The hardest resolution is maybe not to have any resolution at all

 

I was reviewing how I was feeling last year at around the same time and found that I was pretty pessimistic about 2023, and I was essentially correct about how the year unfolded. Things will look terrible until we get a clear signal that interest rates will stop rising. After that, things will look much better. I will leave the details to a Dr Wealth article which I completed that summarises the performance of both my ERM and AWP portfolios.

2024 will be a lot sunnier than 2023 for investors. But for me, getting thyroid eye disease would mean changing my priorities for 2024 - basically, no new initiatives unless my eyes get better. 

So, instead of listing my resolutions, I will list the stuff I would have loved to do next year, but I should hold back until I feel better.

These are my anti-resolutions:

a) Writing a new book on personal finance.

This December, I tried to have a month to complete the fantasy and non-business books I have on my KIV list. I was pleasantly surprised by Haruki Murakami's Novelist as a Vocation. I found the book as gripping as any of his written works as he described his creative process and view on creating works of fiction. One point that has left a deep impression on me is that a great novelist is the kind of person who can look at a situation and store it in his mental cabinet without casting judgment on it. Folks who are compelled to judge are better off being critics or journalists. 

I spent most of the week hanging out with friends and going through social interactions without many filters. I have already warned a pal about a business that could be a front for money laundering operations. Explained to an ex-colleague why an investment scheme may be illegal or a con job. And in a New Year party, why may a young person be a product of assortative mating, is about to engage in it very soon, and thus, part of the problem of income inequality.

Of course, I'm not in the business of writing novels, but it is high time I author a new book that summarises all the new insights I gained since becoming an investment trainer. I hold myself back because the idea of finding a good publisher is quite tempting, given that the proliferation of AI books on the Kindle platform makes self-publishing unsexier by the day.

b) Starting a new channel for lifelong learning

2023 has been a disappointing year for me as my eldest has gone through her PSLE. Without going into much detail, it was more my fault than my kids', as we did not play the game like other parents did. I also need help to convince my daughter to learn the technique of studying rather than actually the subjects in a secondary school as Sec 1 is not much of a consequential year. 

As there are many experts in the learning field, like Barbara Oakley, Scott Young and Cal Newport, I could start a video channel on some tips and techniques to learn better. But this would require my YouTube channel to be repurposed for this.  

If I attempt this, it would require a lot of personal rebranding, but it can lead to more students for my investment courses.

c) Get Overemployed like a Gen Z worker

One of the more remarkable things I see younger workers do is over-employment. They got hired by two employers and delivered enough to keep both happy and draw double the salary. I already have a reasonably efficient setup that allows me access to teaching as part of a private business and a public institution. It is very tempting to find another institution to work for to teach subjects that, well, I need to be qualified to teach.

I've already imagined what a cybersecurity programme would look like for legal executives this year, so I should ask for more work. Another more severe project is resurrecting my cryptocurrency course and running it entirely from Python scripts like AWP. This would mean that I will take three Dr Wealth courses simultaneously. 

As we head into 2024, most folks will try to improve themselves by tackling big goals. I'm one of the few with fairly detailed objectives I need to restrain myself from doing. 

We will see whether, as we enter 2025, I will fail in my resolve and attempt any of these objectives. 

 

 

Thoughts as I enter my final year of my 40s

 

Thanks for all the well-wishes coming in from social media. 

I'm officially one more year from my 50s, and the latest health scare has led me to think about what will happen soon. Typically, entering the 50s would mean crossing over from the unhappiest moments of your life and reaching peace with yourself. For the folks I know who reach their big 5-0, many take a long trip somewhere to reflect upon their lives. The question is whether I should do the same since I enjoy travel quite a bit.

With almost 2/3rds of a person's spent, it makes little sense to still think about achieving more and hitting more life goals. Only some people can be Colonel Sanders, who started KFC quite late. The over-arching theme for someone who got into life's third trimester is some kind of gentle retreat and reprioritisation of life. 

