Tuesday, September 26, 2023

On Istanbul


I touched down in Singapore yesterday morning and just recovered from jet lag. I enjoyed my trip immensely even though I faced some physical difficulties throughout my trip - I had a lingering cough from a flu bug two weeks ago. After I recovered, I overstrained my right kneecap and had difficulties climbing stairs. Nevertheless, we clocked over 10km of distance each day as Istanbul is excellent as a walking tour. I also had exotic food experiences like the kokorec I had above - some kind of kway chap kebab dish which probably will never find its way to Singapore.

While I'm not a seasoned traveller, I witnessed the power of the Revolut card in action, and I enjoyed shifting Turkish lira in real-time to some pals who paid with a credit card for all the meals. Withdrawing cash from ATMs is less fun as some terminals let you do it for free, but some others can charge up to 8% for cash withdrawn.

As I'm not a big shopper, most of my money was spent on museums and eateries, and I only spent about $2,000 SGD during my entire week there, not counting flight and hotel expenses. 

At the back of my head at the beginning of my trip, I wanted to know whether Turkey could be an economic role model for countries like Malaysia as they are quite progressive and moderate. Immediately, I was proven wrong by actual statistics. Malaysia has a GDP per capita of about 10-20% higher than Turkey.

Of course, I assess what life will be like as an expat in Istanbul. A single person will expect to spend about 15k Turkish Lira living here and about 20k Lira renting in the city centre, meaning you can live comfortably close to SGD 1,750 a month. We give some slack for spending and apply the 4% withdrawal rate. An SGD 600,000 portfolio of REITs and blue chips in SGX can generate enough investment income of $2,000 per month to support an expat lifestyle without working there.

You can look at more granular data here.

Of course, this research does not account for the difficulties of getting a pass for a long-term stay. It also needs to account for the vast cultural differences between Istanbul and Singapore. 

Finally, we can't really have a helpful discussion on Istanbul without talking about Turkey's ridiculous inflation levels. Turkish inflation is forecast to reach 58% in 2023. We only managed to catch two small glimpses of this on the ground. 

Firstly, some of the foreign workers in Istanbul are Indonesians and even the Turkish bath I had was performed by Indonesian women. We chatted with a waitress from Bali, and she expressed a desire to get out of Istanbul quickly as the money was not enough. She hopes to move to Serbia soon.

Secondly, we had one of our most unexciting meals in an eatery near our hotel because the meat in the bun was almost laughably non-existent. My guess is that it is probably a result of shrink-inflation. Too bad we did not have a photo of this. 

All in all, I enjoyed myself immensely, and I would recommend you folks visit Istanbul for a holiday.

Thursday, September 14, 2023

Next week : Istanbul


After this round of training, I've decided to take a break and travel with some old friends to Turkiye. I will be flying off to Istanbul on Sunday morning. This is only the first trip in 2023. I will be heading to Osaka with my family in October. 

Just a couple of points for the curious :

  • The disparity between money changers and Revolut is enormous. I converted SGD 500 to 8500 Turkish Lira with a local money changer. When I used Revolut, I got 9843 for the same amount. I guess the trick is to minimise the amount of cash you must carry when travelling. 
  • There's almost zero probability that my group would not get scammed. Some tips I got include picking things that belong to someone other than you on the ground, even if it seems like you are helping somebody else. Taxis can drive halfway and then claim that their meters are broken. Shopkeepers wrap up stuff for you when you are making enquiries on prices. 
  • If the price is not too unreasonable, you should close the deal and move on without much drama. I will focus on buying as little as I reasonably can since I'm not a shopper anyway. 

For this trip, I may have overplanned, reading one travel guide and then giving myself a crash course on the history of Istanbul from the classical Greek era as the town of Byzantion to modern Istanbul. 

I'll catch you guys on this blog when I return!

Saturday, September 09, 2023

Letter to Batch 31 of the Early Retirement Masterclass

Dear Students of Batch 31,

It's been a great honour and privilege to conduct a 5-Day Early Retirement Workshop for you.

First, I would like to apologise to the class for the lack of energy for my delivery.

Batch 31 concludes possibly one of the most challenging classes I ever taught. I started getting muscle aches and a sore throat from Day 1 of the class. I even visited the doctor that morning, but despite every medical precaution, my throat and cough kept progressively worsening. On the last day of training, I was literally on over ten kinds of drugs to mitigate my cold symptoms, my diabetic control and my hyperactive thyroid. 

Despite all this, we could still build a reasonably attractive portfolio that generated about 6.5% yields. And to do this when our equity risk premium is over 6%. This portends well for the portfolio's future – but you need holding power.

It would help if you held onto the portfolio until the time interest rates are seen to stop rising, which can happen soon before the end of this year. After that,  you can experience an upside when favourable circumstances arise. One possible scenario is when China uses the “bazooka” to stimulate their economy. Another is when some hope of peace appears in the Ukraine.

In the meantime, as you build your portfolio, expect some short-term pain as REITs continue underperforming against the STI index. Find solace in dividend payouts and see every downtrend as a bargaining opportunity whenever possible. Our stock selections in this batch do not contain much controversy, and I look forward to investing in your picks as soon as I find the liquidity to do so.

Lastly, I hope Batch 31 will participate actively in the FB group. I look forward to seeing you in the following community seminar slated for Sep/Oct 2023.

Hope to see you then!


Christopher Ng Wai Chung