Panzer's Guide to Financial Freedom: It's Your Money and It's Your Life

swirler

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have been your follower for many years since I started working. Keep inspiring others! Thanks.

Creating Value Through Financial Freedom

It’s the June holidays and I brought my daughter to the Singapore Zoological Gardens to see the animals and experience a day out with her. It was a fun time although the weather was very hot and the perspiration was free with the Zoo experience

The zoo entrance fees are not cheap at $20 for adults and $13 for children (3-12 years) and yet many flock to the zoo on repeat visits.

It got me thinking about the value proposition that the zoo was able to create and still retain its customers.


Your Own Value Creation Process

The road towards financial freedom requires you to develop your own value creation process. For many of us, studying hard, getting a good job and sustaining that career is one form of value creation.

To do that successfully, we have to continously improve on our personal contributions to the organisation and the work that we do. That requires us to gain domain knowledge, acquire relevant skills to the workplace and to develop good working relationships within the team and within the organisation.

For professionals, our value creation process relies on some form of continuing professional education such as attending talks, seminars or conferences related to our areas. It also includes developing softskills such as inter-personal relationships, written and oral communication as well as networking.

If you want to know how to become financially free, you need to know how to create value in the conventional sense, i.e. through earned income from career or from running a business or from investing. This requires you to develop some capability to do so. Capability development comes from self-directed learning and attending formal training. For a start, I find that always reading in areas that I want to grow helps a lot.

Public libraries and a great free resource to read many classics in personal finance. That is how I read many of the books related to personal finance. Personal finance blogs abound and there are many blogs that talk about personal finance besides this one.

Value Creation Habits

Having a mindset on value creation extends beyond your career. In life, I believe if you give more than you get in return, good things happen. Of course, life can sometimes be unfair but I do believe in the golden rule of not doing onto others what you yourself do not desire.

Thus, I have been giving away my “Panzer’s Guide to Financial Freedom” that I wrote back in 2008/9 to many people over the years free-of-charge. “Panzer’s Guide” contains many of the thoughts and ideas that I have come across in my journey towards financial freedom.

Some of the habits that I started out in 2008 such as recording my expenditure has stuck with me and I feel uncomfortable if I don’t update my Excel worksheet on expenditure. Although I don’t focus too much on the specific amount of savings each month, I get a degree of satisfaction knowing that my spending is within the limits that I’ve given myself.

Value creation for financial freedom starts with us. We are the main income generating asset in our lives. We determine what and how value can be created for ourselves. We determine how that value creating generates assets that provide passive income or is used up in consumption.

Share with Panzer what are some of your own ways in creating value towards financial freedom.

Be well and prosper.
 

panzergrenadier

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Balancing Today’s Wants with Tomorrow’s Needs
Published 16 July 2012


I was again reminded of the never ending balance between today’s wants and tomorrow’s needs in my journey towards financial freedom.

One of my co-workers informed me that her older sibling had passed away suddenly after suffering a massive heart attack at a relatively young age of mid 30s. He left a spouse and two children.

We have talked a lot about the principles of financial freedom:

Live within your means
Save and invest
Grow your means
Protect your means

These principles help one to manage the trade-offs that we inevitably encounter in our path towards financial freedom. A recurring topic that comes to me as I ponder about the trade-off between saving and living a simple and frugal life against the fact that I may not be able to enjoy it if my lifespan is cut short by unpredictable events.


Balance

I recently finished the book, “Search Inside Yourself” by Chade-Meng Tan, a Singaporean engineer who made it in Google as one of its early batch of employees. His book basically teaches us practical ways to learn and practice meditation as a way to become more effective and successful in life.

At the heart of meditation is mindfulness. Mindfulness seems to easy in principle but so challenging in practice. It means to focus on what is around you and just to accept what is and not fret about what should be.

The essence of true living is to be fully engaged with each moment (positive or negative) that happens in our lives. Mindfulness and meditation help us to focus our attention on each moment as it unfolds in our lives. That is living instead of merely going through the motions of life thinking of happiness only when we achieve the next <insert your target in life>. I understand that lesson now after going through 40 odd years of life. My objective is to try to work on mindfulness and to practice meditation from now on till I draw my last breath.

Our modern stimuli-driven multi-tasking-multi-attention seeking environment makes it quite tough to maintain mindfulness in the midst of the tumult of things seeking our attention all the time.

This always-on, “24×7″ type of world is not condusive to our long-term well being if we do not develop the coping mechanisms to deal with it.

How do we balance today’s wants and tomorrow’s needs underlies the ability to truly live the principles of financial freedom. Even for me, it is a work in progress. I continue to discover more and more than I should allocate my windfall gains to things that will make me a better person such as learning a new language, practical skill or to travel to understand the physical world around me better.

