So yesterday I developed a financial model for my household. Lots of variables, lots of assumptions, which includes the number of kids, when do we plan to have more, education fee, insurance fee, inflation rate, interest rate, salary increment rate and frequency etc. If you are interested, I can share the template here using dummy variables.
It triggered me to do because I have a very calculative husband who thinks we shouldn’t spend so much now as we need to save for the future and thinks we need to invest more. He always computes some rough number in his head but to me, it’s good to see the numbers for real so that we are both equally comforted with our cash inflow and outflow, total assets, for the next 25 years (which is about the year I turn 60, i.e. official retirement year).
Anyway, after I’ve done the modelling and shared to my husband, we both realized that we do have excess cash to invest more. At the moment, we have unit trust investments, insurance-linked investments, a few properties and of course our defined contribution plan. But those are low-risk type of investments. Given the excess cash, we should invest in at least moderate-type of investments. But what struck us is, there are not many investment opportunities available for middle-income class like us. Property has always been the alternative choice of investment back in our parents days, but those days it is relatively affordable. You can get good houses for like 100-200k so your downpayment is minimal as compared to now where the price ranges from at least 800k? And the upside in value is limited. You’ve got to at least wait for the next 20 years until it reaches like 3m?
I guess at the end of the day, it depends on your target return. We are looking for investments which can give us at least 10% return p.a. and where the initial outlay is reasonable. Some say invest in art – reasonable investment cost (for our local artist paintings) and you can actually use it to decorate your house but it definitely takes more than 5 years before the value increases significantly. So buying is easy but selling is hard. Unless the artist dies earlier? Plus I think investing in art is more for people who can appreciate the exquisiteness in the painting itself. Not sure we are there yet.
So yeah, I think we need to create more investment opportunities for relatively young, middle-income class family like us. We need someone to revolutionize this industry.
Husband thinks we should just invest in bitcoin. I’m not too sure about that. I’m the type of person who needs to understand the asset you invest in. And I only have basic understanding of bitcoin. Oh well, we’ll see.
On another note, it’s Chinese New Year today. So, Gong Xi Fa Cai everyone. It’s the year of pig which means year of gold and good fortune!