Virality of BBFAs and flawed masculinity

 

As I am moving into the marketing territory of my personal development, my readings have also shifted. I thought I spend some time understanding memes and digital culture, so I picked up a book on Memes by MIT press.

Social scientists are still trying to understand what makes content memetic and what does not. Having a deep academic understanding of this can be useful in running a business and I am surprised at the amount of vitriol when SPH was hunting for a Meme-In-Chief. Turns out there is a body of academic knowledge on viral or memetic quality. 

One of the things that make content memetic is the material on flawed masculinity. When analyzing the 30 of the most memetic videos, 24 were helmed by men. Most of these feature men who are overweight like "Star Wars Kid" or doing silly things like Leeroy Jenkins. 

I think the most iconic representation of flawed masculinity is Psy's Gangnam style which I suspect still holds the record as a most viral music video of all time. Its primary appeal is that it shows a chubby uncle doing a ridiculous horse dance. 

On EDMW, one of the most endearing concepts which I do channel on this blog is the Bui Bui Forever Alone. The Internet actually has a drawing of the Forever Alone guy and this guy is now quite symbolic.

This is something I think  I can possibly channel in my business. There has always been some demand to produce a "BBFA's Guide to Financial Independence". 

Once I get an intern, I will definitely find a way to create such a product. 

Alternatively, a reader can write to me to offer to help with such a product. I can't really give you profits but I can share the credit with you. I'm studying co-creation in digital marketing right now and extremely open-minded to novel ideas to drive more business sales.  

If I get enough volunteers, I will launch this project prior to incorporation !

  

The Value of Frustration

Thought I share a little bit about my attempts at adult learning.

Online learning has started to dominate a large component of my life. 

I have just completed an entire specialization program on Django programming on Coursera and still do not have much confidence in creating web apps. Right now I can take someone else's web app template and shape it to meet my business needs but I am still pretty far from being able to create a web site from the ground up, which means that whatever I can do would not be very innovative. I can create a blog and slant it to the needs of my community, but a non-techie can create something that looks better on Word-press.

So even with a Coursera certification from the University of Michigan, my Django skills are not up to par yet. I am doing a few Light-weight Django projects every day and will probably explore Python Flask next. Later today, I hope to complete a static site generator.

But I can't dwell on web programming too much even though I did a little bit of coding every-day.

My next specialization from Coursera will be on Digital Marketing. It is time I start taking marketing really seriously if I hope to bootstrap my business. Marketing cannot be abdicated by the CEO of a company. So I started on a program from the University of Illinois that covers an entire field on digital marketing and subject myself to another new round of frustration. 

Marketing as a discipline has a lot of fluff and it took me a while to go beyond the 4 Cs to really understand how marketing is really getting disrupted. Now my advancement in the marketing course is so fast, Coursera does not even allow me to open quizzes and assignments for the following topic next week. To keep my breakneck pace, I will launch multiple courses at the same time and do them concurrently within this specialization. 

( Interestingly you are allowed to speed through video lectures, you just can't do the quizzes. )

Why rush through a marketing class? For each month, if I don't complete this program, I have to pay $79 USD.

Stretching beyond software to marketing leads to a lot of interesting and alien ideas that are useful for running a business. I learnt that to spur co-creation, men prefer to participate in competitions against each other and women prefer to participate if it can be shown to benefit everyone. I also learnt that folks who go to stores to browse for physical goods to buy from web-stores are actually a lower population compared to folks who browse websites for information of goods to buy from physical stores. 

My work for October will be more intense. Not only will I be pitching my business to VCs in SMU, but SkillsFutures credit of $500 need to be spent on something unless I want it to go to waste, so I may even have to start on an AI or a Voice course later.

In summary, the best way to learn something is through frustration. 

I try to attack every programming problem on my own and do my own debugging. After dealing with source code that does not work for my newer version of the software, often a problem with borrowing books from the library that are quite dated, I will learn a bit or two about debugging software.

If you are the kind of mid-career guy retraining to pick up a new vocation, you have to stop expecting that the trainer or author has all the answers. Part of qualifying for a career path in software is dealing with bugs even from the official course text. It is impossible to keep your code working for the latest version of programming language or framework. 

Otherwise, go learn Design Thinking lor. 

See whether you can get a real job doing that.

 

 

 

 

 

Advantages of having no sunk costs

 

The Psychology of Money had a really good story on Daniel Kahneman. Kahneman was an amazing author, he could submit one draft chapter for review and then submit a completely different rewrite that is basically a totally different work with different references and footnotes.

This requires a high level of productivity but it also requires that an author discard previous work with little or no regret. When Kahneman was asked how does he do this, he replied that he does not believe in sunk costs.

I felt this lesson resonated a lot with me because the opportunity cost of going through law school is about $70,000 in fees and at least $480,000 in lost income. Being in an unlucky batch that struggled to get training contracts made things much worse. If I insisted on doing legal work, it would mean half the pay I was earning prior to law school for 50% more effort.

So when presented with an opportunity that pays significantly more with perhaps a third of the time investment, it was logically a no-brainer. So far, I am pretty on point in replaying my opportunity cost.

But that creates a problem in Asian society. 

For reasons unknown, people are welded to ideas that folks should do what they learn in school. In every funeral wake or wedding I attended, people ask me why I am not a lawyer. I think becoming an investment trainer make things worse. Some trainer who taught derivatives and options in the 1990s got into some legal trouble and tarred the profession. 

( Ironically, I am very familiar with the case law behind that. I'm also not getting a Phd to impress my students anytime soon.)

I count myself lucky as I only spend a fraction of my dividends and wear it like a suit of magical armor. 

What relatives think about my career choices is their fucking problem. The growth of my wallet matters more than playing dress-up and looking good at the outside while actually getting a dressing down in the courts.

But not everybody can buy self-esteemed with dividend pay-outs. ( I suspect without my investments, I'd probably be as insecure and neurotic as many legal professionals in Singapore. Hence the Italian cars, broken families, and high blood pressure. )

So reframing life decisions as a decision about sunk costs is a useful psychological tool.

You cannot recover sunk costs. Your decision tree should only evaluate future options and future attractiveness of available choices.

Say, you are an engineer and you get a job approving mortgages in a bank. The time and effort you put into engineering school do not matter if your mortgage role is the best career decision moving forward. In the CECA outsourcing era in the 2000s, wasting an engineering degree was the right career move for that generation of unfortunate technology professionals. We needed the MRT breakdowns to demonstrate the policy failure of shafting the Engineering profession.

Still, I can imagine worse applications of this principle. 

If you have been dating for a decade and see the relationship unfolding as a boring and loveless one, accept that the sunk cost is high and move on towards a better relationship, don't make a divorce lawyer any wealthier by getting married. 

The only problem with the concept of sunk costs is that it can't really be explained to laymen very well. 

I still need a good justification to explain my career choices, I will just say that if the legal sector picks up, I may rejoin at a later stage if it becomes ever profitable again.  

