What do they really teach you in Real Estate Seminars ?

For a trainer, I am actually pretty noob when it comes to attending other training seminars previews.

But to improve on my own presentation style, I have started attending the previews from other course providers because there's always room for improvement. Because of the embarrassment of getting noticed, I try to avoid investment seminars and focus on training seminars in other fields, so this week, I attended a real estate seminar and can't help but feel that training courses in this domain may be based on a lot of dubious fundamentals.

Without revealing the specific seminar I attended, I will just share with everyone what I learnt. 

Note that I am not an expert in residential properties, so feel free to correct me if my analysis is wrong.

General Strategy - The general strategy proposed in this seminar is that a working couple who is currently sitting on a private property for the past 5 years should sell it and trade up to two pieces of property - one property under the husband and one property under the wife. The couple will live in one property and rent out the other for passive income. Rinsing and repeating this every 5 years will make you a millionaire. 

I see a lot of flaws with this suggestion :

a) These strategies depending on drawing down CPF for passive cash flow.

If you look at the math, for the property that is rented out, rental income these days can seldom cover your monthly mortgage payments, but because monthly payments is covered by $1,200 from CPF, the rental income can become net cash flow positive. 

This is not real passive income but tantamount to drawing money from CPF instead which is already your money. Furthermore, it deprives you from the nice guaranteed 2.5% from the Singapore Government.

b) You will not get a tenant renting the second property all the time.

Even REIT investors get worried about tenants. SoildBuild's primary issue has become that of rent coming from NK ingredients. 

When you have one property, you either have one tenant paying rent or it lies empty and you get zero rent for a particular month. In those months when you have no rent, you are likely to be cash flow negative.

c) Things can go south very quickly when interest rates go up

SIBOR is rising as we speak and I've been paying a lot more every month since the Fed have started raising interest rates. When SIBOR ratchets upwards, you are unlikely to be able to raise rents at the same time and this will have a negative effect on your cash flows.

d) Property taxes are conveniently ignored in calculations.

Owning real property is different from owning a REIT due to taxes that have to be paid for property ownership. Rental income also flows into assessable income every year. 

No attempt was made to quantify this. 

e) The thesis that real estate will appreciate just like in the past is questionable

I have to be careful when saying this because I do quantitative backtesting so I may actually be committing the same sin. 

But when it comes to residential real estate, we know that price appreciation are probably more dependant on whether we will welcome foreign labour in the future and whether cool measures will continue. This thesis has to confront the fact that younger workers are increasingly finding it hard to own real estate because of the nature of their work. It does not help that fresh graduates are finding it harder to get permanent jobs 6 months after graduation.

Commercial property managed by REITs is simply not as big a political time bomb as real estate property. 

f) The trainer actually gets many bites of the cherry 

A lot of these seminars are taught by real estate agents. 

I suspect that trainer fees are not the only payments that the trainer will receive. Subsequent real estate transactions will also be serviced by these trainers. Does this introduce a conflict of interest when trainees are nudged to buy/sell properties through these trainers ?

Anyway, feel free to share what you do know about these seminars and correct my misconceptions if there are any. 

It was quite fun to learn what other trainers are teaching. 

The Model Thinker #21 : Game Theory Models Times Three

This chapter is about game theory where models describe a situation of zero sum games. I don't want to get into a discussion on zero sum games because they are more useful in a situation where you trade in derivatives or currency. Someone's win has to come off from someone's losses. This is the kind of game that I really hate getting into.

Instead the addendum of the chapter talks about something more interesting which is the problem of identification.

What causes people to take up a particular investment approach like value investing or quantitative investing ?

The peer effect model reasons that people adopt an approach when influenced by their peers. If that were true, a person who joins Seedly would become more open minded to buy whole life insurance, where a network of FAs are brazenly picking fights against the BTIR crowd. If this person joins BIGScribe, I am guessing he is more likely to adopt a more hostile stance towards whole life insurance, preferring to invest their way out of any personal situation. At least so far, the design of BIGScribe is that there are no commissioned salesman holding admin roles within the group.

The sorting model suggests that people sort themselves out and they congregate in the same groups that have the same philosophy towards insurance and investment. If you consider the sorting model as the dominant one, you will simply argue that Seedly attracts more FA types and folks who are more open-minded to what is sold by the insurance industry. Similarly, BIGScribe is, somehow, a magnet for very sceptical critics.

