Tag Archives: singapore

What Is Going On With The Banks In The US?

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It’s been all over the news over the past couple of weeks that it’s not good news for certain banks in America, particularly Silicon Valley Bank, which announced its bankruptcy last Friday. Well this may not affect us directly, it’s very good to know what happened and of course why.

Silicon Valley Bank catered to many tech investors in the US, hence the name. It was taken over by federal regulators on Friday, leading to the largest bank sale in the US since the global financial crisis of 2008. Following this bank’s collapse, was New York’s Signature Bank on Sunday also collapsing, for different reasons due to its exposure to the crypto market. As you can imagine, the news of these led to a bank run last week, where depositors rushed to withdraw all their deposits from the bank. This inevitably led to the bond market swinging wildly, but why did this happen in the first place?

Like the age old saying, what must go up, must come down, and this is true in this situation. Catering to mainly tech developers and companies, Silicon Valley Bank boomed during Covid, deposits totaling over US$100 billion. Then, in 2021, when interest rates hit a record low, this bank invested billions of dollars into US Treasury bonds. Whilst bonds are generally safer investments, with steady gains, they only pay out in full if held to the maturity date. This poses a risk to bond investors if interest rates rise.

Lo and behold, we all know what happened-interest rates went up. This meant that Silicon Valley Bank had to sell at a loss. Not only was this a problem but it happened to come along with the whole tech sector bubble apparently bursting! We’ve all heard in the news and experienced friends, colleagues and family members possibly losing their jobs in the tech sector. Tech companies have been increasingly withdrawing their money from the bank. In order to comply with these withdrawals, SVB had to sell its bond holdings, at the loss of US$1.8 billion. Not only that, SVB also announced that it would be selling more of its shares, a hint that they require more cash! This shook its customers, causing even more people to withdraw from the bank.

On Thursday, customers at this bank try to withdraw 42 billion USD in deposits and the banks shares dropped more than 60%. By Friday, it was all over the Silicon Valley Bank.

While not all banks are in this niche of only catering to tech companies, this did spark concern about the banking sector, especially when the second bank, New York’s Signature Bank, collapsed on Sunday. This actually has had a knock on effect to more traditional banks; JP Morgan is down more than 7%, with Wells Fargo and Bank of America down more than 15%. Many bank analysts have stressed that there is no liquidity crunch facing the banking industry and that, it is more so a human fear that has gripped the market, and a self-fulfilling prophecy has been played out.

Luckily, those that had ties with the banks that have gone bankrupt, will have full access to their deposits, even those that exceed the limit of FDIC insurance. So at least there is some relief there for their customers.

President Biden remarked that the banking system is safe, but the markets did react strongly on Monday; we saw the US stock exchange go up and down with immense volatility over the course of the day. Not only that, government bonds yielded lower than expected. But the main thing that we must look out for is whether this will have any effect to the Fed’s decision next week…

The Federal reserve will meet next week to discuss whether it will raise its benchmark interest rates yet again. The rising interest rates have helped to slow inflation, but it has also devalued bonds and has somewhat led to the collapse of banks such as SVB. Hopefully, the Fed realises that if it continues to rise interest rates, more banks could fall victim. This might put the Fed under some pressure to ease the increases.

What does this mean for us in Asia? Well, luckily we may not be directly affected. For me personally, I see this as an opportunity to go into bonds when they are at a low. Generally, when equities are down, bonds are up. We have seen equities go down for Long time in the market now, which I hope means that bonds, after this little blip, will continue to go up. Of course, I cannot predict the market but I always see these kinds of situations as a great opportunity!

Hanoi Travel Tips

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I recently took a short trip to Hanoi. But what some may not know is that I actually used to live in Hanoi, Vietnam before I moved to Singapore.

Returning back to the city, I really felt like not much had changed, and I slotted myself right back in. But, I was conscious that to some, Vietnam might be a total culture shock; food is unusual, streets are manic and English is not widely spoken.

