Expensive Looking Bed

How To Save On Big Ticket Purchases

It is ironic for a finance blog to write about spending money when it is supposed to preach about saving and growing money. Recently, I had a friend who just purchased a bed for SGD$7000. This IS a lot of money for a bed. Personally, I think it is a good purchase because we will spend a good 30% of our lives on a bed. I believe it is a great investment.

Expensive Looking Bed

Expensive Looking Bed: Obviously not this bed.

For those who wishes to read about how I spend my money, you can read one of my best article: The Ultimate 4 Quadrants Shopping Guide Especially If You Are 28 and Older.

In my research, I present to you one way to save money on big ticket purchases.

Disclaimer: This is not a sponsored post. All information accurate on 7 Jan 2021. If you feel the information has been helpful, I have referral bonus for Citibank.

 

Big Ticket Purchases

To clarify what big ticket purchases in this context, these are items that are often necessary but expensive. We are looking at a couple of categories such as the following.

Furniture: Bed, sofa, chairs, tables etc

Home appliances: Oven, fridge, standing lights, TV, fans, air-con etc

Work/Electronic appliances: Laptop, headset, smartphone etc

Travel: Air ticket

These items typically ranges from hundreds of dollars to thousand of dollars. They are usually pre-planned (why would you buy a sofa suddenly?). The most common would be laptop and smartphone. After doing a survey, I realised there is a trend to change them every (approx) 3 years. Because of the predictability and the large amount, we can make use of one tool in the market to help us.

Cashback on credit cards. 

Those who have been following me for a while know that (1) I’m a cashback person and not a miles person, (2) I don’t really like the concept of credit cards in my journey of wealth management. However, if the credit cards can be used for one off purchases such as the above. I think it is well worth it. I hope these 3 credit cards can help you. Once again, this is not a sponsored post.

 

#1: Citi Cash Back+

I will be straightforward. The one thing that attracted me to this card is the generous cashback.

  1. 1.6% Cashback for on all your spend
  2. No minimum spend required & no cap on cash back earned
  3. Get 4.5% cash back on up to S$5,000 spend (up to S$225 cash back) in the first 3 months.

This means that if I have a predictable spending of at least $5000 coming up. I get a 4.5% cashback on this card.

If you think this is good for you, I would appreciate if you can use my referral link: My Referral Link.

Please check out the T&C on the website for more details.

Citibank Cashback Plus

Citibank Cashback Plus

 

#2: Amex True Cashback

Amex is one company whose customer service seems to be on the highest level. Although I have never used their services, I do hear raving reviews from them.

  1. 1.5% Cashback on all purchases
  2. No minimum spend required & no cap on cash back earned
  3. 3% Cashback on up to S$5,000 spend in the first 6 months.

I rank this number #2 because of the lower cashback amount and also AMEX may not be accepted in some places in Singapore.

Please check out the T&C on the website for more details.

American Express True Cashback Card

American Express True Cashback Card

 

#3: HSBC Advance

HSBC comes in number 3 due to the conditions needed for the cashback.

  1. Up to 3.5% cashback
  2. Limited privileges with Entertainer.
HSBC Cashback

HSBC Cashback

HSBC Advance Credit Card

HSBC Advance Credit Card

Please check out the T&C on the website for more details.

 

Final Thoughts By Wealthdojo

A credit card is like a double edged sword. Use it well, it will serve you well. Use it badly, it will come one round and hurt you. We wish you the best of luck in 2021. I appreciate your support and thank you if you were to sign up the Citibank card because of this website (there are no obligations). This is my referral link again: My Referral Link.

If you are thinking whether credit cards will be disrupted, you can read my article on bitcoin and whether it is too late to invest in it. .

Till next time.

 

For those of you who want to kick start your Wealth Management journey in 2021, why not consider joining my telegram channel?

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

What 2020 has taught me

What 2020 has taught me?

