In one's journey to financial freedom, being frugal is definitely one of the criterion.
Can one be frugal and still enjoy life? I will like to think so. Many things in life can be enjoyed without spending much money.
Let's take the case of eating out.
By eating at a cheap hawker center, one saves alot more compared to eating at a fancy restaurant. And seriously, the food actually tastes pretty much the same.
Take the example of how I spent my morning today:
I took a slow walk together with my family to Margaret Drive Hawker Center. Ordered a bowl of fishball noodles (S$2.20) for my wife and duck noodles ($2.50) for myself. I topped that up with 2 x Iced Tea and a cup of coffee ($2.60) and also 2 delicious popiah ($2.40).
That was a hearty meal at less than $10. In times like this, saving up every single cent surely counts. A meal at MacDonald's would cost more than $10 definitely.
Read Related Postings:
Top 10 Money Saving Tips
My Saving and Spending List
Drinking and Eating Your Way to Financial Freedom
This blog is about financial freedom and serves to inform, educate and entertain the public on all personal finance matters. The author of this blog has been blogging for 5 over years. He was also a guest blogger at CPF's IMSavvy site (now AreYouReady site). This blog is visited by many unique readers from various countries every month. Do bookmark this blog and leave your comments.
Invest in Gold in Singapore
Gold needs to be part of anyone's portfolio in their journey to financial freedom. Gold serves as a hedge against any inflation. Usually, people recommend that 10% of your investments be in Gold. I currently have 0% in Gold and am looking for opportunities to purchase some Gold bullion or Gold coins. Based on what I have found thus far, only UOB offers gold investments. Please see below for what UOB offers:
___________________________________________________________
Gold Bars
Choose from a large variety of sizes, ranging from small gold wafers to cast kilobars. They can be bought from and sold back to the Bank with our daily buy-sell market quote.
___________________________________________________________
Gold Bars
Choose from a large variety of sizes, ranging from small gold wafers to cast kilobars. They can be bought from and sold back to the Bank with our daily buy-sell market quote.
Gold Bullion Coins
We offer the following bullion coins in various sizes, ranging from 1/20 oz to one oz:
- Canadian Maple Leaf Gold Coins
- American Eagle Gold Coins
- Australian Kangaroo Gold Nuggets
- Singapore Lion Gold Bullion Coins
These coins are legal tender with face value, and are accepted and traded worldwide. They can be bought from and sold back to the Bank with our daily buy-sell market quote.
Adjusted for Singapore market conditions.
Gold Certificates
These are sold in kilobars and up to a maximum of 30 kilobars per certificate. With no expiry date, these certificates can be exchanged for physical gold or cash whenever the need arises.
Gold Savings Account
You can buy and sell international gold - through a passbook - at prevailing market prices and transact any time during banking hours in units of one gm of gold, subject to a minimum of five gm per transaction.
Your gains are not subject to Singapore's Goods and Services Tax (GST) and can be exchanged for cash, whenever the need arises.
Limited to a maximum of 1,000 gm per transaction on Saturdays.
Silver Savings Account
It has never been easier to invest in silver. We have made the international silver market more accessible to smaller investors through our Silver Savings Account, where you can own unallocated silver bullion with a minimum fineness of 99.9%.
You can buy and sell international silver - through a passbook - at prevailing market prices in multiples of 10 ounces of silver each time, limited to a maximum of 500 ounces per transaction on Saturdays.
Your gains are not subject to Singapore's Goods and Services Tax (GST) and can be exchanged for cash, whenever the need arises.
How much does it cost?
- Check our daily gold and silver prices
- For Gold Bars: Prices are based on the daily international gold price adjusted based on Singapore market conditions
- For Gold Bullion Coins: Prices include a premium over the international gold price
- For Gold Certificates:
- A flat S$5 per certificate
- An administrative fee of S$30 per kilobar per annum
- For Gold Savings Account: An administrative fee (in grams of gold) as low as 0.12 gm per month or 0.25% p.a. on the highest balance per month, whichever is higher
- For Silver Savings Account: An annual administrative fee (in ounces of silver) as low as 0.2 ounce per month or 0.375% p.a. on the highest balance per month, whichever is higher
The Dollar Crisis
It seems that many books and articles have been written about the coming demise of the US dollar and the effects it would have on the global economy.
