Teaching kids about money

As a kid, I did not get much finance/money education at home. I was not given an investment account at young age. Nor was I being lectured on budgeting or the importance of money. However, actions speak louder than words.

The last thing I want is for Mochi to think that money is good, poor is bad, or to judge people based on money. I don't want her to value life just in money terms like going to a big house and just think the person is rich.  I do not want her to make decision solely based on money.  I don't want her to become a penny scraper for the sake of it.  I want her to know the use of money, to appreciate money but not controlled by it, to spend wisely. I will try to educate her on value and passion  by setting examples.

Good (non-finance) habits

My parents are careful about money. They value the use of money. They have habits that are not only good for your wallet, but mainly motivated by health. They never really mentioned money directly but there are some good habits I got from them.

• Dine at home: Just like all people from "back then", we always dine at home. Only on rare occasions we would dine out. Even so, it would usually be the same few restaurants we go. It was probably the norm back in the days when parents can get off work early enough to cook a meal (and when we had helper at home).
• Love the nature: When we are older, sometimes the normal weekend activities are "shopping, dining out and watching movie". When I was young, we spend most weekends outdoor hiking, swimming, picnicking and flying a kite on a peak, or playing at a beach. These activities give me lots of fond memories. I still love to do them with Mister and Mochi. 
• Travel habit: Although I heard many travel stories from my dad, we rarely travel by plane when I was young. We were a family of five, which makes things challenging. It might be because of this, I treasured every trip I go on.  This is a bit difficult these days when almost everyone spend every vacation day aboard. 
• Love an old house: We have always stayed in old buildings (actually the 10-storey building was built by a construction company owned by my grand-dad). As a result, I set a somewhat lower expectation in some aspects for my home (e.g. an old elevator, older stove).  I love old neighbourhoods and old buildings where each building has its own unique characters. I cannot imagine living in cookie-cutter new-built (high rise or houses) where there are 100 of same units / house in the same area or complex.  (Of course there are custom built houses.)
• Library: We had huge bookshelves at home packed with books for my parents. But to us kids, we used to frequent the library.  We own a few books too, but most of them are from the library. We get to enjoy new books every few weeks.  I have been doing this with Mochi as well. Reading is a great hobby that cost little and can keep you busy and entertained even when you are all alone. 

Frequent the library since before she could walk

Value things we own

A friend told me once that she just booked a short trip for the next long weekend because her school age daughter said casually "I want to take the plane".  Next day my friend asked her daughter about the flight.  Her daughter replied "I don't want to fly anymore".   How often we tried to satisfy our kids fantasy and desire because we think we can provide, because we don't want to upset? 

Truth is, kids don't need everything they ask for. Kids can be satisfied easily.  

• Value your belongings: In the older days (not THAT old...), consumerism was not really a "thing". People/government didn't seem to be so concerned about growth by increasing spending. We use things until they are broken and need to be replaced, not because the company came up with a new style or new product. 
• Think before you buy: I don't think we "cheap out". My dad owned different cars (Jaguar, a car that looked like a limousine, but mostly Benz). My mom also loved shopping for brands. Her Dior shades are vintage now. She used her well-maintained LV bag for years. They choose what to splurge on. And whatever luxury they purchased, they take good care of them.   Yesterday, Mochi saw a bunny headband she liked. I told her to keep that thought. We could consider it for her birthday or Christmas. She happily repeated what I said and left the bunny headband alone. 
• You don't need them all:  I try to teach Mochi that "something gotta give". If her library card only allows for 8 books, she has to pick 8 books out of the 10 she wanted.  Mommy has 20 days of vacation. She has to decide if she wants me to stay home and play with her or keep the annual leaves for longer trips together.  Mochi is given abundant opportunities to make decision and prioritise. She knows we cannot always get what we want (immediately or ever). 
• Good things come to those who wait - That Marshmallow experiment: I haven't tried that Marshmallow experiment with Mochi. However, from delaying enjoyment of a snack, to waiting for the homemade ice cream to be churned and hardened, Mochi learns to wait from the very beginning.  Of course there are times she would throw a tantrum but usually it is when she felt we ignored her request.  I'm not sure if it is easier or more difficult with a 2.5 years old. Let's see if she can keep this up as she grows up! Do you have similar experience you could share? 

