How to get free food, part 1

If you could have an additional $400 a month, how would you feel?

Back when financial planning took up the bulk of my time, I was surprised at the lengths that people would do to earn a few hundred dollars more every month. Some would write a book. Some would give tuition. Some would put in a few extra hours every day to get a promotion and pay raise. Some would spend all their weekends at a side job.

So when someone I just met gave me a way to have an additional $400 a month, I jumped at the chance. And it was life-changing. He gave me one project to try out:

Ask your neighbours to give you their leftover food.

He told me that one of his neighbours was on public assistance (PA). PA is reserved for needy Singaporeans who are unable to work due to old age, illness, or disability. Back then, she used to receive $400 a month from the government, $200 NTUC vouchers, and $100 hawker centre vouchers. Being needy, she qualified to receive food from multiple sources, including bread from 7 different sources.

She was never hungry and, in fact, very often had too much to eat. So she would share the food with her neighbours, including this friend of mine. The food he received was actually more than enough for himself, and his two tenants, and he often struggled to close his fridge door because it was too full.

Now when I first heard this, I didn’t believe him. I mean, who would? Do you?

But I kept an open mind, and decided to try out what he said. Back then, I had 3 neighbours with whom I was cordial with. When we saw each other in the lift or in the common corridor, we would wave to each other and say hi. But we didn’t really know each other. Most people in Singapore don’t really know their neighbours, and we were no different.

So it took some courage to approach my first neighbour. One afternoon, I heard her wheelchair backing out of her flat with a familiar ‘beeee-beeee-beeeee’. I opened my front door and went to talk to her. I told her that I was doing a project and asked her if she often had leftover food.

She said yes.

I asked her what kind of leftover food she usually had, and what she did with it.

She said that she receives food from a charity twice daily, because of her advanced age and health. She also had little savings and proceeded to tell me what happened to all the sales proceeds from downgrading her property. She said that because of her illness, she is unable to eat all the food that the charity gives her, which was often about half to 3/4 of what she receives. But she did not want to cancel the daily meal because there was still some of the food that she could eat. The balance? She threw it away.

“Very gek xin (heart pain),” she said. She knew she shouldn’t waste food like that, but what choice did she have?

Could she give me the food she didn’t want, I asked. I had a use for it.

“Oh, you want it? Here, take this,” she put into my hands a packet of rice.

“Thank you,” I said to her.

“No, don’t thank me,” she replied. “I should be thanking you. Because you take the food, I don’t have to waste it.”

I thought about it for a while, then said, “Since you regularly have leftover food, how about everyday, when I come home from work, I knock on your door and you can give me whatever leftover food you have?”

She shook her head and said, “I don’t want to trouble you. Whenever I have leftover food, I will climb in my wheelchair and come to your flat and hang it from your gate. You put one hook there for me.”

Her response overwhelmed me. For the next 15 months, I would receive food almost daily from her. In addition, she would give to me all the fruits and food gifts she received that she could not consume. This included oranges, packet drinks, Milo powder, instant coffee, canned food, and so on.

The one I hated the most was the Yeo’s curry chicken, which apparently is often given to the needy. I hated it because the chicken was full of bone fragments. Most of the time I just heated it up and gave it to my cat to eat. I think charities should themselves eat the food that they give to the needy. No wonder the needy sometimes throw away the food instead of eating it.

Anyway, back to my story.

Encouraged by the positive response, I approached another neighbour. This neighbour isn’t needy. She stayed with her husband but rarely cooked. About once a month, she’d invite her relatives over and they’d talk through the night. She often bought them snacks to eat, but no one (except me) finishes all the snacks offered. So as the host, she was often stuck with a lot of snacks that she didn’t eat. She gave them to me.

She also had a lot of expired food in her cupboards which I asked her not to throw away and, instead, to give it to me. She knew it could be eaten, but nevertheless, preferred to throw them away and buy new ones. I don’t know why.

