Tuesday, April 27, 2021

More on the CPF Shielding Lifehack Abomination !

The previous article was a humongous success with so much interaction, I actually had to censor some comments from some angry FAs. This clearly means that citizens can be passionate about the CPF programme without resorting to unreasonable antics like those of Roy Ngerng. 

Seeking a solution to plug the CPF Shielding loophole is not too much to ask for.

Today, I would like to raise three points after readers have provided their feedback on my initial post :

a) $40,000 / $20,000 of the CPF SA/OA cannot be shielded

One reader pointed out that certain components of CPF-SA and CPF-OA cannot be shielded, so in my example in the first article, the advantages were overstated. If you have $280,000 in CPF-OA, you will are prevented from dumping $20,000 from CPF-OA, so you will have an extra 1.5% x $260,000 or $3,900 a year from successfully executing the hack. 

Still a fairly consequential amount of savings, so if you are reading this, please read my previous article on the hack and figure out what you need to do when you turn 54 years old. 

b) The lifehack itself contains some hidden risks, so it is not foolproof

The recommended funds tend to produce low returns but contain a lower amount of credit and market risk so when the hack is being carried out, you can lose the difference between the 4% and the amount returned by the funds over the short term. Some readers also commented that the hack should be performed using higher risk-balanced funds to minimise this difference, but this increases the volatility of the fund when it is in transition.

Ultimately there is no free lunch. 

You can lose money from the balanced fund or even the bonds in the short duration bond funds. The Sharpe ratio of CPF-SA is infinity with a 4% fixed return. No living FA can recommend an alternative to CPF-SA which is why having an option from CPF Board remains the best solution for everyone. 

As such, readers who recommend completely banning investments using CPF-SA may even have a point.

c) Why some commissioned FAs were baying for my blood while complaining about low commissions from executing this manoeuvre

Fortunately, I have FAs out there who are my allies who can assist in interpreting the antics of the angry commissioned FAs who read my blog. The fact that FAs earn low commissions from implementing the hack was explained to me by my allies. In fact, many of them are happy to assist my readers who need this hack but emphasised to me that a certain level of DIY is still expected because this is a really low margin service. 

So the question remains: why are some FAs so mad with my proposal to nerf this hack when they earn so little from this?

One possibility is that this hack gives commissioned FAs a foot in the door to the client's trust. If a client can save $3,900 a year with the hack, there should be no issue buying a couple of extra ILPs bundled into the service. 

I'm not done talking about this issue. I should have one more article from the policy maker's perspective that I will launch if I am still alive after my second Pfizer jab tomorrow.

Do keep your comments coming...

Friday, April 23, 2021

CPF Shielding Lifehack is an Abomination that must be ended by the CPF Board

So a few really smart CPF hackers discovered this CPF lifehack that you can read about here

Apparently, authorities will populate your CPF Retirement Account with your CPF Special Account first before drawing upon your CPF Ordinary Account. If you allow the default action to take place, then you can lose out on thousands every year because you can't boost your CPF-OA's 2.5% to 4%. So some guy suggested that you buy third party products with CPF-SA just before your CPF-RA is set up (at age 55) and then sell these securities off to return the money to your CPF-SA after your CPF-RA is set up. This ensures that the bulk of your CPF-OA will be pushed into your CPF-RA and the CPF-OA monies will work hard for you from age 55 to age 65. 

The difference in returns is non-trivial, suppose the Enhanced Retirement Sum when you retire is $280,000, hacking the difference of 1.5% interest will net you about $4,200 every year.

Personally, I'm all for CPF shielding. I suspect that I may not need to do so because my CPF-OA is kept small by my mortgage, but this is a serious penalty for folks who do not understand or fail to perform this manoeuvre just before age 55.

What I'm upset about is that authorities actually allow the hack to even take place. 

To execute the hack, I am forced to buy third party products, earning them a little bit of kopi money through fund expenses and commissions, otherwise, I may have to sacrifice an extra $4,200 every year in free interest from the government.