Manage their own money

• Allowance (space out spending through the month): As a kid, I got a small allowance for snack, stationary, and tram rides. It was a very small allowance of maybe US$20 a month.  I know that's how much I can spend within the month. I learn not to spend it all right away.  I'd probably ask Mochi to come up with her own allowance amount which I have to approve. So she has even better understand and ownership of her money.
• Education fund / Saving: I plan to start an education fund for Mochi (that's another topic). I will let her participate and be aware that, if she has unused allowance, she can save them to the fund for future use.  I plan to invest the fund in index funds. I will let her be aware that you get a return on a prudent investment. This is a topic I need to further investigate and share with you. 
• For older kids - Let them own their budget: When I moved overseas to study (high school), my dad would support my finance when I was in school. I had to tell him an amount I needed, including all  calculation. He would challenge me how much a carton of milk costs.  I had no clue about cost of living until then. He usually sent us (my sister and I) money once a year. So I had to come up with an annual budget. After I started working 4-8 months a year on the co-op program at my University, I more or less paid for my own bills.  That really helped me get an understanding of money. Although I didn't care much about saving, I made sure I save some emergency fund just in case.   

Earn their own money

• Money comes from hard work: This is another point I have been thinking about. I want Mochi to know that she has to contribute to our home. She would not be earning her allowance from helping with the laundry or dusting. However, maybe I can let her make some money mowing a lawn for neighbour, or help cleaning our rental properties.  What is your suggestion on kids earning their allowance? I would love to hear more suggestions and ideas from you!

We are all expected to help out around the house.

Education and passion

• Learning and passion come hands in hand:  Without basic education, you cannot contribute to the society / earn a living. Without passion, money is meaningless.  Education is important and it is never too late to learn.  My dad is a great example in "life long learning". He got his lawyer license in his 50s and started his own law firm. Before that, he was always learning something. It is not about getting a "degree". It is about the passion to learn something new; the passion in life.  I will let Mochi knows the importance of learning and of passion in life. 

Giving and sharing

Finance is not just about ourselves. It is also about sharing and helping others. 

• Giving: Although we let Mochi give to charity all the time, but she cannot quite get the meaning at her age. However, we will keep doing that so it becomes a habit.
• Volunteering: I prefer volunteering my time than my money., especially with kids. They see the benefit immediately.  Mochi joined me to beach cleaning volunteering once. I will continue to bring her out to more volunteering. In the mean time, whenever I go to a beach or hike, Mochi and I help pick up garbage we see in the ocean and on hiking trail.

Mochi is not even 3 yet. So it may be easy for me to say. How do you teach your kids about money? Any ideas you would like to share on kids earning their allowance? 

A bit of my (finance/saving) past

As I write this article, I found that different stages of my life can be categorised by "saving rate". I do have a relatively high saving rate even in all years. One thing for sure is, there is no direct correlation on how much I spend v.s. how happy I am.  

Blank Slate

When I graduated from University, my bank account was literally a blank slate. I had 1 digit balance (or was it 1 digit overdraft?) when I started my first job after school.  While my friends took some time off to travel before they step into the society, I decided to start working immediately to "earn a living".

Work hard save hard

I was still living in student mode the first few years out of school. I don't track my spending religiously. Instead, I track my spending maybe two months a year just to get an idea of my average spending. Looking back at my record, I was actually saving 48% - 60% on my after tax income!

Saving 48% - 60% on my after tax income

I was having fun while at the same time saving lots.  How did I keep spending low? I didn't own a car, which make a huge difference. I also shared a rental apartment (i.e. those with coin laundry in the basement) with my sister. The building comes with an indoor swimming pool with outstanding view of the city.  Being fresh off school earning my own money, I did make some fancy brand purchases. However, I lived like a student in general. Those few years were some of the most carefree years in life.

Work hard play hard

Luck stroked. I landed a job in the New York City! The huge pay raise all went towards my rent (solo) right in Manhattan (Gramercy / Union Square area). At a saving rate of approximately 31%, I didn't do much budgeting/planning back then.  Regardless, those were some of the best times in my life. I still miss every single moment of it when I look back. I still keep in touch with other expat friends I made in NYC. I really enjoyed my time in the Big Apple.   

That life style continued for a few years when I transferred back to Hong Kong. Those few years were the dark age in my life from work and family perspective.  I can only say that in Hong Kong, one needs to be more aggressive with ones own career.  Luckily I had a great flatmate which was the silver lining to my life at that stage.  

A job I call a career

After long job search, I joined an investment bank. I got the best boss who not only adjusted my salary to market but also helped me get a well-deserved albeit long-delayed promotion. I work long hours most days but I feel "on track" and that I have "achieved" something.  My saving rate has always been over 45% since I joined the bank. Mister and I traveled wide and far (averaged 5 trips a year?).  Life was promising and we moved on to the next chapter of life together.

