The Straits Times article, “Labour Chief Slams DBS,” shows how powerless unions are in Singapore. The benefits of joining a trade union in Singapore are more social than economic. You get to join the NTUC Club and get other benefits but when it comes to protection of your rice bowl, it means close to NOTHING.

Unions will give you more bargaining power to make employers pay you some form of retrenchment benefit but it will not protect you from losing your job as DBS management shows how it is done, “Singapore GLC” style. I once talked to a man who used to be the top man of the 2nd biggest trade union in Singapore. He shared with me the heydays of unions in the late 50s and 60s. But since the Government formed NTUC to effectively control trade unionism, their primary aim of protecting the jobs and terms and conditions for employees basically become ineffectual as Singapore’s laws and regulations actually provide very little real protection as businesses and employers come first in the scheme of things.

It’s more important to take your own steps to form your own little union that takes care of YOUR interests.

How can you do this? By considering how you can pluck money out of thin air through growing your means.

Growing your means
One of the challenges I learnt in my journey towards financial freedom was in coming out of my comfort zone and taking risks and being open about growing my means. If you, like myself, are an employee, you will find that your job is your primary means of income. But does that mean it has to be the only means? This is where “growing your means” is about thinking and trying out different ways to make a higher level of income. Some ways are straightforward. For example, if you are paid on a hourly basis, doing more over-time will help you earn more but you need to balance this against time taken away from your family or personal life. You can also excel in your job and get that promotion and increment. But there are limits to how much you can do as not everyone can get promoted and not everyone can get a good appraisal each year to qualify for merit increments or even basic increments.

So what else can you do?
There are actually plenty of things you can do. The internet has opened up many opportunities for people to get some additional income. It’s simple but it’s not easy. If you enjoy writing and aggregating information about specific niches, you can write a blog and put up advertisements to make money from the traffic that comes to your blog. You can also write articles or review websites for a fee. You can buy and sell stuff on eBay or online auction sites. You can offer consultancy skills over the internet via email or sell an ebook. You can create a user forum that runs itself and monetise it using advertisements. You can do affiliate marketing by selling other people’s products and services. Just google “making money online” and you’ll find tonnes of links to how people literally pluck money out of thin air. It’s possible.

In order to find out what you can do to grow your means online, you need to invest time to read and sieve through the various ways in which the web economy moves. There are many books you can read or borrow from the library. I just finished reading “The Long Tail: Why the Future of Business is Selling Less of More” by Chris Anderson and am amazed at the fact that the internet has made endless numbers of products and services available to people by reducing the costs of searching and matching buyer and seller.

Because the internet makes access by small buyers and sellers, i.e. you and I open and at a low cost. We can reach out to buyers and sellers easily as a small producer or a consumer. I recently launched my complimentary eBook, “Panzer’s Guide to Financial Freedom: It’s Your Money and It’s Your Life”, on my blog here and 45 people have downloaded it to read it in the first week or so since it has launched. The numbers are encouraging because based on my RSS feed, I have about 60 odd regular subscribers but my readership hit a high of 343 some time back.

I decide to publish the eBook because it was a way for new readers or existing readers to have a framework in understanding what personal finance and this blog was about. In addition, it was a way for me to crystalise my thoughts on financial freedom and personal finance in one short book and allow me to reach out to my audience in another way other than just individual blog posts.

In the short-term, I intend to work on a newsletter for another of my blogs, Singapore Fixed Deposits and consider my second Panzer’s Guide but be more focussed on certain aspects of financial freedom. I may decide to monetise my 2nd book and see how is the response. Even if I make one sales of one hundred sales, I will be happy because it’s something of value that I created as an alternate source of income besides my AdSense and related revenues from my blogs.

How you can pluck your money out of thin air

Even as you are reading my article, there are some ideas already floating in your head to develop an alternate source of income. I encourage you to do mini-trials and test it out. Do keep on your day-job and focus on it during weekends, evenings when you are not watching television, pubbing/clubbing or playing your PSP/Xbox360/PS2/PC game, consider learning more about how to develop a means to make money online through value-adding activities and not scams or ponzi schemes.

The internet has created more opportunities for people to get involved in the value-chain in new ways never seen before. Where was Google ten years ago - nowhere! They were incorporated as a private company in 1998 and now they are one of the most profitable internet companies today.

Think about it. The internet provides many possibilities to learn, grow and to monetise ideas.

How will you tap on it?

If the DBS retrenchment article doesn’t scare you into action, I’m not sure what will.

Be well and prosper.

