Wednesday 26 April 2023

Retirement Income Model - End Game Walking Down The Mountain Strategy

 

In gacha gaming, there're early-game, mid-game, and late-game strategies.


Often, newbies to a gacha game get themselves all tangled up when they watch late-game players play and try to copy or replicate their play styles.


That's how some get burned-out or discouraged and left the game after a few months.



Similarly, when it comes to FIRE or retirement planning, there's walking up the mountain and walking down the mountain strats.


Before I begin, I would like to remind everyone words are very powerful as they do affect our thinking.




Be an open umbrella


Noticed I removed the Dividend from Dividend Income Model?


Dividends locked us parochially into equities only. 


As some may have already discovered, once we just use a broad and grey definition like Income, we have a lot more options as in interests from fixed deposits, bonds, CPF; etc.


Then there's also income from rentals. Don't just think and limit yourself to properties. Anything you owned that you can "rent" to others also can!  (Illegal money lending is a crime OK! So don't get carried away...)


How about private annuities to complement CPF Life for those who want to pump in more beyond the CPF Enhanced Retirement Sum (ERS) limits? 


We can also continue working beyond retirement (freelance, part-time, ad-hoc); that's Retirement Income too. No? 




Passive my foot!


Long time visitors to this watering hole know how I feel about passive.


Well, no one stopping you if you really believed no need do anything and money will drop from the sky to you.


Maybe you're best friend forever with your God/Gods? Or Luck is your superpower!?


Hence there will be no Passive in front of Retirement Income Model for me too.




Walking Up The Mountain


I noticed some youths have a goal to have $100K by age 30.


Let's use that as Index 100.


If you wish to FIRE at age 35 or 45, do you think an Investing/Retirement Income Strategy would help you get there? Or in gacha gaming, is that a meta strat?


OK, you enjoy your day job and not into early retirement and all that jazz; you just want financial independence when you retire.


If you just aiming for 1M65, that's probably doable. But if you want 4M65, would an Income Strategy help you now?


It won't take you long after doing the math that an Investment Income Strategy works better when you're doing splendidly in your day job; or you have your own business that's growing exponentially. 


That's where the major compounding comes from - it's the annual cash injections into your Investment Income Portfolio!!!




Walking Down The Mountain


Once we have got our hands on the whatever amount that's "enough" for you, it's a lot easier to switch to the Retirement Income Model.


You think why I wrote Look at Goldfish instead of Modelling them?


If you bother to look under the hoot and at actual Goldfishes, the Retirement Income Model is not how most walked up the mountain in the first place.



Most got there through properties.



How many suck at their day jobs? 


A well-paying job means more cash injections annually for the win! 


Save More can oredi!



How many can show 10 baggers like our fisherman CW? 


If day job sucks, must make up for it at investing/trading! 


Earn More. Period.





P.S.  After 10 years of journey, we are starting to see and read former youths starting to doubt their Investment/Retirement Income vehicles...


It's not surprising; it's science.


Same strategy, but it's different when you're walking up against gravity; versus when you're walking down with gravity now on your side. Wink.











3 comments:

  1. Hi SMOL,

    The "playground" is missing something without dear CW.

    Let me share my journey on preparing for retirement. Something I shared with other bloggers whenever they blogged on the topic of passive income.

    I think its good for people to aim for FI but personally I would not advocate the RE part. Mathematically, it is when a person attained FI that he/she can fast track the wealth accumulation by saving 100% or more of their income (when their passive income exceeds their expenses). I call this period the golden period of wealth accumulation and you would want to stretch this period as long as possible.

    For us (wife & I), we have built up 6 passive income taps (borrowing the term from dear CW). Our Government has helped put in place four of the taps:
    SRS, Medisave Account (MA), OA&SA and CPF Life. If you build them up well, they can be very good & reliable income taps and one way to build them up well, is to continue to work and contribute to them. They need time to grow and compound. The other two passive income taps are : Dividend Tap and Rental Income Tap.

