Wednesday, July 03, 2024

Should you prioritise Financial Independence over starting a family?


I want to answer a reader's question that was posed to me lately. This person found someone very attractive, but she wants to prioritise early marriage and children. However, because this reader is close to FIRE, he is conflicted about choosing FIRE or jumping into the relationship. 

It is time to share my updated thoughts on this blog because I suspect my earlier articles may have had an undue influence on him. I am OK with changing my mind on this blog as I age. 

First, there are solid arguments for a single guy to choose FIRE over starting a family. This would be my choice in my 20s, having only started dating when I could live on investment income (because I can pay for every date with dividend payouts). For a guy, his bargaining power grows exponentially as his portfolio grows, and you be fixated on a kind of woman, but not a specific one, so go for someone only when your bargaining power goes up. Truth is, for most guys, the dating scene can be very cruel, with dates on Tinder trying to sell ILPs to you and most women going after that "6-foot-five investment banker with blue eyes." 

But as I got older, my mind started to change on this matter. 

Suppose you are a guy, and you've already been shopping around. You are already in your mid-30s with a solid career and educational qualifications. You find someone more attractive than your previous set of dates, and she is similar in professional credentials. 

I fail to see why her desire to start a family should stop you guys from going ahead; you're adamant about attaining FIRE. 

Some points of consideration :

a) Suppose there is a fear of divorce. The national statistics should not apply to readers of my blog. Suppose the rate of divorce is 30% in Singapore. Your probability of divorce should be much lower if both of you are not married at too young and have degree qualifications. Adjust your probabilities as you know more about your date. 

b) The idea that marriage and kids can slow down FIRE does not account for the government policies that are specifically designed to maintain a heteronormative society via the BTO/EC systems. While a single guy can probably FIRE much earlier, he will lose out on the capital gains from a leveraged residential property that only married couples can buy. So far, the increases in my EC valuation exceed how much I spend on my two kids. 

c) Folks don't understand that marriage and kids can build one of society's most potent economic units as you reap economies of scale. Statistics show a retired couple spends less than two singles living separately. 

The final point I want to make is that many readers may be fixated on the remaining single FIRE thought leaders, but I don't believe that they will have the last laugh.

Just because a person is wise with money does not make them wise regarding relationships. If someone has money and is unattached, it may even say something about their personality!

I don't believe that any of my happily single friends have a plan to counter loneliness, which can kill at a rate faster than heart disease, and it actually gets more complicated to form friendships as a guy after your 50s. I don't see Gen Z running up to me to get me to play D&D with them. 

At the end of the day, we can learn from the tragedies we read about in the press, the cases of Yang Yin  
and Mitchell Omg / Audrey Fang may be lurking in the corner, waiting to pounce on the elderly who are financially independent.

Who will spend your money in the end?

Saturday, June 29, 2024

Some advanced thoughts on Malaysia and KL


After returning from my trip to KL, it might be time to talk a bit deeper. I hope that these random thoughts can moderate some of the feelings of folks who are caught up in the fervour started on some Telegram groups about buying homes in JB or KL.

a) Conscious currency conversion between SGD and MYR

While in KL, I often divided the cost of any item I wished to buy by 3.5 to calculate the equivalent cost in SGD, and I would always conclude that the price was low. Malaysians in Singapore do the opposite. They apply a multiplier of 3.5 and always conclude that everything in Singapore is costly. 

I had an attitude adjustment from a Malaysian friend who works as a PMET in Singapore. He has to travel to and from every week to give his family a better life. He is the only person who provides a unique perspective on all this. He says that Singaporean food is very cheap compared to Singaporeans' salaries. 

Imagine what it's like to pay MYR $15 for economic rice as someone who works in Malaysia. 

b) By the numbers, KL would make an excellent retirement destination for Singaporeans

If you look at the situation from a pure numbers perspective, my ERM students researched and showed that an expat in KL can live on $20,000 SGD a year, including rent in a one-room apartment. This means that a 4% withdrawal rate and a $500,000 portfolio can provide a working retirement plan for a single person. 

Beyond the numbers, issues like political stability, changes to the MM2H scheme, and safety will still be a big impediment for many Singaporeans. Having close relatives nearby and being a good driver can greatly help your retirement journey. 

c) Buying Malaysian real estate is still a terrible idea

After my trip, despite all the news about more collaboration between our two governments, buying property is still a bad idea. Singapore's land scarcity is unique to us, and we can't transplant our ideas about owning land to Malaysia. 

