I have a very simple goal, to be financially free by 30 years old. Some people laugh at my goal, calling me delusional and insane. Very few people think I’m serious but I am. I’m a huge follower of the Financially Independent, Retire Early (FIRE) movement. We believe in saving and investing aggressively so that we can retire in our 30s or 40s to be able to pursue any interests without any financial worry. That’s what Financial Freedom means to me.
With the utmost respect to everyone out there, I think there is more to life than working your ass off till the day you die. Some might argue with me now that they won’t be working till they die and will retire in their 50s. But “retiring in my 50s” doesn’t sound appealing to me. With the average life expectancy for Singaporeans in 2020 at 83.66 years old, you’ll have at most 33 years left to enjoy life? From the day we were born, we study and grow. Then we get a job, pay bills and start a family. Only getting to enjoy life freely without any financial worries at 55? There’s more to life than just that. There is a quote that I’ve come across that I will always live by..
Never get so busy making a living that you forget to make a life.
But why can’t most of us break free from our job?
It’s because we want to “enjoy life” as we work. From the very first full-time job that we land, we see that as the opportunity to buy everything that we’ve always wanted like fancy shoes, clothes, the newest iPhones, expensive tech gadgets. You name it.
This is the sad reality for the life of average Joe (and Jill):
For the first 20 years, they live and learn about life. Study in school, make friends and have a taste of what life has to offer.
Next 10 years, they start working and enjoying all their money. Before they know it, they’ve been spending on items every month and have been working for 2 years with minimal savings.
For the next 20-30 years, they keep to their habits until they realise that they want to settle down and get married. Suddenly, panic and urgency take over and they start to save up for your wedding and housing-related purchases like the downpayment, renovations, and furniture. Just after they think they can start rebuilding their wealth again after slashing their savings for the wedding and house, they got a kid. Once again, they need to work and save to provide for the kid’s education and living needs. When will it end?
It only ends when the kid starts working and becomes independent. The couple can then start to live for themselves again and work on their passion and interests for the remaining years of their life. But the problem is, they’re old now. They don’t have the energy and mental strength to start pursuing their passion. They won’t be able to start that business that they’ve always been planning or travel to the most distant places on Earth. Odds are, they just have enough energy to walk around the town and meet friends because they’re old. If they can even walk! That is the sad reality for our average Joe (and Jill).
How can we break free and achieve Financial Freedom then?
Financial Freedom can be achieved early if the person starts working towards it early. In fact, it all starts from the very beginning. From the very first full-time job, you start accumulating your wealth. Start building an investment portfolio and stop buying stupid junk that will only waste away in a few months’ time. I used to buy fancy clothes when I was in my teens and realised that those purchases are worthless to me now. Those purchases were only temporary. I read this book and it taught me how to spend money on things that can give me the most satisfaction value. Ever since I’ve come to that realisation, my focus has been completely shifted. I’ve made a promise to myself that my efforts will mainly be in accumulating my wealth and keeping me sane during this process. (Yes, it’s tough)
Being content with life itself
I hate the phrase “pamper yourself once in a while”. It’s a guilt-free pass to buy anything you want, as long as it’s not “often”. But how often does it have to be until it is considered as often? I feel like I had trouble trying to define that.
For example, from the moment I started working my first job, I was saving and investing so much every month. My mom told me to get something for myself once in a while. So, I went out and bought a 2-door coupe… Go big or go home right?
Owning a car at 22 years old back then was hella fun, don’t get me wrong. All the late-night drives with my friends and speeding tickets because I wanted to feel like Dominic Toretto in Fast and Furious, was definitely fun. Best big purchase of my life yet. But when my COE for my car ended and I had to sell it away, I immediately wanted to buy a new one. A fancier one. During that moment, I realised that there’s no end. Until we start being content with life itself, there will be no object, amount, or status in life that can help to satisfy us.
Ways to save more and invest safe
So, live within your means. If possible, live way below your means. I only spend 30% of my salary. This includes my bills, food, and family allowances. It was difficult at first. But what kept me under 30% of my salary was my determination to achieve my long term goal. I have this implanted in my head, “Financial Freedom by 30”. It keeps me on track and always stick to saving and investing aggressively. Some people might think that it’s very risky, but there are also a lot of safer investments that you can make. For example, the good ol’ index funds that have an average return of 10 % per year. However, there are other low-risk companies that are relatively safer than individual stock picking but give better gains than index funds. If you wish to learn more about different stocks that other investors are buying, there are other bloggers that share their insights too.
I will release articles soon on how I take steps to achieve my goals, so keep lurking.