One of the worst nightmares of a salaried employee is being retrenched. This is especially so for mature workers in their forties and fifties. The prospect of losing your job at such career stage can not only be frightening, but also damaging to your financial health. In this regard, are you a motivated wealth builder?
Recently, a Singaporean called Mr Chua is still looking for work 6 months after losing his job. His experience is not unique in Singapore and can happen to anyone of us, given the competitive job market. To mitigate the damages arising from job retrenchment, we must always strive to be a motivated wealth builder.
One of the most common perceptions is that you must be good at managing your personal finances in order to be considered an effective wealth builder. To this end, I feel that ensuring employability and job longevity play an important role in our wealth journey as well. Most of us tend to place too much focus in our job and overlook the importance of enhancing new skills or knowledge with the aim of developing a second career in the later stage of our working lives. We are always too pre-occupied with our office work and tend to give less priority in upgrading our “individual software”. The wake-up call always came too late – when you are served the retrenchment notice.
For those mature job-seekers, this article may be of cold comfort to you but it is important to moderate salary expectations in order to remain employable. If you have been drawing $8000 to $10,000 monthly salary, there is a need to be realistic and accept a much lower salary ranges. Of course going back to square one is extremely painful because it means that the years of hard work have been effectively erased from your job history. But think of it this way: having a job with pay below your expectations is better than having no income at all. After all, you still have monthly bills to settle even though you have lost your job. Reframe your mind-set and view the income destruction as a form of “investment” to pick up new skills or knowledge.
In today’s job market, organizations undergo rapid changes. There are many financial advisors or bloggers who recommend building up at least six months of Emergency Fund to tackle unforeseen job retrenchments. In my point of view, time has changed and Singaporeans may need to save more in today’s context.
I have read of Singapore white-collar workers who lost their jobs for years and still unable to find jobs in their industries till today. Thus, if I have the spare cash, I will never top up my CPF Special Account or do partial repayments for my mortgage loan. Some finance bloggers have encouraged readers to do so but in my opinion, I will not follow this route because I feel that it is akin to laying a financial trap for ourselves. In doing so, you would have severely restricted your personal cash-flow and it is a one-way ticket because the CPF Board or the banks would not return your funds even if you are stuck in a dreadful financial situation.
Besides saving for a rainy day and up-skilling ourselves, we must have a passion to learn the art of growing your money through investing. Making money from the stock market is one way of building wealth but you need more than just knowledge. I have seen many people who claimed to do tonnes of research and reading but still end up losing monies in the stock market. Why is this so? Are they really stupid or did they not do enough homework or is it due to bad luck? I beg to differ.
To achieve success in the stock market, you must know how the market works and more critically, you must develop your own strategy. At the end of the day, it does not matter you are right or wrong in your stock picks, but having a system or investing philosophy can guide you through good and bad times. Easier said than done, I know.
For new investors, understanding the market dynamics and developing individual style is a tough learning process. Some people spend a lifetime paying expensive school fees to the market but still can’t figure out how to win the market.
Join me in my wealth building journey. Don’t be in the dark side.
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SG Wealth Builder