I know. 2nd post on my blog within 24 hours. Not to mention more recent updates of our net worth (not just liquid assets anymore but minus the value of our mortgage and personal loans, urgh), cryptos and robo-advisors for Apr 2023. What’s happening?! The past 6 months felt like a whirlwind of life and financial events, mistakes, self-correction, strategy and mindset change. If you have been reading my blog from the beginning, you would know balance (personal, professional, financial, etc) is a very big feature of what I write about. At the start, it was just my wife and I. Over the years, we added 1 kid, 1 helper and now a 2nd kid. So you can imagine how the concept of balance has changed drastically with time. And how much tougher it is to maintain.
As a family, it’s obvious that our lifestyle inflation has gone through the roof. But why? Because I believe in lifestyle optimisation as well. I don’t always get the trade-off correct but I do think it’s important to keep working on this. I have to be living a life that I want to live. Otherwise, what am I living for? As I get older, this has become my litmus test for whether I’m getting it more right than wrong. Granted, there are times when I get it really wrong and have to work hard to dig myself out of the sinkhole. Like what is happening now but it still has not changed my life approach.
At this time, I feel like I have done enough to optmise my life to a point where my expenses climbed higher and is starting to stabilise. I have paid more to be close enough to amenities, public transport, schools and our offices. We are playing the game of efficiency – how do we use money to optimise the use of our time and in turn, how do we use time to optimise money. For now, we don’t see ourselves getting promoted without a big step up in terms of effort. This is not going to happen as long as we are not willing to sacrifice family time with our toddler and baby. It also means that our salary and bonuses will either increase marginally or stay the same in the next few years. Knowing this, we will put in enough effort to keep our jobs, put an average to above average performance and that should be sufficient to achieve this. No need for outsized effort that will not translate to a significant increase in earnings.
Time saved jobs wise can be deployed into our family & personal interests, managing investments, etc. Doesn’t mean we waste time on non-efficient returns. I used to be more particular with maximising returns e.g. chasing the higher cash rebates on credit card spending, jumping through hoops to earn higher interest on bank accounts, etc. That extra 1% to 2% translates to just one to two hundred dollars worth of cash benefit a year. Not worth the effort in spending all that time analysing and maintaining the conditions needed to attain it. I prefer to keep things simple now with minimal effort and maximum automation to achieve the return. If manual intervention is required, it better be worth my time with outsized returns.
For example, I’m not going to over-think whether I should put my cash savings into 6 months and 1 year T-Bills compared to similar time horizon Fixed Deposits. Latest 6 months T-Bills cut-off yield is 3.75% pa and 1 year T-Bills cut-off yield is 3.58% pa – minimum investment is $1,000. Latest UOB 6 months Fixed Deposit with minimum amount of $10,000 is 3.55% pa. After keeping sufficient cash on hand, I use the remaining cash to place at least the minimum amounts when I can and roll over at maturity as long as interest rates remain high. We are talking about less than 0.5% pa worth of difference in returns and that’s enough analysing. Fixed income investments still require manual intervention but interest rates are high enough to justify the effort. Which really just takes minutes to apply online so it’s not difficult. Even if I leave it in my high interest bank accounts, the minimum interest rate of 2.50% for salary crediting, credit card spend or GIRO conditions is not a bad outcome for doing less. Equities investments with Dollar-Cost Averaging are fully automated.
Which leaves me with market timing equities investments. I don’t want to think about whether time in the market beats market timing. I just set both up. Dollar-Cost Averaging gives me time in the market so I can market time. Because when I build up that cash holding even more. I’m going to swing for the fences the next time a market crash happens. And it will happen because something unexpected is always brewing and waiting to happen. The question is whether I have sufficient cash reserves to make a big play when the time comes. Instead of messing around with market dips and getting distracted by minor plays, I’m going to focus on bigger market structural trends to improve my long term positioning for the major plays.
When it comes to our jobs, flexibility allows whoever is in the office gets to have their own personal time to work, gym and run personal care appointments. While the one at home keeps the family stuff running – school dropoff & pickup, groceries shopping and medical appointments. Neither one of us goes crazy managing everything and we both get to the weekend in shape for the entire family to spend more time together. In between, I fit in the time to repair the financial damage done and lay the groundwork for financial progress. It’s a delicate balance but life will always be like a juggling act of priorities but you do get better with practice.
The past 6 months felt like we were just struggling to survive. We kept going and you know what happens after surviving, it’s called thriving. Because all the hard work done in survival mode will result in the necessary lifestyle & mindset changes and improvements to thrive later on. I picked up better time and people management skills. I have a greater appreciation of time value and how to use it in my favour. Practise hard enough and something difficult eventually becomes routine. All of a sudden, you start to free up even more time because you get quicker in achieving the same result. I’m blogging again and that’s a good sign for myself. Just hope that I can keep this up!