From June 2007 i have been on the financial roller coaster. We moved to Singapore and that first year, juggling two households in Malaysia and Singapore took the toll on our finances. Then as we adjusted, we grew in comfort and i was doing well in my bank. Then my bank gets bought over in the largest merger deal in the world.
We were given assurances that all was well within the combined entities and then by June 2008, things started to get shaky with the trigger being the subprime mortgage market in the US. That was the start of this blog and my first entries spoke about this trigger.
Later that year we had Lehman go bankrupt and the world got real scary. Soon after my bank received govt aid and again we were given assurances that all will be well. My wife and i quickly applied for our PRs fearing that if i lost my job, we would have to pull the kids out of school. For those of you who know me, you will know that i plan for the big picture. And i reward myself everytime my wife and i achieve a major milestone - like having Ilyana's university fees covered or the kids school fees or having buffers in place.
That September 2008, i realised that all my planning did not take one big factor into account - a depression like scenario where unemployment could hit more than 20%. Now people all say that would never have happened but i saw it. I saw trade just shut down between countries and banks freeze all lending and the worst we saw was in Sep 08 to Mar 09. If the govts of the world did not step up and open their gates to stimulus and bail outs, we would have definitely seen a global depression.
I believe that a depression at this time will not happen but a slowing global economy and a shrinking banking system might.
With all this i reassesed our finances and i realised that for me having 6mths buffer was not enough as if i lost my job, there would be no guarantee of a replacement job. So from Sep 08, my wife and i have been on a mission to make sure we dont feel as insecure as we did then.
So all this makes me think about how valuable financial planning is. Let me make it clear, my goal one day is to start a firm back in Malaysia and the goal of that firm is to teach financial freedom. I dont believe in delayed gratification ie i dont believe in working 30yrs to enjoy the remaining 30. Financial freedom to me is the ability to know that my future is being addressed while i enjoy the present. Planning for the future, enjoying the now.
The trick to this is to define your major goals. For me my goals are 1) to have Uni fees covered for both my daughters when they turn 18, 2) to have their school fees covered, 3) to have a 2yr buffer account, 4) to have enough insurance to ensure that my family is taken care off and 5) retirement capital. Thats it just five goals.
I track how i am doing on each of this 5 goals every day. Now as long as i see progression in this 5 goals, i know that its ok to spend money and enjoy life as well. Coz i know the big picture is being taken care of.
Everytime i achive a goal, i buy myself a new watch to remind me of what my wife and i have accomplished.
I may write more on this topic as we go on as i truly believe that Financial Planning is essential to feel secure and happy. Its what i strive for and i wish you the best if you are on similiar journeys as me.
d.
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