Settling into a retirement lifestyle...

After spending my first week populating my timetable, I've finally settled down into a slower retirement lifestyle.

My day today began with a brisk jog because I've recently been waking up tired. The jog managed to release some endorphins in my brain and gave me a high before I had my breakfast. After that I settled down in Woodlands library to attack all the quizzes in the "Computing for Data Analysis" course in Coursera.

I think so far, a combination of physical exercise, programming study and reading will allow me to spend my retirement with relatively low personal expenses. Beginning tomorrow, i will be attending a series of Finance/Tech related talks to find out what the rest of the world is thinking about.

Anyway, let's talk about constraints today.

When i retired one of the things I wanted to do is live with some constraints so that whatever I'm planning becomes sustainable :

a) No computer games.

Initially I used to dream of wasting my time playing MMORPGs upon retirement but now I think I'm getting too old for that. By restricting myself from games, I have to force myself to seek alternatives for mental stimulation and flow, which led to MOOCs being the new MMORPGS. Scoring quizzes, getting technical certificates and benchmarking against students internationally, is not too different from killing monsters and taking their treasure.

b) No more taxis, restaurants, weekend movies and other large expenses.

This constraint is something I made up until by first gush of dividend payments this March. I have a reasonable dividend flow of about $24k a quarter, if I spend the first 3 months on austerity, I would have a  cash hoard which I can use to fund my courses and condominium renovations for the rest of 2014. So far, keeping expenses low is really easy if you do not have a day job. Your willpower can be used solely to keep expenses down.

c) No travel... yet

This constraint is practical. My wife is on a new job and has yet to accumulate enough leave, as such I will skip travel for at least 45 days and, even if I travel, it would be to KL for my next book buying spree. There are certainly plenty of opportunities to see the world but I want to get fit so that I can take long walks and endure the "hardship" of living in a cheap hostel.

There are some projects I will be holding in reserve, I would like to setup an online store to sell my books sometime next month, thereafter I think there is room to learn a new language. If I get fitter over the next few weeks, I should be able to enroll in a self-defence class.



 

How rhetoric can be used to diagnose the problems with PAP.

One of the constraints I built into my retirement plan is that the learning should never stop. My learning program will mirror a liberal arts program, something which I was unable to pursue in my youth. Right now, I'm trying to teach myself rhetoric by day and R programming by night.

After some basic grounding in Rhetoric, I think I am getting some insight into the recent problems faced by PAP.

Rhetoric is the ancient art of persuasion, Aristotle divides it into the three parts of Ethos, Logos and Pathos. By understanding the three components of persuasion we can look into the PAP's strengths and weaknesses.

a) Ethos

Ethos is an appeal to authority. When someone has ethos, this person not only has a stake in politics but is also qualified for the role. PAP candidates have usually strong ethos, coming with an almost perfect academic record and has enough knowledge to run a constituency. The PAP's weakness is that it's difficult to field a candidate that's vested in the interests of middle-class voters as many believe that PAP chooses elite candidates that really cannot understand the problems faced by many Singaporeans today.

b) Logos

Logos is a measure of logical appeal. This is where PAP reigns supreme. No matter how you look at government policies, PAP is the candidate of choice to push unpopular but logical policies to be accepted by the electorate. Having a policy based on statistics and logic ensures that it's watertight and immune to attacks by the opposition.

The having the strength of logos is also it's weakness. Appeal well to logic comes at the expense of being human. Which brings us to the next point...

c) Pathos

Pathos, or emotional appeal, is the PAP's Achilles heel. PAP has lost its emotional appeal which made it the dominant party in the 1960s. PAP candidates are largely drawn from the upper echelons of the Administrative service, spent most of their lives being celebrated for their academic achievements. These candidates are then pushed in front of the people and made to show that they understand the plight of the poor and disenfranchised. Every remark which the people deems insensitive is then magnified a thousand fold in social media.

Fortunately, I have some ethos of my own. My time in NTUC and a government agency actually allows me to offer some ideas to beef up the PAP in future elections.

This is what I think should happen to turn the tide :

Launch an NTUC Scholarship ( eg. The Devan Nair Industrial Relations Scholarship Award )

Having worked in both NTUC and a government agency, I will make the conclusion that NTUC Industrial Relations Officers have way more EQ than many Administrative OfficersI knew.

Yes - Senior civil servants tend to lack Pathos.

The PAP should tap the Labour Movement for its future generation of leaders.

For emotional appeal to work, the government needs to invent a scholarship which is heavily biased towards candidates who come from disadvantaged backgrounds. These candidates will then be offered free local university education and be bonded with labor unions for up to 4 years.

By sifting candidates based on grit, tenacity, perseverance, and to a lesser extent academics, the PAP can slowly build a cohort of candidates which appeal to the middle and working classes.

Quick initial thoughts on life without a day job.

The reality of having no day job has not started to sink in yet as my first weekday without employment was actually spent quite productively. I spent the morning in NUS certifying my transcripts and the afternoon helping my in-laws with an errand.

For the first time in years, I had decent sleep. My Fitbit registers about 5.5 hours of sleep on a normal weekday when I needed to go to work the next day, yesterday I had the luxury of having 7.5 hours of sleep and great rainy weather to complement my first full night of rest.

When I woke up I had grains and cereal for breakfast, something which I hated in the past because they took too long to chew and made me late for work. Now, even though I hate cereal, I had the whole morning to finish my breakfast so there's no excuse anymore. This meant more energy for the rest of the day, and no carbohydrate-induced coma after lunch.

Lunch was also different. In the past, I would choose any stall with a short queue and always came off thinking that food in Singapore tastes bad and is overpriced. Today. I went to a hawker centre and deliberate went for the food with the longest queue and had probably had one of the best Wanton Mee in Singapore for $3 ( It was at Clementi hawker centre ).

I also saved on coffee, as I no longer require a shot of caffeine to concentrate on my approval papers.

I think the insight I had for today is that a hidden side of Singapore exists once you escape the rat race :

So long as you are not competing for resources with the rest of the corporate world, transportation rides are leisurely, food and even movies can be cheap.  

Heather Chua is wrong ! All RGS girls should absolutely fall for ITE guys !

