One of the issues which really bug me these days is when I meet some acquaintances from the past and they ask me what am I currently doing.
I am always stuck with these two choices :
a) I tell them that I am retired.
When I say that I am retired, most folks will view my answer with disbelief. Some ex-classmates might find it funny and that I am just trying to cover up the fact that I was retrenched or something. What happens is that I get cornered to explain what I really do and to avoid the pain of facing a drop in "status" ( which really bothers the shit outta me even though it should'nt ), I start to get defensive after that.
To overcompensate, I start talking about dividends investing and sometimes commit the sin of hubris by saying that my investment income exceeds my last drawn pay. That gives me a momentary sense of satisfaction but I feel bad after that because I did not act with sufficient humility. It eats me as I really don't think people should inflict psychic damage to working Singaporeans by talking about using wealth not to do any work like what I do. Working folks should be honored for their contribution to the economy.
I also learned that claiming that I am a private investor sounds just as bad. Some smart alec in response will ask me if I am an accredited investor which I am not. ( Nope, sorry, no second milion... yet... ) The other point is that I don't really commit to investment analysis the way some bloggers do. I use Bloomberg to get statistical data and act on research created by someone else so I don't really qualify as an analyst.
b) I tell them I am unemployed.
I am currently in the process of learning to just say that I am currently unemployed. The drop in status really hurts especially when I meet Engineering classmates from NUS, I was not the best student but I was someone to beat during those bad old days. But people will avoid asking more questions. After all, you are openly unemployed, how much more can they hurt you ?
At the end of the day, it all boils down to ego management. If I had the mental resolve to simply accept the drop in status, I would have been able to humbly just accept working in a government bureaucracy. At the end of the day, my ego just would not let me.
Anyway, right I'm trying to distinguish between retirement and unemployment.
Right now I am working on this one distinction :
a) You are retired if, without earned income, your net worth either stays the same or goes up at every time interval.
b) You are unemployed if without earned income, your net worth drops at every time interval.
Problem is that there are many retirees with diminishing net worth in their 70s or 80s which would simply be classified as elderly unemployed by this definition.
Monday, March 24, 2014
Monday, March 17, 2014
Why Gen-X chooses Cash over Compassion ?
A good friend had a conversation with me the other day.
The conversation was about Professor Chan Heng Chee. My friend said that he's a big fan of hers because of a kind gesture she made about 20 years ago. You see, my friend represented his junior college in the Pre-U seminar and got to the microphone to make a point. The person whom the question was directed to casually dismissed my friend's question but Prof Chan stopped him, and said that the point my friend made was a valid one and deserved more consideration.
That simple act was enough to make my friend a lifelong fan and ally.
I then asked my friend a pointed question.
I asked him if he felt discriminated because he did not come from a top JC. He said, yes, he definitely felt that way and, like myself, my friend spent most of his life trying to prove himself as a result of this.
I think my friend turned out rather well, he's currently doing rather well at work after being a continuous feature in the Dean's List throughout his NUS years.
Now recently, there's been some talk about Singaporeans lacking compassion.
I want to share my hypothesis on why this is do.
You see, the folks who form the backbone of the economy today belongs to Generation X.
When Generation X was in school :
a) We did'nt have Heng Swee Keat as our education minister.
b) Not every school is a good school. In fact some schools suck, and by association, authorities will consider their students to suck as well. It affects the way authorities engage students if there is an invisible L word floating on top of their heads.
c) You can't teach less to learn more. You teach more to learn more. GP is more about developing conservative points of view and not about innovation or critical thinking. And no, there is no Google.
d) Teachers don't tell you that your exams do not define you as a person. That is a very recent phenomenon. Teachers tell you that you are relegated to a lower status if you don't do well for exams and it's your damn fault because we are a meritocratic society.
Generation X who's like me know that if our grades are good, our fart will smell like truffles and people will happily eat our diarrhoea. But we keep a constant look-out over the horizon to see what can threaten our lofty positions. Other Gen-Xers are not that lucky. They get labelled "Average", "Loser" or worse "Normal" throughout their days in school.
Now, fast forward to the mid-90s when we enter the workplace and discover this thing called Money.
Money replaces grades, GPA and t-scores in the real world. If you have it, you can buy a car or a watch. You can cut someone down with psychic damage if you can demonstrate that live in District 10 or have a Lamborghini. People always get bothered when you have more money than them, this makes relative wealth way more important than absolute wealth.
It's the grading curve all over again !
So what happens...
The Gen-X guys with the qualifications will pimp it to get more money to reinforce their positions in real life. The folks with poorer qualifications know that control of Money means that they no longer to subject to tiny acts of discrimination in Singapore society.
The hunt for Money becomes an all important Round 2 with a different set of winners.
The final link that makes Money and Compassion a trade-off are psychological studies which show that people who are "primed" with thoughts about money generally behave in a ruder and more abrupt manner.
So in summary, it's not an accident that Singaporeans lack compassion, this is a deliberate act of design as part of the education system in the 1990s. Grades were a microcosm of the real world, where Gen-X was socially engineered to fight for the best grades in preparation for a similar ranking to take place in real life. Once Gen-X joined the economy, their report cards were replaced with personal balance sheets where the ranking of their net worth can affect important things like spouse selection for men.
How do we get out of this mess ( Assuming that you think this is a mess )
My take is that one day Gen-X will retire from the workforce. Maybe Gen-Y who have different values from Gen-X will make Singapore a better place.
The conversation was about Professor Chan Heng Chee. My friend said that he's a big fan of hers because of a kind gesture she made about 20 years ago. You see, my friend represented his junior college in the Pre-U seminar and got to the microphone to make a point. The person whom the question was directed to casually dismissed my friend's question but Prof Chan stopped him, and said that the point my friend made was a valid one and deserved more consideration.
That simple act was enough to make my friend a lifelong fan and ally.
I then asked my friend a pointed question.
I asked him if he felt discriminated because he did not come from a top JC. He said, yes, he definitely felt that way and, like myself, my friend spent most of his life trying to prove himself as a result of this.
I think my friend turned out rather well, he's currently doing rather well at work after being a continuous feature in the Dean's List throughout his NUS years.
Now recently, there's been some talk about Singaporeans lacking compassion.
I want to share my hypothesis on why this is do.
You see, the folks who form the backbone of the economy today belongs to Generation X.
When Generation X was in school :
a) We did'nt have Heng Swee Keat as our education minister.
b) Not every school is a good school. In fact some schools suck, and by association, authorities will consider their students to suck as well. It affects the way authorities engage students if there is an invisible L word floating on top of their heads.
c) You can't teach less to learn more. You teach more to learn more. GP is more about developing conservative points of view and not about innovation or critical thinking. And no, there is no Google.
d) Teachers don't tell you that your exams do not define you as a person. That is a very recent phenomenon. Teachers tell you that you are relegated to a lower status if you don't do well for exams and it's your damn fault because we are a meritocratic society.
Generation X who's like me know that if our grades are good, our fart will smell like truffles and people will happily eat our diarrhoea. But we keep a constant look-out over the horizon to see what can threaten our lofty positions. Other Gen-Xers are not that lucky. They get labelled "Average", "Loser" or worse "Normal" throughout their days in school.
Now, fast forward to the mid-90s when we enter the workplace and discover this thing called Money.
Money replaces grades, GPA and t-scores in the real world. If you have it, you can buy a car or a watch. You can cut someone down with psychic damage if you can demonstrate that live in District 10 or have a Lamborghini. People always get bothered when you have more money than them, this makes relative wealth way more important than absolute wealth.
It's the grading curve all over again !
So what happens...
The Gen-X guys with the qualifications will pimp it to get more money to reinforce their positions in real life. The folks with poorer qualifications know that control of Money means that they no longer to subject to tiny acts of discrimination in Singapore society.
The hunt for Money becomes an all important Round 2 with a different set of winners.
The final link that makes Money and Compassion a trade-off are psychological studies which show that people who are "primed" with thoughts about money generally behave in a ruder and more abrupt manner.
So in summary, it's not an accident that Singaporeans lack compassion, this is a deliberate act of design as part of the education system in the 1990s. Grades were a microcosm of the real world, where Gen-X was socially engineered to fight for the best grades in preparation for a similar ranking to take place in real life. Once Gen-X joined the economy, their report cards were replaced with personal balance sheets where the ranking of their net worth can affect important things like spouse selection for men.
How do we get out of this mess ( Assuming that you think this is a mess )
My take is that one day Gen-X will retire from the workforce. Maybe Gen-Y who have different values from Gen-X will make Singapore a better place.
Friday, March 14, 2014
Usefulness of investing in career management.
Just read The Hard Thing about Hard Things by Ben Horowitz.
It talks about two kinds of leaders - "1"s and "2"s.
"1"s are highly intuitive thinkers and visionaries ( typically ENTJ Field Marshal types ) who revel in playing a game of competitive multi-dimensional chess with other business in the space. Bill Gates, Jack Welch and Steve Jobs is a "1".
"2"s are operational managers who are process driven and excel at making consistent and incremental changes ( typically ESTJ Administrator types ). Tim Cook is a "2".
You will need a combination of "1"s and "2"s to run an organization.
When managing a Tech career, you will need to understand your primary mode of thinking.
Most engineers and computer scientists are "2"s. They think empirically and like to frame problems in concrete terms. They are not very much into ivory tower theories. I think this is the main reason why many engineers don't climb very far in the corporate world. You skills to get you into middle management willl not be enough for you to get into senior management. This is why many engineers join MBA programs. But MBAs are only half the story, just because you take some marketing classes does not make you a visionary, and many engineers will probably focus on operational management or quantitative finance classes in business school.
The converse problem is rarer. A "1" in the corporate world will suffer in the initial stages in their career as they lack the experience and authority to push their ideas through. Many become rebels and heretics and subsequently leave the organization they work for. In this case, a "1" can get some industrial certifications to get the basic work done to bide their time or look for a mentor and hitch a ride to a career track where they can make a difference.
This concept also gave me some thought into how investing fits into this picture.
One of the fears upon getting my Engineering degree was getting permanently fixed at the operational track. After all, I an a textbook ESTJ when I was tested at age 18. Fortunately, my vision in the early part of my career was to build my salary in two ways. During the day, I manage systems and projects and earn a daily wage. At night, I use my quantitative skills to see if there is a way to constantly extract returns in the markets.
Using the skills of a pure "2", I have an income stream which is expected to plateau in middle age but I can begin to exploit market returns beyond my retirement.
Then something funny happened....
To do decent investments, you need a whole slew of skills in the liberal arts. Political science to assess the political risk of your stock counters. Economics to understand the moves made by the Feds. Psychology to assess herd mentality. Philosophy to ensure that you are not fooling yourself and engaging in logical fallacies. These combination of liberal arts skills are always profitable to discover the next stock which outperform the markets.
While investors start out as "2"s, ownership and management of multiple businesses can increase the "1"-ness in them.
They are also getting paid to play multi-dimensional chess against other investors and their peers in the salary game.
In summary, no matter how you manage your career, investing basically means taking ownership of multiple businesses. If you take this hobby seriously, you will be able to develop the ability to think on a broader manner and rapidly find ways to exploit your knowledge no matter how trivial it is.
( From a psychological perspective, I hypothesize that a strongly typed "S" can possibly enhance their "N" component of the MBTI by engaging in fundamental analysis. )
It talks about two kinds of leaders - "1"s and "2"s.
