Tag: T_FOMO^livelihd

BurnRate=only half %%stressor profile

Posted on by tiger40490

Once upon a time, I had a hope that, for most men and women, nonwork income would relieve bulk of the pressure of this modern life, perhaps thanks to globalization reduc`min cost@basicHealthy Food.

This hope was based on a universal observation — cash flow is the primary source of pressure in modern life. FIRE discussions reinforce this common notion. I think it is only slightly exaggerated, like by 0.1%

See 3stressors PIP^FOMO^burnRate. Family harmony, wellness … can become more serious stressors than cash flow.

In my case, My non-work income is rising slowly but steadily to “close the gap” with burn rate, thanks to the contribution of other burn-rate relieves such as shield plans, stable inflation and currency, well-managed healthcare cost, robust rental demand, high-payout CPF-life,,,) This rise has given me a precious lens that’s rare among my peers. Through this lens I find peer comparison as a chronic, pervasive source of pressure. You can call it exclub or keeping up with the Joneses.

Now in my 40’s I feel burn rate is (slightly more than) half the “stressor profile” in me and my peers ! HaiFeng is not a best case study as I don’t know him well. Consider fellow techies like Raymond — if I had a consistent $6k nonwork income + zero salary, I would still feel low-income (not impoverished), mostly due to peer comparison and FOMO.

(Note non-work income does cushion the impact of PIP and job loss… Fairly effective ! See covid19$$handout reflect`Realistic burn rate)

Advice — Better accept a simpler lifestyle than the so-called “peers” lifestyle:

  • without vacations to Europe, Japan
  • smaller home, in an average school district. Remember Ms Cheng in Bayonne.
  • small cars
  • without latest smartphones
  • fewer yoga classes

Look ! The tunnel vision of FOMO doesn’t pay enough attention to a few fundamental factors such as

  1. lifetime income, in addition to peak income
  2. wellness, long-term vitality
  3. family harmony
  4. career longevity
  5. long-term peace of mind, deep and sustained sense of security and protection (by some God, a government etc)

##struggl`families earn`$7k #Julius/LZ.Y #discipline

Posted on by tiger40490

Oth risk — this blogpost is less focused, less specific, less concrete, less rigorous than other blogspots below , but I like the 7k benchmark as a concrete, real-world benchmark.

My neighbor Julius complained about high living cost in SG (and loss of good jobs due to foreign professionals). After I told him about my friend R T whose double income adds up to about 9k gross, Julius immediately replied that a SG family would be lucky and comfortable once household gross income hits 7-8k. I wonder why 7k would be a struggle.

Q: if burn rate can be 4k/M for a family of four, then why is 7k income a struggle? Note the 7k median earlier.
A: a key factor — Median nuclear-family income is higher.

I assume he was describing a /stereotypical/ Singaporean Chinese family with kids (we both fathers of two), and possibly with grandparents to support financial.

  1. CPF deductions — 1~2k fixed percentage. Let’s assume 6K take-home
  2. —- My guesstimates of the G9 biggest (ex-CPF) expenditure categories:
  3. tuition + enrichment … — once surpassed 3k for my kids. ZengSheng feels for a family with 2 kids, childcare is the biggest outlay category
  4. essentials like nutrition, transport, utilities — could be 2-3k
  5. [m] maid — up to 1k. common if both parents work
  6. travel + dining — was almost 1k for my family.
  7. [m] car ownership? Not sure how many “struggling” families would take it on. Perhaps quite a lot.
  8. [m] allowance for grandparents? At least $500 IMO. Aaron Lee agreed, at least for the local Chinese family
  9. [m] mortgage — usually by CPF-OA, but some take on an investment property, with additional mortgage burden.
  10. insurance premiums? life policies, endowments, medical. I only have medical so probably lower
  11. [m=”light” burden in my current carefree life]

— a friend of mine with two kids in Grade 12 and College Y2. Self-employed, so his net income is around 7-9k, after some haircut (He quoted 30% haircut as standard). He did an calculation for his 2019 burn rate . Around 7-8k/M or 七八千. Struggle? He said there is livelihood pressure.

