To be fair, I would dare to wager that most of us here started off as part of that 96.3% (if I have to be pedantic about the figure) - barring those who were born with a silver spoon and suckled that instead of a cheap silicon pacifier - and we worked our way up and out of that 96.3%.

My point was that, while being in the masses, I looked up to that 3.7% and aspired to get to where they were, instead of being envious or negative about them. I didn’t feel it necessary to denigrate their achievements or question their successes in a pathetic attempt to make myself feel better.

Unfortunately, much of what I see here is reminiscent of the tall poppy syndrome (or, in forum vernacular, “butthurt” comments).

Rarely do I find a conversation as mature and devoid of acerbity or cynicism as that which is happening now with you and icemanfx. It’s refreshing and candidly enjoyable!

The only logical conclusion is naturally because I’m in a conversation with equals (be it financially, philosophically or intellectually) and there’s absolutely nothing that needs to be proven.

Spot on. I always have this saying “render unto Caesar that which is Caesar’s” - it helps me sleep well at night AND also allows for the hassle-free purchases of big ticket items and investment instruments. All I usually need is to show them my tax returns for the past couple of years and that’s it, no questions asked, account approved and ready to go.

We are here to encourage each other to stay true to our collective, common goal.

Thank you for sharing - as with most things, moderation in all things is the way to go.

In Singapore, all income derived from coupons, dividends, interest payments are tax-free. I will only need to declare rental income.

datolee32, thanks for the message. I thought it would be more appropriate to answer your question in the correct thread, and allow others the opportunity to chip in their point of view as well.

Everyone’s journey to FI/RE will be different, with different goals and endpoints. It’s hard for me to say how you can achieve yours - our incomes would be very different, our commitments similarly so.

In our example, my wife and I have a very generous combined income, derived from our professions - she being a chartered accountant and I am a consultant medical specialist. We have no children, and are are in our late 40’s, only a couple of years away from turning 50. We also have no outstanding loans and mortgages, and have been debt free since nearly 10 years ago.

This is already clearly very different from the background which you’ve shared with me.

Having said that, I believe you’re on the correct approach. My first step towards FI/RE was to be debt free. To that end, we poured all our extra income into paying off all our property mortgages, including our primary place of residence, in the shortest time possible.

To be honest, what I’ve shared with the forum and what you’ve seen is only the cash/bonds/stocks component - and all of these were accumulated only in the last 10 years after we had cleared our mortgages. We calculated, just on the basis of paying off the mortgage on our primary place of residence here in Singapore (a 5500sqft detached gated and guarded freehold landed property in the central core district), we would have “saved” nearly $1,000,000 in total interest payments.

My logic was that I wasn’t savvy enough to make $1,000,000 in profits with whatever money I had, so that money was better spent helping me save $1,000,000 in interest payments instead.

Now, imagine replicating this mindset on a dozen other properties scattered in Singapore and Australia. Hence my reference that the cash component of our total assets didn’t happen until relatively later in our careers/financial journey - every dollar we had in our initial years was spent paying down the capital, and paring down our mortgages.

Others may have a different viewpoint - I know a lot of gurus and experts here will say that the power of leverage should have been employed, and our money should have been made to work harder for us to generate higher returns, rather than to be used to pay off any loans. And I believe that is also a valid argument.

But, my wife (despite being an accountant and perhaps because of it) and I are very conservative by nature, and as it turned out, this approach has served us very well insofar as shielding us from the worries of outstanding loans and mortgage repayments due in the time of COVID-19 uncertainties.

So, in summary, my opinion/answer to your question on how to achieve FI/RE is to be debt free - not merely having a higher return from your investments than your outgoing loan repayments, but to be truly debt free, so that every dollar, every ringgit you make from that day on, is a dollar or ringgit saved, and pure profit.

I would like to leave the floor open for other contributors to share their perspectives and opinions with all of us - I neither for a second claim that my way is the only way, nor do I assert that it is the best way to FI/RE: it is our way, and it worked for us because of our unique circumstances which will definitely differ from yours and everybody else’s.

This post has been edited by hksgmy: Jun 19 2020, 02:57 AM

I have to say, I never quite planned it in terms of age or salary/net worth. Doctors tend to start much later and start much slower than others in the workforce, but what we do have is longevity and for some, the growth in income can be exponential once a reputation and word of mouth is established.

We did achieve our primary goal, which was to become debt free, by 40 - that wasn't exactly planned either - it was just a milestone we earmarked on our financial journey, but once we achieved that, the financial freedom came quite quickly.

Nevertheless, it's great to see that you've planned it out in detail - good luck on your journey!

Started buying in my 30's, with loans, of course - and then worked hard to pay all of them off ASAP.

Not to mention once you're eyeballs deep in debt, you may end up pushing sales to your customers and turn them off in the process, which also leads to the self fulfilling prophecy of businesses folding like dominoes falling.

This is a very good question, and I'm sure there are many answers, but here is mine, and please note, this is how my wife and I did it: it is NOT the final word on how it should be done for everyone else. You’ll have to decide on your own paths - I’m just privileged to be able to share mine.

