Did you make any resolutions for this year ?

 

I've only recently learned how fast time flies for middle-aged folks. The science behind this is that our brain neurons fire much slower, so everything seems to move faster. I've started the habit of stopping myself from reading "useful" books every birthday month to at least catch up with fantasy writing and gaming trends, but this year, I could not read very much. 

For Japanese Literature, I read What You Are Looking For in the Library by Michiko Aoyama. It is a lovely, soothing book that discusses why people should read and how books can turn your life around. It should be given more attention in Singapore because adults read much less. The other book is Lantern of Lost Memories by Sanaka Hiiragi, which is not my style but forces us to ask questions about what day we would like to relive after we pass away.

This is the furthest I can go with serious literature. 

For fantasy literature, I finally started with the first book, Xenos of Eisenhorn Trilogy, by Dan Abnett, which is a page-turner and a great introduction to the Warhammer 40,000 universe. Then, I could cover 40% of the fourth book of Brandon Sanderson's Stormlight Archives, which feels more superhero than fantasy. Still, it's become compulsory reading for me lately as it spawned the most successful RPG kickstarted. 

Finally, I could complete just one large volume with games: Monster, Aliens and Holes of the Ground by Stu Horvath, which runs down different RPGs from the 1970s to 2010s. This is one crazy project that took a few weeks to complete.

That sums up my December, I could not binge-watch, and I now look forward to reading the more "useful" books again starting tomorrow. 

I was once again with a friend at his usual Japanese lounge and bar, and I was stunned when the hosts asked me what my resolutions were for 2025. I was so focused on processing what happened in 2024 that I forgot what I wanted in 2025. 

Last year, I did not dare to make any resolutions, but I hinted that I might start writing a new book or starting a content channel. Still, I did not do all that as my law lecturing workload increased by 300%, so I could be more over-employed as I juggled two freelance roles. The good thing coming out from all this was that 2023 bottomed out, and a quiet benefactor appeared in 2024 to make sure that, in the aggregate, I earned more than 2023 and may start paying taxes again in 2025 after a 4-year hiatus. The market performance, while muted, was still positive, but we will leave it to a Dr Wealth article I will have to start writing tomorrow. 

Overall, I ended 2024 in a slightly better state than 2023 - actually, 2024 was fun with class reunions and hanging out more with my secondary school and JC friends. Socially, my engagements have become more positive. Health-wise, there are no new health scares, and I've gotten used to my prism lenses. Juggling freelance work will never be as stable as regular employment or receiving dividends, so my only resolve is to manage these priorities well and not drop the ball in 2025.

I'm obviously looking at new collaborations. I'm also looking carefully at the kinds of professional conversion plans launched in 2025 and will not hesitate to pick up a considerable, solid skill like AI software development or even quantum computing. But these are iffy and random options, much like my failed attempt to become a professional GM. 

However, a post-financial independent life needs to have a string of beautiful failures and audacious moves because the consequences of failures are so small. Still, the impact on the ego continues to keep one humble.

 

Harsh Truths about Masters Degrees and the folks who have them.

 

About 3 weeks ago, The Economist published some earnings returns to folks with Master's degrees and measured the value added of these qualifications over those with bachelor's degrees. They found that after adjusting for social and economic status and previous job roles, these degrees do not add much value to the person taking it. 

But the actual data is a lot more damning - folks who had advanced degrees in languages, sociology, English and history actually earned significantly less than those who only had bachelor's degrees, which sort of makes you wonder what kind of folks peddle these programs. If your only career recourse after studying for an advanced degree is to teach the same subject in another institution, then you are no different from someone who sells MLM. You might be part of a humanities Pyramid scheme.

Naturally, the response to the Economist was quick and aggressive, with many academics writing articles to defend their product and saying things like an ROI should not be the primary reason why people should spend more time in school. Ideally, people should be driven by their love for learning. Of course, none of them addressed the elephant in the room - if you have a Master's degree in English or Languages, it would destroy more than 20% of your earning returns!

Another critical data point is why women benefit much more from a Master's degree. The Economist explains that advanced degrees mitigate the motherhood penalty, and women with these degrees continue to pour a lot of work into their careers. Sadly, no troll jumped on this point - men who are about to date highly qualified women need to be put on notice that they will commit less to their families. It's a valid conclusion as well that the manosphere should jump on!

