Thursday, December 30, 2021

Will Zoomers even bother to wake up in the morning to go to work?


Preparing to launch a new cryptocurrency programme targeted at conservative folks in my generation has raised some questions that probably can't be answered right now even with all the information we have. 

What you can be shown above is a simple experiment I'm doing with my spare cash. Beyond the usual yield farming strategies, I've also used some kopi money ($3,000+) to farm into really dubious projects - just for the lolz. 

As you can see, some projects under the Nexus Protocol can yield over 100%+ a year. 

BTW, I don't recommend this to readers because I started losing money immediately after pulling this stunt - it's still a big question mark as to whether the yields farm can cover the losses over the next few months. I also could not, for the life of me, understand the white paper of this project.  

The rest of my yielding farming strategies using stablecoins, however, are doing fine and I was able to build a fairly steady portfolio that yields about 14% a year. And while I actually do not think this is sustainable over the long term, if stable strategies above 14% can be shown to work in the cryptocurrency world, it raises some issues for policymakers and philosophers to think about.

Imagine a world where you can yield 14%-20% without experiencing market risk. No matter what you do, be it internal marketing campaigns or launching of new products in a company, your opportunity cost would be making 14%-20% in the cryptocurrency world. Suppose you are an IT manager that wants to pitch some service management software to be deployed to make your department more efficient. Your CFO may argue that in order to justify your project you need a hurdle rate IRR of 20%,  because, otherwise, it's better to convert the funds into crypto to yield farm instead.

This will also have ramifications in your personal life - why do you want to take a risk to start a business when a stablecoin can be farmed at 20%? Also, anyone working and saving up $120,000 can generate $2000 a month at 20% yield year. Why would anyone with $120,000 liquid cash wake up to answer to the boss at work? 

Of course, in real life, no one will really believe that 20% yield are sustainable, there may be some kind of de-pegging in the horizon, farming yields may drop, or inflation will surge. 

But I think this will not stop some Zoomers from giving this high-yielding for of FIRE a try. This shuld be a thing that should bother employers because we are in the midst of a Great Resignation. 

For folks my generation, there's nothing stopping us from getting some $200-$300 Amazon goods from yield farming strategies every month, if we get depegged, we should just move on in life.  We may enjoy better odds than playing 4D or Toto.

Anyway, all my crypto is bought using dividends from my equity portfolio. 

Monday, December 27, 2021

How trying to be Financially Independent can leave you Forever Alone

One useful mental model to have for readers of the blog is the OCEAN personality model, where we can describe a person's personality by 5 axes. This is the Rolls Royce of personality models and psychologists are able to map each factor into an actual biological brain function:

  • O - Openness to New Experiences measures how much you prefer novelty over the familiar
  • C - Conscientiousness measures how neat, orderly and dependable you are.
  • E - Extroversion measures how outgoing and sociable you are.
  • A - Agreeableness measures how trusting you are and how much you get along with others.
  • N - Neuroticism measures how vulnerable you are when faced with emotional disturbances.

Once you are armed with the OCEAN personality model, you can begin to enjoy reading articles on psychology and a friend forwarded me this gem on an article that explains why some folks are single (link)

Single folks fall into two categories :

a) BBFA - Bui Bui Forever Alone

The first category is the much-celebrated personality that you can find in Hardwarezone's EDMW forums. While it is used to describe the kind of keyboard warriors who hide behind their anonymity, I think the real insight is that these folks are highly introverted. 

A large part of the single population is like this because they are highly introverted and find crowds and interacting with other people quite draining. And this is what feedback I receive from folks who go SDN gatherings and tinder dates. Some dates are really unpleasant because the other party is too quiet. 

The reason I find a link between trying for Financial Independence (FI) and being Forever Alone (FA) is that the FI movement has strong participation from Introverts with Reddit surveys claiming a majority of FIRErs being INTJ.  

Does this explain why some objectively rich folks remain single? I think there's a valid reason to tie FI and FA together if this were the case. Nevertheless, the article suggests that singlehood is not a permanent affair and folks do eventually find someone.

It's not difficult to detect an introvert. Invite them to a party and watch it slowly drain them of personal energy. Then, if they are not hot enough for you, you can send them back and possibly never date them again.

b) KKKFA - Kah Kwee Kwee Forever Alone

But that's not the most important insight. Apparently, BBFA only covers a portion of singles. 

It was found that a high openness to new experiences is also a precursor to singlehood, which is why I coined a new KKKFA moniker. I am very excited about this insight because I always felt that I had a higher openness to new experiences compared to peers my age. 

