If you are here for money, when will you stop?

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If you are here for money, when will you stop?

Post by Wd40 » Sun, 17 Jan 2021 10:08 am

This question is mainly for EP holders here who have been here for a long time and have no chance of getting PR. One of the main reasons we come to Singapore, especially if you are from a 3rd world country, is so that you could accelerate your savings and retire sooner( aka FIRE(Financial independence and Retire early) In my case, I am from India and my networth has hit 1.1m SGD in the 12 years I have been here. From a FIRE calculations standpoint, I could retire now in India although I am just 41.

So now, my engagement levels at workplace too have reduced, I lack interest of doing any work. Would just like to keep slacking. If I had PR and could buy a house and live in Singapore for a longer time, that would have motivated me to continue working harder and accumulate more. But without PR, I dont see much purpose now. Our lifestyle is very frugal and we dont get any kind of excitement is trying to upgrade our lifestyle and we dont want to do it in a place where we are living temporarily.

So my main question is would stop after you hit a particular networth level? Or you just continue toiling away?

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Re: If you are here for money, when will you stop?

Post by malcontent » Sun, 17 Jan 2021 11:13 am

I used to think that way, once my target is reached, just exit the rat race and retire early. The problem is... what then? You need to fill your time with “something” or you will waste away. If you’ve got something back in India that you are passionate about, then maybe... but I would look before you leap - test the idea, make sure it is a viable activity that is sustainable in the long run.

The other thing you might look out for is other job opportunities, maybe you are just stuck in a rut and need a new challenge. Just bear in mind that major career changes are harder in your 40’s than 30’s. I did a major switch around age 41 and it was the most difficult by far, really struggled for a while, but it worked out in the end.

For me, my 40’s have been the most fruitful time in my life in terms of growing my net worth - at least three times what I accumulated in my 20’s & 30’s combined. Part of it is the power of compounding, not only investments but also salary increments. Another part of it is home ownership during historically low interest rates - more than I could normally afford. Fortunately rates have stayed low or my wife would need to kick in something from her side!

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Re: If you are here for money, when will you stop?

Post by Wd40 » Sun, 17 Jan 2021 12:23 pm

Thanks malcontent. I have been going with the flow till now. I could just continue for another 2 or 3 years as my EP has been renewed for 3 years last month. My experience with Singapore workplaces has been horrible. People in Singapore workplaces are either always firefighting or they are just working for over ambitious managers who just want their next promotion and use their staff to get their KPIs achieved rather than have useful work life balance. It just feels like everyone is out there is a race.

So I don't want to change my job in Singapore, my workplace is less horrible than some other workplaces out there. So I could continue working another 3 years or until I cannot take it any longer and meanwhile my networth gains some more and then I have a bigger margin of error.

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Re: If you are here for money, when will you stop?

Post by the observer » Sun, 17 Jan 2021 2:42 pm

Home is ideally where you can nurture your child to its fullest.

I can’t speak for International Schools in Singapore. I think most are profit driven. Neither can I speak for schools in India.

So, I think you ought to keep looking.

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Re: If you are here for money, when will you stop?

Post by malcontent » Mon, 18 Jan 2021 10:37 am

If you want to check whether you have enough to retire, Chris Hogan put out this retirement IQ tool. Normally I don’t bother with these tools because I’ve done my spreadsheets... but this one is interesting and quick. After looking at this, I may need a little more than expected.

https://www.chrishogan360.com/riq-tool

It asks for an email at the beginning, but you don’t need to verify it - anything will do. Only takes about 30 seconds to get the result, you can then change things and try it again.

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Re: If you are here for money, when will you stop?

Post by Max Headroom » Mon, 18 Jan 2021 10:59 am

Why one or the other? Why not a bit of both? I intend to ease back by 70% by the time I consider myself done work-wise, but will continue to stay active by working, say a couple of hours a day.

This way you kill 3 birds with the 1 stone:

1. You stay active so your brain doesn't wilt. (Use it or lose it).
2. You continue to feel fulfilled, rather than just stoning all day every day. (Sian mah)
3. You get to top up a bit of extra dosh.

The best part is that I 'll consider the work more or less optional, so it's pretty much stress-free.

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Re: If you are here for money, when will you stop?

Post by malcontent » Mon, 18 Jan 2021 11:33 am

Fully agree, it’s better to aim for FIQR (quasi-retire) rather than FIRE.

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Re: If you are here for money, when will you stop?

Post by Wd40 » Mon, 18 Jan 2021 12:17 pm

Max Headroom wrote:Why one or the other? Why not a bit of both? I intend to ease back by 70% by the time I consider myself done work-wise, but will continue to stay active by working, say a couple of hours a day.

This way you kill 3 birds with the 1 stone:

1. You stay active so your brain doesn't wilt. (Use it or lose it).
2. You continue to feel fulfilled, rather than just stoning all day every day. (Sian mah)
3. You get to top up a bit of extra dosh.

The best part is that I 'll consider the work more or less optional, so it's pretty much stress-free.
I agree, but you can't do this in Singapore on a EP. So I will have to leave Singapore and go back to India, take a sabbatical. Who knows maybe I will get bored and want to get back to work again. I will easily find something to do for a lower salary and lower stress.

My question was mainly about living in Singapore on an EP.

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Re: If you are here for money, when will you stop?

