I Hope Your Heirs Want to Manage Your Dividend Portfolio

 

If you have been following what's going on in the financial blogosphere, I had the pleasure of rebutting every single point except one that was made in Investment Moats on the Dividend income approach. I strongly suggest that you go read that article if you wish to appreciate this post. 

You can follow this link.

I left the final point for a full-blown blog article because it is a good point that simply cannot be refuted by a well-written Python program or a stream of data downloaded using APIs. 

Points like this are what make personal finance personal. Readers are free to see whether the point resonates with their personal experience.

Logically, the ninth point of the original article does not really make a real point. 

When an investor dies, the beneficiaries of his will get control of their assets and will deploy their assets in any way that they please because it is now their money. As it is now their money, they will find a way to manage it using whatever means that they already have. This can mean putting it with an investment expert, or financial advisor or punting it in the cryptocurrency markets.

The real point Investment Moats is driving at is that a stock-based dividends portfolio has many parts and idiosyncracies, so it is more likely that the heirs will not be able to manage it in its current form.

If we take this as a real point, then I think Kyith successfully touched on one of the fears of a real-life dividends investor. In such a case, I don't even need to talk about my kids, I'm pretty sure my wife and my mum will struggle with this if anything happens to me.

This is what I think a dividends investor reader can do if this point really scares you:

a) Don't Die

The first point is obvious, if you don't die, you don't have this problem. 

But your days being alive need to be put to good use. The moment your kids turn 18, you open a CDP account with them and train them on dividend investing. If they want to shift strategies then they should educate themselves first. For me, as early as any family can get a CDP account, they need to know how dividends work.

( IMHO, Dividends are not the best way to pass things down, I think a residential property is better. But I don't want property ownership to prevent my kids from getting an EC next time they start a family! )

b) CDP is quite good if you know how it works.

Your heirs should know your CDP number and allow themselves to be guided by lawyers on how to transfer the stocks out of your account if you do die. When my dad passed, I moved all his stocks to a joint CDP with my mum. The transfer fee was $10.80 per counter and we had 50+ counters. I remember it was really smooth and the counter staff said I was one of the smoothest clients they had ever seen.

I think this technical detail from probate to CDP stock transfer is very smooth and elegant, but I am open-minded to understanding how funds managed by an FA can be moved in a similar way.

c) Nothing wrong if your dividends counters get sold by your heirs.

Every generation works differently when it comes to managing money. I was the one who shifted my dad from real estate to dividend stocks. My kids will have a different way to look at wealth. 

Just because you like dividends does not mean that it's the best for their generation. 

Similarly, your heirs should be free to sell any property to deal with more immediate lifestyle needs.

My wife should sell the house to educate my kids.

d) If there is anything to pass down, prioritise financial education first

I'm not trying to sway readers to send their heirs to attend my training, but there is definitely room to pursue a financial education in a tertiary institution if they are expecting to inherit wealth. But they need to know that they will eventually inherit wealth.

I was an only child who lived on landed property most of my life, my priority after my first degree was the CFA. My secondary priority was to get as much overtime as I can in my first job so I use my CFA knowledge.

To me, there was a lot I had to manage and I can't just outsource it to an FA. This DIY mindset is what I consider the most challenging value to pass down. My kids need to know that a 1% annual fee is the real thing that will really hurt your safe rate of withdrawal.

Lastly, I like to address the point Investment Moats made about CreateWealth8888. In the financial blogging circles, there are murmurs that Jacob's kids were not fully aware of Jacob's approach to trading. I absolutely do not think that there is anything unusual about this when wealth needs to pass on. If anything, Jacob successfully sent all his kids through a local degree program. 

That is the more important thing. 

It will take some time to figure out Jacob's finances, the final outcome may not be dividends driven.  

But I won't count his kids out. 

Q1 2023 - ERM Community Webinar - 27 April 2023

I know that I'm late with the planning and coordination of the Early Retirement Masterclass webinar, but I've been held up not just by the planning of my new course that is supposed to be out by this year, but my voice, which has been ravaged by a dry mouth caused by a hyperactive thyroid,  has just recovered.

So it is now time to conduct our next ERM Community Webinar which is customised for course participants but totally open to members of the public who want a glimpse of what we actually do.

Date: Thursday, 27 April 2023, 8pm

Registration Link : 

https://us02web.zoom.us/webinar/register/WN__smebPL7RjqXx1p7asw9mQ#/registration

We will be discussing the following topics:

a) How robust is your retirement plan?

Showcasing a new Monte Carlo Retirement Testing tool that will be shared with the community. This will lead to my greater ambitions this year to introduce more Python Jupyter Notebooks into investment training. 

b) Update on the economy and what investors should look out for

I will also be updating everyone on the economy and what I think the community needs to think about over the next 3-6 months.

As usual, I will be showcasing a lot of tools that I have created for my new course launch.

c) Performance Review

ERM portfolio performance review. We look at some of the not-so-good investment decisions we made so that we can improve in the future.

d) The ERM Q2 Community Face to face Meetup

The most important announcement details how to sign up for the ERM Community Q2 Event which is a face-to-face meeting in Raffles Place. This is a sponsored but paid ($20) event for 50 ERM Alumni where refreshments will be provided. 

I will be previewing and conducting a full chapter of my All-Weather Masterclass course, so it will be a substantial learning session, but the real aim is to see how everyone is doing since the pandemic.

