Reaction to Everyday Finance Situations

I recently saw a Netflix series¹ that tackles various topics and situations in personal finance.

Along the way, the host meets people of different backgrounds and gives them an action plan depending on their situation and goals. This then gives the viewer a perspective on how to handle their finances and how it affects their day-to-day lives.

That’s why, in this article, I decided to share my take on some of these key issues and concepts. Everything from the series is formatted in bold, and then my comments are written in normal text. And I hope that by discussing this, you also discover a path for you to live your “Rich Life” or as I’d prefer to call it, a “Blessed Life”.

On Money Psychology

As each of us was brought up differently, we all have our own ways of handling (or not handling) our money. And unless we do something about it, this is a big factor in whether we can achieve a rich life or not.

Here are some quotes from the show that I found to be good to elaborate further on.

“You're never gonna be happy about money unless you change the way you think about it.”

Contrary to the saying that “money can’t buy happiness”, for me, money can buy some happiness but not all of it. “Some” because we just indirectly buy it.

A simple example would be a father who is about to excitedly go home from work. He can use his money to take a cab instead of the train to save time and energy from the long commute on public transport. When he comes home, he can then use his energy and time to bond with his wife and children, which makes him happy and recharged. Now if the father is of the mindset to “save, save, save”, but forgets about the energy and time cost to him and his family, then the way he is thinking about money is hindering him from achieving his priorities and his happiness. It doesn’t mean he needs to take a cab every day, but he should be able to when needed.

With that said, we should identify our priorities and know how we can improve our lifestyle, as long as it’s sustainable in the long run. If this is how we look at things, I believe that it can definitely change us and how we deal with money. Instead of focusing on expenses being expenses, let’s focus on what this ‘expense’ has given us.

“Money psychology is really hard to change, and I've learned you have to have a reason to change the way you treat money.”

While we have our own beliefs about money, it all boils down to how we want to change it. Or even if we want to, changing beliefs is easier said than done, as most of our beliefs have been deeply ingrained into us as we grow up.

A great example would be my mom, who doesn’t want to spend even if she already has the money. The reason is that growing up, it was difficult for them to build wealth. As the first generation of savers and investors, everything they did came from hard work; that’s why she really doesn’t like to spend!

So instead of letting her not experience or not have the things she wants, I just buy it for her and don’t tell her how much it cost. (haha!)

Another example would be people who migrated to other countries and got a higher income. Sometimes, they end up spending more on things and experiences because of a scarcity mindset. They have this fear that if they don’t avail it now, it might be gone later on. But in my opinion, we should strive to have an abundance mindset. I always believe that there are a lot of opportunities out there that we can each take advantage of. Although it’s great to build a conscious and guilt-free spending plan, it also means this plan needs to be sustainable.

“You can't get a rich life without taking control of your money.”

This is of paramount importance for financial success. We must take ownership of how we handle our money. Identifying our needs and wants is the first step to having a disciplined and organized approach to saving and investing.

To help with this, it’s important to have a conscious spending plan so we know that our money goes to the things that matter to us. This also greatly applies to those who spend more than they earn. It’s easy to go out of budget when you’re just mindlessly spending. And this can hugely impact your savings, investments, etc.

We should all aim for guilt-free spending within a reasonable budget that is sustainable by identifying exactly where we’ll spend our money. We need to live the life that we want so we can wake up every day with a fulfilled life.

“My philosophy is to spend extravagantly on the things you love but cut costs mercilessly on the things you don’t.”

As mentioned, it’s important to identify the things that really matter to us. And we can eliminate the things that do not contribute towards the big picture. This will help us create a very focused strategy and will allow us to allocate our time, money, and effort to things that make a difference in our lives.

In my case, I remember how I always wanted to generate multiple streams of income, so I tried a lot of different businesses. I even ventured to have a juice stall in the Philippines while I was here in Singapore.

After a few years, I noticed how it took a lot of my time. The same goes for trading in the stock market. Initially, I was attracted to this kind of thing because of the money part. I was so focused on earning in the short term—one week, two weeks, and so on.

But I realized that it’s not my core competency to be a short-term trader, and I’d rather focus on being a longer-term investor as well as providing financial advisory services to my clients, which is of much higher value and gives me the fulfillment of helping other people.

Longer-term investing does not mean we will not take profits in the short to mid-term; if we exceed our expected returns, we will also take profits and balance our portfolio. In any case, when I started to focus on this, my advisory business grew by leaps and bounds, and that’s why I’m consistently being recognized as a top advisor.

So I’m definitely a believer in focusing on what really matters most to you and cutting back on the rest.

Now that we’ve covered some of the key ideas in the show, I’d like to share more about the guests, who consist of either individuals or couples who have their own issues when it comes to money.

Because of their different backgrounds, I believe there’s a lot to be learned from them. So in the next section, I’ll share specific situations from the series and my thoughts on it.

Financial Situations and What to Do About It

Situation: Husband and wife, Matt and Amani, have misunderstandings because of their finances. Amani is the one working and in control of the budget. Matt, who used to work but is now a full-time dad, felt insignificant.

Whenever couples argue about money, it almost always comes from a lack of understanding of each other.

In this case, the husband wants to feel his self-worth, while the wife feels burdened by providing for the family. Until each person is willing to go ‘beyond’ their individual pain and understand the other, it will be difficult to progress on their financial goals.

Once they achieve understanding, creating both individual and shared goals is the next task. This creates a common ground that can anchor a couple together.

