Saturday, May 21, 2022

Some financial lessons I learnt from my recent trip to KL.

I've got quite a lot to talk about my trip to KL, but I will wait a couple more days and instead just focus on the financial bits first. In a few moments, I need to examine what can be salvaged from the Terra blockchain implosion so folks can catch up with me on my next preview on Tuesday, which will be changed, once again, to reflect the realities of the crypto space today.

So one of the highlights of my trip was meeting my cousin's old secondary school classmates. I met some of them years ago and one or two have become regular readers of this blog. As alumni of the prestigious English College in JB, my cousin's pals are fairly high SES - you can imagine some kind of RI-ACS hybrid if you translate them to Singaporean terms. As adults they are super-qualified, cosmopolitan and globalized citizens and have a very interesting if somewhat un-Malaysian perspective about life. 

I think I picked up one novel or two lesson from them. 

One of the flaws about being Singaporean travelling to Malaysia is mentally dividing everything by three when we look at Malaysian prices.

As a consequence, everything we see in KL is cheap. 

The first leg of the trip we ate well, but the prices are cheap only relative to Singapore. Malaysian locals can't eat like we do every meal. ( The noodles I ate shown above cost $90 MYR, and standard has dropped greatly ). 

On my second leg where I went around with my mum, we ate what local workers ate and avoided expensive restaurants. The Chee Cheong Fun from Petaling street is $8 MYR, possible the second best in Chinatown as number 1 was either gone or not open on that day.  

Here's the insight. One of this blog's readers is my cousin's pal who works in a fairly prestigious startup in Singapore. His commute is tough - he lives in a hotel a couple of nights a week here before going back home to Malaysia. 

He's actually got a lot of respect for Singapore hawker culture, which if you think about it, would be unusual for Malaysians because they have to multiple the costs by 3 when they buy food here, and food at home seems almost always better in terms of quality and taste.

His reasoning is simple - Singapore has kept a lid on food prices relative to our salaries while Malaysian's spent a larger proportion of their earnings on food. 

$8 MYR for Chee Cheong Fun in KL is a steal for a Singaporean, but it's not a joke for locals who have to contend with these prices on a regular basis. 

One of my cousins's doctor pals told me that he spent $40 MYR on chicken rice. To be fair, he added char siew, roasted pork and more chicken into his rice and the price inflated to $40 MYR. My cousin's other pal even said that individual portions have gone up to $70 MYR for chai png when they were feeling really decadent and hungry.  

Finally, one of them asked me how to FIRE like that ?

As a loyal patriot, I have a simple answer :
  • These are the best of the best Malaysia has. So naturally, Singapore wants them too. So step one is find a job here.
  • Open a brokerage account here and buy our REITs to get about 6% dividend yield.
  • I think it's possible to open CIMB bank accounts in both SG and MY branches so dividends can be channeled across borders. My cousin is testing this technique. I'm still investigating this for my mum. 
  • Practice geo-arbitrage. Work and save in Singapore. Spend in Malaysia.
  • According to my ERM research on Malaysia Expat cost of living it is only $14,000 SGD a year. $240,000 SGD in Singapore REITs yielding 6% can sustain an expat lifestyle in KL. In Singapore, you will need $500,000 SGD to lead a basic subsistence.    
  • Just completely ignore your CPF contributions. You will get it back one day. No Malaysian ever regrets leaving his money in our CPF system given the way our currency is strengthening over the years.  
Of course, for such eligible professional Malaysians to work in Singapore, many things can happen to torpedo this plan. One possibility is that they can get entrapped by our women and live as slaves to money forever.

That's not entirely a bad thing for Singapore.

So to the elites of English College, please come and take our women !



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