So if any alumni members are free, why not come down for a friendly chat on Thursday !

Will ChatGPT disrupt the retirement planning space ?

When a pal heard that I'm developing an investment course focused on exploring finance through Python code, he expressed scepticism because he knows a trader who uses ChapGPT to craft basic code to make investment decisions. I did not bother to refute this argument because even with the best code, you still need to make the best trades, and programmers don't make the best investors.

I was unable to verify the argument yesterday until someone on the forums tried to use some keywords to generate some Python code on ChatGPT. His claim is that the code is able to simulate Monte Carlo portfolios and give a percentage of the number of portfolios that make it under an assumed withdrawal rate.

Perhaps this was a great moment for learning for me, I took the code for a test drive and it was horrible.

• First of all, the cut-and-paste process in Facebook lacked indentation, so I had trouble with the different loops in the program. Nested loops can become consecutive loops if the Python indentment was lost. I lost maybe 15 minutes sorting that out.
• ChaptGPT programs also produced stub files like a CSV file containing historical returns without really telling you how to find them. The contents of these stub files are very consequential in retirement planning, but ChatGPT does not supply them. I had to inject my own code to download data from Yahoo Finance in real time and generate annual statistics to resolve that issue.
• The next problem was logic errors in the code even after correcting syntax issues. The code would grow the portfolio using, say, 10 years of returns every year. So every retirement portfolio works in 10,000 different alternate universes because they could be getting 90% returns annually. Worse, the code sees an annual withdrawal rate as a percentage of evolving portfolio value and not as a fixed expense moderated by an inflation rate. Theses are fatal flaws.
• Finally, after troubleshooting everything, the code would still provide an uneasy number to bring confidence to any investor. I had to add an inflation generator to bring the success probabilities down. 

Ok, now let's look at the positives. ChatGPT wrote a fairly bad program, but it can be corrected to work with better prompt engineering, and about 2-3 man-hours and I'm not even a professional software developer. This can be a huge productivity multiplier for many software engineers. 

But, as it stands,  I don't think someone without a basic understanding of the domain in both finance and IT can petition ChatGPT to come up with something that they can run to make fairly important investment decisions and there should be revenue in my upcoming course.

For now, the software engineering types will have serious concerns about how ChatGPT will change their working landscape. Eventually, some untrained manager with a general degree will pretend that he can issue a prompt to ChatGPT and then he will dump the entire source code to you, claiming that a huge bulk of the work is already done on your behalf. All you need to do is to 'operate' it. 

This is going to be a real problem in the workplace because many MBAs are poets.

Getting to run is already a chore. Troubleshooting the business logic will take more time. Enhancement to make it viable as a product will take even longer. 

This nifty Monte Carlo tool will be refined and given to folks in my ERM Community. Hope this can provide them with a new tool to test the effectiveness of their retirement portfolio.

Using 10 years of data, a 60/40 portfolio has a 34.2% surviving 40 years based on the 4% withdrawal rule.

The value of being consoled in market downturn

As I've been writing code to turn trading ideas into an advisor that any student can be trained to run, it is now time to review some financial advisory practices. 

For this new course, I've chosen a fairly high bar to beat. 

The 60/40 portfolio is a hard benchmark to beat and, in reality, more clients should be actually put into this portfolio rather than expensive products like ILPs. Bet recently as interest rates have gone up, the 60/40 is not a good place to be. I think at this stage, even the reputable FAs will kick in a process to up the level of hand-holding for the customer who is seeing double-digit percentage losses in otherwise safe bond ETFs.

For those who hand over their wealth to experts, maybe they actually enjoy the hand-holding, I will not fault that. 

But what if you expect more from the industry? 

Well, the truth is beyond hand-holding, the best advisors would rather you stay put. There are strong financial incentives to sit this out. There is a strong belief that the 60/40 portfolio will rebound.

For folk who DIY, there is no one trying to stop your funds from fleeing, so there is the possibility of learning about market edges that can do beyond the 60/40 portfolio. 

Based on my investigations, traditional portfolios are 60/40 and can produce one unit of return for two units of risk, which is admirable. But armed with a number of market edges, it is possible to do better, maybe 1.5 units of risk to 1 unit of return, or even 1 unit of risk to 1 unit of return. This would generally higher ETF turnover, but these days we have very cheap online brokers to play with. 

Even if you do not achieve these gains, you are in essence earning your own commissions and fees, which is not insubstantial.

I won't spend too much time talking about what sorcery I am working on. I'm still writing out the preview of the sales workshop.

I like to leave you with some final thoughts about financial advice with respect to the value of empathy and consolation. To do that, I subscribed to ChatGPT and got it to write a consoling email to a client who lost money. I added a nice touch on interest rates.

Dear [Client], I'm sorry to hear that your portfolio has experienced losses over the past year. I understand how frustrating this can be, and I want to assure you that I'm here to help you navigate these challenging times. While short-term market fluctuations can be difficult to weather, it's important to remember that investing is a long-term game. Over the long run, markets have historically rebounded from downturns and provided investors with solid returns. While we can't predict exactly when this will happen, I believe that we can remain optimistic about the future. In addition, it's worth noting that high-interest rates are unlikely to last indefinitely in this economic climate. While they can present challenges for investors seeking yield, there are signs that interest rates may begin to decrease in the coming months or years. This could present new opportunities for investors as market conditions shift. In the meantime, please know that I am constantly monitoring your portfolio and making adjustments as needed to ensure that it remains aligned with your goals and risk tolerance. If you have any questions or concerns, please don't hesitate to reach out to me. Thank you for your continued trust in me as your financial advisor. I look forward to working with you to achieve your financial objectives over the long run. Best regards, [Your Name]

Farewell to CreateWealth8888

 

I've always believed that if I ever achieved REAL retirement, where I no longer have any hustles, I would reinvent myself as a troll on CreateWealth8888's website. He's always had issues with my investment ideas and this was apparent to anyone who knew us both. But he never articulated these ideas in depth so I was never able to rebut him.

