Find Your Why Behind Your New Year Goals [TFC 124]

I’m sure that’s a question you think about, right? Why do I decide to set these goals? Not about whether you should set goals but why these goals? Why of so many things under the sun, you always come back to these few things?

I’m going to share you three core ideas that underpins your decision, why these goals exist and you keep coming back to them. So yeah, welcome back. Welcome to a new year! Stay tuned.

Good morning, everyone! I welcome you to another day with The Financial Coconut. In our podcast, we’ll be debunking financial myths, discovering best financial practices and discussing financial strategies that fits our unique lives. You get it, ultimately empowering us to create a life we love while managing our finances well.

My name is Reggie, your Chief Financial Coconut. Today, I’m just going to focus on what underpins your goals. I’m a firm believer that as you get more clarity about how you process certain things, your thought processes, you become better at doing it because hey, now that you know how you do it, you’ll find ways to make it better. So yeah, welcome back!

Sorry to disappoint all of you, I don’t have new tips and tricks for you. I stand by whatever I have been propagating previously. One of the core ideas that I propagate is only have one theme for the year. What is your theme for this year? I think that is important. 

My theme for last year as with all of you… you know because you’re here and we’ve come so far. My theme for last year was to make TFC work… was to make The Financial Coconut a thing. When I’ve figured out a business model for it, make sure we get money so that we can continue to keep doing all these for you and for all of you to tune in all the time to support us and all that. It’s amazing. I think it works. For lack of a better way to put it, I think there’s no other easier way to go about doing things which is to set one theme for one year. 

Why, why, why? I am a firm believer of focus. I’m a firm believer of focus and I’ve been trying to get back this focus. What do I mean? You realize that these days, our phones… they’re amazing. All the electronics, the phones, they are so optimized to get our attention that is splitting our focus all the time… all these notification(s), social media and all that. They’re all trying to get our attention. 

A lot of times, as long as you drown in those kinds of situation, it’s very hard for you to come back on the main task so my view is focus gets you the best results. It is always about having that one goal, that one task, get it done and procrastinate along with that task. Don’t try to think of other things. I know different people will say different ways. You know yourself well. If you’ve been completing all your goals, you have been meeting your targets and hitting your theme for the year, then great. That means you’re doing something right. 

But for me, one theme, one year and you will crack it because you will be doing the thing in and out, you’ll be spending all the effort in and out and you’ll be in the same environment in and out. Like it or not, it massively increases your chances of making it work. 

I’ve met so many people that have done it: one theme for one year. After they are done for the year, the next year, based on whatever you’ve already set up… because it’s a system that you’ve built over time. So in this one year, you have this one theme and because of this one theme, you set up the whole system to meet your goal.

And so now, it’s a new year. Are you going to use the same theme? It’s okay, you know? It could be the same theme but if you decide that you want to take a different theme like myself, I’m going to take a different theme this year. I’m going to take the theme of focusing on myself, getting myself fit and healthy again. That’s my theme for the year. Everything I’m going to do, it’s going to be about that thing. 

This is my theme for this year but the question is then “oh, does that mean you’re going to just forgo TFC and not do your s***? Stop investing, stop managing personal finance, stop all of these things?” The reality is whatever that I’ve already done previously has got me to where I am and I have formulated a system more or less. What day I do what, what do I do, who do I hang out with, what is the process like and all that. 

With this new theme for this new year, I have to build on whatever that was built already. All the stuff that were going on previously, I’m building on it. I have to work through the nooks and crannies of like “okay, with this excess time, what can I do? How do I shift some of the stuff? Can I reduce certain additional bandwidth for other stuff to focus on my theme for the year?” That is definitely give and take, like it or not. 

But that’s not the focus for today. I will keep sharing with you over the course of the next few weeks. I think next week, I’m going to get some of the other hosts to come on together on my Tuesday segment to talk a little bit about what are our goals and how do we plan to go about doing it so there’ll be all that jazz. 

Today, we’re just going to focus on what then underpins your goals? What governs these spots? Why do you go about pursuing them? Generally, I realized there are a few core ideas as to what underpins them and I’m going to just wing it. 

The reality is I’m not a social scientist and I have not done a lot of research on this, but I’ve observed a lot of people. Everybody set different goals. I mean… come on man, this year, I’m going to be 30. I’ve seen many people set many goals, for many many… for a long period of time and they all generally fall under a few buckets and these are the buckets I’m going to talk about essentially what underpins the goals. 