The problem of identification is that if we only have a snapshot of data, we can't really tell apart which effect is a stronger play. We have to observe participants in each Facebook group over time. Right now, I believe both effects are always in play between the FB groups. Some folks will be influenced by the regular posters in each respective group but eventually those with the same outlook (or agenda) will congregate within the same cluster.

In designing a good training to enact change in a client, both effects will have to be exploited at the same time to benefit the customer.

I like to to get beginners invested as soon as possible, treating dividends as some kind of "gateway drug" to get a rookie investor hooked ( like Walter White ). Of course, because of the amount of skin I have in the game, I have to pre-select students who will most likely adopt my approach towards investing. Right now, I am aware that engineers, accountants and teachers somehow have a strong affinity to what I teach in class.

Should I soften my style to make it more touchy-feely and emotionally charged so as to appeal to the artistic and designer types that I generally do not have an affinity with ?

Let me give you a hint with a quote from Game of Thrones :

"I am neither kind, nor a lord, Your Grace. I am merely an instrument of the institution I represent, it's wellbeing is a matter of arithmetic, not sentiment." - Tycho Nestoris of the Iron Bank of Braavos.

First World Problems #2

I'm not really in a mood to blog this week so I'll just keep today's article short and sweet just to update everyone on my attempts to hire a domestic helper without a notice of assessment.

a) Wild Goose chase to find out whether my dad already has a fixed deposit account.

The week began with with me finding a fixed deposit statement with my dad's name on this made in 2016 when we hired our previous maid, there would have been a possibility that we already have a fixed deposit account to get our next helper.

So I went to the bank with my mum to make enquiries about my dad's account. Unfortunately, banks have to comply with secrecy laws and even with my mum's marriage certificate, the bank cannot even let us know whether the account would exist. I ended up rushing to the hospital to get my dad on the phone with the banker only to find out that the account was withdrawn some time ago.

b) Sold some stocks to build up the fixed deposit account.

I was prepared to liquidate part of my leveraged account to create the fixed deposit account. Choosing the stocks to let go was not difficult - I got into my account and sold my REITs belonged to the quadrant that paid the lowest dividends and had the highest gearing. The hardest part was saying goodbye to Mapletree Logistics Trust which did very well for me for the past year but no longer gave me compelling yields. (It even went up on Friday. FML )

Upon activation it took the Kim Eng brokers 3 working days for the money to return to my bank account which was reasonable.

c) Fixed Deposit creation was instantaneous

Once you have money in your bank account, creating a fixed deposit account is as simple as using a mobile banking app. Given that I am trying to get rid of this fixed D as soon as I am allowed to do so, I set the duration to 1 month and would get $2.41 (0.05% interest rate) of my trouble next month.

But there was one final obstacle...

d) Getting a fixed deposit statement with my name on it is not straight-forward

As I just created a fixed deposit account, an account summary has not started showing up on my online banking profile yet. The next challenge is getting a physical printout that maps my name, account number and amount in the fixed deposit on the same piece of paper. By now, I was so paranoid about bureaucratic procedures and was more than willing to queue at the banking branch to get this printed. Unfortunately for me, the queue was long on a Saturday so I spent 30 minutes waiting to get this done.

Right now, we have just completed the paperwork to hire our maid from Myanmar and now we have to wait for a week for her to complete her training.

But the journey is not over yet.

I don't have full visibility on how long my money needs to be in this fixed deposit so I would be making some enquiries with MOM this upcoming week, escalating to my MP if possible.

The reason why I'm dying to get out is that having a $50,000 warchest along with my dividend payout may allow me a chance to get into Astrea V bonds ( Likely Tranche B ) in my margin account.

The Model Thinker #20 : Spatial and Hedonic Choice models

This article is a more detailed way to look at the statement that "Price is what you pay, value is what you get."

What models exist to explain the value of a good ?

Spatial attributes have no best value. One example of a spacial attribute is thickness of a slice of bread or the colour of a jacket. Preference depends on the individual. In the financial world, the optimal amount of the debt/equity ratio is around 30-40% and varies from industry to industry. Picking out stocks with the lowest or highest debt to equity ratio result in substandard performance.

Hedonic attributes are values whereby the higher than better. An example is your PSLE t-score, why would anyone prefer 240 when he can get 270. In the finance world, I would reason that free cash flow yield is a hedonic attribute. A portfolio of stocks with the highest decile of FCF yield will almost always perform better than a portfolio with a lower decile.