Of course, MBAs are right in the middle of the pack; in the Economist article, MBAs generally do not add any value, but the article hints that very prestigious MBAs tend to have high ROIs. And I'm happy that the Business Times today had an excellent article to fill out the gaps for MBA programs.

The numbers reflect well for the MBA programs - yes, even those for NUS and SMU which are not precisely programs you attend for a higher income, but something you need to have an alternative other than the public sector. When I was studying for my Master's in Finance at NUS, the MBA students tended to be civil servants trying to find alternative employment, and more often than not, a local MBA fulfils that objective for them.

Actually, I did hunt for a Masters program in my mid-20s. My GMAT score was 720 with a 6/6 for the essay component - it was enough to get into an MBA program, but probably not the best program on that chart, so instead, I went after the CFA and paid cheap tuition for it - my MSc in Applied Finance cost to be $10k in total. All I paid was the CFA exam and membership fees. I've always been curious what the ROI for my CFA was, given that I never joined the finance industry before Dr Wealth and brought in a 5 figure passive income a month today - would I have the courage to move my funds from unit trusts to manage my own dividend portfolio if I hadn't witnessed how dumb, mathematically inept ( especially those who fail CFA level 2, you know who you are ) and self-serving finance folks can get?

Ok, so now's the hard part, what can we conclude from this data:

a) If you get a local tech or engineering Master, you should seek an overseas posting.

I don't think the situation has changed much for folks who study for a Master's in Computing or Engineering. The range of jobs is not particularly good, so you are better off going off to Silicon Valley and joining a startup that values your skills. I don't think the ROI for a Tech master in Singapore matches the number in the Economist article.

This has not changed for many years; if you are a computing or engineering graduate of any level, you will always be better off working in the United States to build up your experience. The stock options alone might make a millionaire at a very young age.

b) An advanced degree's primary value is in its signalling effect.

I suspect that you are better off signing up for a course I teach at the Polytechnic if you want to pick up actionable and practical skills, I teach Tort Law and Legal Technology, and sometimes I will make you assemble a PDF document using different free software found on the web or employ ChatGPT to analyse a contract. Amazingly, I also teach office politics and how to stop a dagger from being shoved up your back. Also, the course is almost free, thanks to subsidies. 

But that's not what most readers of this blog want. 

For a Master's degree to have a signalling effect, what is being taught is secondary. Harvard has an excellent case study approach, which makes it the Rolls Royce of MBAs, but the real value of a Harvard MBA comes from the question of who is excluded from the program - which is almost the majority of all applicants. By the time you enter Harvard, you are already a superstar and will build up your social capital working alongside other superstars.

  

c) Can a bad master's degree tar your resume?

You'll only read inconvenient truths on this blog, and I doubt you'll find anything in the mainstream press that will publish stuff like this.

Suppose we believe that some Master's degrees can add a lot of shine to your resume and raise your income. In that case, we have to accept that there is a possibility that some qualifications can reduce your employment outcome even though there's this belief that more learning should be a good thing. After all, we live in a world where a guy can marked down on a dating app if he loves anime or poses with a cat in his profile photo. 

For a while, we know the effect being a private university graduate has on your starting salaries. What if having some Masters degrees marks you as having a political orientation or a more hedonistic outlook? It's a stereotype, but some stereotypes are true. In many social sciences, academics are leaning to the far left. Why would a capitalistic and bottom-line oriented multinational company hire them?

Elon Musk tried to hint as such, saying that he prefers skilled tradesmen rather than those incremental political science types - which aligns with the data from The Economist.

d) A Master's degree may be useful in qualification laundering

Sometimes, I get readers stuck in a dead-end job because they have a private degree. In such a case, if they can get a Masters degree from NUS or NTU, it would take the focus away from their private degree when preparing for a job interview. This might be one of the rare and more practical reasons to pick a run-of-the-mill Masters from a local university.

I call this qualifications laundering; it's not a nice name. 

But I like it.

Anyway, I'll catch you guys again closer to the new year !

Finally hit my half century mark.

 

As I prepared for this post, I've just tried to contribute to my Medisave account on the CPF website, and I've been hitting a wall thanks to the dumbass Paylah limit DBS has put on me. Somehow, I can't figure out why I can't contribute to CPF via NETs. 

Anyway, I wanted to say a few words to my readers and well-wishers as I hit my 50th birthday today. 

