Milestone Updates and probably a lot of chit-chat

It has been 11 months since my last post that I almost forget I have a financial blog :P

Life was so busy and after staring at screens for more than 16 hours every day for work and study, the last thing I want to do is to whip out my laptop and write a blog, plus I have adopted one cat and rescued another kitten last year, so those adorable burdens do take up a huge chunk of my time ;)

Milestones

Had a major shift in my financial strategy, so I consolidated my assets to update my net worth.

A couple of financial milestones:

1. Reached 250K by Dec 2020 ( up 50K in 7 months)
2. Reached 300K by Feb 2021 (up 50K in 2 months)
3. Reached 100K in CPF Special Account by Apr 2021
4. Reached 200K in Current Assets (assets that can be liquidated in less than a month) by Apr 21
5. Net Worth on Apr 21 hit 333K (what a nice number :)) the 33K is the money in my Medisave and an outstanding loan to a friend for his university education.

The first 50K increment is due to capital gains in investment and the bonus received at year-end, while the second 50K bump is mainly due to the crypto bull run.

Lifestyle inflation is real. 

Only after hitting the 200K mark I feel comfortable taking in two cats because I am confident that I can be responsible for them and providing them with quality food and medical care throughout their lives.

Major expenses over the past year include a flagship phone ($1258), a Secret Lab chair ($468), a pocket spring queen-size mattress ($599), a Yamaha speaker ($470), an iPad Air ($879) with apple pencil ($189), and a luxurious dinner treat to my parents at the Michelin-starred Crystal Jade Golden Palace ($706.45).

My parents are very frugal people and they don't spend over $5 on each meal except at gatherings or when I occasionally join them for dinner. Knowing them, they would never bring themselves to spend so much money on food if I don't take the initiative.

Of course, this is not the only time I have brought them out for dinner, but I was determined to bring them somewhere really fancy that time because my Dad's turning 55 that month, and I just realised a tidy profit of around $30K :) I 

The rest of the stuff is mainly a replacement of their predecessors. I opted for the best quality I can see myself buying, which is, one of the best decisions I have made. They feel and work much better as such that I see them as an alternative investment to improve the quality of life and my productivity while reducing clutter and hopefully expenses in the long term. 

I'm expecting the phone to last for 5 years and the iPad to last for 7 years (as per their predecessors), while the chair, mattress, and speaker are expected to last for at least another 15 years.

I also signed up for FRM course that cost over 6k, because it was relevant to my field of work and there is a 90% reimbursement once I passed the exams, which is a good motivation for me to study. Took a bridging course that amounts to around 1K, and enrolled in a Diploma in Business Analytics that is expected to set me back for around 3K because I was offered a grant and I supposed an additional qualification to look nice on paper will add to my advantage since there isn't any Ivy League degree on my resume.

To be frank, sometimes I do wonder if I'm really spending too much money that could have been put to better use, i.e. work harder to get more investment returns through compounding magic. 

One way I could reason out is that I have set aside one-year emergency funds for the whole family, have no debt, and my net worth is still increasing through my full-time job, side hustle, investment, and speculation (Dogecoin anyone?), thus it's OK to enjoy those luxuries and improve the quality of life

Another way to look at it is to think about how I would plan my time and finance:

1. if I were to die tomorrow
2. if I were to live till 120 years.

Keeping these polar opposites in mind have allowed me to YOLO responsibly ;) by giving myself permission to indulge the finer things in life while keeping a close eye on the figures and prepping for the long-term financial future.

CPF Strategy

Lately, I have been contemplating (again) whether if I should start accumulating my OA to prepare for future property investment.

The initial plan was to transfer OA to SA and top-up $7,000 yearly to SA till FRS, and let the 4% interest make up for the FRS inflation while I shift the focus to top up MA for tax relief.

However, my decision to transfer OA to SA and topping up my SA for the past few years has been badly frowned upon by my family and friends because of one or at least one of the following reasons:

• They have a more political opinion with lesser faith in the system, 
• They highlight the importance of cash flow in case of emergency,
• They suggest leaving more time-frame for the tax relief from the yearly $7,000 voluntary contribution to the Special account should I foresee myself earning more or working longer years in the future.

Many young couples would also recommend keeping more cash at hand and having the liquidity to utilise OA to build a better love nest.

Too bad that doesn't relate to a BBFA like me XD

I do think that the CPF policies would change over the next 3 decades, but I have more faith that it would evolve into policies that better serve the needs of the citizens. 

Even though I am currently not worried about cash flow, it still sits at the back of my mind that what if we suddenly need the extra $7,000 beyond the emergency fund that was set aside?

Last year was the first year I earned enough to have to pay tax after factoring in all the tax reliefs, and I'm still quite optimistic about my earning power in the future, so halting the OA transfer may be something worthy to consider. 

What's Next?

There are plans to take a career break and further my studies. It may not be an economically sound decision, especially when I'm at the age to work hard and establish my career. 

However, I have always kept in mind the reasons why I am working, and one of them is to save up enough so that I don't have to worry about money at all when I further my education.

I have already applied to some part-time courses in the local uni, and I chose part-time because I'm a night owl who can study better at night, it's much cheaper than full-time courses, and even though I have the idea of taking a break from work to focus on studies and enjoy the student life, I still want to retain the option to take up a full-time job in case any need arises.

But for now, let's see how the application goes :)