I'll quote the same example which I've used, which is the primary place of residence. We bought our house in Singapore for a little more than $5,000,000. At that time, we qualified for an 90% loan based on our combined income, but because I could only buy it under my wife's name (she converted to Singaporean in order to be eligible to buy landed property & for us to keep our other investment properties - otherwise, the law states that PRs have to sell all other residential properties in order to qualify to stay in landed housing in Singapore), in the end, we could only take 80% of the loan. We paid $1,000,000 from our savings and took out a $4,000,000 loan (we decided against using CPF, since it was only her CPF that would be deducted).

Let's say the returns from our remaining savings/investments were 5%, where as the interest for the house loan was say, 4%. On paper, we would be making 1% "profit" - but this is only true if we had $4,000,000 in investments generating 5%, while paying the interest on a $4,000,000 loan. For the purposes of simplifying this discussion, I'll just use a one for one comparison - you make 5%, you pay 4%. This is not even taking into amortization factors, where you pay more interests upfront in the earlier years of repayment.

Let's say, with all our other mortgages that we were busy paying, and after paying the $1,000,000 for the house, we only have $500,000 left in our savings. Now, the equation starts to look less favourable. You might be making 5% on $500,000, but you're paying 4% on $4,000,000.

It's because we knew we didn't have an equivalent counter-balance amount to offset the loan that we worked hard to pare down the capital on the mortgage - we paid at least $500,000 in principal payments alone, on a yearly basis, often more, to clear that $4,000,000 mortgage ASAP - and in doing that, we estimate we saved nearly $1,000,000 had we went the full 30 years.

It's a very simplistic example - and I know there maybe wrong assumptions/accounting involved in the example above, but it was something that worked for us, and helped us focus on our goal of being debt free & achieving financial freedom.

Hope that helps.

This post has been edited by hksgmy: Jun 19 2020, 08:27 PM

Yes indeed. As I mentioned early on, the method my wife and I adopted is not by any means a universal way for everyone. It worked for us because both of us had high disposable incomes and because of our extreme risk adverse natures - and also because we had no kids, which meant very much reduced outgoings (to add, even less in terms of parental support, since my parents passed on young).

I suppose if I were given another 20 years to live my life over again, I might have taken a different approach and used a different strategy.

It's interesting & quite refreshing to find so many with a similar/like-minded strategy!

No where is this feeling more comforting than during this present COVID19 crisis. I’m so grateful that we are debt free!

And there's absolutely nothing wrong with that approach either - I'm a firm believer in the axiom: "there's more than one way to skin a cat", and whatever works best for one person will not necessarily be of the same efficacy for the next.

Yeah, our strategy now is all about growing our retirement nest - it's just that we felt it was more for our peace of mind to be able to grow our nest without the burdens of loans and debts, and we were lucky to be in a position to achieve that.

That's why I've constantly and repeatedly said that the strategy my wife and I planned was suitable for us because of our circumstances and I'm not judging everyone else by the same standard. However, it also bears reminding that I started wealth generation much later in life - it was my wife's income that pulled us through the initial years, and it was her income that we invested in properties when we were in our early 30's. I had no problems securing loans - banks apparently loved dishing out loans to doctors - but, I was making a pittance compared to what she was. It wasn't until I became a consultant, nearly 10 years after I graduated, that I finally caught up (and overtook her). What you see is only the gloss - it still took us a lot of hard work and determination to get here.

The mindset and outlook must be in synchrony with our ultimate goal.

Different people have different interpretations and different end points. Being free of debt makes for better control of financial planning overall - but as long as what you generate passively outstrips what you have to pay/your commitments, then, by one definition, that’s already financial independence

I'm averaging 4 - 5%, and to be honest, I'm already very pleased with that, given the climate we're presently in at the moment.

I’m near retirement (will be turning 50 in a couple of years, and I will be relocating to Sydney to begin my next phase of (semi) retired life, hence my portfolio is heavily biased towards the relatively “safer” assets classes. I also work in Singapore (have been for the past 25 to 30 years) so, understandably my investments are mainly in Singapore (where I am at present) and Australia (where I’ve planned to be more than decade ago). These are mainly investment grade bonds and a mix of residential and commercial properties in both countries. I have a small selection of blue chip stocks (mainly Singapore banking stocks - the usual culprits: DBS, UOB, OCBC, that I will hold till I grow old for the dividends.

I’ve also done some right sizing/rebalancing/housekeeping (insert your preferred term here) of my portfolio at the start of the year, mainly thanks to COVID19 which presented me a rare opportunity to pick up some of the IG bonds that I’ve been eyeing at below par value.

That’s about it, really. Nothing too risky I’m afraid, nothing too exciting. At my age, preservation of wealth is as important as generating it, if not more so.

Again, that may depend on the type of business set up you intend to run. If you’re providing services or skills or expertise, the set up costs might be a lot lower than a traditional brick and mortar type of business, burdened by stock inventories etc.

And I agree - it’s not easy being a businessman. If it were, everyone would be doing it.