In my journey to financial freedom, I understand that there must be a certain amount set aside hedge against inflation. But what if there is a total collapse of the entire financial system worldwide? What if the US dollar becomes absolutely worthless? How would that affect me and my savings?
If the day was to come when the US dollar becomes totally worthless, I think all countries willl be affected. Everyone will face inflation or hyperinflation and those currencies which are not backed by gold will suffer the most. Of course, this situation is just hypothetical but it could happen in our lifetime.
The best thing one can do is to make sure that a certain amount of money is set aside in Gold - which for the longest time in the history of mankind, has been used as money. Only in recent times have we as nations abandon the gold standard which was replaced by Man's money (easily reprintable and reproducable money).
I am looking for opportunities to invest in Gold.
So far, the only bank in Singapore that sells gold is UOB. I will explore this further in the next posting.
In my journey to financial freedom, I understand that there must be a certain amount set aside hedge against inflation. But what if there is a total collapse of the entire financial system worldwide? What if the US dollar becomes absolutely worthless? How would that affect me and my savings?
If the day was to come when the US dollar becomes totally worthless, I think all countries willl be affected. Everyone will face inflation or hyperinflation and those currencies which are not backed by gold will suffer the most. Of course, this situation is just hypothetical but it could happen in our lifetime.
The best thing one can do is to make sure that a certain amount of money is set aside in Gold - which for the longest time in the history of mankind, has been used as money. Only in recent times have we as nations abandon the gold standard which was replaced by Man's money (easily reprintable and reproducable money).
I am looking for opportunities to invest in Gold.
So far, the only bank in Singapore that sells gold is UOB. I will explore this further in the next posting.
Gold as a Hedge against Inflation
I have been considering buying some physical Gold as a hedge against inflation.
Not too sure how to go about it though as it seems that UOB is the only bank that is selling physical gold coins and bullion in Singapore.
The prices of Gold however seems pretty high even now compared to their historical prices.
Not too sure how to go about it though as it seems that UOB is the only bank that is selling physical gold coins and bullion in Singapore.
The prices of Gold however seems pretty high even now compared to their historical prices.
Decided to Quit My Job
I made the decision to quit my $5k a month job today.
I have not told anyone about the decision.
Will I regret it?
A stable job that pays well but gives me no satisfaction whatsoever. Is time more important than money to me or is money more important to me than time?
With this job, I will be able to pay all my debts in maybe 20 years and be pretty well off (if nothing goes wrong). But the prospect of staying just does not excite me. I want to do something different with my life.
Is it foolish to be making such a decision during such a time as this with all the financial crisis?
What about my responsibilities to my family?
On the other hand, what if I do manage to find a job that pays just as well and gives me more satisfaction?
I have not told anyone about the decision.
Will I regret it?
A stable job that pays well but gives me no satisfaction whatsoever. Is time more important than money to me or is money more important to me than time?
With this job, I will be able to pay all my debts in maybe 20 years and be pretty well off (if nothing goes wrong). But the prospect of staying just does not excite me. I want to do something different with my life.
Is it foolish to be making such a decision during such a time as this with all the financial crisis?
What about my responsibilities to my family?
On the other hand, what if I do manage to find a job that pays just as well and gives me more satisfaction?
Dividends for the Month of November and the meaning of investment
Collected a small sum of dividends for November:
$326.40 from First REITs
$28.54 from Suntec REITs
Yup, that is all I am reporting for my dividends for the month of November. For December, I will probably be making some small investments into the stock market again. Both to increase my passive income as well as to buy stocks that are currently undervalued.
Just some thought about investments. Nothing educational really. Perhaps more philosophical.
