SINGAPORE: Colin Lau did something unexpected when he lost his job at age 35. He bought a flat with his savings.
With that purchase he retired young, not because he got rich but because he was prepared to have a flat, and not a job, that would pay him.
A conversation with his property agent — who asked how he intended to pay, say, a 30-year mortgage without work — set his mind on buying “the cheapest flat you can find in Singapore that you can afford to pay in full”.
“If you borrow money from the bank, the 30-year mortgage would mean that you buy a flat for yourself, and you buy a flat and give it as a free gift to the bank,” he said.
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Lau expanding on the thinking behind his move.
Lau turned his flat into income by renting out a spare room, which allowed him to recover the cost of the property. He also reduced his cost of living to a minimum.
His monthly expenses are less than S$150, which is why many people think his lifestyle is extreme. He used to spend even less about five years ago: Less than S$90 a month.
The way he has made his retirement work, from his housing decisions to daily spending, has got people talking after he featured in CNA’s Money Mind.
That segment on YouTube has garnered 1.9 million views and more than 3,300 comments so far, and 753,000 views on TikTok.
WATCH: How this Singaporean retired at 35 without getting rich (10:19)
YouTube user @wumingkkk had a few colleagues who also saved aggressively but who died “one to four years” after retirement.
“I don’t think there’s a single strategy that’s right for everyone. Saving aggressively can provide financial security, but it also comes with the risk of postponing too much of life’s enjoyment,” wrote @wumingkkk.
“Spending too freely can leave you financially vulnerable later in life. The key is to find a balance between preparing for the future and enjoying the present, because none of us knows how much time we’ll actually have.”
Another YouTube user shot back at others who questioned Lau’s retirement plan. “If he’s happy, who are we to say he’s not?” wrote @lecherhao86.
“A lot of Singaporeans are still paying (their) mortgage till old (age) and can’t afford to switch to a lower-paying job. I doubt this is a normal definition of happiness.”
Now 55, Lau said he was indeed happy as he shared a story he had kept “secret” until now.
Long before the term “financial independence, retire early” existed, Lau had embraced the mindset. It can trace back to one memory from childhood, when he was a primary school pupil and saw his aunt crying one day.
She had been retrenched, which she told him was “very common” among people in their mid-40s, he recounted.
“With a mortgage to pay, … kids to (raise), a lot of things to pay, they need money the most in their lifetime, and that’s the time they actually lose their job.”
That moment stayed with him. When he eventually became an English and Spanish language teacher, retrenchment was not just a distant possibility for him.
Lau has a first-class honours degree in Spanish.
While others chased bigger lifestyles, he had one goal: To never be financially distressed if his pay cheque disappeared. “I’d work extremely hard to earn as much money as possible,” said Lau, who wanted to “avoid retrenchment at all costs”.
He was also saving 80 to 90 per cent of his salary. “Everybody was spending money like water. I was spending money like a test tube,” he remarked.
At 35 and single, he thought he had another 10 years before retirement, but the language centre he worked for shut down. All his preparation was finally put to the test.
He bought an ageing three-room flat for S$87,000. In 2007, that was about 32 times a fresh graduate’s median gross monthly starting salary. Today, comparable older three-room flats can cost more than twice as much relative to starting salaries.
The minimalist kitchen in Lau’s flat.
Lau described his flat on the top floor as “very breezy” and “quite nice”, with “lovely neighbours, direct lift (access) and near Orchard Road”. The trade-off is lease decay: He bought it with about 64 years left on the lease.
“But you know what? The funny thing is, my flat was built (in) the same year I was born,” he said. “Technically, I’m allowed to stay here until I’m 99.”
After eight years, with the rent he earned, his flat was “free of charge”, he added. Today, he has one tenant and collects about S$900 a month. He also receives monthly payouts from insurance plans that matured during his retirement.
It all adds up to about S$2,500 a month, nowhere near the little that he spends, pointed out Lau, who shares some of his bills with his tenant and receives government rebates too.
A breakdown of Lau’s monthly expenses.
His advice when it comes to saving money? “Don’t save on the very cheap stuff, (for example by) collecting rainwater. … Save on the expensive stuff,” he said, citing housing as “the most expensive stuff (he) can think of”.
“You can buy a million-dollar apartment. … The choice is yours. I decided to buy a cheap one, and I have a lot of money to use. I don’t worry about money because I don’t like worrying about money.”
Lau’s financial freedom came at a cost nonetheless. Originally, he wanted a bigger flat, which he gave up just to retire young. He never had children but has “one fur kid”: a small dog he can “easily afford”.
