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Archive for December 2012

Travel and Savings

This week, I've been reading and discovering a lot of travel blogs. It is quite fun reading what other people think and their experiences are as they are embarking on their journey of a lifetime. I'm quite jealous, to be honest! So, as I try and embark on a similar journey (hopefully), I kind of want to share a personal post on what savings and travel mean to me.

When I was way younger, like in primary school, I always had a tendency to spend beyond my means. Whatever I wanted, I would normally buy, provided that I had enough money in my pocket. There was this one time when I was in fourth grade that I bought too many books at a book fair and basically had nothing left for lunch and snacks. It was only around 12 noon and well, I overspent too much! Good thing a kind classmate gave me some coupons so I could buy food and the local school bus was there to take me home. Otherwise, I would have been screwed.

During summers, I would never even have enough money saved up! Well, I was such a loser way back in the day and no one in our culture/country would normally just go out to find jobs during the summer or go to the beach like Westerners do. I normally spend my summer at home, playing computer games or watching a heck of a lot of telly. For two freaking months. Boring eh?

Then came high school and well, I got to enjoy what life has to offer. My mum is open to me going out to several beaches and/or resorts during summer with my friends, and I was forced to learn how to save.

However, that all went out the window when I first started working and earning my first real paycheck. I got addicted to spending too much on material things and ended up with credit card debt, and on top of that, trying to pay for my last trimester in university.

I was in debt, and I didn't know what to do about it.

Six years later, here I am. More financially stable and about to embark (hopefully) in a huge savings goal to eventually go on my dream trip. I wouldn't expound on that today, but maybe a bit more when I am closer to the goal (and the date), and well, if everything is more in place. It took forever for me to be what I am right now when it comes to money and the discipline that it takes for me to not spend too much and live within my means.

Here's how I did it:

1) Understand that you have a problem. Five+ years ago (and well, even when I was really young), I knew that I was an impulsive shopper. If I liked something, boom, I would get it. And when I thought that all these clutter started piling up: clothes that I did not wear, books I would never read, bags I would never use, it began to dawn on me that I could have used that money for something else. Knowing that you have a problem is always the first step, and once you acknowledge it, you know you are truly on the way to "rehabilitating" yourself.

2. Read and research. I knew that I was an impulsive shopper so I spent down times at work trying to read other blogs on how to save money and how to curb my spending. It took more than a year of practice for me not to go to malls, and just delaying my gratification. It did work, eventually. I read a ton of money blogs, to be honest, bought two books on how to save and invest (thank you so much Rich Dad, Poor Dad - you are one of the reasons why I turned my life around).

3. Once you have done your research, practice what you've learned. This is one of the hardest things I've ever had to do! Well, it took a lot of patience and practice, and eventually I got the discipline to do this. I made charts, Excel spreadsheets, the works! I tried everything that they threw at me and when I found out what works for me the best, I stuck to it and made it my own, with a twist.

4. Save, Invest & Save some more! Other travel blogs out there have savings tips, and well, they helped me too, but some of these tips, I already do know by heart. I love how these blogs convert the price of one Starbucks latte to an overnight hostel stay somewhere here in SouthEast Asia. I guess it's just a matter of putting things in perspective. Need a new iPad? Well, x number of lattes in Starbucks = 1 iPad. Same for travel!

So, as I embark on this huge savings goal, hopefully, these tips help you too.

Oh, and did I mention I'm Asian? I do work full-time at a multinational company at the moment, but I definitely don't have a salary of a Westerner nor do I have a trust fund. If I can do it (save for a big trip or some other reason) then anyone could!

Travel, Me, and Variable Life Insurance Thoughts

My flat when I was living in Central London

Apologies, I know I have become a bad blogger recently. I have gone on a few trips here and there which took up a lot of my time, and watching a lot of shows in the middle. Thought I could make it up with a brand-new semi-travel and personal post! Hopefully the wait is worth it. 

So two weeks ago, I was contacted by a previous next-door neighbor asking if he could meet with me to discuss some investment products that his company was offering. Out of courtesy, I agreed, and well, I am curious enough to know what investment product it was, but was just hoping it was not insurance-related as I definitely won't buy it. 

Just my luck. It was an insurance-backed product. Ugh. I really hate those things: you save aside x amount of your money every month or year, and the company invests it in so and so and after x amount of years, you get a huge percentage of your money back as interest + your principal (that is, if the economy is up). Oh, what's more is that it is insurance-backed. Meaning if something happens to you (ie if your life conks out say, at this minute or so) - your beneficiaries get x amount of money as well. To be polite, I said I would think about it (but in reality, I already set my mind on saying no. I just needed another way to decline in a more polite way). 

The sales pitch went like this: "You get x amount of money back as your savings/investment for the future, and your dependants will also get the money without bureaucracies if something does happen to you. I know you're still young, but if you invest while you are young, your premium is smaller compared to when you are comparitively older. Plus, shouldn't be saving up for your future family?" 

Uhmm yeah, not interested. My reasons?
1) By the time that I do get my money back, its value would have been really depreciated. We all know about the time value of money right? Your $1 now is not worth $1 in say, 6 months time. So if I invest my money today and I get it back in say, 40 years time, my investment is basically worth half of it, I guess. 
2) As traveler, I find that life is too short. Why would I want to invest a considerable amount of money for the future right now when I could use it to travel? I could go out and see the world instead of worrying about what I would leave my (future) kids and/or husband? I will cross that bridge when I get there. I love my life and the way I am living it now, so I'm sorry, you chose the wrong person to sell this product to. 
3) I don't even have kids! The only family member I would want to take care of and/or leave money to is my mum! Not my cousins, nothing. Why would I pay for someone else's happiness? Other retirees out there forego their children's future inheritances, why can't I?
4) I am more interested in liquid assets. I need my cash now for my impromptu trips. I want to spend my hard earned cash the way I want to, which is travel (and books - and occasionally clothes and bags & shoes & concerts)

And so, when the time for me to decide was nearly up, I got a multitude of phone calls: I literally just arrived that morning from another out of town trip (Coron, Palawan) and was just warming up for another few days of work before another holiday (to Brunei). So yeah, forgive me if I did not have the extra time answering those calls. I got an email, which I then replied back to a few days after saying I would decline to take this offer.

I think he was a bit persistent because he was missing his quota for the year. Sorry, but still no. 

Worked out the math and it went something like this:
*Save $1200 for a year for 20 years
That is $24000 for 20 years. 
With that money, I could have gone around the world for a year (or more) if I saved that amount within a few years. 
* I could invest that money in a fixed income account (ie bonds or savings accounts) and get a fixed rate of interest every month which I could also use on my incidentals or on travel. 
* I could still be happy knowing that I had that amount of money ready to spend. 

So sorry, but those are my two cents worth about Life insurance & variable life insurance. 

I do not believe in it (at the moment) - I want to spend it more on my travels and trying to see what the world has to offer. 

Then again, if you are selling me more time on planet earth and I am not going to age (which is impossible) then I might just consider your offer...

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