Money, Life, and Staying the Course
A practical framework for financial peace—without chasing fads
With the recent market volatility finally beginning to calm, it's a good time to reflect on what sound financial planning truly means. At its core, financial planning is the art of prioritizing: meeting our needs, enabling our wants, and perhaps—if we’re lucky—fulfilling our desires, in that order.
In my last post, I argued that the real purpose of investing isn’t to chase the highest return, or to follow fads, or even to match what your neighbours are doing. It’s simpler than that: it’s about ensuring that the purchasing power you defer from today to tomorrow grows reasonably above inflation.
When I look at my own needs, they boil down to this:
A roof over our heads
A comfortable pre-retirement life, including child-related expenses
Protection against high-risk, unexpected events
A retirement corpus that ensures peace of mind
Once these are covered, my wants follow. More comfort, maybe better travel, maybe an upgrade here and there. But I’ve learned that once your money is doing what it needs to do—supporting your life, not dictating it—you don’t need to chase yield, CAGR, or the next big thing. You just need to stay the course.
Why this reflection now? Because moments of volatility are when your convictions are tested. If you’ve got a plan, and it’s working, you don’t need to panic. You just need to remember why you made it.
Like Morgan Housel in The Psychology of Money, Chapter 19 (“Confessions”), I want to share how I approach financial planning—not as advice, but as a reflection you might find useful.
1. A Roof Over Our Heads
Our housing journey has seen its share of mistakes. Early on, we stretched ourselves too thin, assuming income would keep rising. It didn’t go to plan. We paid the price in stress and strained finances, and it took us years to dig ourselves out.
For the next decade, we did the opposite—rented modestly and owned nothing. In 2019, we stepped back into the market and bought a small, affordable home. We’ve paid off about 30% of the mortgage, and thanks to a bit of property appreciation, the loan now stands at under 60% of the home’s value. The monthly payment is just around 30% of our post-tax income.
Do we aspire to something grander? Sure. But we’re not going to repeat past mistakes just to chase it. We spent early 2024 house-hunting, only to realise that upgrading meant going back to those stress levels. So, we walked away. That time will come. For now, we’re content.
2. Pre-Retirement Life
We earn well now, but that wasn’t always the case. My wife and I come from humble beginnings and have made plenty of money mistakes along the way. The goal now is to avoid repeating them.
We try to live below our means. Sometimes we overspend—usually on holidays—but we balance it out over the medium term. I try to spot patterns in wasteful spending and cut them out without micromanaging every expense.
When we make big decisions—like where our daughter goes to school—money is a factor, but not the only one. She got into a good private school, but we chose a state school. It was a joint family decision, and we’re happy with it.
3. Planning for Risky Events
Unforeseen events are often the biggest threats to financial stability. They’ve hit us before, as I’m sure they’ve hit others. That’s why we prepare for the “long tail” events—those low-probability, high-impact situations.
In Singapore, I paid out of pocket for healthcare insurance despite having employer paid health insurance even though many considered it wasteful. Why? Because employer coverage wouldn’t help if I lost my job and had a medical emergency simultaneously. In the UK, the NHS offers peace of mind, but the principle remains: identify your unique risks and cover for them.
4. Retirement Planning
Because we’ve managed (1) (2) and (3), we don’t have to chase short-term returns. That’s an undervalued freedom.
Our savings rate has varied: 10% of pre-tax income in some years, up to 50% in a few good years. For the past few years, it hovers around 20–25%. We use pre-tax income here because we maximise our pension contributions—taking advantage of tax benefits without stretching post-tax budgets to get to our investment targets. This strategy works for us now that we’re both in our 40s. If you’re younger, the equation might be different.
5. Investment Choices
Once you’ve handled your needs, your investments only have one job: beat inflation, in line with your goals. That’s it.
Some people get there through gold, land, bonds, stocks, or businesses. There’s no one-size-fits-all.
Personally, I favour equities. Even plain index investing can meet my financial needs. All the alpha-chasing and Coffee Can Portfolio stuff? For me, that’s intellectual curiosity, not necessity.
If I didn’t have this level of clarity, I might be panicking or resigning, instead I am looking at opportunities like Harley Davidson (NYSE:HOG), and a few others, with a calm mind while the market is likely mis-pricing a few things. Don’t get me wrong, risk management is still paramount - even if I am entirely wrong on Harley Davidson, it won’t change my financial plans by much.
Final Thoughts
This all sounds simple, but it’s not easy. But if you’re reading this, chances are you’re already doing a lot of the right things. If so, stay the course. Don’t get spooked by market noise.
And if something’s missing—if you’re unsure—get help. Make a plan. Work towards it. Don’t let uncertainty paralyse you.
What’s your plan? What gives you peace of mind? I’d love to hear how you approach it.
Disclaimer: I am not your financial advisor and bear no fiduciary responsibility. This post is only for educational and entertainment purposes. Do your own due diligence before investing in any securities. I may hold or enter into, a position in any of the stocks mentioned above. The above is NOT a solicitation to either buy or sell the securities listed in this post.