Friday, June 30, 2023

How to rank the wealthy show-offs in your life.


I've just completed a Youtube video with fellow Dr Wealth trainer Chris Long and decided to supplement that video with a point about wealthy show-offs in our lives. You can listen to my video segment here by clicking on this link

One of the things I talk about is that whenever someone shows off their expensive material consumption, it hurts a lot of folks around them because social media has this tendency to censor all the bad stuff and only show the good stuff. Showing off a good life can get others to ask themselves why their lives suck so bad.  It is one of the primary reasons why the mental wellness of Millenials and Gen Z is so poor. All that Instagram. 

I think showing off also hurts wealthy people, I was lunching with an ex-boss and he was telling me about an officer in an old workplace who married well and loved putting up photos on luxury holidays and watches. When she died of cancer, there was very little sympathy for her, and don't get me started on the folks who died on that tiny submarine of late. 

Some people were gloating even though I felt bad for the young man who joined his dad because it was Father's Day.

I think the best defence against people's showing off is deconstruction. In my first book, one useful lesson I teach my students was to try to categorise the kind of advertisement on TV into what kind of psychological buttons they press, once you do this, the desire to buy something will instantly fade away. 

A fantastic book by Aaron Anuvia discusses the findings about how products can be designed to be loved by the consumer, it really tries to fill the gap between marketing, anthropology and various social sciences and one of the insights is what kind of products people of differing levels of wealth like to buy.

The most important insight is that at its lowest levels, the show-offs are not exactly rich at all. When people show off brand names and products with prominent logos, they are actually buying products targeted at the quasi-affluent. Maybe you came from a poor family, or lack the relevant paper qualifications but made a decent pile of cash later in life, one method of signalling would be to buy some kind of product that is really in your face and has a prominent logo, this is to signal that you have arrived. For women, there are many ways to signal new wealth, for men it tends to be luxury watches. I don't want to mention the actual brands but if you need to queue to get into the shop at Ngee Ann City, it may mean that you are at the lowest tier of affluence. 

The folks who are actually rich may not feel the need to do any signalling. Some might be born with a silver spoon so they are quite comfortable with their skin. Another way to look at old wealth is that they are actually not very rich income-wise because their wealth is locked into trust funds and structured to fight inflation over centuries. For these folks, the luxury goods they buy are sort of understated. The big loud logos disappear but certain design features make a Hermes Birkin look like a Birkin. For folks who tried to own a Birkin, do note that it's not designed to be sold but only offered to loyal customers who are probably not going to sell them off when they buy one. For these folks, you might look for very understated but expensive brands, but these days a humanities degree from a prestigious university screams old wealth because they can afford to study something that has little practical value in the modern working world which is a ridiculously huge flex. 

What is interesting about the book is that there is a tier of wealth above the understated high-cultural capital's old wealth. You can find this in shows like Bling Empire. Beyond the aesthetic of of wealth lies Haut Couture where tastes can be transgressive like the Gucci Tifosa bag I put up for this article. The truly wealthy and tasteful no longer have to conform to a particular taste but can redefine fashion in their own image. Not everyone can carry the Gucci Tifosa well, so it's actually cheaper than a Birkin, but it takes boldness and individuality to wear it.

Why is this insight useful for FIRE folks?

For folks advancing FIRE, you're going to feel deprived for quite a while. Perhaps a decade or so if you're like me. For many of us, even if we do live on dividends, our lifestyles cannot be one where we can see that we have arrived. As a psychological defensive mechanism, our first reaction when faced with these show-offs is to suspend our emotions and use our curiosity to look at the brand they are flashing at us. 

If it is very loud, you can just dismiss this as some kind of insecurity. Many of these high-wealth low-culture types were looked down upon growing up. 

I would pity them and praise them a little bit to make them feel good. ( More so if I get to bill them by the hour )

If you see someone who wears high-quality gear and is quite low-key, you might be dealing with old wealth. In this situation, they are not trying to inflict any psychic damage on you. I particularly like these guys because they feel more comfortable if you can demonstrate the same hobbies and passion as they do, you'll do ok by their book. Also, they can be very eccentric.

Right now, I definitely do not walk in circles who wear Haute Couture, I don't think they care to show off either. These are very rare encounters, so just be a good human being when dealing with them. Among folks with first-world problems, they will have bigger first-world problems.