As we reach the end of 2020, we should all give a pat on the back to ourselves for getting through it. It’s been a year of change to the way we work, hang out and even the way we live. Even though 2020 is coming to an end, we know that things are not going to be changing much at the strike of 12am on 1 Jan 2021. 2021 will be the year we are all still adjusting to the new normal. 2020 has taught me many things as we all slow down and start to realize what really matters in our life.

Today, I invited a young Singaporean blogger with a 9 to 5 job, Shan to share more on her thoughts about 2020 with regards to wealth management, family, work and everything else. Thank you Shan for your contributions. Happy reading!

What 2020 has taught me

What 2020 has taught me

Family

My family definitely has spend a lot more time together in 2020. With my brother coming back from UK in March 2020 due to the pandemic, we have been spending more time together. Without travelling this year, we have managed to save a little more but have been spending it after circuit breaker as we are out for nicer meals once in awhile.

On the other hand, my mum has been cooking more often with on weekdays. She has also started new hobbies like gardening to help her pass time at home. I realised that just the simple evening talks and walks make me so happy on a daily basis. As my brother will be going back to study overseas in 2021, I definitely will miss the time we spent together since March 2020 when he came back.

 

Work

Work has been a huge learning journey due to the restructure in our roles and also expansion of duties. I am happy to be able to learn more after the restructure but the main thing is that people in the team has been leaving and the workload is getting heavier. This makes the remaining team members having to shoulder the work and it is not easy.

On the other hand, I am glad that my contract got extended, even though I was not offered a permanent, full-time role but a small increment was given so I am grateful for that. 2020 has been a really tough year for fresh graduates, from job searching to entering a role with a lower starting pay, no one wants to have it this way when they graduate. Wealthdojo has an article outlining the 3 Money Beliefs That Will Destroy Your Life with one of it being “If you work harder, you’ll be able to earn more”

💡
“If you work harder, you’ll be able to earn more” is really something to ponder upon, there are many people who are willing to work hard and long but does it guarantee them the equal rewards as the effort they have put in? Not necessary and this is why it is important to look out for trends and to know your strengths to put them to good use at the right areas. Working smart is also very important.

The future of work looks to be very different as digitalization, data and technology looks poised to be the future. Even work in my department seems to be going towards digitalization for technology to do it and once done, no human touch will be needed as it can be done by a robot and data easily tracked. It is as though the future jobs will be taken over by technology as I can see the shift towards that and jobs that will be still be in demand will definitely be those maintaining the technology.

With a shift of jobs being automated, it sets me thinking on whether will I be replaced eventually, judging by the large administrative stuff that I do currently, I can see my job being automated in the near future considering that the pandemic has increased the pace of it. I wasn’t imagining this outlook when I started work as everyone was still thinking about automation but the pandemic has really gotten everyone to hasten the speed of digitalization.

 

Finances and Portfolio

2020 taught me that investing is really volatile but rewarding if you stay invested and invest in companies that you have done sufficient research. No one can predict the markets and this was so evidently shown this year. Many expected 2020 to be a bad year for the markets but if you were investing consistently in 2020, almost all assets are in the green. Particularly US stocks and also cryptocurrencies where Bitcoin recently crossed the US$23,000 mark as more institutions put money into it. 2020 has pushed my portfolio into the the green for the first time as I enter the US market, buying VT, VOO, Tesla and LMND which are all currently in the green. I have managed to save much more and has really made me a few steps closer to my financial goals.

Read more: Ending 2020 with a $30,000 portfolio and dividends collected revealed! | Tesla stock price crashed like soufflé?

Conclusion

2020 has taught me about resilience and that being financially prepared is important to ensure that in times of crisis, you are not going to be struggling and worrying about your expenses. At the same time, it has revealed to me the vulnerabilities of working for others where you can be made redundant due to the economic conditions or because the company is cutting costs. There really is no iron rice bowl and the only way to secure your future is to keep up-skilling and re-skilling. Your skills will determine your employability. Wishing everyone a Merry Christmas and a Happy New Year as we move into Phase 3 and 2021!

