3 global themes shifting personal finance strategies

I think you don’t need me to tell you that recently many things have changed. While I’m pretty excited to hear old people talking about ‘Joom’ (Zoom)… yeah, that’s what they call it: Joom, Joom, everything also Joom. But [laughter] cheesy, but yes, clients are also becoming very comfortable with meeting me online, so that’s great. 

I am seeing how a lot of these global themes and shifts will change the way we live and plan our finances, the way we work, you know what we mean? We may not live here anymore. So not always in the best ways, but I think we are entering a misty grounds and best practices will take some time whilst we find new equilibrium. 

So today we’re really going to spend time to explore my imagination. How do I see some of these changes? What are some of the best practices in my view, and open up your minds to the possibilities of the different ways to live life, and in that sense, translate into different ways of managing your personal finance. More importantly, I hope you feel that you are not alone. We’re all in this together because it is pretty scary to, actually think that you’re alone. Although sometimes, you do feel like you’re alone because nobody really talks about it, but hey, always come to our Telegram group. We can have a great chat, but as we develop, we will find better ways to live, better way to work and better ways to play in this new normal.

And the truth is there are many themes, forces that are going to fundamentally change the way we live our life and plan our finances. Today, I’ve only picked three of them, and if there are any interesting new themes that you feel are going to fundamentally change the way we live, please come to our Telegram group and share that with us. So these three things matter to me, I know other things will matter to you. 

The very first theme that is going to change the way we plan our finances is that humans will live much, much longer. Young adults today may live an average of 90-100 years old. My God, imagine the wrinkles. And hey, this is not some sci-fi dream or conspiracy theory or some fairy tale, yeah. Okay, there are actually a lot of new technologies out there today. Things like CRISPR (clustered regularly interspaced short palindromic repeats) which can accurately cut up parts of a DNA sequence…. and if you don’t know yet, actually a lot of problems, they are caused by mutations of your DNA sequence, things like cancer. So the rise of these kinds of better understanding of DNA and genomic sequencing also allows doctors and scientists to be more targeted with their treatment. It’s no longer a guessing game.

If you didn’t know, actually a lot of doctors are guessing half the time when they look at you. So all the new studies and the new ways of diagnosis and all that… just giving them more information to better and more accurately serve your needs. And so, all these kind of technology growth and increase of pre-care activities, promoting healthy lifestyle, mental health and a broader appreciation for aging are all going to contribute to longer life expectancy.

Of course, I know when you hear this thing, you’ll be like “wah piang (exasperated), I don’t know how I’m going to feel when I’m 90 or 100”. For all of you millennials out there, 30s, 40s… you’re already seeing that change in your way of life, your diet, your body just feeling different. So even I am experiencing this change and I don’t know how to feel exactly, but the reality is we’re going to live longer and Singaporeans on average, we’ll see a 0.16% increase in life expectancy yearly. On average, now we’re already living to somewhere like 83, 84. So you know, 0.16% on average, by the time we are old, 90, 100 years old… it’s very, very possible. So it’s not just like a pure statistical extrapolation. Okay. 

We’re seeing a lot of research going on here and the government is putting a lot of money into healthy aging and better prepare for the future elder population. So Singaporeans being Singaporeans and a government being government… yeah, they’re very kiasu (afraid of losing out). So if there’s nothing here, they will not do much about it. And there are even some projections to suggest that by 2050, 50% of Singapore population will be senior citizens. Wow that will be a lot of old people… hopefully not grumpy. Okay. [laughter] Hopefully not grumpy old people! 

But yeah…. I don’t know how to feel? This is just a reality that we have to work with. And so it’s going to fundamentally change a lot of how we view things. It’s gonna allow us to question a few things. One of which is: are we really gonna retire at 65? Which means like you work 30 years or 35 years and then you retire one time good one, and then you live for however long you want to live. In the past, maybe a lot more possible because 30 years of preparing for 15 years of retirement… sounds okay. 

But going ahead, we’re going to live a lot longer and many things are going to change. Midlife crisis may not be a one-time thing. It’s gotta be a multi times thing. And retirement may not be a one-time thing anymore. And you’re seeing a lot of people doing that: so first 10 years, you may explore a particular career as an extension of your education. Then after that, you figure out, okay, maybe I like to do this, I have this certain skillset and I can find a market that allows me to profit and make money out of this. Okay, then I take a pivot. I change. So then you may have two to three or four careers in your life and retirement can be a beautiful thing that keeps happening and rather than a one time good one. 

