My Path to Immortality

 

I think the question of immortality is an important one in personal finance because we do not know the time when we will leave the earth. That inability to predict when we will die forces academics to rely on mathematical models to simulate safe withdrawal rates. 

One standard idea I don't subscribe to is the concept of consumption smoothing, a futile modelling exercise that determines your standard of living given multiple variables like your income, your portfolio size and risk appetite. In my worldview, if you can establish a standard of living assuming that your lifespan is infinity, then that should be the way you should live - the excess should go into FIRE.

So I'm actually very interested in Longevity and the idea of living forever. Adding years to my life gives me a bigger incentive to load more money into CPF Life and take on the Basic plan that produces more monthly income every year. 

Sadly, in practice, I probably would live a life much shorter than most readers because I am a type II diabetic. Worse, thanks to CNY and poor discipline, my HBA1C leapt from 7+ to 8+, which means that I need to act quickly to bring it down again. 

The hikes I have with my young friends are not really helpful (but it is still fun) because the highlight of these events is often the food, and there's nothing to erode your willpower to resist good food more than a 12km hike.   

So I'm creating some lifestyle changes this week :

a) Bringing back intermittent fasting

I have tried IF on and off in the past but could never muster the willpower to sustain it. This is complicated by the cocktail of drugs I eat because it drives me ravenously hungry. Still, I have attempted to bring it back and so far reduced the number of meals I take to two a day.

b) Some swimming and hiking will be maintained with some resistance training

The moment I get comfortable on IF, I need to find a way to bring some resistance training back into my life which means that somehow, in addition to swimming, I have to start planking which is something I dread. I can barely plank 30 seconds but, according to my new physiotherapist friend from SIT and some googling, this is the best way to do resistance exercise. 

c) Added Resveratrol to my daily cocktail of nutraceuticals.

My drug cocktail is almost maxed out and my specialist now encourages me to do my own research into nutraceuticals. I discovered Resveratrol which is made from grape skin which has anti-aging properties and can improve my insulin sensitivity. 

The problem is that resveratrol is super expensive. $70 a month from GNC and my doctor pal tells me that my dosage is not as high as dosage researchers use in their experiments. If any reader has a cheaper way to get more of this, do let me know. 

d) Added Rybelsus into my drugs cocktail

This is the big one. Rybelsus is the latest and greatest diabetic drug that works on a new vector and can lower my weight further. It is also free because manufacturers are offering it to Singaporeans as a trial to convince hospitals to stock it. 

Right now I expect results in about 3 months and my doc explains that even if it works, the drug may not appear in government pharma for a while so I have to buy them from Guardian. 

I expect this to cost a bomb later, but then again, it may not even work for me. Maybe I should worry about the finances later. 

Sometimes, I wish that my fiscal discipline and savvy can transcend boundaries and make me fitter and healthier, but who am I kidding right? If this is easily applied to other domains, physical trainers can also become top hedge fund managers. 

There should be new content from me coming up on the Dr Wealth Blog this week. You can also sign up for my previews this week by clicking the links on my blog sidebar. 

Making new friends from SIT

 

A long-time reader contacted me a few weeks ago and invited me to speak in SIT in an event conducted by a breakaway public speaking club that splintered off the Toastmasters movement. We spent some time trying to make the event a reality until SIT bureaucrats wrote to me seeking acknowledgement on three sets of rules that I had to follow during the event. 

One rule which I cannot abide by was that I am not allowed to disparage SIT as an institution during my talk. 

I felt that this rule infringed on my freedom to express candid points which, if I'd executed the talk, would ultimately do SIT students a lot more good than ill. It is also unfair that a tenured professor can flout this rule without threatening his career.   

So let me give you an idea of the speech I intended to give :

• I hoped to open with a comparison of salary and employment data on the latest graduate employment survey. Although the data is not in yet, I believe that there is a salary gap between NUS and SIT if current trends from last year persist. 
• I will also review the apprenticeship results and compare that with papers written by government economists to build up my case further. If what I read is correct, apprenticeship numbers are too low to move the needle at the moment to even justify sending my own kids to a polytechnic.
• What I will attempt to draw from my data is to support the conclusion that an SIT graduate would need more than just their degree paper to compete against the Big 3 Universities. Life is unfair.
• I will propose "qualifications laundering" to resolve the issue - SIT graduates can trawl through Coursera to "graduate" with Ivy League or MIT credentials based on topics of their interest. This is a signal that they are truly passionate about their career.
• They should also supplement their resume with a CCA leadership record.
• Finally they will search for jobs that they only a rare few would enjoy. ( Eg. Embalmer )

In my planned structure, there will be multiple points where I can be seen as disparaging not just SIT but also some government policies. Even if my reader would enjoy my presentation, I doubt he can guarantee that I would not hurt the feelings of some of his classmates. The likely outcome may be getting cancelled like Jordan Peterson. 

So I made the decision to cancel the talk.

 If I'm going to acknowledge a set of rules, I should sincerely abide by them. In this case, I know I can't.

I think both myself and the students have worked hard but could not come up with a program and there was wasted effort on both sides, so I got them out and bought them some coffee. I also suggested a few names who can replace my speaking slot.

SIT students turned out to be great ambassadors who spent time explaining to me their coursework. I was informed of many misconceptions I have about SIT - there are actually A level students in the program. 

It was also a great learning opportunity for me. The valuable ideas I got from them is how young people look at their personal finances and it's very DeFi and crypto-centric, I promised that what I learnt from them would influence the training I am about to conduct. 

Overall what is my impression of SIT? Actually, it's always been positive because Dr Wealth sales staff are products of the program and I am a beneficiary of their excellent work ethic. 

But I did make a disclaimer - I have been super candid about polytechnic graduates and private degree holders on this blog, given what I read I doubt I'd even spare NUS Science grads in a future article - so it would not be fair to talk glowingly about SIT simply because I really like their graduates. 