And finally, she had fruit offerings every day. I learned from her that fruit offerings can be consumed. She normally eats them, but often, especially on festivals, there’s just too much for her. She gave all these to me as well.

She once gave me a pomfret that she bought for Chinese New Year, but never cooked. Many people do overbuy. Then the food is kept in the freezer or cupboard until it spoils. Or it’s just kept. And kept. And kept. Then thrown.

This neighbour felt it was not good to throw away food, but what choice did she have? Now she had a choice. She could give it to her neighbour (me) who would happily consume it.

All my neighbours that I approached were glad that I approached them. For now, they had someone to give their excess food to. They no longer had to feel the ‘heart pain’ of throwing away food that they had too much of. And of course, I was very glad I approached them to. Because I no longer had to spend money to buy food.

With the money I saved on buying food, I now had an additional $400 a month. I was elated.

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An untitled post

I realise that I hardly write in this blog, and it’s been about 9 months since I wrote here. The only reason I decided to write a little tonight is because I just renewed the domain name and thought I might as well use it.

Let’s see. What has happened in my life so far?

In Feb this year, I co-founded SG Food Rescue with Judee Tan. It is a simple idea. We saw that food businesses are throwing away tonnes of food every day, and that there are 1 in 10 Singaporeans can’t afford nutritious food. We decided to transport the food from point A to point B.

We got a whole bunch of people interested in this very simple idea. I guess it’s true what they say, the best ideas are the simplest ones.

Right now, we are exploring how to make this simple idea a sustainable one. To be sure, we will need to hire a full-time coordinator by the end of the year. The systems and processes are in place already, so we just need someone to keep things running so that we can explore new things.

But I also wonder if hiring someone will unnecessarily complicate things. Mainly because it introduces money into the equation. Then suddenly, what people have been doing out of goodwill and fun becomes transactional. Is there a way we can keep doing this without introducing money into the equation?

How I go cashless in Singapore

I don’t get what’s the big deal about going cashless in Singapore. Since April this year, I’ve gone completely without cash, and that is a real time-saver.

I admit, the first few times I chose to leave home without it (cash), I was filled with anxiety. What if I needed to buy something and they don’t accept NETS or card? How will I pay for it?

My solution was to remind myself that ATMs are ubiquitous, and I can easily withdraw money anywhere else.

I’ve never had to.

Then again, I’m a special breed of people, because I don’t buy things. More on that later.

One of the fears that people have about going cashless is that they fear that they would not be able to keep track of what they’re spending their money on.

This is unfounded.

Actually, going cashless better helps you to keep track of what you’re spending your money on because every transaction is recorded online or in your bank statement.

If you’re worried that you don’t know where your money is going, let me tell you that you have that problem even now when you’re using cash. The problem is that you don’t even track your expenses today. That’s why you don’t know where your money goes.

I started tracking my expenses back in 2007. First on an Excel spreadsheet, and later, on an expense tracking app on my phone. Every month, I check my transactions against my app to make sure I didn’t miss anything.

Nowadays, I have 10 to 15 transactions a month.

What are they?

  • Mortgage payments
  • Conservancy fees
  • Insurance premiums
  • Long-term savings / investments
  • SP Services
  • Mobile and internet subscription (all in a single bill)
  • EZ-Link GIRO top-up

Sometimes I have 1 or 2 more miscellaneous payments. But that’s about it.

All my payments are automated by GIRO. That includes my bills and my EZ-Link card top up.

Because I track my expenses every month, I know exactly where all my money is going.

That’s the first secret. The second secret is this:

I don’t buy anything.

I don’t eat out because I get free food delivered to my home every day. My neighbours share with me their excess food that they can’t or don’t want to finish. I share with them my excess food — those that they will want to eat or cook. Since I have more than enough food at home, I don’t see the point of eating out.

I’ve only spent $8 on food this whole year, and that was in January and February.