When it comes to valuation there are other models.

A coordination model is where prices are socially constructed. The example from the book is Art. The value of a Jeff Koons sculpture is ultimately based on the good will and distribution of values ascribed by many individuals. It is highly dangerous to make investment bets on something that has a price that is socially constructed. One day it would be high. Another day, no one will even pay a pittance for it.

Finally, something may have a value that depends on how much a person in the future will pay for it. This is based on predictive modelling. The price of Bitcoin depends on how much people are willing to pay for it in the future.

The models can be used in isolation or in combination.

The books uses examples from political science, but it might be able to qualitatively explain the valuation of securities.

First World Problems

Sometimes I stir a lot of shit on weekends.

The topics that blog readers get anxious about include topics on dating Singapore women, dissing Financial Advisors or delivering a nasty brutal lesson to Polytechnic students. Regardless of the negativity of the engagement, I get 2000+ views in one day.

But sometimes, the world stirs throws some shit at me. In such a case, I should also share on this blog because we can learn something from the experience and I get to dissipate some Bad Kharma I accumulated from previous blog posts.

My dad has currently been hospitalised for a few weeks and it's been quite rough for him. The doctors found three problems with him and are systematically resolving it one by one.  At the home front, we've been trying to hire a domestic help to support my mum when my dad comes home.

Apparently to sponsor my domestic help, I need one of the following :

• Notice of Assessment for my Income Tax
• Evidence that I have a Fixed Deposit account containing $50,000

Unfortunately for me, I only started reporting my income tax for year 2018 so I will only get my notice of assessment maybe end of this year. Prior to that, I was a student. So I spent the yesterday contemplating the stocks I need to sell to build that $50,000 fixed deposit account. 

This is a rare case of something financially independent folks face. 

While I can easily liquidate my stocks to build the fixed deposit account, the opportunity cost assuming 7% dividends is almost $3,500 every year. Considering that I am likely to take this from my leveraged account, the penalty is much worse.

This is not the first time I was inconvenienced by my lack of conventional employment in this society. Years ago, I was abused at at ICA by part time counter-staff and had to document my dividends payments for ICA to initiate my wife's SG citizenship application.

I think insisting on a fixed deposit is cruel, and alternatives should be offered to citizens who really need a domestic helper to assist at home :

• Instead of $50,000 fixed deposit, it is much better to also allow $50,000 in SSBs to also qualify.
• Perhaps the sponsor can also show that his CDP has $250,000 in his account.

I am pretty used to government officers explaining that my case is very special and have experience getting concessions from them. 

But right now, if life throws lemons at you, make lemonade :

• Looks like I now have an emergency fund. 
• As the trade war gets worse, I now have a war-chest.
• I am likely be getting rid of my equities first to reduce the beta of my overall portfolio. 
• For my leveraged portfolio, the securities with the lowest yields will be culled first

Let me know if you have experienced a similar problem I did and whether you have a workaround.

All my administrative requirements have been explained to me by the maid agency. 

( If you are a private banking client, do share with me whether these banks have some sort of way to help their HNW clients out. )

What is your Return on Luck (ROL) ?

If you've been financially independent for a while, you will notice that the blogosphere and social media will be very eager to discount your financial success. You might be marked down on the Internet for the following :

• Coming from a rich family.
• Earning a salary above $120,000 a year.
• Being a scholarship recipient.
• Being single - with no wife and kids to affect your spending.
• Being born with a combination of intelligence and conscientiousness. (Blame Jordan Peterson)

The laundry list expands with the millions in your bank account because folks want more reasons to explain why they cannot be as rich as you.

Here's what these critics are missing. There are actually lot of folks who come from rich families and may not have accumulated as much as you. The same goes for those who make a lot of money, or are single, intelligent or conscientious. Of course, the opposite applies. There will always be someone who is born under worse circumstances than you who will eventually do better than you ! 

While a lot of folks are lucky, what is missing is a metric to compare two equally lucky individuals and measure how one will edge out over another. 

Let's call this Return on Luck or ROL.

To measure ROL, we need to ask ourselves this : 

What are the systems and habits we put in place to exploit lucky events in our lives and minimise the misfortunes that happen to us.