I would like to review the graduate survey numbers before I set out a concluding article on SIT. 

The NUS and NTU survey numbers are out, I'm still waiting for SUTD, SUSS and SIT.

  

New Product Launch - Cryptocurrency for Conservative Investors !

Yesterday, we've just finished a practice session of my new product launch and, boy am I grateful to have business partners. As the creation of sales materials and the product is simultaneous in my industry, the material I built meant for tonight was somewhat inadequate with quite a number of flaws, so I spent the past two days improving it for the mainstream audience.

But tonight I am ready. 

At 7.30pm, 16 February 2022, I will be conducting a preview of my second product Cryptocurrency for Conservative Investors. This product is designed for investors who are thinking of taking up a fresh position in cryptocurrency but are sceptical of the ridiculous push that cryptos have been getting in social media.

My course offering has a unique number of strengths. We've already built a network of partners and a library of tools in the ERM program that can readily be deployed to analyse and manage a portfolio of cryptocurrencies. On top of reading voluminous tomes on crypto investing, we're ready to challenge existing orthodox views on crypto investing. 

We've also got the backing of some older academic ideas. 

This is a discussion that will bring different generations of investors together. We will attempt to unify the prudence of Boomer and Gen X along with the dynamic optimism of Gen Y and Gen Z. 

Mor specifically, I will discuss the following :

• Generational considerations when it comes to cryptocurrency.
• What a conservative investing profile for cryptocurrency should look like.
• What precautions need to be taken before starting a journey in crypto investing.
• How to complement an existing portfolio with a position in the cryptocurrency

You can sign up by following the link here :

https://us02web.zoom.us/webinar/register/8216444863739/WN_DOombZfDQbqIscSRIgCsFw

As it is almost a trial run, we have yet to ramp up marketing efforts, so it should be a cosy meeting later. If you are free, why not come along to have a discussion with me. 

Valentine's Day thoughts in 2022

 

In spite of a busy schedule, this blog should say a few words for readers every year on Valentine's Day (VD). This year, I've decided to borrow some heavy firepower from Laurence Kotlikoff who is an economics professor who wrote this wonderful book called Money Magic. The book is kinda hard to read as it focuses a lot on the US context, so quite an amount of work is required to re-contextualise it to Singapore and I must say that it has changed the way I think about personal finance and these changes do percolate into my training materials.

I'm just going to focus on some main points made by Kotlikoff on marriage. I think marriage has taken a hit in Singapore as young folks have much better options to settle down. For guys, they can farm their crypto coins at double digits yields to live a carefree life playing Lost Ark all day. For girls, well there's plenty of literature to convince them that it's no fun to be married and have kids. 

I still think that there is ample evidence to support marriage in modern societies even though major issues like divorce and kids increase the risk of going through the process. Here's what Kotlikoff have to say in his book :

a) Marriage is about economies of scale within a household.

Romantics prefer Shakespeare Sonnet 116 when it comes to marriage. Even I included lines of it in my marriage album. 

In practice, I prefer to use economic data. 

A single person aged 65 needs $1,768 a month to live a dignified existence. A couple of the same age needs only $2,419. The rule of thumb across societies is that marriage cuts expenses for each party by about 20%, so much so that US levies a marriage tax penalty when rich people shack up. Singapore actually gives you HDB benefits as a couple. This should offset nerf single living.

The main issue with this argument is that young folks live with parents so they won't feel the premium associated with coupling, but the numbers become very clear after age 65.

b) Ceteris Paribus, you should marry someone rich  

I had lunch with a doctor pal and ask him what happens to single women who become medical specialists. He said they struggle a lot because they are always looking for someone better than them. One of his colleagues is dating some CFO of a company who is in his 50s even though he is triple-divorced. He even said he can introduce them to me but they might be twice my size, conveniently ignoring the fact that I am married with kids. ( Maybe these doctors don't mind. )

But if I'm single, why not? 

On first inspection, it looks like advice for gold-diggers but Kotlikoff meant for the advice to apply across different genders. If you marry rich, you can raise your standard of living and you can do this without penalizing the other party because of point (a). Kotlikoff argues that wealthy people can provide just the same amount of care and love, poor people can give. 

I agree with Kotlikoff, but he should account for psychological studies. Some folks are rich because they're disagreeable. I can't make a pile if I listen gullibly to a commissioned financial advisor. But rich people are hedgehogs. 

We're spiky on the outside but we're soft underneath. 

I think the only difference is that rich people can't complain publicly about anything because of "first world problems". 

If your Lambo develops a flat tire, go ahead and cry me a river. 

c) Divorce happens, but plan for it.

Western societies have high divorce rates, Kotlikoff has really great but unpalatable advice for folks planning to get married. 

One approach is to use a prenup but there are simply too many complications to make it work here with the Woman's Charter. But the best advice squares with my short stint in Family Law. Divorce only if it is profitable to do so. In other words, ask yourself whether you hate the other party so much, you have to lower your standard of living by, say, 35% Another tip is to agree on the standard of living post marriage. then work towards that number involving as few lawyers as possible. 

I don't see warring couples doing this in practice, so good luck to you.

Anyway, I noticed that singles have been too quiet on VD. If you have nothing else to do, better don't visit a watering hole, they are playing a lot of sad songs by Air Supply today according to my single friends. 

But this book and read it!  

Spinning the Wheel of Misfortune

 

Some readers may notice that there's a certain radio silence coming from me. The first reason is that I don't have to market my next ERM course until March 2022. The second reason is that I'm busting my ass trying to complete building my cryptocurrency course that is targeted at conservative investors. You can expect the first preview in about a few days on 16th February 2022 and I must say that if you want to catch me while I am still raw and may cock-up a course preview, there is really no better time to catch me. 