KL has old towns like Cheras. KL also has townships which are has-beens like Subang Jaya and upcoming yuppie enclaves like Putrajaya. The fates of house valuation will be based on these shifting tides.

It's nowhere close compared to the millions of dollars of equity you made buying your EC during the PM Lee era. 

That being said, there is nothing wrong with renting a unit in Malaysia using dividend payouts or HDB rents from Singapore. 

d) Education and being stuck in the lower parts of the value chain is an issue

Bank Negara has been trying to hype the Ringgit for the rest of 2024. They might be right in the short term, but I can't see how the Ringgit can maintain its current value against the SGD over the next 10 years. The locals need to improve their English proficiency, and I can't even speak English to someone in an up-market European-themed eatery. Also, the convenience store clerk of a Japanese outlet would turn your business away, claiming no loose change.

PM Anwar surprisingly knows about this problem but has chosen to anger his nationalists by asking us for help with English teachers. After I visit KL, I can understand how urgent this request is. Of course, how we respond will be equally entertaining. 

I encourage intrepid Gen Z types to consider trying out some kind of digital nomad lifestyle centred around KL. Earing in SGD and spending in MYR is da bomb! 

It's still relatively easy to fit in culturally, and for the more enterprising guys, you'll never know whether you can find a spouse while you are there. 

Wednesday, June 26, 2024

My latest trip to KL.


Last week, I took a trip to KL to enjoy the last few days of the school holidays. The trip was funded by rental payouts from JB property, which I could not unload at a reasonable price, so the feeling of the powerful SGD was diminished as I was spending primarily the rental income earned in MYR. Nevertheless, we put ourselves up at a better place at Ampang for $150 SGD a night - a far cry from previous trips where I preferred low-cost accommodation at Petaling Street. 

In many ways, KL has not changed. The "software" that Singaporeans take for granted was simply not there, with staff in convenience stores refusing to provide change and waitstaff at high-end eateries like Paul's being unable to converse in basic English. However, you get what you pay for, and the experience is still cheap and pleasant as you no longer feel the budgetary restraints that fetter your spending powers in Singapore. But there are certainly many areas where KL wins hands down - the Grab Taxis are fast and cheap, and we are better off just meeting our relatives at many foodie destinations instead of expecting them to drive us there. 

KL will always be the place to go for me because it now has three fantastic bookstore branches. The Kinokunitya bookstore at KLCC boasts a better RPG collection than the Singapore branch. There is also a well-designed Tsutaya bookstore at Pavilion Bukit Jalil and a fantastic Taiwanese bookstore, Eslite, at Bukit Bintang. Singaporeans will likely have to fly to KL one day to visit the bookstore as our national libraries crowd out the local bookstores here. 

Other than books, the only thing I can really talk about is food. I'm fortunate to have spent two days with a secondary school pal who drove me to distant eateries and two days with relatives who brought me to a different set of restaurants.  

Before discussing my pleasant food experiences, I want to express my disappointment at the much lower standards of my usual Prawn Noodles at Bukit Bintang Lot 10 food court. The lady boss remained the same, but the prawns were overcooked with the "black veins" still intact. We paid a ridiculous sum of MYR 280 for the meal, and I can get cheaper and better Prawn noodles next to my home in Woodlands. That is my last visit to the outlet. 

That aside, here are three of the better places I ate in.

a) Village Park Nasi Lemak

Village Park Nasi Lemak was the best nasi lemak I had ever tasted, but it was priced at a ridiculous $12.50. Comparisons with Coconut Club in Singapore are pointless, as I heard that Coconut Club's Nasi Lemak was based on this original brand. Like Coconut Club, the best part was the succulent chicken, which was crispy on the outside and soft-and-juicy inside. 

b) Siu Siu Restaurant

The second epic place where I had a meal was a local institution called Siu Siu Restaurant, where the local zhi char was excellent. We were disappointed that they ran out of crabs, but we still enjoyed many meat dishes and fish. Clearly, it is advantageous to go where the locals eat, and the food was not only cheap but excellent.

c) Porto Romano Restaurant 

The last choice was purely accidental. As we lived in an old but relatively upmarket mall called the Intermark, we found a classy-looking Italian eatery that served reasonably priced food. We had a decent pasta meal, and on the last day we were in KL, I tried to blow the remaining budget on a Surf and Turf item, and the price/quality exceeded our expectations. 