The truth is this: He did succeed in irking me quite a big deal, but in his own passive-aggressive way, he never provided an opening that would be making attacking his ideas look good. 

So over the years, I have fantasised about giving him a piece of my mind:

• He lived in a different generation and should not compare his circumstances to younger bloggers. If anything he needs to be benchmarked against others his own age.
• His ridiculous fixation with Keppel Corp flies in the face of prudent diversification and would set a bad example for younger folks who can apply his technique to Tesla or even LUNA in the future.

I don't think that if a clash were to really occur, I would be assured of winning the hearts and minds of the public. I might have an edge in logos, but he will hands down win in pathos. I remember speaking in the same panel as him under BIGS and admit that his pull as a speaker was very strong because of his earnestness and emotional appeal. This is one man sharing his investment story totally unbiased by the financial industry. This almost never happens in a financial seminar.

When I visited his wake yesterday, I realised that CW8888 was vindicated by several things which make him a great role model at the end of his life :

• While it is imprudent to focus on Keppel Corp, it did perform fantastically in the final years of his life. 
• All his children have managed to earn local degrees and have grown into successful adults.
• He disengaged from work at 60, was unapologetically so, and enjoyed managing his investments right up till the very end.  

Jacob Ng has departed the world a big winner.

If the cosmos is willing, I will definitely clash with him if we ever meet again.

I may need to plan for Involuntary Retirement

One medical issue I'm grappling with is that I have dry lips, which means I'm not producing enough saliva when speaking. Dry lips make every lecture I present a chore. Beyond one hour of speech, I have difficulties as my throat becomes dry. The use of lozenges like Fishermen’s Friend can backfire as it makes your throat even dryer. 

I do not know whether my dry lips come from Graves' disease or poor blood sugar control, but I can say that I'm already on medication to resolve this problem. The question is when these dry lips can be solved which can take a month.

If I can't resolve this within a month, I must retool how I conduct courses. If I fail to restructure how my class will be conducted, it's game over for me, and I will ironically be involuntarily retired. I won't be able to teach my ERM class anymore. I also can't find a job that relies on my tongue, which I spent decades honing on public speaking platforms. 

I want to discuss some steps I am taking in case the worst scenario happens this year. 

As expected, my finances are the least of my problems, but I have already started planning for having no income since the end of last year. I've expanded my cash reserves to hold one year of expenses and extended it by three months using the dividends earned this month. For me, the problem is not eating into my capital but being unable to grow it for the following year. 

I can return to the D&D gaming circuit, but sadly the hobby is undergoing massive changes as a new edition is launched next year. The bigger problem is my social life. If I no longer work, what kind of hobbies will I need to fill my time as I get my voice back? I'm also not sure whether I am as sociable when socialization comes without any agenda other than having fun. Nevertheless, the demand for DMs is as strong as ever, and so long as I'm willing to run games, I should be fine. 

The final point I want to make, my biggest fear is what kind of books I will read and what frontiers to explore when I no longer earn anything from work. My favourite books are those on office politics, wielding power, and climbing the corporate ladder. As an employee, I used to devour any of the management books I could get my hands on. It gave me a competitive advantage as I could anticipate changes in management work like the Balanced Scorecard. 

You can guess what happened after that - Financial Independence was the best power move in any office environment as you no longer need to suck up to anyone or fight for the best appraisal. 

You may think that I can subsist on finance books. That is actually quite hard. A lot of finance books are not written with the real objective of helping the reader make money. Value investing, when badly written, are tales of investment victory using esoteric knowledge of specific companies that cannot be transferred into another market context. While I prefer quantitative works, they are pages filled with equations and rarely supplemented with source code that allows verification of the authors' assertions on the stock markets. As an investment trainer, I help clients bridge theory and practice. 

Going beyond one finance books is a big challenge because a good book will give your some direction to code a back tester to verify what the author has said. So reading is really just the easiest step in a long journey to understand how markets work. 

If you leave the realm of money but still wish to engage in personal development, all that remains is self-help. These books are touchy-feely, and I've already read most of the ones which are backed by research. 

This leaves me with philosophy and books where the author engages in intellectual masturbation. While I try to read as many philosophy books as the Economist recommends, I think some philosophers need help. Why do you need so much prose when the ideas can be condensed into a paragraph? Maybe I can get ChatGPT to help me with summaries in the future.

I guess if I really want a solution to my problem, I will need to read deeply into the history and biographies of famous people. I've not explored famous people's stories beyond Erwin Rommel and George Patton. 

And of course there is fiction, if only to finish the Game of Throne series if it ever comes out. 

More medical misadventures

 

One of the better things I did was to become the resident troll of a BBS called Lothlorien. Basically, it was a gathering place for geeks and outcasts who owned a decent modem. 

