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. 


  1. The reason is that you have a very capital efficient business + decent quantum of income. Essentially just paying your family living expenses. Nil staffing, nil-to-minimal capex, nil rental, minimal marketing (profit sharing with Dr Wealth).

    Used to be Buffett's modus operandi to collect large amounts of capital efficient & FCF-gushing biz & just sit on them for decades, collecting an ever-increasing stream of dividends along the way.

    "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."

    PS: Some bizmen or sole proprietors with excess cash or non-taxable investment sources of income may actually use this method to evade income tax. So gotta be careful & keep good record of biz earnings.

  2. Too much spare time and money burning a hole in your pockets? Get a mistress!

  3. Actually the amount you can put into CPF is proportional to your reported taxes, so it pays to be honest about your earnings if you want to max out your CPF Life for later. It's not evasion because you need to earn more to get taxed more before the government will let you contribute to CPF.

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