I watched the press briefing on Singapore’s 13.2% GDP contraction yesterday. The contraction was worse than expected, and the trade minister looked tired and sombre. We only see what we can see, but there are many things going on that only he and his team are aware of.
He did not mince his words and he clearly said that this is not a temporary setback. The pandemic and closing of borders affects many of Singapore’s fundamental strengths. Many things will permanently change and die off. It will not be easy to pivot into new industries. The loss of jobs will affect retirement plans, and many of us would be forced to work longer than we have ever imagined.
Strangest Recession Ever
It does seem weird to be in worst recession ever, and still see restaurants and shops jam-packed now. Consumer spending seems to be holding up. I wonder how much of that is Singaporeans being complacent and sticking their heads in the sand.
I had harboured hopes that this would be over in a few months. But it seems like a generational crisis, far worse than the Asian Financial Crisis and Great Financial Crisis, which brought my family to our knees.
My parents were working in finance and subjected to the retrenchments of the time. We also had a big house, with two dogs and cars. It was painful to cut back.
Thank goodness my wife works in a stable job and we are both fairly insulated. Another factor for our relief was that we have modest household expenses and didn’t pile on consumer debt. Like many Singaporeans, we live in a 4 room flat, which attracts low maintenance fees and plenty of government rebates. Thanks to the rebates, I don’t need to pay for electricity and water for about 6 months.
We also own hardly any Singapore assets, other than our home and Singapore dollars.
But while I mostly have US and EU holdings, I have no wish to see Singapore deteriorate. My family and home are here, and will continue to be for the rest of my life. My son will serve his NS, like others of his country.
Sometimes I feel guilty and like I’m in a bubble. I still enjoy a good standard of living, while hundreds of thousands are being retrenched or have their jobs in peril.
Strive for Financial Independence
Situations like this is why financial independence is so important to reach as soon as possible. You don’t need to be afraid of losing your job, and can say no to bad environments and jobs. You have the space to breathe and move to what fits you.
But most of us upgrade our homes, cars, and lifestyle, becoming dependent on income ever coming in. Our possessions own us. When we earn more, somehow our expenses rise too. I’ve seen many that continue to work despite hating the job and their boss. But they bite their tongue and hang on because they can’t afford not to.
Most would consider it madness for me to leave my stable and well-paying job. I don’t think it’s an unreasonable position, and there were indeed many positives. But staying in a job you dislike and are taken advantage of is nothing more than a slow death.
I hope others keep their expenses in line, and their families safe.