Wisdom from "Useless" books

Folks who wish to read up on my financial insights will need to wait a while as I'm having multiple headaches trying to maintain my business, so I'm thinking about my finances a lot. It's just not something I can arrange neatly into a blog article at the moment, I might actually be in crisis mode. 

At the moment, I'm gradually tilting my reading into less practical territory. As I spend hours on a bus to teach evening classes in faraway lands, my reading speed has increased quite a bit, and I have to moderate the pace at which I read the helpful programming, finance, and law stuff I tend to be more obsessed with. Of late, I think that I'm getting some applicable "wisdom dividends" from the stuff I'm reading, so I'm sharing them here. 

a) The Way Home by Ben Katt

The first unusual book I read is The Way Home by Ben Katt. It's not easy to empathise with the author because I find his life very rabak. Imagine spending your entire life serving a Christian ministry, then having a mid-life crisis after experiencing the bigotry of your faith and feeling envious of peers who actually earn more because they built conventional corporate careers. The solution to this mid-life is worse, involving spiritual guides and vision quests and communing with a Jaguar spirit animal. Stuff worse than an RPG splatbook about D&D druids. 

Surprisingly, the book broke my creative impasse, as I've run out of ideas to sell my course on operating and tuning your own robot advisors. Ben Katt's idea is to reimagine himself as a protagonist in his mid-life crisis hero journey, and I thought I could do the same in a future review. To do that I need to take a much closer look at Joseph Campbell's Hero of a Thousand Faces. 

If this does not turn my business around, it should put me in good stead when markets recover much later. 

b) It's Okay not to look for the Meaning of Life by Jikisai Minami

This is another unusual read which I was only willing to pay for because my son won some awards last year, and I brought up his Popular vouchers from him in exchange for fiat. 

The author is a Zen monk, but I thought he was a troll like me. The book starts out quite nihilistic, as he dismisses the need to have any meaning in life and then proceeds to argue that it's okay not to have hopes and dreams. ( And it's all well reasoned stuff )

Eventually, I warmed up to him as he shared some insights I couldn't get in Western works. 

His best idea builds on the theory that there is some kind of relationship that is neither friendship nor family. This is someone you can talk to about your personal problems for hours on end without violating personal boundaries or exacerbating existing tensions. A shrink cannot do this because therapy is expensive and based on the hour, and only rich people would hire a lawyer to do this.

This is where a religious figure can play the role. but the best part of the book warns against the religious figures we meet in our daily lives. A good spiritual advisor will not interrupt your questions, will not claim that they understand you, will not talk about money ( thus ruling me out ) and will not brag. Also avoid anyone who claims to want you to "become one with the universe".

 I devoured the book in two hours and I find Zen Buddhism refreshingly down to earth and kinda brutal in a kind sort of way.

c) A Travel Guide to the Middle Ages by Anthony Bale

So I got lucky with two "useless" books, I'm just sharing my next one which I have yet to finish. Some guy decided to piece together historical travelogues to imagine what a travel guide in Europe during the Middle Ages was like. 

I think it's a safe bet that I will enjoy this because it features Constantinople, which I visited last year. 

At the very least, it can become a useful sourcebook for my RPG hobby.

Something has to give to allow me to engage in more reads. I have already reduced my personal engagements due to the sheer volume of work that I fully intend to intensify all the way to 2025. 

The only casualty I have so far is that I'm reducing the amount of binge-watching. I'm just watching Frieren because my son has developed quite a liking for it.

Friendly Career Update

 

Maybe I'm lucky this year, but I got some free training that is more useful to my freelance training business than the institution providing the training. Still, only because the training is meant for folks lecturing older teenagers, but my work involves training adults. But if free training falls into my lap, I will not squander it, and I've spent a lot of time reflecting on how I can improve my materials. 

The fundamental problem is that I think many educators specialise in pedagogy, but I earn a living doing andragogy, a shiny new word I just learned a couple of weeks ago about teaching adults. 

I suspect that many folks don't practice andragogy at the moment, so with enhancements to mid-career training coming online as an ersatz welfare system, I'm probably at the vanguard of another life-changing sunrise industry. If I ride the wave, it will not matter if dividends fall out of vogue; I will be able to sustain this career-lite knowledge-intense lifestyle until the markets get well again. 

Some points for myself as a parent and instructor paid by direct customers and now tax-payers :

• The doctrine that says adults are more motivated learners is BS in a world where taking diplomas can earn a meaningful allowance. It falls to the instructor to motivate them to pay attention. 
• ERM instinctively got it right five years ago with diagnostic assessments, online pop quizzes and real-time feedback via apps.
• Coming up with a hook and a narrative is essential, although I need to improve myself at this. I only use previews in private-sector work where I have to sell. 
• My peers don't like smart alecks in class, but I'm happy to trade away my boomers with smart alecks anytime because they often can detect poorly made lecture materials and sharpen your wits as a practitioner. 
• If a class polls heavy introversion, they will often be very grateful if you give them online means to interact with the class materials rather than call them out to embarrass them.
• At a personal level, I find it hilarious that I can now discuss high-falutin ideas like Bloom's Taxonomy and Gagne's 9 events with actual MOE trained philosopher kings. 

I'm doing my own bit at being a radical within the system. I'm injecting 2 to 3 slides on how adults can learn to study in my training program and tying it to my official materials. I openly tell my students to put their opinions on the feedback poll at the end of the semester. 

This explains why my blog is not getting updates as often as I would like. 

I'm finally feeling a good kind of busy where my work makes a difference and is remunerated accordingly. After attaining Financial Independence, I've searched for that mysterious "third gear lifestyle" that eludes many Barista FIRE practitioners. 

Will FIRE's enemies grow stronger?

 

It's been a tough stretch and I've not been writing as much as I wanted to. This week, I've been attending training, which has benefited my trainer role. Over the weekend, I've got another run of courses to conduct. Last week, I was fortunate to participate in the Seedly Personal Finance Festival.

I'd just like to pen my thoughts on personal finance because recently, we've seen a few high-profile retirements in Singapore.

• First is a Rice Media report on 31-year-old Ashish Kumar, a top scholar who quit Ministry work to run his debate coaching business.
• Next is gold medallist Joseph Schooling retiring from the competitive swimming arena.
• Finally, my favourite comedian actor, Henry Thia, talked about reducing the number of acting projects and entering retirement mode. 