Last Friday, we had a small gathering and they straight-up told me that I lost a lot of weight and this could mean that I might have cancer. Fortunately one of the gang is now a doctor and we reduced this to the possibility that my hyperactive thyroid has relapsed. This was really helpful as I have a medical appointment that afternoon to get my problem resolved once and for all. I've had dry lips and lost 4kg of weight and get tired very easily when exercising. 

Unfortunately for me, I was the last patient at the government hospital on a Friday evening and there was no way anyone could administer a blood test and wait for the results to be out. My doctor was apologetic and suggested that I go into A&E which I was highly reluctant about because of the long waits and the possibility of getting something else if I get hospitalised like pneumonia. So sadly, even though I suspected I had a relapse of Graves disease, I can't confirm it and cannot get medication.

It was at that time, I had an epiphany. I told my doctor that it may be time for me to go private and there is not much a public hospital can do for me at this point. My doctor kindly a very long letter to summarise the situation I was in.

The question is how can I get an appointment in the private clinic on such short notice?

I was desperate so I decided to pop in early in the morning without an appointment. The clinic is packed, but if any patient is late, I will get to see the doctor. 

The private clinics are truly very efficient. 

Within 10 mins of reading what my govt doctor wrote, she eliminated the possibility of Diabetic Keto-Acidosis, which was such a huge source of relief. They sent a runner down to draw my blood and I was out of the clinic with my thyroid meds by the afternoon.

Was this really expensive?

I think the $400+ plus consultation and blood test was cheap because it got to the bottom of what I've been experiencing for the past half a year, where I was feeling extremely tired for no reason and felt that I lost my zest in life.

I think what happened so far is really the power of social capital. I'm glad I have a doctor friend who can just help me narrow my problem just before my official consult. My introduction to the private sector was through my ERM student who is an insider in the private hospital system and has spent months asking me to switch to a private clinic.

I'm finally convinced that a significant part of my dividends will end up going to a private doctor. 

If my meds work and I get my smile back, I'll stop contributing to the queues in the public clinics.

Freeze eggs also men's fault ?

Some readers may remember that I wrote an article on egg freezing some time ago. You can read the article by following this link. In that article, I discuss how enabling egg freezing puts men at a disadvantage because it has the effect of making young women temporarily unavailable. When women are confident enough to freeze their eggs, they will leave the mating pool and reappear at an older age. In that article, I urged policymakers to approve egg-freezing, but make it easier for men to marry foreign spouses as a counterbalance.

Recently, a pal sent me this article to read (link). 

It is now time to review the concept of egg freezing.

Fortunately for policymakers, a medical anthropologist will be publishing a book that details the kind of person who will go as far as to freeze her eggs. Because the procedure is not exactly cheap, it comes as no surprise that women who undergo this procedure are high-achieving professionals. 

What comes as a surprise to me is that 91% are single or in tenuous relationships, with a significant one-third of women having no previous relationship experience. Egg freezing is, therefore, some kind of plan B. 

This leads to the anthropologist taking a potshot at men!

She blames egg freezing for this thing called the "mating gap".

• Men are reluctant to marry high-achieving women.
• Men are immature and not ready to start families.
• Men are ageist. 

This blog is an apologist for men,  I am after all the BBFA Senator. 

Now, I'd like to refute each point one by one.

First of all, I admit that men are reluctant to marry high-achieving women. But you also need to note that women also despise low-achieving men. I'd like to argue that between men and women, women are actually pickier. You are free to enjoy my article on unusual pairings here.

Secondly, not all men are immature and not ready to start families. Only the men who are willing to consider a relationship with an egg freezer are immature. Maybe a women's desperation to start a family forces her to pick an unconscientious male. 

Thirdly, I think men evolved to prefer younger women, you can't socialise this away. It's ridiculous that a medical anthropologist will blame guys for rejecting older women when it's probably more likely that women will reject men with low economic resources.

Ok, now we need to see how all this new data changes my view on egg freezing.

I think egg freezing should still continue to be approved because it can generate new investment options. But we need to have a clearer view of the sorts of women who freeze their eggs - the odds of harvesting the eggs one day is very rare and it's not because of medical viability. If you can't get a relationship in your 20s, don't expect a relationship when you are older in your 40s.

Now there is also the fear that the medical industry will promote egg freezing as some kind of miracle procedure that will never solve the relationship issues. Instead of freezing eggs, it may be better to invest in some US Office RETI counters for double-digit dividends.

Finally, I hope that some people will find this an entirely ridiculous idea. 

There are men who are uneducated. 

There are men who are short.

There are men who have no money.

I don't see these guys masturbating into a Tupperware and storing it in the freezer. 

If no woman wants us, we just earn more, pick up some Thai, and try our best.

That is the BBFA way.

Personal Update

As I do not have much to write about, maybe it's time for a personal update.

a) Financial markets

As I stopped leverage aeons ago, I was unaffected by developments in the financial markets. As interest rates rose, my REITs and Business Trusts shrank, but my dividends were not hit that badly, so I can afford to hold. If I do have a worry, it's the US-based office REITs, but I'm well diversified and don't have double-digit yields this year. 

My interpretation of bank failures is that they may be a signal to the Fed to stop raising rates. As I'm not really vested in the US, my concern is about contagion to local banks. But that risk is also small.

I don't think local dividends investors will need to really be too concerned about the markets. 

