Monday, April 4, 2022

Escape Velocity of Wealth

I am not sure how to put it across, but the feeling that no matter how much my income increased over the years, I just don't feel that I got wealthier , or my purchasing power increased. Living in one of the most expensive and economically competitive city states in the world doesnt help either. The sick feeling that you just got a bump in earnings due to promotion, then everything that you wanted to buy seems to go up in prices alongside with your increased earning power. I known for a long term life is about bell-curving and just like investing one would need to beat the bellcurve to "feel rich" or in this case "escape velocity". FIRE is actually just escape velocity in terms of wealth/assets + income/FCF / basket of goods you want to spend on. 
I am just gonna pin my thought in point form and hopefully one day I managed to consolidate it into something more coherent (and with a plan) soon. 

Factors that would affect escape velocity of money .. in no particular order of significance / importance: 
  • Hard Asset: (existing assets, income per annum, current age)
  • Soft Asset: (family knowledge, individual skill / alpha, tenacity)
  • External factors: (workforce competition, foreign capital influx, capitalist environment, upward social mobility, pro-biz regulations) 
Escape Velocity defined as being 1) immune/hedge or even benefit from price fluctuations/inflations of goods & services in your personal basket. 2) yearly networth growth above global growth 3) without active income.

rough sense tells me that for year 2022 one would at least require SGD200,000 - SGD300,000 per annum to feel the compounding effects and still be able to live feeling "rich" or above median. But this is based on my POV as a peasant, it will be an evolving answer. 


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