While I've yet to follow the recording of our Manpower Minister, it seems, from third-party mumblings I have yet to confirm, that Tan See Leng is also suggesting that people find greater meaning in their work instead of doggedly pursuing financial independence. This intrigues me because for a Minister to say something, the scholar machinery needs to come up with and vet the speech's contents.

It points to the possibility that our local elites are becoming more familiar with our subculture.  

Finally, for my own panel on Saturday, we can clearly see that financial institutions are struggling with the idea that FIRE is catching on with Millenials and Gen Z. I can only inform readers to look out for the recording of my session and see the results for themselves. I sense an attempt to paint FIRE as a great sacrifice, and folks who do this are missing out on a lot of fun in life. This conveniently skips the consequences of not at least trying FIRE out, which tends to be the subject of many financial discussions in the past.

So, my question for readers right now is: Is Financial Independence such a dangerous idea that both the public and private sectors are concerned about its adoption among the masses?

I won't comment in detail as I'm waiting for Seedly's recording to come out. I want to hear the speeches myself.

I imagine that if FIRE came under the government's radar, parallels would be drawn with my poet friend Gwee Li Sui's Op-Ed in the New York Times, which drew a rebuke from the PMO for promoting Singlish. 

Finally, I'll share something I decided not to say on the Seedly PFF as it might become misunderstood. Initially, I wanted to paint the FIRE movement like the Fremen in the Dune 2 movie. Many of us are finance fanatics who have truly optimised our financial resources, like the way we recycle water in our stillsuits. 

If you tangle with FIRE, you might be tangling with a bunch of financial zealots. 

A question of Two Apples

 

I've been keeping up with this blog less than I liked because I am entering a busy stage in my life. This week, I did a webinar with Havend, with whom I signed an Introducer contract. I'm also involved in a Seedly panel tomorrow on FIRE. Next week, I have an entire week of training to attend, where I'm actually the student, which should be fun. This means fewer updates in the next few weeks. 

I am writing articles now that I should have written weeks ago. 

If you can catch this movie YOLO, I suggest you do so because it's one of the rare gems coming out of China that is neither patriotic nor involves loads of CGI. In fact, it is one of the more motivational movies out there that successfully captures the angst of modern China.  

One fairly sweet moment in the movie concerns the philosophical question that was directed at the protagonist :

If you have two apples, one large and one small, and your friend wants an apple from you, do you give up the big or the small apple?

If you are most folks, you might give up the small apple and keep it for yourself. This preserves the Big Apple for enjoyment, but some folks are inclined to give up the bigger fruit because they see themselves as caregivers. 

The movie reveals that the protagonist sees herself as the kind of person who would give up both apples, to which her dad replies that this would mean that she would have friends. The scenes following that revelation were quite heartbreaking to the audience.

I don't want to spoil the movie, but from my point of view, anyone who gives up both her apples sees herself as a martyr—someone who actively sacrifices her own personal interests for others. This is an inherently unsustainable position, very antithetical to Ayn Rand's ideas.

Interestingly, scenarios where no apples will be given to the friend are missing from this philosophical discussion.

In what situation does this friend deserve a single person anyway? That may turn on whether this person is a giver or taker of apples in the first place.

For me, my default position is that no apples will be given. 

Apples should be earned. 

But folks like me who refuse to give up a single apple will naturally be the villains or bad guys in every movie. 

But I don't care because I might be very good at utilizing my apples. I can bake an apple pie for my family and preserve some apples for rainy days. More importantly, I plan to plant the apple seeds, and a generation later, my descendants can have their own apple farm. 

Whether my descendants will give up, and apple for their friends will be moot because they will have enough apples to feed the whole town. 

All because I started out by refusing to give my apples away. 

The Mainland Chinese would obviously want to celebrate the sacrifice of their women and immortalize it in a movie. 

Still, it does boil eventually to what you plan to do with your apples. 

Socialism with Chinese characteristics may not align itself with Capitalism with Singaporean characteristics.

This is where I talk a little bit about my hobbies

 

I've been quite distracted lately, so I was unable to blog as often as I liked. My non-investment training workload has increased, and I've been busy preparing for new students. Now I'm focused on perhaps pivoting one of my investment courses, as sales were not good. 

Last week I tried to visit a fairly well-stocked game store, but after a number of days of discounted promos, the shop had closed for good. Lately, it seems that one of the big risks of growing old is actually outliving your hobbies instead of your hobbies outliving you. 

So today, I want to talk about how my hobbies rapidly change in 2023. 

a) Dungeons and Dragons may start its decline this year
 

On the surface, it's possible to be very bullish about D&D as a hobby as Baldur's Gate 3 was a resounding success, and this year is D&D's 50th year anniversary with a highly anticipated rule set. But Hasbro blew it with attempts to amend the Open Gaming Licence that made the game so popular in the early 2000s. Hasbro also had a brutal company restructuring last year, losing a lot of creative talent.  

At the moment, the game seems to be going through what the Linux operating system went through many years ago, it's splitting into many variants/distributions:

• Pathfinder was a fork of 3rd Edition many years ago, and now it has resurged with a remastered version that has created its own IP.
• Kobold Press is about to complete its version of the 5th Edition called Tales of the Valient.
• Matt Colville, a super charismatic DM, is now launching his own RPG that is very similar to D&D.
• Matt Mercer, who is a super successful voice actor who promoted D&D, is now showing off Daggerheart, a more descriptive and narrative system, to mixed reviews.
• Cubicle 7 just launched Broken Weave, a heavily altered version of 5th Ed that is focused on exploration and narrative play.

I'm following all these variants and backed them on Kickstarter. All I can say is that they are all good, so it can potentially split the fanbase into many different enclaves which can actually squabble with each other. 

In this sense, RPGing is different from finance. 

In finance, I prefer dividends investing, but I can dabble in crypto and growth because I benefit from diversification. In fantasy role-playing, some gamers need to be conditioned to hate an 'opposing' RPG system instead of another because the gaming group functions as a tribe. Otherwise, players can be lost to another group, or DMs will suddenly rug-pull everyone with a new ruleset and a steep learning curve.

b) The wargaming hobby may be what role-playing's final state will be like.