"1"s are highly intuitive thinkers and visionaries ( typically ENTJ Field Marshal types ) who revel in playing a game of competitive multi-dimensional chess with other business in the space. Bill Gates, Jack Welch and Steve Jobs is a "1".
"2"s are operational managers who are process driven and excel at making consistent and incremental changes ( typically ESTJ Administrator types ). Tim Cook is a "2".
You will need a combination of "1"s and "2"s to run an organization.
When managing a Tech career, you will need to understand your primary mode of thinking.
Most engineers and computer scientists are "2"s. They think empirically and like to frame problems in concrete terms. They are not very much into ivory tower theories. I think this is the main reason why many engineers don't climb very far in the corporate world. You skills to get you into middle management willl not be enough for you to get into senior management. This is why many engineers join MBA programs. But MBAs are only half the story, just because you take some marketing classes does not make you a visionary, and many engineers will probably focus on operational management or quantitative finance classes in business school.
The converse problem is rarer. A "1" in the corporate world will suffer in the initial stages in their career as they lack the experience and authority to push their ideas through. Many become rebels and heretics and subsequently leave the organization they work for. In this case, a "1" can get some industrial certifications to get the basic work done to bide their time or look for a mentor and hitch a ride to a career track where they can make a difference.
This concept also gave me some thought into how investing fits into this picture.
One of the fears upon getting my Engineering degree was getting permanently fixed at the operational track. After all, I an a textbook ESTJ when I was tested at age 18. Fortunately, my vision in the early part of my career was to build my salary in two ways. During the day, I manage systems and projects and earn a daily wage. At night, I use my quantitative skills to see if there is a way to constantly extract returns in the markets.
Using the skills of a pure "2", I have an income stream which is expected to plateau in middle age but I can begin to exploit market returns beyond my retirement.
Then something funny happened....
To do decent investments, you need a whole slew of skills in the liberal arts. Political science to assess the political risk of your stock counters. Economics to understand the moves made by the Feds. Psychology to assess herd mentality. Philosophy to ensure that you are not fooling yourself and engaging in logical fallacies. These combination of liberal arts skills are always profitable to discover the next stock which outperform the markets.
While investors start out as "2"s, ownership and management of multiple businesses can increase the "1"-ness in them.
They are also getting paid to play multi-dimensional chess against other investors and their peers in the salary game.
In summary, no matter how you manage your career, investing basically means taking ownership of multiple businesses. If you take this hobby seriously, you will be able to develop the ability to think on a broader manner and rapidly find ways to exploit your knowledge no matter how trivial it is.
( From a psychological perspective, I hypothesize that a strongly typed "S" can possibly enhance their "N" component of the MBTI by engaging in fundamental analysis. )
Monday, March 10, 2014
The Generation X lament.
I had a taxi ride one day and the driver, who is baby boomer in his late 50s, asked me if I knew what YOLO stood for. I said," Of course it stands for You Only Live Once". I was then treated to a hilarious conversation about how his philosophy in life is YOLO, and why he kept Vietnamese students as mistresses and his various sexual adventures in Thailand.
Fast forward a few months down the road, the Government instituted a one time transfer of tax proceeds from the tax paying public in 2013 to a group of seniors. This package is popularly known as the Pioneer Generation Package.
This package has been very well-received by the public, but I belong to a small minority that has issues with transferring wealth involuntarily from one generation to another.
a) Baby Boomers already benefited immensely from Singapore's growth.
Baby boomers did not need a degree to be gainfully employed. They presided over a period of time where you can buy a semi-detached home for $100,000 and sell it today for $2 million dollars. Many baby boomers still play a role in the workforce today. Many cling onto senior management roles without being proficient in English or Computing.
b) Baby Boomers were also young and foolish once.
Many baby boomers worked hard to build Singapore into what it is today. But like all generations, they were young and foolish once. Not all baby boomers took advantage of the economy to become successful in life.
Many were like Gen X and Gen Y and wasted their youth drinking and womanizing. Some subscribe to YOLO as a life philosophy.
When we use the term Pioneer, we can mislead ourselves into thinking that all of them are economic martyrs, well-deserving when some, maybe even a minority, are clearly not.
Those who lived their lives wisely can expect to spend their twilight years with loving children who can provide support in terms of money and services. This was our social compact prior to the 2011 elections - families look after themselves to create a society with low taxation and plenty of prosperity. i.e. Parents raise children well. Children then support parents at their old age with their money which was not eroded by excessive taxation when they were younger.
c) No colonial government took Baby Boomer's earnings to support their parents.
The equivalent of the Pioneer Generation Package is some colonial government taking taxes from Malaya and ensuring health care and welfare benefits for their ancestors. If such a transfer took place then perhaps it would be more comforting to accept this one time wealth transfer.
Correct me if I am wrong, the British were to busy running away from the Japanese to administer the island this way.
------------------------------------------------------------------------------------------------------------
All in all, I'm not a big fan of the Pioneer Generation Package.
If it makes uncomfortable reading for you and I sound a little ungrateful, I apologise, I voted this government into Parliament but I was unpleasantly surprised by this sudden shift towards the political left.
But do understand that I'm not coming from an angle where I am disrespectful to my seniors, I do want to look after my parents in their old age and support them. But my parents are my own responsibility, they are not your responsibility and certainly not the responsibility of other tax payers of Singapore.
Generation X did not have it as easy with the economy as the boomers. To get decent jobs we need to be very highly trained and we certainly cannot afford a car or landed property even for the best amongst us. There was some increase in asset value, it pales in comparison with what the Boomers experienced.
We are sandwiched in the workplace between Baby Boomers and Generation Y. Baby boomers are not ready to give up the throne to us and globalization is rapidly destroying the middle class making it hard for us to make ends meet. Generation X also had to fight outsourcing and deal with the influx of foreign talent.
I shall leave the critique of Generation Y to the rest of the Internet. (YOLO !)
Generation X did not get it easy, we never even asked for work life balance when we were in our 20s. We want to look after our families. Please don't take money meant for our families to feed ALL families without qualification. Most of our seniors led productive lives, saved for their future, and had a low tax regime to support them while they are at it. No one took their money and forced them to support their seniors.
We really need to rethink the way we conduct the wealth transfers.
I am not asking that you give money to us Generation X.
I am asking that you trust us to look after our parents.
I am asking that you either let us keep our hard earned money or invest the money in infrastructure, defense or even educating the future generations.
We are Generation X.
Our time never came. It probably never will.
Fast forward a few months down the road, the Government instituted a one time transfer of tax proceeds from the tax paying public in 2013 to a group of seniors. This package is popularly known as the Pioneer Generation Package.
This package has been very well-received by the public, but I belong to a small minority that has issues with transferring wealth involuntarily from one generation to another.
a) Baby Boomers already benefited immensely from Singapore's growth.
Baby boomers did not need a degree to be gainfully employed. They presided over a period of time where you can buy a semi-detached home for $100,000 and sell it today for $2 million dollars. Many baby boomers still play a role in the workforce today. Many cling onto senior management roles without being proficient in English or Computing.
b) Baby Boomers were also young and foolish once.
Many baby boomers worked hard to build Singapore into what it is today. But like all generations, they were young and foolish once. Not all baby boomers took advantage of the economy to become successful in life.
Many were like Gen X and Gen Y and wasted their youth drinking and womanizing. Some subscribe to YOLO as a life philosophy.
When we use the term Pioneer, we can mislead ourselves into thinking that all of them are economic martyrs, well-deserving when some, maybe even a minority, are clearly not.
Those who lived their lives wisely can expect to spend their twilight years with loving children who can provide support in terms of money and services. This was our social compact prior to the 2011 elections - families look after themselves to create a society with low taxation and plenty of prosperity. i.e. Parents raise children well. Children then support parents at their old age with their money which was not eroded by excessive taxation when they were younger.
c) No colonial government took Baby Boomer's earnings to support their parents.
The equivalent of the Pioneer Generation Package is some colonial government taking taxes from Malaya and ensuring health care and welfare benefits for their ancestors. If such a transfer took place then perhaps it would be more comforting to accept this one time wealth transfer.
Correct me if I am wrong, the British were to busy running away from the Japanese to administer the island this way.
------------------------------------------------------------------------------------------------------------
All in all, I'm not a big fan of the Pioneer Generation Package.
If it makes uncomfortable reading for you and I sound a little ungrateful, I apologise, I voted this government into Parliament but I was unpleasantly surprised by this sudden shift towards the political left.
But do understand that I'm not coming from an angle where I am disrespectful to my seniors, I do want to look after my parents in their old age and support them. But my parents are my own responsibility, they are not your responsibility and certainly not the responsibility of other tax payers of Singapore.
Generation X did not have it as easy with the economy as the boomers. To get decent jobs we need to be very highly trained and we certainly cannot afford a car or landed property even for the best amongst us. There was some increase in asset value, it pales in comparison with what the Boomers experienced.
We are sandwiched in the workplace between Baby Boomers and Generation Y. Baby boomers are not ready to give up the throne to us and globalization is rapidly destroying the middle class making it hard for us to make ends meet. Generation X also had to fight outsourcing and deal with the influx of foreign talent.
I shall leave the critique of Generation Y to the rest of the Internet. (YOLO !)
Generation X did not get it easy, we never even asked for work life balance when we were in our 20s. We want to look after our families. Please don't take money meant for our families to feed ALL families without qualification. Most of our seniors led productive lives, saved for their future, and had a low tax regime to support them while they are at it. No one took their money and forced them to support their seniors.
We really need to rethink the way we conduct the wealth transfers.
I am not asking that you give money to us Generation X.
I am asking that you trust us to look after our parents.
I am asking that you either let us keep our hard earned money or invest the money in infrastructure, defense or even educating the future generations.
We are Generation X.
Our time never came. It probably never will.
Thursday, March 06, 2014
Thoughts on my retiree lifestyle after two months.
Just to tide over the time, here are some random thoughts on my retiree lifestyle before I write something more substantial this week. I've been out of the work-force for two months and living the life that resembles a cross between a fund manager and a hobo. After picking up a distinction grade in a Data Science module from Coursera, I was spending time at the Central library to test out investment models at the central library.
a) Finances are holding up.
With the fresh flow of dividends cash rolling in end-February, I find that my net worth is actually higher than my last day at work not counting home equity ( otherwise it's even higher ). I'm not sure if this momentum can be maintained as a large portion of my stocks are invested in counters which would not do too well when interest rates go up.
I'm crossing my fingers that I will be able to successfully back-test a non-dividends portfolio to make this blog more interesting. Expect 1% from my portfolio to be placed in it for everyone's amusement. Hope that I can get this going sometime mid-April. ( Hint for the investment experts : Graham and Ken Fisher are right about Singapore stocks )
b) For some strange reason your consumption needs get reduced.
Maybe it's the lack of suffering in the workplace from having someone to report to, my willpower is much stronger when I am not working in an office. I no longer obsess about branded stationary (Moleskine blows a big hole in your wallet) and have held out against buying a Gundam Model kit for two months already ( It's a FA-78 Thunderbolt if you are wondering what's caught my fancy ). However, I still can't resist a good read and still paying a lot of money on books, having just completed Kevin Roose's Young Money and going to start on Ben Horowitz's The Hard Thing about Hard Things soon.
c) The 8-hour sleep part is the best.
