Growing your Tree of Prosperity is an introductory investment guide written specifically for Singaporeans who wish to take their first step towards financial independence.
The time is ripe for ERM to take a clear objective stand on China.
One sign that is unmistakeable is that I was having lunch with another Dr. Wealth trainer and he was telling me that old “friends” who have been observing him are coming out from the woodworks to show some “care and concern” about his China positions. This is very familiar to me as it reminded me of March 2020 when I was having my own dark moment with S-REITs.
So in my opinion, this is very much like the Marvel Cinematic Universe, a split will occur in your timeline and a lot of wealth will be either made or lost depending on which stand you will take. ERM is a slightly more advantageous stage as our portfolios are doing ok and can farm some winnings into the beaten counters in China.
So there is no better time for thinking about China in a community event.
I have not decided to take a bullish or bearish stance in my next community event yet, there is still plenty of research to do, but I intend to apply the ERM framework and start enumerating the key issues investors need to think about when they decide to put money in China stocks. If they do invest in the HSCEI, which factors will likely apply to give them the greatest chance of success.
Our next community event will be divided into three parts :
We will begin with short introduction on transplanting the ERM approach to an International market with Australia as a worked example.
We will then try to bring the same approach to China, but with some emphasis on the political situation there.
Finally, we will also reveal ERM’s first referral program where alumni can refer friends and family to attend my courses.
Members of the public may register for the event here, but 40% of the material does assume knowledge on the ERM approach. Like all community events materials will only be available within our closed groups :
I’ve finally found an interesting puzzle for readers to solve.
Mr. Shitcoin is a friend of a friend, and his case study is very interesting and challenges the boundaries of what we mostly know about financial education and the morality of financial knowledge. According to a friend, Mr. Shitcoin was an ex-uniformed services personnel who is so gormless, well after age 55 he actually forgot or was wilfully blind to the idea that that he had money left in his CPF.
So I started having a theoretical discussion with my friend and discovered two unresolvable dilemmas.
( NB: As neither me or my friend is at age 55, we are still not clear administratively what happens when CPF knows that someone reaches that age. Nevertheless, I think it is still fun to think about these two moral issues. )
A) Whether Mr. Shitcoin should buy a high-end sports bike to reward himself.
The first point of friendly disagreement is whether Mr. Shitcoin should buy a high-end competitive bike to reward himself as a mid-life crisis reward. In our discussion, we agreed that Mr. Shitcoin is a nice agreeable fellow who lacks conscientiousness.
My friend, who is more knowledgeable about bikes, argued that this is a mid-life crisis so Mr Shitcoin should not buy a bike. High end bikes might also be faster and present a bigger danger to him.
I argued otherwise.
I reasoned that a bike as a dream reward is nowhere near a European car, a divorce, or, worse, a law degree which cost me $500,000 in opportunity costs. I reasoned that Shitcoin needs to buy a bike to get it out of his system so that he will feel that his life in public service was worthwhile. I explained that I cannot change my own position because my mid-life crisis was way more extravagant and my JD cost me $500,000 and I would replay the process of studying law all over again even if i knew that it would result in no career after that. I just need to get it out of the system much like a trip round the world.
B) Whether Mr. Shitcoin needs to know about pledging home equity to draw more money from his CPF
Before I continue, none of us knows whether CPF would automatically allow the drawing of the maximum amount accounting for the home equity pledge when you reach 55 years of age. So I am unclear as to whether I need to explicitly pledge my property to withdraw an extra $90k from my CPF account. In my case, I hope to put ERS or $270k+into my CPF-RA, so this is not even an issue for me.
My friend reasoned that it is better not to inform Mr. Shitcoin of this option because he can’t handle his money on his own and this knowledge may destroy him as he will proceed to distribute his CPF to needy friends and relatives.
I took the opposing position that it’s our god given right to destroy ourselves with our own money and that this is not a loophole like the CPF Shielding hack. Home earners like Shitcoin earned the right to withdraw what is rightfully theirs so it is morally wrong to keep Mr Shitcoin in the dark.
What do you readers think ? I think my friend has a point as equally valid as mine but we both agreed that he was Neutral Good and I am Lawful Evil in outlook hence the disagreement.
Apologies to folks who thought this were a cryptocurrency post.
It’s
been a great honour and privilege to be able to conduct a 2-Day Early
Retirement Workshop for you.
This
is a period where many investors in Chinese Tech stocks are feeling
edgy with the intervention of the Communist government on the workings of their
most innovative companies. While local income investors have primarily been
shielded from significant losses so far, I’m reminded of what the ERM program
went through in March 2020. This is a reminder to stay humble when you invest
and don’t laugh at folks experiencing a downturn.
The
Ghost Month has also seen most of the ERM portfolios lose a little bit of their
value, making it a good time for the students to engage in some bargain
hunting. I hope you will see this as a golden opportunity to build your first
portfolio if you have not done so yet.
As I
tried to provide more practice for the class this year to review each stock
pick qualitatively, you will find that our portfolio is quite extensive
compared with earlier batches. We have a portfolio of 20 stocks for this run
which will stretch the size of the portfolio I will build for this batch of
students. This batch has also decided to be more adventurous with local tech
counters.
Hopefully,
Singapore’s COVID containment strategy will succeed. We will benefit from more
travel receipts and tourists within the country, which will have a knock-on
effect on some of our investments. This portfolio is also more aggressive given
the more significant number of local tech stocks that were reviewed and approved for portfolio inclusion.
Lastly,
I hope that Batch 22 would participate actively in the FB group. In end-September, we will be conducting a community event where we will consider the ERM approach to investing in Chinese
stocks for yourselves and members of the public to showcase material from the
ERM course.
I'm in the middle of conducting my class, so I don't expect to be blogging, but a very large financial education provider which is almost a household name today was suspected to use my partner's keywords to do their internet marketing. This created a small scramble when I started to consult some of my pals on whether my business partner has a civil case and what steps we need to take to deal with future occurrences.
Balancing a little bit of legal research along with some feedback from my friends in the SME sector, I have to accept that the use of keywords to push up rankings to get views is a common practice, likely because most victims are rational and will not risk more capital to stem the small amount of fianncial damage that is not easy to quantify.