( Sign up in this link ! )

Today I'm going to talk about two scenarios. Which scenario do you prefer?

A) You earn a bit, other people earn a lot, and get in your face about the whole matter.

B) You lose a bit, other people lose a lot, and you have the option of getting into their face.

If you have been doing local stocks focused on dividends, then for the past 10 years, you are experiencing (A). But recently, because of the Tech Rout, you may be going through (B). 

My recommended single stock United Hampshire REIT  in a Dr Wealth event last year did not do well since the recommendation was made when it was $0.75 and it is now only $0.625. But since putting up that position,  it earned about $0.03 US cents in dividends, so it's a 13% loss. But another stock recommended in the same panel was Palantir which was a Tech crowd favourite that got a recommendation at $24 and it's now trading at $14. 

That's a 42% drop. And I am elated. 

The truth is, for most dividends investors, our characteristic portfolios have a heavy dose of mean reversion, we do bounce back, short-term is fine and I'm even leveraged above x2.

As dividends counters recover with leverage, something interesting happens, your collateral increases while technology stocks drop. This is compounded more aggressively if you received leveraged dividends at the same time. 

I call this The Wheel of Misfortune. 

Imagine a wheel with different investing possibilities: Cryptocurrencies, US Tech stocks, Chinese Tech Counters, local Tech, local data centre REITs. When SG Banks began to climb this year, leveraged investors get to Spin the Wheel of Misfortune. 

I think some of us are playing this game wrong. I'm seeing more messages congratulating dividends investors for their wisdom and no one seems to be rubbing it into the STI recently. I think trying to emulate dividends investors is the dumbest thing to do right now - I have millions of dividends counters accumulated over the past 15 years and it produces an MP's allowance every month. 

To play the Wheel of Fortune, you need to see who is bleeding the most. Who is the quietest on social media after months of non-stop flexing and bragging on social media with their magical ability to find growth stocks or alt-coins. The kind of beta males who go on a Tinder date and then, with no career to speak of, spend hours regaling their dates with stories of their cryptocurrency trades, earning a blacklist from the ladies.

Now is the hard part.   

As much as you may disagree with their flexing and self-aggrandisement, you need to take this latest round of dividend payouts and shop for counters that are producing the biggest amount of hurt for their investors.

I've got a lot more collateral on my Interactive Brokers account and after spinning the Wheel of Misfortune, I think Palantir seems to be hurting the most. I went in on IPO day and I paid $10.50. Now it is trading within $12-$14. I did overpay sometime ago for $24 so my average price is only $15. 

So I've been buying Palantir up throughout this week, from $12 to $14. I've quadrupled my position so far and I'm likely to go further over the next few days. These days, I'm less afraid of a margin call - I have enough stablecoins farming yields that I can withdraw to avoid liquidating my leverage portfolio. I'm also supplemented by dividends from an unleveraged portfolio. Do note that I know very little about PLTR, IMHO, it's impossible unless you've handled their Gotham or Foundry software yourself. I doubt the gurus know anything about the counter.

I think it's time the reader spins the Wheel of MisFortune too. Other candidates for me include ETH or HK Tech ETF 3067.  

At least when the kuailan comes back in a few months ( and you know it will happen), I've got a credible tech and cryptocurrency portfolio to share the joy of these flex bros. 

This blog will reduce its update frequency until I complete my work to launch my Cryptocurrency for Conservative Investors programme.

Wish me luck !

 

 

Your attention is an asset that needs to be allocated well

 

Even as you attain FIRE, you will still have 24 hours a day. If you are unable to manage your time, you will spend the rest of your life drowning in Netflix series and computer games which will never end. This makes Indistractable by Nir Eyal relevant self-help for folks who don't really need self-help books anymore. Ultimately, your attention is your most valued asset and needs to be allocated with a lot more care than maybe even your financial capital.

I will share three ideas that can make an immediate impact on your lives.

a) Timeboxing your day

The first idea is to timebox your day and allocate your hours to perform specific tasks. Because we get interrupted quite easily, allocating your time to a specific appointment or job, would not only make you more efficient, it can also make time for tasks that involve rest and relaxation.  The author even has templates, but I think Google Calendar should suffice.

b) Turn off desktop/tablet/mobile notifications

 I was beating myself up for not figuring this out earlier. Notifications can be a time drain we don't appreciate how annoying they can be until we realise that your life is being run by them. You can get more stuff done if you disable notifications on your desktop, but this should extend to messages and Whatsapp on your mobile phone. I'd also like to point out that if you need to be notified of the price level of your investments, you're not investing right.

c) Use Pocket or Instapaper to read an article later

I actually don't use this hack because I read RSS Feeds with Feedly so I'm ahead of the curve. But sometimes a friend sends me an article to read and I should have a system to push it offline so that I can read an article in batch. This is probably a worthy investment of money to get an app to do this. 

To wrap up all the tips and tricks in the book, the author proposes a fairly effective idea to make these interventions stick. One way is to create a personal identity and see yourself as someone who is 'indistractable'. 

But I think crafting your identity this way lacks ambition.

I think if we can accept that crafting an identity can make positive and permanent changes in our lives, I would prefer to see myself as an "expert in asset allocation". We are not just good at putting our money into different securities to earn a good return, we are also really good at allocating our time. If you extend this idea that financial capital is just the tip of an ice-berg and there are other forms of capital like social and cultural capital, then this expands the power of your new identity quite dramatically and you can think of some tips beyond just reading this book.

 

 

虎 cares ? I do ! Because Grand Duke of Jupiter !

 

If I believe the Feng Shui Masters, I'll be experiencing a tough year as those born in the year of the Tiger will come under the influence of the Grand Duke of Jupiter, which is sort of like having a very fierce celestial auditor looking over your shoulder for the entire year. The year is not totally a disaster, and Joey Yap even said that this is not the year to be passive and low key. By taking bold action, the year can pay off for folks like me for years to come. 

