Monday, December 30, 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So there you have it.

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

Tyler Cowen talks about the need for confidence.

I am showing you how to buy it.

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