All in all, it was a good trip. I originally intended this trip to be for book browsing, but having friends and relatives drive us to far-out places really enhanced the foodie experience for me. If I go to KL again, maybe at year-end, I want to refocus on museum visits and their handicraft centre, which I cannot do on this trip.

Wednesday, June 19, 2024

Insights into Acquisitional Wealth, Italian Espresso bars and Chuan Chuan.


I will fly off to KL tomorrow for a few days of cafe hopping and wandering at bookstores. The KL scene has become much more vibrant for bookstores as Singapore has been losing them to our well-run libraries. I foresee a future trip to Bangkok to visit game stores and KL to bookshops.

Today's article is about chain combo-ing some books to derive insights. I was fortunate to read these books in a row, and they enriched my personal experiences during my short break after conducting my 34th installation of the Early Retirement Masterclass.

Let's begin with Josh Tolley's Acquisitional Wealth, a novel personal finance book that folks should read. Initially, it reads a little like Robert Kiyosaki, but then it takes a detour into the world of small business M&As. Tolley believes that instead of the usual work, saving and investing in mutual funds, folks might be better off buying businesses from small business owners. There are many non-cyclical businesses like a car wash or a laundromat with owners seeking to retire, and you can buy them just like a value investor should. One major issue is that you often have to borrow money to purchase such businesses, and the acquisition process requires months and the services of a good accountant and lawyer.

I enjoyed this book so much that I started googling for business brokers in Singapore. After a while, I realized that our markets are so severely beaten down that we can find illiquid companies trading at 3-5 PE, so there might not be a need to buy a business. The book's biggest glaring weakness is that it does not say much about valuation, which can be remedied by reading textbooks by Aswath Damodaran. If you are considering expanding your mind beyond the usual investments, consider taking this book out for a spin.

I give my brain a break after a finance read because I'm getting mellower and becoming more interested in human matters. Books should trigger pleasant memories, stimulate ideas for travel, and teach you a thing or two about life. 

Chinese Espresso by Grazia Ting ticks all the boxes. It is an ethnographic study of Chinese immigrants from Wenzhou who are now owners of espresso bars in Italy. This book made me want to travel to Bologna, Italy, with my posse next, given that I had a fun trip to Istanbul after reading the history of the Byzantine Empire. The idea is to meet ethnic Chinese who speak fluent Italian and Mandarin and are forced by circumstances to buy coffee bars to survive in Italy.

For a book like this, it's good to be exposed to the racism faced by Chinese immigrants, but it is also a fascinating read about coffee. The author worked as free labour for these espresso bars and discussed how difficult it was to generate the foam with evenly sized bubbles for a cappuccino.

But what's really valuable for the finance-obsessed is how ethnic Chinese think about business operations. The Wenzhounese can dominate the coffee bar trade because they see their kids as free labour. The profit from an espresso bar operation does not account for labour costs as it is family-run, and profits are for the whole family, with the patriarch using his funds to buy up other espresso bars for their married children. The Wenzhounese, the most entrepreneurial of all the Chinese dialect groups, already operate on acquisitional wealth the way Josh Tolley would have wanted. 

This completes the circle of books I read these few weeks, one book on theoretical ideas on small business M&A and another, an intimate description of small businesses in Italy.

I relate what I learn to my ordinary life. After conducting my course, I have two days when my wife and kids are with their in-laws in Malaysia, so I decided to hang out with a friend over the long weekend. He used to hang out in a Japanese pub that had closed down, so he wanted to just drink with the ex-staff, but all I wanna do is to sing.

So I followed him to a weird corner in Jurong East called Vision Exchange, an ethnic enclave of PRC immigrant workers with an entire row of Chinese eateries. 

We picked a quiet eating place, and prices were super competitive; 15 sticks of Chuan Chuan were sold for just $10. Compare that with our local equivalent of 10 satay sticks for $13 at Pasar Malam.

[ On a separate note, I spent $13.50 on Chuan Chuan, then I sang for 3 hours in a karaoke lounge with one drink for $6. My total damage that evening was less than $20. ]

With such a price point, it is no accident that Mala eateries have also begun to dominate the local F&B scene the same way the Wenzhounese have acquired the espresso bars in Italy. 

Immigrants are willing to struggle as locals cannot chiku (eat bitter); they are willing to exploit themselves to sell cheaper food to us. With a Mandarin-speaking majority, Singapore is much more attractive to the PRC than Italy. 

But, of course, there are plenty of parallels between local Singaporeans and Italians. When Italians see the PRC, they think that the Chinese are part of a mafia group. We tend to see them as money launderers.