It is no accident that things are already shaping up to be rough. As the lockdowns get more sustained, we find that investment training has gone online and it has attracted a lot of newcomers who want to give this career a try which creates a larger supply. This has turned the entire industry into a red ocean with my own revenues dropping over the past two years. 

So this has to be the year things turn around. I will launch an online programme to show conservative investors how to incorporate cryptocurrencies into their existing portfolios. I hope to bring the quantitative framework and candid approach to cryptocurrency investing that will be different from other programs. 

To make this happen, the articles on Dr Wealth will change slightly and will be pivoting to more crypto content and my ERM previews will cease until around March 2022 after I complete designing the new course. 

I suspect I have a different way of creating training material. I start with a skeleton of my slide deck and add material whenever I find something useful in my readings, I have read quite a number of cryptocurrency books already, but naturally, slides need one more level of refinement to capture the current state of the crypto markets. 

Right now the material I will include in the programme is still fluid as I'm still in the business of slide building. I also have no idea how pricing will be done because this is designed to be very much hands-off.

I'm also facing multiple challenges getting this programme out, while there is enough material to get things up and running for an older investor who wants to get into crypto, I think my personal reputation as a trainer will not survive if customers conclude that it's possible to google everything I teach which is why I treat this almost like a final year thesis to write my stuff.  Another question is whether I will hard fork or soft fork my ERM community, which I treat like my closer pals. 

Finally, I won't launch a course without a real portfolio of my own. Right now, I'm still building my own cryptocurrency reserves and a significant amount of dividends will be channelled in that direction based on the materials I build. In this sense I am lucky - the crypto crash opened up the possibility of bargain hunting and I'm definitely not buying at ATH.

Anyway, enjoy the preview of my personal notes, they are not ready to be lecture slides (yet) and you decide for yourself whether the opening GIF made by the trolls of Dr Wealth accurately portray the lives of their trainers. 

 

Do you trust our education system?

This is something I want to write about recently. My wife went to a meeting between parents and teachers and was really shocked at how vicious and unreasonable parents can get when they handle their teachers. 

Two specific events show that things may have gotten too far in favour of parents :

• An old math teacher was attacked because she wrongly marked her scripts, this is bad but, in her defence, she marks her script until close to midnight. 
• A Higher Chinese teacher was attacked because her Chinese was too 'cheem'. At least this teacher fought back, if you can't hack Higher Chinese go back to Lower Chinese. Also, because this teacher was PRC, I suspect some amount of xenophobia played into this.

In both cases, this would not have happened in my era.

I'm not going to defend the parents, but I explained that complaints will continue authorities will put a stop to this to protect the sanity of their public servants. 

If more VPs and Principals grow a pair of balls, we will not lose our best teachers to the private sector.

That being said, I do think my generation has reasons to be like this :

a) Complaining works in Singapore

The first reason is that Singapore is probably the rare country where complaining works. Our bureaucracy has a tendency to overcompensate when things go wrong so complaining is highly profitable. 

It's not surprising that Singaporeans grow up thinking that complaining is a great solution. Sadly complaining often fails or backfires in other countries ( like in Malaysia )

b) Some Gen X do not trust their educators

The second reason is that Gen X does not trust their educators. We were taught to be industrial drones while the economy transitioned into an information economy. There are still regrets of rote learning and memorization even though schoolkids do less of that these days.

I have my own tales of woe :

• In secondary school, I had a Physics teacher who set an MCQ question and got 10 out of 50 answers wrong in a paper she set herself! I went to the library, got an A level text, got another physics teacher as referee and argued my case in the principal's office until the teacher relented. After that incident, there were rumours that the paper was copied from Nanyang Girls and the answer key was taken from her own daughter's answers. I suspect my legal training started then. I traumatised the teacher so badly my class had no physics teacher for 2 months and it was an O level year. Staff who remember the incident still ask after me today.
• My secondary school refused to start a triple-science class because the principal believed that we were not good enough to become doctors to take a triple science workload. I don't understand why an entire generation of students must suffer to be underestimated this way.
• Polytechnics sent lecturers to speak to us to tell us half of us will not qualify for university if don't get single-digit O level grades. I asked my RI pals whether they got the same delegation and apparently, they did not.

My own bitterness against my teachers only faded after I arrived in JC, then I was more accustomed to teachers who knew what they were talking about. Sadly that lasted only 2 years.

c) Parents also get slammed by their bosses and customers at work

I think the final reason is that parents are also human and underperform at the workplace so they get picked on as part of their work, so when they see teachers making mistakes, they get to pounce on it.

When I was working with that government agency, my supervisor, the same lady who asked an Indian contractor whether he was participating in the Little India Riots, once bragged to me how she and a bunch of parents nailed an underperforming teacher in NJC. She used to get so stressed at work from her boss who was known as the Invertebrate of the office.  

Most of the unhappiness is just what was being passed around.

I think the Ministry needs to put some brakes on all this abuse of teachers. Some of them are being abused for things done by seniors decades ago. If 500+ lawyers can just walk away from the legal profession, I fail to see why teachers cannot reinvent themselves as tuition teachers to get a semblance of sanity back. 

Let's see whether The Great Resignation will affect the teaching profession next.

If you are a burnt-out teacher, why not google the "FIRE movement" and learn how to rebel the smart way.

On FIRE, investing and suffering

 

This is a very good time to talk about suffering because most of our portfolios are down. 

Tech stocks in both China and US are probably experiencing the most pain and this is likely to sustain as interest rates begin to rise and we're starting to see threats of war in Ukraine. REIT investors have also been battered as of late as investors treat them like bonds although I must say that the effects on my portfolio are minimal given that my banking stocks allocation is currently holding up to minimise my damage.

