Tuesday, December 30, 2014

Countdown to 2015 - Create Systems, not Resolutions.

As we approach the new year, I start to find myself busy again. SMU has started spamming the readings for the next semester and I've been finding that I'm spending more time clearing the cases for the upcoming semester, so this has not been very much of a break in spite of being a month long.

After working on getting my condo into a livable state, things have been so comfortable that I have not been able to travel our of the country before school reopens. Hopefully, I would be able to budget for some travel during the next round of holidays although that's the break where the bulk of internships and pro-bono work would take place. 

Recently, many financial bloggers have started sharing their resolution plans with everyone. Being conscientious in nature, I expect most of them to succeed in their resolutions. 

This year, I'm going to move away from crafting my resolutions. Instead I'm going to see if it's possible to have a better year by employing the "Systems, not goals" approach proposed by Scott Adam's How to Fail at Almost Everything and Still Win Big.

So for 2015 I'm going to stick with the following systems.

a) Health and exercise system

For my health and exercise, I'm going to use up the ridiculous $320 I now pay as conservancy for my condominium by trying to swim or cross-train 3 times a week. Not much motivation is required these days as gym facilities is s short walk from my unit which is on the first floor. For a start, I will stick to a 30 min session and push it to 45 min once my body gets used to it.

b) A "system" of no touching of capital 

My finances are taking a back seat in 2015 as all I need to do is not touch my capital for one more year. I have two more major installments of close to $18,000 each to clear this year and need to worry about the final pay-out in October. Pay-out for April was partially offset by SMU thanks to my good fortune last semester. With any luck, I would have some ready cash to get into the markets next December.

While I might regret some of my market moves later, I have not touched my portfolio for the greater part of 2014. While there are few really bad dogs in my portfolio, I am strangely unaffected by the drop in oil prices. Maybe next year, my real estate holdings may take a hit when interest rates start to rise.

c) Better system to cope with school-work.

As a student, I would expect most of the effort to be concentrated on my studies in 2015. My current approach to my school-work leaves much more to be desired. I am still clueless on how to write a winning essay and have a mediocre strategy for exams.

My first system to implement is to look-out for resources on writing decent legal essays and treating it as a topic of study two weeks into the term. This also means knowing the exam Qs early so that question spotting can take place throughout the semester.

The second system is to overhaul my inefficient studying process. Despite acting really in the semester on all my assignments, there was a lot of rework getting my notes up which facilitates exam preparation. Exam-grade notes are now prepared as part of seminar preparation, so that I can avoid the nasty panic of creating notes only just weeks before the finals. In this case, the Kaizen guys understand what it's like to get it right the first time. Some rote learning cannot be avoided in an open book system as precious minutes can be saved if there is no need to refer to the cheat sheet.

To ensure that I have resources to put these systems to work, I would have to hold back on DMing my games and instead, will participate as a player in the next semester, Fortunately, someone else is ready to take on the mantle of Game-master while I plan my aggressive campaign to survive Semester 2 of the JD programme in SMU.

Wednesday, December 24, 2014

About to begin my fifth decade....

Tomorrow, I will celebrate my 40th birthday.

Just some thoughts and reflections on the last decade of my life and what's in store for me in my next decade.

It has been a very productive decade leading to my 40th birthday. On the family front, I started dating, got married and became a dad within this time. More interesting, this is probably the most prosperous decade I would ever experience in my lifetime as I was able to accumulate a portfolio size which gives me a higher drawn income higher than my previously held job, which then opened up a host of opportunities which would be closed to many other folks who are busy getting house in order, including getting into SMU Law School and gaining access to an entire host of "forbidden knowledge" which is only available for a very high fee.

Looking back, I can't say that I've made entirely good moves for my career. I was doing well in the private sector and made some moves which I soon grew to regret as I mistakenly thought that I would be happier and better off with more work life balance, which is where my biggest career mistakes were made. As I lost interest in IT work in my later jobs outside the private sector, I count my lucky stars that my financial knowledge allowed me to get a second chance in the legal industry.

This was something I had to do upon gaining financial independence, a lot of work frustration over my 15 years in IT was due to legal related matters, it could be clauses in a outsourcing contract, procurement or some terms and conditions for a software competition. Each engagement with legal professionals was, unfortunately for me, extremely unpleasant and I came off feeling very stupid every-time, I've always felt legal advice too dubious and clouded in . Law school is vindication. It's not enough to get a degree, I need to convince myself that I can make an above average lawyer.

I guess it's my fault that I'm too much of an engineer and geek at heart - I don't trust the so-called "experts" and had some success making financial decisions on my own and being from the outsourcing industry, I've always believed that insourcing is best.

I think a man's fifth decade would be the darkest decade in his lifetime. His parents will not be getting younger and the bulk of the most productive period of his time is over but the mortgages and liabilities would still be there. As for me, I have the dubious position of rebooting my career as a legal professional which I would have make a sincere attempt to build.

As I prepare to get back to the workforce in my mid-forties, I have articulated two major financial goals over the next ten years. The first would be to generate 5 digits worth of average dividends every month over a year. This is attainable very quickly if I can get a job as a lawyer as I can start saving my current dividends beginning 2016. The bigger challenge after reaching that income threshold is to rapidly pay off my 36 year condo mortgage over 3-4 years just to get to get rid of that big albatross around my neck. This needs to happen fast and before I hit my 50s as the Fed may raise interest rates soon.

This year is shaping up considerably well taking into account as to how fiscally challenging it was for me. I've accumulated almost a full year of unemployment, paid the highest income tax expense I ever had, moved into my new condo, bought all the furnitures and appliances, paid two semesters worth of fees, carried on servicing my mortgages and living expenses and I still managed solely using investment income.

Still, I had towards my 40th birthday on a new high.

My results were good enough that SMU has given me an award to shave off a couple of thousand bucks from my next round of school fees. It was probably more luck than skill as I've done better for my team projects and class participation than my written exams, this is not likely to repeat itself in future semesters.

There are still two more months before the adverse year of Horse ends. I'm cautiously optimistic for my luck in  the year of the Goat but I'm not holding the hard work for the next semester.

Catch you guys on the New Year  and Merry Christmas !

Monday, December 22, 2014

Who wants to be a "Sergeant" ?

A class of problems in a modern urban city is that problem of "Who wants to be the Sergeant?"

Why would a top A level student choose Engineering as a discipline when the pay of a technical professional lags a marketing or finance professional after 5 years ?

Similarly, why would a medical practitioner choose to be a GP considering the gap between the salary of a GP and a specialist ? More likely, why would someone really smart and capable choose nursing, pharmacy or an allied health practitioner and play the sergeants and assistant to doctors.

To a lesser extent, most lawyers prefer corporate law to community law, we have a case of too many law graduates when there is a shortage of legal professionals in the community space.