Once the storm has calmed down on Heather Chua, cool heads will prevail and she will be revealed for being a troll who is playing the rich-poor gap card to get attention from the Internet.

There are certainly many unions which people will support, much like the way some football fans love or hate Manchester United :

- Twilight fans wage war over whether Bella should go for Edward or Jacob.
- Hunger games fans support the not-so-fun-to-pronounce Peetniss union ( Peeta/Katniss )
- Mediacorp fans also gush with excitement over the Joanne Peh/Qi Yuwu union.

As for me, I think there is a great value and logic in the RGS girl / ITE guy union. So if Heather Chua is right and there is indeed an RGS girl who married in ITE guy, I'll be cheering them on !

It's something policy makers really think about.

Right now, i think Singapore still believes in traditional Asian matches, where an "A" man is expected to marry a "B" woman, a "B" man is expected to marry a "C" woman, etc... Such an arrangement will result in an overwhelming supply of "A" women like those from RGS and the misunderstood ITE guys who get an unfair rating because of the elitist society that we belong to.

An RGS woman is intelligent and completely capable of looking herself, does she really need an intellectual powerhouse like an RI-guy or the swaggering wealth of the the ACS guy ? She's probably smart and rich enough to take of herself.

Here's why ITE guys should be given fair consideration:

a) ITE guys start work earlier and can start compounding their savings at a younger age.

The problem with advanced degrees is that you start work late. While you have a higher pay, you will have fewer years to compound your savings. ITE certificate guys start work immediately after NS at about 21. Compare that with a medical doctor who can only get their first paycheck at age 26.

b) ITE guys can expect better increments due to the political sea change in Singapore.

Have you wondered why plumbers and electricians do so well in Australia and England ? These economies are not as open to globalisation as Singapore is. Our inflow of foreign talent keeps the folks in services related fields low. As our electorate is starting to reveal their fangs in the last election, I think that blue collar work and services oriented jobs will receive a larger proportion of pay increments in the past as foreign workers are sent packing. So it's highly probable that an electrician can have a better increment than a magazine editor in the next few years.

c) Opportunity costs to have a single breadwinner in the family is low.

A professional couple is always struggling to balance work with family. If you disagree with my points (a) and (b). the ITE guy can quit his job and start doing stuff to keep the family running. If his pay is low relative to his wife, it only means that it the opportunity cost of quitting his job is lower. If a RGS doctor marry an RI/ACS lawyer, the opportunity cost for one spouse to quit is too high and child rearing duties normally become outsourced to the maid.

I think with that in mind, perhaps policy makers should really start to address the oversupply of highly educated women and blue collar men. Here are my proposals :

a) Have special subsidized dating events for RGS women and ITE guys.

While the policy of having SDN run events with the private sector comes from a good place, tax payers money should be channeled to where it can help the most. RGS-ITE couples can run these events and talk about how to make their union a success.

b) Provide an actual cash award for such couples.

In countries like Qatar, men are financially rewarded for marrying locals. Why not credit $50,000 to such couples for a start. I think the impact on our budget will be minimal.

In summary, I think part of the reason why people are hurt by Heather Chua is that Singapore is truly elitist. While people get upset with Heather Chua, no one has actually stepped forward with a logical reason for RGS women to marry ITE guys and propose policy interventions.

Some thoughts on my last day at work.

Today is my last day of work.

Officially, at age 39, I am retired. But in practice, I expect take a good rest and then I will decide what I will do for the rest of my life. At the moment, my quarterly dividends will pay my bills and mortgages, something which my investment income has been doing for sometime.

At this stage in my life, it's probably not wise to stop working. Even if the bills are being paid, work is a great way to meet people and interact with friends. Work also keeps my mind sharp. What I am currently quite sure about is that I will not be pursuing jobs that I've been doing for the past 15 years. My jobs tends to be very procedural or bureaucratic in nature with very little technical expertise required to perform them. Two more years and I would have lost all my industrial know-how. The 90 minute commute in each direction is also quite draining.

In the short term, my priorities are follows :

a) Keep healthy and improve my diet.

As much as I hate to, not having to rush to work means that I can take my own sweet time to finish my bowl of oatmeal. I also have a Fitbit to track my activity to ensure that I am at least twice as active as before. And retirees also have that rare luxury of 8 hours of sleep everyday. (My Fitbit tells me that for my recent working years, I've been clocking only 6 hours of sleep a day. )

b) Develop myself as a person.

Being an IT engineer who has to track market movements everyday takes a toll on your humanity. Retiring gives me a rare privilege of really examining my life. One of my personal disappointments in life was missing out on Cornell University scholarship during my A level days due to my poor ECA and CL2 results. This is a great time to get acquainted with the liberal arts again. I'm starting with the personal study of Rhetoric. These days are plenty of web resources and library books which I can use to improve myself even though being self -taught is hardly equivalent to being taught in an Ivy League University.

c) Update my tech skills.

As an investor, I need to keep up with my technical skills. Analytical tools like the R statistical language are exoskeletons of the mind. I'm going to spend my evenings attending a MOOC to pick up enough R to crunch financial data-sets. Right now, I compute my financial ratios by hand and key them into a spreadsheet. Perhaps proficiency in a statistical programming language can help me with better investment decisions. I would also be trolling Bloomberg for free classes on their platform. There are also plenty of things about the tech world which I'm curious about, like Hadoop and DevOps.

Long term, I have not decided what I want to do. One possibility is to return to school, another is to start a business and a third option is to seek part-time work as a lecturer. I will do some travel and engage in my hobbies before I make a decision.

In the meantime, you can expect some interesting articles to be put up on this blog.
 

We should treat the $300,000 oath as relationship advice instead of financial advice.

Over the holiday season, a lot folks asked me how I derived the $300,000 as a target asset value a single Singaporean male should accumulate before he makes the decision to get married.

The primary idea behind $300,000 is that this amount that could generate a minimalist lifestyle to sustain a single male such that he can attempt to switch to a better job without having a ready job offer in hand. As a portfolio of REITs, Business trusts and dividend yielding stocks can be designed to yield about 8% in the current market, the $300,000 portfolio is expected to generate about $2,000 in monthly income. I estimate that a single male who has the discipline to generate $2,000 in passive income in his mid-thirties probably would not need more than $1,500 a month to live on and can even save about $500 a month to keep his portfolio growing.