Just stay calm and collect dividends this month.

b) Career

I'm ramping down my work in the law firm and focused on building my new program. I'll probably head to the office to buy everyone snacks before I go off. 

The funny thing is that I've tried going for a few interviews weeks ago and thought employers decided to give my profile a pass, but for one job offer, I seem to get into the advanced stages.  While monetising my time during the day is no longer my priority, I have decided to press on without really being vested in the outcome. 

c) New Course

 The bulk of my effort has been put here and the past 3 weeks have been exhilarating. As data can be fetched from Yahoo Finance, I'm not longer limited by the availability of Bloomberg terminals and built up 4 robo-advisors and 4 back-testing tools to optimise and review some trading ideas from various books I've been reading.

The outcome will be an investment course that teaches students how to create and tune Robo-advisors through the use of some code I've written in Jupyter notebooks. The backtests are very successful after some tuning and my all-weather portfolios can get a Sharpe ratio close to 1 in the tough period between 2018 and 2023. More interesting is that the four strategies are almost uncorrelated from each other. 

So I've basically been coding in Python and creating Power Point slides for the past 2 weeks. In time, I might do an ERM Alumni event that will preview one chapter from my new program. Some ERM Alumni are interested in a networking and makan session, so I might be talking to Dr Wealth staff to see whether this is financially feasible. 

Anyway, even if the new course may not take off immediately, I should be able to launch my personal hedge fund with a small portion of my capital in April. 

d) Hobbies and Leisure

I guess I'm lucky because I enjoy coding robo-advisors and back testers, so I have no real need to put in any work into my hobbies.

But I'm happy to say that I have watched the Dungeons and Dragons movie last night. I think the D&D brand was cursed with really bad movies in the past so my expectations were not high. The latest D&D movie was a blast that is fun for new fans but full of fan service for longtime D&D players.

There is some demand for DM work and some folks are asking me to run a game. 

I will see what I can do.

Pivoting from Wealth to Relationships

I consider myself extremely lucky, as after my last post, my old JC pals got me out to cheer me up this week. My mum has recovered, but this is a grand opportunity to review my priorities. 

Almost as if I needed another sign, I just received heartbreaking news that a secondary classmate of mine is currently in a fight against an aggressive form of cancer. 

One of the most challenging issues my generation will have to cope with is when we should pivot from emphasising our wealth towards pouting more effort into our relationships. In your 40s and 50s, wealth is a big deal as you need it to thrive in Singapore society, but you soon reach a stage where you find less need to flex your economic status but want deeper connections with loved ones because that’s the last thing that matters in the final stage of your life. The financial equivalent is when a person can begin the process of decumulation or the gradual spending down of wealth they have accumulated. 

As we think deeper, we realise that friendship is a complicated topic, because all relationships need cultivation and in earlier stages in our lives, there are more important priorities like financial security or starting a family. As a consequence, men suffer from the lack of friendships the most because we get penalised for looking vulnerable and tend to keep our weaknesses to ourselves.

When thinking about this pivot, the first question is when should we shift from thinking about wealth accumulation to the accumulation of rich personal connections? I can't help but think of confirmation signals in a trade. When creating my new course, I often have to backtest trading algorithms. One technique I employ to confirm a downtrend is to observe that a stock has been falling for the past year and also been falling for the past month. Dual signals are more robust than just one, and this can be easily put into programming code.

The general rule of thumb is if you see your parents getting older and becoming frailer or losing them entirely to old age, and you witness folks in your generation falling sick, it is time to consider a pivot. At least from what I have observed, both signals have come true many times over the past year.

The second question is how to pivot. Which relationships to cultivate? 

The book The Good Life, which contains research on the lives of volunteers, provides a very functional view of what good friendships are like. Friends are there to diminish your hardship and reduce the stress of existing in Singapore society.

This is an exquisite way to construct a filter and decide which relationships to cultivate. Which friends are there for you when you face a crisis? Which friends have a sense of humour and provide levity in hard times? If you have friends who can solve your problems and make life easier, you need to cultivate these relationships.

But note that if you agree with this utilitarian view of friendship, you should also try to be there for your friends while in a crisis. 

If you apply this idea to practice, you may conclude that the wealthy may struggle with their friends. People will always be available when there are free meals and parties. This is not a valid test. But only in times of crisis can you figure out which relationships are worth cultivating. 

[On a personal note, I’ve been grappling with building my new course and coding almost everyday. If you want to know my views on the economy, I guess you should be attending my course previews for now. ]

 

A Moment of Clarity

 

As we get closer to the close of the first quarter of 2023, it’s been dawning on my that my work in the law firm is not going bear fruit over the short term. The life-energy exchange of time versus money will be quite low for some time as this is a career that requires a long term commitment. As a consequence of this, I began to explore a different working arrangement with the law firm for the past few weeks. In this arrangement, I will return to go full steam as a financial trainer with a new course in the works but will go to assist the firm in periods when the work gets heavy for an hourly wage. My comparative advantage is that I’m tech savvy and faster with compilation of bundles and I can still do fairly competent research.

Everything is in the air as we head into March until my mum fainted from low blood sugar last week and hurt her hips, so now I’m spending a larger bulk of my time running errands for her and buying her meals. 

While my mum will recover in about week, I can help thinking that this is a warning that such events will happen with greater frequency in the future, and I will need to shift my career goals towards more time flexibility. 

So for now, I will not renew my practice certificate this April. 

