What Your $36,000 University Degree Never Taught You – How to Retire by 55


Getting a business degree is an expensive and costly ordeal that teaches you many things in life. Besides setting you back by about $36,000, it also equips you various life skills such as:

  • How to write impressive reports without using facts
  • How to construct pointless arguments for participation’s sake
  • How to  survive boring boardroom meetings without falling asleep

Sometimes, a good university would even have a wonderful career service office who teaches you more practical skills like how to write good CVs and résumés. However, as much as your degree education attempts to equip you for the working world, it fails miserably in preparing you for the real world.

Your degree might have taught you how to get employed but I bet no one taught you how to retire.

I should know… I had to pick up this knowledge first hand in my previous stint at a financial advisory firm! Here are some valuable lessons I gleaned from the experts during my time there.

To retire early and comfortably, you will need to have 3 pillars in place. The earlier you set these up, the cheaper they will cost, the easier it would be and the more you would have at the end. Unfortunately, what stops most from getting started isn’t the lack of money but rather the lack of common sense. These 3 pillars are…

Insurance, Savings & Investments

Insurance:

Photo Credit: www.sterlinginsurancecoinc.com

The number one worry of every retiree is their deteriorating health. When you retire, things in your body just don’t work as well as they used to anymore. This is an unavoidable reality everyone has to come to terms with. Luckily for us, Singapore has one of the best medical services around the region.

However, this quality does come at a price – a rather high one too if I may add. I know Singaporeans have this unbecoming habit of complaining about expensive doctors fees. But honestly, if you’re down with a life threatening illness; would you want to be treated by a cheap doctor?

The good news is that this problem has a simple solution to it. A well thought out insurance portfolio should easily take care of this problem. Naturally, our degrees do not teach us how to do that.

What You Should Do If You Want To Retire Comfortably:

Find yourself a trusted financial planner and ask them put something together for you. I have seen too many young men refusing insurance and too many old men refused by insurance companies.

A wise man learns from his mistakes but an even wiser man learns from the mistakes of others.

I sincerely hope this is one mistake you never have to learn personally.

Savings:

Photo Credit: www.sharepick.com

In general, savings is a concept easily understood but seldom applied. Savings make up one of the key pillars of retirement because when we are out of jobs, we need an asset that can be easily liquidated to give us access to cash.

Unfortunately, this liquidity found in our savings is the exact problem that hinders us from savings up as well. Every time when this amount grows to a substantial figure, we would have this irresistible urge to splurge it on vacations or branded goods. We take it out when we should have kept it in.

What You Should Do If You Want To Retire Comfortably:

If you are struggling with self discipline, a good alternative would be to open another savings account with a bank that is relatively out of reach (Not DBS/POSB) or have one that is not linked to any debit card, ATM card.

The idea behind this is to keep your savings inaccessible so that you would not spend them on a whim. If this still does not stop you, you would be well advised to subject yourself to forced savings plans on top of your CPF.

Some of these examples include…

  • Endowments Plans
  • Regular Saving Plans (RSP) with ETFs
  • RSP with Mutual Funds

Investments:

Photo Credit: lifehacker.com

In my opinion, investments are the most misunderstood financial instrument of this lot. In a way, it behaves like an “anti-saving” for most people:

  • It’s a concept that most don’t understand, but are in a hurry to apply.
  • They often lose more than they save.
  • They kept it in when they should have taken it out.

This is so because investments require more work than the other two pillars. Like any other financial instruments, an investment is just a vehicle to bring us to our financial destination.

As with any fast vehicles, it requires a license or training to operate. Without proper training, you are just going to cause harm to yourself and the people around you with these fast vehicles. This is true for both automobile and financial vehicles.

Once again, these are lessons which most of our degrees fail to teach. Even the most relevant business degree is as useful as the Basic Theory Test (BTT) is to our driving – theoretically true but practically useless.

What You Should Do If You Want To Retire Comfortably:

Insurance requires good planning; savings require strong discipline; investments require brilliant strategy. If you really want to improve your investment performance, sign up for an investment course or find an investment mentor.

These courses usually cost up $2,000 – $3,000 and that’s what discourages common people from signing up. But hey, if you’re willing to pay $2, 000 – $3,000 to get yourself a driving license to drive safely, I don’t see why you shouldn’t do the same to invest safely.

These driving lessons help you reach your destination safely just like how investment lessons help you reach your financial destination surely. Besides if you do what the common people do, wouldn’t you end up with the common investment losses?

After all, you did already pay $36,000 to learn something theoretical; why not pay a fraction of it to learn something that’s actually useful?

The 3 pillars mentioned absolutely essential information for anyone who is looking to retire early and more importantly, retire comfortably. I’m so bummed that I didn’t get to learn all of these during my degree education, but I‘m glad I was lucky enough to find mentors that guided me along the way. I can only hope that you find your own mentor soon.

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Image Credits: images.wisegeek.com

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