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Sunday, July 14, 2013

Money matters... but only to a point

Published on Jul 14, 2013
Those most worthy of admiration are ones who have made best use of their advantages

By Goh Eng Yeow Senior Correspondent

Few people here talk about the five Cs any more.

Once seen as the Singapore dream, these five rungs on the ladder of wealth were the ultimate goal of many young Singaporeans.

The belief was that if one could accumulate the five Cs - a pile of cash, credit cards, a car, a condo and a club membership - then life would be a fairy tale come true.

Whether or not money can indeed buy a dream life, the cold hard facts have now made this aspiration all but unattainable.

In recent years, even securing a university degree and landing a good job is no guaranteed pathway to getting all the five Cs.

Owning a new car can set you back by $100,000 or more, while even a modest condo unit will cost more than $1 million.

As for credit cards, plenty here enjoying the good life have learnt the hard way that spending must go hand in hand with the ability to repay. Fail to do so, and credit card firms will come after you with gusto - and your credit rating will take a nasty hit.

And nowadays, securing a coveted job is tough going. Last year, an eye-popping 7,000 applications were made for 60 places in two programmes at DBS Bank.

Even cash - perhaps the most achievable of the five Cs - can be quite a tall order for many.
I sympathise with the friend quoted in this paper by my colleague Jonathan Kwok. He lamented that he would never get rich based on today's salaries and cost of living.

Many young people see saving $100,000 as nearly impossible, let alone becoming a millionaire - unless they have rich parents.

But I am hopeful that despite sky-high car and condo prices, which put at least two of the Cs out of the reach of today's graduates, life will still work out all right for them in the end.

United States Federal Reserve boss Ben Bernanke summed it up best when he remarked on the unpredictability of life during his speech to fresh Princeton University graduates earlier this year.

He said: "Talk to any alumnus participating in his or her 25th, or 30th, or 40th reunion. Ask them, back when they were graduating 25, 30 or 40 years ago, where they expected to be today. I am willing to bet, those life stories will in almost all cases be quite different, in large and small ways, from what they expected when they started out."

But he noted that just because our lives are so influenced by chance and seemingly small decisions and actions, this does not mean that there is no point in making any plans at all in our lives.

"Whatever life may have in store for you, each of you has a grand, lifelong project, and that is the development of yourself as a human being… If you are not happy with yourself, even the loftiest achievements won't bring you much satisfaction," he said.

But it is on the thorny issue of money, which all of us must grapple with, that I find Mr Bernanke's observations extremely insightful.

He said: "I am not going to tell you that money doesn't matter because you wouldn't believe me anyway. In fact, for too many people around the world, money is literally a life-or-death proposition.
"But if you are part of the smart minority with the ability to choose, remember money is a means, not an end."

And his advice to today's graduates starting out in life is to not just take the best-paying job that comes along.

"A career decision based only on money and not on love of the work or a desire to make a difference is a recipe for unhappiness," he said.

Of course, a cynical observer will say that it is easy for Mr Bernanke to say this as life has panned out okay for him. He has transformed himself from a college professor into one of the most powerful men in the financial world with the power to move financial markets with his utterances.

But in a lesser way, his comments have held true for me as well. I recall that as fresh graduates, many in my cohort expressed similar misgivings about getting ahead in life financially, given the uncertain career prospects which they then faced.

Most of us had started working during the 1985 recession when the pay of fresh accountancy graduates sank to as little as $800 a month. In my case, I had graduated with a physics degree and thought that I would end up as a teacher for good. But I stumbled onto financial journalism and ended up covering the ups and downs of the stock market for most of my working life.

As I get older and hopefully wiser, I have come to realise that it is not the five Cs which are most important but my family, my friends and what I can make out of life.

To quote Mr Bernanke once more, I find that those most worthy of admiration are those who have made the best use of their advantages or cope most courageously with their adversities.

As he noted: "Most of us would agree that people who have, say, little formal schooling but labour honestly and diligently to help feed, clothe and educate their families are deserving of greater respect - and help if necessary - than many people who are superficially more successful. They are also more fun to have a beer with."

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