Do horny people find it harder to FIRE?

 

As younger Millenials and Gen Z begin their journeys towards financial independence, it becomes very useful and instructive to examine their own personal approaches to early retirement. And recently, one can't actually ignore the new rising star among our ranks as Ashish Kumar drove even the thought leaders here to refer to their dictionaries with a new word, "aroace".

Aroace stands for someone who is aromantic and asexual. If you are aroace, you experience very little romantic or sexual attraction towards other people. This is a novel concept because we know that most FIRE thought leaders here are single, with me being a rare exception with my wife and kids. So, it's not really arguable that being single makes it easier to make extreme financial decisions and engage in personal austerity programs, but being aroace takes singlehood to a whole new level because it may have to act at a fundamental biological level - you leverage your lack of horniness to attain earlier financial independence. 

The question for me is - Is it even ok for the FIRE movement to have its own sexual orientation?

I'm old-fashioned - for me, financial independence is a tool for family formation. I will earn passive income to better support my family in the future, and I expect my own kids to carry this forward. FI is a means to an end. It's not an end in itself. But I can accept that younger generations that have grown more individualistic would not consider family formation a life goal - I don't think any amount of cost-benefit analysis would justify getting hitched, and it's worse for young women. 

In previous articles, I've stated that family formation in Singapore can be lucrative if you scale the BTO/EC ladder and take advantage of economies of scale. Still, in essence, this works well only for assortatively mated couples, such as folks in the top universities who date and ultimately marry each other. 

If you run out of arguments, you have to hit the books, which is why I leveraged the book Red Flags, Green Flags by Dr Ali Fenwick, which has a fairly nice section on dating. 

The book does not discuss money much, but it highlights some issues with his decision to stay single. Singlehood works as a short-term strategy because you have the freedom to work on yourself, but studies on loneliness make it a bad idea over the long term. From my vantage point, I observe that singles are quite happy tight up to their 50s, then bitterness sets in, and they stop making new friends or lose the ones they already have. Many single folks don't have a real strategy for loneliness as they can't account for their personality changes over time. 

I was clear why I was single until my early thirties—I wanted enough passive income to live on and support my family. You need to know what you are working on. Maybe you are prioritizing your career, on a healing journey, or just trying to figure out your preferences.

The decision to stay single can also be a serious red flag. 

If you have stayed single for too long, becoming too stuck in your ways is straightforward. You also need to gain the skills and the willingness to handle relationship conflicts, such as my wife not liking my three straight days playing Baldur's Gate 3.  

The book offers a straightforward solution: When you run out of excuses (but being aroace is a valid reason to skip the marriage market) for being single, you should start dating casually to learn some social skills and about yourself. 

The consequence can be found in a recent CNA documentary. 

One fine day, your neighbours will complain about the smell coming from your flat, and folks will be called in to clean up your dead body.

Thoughts about my latest Cohort Reunion and 50th birthday celebration

 

As opposed to how awful my last weekend was (which will be a topic for a future blog article), this week has been pleasant as I attended a gathering of Swiss Cottage Secondary School's 1990 graduating batch's 50th birthday celebration. As I belonged to the "study" clique in school many years ago, I did not expect to be at the centre of social interactions. Still, I deeply enjoyed observing the proceedings yesterday, and I have enough readers in that event to be able to pen my thoughts on reunions.

We're still basking in the glow from last night's celebration, with some folks in the financial sphere claiming to know my cohort mates. My mum commented that the ladies looked dynamic and young even though we were half a century old. But the wisest thing a classmate told me last night was that class reunions can be a tense affair for some people and that those who decide to show up are the most satisfied with their lives. So, at least 30 happy people from the cohort. 

That being said, some topics of conversation are interesting enough to make it on this blog. 

Investing in Malaysia

So, the background is a classmate who is a Malaysian working in Singapore kicked me up and drove me to the event. He was discussing investing in Malaysia with another classmate, and that other guy was quoting from this blog about my anti-Malaysian investing thesis. You know the rest, I don't agree with the 1M65 mobs at all, and I believe that political and forex risk will damn Singapore investors in the future if the incumbent loses power. And I speak this as someone who owns an income-generating shophouse in the JB suburbs. 

