Path of Financial Independence


This article is a personal reflection of Kyith’s article (read it here) which is “How much do you need for financial independence”.

1. Find Out Why You Should Embark on This Parth

Our life is a tale of two halves.
1st half is where you create financial security or stability.
2nd half is for me to pursue my purpose in life. What I believe in and what I can do to make this world a better place through the work I do.

I do know why I need to have financial security because I am very blessed (lucky) to have a high income for over a decade. However, the industry is volatile, since the year 2017 I have been changing my job every single damn year. This is not like in the past when you are strategically job-hopping to get a 10-30% increment. It is a dying industry in Singapore that forces me out of job on a yearly basis. In 2020, I am forced to move out of my comfort zone and try to hang on to my new role in Malaysia. My wife’s side as well, her firm’s CEO mentioned that their jobs are still intact for this year, It is an uncertain period for the family and I want to build up financial security.

2. Work Out Your Current Withdrawal Rate

I need to work out the withdrawal rate.

Initial Withdrawal Rate = Annual Expense/ Aggregate Wealth

Aggregate Wealth (Estimation) = S$2,100,000 – S$760,000 (property book value) = S$1,340,000
Annual Expenses (5 years average) = S$75,000
Initial Withdrawal Rate = 75/1340 = 5.6%

Breaking down the Annual Expenses:
1. Desire lifestyle – I hope to stay in Airbnb in a few countries when the children are older and I can spend 2-3 months or maybe longer in different places to experience lifestyle and culture.
2. Core Expenses – The last 2 months help me to understand what are my core expenses, it is estimated at S$2,000/month.
3. A particular expense – My only hobby is $100-200/month on books. I want to pick up RPG like D&D again. I was introduced to RPG AD&D since young by my late uncle.

3. Track Your Current Withdrawal Rate Over Time

This is an on-going process to figure out:
1. Annual Expense for that year
2. Aggregate Wealth for that year

4. Live Life but Do Your Best in Pursuit of Financial Independence

From Christopher Tan’s book “Money Wisdom” has reminded me one important thing, live a well-balanced life because you do not know what sort of card life will deal you with. It is important to save for rainy days but what if you hoard so much but cannot get to enjoy it and you die young from some dread diseases or virus.

I will need to increase my skill sets and stay abreast to increase my human capital. I find satisfaction and meaning from the work I am doing.

5. Try Your Best to Reduce Current Withdrawal Rate

If I can bring my withdrawal rate lower and continue with my role for the next 2 years, the wealth side of financial independence will become more secure. At present, I am at 5.6% and I aim to bring it to 4% in 2 years’ time. My ideal target is 3%.

The math looks like this, in year 2022: 75k / 2000k = 3.75%
Reduce the expenses to 60k = 60k / 2000k = 3%

If by grace, the paper losses 300-400k from the portfolio can be reinstated, I sell the present house and downgrade to BTO HDB house, releasing the monies and add them into Aggregate Wealth, I have more than enough.


Life is uncertain, live life, exercise, do your work well, and stay invested. I think I will be financially free by 40 years old. As I said, everything is uncertain. The 2nd part of my life will be dedicated to new things, I may want to go into health care. Maybe I will become a nurse, maybe I will study occupational therapy or physiotherapy to help more people. I just need to have an income and CPF contribution to continue with a meaningful life. I look forward to the year 2022.


  1. Hi Jason, thanks for sharing and going through that exercise. When I see your core expenses, I am pretty glad because it does show that with your wealth at least you can be financially secure. I do caution for you to check if you included those annual items that is essential but you just have not paid for it yet. if that is accounted in, at least you know that if you get no work you could still survive.

    i have the feeling you have not included the mortgage, so that is something to think about. but overall hitting 5.6% is pretty good.

    there is one thing to remember: if you have quite a decent withdrawal rate when your portfolio is down like 20-30% (correct me if i am wrong), then the chances of success that 5.6% would work for you is higher.

    If its 4 months ago this 5.6% might be 3.2%. It is like if you retire 4 months ago you are spending an initial 3.2% of your aggregate wealth. pretty ok if you ask me.

    i do wonder if your 2 mil includes a residential property value. if it does, maybe you would need to go through that exercise of looking at what you could downgrade to and whether you get any net equity out of that.

    for the 75,000 average expenses, i think you need to understand the spirit behind that. you are figuring out how much you wish to spend on your desired could be airbnb, but in a local context has things changed? if it does then maybe it is not 75,000 any more. use the future figure to work out.

    • Afternoon Kyith,

      You are right on the Core Expenses, it should add $500/month more for Healthcare Insurance – Integrated Shield Plans and Life Insurance.

      Mortgage – we took the decision to pay off the HDB because my wife wants to have a roof in case I lose all the investments. This is not the best asset allocation method but it gives the family a peace of mind which is the most important factor.

      Yes, I am trying to unlock the equity value of the property, downgrade to something the family is comfortable with and invest the amount. Again, this needs to be discussed with the other half, I think I need to assure my wife that I will continue to work and use my CPF to pay off the future BTO. I am happy to do that and find a meaningful job.

      For the desired lifestyle and future expense, this is something that I am trying to gauge. I don’t drive and I cut down on eating out. The few key variables are increasing education cost such as tuition fees for children, increasing health care cost for us and our parents/in-laws, I am not sure whether we will enter an age of hyperinflation. If there’s hyperinflation, whatever I have planned will be beyond my control. I will do another forecast for health care and education. These will be big-ticket items.

      Stay healthy and safe my friend!

      Well wishes,

      • Hi Jason, you are right if it is hyperinflation a lot of things are out of your control. I think even if you add another 500 to your core expenses it is still pretty good. can i find out if you have paid off the loans what is that $760,000? is that a residential asset value? if that is the case it is pretty good.

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