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Time Is Wealth: Important Lessons From Someone Who Has Achieved Financial Freedom

>> Tuesday, June 19, 2012

Most of us would have heard the saying "Time is money" when frustration kicks in due to waiting too long. However, a word play on this was the title of the recent Sunday Times interview with Dr Bernard Cheong who is a respected watch collector doctor. He made his wealth through investing in collecting time pieces.

I do not usually read such interviews but certain things he mention, in a different context (I'll explain why I have to specifically mention this), reminded me about my priorities financially.

First and foremost, he talked about how he is financially free and work whenever he wants to. It is my dream and I am reminded to work towards achieving this. He also mentioned something very key: paraphrasing, so long as you do not have to repay loans on your property or car, there is actually very little you really need to spend on. And I think this is very crucial. Of course, most would argue that he is so wealthy and has so much passive income from his business or investments that he could not possibly spend finish everything. Well, that is his bragging rights and let's not be sour grapes here. What I would like to focus is in the truth of what he said vis a vis one's situation.

The main point is expectations. Take for example my expectation is really simple, I do not mind settling for a BTO 3 room HDB flat in some suburban town with no car. That would put me back about $200,000, compared to maybe $1,500,000 for a 2 bedroom condo with a luxury car. The difference is I could probably pay off $200k in a much shorter amount of time and even shorter if interest is taken into consideration. Anyway, that solves part A of the equation, debt free with a roof over my head at an age I am comfortable with rather than debt laden till I am old and frail.

Part B is the passive income to choose to work. That again depends on the lifestyle expectation. A simple lifestyle or an expensive lifestyle with the 5Cs. Even though inflation is creeping up in Singapore, I believe my lifestyle expectation requires about $1,000 a month (hold your flaming). That is about $12,000 a year. With a annual return of a conservative 5%, $240,000 needs to be invested, also a manageable sum.

Well, back to the $1,000 per month, remember that debt free is a criteria first. Then some would argue about the need to save. In the interview, Dr Bernard Cheong also explained that he spends every last cent! This is interesting as it contradicts all the common knowledge to save. Well, in my opinion, if you are financially free, what are you saving for? To be financially free-er? Saving is the phase to help achieve financial freedom, but once there and all the appropriate plans like emergency cash and insurance are in place, I feel we should enjoy the fruits of the labor and spend everything as well. All the delayed gratification is to have the gratification now. We can't bring all the money with us to the grave and after life, it will mean the difference of being miserly or thrifty.

So, now if you do not need to work, do not need to save, do not have any debt, lead a moderately simple lifestyle, would $1,000 be sufficient for one person. Well, at least in my opinion, it is for me. Different people have different background, upbringing, experience and expectations. Anything I earn extra from active working will supplement and I can spend all of it! I like to keep my own goals realistics and achievable based on my circumstances. Everyone will have their own concerns and constrains like family or children. My example will not apply to the vast majority. Similarly, Dr Bernard Cheong's example would also not apply to me as he is probably leading a luxurious lifestyle. However, I still managed to gain something from his story. He gives a reflection on the kind of enjoyment when financially free and reenergizes me to continue working hard towards that goal. Hope you gained some insight as well that you could apply to your own situation.

Cheers towards Financial Freedom!

7 comments:

Createwealth8888 June 19, 2012 at 11:21 PM  

True. I bought 4 room HDB flat much cheaper than my peers as it was near a cemetry.

Sometime we do have a choice for this single largest long term expenses in our life.

SmartPassiveCashFlow June 20, 2012 at 2:47 PM  

Living on $1,000 is an exciting task but it is not impossible. At least there is no worries on the payment on any loans for the house or car.

Living a debt free life will entail a very "shiok" feeling.

financialray June 20, 2012 at 4:28 PM  

Read carefully. The doctor can choose not to work because he did not divulge how much passive income he makes.
If you think only $1000 a month is sufficient, be careful about the underestimation. Chinese saying that the weather is unpredictable, and our health can deteriorate suddenly and without warning. That is when those without passive income will know the difference.

lau June 20, 2012 at 6:51 PM  

Knew I would get flamed for the 1k thing. But I did disclaim my rationale. Thanks for the concern. Then what would u consider sufficient for yourself?

