Using Systems to Dominate Learning (And Anything Else)

The MIT Challenge

Recently read a guest post by blogger Scott Young, who stunned the world by doing the impossible. Scott completed MIT’s notoriously difficult Computer Science curriculum, which usually takes bright MIT students four years to finish, in one year. Watch the TED talk on his MIT Challenge here:

To do this, Scott adopted a carefully constructed learning system that let him compress the concepts of a 4-year education into a short span of time. This wasn’t simply a matter of cramming for exams. Scott not only passed all the exams but also completed all the programming projects, which require a deep understanding of the material. How did he do it?

First, he watched all the lectures online to get a birds-eye view of the material. By watching the video lectures at 1.5x-2x the normal speed, he managed to go through a semester’s worth of lectures in a couple of days.

Next, he spent a lot more time developing insight and drawing connections. He’d first take a piece of paper and write the concept that he was trying to understand at the top. He then wrote out his own explanation, as if he was teaching it to someone else. When he came to a gap in his knowledge, he’d go back to the textbook or find it online. In this way, he systematically filled in all the knowledge gaps until he had a deep, complete, understanding of the material.

Third, he went through practice problems with the solution key in hand. He’d check his work question-by-question, getting immediate feedback for every question he did. Compared to other students who might have to wait weeks before they got back their graded assignments, Scott’s system gave him a tight feedback loop which dramatically improved his effectiveness.

As Scott wrote in a guest post describing his journey: “…the method you use to learn matters a lot. Deeper levels of processing and spaced repetition can, in some cases, double your efficiency (emphasis mine). Indeed, the research in deliberate practice shows us that without the right method, learning can plateau forever.”

In short, Scott wasn’t studying harder; he was using a system to study smarter.

The Power Of Systems

Scott’s MIT Challenge forms the premise of the book I’m currently working on: That adopting the right systems can help you to achieve much, much more than the average individual.

You can use systems to create a desirable habit, deliver happiness to people, get fitter, be more productive, negotiate better.. pretty much anything you want to achieve in life.

Most people don’t know how to improve their own lives because they rely solely on “trying harder”. How many of us make New Years resolutions to go to the gym more often, only to fail miserably before February comes around? How many of us resolve to be more productive at work, but end up online shopping and Facebook stalking before lunchtime? And how many of us resolve to saving and investing more this year, only to have all our extra cash wiped out by a year-end vacation?

Instead of trying harder, applying systems is infinitely more effective. Here’s why:

1. Systems remove the need for “willpower”

The trouble with willpower is that it’s easy to lose steam. We burn out. John Tierney, coauthor of Willpower: Rediscovering the Greatest Human Strength, describes willpower as a finite resource that runs out just as easily as a fuel in your car tank. Systems, on the other hand, take control away from you. They force you onto a certain path so that you don’t have to use willpower. It sounds counterintuitive, but we’re more likely to be successful at something when we are willing to hand over control to a system.

2. Systems are much simpler to follow 

If you’re trying to lose weight, think about the barrage of information out there on weight management. Hundreds of articles and blogs give handy “tips” and nuggets of advice, but they’re often conflicting and confusing. A system, on the other hand, is based on rules. Step 1, 2, 3. Go to a personal trainer and he’ll tell you exactly what you need to eat, how to exercise, and all that jazz. You don’t have to think – all you need to do is stick to the system, and you’ll succeed.

3. Systems are smarter

Think about Scott Young’s system for accelerated learning. It’s a simple formula, but it’ll save you a lot of time and effort when it comes to studying. Think about how much easier it is to set up a GIRO standing instruction that automatically helps you to save every month, instead of putting in time and effort to “save harder”. Finding the right system can help you to do things a lot more efficiently and effectively than most people.

Viewing the world from a systems perspective

Systems are effective, more so than many of us realize. That’s the premise of this blog, as well as the upcoming book. So far, I’ve showed you how to use systems to improve your savings and investments, find the right types of insurance, and spend more efficiently on the things you love. The book will delve a little more deeply into the psychology of saving, spending and investing, and will describe more detail on the systems that will help you tackle your personal finances.

