$30000 per month crazy rich asians

Is $30,000 Salary a Month Enough?

QNS: Is $30,000 Salary a month enough?

When I ask this question to my clients, the first response I get is: HOW I FIND SUCH A JOB??

Last Sunday, Straits Times published an article titled $30,000 salaries, yet in serious debt (it is an premium article). This started almost an outrage in the Wealth Management and Personal Finance community in Singapore. Most of the comments were related to where to find such a job and probably missed the point of personal finance. Let’s explore the reasons when $30,000 salary a month is not enough?

$30000 per month crazy rich asians

$30000 per month: Crazy Rich Asians: May not with $30,000

Reason #1: You spend more than $30,000 a month

Typically, as we grow in affluence, our purchasing power increase and we tend to spend more to.

Meet John. John is a hardworking young professional. His first salary was $3000/month and he had to live a simple lifestyle. Along the years, John got promoted for his outstanding working performance and ability to show results. His salary gradually increase to $15,000/month. John is now working harder at work and often end work late. He will take a cab home (he used to take the public transport) and order a good meal from a nearby restaurant (he used to cook) to reward himself for the hard work. When he sees something that likes during shopping, he will buy it immediately (he used to ponder if the item is essential)  because he feels that he can afford it and he don’t have much time to shop anyway. He buys his friends meals (he used to go dutch) because he feels he is doing well.

John wakes up one day and was shocked to find out that his bank account balance haven’t been increasing after his promotion and has decreased.

If you spend more than you earn, then you will be in deficit.

 

$30000 per month salary spending more than you make

$30000 per month salary: spending more than you make

 

Reason #2: You acquire more debts that you can handle.

Previously, I wrote about a Quick Ratio that we can use to evaluate whether the company is financially healthy.

“A company CANNOT go bankrupt if it doesn’t have debts” ~Chengkok

I can’t remember who said this before so I’m just going to quote myself until someone prove me wrong. (Haha). During the COVID19 season, we are seeing record number of companies going bankrupt and closing down. Examples are like JC Penny, Hertz and AMC just to name a few. If you look at their financial records, it would be just a matter of them that they will go under.

Similarly, for personal finance, if you take on too much debts than you can handle, your cashflow will be severely impacted.

 

Reason #2.1: Leverage

Reason 2.1 is a compounder for reason 2.

When I was 19 years old, I was scared stiff of the stock market. That was because I had a friend who lost over USD$50,000 in one night in his CFD trade. $50,000 is a huge sum to a 19 year old kid and it scared me silly.

Leverage works like this. You ONLY require a SMALL sum to get a BIGGER exposure. Most people who have limited capital are attracted to this because of the high returns. However, if the stock price goes south, you have to pay for the exposure too. A capital of $10,000 can easily give you an exposure of $200,000. However, if the stock price plunge, you could lose a significant portion of the $200,000 that you DO NOT EVEN HAVE and hence acquire the debts that you don’t want.

“Go big or go home. Typically in investing, people go home” ~Chengkok

$30000 per month salary leverage

$30000 per month salary: Leverage

 

Reason #3: Bad Habits

In The Straits Times article, bad habits or poor financial planning will cause your financial downfall no matter how much you earn. Data from the Monetary Authority of Singapore shows that

  • 34 home owners have asked to stop payment for their loan until December
  • 2100 people have problem paying education and renovation loans
  • 6200 have asked to convert high credit card debt into term loan on lower interest rates

The list goes on. Gambling is also one habit that might cause financial woes. We are often reminded by the National Council on Problem Gambling on not to gamble especially during the Chinese New Year.

 

Conclusion

Some questions that we can ask ourselves in our financial journey.

Income plays just one part in your Wealth Management journey. It is your habits, your mindset and the people that you hang around with that helps you reach the level of financial freedom you want.

 

No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, I hope to nurture genuine relationships with all of my readers.

Check out my most popular blog post in 2020 so far: 5 mistakes people make using their CPF.

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How to have better relationship with money stressed woman

How to have better relationship with money?

We talk about building better relationship, having good wealth management but have we thought of having a better relationship with money (self-care)?

