I haven't been posting about getting free stuff from Pasir Panjang for a long time. I usually go and collect on Thursdays. But recently I haven't been taking much stuff cos I have other sources of free food. So I usually go mainly for the fun of it.

So today this is what I took home. Its been a long time since I took so much, cos I have an event I have to plan for so I needed more food. Some of these items were labeled as organic, such as the potatoes, carrots, beetroots, corn. I forgot what else, cos I don't really bother about it. Cos it doesn't appear all the time.

It's amazing that during Chinese New year period, when food and vegetables are getting more expensive, vendors are continuously throwing away good produce. In fact, they throw away even more stuff during this period than on normal days.

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So I was thinking... Just how much does one need to be or feel rich?

So I think a bit more... How do I define rich? 
Well, let's not talk about the uber rich, so let's not talk about big bungalows or luxury boats, cos that's just way out of what most of us are going to be able to achieve. 

Let's look at what many people would deem a wealthy life.
So I'd think someone rich would be living in a condo or landed property. ($3k per mth or $36k per ann)
This person drives a luxury car. ($2k per mth or $24k per ann)
This person can go out and eat and party every day. ($2k per mth or $24k per ann)
This person can buy luxury watches or bags or shoes, etc, regularly. ($2k per mth or $24k per ann)
This person also probably goes for expensive holidays. ($20k per ann)

So this person needs to make around $128k per annum and spend it all for someone to feel rich. 
If I lived this kinda lifestyle, I would probably feel rich. Except that I would probably be poor. 

From an external point of view, if we see someone living this kind of lifestyle, it's easy for us to conclude that this person has made it in life. They are living it up and it's easy to be envious. 
But let's be practical. How many people are able to make $128k per annum? Next, how many people are willing to blast ALL the money away every month?

So... Not many people make $128k every year. Are you sure your friend who is living this lifestyle is one of those who earns $128k per year? 
If this person makes $128k per year and spends it all, means this person also needs to remain employed for him to continue this lifestyle. Which means in the later years, this person will not be able to live this kind of lifestyle. 

So let's go back to the question... Are you rich? 
If rich is defined as living the lifestyle above, then I know I am not rich. And I also think most of us aren't rich. And even if some people are rich and living such a lifestyle, it's probably not sustainable and they will eventually have to downgrade as they grow older. 
Of course there will be some who are able to sustain such a lifestyle for very long and are truly rich. 

So why is richness always perceived? It's always about showing off. It's kinda like... if someone is rich, they must tell everyone. Else, what's the point in being rich? 

Someone wants to live a luxurious lifestyle and he is able to do so. He is perceived as rich.
But someone who doesn't want a luxurious lifestyle and is able to live without. Is perceived as poor? 

Long story short... 
Rich or poor is relative. If you never saw anyone richer than you, you wouldn't feel poor. If you never see anyone poorer than you, you will not feel rich. 
If you are the only person in the world. There would be no such thing as rich or poor. Even if you are just eating grass. 
But if there are 2 people in the world, and you are eating grass and the other person is eating lobsters, then maybe it's easy to be envious and think that the other person is "richer". 
But what if you like to eat grass? And there's so much grass around. 
But the other guy wants to eat lobsters and he has to work really hard to find lobsters. Is he richer? 

Rich or poor, it doesn't matter. Cos if you are rich, you don't really affect me. 

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Let's imagine if the world restarted.
Let's say you are the first... Or last 10 people on Earth.

What do you do?
Find food and water, find shelter, try to repopulate the Earth, then maybe start a little bit if farming or domestication if animals... Find clothes...
Set up a banking system, sell each other luxury bags, lend to each other to buy homes and luxury boats, create a Government, tax each other...

Come on... That's rubbish right.
With 10 people... Just relax and chill. Find some way to have sustainable food sources and clean water and enjoy life right?
What if there was 100 people. Well if everyone can work as a team, that's great, else we'll just have to break up and go to other areas and set up shop.

But... We have around 4 billion people on Earth now... So... Somehow it's necessary to set up all these additional industries.
I really don't know... And I don't get it.