Closer to many readers, recently some students made a conscious choice to choose a neighbourhood school in spite of getting a PSLE aggregate of 261. This led to them getting the attention of the PM. While I respect the choice made by the student and the parents, this is the exception rather than the norm. In my opinion, joining a neighbourhood school after getting fantastic grades is not a strategic move because of the power of the alumni of the top schools. You may get a decent education in a neighbourhood school, but you deny yourself a great alumni which can be a major asset to your career in the future. Even if the government can make all schools good schools. The reality is that not all alumni are great alumni.

This is an important problem, because if everyone were to let the invisible hand determine career and school choices, society might be less optimal or anti-fragile as a result of this. As Nicholas Taleb recently told Singapore officials, some entrepreneur needs to feed all the bureaucrats within the system, so Singaporeans should not be over-educated. Now we have a situation where our top engineering schools are the recruitment grounds of our best banks, which is great for the engineering graduates as it's a ticket to a great life, but who would create the new jobs and bring out the hottest start-ups of the future and risk living a life of serial failures most successful businessmen has to go through ?

I don't have a solution to this problem but I do know what generally does not work : Appealing to morality will most likely fail. There is no nobility in poverty and mediocrity. What I want to do is to reframe the problem in terms of evolutionary psychology so that we can look at the problem in a more visceral and fundamental manner:

I always challenge a start-up founder/engineer by saying that if he is stuck in a singles bar with an investment banker, doctor and lawyer and all of them want to hit on a chick, who is likely to score in Singapore ?

This is just a mental experiment which I think sheds light on how to solve the problem.

Policy makers need to get into the singles bar and create a situation where if a start-up founder, investment banker, lawyer and doctor wants to hit on a chick, the start-up founder has a fair chance of getting lucky. At this point of time, no one expects the situation needs to change to give the start-up founder an unfair advantage.

Just a fair chance would do.


Tuesday, December 16, 2014

Financial Independence as a Continuum.

Since my exams, I have been busy getting my EC ready as TOP occurred a couple of months ago.

Most of my day has been spent moving my belongings from my parent's place and assembling Ikea furniture. As we spend quite a fortune on conservancy fees, I was also retooling my exercise routine to ensure that my conservancy fees will result in a healthier life which will hopefully defray medical expenses in the future.

This blog article is my first one from my new home.

A lot of bloggers and the financial community have been very anxious and excited over Anthony Robbin's latest book entitled Money. Overall, I think that it is a a very credible product. I don't really read Tony Robbins for his financial know-how, his genius lies in making really complex self-improvement habits accessible to the lay-man - folks who are emotional creatures and not conscientious scholar-types who would not require a motivational speaker to meet their personal goals. This is something which I struggle to do as a finance writer.

The financial community has had many years to criticize Anthony Robbins when he was the King of Infomercials in the past, when he was trying to sell his brand of NLP and even invented a new measure of healthiness of  a food product by labeling each item with a frequency measure.

This time, twenty years after his previous book, Tony Robbins actually created a real product which can benefit a lot of readers, he has come under  attack from all corners of the financial industry. The criticisms  focused on nitpicking his choice of portfolio allocation, but I think what the financial community really wants to do is to muffle his central message which is to get everyone to cut down the commissions they pay to the financial industry. Another words, readers are advised to move away from actively managed funds into low cost ETFs.

I am only currently a third into his book and can't really comment on his investment strategies yet, but I am already impressed with the way he broke the concept of Financial Independence into manageable steps which people can aspire to.

Basically, according to Robbins, there are 5 levels of financial independence. At each level, your investment income covers some of your needs. A person who is financially secure covers his basic expenses, a person with absolute financial freedom can buy a private island in Greece and live a life of constant luxury without being answerable to anyone.

A summary of Robbin's ideas are as follows :
  • Financial Security = Investment Income covers  Mortgage, Utilities, Food, Transportation, Insurance
  • Financial Vitality = Financial Security + 0.5 x (Clothes + Dining + Entertainment + Indulgences)
  • Financial Independence = Current level of expenses
  • Financial Freedom = Financial Independence + Some travel + Donations
  • Absolute Financial Freedom = Financial Freedom + Private island + Private Jet
If you refer to Robbin's model, I can currently cover his criteria for Financial Independence but that's mainly because, beyond the fees I pay to SMU for Law School, I have few indulgences in my life. 

More useful to the beginner who is just beginning his journey in investments, is that it may be better to break the first step of  Financial Security down into component expenses. For a young graduate or blog reader who has just realized that he needs some retirement planning, one approach is to start with each expense item. 

For financial security, let's say that you incur $200 of insurance expenses a month or $2400 a year, As a beginner, you do not know how to invest and has decided to buy a portfolio of REITs which yield about 6.5% ( Suppose you alphabetically buy 1 lot of all local REITs with your savings ) . Using a conservative 5% estimate for dividends, you will need a portfolio size of $2400/5% or 20 x $2400 or $48,000 to permanently cover all your future insurance expenses. If you can save $12,000 a year, you may attain the state of being able to pay off all subsequent insurance expenses after 4 years of work. 

Similarly for transport, you may also spend $200 on bus and MRT trips. By saving another $48,000, you also permanently resolve your transport woes once your portfolio reaches another $48,000 milestone. This will take shorter than 4 years as you would have a couple of raises and can also save the $200 you no longer pay from your earned income to the insurance company. 

In your journey towards becoming financially secure, you may start with Utilities, Insurance, Transport before moving on to food and the mortgage which tend to be larger expenses. This may take a decade of work but at the end of the journey, you can stop relying on your earned income to pay for these basic items. Note that disciplined savers may also find that they can accelerate their wealth accumulation as they earn more and spend less of their earned income as the years gone by. 

All in all, it was nice that a motivational superstar like Anthony Robbins agree with my slow and steady approach to wealth accumulation. The problem with each generation of folks is that they are always looking for a short-cut to gain financial independence where there is none.  By the time I was in my early thirties, I was able to save 100% of my earned income every month. I was even more pleased that Tony was also able to highlight areas of growth for folks who have achieved financial independence. Perhaps after I resurrect my career as a lawyer in the future, I can start thinking about designing a more comfortable lifestyle for my self and my family.  

Tuesday, December 09, 2014

Why Jack Ma is wrong about education and innovation.

Jack Ma joins the list of very successful billionaires who laments about the education system he has gone through and has spoken very convincingly of why the Chinese education system must change in order for the country to make progress.

This is not a new idea. Einstein himself values imagination above knowledge.

Many successful business men and even our own minister talks about the value of creativity and imagination in creating a vibrant innovation driven economy. In fact, I count a large part of my academic achievements not so much by my mediocre exam taking skills but mostly through public speaking and class participation. My ability to think out of the box comes largely from my 30 years playing RPGs and Dungeons and Dragons. We spent years linking up class abilities, spells and magic items to resolve any scenario the Dungeon Master tosses at my party. The current generation will use the same mindset and thinking to plan their next Zerg rush or Warcraft raid attacks.

In spite of billionaires, famous scientists and top politicians who wax lyrical about imagination, innovation and creativity, I am inclined to think that they are all wrong.

The primary reason why this thinking is wrong is that while creativity and imagination allows a few individuals to really achieve quantum leap progress, we are not convinced that a system which fosters such out of the box thinking is good for the masses.