So in my honest opinion, since we’re going to live longer, we’re going to have multiple careers in our lifetime, coupled with all these digital enablement and work becomes essentially less physical and more creative. So we can really work very long. We will not retire once, we may retire many times. In that sense. I really feel that you might want to revisit the idea of “ah, I’m just going to work very hard and save all the money. I’m going to retire”. 

A lot of people, actually at their workplace, they get a little bit jaded, they get burnout and they’re just biting the bullet and bearing the pain of gathering resources so that they can retire. Sad right, I have a lot of friends working in the corporate world or working at a job that pays them really well, but eats their soul. It’s a give and take, but because we’re going to live a lot longer, my take is you might really want to focus on developing the self, understanding what you’re good at and how you can derive joy from all these repetition, and reposition yourself in a different arrangement rather than just “oh yeah, yeah, yeah, I’m going to work very hard and retire and buy my house and do all this kind of stuff” because you’re going to live a lot longer. 

Trying to learn to love what you do and focus on that, I think that will really help you as we go along. Of course we are not trying to lie to ourselves to say “oh, I work very hard. You got to do what you love. It’s going to pay the bills”… but the thing is if you envision right, if you really love to draw, okay. 

Let’s just take drawing as an example. Maybe your younger days, you work for a company doing graphics. Okay. So you draw, do messages and all those kinds of stuff, and yeah, you work for corporate, they pay you pretty well or agencies… And after a while you feel like, “ah, I’m getting a little tired. I don’t want to do this.” You want to do your freelancing thing. So you do your freelancing thing for a while, maybe another 5, 10 years. After that you feel like “oh yah, maybe freelancing a bit unstable. I want to change back to join a community. But maybe not corporate. I could work for a community as a visual communicator” or what have you not. And then later you can do teaching, you can teach people how to draw and share your skills. 

So if you think about it, the same skillset can be applied in many, many ways. Corporate, agencies, freelance, community, teaching people and… I really envisioned this change for the future where things are going to be this dynamic, all right? So develop your strength, nurture what you love… I think that’s my best, honest advice for you and don’t just plan for a one-time retirement. Take periodic breaks. The series, it’s going to come out very soon… I don’t mind just letting the cat out of the bag. Later this month, we’re going to be talking a little bit about mini retirement. We did a mini series with Providend and one of the guys came on max. We had a great time talking about mini retirements, and I think that is an idea that we can all subscribe to rather than just work, work, work, work, work, slave, slave, slave and then retire, right? 

We can work on developing what we enjoy, finding our skills and try to make money of these skill sets, positioning ourselves depending on how things change and take periodic retirements to re-envision, relive our lives. And if you think about it, that is a pretty interesting way to live life. So as we live longer, as people are going to live longer… hey, entertain this different way of living, right?

Which brings me to the second global theme that is going to change the way we plan our finances and live our life and that is: work goes remote, you can too. Okay? Explore the bigger world out there and we will talk about this after a word from our sponsor. 

By now you should realize that work is going remote. Why? Because a lot of these big companies have already come out to say that we are going remote or we are going digital first… essentially means you can work from anywhere and you can work online. This whole COVID situation… one of the best things that have brought out is it has challenged the way we work. 

For a very, very long time, I always wonder why people had to stay in the office and then just act like they’re working when they are actually very tired and they need to go out and walk and take a nap and do whatever to recharge so that people can work better, right? So there are a lot of showmanship going on in the office, but because work goes remote, things are changing and companies are seeing that they no longer need to have very big offices, they can have lower overhead in that sense, and now they can hire from anywhere. So that’s great. 

Essentially, these big tech guys are going to set precedents and everyone else is going to slowly follow because more and more people are going to expect that to be the new normal. So let me paint you a clearer picture: one of the ripple effects on the economy. In the past, cities have always been where jobs concentrate, the big employers are there to hire for talent and the big talent pools have more jobs. So talent-job, job-talent, talent-job, job-talent… it kind of creates this network effect and voila, a whole new city is built. 

So everybody start to get concentrated and many other peripheral economies of services: utilities, housing, entertainment, and all these other different sectors will pop up. So you actually see a lot of countries or a lot of cities where there are only one or two big sectors. It can be a whole city just built on finances or financial services. It can be a whole city built on manufacturing and all those kinds of stuff. It’s just in Singapore, we see like… we only have one city. You can’t really see much lah, but in many other parts of the world, you actually see that. 

I stayed in Shenzhen, I stayed in China, I also stayed in Malaysia. So I’m going to share with you a little bit of my experience living in this huge migrant city of Shenzhen and this suburban city of Subang in Malaysia. Some of the economy that… how I observed when I was there because I think that will give you a lot more clarity as to how the economy is going to change and how you can then leverage on this remote working arrangement to go further. 