The logic is extremely sound. Folks who like variety in their lives find it hard to settle down with one person, which explains why Wang Lee Hom wanted to avoid marriage in the first place. 

I actually believe that some men remain single because they are attracted to women with high openness to new experiences and they can't overcome the singlehood hurdle. I told some of my friends that in targetting some attractive women,  they are actually not competing against other men - they are competing against singlehood which comes with travel and fewer personal obligations.  

One way of figuring out whether you are doomed to waste your time on someone with high openness to new experiences is to examine the books, music and artefacts in their homes. Folks with a high O-score have a varied taste in music and books. You are highly likely to find World Music CDs, books from around the world with an eclectic mix of genres and artefacts from different continents.

It would be interesting for single readers to ask themselves whether they are BBFA or KKKFA. 

For the rest, you should acquaint yourself with this model because I'll be doing some heavy research on personality types and investment performance for the Dr Wealth blog pretty soon.

Saturday, December 25, 2021

Merry Christmas, Happy New Year and Happy Holidays !


I'm 47 years old this year and I just reviewed what I wrote on Christmas Day last year. I think for most of us, 2021 is a big disappointment, my revenues dropped like a ton of bricks which is sort of expected, but so far investment gains largely negated the loss of sales. What is frustrating is that despite vaccines, travel has not resumed, and I can't really bring my mum to visit relatives in Malaysia this year.

I don't have a lot of wishes this year. I should be launching a new programme in 2022 and then it's basically hoping for the best that we recover from the pandemic and travel resumes. I'm cautiously optimistic that once Paxlovid gets deployed in Singapore, we will see the end of the pandemic as hospitalization rates drop by 88%. The truth of the matter is that I have a lot hinged on the COVID-19 pill and Singapore's recovery, investments inclusive. 

iFast has also released the Christmas episode of My 2 Cents. You can access the link here :

This is the most depressing episode I made. The background story is that I had contact with a COVID-19 patient, so even though I tested negative for ART, the policy was that I can't be physically present in the shoot. iFast staff was pretty fast-acting and we held an emergency meeting to somehow allow me to be present without actually being present. 

The result is that... I cannot have my cake and eat it too. 

I'm getting into a period of my life where I need to play up caution. I'm also a Tiger and starting February 1st, I will be entering a period of Fan Tai Shui where a lot of challenges will be thrown at me. Even right now, my business has to survive because I have, more or less, internalised the idea that I can't sit still and just ride into the sunset after FIRE. 


Thursday, December 23, 2021

The Leisure article - Happy Holidays !

I'm two days away from my birthday, so it's time to slow down and talk about hobbies and interests. I have not been doing very much this holiday season even though I see a lot of folks going on staycations and travels via VTL. Also, my family has decided to stay put. 

Personally, I'm betting that things will get much better once the Pfizer pill gets deployed in Singapore. We basically have a way of not overtaxing our medical facilities and the opening will accelerate faster by then. Even now, we're seeing better numbers every day although Omicron may start to hit us hard in January 2022. 

I only have two things to share with the readers as we come to a close this year.

a) Session Zero - A D&D-themed theatre production

Generally speaking, I will not support the local Arts scene because I don't want my money to flow to woke people, but I really have to make an exception when a local production channels my favourite hobby Dungeons & Dragons. My fear is that the reception falls flat and someone loses money - then no one will support productions with D&D references in the future. 

For my first attempt to watch a play, I made sure that my party had the skills to navigate the scene, so I was accompanied by not one but two English Literature teachers, and it really helped me with appreciating the experience. The best bits I picked up is the team behind the production and how the professor thinks when improving the script. I was obviously more interested in whether the play can break even financially and the teachers explained to me that selling out is often not enough and rents still need to be paid. We estimated one full house session to bring in about 20 x $35 or $700 and rental of the premises may be several hundred a day. And there are many mouths to feed.

Still, I don't need an expert to tell me that the acting was way better than Mediacorp and the two actors did a fantastic job. Sadly the fairly brutal and real story of a disintegrating marriage was somewhat wasted on someone like me who prefer stories set in the MCU replete with pop culture references. The script really does hit really close to home and as a D&D fanboy, I felt it hit the number of requisite RPG references. 

Maybe it's just me, but 75% of the fun is talking about the event after the fact in the ice-cream parlour. It would have made a nice dating event and I was somewhat dismayed at the lack of, in woke-speak, (cis-het) couples attending the event. I'm trying my hand currently at match-making some of my friends and I must say that plays and theatre is a good choice of venue.   