You start to see things differently once you look at life from a systems perspective. Large challenges suddenly don’t seem so daunting anymore, and possibilities start to open up.  Are there any problems that you’re currently stumped by, but could possibly be solved by applying a system? I’d love to hear from you, even if you haven’t found a solution yet. Leave a comment, or send me an email at cheerfulegg@gmail.com.

Cheers 🙂

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How to Hide Money Like a Criminal Mastermind

Let’s do a little role play. You are an international criminal mastermind, wanted by the authorities in 14 countries. Your crime ring has prospered, earning you an obscene amount of money. You could buy over a small country (or attend a Mitt Romney fundraiser) if you wanted to. You’ve also covered your tracks well. The police have got nothing on you, so they’re targeting the easiest piece of evidence they can find – your money.

Tipped off by your trusty financial advisor, you move your money in small parts to a secret bank account in the Cayman Islands. By the time the police crack open your “official” bank accounts, they can’t find anything to charge you with. So once again, you escape scott-free… and tax-free.

The awesomeness of tax-advantaged accounts

Death and taxes are the only 2 sure things in life (That, and the fact that you can never find your keys when you’re late for work on Monday morning).

You can’t escape the first, but you can totally lower the second… legally. You may not have a secret Cayman Islands bank account, but the governments of the world, in their benevolence, have offered the next best thing: tax-advantaged accounts.

I’ll talk about tax-advantaged accounts for Singaporeans, or people living in Singapore, in this post. Americans, you already have more than enough information out there on your tax-advantage accounts – Google it. (Hint: Sign up for a 401k and contribute enough to max out your employer match. You guys are so lucky).

Singaporeans – you have a little-known account called a Supplementary Retirement Scheme (SRS). The SRS is sort of like a beautiful exotic girl who’s been hidden on an island. She’s got a weird-sounding name, not many people have heard of her, but she’s got huge… benefits.

The photographer claims that the girl just *happened* to walk into the shot and he just *happened* to press the shutter. Honest!

Why the SRS is awesome

1. It gives you tax-benefits

Think of the SRS as your own secret tax-free bank account for you to stash a whole bunch of moolah in. Every dollar you contribute into that bank account reduces your taxable income by a dollar.

So if your tax rate is 7%, contributing $12,750 a year effectively saves you $892.50 in taxes every year. Ta-dahhhh, you just earned your next weekend getaway vacation! You’re welcome.

It’s purely voluntary, meaning that you can contribute any amount you like, up to a cap of $12,750 a year (Yeah, the government realizes how awesome this is too, so they’ve gotta put a limit on how much you can screw them over by not paying taxes).

 2. It boosts your investments

What are you gonna do with all that money you’ve put into it? Don’t be a kuku and just leave it sitting there (remember my post on Don’t Save For Retirement?). Instead, invest it – preferably in a couple of index-based ETFs – and let your money grow absolutely tax-free.

There’s also a hidden benefit to investing that cash. By not paying $893 in taxes, that means that you’ve earned a guaranteed 7% return on your $12,750 for that year (ie: if you invested that $12,750, your investment would have had to grow by approximately 7% just to match the tax savings).

If you can resist the temptation to withdraw your investments till you’re 62, you’ll only be taxed for 50% of the prevailing tax rate. That may seem annoying at first, but ask yourself:

Would you rather pay 1) a 10% tax on $100,000, or 2) a 5% tax on $1,600,000? (Hint: The answer is option 2).

Sure, option 2 entails you paying more in taxes, but it also means that you have ONE POINT FIVE MILLION DOLLARS to play with after tax. Paying more tax is a good thing – it means you’re richer. By not paying tax initially and deferring it till the end, you’re effectively allowing your whole amount of cash to work harder for you. 

