Tuesday, August 31, 2021

The moral dilemma of educating Mr. Shitcoin


I’ve finally found an interesting puzzle for readers to solve. 

Mr. Shitcoin is a friend of a friend, and his case study is very interesting and challenges the boundaries of what we mostly know about financial education and the morality of financial knowledge. According to a friend, Mr. Shitcoin was an ex-uniformed services personnel who is so gormless, well after age 55 he actually forgot or was wilfully blind to the idea that that he had money left in his CPF. 

So I started having a theoretical discussion with my friend and discovered two unresolvable dilemmas. 

( NB: As neither me or my friend is at age 55, we are still not clear administratively what happens when CPF knows that someone reaches that age. Nevertheless, I think it is still fun to think about these two moral issues. )

A) Whether Mr. Shitcoin should buy a high-end sports bike to reward himself.

The first point of friendly disagreement is whether Mr. Shitcoin should buy a high-end competitive bike to reward himself as a mid-life crisis reward. In our discussion, we agreed that Mr. Shitcoin is a nice agreeable fellow who lacks conscientiousness. 

My friend, who is more knowledgeable about bikes,  argued that this is a mid-life crisis so Mr Shitcoin should not buy a bike. High end bikes might also be faster and present a bigger danger to him. 

I argued otherwise.

I reasoned that a bike as a dream reward is nowhere near a European car, a divorce,  or, worse, a law degree which cost me $500,000 in opportunity costs. I reasoned that Shitcoin needs to buy a bike to get it out of his system so that he will feel that his life in public service was worthwhile. I explained that I cannot change my own position because my mid-life crisis was way more extravagant and my JD cost me $500,000 and I would replay the process of studying law all over again even if i knew that it would result in no career after that. I just need to get it out of the system much like a trip round the world.

B) Whether Mr. Shitcoin needs to know about pledging home equity to draw more money from his CPF 

Before I continue, none of us knows whether CPF would automatically allow the drawing of the maximum amount accounting for the home equity pledge when you reach 55 years of age. So I am unclear as to whether I need to explicitly pledge my property to withdraw an extra $90k from my CPF account. In my case, I hope to put ERS or $270k+into my CPF-RA, so this is not even an issue for me.

My friend reasoned that it is better not to inform Mr. Shitcoin of this option because he can’t handle his money on his own and this knowledge may destroy him as he will proceed to distribute his CPF to needy friends and relatives.

I took the opposing position that it’s our god given right to destroy ourselves with our own money and that this is not a loophole like the CPF Shielding hack. Home earners like Shitcoin earned the right to withdraw what is rightfully theirs so it is morally wrong to keep Mr Shitcoin in the dark. 

What do you readers think ? I think my friend has a point as equally valid as mine but we both agreed that he was Neutral Good and I am Lawful Evil in outlook hence the disagreement. 

Apologies to folks who thought this were a cryptocurrency post.

Saturday, August 28, 2021

Letter to Batch 22 of the Early Retirement Masterclass

Dear Students of Batch 22,

It’s been a great honour and privilege to be able to conduct a 2-Day Early Retirement Workshop for you.

This is a period where many investors in Chinese Tech stocks are feeling edgy with the intervention of the Communist government on the workings of their most innovative companies. While local income investors have primarily been shielded from significant losses so far, I’m reminded of what the ERM program went through in March 2020. This is a reminder to stay humble when you invest and don’t laugh at folks experiencing a downturn.

The Ghost Month has also seen most of the ERM portfolios lose a little bit of their value, making it a good time for the students to engage in some bargain hunting. I hope you will see this as a golden opportunity to build your first portfolio if you have not done so yet.

As I tried to provide more practice for the class this year to review each stock pick qualitatively, you will find that our portfolio is quite extensive compared with earlier batches. We have a portfolio of 20 stocks for this run which will stretch the size of the portfolio I will build for this batch of students. This batch has also decided to be more adventurous with local tech counters.

Hopefully, Singapore’s COVID containment strategy will succeed. We will benefit from more travel receipts and tourists within the country, which will have a knock-on effect on some of our investments. This portfolio is also more aggressive given the more significant number of local tech stocks that were reviewed and approved for portfolio inclusion.