  • including mortgage. (Without mortgage, he said perhaps 五六千, but I feel he was less sure). I guess he has two mortgages for his two condos.
  • including insurance of 一万多 / Y. This estimate is vague, because I didn’t want to poke my nose in
  • probably excluding another 一万多 / Y insurance for a grandma
  • including private car monthly cost, which is needed for his daily work. I doubt he amortized the car purchase cost.
  • no more maid
  • including vacations. His family likes vacations.
  • including $500 piano lessons

I told him my wife spends presumably $1k, so our total burn rate is $4k+. So mine is $3k/M below his. He immediately pointed out mortgage as #1 difference. Car is probably #2 difference. Then we compared our insurance cost. I feel these factors explain about $3k.

— discipline for consistent saving

Q: So how about saving for college/retirement? Such a long-term plan can be very hard to implement. Many would shift focus to near-horizon and save what they can.

Based on this quick check, I now believe saving $1k/M would be challenging for this stereotypical family trapped in a cashflow low ground. ZengSheng also felt this stereotypical family would be hard pressed to save any meaningful amount. I agree with him that for the Chinese, saving at least $1k/M is essential.

This is also the Singapore government’s stance.

Financial discipline is easy for JackZ, RaymondTeo, me, and my dad, but hard for other family members and can be a challenge for my kids.

— FOMO^livelihood

Based on my personal record and analysis, 4k/M burn rate can be sufficient for a family of four, without the level of discipline of the ERE author. So family livelihood is taken care of , but why why would a 7k family feel so bad?

I would say FOMO peer comparison is the main underlying reason.  As stated in ffree^FOMO #9K/M, if you can’t afford the nice things that your neighbors, ex-schoolmates and colleagues can afford, then you feel left behind and poor.

[19]barebones ffree: kids inferiority, deprived@@

Posted on by tiger40490

Be prepared for prolonged hibernation (for boy). In one scenario, my family income might drop….

See also my blogpost

In contrast, this blogpost is more about deprivation.

— Q: among the three ffree scenarios, is the jobless scenario belt-tightening like 苦行僧, deprived –> kids feeling inferior to classmates?

A: As of 2020, the spending habits of my wife and kids imply a burn rate that is 50% higher than the $3k/M estimate in my bare-bones ffree. However, I have reason to believe that once kids grow up, my family burn rate will drop.

A: In my numerical analysis, I zeroed out luxury spend, mostly air tickets and restaurants, not the premium foods we buy from stores. In a jobless situation, I feel confident we Can make these adjustments and get used to it, over 2 years.

  • $100/M additional spend would provide creature comfort such as … nearby vacations, day tours
  • Remember, staycation hotels and restaurants are new to me and wife. Removing them is not deprivation.
  • In any city I know, there are plenty of high-quality free-entrance places for vacation. In fact, those commercial establishments requiring a ticket are usually smallish and artificial.
  • coffee shop 杂菜饭 (mixed vegie rice) is an example of frugal indulgence .. ##frugal indulgence ] SG 

A: In the Singapore context, S$2k/M is not abject poverty. In the U.S. low income might be more harsh… I can only imagine but my imagination is based on limited observations.

A: In any country, my kids would need to adjust and grow up as confident kids in spite of family income lower than classmates’.

  • me: Hi Mike, if you didn’t have your parents living with you as a kid, I wonder if you felt inferior to your peers in school.
  • Mike: Nope, I used it as ambition to do better than them.
  • me: I find it hard to believe. I saw this kind of fighting spirit and optimism only in movies
  • Mike: Its actually true
  • … I then shared with Mike my childhood experiences as the only kid without television at home. I felt deprived but survived.

— A: To live comfortably within SGD2k-3k/M, family member need to live like me — practice everyday mindful spending and restrict careless spending, similar to restricting calories. Basically, everything more than $10 needs a conscious decision. Tough? Easy for me.

