Are you able to retire comfortably?


More often than not, people are not able to retire due to the many commitments in life. In our consumerist society, we need things to prove that we are successful. We need so much money to maintain our current lifestyles that retirement is not an alternative at all. Secondly, most of us are not able to retire due to a lack of savings and losing our jobs means a complete loss of income. This is why it is so important to spend below our means, save and to accumulate assets that can generate us passive income upon retirement. It is so important, yet so many of us fail to do so.

When this happen, we blame the economy, our government, the banks, and everyone around us, but we fail to see how we are sabotaging ourselves financially. We are the reason why we fail to accumulate wealth and attain financial freedom. We fail to plan for our future, fail to save, and over-indulge in life.

Avoid lifestyle inflation
It is so true that the more we earn, the more we spend. I remember years ago during my first office job as an intern in an accounting firm. A salary of $600 was more than enough for my daily needs, for me to pay for food, transportation, to help out at home, for weekends entertainment, and still had room for shopping as well. There was still a tiny bits of money left at the end of the month, right before pay day. It just was barely enough to save, but it was enough to get by. However throughout the years as I earn more, not only was I not able to save, I find myself running out of money the week before payday and needed to use credit cards to tide me over. There was also always an endless list of things to buy. I needed a new pair of heels, more dresses, the latest gadgets, a new wallet, a new watch, or a new bag. There’s a constant nagging feeling in my stomach that I need to save, but I always tell myself I’ll save the very next month, or when I get my bonus, or when I get the next increment, or after I bought what I wanted. I started work at 20. At 28, not only was I not saving any money, I was in debt. I was better off earning an Intern’s salary than a salary of an Finance Analyst in a private bank. My lifestyle had inflated so much over the years that I didn’t realized it. I hardly stepped foot in hawker centres or coffee shops and always had my meals in restaurants. I bought at least 10 dresses and a pair of heels in a month. I needed to do my nails, do treatment/cut/colour my hair, or do eyelash extensions every single month. In short, I had no control over my money.

Budget and keep track of expenses
It is funny how I have been tracking expenses and doing budgeting for all the companies I worked for, and yet I had never done it for myself until this year. I was so shocked when I looked through old bank statements and credit card bills and realized that I spent over $1,000 a month on food and drinks, and a few hundred dollars on cabs. A budget is useful in so many ways. It sounds like a chore at first, but once it became a habit, all I need is just half an hour a week to update my expenses and see how much I have left for the month, on what I can spend.

Cut expenses and SAVE MONEY
I used to find it so difficult to save. Now with a budget in place, I usually do a forecast on how much I need for the next month and determine how much I am able to save upon pay day. The first thing I do when I get my salary is to immediate transfer a certain amount (usually 20% of my salary) to my saving account. Trust me, it’s a great feeling watching my savings grow.

Avoid debt
I initially avoided using my credit cards again for fear of repeating my old foot steps, but I realized I’m missing out on discounts and the chance to accumulate points. Now whenever I use my card, I’ll make payment the very next day or within the week of making a purchase.

Where I’m standing right now
10 months has gone by and not only are there no new debts, but my saving has grown substantially as well. Just by taking these small steps, I have improve my financial life quite drastically. It is drastic because of the good money habits I have picked up, and that I have learnt to invest as well. Looking back, it wasn’t that difficult at all. I only wish I had started earlier.

Now, a comfortable retirement is possible for me because I’m planning for it and am willing to sacrifice material things for financial security and freedom. Don’t wait till you are in your 50s to start saving, planning and investing for retirement. It’ll be too late then.


7 thoughts on “Are you able to retire comfortably?

  1. Interesting post, thanks! I wonder what was the catalyst or event which caused you to realize that your debt was spiralling out of control and you had to take immediate action? Did someone highlight this? Of course, things are not as desperate as the guy in The Simple Dollar where his bank account was down to the last few hundred USD!

    Lifestyle inflation is a very real and pernicious phenomenon, and I’ve seen it happen with a lot of my friends. Some are blissfully unaware; while others may be aware, but are helpless to do anything about it because they are so caught up in the cycle of materialistic spending. For myself, I consciously avoided spending more even as my salary increased over the years. It’s quite effortless for me as I do not really spend much in the first place, and public transport sits very well with me too. My wife and I also buy generic stuff (unbranded) and we have hobbies which are quite affordable (sports, occasional movie, walks in parks, music). So there is no temptation to spend more even as income scales up. As a result, we manage to save more year after year.

    For myself, I don’t track all expenses but I do have a budget on Excel which I track closely. A lot of contingencies sometimes do crop up (like for October) which sometimes makes me miss my savings targets – in cases like these you have to be disciplined in subsequent months and actively cut down on expenses to make up the difference.

    Thanks again for this post, keep it up!

    • Hi Musicwhiz, I’m always in awe with people like yourself who have self control and are mindful of their spending. Is it due to good upbringing or early education of financial literacy that led people to be prudent in their spendings and realising the importance of saving and investing at a young age?

      I struggled with debt for many years and it’s only recently that I managed to turn my financial life around. To be honest, I’m still I’m awe that I had been so determine and had been so consistent in building up my savings, tracking expenses and following a budget rigorously.