    The Covid pandemic was the latest and wont be the last reminder to us not to be fully dependent on the dividend and rental income taps. Thats why we have “relegated” the two taps to “bonus” taps.

    We ranked our income taps according to their stability / dependability or reliability.

    Gold taps for income sources that are most stable / dependable. Our two Gold Taps are the yearly interests from our OA&SA, and the payout from CPF Life.

    Silver taps for the next most stable / dependable. They are our SRS savings and our Medisave Account (MA).

    Bonus taps for those not so stable / dependable sources ie our dividend and rental income sources.

    We planned our retirement lifestyle based only on our gold taps :
    Gold tap 1 (OA & SA interest) : $68K pa
    Gold tap 2 (CPF Life payout) : $72.2K pa (starts at 70)

    The incomes from the Silver tap, the bonus taps (dividends & rental) are bonuses to us. We will use them to pamper ourselves, buy a car, go for long holidays, gifting, reinvesting, etc…but we can live without them. Also if our bonus taps perform well year after year, we may defer tapping on our Gold taps and let them compound further.

    I am still working, so all the dividends and rentals collected are reinvested yearly to grow the dividends further. Interests earned in CPF stay in CPF to compound.

    For details on how we built up our income taps, (the good, the bad and the ugly) please visit : https://t.me/CPF_Tree

    ReplyDelete
    Replies
    1. mysecretinvestment,

      Yes, everything comes in cycles.

      At its peak, this watering hole was averaging 20-30 comments per post. Very happening as dragons and snakes co-mingle here to banter and poke fun at each other!

      Lucky I'm hobbyist blogger who blogs because it's fun for me. I've not forgotten why I am blogging in the first place (初心).

      No or few comments?

      I just treat it I'm starting all over again like during my first-year blogging - you could literally hear a pin drop! LOL!




      I appreciate your "real people; real story" sharing.

      There's a real difference between sharing what we have done (track record) versus sharing what we gonna do (a goal, a plan, a wish, a prayer).


      Your story is definitely not Lean or minimum PC requirement! Wink.

      I find it counter-intuitive when I read someone just gotten themselves a fledgling golden goose, start making plans to kill it slowly through a thousand cuts!? Eh?

      I would think one would like to fatten the golden goose further (compound growth) so it can lay even more golden eggs in the future?

      And when it comes to golden eggs, why would we want to consume ALL the golden eggs???

      Shouldn't we save some of the eggs to hatch them into more golden geese (or more taps using CW's example)?

      Of course, we can't do the above when we hate our day job so much that the moment we can average $1000 income per month from our investments, we call it FIRE and escape to Bali or Phuket...


      On the flip side, the other reason for my Gold Fish post is that we can also spot those who have ZERO investment portfolios and/or have crappy CPF balances, yet still have happy retirements.

      Old fogeys, how many of our mothers worked? Most are stay at home mom housewives, no?

      Even if our dads worked, many are not tertiary educated...

      Yet how many are destitute and sleeping in the streets?

      Thank goodness for our Asian family values and traditions!!! (And owning their own HDB flats! This must give credit to big daddy)

      Although it may be at risk if today's young parents spend too much time on Money or FIRE matters, and neglect their responsibility in bringing up their children proper...

      You never have time for your children so you hire maids or send them to boarding schools. So it's fair when you old, your children send you to the best nursing homes money can buy...

      Look! Anything money can solve is not a problem!


      I still remember the story of the 2 poor farmer brothers who secretly gift firewood in the winter nights to each other without realising, until they finally met one winter night...

      I am lucky to have siblings. Not to parasite on each other; but I know when winter is here, we are more than willing to share our firewood.

      Not everything has to do with money. Relationships matter too.


      Again, looking at actual Gold Fishes, we can spot multi-millionaires that are lonely, sad, or suffering from depression...

      On the other spectrum are retirees that have little means, but they have a reason to get up in the morning! They are surrounded by boisterous grandchildren to take care!!!

      Delete
  2. Smol,

    Life is a journey. It differs from individuals. Hence, these encounters are experience. Enjoy the moment of time.

    Wtk

    ReplyDelete

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