Although I'm losing money every day and feeling some pain, I'm really enjoying this because the cockier Tech investing bros are absolutely getting thrashed, currently licking their wounds, and hiding at the moment. I also expect to relish the idea of commissioned FAs who brought focused tech-based portfolios to their hapless clients trying to explain their strategies to them. This is the moment we see commissioned salesmen begin to talk about long term investing, long term annualised returns, and dollar-cost averaging. 

This brings me to this book The Sweet Spot by Paul Bloom, which talks about the centrality of suffering in our search for meaning. If you enjoyed reading The 50 Shades of Grey and long for the non-fiction equivalent, you should look no further than reading this book that actually has dedicated sections on the pleasures of BDSM.

The key idea of this book is that seeking pleasure is not enough for human beings. Beyond pleasure, human beings want satisfaction and meaning in life. This is why people volunteer to perform acts that may seem uncomfortable at first but contain a long term payoff. Acts include mountain climbing and childbearing. As a dad to two kids, I can never understand why my wife would volunteer to create kid no. 2.

 

But as we think about pain, we should take note that satisfaction only comes from voluntary pain. If you pay a dominatrix to shave your balls, you may obtain pleasure and find it money well spent. But if your client kidnaps you to shave your balls because you asked him to put all his money into a US Tech-focused unit trust, it's probably not even half as fun.

I suspect this book really provides hints on how to succeed in FIRE.

FIRE can be painful but it is really a process that is totally voluntary. 

You have to work hard, forgo enjoying your income, and then study how financial markets work. We cannot expect everyone to really rave about doing this for about 8-12 years of your life. I think for FIRE to work, people need to let it give added meaning to their lives. 

Maybe the process of FIRE leads to a higher net worth compared to your peers so that makes you feel good. FIRE also secures your family's financial future. Maybe for me, FIRE is totally going against the commission financial advisory industry, to show that I can thrive doing the opposite of what financial advisors often say. It is also an active rebellion against corporate life because I am not working to put food on the table and can make moves most employees would not be able to. 

If you examine FIRE through the lens of a search for meaning amidst suffering, then you may conclude that many of us in this community are masochists at heart.

 

[Part 2] Building financial capabilities of vulnerable households

 

I've finished the book and must say that the most relevant bits are the first and final sections which contain information that is useful to audiences outside the US.

Becoming a financial advisor/coach for the poor is a job that is a lot more complex than advising the wealthy. If the textbook is right, most social workers would not have the sophisticated finance skills to sort out the personal balance sheet of their charges. Folks with a finance background may not understand the ground issues that need to be resolved before they can even review a person's financial institution. At the backdrop we've got a host of legal issues - maybe the person seeking help is an illegal immigrant. Finally, there will always be the probability that the recipient of the aid may not even be grateful for it. 

So helping the poor to build up their financial capability is a multi-disciplinary issue that has just received its first textbook.

I'm just one guy, but strangely reading this book has gathered a strange collection of interested parties who would be happy to assist because they feel really strongly about this. 

This is what I think can be done at the grassroots level :

• For any impact to be felt, we subject matter experts can't even focus on the poor directly - That remains the job of the social worker.
• It is possibly easier to assess what a social worker knows about personal finance. So I think I may actually be able to design a 5 question quiz to assess the level of financial proficiency of social workers.
• With the survey results, we can design a personal finance course for social workers. This can be done by the FIRE community or a pro-bono trainer for free. Maybe a social enterprise or NGO can provide a venue and cater some food.
• When the caregiver is taken care of, some would be open to assisting to create a variant program for their personal charges. 
• This second program will be delivered by the social workers with the help of the subject matter experts. It cannot be done by either party alone.

Sadly for me this year, I have my hands full with media appearances and the launch of a new course, but this serves as a guide for future action. If folks want to take this plan and run ahead of me, I'm happy to lend some assistance, but I can't take the lead. 

Some folks suggest visiting a Family Service Center to ask around. 

That may be the first step.

Letter to Batch 24 of the Early Retirement Masterclass

Dear Students of Batch 24,

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

It is pretty surreal to conduct the class in the middle of a Technology stock crash in the US. The NASDAQ fell 2.72% on the previous trading day. Cryptocurrencies fell across the board as well. As fears of an interest rate rise begin to infect financial markets, the Singapore stock market is starting to look pretty tame, with banks forming a large part of the STI. 

Course-wise, I’m personally glad that the Early Retirement Masterclass would finally have a coherent set of slides on investing in cryptocurrencies that is tailor-made for conservative investors. It was also rewarding to see the strategies taught to hold up against massive losses in the price of major cryptocurrencies like ETH and BTC. I look forward to your feedback on how to improve my materials further. 

There is never a better time to participate in building a portfolio of Singapore stocks as it has always been priced reasonably. Our batch of students has witnessed a return of traditional value investing factors to guide our stock selection on this batch. We’ve also decided to cycle out our technology stock picks with two small-cap counters that are relatively safe and well-liked by local retail investors.

One point to note is that we’ve made a stock pick for a recent IPO counter that has not acquired enough data to be placed meaningfully in our report generator. Please refer to our FB community discussion to get information on this counter.

Lastly, I hope that Batch 24 will participate actively in the FB group. In March 2022, we should be meeting up for an online webinar. At the time of writing, I have yet to determine the subject matter of this discussion.

Hope to see you then!

Christopher Ng Wai Chung

Putting gaming front and centre in my latest video.

As I'm conducting Batch 24 of the Early Retirement Masterclass this week, you have to wait a week before some content reappears on this blog.  

But I have a special treat for you today :

For this video, my objective is to pay homage to my gaming roots. 

I made a special point to highlight to iFast that I really want to talk about the Alpha Black Lotus card which last traded for $500,000+ at an ebay auction. Considering this is a trading card I used to play within the 1990s, it has the potential to make TSLA stock look like a money market instrument.