Now I know that Gen-Z is gently castrating themselves our population is doomed!

b) Hikes with random friends

While I remain quite ambivalent about the Arts, I genuinely enjoyed the hikes I had for the past few weeks. It started out with ex-colleagues inviting me to meet up at 745am to climb Bukit Timah hill. It was really tiring at first, but it led to better sleep at night. 

I took some pictures of my hikes and, eventually, some friends who were on leave started to ask whether I am free to hike with them. I think the guy who FIREs is like a friend of last resort. These hikes were so random but I managed to get an invite every week now. I started with 12k steps and now I'm doing about 25k without really feeling tired. My last hike did not last too long, but I was able to swim the day after and there seems to be no need for a recovery period the next day. 

The challenge for me now is to assemble a team to walk the entire Rail Corridor from Hillview to Tanjong Pagar. Currently, I can only do half on one go. But this is not such a big deal with folks inviting me to their hikes and I let them determine the route.

I will just focus on making the dialogue as interesting as possible. 

In two days time, I'm going to be 47. There will come a time when my fluid intelligence drops, I lose my open-mindedness to new experiences, and I will become a cranky old man. I think the struggle is to continue to be relevant and fun. Fortunately, exposure to law school where I get to work with folks half my age has helped. 

Here's the thing that is interesting: For now, all the folks who invited me to walk with them are younger than me, some more than a decade younger. 

Maybe I'm using them to stay young, but hanging with Gen X really does not appeal to me ever since I graduated from SMU. Even though I cracked the finance puzzle, I'm not really interested in mortgage payments, cars to buy, Manchester United, or the real estate market. With younger folks, I can talk about cryptocurrency, robo-advisors, Wang Lee Hom's sex life, Fei Yuqing rumoured sado-masochism, crafting potions on Skyrim and Roblox. 

I might be interested in talking to Gen X about my kids, but that may actually offend my peers because I fully intend to experiment with creating trust-fund kids and my latest crazy idea is called Polytechnic Insurance. I think I'm the opposite of a good parent my peers aspire to be. 

To find out more, you need to stay tuned to future articles. 


Monday, December 20, 2021

[iFast TV] Unconventional Financial Tips You Don't Hear About Everyday


The second part of my video under My Two Cents is out, you can follow this link to access it :

I let the video speak for itself. I'm particularly proud of Kopi Tilok arbitrage.

As we had to brainstorm more unconventional ideas compared to how much we actually deploy, not all of my ideas made the cut, so I will list out the rejected ideas on this blog :

a) Don't believe in asset decumulation

In financial planning circles, a lot of care is taken to consider decumulation which is the process an older person begins to spend down his asset class before he dies. To dividends investors with a portfolio of decent size above $3M who also have children, this is totally optional.

It is entirely possible to limit spending to investment income and pass along capital to your children after you pass away. Wealthy people do not believe in decumulation anyway as spending all that capital may even inflict harm on your well-being.

How many bowls of sharks fin can a person eat anyway?

This idea was not included in the video probably because most viewers are unaware of what decumulation even is.

b) Don't believe in consumption smoothing

Another idea in financial planning circles is that ideally, a person should smoothen his consumption over time. This means being liable for some debt to increase their spending when they are younger and have lower pay and to be able to save more when they receive a higher salary when they are older.

This is always puzzling to me as the key is to be able to save more and work harder when younger to generate compound interest and then build up your savings to live on investments as early as they can. It is not understood why consumption is so important in life as we’re likely trying to buy something to impress someone we don’t even like.

This idea was not included in the video probably because most viewers are unaware of what consumption smoothing is. In advanced societies where fee advice is the norm, consumers are taught this term from financial advisors.

In Singapore, commissioned FAs are too busy taking Instagram photos with their European cars and selling ILPs.

Friday, December 17, 2021

#1 : Ray Dalio's latest book is simply... WOW !


Some books are so mind-blowing and powerful that they should quickly be elevated to the level of an investment classic. Ray Dalio's Principles for Dealing with the Changing World Order is so important, that maybe it should be taught in our secondary school history classes. 

This book is important because of an investor's need to cut through the proliferation of books on intellectual masturbation written by academics and political scientists. We know that Ray Dalio has a lot of skin in the game because if he misreads the prospects of the countries he invests in, a lot of his money can be lost.  He also has this wonderful talent of turning really subjective measures like Character/Civility/Determination of a country into a quantitative scoring system. Doing this may give a political science professor a brain aneurysm, but it lends a certain amount of credibility to this analysis. The final reason why you should read this is that he's probably the only western author that is even-handed about China. He has long ties with the Chinese leadership and you will find his writing much less critical than, say, the run of the mill articles on The Economist. 