Life is simple. There's enough food, water, clothes, shelter for everyone on Earth. Yet... Somehow, there are hungry people, homeless people. Houses are left empty or abandoned. Food is wasted and thrown away.

Somehow the current Government and capitalistic society has been built in a way that is selfish and individualistic.
Maybe last time there was some kampung spirit. But now, when was the last time you went out or had dinner with your neighbours?

As countries get more prosperous, the people grow colder to each other.
Power and resources are all concentrated within a very few number of people.

So sometimes, I just sit around thinking... If everyone could just chill... Actually wouldn't everyone be better off?

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I was quite surprised cos I got some comments from my previous post and it seemed like readers thought I was upset by the comment. Whereas actually I wasn't bothered by it. I took it as an opportunity to think about things. Like, there's no end to comparing, if someone compares when he's working, after returning, he's probably going to compare as well and that's just not going to make him happy. How to retire happily if one is always looking at other people and thinking about what they have?

Anyway, today's post...

I was talking with my cousin.
I told him about my dumpster diving last time and the first thing he said was, "why don't you sell the items..."
And so I explained that I couldn't be bothered, it's a hassle meeting ppl and all that. And he was saying that he's sure that there's an effective way to make it work.

Then I was talking to my mum about rescued free bread and vegetables and she was telling me how we could send the free stuff to old folks home or other organizations and I explained that we already do that. And she suggested that we could get more stuff and send it to more people.

And it got me thinking... Why is there a need to do more? Is nothing good enough? If some people want to do more, that's fine. But what's wrong with the people who don't want to do more and just chill.
And I think this has a lot to do with what we learn since young. Everything is results oriented. If you can do something with some result now, the next time, we need better results. But... What's the point?

Like, I don't want to dumpster dive and do more to meet people to sell the items. I found dumpster diving fun last time but I don't do it anymore and neither do I really want to make a business out of it.

I like getting free food and giving it out to others. But I like to chill and be someone who helps out.

So it got me thinking. Why is there always a "what's next"? Is that really necessary? What's wrong with just chilling? Why do people inexplicably need to move on? Why can't they be happy and enjoy the moment?

I've written before about our lifespan.
Most of us will live til around 85 or so. That's around 31,000 days.
I'm 37 years old. I have around 17,500 days left...
Different people will have different thoughts in their later years. And I would say that this period of my life is probably some of the best years I've had.

Now, there's nothing wrong to keep on walking. Neither is there anything wrong with stopping and relaxing. Some people keep walking, some people stop and take a break, some take a longer break, others may sit down and relax forever. And I think... Maybe in this society, we are all judged. Or are affected by other people's judgement. So those who want to take a break can't take a break cos they may be afraid of what others think? Or maybe we have gotten so used to walking that stopping and relaxing becomes unnatural?

And so... I don't get why there's a need to think about what's next? Or how to do more. Cos in the end, after 85+ years... There's only one last "what's next".


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I received a comment recently. And I was wondering whether I should write about it.
But I thought the comment had good learning points. Or at least it made me think more about things.
The amazing thing is, sometimes, we can find life lessons in the smallest of things.

So commenter Bart compared me to AK71. I don't read his blog so I went over and skimmed a little bit. Apparently AK71 makes $15k dividend a month. Meaning it's likely he has a portfolio of around $3m according to my estimations. AND he retired at 30+. Woah!

The thing is, I didn't feel any pang of jealousy.

You see, when I left the workforce, I already knew more or less how it was going to be.
I decided that I wasn't going to compare with others and what I felt was enough, was enough and I could take it easy from then on.

When we are in school, we compare grades.
Then very quickly we go to work and we compare toys... Stuff like how big our cars are, upgrading to new condo, our watches, bags, who goes to what country for holidays, etc.

And usually, when someone decides on FI, especially early FI. They know they have to stop comparing. They set an AUM they would like to have, then they work hard towards that goal and after that, they are satisfied and leave their jobs for FI and probably living frugally. Usually we have to live frugally even before FI, else it's pretty hard to achieve FI.
Well at least that's what most people who talk about early retirement do.
Some decide they want to have more to uphold a lifestyle others feel that less is enough. So usually, people who talk about FI, arent bothered about what another person owns cos that doesn't affect their own lifestyle.