Lastly, I hope that Batch 22 would participate actively in the FB group.  In end-September, we will be conducting a community event where we will consider the ERM approach to investing in Chinese stocks for yourselves and members of the public to showcase material from the ERM course.

Hope to see you then!

Christopher Ng Wai Chung

Friday, August 27, 2021

Should internet marketers behave with more class ?

I'm in the middle of conducting my class, so I don't expect to be blogging, but a very large financial education provider which is almost a household name today was suspected to use my partner's keywords to do their internet marketing. This created a small scramble when I started to consult some of my pals on whether my business partner has a civil case and what steps we need to take to deal with future occurrences. 

Balancing a little bit of legal research along with some feedback from my friends in the SME sector, I have to accept that the use of keywords to push up rankings to get views is a common practice, likely because most victims are rational and will not risk more capital to stem the small amount of fianncial damage that is not easy to quantify. 

Ultimately it falls to internet marketers to determine how they want the public to view them. 

I've worked with great marketers but I also worked with quite a number of scumbags. Sometimes you can't tell them apart because the brand perception comes months after the campaign ends after a lot of goodwill is lost after spamming the public.

Some of the lousier marketers just want to attract eyeballs and they don't really care what happens to the brand going forward. I've seen the way how some truths become bent just to attract a larger crowd. 

The differentiating factor between a good marketer and a bad one is class. 

Those with class will spend more time understanding the brand and will focus on end-to-end conversion rates. Those without will ring-fence their responsibilities and wash their hands clean once the ad achieves a requisite number of hits, regardless of the final sales outcome. 

To me, if this were deliberate action, this large education provider has reached a new low in hiring this kind of marketer.

I think it takes a really low-class marketer to use someone else's brand to hijack eyeballs from another. Although I think we can take the higher road for this incident, I doubt this will be an isolated event. 

I'm grateful that my business is not affected by this, because if the victim were my business, I will take legal action once I have just 51% chance of success. 

A nice public open court hearing will expose these internet marketing practices to the world at large and we can let Singaporeans decide whether they want to associate themselves with the offending brand.  


Sunday, August 22, 2021

Robo-Advisors versus Financial Advisors


I was thinking about the panel I had with The Artist Formerly Known as Money Maverick or Luke Ho, and he mentioned an interesting tidbit about how much concern robos have been causing to FAs. I was also able to read an entertaining tirade from an angry financial advisor who wrote a nasty FB message against the Syfe product offering ( If I were Syfe legal counsel, I would act against that clown ).  

These two events have caused me to spend the past few days thinking about whether investment trainers can work with robo-advisors closer in the future.  

As of now, I'm not convinced that we should do so. 

Robo are still quite mum about their algorithms and in a place like Singapore, the biggest strength of using a robo to do tax-loss harvesting cannot be realised in our tax regime. Furthermore, my guess is that robos are running on VC funding right now, and would either have to consolidate or raise fees in the future.  

The only reason I like robos is that they make FAs nervous and can potentially wreak havoc with middlemen commissions should they become more mainstream here. 

Here are some random points from my thinking aloud:

  • It is theoretically possible for DIY investment trainers to work with robo-advisors. Not all investors have the time to build a portfolio of their own, and the risk of cannibalization is very small. 
  • DIY investors still make plenty of qualitative decisions that robo-advisors will never be able to replicate. This is important because qualitative differences may drive future alpha generation for either side. Robos will not be able to win over the best retail investors anyway.
  • DIY investment trainers with any backbone would seek more information on the way the robos function. For me, I need to understand it to the point until I can code the program myself. Otherwise, it would be hard to entertain questions from students on how robos work. I got one data point on a S-REIT based robo and for the life of me, I can't even explain why it underperformed so much compared to a REIT portfolio built by my students, almost all beginners. 
  • It would also be useful to know how much will a robo need to charge existing clientele to break even. Surviving on VC burn rate is not sustainable. 
  • My ideal scenario is multiple robos will need to provide algorithmic transparency so that a trainer can explain the differences between each product offering and can show students how to pick a robo without conflict of interest. 
  • The unpleasant alternative is for one robo to sponsor the cost of running a training program, but I won't do it even if they paid me and I won't recommend anyone attend a course like this. You pay me with more transparency and not cash. 