But it's unfair for a buddy to be contradicted because of what I write on my blog. Malaysian Chinese have a significant advantage in earning SGD and becoming landlords in Malaysia. This is because they can shift their expenses to SGD or MYR and are slightly less affected by forex changes. My current JB shophouse yields about 6%, so I don't see an issue of a Malaysian Chinese earning SGD to play JB Monopoly to systematically buy shophouses and then swap them for a motel later in life. 

But good luck if you are a Singaporean facing information asymmetries and a ringgit that may plunge further.

 

Should you prioritise Financial Independence over starting a family?

 

I want to answer a reader's question that was posed to me lately. This person found someone very attractive, but she wants to prioritise early marriage and children. However, because this reader is close to FIRE, he is conflicted about choosing FIRE or jumping into the relationship. 

It is time to share my updated thoughts on this blog because I suspect my earlier articles may have had an undue influence on him. I am OK with changing my mind on this blog as I age. 

First, there are solid arguments for a single guy to choose FIRE over starting a family. This would be my choice in my 20s, having only started dating when I could live on investment income (because I can pay for every date with dividend payouts). For a guy, his bargaining power grows exponentially as his portfolio grows, and you be fixated on a kind of woman, but not a specific one, so go for someone only when your bargaining power goes up. Truth is, for most guys, the dating scene can be very cruel, with dates on Tinder trying to sell ILPs to you and most women going after that "6-foot-five investment banker with blue eyes." 

But as I got older, my mind started to change on this matter. 

Suppose you are a guy, and you've already been shopping around. You are already in your mid-30s with a solid career and educational qualifications. You find someone more attractive than your previous set of dates, and she is similar in professional credentials. 

I fail to see why her desire to start a family should stop you guys from going ahead; you're adamant about attaining FIRE. 

Some points of consideration :

a) Suppose there is a fear of divorce. The national statistics should not apply to readers of my blog. Suppose the rate of divorce is 30% in Singapore. Your probability of divorce should be much lower if both of you are not married at too young and have degree qualifications. Adjust your probabilities as you know more about your date. 

b) The idea that marriage and kids can slow down FIRE does not account for the government policies that are specifically designed to maintain a heteronormative society via the BTO/EC systems. While a single guy can probably FIRE much earlier, he will lose out on the capital gains from a leveraged residential property that only married couples can buy. So far, the increases in my EC valuation exceed how much I spend on my two kids. 

c) Folks don't understand that marriage and kids can build one of society's most potent economic units as you reap economies of scale. Statistics show a retired couple spends less than two singles living separately. 

The final point I want to make is that many readers may be fixated on the remaining single FIRE thought leaders, but I don't believe that they will have the last laugh.

Just because a person is wise with money does not make them wise regarding relationships. If someone has money and is unattached, it may even say something about their personality!

I don't believe that any of my happily single friends have a plan to counter loneliness, which can kill at a rate faster than heart disease, and it actually gets more complicated to form friendships as a guy after your 50s. I don't see Gen Z running up to me to get me to play D&D with them. 

At the end of the day, we can learn from the tragedies we read about in the press, the cases of Yang Yin  

and Mitchell Omg / Audrey Fang may be lurking in the corner, waiting to pounce on the elderly who are financially independent.

Who will spend your money in the end?

Some advanced thoughts on Malaysia and KL

 

After returning from my trip to KL, it might be time to talk a bit deeper. I hope that these random thoughts can moderate some of the feelings of folks who are caught up in the fervour started on some Telegram groups about buying homes in JB or KL.

a) Conscious currency conversion between SGD and MYR

While in KL, I often divided the cost of any item I wished to buy by 3.5 to calculate the equivalent cost in SGD, and I would always conclude that the price was low. Malaysians in Singapore do the opposite. They apply a multiplier of 3.5 and always conclude that everything in Singapore is costly. 