I don’t buy clothes because I get it all for free. When I was growing up, I often received hand-me-downs from relatives when they grew too big or too small for their clothes. Now I get hand-me-downs from people who throw away their clothes not just because they outgrew them, but because they bought too much and have no space in their wardrobe; because they felt like a change of clothes, or because the clothes they had are no longer in fashion.

Did you know that Singaporeans, on average, buy 34 articles of clothing a year, and throw away 27? To be fair, I do the same. The only difference is that I don’t buy the clothes. I mean, why buy something if I’m going to discard it soon? There are better ways to spend money… like buying a home that I’m going to use for many more years to come. I hope.

In summary, I don’t worry about any cashless push, because I’m already cashless.

I don’t worry about not knowing where my money goes, because I track my expenses and I know exactly where it goes.

I don’t worry about money, because I get everything for free.

I’m freegan.

My next great adventure

Hello. I haven’t written in here for over a month. I was kind of inspired to write a blog post after reading an update from a friend’s blog.

I’ve been busy. Busier than I expected I would be. Which is strange, considering my biggest change in my life.

But before I get to that, I think the reason why I was hesitant to write in this blog was that I connected it to my Facebook and Twitter accounts, so that each published post is automatically published on my wall.

I had a big announcement to make. But I didn’t want my Facebook friends to know about it through a post because I didn’t want to deal with comments on it. So I kind of didn’t write it.

Then it occurred to me, why don’t I just disconnect the blog from Facebook? That did it. And that’s why I also disabled comments on this post. If you want to tell me something, then please choose another means of communication. Thank you.

So the big announcement is: I’m semi-retired.

I never really planned for this. My plan has always been to work till I’m 60 years old, before slowing down. But in April this year, I fell out with my business partner after working together for 1.5 years. I don’t really want to say more than this. But basically, it meant that my business needed to change direction.

At the same time, I did a financial check and I realized that my freegan way of life has dropped my personal expenses to about $50 to $100 a month (that’s not a typo, and it doesn’t include mortgage and insurance). In essence, I didn’t need to work for income for a while.

In essence, I didn’t need to work for income for a while. I can last at least 2 years without having any income. But because I do have several small streams of income, I can go longer if I wanted. So I decided to enter semi-retirement. It’s not exactly a sabbatical because I still want to retain my license to serve my loyal clients. But there’s a lot of other things that I would like to learn and do during this period.

What all this means is that I didn’t need to change business direction. I could just stop working for a while. Take a break, y’know?

I decided to enter semi-retirement.

It’s not exactly a sabbatical because I still want to retain my license to serve my loyal clients. But there’s a lot of other things that I would like to learn and do during this period.

For one thing, I want to explore a moneyless way of life. Basically, if I can figure out how to live without using money, I can immediately proceed to retirement. It’s a fascinating way of life and, truth be told, I’ve wanted to do this since before I started my first job. But only now, when I’ve ensured that my financial responsibilities are met, could I attempt such an experiment.

For another, I want to explore other aspects of finance, to put to use the deep knowledge and experience I have acquired in my 7 years of financial planning, and see how I can use it in other ways rather than the way this business is normally done, which is 1-to-1. I want to see how it can be done 1-to-many, or even many-to-many, which is something that today’s technology can enable us to achieve.

So… what have I been busy with?

Well, I went on a couple of holidays in May and June. I spent four days living in Singapore outside my home without using money (except for public transport). I wanted to see if it was possible to live in Singapore without money. I believe it’s possible, but I need to run more and longer experiments. And since each holiday costs only $12 to $15, I can easily do this every month if I can carve out the time.

Then I’ve also started doing pro bono financial planning — working with people who would normally not be able to afford my fee. I’m volunteering with PlayMoolah, a company that I’ve long wanted to work with because the people have such fresh perspectives on the familiar world of personal finance. However, the time has never been right for the both of us. But now, serendipity has led us both to work closely together.

