How time flies. In the blink of an eye our little island nation turns 50!
A year ago I shared my three birthday wishes for Singapore’s 49th birthday. I wrote that I would like to see a greater level of financial literacy amongst the population. I also wished that society is able to find space for people to fail. Finally I also made the call for all of us to recognise and celebrate the differences within the society. These are issues that mean dearly to me. Let’s revisit each of them and see how far we have come along.
To be a functional adult in our society, we need to have a good working knowledge of money. There is no argument about it.
We are bombarded with money decisions every day, all of us. From the moment a typical adult leaves school and receives his first paycheck (and for many of us a lot earlier in life), he will be the steward of his own money.
Like many of his peers, he would start saving and thinking of ways to grow his money. One of the foremost decisions he would make would be in purchasing insurance and obtaining coverage for life’s unexpected surprises. In time to come, he will become fed up with the MRT breakdowns and would want to buy a car. He would fall in love, get married (another major financial decision in itself!) and purchase an apartment of his own.
Kids would come along, their medical and educational expenses need to be taken of. Along the way, he would have to content with taxes, CPF policy changes, investment opportunities that come along every now and then. He might struggle with the concept of debt. He would prudently plan for his retirement and ensure that his needs are well taken care of in old age.
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
In this capitalistic society, how well we live our lives depend on how well we make these decisions. It has been like that for the past 50 years. It will continue to be this way for as long as we remain.
Yet, it is such a shame that despite it being such an important life skill, the concept of money is not taught at all in our schools. Money is even a taboo topic in many households. We learn everything we know from our parents and friends, many of whom are not shining examples of good money managers.
Consequently, many adults are put off by the complexity of money and finance. Others shun it and end up leaving it to the professionals who may or may not have their best interests in mind. The ones who grab the money monster by the neck and try to conquer it are far and few in between.
Life Decision vs Financial Decision
Some months ago we spoke with Christopher Tan from Providend. Something he said really struck me. He mentioned that many people plan their lives by first making the financial decisions – what careers pay well, what car do you want to drive, by when do you want to buy your first (and second) property.
That is putting the cart before the horse, he said. What goes into any plan should be the ‘Life Decision’ first.
Decide what is it that matters most in your life. What are you passionate about? What would make you happy? What is it that excites you. Decide on this first and then make your financial decision to support your life decision. In other words, adjust your financial life to achieve your Life goals.
To be able to do that, one must have functional knowledge of personal finance. Financial literacy is not about a formal education in finance and understanding complex financial models and formulas. It is about understanding how money affects our lives in each and every way. Financial literacy is not about knowing how to make more and more money. It is about making good use of all the resources and knowing how much is enough.
With an increase in financial literacy, the general well being of the society will increase. It will go towards alleviating social problems and increasing life satisfaction of the population. For Singapore to grow as a society, there is no two ways about it.
The Space to Fail
I wrote last year that our Singapore society has become so sterile that people are afraid to venture and fail. I also argued that failure should not be seen as a unacceptable end. I wrote it last year against the backdrop of BigFatPurse starting out as a business, as we face uncertainty and experience growing pains.
BigFatPurse has been growing steadily as a business since I wrote last year’s article and entrepreuneurship has been a big part of my life in the recent years. We are far from being a roaring success, and many a times I wished we could have done more or grown faster. I am happy to report though, that we are definitely outgrowing our infancy fast.
Some weeks ago, our friend over at Tree of Prosperity Chris wrote an article presenting numbers against entrepreuneurship. He claims that the numbers for entrepreuneurship just do not check out. From a cold and calculating point of view, most entrepreneurs would be better off staying in their jobs rather than striking out and risking failure.
A month ago, Executive Chairman of Banyan Tree and Singapore Management University Ho Kwon Ping cautioned against over-romanticising the concept of entrepreuneurship. Speaking at the DBS Asian Insights Conference, he quipped – Entrepreneurship is not just (about) lawyers leaving law firms to set up cafes.
Entrepreuneurship is not about being rational.
The truth is, entrepreuneurship is a losing business. 90% of startups will fail within three years. Every entrepreuneur knows it, but most are buoyed by irrational exhuburence when starting their business refuse to be put off by numbers.
That is because entrepreneurship is about venturing boldly into the unknown. Entrepreneurship is about facing fear and conquering it. Entrepreneurship is about having a vision and throwing everything behind it to see it to fruition. Entrepreuneurship causes people to do crazy (and powerful) things. If that very notion is not romantic, I do not know what is.
Entrepreuneurship is a process. It is a process we have some control over. Success or failure is an outcome. We have no control over the outcome. If we only want successful entrepreuneurs, we will end up with no entrepreuneurs.
To repeat the oft quoted Henry Ford –
If I has asked my customers what they wanted, they would have said a faster horse.
I used the example of starting a businesses because it is something close to heart. Truth is, there are many people in our society who can see beyond faster horses. I hope as our society marches into the next 50 years, we can give these people the space to explore and more importantly, the space to fail. Not only in terms of enterprise but in fields of arts, sports, politics and their own unique niches.
If we only want successful entrepreneurs we will end up with no entrepreuneurs. If we only want succcesful artists, sportsmen and politicians we will end up with no artists, sportspeople and no politicians. Creating the space for people to fail will ensure we continue to flourish as a society.
Because we are different, hence we are one.
This time last year, I quoted George Yeo on the above. Incidentally he published an editorial just last week reflecting on Singapore’s 50th birthday. It is a good read and it explains in greater depth how the quote came about.
Social scientists often make two distinctions between how a society integrates.
In a salad bowl, all the ingredients come together but yet remain distinct. The lettuce and the grilled chicken and the cherry tomatoes make up the meal. They are tossed and mixed together, but cherry tomatoes will taste like cherry tomatoes and will never become grilled chicken.
In a melting pot, all the ingredients are fused together to give it its unique taste. I use the example of Tom Yum soup. The lemongrass, cilantro, lime leaves and ginger and chili are all essential ingredients. While we do not taste them individually, removing each component will drastically alter the taste of the soup. They provide the balance.
The American society is salad bowl in nature. Many different groups of people have come together and they coexist within the society. The Jews, Asians and Hispanics keep their own unique culture and are tolerant of others. Yet despite because of all their differences they are driven by a sense of pride and loyalty to the nation. In this aspect we have a lot to learn from them.
For the Singapore society to integrate, we must be given the space to be different. We were never a homogeneous society to begin with and the more we try to achieve that, the more threatened we will be.
Happy Birthday Singapore!
We are 50 today. As nations and societies go, we are young and fledging. We have a long way forward and forward we will forge. Happy Birthday Singapore!
image: thoongeng from clubsnap