He does not feel deprived, he insisted. “My pleasures are all mental, like listening to music, reading, listening to podcasts, learning about something, … and mental kind of fun happens to be free.
“I’m happy with what I have right now. I make do with it.”
A lot of what he has is also what other people throw away. Lau is a regular dumpster diver — it is one of the ways he keeps his costs low. And the handiest item he found was his bed.
“The mattress was practically brand new when I saw it, and the frame was quite new. So I brought it back,” he said, “because I knew I’d use it probably for the rest of my life.”
He does not collect items only for himself. He has “thousands of items shipped to slums in Manila”. Many of these are used items people donate in response to his posts on his Facebook page, Giving and Taking Free Stuff.
The items are dropped off at the Lucky Plaza office of a freight forwarder that will distribute them in the Philippines. It is a project Lau started nearly a decade ago.
Dumpster diving is one of Lau’s pastimes.
In the time since he retired, his biggest test came last year. He had a health shock that began with swollen feet and landed him in hospital after he fainted. He underwent 15 surgeries and was hospitalised for 62 days.
He said the hospital bill came to S$146,000, costing more than his flat. But he had insurance coverage and chose the most basic ward, Class C, which meant an 80 per cent subsidy.
“We only pay 20 per cent. But 20 per cent is still a lot,” he said. “Two per cent was my MediSave, and 18 per cent was the insurance.”
While he “didn’t pay a single cent” out of pocket, he knows he will need to spend on his future healthcare and living costs.
“I want to use my money to get a maid when I can’t take care of myself. And obviously, if the maid isn’t good enough, I want to go into a nursing home,” he said.
“Nursing homes aren’t cheap, so I don’t know how much they’re going to cost by the time I need (one).”
Lau has built a life designed to survive uncertainty. It is not an approach that will work for everyone.
Writing on Facebook after his interview went viral, he acknowledged that his low-cost lifestyle is “totally opposite” of almost everyone else’s life in Singapore. “I’ve kept my secret from the public for two decades,” he wrote.
But he thinks his lifestyle is also “high fun”, with free or cheap hobbies. And given the financial worries of today, he has shared his story.
“Worrying about money isn’t fun. The cheapskate lifestyle is the best way to make it extinct,” he declared.
Watch this Money Mind segment here. The programme airs every Wednesday at 9pm.
Continue reading...
With that purchase he retired young, not because he got rich but because he was prepared to have a flat, and not a job, that would pay him.
A conversation with his property agent — who asked how he intended to pay, say, a 30-year mortgage without work — set his mind on buying “the cheapest flat you can find in Singapore that you can afford to pay in full”.
“If you borrow money from the bank, the 30-year mortgage would mean that you buy a flat for yourself, and you buy a flat and give it as a free gift to the bank,” he said.
CNA Games
Show More Show Less
Lau expanding on the thinking behind his move.
Lau turned his flat into income by renting out a spare room, which allowed him to recover the cost of the property. He also reduced his cost of living to a minimum.
His monthly expenses are less than S$150, which is why many people think his lifestyle is extreme. He used to spend even less about five years ago: Less than S$90 a month.
The way he has made his retirement work, from his housing decisions to daily spending, has got people talking after he featured in CNA’s Money Mind.
That segment on YouTube has garnered 1.9 million views and more than 3,300 comments so far, and 753,000 views on TikTok.
WATCH: How this Singaporean retired at 35 without getting rich (10:19)
YouTube user @wumingkkk had a few colleagues who also saved aggressively but who died “one to four years” after retirement.
“I don’t think there’s a single strategy that’s right for everyone. Saving aggressively can provide financial security, but it also comes with the risk of postponing too much of life’s enjoyment,” wrote @wumingkkk.
“Spending too freely can leave you financially vulnerable later in life. The key is to find a balance between preparing for the future and enjoying the present, because none of us knows how much time we’ll actually have.”
Another YouTube user shot back at others who questioned Lau’s retirement plan. “If he’s happy, who are we to say he’s not?” wrote @lecherhao86.
“A lot of Singaporeans are still paying (their) mortgage till old (age) and can’t afford to switch to a lower-paying job. I doubt this is a normal definition of happiness.”
Now 55, Lau said he was indeed happy as he shared a story he had kept “secret” until now.
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A MINDSET INGRAINED IN CHILDHOOD
Long before the term “financial independence, retire early” existed, Lau had embraced the mindset. It can trace back to one memory from childhood, when he was a primary school pupil and saw his aunt crying one day.
She had been retrenched, which she told him was “very common” among people in their mid-40s, he recounted.
“With a mortgage to pay, … kids to (raise), a lot of things to pay, they need money the most in their lifetime, and that’s the time they actually lose their job.”
