First Steps to Early Retirement: Want to retire early? Then get the little things right.

Hi. Everyone, Mr. Minion here.

Sorry for the lack of updates in the last few weeks, as mentioned in one of our previous posts, Mrs. Minion and I went to Tokyo, Japan for a leisure trip. We will be following up with reviews and tips about traveling to Tokyo in our Japan travel review series.

Today’s topic is about getting the little things right. As we take our first step towards early retirement, it is important that we do the little things right. It is not advisable to just focus on the big-ticket items. Why?

Firstly, on certain occasions, getting the little things right have a strong influence on the probability of you getting the big thing right. Here is an example. If you don’t save consistently, how will you have enough capital to take advantage of market corrections? Some of you may suggest leverage, but that is playing with fire. Someone who leverage within their means (which is influenced by the amount of savings he has) and someone who leverage beyond their means reacts very differently during investing and trading.

Secondly, as William H. McRaven once said “”If you can’t do the little things right, you will never do the big things right.” That is rightly so. If you can’t be trusted with the small ticket items, how can you be trusted with big-ticket items? You’re not going to ask someone who can’t even get the numbers on the spreadsheets right to model the valuation of a company, will you?

Last but not least, making money in the markets is more about winning small multiple times, rather than winning big a single time. First of all, in order to win big, you need to put in big money. Not everyone has that kind of money Second of all, it is easier to win small than to win big and obtaining multiple small victories may have a greater effect on your assets as compared to obtaining one big victory. For example, compare someone who aims to make 10% on their money yearly by investing into an index or a basket of stocks for his working life (20 years) to someone who aims to make it rich by making 600% on a single stock. Who makes more money? Of course, it is the person who aims for small victories (1.1)^20 = 6.7x VS 6x on large victory.

So let us all start by getting the little things right.

Until next time then.

Advertisements

First Steps to Early Retirement: You can’t fast forward to retirement and waiting sucks. So this is what you should do.

Hi Everyone! Mr. Minion here.

Everything takes time and that applies to your journey to early retirement. You can’t fast forward to the end and skip parts that you find boring because life is not a movie.

I know that waiting sucks – they say patience is a virtue, but who likes to wait? No one likes to wait. It’s insanely boring. I know, because I have felt this way before.

So what can you do? Suffer in silence? No, there is something that you can do to stop life from being so boring.

What I find helpful is to have many small milestones or goals instead of a few large ones. For example, let’s say you have a goal of having 500k in net assets before you hit 32 (assuming you are 24 right now). This is a goal that will take you 8 long years to achieve. That is a long, long time. What you should do is break it down into several smaller goals – having 100k in net assets by 26, 200k by 28, 300k by 30 and 500k by 32.

While the achievement is the same, it just makes the journey a little be more bearable. It also helps you to keep track of where you are in terms of achieving that ultimate goal. You can also arrange for some small rewards should you achieve each small goals early or on time.

Make your journey to early retirement into a fun game, or else life will be really boring.

Till next time then

 

First Steps to Early Retirement: First you envision, then you act.

Hi. Everyone, Mr. Minion here.

How many of you have encounter this question before? “Where do you see yourself in 10 years’ time?” I think many of you if not all, have encountered this question before. You could have encountered it during your job interviews, from your relatives during Chinese New Year and even during first dates.

Personally, I believe that asking yourself this question is crucial when it comes to the topic of early retirement. We all need to first be able to envision our end-goal before moving towards that goal or else you will get lost along the way.

This is simple logic – yet many of us get it wrong. More often than not, we choose to act first without envisioning a goal in mind. Let me give you an example.

As a fresh graduate who has just entered the working world, I have heard many people (ranging from my mentors to my parents) telling me that being young is your competitive advantage and that you should be utilizing it so you can get “further in life”. In layman terms – you are young and you can work long hours. Go ahead and work long hours so your bosses know that you are committed and hardworking. This way you can get promoted faster and earn more money.

While every word of this statement rings true, it might not be relevant to everyone. It will be relevant to someone whose ultimate goal is to be at the top of his or her field, but will not be relevant for someone who has a more family oriented goal.

What I am trying to say is this: if you have an ultimate goal in mind, it is easier for you to make important decisions, reduce mistakes made and to get to where you want to be in a shorter period of time and with less effort.