 

To have a chance of competing against Raffles Institution, wear your Armor of Dividends

I had a lot of fun yesterday making a brief one-hour presentation to about a class of Raffles Institution students. These students are in a special program that allows them to pick an area they are curious about and attend talks in between academic semesters, so the students I was exposed to had already determined that they are interested in Finance. 

In short, RI exceeded my expectations of just how smart they were. They were silent after the presentation, but then the questions starting coming out after a moment of hesitation. All the classic moves of a thoughtful and conscientious crowd. At least one question gave me the impression that the student might actually know a bit about Mean-Variance optimization. 

What was equally interesting was not so much my talk but the reaction from social media on the talk I was about to give. 

The reaction was not saltiness but a sense of dread and profound negativity that I am reinforcing the folks who are likely to become big winners in Singapore society. I did not come from an elite secondary school so I had a candid conversation with teachers I worked with about the reaction, and they commented that society tends to spare a thought for the underdog and I just seemed like I was doing the opposite of that.

For better or for worse, I'd like to provide a deeper context of what I tried to do and what I found out.

a) Not all RI boys come from wealthy families 

The teacher who invited me told me that he has students on financial support and RI boy cannot be simply clumped with the upper crust of society. I did not even take his word for it, so I conducted an experiment of my own.

The above diagram shows the distribution of pocket money within the class which was freely shared by my participants. A majority had $40-$8 a week, but similar to our society, there are RI boys who have a stipend 15x times that of some of their classmates who have to live with $10 a week. 

While certainly not reflective of the wealth of their parents, I would like to think that we should never lump all elite school students into the same category.

b) It was RI that asked me. I did not ask RI.

The teachers were actually folks who attended one of my ERM previews and thought my story was good enough for their esteemed institution. 

That being said, I am a businessman and would not let the opportunity slip by. My materials can be slowly shaped as I get more speaking opportunities to other secondary schools regardless of their elite status. It took me years of free speaking engagements under BIGSCRIBE before I was able to parley it into a career as an investment trainer. I gave more than 8 free talks before I started my career!

So I will accept any invitations from any secondary school. I already have a first draft of materials to present but I suspect I need to water it down a bit for government schools. I did promise RI that I won't hold back on the maths when I presented to them. 

c) RI is very decentralised. I suspect most government schools are not.

In this engagement, I was concerned that using League of Legends, a popular MMORPG to make my points on financial management may not fly well with school authorities so I volunteered to let RI teaching staff scrub my slides. This was my experience in Government - I hated scrubbing slides submitted by vendors. 

To my shock, my slides were approved without amendment. 

So if you represent a government school, you have to recognise that RI is possibly more progressive than your organization. Will you let a financial trainer teach your kids about money using concepts from an MMORPG?

I would imagine my own school Swiss Cottage having problems of me speaking to my juniors. The kind of bitching I would have about my time in St John Ambulance Brigade may make them baulk. 

So I suspect some teachers will propose this to their HODs but there will be massive delays. I am gunning to speak to a Polytechnic next, I suspect that may happen sooner. 

Finally, I initially had the impression that staff of RI might have Oxbridge qualifications and talk like Professor McGonigal of Hogwarts. 

Turns out they are down to earth uncles and aunties like me. 

They don't think their kids will have an easy time with millions of folks with their intelligence coming out and competing with them from China and India. 

The final question I have the reader is that you or your kids will be competing in a country with brilliant kids of not just RI but ACS and HCI as well. If their 16-year-olds are being based on their academic interests beyond the A level exams, how can you compete?

I have no answer for that. But I hope as a society, we don't hold back our best talent. 

I was bitterly commiserating with RI teachers that in Swiss Cottage 30 years ago, we spent weekends doing foot-drill when RGS is already conducting courses on lateral thinking. In fact, my secondary school refused to offer a triple science class to my cohort because the administration believed that we would not make it as doctors. On top of that, they even got Poly lecturers to give us some speech about why we won't make it to University and Poly would be a more practical choice. 

So if my kids have to compete against Singapore's best. I will take a page from Batman and use my prep time to maximum effectiveness.

I will suit them up with an Armor of Dividends. It'll defend against RI, ACS or HCI. In fact, IIT and IIM can give me a shot. 

An Armor of Dividends may even sustain you without a job in the future economy. 

I will be repeating my presentation tomorrow to my ERM alumni, you can sign up here:

 https://us02web.zoom.us/webinar/register/4915990503812/WN_TJPfYUPXSmKpg4m6L4izbw 

Personal experiments on Django

This is going to be a busy week with my RI talk tomorrow in the afternoon and subsequently my community event on Thursday. As a month without formal ERM classes, the month should be relaxed one, but everyday is kinda intense because I told myself to complete one week's worth of Coursera tutorials in one day. 

I'm in the middle of writing a full-scale web app using the Django framework and it's been really hard. For the basic functionality, I've been spending hours troubleshooting issues that, on hindsight, mostly involve not importing the right modules and not being thorough at replacing one string with another. 

I suspect we are about 1 month away from an actual product that I will launch for members of my community which is a simple qualitative-drive crowdsourced website for local stocks. I think it is possible to build a closed-community to update the latest news so that, on a glance, a user can assess the purely qualitative sentiment of a stock. Until then, I gotta get up to speed with multiple programming languages like Javascript and JQuery. 

The problem is that a developer needs more time to become good at framework. Once too much is adopted, there is a risk of the industry moving on. There are too much internal complexities hidden to a developer and this can slow the pace of adoption even if intense googling takes place.

To remedy this, even my CCAs are Django related. I was able to figure out how to run a simple Hello World program on Django without installing the complicated frameworks that make Django programming so difficult even for someone with strong Python fundamentals. 

The following program can be executed with one line of code "python hello.py runserver". A lot of code is crammed into one file but that's how I build up my Django fundamentals to take a shot at building my own start-up later this year:

import os

import sys

from django.conf import settings

DEBUG = os.environ.get('DEBUG','on') == 'on'

SECRET_KEY=os.environ.get('SECRET_KEY',{{ secret_key }})

ALLOWED_HOSTS=os.environ.get('ALLOWED_HOSTS','localhost').split(',')

settings.configure(

  DEBUG=DEBUG,

  SECRET_KEY=SECRET_KEY,

  ALLOWED_HOSTS=ALLOWED_HOSTS,

  ROOT_URLCONF=__name__,

  MIDDLEWARE_CLASSES=(

    'django.middleware.common.CommonMiddleware',

    'django.middleware.csrf.CsrfViewMiddleware',

    'django.middleware.clickjacking.XFrameOptionsMiddleware',

  ),

)

from django.conf.urls import url

from django.core.wsgi import get_wsgi_application

from django.http import HttpResponse

def index(request):

    return HttpResponse('Hello World')

urlpatterns=(

  url(r'^$', index),

)

applications = get_wsgi_application()

if __name__ == "__main__":

  from django.core.management import execute_from_command_line

  execute_from_command_line(sys.argv)  

 

Save money need reason meh ?