The very first thing that underpins a lot of our goals is what we call utility maximisation. This is an economic term. I specifically use this term because there’s a lot of research based on this term. If you want to learn more about it, you should. 

Utility maximisation… So what is utility? In economics, utility is satisfaction, essentially. To put it in a layman’s term, satisfaction. To put it even more lay(man), “shiok” (feel good). The more “shiok” you are in doing that thing, you will keep doing it. You are incentivized to do it, you have underlying desire to do more and that is very human. That is a very well-studied phenomenon, which is… in economics, we call it utility. 

Under this whole utility maximisation idea, there is two other ideas. Number one is what we call marginal utility. Satisfaction, “shiok” is based on a consumption idea. In econs today, everything’s about consuming or at least at the very core of a big part of economics today. By the way, I just want to do a shameless plug here or a shameless flex. Aku (I) here did very well for econs in JC (Junior College) although I never continued to study economics. 

A short story is I got third in level… third in my level for econs. There was this one exam, I got third in my level and you know how did I find out? A friend of mine, after (the) papers were out, after results were out, he ran over and he scolded me. It’s like “oh my god. Your handwriting, very ugly, you know?” I was like “why do you even care about my handwriting?” and he was like “because you’re the model answer”. I’m like “oh my god, I’m the model answer? Wow, powerful!”

And you know what happened? Econs was the only thing I’m good at so I took my econs and I went to go and exchange with the person that’s very good with chemistry, person very good with physics, the other person very good with math. I was like “okay, you teach me this, you teach me this, you teach me this. I’ll teach you how to do econs like me”. That’s how I survived. That’s how I survived junior college and got almost straight A’s. 

Okay, okay. Back to the story, enough of the flex. Marginal utility… if we understand that every time we do something, there’s some sort of satisfaction, there’s some sort of utility that we get out of it. Then, marginal utility is just trying to understand for every unit more of the same thing that we do, how much more satisfaction do we get?

To put it simple, it’s like you have one ice-cream. (It’s) a very hot day, you want to have this one ice-cream, potong ice-cream. You go and eat. My goodness, damn shiok! Very novelty… you bring out all the emotions from when you were young and all that. So you have that first one, it’s amazing, but what if you have the second one? Maybe also very amazing, very nice. And what about the third one? Maybe quite good, but the fourth, fifth, sixth, seventh? You sure you can eat so many potong (ice-cream) at one time? 

So marginal utility is trying to understand for every extra unit that you consume, for every extra potong ice-cream that you consume, how much more “shiok-ness” do you get? This underpins a lot of your goals. Utility maximisation… which is you just want to maximize your satisfaction in other words. 

This underpins a lot of the things that we are going for, a lot of the things that we pursue. Whether is it more money, more friends, closer relationship, healthier and better sexual relationship, what have you… a lot of things that we go for is really just to maximize our utility. Understanding marginal utility, it gives you a better idea of that. How much more do I need and how much more satisfaction can I get from extra of doing this particular thing? Which then leads to an extended idea of marginal utility called diminishing marginal utility. 

Like I said, the potong ice-cream… at first you eat, very “shiok”. Very hot day, you love it. Second one, maybe also damn “shiok”, because very long you never eat potong ice-cream. The third one, quite good. Fourth, fifth, sixth… One time you eat the whole box of 6 potong ice-cream. By the sixth one, you will (get a) headache. I think very very likely, very very likely. 

That is diminishing marginal utility which is a phenomenon where for every extra unit of that thing that you consume or the act that you do, the extra satisfaction is reducing. So for every extra unit, the same unit of consumption, the satisfaction is coming down and down and down. The additional satisfaction that you get for doing additional of that same thing is diminishing, it’s decreasing. 

Think about playing games. When you first start, you play game, very “shiok”. You (get to) level 1, level 2, level 10, level 100. All your friends come and play… Wow, damn awesome. But after a while, every more level that you go for, every extra thing that you do, the satisfaction comes down. It’s very, very normal. This is a phenomenon: diminishing marginal utility. You can go and read up about it. 

I’m a firm believer that a lot of us, we are doing a lot of things just to maximize utility, just to maximize our satisfaction and try to get more of it. Why do I want to then talk about marginal utility and diminishing marginal utility? Essentially, it’s to let us know that hey, at some point, the thing that you’re going for may not be giving you the extra satisfaction. That’s probably why you are not as excited about it but it does not mean that previously, it did not give you the same amount of satisfaction or it does not give you enough satisfaction previously. Just that things have changed. You may be consuming a little bit too much of it. You can always do something else. So, novelty is important, all these other things are important. 