More about SingaporeanTalksMoney

She is in her 20s working in a salaried 9 to 5 job like many other Singaporeans. To her, money is a form of freedom as it will allow her to spend more time with her family and also to do things that she likes. As she embarks on her journey towards financial independence, she hopes to document it down and share her journey with everyone particularly for herself as well to reflect on it.

Find out more about her: SingaporeanTalksMoney

 

Final Thoughts By Wealthdojo

I’m a big fan of reflections. One of my favourite quote comes from John C Maxwell.

It is said that a wise person learns from his mistakes. A wiser one learns from other’s mistake. But the wisest person of all learns from other’s success.

I’m on a mission to collect mistakes and success from various gurus and financial bloggers in Singapore. Let’s all learn from each other’s mistakes and successes and be the wisest one of them all.

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

The 4 Quadrants of Spending

The Ultimate 4 Quadrants Shopping Guide Especially If You Are 28 and Older

It is getting easier to buy things now. With Shopee, Lazada, Taobao working their magic with their 9.9, 10.10, 11.11, 12.12 sales, consumers like you and me are finding it hard to resist buying. You are not alone in this. Shopee, Lazada, Taobao’s amazing algorithm makes sure that they show us things that are of interest to us and will keep reminding us until we press “add to cart” to achieve our happiness (or end our misery). It is only at the end of the month that we log into our Ibanking account to see that we have already spend over hundreds or thousands of dollars shopping.

 

First thing first

This is not a post to advocate not spending. I believe expenditures are important and necessary to our productive and creative self. It will be quite lame to live a life saving every single cent and not enjoying the joys of the world. Thousand of blogs out there are advocating on “saving money on the Starbucks” or “stop buying the avocado toast”. While it certainly makes financial sense, it is also certain that it will be a miserable life. Let me give you a real life example.

When I was 24, just graduated from University. I was poor and was determined to save every single cent. In the months to come, I only ate at the mixed vegetable rice stall at hawker centers. It costed me $2.90 when I bought a combination of 2 vegetables and 1 meat. I also refused to buy coffee/tea. This saved me a lot of money but I assured you that I was not looking forward for my meals at all. Financially, it make sense. Psychologically, it took a toll. I change a lot after that and you can read more here.

My suggestion in this ultimate shopping guide aims to help you find a balance financially and psychologically. That being said, saving money and investing them is the cheapest way to become financially free.

 

The 4 Quadrants of Spending

After sharing about personal finance for over 8 years, I realised 99% of what you buy will fall into the 4 Quadrants. I will sharing real examples and also for those of you who needs rule of thumbs, I will be glad to provide that for you.

The 4 Quadrants of Spending

The 4 Quadrants of Spending

 

The Cheap and Useful

The cheap and useful is the most straight forward of all. Just buy it. This is because it is going to help you with your pursuit of growth and it is also affordable. An example of cheap and useful will be like a book. A book increases your knowledge in the subject matter. You may get more insights after reading a book. You can even read it again and still get insights for it. I buy books almost on a monthly basis and I can feel myself growing in knowledge. (Sidenote: I’m in the process of getting a affiliate program with bookdepository. I strongly believe in daily learning and hope you can do the same too). In this quadrant, it is your cheapest opportunity to succeed. Previously, I wrote about 3 books to read during COVID-19. I’m probably going to update that soon.

 

The Expensive and Useful

There will be times when the product or services is expensive. However, my advice is invest and buy it. This is because these product or services will probably allow you to be more productive and more effective. Some examples of the expensive and useful are an IPad, a good handphone, a good powered laptop (especially if you are doing video editing) or standing desk. These will increase your productivity on a daily basis. The last thing we want is to create a bad experience when you hustle. Some other products or services includes a gym membership, a coaching or investment class.