Situation: Another couple named Monique and Donald both earn but struggle to manage their finances. Donald likes to spend on various things, while Monique likes to reward herself every now and then. They aim to have their own house, but they still have a lot of debt. They feel like money is a taboo subject, so they don’t talk much about it.

Not talking about money with your partner will just create more problems. The first thing to do is to be transparent and honest. I think in many cases, both parties want to talk about money but are just afraid of doing so. Or sometimes they lack the vocabulary on how to discuss it.

This is one of the advantages of working with a financial coach because they can provide a guide or a framework for starting financial discussions.

Now, as for the couple here with different spending styles and both working, I recommend that each of them have their own separate money. We don’t want the other person to feel like they have no freedom with the income they make. Of course, this should still be part of the conscious spending plan they’ll make together as a couple. In some cases, it may make sense to contribute to a joint account for shared goals.

Situation: Christian and Millie are a couple with the goal of having Christian’s Mom retire. The mom has been working ever since they migrated to the US. Numbers-wise, they are still not capable of supporting the mom at the moment. And this kind of situation—taking care of family and elders—is very common in Asian culture.

As the saying goes, “You can’t pour from an empty cup.” And much like with flight safety reminders, it always says that in an emergency, you should put on your emergency mask first before helping others.

The same thing goes in finance, anyone who wants to take care of others should take care of themselves first. But again, this is easier said than done, especially when involving family.

My approach here is to start by identifying the minimum amount you can give to help those who are depending on you. And focus the rest of your excess on yourself. For your emergency fund, for your career development, and for your personal goals!

Now, if at the end of the year you have extra and they still need support, then that’s the time you give. This approach is much more practical than give, give, give early on, then you’ll have nothing left for yourself at the end.

Sometimes this approach may even lead to resentment and future arguments about money, simply because you didn’t prioritize yourself first.

Situation: A couple, Reggie and Sara, are opposites when it comes to money. Reggie is being logical about it and always aims to save for the future. Meanwhile, Sara is all about enjoying the present.

This kind of situation goes back to the conscious spending plan. They should have an agreement on how much they can spend. The amount should make sense for each of them. Meanwhile, they can use financial vehicles that will help them secure their future.

Situation: Drew, one of the guests, doesn’t talk about his finances and even hides things about it from his partner. He even thought that he might not be "fixable" with how things are going for him as he is living paycheck to paycheck. While his partner has a higher income, he does not want to just depend on him when they get married.

The more you hide it, the more it becomes a bigger problem later on. This is applicable not just to money but to everything! Being transparent with one another is one of the foundations of a healthy relationship.

So Drew, in this case, has to be able to ‘trust’ his partner to understand, while the best that Drew’s partner can do is understand and listen to him better. It is clear that Drew is feeling a mixture of wanting to do better combined with some ‘shame’, which is why he’s hiding things.

The great thing about opening up with regard to personal finances is that when couples really take the time to understand how each other is feeling, it becomes easier to talk about it. And as a result, the teamwork needed to work on solutions toward one’s goals also becomes much easier and faster!

Situation: Frank, another guest, doesn’t want to pay his student loans. He grew up without a lot and faced financial problems before. So now that he’s earning more, he feels like it’s better to save money instead of allocating any amount to pay off his loans.

When it comes to loans, I always look at the numbers directly.

Having a student loan will affect any future loans you want to avail of, like housing and a car. The easiest way to go about this if you have multiple loans is to use the debt snowball plan, wherein you pay the smallest debts first. Also, keep in mind that money should work for you, not the other way around.

Situation: The host told Drew that he has to start investing every single month, even if he still has his debts. He said that this is where real wealth is created.

If the host is trying to build Drew’s habit of investing, then I would agree. But for me, this would mainly depend on the type of debt a person has. The only loans I’ll consider not paying off first before you invest are those assets (with loans) that have low volatility and can possibly generate an income, like properties and annuities. We should leverage loans, but make sure to manage it responsibly.

The size of the assets with loans has to be at a reasonable allocation. For example, I typically limit the size of property holdings to 30% to 40% of net worth due to its illiquid nature and the fact that it is usually unrealizable wealth if it’s for own-stay. This is a typical guideline for my clients. If they really like property, maybe they can add another 10% allocation, but anything in excess of that will run a potential liquidity and concentration risk.

Now that we have some guidance on how to handle money given the situation, the host asked his guests, “What is your rich life?”

But let me change it into this because “Rich Life” sounds materialistic. Instead, I’d like to ask…

What is Your Blessed Life?

If you ask me, of course, I’m grateful for where I am now and what I can do for others. I aim to have a life where I don't have to worry about money. I can travel and take care of myself, my family, and my parents. I want to continuously provide for them.

Another goal will be to have a self-sustainable portfolio that generates a recurring yield to give academic and financial scholarships to deserving college students who can make a positive impact on society. I know there are a lot of students who have potential but just don’t receive the opportunities that would propel them to achieve more in life and in service to others.

And last but not least, I want to achieve financial abundance so I can guide more people to achieve financial freedom or financial abundance themselves. I want my clients to become dollar millionaires so they can attain the financial freedom to do what they want. They can have a meaningful journey in this world and build a stronger, more meaningful relationship with the people around them. Ultimately, they can be good stewards of the lives entrusted to them and the wealth they accumulate for generations to come.

Now it’s your turn, What is Your Blessed Life?

And that’s it! I hope you enjoyed reading it and learned from the different quotes and situations tackled in this article.

If you’re looking for additional help growing your finances, remember that I’m here in your corner. You can schedule a financial strategy session here where I’ll help maximize your wealth potential.

¹How to Get Rich