Post by Wd40 » Mon, 18 Jan 2021 12:22 pm

malcontent wrote:If you want to check whether you have enough to retire, Chris Hogan put out this retirement IQ tool. Normally I don’t bother with these tools because I’ve done my spreadsheets... but this one is interesting and quick. After looking at this, I may need a little more than expected.

https://www.chrishogan360.com/riq-tool

It asks for an email at the beginning, but you don’t need to verify it - anything will do. Only takes about 30 seconds to get the result, you can then change things and try it again.
It didn't ask me for an email. I filled this
Annual salary:100k
Monthly expenses if I have to retire in India: 2k

Current networth: 1m

Not sure whether it is telling me that I need to accumulate another 470k? It didn't ask me my age, which I think is a big factor.
Image

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Re: If you are here for money, when will you stop?

Post by Max Headroom » Mon, 18 Jan 2021 12:43 pm

WD, I reckon you'll probably find there's a handy link conveniently placed there about their investment fund or some such. I.e. they'll be inclined to underrate your nest egg.

That said, I used to think 1M would be enough, but frankly, I wonder now, given infinity QE, negative interest rates, yield curve control and all the other Magic Money Tree developments these days. Not to mention imminent (hyper?)inflation.

Whilst 2k a month should be comfy and will likely get you far, I myself am aiming a little higher, particularly since accruing savings is quite doable here and also in view of the typically higher inflation rates in EM, which is where I tend to be by then.

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Re: If you are here for money, when will you stop?

Post by Wd40 » Mon, 18 Jan 2021 2:00 pm

Max Headroom wrote:WD, I reckon you'll probably find there's a handy link conveniently placed there about their investment fund or some such. I.e. they'll be inclined to underrate your nest egg.

That said, I used to think 1M would be enough, but frankly, I wonder now, given infinity QE, negative interest rates, yield curve control and all the other Magic Money Tree developments these days. Not to mention imminent (hyper?)inflation.

Whilst 2k a month should be comfy and will likely get you far, I myself am aiming a little higher, particularly since accruing savings is quite doable here and also in view of the typically higher inflation rates in EM, which is where I tend to be by then.
Thanks. 1m divided by 24k is 41. That is assuming I am able to generate returns that matches inflation, my networth will last 41 years.

Typically with good financial planning and diversified asset allocation we are expected to beat inflation.

So I believe there is a lot of cushion already in my networth given how frugal we are. When I say 2k in monthly expense, it is actually 2k with generous allowance for an annual local vacation in India.

I could continue working another 3 years and grow my networth by another 300-400k, if things are bearable.

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Re: If you are here for money, when will you stop?

Post by malcontent » Mon, 18 Jan 2021 2:03 pm

Wd40 wrote:
Mon, 18 Jan 2021 12:22 pm
It didn't ask me for an email. I filled this
Annual salary:100k
Monthly expenses if I have to retire in India: 2k

Current networth: 1m

Not sure whether it is telling me that I need to accumulate another 470k? It didn't ask me my age, which I think is a big factor.

Sent from my Redmi 10X using Tapatalk
Instead of age, they ask how many years until you plan to retire. The $470k is the estimate of how much you need to sustain $2k/month at a 5% withdrawal rate... $1m exceeds that by more than twofold. So yes, you have plenty to retire. If you change your income needs to say $5k/mo, you should see a different outcome.

Note that the 5% withdrawal rate assumes a well managed portfolio of stocks/bonds. It would also require using the “target percentage adjustment” method to protect portfolio from exhaustion during downturns. But since you have twice what is needed, you could simply take a more conservative 2.5% withdrawal rate and add inflation each year - even during downturns, you should be fine.

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Re: If you are here for money, when will you stop?

Post by Wd40 » Mon, 18 Jan 2021 2:06 pm

malcontent wrote:
Wd40 wrote:
Mon, 18 Jan 2021 12:22 pm
It didn't ask me for an email. I filled this
Annual salary:100k
Monthly expenses if I have to retire in India: 2k

Current networth: 1m

Not sure whether it is telling me that I need to accumulate another 470k? It didn't ask me my age, which I think is a big factor.

Sent from my Redmi 10X using Tapatalk
Instead of age, they ask how many years until you plan to retire. The $470k is the estimate of how much you need to sustain $2k/month at a 5% withdrawal rate... $1m exceeds that by more than twofold. So yes, you have plenty to retire. If you change your income needs to say $5k/mo, you should see a different outcome.

Note that the 5% withdrawal rate assumes a well managed portfolio of stocks/bonds. It would also require using the “target percentage adjustment” method to protect portfolio from exhaustion during downturns. But since you have twice what is needed, you could simply take a more conservative 2.5% withdrawal rate and add inflation each year - even during downturns, you should be fine.
Thanks. The whole thing finally boils down to whether we can beat inflation or not. Outcomes vary depending on how disciplined we are with our investments and not making stupid mistakes like timing the market.

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Re: If you are here for money, when will you stop?

Post by malcontent » Mon, 18 Jan 2021 2:28 pm

I would never be able to retire on $2k/mo, that won’t even cover our vacation budget... plus we still have to put two kids through college, that isn’t going to be cheap.

Therefore, I’ve pretty much given up on the idea of retiring early - which is not a bad thing, at least I’ll have something to do.

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Re: If you are here for money, when will you stop?

Post by Max Headroom » Mon, 18 Jan 2021 4:21 pm

Meanwhile, a disclaimer applies to this entire thread, given the upcoming Great Reset.

:-)

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