I'm still not a good sleeper but now I have the luxury of ensuring that I get 8 hours of sleep a day. I bet most Singaporeans don't get to enjoy this very often. If you don't pick anything out from this article, you really need to try this.
d) Premium for intelligent conversation goes up a lot.
Fighting against boredom is something I struggle with everyday. Fortunately, I exercise more everyday and will begin meditation this week. What I need more of is intelligent conversation and there is'nt a lot of retirees who can engage with that once you are out of the workforce. Working folks worry about condominium payments and the financially independent may not even care about current affairs. Finding smart, intelligent people to have a chat with is plain hard if you consider that now my weekends are dedicated to family time and people are not free when I am free. ( Hint for the flaming extroverts : don't do what I do, ease into a part-time arrangement before quitting your job. You'll miss the bitching at work. )
Another words, keeping busy is a struggle but you need to build a structure around your life when no one is there to do it for you.
Right now I'm still pretty satisfied with my current arrangement, it's still not sustainable mentally because that's a part of mind that keeps telling me that I can do better if I contribute more directly to the economy and there's some residual fear of missing out.
Let's see if March will work out.
Sunday, February 23, 2014
Alan Ramos, IDA and the problem with mid-career IT engineers.
I promised a more detailed treatment about the Alan Ramos incident. For further details and background, you may refer to the following article here :
http://therealsingapore.com/content/mexican-ida-officer-charged-having-sex-15-year-old
Basically, many netizens were upset with my previous employer for hiring a Mexican Harvard psychology graduate when it was perceived that many Singaporean mid-career engineers are in a dire need of a job. When confronted on FB, IDA was silent on why it made the decision to hire Alan Ramos.
I did not meet Alan during my stay in IDA. In fact, I met him at Barcamp prior to becoming a public officer. My impression of him was quite good, he seemed dynamic and could think quickly on his feet although I felt he was overselling his Harvard credentials at that time. I did spend some time wondering what happened to this Boy Wonder throughout my stay in IDA. That was until I read the news that he was involved with an underaged prostitute.
My aim for this posting is to not to represent IDA, but to share what I think could have been a better alternative than keeping silent on the decision to hire Alan Ramos. I also would need to do this in a way that is fair to my previous employer, where I still have many friends.
Right now, I doubt that any officer could have provided an answer the way I did because any message would have been heavily censored before it was placed on FB. This is just the way the government bureaucracy works. Career risk is very high for many senior public servants, there is simply too much incentive not to make mistakes rather than to do something which the public perceives as being the "right" thing to do.
Now to the gist of why agencies needs the likes of Alan Ramos :
To address the question of hiring psychology graduates, you need to really understand that IDA is not IBM, HP or even NCS - IDA is a government agency. Dollars and cents are not the most precious currency in a government organization. IMHO, the most precious currency is accountability - a chain of documents and paperwork which can demonstrate integrity of any officer and his superiors if subject to the scrutiny of any auditor.
Unless you work in GCIO which is the IT department that runs the government servers, you are a bureaucrat who will spend a lot of time writing approval papers and making power point presentations. As such, I think that a project manager who has spent 20 years on SDLC would make a horrible government servant, unless he likes doing documentation, I would bet that he would be surprised at the amount of paperwork which needs to be done just to keep the project running.
In such a situation, having a public officer who is trained in the liberal arts like Alan Ramos would make much more sense. His papers would be riddled with fewer grammatical errors and psychology majors have a knack for reading other people, which in my opinion, more important in an agency because a lot of presentations require a large amount of mind-reading so that it can pushed to another layer of approval. Liberal arts majors also do a little bit of science subjects so it may be possible that Alan may have taken a Computer Science module or two before getting hired.
The next item which I would like to address is the problem of mid-career engineers. Like me, you might think that you do have the skills that makes you entitled to an iron rice bowl in a government agency.
The hard and bitter truth about an engineering career is that it needs to be maintained to stay relevant. Most of us in our 40s have worthless degrees with a resume full of project victories which employ outmoded technologies or IT management frameworks.
If you are an operations PM who knows ITIL at the back of your hand, DevOps is the new killer management paradigm which threatens your livelihood by having developers manage their change processes over the cloud without operations staff.
What is the use of having SDLC experience when a lot of organizations are looking at AGILE methodology which is cheaper and results in software that better serves the needs to the companies.
Can a DBA set-up a Hadoop cluster ?
Are you a software engineer stuck in the C# .NET framework when the hottest programming languages are Python and Ruby ?
Can an old school TCP/IP stack engineer re-tool himself for the Internet of Things ?
Can an algorithms expert understand Naive Bayes or the working of the K Nearest Neighbour algorithm ?
In the short term, engineers have the hottest skills to get the best tech jobs. After 10 years, there will be enough technology disruption to render your skills worthless, that's even if you hold a tech job continuously because your company may not change as fast as the tech industry.
At least Alan Ramos still has his liberal arts background which is timeless and allows him to adapt to changes in any industry.
To many mid-career engineers, it looks like an iron rice-bowl is a great way to escape the great obsolescence that awaits all engineering careers, but from my personal experience, many of us are really not suited to government careers.
Instead I recommend the following :
a) Can you earn your income from investments ?
b) Do you have the skills and capital to start a small business ?
c) Why not obtain a taxi license ?
Alan Ramos will be fully dealt with by the law, but don't begrudge his skills and training, they may really be more suited to a government agency than you think.
http://therealsingapore.com/content/mexican-ida-officer-charged-having-sex-15-year-old
Basically, many netizens were upset with my previous employer for hiring a Mexican Harvard psychology graduate when it was perceived that many Singaporean mid-career engineers are in a dire need of a job. When confronted on FB, IDA was silent on why it made the decision to hire Alan Ramos.
I did not meet Alan during my stay in IDA. In fact, I met him at Barcamp prior to becoming a public officer. My impression of him was quite good, he seemed dynamic and could think quickly on his feet although I felt he was overselling his Harvard credentials at that time. I did spend some time wondering what happened to this Boy Wonder throughout my stay in IDA. That was until I read the news that he was involved with an underaged prostitute.
My aim for this posting is to not to represent IDA, but to share what I think could have been a better alternative than keeping silent on the decision to hire Alan Ramos. I also would need to do this in a way that is fair to my previous employer, where I still have many friends.
Right now, I doubt that any officer could have provided an answer the way I did because any message would have been heavily censored before it was placed on FB. This is just the way the government bureaucracy works. Career risk is very high for many senior public servants, there is simply too much incentive not to make mistakes rather than to do something which the public perceives as being the "right" thing to do.
Now to the gist of why agencies needs the likes of Alan Ramos :
To address the question of hiring psychology graduates, you need to really understand that IDA is not IBM, HP or even NCS - IDA is a government agency. Dollars and cents are not the most precious currency in a government organization. IMHO, the most precious currency is accountability - a chain of documents and paperwork which can demonstrate integrity of any officer and his superiors if subject to the scrutiny of any auditor.
Unless you work in GCIO which is the IT department that runs the government servers, you are a bureaucrat who will spend a lot of time writing approval papers and making power point presentations. As such, I think that a project manager who has spent 20 years on SDLC would make a horrible government servant, unless he likes doing documentation, I would bet that he would be surprised at the amount of paperwork which needs to be done just to keep the project running.
In such a situation, having a public officer who is trained in the liberal arts like Alan Ramos would make much more sense. His papers would be riddled with fewer grammatical errors and psychology majors have a knack for reading other people, which in my opinion, more important in an agency because a lot of presentations require a large amount of mind-reading so that it can pushed to another layer of approval. Liberal arts majors also do a little bit of science subjects so it may be possible that Alan may have taken a Computer Science module or two before getting hired.
The next item which I would like to address is the problem of mid-career engineers. Like me, you might think that you do have the skills that makes you entitled to an iron rice bowl in a government agency.
The hard and bitter truth about an engineering career is that it needs to be maintained to stay relevant. Most of us in our 40s have worthless degrees with a resume full of project victories which employ outmoded technologies or IT management frameworks.
If you are an operations PM who knows ITIL at the back of your hand, DevOps is the new killer management paradigm which threatens your livelihood by having developers manage their change processes over the cloud without operations staff.
What is the use of having SDLC experience when a lot of organizations are looking at AGILE methodology which is cheaper and results in software that better serves the needs to the companies.
Can a DBA set-up a Hadoop cluster ?
Are you a software engineer stuck in the C# .NET framework when the hottest programming languages are Python and Ruby ?
Can an old school TCP/IP stack engineer re-tool himself for the Internet of Things ?
Can an algorithms expert understand Naive Bayes or the working of the K Nearest Neighbour algorithm ?
In the short term, engineers have the hottest skills to get the best tech jobs. After 10 years, there will be enough technology disruption to render your skills worthless, that's even if you hold a tech job continuously because your company may not change as fast as the tech industry.
At least Alan Ramos still has his liberal arts background which is timeless and allows him to adapt to changes in any industry.
To many mid-career engineers, it looks like an iron rice-bowl is a great way to escape the great obsolescence that awaits all engineering careers, but from my personal experience, many of us are really not suited to government careers.
Instead I recommend the following :
a) Can you earn your income from investments ?
b) Do you have the skills and capital to start a small business ?
c) Why not obtain a taxi license ?
Alan Ramos will be fully dealt with by the law, but don't begrudge his skills and training, they may really be more suited to a government agency than you think.
Wednesday, February 19, 2014
What's wrong with getting financial advice from a billionaire like Li Ka-shing ?
Lately, a translated article from Li Ka-Shing was being circulated on the Internet. Compared to the usual advice that some of the gurus were to provide, it's actually not bad. Li Ka-Shing comes across as a pretty progressive and modern person who has some down-to-earth advice for everyone.
You may judge for yourself by reading the article here :
http://mirror.e27.co/li-ka-shing-teaches-buy-car-house-5-years/
I'm not going to be like the rest of the Internet and talk about what a great article this is.
If you are a florist struggling after the World War in HK, following this advice will likely make you a billionaire. Otherwise, advice is advice. It should be judged by how many millionaires you can make with it. And as a previous shareholder who owned HPH Trust, I will not take anything that a seasoned businessman say without applying my own critical thinking skills to his ideas.
Here's my take :
a) 25% as start-up capital
Li Ka-Shing advocates putting aside 25% of one's income as start-up capital. Strangely, he does not advocate savings. The aim of this fund is to ultimately do a business. This belongs to the class of advice which worked for Li Ka-Shing but may not work for most average Joes. As a savings component, 25% is too low ( At least start at a ridiculous 50% so that every month of work earns a month of rest ).
Most people suck at business which explains why the high failure rate. In our current economic situation, businessmen need to contend with high labor costs and rents as well.
I think I would rather critically examine how LKS and Son actually make their money, which is to invest in toll-like investments and get tenants or broadband subscribers to pay to use their infrastructure. When these assets reach critical value, spin it off in SGX and sell it to Singapore investors, let them deal with port strikes and slower Chinese growth that come soon after divestment.
Start investing early to get the compounding engine in your 20s. If you come across a business idea which trumps your portfolio of real estate, manufacturing firms or toll businesses, then think about running a business.
You are more likely to succeed as a long-term investor, similarly you are more likely to fail in a small business.
b) 20% to pay for lunch with friends
20% is a crazy amount for net-working. Do make sure if this is done in Singapore, the person you are giving a treat to is not a government servant. I spent some time re-examining this advice and I wonder if there is a hidden meaning embedded in those words that can only be appreciated within the context of a Chinese regime. In a Chinese SAR like HK, you can definitely knock yourself out giving treats to supposedly 'useful' people. But in Singapore, it may be better to stick to a hawker centre or food-court and exchange knowledge and practical advice instead.
