Saturday, October 08, 2016

My Cinderella Story.

One interesting notion I learnt from the AAR of our talk is idea of a Cinderella Story.

Here is an example of a Cinderella story of fictional finance guru Ah Huat :

" Born to a single mum, Ah Huat grew up in a one room flat. Partially blind from a birth defect, Ah Huat joined successive gangs, first extorting money from cardboard aunties, and then dealing with lifestyle drugs after dropping out of primary school. Ah Huat's life changed when he was thrown in jail. Upon his release, he dabbled in multiple businesses but was cheated by someone and became a bankrupt at age 22.

At this time, Ah Huat decided to turn his life around. Ah Huat discovered (Forex / No money down property techniques / Internet Marketing / Insurance sales ) and has been making $10M every year from age 24.

Today Professor Ah Huat, age 32, now holds 3 Phds from different countries, has a great and loving family, and lives in a GCB.

Now, you too can become like Ah Huat if you have pay $6,000 for a money making seminar !"

People like Cinderella stories when they are told by investment gurus.

I always thought that one of our biggest weaknesses (and strength) as a coalition of financial bloggers is our lack of a Cinderella story.

For our sessions, we wanted to persuade the audience that value and dividends investing is a strategic move that is best undertaken from a position of strength. You must have a steady job and has to take on a lower standard of living. There are no short cuts in life.

We don't have any of the following stories to share which would be familiar to you if you attended a lot of finance sales-driven talks :

a) We don't brag about dropping out of school. 

I suspect that we are all quite academically inclined and we were well above average in Maths. After having had deeper conversations with 15WW, I realised that he may be a superior investor because he somehow managed to internalise the Kelly Criterion, which is an intuitive tendency to up the bets when the odds gives him the largest edge.

b) We don't have very heroic tales about being abused or retrenched at work. 

I made some career mistakes in the past which explains why I went into Law School immediately after being able to replace my income with my dividends, but they were never catastrophic.

None of us were ever retrenched. As a consequence, we never felt any need to stick it to Man.

The Man was actually quite nice to us with REIT tax holidays, hawker centres, etc....

c) We were never bankrupt. 

Personally, I don't understand why folks dig the bankruptcy story. When someone becomes insolvent it is often at the expense of their creditors who are the folks who made a sacrifice to lend them money in the first place.

My starting position will always be that bankrupts are untrustworthy folks. Unless it is medically or circumstantially driven, it hints a lack conscientiousness in money management skills and an inability to plan for the future.

While I think we need to be more forgiving of bankrupts so that we can achieve a risk-taking culture, it's an entirely different thing to celebrate it altogether.

d) Our personal family circumstances are fairly average when we were growing up.

We never joined a gang as youths. Never really took drugs. Our parents never beat us. We did not come from single-parent families. Or parents were never compulsive gamblers.

Our circumstances are quite average and the same as our audience.

e) Generally we never under-performed in most of the stuff we did.

I did repeatedly fail my CL2 exams and IPPT but it was never fatal to my academic and working life. I also missed out on some scholarships in my youth which still upset me today. If you googled my name, I was in Singapore's first International Informatics Olympiad training squad in NUS  but I was too young and foolish to cherish this opportunity and was dropped out of my Olympiad squad. This is one of the biggest regrets in my entire life. I think my life would be completely different had I qualified.

Hardly a heroic story because I was never in ITE. I also never got less than 180 for my PSLE T-score. No teacher ever told me that I would amount to nothing (except my Chinese teacher who spent more time vomiting blood from reading my essay submissions) .

So no Cinderella story there too....

But plot twist !

Kyith shocked me when he told me that I actually told the audience a Cinderella story during the session...

I was replying to a question how to deal with an economic downturn.

I related a story about my time in Singapore Mercantile Exchange where we were insulated from the Great Recession of 2009. My portfolio was down and I had easily had an entry-level BMW worth of paper losses. Most investors were going through a tough period in their life.

From 2008 to 2010, I invested every single cent of my earned income into the financial markets and lived only my dividends scraps. I had the confidence to do that because I read a research paper on how long recessions typically last, which is around 18 months on average and I was already a year into the recession when I read the paper. In those days, Cambridge REITs  was yielding 12% and a portfolio of REITs can deliver 10%+ yields.

You can guess the rest of the story. Without the Great Recession of 2009, I doubt I would be where I am today.

Ok, it's still hardly a Cinderella story.

But it's the closest one I know of so far.


  1. Chris,

    I guess I have a plan B waiting for me if my portfolio blows up!

    I can re-invent myself as a Cinderella turned snake-oil peddler?

    I did leave school at 16 ;)

    No, I wasn't into gangs, did drugs, or had prison time.

    But I have a school mate that is now "Ah Long", worked with a sales colleague who did "weed" while on the selling floor, and have one army mate that did prison time due to assault when we were serving NS together.


    Perhaps I can leech on to their "halo effect"?


  2. Actually, you are the our best Cinderella candidate !

    But for your generation, I think you are still the good boy lah !