Saturday, September 25, 2010

What's marriage really competing with ?

When the government said that they want to have a sustained campaign to promote marriage to younger folks, a lot of folks took the opportunity to start whining about why Singaporeans are choosing to accumulate wealth over settling down.

I don't agree with this line of thought. This light of thought has been used in many scenarios.

Why are Singaporeans rude to each other? Because they are too concerned about money making.
Why are Singaporeans not getting married ? Because they are too concerned about money making.
Why some people are failures can't hold onto decent jobs ? Because other people are too concerned about money making.

I beg to differ about money making because, very often, guys save money in order to settle down and start a family. If marriage gets delayed, it is because we're not saving fast enough.

Wealth reinforces families and makes development possible. Wealth accumulation is not the enemy of family creation - it is an enabler. And vice versa. Married people pool assets creating a portfolio of financial and human capital that is more diversified than that of 2 singles. Marriage raises conscientiousness of males resulting in better overall health, longevity and wealth creation. Children, while a burden when young, provide income smoothing at the late stage of a person's life.

There is enough literature to establish marriage as generally a positive stabilizing influence on personal wealth.

Now let's talk about the real issue of Single-hood.

Marriage has to compete with the one valuable resource singles have can may not be as willing to give up easily - Freedom. Being single is just plain fun !

Many singles make enough to lead decent carefree lives. They can travel anywhere, buy whatever they want. Promote causes that they believe in. That translates to a whole lot of mobility. Generation Y would also not want to be shackled by the norms of Gen X society, they want to carve a set of values for their own.

In this world of readily available sex, tweets and Facebook, I'm betting that it'll be hard to sell the younger folks an ancient institution like marriage.

What price are we putting on their personal freedom ?

This leads to my very dark conclusion for policy makers.

What will happen when the campaign fails ? What will the PAP do ?

I would propose more draconian measures. Let me give you guys a small hint :

Since children produce income smoothing in most cases and function as annuities, CPF Life can be opted out by parents living with their kids.

I'm sure our government can do something along these lines...


Saturday, September 04, 2010

How to study engineering ?

A number of readers may be engineers who want to get into investing so do comment on this article whether you agree or disagree with it.

A friend wanted to me to give some advice on how to study engineering. In particular, would there be fundamental ideas and equations that can make a person a good electrical engineer.

I can't answer that question directly. Like finance, engineering is a mixture of disciplines. Engineers need a strong foundation in mathematics, physics and computing before you can really start doing work in research, programming and systems integration. Finance majors need statistics, accounting and economics to even start making meaningful investment decisions. Finance majors in the future probably need C++ programming to engage in statistical arbitrage and high-frequency programming.

What I can offer is a set of strategies on how to study engineering that is unique in the physical sciences and not anywhere else.

Here are my tips :

a) Study of engineering subjects always involves solving problems.

You can understand or memorize an equation or physical theory but the rubber meets the road in solving problems. This is why sometimes great engineering students look at a typical problem in a tutorial first before diving into the lecture notes. Equations and theories exists as a means towards the ends which is to resolve a technical problem.

This means that the much-maligned 10 year series method of learning is actually the ideal one to master engineering subjects.

A savvy engineering is always hunting for new problems to solve using their newly learnt theories.

b) Best engineers use their foundation in problem solving to imagine or invent more complex problems.

This is the difference between a B student and a dean's lister - the ability to imagine problems of greater complexity and solve them independently of the lectures. We all learn about resistors in series or parallel in secondary school. A smart physics student can mentally arrange resistors in a three-dimensional cube edge or a mesh and use the basic equations to solve problems of this complex nature.

c) Best engineers have toys which reinforce their understanding of technology.

Engineers must align their hobbies with their discipline. This allows them to gain a kinesthetic understanding of the technologies needed to create value for their employers or clients.

If finance lets you buy the biggest toys, engineering is the professional discipline with the most absorbing toys.

The modern engineering student has a really nice set of toys to play with outside school. Find a VC trained in finance who likes the stuff you build and he'll then proceed to buy you even more toys. Android phones are programmable in Java. Arduino is a very simple, low-cost way to understand micro-controllers. Even better, Android phones can control Arduino microcontrollers.