(1) It seems few jobs are secure these days
Today there are all these talk about AI taking over jobs, and indeed some companies have now invested in AI tech to replace their marketing agencies. Designers at the bottom of the ladder will be replaced as AI is now able to create beautiful artwork in less than 2 minutes. In fact, all artworks you see on this website were generated using AI. 5 years later, what new trend is going to take over jobs? For example, US have started to experiment successfully with driverless trucks! What other shaky jobs will be knocked out like a bowling pin?
Just this year alone, right now, unemployment is at 3.1% for us, and 2.9% for foreigners. Google, Microsoft and Meta has laid off many people. The Straits Times reports that major banks are looking to cut 200,000 jobs in the next 3-5 years as AI becomes more useful (1). Standard Chartered has already cut some jobs and relocated those jobs to India. Panasonic, Siemens, Nissan, Volvo, Proctor & Gamble and Nike are among the big names to cut staffs this year. As you can see, it is not just the tech sector.
The re-entry rate for the retrenched is 61.5% – 2 out of 5 of us could not get jobs after retrenchment!
It seems that the only secure jobs now are the oldest jobs – food, clothing and building. This is the top reasons why Singaporeans above 40 need to invest aggressively in order to have some sort of decent future. Because who is going to guarantee your job? Nobody. Especially with our “open” culture where everyone is welcome to take the same job. Do something now, while you have a job this month and next.
(2) The costs will only keep rising
Do you remember when we had 3% GST ? That was in 2002, 20 odd years ago. Today it is 9%. 3 times more. What GST do you think you will have to pay in your retirement age? I don’t want to guess but I sure want to be prepared for it now. And with GST rising, all other costs will follow. It has happened and will happen again, with some new justifications in the future, probably crafted with ChatGPT.
(3) You have less time horizon for investment returns
Someone who have started investing at 24 have a 16-year headstart on you. This person will come into a huge sum of money once his first investment bears fruit, which is typically about 15 years, before he reaches 40! Such a savvy person would have additional investment plans along the way too, with a huge cash out planned every 5 years.
But if you are above 40, and you have hardly started, you need to be more aggressive. Assuming you are 45, and you commit to a plan today, the earliest you can hope for a large sum payout is when you are 60. The good news is there are plans which mature in just 1o years, and we can recommend them to you. Let us be clear here: “aggressive” refers only to the investment amount, not the investment method! Stay away from people claiming to give high returns or some new crypto coin nonsense! Allow me to be more blunt – if you see an ad on youtube, it is probably shady at best. Invest aggressively into safe, well-performing funds with a track record of good returns.
(4) It is harder to get a job at 50
If you lost your job at 30, it is no big deal. At 50, you would go into panic mode. First, your spouse expects you to carry the equal weight of marriage financially. Second, your kids, if any, is not at working age yet (24 for boys, 22 for girls) and still look to you for their expenses. Third, there is someone younger or foreign who will be very happy to take your next job for a salary far less than yours. How are you going to compete? What are you going to fall back on? What happens if your spouse gets retrenched too?
If you have a proper investment plan, at the very least, you could withdraw partially to prepare for 6-12 months of unemployment while you actively looking for a job, and upskill or reskill at the same time. It would be a dark period, but it is not the end.
Those who start today
Look, it is a practical world (or as we Singaporeans call it, pragmatic). If your future is not in your own hands, it is in someone else’s. And they won’t care for you. If you are scrapping the bottom of the barrel, the only people concerned for you will be you, your family and your friends. You got to look out for yourself. That is why now while you have a job and an income, you must invest aggressively to secure a reasonably comfortable future. If you have to flip burgers in your 70’s , let it happen because you want to, not because you are forced to!
Don’t know where to start? Shoot us an email at secondtimesgp@gmail.com and we will refer to you a MAS-approved financial advisor.