 

Ran into a mental block when preparing for the talk that I will give to Sec 4 students of RI next because I can't seem to find a persuasive reason to convince teenagers to save money. My mind went blank because I did not save money as a teenager. All my disposable income in the 1980s and 1990s went first to Leisure Craft and subsequently to Outer Limits on D&D products.

The release of Morgan Housel's The Psychology of Money was enough to break my mental deadlock. 

In what is possibly one of the most engaging books about Money published over the last few years, Morgan suggests the following idea, which I think is brilliant:

You don't need a reason to save money.

As adults, we are stuck with the notion that the primary reason to save money is to spend it for some reason in the future: dealing with an emergency, paying for an education, or even wedding expenses. Something I just cannot relate to when I was 16 years old. 

But you don't need a reason at all to set money aside because having money gives you flexibility - the most powerful thing having money can give to you. Until you actually spend the money, you won't know what it can do for you. 

• $50 can get you a couple of months of game subscriptions.
• $600 can get you a PS5 when it launches later this year.
• $2500 can get you a trip to Japan after the pandemic is over.

As the money in your wallet expands, the possibilities increase - that's even if you never actually spend it. 

Right now I'm only over the halfway mark.

This book is very well written and already one of the best non-investment-technique based money books ever published. 

Sadly, Psychology of Money sounds so bland, Morgan should have learnt a trick or two from Tim Ferriss on coming up with a snazzier title by using the Google Adwords system. 

More articles on this book over the next few days.

 

The Richest Man in Babylon - An ERM Community Webinar : 24th September 2020 7.30pm

One of my next projects is to give a pro-bono talk to RI students next Tuesday on Financial Independence. The teacher who contacted me wanted me to put in some maths lessons into the program and share a little bit about my life story. The lecture is a summary of The Richest Man in Babylon that was reskinned aggressively for folks who play the League of Legends RPG. 

I know that a project like this would excite some fans and readers, so I will be creating possibly an NSFW version of the talk for the public as my community would be conducting a free webinar next Thursday.  

We also have a guest presenter Ivan Fok who will be doing a demo of his latest tool Pyinvesting.com which is adopted heavily in my ERM program. 

You can sign up on this link: https://us02web.zoom.us/webinar/register/4915990503812/WN_TJPfYUPXSmKpg4m6L4izbw 

As I conduct business, I will be doing a little promotion to my students for a refresher class I intend to hold for them in November. That would be followed by a short pitch for a potential customer to a course preview the following week. We know folks hate sales and promotional materials so we will keep this to a 5-minute minimum. 

My aim is to eventually build this into a full-day program as part of a business I intend to start. If you are an educator and want me to speak to your secondary school students, you can contact me through this blog. 

Programme

a) Introduction (Chris Ng) 10min

        a. Back-testing: Why the community needs a tool to do this.

        b. Evolution of back-testing from the past to the present.

b) Pyinvesting.com Demo (Ivan Fok) 15min

        a. Introduction to key features of the tool.

c) Refresher Course information for ERM Alumni (Chris Ng) 10min

        a. Short discussion on refresher programs for Alumni who want the latest ERM syllabus

        b. Details on full-day ERM refresher course on 21 Nov 2020

d) Main Event: The Richest Man in Babylon (Chris Ng) 60min

        a. This one-hour talk will be an enhanced speech made to RI students on 22nd September 2020. 

        b. Covers the main points in the Richest Man in Babylon localised to Singapore markets.

When geeks over-optimise

Hacking Life by Joseph Readle is a really good read and should be one of those non-finance books FIRE folks should get their hands on. I liked it so much after borrowing from the library, I bought a Kindle version for reference. The book is really a no-holds-barred work that spills the beans on modern-day gurus. 

One underlying theme in the book is the notion of over-optimising something at the expense of the big picture, I will share two particular examples that I enjoyed reading very much.

The first example is Seth Roberts who experimented on himself with butter. He figured out that 60g of butter improved the speed by which he solved simple maths problems from 650 ms to 620 ms. This enabled him to publish a book called The Shangri-La Diet. Well-meaning cardiologists have been telling him that he's killing himself with the kind of diet he is putting himself up with. As it turns out, traditional medicine turned out right - Seth Roberts died at age 60 from coronary heart disease and an enlarged heart. 

The second example is our favourite guru Tim Ferriss. He outsourced arranging and coordinating of dates to competing teams all around the world, even designed a nifty way to pay out bonuses to his army of virtual assistants. Some of his mistakes were hilarious - he had so many dates a day, he forgot that one date was an orphan and asked about her parents on their second date. Of course, he is still single today. 

I think it is a disappointing omission that the author did not have a section on money. This is something I am guilty of before. 

One of my dumbest ideas over a decade ago was my aim to be paid a dividend every month. Those days, the only stock that paid on January, April, July and October was the problematic shipping counter First Shipping Lease Trust, I lost a lot of money on that folly. These days, I am happy to be paid 8 out of 12 months of the year.

We have some instances of over-optimising in the in financial blogosphere :

• Obsession with credit card miles and cashback money. Maybe matter not to spend the money in the first place.
• So much drama when a bank revises the terms for their multiplier accounts and nerfs your deposit account. If you buy the bank stock, you are effectively taking the other side of the bet with a % dividend.
• Quibbling over ETF expenses when they are already really low. I think once you buy a UCITs counter like IWDA, further differences of less than 0.% should not matter too much.
• So much ink spent on the 4% safe rate of withdrawal. Plenty of time to lose sleep over this after you can live within your dividends.
• You may not agree with me on this: That incessant whining and bitching over accrued CPF interest for folks who buy their homes using CPF. 

The rise of technocratic software developer types is possibly the root cause of over-optimisation. Computer Science and Engineering teach us to master a system and then use the rules of the system to milk it for a powerful advantage. As the role of software developers begin to ascend, a new kind of data-driven technocratic guru will take over the non-fiction literary space. Many of these fixes can solve an immediate problem that you have, but can quickly lose the big picture. Case in point, negging a chick can get you laid but does nothing to build a long term relationship. 

This is also a reminder that I should not go too far when building quantitative models which is really starting to distinguish my programme from competitors. 

My students sign up because they want a shot at early retirement and the kind of lifestyle improvements it entails. That's really the big picture of why people pay for investment courses.

 

Of Geeks and Gurus

 

I'm in the middle reading this awesome piece on Lifehackers by Joseph Reagle and it has given me quite a lot to think about the relationship between the FIRE movement, Life hackers, and the self-help movement.

In the book Hacking Life, Joseph Readle divides life hackers into two categories, the first being Geeks and the second, being Gurus. Geeks are otakus who are obsessed with studying a system and then finding ways to game it for the purposes of personal efficiency. Gurus leverage on personal branding and self-promotion to earn a decent living dispensing life advice to others. My view is that the two categories are not mutually exclusive and Investment Trainers often need to be both to survive in the competitive landscape of investment training.