If there is any lesson to learn from my reading adventures, personal finance readers owe a lot to sociologists, and we should read their books more. One classic is The Millionaire Next Door by Thomas Stanley, who inspired me to go all the way to hunt for cheap chuan chuan in the first place. 

Saturday, June 15, 2024

Letter to Batch 34 of the Early Retirement Masterclass


Dear Students of Batch 34,

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

 As I cover this latest batch of students, interest rates are still high, and 2024 is expected to have just one interest cut around the year-end period after the US elections. The pessimists might say that the portfolio we build still faces some downside risks as REITs continue to underperform. Still, optimists would see this as a bargain opportunity with a longer stretch. After all, the projected yield of the portfolio built by this batch is high at 7.42%.

 Community observers who follow the construction of ERM portfolios should note that this class would have selected a large variety of local stocks, as dividends are pretty high across the board. However, I removed a few counters to make the portfolio more manageable and accommodate folks with a smaller amount of capital, so please refer to the rejected list of stocks for details.

 I am a realist. Students should see some capital losses if inflation remains high in the US, which is why I hedged with one banking counter. Otherwise, the portfolio will outperform if we get lucky and interest rates come down early in 2024.

Returning to the class, I wish to thank this batch of students for keeping me entertained and curious. The conversations in the classroom make the class come alive, and I’m grateful to be able to tap into your broad life experience today. I particularly enjoyed the conversations about Chinese society, what working in China feels like, and how the nature of involution has shaped Chinese society today. They gave me hope that the situation in Hong Kong has bottomed out.

Lastly, I hope Batch 34 will participate actively in the FB group. I look forward to seeing you at the following community seminar, which is slated for Q3 2024. 

All my focus is now on bringing LLMs into this program

Hope to see you then!

Christopher Ng Wai Chung

Thursday, June 13, 2024

About some Telegram finance groups I am in


Today, I will discuss the few personal finance-related chat groups I am in on Telegram. I thought it would be interesting to share a little bit about the groups I participate in so readers of this blog can join them. 

Before I begin, I want to talk about the elephant in the room in the 1M65 chat group I do not participate in. From what I gather from folks who visit that group, the culture of 1M65 is similar to the EDMW forums of yesteryear. There is a lot of posturing, and occasional fights can break out, getting trolls banned. Nevertheless, I greatly respect Mr. Loo Cheng Chuan, who made the group what it is today, even though I have no desire to participate.

We must thank Mr. Loo, as he keeps many weirdos and folks jonesing for stock tips at bay so they don't infect the other smaller communities.  

a) Dividend Investment (

The first group I want to talk about is the Dividend Investment group, which has over 3000+ members and is the place to go for news on Singapore dividend stocks. On the first observation, it is the average group you go to to get news on dividend stocks. 

The admin is very conscientious about dividends coming out from SGX and HKSE counters, and one of the pleasant things I like about it is that it showcases a down-to-earth lifestyle. Dividend investors love sharing food pics, not from expensive restaurants but cheap hawker centres. My guess is this group may have more Gen X and Boomers in it.   

The group is quite friendly and down-to-earth, but it goes into battle mode until someone comes into the group to criticise dividend investing. Then, they can be pretty fierce. I don't blame them; at the moment, dividend strategies are going through a bear moment, and most retail investors just want to talk about NVIDIA and buy based on momentum. So dividends investors are the LGBT+ folks of the investing world - folks getting their lifestyle and investment choices questioned all the time. Still, they are fundamentally very comfortable with who they are, why judge them on their investment picks? 

Dividend investors just want to be left alone to collect their passive income. They might be older and have a lower concentration of professionals, but they do not aim to be the most brilliant guy or the best investment manager in the room. A common trope when someone collects dividends is jokes claiming they live a "dangerous" lifestyle. This is the result of 1M65, which made the claim that dividend investing is dangerous.  

A few guys I like include Huatist, the resident bear who gets excited when stocks turn red. Paul is always free to dispense the occasional wisdom and what he has for breakfast. 

b) Singapore Financial Independence Community or SGFI (

I spend a lot more time in the SGFI group. It was started by Supreme Leader Investment Moats to discuss the more esoteric aspects of FIRE, such as the safe withdrawal rate, but it has evolved well beyond his control. 