Now, I'm not saying that it's not possible to retire well like AK71 with a cushy AUM. But most people aren't going to be able to achieve it at 30+. Some have more responsibilities, some have less.

Some will be able to retire with more, some will retire with less. Some will retire older, some will retire younger. Others may struggle to make ends meet.

For me, I have decided to retire with less. And I am very happy with what I have. I have more than the average Singaporean in terms of assets and lifestyle. What's there not to like?
It's not like I don't spend on buffets and expensive food. I still go for nice meals once in a while, except that for most of my daily necessities, I am able to obtain them for free. So I hardly consider myself penny pinching or miserly. I still spend when I need to, except most of the time, I don't need to. It's not like I hold out on myself and I don't buy stuff when I need or want to spend.

So when I read Bart's comment. I was quite amused. Cos... Typically, the early retirement or FI community, doesn't compare much. If I was interested in comparing watches with my friends when I was working, I probably wouldn't be able to retire early.

How to be happy if you're always comparing? There's always someone better off, smarter, richer, more handsome, prettier, etc, than you...

If I retired with $1m, and I get jealous of someone with $2m... How to be happy?
If I retired at 35, but I'm jealous about someone who retired at 30... Then how to be happy?

At any point of our lives, it's so common to compare. But usually, it does nothing for us except to make us unhappier.

And so, I find that this is a good reminder for us to not compare with others so much. As long as we are happy with what we have, what other people own or have doesn't affect our own happiness.


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Yesterday's post was fun to write. It's not like I get triggered all the time. It's just fun to mess around with people and at the same time, put across the point that just cos something doesn't work for someone, doesn't mean it doesn't work at all. 
Different people look for different things and are happy with different things, and there's no need to condemn any idea just cos it doesn't work for yourself. 

Anyway, I was talking with my friend recently. And she was talking about my lifestyle and she kept asking me what sacrifices I had to make to do what I do now. 
And the answer that kept surprising her was... NOTHING...

And she could not understand it.
She said, "That cannot be, you must have given up something to live the way you do. Don't you miss being able to do other stuff when you were working?"

And I also could not understand why she could not understand it. 
Cos... "No, I'm doing mostly the same thing as I did when I was working. I don't miss any food that I used to eat, my lifestyle is pretty much similar or better in terms of quality except that I'm now no longer working."

But as we chatted, things started to become clearer. 

She asked me, "Don't you want to buy stuff? Like retail therapy, just going to Daiso and spending a couple of bucks and just picking out stuff to buy, it's not about the price..."
I answered, "Nope, I'm ok not buying stuff, if I don't need it, I don't buy it. If I need it, I don't mind paying a bit more for it. But generally, I don't need more stuff."

Then she asked, "Don't you feel like going out on weekends to eat and enjoy yourself?"
And I replied, "Yes I do go out on weekends, but not as often as most people and I don't spend so much on each meal. I've eaten expensive things before, but I'm ok with eating stuff which are fairly priced as well. There's not that much difference to me."

Then she continued, "You collect free vegetables, don't you want to choose what you want to eat? You're getting random vegetables, won't you need to buy the ingredients that you aren't able to obtain?"
And my answer to that was, "Nope, I'm perfectly happy with random vegetables. I like the idea that I collect random vegetables and I take it as a challenge to whip out what I can from what I obtain. Instead of I think of what I want to eat first then try to obtain all the ingredients for it."

​"How about weekends? Don't you go out to eat? Or go out with friends?"
"Yes we still go out to eat on weekends maybe once a month but we are ok to eat at home. We enjoy my cooking. And I still meet friends, but we don't go out every week. I have a few close friends whom I meet more regularly and we eat at reasonably priced places. Other friends who aren't so close, we meat them maybe once a quarter. That doesn't add much to our overall expenses."

