Five Cents Ten Cents has moved to a dot com domain

Flickr! photo by *Micky.

Dear friends,

Five Cents Ten Cents continues to bring to you the principles of financial freedom in our new website at http://fivecentstencents.com

• Living within your means
• Saving and investing
• Growing your means

It explores the journey towards financial freedom and how we can take specific actions to live our lives in accordance to what we want to achieve.

Each of us has to determine the path that we lead. The road that we travel. The steps that we will take.

Continue this journey with me in http://fivecentstencents.com.

Be well and prosper.

Financial freedom: Growing your means by taking ACTION!

Five Cents Ten Cents has moved to http://fivecentstencents.com

Please bookmark the new website as this blog will not be updated after 21 March 2008.

Thank you.

Panzer

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One of the pillars of financial freedom is to grow your means. You can do that in many ways. The most obvious way that occurs to you would be to hunker down, work hard and work smart to get ahead in your career or business.

Growing your means, a paradigm shift…
Get that promotion. Gain that increment. Grab that career move that pumps up your income and earnings. That is one way to grow your means.

The other way that is increasingly evident in our globalised economy that is Singapore Inc. is to seek alternate sources of income. Investment income is one such way. In generally, Singapore’s tax laws are laid out such that interest is not taxed. Dividends from stocks and shares for certain exempt sectors are also free from tax. Even for dividends from companies taxed at 18%, you get a tax credit to offset the taxes on your dividends that result in you only paying tax on dividends at your effective personal tax rates.

Internet income is starting to become a reality. I can’t quit my day job but AdSense revenue is paying for my web hosting for this blog. Hence, my blogging efforts are able to generate enough money to make my blog more professional with its own domain name as well as paid web hosting. The new paradigm in our ever changing value-chain is to diversify your income sources. Relying on your job for 100% of your financial security gets riskier with age and with winds of change blowing through the business landscape.

Growing your means, taking action!
My own foray into growing my means has been really using AdSense and blogging to explore how you can make some additional sources of income from non-traditional activities of trading time for money. Don’t get me wrong, AdSense requires still some trade-off but it gives you some flexibility in working on your blogs when you have time and at your own schedule.

Based on what I’ve read, unless the main stream media picks up on my blog and gives me free publicity to a few hundred thousand people, my humble blog would be challenged to generate anything close to even my investment income. I realise I need to either sell my own product or services through my websites where I’ve build up a small audience. That is the way to go. This revamp of Five Cents Ten Cents seeks to make my blog more adaptable to change as the look and feel can move very quickly using Wordpress templates. In addition, I can also add functionality that exceeds what Blogspot can do for me.

To grow our means is to be open to opportunities and to try. Almost one year ago, I started out Five Cents Ten Cents as an experiment. What this experiment has proven is that it can generate real dollars and cents and it has also allowed me to get re-aquainted with Web 2.0 technologies and to marry my skills in writing, personal finance, information technology as well as some dabbling with designs and photography. Increasingly you will note that Five Cents Ten Cents uses photos from my own Flickr! albums that were taken on my trips overseas as well as my activities in toastmastering, kidsREAD and others.

How are you growing your means? What concrete steps, however small, have you taken to grow your means. In our current low returns from fixed deposits and treasury bills, even if you can generate $10 a mth from whatever alternate source, it represents $12,000 that you would have needed to set aside at 1% (Fairprice Plus savings rate) to get the same returns. So don’t underestimate the power of this alternate income source.

Be well and prosper!

Five Cents Ten Cents is under-going a transformation... Watch for it!

Dear faithful readers,

It's been a almost a year since I started out  of my blog on financial freedom Five Cents Ten Cents and I have learnt so much from writing out my ideas relating to financial freedom!

The journey towards financial freedom is just starting to get interesting as now I have one more mouth to feed. :-)

Besides starting to pick up the ropes on parentcraft, I have also been exploring ways to bring this blog to the next level. I have been brainstorming and coming up with ideas on how I can TRANSFORM Five Cents Ten Cents into something even better!