I would take this budget out completely and merge this into the savings budget. Instead, I will invite friends out to discuss the economy, business ideas, good investments and the latest books over $1 kopi-o.
c) 10% for travel and the broadening of horizons.
This is not such a bad idea, but can we travel as part of work ? During my younger days, I used leave to extend my travel so that I can see other parts of the world on company budget. Yes, I've not been to Disneyland, but I built outsourcing teams in KL and Bangalore. Anyway 10% of my savings when I was 25 would not get me beyond South-East Asia.
I would also bunch this budget into the investment budget. And when you are in your 20s, if you wanna recharge go to KL over the weekend.
d) When you are poor, spend money so that people can see it.
It is this advice that really rubbed me the wrong way. Some old folks may have this idea that you gotta fake it until you make it. In the good old days, people might take your word for it, just be a slick salesman. But these days, we live in a high-surveillance society. People will use social media to find out what you're really made of and verify your claims. It's also much harder to sell to a sophisticated web-savvy customer.
Showing off by using bright and expensive clothes may work in a Toastmasters competition, but when it comes to work, every bit of substance counts.
Don't believe me ? Google Richard Li and you will find that he regrets claiming that he had a Stanford degree but he dropped out.
I would say respect decorum when the need arises and dress to meet standards. You should also be consistent as to the kind of person you are regardless of whether you are rich or poor, otherwise, your friends who helped you in the past will say that you have changed.
In summary, I think LKS has shared good advice to many readers, but it's more fun to examine the context by which this advice holds true.
In a similar vein in Singapore, many multi-millionaire trainers exist to give advice to ordinary people. The advice should be assessed by looking at how useful it is to the ordinary folks and not judged solely by the wealth of the trainer.
You may judge for yourself by reading the article here :
http://mirror.e27.co/li-ka-shing-teaches-buy-car-house-5-years/
I'm not going to be like the rest of the Internet and talk about what a great article this is.
If you are a florist struggling after the World War in HK, following this advice will likely make you a billionaire. Otherwise, advice is advice. It should be judged by how many millionaires you can make with it. And as a previous shareholder who owned HPH Trust, I will not take anything that a seasoned businessman say without applying my own critical thinking skills to his ideas.
Here's my take :
a) 25% as start-up capital
Li Ka-Shing advocates putting aside 25% of one's income as start-up capital. Strangely, he does not advocate savings. The aim of this fund is to ultimately do a business. This belongs to the class of advice which worked for Li Ka-Shing but may not work for most average Joes. As a savings component, 25% is too low ( At least start at a ridiculous 50% so that every month of work earns a month of rest ).
Most people suck at business which explains why the high failure rate. In our current economic situation, businessmen need to contend with high labor costs and rents as well.
I think I would rather critically examine how LKS and Son actually make their money, which is to invest in toll-like investments and get tenants or broadband subscribers to pay to use their infrastructure. When these assets reach critical value, spin it off in SGX and sell it to Singapore investors, let them deal with port strikes and slower Chinese growth that come soon after divestment.
Start investing early to get the compounding engine in your 20s. If you come across a business idea which trumps your portfolio of real estate, manufacturing firms or toll businesses, then think about running a business.
You are more likely to succeed as a long-term investor, similarly you are more likely to fail in a small business.
b) 20% to pay for lunch with friends
20% is a crazy amount for net-working. Do make sure if this is done in Singapore, the person you are giving a treat to is not a government servant. I spent some time re-examining this advice and I wonder if there is a hidden meaning embedded in those words that can only be appreciated within the context of a Chinese regime. In a Chinese SAR like HK, you can definitely knock yourself out giving treats to supposedly 'useful' people. But in Singapore, it may be better to stick to a hawker centre or food-court and exchange knowledge and practical advice instead.
I would take this budget out completely and merge this into the savings budget. Instead, I will invite friends out to discuss the economy, business ideas, good investments and the latest books over $1 kopi-o.
c) 10% for travel and the broadening of horizons.
This is not such a bad idea, but can we travel as part of work ? During my younger days, I used leave to extend my travel so that I can see other parts of the world on company budget. Yes, I've not been to Disneyland, but I built outsourcing teams in KL and Bangalore. Anyway 10% of my savings when I was 25 would not get me beyond South-East Asia.
I would also bunch this budget into the investment budget. And when you are in your 20s, if you wanna recharge go to KL over the weekend.
d) When you are poor, spend money so that people can see it.
It is this advice that really rubbed me the wrong way. Some old folks may have this idea that you gotta fake it until you make it. In the good old days, people might take your word for it, just be a slick salesman. But these days, we live in a high-surveillance society. People will use social media to find out what you're really made of and verify your claims. It's also much harder to sell to a sophisticated web-savvy customer.
Showing off by using bright and expensive clothes may work in a Toastmasters competition, but when it comes to work, every bit of substance counts.
Don't believe me ? Google Richard Li and you will find that he regrets claiming that he had a Stanford degree but he dropped out.
I would say respect decorum when the need arises and dress to meet standards. You should also be consistent as to the kind of person you are regardless of whether you are rich or poor, otherwise, your friends who helped you in the past will say that you have changed.
In summary, I think LKS has shared good advice to many readers, but it's more fun to examine the context by which this advice holds true.
In a similar vein in Singapore, many multi-millionaire trainers exist to give advice to ordinary people. The advice should be assessed by looking at how useful it is to the ordinary folks and not judged solely by the wealth of the trainer.
Friday, February 14, 2014
What single dudes can learn from the Investment masters on Valentine's day !
There are many parallel's between finding a perfect portfolio and searching for a good spouse.
On Valentine's day, let's look at at some concepts in investing which can be easily translated into the realm of Love and Romance.
a) You need to know what you want.
In fundamental analysis, some investors search for value stocks and some go for growth stocks with a great story. Similarly, you need to have an idea of what kind of girl would suit you in a relationship. Not spending time thinking about this problem will result in having needs which only a few women can fulfill on planet Earth, i.e. you might end up wanting a decent and conservative girl that will whip you silly and rock your world in bed.
A growth stock is like the hot, tanned chick in a bikini who pole dances and can show you her hidden tattoo if you are nice to her. A value stock is like a beautiful girl who loves playing with children and who is courteous to your parents and gentle with you. Some people go for growth, others, go for value.
b) You need go to the right place to find that special someone
Once you know the kind the stock you are looking for, you need to set up a screen to filter through the universe of stocks in SGX. Value investors go for low P/B, P/S, P/E with high free cash flow and dividend yield. Growth investors go for the consistent growth in revenues and EPS for the past 5 years and a story to sustain that momentum.
Similarly, conscientious girls are best found in schools and the accounting department in the workplace. If you want someone fun and outgoing, you can always go for dance classes. Don't go to a venue to find a particular type of girl that generally does not exist there. I could be proven wrong, but I doubt you can easily find a conservative and gentle mother for your children if your hunting ground is in China Black.( Note : I know there's no more China Black but you get the picture. )
c) Getting a wingman or a male friend to comment on someone who is your potential target.
Sometimes it's hard to understand why a stock is being sold as a bargain. Maybe there is forex risk. The company may be losing out to an innovative upstart. Or the stock belongs to a sunset industry. Reading the comments of a good financial blogger would give you an idea owning the stock is a good idea.
Similarly, perfectly good-looking women may be single in her late thirties. A wise guy will find out why this is so by probing her friends or doing some research. Maybe the hot-chick is tremendously neurotic or she is expensive to upkeep. The dating market can be as competitive as the finance market. Many good ones are already taken during University.
You need to find someone with a flaw that you can tolerate to be happy in this world.
d) Determine your appropriate level of commitment.
If you are just scoping the stock the first time, keep your exposure to a minimum at 1% of your portfolio. After a few quarters and some dividends later, you will have a keen idea of whether this stock is one to keep in your portfolio. You can increase your exposure to 5-10% if that is the case.
Similarly in dating, you should not be rash. When you first get to know someone, dating casually will do. A person who thinks like an investor will certainly not go for one night stands ( that's for the folks who play options ). Make sure that you really know someone and her family before you commit to a marriage or cohabitation.
So there you have it. By training yourself to be good at picking stocks, you will find that many techniques can be brought to other areas in your life.
Hope that you have a Happy Valentine's day and have found someone that you can truly buy-and-hold for the rest of your life.
On Valentine's day, let's look at at some concepts in investing which can be easily translated into the realm of Love and Romance.
a) You need to know what you want.
In fundamental analysis, some investors search for value stocks and some go for growth stocks with a great story. Similarly, you need to have an idea of what kind of girl would suit you in a relationship. Not spending time thinking about this problem will result in having needs which only a few women can fulfill on planet Earth, i.e. you might end up wanting a decent and conservative girl that will whip you silly and rock your world in bed.
A growth stock is like the hot, tanned chick in a bikini who pole dances and can show you her hidden tattoo if you are nice to her. A value stock is like a beautiful girl who loves playing with children and who is courteous to your parents and gentle with you. Some people go for growth, others, go for value.
b) You need go to the right place to find that special someone
Once you know the kind the stock you are looking for, you need to set up a screen to filter through the universe of stocks in SGX. Value investors go for low P/B, P/S, P/E with high free cash flow and dividend yield. Growth investors go for the consistent growth in revenues and EPS for the past 5 years and a story to sustain that momentum.
Similarly, conscientious girls are best found in schools and the accounting department in the workplace. If you want someone fun and outgoing, you can always go for dance classes. Don't go to a venue to find a particular type of girl that generally does not exist there. I could be proven wrong, but I doubt you can easily find a conservative and gentle mother for your children if your hunting ground is in China Black.( Note : I know there's no more China Black but you get the picture. )
c) Getting a wingman or a male friend to comment on someone who is your potential target.
Sometimes it's hard to understand why a stock is being sold as a bargain. Maybe there is forex risk. The company may be losing out to an innovative upstart. Or the stock belongs to a sunset industry. Reading the comments of a good financial blogger would give you an idea owning the stock is a good idea.
Similarly, perfectly good-looking women may be single in her late thirties. A wise guy will find out why this is so by probing her friends or doing some research. Maybe the hot-chick is tremendously neurotic or she is expensive to upkeep. The dating market can be as competitive as the finance market. Many good ones are already taken during University.
You need to find someone with a flaw that you can tolerate to be happy in this world.
d) Determine your appropriate level of commitment.
If you are just scoping the stock the first time, keep your exposure to a minimum at 1% of your portfolio. After a few quarters and some dividends later, you will have a keen idea of whether this stock is one to keep in your portfolio. You can increase your exposure to 5-10% if that is the case.
Similarly in dating, you should not be rash. When you first get to know someone, dating casually will do. A person who thinks like an investor will certainly not go for one night stands ( that's for the folks who play options ). Make sure that you really know someone and her family before you commit to a marriage or cohabitation.
So there you have it. By training yourself to be good at picking stocks, you will find that many techniques can be brought to other areas in your life.
Hope that you have a Happy Valentine's day and have found someone that you can truly buy-and-hold for the rest of your life.
Wednesday, February 12, 2014
What Streetfighter II has taught me about finance.
For the past week, I've been trying to game the Bloomberg machines at the Central Library. Patrons are limited to 1 hour of use per day. This really reminds me of the time I had to queue for a Streetfighter II machine at the NCO club which was next to Raffles City about 20 years ago.
