During the last couple of days, I visited the house of one my very wealthy clients. He bought a waterfront bungalow at Sentosa Cove and invited me and my family over for a house warming/ Chinese New Year get-to together. I must say that the bungalows there are really beautiful and amazing but I think its crazy to pay $1,300 per square foot for a 99-year leasehold property. My friend purchased a 12,000 square foot house (with a berth and yaucht attached) for a cool $14 million +. This friend of mine makes his millions as the head of investment for a financial MNC powerhouse. He makes hundreds of millions of dollars for his company, so I guess paying him a $5m annual bonus is no big deal to them.
What I found even more amazing was that there were four luxurious cars in the driveway. He drove a black Lamborghini and bought his five a BMW 7-series. When I asked what the other two cars were for, he said that he bought his 21-year old son (studying engineering in NUS) a Mercedes Benz S-Class and his 19-year old daughter (studying in a local poly) a BMW 5-series. After chatting with him for a while, I found out that his two kids carried thousand dollar handphones and would not be caught dead eating at hawker centres. At first, I thought that his kids were damn lucky to be born in such a rich family and to have such a generous father.
However, after chatting with my wife on the way back and thinking about it for a while, it dawned on me that the two kids were in fact damn sway (colloquial term for ‘unlucky’) as their dad had just set them up for a life of debt and misery. First of all, it costs about $3,500+ a month to maintain those cars (petrol + insurance + roadtax + install) and each time you send it in for repairs, the bill will easily come to $3000-$4000. Because of the lifestyle they are used to, they will only feel comfortable spending $30+ on a meal at a restaurant.
Now, the dad does not own his own business. He just happens to work for an MNC, so he certainly cannot pass his job and his huge income to his two kids. And he certainly is not going to give them an allowance after they graduate, find a job and get married. At the rate the father is spending his money, his dough won’t last very long past his retirement.
So, his kids will have to graduate and find a job like anyone else. When they get a first job, how much can they get paid? Even if he has an honors degree from NUS, the most he can hope to get is $2,500/month. With a diploma, his sis can probably only get a job for $1,800. Once they drive that BM or that S-Class, do you think they will ever drive a Toyota? Unlikely. So they will probably use up their entire salary just to pay to maintain their cars (which is a liability by the way) and run up their credit cards to the max just to finance their restaurant meals, handphone meals and Prada/ Hugo Boss fashion wear. Before they reach 25, my prediction is that they will probably be heavily in debt and untterly misrable. So on second thoughts, I think they are really unlucky… What do you think?
Hi Adam,
I believe that the father may be inadvertently spoiling his children by providing them with the things that he did not have when he was younger.
On the other hand the children are being treated to luxuries that will open their eyes to the potential possibilities that could become their very own life style.
I know having had children myself that all parents want the best for their kids, but sometimes the imparting of wisdom is not always adhered to I know when I was in my forties I finally thought that my mom and dad gave some very good advise. It still took a lot of years for it to sink in. Sometimes life gets in the way.
Who are we to judge the future of our children and other’s children due to the limited vision of our own beliefs. I wish your clients children well and hope that they come into their future shining like the midday sun.
Hi Adam,
Yes that isn’t a sustainable lifestyle. If I had that much money I’d invest it, so that 30 years on I’d have something to live on! Not on a car or handphone that devalues and turns rusty overtime.
Cheers!
You Jun
Hi Adam,
I do truly agree that what the dad has done is instead of helping the his children, he is effectively ruining his children’s future. Guess if you have been eating Kobe beef from young, you won’t think of eating hamburgers no matter what!
However, the flip side is, we may not know if the dad has been instilling in his children the key prinicples of how to be rich and stay rich. At the same time, he could probably have set aside lots of fund for his children future (which may not last that long anyway at the rate their are spending their $$$).
Guess the funny thing is alot of Singaporeans would love to be in the children’s shoes. Like what some would say, better to have drove a Mercedes or a BMW once than never in your life!
Some of your readers may think this way too, but it is definitely not for me.
Cheers!
Adam,
Well looking at the other side of it, I wouldn’t mind spending 1 million per year for having a good time with your family while you are alive, if you are making 100 million per year and investing it in high return, low risk places.
Of coz, one would rather simply save an extra million into those places but then, would you like living in a flat at the 15th storey when you can afford a bungalow in Singapore .Using public transport with those pushing and shoving passangers making you feel damn uncomfortable.
If its for a good reason, then why not?
Prince
Hi Adam,
There’s alway two sides to a coin,i feel. Since they had always been in touch with such a huge sum of money and lavish lifestyle and they could no longer settle for less. It might be a good Thing!
It’s already in their belief system that it was possible to make that kind of money in this life time.If they wanted to substain their lifestyle,they would find ways and mean to achieve that kind of status and generate that kind of wealth.
While for people like me, “middle-class” we still wonder how it feels to have a million dollar or to sit in a bmw series of our own. its not even reality.When we look out for inspiration, our parents are faithful but ordinary folks. They do not have the rich mind set thus i will never learn to get rich but they would tell me to ‘work hard’.
But for these kids,they get to hang out with the richer people.Hopefully they learn a thing or two about wealth. But again,
if they take their life for granted then too bad.
I hope i made sense.
Well, the perception of individuals differ.I would rather say that maybe their father believes in cultiavting the idea of rich man thinking life syle into his children.Who Knows!
Its good that you give your children the best of life but at thesame time, one should be careful what you teach and pass down to your children as they will be forced to live a borrowed life of riches and stardom; which is transient.