Till next time then.

First Steps to Early Retirement: Earning average or below average income looking to retire early? This is how you can level the playing field.

Hi. Everyone! Mr. Minion here.

I think it is pretty safe to say that most people would not want to work until they die. They would like to retire at a certain point of their life, some at the official retirement age, some earlier.

However, this is an increasingly difficult goal today especially in Singapore where the price of everything is increasing while our income remains stagnant. This would not be that much of a problem if all of us started with a high salary base, but that is just impossible. There will be graduates who start off with an average or a below average salary base. This just makes it that much harder for this group of people to retire early.

So after some brainstorming, I came out with a few ways that can be utilized by the average Singaporean to level the playing field. Note that this does not necessarily have to be applied to University graduates – it can be applied to polytechnic graduates as well.

  1. Do not have children. Why? Do you know how much it costs to raise a kid? Just a simple google search shows that raising a kid averages $300,000 SGD a year. (http://www.todayonline.com/business/prepare-cost-raising-child-0). Let us assume that you are a university graduate and earn an average amount per month of $40,000 per annum after CPF. Raising a kid takes up about 7 years of your salary. To put it simply, if you choose not to have kids, you bring forward your retirement by quite a few years.
  2. Do not get a car. Why? There is NO reason for you to get a car in Singapore. Singapore has an extensive public transport system. While I wouldn’t say it is failproof, it gets you from point A to point B. So why get a car? A lower – end car costs about $80-$100k, that’s about 2-3 years of your income gone (using the same assumption as above).
  3. Do not splurge on your wedding. Weddings can be a very expensive event. The average cost of a wedding is about $40k and up. That’s about 1 year of your salary gone down the drain. Imagine working for a year just to pay for a party that lasts for a day. What a joke.
  4. Do not purchase a condo for lodging purposes. HDB flats are more than enough. Why choose to stay in a condo? To be perfectly honest, there is no reason for anyone to choose a condo over an HDB flat. Having too much money doesn’t count as a reason… A condo is easily 2x or 3x the price of an HDB flat and doesn’t give you as much space as an HDB flat. Note: If you are purchasing condos as a form of investment, then it should be fine – assuming you did your due diligence.

There you have it. These are a few strategies that can be employed by the average Singaporean to level the playing field to give them a better shot at early retirement.

Till next time then.

First Steps to Early Retirement: Keep paying for other people’s mistakes and you will never retire early.

Happy Deepavali everyone. Mr. Minion here.

Today we will be discussing a very important issue that is relevant to not only just people seeking early retirement but to the general population as well.

Most of us, at a certain point in our lives, would have paid for someone else’s mistakes. For example, a small case could be loaning a friend or relative a small sum of money while a more serious case could be indulging in your parent or partner’s expensive habit of drinking or gambling – you see where I am going with this.

If you are really keen on retiring early, you SHOULD STOP paying for other people’s mistakes. It doesn’t matter if it is your best friend, relative or even your parents. You are not obligated to pay for their mistakes. That is not your duty as a child, sibling or friend. Imagine how much it will cost you if you indulge in their expensive habits and how much it will push back your goal of early retirement.

Do note that when I talk about “mistakes” I am not purely talking about direct spending on their part. It could be a situation when they are trying to force their opinion on you which would cause you substantial monetary damage in the future.

I can’t stress the importance of this issue and it really doesn’t matter the other party is. Even if the party in question is your parent, you should cut them loose. If they are not being considerate towards your situation, why clean up their mess? We are not living in the olden times whereby a son or daughter has to work all their life to clear their parent’s gambling debt. We are living in a time where respect is reciprocal and not a right that comes with old age.

Till next time then.

Money Saving Tips 101: Looking to bring your significant other on a fun and exciting date without breaking your bank? Here is where you can go.

Hi. Everyone! Mr. Minion here.

Hope everyone is enjoying their Saturday.

Today we will be doing a short introduction and review of a new “dating venue” that we got to know from our friends on Facebook.

This dating venue is an arcade located at Suntec city called Cow Play Cow Moo. Mrs. Minion got into the arcade craze a year back after watching some arcade related vlog channels on YouTube. She then proceeded on to influence me into liking arcade games as well.