What is investment really about? If someone (e.g. a layman without much knowledge about investment) was to ask me that question, I think my reply would go something along this line:
Investment is basically just delayed gratification. If I have $50,000 in cold hard cash today, I could buy a car straightaway. On the other hand, I can choose to delay this gratification, invest the money, and hope to earn some returns from it that would justify the length of delay in my gratification.
For example, I could take this $50,000 today and buy a normal 1.6L Mitsubishi Lancer (no sports rim, etc). So if somebody asks me to delay my gratification say for 1 year, I will have to ask myself.... "If I can only buy a car one year later, what do I expect?"
Some might expect the exact same car model perhaps with sports rim. Some might say... "Huh??? You want me delay one year?? Then I will have to rely on public transport for one whole year... no way!! If you want me to delay by one year, I want a BMW 3 series..
This then defines the "reward" that the person is looking for in turn for the delay in their gratification. The person who only wants the additional sports rim is looking for a smaller reward versus the one who wants the BMW 3 series.
As reward is tied to risk... I could then tell the first person to simply put the $50,000 into a bank deposit account that gives 1-2% interest per annum and assuming that there is no inflation for the year and prices remain the same... he could easily afford the exact same model of car he wants with sports rim. This is basically a low risk investment.
For the other person who is expecting a BMW 3 series, I would tell him to invest it in the stock market now.. only problem is that there is no way I can guarantee that in 1 year's time, his $50,000 will turn to $150,000. Instead of becoming $150,000 , it might become $10,000 or worse still...nothing.
On hearing this, he might have to fine tune the reward that he expects based on the risk level that he is able to accept. Basically, the higher the reward from the investment, the higher the risk.
$326.40 from First REITs
$28.54 from Suntec REITs
Yup, that is all I am reporting for my dividends for the month of November. For December, I will probably be making some small investments into the stock market again. Both to increase my passive income as well as to buy stocks that are currently undervalued.
Just some thought about investments. Nothing educational really. Perhaps more philosophical.
What is investment really about? If someone (e.g. a layman without much knowledge about investment) was to ask me that question, I think my reply would go something along this line:
Investment is basically just delayed gratification. If I have $50,000 in cold hard cash today, I could buy a car straightaway. On the other hand, I can choose to delay this gratification, invest the money, and hope to earn some returns from it that would justify the length of delay in my gratification.
For example, I could take this $50,000 today and buy a normal 1.6L Mitsubishi Lancer (no sports rim, etc). So if somebody asks me to delay my gratification say for 1 year, I will have to ask myself.... "If I can only buy a car one year later, what do I expect?"
Some might expect the exact same car model perhaps with sports rim. Some might say... "Huh??? You want me delay one year?? Then I will have to rely on public transport for one whole year... no way!! If you want me to delay by one year, I want a BMW 3 series..
This then defines the "reward" that the person is looking for in turn for the delay in their gratification. The person who only wants the additional sports rim is looking for a smaller reward versus the one who wants the BMW 3 series.
As reward is tied to risk... I could then tell the first person to simply put the $50,000 into a bank deposit account that gives 1-2% interest per annum and assuming that there is no inflation for the year and prices remain the same... he could easily afford the exact same model of car he wants with sports rim. This is basically a low risk investment.
For the other person who is expecting a BMW 3 series, I would tell him to invest it in the stock market now.. only problem is that there is no way I can guarantee that in 1 year's time, his $50,000 will turn to $150,000. Instead of becoming $150,000 , it might become $10,000 or worse still...nothing.
On hearing this, he might have to fine tune the reward that he expects based on the risk level that he is able to accept. Basically, the higher the reward from the investment, the higher the risk.
Consolidating My Thought on Financial Freedom
It has been a few months since I started this blog to write on my journey to financial freedom.
Since then, things have changed quite a bit.
Firstly, the global financial crisis has hit, shaking my confidence in the Singapore stock market. Shares that I am holding have dropped to record low prices. While I am investing mainly for passive income, looking at the prices of REITs and hearing all the news about the credit crisis really makes me worried whether my passive income strategy is the correct method to financial freedom.