I bought this beautiful wargame, B-17 Flying Fortress Leader a few days ago. It is a board game for one player that simulates bombing raids over Germany. On the surface, the gaming concept is ridiculous. To appreciate the system, the player will need to read up on a dense set of rules and understand World History. After which, he moves pieces around the board alone, with no friends at all. In such a case, the obvious thing to do is to make this a computer game, but stubborn wargamers have only loved this genre with its tactile feel of gaming pieces, and this game is even in its second edition.

There is a wargaming community in Singapore. It is very tightly knit and consists of Gen X gamers, old millennials, and one or two curious Gen Zs. The availability of wargames is almost entirely driven by one or two zealous individuals who organise group buying of these games from Amazon or Noble Knight Games. Retailing of wargames died with a shop called Leisure Craft in Orchard Point in the 1990s. Many of us had fond childhood memories of that outlet. 

I suspect tabletop RPGs' endpoint in Singapore will be like the wargames community. Shops must pay rent and can only sell high-volume or high-margin items like collectable card games or miniature wargames. Fragmentation of the Fantasy Role-playing genre will render the current approach to playing RPGs in-store untenable as different pockets of players will have their own favourite ruleset. 

I already spent most of my funds on Kickstarter and DrivethruRPG, so I no longer need game shops here - but I'm also no longer a regular player as RPG gamers have evolved into a more woke and younger community with different social norms. 

So that's happening to me as I hit my 50s at the end of this year. I am still determining when I'll ever play D&D again as my business interests are expanding, and my children will get more attention from me. I still consider reading RPG rules a fundamental part of my personal identity and can talk about RPGs all day ( in a theoretical way, unlike investing ). I am slowly building up a collection of solitaire wargames, but I may never play them if they are highly involved.

I might have a way out of my kids developing a curiosity about my hobbies, which is almost impossible in an age of Roblox-like platforms, consoles and mobile gaming. 

Letter to Batch 33 of the Early Retirement Masterclass

Dear Students of Batch 33,

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

Teaching this batch of students has been much more challenging than teaching earlier batches because we decided to transition to Quants Café as our back-testing tool. The tool is less than six months old, and I decided to transition into this when I can adequately perform the backtests to create stock screens for the program. Today's exercise raised some inadequacies in the new training materials, including more video materials and explanatory notes over the next few weeks. I will prioritise training videos and a lab sheet to make training future batches much easier.

Beyond the training in using the tools, the class has also created a very tight portfolio consisting of only 14 stocks. It brutally rejects most blue chips in favour of small caps and REITs. The final yield is exceptionally high at 7.48%.

The situation for the ERM portfolio will improve beginning around Q3 2024. It does not make sense that such a well-run city-state has its equities priced at a PE of around 10. For another, the situation involving REITs will likely turn around once the Fed begins lowering interest rates.

The conversation with the students is also something that keeps me going. I was unaware that the tourism momentum in Singapore has legs because Bruno Mars will be conducting a concert here in a few months. Discussing what authorities and companies are doing about scalpers is fascinating. As mundane as such discussions might seem, they paint a bullish picture of our local economy that justifies our tight portfolio that made two hospitality trust picks.

Lastly, I hope Batch 33 will participate actively in the FB group. I look forward to seeing you in the following community seminar slated for Q2 2024.

Hope to see you then!

Christopher Ng Wai Chung

Three improvements I hope to see for the CPF system

 

Now that the chatter about the CPF changes has died down, it's time for me to develop a wish list for the CPF Board. I have tried to make it as reasonable for the CPF Board to do this, given that the disappearance of the CPF-SA after age 55 would free up some fiscal room to give more for CPF members.

Here's my wish list :

a) Make CPF-Life scale linearly with premiums.

There is a progressive element to CPF-Life payouts that discourages folks from putting more money into the CPF-RA. The CPF-Life payouts per unit premium paid are higher for lower sums committed to the program. This is to provide more retirement assistance to those with less savings.

This policy will no longer be necessary if we provide more top-ups to lower-income groups. ITE graduates who enter Poly already get increased amounts in their accounts. 

The middle-income groups need to feel they are getting a fair amount from participating in CPF Life; otherwise, they will think they are subsidising other citizens when they engage in risk-pooling.

b) End the hypocrisy around the Retirement Sum Top-Up Scheme. Give us something we can use.

The RSTU is a powerful avenue to reduce personal income taxes for high-earning professionals. However, the government will disable RSTU once the member accumulates the FRS to curb too many advantages to the wealthy. But that's not the end of the story; at age 55, RSTU makes a comeback, and you can do it until your CPF-RA reaches the ERS. 

This whole system is dumb because the significant earning years do not entitle most professionals to benefit from RSTU. Thanks to completing CPF-OA transfers every year, I personally reached FRS in my CPF-SA in my early 30s. For the folks who can use RSTU again at age 55, they may no longer have a career that can benefit from tax benefits anymore. CPFB folks seem real niggardly to enact a policy like this. 

With such a high bar to reach 4xBRS, the CPFB may throw a dog a bone and allow RSTU to keep accumulating until ERS. A maximum contribution of $8,000 is a little every year, and CPFB should also have a policy that benefits PMETs, given that we're throwing money at ITE grads to enter Polytechnics. 

c) Have a CPF-Life scheme that pays married couples until both pass away.

 

With so much emphasis on marriage, starting families and having children, it's ludicrous that the CPF-Life scheme does not have an annuity program that continues paying to support the other spouse after the member spouse passes away. 

Of course, if an annuity is designed to pay until both spouses die, the monthly payouts can be calculated to be much smaller by design. Still, I would undoubtedly prefer a fixed payout, at least for my wife, after I pass away. 

Do note that folks with young spouses will get tiny payouts in such a case. This is all set by actuarial tables anyway. 

I want this so much that I'd happily sacrifice that stupid political compromise, the Basic Plan, to make it happen. An alternative would be to allow CPF-RA transfers between spouses. 

Anyway, these are my suggestions to the policymakers. 

Feel free to discuss how feasible they are. 

Update on my crypto positions

 

I have written several crypto articles on this blog over the past year. You can find them here and here.

This morning, as ETH hit over $4,000, I decided to exit all positions in ETH as I've managed to derive a significant amount of returns since I have a leveraged position in ETH in Compound V2. I clumsily closed my leveraged positions since I owed some DAI, then moved the ETH off-ramp on the Gemini exchange and converted the money to SGD. The losses from transaction fees were high, and I lost about $1k in the process, but the money is safely back in my bank account in SGD, and I made some excess funds for my trouble.

