My haircut

Recently a friend of mine was thanking me for a book I had given him called the Millionaire Mind. This book was written by a Stanford professor who was researching the habits of the rich, the truly rich. He first started looking at affluent neighbourhoods, the neighbourhoods with the lawyers, doctors and bankers with their designer homes and fancy cars. His findings surprised him as most of these households had amazing income levels but in terms of net wealth ie assets net of liabilities, these households did not rank high.

He decided to widen his search and what he found astounded him. In middle class neighbourhoods, he found modest income earners with huge net wealth. In most of his research, he found the number of millionaire's per neighbourhood predominantly higher in middle class neighbourhoods. He had found the basis of his book.

He continued working on his research focusing now on the habits of those modest income earners who were truly rich and comparing those habits against the high income earners who he found sorely lacking in wealth.

Now I was pleased that my friend was enjoying the book and more importantly he was relating to the stories in the book just as I had. But then my friend went on to say, you are not really following the tenets of the book. Now this surprised me and I asked him why? He raised his eyebrow and eyes widening as he normally does when he thinks he is about to say something witty, he replied, your haircut.

Of course he was referring to my 75 ringgit haircut where I get a scalp massage, shampoo and a stylist cut. And he was spot on. In that book that was the sin of the high income earners where they spent as much as they earn.

So yesterday I went for a 35 haircut and let me be honest I absolutely hated it. The cut was poor and I left dissatisfied. As I spent last night thinking about this (and everytime I saw my reflection), I realised I liked my 75 haircut experience and now I was left with this problem - how to reconcile my desire to be financially free while enjoying these luxury comforts.

This has always been my goal. I believe financial planning is not about delayed gratification but immediate gratification knowing and secure that your long term financial goals are being met each day. If I ever write a book that's the byline Immediate Gratification with financial planning.

The trick to this is to define your major goals. For me is to have sgd300k for each of my kids when they hit 18 for university fees, having buffers built up to cover my daughters' current and future school fees, having adequate insurance for my family to maintain their current standard of living and lastly retirement income for my wife and me when we hit 45.

Four major goals and every month we get closer to completing all four. Post that, we enjoy our time and certain luxury comforts. I believe my friend also gets this.

So here's to 75 haircuts and a Tiffany ring and snowflake pendant. Nice!!!!

d.


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