Tuesday, December 3, 2013

Random thoughts: Financial Freedom is a means to an end, not the end itself

(Random thoughts series have nothing to do with analysis of companies, skip it if you like)

Hmm...

What I am going to say will most properly pissed a lot of savvy investors off.

What I am going to say here is run counter to many wealth accumulation rules.

1) Delayed gratification.

Yes, I agree, but we need to make sure our love ones enjoy life if we could afford it. Loans for holidays is a NO-NO, left hand in and right hand out every month? No- No! But we do not have to maximize savings like it is a trophy to be carried home. I consider myself frugal as compare to my in-laws family who is wealthy in my definition. I consider a car a luxury and they a necessity.  I still consider a car a luxury, and have been cajoling my wife to give up the car since our son is already 4 years old. $1000 a month is too much for convenience, I always say.

Now, I have a different thought. My family deserve the luxury of a car, if I can afford it, I should continue with it. I need not worry about the rain, and we could get around places fast and comfortably. Why did I want to accumulate wealth? I want to give my family a good life. Why not do it after 10 years, when my wealth can compounded my quickly. I do not know what will happen tomorrow, I want my loved ones to live reasonably well, since I can afford it and I love them. I do not think I am irresponsible here, since I already various insurance and endowment plans to cover my death, sickness and my son university fees. It is not a lot of money, we still need to work, but I do not foresee unreasonable hardship.

2) Budgeting, track your every expenses.

I used to do that zealously  when I am a single, when I get married, I realized my money belong to my family, I can't really say no to a weekend meal out. The tracking of every expense just make me very unhappy. Now, I told my wife, calmly that I think certain expenses is unnecessary. She usually respect that. When we went out for dinner with our family, or buy something luxury in my eyes, instead of sulking about the money that could have gone into which undervalued company instead, I count my blessing that I am able to afford the small luxury for my loved ones, and be content with whatever I have. If I have to work longer, or work till the day I drop dead, I am ready, life is just too boring without work.

OK, enough bad habits from me, I am a self-delusive person, I always look on the bright side. Please, do not let me hinder your progress to financial freedom, do 1) and 2) judiciously if you can, I am content with my life and count my blessings everyday.

5 comments:

  1. Mike,

    Ah... Refreshing!

    I guess we both had similar paradigm shift in our thinking over time ;)

    I used to be a saver; now I enjoy the priviledge of sharing with people whom I love .

    I used to track my expenses; not anymore now that I've recognised myself.

    It's a bit like training wheels on a bicycle. Once we know how to cycle, we don't need to know precisely where each cent is spent or precisely how much we have made to the next decimal point.

    I smile when I see others going for like you say "trophy" in extreme measurement.

    They have either started their journey like we had, and may have their paradigm shift in due time.

    Or if these people have been doing it for more than 10 years, then perhaps they have prioritised excel sheets and graphs over relationships.

    To each his own.

    Jared - silly SMOL

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  2. Hi silly investor,

    Haha, we all had been extremes once and then we realised that life is more than that and we found our balance :) Sometimes I think that instead of planning so hard for the future that might not happen, we should spend more time enjoying this moment right now, before it's lost. I bought a car too and only had one regret - why I didn't buy it sooner?! I would have enjoyed it a lot more!

    Funny things happen in life. When I'm young, I wanted to buy lots of computer games but I couldn't because I don't have the means. When I'm older, I had all the means to buy any console or games but I couldn't because I don't have the time or energy to do so anymore. So the same goes for life - if we plan to do all the wild and crazy things only when we've retired, it would never feel the same as enjoying it now. The energy level, the interest and perhaps your loved ones might not be the same as it is now.

    We must hedge our enjoyment in life but taking small bites here and there, yea? :)

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  3. Hi SMOL and LP,

    Thanks for visiting my blog, I am glad I am not the lone tree in wilderness, and have like- minded people.

    Yes, we should always guard against extreme. Not too frugal but not too spendthrift.

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  4. Hi Silly Investor,

    You are not the only one. I was like all of you in the past but people do change with age.

    Financial Freedom now is to enjoy doing and having the things that I always wanted either for myself or for my family, and yet have sufficient to tide over an emergency.

    What for save so much when I can't spend it ya. You mention about your car so I will talk about food. For me, eating out is a necessity! My dad always tell me that he work so hard so that the family can eat well. So as a filial son, I must continue the tradition. LoL

    Cheers!
    Derek

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  5. Hi Derek,

    My mum is very frugal, but weird she always say we must save well, but must eat well. Maybe our parents generation went thro hunger and deem it a must have welfare.

    It seems it is easiest to save when one is still young and single. For those fresh graduates, I think it is important to be disciplined for the first few years. Get the habit and values and find someone who share somewhat your money values.

    Then save, invest and enjoy life...

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