That is the dilemma faced by policy makers.

Creativity, imagination and innovation worked for me, Jack Ma and Albert Einstein. But does it work for Tan Chee Hong, a fictional Geylang Pimp,  who finds an interesting way to name his prostitutes to increase repeat customers by 30% ? How about the Chow Ah Beng, who experiments with colours and Surrealism by spraying a national monument to demonstrate his artistic talent? Or Roy Ngerng ?

Clearly the most innovative country in the world is America. It has Facebooks, Google, Apple and Microsoft - no other country can do that. But America is also the country where a liberal arts graduate will graduate with crippling bank loans and his best possible job is making coffee at Starbucks, why do we have private schools that trick him into a course where it's hard to get a decent job ? Where else you can be shot by a cop because of the colour of your skin or by a gun toting psycho because you are attending high school. You can also be raped by a comedian in the 80s or worse, have to listen to Justin Bieber.

I'm not going to take the position that creativity and innovation is bad. I think that it should be confined to a select few. How much, and who should be given such training is something I'd wish social science would be able to answer.

The problem of Asian societies and Singapore is not not whether creativity or innovation should be emphasised in educational training, the question is how many should be given this emphasis and how do we select these people. Western societies which desire to open the minds of everyone are taking the wrong approach - just look at Justin Bieber. Singapore's elitist approach emphasising academics may also be wrong, look at Dr. Eng Kai Er.

What we know is that most of the population need to be trained to follow instructions and run the bulk of the economy. That is to provide society with operational personnel, engineers and bureaucrats. There exists a sweet spot, a magic number of population where the Jack Ma's exist waiting for the system to unlock their potential.

Of course, taking my idea to it's logical conclusion runs the risk of adopting Plato's concept of the Philosopher King which can lead to a totalitarian regime. The moment you take the road to select people to be treated in a different way, you also run the risk of thinking that men of gold will produce children of gold, which I think is increasingly becoming a problem in Singapore.

Technology can provide the answer. Data analytics and the science of personality can isolate the traits of the Jack Ma's and Bill Gates and we can determine what are the traits which can make a difference. The answer may well radically differ from our government's fetish with academic ability.

We need to bring personality metrics, income and social economic status into a database for number crunching first, then we need our social scientists to work with our data scientists to determine what is that sweet spot.

That is the key to a truly Smart City.

Monday, December 01, 2014

The Myth of the Self-Made man.

Wow ! It has been a while since I blogged. I've been busy on my first Law Exams which took me out for about 3 weeks, and after that, I've been playing Dragon Age : Inquisition and trying to move into my new condominium.

It's going to be almost a year since my last pay-check and it's been quite a struggle maintaining my fiscal balance in 2014. I have to settle two semesters of fees and condominium furniture and appliances on a year of investment income and I've been barely making it with some of my counters declaring fewer dividends ( like that blasted Sabana Reit counter ) over the months ahead. But so far so good, one of the biggest benefits of law school is that I no longer have any time to enjoy the stuff that I eventually pay for so my personal expenses have dipped below $200 a week.

2015 is all about interest rates with the Fed expected to raise rates over the year. Everyone is speculating how this would impact their investments, but Im going to sit this one out as I believe that many other countries like the EU and Japan will start their own QE in the months to come.

Today I'm just going to blog on what I've been observing among my non-law school friends ( Yes, I now have two categories of friends because of social pressure to conform to law school norms of drinking and talking about cases. ). As you know, many of us are approaching our forties and I've been realising that we middle-aged uncles, having sort of found our positions in society, are starting to erect very elaborate psychological defences to cope with middle age.

One such defence is the idea that there is such a thing as a self-made man.

The idea of the self-made man comes in many forms. The "weak form" of the self-made man idea is that it is inherently more noble not to receive help if you have privileges in society. A "strong form" is that you are actually better off not receiving help even if it is normally expected that you do so because we are an Asian society because it makes you grittier and more amenable to succeed.

Personally I think that this idea is comforting because it has a hidden purpose and meaning. When faced with mid-life and mediocre life outcomes, middle aged men like myself want to create that impression that we did it the harder way. It's an act of the mythologizing the self, so that we seem more heroic in spite of our pathetically average life outcomes in our health, finances and relationships. It's also quite easy to find evidence to support this stance, there is always a wastrel in the family from the rich side of the branch who amounts to nothing ( We forget that folks who are low in conscientiousness can come from both the rich and poor branches of a family ).

I'm against such psychological defences ( I am actually not entitled to it because I grew up in a relatively ok middle class household. )

My first disagreement is that there is no nobility in mediocrity. There should be little nobility in success, if you feel morally superior, use your success to help others. No point crimping yourself and not receiving help from your rich parents when you can give so much more to the world if only you get a slight push. You might as well say that you have average outcomes because you are a good and moral person.

My second disagreement is that a gritty life is a choice. If you are born with a silver spoon in your mouth, it's still your prerogative to choose a harder target to meet. If you have more, you can desire to achieve more.  If your peers are trying to get to a University, you can always choose to create jobs for others because you have started out with so much more. In Dragon Age III, you can choose the level of difficulty of your play experience. You can slam rich and successful people but there are those among their ranks who have created thousands of jobs today who would never apologise for using their social advantages.

My third disagreement is that even if you did not receive advantages from your family. A lot for folks are blessed if they have families which do not impose a burden upon them. You need to explain why you are mediocre when some folks who are born to gambler parents can still achieve greatness. In such a case, the psychological defence fails when someone who have less than you do, end up doing so much more.

Finally, I think folks who adopt this stance needs to ask themselves this question : If you really believe in the self-made man and that it is better not to tap your natural social and economic advantages - are you consistent with that philosophy when raising your children ?

Do you deny your children comforts, refuse to pay for tuition or even refuse to give them your personal time ? After all, if you are truly consistent, your kids will be grittier and more successful right ?

At this point, if I go further, I would just generally end up losing my friend.



Friday, November 07, 2014

What can we learn from hipsters ?

The days get worse and worse for everyone in my class. We survived our double-whammy Friday where two papers become due within one day and I must say that my class-mates are really amazing with many not having any sleep at all over the past 24 hours.

I think the worse is over not just for my class but for the markets as well. This is the time to stock up on equities for the Capricorn effect of 2015 !

Today's article we explore the concept of hipsters. Why ? Because I can.

I can't find any hipsters in SMU.

SMU is a bunch of overly happy and enthusiastic undergraduates who have too much love for Abercrombie and Fitch.  I actually saw a dude wearing some sort of woollen vest. WTF ! Either he thinks he's studying in Harvard or is the air-con setting too low ?

Ok, I digress, now back to hipsters !

Ordinarily I always thought that hipsters would not exist in Singapore because Hipsters are an economic phenomenon. During the Great Recession, an entire generation of Americans's hopes and dreams were destroyed by the economic fallout. So bereft of jobs and a future, they turned to irony and developed a personal philosophy to cope with the mess they were in. They all developed a similar dress code involving handle-bar mustaches and listened to vinyl records. The funny result of this is why they all aspire to be non-conformists, they all ended up being indistinguishable from each other.