3. It’s flexible on withdrawals

Unlike CPF, you’re allowed to withdraw your cash pretty much anytime you like.  It’s meant to be kept till you’re retired, but if you really need the cash before you’re 62 you’ll have to pay a 5% penalty and get taxed for 100% of the rate (The penalty is waived if it’s withdrawn in the event of death or medical cases). It’s annoying to have to pay those, but at least you still get access to it if you really need it for an emergency.

“What are we gonna do tonight, Brain?” “The same thing we do every night Pinky… Try to open a TAX-ADVANTAGED ACCOUNT!”

How to set up your own criminal mastermind account

1. Contact any one of the three local banks (DBS / OCBC / UOB) to set up an SRS account. If you already have another savings account with those banks, you probably won’t even need to visit the branch – just download the application form from their websites. If you’re Singaporean, all you need is a copy of your NRIC.

2. You won’t even need to make a claim in your annual tax return – it’ll be automatically done for you through your SRS operator. Yay to #FirstWorldAwesomeness 🙂

3. If you’re a foreigner living in Singapore, the contribution cap is different, but all of the above apply to you too. You’ll also have to submit an annual IRAS declaration form.

And finally…

Congratulations – you’ve now embarked on your journey towards being a world-class, financially-savvy criminal mastermind. So if you’ve got nothing to do tonight, maybe you can try to TAKE OVER THE WORLD!

Don’t Save For Retirement

It is close to midnight on December 29, 1972, and Eastern Air Lines Flight 401 is making its final approach to Miami International Airport. 163 passengers are onboard, most hoping to enjoy their new year in sunny Miami.

As it approaches the airport, the landing wheels are lowered and locked into position. At this point, the captain notices something amiss: the green light linked to the landing wheels has failed to light up. This could mean one of two things: Either the wheels have failed to lock into position, or the light is faulty. The pilots report the situation to Air Traffic Control, who orders the plane to circle back and try their descent again.

At this point, the pilot and co-pilot fixate on the light. They take it out of its fitting, blow on it to remove dust, and try to jam it back. Their conversation goes back and forth as they try to figure out what the fault is. They become so fixated on the light, that they fail to notice the 300-pound gorilla in their midst.

The gorilla, in this case, is the fact that their autopilot is disengaged and that they are rapidly losing altitude. They don’t notice that they are dropping rapidly because it is a moonless night and they can’t see the horizon. The altitude warning alarm rings through the cockpit and the altitude meter is dropping crazily, though neither pilot notices. They are too fixated on the light. Only when the aircraft is 7 seconds to impact, do the pilots realize that something is very wrong. They take evasive action, but it’s too late. The plane crashes, killing 101 people.

Crash investigators later found that the wheels had indeed locked into place – it was the light that was faulty. “The crash occurred due to the failure of a $12 piece of kit,” one journalist pointed out. However, the true cause of the crash was deeper than that – it was the pilots’ fixation on one particular problem, which blinded them from the true danger they were in.*

*story taken from Bounce by Matthew Syed

What other gorillas are you failing to see in your life?

Like the pilots who were overfocused on the green landing gear light, most people are fixated on one goal when it comes to personal finance: retirement. They believe that in order to retire, they need to hoard as much cash as possible, starting now. But they fail to realize the huge gorilla charging towards their bank accounts: inflation.

Two posts ago, I wrote about how inflation would slowly but surely destroy the buying power of your savings. If you’re young, letting your cash sit in your bank account (or in your fixed deposits / CPF / mattress) is like putting it in a nest of termites: it’ll eventually get eaten up.

So here’s my advice when it comes to inflation: Don’t save for retirement.

Say what?

Hear me out for a second. If you’re young and wild and free, there are other, more important things you should be focusing your attention on. Instead of saving up for “retirement” and getting a lot less bang for your buck, there are three more useful things you should be directing your money towards:

1.Save for assets

The best way to tackle the inflation gorilla is to put your money into assets that will grow faster than inflation: Stocks and real estate. Stocks are the most accessible because they don’t require a huge cash outlay, they’re easy to understand, and if you live in Singapore, they’re tax-free. Woot woot! Real estate is pretty nifty too, if you can afford the huge downpayment (or if you can’t afford the huge downpayment, you can also look into REITs – more on that later).

The biggest bonus of all is that if you plough your cash into assets that exceed inflation, you will, in fact, be prepping yourself for retirement.

2. Save for life chapters

Here, I’m talking about big, life chapters that you were planning on spending on regardless of what happens. I’m talking about your wedding, your first house, and your daughter’s upcoming college fees. If any of these are going to be happening within the next 10 years, then you should be saving up for them. Don’t act as if you didn’t know they were coming: If you know you’ll be getting married in 3 years, you should be saving up for your hypothetical $30,000 banquet and $15,000 ring… now.

A caveat: I’m not talking about cars, or vacations, or that new washing machine, that you “know” you’re going to spend on anyway. I’m talking about the big, necessary, life chapters here, people.

3. Save for emergencies

Sh*t happens. You’ll need cash to deal with it. If something bad happens, (like losing your job) the last thing you want is to be dipping into your investments to pay for your meals. If you don’t have an emergency fund of 3 months of income parked in an easily accessible bank account, then you should totally start saving up for one now.

In short…

Don’t bother saving for retirement – inflation will render your efforts futile. Other than cash set aside for emergencies and stuff you’re going to spend on within the next 10 years, everything else should be directed towards assets – Assets that keep pace with inflation. If an insurance agent / banker tries to sell you a fancy schmancy 50-year savings plan, run as fast as you can.

Don’t get too fixated on the wrong things. Just because personal finance “experts” tell you that you should be saving for retirement, doesn’t mean that you should be blindly stuffing cash into a bank account. Keep an eye out for the inflation gorilla in your midst, and take action to deal with it.

PS: the topic for this post came from a friend who replied to my previous post on spending money. To everyone reading this, keep the comments coming! They totally give me the inspiration for future blog posts.

As a young person, what do you think about the 3 ways you should be putting your money towards, instead of saving for retirement? Leave a comment, or drop me an email at cheerfulegg@gmail.com. Hope to hear from you soon 🙂

Starting to Save…. Tomorrow

Heya! Sorry for being gone for so long – work has been absolutely crazy lately. (But in case any of my employers are reading this, I love my company. Hugs and kisses, xoxo). Just spent the last two days on leave (or “time-off” as they say in the US of A), sitting at home… and crunching numbers for work. Yeah, you know I’m baller like that.

Anyways, that’s why I’m hoping you’d forgive me for blogging my Ted Thursday post on Saturday. Today’s Ted talk comes from Shlomo Benartzi, entitled Saving for Tomorrow, Tomorrow. I loved it because it pretty much espouses everything that I’ve blogged about on saving so far. (I also love his accent – still trying to figure out where the hell he’s from).

Here, he points out three problems we face in behavioral finance, and then gives you a simple solution that will solve all of them – the same one I’ve been preaching for the past 3 months. Yes, I know, all the ladies say I should totally be on TED. Anyways, in summary:

1. Present bias: We know we should be saving, but we don’t do it today. We’ll make all these resolutions that we’re gonna save more next year, next month, next week, whatever, but it never works. It’s always a lot more fun to spend more today, and put off what we know is good for tomorrow.

Quote at 6:47 of the video: “Self-control is not a problem in the future. It’s only a problem now when the chocolate is next to us.” 

2. Inertia: People are lazy. And don’t even think that you’re different from the rest of us, because you’re not. Even checking a box on a form, is way too much effort for most people, even if it means saving someone’s life. Germany has an opt-in program for organ donation where you would have to check a box if you would like to donate your organs. Contrast it to Austria, which has an opt-out program, where you would check a box if you don’t want to donate your organs. The result? 12% of Germans take up the program, while a whopping 99% of Austrians agree to donate their organs.

