Tuesday, January 20, 2015

How will the Future You thank you?


Personally, I think this is one of the best advertising campaigns to get people to think about financial planning and their future. Good job NTUC Income, I am sure you got yourself many customers with this campaign!

What sparked me to revive this relatively old campaign that was launched last year is actually a post by Uncle CW8888 about retiring in debt.

Go around and have a serious and practical real-world conversation with friends and ask them, "What are their goals in life?". I am pretty sure "financial freedom" or "financial independence" is bound to pop up, along with retiring early and travelling around the world. We are all special and unique snowflakes right? Hur hur.

I will leave the philosophical musings of how people are the same, yet think that they are different, to the sociologists, psychologists and philosophers. I will just focus on the "financial independence" portion.

I actually wrote a whole huge long page decrying so many "wants" that people mislabel as "needs". But then I realized that my issue isn't about specific things, like owning a condo, a car or burning money going on expensive vacations to use wifi in the hotel room. Overseas wifi more shiok and atas, right? No no, my beef is the inability of most people to differentiate "wants" from "needs".

Do you need a condo? Do you need a car? Do you need a vacation? No.

Would you like a condo? Would you like a car? Would you like a vacation? Yes.

When people confuse "wants" and "needs", they start spending tons of money on these pseudo-needs. They get deep into debt to finance all these "wants" because they are confused and "thought they needed it". It doesn't help that financing all these wants are so easily available. They end up working all their lives to pay off things that they didn't need which they bought with money that they didn't have. Hindsight is 20/20 and many people regret their bad choices.

I was reading somewhere about an old lady complaining about her daughter's education. She spent a few hundred thousand dollars sending her daughter to an overseas university, jeopardizing her retirement and forcing her to work many extra years... and for what? The daughter didn't even appreciate it, she EXPECTED it. To the daughter, it is the minimum that a parent should do for their children, to give them a good education. Screw that. I really pity the naive old lady for being so selfless, kind and loving. Her only mistake she made was confusing what is a "want" and a "need", and for that she will pay dearly with countless years of her elderly life working.

I do not want to make a mistake like that in my life that will cost me years of my freedom to work off.


"Financial independence" isn't being rich and flashy, having a big house, big car and a big lifestyle. You don't need to have tons of money and spend tons of money to be happy.

"Financial independence" is just about having enough to cover your needs, and maybe your wants.

To me, "financial independence" would be to own and live in a fully-paid off home and to have a predictable stream of income to meet my needs (medical, food, transport). And as a sweet bonus, my less predictable investments can surprise me with extra perks from time to time. Then perhaps a nice holiday would be in the cards.

I think happiness comes from managing expectations and reality. I feel that far too many people my age (the main demographic I interact with) are always so deeply affected when reality sets in because they have such high expectations for everything. For their jobs, their relationships, their achievements, their whole life.

My argument is simple: If you live a simple life with simple expectations and make realistic plans to achieve that, you would probably be very satisfied with your life.

When you are older, will the Future You thank you for the choices you made in your life from this point onwards?

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