"But, but... there MUST be SOMETHING, you have given up..."
"Errm... but there isn't. I'm living pretty much the same as how I have when I was working in terms of overall lifestyle. In fact, I feel that my quality of life has increased."

And that's when she realized that all this is cos I was born different. Or maybe my character is different from others. 
She realized that... I didn't have the normal desire to spend. To go out and play. To go out and find entertainment. To buy stuff. Etc...

Then she said...
"ERSG, you are just different, this whole lifestyle you are having is different from others. You feel that you have made no sacrifice cos you never did all those other stuff previously when you were working. So now, you still don't feel like you lost anything or sacrificed anything.
You may not know this, but most people DON'T function the way you do. People want to be able to have retail therapy, they want to go out and splurge on things, they like to go out and find entertainment and sign up for SPA packages. They like their new phones and gadgets. 
YOU are the ABNORMALITY. 
Why don't you look at the bunch in your community and tell me how many people could integrate and live with your current lifestyle. Why do you think they can't?"

And that's when it dawned upon me. Even in the freegan community, not many people managed to integrate their lifestyle to the same extent. There are a lot of people who still buy stuff. Getting free stuff is just supplementing their overall lifestyle but they did not give up spending on stuff. Cos to them, there will be sacrifices for some things that aren't so easy to obtain for free. 
I'm ok with eating vegetables for 70% of my meals. I don't feel like I missed out on a lot. 
I did miss roti prata so I went to buy 2 egg prata for $3. But overall I don't feel like I missed out on anything. 

And all these realizations made me notice something as well... That I've been looking at everything from my own point of view. Cos... living like this is soooooo easy for me. So I think it's sooooo easy for everyone else. So when people condemn me in the comments, I wonder why all the hate.... But now.... I realize... that I'm the abnormal one. For most people, there WILL be sacrifices. 

An example is like in school... there's always this smart boy who doesn't study but manages to get good grades. And he looks around and wonders... what's so hard about it? 
And all the other students hate him for it, cos HE JUST DOESN'T UNDERSTAND HOW HARD IT IS TO STUDY AND GET GOOD GRADES!!!

And I look at my own situation and now realize that the situation is very similar. 
I feel like I haven't given up anything. Instead, I feel like my overall lifestyle has gotten better. That's cos my previous lifestyle was naturally frugal and I've been frugal all my life. I never wanted much. 
Then there are most other people who naturally want stuff. And they must be baffled. How can ERSG live on so little. He MUST be suffering, he must have sacrificed a lot to live like this. He must be missing out on something. 
So it's easy to conclude that I live like a beggar in the street, cos to them, my lifestyle currently, is to deny everything they ever wanted. 
But yet to me... my lifestyle is good enough for me and I'm very happy with it. 

And these give me a better insight to others. That actually, such change is hard. It's not second nature to everyone, and most people aren't frugal by nature. People struggle with their wants vs needs all the time. They have to budget and hold out on their wants so that they can fulfill their needs. Put off their wants to other months, or later in their life before they can indulge themselves. 
And it's a tough mental struggle for many people...

But for me... there's no real struggle and I've taken it for granted. 
I thought since it was easy for me, I thought it should be easy for others as well. 
BUT... now I realize. It's not. 
Somehow... people want things, stuff, things to eat, new experiences, whatever... 
I may not understand it, but I now acknowledge that such desires are there in many other people and that it's not easy or going to be easy for me to relate to many people. 

And my friend ended by saying...
"ERSG... you're in a sweet spot, this is just for you. Not many others are going to be able to emulate what you have done, cos you are born different, or your character is different, or whatever. You are able to so easily integrate into this lifestyle cos of that. You don't want anything. You are contented and happy as you are. Most other people aren't going to be able to accept it, or they will need to try very hard and make many sacrifices to live how you live."


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So in true spirit of my post yesterday, someone gave me a pretty interesting comment. Cos we were talking about people giving excuses about why they can't retire and here is someone who can't retire cos he/she wants to be retiring with a lot of money, by picking out a single point which he/she doesn't seem to agree with.

Whereas in most of the FI community, most of us just want... Good enough.