When I was going through my first year of work with Procter & Gamble, the company suddenly fired its CEO Durk Jager and the stock price collapsed to $60. I thought this was a perfect opportunity to exploit the market rout and asked my boss how to buy the stock. This being an IT department and us being investing noobs, no one could guide me to a broker to open a trading account. Procter & Gamble stock eventually doubled its price over the next 2 years. Even when I had some investing insight, the investing infrastructure was not there for me to exploit it. So, as a rookie, I had a low ROL.

A margin trading account can increase your ROL even if you do not employ leverage systematically over the long term. When the US REITs simultaneously declared a rights issue, I had no liquidity in my bank account. But because I had a leveraged account, I could participate in the rights issue and then pay it back slowly over time. I just had to stomach a lower margin account ratio in the mean time. The subsequent rise in Manulife REIT and Kep-KBS REIT became a lot more beneficial for me since I participated in the rights issue for my margin account. 

Other systems that can raise your ROL can be as follows :

• A Crowdfunding account. 
• Cryptocurrency coin wallet.
• Fully funded Child Development Account for all your kids.
• A Private Limited company to bill lawful company expenses and provide legal protection.
• A network of alumni that creates business opportunities for each other.
• An educational credential earned from a prestigious institution that companies respect and eagerly hires from.
• A Bloomberg terminal.
• A decent term life policy that is cheap, rebates premiums every year, and covers a substantial part of your human capital.
• A sustainable diet that is scientifically proven to extend your life and won't make you an insufferable asshole to you non-dieting friends.

I can also think of systems that IMHO, may lower your ROL :

• A mistress
• A Netflix account that costs you money and time ( Which I have and enjoy, unfortunately )
• A ready cash facility that can tempt you to overstretch your expenses.
• A bunch of alcoholic friends who hang out and watch soccer together. 
• A bottle of champagne in some night club with your name on it even when you do not entertain business contacts for a living.
• A financial advisor who has a keen idea of the size of your pay-check and the timing of all your subsequent cash flows AND who is financially incentivised to lock your money down in low interest bearing instruments like endowments or expensive instruments like ILPs. (I'd rather keep a mistress )

How can we judge whether a system can increase your ROL ?

One test is whether this plays a role in the virtuous cycle of wealth formation.

A facility that supports dividends investing is such an example. A virtuous cycle is formed when dividends from a portfolio of dividends stocks can be fed back to buy more dividends stocks, pay for better information systems to filter out better dividend stocks, and even qualify you for higher end financial services ( lower financing fees ).

This idea is of course, not mine. I tried to adapt this from Jim Collins, author of the book called Good to Great who pioneered this idea known as the Flywheel Effect.

Just don't be a smart ass and ask me whether I have backtested this....

The Model Thinker #19 : Threshold Models with Feedbacks

Sometimes it helps to go granular and model something as an agent instead of system dynamics models. So this means that instead of modelling a stock-market as having a number of value versus growth investors, we can model each investor as someone who will buy or sell a stock based on some threshold.

The problem with modelling each investor as an agent is that we run into other problems.

Some investors will buy a stock when it goes up, making the stock go up even higher. This is an example whereby an agent produces positive feedback loops. Other investors will do the opposite and buy the stock when it goes down. This is an example whereby an agent produces negative feedback loops.

A system with primarily positive feedback would be like cryptocurrency markets when prices of bitcoin blew up or collapsed. If you really believe that the cryptocurrency markets will moon over the next few months while the trade war is going on, you might be making a bet that cryptocurrency agents are mostly trend followers and the current trend is up all thanks to the trade war. My theory is that some folks believe that China can go nuclear by selling US treasury bonds. This will push up the price of Bitcoins.

My opinion is that the REITs markets are possibly the opposite of cryptocurrency markets. A lot of REIT investors chase dividend yields and this is primary a market with a lot of negative feedback. When REIT prices drop, yields go up and this attracts yield hunters. REIT markets, therefore, will either stabilise or move in very shallow cycles. This is why I observe empirically that REIT portfolios I build with my students have such a low effective shortfall the expected loss in 1 out of 100 months is less than 6%.

The insight that cryptocurrency markets and REITs markets are opposite poles when it comes to feedback is an interesting one which I am now cracking my head at.

Can a strategy be developed to exploit this ?

I already have a paper on factor based models for cryptocurrency markets and when markets are down, crypto seems to making an interesting recovery.

Perhaps a hedging strategy for REITs can be built with Bitcoins ?

Let me know what you think.

