F.I.R.E. Singapore Style

[malcontent]

Many of you have probably heard about the FIRE (financial independence, retire early) movement. In the Singapore context, this seems to be an even more compelling proposition for those considering geo-arbitrage (living in lower cost countries to defray the cost of living and speed up time to retirement).

Given that Singapore is a high cost hub, paying off just one HDB during your working years here could generate enough rental income to fully sustain a retirement in a lower cost neighboring country. As a PR/SC buying an HDB, it might make sense to avoid PLH (prime location public housing) units that cannot be rented in full when when you want to retire.

For anyone aged 50 or older, I believe the O-A visa in Thailand is currently the most attractive retirement visa in SE Asia considering the infrastructure, quality/cost of living and proximity to Singapore. It is well established that S$2k per month is sufficient to live comfortably anywhere in Thailand except the absolute central/prime areas of Bangkok.

Working backward from age 50, you could pay off a 30 year mortgage if you started at age 20, or starting at age 25 it would take until 55… which happens to be the earliest age you can start tapping CPF. But following this method could allow you to leave your CPF (and any other investments) untouched - and that could open up higher cost retirement possibilities later on.

One of the wildcards is… if you have kids, you may want to get them through college before doing any of this. That is my current predicament, so any plans for FIRE are on hold until they finish their studies. One big relief will be the day my daughter finishes her studies in local school… it has put a severe cramp in our ability to travel as a family.

What are your thoughts on FIRE? Does rental income fit into your retirement plans?

[PNGMK]

Originally I was going to sell my condo as part of that plan but given that the gahmen has decided to ring fence housing almost completely I think I'll hang onto it for rental returns as part of that. My forecast retirement income at 65 should be close to 25k.

[malcontent]

I also plan to keep our condo unit (unless or until en-bloc)… although it is tempting to ring the cash register and unlock that home equity.

But that is another reason to be comfortable with more equity exposure, property acts as a counterbalance. Just social security and my wife’s CPF will total 10k in future retirement income. Everything else can be in equities.

[jalanjalan]

If FIRE includes working as and when you want to, then we've been doing it since our early 40s. We were able to do so because of a few factors: we bought HDB direct so maxed out the subsidies, we paid it off in 12 years so were debt-free, we live a fairly simple lifestyle, and we didn't happen to have kids.

I'm not really sure what people mean when they talk about FIRE lifestyle, to be honest, I just assumed it was doing what you want to do, how you want to do it, which may include paid work or not. These days I set my own schedule and work if I feel like it (apart from housework, which is mandatory!).

[smoulder]

For me, initially I was quite attracted to the concept of FIRE. Specifically, retiring early because of financial independence seemed cool.

But over time, the more I think about it and the more I read about the experiences of people who did retire early I'm more drawn towards just the FI part. At the moment I'm 43 and the official retirement age is 63 - I believe it will be 67 by the time I'm due for retirement. I'm now leaning towards working right until they say that I cannot work anymore (67 if possible). I enjoy what I do and I'm happy to have it fill most of my week. And it pays money, so that's icing on the cake. The cherry on top would be when I no longer have to work for money - only because I enjoy working. Getting a decent salary would then be the bonus.

I think based on where I am now, I could realistically have financial independence around the age of 55. Working well beyond this age is going to go a long way towards being way more than just crossing the threshold of financial independence.

I'm also preparing a college fund for my daughter - I basically take all the ang pow money she gets, top up my own ang pows every month and invest it in SPY and QQQ in a separate account.

[malcontent]

If FIRE includes working as and when you want to, then we've been doing it since our early 40s. We were able to do so because of a few factors: we bought HDB direct so maxed out the subsidies, we paid it off in 12 years so were debt-free, we live a fairly simple lifestyle, and we didn't happen to have kids.

I'm not really sure what people mean when they talk about FIRE lifestyle, to be honest, I just assumed it was doing what you want to do, how you want to do it, which may include paid work or not. These days I set my own schedule and work if I feel like it (apart from housework, which is mandatory!).