Let's go through some of these strategies I've observed.

a) Compromise

For some folks, compromise is a strategy. As we age, only some get to meet all their life goals. A person who could not get a publishing advance has settled with self-publication, or like myself, I had to pare down my goals of doing legal work to becoming a law lecturer. 

A compromise is good because it conserves energy, allows the attainment of small wins, and enables us to refocus on other important matters in our lives. 

b) De-invest

While I'm still fully vested in the markets, I have told my community my wish to stop applying leverage to my portfolio because I'm simply too old for this, given that I'm still leveraged with my residential property. This does not mean that leverage is terrible as interest rates drop. 

Anyway this is not meant to be a point about finance. We've invested quite a bit in our careers for most of our lives. All it takes is one restructuring exercise to end this. I'm seeing this happen to many folks in their 40s, and inevitably, the strain will cause them to retreat from their peers, isolating them further into loneliness. 

That being said, I recognise how difficult it is to do this - it's something that even a five-digit monthly dividend cannot solve. For me, I try to run multiple gigs to maintain my relevance and find something new to do every few months. 

c) Re-Focus

Finally, there will be things that you will not like in your 50s as much as in your younger days. I've always enjoyed GunPla, until my trip to Japan when I discovered that the kits here are marked up 50%. Since then, I've realised that Japanese goods are a scam. Just because something is Japanese is an excuse to sell $25 sandwiches and $50 Demon Slayer figurines. I hope someone takes revenge by going to Sinjuku to sell Ang Ku Kueh for 500 yen.  

One of the things about getting older is that nothing excites me very much. I'm bored most of the time. Reading is probably the last thing I do with enthusiasm, but turning it into a social event is quite challenging because a lot of the book clubs here are dedicated to the elderly. Many must attract the ambitious and dynamic types I like to hang out with.

While not totally healthy, I am getting increasingly interested in this hobby of solitaire war games. These wargames should not exist as a hobby because they can be converted into software. But it is a thriving hobby for geeks and wonks. You can be commanding the Luftwaffe one day and then trying to survive a US presidential term the next. 

d) Re-dedicate

This leads to my point about people. I observed folks in their late 40s begin to tire of others and their peccadiloes. Some friends are talking about just bailing out. In many cases, this move is justified, as I've done this myself a couple of times - some relationships don't add much value. We came from a generation lacking social media, so hobbies were a unifying theme for making friends. Things are very different these days. I don't have to join a D&D group if I don't like their wokeness. 

But note that making friends is more challenging as you age, and loneliness can be fatal, so remember to replace this with networking sessions. If you don't want to go alone, go with your remaining pals. And these days, I realise that my students often make my best pals. 

So for now, I leave these four points. 

Perhaps in the New Year, I will talk about my plans for 2024.

Have yourselves a Merry Christmas and a Happy New Year. 

Personal Update

 

As I'm turning 49 next week, it's a good time to update everyone about my life.

a) Managing my Thyroid Eye Disease

Last week, my left eye was occluded, as I can see better with one eye than with two. But a couple of days ago, I got a piece of prism lenses, which improved my look slightly, but there is still some distortion in my vision, and it may take weeks to get used to. But at the moment, I'm struggling to get back to my old productive self, which is challenging as my left eye sheds tears easily, and I give my eyes a rest by taking multiple naps a day.

But the prism lenses are good as they buy me time to transition to government-subsidised care, which can only come online in mid-January. I can't trust my private provider anymore as my options involve high costs and hospital stays - perfect for taking advantage of folks with a high-end H & S policy. The government doctors actually confirmed that outpatient options are available. 

If there's any wisdom readers can pick up from this, incentives matter. If doctors get paid a significant portion of scanning fees, you will always be made to take MRI scans. For folks dealing with information asymmetries in medical care, you should always seek a second opinion, preferably from someone with different incentives. 