The past 3 years have been peaceful but not precisely as prosperous as I wanted as interest rates began to rise and yield plays 

took a hit in the markets; nevertheless, I made some gains, mainly in the value of my real estate. As I've spent a lot of ink looking at the past, it is time to look at the future.

a) Options are now open for me to make as many changes to my career as possible.

As I've now balanced two part-time sources of earned income, I'm reaching a state of balance in my finances to accumulate enough to have a track record of income and a reasonable flow into CPF - which I lacked after FIRE. This is a humble amount, but it balances the risk if I ever need to refresh a home mortgage, and I can still put more money in my CPF to offset taxes and draw the 4% from my SA before it disappears at age 55. 

I can do more as I've gotten used to one rough day a week where I slog 13 hours and get myself used to the morning commute and dysfunctional work encounters. 

Like many Singaporeans, I'm looking at how I can monetise a full-time course to pick up some new skills and max out incentives to learn based on Skill Futures. At the top of my list are data analytics, AI, and even ACLP. However, I will be selective about these programs as I have time, money, and cognitive bandwidth. The skills I gain must be helpful in all work areas and make me more valuable to my business allies.

b) Investing in 2025 - All about high dividend SDRs

Many bloggers don't appreciate the hard work done by SGX this year for many local investors, as locals have been glued to the AI stocks in the US and enjoying the dizzying capital gains of 2024. 

I'm a contrarian, not too keen to push more funds into a market with PE ratios above 30. However, I have a successful momentum trading algorithm running, making some spare changes every month.

So, in 2025, I will ramp up some funds into the Thai and Hong Kong SDRs trading in SGX, with a significant position made to Ban of China. I'll be looking for high yields that feed directly to my bank account from CDP, with PTTEP being my next purchase candidate. 

I hope SGX will try to get more high-yielding SDRs into the exchanges, except for Malaysia, because I still remember CLOB.

Of course, as I pick a new focus, material in the ERM programme will also be refined in the same direction. I'm figuring out how to calculate the payout date for SDRs, as it will arrive later than for foreign investors. 

Do note that I've become more and more sleepy about my capital. Interest rates will likely stop ratcheting down in 2025, so perhaps things might be tad boring in 2025 for us yields investors. 

c) Social Life

It's good to pick up some gaming groups for a change, and I've become a casual player for one group who can play any game they want. Otherwise, being invited to an occasional meetup with readers and fellow gamers on this blog is excellent. If I sell more time in 2025, I may lose a few meetup opportunities, but it's okay to make my weekends valuable again. 

But my most tremendous pride is starting my son to paint Warhammer miniatures with me and play a few rounds of introductory skirmishes. 

d) Hobbies and games I will be playing

I'm slowly turning games agnostic. I will be focusing on Legend of the Five Rings as I've only managed to find someone to play the LCG with me after long years of collecting the game. I'm also hacking a Kill Team squad of Intercessor Marines just to fit in, which means more work to paint all those miniature games I have accumulated on my shelf. 

The policy is I'll play anything if there are slots available. With this in mind, I'm still collecting D&D books to read and will still find a way to play a game or two using the new ruleset.

Entertainment-wise, I don't need to binge-watch anymore; I've started watching Dandadan and Secret Level and might ditch my Disney subscription soon. It's infinitely better to read. Also, this holiday, I reacquainted myself with fantasy and hope to finish Brandon Sanderson's Stormligght Archives and the Warhammer Eisenhorn Trilogy. 

There are many ways to achieve flow, such as strategizing a deck for play or painting a miniature, but there are better ways to engage in the real world. I plan to build a new trend-following algorithm for the crypto markets before the New Year. 

There will still be plenty of time to think about the future. I've got one more round next week in 2025, and there's also Chinese New Year. 

Letter to Batch 36 of the Early Retirement Masterclass

 

Dear Students of Batch 36,

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

The markets are still experiencing a roller coaster ride after the conclusion of the US elections, and we are seeing some evaporation of previous gains as markets begin to digest what a Trump presidency might mean in 2025. In Singapore, banks advanced, and REITs retreated as there was this belief that Trump tariffs would generate inflation for the US economy. Interest rates continue to trend down, giving Singapore investors an extended bargaining period to collect high-yielding counters for a longer period.

