Retirement is a word that invokes fear.
The fear of not having enough money to retire. The fear of
money running out during retirement. The fear of the retirement age being
pushed back even further. The fear of social isolation, losing your identity,
health issues and the like.
It is no wonder that when “early retirees” are featured in
the media, it usually draws the ire of the populace. How exactly have these
people “gamed the system”, and are able to escape the rat race?
Ashish Kumar, the 31-year-old retiree
Earlier this year, Ashish was featured in multiple media
articles and interviews.
I think Ashish’s story stands out because of his background
– he was a top PSLE scorer, then awarded a top government scholarship, did both
a Bachelor and Master of Law at Cambridge, came back to serve out his bond
(emphasis here, because I often wonder how many govt scholars end up breaking
their bonds) … and then finally decided to retire at the ripe old age of 31!
Naturally, articles on Ashish’s retirement caused quite a
stir on social media, but I’d strongly encourage you to watch this YouTube
interview with Ashish, before forming your own judgement. In particular, I
enjoyed to section from 34:40 onwards, although I watched the video in its
entirety in one sitting.
https://www.youtube.com/watch?v=YPQdFWCHDPA
For further context, based on the various news articles
about Ashish, I’ve gathered the following summary of how he achieved early
retirement. He mentioned that he consistently invested in ETFs tracking the
S&P500, and in response to a comment which posited that he “should be close
to 7 figures”, Ashish’s response was “I’m not quite that comfortable, but
you’re not a million miles off!”. Ashish also continues some form of part time
work as a debate coach – from my understanding, this can be fairly lucrative.
Ashish had very kindly responded to a good number of
comments on the Reddit post linked below. I’d say the questions and discussions
on this Reddit thread are way more rational than what I’ve seen on other social
media discussions – which were rife with feelings of envy, spite and doubt.
https://www.reddit.com/r/singapore/comments/1bqjfi0/ashish_kumar_was_a_top_psle_scorer_now_hes_a/
Now, let’s unpack some of the common sentiments online about
Ashish’s story.
The main ones are:
He’s not actually "retired"
I find this hilarious – because it appears that people are
fixated on “labels”, rather than the actual facts of the situation.
Let’s look at two examples:
Person A: 60-year-old senior banker who accumulated $5
million, left their corporate job, and derives some income being a board member by attending a few board meetings a year.
Person B: 31-year-old who accumulated close to $1 million, left their corporate job, and derives some income as a debate coach, one day per week.
The average person won’t hesitate to identify the
60-year-old as a “retiree” right? Or, at the very least, a “semi-retiree”.
So why do we hold the 31-year-old to a different standard?
In my view, retirement should be based on a net worth number, and not an age –
as long as one has accumulated enough to leave full-time employment, that
sufficiently qualifies as a “retiree” to me.
On living with parents / not owning a home of his own
Another common theme in the comments was that since Ashish
does not own a home, and continues to live with his parents, this somehow
negates his “early retirement” feat.
Again, I’ll pose two examples to illustrate the irony of this perspective:
Person A: $4k of passive income monthly, from $1.2m invested, which covers their
expenses. Owns a home which was fully financed by CPF OA.
Person B: $4k of passive income monthly, from $1.2m invested, which covers their
expenses. Lives with parents, hence CPF OA intact.
For the visually inclined, I’ve made a simple graphic to
illustrate my point in a more straightforward manner:
It would be absurd to claim that person A is “truly retired”
while person B is not, simply because person A owns a home. Both people have the
exact same net worth ($1.5m), the exact same passive income ($4k per month) that covers their expenses,
and logically by extension, the same quality of life.
When did owning a home become a pre-requisite for
retirement?
My observation is that this negative perception of “living
with parents” is largely confined to the middle class. Wealthier folks tend to
prefer multi-generational living.
One common thing I noticed about wealthy families is that
they plan for their children and grandchildren – multi-generational living is
encouraged and seen as a positive. Whereas generally, the middle class see
"adults living with parents" as something to be frowned upon, with
incredible statements such as "live with parents got pay parents
rent?" or "wah so old already still never move out?".
I love good architecture and I've watched countless CNA
Luxury videos, and wealthy parents designing homes with their children's needs
in mind has always been a common theme. The best example would be the Sheng
Siong family, where not only 3 generations live together, but the families of
the 3 brothers as well!
Some examples include:
Adding an anecdotal example, just as I was drafting this
post, a friend shared about their housing plans. They applied for a 4-room BTO flat
during university, and are currently within their MOP. Friend and spouse are
both working in relatively high-income roles in finance and tech – I’d estimate
a household income of easily 20k and up.
Friend’s parents live in a 3-storey, freehold semi-detached
home. Friend mentioned that their plan, once the MOP is up, would be to rent
out their well-located BTO flat (current market rate 3-4k/month), and move back
with their parents. What’s even more interesting, is that friend’s sibling (who is also married and owns another BTO flat) has the
exact same idea as well!
They are both willing to spend a significant amount on
A&A to renovate their parent’s semi-detached home. Assuming both friend and
sibling rent out their BTO flats for ~4k each, that would bring in nearly $100k
per year combined. That’s a very decent payoff for whatever amount spent on
A&A. Beyond that, any rental income will accrue to themselves – a
significant additional income stream to their already high incomes. Not to
mention the intangible benefits of closer family ties.
