Growing your tree of prosperity
Growing your Tree of Prosperity is an introductory investment guide written specifically for Singaporeans who wish to take their first step towards financial independence.
Friday, January 31, 2025
Happy Chinese New Year of the Snake !
Monday, January 20, 2025
Why an 8% safe rate of return can be better than a 4% one ?
- We use CPF-Life to generate a bare-bones existence even at the FRS level. About $1,100 in today's dollars under the standard plan.
- We use a dividends portfolio and an SWR equal to the current yield to cover the shortfall, which is about $400-$600 monthly compared to CPF-Life.
- Our residential home is a source of capital gains and room rentals, covering our bequest motive.
- Our kids, if raised correctly, are annuities of last resort.
Saturday, January 18, 2025
Becoming.a Main Street Millionaire
One of the side effects of being in hospital for the greater part of the day is that I can read peacefully, so I am actually faster at preparing my course materials and I can now wholeheartedly recommend a good book for readers of my blog.
One of the arguments going on in the FIRE movement are the latest salvo of brickbats thrown at us. Somer folks think that retirement should be postponed to preserve social capital, others claim that working may also mean that there is no genuine security that comes from the investment portfolio. In both cases, I wanted to jump into the fray, but I don’t think there will ever be an end to these skirmishes. FIRE’s ability to attract detractors is a testament to its strength.
Instead, I want to invite readers to consider the alternative to FIRE in the form of a business acquisition. In this book, author Codie Sanchez suggests that a good life can come from taking over a business from a retiree and then finding ways to automate and digitize the operations. While I do not have experience doing this, my brother in law is an excellent example of doing extremely well in life following this play book and he owns factories all over the ASEAN region.
There are two extremely valuable gems on this method of wealth generation.
The first point is to look for businesses that are immune to market cycles and easy to operate, then offer to pay about 2-5 PE ratio for such businesses, finding ways to achieve vendor financing along the way. This is not easy to do in Singapore as you will then be limited to businesses like laundromats and Gachapon machines. I find this section an absolute gem then because I can then use a stock screening software to find stocks trading below 5 PE and ample free cash flow and seeing whether I can buy cheap businesses from SGX. I’m going to keep mum on my screen and the results, but I have at least one investment idea from this book.
The second point is the idea of the technology stock for SMEs. Modern small businesses need not be powered by employees but active automation can be done with an array of software as a service solutions. For example, for employee commmunications, SMEs can use Slack. For documentation and SOP, can use Notion. For recording of screens training, can use Loom. This section alone justifies paying for the full cost of the book, but I needed to consult my mastermind group of young influencers to translate into software we actually use in Singapore. I have to admit that I’m actually very enthused to bring this technology stacks into Polytechnic training as this is the kind industry streetwise diploma holders need to compete in this world.
For one thing, I don’t believe that a person’s ambition dies just because he has completed the FIRE movement. I’ve been checking out business franchises, and readers and folks who listen to my podcasts have been directed to looks at entrepreneurship to complement the FIRE journey. Buying a consistent business is a very different skill set from investing. If you find the right business, you often do not pay more than 4-5 PE for it and if you pick well, it can pay for an operator and leave plenty of “almost-passive” income for you. However, if you backtest a SGX strategy that has a PE below 5 and dividends above 3%, you would have lost money of the past 10 years.
I hope readers will find a way to read this book and even find a way to give its ideas a spin.
Do keep me in the loop.
Wednesday, January 15, 2025
Dealing with a crisis - no updates on this blog for a while
Last weekend, I found my mum looking confused and unable to form coherent sentences and I ended up getting an ambulance to send her to a hospital as it looked like a stroke. For the last few days, I’ve been shuttling to and fro from the hospital.
Just yesterday my mum transitioned from the ICU to an ordinary ward and I can breathe a little easy, but the road to recovery is going to be very long as she’s lost the ability to speak.
I’m also sitting next to her while I’m hammering out this article.
All I can say is that I’m grateful for a few things:
- I’m glad to be at Woodlands Health where I can do some work and shuttle home over one stop where I can bring what my mum needs from the house. There’s even a new bus 967 that lets me do this.
- We’re financially ready for a catastrophic event to occur, although the hospital has not even broached the subject of Medisave use to me yet. They seem to focus on patient first before payment.
- Compared to other stroke symptoms, my mum’s were light. No paralysis of half the body and I can play charades with her to guess what she wants. My mum even had the presence of mind to get me to prepare her medical prescription to be shared with the hospital.
For the past three days, my mind has not been calm to say the least. I suspect the weakest link in dealing with this event is me. I was still able to do my preview last night and have two days of lessons starting this evening.
Financial preparation aside, I’ve learnt how vulnerable I am, it was hard to be along in a room as I’ll begin ruminating about what i could have done better as a son. There are also a lot of unknowns like how would long term care look like, and what my options are, so I managed to get a social worker send me brochures for me to meditate upon.