Hopefully this can humanise retirement planning and it gives gamers something to shout about.

We will resume regular articles this weekend as by then I should have finished the book on helping vulnerable families by then.

  

[Part 1] Building financial capabilities of vulnerable households

 

I found an interesting textbook for social workers in Kinokuniya a week ago and decided to buy it because it discusses issues that have bugged me for more than a decade. 

When I just published my first book, I attracted my first bunch of critics. They challenged me to see whether a non-degree worker can also be made to retire early on a salary below $2,000 in today's dollars. 

Faced with such a question, I retreated immediately because my salary was actually quite good when made my first $100,000 ages ago. Also, I enjoyed living like an ascetic. The idea then was that most of Singapore cannot be helped. Even if some kind of magic formula were to exist, most citizens would lack the IQ or conscientiousness to implement a multi-decade plan for retirement. Government understand this well which is why they have CPF - it's a system to save Singaporeans from themselves.  

I'm not the kind of guy who retreats from fight, so the incident stung me for many years. 

Even if Financial Capability and Asset Building in Vulnerable Households is unable to address that challenge, it's worth plunking down $100 to read a book that highlights the difficulties of vulnerable families so that we can at least understand what obstacles stand in their way. To further this end, I made the immense personal sacrifice to stop reading the Economist to focus on finishing this textbook book. 

I'm halfway through and find this a pleasurable read. Way more pleasurable than certain sections of The Economist. 

Before I begin, I'd just like to point out that if you are that unfortunate social worker who reads my blog, the book will be useless to you because it is totally US-centric, I had to wade through information on 529 college plans and welfare schemes available to Native Americans. I also baulked at how shameless US textbooks are at giving suggestions on how to lobby and protest against unfair regulations. The book is written by the political left. And we don't need that kind of shit here in Singapore. 

On the other hand, the book may be useful for some local bodies to develop a framework to help vulnerable families, the key is to wade through all the chapters and find the equivalent social programs to document for Singapore. Whoever succeeds in doing this, is a saint, it may make commissioned financial advisors matter less in society, and I'm happy to volunteer my personal time to help. 

Here are some things I have learnt from 50% of the book:

• It's hubristic to jump in to look at the expenses of the vulnerable immediately. If someone looks for a social worker, they have a specific problem they need to be solved. Solve it first before getting into processes to clean up a person's finances. Eg. An abused wife may need a PPO before addressing the lack of a bank account as all her money is shared. 
• Banks can be very oppressive with deposit account charges and ATM fees. Social workers need to be armed with alternatives or find ways to top up to avoid service charges. Sadly, if you have a savings account that is less than $500 with DBS, you will have to pay $2 a month. But $500 is kinda manageable.  
• Because vulnerable families often work for the gig economy, one area that needs to be looked at are earnings volatility. A poorer family can expect 25+% drop in monthly income every few months from illness or other events. So social workers in the US are always finding ways to get their charges to find more sources of income. 
• A three-month emergency income kitty is ridiculously hard to achieve for vulnerable families and suggesting this can make you lose credibility. $200-$300 standing by for sudden visits to the doctor or malfunctioning appliances is a simpler and quicker win. I would say $500 to minimise service charges from DBS is a good confidence target.
• Eventually, a social worker needs to build a map of the family finances. Prioritise the income statement first because there may be some bleeding to stop. Constructing a balance sheet can only come later once they are ready to build better financial capabilities. I don't even know how many can even reach the balance sheet stage.

To go through the volume, I have also wasted a lot of time figuring out how to game withholding taxes and massaging a person's credit report. I really think that the US is really not helping their citizens with a complicated system that makes our CPF policies look like a colouring book.   

In part 2 of my review, I may propose what this means for Singaporeans and what we can do for vulnerable families here.

On The Status Game in Singapore

 

One possible reason why I turned to the FIRE movement was that I was never the star employee of the department. I do ok at work and get decent ratings, but someone else will always take pole position. FIRE was a way of creating something which I am good at. While my increments were lower than top-rated colleagues in my 20s, it would be quite hard to beat my income if you account for salary, overtime pay and dividend payouts. 

One powerful way of reframing anything in Singapore is to see it as status games. In the book The Status Game, Will Storr discusses and illustrates with examples how jockeying for status is something really fundamental that human beings really do. If you think about it, the field of financial advice is basically taking folks with minimum A-level qualifications and bestowing upon them high-status labels like MDRT, COT or TOT and then convincing them that their wonderful advice is as valuable as that given out by doctors when, in essence, they are commissioned sales people. 

This book is one of my better reads this week and I think it is time to look at the kind of status games we have in Singapore because the first step is identifying the kind of status game we are really playing.

a) Games of Dominance

These are status games people play in the past and largely evolved from the games where physically dominant males coerce others to do what they want. Games of Dominance can arise from violence and threats of physical harm. Expect games of dominance in the Mafia, but I found a game of dominance in NUS Engineering School - a classmate who was a specialist in the Commando Battalion told me that punching someone up is often a great method of resolving disputes in his unit. According to him, a fight is often the best way for men to respect you. 

I always found this guy unsettling and I'm glad he was not my sergeant. 

b) Games of Virtue

If you cannot physically overcome someone, maybe you can position yourself as being holier. A Game of Virtue is all about attaining a higher rank based on morality. Obvious examples are hierarchies within a religious organization. In Singapore, games of virtue are often played on social media when an angry self-righteous mob cancels someone. 

2021 was a great year for the cancel crowd as folks like Kenny Leck of Books Actually and Sylvia was targeted by angry Singaporeans. 

c) Games of Success

Games of Success is a more modern invention where you can attain a higher status based on personal achievements. Climbing the corporate ladder is a game of success. If you think about it, labelling someone BBFA is basically a humiliating appellation to lower the status of an EDMW denizen to imply that they are not successful in their lives - which is why they are fat, undesirable and hide behind their keyboards all day. You will find that in every society there is some kind of incel or hikikomori who are folks, often male, who is at the bottom of the Games of Success - incels may fight and actually kill women, but hikikomori usually takes flight.