Ultimately it falls to internet marketers to determine how they want the public to view them.
I've worked with great marketers but I also worked with quite a number of scumbags. Sometimes you can't tell them apart because the brand perception comes months after the campaign ends after a lot of goodwill is lost after spamming the public.
Some of the lousier marketers just want to attract eyeballs and they don't really care what happens to the brand going forward. I've seen the way how some truths become bent just to attract a larger crowd.
The differentiating factor between a good marketer and a bad one is class.
Those with class will spend more time understanding the brand and will focus on end-to-end conversion rates. Those without will ring-fence their responsibilities and wash their hands clean once the ad achieves a requisite number of hits, regardless of the final sales outcome.
To me, if this were deliberate action, this large education provider has reached a new low in hiring this kind of marketer.
I think it takes a really low-class marketer to use someone else's brand to hijack eyeballs from another. Although I think we can take the higher road for this incident, I doubt this will be an isolated event.
I'm grateful that my business is not affected by this, because if the victim were my business, I will take legal action once I have just 51% chance of success.
A nice public open court hearing will expose these internet marketing practices to the world at large and we can let Singaporeans decide whether they want to associate themselves with the offending brand.
I was thinking about the panel I had with The Artist Formerly Known as Money Maverick or Luke Ho, and he mentioned an interesting tidbit about how much concern robos have been causing to FAs. I was also able to read an entertaining tirade from an angry financial advisor who wrote a nasty FB message against the Syfe product offering ( If I were Syfe legal counsel, I would act against that clown ).
These two events have caused me to spend the past few days thinking about whether investment trainers can work with robo-advisors closer in the future.
As of now, I'm not convinced that we should do so.
Robo are still quite mum about their algorithms and in a place like Singapore, the biggest strength of using a robo to do tax-loss harvesting cannot be realised in our tax regime. Furthermore, my guess is that robos are running on VC funding right now, and would either have to consolidate or raise fees in the future.
The only reason I like robos is that they make FAs nervous and can potentially wreak havoc with middlemen commissions should they become more mainstream here.
Here are some random points from my thinking aloud:
It is theoretically possible for DIY investment trainers to work with robo-advisors. Not all investors have the time to build a portfolio of their own, and the risk of cannibalization is very small.
DIY investors still make plenty of qualitative decisions that robo-advisors will never be able to replicate. This is important because qualitative differences may drive future alpha generation for either side. Robos will not be able to win over the best retail investors anyway.
DIY investment trainers with any backbone would seek more information on the way the robos function. For me, I need to understand it to the point until I can code the program myself. Otherwise, it would be hard to entertain questions from students on how robos work. I got one data point on a S-REIT based robo and for the life of me, I can't even explain why it underperformed so much compared to a REIT portfolio built by my students, almost all beginners.
It would also be useful to know how much will a robo need to charge existing clientele to break even. Surviving on VC burn rate is not sustainable.
My ideal scenario is multiple robos will need to provide algorithmic transparency so that a trainer can explain the differences between each product offering and can show students how to pick a robo without conflict of interest.
The unpleasant alternative is for one robo to sponsor the cost of running a training program, but I won't do it even if they paid me and I won't recommend anyone attend a course like this. You pay me with more transparency and not cash.
As it stands, anything that makes financial advisors nervous is a good opportunity for the training industry because we know that there is still quite a lot of fat to trim and middle-class Singaporeans cannot continue to always sponsor a caste of commissioned salesmen and pay for their Audis when they also have to sponsor expensive tuition agencies as well.
If robo-advisors band together to build an association to standardise the rules on transparency, I am open-minded to an alliance if it means more Singaporeans are educated on personal finance.
Because even America has to get out of Afghanistan after 20 years.
While China is busy contending with the "Lying Flat" movement, where young people are rebelling against their work culture, the US is also facing a different work phenomenon. Apparently, the number of folks resigning from their jobs reached the peak in April 2021 and managers are struggling to keep their employees.
I've only read a few articles on this phenomenon and I can't wait to see what social scientists can say about this.
Here are some of the reasons that can possibly be a driver for The Great Resignation :
a) Folks stuck to their jobs during the pandemic now think that it is time to resign
One explanation is that a lot of folks were stuck with jobs they don't necessarily like during the pandemic but they could not resign then because it's hard to find a new job then. When the vaccines started getting deployed, the economy opened up and it's time to move onto something new.
The workers who are affected the most by a more negative workplace are workers in the hospitality, F&B and leisure sectors.
b) Folks can see a life beyond the standard daily commute to the office
Another explanation is that the pandemic forced a lot of companies to make it easier to work from home and employees have gotten used to this arrangement. As the economy reopens, middle managers are pushing to get their employees back to the workplace, so employees are looking for a new company that is willing to make work from home the norm.
This explains the number of professionals who are quitting the workplace.
c) Generous welfare cheques reduces the motivation to carry on working.
The third reason is that during the pandemic Biden was generous with welfare cheques to help Americans get through their lives. Some Americans may have been able to squeeze the welfare cheques for a much longer time than others so may be able to go without work for a longer period of time.
I like this explanation because it explains why Singapore is not experiencing our version of the Great Resignation here yet.
The long term repercussions of any recessions are always very interesting.
In the last Great Recession, labour economists found that some single men got so discouraged, they basically left the workforce and never returned to having a regular income. Surveys on personal happiness were kept up because of video games, social media and streaming. This led to the birth of the Incel subculture. During this pandemic, the labour participation of women was hit much harder than men, and it would be interesting to see what happens over the next few years.
One day idea shared with me in the Lothlorien chat group is the idea that Singaporeans are like Kryptonians who are constantly under the Red Sun.
This idea originally came from Superman comics. It is known that the Green Kryptonite can kill Superman, but Red Kryptonite can render him powerless and ordinary. Before Krypton was destroyed, the entire planet existed under the Red Sun, so Kryptonians are just ordinary people on their home planet. When Krypton was about to be destroyed, Superman's scientist parents sent him to Earth where he came under the influence of the Earth's Yellow Sun which gave him godlike powers.