Time flies, but some things ever change. My Blanka would not last every long against the kids and Bengs who were very good at the game. Similarly, the Blooomberg machine has shed some harsh truths about the various investment strategies used by fundamental analysts.
My objective for getting the Bloomberg machine is to first myself in its use and then to see if I can derive some interesting insight on Singapore markets.
As I'm still pretty new at Bloomberg, I was able to use the stock filters and do some back-testing on local stocks. Try not to use some of the results I present here as investment advice but possibly as something which can lead to better insights on fundamental analysis in the future.
All numbers take the top 10% percentile of stocks in the Singapore universe. Portfolio is equally weighted among different stocks and rebalanced annually and backtested over 10 years.
Lowest P/B ratio gave mean return of 42.79% with standard deviation of 20.46%
Lowest P/S ratio gave mean return of 38.51% with standard deviation of 22%
Lowest P/FCF ratio gave mean return of 30.57% with standard deviation of 19.75%
Lowest P/E ratio gave mean return of 29.05 with standard deviation of 19.43%
Highest dividend yield gave mean return of 23.37% with standard deviation of 15.02%
Highest dividend growth over 5 years gave mean return of 16.67% with standard deviation of 16.66%.
Highest ROIC gave mean return of 19.59% with standard deviation of 18.84%
Here's the best part, if you design an equally weighted portfolio of Singapore stocks you will get a mean return of 32% with a standard deviation of 20.06%
The only decent conclusion so far is that an equally weighted portfolio would result in a fairly decent performance against other strategies which includes my favorite high yield strategy ( which has merit only because of it's low volatility ).
Over the next few weeks, I will be refining my filters to cover multiple criteria and expanding my backtest to cover 20% percentile of stocks since employing only 10% of the universe results in a higher volatility.
Time flies, but some things ever change. My Blanka would not last every long against the kids and Bengs who were very good at the game. Similarly, the Blooomberg machine has shed some harsh truths about the various investment strategies used by fundamental analysts.
My objective for getting the Bloomberg machine is to first myself in its use and then to see if I can derive some interesting insight on Singapore markets.
As I'm still pretty new at Bloomberg, I was able to use the stock filters and do some back-testing on local stocks. Try not to use some of the results I present here as investment advice but possibly as something which can lead to better insights on fundamental analysis in the future.
All numbers take the top 10% percentile of stocks in the Singapore universe. Portfolio is equally weighted among different stocks and rebalanced annually and backtested over 10 years.
Lowest P/B ratio gave mean return of 42.79% with standard deviation of 20.46%
Lowest P/S ratio gave mean return of 38.51% with standard deviation of 22%
Lowest P/FCF ratio gave mean return of 30.57% with standard deviation of 19.75%
Lowest P/E ratio gave mean return of 29.05 with standard deviation of 19.43%
Highest dividend yield gave mean return of 23.37% with standard deviation of 15.02%
Highest dividend growth over 5 years gave mean return of 16.67% with standard deviation of 16.66%.
Highest ROIC gave mean return of 19.59% with standard deviation of 18.84%
Here's the best part, if you design an equally weighted portfolio of Singapore stocks you will get a mean return of 32% with a standard deviation of 20.06%
The only decent conclusion so far is that an equally weighted portfolio would result in a fairly decent performance against other strategies which includes my favorite high yield strategy ( which has merit only because of it's low volatility ).
Over the next few weeks, I will be refining my filters to cover multiple criteria and expanding my backtest to cover 20% percentile of stocks since employing only 10% of the universe results in a higher volatility.
Friday, February 07, 2014
Why Malaysian Chinese already rule Singapore ?
In case you might be thinking that I'm pulling yet another Adam Khoo...
Happy Chinese New Year !!!!
Singaporeans with a Malaysian background already dominate many spheres in Singapore. Our nation has grown from the brain gain that we have received from their ethnic Chinese population.
Khaw Boon Wan ,our National Development minister, came from Penang and should recently be congratulated for reducing COV to about $5,000.
Olivia Lum, founder of Hyflux, started out the in sleepy Malaysian town of Kampar and is responsible for the creation of many local jobs in Singapore today.
According to The Triple Package by Amy Chua of the Tiger Mother fame, Malaysian Chinese form an ethnic group which I think has the same traits as many successful American immigrants today.
Let's examine each component of this Triple Package :
a) Sense of Superiority
We can say that Malaysian Chinese do have a sense of superiority. While it is'nt targetted towards Singaporeans, I would say that they feel very much persecuted at home and denied many privileges back in Malaysia. Many could have done well in the Universities in the north but are very much better off studying here where their merits can be recognised in our country. The sense of superiority would be directed back to their homeland where they feel that they are still doing well economically despite being constantly forced to function with a handicap.
b) Insecurity
Although Malaysians do integrate well in Singapore compared to other foreign talent. It would be naive to think that they do not suffer from some scorn within Singaporean society today. Some Singaporean Chinese complain that they speak Mandarin with a strong accent, and many are disadvantaged in the workplace due to poorer English. Any group which faces scorn or a drop in status will develop a chip on the shoulder so I would think that naturally many Malaysian Chinese do want to prove themselves here. Not just to the meaner Singaporeans they face at work but also to their fellow citizens back home.
c) Impulse Control
Immigrant populations come built-in with a lot of impulse control. Imagine the life the Malaysian student in Senai, who has to wake up at 4.30am to attend a Junior College in Singapore. He probably spends 3-4 hours travelling. He does that because he thinks that a Singaporean education is a ticket to a better future. That kind of willpower and conscientiousness simply cannot be imagined if you are a local. As it often happens on the ground, Singaporeans still do better in school and do well in academic scores, but I bet Malaysian Chinese may do better over the long run because a difficult lifestyle also means more opportunities to develop resilience and grit.
So, what this all mean for us Singaporeans ?
I won't want spread any fear about Malaysian Chinese, half my family is Malaysian, my daughter practically grows up in Johor as well. I also consider the brain gain from Malaysian a primary reason why we are an economic miracle today in South East Asia.
Here's what I think :
a) The advantages of being Malaysian Chinese will not last one generation.
The main reason is that we are not too bad and remain largely kiasu. We already work the longest hours in the world.
Unlike the US, Singaporeans of all races would rank pretty highly with the Triple Package. Singaporean parents always think that their kids are the best and very much more neurotic than our ASEAN neighbours. The kids of Malaysian Chinese are likely to grow up Singaporean and will adopt our values and weaknesses. They will not have the fighting spirit of their parents. Many will end up requiring Adam Khoo's services like Singaporean kids these days.
b) Policy considerations should be made to keep Singaporeans and the country "Insecure" and conscientious.
The Triple Package may have policy implications.
Singaporeans have been recently asking for too many populist measures from the Government. We already have a fairly good healthcare and social security system.
But some changes do bother me like taking out the t-score for PSLE. Why do we want to make our future generations less competitive ? I think the West gets it wrong, we need to master something before we should be given any self-esteem. The worse thing for Singapore is that our children think that they are really smart but get rolled over by harder working students in China who are better at handling stress.
Stress is necessary for the building of character. Introduce a t-score for University entrance.
I would'nt want to get into the welfare or minimum wage debate but it's quite clear where I stand on this debate.
c) Fight the Philistine culture
The rise of a materialistic philistine culture is also something we need to guard against. My observation of the Singapore middle class is that as hardworking as it is, it has never developed a culture of intellectualism. Even intelligent Singaporeans do not focus on ideas, they focus on material goods and things. There are over 400 Maseratis in Singapore but not a single Nobel prize.
Impulse control is cultivated by a culture which promotes Intellectualism as you need patience and dedication to develop a philosophy and outlook on life. The Patek Phillipe watch just needs a bank loan.
And we've chosen the quick fix as a way to measure status in our society.
Happy Chinese New Year !!!!
Singaporeans with a Malaysian background already dominate many spheres in Singapore. Our nation has grown from the brain gain that we have received from their ethnic Chinese population.
Khaw Boon Wan ,our National Development minister, came from Penang and should recently be congratulated for reducing COV to about $5,000.
Olivia Lum, founder of Hyflux, started out the in sleepy Malaysian town of Kampar and is responsible for the creation of many local jobs in Singapore today.
According to The Triple Package by Amy Chua of the Tiger Mother fame, Malaysian Chinese form an ethnic group which I think has the same traits as many successful American immigrants today.
Let's examine each component of this Triple Package :
a) Sense of Superiority
We can say that Malaysian Chinese do have a sense of superiority. While it is'nt targetted towards Singaporeans, I would say that they feel very much persecuted at home and denied many privileges back in Malaysia. Many could have done well in the Universities in the north but are very much better off studying here where their merits can be recognised in our country. The sense of superiority would be directed back to their homeland where they feel that they are still doing well economically despite being constantly forced to function with a handicap.
b) Insecurity
Although Malaysians do integrate well in Singapore compared to other foreign talent. It would be naive to think that they do not suffer from some scorn within Singaporean society today. Some Singaporean Chinese complain that they speak Mandarin with a strong accent, and many are disadvantaged in the workplace due to poorer English. Any group which faces scorn or a drop in status will develop a chip on the shoulder so I would think that naturally many Malaysian Chinese do want to prove themselves here. Not just to the meaner Singaporeans they face at work but also to their fellow citizens back home.
c) Impulse Control
Immigrant populations come built-in with a lot of impulse control. Imagine the life the Malaysian student in Senai, who has to wake up at 4.30am to attend a Junior College in Singapore. He probably spends 3-4 hours travelling. He does that because he thinks that a Singaporean education is a ticket to a better future. That kind of willpower and conscientiousness simply cannot be imagined if you are a local. As it often happens on the ground, Singaporeans still do better in school and do well in academic scores, but I bet Malaysian Chinese may do better over the long run because a difficult lifestyle also means more opportunities to develop resilience and grit.
So, what this all mean for us Singaporeans ?
I won't want spread any fear about Malaysian Chinese, half my family is Malaysian, my daughter practically grows up in Johor as well. I also consider the brain gain from Malaysian a primary reason why we are an economic miracle today in South East Asia.
Here's what I think :
a) The advantages of being Malaysian Chinese will not last one generation.
The main reason is that we are not too bad and remain largely kiasu. We already work the longest hours in the world.
Unlike the US, Singaporeans of all races would rank pretty highly with the Triple Package. Singaporean parents always think that their kids are the best and very much more neurotic than our ASEAN neighbours. The kids of Malaysian Chinese are likely to grow up Singaporean and will adopt our values and weaknesses. They will not have the fighting spirit of their parents. Many will end up requiring Adam Khoo's services like Singaporean kids these days.
b) Policy considerations should be made to keep Singaporeans and the country "Insecure" and conscientious.
The Triple Package may have policy implications.
Singaporeans have been recently asking for too many populist measures from the Government. We already have a fairly good healthcare and social security system.
But some changes do bother me like taking out the t-score for PSLE. Why do we want to make our future generations less competitive ? I think the West gets it wrong, we need to master something before we should be given any self-esteem. The worse thing for Singapore is that our children think that they are really smart but get rolled over by harder working students in China who are better at handling stress.
Stress is necessary for the building of character. Introduce a t-score for University entrance.
