Never too late to start your FI Journey

Met a colleague from another worksite for breakfast last Thursday. We have not met each other for years already. He contacted me earlier when he learned that my days in the company are numbered. It was a very nice gesture from him which I appreciated greatly.

One of the things that we spoke about was our journey towards FIRE (Financial Independence Retire Early). He started his journey a few years ago, about the same time as me. He is definitely in a much better position than me as he is at least 10 years younger than me. I am very happy for him that he started his journey early.

Both of us reflected on our “FIRE” journey and was very glad that we started it.

We know in the end, we may not achieve FIRE in its purest sense especially in Singapore when the living standard is very high. For instance, I know that I would not be when I am retrenched at the end of this year.

According to a recent study, it was established that a Singapore family would need an income of at least $6400 a month to live respectfully.

If we assume a 3% dividend yield, it would mean that we would need an investment portfolio of $2,400,000 (excluding the house that we stay in) to meet this requirement.

How many people can actually achieve that in our lifetime of working in Singapore?

I am not so I do have to look for a source of active income to supplement after the end of this year.

However, we know that we are in a much better shape financially now versus the case of not starting the journey at all.

At least, we would get a source of steady passive income even when we are out of job. (Hopefully it would not happen to him)

The quantum may not be enough for the whole family but it is definitely better than having none. It will ease some pressure and generate a comforting feeling as I venture to find a second career.

Hence, if you have not started your own FIRE journey – I would advise you to do so.

The younger you start, the higher your chance of success. The rule of compounding interest is very powerful and do use it to your maximum advantage.

Being on a FIRE journey doesn’t mean you have to live miserably and save every cent.

To me, it just means that we have to be conscious of what we spend our money on, watch our debt level and be willing to save and invest before spending.

Yes, we will have to forgo some luxury items and lifestyle but in all honesty, most of us don’t really need them to live a comfortable life. As I shared earlier, we may not reach pure FIRE eventually but it would definitely help our financial position when the unfortunate things happen.

Unlike earlier days, starting a FIRE journey is much easier today.

We can now invest in ETFs with low transaction cost, REITs with high dividend yields and in all major global markets anytime from a click of our “mouse”.

Digital transfer of money has made the whole process a lot more efficient. Gone were the days when we had to settle share transactions by cheque.

Investing in global markets is a breeze and is available on all major financial companies and banks platforms. In the past, unless you are very rich and have access to investment bankers, investing in global markets is only via unit trusts. It is ok except that they charge a very high commission rate that reduces your returns significantly.

Books and websites that provide information on how to do your personal investment are readily available to us to quickly overcome the learning curve. In the past, we have to learn from our own mistakes (ouch and its financially painful!) but today, you can stand on the shoulders of the experienced investors and avoid some of the expensive pitfalls we experienced.

Today’s investors are indeed spoilt for choice. I am not complaining as I too have benefited from these transformations.

If you have not started on your FIRE journey yet, I hope I have convinced you sufficiently to give it a try. No matter what age you are, you can still make it work for you.

If you have any questions that you feel I can help, just drop me a text/comment.

Besides this nice breakfast event with my colleague, the most uplifting moments in the last two weeks must be the solid rally on the major stock markets that I am investing in – Singapore, Hong Kong and USA.

Below are some charts on Hang Seng Index, STI Index and S&P 500 that I screen-captured from Yahoo Finance (thanks!).

The pictures tell a thousand words … so, I don’t think I need to say more. I would share more of my reflections in another blog next week when October closes.

I hope you have benefited from these rallies too. Really glad that October is turning out to be a very good month … like we have discussed earlier

Meanwhile take care and stay safe.

Have a great investment week ahead and may the rallies continue.



S&P 500

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