4 years back in an feeble attempt to save money. I settled on a Xiaomi 3 phone. The specs were okay and I got it because it was cheap. The phone started to lag after 6 months. It was such a pain finding information on a phone. On one fateful day, my hands slipped and the Xiaomi 3 came crashing down on the floor. When I picked it up, the phone screen was already died. The phone refused to reboot and I spend the next day and a half buying a new phone and transferring all my data to the next phone. I probably missed out a day of text. As a self employed helping clients, the worse thing that can happen is to suddenly become uncontactable. I bought Huawei’s flagship P10 Plus after that and never looked back.

Invest when you need to.

 

The Not Useful (Be it cheap or expensive)

The expensive and the not useful will usually fall into the luxury market space. I once knew a lady who spend $800+ on a pair of slippers. She has worn it once before and she stopped wearing it because she’s afraid the slippers will be exposed to the rain. For those of you who are curious, this is the slipper.

The Ultimate 4 Quadrants Shopping Guide Especially If You Are 28 and Older Expensive and Not Useful

The Ultimate 4 Quadrants Shopping Guide Especially If You Are 28 and Older Expensive and Not Useful

On the other side of the quadrants are the cheap and the not useful. While it seems harmless due to the same quantum, the accumulation of these products will add up. Examples of these are like a low quality shirt (you know you can feel it).

I once when to taobao to buy a pair of jeans. The jeans cost only $5 and I felt that it was “useful” for me. When it arrived, the cutting was terrible and there was this weird smell on it. After wearing it for one time, it went even more out of shape and my pocket had a hole in them. I threw it away and swear by Uniqlo now.

A very general rule for those in the not useful quadrant is to not buy it.

However, like all things in life, you can be flexible. If the part of Hermes Slippers is essential for your happiness (or for whatever reason logical or not), consider buying a second hand one. The second hand market is a big one. You probably will save lots just buying on a second hand market. The best part is that no one will ever know that you got it second handed! Hang on for another tip coming below.

 

Disclaimer: Useful or Not

One of the most common question my client ask me is “How do we know if this is useful?”

The fact remains that the usefulness of the item is subjective and highly dependent of oneself. For example, the gym membership is expensive and “useful” ONLY if you go to the gym and workout at the gym. Otherwise, it is not useful at all. To help you further if you are unsure if the product or services is useful or not, I have created this rule of thumb for you to consider.

If you are NOT SURE that the item is useful, and it cost > 15% of your monthly income, then don’t buy it.

If you are KNOW that the item is NOT USEFUL BUT you know you will feel happy, and if it is > 5% of your monthly income, then don’t buy it. If you still want to buy it, consider a 2nd hand version.

 

Final Thoughts By Wealthdojo

Hopefully, this guide can help you make better decision in your next shopping session. Be it Cyber Monday, Single’s Day, Boxing Day, you will be prepared. Wishing the best in your financial journey.

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

Parents Alert Your Secondary School Pocket Money Guide Summary

Parents Alert: Your Secondary School Pocket Money Guide

Dear Parents and Children,

Congratulations for making through your PSLE. It is time for fun, leisure and also putting the Singaporediscovers vouchers to use. But save this link because you will be needing it next year when your children start their secondary school.

 

Your Secondary School Pocket Money Guide

Your child is 12, capable of making good decision (although sometimes you might disagree) and entering into their next phase of their lives. It will be an exciting journey for them. As parents, one of the best things you can do is to prepare adequately for them financially (This is what you can do to help yourself: 6 Levels Wealth Karate). The day to day cost of studying in primary school and secondary school are very different. In this article, I hope to give a guide on how much pocket money to give your children.

A big thank you to Josarah, Vivien, Yitong, HongMing, Xueting, Alcina and many others who helped made this article possible.

 

Our Secondary School Journey

Although time and cost may have change, the main structure of secondary school education remains the same. I remember those mornings where I flew out of bed in fright because my mom used to shout from the kitchen

“还不起来?!730了!“。(Are you sure you don’t want to wake up? It is already 730am)

730am is the timing I have to reach/report to school. Otherwise, there will be detention, writing 1000x of “I will not be late” and I absolutely hated that. Every morning, I jolted out of bed only to find out it was only 615am. Strangely, this worked for me even though I knew my mom was calling bluff. Recess break around 1030am and also lunch break at around 130pm. I had band practice in the noon only to go home around 5pm every day. My Saturdays were also filled up by band practice. We usually had lunch at 12pm and finish about 4pm to go home.

