I play mahjong as an intellectual game (as opposed to gambling). In official tournaments, there is a time limit, and everyone is supposed to play as fast as they can to ensure as many games played as possible within the limit. This necessitates us players to think about our hand and strategies before it comes to our turn, so that we can execute our turn as fast as possible.
The players who do not practice this, gets all panicky when it comes to their turn, make wrong moves, or take a long time to make their moves and get penalized.
I like to apply the same philosophy when it comes to personal finance.
My sister started working later in life compared to her peers (due to an aborted PhD stint), and does not have much cash savings. Buying a property is on her to-do list, but since she will not be able to do so within the next two to three years, she pays no attention to the property market movement, mortgage rates, governmental housing policies etc in the meantime.
Then there are PF bloggers who are busy getting out of debt and have no spare money to invest. So I read lines on their blog that say “I don’t need to think about this until I have spare cash to invest.”
I do not agree with this line of thought.
Our PF downtime is the best time of all to get educated on investing, market trends, official policies. Why waste all this available time until you are financially ready, and then scramble around, asking for advice and not having time to really digest or analyse them? Or wait until you have the $100,000 downpayment saved only to realise that you could have gotten a similar property six months ago with only $75,000 down, if you had only paid some attention? Or you suddenly discover that you have managed to save $10,000 just for the purpose of investing, kudos! Only to realise that you do not know the difference between managed funds, index funds and individual stocks. Or that you do not even have a brokerage account or know how one works.
And in the meantime, the clock is ticking. The window of opportunity passes. Or you throw your money at the wrong things in your scramble just so that you can say you caught hold of the window. Or wait, did you even know that the window was even there?
Anecdote: My financial mentor Mr C started seriously studying the Singapore residential real estate market in 1997, the same year he lost all his investments and savings amounting to half a million in the Asian financial crisis. He did it for ten years while he recovered his stock market losses.
At the beginning of 2007, he had more than recovered from his 1997 losses. He also had ten years worth of analyses on the Singapore property market. It was the latter that allowed him to divert the majority of his investment into Singapore property and avoid the 2008 apocalypse. His networth more than doubled between 2007 and today.
There are many money making schemes that I do not have the capital for at this point, but I do the maths and analyse the benefits and the risks all the same. I will not always be lacking in capital, and as long as I keep practicing the thinking, I will know when I am in a position to do something, and also what to do then.
In the meantime, I continue with the mahjong. 🙂