What Can We Learn About Personal Finance From SMRT’s Mistakes

Taking a break from all the 38 Oxley saga, we take a look at an issue more relatable to our livelihood and day-to-day convenience. 

On 28 June 2017, Singaporeans experience one of the worst MRT breakdowns with 33 stations along North-South and East-West lines. Despite such news not being significant enough to make its way to the parliament yet. That certainly left quite an impression on some of us. This is especially so when having to fork out an additional $30 on transport fees after a long day at work. Not cool!

There is nothing much we can do about SMRT, but there are lessons we can learn about personal finance from SMRT’s mistakes.

Always Ensure That You Have A Contingency Plan

Millennials general have lesser financial commitments until mortgage loans and supporting a family kicks in. Armed with the mindset that they do require much to survive, a group of millennials tend to over-commit a huge percentage of their paycheque to less liquid investments or saving plans.

Should there be a sudden need for cash, this group of millennials will find themselves withdrawing from some of those saving plans early. Early withdrawal of some of these financial plans can incur a loss. This is comparable to SMRT’s inability to support the extra population, due to the inadequate planning of the infrastructure.
The Bangkok Mass Transit System (BTS)

If you are frequent travellers to Bangkok, you should have taken note of The Bangkok Mass Transit System (BTS). The train system of Bangkok has platforms built longer to accommodate trains of six cars. This is despite them only needing trains of four cars for now. Should the population increases like it did for Singapore, Bangkok’s BTS system will be able to add in the additional cars and support the extra crowd.

Like our finances, it is necessary to set aside rainy day funds, very much like the extra platform space. It is important to have a portion of your income parked in places or instruments easily accessible should there in an unexpected need for money.

Your Value Does Not Increase Overnight

In July 1997, there is actually a plan in place to upgrade the North-South and East-West lines. The project was estimated to cost $100 million and targeted to be completed by the year 2002. It did not happen.

The project was ultimately implemented in the year 2012 and expected to be completed by the year 2019. A little too late for the situation.

In fact, this situation is very much like Singaporeans when it comes to retirement. Most people dismiss the idea of planning for retirement when they were younger. This will go on until the average age of 38 where most Singaporeans realised the need to start saving up fast. What most people do not realise is that saving for retirement, like the upgrading of MRT’s infrastructure does not occur overnight. It is a journey that requires years to see the full result of it.

The SMRT project, having only been implemented in the year 2012 instead of the earlier 1997, also cost twice as much to implement. This very much reminds us of the importance of getting our necessary insurance at an early age. The later we start getting our policies, there’s a higher chance of paying a higher premium.


It is human’s nature to stick to a certain convenience when we realise that it works for us. It wasn’t until the frequent breakdown of the train that some of us start exploring for alternative means to travel. Prior to this, some of us are fully at the mercy of the performance of our MRT system, a monopoly for our mode of transport we set for ourselves.

Like our reliant on a certain mode of transport, some of us do the same for our finances by putting all our eggs in one basket. This fully exposes us to the risk of the particular financial instruments we commit most of our money to. It is a healthy habit to diversify our risk by putting our assets in various asset classes.

What You Do Today Can Improve All Of Your Tomorrows

Since the year 2004, Singaporeans experienced a steep increase in population. This piece of information was constantly made known over media, and yet, nothing was done.

This act of doing nothing despite constant reminders of an impending problem, landed Singaporeans today to suffer the consequences. All these could have been averted, should someone pay a little more attention to the reminder.

This is very much like most of our plan for retirement. Most people are aware of the importance of it but decide to leave the problem to a later date. The further we delay financial planning, the higher chance it will have an impact on us, and our next generation.

We are fortunate enough to be bombarded with numerous finance content providers online with knowledge worth feasting on. It’s never too late to start now.

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