Sunset Years

sunset, inevitable

Many friends tell me they do not intend to retire. The others say they cannot afford to. In truth, we cannot not retire. It is an illusion of choice, except for some lucky ones who either somehow managed to stay in the pink of health and employed at the same time. If you consider the odds, doesn't look too favourable. With rare exceptions, it will happen to many of us - we have to retire, whether or not we are ready or financially capable of doing so. When you fail to remain employed, you are retired, life retires you, whether you like it or not. Avenues of self employment are not established overnight. It require years of planning and thought. The same goes for passive income vehicles. Instead of deluding ourselves governments, children or supernatural forces will take care and provide for us, it is probably wiser to hold our own reins.

I don't believe in relying on the Aged Pension scheme of Australia. I know of some folks tweaking their entire strategy to position themselves such that they can claim maximum pension from the scheme when the time comes. I don't think that is a very wise decision to put the eggs in one basket as I do not trust any governments to protect a scheme for three decades. There are too many variables, uncertainties and vulnerabilities to unfavourable changes. Changes to asset or income tests, as well as the amount of time pensioners are allowed to live overseas while claiming pensions can easily be butterfly effects that hurt us bad.

Another frame.....
While we are scratching our heads over the financial part, building vehicles with capacity to grow funds or some that provide streams of small income, there is no stopping us for preparing ourselves for other areas we can work on.

First, get in the best physical shape as possible. Especially for parents, we devote so much time on children that we neglect our health and physical shape, easily to a state with no easy return. Some health problems are irreversible. We cannot afford to wait until the kids grow up before fixing our physical health issues. For a start, extra weight is a killer. Being a fat ass is more susceptible diabetes, heart disease, high blood pressure and other related problems. I am not anti-fat fuckers. The bloody docs said that, I didn't make things up. Medicare or private health insurances are just there to soften the financial blow should we require medical care. Only staying in good health ensures good health. I am always being laughed at whenever I say I am on a diet because I overate for a few months and put on so much weight that I cannot fit into my work pants. However, the fact that I have to go on diet and light exercise regimes each year reveal how easy it is to go out of shape and how I find it increasingly harder to get back to it every year. The odds will be increasingly against us as we age. In glutton speak, it is easier to take small bites of a steak than swallow the whole slab at one go. Take note, try not to be a fat fucker.

Second, downsizing everything. I know this works against the common strategy used to maximise pension claims by reducing cash and eliminating assets pumping everything into the personal home because income and investments (including properties) are being tested but not personal home - then downsizing everything because they do not check your status after the initial test. However by doing so, we will have incurred a lot of unnecessary costs that we have no means of recovering back over three decades while waiting for pension. Such as tax and property tax, council rates, maintenance and opportunity costs of the locked funds. That is not to say it is a wrong strategy. Different strokes for different folks. I prefer to stay small and nimble so that I can react to circumstances faster.

Back to downsizing, the most important thing to do is to start downsizing, or better eliminate, your debts. If you are still have to do payments for cars at this age, something is definitely wrong. Cars should be downsized if possible or at least fully paid before we hit 40 years old. If you are living in Singapore's, don't even think of getting a new COE after you hit 40, unless you are part of the millionaire's club. Judy told me recently that they decided not to extend the COE of their car in Singapore. I applaud her. She showed me some pictures of how difficult it was to do her weekly grocery shopping. Every member of her family had to drag along trolley bags in order to get the jobs done. Little did she realise she was actually doing Point 1 and 2 at the same time. Fattening her pocket and losing weight at the same time. On top of that, it is time to let the children know the realities of Singapore life without being chauffeured around like how they did for the first decade of their lives. It is a true test of how "Life in Singapore can be happy too if we have a positive mindset" for them.

Consider downsizing or eliminating other liabilities, such as a boat that requires a license fee every year, a caravan, a time share, your spare 3 cars etc.

The most important thing to downsize is, perhaps, your retirement expectations. We do not have to retire in Singapore, Australia or Maldives. We have to be realistic. There are many countries in SEA that are viable for retiring. Our expectations are probably the most costly thing we are burdened with. Manage it and you'll find things looking much easier.

Thirdly, create a income stream this year.  I notice a couple of friends selling stuff online or buying things for people as a service to claim credit cards benefits. Selling pastry, art, plants, providing a service, whatever. I think it is a good start. It does not have to be a multi-million making company. If it is something you can continue doing in your sunset years, it is worth building the experience and network early because it takes time to do so. It could be anything. An small investment in a company who is able to provide an income of $100 a year. So be it for a start. This has to be my resolution for the year.

The financial big plans can wait until a clearer strategy is derived. However, these three baby steps can be taken first. If you have a retirement strategy, do not feel shy to share it with me.



  2. Hi Nix,

    I have been reading your blog for about 2 years now and I really appreciate how helpful you are to fellow Singaporeans both online and in real-life.

    A short intro about myself: I am 46 years old, married with 3 young kids. Due to my age, I have to apply for a state sponsored visa. I obtained my 190 visa (sponsored by SA) in 2014 and I am planning to move to SA this year or next to retire. Eventually, I would prefers to settle down in Perth - after I fulfill the 2 years obligation.

    I agree with you about retirement and creating an income stream outside work. I would like to share with you an idea on creating an income stream outside work.

    I have been speculating in the Singapore stock market since university days. I did that for 10 years and I lost quite alot of money.

    In 2006, I asked myself who is the most successful investor on earth and can I learn from him? I did some research about Warren Buffet and I started to read books related to his investment methodology - value investing.

    I started with the book "The Intelligent Investor" and others. I also read alot online about value investing and eventually I am convinced that this will work.

    I started value investing in 2006. I bought blue chips stocks in Singapore, Hong Kong and Thailand. I bought stocks during every market panics (Warren Buffet's famous quote: Be greedy when people are fearful and be fearful when people are greedy). It pays off. I am now holding a portfolio of stocks with good capital gains and generating a stream of dividend income. But this also creates a problem for me because of the taxes that I need to pay in Australia - my wife and I have exceeded the tax-free threshold.

    I hope you can explore this avenue and successfully creates a passive income stream for your family.

    1. Thank you. Feel free to email me your insights