The part that should be taught in local history classes is that Ray's idea is that there are six phases of a dynastic cycle that repeats itself over and over again. Armed with this model, history students can attempt to figure out which phase a society is in, and they can also predict what is likely to happen next. 

This is light years better than a regurgitation of facts and dates. 

I can summarise the six stages are as follows :

Stage 1 - After a period of chaos, a new order begins and a new leadership consolidates their power. Eg. Singapore on its day of Independence from Malaysia

Stage 2 - The society begins to figure out how to do resource allocation and government bureaucracies are built and refined. Eg. Singapore in the 1970s.

Stage 3 - The society experiences a golden age of peace and prosperity. Eg. Singapore from 1980s till today. 

Stage 4 - The society experiences great excesses in spending and debt and income inequality rises. Singapore has not reached this stage, but the US definitely is at the tail end of this with large debt and income inequality. China may be already in Stage 4. Singapore is ramping up property taxes right now and raising ABSD in a bid to delay entering stage 4. 

Stage 5 - Society experiences bad financial conditions and intense conflict. The US is expected to head to this stage next. It takes one bad recession/event for folks to realise that the wealthy are protected from a lot of disasters compared to the poor. This can trigger class warfare. Polarisation between the political left and right has already started.

Stage 6 - Society collapses from civil war and revolution. This was what happened when the Chinese Communists took over and when the Bolsheviks in Russia toppled their monarchy.   

I think right now, societies do not have a way to extend Stage 3 because some kind of wealth taxes may need to be enacted at the global level to prevent the flight of capital out of any individual country to improve the social mobility of blue-collar workers and the working classes all across the world.

Like a bottle of good wine, this book really pairs well with Marko Papic's book on Geopolitical Alpha. You can read my article on that excellent book by following this link :

Anyway, I am not done with this classic piece of work, I will discuss other aspects of this book in future blog articles.

Saturday, December 11, 2021

[iFast TV] Should Young Adults Choose Money or Passion?

For the past few weeks, I have been collaborating with iFast TV on this series called My 2 Cents. You can watch the video by following this link

Some readers will be wondering about some details of my collaboration with iFast. I'm happy to share that I actually did everything without financial remuneration as I have the means of monetising these eyeballs through my course offerings. The upside is that there is a stronger degree of control and I get exposure to what media broadcast is like. Naturally, I ended up having a great deal of respect for actors and the logistics required to create even a short video like this. 

A lot of discussions I have of late is about choosing between Money or Passion which is actually a false dichotomy - you can choose both. But the reason why this remains a hot topic is that a lot of young people feel trapped in jobs that they pay and actually switching to job that they love would result in a serious pay cut.

In this video, I made two pertinent points that should be useful to the reader :

a) Understanding Job B matters

As a society we're too obsessed with Job A, a high-paying we take to pay the bills, and advance in society, that we often dislike, and can't wait to get out of. This can be a job as a Legal Senior associate while counting the days to a junior partnership. 

But equally important is the idea of Job B -  a job we enjoy, we can sustain but may not pay as well. 

My rationale is for everyone to know what is their Job B so that they can decide how long they can sustain Job A before they give it up for a better life. This knowledge is valuable because Job B with some passive income can be the equivalent of Job A. 

So my stand is to meditate on what Job B is and how much it pays, I tell lawyers that for them it's generally becoming a GP tutor in a private tuition agency. 

b) Three S's in picking professions. 

If you want to survive this new world where tech obsolesces becomes a way of life, you need to be guided by the three S's. A job has to be Surprising - no SOP can contain instructions on how you do your task because it can be automated. The job should be Scarce, not everyone can do the job. One litmus test is to see whether there is a licensing regime to perform the task or there is a guild to protect the interest of these professional groups. Finally, the job should be Social - a strong element of personal interaction should exist because it is harder to outsource actual human connections.

I will summarise my points in later videos, but I hope you will watch them to find out what my colleagues have to say about the matter as well 

Tuesday, December 07, 2021

Early Retirement Masterclass Community Event Q42021 - ERM goes Crypto !

We will be conducting a community event for my Early Retirement Masterclass alumni on 16th December 2021 7.30pm. 

In this event, I will be describing my nascent efforts to invest in cryptocurrency in a manner that is more consistent for ERM alumni. My students have already been invited to send me some questions so the slides will address them over the next few days.

Members of the public are invited to attend this event. At the moment, I'm not positioning myself as an expert, I see myself as more like a fellow explorer so expect the material to be somewhat basic for now.  

The main question I want to answer is the question of :

"Whether Skeptics and Conservative investors have room in their portfolios for cryptocurrencies?".

