The Latte Factor

My sister has been giving me books on how to plan for my financial future. I now know that the tidy sum she has invested in several funds and her own personal cash is due to astute financial planning on her part, none of which is due to magic or her huge salary (which she should share with her brother).

What I learnt so far:

• The latte factor. All the small unnecessary stuff that you buy on a daily basis, eg. Lattes which you can bring from home instead of buying from starbucks, can cost you thousands a year, money which in turn could have generated more cash.
  
• Save what you can. Millionaires don’t go buying those nice JBL speakers. Entry level Creative speakers will do.
  
• They NEVER borrow money from banks, but in my case my bank is the Vishnu International ( Interest free wad ).
  
• They always have what unused money they have making more money in several trust, index, hedge or other kind of funds.
  
• Most ( not all ) start young. And the sooner you start, the higher the chance of getting your first million before your retirement.
  
• The more money you have, your gains will proportionately be bigger.
  
• For the undisciplined like moi, you have to make it automatic, i.e. you have to invest the money as soon as you get it. You also can’t spend what you don’t see, if a proportion of your pay is channelled straight into a separate account for investment/savings purposes.

So after a short look at the several funds offered by our local banks, I realised that the thousands I’ve wasted on stupid stuff (latte factor) has cost me even more money.

Why? Cos I don’t have the minimum amount to start a fund.

Anyways, for those of you out there who like me, can’t save a single cent, my advice is, start slow.

I’m going to sign up for the auto-savings account thing for my bank account, where they deduct a certain preset amount from you, and transfer it to a higher interest account. The best thing is, there’s no penalty or extra charges. So the bank gets you to save, plus they give you about 1.3% interest, much higher than the current 0.25% your savings account fetches.

Using this method, you could set aside maybe $100 monthly. By the time you ORD and enter uni, you can shift your cash to a index fund, or buy that nice laptop you’ve been eyeing.

Best thing is, this method is automated, so like I said, you can’t spend what you can’t see. Definitely for people without discipline like me.

I sound like a damn salesman. Damn. But I guess, if I’m ever going to buy my silver Audi TT Quattro before the age of 35, I’ve got to start planning early.


‘Why so serious about your future now?’ You may ask me. Well, when Vishnu, Sing and I were in Isyraf’s car last week, I realised something.
WE ARE OLD!

We’re old enough to drive. Old enough to die in a red rhino crash at a traffic junction. Old enough to start worrying how in the hell we’re going to provide for ourselves.

Got to start saving. Got to stop spending. And I’ve got to terminate my credit card with Vishnu International. Haha.