MBA or not & Secondary School Gatherings in 2017

January is the month to have gatherings with friends and family. I was talking to one of my close Secondary School friends and he seems to be at a crossroad in life. He is thinking to run his own business or take up a top MBA such as INSEAD.

I highlight to him that INSEAD is an one year full time MBA. The opportunity cost will be SGD 200k for course fees and say SGD 100k for his annual salary which is a total of SGD 300k. This amount if invested can make a modest 4% which is SGD 12k. This path will cost him a total of SGD 312k. Personally I feel that if he takes this amount of money to run a business, he can learn more than the MBA can offer and it stands a chance to improve his current financial position.

Yes, the benefits of a prestigious MBA are the network and the career path which can be opened up for him. There are also parties to attend and lots of fun time to have with fellow classmates. MBA helps me to have the ability to look at the company holistically and externally such as competitors' analysis. 

Today there is another class gathering and one of the classmate is working as a senior RM. He claims that everybody is a millionaire once they sell their house. This is not a true definition of a millionaire. That is an assumption that there is another person willing to buy at a higher price from you and you do not need to deploy the money to buy another house to stay in. I am very blessed that we manage to slightly cross the 7 digits net worth in 2016 (at age 34) with half of my house paid for and the remaining fully invested in stocks. There is still SGD 305k of mortgage loan outstanding. So if you net that off assume we need to pay down the debt then we won't be considered as a millionaire. I have friends who become self-made millionaire before they turn 30. If you want to be like them, you need to take the self employment route.

I look at my friends, most of them have nice big cars, stay in condominiums and have very nice lifestyles such as holidays. I paused for a while and question myself whether this is like a scene when I was at a primary school gathering back in secondary school days when I am the odd one out and all my primary school classmates are from prestigious secondary school. They did not have much to say to me back then. I shook that thought off. Firstly, I do not need to compare anymore, I do not need to prove myself to anyone. Everyone has their own path. What I believe is in cash flow. That is the true gauge of wealth. I will rather gauge by when the person can retire and become financially free.

My definition of financially free is 

"Cashflow Flow (passive) - Expenses - Debt expenses > 0 ".

My current plan is for my wife to retire in another 5 years time and by 2021 I will have a dividend income of about SGD 100k per annum. I will love to enjoy expensive toys but what I value more is freedom and time with family.