The Straits Times has reported that “Investors to lose principal” for Pinnacle Notes series 9 and 10 as these were also affected by the credit event that is known to be the collapse of Lehman Brothers. It’s really tough on those who have invested their hard-earned monies into these products.

Will the MAS continue to take a hands-off approach and let aggrieved investors deal with the financial institutions or brokers who sold them the product? Will Tan Kin Lian champion the cause of these investors as what he did for the Lehman Brothers minibonds holders and High Notes?

I am not optimistic as the drama unfolded from the Lehman Brothers minibonds debacle has shown us that it is every man and woman for himself in general.

“Caveat emptor” again?

Be well and prosper.

Image by jimpg2 via Flickr

You’ve heard of the saying, “You reap what you sow” and it rings true for the journey towards financial freedom too! If you want to blossom like a flower towards financial freedom, you can consider doing what flowers have been doing for millenia to survive and thrive Darwinian style.

Flowers are used by many plants to propagate themselves by attracting insects to them to help move their pollen. In our quest towards financial freedom, the greatest asset that we have is ourselves.

Let Panzer show you the way of the blossoming flower towards financial freedom.

1. Plant that seed

The portion between your left and right ears contains your thoughts, your mindset and your goals. When you open up your mind to positive influences that help you learn more about living within your means, savings and investments, growing and protecting your means, you are fertilising your mind with ideas, thoughts and views that help you move closer to financial freedom.

To first plant the seed of financial freedom within yourself, you need to set goals. Not fluffy, intangible, “I want to be rich” type of goals but specific, measurable and timely goals, “I want to have a net worth of $xxx,xxx by age xx or in xx years’ time,” type of goals.

2. Water the seedling

Having all the wonderful goals but not doing anything concrete to move yourself closer to them does not help you realise your goals. Just as you have to water a seedling that emerges from the seed you have sowed, you need to help your goals materialise by “watering” it with additional ideas that flesh out the steps towards achieving those goals. Want to have a net worth of $100,000 in 5 years’ time? That means you need to save $20,000 each year and make sure you income less expenses yields $20,000 a year or $1,667 a month. Too much to save, then think of how you can grow your means by earning that promotion, incremement or bonus or try your hand at blog monetisation or making money online as an alternate source of income.

3. Prune the plant

Lifestyle inflation is something that happens to many of us if we are not careful. The gradual creeping up of your expenditures as your income grows can result in you saving less even when you are making more each month? Why, you may ask?

This is because when you get that increment or promotion, you will tend to have higher level of needs. If previously $0.90 kopi-c satifisfied you at a previous income level, then at a higher income level, you may fall into the trap of thinking $5+ Starbucks coffee is something you can afford. Of course you can, but the result is lifestyle inflation, i.e. as your income grows, so does your standard and expenditure on living outlays. The more you earn, the more you tend to spend unless you are very conscious of this and start to prune off additional expenses. I recently terminated a alumni club membership that costs me $50 a month in subscriptions. Although I could afford that $50 a month, the reality was that I hardly stepped into the club more than once a month and really couldn’t justify to myself spending that much (in perpetuity) to maintain a club membership I do not use. So, I decided to prune it out of my lifestyle.

What can you prune off from your lifestyle expenses?

4. Reap the fruits out of the flower

I have not achieved financial freedom. Far from it. I will also have to work for at least the next 10 years (if I am lucky) or 20 years (if I am not). However, I am financially in a much better shape since I started my journey towards financial freedom in 2003 by taking over my own investments and managing my own money. The main fruit that I have harvested is the growth in my knowledge and understanding of what money is to me and how it works in my life. I’ve come to realise that money is important in life though it’s not the ONLY thing you should concern yourself. However, a poor mastery of money and living habits towards financial freedom creates more problems in other aspects of your life such as relationships and personal confidence.

The benefit of travelling on this journey towards financial freedom has been a greater awareness of the role of money in my life and more importantly my own limits when it comes to investing well. I’ve realised from this current financial crisis that there is no substitute for hard work and perseverance. I had earlier thought that an aggressive investment approach would yield faster returns but the market has taught me to be patient as my equity portfolio is down by more than 50% in paper losses. Thus, I have to focus on the core fundamentals of financial freedom and consider leaving my equity portfolio to my daughter or continue to collect dividends while waiting for the next upturn (hopefully before I hit retirement!)

I hope that you too will blossom in your knowledge of personal finance and you will one day be financially free and we can drink coffee and share how our journeys went to bring us to where we wanted to go.

Be well and prosper.

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Download Panzer’s Complimentary Guide to Financial Freedom: It’s Your Life and It’s Your Money