When the Terra Luna ecosystem broke down, I could round up some spare change to buy LUNC when it was selling for around $0.000027. You can find a historical record of my thought processes then here. While LUNC is now trading at about 7x my original value, I have previously farmed my LUNC and UST into the Mirror protocol and took in as much spare LUNC and USTC that it could spin off. I currently have about $8,000+ in the Terra ecosystem, but my money is not mobile, as I need 21 days to unstake most of my LUNC.

As far as I was concerned, while I was now sitting on some gains, the most enormous damage I suffered at that time was the effort lost in designing a cryptocurrency course. I can now escape with my course fees and some extra pocket money for the March holidays while keeping my millions of LUNA classics as funny money in the improbable event of a re-pegging of USTC.

As for where the funds are now, I've farmed it into the portfolio I manage under the All-Weather Portfolio, where just 8% is put into GBTC and ETHE. ETFs will be how I will take a position in crypto. There is now a more systemic approach to shift the funds out of crypto when the momentum slows down and becomes overtaken by another asset class. 

Here are some of the thoughts I have about cryptocurrency investing:

• I still think I left ETH early, but I am uncomfortable about some Dua Kang Cryptobros returning on the forums. They can have all the fun getting rich. 
• The gas fees in the ETH ecosystem are brutal in a bull market. This will force many investors to trade ETFs as trading fees are lower, and there is no need to manage wallets. 
• The regulatory regime is also tighter, and I can't withdraw my funds from Coinbase as DBS keeps flagging an error when I try depositing $1 to link it to the exchange. I off-ramped my funds in Geminii and lost a lot to transaction fees. 
• There's plenty of money to be made from regulatory arbitrage. As crypto ETFs slowly get approved, you can take positions to exploit the upswing. There's no real need to buy crypto and store it in your wallet anymore. A brokerage will do, but you must be an AI and enable complex leveraged products.

Finally, I currently have about $8,000+ in LUNC and USTC, but I am already sitting on fairly substantial gains. If the price remains high in 21 days, I might liquidate and farm the funds into the next LUNA-like investment. 

The closest trading idea I have is Keppel Pacific Oak REIT. It stopped paying dividends but still has a high tenancy rate. This could be a multi-bagger, but you must be patient and hold it until 2026. The odds of dividends returning from KORE are higher than USTC pegging. 

From Languishing to Flourishing

 

In this second part of my series on languishing, I focus on some of the remedies that can turn someone who is languishing into someone who is flourishing. 

First of all, I'd like to talk about two possible paths to flourishing :

• The external path is where we keep score and become good at something, like our jobs. We take the external approach when we do something to improve our social status. The external pathway is objectively rewarding, but you get diminishing returns as you age. 
• The internal path is all about meaningful personal change and ethics. As you get older, there are more opportunities to follow it, at least because the nosy relatives who judge you during the New Year family gatherings begin to disappear one by one.

I find the internal path harder to walk than the external one because I can keep score and compare with other people. But I am also aware that post-FIRE, there is now lower-hanging fruit for the internal path.

After that, the steps to flourish all seem like another self-help guide. I wish that future research could dive into more granular detail, but readers can look at the following for now.

• Learn something new - This is too easy thanks to Skills Futures, but my emphasis is to teach something new because the Feynman Techniques shows us that we can reach much higher levels of mastery when we teach something.
• Building Relationships - While the book says that quality matters more than quantity, I wish different personality types could use different strategies. As folks get older, they become better at ending relationships. If only there was more direction on how to do this. 
• Spiritual Practices - Another valuable opportunity, but this world is full of cults and scams. The question for non-religious folks like me is whether we can come up with ideas that go beyond meditation or yoga. 
• Finding Purpose in Life - Philosophy has relatively good answers to address the problem of finding meaning in life. 
• Play—The funniest thing I realised about this section is that play is supposed to allow a person to practice their imagination and break away from an obsession with achievement. But I've been gaming for so many years that I see long-time gamers flouting this rule continuously because competitive games give them that feeling of success that has eluded them in real life. 

I'm incredibly interested in learning new things for folks who read my blog. I'm also okay at building relationships and finding a purpose in life. I suck at Spiritual practices as I lack patience and have attempted meditation and yoga with almost no results in many stages of my life. I've reduced the amount of Play in my life as many gamers find inauthentic means of Flow and building fake achievements. 

Of course, the whole point of this self-audit is to open my mind again to previous failed attempts and try to do better, but with a different approach.

Finally, you can observe how every single point about flourishing does not involve much money at all, but FIRE can be an enabler as it gives folks time to figure out how to flourish. 

On the issue of languishing

 

I'm still on my journey of figuring out what life will be like for me post-50, so right now, I'm trying to understand the state of languishing that a lot of folks I know might be going through. I'm going to dedicate a few articles to this topic over the next few days, as it's useful as a reference as I hit the big 5-0.

Languishing is a state of low-grade mental weariness that counts indifference as one of its symptoms. The checklist of someone languishing is extensive and covers things like feeling that your job no longer matters in the grander scheme of things or losing the motivation to catch up with friends and family. 

The symptom that affects me the most is that more and more things seem irrelevant, superficial, and uninteresting. Last week, I mustered some time to spend $30 on one hour of vinyl record listening and found the experience a significant waste of my time. In fact, the album I picked, Adele's 21, sounded exactly like the one I listen to on Spotify, with some static sound in the background. 

So much about hipsters' claims that analogue music is superior to digital music. 

There are three aspects of well-being that can be used to fight languishing. 

• Emotional well-being measures how happy and satisfied you are with life.
• Social well-being measures how well-integrated you are into society, 
• Psychological well-being measures how much you like about your own personality.

While languishing is very mild and does not require medication, if we do not have a system to cope with this, it can lead to delinquent behaviours and even suicide. It even increases inflammation and decreases antibody production. 

Finally, FIRE can both be a cause and a cure for languishing. 

If you retire just because you can live on your passive income cash flow, you might shut yourself away and stop growing from the day you complete the buildup of your fuck you money. The person being fucked is ultimately yourself. 

But if you are languishing because of a ho-hum job, financial independence can give you the power to reinvent your career or find your calling. 

In the following article, I will discuss some preventive measures that you can take to prevent languishing in life. 