The current yield of this portfolio is 7.35%. Once again, as the batch size remains small, we have created a very focused portfolio of 12 stocks, not counting Bank of China, as we welcome our first Singapore Depository Receipt (SDR) into the ERM portfolio. In future batches, we will gradually increase our exposure to high dividend-yielding SDRs, which will see at least one high dividend counter coming from Thailand in March 2025.

Also, for this batch of students, students employed ChatGPT on SUTL Enterprises, and an AI-generated analyst report is also attached to the materials herein. ChatGPT is getting better and better with each iteration, and it is our wish that we can decouple our program from analyst reports one day.

Lastly, I hope Batch 36 will participate actively in the FB group.

Hope to see you then!

Christopher Ng Wai Chung

Are you part of the CDP Master Race ?

 

[ The concept of the CDP master race is inspired by the idea of the PC Master Race, gamers who game on their PC. It is not inspired by WW2 Germany. ]

For modern investors who are younger Millenials and Gen Z, there is no need to understand what the Central Depository or CDP is because modern brokerages that run on the custodian system are very competitive. Trading on an old-school broker usually costs $25 per trade, while online brokerages like Interactive brokers, if charged at all, can often execute for around $2. 

Despite cheaper trades available, I still prefer to park most of my net worth under CDP, and I imagine many older investors may also like it. 

Here are my reasons for doing so. 

a) Singapore Savings Bonds or SSBs

SSBs should still be the safest investment in Singapore. Based on what I know, the only way to buy them is that you will need a CDP account to do this. SSBs are the closest thing to investing in a risk-free rate, and this should be noticed if interest rates spike one day in the future.

b) Shareholder activism

Shareholders need to know what their companies are doing, and when you own shares in CDP, they are held under your name. You can join shareholder meetings and fight for scraps at the buffet table. Shareholder activism also means voting down ideas that you do not like. While this is nothing much for younger investors, it gives the retired elderly something to do - you can also meet other people.

c) Dividends on payable date

This is a massive deal for me. For a successful setup, dividends will arrive by 5.30pm in your local bank account on the payout date. The money will come even if you do not have a recognised degree, study in a neighbourhood school, or might lie in a hospital in a coma. For custodian accounts, they will show up the following day on your dashboard, and then you need to issue an instruction to pull the dividends into your bank account. 

This causes delays and is generally more active than people think passive investing should be.

d) Easier on your beneficiaries and gifting your children

When you pass on, knowing that the bulk of your funds are in CDP will make it easier for your trustee to handle the stocks. For my dad's case, I opened a joint CDP with my mum and then moved the stocks into this joint account at $10.70 per counter. When my kids reach 18, I intend to pass on some blue chip counters while I am still alive.

For folks with online brokers, do realise that chasing freebies will result in many brokerage accounts that can give your trustee a logistical headache trying to distribute your investments. I've not done such cases, but I suspect if it is an online brokerage, it may be better to sell everything and then distribute the cash to all beneficiaries. (Ensure your kids know how many investment accounts and which brokers you have.)

Bonus: Not so much about CDP but the Supplementary Retirement Scheme or SRS

By opening an SRS account with a bank, you can set aside sums up to $15,300 to invest in the local stock market and reduce your personal income taxes the following year. These can be huge savings for folks in the high-income bracket. Amounts saved in SRS can be invested into the local stock market until you are about 63 years old. You must require a traditional brokerage account to trade stocks by drawing sums locked in the SRS account. A correct setup will give you a conventional brokerage that uses funds in your bank account or SRS at the same time.

Of course, employing CDP with a conventional brokerage is only practical in some cases.

As traditional brokerages charge more for each trade, you may only wish to use stocks you intend to buy and hold. Bluechips like DBS and low beta REITs like Fraser's Centrepoint Trust and Netlink Trust rarely make sense in high turnover portfolios, so they naturally would make a great fit with CDP. I generally employ high dividends and low beta in my core dividend-paying portfolio in CDP.

Online brokers are better for high-turnover investments. My algorithm-driven trades are all done exclusively via IBKR.

Share this article, as CDP gets little praise on social media. I think all serious retail investors should have one account.

Curse of the Hummingbird

 

This article arose from a series of discussions in the SGFI telegram group. I thought I'd share some deeper thoughts on it, as it is relevant to self-improvement and investment.