After a discussion with other folks, perhaps you might think that 8% is too much of a stretch for a portfolio. As it turns out SGX has a decent number of stocks which yield about 6% but have a lot more potential for dividend growth. So with a different portfolio mix, our happy single bachelor can expect $1,500 a month which grows at the inflation rate without a need for reinvestment.

After some further thought over the holidays, I came to the conclusion that the $300,000 oath is good financial advice but works better as relationship advice.

Tyler Cowen of the Marginal Revolution fame wrote an article on Singapore's low birth rate which you can find here :

http://marginalrevolution.com/marginalrevolution/2013/12/why-does-singapore-have-such-a-low-birth-rate.html

In this article, Tyler explains that ethnic Chinese birth rates are low in Singapore compared to Singaporean ethnic Malay birth rates or even ethnic Chinese birth rates in Malaysia. He attributes it largely to a combination of the successful education system in Singapore which gave women more opportunities in the workforce but the persistence of traditional values which makes ethnic Chinese women still want to marry up. This creates an oversupply of educated single women and uneducated single men who will never marry each other.

Tyler's epic conclusion is that Singaporean Chinese men simply need to be more confident about themselves.

So this is where the $300,000 oath comes into the picture :

a) Dating a Singaporean Chinese women in your 20s is challenging.

I have experienced this myself along with the tons of single men in my clique.

Dating a Singaporean Chinese woman while  in your 20s is exhausting and extremely damaging to your ego.

Some women keep a running list of priorities in their head and will cancel dates with you if a better candidate calls them out. Others who know that they are young and pretty will act like a princess and expect you to bend over backwards to accommodate them in most engagements. Most are not playing for keeps and will want to shop around until they have built their own careers.

By taking the $300,000 oath, you spend your 20s doing what you should be doing in the first place - accumulating wealth, clawing up the corporate ladder, and getting advanced degrees.

b) $300,000 in your pocket puts you higher up on her priority list.

There is something different about men in their mid-30s with $2,000 passive income every month. They are passionate at work and have the worldly experience to back it up. They are conversant in the world economy and have a proven track record in investments.

For lack of a better term, they ooze sex appeal and their star is expected to rise further.

A financially independent man in their mid-30s, ceteris paribus, better than a Gen-Y or Millenial boyfriend and can not only act as a companion to a woman, but also a wise mentor to the 20-something career woman.

So expect to be upgraded to the top of her list when you start opening up to better dating ideas.

This means fewer cancelled dates and less ruined movie tickets in the future.

c) You become God's gift to women at your 30s age group.

At this point,we need to be realistic, not every 30-something with $300,000 is going to attract a women in her 20s. Singaporean women in their 20s look great and have standards and some of you guys may be intensely introverted, lack facial symmetry, devoid of a sense of humor or not "evolutionarily-advantaged".

At this stage, have no fear, for there are legions of successful, clever and capable women in their mid-30s who are waiting to receive you with open arms !

It takes a very wise and capable man to accept a highly educated woman in her mid-30s. They generally won't fight with you over trivial affairs and are very pragmatic and realistic when planning a wedding. They are good dates and make supportive spouses.

So there you have it.

The $300,000 oath for a Singaporean Single male makes decent financial sense but in actual fact, it forms the foundation to having more confidence when engaging with members of the opposite sex.

Tyler Cowen talks about the need for confidence.

I am showing you how to buy it.

The hogwash that is 成家立业.

You don't need to spend 4 years in ACS to know that most Chinese proverbs are hogwash.

After failing every Chinese paper since leaving Secondary school, I have developed a natural tendency to be skeptical when someone tosses a mysterious proverb at me.

Today I will discuss the proverb 成家立业 or to settle down and establish a career. A variant of this proverb, duly expanded to six characters, interprets this as an act of settling down before establishing a career.

Chinese culture and language has a history spanning thousands of years. If we really think about the context for the creation of these proverbs, it does not take a lot of thought to know that they probably came about when China was still an agrarian economy.

In such a situation, a farmer should prioritise family before career because children act as extra pairs of hands in a farm. Having children earlier provides more cheap labour to be able to harvest more crops and earn enough to expand the farm or even have more children.

Fast forward to this modern day, Modern Chinese balk at the idea of starting families before they are ready to do so. Children requires more than 2 decades of nurturing before they can contribute to a knowledge-based economy.

But because folks naturally like the idea of starting a family and having children, they don't really spend a lot of time to think about the concept of readiness when it comes to having a family.

Yes, you can get married in your early thirties, the Government even wants you to do this. There are many banks who want you to get a mortgage along with that car. You are young, fabulous and upwardly mobile. You are worth it. YOLO !

Early marriages with a house, children and a car means financial liabilities in your 40s.

You would'nt feel it in your thirties because you are open-minded, sharp, dynamic and paid relatively lowly in the workforce so managers will tend to leave you alone.

When you get to your forties, your actions will bite you the ass. You need a high income to sustain your liabilities. As you have school-going kids, you hunker down and take whatever the corporate world tosses at you but you are no longer as fast as the younger guys in their 30s or as cheap as foreign talent.

A society with debt laden men in their 40s who willingly take anything the corporate world tosses at them will only create a management caste that would not relent on the workforce. Managers will be able to commit wanton acts of abuse as they know that for your salary, you will accept any terms the company has to offer. Don't believe me ? If your office as mid-life workers, go have lunch with them and find out how many actually feel that they are prisoners in the current job roles that they have ?

One of the ideas that Authorities would like to spread in Singapore is that car ownership should not be an aspiration. Hence COEs inflate the value of a car to about $150,000 or more. Cars are a luxury and have no place in the 5 Cs. You need to be very exceptional to be a car owner.

If you follow this train of thought and agree with the Authorities, then you will be able to accept my bitter realization and come upon this conclusion:

a) A wife, who has a right to co-own a flat with you and can potentially have your child, is not an aspiration.
b) A child, which cost upward of $1,000,000 to raise,  is also not an aspiration.

Like cars, a family is a luxury. You need to be very exceptional to be a family man.

立业成家

Based on my opinion, this should be the Mantra moving forward. Put career first, resolve all your mandatory expenses by land/equity ownership before moving on to start a family. If you can secure your family's basic survival by capital ownership and passive investment income, no company or abusive manager can put you in chains.

