Real income divide

[wsreader]

".....Then what?...."


People typically then re-focus on the wider perspective, ie bring benefit to society/country/world.

[greypiggi]

The thing is that I recommend getting richer slowly. If possible don't have a sudden windfall.. cuz I find we get used to new stuff quite fast. Research has shown a new house excites or and pleases for about 1-2 years. I totally agree.new car same... Hermes bags prob 6 mths. So if one gets too much money... Life starts to get jaded fast.

To me ideally struggle 10 yrs to make 1m, take another 5 yrs to get 3m, 5 years to Get 6m and retire after another 5 years at 48-50 with 10m would be good pace.

I completely agree with this. The problem with getting rich quickly is that you don't have a good sense of how to manage your money, as it was obtained "without much blood, sweat and tears". Thus, you end up not appreciating the money as it was not hard-earned. This is the case with lottery winners or those with huge inheritances from their grandparents - they spent the money in a jiffy and often on bling and other inconsequential items.

As one grows money slowly, one also learns how to manage it better, and proper money management and financial management skills are life skills which cannot be taught in schools. They do indicate a sense of maturity - as compared to a person who cannot handle money (I would think he was immature).

As for slogging 10 years for the first million, yeah I can identify with it as I am in the process now haha! But it's a good journey and I am learning a lot and enriching myself with knowledge at the same time.

Hi Musicwhiz,

actually even people who worked hard for their money through sweat and tears can be affected. For example, you have been living well on $200K a year and have an annual income+dividend of about 300K as a decent entrepreneur. Suddenly you come into 10M or 20M due to sale of company, you will be suddenly lose sense of value for a while. Suddenly, spending $5-10K on a watch or bag or jewellery becomes really no big deal when just 1 month ago it was very painful. Your investible sum balloons from just maybe 500K to 1M to now 15M.

So i would say this being unaccustomed to money applies to hardworking people too. In fact i would argue those who inherit and better positioned to know what to do, having lived and been immersed in the lifestyle and know the nuances if they learned from their parents.

[Temperament]

The way we handle money/material are also depend on quite a lot on our "DNA". In every family among the siblings, some seems to save and invest quite naturally. Some cannot understand what is delay gratification. i am sure everyone of us have witnessed this type of differences among siblings. So how much is due to nurture? How much is due to nature? i am very interested about business whether passive or active, so i schooled myself all the way until today. So is it because of my nature that i seek to nurture myself?
Vice versa is definitely so much more difficult. Even if possible the result may be mediocre for some people just not interested in investment.
So how you handle your money is also partly(or mainly) due to your DNA. i don't think nurture in this case can do very much if your DNA don't want to co-operate.

[greypiggi]

The way we handle money/material are also depend on quite a lot on our "DNA". In every family among the siblings, some seems to save and invest quite naturally. Some cannot understand what is delay gratification. i am sure everyone of us have witnessed this type of differences among siblings. So how much is due to nurture? How much is due to nature? i am very interested about business whether passive or active, so i schooled myself all the way until today. So is it because of my nature that i seek to nurture myself?
Vice versa is definitely so much more difficult. Even if possible the result may be mediocre for some people just not interested in investment.
So how you handle your money is also partly(or mainly) due to your DNA. i don't think nurture in this case can do very much if your DNA don't want to co-operate.

u are right too. read in a report lately about how how people who are predisposed towards near term pleasure actually have more activity in certain parts of their brains compared with people who can delay gratification. So definitely DNA plays a part. However, I would argue nuture matters a lot. Our money habits are frequently formed by what we learn as children, teenagers and what we observe from our parents. Just think of the close people you know and it will be quite evident. (at least for all the people i know it is quite clear family environment plays a huge part).

[Musicwhiz]

Hi Musicwhiz,

actually even people who worked hard for their money through sweat and tears can be affected. For example, you have been living well on $200K a year and have an annual income+dividend of about 300K as a decent entrepreneur. Suddenly you come into 10M or 20M due to sale of company, you will be suddenly lose sense of value for a while. Suddenly, spending $5-10K on a watch or bag or jewellery becomes really no big deal when just 1 month ago it was very painful. Your investible sum balloons from just maybe 500K to 1M to now 15M.

So i would say this being unaccustomed to money applies to hardworking people too. In fact i would argue those who inherit and better positioned to know what to do, having lived and been immersed in the lifestyle and know the nuances if they learned from their parents.

I think we are on the same page here - essentially we are both saying a sudden windfall (whether lottery, or selling your business for $X million) will make you go a bit nuts in terms of how to handle your sudden wealth, and you may start binging on stuff. As long as your total assets figure changes dramatically, it will have a strong psychological impact on any person (it's just human).

As for the nature versus nurture, it's been debated to death. But I am of the camp who believes it is almost 99% nurture, and 1% nature. Most of what I observe (anecdotal evidence) seems to point to personal finance habits being a product of peer pressure, family and environment.

[Jared Seah]

LOL Orang!

Your "then what?" power!

We don't have we want. After we have, we worry we will lose it... There lies the condundrum...

[Temperament]

LOL Orang!

Your "then what?" power!

We don't have we want. After we have, we worry we will lose it... There lies the condundrum...

Hi SMOL,
While alive, we accumulate & accumulate; afraid that we may not have enough one day. And the one day will come, we realised all is in vain. We come naked, we leave naked. So shall we do something for the greater good when we manage to cross over to the Financial Independent side.(Don't have to work for a living point)? Hopefully i can have those days in my later years.

[Jared Seah]

We can and will Temperament!

I am now changing my mindset that Financial Freedom or Independence is a target or milestone or specific goal. Once we reach THEN we do this do that.

I do what I want to do NOW - within my means. Cannot afford 3 stars hotel, I stay hostel lor! Cannot afford hotel restaurants, I eat at food court. Tithing a few dollars here and there during my "guest" appearances at churches or temples, this I can do. Only regret is I never volunteered my time... Too self-absorbed. Always what I like to do next...

I think the best retirement plan is an "activity" that I enjoy! Never retire (it doesn't mean we have to be paid for it, or have to be a proper job) from having a reason to wake up in the morning

[Big Toe]

Live simple. Live happy.

If something gives you too much grief on a permanent basis, ditch it.
Most people do not enjoy what they are doing. Switch to something less painful or something joyful.
For those who enjoy what they do and get paid for doing it, it is a blessing.

Ironically, the folks who enjoy what they do are the ones who worked hard to get themselves there and are still working hard.
But they find work enjoyable so it is easy to do what they do.

The folks who do not like their job find working very difficult and often force it upon themselves to get the results they desire.
As with many things in life, if it is forced upon oneself, it will reach a breaking point, it is not sustainable.

Too many folks are afraid to try for fear of failure, for fear of losing a comfortable income.
If you are going to hold tight to a 50cent coin, how can you reach out for something better?
The biggest losers in life are the ones who are afraid of losing, afraid of trying and failing.

Retirement is somewhat like a destination. To me, it is a non event. It is the journey that counts, not the destination.
Most people are so focused on retirement that they forget that they are in fact, living in the present.
The present is just as important.

When it's time for you to retire, it will come as a surprise, even though you waited all your life for it.
"Then wat" comes into play. Working full time maybe a chore, but finding things to do during retirement
may prove even tougher.

[swakoo]

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