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Dear friends

I have a ticket to give away for Investfair 2008 that is organised by Shareinvestor.com.

Please leave a comment with your email address and I will conduct a draw by 9 am on 12 August 2008 (Tuesday) and notify the winner via my blog and email.

Wishing you all the best.

Be well and prosper.

Image by Montrasio International via Flickr

Reading blogs, websites and news articles about personal finance is a great way to learn and grow in the ways of being financially free. Much of why we read such material is that many authors share their own personal stories on how they managed to achieve their own personal finance dreams.

Your family tree: a history in personal finance

One of the most under-rated sources is our own families. Your parents, grand-parents, uncles and aunts are actually great sources of lessons for financial freedom. Each one of them has gone through more life than you have and are able to share their own life experiences with you regarding money, living and balancing our needs and wants.

I spent two days with my mother as I was on leave helping to look after my 5 month old daughter and gained some interesting insights in a rare mother-son bonding session. Like many sons of mothers, I became somewhat independent since 19 when I was drafted into the Singapore Armed Forces as a conscript where I had to learn to live on my own. Since then, while I still stayed with my parents, I had my own life as I pursued my university education and started working. I moved out after getting married and having my own place.

Mother’s story

Hence, mother-son relationship while being all right was not that close since I had my own life to live. As my mother became my daughter’s grand-mother, it brought us closer as now we have someone in common to care for. As she was helping me with my daughter early in the week, she shared more of her life which was a mystery to me because all along she was “mother” and not someone who had her own dreams and aspirations as well as a life growing up in difficult circumstances.

I’ve talked about how our parents are an important influence on our quest for financial freedom as many of our attitudes, beliefs and approaches towards living within our means, saving and investing, growing our means and protecting our means comes from observing the behaviour of those who we see day-in-day-out. My mother was one such person whose influence has been immeasurable. Her own hard life was a mini-riches-to-rags-to-riches tale.

My maternal grandfather was well-to-do early in his adult life as he had a thriving liquor distribution business. My mother recalls how the family used to be driven around in a car, a luxury in those days of the post-war years. Gong gong was, as typical in those days, into wine, women and song. Thus, he frequently nightclubs and soon found himself with 3 wives. Such an extragavant lifestyle coupled with some investments turned sour soon brought down his fortune as he had to become a cook for British Army officers to make ends meet.

Mother related how from staying in a colonial bungalow, the family shifted to a kampong where she lived amongst people of various race, language and religion. It was the taste of the good life before having to eke out a more meagre existence at age 11 that moulded many of mother’s down to earth attitudes towards frugality, saving and investing and living way below your means.

Because mother saw first-hand how wealth could easily be frittered away, she became frugality personified. She wouldn’t spend much on herself but would pay for the family expenses beyond her share because she loved her children. Now that she has happily retired for the last 10 years, she is financially free partly because she was in the civil service on the pension scheme, but more importantly, she did the important things like living below her means and paying off debt for the family home. She also invested with my father in an investment property that is sitting on some capital gains while yielding decent rental income to supplement her pension.

Unlike many asian parents, she fully funds her own retirement without having to rely on her three children. She takes good care of her health and goes for morning exercises with my father while her healthcare costs are borne by the State.

Her story inspires me because she is a living testimony that the principles of living below your means, savings and investing and in not keeping up with the neighbours leads us towards the path of financial freedom. Some of her cohort who retired under similar circumstances like her still have to continue to work part-time to supplement their pensions because they didn’t scale back their lifestyle when they retired. Some continued to go for regular overseas trips, spas and luxury treatments and thus have to continue to work to fund such a retirement lifestyle.

What’s your family story?

This weekend marks national day as well as a weekend to catch up with family, loved ones and friends. What is your family’s personal finance story? What can you learn from your own parents, uncles and aunts approach towards spending vs. savings, paying off debt and delaying gratification?

Be well and prosper.

It’s Friday again and Panzer feels like a zombie because he has not gotten uninterrupted sleep since his daughter still wakes up a few times a night for her feeds.

Let’s see what Panzer’s sleep-deprived mind has been reading to help him move towards financial freedom.

In these days of 7.5% inflation in Singapore and of inflationary pressures the world over, Get Rich Slowly shares what is happening in the US with “Hidden Price Increases at the Grocery Store“. They shrink the packaging and give you less value for your dollar. The incredible shrinking chicken rice sound familiar?

The Simple Dollar does a personal finance book review on “Good Debt, Bad Debt” by John Hanson. Reading personal finance books is one of the important ways to gain insights into personal finance. When you read in depth and widely, you get a good perspective on how people approach personal finance in their lives. He also shares about the single biggest money mistake he has ever made in his youth. What money mistakes have you made in your life? My own list makes me blush e.g. losing $x,xxx on realised losses on shares during subprime last year showing my “expertise” in stock picks.

Lazy Man and Money does a stock check on his personal net worth as well as other life goals for 2008. Do you set goals for yourself towards financial freedom, health and other aspects? Besides personal finance, I enjoy personal development or self-improvement books to basically learn more about being more effective as a person.

The Digerati Life shares “Basic Business Advice from an Accidental Entrepreneur” on her efforts in Silicon Valley. One of the things I learnt from reading personal finance bloggers is that they tend to be entrepreneurial in thinking. While many still have their day jobs, some have grown their blog monetisation efforts into full-time businesses. I aspire to a lifestyle where blogging is part of my life and provides me with the financial means to do some serious lifestyle design changes like what Tim Ferriss expounds in his book, “The Four Hour Workweek”.

Jeflin’s Investment Blog shares a rather sad tale of an American home owner killing herself because her home was about to be foreclosed by the bank. While committing suicide over financial issues is extreme, it highlights how important one’s home can be and if you do not have that roof over your head, life can seem hopeless and meaningless.

The Wise Bread asks a thought-provoking question, “Should Your Standard of Living Rise”? His article addresses one of the most fundamental tenets of personal finance - how to live within your means. In a growing economy, income levels can go up with commensurate increases in standard of living. In Singapore the upgrading frenzy fueled by rising property prices allowed many to live better while jobs were plentiful and the economy boomed. During the 1997 Asian crisis and even earlier during the 1985-86 recession, the economy stalled for and retrenchments and downgrading happened. I learnt valuable lessons during those periods and it has helped shaped why I push myself hard to live within my monthly paycheck by enjoying life without spending more to achieve it.

To wrap up, I leave you with Randy Pausch’s video on his last lecture. For those who do not know who Randy Pausch is, he is a computer science professor in Carnegie Mellon University and gave a inspiring lecture about “Really Achieving Your Childhood Dreams” after being diagnosed with terminal pancreatic cancer. He passed away at the age of 47 on 25 July 2008 leaving behind a wife and three children.

While his message is not related directly to personal finance, he reminds us to pursue our dreams and really life is about people and relationships. Achieving financial freedom allows us more time to touch more lives and to live more fulfilled relationships. When you’re scrambling to earn a living and feel pressurised by debts, mortgages and making a living, it’s hard to really live life.

Have a good weekend.

Be well and prosper.

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