Inspiring 26-year-old reader: It’s not important on how much we are given/have. But how we utilize our resources no matter how little, that is far more important.

Earlier this week, I received an email from a reader. This 26-year-old’s story is inspiring, and also led me to contemplate on my own life goals. I sought his permission to share his story here and believe that it would benefit other readers, both long time and new.

Hello Ms Niao, 🙂

I stumbled onto your blog when I was researching ILPs few days ago, after having been proposed the policy. I decided against that ILP, since it does not fit into my long-term goals. I have been reading your (engaging & light-hearted) financial journey from start to current. I’m impressed and inspired by the action steps you took to achieve your financial goals. I do hope you achieve financial freedom by choice.

A little about myself:

1) I turn 26 this year, having graduated last year.
2) I was born with a disability, requiring treatment over the long-term.
3) I’m currently focusing on short-mid term investments towards saving for my future HDB.
4) As of Nov 2017, my current net worth (cash, assets, CPF) total approx $75,000, after taking into account expenses, insurances; and hoping to reach the big 6-figure soon.
5) My financial goals is to be self-sufficient, budget-travel the world and volunteer for needy children (who have so much to teach us about blessed living despite the little they have) in my retirement years.

My relative had instilled in me a habit to be frugal since young. Thus, I saved and invested in myself by improving my knowledge online. My expenses for both food and transport totals about $160 per month. I wasn’t taught to grow wealth – only learning to in 2016.

I had started work right after poly at 21, with savings of about $20,000. I was not earning much, but saved every penny, with the occasional fixed deposit promotions. At 23, I saved enough to fund my university studies, leaving me virtually debtless in 2015. I worked part-time during my studies to form my emergency savings. Other than topping up my SA monthly, I transferred 70% OA to SA. During my studies, I did not know of any other investment opportunities such as STI-ETF or SSB; instead taking up an endowment policy with my extra $25,000. This week, I wanted to kick myself, as I had found out about SSB having started in 2015, which I potentially could have invested in instead, for liquidity and better returns.

Having basic (Accident, Hospital & Whole-life) insurances; I purchased a term retirement policy, to supplement my future retirement. Due to not having not much time, I prefer the “safer and moderate” investment approach, which requires moderate attention for the short-mid term.

I started work right after university in 2016. I’m paid lower than average on my current job. Despite that, I save 38% monthly, less insurance and other expenses. My financial portfolio may experience future difficulties due to inflation in a few years time. Fortunately, I am due for a new job early 2018, with an average salary soon, which will improve my financial outlook.

I heard this somewhere, but it’s really true: “It’s not important on how much we are given/have. But how we utilize our resources no matter how little, that is far more important.” Compounding is one prime example. Money is just a tool to achieve a certain goal. For some, future stability or giving back to society. I do hope to achieve the latter towards needy children one day.

What Miss Niao has to say:

Hello! Thank you very much for contacting me, and sharing your personal story. 

If you do not have enough time to invest (investing takes a lot of time, it’s only been a few months since I started and I can feel the drag already), I believe you can take the approach of the passive investor. Divide your portfolio into ETFs and REITs, and strike a balance between the two and check if they are aligned with your investment goals. Sometimes, we invest because we want to be rich quick, but more often than not, that will create more chances to lose money. Gaining wealth takes time and patience, and of course a little bit of insight will also help. 

Although I believe that you have done the necessary homework to understand if you have been insured enough yourself (since you have a H&S plan and some term, your insurance portfolio is actually more diverse than me, I only have H&S and a term plan), be careful not to over-insure and end up having to pay for more than what you really need. Being frugal, this should be easy for you to evaluate. 

If you’re earning lesser, but still able to save a lot more than what many others out there do even if a higher pay, that is a huge sign that you are on the right path to financial freedom. Every penny matters!

Don’t worry about falling in love – sometimes, being single is also a good thing. You have more time to yourself, and you don’t need to compromise for anyone. It is not easy to be in a relationship, a lot of times you will need to think for someone else because they become a responsibility. If I do not want kids, I would not even choose to get married, because there is really no need to. If you read my blog, you will know Richmond. He is also very single (in 40+s already), but also very rich. 🙂 

The secret to true happiness is not to have everything in the world, but to be contented with what we already have. The constant pursuit to have more will sometimes lead you to do silly things, that would make you poor instead. Of course, money can make you happy by satisfying certain needs/wants, but too much money, as I have seen, doesn’t necessarily equate to happiness. Do you know any rich people who have nothing other than money? They might have even more worries than you and me.

Be appreciative, complain lesser, and live and let live – some principals in my life. 🙂

Please do update me when you hit the 6 figure! We can do a virtual celebration together. ^_^

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After reading about his story, I did some self reflection. I haven’t really been too much an advocate of giving back to society or doing charity, since it somehow contradicts my financial goals and actions. It does not make sense for me to give away money since I am trying to accumulate more wealth so that it can grow as much as possible when the effects of compound interest start kicking in.

I think this correlates a little with upbringing too. Growing up, I understood from very young how it feels like to be poor. We had to look out for ourselves first before being able to provide for others. Kind of hard to help others when you don’t have enough already. I guess it is like a survival instinct instilled in me.

However, what if there are people who need this money more now? It is always a battle within me. Maybe there is a way to strike a balance between the two, but for now, I think I would prefer to leave things be. Only when I truly achieve my financial goals, then perhaps the charitable side of me will emerge. This topic, nonetheless, will be placed on a sticky note at the back of my mind.

Miss Niao xoxo.