Transcription
Hey, good day guys. Welcome back to Sunnyside Singapore.
Now, today's video is uh definitely interesting. As the title suggests, I'll be providing a little insight as to how I was able to retire at 31 years old as a Singaporean living in Singapore. All this while I've been using the term funemployment for the period of unemployment since leaving the force, which isn't wrong. But from the numbers perspective, if I were to live frugally and within my means, then technically I'm able to retire as well. I guess the more popular terms like FIRE, Financial Independence, Retire Early, Lean FIRE, Barista FIRE are suitable as well.
The topic on retirement FIRE movement we talked about in a two-video segment because while I was doing up the script, it got too lengthy to be squeezed into one video as a whole. Today's video, which is the first segment, I'll talk about defining retirement and FIRE movement. I'll talk about my timeline to achieving FIRE, my passive income sources through dividends, capital gains and interest, as well as my expenses, fixed recurring expenses and payable expenses.
The next video, which is the second segment, which I also think is the more important video, will look at my habits and lifestyle that determine how early I was able to achieve FIRE along with other life experiences and traits that guided me in the right direction to achieve my goals. I decided to segment the videos this way because it's very hard to talk about the intangible aspects without understanding the math behind FIRE, which I term as the technical portion. And number two, I want to close off the topic not by looking at the hard numbers but focusing more on the intangible aspect which is basically encoded in us.
The video running in the background will be a random weekend of me gaining more base cardio fitness, checking out some of my favorite ramen places, running some errands, and ending off with a sick bouldering sesh. So, let's roll.
Okay, FIRE means Financial Independence, Retire Early. It's a concept in which people are devoted to saving more and investing well with the goal of retiring early than the society's perceived age of retirement. Retirement looks different for everyone. What is enough for me might not be enough for you, but might be more than enough for someone else. It boils down to how well you make your assets work for you and the larger component, how much and how fast are you draining your funds. The better the system you create to make your assets work for you, the faster you can achieve FIRE. The larger your expenditure, the longer it takes for you to build your retirement nest to retire. You get the idea.
I was the average Singaporean only picking up interests in being financially savvy after returning back to the workforce. Sure, I might be a business graduate and in fact hold a Master's in Business Analytics, but this doesn't mean anything. My study days were too locked in on trying to be as good an athlete as possible while doing decent in school. Then I already had some experience in investing, but by experience I mean knowing how to use the trading app, clicking the buy button and buying the stock. Stuff like stocks fundamentals, market cap, P/E ratio, P/B ratio. I threw them out the window after my finance modules I took in college. And I'm not afraid to admit this level of experience because I'm pretty sure majority of us are just like me.
COVID happened, a few weeks of crash and then an insane bull run in 2020 and 2021. Whatever I invested will turn green. Whatever I traded would be green. Then I was still into investing and buying the few proper stocks like the big tech companies. But started to notice healthcare stocks and many other penny stocks getting fright to the moon. And as experienced as we can be, I chased after the hype. Close friends involved on this journey will remember our late nights because of the time difference with the US market. Scalp trading penny stocks and stocks we haven't even heard of just to get quick gains. With the capital I had, I was making 2 to 3K a night and averaging 20K per month.
Then came 2021 and 2022. Super high inflation, aggressive interest rate hikes, recession fears, inflated market valuations, market tank for days, months, and almost for an entire year. Everyone started seeing bloody red market on a daily. I was holding a sizable chunk of penny useless stocks for scalp trading. I believe my portfolio got toasted more than others. And as the saying goes, Diamond Hands, it ain't a loss if we don't cut it. I ended up having close to $300,000 stuck in the market because I didn't cut losses. And even up to today, a sizable chunk of penny stocks are still deep in the red.
This was the turning point. In a matter of months, most of my monies were stuck in the market. My net worth dropped by so much. I wasn't depressed or anything, but it made me realize how foolish and irresponsible I was. Money that comes easy will go even easier. I had some rainy weather fund in my bank account, a small amount compared to what I still had in the stock market. Then I was even considering throwing that into the market and continue to gamble. Thankfully, I didn't.
Then if you watch my earlier video about why I left the SAF, the idea of leaving the force came around the same time period. I had to restart, click the reset button, and set proper goals. My first goal was a lofty one. By the end of my bond, I wanted to achieve a certain amount of net worth. This amount wasn't a hard rule, but more of a cultural shorthand. It was a popular amount because it was easy to remember and had some historical context in the FIRE family. That amount was $1 million. My second goal was a subset of the first goal: to hold at least two to $300,000 in liquid cash. That second goal will make me comfortable enough and the first goal will make me confident enough to leave the force.