Coming from a humble family, Saturday lunch wasn’t exciting as I couldn’t afford anything more than a mixed vegetable rice with 2 vegetable and 1 meat. I watched in envy (sometimes sadness) as some of my friends ate at MacDonald or drink bubble tea. Hence, I was determined to have a good relationship with money so that life will be better.

In any case, here is the ultimate secondary school pocket money guide for your planning in 2021.

 

Ultimate Secondary School Pocket Money Guide

Food

We are talking about growing children here. We eat and we eat a lot during this age. After getting some data from some of my friends who are teachers, these are what they have shared with me.

Recess: From $1.80 to $4

Lunch: From $3 to $10 (In secondary school, the duration are longer and sometimes students might want to eat outside school. The cost of lunch will increase if they order from food court/starbucks/KFC etc)

As this is the most important expenditure (at least in my opinion) for students, there are financial assistance scheme which you can take advantage of. Please ask your teachers for more information as I’m unable to find more on the web. Here are some references from Pei Cai Secondary and also the MOE Press Release. From those website, those eligible students in secondary schools will receive subsidies of $2.90 per meal.

Parents Alert Your Secondary School Pocket Money Guide Food

Parents Alert Your Secondary School Pocket Money Guide Food (Source)

 

Transportation

Depending on the location of the school, your children might need to take the public transport to school. As this is a fairly consistent expenditure, you may want to consider whether a concession pass or which concession pass will make sense.

Parents Alert Your Secondary School Pocket Money Guide Transportation

Parents Alert Your Secondary School Pocket Money Guide Transportation

The cost of transportation may be between $26 to $54 (in the most extreme). If the school is within walking distance, you would have saved on this expenditure.

If you are an adult, this will be applicable for you. Save Money on Transportation Singapore.

 

CCA

Depending on the CCA, the cost will be slightly different. I used to be in the military band and I had to pay the treasurer $2/month (In 2000) as band fee. The $2 was used to pay for printing of our scores, our reeds and the maintenance of our instruments. While it is not a hefty sum of money, it is good to note that your child is paying for this too.

 

Enjoyment/Hobby

When I spoke to my friends who are teachers, 100% of them observed most students will drink bubble tea. I do not have much experience with bubble tea as I was unable to afford in the past. However, I have noticed that bubble tea is one of the things that will give students joy. As adults, we have an occasional good meal as a way to celebrate our hard work. Why not students then?

According to statista, it seems like an average cost of bubble tea cost around $4.

Parents Alert Your Secondary School Pocket Money Guide Enjoyment

Parents Alert Your Secondary School Pocket Money Guide Enjoyment (Source)

Secondly, some of our passion may develop at that age. It could be a card game, a sport, a book or perhaps just an item that they want because of peer pressure. I believe that they are at the age to start learning about personal finance and this is one of the best ways to start.

Let them explore and the lessons will become.

I would suggest starting with $50/month for enjoyment/hobby fund. They can use the opportunity to save the rest to start a good personal finance habit.

 

Final Thoughts By Wealthdojo

This is the summary of secondary school expenses. I strongly encourage parents to start off with giving weekly allowance. This is to encourage them to plan their money wisely. We want to start good habits especially when they are young. We want to avoid them growing up spending majority of their money right after their payday and then live like a monk for the rest of the month. This is a simple way to start.

After they matured, you can consider giving them monthly allowance. I would also advice not to give the bare minimum as it will create a scarcity mindset in your children. I would suggest this is a great chance to share with them about these concepts which I have written an article about.

Parents Alert Your Secondary School Pocket Money Guide Summary

Parents Alert Your Secondary School Pocket Money Guide Summary

We wish you all the best! Take care and stay safe. Let me know what you think.

