It is OGIM (Oh God It’s Monday) again!
You somehow manage to drag yourself out of bed and leave home in a hurry. You squeeze into an overcrowded train, praying that the MRT lines won’t have Monday blues like you. Or you drive turtle speed on the highway that takes forever to reach the office.
You sit in front of the computer with your mind completely blank, wondering how to survive that sales meeting coming up next. You suddenly recall today is the deadline for a big project. Yet a demanding customer chooses to call you the first thing in the morning to lodge a complaint. Your nightmare boss says he needs to see you immediately …
Sacrificing happiness for comfort
Whoischick.com points out the fact that we can choose to be in two areas in our everyday life: the comfort zone or discomfort zone.
1. Comfort zone: 98% of us are being like everyone else. We live with insecurity, fear and regret. We procrastinate, play it safe, settle for less and lead a dull life. Most of the time we are just surviving or getting by.
2. Discomfort zone: Only 2% of the population are living their dreams. They have chosen happiness and living without limits. They have confidence, dare to explore new things, embrace the unknown and act in spite of fear. They are looking for changes, excitement, abundance and fulfillment. They believe in getting the most out of life.
What about you? Are you living the life you really like? Do you have the guts to live the life you always want?
A comfort zone does not equal to a safe zone
But this is easier said than done.
Everybody wants the freedom to do the things they like. But the moment you stop tolling all day in the office, how do you pay the bills at the end of the month? Who is going to support your family? How can you save for your retirement?
You can choose to stay in your comfort zone. But a comfort zone is not necessarily a safe zone. Company downsizing and retrenchment sometimes have nothing to do with whether you have met your KPIs or sales quota, how much past contributions you have made, or how serious your OGIM symptoms are.
Facing regular restructuring announcements in my corporate life, it was imminent for me to have a contingency plan. My Plan B was buying some good properties that could continuously generate passive income for me. If one day my name was in that batch of employees to let go, my tenants would help to pay my bills.
I also started researching about possible ways to achieve financial freedom. It is not about not having to work at all, but more about the freedom of choosing to do the type of work I enjoy, the liberty to spend my time the way I prefer, etc.
Throughout the years, I have seen many people who try different ways to realize their dream of being financially free. Some work while some flop.
Financial freedom: what don’t work
Some people may claim that they ‘have been there’. However, if their financial freedom is not sustainable, and they eventually go back to where they were, I won’t call that a proven strategy at all. These methods include:
1. Following any get-rich-quick program that guarantees to make you a millionaire but sounds too good to be true.
2. Joining any high risk ponzi investment scheme that promises high return in a short period of time. No such scheme can stand the test of time in our past history.
3. Winning the lottery, striking the jackpot or reaping a windfall at the casino that you will quickly spend or lose them all and go back to square one in no time.
4. Receiving a sudden big inheritance or donation with no prior training in personal financial management or investment. Think the woman who spent her $1 million donation after the horrible accident of her husband, all in barely one year’s time.
Financial freedom: what work
Below are three proven methods to achieve financial freedom that I have found to be sustainable in the long term.
1. Investing in good stocks or good properties that becomes a stable stream of income in terms of dividends or rental return, and promises a sizable capital gain when cashing out one day.
2. Building a solid and sustainable business that offers a reliable source of income in the long term.
3. Having a wealthy spouse who has high earning power or the financial means to support your lifestyle, and is generous to you (note: to you only).
It is good to be able to achieve one of the above. But it is best to attain all of them if you know what I mean!
My thinking process:
1. Stock/ppty – if one is not greedy and be very patient, then this is a no-brainer.
2. Business – this will requires a mindset/circumstances changes as most of us are salary man. Given the opportunities, interest and hard-work, this can be done too.
3. Rich spouse – this one I have to pass. the stake is too high to bet on a good outcome (esp. if he is only generous to me.)
Agree with you that prudent investment in stocks and properties is an easier way to achieve financial freedom. Investing in a sound business needs a good business idea and other contributing factors besides hard work.
For the third option, there is a Scottish proverb that says “Never marry for money. You’ll borrow it cheaper.” Though in reality I don’t think any lady mind marrying a good husband who is well-to-do as well.