My focus will be coming with a new training programme with all my spare time, as I can do this at home. This programme will involve quite a lot of coding as I try to come up with a proper system for students to create their own robo-adviser.

My secondary focus is to take this opportunity to spend more time with my mum. I want to prioritise travel with her while she is still able to do so. 

I am definitely disappointed for striking out a second time in the legal profession, but I’m already 48 and mid-life career can produce more disastrous outcomes. I talked about this on my blog initially because I want to make it harder to pull out this second time. 

Right now nothing much has changed and I will assist and direct legal business to firm I’m working with. I have a few job interviews in progress, but I will not prioritise them for the moment. 

In spite of this disappointment, it means that I’m free to hang out on most days again, and I’m back to being an investment trainer. 

More on this future course will be coming soon, I’m only 25% done with course materials.

Hopefully, I will be able increasing the frequency of blog updates after this. 

Loyal readers can let me know what you want me to talk about next.

 

Spiritual influences of my approach towards FInancial Independence

Generally, I try my best to avoid discussing religion on this blog, but recently, an opposition politician and "Intelligent Vaxxer", Goh Meng Seng, shared something hilarious on social media.

The idea is that this person somehow suffers because he has attained FIRE but does have a grasp of the meaning of life. Goh Meng Seng then goes on to give a lesson on the Dharma. 

Generally, I would refrain from giving any credit to anyone on social media who claims to have a better idea of the meaning of life. If someone's meaning of life is, for example, constantly losing elections and getting POFMA'd, I will not judge what gives their life purpose. 

Instead, I want to point out in this post the spiritual influences of my version of FIRE. 

I have personally gone through many stages of spiritual evolution. When I was young, I was hunted by Christian Fundamentalists in primary school for my D&D hobby. A teacher did not like the cover of the 1st Edition D&D Player's Handbook and thought I was a Satanist. I started out with a very negative impression of religions, especially those that do a lot of preaching and proselytising. I don't alike anything that comes between me and D&D. Consequently, I became a staunch Atheist. I spent a decent amount of time being called up to the Office of Student Affairs in NUS for anti-religious troll posts. Multiple Christian groups complained about my exploits as an undergraduate. 

As I got older, I realised that Atheism itself is a position that requires faith in the idea of the non-existence of God. Subsequently, I also encountered Atheists who were unreasonable and no better than the Christian fundamentalists who oppressed me as a kid. Over time as I got older and more conservatve, I realised I could ally with Christians because they defended the same family values I hold sacred from progressive and woke forces in society, Social Justice Fundamentalism is magnitudes worse than any religious inquisition I experienced as a youth. Also, cell groups even play D&D. 

So these days, I've softened my position. 

Today I identify as a free-thinker. To me, human brains evolved with the capacity for faith because otherwise, it would be tough to live as the final outcome is always death and not everyone can figure out the meaning of life as Goh Meng Seng has done. This evolutionary adaptation of the brain is what humanity has to cope with the suffering of being alive.

Also, I have a deep respect for religion as a community. It's an excellent way for people to get together. I even tell young people to have the flexibility to convert if they really desire to find a life partner. 

Eventually, I found a trove of wisdom that can assist us in attaining Financial Independence.

In my second book, Harvesting the Fruits of Prosperity, I appropriated the concept of Nirvana to demonstrate the freedom a FIRE aspirant can attain if he can live on his dividend payouts. It becomes the close analogue of the cessation of suffering that Nirvana can grant. In my book, I consider the crossover point where dividend payouts exceed monthly expenses as the attainment of Financial Nirvana. Another snippet from my writings is shown here :

Of course, I went beyond employing Buddhist concepts to guide the FIRE aspirant. We should not forget that much progress came from the Protestant work ethic. The following snippet is taken from my second book, which channels sociologist Max Weber on why you must earn and work hard towards Financial Nirvana:

In hindsight, I would have spent more time looking at religion and philosophy to make the journey towards Financial Independence easier for readers of my works. Incorporating religious and spiritual concepts in my writing gave it much depth. It showed that deeper spiritual meaning can come from the pursuit of financial goals and can unite differences in philosophies.

I was pleasantly surprised that after publication, Christians gave feedback that they found my writing very spiritual, and millennials found it very woke. 

I guess regardless of religion, our money struggles are very much the same. 

The Idea of "Two Singapores" is not a new concept. But I think this idea is.

 

Leader of Opposition Pritam Singh, I think the only SMU JD in parliament, went viral when he spoke about Two Singapores emerging if we fail to rein in inequality. 

Interestingly, this idea has been introduced previously by yours truly. 

I wrote Growing Your Tree of Prosperity in 2005, and I've taken a screenshot of a page I wrote about 18 years ago. I'm sharing another snippet of my writing.  

Having two Singapores is such an old idea. There is no novelty in talking about it. And in the SMU JD program, novelty earns you an A+ in-class participation. 

Singaporeans should consider themselves lucky these days if there are two Singapores. We can solve the problem by taxing one Singapore and distributing it to the other.

The problem arises if we have 20-30 different Singapores with their own social norms and circles. Policymakers will have a brain aneurysm trying to balance out this kind of society. 

There is a certain fractal quality of income gaps in any society. Policymakers can target broad differences, but the finer societal differences are impervious to policymaking.

Take, for instance, the salary gap between polytechnic and university graduates. We're focused on that today.