I had an attitude adjustment from a Malaysian friend who works as a PMET in Singapore. He has to travel to and from every week to give his family a better life. He is the only person who provides a unique perspective on all this. He says that Singaporean food is very cheap compared to Singaporeans' salaries. 

Imagine what it's like to pay MYR $15 for economic rice as someone who works in Malaysia. 

b) By the numbers, KL would make an excellent retirement destination for Singaporeans

If you look at the situation from a pure numbers perspective, my ERM students researched and showed that an expat in KL can live on $20,000 SGD a year, including rent in a one-room apartment. This means that a 4% withdrawal rate and a $500,000 portfolio can provide a working retirement plan for a single person. 

Beyond the numbers, issues like political stability, changes to the MM2H scheme, and safety will still be a big impediment for many Singaporeans. Having close relatives nearby and being a good driver can greatly help your retirement journey. 

c) Buying Malaysian real estate is still a terrible idea

After my trip, despite all the news about more collaboration between our two governments, buying property is still a bad idea. Singapore's land scarcity is unique to us, and we can't transplant our ideas about owning land to Malaysia. 

KL has old towns like Cheras. KL also has townships which are has-beens like Subang Jaya and upcoming yuppie enclaves like Putrajaya. The fates of house valuation will be based on these shifting tides.

It's nowhere close compared to the millions of dollars of equity you made buying your EC during the PM Lee era. 

That being said, there is nothing wrong with renting a unit in Malaysia using dividend payouts or HDB rents from Singapore. 

d) Education and being stuck in the lower parts of the value chain is an issue

Bank Negara has been trying to hype the Ringgit for the rest of 2024. They might be right in the short term, but I can't see how the Ringgit can maintain its current value against the SGD over the next 10 years. The locals need to improve their English proficiency, and I can't even speak English to someone in an up-market European-themed eatery. Also, the convenience store clerk of a Japanese outlet would turn your business away, claiming no loose change.

PM Anwar surprisingly knows about this problem but has chosen to anger his nationalists by asking us for help with English teachers. After I visit KL, I can understand how urgent this request is. Of course, how we respond will be equally entertaining. 

I encourage intrepid Gen Z types to consider trying out some kind of digital nomad lifestyle centred around KL. Earing in SGD and spending in MYR is da bomb! 

It's still relatively easy to fit in culturally, and for the more enterprising guys, you'll never know whether you can find a spouse while you are there. 

My latest trip to KL.

 

Last week, I took a trip to KL to enjoy the last few days of the school holidays. The trip was funded by rental payouts from JB property, which I could not unload at a reasonable price, so the feeling of the powerful SGD was diminished as I was spending primarily the rental income earned in MYR. Nevertheless, we put ourselves up at a better place at Ampang for $150 SGD a night - a far cry from previous trips where I preferred low-cost accommodation at Petaling Street. 

In many ways, KL has not changed. The "software" that Singaporeans take for granted was simply not there, with staff in convenience stores refusing to provide change and waitstaff at high-end eateries like Paul's being unable to converse in basic English. However, you get what you pay for, and the experience is still cheap and pleasant as you no longer feel the budgetary restraints that fetter your spending powers in Singapore. But there are certainly many areas where KL wins hands down - the Grab Taxis are fast and cheap, and we are better off just meeting our relatives at many foodie destinations instead of expecting them to drive us there. 

KL will always be the place to go for me because it now has three fantastic bookstore branches. The Kinokunitya bookstore at KLCC boasts a better RPG collection than the Singapore branch. There is also a well-designed Tsutaya bookstore at Pavilion Bukit Jalil and a fantastic Taiwanese bookstore, Eslite, at Bukit Bintang. Singaporeans will likely have to fly to KL one day to visit the bookstore as our national libraries crowd out the local bookstores here. 

Other than books, the only thing I can really talk about is food. I'm fortunate to have spent two days with a secondary school pal who drove me to distant eateries and two days with relatives who brought me to a different set of restaurants.  