What I learned from observing Financial Advisors

In every preview, my colleagues are always able to spot who the Financial Advisor is in a room full of potential students for my course. This week one subject has his hair combed backwards, his watch looked like a Patek Phillipe ( although it seems out of place as he looked in his early 30s. ) and he wore a prominent Coach bag.

To Financial Advisors, my previews can be a nasty trap that can make them feel depressed for weeks.

Within the first 10 minutes, I would ask the class to participate in answering some questions and you can see the results on this page that shows just how much the public trusts folks from this profession (note that these surveys are done before the substance of my talk so no attempt was made to prime the audience to react negatively in a survey.)

It does not end with just one survey, I do eventually talk about my origin story. I shared about how a policy that was mis sold to my mother that put me in the path of intense study in the field of personal finance that got me to where I am today.

Typically these FAs who attend my preview eventually become so angry that they storm out of the room, my colleagues always tell me stories of folks who get triggered by the substance of my talk. This is not a loss for me, because if you actually get a commission higher than my training fees when you sell a policy and claim that you can help your client, then why are you even attending my preview ?

These are students I don't really want to have.

Of late, I realised that many Singaporeans may have made some insurance moves they grow to regret. This because as part of my class, I get all my students to reveal their weekly expenses to me and I get a front seat on investment decisions made by more responsible members of the Singapore population.

( No worries, I don't make recommendations except to ask them to eliminate the conflict of interest by seeking an independent FA. )

This has gotten me really interested in how financial products are sold and what the internal tricks of the trade the profession might have so I picked up a book on how FAs can handle objections.

Salespeople develop a very mature and complicated system of objections handling to deal with common ways a layperson may reject them. My first objective is to see how to immunise myself from these objections. My second agenda is to adopt some of the responses for my own pitch which faces interesting objections of its own given that my work has an increasing sales dimension to it.

As it turns out, bread and butter advisors you meet daily hardly get into the detailed technical discussions that folks like Money Maverick even get into. I was disappointed that no attempt was made to disarm "Buy term and invest the rest". I ended being grateful that at least guys like Money Maverick are sophisticated enough to talk about real issues like active vs passive investing.

I will just share three tricks I see repeatedly being used to handle client's objections based on their own text-books.

a) Don't let an FA compare themselves to other professions

I noticed that if you can block the move whereby an FA compares his work to a medical doctor, half of all objection handling strategies will fail. For example, when you ask for a discount, the FA might ridicule you by asking whether would you ask for a discount from a medical doctor.  This theme gets repeated over and over again across different objections - that it is rude/illogical to do to an FA what you won't do to a doctor.

Just refer the FA to the qualifications required to qualify to be an FA here. Ask them whether they can really compare themselves to doctors when the education qualifications are A level/Diploma/IB.

This should disarm them fine and good.

b) For retirement planning, realise that you are paying for a financially engineered guarantee so you will need to push into a discussion on numbers.

When it comes to retirement planning, FAs will attempt to sell you a financially guaranteed solution that will ensure that you meet a future goal. There are a couple of ways to deal with that.

First, know that you are paying hefty commissions for this guarantee, so by not taking this guarantee you have some leeway to make a few mistake of your own in investing.

Second, you are sacrificing a huge upside by not participating in market risk - likely the manager of the endowment will be earning that upside instead.

Third, you should get your FA to factor in inflation on their promised meagre returns.

Standard objections rarely move into numerical territory because they want to confine your decision making to emotional ones. Even today, a lot of retirement plans are sold without comparison making. If you invoke recent REIT returns, FAs will find it hard to maintain the attractiveness of their pitch.

All this, of course, assumes that you know how to invest. 

c) Some contradictions are built into the stock answers.

I was quite shocked that some objections handling were contradictory.

One answer claimed that reviewing the proposal is pointless because it is very complicated and only a credentialed professional can really understand it fully. It then proceeds to make the claim that the policy can be explained easily in 15 minutes.

Another ridiculous idea is that premiums will always go up so when you delay a purchase so the advisor will always get richer with more delays. Remind the advisor that markets also go up and you are more likely to get richer when you delay as well. If the advisor wants to refute you, he should provide the CAGR of his premiums.

Anyway, do read this article with a pinch of salt. They are taken from a prominent guide on objections handling and with the number of contradictions in this manual, policies may not be sold today using these techniques. If you are an FA who can go through this article without blowing your top, you may share with me to confirm whether these strategies are really used.