To me, the fact that this hack exists is a failure of policymaking. 

The finance industry gets to earn something every time this hack takes place and thousands of uneducated citizens may not be able to execute this hack in the first place because they don't really understand our CPF system.  The pushes the importance of having a financial education even more. 

As a voter and citizen, we should not remain silent about this. 

The CPF board should simply ask the citizen whether he would prefer the CPF-OA to be used to top up into the CPF-RA first with the status quo as the default option. 

Give us a choice in the form of an online survey at age 55 instead of greasing the palms of the private sector (or some commissioned FA who would happily sell this hack to retiring customers. )

I think the problem is that very few citizens are aware of CPF shielding hack, why it exists, and why it's a consequential hack for us. 

As of this moment, it falls to financial bloggers and CPF ambassadors to provide feedback to CPF board employees and tell them that this is an issue that should be addressed ASAP. 

CPF board probably would not want to talk to a troublemaker like me, but if you are a CPF ally, please let it be known that Singaporeans are getting smarter and are less tolerant of weaknesses in our social security system.    


Monday, April 19, 2021

Personal Update - The Future is Quantum

 I'm in between books, so it is time for a personal update.

a) Business

The rule I apply to this current life is that I need one win out of every initiative I have every year. 2019 was a win on all fronts. 2020 was a bad year for investments but it was ok for my training business. This year my training workload has been cut by a third so training takes a back seat, but the market recovery has been really fierce so far so I should do ok in 2021. 

To ensure that things will not go as bad as 2020, I am farming my excess time into the Introducer collaboration with iFast. As in all things, there is a lot of work for very few rewards at first, but it's something that can potentially grow over the next 5-10 years. 

b) CPF and taxes

I'm finding it hard to spend money this year as my leveraged portfolios begin to gush dividends faster than I can spend them ( I can just Netflix and Disney+ all my excess time ). So my finances have taken a very strange twist that readers should probably not replicate unless they know what they are doing.

First of all, I invest my training proceeds into the portfolio built by my students, so I don't really earn much money. Second of all, I finally figured out that sole proprietors can avoid taxes up to 37% of earnings if they farm earnings into the CPF and have it distributed across all CPF accounts like a working person. So instead of putting making SRS my priority as in previous years, I have been farming my dividends into my CPF! The numbers will cap at around $37k, then I am likely to farm the rest into my SRS. A guaranteed 2.5%-4.0% is a beastly return when you consider how low bond yields are. Add the tax benefit and it becomes better than most endowment programs off the shelf considering that I only need to lock it in until I am 55. 

This combined action is likely to push my taxes to an all-time low in 2022 unless my business picks up in 2H2021. 

I think you really need an existential vacuum to forego 37% of your earnings and then on top of that $15,300 in SRS every year. I suspect most sole proprietors would rather farm it back to their own business than have it locked in their CPF. If you push me on spending, I probably have only one discretionary expense this year which is the iPad pro coming out in 2021. 

Otherwise, I'm waiting for a good colour e-reader from Amazon.

c) Learning and Education

As an IT guy I feel really threatened by Quantum Computing, so to conquer my fear, I took a break from learning AI to pick up the basics of Quantum Computing. There is only one programme from a Russian University on this topic on Coursera so I pushed myself through it. 

Amazingly, I can do all the MCQ questions and score quite well without understanding barely 20% of what quantum computing is really all about. This is likely due to the heavy dose of maths courses I did during my JC and NUS Engineering days. 

I still feel overwhelmed by the topic but studying it is strangely motivating. My guess is any paradigm shift beyond quantum programming will not be my problem anymore and it's something my kids may have to deal with. 

The good news is that Quantum Processor Units are not available in Sim Lim Square yet, when that happens, expect the NUS Physics degree to become the most sought after degree in Singapore. 

d) Future Projects

RI has invited me back to talk about personal finance again in 3Q2021. By then I would have worked closely with my three RI interns so should be able to create the next version of my personal finance presentation for young adults. 