As it stands, anything that makes financial advisors nervous is a good opportunity for the training industry because we know that there is still quite a lot of fat to trim and middle-class Singaporeans cannot continue to always sponsor a caste of commissioned salesmen and pay for their Audis when they also have to sponsor expensive tuition agencies as well.  

If robo-advisors band together to build an association to standardise the rules on transparency, I am open-minded to an alliance if it means more Singaporeans are educated on personal finance. 

Because even America has to get out of Afghanistan after 20 years.

Thursday, August 19, 2021

The Great Resignation

While China is busy contending with the "Lying Flat" movement, where young people are rebelling against their work culture, the US is also facing a different work phenomenon. Apparently, the number of folks resigning from their jobs reached the peak in April 2021 and managers are struggling to keep their employees. 

I've only read a few articles on this phenomenon and I can't wait to see what social scientists can say about this. 

Here are some of the reasons that can possibly be a driver for The Great Resignation :

a) Folks stuck to their jobs during the pandemic now think that it is time to resign 

One explanation is that a lot of folks were stuck with jobs they don't necessarily like during the pandemic but they could not resign then because it's hard to find a new job then. When the vaccines started getting deployed, the economy opened up and it's time to move onto something new. 

The workers who are affected the most by a more negative workplace are workers in the hospitality, F&B and leisure sectors.

b) Folks can see a life beyond the standard daily commute to the office

Another explanation is that the pandemic forced a lot of companies to make it easier to work from home and employees have gotten used to this arrangement. As the economy reopens, middle managers are pushing to get their employees back to the workplace, so employees are looking for a new company that is willing to make work from home the norm. 

This explains the number of professionals who are quitting the workplace. 

c) Generous welfare cheques reduces the motivation to carry on working.

The third reason is that during the pandemic Biden was generous with welfare cheques to help Americans get through their lives. Some Americans may have been able to squeeze the welfare cheques for a much longer time than others so may be able to go without work for a longer period of time. 

I like this explanation because it explains why Singapore is not experiencing our version of the Great Resignation here yet.

The long term repercussions of any recessions are always very interesting. 

In the last Great Recession, labour economists found that some single men got so discouraged, they basically left the workforce and never returned to having a regular income. Surveys on personal happiness were kept up because of video games, social media and streaming. This led to the birth of the Incel subculture. During this pandemic, the labour participation of women was hit much harder than men, and it would be interesting to see what happens over the next few years. 

Tuesday, August 17, 2021

Singapore as the Kryptonian Red Sun Theory


One day idea shared with me in the Lothlorien chat group is the idea that Singaporeans are like Kryptonians who are constantly under the Red Sun. 

This idea originally came from Superman comics. It is known that the Green Kryptonite can kill Superman, but Red Kryptonite can render him powerless and ordinary. Before Krypton was destroyed, the entire planet existed under the Red Sun, so Kryptonians are just ordinary people on their home planet. When Krypton was about to be destroyed, Superman's scientist parents sent him to Earth where he came under the influence of the Earth's Yellow Sun which gave him godlike powers. 

There are two useful applications of this theory :

a) Mediocre Singaporeans will do much better academically in a Western country like Australia

The original idea was a comment about just how brutal our education system is. Even when I was cramming for a 3-year Law School programme, I realised that somehow, my daughter has to study almost as much as I do. And it's always CL2. My daughter even had to maintain a diary with drawings during the last holidays. The questions posed in primary is already quite difficult and this has caused a buildup of a very profitable tuition sector for ex-teachers. 

As a child of the 80s, I can attest to how my fellow Singaporeans had such a good time when studying in Australia. An Australian does not have the same pressures as a Singaporean, if they are not academically inclined, they can do very well as a miner. Even their minimum wages were one of the highest in the world. Singaporeans who come back from Australian universities always developed a more exuberant personality while abroad, whereas those who stayed put always lose a bit of their individuality back home. Some even go batshit insane studying in a pressure cooker like NUS. 

This is why I doubt that Singaporeans will choose to Lie Flat and pull out of society. Why not emigrate to Australia where you, too, can become an academic Kal-El?

Interestingly, no parent has considered the geo-arbitrage possibility where they save up the fees that should have gone into a tuition centre into an Australian degree. 