There are two useful applications of this theory :
a) Mediocre Singaporeans will do much better academically in a Western country like Australia
The original idea was a comment about just how brutal our education system is. Even when I was cramming for a 3-year Law School programme, I realised that somehow, my daughter has to study almost as much as I do. And it's always CL2. My daughter even had to maintain a diary with drawings during the last holidays. The questions posed in primary is already quite difficult and this has caused a buildup of a very profitable tuition sector for ex-teachers.
As a child of the 80s, I can attest to how my fellow Singaporeans had such a good time when studying in Australia. An Australian does not have the same pressures as a Singaporean, if they are not academically inclined, they can do very well as a miner. Even their minimum wages were one of the highest in the world. Singaporeans who come back from Australian universities always developed a more exuberant personality while abroad, whereas those who stayed put always lose a bit of their individuality back home. Some even go batshit insane studying in a pressure cooker like NUS.
This is why I doubt that Singaporeans will choose to Lie Flat and pull out of society. Why not emigrate to Australia where you, too, can become an academic Kal-El?
Interestingly, no parent has considered the geo-arbitrage possibility where they save up the fees that should have gone into a tuition centre into an Australian degree.
I leave someone else to do the maths.
b) Singaporeans who save and invest aggressively here can look to a better lifestyle somewhere else
This Singapore Red Sun idea can also be applied to personal finances. Because of frugal roots, we find that Singaporeans save 20% off their take-home pay in our CPF. Beyond that, savings into REITs and blue-chips do not attract capital gains and dividends taxes. This means that most Singaporeans with about 10 years of working experience in Singapore would have accumulated more assets beyond most Westerners in the same income band.
If a Singaporean emigrates to another country, he can pull out all his savings and should comfortably be able to buy up landed property and a car in another country. As savings were accumulated tax-free, it is theoretically possible to pull put an investment in a foreign country and begin to supplement your income with dividends from day one, and this time your CPF money would be fully under your control.
The only weakness is that you'll be paying more punishing taxes in your new home.
If any Singaporean wishes to move to a Westernised country, based on the work my students have done, they need to supplement their lifestyle with some work, but it can be very chill and relaxed compared to Singapore. But if the Singaporean moves to another country in Asia, retirement is definitely possible on $500,000 SGD.
I think as we celebrate National Day this week, we should appreciate the fact that we've grown to be disciplined people that can turn our personal struggles to be something meaningful. If anything, networks of ex-Singaporeans have sprouted up in many overseas countries allowing us to have a taste of what it's like to live and play away from the Kryptonian Red Sun.
I will stay because my investment income has already broken free from the gravity on Planet Singapore.
One area I'm focused on is to make my program more diverse and gender-inclusive. But I can see how hard it is given that my program does not stint on numbers and it focuses on making hardcore financial decisions. Currently three-quarters of my student population is male and there is more room to expand by making the program more appealing to women.
To overcome this hurdle, I've been doing more pro-bono work focused on feminine finance to see how I can do better.
There are two very interesting projects coming up :
a) Podcast on Gendered Finance with MissFITFI
The recording for this segment is complete and MissFITFI's powerful army will spend the next few weeks heavily editing the material. I've been pushing for the idea of a serious discussion of women's issues in Finance but I can't seem to find a good platform to discuss this intelligently because of the "sausage problem" in the financial blogosphere. Most financial bloggers are guys.
Naturally, I wanted a more controversial discussion so I asked MissFITFI whether she wants to talk about whether specific forums for women on the topic of investing make any sense. In this case, I volunteered to take the more untenable position, so I tried to argue that financial forums specifically for women are not necessary and that forums that invite both men and women are good enough to assist women even for issues very specific to them.
Regardless of whether I successfully defended that idea, I think all of us doing the podcast had a lot of fun.
When the podcast comes out I will point you guys to it.
Should be fun.
b) Presentation to a women's network for P&G
I'm taking this project super seriously because it's an alumni homecoming for me. I will be speaking for 45 minutes next week on the mechanics of Early Retirement.
I might be tooting my horn for my first company, but I dare to say that if there is a talented Type-A female graduate, P&G will go all out to recruit them into the organization. As expected P&G did not beat around the bush and they were very direct and even gave me examples of presentations that did not meet their standards in the past.
An amazingly some of the stuff that's revealed to me is pertinent to the podcast I have just done. I was telling MissFITFI that money forum's that exclusively cater to women would go overboard with emotional stories and narratives. These stories take up so much bandwidth, there's very little room for actionable items. Worse, to make meaningful financial decisions, a numerical discussion is often unavoidable.
As it turns out, if you are a commissioned salesperson and you choose to adopt more style at the expense of substance, some really smart women will bite you pretty hard and they won't let go.
For my P&G talk, I made no attempts to retrofit my material specifically for women. I did the opposite and pitched it much higher level - at the MBA level if possible. From my experience, P&G women are not expecting to be saved - I am at best a Steve Trevor like personality in this story.
So this is what I think I missed out on talking about in the MissFITFI podcast. A veritable truth in marketing is that packaging something for women can be very profitable. Some self-improvement guides can double the volumes sold simply by colouring the book pink and marketing it from a woman's angle.
But if you take it too far, I think some people (especially female FAs) can be seen as insulting a woman's intelligence. A friend, after hearing my story, even remarked whether the financial talks need to pass a Bechdel Test.
Anyway, if I wanted to hijack a woman's emotions, it's not too hard. I helped out in divorce cases before, I can speak with authority about the ways some nasty men can hide their assets and make life difficult for ex-wives. Getting women to focus on their personal finances by displaying some of the worst traits of men is not taking the high road.
I prefer to use facts - Women live longer than men, they probably pay more for annuities, so financial security and retirement is not a soft fuzzy matter to them.
In fact, it can be way harsher given the salary gap they have in the workplace.
Ok, something more interesting to share on National Day week.
Maybe I’m slowly becoming a cranky uncle, but I’m beginning to miss the old days where Lee Kuan Yew would meet you at the cul-de-sac to resolve any political differences with him.