I can't help but to point out the self-sabotaging mentality that people have set for themselves, by perceiving "living with parents" as something to be despised. The offspring of the wealthy, already with all the advantages afforded to them, still have the added benefit of living with their parents well into adulthood, thereby giving them an additional boost financially.
Whereas, going by the number of comments about Ashish "living with his parents" the masses have internalised the perspective that living with parents is something to be frowned upon. This perspective puts undue pressure on people in their 20s and 30s, and potentially sets them up for stretched finances – widening the gap between the haves and the have-nots.
At this point, I must add that I recognise there are
situations where moving out of your parent’s place would be the preferred
option – obviously, living in a cramped flat and sharing a bunk bed with your
sibling… cannot be compared to someone living in a 15,000 sqft GCB. But for
people in their 20s or 30s who are fortunate enough to have a room to
themselves, and enjoy a healthy relationship with their parents, I struggle to
see why living with parents should be frowned upon.
I have my own hypothesis of the negative perception towards
living with parents, and this is linked to the property crazy mentality that
has propelled our housing market to the stratosphere.
My hypothesis is that these spiteful comments are mainly
made by people who have been drawn into Singapore’s property hype – seeing properties
as some kind of status symbol and money-making tool – as a result, possible
maxing out the 55% TDSR with a 30-year mortgage hanging over their heads. There
is a gnawing fear of retrenchment, and they have effectively chained themselves
to payoff their huge mortgage debt. Of course, seeing someone like Ashish choosing
go against the grain and entirely forgo the property ladder… hits a raw nerve.
The irony here is that, if you’re indeed looking to get onto the
property ladder, surely it is to your benefit that high calibre folks like
Ashish opt to live with their parents, instead of competing in the housing
market with you? The point here is that Ashish, with his superscale salary as a
scholar in the civil service, would presumably have had little difficulty in securing
a private property for himself. But the beautiful thing is that he was willing
to give that all up – in the pursuit of freedom. That’s admirable to me.
In gist, most of the netizens casting aspersions on Ashish will
likely continue to lament plights, whereas, as Ashish’s LinkedIn profile aptly
puts it, he is “no longer seriously working, and pretty happy about this. Keen
on writing, music, and getting outdoors.”
Living the dream!
What about taking sabbaticals instead?
As I’ve shared above, a good number of people were adamant
that Ashish should be classified as “taking a sabbatical” instead of “retired” …
which presumably makes them feel better about themselves, because sabbaticals
are far more common than a 31-year-old retiree.
Going by this line of thought, netizens should be more open
to the idea of younger folks taking sabbaticals, right? Absolutely wrong! It is
apparent to me that whether you’re taking a sabbatical or an early retiree… a
good number of people absolutely detest that.
I’ve come across this couple who are in their early 30s – Yang Jie and Lionel. A few months ago, they posted this video about taking a year off to travel the world.
https://www.instagram.com/reel/C5SZNkYSyLq/
They are the classic power couple – one in tech sales and
the other in investment banking. Based on their posts, they’ve saved up 7 figures,
and have decided to quit their lucrative jobs to travel the world. Thus far,
they’ve been to quite a number of countries, and I must say, it looks like so much
fun!
Now, as expected, a good number of comments on their social media posts are pretty much the same as those about Ashish – again filled with envy, spite and doubt. While the couple spends their days lazing by the beach in Phuket, or visiting Hokkaido in spring… I don’t think they would be too bothered about what bitter netizens think about them. The only think I think worth mentioning, is that for those who are curious, an IBD associate indeed brings in some pretty decent money (link below on MyCareersFuture).
The Paradoxical views of FIRE Critics
From reading all the comments about these two examples, I’ve
come to a simple conclusion – people just don’t like to see other people not
work. Especially young(er) people.
The paradox that I want to highlight, is that people like to
bring up the supposedly negative aspects of early retirement – describing it as
the worst possible choice, you’ll be bored to death, you’ll run out of money,
your brain will rot, you’ll have no purpose… yet at the same time, a good number
of people think that early retirees are “flexing” or “showing off” their FIRE lives?
How can something so bad, be something worth showing off?
The biggest hypocrisy for me is that – let’s face it – Singapore
is stressful. We constantly lament about the work culture in Singapore… that we’re
being overworked, we’re overly stressed out, and consequently these take a toll
on our mental and physical health.
Yet, when someone manages to game the system, escape the rat
race and break free of all the negative factors above… they get bashed till no
end! People find countless reasons to cast aspersions, downplay what they
achieved, criticise, raise doubts and so on…
Shouldn’t we feel happy for them? That they’ve achieved something
we dream about?
I’d end off with my perspective – to me, I simply take a laissez-faire
view towards whether people want to work or not. Ultimately, one has to be
responsible for they choices they make, and deal with the consequences of their
choices. For Ashish, Yang Jie and Lionel, I believe that they are intelligent, highly
skilled professionals and would face little financial difficulties, even in the
unlikely situation of things going south. Their stories exemplify the courage
to take the path less travelled.
See the preference to work or not work as a choice between tea
or coffee – simply a preference. My preference is clear.