But it gets more interesting. If you zoom into different local degrees, there is a gap between non-professional and professional degrees. You can google the massive difference in salary between an NUS graduate in Art, Media and Design versus a Law or Computing degree.

It gets worse. 

Within a degree qualification, major gaps exist as well. Compare lawyers' salaries in an international firm versus a big 4 versus a small firm. Look at the difference between what a Specialist earns compared to a GP. There might even be an intra-group salary gap.

As you zoom in on a population, you will find a gap between different sub-groups within a population. As you zoom into these sub-groups, you may find more gaps. If the gaps worsen over time, it may be because the premium knowledge workers are getting higher regardless of which sector you are in. 

If there are many Singapores, Then as a policymaker and individual, you've got a severe problem. No matter how much training, you'll always be in a collective with vast salaries and income gaps. 

If there are two Singapores, one Singapore is happy and cannot complain. If we have 32 Singapores, only one Singapore will be happy at the pinnacle of society. Does taxing the upper echelons solve that problem?

Economic intervention is something that MUST be done. But it will only solve the problem if we also attempt to change the mindset of citizens, which is hard and involves many fine-tuned interventions. Moving a rich-kid primary school to Tengah will just be the beginning. 

There might be one, albeit ugly, alternative.

Singapore stops seeing itself as a country but a temporary place to earn money. So we take in foreign talent, let them work and try to succeed in a low tax regime, but eventually, most of them will go to a cheaper place to retire. Some foreigners will make it to have children, but they will eventually be tested because they might not make it to produce the next generation. Future immigrants may drive real estate to levels the previous generation will not be able to handle. There's a certain perverse justice and fairness in all of this since most of us are descended from immigrants anyway. 

If you are an opposition MP or PAP supporter who wants to mine future talking points in Parliament, do follow the links to Amazon to buy my book. 

I'm also available to give speeches to your party cadre.

  

How can one stop being a simp?

 

One benefit of having the occasional coffee with readers of this blog is that their questions often lead to new articles. This time, a loyal reader wanted my advice on stopping being a simp. During the session, I could not really come up with a good answer, so I thought I'd give a better answer here.

For one thing, we can't really use a dictionary definition of a simp - someone who is excessively sympathetic and attentive towards a person who does not reciprocate in return. I think this is what I observe of simps for the purposes of this blog.

• It's generally a guy who simps for beautiful women. Ugly chicks don't get simps.
• Often the love languages expressed are acts of service and gifts. Beautiful women do not really value the other forms of love language from their simps.
• To rule out married cheekopeks and sugar daddies who do almost the same thing for different reasons, simps are generally not on the high-income scale and relatively young to middle-aged.. 

So if we take this rules in, simps are young to middle-aged men who give presents or perform services to hot women who are out of their league, losing valuable economic resources but not getting any reciprocation in the process.

Once we agree on this definition of simps, we will be able to give advice on how to stop being a simp. 

a) Climb the economic ladder.

My best advice is to focus on climbing the economic ladder. Make yourselves better and get into the league. The problem with simps is that they are on a lower rung on the economic ladder than the position the women are in the looks hierarchy. 

Readers of my blog, remember this iron-clad rule :

For guys, love is rarely unconditional.

The advantage of being a guy is that you can get into a rigorous habit of self-improve to climb the ladder. Women's positions are primarily tied to the looks they are born with.  This entire blog is written for the incels ad BBFA who want a better a status in life. 

You can also read this article on modern dating for further inspiration.

b) Expend effort on someone ugly or more amenable to accepting you

An example of how a poor dating market works is SDU for folks in my generation. In dating events, guys and girls talk among themselves until some pilot or hot chick shows up. Then all the women gank the pilot, and all the guys flock around the hot chick. The problem is the pilot, or hot chick is actually a plant by the dating company for business development reasons. They are actually looking for something other than a partner. ( Some just want to sell ILPs to simps )

The situation would be better if guys picked a women who they think, based on his own capabilities and earning power, can credibly win her love. This means going against centuries of the genetic programming of overconfidence and picking someone more plainer looking.

One way is to date older women. Another dating market that repels most men is women who are very successful in their careers.

c) Go for foreign women

The problem for men is that it's within their power to climb the status ladder. But this means that every guy will try to jostle for position on the totem pole. Only some guys get to be on top. If it's not feasible to improve yourself to rise through the ranks of society, then take all your toys and play in a different field. The truth is that the average guy in Singapore can project a lot of economic power if it's wielded in other parts of South-East Asia. 

Lastly, I just want to say that it's not easy to stop being a Simp. So much genetic programming will need to be undone. I'm not even sure the economy can survive if simps just decided to go on strike and start allocating their economic resources just to enjoy themselves.

If I'm in my 20s, I might also be a simp. If you push, I'll admit that I have a preference for maybe someone like Annette Lee, who is quite wholesome, funny, and sings quite well. But Annette Lee married someone who works for a hedge fund. 

This totally vindicates my article.

The Fork on the Road

For something to be defined as failure, it must humble the person who failed. If failure is just a precursor to success, then the person has imbibed a lot of shit from success gurus. 

For the past three months, I have attempted to balance a legal career while conducting an investment course, and I have realised this is unsustainable. 

An investment trainer's job is powered by optimism. We invest because we see a better future. 

A lawyer's outlook is generally very pessimistic, as we need to look out for risks and dangers when we think about what kind of advice we want to give. I find that there's very little room to see any good in others in this line of work. 