I will be reading every single book I get on FA sales pitches over the next few weeks because I think that my own program will become better once I get under the skin of this profession.

If you are an an ex-FA with some axe to grind ( there are a lot of these guys out there ), the best thing you can do right now is to offer to lend me a copy of your sales manual so that I can deconstruct the sales approach on my blog.

The Model Thinker #18 : Systems Dynamics Models.

Systems Dynamics models are so useful that I have decided to come up with my own spin on why it is so powerful.

A systems dynamics model allows an engineer to model feedback loops and gain a holistic understanding of now a system works. This frame work is sufficiently flexible such that it can apply to any domain.

Here is how I intend to use this framework to teach the fundamentals of personal finance to my students.

The diagram above summarises our financial lives.

Upon first inspection, our monthly cash flow is influenced by our salary from work which is determined by our life-energy exchange.

For the greater part of the financial blogosphere, I think we have make the mistake of thinking that the moment we can start investing part of our money into dividend stocks, we would spark a virtuous cycle of getting more passive income to farm more of our salaries into passive income assets.

Fortunately,  the systems dynamics model also allows us to start thinking about negative feedback loops.

One of the effects of getting passive income is that we find that there is less motivation to work and possibly even more impetus to spend money on discretionary consumer goods. This creates a negative feedback loop decreasing our propensity to generate more cash-flow every month.

I suspect this will be a major theme for many bloggers who are at the cusp of financial independence.

The final effect is that folks who FI do not accumulate wealth forever.

Many will reach a comfortable steady state that varies based on their own personalities.

Why Singapore Women scare Frugal Millenial Guys.

This week I had an interesting chat with some Millenials on their fears.

Some of these guys are familiar with my story and they are aware that when I was much younger, I transferred my CPF-OA to CPF-SA because I was afraid that a future Gen-X spouse would over-leverage and end up with me me getting stuck with a home that is too luxurious for my taste.

All this while, I felt that my fears are those of a bygone era.

I always thought that Gen Y women are less aggressive than their Gen X counterparts who had a lot more to prove in the 1990s and were trailblazers in feminism. Also dating apps like Tinder really gave Gen Y guys a huge advantage in the dating and mating game, the barrier to getting some bedroom action has really come down after these apps were launched. Adding insult to injury is that becoming a BBFA is now a feasible lifestyle choice. If Gen Y guys want to retreat from the marriage game and spend the rest of the life playing the PS4 and watching Netflix, this is something that can result in high levels of personal satisfaction.

So it comes to quite a surprise when some frugal Millenial guys told me that they have a different fear regarding Singaporean women and want to know whether they should follow my lead and marry a Malaysian instead.

The problem they have with Singapore women is that they seem to create the impression that they  love to travel ! These dudes might be right, female influencers may have turned travel from a luxury in life to a necessity. 

Initially I wanted to just argue that travel is de minimus compared to having to pay for a private condominium, but upon closer inspection, travel can be fiscally taxing to a young man. My budget to get my wife and kids to the Gold Coast in June would cost me $8,000. Imagine going to Greece or Spain.

So imagine travelling with your girlfriend to faraway places just to get a few nice Instagram shots. If she likes to do this four times a year, you'd hardly have savings left even if all you did was pay your own way when you accompany her.

Sadly, most of my inventive responses to Gen X women of my time will not work on a younger woman who loves travel since transferring CPF-OA to CPF-SA might not help.

Gen Y guys needs a solution to actually lock down their hard earned cash assets so that nothing can be done to unlock their money to support the travel industry in Europe.

Beyond common sense ideas like limiting travel to Malaysia, here are some ideas :

• Voluntary Contribution to your own CPF - You can pump more money into your CPF and pay lower taxes at the same time. This ensures that you won't see your money until you are 55 and at least the CPF-SA component will compound at a guaranteed 4%. 
• Supplementary Retirement Scheme - This is another method to push your taxes lower. Problem arises if your girlfriend wants you to withdraw it early to pay for business class tickets. Pray that she will not be so cruel to make you suffer a 5% penalty when you withdraw early.
• Illiquid Corporate / Government Bonds - You may need AI status to buy long dated government bonds from, say, Kazahkstan from a private banker.  It might pay handsomely but are not particular liquid.
• Long Term Endowment plans. These toxic instruments, almost tantamount to pure wealth transfers to your financial advisors, take so long to break even that taking the money out earlier will almost guarantee a painful and debilitating loss. If you find that you want an endowment plan just to avoid travelling with your girlfriend, I suggest that you should just travel with your girlfriend. Heck, if your FA is a hot chick, maybe it's cheaper to travel with her.