I reached my second goal with $200K liquid cash back in mid-2024. This was after beefing up my net worth in other asset classes which I will further explain later. I then reached my first goal of having $1 million net worth by early to mid-2025. This was excluding my CPF. I was ready.
Apart from reaching the financial goals that I set out halfway in my career, I wouldn't be able to retire if I don't make the money work for me. Here, I'll generally be sharing how I allocated my funds into various asset categories to make me comfortable and confident enough to take the step out of SAF and not have to step into the workforce immediately again. These are just ballpark figures and numbers. 30% into growth products, 45% into dividend stocks, 25% into fixed income and savings accounts.
Then some of y'all will ask me, "Hey bro, you are only 31 years old. How come you only whack 30% into growth stock?" Well, my reply is, "Bro, it's not really about the age, but it's about the end goal and outcome we want to achieve." Sure, the market will always go up in the long term, but why do you also see older folks starting to move their assets from high growth products to products that would have fundamentally lower risk and volatility that generate a steady dividend in their retirement years? I'm sure you know the answer as well. It's not fully because they only have a limited runway left in the game of life, but it is because they want to have a peace of mind when walking on this runway.
So, my goal all along was to attain FIRE. Sure, I can whack everything into the US market and growth stocks, but would I be able to sleep comfortably every night? Would I be able to train effectively as an athlete wannabe for many hours a week without worry? Can I dabble into passion projects and side hustles with a full focus on them? I'm not sure, man. But like I mentioned, with my own allocation, I'm confident and comfortable enough to take a step back, look at the bigger picture, and then dive into something that can potentially catch my interest and take my heart.
The growth products I mentioned look at US stocks, US indexes, quite a fair bit of penny stocks that I've been stuck with and a little bit of crypto as well. Dividend stocks are mostly SG Blue Chips, REITs along with some US stocks as well. Fixed income and savings accounts are mainly liquid cash that include stuff like Standard Chartered Bonus Saver which offers 5.5% on the first $100K if you fulfill the criteria and Choco Finance that offer 4.3% on USD.
Anyway guys, I'm new to this social media space. Whatever influencers put out there as their disclaimer, assume that I said those things, too. But most importantly is to do your own due diligence. If not, I'm trying out something new as well. There are links down below in the description box. If you're new to these platforms and sign up with my links below, you get a sizable welcome reward and I get a referral as well. It's a win-win. You are one step closer to financial independence, and I'm one step closer to kicking off this channel.
As of this video, my assets generate a passive income of slightly more than $3,000 per month. Once again, I share all of these numbers with no intention to show off or boost. There are many other people of higher caliber and capacity that can make their money work even harder for them. And there are many wealthy wheels out there with daddy's money. So, there's nothing much for me to show off at all. I share all of these with the intent of sharing my own financial situation and why I'm able to attain FIRE.
This amount of passive income has increased over the years. One year ago, I have already reached my second milestone, but not my first milestone yet. And then I was generating around $2.5K of passive income. And if I were to go further back in the timeline, the amount of dividends, interest, and passive income would then become lesser and lesser, which is obvious, right? With the power of compounding, it takes time, months, and years to build up a good, effective, and sustainable retirement nest that pop them eggs every month.
So, now that I have shared quite a fair bit about my asset allocation and the income it generates, I need to make sure that my fixed recurring expenditure can be covered with my passive income and dividends. First is giving my parents allowance. And to me, this is the most important, even more important than paying taxes to the government. Without my parents, I'm nothing. So, ever since I started working, like once I signed on, I've been giving allowance to my parents. I give them $1,000 a month. Ever since I graduated, recently my mom asked me, "Hey, now that you are not working already, you sure you still can give us allowance or not?" And I told my mom that whether I'm working or not, they are still my parents. And because of that fact, I will still give allowance. I know of a few people who give more than me and I know of many more who give slightly lesser and I know of some who don't give at all. At the end of the day, it's you and your parents. How you want to be filial to your parents, whether is it by giving your time, money or effort, you decide. If you're not giving any or giving barely any of these resources as compared to you spending on your own luxuries, you need to ask if you are a good son or daughter or not.
