Friday, March 06, 2015

Update : Chinese New Year is over !

It has been two Chinese New Year holidays since I have left the workforce.

Here's a quick update and some thoughts about life  in general.

a) Starting community service tomorrow.

As a JD student, SMU mandates 30 hours of service to the community service which must be done in order to graduate with a law degree. The Sikh Welfare Council has very kindly given me two students to provide tuition for the rest of 2015.

So beginning tomorrow, I will be teaching E Maths to these two students, I look forward to making friends with this family and would like see myself as a life coach rather than a maths tutor.

This is the first time I'm doing some serious good in my life. At the back of my mind, I keep telling myself that complete acts of altruism are rare. I should do a good job for myself - if my students succeed, it's a great way for me to re-skill myself as a tutor while studying just in case things don't really work out after 3 years.

b) My classmates just upped their human capital over 2 weeks of mid-term holidays.

When school reopened this week, everyone looked a bit despondent but I felt that they shouldn't be. Immediately after announcing the budget, the Government gave all my classmates a big bonus by restricting the list of universities with recognized law degrees by 8. Many argued that the impact to my batch would be minimal as students currently studying in those Universities would not be impacted.

On the whole, I think it bodes well for my classmates as firms begin to form rational expectations about a crunch in lawyer supply in the future and ramp up hiring for the present. But this is just the amateur economist in me talking.

c) Consolidated my portfolio for the new year.

On the financial front, I have finally decided to break my portfolio down into three parts so that it can be managed separately. Currently my 31-counter portfolio breakdown is Equity/REITS/Business Trusts at a ratio of 30%/40%/30%.

My overall yields last year did not meet expectations as it ended at about 7.2% but it's still a decent figure which paid my mortgages, school fees and family expenses. This year, I'm ramping up my yields to my desired 8%. I think the weaker SGD may help in this regard.

Overall portfolio went up about 3%  in spite of minimal reinvestment of my dividends.

d) Why I feel like I am GIC or Temasek. 

I'd just like to share one final thought about the politics of employing reserves to create an inclusive society.

Just like Temasek or GIC, I struggle with my finances in spite of the margin of safety that I have built for myself. If I were to employ half of my capital gains since I left the workforce, I would not have to struggle with kopitiam yong tao fu everyday because my hefty law school fees would be resolved at the snap of my finger. It also does not help that I have recently installed Carousell on my Android phone and have been hunting for vintage RPGs and Avalon Hill War games.

I think fiscal prudence and frugality is an important part of Singapore's pioneering spirit which made us what we are today. Spending should not be a trivial case of opening the floodgates and then justifying to oneself that we can afford something or whether its sustainable over the long term.

There is value in thinking that money that is not spent can provide as much utility as money which was used to make lives better over the short term. With high reserves, currency raiders would think twice before attacking our economy. In the event of huge recession like that in 2009, permission from the President can be sought to unlock the reserves to help us recover faster.

Wealth is confidence, you don't need to spend it for it to make you feel good.

As such, while Tharman remains my favorite minister. I don't agree with the shift to the left even though we can afford it and it's sustainable because we've always been conservatively fiscally.

We should simply continue to be frugal and not allow that entitlement mentality to creep into this nation that we've been building for the past 50 years.

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