I feel that none of these suggestions are as elegant as a CPF-OA to CPF-SA transfer. 

Maybe the solution is to become BBFA after all.

Personal Musings on the Imposter Syndrome...

This last month was the month I've met an important milestone.

Last month was the month when my earnings post law school started to exceed the fees I have paid to SMU. Even though this was not important to me financially, I needed to convince myself that I should at least earn my way back to cover my fees without the assistance of my passive sources of income. Of course, covering the fees about 8 months after being admitted to the Bar is no big deal. The Justice Law Clerks paid way less in fees after accounting for academic awards and they were paid during the period I was earning zilch and they were studying for the Bar exams.

I also had to come to the realisation that this will be the second time in my life when I failed a career transition.

The first time was after I studied for my Masters in Applied Finance and took all the finance certification exams only to find that IT paid me quite well to actually stay on. Right now, my training career is doing fine enough for me to possibly keep going on in 2019 and try to do my best - If I had actually stepped into Family law, I'd possibly cover around a third of my fees today and I'd be really miserable dealing with emotional problems from other folks.

To what end should I strive to be a "REAL" lawyer ?

One of the problems after becoming a trainer after going the whole shebang of being admitted to the Singapore Bar is the imposter syndrome that bothers me even right up till today.

The idea that I'm a "fake lawyer" was hinted by the auntie who sells me second hand books in Parklane whom I consider a friend because her son graduated from SMU and I was regular book shopper between lectures and came from the same university.

She said something really insightful. Obviously, she knows that I am free enough to shop for books on weekday afternoons. But she said something to me which was so interesting that only a bookseller who be able to say this to a close friend with much authority.

She said something that is full of BURN !

She said that I buy books "real lawyers" don't read.

The books I buy are full of equations, charts and are dry as hell. And by now she is familiar enough with my habits that she can even predict what books I would buy. In fact, she keeps some of the more arcane investing books for me knowing that no one else will give those books a second look.

Her insight to what "real lawyers" read is even more interesting. She says that "real lawyers" are always stressed. They buy the trashiest fiction novels to read and relax after work.

My imposter syndrome triggered again when I had an alumni's gathering this week. I really enjoyed my time in law school and really miss my professors, but I was self-conscious about my career choice. For reasons you guys know, investment trainer always sounds a little dubious to members of the public. Will there be a pissing contest to see who works harder for their law firms during the alumni meetup ?

Anyway, I thought I should go back to say hello to my classmates and get some name cards. I might need a good lawyer to assist me in writing disclaimers or even help me with IP matters in the future, so I should position myself now as a potential customer.

As it turns out, the moment I stepped into the function room, my ex-classmates greeted me with "welcome to the work-life balance" club.

None of the alumni in the group I contacted are "real lawyers". Some are in house counsel and the rest work for government agencies. The real guys who work for the prestigious law firms are stuck in the offices and have to miss that event.

We discussed a lot of major issues about the industry, the recent "violence" done to family law and how lawyers worked harder than the "996" culture the Chinese are revolting against. I think I held my own rather well because my Conflicts of Laws instructor as me whether what I learned was useful and I was able to discuss her topic at the level where I can quote case authorities and how it got me a thrashing when I was a pupil.

The conclusion is this. The legal industry is no longer what it used to me. Once growth starts to slow and folks no longer see a bright future, they will not put in the hours for a future that is not compelling to them.

My fear about getting into family law has always been about the "SUSS tsunami" that has yet to hit the legal industry so badly. SUSS conducts two modules in Family Law for their graduates and they probably are willing to do the same kind of work for much less. After that the supply will be shifted unfavourably towards those doing Criminal and Family Law work. Relief will not come until 2023 when the new regime for Bar Exams come into existence.

Anyway, self-loathing about career choices can only take one so far. I made a decision to postpone doing some smaller legal projects today so that I focus on my family and training business. I just do not multi-task as well as in my 20s or 30s.

At the end of the day, titles and your position in society may seem illusory, but the money coming into your bank account, your investment performance and the money you make for other people, is totally real.

I will revisit the possibility of a legal career if I ever run out of training gigs.