Personally, one of the best insights from the book is that a person cannot avoid playing The Status Game. 

But he might be playing a different game from you. 

In the FIRE movement, we play the game commonly as a Game of Success where we measure our dividends and calculate what it takes to attain a lifestyle without utilising our monthly paychecks. However, there are groups of folks who play FIRE as a Game of Virtue, where they attack capitalism and promote a more freegan lifestyle that is more environmentally friendly. 

You may be wealthier than the dumpster diver, but he's holier than you. 

If we cannot avoid playing some kind of Status Game then everyone benefits if we have access to more diverse games in society. Maybe I can't qualify to take H3 subjects in JC, but I am charismatic enough to lead the Student Council. If society insists on academic excellence, then there is little room to manoeuvre and no one, especially single males, will willingly accept a low status in the environment they are in - some will migrate, and others will turn to violence. 

At a personal level, to protect our mental health, we should also cultivate multiple interests to play multiple status games simultaneously. Young lawyers quit in droves because it is simply not feasible or logical to play that one status game where lawyers race towards becoming an equity partner.  

So the book does have a self-help dimension - Maybe there is a status game or some subculture out there that we can do well in so that we can bolster our self-esteem and not have to be tortured by the idea of being at the bottom of the shit heap.

When I hit 50, I will qualify for Golden Age Talentime! 

Maybe they'll accept a heavy metal entry.

Two wacky ideas to think about

On New Year's Eve I had a privilege of being invited to a CPF interest party. To entertain my host and fellow guests, I shared two wacky ideas with them. I just wanted to see how receptive folks are to them. 

I was fortunate as there were many younger professionals attending the reception so it's a good way to look observe their reactions as well.

So here it goes :

a) NTUC should mint its own cryptocurrency

I did spend 11 months with the IT Department in NTUC-ARU. Amazingly my host worked with SLF who holds the purse-strings behind NTUC initiatives. 

My first idea is that it is time to launch a cryptocurrency and the best body to do this is NTUC-ARU. The idea is that with the wealthy cornering fiat in Singapore and almost all rental properties, a new form of utility token that can be exchanged when low-income Singaporeans perform services to help each other can create a new hierarchy of wealth ownership in Singapore. Of course the question is whether MAS will provide oversight over this project. The group says that for this to work, this Ucoin will need to replace the Linkpoints system. 

After I got home, I now feel that my idea is actually too unambitious. UCoin should not even be a utility token. 

UCoin should be a stablecoin based on the seigniorage model. There should be a USGD that is pegged to the SGD and a reserve currency UCoin that fluctuates to enable NTUC social enterprises to plug into the infrastructure to create a decentralised Union Cooperative. Union members can yield farm on USGD to get passive income just like a co-op.

The biggest issue is that Unions will become a second central bank in Singapore, but if its a question of regulation the massive resources of NTUC will probably find compliance much easier than, say the gang behind Anchor protocol.  

b) Someone should try to sell Polytechnic insurance

Since we're already into crazy ideas. I thought that Polytechnic insurance should totally be a thing. I was telling everyone about this horrible article about kiasu parents threatening to withdraw support because their son chose the Polytechnic track and it actually force the Polytechnic to offer financial support for this student.

Regardless of how abhorrent this idea is, anxious parents may want to perform risk transfer in the event their kid enters a Polytechnic. 

From a solely mathematic perspective, an actuarial scientist can calculate the difference in human capital accumulation for the Polytechnic versus JC cohort. We do know of two facts about how a polytechnic education would affect the balance of one person's human capital:

• 80% of JC students qualify for local university as opposed to 20% of polytechnic students.
• A Local University graduate earns 50% more than a private university graduate while paying much lower fees.  

The question is: If some insurtech company launches Polytechnic insurance, would kiasu parents buy it?

There are some analogues in the insurance world. Tan Kin Lian is probably more proficient in how insurance products are being built, but I can think of how to model Polytechnic risk. 

One model treats polytechnic education (mathematically - I'm not being unPC here) as a critical illness and pays off a lump sum to parents who need to prepare to send children to Australia after the child enters Poly. Another can model a disability payout and pay a monthly fee to offset school expenses until the child's salary exceeds $3,600 or enters a local university. To prevent adverse selection, the actuarial scientist can use PSLE scores to determine premiums and may even insist on a "bribe" that parents will pay their kids if they qualify for a JC program. The idea is that in each risk pool, parents with kids in JC programs will "compensate" parents with kids in Polytechnic programs. 

( Some blockchain enthusiasts will also note that with government data exposed in oracles, a smart contract can govern the payouts. )

The resistance of this idea is that MOE will get upset at anyone who sells this insurance as there is a strong policy objective to equalise outcomes for Poly and JC education. But this is not a fair objection because if Poly and JC outcomes are indeed equalised and parents have no hang-ups, then the value of polytechnic insurance premiums will be zero anyway. The business will fail. 

As such, this is a powerful signal that can be monitored to view how unequal our society is.

Like every polite crowd, I think one of my ideas has received much more support than the other. 

I leave the reader to guess which one is more popular.  

  

 

Nothing can save you if you lack conscientiousness !

 

Two previews ago, I got a pretty smart attendee who wanted to know whether my investment courses are good for students who lack the ability to deal with detail, and may not be able to focus in class. Each signup earns me almost $1,000, but because my investment portfolio depends on how good my students are, I told him that my course is unsuitable for such a person because this person is not conscientious. 

Investment courses require attention to detail, some mathematical aptitude, and is, thus,  a function of two things - IQ and conscientiousness. You need to combine your smarts with the ability to delay gratification to enjoy the fruits of your investments.