The situation in Singapore is interesting. We don't have a lot of hipsters but we have too many hipster cafes. It is said that every hipster cafe aims to be unique but most of their coffee beans come from the same two sources.  Hipster cafes are a different economic phenomenon,  Singaporeans who go to Melbourne to study often want to import their coffee culture back home. I leave it to the readers to think about what economic prospects these hipster cafe owners would have if they could not charge $7 for a cup of cafe latte ( which I only found out 3 weeks ago, is a flat white with foam ! ).

The idea of hipster was churning in my mind until I had the pleasure to read Peter Thiel's book From Zero to One.

Peter's writing is clear and concise. After all, he went into the start-up space to launch Pay Pal after being denied clerkship in the US Supreme Court.

His insight is special.

Why do hipsters become hipsters ?

Peter's hypothesis is that humanity is reaching stage where most of the simple problems have already been solved and only problems in the impossible domain remained. Humanity's biggest issue is that the hard problems, those which can be solved by one person with great effort, no longer exist.

Hipsters yearn for a simpler time because in those days, people felt that there was progress. This explains the obsession with fashion which throwback to the 60s and 70s and their obsession with vinyl records.

I can certainly imagine how a Hipster can look like in Singapore.

Hipsters are simply nostalgic people !

  • When someone misses the SBC days and talk about Channel 8 dramas like The Awakening, the person might be a Singapore Hipster.
  • Whoever listens to a Flock of Seagulls and The Pet Shop Boys are hipsters. 
  • Whoever plays games on 8-bit Nintendo emulators are also hipsters of sorts.

I like to see myself as an anti-hipster. I think that folks can find interesting and small problems if they know where to search for them.

Useful insights can no longer found within one domain. You will need to look at multiple domains to find problems that are solvable, which would give an individual a tremendous sense of satisfaction.

I will just share one example I did in one of my classes.

The problem was negotiation.

Two law students had to represent two sides in the negotiation table, there were two variables, price and quality. Most lawyers would approach this issue to pin down one agreed price at a particular quality, this can get really acrimonious and both sides would use the facts to bully or cajole the other party into a settlement. In some cases, the person with the loudest voice or prettiest face would have a huge edge in the negotiation exercise, it's just not practical in the real world once your business thinks that you screwed him over at the negotiating table.

I did not see the negotiation as a legal problem. To me it's an engineering problem. Both parties just needed to agree on how a graph would look like given the variables at each axis, each quality would result in a reasonable price.

The outcome is that I positioned the solution as a linear equation and all we needed to do was to agree on slope and intercept of the graph. The final outcome, no party won, both sides felt that they got a damn good deal. I bet this is probably a rare moment in the history of common law because it was so adversarial, its hard for both sides to emerge the winner.

In conclusion, this article is less about hipsters but more about multi-disciplinary studies. Increasingly so, we will come to the conclusion  that while no hard problems have remain within one domain, plenty of problems and solutions exists if we gain the capability to reach across domains.


Friday, October 31, 2014

Are you Superman or Batman ?

One of the privileges I have in my life is that I get a front seat to experience the struggles of myself and my fellow classmates. This 3-year reboot has allowed me to do some serious thinking about the nature of success. This is not so much an analytic exercise, but I see this as more akin to a religious experience.

One phenomenon I notice in campus is the kind of quality people attribute to their personal conception of what success looks like. For folks who really are into personal development, this is very similar to Carol Dweck's notion of the fixed versus growth mindset.

Let us look at the Superman model.

If you believe in the Superman model, your model of success is effortless in Nature. Legends will always tell of some mysterious senior who can drink, party and not study but still get into the Dean's List every year. One of the more ludicrous stories I hear is of a top Law Student who claims that she can throw her books aside on Friday only to pick up her books when the week begins on Monday.

I am very skeptical of this model.

Yes, there will be superstars at school or at work, but there will always something that debunks the Superman model once you get to know these superstars. Some may sacrifice their personal lives, others have a battery of coaches or may have even found a way to outsource their lives to virtual assistants in India. Some may just have an awesome environment to hit the books since they stay in District 10.

The reason why I am skeptical of Superman model is that people who know how to manipulate power practice sprezzatura. Top students in NUS have this irritating habit to make their success seem effortless to sustain this myth of their abilities. Makes them sexy and superhuman. Some go through horrible lengths to get their peers to drink with them in discos only to spend the whole evening mugging to keep themselves in the Top Honor rolls.

In the world of work, the Superman model is the Super-Manager, the great CEO who rockets to financial independence by clawing their way up the ladder. These guys do exist, but they are one in a million.

The question we really need to ask ourselves is what happens if we really have no talent ?

I propose the Batman model. Or if you have a villainous bent, you can call it the Lex Luthor model.

Success is no accident. Batman can't beat Superman in most engagements because Batman is not an alien from Plant Krypton, he can't fly, does'nt have super strength and x-ray vision. He's just a dude in a black nipple suit with a low voice.

But Batman is awesome because he is a superb strategist. He anticipates the move of his opponents and ensures that every weakness will be exploited to the fullest. He's worked hard to train in martial arts and has an array of gadgets to level the playing field.

The Batman model assumes no talent. If you want an edge over Superman, you have to marshal all your resources and work hard to attain your goals. You need to know Superman's weaknesses and have a suitcase of kryptonite ready if you really need to take the Man of Steel down.

Nowhere else is this found in investments.

The Superman model assumes that a superstar analyst exists who can pick out magical stocks and attain financial independence without any effort. The Batman model assumes ordinary market returns, then conscientiously saves and invests based on tried and tested factor variables.

Of course, just because we have two mental models doesn't mean that we can always strategise and plan our way to victory. Adopting Batman's strategies, I have spent my entire life getting my as handed over to me by the Supermans at study and at work.

Sometimes talent does indeed beat hard work.

That's why after a trouncing, Batman can always console himself in the arms of the Catwoman.

Sunday, October 26, 2014

Why we should press on.

At the end of the semester, some classmates are having doubts about whether they made the right choice in coming to the SMU JD program. I promised that over the weekend, I would write something to cheer them up so that they would press on in their studies.

I think that my class is a small class and the industry is large enough to absorb all of us in spite of all these changes going on to "nerf" the legal profession.

For the rest of the readers, my analysis should also apply if you've worked damn hard to get into a fairly exclusive MBA like the one at INSEAD or the APEX MBA program in NUS.

When I look at my class, especially the younger folks in their early-30s and 20s, they are likely to able to be placed in a career that is going through the tail-end of a Golden Age. I've taken some very conservative estimates to calculate the expected net-worth of my classmates upon graduation.

Here are my assumptions.

a) You get the minimum grades to be admitted into the bar. No need for 2nd Upper grades.
b) You start out at $4,500 a month.
c) 7% increment a year with 3 months bonus every year.
d) You save 50% of your income and your entire bonus every year.
e) You invest your savings at 7% returns.