I continue to look for such gigs as a means of giving back to society. 

e) Hobbies

I'm barely clinging to my D&D hobbies, having run a game just yesterday. Fortunately, thanks to Ryan Toy review, I started playing Dungeon Mayhem by Wizards of the Coast with my kids. My kids are starting to get familiar with fantasy tropes thanks to card games and Mobile Legends.  

Hopefully, the card game can be a gateway drug to a full-fledged RPG experience. 

f) What I am reading

As I just picked up the Dune RPG, I decided to continue with Frank Herbert's Dune series starting with the second book Dune Messiah starting in the second book, the Dune storyline no longer looks like the real-time computer game beloved by Gen X and becomes more like the political board games we used to play in the 1980s.

I should finish this book before attempting to read Jordan Peterson a second time. 

Thursday, April 15, 2021

Is Blue Collar work feasible in Singapore ?


America is disillusioned about getting degrees. Unless you are going to an Ivy League university, the odds don't look good as you'll probably be saddled with crippling loans after graduation. If you study for some shit degree like Gender or Ethnic studies, things get even worse because the university is where you'll spend 4 years blaming all of your problems on white men. 

So Ken Rusk, a successful contractor, wrote a book to exhort Americans to consider good old-fashioned blue-collar work. The logic is quite compelling in America - if you are willing to get your hands dirty, you will be able to find a job that pays quite well and avoid getting into crippling student loans. Some statistics are super interesting. An air traffic controller does not require a degree but can earn an annual income of $108,000. Even an electrician apprentice can earn $48,250. Plumbers are also worth quite a bit at about $60,000.

Another compelling reason to consider blue-collar work is that about 4-5 years of work will make you an expert and you are more likely to upgrade by starting your own business. This is really all about the American Dream.  

I was attracted to Blue Collar Cash because I was wondering why polytechnic grads want to study for a private degree so much. The latest numbers look very bad on the mainstream news. Getting a private degree in Singapore is like putting a sticker on your head to tell the HR company to throw your resume away. So why not do blue-collar work in Singapore instead, start saving money earlier, and become a contractor towkay later in life?

Three words why this is not possible in Singapore - Cheap Malaysian Labour.

Half of my family is Malaysian, but I want to say that Malaysian Chinese contribute quite a bit to our economy. By keeping the fees low, Singaporeans pay less for contractor services and haircuts and a larger proportion of our workforce do supervisory and management work. The fact that a Malaysian can pop into the country to cut your hair, then go back to JB to spend their hard-earned SGD makes it impossible for blue-collar work to pay as well in the US.

So the bad news is that this book cannot be contextualised in Singapore :

  • Local universities are not expensive.
  • Blue-collar work does not pay well as there are plenty of Malaysians willing to do the work for half the pay because they spend in Ringgit back home.
If policymakers solve this problem by creating a licensing regime for work like plumbing and electrical services, it would be welcome by Singaporeans who love blue-collar work but it is highly likely that Singaporeans will end up paying more, so this is not something that can be solved without a proper study. 

Sadly the rest of the book is motivational in nature and lessons about grit, accountability and setting goals is not something specific to blue-collar work and too generic to be novel for the reader. I might be better off reading Angela Duckworth's Grit instead. 

Also, the author shared that his own daughter has advanced degrees in Architecture, so there was no attempt at eating his own cooking by making his kids follow the advice from his book. This is a major turn-off for me because I believe in having Skin in the Game. 

Nevertheless, it is very refreshing to read self-help for a segment of society and I will look for more books in this genre. 

Having an involuted society like Singapore that focuses purely on managerial and knowledge-driven work is unsustainable. We need good career pathways for folks who are good with their hands with numbers similar to the US.  

