Wednesday, July 23, 2014

Hedgehog or the Fox ?

If you are a hedgehog, you know one thing really well. If you are a fox, you know many little things.

This question has many many applications in the area of career management, after you stabilize career, do you take steps to specialize in something or do you pick up more skills as a generalist ?

I asked this question on FB and  observed that most tech professionals would rather be a hedgehogs. This makes sense since hedgehogs who specialize in one platform can make a lot of money out of it. The 1990s and 2000s IT landscape belonged to SAP consultants who were specialists. They were known to be able to bill for time and materials and led lives with a high standard of living. Data Science is the current flavor of the month.

Most guys who are into investments prefer to be foxes. Assessing the viability of an investment goes way beyond applying financial models. Many investments come with political risks and a person who has many models and perspectives tend to do better in managing money than someone armed with a single equation.

The dichotomy between being a fox or a hedgehog is represented by two conflicting models.

In Six Sigma, the biggest rewards goes to processes with a smallest amount of variation. The biggest rewards got to people produce something with the least amount of defects.This model is opposed by Fisher's theorem, where it was theorized that higher variance leads to faster adaptation ( As in evolution ). If you adopt this theorem then you will introduce as much variance as possible so that adaptation to the environment can be done in the shortest time possible. 

I think the insight on one's choice of models has implications on career management. 

If the environment is static and unchanging, then Six Sigma would be a useful model. If you work in an industry which is static where folks are stubborn to change, it makes sense to specialize and find a niche which you know would be rewarded in your environment. In the public sector, I noticed that the folks who get promoted are mostly predictable hedgehogs. You can also have lifelong employment if you are a master of an arcane process like procurement. 

If the environment is dynamic and fast-changing like Tech, it may be wiser to be a fox and introduce variation in your skills. In the past, software engineers face a lot of paradigm shifts. There's currently one going on involving functional programming. The Microsoft lay-offs has also made people question the value of putting your entire career into one .NET platform. 

So in summary, I think there is an objective answer to this question of whether to be a hedgehog or a fox. 

It depends on the degree by which how dynamic your work environment is. 

People in tech may have chosen wrongly when they become hedgehogs, they are better off being foxes. Combining some technical skills with domain knowledge, but maintaining writing skills and maintaining curiosity in strange new platforms is vital to maintaining their currency in a ridiculous crazy industry. 

Just remember, we aare now in a world where Microsoft is laying off thousands of people - no one is safe.

Tuesday, July 22, 2014

Using models to explain life, success and the assholes around you.

This article might be a little "cheem" since I have just completed all 20 lectures of the Model Thinking course conducted by the University of Michigan, I think that of all the courses taught, this is probably the best one so far.

The central thesis of this lesson is that when it comes to prediction, we are much better having more models so that we have more tools to explain a certain phenomenon.

This article demonstrates a model  known as Colonel Blotto. This simple model had a deep impact on the way I think.

Imagine you have 100 unit of soldiers and plan to deploy them across three fronts. To win a war, you pit yourself against an opponent who also have 100 units of soldiers to be deployed against you. The winner of this game is the player who can deploy more soldiers than the enemy on 2 out of 3 fronts.

Some findings Colonel Blotto are as follows :

a) If you have advanced knowledge on how your opponent deploys, you can always deploy your soldiers to win 2 in out of 3 fronts ( Your opponent deploys 34/33/33. You can react by deploying 0/50/50.)
b) If no advanced information can be gained, your best strategy is to be as random and unpredictable as possible so that your opponent can't guess your next move.
c) If you can get advanced information, you can have a smaller army and still win 2/3 fronts.
d) If you have a numerical advantage against your opponent, you should try to limit the total number of fronts as much as possible to secure a majority victory.
e) Against an opponent with a stronger army, you need to fight a war on multiple fronts so that you can blunt his numerical advantage.

Of all the models taught to me, this one really blew my mind. It almost explains all the phenomenon which I have experienced in my study and working life. ( Note : I am an eccentric. It does not take a genius to figure out that I'm by nature, bizarrely competitive and approach my work and studies as a gamer and strategist. )

Here's how this model explains what I observed in my life:

a) Top-JC party animal stereotype

When us B-Grade Singaporeans meet up for drinks we always talk about campus life which involve a certain amount of hostel stay, many of us meet a particular hostelite which I would term the Top JC party animal.

