Two things you need to do consistently to become richer

I grew up middle-class to poor-ish, and I remember my mum telling me how embarrassed and guilty she felt whenever she saw me and my brother standing in front of the glass window of Kentucky Fried Chicken (KFC), looking at people eating. I can still remember the moment, like I was there myself.

  • that delicious looking fried chicken in the paper basket
  • the steam that rose up from the heat of the freshly fried chicken
  • the coleslaw and mashed potatoes
  • the droplets that formed on cups of the drinks looked so refreshing

I was just hungry and greedy, and fast food restaurants like McDonald’s and KFC were a luxury.

I…learnt to not ask for my parents what they couldn’t afford.

I learnt to “make do” with what they could afford.

…because I dont want to see the look of embarrassment and guilt on their faces.

I didnt know how to put it to words when I was young, but I could tell that money was both a frustration and pain to them, and that they did their best. So I didnt want to make it any harder by putting on “stupid demands” on them.

After all, I was just a kid right.

I love my parents and I dont want them to suffer.

I told myself that I would study what they could afford, and do what we could afford.

And that, was a trap with a silver lining.

The trap

The trap is:

  • starting to think of living within my (and my parents means)
  • not asking or yearning for more and suppressing my desire for more, for fear of making my parents feel bad

This is a good way of surviving, and just live with it, but the biggest issue of this was that I would just be a floater and learn to say “what to do, it is what it is” instead of pushing to learn and grow and think of how to get what I want.

The silver lining

The biggest upside of picking up this habit is that I gain this…patience sort of non-chalance, where I dont get too hung up on losses or potential losses. This has taught me that even if I had to

  • capitulate
  • cut losses

as long as it will bring me closer to my overall medium and long term goal, it is fine.

It kept me from wallowing in self pity or blaming others, and instead, learn that there are “losses amongst wins, and as long the wins are greater than the losses” it is profitable.

I’m 40 years old this year, and have long decided to not live within my means. I do not need to be a billionaire to be happy, but boy I want to not worry about money so I’ve not just read books, but I’ve put to action consistently since I was an occupational therapy student in 2002.

That’s 20 years ago worth of tried-and-tested wisdom.

Here’s the two things that you need to do consistently to become rich (or richer) beyond your normal life.

Step 1: Build a cash / profit surplus

The easy way to do this is by cutting back on expenses that you dont care about. Maybe you spend $500+ a month on frivolous stuff that you couldnt care less about, such as

  • $8 bubble tea x 20 cups a month = $160
  • top of the line internet $100 a month when at $50 a month one will do = $50
  • buying clothings / accessories / stuff that you will not wear and throw away = $300
  • insert whatever shit you spend on that you dont care = another $300 maybe

That itself is $810 a month.

If you can carve out $810 a month, that’s plenty for the next step.

For others, maybe you’re tight financially already, and cant squeeze out anymore. If that’s you, then you need to earn more, and earning more is my favorite game anyway.

The biggest 3 upsides on earning more? Number 1: you learn and grow so much more than sitting down watching netflix. Number 2: you will meet more people who may end up being clients, friends or even loved ones and Number 3: there is no earning limit.

Step 2: Invest the profits

Take at least half of the profits to invest into boring, slow investments that you understand, such as

  • dividend stocks
  • REITs (real estate investment trusts)
  • rental properties

these will provide cashflow which you can reinvest.

The other portion, put into higher risk speculative growth assets such as

  • growth / tech stocks
  • cryptocurrency such as bitcoin, ethereum, cronos coin, RVP
  • etc

The goal of high growth speculative investments is to grow your investments 10-100x, which you can then route some profits into boring slow investments. Of course higher risk growth investments can go south too, so do your due diligence.

Dont stop there

Like any good boxers, to win, just a single 1-2 isn’t enough to win.

If you want to win, you will have to practice like mad over years. You will have to compete, and throw thousands of punchs and even take beatings, but you know what.

Champions dont stop there.

You keep going, after after your first beatdown loss.

You keep going, after winning your first break.

Simplify your personal finance (easier to do and maintain = faster to achieve your financial goals)

It’s very easy to dream big and talk big when it comes to personal finance, you’d hear people throwing out things like

  • I’m gonna make $1M!
  • Six figures per year
  • yada yada yada

But let me tell you something that cannot be underestimated, which is our human psychology.

Easier to maintain = Easier to do = Higher success rate

This aint rocket science.

It’s like telling me to take 98 steps to do something versus 5 steps to do something, which do you think will be easier? Of course it’s the 5 step one, duh. Another thing is sometimes we humans like to make things difficult when the easier way is the easier way.

The less complex and simpler, the easier it’d be maintained and achieved.

5 steps to simply your personal finance game

  1. ONE credit card: whichever rocks your boat (lifestyle, cashback, travel, gas, groceries, online shopping)
  2. ONE bank account: whichever bank account gives more benefit
  3. ONE investment vehicle: index funds work great (there are many other options such as cryptocurrency, dividend stocks, rental properties, insurance etc) but start with one
  4. ONE way to save more: choose one area that you find you dont really care as much about and it can be cutback.
  5. ONE way to spend more eg personal trainer, higher quality food etc

How I apply myself to the same simplicity

  1. ONE credit card: cashback because it’s simply more practical. I used to accumulate air miles but discontinued it because it’s such a hassle to redeem and redeemable flights tend to be the more inconvenient timings which I dont like.
  2. ONE bank account: whichever bank account gives more benefit, I dont really care. Just one bank account will do, no point having more and paying more maintenance fees.
  3. ONE investment vehicle: my all-time favorite are dividend stocks because it’s less maintenance, the dividends just get sent to my bank account on a regular basis (AND in Singapore, dividends are tax-free! Delicious. Crypto is my 2nd favorite and the tech is one thing, but it’s a powerful growth asset class (with lots of volatility though)
  4. ONE way to save more: we cut back on eating out at restaurants simply because we dont particularly enjoy that and dont care for it
  5. ONE way to spend more: taxi/uber, home deliveries, flying regular office hours, durians (yum)