But at the core, I think a lot of us, we just want to be a little bit more “shiok”. I don’t think it’s a problem. I’m just trying to give you more understanding of why then the thing (is) no longer “shiok”. For every extra unit of consuming that particular thing or doing that particular action, at what point is it optimal? At what point is it maximized? 

Which is why some people will talk about everything in moderation and having novelty in your life so that you’re not always milking the same action or milking the same consumption. But I think understanding that a lot of us, when we do a lot of things, we just want to “shiok”. We just want to maximize the utility. It’s important and at some point, if we “shiok” too much, if we milk it too much, then it becomes a diminishing situation where we feel less and less satisfied and maybe it is a time to pause it and not stop it.

These are some thoughts and some things that people think about when setting their goals. It’s like “hey, you know, maybe I don’t really want to keep accumulating more wealth. I don’t really want to buy the next 10th property or I don’t really want to keep buying more shares. I want to do something else”. It’s perfectly okay, perfectly normal. It’s just a phenomenon where the more of it does not excite you anymore so you have to go and do something else for you to accumulate that satisfaction and it’s okay. 

Maybe as you rotate out of this thing and go and do something else, you may come back and say “hey, I miss this. I want to do a little bit more of this, again”. So I would say it’s actually very normal to pursue utility maximisation. It’s like satisfaction, everybody wants to “shiok”. But why sometimes you fade out of the goal? At what point is it too much? Will you rotate back? I think all of these are things for you to recognize and understand utility. Please go and read up about it. There’s a lot of… It’s a very established idea in economics. You should have a clearer idea if you go and do a little bit of research. It’s going to be fun, do it. 

And like I said, it’s very normal and that brings me to point number two. Point number two of what underpins most of our goals is actually being normal. Hey, really? We listen to all these podcasts to be normal. Is that our goal? I will share with you a little bit more after a word from our sponsor.

Okay, Coconuts. When I say being normal, I’m not saying be the same as everyone else. The reality is nobody is the same. Everyone is very different depending on how much you zoom into each individual. Nobody is actually the same, but being normal in a societal context just means being accepted and following the narrative. Like it or not, deep down, you want it. Deep down you want to be accepted, deep down you want to be part of what everybody is doing and it’s very normal. 

The thing about these narratives that are out there and the thing about being normal out there is that because you are a multi-dimensional individual, you will never be hundred percent the narrative out there so what a lot of people do is very interesting. 

There are certain parts of you or certain things that you like to do, certain beliefs that you have that is not normal. Out there in this world of narratives, in the society that you live in, it’s not normal. It can even be considered evil. It can even be considered a taboo. So what do you do? You hide those things and you try to make up for it by doing even more of what is considered normal which in our society, it’s the pursuit of wealth. It’s the pursuit of progress. It’s the “humans-is-our-only-asset” rubbish. 

Why I don’t like the… in Singapore, “humans-are-our-only-assets” because that fundamentally dehumanize us. To think of us as an asset, to think of us as an only resource for the country is dehumanizing the individual but I will not talk about it today. 

What I will say is that a lot of us actually, while trying to make up for things that are “abnormal” within our lives do a lot more of what’s considered “normal” to make up for it… essentially, to compensate abnormality in our beliefs and in our ideas and in our lives. That’s a very, very big part. It’s very cute, everybody say, “oh, uni(versity) degree is not important these days. You don’t really learn much”. I don’t really think that holds. I would say there’s a much more nuanced discussion needed for that. But everyone still do it, most people will still do it. 

Honestly… Coconuts, it’s very hard to be different. It’s very hard and very painful to be different. Everybody wants to be accepted… in my view, at least. I’ve established some thoughts previously about getting out of the rat race and all that. It’s all a pursuit of finding the people that can accept you and not really escaping from whatever system that is currently in place.

I do think a lot of people… I believe we are herd creatures and I believe that being normal is a very big part of our lives which is why, whatever our friends do, we want to do it. Whatever narrative that is being peddled, we have an inclination to do it and I think that’s perfectly okay. You don’t want to always be different, you don’t always want to be special. It’s very tiring. That is one part of what underpins our goals under this idea of being normal. 