My analysis will focus on the FIRE movement which is, in essence, Lifehackers focused on the domain of Personal Finance. This is one of the hardest domains to master as financial markets are often more random walk than a predictable system that can be gamed easily. Instead in the financial blogosphere, you may find tiny subcultures of geeks who specialise in credit card point manipulation. 

Understanding that Geek/Gurus is not mutually exclusive allows us to analyse this divide in a 2x2 matrix, which I will do as follows:

a) Not a Geek / Not a Guru

If you are neither a geek nor a guru, you are likely a victim of the capitalist system. Money Maverick on his own FB wants the FIRE movement to forgive "dispassionate" consumers who just want to get on with their lives and lack an interest in hacking the financial system. Actually, we forgive them, but this puts them under the mercy of the financial institutions that can extract close to 50% of their insurance premiums paid on the first year and a fraction of that thereafter. 

Financial advisors thrive in Singapore because most citizens aren't geeks or gurus. 

b) A Geek but not a Guru

If you scour the financial FB groups, engage in battles against financial trolls and know how to buy IWDA on Interactive brokers to save on investing fees, you might well be a financial geek. 

Financial geeks are an important piece in the FIRE community because they keep the finance industry honest. Members of the public, thanks to the Internet, can fund a lot of honest criticism of the financial industry and we no longer rely on journalists to call our unethical practices. 

Most financial bloggers fall into this category.

c) You're a Geek and a Guru

I'd like to say that an investment trainer needs to be both to survive. You need to understand the financial markets as a system to extract some above-average gains, position your findings clearly, but also do enough self-promotion to survive this world where style is paid higher premiums than substance. 

I have a long way to go, but the author that maximises both guru and geek perfectly is Tim Ferriss of The 4-hour Work Week. His generalised approach of deconstructing an activity into key steps, selecting crucial steps, sequencing them in optimal order and creating stakes to increase motivation is a very powerful tool for any personal situation. His self-promotion comes from using this framework to win a martial arts competition.

d) You're a Guru but not a Geek 

 I got three words for folks into this category : 

YOU DON'T CHIBAI !

When I was starting out in investing in the 2000s, beyond the CFA and University programs, short courses in investing can be fatal as the industry was dominated by the technical and options trading gurus who have a methodology that needs a degree of faith from the audience with a confirmation of this faith is often a price-tag over $5k. 

You can tell a guru is not a geek if you see the following:

• Dubious academic or industrial qualifications.
• Options training without a rigorous treatment in options 'greeks'
• Warren Buffett is the sole evidence for the success of the methodology. 
• Statements that cannot be falsified by market performance or statements that appeal to feelings
• Too many references to a set of popular purple books in Personal finance

Finally, how does one begin a journey as a geek in life-hacking? 

This can also be deconstructed and optimised into simple steps:

• Productivity - You read Getting Things Done by David Allen and actually enjoy applying the system to clear your emails. ( I struggled and ultimately failed to use it )
• Personal Finance - You get an Interactive Broker accounts, build a portfolio with UCITs ETFs, calculate your expenses and then use it to troll your insurance agent to provide the expenses data on ILPs. 

The Multi-Hyphen career

Today I will be spending more time to talk about the Multi-Hyphen Method by Emma Gannon.

The concept of a Multi-Hyphen career is not all that complex. In this economy, it is probably counterproductive to have a monolithic career. 

Twenty years this was the norm and I started out as a Systems Analyst at Procter and Gamble. That lasted about 4 years until an outsourcing exercise sent me packing to the arms of Hewlett Packard. I spent about 14 years having my identity tied to that of an IT professional. 

An engineer today will have a hard time hardwiring his career to his company or his primary vocation. The half-life of his knowledge is getting much shorter and he can become obsolete while remaining gainfully employed at his company. Looking at retrenched engineers driving Grab, I suspect most Gen Z workers will not be so eager to marry into their primary day jobs or companies. 

So enter the multi-hyphenated career. We can have multiple careers at the same time. 

Even my job is hyphenated today. 

Perhaps one day I can call myself the following :

Engineer-Lawyer-Investor-Blogger-Author-Investment Trainer-Startup Founder

Basically, that's about it for the entire book. 

I did not really enjoy this book. I felt that the rest of the book was written in a chaotic manner. 

The author jumps from topic to topic, inviting readers to detox themselves from social media on some chapters and then talking feminism in others.

There are only three useful lessons I can extract from the book :

a) Manage your career and lifestyle from a position of strength.

Most hyphenated jobs are bullshit lah. This is often back-up plan for folks who do not have the skills for a company to want to hire you full time. If you look in Singapore, most of these Millenial careers have too much "Social Media", "Marketing" and "Consulting" in them. 

Truth is, if you have "Software Developer" in your job scope, have a product to show off, there is no need for a hyphen to show that you mean business. 

That being said, skills atrophy very quickly, and those with full-time jobs need to start building their side hustles or get their first hyphen quickly. By the time that Computer Science degree hits half-life, you should have a domain-knowledge or a side business very quickly.

The best time to hyphenate your career is while the going is good. Showcasing your coding skills on Youtube and putting up code on Github may be a better way to build a better iron rice bowl.

Otherwise, you'll become one of those house-husband-internet-business type of dudes career women can identify and judge very quickly.  

b) No one knows what online skills will matter so pick them all up

When you have a legitimate IT role in a company, SEO seldom comes under your radar. When you become jobless, suddenly you become proficient in copy-writing, SEO, and mass-mailing.

Neither the author nor myself would know what new-fangled web IT skill-sets can pay the bills. 

But at least I will tell you to try everything out, keep an open mind, and emphasize the hardest skill-set first.

I am sure marketing campaigns can be complex, but I don't have the bandwidth to actually know. I do know those engineer founders have a bad record with hiring marketers because it is so difficult to measure their performance. A failed campaign can be easily blamed on the product. 

Creating a Django website with Data Science components and then building a mobile app to drive the features is really hard. The website alone requires knowledge in Javascript, JSON, Python, Django templates, etc...

Any see-gee-nah with a loud-mouth can claim to be a good marketer. In my opinion from observing others, the best founders keep firing them until they get someone that can deliver the goods. Engineering bosses have trouble identifying the good ones from the bad ones. 

Learn the basic functionality of everything you can get your hands on Canva, Camtasia,  Zoom, Gimp, Git, some email blaster, a suite of open-sourced Office tools. It's not the tool that matters, it's dealing with ambiguity and the settling in to use any tool quickly that matters more. 

MNCs don't teach this skillset well.

c) Money management should take centre-stage as multi-hyphenation is a problem and not a solution

I'm multi-hyphenated enough to say that given a choice, most people do not want such complicated work titles. My fans like the fact that I can drink Butter Kopi on a weekday afternoon, but they are not there when relatives ask for the umpteenth time whether my law degree was wasted when I became an investment trainer.

