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Change to become richer. A need or a want?

Sunday, December 23, 2012

Much of my writing is geared towards having people making positive changes in their lives. I also blogged about how some people told me that I should have good debt in life and how I have been described by some to have a peasant mentality towards wealth building. Are these people also trying to encourage me to make positive changes in my life?


There are so many types of people in this world all with their own ideas on how things should be. They have their own realities which are very much conditioned by their own beliefs. While it is true that what works for some might not work for others, we do not want to be dismissive. Why? What if it could work for us? We should keep an open mind, shouldn't we?

People often say, "If you don't try, you won't know."

There is a second half to this which is often not said, "Some things, you should not try."

So, we should not blindly adopt ideas and hope that they work for us. Then, how do we know which ideas to try out? There are so many ways to approach this but I feel that "self" is the most important consideration.

Sun Tzu said, "Know thy enemies and know thyself and be victorious in every battle."

We might have also heard the saying, "We are our greatest enemy." So, knowing thyself is more important than knowing thy enemies.

At the very basic level, we have to question our ability to see something through. This is, however, not enough. We also have to question whether we have the temperament to make an idea work for us. If we do not have the right temperament, it would be hard to have a strong will.

So, for example, I keep saying that one should take risk to protect and grow one's wealth but should a risk averse person do this? His temperament is clearly against this. Even if he had the ability to do this, he might not have the will to do so. He would worry too much and could suffer from anxiety.

Now, I have a preference not to have debt in my life, given a choice. I like the peace of mind that comes from being debt free.

To anyone who is thinking of taking on more risk, a pertinent question to ask is, therefore, how much risk would our temperament allow us to take on comfortably. Then, ask if we are willing to push beyond the limits of our comfort zones.

All of us would like to be comfortable in life. Is there any reasonable person who would rather be uncomfortable? However, sometimes, we cannot afford the comfort and that is when we would have to go out of our comfort zones. Sometimes, we are forced to make changes.

So, some need to change to become richer while some do not need to change to become richer although they might want to change to become richer. To change or not to change? This could be a question of necessity for some and a question of desire for others.

Related posts:
1. Good debt is always good?
2. To be a happy peasant.
3. Money making.
4. Three point turn.
5. A good cat.

12 comments:

EY said...

Hi AK,

I can't agree more with your views on one's temperament bearing an important influence over one's level of risk tolerance. Different strokes for different folks. While certain approaches might be touted/widely accepted as being more rewarding or as a more 'intelligent' move, those who choose not to follow do not deserved to be labelled. Peasant mentality or not, it's not for them to say. These people can make all the money they want, the way they want it. If they are so greatly blessed, then it would be more admirable if they would bless others in small and big ways as much as they could afford it. :)

Personally, I had used my profits from the stock market to pay off the mortgage of my house so that I could live a debt-free and carefree life. Of course, from some people's perspective, I could have generated a lot more returns if I had worked the money harder. But then again, with my temperament, I would have burnt it as well. Remember I mentioned I busted my trading account and wiped out my profits from my first investment property? We know ourselves best. And yes, we are our worst enemy. :)

When we tally our life, what counts most is perhaps peace and happiness. When we have the former, the latter is not too far to achieve.

Oh btw, if you are craning your neck for a 2nd guest post, it would probably not come so soon. Sorry... :( I've been sick the entire week. Saw the western doc earlier on and went to the TCM physician today. Hope I'll be well soon! Then hopefully, I'll be motivated to write. :P

Cheers,
Endrene

AhJohn said...

Life is a series of choices. For me, it makes me happy if I understand more things and get my life more into control, try or not should not be a question, but why we try.
Btw, now I start to look at the numbers of companies, I think it should be the right way to understand the business nature and build up confidence. Of coz, AK is very good on this way already.

AK71 said...

Hi Endrene,

A friend told me that I should not talk too much recently because whatever I said recently came true! Well, just lucky, or unlucky, depending on the subject matter. Hey, take those strong anti-biotics and get well soon. Don't worry about blogging. :)

You know I couldn't keep myself from smiling when I read your comment because I have, more than once, asked myself if I had not paid off my mortgage, would I have been able to grow the money more aggressively or could I possibly have lost it in some other investments. Hahaha.. ;p

Well, things turned out well enough. Sold off the property, got back a chunk of money. I hope to make enough money from the stock market in the next 2 to 3 years to pay for a shoebox apartment in full. :)

I am a peasant and a peasant only needs a small hut. Well, in my case, a small hut in the sky. Haha.. Then, I need to have spending money on a monthly basis and I am all set.

A debt free and carefree life is what I want. Peace and happiness could be a bit more elusive. However, I believe that being debt free is a helpful step. :)

AK71 said...

Hi Ah John,

Try or not is not the question but why we try! I like this. :)

Definitely, the motivation for doing something is important. It affects our level of perseverence and, therefore, the probability of success.

As for looking at a company's numbers, I am not that good at fundamental analysis. I have never liked numbers much but it is necessary that I know them. So, I am motivated by necessity and not interest. So, I never got very good at it. ;p

EY said...