Freegan living is like living as a pauper?
Now my regular readers know I talk about a Freegan mentality which leads closer to a Freegan lifestyle.
So I try not to spend money if I can get something for free.

I wonder what this commenter meant by FATFIRE. Cos... How many people are expecting to FIRE and own a luxury boat, or travel everyday, or eat at fine dining restaurants everyday?

Most of the people I know in the early retirement community are humble and live a frugal life. Even if they have not retired yet, they don't spend much and they eat and buy normal things. They just don't buy frivolous purchases. They like to have the option to go out and eat or travel but they still don't go and spend recklessly.

Now, when I compare my freegan lifestyle to them, I wonder, how much am I worse off them them? Or even versus a normal working Singaporean?

Most people don't eat out everyday. They eat meat, veges, rice, noodles, etc...
Well, I eat the same things. Except I get them for free. The problem is, I get so much free food on a regular basis that I can't find space in my fridge to put anymore.
So yes, I think I am suffering. I stress on how to handle so much food everyday of the week. Many of us who get free food suffer this way regularly.

Most people in this community wouldn't be drinking Starbucks or fancy coffee. They would likely drink coffee from the hawker center or instant coffee... Yes I don't have this luxury. I drink coffee from a coffee machine. I have to load the machine with beans, the machine will grind the beans and drip the coffee into a cup. After that I have to clean the machine. It's tough work just for a cup of coffee, it's unfortunate, but I have to do it.

Most of them have water and electricity and WiFi at home.
I have my utilities and WiFi at home.
So ok, I'm not suffering here. Thank goodness.

Those who haven't retired are working. So they are actively engaged in their work. Some have retired and have too much free time. So we have so much free time that we have to think of things to do, like go to Malaysia for day trips on weekdays, go and take even more free food and give it out to the needy, hanging out at someone's house and chatting and eating for free... Yes I agree it's hard to do this on a daily basis. Going out everyday is tough and tiring. Working to get rich and retire with more money is definitely easier.

And in the evening, most people would relax on the couch watching TV or some form of relaxing activity. After a long day of going out and doing stuff with them, I also need my relaxing time.
But the stress doesn't end for me. I go to my 2 cartons of Japanese potato chips of assorted flavours and I can't decide which of the 20 different flavours to eat. And after a full 2 minutes of deliberate contemplation I make my choice and walk over to my carton of craft beers, and once again I need to decide out of the 5 different flavours available. It would have been so much easier to buy a carton of Tiger or Heineken then I wouldn't need to be stuck making decisions on what to drink. It's tough living such a lifestyle.

And I'll get down to the worst thing about the Freegan lifestyle. It's the people. Everyone is so free. They have nothing better to do and they call me to go out with them to take more free food! This adds on to my stress of a full fridge. Don't they know I'm very busy doing nothing. Can't they be more understanding and even if they are free, can't they also do nothing as well? How do they find the time to go out so much. Maybe we should all go back to work then at least we wouldn't have so much free time.

Can you imagine, someone even called me to go out at around 9pm to eat free sushi and sashimi. I mean... Come on man! I need to sleep early like everyone else. I'm busy the next day. How inconsiderate! How could they even suggest such a thing.

Just the other day, I managed to get my grubby hands on some free Japanese apples and musk melon. The apples retailed at $5 each and the musk melon is approximately $40. And let me tell you... I almost died eating those. I had a feeling like I was going to get diabetes the next day. It's unfortunate, but I have to live life on the edge due to my freegan lifestyle.

Yes it's quite sad really... This freegan lifestyle really makes me feel like a pauper. I suffer everyday. Why couldn't I have a more normal life like most other Singaporeans. At least they get to work everyday and strive hard for FATFIRE.
At least their lifestyle allows them less free time and less stress and they will also have friends with less free time to disturb them.

I'm sure that FATFIRE is a worthy goal. With my current lifestyle, I get to have free time since I was 35 years old but I have to live like a pauper. Imagine if I'd have worked and strived to save more for FATFIRE. I'd be actively engaged til around 50-60 years old and then I'll be able to live like a rich man for the rest of my life.