The salaries in the US look really yummy - maybe ITE grads may wish to start planning to emigrate and go work in the US with the aim to start a business before their mid-30s. I would not mind executing this plan if my kids are academically disinclined in the future. 

It may be a happier life as your work is less desk-bound and there may be less office politics.

Monday, April 12, 2021

What REAL retirees want


For someone who teaches an Early Retirement class, I'm quite clueless about the lives of REAL retirees - the folks who do not succeed in their mission for Early Retirement. So after reading about all the scientific advances on immortality, I went into all the books I bought on Kindle but KIVed for some reason to look for some information on old age and retirement. 

It was not fun reading about old people. 

The book spent lengths talking about ageism in the media and talked about how Americans coped with loneliness. The financial statistics are not really counter-intuitive, most Americans do not have enough to stop work, but the book may be useful for businessmen because what Boomers have is plenty of money. It's amazing that brands are so obsessed with Millenials and Gen Z when it is a grandpa and grandma who really has all the money in the US (and SG). 

[ Case in point, I think whoever solves the problem of loneliness amongst elderly LBGT would be guaranteed laugh all the way to the bank. ]

One way to look at the elderly and the patterns of TRUE RETIREMENT is that retirees generally fall into four patterns in fairly even proportions. ( Note that I tried to 2x2 matrix with the OCEAN personality model which is not in the original book so I totally made that shit up ) :

a) Ageless Explorers ( Conscientious, Open to new experiences )

A majority of FIRE aspirants hope to see retirement as a time for opportunity and new adventures. Ageless explorers tend to be fairly successful careerwise and will attempt to reinvent themselves by starting a business or teach ( I did both ! ). They just see retirement as a better way to balance work and leisure but loath to give up their corporate identities.

You can cater to Ageless Explorers by creating schools for the Elderly so that they remain engaged with the industry. Platforms to hire them as consultants is also a good play.

b) Comfortably Contents ( Conscientious, Closed to new experiences )

Comfortably contents see retirement in a more conventional way. Retirement is a reward for a life that was lived well. The main focus is recreation and work will only be done to supplement their income and remain engaged with friends. They also see this as a time to be close to their families and love playing with grandchildren.

You can cater to Comfortably Contents with a travel package that caters to their needs. 

c) Live for Todays ( Not Conscientious, Open to new experiences )

Your crazy artist friend who lives a life of great variety will retire as a Live for Today if they are lucky ( If they are not lucky, look at (d) ). These retirees are free-spirited and have a lot of projects to do when they are retired. Retirement means new relationships, new jobs and new locations. 

The only problem is that these guys tend to more 'save as you go' and have to supplement their expenses with some work to survive. Live for Todays all experience a fair share of frustration for not planning financially in earlier stages of their lives and may feel that retired living is actually more constraining than they think. When ISP premiums start to rachet up, the Live for Todays will begin to exude cold sweat.  

My guess is that Singaporean Live for Todays may struggle here but may thrive in places like Thailand or Malaysia, so if you design a business for them, it may be to help them relocate that is more amenable to their YOLO lifestyles. 

d) Worried Strugglers ( Not Conscientious, Closed to new experiences )

As I have breakfast at different kopitiams in the Bukit Panjang heartlands, the majority of 'retirees' I meet are Worried Strugglers. It would also be wrong to call them retirees because they are struggling with day jobs to survive. 

Worried strugglers are more worried, less secure, less healthy and less happy. These are not the Golden Years at all. 

I can't even think of a business that caters to them. If you really do care, I suspect shutting the 4D outlets down will do them a lot of good even though they will probably curse and swear at you for doing it. 

Can I integrate these insights into my program? I think the goal of Early Retirement planning is to shut off scenarios (c) and (d) totally so that you can qualify to be (a) and (b). 