Some folks will claim that this guy is from my JC. In my case, i always claim that the dude is from RJC or HCJC. It does'nt really matter, as the faces, JCs and names change, but the stories are the same.

This dude's hostel strategy is to get you to drink and party with him until late at night, then using some combination of  Red Bull and Coffee, he stays up late and studies until the next morning. After the exam, if he gets into the Dean's List, he will act as if he put in little effort ( a power move called sprezzatura ), if he fails, he's a party animal anyway so no loss of face there.

I was warned that I would meet friends like this in campus, so I devised a counter-strategy against them. I refused to party and did consistent work, so even though I was dumber than these guys, I would retain more information for the exams. I don't really care about being labelled a mugger-toad because if I really had any natural intelligence, I would have been in the gifted program and would probably be in MIT anyway.

This is Classic Blotto in action, expanding the new front on Partying to get you into investing your troops while keeping strong troop detachment on Academic performance.

Well played !

b) Latently Competitive Family Man

I really hate the LCFM, the engineering faculty is full of these fuckers and I don't seem to be able to develop a counter strategy until much later in my life when I became much more mellow and mature. The LCFM had shit grades and shit ECA, he can't even do engineering work, so he goes to a secondary school to teach Physics ( or E Math if he's truly hopeless ). He marries his University sweetheart 1 year after graduation and invites you his housewarming party, then he smugly plays a family card against the hard-charging yuppy, spouting Chinese philosophy on work-life balance and mocking you with his balanced approach to life.

Well, Confucius hates you and so do I !

Another Classic Blotto, opening a new front on Family while the rest of the world is focused on Making Money to win one front first, then applying psychological pressure to get you to reduce your initial deployment.

c) Involuntary Dilettante

I would like to propose that there is a third stereotype I would term the Involuntary Dilettante. You may meet a lot of folks like this at work or in school, but in my opinion, this stereotype is to be pitied.

Imagine a successful woman who has it all - work, family, children and a good marriage. Most real woman are not Marissa Mayer and have to compete on more fronts against each other, as they are judged on many more dimensions than men (If you're a guy with gold coming out of your arse, only Thomas Piketty will judge you).

If you are normal career woman with average looks and average qualifications, trying trying to juggle everything and losing out on every front is a possible reality. The Colonel Blotto game predicts that you will try to attack every front at the same time so that you can luck out on your career or your husband. As in all things in life, very few actually "make it".

While it's only a mental construct, Colonel Blotto has given me some insights on life :

a) Society values some things more than others. It's your choice to determine how to deploy your troops. My deployment is Financial Independence and not Material Pleasures. I also have a large deployment in Inter-disciplinary Knowledge. I'm betting that society rewards both.
b) If you choose a front not valued by society, then enjoy your private victory and don't gripe about being under-appreciated. Singapore is not very open-minded to alternative forms of success anyway.
c) If you are competitive by nature and want to kick ass. Then you need to have a large deployment in as few fronts as possible. This a classic Alpha Male maneuver. Focus on the shit you are good at but having something around so you can pivot.
d) If you feel disadvantaged because of your own circumstances, then have many varying fronts and hope to luck out. ( Multiple hobbies and interests may lead to serendipitous financial rewards or prestige.)

I think I'm going to toy with the models from the Coursera class to predict the behavior of the people I meet.

Having this toolbox really has the ability to predict and explain the behaviour of the folks around you.

Who knows, maybe one day, I can even apply this into investing.









Thursday, July 17, 2014

When Insurance Agents attack...

Sometimes, when I get a great day, a friend who believes in insurance writes a passionate message to me to take issue with my ideas on insurance planning. This inevitably strengthens my position, since insurance agents seldom want to talk to me anymore, it updates me on their various tactics which I share with there readers.

Let me summarize my idea on insurance.

I believe in "Buy term and Invest the Rest". This means not only maxing up your term life insurance, it means saving up what you would have spent on insurance on an investment portfolio of your choice. My personal choice of investments are high yielding stocks, REITs and business trusts. Some folks told me that insurance companies invest in the same things to meet their liabilities.

Here are some of the resistances to my idea :

a) Term Life does not last forever. 

We all know that term life does not last forever. Term life insurance like NTUC i-Term covers you until age 84. SAF Group Life only covers up till age 65. In fact, I want to say that all of us prefer not to get a pay-out on term life, we want to live long prosperous lives.