I cannot imagine what I was thinking when I started on this journey. Maybe I need to reassess my options.


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So I hear this comment or some derivative of it. 

"Early retirement cannot be achieved, 
It's not possible, 
Did you strike the lottery,
Are your parents rich, 
etc..."

There are a whole load of comments I get when I talk to people, friends, family, etc... 
And it's tiring sometimes.

Cos you see, I got to where I am by making many decisions which aren't mainstream. 
Studying hard, getting better than average grades, getting into a job paying quite well, keeping expenses super low, being prudent with my spending, buying things within my means, getting a BTO which is considered fairly cheap housing, I currently don't have kids, freegan living, etc...

So there are a lot of decisions which led me here, and how I paid up my house and everything. 

When people ask me how I manage to live without working, and I try to explain it, I get a lot of... comments.
And people tend to pick up small bits which they don't agree with and conclude it's not achievable for themselves. 

Example
Oh ERSG probably struck the lottery, that's why he can do it. I'm not so lucky.
Oh ERSG probably has rich parents, that's why he can do it. It's unfortunate I don't have rich parents. 
Oh ERSG doesn't have kids. I have kids, so it's not possible for me. 
Oh ERSG studied hard. I'm not good at studying so I didn't get good grades so I can't do it. 

It's often, that people I meet pick up one or two points to give themselves the excuse that they can't do it. So that they can just brush it aside and not attempt to do it. Or they conclude that such a lifestyle is not for them and that it's a life of suffering and they wouldn't want to retire the way I do. 

Of course change is required if anyone wants to retire earlier than normal. What do they expect right? 
They expect me to say, "Oh yea, that's exactly the life I'm living, same as you, just do exactly what you're doing now and you can retire like me."
Cannot be right? But yet... many times, I feel that's what they expect me to say. 

People pick that I don't have kids and conclude that just cos they have kids, they can't retire earlier... 
I agree kids are an additional expense. But that doesn't mean it's an impossible task. It will be harder to achieve. But the whole idea about being prudent with money and lowering expenses and investing, is all about HOW to make it work for THEMSELVES.

If some folks aren't good at studies, the question becomes learning HOW to achieve early retirement with a lower income? Or HOW to attain a higher income without academic requirements. 
It's not just concluding that it's not possible cos there's some differences between me and them. 

Everyone's situation is different. It's about learning the concepts behind early retirement.
Earning, earning more, spending less, being prudent with money, investing, being happy with less items, etc...
It's easy to say it's not possible cos "I can't live like that".
Cos it's always easier to wake up everyday and not make any changes and carry on with life. 
And that's absolutely fine... As long as they are aware of it and have chosen to do it that way. 
But don't say it can't be done just cos some slight circumstances are different between them and me. That's just an excuse to make themselves feel better. 

That's it for today's post. Slight rant about some folks I've encountered along my journey. There's a lot of these people around. 
Now, I feel people who like to work should continue working. People who don't want to retire can do whatever they want. 
But don't use our differences in circumstances to conclude that it's not possible and use THAT as an excuse not to pursue early retirement, IF they really want early retirement. 

Hmmm... But then again... that's really their problem as well... Cos in the end... I still live my life this way and they can continue living their life that way.



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I think this may be something that most people don't really talk about.
It's always been the same story most of the time.
Work hard, save more, invest, then plan for early retirement...
And somehow, it always stops there.
It's like... the answer magically appears after early retirement and all our problems are settled.
That's hardly the case. It's pretty much the beginning of the next journey.

Most of the time we know how much we need to spend every month, we multiply it by 12, input some rate of return we are expecting for X number of years and we get the magic number... the AUM required to retire.
And usually people inflate this by 50% or more as a margin for error so that they have a buffer, just in case they calculated wrongly.
So when it comes the time to retire, they have maybe 2x the magic number, which is great.