Saturday, April 10, 2021

Immortality - what lies beyond FIRE


The financial market in Singapore is booming and not even news on a delay in succession planning was able to dent the performance of my portfolio, but as of late, I'm less interested in my personal finances than what lies beyond FIRE, so I am gradually shifting my readings to books on longevity and ageing. 

As a type II diabetic, I am very afraid of getting old. If anything, I should be ageing faster than my peers. As of late, I am also not as enthusiastic as before with my personal outings. One reason is that I can practically own anything I want because I have access to Carousell and Amazon, the other reason is that I've mostly been there and done that. Netflix and Coursera keep me company if I am getting bored.

What I'm afraid of is that my mind can't keep up with developments in IT and finance. While I am well ahead of my peers in my ability to pick up new things, I know that once I can't keep up ( and I already don't care much about DEFI and SPACs ), it's game over for me. 

So I am now starting to become more interested in longevity. Biogerontology is a field that is quite difficult to understand given the number of MLM companies spreading misinformation about what is good for a person's health. There are too many Youtube channels backed by so-called Doctors who are not MDs. ( In the US, a chiropractor can call himself a doctor! Dr. XXXX, DC !)

Ageless by Andrew Steele seems more credible than many other books. Every assertion is backed by research and the reason why I trust him is that he does not trust the eating of nutritional supplements. Instead, he highlights the important research developments that can lead to longer lifespans. Part of the problem is that humanity does not classify ageing as a disease, so attempts to lengthen our lives are incidental to the elimination of illnesses and diseases. If you do not wish to attend another MLM nutritional seminar, we do not have an anti-ageing centre backed by rigorous scientific research. 

The pay-off to studying longevity is high and can be amplified by FIRE. Imagine wealthy people able to buy off an additional 10 years of a healthy lifestyle. The cumulative advantage of wealth would be enormous - just think about how much more CPF Life will have to pay if rich folks can pay money to live longer. Modern science can already lengthen the life of some worms by 10x. Imagine living to the age of 1500 years old!

As of now, I still can't act on some of my research. As a diabetic, I'm already on Metformin, one of the leading immortality drugs available to mankind. I suspect my other pill Jardiance has the capability to give me a couple extra years as well as it's kept my weight mostly down. 

I read that there is a possibility that supplementing my regime DHEA, a hormone, may improve the odds of living longer but local drugstores are not allowed to sell this over the counter.

Another promising candidate is a cholesterol vaccine called a PCSK9 inhibitor which I should start making enquiries with my specialists. This is the domain of rich, as results are still unknown but vaccine shots twice a month may cost $1,500 SGD in the US - nowhere near break-even point if you attempt to game your CPF Life on this. 

Anti-ageing may be something Singapore can readily make itself a hub for since it already has so many billionaires setting up family offices here. It makes a lot of sense to allow healthy multimillionaires the means to extend their lifespans with the latest advances in biomedical science. The first step though would be to recognise ageing as a disease and something optional once the right advances have been made in modern science. This will attract top scientists to ply their work here. 

Right now it's unethical to test an anti-ageing drug on an otherwise healthy adult.



Wednesday, April 07, 2021

Ideas on Wealth by Woke Academics


The FIRE community is grateful for the works of many sociologists in the past. The most important work is The Millionaire Next Door by Thomas Stanley. Sadly the field of sociology has been co-opted by left-winged bleeding hearts who'd rather find excuses to soak the rich and distribute their wealth to others. To these guys,  it is immoral to profit from conducting a business and climbing up the economic ladder, but it is perfectly fine to use taxation to take wealth from others who earned their money legitimately.  

As much as I hate this current generation of woke social scientists (especially the more self-righteous academics in NTU), I try very hard to keep up with their works because the moment people start feeling hope is lost or social mobility is non-existent, they will invoke these papers to support wealth redistribution. At the moment, we're seeing attempts by the US to coordinate a tax hike for all G20 countries. 

