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The RETIREMENT thread

Leongsam

Leongsam

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There are a ton of misconceptions regarding what "retirement" actually means. I've been giving advice with regards to the subject over the years but it's scattered all over this forum (and the previous one) and has never been consolidated into a thread dedicated to the subject.

As I've finished my summer and autumn projects, I now have a bit of time on my hands over the next week or so and I'll my spare moments to share my ideas on what I consider to be the most pressing issues facing Sinkies over the coming years.

I'll be writing whatever comes to mind so the thread won't be well organised to start off with. However, as time goes by, I'll do my best to edit the contents to make them as coherent as possible.

Here goes:
 
Retirement - what does it mean?

In my books, retirement isn't doing nothing. It's doing what you want to do rather than because you have to earn a living performing a task which may or may not bring you any satisfaction.

In order to do as you please, (within the boundaries of the law of course) rather than what you are being paid to do, you first need to achieve financial independence. This term causes much confusion too. I take it to mean what it says... ie that you no longer have to depend upon regular employment in order to fund your lifestyle. You are independent of others and are not beholden to any organisation or person when it comes to money.

Everyone is different so there's no fixed threshold that defines what financial independence is. What's enough for me may well be far too little for you. More of that later.

How is financial independence achieved?

1. Saving as much as possible with the hope of achieving your goal. (very difficult to achieve in this day and age)

2. A combination of saving and investing in the enterprises owned by other people. (better than just saving but not ideal)

3. Investing in yourself and creating wealth on your own. (The best method of all and in my opinion, less risky than investing in 3rd parties)
 
Why the PAP does not want you to achieve financial independence.

You guys are more familiar with what's going on in Singapore than I am. However, from what I gather, the so called "retirement age" is being stretched further and further out as the years go by.

There's talk of working beyond 67 which is absolutely crazy. Nobody should have to be stuck in full time employment till they already have a foot in the grave.

Time is running out rapidly for anyone beyond 65. You don't want to have to drag yourself out of bed every morning at that age. The golden years should be all about enjoying life not slogging away at the beck and call of someone else.

However, the government has no problems with sinkies working till the day they drop dead as it removes a burden for them which is what to do with those who have no incomes. It also keeps everyone beholden to the system that they have created. If you're financially independent, they have far less of a hold over how you live your life. If you need to work, you're forced to buy into government policies which you may resent or disagree with.
 
By what age should I be able to consider myself financially independent?

The younger you are the better. If you can achieve this goal by the age of 25, hats off to you. I wish I'd aimed for this goal instead of wasting my time. I wouldn't have given away a decade of living under the cloud of an employment contract.

A more achievable time frame would be by the age of 40 but no later than 45.

Retiring at 45 gives you loads of time to pursue new goals and to start ticking off your bucket list. You should have at least 15 to 20 years of good health ahead of you which is a huge advantage when it comes to travel and adventure. If you wait till your late 60s, your travel plans could well be limited by the need to be close to health care facilities. You'll need to pack your heart pills, your cholesterol tablets, your insulin and your viagra. In your 40s, your mobile medicine chest is far lighter or non existent.
 
How do I achieve this goal?

This is 5 million dollar question. Wouldn't it be great if I could just plug in a formula for success for everyone to follow. Unfortunately, life isn't like that. Everyone is different and what works for me won't work for you simply because we all have different strengths and weaknesses.

HOWEVER, I can give you a piece of advice which will ensure that you start your journey and that is to set you goals and start ACTING UPON THEM TODAY! Not tomorrow, not next week, not next year, not after your kids are grown up, not after your parents have kicked the bucket, not after the PAP is ousted from power. Things have got to start happening now!
 