My recommendation: Even if the father fails to lecture the children the acts of making and living a less superficial life, he could have at least use the fund used in amassing cars for the children for investments acquisitions in the name of the children that would generate additional income rather than that which will be incurring more cost.
I wish him the best all thesame as life is lovingly beautiful yet urgly if one fails to manage it properly.
They would be very lucky because they will have the opportunity to see and experience a level of wealth that most people can never even hope to sniff. Not all recurring income has to be generated via a business. With sufficient wealth, there are enough private bankers out there to help you make your money grow. In fact, since the dad has to be financially very savvy, I’m sure he has the contacts and the knowledge to ensure that his children will not have to suffer a 2500 monthly salary. I have friends who come from ridiculously wealthy families, and because they mix with peers who are also rich, they become motivated in finding ways to generate even more wealth. Fortunately for them, they have easy access to invaluable information that will not be shared with the general public.
To say that the children are sway is, in my opinion, a narrow-minded view because the opportunities to tap unto their father’s expertise are so easily available to them. It would be sad, however, if the children turn a blind eye to what the dad has to offer. But that’s a different story altogether.
Not that many people are that lucky, you know! I wouldn’t fault the children. The father should have taught them the value of money at an early age. Maybe he should’ve shown them how he makes his millions! I believe that if you don’t value your millions, you’ll end with cents pretty fast!
Regards.
Haha Adam, if this is your client, he sure didnt commit your teachings to memory by indulging his kids this way! They probably need a lesson or two on instant gratification as oppose to delayed gratification that you so often talk about!
I certainly agree that if a parent really want to groom their kids to survive in this society, they need to give them less and create a hunger in them so they’d have a fighting spirit in them! 🙂 Thats what they call tough love!
Too bad, they have a “poor dad”. How much can they sustain their lifestyle if dad become disabled, etc not able to work for this type of MNC anymore? As you said, the kids are conditioned for such lifestyle and a lifestyle of debt and misery… terrible dad indeed…
Hi Adam,
I’m giving tis friend of yours the benefit of doubts !!
If he is only earning a single-income from this MNC, then he is NOT super rich as claimed. And if he is NOT super-rich, but spending like one, then that makes him the biggest IDIOT in whole of Spore.
So, my assumption is, this guy makes hell of a lot from other sources of income. The salary is probably just 10% of total income. He probably has some ‘passive’ income that can be inherited to his kids. Thus, he ain’t worried his kids cannot support current lifestyle.
Cheers.
Hi Adam,
They splurged their money on exotic cars and nice home..in the end they have to let the government’s needle penetrate through their arms and let blood flow to the government..pay loads of taxes and so on..u should teach them what are assets and liabilities in order not to be in the rat race..it should be MONEY IN not MONEY out..
Hi you all,
Great lessons imparted. Adam thinks like a rich man. He will be in Forbes magazine very soon. Hey you all, I invite you to come to my company website at http://expresslearner.com/. Lots of great stuff on offer. See you there!
Cheers
yo guys …. the dad’s is a investor .. ok let’s just wake up before we speak ……….
those kids ought to be taught about how to invest and given the money to do so. the father should willingly also give his kids for empowerment purposes to provide for their future and not just cater for thier current needs. you did not say if your friend has any investments or not, i would harzad that he has because that is the most sensible thing by anyone. also how do you know if he is not teaching them about financial inteligence right now? maybe they are way ahead and knowledgeable about money making traits! maybe you should get closer to your “friend” and honestly get finer details and the whole truth regarding his family’s finances.
Hello Adam,
I think they are damm lucky person! “If” they know how to save their money & start invest. Basically their initial capital are much bigger than normal people say $5000 initial investment for normal person.
Hi Adam,
Glad to read this post cos you are an influential person and your blog is read by many, so I hope that people (esp those guilty of this lifestyle) read this post and learn from it.
A majority of the younger generation now is quite terrible in terms of their spending. (I’m in my early 20s, and I admit I am an impulsive & emotional shopper, but I do not go for branded stuff unless they go for dirt-cheap) They dine like no tomorrow; they buy branded goods all the time too. I cannot understand it when I see my friends carrying authentic Longchamp bags. A medium sized bag costs almost $200 now. Two of them even have multiple LC bags..that’s more than a thousand blown on bags that aren’t even special in design or quality. I can get a similar item for less than $20. >.< if they are earning ginormic bucks and living within their means, I think that is fine. However this is not the case.
Let me share with you a story..about myself and my bro, and my two cousins (they are brothers). My bro and myself do not receive that much in angbao $$, because it is my mum and not others who give a lot in angbaos. We do not keep our angbaos and will pass everything to my mum. Idk if she invests/saves it for us, or she uses it to off-set part of what she gives away, but this has taught me not to spend beyond my means…because whenever she lends me $ she’ll demand compound interest on it. She’s joking of course, because I will always insist on only paying her back the original sum…but I think this kind of drives home the point to me that I need to focus on getting rid of liabilities first – my mistake in the Millionaire game that I played in the WA May batch.
My bro and I receive the same upbringing..but our values are kind of different. He tends to covet branded stuff, while I don’t, ‘because his friends have it’. I am an impulsive buyer (also a bad thing), something I’m trying to change cos retail therapy does not make a person happy for long! So a person’s character and the friends he has is also important, not just the parents’ efforts.
My two cousins again, are v different. They both receive big amounts of angbao $$ and get to keep every single cent. However, one is a big spender, the other has lots of savings.