Price to pay for financial independence.

A message that will definitely go into my next book on Personal Finance is to list out the price to pay for financial independence. It gives the young reader an idea of what sacrifice must be made to become financial independent in their 30s, it also explains why many people in their 40s struggle so hard to pay bills and yet a minority will just cruise comfortably in their forties with hardly a gripe.

Let's start with something simple first :

a) Can you forgo consumption in your fabulous twenties.

To me this is the cheapest price to pay. Your twenties is the time you can take the most punishment from the corporate world with almost no dependents. You can take on 16 hour management consulting or investment banking jobs to accumulate your wealth. There is also little need to consume - gadgets get better with time anyway.

Most investment books just talk about about point (a). If it's that simple, there would be a lot more millionaires in Singapore today.

I think my book will go further than that :

b) Are you willing to be disagreeable and have people hate your guts for it ?

This is something many people are unwilling to do. An agreeable person can cruise along in life with little strife. Type B folks live longer and lower incidences of heart disease.

A disagreeable person, on the other hand, can tell a close relative to fuck off when they try to sell them a whole life insurance plan or their childhood friend to fuck themselves when they into MLM. A disagreeable person can bulldoze their way through work and get the lazy social loafers to complete their projects in time. Overtime, disagreeable executives do better in the corporate world and earn more throughout their lifetime.

c) Are you willing to delay major milestones like marriage and children and risk it never happening ?

Your wealth needs to compound early to make a difference to your quality of life in your forties, an early marriage is a huge financial burden in your twenties and children make it worse. This effect is even worse for women, who have a strong financial incentive to stay single as it increases their income even more.

As I still believe in family, but this is a heavy price to pay if you, like most people, do want to settle down eventually. Even as a man, you may find yourself unable to pro-create when you finally get financial independent if you insist on this limitation too much.

d) Can you cope with an existential vacuum in your forties ?

I am beginning to really understand that price to pay as I near my forties. One side-effect of reaching financial independence early and going through the practice is that it turns me into an ascetic that's not excited about many things.

Car don't really excite me as much as watching a sunset, and I only need a few gadgets to keep in touch with the financial markets. I read some books on marketing to men to see if I can spend my money on more things but all it does is turn me off consumption even more.

The only thing which makes me happy theses days are experiences and my relationships but I can't travel much with a toddler around the house. I can't eat well because it will ruin my blood sugar control.

This ironically makes retirement a very scary idea because I need to figure out how to maintain the "flow" I get in my current public service job.

Maybe one day, I will devote more time to philosophy and become a social entrepreneur. That time will come after I make my contribution to Government service and round up my career in Singapore.

Financial Independence is a battle for your very soul

Financial independence can be a nasty battle for your soul. A decision to get ahead at work may cause you to reframe your colleagues as rivals. Accumulation of more assets can cause you to delay building many meaningful relationships in life. And one day, after you have it all, you need to fight to make your life more meaningful before that inevitable exit.

I knew the price I paid, question is which decision will you take ?

The difference that makes the difference.

This article in an attempt to distil some of my personal experience into something useful for readers.

Since I was an undergraduate, I was never really able to excel in a core initiative. I'm going to share three experiences and then try to see if it's possible to turn them into teachable moments.

a) My stint in the Information Olympiad squad.

I spent a brief time training in Singapore's first squad that took part  in the Informatics Olympiad in 1992. In the selection phase, I was chosen not because I was good in programming but I was able to grasp the concept of a Graph algorithm and explain to the judge without knowing a god-damn thing about the augmented matrices that makes the algorithm work. Even my lecturer's in NJC was surprised I was chosen, because I always had the gift of the gab, my programming was good but not great.

Needless to say I was not chosen to actually represent Singapore, but I was able to participate in the training in NUS which was useful to my stint later as an Electrical engineering student.

b) My journey as an electrical engineering student.

I was slightly above average as an engineering student, I remember my final year as a pretty smooth year for me, I even managed to hit on some girls during that time. One class-mate commented that my most powerful advantage was my public speaking skills which I leveraged to get a string of As in all my communications modules and ultimately my final year project. Being in the Dean's list in semester 8 is traditionally hard because that's the time the hostelites stop drinking and start waking up the fact that they are close to graduation.

I was also able to get a decent ECA record which most engineers have problems doing, which paved way to being accepted in P&G when I graduated. ( P&G was into extroverted folks with a high openness to new experiences in those days. )

c) My work experiences

I spent most of my time in the working world scoring IT qualifications. It was crazy, some years I did 21 exams while holding a full-time job. What I observed is that my qualifications did not help me much, I was quite loyal to the MNCs I worked for and never could achieve good increments when I changed jobs. I explained my strategy to an fellow French student that I was buying a lot of call options on the IT industry. She felt I was being ridiculous. Now I agree with her since most of my options expired worthless.

Most of extra income came from my investments. These days about half of my take home pay is through dividends. My three years slogging for the CFA paid off in the size of my portfolio today. I did'nt even need to leave the IT industry in the end.

Moral of the Story


I think that something my generation failed to understand about success.

Very often, if you focus on one area of specialization, odds of you getting to the top 1% of your field is very hard. It's also very taxing for your sanity.

If you are able to find an alternative specialization and find a way to resolve your current life challenges, life will be a lot easier. My speaking skills in school help me out more than my ability in physics.

This is what I think is possible for most people :

a) You need to be good at your core specialization.

You still need to be competent at your core. If you are an engineer, you need to be able to do ok at your day job. It's a condition to be minimally employed.

b) Find something you like to do and be good at it in your spare time.

I realized that a secondary skill that is related to the following fields will always pay off and make you more useful to your company or business :

• Communications and Language
• Investing, finance or economics.
• Psychology or culture.

c) Develop your secondary speciality and use it to reinforce your core.

This suggestion is neither a appeal for specialization or generalization of skills. You need to cultivate a secondary skill and keep leveraging that skill to reinforce your core. This creates a something unique that only you can do well.

Next steps  

As my next career is in public service, odds are I will need to be able to find a new secondary skill to reinforce my core. I'm looking at the TESOL to reinforce my language skills so that I can write better papers at my job. Of course, getting to the level as an English instructor as a lot of other benefits as it strengthens my writing skills.