But there’s also this other part that I want to accentuate is that there will always be things that you believe in or things that you choose to adopt or ways of lives that are not normal by societal standards depending on how big you want to define this society, whether it’s in your family, your friends’ circle, the country or even the broad narrative out there in the world… whatever… or your society, your religion, what have you. 

There will always be some things that you do, that you believe in… you do, you practice that is considered not normal or considered taboo, considered evil and thrown under the “evil bucket”. I will say that a lot of people overcompensate on the normality ideas so that they can cover up their shame and their fear of being different. 

I want you to recognize if that is something that you’re doing… if you’re spending day in, day out, a lot of time and effort trying to accumulate a lot of money, trying to buy a lot of property, trying to spot your next big share, trying to be a millionaire, trying to do all those things, is that really what you want?

Do you have a goal for it? Do you have a thought for it? And if that’s all you want, cool. Go… go for it. If it’s not what you want, you’re unsure, it’s also okay. You can just say you’re unsure but still do it because hey, we all know that you and I, we all know that with more finances, it gives us more optionality. It gives us more strength in this system, in this society so I think it’s okay. 

But if you vividly know that you are just trying to overcompensate, to do more of it so that you can hide all the abnormal and hide the shame that you have because you’re not a hundred percent normal and a hundred percent part of narrative, then I hope that you can re-visit your goals.

Is that really what you want: pursuing all that in your life just so you can be accepted? My goodness, very painful and yeah… I would say it’s hard. That’s all I want to talk about today, at least up till now. Maybe down the road, I will expand a little bit more. Let me know if these kind of stuff are things you are interested in because I am a big fan of thinking about a lot of these things. 

Because personal finance… At some point, it’s personal. You also have to care about the personal part. You cannot just care about the finance part. You have to contextualize and all these things that we talk about underpins that context. That’s all for point number two: being normal. 

Which leads me to point number three, and that is pain reduction. A lot of our goals are really for pain reduction, whether is it future pain reduction… think about it, all the fear about the future: what about in the future? Property prices very expensive, medical prices very expensive, your kids going to cost a lot… blah, blah, blah. All these are fear, all these are pain. Just the fear itself is creating a lot of pain, physical manifestation of pain or emotional pain or what have you, depending on the degree of pain. 

But a lot of people, we do a lot of things to essentially reduce the pain. A lot of these pain is future. Of course, there’s also the pain of now but a big part of personal finance is, it’s a lot about future pain reduction: insurance, investments, buying property now, trying to understand inflation trends. 

A lot of things that people spend their energy and effort on when they are indulging in the personal finance circuit, it’s really about a reduction of future pain. Is it okay? Yeah, okay. I think if things are vividly clear, you… I mean… aiyah, you know in front got a hole, you don’t want to walk into the hole. Nobody wants to do that so I think it’s fine. 

But when you’re overly indulging in it, then it’s a question mark so that’s the part where people… they overdo it. How to say whether they overdo it, that’s a whole different discussion altogether. It’s very individualized, it’s very contextual. 

But hey, we cannot discount that a lot of us, we do a lot of things, a lot of our goals are for future pain reduction: buy house now, invest now, buy your insurance now so that in the future, prices very high, you still can afford. Your retirement is secured, blah, blah, blah. A lot of pain of the future, governs… underpins our goals today. 

That’s one part, but there’s also the other part, which is the immediate pain reduction, immediate pain relief and all. We do a lot of that. Whether is it creating passive income so I can fire my boss or whether is it finding a life partner that I can live together with forever and ever, setting up a family… what really underpins some of these goals? I think for a big bunch of people, it’s really immediate pain relief because there is so much pain, they just pick up whatever solution that they believe works and they go for it so that becomes their goals. 

I’m not laughing at you. I’m laughing with you because I also do a lot of that. I think that’s important to recognize but that being said, whether is it utility maximisation, being normal or pain reduction, a lot of times… I wanted to say sometimes but actually a lot of times, these different factors, they counter and they conflict with each other. 

Sometimes, you want to be normal but it’s causing you so much pain trying to be normal and you want to also relieve that pain. In that process, you’re trying to maximize your satisfaction, you maximize your utility but because you maximise your utility now, you may diminish your future readiness for future pain relief. 

Coconuts, you listen until here, I just want to thank you. I’m going to leave you in a mess. No, no, no… like I said, why I wanted to do today’s episode? Because I want you to get a little bit more clarity about what underpins a lot of the goals that you’re going for. At the same time, recognize that there can be some conflicts with the different goals that you are going for. It’s perfectly normal there’s tension because you’re trying to do multiple things. 