I would'nt want to get into the welfare or minimum wage debate but it's quite clear where I stand on this debate.
c) Fight the Philistine culture
The rise of a materialistic philistine culture is also something we need to guard against. My observation of the Singapore middle class is that as hardworking as it is, it has never developed a culture of intellectualism. Even intelligent Singaporeans do not focus on ideas, they focus on material goods and things. There are over 400 Maseratis in Singapore but not a single Nobel prize.
Impulse control is cultivated by a culture which promotes Intellectualism as you need patience and dedication to develop a philosophy and outlook on life. The Patek Phillipe watch just needs a bank loan.
And we've chosen the quick fix as a way to measure status in our society.
Tuesday, January 28, 2014
Influence of Dungeons & Dragons on my investment style.
The daddy of all role-playing games has turned 40 lately.
I'd just like to share the influence Dungeons & Dragons have on my life.
I picked up D&D when I was 10. I started out with the D&D Action figures by LJN ( I used to have Warduke the Fighter and Strongheart the Paladin ) and was told by a senior in my primary school that there's such a thing as a role-playing game. Being a spoiled brat that I was when I was a kid, I was able to got to a place called Leisure Craft at Orchard Point to buy the 1st Edition Player's Handbook ( Yes, I started with AD&D, BECMI is for wusses ). It took me a while to really understand the system and I was only able to start DMing a game for my classmates a year later ( I think it was a Dragonlance module ).
Here's what D&D taught me :
a) Delayed gratification can get you anything you want.
I remember when Oriental Adventures came out, Leisure Craft charged a whopping $32 a copy. Even though I was a spoiled brat who had $15 pocket money a week, I had to starve myself for 3 weeks before I could get it.
I think this trained my willpower to delay my spending. At my current stage, I can delay gratification for decades.
b) Arbitrage and Securitization is awesome.
I remember trying to get hold of a Dungeon Master's guide was problematic as I already had the Player's handbook, Unearthed Arcana and the Monster Manual. I suddenly has a bright idea.
My dad's friend who was an old coot, collects copies of Playboy magazine. Somehow, being a corrupt kid, I asked him and he give me a copy because I was curious about human sexuality. My idea was to cut out pictures of the nudes and I sold them individually to kids from Whitley Secondary school (which as next door to my secondary school). I remember getting $15 for a pic of Madonna ( yeah, she did porn ! ) I think my senior in St Johns caught me making the trade but thankfully nobody reported me.
At the tender age of 13, I was able to make a riskless gain (arbitrage) by splitting an asset in multiple components ( securitization ). If I was'nt caught by my uniformed group, I think I would be with Goldman Sachs today.
Of course, on hindsight, vintage pics of Madonna naked would be worth a lot more $15 these days. But what's a naked picture of Madonna compared to brilliance which was the 1st Edition Dungeon Master's Guide ?
NB: And that senior who caught me might have become an auditor, go figure.
c) All the advanced maths and vocabulary for the SATs at the age of 10
D&D is not a game for dumb kids. I learnt about the bell curve from the DMG and basic probability from rolling polyhedral dice. By the time I did my SATs during my JC days, I was able to get 96+% for my SAT Verbals. Needless to say, having advanced mathematics allowed me to ace my S papers and even got to an IT Olympiad training team.
Eventually, maths was critical to passing CFA 2.
d) Dividends investing
I was instinctively able to grasp dividends investing because of D&D trolls. You see, trolls are monsters who regenerate. If you strike a troll and did less damage than its regeneration, it is the same as not doing dmaage to it. I always thought that trolls would particularly like getting dividends because if the incoming cashflow exceeds the damage or your expenses, you will never be defeated by the monster called Modern Living.
Just be careful of fire or acid attacks.
e) What the rules did not explicitly say that you can't do.
The most important lesson I learnt from D&D was much later during my JC days. I joined a group of pretty insane players and there were all sort of crazy RPG antics which was suited to a different kind of blog. One wizard Stoned to Flesh dungeon walls, fireballed the flesh and told the fighters to eat their way through their rooms. He also cast an Item spell on various undead creatures to shrink them into a cloth-like state and threw the resulting "skeleton-dolls" on party enemies. The druid fire-trapped his mouth and bit his enemies. The fighter has boots of flying and attacked monsters by dropping a Daern's Instant Fortress (10d10 damage, like Mjolnir ) on them.
In between game sessions, my fellow players told me that one way to play D&D is to simply follow the rules. But they played the game differently. They did things which were not explicitly prohibited by the rules. Very often, they interpreted the rules in hilarious ways. ( eg. Any closeable item can be firetrapped. A mouth is a closeable item. )
My DM called them rules-rapists, they went further than any rules lawyer from other RPG groups.
I think playing D&D with this group had the most profound influence on my life.
- There is no law in Singapore that say that Engineer's can't write a bestselling non-fictional work.
- There is no law in Singapore that say that you can't create a perpetual cashflow to replace your living expenses.
- There is no law against 8.5% portfolio if your risk appetite can handle it.
- There is no law against reinvesting 150% of earned income to ramp up your cash flow.
- There is no law that says that you can't work and earn one income and supplement your expenses from another source of cash flow.
- There is no law in Singapore that say that you can quit the rat race at 39 to reinvent yourself.
Friday, January 24, 2014
Thank you Mr.15hourworkweek !
Sometimes, the effectiveness of one's writings and financial ideas should best be explained by a reader.
This blogger read my first book, took my $100,000 challenge, and completed it before the age of 28.
He now runs a much more successful blog.
http://www.my15hourworkweek.com/2014/01/23/growing-my-tree-of-prosperity/
Note : My books are no longer on sale at local bookstores. You can buy it from me by writing to me at chrisngwaichung@hotmail.com. In a few week's time I will open an e-commerce website to sell my remaining stock.
This blogger read my first book, took my $100,000 challenge, and completed it before the age of 28.
He now runs a much more successful blog.
http://www.my15hourworkweek.com/2014/01/23/growing-my-tree-of-prosperity/
Note : My books are no longer on sale at local bookstores. You can buy it from me by writing to me at chrisngwaichung@hotmail.com. In a few week's time I will open an e-commerce website to sell my remaining stock.
Thursday, January 23, 2014
Dun Pretend - Outcomes matter.
Another interesting insight from the Harvard Grant Study is what's NOT a significant contributing factor for longevity ( Living beyond 85 ) was found to be as follows :
In fact, having an advanced degree or a happy childhood is a greater contributing factor to attain longevity.
But I just came back from a run. I ran for about 30 minutes because I had developed a headache after 3 hours of statistical programming with R. Running produces endorphins which can eliminate headaches.
There are other reasons why I run and have one fibre meal a day, my blood sugar control is poor and medication is no longer sufficient to keep things in control. If my condition gets worse, I will develop a vascular problem which will eventually affect my chances of living to 85. ( Three vascular conditions and I am not expected to see my 70th birthday )
Exercise is an area in my life that I'm pretty sure I know why I do what I do.
In other areas, I am less confident of the outcome I want.
I now have the means to retire, but at this point of time, I am as busy as before trying to pick up all the latest technologies I missed out while I was working. The outcome I want is still unknown.
Some people run to deal with boredom. That's a valid outcome but there are better ways of dealing with that. Others run because they want to look good, although I think that requires much more vigorous exercises.
The key takeaway is that if you want to do anything, know what of outcome you want to achieve. The thing that you do, might not be significant in meeting your objective over a long run.
- Low cholesterol.
- Heavy exercise.
- Lack of obesity.
In fact, having an advanced degree or a happy childhood is a greater contributing factor to attain longevity.
But I just came back from a run. I ran for about 30 minutes because I had developed a headache after 3 hours of statistical programming with R. Running produces endorphins which can eliminate headaches.
There are other reasons why I run and have one fibre meal a day, my blood sugar control is poor and medication is no longer sufficient to keep things in control. If my condition gets worse, I will develop a vascular problem which will eventually affect my chances of living to 85. ( Three vascular conditions and I am not expected to see my 70th birthday )
Exercise is an area in my life that I'm pretty sure I know why I do what I do.
In other areas, I am less confident of the outcome I want.
I now have the means to retire, but at this point of time, I am as busy as before trying to pick up all the latest technologies I missed out while I was working. The outcome I want is still unknown.
Some people run to deal with boredom. That's a valid outcome but there are better ways of dealing with that. Others run because they want to look good, although I think that requires much more vigorous exercises.
The key takeaway is that if you want to do anything, know what of outcome you want to achieve. The thing that you do, might not be significant in meeting your objective over a long run.
Tuesday, January 21, 2014
If Life is a board game, here are the victory conditions.
As an extremely competitive person at school and at work, I have been criticized for treating my real life as a game.
Engaging in gaming behaviour means that you live you life to win. Because we live in a modern society where no one has any incentive to tell you the rules of how to live your life, I've made up my own victory conditions. ( D&D players do a lot of that )
In school, my objective was a First Class Honors with the highest possible ECA record that I could reasonably attain. Much later at work, I basically just kept count of my dollars and wanted to be the first to have my investment income exceed my earned income. There were all sorts of other victory conditions I made up for myself like start a family, get an advanced degree, take the largest number of exams in a given year while holding a full time job ( I think I hit 21 in 2003, dunno why I bothered ).
Well, apparantly, it looks like I might not be playing it right.
In the book Triumphs of Experience : The Men of the Harvard Grant Study has an interesting set of outcomes that denotes a flourishing state.
I think these sets of rules are a balanced set of victory conditions for the Game of Life.
Here is the list. Score one point if you achieve anyone of this when you reach 85 :
a) Included in Who's Who in America. ( I wonder what's the equivalent here )
b) Earning income in the Study's top quartile ( Household income is about $13,000 in 2012 / $4,000 per member in SG although the original study targeted high flyers. )
c) Low in psychological distress.
d) Success and enjoyment in work, love and play since age 65.
e) Good subjective health at 75.
f) Good subjective and objective physical and mental health at 80.
g) Mastery of Ericksonion task of Generativity ( You can nurture and empathize with an adolescent or child who is unrelated to you. )
h) Availability of social support other than wife and kids between ages 60 and 75.
i) Good marriage between 60 and 85.
j) Close to kids between ages 60 and 75.
I think overall these are very balanced victory conditions compared to what Asian society heaps on us (I'm quite glad that a Porsche and a Patek Philipe watch is not in this list ). Most people score 3 on this list. If you can score 5 and above it means that you've lived quite a good life.
Looks like I'll be thinking up ways to change my style of living moving forward.,
Engaging in gaming behaviour means that you live you life to win. Because we live in a modern society where no one has any incentive to tell you the rules of how to live your life, I've made up my own victory conditions. ( D&D players do a lot of that )
In school, my objective was a First Class Honors with the highest possible ECA record that I could reasonably attain. Much later at work, I basically just kept count of my dollars and wanted to be the first to have my investment income exceed my earned income. There were all sorts of other victory conditions I made up for myself like start a family, get an advanced degree, take the largest number of exams in a given year while holding a full time job ( I think I hit 21 in 2003, dunno why I bothered ).
Well, apparantly, it looks like I might not be playing it right.
In the book Triumphs of Experience : The Men of the Harvard Grant Study has an interesting set of outcomes that denotes a flourishing state.
I think these sets of rules are a balanced set of victory conditions for the Game of Life.