The lament of Generation X men has always been why their dads can sustain and raise a family on one job but they can't. Worse, their children may have to take on multiple roles to sustain a singleton lifestyle.   

The fundamental truth of all vocations is this :

• Having multiple gigs can be poisonous because of the lack of CPF-OA and SA contributions that can ruin your retirement plans. 
• MNCs are poisonous because your roles are often narrow and you can become functionally obsolete while on the job. 
• SMEs are poisonous because Singapore is full of horrible bosses who send you fake termination letters and slime you on their websites. 
• Entrepreneurship is poisonous because of possible bankruptcy and stigma from failure.

The only solution is to see everything as a tool to attain financial stability, a job is a means to remove all debts and get a small income flowing initially to cope with emergencies and finally to wean away from a dead-end vocation in your 40s. 

The biggest disappointment of this book is that something that tackles a multi-hyphenated career should have cashflow and money as its primary chapter. 

The author admits that she's not particularly good at money so she made it the last chapter. 

Personal Update

 

Ok, it is time for another personal update.

a) Training Business 

I'm reducing my class frequency and thought I would get a break this month, but, instead, I have a pro-bono talk coming up in a top secondary school and a community webinar planned on 24th September to talk about the latest toolset for my program. I'm taking the pro bono talk quite seriously, as who knows what kind of opportunities it can turn up in the future. The talk would be enhanced and then delivered to my own community a few days later.

b) Start-up Incorporation update

Readers are kind enough to forward this document for me to read. It reminds us that entrepreneurs should not go too far to incorporate a company solely for the purposes of tax avoidance. 

The circular from IRAS serves as a warning to doctors who incorporate to reduce their tax burdens but I think it applies to all businesses. In my opinion, I think some doctors in incorporating multiple entities for tax purposes have gone too far and lends credence to the idea that the rich will find ways to pay lower taxes. 

c) Halfway through Django Tutorials

I've completed two out of four Django modules on Coursera which is basically about using Python to build web applications. The Django framework has it's own language syntax and I doubt that I can consider myself a practitioner unless I can create a website of my own and host it in the cloud. Interestingly, this is a completely different skill-set from Data Science using Python so it's actually quite possible that data scientists and AI experts may not be all that good at this.

d) Books I am reading 

There is a limit to how focused I can be when I am learning how to code. I drifted in and out of Warhammer 40,000 fiction, but now I am reading The Multi-Hyphen Method by Emma Gannon. I thought that if I am going to hire people before year-end I need to understand what modern career aspirations are. There's no need to impose my work ethic on younger people when they live in a wholly different context where they need more than one job to survive. 

Just for fun, I have also borrowed Marie Kondo's Joy At Work.

 e) Health

Combining intermittent fasting and light exercise has paid its first dividend as I pushed my blood sugar HbA1C to 7.1. It's no big deal for most people but I was as high as 11 before my regime. Unfortunately, my triglyceride numbers peaked to 4. 

My doctor suspects that it's the four to five cups of coffee I drink every day. So right now, I am cold turkeying on just one cup of coffee a day and feel lethargic the entire afternoon. I also need to start on some cod liver oil. 

If I fail to control my triglyceride, my pancreas will commit suicide one day and I will develop Type I diabetes. But that being said, I'm in a better state given that I only have one really bad reading right now.

f) Leisure

I can't keep so many balls in the air, so I have to stop anime watching and will switch over to watching The Boys when Season 2 hits Amazon Prime. I managed to watch Tenet and really enjoyed it. I am wondering whether The New Mutants is worth watching.

Still, I managed to squeeze a D&D game last weekend.

Free-Riding the Singapore Welfare System

 

The term "free-rider" is currently having its day on the Internet. As I've made a decision to many years ago to align more fully with our Capitalist system rather than the Political system, I think my actual aim is to find as many legitimate means to free-ride in Singapore, always put in slightly less to extract maximum benefits from the system.  

The truth is that the kind of moves I make are quite noob-level. An ordinary employee can use the following means to free-ride in Singapore today :

• Open an SRS account, put in the maximum $15,300 every to get tax deductibles.
• Inject $7,000 into you and your spouse's CPF-SA.
• Take more public transport as it is running at a loss and funded by tax-payer money.
• If you serve NS, use credits to buy New Balance running shoes. I even got a pair for my dad.

If you level up as an investor, you bring free-riding to a whole new level. Singapore is a welfare-state for the rentier. You can commit the following "tax atrocities" with no legal consequences :

• Invest in securities as dividends do not flow into personal taxation numbers and are not accounted for qualifying for HDB ownership.
• Buy REITs as REIT incomes do not even incur taxation at the corporate level when the REIT distributes 90% from rental proceeds.

I suspect incorporation will allow a person to level-up as a free-rider even further. I'm looking at the following schemes and studying them carefully and will consult a company secretary to make it high-priority for my business, do correct me if I am wrong : 

• $200,000 of revenue does not attract taxes for the first three years.
• Beyond the first $200,000, legitimate deductions for company expenses can be made. This is a 17% discount on cloud-hosting fees and software purchases which I already pay as an investment trainer. I can also buy an explicit PC or tablet to be used exclusively for work to free up my home PC resources.
• I can pay myself a minimum salary to lower the tax burden more.  
• If I hire a local worker, I can even get $30,000 under the Jobs Growth Incentive.
• This is not counting the startup funding I can get for my business. I already have a small web app launched for my ERM community. 

In short, I think folks with legitimate business are the biggest free-riders of all. The government will incentivise Singaporeans to invent new jobs. 

For folks who can code in middle-age, incorporation is probably the best move a person can make given all this age discrimination we are facing. Given that I already have some revenue, I will probably incorporate, hire an assistant before even deciding what new business I will get into beyond investment training. 

What a great time to be alive in Singapore!

 

Who can I afford to hire if I incorporate?

 My classes have become more fun thanks to two reasons. 

This first is that it is longer - We have 4 days of webinars where students get to digest my material at a more reasonable pace. This frees up the one day face to face session for pure practical exercises and student engagement. 

The second is that my course is going through a mini-recession - my classes are smaller, so I get to have better conversations with my students. 

Consequently, I can be more candid during my lessons and I get to share some of the challenges I see in the future. For this class, I have at least one HR professional, so the topic of incorporating a start-up and who to hire was discussed. Also, thanks to Delane Lim's online tirade against younger workers, readers may be interested to know how to think about hiring.

Initially, my thoughts were to hire a designer or UX expert to complement my lack of design aesthetic, or even do up the CSS that I really hate doing for my website. According to the HR professional, that's actually not a very good idea because the market for UX and design folks is quite hot and I'd end up paying top dollar for perhaps mediocre design skills. No employer's market there. 

So I ask her a point-blank question - who do employers skip in this job market? This is a reasonable question because right now, I can design a job for my employee provided that this person exercises initiative and would be willing to learn.