The aim of term life is to transfer risk of early death to protect your human capital or future cash flow. If I die early, my family will not have benefit from my income, the term life insurance provides a cash outlay so that my family would not have to suffer. Beyond age 65, I have no more income anyway, so there is nothing to protect.

Using this similar argument, your child is a dependent and if you are not relying on your child's future cash flow, it is not necessary to buy term life for you child, but your child can sign up for a term life insurance to protect you when your child finds work after graduation.

b) What about hospitalization and critical illness ?

In all of my previous books, I recommend H&S insurance. Personally, I don't have any because I was diagnosed with thyroid and diabetes early in my life and I was rejected by NTUC before when I made my application.

These days, I am mixed about H&S plans. Recently in Business Times, journalists have shed light on the pricing of these policies. H&S insurance plans are cheap in your 20s and 30s - this is an active strategy to gain market share, after which H&S expenses ramp up drastically.

Agents are also notoriously silent on how much Integrated Shield Plans protect above and beyond the latest changes to the mandatory Medishield plans. We are all already effectively insured by the government, the insurance agent needs to convince me as to why government protection is insufficient and why I need a room which is better than B2 wards.

For folks who cannot get a hospitalization plan like me, my portfolio covers the shortfall. I have many layers of protection, Medishield, my maxed-out Medisave account, dividends from my stocks to pay if medisave overruns, capital gains and finally my savings.

c) My cousin contracted Ebola from his goldfish ! My father-in-law has hair cancer ! You need protection from such situations, right ?

This is a poorly constructed argument designed to spread fear.

The "Invest the Rest" component protects your family from these situations and covers other situations like job loss, having a new kid, home renovations, getting sued by neighbours, etc which no insurance agent can cover. My portfolio can even pay for my daughter's plastic surgery if she wants to start a K-POP band.

Your agent needs to paint the scenario whereby someone relies on Medishield versus someone who relies on the IP policy and what the different in costs will be. If your portfolio can handle the difference, it still means that the risk does not need to be transferred.

c) What if the customer is an average investor ?

This line of argument genuinely makes me mad.

People are bad investors because money management is not taught in schools. Instead, the government allows an 'O' level graduate to qualify to sell insurance. These people then go on to call themselves financial planners. Now the industry argues that most people are dumb and should listen to them instead. Many insurance agents also do not know how to invest and are largely responsible for the ignorance in the first place.

I am willing to concede that if you are an average investor, you are better off listening to a financial planner. The same argument can be used to convince someone to buy 4D, if you keep losing money on investments, maybe buying 4D can give you better odds.

But I'm going to offer you an alternative - why not listen to a fee-only advisor ?

This advisor will not have an incentive to push products down your throat and may be able to structure a decent portfolio based on ETF to ensure sufficient diversification.  Many fee-only advisors have come out to support a variant of my "Buy Term and Invest the rest" scheme.

The whole point of this blog is cater to folk who want to be above average when managing their finances. This means that you need to optimize your costs.

And taking a second look at how much you are subsidizing the lifestyle of your agent is a great way to be more frugal with your finances.

Not everyone can win in Singapore society - if you do not educate yourself in the ways of money management, there are a lot of predators out there who would want a chunk of your savings.















Tuesday, July 15, 2014

Some change in my thoughts regarding the $100,000 challenge.

There has been some calls to poll my opinion on what should someone do with $100,000. There has also been queries as to whether some of the things I wrote on Growing Your Tree of Prosperity is still valid with the market today.

Growing Your Tree of Prosperity is a lot more than just about investing in unit trusts, it puts readers in their first attempt to pony up $100,000 - something which is attainable by almost anyone. It's special to me as it also captured some issues which bothered me 9 years ago. These days, I find that cynical tone in my first book quite amusing even though it shaped my behavior as an investor.

I will first address some of the changes in my mindset here :

a) These days, ETFs may indeed be superior to unit trusts.

Close to a decade ago, ETFs were not as ubiquitous as they are today.

In my first book, I placed a lot of emphasis in selecting unit trusts which are global in scope with a low expense ratio for higher long term returns. These days SGX is full of ETFs which have a much lower expense ratio, negligible sales charges and gives you access to a range of global investments at your fingertips, so if you have a brokerage account, you may want to go through the ETFs page in the SGX website to build your portfolio. I think $15,000 - $30,000 is enough to get you started as you will need several ETFs to build a diversified global portfolio of different asset classes.