Hi AK,

Oh really?? What you said came true? Wow. Can you give us 4D? :P

Seriously, thanks a lot for your concern. I'm much better now. I finished the Amoxicillin given by the western doc which didn't help much. The TCM physician prescribed 2 doses of 26 small packs of medicine. Drank 1 concoction last night. The taste was horrible but it helped. :)

I think you have done a great job switching from one asset class to another. Higher liquidity with a consistent flow of passive income too. Much better returns than the rental. The difference between you and I is that you have a sound plan and I didn't! Haha. Of course, with such costly fees that I have paid to Mr Market, I hope I have emerged wiser.

Judging from your financial achievements, you can easily buy a shoebox apartment in the OCR in cash. But I know you are probably referring to one in the CCR. If you liquidate most of your stocks, I think you can well afford one too! But then, why slaughter the goose that lays golden eggs, right? :)

Well, half day work today. How nice! *GRIN* Happy holidays!

Cheers,
Endrene

AK71 said...

Hi Endrene,

Just pure luck. Well, in case it works: 2541. Hope you huat! ;)

A few days ago, I was just telling a friend how I had not fallen sick in a while and I feared it wouldn't be long before I fell sick. Today, I am feeling quite ill. :(

The last time I was quite ill was years ago and I was prescribed Zinnat by a specialist. The amoxicillin given by the GPs didn't work. I had sinusitis, iirc.

See: http://www.medsafe.govt.nz/consumers/cmi/z/zinnat.pdf

I am a big believer that luck is an important part of life. Anyone who says that his success is all based on foresight, I feel, is too full of himself. ;)

So, I can say confidently that I have been lucky too. After all, with property prices having risen even more after I sold mine last year, the jury is still out on whether I made the right move. ;p

I have no intention of staying in the CCR. Too expensive and too crowded. I want to be near the city but not in the city. RCR is what I like. OCR? No, thanks.

Technically, I could pay for a shoebox apartment in RCR with the gains from selling my last home, leaving my capital intact. However, my plan is to have my cake and eat it too. The plan is, therefore, to pay for my future home with the cash flow and gains from my investments in the stock market. :)

On that happy thought, Merry Christmas! Ho, ho, ho!

EY said...

Hi AK,

Whoa, you really give me 4D!!! Hahahaha. Frankly, I haven't bought 4D in years! But this time, I must go win some money. :D

The weather has been bad. Many people are falling sick lately. But thankful that the holiday season allows for some slack. You rest well and get well soon too!

I like your plan. Let the stock market earn you your house. Really nice. :) I'm hoping to do that too. Gotto remain a lot more focussed and seriously cut back on unnecessary spending. Guess what? When the world didn't end on Fri (not that I really expected it to!), I celebrated with a shopping spree on eBay! XD. Who can resist beauty hung on a hanger wor? What more, if money can buy beauty and happiness, why not? :P

Of course, I could have spent my money more prudently, like buying a ticket for the Value Investing Summit. Maybe now that I have bought new clothes, it's not a bad idea to have an event to wear to? Hmmm...

Okay, you take good care and keep your spirits high! Get well soon! :)

Cheers,
Endrene

AK71 said...

Hi Endrene,

I am a lazy person and I do not want to work till I am 70. So, just like how I decided to transfer funds from my CPF-OA to the SA in order for the government and time to help me grow the minimum sum, I try to let others do the work of money making for me where possible. ;p

Hey, it is Christmas! After tightening our belts and being prudent the whole year, it is OK to give in to some frivolity if we can afford to. I just bought myself a nice Christmas present actually. I might blog about it. ;)

As for Value Investing Summit 2013, the organisers informed me in a recent email that they have about only 200 tickets left. So, if you are still interested in attending, you want to be fast. Maybe, I should include a link to the event in my next blog post as a reminder to other readers too.

To both of us, get well soon. :)

EY said...

Hi AK,

Err...tightening belt and being prudent didn't happen to me the whole of this year or for as long as I could remember since I started enjoying a bit more disposable income. And yes, I give in to frivolity all the time! Hahaha.

But all being said, 2013 will be a different year. I would like to retrace my footsteps like when I first started working and building up my nest eggs. By the way, instead of buying another dress, I have just checked out the ticket for the Value Investing Summit at $149! Decided not to procrastinate further since you mention that tickets are running out.

Thanks for the update! :)

Cheers,
Endrene

Toydesigns said...

I can't agree with you more on that the issue of having 'freedom' in doing what you want comes at the price of not buying/getting the wants - but just focusing on the needs. It's no rocket science that we need to save / invest more and spend less, but yet the current society, educations systems, ' banks' etc are prodding us to spend more and save less. No wonder most of the newer generation are stuck in bad debt and the older non-finance savvy folks are stuck in debt -( from gambling etc). It's all about self control.

AK71 said...

Hi Endrene,

I was told by a fellow blogger before that if we have a good career that pays well, we don't need passive income. I don't have a good career that pays well. So, I just have to work a bit harder, spend a bit lesser and save a bit more. ;)

The timing of Value Investing Summit 2013 in January is perfect for your new year resolution. Nest eggs, look out! Endrene is on a war path! ;p

AK71 said...

Hi Toydesigns,

Welcome to my blog. First time commenting? :)

I always remember a story Jim Rogers shared. When he was much younger and when his wife saw a sofa she liked, he told her not to buy it then. They bought it more than a year later with gains from their investments. The sofa was "free"! :)

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