Some clarifications on some of my CPF videos and articles

 

For the past week, we've been working hard to fact-check some of the materials being put up on the Dr Wealth blog. As you may notice, some numbers differ between my article and another Dr Wealth shareholder. 

• Louis Koay's article can be found here.
• My article is here.
• I also have a video here.

There has been feedback that my article contradicts Louis' as we project a different payout for CPF-Life.

I need to write an article to clarify my numbers as they are part of a thought experiment to project the amount of money needed today in our CPF-RA to lead a comfortable lifestyle based on 2021 figures from the Lee Kuan Yew School of Public Policy. In 2021, that number is $1,421; that amount today, assuming 3% inflation, is close to $1,560 in today's dollars.

Now I've got a severe problem because most of the tables from the press will start with a multiple of BRS today, then allow the amounts to compound for ten years, then use the CPF Life Estimator to project monthly payouts many years later when the member reaches 65 years old. The narrative is that you will have a nice payout when you hit 65 if you let your money compound in the CPF-RA until you can start paying annuity premiums to get a monthly payout. 

There are too many degrees of unpredictability when we do this because we need to know how much annuity premiums cost in the far future, how much annuity costs depend on interest rates in the far end, and the average life span of a Singaporean. If humanity finds a cure for cancer, everyone's lifespan will extend by 3 years, and annuities will become more expensive per dollar of payout. On top of that, we will have problems projecting the basic expenses of a 65-year-old ten years in the future. A more significant proportion of 65-year-olds is spent on medication, and medication has an inflation rate higher than our reported amounts. I have evidence of this - my evidence comes from the Medisave BHS, which grows faster than 4% yearly. 

So when I use the CPF Life Estimator to figure out how much I need in CPF-RA today, I can't work the 10-year 4+% compounding into my figures from age 55-65. I have to input the amounts a 65-year-old member has today. Then, I used the CPF Life estimator to calculate my payout immediately in 2024. This extremely theoretical exercise will result in a monthly payout much lower than the Louis Koay article or mainstream media. 

We need to know how much is adequate to cover today's expenses. i.e. In 2024 dollars.

My conclusion remains that we need at least 3 x BRS in our CPF-RA when we hit 65 for payouts, which may be $3k+ as written in other articles, to barely meet the basic expenses of a 65-year-old. Another conclusion is that it may be unproductive to put the full 4xBRS into CPF Life as there is a risk of over-insurance as payouts, even with the Escalating Plan, don't seem to mitigate inflation completely, which means that members still need to pick up investing skills and take on market risk to succeed in retiring conventionally. 

The private sector carries a heavy burden when we write articles about CPF. I can lose credibility if I am wrong.

We have been combing through some of the comments raised in our videos and using the CPF website to fact-check our materials against the statements made. The CPF website needs to make this a more straightforward process for us. 

Please be patient and understanding if you find factual inaccuracies in my material. 

I intend to come clean if these can be found,

Make Polytechnics Great Again !

If we go beyond CPF reforms, the biggest game-changers are the ones for mid-career changers over 40 who can go back to a Polytechnic to study for a diploma and draw a monthly allowance of up to $3,000 a month. 

I do not have any policy details right now, but I want to share some thoughts on this important game-changer that will create a massive seismic shift in the way we look at educational institutions today, which will upend any of my previous posts on polytechnic education.

At first glance, this looks like a welfare scheme that will give unemployed mature workers a two-year reprieve while they retrain for a new career with no guarantee of an actual job at the end of the course, but if you look carefully at the policy, it would be hard to abuse. Folks who have been unemployed longer than a year do not have a salary track record to get payouts from the scheme. The scheme is also keyed to half your original salary, so it barely covers all living expenses for most mature workers. At first glance, this may not be a successful policy as it benefits the few and may not result in re-employment.

Now, if you are willing to go beyond looking at the scheme as a welfare program for folks who are on the verge of unemployability, I think the genius of the program stands out.

The first effect is that folks are not forced to become gig workers, so they have better options for at least the next few years, which can reduce chronic underemployment. 

The second is the amount of entrepreneurial fervour it can generate. 

Many MNC executives need a risk-controlled option to transform themselves into SME owners. This can become a pipeline for the transformation to take place. 

Imagine I am a successful, mature executive who has a few colleagues who are concerned about restructuring and predict that our careers will be over soon. I can hatch a plot to start a business, but before I can create a minimally viable product and get funding, I need time to pick up the latest skills for running a new business. A few partners can enrol in a Polytechnic to pick up some missing skills and spend the next two years preparing the ship for launch while drawing a small allowance. If the business plan does not work out, I can still get re-employed as a plan B, which is all about optionality - the government is using tax dollars to give you a call option on your human capital. As Polytechnics provides me with access to young classmates and many ITEs grads fresh from NS, I can even build a labour pool from my classmates and provide jobs for them.   

There are a couple of things I hope to see from details in 2025:

a) First of all, bureaucrats will try to plug all loopholes. The path should not be closed to successful executives who are NOT involuntarily unemployed and can generate plenty of income while being a student. I'm selfishly putting this on the table because I foresee a lot of temptation to do this.

b) There should be a decent drop-out provision where someone can drop out of Poly when they find a job or launch a business. This person should be able to suspend welfare payments and still be entitled to a future remaining stream at a later date. Dropping out should be viewed as a success and normalised in a Polytechnic.  

c) As it stands, the core curriculum in most Polys just meets the needs of O-level graduates. Mature students need core subjects that are more relevant to them, like basic business operations and planning, online marketing, prompt engineering, and, of course, personal finance. Significant reforms need to happen here because I'm not inspired by the current Poly core syllabus. I'm taking into account this work as Polys now needs to cope with an O level, ITE, and mature professionals' intake. 

d) In addition to internships, students can work with VCs and Incubators as a subject. They can try their hand at business 

e) Some mature students should be allowed to teach a specialised to get credits.

Anyway, after speaking to a few friends with no problems generating income from their own businesses, everybody seems interested in attending a Polytechnic in 2025 to pick up some AI skills. 

I have even started combing the Poly websites.

This is because I'm confident of earning a decent income from my businesses even as a Poly student, but I am worried that some clause will stop me from enrolling in an institution. I can farm the $3,000 into my CPF or SRS, which I will need to do to hit the new ERS.  

Finally, we now have a credible plan to end the comparison of Polytechnics against JCs. In 2025, Polytechnics will become a new beast, a very strange institution that brings different Singaporeans together to carve out some kind of new entrepreneurial ecosystem in the country.