If you have barely have less than $15,000, it may still be prudent to find a unit trust dollar cost averaging scheme to build your capital up to $30,000, but in this case, you might as well use this as a cash reserve before jumping into ETFs directly.

b) If I had the knowledge I had today, I'd jump straight into investing for dividends.

Most of us who were investing since our 20s had to pay our tuition fees the hard way. When I graduated, there were not REITs in the stockmarket. A fresh graduate is very well read these days, many already know value investing and understand how to filter stocks based on dividend yields. If I had all this information, I would jump into building a portfolio of dividend stocks immediately using manufacturing and telco blue chips at about 5% yield a year before starting to push my yields upwards with REITs and business trusts.

This approach will allow me to start supplementing my transport expenses and meals perhaps upon my 3rd or 4th year of work.

The second part of this post is a section which I would not really like to provide easy answers. A lot folks ask me what to do if they have such-and-such amount of money. The answer to such a question is closer to a legal problem than an engineering problem. The best answer depends very much on your personal context.

Instead, I will try to give you some points for your consideration :

a) Have you covered all your emergency situations ?

Before the discussion takes place, you should have 3-6 months in emergency expenses. This should preferably be in cash. You should also have a maxed out term life insurance to protect your loved ones in case anything should happen to you.

b) Have you enhanced your human capital yet ?

Contrary to what a lot of people say, you get rich from working. Working provides the earnings you save which is then farmed into your investments.

Unlike financial assets, human capital can be enhanced at a significantly low investment. My Masters in Applied Finance which was offered in NUS 11 years ago only cost me $11,000, that was where I learnt about investing my money. These days you can enroll in SMU by paying 5-6x the amount, I think it's worth every cent. Some engineers can jump into the business development line with a good MBA from INSEAD.

This is an important consideration as the enhancement to your income was exceeds the cost. ROI can well exceed that of equity counters. The downside is that it's better to do this before you are 35 as you still have your best career days ahead of you.

Of course, there are more tactical ways to grow your human capital. A short course on computer software ( If you can get certified on Internet of Things ) can make a significant difference in your career.

c) Invest only after earlier points have been considered.

Investing should only be considered after (a) and (b) have been taken into consideration. Once you arrive at this point, many other financial bloggers can give you better advice than I do, here are your possible options available for someone with $100,000 to invest :

i) Permanent Portfolio 

An ETF which covers all asset classes with regular re-balancing can achieve decent results with minimal draw down. This is probable the best option for a beginner.

ii) Yields Portfolio 

This is what I do personally, hunt for yield stocks to offset my living expenses. I generally ignore capital gains or losses and avoid portfolio turnover.

iii) Value Investing 

Look for low Price to Book value stock bargains and focus on total returns and minimizing your downside. Benjamin Graham focuses on this approach and some folks make a lot of money with this method.









Sunday, July 13, 2014

No need to be suicidal if your girlfriend is materialistic !

Sometime ago, the trolls in TheRealSingapore put up this hilarious post :

http://therealsingapore.com/content/young-sporean-suicidal-because-all-girls-he-loved-are-too-materialistic

The writer has become depressed because his girlfriends keep leaving him for richer guys. As a result of this, he has asked the folks of TRS on whether he should end his life. 

Let me share a personal story.

Before I met my wife, my parents were worried that I was single. Worried that I might not be able to perpetuate my genetic material, they conspired with my neighbors to match-make me. Those days, I had only one condition, that condition is that she must be really hot for me to be interested. In the past, my aunt has made attempts to introduce me to girls when I was in KL, but they are always overweight and over-educated. ( Actually, I shouldn't even mention that they are over-educated because if they were hot, I wouldn't be complaining on this blog. )

Ok, back to my matchmaking...

Turns out that this girl my family found was really hot. She is tall, tan and comes straight from some Citibank advertisement. She serves institutional clients in a bank.

 So, what more can a dude want right ? 

I quickly arranged for a meet-up then tried to line up for a few dates. 

Then I notice strange things about my date.

