My financial journey

$250.That was the total amount of savings in my bank accounts when I just started working in 2005. On looking back, it was really a “touch and go” financial situation for me. I had depleted all my life savings because I had stopped receiving allowances from my parents when I was studying for a full time degree at NUS.

I did not want to burden my parents because my late father’s business was not doing well and my mom was a full time housewife. Our household income wasn’t that ideal back then partially also due to my father’s stroke condition.

So I had to supplement my savings with part-time jobs like giving tuition during the school holidays.So if you ask me what is it like to be poor, I can fully empathize. After all, I have went through this dark journey before and I am thankful that I had emerged from that challenging period to become a stronger person.

For those who are born rich, social mobility may be a strange word to them, however I do not blame them because they do not know what is it like to worry for money. For the rich and wealthy, Singapore is like a playground where they can indulge in expensive toys like fast cars, yachts and lavish landed properties. But for people who are born into low income families like myself, the need to improve the quality of life and move upward in the society is not an option.

In Singapore, those who are poor, ill and disabled are mostly left to fend on their own and their family members are expected to step in and help out. People who belong to this social group are practically on survival modes because the government make it so tough to qualify for the social assistance schemes. To belong to this social group is a terrible feeling and the feeling of hopelessness is made worse if you lack the academic qualifications to enable you to break out of this poverty trap. Make no mistake, I am not advocating social welfare and I agree that social handouts are bad for the citizens because it promotes laziness and complacency. But surely, there should be some form of assistance in place to help families facing genuine difficulties?

In 2010, my father’s day care center jacked up his monthly day care fee by 15%, citing increased staff and operating costs. I went to meet up with the center manager and tried to explore the possibility of bringing down the cost. I thought that since the day care center is run by a religious group, their mission statement should be to help those who are poor and needy.

I thought my father would have qualified for some form of help to mitigate the increased day care costs. After all, my father’s health condition was really in bad shape and he was wheel-chair bound. He could not feed on his own, need help to go to the toilet and could not change clothing on his own. Because of this, he qualified for the Eldershield payouts and my family used the amount to pay for his day care center fee. We also wanted to give my mum some rest when my father was in the day care center because we knew taking care of my father was very draining.

To my surprise, the manager rejected my application outright and told me that my family would not qualify for any help because our average income per head in the household exceeded the threshold set by the government agencies. He also told me that even if my siblings and myself got married and moved out of the house, we would still not qualify for any form of help.

I felt so disappointed back then and wondered why Singapore has to be so calculative and cold towards those who are disadvantaged. We pride ourselves to be a First World country but our fellow Singaporeans don’t even have the desire to reach out for their fellow men in distress. Sometimes I just wish our society can be more compassionate and don’t measure a person’s worth based on income.

In Singapore, the culture is “every man for himself” and if you are down and out, nobody will come forward to help you. Nonetheless, I am glad that I went through all these because the experiences helped to build character in me. In addition, I learned the importance of being financially vigilant and savvy. Below are some of the basic ingredients which would help to lay down the foundation for wealth building:

1) Maintain a positive outlook in life and always take good care of your health. It is important to take your work seriously but don’t take yourself seriously. Health is always more important than wealth but in Singapore, too many people chase after money and end up paying more for poor health in their old age.

2) Always remember that when you work for others, you are trading time for money. But time is a limited resources, so your wealth will be limited by your day job. To build wealth, always develop additional passive income streams.

3) Only invest in what you understand and never invest with monies you can’t afford to lose. Most people don’t have the holding power and tend to panic sell whenever there are market fluctuations. These people often end up losing money because they don’t have the conviction in their investments.

4) Don’t forget to invest in yourself. Knowledge is key to successful wealth building but many people hate to educate themselves on the science of making money. A successful wealth builder don’t become rich by chance. It is through years of learning that they acquire the wisdom on how to make money.

5) Buy term and invest the rest. Far too many Singaporeans bought the wrong insurance policies and end up under-insuring themselves. Most people don’t realize the purpose of insurance is to protect against financial losses and not to make profits. Some people like my father don’t even buy any insurance policies when they are young and healthy. When they suffer from chronic illnesses in their thirties and forties, they realized to their horror that no insurance companies would want to insure them.

6) There are things that money cannot buy, such as kinship, love and friendship. Always invest your time with your loved ones and good friends. Their support is crucial in helping you to navigate through the fiercest storms in your life.

7)  Always strive to “mind your own business” but then again, not everyone can be a successful entrepreneur. To succeed in business, there is a need to take calculated risks and to think of how to address the downsides first.

8) Always diversify and practise portfolio management. Many people thought that investing is all about buying shares in the stock market. Actually it is important to put aside some money in other assets, such as bullion, property and bonds.

9) It is not what you know but who you know that matters. In Singapore, having the right connections can get you ahead of the game.

10) You can make money from property but never consider the shelter you are living under as a form of investment.

Magically yours,

SG Wealth Builder