Or I'm just a dreamer. 

CPF investing is "dangerous"

[ Kyith of Investments Moats has pointed out an interesting point I was unaware of. While I know that RSTU up to FRS into CPF-SA exists, I was unaware that after age 55, you can RSTU up to ERS!

He also sought clarification on what I mean by the uncertainty of annuity payouts at age 65 when annuities are designed to provide fixed lifetime payouts. What I meant was that the uncertainty comes from not being able to predict annuity pricing before payouts begin. The CPF Life estimator is just a rough guide.]

What a historic day! What a landmark Budget!

I'm focusing on one significant CPF policy change: to make everybody's CPF Special Account disappear after age 55. The first effect is that CPF Shielding will no longer work, so folks trying to juice an extra 1.5% from retirement savings can no longer get assistance from a financial advisor. The second effect is that the compounding effect of 4% in the CPF-SA will render some of the 1M65 strategy useless.

You can refer to some of my previous posts and judge whether my articles are prescient on such matters.

• CPF Shielding
• Critique of 1M65

A more detailed treatment of the available financial mitigations for someone over 55 years old will be posted on the Dr Wealth blog later, I just want to share some random thoughts on these changes.

a) What is the political cost of making CPF-SA vanish at age 55

The first thought I have in mind is the political cost of this move. I think the CPFB really wanted to replace the 4% with a variable rate tied to the 10-year bond many years ago but probably refused to make this move because they were concerned about angry voters. 

I think this policy is much milder because it largely impacts richer folks who have over $426,000 in the CPF system who are milking the 4% risk free. If the CPFB no longer owes 4% to many millionaires, they might be able to enact more generous policies for lower-income voters. 

b) CPF-Life is now a cognitive strain on financial decision-making

CPF Life is now very central to retirement planning.

As the 4% is now gone, folks have to decide whether to commit funds into the OA account that gives a measly 2.5% or park monies in the RA which converts to an annuity. I suspect this will engender a lot of anger in the future because CPF-Life payouts can change over time depending on when you use the Life estimator or reach age 65, and folks don't really know when they will die. I think this cognitive burden levied on the populace, while good intentioned, will cause a lot of unhappiness in the future. 

In a future Dr Wealth article, I will provide a framework about how much to put into the CPF-RA after age 55. I will also talk about investing to minimise the market risk whilst retaining at least a 4% dividend yield for a locally focused portfolio. The days of getting 4% risk-free are over.   

c) If you raise ERS to four times BRS, maybe you add a few new policies to make it easier to reach it.

The raising of ERS to 4x BRS is what baffles me. Many features that can speed up the accumulation of retirement funds switch off after you hit FRS. These features include the OA->SA transfer, and the Retirement Sum Top-Up scheme ceases to function once you hit FRS. The central problem of conventional retirement is that if I accumulated just the FRS, CPF-Life payouts would not be able to match the $1,421 in 2021 dollars required for a 65-year-old to live a dignified existence. There will be a $400 shortfall.

Extending the OA->SA transfer and RSTU to 3x BRS would help greatly for folks who want to attain retirement adequacy earlier in life, given that CPF is no longer burdened by the millionaire's CPF-SA accounts. 

The collective effect of this seismic change in CPF policy is that CPF investing is now highly "dangerous". You no longer have a risk-free 4% CPF-SA account after age 55. 

• You still have a risk-free 2.5% account in the form of CPF-OA.
• You can move the funds into CPF-RA but you take on the risk of uncertainty of CPF-Life payouts at age 65 which can be based on annuity pricing. You also don't know when you will die so you struggle with deciding which plan to choose. 
• Finally you can invest in the equity markets and take on some market risk.

I'm actually pleased with these policy changes because it is going to be much harder to ignore our local stock markets if you want a source of returns denominated in SGD. This may actually provide a longer boost to SGX equity markets.

Happy Valentine's Day ! How can we stop the Enshittification of relationships in Singapore.

 

The word of 2023 is enshittification. 

Enshittification is a term invented by Cory Doctorow that describes the degradation in the quality of online platforms that function as two-sided markets. While the details are pretty specific about how it happens, the main culprit is Amazon, which operates by trapping customers into decent services like Amazon Prime, then raising prices and lowering standards in a bid to monetise for shareholders. 

I can stretch the definition by saying that dating platforms are two-sided markets (men and women), and young folks are very used to finding love on platforms like Tinder and Coffee Meets Bagels. 

Has enshittification occurred in these dating platforms yet? That's up to you to judge, but the stories of meeting weird guys who talk non-stop about crypto investing and fuck boys may point to a longer-term decline of such matching platforms. I also think such platforms are disadvantageous to charming talkers who may be charismatic but not visually appealing. 

So, in today's thought experiment, I will be speculating on what I would do to find a mate if I were in my 20s and single today.

a) Use dating platforms as a practice arena

I have described that dating is best done using the Secretary's Problem. Approximately 37% of the time is spent dating casually to determine your preferences. Dating platforms speed up the process of determining your preferences, I can cycle through multiple dates just to understand my preferences. 

The only difference is that I will set low standards, cast a wide net on these platforms, and reject women directly using WhatsApp instead of ghosting them. In return, every date should be pleasant, and I will read up online on what not to do during dates - like eat at Saizeriya, wear Decathlon from head to toe, or talk non-stop about shitcoins.

b) Focus on activities as a more serious arena for meeting good dates

Serious research into married couples shows a high correlation between couples on educational levels and political affiliation. With that insight, it may be wiser to ask questions about where folks with the same qualifications hang out other than work. I found my wife in a Japanese language school, but LLMs have made multilingualism less useful, so I need to think about alternatives if I am in my 20s and single again. I might have to join a book club or learn singing as a first move. 

I may also educate myself in BDSM - Business Development, Sales and Marketing courses because they have a more balanced gender mix. My usual coding and finance classes are not a place to find women. 

I might also seriously consider grass-roots work. I'm quite anti-woke, so hanging around in the community centre to hit on grassroots PAP women should work better than hooking up with a woman from opposition groups who might not be too sure which pronouns she uses.