If you are a young male who wants to take on the world based on your own terms, start by imposing a Certificate of Marriage Entitlement (COME) of $300,000 on yourself. Work hard until this target is reached, then determine if you are willing to delay financial freedom by starting a family.

You'll never know where this approach to life will take you in the future.

Relationship advice for the Single, Young and Male Investor (SYMI).

Conventional wisdom on love and marriage would be as follows :

a) Date while you are in University.
b) Get your degree.
c) Work for a few years.
d) Get married.
e) Get a home mortgage.
f) Get a car.
e) Work together towards kids and retirement.

This pre-packaged plan comes as part of the Singapore Dream.

If you had followed the plan earlier, you will become like the hundreds of colleagues I know who feel stuck in their jobs, their companies becoming prisons which they live in. These employees have mouths to feed at home and mortgages to pay and if they do not have the relevant career agility to move on, they fall prey to poor management.

The savvy, young investing male, replete with market knowledge, can play a better game.

The playbook I propose should be as follows :

a) While in University aggressive play for the best grades. This is the Hunger Games, may the odds be ever in your favour.

b) Take on as many management roles in your CCAs you participate in. This is the most consistent way to score a big Bank or MNC position. You only want a bank, consulting firm, prestigious tech firm like Apple or Google or a DJIA counter business. ( This gives the best odds of 10% increments for first 10 years. )

c) Work overtime and aggressively save and invest with a target of $300,000 to ensure that you can live within your investment income. This may require a savings rate of 75%. ( Too bad, live as a undergraduate for the next 10 years. If you are lonely, sign up for a MOOC. My date in my late 20s was the CFA exams.  )

d) Date casually in your 20s, but start playing for keeps in your 30s. You are likely to hit your target in your mid-30s. Find someone who shares the same values as you.

e) Don't make a commitment to someone until you hit $300,000 in portfolio size. Odds are you will only get married around mid-thirties.

g) Start building your spouse's financial independence by channelling three incomes into her portfolio. ( Your's, her's and your portfolio's )

h) Once you are both free, have a kid and take on a mortgage. (This is starting to sound like a strategy for Starcraft II )

i) Work to clear your mortgage, kid expenses are not too large and you should be able to get the investment income to sustain a child before the kid gets into play-school on two incomes. ( Actually 4 incomes by now. )

j) Thanks to the power of compounding, you two will be able to reach the point where every expense can be paid via your investment income sometime before 45.

h) If you and your spouse feel like it, retire. Otherwise, enjoy your career.

The consequence of this alternative play-book is harsh - Don't accumulate $300,000, don't get married so naturally this is not something you'll see in government ads.

The problem is not so much being stuck with a lousy spouse but do you want to spend 10+ hours in a workplace and be miserable for 50% of your life ? $300,000 portfolio let's a single guy choose the workplace he wants.

The other advantage of this playbook is that many young males do not realize how attractive they become once they hit financial independence in their mid-30s. You are worldly and you've proven yourself in the corporate market.  Grabbing a young 27 year-old wife from a Gen-Y herbivore hipster is like grabbing a lollipop from a baby - Just remember to shout YOLO! while you are at it.

Old age and treachery will always overcome youth and speed.

Mechanics of Early Retirement.

It's amazing how your identity changes as you get older.

My pals used to introduce me to other people by describing me in certain ways as I was growing up, at some stage I was...

... The Dungeons and Dragons guy
... T$R Chris
...The Toastmaster.
... Chicken Man ( Urgggh... Long Story )
...The Troll.
..The Crazy Guy.
...Guai Peh Peh ( Strange uncle )

And my personal favourite...

...The dude who played with his cats testicles and has the scars to show for it.

These days, people introduce as the guy who's retiring next year and he's only 38 !

...and it's so challenging trying to explain myself because some folks would have all sorts of questions on what my secret is, or whether am I some variant of a phony attention seeker.

Anyway explaining what I did to have scars on my hands was a lot easier.

I thought maybe if I written a short article on my version of 'retirement', things may clear itself up.

The simplest way to look at retirement is from the point of view of a single dude who lives with his parents, has no debt, and manages to save $300,000 before 35.

This $300,000 is saved by earning a regular income at a day job. This dude works overtime and minimises his expenses by eating at food courts and taking public transport. He has no expensive hobbies and only has time to read about taking his career further or making more money by making a few investments.

Now, suppose this dude discovers a way to create a portfolio that generates a dividend yield of 8% a year. It's a combination of business trusts, REITs and mid cap equities which return high yields ( Please refer to other awesome local financial bloggers for actual investment ideas. )

8% of $300,000 is a dividend income of $24,000 a year or $2,000 a month. If this dude can keep his expenses within $2,000 a month, this dude can keep running forever without an earned income and can be considered to be financially independent way before 35 years of age.

But like all dudes, this dude may want to get married and have kids some day. So he marries someone with the same values and they work together to earn multiples of $300,000 to cover each person's expenses within the family. By a certain age, the dude might be able to cover his family expenses and pay for his mortgage using only his dividend income, maybe even saving a portion of it in the process.

At this stage, it is certainly possible for someone to retire based on the power of the raw passive income that they are getting every quarter.

But should they exercise this power and live happily ever after ?

I think the answer is no.

At 38, I'm not naive that there is a 100% chance  that this stage of retirement can be sustained. ( Actual odds are determined by a Monte Carlo simulation ) Even if my portfolio holds up, the boredom will probably kill me. At best, if I peg my odds, I should not need to touch my capital for perhaps 3-4 years, although rising interest rates can ruin my plan in the medium term.

But 3-4 years is just what it takes for a person to take stock of his life and decide to do something for his personal interest and passion.

And that is precisely my plan.

Retire for a couple of years, take stock of my life and then take it in a radically different direction.

Ground Zero - A new beginning...

It's been quite a while since my last article.

As of today, I resigned from my government job. My last day is 3rd January 2014.

For the first time in my life, I've resigned from my job without a solid plan on what I'm going to do next. It's a strangely liberating experience, and actually a little scary. I have never left a job without another one waiting for me. At the back of my head are lessons from Moshe Milevsky on the meaning of human capital - did I just write off millions of dollars of future income I would have earned had I kept my nose on the grind ?

