Common People, Uncommon Cars

(02-06-2011, 12:35 PM)Musicwhiz Wrote: Very true. But Warren Buffett is more of a unique "species", haha. How many of us can truly reach that stage of "nirvana" where we can disregard our friends' and relatives' possessions?

this is probably one of the most powerful forces driving lifestyle decisions among adult singaporeans. when you have such a dominant culture of material achievement in such a tiny space, literally no one escapes from it. anxiety is injected by our competitors lurking around, checking on us. i guess that is why buffett highlighted the importance of the 'inner scorecard'. it helps to give us a longer term view of our investments, by being less emotional to external circumstances. not easy to master, but i suppose practice makes perfect.

I remember watching another documentary on CNBC where they were profiling the super-rich in America and how they were managing their finances. One particular interviewee struck me becos she started a successful business and managed to sell it off for a couple of millions (I think it was ard US3-4 million) but she said that she did not feel 'rich' even though she was a multi-millionaire. And the reason she cited for not 'feeling' rich was that many of those in her social circle are worth in excess of tens of millions.

According to the documentary, the magic figure before one feel rich was US10 - 12 million.

I suspect the same is probably true for those of us who strive to measure or benchmark ourselves against our peers or society. I have a very strong feeling that many in this forum will probably retire with more than 1 million in assets. But like the lady in the documentary, most of us will feel 'not rich'.

(02-06-2011, 12:35 PM)Musicwhiz Wrote: Even though I do enjoy living my own life according to my own rules and principles, I still need to benchmark against peers to ensure I continue to strive hard for success and not get lazy. Sometimes, I also do wonder if the amount of cash I have is anomalous with other couples my age (with a kid). When I see couples buying 2nd property and/or a car, it always gives me the impression they have a lot of wealth!

This is the part i usually don't understand. Why do we need to benchmark against peers or relatives or etc...?? What is the benefit or purpose?

I think the lazy reasoning is an excuse. If you have goals and vision of where you and your family want to be...that should provide you the motivation instead of your peers... If you follow your peers then you are just following another person aspirations which might not make you happy in life.....

My benchmark is based on financial freedom, meaning, would I have sufficient funds to lead a lifestyle that I choose. throughout the rest of my life. Am I prepared if I were to lose my job and not able to attain the same pay anymore or get a good job? Am I prepared to support my family in terms of basic needs of shelter , food, education etc. Am I prepared for health issues? Emergency etc.... retirement.

If I have catered financially for all these, then I am financially free.

Then I would look at things which are desires such as going on holidays to different countries to see how the world is or setting up my own small company to do work that i choose to work on instead of necessity . I will do work for free for charities or social organizations or projects which where the budget is low but the project is a dream project that I would like to tackle etc....

Ultimately, I don't "care" what my peers are doing, but I care more about that we can afford the basic necessities to live and then work towards goals we want in life. That would set out direction instead of our peers.

Don't you think that is better idea?

(02-06-2011, 12:35 PM)Musicwhiz Wrote: When I see couples buying 2nd property and/or a car, it always gives me the impression they have a lot of wealth!

I just had lunch with an old friend today. He recently sold his EA and moved in to stay with his in-laws. He sold his Lexus and bought a second-hand Honda. He is richer, but I don't know if he is happier.

(02-06-2011, 03:48 PM)flinger Wrote: This is the part i usually don't understand. Why do we need to benchmark against peers or relatives or etc...?? What is the benefit or purpose?

I think the lazy reasoning is an excuse. If you have goals and vision of where you and your family want to be...that should provide you the motivation instead of your peers... If you follow your peers then you are just following another person aspirations which might not make you happy in life.....

Don't you think that is better idea?

My explanation is that it makes me work harder to at least achieve the same level of career success as my peers. When I say peers I don't just mean age group, but also education level, degree and family demographic. The "lazy" reasoning is not an excuse to me - in fact if you know that for whatever reason you are lagging behind your peers in terms of career achievements then you could start to think about how to rectify the deficiencies. Some examples might be upgrading your skills, learning new skills, changing jobs to suit your speciality etc. If one did not benchmark career and salary, then one might just be contented and not strive hard to improve oneself. Just my opinion though - not that I don't think your idea of financial freedom is sound, but I also feel that we need some sort of impetus to continually improve. Of course, the downside is that too much comparing can also make you feel low and depressed (especially if you are on the low end of the scale).

In terms of achieving financial freedom, yes I do know what I want to achieve but the goalposts also keep changing as you age and your family circumstances change. So it's a dynamic thing, and cannot remain static. Hence, we should also continually improve ourselves in order to stay relevant and to make sure our goals are consistently met.

(02-06-2011, 04:00 PM)cif5000 Wrote: I just had lunch with an old friend today. He recently sold his EA and moved in to stay with his in-laws. He sold his Lexus and bought a second-hand Honda. He is richer, but I don't know if he is happier.

What was your friend's reason for selling and downgrading? If perhaps you can discern the rationale for it, then you can figure out if he is indeed "Happier" or not.

(02-06-2011, 04:49 PM)Musicwhiz Wrote: What was your friend's reason for selling and downgrading?

Hmm....I said he is richer and you see it as a "downgrade". See the problem?

(02-06-2011, 05:11 PM)cif5000 Wrote: Hmm....I said he is richer and you see it as a "downgrade". See the problem?

No offense to you, but I need to push my point. What was his reason for selling his EA and his Lexus? Every financial decision has to have accompanying reasons, unless you are saying he did it on the spur of the moment.

Since you are linking the change in lifestyle to a question about "happiness", my natural inclination was to ask if we could ascertain the reasons for his decision in order to deduce if he is happier or unhappier as a result.

(02-06-2011, 05:27 PM)Musicwhiz Wrote:

(02-06-2011, 05:11 PM)cif5000 Wrote: Hmm....I said he is richer and you see it as a "downgrade". See the problem?

No offense to you, but I need to push my point. What was his reason for selling his EA and his Lexus? Every financial decision has to have accompanying reasons, unless you are saying he did it on the spur of the moment.

Since you are linking the change in lifestyle to a question about "happiness", my natural inclination was to ask if we could ascertain the reasons for his decision in order to deduce if he is happier or unhappier as a result.

Well, actually none of those is my business, and that's the way I choose to live my life. If one keeps looking at what the other fellow is doing and how well or poorly or happy a life he is living, then misery becomes self-inflicted.

(02-06-2011, 05:39 PM)cif5000 Wrote: Well, actually none of those is my business, and that's the way I choose to live my life. If one keeps looking at what the other fellow is doing and how well or poorly or happy a life he is living, then misery becomes self-inflicted.

OK, yeah agree with you on this.

I wrote the below post below for another purpose:

http://singaporemanofleisure.blogspot.co...anger.html

But I guess it can apply here too.