Side topic, on top of allowance, I aim to bring my parents out for a meal every single week for dinner. It's my time to catch up with them and help them with any daily taskings that they need my help with.
Second are my insurance. I have a few insurance: the standard accident plan, hospitalization plan, and a savings plan, which I signed up many years ago when I wasn't so financially savvy. And all these added together is around $571 per month. I stack these payments together with I pay mine to clock a portion of the Standard Chartered Bonus Saver spend requirement.
Next is income tax. I pay around $700-ish per month for income tax and I aim to max out all incentives to reduce my payable tax such as topping up my CPF Special Account. I don't top up my SRS for personal preference. Thankfully, I support my retired parents who in turn reduce my payable tax by $18,000 in total per year, a drastic amount. Thanks, parents. I stack this payment together with OCBC Gyro. So, I get around 6% cash back from the income tax I pay because of the $150K I have in their OCBC One account, but their interest rates have been dropping. So, I might move the cash elsewhere.
From the income tax, you can get a good ballpark figure in the sense of my annual salary. There's nothing to hide. My pay package when I was in the SAF was around $160K. As a 30-year-old, I think I'm fairly paid and am thankful and grateful for this amount. 12 months of pay and around 6 months of bonus if you perform well. I won't dive too deep into this. Maybe you can leave it for another video another time.
Next, I have my car installment which comes in at around $589 per month. The current car I'm driving is my second car. And both my first and second car are more than just second-hand. They have exchanged hands for like six, seven, and eight times. The first car I bought was already 12 and a half years old and I drove it for 2 and a half years until the COE ended. My second and current car, I bought it when it was 15 and a half years old and could drive for another 4 and a half years. Both are Japanese cars, very reliable, just need to spend a few thousand on repair upon purchase to fix everything. Because it's so old and have exchanged so many hands, it's affordable, which is the key to me. The depreciation of the car is around $650 per month, which is met for car prices these days, including a $100 monthly insurance and a $100 monthly road tax and maybe $200 in petrol. All in, I can own a car for about $1,000 a month. End of the day, to me, a car is a car to drive from point A to point B. I aim to keep cost low so that I can continue driving a car even during retirement.
Everything above sums up to around $2,900, which just nice can be covered by my passive income. Yay. Oh, wait. There's still some stuff missing. CLA and I have a joint account which we put money in for travels, housing, utilities, conservancy, etc. We put in maybe $10,000 each a year because of the travel component. Lastly are my own track monthly expenses that I use the Sidly app to track every single month. I track every single expense. So, if I were to go to 7-Eleven and buy a sports drink after my run, I would track it even if it's only $1. My mobile plan, Netflix subscription are all tracked here because they are all small expenses. So, it's ineffective to park it as a segment like one of those expenses above. So, based on the screenshot, it's around $1,000 to $1,500 per month.
As a husband and gentleman, when CLA and I go out, I will usually cover the bill because my money is also her money. So, single men and boyfriends, please read and listen. Your partner will appreciate it.
So, as you can see, my passive income is more than enough to cover the fixed recurring expenses, but unable to cover the money I put into joint account for travels and my own monthly expenses, which I am completely fine because it's a bit like Lean FIRE or Barista FIRE, right? If I want to spend more, I need to work for this additional expenditure. During this retirement/fun employment period, I'm basically utilizing my savings for these travel and personal expenses, which I'm happy to do so because I worked hard for so many years. The period of freedom is worth the money.
Wow. Wasn't expecting the video to drag so long and spend so much time on the numbers and technical details of passive income and expenditure. Hence, I decided to split this topic into two segments. So, my next video can focus more on the habits, lifestyle, and life decision portions than just the numbers.
Once again, money is always a sensitive topic. I share whatever numbers I deem comfortable enough for me with the sole intentions of helping people understand my journey, my financial situation, and how I was able to achieve FIRE. Retirement looks different for everyone. What might be enough for me might not be enough for you, but might be more than enough for someone else. Take my videos with a pinch of salt and just enjoy the content.
If you have watched to the end, thank you very much for following along on how I retired at 31 years old. I hope you enjoyed the video as much as I enjoyed creating it. Don't forget to like, subscribe, and turn on the notification button as we continue with part two next week. This YouTube journey has been fruitful and interesting, and I'm happy to say that we have the next few videos lined up. So, see you every Saturday. Until the next video, I'll see you on this sunny side of Singapore.
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