Government care is not perfect as my diabetic management can only occur once every 4-5 months, so I am now interleaving visits to a private and govt practitioner. 

b) My side gig

I've started sharing more of my work on my side gig with an educational institution. For three hours a week, I teach legal executives a program on issues running law firms and the specific IT software that comes with it. After my stint at a law firm ended, I wanted to retain my legal knowledge, and I tried to minimise disruption to my training business. 

The work is slowly gaining momentum, and I'm working on a cybersecurity program for legal executives. My career interests me, but I want to remind everyone that I'm a gig worker, and my materials may need approval. 

Also, I might need help maintaining my gig after this one is over in 6 months. This is purely to supplement my dwindling business, which will recover in 2024. 

c) My investment training business

I can handle anything else in my business if I can survive 2023 with my health issues and poor sales. I now run a fairly stable program investing in a dividends portfolio in the local markets and a one-of-a-kind program on operating your own robo advisor to invest in internal ETFs. 

The markets will take a while to recover, but I will struggle much less in 2024. 

d) Financial markets

Regarding investing, 2024 is going to be a good year as interest rate increases have come to an end. I still maintained most investments in REITs, so I would do okay. There could be a chance for a massive upside if a ceasefire occurs or interest rates begin ratcheting downwards. 

But for personal reasons, this is not a moment for aggressive risk-taking. As attractive as getting some leverage seems like a good idea, I do not need to make that much money, and I should keep some reserves for medical emergencies. 

e) Books I am reading

I'm not reading at a pace I like as my eyes get tired quickly, but this month, I have restricted myself to non-business books. I've covered a lot of ground on fiction and tackled a history book that discusses multiple What-If scenarios. I suspect this book will take me all the way into 2024. 

Overall, 2024 is a year of consistent change and evolution - I thrive on change and improvement. If not for my eye condition, I have planned a year of plenty of travel and even the publication of a new book. But at this moment, it's probably not wise to be too ambitious as managing my condition and maintaining all my gigs is already a massive challenge. 

2024 is likely a static year for me. I'd like it to be a lot more dynamic and bring in new stuff to do and meet new friends, but who am I kidding - I turn 50 next year!

Catch you guys again once I turn 49 on Christmas.

More struggles to cap an awful year !

 

Soothsayers were not kidding when they said that this was not a good year for folks like me. 

Three weeks ago, I started getting double vision and thought that there was something wrong with my new progressive lenses. After multiple visits to the optician, they said that my eyes were misaligned and only an opthalmologist could resolve the issue. So I thought I would resolve it quickly by using the private sector to get help.

The problem turned out to be much more complicated than I thought. I was diagnosed with Thyroid Eye Disease and after seeing three ophthalmologists, getting an MRI, and spending over $3k, I was able to order a new lens to mitigate my vision problems. Sadly for me, treatment in the private sector will cost me a five-figure sum over the next year, and I've decided to go back to the government-restructured hospitals for help. It's slower, but at least I can deplete my almost-full Medisave account.

( Concerned readers can note that tomorrow I get to see someone in TTSH, so please don't bash our excellent medical system here. )

So as of now, I can see clearer with one eye than two so I told the clinic to cover my left eye while I wait for my new lens stickers to arrive. 

The strain of managing private-sector clinic visits, research and costs has caused me to skip investing my latest tranche of training fees from my training problem. I taught 32 batches of students and this was the first time I held back in case I needed liquidity to pay the medical specialists. 

So you can imagine how I felt when markets rallied just as I predicted last week with REITs leading the charge?

Fortunately, I have not sold any holdings since interest rates have gone up and the fees are a drop of the ocean like everyone else stubborn enough to remain invested locally, I made a tidy sum today and look forward to an ever better Capricorn effect next year. 

But hey, health is always more important than wealth. Until I actually get a slot to consult a specialist in a government hospital and get my corticosteroids, which can take a while, I'm holding back my funds in the rare probability that my situation will get worse. I even have documents in a folder in case I get into an A&E situation. 

