If one could live like a monk in monastery, life would be frugal and could fi/re at early age; daily life is basically waiting to eat, sleep and die.

This post has been edited by icemanfx: Aug 16 2018, 04:47 PM

My go-to blog when I need to get my monthly/daily dose of FI talks to get me stay motivated.

Thank you all for keep this thread going and throw a lot of positiveness into the discussions.

Keep on sharing guys. Thanks

Wanted to share my opinion on debts. A lot of people want to be debt free, because debt free is free from worries etc.

This is not entirely through in my opinion. While in the process of getting FIRE, taking debt can speed up the process, if manage properly. Yea debt free is good after you reach getting old or after you have the ability to FIRE. While still

I used to thought I need to be debt free at all time so that I don't have to worry about it. Now I realise that having a manageable amount of debt can be beneficial. For example:

i) Using credit card effectively to manage cash flow. This also includes the use of 0% balance transfer to spread out the payment over a longer period of time.
ii) Some loans like hire purchase repayment already calculate the interest till the end, so I find it no point to pay off it earlier (although pay off earlier will get some discount, not much).
iii) Share margin financing is such a great tool to borrow money at a low interest rate. Be sure to only buy good counter with SMF
iv) Some will refinance the house to cash out since the mortgage loan is only ~4.5%.

Things like that can help us along the way to achieve FIRE. The cash obtained from the above can be used as you like, e.g., investment

I wish to stress that the debt must be manageable and within your control to make it beneficial. Using debt is like a small leverage of your asset and it is a two-edge sword, if used improperly will bring terrible outcome

Feel free to discuss

Yup yup.
Debt, like fire or water, if used properly can be a great boost for financial freedom. However, for some who can't control "unlimited wants", can kill easily.

Personally, i prefer to keep a D/E ratio of around 30%+/- - using the debts for assets or $ generating stuff.
eg.1 Balance Transfers 0% 6-12-15 months even though i can pay off total, then use the cash in hand for investments (REITs), flexi mortgage prepayments, money market, FDs, etc.

eg. 2 Hire Purchase of vehicle - 9 years loan, effective rate 5.3%pa. - also using the cash for investments (REITs) + some holding in flexi mortgage for opportunities, which cost me 1.3%pa (5.3%pa-4.6%pa)

eg. 3 Keeping my flexi mortgage until the end and extend/refinance if worthwhile , even when there's enough cash flow to pay off. For "leveraged lelong purchases" when extreme value presents themselves - think market fears during Presidentials, BrExit, Brazil index crashes, Shanghai index crashes

Bottom line - borrow money when available & cheap, coz when kaka happens & financial institutions turns off the flow, it's expensive / hard to get when U want or need it for investments, biz cash flow, etc.

Just personal thoughts/practices ya - no gospel truths, PERSONAL finance is personal after all

that is very true (from what I saw and heard too)
if wanted to use collateral at time of business cashflow crisis.....
they don't really interested in how much machinery assets you have or how much they are valued now.
they will "MOST prefer" to be shown how much your business property or building valued

that bottom line of your is

Actually when you look at someone who is frugal/thrifty, you will find that with such attitudes, you will definitely cut down your living costs. I never thought (in my earlier days of my youth) that frugality was important for achieving early retirement/financial independence. I always thought it is crucial (absolutely compulsory!) to build income-producing assets (by gearing) and i have always lived with this attitude all my life until recently in the last couple years when i start to think more deeper about retirement expenses. No doubt building income-producing assets is important but if one doesn't have a very expensive lifestyle (usually because they are frugal), they require a lot less income-producing assets to sustain their lifestyle and hence can become FI/RE because any extra income will just add on to their buffer (as an insurance for periods where their expenses may grow due to unexpected events in life like major illness, etc...).

A lot of my friends in their 60s (in Sydney) are still working because they tell me they need A$55-70k/yr in expenses. All of them are professionals and they keep telling me they cannot retire because they don't have much income-producing assets. All have children who are in their 20s/30s and independent. They tell me that when their children were little, they just couldn't managed to save as everything comes in goes out immediately and they have been made redundant a couple of times. I tried to convince them their lifestyle is way too expensive (a lot of eating out - oldies like them like to drink good wine with some reds costing a couple of hundred bucks). When i analyze their lifestyle, i can easily see they can reduce their living costs by $15-20k/yr but they are accustomed to that kind of lifestyle so cutting down will become miserable/intolerable for them so they are happy to continue working. They tell me they will not stop working until they get retrenched.

There is no right or wrong with individual lifestyle. Fi/re is not meant for everyone and few could achieved. If one needs to work til late age to sustain his lifestyle is his choice. If they enjoy lavish lifestyle and willing to work, it is a fulfillment. Perhaps after they retired or made redundant, they will adjust to frugal lifestyle and live within their mean.

One good thing and I guess most important thing that we see nowadays (at least here😁) that the awareness towards financial management from younger people.

It is a good sign and hoping it will keep growing.