3. Loss aversion: We hate losing stuff. When it comes to savings, people amazingly frame this as a loss because they have to cut their spending today.

So where does that leave us? The trick to overcoming all of these problems is to (surprise, surprise) adopt an automated system that saves on a regular basis, and whenever you have any income increases. Since saving more tomorrow is easier than saving today (present bias), we first make the commitment to save a certain percentage of our income… tomorrow. Or next month. Whatever. We then commit to it by setting it up with our bank.

Once it’s set up, that overcomes our problem of inertia, because it takes a helluva lot of effort to cancel that commitment. So we’ll automatically be saving without any effort at all. And finally, by committing to save a fixed percentage of our pay rises, you’ll be taking care of loss-aversion by allowing yourself the luxury to spend part of your pay rise, while saving the other part of it.

In fact, if you’re way ahead of the game, Imma challenge you to save a higher percentage every time your income rises. Say you start off with an income of $3,000 and you save 10% ($300), leaving you $2,700 to spend. When your income rises to $3,500, up the ante to 15% ($525). You’ll still have $2,975 left over to spend, which is more than what you were spending on your original income anyway.

Random: There’s also a shoutout to Singapore at 16:47 of the video – apparently we hold the record for lottery ticket purchases. According to Benartzi, the average household in the world spends $1,000 a year on lottery tickets, while the average household in Singapore spends $4,000 a year on lottery tickets. WTF?! Seriously, what is going on here? Buying the occasional ticket is fine (and it’s helluva fun to trash talk in the office about handing in our resignation once we win our $10 million dollars), but throwing away $4,000 a year is just stupid. Fellow countrymen, try saving it instead 🙂

How to Automate Your Finances

I don’t know about you, but I hate dealing with the stupid administrative things in life. You know what I’m talking about: Like topping up your EZ-Link card (for non-Singaporeans – it’s this card Singaporeans use to ride the subway / bus), paying off your bills, insurance premiums, etc etc etc. Seriously, nobody gets up in the morning and goes “Oh yay! I’m totally gonna pay my phone bill today! Woot woot!”

Why personal administration sucks ass

Each individual task doesn’t really take up that much time and effort, but add them together and it’s a helluva pain in the ass. Think about it – say you receive your credit card bill on Monday, and you want to pay it off at the AXS kiosk on Tuesday, but the line is way too long so you put it off till Wednesday, and then you realize that you have to top up your EZ-Link card, which you do, making you late for work anyway. And on Wednesday night you receive your phone bill, so now you have to remember to pay that off, but after paying off your credit card bill you get really busy so you forget about the phone bill, so the phone company sends you a reminder letter to pay last month’s bill…

Add insurance premiums, magazine subscriptions, gym memberships, charity donations, investment contributions, savings contributions…. and you get a freakin’ pain in the ass. What’s even worse – forgetting to pay off last month’s balance on your credit card will cause your credit card company to charge you interest. They could also lower your credit score and either make it harder for you to get a loan or increase the interest on your mortgage, potentially costing you thousands of dollars over your lifetime. Not fun.

Relying on “willpower” to remember to do all these annoying administrative tasks just doesn’t work. Your life is only going to get busier. Besides, having all these items on your to-do list just breaks your flow – you may be working on an important career-changing presentation, or starting up a side business, or raising a family – you don’t wanna have to deal with crap that just distracts you from the really important things in life.

Automating your admin

The key to this is to create a system – a system that automatically takes care of actually doing all this stuff for you, yet allows for you to go in and check that you aren’t making any regular contributions to the Nigerian royal family. And you can set it up in a couple of hours. If you’re Singaporean, here’s how to automate your:

Bills: Set up a GIRO arrangement for your credit card and phone bills. Once it’s set up, the system goes into your bank account once a month and then pays off your bills in full, which means that you never have to worry about late payments. All you have to do is make sure that you’ve got enough money in your bank account (I personally keep about a month’s salary in my account, which provides enough buffer for any potentially huge credit card bills).