I will continue with the tradition of sharing with you my insights and experiences about my own journey towards financial freedom while you accompany me through this blog.

In so doing, I hope that you find value through the ideas and thoughts generated about personal finance and YOU TOO can achieve financial freedom LONG BEFORE YOUR STATUTORY RETIREMENT AGE!

Watch this space over this coming weekend.

Be well and prosper.

Financial freedom: Investing for the future, focussing on the present

I have discussed how the dream or reason that drives you towards financial freedom is important in focussing your hearts, minds and souls towards your financial goals.

Investing for the future, focussing on the present

You are not a robot following a program mindlessly and executing tasks repetitively. You are a human being filled with emotions, feelings and moods. In order for you to invest for the future, you need to focus on the present, to do the things daily that leads you surely and steadily towards your goals in financial freedom. You need to have a strong sense of purpose behind why you are pursuing the tasks and activities that move you towards financial freedom.

Let's recap what does financial freedom means to you:

To be able to have the targetted investible savings that generates passive income that exceeds our living expenses.

It's that simple. To be financially free you need to live within your means, save and invest and grow your means. This will help you generate sufficient investible savings over time which earns sufficient passive income to cover your living expenses. When you achieve that, you are no longer trapped in the time-money trade-off since you are free to spend your time to do whatever you want as your investible savings works for you to earn that income while you are sipping coffee watching the world go by during weekday mornings. ;-)

Focussing on the present means translating the financial freedom principle of living within your means, saving and investing and growing your means into daily achievable actions. Plans without action gets us nowhere. Action with plans gets us somewhere but not where we want to go.

Focussing on the present: getting you moving towards financial freedom

I like blogging because I have enjoyed writing and public speaking ever since I became a toastmaster. Blogging is also cathartic for me, i.e. it allows me to articulate my thoughts and at times vent off some frustrations in life. It also helps me to clarify my thoughts. I have made blogging my hobby because unlike other hobbies, blogging with AdSense helps me grow my means. I earn literally five cents ten cents everyday that adds up for my daughter's college tuition fund. This is one way where I am growing my means even as am a salaryman.

Living within my means comes from realising that materialism will only satisfy you briefing before the you hanker for the next "thing" to make you feel happy! Thus, a life spent chasing after materialism will never satisfy in my own experience. I realise that as the number of candles on my birthday cake grows, the more I realise happiness comes from the basics of health, happiness and family. Small luxuries now and then make life more enjoyable truly but they are to be sampled sparingly so as to preserve the delicate sweet flavour. Indulging in luxuries all the time spoils out palate and makes for one to live beyond your means.

Saving and investing comes from every small step. Yes, interest rates are pathetically low now. Singapore fixed deposits are yielding close to 1% plus. But that is no excuse to be saving even as inflation wipes out our savings, to mitigate the effects of inflation is just one way to take concrete action not to let our monies wither away at 0.25% in bank savings.

Investing in the future is to act in the present

You can achieve financial freedom. It is within our grasp by taking hold of our present and making small changes to our lives to align our mission, vision and values towards those conducive towards financial freedom. I took initial steps years ago and made a conscious decision to pay off my loan aggressively. Now I can concentrate on fatherhood and work-life balance and invest in the bringing up of my daughter as the roof over our heads belongs to us and not the bank! I am working for my daughter and family now and know that every bit of passive income I generate will go into building up financial freedom for my family and myself.

Be well and prosper.

Financial Freedom: Drinking Coffee While the World Goes By

My good friend once remarked that once he had achieved financial freedom, he would want to spend his time drinking a leisurely cup of coffee on weekday mornings and watch the morning crowd pass him by as they go about working for a living.

Such is his dream and to some extent it is mine as well! :-)

What is your dream that drives you towards financial freedom

I encounter many posts in internet investment and personal finance forums from people who ask for the best investment that yields the highest returns in the shortest possible time. Others ask how they can save and invest without sacrificing their lifestyle that involves shopping, eating at restaurants and supporting a car.