( Ok... granted not all of you lawyers will know how to invest, but 7% a year is not too ambitious )

Based on the table below, if they can meet conditions (a) to (e), a conservative starting salary will net them their first million within 13 years. So if a graduate at 30 charts his career and finances properly, they are likely to make their first million at 43.

SalaryBonusAnnual SavingsCumulative SavingsInvestment at 7% returns

I will let the real practitioners discuss the feasibility of my financial projection, these numbers can even apply for the top-flight engineers who can get into the banks after their first degree. 

Of course, my table and projections are what happens in theory. 

It's baffling to know legal professionals, who shockingly, are not millionaires before 40. There are many reasons why savings and investments targets cannot be met. I mean no insult to those professionals who are still working hard to met their financial targets but the alcohol at Ice Cold Beer attracts a lot of government taxes so less trips to the bars help. 

But, I think having a seat in SMU is something we should be grateful for, so I think this qualification is worth striving for, even when many of us are currently our ego bruised and getting perhaps our first B- in our entire lives. 

For me, even if no law firm were to take me in due to my age, I think I'd be a pretty formidable outsourcing contract manager if I have to crawl back to the IT industry.

Wednesday, October 22, 2014

Taste and Aesthetics. Being Basic and Normcore.

I think get along fairly well with my JD classmates despite a glaringly large generation gap. I actually said to a classmate that if I had a shotgun wedding when I was in JC, my kid would be her age, Maybe they treat me like a insane cousin or uncle that they can't seem to avoid on a family gathering. I like to ask questions in class like what if two people in a contract hypothetical case are lovers or whether consent can be withdrawn halfway during sexual intercourse just prior to male orgasm.

The generation gap becomes really magnified when I attend a lecture with the LLB kids. In those classes, I feel like a Singaporean Bill Crosby. Subconsciously,  like many older men, I really want to brow-beat the See-Gee-Nahs for the incoherent way they speak and their strange appearance. In the end I restrain myself because some of these kids are my seniors in Law School and may even end up coaching me for Moots. And of course, I should not pass judgment across generations, our struggles are quite different.

I actually feel ashamed to admit that the one thing which cheeses me off is the "SMU Smile". What happened to the angst, anomie and the general lack of confidence of an undergraduate ? Kids in my days have a lot of anxieties, how to get a job, how to get laid in a hostel and how to pay off the study loan, SMU undergraduates have this uncanny ability to project an inner sense of self confidence that I think has become the hallmark of the SMU brand which everyone else would either love or hate.

Today's article is about class anxiety. Buzzfeed has a really awesome article which talks about labelling someone as "basic" as a way to demonstrate their superiority in taste and class. In one lecture with the LLB folks, the lecturer picked on this kid because he wore an Abercrombie T-shirt. This is one brand I would never associate myself with. ( Unless it's to be a sole distributor )

After reading this article, I actually felt funny because I consider myself as having a taste beneath what would be considered basic in Singapore. After analyzing my personal taste and aesthetic, a friend concluded that I actually belong to a category called Normcore. It is a conscious striving to bland in taste and dress.

Being basic in Singapore is as follows :

  1. You shop at NTUC Fairprice.
  2. Eat in a foodcourt.
  3. Buy clothes from Forever 21 or Mango if you are woman. For a guy, maybe G2000 or Giordano.
  4. Drive a Toyota.
  5. One pair of decent does like Rockport maybe.

I propose that investors should try to live a live below that level of "Basic" to reach financial goals.

  1. Shop at Value$ or Sheng Siong.
  2. Eat at Kopitiam or hawker centre whenever possible. 
  3. I wear and love Goldlion shirts although I am slowing wearing some Uniqlo to keep up with the times. A Gen-X uncle brand. Boomers wear CYC or 3 Rifles. ( No SPG will talk to you and no one will ask you whether you are gay if you wear these brands )
  4. A weekend Hyundai which I don't drive because I take public transport.
  5. Bata shoes.

Of course, perhaps at the end of the day, in class anxious Singapore we can easily afford to find other areas to be complete snobs at. Done properly, it will not make you a jerk and can protect your self esteem from the consumerist types around you.

My weapon of choice is in the books I read. An expression of superiority coming from appearance is quite shallow and with available credit, anyone can look good. I am delighted by conversation on the works of Lawrence Freedman,  Steven Pinker, Thomas Piketty or perhaps Martin Seligman.

Of course, snobbery being snobbery, some books must be excluded from the club.  I am openly contemptuous of folks who read and wax lyrical about the works by Dr. Phil, Paul Coelho, John Gray or Rhonda Byrnes.

This is stupidity of the highest order.

( In case you are wondering, I did read most of their works to figure out how to make books sell. )

Sunday, October 19, 2014

"Till All Are One !" - The Mechanics of Synergy.

It was a perfect storm for my personal finances this week.

First SMU decides to bring forward payment for my next semester of fees. The the markets had a series of sudden bearish moves while I lacked the funds the exploit this weakness. Then two things happened: My condominium TOP-ed and I have to write a couple of checks and  my weekend car battery failed and we have to get AA to help us out next week.

Still, I spend so little money as a student these days, I've yet to touch my capital yet. Hope this can be sustained for 1 more year, after which all my fees would be settled.

Anyway, my class just had a mid-term exam. The value of the exam was not high but I think almost all of us put in more effort than what the score meant to our final results. I think this mid-term is a true test of our capabilities because it forces a student to consider trade-offs: Already on FB many classmates are complaining that focusing on a subject meant sacrificing others. This is a greater dilemma faced by all citizens : You have one life, do you study or play, start a family or work, invest or travel ?

Which leads me to consider the almost overused concept of synergy.

Synergy is the 6th Habit in Stephen Covey's 7 habits of Highly successful people. It is exemplified in the concept that the whole is greater than the sum of the parts. It has a darker purpose in the business world, after an M&A exercise, to synergize operations between two entities, it is quite normal to make a many employees redundant through a restructuring exercise,

I have two insights I picked up from Law School on the idea of Synergy.

The first insight is that if we see four subjects as four separate subjects, we are likely to be stretched. I think unlike engineering and finance school, legal subjects are a lot more similar to each other and concepts drawn from a topic can be used to reinforce another subject. Somehow I noticed that many contract cases can also be sued in tort.  Our analytic and writing module probably applies to all other content driven modules like Contract and Criminal law. If we can actively apply and re-use some concepts across subjects, we can, in effect, study for multiple subjects while explicitly preparing for one. This can be one possible way out of our predicament.

The second insight concerns my active strategy which I think is working well so far in school.

Synergy requires very active and strategic time allocation. I noticed that students today have not changed for the past 15 years during my NUS days. The main method to cope with a stressful work-load is to live one day at a time. We're eminently human and will use out our time-slot for something which brings pleasure instead of pain. We also do not have a strategic use of our time to actively meet multiple objectives with one action.

My strategy so far might fly in the face of common sense. When an assignment "spawns", I rush it within 48 hours once I am sufficiently confident that all the material has been taught. No excuses, and it applies on individual and group assignments. Between leisure and work, I always choose work.