For these reasons, I thought it would be a great idea to share some of my tips, as an ex-expat in Hanoi and now as a tourist.

The Roads

This may be the number one most difficult thing to adjust to in Vietnam. Traffic lights are seldom seen or used, most people drive motorcycles and to an outsider it may seem like total chaos. But, this is actually not the case. There are several unwritten rules when driving (and being a pedestrian) in Hanoi, and if you know these tips it may save you a lot of stress and hassle.

Even though there doesn’t seem to be any rules, it is simple. Like a river, or a colony of ants, the traffic in Hanoi moves constantly and slowly. There are no jerking movements, no need to suddenly break, and so long as everyone consistently flows around each other, it works. So, how does this affect you as a pedestrian? Well, if you panic whilst crossing the road, you disrupt the system. Do not expect people to move, or stop, for you. Walk slowly, at the same pace and in the same direction across the road. You will find that vehicles will work their way around you. This is why it is very important not to run, not to change your direction, or to get scared and stop half way through. Maintain your pace (and your confidence!) and crossing the road will seem like a breeze.

The Money

When I lived in Vietnam, the money seemed easy, especially because at the time it was easy to convert in my head to USD and from there into GBP. Now, going back as a tourist, it’s very difficult to convert in my head to SGD (one Singapore dollar is about 17,000 Vietnamese dong). Not only that, a lot of the paper notes are similar in colour, so it is easy to get them mixed up. My tips for dealing with the money would be as such; whilst it’s tricky to always convert, be mindful of how much things should cost in VND. For example, street food, like a bowl of pho, should cost anything from 25000 VND to about 60000 VND (60k for a really large portion, or at a famous street stall). Of course at restaurants, this will be more, maybe in the 100000 – 200000 VND range, and beers tend to be very cheap wherever, costing maybe 20000 VND. (Actually, I used to drink at places where the beer was 7000 VND (about 40 cents) but that is at a really local spot). You can see that Vietnam is really a very affordable place to visit.

My second most important money tip would be, do not pay in USD. Many blogs, tour groups and travel companies will tell you to pay using USD. And they’re not wrong, you can- maybe stores in the Old Quarter will accept dollars, but you are going to be massively ripped off with the exchange rate. Cash is still King in Vietnam; not everywhere will accept card, but using American dollars is a sure fire way to lose money.

The Food

Vietnamese is my favourite cuisine of all time. There is such a range of healthy, fresh and delicious food, and it’s always at a very affordable price. I would say that street food is always better than restaurants! 

If you’re staying around the Old Quarter, there are some great famous spots you can try out, such as Bun Cha Nem at 6 Ngo Tram Street, Bun Cha Huong Lien 2 Obama (the one that Obama and Anthony Bourdain ate at), Banh Mi 25 & Pho 10 Ly Quoc Su. 

My favourite dishes are:

  • Pho bo tai lan- flash fried steak noodle soup
  • Bun cha- pork patties and belly in a fish sauce broth with fresh herbs and rice noodles, sometimes with spring rolls as an add on!
  • Bun bo hue- a spicy soup noodle dish originating from the old capital of Hue
  • Ca phe trung- Vietnamese egg coffee
  • Banh bao- a giant bao with spring roll-like filling, and two quail eggs!
  • Pho dat biet- ‘house special’ beef pho, with many different cuts of beef

If you’re not so adventurous, and want some safer options, you can try:

  • Pho ga- chicken noodle soup
  • Nem nuong- spring rolls 
  • Pho xao- wok fried noodles (bo means it’s with beef)
  • Banh mi – French baguette sandwich (trung is with egg, pa te is with a pork pate and xuc xich is with sausage)

Culture & Language

To be honest, even when living in Hanoi, I struggled with language. If you try and learn Vietnamese online, best of luck, the Vietnamese that they teach you on the apps is South Vietnamese- not what they speak in Hanoi!