It sounds to me like you’re already living the dream, that is what making smart money moves early on can do.

I’ve still got 18 more years of mortgage and each payment consumes over half of my take home pay… but it’s still better than renting.

[malcontent]

For me, initially I was quite attracted to the concept of FIRE. Specifically, retiring early because of financial independence seemed cool.

But over time, the more I think about it and the more I read about the experiences of people who did retire early I'm more drawn towards just the FI part. At the moment I'm 43 and the official retirement age is 63 - I believe it will be 67 by the time I'm due for retirement. I'm now leaning towards working right until they say that I cannot work anymore (67 if possible). I enjoy what I do and I'm happy to have it fill most of my week. And it pays money, so that's icing on the cake. The cherry on top would be when I no longer have to work for money - only because I enjoy working. Getting a decent salary would then be the bonus.

I think based on where I am now, I could realistically have financial independence around the age of 55. Working well beyond this age is going to go a long way towards being way more than just crossing the threshold of financial independence.

I'm also preparing a college fund for my daughter - I basically take all the ang pow money she gets, top up my own ang pows every month and invest it in SPY and QQQ in a separate account.

If your daughter goes to a local uni, it’s quite affordable as a SG citizen. My kids are US citizens so their ang pows are deposited via Wise into their Schwab (UGMA) accounts and mostly invested in VTI. We don’t have designated college funds, but we’ll superfund 529 plans for them once we move.

[Wd40]

I am naturally suited for FIRE and have been working towards it right from the beginning, basically saving as much as I can. I am naturally frugal. I go to Fairprice for shopping and I see so many brands, I look for the cheapest brand, sometimes, the weights are different, so I pull out my phone calculator to divide the price by the weight to get the unit price, lol. So I have been saving around 50% of my gross salary in Singapore since the last 14 years and I have hit the 1m USD mark in networth this year. This is through just sheer hardwork of savings, not any property boom or stock market boom. It is only recently that I am investing more into the markets to manage my wealth and keep it on par with inflation.

I also have the natural low cost geographical arbitrage option to just go back to India and it is amazing to be back home, among your own people, your own food etc during retirement, no problems of visa etc

The reason why I had to choose FIRE is because, I am a very lazy person, totally lack motivation to learn something and grow in my career. Intellectually I am quite average.I have been extremely lucky to have my current career, inspite of my pretty mediocre skills. All my teammates are 5-10 years younger than me. My manager is 8 years younger than me. After hitting 10 years of experience, I basically stopped counting my experience. There was a point early in my career, when more experience meant I am more valuable, but after I crossed 10 and I am doing the same thing then the experience is no longer valuable, lol.

I am 43 years old now and I have enough to retire early. Now the only reason that keeps me going is that I have been in my current role for like 8 years and everybody knows me respects me and although sometimes I feel quite hassled at work and feel like quitting, I am like if I anyways plan to quit, why should I quit on my own? I would rather wait for them to FIRE me. So I go through these mind games constantly.

Another reason to remain here is my wife and daughter like this place, I would hate to break their life here short on my own. We moved to Singapore without planning, so it was inertia, I got a job opportunity and I moved with the flow. So I would like to leave Singapore also the same way, let nature take its own course( don't know the best way to phrase it), like a layoff or visa rejection or something.

[malcontent]

I am naturally suited for FIRE and have been working towards it right from the beginning, basically saving as much as I can. I am naturally frugal. I go to Fairprice for shopping and I see so many brands, I look for the cheapest brand, sometimes, the weights are different, so I pull out my phone calculator to divide the price by the weight to get the unit price, lol. So I have been saving around 50% of my gross salary in Singapore since the last 14 years and I have hit the 1m USD mark in networth this year. This is through just sheer hardwork of savings, not any property boom or stock market boom. It is only recently that I am investing more into the markets to manage my wealth and keep it on par with inflation.