I realized that there are a couple of benefits, as I'm done with assignments 48 hours after they spawn, sometimes I can lift material from a previous assignment and cut and paste case references into my later assignments, returned assignments are used to remove mistakes from my submitted drafts to ensure that mistakes do note repeat itself, More interestingly, as the assignments cover the same material as the classes, doing the assignments early also prepare me for mid-term, throughout the term break I integrated assignment writing into test preparation. I can safely say that my rote learning load was halved since I was made intimately familiar with cases which I wrote about before.

So in summary, this is an exercise to cut into the root of what Synergy really means. It has confused the heck out of me since I read Steven Covey in the early 90s.

One possible idea is that all subjects are one. Investing is Life and Money is Happiness. Compounding your wealth can bring confidence and can help in school or at work because confidence always makes you a more magnetic personality.

The other approach is that time is the fuel which drives synergy and allows synthesis to take place. I think a person who learns about dividend investing at age 20 is better off than someone who picks up this skill at age 40.

Could it be possible that Time, managed well, also compounds itself like other asset classes ?

Wednesday, October 08, 2014

The Shallow Search for Happiness.

I'm in the middle of my term 'break' in which I had to do even more work than a normal week at school. Test preparations and written papers took up almost half of it.

Now I'm taking a short break to update this blog as I think I've done enough preparation work and will let fate decide what happens in tomorrow's online test. This is the first time I'm getting a test where I have no idea what is to be tested. I was probably more prepared for my blood test this month which actually went really well. Turns out law school deprives one of unhealthy food such that I actually have a better cholesterol reading than a normal person and managed to control my blood below 8 for my HBA1C.

I'm writing today's article as a response to someone who intimated to me that he is disturbed by all the happy pictures his friends put up on Facebook, this makes him question the meaning of his own life. I consider this person very successful by Singaporean terms, so I was puzzled by his sharing. And if someone who is successful find a struggle in this, this is a problem which might be worthy of some thought.

Like in almost all recent postings, I will take a multi-model approach to this problem to decode this issue.

My first point is that most folks will simply say that they want to be happy. All life decisions are driven from the perspective of happiness. When a boomer or Gen-X say that they just want to be happy to justify a life decision, in my opinion, they are just as naive and shallow as Millenials who will justify any act by their YOLO philosophy, which I actually think is a more refined philosophy than what my generation has.

So first off, happiness on FB is a shallow idea which people use as a Swiss Army Knife to justify any life decision.

I will first refine this theory based on Martin Seligman's idea that Happiness is based on five components :

a) Pleasure - Classic meaning of happiness. Eating a lobster roll gives you pleasure.
b) Engagement - Mihaly's concept of Flow. You get this by doing interesting work.
c) Relationships - Have a great family and friends.
d) Meaning - You can put your work within a context of your existence.
e) Accomplishment - Meeting goals.

Voila ! Once we break happiness down into it's factor variables, the problem is not daunting anymore. Facebook pictures show people eating rich foods and visiting strange places. On the surface of it, people are not demonstrating happiness, they are only showing off one aspect of it, likely pleasure.

So my first solution to my friend's philosophical problem is that he needs to determine if these folks are really happy. Is one variable sufficient to do that ?

Ok, let's go further than Martin Seligman by introducing the concept of an objective or subjective test I learnt in Law School.

Something is subjective if they person claims to be the case. Pleasure, Engagement and Meaning should be held to the subjective test. Whatever makes you happy that makes you wanna post it on FB !

An objective test is independent of your internal state. Legally, judges create an imaginary creature known as a reasonable man to determine if the test passes or fails. Accomplishments and Relationships are judged externally. This is a public victory which does not depend on your subjective evaluation.

Some folks may in their course of lives focus on an internal scale which measures happiness. That may be wiser, but from the point of view of an outsider, this is internal and he cannot judge whether you are really happy or actually a nervous wreck ( Only the person can judge if he derived pleasure from the experience).

Of course, focusing on external/objective measures of happiness can backfire if it it is not accompanied by a private sense of victory.

In any case, we get choose what we want to do with our lives.

Suffering is a choice.

Studying like crazy during a term break is certainly not pleasurable, BUT :

a) The work is engaging.
b) We are struggling together as classmates and slowly building professional relationships.
c) We are rebuilding ourselves to be better.
d) We are getting a pretty prestigious credential.

Yup, for most of us, we don't have nice pictures to put up on Facebook, but look at what was gained when we decided to forego pleasure.

I think that's the consideration we need to make in light of the grander scheme of things.


Tuesday, September 30, 2014

What tools in the Arts and Law can be used by an investor ?

After Hell week, my class started getting bombarded by essays and more written work so I am unable to put up more postings for quite a while but today is a good day, I just finished a 2,500 draft of an essay I was supposed to submit in November so it puts me ahead, to, well... do more advanced work for my classes.

One of the ideas I was obsessed with that ideas are "weaponizeable". Ideas from disparate fields can be integrated together to solve tough problems within a domain and even provide insight to practical problems in daily living.

It started during my engineering days when I was doing some object oriented programming. I was sort of into Philosophy then and became acquainted with Plato's Theory of Forms. I always felt that the way software engineers disrupted structured programming by coming with OOP in those days were really inspired by Plato. You need to define what an abstract idea of an object is, and then subsequently you need to write code to instantiate the object to be used in the real world.

Of course, it went on in my finance writings, I felt that frugality always had roots in Calvinism and Stoicism. Breaking away from the hedonic treadmill is very similar to the Buddhist concept of Nirvana. If you really want to delay gratification and save money, you are probably better served by reading Marcus Aurelius and Seneca than Robert Kiyosaki. If you want passive income, reading Jane Austen can help retool you into becoming a Mr. Darcy.

In Law School, I try to push the envelope in my presentations, recently taking a risk assessment model known in IT audit ( Risk = Probability of Loss x Loss amount ) I picked up when I did the CISA exams  and rigorous applying it to resolving some problems with sentencing in crimes of negligence in Singapore.

I am trying to share this new approach of finding gems in the Liberal Arts and Law into looking at investment ideas.

Sociological Imagination

Sociological Imagination was taught to all final year Engineering students in NUS. The idea is simple - You take a simple social observation in your daily life and ask yourself, what are it's implications in the grader scheme of things. Sounds airy fairy enough ?

Not quite. Beyond the financial statements that you read, applying a helicopter view to your finances, can help assess the outcome of a investment scheme.

Say you like SPH as a stock, it's a great yielding instrument and you get to own a publications monopoly. Apply sociological imagination you know that SPH is closely tied to how far the government will go when it comes to freedom of speech. Most of the income is in Singapore dollars and you can expand your scope to include your projection of the Singapore economy.

I think most practitioners of the sociological imagination tool commit a lot of logical fallacies. You run the risk of reading too much into a incident. If one moron heckles a bunch of students with special needs, does it reflect upon the stupidity of society as whole, the failures of our education system, or it's simply a stupid moron with a very dubious personal agenda ?

Which leads to my second tool.

