Nowadays, many people are swapping out the 9 to 6 life for a very attractive alternative: financial freedom. Or maybe even being semi-retired. Just ask any over-eager financial advisor out there or look to the long list of financial independence blogs that have been floating around the internet for a while now. There is a growing desire to take back our time and kick back with enough savings to last us until retirement and beyond.
That means no more hustling 24/7 for us.
But is it possible to really retire young, before 55? Our retirement age is increasing, and is tied to life expectancy – meaning the longer we live, the longer we’ll wait to be able to throw in the towel for good. Maybe full retirement is a step too far – so let’s consider semi-retirement, where a person is comfortable enough to only work part-time, or in a job that doesn’t demand a lot from them.
In Singapore, where the cost of living is a serial murderer of many wallets, semi-retirement might seem like a pipe dream. But I was determined to seek out someone who was living this life. There was only one thing to do.
Turn to reddit.
I started up a post that I cross-posted between r/singapore and r/singaporefinance, and asked the netizens of Singapore: Is there anyone out there who is young and semi-retired?
Enter one reddit user (who has requested to remain anonymous). “You can ask me anything,” he said, indicating that he fit the description.
Curious, I went ahead to message him privately.
1. So tell me more about yourself. How did you get to semi-retirement?
I’m 36, married with no kids, with a net worth somewhere between $2 to $5 million.
How I did it: I got a 6-figure job and since I’m naturally thrifty, I ended up doing FIRE without realising it. I invested the money wisely and made several times the initial investment in stocks like Apple, Amazon, and Nvidia.
2. Did you really just get a 6-figure job out of university? What did you study?
There are jobs in finance that pay 6-figures out of uni. Law grads start at 7k these days. I studied math and computer science.
3. How thrifty is thrifty?
I’m not deliberately thrifty, so I’ll have like $10 salads or go out for dinner and drinks… it’s just that I don’t really have expensive hobbies and I don’t believe in buying stuff just for the sake of it.
4. Let’s talk about your net worth. It’s a big range.
It’s not a huge swing. I just didn’t feel like revealing specifics. The stocks portfolio is about $2 mil, then there’s illiquid stuff like CPF, private investments, property, etc.
5. What’s the best advice you can give anyone who’s looking to retire as early as possible?
Looking back, some advice I can give is to delay your home purchase and to move CPF money from OA to SA until you max out. Everyone thinks you should buy a property early but it’s a huge commitment and the upside is frankly quite limited.
6. So you don’t own your own property now? What’s your current living situation like?
I only bought a property this year, before that we rented for a few years.
Actually, more people should rent, the rental yield is <2% which you can easily beat by investing in REITs. If you’re a landlord and you buy a condo and rent it out, you’ll make 2%. So as a tenant, that’s your cost of renting as opposed to buying a place (assuming no capital gains).
So you just need to get investment returns above 2% to make it more worthwhile to rent.
7. What are you up to, now that you’re semi-retired?
I guess I could live off passive income, but it’s quite boring, so I did a career switch. Took a pay cut but much less stress, no regrets. It’s actually quite liberating when your job is not your primary source of income.
8. What sector did you work in, and where are you working now?
I used to work in technology in a financial firm. Currently, I still do tech but not in finance, so it’s a lot less stress and not so time-sensitive. Took a pay cut, but it’s totally worth it. Not really passionate about it, but don’t hate it either, and it’s simple enough that I just do a normal 9 to 6 and don’t bring my work home.
9. How did you get started on your investing journey, and how did you get good at it?
For investing, I just read a couple of books when I was young and opened a POEMS account to test out some ideas. Investing is a really personal thing because you need to overcome your own psychological bias, so the only way to learn is by actively investing your own capital (but then you need capital to start out… it’s quite a chicken and egg thing).
10. What’s a good number to start with your savings if you want to invest?
I think you can start with any number, probably $5-10k would be the minimum to make it worthwhile.
11. How would you describe your investing methodology or style? What are some tips you can give people?
My investing style is mostly tailored to my own personality, so it may not work for everyone. I try to buy good companies at a reasonable price, and try not to get caught up in the hype in the news. If I lose 10%, I operate a stop-loss and think about getting out.
I guess the main thing I’ve learnt is to cut your losers early and let your winners ride… it’s tempting to want to take a 20% profit but most of the money I’ve made has been from stuff I was too lazy to sell. Also, don’t try to do too much, you can own like 10-20 companies and just buy ETFs to match the index for the rest of the positions.
12. What are the best investing books out there you’d recommend?
There’s some canon that everyone reads like The Intelligent Investor and Margin of Safety. But actually the 3 most important ones I read were:
- A Random Walk Down Wall Street, about why we should buy ETFs
- The Little Book of Behavioural Investing, about psychological biases
- Confessions of a Stock Market Operator, about how to take risks
13. What are your future plans with your spouse?
Probably, I’d like to have kids, and transition to a more part-time consulting gig. As you get older you realize the only true luxury is time.
14. What does full-time retirement look like for you?
I don’t know about full-time retirement. I explored starting a fund and managing other people’s money, but the compliance costs are too high. Otherwise I’d like to buy a small business and just run it for fun.
If you’re keen on getting started with investing, we have an introductory series for beginners that’s worth looking at. As always, we advocate for going in prepared, especially when it comes to our money.
Semi-retirement doesn’t feel so far away now, does it? And if you’re interested in learning more about the FIRE movement, check out our article here.