Wow, I can’t believe it has been about 5 months since my last post in June. All I can say is, what a crazy time it has been. So much has happened to me and my family that I can’t even begin to describe what we went through. I’m going to summarise the big life events and their impacts. So you can imagine all the subsequent stuff that happened afterwards.
Birth of my 2nd kid
Let’s start off with the biggest life-changing event so far. There has been an addition to our family – 2nd kid (another boy) and he’s about 3 months old now. My wife is on maternity leave and it has been good for her to be able to stay home and take care of the baby. Of course, with my older boy (now 3 years old) running around, it gets loud with plenty of noise, tantrum-throwing in our household. Plus his antics wake up the baby (sensitive to sound and doesn’t sleep well) so there’s even more crying to go around. When my wife goes back to work next year, I reckon she may work from home initially since she has been in the job for a while and in the bank for a long time. Hopefully she can stabilise the household and head back into the office eventually. I would think she wants to catch up with her colleagues in the city as well and get away from the mess at home from time to time.
Change my job
I’m usually a bigger supporter of my wife in household matters but it has been difficult for me to be more present at home recently. Reason being I changed my job right after the birth of our 2nd kid. Yes, I know, not the best timing (an understatement in itself). I wouldn’t have considered doing something crazy like that if not for the pay rise, promotion and a chance to work in a competent team in a global bank. While it has been a positive experience in my new job so far, I have to put in more effort and longer hours at work. Because expectations are higher and I can no longer cruise like in my previous job. This means going into the office a lot more and being away from home. Hopefully I can work from home more next year after I get the hang of things just so I can help my wife out. Right now, she’s managing close to everything and that’s not sustainable long-term.
Big financial hits one after another
Not going to sugercoat how terrible my financial situation is now and it just keeps getting worse. Bad things really do snowball and it feels like I’m taking one big financial hit after another. It started with Hodlnaut going under and me writing off our BTC and ETH holdings there because I’m assuming zero recovery. Then the US tech stocks tanked because of the Federal Reserve raising interest rates to combat inflation. Followed by the rest of the global stock markets falling as well. Now the crypto industry is in trouble again because of what’s happening to FTX and the contagion effects. I thought we were well-diversified until I realised what it truly means to have the prices of all asset classes going down at the same time. Incredible times as I feel like there’s no safe place to take refuge in financially.
Our core portfolio of ETFs remains intact so I’m hoping that can act as the building block of our recovery plan. It doesn’t help that our cash level is low because of our private property purchase last year and continued Dollar-Cost Averaging into our investments this year. Next year, both our rental and mortgage expenses will increase significantly as we renew our lease and housing loan gets repriced. Plus we also have to buy a new car that is big enough to drive the family around in as the COE of our current car comes to an end. Not something I look forward to with COE prices going through the roof. Every other major expense (childcare and medical for example) will also be going up. Talk about a perfect financial storm. There are so many learning points that I just have to survive and put them into use. So our family can be more resilient financially the next time there’s a crisis as we mature and get older.
How are we managing it?
Just barely and it’s taking our combined monthly salary income to hold the fort. Even with the higher monthly salary income at my new job. I’m slowly rebuilding our cash buffer, setting aside cash for higher cost of living expenses, allocating cash into automated and manual Dollar-Cost Averaging for investments. I realised it’s a lot more difficult to repair our battered financial situation with a family. And so much tougher to recover from financial hits since I have to be more conservative to reduce risk-taking so it doesn’t blow our family up. When it’s probably a better time to be aggressive and take risks to take advantage of opportunities.
I don’t think my wife can search for and find a higher paying new job after returning to her current job from maternity leave. Not when she has her hands full managing the household. And I doubt next year would be a good time to move given the worsening recession we are in is causing staff headcount budget cuts that are being planned currently. This year is a better time to move as the staff headcount budgets were planned last year when the environment was more positive. And I have already changed my job to take advantage and that’s enough risk-taking on the job front for now. In short, she has to protect her job and keep the monthly salary income flowing in until we are in a safer position to take more risk. It feels like we are living on the edge and I will continue to provide updates here when I have time.
Hi,
Read your blog a few times. You write very well.
I wanted to say that you are doing good. While all assets prices have plunged, i am sure if you reviewed your private property and the fact that it was leveraged with a loan , you probably will realised that there are “unrealised” gains in this year in your overall networth portfolio.
On your approach, i am no expert. But you are in the phase of life that everything is screaming for cash and yes – holding your salary and jobs seems to be just keeping things at bay. I will only mention 1 point which i think you should consider- review your cash expenditure. When you were younger, your cash expenditure is way way lower and hence lower need for a cash hoard and then DCAing to equity is no brainer. At your phase of life, practice your risk management – What does Risk Management say about the strategy of hitting the markets all the time ? Is it a “real” winner ? What happens if you take a break year to build a strong cash hoard and buffer ? Does it really mean you would lose all opportunities and fail in your meeting all your retirement goals ? See the whole picture. Not the sales pitches Do the calculations and your probably arrive at your own answers.
And because you derived your answers after such calculations and back testing, you will have gain a better peace of mind. Peace of mind is priceless compared to a yo yo ride in wealth.
Wishing you and family well. It may be hard, but the a hard journey makes you appreciate it better when you reach the destination. God Bless
Good points in the earlier post by C Game.
Seems like its just a ‘rough-phase’ that you have to weather through.
Stocks will eventually pop-up, the time frame may be a bit longer though.
Just continue to ‘tahan’ through & control/monitor your expenses, I bet you will be in a much better position down the road.