Flickr image "These old people were having a nice afternoon too" by Laura Mary

I was looking through my old posts a year back and realise I had written this post about setting goals and targets for fivecentstencents.  The plans for 2009 were interesting. I managed to meet some of the goals, but other fell by the wayside as I continued on my journey towards financial freedom.

I’ve managed to write my second ebook Road Map to Financial Freedom that is for sale. To be honest, I’ve managed to sell about all of 3 copies and that includes one bought by my brother!

Making Money from Selling ebooks is Not That Straightforward

So there goes the plan to be the next Napolean Hill or Robert Kiyosaki. However, I did learn a lot from the whole exercise of writing and publishing my own ebook.  I learnt that it’s not that easy to be successful in publishing and selling your ebook but I had to try to understand why it worked (or not).

The other thing I learnt was from that experience is that my employment income will continue to be the main contributor of savings. Passive income will continue to come in drips and draps and is helpful but will not fund my retirement now if I needed it. Instead, what it has done is to expand my horizons to think about financial freedom in different forms.

A Different Concept of “Retirement”

Increasingly, I am starting to see financial freedom as rethinking this whole concept of “retirement” and it also involves lifestyle design. I attended a short conversational Thai language course and realised that by accessing another language, I will be opening up the potential to retire in another country.

CPF Life and your own retirement savings will only get you so far if you intend to stop pursuing the rat race of working for a living. Thus, one way to do what many of the foreigners working in Singapore have done is to make money in Singapore but spend their retirement years back in their (lower cost) home countries.

The availability of cheap air links between Singapore and ASEAN means that considering retiring (when the children are grown up and have their own lives/homes) in our neighbouring countries. Possibilities are Malaysia, Thailand mainly because their infrastructure is developed and learning Bahasa Malaysia or Thai are avenues to access these countries.

Exploring New Frontiers

I will be exploring how I can perhaps equip myself with sufficient Thai language skills and checking out possible locations to retire to when my daughter hits 25 years of age. That gives me 20+ years to prepare myself to transit into a different lifestyle from working a 8.30 am to 6.00 pm job and related living expenses in Singapore.

By the time I hit CPF withdrawal age, I won’t have too much money to draw on so my retirement savings would have to stretch long through being in a lower cost country where land is relatively more plentiful and the cost of living is not as punishing as Singapore Inc is.

In addition, I can consider monetising my home (i.e. renting it out or selling it) and staying in the lower cost country.

The more I put my mind towards thinking and writing about financial freedom, the more possibilities start opening up.

It is indeed true that one needs to be open to new ideas, perspectives and thoughts about issues to break through our conventional thinking and to arrive a out of the box solutions.

In 25 years’ time, Singaporeans may be a minority in our own country. Instead of waiting around for the inevitable to hit, I might as well transplant myself to another country that is more amenable and is less of a city. I will take Singapore Inc as what it is, a place to make money and saving this for my eventual relocation out during the time when I’m in my 60s or 70s.

Have you thought about your possibilities in financial freedom?

Be well and prosper.

Flickr image Forest primeval by bibliona

I attended a Thai language workshop that my organisation offers as part of the self-development training that staff can apply for and realised that personal growth comes from trying new things all the time.

Personal growth by itself is rewarding. You feel that you gain mastery over a skill, ability or technique and you are also exposed to a new world, culture and reality that makes your life that little bit more interesting.

In today’s globalised world, personal growth also helps you move nearer to your goal of being financially free because you gain skills and abilities that if matched with the right market who demands it, you can achieve a new source of income or alternative second career that could be your ticket to financial freedom.

Planning Your Personal Growth

Financial freedom comes when our lifestyle expenses is met by passive income from investments e.g. rental from property, interest, dividends etc. Many of us can build up our investible capital only through savings from employment income which will remain as the key contributor during our productive years.

Planning projects for personal growth increases your abilities and skills and life-long learning is about about life-long earning!

I count myself fortunate that my current job allows me to be engaged and to build up new skills and abilities. I manage direct reports, network with my peers and also explore new tools, technologies and frameworks to help me be a better internal auditor.

But the skills I’ve picked up can also prepare me for a second career as a paid Director on a listed company and an audit committee member. I believe this is one personal growth area to explore that involves my day-to-day activities in supporting the work of my organsation’s audit committee. Thus, I am gaining the experience and skills in providing secretariat support and executing the initiatives driven by my audit committee and CEO.