In all actuality, even though many locals don’t speak English, they are more than happy to help, or try to understand what you are trying to say. So long as you are polite and don’t get frustrated, you’ll be fine. And also, saying ‘me oi’ is a good way to get people’s attention.

I hope these tips will help those planning on going on a short trip to Hanoi- maybe it’s your first time, or maybe you don’t want to feel like a tourist anymore! 

Reflection of Life Through the Pandemic

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Seen as yesterday marked the day where mandatory mask wearing was a thing of the past, I thought I would write a short reflection on my time in Singapore during the pandemic.

Just over a year ago I wrote an article about how I travelled home to the UK during Covid, adhered to all restrictions and still tested positive on arrival. Those who read that article would have remembered it was one of anger, annoyance and general frustration of the situation the world was in. Even though being on a Vaccinated Travel Lane flight, I still had to quarantine longer than those that were on regular, more cheaper flights, which generally left me feeling embittered about every rule and regulation.

I am here to tell you today that I no longer feel like this! I finally saw the light at the end of the tunnel and I’m so happy that things have returned to the way they almost were previously! I was so frustrated seeing other countries opening up and resuming normal activities, where here in Singapore I almost felt like we were going backwards. But I now realise that all of that has been for this moment.

As opposed to some countries who massively relaxed restrictions at the expense of their own people, or reacted too drastically and have been in perpetual lockdown, I am so glad to say this I am still in Singapore. Even though at times it may have felt like we were yo-yoing in and out of mini-lockdowns, we have to look at how far we have come; in comparison to our 2.2 Million cases, only 0.08% were reported to be fatal, which, to me, is a huge win for Singapore.

Vaccines

I do think this is due to the rapid response Singapore had in relation to the vaccine; 90.85% of Singapore’s population are fully vaccinated, in comparison to the global average of 71.8% of people being fully vaccinated.

Economy

I know that during a global pandemic, economy might be the last thing that some people think about, but it is a true reflection of the individual‘s ability to earn a living. It’s wanting having our health affected, but also having our money affected as well can be life altering for the worse. Although many lost their jobs during the pandemic, Singapore did surprisingly well at rebounding it’s economy. Singapore’s total output exceeded even the pre-pandemic level. This is in comparison to certain sectors in UK, US, and a lot of Europe, where we are seeing possible recession.

Tourism

And don’t get me wrong, Singapore was not 100% immune. Major sectors such as hospitality and tourism were massively affected here, and I could definitely see how quiet the country was during the lockdown. It was very sad seeing lots of great bars and restaurants closing for good, even after government support they could not withstand the pandemic. It was pretty depressing at times walking around Sentosa seeing a ghost town. I’m very glad now to see the city bustling and full again!

Mental Well-being

This definitely became a focal point of conversation during the past few years. I even wrote an article on how to have a healthy conversation without mentioning Covid- it certainly became the main talking point with my family back at home when we Skyped every weekend, and I know most people were becoming totally fed up of it.

I really do think that Covid-19 will have a long lasting effect in terms of mental health. A few generations in particular I think will be gravely affected. The first being those that turned 18 during the lockdowns. They had had no opportunity to go out to bars or clubs (most of them have closed down now, too!) and no opportunity to develop all the social skills that you get when meeting new people in casual settings. This also goes for those who went to university or even graduated during the pandemic; I think I would be a completely different person if I did uni online. Those years really shaped me as a person; I became independent, grew up and made my own mistakes. How will people who were indoors the whole time experience that now?

The second is very young children during the pandemic. I’m no psychologist, but I can’t imagine that a baby or child only seeing the same three or four people for the first couple of years of their life had a positive impact.

Of course the last is the older generation. Maybe I’m saying this because I’m far away from home, but seeing relatives after a few years makes you realise how precious time is.

I am glad that Singapore has seemed to embrace a more open conversation when it comes to mental health, and I don’t think this would’ve happened had we not had a pandemic. So I really do see that as a step in the right direction.