But... the thing is... even with 2x of the magic number, the insecurity will persist.
Most of us are not used to living with passive/investment income.
We work and we get a monthly salary, we are used to having income monthly and this regular flow of cash gives us the security we are used to.
And to retire comfortably, we need to get used to this.
Most of us aren't talking about retiring with $10m AUM.
We're usually usually talking about $1m or maybe even less. So the insecurity will be there.

So how do we defend our position?
When it's time to let go and move on, retire or semi retire, how can we make sure that our money will last forever.
​This is why in my previous post, I decided to pay up my HDB loan even though it was not due yet.
IF my house is truly paid up, cos currently I have the funds but it has not been really paid up, and my car and other loans are cleared, maybe some insurance policies can be pre-paid...
Then I can have better control over what I need to retire without any mental baggage.

Let's say I have $100,000 left in my loan to clear my mortgage.
But instead of clearing my mortgage, I decide to invest this $100,000...
2 years later, the market crashes due to whatever reason and I am left with $50,000...
This is a HUGE stress. Even though I may have confidence that the market will recover, I may not be sure how long it will take.
So from a position that I am able to clear my debts, in 2 years time, I may be in a position where I am unable to settle my debts and retire without any mental baggage.

This is what I mean by defending your position.
I'm sure none of us want to be in the position where we thought we are happily retired, but then suddenly due to market movements, we are put in a position that the numbers don't work out anymore, and if we use those numbers and multiply by our expected rate of return, suddenly we realize we actually aren't able to "retire", but yet we've been jobless for 2 years already.
This kinda situation is sure to suck.

So for example, for me, I believe it is more important to have $250,000 in AUM with no loan, compared to having $500,000 in AUM with a $250,000 loan.
Cos if the market crashes 50%, I'll still have $125,000...
Whereas in the other case, if the market crashes, I'm pretty screwed cos I still have a loan to settle and my net position will be ZERO!!!

​I'm 37 this year. Based on average lifespan, I probably have around 50 years more to go...
The probability that during this 50 years... or even the next 30 years...
The probability that there will be a market crash of at least 50% is pretty much... 100%.
So of course for me, I want to defend my position.
Cos to me, I feel that I already have enough to retire. I'm not trying to maximize returns.
More returns is always great, but for me, it's more important to defend what I already have.
To maximize returns at the risk of ending up un-retired... is pointless. Cos for me, I am already very happy with what I have, my expenses are low and I have everything I need.

So I'm ok to sit on low returns of 2% sometimes, especially when the market is volatile or in late cycle.
It's OK. At this point in my game, I'm not willing to be sitting on 50% losses.
I'd rather buy after a crash or early recovery and have a higher chance of 30-50% gains with low chances of losses.
But yes, I may be missing out on a number of years of good returns. But at this point, I'm not willing to take the risk of halving my AUM.

And so that's the thing. Most of the time we talk about earning more, better returns, etc... but there comes the next question... do you really need those extra returns? What if those extra returns comes with the risks of delaying or derailing your retirement plans? Is it worth it?

So to me, it's ok to kiasi and hold cash and miss out years of good returns as long as it's within your plans and you think that it's all part of the bigger picture. Don't be bothered about missing out on those returns that other people are bragging about, cos their plans aren't going to be the same as yours.
And based on circumstances, defence is a good strategy.


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So when I got my HDB couple of years back, we took the POSB HDB Loan instead of the HDB Loan.

The interest rate for this POSB Loan is some mix of short term and long term fixed deposits + a fixed percentage. The best part of this loan is that it is maxed at 2.5% for 8 years. For the past 3+ years, the interest rate has been higher than most floating rate loans but lower than 2.5%. It has been slowly increasing the past few years. Recently, I just received a letter from DBS/POSB to tell me that the interest rate is now at 2.5%.
Also, there is no penalty for prepayment or partial prepayment of the loan.
Now, of course I have already been paying a lower interest rate than many folks who bought their HDB using the HDB Loan, cos that's 2.6% straight out. Which is 0.1% more than CPF interest rate. 

For years, we could have paid off our home loan using our CPF funds. However, since CPF rate was higher than our loan rate, we didn't bother to. 
Now that our mortgage interest is equal to CPF rate, what should we do? 