I happen to be someone who migrated here also from HK some 40 yrs ago. I have seen several cycles in the Singapore property market. But none was like the current one which needed a lot of
new regulations and restrictions from the government in view of a threatening bubble . The market was like a galloping wild horse since early 2006. The cooling measures are the right moves to prevent the bubble. But one thing really puzzles me is why refinancing is also subject to the same TDSR rules. This restriction leaves the borrowers to the mercy of the existing lending banks who are not ready to re-price their loans, thus making the borrowers pay higher interests and more indebted. Has any body raised this concern to MAS? By helping the bankers to charge higher interest rates does not help to lower the total indebtedness.
You think you can get enough number of people to make an appeal to the government to loosen the TDSR rules for refinancing? After all the loans were already there before such regulations came into effect.
It’s nice to know someone from my hometown! And thanks for your comment.
In February, MAS has already fine-tuned the TDSR rules for owner-occupied borrowers to be exempted from TDSR during refinancing. The transition period ends 30 June 2017. (For details, please read my other blog post at http://propertysoul.com/2014/02/12/how-necessary-is-the-exemption-of-the-tdsr-rules/ ).
MAS reserves the right to add amendments when necessary. However, I don’t foresee any drastic change or lifting of the restrictions which may defeat the original purpose of setting up the TDSR rule.
I was also researching the commercial market end of 2009 and 1H of 2010. The prices were on its way up then. The properties were not really good bargains but could probably make some money after holding for 2 to 3 years. At the end, I decided not to go ahead because the return is not that attractive after considering all the hassles and risks.
I like shophouses too. Oh I mean the hassles and risks specifically for myself because of the commitment I had at that time.
I can tell you shop space and shophouses are much better deals than residential properties.
we can discuss this when we meet at the next seminar.
It’s nice to know someone from my hometown! And thanks for your comment.
In February, MAS has already fine-tuned the TDSR rules for owner-occupied borrowers to be exempted from TDSR during refinancing. The transition period ends 30 June 2017. (For details, please read my other blog post at http://propertysoul.com/2014/02/12/how-necessary-is-the-exemption-of-the-tdsr-rules/ ).
MAS reserves the right to add amendments when necessary. However, I don’t foresee any drastic change or lifting of the restrictions which may defeat the original purpose of setting up the TDSR rule.
Unfortunately. i am among the very few who invested in only commercial properties, especially during the years from 2009 to 2013. So the fine tuning by MAS does not help.
I hold a different view from yours. Commercial shophouses or shop space in shopping malls are my favorite investments (but not offices/industrial properties).
I am interested to know how you concluded that commercials are more risky and not good bargains. Because my experience since 1973 tells the opposite.
Wingping, an old guy from HK
Hi property soul, from your post, it seems like you were once in the rat race but you managed to work on your plan B and eventually succeeded. Can you share with me what keeps you going? I am working on my plan B but I have to admit, it isn’t easy managing my present job (I still need it to pay my bills and sustain my family) while i work on my plan B. I do not know even if plan B will succeed. Can you share with me your success story? What keeps you going despite the odds? Thanks!
I thought I have told all my stories in my new book : )
I am a strong advocate of saving and investing. Cut all the unnecessary expenses and pay off all your bad debts before going for any investment.
I don’t know which plan B you have chosen. But success for property investment requires lots of hard work, discipline, patience and persistence before you can see any result. Many people try to go for a quick fix without doing the leg work and end up losing all the hard earned money from their savings.
My sincere apologies. I just learnt about you from last weekend’s Sunday times article. Thanks for sharing. I will grab a copy of your new book. Thanks.:)
No problem. I am not important. It is more critical that you are aware of all the traps in this industry and practise prudent investment as I have emphasized in the book.
Want to get two tickets for the next seminar on 5th July but no matter how couldn’t get to login even after trying number of times to rest the password/username. Can you reserve two seats for me and I will pay cash on day of the event.
Sorry for the hiccup. No problem, I will reserve two seats for you.
I will help you to solve the login problem separately. For Property Club members, besides the discount for event registration, they can go to resources to read a 19-page bonus chapter of my new book where I shared the stories of all my previous property purchases.
I think the holy grail of financial freedom is having so many passive income. This way you will never worry about your financial needs because everything is taken care of your assets. You will have all the your time in the world and visit all places you dream about. You have your time and money. This is the dream of most people which only few ever achieved.
Yes, you will enjoy your freedom to travel at your leisure and buy things you can’t afford last time. After a year or two, emptiness starts to kick in. You will have to once again find some work you are passionate about. The difference is this time you will do something you really enjoy doing.