Disclaimer:
These are not the opinions of my employer, AWS, and the only purpose of this newsletter is to share, learn through sharing, and foster some honest discourse in the community at large.
I will admit. I am sick of the lock-down. Want to get out, want to get my kids out, want to eat at a restaurant, want to stop cooking, and I want some space. Okay.
Had to be said.
I am a fortunate person. I will admit it. I have a good job, everyone in my family is healthy and we are all eating well. My finances are in good shape and so far this COVID thing won’t affect my long-term financial plans.
My kids are aware of some families that are hurting and question how do people make it through all of this. I don’t know to be honest. I have no idea what one would do to be in Singapore, have a family and no income. That would be as scary as hell.
I had my own scary phase in life.
It is my rock bottom of sorts. I vowed to never be there again in my life.
I was running a monthly deficit in the 1000’s - USD.
I had blown through that invisible line I had drawn for the amount of my savings I would spend on my second coming.
I had even sold my Savings Bonds - ouch. I bought a ton of i-Bonds back when they were cheap and paid a lot of interest.
For 5 years I had not accumulated any wealth or saved for retirement during my peak earnings years.
I was depressed.
I finally got out of it all. Was able to sell the F&B places - one quickly and one over time. Recouped barely anything which if you pull back on the numbers it made me even more depressed. Burnt through savings (yes - I was fortunate to have some), sold everything I had, dipped into long-term (not tax sheltered retirement stuff) and essentially stopped any accumulation in retirement money.
I bounced back. I got a gig at Yahoo and was back on the earnings trail.
I was also bruised and battered.
With all this I started to build my own framework for decision making and finances. Nothing novel but important to me.
Also the stuff I tell my kids to think about.
Work:
Experiment early and often in life. At some point you need to be on your way to making money and saving some. My dad always said I could do what I wanted if I made money. So I did. I also didn’t finish school. Not sure if that was a good trade.
Do the math at some point on real earnings. How much will you put in your pocket over say 3 years and be honest about the options since most are not in the money or liquid. Which means that if you are taking a hit on the salary and you never make it up on the options then you are losing.
If you want to do a Startup you are better off being the founder.
If you want to be in VC - you are better of doing your own fund.
If you want to work at a big company - then be purposeful about it. Earn and learn.
Money:
Start saving early. I was in mutual funds when I was 20. I still have a few of them. Compounding returns really are astonishing.
Don’t get hooked on debt. I have credit cards - and I pay them every month as I use them to manage cash and easily auto pay bills. I have a loan because I needed to manage the carry I owed the funds.
Don’t be house poor - it’s not worth it to have a place if you don’t have money. Pretty much all my real estate I made money on or hold free and clear now. I will admit Singapore is challenging but I am currently trying to pile up cash and CPF savings to buy an HDB since the math says owning an HDB is better than rent over time. Plus renting in Singapore really sucks.
Have a budget. I am currently hooked on Tiller and spreadsheets but their support of Asia accounts sucks.
Save for a rainy day or implement a proper emergency fund. 3-6 months of expenditures in cash. I hate Singapore banks so for this I use Stashaway’s Simple and have it throw some extra into funds just to keep investing. I also like that Simple isn’t instantly liquid this way I am less apt to play with my emergency money.
In Singapore you are dumb if you don’t use your SRS account to reduce your tax hit.
Nothing wrong with taking money off the table. My first Startup experience so far was my best but I blew the option wealth by holding too much and losing a ton of it during the .Com bust. I still came out ahead but the difference now is a pad in Phuket for a weekend excursion versus staying in a hotel. In hindsight, once I got all the stock - I should have instructed the broker to sell some every month to reduce the holdings. Now I am militant about selling down holdings that are too big regardless of how I got them.
I am middle aged for sure. Life actually does feel kind of short.
But I am thankful I learned about money early on and stayed on top of it.
You can too.