When Singapore first became independent in 1965, our country had almost nothing – meager finances, no land space, supply shortage.
The country was not expected to survive.
Let alone succeed.
Over the years, Singapore has instead transformed itself into a developed country – one that is well recognised within Asia.
3 Financial Lessons We Can Learn From Our Nation’s Success
While many think that being rich is only possible if you are rich in the first place.
Singapore’s success is definitely THE example to prove them wrong.
Our nation’s gross domestic product (GDP) per capita has soared from just US$517 (S$697) in 1965 to US$65,233 (S$89,929) in 2019.
I have narrowed down 3 key reasons that led to Singapore’s success.
All of which we can all draw lessons from and apply them to our own personal finances.
1. Globalisation → Diversification of Income
As of 1965, there was a huge lack of infrastructure, sanitation needs, water supply, and most importantly, a lack of natural resources.
In other words, Singapore was unable to be self-sustaining.
Instead of trying to rely only on our internal consumption, Singapore diversified its revenue source by tapping onto globalisation.
Specifically, Singapore created an attractive environment for international business, characterized by safety, free of corruption, and low taxes.
This ultimately scored multiple investments from foreign countries.
Eventually, Singapore prospered as a global financial hub.
Other than outsourcing our supplies from overseas, Singapore have also supported local talents and business owners.
At the same time, Singapore also focused on nurturing young talents and building up the education system in Singapore.
By building a good foundation base both locally and globally, Singapore was able to develop multiple sources of revenue.
Likewise, the lesson for us layman is to diversify our income streams.
So that we have a safety net to fall back on, even if one stream fails.
2. Balanced Budget and Reserves → Budgeting and Investment
The Singapore Budget is prepared for each financial year, allowing regular reviews and evaluations of the budget in the upcoming fiscal year.
This is done based on the nation’s priorities and the distribution of finite resources.
This helps to uphold budget discipline and fiscal prudence for our country’s finances.
That way, we can maximise our savings for any future plans.
In terms of savings, it is equivalent to the reserves that Singapore has.
(A) Emergency Fund
Singapore’s reserves act as an emergency fund in light of any crisis (Just like the one we are going through now)
And fund all the GST Vouchers and Support Packages to relieve us citizens of some financial burdens.
Like the ones we received throughout this year.
(B) Endowment Fund
By investing the reserves, the income earned from it has increasingly become an important source of revenue to fund government expenditure.
Likewise, as individuals, by investing our savings, we too are able to gain additional revenue!
And the trick is to start early!
3. Ever-Growing Economy → Always Anticipate Change and Stay Relevant
In today’s world where change is the only constant, it is crucial for us to be forward-looking.
And to make decisions in view of any possible challenges ahead.
Take the example of Singapore’s water supply.
As a growing nation that lacked natural resources, Singapore has since depended on Malaysia as our water source.
Given that the latest Water Agreement only gives Singapore the right to obtain water until 2061.
It emphasized the need for Singapore to be independent and self-resilient.
Since then, Singapore has continuously strategize and upgrade itself in securing a sustainable supply of water.
Today, Singapore has successfully built a sustainable water supply from four water sources.
(Otherwise known as the Four National Taps)
Even up to now, Singapore is still looking out for ways to grow itself to remain relevant and productive.
Of which you ought to do so too with your knowledge and skills!
This is especially important in today’s context where retrenchment is on the rise.
That way, by equipping ourselves, we are also helping our dear country maintain a skillful and productive workforce.
Which will in turn promote an economic climate in bringing about growth to Singapore.
Thoughts on our Nation’s Success
“From Third World To First” – Lee Kuan Yew
Be it a person or a country, managing one’s finances plays a very crucial role in one’s success.
And the way to manage them is no different!
As long as we identify the similarities like we did above, we can easily learn and follow them!
It’s the financial discipline that is difficult but important.
What Singapore has proven is that nothing is impossible, if you set your mind to it.
In Light of the Upcoming National Day
Writing this definitely brings the memory lane down back to 55 years ago.
As a student who learnt about Singapore’s success growing up.
The story has never failed to impress me.
As much as us citizens are always complaining about this and that.
I believe that we are all still very thankful to have grown up in this small little island state.
Free from natural disasters, a stable economy and a healthy environment to grow up in.
Happy 55th Birthday Singapore!
I am proud to be a Singaporean.