I just want to jot down this awesome article from 4th Pillar, a financial blog I've been following because it resonates so much with me.
If you're chasing after Financial Freedom to impress others, you've got it all wrong.
Contrary to popular belief, FF is never about comparing. Maybe when we were younger, we tend to believe that.
We buy the latest iPhones and gadgets not so much because we use the features, but because of the "emotional reward" of "impressing others". The same for buying a bigger car, a bigger house, a luxurious vacation to post online, etc...
As you grow older, you'll realized the cruel/fortunate fact - No one cares.
No one is keep tab on what phone you're using, what car you're driving, how much you're making, etc... No one has the effort to do that. No one except yourself.
"Making purchases for the sake of impressing others is a never-ending process. There will always be someone who has a bigger, better, shinier new consumer item than you and the only way to compete with them is to buy, buy, buy.
There is no one to impress. There is no one to compete with."
This might be the secret towards not just financial freedom, but true freedom.
Tuesday, February 14, 2017
Thursday, February 9, 2017
Financial Literacy - Chinese New Year Conversations
Over the CNY, I've had conversations with some relatives about the importance of saving for the future and on the topic of insurance.
On investments, the old generations (especially those who were burnt before) are still full of distrust and fear. They told me to "never invest in stocks and bonds because it's dangerous". Even when I tell them about Singapore Saving Bonds (SSB), which are guaranteed by the Government, they tell me "Bonds are just dangerous. It might collapsed."
I really don't know want to laugh or cry. They even believe their insurance policies are safer than SSB.
I don't know how to explain to them that if the SSB does default, your insurance companies would have long gone bankrupt and your entire bank savings and Singapore Currency (SGD) will be worthless.
They still equate "investing" to "gambling" - trying to time the market, buy penny stocks, etc... They had a look of disbelief when I tell them I almost never sell my stocks - even after they have gone up a lot.
What? Buy and hold forever? What kind of sorcery is this?
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Fueled by the lack of internet/financial education in their days, and of course gospels spread by insurance companies and agents, this led to the older generation becoming overly dependent on insurance.
This belief is so deeply entrenched (根深蒂固) that they believe insurance is the safest and best form of saving. They can pour their entire life savings (and retirement hope) into life plans, endowment plans, etc...
They are extremely skeptical of other form of investments. In fact, just the word "investment" turn them away. I think it's no longer possible to convinced these people otherwise.
I'm not saying insurance is not important, but it just isn't an optimal way of saving.
You use a hammer to hit a nail, and you use an axe to chop a tree. There's an appropriate tool for a job. And Insurance is a protection tool, not a wealth accumulation tool.
You need to diversify your wealth - For protection, for emergency, for capital expenditures, for wealth growth, across a wide variety of assets. I doubt their 20 year-old fresh graduates sons and daughters doing insurance know all these (90% of these "financial consultants" are equally clueless, the remaining 10% just want to sell insurance for their own commissions).
-------------------------------------------------------------------------------------------------------------------------
In the end, I know I'm just grumbling to myself here. It's hard to convinced them.
Argue further and you will be seen as rude, or they will give you the "I eat salt more than you eat rice, what do you know" look.
Anyway...
This is really "inspiring me" to write a beginner series to consolidate the main points on financial literacy.
On investments, the old generations (especially those who were burnt before) are still full of distrust and fear. They told me to "never invest in stocks and bonds because it's dangerous". Even when I tell them about Singapore Saving Bonds (SSB), which are guaranteed by the Government, they tell me "Bonds are just dangerous. It might collapsed."
I really don't know want to laugh or cry. They even believe their insurance policies are safer than SSB.
I don't know how to explain to them that if the SSB does default, your insurance companies would have long gone bankrupt and your entire bank savings and Singapore Currency (SGD) will be worthless.
They still equate "investing" to "gambling" - trying to time the market, buy penny stocks, etc... They had a look of disbelief when I tell them I almost never sell my stocks - even after they have gone up a lot.
What? Buy and hold forever? What kind of sorcery is this?
-------------------------------------------------------------------------------------------------------------------------
Fueled by the lack of internet/financial education in their days, and of course gospels spread by insurance companies and agents, this led to the older generation becoming overly dependent on insurance.
This belief is so deeply entrenched (根深蒂固) that they believe insurance is the safest and best form of saving. They can pour their entire life savings (and retirement hope) into life plans, endowment plans, etc...
They are extremely skeptical of other form of investments. In fact, just the word "investment" turn them away. I think it's no longer possible to convinced these people otherwise.
I'm not saying insurance is not important, but it just isn't an optimal way of saving.
You use a hammer to hit a nail, and you use an axe to chop a tree. There's an appropriate tool for a job. And Insurance is a protection tool, not a wealth accumulation tool.
You need to diversify your wealth - For protection, for emergency, for capital expenditures, for wealth growth, across a wide variety of assets. I doubt their 20 year-old fresh graduates sons and daughters doing insurance know all these (90% of these "financial consultants" are equally clueless, the remaining 10% just want to sell insurance for their own commissions).
-------------------------------------------------------------------------------------------------------------------------
In the end, I know I'm just grumbling to myself here. It's hard to convinced them.
Argue further and you will be seen as rude, or they will give you the "I eat salt more than you eat rice, what do you know" look.
Anyway...
This is really "inspiring me" to write a beginner series to consolidate the main points on financial literacy.
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