Grow Tangentially

My growth in internal audit and audit related work is a direct growth area. Many times, we forget that we also need to grow tangentially, i.e. to grow into areas that is not directly related to our day to day work.

Me taking up a language class provided by my organisation allows me to learn conversational Thai. It is helpful in accessing the culture and perhaps even consider Thailand to be a retirement home when Singapore population hits 6.5m under the current Government. In the future, we may not be able to afford to retire in a global City that Singapore aspires to be.

I know of a trainer who is based in the region, i.e. he has bought property in Thailand and plans to retire there eventually. In the era of budget airlines and skype, that is starting to be a real possibility to be considered in my lifetime.

Your Personal Growth Paths

Some of my personal growth areas looking back are in the areas of information technology security and audit, blog monetisation, computer assisted audit tools, fathering 101 as well as public speaking and communication.

Going forward, my new growth areas are building up my personal and professional social networks, languages (Thai, Chinese, Japanese) fathering 201, fraud risk management as well as health and fitness.

Each one of us has different strengths, weaknesses and are presented by the world with threats counterbalanced by opportunities.

What will be your personal growth paths towards financial freedom for 2010?

Share with Panzer in the comments section.

Be well and prosper.

Flickr image "Alexandra" by Max_Crowe

This post arises from the gentle prodding of La Papillion (aka Bullythebear) on the state of my personal finance and financial freedom blog posts of late. He commented that I seemed to be busy and the frequency of my posts had gone down.

The reasons for me posting less are several. The most obvious one is that some of my spare time is spent looking after my daughter at home as well as handling a couple of admininstrative issues relating to buying my new place.

Another is that I’ve started to think and reflect more about what it means to be financially free and how I’m starting to fundamentally relook at whether investments and a superior rate of return is the way to achieve financial freedom or to build up my income generating skills and abilities to get the maximum salary and bonuses in my career to build up investible capital.

Developing Lenses and Frameworks

I’ve attended a three day workshop on strategy and from my discussion with the trainer, I’ve realised that the models and frameworks to review and develop strategy really are lens in which we perceive the world around us.

The conceptual frameworks and models allow us to slice and dice the issues and concerns of what’s happening around and within organisations  so as to come to a common way of looking at things.

The journey towards financial freedom is also a strategy encompassing the following formula or framework:

Financial freedom = passive income > living expenses.

And the way we achieve financial freedom is from:

• Living within our means
• Saving and investing
• Growing our means
• Protecting our means

Growing Our Means

My salary from being an employee will still be the main driver of savings for the next 20 years of my working life. Using my financial freedom framework, I realise that continuing to focus on building up my skills and abilities to do my current job better and bringing more value to the organisation by doing more with less (i.e. planning for more audit projects in the financial year), leveraging on technology (computer assisted audit tools and techniques) so that my small audit team can carry out audit procedures on more transactions in lesser time and obtain greater assurance is the way to go.

Developing Skills and Abilities by Doing

One of the things I’ll be embarking on this year is to conduct training courses for my fellow colleagues in the areas related to what I’m doing in internal audit. This is a win-win as the organisation gains a training programme to help gear up its staff in internal controls and fraud knowledge whilst I build up my skills in public speaking, training and conducting workshops.

This is over and above my existing audit workplan workload and thus I’ll have to squeeze out more efficiencies from using computer assisted audit tools and techniques to complete the audit assignments and also deliver on the training.

I’m amazed at what people can do if they put their minds to it. One of the bloggers I follow is internet entrepreneur Danny Choo. I enjoy reading his Tokyo photo walk series where he writes about life and images of Tokyo while sharing his own life stories on his entreneurship journey.

He drives himself pretty hard and work is play and play is work. Thus, he really spends most of his time working unlike salaryman who clock in at 8.30 am to 6.00 p.m.  Increasingly, I realise if your work is a passion, then it doesn’t seem like work.

While I do go home after office hours and am fortunate that my organisation is able to allow me to achieve some form of work-life balance. I’ll still jot down ideas relating to work issues and allow my brain to just think about new things I can do in my workplace.

My previous job was the reverse in that I wasn’t engaged in the organisation. It was partly my fault but also the fault of the organisation. A working relationship between organisation and employee is a two-way street.

