My friends shared this article and I wanted to discuss this case study with you.
So according to the article, he earns $12500/month and he says:
- he lives paycheck to paycheck as there are lots of things to pay for
- when compared to his school mates, he’s doing well but in the tech industry, he’s at the lower end
- he thinks most jobs are going to be the same: stressful and fast paced
- thought about dying but dont want to be irresponsible for aging parents
Table Of Contents
- 1 What I will do if I am in his shoes earning $12500/month
- 2 Burnout, stress and mental health
- 3 The reasons why I focus on this
What I will do if I am in his shoes earning $12500/month
I’m gonna put myself in his shoes and make some assumptions (I am NOT a psychologist) and this is based on what I’d do from a personal finance standpoint:
Hardcap spending to max $5000/month
He said that he lives paycheck to paycheck because of
- mortgage loans
- insurance bills
- medical expenses
- rising cost of living eg food
I will revise all the expenses, and cut down aggressively.
- If I live in a condo that takes a big chunk of my pay, I’ll downgrade. A HDB is fine. If I live by myself, co-living is not bad too.
- If I have insurance that I dont need, I’ll cut back and downgrade
- Medical expenses may need to be refinanced
- If I eat out $2000/month, surely I can cut back to $1000/month?
I dont know the details, but that’s some rough idea.
The budget will be $5000 all in so that…
$7500/month to be invested into dividend paying stocks
- invest $7500/month
- dividend stocks pay 8% per year
- reinvest every single dollar
In 5 short years, I will have $570,233.61. At 8% dividend yield, that’s $45,618.68 in dividends a year, or $3,800 a month of decent dividend passive income. I can live comfortably in a cheaper country such as Malaysia or live a bit more frugally in SG.
In 10 short-ish years, I will have $1,408,093.87. 8% per year is $112,647.51 which is $9,387.29. Based on hardcap $5000/month spending, I can retire on $6000/month and still have $3,387 “spare” to reinvest.
Note: it is likely when we stop working, we spend significantly lesser because we spend lesser on conveniences and transportation. Think about it.
Food in town hawker is about $8-10 a meal, with drinks; cafes around $20 and restaurants between $30-50. Watching a movie $15+. If we work part time or are retired, we’d likely be lessed stressed, which means less inclined to spend on conveniences like paying for food outside.
- We may cook more at home.
- Go for long walks or enjoy activities in an unrushed manner that doesn’t cost much.
- We may even watch shows on computers.
- We wont need to rush around in taxis or paying to rush food delivery.
I’m not saying to be a recluse when we retire, but I anticipate our costs just goes down significantly, and we may need less than we currently spend.
Burnout, stress and mental health
- is stressed from the fast paced work and pressure
- comparing to others down and up of him
- feels stuck
Like I said earlier, I’m no psychologist or mental health therapist.
I’m also not going to say the cliche thing of “ah, you just gotta stop comparing” – it’s not so easy to stop that. It’s human nature.
I do think that he feels lost and that “it’d be like this forever”…because he doesnt have a personal finance and early retirement plan. That’s why , I’m pushing for you and me to do something that we can do:
- save more (flat amount OR percentage) of income including bonuses
- chuck all those into dividend passive income stocks
- spend some dividends BUT reinvest most of those delicious dividends until your yearly dividends is significant enough to retire on
The reasons why I focus on this
Happiness not included in office/work
I dont assume that work or being in office will make me happy. If it does, great. But I assume work may never make me happy (who dies thinking of “I should have worked more…?” anyway). So I will not link happiness to work.
Optimize for dividend passive income
I assume happiness and contentment may be outside of work, so what I will need to do is to build a passive income portfolio that will pay me continuously, so I can choose to not work and instead, pursue projects and people that may be of interest to me.
Will it bring me happiness? I dont know. I can just explore and find out.
Regardless, once my dividends are more than my living expenses, I can then choose to work less, retire, change job or pursue other stuff that I may be interested in. Maybe draw, travel, marry, who knows? Maybe even when I’m financially independent and free, I’ll still be working, just that I’ll be more selective of the people and projects I want to be involved in and with much less stress.
The key here is I want you to take the steps to continue building streams and streams of passive dividend income from your salary. And reinvest all the dividends until the dividends are good enough for you to have more life options.
PS: dont consider or commit suicide, ever. That’s like choosing a permanent solution to a temporary problem…plus there’s so much things to do, places to go, people to visit…or even things to discover in life.
What do you think? Share you ideas in the comment below.
I’m the founder and writer here at NigelChua.com; as well as serial entrepreneur, therapy business entrepreneur, digital entrepreneur, investor and also happy husband, father and Christian.
Started and sold off a business for 7-figures; built another 7-figure one and growing it further, plus building/investing into other businesses and investments as well as advisory works.
Nowadays I share and teach entrepreneurship, financial independence, retiring early as well as building and living a life you love.
Where To Next?
- Subscribe to my newsletter – no spam and just my best stuff. Unsubscribe anytime.
- Go to Homepage of nigelchua.com
- If you like videos, head to All Videos – all the latest (and all) videos are uploaded there.
- Visit the Blog to read the latest articles and videos.
- Head over my Resources page to the products and services I use to improve business, relationships, health and more.
- I recommend everyone to learn to start an online business for so many reasons: low cost, valuable skill (marketing), potential for passive income, it works 24/7 for you and no income ceiling. There's a free membership at this platform which I'd been part of since 2015 and it's where I learnt how to earn my first $100 online. See you on the inside.