After watching those videos, I realized that an arcade could be a fun and affordable place for dating couples. You can cultivate your relationship by playing multiplayer games that require both of you to work together to win. Alternatively, you can also introduce the spirit of friendly competition into your relationship by playing competitive arcade games.

At this point of time, some of you may be thinking that arcades in Singapore are very expensive. However, that is not true. Arcades can be very affordable – especially Cow Play Cow Moo, which we will be reviewing in today’s post.

First of all, it is very important for you to note that unlike what it is shown on Google, this arcade DOES NOT open at 11am. We reached there at 11am and this is what we saw:

IMG_2452

So after an agonizing, half-hour long wait, we finally managed to get into the arcade. Our first impression of this arcade is that it is huge. There is a kaleidoscope of games to choose from, ranging from claw machines to multi-player racing games.  To find out what games they have to offer, please take a look at the pictures below. I believe our pictures are quite comprehensive.

After showing you what they have to offer, let us move on to the COST of playing at the arcade. If you change $20 worth of tokens at one go, they will give you $5 worth of tokens as a bonus. Overall it costs about $0.16 per token. The cost of the game varies from game to game. Some may be as low as 4 tokens while some may be as high as 10 tokens.

And as you all may know, some arcade game machines give out tickets based on your score and these tickets can be used to exchange for prizes. Our first impression of the prize area was that it was insanely awesome. It was HUGE. To find out what prizes they have to offer, please take a look at our video below. [since the video file was too large and we have limited storage space on our blog, we started a YouTube channel, feel free to subscribe! We will be uploading some of our Japan series of travel reviews up there]

In conclusion, we really enjoyed ourselves at this arcade, we even managed to get a few tiny jackpots! We spent about $32 and won around 3000+ tickets!

We will definitely be coming back to this arcade VERY often.

Disclaimer: We are recommending this arcade because we enjoyed it and felt that it was fun and affordable– that’s all. We do not receive money or incentives by writing this post.

Till next time then!

Money Saving Tips 101: The REAL PRICE of flying with budget airlines

Hi. Everyone! Mr. Minion here.

Since we will be starting on our Japan series of travel reviews soon, I thought it would be relevant to write something that is travel related.

Therefore, today’s topic centers around budget carriers. We all know what budget carriers are – those no-frill airlines that simply aims to provide a way for travelers to move from one place to another at a low price, with little to no focus on comfort and experience.

I will not be giving examples of these budget carriers as it is common knowledge.

As we all know, the main selling point of a budget carrier is its price. However, are budget carriers REALLY cheaper than full-service carriers? Even if they are cheaper, is the price different substantial enough to justify a trade in comfort for savings?

These are some of the questions that you should be asking yourself before booking a flight with a budget carrier.

Based on my experience, flying budget is not always cheaper. It may seem cheap to you at first, but after you take in all the extra costs and consider the REAL PRICE of the ticket, it really isn’t that cheap.

So how do you calculate the real price of a budget flight ticket?

Firstly, you need to remember that price of budget ticket normally DOES NOT include check-in luggage. You will need to pay extra for them. That is easily another $30-$50 spent.

Secondly, there are credit card charges should you choose to pay by credit cards. These charges can easily add another $30-40 (per pax) on your ticket price.

Thirdly, meals are not included when you fly budget. This may not seem like a problem when you are flying for a short distance, maybe to KL or to Bangkok. However, imagine flying to Tokyo from Singapore without food. That will not be fun. Some may argue that one can always eat during the transit. That is true, but it also depends on how long your transit time is. Even if you do have time to eat, remember, you still need to pay for the food and the food at the airport is not cheap.

These are three aspects you need to consider when trying to calculate the real price of a budget flight ticket.

Even after considering all these aspects and you find out that the budget flight ticket is cheaper than a full-service flight ticket, then the next question you need to ask is “how much cheaper?” Is it $20 or $200? If it’s $20 cheaper then what’s the point of taking a budget flight? Just pay that $20 and get a better travel experience!

As a rule of thumb, Mrs. Minion and I only choose to take budget airlines if the real price of the ticket is at least 30% or $50 (whichever is higher) cheaper than that of a full-service airline.

That’s all we have for today.

Till next time then!