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

The Biggest Personal Finance Problem The Educated Poor Outdated Game Plan

The Biggest Personal Finance Problem: The Educated Poor

We have a problem.

We have a big problem.

We are living in a post war era. Majority of the world are living in peace. Education are not meant for the privileged rich anymore. We have access to knowledge to Universities and Google. Jobs are readily available. We are literally working at home right now. Our system being flushed with money.

According to the World Bank, the 2019 literacy rate is at 86.47% as compared to 66.91% in 1976. Back closer to home, Singapore’s literacy rate stands at 97.34%, with 88.89% of our population having enrolled in tertiary education. It is impressive how far we have become in terms of literacy.

Despite that, CareerBuilder found that 78% of U.S. workers are living paycheck to paycheck. In Singapore, we can only guess the amount of people who is living from paycheck to paycheck as we do not have a statistic on it. Based on an article by HRAsia in 2015, 14% (of Singaporeans) have no savings at all and the most surprising find was the 37% of the top-income bracket is essentially spending everything they earn.

While we are getting more educated, we might be leading into a new generation that will be known as “The Educated Poor“.

To save this generation of the Educated Poor, I have created the 6 Levels Wealth Karate to guide and help them escape misery. Are you one of them?

 

Are You the Educated Poor?

We assume that the more educated we are, the more successful we will be. This was in fact, the mindset that has been ingrained into us by our parents since we were young. Our parents live in a different era. My parents often told me stories of the rich having the privilege of going to school. The rest of them had to help out at home, their family’s businesses or take care of their younger siblings. Some of their siblings who are lucky to have some education went to the workforce and saw how they missed out on promotion because someone else had a “higher qualification”. Therefore, their generation are willing to sacrifice, to eat less, to work overtime to give their children the opportunity of higher education. It is to some of their greatest regret that they did not have a Degree and their greatest pride when their children got their Degrees. Hence, it is of no surprise that the current generation is more educated.

As the current generation becomes more educated, it is less of a signaling effect (You might have studied this in your Economics modules) to the employers anymore. Education is now a necessity and less of a differentiating factor.

Before this article gets too scholarly, I have observed some similarities in the Educated Poor and hope that by identifying them, you can have clarity if you are one of them. If you are, we welcome you to be enlightened.

 

#1: The Great Paper Chase

Much has been said about the pursue of education. If you reading this, you are probably among the 88.89% of Singaporeans who have a tertiary education. If left unplanned by your parents, it will become your first biggest expenditure after University.

With reference to another article on how to be free from the burden of university debt, I graduated in 2013 with a Bachelor (Hons) in Mathematics and Economics in Nanyang Technological University. I cut my University studies short from 4 years to 3.5 years to save on cost. In total, my degree costed $20K. My peers and I have a typical debt of between $20K to $40K after graduating. We will then spend the next 2 to 5 years to clear your University debts.

During the time when you are working, you might have anxious peers who have Masters or taking a Part-Time Masters. Some of you might be job hunting and while waiting, started a Masters to boost your resume. This is known as the great paper chase.

To remain competitive, the first instinct that the Educated Poor have is to get a higher qualification.

Don’t get me wrong. I believe in education and also believe in higher qualification IF it is necessary. For example, I will appreciate my surgeon to be academically competent.

However for most of us, we believe that having a higher qualification will lead to a higher pay. From my peer’s experience, not only the pay increase was insignificant, they are now “too over qualified academically” for their job and to add insult to injury, they are down with a heavier debt to repay in the next 5 years.

The Biggest Personal Finance Problem The Educated Poor Paper Chase

The Biggest Personal Finance Problem The Educated Poor Paper Chase (Source)

Do consider getting higher qualification if it make sense. Here are some examples (not limited to the following) when it make sense.

  • Your qualification is necessary for your career advancement
  • You can only attain the skill set from the Masters
  • It fits your long term goal
  • Networking in your industry

The mindset of an Educated Poor is to “remain competitive” by getting a higher qualification. However, they may suffer the debt consequence IF the qualification does not open the doors for them.