Just wanna say that personally yes we need to have financial independence this is something we should strive for relentlessly but the amount to have is very individual, I shall not share what is my target but one thing I like to stress is it is ok if one want to continue to work until he drop dead if he feels happy about it. This is actually my aim, I like to continue to work and work as it is something that I like as I enjoy the traveling and challenges. However I am still able to go for 2 long holidays (2 weeks each) per year and many smaller holidays like weekend escapes to destress. When I get older (47 now) I would like to have more long holidays and let the younger ones do the running more but at no time am I retiring because I really like what I do and my future plans (new businesses) and projects (building house or something, helping the community etc) keeps me alive. So its ok not to retire, at least for me.

Sam I hope I'm not crashing your thread by saying the above just wanna say it cos many thought retirement is spending time at home and with wife or driving grand children around, I'm sick and tired of seeing my older friends doing this and after a while want to get back but its already too late and they got to suck thumb.
 
Last edited:
The basics of creating wealth :


  1. You have to be working for yourself and not employed by someone else.
  2. You have to start an enterprise which has the potential to grow and become valuable. The best businesses in my opinion are those which are subscription based which means that clients/customers pay a monthly fee for your products or services. The enterprise you choose should be something you're interested in and you're good at.
  3. You need to work hard to build up a large client base in order to make it attractive to potential investors.
  4. You put the business on the market when it is valued at a figure which is at or beyond the goal that you set when you started.
  5. You sell it and pocket the money.

If your goal was $10 million and you sold it for that amount or more, you've achieved what you started out to do. You are now financially independent at the level which was determined by your own assessment of the lifestyle that you were aiming to achieve.

If you're still energetic, you can plough a portion of the money into another venture and repeat the process.
 
How much is enough for me?

Work out the figure using one of the many useful and reliable financial calculators that are available on line.

My favourite is http://www.sorted.org.nz

However, there are many similar sites. Choose the one that is the best fit for your own circumstances.
 
You control your own destiny.

Politicians are never going to make any significant difference to your lot. You may save a buck or two here and there when tax rates are tweaked but nothing that is going to significantly alter the quality of your life. You have to do it yourself. It doesn't make a scrap of difference who runs the country. If you're a loser under PAP rule, you'll still be one if the WP takes over. In order to make things better, you have to change your attitude towards life and the way you live it.

Changes to your life have to come from within. If you want a better life, the grey matter between your ears has to make up its mind that waking up every morning and following the same old routine is going to do absolutely nothing for you. You're merely a victim of circumstance buffeted by the winds and drifting with the currents.
 
Enough for the time being. Will continue later.
 
I need around $10,000/month or $120,000/yr to retire. This amount is set back in 2000 and with inflation kick in; this amount need to go up by 5-10% to have the same purchasing power.

When I have $10m today; I must make sure it will retain it's purchasing power 10 years or 20 years later.

I find properties and Gold does the trick of outperform when coming to retaining purchasing power. But properties have advantages like
1. Leverage
2. Income from rental

It work for me; hence I believe it.

However people whom bought Gold at US1920/oz or properties in 1995 may disagree totally after losing their pant.
 
joetys said:
Sam I hope I'm not crashing your thread by saying the above just wanna say it cos many thought retirement is spending time at home and with wife or driving grand children around, I'm sick and tired of seeing my older friends doing this and after a while want to get back but its already too late and they got to suck thumb.
Click to expand...

All "crashes" are welcome. ;) If you refer to my opening post, I have stated that retirement isn't "not working", it's working at things you want to and not at what you have to in order to make ends meet.

I consider myself "retired" because I have enough in the bank to last me till the end of my days. However, I put in at least 7 hours a day of solid "work" some of which I am paid for and some of it which is voluntary plus there's a portion which I actually have to pay to do.
 
Leongsam said:
All "crashes" are welcome. ;) If you refer to my opening post, I have stated that retirement isn't "not working", it's working at things you want to and not at what you have to in order to make ends meet.

I consider myself "retired" because I have enough in the bank to last me till the end of my days. However, I put in at least 7 hours a day of solid "work" some of which I am paid for and some of it which is voluntary plus there's a portion which I actually have to pay to do.
Click to expand...

