A windfall doesn’t come every day and normally older people will always advise the younger generation to save for a rainy day. However, most people are unable to do that and end up “investing” in branded goods or showing off.
Even lottery winners require a budget. Part of that strategy is having the discipline to handle your gains. You may turn that windfall into a strong wealth-building retirement account or invest in some garbage and ends up getting broke.
Aaron shared his story with us that he won 4D first prize earning a whooping SGD$50,000. However, the money appeared as fast as it disappeared.
Thai Disco & Branded Goods
He said that he was young then and did not know how to handle the money, he ended up buying tons of clothing that he does not need and some of them even cost him over $1,000 for a single piece of T-shirt and at least half of the earnings went to drinking with his friends and hanging flower garlands to girls in a Thai disco.
He said that now that he is married, he always thinks back and reflects on the mistake that he has made. He said:
“My child is coming soon and it will probably cost me a bomb, I don’t even have the courage to think about retirement.”
Save Young Retire Younger
He advises the younger generation to always keep money aside for a rainy day and said that he decided to share this story after reading an OCBC survey stating that 2 out of 3 working people do not have much savings.
He said that are a few techniques to save money for the future.
Either put aside a fixed percentage of income into savings or invest it into something worthwhile (after research). He said that using a percentage to save money is more effective than a fixed amount as there will be rainy days that might affect the savings.
Alex quoted an example on the importance of saving with a percentage value:
He said: “It might sound a bit far fetched, but trust me everyone will say that they have discipline, but it’s better to set a percentage in the long run. Its not a speed race, its a long long marathon”