I have also started to obtain contacts for Malaysian private doctors. If I can combine an eye operation or steroid injection with a trip to KL, Girl Maths will tell me that the savings are enough for my hotel stay and shopping to be free! 

Finally, as I hit my 50s, I realise that the game is starting to move from Normal to Hard difficulty mode. There is no way I could have played my cards better, I even started a new gig to stabilise the loss of income from investment courses, but for every step I take forward, I have to take a step back. My only consolation is that at least I'm alive - I was shocked that a number of celebrities have passed away this week. 

Tomorrow, I will be conducting a lecture on Legal Ethics with the use of just one eye.  

 

Letter to Batch 32 of the Early Retirement Masterclass

Dear Students of Batch 32,

It's been a great honour and privilege to conduct a 5-Day Early Retirement Workshop for you.

As I managed to complete successive instalments of this program, we found that the markets have been trending ever lower in 2023. Things have gotten so bad that the equity risk premium we tracked has exceeded 7%. The only time when the Singapore market was cheaper was at the bottom of the pandemic crash which created the most successful class I ever graduated.

If you decide to be plucky and invest this upcoming week in our portfolio your dividend yield will exceed 7.4%, and while there are no guarantees that geopolitics can worsen your performance, there are two upcoming events that may bring your portfolio performance some upsides.

The first is when the FOMC concludes in the middle of next week. If the Fed does not raise rates further, an investment into REITs should enjoy a nice rebound.

The second is after the New Year holidays when markets start 2024 with the Capricorn effect, which will bring further respite to Singapore stocks that took a pounding in December.

Beyond January 2024, I would like to think that luck may play a better role than skill. Things will look more positive if China demonstrates more resolve to stimulate its economy. Or perhaps we will see some glimmer of hope for peace in the Middle East. As far as Singapore is concerned, we’ve played our cards the best we can with a 30-day visa-free travel arrangement, our deep push into AI, and the arrival of Taylor Swift. As I’ve said in class, It’s ludicrous that such a well-run market with such a stable government can sell at a PE ratio of 9.7.

Lastly, I hope Batch 32 will participate actively in the FB group. I look forward to seeing you in the following community seminar slated for end-2023.

Hope to see you then!

 

Christopher Ng Wai Chung

Short Update

 

I don't have a lot of time to be blogging this week because I'm conducting a course every night until the weekend. 

I'm also nursing the tail end of a nasty flu despite being flu-vaxxed.

So if I'm not conducting lessons over Zoom, I'm drinking lots of water and sleeping off my drowsy medication. 

Also, I've decided to do something unusual this December month. In the past, I have managed many book reviews on this blog as I believe it is useful for readers. This month, I've resolved to clear, as much as possible, all the works of fiction or non-finance works I've accumulated or ignored in the past.

So hopefully by this weekend when this blog resumes, I will have some fairly interesting insights from my reads.  

It's a holiday month, so maybe we can dispense with books on investing for just 30 days.

Regular Employment is Dangerous

 

I've got some genuinely crazy fans on the dividends groups. One guy was so crazy and affected by my statement that "regular employment is dangerous" that he sent my LinkedIn profile to a headhunter who promptly concluded that I would never be able to get a job. I might be the only guy who can get a rejection from a headhunter for a job I never even applied for. 

( If you guys are wondering, the job is a robotic automation apprenticeship. I researched because I wanted to hunt down the headhunter and give him a piece of my mind. ) 

Today, I won't be covering the primary details of why regular employment is dangerous. We know that folks here have to deal with outsourcing and retrenchment as part and parcel of corporate life.  

