My parents told me to save for rainy days at an early age. They’re not wrong, but they’re not entirely right either. Consider this—a plate of chicken rice costs $2 about 10 years ago. 20 years ago, it probably costs $1.
Inflation depreciates the value of your money in the bank. Considering that the inflation rate outstrips the interests that banks pay you, it’s high time to learn how to properly invest your money and make them work for you.
- You Should Start Investing Early
Investing is not something that only retired uncles and aunties do with their CPF money. It should also be something that we all do once we have the means to do it. Insurances are one way to go about it. Explore your risk appetite and see what works for you. Never ever put all your eggs in one basket!
- Credit Cards are Evil
Ok, I’m exaggerating, but the idea of spending money I don’t have send a chill down my spine, not to mention those fine prints about late payment charges and other administrative costs. I have a friend who declared bankrupt simply because he was running massive debts using one credit card to pay outstanding charges for another credit card. If you are not the type to scrutinise every last line of your credit card contract or bills, it’s best to give these plastics a wide berth.
- Your Car is Not an Asset
This is a crucial reason why I don’t drive in Singapore. Besides the costly Certificate of Entitlement (COE), there are other costs to consider e.g. road taxes, insurances, ERP gantry payments, maintenance costs etc. Singapore has one of the most efficient public transport system in the world. Make full use of it.
- Your HDB Flat May Not be an Asset Too
In case you are unaware, HDB flats are government housings that comes with a 99 years lease agreement. This means you DO NOT OWN your HDB flat. You merely rent it from HDB for 99 years. If you choose to sell it, remember that you’ll need to pay back either your CPF or bank loans used to service the mortgage, plus deducting any other fees payable. Only then will the leftover be considered your profit, if there are any leftovers to speak of.
- You Do Not Need a Lavish Wedding
Throwing a 300 table wedding banquet doesn’t equate to a happily-ever-after, neither does a solitaire diamond ring. Don’t pauper yourself by trying to impress everyone with your wedding-of-the-century. The money can very well be spend on better things e.g. renovations for the new house or a good honeymoon trip. Communicate clearly with your spouse early to avoid a potential ugly scene and grouchy in-laws on the actual day.
- Starting a Family Costs Money
According to the 2014 annual report released by the US Department of Agriculture, it costs approximately a quarter of a million to raise a kid till 18 years of age. This is a good reason why Singaporeans are not biting the Baby Bonus carrots. As a parent with two kids, I should know. Considering that you have to start spending for pre-natal check-ups right up to the day your kids hit the world as a working adult, that’s easily two decades of expenditure in food, shelter and education, minus any kiasu activities like extra tuitions, piano lessons and the like. Go figure.
- There’s Nothing Wrong About Being Rich.
Thanks to TV dramas, I grew up with the notion that wealthy people are either snobs who lived in ivory towers, or shady folks that walked a fine line. This gradually formed a prejudice that being rich was unethical. I couldn’t be more wrong. There’s nothing wrong in accumulating wealth. In fact, everyone should strive to gather wealth so that we can get out of the rat race. The only thing is not to let money changed who you are as a person. It’s our upbringing, not our bank accounts that define us.
- You Should Always Negotiate for A Better Deal
Or rather, you should always try to negotiate for a better deal. If you want something, fight for it. Be prepared to show that you are worth your salt and rise to the occasion. But remember to be reasonable as well. Nothing puts people off more than a cocky persona with little to show.
- Don’t Let It Get to Your Head.
There’s never an end to what money can bring or do, and we’ll always be surrounded by a dozen temptations to live beyond our means. If you’re never good with money, then learn to manage your finances properly. Avoid negative influences or peer pressure to splurge just so you can fit in with the group. Don’t be surprised that these fair weather friends will disappear faster than you can say “Alamak!” when trouble hits the fence. True relationships can never be bought with money. There’s no fun in being the richest and loneliest person in the world.