And then if you can, just have one theme for one year. Focus on that. Every year, you learn one thing, one thing, one thing, and master that one thing. Eventually, a lot of these things will come together and it will work rather than trying to do 10 different things at one time and have all these conflict ongoing with all these things that underpins your different goals.

All that being said, I will say that for a lot of you listening in, in the whole personal finance journey, as long as you’ve a decent plan, work within the plan. Understand your goals, work within the plan and manage the risk. Once you’re done with that, a lot of things… you don’t need to overdo it.

A lot of the ideas that are being peddled out there can be a little bit superficial like the whole discussion about delayed gratification, compounding, investing for the future. You can compound but hey, let us be real. Whatever you do now also compounds into the future, right? Not just money, right?

Your experiences that you do now, your relationships that you do now, the interest that you develop now, the skill sets that you pick up now, they all compound into the future. So hey, is it all about putting every single penny into compounding in the financial markets? What about spending on the now, spending on accumulating the experiences and accumulating the good friendships? 

It’s an ongoing discussion. This is all I’m going to do today, to help you better understand what underpins your goals and hey, new year, new you… okay, new year, old you also okay. Don’t need to always new you. Come to (our) Telegram group and let me know, let us know what are your goals for this year? 

I’m going to sum up on the three things that underpins your goals or at least the three bucket of factors that underpins your goals. Number one is utility maximisation. For a lot of us, we do a lot of things really just to maximize our utility, to feel more “shiok”. It is okay, it’s perfectly okay. You just need to recognize that hey, there is this thing called marginal utility which means every unit that you consume, it increases your satisfaction. But there’s also this thing called diminishing marginal utility where every more thing that you consume actually… you don’t actually get as much satisfaction as before. That’s maybe why you shift away from certain things and maybe why some things in the past excites you but it doesn’t anymore now. 

Which brings me to point number two and that is being normal. I think for a lot of us, we all want to be accepted. We want to be part of the pack. We want to feel like okay, it is okay to be normal and in that sense, a lot of things that we do is part of the narrative. It’s okay to be part of the narrative. It’s not exactly any problem per se. 

In fact, if you are part of the narrative, there’s a lot of support system for that. Of course, the other part is because there’re certain things about us that is not “okay” within the narrative or “seen as evil” within the narrative, sometimes we do certain things to overcompensate for what is within the narrative so that we can feel okay about ourselves and hide that shame about the abnormality about us in other aspects of our lives.

Which brings me to point number three, and that is pain reduction. I think for a lot of us, we do a lot of things to reduce pain, whether is it future pain or the pain of today. 

These are three things that I believe underpins a lot of your goals. That’s not to say that you have to change your goals but I hope this gives you clarity as to why are certain things in your goals and is that really the kind of goals that you want to go for? What are you trying to achieve with these goals? I hope you learnt something useful today. See ya!

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Okay, it’s a pretty heavy episode. I wanted it to be a light episode actually… starting the year light and fun and all that, but I realize there’s a lot of ideas within this one episode. A lot of these ideas, I came across over the years but at the same time, I’ve also been boiling and observing how a lot of people decide on their goals, what to go for.

I think these are big buckets as to why you do certain things. Like I said, I’m a very big believer of trying to understand why you do certain things because that gives you repeatability. That gives you the ability to keep coming back to it. If you are just “feel feel”, every time “feel feel”, then you are (going to) hit and miss all the time, which is okay if that’s what you want. But for me, if I can know something a little bit better and I can increase my hit rate, then why not? That’s something that I want to do better. 

Next week, it’s going to be fun. Next week, I’m gonna get Rakaesh and Andrew to come on with me on Tuesday to talk a little bit about their goals for this year and how they plan to go about doing it, why they do certain goals and all that. I thought that is a better way than just me telling you “oh, my goals for this year is what, what what…” Yeah, I hope you continue to achieve and break through together with us and I hope to support you along the way. 

We have covered a lot of topics, guys… for the past two years. We’ve talked about a lot of different things. As much as I want to keep breaking down things that are more and more fringe and more and more technical which we will as we go along, I also want to be that companion with you on your growth journey towards the life you love while managing your finances well so if you have any questions for me, you paiseh (shy), you can DM me on Telegram, send us an email, send us a DM on Instagram, what have you. Your questions help me create content because, I don’t know what you want to know unless you tell me what you want to know. I wish you all the best for 2022! See ya next week.