In Singapore, one thing that fly under the radar of the recent politics campaign is the high stress level of working. Do you know almost 100% of Singaporeans are stressed at work? (Source: Human Resource Director).

 

“Almost 100% of Singaporeans are stressed at work”: Survey

How to have better relationship with money stressed woman

How to have better relationship with money: stressed woman

Welcome to the city where the cost of living is high, have expensive healthcare and unaffordable housing. Together with this economic situation after COVID-19, many young people struggle to find their first job after graduation. Though I agree we have our positive side, we must also recognized that these economic-social issues will affect our relationship with money.

 

Why are Singaporeans Stressed at work?

Top causes of stress for single, married and working mothers vary, but all mention personal finance, too much work and personal health.

According to a survey by Jobscentral, being overburdened with financial commitments (29%) is one of the biggest reasons Singaporeans don’t leave a job they hate. 25% cited fear of not being able to find a better job as their reason for not leaving a crappy job. (Source: 3 Big Reasons Why Singapore Employees Are Always Stressed Out!).

While money is not the only reason, it is a common reason for stress.

Relationship With Money Stressed Statistics

Relationship With Money Stressed Statistics

 

Where did this stress stems from?

In my previous article about Self-Care and Wealth Management, I’m grateful to be able to ponder in depth on why people might become narcissist on self-care. It has to do a lot with their beliefs about money and I’m going to summarize it in the chart below.

Your relationship with money will determine your money habits that you have and it will led to the financial circumstances that one will go through and finally happiness.

Relationship with money

Relationship with money

Example #1: You are undeserving of money / reward.

I had a classmate, Karen who scored straight As for her primary school examinations. One year, another classmate shared with us that he just came back from a trip to Australia because he had good results in the last year. Karen decided to tell her parents about it. Her parents told her that if she continued to score straight As, she will be able to go for the trip.

Eventually, Karen had the straight As. But, the trip didn’t happen.

As a child, Karen held a belief that no matter how much effort she puts in, she will not get a reward. Today, Karen is a hardworking individual and put in a lot of effort in her work. Despite her hard work, she was unable to climb the corporate ladder and have mediocre salary. Personally, I feel that she still believes that she’s undeserving (relationship with money), other people are luckier and so passed on several opportunities (habits). This lead to her living a miserable life (financial circumstances)

 

Example #2: Believe that People With Alot of Money is Evil / Money is the root of all evil.

When I was young, I asked my parents why my classmate could go to Europe to travel while we only went Genting. My Mom told me that my classmate’s father was a businessman and he have to spend a lot of time on entertainment. He have to do a lot of “funny/bad things” that as children, we won’t understand at that age. Lots of Taiwanese/Korean dramas also reinforce this belief that you have to ruthless to earn money.

When I grew up, there was a period of time I judged people for earning a lot of money instead of being happy for them. If I learnt that they were earning more money, I felt that they done a lot of “funny/bad” things to achieve their goals.

I felt that earning a lot of money is evil (relationship with money), I would try not to earn over a certain threshold (habit) and that led me to living a normal life (financial circumstances).

 

This is ridiculous.

Your relationship with your money is largely influenced by the money lessons you learned from your primary caregivers and mentors, as you were growing up. While it is on no fault of theirs, we need to identify and be aware of the beliefs you have on money so that we can break out of this trap.

I challenge you to write down a list of your money beliefs. It could be “Money is never enough”, “Investing is risky”, “I need to spend money to feel good” etc. Ask yourself, does this money belief serves you or hinder you. If it hinders you, spend sometime to process why has it been affecting you and make a decision to change the belief.

We wish you good luck and stay safe.

 

No one will care about your money as much as you do.

In Wealth Management, it is important to Pay yourself first. Beware of scams. Before you invest in any company or popular investment opportunity, be sure to do your own due diligence. If you wish to learn more about investment, I hope to nurture genuine relationships with all of my readers. Please feel free to contact me on my Instagram (@chengkokoh) or Facebook Page or my Telegram Channel! Or subscribe to our newsletter now!