Not all “spending” are bad. What I am essentially doing is knowingly forcing to “pay-myself-first” more at the start of salary collection.
When I first started out, I mentioned how I took control of every dollar flow out of my Monthly Salary. This was how it looked like for 2019:
| Details | Percentage of take-home |
| Savings fund | 10% |
| Investment fund | 30% |
| Child RSP | 10% |
| CPF Cash topup | 2% |
| Child CPF Cash topup | 2% |
| Total | 54% |
I’m pretty comfortable with my spending in 2019. In fact, I am upping the ante by challenging myself with an increased allocation in my investment. What it will look like from Jan 2020 onwards.
| Details | 2019 | 2020 |
| Savings fund | 10% | 10% |
| Investment fund | 30% | 40% |
| Child RSP | 10% | 10% |
| CPF Cash topup | 2% | 4% |
| Child CPF Cash topup | 2% | 4% |
| Total | 54% | 68% |
I believe one of the main problems faced by many is not just to save and invest, but to increasingly upped the amount to do so. Delayed gratification is not a new concept. The increase in 14% allocation for investment today will see a snowball effect on higher spending power many times over 20 to 30 years later. It is also a good habit to inculcate within whereby you actually think more in differentiating what you really need versus what is good to have. I looked back at what I noted for 2019:
The total dividends collected for 2019 was $1,734.26 for a small portfolio size of about $35,000 for the bulk of the year. It amounted to an annual yield of 4.95%, or an average of $145 monthly dividends.
The total dividends projected for 2020 was $2,738.27 for the current size of $51,000, or an average of $230 monthly. This is only for the start of 2020 and I expect to double the portfolio size by the end of 2020. We can see where this leads. The more capital injected, the more dividends could be gained / re-invested.
One of the goal of my financial independence is to build up annual dividends gains such that the inflow (amount I am gaining) is less that the outflow (what I am living off for my expenses). This is also one of the reasons for building up the habit of frugality, which is to control and curb bad spending.
The only issue is to convince the other half to do the same. Wish me luck.
Theory of Constraints 
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