Items of discussion include :

  • Some cryptocurrency basics.
  • Why conservative investors should take a closer look at stable-coins.
  • How a beginning crypto investor's environment and tools can look like.
  • Two interesting ideas investment ideas for Early Retirement.
  • A quick tour of the Metaverse and what's trending in this space.
In my investigation, I have discovered more questions than easy answers so members of the public will be encouraged to participate in some online surveys, this ensures that everyone will be able to leave with something useful at the end of the session.

I will conduct the usual portfolio updates for the student-built portfolios at the end of the presentation.

Please register by following this link:

Saturday, December 04, 2021

Using a Finance Blog to hone your critical thinking skills

The Life-Changing Science of Detecting Bullshit by John Petrocelli is a gem of a book that really does not hesitate to name names and one of the big joys of reading this book is to look at how much bullshit Americans have to live with. Some big names along with concrete examples of their bullshitting include Dr. Mehmet Oz and Deepak Chopra. Naturally, the situation in Singapore is not much better and I find that, after banks can link up CDP to create a 360-degree view of your personal finances, folks like my mum are starting to get more calls inquiring about her investments.    

One useful way of benefitting from this book is to use the appendix of the book that has a comprehensive list of fallacies and try to identify them on finance blog articles to sharpen your own thinking. 

So what I'm going to do is to simply take the latest Money Maverick article and then run through the list of logical fallacies to see where can find some areas where a reader can improve his ability to think critically. Money Maverick was a controversial blog owned by Financial Advisor Luke Ho, but it has since changed hands.

You can go through this exercise yourself by using this link.  

See if you agree with my analysis.

a) Anecdotal Fallacy

An anecdotal fallacy occurs when someone uses anecdotal evidence or vivid examples in his reasoning.

You can find this performance table in this article : 

The thing is that we will see a lot of these results demonstrations on the web, but because Seth can only show off his own portfolio, this is just one data point and does not reflect all of a FA's customers. As it seems to cover just Seth's performance to me, this may well be anecdotal.  

Similarly, we need to be very careful when FAs display the results of their customers. We should not settle if they only get to cherry-pick their top performers. 

b) Hot Hand Fallacy

This is a fallacy where we believe that good things will occur directly following favorable/desirable outcomes. 

From that same snippet, you can find a fairly good return of 36.74%. The Sharpe ratio is off the charts are over 3, but the record only covers one year of performance. To understand what a Sharpe ratio of 3 means, it is actually very sensational, a quant who gets about 0.8 over 10 years is a fairly good investor. This is clearly a one-year hot-hand and the question is whether a Sharpe ratio of 3 can be maintained over time. 

In the investing universe, a one-year record is hardly something to crow about especially when China and US Tech stocks have well but not having a good time lately. 

The problem with asking for a longer track record is that we won't even know who the real owner of the Money Maverick blog is going to be in one or two years' time.

c) False analogy 

When you employ a false analogy, you are using perceived similarities to infer additional similarities that have yet to be observed.

The third fallacy is kinda hard to find given that, frankly, the quality of this article is really poor and the author rambles as he goes on. You need to suffer through the article after which you can scroll down to the section on "Penny-wise, Pound Foolish will not work"

Seth first talks about running his business and why it's not wise to skimp on rewarding good employees. He then tries to take a logical leap to say that, similarly, it is dumb to spend hours looking for the best-fixed deposit for just an extra $75.

If you put on your thinking hat for the moment, you will realize that employee retention and savings deposits are not the same things.

Employees have varying levels of productivity and putting in more rewards can pay off immediately if you consider the cost of employee retention and how difficult it is to get good help in a business. It is also expensive to figure out who a good employee is - you've probably paid sunk costs to do that. You are rewarding them to minimize waste as well. So this kind of good money should be spent.  

A good fixed deposit pays out a higher amount and is an objective measure. There is no reason to take a more expensive option when a cheaper one exists. Also, savings accumulate and compound over time and the final outcome can be quite consequential. How can putting more time to find a better product be considered pound-foolish? 

Readers need to be careful. 

This argument is common in the finance industry that is struggling with high expense ratios and is now faced with cheaper options like robo-advisors and ETFs. The logical defence is to just say that folks trying to cut costs are penny-wise pound foolish. 

In summary, the Singapore financial blogosphere is a great place to practice your critical thinking skills and there are quite a number of blogs that facilitate this kind of practice. Of course, I have only used the book on one sample blog, you are free to even use these tools on any piece of writing including my own. 

I'm not infallible and we can probably learn a thing or two from the exercise.