So I guess you could say that I expected my semi-retirement life to be lazing around, but it’s just not in me. Haha! Whatever form it takes, it’s going to be a really great learning adventure!

Should I put $500k into a bank with an interest rate of 13%?

Sometimes I write answers to financial questions on Quora.

The asker of this question added:

In my country, we have that high interest if you deposit that amount of money in a local currency. Our currency has been devaluated by 100% in 20–4–15. I really don’t think that it will happen again in any time soon, as oil prices started to increase and economy is getting more and more stable.

Here’s my answer:

In 2014, a client was about to invest $200K with me. A few days before, news of the Ebola epidemic broke, and he called me. He said, “Maybe we should wait till this epidemic is over before I invest. It’s going to cause the market to go down.”

I told him, “No one knows how the market will react. I advise you to invest now.”

He did.

The Ebola epidemic didn’t make a dent in the market and soon after, it spiked. He was glad he listened to my advice. But really, I didn’t do much. All I did was to be very aware that no one can predict the future, and don’t try to do so.

“I really don’t think that it will happen again in any time soon.”

This sentence will be the cause of you losing money, if any. Because what you have done here is to try to predict the future.

No one can predict the future. Many people will try and most will get it wrong, yourself included. Even if it’s not oil prices, something else can happen to devalue the currency again.

To put money in a bank with 13% interest tells me that inflation in your country is higher than that, and that your currency strength is weak.

These are the two things you need to consider when you decide what to do with your $500K. If inflation is higher than the interest rate, then even with 13%, the real value of your money will continue to decline. Add that to the fact that your currency strength is weak, and the value of your money also tends to decline.

In such a case, you may consider putting the money into a different currency, one that has historically shown itself to be strong and stable. Alternatively, you can consider investing the money in an asset class that tends to retain its value over time. Examples include gold and land.

Take note, however, that this answer addresses your question alone, and does not take into account your overall financial situation. You should seek the advice of a trustworthy and competent holistic financial planner before making any major investment decision.

This article was taken from Lumina Planners, the fee-based financial planning arm of Elpis Financial.

Why do some millionaire Singaporeans still live in HDB apartments?

A few years ago, I accompanied a friend to do door knocking. It’s the first and only time I ever did it — just for the experience. Door knocking is the activity that some insurance agents do to find customers. Other occupations that do this are ice-cream sellers, Christian evangelists, and other door-to-door salespeople. It’s extremely tiring, but the upside is that you get to meet lots of interesting people and hear their stories.

One elderly couple invited us into their flat for a cup of tea. As we conversed, we found out that they recently sold their 2-storey semi-detached house and bought this HDB flat they were now staying in. Their children had grown up and the house was too big for just the two of them. They decided to choose a central location that where public transport was easily accessible. The profits from the sale of the house were invested in bonds and stocks and they lived comfortably off the dividend income. You would never know that they are millionaire Singaporeans just by seeing them at the market.

I now stay in one of those HDB flats that have 3-room flats and studio apartments for the elderly. I wouldn’t say I’m very sociable, but I do talk to my neighbours. One neighbour used to run a business in an upscale residential area in the west where he also lived. He sold off the business and his house to move to this block because of the excellent location. He now takes about 4 holidays a year and is away for 2 months each time. Why have to maintain a big house if you’re only going to spend 4 months a year in it, he reasoned?

Another neighbour is a family of four. They used to stay in Malaysia, but recently moved in here because one child has graduated from university and is working in Singapore. The other child has started secondary school and it was more convenient for her to be living in Singapore.

Every day, there is a community of seniors who gather at the void deck to play cards, chess, listen to the radio or watch television together. Some are not well-off, that’s why they stay in the studio apartments. Some are very well-off, but they also stay in the studio apartments because it makes sense. Regardless of their financial situation, what they all gain from this arrangement is a sense of community. A sense that someone cares for them, is looking out for them, notices when they are absent.