I leave someone else to do the maths.

b) Singaporeans who save and invest aggressively here can look to a better lifestyle somewhere else

This Singapore Red Sun idea can also be applied to personal finances. Because of frugal roots, we find that Singaporeans save 20% off their take-home pay in our CPF. Beyond that, savings into REITs and blue-chips do not attract capital gains and dividends taxes. This means that most Singaporeans with about 10 years of working experience in Singapore would have accumulated more assets beyond most Westerners in the same income band.

If a Singaporean emigrates to another country, he can pull out all his savings and should comfortably be able to buy up landed property and a car in another country. As savings were accumulated tax-free, it is theoretically possible to pull put an investment in a foreign country and begin to supplement your income with dividends from day one, and this time your CPF money would be fully under your control. 

The only weakness is that you'll be paying more punishing taxes in your new home. 

If any Singaporean wishes to move to a Westernised country, based on the work my students have done, they need to supplement their lifestyle with some work, but it can be very chill and relaxed compared to Singapore. But if the Singaporean moves to another country in Asia, retirement is definitely possible on $500,000 SGD. 

I think as we celebrate National Day this week, we should appreciate the fact that we've grown to be disciplined people that can turn our personal struggles to be something meaningful. If anything, networks of ex-Singaporeans have sprouted up in many overseas countries allowing us to have a taste of what it's like to live and play away from the Kryptonian Red Sun.

I will stay because my investment income has already broken free from the gravity on Planet Singapore. 

But the question for readers is this :

Will you stay or will you go?



Saturday, August 14, 2021

The Future of Finance is Female !


One area I'm focused on is to make my program more diverse and gender-inclusive. But I can see how hard it is given that my program does not stint on numbers and it focuses on making hardcore financial decisions. Currently three-quarters of my student population is male and there is more room to expand by making the program more appealing to women.

To overcome this hurdle, I've been doing more pro-bono work focused on feminine finance to see how I can do better.

There are two very interesting projects coming up :

a) Podcast on Gendered Finance with MissFITFI

The recording for this segment is complete and MissFITFI's powerful army will spend the next few weeks heavily editing the material. I've been pushing for the idea of a serious discussion of women's issues in Finance but I can't seem to find a good platform to discuss this intelligently because of the "sausage problem" in the financial blogosphere. Most financial bloggers are guys.

Naturally, I wanted a more controversial discussion so I asked MissFITFI whether she wants to talk about whether specific forums for women on the topic of investing make any sense. In this case, I volunteered to take the more untenable position, so I tried to argue that financial forums specifically for women are not necessary and that forums that invite both men and women are good enough to assist women even for issues very specific to them. 

Regardless of whether I successfully defended that idea, I think all of us doing the podcast had a lot of fun. 

When the podcast comes out I will point you guys to it. 

Should be fun.

b) Presentation to a women's network for P&G

I'm taking this project super seriously because it's an alumni homecoming for me. I will be speaking for 45 minutes next week on the mechanics of Early Retirement.

I might be tooting my horn for my first company, but I dare to say that if there is a talented Type-A female graduate, P&G will go all out to recruit them into the organization. As expected P&G did not beat around the bush and they were very direct and even gave me examples of presentations that did not meet their standards in the past.

An amazingly some of the stuff that's revealed to me is pertinent to the podcast I have just done. I was telling MissFITFI that money forum's that exclusively cater to women would go overboard with emotional stories and narratives. These stories take up so much bandwidth, there's very little room for actionable items. Worse, to make meaningful financial decisions, a numerical discussion is often unavoidable.

As it turns out, if you are a commissioned salesperson and you choose to adopt more style at the expense of substance, some really smart women will bite you pretty hard and they won't let go. 

For my P&G talk, I made no attempts to retrofit my material specifically for women. I did the opposite and pitched it much higher level - at the MBA level if possible. From my experience, P&G women are not expecting to be saved - I am at best a Steve Trevor like personality in this story. 

So this is what I think I missed out on talking about in the MissFITFI podcast. A veritable truth in marketing is that packaging something for women can be very profitable. Some self-improvement guides can double the volumes sold simply by colouring the book pink and marketing it from a woman's angle. 

But if you take it too far, I think some people  (especially female FAs)  can be seen as insulting a woman's intelligence. A friend, after hearing my story, even remarked whether the financial talks need to pass a Bechdel Test.