Is this some time of mid-life crisis ?

In a sense, I've been hatching this plot for the past 15 years, trying to grow my annual investment income to that of the equivalent of a median household income in this country along with some spare change, about half of these investment flows get farmed back into the portfolio or the home mortgage, so I guess the mathematical part of the retirement equation has been solved.

What remains unresolved is the humanities component of my retirement plan. Too many books focus on the nuts and bolts of retirement. Some focus on hobbies, others on philanthropy.

But too few focus on living a meaningful life - how to extract the most of your time and how to engage your friends who may still be busy building up their families and wealth.

I have about 20 working days before lose my earned income for quite a while. Maybe this retirement will be short-lived,  maybe I'll sustain it until I die of old age. Right now I have exercised many options, applied to many institutions to pick up many skills to keep myself occupied so I don't go cold turkey in 2014. The plan is to have no plan, or perhaps, the plan is to have too many plans that arise out of spontaneity. I'm betting that a semblance of Order would arise out of Chaos.

But one things for sure...

For now, when people ask me what I am doing or what I intend to do next year, my answer is "I don't know."

Some very disturbing aspects of how NTUC treated the Amy Cheong case.

First of all, I was very disturbed and upset with what Amy Cheong said. As a former Assistant Director in NTUC-ARU myself, this case really hurt because I had to brace myself for questions which may come from Malay friends and colleagues who may ask me what she was like, etc.

Personally, this case should be closed, the mobs on the Internet got what they wanted, they should be happy. Today was a good day for racial harmony, all races united to condemn Amy's comments on FB.

But for current and former employees of NTUC, many concerns remain.

After Amy was sacked, I realised that this raises more questions about my former organization's practices.

Almost all employees in NTUC-ARU are encouraged to take up Union membership. In fact, I'm still a member. I pay $9 a month to be part of the Unions.

While most enjoy membership benefits in the form of link points, being a Union member entitles you to workplace representation.

If you follow the timeframe in which Amy posted her offensive comments and the time she was sacked in the news, this begs the questions of whether the Unions had a chance to step in to negotiate the terms of her punishment with NTUC management.

Kong Hee, Ng Boon Gay and even T T Durai had trials and a fair opportunity to defend themselves.

This looks like a bad case of a knee jerk reaction.

NTUC's ultimate role is to defend workers from their employers.

I was shocked and dismayed that there was no visible attempt to at least intercede on behalf of fair play. Amy may be wrong but can the punishment be lightened in light of her Union membership. More disturbingly, can a Union step aside because it was politically correct to do so ?

I can certainly imagine how this can be better managed:

a) Secretary General Lim Swee Say suspends Amy Cheong with immediate effect today.
b) NTUC does a thorough investigation with HR over two weeks, lets cool heads prevail and determines that this is an offence that warrants termination.
c) Staff Union of NTUC or SUN intercedes on Amy's behalf, General Secretary of the Union (currently an ethnic Malay lady ) declares that they are against racism but is is open to forgive the perpetrator. SUN lobbies to downgrade the punishment.
d) Amy gets demoted and volunteers 100 man-days of service to the Malay Community.
e) After serving time, Amy speaks of her experiences and how wrong and remorseful she was.
e) Everybody comes together to celebrate how well the affair was handled and how a crisis becomes a teachable moment for forgiveness and remorse.

While it's right to punish someone for racism,  the punishment must fit the crime and justice needs its due process. With authorities rushing to condemn a wrongdoing and pandering to mob rule, we should not forget that someone's livelihood has been permanently destroyed over a private comment in a facebook page. Should we even start going after members of the mob who used this opportunity to make some racist statements of their own ?

I could think of some political figures who have done much worse and was given way better treatment for it.

Price to pay for financial independence.

A message that will definitely go into my next book on Personal Finance is to list out the price to pay for financial independence. It gives the young reader an idea of what sacrifice must be made to become financial independent in their 30s, it also explains why many people in their 40s struggle so hard to pay bills and yet a minority will just cruise comfortably in their forties with hardly a gripe.

Let's start with something simple first :

a) Can you forgo consumption in your fabulous twenties.

To me this is the cheapest price to pay. Your twenties is the time you can take the most punishment from the corporate world with almost no dependents. You can take on 16 hour management consulting or investment banking jobs to accumulate your wealth. There is also little need to consume - gadgets get better with time anyway.

Most investment books just talk about about point (a). If it's that simple, there would be a lot more millionaires in Singapore today.

I think my book will go further than that :

b) Are you willing to be disagreeable and have people hate your guts for it ?

This is something many people are unwilling to do. An agreeable person can cruise along in life with little strife. Type B folks live longer and lower incidences of heart disease.

A disagreeable person, on the other hand, can tell a close relative to fuck off when they try to sell them a whole life insurance plan or their childhood friend to fuck themselves when they into MLM. A disagreeable person can bulldoze their way through work and get the lazy social loafers to complete their projects in time. Overtime, disagreeable executives do better in the corporate world and earn more throughout their lifetime.

c) Are you willing to delay major milestones like marriage and children and risk it never happening ?

Your wealth needs to compound early to make a difference to your quality of life in your forties, an early marriage is a huge financial burden in your twenties and children make it worse. This effect is even worse for women, who have a strong financial incentive to stay single as it increases their income even more.

As I still believe in family, but this is a heavy price to pay if you, like most people, do want to settle down eventually. Even as a man, you may find yourself unable to pro-create when you finally get financial independent if you insist on this limitation too much.

d) Can you cope with an existential vacuum in your forties ?

I am beginning to really understand that price to pay as I near my forties. One side-effect of reaching financial independence early and going through the practice is that it turns me into an ascetic that's not excited about many things.

Car don't really excite me as much as watching a sunset, and I only need a few gadgets to keep in touch with the financial markets. I read some books on marketing to men to see if I can spend my money on more things but all it does is turn me off consumption even more.

The only thing which makes me happy theses days are experiences and my relationships but I can't travel much with a toddler around the house. I can't eat well because it will ruin my blood sugar control.

This ironically makes retirement a very scary idea because I need to figure out how to maintain the "flow" I get in my current public service job.

