The curious case of Colin Lau's Early Retirement

 

When the video about Colin Lau came out, a lot of friends forwarded it to me. Some folks even mentioned that there's now someone to give me a run for my money, even though there are folks like AK71 and Investment Moats who probably have a safer financial margin than me.

I thought it might be useful to blog about the strengths of Colin Lau's approach to financial independence and its inevitable weaknesses. I'm not coming from a position of being a critic; I actually think that Colin Lau's work is admirable, and it is a sad waste that the media took a while to recognise his effort doing charity work for the Philippines.

So here's what I think are the key takeaways:

a) You do not need to be rich to be financially independent

Colin's technique is hyper-frugal but also relied on the economic situation during the Great Financial Crisis of 2007-2009. In 2007, at 35, Colin bought a S$87,000 three-room flat with about 64 years left on the lease, paid in full, with no mortgage, since he felt loans "lose a lot of money." He rented out a room for S$900/month, which paid off the flat's cost within eight years. He still collects that rent today, and the flat has since appreciated in value.

b) You don't even need to buy stocks if you can minimise your personal expenses

He saved 80–90% of his income during his working years ("Everybody was spending money like water, I was spending like a test tube"). He now lives on under S$150/month, with total monthly cash flow of about S$2,500 (rental income plus insurance payouts bought when younger). He's saving the surplus for future eldercare, since he's a bachelor with no children. His philosophy: don't pinch pennies on small stuff; instead, cut the big-ticket items like housing.

This is a number that no one in my family can live on, not even my kids, because they have enrichment. Amazingly, Colin does not employ equities because all it takes is a 5% dividend stock portfolio of $36,000 to generate $150 cash flow every month on average.

c) You still need to do a bit to take care of your health

A serious health scare in June 2025 left him hospitalised for 62 days with 15 surgeries and a S$146,000 bill that is covered fully by insurance and subsidised ward class, so he paid nothing out of pocket. I'm actually surprised that he is willing to pay for some kind of insurance plan. 

Nevertheless, I think his planning and possible C/B2 class ward stay are the reasons why he's still alive today.  I can't help but feel quite sorry for him after looking at this episode.

Of course, this video raises a lot of questions as to whether someone can find a tiny little flat to live in without paying for a home mortgage. I doubt it's possible if you want a remaining lease of 60+ years, but if you are in your 60s and want something with less than 40 years, it might be possible. Also, I suspect the government may allow low-cost rental housing for singles in the future, so it's possible to build a dividend portfolio to pay off the rent for a one-room flat. Whatever it is, Gen Z would need to find a creative solution to replicate the same results.

Finally, there's no way to sugarcoat this, but Colin Lau is making the same mistake as the other ultra-frugal FIRE thought leaders in Singapore, all of whom are frugal single men.

What is he going to do to deal with loneliness when he gets older?

I think charity work is an important component of having a meaningful life, but being frugal to the point of remaining single might mean a lonely existence when you enter your 70s or 80s. There are some things that having a family and children can do for you - if you need to go for an operation, at least your kids (if raised well) will be there for you.

You can Google the number of deaths from loneliness; it kills at three times the rate of heart attacks. And men tend to be even lonelier than women as they get older.

But no FIRE blogger really wants to blog about the endgame when they hit their 70s; they just want to showcase their frugality porn on the web.

How an investor can benefit from the Feynman Technique

 

I still get a lot of questions about why I teach. 

It's always a variation of the question, like, "If you have such a successful formula for investing, why do you want to share it with others?" 

For quite a while, I argued that by teaching the subject deeply, I am forced to progressively simplify the concept and understand it based on first principles; this is further honed by serious students with genuine questions who expect answers because they pay top dollar to attend my Masterclass.

Now, with AI and teaching an actual Data Analytics class, things have gotten crazier.

It's no longer about deepening a person's understanding when a lecturer teaches a subject. The lecturer can build something in real time to test the theories they learn and see whether it holds up in reality.

So here's a concrete example. 

One of the things my students have to do is linear regression; they might need to figure out which attributes result in better fitness, like lower blood pressure. For every topic I teach, I ask myself how to make it relevant to me and incorporate it into my Portfolio Manager Windows program, which I vibecoded using Claude Code.

So I tried to create a simple regression that looked at just stocks in my portfolio and determined whether a PE ratio and dividend would affect investment gains after a year. And I can see that a low PE ratio resulted in superior performance, but the high dividend stocks in my own portfolio would actually drag down returns after a year.

Upon closer examination, the reason is less dramatic; the outperformers in my portfolio are the AI Tech stocks on SGX like UMS, AEM and Frencken. With the exception of Frencken, I owned these counters when they were still dividend stocks a number of years ago.

Another thing I make my students do is to conduct K-means clustering. It employs an algorithm to divide a data sample into K parts. It's like dividing the class into 5 groups using AI based on the data fed to it, so that insights can be gleaned from this categorisation.

So when I teach this topic, I try to get my students to use their intuition to make a case for how the categorisation is done ( groups like "Fit Daddies" or "Bored Tai Tais" using gym data). It is not an easy task because it's highly subjective.

So after teaching, I began to eat my cooking and tried to cluster the stocks in my portfolio using stock ratios, and it somehow grouped banks with stable REITs, the Tech-based growth stocks, and high-yielding REITs with less prestigious sponsors. More interesting is a cluster of orphan stocks that include First Shipping Trust, Global Investments and, probably unjustified, Capitaland India Trust. 

Where analysis can be done, data can be ingested in a built-in AI chatbot. 

So, I've gone even further and given my software chatbot capabilities to answer questions about what I should do with my portfolio. In this example, the AI tells me to ditch ESR REIT for Sabana REIT.

My journey continues; this article is to get folks to look out for a future video on whether AI can replace Financial advisors with the good folks of The Financial Coconuts. I suspect the video might not do that well because it is easily one of the most technical talks I've ever done.