I also have the natural low cost geographical arbitrage option to just go back to India and it is amazing to be back home, among your own people, your own food etc during retirement, no problems of visa etc

The reason why I had to choose FIRE is because, I am a very lazy person, totally lack motivation to learn something and grow in my career. Intellectually I am quite average.I have been extremely lucky to have my current career, inspite of my pretty mediocre skills. All my teammates are 5-10 years younger than me. My manager is 8 years younger than me. After hitting 10 years of experience, I basically stopped counting my experience. There was a point early in my career, when more experience meant I am more valuable, but after I crossed 10 and I am doing the same thing then the experience is no longer valuable, lol.

I am 43 years old now and I have enough to retire early. Now the only reason that keeps me going is that I have been in my current role for like 8 years and everybody knows me respects me and although sometimes I feel quite hassled at work and feel like quitting, I am like if I anyways plan to quit, why should I quit on my own? I would rather wait for them to FIRE me. So I go through these mind games constantly.

Another reason to remain here is my wife and daughter like this place, I would hate to break their life here short on my own. We moved to Singapore without planning, so it was inertia, I got a job opportunity and I moved with the flow. So I would like to leave Singapore also the same way, let nature take its own course( don't know the best way to phrase it), like a layoff or visa rejection or something.

I can relate… sometimes I feel like I could take or leave my job and don’t care if I get fired, but a layoff would be ideal — with my seniority I’d get the maximum severance pay and it’d be tax free in Singapore. It would be almost 2 years worth of after-tax compensation. I would love to spend some quality time with my friends and family back in the US. I managed to get 3 weeks in June last year, but it’s not enough. But to just up and quit my job when it’s really not difficult or stressful… why would I do that? I’ve also got some more business travel that I’m looking forward to. There is just too much upside and not a lot of downside.

[Wd40]

I can relate… sometimes I feel like I could take or leave my job and don’t care if I get fired, but a layoff would be ideal — with my seniority I’d get the maximum severance pay and it’d be tax free in Singapore. It would be almost 2 years worth of after-tax compensation. I would love to spend some quality time with my friends and family back in the US. I managed to get 3 weeks in June last year, but it’s not enough. But to just up and quit my job when it’s really not difficult or stressful… why would I do that? I’ve also got some more business travel that I’m looking forward to. There is just too much upside and not a lot of downside.

In my case, I just feel the novelty of "I can spend my time however I want" will wear out very soon. Those 2 or 3 weeks vacation we take, were precious time we took away from work and hence we are able to make the most of it. If we quit our job and have all the time in the world, I am pretty sure after sometime, we will find that we are not be able to relate with most the friends circle, because all of them will be busy with work and life.

Apart from the money a big part of our identity and who we are is our jobs. So when that identity is taken away it leaves a vaccuum, and we might notice the difference in behaviour from the same friends. People are going to say "Hey you are so free right, but I have a job to go to, so I cant make it" also people will take us for granted the other way too "Hey why dont you come over and help me do this and this, anyway you are free and you have nothing else to do right?"

When you have a job, you have an easy escape route for everything. I dont spend time with my family because I have a job, it is a different matter, that I may not enjoy spending a lot of time with my family, we all need our personal space. We also bitch about our workplace and all our negativity is directed towards bosses and colleagues. When you dont have a job and spend all time with family, what is going to happen? Most likely more frictions, we start micromanaging more household stuff since now we have free time, empty mind devils workshop.

So I feel, overall this approach of continuing to work until fired, is the best approach for most of us.

[jalanjalan]

If FIRE includes working as and when you want to, then we've been doing it since our early 40s. We were able to do so because of a few factors: we bought HDB direct so maxed out the subsidies, we paid it off in 12 years so were debt-free, we live a fairly simple lifestyle, and we didn't happen to have kids.

I'm not really sure what people mean when they talk about FIRE lifestyle, to be honest, I just assumed it was doing what you want to do, how you want to do it, which may include paid work or not. These days I set my own schedule and work if I feel like it (apart from housework, which is mandatory!).