As for the unpredictable part. Regardless, it will impact anyone. In fact less impact to ff people. Actively working will lose all source of income.

bernard cheong June 22, 2012 at 6:31 PM  

Dear Blogger or the person who is in chrage:
First, thanks for the coments on my statements in the Sunday Times. I am THE Dr Bernard Cheong.
I don't really know if I am living a "luxurious" lifestyle...it is relative.
By most 99% of the island here, I guess I am in the 0.05% of the wealthy class. That's Singapore's own statistics.
BUT...I spend about $1,200 a month.
IF I do not count items that most people do not purchase on a regular basis...cars, watches, holidays, art.
Sounds like luxury, but if you come across anyone in Singapore, who know me...like friends and patients...they will not find me in branded good stores or wearing branded goods..rarely.
I am still "just a guy".
Here is a sample of the interview:
I will send it over soon..I am in KL.

bernard cheong June 22, 2012 at 7:54 PM  

Ahhh..let me see. I have it somehwere here:

Occupation (Length? and how did you get in/why did you venture into it?)
Doctor
1982
30 years
By chance.

I think I do not deserve to have lived this "larger than life" profile and digital footprint that I have.
All I wanted after serving some years in the hospitals was PEACE.
Money, although I was not wealthy then, was NEVER an issue.
I was brought up to become a doctor by Alan Alda! I watched MASH from 1973, when I was in sec 1. I followed the series till the season finale in 1983, when I was a doctor.
Q: Moneywise, what were your growing-up years like?
and
What do you invest in? Why? Any lessons learnt?
These are addressed here, but answered below as well.

I was an idealist then. I believed and still hold onto, that a doctor should be like Hawkeye Pierce.
In many ways, I grew up watching him on TV, and grew into that mold, that character he played.

Somewhere, in the mid 1980s, I got hold of my courage…and left the traineeship program for specialists, because I became aware that I could not make a difference. I did not have the talent. I did not have the drive to study in a highly confined and rigid system, then 30 years ago.

I felt that I had been blessed with more than average knowledge in peadiatrics and orthopedics to go out, and become a GP. Also, I had a skill set of communication. I knew I could give General Practice a GOOD change into HIGH gear, and move it into a speciality. Yes..even at that young age, I had the ambition to do that.

I went to work first for a big group, and then a small compact group, and by 3 years, I had on equal terms, with 3 other partners, who I MUST ADD in total honesty were VERY driven people.

Those were the days when there were only small groups. I can recall the day when Raffles went public, and we were also approached many times to go down the same road. More money..but more work!

But we were very contented with a smaller, compact group. With a greater focus on our free time, and to set an example that family, parents, friends and a deeper involvement with non business matters would be better.

In fact, looking back…I have zero regrets about this.

We invested in a very small way, back into our profession by expanding to a more modest group.
Being separate individuals, linked only by our clinics, we were all free to pursue our own investments.
I think we have done well.


I have the benefit of hindsight now, that if we had gone all out and worked, we would have had to sacrifice buying property at a critically early time, when land was $43 a sq foot…and for me, my fortunes turned on that one single moment in 1989.

The land here, it is way above $1,000 a sq foot today.

Second, I would not have had the time to spend with my 2 daughters, and my parents. The fact that I spend only 12 minutes on travel each day, multiplied by 330 days, by 20 years or more…compared to probably 90 minutes for most of my friends…it created a chance for me to live 2 lives, overlapping each other. My involvement into the internet as early as before Netscape, was a tool that created wealth for me, beyond my imagination.

Again, my approach to wealth on the web was not selling stuff.. I traded in highly specialized information, in a very narrow field, watch collecting. It was unusual back then, but it was sharing and helping. That created wealth. Wikipedia alone will have about 50% of what I have created over the last few years, but the critical first half, is swimming around in the web.

All the way until the web grew too large for me.
I was already out by the time Google and the first smart phones were invented.

So..I was both doctor and a consultant on very niche high end items on the web, back in the 90s.

That's why my office, and this lobby looks like this.

link:
http://bernardatdermawan.blogspot.com/

Lau June 24, 2012 at 9:03 PM  

It is my honor that the good doctor has paid my site a visit. I was wondering if it was really THE man himself. :) The world is so connected, and I am curious how you managed to stumble upon here?

Well, I hope there is nothing offense or might be construed offense found. That was never my intention.

Thanks for sharing your interview, it has been most insightful. I suppose it would be a most normal to assume a luxurious lifestyle based on the mentioned wealth, but that usually is far from the truth. In fact, I have read that the truly wealthy often lead modest lifestyles and it is the wannabes who flaunt their wealth.

Cheers!

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