If we understand that the loud show-offs are the lowest tier amongst the wealthy and feel pity for them, it can also help us cope with all that loud exposure from social media.  

Wednesday, June 21, 2023

When will we admit that Singapore Millenials are doing very well?

I've not been active because I'm super busy with my new product launch. The next round is where I will actually conduct one sample lesson for my ERM alumni on Saturday without a dry run just to see the kind of feedback I will get on the lesson. 

But one question weighs heavily on my mind since my last article. A very sharp reader pointed out that I can be wrong about Malaysian property not just because Malaysia straightens itself out - I can also be wrong when Singapore reverts to the mean. What are the conditions for Singapore to revert to the mean, other words become as unexceptional as our ASEAN neighbours?

This is something worth looking at. 

I'm going to digress before trying to answer this question. I attempted to do through some of Mr Loo's 1M65 videos to see what he's talking about, but without completing some of his very lengthy productions, I can only say that even if he's right about many Singaporeans being asset rich-cash poor, Malaysian property may not be the right answer. 

And I speak from experience. 

I lived in landed property almost all my life (I'm not proud of it), and my dad's Malaysian property paid my way through my first degree. Even though this was a very successful investment by Malaysian standards, the price and rentals were stagnant for the past 30 years and my dad should have extracted the capital and placed it in REITs / DBS instead. 

But don't ask me, ask the guys who got hammered by CLOB. 

Ask the folks who paid for Forest City which was backed by the Sultan of Johor.

JB is littered with the corpses of crypto-like investment ideas pitched at Singaporeans - Danga Bay, Best World Shopping Centre, etc...

I have great respect for the work of 1M65, but as he places that dollop of wonderful Nasi Lemak that he claims to be better than Selera Rasa in Adam Road which deeply affected me and made me hungry, but I invite him to predict the next election results of the six Malaysia states coming up next. 

Beyond political stability, top universities, and the usual things our Government likes to brag about, there are some features that can be quite unique to Singapore that if lost, could mean our destruction.

  • MAS's unique method of using the $NEER to control exchange rates has given us lower inflation compared to other OECD countries. This was the brainchild of Goh Keng Swee.
  • As pointed out by Leslie Yee in BT, Singapore is small but can produce more residential housing per unit of time because we don't have too much red tape to repurpose land from one use to another. We just invoke the laws on land acquisition. Places like NZ has so much land but actually lack decent housing.    
  • The Economist credits our success during the Pandemic because we are kinda utilitarian and amoral and only Miami was able to beat us in performance. In other words, fuck your feelings. This is the Singapore I love. 

Amazing, this blog threw up some answers to the question. Link:

Reversion to the mean can take place if Singapore feels expensive to foreigners and we end up in a current account deficit. There are two conditions for this to happen.

In this case, the whining Millenials are right. We are objectively expensive. But we've been on a current surplus so far, so I'm not duly concerned about reversion to the mean.

As you read the literature on various social sciences coming out from the States, Singaporean Millenials have all the advantages of a better education compared to those in the US, but none of the disadvantages like crippling study loans, or fentanyl abuse. Houses are not cheap in Singapore, but some Millenials are already sitting on property that has already been appreciated.

So why Millenials on social media cannot admit that they are doing fine?

  • The first reason is that the benefits almost all accrue to local degree holders, with private degree holders quite distant away.
  • The second reason is the envy arising from social media. You know you're not supposed to enjoy Naomi Neo's Instagram by gawking at her sports car or house. If you get envious of that, you're doing it wrong!

I'll tell you what I'm concerned about. 

PM-elect Lawrence Wong believes that the solution to our problems is to broadly flatten the incomes between the top and the bottom - to reduce inequality. Just remember that talented local grads can easily find jobs in places like HK and UK which is also rolling out the red carpet for foreigners. We need to do this without triggering a budget deficit and a flight of human capital. Inequality is bad in theory, but if solving it means $15 for a plate of char kway teow or $500 for someone to fix your pipes, we may have an insurrection on our hands. 

Then we will revert to the mean. 

Of course, at the end of the day, the devil is in the details. I shall leave it to the high CEP panjandrums to decide how to meet policy objectives.