Maybe one day, I will devote more time to philosophy and become a social entrepreneur. That time will come after I make my contribution to Government service and round up my career in Singapore.

Financial Independence is a battle for your very soul

Financial independence can be a nasty battle for your soul. A decision to get ahead at work may cause you to reframe your colleagues as rivals. Accumulation of more assets can cause you to delay building many meaningful relationships in life. And one day, after you have it all, you need to fight to make your life more meaningful before that inevitable exit.

I knew the price I paid, question is which decision will you take ?

The difference that makes the difference.

This article in an attempt to distil some of my personal experience into something useful for readers.

Since I was an undergraduate, I was never really able to excel in a core initiative. I'm going to share three experiences and then try to see if it's possible to turn them into teachable moments.

a) My stint in the Information Olympiad squad.

I spent a brief time training in Singapore's first squad that took part  in the Informatics Olympiad in 1992. In the selection phase, I was chosen not because I was good in programming but I was able to grasp the concept of a Graph algorithm and explain to the judge without knowing a god-damn thing about the augmented matrices that makes the algorithm work. Even my lecturer's in NJC was surprised I was chosen, because I always had the gift of the gab, my programming was good but not great.

Needless to say I was not chosen to actually represent Singapore, but I was able to participate in the training in NUS which was useful to my stint later as an Electrical engineering student.

b) My journey as an electrical engineering student.

I was slightly above average as an engineering student, I remember my final year as a pretty smooth year for me, I even managed to hit on some girls during that time. One class-mate commented that my most powerful advantage was my public speaking skills which I leveraged to get a string of As in all my communications modules and ultimately my final year project. Being in the Dean's list in semester 8 is traditionally hard because that's the time the hostelites stop drinking and start waking up the fact that they are close to graduation.

I was also able to get a decent ECA record which most engineers have problems doing, which paved way to being accepted in P&G when I graduated. ( P&G was into extroverted folks with a high openness to new experiences in those days. )

c) My work experiences

I spent most of my time in the working world scoring IT qualifications. It was crazy, some years I did 21 exams while holding a full-time job. What I observed is that my qualifications did not help me much, I was quite loyal to the MNCs I worked for and never could achieve good increments when I changed jobs. I explained my strategy to an fellow French student that I was buying a lot of call options on the IT industry. She felt I was being ridiculous. Now I agree with her since most of my options expired worthless.

Most of extra income came from my investments. These days about half of my take home pay is through dividends. My three years slogging for the CFA paid off in the size of my portfolio today. I did'nt even need to leave the IT industry in the end.

Moral of the Story


I think that something my generation failed to understand about success.

Very often, if you focus on one area of specialization, odds of you getting to the top 1% of your field is very hard. It's also very taxing for your sanity.

If you are able to find an alternative specialization and find a way to resolve your current life challenges, life will be a lot easier. My speaking skills in school help me out more than my ability in physics.

This is what I think is possible for most people :

a) You need to be good at your core specialization.

You still need to be competent at your core. If you are an engineer, you need to be able to do ok at your day job. It's a condition to be minimally employed.

b) Find something you like to do and be good at it in your spare time.

I realized that a secondary skill that is related to the following fields will always pay off and make you more useful to your company or business :

• Communications and Language
• Investing, finance or economics.
• Psychology or culture.

c) Develop your secondary speciality and use it to reinforce your core.

This suggestion is neither a appeal for specialization or generalization of skills. You need to cultivate a secondary skill and keep leveraging that skill to reinforce your core. This creates a something unique that only you can do well.

Next steps  

As my next career is in public service, odds are I will need to be able to find a new secondary skill to reinforce my core. I'm looking at the TESOL to reinforce my language skills so that I can write better papers at my job. Of course, getting to the level as an English instructor as a lot of other benefits as it strengthens my writing skills.

Megachurches rise because meritocracies are inadequate.

I don't want to talk about City Harvest or Kong Hee. The law would take care of him if he is found guilty.

Instead, I want to share some ideas about religious organizations and Singapore society.

a) A religion is a great complement to a meritocracy !

Religions are great institutions in a meritocracy.

Worshippers tithe part of their income, in effect, raising their own taxes. In return, disadvantaged fellows get some help and everyone gets to participate in activities which improve their well-being.

A megachurch, in effect, becomes a microcosm for self-selected citizens to choose a Socialist lifestyle without interfering in politics. In badly-run regimes, religions may be even more well organized than the government, so it's actually more worthwhile to support religion than the state. Case in point, you don't see a lot of megachurches flourish in socialist Europe, especially in Germany where Christians actually pay religious taxes.

b) It's not about the Gospel of Prosperity. It's about coping with failure, inadequacy and mediocrity.

If you accept this point, megachurch go-ers probably do not go to their church to be rich. They go there for fellowship, trading their financial currency for spiritual currency and well-being. Meritocracies are harsh, failures are attributed to the individual. In meritocracies, people need to come together to build socialist bubbles to not lose their sanity.

People convert because they are vulnerable and hurt. The family and state refuses to spend resources to provide any form of consolation. People generally don't intellectualize themselves to pick up a faith, you're either born to it, or suffered so much you turn to them for help.

Besides, it does'nt make sense for money-mad people to give up their salaries just because someone says so. And having written three books with the word Prosperity in it, I have yet to encounter a single worshipper. It can't be just about money.

Now if you agree with me, there may be consequence for all of us here in Singapore.

First, there will always be groups like our megachurches in Singapore while we make our beds with meritocracy, pragmatism and capitalism. CHC is only a hint of more to come. Hundreds more "entrepastors" will be waiting for their turn. Some will preach Christianity, others will appeal to the Buddhists, many will go MLM or Internet Marketing.

Second, this socialist bubble is vital to keep status quo for strong right winged governments.

We can do well if we take three steps :

 - Governance function for an organization must consist only of people of different faiths. This ensures that entity cannot trade spiritual currency with the people who do the governance. It also leverages on our multi-religious society. Churches should be scrutinized by Buddhists, Hindus and Muslims. Temples should be audited by Christians. Mutual respect with prudent governance.

- Forbid religious bodies from taking on donations from anyone below 21. Faith is no child's play. Forbidding donations will cause religious leaders from preying on young impressionable minds.