Work From Home

What really was great for my mental health was when Singapore re-opened slightly so that we could have a hybrid mix of working from home and also returning to the office. Don’t get me wrong, working from home is great, but sitting in the same four walls every day was becoming very mundane. I now love the option of being able to go into the office to work and see my colleagues and have that human social interaction when I can, but not having it be mandatory. Maybe also this is due to my work; in my old job here in Singapore, when I first arrived, the work environment was incredibly toxic. Even if we were genuinely ill, we were encouraged to still come into work, and if we did take an MC, it almost felt like we were being punished when we came back. I now think this kind of behaviour in a company cannot fly post-Covid.

Conclusion

If I were to summarise and look back on the past few years, I understand why many people left the country; the rules were strict and harsh and it’s felt particularly restrictive for foreigners, especially when we could see our own countries opening up. But if I’m brutally honest, I think maybe a lot of those people might regret leaving Singapore now. We have returned to a new normal which really does feel like normal. I barely talk about Covid really with my colleagues, and everything feels a lot more free and easy. This final restriction of masks on public transport being removed, for me, really symbolises an end to a horrible point in time for us and I look forward to all the things that the future in Singapore will bring.

What challenges are coming to Singapore in 2023?

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I didn’t want to start of the year with a depressing post, and I assure you it isn’t going to be one, but I thought it would be useful to people to be informed on the changes that are coming to Singapore that will directly affect us this year.

  1. GST Increase

As everyone knows, GST has now increased from 7% to 8%, meaning that things are generally more expensive. Not only does this apply for small things like going out for drinks or doing the grocery shopping, but I think people, particularly expats, will feel the pinch when it comes to paying for their child’s education. International school is already incredibly expensive, and with it being very difficult to get into the state schools, it is pretty much the only option for most people with families over here.That one percent extra makes all the difference, actually. I have Heard of a few international schools allowing the parents to pay for their 2023 bills in December, meaning that they are still paying at the 7% rate, but of course of December is over and moving forward it will be 8% across-the-board.

2. Rental

I’ve been talking about this topic a lot because it directly affects me and is most expats in Singapore, because most of us do not own a property here. Unlike the UK, which I’m used to very good laws that protect the tenants, Singapore does not seem to have this. There seems to be no glass ceiling when it comes to rental prices over here, and actually, a lot of expats when considering relocating to Singapore, should take into consideration how much of their salary is going to go on paying for rent! I do wonder when the rental prices will stop increasing, and I’m hoping that in 2023 it will stop, but there is no way to be sure.

3. Means Testing For Medical

From the end of 2022, the Ministry of health have decided to implement a subsidy framework across healthcare. This of course is to help those from lower income households, who may find medical bills too expensive. This method calculates the subsidies that people will receive based on their household income, so that the government can give assistance to those that need it most. While this is great for those who really need it, there are some factors to consider that will affect all of us. The first is opting for government hospitals instead of private.

Generally, going to a government hospital means that it is a lot cheaper than going private, but of course, this is more appropriate and best saved for people who really need it, on lower income households who qualify for the mains testing. Expats in particular are rarely included in these kind of schemes, which means that generally our healthcare will still stay as expensive. And don’t forget, the Ministry of health have also implemented a drug list, which means that if you are on medication that is not on this list, you may not be able to claim it on your insurance!

4. Inflation

This seems like a really scary word now, last year Singapore reached an all-time high with its inflation rate. While the Monetary Authority of Singapore has tried to curb this, by appreciating the currency and tightening policies to try and curb the upward prices, I still think that inflation will affect us in 2023. We can already see that things such as groceries and Energy bills have increased, what will this be like in 2023? I do think that the government has done a very good job at plateauing the inflation rate, but it has plateaued at a very high point. I am looking forward to seeing it decrease in the future.