They have a dream to drive a fancy car, to dine in nice restaurants and to be RICH with a capital "R".

Your dream can drive you towards the pinnacle of success or it can drive you crazy with the frustration of impotence in achieving your goals of being RICH.

But just dreaming of being RICH does nothing for us unless it spurs us on to take concrete action. The dream does nothing for us if it is the mere accumulation of material possessions for us to show off that we have MADE IT and are RICH.

My dream is to be financially free. Being financially free doesn't involve wearing bling-bling and brandishing the latest Rolex watch. It is not about the car I drive or the home I stay in. It is about escaping from the time-money trade-off. It is about being able to spend quality time with my daughter when I choose to. It is about being in control of HOW I can maximise the life in my years.

your dreams are your goals in the ideal state

Your dreams are actually your goals in an idealised state. Every endeavour begins in the mind. It comes from the conscious and the sub-conscious mind. In order for you to achieve your dreams, you have to sacrifice and make changes for you to hit the ideal state. Along the way, we either lower our dreams or uplift our lives to meet the lofty targets that we set for ourselves.

My dream is simple but yet challenging. It is to escape the time-money trap that engulfs all of us who work for a living. The escape route is laid out in front of me through my goals set in being financially free. I know how much investible savings I need to be able to sustain my current standard of living. I know what it takes to get there. And I know it takes me time, effort and perseverance to reach my dream.

I will get there because I am focussed, determined and patient. I will get there because that is what I dream about. I will get there because I am willing to do what it takes to live within my means, save and invest and to grow my means to get there.

You can do so too, if you truly believe in your dream.

Be well and prosper.

Financial Freedom: Plan-Do-Check-Act

In order for you to achieve financial freedom, you have to have a system in place to guide your decisions to live within your means, to save and invest and to grow your means. One way to develop a framework to apply the principles of living within your means, saving and investing and growing your means is the PLAN-DO-CHECK-ACT approach.

PDCA Approach (Deming Cycle in Quality Movement)
The Plan-do-check-act or PDCA approach is described by Wikipedia as, "... an iterative four-step problem-solving process typically used in quality control. "

It covers the following areas:

"PLAN

Establish the objectives and processes necessary to deliver results in accordance with the specifications.

DO

Implement the processes.

CHECK

Monitor and evaluate the processes and results against objectives and Specifications and report the outcome.

ACT

Apply actions to the outcome for necessary improvement. This means reviewing all steps (Plan, Do, Check, Act) and modifying the process to improve it before its next implementation."

How do we apply PDCA to our objective of achieving financial freedom?

1) Plan
You need to have an objective. Be specific and it should be something along the lines of, "I want to have $500,000 investible savings by age 50" for example. You need to develop the way or steps that will help you achieve your objective. These are the processes referred to in the PDCA approach.

2) Do
Action is paramount in any endeavour. But blind action without any pre-conceived notion of where you want to go and what you want to achieve will lead you nowhere. Action to implement the plan in the required steps (plus some variations along the way) take you bit by bit from where you are now, towards where you want to be in terms of achieiving financial freedom.

Let's say your target is to have $500,000 in investible savings by age 50. If you are now 30 years old, you have 20 more years to achieve this. $500k over 20 years = $25,000 a year. How do you save $25,000 a year? By first saving $1,000, $2,000, $5,000 a year etc and leveraging on the power of compound interest to help you. Will it be easy? Of course not! It will be challenging and tough if you do not believe in the principles of living within your means, savings and investing and growing your means. TOTO and 4D may bring you there maybe with a one in a billion chance but growing your investible savings at rates of 4% to 10% is possible but tough. It requires dedication, hard work and perseverance.

3) Check
As each year goes by and the number of candles on your birthday cake grows, how do you check if you are on track towards what you planned? Is your networth growing bigger, smaller or the same? Why is it? Analyse, think and critique yourself. If you have someone who you can trust and who is financially savvy, talk to them, or better still, read my blogs! :-)

Taking time to review how you have fared in your journey towards financial freedom is also important as periodic self-assessments give you some indication if indeed there is progress. More importantly, if you are not on track, you still have time to do something about it.