If you want me to describe SgFI culture, it has become a safe space for high-IQ professionals with INTJ personalities. Occasionally, some folks show up to ask everyone whether their retirement plan is sustainable, but they stay to talk about travel, FI philosophy and lifestyle. The female participation is easily the best I've seen in any group, so be prepared for some weighty female issues to be discussed now and then. I think getting women to open up about their lives and finances is hard enough, and SgFI goes further to attract highly accomplished female professionals to join our discussions. I hang around because the otaku and geek discussions are cool, and INTJ folks are very knowledgeable about anime and RPGs. 

All this being said, SGFI is not an inclusive culture. 

Ideas have to be robustly defended. If you want to brag about trades in a non-contextual manner, you will be cut down to size quickly. The Dividends group clearly understands that SgFI is more PMET-bent, and newbies complain that some members are pedantic. (It might be a GEP thing.)

 I cherish the discussion of the trio of ladies XX, KitCat and Ash. I'm afraid that some incel might chase them away. 

One guy, Leon, is working on summarising the complicated discussions using AI. 

Supreme leader Kyith may occasionally show up if something displeases or annoys him. 

There are many other groups, but due to information overload, I only follow two. However, I don't do this for investment reasons. I'm more interested in lifestyle choices and philosophies. 

Sunday, June 09, 2024

How to think like SM Lee Hsien Loong


Whether you like him or not, PM Lee Hsien Loong presided over a successful reign that generated a massive amount of wealth for the country. After 2011, when the PAP lost Aljunied, he managed a quantifiable rebound in life satisfaction and happiness for all Singaporeans based on Gallup polls. As he settles into becoming Senior Minister, I can imagine journalists jockeying for positions to publish his memoirs or approach to leadership, which academics will study for decades to come.

But what if I told you that a book already exists about how SM Lee thinks?

Apparently, SM Lee was trained by a famous academic named Richard Zeckhauser from the Harvard Kennedy School. This nifty book by Dan Levy summarises Zeckhauser's thinking approach into a number of simple maxims that are practical and useful for lay readers. I think internalising these maxims would make it easier to discern SM Lee's leadership style once the book arrives in a few years. 

Here are a few points I have attempted to internalise to my work. 

a) When faced with a complicated problem, consider the extreme or simple cases.

Before attempting to figure out how to motivate people to pursue FIRE, we can look at the extreme case of how a successful situation can look like. Twenty years ago, my approach was to live on dividend income and then farm my entire take-home pay to super-size the portfolio to become a millionaire. I did not know what retirement looked like, but I definitely understood the prestige and status accorded to millionaires. 

These days, when I am crafting a solution for students, I need to come up with a more universal or simpler approach to FIRE. So, my idea is to try to generate $100 of passive income on average a month. $24,000 into a dividend portfolio yielding 5% can get the job done, and saving $2,000 monthly for a year will let someone try the idea on for size. 

Both approaches help explain financial independence, and folks can only discuss more complicated topics like safe rate of withdrawal or Monte Carlo simulations from other sources when they think that this can be sustained longer for themselves.

b) Think in terms of quantifiable probabilities.

This idea is to learn how to think about probabilities and revise them as we get news from the markets. 

Right from the start of 2024, I was betting that bringing down inflation in the US would be problematic, so my affairs are structured to consider cuts starting in 2025. The wonks are betting a 50-50 chance that a revision will start in November. 

Until September, this 50-50 will be revised when inflation results are reported. It is a superior way to invest, as if the probability drops, I can delay pivoting from, for example, DBS to FCT for my portfolio. 
c) Thinking at the margins

The biggest weakness of lifestyle design around FIRE is the idea that one can resign abruptly after reaching financial independence. We are still determining what happiness levels we will feel when we trade all our working hours wholesale for leisure time. 

So, this idea of thinking at the margin is the solution to the problem of Early Retirement. Your question should instead be: If you reduce an hour of working time to add one hour of leisure, will this result in greater life satisfaction? And then you keep making this trade-off until adding an hour of leisure no longer adds satisfaction to your life. 

There isn't a lot of corporate flexibility to allow you to progressively reduce your hours at work in practice, so a person can quit his day job after financial independence, get a short holiday, and then gradually increase his freelancing time to see whether it can increase his happiness. 

My issue has always been doing bullshit jobs in a toxic work environment. In a better environment where I can feel that I am contributing, increasing my exposure to work may make me happier. 

Anyway, this is a pretty nice book that teaches policymakers how to think, but I think that anyone can benefit from reading it. If it can sharpen the mind of one of the top mathematicians in the world and assist him in running our country, maybe more people in society should be taught this.