It’s interesting to note in today’s Straits Times article “Education for Productivity” that the Government is now advocating students building up a portfolio of skills and abilities and to adopt a lifelong approach to learning, i.e. learning new skills and abilities never stops throughout one’s adult life.

A Path Less Trodden

I count myself fortunate that my interests and opportunity coincide to lead me to where I am today. Someone who is able to straddle the world of internal audit and controls as well as the world of IT from both the enterprise and personal perspectives. I didn’t start out this way but looking back, I can connect the dots with the benefit of hindsight and more grey hairs.

Have you tried connecting the dots by reflecting on the significant milestones and choices in your own life?

How have they led you nearer or further away from financial freedom?

Be well and prosper.

Flickr image "beautiful stream" by holl_and

My blog monetisation efforts has been one of my greatest achievements in moving myself towards financial freedom. I started out serious blogging to see if I could establish an income stream that would allow me to quit my day job and to retire without working (as what many of those make money online scams and advertisements promise!)

Can Quit Your Day Job?

But the reality was that it’s quite difficult to make enough for you to quit your day job. Thus, my explorations into blog monetisation has been coming to 2 years and I am able to generate S$100 to $350 per month with minimal effort after the first six months. Nowadays, my main blog that brings in real income is fairly passive, I receive updates on the information from a forummer I know whom I give a share of the advertising revenue.

Some of you may scoff at the amount, but I am thinking ahead that if I can sustain this type of income stream with the level of effort that I’m already putting in, this could be one of my personal CPF Life type of scheme.

Your Personal CPF Life Income Stream

For those of you who may not know, CPF Life is the compulsory life annuity that will kick in when you hit the retirement age of 62 (now) or 67 (in the future). It pays you an income for life and is funded by locking away a portion of your CPF minimum sum amount.

Planning ahead means that I am also looking around and thinking of how to create such income streams that are self-sustaining and require minimal effort. In addition, I realise that I need to continually invest in myself in terms of skills, knowledge and relevant experience that can be monetised when my career transits from an 8-5.30 job to a freelance/self-employed basis.

On that note, I’ve volunteered to develop and deliver in-house training to my fellow colleagues on top of my regular work assignments. This initiative helps me to boost up my visibility within the organisation as well as to hone and develop my training skills. I intend to build up this skill set and the networking so that it could be a viable second career when my daughter becomes independent and can fend for herself.

It is these series of small steps in changing habits that result in more enduring change. My blog monetisation started out as a small experiment which I intend to continue so long as I have breath and it pays for itself and more. My experiment in eating healthily for breakfasts (rolled oats and raisins) for coming to two years have given me a figure that I once lost for many years but only regained from healthy eating and moderate exercise.

My investment returns for 2009 were the result of efforts since 2003 to invest in the Singapore stock market and to learn until I was competent enough to make 8%+ returns way above any “risk-free” returns on 1-2% on fixed deposits or money market instruments.

Take small but concrete steps.

Do, learn and grow.

Exploring Possibilities

The more I travel along this journey towards financial freedom, the more I realise it is about being open to possibilities and taking a plunge to do small experiments to see if an idea can work out or not in bringing one closer to financial freedom.

What are you thinking of during this Lunar New Year period that will bring you closer to financial freedom?

Be well and prosper.

All the riches on this earth cannot keep us around if death comes for us.

I was reading some forum posts in Channelnewsasia forum and one forummer mentioned that it was ironic that the richest man in Singapore who could well support his retirement if he lived until 100 did not last past 85. While it was estimated that more Singaporeans would live beyond 85 and hence the CPF Life or compulsory annuity (with non-guaranteed payouts if CPF life fund becomes insolvent) was pushed down our throats largely using actuarial statistics.

The lesson to learn is that no matter how rich or poor one is, we all have only 1440 minutes in each day to do whatever we want in our lives. All us have start out with 1440 minutes, nothing more, nothing less.

As you walk along your journey towards financial freedom. How would you allocate your time and effort towards balancing your goals of living within your means, saving and investing, growing and protecting your means whilst still enjoying life as an experience that can only be savoured once?

I don’t have the answer but I know I’ll live a little bit more each day by immersing myself in work while at work, with family after work and to carve out a little bit of “me-time” to unwind and destress.

Be well and prosper.

I’ve just finished reading Seth Godin’s “All Marketers Are Liars” and got some interesting insights about marketing in today’s context.

Huh? Marketing? Has Panzer lost his marbles?

