Going through the process
Wednesday, August 27, 2008

the dates are out. im going to take my license.

3 tests to go.

1st - sept 19 - rumoured to be the hardest and toughest

2nd - sept 25 - was said to be easy feet

3rd - oct 3 - the tedious one.

we shall see how the future shall unfold, but im sure mines right where it should be - my hands

posted by ikaira @ 10:23 PM, ,


Personal Finance
Tuesday, August 26, 2008

Caught this talk about Personal Finance while surfing the web.

This issue has been constantly on my mind - passive income more than active income, finishing the rat race, how to run my own race and finish it my way.

You can catch it at

http://sgmusicwhiz.blogspot.com/2008/07/personal-finance-part-9-parkinsons-law.html

or right below

Personal Finance Part 9 - Parkinson's Law, when "Wants" Become "Needs"

I've recently begun reading more about Personal Finance, thanks in part to Panzer's blog and also my increasing thirst for knowledge about how to become financial independent and to escape the rat race. Interestingly, as I read more and borrow books on personal finance, my desire to break free from the rat race becomes more evident and more pronounced. After all, the idea of financial freedom is to be able to do what you love without being burdened by the idea that you NEED to work. In other words, you can literally fire your boss and live off your passive income until a ripe old age - assuming your lifestyle does not change.

But the crux of this post is that people's lifestyles DO change, and Parkinson's Law is a little known pehnomenon which helps to explain this. The original Parkinson's Law dealt with work and time with the saying: "Work always expands to fill up all available time". This simply means that the less work you have, the more you seem to wrap your time around the amount of work given to you; while if you are given more work, it simply fills up all the time you currently have, making it seem as though you never have any "free" time at work ! This law can also be applied to personal finance by re-phrasing it as such: "Expenses rise to fill up all available income". What this means is that as one gets wealthier, one's lifestyle also changes to accommodate the rise in income, such that one's saving ability is the same as before the increase in income.

This phenomenon is extremely pervasive and prevalent in our Singapore society, and I see this being manifested in many people (friends included) from all walks of life. As one's salary increases (over the years through job hopping, promotions or increments), one also tends to scale up one's lifestyle and spend more. In other words, a person earning S$2K a month has a lifestyle which accommodates his S$2K salary; while a person earning S$8K a month will adjust his lifestyle upwards (more branded goods, more expensive restaurants) such that he will be spending the same proportion of his income (as a %) as the guy earning S$2K (heck, sometimes the proportion is even more !). This makes it very hard for the average person to build wealth because he is consistently and persistently spending away his excess income.

This effect is psychological - many people are of the idea that they "deserve" a better lifestyle since they are now earning more, so why should they "deprive" themselves of the comforts and luxuries of life ? While this argument is sound, many of the youth these days tend to over-indulge in these "pleasures" to the extent that it becomes a NEED for them to have certain luxuries (rather than being just a WANT). When one confuses NEEDS with WANTS, then their spending is apt to go haywire and they will be unable to save enough money for investment or retirement. For example, an iPod is a WANT and an iPhone is a WANT but many young adults these days cannot live without these devices. Similarly, a car is also a WANT for many people (excluding those in sales line or with infirmed elderly or very young children) but many indulge in the almost zero downpayment requirement and get one as soon as they earn a salary.

Hence, this downward spiral will start to occur when one falls victim to Parkinson's Law. I have heard of couples each earning S$6K a month who buy a condo worth S$900K or close to a S$1 million and a car as well. They take out 30-year mortgages and work their butts off to pay their liabilities; not realizing that such leverage is risky in that one small incident (e.g. a layoff or retrenchment) can cause much financial distress. This leads to the saying that "it's not how much you make, it's how much you can keep" which matters. A person can be earning S$10K and saving just S$500 while another earning S$3K could be saving as much as S$1K a month. Some people who earn a lot also may not have safety nets such as insurance and/or passive investments such that should they lose their job, they have zero sources of income to fall back on. With a high liability lifestyle to fund, this would make the situation even more dire. The buzzword these days is "quality of life" which basically translates into spending a lot of your income just to keep up with the Lims and Tans, the way I see it.