I also start to bring my daughter to more fun places to explore together because I don’t want to leave it too late until I have no energy or time to do so.

Life is a series of challenges that we must navigate. We only do the final accounts to find out what our lives have meant when we leave this earth. In the meantime, each of us has to discover for ourselves how best to manage and balance today’s wants with tomorrow’s needs.

How will you achieve that balance?

Share with Panzer in the comments section.

Be well and prosper.
 

homer123

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No amount of preparation in Spore is useful if the global economy collapse or a huge disaster like a super volcano eruption causing widespread shortage of food /water/essential. Spore being a city state is too small and its high dependency on importing everything will be its Achilles Heel when catastrophe of those magnitude occur. As for the US , it is really a land of abundance. Most American will still survive hard times unless it is ground zero of a gigantic disaster. As a Sporean living in US, I know most of my neighbors know how to hunt and fish..The number of salmon they catch can last them a year as most of them also know to preserve the fish using smoker or put in a deep freezer in their garage. During autumn , like my neighbors, me and wife will gather enough wild blackberry, apple and plum to make into jam and dried fruit that will provide a one year supply for my family. Having access to food source and water supply is probably the most important to long-term survival. Storing them can only last you so long. In an urban environment like Spore, it is almost impossible to store 1 week of water supply.


Investing in Survivor Insurance
Published 12 April 2012

NEW Doomsday Preppers Nat Geo TV Feb 7, 2012 Commercial 2 - YouTube

One of the more interesting programmes I’ve watched on my iPad recently is National Geographic’s “Doomsday Preppers”. The term “preppers” refers to people with survivalist beliefs, that the end of the world as we know it (TEOTWAWKI) is near due to risks of nuclear war, over-population, collapse of US and global economy, massive earthquake (California), shifts in magnetic poles bringing earthquakes and massive weather changes, flu pandemic, terrorism etc.

These people prepare for the contingency that things fall apart in the societies where we live, with the social fabric torn beyond recognition and where breakdown of society leads to anarchy, chaos and violence.

It is not unthinkable for us in Singapore as we have lived through SARS in 2003, H1N1 pandemic in recent years as well as seen 9-11 terrorism attack in 2001 as well as potential terrorism threats from Jemaah Islamiyah internally. Partly because of these threats, some of my reservist duties in the Singapore Armed Forces involved protecting installations from these risks.

...
Do you think you will consider investing in a little “survivor insurance” for yourself? Hopefully it can be sold along with to the usual health insurance quotes. Have you already gotten a “Ready” or “72 hour” bag ready for emergencies?

Share with Panzer your thoughts in the comments section.

Be well and prosper.
 

panzergrenadier

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homer123

Thanks for sharing. You are spot-on that in Singapore there is not much land to live off, so in the event of real catastrophe, it would be anarchy to some extent unless the State is able to step in to restore order. Probably some emergency preparedness would help for the 3-5 days before things get sorted out, longer-term then it would be more up to prayer and divine intervention.

Be well and prosper.
 

panzergrenadier

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Living Within Your Means and Happiness
Published 24 July 2012


A large part of living within one’s means is to understanding happiness. If one is happy with whichever level of income, it is much easier to live within your means because you don’t need to rely on external things that money can buy to make you happy.

This youtube video on a TED talk by Shawn Achor (which I saw from Jared Seah’s “Singapore Man of Leisure” blog talks about happiness and success which I thought was useful to this whole idea of chasing financial freedom to be happy.


Similarly, I found that that financial freedom – which is a form of “success” in life, becomes elusive if we need our happiness to be derived form achieving it. We can be happy on the journey towards achieving it even as we have not achieved it as yet.

I am happy because I’ve found a way to moderate my own expectations about life and to be happy that I am able to work towards my target of being financially free. Simple things like watching humourous content on Youtube, having a nice food court meal and the occasional ice blended coffee drink or spending quality time playing and laughing with my daughter make me happy.

Just yesterday, I learnt that someone I’ve met professionally in a volunteer capacity had passed away from illness. He was in his late 50s or early 60s. Time and tide really does wait for no man. Procrastination on one’s bucket list gets more risky as each day passes. There is a balance between the quality of memories that we want to create and cherish versus the quality of our investible net worth.

Value for money. The ability to understand the trade-off between time and money as well as between living life and saving for the future is one that I will continue to manage even as more grey hairs sprout on my head.

Does living within your means make you happy?

Be well and prosper.
 
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panzergrenadier

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Cleaning up Clutter Towards Financial Freedom
Published 2 Aug 2012

I just did some cleaning up of old office files and documents that were accumulated before I joined the department. Some of the files go back more than 10 years. A lot of the documents filed in those old files were overtaken by events or were no longer relevant to our day-to-day operations and had little archival value.