One of the reasons is that I live in Woodlands and for more than a year, Marsiling Mall hawker centre had that policy of charging an extra $0.50 to use a tray and then, to get back your money, you needed to return the trays to the conveyer belt. Execution was expensive and muddled, I had grassroots folks or “ambassadors” basically staring at me while I ate my food. I even scolded them for trying to take picture of me. The truth is that these ambassadors are facing a rebellious lot in the North. I’ve seen some old Chinese uncles would buy the food from the stalls, make a mess on the table and then return just the tray to get their money back, they’ll do anything to stick it to the government.
It was then that I realise that Jackie Chan was right, Chinese people need to be governed. When the government started to impose fines for not returning trays, hawker centres became a lot more pleasant to hang out in.
I don’t know what is wrong with policy makers, maybe they are infected by the Left as in many Western countries. A lot of money can be saved if we moved towards a fine immediately. By shuffling their feet and focusing on consensus and experimentation, the government makes itself seem weak and effete.
As of now, we’re not dealing with recalcitrant tray non-returners anymore, there is a tribe of anti-vaxxer’s trying to frustrate our efforts to vaccinate a large part of our population so that businesses can resume. This movement is gaining traction and I can see some really unscrupulous individuals trying to monetise and sell products to these group of people. Over the past few days, friends who infiltrate these anti-vax groups have started sharing with me stuff that’s off the charts, from some religious fundamentalist claiming that a vaccine marking is the Mark of Beast to some new age spiritualist who think that spiritual purity will protect them from the virus.
I think by now, we should know that the gloves are off. Our vaccination numbers are large enough for us to provide a firm differentiation between those who are vaxxed and those who are not.
But that is only the beginning.
Both PAP and WP support the vaccination efforts. I fail to see what political capital can be sacrificed if we pass some laws to deal anti-vaxxers. If we don’t do anything about these folks, they may evolve into a kind of 5th Column in Singapore. The government will have it’s hands full with the Leftists and Anti-Vaxxers in time to come.
Human nature is like this.
A percentage of the Singapore population is too disagreeable and non-conscientious to support policies that benefit everyone. If anything, they just want to watch the world burn. Social media enables them to form groups and even find corporate sponsors at the same time.
I hope before out National Day celebrations, the government can take firm action against anti-vaxxers in Singapore.
If we can’t take them all down, taking down their leaders should set some kind of example for the rest of the country.
Something short for this weekend, with the Lying Flat movement gaining traction and possibly fuelling the FIRE movement, it is time to review three philosophers that can be said to be basis of both movements.
a) Diogenes
Diogenes was part of the Cynic movement and can be said to be somewhat like an Ancient Troll. He was banished for the debasement of the currency and exiled from his city.
Reviewing his life, it is no wonder that he animates the Lying flat movement. He lived in a clay wine jar that belonged to the temple and was said to throw his only clay bowl away when he saw a peasant drink by cupping his own hands. What is not mentioned by proponents of the Lying Flat movement was that Diogenes also masturbated in public and defecated in the public theatre.
His philosophy is quite regressive if viewed from a modern lens, the central tenet that artificial societal growth is antithetical to personal happiness.
I can imagine the Chinese Communist Party is very defensive if modern-day Diogenes arose in Chinese society.
b) Heraclitus
It is not clear how Heraclitus the “Obscure” can inspire the Lying Flat movement. He is a metaphysician who proposes the idea of the unity of opposites. The opposite of justice is strife, and consequently, we can only know justice from understanding what strife is. His other idea is that we’re constantly changing.
I suspect the movement just wanted to say that Lying Flat allows people to think about life the same way Heraclitus does. Still, I can imagine this might take some effort in ancient times as empiricism is not even invented yet.
Heraclitus may be more beneficial for the FIRE movement as he was a precursor to the Stoics.
c) Thales
Thales of Miletus is not part of the Lying Flat movement but, combined with Diogenes and Heraclitus, and they form an exciting triad for further research.
Thales is more of a mathematician who pioneered the idea that everything was water. His contribution to geometry was quite extensive, but it is what he did with this life that makes him an icon of the FIRE movement.
Thales was the first person who understood how to setup a monopoly. He was able to predict that olives would have a good harvest at a particular year and cornered the supply of olive presses. The resulting boost in demand for the presses made him a rich man.
Hopefully I’ll have something better on National Day.
The Greek Philosopher Plato once imagined a utopia that divided men into three castes.
Men of Gold are philosopher-kings and have an affinity for Reason.
Men of Silver support the men of gold and are their auxiliaries, they function as soldiers and stewards for the rulers of society and have an affinity for Courage.
Men of Bronze are the core producers and consumers of society so they have an affinity for their Appetites.
In Singapore, everyone wants to be men of gold. Why else study so hard to get a scholarship so that they can become a mandarin?
I think that if we design a lifestyle independently of what people say, we should cultivate a Bronze medal mindset. Psychologists are now saying after studying Olympic medallists that, while gold medallists are happy after becoming number 1, silver medallists seem more miserable than bronze medallists. The logic is that a silver medallist will spend the rest of his life knowing that he's this close to getting gold, whereas the bronze medallist is grateful that he was able to get a medal at all.
As I begin to weaponise my financial independence to build greater lines of earned income, I soon find myself in a much more exclusive environment where I am starting to see myself as somewhat barely qualifying for a bronze medal. More often these days, I realise that I'm often the lowest income guy in the room if not the dumbest. This is nothing to complain about because the products I build and the value I bring is starting to gain traction in different circles and some inadequacy is quite normal. For a guy from a government school and a JC that can't produce anything except civil servants, I should feel good for myself.
As low as I am on the totem pole, I don't envy silver medallists.
In a popular university Facebook discussion group, a popular Computer Science professor gave an honest review of his life and why sometimes his family hopes he can be richer. From what I hear, this professor already lives on landed property. In another separate thread, I see a successful VC challenging him asking him why folks from his secondary school tend to become administrators and not successful billionaire businessmen.
It was then that I realise that having a silver medal is no fun in Singapore - Gold medallists are constantly mocking you, asking you why you are not in their ranks.
I think if Plato looked at Singapore, he would first be flattered at how much we tried to replicate his Republic, but living here for a few years, I think Plato will probably drink hemlock.
