Many of us want to be rich, but most of us are not willing to pay the price of being rich Mr. Loo Cheng Chuan, founder of the 1M65 (1 Million by 65) movement, shared this hard truth at the Seedly Personal Finance Festival 2019. His message is also my key take away for my journey towards financial freedom.
Achieving financial freedom requires hard work and sacrifices
Mr. Loo Cheng Chuan shared his origin story about how he strived and worked hard to make his mark despite the setbacks from the financial crisis. It is an inspiring story because so much of today’s news is about how successful individuals make money from quick wins: starting and selling profitable businesses or investing in high risks instruments like cryptocurrency. We tend to forget that these are rare and exceptional cases and most of the time, to achieve financial freedom, hard work and sacrifice are required to pave the way.
Mr Loo asked us a poignant question:
“Are you willing to pay the price to be a Millionaire?”
– Sleep less?
– Work two job?
– Forgot Annual Holiday?
– Take risks
– Rent out your rooms?
– Minimal house renovation?
It got me thinking about my current lifestyle. I am guilty of wanting to be rich but yet, I am not willing to pay the price of being rich. I want to see my bank account growing but I still splurge on frivolous daily things like ordering food delivery when I am lazy to cook, eating out at restaurants/cafes when I get bored with eating the same meals and indulging myself when I am feeling down with “innocent” purchases like an expensive coffee or snack.
Life experiences do not have to come at a cost
It is humbling to know that Mr Loo built his wealth by being thrifty and working hard (he worked 2 jobs!) He shared how life experiences can be obtained without spending lots of money. For example, his family does not indulge in luxury holidays; instead, they have fun going on road trips around Malaysia. He mentioned his friend, Mr. Dennis Goh, one of the founders of HungryGoWhere who despite his wealth, leads a frugal life. The question Mr. Loo posed was, do you want to look wealthy, or be wealthy?
What are we doing to get us closer to being financially free?
Reflecting on my personal habits, I spend my free time idling around and doing nothing much in particular. I could have invested this time working on another job or working on projects that built my wealth. Instead, I was lying around in bed watching Netflix and ordering food in instead of cooking my own meals. Yikes, this is not going to take me very far.
Even though my current lifestyle is not extravagant, I see areas where the fats can be trimmed. Like lunchtime, instead of eating whatever I want depending on my mood (some times $7 for a bowl of soup, yikes), I can choose a cheaper option and keeping the spending cap to $5. Mr. Loo shared a piece of sobering advice that puts being thrifty into perspective, the $1 he saved now will make him $10 in the future.
I was building up quite a decent saving but got derailed when the wedding came along. I told myself that it is just once in a lifetime experience so I was more liberal with my purchases and spent more than I should have. Even though the wedding and honeymoon were relatively low budget, all the spendings do add up, and I see the damage in the savings.
“The things you own end up owning you” – Fight Club
Many times I fall into the trap of spending money to try to impress others, or buying into a certain lifestyle to feel good. I bought branded bags and items because I want others to perceive me to be cool and I wanted to fit into society.
This can be seen especially during office lunches. Previously at my ex workplace, my lunch buddies were willing to spend more than $7 a meal. So to fit in, I too decided upgraded my lunch budget when deep inside I mourn for the waste of money. But at my current work place, my lunch buddies are more thrifty and we would complain about how expensive $6 a meal really is.
When all your friends seem to be living a certain lifestyle (holidays in Europe and Japan, trying out new restaurants all the time and constantly shopping online), it is challenging not to try and match up.
Recently, I finished reading The Subtle Art of Not Giving a F* (Misleading but clever book title really) in which the author Mark Manson wrote:
“Not giving a f* does not mean being indifferent; it means being comfortable with being different.”
“We all have a limited number of f* to give; pay attention to where and who you give them to.”
It is an excellent reminder to myself that it is ok to be different and I should choose my battles wisely. Instead of being bothered by what I think people will think of me, I should be concerned about what I want for myself.
So starting this week, the journey to financial freedom begins again. it is back to being thrifty again and time to kick start a No Spend Challenge!
Are you on a journey to financial freedom? Please do share your tips 🙂
Note: Mr. Loo Cheng Chuan’s answers to financial questions can be found here.