4) Act
Take corrective action if you are not doing so well according to your targets. Continue to do the same things if they are giving you the returns and growing your networth towards where you want it to be.

In the end, you continue with this cycle and continue to press on in your quest towards financial freedom. While doing so, don't forget to smell the roses and appreciate the small luxuries that life has to offer!

Be well and prosper.

Financial freedom and Parenthood

Having a baby in Singapore can be a costly affair as the plethora of baby essentials and accessories available for the baby are unlimited and your budget will be limited when you become a father or a mother to your first-born child!

Parenthood and financial freedom
Many Singaporeans are delaying marriage and parenthood due to a variety of factors. Some of these include establishing our careers, others include saving money for the wedding, home and other family expenses. Many of us wait to be more financially stable before we take the plunge and plan for the first child. Singapore Inc. is a very competitive place and as parents we want to give the BEST for our children to grow up and have fulfilled and successful lives.

I also took the similar route in that I got married after working for about 7 years and our child only came some years after that. One of the reasons for starting a family is that my financial situation has improved over the years. I have worked more than a decade plus without owning a car and used the savings generated from living a relatively simple lifestyle into paying off my loan for my home. Thus, it is with the stability of having no debt for the house that perhaps subconsciously facilitated the conception of my daughter, Baby A!

The more steps I take towards financial freedom, the more it opens up possibilities for me in life as I am less stressed over my job even as I have another mouth to feed. With my liabilities managed through living within my means, saving and investing and trying to grow my means, I am better able to focus on bringing up Baby A and to be a supportive husband for my wife who has endured much to bring our daughter into this world.

Time for work, time for family
We come back to the work-earn-spend-work cycle where it is a trade-off between time and money. We trade time (and our talents and skills!) for money and use the money during whatever leisure time we have. I realise that each of us needs to find that balance. I am starting to find that little bit of equilibrium because of the choices I made when I was much younger.

The simple living, low expenses and not keeping up with the Lims, Alis and Muthus allowed me to concentrate on building up my reserves to fund the most important asset that one needs, my home. When you are closer to financial freedom with the building up of your net worth, there is something you can leave to your child as she steps forth into this new world. Each day that you apply the principles of financial freedom, i.e. to live within your means, to save and invest and to grow your means is another day that brings you closer to breaking free of the work-earn-spend-work cycle that can be such a significant force that chains you to the value-chain of Singapore Inc. When you are less dependent on that cycle, the more you can spend more time with what is important to you in life.

What is important now to me is my baby and my family. The steps towards financial freedom are steps towards giving me more TIME to spend with them.

Be well and prosper.

What is your reason for financial freedom?

If you have been following my blog, you would have read about how "what drives you" in your endeavour towards financial freedom is important in whether you will take concrete steps towards achieving financial freedom.

My daughter was born a few days ago and she would like to share a message with all of you.

She is my reason for financial freedom. ;-)

What is your motivation behind achieving financial freedom?

Why do you want it so much?

What will you do to MAKE IT HAPPEN?

Be well and prosper.

Withdraw your Economic Restructuring Shares now!

The Ministry of Finance has announced the final dividends for your Economic Restructuring Shares (ERS) of 10.74%. You may check your holdings and more importantly, withdraw your ERS because the final dividend has been paid out on 1 March 2008 and CPFB will only automatically credit back the monies into your bank account on 7 April 2008:

“5. Singaporeans who have previously received their GST Credits or encashed part of their ERS through their bank accounts will receive their ERS payments automatically through the same bank accounts by 7 April 2008″

The other reason to take out your money earlier is that your ERS balances EARN NO INTEREST while the CPFB “prepares” it for crediting on 7 April 2008.

So what are you waiting for? Go get back your ERS monies NOW.