5. Recession

While the unemployment rate was very low last year in Singapore, there is something that us as expats must think about; retrenchment. Due to the recent recession, we’ve seen a lot of companies cutting people on Employment passes and S passes, and employing more locals who they don’t have to fork out large levees or salaries for. Of course, this is great for the locals, and I do think that it’s wonderful to see a country put so much effort into supporting its local citizens, but this could greatly affect expatriates living and working in Singapore. Reshuffling of large organisations could mean relocation or retrenchment.

Not only that, I have seen a real competition for S passes due to the quota system. An S pass has changed a lot over the years, with its salary for some even being comparable to those on an Employment pass, but there is strict criteria and quota that each company needs to be able to employ someone on an S pass. Leading to shortages in some companies. Not only that, as we get older and we gain more work experience, our work passes become more and more expensive to renew for the employer. This could spike the increase in unemployment rates in the expat community.

Despite all of this, of course, I still love living in Singapore and consider it my home.

I’m sure that these things are just challenges that we will have to overcome, and will not continue forever. There have been worse economic periods in the past, this is not the worst that could happen! I’m still incredibly grateful to live in such a wonderful country. Here’s to a wonderful 2023 ahead!

Tips For Coping With Homesickness

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When I first moved to Singapore, it took me about six months to settle. I found it a lot more difficult to acclimatise here than when I moved to Hanoi. I feel like I made a few mistakes when I moved, so I wanted to share some tips on how to cope with homesickness, to help other expats not make the same mistakes I did.

Join Expat Meet-Up Groups

When I first arrived in Singapore, I had some friends come to visit me from the UK. While it was amazing to see them, I spent the first month or so with them experiencing all the tourist spots in Singapore. This made me feel like I too was a tourist, not a resident. Years later, I joined several meet up groups; not only was it a great way to make new friends, but it also made me feel like Singapore is truly my home, as I was experiencing all sorts of cool places, not just the tourist traps.

Get Out Of Your Comfort Zone

I really do think that trying new things and getting out of one’s comfort zone helps to break up mundane routine; having the same routine can create spats of great boredom can often leave one feeling lonely. So I do think that going out to new places, such as hawkers, parks or even MRT stations you’ve never been to, not only makes you feel settled, but breaks up a boring routine.

 Host Your Own Culture’s Events

This I think is a really cool idea; just because you live overseas doesn’t mean you have to skip all the holidays you would celebrate at home. I’ve been invited to Diwali parties, 4th of July gatherings and Eurovision parties in Singapore and I could really tell that the respective hosts really felt like it was home away from home. It was a great way to experience others’ cultures and customs, and it brings us all closer together

Stay In Touch

Keeping in touch with those from home is incredibly important, and with technological advancements, it’s easier now more than ever to keep in contact. However, I do think there is a right and a wrong way about doing it. I’ve learnt that setting a rigid time every week to call home, limits your flexibility; sometimes you may be out doing something, and having to rush home for a call can make you feel disconnected with Singapore. Calling home when you and are family are totally free and chilled makes the phone conversations much more enjoyable, and less homesick because you’ve been having a great time in Singapore!

Ultimately, moving away from home is hard, and whilst our family is not here, we are lucky enough to be able to choose our friends and who we spend time with. Surrounding yourself with understanding and supportive people, who are open to sharing experiences with you, will help you settle right in as an expat living in Singapore.

Top 5 Money Hacks For Students

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Moving to university is an exciting time- meeting new friends, experiencing new things and for most, living on your own for the first time. Whilst this may seem like a dauting new venture, it doesn’t have to be! Living away from home is an incredibly rewarding experience, when you can be your own self and learn life skills and become responsible. However, living away from your family comes with a lot of challenges; particularly money. If you’re wondering how to cope on your own handling your own finances, here’s my Top 5 Money Hacks For Students!

  1. Create A Budget

I’ll get the boring one (but the most important one) out the way first. Calculate your income for the year (or term if this is easier to calculate). This means adding up all your student loans, grants, bursaries and part-time job salary (if you have one). Then estimate your fixed expenses, like your rent or student housing, books, bills and groceries.