Investment course trainers are never worried about students who lack conscientiousness because conscientious people will self-select to study investing.  

Anyway, I've been sort of obsessed with the idea of conscientiousness for quite a while because I strongly believe that anyone who can crack the problem of conscientiousness would be able to become a millionaire many times over. In fact, I think a lot of gurus who claim that kids can be taught grit, perseverance, and the ability to delay gratification, are already making millions of dollars without really channelling academic theories that are peer-reviewed and proven to work across different contexts. 

To really get a grasp of all these attempts at hacking the human mind, you can read Jesse Singal's book entitled The Quick Fix that highlights the crisis faced by psychology academics because a lot of studies published by famous academics are not getting replicated and verified by others. Power posing by Amy Cuddy is a particularly infamous study that a local guru has championed but now getting debunked, ruining the dreams of folks who want to fake it until they make it in the corporate world.

Another academic Angela Duckworth, the academic who discovered the academic definition of grit, is also currently under fire, but that's really not her fault. Grit, which is composed of a person's ability to persist despite hardship and maintain their consistency of personal interests, was initially found to play a large role in personal success, now has been discovered to lag IQ by a factor of over 10 in determining academic success. 

Sadly the idea has taken a life of its own in mainstream media and hardworking academics have tried to play grit down as it is too similar to conscientiousness. 

Right now, millions of dollars await anyone who can crack the code of conscientiousness and design an intervention that exists as a magical elixir to make your kids grittier. 

This is exactly what I did today back in NUS. 

I signed up my son Durendal to study under the NUS Psychology department  Unbeknownst to the academics, this study is consequential for my kids, as it will determine whether they can handle their legacies while I am still alive. 

If you are a parent with kids this age, why not volunteer for this study? 

I'm super proud of my alma mater for working so hard to crack the conscientiousness puzzle.

But I get dibs on starting a business on this!

Happy New Year ! Cautiously optimistic about 2022

It's the first day of 2022 and I've already gotten my share of silly adventures. Last night, I gathered with a few financial influencers to attend my first "CPF Interest Party" where we celebrate the crediting of interest into our CPF. Throughout the evening until countdown, the CPF website was down for maintenance so I was only able to check this morning.

I did not start the New Year on a particularly good note. We left the party at around 1am, I tried to take the MRT home but it terminated after 1 stop so I got stuck at Botanical Gardens. Then I took a rest at Macdonalds Serene Centre to get a drink, then call for a grab car but there were no cars available at 2am in Serene Centre on Grab or Gojek. 

Initially, I thought I could read a magazine until 530am and then take public transport home. 

I finished the latest Economist at 3am and then realised that I have nothing left to do, then I realised that I had to take a leak but there were no toilets at Serene Centre that are open at that time. Staff said that access passes are only for themselves. Half groggy, I walked over to Adam Road Hawker Centre to relieve myself. 

After that, I realised that I might be too old for this shit, and I might fall sick if I waited for sunrise to get some sleep. So I walked along Bukit Timah Road, walk across Hwa Chong Institution and kept a lookout any passing cab. I thought if no cab showed up, I'd be able to get a teh halia at Beauty World. By then my phone has lost all its juice.

In the end, I found a cab at 4am. I hiked a fair distance by then. 

I got home and fell asleep at 5am.  

Hopefully, the financial markets will be less bungling for me in 2022. 

1) The biggest jackass move this year was putting 37% of all my revenues into my CPF voluntary contribution. That made 2021 quite difficult to handle as my training fees had to feed into portfolios built by my student. Any amount left had to go to the $15,300 Supplementary Retirement Scheme contribution. 2021 felt surreal because there were moments, I felt I was farming my dividends from REITs into my CPF account.

2) The combined moves paid off today when the interest was credited into the CPF account. But I will do things differently in 2022. A friend suggested that I put it in stable coin yields farming and earn an interest rate on my holdings until 2022 December before extracting it for tax management purposes. This sound like a decent idea. 

3) Business revenue for 2021 has been down more than 50%. The pandemic has made the investment training business more competitive as barriers of entry dropped once everyone got online. I don't see things improving in 2022, but I hope I get to launch a new product to sustain my current lifestyle. The thought of failure has loomed large in my mind and I have been making enquiries to smaller law firms since I have cleared all my weekday normal office hours. I like my life, don't need the money but I have enough self-awareness to know that I may do something destructive if I stop exchanging time for money.  

4) While the revenue has been down, as a sole proprietor, I made more milestones than if I were in the Employee quadrant. I worked with iFast to launch my introducer service and someone stumbled into a regular segment on iFast TV.  I'm producing a lot more videos than before. 

5) A more detailed writeup will be made on the Dr Wealth Blog on portfolio results. Student portfolios did 13.52% this year compared to 12.92% for the STI ETF. I cannot emphasize how hard it is for factor models to beat the index this year as the STI ETF now has 7 REITs and is fairly formidable as an opponent. Do note that we do take less risk with a beta of 0.8. Factor models also missed out on restructuring efforts as laggard Temasek counters caught up. My students have now beaten the STI ETF three years in a row. 

6) Of course 13.52% returns are not too shabby if you consider the fact that I leverage all my student portfolios for myself. 

7) Thanks to the pandemic, we could not travel, so we did not spend a lot of money. I spent $15,000 on home improvement at the end of the year. 

8) My mum's angioplasty was financially the riskiest event we faced, but we took 3 months of dividends to offset the costs. This is a serious privilege that has been built up by my dad for the past half-century.

Still, 2022 is starting on a fairly good note. 

I think 2021 was kind to me although I took steps to make it tougher to shore up for the future. At least all that work in 2021 was supposed to lower my tax bill so, due to a drop in revenues, I expect lower expenses this year. I've got a solid plan moving forward to survive in my business.  

Let's see what this new year can bring for us.