache blogger who can "earn" USD$100K per year from blogging alone.
So does Mr Moustache has the competence to Earn More or Save More?
Wink.
Just like integrated medical plans. Some will only choose private hospitals only; some can accept public hospitals just as long its Class A; some don't mind public hospitals class B2 or C.
So what's the point of asking others how much you need to be financially independent?
Our own feet we should know what shoes fit us best ;)
Hi Smol,
ReplyDeleteYou are right. There's no point of asking others how much one need to be financially independent. I am of view if one asks such questions, this goes to show that he/she is not confident of the amount he/she need to have to be financially independent. Furthermore, as you mentioned, financial independent is subjective and varies from different individuals. This applies to the specific amount.
An example will be:
A feel that $1 million is required for him to be financial independent.
B feel that $625,000 is required for her to be financial independent.
Based on the above assessment, A and B are not wrong in their conclusion. The circumstances are likely to be different between them.
As you mentioned, only we knows what shoes fit us best. The views of others on our chosen amount might varies. Furthermore, their views are secondary. There is no need to bother about their views on our matter.
I previously mentioned that I quitted full-time employment. More than a dozen of my peers and friends are sceptical of my status. I did not tell them about my status. They started to comment on my decision and sarcastically stated that I will live to regret my decision and eventually come back crawling and begging for my old position back within a few months' time.
I did not even bother with such comments. These are their opinions and they are entitled to voice it out. It is my decision to decide whether to accept or ignore it (which I chose the later).
I also receive such comments via whatapps. I delete them immediately upon receipt. I do not allow such comments to affect me. I carry on with my free-will lifestyle and glad to enjoy every moments of my life presently.
Once again, thank for your well-said advice and quote.
Ben
Ben,
DeleteI am not cheerleading you or myself.
Our own lives; our own paths ;)
I can't tell what the future will be.
But I do know if money runs out, I can always go back to full time work.
Its not as if I've not done it before ;)
temperament,
ReplyDeleteMouth on your face of course can ask whatever you like!
Whether we cringe or face-palm is up to us too ;)
Chiak Muey Pueh Kiam Chye?
Sounds like Teochew food ;)
Don't look at me, I've no clue what has one's preference on food has to do with our finanical status???
Teasing you. Of course I know what you meant.
Earn less than $1900 per month can also buy Mao Shan Wang durians as a treat once in a while.
Rich landed tycoon everyday eat abalone and drink shark fin soup can also get bored... So Chiak Muey Pueh Kiam Chye for a change is a delight!
Some let money change them; some use money to change their circumstances ;)
SMOL兄：圣诞快乐，新年进步！
ReplyDeleteSanye兄,
Delete大家同乐!
岁岁平安!
Hi Smol,
ReplyDeleteWell said. By assuming that the worst case scenario which we have tried before, there is nothing to fear about going into FI.
I used to have reservation about quitting the full-time employment as recently as late Sept 2018 (i.e. the day before I tendered my resignation). Little did I realise that all these reservations are indeed moot and are unwarranted. I tendered the resignation letter on that very day and it's done. I am off from the employer one month later. It is as simple as ABC.
I think that I worried too much about the emotion at that point in time. I have learnt some important things about it.
Decide ---> Take Action ---> Forget about it.
There are just too much matters in life. One cannot manage all matters at one go. Focus on the things which matters the most to us. The rest are secondary.
The above is reinforced by the life unpredictability. One will never know whether tmr may come for him/her. If the inevitable occur in respect of him/her on the very tmr, the FI amount does not really matter to him/her at that point of time. It will be more than sufficient for him/her in fact given that the duration is one day from now.
I think that it will be more sensible to live life under such assumption. Libe the day as if there is no tmr. I am not meaning that one will spend all the fortune. My meaning is to spend the day as per one's term and condition and lead the day to the fullest as if tmr will never occur.
If tmr comes, it will be a bonus. Continue to enjoy the additional bonus with each day of being alive.
I will lead life in such approach with immediate effect.
Apologies for the lengthy post.
My two cents worth of views and passions
Ben
Ben,
DeleteDon't need to be apologetic.
I think I'm the blogger who writes longer comments than my blog posts!
LOL!
Just say what you mean, and mean what you say ;)
Hi SMOL,
ReplyDeleteThe US blogger living on USD $1000 per month in Thailand is an interesting one. He sold his previous investment blog for around USD $300K (if I recall correctly) to a commercial entity. After the transaction, the commercial entity realized that the main draw to the blog was the blogger himself. Facepalm, LOL!
Said guy is smart too, he's a motivational blogger and we know what that means. ;) He is not solely relying on dividends alone.
Meanwhile......another US blogger who has retired from work 9 years ago or so, with a net worth of around USD 5 million (my estimates, not sure how accurate), is returning back to work. He wants to buffer up his networth further in light of the upcoming poorer economic prospects, despite having multiple rental properties, dividend income, blogging business, and other businesses. Commenters on that post agreed with him and rolled their eyes on lean FIRE individuals who think USD $300K is sufficient for retirement (not taking into account impending account drawdown and dividend cuts from dividend aristocrats).
Unintelligent Nerd,
DeleteMany say they are financially independent or free. But you see them "working hard" at their side gigs or trying to get back into full time employment first opportunity they get...
We can empathise.
Saying you're financially free sounds a lot better than saying you were retrenched or unemployed...
Just like how some have "stolen" Minimalism from the Arts to mean frugality in the financial sense when those who appreciate the minimalism aesthetics lifestyle knew it costs hell lot of money!!!
That's why I've decided on the super grey description of taking sabbatical from full time work.
It can mean anything!
LOL!
Hi SMOL,
DeleteWait till......financial bloggers go for their staycations at Lloyd's Inn. Then I can imagine you cringing when they butcher the term "minimalist" further. =P
Unintelligent Nerd,
DeleteThey won't one.
They'll say why spend money to stay in Singapore when we can stay for "free" at our own place?
Take the money saved, compound by 30 years if we put it in CPF Special Account and start foaming at the mouth...
Or they'll complain not worth it :(
Spend so much to stay in a "spartan" room!?
LOL!
Nouveau riche will be nouveau riche.
Better to say retire from full-time employment and then free to do anything else
ReplyDeleteCW,
DeleteWelcome to grey :)
Why pigeonhole ourselves?
To be spiritually and psychologically "free", now that's another dimension of freedom!
Hi all,
ReplyDeleteAnother way is to say "Pursue personal interest".
BEn