I think the book Wealth by Yuval Elmelech does an adequate job summarising the latest developments to study the accumulation of wealth. I managed to complete the book in two days but it's not an enjoyable read because it's written in a really boring manner. Also. readers who think that it can shed some light on how wealth is accumulated should ignore this book and read Thomas Stanley instead.

There are three barely useful ideas to keep in view.

a) Wealth inequality will be more central than income inequality

I suspect the left is trying to convince governments to invent a new form of tax that targets your wealth level instead of your income level. In many Western countries, welfare systems are unsustainable and consumption and income tax are already really high. The welfare queens, being lazy bums as they are, now want wealthy taxpayers to pay a portion of their wealth to the government coffers. Another-words, a 0.5% wealth taxation would ensure that a millionaire pays $5,000 on top of paying higher income taxes and GST. In Singapore, property taxes are a stealthy form of wealth taxation.

Sociologists are backed by data that shows that even though income inequality can be kept under control by income taxation, wealth inequality remains high. Expect a lot of research to take place here over the next few years. 

Wealth taxation is fine if it is one-shot, and allows a country to get out of a mess like the pandemic. If a wealth tax is levied every year, people will lose their motivation to innovate and to improve their lot in life. Who wants to work hard when all the money they work for will be used to subsidise all the welfare queens in society?

b) Risk transfer from companies to employees

Sociologists are obsessed with the transition from defined benefit plans to defined contribution plans. The idea is that company pensions use to guarantee a fixed benefit/return for their workers but companies do not wish to take that risk anymore. They prefer to get employees into defined contribution plans where employees choose where their money can be invested. 

I don't see anything wrong with pushing the risk to employees - Employees need to pick up some basic investing skills to do better than their peers, it's their money after all. There will be some employees who will make even more money if they have the right investing skills. Also, I doubt the professionals who manage these defined benefit programs know any better. In a low-interest-rate environment, they'd probably find excuses to lower their returns anyway to keep their funds sustainable.

What is ludicrous is woke Singaporeans lamenting about defined contribution plans when this cannot be recontextualised here. Our CPF program is a defined benefit plan and the political left is always complaining about it. 

c) Cumulative Advantage and Disadvantage of wealth

I don't understand why is this a thing?

Suppose you come from a wealthy family and you decide to study law. If NUS can't take you in, you can fly to the UK and get some Law degree but your parents got your back. They can pull some strings to force their lawyer vendors to take you in for practice training. So because you are wealthy, you get social and cultural advantages beyond the value of your wealth. Even better, you can pass these social advantages onto your kids.

Maybe the sociologist professors have a point. 

But I'd also point out to the sociology professor that she probably committed assortative mating and dated another degree holder (often another PhD), and also contributes to inequality in her own special way. Her kids may inherit her intelligence and conscientiousness. Why are sociologists not promoting equal sexual access where well-educated women grant sexual access to BBFAs, men with below-average height, and INCELS?

Societies have actually come a long way. In the 70-80s, if your vehicle accidentally overtakes a royal in another SE Asian country, you may get beaten up because... the dude you overtook was a royal.

This is a Euro Board game problem. One aspect of successful game design is that players who are on the losing end must have a game mechanic for them to get back on top because otherwise, the game is no fun. People want to gamify the real world. 

Anyway, these ideas are still in the incubation stage in academia and I think serious investors should study them carefully. One day some opposition Phd politician may take these ideas out for a test drive so rather than hear repeated calls for a minimum wage, we may be hearing innovative ideas like wealth taxation. 

If everyone is getting rich in Singapore and advancing together, the opposition MP will just become a joke on social media. 

However, once younger Singaporeans feel stuck and can't advance in life, the torches and pitchforks will come for Singapore investors and landlords first. 


Sunday, April 04, 2021

Brutal Truths about Modern Dating in Singapore Part II

The previous generated quite a number of hilarious exchanges in the FB finance forums so I thought a follow-up post should be in order.

