Saturday, December 31, 2022

2023 is the year I hope for the best


I will do a more thorough financial article and ERM portfolio review on the Dr Wealth blog for 2023 in the upcoming week, but I will briefly talk about what I hope to happen in 2023. 

The current backdrop is that interest rates are still rising. While the rate of interest rise is slowing down, we are not sure when the rates will stop and how long the increased rates will be sustained. The current projection is around 5%. The pace of rate rises can be affected as China opens up and production ramps up production again, which should spike oil prices worldwide. 

This will have an impact on what will happen to me in 2023 :

a) Investment outlook for 2023 does not look great, even for defensive investors.

The first impact is that I will have to brace for poor returns for up to three quarters at the very least. There is a risk no matter what you invest in. A slowdown can reduce the amount of loans banks give out. The gearing ratios rise in US REITs as tech workers get retrenched and companies figure out that they may not need this much space. 

The only blessing is that I do not have leverage. If things remain calm, I may leverage again for my next batch of students in February 2023. But these moves are risky.

Also, I am more conservative about spending my dividend income in 2023 because it may need to be allocated to pay off higher mortgage payments in 2024. 

b) Investment training business is going through a bad winter.

Investment training is like the tech sector. When interest rates rise, it becomes more expensive to delay gratification, and folks prefer to have their money at hand. The wealthy excesses and hubris will damage folks in the tech sector, and I expect the 4As kids to return to medicine and law and give computer science a miss. 

The most significant disadvantage of investment training is that ticket sales correlate with investment returns. If markets do not improve, folks would support their rising home mortgages rather than pay for investment courses because eliminating a 4-5% floating rate loan is more practical than buying Palantir. Even though dividends investing in Singapore is doing better than many competing strategies.

My crypto course is deader than dead, but I will enjoy dancing over the graves of the crypto dumpster bros in 2022. 

I'm bracing for sales figures to halve again in 2023. My conviction is so firm that 2023 will be bad for investment training that I have pre-allocated my 2023 expenses after liquidating my student portfolios. And my family had to endure some psychic damage watching other folks travel at year-end this year.

c) My legal career is unlikely to pay off in 2023 

This is where I'm the most conflicted about my career decisions. No sane law firm will give me the time to run a side hustle and pay me a fixed salary, so the best way I can start clocking my practice hours is to do so on a profit-sharing basis. The elders in the industry tell me that it takes at least 3 years to build a reputation and start finding clients on my own. 

So I'm in a career limbo with one boat on two different sectors. While I'm enjoying every minute of my legal work and learning practical skills, I've yet to turn a profit beyond clocking a few hours of my time.

As bad as the situation is, I can't imagine playing my cards in a better way than in 2022. There are several long-shot ways my different interests will turn a profit in 2023. 

My immediate challenge is to survive running an ERM class in the evenings while working in a law firm during the day on the second week of  February 2023. Preparation work for this tough hell week begins as early as tomorrow. Well-meaning readers even predicted I would fall sick if I did this, so I'll ensure that I get adequate sleep. Gone are the days when I could author three books on personal finance while doing IT certification and doing 24x7 IT support. 

If 2023 turns out to be a good year, I plan to have a sunnier report next year.

Otherwise, I may regret not executing my alternative plan for 2023, which is to quit everything, walk away, and just do nothing for a year. 

Sadly my ENTJ nature will not allow this.

So there's no rest for the wicked.

I hope that readers of this blog will have a Happy New Year! 

1 comment:

  1. Sounds like your'e at the stage where you could do something you love rather than something that pays. Hope you enjoy your legal work! All the best for 2023.