3 Biggest Financial Regrets of Retirees in Singapore
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And How to Avoid Them!
Every person has regrets, and as one gets older, it is inevitable that one would start regretting certain things. And when it comes to finances, what exactly do our seniors quip about? What decisions did they make that they regret the most? And most importantly, what crucial advice would they give to those looking to retire comfortably in the future?
REGRET #1: NOT SAVING MONEY WHEN YOUNGThis is one of the most common regrets that is universal to all seniors across the world, with older folk lamenting that they should have saved when they were younger. In fact, saving $10,000 in your twenties adds up a lot more than saving in your 40’s or 50’s. Compounding works to your favour the earlier you start. Expenses also start to rack up as you age, therefore it is much harder to save when you are older.
Property, health spending, and raising a family take up most of your money, and saving money gets a lot harder when the children are begging for you to get the latest mobile device for their birthdays.
Gambling and entertainment eats away at your nest egg, so stay clear of them! It’s never too late to start getting your money habits sorted out.
REGRET #2: NOT INVESTING TIME WELL
Back in the 1980’s, investing was a lot harder to learn without the internet. Now, it is an excuse to say that it is difficult to be financially educated. With kids these days being able to build a website from scratch (without supervision), I’m sure you will be able to find something to do that will bring you dividends in the long-run.
Most people complain about not knowing what to invest in. That is a reasonable complaint, but…
Time is sacred; use it wisely, and use it on what matters.
If your financial vocabulary includes any of the following:
- buying blue-chip stocks for the long-term
- mutual fund investments
- investment-linked insurance policies
…you are missing out on a large chunk of the pie. A good diversified portfolio includes much more than just stocks. In fact, holding just stocks can be very risky, as seen during the 2008 financial crisis where most blue-chip stocks plunged by 60-80%.
Multi-asset class, multi-instrument investing is the norm now. If you’re not involved, it’s time to get started.
Another common misconception is that learning how to trade or invest is very time-consuming, but that is actually not true. Like any skill, it might take a while to learn it at first, but after a few weeks, you will soon get the hang of it and it will only require a few minutes a day to manage your finances and investments.
REGRET #3: SPENDING TOO MUCH ON THE CHILDRENMany parents will look back on their days as young parents and quip that they should have spent less. Some of the bad outcomes include spoilt children, children who expect a lot but don’t contribute, and many more.
Among the many unnecessary expenses, parents could do well to reduce spending in any of these areas:
- Extra-curricular lessons, like ballet, music, swimming (especially if the child is not enjoying them!)
- Tuition lessons (the school system in Singapore is honestly quite robust)
- Expensive pre-school education (they won’t remember what happened anyway)
- Expensive holidays (we don’t remember them 1 year from now)
- Toys that are thrown away 3 months later (we prefer iPads, honestly)
- Expensive food at fancy restaurants (food, is still food)
- Overseas university education (a local degree can be equally profitable for your child)
- Expensive child-care services (reasonably priced ones will do the same)
- A domestic helper / maid (teaching the kids to take care of the house makes more sense)
We sometimes put too much of a premium on university education. Pay what is fair and reasonable; don’t go about spending half a million on a university degree.
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4 Ways to Deal With Financial Regret
BY CHRIS HOGAN
4 MINUTE READ
For me, a Ford Expedition is the ultimate picture of regret. When I was young, I just had to have one. I was young and I was successful, so why not? I did what everybody else does (the first clue that I was making a BIG mistake), and I took on a $600 car payment. Ouch.
Let me tell you what those five years of $600 payments cost me. If I’d invested that money in my 20s instead of paying the bank, I’d have more than $1 million extra sitting in my retirement account in my 60s. That "must have" vehicle cost me a million dollars. One SUV. One million dollars. I still twitch a little when I see an Expedition.
Maybe your picture of regret looks a little different. It may be that closet of high-end clothes you rarely wear or the 75-inch Ultra HD 4K TV in the family room. Everybody has regrets, especially when it comes to finances. But not everybody deals with regret in the right way. You could let that mistake weigh you down or you could learn from it and move on. Here are a few ways to deal with those mistakes.
1. Own It!
Don’t blame somebody else. Don’t point the finger at your life situation or your spouse or a great marketing ploy. You made a mistake with your money. Period. And guess what? That’s okay—as long as you learn from that mistake. Refusing to take responsibility leaves you open to repeat your mistake. And that’s not okay!
2. Forgive Yourself
I get it—forgiving others is a whole lot easier than forgiving yourself. But staying angry at yourself doesn’t get you any closer to your retirement dreams. It just keeps you discouraged. And when you’re down, you’re more likely to make mistakes’including money mistakes. It can be a dangerous downward spiral. Just don’t go there! Your past doesn’t determine your future unless you let it, so move on.
Let the mistakes you made serve a greater purpose. What can they teach you? Use the lessons you learn to create new goals in your life. Your past mistakes can be the inspiration you need to get serious and make a plan.
3. Let it Motivate You
Regret is a useless emotion unless you respond to it with action and a willingness to change. What are you going to do to make sure it doesn’t happen again? When regret rears its ugly head, use that feeling to kick your retirement planning into high gear. Recommit yourself to getting out of debt. Increase how much you put away each month. Alter your vacation plans so you can catch up on your retirement savings.
4. Tell Your Story
Mama Hogan taught me lots of life lessons. I plan to do the same with my boys. When it’s time, I’ll tell them my Expedition story. I want them to build on my victories and learn from my failures. You can tell your story too. I know that’s a little scary, but God can use you to influence others. And wouldn’t it feel great to know you kept somebody from making the same mistake?
Think about regret like the rearview mirror in your car. Check it every once in a while to remind you to make better financial decisions. But remember why the rearview mirror is so small compared to the windshield—you drive by looking forward, not backward! See that big windshield as a symbol of hope for what lies ahead. And hope is what you need to keep driving toward your retirement dream!