Ratio Decidendi

Lawyers have a way of confounding everyone with Latin terms. When we figure out the ratio of a case, we are just asking ourselves to summarise the judgement into one line which would be the same decision that will be made in future cases.

I think something magical happens when a divergent tool like the sociological imagination encounters a reductionist tool like ratio decidendi.

You get the best of both worlds.

SPH is a stock. It may be grounded by how the government views freedom of press and tied to the Singapore economy. But we are now required to ask ourselves what drives SPH stock, in particular, what drives its dividends for someone like me.

IMHO, my one sentence after all the considerations is that the dividends are driven by property rentals like Paragon Shopping Mall. Absent property in its current portfolio, I would not really like to own a publishing business which is rapidly being disrupted by e-books. If you arrive at the same conclusion as me - you might be better off looking at the cash flows from SPH REIT instead.

I have close to 30 stocks in my portfolio, having a key driver or ratio decidendi for the stocks in my portfolio allows me to balance my school and my finance activities and fine tunes my sixth sense when I read about the current affairs in the newspapers.

In conclusion, I think at this phase in my midlife, I am really trying to approach everything as a fox. Law school is quite foxy in nature as opposed to the hedgehog approach of engineering school.

A typical LLB student can at best approach a legal problem as an LLB student. I like to see myself as a little different, I will not hesitate to attack a legal from an engineer, programmer, project manager, auditor or a finance perspective.

The more models, the merrier.

Sunday, September 21, 2014

Going through hell week !

I'm going through hell week and have nothing much to share with the readers.

Apparently due to fate or some may even argue, good luck, SMU has decided to slam me with three subject presentations over 7 days and a graded legal memo, making this the most intense week in the entire semester. Things got so bad, I had to cancel my Dungeon's and Dragons game and I did not even bother monitoring my portfolio even with the talks of Scottish Independence and the actions of the Fed.

Here are some random thoughts until I can come up with something more interesting :

a) Becoming a student again can save money.

I noticed that my expenses have reached the three digit level this month. There were so many cases to crunch and books to read that it's impossible to spend on other pursuits, I can't even hang out with my friends after school.

b) Scottish Independence referendum turned out to be a non-invent.

I was following this pretty intensely and actually hoping that the Scots will decide to leave the United Kingdom. Singapore left almost 50 years ago and we're doing ok, But I acknowledge that economically it's better to stay together. Damn, I was hoping for a cheaper pound so that I can go shopping for RPG books at the Orcs Nest at Charrings Cross Street.

On the whole, people are rational and voting for the wallet sure beats some nationalistic sentiment.

c) Philip Holden's Critique on University rankings.

If it is'nt for my punishing schedule, I would be railing at this article full time.

In Singapore, English Literature majors do pretty well and get fairly decent jobs. This needs to be sustained by local universities keeping their good reputations which means that we can't really negotiate with KPIs which rank universities. I rely on the good name of NUS and SMU when I look for jobs in the future, we're in a tough market where many US graduates might settle to work as Baristas in Starbucks.

I think the tirade is too similar with William Deresiewicz's appeal to bohemian authenticity over getting a solid job in the industry.

Hey we can't live on ideals. I say we keep the KPI. That might prevent more academics from holing up in their ivory towers.

Anyway, hope that I can write a better article next week !

Saturday, September 13, 2014

What would I do if a start-up exit made me a multi-millionaire ?

Of recent interest is that we are starting to hear about successful start-up exits in Singapore. I really enjoyed reading about the interviews with these successful entrepreneurs so I am writing this speculative piece. I think Tech is very much on the rise here and with more talent becoming engineers, we could be hearing about a lot more success stories in the future.

Of course, being a small-time finance author and university student, I don't expect a real start-up multi-millionaire to consult me, I'm merely speculating as to what would I do if I struck such a large jackpot, please please allow me to indulge in this speculative exercise.

Here's what I will do with my multi-million jackpot :

a) Buy a house without a loan.

Maybe these founders already have a home. But I think that the first priority is to clear all housing loans on your primary property. As much as some loans are classified as 'good debt'. Having no loans provide a peaceful state of mind.

We need to distinguish the ability, willingness and need to take risk. As a successful business who already exited, you have the ability and willingness to take on more debt. But in my view, you don't need to do it.

b) Ensure that you have a reasonably risk-free source of passive income.

Once the home is secure, the next step is to ensure that all your basic needs can be provided by passive income. The source of such income can vary, you can buy rental property but I prefer REITs, business trusts and high yielding stocks. A portfolio which yields 5-7% is a reasonable number and can even provide a reasonable amount of growth. You need to determine how much of monthly expenses you have and invest a sizeable portfolio to cover your needs. $1,000,000 at 6% is a pretty solid $60,000 or $5,000 a month.

If you are unsure about how to start, begin with a selection of the largest blue chip companies in Singapore or an index ETF.

c) Get yourself educated financially.

I think this is where my advice is the most unconventional. I think start-up successes are very confident individuals and many of them want to jump into becoming a venture capitalist. I think that is not a good decision. Start-up founders should be aware of how risky tech investing is and they need to account for the fact that their success may make them over-confident in their assessment of these tech businesses.

Once your basic needs are met, the next step is a solid and rigorous financial education. You need the knowledge to cope when your private banker or financial advisor throw you a curve ball. As such, an 18 month investment for a Masters in Applied Finance in SMU is a really cheap buy if you can rack up a high GMAT score. Private bankers won't teach you about option greeks, free-cash flow,  bond duration and convexity, but the good folks in SMU would.

I think that we should trust the bankers and financial advisors who try to give us advice. Bankers want you to keep your money with them, so they would prefer that you keep your risk low rather than you getting your high returns. I noticed that many HNW guys have a really conventional and low yielding blue chip portfolio - bankers just want to keep their businesses, they won't risk their capital. Financial advisers are worse - they only care about commissions.

If you want to take more risk, the only way is to educate yourself and eat your own dog-food.  

So this is all I have for now. In many of these articles on the successful exits, I think there is too much emphasis on jumping back into the tech world with guns blazing and venture capital funding. Perhaps it might be better to take steps to secure your victory and ensure that your family is looked after for life, then take steps to cope with the complexities of finance.

I'm fairly sure that the financial models you learn can be used to value your future investment into that start-up that will change the world.

Saturday, September 06, 2014

September 2014 Update : From Retiree to Law Student.

I've just survived three weeks of law school, just sharing a personal update to keep in touch with readers.

a) Drowning in legal cases.

Right now, the largest part of my my life is tackling legal cases. In SMU, merely reading up on cases and getting a general gist of it is not enough. As we can be called upon to introduce the cases on the fly, we will need to be able to demonstrate that we understand the cases well, so reading off text is not a good idea. A large part of my current life is figuring out what is the minimum reading I will need to convince myself that I know enough. If I get too obsessed with the details, I will not have time to cover all the cases. If I am too light on my reading and skim too much, it may affect class participation grades. As in all things, being absolute noobs, we are trying strike the perfect balance.

