What a disaster. O_O
2019 was the first year that a client suggested that I am not very transparent about my investment returns.
It is difficult for me to show investment returns or accounts.
Mine are hard enough - due to the manner of which i) I invest quite haphazardly with little to no ‘war chest’ or ii) with structures that comprise my initial capital for zero fees in the future, or iii) that give away investment strategies that I’ve worked years to figure out.
I’ve tried the transparent thing before.
It’s not that I don’t want to be, it’s just that as an introvert, it’s a little hard.
Even being upfront about my personal life hasn’t been too easy, or some of my professional failures.
But in the interest of increasing transparency, I guess a little on my expenses wouldn’t hurt.
...Plus, there’s no good time to figure out whether you’re a massive hypocrite or not than in front of your family, friends, clients and regular readers. O_O
Money Maverick’s Expenses, 2020
To get straight to the point, my expenses for 2019 were a whopping $44,000. (Rounded up very little from an extremely messy, $43,900+ number.)
Not investments. Expenses.
I accounted for this using the DBS GPS as well as my cash expenses.
Suffice to say.
OW! WHAT THE HELL. SERIOUSLY.
HOW? HOW DID I SPEND SO MUCH MONEY?
My laptop was stolen last August. There was some carelessness on my part, and I paid a pretty hefty consequence. Not only did I have to buy a new laptop under a distressed situation (potentially higher cost in addition to needing to replace to begin with) but I also spent many days restoring things back to the norm instead of working. The actual financial outlay was almost $2000, but the opportunity cost was easily 5 figures.
By far one of the worst things to happen in 2019.
2) Travel and wasted Travel
I traveled a lot in 2019.
Three trips to Bangkok - of which 1 was business related. Perth, Japan and a few Malaysia trips. I had some subsidies, but spending money was required...and significant. Almost certainly a small 5 figure sum.
3) Food: stress eating foods, multiple meals on the go
My food budget increased exponentially in 2019. Consultants spend enormous amounts of money on food - sometimes on prospects, sometimes because you’re meeting people at a food place, or working at a cafe - and my desire for comfort increased a lot. I probably ate more ramen last year than I did all my life. For context - in 2016 my food budget was about $400/mth.
On average, I spent about $1300/mth last year on food, which is a whopping $15,600 a year.
4) Transport: getting lost, policy changes, oversleeping
The 3rd year of operating as a Financial Consultant had some very clear advantages - I was much better at my job than before, and found myself with a decent amount of free time to do more work.
As a result, I overstretched myself over and over. Some days I would see 7 or 8 different people in a single day all over the country.
I would get exhausted, which would cause oversleeping or a slowdown in my ability to produce results, which would require me to take much more taxis and a vicious cycle began where I spent an outrageous amount of money on private transport.
5) Weddings and Special Events
Not the worst culprit but considerably more annoying.
Last year, I started including a ‘miscellaneous’ budget into my Financial Planning. For example, whenever a client had an eventual cash flow of $1000 [after accounting for expenses like insurance, food, transport etc) I typically set aside between $150 - $200/mth on this assumption.
Sometimes in life, there’s a wedding you have to pay for. Or your parent’s anniversary. Or someone’s birthday. Or your birthday. Or you want to treat yourself to something cool.
In my case - maybe because I’m approaching 30 and all the clowns my age are getting engaged or married, I attended more weddings this year than I did in the last decade. On top of birthdays, anniversaries or even get well gifts... Boy was it expensive.
One of the first larger business expenses in my career was re-branding this blog.
It took a while and honestly, I don’t adjust to change well. Brice had a very hard time with me, but eventually we got it done and the feedback has been overwhelmingly positive.
The sleek designs are leading to some merchandising opportunities - more for branding than anything. I don’t expect people to start buying stuff with my name on it.
Owning, on the other hand, is a different story. ;)
The overall expenses here were highest by far. Still, some might consider it an investment instead - investing in yourself, but I’m not a stock.