We might have gone too far.
In Singapore, it's not just men of Gold, Silver and Bronze.
The men of Gold will have to look to the Men of Platinum. "Even the guy who makes furniture for a living can buy GCBs, what about you, dear professor?"
Aim for Bronze. Bronze is nowhere near rock bottom.
Below Bronze is Iron.
Below Iron is Lead.
Below Lead are the BBFA Incels who brag about Technology and Cryptocurrency trades on Seedly but now recently extinct because counters are correcting right now.
Thus, in the Grander scheme of things, we can pick up a thing or two from Simone Biles.
I don't have a lot to write about this weekend as I will be reserving my strength for the Dr. Wealth Blog.
What's trending now is are the merciless attacks from keyboard warriors on Joseph Schooling for losing the chance to defend his Butterfly Gold in the Tokyo Olympics and the many folks who jumped to his defence. A couple of famous folks have even commented that "victory has a thousand fathers, but defeat is an orphan".
I'm not here to motivate Joseph Schooling to keep trying for us, that's really up to him. It's not like our government gave him a lot of support before he won gold for the country. Sports is not something we'd like to emphasize as a society as compared to, say, private banking.
Instead, my belief that is that Singapore, in general, does not deserve a sports champion like him. Singapore is too caught up with navel-gazing and envy to sincerely celebrate Joseph Schooling as a fellow countryman. The financial blogosphere is familiar with this kind of saltiness - how many bloggers who accumulated $100,000 before 30 ever escaped getting slammed on social media?
The fact is I'm also a keyboard warrior and I can't tell Joseph Schooling what to do. But I do know that most Singaporeans are hyenas who values strength and success through the Almighty dollar.
As such, allow me a moment of hubris to say what I would do if I were in Joseph Schooling's shoes.
a) I will complete my NS
This is a good time to complete my NS.
As the only Gold medallist in Singapore, I'm not likely to be tekaned in camp. I will likely obtain "white horse" status and can even train in sports during this time. I would focus on smaller events like winning a few medals in the SEA games.
b) I will complete my degree if I have yet to get one. If I have a degree, I will go for an MBA
I suspect that top MBA programs will make way for an Olympic Gold medallist without a high GMAT score.
Youth and energy will fade in time but what remains are your paper qualifications that Singaporeans are obsessed with. As Singapore's only champion, you are highly likely to be able to get assistance on any local campus. The aim is not knowledge but social capital, which will be easy given your superstar status.
Hobnob with the rich, party with them, and occasionally guide their kids in the swimming pools.
c) I will find a way to get into private banking
If I'm not wrong, DBS has some kind of arrangement with Joseph Schooling such that he will have a great post-sports career. Star power translates very well into front office work, and clients may want direct access to a local champion. Starting salaries will be many times the level of even a top-flight business graduate in Singapore.
Maybe I can execute the James Lye manoeuvre, where I am VR Man one day and a jet setting banker dealing with UHNWI from all over the world a short moment later.
Why be a journalist like Clark Kent? This is why VR Man is way better than Superman.
I think if Schooling were to play his cards right, he'll be a middle-aged banker who will become a regular face on the Singapore Tatler. He will probably marry extremely well and, being Eurasian, will be a great pick for politics under the PAP banner. It is very likely Singapore will not see another Olympic gold for another 30-40 years (the last guy was Tan Howe Liang).
But to play the game right, he needs a decent NS record and a good paper qualification.
As for the bastards who mock him for drinking too much Milo, they will still be bitching on Reddit or EDMW.
The past few days have been quite shocking for political observers who saw some massive moves to mess up education providers and tuition centres in China. The fallout has been very unpleasant for folks who have been harping about Chinese Tech firms for the past year. Starting from today, those voices will soon be silent. Like the US Tech and Cryptocurrency flex bros, everyone will be going back to lick their wounds.
I have to admit, I'm really enjoying all this.
While I lost a bit of money here and there, but with over 98% in local stocks and being told repeatedly that Singapore markets sucks, I'm just trying to enjoy this short moment of triumph, but I can't go too far because I was "in the barrel" on March 2020.
How do we analyse China's move? The willingness to throw their most entrepreneurial and innovative citizens under the bus should be shocking even for the best political analysts.
There are some signals in hindsight. Lowering birth rates and an ageing population is clearly measurable. I also suspect that the pandemic is creating more inequality and penalises a lot of rural Chinese. The third is a cultural revolution that the CCP is ill-equipped to handle, young Chinese "lying down" in the midst of an involution.
So cock-blocking tuition centres is a very good move. Parents will always be competitive and want the best for their kids, but if tuition can only take place at specific times of the week, kids can develop their own interests and personalities. Also, middle-class parents do not have to fight a reluctant arms race against upper-crust families.
I think if Singapore is not careful, we'll have our own brand of involution and instead of "lying flat", many Singaporeans will become Australians.
Some measures may make sense :
a) Tuition can be reined in without affecting a tutor's livelihood
I delved into household expenditure surveys of 2018 and found that we spend about 5% of our total expenses on education services, which is not so bad so there is no need for a blanket policy to block kids from having tuition.
But why should we accept 5%? One possibility would be to block Sundays for tuition centres to cover core subjects and progressively tighten.
b) Tighten FA licensing requirements
If we are on the topic of current costs for the middle class, might as well analyse my favourite bunch of so-called "professionals". Unfortunately, personal care services and insurance is bundled in the same category but it covers almost 3 times that of education services, so I doubt any heavy firepower will be levelled against FAs over the short term.
But does it make any sense to label what is effectively a sales effort advisory work?
Does it make sense to award titles like MDRT to advisors based on sale volume and not from effective advice?
I don't think we can evolve into a fee-based regime yet, but not insisting on a degree ( in fact a local degree ) to get a license to advise on something so important as money and personal finance is a policy failure on the Government's part!
This may be a precursor to a fee-based regime in the future.
c) HDB to function as an exchange to buy and sell the property.
If you analyse the expenditure of a median household member in Singapore, even I have to admit that the big bad is not the FA but folks in the real estate business. Imputed rental of owner-occupied units is 50% more than the Miscellaneous good category where insurance resides.
