Believe it or not, your views and attitudes about money can, and will, shape the way you make decisions about how much money you make or lose.
More often than not, our everyday decisions—what to buy or sell, how much to invest or save, how we make decisions on spending and/or investments—they're all consciously or sub-consciously based on what we perceive money to be, or how we make our money decisions.
Many people are brought up with the notion that "money is the root of all evil", or that "money can't buy you happiness". It is therefore not surprising that most people make bad judgement calls when it comes to spending or investing their money funds.
I've always been dead set against any notion that money is a "bad" thing to have. In my opinion, anyone who thinks "money can't buy you happiness" either has a lack of it, or has never experienced what it is like to have excess funds and money resources that allows him/her to purchase material tangibles that can directly or indirectly make them happy because they're better off than without.
Robert Kiyosaki, author of Rich Dad, Poor Dad puts a nice perspective: it is the lack of money that is the root of all evil. Odd that there are people who actually feel guilty about having money in their hands, and one reprieve is to try to get rid of their excesses instead of thinking how to further increase their resources on the one hand, yet at the same time, they constantly fret and wonder why is it that they never seem to get enough of money—particularly at times when they face an urgent need to cough up cash or have liquidity issues.
Here's a thought: money is neutral. It is a tool, an instrument, and a vehicle to help you get from point to point in your life, and enables you to have more options when it comes to lifestyle choices.
Not surprising too, that in light of the current financial crisis, many people find themselves not having enough to spend even on daily necessities, and surveys have indicated more than half the working population in Singapore don't have emergency funds (normally benchmarked at three times of their current salaries). So if anything should happen, like getting retrenched or should they resign from their current jobs, people get stuck in embarrassing financial situations—and I see that in many clients, particularly those in the 20-30 year old age group: the young executives trying to make their mark in their careers, and too caught up chasing the 4Cs (condo, car, club membership and cash) that pretty much shapes your social status here in Singapore (or most of Asia).
We get too caught up in consumerism and material pursuits, and on the one hand, while we would like to accumulate wealth, on the other, we give in to flashy advertisements and commercials who tell you to spend now and worry about money issues later.
Note that while I say money can buy you happiness, I would like to emphasise the need for informed choices and smart money spending and investing. For many young consumers who just joined the working world, they seem to get the notion they are infallible—I'm young enough to continue working for a long time, so why not buy whatever I want? Interestingly, it's this 20-30 year old age group of consumers who have virtually no savings or investments in financial products that help them accumulate future spending power, and HR professionals will tell you that this is also the age group that face the prospect of facing their first job retrenchments within the first 5 years of their careers—a worrying thought, if you asked me.
But back to money notions and attitudes: I think one thing we need to recognise and acknowledge is that the concept of "being employed" as we know it has changed over the past decade, and job stability is no longer something we can be certain of, particularly in the past couple of years.
I'll be introducing a new series designed to help you with money management matters, and recommend strategies and tactics to help you better regain control of your finances and help you accumulate wealth.
The overall strategy looks like this:
- Eliminate debt quickly
- Leverage on CPF
- Ensure your future expenses are taken care of
- Build stability
- Include additional sources of income
I'm not promoting a get-rich quick scheme here, but rather, I'm offering a down-to-earth approach to accumulating and consolidating your wealth, and am targeting those with low or moderate risk tolerances. If you're interested to learn more, look out for posts tagged under "Money Management".