Here is the list. Score one point if you achieve anyone of this when you reach 85 :
a) Included in Who's Who in America. ( I wonder what's the equivalent here )
b) Earning income in the Study's top quartile ( Household income is about $13,000 in 2012 / $4,000 per member in SG although the original study targeted high flyers. )
c) Low in psychological distress.
d) Success and enjoyment in work, love and play since age 65.
e) Good subjective health at 75.
f) Good subjective and objective physical and mental health at 80.
g) Mastery of Ericksonion task of Generativity ( You can nurture and empathize with an adolescent or child who is unrelated to you. )
h) Availability of social support other than wife and kids between ages 60 and 75.
i) Good marriage between 60 and 85.
j) Close to kids between ages 60 and 75.
I think overall these are very balanced victory conditions compared to what Asian society heaps on us (I'm quite glad that a Porsche and a Patek Philipe watch is not in this list ). Most people score 3 on this list. If you can score 5 and above it means that you've lived quite a good life.
Looks like I'll be thinking up ways to change my style of living moving forward.,
Saturday, January 18, 2014
Systems vs Goals - Lessons from Scott Adams.
Scott Adams' How to Fail at almost everything and Still Win Big is a book which puts him ahead as a self-help author. His book is chock-full of good, realistic and down to earth advice which is relevant for American and International audiences.
I'm only going to discuss one important lesson from the creator of Dilbert.
Systems trump Goals.
This is a very unique and interesting idea.
Scott proposes that goals are not as good as systems. Goals are a one-shot objective. The guys who take my $300,000 oath will position their goals as follows - Save $300,000 or never get married. The limitation of such goals is that while the goal is not achieved, you are considered a failure ( and you remain celibate, tough luck). After a goal is achieved, you experience a moment of triumph but the goal ceases to exist, and you lose a source of motivation..
Systems are superior to goals. A system is action-based and not outcome-based, although actions are keyed to meet certain outcomes. A system succeeds the moment you execute on it and rewards you with a high when you execute it properly regardless of outcome.
Guys who want to take my $300,000 oath should create a system which works for them such as :
a) Limit expenses to $300 a week.
b) Save 80% of earned income to a portfolio of REITs and stocks which yield at least 8% with sustainable free cash flow.
c) Farm the entire bonus into the stock market.
d) Farm all increments into the stock market.
e) Ignore market sentiment and keep searching for counters which meet this criteria. ( They are quite hard to find )
f) Date casually and look for a life partner in a school or place of personal development. Ask at least 2 girls out for a date in these environment.
g) Eschew single bars, salsa classes, hipster cafes or areas of frivolous pursuits as these places may not yield the proper life partner.
Once a system is created, every cycle ensures that you will get closer to your final objective. You succeed every month when you can farm 80% into the stock market. You also give yourself a pat on the back whenever you meet someone in a writing/ accounting/ finance/ language class. While the system may not get you to $300,000, if you can sustain this over a few years, it will improve your net worth substantially.
You may even like this system so much, you can carry on with it even after meeting your target. ( But you should'nt carry on dating different women after marriage, not good for your health. )
I'm only going to discuss one important lesson from the creator of Dilbert.
Systems trump Goals.
This is a very unique and interesting idea.
Scott proposes that goals are not as good as systems. Goals are a one-shot objective. The guys who take my $300,000 oath will position their goals as follows - Save $300,000 or never get married. The limitation of such goals is that while the goal is not achieved, you are considered a failure ( and you remain celibate, tough luck). After a goal is achieved, you experience a moment of triumph but the goal ceases to exist, and you lose a source of motivation..
Systems are superior to goals. A system is action-based and not outcome-based, although actions are keyed to meet certain outcomes. A system succeeds the moment you execute on it and rewards you with a high when you execute it properly regardless of outcome.
Guys who want to take my $300,000 oath should create a system which works for them such as :
a) Limit expenses to $300 a week.
b) Save 80% of earned income to a portfolio of REITs and stocks which yield at least 8% with sustainable free cash flow.
c) Farm the entire bonus into the stock market.
d) Farm all increments into the stock market.
e) Ignore market sentiment and keep searching for counters which meet this criteria. ( They are quite hard to find )
f) Date casually and look for a life partner in a school or place of personal development. Ask at least 2 girls out for a date in these environment.
g) Eschew single bars, salsa classes, hipster cafes or areas of frivolous pursuits as these places may not yield the proper life partner.
Once a system is created, every cycle ensures that you will get closer to your final objective. You succeed every month when you can farm 80% into the stock market. You also give yourself a pat on the back whenever you meet someone in a writing/ accounting/ finance/ language class. While the system may not get you to $300,000, if you can sustain this over a few years, it will improve your net worth substantially.
You may even like this system so much, you can carry on with it even after meeting your target. ( But you should'nt carry on dating different women after marriage, not good for your health. )
Wednesday, January 15, 2014
The mouth speaks, the testicles feel good : The Power of Negative Predictions.
Recently the Government refuted an article that predicts the Singapore economy going along the same way as Iceland as it crashes due to the various bubbles which are already forming right now as we speak. I was asked for my opinion as to whether the situation might actually come true.
My basic answer is - I don't know. But having spent some time in the public sector, I am confident that the government will react to this prediction. As to whether the government overreacts ( I am always inclined to think that they do, given my personal experience ), the jury is still out. I am inclined to think that MAS has acted years before the article to start cooling the property market.
But my blog is not so much about the greater economy but about what, at a micro-level, people can act when faced with a similar situation.
Similar to Philistines are a class a fellow citizens that many of us are not particularly inclined to hang out with.
These are folks who are full of negative predictions.
You know these guys, if you are studying for an exam, they will predict that you'll get a C-. If you participate in an ECA, they will say that it is not of practical use in the workplace. Because we are such a competition society, some people think that by predicting a negative outcome on something, another person can be brought down a few rungs.
As the Hokkien saying goes "Chui3 Gong4 Lam3 Par1 Song4" - The mouth speaks, the testicles feel good.
According to these very insecure people, making a negative prediction does not incur a cost, if you do actually fail, they get to say "I told you so."
Let me tell you a little secret ?
I love negative predictions.
They are the fundamental building blocks of my success. A negative prediction let you prepare for failure. They allow the person to do another reality check on their goals and ambitions. Perhaps you did not account for time management when you signed up for more public speaking. Did you back-test your portfolio strategy before you invested your hard earned cash ?
To sweeten the pay-off, the negative predictor will eat his words if you succeed, that is a very powerful motivation for me. You should make it a point to exult in your triumph against such folks, nothing psychically damages them as much as your personal success.
For me, the flabbergasted look from a frenemy is the most beautiful thing to behold. I think it feels better than seeing Serina Wee.
Of course, since we live in a very competitive Asian society, you will never defeat all of these people. Their faces changes but you will always have people who will predict your next big failed attempt to do something. But I think a large part of personal success comes from confronting your critics and making each feedback personal.
You need to get angry and personal over things if you want to be significant in any pursuit.
For a guy who has set-up a family, built a career to retire before 40, I still get plenty of negative predictions in my current state.
a) People predict boredom in early retirement.
That's what enrolling in an online University is all about.There are multiple projects in the pipeline ( many involve programming ) and the escape plan to pick up part-time work in 6 months if "retirement" does not pan out. I can always write my next book, and I've not even started calling our all those friends on FB for lunch.
b) Some people think I will gain weight
To prevent that I am eating less and introducing one fibre meal a day. I am also targeting to exercise everyday. Without a day job, your willpower reserves can be channeled completely into keeping healthy.
c) Increase in interest rates will drive me out of retirement.
No one said this to me yet, so I conjured an inner critic and made this one up. All investors will need to monitor their interest rates. If it goes up, not only will it impact your mortgage payments, your REITs will have to channel their rental income into their loan payments. You'll be hit by NAV loss and lower investment income. The way out of this is a day job some exploration of part-time options will take place once I get a good rest.
My basic answer is - I don't know. But having spent some time in the public sector, I am confident that the government will react to this prediction. As to whether the government overreacts ( I am always inclined to think that they do, given my personal experience ), the jury is still out. I am inclined to think that MAS has acted years before the article to start cooling the property market.
But my blog is not so much about the greater economy but about what, at a micro-level, people can act when faced with a similar situation.
Similar to Philistines are a class a fellow citizens that many of us are not particularly inclined to hang out with.
These are folks who are full of negative predictions.
You know these guys, if you are studying for an exam, they will predict that you'll get a C-. If you participate in an ECA, they will say that it is not of practical use in the workplace. Because we are such a competition society, some people think that by predicting a negative outcome on something, another person can be brought down a few rungs.
As the Hokkien saying goes "Chui3 Gong4 Lam3 Par1 Song4" - The mouth speaks, the testicles feel good.
According to these very insecure people, making a negative prediction does not incur a cost, if you do actually fail, they get to say "I told you so."
Let me tell you a little secret ?
I love negative predictions.
They are the fundamental building blocks of my success. A negative prediction let you prepare for failure. They allow the person to do another reality check on their goals and ambitions. Perhaps you did not account for time management when you signed up for more public speaking. Did you back-test your portfolio strategy before you invested your hard earned cash ?
To sweeten the pay-off, the negative predictor will eat his words if you succeed, that is a very powerful motivation for me. You should make it a point to exult in your triumph against such folks, nothing psychically damages them as much as your personal success.
For me, the flabbergasted look from a frenemy is the most beautiful thing to behold. I think it feels better than seeing Serina Wee.
Of course, since we live in a very competitive Asian society, you will never defeat all of these people. Their faces changes but you will always have people who will predict your next big failed attempt to do something. But I think a large part of personal success comes from confronting your critics and making each feedback personal.
You need to get angry and personal over things if you want to be significant in any pursuit.
For a guy who has set-up a family, built a career to retire before 40, I still get plenty of negative predictions in my current state.
a) People predict boredom in early retirement.
That's what enrolling in an online University is all about.There are multiple projects in the pipeline ( many involve programming ) and the escape plan to pick up part-time work in 6 months if "retirement" does not pan out. I can always write my next book, and I've not even started calling our all those friends on FB for lunch.
b) Some people think I will gain weight
To prevent that I am eating less and introducing one fibre meal a day. I am also targeting to exercise everyday. Without a day job, your willpower reserves can be channeled completely into keeping healthy.
c) Increase in interest rates will drive me out of retirement.
No one said this to me yet, so I conjured an inner critic and made this one up. All investors will need to monitor their interest rates. If it goes up, not only will it impact your mortgage payments, your REITs will have to channel their rental income into their loan payments. You'll be hit by NAV loss and lower investment income. The way out of this is a day job some exploration of part-time options will take place once I get a good rest.
Monday, January 13, 2014
Wanna retire early ? Don't be a Philistine !
I was trying to find the perfect word to explain why despite living in one of the friendliest tax regimes on Planet Earth, many Singaporeans still struggle with modern serfdom.
This word is Philistine.
Singapore is full of Philistines.
The Merriam-Webster dictionary defines it as follows :
a : a person who is guided by materialism and is usually disdainful of intellectual or artistic values
b : one uninformed in a special area of knowledge
Philistines are everywhere in Singapore. These are the folks who get upset when someone else buys a car or goes on a holiday. Of course, they will eagerly buy a car or go on a holiday once they get the funds to do so, often with the aim of inflicting psychic damage on fellow Philistines.
Generally speaking, local Philistines do not contribute to the knowledge economy, money is largely made by hustling, which explains the disdain for intellectual values. They are also too lazy to develop any special area of knowledge.
But interestingly enough, Philistines are not dumb - anyone who knows their brands well can't possibly be stupid.