That moment stayed with him. When he eventually became an English and Spanish language teacher, retrenchment was not just a distant possibility for him.
Lau has a first-class honours degree in Spanish.
While others chased bigger lifestyles, he had one goal: To never be financially distressed if his pay cheque disappeared. “I’d work extremely hard to earn as much money as possible,” said Lau, who wanted to “avoid retrenchment at all costs”.
He was also saving 80 to 90 per cent of his salary. “Everybody was spending money like water. I was spending money like a test tube,” he remarked.
At 35 and single, he thought he had another 10 years before retirement, but the language centre he worked for shut down. All his preparation was finally put to the test.
He bought an ageing three-room flat for S$87,000. In 2007, that was about 32 times a fresh graduate’s median gross monthly starting salary. Today, comparable older three-room flats can cost more than twice as much relative to starting salaries.
The minimalist kitchen in Lau’s flat.
Lau described his flat on the top floor as “very breezy” and “quite nice”, with “lovely neighbours, direct lift (access) and near Orchard Road”. The trade-off is lease decay: He bought it with about 64 years left on the lease.
“But you know what? The funny thing is, my flat was built (in) the same year I was born,” he said. “Technically, I’m allowed to stay here until I’m 99.”
After eight years, with the rent he earned, his flat was “free of charge”, he added. Today, he has one tenant and collects about S$900 a month. He also receives monthly payouts from insurance plans that matured during his retirement.
It all adds up to about S$2,500 a month, nowhere near the little that he spends, pointed out Lau, who shares some of his bills with his tenant and receives government rebates too.
A breakdown of Lau’s monthly expenses.
His advice when it comes to saving money? “Don’t save on the very cheap stuff, (for example by) collecting rainwater. … Save on the expensive stuff,” he said, citing housing as “the most expensive stuff (he) can think of”.
“You can buy a million-dollar apartment. … The choice is yours. I decided to buy a cheap one, and I have a lot of money to use. I don’t worry about money because I don’t like worrying about money.”
FROM MENTAL FUN TO CHARITY WORK
Lau’s financial freedom came at a cost nonetheless. Originally, he wanted a bigger flat, which he gave up just to retire young. He never had children but has “one fur kid”: a small dog he can “easily afford”.
He does not feel deprived, he insisted. “My pleasures are all mental, like listening to music, reading, listening to podcasts, learning about something, … and mental kind of fun happens to be free.
“I’m happy with what I have right now. I make do with it.”
A lot of what he has is also what other people throw away. Lau is a regular dumpster diver — it is one of the ways he keeps his costs low. And the handiest item he found was his bed.
“The mattress was practically brand new when I saw it, and the frame was quite new. So I brought it back,” he said, “because I knew I’d use it probably for the rest of my life.”
He does not collect items only for himself. He has “thousands of items shipped to slums in Manila”. Many of these are used items people donate in response to his posts on his Facebook page, Giving and Taking Free Stuff.
The items are dropped off at the Lucky Plaza office of a freight forwarder that will distribute them in the Philippines. It is a project Lau started nearly a decade ago.
Dumpster diving is one of Lau’s pastimes.
In the time since he retired, his biggest test came last year. He had a health shock that began with swollen feet and landed him in hospital after he fainted. He underwent 15 surgeries and was hospitalised for 62 days.
He said the hospital bill came to S$146,000, costing more than his flat. But he had insurance coverage and chose the most basic ward, Class C, which meant an 80 per cent subsidy.
“We only pay 20 per cent. But 20 per cent is still a lot,” he said. “Two per cent was my MediSave, and 18 per cent was the insurance.”
While he “didn’t pay a single cent” out of pocket, he knows he will need to spend on his future healthcare and living costs.
“I want to use my money to get a maid when I can’t take care of myself. And obviously, if the maid isn’t good enough, I want to go into a nursing home,” he said.
“Nursing homes aren’t cheap, so I don’t know how much they’re going to cost by the time I need (one).”
Lau has built a life designed to survive uncertainty. It is not an approach that will work for everyone.
Writing on Facebook after his interview went viral, he acknowledged that his low-cost lifestyle is “totally opposite” of almost everyone else’s life in Singapore. “I’ve kept my secret from the public for two decades,” he wrote.
But he thinks his lifestyle is also “high fun”, with free or cheap hobbies. And given the financial worries of today, he has shared his story.
“Worrying about money isn’t fun. The cheapskate lifestyle is the best way to make it extinct,” he declared.
Watch this Money Mind segment here. The programme airs every Wednesday at 9pm.
Continue reading...