‘Want To Be Financially Free? Start Planning For Retirement As Soon As You Start Work’

We’ve all dreamt of it at some point during mind-bogglingly dull meetings. A small cottage by the beach, a stack of dusty old books on a yellow sundeck, the worry of a monthly paycheck gone forever.

A gentle tap on your shoulder from a well-meaning colleague or a sharp question from the boss might have brought that daydream to a sad end. 

We’ve wondered if we could retire early, ditch the rat race, and live happily ever after on passive income. Only a few of us are, however, brave and determined enough to turn that dream into a reality.

Like Morten Strange, a Danish-born financial analyst and author who married a Singaporean and has called Singapore home for the last 30 years. 

His journey of early retirement at the age of 33 is incredible and inspiring at once. Morten shared his story with us at his quaint home in Sembawang, which houses his many books on nature and finance, curios from around the world from his travels, and precious hand-me-downs from his family back in Denmark.

Being salary independent wasn’t just a thought, it was a process and a goal for Morten – one that he achieved with sheer hard work, determination, and a conscious lifestyle choice. So, we asked him to tell us all about it and how to go about achieving it.

Excerpts from the interview:

Q: Could you explain the concept of being salary independent?

A: Financial independence is not a binary choice – it is a mindset and a lifestyle. The journey begins as soon as you start making some money. You must have the urge to hold on to it, to make it grow and to resist pressures from peers, and from the advertising industry to spend it right away on things you can very well do without. 

Once you start accumulating savings, you must invest most of your funds for the long term. 

There are three stages of financial freedom: 

Stage 1: When you have 1-2 years of spending squirreled away, you have some ‘I quit’ money: this will allow you to take a break and move to another place or find a more rewarding job.

Stage 2: As you build up your savings from that, you become salary independent. You could probably live off your passive income, but you look at the numbers, what if markets crash, you are not quite there yet, so you keep on working and saving for a few more years.

Stage 3: Finally, you calculate that you are financially free and you don’t really ever have to work for a boss again.

You need to plan for your retirement as soon as you start to work. If you save half the money you make, you only have to work half your life – it is really that simple. You can work less than that, if you manage to make your savings and your investments grow along the way. For that to happen, you have to immediately develop the discipline to save and to acquire a level of financial literacy skills.

Q: How does this help one make an income?

A: Try it. You will find that you cannot sit on your hands for long! Develop a passion and get into volunteering:  you will most likely find that if you really produce a product or a service of value, people are willing to pay for it. Maybe you can make jewellery, or you can code or design websites for friends or teach them digital photography. 

You are in the gig economy. If some jobs pay, that’s great, if some don’t, that’s fine too – you just do what you love! My wife operates like that. She has some passive investment and rental income and she spends most of her time doing animal surveys, trips, trading and events. She is not a zoologist but she does what she loves. Sometimes she gets paid for projects, sometimes not – she manages either way.           

Q: You’ve been salary independent for over 30 years. How did you keep busy?

A: I always did something, but I never really felt like I worked. When I was young and applied for a job, I never asked how much it paid, I just did what I wanted to do. For a young man, working on the oil rigs is an adventure. Later, I travelled around South-east Asia photographing birds in remote rainforest, that was an adventure too – and miraculously, people paid me to do it! Today, I analyse financial events and write and meet people, but I don’t charge for anything I do.

I tell my kids and any young people who want to listen that they should enjoy life. Enjoying life can also mean working, of course. Look around you at all the people who have made a difference in the world and, yes, some even got rich in the process: they always enjoyed life! Ted Turner, Elon Musk, Warren Buffett – the list goes on and on. They had a passion and worked their butts off, but it didn’t seem like work to them, they just did what they loved. So find what you love to do and you will never have to work a day in your life.     

Q: What are the pros and cons of salary independence that no one talks about?

A: If financial freedom is really important to you, you might have to make some hard choices. One, I have mentioned, is your consumption pattern: you have to delay gratification. More simply put, you have to be a bit stingy! Another one might be your family situation. If you have kids in your early 20s, that might set you back. Having  children takes up a lot of energy and time and money out of your life. I only started having children (I have 4 sons) after I retired. Some people only have one child or none at all. I realise that this is a very personal choice you make. I can just tell you that there is a price to pay if you marry and have several children early in life.   

Q: You talk about it in your book, Be Financially Free, a fair bit. Do you see things any differently now from the time you wrote it?

A: I guess I was a bit ahead of my time back in the 1980s. It might sound like somewhat of a paradox, but I think it helps to have a somewhat pessimistic view of the world. Personally, I never got carried away by the notion that tomorrow will always be better, so just spend and borrow now because next year, you can pay it all back. So I never borrowed and I saved for harder times ahead, and fairly quickly, I realised that I didn’t really have to work any longer! 

Today, it is different. We have an economy of surpluses: too much productive capacity, too much capital and too much labour. Therefore, interest rates are near zero, the risk free rate in SGD such as Singapore Savings Bonds are 2.6% per annum. But that doesn’t mean  you cannot get a return on capital; it just means that you have to take on more risk.    

Q: How achievable is being financially free for millennials in Singapore today?

A: I established my financial freedom back in the 1970s and 1980s, and conditions are somewhat different today. For one thing, the extremely low interest rate environment we are having globally today makes it more difficult to generate a return on capital. I fear that going forward, the surpluses in the economy will come home to roost.

In general, we have too much of everything, at least everything that is man-made. Too much stuff, too many products, too much labour, too much capital, too much debt. That puts pressure on prices and productivity in the economy, which in turn reflects on lower salaries and returns on investments. These factors will make it more difficult for millennials to retire early.

However, there are also factors operating in favour of young people today. Some goods and services  we paid a lot for a few decades ago are much cheaper today, such as consumer products like T-shirts and computers. Some are virtually free, for instance, information, entertainment and overseas telephone calls. 

In general, here in Singapore at least, the older generations are getting better and better off. The pioneer generation (those now in their 70-80s) had a tough life; many are still poor, and in general, the middle-aged generation has to support their parents. This will change. 

Millennials will not have to support their parents who are in their 50-60s today. Those people have good jobs, CPF savings, probably own their own home. My Singaporean wife had to support her mother for years till she died – our son will not have to support my wife and I for one day. In fact, we might even leave him a bit of money when we pass away; that will make his life somewhat easier.

Read these next:
Singapore-based Author and Financial Analyst Retired At 33… Here’s How He Did It
3 Myths About Retirement Planning in Singapore (And Why They’re Wrong)
How Much Do You Need To Retire in Singapore?
Retirement Age: What’s The “Correct” Age to Retire in Singapore?