Flickr image "The Long and Winding Road" by bbnick42
I have taken a longer road in my journey towards financial freedom. And strangely enough, I feel less burdened that I was at that fork in the road deciding whether to take the shorter path towards financial freedom or to do something that would be out of the question if I were to follow my plans rigidly without thinking about considerations such as family and quality of life.
The decision that I have taken is basically to sell my current place (Executive Condo) and to buy a new older condo at a location closer to town but has good amenities and a relatively quieter environment that my place.
Upgrade your home
Upgrading your home costs money. Basically, the proceeds from the sale of my existing unit would help but not cover the entire cost of the newer place I am getting. However, I count myself fortunate that I just need to top-up somewhat more and get a bigger, albeit older condo but with a location that is closer to my in-laws and to parks and amenities.
Effectively, I am re-investing my liquid assets into illiquid asset (i.e. my home) and building up more home equity. But the issue is that one cannot monetise one’s home no matter how much equity it builds up unless one downgrades or finds alternative accomodation through renting or staying with parents/in-laws etc.
By doing so, I’ll have less passive income since my investible net worth is now put into the cost of my new home. That means I’ll have to take another loan that I should be able to pay off comfortably in less than 10 years since my current executive condo is fully paid-up.
Thinking back, I was worried intially that this would set my plans of growing my investible savings and passive income back for a few years. And it has. But the strange thing is that I realise I cannot always rely on passive income as the main pillar of strength and financial security.
The more white hairs start to grow among my black strands of hair, the more I realise family happiness, health and the fact that with or without financial freedom, I would want to work so that I can productively occupy my time and have a balanced work/life.
Work doesn’t need you but you need work!
Having taken annual leave to spend time with my family allowed me to experience taking care of my daughter the whole day. I don’t think I can survive long 24×7 being a nanny as my daughter tires me out even after an evening with her after work!
Going to work is actually in some ways less physically tiring than looking after my daughter although I use my brain a lot more. 
I’ve come to realise that the reality for me is that I will work until I’m 62 and God-willing, post-62 if my health permits me.
Thus, it’s more important to have a balanced life where health and family is well-integrated into work where one is able to carry on this journey in life in a more sustainable manner.
I’m not giving up my dream of being financially free. But I realise it’s not a race to cheong to financial freedom and find one without meaning and balance in life.
I’d rather arrive at financial freedom, having enjoyed the journey and gained more than just $$$ of passive income but having never truly experienced life for its flavours, colours, passions and emotions.
How is your own financial freedom journey working out?
Be well and prosper.
Rex says:
HiPanzer
I am a avid fan of your blog. It seems from your latest post that you have conceded that early retirement or achievement of financial freedom is impossible,given the commitments such as children…
panzer says:
Hi Rex
Actually, financial freedom is possible even with children. The question is what are you willing to give up for it?
In my case, achieving financial freedom early or before 50 would entail having both spouses work (currently my spouse works part-time) and to give up having a car, upgrading to a bigger home etc. I could have chosen not to get a car and take public transport plus taxis and put up with the downsides of public transport.
Staying put in my current place is also possible but I CHOSE to upgrade and ACCEPT the trade-off of deferring (but not giving up) on achieving financial freedom.
Ultimately, each one of us chooses how to live our lives, knowing the consequences of our choices.
The paradoxical issue is that the closer I come to achieving financial freedom from a purely passive income perspective, the more my perspective changes on what ultimately makes me (and my family) happy.
It boils down back to again WHY do you want to achieve financial freedom. If you can already be happy even before you reach the stage where passive income exceeds lifestyle expenses, then achieving financial freedom is the icing but you have gotten your cake and am enjoying it.
Be well and prosper.
Parka says:
Achieving financial freedom through working-saving-investing just takes way too long. Starting a business is just a more viable.
.-= Parka´s last blog ..It’s so easy to start a web company if you know programming =-.
musicwhiz says:
Hi Panzer,
Sorry, let me try to understand – you basically “upgraded” by selling your current exec condo and buying a new condo, right? So the proceeds from selling your current place will be used to offset your new place, and you would have to take up a new mortgage loan. So how many years of mortgage did you take? And assuming you got a very good price for your exec condo, this means you will have “spare cash” to act as a buffer for the installments, and also as a cushion (emergency funds).
That’s actually not such a bad thing, in my perspective. Of course, I’ll need to know the exact numbers to arrive at a better conclusion, but I am NOT asking you for details as it is rather intrusive. Suffice to say that if you did your sums right, things should be pretty comfy (plus you get a new house to stay in!).
All the best! I am happy for you that you managed to upgrade.
Cheers,
Musicwhiz
.-= musicwhiz´s last blog ..Investment Sins Part 7 – Gluttony =-.
Panzer says:
Hi Musicwhiz
I am selling my EC and buying another condo (older) that is slightly bigger and more central. Would need to take a mortgage loan to fund the purchase but as I’m selling my EC, the proceeds will come in fairly soon after the purchase and I’ll need to carry only a “low” amount of mortgage.
Yes, I would need to borrow to fund about 70% of the next condo but once the proceeds (cash and cpf) are received from sale of EC, I should be able to pare down the mortgage to about 20% of purchase price of new condo. That gives me some spare cash to play around.
My EC sales proceeds gives me about 85% of purchase price of the next condo. Hence, I just top up 15% to stay at a bigger, more central but slightly older condo.
If you look at it, I am just putting more money into home equity, but due to timing difference between sales proceeds and purchase I use mortgage to fund but am able to then decide how much cash/debt I want to carry.
Be well and prosper.
.-= Panzer´s last blog ..HLF Golden 55 Fixed Deposits Promotion =-.
Eric says:
Hi Panzer, I’m in an almost similar situation as you – sold my EC after a buying a slightly more expensive freehold property. When the proceeds of the sale come in, I have to decide between paying off the new loan partially, or doing something with the money.
Give the relatively cheap cost of the mortgage loan (<2%), will you consider investing the sum rather than paying it off immediately?
panzer says:
Hi Eric
I intend to pay off about half the loan amount that I’ll be taking to fund the purchase of the new home. This will still give me some cash to consider investing if I can “beat” 2% of the mortgage costs.
I’ll be taking up Stanchart’s Mortgage One as it is fairly flexible with partial redemptions and lock-in period but its interest is slightly higher than the concessionary rates offered by other banks. Also they have the interest offset which is useful while I’m in-between punting opportunities to beat the 2% return.
Of course, I know that paying off your mortgage loan saves you interest costs guaranteed but punting can result in potential capital losses. Thus, I’ll go in with eyes open and aim to repay off the remainder of the loan within next 5 years (or less!).
I used to be more conservative and would have previously paid off most of the loan with the proceeds, but now I do see some possible opportunities for punts to get better than 2% returns.
My approach may not be suitable for others, individual mileage may vary.
Wishing you all the best for your new freehold property.
Be well and prosper.