Newly wed

Wedding was costly. I was reasonable in some aspects (no fancy engagement photo session, no huge banquet) but went overboard in some (my make-up artist was not worth that price). Some said you save money living as a couple. But since I had a flatmate before getting married, it didn't make a huge difference for me. As we earn roughly similar salary, we don't share our finance. Mister did pay for rent. 

Change for the better

Mister is somewhat an "investor" compared to me. The only thing I invested in so far would be some mutual fund, government bonds, GIC but Mister has invested in stock and properties (like most normal male). He decided we should buy a family home for our future.  I guess it is about time as we welcomed our little one, Mochi, to our lives. 

If not for the crazy bidding wars in the property market, we may have purchased a house or two earlier.  After countless failed bids, we finally each has a detached house under our names. Now we are cash poor but asset rich.

Finance mixed up

Our money kind of all mixed up when we combined our savings for the down payments of the two houses. However, we are still not fully transparent with our finance. We have a joint account mainly for money transfer. Other than that, I don't know exact earnings/spending of Mister. I guess he wanted the freedom and does not want to be judged and commented on his spending.  So now saving rate is a myth for me.  However, assuming we earn the same level of income with Mister earn a bit more, our saving rate is around 45-50% now.
Our currently model is that he pays all family expenses (e.g. the Nanny, tuition, trips) while I am responsible for saving and my personal spending. Based on that, I would say we save roughly 50%. 

Next step

Now we have 2 houses, some investments, some retirement funds (RRSP & ORSO). We need to decide what to do with our money next, and how/when to retire comfortably.  I have some options and ideas in mind. Let's see if we can live our dream as we plan our longer term dreams!

What are your dreams

My blog is about planning and living my dream. So the most important thing is, of course, to know what are my dreams! There are many types of dreams:

- Day dream

- Dream in your sleep

- Big visionary dream

- "If I could be anything" dream

- Dream job / career

- Other people dream
- "All you can eat/travel/play/drink" dream

- and many many more...

So here are some of my different dreams that I could remember.

Dream in My Sleep - The Flying Dream

As a kid, I had the recurring dream of flying. Not flying in a big blue sky, but usually flying between busy streets packed with high rise skyscrapers old and new.  Most of the times, I was stuck under the overhang passageway of the highrise. I suspected that was a dream reflecting my subconscious desire for independence and adventures. Because the recurring flying dream ceased when I left my home country and joined my older sister to study high school abroad. I thrived in the excitement of the new life and new friends in a new country far away from parents and friends.

Overhang passageway

Day Dream - The Farm Dream

Before I went abroad, I was studying extremely hard preparing for public examinations. In between classes and tests, my friends and I would talk about dreams. My dream at that time was to be a "farmer" (or to live on a farm, minus the hard work). Other than the fact that Geography was one of my favourite class, I knew nothing about farming.  I considered the part about growing plants, weeding, harvesting. But the picture that entice me the most is where I would sit at a porch overseeing the farm, enjoying the sunset after a day of hard work. My friends would join me to have dinner and tea together while we would chat the evening away.  That might be my escape mechanism for studying too hard. I still have that jam lid with a picture of farm fields which I would stare at when I was bored by the textbooks.

The farm image I have in mind, where I wanted to live

The Travelling Dream

Having worked for so many years, I must admit that in between excel files and in meetings, I may think about my next vacation or weekend getaway. Before kid, I loved travelling to the less travelled countries like Myanmar, Nepal, Cambodia, Vietnam, Hungary, Prague. We have also been to the basic Italy, Sicily, Germany, Switzerland, Austria, France, Spain, UK, Turkey, Belgium, Netherlands, US, Canada, Mexico, Hong Kong, Thailand, Malaysia, China, Singapore. Even with Mochi, we continue to travel the world: Taiwan, Japan, Korea, Australia, Finland, Estonia.  There are over 190 countries in the world and I have only been to / listed less than 30 of them! Would I ever get to visit all of the countries and towns I want to experience?

Bronte infinity pool

Dream Job? or "Society Standard" Dream 

Before I attended the University, I always pictured myself being a successful business woman, living in a metropolitan condo overseeing the Thames River or Central Park or Victoria Harbour, with skyscrapers lighting up the night. I would think to myself "that is what I define as success". Having worked and lived in Manhattan, London, and Hong Kong, with a harbour view unit I call home now, I have reached the checkpoint I set for myself! My job allows me to achieve this humble goal/dream. Now what's next?

Harbour night view

The Humble Dream

I enjoy my work, especially the problem solving, analytics, and people interaction aspects. But I don't enjoy my job as much when the "need" to "earn a living" is looming. Under the daily mundane burden of life, working long hours day after day, sometimes ones dream could be very humble and basic. All I want now is to be home while it is still bright outside. Spend more time with our loved ones at a park, on a beach, at a cafe, or even just at home. Or maybe read a book, cook a meal, sleep in on a weekday, window shopping for hours. etc. etc. etc.