Although I can say that I'm actually happier spending all my time reading about cases which are really relevant to that investor part of me, this aspect of my return to University life has not met my personal expectations.

I was joking to my classmates that I see a law degree almost as a last bastion of liberal arts in pragmatic Singapore and want to pick up skills in rhetoric - career be damned - but the intensity and rigour of the course along the pressure to seek a training contract, internship and then a career is starting to weigh heavily in my mind.

b) Read Excellent Sheep by William Deresiewicz

I am glad that before bed and in the trains, I was able to read this piece of work which my cousin introduced to me. Perhaps in a later post I will contextualise this piece of work for Singaporeans.

The author paints Ivy League students as sheep who get shoehorned into society's definition of success and lack the courage to explore the world on their own terms. I think the law and medical students are the closest things to Ivy Leaguers in Singapore so it strikes a chord: I had a good read but I remain unconvinced by the author on many major points.

Success and accomplishment are as important as developing a philosophy of life. The author's insistence that students develop that bohemian outlook on life is laughable, Singaporeans do not live in a welfare state ( Unless you have dividends ) and neither do many Americans. Reading the Great Books is useful, but thinking deeply in a vacuum is worthless. Austen and Eliot would be much more useful if the reader can already write code, draft laws or create investment portfolios.

The same problem infects all the English Literature types who recently took up so much limelight in the Singapore news.

Taken to the extreme, English Literature is a religion, it has it holy books by Eliot, Austen and Shakespeare. Literature has it's own fundamentalists, fanatics and zealots. Science and engineering, at least, is falsifiability to keep scientists humble which distinguishes it from the literary arts.

Of course, on the other hand, legal education in SMU is the opposite extreme compared to the bohemian authenticity espoused by the author. The case load I get occupies so much of my time that I wish to have more time to reflect upon my views on humanity and philosophy towards life. So reading this book was done at the right time: It looks like me and my classmates are heading in the direction of becoming Excellent Sheep just as Deresiewicz had theorised.
c) Personal finances

September is a good paying month for dividends, I have already socked aside some cash to pay for next semester of fees. I have stopped tracking my net worth for now and will make minor changes to my portfolio to increase my diversification further. I think the newer REITs and Business trusts launched in 2014 may come under some selling pressure so I expect to do some bargain hunting before the month is over.

My aim so far is to retain or grow my net-worth throughout my stay in law school. This way I can reduce some of that pressure to get a training contract and really focus on thinking like a legal professional, which I think is the real holy grail of getting back to school in mid-life.

d) Other areas of my life

Of particular concern is that I have not been looking after my diet and exercise lately. Mooncake festival always gives me a sugar high and I've been neglecting my running to clear all my cases and consolidate my understanding of the law.

Looks like I need to buck up on my health next week.

Hopefully I can do up another blog article early next week.

Friday, August 29, 2014

Learning how to learn.

I enrolled into the course Learning How to Learn: Powerful mental tools to help you master tough subjects by Dr. Terrence Sejnowski and Dr. Barbara Oakley as part of my personal preparation to go back to law school. If you are an adult learner, I strongly recommend that you signed up for the course because there has been many new developments in field of adult learning since the last time I was at school.

This blog post is part of the project submission of this online course.

As part of the course requirement, I will talk about three major things I picked up from this course and how I am in the process of trying to apply myself in law school.

a) Focused and Diffused modes of learning.

The first key learning of learning that there are two modes of learning. When you are aggressively studying, like in my case, when I am trying to read a legal case or a text-book, what I am doing is focused learning. This is the hardest part about law school. Particularly alien to most engineers are Latin terms like Ejusdem Generis, Stare Decisis and Oribter Dictum. I would even go further to say that event he English terms are alien to most readers. What does it mean when something was based on a demurrer ? What happens during a promulgation ?

Prior to this online course, I was very old school when it comes to learning. Learning is rigorously attacking problems and solving sample test questions.

Fortunately for us, there is an alternative form of learning: Diffused learning is allowing your mind to rest. It occurs when you are taking a stroll and having a walk. This allows all the work that I've done during focused learning to settle down in my brain. With diffused learning, my mind is relaxed and allows me to form Eureka moments to link ideas together holistically.

My primary form of diffused learning is to play Dungeons & Dragons with my friends. In a tabletop RPG game, I play the role of a Dungeon Master (DM) , someone who referees a game and ensures that it runs smoothly. A role of Dungeon Master is very similar to that of a judge, except a whole lot more fun. Players will make up all sorts of rulings where an ambiguity takes places, it is up to the DM to arbitrate disputes.

One example in my game are the rules of a spell ( In D&D 1st Edition ) called Firetrap.

The rules state that:

You can cast a Firetrap at at any closeable item. Eg. A chest, a cover or a lid.

A mischievous player, reasoning that his mouth is closeable,  wanted to cast Firetrap spell on his mouth and bite a fellow player character.

In ordinary cases, most DMs would not have a sufficient to cover strange rule anachronisms in the game, unless this DM is also legally trained.

To resolve the issue, I was able to determine that a purposive interpretation of the rules mean that the spell was meant to be cast on inanimate objects. Using the concept of Ejusdem Generis, a reasonable ruling would be that a mouth is a living organ and is not the same category as a chest, cover or lid.

This is classic diffused thinking at work. I get to play part of a judge in a stress-free situation and my players constantly come up with crazy game rulings to test my powers of adjudication which reinforces my understanding of legal theory.

b) Metaphor, Visualization and Storytelling

The other concept I learnt in this class is the power of metaphor, visualization and storytelling. I have employed this concept to assist me in memorizing legal cases.

I noticed that a few classmates actually used Mind Maps to reinforce their recall of materials. I thought, how could I take this step further and turn the crunching of legal cases into a game. At the same time, I was playing with my daughter and noticed that my wife was having a hard time trying to get her to draw anything on a piece of paper.

Then I had an eureka moment - What if I could play Pictionary with legal professionals ?

I would draw a graphical depiction of the cases and get lawyers to guess what they are. The above diagram shows the various pre-Donoghue cases which leads to formation of the Law of Torts. From top to bottom they are as follows :  Winterbottom v Wright, Heaven v Pender, George v Skivington and the famous case of Donoghue v Stevenson.

As I move towards exam preparation, I will of course create mindmaps but I will also use pictionary to test my understanding of cases.

c) Life-long learning and broadening of one's passions.

The final point I would like to make is that is that the journey of learning never stops. Having done engineering and finance, many people would think that this is enough for a more than a lifetime.

I choose not to think that I have invested my time in three disparate fields but instead see my legal training as extensions to what I have learnt in engineering and finance school.

Ultimately, this can lead to interesting questions and developing new capabilities :

a) Can a random forest algorithm operate on a data-frame of key legal terms used by a prosecutor to predict the chances of a favorable verdict ?
b) How would a verdict of negligence affect the next dividend cash flow for a business trust ?
c) If you wish to draft a regulation to prevent the use of machine learning in a financial market, how would you word the regulation ?

Knowledge comes before Wealth.
Wealth comes before Power.
With power, you can have all the toys and fun you aspire to in your life.