  Try and estimate what you have leftover. If you have a surplus, set aside a portion of this (maybe 20%) for entertainment & travel (university trips and holidays are a great way to bond with uni friends!) and the rest you can save for future needs.

2. Join The Student Union

The Student Union (SU) is a great place to have fun on a budget! Join a club or society for a small fee and these clubs will organise events all throughout the year. Most of these clubs have a budget set aside for these members’ events…minimising the cost for you! They’ll be movie nights, sports events, quizzes and maybe even meals at the SU for you to attend! *Bonus tip- food at the SU tends to be a lot lot cheaper than going to other pubs or restaurants.

3. Do A Big Shop

Studies have shown that doing a grocery shop once or twice a month is a lot more cost-efficient than once a week. But, how do you do this effectively, without over buying? First, write a list; try to include a lot of dry items that you can use for multiple meals, such as rice and pasta. I’d also recommend including tinned ingredients to your list, such as tinned tomatoes and different pulses and beans. These can be the base for many meals, such as pasta sauces, chilli or curry. Secondly, buy frozen vegetables or items that can be kept for a long time in the fridge or freezer. This minimises the chance of your food going off and you wasting good raw ingredients. Check your cupboards and fridges before your shop, whilst making your list, to avoid duplicating anything. And of course, shopping in large supermarkets is a lot cheaper than shopping at corner shops or convenience stores. Try and shop at these places as little as possible, unless you run out of milk or loo roll!

4. Be Conscious Of Your Electricity & Gas

I wish someone would have told me how expensive gas and electricity was! To minimise my bills, I seldom turned on the heating (blankets in student accommodation and cosy pyjamas are a must!), and make sure that lights are switched off when you’re not using them. It sounds like a pain but it really does help keep your energy bills down.

5. Second-Hand Is Awesome!

Especially for books! I remember my first week of university, I was told I needed to buy a specific biology textbook. I went straight to my local bookstore and bought a brand new one for a whopping £60! I used the textbook twice my whole university studies…a lot of my classmates bought the textbook second-hand for about 20 quid! From then on, I stuck to buying all my textbooks on eBay; it really saved me a lot of money.

These five tips are simple, but if implemented well, can save you a lot of money at university! Remember, having fun doesn’t mean having to spend a lot of money!

The Top Ten Most Expensive Cities In 2022

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Every year, Mercer rank the world’s most expensive cities to live in; the criterium is based off of things like rent, transportation costs and food. This year we’ve had a lot of volatility in the economy, exacerbated by the war, inflation rate and interest rate hikes. So, how did this affect the listings this year? Let’s take a closer look:

10. Beijing

Beijing is still a lot more affordable than the other cities on this list, but the main reason it has become increasingly more expensive is due to its population size. The city’s increasing population has caused rental prices to double over the past ten years.

9. Tokyo

Tokyo is in this list year after year. Japan in general is a country with high cost of living expenses, such as rent, owning a car and transport in general.

8. Singapore

Here we are, Singapore. No one is shocked to this here- over the past year rental prices have shot up astronomically and the lack of land will always mean that property purchase is expensive in comparison to other countries. Speaking from personal experience, going out for food and drinks can be particularly expensive, taxis, whilst cheaper than the UK, have increased over the past year and we all know owning a car is pricey in Singapore.

7. New York City

NY has always been more expensive than other places in the US, particularly rent. If you haven’t read my article, ‘Sex and The City, and Broke’, please do! I have always been baffled by how people on low to mid salaries can live comfortably in this city

8. Tel Aviv

A common theme on this list is rental; this seems to be the main reason cities land here, and the same goes for Tel Aviv. Whilst the city has a tonne of stuff to do for tourists, including bars and restaurants, this comes with a price tag. This means that rent for a one-bed, on average, is about 1725 USD a month!

5. Bern

We’re getting to the part of the list now where most of the cities are in Switzerland. A week-long holiday to the capital city would cost a family of four approximately $6000!