Now, I don’t know why, but people get really nervous whenever I recommend setting up GIRO for their accounts. They’re incredibly frightened that some random dude is going to clone your credit card and charge like $5000 bucks on hookers or something.  Let me assure you: this will not happen to you if you check yo’ statement every month! Honestly, it’s not as hard as it sounds. Every month, I get a paper statement about 2 weeks before my bill is due (If you prefer, you can also arrange for an SMS/email notification from most companies, which will also link you to your online statement). I’ll glance through the statement and make sure there’s no entry with the word “HOOKERS” and a charge for $5,000 on it. If everything’s fine, I don’t have to do anything further, and my system automatically pays off my bill for me.

If there is a weird expense that you didn’t incur, then you have 2 weeks to report it to your credit card/phone company. Well-known secret: your credit card company is even more nervous than you are when it comes to these potentially fraudulent charges. Once you call them up and notify them, they’ll reimburse you and launch a full-ass investigation, just to get their money back. There are some credit card companies that are so nervous, that even if you use the credit card overseas, they’ll jump in and cancel the card right away unless you notify them beforehand that you’re going to be using your card abroad. So I’m pretty sure that even if some scammer did try to buy drugs with a clone of my card, it’ll be taken care of as long as I check my monthly statement. Besides, how often has that happened to you anyway?

This system works the same way for any other recurring expenses you might have: insurance premiums, magazine subscriptions, gym memberships, etc. In fact, most companies would LOVE to offer you the option of automatic payments, because that means that they never have to chase you for payments. And while you should review this list regularly to make sure that you’re not paying for things that you don’t need, this system automatically takes care of all the admin for any necessary expenses.

EZ-Link cards: Set up automatic top-ups with EZ-Reload every time your card value goes below zero. This can be done through GIRO or through your credit card, and EZ-Link charges like $0.25 for each top-up. My card gets automatically topped up twice a month, incurring me a grand total of $0.50 for the convenience. And believe me, $0.50 a month is a freakin’ negligible amount to pay for never having to glance at your balance, never having to line up at those infernal top-up machines, and automatically tracking your transport expenses through your credit card bill.

Savings and Investment: I’ve blogged at length about how you can set up automatic savings to both your guilt-free spending account (for holidays, weddings, etc) and your long-term savings account. But you can also automate your investments: First, decide how much of your salary you would like to invest. Next, arrange to automatically transfer that amount to your investment account every month. This can be set up through internet banking within a couple of minutes.

Your investment account works in 2 ways: it can either invest directly in unit trusts (mutual funds if you’re American) or index funds, or it can accumulate a certain amount before you go in a couple of times a year to invest the funds in various ETFs (more details on that in another post!) Either way, the result is clear: you will be regularly investing a portion of your salary, without fail, with no effort on your part whatsoever.

Putting it all together

All this can be a little overwhelming, so I’ll give an example from how I automate my own finances. I get paid on the 21st of every month, when my salary gets credited into my POSB current account. On the 22nd, my system goes in and deposits a portion of my salary into my long-term savings account, another portion into my investment account, and a third portion into my guilt-free spending account (this is one example of the “Pay Yourself First” principle). A week later, my credit card and phone statement arrives and I check it to make sure there are no fraudulent charges. If everything’s fine, my bills get automatically paid off around the 10th of the following month. All this while, I’ll be enjoying Singapore’s mega awesome public transportation system, with my system watching my EZ-Link balance for me and taking care of the top-ups whenever they are needed.

Notice that everything here is beautifully automatic. My involvement is limited to simply checking my statements to make sure nothing’s amiss, which literally takes up 5 minutes a month – probably faster than how long it takes for most people to pay their bills at the good ol’ AXS machine. With all the annoying administrative crap out of the way, you can actually focus on the good and important things in life – like being awesome.

Credit: I got this idea from Ramit Sethi, the author of I Will Teach You To Be Rich. Check out his post for a great overview and more details on automating your finances.

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 🙂