Sunday, June 11, 2023

Some thoughts on whether it is wise to buy Malaysian property and retire in JB


For the past 4 days, I've been in JB to meet distant relatives who are on a business trip from China. Fortunately, a secondary school classmate was kind enough to bring me around JB for breakfast and share with me his latest property move which is to buy a piece of landed property unit at Eco Botanic Gardens.

Eco Botanic Gardens is primarily owned by Malaysians who work in Singapore and Singaporeans who want to live in Malaysia. The pricing is well above $1.5M MYR, so Singaporeans are legally entitled to own these properties. 

Of course, my classmate wants to promote his estate and suggests that I either rent/buy a unit in Malaysia there  The idea is that we can all retire in style, given that our conversations are not tainted by modern professional comparisons and tend to be more like banter between secondary school pals. On top of that, Eco Botanic Gardens looks posh with a fairly nice gentrified row of shophouses with fusion restaurants such as Marui.

My pal means well, but I am in the process of getting legal rights to all my mum's properties in JB with the eventual aim to sell them at a reasonable price. So logically, I'm doing the opposite of what my friends suggest. I'm doubling down on Singapore. I'm penning my thoughts here not to demonstrate my impeccable logic, which will have its share of supporters,  but to chronicle my thoughts on how I'm likely to be wrong. 

For some background. My property in Malaysia is currently stuck at a current yield of about 6.1% and rents have not increased for the past 30 years! Even worse, real estate agents actually believe that the rent I'm charging is relatively high for the area. I'm hesitant to sell because converting it to a portfolio of high-quality S-REITs may just give me a yield of about 5.3% but it will have the advantage of dispensing with currency risk. 

In my view there are just too many considerations to living a blissful life in Malaysia:

a) At the personal level you need to change yourself to adapt to a different environment.

First off, I'm a public transport guy from Singapore. I need to pick up a refresher to drive if I move to JB. Then I need to develop a rugged DIY kind of attitude to living in Malaysia and become some kind of handyman. These are great skills to develop for anyone, but it's not exactly what I want to build given that I'm more interested in AI, quantum computing and investing. 

Also, Singaporeans need an attitude adjustment as there are no Town Councils to complain to. 

b) We need to imagine the state of the property after 10 years to determine whether this is really the beautiful life we will be getting

The reason why Singapore is so good at what we do is that we are excellent at maintaining and sustaining things. Over the years, Singaporeans have been seduced by many real estate development projects, but often they result in becoming ghost towns like Forest City. Even if your property does ok over the years, a layer of algae will eventually grow around it. Entropy is a very powerful force in JB.

So we cannot just look at one development and see just how beautiful it is, we need to imagine what it will look like in 10 years. There is a real probability that your development will become a ghost town. I remember going to the sales office for Forest City and there were horse carriages to bring potential buyers around. I was even told that this development has the personal oversight of the Sultan. 

But look what Mahathir did to it?

Anything can happen.

c) You just need one mugging incident to change your mind about the place

If half your family is Malaysian like mine, then you will know that crime levels are not like in Singapore. There are of course terrible incidents and stories of crime and I was advised never to pump petrol or withdraw money at night in JB. But muggings are real - someone hit my late father-in-law on the head when he was doing morning exercise in Kulai.

In such cases, the solution in JB is always to wall up the estate and hire security. But in my head, the question is always who is going to keep you safe from security?

Security cannot come fully from just guards and cameras. It has to come from legal systems, procedures and swift execution of justice. Good luck with that.

d) What needs to happen for me to be wrong?

This point is more important because Singapore wants to see real change before we are happy to part our strong currency for Malaysian land. At this point in time, if you read financial planning journals from Malaysia, you will hardly be impressed with what you read. Right now a Singapore journalist (I  dunno what drugs he is on) is openly writing about comparing CPF Life being better than buying investment property. In Malaysia, they are debating whether to draw out their EPF for personal expenses. You can imagine how these two societies will evolve over time. 

As expectations are not high in Malaysia, I hope to see the RTS gets built as a baseline to consider that I might have misjudged the country. After that, the current government must survive its term in power. Beyond this one term, if the Anwar government can win an election without needing to form a coalition with UMNO, then I can consider my judgement to be incorrect, but this will only improve the probability of profiting from our investments.

What is the probability of this happening? This is something we can debate about and monitor. 