De-Cluttering Your Own Life

There were some useful nuggets here and there that could be retained in terms of bits and bytes, so I scanned the documents that had some use as a reference for historical practices involving the organisation that could be useful. The other out-dated documents that went beyond the 5 years (generally accepted archival requirement) and were no longer useful for legal or regulatory purposes were sent to the confidential disposal bin for security shredding later.

This de-cluttering helps free up space in my office for our existing day-to-day documents and files which are mostly electronic. We only print out critical documents or file those we receive in hardcopy that is required in our day-to-day business. Most new documents are now created and stored electronically, which helps reduce paper use as well as storage space use.

The longer we live, the more clutter we accumulate. Clutter doesn’t have to be the physical doodads (reference used by “Rich Dad Poor Dad” author Robert Kiyosaki) or useless material stuff we collect in life. Clutter can come in the form of old fashioned views or thoughts that do not stand up to the scrutiny of time in terms of values and practicality.

Accumulating Experiences Vs. Accumulating “Stuff”

The more grey hairs that sprout on the sides of my head, the more I realise keeping clutter to a minimum allows me to live a better quality of life because I waste less time, energy and money in accumulating the doodads that do not fundamentally enhance my quality of life.

Less is indeed more in the road towards financial freedom. I now cherish the quality of relationships with my family and good friends rather than the thrill of having bought a new watch or pair of shoes.

I appreciate more learning new skills such as taking up a self-defence class for fitness and to know how to react in a life-threatening situation than looking at a new watch. Broadening the depth and breadth of human experiences gets more fun and joy that accumulating “stuff”.

How has managing the “clutter” and “stuff” in your own lives hindered or helped you in your own journey towards financial freedom?

Share with Panzer in the comments section.

Be well and prosper.
 

panzergrenadier

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eveloping Your Own Capacity towards Financial Freedom

Developing Your Own Capacity Towards Financial Freedom
Published 23 August 2012

When I reached 40 years of age and left the 30s behind, I realised that life was just beginning for me. My journey towards financial freedom made me realise that one of the key challenges of achieving financial freedom was my capacity to earn and to save.

How does one achieve financial freedom?

For me, it is to live within my means and to channel my savings from earned income into investible savings that will yield passive income sufficient to cover my living expenses. The key driver to saving besides spending less than one’s income is to increase one’s capacity to earn.

We live in a knowledge society that rewards the ability to solve business problems using our brains and to get things done with people. Besides our academic qualifications that grants us a passport start to our careers, our continued contributions to the organisation through our skills, experience and connections are what helps us in our careers.

Reading to Build Capacity

I am increasingly reading books to understand myself better and to be more effective in inter-personal skills. It is a challenge and I occasionally stumble in my dealings with people at work and in my personal life. One of the useful books I read recently was “Search Inside Yourself” by Chade-Meng Tan, a Singaporean Google engineer whose book is about meditation and its applicability to work and personal life. The other good book I read was “Learned Optimism” by Dr. Martin E Seligman. Dr Seligman’s book was very useful in understanding how learned helplessness affects many of us at one point or another in our lives and how it increases our susceptibility to depression. Depression affects our lives adversely and could have serious health consequences if we do not treat it.

“Learned Optimism” gave me some tools to assess my own degree of optimism/pessimism and the ABCDE cognitive tool in recognising and disputing our negative self-talk was most useful.

By reading these books and internalising some of the lessons and techniques (“life hacks”), they help build my capacity to be a more effective person at work and at home and it helps create opportunities for growth and also career development.

Read to Deepen Your Own Professional Knowledge and Skills

Developing our own capacity also requires us to do periodic research and reading into our own areas of professional skills. In my work as an auditor, especially when it comes to investigation cases arising from complaints or from audits, the ability to establish the facts of the case are important.

The interviewees you speak to do not always tell you the truth. Hence, I realised from attending a course and reading a book “Lie Spotting” by Pamela Meyers is starting to help me build the basic blocks of understanding when lies occur and how to get to the truth using some of the techniques I picked up at the course and from continued reading.

The older I get, the more I realise my own limited knowledge and skills and the more new areas of learning await me. Attending useful and relevant courses can be energising if you are able to identify and select the courses that you want to take. Continuing to push the boundaries of my own skillsets by trying out new stuff is the way to avoid stagnation and complacency.

How do you build you own capacity in what you do?

Share with Panzer in the comments section.

Be well and prosper.
 

panzergrenadier

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Financial Freedom "Gangnam" Style

How to develop your own style towards financial freedom
Published on 4 Sep 2012

PSY’s “Gangnam Style” music video is an electro-beat heavy, satirical and comedic, visually laden work of popular art that has seen it closing in on 100 million views in 2 months or so.

This post is not about telling you how great “Gangnam Style” is as a music video but rather to draw some interesting lessons on what we can learn from the video in our journey towards financial freedom.