On a deeper level, Freedom^Responsibility are two sides of the same coin. Responsible spending, Self-discipline and Living-within-means are necessary for financial freedom. Without them, even a $5k passive income would become “insufficient” sooner or later as you liquidate the income-generate asset.

The Business Times article described a max-savings lifestyle, not too different from me.

— globalization: food and clothing cost is reducing world wide, so is the minimum cost of living in SG. U.S. would require car ownership, even for a retiree !

Q2: but why is our monthly burn rate not reducing?
A2: I would say as a bachelor, my burn rate did reduce gradually, but as a family we all want the same level of luxury and creature comfort as our neighbors. We would FEEL impoverished and deprived if we can only afford to consume at the same level as 10Y ago (which has now become cheaper.)

This Q2 has implications on FIRE and bare-bones ffree.

Wife, as a mainstream consumer, wants to feel “affordable” when considering certain everyday “lifestyle” spend like a toy, personal care, home fixture, fancy food… If her friends can afford something, but I tell her “not necessary”, she would feel deprived. To me these “lifestyle” items are all unnecessary almost irresponsible, but I’m no purist either — look in the mirror! My wife is not a minimalist. Me? neither!

 

[20]ffree^FOMO #9K/M #Gary/Yin

Posted on by tiger40490

See also my blogpost on

After talking to Gary.Guo, I realized that I could be ffree but not free from peerComp pain — when I notice so-called “peers” earning a lot higher, and their families enjoying those things I used to dismiss as unnecessary… I would feel FOMO/FOLB i.e. left behind in the slow track. I think Henry.Yin also said that RMB 500k salary felt too low for an unmarried tech worker. I would hear similar sentiments if I talk to more people.

On one hand, minimum acceptable food[1] cost is dropping globally, and I have way more than enough income to survive. On the other hand I feel lousy seeing some so-called “peers” earning 20 times more than that minimum, and twice my salary. Each of them seems to complain about cost of living.

[1] see globalization reducing minimum cost@acceptableFood

FOMO … The tendency to feel envious, and the tendency to compare to our neighbors are … basic human tendencies. Even a child would experience that. However, it takes a rational mind (wisdom) to control the tendency. Other people’s envy is the damper of my bare-bones ffree.

If we don’t compare to the (wrong) peer group we CAN actually feel pretty comfortable and carefree, basking in a glowing self-esteem.

So why do we choose to engage in the unnecessary comparison? In this question, I’m confronting the paradox of my adulthood. In pursuit of a more rational perception, I have a chance to find and restore some balance in my world view. I feel Theordore Rubin’s books shed some light. He introduced some good descriptors.

This is a confusing, subtle topic, with multiple layers. One of the analytical techniques is a list of questions.

Q: How much monthly (passive) income is enough ? Note Annual income is not very granular.
A: Philip Che said $5k would be comfortable for a family of 4. Wife said 4-5k for my family of 4, as discussed in SG: bare-bones ffree=realistic #WBank^wife^Che^3k

In the Chinese middle class family burn rate the single biggest poisonous element is top schools. Top schools entail humongous housing cost [1] + college funding. This single element has the (destructive) power to transform a carefree life into a stressful, miserable life.

Q: What did grandpa say when I said my son would go to an average American school while other immigrant Chinese families mostly live in top school districts?

Q: What would the early-retirement-extreme author say?

[1] actually you may be able to rent in a top school district.

— Q: With my low burn rate of, say, 3-5k, what if my wife earns 3k and I earn 6k from work like the Teo family? In theory my carefree easy life would be sustainable but would I really find Peace?

Main street tech jobs pay about SGD 5k.

A: I think most people in that situation would probably feel below-average in salary, and unsatisfied. Those without kids or not yet over the peak would feel /wasted/ at that salary.

With 9k salary, some exclusive “clubs” would reject my family members.

— See also the blogpost on khmer villagers and similar cultures in SEA, Latin America, and some Buddhist cultures — more satisfied, less striving.