If they let Najib out of jail, this is a big negative and we gotta adjust the probability downwards, If Mahathir dies, then it's a great positive and we can adjust it in the opposite direction.

Whatever it is, I don't think it's within a Singaporean's power to come up with reasons for how things are going to work. We've been losing money on projects in JB since we've existed as a country. My relatives remember the days 1 SGD = 0.90 MYR. 

If anything, Malaysia needs to prove that it's an investable place. They need to respect the ownership of private property, ease up on currency controls, and stop penalising folks who just want to come to your country to spend money.

Finally, if you can FIRE in Singapore, it's the best scenario because you've succeeded in retiring in one of the most expensive places in the world. If anything, your assets and physical body are safe. Retiring in a place like JB makes more sense if you are somewhere in the twilight zone of retirement planning. 

Still, nothing beats coming in occasionally to JB to enjoy the power of the SGD. 

Tuesday, June 06, 2023

Bridging the mating gap between men and women


I would not ordinarily read Motherhood on Ice by Marcia Inhorn, as I have bigger fish to fry like picking up quantum programming or maybe signing up for a ChatGPT prompt engineering course but I've already written a number of articles on this blog on egg-freezing and the book came under strong recommendation from my sociologist buddy.

For a married guy who is not vested in technology, but actually has two ex-eggs running around the house, the book is too much information for a dude to process. Not only do I need to be introduced to egg-freezing technology, I have to read sob stories from very successful professional women, who lay much of their dating woes on men. Ultimately, egg freezing is not so much about single female professionals, but it is also about the fathers, ex-husbands and boyfriends who often have to pay for the procedure. However, I did come off a bit more positive about approving this technology broadly here, but it would not fulfil the wishes of many professional women in Singapore because the problem is that men have better things to do, and, thanks to dating apps, younger women to date. Egg freezing is, therefore, more akin to insurance, something that gives professional women some peace of mind. It will not arrest the decline of our fertility rate.

If egg freezing is going to be more like insurance, then we can expect the medical industry to sell it as a form of female empowerment or a passport to focus on a woman's career. This is while some branches of feminism are actually against egg freezing, and in the sample, almost no one froze their eggs for career reasons.

The big elephant in the room, according to anthropologists is the mating gap. The pool of eligible, educated and egalitarian men is very rare and, channelling the other book I read Generations, adults are taking a long time to get their shit together. 

This leaves two groups of people on the shelves - professional women and low-status men. 

So every society has an imperative to change the way humans mate and get professional women to marry and form families with blue-collar men. 

In this case, anthropologists are warming up to the idea of mix-collar marriages. Now we have Phds lamenting the idea that if RGS marries an ITE guy, she is labelled as "settling". 

This is something as a blogger I'm really proud of as I have been blogging about this issue for years.

Some kind of agency needs to be launched, in fact, a whole of government effort, should be launched to address this mating gap. My projection is that we have to admit men into more degree programs, failing which, we need to make viable better non-degree tradesmen paths for men. Maybe even cut NS down to 1.5 years and pay NS men's Army regular salaries. 

My money is on Singapore succeeding in this effort after a few GST rises.

I think the bigger challenge is getting white-collar women to accept blue-collar men as life partners.

The idea of a dating agency that caters to professional women and blue-collar men has been mooted by anthropologists, but when I broached the idea with friends, both men and women are disgusted by the idea as we are an Asian after all and female hypergamy / male hypogamy is still largely the norm. Even guys who, on the surface, fantasise about the great life as a househusband, they get upset when I say what if their daughters support their husbands financially. One reply from a guy is that if his daughter does this, it would mean his failure as a father. This sums up most men in Singapore, they actually want some degree of financial independence, but get angry when their daughters provide for it some another guy. 

I think this mixed-collar dating agency catering to professional women - working-class men is currently the best idea there is. It may take a generation for a mindset change to come about, but we need a catalyst to generate some positive stories about these marriages. It may take a few high-CEP scholars to succeed in coming up with a first attempt. 

How do we sell this to blue-collar men? Off the top of my head, I would sell it this way - they just need to show up for a buffet spread where some mysterious women might try to engage in conversation with them. This sounds so good, even professional men want to do this ( but they are not invited )

I leave it to fine brains who read this blog to brainstorm ideas on how to sell this to professional women. 

This is too hard for me, let me get back to my Quantum computing texts.