My Real Dream?

I have always wanted to be a travelling author.  My number one hobby is reading. One of my favourite authors travelled the world and wrote about people she met, stories she heard, and things she saw.  Although I'm not sure about writing novels for a living, that should not stop me from writing! I keep a personal journal. I've also had a few blogs before this one. But here I am, starting a new blog, sharing with all of you. You can say I am trying to "live my dream".

Spending time in the nature with my loves

Bring it all together... Next step!

O whoa. I have more dreams than I thought! Now what? What's next? Here are some key points I want to achieve:
- Keep working in my field but with better hours

- Spend more time with my loved ones

- Keep writing!

- Relax and enjoy nature with my loved ones, in my own house (sounds like retirement!)

- Travel and explore the world
- Financial security/independence

I am a risk adverse planner. I cannot just quit my job to travel. I do enjoy my job, just not so much the long hours. I have always been quite a workaholic before Mochi arrived. With Mochi, I just want more work life balance. There must be more to life than my job. I don't want my job to rule my life!

I don't need to be rich to pursue my dreams.  However, I want Financial Independence and Security so I work for reasons other than "earn-a-living" or "provide for my family". "Financial Independence, Retiring Early" FIRE is not what I want in my 30s. At the moment, I enjoy many aspects of my job.  I am proud to tell people where I work and what I do. However, I may want to have that "Early Retirement" option in my late 40s or 50s. As the Chinese saying "earn money to buy flowers" - Meaning you are not earning a living. Instead, you work to make money for own pleasure. Now I have to see how am I going to achieve this!


Are you on my blog because you are also thinking about the very same thing? You are happy where you are, but you want more in life. You are considering FIRE but, just like me, you are not sure if you can do it, not sure if it is meant for you. Welcome to join my journey of self-reflection. =)

How it all began

Planning for my future
It didn't start when we got married. It didn't start when I hit 30 years-old.  It didn't start when my idle cash balance reached US$400,000.  Nor was it when my Little One was born. It also wasn't when we purchased our first house last year.

It was only after we purchased our second house last month when I suddenly realised I should start to plan for my retirement! Why not? I have always heard of people saying that one is ready to retire when you own 2 houses - one to live in, the other one to generate rental income to support your expenses.  So I thought maybe I can retire once one house is fully paid down, while Mister will continue working to support the family. I can spend more time with my little Mochi. I can read more. I can go hiking and swimming more. I can pick up some new hobbies or even be a better cook!

My dream house! The Moomintroll house =) 

When I happily putting into an excel spreadsheet my liquid asset, mortgage details, rental income, expenses, etc., dreaming of my early retirement life, I started to get a sense of uneasiness...  I was so wrong to think I'm ready to retire in a few years!

What went wrong?
With a family of 3 plus nanny, it is not easy to live on rental income from one moderate house.  I am a planner. I love planning. I can't believe I never really planned for my own retirement!  I always think that my pay will keep rising. So why not consider that when I reach my top range salary? I also feel that I have been saving aggressively and making decent money. Why would I have to worry about retirement?

My heart is on FIRE
Excuses aside, I started to google "retire on rental income", "early retirement", "retirement planning mortgage rental". That is when I heard about passive income and found the whole community of "Financially Independent, Retiring Early" FIRE - all the things I should have learnt in the first few years in my career.

I start to question myself. For the love of math and finance, am I doing the right things required to achieve FIRE? Is FIRE something I want? If so, when? Why I never heard of the 1% rules before buying our two houses? Am I on track on the 50% saving rule? What are the passive income I could generate? How far am I from the 4% rule? I need to reconsider my options. Do I want to be a FIRE, FI but no RE, FIBRE? Or just work until I'm 65 years old?

All of a sudden, I get a new hobby of retirement planning, number crunching all night, and reading books on investments.   I subscribed to over fifty finance and property blogs. The more I read, the more I want to share. I want to tell people about my situation and hear what is their thought. I want to tell my family and friends to start and plan for their retirement! I want to tell my brother and sister to save up and purchase a house or two. I want to ask my friends how do they invest their nest egg.  I have so much to say that I'm texting on whatsapp all day with those who care to listen. I figured I might as well start a blog and say it all out =)



So this is how it all started. How about you? When did you get that moment of realisation to plan for your retirement?  Who inspired you to consider the option of FIRE?

I always liked the idea of having a courtyard instead of a backyard. Photo from my Seoul trip.