4. Basel

This city has a great art and history scene; Switzerland’s oldest university city is home to beautiful modern architecture and the world’s biggest art fair. This comes with a whopping price tag of living expenses of approximately $3000 a month.

3. Geneva

Similar to the previous Swiss city on this list, living in the luxury city of Geneva would cost you approximately $3500 a month. Very pricey!

2. Zurich

The financial capital of Switzerland sits at the second spot. It’s the most expensive Swiss city to rent, and the city itself is choc a block full of high shopping and decadent restaurants, so it’s very difficult to escape the high cost of living in Zurich.

1. Hong Kong

Are we shocked? HK has over 7 million people living in the city, meaning that the demand for housing is incredibly high. Not only that, food, transport and nightlife is also very expensive in Hong Kong. One thing I will always remember is watching a documentary showing people in HK living in literal cages, with a bed, TV and all their stuff. These types of housing have a shared bathroom and small kitchenette and can cost about 500 USD a month! That’s so expensive for such a small, cramped space.

In my opinion, I’m not shocked that the vast majority of these cities are European (40% of this list are in Switzerland!) and I’m actually surprised that London wasn’t now in the top 10 (it’s 15th). I did think that where we live, Singapore, would be higher because of the high cost of alcohol & rental, but I guess our lower taxes and the fact that the government are able to stop inflation and utility bills from getting out of control helps. All in all, this list is very useful when it comes to someone making a decision to move overseas.

Did this list shock you? Is your city an expensive place to live?

FIRE Movement; What’s it all about?

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The term ‘FIRE’ seems to be all over the news lately, what is the hype and what does it mean?

FIRE stands for ‘Financial Independence, Retire Early’, and this is a movement that we’re seeing as of late, whereby people are leaving the workforce as early as they possibly can. They do this by focusing on scrimping and savings as much as they can now, in order to save the maximum amount for their retirement. This means cutting down on all unnecessary expenses; eating out less or almost never, not taking any holidays, even working a part-time job on top of full-time employment to earn extra income, and using all of the surplus cash to stringently invest and save. This can be quite extreme; leaving the workforce early is maybe one of the biggest financial decisions of your life, so you need to make sure you have planned correctly.

There are actually a few kinds of FIRE, which I will delve into in this article.

Fat FIRE

If you like the idea of retiring early, but don’t want to drastically alter your lifestyle to the point where you never go out or do anything fun, then Fat FIRE might be a method that interests you. Fat FIRE appeals to those who cannot keep their expenses low; if you have a family you need to pay for education, schooling, groceries, school uniforms etc., which are often difficult or impossible to trim (you can’t ask your kid’s school to lower their fees, for example). So how do you achieve FIRE with higher expenses? The answer, a higher income. Fat FIRE only works for higher income earners that choose not to fully embrace frugality. You can see this may not be for everyone- getting a higher income is easier said than done as may require certain experience, knowledge, education and so on, that might not be applicable to all.

Barista FIRE

This FIRE movement does just what it sounds like; working part time (in a café or otherwise) to supplement your retirement income. This might work for a lot of people; even I myself don’t want to do nothing during my retirement. Getting paid to do a passion-project as a free-lancer sounds like an awesome way to spend my time. This method of FIRE means that you don’t have to completely cut out all lifestyle expenses during your working years, as you know that there will be a part-time income rolling in throughout retirement. This is contrary to the next FIRE method…

Lean FIRE

Lean FIRE Method is really the extreme, hardcore or by-the-book method. Lean FIRE means you really live that minimal lifestyle right into retirement. This includes tactics like bringing your own water bottle and packed lunch with you when you’re out, taking public transport or walking from point A to point B and downgrading your rent by renting out a single room instead of a whole unit. Even someone on a lower income can practice Lean Fire, and put their monthly surplus into savings and investments. This method of FIRE really reminds me of the show ‘Extreme Cheapskates’.