I think a large part of the hilarity came from the piece de resistance that was this table I posted which, in my humble opinion, is as revolutionary as Copernicus' heliocentric model applied to the dating context in Singapore.  

Let's look at some of the feedback from my fans and critics. 

a) Why some guys who rank 7/10 in income do not have air stewardesses throwing themselves at them

The first criticism I received was a question from a relatively high-earning guy. He ranks about 7 on the income scale and complained to me that air stewardesses are not exactly throwing themselves at him. 

There can many reasons why mismatching occurs in markets. I had a field day buying UMS as it rose from $0.50 to $1.30. Sometimes, a stock is priced way less than what it's truly worth. I think my friend is a hidden gem.

One question is whether my friend is signalling a seven from his external mannerisms and deportment. He admits that the way he dresses signals at best a 4 which is about how much I signalled when I was single. 

At the end of the day, guys need to know that women cannot telepathically figure out what their salary is when they swipe to the right on Tinder. Gen X female private bankers even help their pals assess the net worth of their potential boyfriend salaries.

If all else fails, just buy a Lambo. 

b) Table alignment of top actresses does not match with income requirements 

A lot of folks KPKB (particularly lawyers not married to hot actresses) about this point, so I need to make a clarification of my table. The argument is that the women who score an appearance of 9 are rated along with international actresses and many men felt that even with a monthly income, $15k is not enough to marry such a successful actress. 

My table is a comparison guide based on appearance to help people benchmark themselves. At the 90th percentile, this is only two standard deviations better than the mean. While Elisabeth Olson is the benchmark at 9/10, a lot of women who look great are actually not actresses. She can even be a hot chick next door.

If you don't believe me, google "Gal Gadot stunt double" and check out the images.

c) Low earning men in Singapore can become high earning in another part of South East Asia

It's probably Divine Providence that this article arrived on Mothership. The owner of the Vietnamese Marriage Bureau was my history teacher in secondary school. A discussion on my alumni group confirmed that his Vietnamese bride is his third wife. 

Readers have rightfully pointed out that the power of the Singapore dollar allows single men to translate their salary to another regime to get higher scores. So theoretically a Singaporean rated 3 at $4,000 SGD per month becomes $12,000 per month MYR in Malaysia which puts them straight away at a score of 9. 

I agree with the general logic that low earning Singapore men can resort to getting foreign brides, but the truth is that while they are settling down on Singaporean soil, their expenses would still remain high. Also while foreign brides acclimatise to Singapore society, their preferences will become local as well and this can create a lot of friction within a marriage. 

A better approach would be to set up a new family within that foreign country. 

Of course, the model will only have as much explanatory power as single-factor models do in finance. If you examine the way women make decisions, the way they screen men can be quite strict. 

A good screen some women mentally use is like this :

  • Height above 50th percentile
  • Income > My earnings
  • Take the highest score that is willing to date me. 
We know that if a stock screen is positioned too strictly, it often results in 0 stocks. 

We can't blame women because parental investment for the female gender is high. Women need to undergo nine months of pregnancy and can only raise a few kids at most simultaneously. 

Men can generate millions of sperm from 10 minutes of hands-on effort.


Thursday, April 01, 2021

Brutal truths about Modern Dating in Singapore

Disclaimer: This post will trigger a lot of people who will say that I am generalising too broadly with my model and that it can be disproven by anecdotal evidence. I just want to say that ALL MODELS ARE WRONG. We construct models to understand a phenomenon better and possibly predict future behaviour. If there flaws in a model, we can always finetune it to make it better.

Recently, I've been spending more time on NUS Whispers where I can relive the olden days when I was a relationship troll in nus.talk.romance

The basic relationship problems shared on that FB group has not really changed over the past 20 years and I think young folks may benefit from constructing a simple model that resolves most of the unhappiness when it comes to relationships. 

In this article, I will present a very simplistic model on modern dating practices in Asian societies and then I will try to explain why it causes so much pain to Millennials and Gen Z. I may also propose some trade-offs and solutions. 