What does marketing have to do with financial freedom?

Read on and let Panzer explain the relevance of “All Marketers Are Liars” to you.One of the hobbies that I enjoy doing is to read. I read fiction as well as non-fiction and as I approach closer to age 40 and start to gain more white hairs by the side of my closely cropped hair, I realise that what my Junior College tutor said was true.

“How do you gain knowledge without reading”

What my tutor was telling me then as a wee lad of 18 was that reading was the path towards enlightening yourself and making sure your little grey cells are fed.

The last year or so has seen me again devouring both fiction and non-fiction alike as my daughter is now approaching two-years old and hence I have (slightly!) more time to read in the evenings and on the commute to/from work.

All Marketers are Liars

What Seth Godin postulates in the book is mainly that in order to be successful in marketing, the marketer has to create authentic, consistent and compelling stories of the product or service in order to be effective.

Of course, his book goes into the whys and gives some examples of why people are lying to themselves in believing the stories of how the good or service satisfies what they want (beyond what they need).

Your Own Authentic Story

In your journey towards financial freedom, you need to also weave in your authentic story. The story behind why are you taking the day to day actions of living within your means, saving and investing as well as growing and protecting your means.

There was a time when I emerged the Division champion in Table-Topics contest in toastmasters locally. Part of the reason why I drove myself very hard and became the champion through club, area and finally division was because an ex-boss of mine criticised my involvement in toastmasters and said that it would amount to nothing.

I took her criticism in stride and it ignited the passion in me to excel in table-topics after intense preparation, attending almost 2-3 toastmasters meetings a week in the evenings and over weekends.

But all that effort paid off because I emerged the champion in my division.

I did it because I created my own authentic story that propelled myself to the heights of this particular task.

I wanted to tell my story of how I overcame disparaging remarks to become better, stronger and more effective in speaking off-the-cuff in a competitive setting.

As you progress today towards financial freedom, what story are you telling yourself inwardly and outwardly?

Is your self-talk that of negativity and pessimism or is it optimism tempered with reality and bolstered with a dose of “YES I CAN” spirit?

Your ability to lift your head high and know that your actions in living within your means and saving and investing is to make you financially stronger and to be better equipped to face the future is your own story.

Your ability to enjoy each day without an over-dependence on material consumption is your own story.

Your ability to continue this journey daily, even overcoming setbacks, is your own story.

Choose to tell your own authentic story.

The story of how you moved towards financial freedom.

Be well and prosper.

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.

It has been an exciting year 2009 in terms of my journey towards financial freedom.

Returns for 2009

I have managed to achieve the highest returns on my investible liquid assets mainly in equities  (stocks/shares) since I started tracking my performance in 2003 and was fortunate to be able to ride out some of the recovery in the STI from March 2009 to December 2009.

I also learnt the important lesson of achieving balance in life and to enjoy the journey of financial freedom rather than to be overly fixated by the end result.

Life is unpredictable

Over the New Year holiday period, the report of a 44 year-old CEO of a billionnaire dollar company hit the news when it appeared that his death was caused by cosmetic surgery – liposuction.

Stories like this and my own encounters with NSmen and regulars who passed away during NSF and NS (reservist) times remind me of the fragility of life and not to narrowly focus on the end result of achieving financial freedom and lose sight of enjoying the process.

“Your Money or Your Life” by Vicki Robin and Joe Dominguez echoes the same message and the key question raised by the authors is whether we are making a living or more akin to making a dying in our quest for money, money and more money.

Goals for 2010

Given the past events of 2009, I look forward towards 2010 with hope and anticipation. I realise that I will continue striving towards my journey of being financially free before age 45 and I will allow myself to enjoy the process and avoid being overly obsessed with the ends and neglect being alive to the means.

Thus my goals for 2010 will reflect the different aspects of my life beyond only financial targets.

Goal #1: Financial – Save 15% of income

This goal spurs me to continue to focus on my earning and spending and to save 15% in cash above my insurance and CPF contributions. This will be an interesting goal as I’ll be starting a mortgage a few months down the road for my new home.

Thus, the challenge is to fund my new home and yet save some cash on a rainy day while supporting 4 mouths (myself, my spouse, daughter and maid).