The key lesson is to be unconventional. Those of you who are into k-pop or the Hallyu wave will understand that the industry churns out kpop acts consisting mostly of gorgeous model-like tall, thin and beautiful boy and girl pop-acts sprinkled with the occasional power male or female solo singer. Of course, there are some bands who play instruments here and there but many of the popular groups belong to the idol category.

PSY doesn’t fit into the typical kpop group mould. He is a solo singer/rapper but is in his 30s (compared to youthful kpop boy/girl groups debuting in late teens/early 20s), is not pretty/handsome by kpop standards. Hence, he is not made from the conventional cookie cutter kpop group/solo mould and has blazed his own trail for 12 years until “Gangnam Style” exploded with Youtube and its viral impact on social networks.

In our own journey towards financial freedom, I’ve emphasised that its the principles that count, of living within your means, saving and investing as well as growing and protecting your means. How to achieve it largely depends on you.

You can live within your means even with a luxurious lifestyle so long as you earn more than what you spend and still set aside something for a rainy day. No one says you must live on instant noodles and plain water to scrimp and save.

Taking the road less travelled

The challenge in walking the road towards financial freedom is that we get side-tracked in learning exactly how person A achieved his and person B achieved his. The reality is that there is no one best way. Financial freedom can be achieved through different ways. Some of us work towards being thrifty and having a high savings while spending on things that are meaningful to us. Some of us work towards taking calculated risks in investing in an asset class such as property or equities or even other more risky speculative ventures.

There is no right or wrong, you have to figure out what works for you and how you want to achieve financial freedom on your own terms and with your own rules.

I think part of the attraction of PSY’s video is that it is so unconventional and unlike any of the conventional kpop songs that it caught the imagination of Korea and the world. The upward spiral of popularity kept increasing as its online popularity translated into news media such as CNN featuring his video which made even mainstream tv news viewers interested in his video.

Have you watched PSY’s “Gangnam Style” video?

What do you think you can pick up from the video in your journey towards financial freedom?

Share with Panzer in the comments section.

Be well and prosper.
 

panzergrenadier

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Life is More than Bread and Water

Life is More than Bread and Water
Published 14 Sep 2012

I had an epiphany whilst walking along this journey towards financial freedom. It happened when I recalled my old Junior College schoolmate who used to sit next to me along with another friend during Mathematics C lectures. We used to be the “good” boys sitting at the front row of the lecture.

After we had completed our “A”-level examinations, we were enlisted in the Singapore Armed Forces for our mandatory two and a half years of military service. I still remember clearly the time I met him after Junior College was on Pulau Tekong, at Camp III near the cookhouse. He was doing some work and I happened to bump into him and say a quick, “hi”.

That was the last time I ever saw him.

I learnt whist in University that he had gone overseas to study in an overseas UK university on a scholarship. He later committed suicide whilst in the UK.


Black Swans and Unpredictability in Life

I have flipped through obituary pages on occasion and chanced upon a old classmate or schoolmate I’d known. Another person I recall seeing was at age 30+. During my NS experience, there was a regular death that I encountered during my full-time NS service in my early twenties and another during my thirties in one of the reservist in-camp training.

Whilst the life expectancy on average in Singapore based on 2011 Singstats data is currently is 79.6 for men and 84.3 for women, each individual’s life expectancy could be longer or shorter.

I have encountered those whose lives were snuffed out way before 25. I have relatives who at 91 are still lucid and with us. The epiphany strikes me when I recall these lives snuffed out. It reminds me of the Black Swans that are lurking, low probability events that if they happen would be catastrophic and devastating.

I was driving my daughter to her class one day and was speeding along a long stretch of road because I was running late. A car came out of minor road without checking and I had to step on the brakes hard to make an emergency stop or I would have surely collided with that car.

That made me angry at the driver but it made me more angry with myself for speeding and putting my daughter and myself at risk. As my father says, “it is better to be late, than dead on time!”

Smell the Roses

These occasional reminders of our own mortality make me realise that taking time-out to smell the roses along our journey towards financial freedom is also critical. We cannot predict when the next Black Swan event can hit, nor can we know if our lives can be near to the average life expectancies.

Now that I am in my early 40s, I realise that I can start to use some of the income from that networth to savour more experiences in life. Providing enriching experiences for my daughter by doing things together and to give myself the occasional pampering.

There is much beauty and joy in the simple things of life. As I am writing this post, I am playing the soundtrack to the film, “The Secret” (2007) by Jay Chou. The instrumental arrangements in the soundtrack is both calming at for some pieces, melancholy. The film itself is quite watchable.

I find it useful to remind myself now and then that life is more than just about bread and water. The basic necessities let me live. But am I alive to this world beyond the pursuit of financial freedom?

Be well and prosper.
 
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