Coast FIRE

In my opinion, Coast FIRE is the most realistic and less extreme method; it’s actually quite similar to the advice I give my clients; invest early and as much as you can, and enjoy the compound interest later in life. The earlier you start investing, the better; you have a longer runway and more time for that interest to accumulate. Holding your investments longer also means that you are able to tolerate volatility in the stock market.

FIRE can be studied in depth and is an interesting movement. Later on, I will explore further as to whether this method is sustainable. But, what do you think? Will you be practising FIRE any time soon?

The 52 Week Saving Challenge

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If you’re struggling to figure out a way to save money effectively, or you find yourself always waiting for your payday to come in, here’s a great challenge you can set yourself and see how much you can save!

This challenge is very simple; during the first week, try to save $1, $2 during the second week and so on and so forth, all the way up to week 52 where, you guessed it, try to save $52!

You can create a savings chart or tracker so that you can ensure that you’re saving every week, and I would recommend putting these savings into a different bank account, so that you’re not tempted to spend it!

This challenge instils great saving habits, starting off small and working up towards a big goal, and by the end of the challenge you’ll have saved a whopping $1378! You can put this money towards a big-ticket item, or save it for when you graduate or any other life stage. And if that was too easy, try the 52 Week Saving Challenge, followed by doing it in reverse, doubling your money!

Give it a try and happy saving!

How Influencers Are Ruining Your Idea Of Investment

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I wanted to write this article because I’ve been seeing lots of posts on Instagram (mostly) of influencers promoting different investments, often suggesting they have made a lot of money using them (and it’s mostly involving crypto), and I have a problem with that.

  Social media influencers have boomed in the past few years and, what was once a farfetched and trivial job is now a very feasible full-time career that many are choosing to pursue. People can now make a living by posting review video and content…especially if those reviews are sponsored. A recent study showed that 37% trust the opinion of social media influencers over brands, with Gen Z and Millennials twice as more likely to trust influencers over Boomers. I think that this statistic isn’t shocking or dangerous overall; watching reviews of products you are thinking of buying is a good way of practising your own due diligence. But it’s when paid promotions of investments start cropping up where it becomes an issue.

  Speculation is a term used in investing, whereby groups of people try to guess how a trend, portfolio, or stock will perform in the future, normally with just surface-level knowledge or research. This investment strategy is very risky and can be a factor to why monumental crashes (like the Great Depression) happen. If you watch any influencer’s video that is promoting a particular investment, trading platform, NFT or cryptocurrency, you will start to notice speculation. They will start hyping the investment up, usually stating that it has earned them X amount of money in a short period of time, or make bold claims that it will continue to grow, despite market conditions being down. This is incredibly dangerous for young, impressionable consumers, who trust whatever product these influencers are selling.

  The truth is, yes, these investments have probably made these influencers money…because they have been paid to talk about it. It is highly unlikely that they themselves invest or trade the product they are pushing, on a regular basis. Or worse, they may be using a pump and dump method; whereby them hyping up the investment may make lots of people buy, and drive prices higher. They then have the opportunity to cash out, making money for themselves but making the stock crash, leaving you, the consumer, sat with a bad investment that’s lost you money.

  Believing these kind of posts and videos are so dangerous because usually the influencer does not have enough knowledge to be promoting such a product. These products are normally a lot riskier than most people’s risk appetites, and the influencer is probably unaware of all the fine print. In all honesty, the only people that should be giving advice on financial services are licensed professionals, and even then, it is not a one-size-fits-all situation. A doctor wouldn’t go on YouTube and tell everyone to start taking antibiotics, regardless of whether they are sick or not. The same goes for a financial advisor. Any videos giving financial advice should be taken with a pinch of salt; not everyone’s finances are going to be planned the same way and not everyone is going to be investing in the same thing. Investing should be tailor made to the individual, based on goals, time frame, budget and risk appetite.

  Of course, I’m not saying that any social media influencer that posts this sort of stuff is a bad person (everyone needs to get paid), but be cautious when you watch people pushing investment strategies that they are probably not implementing themselves. If in doubt, always ask a professional.