We don’t have kampungs anymore, so HDB flats are the next nearest thing to having a community.

Downgrading often forms a part of a Singaporean’s retirement plan, but this largely depends on the property market cycle at the point of sale. It is important to regularly review your finances and your retirement plan to make sure it’s still relevant.

That’s why I advocate Holistic financial planning.

What personal finance mistakes should everyone avoid?

I’ve been learning about personal finance for 10 years and teaching personal finance for 7. Here are the top five common mistakes I’ve observed:

ONE: Spending more than you earn

I had two friends. One was a lawyer who earned $100K a year and spent $110K. The other was an engineer who earned $60K a year and spent $40K. Who do you think was in a better financial position after 5 years?

TWO: Not having an emergency fund

I had two friends. One took my advice to build an emergency fund which had about 6 months of expenses. The other spent all she had every month because YOLO.

After 3 years of work, both wanted to change careers. The first did so, depending on her emergency fund to tide her over for 4 months while she pursued the necessary qualifications. The other is still stuck in her job because she has no savings.

Here’s a step-by-step guide to creating an emergency fund.

THREE: Not having medical insurance

I had two friends. Both were fresh graduates who just entered the teaching profession. One purchased medical insurance for hospitalisation. One did not, thinking she would not need it.

Both faced immense stress in their jobs and one year later, both had illnesses that required hospitalisation. The first paid from his savings first, and the insurance company reimbursed him later. The second paid from her savings.

Who do you think was in a better financial position?

FOUR: Depending on someone else to manage your finances

I had two friends. Both became widows. One depended on her husband to manage the family finances. The other learnt from her husband how to manage the family finances.

When the first became a widow, her husband left a sum of money for her. It was quickly spent and lost to various “advisers”. When the second became a widow, she was grateful she took the time to learn how to manage her finances.

She now teaches other women how to manage their finances.

FIVE: Not knowing where investment returns come from

I had two friends. They both had some money to invest. They met two advisers. The first sold gold bars which promised 2% return a month. The second sold a safe investment which promised 2% return a year.

They both came to me for advice. I told them the first investment was a scam and the second was legit.

The first friend didn’t believe me and put all his money in gold. He lost all his money when the scam revealed itself a year later. The second friend listened and is still earning 2% a year on her investment.

Knowing how money works and where investment returns come from are crucial to not getting fleeced by the many investment schemes out there.

This article is taken from Lumina Planners, the fee-based financial planning arm of Elpis Financial. 

How do I overcome the belief that I have to be a millionaire or billionaire to enjoy life?

Sometimes I write answers to financial questions on sites like Quora.

Someone there asked the above question. They specified that while they have hobbies that they enjoy, they can’t shake the feeling that in order to truly enjoy life, they would need a significant net worth to allow them to try new things and experiences.

Here’s how I answered:

This is Keppel Island, where some of the richest people in Singapore stay.

Keppel Island

They stay on an island separate from the main island. Okay, it used to be separate until a bridge was made to join it to the main island. (I later found out that the buildings were not on the island.)

On this island are moored yachts. Small yachts like you see in this photo, and multi-storey super yachts.

A millionaire owner of a small yacht looks enviously as a billionaire owner takes his super yacht out to sea. The millionaire thinks, “If only I were as rich as he is, then I can truly enjoy myself.”

Being rich doesn’t mean you suddenly stop feeling envy of those who have more than you. In fact, being rich exposes you to those who have way more than you. It may even increase the feeling of envy and discontent in your life.

Clearly then, having more does not take away the feeling that you don’t have enough. Because at the heart of it, our money worries don’t stem from not having enough money; they stem from a deeper underlying feeling.

This article was taken from Lumina Planners, the fee-based financial planning arm of Elpis Financial.

What are most people ignorant of that prevents them becoming financially wealthy?

Sometimes I answers to financial questions on sites such as ConsultWho.sg and Quora. Recently there was a question on Quora which asked:

Q: What are most people ignorant of that prevents them becoming financially wealthy?

