A blueprint is an early plan or design that explains how something might be achieved. For the longest time, I have put off writing this post for a variety of reasons, primarily because this blog was started for myself. A long time ago, there exists a world that had limited information and tools for what I wanted to do. This is my blueprint for achieving financial independence.
When I said mine, I meant it literally. It worked for me but it might not be applicable for you. This post is nothing like the ultimate guide to financial independence or remotely close to anything like that. What this blog has is a long list of articles and plenty of knowledge that I have figured out for myself over the years.
We know all about value propositions and pain points right? What is it that makes this blog attractive to readers like you? Which pain points of yours am I able to help with?
Turns out that I didn’t even have to try. Whatever obstacles that I was facing, plenty of people was having trouble with them as well. I wrote this post to show you my blueprint to financial independence. This blueprint was what I relied on to fast-track my retirement plan.
To reduce my retirement plans to its irreducible minimum, it simply means that we must have these three things:
- You must have a fully paid house.
- You must have a good medical expense insurance.
- You must have a lifelong stream of income.
With CPF, it has already set the solid foundation for all three criteria to flourish. The human brain isn’t really capable of handling too much information at one go, so the magic number is three – simple and easy.
The following list will be a living compilation i.e. work-forever-in-progress because I’m painstakingly going through my hundreds of posts over the years and linking up all the best ones.
As expected, plenty of my posts focus on the accumulation phase because that’s exactly where I am at this point of life. Check them out below if you can’t wait!
1. Fully Paid House
- Buy a property that is affordable and attractive
- Even when using CPF, don’t get crushed by the monthly mortgage payment
- Aim for the housing loan to be fully paid or set aside the owed amount as soon as possible
- Longer 25-year or 30-year housing loans can be a good thing
- Becoming a landlord is always an option
2. Medical Expense Insurance
- Prioritize an integrated shield plan in addition to the mandatory MediShield Life
- Get Insurance for wealth protection
- Total permanent disability (TPD)
- Critical illness (CI) and/or early CI
- Personal accident
- Disability income
- Look out for CareShield Life launch in end-2020
- Firm believer of Travel Insurance after dislocating my elbow overseas
3. Lifelong Income Stream
a) Asset Accumulation : pre-FIRE, maximize income and minimize expenses to accelerate our FIRE journey.
- Improve what we are good at (specialist) to increase our salaried income
- Side-hustle (generalist) outside of full-time employment to grow alternative income
- Invest in equities such stocks and real estate investment trusts (REITs)
- Exchange traded funds (ETFs) can track global indexes with low cost
- Use Robo-advisors to automate index-tracking investments
- Park emergency funds in safe and high liquidity Singapore Savings Bonds
- Track your investment portfolio
b) Inflow / Income : no longer engaged in full-time job, this stage of FIRE is reliant on cash-flow generated from portfolio and alternative income.
- Survive on income generated from assets
- Diversify alternative income streams
- Engage in part-time or freelance work that you enjoy
- CPF Life payouts forever
c) Outflow / Expenses : controlling expenses, especially for factors beyond our control, is critical.
- Ensure dependents (parents) have a worry-free life
- Maintain a budget using an app – I use YNAB
- Track regular expenses and be ready for one-off surprises
- Eliminate bad debts