Growing up means taking on more responsibilities amongst other things. Gradually, you go from just worrying about how to spend your pocket money, to making sure that all your bills are paid. And from there, you start trying to figure out how to save up enough money to fund your retirement.
But how exactly are we thought to deal with money? From young, I was told “You need to save.” And while that is a sound advice, I’m starting to realise that saving is not the only way to wealth. Hell, it’s not even the best way. For the longest time, I thought hard work was the best way forward. And boy did I hustle. I was forever coming up with new business ideas, trying to buy low, sell high. It took me around 10 years to realise that while it was a viable income strategy, it was a fairly lousy wealth strategy.
So here I am, at the ripe old age of 32, greatly regretting my 20s. Not that I spent my 20s partying, but rather because I had no interest, no knowledge and no wisdom to look ahead, to learn about the world of investing, to learn about compound interest and even worse, always thought that “the stock market is not for me.” But hopefully, it is not too late.
I did a fair bit of reading before I got started on any sort of strategy plan. It was actually Scott Pape’s book The Barefoot Investor that really got my fire going. Suddenly, it seemed achievable! I was tired of living pay cheque to pay cheque with barely any savings. What in the world was going on? My income is definitely not within the low-income classification, so how come I can’t seem to get ahead when I’m not even spending that much? (I did track.)
It’s still early days, but patience is a virtue. I have put Scott’s advice into action (with some modification) and am now trying to learn as much as I can about investing while I am saving my pennies. Meanwhile, here are my Personal Finance Goals for the near foreseeable future.
BKLA: Personal Finance Goals v1.0
1. Short term goal: To cut spending.
Let’s face it. I was a spendthrift in my 20s. I would have way more savings to boast of now if not for that fact. But we all make mistakes. Mine was not realising that investing for everybody and how compound interest was powerful. Never mind. My goal for the next foreseeable future is to cut down the splurging. So by that I mean anything that is a non-necessity like groceries. I will track it here monthly so you can see how I went!
2. Mid term goal: 3 months of emergency funds
Ideally, I want 12 months. But let’s not get ahead of ourselves. I have no debt barring mortgage, so I really should be building this up. I do have income protection insurance and all the other grown-up insurances, but you can never be too sure, right? I do think that before I started on this whole personal finance journey, this was the part causing me the most anxiety – not having an emergency fund.
3. Long term goal: To pay out my mortgage within 20 years.
My loan term is 30 years. I’m aiming for 20 years, less if possible. By doing so, it would save me around 75k in total, so the incentive is definitely there!
For v1.0, I think that’s enough. It’s hard to bring it back to basics and only list 3 main goals, but I think I need to focus, and not spread myself too thin. Let’s see how I go!