- Do not allow a church or following to exceed 10,000 in size. This is pragmatic, by keeping organizations small, we will prevent a situation where organizations use political force to swing opinion. WE got luck CHC has only a Cultural Mandate. One day, an organization will grow a Political Mandate instead.

A slave with two masters is a free man.

Some ideas have more power than others.

A statement very similar like the above can be found in the Bible Book of Matthews where worshippers are told that they cannot serve two masters and must choose between Money and God.

Closer to home, I was first exposed to this statement in my first job P&G. It was then, as part of corporate myth that the Father of Management Peter Drucker took one look at P&G's corporate structure and declared that a slave with two masters is a free man.

Drucker was concerned about the rise in popularity of matrix structures, where every resource had a solid line to an administrative manager and a horizontal dotted line to a functional manager or project manager. This allowed the resource to game one reporting manager against another.

Suppose the resource has job A and did not perform up to task, the resource can claim that his time was spent doing job B. This can be a logistical nightmare for managers, for each other manager a resource had to be shared with, some expectations need to be clearly spelled out with each counter-party. Give an organization time and it grows top heavy from the relentless load managers need to account for their resources.

This is the reason why as a manager, I am not a big fan of sharing resources.

Anyway, just last Friday, I had to leave slightly early to pick my daughter up and a colleague joked that I am leaving early because I am now a slave to two masters and therefore a free man. The reference was made because I'm serving my notice and have another job waiting for me.

Well he might be right but this turned out to be quite a teachable moment because I suddenly had an insight about investing and work.

I have a line of income from my job that my family can live on.

I have a line of income from my investments and real estate that my family can live on as well.

My capital gains this year alone, is about the same my annual income from my work.

Investor-employees, therefore are under the payroll of many masters at the same time.

If they choose wisely, they can be free men.

Of course, work is more than a paycheck for me, it's a place to build accomplishments and a great way to be engaged in meaningful activity.

About iron rice bowls and paper plates.

This is a short article. I have a discussion with a friend about careers today and we were talking about the differences between the public sector and private sector.

Now most folks from the private sector have a tendency to scoff at government or quasi-government bodies because of the impression that no work really gets done in these organizations, staff are jiak liao bee because they're protected by the iron rice bowl syndrome.

As someone who spent a decade in the private sector before deciding to look for more work life balance, I have a different perspective.

Public organizations and NGOs do a lot of back-breaking work. Results also take time to show itself  because of the intense amount of paperwork to push a proposal through. It's also important that decisions involving money are above-board and not compromised by a sexy IT sales manager, so a lot of pains have to be taken to provide a paper trail.  The other challenge is that it is a lot a harder to justify something without a simple ROI or IRR model that the private sector works by.

The other reality is that these organizations cannot hire and fire at will because of the political pressure from the electorate, so much work is required to outplace a non-productive worker, it's simply easier to tolerate them and give them work that provides less value add. Overtime, managers end up with a large contingent of such workers who cannot work for any other organization other than the ones they are stuck at.

Which brings me back to managing people in NGOs and government organizations.

While an iron rice-bowl may be the envy of the private sector. Never forget that we do not actually eat rice-bowls. We eat what's actually inside it.

If you have an iron rice bowl but report to a terrible manager, that's the equivalent of someone sprinkling dog food into your next meal. Your bowl will not break, but it's not exactly something that you want to eat for the rest of your career.

While a paper plate may not last many meals, a good careerist can always always walk around with some steak and foie gras on it. It the plate gets ruined, as it always happens because some kind of restructuring is just around the corner, just ensure that you know where to get the next paper plate.

A smart careerist can make do with an iron rice-bowl, ceramic plate or even a paper cup. The important thing is to manage your resume and experience, so that you will always have some caviar, champagne and foie gras to go with each party you attend to.

Singapore dollar - Bane of Online Entrepreneurs.

MAS is taking a policy of strengthening the Singapore dollar to fight inflation. This means that if you run a web business and earn in US dollars, you're very likely to experience a downwards swing in earnings if you convert it back to Singapore dollars.

This reflects one of the many uncertainties of running an online business.

At first, these so called entrepreneurs think that they can earn in USD and spend in SGD, the underestimate the power of Singaporeans who are more than happy to save for their future and strengthen their currency in the future.

 Of course, a smart online entrepreneur can do better if they bring geo-arbitrage to it's ultimate logical conclusion.

 It is definitely possible for a Singaporean with a savings of about $20,000 to settle down comfortably in a place like Thailand and pay minimal rent to see through their online businesses.

 Here's a dream combination if you are single and have weak family ties :

 a) Invest in SGD 

I can't emphasize enough that our low tax regime makes investing in SGD real estate assets an almost sure winner. Some REITs continue to yield over 8% and does not generate any taxes beyond the first 18% deducted at the company level.

b) Spend in MYR/THB

 Find a place to stay where the cost of living is about 40% less than Singapore. Johore Bahru and Phuket comes into mind but you need to blend in with the locals so that you will not be singled out by criminals.

c) Work and earn in Dubai or Aussie dollar. 

 IMHO, the best places to work should be friendly to foreigners and have a lot of natural resources such that the currency has a strong correlation with gold/oil.

So the best combination out there is probably some Malaysian Dude with a Singaporean PR who invests in the Singapore markets, works in an oil company and now stationed in Abi Dhabi and has a family in palatial mansion in Johore Bahru.

My American Pie Reunion Epiphany.

Some people are touched by great movie epics like The Titanic or Chariot's of Fire.

I have a much lower taste. The movie that affected me a lot lately and touched my heart was American Pie Reunion. It attempted to answer one of the key questions I've been asking myself for the past decade.

Looking at my University classmates, I witnessed so much youthful exuberance and promise, I started to wonder years ago what would they be like as working adults. Would they be the hotshots in our generation, or would they fade into the background like the working folks I saw 10 years ago.

American pie is a work of fiction, but is as a mirror of the real world, it worked because it reflected the inner world of generation X that is fast approaching an explosive mid-life crisis of its own.

Here's some insight I picked up from the movie :

a) There is an inherent dissatisfaction with married life after kids.

As a father of a 1 year old, I'm beginning to see that making a choice for a stable family life has it pitfalls. While it gives security, it takes away variety. The key to making it is contentment. The movie is almost a tragedy for Jason's family because the couple was not content with their family life.

b) It does not pay to be a romantic or a Chinese poet.

