Financial Freedom SG

One of the fastest way to accumulate savings to use for investment purposes is to be thrifty in spending the hard earned money. Spend only what you really need.

Step 1- Think about your spending- Do you need that big cup of coffee at Starbucks? Would a small sized cup serve your needs just as well as a bigger one? Do you really need whipped cream in your coffee? What about buying coffee powder from the supermarket, sugar and creamer when you go grocery shopping for your necessities and stock up all these to bring to your workplace and put it on your desk. You would have saved the trip to Starbucks. More importantly, you would have saved some serious money. The $3-$5 a day may not seem like much, but multiply it by 5 days a week and by 56 weeks and it becomes $840-$1400 a year. I think I'd probably not get any Adsense from Starbucks. Read 'Undercover Economist' by Tim Harford and you will probably do the above to save money and instead invest the money into Starbucks. It is an eye opener and lets people who didn't study economics understand how this field of study is relevant in real life.

Step 2- Use the cheaper subsitutes- After the thinking phase, you can start to think about using a cheaper alternative. One example is the Starbucks example above where you subsitute it with a bottle of Nescafe coffee at your office. Another is the magazine subscriptions you have. Do you really need it? What if you could have read it at a neighbourhood library the very same magazine that you have subscribed? Like the coffee example above, it may not look like much at the start, but it will accumulate very quickly to a sizeable sum. Instead of eating at a relatively posh restaurant, you can subsitute it with an outlet where food is as good but the ambience may be lacking so that is why they charge low rates.

Step 3- Find alternative uses of things you would throw- Clothes that are to be thrown away could be sold on auction sites such as ebay where some people are looking for vintage and used items of clothing. There is a booming market for collectibles as more and more people gets online. So your 'rubbish' maybe another person's "gold".

As an add on to the post of the raising of the retirement age, I will talk about foreign talent in an article on Monday.