This means that aggressively interfering with real estate markets can move the needle substantially for middle-income Singaporeans and make life better.
Maybe the government can draw the line that BTOs beyond a particular year has to be bought and sold through HDB via fixed prices. This allows Singaporeans access to cheap housing and prevents excess profits to be earned. Real estate speculation will still be possible for the few elites who can afford private housing.
The upside is that it's easier to raise families, the downside is that locals can no longer sit on a treasure chest and grow rich purely based on luck. ( We can grow rich on investments rather than property )
If this kills off a few real estate agents so I get less junk mail, all the better.
At the end of the day, I'm just a keyboard warrior running this blog, there are smarter guys looking out for this country.
Fact is, if a policy intervention tackles tuition, financial planning woes, and real estate simultaneously, the upside is huge for the pockets of the median Singaporean.
It is also psychologically healthier, parents do not get subject to all that fear regarding their children's future, folks don't get harassed so often walking in malls by FAs handing out LED balloons to their kids, and we will get less junk mail from those pesky real estate agents.
Come to think of it, I can base an entire political manifesto around these three issues.
If you think about it, the MVP this month are the cheekopeks who visited Vietnamese hostesses and brought the entire country down. Things got so bad even the National Day Parade got postponed.
For weeks, the media attacks against cheekopeks and ah bengs who visited prostitutes escalated so badly, I'm not sure whether it's become cool for Singaporeans to punch down against their less-educated peers. The only exception is that since heterosexual Chinese men are being attacked, liberals sit this one out, and let everyone bash these poor guys.
If there is really one song that captures the feeling of a cheekopek who visit KTV lounges, it is this classic called Jipaban. The song speculates on what like is like as a millionaire.
As you can find anything on the Internet, a full translation of the song lyrics can be found here.
Like many Hokkien songs, the song had pathos. The singer laments about not amounting to much in life, missing out on travel opportunities, and seeing peers start successful businesses, marrying and settling down.
Let's analyse some of the lyrics to see whether they make financial sense:
a) Travel
One of the things the lyrics say is that if the signer has a million bucks he will travel. He will go to Hawaii, eat sushi in Japan or have a spaghetti meal in Italy. This is not too expensive for a single guy, a trip to Japan may cost about $3,000 pre-covid and Hawaii/Italy may cost slightly more.
With $1,000,000 generating $40,000 as safe rate of withdrawal, $1,000,000 can pay for all that travel.
Of course, somehow this guy must be able to generate this 4%.
b) Buy a car
After travel, things escalate very quickly, the singer wants to buy a car which means paying for a COE. All expenses for a car should range from $1,500 to $2,000 for the next ten years. The worst thing is that the car is a depreciating asset.
Our cheekopek millionaire should start thinking about driving Grab to offset the costs of having a car, otherwise it will ruin half the investment income arising from the million dollars of invested assets.
Still I think owning a car is not fatal.
c) Buy a house
Beyond getting a car, it gets much worse, the singer wants to buy a house.
As most Singaporeans can afford HDB property, I can only speculate that the singer intends to upgrade to a private condominium. Even in the best case, the current HDB has to be sold to generate the downpayment.
Moving forward, loan repayments can range from $2,500 to $3,500 even for a modest unit which may be unsustainable even with a million dollars . Our cheekopek friend may intend this to be a short project, selling it to earn a profit after MOP period is over and maybe earning some money in the process.
It's not a bad idea, but I still think just upgrading to a 5 room or a jumbo should suffice.
d) Buy a shop to collect rent
It's heartwarming to find at least one piece of good advice in the song.
Buying a shop to collect rent is wise but hard. I did a quick check on Property Guru to see whether there are units for sale at Beauty World and many will bust the $1,000,000 budget but loans should cover up to 80% of the value of the property. There is at least one shop in Katong Shopping centre for less than $1,000,000, so this may suit the singer's budget. This will still will likely be cash-flow negative as the mortgage is over $3,000 per month.
I still think that REITs are less complicated and a safer choice.
e) Get a wife
I leave this last bit for readers to think whether our cheekopek would be able to find a wife even with a million dollars. I'm personally not optimistic given what I know about Singapore women ( In fact, I married Malaysian ). The cruel reality is that $1,000,000 represents financial capital and not social or cultural capital.
He can, of course, go to Vietnamese bride agency. Not sure whether they are in operation today.
Sadly for everyone, a song like Jipaban has not aged well. It was written in 2001 and inflation has ravaged the value of having a million dollars. Thanks to globalisation, inequality has gotten even worse as $1 million may not be able to bridge the lack of social and cultural capital in Singapore. Finally, there are too many forces conspiring to make our friend part with his money through commissions and sexual favours that will allow him to maintain his millionaire status for very long.
Maybe the singer can update the song into "Ngerng Pa Ban" or Two Million dollars. This should provide a higher quality of life for Cheekopek.
For me, I think a simple life of travel, funded by REIT dividend payouts is good enough.
Sometimes, I get the privilege of being invited by younger bloggers, entrepreneurs or influencers for breakfast. Being exposed to their ideas update me on what's really going on because as I get older, I stop doing stuff younger and single people do. Becoming an investment trainer also limits me to a more conscientious and ambitious crowd, so there is always run the risk of losing touch with the ground.
My recent conversation is with an up and coming "media mogul". Our political leanings are almost diametrically opposite. He seems to think that government should take more responsibility for things while I prefer to blame fellow citizens for society's ills. Nevertheless, it was a really fun conversation that was very informative for me.
The most interesting segment was our discussion on meritocracy and I was curious what young people feel about meritocracy today.
My friend's experiences were interesting. He obviously has many elite friends and he shared with me that in the top secondary schools, discussion and conversation is no longer about capabilities and grades. In the top branded schools like RI, ACS and even Hwa Chong, students often spoke of their lineages. What kind of families do they come from. Which exclusive housing estates do they live in.
I felt that this was very different from my experiences growing up because, in the 1980s, only ACS was like this.
We both come from the more Vanilla-flavoured JCs in Singapore. I came from NJC and my friend came from TJC.