For a very, very long time, China was a sleeping dragon. I’m sure everybody knows, and one of the first major economic push by the Chinese government was this place called Shenzhen, which was quite a rural town in the southern border of China opposite Hong Kong. By now you should know, huh? So in the early eighties, they dedicated this space as a special economic zone to try to bring in foreign investors. Essentially, they draw up an area and call this a playground, so foreign capital can come in and you can do all the kind of stuff. So actually the first McDonald’s, the first Starbucks and some of the biggest factories, they all started in Shenzhen. So that’s an interesting place. 

As more and more these kinds of foreign capital or regional capital come here to explore this new way of life, this new economic model, more and more of the economy start to grow and more people come in to live here, to capitalize on the jobs and you see this cycle repeat, repeat, and grows into a network effect.

Fast forward 40 years, Shenzhen now is like the Silicon Valley of China. A lot of factories, a lot of tech stuff over there. If you go to Shenzhen, you can actually build your own second-hand iPhone. I think that’s extremely possible because I’ve changed my iPhone screens at least six times when I was there for very cheap, like 200 RMB every one time.

It’s an interesting place with a very migrant-centric way of economy, where there is a big growing tech sector and everything else is built around it. So that is the very old way of how cities are built around jobs, around opportunities and the network effect grows. That’s where people congregate in the past. 

But I think as work goes remote, you can go remote. Things are going to change. It brings me to my experience in Malaysia. When I was living in Malaysia, I was actually living in the suburbs, this small little suburb called Subang that really rely on the university students for its economy. It’s a lot of small, little quirky things, small little cafes, little shops scattered all around. It was a sleepy town with a lot of character. But wages were relatively low and people would want to get jobs in the heart of KL where the big MNCs hire, like Shenzhen, like Singapore where all the big MNCs are there and they hire, they pay the best dollar.

But of course, high density means very stressed. Everything’s very expensive and all the standard things that you probably know, But in KL, in Subang, this place where I lived, life was very nice. The suburbs is a beautiful place. I don’t know why it is so beautiful, but generally I think it’s because it’s less dense and you know everyone, there’s a lot more character in these spaces.

So if you think about it, Singapore does not have suburbs and a lot of people still stay here because of work opportunities and because of this kind of emotional attachment to where we are. But going forward, as companies start to become more comfortable with hiring you remotely, you can actually make the money that you used to make in the city but live in the suburbs.

So yeah, there are no suburbs here in Singapore, but they’re actually a lot of suburbs in the region from places like Subang in KL, in Selangor, or Bali or Chiang Mai or Da Nang in Vietnam, all these small little sleepy towns and suburban towns are a great place to live. I don’t know if you’ve experienced them, but it’s amazing.

Look at that as an idea where… now that work goes remote, you don’t need to be physically here any more. And I had a great chat with Ricky from the Ravenry, so you can check out the Chills with TFC episode from him and get some ideas as to what the future of work is gonna look like. Why not?

Explore this idea, which also means you don’t need to pay top dollar for housing here. And I know some people would be concerned about education, healthcare… and actually, if you live in an affluent part of the town, naturally they have private healthcare, they have private education. So I think you will be able to afford and you’re going to be doing pretty fine, but don’t mark my words for it. Try to go shopping. These days, just look around online, try to find out what’s the cost for private education, private healthcare and how is it going to be like living there? Open up your minds. That is what I’m trying to do, not to tell you that “oh Da Nang definitely better” or “Subang definitely better”.

Recognize that as work goes remote, companies are going to hire you anywhere and you can live anywhere. You don’t ever need to work for Singaporeans companies. You can work for New York companies, London companies. As long as you’re good enough, you can do it anywhere for any company and that’s going to be a whole new world. Scary for a lot of people. I sometimes feel a bit scary because now the job market becomes global, but if we do it well… hey, why not? It can be a whole new way to live. 

Which brings me into point number three, the third theme that’s going to change is: finance is going digital. We’ve talked about this extensively, from digital banks to brokerages with new UI… the very nice one, not like the old ass user interface that looks like shit. Digital payments, comparison sites, digital currencies… very soon you will see all sorts of things that are going to happen. 

One of the things that I envisioned that’s going to happen is this thing called digital insurance co-op, where people can risk pool together. Instead of letting one company make all the money, everybody’s just going to pull our money together and have this centralized blockchain to govern this whole thing. And sometime down, you don’t even need to essentially let the insurance company make money. Everybody can pool risks together, so that’s interesting. 

