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Health & Wellness

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Health & Wellness



Money, money, money

Note: Photo source 

It's said that the love of money is the root of all evils. What about the lack of money? Can we say that the lack of money is the root of all misery? I guess that really depends on one's interpretation about the need of money. 

I started working in the secular world since March 2007 at the age of 28. Kinda late? It's a long story that I don't intend to explain here. Starting off with a pay of RM1900 (RM1600++ after deducting EPF), I work and work with a mindset that money isn't everything. I'm not bound by any car loan or house loan. I just need to pay off my PTPTN (study) loan responsibly every month. Life is, I mean was, a breeze.

From 2007 up to now, I can say that I'm frugal in spending my hard-earned salary. I don't practice retail therapy, meaning I hardly ever splurge on shopping sprees. Once in a while I may go for good food but I rarely spend money on cosmetics, clothes, bags, shoes, and stuff. Almost never. Ask my sister. She knows my spending habits.

I do these monthly, responsibly, without delay:

1. Pay my room rental.
2. Pay my credit card bills.
3. Pay my PTPTN (study) loan.
4. Send money back to my mother.
5. Pay my mobile phone and broadband bills.
6. Insurance policies (auto-debit).

No matter how, I'm still kinda perplexed by how powerful the power of money is. The aforementioned monthly tasks actually add up to 63% of my current monthly salary! This prompts me to be addicted to save money. I need to be very frugal in both saving and spending the remaining 37%. That rules out the frequency to spend money on things that I actually want. But this isn't too big a problem. I'm trained since young to live my life as simple as possible.

Note: Photo source 

If I spend money like a shopaholic, then perhaps it's my fault. If I'm greedy, wanting this and that, then perhaps it's my fault too. However, based on my current saving and spending style, I dare say it's not my fault that I feel I don't live comfortably, or at least marginally comfortable with a little bit extra to splurge once in a while within spending capability. Correct?

In the midst of feeling like a failure, Pei Chyi sends me her blog link:
What is wealth?

This post is a response to her definition of wealth.

1. Be in as little debt as possible -- no credit card debts (yahoo!), really short hire-purchase loan terms (i.e. 5 years rather than 10 years), and flexible home loan terms (loans that allow you to reduce the % interest charged based on a reduction in amount owing). 

Me: I've cleared all impending credit card bills because I'm gonna start paying for my car installment starting December 2010 onwards.

2. Ability to save 20% of income every month without feeling like you don’t have enough spending money (i.e. you are not reducing your lifestyle to zero). I have an allotted amount of guilt free spending money which I use for shopping, food and entertainment, and really spending it without guilt! 

Me: I'm making an effort to set aside some extra money apart from my insurance policies and EPF. At the moment, I can save up to 13% max. Maybe I can increase up to 15%, hopefully.

3. Invest 10% of income every month automatically for long term returns. 

Me: I bet insurance policies and fixed deposit are counted.

4. Pay my income tax yearly, responsibly. 

Me: I only need to start paying income tax for 2009 onwards. 

5. Review and minimise commitments and eliminate the unnecessary (i.e. review Astro packages, mobile phone plans). 

Me: I only have to pay for my mobile phone and broadband plan bills, which is within RM100 maximum.

I know I am rich when I can live comfortably without worrying about needing to make more money to maintain the lifestyle I've chosen; or indulging in yearly holidays without having to sacrifice something else for it. I know I am rich when I have the minimum amount of debt I'm in (so why dream of having a big house or drive a big car when I can be debt free quicker with what I have now… see the point of having just enough?). I know I'm rich when over the years I've extra income that I can grow my investments or save even more!

Me: This paragraph comforts me. If I measure my current lifestyle according to this paragraph, then I can consider myself rich! :D

When we take away our greed factor, take away the comparing attitude, and take away the mentality that wealth means having everything big and great, you'll find that you enjoy living your life more comfortably and you're happier with what you have. We need to find that sweet spot of being contented and having enough. We'll never be rich if we keep growing our commitments every time we have extra income -- instead of improving our well being we're putting ourselves in more debt!

Me: Interesting. That's true. I believe I need my mentality about money to be re-calibrated. Or perhaps I just need a higher pay?

So, what about you? What's your say?

Updates: 4321 Personal Financial Planning

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