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How I Saved $200,000 in 3.5 years Without A Degree (Part III: Maintain + Invest + Others)

Please click on the link to read Part I and Part II

Maintain

25. Take care of my things

I put in the effort to take care of my things because I want to be able to enjoy using them for the long term

It doesn't mean that I live my life around my things because after all, they are just tools to make my life more comfortable and convenient, and make me happy. I just take care of my stuff when I use them and maintain them whenever necessary. This allows the things to last longer and reduce the need for repair or replacement

Another perk of taking care of your things is that they will retain a higher resale price when they no longer add value to your life, and it would be easier to rehome them than to trash them unless they are beyond  

26. Repair my stuff

That's right. I don't throw away my stuff once it's damaged or spoilt. 

It probably runs in the blood.

I have repaired my alarm clock, mended my clothes, stitched my backpack, replaced cracked screens, fixed furniture and electrical appliances, and repaired my shoes as well as my bicycle.

If it's something beyond my ability to repair, I will ask my family and friends if they have any way to fix it, before I weigh the cost of sending it to a professional or getting a new one.

I think the key here lies in owning good quality stuff that you really like and will be willing to use it for the long term. For good quality items, the cost of repair is generally lower than the cost of a new acquisition, and if it's something you see yourself having a long-term relationship with, you are more likely to take good care of it.

Invest

27. Do my due diligence

For a trade to be committed we need to have a buyer and a seller. This means that at a particular transaction price, that price is fair or reasonable to both parties. 

So even at the price in which you think it is the fair price to buy, the fact that the deal can be done is because the seller deemed that that is the fair price to sell.

From this, we can understand that even at the same price the value can be perceived differently to different people.

This applies to anything, from food to goods to any investment products. 

Thus when someone recommended you to buy/sell, please do your due diligence so that you will know why you execute a trade, learn from any mistake and take full responsibility for your own decision.

Always remember that everyone wants a share of your money so nobody cares for your money as much as yourself.

28. Invest early and take it easy

I have never been an advocate of saving a lump sum before investing. Just like there is on-the-job training, I believe in on-the-go investing.

Sure, investing a big sum of money will spread out the costs involved, but you risk the depreciation of your cash over time and you will not be able to resist the urge to attempt to time the market yet eventually missing the boat or making the wrong move most of the time.

Investing a big sum of money also means that you will be making more losses if there’s a run of bad luck.

On the other hand, when you start investing early, even with a smaller sum of money, you are having more opportunity to test different investing strategies, learn from your mistakes and which method is suitable for you, all of which will help you a lot when you eventually have much more capital.

Reading books on finance and investment will indeed prepare you ahead in terms of knowledge, but you will still need to accumulate experiences to acquire the wisdom for investing

29. Only invest money that I can afford to lose

While I don't advocate getting everything else ready before you start investing, I believe in making sure that I only invest with the money I can afford to lose. 

A rule of thumb is if the whatever-i-invested-in market is going to crash and the value of my investment will be zero the next day, will I be alright with it? 

If my answer is no, no matter how attractive the opportunity is (like the last market crash), I will not put the money into the market because ultimately, investment is a risk

But just because the investment is a risk, you do not need to fear too much about it, because we don't throw caution in the wind and just buy whatever rumors say, instead, we do our due diligence and only take a calculated risk with money we are willing to lose

30. Put my eggs in different baskets

My current investment portfolio consists of cherry-picked equities, bonds, precious metals, foreign currencies, cryptocurrencies, and ETF.

I think it is good to be involved a little in everything so that you can learn about different assets and keep up to date with the financial markets.

Another method to consider is the Permanent Portfolio, where you invest in four types of complementing assets and rebalance them once in a while. 

I don't have the habit of rebalancing my portfolio or insist on a certain proportion of each asset class but I do rip profits when it's due and buy when I can afford the opportunities. 

31. Differentiate investment from budgets and savings

Just like how we differentiate investment from insurance, we must also separate investment capital and budget for spending.

Investment capital is money that we are going to put in the market in the hope of appreciation and be willing to bear the risk of losing everything.

Spending budget is the money we are prepared to trade for a service or product that we can consume, and be fully prepared to not recover any of the money spent.

Having clear boundaries help us to manage our emotions with our money

Others

32. Skip the insurance (because my company has really good coverage)

Definitely frowned upon by many and I agree that this is a risky move.

The reason why I haven't settle on the insurance part of the finance yet is that my company offers decent coverage including accidents, critical illness, and death. 

I also go for health check-ups regularly and strive to live a healthy lifestyle.

Once I have reached financial independence, I should have a passive income to cover the cost of the necessary insurance. Until then, I will be working and therefore still enjoy the company's insurance benefit until I had to leave the firm.

I was planning to buy insurance only if my next employer doesn't offer sufficient coverage or when I have achieved financial independence, but many kind folks have suggested otherwise mainly because of the existing condition that will be excluded if I were to get health insurance at a later age, so I'm starting to give a thought on it.

33. Hold back my parents' allowance

Yes, I haven't started giving allowance to my parents yet because I am saving up to further my studies and investments, and since my dad is still working and able to afford the household on his own, we agreed that I will start to give them an allowance when I finish my studies, get married, turn 30, or when my dad retires, whichever comes first.

34. Donation

You can donate to a charity that is an institute of public character (IPC) to get higher tax relief in order to pay lower taxes. 

For me, my taxes are very low so I don't donate to IPC. Instead, I would donate to smaller charity without IPC or animal shelters that I support since they are less attractive to most company and people seeking for tax relief, but these groups will still require funds for operations

Even though donating money is an expense, it constantly reminds me of how my money could have been used to help others and save lives, instead of squandering it on unnecessary contemporary junk that will eventually end up in landfills.

I still consume, shop, and spend on things that add value to me or make me a happy or better person, and I'm far from being a minimalist. However, having some causes that I support will urge me to have a second thought about wasting money, which I'm innately good at, and therefore decreases my spending.

35. Gifting

Unless it's the Secret Santa in which the present is already specified, I will usually buy the merchandise from a charity for the gift exchange in festive seasons or as presents. Those merchandise are usually marked up to a similar price as the mall, but at least I know that the profit will go to the causes. 

Among close friends we also agreed to make a donation in each other's name instead of buying things that we don't need.

This gives me a very good idea of how much I would need to budget set aside for gifting.

36. I'm really really really lucky

I attributed my success in this milestone mainly to luck. 

I'm lucky that my family and friends are understanding and supportive of me. There are enough stories when relationships are strained and some even ended because of different spending behaviours or school of thoughts when it comes to money. I never had to go through this. In fact, I have many friends who are very willing to share their ideas or personal finances and the exchange of ideas always inspires me.

I'm lucky that I'm in good health, that I can work long hours every day and still be physically fit enough to enjoy my favourite activities and spend time with my loved ones. I'm lucky to be able to find a relatively stable (though super busy) job that keeps me employed in this crises, willing to pay me fairly and provide adequate insurance so I have a lesser thing on the plate to worry about.

I'm lucky to chance upon the importance of personal finance in my final year in school, which woke me and motivated me to buckle up and chiong for financial independence, and the best part is that I'm still enjoying this after all these while.


That's it from me.

I will probably not write this kind of post again till I reach another milestone because it takes too much time to collect my thoughts on this matter, nonetheless, I appreciate having a space for documenting and reflecting on my financial journey.

I hope you enjoyed my writing and many thanks for reading.

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