We will first examine the most simple mating preferences of Singapore or Asian women. Singapore women are deeper than Singaporean men and employ a multi-factor model when valuing their men. But for simplicity's sake, let's just assume that Singapore women rate their men based on earning power. A large number of posts in NUS Whispers is angst about the low earning power of potential husbands, so we'll just make a hypergamy assumption.  

So, how do we score men using this single-factor model? By looking at income data from government statistics.

How do men score women? It's even simpler, men have not evolved from his neanderthal roots. Evolutionary psychology combines facial symmetry, hip-to-waist-ratio into an attractiveness score. Simply rate women based on attractiveness and let the bell-curve god do the rest.

So our crude model has a single score to rate men and women. It can look like this :

Now, let us look at the constraints impinging on our model. 

In modern societies, Asian women don't simply match their attractiveness to a mate's earning power directly. They need prospective husbands to earn more money than they do. So a woman earning power of 7/10 can only marry men who are 7,8,9 or 10 from an earnings perspective.  A mismatch occurs if she only has looks of 6 and below. On the other hand, even if a guy is low earning, he may not want to settle down with a woman who is 1 or 2 in attractiveness. 

(There is always pornhub and Geylang.) 

So this model predicts the following :

a) Low earning men and high earning women stay single

The easier conclusion that comes from this model is that men who have low pay stay single. The rate of singlehood can be brutal when aggregated confirming that greater singlehood will be concentrated at lower ends of the educated spectrum. For women, the opposite occurs, the more well-educated she is, the most she is likely to stay single. Having an above-average IQ increases the marriage rates of men but decreases it for women. Statistics will also support the prevalence of local-foreign mating pairs, especially among lower-earning men.

This will be a source of many postings on NUS Whispers in time to come. 

b) Male traders who flaunt trades during the US Tech boom may be compensating for poorer educational qualifications 

Administrators on popular finance FB groups have been cautioning members not to show off their super-successful trades in TSLA and other US tech stocks, but we're still seeing a lot of trader bros showing off their 500% returns without explaining their thought processes behind them. 

Why are these "flexes" of investing genius are always committed by men? 

My hypothesis is that absent the signalling effects of educational attainment, successful trades are a sign of future earnings potential. 

This is the same as a male peacock showing off their beautiful plumage.

That being said: I really miss these traders bros. They seem to have disappeared lately.

c) Really smart women may take on roles beneath their true earnings potential in the workplace

I'm saying this with a lot of worries on my mind because I hope my daughter does not need to do this in the future.

While men have to puff their finances up, really smart women who want happiness in life may suppress their true earnings potential. This can be done by joining nurturing professions like childcare and nursing to seem less intimidating to men. 

In essence, women are playing themselves down so that their future husbands will not lose face and be seen as "eating soft rice". 

This is a really powerful model when explaining dating mechanics. 

When I was out with my ex-colleagues who are all about half my age, they told me a story of a lady friend who, against the advice of her pals, dated a playboy and got a not-so-nice disease after a brief fling. I explained that the playboy is probably a 7-8 but he's smart about dating. Instead of targeting another 7 or 8, he chose to build a harem of 5-6s that are at his beck and call. 

I predicted that the lady must be somewhat plain but the playboy has some K-pop Oppa flair and fairly well to do. I was spot-on regarding my analysis. 

Given her looks, the lady cannot possibly find a boyfriend of that kind of quality anywhere else. But she is wasting her time because he will eventually find a 7-8 to settle down with later in life.

To conclude this article, what is the most important pre-requisite before getting into the dating game? 

Know your score and your decile. Know where you stand compared to your peers.

When I was in my 20s, women who were rated 8,9 or 10 would come over and speak to me. 

When faced with this, I normally open with "You are selling insurance or MLM?"

I was 100% right in all of these cases.

Because in my 20s, I don't attract 8,9 or 10s.