I was trying to place two large stones into my jar, but the jar was too small. And while I was chugging along, I couldn't help that I might need to discard the option before the year was over.

The question I've been asking myself is, what would the future of my career look like if I'm forced to make a choice. Perhaps I should talk about this on my blog before pulling the plug.

a) Investment training

If I stay on investment training, I cannot sustain myself with one program like ERM. Based on my projection, I will only earn between 15% of my peak this year, given the high-interest rates and low interest amongst retail investors. An 85% dip in earnings is quite hard to swallow, but I can wait for market recovery.

One way to carry on is that I have to launch a new course. I've been coding a few investment techniques and already have four Jupyter notebooks to launch a new quantitative investing course. But this is just 5% of the work, as there are lecture notes and previews to prepare. But now, I know I can launch it.

If I take this route, my legal work will be pushed to the background if I don't end it. I'm reluctant to give up the practice but may go to the office to do just pro bono work. My legal work will generate negative earnings in 2023 as I have to pay for insurance. 

b) Push on with my lawyer transformation

I can choose to push on with legal work. This means looking for a salaried associate position. This is because I've not been successful in looking for files, and a profit-sharing arrangement has not worked out. My attempts to replicate a payout like investment training does not translate to my legal career.

The upside is that the industry is hungry for associates again, and I can move on with a new career which is stable and will come with good increments. I've spent the last 3-4 months familiarising myself and am now ready to dip into a new position, but I have to choose a family-friendly path, which can mean a career in conveyancing. 

I've lined up interviews next week, and if successful, it can mean a short break from my investment training career. 

This also comes with great reluctance because I've been conducting training for four years and enjoy doing it. I may attempt to negotiate my way to keep training on weekends and use my leave to run my business, but this will not likely succeed. 

(Also, I will continue to build ERM portfolios with my community with 600+ members rather than just letting it go. I have a solid plan to do this.)

So this summarises my angst regarding my career at the moment. I suspect I don't have enough information to choose at the moment because I am still missing information on what my time is worth. 

I would like to delay pulling the plug on one of my careers, but as my practice license needs renewal on 1st April 2023, I have to start making a decision soon.  

[VDay Post] Why shouldn't Money be a Love Language?

 

It was Gary Chapman who pioneered the idea of the Five Love Languages. The idea is that you can have better relationships if you figure out your own love language or your partner's. The five love languages are:

• Physical Touch
• Gifts
• Acts of Service
• Quality Time
• Words of Encouragement.

After a while, self-help gurus tried to expand the model into seven love languages. Some article I read a while ago added intellectual conversation and emotional connection, but if you google the seven, you will get Communication and Expression of love and affection.

Now all this fine and good, if you are in the business of selling self-help books. Recent surveys show that for the men who read this blog, they really need to focus on other things in life to attract a mate. Dating companies conduct surveys in Singaporean women and find out that they prefer the following:

• Education Qualifications
• Salary
• Similar religion

So my question for Valentine's Day in 2023 is simply : 

Why can't money be a love language?

If you think about it, money can be used to buy gifts. It can also buy services that end up giving you more time, which pays for more quality time and enables more acts of service. It provides more economic security and in an economic regime of high inflation and rocketing real estate prices, why can't it be formally inducted as a love language?

I think if we can acknowleged Money as a Love Language, we can have a very fruitful conversation about what kind of money is your Money Dialect, to which there are several interesting examples :

• High-earned income
• Dividends / Royalties
• Investment Growth 
• Entrepreneurship
• Inheritance
• Marriage

Even if your Love Language is Money, there are many ways to make money, so you should think  about what kind of Money Dialect you speak. 

It's pretty obvious my Money Dialect is Dividends. Someone who is always hunting for expat men might see Marriage as a means to get more financial security. Someone who is always studying to join a high-paying profession will speak the Love Dialect of High-earned income. 

Reading someone's Money Dialect is a useful skill even if you are not looking for romantic entanglements. A person who has a Money Dialect of Dividends will tend to prefer to save a lot of money to grow their passive income. This person may clash with someone whose Money Dialect is Entrepreneurship. 

There is nothing more annoying for a dividends investor to keep hearing about self-aggrandizing stories of hustling and Lamborghini cars.

Letter to Batch 29 of the Early Retirement Masterclass

 

Dear Students of Batch 29,

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

When I was preparing the slides for Batch 29, we saw some glimmers of hope in the market. The US Fed declared that we were in a period of disinflation, and markets rallied. ERM portfolios built by previous batches of students all began to see positive signs.

The possibility of a recovery then led to the possibility of restoring leverage to our ERM portfolios. While we can consider leveraging our investments again, two major impediments to executing this manoeuvre exist.

Firstly, interest rates are at an all-time high. Leveraging Singapore stocks with Interactive brokers will cost over 6%. This is higher than the dividend yield of Batch 29, which is a respectable 5.97%.

Secondly, the US economy generated more jobs, and unemployment has dropped. This can mean that inflation will be harder to control. The investing public has probably underestimated how far the Fed will raise interest rates and how long they can keep it at such a high level.

Because of these twin considerations, we will hold back on leverage for the moment, and I intend to pick up the stocks using my traditional trading account.

We will revisit the possibility during the next batch of training.

Lastly, I hope that Batch 29 will participate actively in the FB group. Sometime in Q1 2023, we should meet for an online community webinar.

Hope to see you then!

Christopher Ng Wai Chung