If I date some woke-redistributive chick who is a fan of Teo You Yenn, and she knows the dating budget comes from dividends stocks, I'm not sure how she will react. 

c) Join a cult or some kind of religious group

If you think about it, religious groups are captive audiences where affiliation makes you a lot more attractive as a mate. Suppose I can get someone rated 6 in mainstream society; maybe joining a cult can get me someone rated 7 because she really has no other option except fellow cultists.

There was a stage in my life when I tried joining a fundamentalist Christian organization to meet women. The women are very single and very hot, but I baulked because I could not see myself in permanent bondage with a Christian cult for the rest of my life. 

I think if I can replay the script, I might go with a more mainstream group like the Roman Catholics or some kind of Buddhist organization. If I pick Buddhism, which is my most appealing option, I will pair it with my interest in Transcendental meditation, so I won't really struggle with a woman who is too devout. 

Now, all this assumes that I'm financially ok to start dating in the first place. I've always been quite strict about my dating life, prioritising financial freedom first. 

Girls should find me safe. I'm happy to pay for any date with money from my investment instruments.

The Year of the Dragon ! Huat ah !

 

I get three opportunities to think about my life every year. The first opportunity was on my birthday, Christmas Day. The second opportunity arises when considering the new year after the holiday season. Finally, about a month later, I got to use some Chinese metaphysics to think about my year ahead. I don't just contemplate my Tiger Horoscope; I'm born on the day and month of the Rat, so I need to think about that, too. The year of the Dragon would be, at best, so-so, but it is a year of change. I must proactively deal with some of my problems and grab each opportunity for 2024 to be good. 

This means that, for Tigers, financially, I can expect little gain. My real estate valuation will be meagre, as most capital gains have already been earned in 2023. While REITs will do well when interest rates start to fall later, this will happen quite late, and I'm not sure US Office REITs would have capitulated by then. I made bold moves on Keppel Pacific Oak REIT, and then they delayed their results until the end of February. This will hurt the value of my portfolio. 

Business-wise, it looks better for us. I'm stabilising my cash flow with more side gigs to deal with even lower revenue on my training business. The final result is fewer work hours than a full-time worker but more cash flow predictability. This arrangement also allows my health to get better. There should be some positive news and collaborations with new partners soon. 

I'm glad I have fought off any temptation to take on vanity mega projects; as I reach 50, I'm putting more time into simplifying my life. From my examination of the literature, pursuing a Simpler Life is complicated because it requires a deep analysis of our lives and priorities.

The School of Life series has something quite profound to say about friendship. Why do we need friends, and what should we expect from them? 

There are three answers to this:

• Friends understand what we go through and give us a sense of normality despite our struggles and idiosyncrasies. 
• Friends help us clarify our vagueness and help us understand ourselves better.
• Friends ease us out of our defensiveness and point to a way out in a non-humiliating way. 

My problem with this framework is that if I apply it to my life, I may have no friends at all, and I would not be a particularly good friend to others either, so I can't complain.

This may reflect the metaphysical struggles of a Tiger facing massive changes this year. You have to put in more effort for the folks who can meet this high bar, but then you need to try to meet this bar yourself. It takes a lot of effort and personal development to do this. Doubly hard for ENTJs.

But a slight tilt in this direction will result in massive changes in your social life that will pay dividends for the rest of your life because loneliness is an epidemic in modern societies. 

I will be headed to Malaysia this CNY, I will resume blogging when I come back next week.

Huat ah !

Discussing the hypocrisy around inherited money

 

For a meaningful discussion, I'd point you to this lovely comic strip by the Woke Salaryman on inheriting nothing. While I do not fully agree with this strip, I am a loyal fan and want to put in some additional points of my own on the issue of inherited wealth.

Before I begin, I want to remind readers that Vicki Robin, who invented FIRE, was heir to great wealth and was somewhat of a hippie.

a) You will always inherit something, whether you like it or not.

One major problem with modern society today is the non-recognition of non-financial capital. Some folks think it's uncool to inherit wealth from their parents. Still, it's ok to inherit conscientiousness and high intellect from professional parents who engaged in assortative mating. In some other cases, folks who inherited the social and cultural capital from their parents still have the gall to call themselves self-made men.   

I don't think you can ever disentangle yourself from your parents. In my case, I've prepared myself to manage my family's money since I was a kid - it was obvious, I had no siblings and lived in landed property. 

But I don't feel bad because I inherited diabetes as well and need all the help I can get. 

b) Wealth itself can change a person's mindset, and it's not always for the worse.

When I was an undergrad, as an only child, my parents let me use $600 every month. That was a princely sum 25 years ago and my dad kinda made sure I knew it. In those days, I was quite bad with my money, but  I always spent it to make myself more competitive. I bought all my engineering textbooks first-hand and I was too lazy to zap the books in the NUS library. I paid excess cash for certification exams and got my MCSE and various Toastmasters awards in my final year of Engineering school, which was helpful in those days and this discipline made it easier to tackle the CFA a year later. 

But truth be told I had no savings then. 

Here's the thing about the magical $600 my mom would give me every month. I felt comfortable spending all of it and knew I was spoilt. So when I started work, I felt no inclination to spend above $600, so I lived like a spoilt undergrad rather than an insecure status-conscious young professional. In fact, when I discovered my personal version of FIRE in my mid-20s, all I needed was $120,000 to get me $600 a month on 6% dividends. And if I just spent $600 a month, it would be super easy to get there with a few increments. 

Then, becoming a millionaire would be easily achieved if I saved every cent I earned at work. 

c) Wealth paradigms upgrade with every added digit to your portfolio

I'm clearly not for disinheriting my kids. I intend to do the opposite and give them a reasonable-sized portfolio to play with when they are still young and dynamic. 

This is because I'm well aware of the kind of mindset when dealing with sums of money and don't want my kids to start a "low level" in this MMORPG called Singapore Life. 

• Until you hit $10,000, you tend to think more like a gambler; some of you make momentum trades to make a decent amount to buy maybe a better meal, or you keep your cash in a fixed deposit. A lot of crypto bros start at this level. 
• At $100,000, a 4-6% dividend flow becomes meaningful enough for you to commit to a proper stock portfolio to at least get a dividend income. $400 a month is consequential. This is why I believe that a $100,000 "bribe" to get kids to pass the CFA III exams is something every parent should consider if they can afford it. 
• At $1,000,000, you will gain enough incentive to operate using different asset classes and may become more interested in volatility and standard deviation. At least because it's painful to lose your millionaire status.
• I suppose beyond $10,000,000, you will expand your horizons towards more private equity or look into wealth preservation through fixed income. Philanthropy probably also starts here. 