 

#2: The Great Material Chase

Money can buy many things. Our minds are programmed to keep wanting something new, something better, something different. Rachel did a guest post for me that talked about 3 Money Beliefs That Will Destroy Your Life. Let me quote for you my favourite phrase she used. 

It’s funny, though, because our happiness actually comes from the absence of wanting. When we’ve gotten that new [insert material thing here], for a moment we don’t want anything else. But once our mind gets bored, it looks for something else to focus on…

This is just one reason why we want to buy something.

However, I believe this stems deeper. You may have experienced buying something on impulse, used it once or twice and then allowed it to collect dust after that. You are not alone in this. I have many random objects in my house which I bought because I thought it looked cool. It has been sitting on my table coolly after that. Actually, you are really not alone, the whole world is together with you on this. In May 2020, consumer debts hits new record of $14.3 trillion. People are buying things on credit!

The Biggest Personal Finance Problem The Educated Poor Material Chase

The Biggest Personal Finance Problem The Educated Poor Material Chase

People buy things based on emotional needs or wants, and then justify their purchase logically.

A common observation I have noticed is that some people connect their self worth to the things they have. This lead to great material chase. I once known a lady who spent $6,000 on a Channel Boy to show the world (her friends and colleagues) that she is doing well in life. The Channel Boy was bought on credit. She racked up a total more than $10,000 worth of credit card debts, was only servicing the minimum amount every month with her cashflow maxed out. When I found that that Channel Boy had a good resale value, I suggested selling the Channel Boy to improve her financial situation.

“What if her colleagues looked down on me because I’m using an xxx bag? Everyone in office is using a Channel or an LV”.

While I hear her point of view, the response shocked me.

PS: The Channel Boy was just the tip of the iceberg.

I’m observing a world where purchases are made because of the emotional need of significance. We have money. Men buy luxury watches and continental cars (maybe Tesla?) to feel powerful. Women buy branded handbags and expensive wallets to feel important. While the items can be different, you are in a world where buying/owning something makes you feel special. Perhaps, that is the thing that is missing in our generation. In the generation of the Educated Poor, we don’t feel special. We feel like a gear in life. We wake up, we go to school, we graduate, we get a job, we buy a house, we have children, we retire and then we die.

To fill up that void, the Educated Poor embarked on the Great Material Chase.

 

#3: The Outdated Financial Game Plan

Last but not least, the Educated Poor is playing an outdated financial game plan. We are following the game plan of the previous generation. The previous generation ingrained their success game plan into us without know that the game has been changed.

The Biggest Personal Finance Problem The Educated Poor Outdated Game Plan

The Biggest Personal Finance Problem The Educated Poor Outdated Game Plan

Plenty of people in the world are still running on the outdated game plan on the left. This situation has been made worse as the Educated Poor are less likely to seek professional advice (in the context of making investment decisions). It is likely that the Educated Poor will continue to continue running the existing game plan.

A brunch of friends who achieved financially freedom used the updated game plan on the right. The one thing you can do differently is to get educated financially early. You have to be willing to invest in yourself with knowledge and also the right partners/mentors. You will then be less likely to be affected by the Great Paper Chase and the Great Material Chase as you will then have clarity on your game plan towards financial freedom.

Are you following the game plan on the left?

 

Final thoughts by Wealthdojo

I have created the 6 Levels Wealth Karate to give the Educated Poor a fighting chance in this life.

With the Great Paper Chase, The Great Material Chase and also an Outdated Financial Game Plan, they become stuck financially and unable to achieve the results they desire in life even though they may be very hardworking.

If this article resonates with you, if it makes your uncomfortable, it is okay. Although 2020 is ending, your life has just began. Take this opportunity to change. I wish you all the best. Do comment below your thoughts. I would love to hear from you.

 

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at chengkokoh@gmail.com. I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.