She said that odds improve greatly if I am willing to take on students who do Fine Arts.  So basically the "non-essential" types. I don't understand why bosses discriminate in the industry because I'm pretty sure a painter or artist can be taught to use Canva and a Theatre performer can be given a sales role. 

I think an intern from a Fine Arts institution would be a good fit for a business I am about to create. I won't outsource finance and I practically can do everything else, I just hate doing all the stuff to beautify my slides. Also, a big perk is that my intern gets to attend my course for free - makes a big difference if someone picks up the DIY investing skills when they are young. 

At the end of the day, the key debate is about the nature of employee hunger.

I've done some work in the public sector. The hungriest folks in Singapore are businessmen. There is nothing more pathetic than an SME boss who tails public servants to keep pandering for "collaborative opportunities". If you have a viable product, the most productive thing is to keep marketing it rather than to spend all that time in agencies.  It is not fair to ask employees to be hungry when the real hunger is for SGUNited income support and cheaper interns.

I think hunger is a low-class way to ask for someone who is conscientious. Someone who can delay gratification, show up on time, and deliver what was promised. The FIRE community folks are punctilious in the way they handle their personal lives, but they would hardly qualify as hungry people. 

Dr Wealth staff is super-conscientious, I wonder how Alvin Chow does it. I know, because I got paid this week. 

So I probably won't penalise a Fine Arts candidate who shows up with a Starbucks for an interview, but I would probably prefer a candidate from Bukit Timah because it is more consistent with my target market - my students are upper-middle class.

The problem arises where bosses do have a reason to discriminate - that is if Fine Arts majors really lack conscientiousness. I find that unlikely because, from what I know,  dance requires a ridiculous amount of personal discipline to master. I pay a lot of money for my daughter's art classes and what she can do takes time and amazes me. 

For that reason, I will risk getting flamed for sharing the second part of my conversation. 

The HR professional told me that if I can't get any design intern, there are plenty of "part-time RMIT" types looking for opportunities in the market. 

...just kidding.... 

I this age of cancel culture, I will not risk getting flamed for sharing this second part of my conversation!

Better luck next time !

Letter to Batch 16 of the Early Retirement Masterclass

Dear Students of Batch 16,

It’s been a great honour and privilege to be able to conduct a 2-Day Early Retirement Workshop for you.

We see a gradual downsizing in ERM classes as the effects of the pandemic bite. Further, this has allowed us to expand our offering, and the course is inching ever closer to becoming a three-day program. Batch 16 is also the first time we are officially making Pyinvesting.com and the use of Interactive Brokers part of our training program that allows students the opportunity to do back-testing on Singapore markets on their own without the need for Bloomberg terminal.

Having four consecutive days of webinars also allows students to digest material at their own pace. The ERM can highly rigorous for the first two days, but breaking the material down into four digestible parts is seeing a marked improvement in Batch 16’s quiz performance relative to previous batches.

One area I am contemplating is the introduction of Dark Horse investment for every batch, but this has a mixed record. Our first Dark Horse counter was Accordia Golf Trust for Batch 14, and it gained 26%. Our second Dark Horse for Batch 15 was First Shipping Lease which inflicted a 15% loss when dividends failed to materialise this quarter.

Batch 16 did not have a Dark Horse stock, but I am glad that we were able to have an in-depth discussion on HPH Trust which is currently yielding over 11%. A student in the port industry was able to provide her two cents worth on this counter. Eventually, HPH Trust did not make it into the final portfolio.

Finally, I’m glad that some students were able to share their insights on hiring help for start-ups in Singapore. An HR practitioner told me that UX and Design specialists are quite hard to find in this job market and if I am willing to get interns a more pragmatic move would be to hire fine arts graduates and then train them for whatever tasks that lie ahead of them. In almost every batch I taught, I was both a trainer as well as a student.

Moving forward, I hope that Batch 16 would participate actively in the FB group. We should be able to see each other again soon as I am preparing for a webinar for all ERM graduates in September.

Christopher Ng Wai Chung

YEFI - Yes to Entrepreneurship and Financial Independence

I'm still in the middle of conducting Batch 16 of my ERM course so I thought I may write a short note on some developments on the professional front. 

I am fairly close to entering a new stage in my professional life. After graduating about 16 batches of students, being very conservative, I think that it is time to start scaling up to run a small business to assume the bulk of work conducting my financial training.

My program is evolving in a different way than many training programs you will find out there. 

Just this week, I launched an online tool on Heroku for my community just to see what happens when analytical tools are made freely available. Because I opted for free cloud hosting, the website was sometimes slow, but it showed me that one amateur Python developer can build something useful for a community without an expensive army of software developers. 

The experience of doing this has shown me that reporting taxes as an individual may not make sense any longer in 2021. Even at a small scale, hosting fees for a startup will reach $200 a month. Taking into account the potential of hiring interns ( I desperately need a good entry-level designer to help me with my slides and UX ), incorporating a Pte Ltd company is now a no brainer. 

Incorporating will take some time as I've also signed up to participate in an SMU incubator. Even though I have ready revenue coming in, the problem is I want ideas to push my business further, would a low-cost webinar for Millenials be a solution or something for all Singaporeans under Skills Future? A good start-up will pivot several times before finding an interesting business problem to solve. 

Personally, I am taking the development of my coding skills up a few notches. I am learning Django on Coursera. I think this is the time to move away from Data Science to build lasting web applications. After that, I hope to fool around with GPT-3 - I strongly believe that a Python amateur can train the AI to draft a few simple clauses in a business contract.  

It's amazing how far my journey has come and I probably did everything in the wrong order. 

I became financially independent early so that I can run a business whereas most Singaporeans become businessmen solely to become financially independent. 

Even so, going YEFI has several advantages:

• Successful businesses tended to be started up by rich kids with a trust fund. If you FIRE, you effectively have your own trust fund to back you up in case you failed.
• Most successful businesses are started by folks in their mid-40s. 

The final question I need to address is why even bother?

I've been reading this really disturbing experiment called the Calhoun Rodent Utopia experiment. Someone discovered that giving a rodent colony free access to unlimited food, water and space caused an eventual collapse because rats starting forming hierarchies and acted cruelly to each other. 

The experiment was very prescient because it predicted the rise of BBFA in Singapore society. A group of rats, frustrated with society, withdrawn themselves from the mating pool, and society became full of "beautiful males" who groomed themselves and refused to mate and "isolated females", who became feral and kept mostly to themselves. 

You see this amount of hierarchy building in financial communities. Someone builds useful tool that can potentially improve investment performance but ends up getting attacked for no reason by a few salty forummers. I was guessing that this is probably a remisier or FA who feel threatened by new investment platforms. 

One possible interpretation of the experiment is that even if all basic needs are being met, living things need to be challenged and find meaning in life. 

Imagine the FIRE community in Singapore as rodents who are living on food and water provided by dividends payouts. 

What happens when they come together?