Secondly, books that I have been reading lately have altered my belief in a stable and predictable business cycle of ups and downs. What we don't know and don't plan for can destroy our journey to financial freedom. Some of the worst case scenarios I can think of are:
a. The Greatest Depression in Human History.
b. Hyperinflation
c. Severe Oil Crisis that disrupts everything
d. War
e. Death
All these have changed my perception about investment and financial freedom. I remember reading the book about the Richest Man in Babylon. In it, we are advised to use 10% of our money to work hard for us. The richest man in Babylon saves up 1 gold coin out of 10 gold coins he gets and uses that 1 gold coin to work hard for him.
The problem with this simple rule of investing is that it does not take into account the unpredictable events that I mentioned above. So what if I invest in the Singapore Stock Market and have a $1 million stock portfolio only for severe hyperinflation to hit reducing my portfolio to peanuts?
What I hope to achieve is financial freedom. The ability to choose whether I want to work or not, and not working because I need the money to support my family.
A quick analysis of my current financial situation:
Debts:
1. Housing Mortgage ($253,000)
2. Car loan (estimate $30,000)
That is a lot of debt! If I do not spend a single cent, it would take me a good 5 or 6 years of my current annual income to totally pay off this debt. How did I ever get into this situation? 10 years back, I had $0 dollars in debt. After starting a family, I have a 6 figure debt in just a blink of an eye.
4 years back, I could choose whether I want to work or just rot at home. Now, I simply have to work because not working is NOT an option. I would simply not be able to finance my debts..
So here I am, stuck in a pile of debt. With a 5k per month salary but only managing to save an approximate $1k a month.
My Financial Freedom Journey seems fraught with difficulties, uncertainties, psychological barrier and the like. It seems that I am all alone in this journey...
My passive income stands at $3000 a year. That simply won't do. I need to find ways to increase my passive income..
Since then, things have changed quite a bit.
Firstly, the global financial crisis has hit, shaking my confidence in the Singapore stock market. Shares that I am holding have dropped to record low prices. While I am investing mainly for passive income, looking at the prices of REITs and hearing all the news about the credit crisis really makes me worried whether my passive income strategy is the correct method to financial freedom.
Secondly, books that I have been reading lately have altered my belief in a stable and predictable business cycle of ups and downs. What we don't know and don't plan for can destroy our journey to financial freedom. Some of the worst case scenarios I can think of are:
a. The Greatest Depression in Human History.
b. Hyperinflation
c. Severe Oil Crisis that disrupts everything
d. War
e. Death
All these have changed my perception about investment and financial freedom. I remember reading the book about the Richest Man in Babylon. In it, we are advised to use 10% of our money to work hard for us. The richest man in Babylon saves up 1 gold coin out of 10 gold coins he gets and uses that 1 gold coin to work hard for him.
The problem with this simple rule of investing is that it does not take into account the unpredictable events that I mentioned above. So what if I invest in the Singapore Stock Market and have a $1 million stock portfolio only for severe hyperinflation to hit reducing my portfolio to peanuts?
What I hope to achieve is financial freedom. The ability to choose whether I want to work or not, and not working because I need the money to support my family.
A quick analysis of my current financial situation:
Debts:
1. Housing Mortgage ($253,000)
2. Car loan (estimate $30,000)
That is a lot of debt! If I do not spend a single cent, it would take me a good 5 or 6 years of my current annual income to totally pay off this debt. How did I ever get into this situation? 10 years back, I had $0 dollars in debt. After starting a family, I have a 6 figure debt in just a blink of an eye.
4 years back, I could choose whether I want to work or just rot at home. Now, I simply have to work because not working is NOT an option. I would simply not be able to finance my debts..
So here I am, stuck in a pile of debt. With a 5k per month salary but only managing to save an approximate $1k a month.
My Financial Freedom Journey seems fraught with difficulties, uncertainties, psychological barrier and the like. It seems that I am all alone in this journey...
My passive income stands at $3000 a year. That simply won't do. I need to find ways to increase my passive income..
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