I had a very hard time in the beginning of 2019 when it comes to staff.
By April - the entire original Money Maverick team was gone. Hiring is expensive. Training is expensive. Failed interviews have opportunity costs. I’m thankful that things worked out okay, and the original team have all (rightfully) moved on to bigger and better things than a part time wage offered by a chaotic Financial Consultant.
Now a lot of my paperwork and backend issues are improving, as well as research and project ideas.
3) Food: client appreciations, meals that made me happy
I spent a lot of time with clients and servicing last year - and it made me really happy. A lot of appreciation lunches became larger too, and because clients were especially generous with utilizing my service, I was more than happy to be generous with their appreciation.
I typically do an appreciation meal after the client’s policy has reached its 2nd month. Aside from servicing things such as discussing future options and nominations, it’s also a good time to bond with the clients who I value so much without having too much focus on money.
I’ve made regular donations to the Heart Foundation, Kidney and Social Centre.
But this particular year, I chose my charitable causes and I watched how the money was used and how quickly or otherwise lives were changed. While I still do a small subscription to my regular charities, I’ve started to have a keen interest in direct charity instead - having a very active role in seeing how the money is used in where I am donating to.
The downside is usually a lack of tax deduction, but it’s a bonus, not a necessity for charitable donations.
I’ve bought two insurances this year - once at the beginning of 2019 (term life) and once at the end (multipay CI). This was to top up my existing WL + ECI plan and the little bits of existing coverage.
Since my income has gone up a little every year, eventually I couldn’t put off acknowledging that I had more to protect and more to lose. It was a little painful at first, but it felt good after. I really respect my clients for when they come to the same conclusion after talking to me. Despite the fact, it’s not so easy to put emotion aside and get the coverage that is most necessary, especially when I want to invest as much as possible this year.
Thankfully, despite my heavy expenses I was still able to ‘pay myself first’ repeatedly - whether I had lump sums or regular monies GIRO-ed out of my account and invested before I could (somewhat recklessly) spend what was in my bank account.
Despite massive increases in expenses, it was still an extremely good financial year.
But it was really difficult to put aside 80% of my income this year in particular, especially because of how fickle business can be - assuming that you will always generate the same income by doing the same things has led to the death of countless businesses.
Yet you can’t get creative without breaking a few eggs, and those eggs usually have to come out of my own pocket.
Complacency leads to poor results, and the last thing I want to do is pay off a liability for a car or a rolex or something.
...Failed analogy aside, I’m sure that some of us here have our own miscellaneous expenses we don’t account for that rack up. These include:
- Miscellenous transport/food occasions which warrant expensive restaurants or taxis
- Higher than expected travel fees
- Religious/parental contributions
- Unexpected celebratory occasions, such as weddings
If you have difficulty saving, or are looking to start your journey towards Financial Freedom now, do drop me a message. I can guide you, and we can learn some things together.
For transparency, I have come up with a compromise by putting aside my personal money for a public investment package where the results will be available upon request, over appointments.
Oh, and Happy CNY in advance.
I will be a little absent over the next week - Manow is coming to Singapore for Chinese New Year. :)
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Money Maverick is a Licensed Financial Consultant with MAS, who specializes in Investments and Critical Illness Insurance.
The views on his blog are strictly of his own opinion and have no affiliation to any of the companies he works with.
Here are some of my resources on:
3) Retirement and Leverage: Leveraging a Private Annuity, Pros and Cons (ft. Jamus Lim)
4) Spending and Saving: The Biggest Spending Mistakes You DIDNT Even Know you were Making (and how to avoid them)
5) Job Assessment: A Case Study on How a $6k/mth GIrl makes MUCH more money than a $10k/mth Guy
6) Financial Optimisation: How I Avoid the Largest 'Fees' of All
Investments are also available using CPF (Ordinary Account), SRS (Supplementary Retirement Scheme) and Cash.
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Sources: Archer, Season 1