Are you a motivated wealth builder?

One of the worst nightmares for a salaried employee is being retrenched. This is especially true for mature workers in their forties and fifties. The prospect of losing your job at such a career stage can not only be frightening, but also incredibly damaging to your financial health. In this regard, are you a motivated wealth builder?

Recently, a Singaporean named Mr. Chua shared that he is still looking for work six months after losing his job. His experience is not unique in Singapore; given today’s highly competitive job market, it can happen to any one of us. To mitigate the damage 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 investments in order to be considered an effective wealth builder. To this end, I feel that ensuring employability and job longevity plays an equally critical role in our wealth journey.

Most of us tend to place too much focus on our current day jobs, completely overlooking the importance of acquiring new skills or knowledge to develop a second career for the later stages of our working lives. We get too preoccupied with daily office work and give low priority to upgrading our “individual software.” The wake-up call always comes too late—right when you are served the retrenchment notice.

For mature job-seekers, this article may offer cold comfort, but it is important to moderate salary expectations in order to remain employable. If you have been drawing an $8,000 to $10,000 monthly salary, you need to be realistic and accept a much lower pay scale. Of course, going back to square one is extremely painful because it feels like years of hard work have been effectively erased from your career history.

But think of it this way: having a job with pay below your expectations is still far better than having no income at all. After all, your monthly bills don’t stop just because you lost your job. Reframe your mindset and view this income reduction as a form of “investment” to pick up new skills and 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 funds to tackle unforeseen job retrenchments. From my point of view, times have changed, and Singaporeans may need to save much more in today’s context.

I have read about local white-collar workers who lost their jobs years ago and are still unable to find work in their industries today. This is why, if I have spare cash, I will never top up my CPF Special Account or make partial capital repayments for my mortgage loan. Some finance bloggers encourage readers to do so, but in my opinion, following this route is akin to laying a financial trap for ourselves. By doing so, you severely restrict your personal cash flow. It is a one-way ticket; the CPF Board or the banks will not return your funds even if you find yourself stuck in a dreadful financial situation.

Besides saving for a rainy day and upskilling ourselves, we must have the passion to learn the art of growing money through investing. Making money from the stock market is a proven way of building wealth, but you need more than just book knowledge. I have seen many people who claim to do tons of research and reading, yet they still end up losing money in the stock market. Why is this so? Are they stupid, did they not do enough homework, or is it just bad luck? I beg to differ.

To achieve success in the stock market, you must know how the market actually works, and more critically, you must develop your own strategy. At the end of the day, it does not matter if you are occasionally right or wrong on individual stock picks. Having a system or an investing philosophy is what guides you through the good times and the bad. Easier said than done, I know.

For new investors, understanding market dynamics and developing an individual style is a tough learning process. Some people spend a lifetime paying expensive “school fees” to the market, yet they still can’t figure out how to win.