Christopher How’s early retirement journey began with simply tracking his spending.
How, a Singaporean, was 30 when he encountered a popular personal finance blog called Mr. Money Mustache. The blog introduced him to the idea of a life beyond a 9-to-5 job.
“The original goal was just tracking my finances, knowing where my money is going,” How told Business Insider.
Around two years into monitoring his expenses, the marketing professional decided he wanted to retire by 50.
With that goal in mind, he started a blog to find like-minded people and create a tool for himself.
“I’m the kind person that if I write it down, then I’m accountable for it, or if I tell my friends, I’m accountable for it,” he said.
Finding a why
How, now 41, said his biggest motivation to retire early was that he did not want his identity tied to his work.
“A job is not everything to me,” he said. “It’s just how early I could get out of the rat race that made me want to try this out,” he said about starting his Financial Independence Retire Early, or FIRE, journey.
How said he came from a humble Singaporean family and grew up with an understanding of what financial hardship looks like.
“Towards my final year of my diploma, I stopped taking pocket money. Even the remainder of my course fees was on my own, just taking up part-time work,” he said. “I grew up learning the importance of at least saving money.”
“The motivation has mostly been for the money than anything else,” he said about his reason for working.
Investing strategy
After How began tracking his spending, he gave himself a savings goal. He targeted saving between 60% and 70% of his salary.
He invested most of his savings into low-cost exchange-traded funds and avoided investment-linked insurance policies, which he thinks are a poor financial decision.
Like a growing number of people in the FIRE community, How did not have a dollar amount he wanted to retire with.
Instead, he created different investment portfolios for varying needs. He set up automatic transactions to transfer his salary to the accounts at the beginning of the month.
Here are some of his accounts:
- Central Provident Fund account: How maximized his CPF account, a mandatory social security scheme. It’s the equivalent of Americans’ 401(k) retirement accounts. 20% of salary of all Singapore residents is automatically deducted into this account.
How distributes the rest of his salary this way:
- 80%: retirement expenses: This portfolio will fund his day-to-day expenses.
- 13%: insurance expenses. This money will only go toward paying How’s insurance premiums after retirement.
- 6%: family emergency account. How lives with and supports his mother, so he set aside money for any family emergencies.
Breaking it down by purpose also helps him decide his risk appetite for each portfolio.
“Paying for insurance when I am 70, for example, is a really long time,” he said. “It’s due 30 years down the road — I can take an extremely long risk.”
Retirement expenses, on the other hand, will kick in when he turns 50.
“I know that I’ve only got 10 years and I will take lesser risk,” he said.
Experimenting with retirement
After working for about 17 years, How is currently on a career break for a year to explore what he wants to do during retirement.
“It became more like an experiment, like a mini retirement of sorts,” he said. “I’m no longer getting a fixed income — I’m spending down on my savings or investments.”
How wanted to see how he would react to seeing the amount in his bank account reduce for the first time.
“I had to work out: How do I tell myself both emotionally and also financially that it’s okay to spend this amount?” he said.
Two months into his mini-retirement, which began in December, How started reflecting on what he really needs. He cut back on the lifestyle inflation that had crept up in the last 10 years.
“I gave up an expensive gym subscription,” he said. “During a career break, you have more time, so I started cooking a lot more at home than eating out.”
From the third month on, he began prioritizing what he wanted to do with his time.
How said that he still goes to sleep at midnight and gets up at 8 a.m., then fills the first half of the day with a morning walk, listening to podcasts, and reading books, which he hasn’t had the time to do in years.
He likes to keep the second half of the day free to write a new blog article, meet with friends or family or work on side hustles, like digital or data annotation projects.
Singles tax in Singapore
How said that he disagrees with the idea that achieving early retirement is easier for singles like him, because married couples and parents benefit from several financial advantages in Singapore.
As a single person, How does not get a substantial government subsidy to buy an apartment in Singapore, for which only married couples are eligible.
A married couple could buy a subsidized apartment, stay for five years, flip it, and make a significant profit from this process, How said.
Parents also get a bigger tax break than other working adults in Singapore.
How added that his household of two, which includes him and his mother, do not benefit from any bulk purchases on groceries, which are one of their bigger expenses, nor from combining incomes with a working partner.
“I think different people with different circumstances have different advantages and disadvantages that they can work with,” he said.
Are you part of the FIRE community in Asia? If you’ve got a story to share, get in touch with this reporter: shubhangigoel@businessinsider.com
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