It sounds to me like you’re already living the dream, that is what making smart money moves early on can do.

I’ve still got 18 more years of mortgage and each payment consumes over half of my take home pay… but it’s still better than renting.

There's always a trade-off, like we'll probably not be getting a new COE at the current crazy prices.
One thing I wish we had done differently - we knew next to nothing about investing, so our returns were meh. We only really took charge of this in our late 40s and now finally seeing some modest progress.

[jalanjalan]

In my case, I just feel the novelty of "I can spend my time however I want" will wear out very soon. Those 2 or 3 weeks vacation we take, were precious time we took away from work and hence we are able to make the most of it. If we quit our job and have all the time in the world, I am pretty sure after sometime, we will find that we are not be able to relate with most the friends circle, because all of them will be busy with work and life.

Apart from the money a big part of our identity and who we are is our jobs. So when that identity is taken away it leaves a vaccuum, and we might notice the difference in behaviour from the same friends. People are going to say "Hey you are so free right, but I have a job to go to, so I cant make it" also people will take us for granted the other way too "Hey why dont you come over and help me do this and this, anyway you are free and you have nothing else to do right?"

When you have a job, you have an easy escape route for everything. I dont spend time with my family because I have a job, it is a different matter, that I may not enjoy spending a lot of time with my family, we all need our personal space. We also bitch about our workplace and all our negativity is directed towards bosses and colleagues. When you dont have a job and spend all time with family, what is going to happen? Most likely more frictions, we start micromanaging more household stuff since now we have free time, empty mind devils workshop.

So I feel, overall this approach of continuing to work until fired, is the best approach for most of us.

I did experience that identity crisis feeling when I stopped working in a field I had been in for over 20 years. It really bothered me for some years as I tried to figure out what to call myself, as my part time projects were all over the place, according to what I felt like doing (eg. from designing a website, to being short order cook at a cafe in Little India, to manning a booth at an education fair, or just doing stuff around the house).

After some time though, this identity crisis feeling just faded away, and now I just think of me as myself, a person with lots of random interests. I do find a routine is helpful, and I still designate some days as "off days" or "MC days" where I just do nothin.

[malcontent]

If FIRE includes working as and when you want to, then we've been doing it since our early 40s. We were able to do so because of a few factors: we bought HDB direct so maxed out the subsidies, we paid it off in 12 years so were debt-free, we live a fairly simple lifestyle, and we didn't happen to have kids.

I'm not really sure what people mean when they talk about FIRE lifestyle, to be honest, I just assumed it was doing what you want to do, how you want to do it, which may include paid work or not. These days I set my own schedule and work if I feel like it (apart from housework, which is mandatory!).

It sounds to me like you’re already living the dream, that is what making smart money moves early on can do.

I’ve still got 18 more years of mortgage and each payment consumes over half of my take home pay… but it’s still better than renting.

There's always a trade-off, like we'll probably not be getting a new COE at the current crazy prices.
One thing I wish we had done differently - we knew next to nothing about investing, so our returns were meh. We only really took charge of this in our late 40s and now finally seeing some modest progress.

I also faltered in the beginning. I moved here shortly after college and quickly adopted a local mindset towards investing — building a portfolio of mostly penny stocks on the local Singapore exchange. It took me a while to realize that it was a losers game, but I didn’t knuckle down and take it seriously until my investments grew more substantial. I then started dedicating serious time and research to it.

Probably the biggest turning point for me was after reading John Bogle’s Little Book of Common Sense Investing. It’s truly a life changing book. After that I slowly sold off everything and reinvested in just a couple of low cost, broadly diversified index ETFs which I still own (and continue to add to) today.

One funny story, I invest under my wife because she is outside the US tax system — one day the broker calls her up and puzzled he says “I see you have two shares” — those are the two ETFs that I have been investing in for around two decades now. Those “two shares” include thousands of different stocks — it is truly all that is needed. There is beauty in simplicity!