Anyway, if I wanted to hijack a woman's emotions, it's not too hard. I helped out in divorce cases before, I can speak with authority about the ways some nasty men can hide their assets and make life difficult for ex-wives. Getting women to focus on their personal finances by displaying some of the worst traits of men is not taking the high road.  

I prefer to use facts - Women live longer than men, they probably pay more for annuities, so financial security and retirement is not a soft fuzzy matter to them. 

In fact, it can be way harsher given the salary gap they have in the workplace. 

Wednesday, August 11, 2021

Maybe we will be better off with a more authoritarian regime

Ok, something more interesting to share on National Day week. 

Maybe I’m slowly becoming a cranky uncle, but I’m beginning to miss the old days where Lee Kuan Yew would meet you at the cul-de-sac to resolve any political differences with him. 

One of the reasons is that I live in Woodlands and for more than a year, Marsiling Mall hawker centre had that policy of charging an extra $0.50 to use a tray and then, to get back your money, you needed to return the trays to the conveyer belt. Execution was expensive and muddled, I had grassroots folks or “ambassadors”  basically staring at me while I ate my food. I even scolded them for trying to take picture of me. The truth is that these ambassadors are facing a rebellious lot in the North. I’ve seen some old Chinese uncles would buy the food from the stalls, make a mess on the table and then return just the tray to get their money back, they’ll do anything to stick it to the government. 

It was then that I realise that Jackie Chan was right, Chinese people need to be governed. When the government started to impose fines for not returning trays, hawker centres became a lot more pleasant to hang out in. 

I don’t know what is wrong with policy makers, maybe they are infected by the Left as in many Western countries. A lot of money can be saved if we moved towards a fine immediately. By shuffling their feet and focusing on consensus and experimentation, the government makes itself seem weak and effete.   

As of now, we’re not dealing with recalcitrant tray non-returners anymore, there is a tribe of anti-vaxxer’s trying to frustrate our efforts to vaccinate a large part of our population so that businesses can resume. This movement is gaining traction and I can see some really unscrupulous individuals trying to monetise and sell products to these group of people. Over the past few days, friends who infiltrate these anti-vax groups have started sharing with me stuff that’s off the charts, from some religious fundamentalist claiming that a vaccine marking is the Mark of Beast to some new age spiritualist who think that spiritual purity will protect them from the virus. 

I think by now, we should know that the gloves are off. Our vaccination numbers are large enough for us to provide a firm differentiation between those who are vaxxed and those who are not. 

But that is only the beginning. 

Both PAP and WP support the vaccination efforts. I fail to see what political capital can be sacrificed if we pass some laws to deal anti-vaxxers. If we don’t do anything about these folks, they may evolve into a kind of 5th Column in Singapore. The government will have it’s hands full with the Leftists and Anti-Vaxxers in time to come. 

Human nature is like this. 

A percentage of the Singapore population is too disagreeable and non-conscientious to support policies that benefit everyone. If anything, they just want to watch the world burn. Social media enables them to form groups and even find corporate sponsors at the same time.

I hope before out National Day celebrations, the government can take firm action against anti-vaxxers in Singapore. 

If we can’t take them all down, taking down their leaders should set some kind of example for the rest of the country.

Monday, August 09, 2021

Happy National Day everyone !


Happy National Day Readers.

I was initially planning an article on retiring overseas but Seedly beat me to the punch. You can read their excellent article here

While I'm not really burnt out, I've been reading a lot but do not have a lot of insights recently. 

Maybe if I get some inspiration this week or if readers want me to write about something, you'll get something entertaining. 

In the meantime, enjoy your holidays! 

Saturday, August 07, 2021

Philosophers who inspire the FIRE movement

Something short for this weekend, with the Lying Flat movement gaining traction and possibly fuelling the FIRE movement, it is time to review three philosophers that can be said to be basis of both movements.

a) Diogenes

Diogenes was part of the Cynic movement and can be said to be somewhat like an Ancient Troll. He was banished for the debasement of the currency and exiled from his city. 

