It’s Not Always What You See

Came across this picture on Facebook today and loved it. The first of the 19 things your suburban millionaire neighbor won’t tell youOver the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

Think that fancyass dude with the flashy sports cars, the country club memberships, and the expensive clothes must be helluva rich? Maybe… or maybe not. Paradoxically, a dude with a multimillion dollar income could be way poorer than you. Just ask the 60% of all NBA players who go broke 5 years after retirement. The mansions, the cars, the private jets – the owners had them all, yet couldn’t avoid bankruptcy.

Your millionaire neighbor? Probably drives a 9-year old car, lives in a modest house, spends less than what he earns, and pays off his credit cards in full every month. Warren Buffett, the world’s greatest investor, drove a humble 2001 Lincoln Town car with a license plate that read “THRIFTY”. He auctioned it in 2006 on eBay for charity, and subsequently bought the most expensive car he ever owned: a $55,000 Cadillac – probably cheaper than most cars in Singapore.

So screw jealousy. You can’t tell how rich people are just by looking at their flashy possessions.  Chances are, you just might be richer than them already. 🙂

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Car (That Costs A) Bomb

I’m just gonna say it publicly – I think our public transportation system is awesome.

Okay – I can almost hear the chorus of angry, dissatisfied Singaporean voices rising up to rebuke me: But they JUST raised the taxi fares! And the MRT is totally packed with foreigners/immigrants/maids/peasants/smelly people in general! And the Circle Line broke down AGAIN. THE CEO OF SMRT MUST RESIGN!!! Oh wait she already did. THE STAND-IN CEO MUST RESIGN!! Bring out the torches and pitchforks!! Die, you richest 1% of the population! – love, the 99%.

You know what? I’ve taken the New York Metro and the London Underground on a daily basis. Breakdowns, delays, line closures, stations smelling like urine, smelly weirdos walking up and down the cars asking for cash are everyday occurrences. And then there’s rush hour. I don’t really care how much the CEO of SMRT / SBS / whatever gets paid – to have 95% of the trains and buses running on schedule, clean, and with those awesome plastic seats you can fall asleep on without contracting some strange disease – is pretty damn awesome to me.

You know what’s even more awesome than those blinking lights on the MRT map that tell you which station you’re at? The fact that taking public transport is SO MUCH CHEAPER than owning a car. No, seriously. Someone once told me that even if you took cabs everywhere you went, it would still cost less than owning a car. I kinda sorta believed that, but I didn’t bother looking at the numbers because that was just way too much work. And then I came across a great article from Moneysmart.sg on the real costs of car ownership in Singapore, which shows that it costs a whopping $1,855 a month just to own a car here.

Seriously, that’s crazy. That’s even more than what I spend on everything else. You know what you could do with $1,855 a month? You could pay for university. You could eat at Ippudo (which is only like the awesomest ramen restaurant in Singapore) every single day. You could buy a Macbook Pro every month and still have change left over. You could invest it at 5% per annum (a pretty conservative estimate since the stock market has historically averaged around 8%) and end up with $281,254 after 10 years. You could…. okay you get the idea.

It baffles me why anyone who isn’t ridiculously wealthy and rolling in tha ca$h moneyyy would ever get a car in Singapore. It baffles me even more why anyone would take a friggin loan to buy a car in Singapore. Ladies and gentlemen, let it be clear that you should not be paying interest on a liability. What’s a liability? It’s something that sucks your money away, without the slightest chance of you getting it back (kind of like… children. Or your wife who spends all your money on gym memberships. Yeah, you can tell that I’m an awesome family man). Okay, if you earn a comfortable salary, and you bought your car without the help of a loan, and your monthly auto expenditure is 10% or less of your income, then you should totally get a car because you’ve earned it. But if you’re a young, just-started-working, clueless dude who just wants to get the chicks, then there are better ways to get laid (ever tried something called “talking to girls”? It’s been proven to work sometimes, and it definitely doesn’t cost $1.8 grand a month!).

“But Lionel… ” I hear you say, “It’s way more convenient. And I don’t have to wait for cabs in the rain.” Whine whine whine. I spend like $100 a month on public transport, which saves me $1,755 a month for just not owning a car. And I think I’ve only been stuck without a cab like one time for the whole of last year. Is $1,755 a month really worth that rare occasion when you couldn’t find a cab? Please – if you’re sensible, you’d save your money, plough it into investments, and earn a healthy return in the long run. Then you’d be able to afford as many cars as you want. That’s a much better choice than being in debt over a money-sucking liability.

Besides, not having a car is pretty awesome. I get to read during my morning commute. And meet random interesting people on the train. And not have to worry about parking. Or traffic jams. And predict with (almost) clockwork certainty what time I’m gonna get to my destination. And just lean back, put my iPod on, and enjoy the awesomeness that is the Singapore public transportation system.

I may not have a car, but I feel rich already 🙂