All this being said, I can still sympathise with folks who glorify their lack of a financial inheritance. 

I grew up in a landed property estate and spent my childhood being bullied and shot at using plastic air rifle pellets by ACS boys. I suspect the animosity against inherited wealth comes from meeting assholes who stand to inherit plenty of money. In my case, my bully had a wealthy newscaster/publisher, Doyenne's mum, who could buy him a foreign degree.   

But also, like the Woke Salaryman, I guess bullying from ACS boys has also made me more resilient.

How would you design your life if you are young again?

 

When a group of uncles meet up to have a coffee session, we talk about how we will live our lives if we can be in our 20s again. This is an exciting thought experiment, not because we think there's a better way to live your lives for Gen Z, but because it reflects what we think we did right or wrong in our own lives.

What is surprising is that even with two Gen X guys who have many similarities, we would have drastically different answers to what we would do if we were in our 20s again.

A friend, a successful IT professional and landlord, thinks that if he's given a chance again, he will cruise through his 20s. He would work a bare minimum and save money just to travel worldwide. For someone who is actually one of the hardest working IT professionals, he would lie flat and do the bare minimum just to maximise the experiences he can get from the world. He may not even start a family.  

My answer is opposite his. 

My 20s are all about my chaotic energy, which I can bring to the table. I would focus on a remote and output-driven job. Then, I will actively break the employment contract with HR to take on another remote job to get paid in crypto and stack at least two jobs to become over-employed. If I get caught and fired, I will still have another job that pays the bills. 

As I would have no time to spend my money, I would double down and try to reach FIRE before 30, and then I would either join the JET program to go to Japan or take a tourist visa to pick apples in New Zealand. Only after I travel out of my skin will I return to get a tedious, conventional 9-5 job to start a family. 

I invite readers of this blog to share how they would design their lives if they were in their 20s again. There isn't a need to consider whether Gen Z will find this approach feasible - Gen Z grew up in a much different environment.  

You'll be surprised at how much it highlights the regrets and achievements of your own life. 

What about the JC Experience?

 

When the O-level results are released, it is typically not a good time for JC students because the media machine is subtly trying to play down the option of taking the A-level exams via the JC route. As I read the articles, they seem to have painted a very negative picture of the JC student. A childish imp who still needs to wear a school uniform. Someone who does not know what they want to do but has a parochial vision of what success is like in Singapore. And someone bereft of practical skills.

As I'm only really trying to understand the new education system as I now have a child in secondary school, the best I can do is offer some of the more significant experiences I had in NJC in the 1990s. Some of these experiences are good, but some are bad. Overall, they are exciting experiences I would not trade for anything else. 

Even today, when I was feeling down last year, my JC pals from Computer Science got me out for dinner to cheer me up. I even had one JC pal attend my classes last week, whom I had not seen for many years but is a loyal reader of this blog. As most of my clique went separate ways in University, I felt the only issue I had with JC was that it was too short. For folks from NJC, many of us come from neighbourhood schools and saw how an effectively run education institution feels for the first time.  

Here are some of my experiences in a nutshell:

a) A fairly uncharismatic guy was running for the JC council, but he had the misfortune of offending the girls from MGS and the convent schools. Because he wore blue pants for the first three months of JC. The ladies hatched a rumour that he loves lying about being an ACS boy. The story worked, and he got the lowest votes in the election, much to our amusement.

b) We had a school band that was much hated because the lead singer threw a throw into the audience. WTF!

c) A schoolmate of mine did not know what smegma was, that cheesy discharge below the folds of his penis. I told him to ask that girl who took biology in her subject combination. And he did.

d) My friend wrote a rant essay arguing that education is destroying the environment because of the amount of paper used. He was sent for counselling by the worried GP tutor, who thought he had finally snapped and dug himself into depression.

e) Someone slipped a science essay full of sexual innuendo into the school magazine, which had to be recalled. Students were reluctant to give up their copies, so teachers had to beg us to do so in class. The teacher in charge of the magazine was in tears. 

f) Sex education classes conducted by Mr. Clarke were so hilarious that they were better than some episodes of Monty Python. Unfortunately, he raised the bar for a generation of confused adults by talking about swinging from chandelier to chandelier.

g) A few top GP students decide to play a horrible prank on their GP tutor. They independently invented a Korean philosopher and attributed various quotes to him. Because multiple students did this and Google did not exist to fact-check Park Chun Mong, these guys got away with it. 

h) A student trolled Mr. Whitby so hard in class that he told him he said he'd quit and appointed the offending student as GP tutor for the next session. In the next session, Mr Whitby sat down as a student, and the student came prepared to conduct a tutorial session. It ended when the student pointed at Mr. Whitby and said, "Hey, who said you can dye your hair blonde?"

i) I got a bunch of classmates to cheat in a stock market game organised by the Economics Society. We wanted to demonstrate the intellectual superiority of Computer Science students, so we engaged in off-market transactions to consolidate winnings in one championship team - something organizers should have anticipated. There were many complaints, but we knew that the rules did not mention what we did was wrong. Eventually, we were disqualified for insider trading. The ruling needed to be corrected even by today's securities regulations. The president of the club was quite traumatised.

j) I was showing a junior from secondary school on campus when the joker of the senior year walked through the school gate. I told him, "This guy is the funniest guy on campus". At that exact time, that guy scratched his crotch and my junior burst into laughter. He came to NJC the following year. 

k) Some of us needed to gain access to JC facilities to participate in a Micromouse competition during the weekend. We climbed over a gate and broke into the college campus to prepare for it. My classmates will commit a crime to win a Micromouse competition.

l) At one point, students were spreading this rumour that a Physics teacher had a vasectomy over the school holidays. 

I should remind readers that NJC could have been a cooler place to study in 1991. We were labelled stoners by the CJC and ACJC folks. We even have installed a "Stone Garden" in the old campus. I hear of folks from my batch who experience a much more depressing NJC, one that gives more privileges to minister's children. In practice, though, I enjoyed my JC days as part of a crew of fellow lunatics in an asylum and still am grateful that I still have good friends from those two years.

Though we were hard-working as hell when it came to the crunch. I never experienced that level of kiasuism, dedication and conscientiousness until I went to SMU Law School many decades later.