Before discussing my pleasant food experiences, I want to express my disappointment at the much lower standards of my usual Prawn Noodles at Bukit Bintang Lot 10 food court. The lady boss remained the same, but the prawns were overcooked with the "black veins" still intact. We paid a ridiculous sum of MYR 280 for the meal, and I can get cheaper and better Prawn noodles next to my home in Woodlands. That is my last visit to the outlet. 

That aside, here are three of the better places I ate in.

a) Village Park Nasi Lemak

Village Park Nasi Lemak was the best nasi lemak I had ever tasted, but it was priced at a ridiculous $12.50. Comparisons with Coconut Club in Singapore are pointless, as I heard that Coconut Club's Nasi Lemak was based on this original brand. Like Coconut Club, the best part was the succulent chicken, which was crispy on the outside and soft-and-juicy inside. 

b) Siu Siu Restaurant

The second epic place where I had a meal was a local institution called Siu Siu Restaurant, where the local zhi char was excellent. We were disappointed that they ran out of crabs, but we still enjoyed many meat dishes and fish. Clearly, it is advantageous to go where the locals eat, and the food was not only cheap but excellent.

c) Porto Romano Restaurant 

The last choice was purely accidental. As we lived in an old but relatively upmarket mall called the Intermark, we found a classy-looking Italian eatery that served reasonably priced food. We had a decent pasta meal, and on the last day we were in KL, I tried to blow the remaining budget on a Surf and Turf item, and the price/quality exceeded our expectations. 

All in all, it was a good trip. I originally intended this trip to be for book browsing, but having friends and relatives drive us to far-out places really enhanced the foodie experience for me. If I go to KL again, maybe at year-end, I want to refocus on museum visits and their handicraft centre, which I cannot do on this trip.

Insights into Acquisitional Wealth, Italian Espresso bars and Chuan Chuan.

 

I will fly off to KL tomorrow for a few days of cafe hopping and wandering at bookstores. The KL scene has become much more vibrant for bookstores as Singapore has been losing them to our well-run libraries. I foresee a future trip to Bangkok to visit game stores and KL to bookshops.

Today's article is about chain combo-ing some books to derive insights. I was fortunate to read these books in a row, and they enriched my personal experiences during my short break after conducting my 34th installation of the Early Retirement Masterclass.

Let's begin with Josh Tolley's Acquisitional Wealth, a novel personal finance book that folks should read. Initially, it reads a little like Robert Kiyosaki, but then it takes a detour into the world of small business M&As. Tolley believes that instead of the usual work, saving and investing in mutual funds, folks might be better off buying businesses from small business owners. There are many non-cyclical businesses like a car wash or a laundromat with owners seeking to retire, and you can buy them just like a value investor should. One major issue is that you often have to borrow money to purchase such businesses, and the acquisition process requires months and the services of a good accountant and lawyer.

I enjoyed this book so much that I started googling for business brokers in Singapore. After a while, I realized that our markets are so severely beaten down that we can find illiquid companies trading at 3-5 PE, so there might not be a need to buy a business. The book's biggest glaring weakness is that it does not say much about valuation, which can be remedied by reading textbooks by Aswath Damodaran. If you are considering expanding your mind beyond the usual investments, consider taking this book out for a spin.

I give my brain a break after a finance read because I'm getting mellower and becoming more interested in human matters. Books should trigger pleasant memories, stimulate ideas for travel, and teach you a thing or two about life. 

Chinese Espresso by Grazia Ting ticks all the boxes. It is an ethnographic study of Chinese immigrants from Wenzhou who are now owners of espresso bars in Italy. This book made me want to travel to Bologna, Italy, with my posse next, given that I had a fun trip to Istanbul after reading the history of the Byzantine Empire. The idea is to meet ethnic Chinese who speak fluent Italian and Mandarin and are forced by circumstances to buy coffee bars to survive in Italy.

