Recently, I met up with a old soccer friend of mine who I haven’t seen for more than a decade. We had a really good conversation over dinner as it has been quite awhile since we last saw each other.
One of the most amazing similarity is that we share a goal towards achieving financial independence early. A bit about his background – He is quite an active guy who is very passionate about dragon boating since his school days. He also has a strong interest for adventure activities like mountain climbing, scuba diving and water sports. He is not very focus on his studies due to his engagement in so many activities but still managed to get into a local university and graduated with a business degree.
He is a savvy guy who is always thinking about how to get the best deal for all his purchases and is quite resourceful on this front. All our common friends constantly reach out to him for advise, ranging from big ticket items like house, cars to small items like the best set lunch deal in town. He is constantly sourcing for ideas like stock investing, business ideas but never really got started.
He is the same age as me and his only daughter just turned one year old, and mentioned that he has been spending a lot more since his wife gave birth. He had always been owning a second hand car as he believes that a car depreciates the most during the first few years. However, he bought a brand new continental car before the birth of his child which he thinks it was a good deal. He stays in a condominium and hires a maid which is what many view as a “typical” household in Singapore.
His wife was recently let go by her company not long after she returned from her maternity leave and is currently a freelancer. Suddenly he became the sole bread winner until his wife could establish herself in freelancing which could take a few years. He even went for a few exotic overseas trips before his daughter turned one, as a way of thanking her wife for bearing him a kid. He also goes across the causeway often for his golf escapades, co-owns a private speed boat and spend quite a bit on dining. He mentioned that he is financially tight this year and will not be travelling overseas. He is also penny pinching quite a bit on all his recent small purchases and slowly depleting his savings.
He is also a person who is constantly shopping for stuff, for instance contemplating a new car even though his current car is barely one year old and looking to upgrade his condo to a bigger one when he still struggling to pay for his current condo with one income. His dream is to own a landed property that cost almost $2 million in today’s dollar. He also said his wife is the only child so the in-laws property will one day become theirs.
I respect him for his thoughts and thank him for been so frank even though we haven’t seen each other for a while. Our conversation does made me think a lot later and I think one should aspire to have dream in life but sometimes we need to be more realistic about the goals we set. Sometimes I think to myself, how do this person achieve FI at an early age when he is still finding a way out of this consumerism driven world. The only way is that he increase his income significantly to support this lifestyle or he have some investment that fund this lifestyle. He also works in the financial sector and we share the same corporate rank. So I guess our earnings should be more or less similar but we share very radically different lifestyles.
He also mentioned that recently he has been thinking about starting a dividend focus stock portfolio which I’m more happy to help with. But the main problem is he does not have much knowledge in stock investing and has limited capital to kick start this portfolio due to his current lifestyle. I think a better proposal is to help him slash some of the unnecessary expenses, beef up his savings and introduce him to read up on financial blogs to boost on his financial literacy. I do managed some portfolios and provide investing advice to some of my closer friends but some of them are not resolute enough to achieve their financial goals if they do not make some significant changes. I believe that it takes a lot discipline and determination to achieve FI and you will not arrive at FI by stroke of luck.
We shall see how my friend will change once I open this Pandora’s box on FI and hopefully it does induce some changes. Maybe it might change his perspectives about the good life in Singapore.
Hey Dave, using a fair bit of “is also” there haha!
I think before dividend investing, perhaps it is good to ask him about putting his annual expenses, against his investible net wealth or just net wealth in general. It will give a good sensing whether it is better to slash savings or to re-allocate assets. just some thoughts.
Thanks for dropping by and will keep that in mind! I think for his case, probably he needs to have a good sense of his spending and how much he could allocate savings towards investing.
It will be good if he has some assets that we can re-allocate.
Hi kyith, when you say assets, do you mean his house, car and boat as I don’t really see a lot of assets he owns? As I think CPF and savings insurance are mostly for traditional retirement purpose.