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How to have children and a comfortable retirement? WARNING: This answer might be shocking for some.

Friday, November 7, 2014

I have brought up the topic of having children and what a pragmatic attitude towards having children should be before. 

In an expensive country like Singapore, I believe that having a healthy dose of pragmatism is even more important.

For young couples, it could seem like the most natural of things to spend money freely, giving the best they could to their children. 

However, it might be a good idea to hold back a little.






Now, before anyone protests, I am not suggesting depriving children of necessities. I am suggesting not depriving ourselves of a comfortable retirement! 

I shared a story in an earlier blog post before:

A reader discussed with his wife on whether some of the enrichment classes they sent their two children to were necessary. He knew they were spending a lot of money on such classes but he was surprised at how much they actually spent. So, apart from classes which were deemed essential, lifestyle classes such as tennis lessons were axed. This helped them save about $600 a month.
From: How to have a comfortable retirement?






$600 a month means $7,200 a year. Let us assume their children were to take classes for 6 years, it would amount to $43,200! 

Now, imagine if they were to do a CPF Minimum Sum Top Up (limited to $7,000 a year) to enjoy a 4% risk free rate and income tax relief at the same time. 

That would go some way to ensuring retirement funding adequacy. 

Want to upsize $100K to $225K? 

AK shows you how and with some music to boot: here.









Often, whether decisions are good or not will become clearer after some time. 

Hindsight is always perfect, isn't it? 

So, spending freely on children now might seem like the natural thing to do but, in our old age, we might just regret it.






In an article in MoneySmart recently, a Mdm Ang who is in her 60s complained about spending too much on her 3 children in the past. 

She and her husband didn't want their children to be saddled with huge study loans and paid for their tertiary education.

Mdm Ang complains that her children are so wasteful and take everything for granted now. 





"I should have used the money for my own retirement," Mdm Ang said. 

"My children don't even appreciate the sacrifices we made for them."

Oh, dear.






Another senior citizen, Mrs. Tan, 60, said that she and her husband spent almost $1,000 every month, sending their daughter to all types of classes, from ballet to abacus to piano. 

They don't even have a piano at home anymore.




Although thinking about children as consumption items might sound unfeeling, I believe that a dash of pragmatism is helpful. 

Like with all consumption items, we want to avoid over-consumption which inevitably will always set us back financially.






儿孙自有儿孙福, 莫为儿孙作马牛.

Related posts:
1. Married with kids? AK shares 5 steps.
2. What is our attitude towards having children?

Why did AK buy an atas mattress but a cheapo TV?

Wednesday, November 5, 2014


Every dollar counts.

UPDATE (DECEMBER 2016):
After more than two years, my cheapo LED HDTV is still brilliant and trouble free. I think it is safe to reveal the brand now:





If  you are not brand conscious, you can get this brand of TV in Giant hypermarts. I feel that it is definitely good value for money.



---------------
2014:
I have been super busy and super tired recently. I would get home at about 11pm, take a shower, read the news a bit and go to bed. So, you can imagine that I have not had much inclination to blog.

Today, I took some time off from work to do my own things and chatted a bit on FB with readers and thought it interesting enough to share with readers who don't follow me on FB:




























Some of you might remember that I bought an expensive (but value for money) bed and mattress recently but I have settled for an inexpensive TV even more recently. 

This is even less expensive than the Chimei brand 26" LCD TV I bought 8 years ago for $699 for my old place.

I don't know if I should reveal the brand for my latest purchase or not. I don't want to have readers who might be unhappy with the quality hounding me.

Anyway, with age comes aches and pains and with these come wisdom. This lately acquired wisdom tells me that the bed is more important than the TV. Hence, my decisions.

Unless born with a spoon made of some precious metal in our mouths, all of us have rather limited resources and must make the wisest use of our money.

Related post:
I could not afford it but now I can.

Financial freedom: Your children will become what you are.

Sunday, November 2, 2014

I was out and about when I overheard a conversation a father was having with his young son whom I thought must be 9 or 10 years old.


Son: Daddy, can we go to USA for holiday? My best friend says his family is going to USA next month for holiday.

Father: Go to USA? Will be very expensive.

Son: Mommy says maybe next year we can go.

Father: See whether daddy gets a good bonus or not this year. OK?

Son: Cool! I pray tonight and ask God for help.






AK thought to himself: 

"I will pray for you tonight too."

Of course, it is no business of mine what the father decides to do but if I were in his shoes, I know what I would have said to his son. 

I am sure you know what I would have said too.





I strongly feel that delaying gratification is something we should teach the young even if we are very rich and money is not an issue.



Something I said to my niece before was how she could be getting free money as a young working adult because of her investments in stocks made in the last few years. 

Basically, by the time she is in her early or mid 20s, she would have recovered her capital invested. 





The annual dividends that she could continue to receive then would basically be free money.

I fear that many people are trapped, running like hamsters in their wheels. 

They are not able to make progress in their financial well-being as they are stuck in a culture of consumption and instant gratification. 





What makes the wheel scarier is that people accept it as an integral part of life and, therefore, their young will also have wheels of their own in future. 

It is a depressing thought.



"Your children will become what you are; so be what you want them to be," David Bly.

Related posts:
1. Financial freedom is a family affair.
2. At what age to start investing in stocks?
3. They were just showing off their wealth.

Read:
More needs to be done to provide Singaporeans with investor education: Lawrence Wong.


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