One of the most forwarding moments in 2021, happened in December.
A brainstorming session on new ideas to serve our clients better, resulted in an intense discussion about the shifting mindset and lifestyle of clients. In fact, in the past few years, our planning methodology had also undergone major changes to cater for those needs. Feedback from our clients were overwhelmingly positive.
I can still remember vividly, that conversation with my working partners.
“Too many consultants and clients out there are trapped in the conventional planning approach, especially for their retirement. It’s sad that there are so many others stuck with plans that don’t suit them.”
“Just because it made sense in the past, doesn’t it will continue to be so. Like, I don’t want to retire at 65. I don’t want to retire at all! I just want to enjoy life along the way, and I know a lot of my clients feel the same."
“Many of my clients like the FIRE movement, but they are not prepared to live such a minimalist lifestyle."
“Actually… FIRE movement is simple, catchy, and people generally knows what it is. But what we do for clients is more than just FIRE." I stared at the glass of water I was holding. "What if we call it WATER?” Everybody laughed. I had initially meant for it to be a joke.
“Wealth Accumulation Towards Every Retirement” I continued.
There was a short silence, followed by brightness on their faces
“WOW! Let's work with that!” my teammate exclaimed.
And just like that, the idea of W.A.T.E.R.™ was born. Everything clicked in that moment. We consolidated the improvements in our planning philosophy over the years, into a simple, all-encompassing concept.
It seemed like an aha moment then but as I dived deeper into it, I realised that the idea had been brewing in my head for some time now.
In the first 7 years of my career, bar a short graduation trip to Hong Kong, it was all work and little play. There were no holidays and few indulgences - every dollar I made was put towards either my business or saved up for long-term goals. That might seem laughable to the current generation, but back then, like many of my peers, the idea was to work hard now so that I can have fun during my retirement, 20-30 years down the road. Delayed gratification was the name of the game.
I was never a big fan of the FIRE movement, because I don’t have the ‘push-side’ motivation to escape from the rat race. My industriousness was a result of my desire to provide a better life for my family, not because I hate my work. Despite my personal aversion, I can see why FIRE appeals to so many. With intense competition and financial expectations, many are experiencing dissonance with their daily grind at work and would rather free themselves from these work pressures as soon as possible. Work burnout is real.
The past 2 Covid-ridden years have exacerbated this discontent. Strict work-from-office arrangements as well as the challenges of working from home triggered many to rethink their priorities. In the past, pay, progression and prestige were the key considerations for choosing a career. Most fresh graduates jump at the opportunity to slog away their prime working years in prestigious industries such as consulting and banking. The sacrifice was seen as a necessary evil to bootstrap advancement up the corporate ladder. The end goal? To earn the big bucks and that corner office with a view.
Nowadays, we’re seeing other criteria jump up the ranks. Flexible working arrangements, company culture, and meaningful work to name a few. This shift in career priority has, in turn, a huge effect on the way we plan for retirement. No matter your industry, chances are, your work has a significant influence on your lifestyle as it provides the money (or part of it), limits your time, and influences your clarity of purpose. In my opinion, the 3 key pillars of retirement.
In a related trend, there’s also been more emphasis on mental health. In the past couple of years, I’ve seen many of my friends suffered mentally and emotionally, due to the workplace factors. To share some examples, one friend had to work till 11pm on his wedding eve while another had to face constant verbal barrages from her superiors. At some point, they decided that enough is enough, and left their jobs in favour of their mental health. Instead of blindly climbing that corporate ladder, they chose to commit their time towards their family, friends, and personal interests and hobbies - activities that correlates to our ideal retirement lifestyle.
Companies are also wising up to the new normal. Many are tapping on the growing legion of ‘temporary’ workers through short-term contracts rather than traditional long-term employment. Competition for jobs is also more global than local now. While the most talented have no issues moving from one opportunity to another (in fact they can take their pick of the best global option), others may struggle to tie down a stable job. The idea of an iron-rice bowl is increasingly becoming just that, an idea. This lack of certainty has increased the money-related anxiety in the working class. As a result, cash liquidity becomes a key planning component when it comes to financial planning.
All these changes in career and life priorities fly against the conventional way of retirement planning.
As such, financial consultants must adjust to the new paradigm. Retirement planning is no longer a simple financial equation where one maximises returns to achieve the highest retirement sum at the statutory age of 65. Nor is it simply accelerating the process so that you can retire 10-15 years earlier. Money is now part of the equation rather than the whole story. Previously held assumptions are being challenged at every new client engagement, because everyone has their own version of retirement and financial freedom. The onus is now on the financial consultants to really understand and listen beyond their clients’ needs and explore their wants as well. With a clear financial roadmap and a sound game plan to grow their wealth in support their goals, clients would then have more clarity, time and money to live their lives the way they desire.
Conventional retirement planning is now replaced by a dynamic retirement planning approach that caters to individual needs. Whether you want to retire as early as possible, experience mini retirements along the way, or even take your time to build your retirement nest egg without over-stressing yourself, your unique retirement roadmap must be able to cater to your priorities.
This is where W.A.T.E.R.™ comes in.
W.A.T.E.R.™ is simply, Wealth Accumulation Towards Every Retirement. We believe there is a better way to plan for our retirement. We are unsatisfied with the conventional way of financial planning because it is more than just about managing the dollars and cents. How we manage our finances, how we view money, is deeply connected to other aspects of our lives.
Hence, we seek to explore and provide perspectives on work, retirement, and life. We want to be on this learning journey together with anyone who believes in what we believe in, to gain clarity, find time, grow money, and ultimately, achieve the freedom we desire.
(Follow us on @the_watermovement if you too, believe in a better way of retirement planning)
Everyone deserves to have their version of retirement and life. For me, it comes down to having the courage to live the life that I want, enjoying my freedom today while being assured that my future is secured. It’s about being unconventionally anchored, striking that balance between going full YOLO (You only live once) to enjoy life now, and embracing time-tested values such as delayed gratification and financial prudence. Many of our parents did not have this luxury of choice, having worked their socks off to steward the future for their families. I believe we can build on their sacrifices to prepare the next generation for their life and retirement planning. How we lead our lives now, in preparation for the future, will be the best guide for them. I believe my unique journey in life has brought me here, and my W.A.T.E.R.™ journey will chart my voyage moving forward.
Edmund Xu is an Advisory Director representing finexis advisory Pte Ltd.
This article contains only his personal views and opinions and is for informational purposes only. The information provided is of a general nature only and does not take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual needs and should not be relied upon as financial advice. You should seek advice from your financial consultant before making any financial decisions.
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