The person who started the conversation spoke about the advantages of being a jackhammer. A jackhammer has a narrow focus on hobbies; all they can do is focus on one thing and happily lead their lives. The opposite of the jackhammer is a hummingbird—something that flits from flower to flower without ever discovering what they are meant to do. The original inventor of the concept believed that the world needed more hummingbirds because hummingbirds can bring a cross-pollination of ideas and create innovative breakthroughs.

You will find many more metaphors in business literature, such as the hedgehog and the fox. 

As far as my own analysis goes, folks with an S in the MBTI, like the dreaded anal ISTJ, are jackhammers and do pretty well in Singapore, especially the government. In contrast, folks with an N tend to be hummingbirds, as they have big ideas and can apply mental models across domains. I tested ESTJ in my teens and ran with it throughout my engineering career. Still, once I started to pick up investing, the S had no choice but to give way to a more N or intuitive approach towards problems as I began to see investing as a form of liberal art where analysis can come from multiple angles. I was influenced by an old book called Latticeworks by Robert Hagstrom in the early 2000s. 

Are there investing styles for jackhammers? Indeed, using broad index ETFs to construct a 60/40 - VT/BNDW portfolio can be very effective because it can compound between 6-8% over multiple decades. Then, it's just researching ways to reduce expenses and finding more ways to optimise your day job to accelerate wealth creation. Picking this up remains the best defence against financial advisors and paying high commissions to get your money to work for you in the markets,

Dividend investing could be slightly more sophisticated, so it can be suitable for jackhammers. Just target sustainable yields between 5-7%, then stubbornly build up a portfolio of local stocks in a CDP account to reap hundreds of paychecks yearly. It's more complex than 60/40, but the folks who do this are so loyal to this approach that influencers still get cheap eyeballs by provoking and disrespecting "dangerous" dividend investors.

The transition from jackhammer to hummingbirds starts when you become dissatisfied with the Sharpe ratios you are getting. This happens when you interrogate your data and find factors that outperform. Factor investing is very rewarding for hummingbirds because when you see a new factor that works, it is interesting to explain why. Like why do low Beta strategies work? Do people take stock bets based on excitement, so boring stocks are cheaper?  

Technical analysis and charts take hummingbirds slightly further. Some folks love reading tea leaves for different patterns to emerge. I enjoy coding to discover trending ETFs and buy them for better results - that's a very technical investing approach. I've finally moved all my Terra coins into ETH, and I'm developing a momentum-driven algorithm to see whether I can juice my cryptocurrency portfolio in Binance.

However, some strategies only appeal to extreme hummingbirds, and I dislike them. I don't like derivatives and zero-sum games, so sacrificing an upside to juice dividends using covered call strategies is just there to make some folks feel really smart. I'm sure they can make money, but I don't have the time for it. 

Maybe the solution is not to be dualistic about the jackhammer-hummingbird divide.

Based on our personal resources, conscientiousness and intelligence, we have a pool of attention to devote to various interests. 

The jackhammer will narrowly allocate his attention and get deep into a few areas.

The hummingbird will speak thinly and have a passing interest in many fields.

However, many approaches need to be broader and more profound. 

• One way to moderately go into two fields and synergistically use them at work. 
• Another is to supplement a broad interest in many things with one narrower focus on one area you are passionate about.

There are several principles to guide us when determining to pick up a new area of interest:

• If you decide to pick something, a hobby or a field like finance, the opportunity cost is not picking something else, like brewing hipster coffee or writing sonnets. 
• If you keep focusing on one thing, the payoff may achieve diminishing returns. If you have a 6-7% dividend portfolio, and some folks are raving about dividend growth as a better approach, they might be correct, but how much better? Dividend yields are more visible, and dividend growth requires projecting into the future.
• Some things have a J-curve. A project may generate negative returns and frustration but pay off later after you allocate more time and effort. A 1-month violin course is a bad idea. 
• The amount of resources a person can allocate is limited by wealth and talent. Life is not fair.

Because SGFI groups have so many INTJs, it's normal to think that it's a curse to be a hummingbird, as INTJ's significant weakness is the inability to stick to a hobby. At the same time, everyone else can settle with something profound that they are passionate about, so many will die and leave a lot of half-pursued interests for their beneficiaries to plough through (how come your recently deceased uncle got a bongo drum next to a Raspberry Pi?). 

Thoughts of shallow engagements and half-complete hobbies might be a sign of high intelligence and giftedness.

Maybe to be blessed, you need to be an imbecile.