Money lesson

December 16, 2024 sgwealthbuilder 57 Views 0 Comments

It’s the year end festive season again! As the year draws to a close, I am penning this article for some reflections on personal finance. In terms of my active income, 2024 has been a great year for me as my income rose significantly due to my job performances. For my passive income, the interests from my Singapore Savings Bonds and fixed deposits managed to mitigate the losses from my stock investment portfolio. At the big picture, Singapore continued to be hit by news of investment scams and frauds. On this front, I would like to do my part and re-publish an old article of mine on money lesson.

According to Singapore Police Force, scam cases hit a record high of 28,751 in the first half of 2024, with victims losing a record high of over $385.6 million. At the going rate, scam losses could exceed $770 million by the end of 2024. Notably, investment scams accounted for the largest scam losses – there were 3,330 investment scam cases reported in the first half of 2024, resulting in a total loss of at least $133.4 million.

The most notorious investment scam should be the US1 billion nickel trading fraud case allegedly engineered by Singaporean businessman Ng Yu Zhi. The case was touted to be Singapore’s largest ever Ponzi scheme. Some of the victims included professional investors like Finian Tan, who reportedly lost US$19 million. This case should be a cautionary tale that even well-educated investment professionals could fall for investment scams.

In this article, I will share my insights on three important money advice. The story is written from the perspective of Christianity but I have adapted the story to reframe it from the angle of wealth building. Note that I am not a Christian and this is definitely not an article meant to spread Christianity. Instead, I believe that readers can benefit very much from this sharing in the course of their financial journey.

In life, we will always receive money advice from well-meaning friends and relatives. Yet, very often, it is only those simple money advice that really withstand the test of time. As a matter of fact, the three money advice contained in this article served me rather well in my financial journey. Thus, I am sharing this article with readers.

The long journey

Once upon a time, there was a poor young man named David who just got married. The couple lived in a small farm. David wanted a better life for his wife and decided to venture out to find a better job. Before he left, he said to his wife,

“Dear, I will go and find a job that pays well so that both of us can have a better life. I am not sure how long I will be away but all I ask of you is to stay faithful and wait for my return.” The wife promised to do so.

And so, he left. David walked for many days until he met a farmer in need of help. The young man offered his services and was immediately given a job. However, David requested the following,

“Sir, I will work for you as long as possible but when I decided to return home, please do release me. In addition, please save up all my salaries until the day I decided to go. When I decided to go, please return me all the money.” He farmer agreed to his condition and let him worked at his farm.

Since then, David worked really hard for the next twenty years without taking any holidays. Finally, after twenty long years, he decided to return home to retire comfortably with his wife. He went to his boss and said, “Boss, I decided to return home. Please return all my savings.” To this end, the boss calmly replied,

“David, you have worked hard for me for twenty long years. Indeed, you deserve to have a good rest and I appreciated your contributions. Of course, I remember our deal twenty years ago and will obviously honour it. But I will like to make new offer to you. Option one: is I will return all your savings to you and you can return home immediately. The second option: is I will not return your money. Instead, I will offer you three money advice and you can return home immediately. You can only choose one out of the two choices. Think over my proposal carefully and let me know your decision.”

David thought hard over his boss’ proposal. Eventually, he made his decision and told his boss, “I want the three money advice!”Three money advice

The boss then revealed the three money advice:

Money advice (1): Do not take short cuts, which can be financially fatal or may even cost your life.

Money advice (2): Do not be too curious because it may lead to your downfall.

Money advice (3): Do not make decisions in moments of rage or pain for you will regret the actions taken.

After dishing out the three golden money advice, the boss gave David three loaves of bread for his journey back home. He instructed David that the two smaller loaves were meant for his journey home while the biggest one shall be shared with his wife. With that, David set off excitedly to reunite with his beloved wife.

After walking for several days, David met a stranger who asked him where he was going. He replied “I will be walking along this path for about 20 days in order to reach home.” To this end, the stranger advised him to take a short cut which would enable him to reach home in just five days.

David took up his suggestion and walked along the short cut until he recalled his boss’ first piece of advice. He then promptly returned to the longer path. Several days later, he learnt that the short cut led to an ambush and the victims were killed by robbers.

David continued his journey and arrived at a village where he found an owner who was willing to let him rest in a shack for the night. In the middle of the night, David awoke to a terrifying scream. Out of curiosity, he sprang from his bed and was about to open the door when he remembered his boss’ second piece of advice. David decided to ignore the screams and returned to bed.

In the morning, the owner asked David whether he had heard the screams that night. To that, David confirmed that he did but also added that he did not go outside to see what had happened. The owner remarked that he was the first visitor who had stayed overnight and to leave the village alive. The owner further revealed that there was actually a lunatic neighbour who would scream at night to attract visitors’ attention. When the guests came out of their rooms, he would slaughter them and buried their bodies in the backyard.

Horrified, David continued his journey as he was anxious to meet his wife. After many days of walking, he finally saw his house. It was night time and he was very tired from the long journey. But the sight of his old house lit him up. He was about to knock on the door when he saw light glowing from the window. From the window, he saw the back of his wife who was sitting in front of the fireplace. Beside her was a young man. She was gently caressing his hair.

David flew into a rage and assumed on the spot that his wife had betrayed him. He wanted to confront the couple and kill them once and for all. But he suddenly remembered his boss’ last piece of advice. Taking a deep breath, he decided to sleep outside the house and calm down before making a decision.

The next morning, he managed to calm down. He decided not to kill his wife and the young man. Instead, he wanted to tell his wife how much he had loved her and how he had remained faithful to her through the years. After doing that, he would fade into the sunset and returned to work for his boss again.

With a heavy heart, David knocked on the door. His wife opened the door and was so elated to see his husband. But with tears in his eyes, David said,

“Why did you betray me? I had remained faithful to you and worked hard for twenty years. But yesterday night, I saw a young man caressing your hair in front of the fireplace.”

Upon hearing this, the wife explained that the young man was their son. He was conceived the night before David left for his job. Rejoiced, David asked for forgiveness and the family was reunited at last. To celebrate the joyous occasion, David took out the biggest loaf of bread to share with his family. After slicing open the bread, they were shocked to find gold coins pouring out! The boss had returned David all his salaries with interest!

Morale of the story

There are different interpretations to this story but I will share my point of view. If readers think carefully about it, David will receive his salaries regardless of his choice. However, if he had chosen the first option, he may not live to spend a single cent of it.

In life, we are often tempted to take short cuts in the pursuit of success. However, financial freedom is not an end but a journey. I have come across cases of people winning a windfall only to lose them all and landed in a worse financial state than before. Like David, most of us are not prepared or ready to handle huge sum of money.

The second lesson is not to be too curious and give in to various temptations. Through the years, there were various exotic alternative investment schemes. Most of them are too good to be true. Such schemes mainly preyed on investors’ curiosity and desire for higher returns.

Last but not least, it is important not to make an investment decision when you are emotional. Most often than not, such impulse actions usually lead to regrets because they are not based on logically thinking. When the stock market crash or surge, back off and take a few days to calm down. Avoid having a FOMO (Fear of Missing Out) mentality. At the end of the day, you will surely find the pot of gold at the end of the rainbow.

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