She brought her girlfriend to my neighbors house to ogle at their fleet of Ferraris. 
She's always playing golf in Bintan so some dates need to be rescheduled.
We were both doing the CFA II exams. She didn't show up a the exam hall. ( Low conscientiousness )
On my second date, she was late and she was in a horrible mood, complaining that her futures were out of the money. I missed the first 20 minutes of Matrix because of her, I even offered to buy tickets for a later show. 

I guess the lesson I learned from this episode is that looks can only take you that far. 

Just like a bad futures investment which hit stop loss, I quickly cut my losses and ran for the exit.

Of course my dating luck turned positive after this event. 

At the end of the day, single guys need to understand the term "milieu" or environment when they are hunting for a spouse or even a great investment. 

If you hunt for a spouse in a singles bar, you get young girls who want to have fun, are open to new experiences, you might need to check if you are the real father of your child in the future - this comes with the dating territory. The singles bar or disco basically filters the serious and good girls who can make good spouses. Setting up a filter for growth stock practically guarantees a portfolio with a higher volatility. ( Generally speaking, of course, there are exceptions to the rule. Kingsmen Creative is a growth stock with great value. Some readers would have met their wives in Zouk would hate me if I didn't put in this disclaimer )

So my advice is that  this young man needs to take up activities where materialistic girls do not hang out. I suggest several good avenues which almost guarantee good wife material, one is to participate in a church, temple, Charity or NGO movement, you are almost guaranteed to find someone decent and non-materialistic there.

Of course, in such case, the guy needs to solve the other problem. 

Someone who writes such a stupid post in TRS would need to find a girl equally stupid to want to date him ! 

While she may not reject him because she's out for someone richer, she might dump him because he is an idiot !




Thursday, July 10, 2014

Should I invest in my excess cash into my start-up or use it build up my stock portfolio ?

A friend who attended my talk was having a discussion with me yesterday, he mentioned in passing that one of the Zopim founders actually attended my session and actually interacted with me on my talk. And I was going WOW ! It was such a great honour that someone who is part of an exit of such historical scale would be able to attend my session.

Anyway, my friend also expressed disappointment that in the Temple of Startup Capitalism, no one asked me a challenging question which we sort of "prepared" in case someone were to raise it during my talk.

And the question is : If I had money, should I invest in my start-up to make it grow or should I invest it into a portfolio different asset classes ?

I'm going to present, in my view, an answer to this question. 

To answer this question, we will need to look at the notion of human capital as proposed by Economics Nobel Prize winner Gary Becker. Human capital can be seen as a sum total of your unearned income. This is contrasted with your financial capital, capital which has already been earned, which is an asset in your bank, real estate or CDP account.  

Human capital is a vital part of your wealth. It explains why venture capitalists have faith in you - they see you as a potential future profit. Your total wealth is, therefore, a sum total of your human capital and financial capital.

In light of this insight, we also realise that your human capital also has characteristics similar to stocks, bonds and commodities. A salesman or marketing professional with a salary tied to company performance can be said to have human capital which behaves like stock equity. It goes up and down based on company profits. A civil servant has a salary very much like a bond. It is predictable with not much upside or downside.

So let's examine what happens when you found a start-up company. Assuming it has only had seed funding, your start-up has yet to produce any profit. Your profits are in the far future, it has to receive more funding and complete product development before profits will only start rolling. i.e. The closest asset class your human capital will look like is an equity option ! Your human capital provides you a minimal profit but can potentially give you a huge upside. 

Now let's move on to another insight this time from Moshe Milevsky. Moshe proposes that diversification of assets should also account for human capital. Another words, a salesman with human capital which behaves like an equity should look to a higher proportion of bonds in his financial portfolio. A civil servant can buy more equities to improve his upside.

So let's get back to our founder who wants to determine where he should invest his money. 

If your human capital acts as a derivative instrument like a stock option, the answer is clear, the prudent option would be to invest your money in a more conservative asset like bonds or various income yielding instruments. 

Of course, a host of non-finance related concerns if you accept my suggestions without question. If a founder refuses to invest their cash in their own businesses, would it signal the lack of commitment to their ideas ? Would their motivation be reduced if that occurs ? What if the funding is crucial for the company to complete their first product just to start turning into a profit ?

I don't have an answer to these concerns. 

The existence of VCs in an ecosystem is to rally high net worth investors to take on such risks. Private equity has historically performed well for investors even though many business fail on an individual basis. 