Everything being said, I have friends who have gone through this themselves and they are actively helping me cope. I also am lucky have a friend who was able to meet me for breakfast to just cheer me up before I visited the hospital. Relatives from across the causeway are providing heavy duty professional medical advice, going as far as to read scans and share with me what the issue might be.
Finally, I’m super grateful that my wife and kids can hold the fort. Almost everyone has some light flu symptoms. Hope its not HMPV.
Note : I might disengage from some chattier groups for now. It’s nothing personal.
Sunday, January 05, 2025
Is it time to make peace with commissioned financial advisors?
In case folks are wonder, this case is now taught to Polytechnic students in Singapore. I have a special sort of interest in this case because, according to what I read, I was surprised that my pupil master was instrumental in winning this case and crafting the arguments for the appellant.
Tuesday, December 31, 2024
Did you make any resolutions for this year ?
For Japanese Literature, I read What You Are Looking For in the Library by Michiko Aoyama. It is a lovely, soothing book that discusses why people should read and how books can turn your life around. It should be given more attention in Singapore because adults read much less. The other book is Lantern of Lost Memories by Sanaka Hiiragi, which is not my style but forces us to ask questions about what day we would like to relive after we pass away.
This is the furthest I can go with serious literature.
For fantasy literature, I finally started with the first book, Xenos of Eisenhorn Trilogy, by Dan Abnett, which is a page-turner and a great introduction to the Warhammer 40,000 universe. Then, I could cover 40% of the fourth book of Brandon Sanderson's Stormlight Archives, which feels more superhero than fantasy. Still, it's become compulsory reading for me lately as it spawned the most successful RPG kickstarted.
Finally, I could complete just one large volume with games: Monster, Aliens and Holes of the Ground by Stu Horvath, which runs down different RPGs from the 1970s to 2010s. This is one crazy project that took a few weeks to complete.
That sums up my December, I could not binge-watch, and I now look forward to reading the more "useful" books again starting tomorrow.
I was once again with a friend at his usual Japanese lounge and bar, and I was stunned when the hosts asked me what my resolutions were for 2025. I was so focused on processing what happened in 2024 that I forgot what I wanted in 2025.
Last year, I did not dare to make any resolutions, but I hinted that I might start writing a new book or starting a content channel. Still, I did not do all that as my law lecturing workload increased by 300%, so I could be more over-employed as I juggled two freelance roles. The good thing coming out from all this was that 2023 bottomed out, and a quiet benefactor appeared in 2024 to make sure that, in the aggregate, I earned more than 2023 and may start paying taxes again in 2025 after a 4-year hiatus. The market performance, while muted, was still positive, but we will leave it to a Dr Wealth article I will have to start writing tomorrow.
Overall, I ended 2024 in a slightly better state than 2023 - actually, 2024 was fun with class reunions and hanging out more with my secondary school and JC friends. Socially, my engagements have become more positive. Health-wise, there are no new health scares, and I've gotten used to my prism lenses. Juggling freelance work will never be as stable as regular employment or receiving dividends, so my only resolve is to manage these priorities well and not drop the ball in 2025.
I'm obviously looking at new collaborations. I'm also looking carefully at the kinds of professional conversion plans launched in 2025 and will not hesitate to pick up a considerable, solid skill like AI software development or even quantum computing. But these are iffy and random options, much like my failed attempt to become a professional GM.
However, a post-financial independent life needs to have a string of beautiful failures and audacious moves because the consequences of failures are so small. Still, the impact on the ego continues to keep one humble.
Saturday, December 28, 2024
Harsh Truths about Masters Degrees and the folks who have them.
a) If you get a local tech or engineering Master, you should seek an overseas posting.
You'll only read inconvenient truths on this blog, and I doubt you'll find anything in the mainstream press that will publish stuff like this.
Suppose we believe that some Master's degrees can add a lot of shine to your resume and raise your income. In that case, we have to accept that there is a possibility that some qualifications can reduce your employment outcome even though there's this belief that more learning should be a good thing. After all, we live in a world where a guy can marked down on a dating app if he loves anime or poses with a cat in his profile photo.
For a while, we know the effect being a private university graduate has on your starting salaries. What if having some Masters degrees marks you as having a political orientation or a more hedonistic outlook? It's a stereotype, but some stereotypes are true. In many social sciences, academics are leaning to the far left. Why would a capitalistic and bottom-line oriented multinational company hire them?
Elon Musk tried to hint as such, saying that he prefers skilled tradesmen rather than those incremental political science types - which aligns with the data from The Economist.
d) A Master's degree may be useful in qualification laundering
Sometimes, I get readers stuck in a dead-end job because they have a private degree. In such a case, if they can get a Masters degree from NUS or NTU, it would take the focus away from their private degree when preparing for a job interview. This might be one of the rare and more practical reasons to pick a run-of-the-mill Masters from a local university.
I call this qualifications laundering; it's not a nice name.
But I like it.
Anyway, I'll catch you guys again closer to the new year !