Goal #2: Health – Exercise 2 x a week, eat healthily and manage stress

We know that wealth without health is meaningless. Health requires effort. So far, controlling my diet is getting easier as I generally eat healthy breakfasts and home cooked meals except for lunch. I will continue with the diet part but know that the exercise part is lacking. I’ll try to swim more to build up my cardio-vascular fitness and some light jogging.

Managing stress is equally important. Much of this focusses on anger management and to “go with the flow” more about life issues. Recently, I found myself getting slightly better but can do more to improve this area.

Goal #3: Career – Build Up Experience and Team

My career will be the biggest contributor of income for the next 20-30 years. Thus, it’s important that I continue to build relevant skills and experience in my chosen career in internal audit. I am fortunate to work with a good team and I’ll continue to develop my people so that as a team we become more effective, efficient and innovative.

Goal #4: Family

My daughter is growing up fast. In a blink of an eye, she’s now 22 months old, running around, full of joy, life and energy! She tires me out so much during weekends that I find working in the office less tiring than looking after her.

I’ll continue to enjoy weekends and evenings with family and to build strong relationships with my spouse and daughter. I realise that no matter what happens to me, I will have a legacy through my daughter and that soothes me much when the going gets tough.

The goals I’ve set are not the traditional new year’s resolutions to be made and then forgotten as the year progresses. I’ll review them from time to time to remind myself to stay true to the direction I want my life to take.

What are your goals, financial or otherwise, in your own life?

Share with Panzer in the comments section.

Be well and prosper.

Living within your means

Ever since Panzer started his Excel expenses worksheet. He has recorded to around 98% accuracy most of his expenditures. His approach has been to take a cash flow approach, i.e. he records when cash goes out rather when expenses are accrued for simplicity sake and also to give a gauge of how much cash (life force) flows in and out of his life.

The net result is that he has managed to continue to live within his means by ensuring that on most months i.e. 11 out of 12 he will have cash savings on top of CPF contributions.

Panzer hasn’t drastically changed his lifestyle and continues to focus on meeting needs first and satisfying wants later. His approach in spending 10%-20% of windfall gains or passive income on small luxuries gives him the impetus to continue on this path of living within his means.

Saving and investing

Arising from his spending below income, Panzer was able to generally able to save some money each month and slowly build up his investible capital. He was fortunate to realise some small losses only and was able to free up his capital during the run-up since March 2009 to date and manage to hit 10% return on investible capital. This refers to realised capital gains / losses from share trading, dividends, interest and blogging income.

He was fortunate because he managed to catch some of the upward correction in Singapore stock market to do so. Next year would be more challenging as he has liquidated a fair portion of his portion in anticipation of purchasing of property for residential use.

Panzer’s returns of 10% were contributed by realised capital gains (55%), dividends (34%), interest (1%) and blogging (10%). This showed him how dismal interest rates have been resulting in poor returns if he had not actively managed or deployed his capital and let his money rot in fixed deposits.

It was interesting to see blogging income contributing to 10% of total investment income though technically blogging requires slightly more effort though it gets easier over time.

Growing your means

Panzer’s career continues in his practice of internal audit and it has allowed him to develop a decent career. He believes he can continue in this field for the next 25-30 years and build up his retirement savings as CPF would continue mainly to be locked up in home equity.

He learnt now more to manage people in his career and going forward, his managerial skills would come in useful on top of his skills as a Certified Internal Auditor, Certified Public Accountant (non-practising).

Protecting your means

Panzer has not done anything significant as he is already covered by whole life policies, investment linked policy (which he knows is not the best solution and intends to let go before mortality charges get too high) as well as hospitalisation and surgical insurance.

Health is the next big focus as Panzer realises he must continue to spend time exercising, eating healthily and managing stress to keep himself in good condition to last the next 30 years of working life.

Personal Developments

Panzer’s daughter is coming to 22 months and she is teaching Panzer each day about being alive, being curious about the world and having fun no matter what.

He realises that family is critical to having a happy life and would continue to remember not to neglect family just to achieve financial freedom as it would have little meaning without family.

Friends of Panzer have also helped him let off steam and counselled him when he ran into challenges in life. He will continue to develop the close bonds with his ex-colleagues or “gang” as they are a source of inspiration and support throughout life.

The key reflection that Panzer has for 2010 after looking back at 2009 is to be ready for CHANGE.

Change is inevitable but how we react to it is the experience we gain from managing the challenges of life.

How was your 2009 and what are your thoughts for 2010?

Be well and prosper.