Before I unpack the statement, regular employment is still the best way to attain FIRE, and I've actually turned away some unemployed potential clients because I'm not a miracle maker. So don't go resigning from your company reading this post.

a) Most economic rewards in Singapore go to capital rather than labour anyway

First of all, according to some economic data, in Singapore, labour's share of GDP is around 40+ per cent, which is about 10% lower than in many OECD countries. This means that in this country, we tend to get less of our productivity from earned income. Most rewards do, in fact, accrue to capital owners. Our attitude towards our work should be a means to generate capital because that's how you earn a larger share of our economy today.

b) All employment is time theft

The second reason is that if you look at your life from a different angle, all employment is time theft. At least in Singapore, we have yet to start to reward employees for results, so some folks are still bound by a 9-5 job. Why can't we leave the office when our job is done? There are also very few laws granting staff overtime after they hit a certain income. I think in this new era, we should beware of jobs that take up more of our time than necessary because you can monetise your after-office hours. This covers conference calls with the US and Europe.

But so far, you are not being compensated for it, and we've normalised the theft of time by organizations and companies for quite a while.

c) Reskilling and Skillfutures will benefit employers and may become bad investments of your time

I'm speaking with a lot of authority here because I was the IT certification king in my 20s and 30s. With Skillfutures, everybody is potentially the certification king of tomorrow, and the supply of skills will begin to exceed demand. Thanks to Coursera, the IT certifications kings of the 00s will have gone into extinction. In my case, the IT Certification King has transformed into the Dividends Pig. 

Here's a way to think about certifications vs qualifications. In economics, the Coarse theorem says that companies are better off outsourcing tasks which are well-defined and can be turned into a contract. Companies prefer to hire permanent staff when their tasks cannot be so easily documented and where work requires some flexibility and ability to handle ambiguity. 

Here's the rub: In order to be able to conduct a skills future course, the government must define a syllabus and come up with ways to test students on what they have learned. This is not too different from clearly defining a task. This will ultimately make it easier to outsource to another party. The process is very different from a university degree program that invests time into developing a skill but an attitude to deal with and handle novel problems. 

In my work in adult education, which has nothing to do with investing, I teach and describe things like HR performance appraisal forms. Students can describe them quite well and identify a system. Students are so-so at figuring out the strengths and weaknesses of these systems, but we do spoon-feed it to them. However, students are bad at predicting what happens to a company culture when a performance appraisal methodology is internalised. You can argue that predicting how employees will game the system is well beyond what adult education entails, but I'm quite passionate about ensuring that my students have some idea of how to do this. 

So what does this mean? MNCs and bigger companies will still pay a huge premium for university graduates and folks with qualifications. They can train employees to get skills for their work, but the value in having permanent staff is the general intelligence to gain market share and reduce costs. These guys can use a latticework of models they pick up and apply it to new situations at work ( hat tip to Charlie Munger). 

Basically, what I'm saying is that skills can help you get your current job, but to move up would require more than skills and if Skillsfutures makes skills available to everyone, you won't really benefit from spending too much time developing them. The mid-career degree will become inevitable. 

If regular employment is dangerous, what is the point of following Millennial career influencers who focus on office politics, leadership and networking? When the ones who see themselves as major players in the office are losing their jobs when interest rates go up? 

Fortunately for us, Gen Z is already responding to this devaluation of regular employment. 

My favourite Gen Z invention is overemployment, where highly productive software engineers work on two more jobs at the same time. This will allow them to FIRE even faster and cost them just a small part of their youth. Gen Z in Singapore should exploit the low unemployment rate to do this. You can figure out what to do with your life later. The only caveat is that over-employment must be used in tandem with investing to build capital to eventually replace your earned income. 

Imagine a new-age worker creating a combo chain of over-employment, dividends, asymmetric investing, and geo-arbitrage. Such an influencer does not exist in SG right now, but someone needs to invent one ASAP.

As much as I am now a sceptic about regular employment, downshifting and lying flat is probably a dumb idea. We should see ourselves as time merchants, selling out time for as much money as we can, then using our capital to buy other people's time to balance things out later in life.