• Hierarchies will form. Some FI blogger will be elevated to guru status, another is a stupid noob. No one questions the validity of the guru's ideas. The noob gets ragged. 
• Jockeying for position will take place. Sooner or later, someone on social media will brag about his investment on Tesla. 
•  People with unusual ideas will be attacked. Like those who love talking up leverage.

Once you understand the dissolution and impossibilities of utopias, you think of a way to get out.

I think the solution is always to transcend your boundaries. Level up, build new capabilities, and never allow the community or anyone to define you. 

When you YEFI, the problems you are interested in will change. Someone earning from Tesla will stop bothering you if you have to decide what kind of Tesla your company will eventually be. 

Five years ago, I took the plunge and made a whole lot of new friends, all decent lawyers today. 

I hope that in a few months, I can meet more young people who are betting the farm on their start-ups.

 

The Useless class, UBIBBFAMMORPG and anime dating

With retrenchments at an all-time high and trending even higher, NAS daily has put up a video on the useless. The idea is that with AI and technology being able to replace an entire swath of workers in society, a totally useless caste of citizens will arise and they would not be able to contribute to society in any way. At this stage,  NAS Daily begins to paint a positive picture on the useless class, arguing that they would be able to have the free time to engage in art and creative pursuits. 

I agree with the first part of NAS' analysis. For the past few days, I've been watching tutorial videos on GPT-3, OpenAI's latest algorithm and the products are extremely creepy. You can issue a text-based command in English and the AI can generate computer code to perform your objectives. With some work, it's not fetched that an AI can draft simple legal contracts when issued instructions in English and reduce billing hours aggressively, this will crimp the demand for legal associates.

The second part of NAS argument is iffy. We will not know whether these technologies will create a utopia or a dystopia. An unemployed population can happily create more memes on the Internet, or they can spew hate against minorities/women and commit crimes. The tax burden on the much smaller workforce will also be extremely high.

What I do know is that human males love to form rigid hierarchies whenever they come together in groups. In anime, a tradition is to have a "senpai/kohai" relationship drive a story. Masses of useless males with a lot of free time seems like a recipe for trouble as they start finding ways to one-up each other by generating chaos. 

One possible solution I can think of is for society and policymakers to "drug" human males with computer games, create a real opiate for the urban unemployed masses. I think many of my friends are highly attracted to the UBIBBFAMMORPG concept - swaths of economically defeated males retreating into the next generation MMORPG so that they can be the protagonist of a heroic story, all this while living on a minimum wage from society.  

UBIBBFAMMORPG has three components :

• Universal Basic Income - a super-small stipend given to the entire population to support a barebones existence. 
• Bui Bui Forever Alone - a celibate lifestyle that eschews family life with the bonus effect that does not overburden the taxpayer from supporting your family. Makes UBI possible.
• MMORPG - A heroic and entertaining existence in an alternate virtual world.

I think the concept of a male retreat from marriage and reproduction is now more real than before. When a male can't put food on the table, his ego gets threatened. He can fight by protesting against the government/society, or he can retreat. 

Nothing shows how difficult dating like can be than the hilarious blind date episode in Black Clover ep 27-28. 

In this episode, a "chee-hong" guy wants to meet women, struggles to get his BBFA friends along only to have them sabo his attempts to look good. Worse, the women keep to themselves and were unresponsive throughout most of the engagement. This is one of those ridiculous real anime episodes BBFAs consume on a regular basis. 

It may be tempting to project the macroeconomic impact of the COVID virus, there is still some uncertainty on how to tilt a portfolio.

But I think the idea that a large swath of under-employed males will stop participating in mainstream society, marriage and family formation is something I have a lot more confidence in. This is because I know folks who are beyond the possibility of employment and enjoying this kind of life. 

I also carry "associate membership" in the BBFA club, watching anime, painting miniature and taking afternoon naps and can see how fun this life can be.

If you agree with me and want to invest in this theme, look no further than gaming companies in the US and China. 

Personal Update

 Ok, it is time for another personal update. 

a) Business

There are quite a few exciting developments on the business front. Business is going to be slow over the next few months, so I've started taking my first steps towards creating a new business as a place-holder for all my activities. As there is likely to be coding and tech component to it, I am thinking about positioning it as a start-up within an incubator. We've come quite far disrupting the training business and it is time to build more powerful and exclusive analytical tools for my students to disrupt the industry even further. 

Within a month or so, this blog will begin to discuss what it is like for a rookie to get into a start-up situation. I think the time to do this is right as the manpower situation may be shifting towards an employer's market in the future and I really help on the design, marketing and aesthetic front from young interns.

A couple of personal projects have the potential for new business offerings. I hope to work with secondary schools over the next few weeks and something will likely bear fruit on the publishing front in October. 

b) Coding

After doing so much to work to analyse Yahoo price data, I finally got the book that shows me how real traders program in Python to do backtesting and I really don't like what I see. A lot of these backtesting frameworks require the coder to get used to a framework that may or may not see proper support in the future. Also using the code of other programmers lead to the frustrating virtual environment issues that take hours to resolve, I use Python 38, library works only with Python 3,5. Finally, some frameworks may not work with other - I spent a day trying to get fastquant to output to streamlit to no avail.

The modern developer faces a lot of dilemmas. Most of the time it's getting disparate code to work and it may have to keep happening when code gets updated. It may be wiser to develop the capabilities in house.

I managed to get MA cross-overs into my personal tool without any special libraries. 

I'm quite determined to be my own CTO if I start a business.

c) Books and Leisure

It's not been good for reading lately. Got a small book on behavioural finance but not useful after one reading. Tried to relax by reading Kazuo Ishiguro's The Buried Giant and it was somnambulistic. I think the literary greats will lose out on the modern crowd who need action and violence in their fantasy stories. An old couple visiting a Saxon village nearby is not a story a young anime or RPG fan can endure. 

Speaking of anime...

I am binge-watching Black Clover that is anime's take on a Harry Potter-like fantasy.  Now, this is a satisfying series about magic and class struggle within a magical society. 

I came dangerously close to picking a miniature game this week. I've avoided miniature games in the past because I don't want to spend weeks painting my miniatures before I get to play them. Now, for business reasons, the wargames have started to scale down and you can run a game with 20 miniatures for $100. 

Right now, I am reviewing the obvious Warhammer 40,000 against Corvus Belli. Warhammer has a large fan base but Corvus Belli requires a smaller army and has a system with more moving parts.

Frankly, I'd rather not get into the miniatures wargaming madness but RPG sections in game-shops are shrinking and in a few years, I might not have a reason to go there anymore without something else to look forward to.

Crazy Python experiments on Moving Average Crossovers

I've spent the greater part of the past 2 days fooling around with Python-based back-testers. Specifically, I was playing with the Quantopian Zipline tool and this really powerful library called fastquant. The development work was frustrating as I had to debug the code from other developers while resolving Python versioning issues on my own PC. I am having second thoughts of being my own CTO if I incorporate later this year.   