Ok thanks. If I have more I will share later. Gotto go to work now. At least 300km of driving today.
 
Have a bit more time... lunch appointment postponed 45 minutes....

OK here is the most important piece of advice.....DO NOT CONFINE YOUR LIFE'S PLANS TO A 700 SQKM PIECE OF SNOT CALLED SINKIEPOOR. The world does not revolve around sinkieland and neither should you.

You should operate on a world stage. Your views should be global. Your options should be kept as wide as possible. For example, if there's a law in Singapore that prevents you from doing something you have a passion for, simply move somewhere else where the laws are more favorable.

With today's technology, you can run many sorts of businesses from anywhere. You don't have to be on the ground. Your tablet is your office. The internet is your market.
 
Leongsam said:
OK here is the most important piece of advice.....DO NOT CONFINE YOUR LIFE'S PLANS TO A 700 SQKM PIECE OF SNOT CALLED SINKIEPOOR. The world does not revolve around sinkieland and neither should you.
....
Click to expand...


The PAP has a bad habit of moving the goal post making it difficult to do any long term plans. For example those who expected the CPF to help them in their old age have now to go back to the drawing board.
 
johnny333 said:
The PAP has a bad habit of moving the goal post making it difficult to do any long term plans. For example those who expected the CPF to help them in their old age have now to go back to the drawing board.
Click to expand...

You've made an excellent comment which leads me to my next point which is to highlight the fact that CPF should never be factored into retirement plans.

Anyone who believes that CPF will meet retirement needs should have their heads or their calculators examined.

Just work out how much is left over after deductions for a housing loan, medisave and special account. If you're employed full time without a break for 30 years before you retire, most would still be looking at less than $500,000 in their accounts even if it was all handed over on a platter at age 55. The shifting goal posts have not made any difference. If CPF was considered to be salvation, you were wrong from the onset.

Treat CPF money as a bonus payout with an additional advantage that it helps tremendously when paying off a housing loan. Beyond that, CPF is of little use. It definitely won't see you through your retirement years unless you live like a pauper.
 
Leongsam said:
As I've finished my summer and autumn projects, I now have a bit of time on my hands over the next week or so and I'll my spare moments to share my ideas on what I consider to be the most pressing issues facing Sinkies over the coming years.
Click to expand...
What? Your free time is only limited? I am the most cho-bo-lan here posting ALL THE TIME. Can u put back the donation box? I've got too much money to spare. :oIo:
 
Boss shouLd haVe aptLy changed the titLe to: The Retirement Threat..:)
 
How do you work out the size of your nest egg?

Do the math based upon a 4% return after inflation and taxes. If you move to the right places or get a good accountant, taxes can be eliminated or reduced considerably.

For every $1,000,000 in productive assets, you should receive an income of $40.000 per annum so if you think you need $200,000 per year to support the lifestyle that you wish to enjoy, you need $5,000,000 in assets excluding the family home.

The family home does not count. It yields nothing. It is an overhead as long as you live in it.

If you want the lifestyle of the rich and famous, you'll probably need about $30 million or more. You then enter the realm of private yachts, chartered jets and fancy penthouses.

Less than $20 million and you're very comfortably well off but not really rich.

Remember that this thread is about achieving financial independence and not about becoming super wealthy. I emphasise this because I believe that just about anybody can achieve a target of $4 to 5 million. All it takes is willpower and perseverance. Becoming a billionaire is a different ball game altogether.
 
Leongsam said:
Time is running out rapidly for anyone beyond 65. You don't want to have to drag yourself out of bed every morning at that age. The golden years should be all about enjoying life not slogging away at the beck and call of someone else.

.
Click to expand...


I agree no one should suffer the indignity of being at the beck and call of a boss forever. But everyone should keep active beyond the age of 65, not just tending to hobbies, meeting and making friends, but also engaged in some form of productive work that keep both mind and body active. Some form of income should always be earned, no matter what age and no matter how little.
 
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