The most tragic character in the movie is Evan. He parallels the Chinese poets in NUS ten years ago, you know the stable, boring unimaginative types that come from Chinese medium schools who aim to start a family at a young age. Evan is stupid enough to wish that he would be with Vicki when when he was at high school. In the end, he had to let Vicki go.

It was heartbreaking even for someone like me to see a nice guy fail like this.

c) Overextension has its pitfalls.

Ostreicher would have been the fly-boy of my generation because he turned out to be a celebrity. Closest thing to Ostreicher would be someone like Adam Khoo. But unlike Adam Khoo, Ostreicher made an ass out of himself in a reality show and had to be humiliated during his class reunion.

I have the most respect for Ostericher because at least he's somebody. But it's so ironic that he wished for a stable family life when he was in high school.

d) The most interesting guy turned out to be a liar.

The most pathetic character was also my favourite in previous American Pie movies. Finch was someone with a stable job who disrespected his secure and predictable life. After being denied a raise, he stole his boss's bike and made tall tales about his adventures around the world with his closest friends.

These days I see so many of my peers from NUS giving themselves fancy titles like Social Media expert ( like it's possible to even be an expert in social media ) who claims to do some charity work on the fly.

e) The asshole wins !

The funny thing is that Stiffler won the game of life in the movie. He's the only dude with the simple dream of rocking with his friends ten years down the road. Because he was authentic and never had a second thought about being a lovable jerk, he was the only guy rewarded with self-actualization at the end of the movie.

American Pie is a great movie for Generation X. Gags aside, it chronicles how lives can go so wrong from where it begins in campus. The jury is still out on how my life turned out, my unnatural fascination with my financial independence is slowly bearing fruit but it comes at a huge expense of my blood sugar control.

But one things for sure, growing up and having a well-adjusted midlife has a lot to do with understanding your limitations, loving your family and accepting your mediocre status in society today.

It takes a movie like American Pie Reunion to remind us of these things.

HDB resale or car ? Which is the better investment in Q1 2012 ?

Recently an article mentioned a 0.6 percent increase in HDB prices while private properties have fallen. At the surface level, some HDB buyers may be feeling a little smug. They took in smaller losses than the folks who bought a condominium.

If you look at the projected inflation rate in 2012 which is expected to come at 4.5%, a 0.6% increase is way less than the inflation rate in Q1 2012. Comparing HDB prices to equities which have risen over 10% in Q1 2012, it's pretty clear which asset class is likely to be the winner in Q1 2012. In fact, a 1.6 litre second-hand car would have performed better as an investment in Q1 2012. COEs went from $46,889 to $58,501 through Q1 this year.

Here's some considerations for folks who intend to get wealthy by property ownership :

a) Rental yields of residential properties are pathetic.

Rental yields of residential properties straddle around 2-4% in Singapore. You are better off looking for industrial or commercial property if you are looking for yields.

b) This leaves capital gains which does not look good in the medium term.

By cutting down on foreigners, Singapore should look to less demand on resale flats. Making matters worse, HDB is expecting to ramp up the development of BTO flats for second timers in Singapore. Without any personal expertise in property, with shrinking demand and increasing supply, it does not take a genius to figure out that HDB flat prices will generate negative real returns.

( Note that politically I doubt the government will allow prices to decline, but having a n increase below the rate of inflation is one way of easing prices without a political backlash, hence I'm betting Q2-Q4 of 2012 to have similar results. )

Here's a better way of thinking about property:

a) Buy a flat or condo only if you need to stay in one.

Don't make your assets multi-task. Buy insurance for protection, equities for investment gains and a HDB to stay in. The moment you think that you are Warren Buffett's second incarnation if you own a resale flat, you will be expecting a disappointment pretty soon.

b) If you really think that you are some property punter, then get a good location.

Personally, if your unit is within 10 minutes of an MRT, your HDB may outperform the others. There is a psychological reason for this - Commuting ranks as one of the most unpleasant moment's in a person's working day, once people realise this, flats in a good location will become more expensive relative to a larger unit at inaccessible places.

Of course, some locations start out bad but future developments can make things better.

Which is better, higher monthly income or higher bonuses ?

Thought I'd share something with blog readers because I'm pretty surprised some people actually may not be able to to understand this concept and may make serious career mistakes in their lives.

Suppose your income is $120,000 a year. You have a choice between getting it over 12 pay-checks at $10,000 a month or getting getting it over 15 pay-checks of $8,000 with 3 month bonus for average performers.

Intuitively, the former the pay scheme is a superior one. Reasons can be very valid, a monthly income of $10,000 is useful for negotiating salary for subsequent jobs. You also get more money earlier on throughout the year which allows you to farm your money into investments earlier. There is also little pressure to perform at work as salaries are fixed.

Actually, if you offer me a choice of two pay schemes, I'd actually choose the latter.

Here's why:

a) CPF contribution caps are higher with the latter scheme.

One of the funny things about the CPF program is that the employer will contribute CPF up to $5,000 month. This means that you only pay CPF for up to $60,000 a year for your monthly income.

However, the CPF board has an Additional Wage Ceiling of $25,000 which allows an employee to contribute part of their bonuses to the CPF program with the appropriate matching from your employer.

This means that the former pay-scheme, your employer pays CPF up to $60,000 of your income but in the latter payment scheme, your employer has to match up to $84,000 of your income.

Many HR departments in Singapore have saved a lot of money by offering to pay their employees based on a 12 month fixed scheme instead of paying them bonuses. Employees happily accept those terms because it's more cash in hand and the program was touted as being income neutral. In actual fact, the employer is creating huge savings for themselves by contributing less to employee CPF.

b) The problem of higher taxes.

In many cases, when employees get more money, their contribution to CPF drops which means that more income becomes taxable. This actually means more money paid to the government.

To prevent manipulation and gaming of the CPF system, we will be better off simply setting the ceiling to be indifferent to whether the income is normal monthly income or bonus income. Simply limit a year of income matching to $85,000 regardless of the nature of the income for each employee.

This way companies cannot exploit workers by switching to a 12 month payment program and declaring that the switch is income neutral.