Reviewing his life, it is no wonder that he animates the Lying flat movement. He lived in a clay wine jar that belonged to the temple and was said to throw his only clay bowl away when he saw a peasant drink by cupping his own hands. What is not mentioned by proponents of the Lying Flat movement was that Diogenes also masturbated in public and defecated in the public theatre. 

His philosophy is quite regressive if viewed from a modern lens, the central tenet that artificial societal growth is antithetical to personal happiness. 

I can imagine the Chinese Communist Party is very defensive if modern-day Diogenes arose in Chinese society. 

b) Heraclitus

It is not clear how Heraclitus the “Obscure” can inspire the Lying Flat movement. He is a metaphysician who proposes the idea of the unity of opposites. The opposite of justice is strife, and consequently, we can only know justice from understanding what strife is. His other idea is that we’re constantly changing. 

I suspect the movement just wanted to say that Lying Flat allows people to think about life the same way Heraclitus does. Still, I can imagine this might take some effort in ancient times as empiricism is not even invented yet. 

Heraclitus may be more beneficial for the FIRE movement as he was a precursor to the Stoics. 

c) Thales

Thales of Miletus is not part of the Lying Flat movement but, combined with Diogenes and Heraclitus, and they form an exciting triad for further research. 

Thales is more of a mathematician who pioneered the idea that everything was water. His contribution to geometry was quite extensive, but it is what he did with this life that makes him an icon of the FIRE movement. 

Thales was the first person who understood how to setup a monopoly. He was able to predict that olives would have a good harvest at a particular year and cornered the supply of olive presses. The resulting boost in demand for the presses made him a rich man. 

Hopefully I’ll have something better on National Day.

Tuesday, August 03, 2021

Why Singaporeans need to cultivate the Bronze medal mindset

The Greek Philosopher Plato once imagined a utopia that divided men into three castes. 

  • Men of Gold are philosopher-kings and have an affinity for Reason. 
  • Men of Silver support the men of gold and are their auxiliaries, they function as soldiers and stewards for the rulers of society and have an affinity for Courage. 
  • Men of Bronze are the core producers and consumers of society so they have an affinity for their Appetites. 

In Singapore, everyone wants to be men of gold. Why else study so hard to get a scholarship so that they can become a mandarin?

I think that if we design a lifestyle independently of what people say, we should cultivate a Bronze medal mindset. Psychologists are now saying after studying Olympic medallists that, while gold medallists are happy after becoming number 1, silver medallists seem more miserable than bronze medallists. The logic is that a silver medallist will spend the rest of his life knowing that he's this close to getting gold, whereas the bronze medallist is grateful that he was able to get a medal at all. 

As I begin to weaponise my financial independence to build greater lines of earned income, I soon find myself in a much more exclusive environment where I am starting to see myself as somewhat barely qualifying for a bronze medal. More often these days, I realise that I'm often the lowest income guy in the room if not the dumbest. This is nothing to complain about because the products I build and the value I bring is starting to gain traction in different circles and some inadequacy is quite normal. For a guy from a government school and a JC that can't produce anything except civil servants, I should feel good for myself.

As low as I am on the totem pole, I don't envy silver medallists. 

In a popular university Facebook discussion group, a popular Computer Science professor gave an honest review of his life and why sometimes his family hopes he can be richer. From what I hear, this professor already lives on landed property. In another separate thread, I see a successful VC challenging him asking him why folks from his secondary school tend to become administrators and not successful billionaire businessmen. 

It was then that I realise that having a silver medal is no fun in Singapore - Gold medallists are constantly mocking you, asking you why you are not in their ranks.

I think if Plato looked at Singapore, he would first be flattered at how much we tried to replicate his Republic, but living here for a few years, I think Plato will probably drink hemlock.

We might have gone too far.

In Singapore, it's not just men of Gold, Silver and Bronze.

The men of Gold will have to look to the Men of Platinum. "Even the guy who makes furniture for a living can buy GCBs, what about you, dear professor?"

Aim for Bronze. Bronze is nowhere near rock bottom. 

Below Bronze is Iron. 

Below Iron is Lead. 

Below Lead are the BBFA Incels who brag about Technology and Cryptocurrency trades on Seedly but now recently extinct because counters are correcting right now.

Thus, in the Grander scheme of things, we can pick up a thing or two from Simone Biles.

Protect your mental health.

Bronze is enough.