3 Things I Like About Growing Your Tree of Prosperity

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I know I am 9 years late.

Christopher Ng wrote Growing Your Tree of Prosperity in 2005.

I am only talking about it in 2014.

But it is still relevant today, or even more pressing as Singapore’s cost of living continue to climb.

#1 The $100,000 Challenge

I love challenges because the adrenaline rush pushes me to achieve something desirable. I guess that was the intention of Chris as he set a $100,000 challenge to Singaporeans. Before going into what the challenge is, we need to understand his observations of Singaporeans’ attitude towards money, and how he preaches the alternative view on financial independence.

He thinks most Singaporeans are trapped in consumerism.

“We believe that the pursuit of the 5 Cs is actually a reflection of the amount of status consciousness Singaporeans have. The problem of status consciousness arises because we yearn so much for respect and love from the people around us. How other people think of you really affects how you feel about yourself. This is the reason why people pursue material goods because it is the most obvious way to signal to the rest of your peers that you have arrived.”

While I am not the most status-seeking person I know, I am guilty of buying stuffs to impress at times. But one principle I always held – never break the bank to own anything. I just can’t bear to see my money vaporise for a gratification that I know would not last long.

His antidote is to develop a new mindset for financial independence. First, forget about making easy money. Success requires hard work. Second, delay gratification. We will come to his concept of decadent and frivolous expenses later. Third, be resilient. Tough times do not last, tough people do. Fourth, be immune to marketing hype.

But it isn’t easy to change mindset just by awareness alone. The $100,000 challenge is to help Singaporeans change the mindset by achieving the challenge itself. To allow Singaporeans willingly to commit to a tangible goal and take action. Otherwise it is all talk.

“When $100,000 can be used to deal with crisis and otherwise act as a secondary source of income, you’re actually buying something more priceless than a car or a condominium. You’re buying confidence, security, hope and a firm handshake.”

So there you go, save and accumulate that first $100,000 in cash, not CPF. And it must be net of all liabilities.

He is confident that if you can get to $100,000, you already have what it takes to go on to the first $1m. $100,000 is a means to an end. Small enough to get you started.

#2 Salary Truncation

We have heard of the concept “pay yourself first”, whereby you would automatically save 10% of your salary before you spend. To Chris, this is not the best way.

“Salary truncation advances the concept of “pay yourself first” by limiting your expenses every month instead of limiting your savings every month so that any positive surprises to your income automatically gets saved for a rainy day.”

Instead of limiting your savings, you should limit your expenses. For example, if you earn $2,000 per month, and you limit your expenses to $1,800, you can save $200 or 10% of your salary. In some months you may have more income because of bonuses. If you have $4,000 in a month, but because you limited the expenses to $1,800, you can save $2,200 or 55%! In this way, your savings will grow much faster than just saving 10% of the salary or a mere $400 in a bonus month.

My personal experience was that majority of my savings was contributed by bonuses. Instead of splurging the rewards, I saved and made big jumps in my savings. Never underestimate the contributions of your bonuses!

#3 Decadent and Frivolous Expenses

Often times, it is hard to decide if we should spend on something. If we want to cut down our expenses, what should we scale back on?

Chris offered a structure to help you classify your expenses so that you can easily make a decision.

There are four groups:

  • Mandatory – small and compulsory expenses like basic food and clothes.
  • Investments – large and compulsory expenses like basic shelter or academic course to enhance career.
  • Frivolous – small and nice to have expenses like branded clothes.
  • Decadent – large and nice to have expenses like luxury cars.

You do not need to worry much about mandatory expenses and investments. You just have to watch the Frivolous and Decadent expenses. Delayed gratification for decadent expenses may allow you to afford the same things in the future but as frivolous expenses.

“Decadent expenses cost many hours of labor and generally are not required towards your personal happiness. You need to find ways to get rid of such possessions and figure out if you are a victim of status anxiety. Very often these expenses were made just to signal your success to your peers. Avoid and eliminate these expenses at all costs.”


“Frivolous expenses require fewer hours of labor but nevertheless are not required for a fulfilling life. While your spending on frivolous expenses should be reduced, frivolous expenses can actually be used as a reward for meeting your goals or simply to maintain your sanity in this crazy world… The great thing about life is that as your income increases, decadent expenses become frivolous expenses and there is less urgency to flush them out of your lives.”

The book is still in print and you can buy it here. You can visit Christopher Ng’s blog too.

Would you take the $100,000 challenge?

For those who have amassed the $100,000, congratulations! But I opined it is not sufficient for retirement in Singapore. If you agree, how do you grow it to the next level?

3 thoughts on “3 Things I Like About Growing Your Tree of Prosperity”

  1. I love the way you bring out the key points that this book has bring you instead of focusing it in chapters.

    I also like the way you did the quotes on the market wizard, what you deem is best for your audience.

    I have an inventory of ebooks both related and not to trading.

    Can you tell me how you select and and remove content that brings out the key factor that made the book worth reading?


    • Thanks David! I think not all books are the same. My level may not be able to comprehend books which are deeper and complicated.

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