Philistines miss out on two key things when it comes to personal finance:
a) The pursuit of material goods reduces your financial capital which allows you to escape from the rat-race.
b) It is intellectual pursuits which provide the knowledge to really thrive in this economy. i.e. The jury is still out on how Big Data will revolutionize business functions like sales, marketing or HR.
Even though I am retired, I generally don't give a hoot about the guy who drives a BMW and wears a Patek Phillipe. I actively discourage consumerism, although as an investor, I am like a vampire that feeds on the consumption by others.
Introduce to me a 40-something year old geek who understands MapReduce and can build his own Hadoop cluster and he will gain my envy and respect. I might even buy him a kopi to tap on his expertise.
My advice to folks who aim for early retirement is to eliminate your Philistine friends and start looking for intellectuals to replace them. It's easier to live a non-materialist life if you are surrounded by people who respect ideas more than material belongings.
This word is Philistine.
Singapore is full of Philistines.
The Merriam-Webster dictionary defines it as follows :
a : a person who is guided by materialism and is usually disdainful of intellectual or artistic values
b : one uninformed in a special area of knowledge
Philistines are everywhere in Singapore. These are the folks who get upset when someone else buys a car or goes on a holiday. Of course, they will eagerly buy a car or go on a holiday once they get the funds to do so, often with the aim of inflicting psychic damage on fellow Philistines.
Generally speaking, local Philistines do not contribute to the knowledge economy, money is largely made by hustling, which explains the disdain for intellectual values. They are also too lazy to develop any special area of knowledge.
But interestingly enough, Philistines are not dumb - anyone who knows their brands well can't possibly be stupid.
Philistines miss out on two key things when it comes to personal finance:
a) The pursuit of material goods reduces your financial capital which allows you to escape from the rat-race.
b) It is intellectual pursuits which provide the knowledge to really thrive in this economy. i.e. The jury is still out on how Big Data will revolutionize business functions like sales, marketing or HR.
Even though I am retired, I generally don't give a hoot about the guy who drives a BMW and wears a Patek Phillipe. I actively discourage consumerism, although as an investor, I am like a vampire that feeds on the consumption by others.
Introduce to me a 40-something year old geek who understands MapReduce and can build his own Hadoop cluster and he will gain my envy and respect. I might even buy him a kopi to tap on his expertise.
My advice to folks who aim for early retirement is to eliminate your Philistine friends and start looking for intellectuals to replace them. It's easier to live a non-materialist life if you are surrounded by people who respect ideas more than material belongings.
Thursday, January 09, 2014
Settling into a retirement lifestyle...
After spending my first week populating my timetable, I've finally settled down into a slower retirement lifestyle.
My day today began with a brisk jog because I've recently been waking up tired. The jog managed to release some endorphins in my brain and gave me a high before I had my breakfast. After that I settled down in Woodlands library to attack all the quizzes in the "Computing for Data Analysis" course in Coursera.
I think so far, a combination of physical exercise, programming study and reading will allow me to spend my retirement with relatively low personal expenses. Beginning tomorrow, i will be attending a series of Finance/Tech related talks to find out what the rest of the world is thinking about.
Anyway, let's talk about constraints today.
When i retired one of the things I wanted to do is live with some constraints so that whatever I'm planning becomes sustainable :
a) No computer games.
Initially I used to dream of wasting my time playing MMORPGs upon retirement but now I think I'm getting too old for that. By restricting myself from games, I have to force myself to seek alternatives for mental stimulation and flow, which led to MOOCs being the new MMORPGS. Scoring quizzes, getting technical certificates and benchmarking against students internationally, is not too different from killing monsters and taking their treasure.
b) No more taxis, restaurants, weekend movies and other large expenses.
This constraint is something I made up until by first gush of dividend payments this March. I have a reasonable dividend flow of about $24k a quarter, if I spend the first 3 months on austerity, I would have a cash hoard which I can use to fund my courses and condominium renovations for the rest of 2014. So far, keeping expenses low is really easy if you do not have a day job. Your willpower can be used solely to keep expenses down.
c) No travel... yet
This constraint is practical. My wife is on a new job and has yet to accumulate enough leave, as such I will skip travel for at least 45 days and, even if I travel, it would be to KL for my next book buying spree. There are certainly plenty of opportunities to see the world but I want to get fit so that I can take long walks and endure the "hardship" of living in a cheap hostel.
There are some projects I will be holding in reserve, I would like to setup an online store to sell my books sometime next month, thereafter I think there is room to learn a new language. If I get fitter over the next few weeks, I should be able to enroll in a self-defence class.
My day today began with a brisk jog because I've recently been waking up tired. The jog managed to release some endorphins in my brain and gave me a high before I had my breakfast. After that I settled down in Woodlands library to attack all the quizzes in the "Computing for Data Analysis" course in Coursera.
I think so far, a combination of physical exercise, programming study and reading will allow me to spend my retirement with relatively low personal expenses. Beginning tomorrow, i will be attending a series of Finance/Tech related talks to find out what the rest of the world is thinking about.
Anyway, let's talk about constraints today.
When i retired one of the things I wanted to do is live with some constraints so that whatever I'm planning becomes sustainable :
a) No computer games.
Initially I used to dream of wasting my time playing MMORPGs upon retirement but now I think I'm getting too old for that. By restricting myself from games, I have to force myself to seek alternatives for mental stimulation and flow, which led to MOOCs being the new MMORPGS. Scoring quizzes, getting technical certificates and benchmarking against students internationally, is not too different from killing monsters and taking their treasure.
b) No more taxis, restaurants, weekend movies and other large expenses.
This constraint is something I made up until by first gush of dividend payments this March. I have a reasonable dividend flow of about $24k a quarter, if I spend the first 3 months on austerity, I would have a cash hoard which I can use to fund my courses and condominium renovations for the rest of 2014. So far, keeping expenses low is really easy if you do not have a day job. Your willpower can be used solely to keep expenses down.
c) No travel... yet
This constraint is practical. My wife is on a new job and has yet to accumulate enough leave, as such I will skip travel for at least 45 days and, even if I travel, it would be to KL for my next book buying spree. There are certainly plenty of opportunities to see the world but I want to get fit so that I can take long walks and endure the "hardship" of living in a cheap hostel.
There are some projects I will be holding in reserve, I would like to setup an online store to sell my books sometime next month, thereafter I think there is room to learn a new language. If I get fitter over the next few weeks, I should be able to enroll in a self-defence class.
Wednesday, January 08, 2014
How rhetoric can be used to diagnose the problems with PAP.
One of the constraints I built into my retirement plan is that the learning should never stop. My learning program will mirror a liberal arts program, something which I was unable to pursue in my youth. Right now, I'm trying to teach myself rhetoric by day and R programming by night.
After some basic grounding in Rhetoric, I think I am getting some insight into the recent problems faced by PAP.
Rhetoric is the ancient art of persuasion, Aristotle divides it into the three parts of Ethos, Logos and Pathos. By understanding the three components of persuasion we can look into the PAP's strengths and weaknesses.
a) Ethos
Ethos is an appeal to authority. When someone has ethos, this person not only has a stake in politics but is also qualified for the role. PAP candidates have usually strong ethos, coming with an almost perfect academic record and has enough knowledge to run a constituency. The PAP's weakness is that it's difficult to field a candidate that's vested in the interests of middle-class voters as many believe that PAP chooses elite candidates that really cannot understand the problems faced by many Singaporeans today.
b) Logos
Logos is a measure of logical appeal. This is where PAP reigns supreme. No matter how you look at government policies, PAP is the candidate of choice to push unpopular but logical policies to be accepted by the electorate. Having a policy based on statistics and logic ensures that it's watertight and immune to attacks by the opposition.
The having the strength of logos is also it's weakness. Appeal well to logic comes at the expense of being human. Which brings us to the next point...
c) Pathos
Pathos, or emotional appeal, is the PAP's Achilles heel. PAP has lost its emotional appeal which made it the dominant party in the 1960s. PAP candidates are largely drawn from the upper echelons of the Administrative service, spent most of their lives being celebrated for their academic achievements. These candidates are then pushed in front of the people and made to show that they understand the plight of the poor and disenfranchised. Every remark which the people deems insensitive is then magnified a thousand fold in social media.
Fortunately, I have some ethos of my own. My time in NTUC and a government agency actually allows me to offer some ideas to beef up the PAP in future elections.
This is what I think should happen to turn the tide :
Launch an NTUC Scholarship ( eg. The Devan Nair Industrial Relations Scholarship Award )
Having worked in both NTUC and a government agency, I will make the conclusion that NTUC Industrial Relations Officers have way more EQ than many Administrative OfficersI knew.
Yes - Senior civil servants tend to lack Pathos.
The PAP should tap the Labour Movement for its future generation of leaders.
For emotional appeal to work, the government needs to invent a scholarship which is heavily biased towards candidates who come from disadvantaged backgrounds. These candidates will then be offered free local university education and be bonded with labor unions for up to 4 years.
By sifting candidates based on grit, tenacity, perseverance, and to a lesser extent academics, the PAP can slowly build a cohort of candidates which appeal to the middle and working classes.
Monday, January 06, 2014
Quick initial thoughts on life without a day job.
The reality of having no day job has not started to sink in yet as my first weekday without employment was actually spent quite productively. I spent the morning in NUS certifying my transcripts and the afternoon helping my in-laws with an errand.
For the first time in years, I had decent sleep. My Fitbit registers about 5.5 hours of sleep on a normal weekday when I needed to go to work the next day, yesterday I had the luxury of having 7.5 hours of sleep and great rainy weather to complement my first full night of rest.
When I woke up I had grains and cereal for breakfast, something which I hated in the past because they took too long to chew and made me late for work. Now, even though I hate cereal, I had the whole morning to finish my breakfast so there's no excuse anymore. This meant more energy for the rest of the day, and no carbohydrate-induced coma after lunch.
Lunch was also different. In the past, I would choose any stall with a short queue and always came off thinking that food in Singapore tastes bad and is overpriced. Today. I went to a hawker centre and deliberate went for the food with the longest queue and had probably had one of the best Wanton Mee in Singapore for $3 ( It was at Clementi hawker centre ).
I also saved on coffee, as I no longer require a shot of caffeine to concentrate on my approval papers.
I think the insight I had for today is that a hidden side of Singapore exists once you escape the rat race :
So long as you are not competing for resources with the rest of the corporate world, transportation rides are leisurely, food and even movies can be cheap.
For the first time in years, I had decent sleep. My Fitbit registers about 5.5 hours of sleep on a normal weekday when I needed to go to work the next day, yesterday I had the luxury of having 7.5 hours of sleep and great rainy weather to complement my first full night of rest.
When I woke up I had grains and cereal for breakfast, something which I hated in the past because they took too long to chew and made me late for work. Now, even though I hate cereal, I had the whole morning to finish my breakfast so there's no excuse anymore. This meant more energy for the rest of the day, and no carbohydrate-induced coma after lunch.
Lunch was also different. In the past, I would choose any stall with a short queue and always came off thinking that food in Singapore tastes bad and is overpriced. Today. I went to a hawker centre and deliberate went for the food with the longest queue and had probably had one of the best Wanton Mee in Singapore for $3 ( It was at Clementi hawker centre ).
I also saved on coffee, as I no longer require a shot of caffeine to concentrate on my approval papers.
I think the insight I had for today is that a hidden side of Singapore exists once you escape the rat race :
So long as you are not competing for resources with the rest of the corporate world, transportation rides are leisurely, food and even movies can be cheap.
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