And you also see that a lot of new ways of making money, a lot of digital assets, a lot of traditional assets going digital also, right? So maybe in the future, people will really want to own things like Habbo Hotel, digital properties. New tools, new money, new assets are popping up like rabbits. So you will see more and more of these kinds of physical assets go digital, you will see more ease of digital payments, you will see new ways to manage money and a lot of the fees will come down. 

These are not far-flung ideas. I’m merely extrapolating what is already happening. I specifically want to bring up this theme because I know a lot of people are feeling very uncomfortable with robo-advisories or digital brokers, digital payment platforms and all those kind of stuff… especially robo-advisories. I’ve been getting a lot of DMs and talk on our Telegram group about this. People are very concerned “what about the robo-advisor? What if they close down? What if this… what if that?” 

Let me tell you one thing: in the future, every advisor will be a robo-advisor. Every advisory company needs these kinds of digital interface to streamline their operations and all that good stuff. If you have not checked out the episode that I’ve talked about robo-advisors, definitely go and check them out. I think it would give you a lot more idea of how to manage the relationship with robo-advisory, but also think about how all these digital platforms are going to change the way you manage your finances.

You no longer need to really get a full-time professional. You can get off the rack kind of services, which actually a lot of people can use… you don’t need all these kinds of special, tailored advice so you can bring your cost down. You can compound much better. So why not?

The idea here is that as finance goes digital, be open to these new ideas and look how to manage the risks. Yes, be cautious. You don’t want to do any old how, but all these new ways are going to make things more accessible to us, allow us more choices and more ways to go about planning our finances, and this will fundamentally change the kind of products we use, our interaction with the money. So as an extension, it will definitely change the way we live our lives. Everything is going digital, like it or not. 

Overall, I know that it is pretty scary for some aspects of life. I vividly feel it. My body is aging, it scares me sometimes. I know that I’m out of touch with certain things in the market. As I get busy with podcasts, I know that I can never be fully aware of everything and sometimes I rely too much on past ideas to evaluate the future. 

I think today’s episode is really about opening up our minds, being relevant, learning and just recognize that hey, the future is amazing. A lot of things are going to happen. While there are some fears here, why not? Let’s capitalize on it and see how far we can go. And if you have any struggles, any concerns, any worries… hey, at least know that you’re not alone, okay? We are here for you. 

So to sum up today, about the three global themes that are going to shift our personal finance strategies. Number one: people are going to be living longer. The way you look at it is maybe retirement is not a one-time thing, maybe you don’t even do one career. You will change and you want to look at skills and develop your character rather than just bite the bullet and just grind, grind, grind. Look for things you love and see how things can go. 

Next is: work is going to go remote and you can go remote. You no longer need to be too concerned about housing prices in the city. Of course, maybe suburbs pricing will change also because more people may shift out. But the idea is you now can move around. You don’t need to be physically… and you can literally vote with your feet. That means you can go anywhere, you don’t need to be here. Work can be anywhere and that’s going to change so many beautiful things. 

And the last one is: finance is going to go digital. You are going to be empowered with all these new ways of managing your finances. Don’t be afraid. Manage the risks, yes, but hey, keep learning, keep evaluating as you go along. I hope you learnt something useful today. See ya!

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Woohoo! So yeah, I think a lot of things are changing. It’s pretty scary, but hey, you think about it: it’s going to open up possibilities. We don’t need to live here. We can do so many other things. We can try different stuff. So why not? Get yourself out there. It’s gotta be fun. 

Later this week, we’re going to talk about REITs, a very popular product. I’m sure you guys know. I’m going to spend time with Dhruv from Syfe to talk about how REITs are going to change in Singapore because we see more and more local REITs buying foreign property. So how is that going to change the dynamics? 

And later this month, we’re going to do this whole series with Providend, where we are going to talk about young family planning, mini retirement, estate planning… all those kinds of good stuff and that’s gotta be really insightful. As I was recording, I thought I learnt a lot of good stuff. 

Next week, we will be talking a little bit about how to plan your finances. So this is a big thing, right? Financial planning is a whole sector and I’ve been trying to understand what the hell is going on in this sector. What do they actually do? So after talking to a lot of them, I’ve sat down and put things together in perspective to say that hey, actually this are the three core processes that really happens in the financial planning process: setting goals, deciding strategy and managing risks. That’s all there is. The endless discussion is the thing in the middle: what strategy to use? Yeah, we’re going to talk about all these and more. Keep supporting the podcast and yep, take care. See ya. Bye bye!