So the way to beat Parkinson's Law is to be acutely aware of it and its insidious effects. There is nothing to say you HAVE to scale up your standard (and cost) of living once you start earning more or getting a promotion. If one consciously controls his urge to spend more and instead falls back to his usual routine, then one can still feel happy because most WANTS are fleeting and the pleasure that they give is momentary. For myself, I have been consciously tracking my spending (cash and credit card) monthly over a couple of years to ensure I do not start spending more even though my income has increased over this time period. In addition, I also measure myself against my total net worth (assets minus liabilities) instead of using total income so that I can see a positive relationship over time (increasing net worth). This motivates me to build more wealth by reducing my liabililies gradually and also growing my sources of active and passive income.

posted by ikaira @ 12:18 AM, ,


Prawing
Sunday, August 24, 2008

Im addicted to prawning, i admit.

And if i have too much spare cash, i'll buy up a pond and allow ppl to prawn.

with hot cooked food readily available, and entertainment within grasp.

and of cos, beer and soccer.

posted by ikaira @ 10:33 PM, ,


Exactly 1 mth
Thursday, August 21, 2008

exactly 1 mth into the job, and 2 thirds more to go. on the jobs side, things are going well, gaining my experience and extra line in the resume.

on the social side - soccer has increased from just sunday morning to an additional day, tuesday night. woot, soccer is best enjoyed with friends who love the game as much, the passing the tactic and stretagy, simply orgasmic.

posted by ikaira @ 2:30 AM, ,


Dreaming of The Month After The Next
Thursday, August 14, 2008

just came back from meeting my prospective employer. gained quite some insights about wat im getting myself into.

and its friday again!

posted by ikaira @ 9:59 PM, ,


Start on 4/12
Monday, August 11, 2008

Monday blues... im not in the office but can already feel it dawning even thou im in the comfort of my arm chair, waiting for a 2am for a scheduled game of dota, yes! im still into dota, one important de-stress tool to forget and persevere.

i've more or less figured out wat im gonna do after this 3 mths contract.

lets first try summerising the first 3 wks of corporate world.

wk 1 - felt slightly cheated into the job, my agency only said, they need someone whose good with computers, no doubt 95% of my time im seated in front of a com, but never did i think i'll be doing a geek's job - system administrator. but well the pay's gd and benefits are more than welcomed with both arms. and mentioning the resume, woot.

wk 2 - after learning more of less the minimum to fly solo, i realized doing the job dosen really value-add me as a being, whenever my parents ask hows the job, i reply in chinese "i do useless things, its a waste of time, not something i want to do"

wk 3 - i get to know more of my colleugues and seeing some of them, i reaffirm that im a kampong kid, heartlander, backstreet boy, whichever u call it. i love my zup chai peng and wouldnt care less if ppl look at me with tinted eyes when i take off my shoes and "kiao kah" below the computer desk.

its a wonderful job, stable, relax and in safe territories.

but well not my cup of tea especially when im young, minimal commitment, full of drive to fall and try again. i really like the idea of life after this 3 mths and lets hope i can make it.

P.S. Happy bday HHY and Jon, I had a great time except for the bowling shit. ending the 7th frame with 120 pins and a spare, I would have easily cleared 140. wat a great time for system error.

posted by ikaira @ 1:45 AM, ,


its friday once again, marks the weekends coming and sunday, of cos theres sunday... soccer!!!

its 3/12 . 9 more weeks to go. and after 3 wks by a desk bound job, im not quite sure if im suitable, not that i loathe a 3 by 3 cubicle, dun get me wrong, it definetly has its perks like web surfing, air-con etc.. but well i had my share, and its my life to try and find out wat rocks my boat.

had a talk with a 30 yr old collegue, shes 1 yr plus into her marriage and she said this in chinese, the gist is translated into english by yours truly and hopefully true to its meaning "at first we thought it was not enough, so we worked hard and when time goes by, we thought we're better and might be enough, we tried and realized its still not enough"

so the morale of the story is, dun think just do, come wat may, be it hardship or sweet success, everything is an experience, watever that is left is a bonus.

posted by ikaira @ 11:52 PM, ,