The person who asked the question wanted to know the answer specifically in terms of education/knowledge.

Here is how I answered:

There are 3 basic rules to money that most people know about, but fail to apply in their life.

ONE: Income – Expenses = Savings

Savings is the difference between your Income and your Expenses.

Many people focus on increasing Income, but they do not pay attention to reducing Expenses. In Quora and almost everywhere else, you see people asking questions such as ‘How to make more money’. But you do not see people asking, ‘How to live on $100 a month’.

When Income increases, Expenses tend to increase proportionately. Sometimes disproportionately. This is called ‘lifestyle creep’. This is the greatest threat to becoming financially independent.

The net result is that Savings does not increase.

The way to increase Savings is by both increasing Income and reducing Expenses. The reason why many people prefer not to focus on reducing Expenses is because they think that there is a limit to how much you can reduce Expenses to.

They are not wrong.

The limit you can reduce your Expenses to is zero, but most people don’t realise that you can live very happily on zero Expenses and still fulfil all your wants in life.

But this is a topic for another time. Let me focus on your question.

A person who earns $10K and spends $9K a month saves as much as a person who earns $2K and spends $1K a month. However, the $1K spender is in a much better financial position than the $9K spender. To understand why, you have to look at the next two rules.

TWO: Savings → Investments → Passive Income

Savings have various uses. It is used to pay off debt, which reduces Expenses. It is use to invest, which increases Income. Both these actions in turn go back to increasing Savings. The eventual goal of Savings is to convert it into low-risk investments that produce regular Passive Income.

Some people prefer to use high yield investments. I prefer not to, because high risk investments increase the chances of losing capital or income, which in turn threaten freedom and increase stress.

My goal is stress-free financial independence. Besides, Saving money is both low-risk and high yield.

THREE: Passive Income > Expenses = Financial Independence

The goal of investing is to increase Passive Income to the point where it exceeds Expenses. This is financial independence. This is the true measure of being financially wealthy.

A wealthy person is not someone with $1 million in his bank account. A wealthy person is someone who will never finish spending his money. The longer your money can last, the wealthier you really are.

Therefore, a person who has $100K in the bank and spends $100 a month is wealthier than a person who has $1 million in the bank and spends $10K a month. The first person can last 80 years, but the second person can last only 8 years.

Time, not money, is the true measure of wealth.

This is why a $9K spender will find it 9 times harder than a $1K spender to reach financial independence — because his passive income needs to be 9 times higher. Unfortunately, his savings is the same as the $1K spender.

To sum up:

  1. Focus not on increasing Income or reducing Expenses, but on increasing Savings.
  2. Use your Savings to further increase income and reduce Expenses, and to generate Passive Income.
  3. Do this until your Passive Income exceeds your Expenses.

 

This article was taken from Lumina Planners, the fee-based financial planning arm of Elpis Financial. 

Decluttering — One item a day

A few weeks ago, my aunt shared with me her method for decluttering:

One item a day. 

Every day, she looks at her stuff and asks, “Have I used this in the past 6 months?” 

If the answer is ‘no’, out it goes.

While I am a fan of batching – grouping similar tasks together and performing them at one go – decluttering one item a day has its merits. 

For one, it cultivates a daily habit of decluttering your life, as opposed to doing it all at one go. While the latter has many positive feelings attached to it, it often requires a lot of uninterrupted time. 

And very often, the person doing the interrupting is you. 

For another, having a daily habit of reducing the number of items you have one item at a time reduces the amount of willpower needed to perform the task to almost zero. 

Doing it daily is a habit and something feels odd if you didn’t do it today. 

After a while, it becomes part of us. We are constantly looking for ways to reduce our attachments to our possessions. 

After all, we don’t take any of it when we die, so why get so attached to them? It becomes easier to let go when it’s our turn to go. 

P.S.: Yes, declutter is a word. The English language evolves.