It's my 41st birthday today and it's been a rough year, unlike many of the other bloggers, I will not be talking so much about my achievements but more about how taxing this year has been for me. At the end of the holiday season, I will look to 2016 and see what we can possibly look forward to.
I joked that I am going through what possibly is the most expensive mid-life crisis compared to most of my peers. If you look at a low-end Maserati Grand Turismo, it costs about $492,000 in Singapore. Law school costs only $70,000 but after considering the lost income from my day job, the opportunity cost goes somewhat to around $550,000. This is why I never went beyond KL for travels this year.
The year started well for me with folks born in the year of the Tiger expecting a good year ahead. Unfortunately the tides turned and soon enough, 2016 became a year I would rather forget.
At age 41, I am reminded of my own mortality and limitations and managing one set of number and expectations does not mean that events would turn the year into some sort of mid-life nightmare.
a) Finance - 2015 is a challenging year for investors.
Most of us had a bad financial year with our investments down. I think the viciousness of the bear has been greatly exaggerated. While it is true that we're 15% down, most of the dividends investors had cashflow to offset the losses. What is important is that yields are up and bargain hunting can definitely take place this holiday season.
Of course I was also hit by increasing interest rates, my mortgage swelled from $1300 to about $2100 this year. My CPF can last about 3-4 more years under this arrangement but in two years time, I will start topping up my CPF with my dividends so this can still be managed better.
My personal take is that 2016 would not be as bad as 2015. Japan and EU continue their QE program and China is trying to grow its services industry to offset their poor economic growth. I hope that next year might be surprising on the upside.
b) Scored A+ for money management but lost the war to retire early !
On this money management front, I was able to clock 24 months of unemployment without eating into my capital and fully paying up my school fees of $70K. While my finances are expected to improve over the next year, two specific events caused me to realise that my retirement plans may not be sustainable over the long term.
First incident is that when my wife applied for Singapore citizenship, I had trouble convincing authorities that I was not a burden to the tax-payer in spite of being an unemployed law student. Our government is still not equipped with the procedures to cover income investors. I had to compile a report on dividend cash flows and had to deal with an ICA officer who was just puzzled that "stock market sends me money on regular basis". In a more unsophisticated country, I would have been accused of practicing witchcraft.
The second incident which may have killed my retirement plan is when I tried to hire a maid to look after my dad. Without an earned income in my IRAS filings, I was not allowed to be the sponsor. My dad had to put in his spare cash of $50,000 into a fixed deposit to sponsor his own maid as all my money is tied up in my CDP. This convinced me that Singapore society, as affluent as it is, it does not have the infrastructure in place to recognise dividends cash flow as a valid substitute for earned income. A CDP statement, no matter how large, is no substitute for a FD account which puts us in a bind because of the cash drag.
c) Law School become exponentially harder at year 2.
I struggled academically this year with substandard grades even though I had experienced my strongest year of intellectual growth throughout my entire life.
Having done Engineering as an undergraduate, I had been hiding math equations and physics problems all my life having found my comfort zone during my JC days. Even when I did Finance, they were just some CFA maths problems with a slightly business bent. There's always come computer tool or app to solve a technical problem. Studying Law is the first time in my entire life I could go through a semester without aceing a single subject.
It took me three semesters to realise that Law school is not a joke. First two semesters did not even count because I did Contract Law as an engineering student and had some exposure to managing outsourcing contracts at work. as a consequence, I have always been casual with my cases and did not put a lot of emphasis on the actual written judgment preferring to build on top of the case note. This cost me dearly this semester.
Nevertheless, there is value in struggle when learning something new. The alien concepts I learnt this semester cannot really be googled off the internet and consultation on these concepts can take a lot of time and cost a lot of money.
In summary, it's comforting to know that I qualify for a difficult subject in a world class institution. I will never be as brilliant as some of my classmates and but I can rely on my experience and technical know-how to make it in a new industry.
And next semester will be an even more challenging one because...
d) Tough six months ahead in the personal front.
Balancing the toughest semester with family would be the hardest challenge I ever faced next year. My mum has been ill and has an operation last week. She is recovering but further checks will confirm whether she needs a round of chemo-therapy. We may made the decision to avoid it as far as we can but it's all in the hand of the medical specialists. This was also the year when I've been shuttling in and out of hospitals.
On a brighter note, I will be also be a new dad again to my son who will be arriving just before Chinese New Year.
2016 is all about juggling multiple balls in the air : ensuring that my mum gets better, financing the birth of my new son, covering three of the nastiest subjects in the JD program and hunting for a training contract with hopefully a decent law firm.
I hope and pray that I would have more positive message same time next year.