What my friend shared with me is that the only folks who still believed in a meritocracy came from the second tiered JCs like NJC, TJC and VJC. These institutions are the only ones where folks believed in hard work ( we acknowledge that we have no choice because we're not as smart as the RJC and HCJC students and we don't have the unlimited expenses accounts of ACJC students, working hard is the only thing we can do to shift the odds in our favour. )
This is, sadly, reflected in our career choices. When I was in the private sector, folks from my JC were not so easily found. JC alumni were rare in IT during the days where CECA got freshly signed. With competition coming, IT was not a smart move if an engineer wants to enter the middle class.
However, when I took the plunge into a disastrous foray into the public sector all my seniors from NJC were waiting there to manage me.
My boss even had the same Computer Science tutor as me in JC. ( Computer Science majors in JC were super rare )
Was it inspiring to work for an organisation managed by my own kind?
Actually, it was horrible.
In the private sector ( Specifically P&G ), I can at least say that for once in my life, I aspired to become something like my boss. Good pay, upper-middle-class condo living with a loving family.
My public sector management was shit.
Rumour was that someone I had a reporting relationship with was a divorcee who so traumatised his wife, she became a nun.
A bag of dead otters, freshly beaten to death with a stick, had more personality than him.
I think I'm a fairly good public speaker who created a course that generated over $1,000,000 in revenues, so I should know a thing or two about Powerpoint presentations. My boss made me memorise a 15 minute presentation and micro-managed the process to his exact wording. That's where my taxpayers were going.
It's not a joke that the public sector is full of divorced, mid-career loser beta-males and single women who are waiting for your company until the dread of night. It helps to visit Glassdoor before making a decision whether you really want an iron rice bowl.
This is not a discussion on whether a meritocracy works, I'm a semi-strong believer in meritocracy provided it's powered by low taxes and some amount of personal risk-taking.
But my conversation with my friends has reminded me of the cult of brainwashed MBTI ISTJ compliance types that run our monolithic public services who are fanatics of the meritocratic system.
Philip Yeo would go on to label these types of executives eunichs.
The real tragedy is realising we took the same training and we are cut from the same cloth.
We're seeing a lot of bloggers talk about "Lying Flat" movement which goes to show how much traction this idea has. This is going to be a discussion on how to actually execute it in Singapore.
The basic idea behind the movement is to just give the middle finger to your dreams and ambitions and give up, not so much to preserve your mental health but as a protest against society. There is a certain hint of privilege behind this movement as folks who can live with their parents have a huge leg up as they do not need to pay any rent, nevertheless, some government data can assist us in designing this lifestyle.
a) Model the expenses of a retiree
The first step we need to do would be to model the expenses of a retiree. Fortunately, I've already done this research that resulted in a Dr. Wealth article I wrote on what happens to retiree's expenses when they get older. (Link is here)
If you spend like an ordinary person in a HDB household ( not counting rent ), you will need $1,627 a month which is not really conducive to lying down. A more reasonable expenses target would be $1,154 which is a median retiree's expenses per head. I suspect to meet these, you have to forego bulk of your entertainment and really go BBFA, focus all your effort playing computer games and stream movies.
So let's impute $1,154 as monthly expenses.
b) Model the earnings of a food delivery driver
The second step is to figure out how you can earn $1,154 per month. I've decided that the lifestyle should not invest because we'd just end up with another bland flavour of FIRE. Whoever lies flat would still have to work for it, albeit the work would be really minimal.
So the work that gives the worker the most control is the gig economy and fortunately, Seedly has a great article on delivery riders here. If you read the article, a reasonable salary would be $600 a week, but it is 40 hours of back-breaking work. Furthermore, you would still have to contribute to Medisave, which can take out 4-8% of your earnings. Take out 5% in our example and your take-home is about $570 a week.
c) Now lie flat like you owe nothing to society
So with a top-line and bottom-line established, we know that two weeks of food delivery work at 80 hours will subsidise a month of expenses at $1,154, so the default position is that to lie down sustainably, you will be working about 50% of the time compared to average Singaporeans - a 20 hour workweek.
This is not exactly something I'd like because I work way less than that in real life thanks to FIRE.
But there are obviously ways to improve that ratio.
One is to lie down so much that you spend less than a median retiree in Singapore. If you can miraculously live on $600 a month (possibly by dumpster diving), then you would only be working 25% of the time. If you can find a short and interesting gig at rates higher than $15/hour (like becoming a sugar baby) then you can relax even harder.
Therefore, a sugar baby who does food delivery and dumpster dives occasionally might be the iconic symbol of the "Lying Flat" movement in Singapore.
If such a person does not exist, maybe we should invent someone like that.
First of all, I'd like to thank everyone for their well-wishes. My mum is doing well.
But it has still been a tough week and I really needed to unwind which means do stuff that is less consequential but to relax and improve my quality of life.
One of the things I miss the most is travel. I don't do expensive travel. Most of the time I just go to KL to do some shopping and lots of eating. I recently heard that my favourite Sang Har Mee place at Lorong Imbi has shut down ( or moved ). I feel sad that some of my favourite haunts may not even be around when Singaporeans can visit Malaysia again.
So right now I am stuck in Singapore. The closest thing I can do to travel is to read Koh Buck Song's Around the World in 68 Days. I like it because it covers countries that I will probably not get to within my lifetime like Oman and Madagascar. More interestingly, it's not just a real travel guide but also a book on how countries can rebrand themselves. So it looks like my reads are still consequential after all.
Of course, reading about a location cannot possibly replicate the real travel experience, so I try to supplement what I read with youtube videos.
This is one of my favourite videos on Oman because there are plenty of references to street food. My wife and kids are huge fans of food vlogger Sunny.
Youtube has plenty of videos that can be helpful to folks who need some travel therapy. One of my favourites has always been the Middle East because I doubt I will ever find a travel buddy to go there. Even if I do, I'm terrified of diarrhoea. A friend who has been to Egypt tells me that he had diarrhoea for almost his entire trip.
Visiting a souk on Youtube is soothing and does not affect the quality of your bowel movements. If you actually want the diarrhoea experience, you can always eat McCrispy meal which checking out this wonderful walking tour.
I don't have grand travel plans once Singapore becomes fully vaccinated. My first priority is to visit relatives in the North and do something to support the Malaysian economy.
A student wants to visit to see if he should buy a GCB there. I just want to kaypoh a bit and eat the zhi char there.
There was an urban rumour that once upon a time, a union leader with NTUC had health problems and went for a heart scan. He discovered blockages in his veins and promptly resolved them with an angiogram followed by an angioplasty where a stent was installed to resolve the blockage. After the operation was over, the union leader hectored all his union drinking buddies to take the scan. After all, they had the same unhealthy habits. The other leaders went, albeit reluctantly as the scan was expensive. But quite a few union leaders also discovered they had blockages and promptly had operations to save their lives. Many lives were saved by this union leader, I did not share his name as the person who related the story to me was also not clear who he was.
When my mum had high blood pressure for an umpteenth time, I also decided to take her medical matters into my own hands. The sad truth is that I don't really trust GPs because they often had 5 minutes to determine what was your problem. So I switched over to a cardiologist in the private sector to take control of managing my mum's hypertension. The cardiologist improved her average BP reading from 200 to <120 with the new drug. Not satisfied, I wanted to break the family curse so I insisted my mum take the Heart CT Scan as well and blew thousands of dollars of family funds on it. Unfortunately or fortunately for us, the scan detected a major blockage so my mum had to complete an angiogram and angioplasty yesterday.
Today she is resting at home after a successful operation.
On hindsight, I really have no idea what her GP was doing. She always had BP medicine but she had a special drug to eat when her BP spikes. The GP's approach was a quick fix without delving into the root cause of the issue. It was only pulling strings and asking one of my students for help (he works in healthcare) was I able to be introduced to a good cardiologist who could make the problem disappear.
Anyway, this is just one data point but I'd like to raise two lessons I learnt for readers.
The first lesson was that "advisor equity" matters.
I can walk into the sunset and FIRE, but teaching my program allows me to network with my students, many with useful information and contacts that can enhance other areas in my life. On top of my work as a trainer, I have doctor friends who regularly ask me for stock information over Whatsapp who can easily spare a second or two with medical opinions on pricing information I share with them. Even though I do not practice law, I do act as the first point of contact for friends in trouble and can introduce someone currently in practice. In fact, I play rainmaker to my lawyer buddies.
If you think you can "Tang Ping" or lie down after you FIRE, then you are losing a major resource. Most successful FIRErs know a bit about markets that can make them very useful to others.
The second lesson was that a sufficiently large investment hoard can function as a health and surgical plan.
I could not get H&S insurance for my mum even if I wanted to because she had hypertension her whole life. Going through an angioplasty in a private hospital is going to be extremely pricey even if you took the cheapest suite like us at Gleneagles. Predictably, my mum had a rude shock when she heard about the price.
When I heard the price tag, I calmly told my mum about the lifetime of savings she and my late dad made when they DID NOT PAY H&S insurance. This was a proactive surgery made while my mum was healthy, we can reduce the risk of complications. More importantly, the savings over my father's lifetime allowed the full sum to be replenished with only 3 months of dividend payouts!
So we are trading three months of dividends for an unknown but significant extension of my mother's life. My mum's blockage was actually 90%, all this while she was living on borrowed time.
In the end, even Medisave came to my rescue when my mum went private, it was not much but it was better than nothing.
Anyway, the money spent on health will recover in time, my family will obviously be very careful when we re-accumulate our lost income over the next three months. Just like Singapore reserves, we will never know when we will need it again in the future so best be prudent.
( Readers who need an introduction to a cardiologist can email me in private. I did not share details on costs and billings, but I guarantee smart readers can figure it out with the info I shared )
The heightened alert phase has been much tougher than the circuit breaker. The circuit breaker came with more government support so everyone was more or less on the same page. HA has been less taxing fiscally but it was more demoralising as we were unable to have a drink at the nearest coffee shop. F&B was almost thrown to the dogs and there was no moratorium on mortgage loans.
To be fair, I thrived during HA fiscally, but with less fiscal support from the government, I see a lot more unhappiness on social media and chat rooms. Every day Singaporeans are really hurt by this second lockdown.
We should not have open our legs to foreigners.
Hawker centre rents should not have gone up!
Singapore should side with China and go against the US!
There are times when everyone becomes an armchair policymaker. That cannot be helped because they are literally on their arm-chairs the whole day.
I always find some kind of mental exercise to cope with these folks, many are friends and many getting crankier by the day.
Ask them one question:
So what if you are right?
Unless you are direct this question to Lawrence Wong, even if the other is right, nothing ever happens. Almost all of us are subject to government policies and our government is too effective for much change to take place at the ballot box.
A large part of these assertions are "normative" in nature - someone is pontificating about what ought to be true in Singapore society. This is always in opposition as to what actually holds true in Singapore. Lawyers love thinking about what ought to be because they are often spared the consequences of real legal and economic reform. Of course, we want less inequality, but who will pay the taxes in this imaginary society?
In my business, I do my best to ask myself this question if I am called upon to make a prediction.
We've done a session with Dr Wealth yesterday and I was asked to suggest one stock for the Dr Wealth portfolio yesterday. Dr Wealth's skin in the game was $10,000 on my selected stock, and it's not in my nature to see my business partner lose money on a prediction I made. So when I was planning my slides, I matched that $10,000 in an x2 leveraged account on that stock so that I can share the pain if my prediction underperforms.
If anyone asks me so what if I am right, there are fiscal consequences mapped to the accuracy of my predictions.
If I am right I stand to gain x2. If I am wrong I lose x2 as well.
Last year, I was the only trainer who actually bet big on a V-shaped recovery with an actually x2.4 leveraged account bet. I was hoping no one remembered that but some folks remembered that and yelled it out in the chat room during the seminar.
So this year, I'm more worried that someone will plough 100% into my prediction which some trolls have been spreading on social media.
Before you do this, I want to remind everyone that I also said that England will never win the European Cup two articles ago and England not only thrashed my favourite team Germany and has entered the semi-finals.
Anyway, it's going to be a tough week personally for me starting Monday.
This blog will resume after Wednesday when I give you guys a personal update.