Ok by right, all money is the same. So money in CPF vs money in the bank is the same. 
CPF is currently giving 2.5%
Bank is giving a little less than 2.5%, if you are able to capitalize on the UOB One account, or DBS Multiplier account or OCBC 360 account.
If you are invested in the stock market, then dividends could be more or less, capital gains could be more or less. This is the same for bonds. 
IF you are NOT invested in anything and the returns on your excess funds is the base interest rate from bank deposits, which is under 1%... Then you should use cash to pay up the POSB HDB Loan...

So that's what we did, or have been doing. For the past 1 year or so, as interest rates were rising, we have been using any new liquidity to settle our loan, so maybe we have some extra returns from some of our investments, or if I sell down some of our investments, or if she has excess from her salary, we use it to pay down the housing loan. 

Now, of course, different people have different uses for their money or how they want to invest and get returns for their money. 2.5% is considered a low interest rate. Many people might not want to pay down the loan and instead use the extra money to invest in blue chips and probably get a better rate of return. 
This is absolutely fine and probably a good idea.

For us, we have decided to take a more prudent approach. We still have some funds set aside making around 2% return, waiting for a good opportunity in the stock market. Besides this, we decided that all excess funds should go to paying off the housing loan. 
The thing is... even though I know that there is a high chance that the stock market will provide more than 2.5% return in the long run, I cannot 100% guarantee it. So we have set aside a sum for investments, and any excess to be used to pay off our housing loan. 

This has in part been due to my past experience when investing. During the banking crisis in 2007, I invested too early and the market had not dropped enough yet. I was sitting on around 40% losses for months/years. Even though I recovered those losses and more, the lesson I took back was that I need to be able to wait out any losses and that my AUM could drop very quickly due to bad market conditions. 

The thing is... currently, we are able to pay off our loan at any time. However, I do not want to do that yet, cos these funds are set aside to capitalize on any market opportunities. 
We do eventually want to pay off our loan. We don't want to end up from a position where we can pay off my loan, then make some investment at a wrong time and end up in a position where we are unable to fully settle our loan. 
So we decided to set aside a certain sum of funds which we feel is reasonable for investment, and any excess we use to quickly pay off the housing loan. 

There are a few ways to approach retirement planning. 
I agree that 2.5% is a low rate of interest and most people would not prepay their mortgage and instead use the funds to further invest.
In a way, this is aggressive, cos they are taking a loan to invest. 
They take a loan on the house, if they have excess funds they don't prepay the loan but instead use the money to invest, this actually means they are taking a loan to invest.  

For us, we are in a more defensive aggressive mode. 
Cos we have more or less stabilized our lives. The house can be fully paid up, but if we do that, then the amount for investment will drop by quite a large sum. We feel that this amount set aside is large enough but not too large. We estimate that it is sufficient to prepare us for our future financial needs. 
And now we want to fully pay off our housing loan to get that off our minds. 

Maybe I can explain better in the below chart. 

For us, we have been paying our mortgage slowly throughout the years but also heavily planning for retirement. We have reached a certain AUM which we feel is fairly good, so we think its better for us to clear off our loan before accumulating more retirement funds. 

There will be many other financially savvy folks who would continue to hold the low interest rate loan and pay their mortgage slowly throughout the years whilst accumulating their retirement funds. 
I find this to be absolutely reasonable thinking. I have friends like this.
Just that for me, we find the above works better for us. 

Then there will also be folks who focus on prepaying their mortgage first before planning for their retirement funds. I know people like this. 

Then there will be what most people do... 
They pay off their mortgage throughout the years using their CPF, then they don't think about retirement and live it up.
Then when they reach 50-60 years old, they suddenly realize they need to retire eventually, then they start planning and stressing about it. 
I also know people like this... 

​Well, anyway, that's what we're planning to do with our loan. Our interest rate started at 1.88% and it's now 2.5%, and hopefully, soon it will be down to ZERO...


**EDIT**
My wife opened the bank letter. I didn't realize it was actually 2.455% and she rounded it up when she told me that the interest had increased to 2.5%.


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