After working for a day, I don't have a full-fledged article for a larger readership from Dr. Wealth, but I can share what I am experimenting with on this blog. One of the questions that repeatedly gets asked by my students is when can they exit their investments. As I focus on dividend yields and retirement planning, I don't have a straight-forward answer as I like to hold onto my investments as long as possible.

But times change. 

We're entering the Interactive Brokers era and I have started making margin trades at $2.50 a trade and pay 1.6% for margin financing. Trainers need to react to maintain thought leadership in their respective fields. 

( Do you want to be the kind of Visual Basic or .NET instructor in this modern age when open-sourced Python libraries are being churned out at a break-neck pace? )

One possibility of timing an exit is to employ two moving averages. A fast-moving average that mirrors short term price movements and a slow-moving average that mirrors a long term price movement. So for TA specialists, a sell signal occurs when the faster MA moves below the slower MA. 

But I've never been comfortable with TA because:

• Who gets to decide on the fast and slow MA parameters? 
• What evidence is there to show that setting the parameters can mitigate losses?

Fortunately, I have now developed a tool to run back-tests over a range of fast and slow MAs and I can now display everything on a heatmap. 

Here are the MA cross-over results for the Lion Philip SREIT ETF based on three years of trade data. 

When interpreting the heatmap, we want to focus on green patches - where the cells are green, the potential for positive returns when using this cross-over strategy exists in historical data.

So by inspecting the heatmap, a good time to sell the Lion Philip SREIT ETF would be when the 10-day moving average dips below the 180-day moving average for the counter. 

I don't think this insight is ready for deployment yet because like many TA approaches this smacks a little of data mining - interrogating data sets until you find some trading nugget that can make you money had you invested in the past. You can lose a lot of money in the future if you don't play this right.

If I pursue this path, I would need to test the trading approach on an out-of-sample dataset. I also need to convince myself that green patches don't shift too much across time. 

What I did learn today is that different stock counters require different moving average timings and one sure sign of a fixed prescribed MA crossover parameter in an investment course notes ma be enough for me to call bullshit on the guru in question.

 

[Die with Zero] Distributing your wealth before you die

 

For years, the dominant logic on the financial blogosphere is that children need to be taught the value of resilience and hard work. Therefore children should be given very little wealth transfers and made to fend for themselves. I always felt that there is a sense of hypocrisy when parents say this because most Singaporean parents prefer to transfer wealth to complete strangers - tutors and enrichment schools to prepare their children for the future!

Die With Zero has an extremely logical reason for folks to consider gifting to children prior to death. This makes sense for folks who have already become financially independent and have secure annuity payments at later age.

• Most of your children would be too old when they receive funds through inheritance. Singaporeans live till 85, so if you have a child at age 30, he/she expects to receive the proceeds at age 55. At this age, most would not benefit too much at this age. For some unfortunate souls, they could be living in poverty until this time.
• As you grow older, you will need less money for leisure. Most of your expenses are focused on medical needs. You children may need the money to maybe raise children of their own. 
• Young people who are raised well can bring energy and a newfound discipline in money management. I know because I brought my father's portfolio into REITs. My mother now has enough income to sustain all of her expenses. She's also become extremely savvy at local equities.
• You can distribute most of your wealth before you need to rely on lawyers and the courts to distribute your wealth.
• It can improve relationships within your family. Money is a source of personal development and improvement.

For my case, it is a bit too early to decide whether to go with early wealth distribution. A lot of my current wealth right now (since my dad is gone) is not earned within my own generation so I am inclined to give it to my kids early, but I want to ensure that they live responsibly. 

One idea is to tie getting a useful local degree to an early payout. I won't be baited to declare what degree is useful in 2040 because I won't know right now, but I expect my kids to study a skill society needs before I distribute something to them. Alternatively, is there are no jobs in the future, I may inject capital for them to start a business. The most successful businesses are set up by wealthy kids with trust fund support. 

At the end of the day, which approach is correct?

It is about corruption.

We need to understand whether a wealth injection can corrupt a person and remove their motivation to work. From what I know about folks who gain financial independence, some will indeed become more laid back, but others will use this freedom to make a bigger dent in the universe. For my own experience, I experienced a drastic reduction to work for others but an overwhelming desire to run my own show.  

I believe that parents do know whether having more money will corrupt their kids. Odds are kinda hard for my family because we did not adopt middle-class values. My kids take public transport and don't see parents wearing pretty clothes.

But I better observe my own tykes before I form my conclusion. 

 

 

[Die with Zero] Peak Net Worth and Decumulation with CPF Life

 

One uncomfortable idea shared by Die with Zero is the idea that if we really believe in consumption smoothing, we would have to entertain the idea that a certain period of our life, we would hit our peak net worth. It means decreasing net-worth thereafter. 

The reasoning is actually quite sound - at an older age, we will not need so much money anymore. We should also take the time to enjoy what we have already earned. 

The year by which we attain peak net worth, however, is subjective. Any time in your 40s is fine but I think that in Singapore, the peak should not arrive earlier than 55 when you can extract your CPF money. It is also affected by the age by which your kids start being able to hold down a job and fend for themselves. 

The second aspect of peak net worth is that we need to now find the way to decumulate our wealth or to spend a proportion of it every year until we end up with a net worth of $0 on our last day on earth.

At this point, I will try to solve the problem for a Singaporean at the boundary conditions. 

The solution at the end of life is not that hard - we know that CPF Life can be deferred until 70.  To make decumulation possible, it is best to have the maximum amount possible in your CPF-RA pegged to an escalating plan and deferring payment for the longest time. I entered my age into the CPF calculator and using the Escalating Plan, setting the amount to $271,000, I should be able to extract a minimum of $2,147 from CPF Life. This even escalates to keep pace with inflation. 

So we've solved the Die with Zero problem by getting enough annuities to support us after age 70. Anyway, at age 70, you would not be going anywhere so more money beyond $2,100 might even be pointless.

Now we have a guarantee of monthly payouts to start providing income support from age 70, all that is left to do is to decumulate until age 70. Simply ear-mark a percentage of your liquid net-worth to be spent in the upcoming year. 

Suppose you are now 55 years old. You will have 15 years until you are 70 years old. You can spend 1/15 of your net-worth or 6.66% plus your income that year. If you have $2,000,000 and earned $100,000 that year, you need to spend $233,333 to decumulate by year-end. The idea is that excess unspent wealth can be gifted to your children so that they will not need to wait for you to die to have money to spend. At age 56, you can spend 1/14 of your liquid net worth.

I think the difficult part of this mental exercise would be to accept that after a certain point in your life, your net worth will start dropping moving forward. 

It is unthinkable for me. 

But there is wisdom not holding onto your wealth and giving it to your children instead while they are in their career forming years. As they are young, they can bring a certain dynamism and energy into portfolio management. 

If the money is kept with older folks it would be too tempting to keep it rotting in bonds investments all day.