Life and personal finance in their Essence

Life, indeed, is short. 83.2 years — this is how long the average Singaporean expect to be on Earth, for year 2018.

83.2 years to leave a legacy, 65 years till retirement, 20 years to reach early adulthood, 12 years to end off the fun of a childhood. We don’t actually realise how short life is, till we take the time to map out each stage of life.

The phrase “it is never too late to try” is half a lie — it is not impossible but highly risky as well. Once you have passed a certain stage of life, you have “lost” the lower cost of opportunity to have done it in your younger days instead. Yes, there are people who have made it latter it life, but these are the exception rather than the norm.

A mid-life person with a family and commitments is not going to job-hob or pursue his passion without a care in the world as he could have done in his early adulthood. A person far into his mature adulthood isn’t going to take on risks to be an entrepreneur and spin off a business with his wealth built up over the years. There is just too much at stake and possible to lose.

Stage I: MIMICRY (Play, Imitation and Education)
Birth – Infancy – Childhood – Adolescence

Prebirth: Potential
Birth: Hope
Infancy (Ages 0-3): Vitality
Early Childhood (Ages 3-6): Playfulness
Middle Childhood (Ages 6-8): Imagination
Late Childhood (Ages 9-11): Ingenuity
Adolescence (Ages 12-17): Passion

Stage II: SELF-DISCOVERY (Enterprise & Adventurousness)
Adolescence – Early Adulthood – Adulthood

Adolescence (Ages 18-20): Passion
Early Adulthood (Ages 20-35): Enterprise

Stage III: COMMITMENT (Dedication, Contemplation & Benevolence)
Adulthood – Midlife – Mature Adulthood

Midlife (Ages 35-50): Contemplation
Mature Adulthood (Ages 50-65): Benevolence

Stage IV: LEGACY (Retirement, Wisdom & Renunciation)
Late Adulthood – Death

Mature Adulthood (Ages 65-80): Benevolence
Late Adulthood (Age 80+): Wisdom
Death & Dying: Life

People generally love facts, figures, evidence and proof to get themselves “woke”, sit up and pay more attention to their lives. Under normal circumstances, it is Business As Usual (BAU) as we all go about our daily lives, most of the time not having second thoughts on events that are daily repetitions. I daresay that people normally think harder and take action only when they face the slumps in their lives or a significant life event, e.g. loss of family member, business failure, brink of bankruptcy etc.

What we learnt from school in our early days are highly applicable to our lives today as well. We learn to work with the end in mind for projects. We work backwards to find out the key requirements or initial outlay required. Why do we not apply that to our own financial matters throughout the course of our lives as well?

The whole purpose of a lifespan is to live it out meaningfully. And for it to be meaningful, you have to have the resources or capability to make it meaningful. Working backwards from age 83 to 65, we have about a good 20 years of silver years to enjoy. Probably more, if you are in the pink of health.

Stage IV is the stage of life where you should (preferably) not be spent still working but enjoying the fruits of your hard labour in your younger days. You would be living on your pension or annuity payouts, dividends, drawing down from your savings, and lastly from your investment. Roughly in that order. Some people may live off on less e.g. 70% of what they live on when working, or even more e.g. going on well-deserved vacation trips, YOLO-ing at the right time etc. The question really mains that are you really Poor, or not?As a general observation, you might have worked out some sort of legacy as well, perhaps to the deserving next generation or giving back to society of your choice. I personally have some forward thinking plans as well when I will my assets, share and share alike.

Stage III is probably the most crucial part of our lives. This period of life is probably when we earn the most (maturity in career advancement) but also spend the most (family and housing commitment, taking care of aged parents). Most people who were less matured in their thinking or played around in their younger days would have woken up in this phase. And by being “woke” is to account for and take control of every dollar flow for their Monthly Salary

Stage II is the reflection of the beauty of youth and the spirit of the ability to take on higher risks. Career exploration, stepping out on your own footing as an entrepreneur or starting your own business — this is where we are the strongest in taking on setbacks and failures and bouncing back from them. Time when used wisely during this stage, will build a strong foundation for the latter half of life. Waste it, and suffer the consequences through no fault of others.

This stage in life is also many times underlooked. Phrases in life like “YOLO whilst you are young”, “there is always tomorrow”, “you are only young once” do little but sink a person deeper into complacency in life.

Stage I is the stage which I feel is most undermined by people. Age, as I have experienced, is only a number. It not only applies for the older folks, but also for the younger ones. I guess that there probably should be a balance between leveling up their understanding of the world quicker but at the same time have a regular and fun-filled childhood. However, this is also the best time in a person’s life to inculcate good habits and also to leverage on this usually overlooked period timeframe for the additional boost in savings and investment via workings of compounded interest or returns. As a guardian and caretaker, your child should really invest early in life.

By breaking life down into stages and working backwards, we find that time is finite. Even as I think deeper about it and write this, time is still ticking by. Let’s not waste life as it is. Have you went through this thought process yourself or with your family?


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