For a book like this, it's good to be exposed to the racism faced by Chinese immigrants, but it is also a fascinating read about coffee. The author worked as free labour for these espresso bars and discussed how difficult it was to generate the foam with evenly sized bubbles for a cappuccino.

But what's really valuable for the finance-obsessed is how ethnic Chinese think about business operations. The Wenzhounese can dominate the coffee bar trade because they see their kids as free labour. The profit from an espresso bar operation does not account for labour costs as it is family-run, and profits are for the whole family, with the patriarch using his funds to buy up other espresso bars for their married children. The Wenzhounese, the most entrepreneurial of all the Chinese dialect groups, already operate on acquisitional wealth the way Josh Tolley would have wanted. 

This completes the circle of books I read these few weeks, one book on theoretical ideas on small business M&A and another, an intimate description of small businesses in Italy.

I relate what I learn to my ordinary life. After conducting my course, I have two days when my wife and kids are with their in-laws in Malaysia, so I decided to hang out with a friend over the long weekend. He used to hang out in a Japanese pub that had closed down, so he wanted to just drink with the ex-staff, but all I wanna do is to sing.

So I followed him to a weird corner in Jurong East called Vision Exchange, an ethnic enclave of PRC immigrant workers with an entire row of Chinese eateries. 

We picked a quiet eating place, and prices were super competitive; 15 sticks of Chuan Chuan were sold for just $10. Compare that with our local equivalent of 10 satay sticks for $13 at Pasar Malam.

[ On a separate note, I spent $13.50 on Chuan Chuan, then I sang for 3 hours in a karaoke lounge with one drink for $6. My total damage that evening was less than $20. ]

With such a price point, it is no accident that Mala eateries have also begun to dominate the local F&B scene the same way the Wenzhounese have acquired the espresso bars in Italy. 

Immigrants are willing to struggle as locals cannot chiku (eat bitter); they are willing to exploit themselves to sell cheaper food to us. With a Mandarin-speaking majority, Singapore is much more attractive to the PRC than Italy. 

But, of course, there are plenty of parallels between local Singaporeans and Italians. When Italians see the PRC, they think that the Chinese are part of a mafia group. We tend to see them as money launderers.

If there is any lesson to learn from my reading adventures, personal finance readers owe a lot to sociologists, and we should read their books more. One classic is The Millionaire Next Door by Thomas Stanley, who inspired me to go all the way to hunt for cheap chuan chuan in the first place. 

Letter to Batch 34 of the Early Retirement Masterclass

 

Dear Students of Batch 34,

It's been a great honour and privilege to conduct a 5-Day Early Retirement Workshop for you.

 As I cover this latest batch of students, interest rates are still high, and 2024 is expected to have just one interest cut around the year-end period after the US elections. The pessimists might say that the portfolio we build still faces some downside risks as REITs continue to underperform. Still, optimists would see this as a bargain opportunity with a longer stretch. After all, the projected yield of the portfolio built by this batch is high at 7.42%.

 Community observers who follow the construction of ERM portfolios should note that this class would have selected a large variety of local stocks, as dividends are pretty high across the board. However, I removed a few counters to make the portfolio more manageable and accommodate folks with a smaller amount of capital, so please refer to the rejected list of stocks for details.

 I am a realist. Students should see some capital losses if inflation remains high in the US, which is why I hedged with one banking counter. Otherwise, the portfolio will outperform if we get lucky and interest rates come down early in 2024.

Returning to the class, I wish to thank this batch of students for keeping me entertained and curious. The conversations in the classroom make the class come alive, and I’m grateful to be able to tap into your broad life experience today. I particularly enjoyed the conversations about Chinese society, what working in China feels like, and how the nature of involution has shaped Chinese society today. They gave me hope that the situation in Hong Kong has bottomed out.

Lastly, I hope Batch 34 will participate actively in the FB group. I look forward to seeing you at the following community seminar, which is slated for Q3 2024. 

All my focus is now on bringing LLMs into this program

Hope to see you then!

Christopher Ng Wai Chung