Most people cannot “tahan” with temptations and always want to keep up (showing off) with friends and neighbours. End of the month no money and some will borrow some more from friends 😅

I don't quite understand what you might mean by 'fulfillment' but after 60+, most people work because they need to (because they don't have the funds to sustain their current lifestyle). I can tell these people dread their job because they complain they are all required to meet strict kpi(s). If given the choice of sitting at home and going to work, you can guess which they will choose. They are all wage-earners and they are unlike people with their own business where all profits generated goes to their own pockets and thus the sense of fulfillment comes in. I am 56 and i can tell you my job doesn't give me any fulfillment. I am strictly in there for the money. I don't have any stress at work because my kpi(s) are easily met and i am bored at work because i am so free which is why my wife keeps reminding me about me getting 'gaji buta'. However, not everyone is as lucky as me and a few of them comes to badminton to 'de-stress'. If they had got used to surviving with a cheaper lifestyle, i suspect a lot of them would have stopped work. After all, most of us migrated because we hope life would be better (and easier) in a foreign country - if we need to continue to work till we are in our seventies, would you think that migrating to Aust is a mistake? All the friends that i was referring to have all migrated to Aust from Msia in the 70/80s like me.

Well, it is easy for the frugal to become extravagant,but very difficult to reverse the process.


Added:
Especially for those employed in corporate world, the passion will be wane off over the years regardless you were once passionate or top employee. There will come a time when you will take up a job just for the money and nothing else. There're ton of reasons will make you not going to smile to your job; looks, we had friends get bored as too free, too stress due to insane target and timeline, nice boss replaced with a mean boss, victim of office politic, meaningless job routine, physically or illness no longer fit to jobs.

This post has been edited by sky18: Aug 18 2018, 03:07 PM

Once the wages goes up the lifestyle follows, thats probably the same with almost everyone.

Some ppl want to work. Rather than have to work.

What if one loses their job and their spouse fell into chronic care which requires lots of $$$ for treatment at about the same time. Bad luck can happen and that debt can put more pressure. I am not meaning to bash you but just the situation of someone I know.

Totally agree with you.

In the corporate world, i hear a lot of people get 'burnt out' and they hate their jobs but have no choice because they need the money. This is precisely the reason why if we need to establish enough income-producing assets so that can fire our boss. This can be achieved a lot earlier if our lifestyle is maintained at the lower end by having a simple way of life. This is not always easy as forummer 'flight' has suggested that as income increases so does our lifestyle. In fact, it is very difficult to live a 'modest lifestyle' esp when our income shoots up. I must admit that i myself can't do that but i guess as long as we don't become too 'extravagant', our goal is accomplished. Even if we do indulge in a little luxury, i guess as long as we don't do it all the time, that i think is quite 'acceptable'

Your first sentence sums it all up - that it is very difficult to reverse the process of being extravagant. We will suffer like a drug addict getting withdrawal symptoms when we try to reverse the process so i always keep reminding myself constantly - 'keep the lifestyle simple with minimal luxuries'.

Not true. Well in my case.

I am still spending as if I am still on student budget even though I am working already.

Is all about discipline to achieve what you want. Will is everything.

For illness part - this is why exactly we need insurance. Insurance is crucial in financial management, it helps to avoid large spending on medical treatments. Without insurance it is quite common to find someone who has lots of saving only to find it gives to the doctors

As for losing job, if finance is managed well, there is usually a few months of backup fund to prepare for this situation.

Yes insurance and well budget can prepare but you can't discount the fact that debt adds an element of risk into the equation.

Lifestyle inflation can be avoided once one found the contentment.


Just do yourself an experiment, try be relax, mindful and present to the moment to savor a cup of coffee at normal kopitiam, be an observer ppl around and environment of the shop; it's much better than spend 10++ for a starbuck coffee but actually tasteless if you're just rushing to DRINK it but mind ful of anxiety & thoughts about rushing job schedule.


From your statement, my guess you're likely 20+ to at most 30. Just don't push yourself too hard but find an acceptable balance. Pursuing FIRE doesn't means one must strictly maintain ZERO lifestyle inflation. Once you reached your number, you might feel some of your uphold during young time might actually unnecessary. In duality world, almost all of the matter is not an absolute black or white, but fall in between. Just imaging your big-fat bonus @ 20+ after fully committed and hardwork thorughout a year, now it merely 1 month of your paycheck at age 40+ where relax most of the time throughout the month.

I think generally humans like to associate with friends/relatives who portray 'strong confidence' in themselves in the hope that one day they will be like that. Now what are the traits of someone who displays 'strong confidence in themselves', you may ask? Most people associate the term 'confidence' with being 'successful'. This brings us to the question - what are the traits of a successful person? You will see that in human behavior that what people see in someone who is successful is usually associated with material things - like an S-class Mercedes (less than 2-3 years old, not 20-year old), wears a Rolex Day-date with diamonds on the bezel and dial, wife takes a Birkin/Chanel/LV. Usually people don't know what kind of house you live in (free-standing bungalow, terrace or unit) but they probably judge by the suburb you live in (Bukit Tunku, Taman Duta, Pantai Hill,..). Now if you possess those assets and flaunt them, you will have many friends because they view you as being successful and they want to be like you! Things like humility/humble, honest/trustworthy and nice personality is viewed as less important because you may be worth rm50mil but because you don't flaunt your wealth (because you are humble and you may view this as being the important thing in life), you will be viewed as being less likeable than the one who flaunts his wealth (even though the one who is flaunting may be surviving on borrowed money). This is just the follies of modern human being and no-one can change this.

LOL....very true.

Some good read on pseudo affluent: https://thinksaveretire.com/pseudo-affluent/