Sunday, April 02, 2017

If you're a eunuch, here's how to grow a pair !



When I left the private sector, I was already financially independent. But I wanted to see if I could get into a career which would stretch longer and give me work life balance. Unfortunately, my tenure out of the private sector was very short and I never managed to get used to the culture of the public sector.

It's actually sad what public servants had to endure in the past few months. One senior civil servant implied that they were paper-pushing eunuchs and then Parliament took turns to take pot-shots at them. Having some experience with bureaucracies, I realise that a lot of civil servants are stuck in their roles and had nothing to do with the red tape they are subject to every day.

When I was a eunuch, financially, I was at my peak. I had great pay, a superb 7-digit portfolio and fairly decent work life balance.

My day job however, meant be treated like an asexual bureaucrat when I engaged the folks in Blk 71. One founder of an up and coming startup I met then was drunk and started going on a tirade about the Singapore government. Another prominent boss, treated me like lesser being and only wanted to engage me through his secretary intermediary when I was 3 metres away from him. Some of those companies which the government eventually tried to support happily made verbal arrangements with my team and then casually broke it off. One guy even wanted to teach us a lesson about making money and capitalism ( when my personal dividends probably exceeded his net profits that year ).

But the work of eunuch meant that we have to grit our teeth and do what's best for the country. I actually take "servant" in public servant seriously. If I am a servant, I serve.

This was what eventually what broke me - SME bosses are polite and deferent when they come begging for the money we collect from the tax payers, but in their eyes we are lesser beings because we eunuchs live in the comfort zones but get the privilege of doling out financial support.

They are the ones begging for tax payer handouts but we are considered a lower caste than they are !

Anyway, eunuchs also want their freedom one day, here's how I think you can break free :

a) Exploit your higher pay by setting it aside

For at least the first 7-8 years of your career, your salary will be higher than your private sector counterparts. The trick is not to be smug  about it and set aside as much as you can to maintain your higher salary glide path. There is nothing stupider than seeing a newly signed on regular SAF officer blow his first lump sum sign-on payment to buy a car just to look cool.

I see a lot of middle management in the government getting overly comfortable and driving big European cars to overcompensate for their lack of mojo and over investing in children's tuition. ( It's kinda funny driving a BMW to attend a 10 hour meeting with a senior director who treats everyone like shit and probably no longer have any employable skills. )

This is a golden handcuff designed to trap you into a the life of a eunuch forever.

b) Equities are the key to an early exit.

The salary of a  civil servant is not only high, it has a bond-like characteristic. This means that unlike the private sector equivalents who face retrenchment all the time, you can go for an equity portfolio with a higher risk.

For officers at a younger age, you may even want to read about leverage and see if you can craft a 130-30 long short portfolio to accelerate your gains further.

c) Go for total returns and downshift to a dividend portfolio later. 

For a person who starts a career with the government, the best portfolio is to optimise for total returns which means targeting various factors like smaller companies, low P/B and P/E values for 7-8 years and going for 2 economic cycles of returns ( a backtest may result in 20% p.a returns on a Bloomberg terminal ).

Once your portfolio hit exit velocity ( $300,000 for a single man yielding 8% and putting $2,000 every month ), you can start plotting your exit into the private sector.

d) You may need to invest in retraining.

Retraining needs to be a priority before you get into the private sector. At this point, good luck, maybe there is a way to use the Civil service college to pick up some useful skills instead of buying an expensive MBA which was the best method of exit in the past.

e) Entrepreneurship is really tempting but...

Some government servants do eventually succeed in business and they come with a better appreciation of the schemes available to build a startup. There is enough literature on the odds of success.

Make sure that you stick with tiny bets and don't touch that $300,000 pair of testicles you worked so hard to develop just to stop being an eunuch again.










7 comments:

damien said...

Hey Chris,

Thanks for this post :)

Createwealth8888 said...

One Account Mgr told me that some big bosses treated him like their servants to run errands for them for goods and services sold by his company.

Christopher Ng Wai Chung said...

I am actually quite deferent to anyone if I have a role to play based on my formal day employment. After all, even Superman had to be Clark Kent to earn a living during the day.

But people in general need to be careful. Civil servants do not remain as such forever. Many try their luck at business and the private sector in the future and bring whatever biases they have out with them.

Case in point, one SME owed crowd-funders millions of dollars.

Guess who was savagely seeking a bankruptcy order to teach an example to all other SMEs who borrowed money from crowd-funders.

SGDividends said...

Why 300k? That's a low 6 digit but u exited with 7 digit.

Christopher Ng Wai Chung said...

For a single male, $300,000 generates $2,000 per month of passive income. If you really want to get out of a bad patch, the money will let you retrain and rebuild your career.

A civil service career can allow $300,000 to be accumulated really quickly as starting salaries are really high.





gagmewithaspoon said...

how long does it take before a 300k can be saved?

Christopher Ng Wai Chung said...

if you are pubic servant, it all depends on your grades and CEP.

It's not really long if you have a 1st Class Honours degree because I heard that some starting salaries can be as high as $4,750. If you can sock away $40,000 every year, you might be able to get out in less than 7.5 years.

For most guys, that's only 32 years old.