      To be honest, all it took was just one morning at work last December that turned my financial life around. I’ll promptly write about it soon. I believe I was worse than Trent from the simple dollar. At least he had a few hundred dollars to his name. I basically had less than $10 at the end of the month and had to rely on my boyfriend or my credit cards to feed myself till payday. I wasn’t exactly proud of myself then. I was just fortunate that I was practically commitment free compared to Trent.

  2. Hi Jasmine,

    I think it was neither haha! Honestly, I believe it was because my family went through a financial crisis of our own back in 2003-2004 that I was forced to evaluate our financial situation and take measures to assess my finances. I then realized that I wasn’t investing and that I wasn’t properly tracking my spending and savings. I guess you could call it a sort of “awakening” as I had been living with my parents all this time (I only moved out in 2005 after my marriage) and thus relied heavily on my father to manage the family’s finances. I sort of also realized that I needed to figure out how to manage my own finances if I was to shift out and start my own family! And in a sense I did manage to do that as I fully-funded my own MBA through tuition income and full-time employment instead of relying on any parental support. Though it was an extremely tough period – working full-time, managing the house renovations, studying for the MBA and giving tuition (purely because I like to teach haha).

    It’s really good to hear that you are being more organized in terms of financial budgeting and also tracking of expenditure. I subscribe to my three “I” philosophy – Income, Insurance and Investment. Income essentially means “savings” and budgeting, insurance refers to protection from major illnesses, disability and hospitalization while investment is to grow your money at a decent return; in that order. Without savings, you cannot invest. Without insurance, your savings will take a big hit if something unexpected happens. So investment should come last of all after you have settled the first two. And honestly, without investments I do not think I could achieve what I have today, but that’s another topic.

    Look forward to your post on how you got started.

  3. Hi Musicwhiz, thanks for the insight! Glad that you were never in debt though. It was really painful and not easy to get out of it. Your three “I” philosophy makes sense as well – Income, Insurance and Investment. It takes a lot of determination to study part time, work full time and still have time for side income. I wonder how you manage! Do you mind me asking what do you major in?

    And to be honest, tracking of expenses and budgeting is a piece of cake after many months of good money habits. I wonder why I did not start earlier. Right now, I am trying to read up and learn about value investing as much as possible and to build up a healthy portfolio. I realized what I had been doing the past months are trading activities and do not actually hold any stocks for the long term. What spark your interest in investing and how do you get started?


    • Hi Jasmine,

      Yeah I am glad I never got into any serious debt problems, but it’s admirable that you managed to clear off your debt and are now blogging about it to help others! I majored in accounting for my Bachelor’s degree and later went on to obtain an MBA. The accounting gave me the background for understanding financial statements while the MBA opened my eyes to various aspects of business like Management, Economics, Marketing and Corporate Strategy.

      It’s encouraging to know that you’re interested in value investing. It’s not an easy discipline and though the concepts may seem simple, the practice and execution are not so easy as it requires a certain psychology (calmness, discipline, patience and fortitude). My blog has information on how to go about the process and I also mention aspects of behavioural finance which I feel are important to investing. The best analyst in the world would not be able to invest well if he did not have the proper psychology and temperament.

      My interest in investing started in late 2004 when I applied for my first IPO. My father got me started in equities by explaining the basic terms and how to open a CDP account etc. I spent 2-3 years basically speculating and punting, but I was lucky because the market was rising. In late-2007, I picked up a book on value investing (Benjamin Graham’s The Intelligent Investor) and also read up more on Warren Buffett’s philosophy and since then I have never looked back! Value investing makes sense for me intuitively as it is the only discipline which allows you to find the true worth of a company, and which emphasizes safety of principal rather than chasing high returns. So I got started from books and was basically self-taught. A few mistakes (also detailed on my blog) helped me to learn better about what to look for, and I had to lose a significant amount of money to learn those hard lessons. I have since got wiser and my portfolio is also faring better as a result.

      • Hi Musicwhiz,

        It’s nice to know we are of the same profession! I used to think Accountants are “boring” and that accounting is dry. But now I realised our skill set of understanding F/S, calculations of ratios, discounted cash flows, budgeting, and forecasting are actually very useful outside of work as well. In this case, creating an investment portfolio for passive income, and handling our personal and household expenses etc. I just never really put it to good use outside of work until now.

        Likewise, I did lose some money the first few months by blindly following what people are buying without looking at technical analysis and the company performance. Thankfully, the “school fees” incurred wasn’t too painful. I went through a steep learning curve as well, from being a poor manager of my money to being in control. (I’ll drop you an email soon on how I get out of debt.)

        I think reading is really helpful and friends have recommended books, and your blog is filled with valuable information as well. I’m still trying to digest as much as I can.

        And once again, thanks for being so encouring! 🙂


  4. Hi Jasmine,

    Thanks for writing this post and it definitely serve as a reminder to us to learn to save and avoid those unnecessary spending! It is important to practise self-restraint – an important step to achieve financial freedom! 🙂

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s