Sunday, December 15, 2013

Relationship advice for the Single, Young and Male Investor (SYMI).

Conventional wisdom on love and marriage would be as follows :

a) Date while you are in University.
b) Get your degree.
c) Work for a few years.
d) Get married.
e) Get a home mortgage.
f) Get a car.
e) Work together towards kids and retirement.

This pre-packaged plan comes as part of the Singapore Dream.

If you had followed the plan earlier, you will become like the hundreds of colleagues I know who feel stuck in their jobs, their companies becoming prisons which they live in. These employees have mouths to feed at home and mortgages to pay and if they do not have the relevant career agility to move on, they fall prey to poor management.

The savvy, young investing male, replete with market knowledge, can play a better game.

The playbook I propose should be as follows :

a) While in University aggressive play for the best grades. This is the Hunger Games, may the odds be ever in your favour.

b) Take on as many management roles in your CCAs you participate in. This is the most consistent way to score a big Bank or MNC position. You only want a bank, consulting firm, prestigious tech firm like Apple or Google or a DJIA counter business. ( This gives the best odds of 10% increments for first 10 years. )

c) Work overtime and aggressively save and invest with a target of $300,000 to ensure that you can live within your investment income. This may require a savings rate of 75%. ( Too bad, live as a undergraduate for the next 10 years. If you are lonely, sign up for a MOOC. My date in my late 20s was the CFA exams.  )

d) Date casually in your 20s, but start playing for keeps in your 30s. You are likely to hit your target in your mid-30s. Find someone who shares the same values as you.

e) Don't make a commitment to someone until you hit $300,000 in portfolio size. Odds are you will only get married around mid-thirties.

g) Start building your spouse's financial independence by channelling three incomes into her portfolio. ( Your's, her's and your portfolio's )

h) Once you are both free, have a kid and take on a mortgage. (This is starting to sound like a strategy for Starcraft II )

i) Work to clear your mortgage, kid expenses are not too large and you should be able to get the investment income to sustain a child before the kid gets into play-school on two incomes. ( Actually 4 incomes by now. )

j) Thanks to the power of compounding, you two will be able to reach the point where every expense can be paid via your investment income sometime before 45.

h) If you and your spouse feel like it, retire. Otherwise, enjoy your career.

The consequence of this alternative play-book is harsh - Don't accumulate $300,000, don't get married so naturally this is not something you'll see in government ads.

The problem is not so much being stuck with a lousy spouse but do you want to spend 10+ hours in a workplace and be miserable for 50% of your life ? $300,000 portfolio let's a single guy choose the workplace he wants.

The other advantage of this playbook is that many young males do not realize how attractive they become once they hit financial independence in their mid-30s. You are worldly and you've proven yourself in the corporate market.  Grabbing a young 27 year-old wife from a Gen-Y herbivore hipster is like grabbing a lollipop from a baby - Just remember to shout YOLO! while you are at it.

Old age and treachery will always overcome youth and speed.

No comments: