About some Telegram finance groups I am in

 

Today, I will discuss the few personal finance-related chat groups I am in on Telegram. I thought it would be interesting to share a little bit about the groups I participate in so readers of this blog can join them. 

Before I begin, I want to talk about the elephant in the room in the 1M65 chat group I do not participate in. From what I gather from folks who visit that group, the culture of 1M65 is similar to the EDMW forums of yesteryear. There is a lot of posturing, and occasional fights can break out, getting trolls banned. Nevertheless, I greatly respect Mr. Loo Cheng Chuan, who made the group what it is today, even though I have no desire to participate.

We must thank Mr. Loo, as he keeps many weirdos and folks jonesing for stock tips at bay so they don't infect the other smaller communities.  

a) Dividend Investment (https://t.me/+SCUdfE_LPMydufBw)

The first group I want to talk about is the Dividend Investment group, which has over 3000+ members and is the place to go for news on Singapore dividend stocks. On the first observation, it is the average group you go to to get news on dividend stocks. 

The admin is very conscientious about dividends coming out from SGX and HKSE counters, and one of the pleasant things I like about it is that it showcases a down-to-earth lifestyle. Dividend investors love sharing food pics, not from expensive restaurants but cheap hawker centres. My guess is this group may have more Gen X and Boomers in it.   

The group is quite friendly and down-to-earth, but it goes into battle mode until someone comes into the group to criticise dividend investing. Then, they can be pretty fierce. I don't blame them; at the moment, dividend strategies are going through a bear moment, and most retail investors just want to talk about NVIDIA and buy based on momentum. So dividends investors are the LGBT+ folks of the investing world - folks getting their lifestyle and investment choices questioned all the time. Still, they are fundamentally very comfortable with who they are, why judge them on their investment picks? 

Dividend investors just want to be left alone to collect their passive income. They might be older and have a lower concentration of professionals, but they do not aim to be the most brilliant guy or the best investment manager in the room. A common trope when someone collects dividends is jokes claiming they live a "dangerous" lifestyle. This is the result of 1M65, which made the claim that dividend investing is dangerous.  

A few guys I like include Huatist, the resident bear who gets excited when stocks turn red. Paul is always free to dispense the occasional wisdom and what he has for breakfast. 

b) Singapore Financial Independence Community or SGFI (https://t.me/sgfinindependence)

I spend a lot more time in the SGFI group. It was started by Supreme Leader Investment Moats to discuss the more esoteric aspects of FIRE, such as the safe withdrawal rate, but it has evolved well beyond his control. 

If you want me to describe SgFI culture, it has become a safe space for high-IQ professionals with INTJ personalities. Occasionally, some folks show up to ask everyone whether their retirement plan is sustainable, but they stay to talk about travel, FI philosophy and lifestyle. The female participation is easily the best I've seen in any group, so be prepared for some weighty female issues to be discussed now and then. I think getting women to open up about their lives and finances is hard enough, and SgFI goes further to attract highly accomplished female professionals to join our discussions. I hang around because the otaku and geek discussions are cool, and INTJ folks are very knowledgeable about anime and RPGs. 

All this being said, SGFI is not an inclusive culture. 

Ideas have to be robustly defended. If you want to brag about trades in a non-contextual manner, you will be cut down to size quickly. The Dividends group clearly understands that SgFI is more PMET-bent, and newbies complain that some members are pedantic. (It might be a GEP thing.)

 I cherish the discussion of the trio of ladies XX, KitCat and Ash. I'm afraid that some incel might chase them away. 

One guy, Leon, is working on summarising the complicated discussions using AI. 

Supreme leader Kyith may occasionally show up if something displeases or annoys him. 

There are many other groups, but due to information overload, I only follow two. However, I don't do this for investment reasons. I'm more interested in lifestyle choices and philosophies. 

How to think like SM Lee Hsien Loong

 

Whether you like him or not, PM Lee Hsien Loong presided over a successful reign that generated a massive amount of wealth for the country. After 2011, when the PAP lost Aljunied, he managed a quantifiable rebound in life satisfaction and happiness for all Singaporeans based on Gallup polls. As he settles into becoming Senior Minister, I can imagine journalists jockeying for positions to publish his memoirs or approach to leadership, which academics will study for decades to come.

But what if I told you that a book already exists about how SM Lee thinks?

Apparently, SM Lee was trained by a famous academic named Richard Zeckhauser from the Harvard Kennedy School. This nifty book by Dan Levy summarises Zeckhauser's thinking approach into a number of simple maxims that are practical and useful for lay readers. I think internalising these maxims would make it easier to discern SM Lee's leadership style once the book arrives in a few years. 

Here are a few points I have attempted to internalise to my work. 

a) When faced with a complicated problem, consider the extreme or simple cases.

Before attempting to figure out how to motivate people to pursue FIRE, we can look at the extreme case of how a successful situation can look like. Twenty years ago, my approach was to live on dividend income and then farm my entire take-home pay to super-size the portfolio to become a millionaire. I did not know what retirement looked like, but I definitely understood the prestige and status accorded to millionaires. 

These days, when I am crafting a solution for students, I need to come up with a more universal or simpler approach to FIRE. So, my idea is to try to generate $100 of passive income on average a month. $24,000 into a dividend portfolio yielding 5% can get the job done, and saving $2,000 monthly for a year will let someone try the idea on for size. 

Both approaches help explain financial independence, and folks can only discuss more complicated topics like safe rate of withdrawal or Monte Carlo simulations from other sources when they think that this can be sustained longer for themselves.

b) Think in terms of quantifiable probabilities.

This idea is to learn how to think about probabilities and revise them as we get news from the markets. 

Right from the start of 2024, I was betting that bringing down inflation in the US would be problematic, so my affairs are structured to consider cuts starting in 2025. The wonks are betting a 50-50 chance that a revision will start in November. 

Until September, this 50-50 will be revised when inflation results are reported. It is a superior way to invest, as if the probability drops, I can delay pivoting from, for example, DBS to FCT for my portfolio. 

 

c) Thinking at the margins

The biggest weakness of lifestyle design around FIRE is the idea that one can resign abruptly after reaching financial independence. We are still determining what happiness levels we will feel when we trade all our working hours wholesale for leisure time. 

So, this idea of thinking at the margin is the solution to the problem of Early Retirement. Your question should instead be: If you reduce an hour of working time to add one hour of leisure, will this result in greater life satisfaction? And then you keep making this trade-off until adding an hour of leisure no longer adds satisfaction to your life. 

There isn't a lot of corporate flexibility to allow you to progressively reduce your hours at work in practice, so a person can quit his day job after financial independence, get a short holiday, and then gradually increase his freelancing time to see whether it can increase his happiness. 

My issue has always been doing bullshit jobs in a toxic work environment. In a better environment where I can feel that I am contributing, increasing my exposure to work may make me happier. 

Anyway, this is a pretty nice book that teaches policymakers how to think, but I think that anyone can benefit from reading it. If it can sharpen the mind of one of the top mathematicians in the world and assist him in running our country, maybe more people in society should be taught this.

Investment lessons from Shogun

 

The first TV Series based on James Clavell's Shogun was made in 1980, and I vividly remember watching it when I was about 7-8 years old. The plot was too complicated for a kid, but I recalled the shocking scene of seeing someone boiled alive in the show. Shogun was rebooted in 2024 and is available for Disney+ subscribers; this version is not to be missed. Fans are saying that it is Game of Thrones that is done right.

On the Telegram finance discussion groups, some folks drew financial inspiration from popular characters in the series, like Kashigi Yabushige. Still, the discussion was short-lived because Yabushige committed seppuku at the end of Season 1. 

I would have wanted to have a deeper conversation about whether assessing an investment strategy based on the outcome instead of the process is correct. Still, we might be better inspired to consider what the main character, Yoshii Toranaga, can teach us about investing.

I summarise this briefly into three parts :

a) Toranaga knew when to let go of his pawns to serve his greater ambitions

One gripping aspect of the series was how often people are willing to give their lives for their lord. Toranaga understood that to create the impression that he had conceded defeat, key household staff members had to commit seppuku.

For investors, it means having proper conditions to exit positions when it is no longer to hold onto them. In such a case, dividend investors are not particularly good at letting go of a counter; we often only throw in the towel when dividends are stopped completely. In this sense, technical analysts and quantitative investors are better placed to cycle their positions. 

I probably got out of AEM a little late when the troubles started this year, but my algorithmic positions are always dynamic, and I cycled out of Indian Small caps for the NASDAQ when the momentum shifted.

b) Toranaga does not control the wind. He only studies it.

When Toranaga is about to execute his disloyal vassal Yabushige, Yabishige asks him how it feels to control the winds. Toranaga answers that he merely studies the wind and does not control it. Even in a moment of triumph, Toranaga is humble and understands his limitations.

In investing, Warren Buffett can control the wind. Anyone who can buy enough shares to install his own directors in a company can unlock value in an undervalued company. However, most of us are not at Warren Buffett's level. We can only read financial statements and analyst reports, deploy our capital intelligently, and hope the stock will eventually reach its intrinsic value.

But there are many ways to read the winds. People spend years learning how to read financial statements, and I write code to unveil momentum indicators that work. Toranaga probably has a network of spies and is already aware of who his disloyal servants are pretty early in the series. Increasing how we read the wind would matter. Suppose the methods of reading the markets are conventional. In that case, getting unconventional results will get harder, so I resort to code to search for investment insights. 

c) Toranaga is actually very frugal with the deployment of his resources.

Throughout the series, the audience is led to believe that Operation Crimson Sky is Toranaga's planned frontal assault on Osaka Castle, with maybe a slight twist involving cannons being fired from the sea. But as it turns out, the entire operation to free hostages within the castle was executed with just one highborn woman, Toda Mariko. With one life, Toranaga could break the alliance of the Regents arrayed against him and even cause his rival lord to lose the favour of the young heir. 

Investors may have a different way of framing what Mariko means in their portfolio. For a value investor, Mariko can be a 100-bagger stock. She can also be a longshot bet on an altcoin going viral online. 

For most retail investors, stacking all their resources on a longshot gamble is a mistake. Most retail investors want Mariko to be a lottery ticket that will change their lives. 

That idea is wrong. Toranaga's military forces are primarily concentrated in Edo and can engage in massive battles independently. A small 1% percentage into a 100-bagger or an altcoin can improve your returns without raising too much risk for your portfolio. This insight can only be understood if we study the concept of the economic utility of our investment portfolios. 

There's no need to put all your eggs into a counter that has high returns and a high standard deviation. You can backtest how a 1% investment in a Bitcoin ETF can influence a 60/40 portfolio over the past 10 years. You don't need a flashy, one-sided bet to outperform your peers. 

Anyway, I hope I've not spoiled the series for readers. I'm eagerly awaiting the second season of the story that would have to depart from the original book, but plenty of inspiration can be gained from actual Japanese history. 

What a beneficiary can do with inherited sums from a departed loved one

Recently, a friend has lost a loved one and has questions about what to do with sums of money left by that loved one. I wanted to write an article explaining my thoughts on what to do if you have a windfall from a departing loved one. 

Before I begin, I want to share that, as human beings, we would usually not treat inherited wealth as earned wealth, so I think the insights from behavioural finance experts on mental accounting may not be helpful when we are still grieving the departure of our loved ones. Even after more than five years after my dad was gone, I still segregate his sums in a separate account and would only use the capital for medical reasons. The dividends are also reinvested most of the time. 

The most important thing I would not do is pass the sums to a banker or financial advisor. As this involves AUM or commissioned sales, it would be tantamount to allowing the FA to inherit the wealth, so all my solutions I will discuss involve the DIY handling of sums of money.

Here are some of my considerations :

a) Singapore Savings Bonds (SSBs)

The most basic answer right now would be SSBs. This is the closest thing to a riskless investment and guarantees that capital can be preserved. SSBs yield 3.28% for the first 3 years, which is slightly higher than the inflation rate of 2.7%. However, it is still being determined whether it can continually beat inflation as the years go by. Finally, you can only have a maximum of $200,000 SSBs in your CDP account. Payouts occur every April and October when stocks generally do not pay dividends. 

b) Globally diversified ETFs with a discount broker

A more savvy solution is to do what most savvy retail investors do: put it with a discount broker and then buy a diversified pool of ETFs from different asset classes. The expense ratio can be meager, at below 0.3% per year (unless it's commodities). You can optimise on taxes by buying accumulating funds and UCITS ETFs on the London Stock Exchange.

I backtested a portfolio that invests 25% in stocks, REITs, bonds, and ETFs. Average returns exceed 7%, with a low standard deviation of around 12-14%. However, this asset allocation must be rebalanced annually, so there's an administrative overhead.

The biggest issue with this approach is that it is emotionally less satisfying as you need to liquidate to spend the sums. There may be a sense of unease with inherited sums, but spending about 2.5% of the prevailing amounts yearly should adequately preserve wealth and even allow payouts to grow over time. 

c) Local dividend stocks

Performing some factor selection of local dividend stocks may only slightly underperform the ETF suggestion and even result in a higher standard deviation. Still, Singapore markets have already gone through some terribly wrong days and are cheaper than foreign markets. Picking 20 blue chips with the highest yields and then cheery picking 10 with the lowest volatility can generate returns of over 8% for the past 10 years with single-digit standard deviations.

While the historical data looks good, this strategy's real strength is its emotional appeal. The more diversified your dividend portfolio is, the higher the frequency of payouts. If you are willing to pay a fee for higher trading costs, stocks in the CDP system can even be paid directly to your bank account at 5.30pm on a payout day.

This is particularly good for grieving individuals as it feels like your loved one is always looking after you and sending you money to buy a meal at the restaurant. I suspect this is one of the reasons for 1M65's hilarious outburst that SGX is all about Kiasu and Kiasi investors who will not take a risk on innovative tech counters. As such, I actually think Mr Loo Night would be right, but we dividend investors would like things to stay this way!

The downside I noticed about this strategy is that it is, after all, focused on high-yielding stocks of a single country, so the strategy can have its bad days. You can occasionally have drawdowns that are very large compared to the ETF strategy. 

As for me, I did not have to convert my father's holdings into dividend counters because I had been doing it with his blessing for decades while he was still alive. He transitioned from asset to cash-rich, while I did the opposite as I took on a mortgage loan for my executive condominium. These days, even closer relatives remarked how much I now looked like my dad as I reached my 50s.

Right now, I can share some of my thoughts because I collect rentals from a shophouse my father bought when I was a JC student in JB every few months. This shophouse supported me when I was getting my first degree. The ringgit has weakened immensely, so after all my diabetic meds and my mum's blood pressure meds, there's only so much left to buy relatives a treat in KSL

I always tell my uncles and aunties not to thank me as the money came from my dad's savvy moves when he was younger. 

My dad would have been 82 years old next Friday.

I hope he would approve of my actions as a steward.

Better alternatives to Early Retirement

 

I had much to think about this weekend because we just had a secondary school reunion. I did not intend to attend the event initially because I didn't know how to pitch my "lifestyle choice" within such a short timeframe. I need to use mathematics to explain how I could foot off the pedal 10 years ago, and it might get as awkward as the last family gathering I had. But because my cohort over-ordered table tickets and folks talked about sharing the cost of unsold seats, I threw my hat into the ring because I was free that evening. I should catch up with my secondary school classmates entering their 50s this year. 

As it turns out, quite a few folks follow me on this blog, CNA's Money Mind, and my material on YouTube, so there's no need to explain it to them. Still, folks in their 50s are now contemplating whether they can just stop work, so I had to tell them not to do anything rash unless their investments exceed 300 multiplied by their monthly expenses. Even so, I told them about the awkwardness and the loss of personal identity I faced when I gave up on regular employment, and even turning myself into a lawyer did not fully solve that issue. 

But I did not prescribe too many specifics. My classmates are successful in the corporate world but stuck with the skillsets they have honed over the years. If they need to get out, I suggest they find something passionate about first. 

This brings me full circle to what I am currently doing with my life.

I'm actually doing some kind of reverse FIRE. 

In the past, I struggled hard to get my passive income to exceed my expenses with some legroom so that I could do something else with my life instead of just accepting what my workplace offered me. But I stayed on for 7 years after financial independence because I enjoyed my work. It took a stint out of the public sector work to make me throw in the towel, and by then, my dividends had exceeded my take-home pay. 

As business is terrible, I'm struggling to do the opposite.

I'm seeking part-time gig opportunities to supplement my business income and live on my earned income. This number is below my family expenses, including mortgage payments, so I must use up a small part of my passive income to keep everything sustainable.

Of course, I have set some ground rules for my work. 

• It has to work where, psychologically, the positives of work outweigh the negatives. 
• It should also not touch weekday office hours because I consider my daily afternoon nap and swim one of the biggest positives in my life. 

As it stands, this is a challenging goal. 

If I succeed, I can pay all my expenses with passive or active income. My active income will only be earned at night or over weekends, and my engagement with clients and stakeholders must be positive and make me look forward to doing the work.

So, I think I might be able to make this arrangement work if interest rates start going down before the end of the year and I add another gig to my current list of engagements. 

If rates stay higher and longer, I might have to bite the bullet and start selling my weekday time to meet my objective.

But I will miss the afternoon naps if I do that.

Deeper thoughts about FIRE

 

I just wrote a basic article on FIRE on the Dr Wealth website. You can read it here.

This article allows me to share miscellaneous thoughts on the topic that might not be appropriate for a primer on the movement.

a) Why did FIRE splinter into so many variants?

I had the same questions when I first read about Barista and Coast FIRE - both movements do not eschew the working world altogether, so they are short-cuts at best and half-baked ideas at worst. But I'm convinced that very few folks will complete the journey over time. FIRE influencers are overwhelmingly Tech or Finance professionals, and the MBTI personality type that dominates the movement is a rare INTJ type that is less than 5% of the human population.

So, some kind of moderation to create a form of FIRE for ordinary humans is inevitable. Even my challenge to ask my students to set aside $24,000 to generate an average of $100 a month in dividend income is quite challenging to some. 

b) Does FIRE threaten the financial industry?

If FIRE does not threaten the livelihoods of commissioned FAs, we are not doing FIRE correctly because we can save 2-3% in fees when we invest directly using a low-cost broker. I think the financial industry understands this point, and I'm detecting many "dog whistles" to that effect. 

An increasingly common strategy is to ask whether people make personal sacrifices regarding FIRE. Talking about some folks' relationships or appearance is also a low blow. Another approach is to "forgive" and "give permission" to others to start saving later in life. More complicated strategies will pick on a person's inheritance. 

It's all an attempt to convince folks not to start, but it ignores how much freedom a person can achieve with even $100 in passive income a month. 

c) Does FIRE threaten policymakers?

If done correctly, policymakers should actually promote FIRE. A severe practitioner will have to work really hard and maybe hold multiple jobs to get a credible portfolio running before they reach the age of retrenchment. 

There are certainly worse movements that are gaining more traction, such as the idea of lying flat.

d) What can policymakers do to make FIRE less attractive? 

Actually, policymakers threatened by this movement can take welcome steps to make FIRE less attractive in Singapore society. 

I can imagine myself continuing working on a statutory board today if some really toxic managers did not exist because I liked IT work, and I have no issues going to work even with a passive income of $20k+ a month. I'd like to hang out with friends in the office, too. 

If you want to blunt the impact of FIRE, we need to take further steps to make Barista FIRE a reality. More work from home, flexible work arrangements and a four-day workweek are a good start. I don't think you can remove the assholes from the government offices or any corporate HQ overnight, but creating a means to minimise contact with these people and creating outcome-based work objectives will help immensely. For me, the potential for AI is to require less middle managers so assholes will be stuck in individual contributor roles. 

Suppose a double-first from Cambridge prefers a life as debating coach rather than a path to say, the Admin Service, I'm not really interested in his choice of FIRE - I want to know specifically what kind of Ministry culture will drive him to freelance instead of becoming an Elite.  

e) Are there viable alternatives to FIRE?

Every successive generation of folks will reach adulthood and get their shit together at a much older age. They will also become more individualistic. This is a common trend from Boomers all the way to Gen Alpha. 

I'm seeing younger Millenials and Gen Z taking up a gap year after years of work to travel or do whatever they want. This is a viable alternative as they effectively separate their retirements into multiple parts and enjoy small bits of it when they are young. 

My generation will not do this because it can taint our resumes. 

But HR will be unable to do anything if every young Singaporean aspires to this lifestyle. Just like the CCP will note able to do much if every young person in China starts to lie flat. 

I actually love what young people are doing here when it comes to lifestyle design, I welcome credible alternatives to FIRE and love hearing about them. If done collective as a population, the working world can become a much better place even for older folks like me. 

Strengthening the case for dividends investing

 

Interestingly, folks are still publishing books on dividend investing since most of the top-performing stocks in the US are tech stocks that give tiny payouts to investors. Daniel Peris is one of those rare authors who are still trying their best to push dividend investing in the US despite multiple decades of very ho-hum performance.

First, he admits that dividend investors have become underdogs in the US. He has, in fact, placed his bets that with higher interest rates, a new trend will emerge where US companies will eventually clarify their dividend policies and increase payouts to appease investors in the future. This is an incredible leap of faith, but he has great arguments for this.

When arguing for investing based on dividends, the first hurdle is Modigliani and Miller's Dividend Irrelevance Theory, which, over the years, has generated enough influence to get company bosses to dispense with dividend payouts entirely. Furthermore,  tax authorities who apply a different rate to dividends and capital gains taxation make this worse. Peris found academic arguments to counter M&M, citing the stability of dividends as a reason why it remains a good factor and putting M&M within the context of a different economic era where free cash flow is often negative.  

With the big argument out of the way, it's easier to understand why dividends have underperformed. A stock that returns dividends to shareholders retains lower earnings and would appreciate in price less than a stock that keeps its dividends or performs a buyback despite the same business performance. But there's a lot of pressure for growth investors to stay vested, as the lack of dividends means more volatility and a nasty drawdown if the growth thesis fails later. 

At the end of the book, I suspect that Peris is nostalgic. He wants the stock markets to return to an era where investors place their assets on well-run businesses and companies. In this current era, speculators bet on technology trends that push the markets higher and higher, allowing ridiculous PE ratios to take root in the US.

This is the same fantasy in the hot Japanese Anime Frieren. 

Frieren, possibly the best anime of late, invokes the same fantasies, where Fern uses only the basic offensive magics to defeat all the mages of this era. I had to make this reference as I just completed watching this series with my son. 

Strangely, the Singapore market is precisely what Peris desires. In Singapore, you find our local public companies being carefully focused on a good dividend policy and selling stocks at current PEs of less than 10. If you attend AGMs, that's what the boomer uncle investors really want. 

They just want to get paid and eat an excellent buffet simultaneously.

I am currently testing a few screens based on the book. There is some outperformance, but Sharpe ratios are around 0.5 at best. 

Always good to have a lab to test assertions.

   

Wisdom from "Useless" books

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

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

a) The Way Home by Ben Katt

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friendly Career Update

 

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

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

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

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

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

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

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

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

Will FIRE's enemies grow stronger?

 

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

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

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

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

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

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

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

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

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

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

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

A question of Two Apples

 

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

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

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

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

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

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

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

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

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

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

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

Apples should be earned. 

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

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

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

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

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

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

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

This is where I talk a little bit about my hobbies

 

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

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

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

a) Dungeons and Dragons may start its decline this year
 

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

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

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

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

In this sense, RPGing is different from finance. 

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

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

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

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

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

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

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

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

Letter to Batch 33 of the Early Retirement Masterclass

Dear Students of Batch 33,

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

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

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

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

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

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

Hope to see you then!

Christopher Ng Wai Chung

Three improvements I hope to see for the CPF system

 

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

Here's my wish list :

a) Make CPF-Life scale linearly with premiums.

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

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

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

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

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

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

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

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

 

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

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

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

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

Anyway, these are my suggestions to the policymakers. 

Feel free to discuss how feasible they are. 

Update on my crypto positions

 

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

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

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

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

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

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

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

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

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

From Languishing to Flourishing

 

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

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

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

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

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

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

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

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

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

On the issue of languishing

 

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

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

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

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

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

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

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

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

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

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

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