A savvy founder should trust the VC to fund his business to make it work. If it means loss of some equity, so be it. Therefore, I still think it prudent to look after own welfare by prudent diversification of human and financial capital assets. 








Monday, July 07, 2014

What games can tell us about success ?

Recently, psychologists have dealt a resounding blow against Malcolm Gladwell's idea that in order to succeed in a field, you will need 10,000 hours of deliberate practice. Of course, the scientific evidence cannot deal a killing blow to the theory because it's very hard to suss out practice that is actually deliberate in nature. Practice that is deliberate means that its difficulty is designed to always match the capability of the person, something which is harder to establish in a research experiment. All Malcolm Gladwell has to do is to say that most practice is not deliberate in nature, then his theory still holds, I bet it wasn't really meant to be falsifiable anyway.

We are always trying to explain how and why we are successful. Prior to WWII, success was largely due to genetic factors. The US Army designed IQ tests to determine which citizens make the best soldiers. Recently the pendulum has shifted to success being part of environment and practice, I've always felt that this was more like wishful thinking on Humanity's part. If success is correlated to hard-work and depended less on things beyond one's control, people would feel comfortable enough to work harder.

The flaw in the idea of deliberate practice is that it seems more like wishful thinking rather than one grounded in cold, hard facts. The second flaw that we are trying to put a narrative around success without acknowledging that luck often plays an overly large role in our lives. The third flaw is that we really don't know what was sacrificed to attain public success - Steve Jobs was celebrated publicly but privately was a huge asshole based on the folks who used to work with him.

One thing which cannot be denied - domains with strict rules like Chess are domains where deliberate practice can have an impact on success. Similar to chess are games like Magic:The Gathering and Legend of 5 Rings, where a fixed set of rules and card base allow players with more exposure and time to triumph of players with less practice.

Very different from chess are games like Tabletop RPGs and investing. There are no fixed rules, conflict in a region like Ukraine can affect markets in Singapore. CEOs can suddenly signal a downturn by selling their stock.  In D&D, Players can find obscure use for magical items to mess up the best laid plans of the Dungeon Master, or simply behave irrationally because they think that it reflects the behaviour of their PCs better. Sometimes, one is simply better off with no plans and instead have a series of contingencies to deal with black swan incidents.

This insight may be useful in answering a question which has been bugging me for more than decade :

Why do the best gamers fail to apply their strategies in real life and lead a mediocre existence ?

Initially my thoughts that is the best strategy gamers tend to think in concrete terms and stick to the victory conditions that are published within the ruleset, this required that many gamers have a Sensing thinking mode rather than a Intuition mode. Then, I became obsessed with the idea of the growth mindset, I observed giftedness as a common trait of the top gamers and concluded that they stuck to games with rules because they are afraid of living a life where there are often no rules of engagement  ( many gifted children are cursed with a fixed mindset. ) Now the third of piece of the puzzle is in place - card games and chess games allow practice to be instantly rewarded with improve performance.

Anyway, I don't have a conclusive answer to what leads to success or the final word on why top gamers do not outperform at the game of real life.

Of interest to gamers is the evolution of RPGs which reflect the popular opinion of what constitutes success.

In the 3rd Edition of D&D, unbounded modifiers were crafted such that most of your bonuses are due to your level and the magical items which you have on you. In such games, experience and equipment largely determine success in any endeavour. Epic characters had better attack rolls, saving throws and hit points. In such games, success is long term gameplay and careful management of resources.

In Diablo III, experience matters less, all epic characters above Level 70 with hundreds of paragon points rely primarily on loot. Players with better equipment gets to get more equipment by going into the higher Torment levels. Cooperating in groups exponentially rewards players with more loot. That's almost like a world which the Wolf Of Wall-street belongs to.

Striking a careful balance is the recent 5th Edition D&D game. Nature plays a major role in the game with attributes accounting for a third of bonuses ( A strength of 20 grants a +5 bonus ) . Your experience now only plays another third of the dice roll modifier ( +2 at level 1 and caps at +6 at level 20 ). A major component which determines your bonus is how you role-play. Points of inspiration grant an additional dice-roll which is the equivalent to a +5 bonus within the game.

Maybe 5th Edition gets it closer to the real deal in life, your success is largely :

a) What you are born with.  
b) How much hard work you put into achieving your goals.
c) Your personality, attitude and character.