Quick and dirty mental filters when confronted with new ideas.

Just a story to set the tone for this discussion.

If you had known me 20 years ago, I was not exactly a charming specimen of the male gender.

I'm soft of like Ted, but not cute. A female undergrad once asked me to carry her bag for her. I told her no, "Because scarly I fall down how ?"

During my NUS days, I struggled to get a date, then I normally screw up my chances for a second date because I am a troll. I can't really help it - Gen X girls are so self-contradictory about marriage, relationships and career and I had a great time pointing this out to them - as a result my wife still laughs at me for getting a girlfriend so late in my life. I also never understood when I should be providing a listening ear versus giving advice. I am engineer. If you have a problem, I'll solve it for you.

But the difference between me and other guys is that I know about my problem with girls and have no illusions about how 'attractive' I was. Note that those days, my net worth was negligible. I might also be argued that I had low esteem on relationship matters.

So when I was attending an entrepreneurial seminar, a hot chick came up to me and introduced herself.

Being a cynical asshole, I reduced this to three possibilities : she's either into insurance, MLM or wants to convert me into a Charismatic Christian.

So I went with MLM and decided to troll her with a pre-emptive strike. I said "Haha ! Hot chicks don't just talk to me just like that. You must be into MLM and I'm not into MLM. Sorry !"

Man, the look on her face was priceless !

She nodded in agreement, looked a little embarrassed and sat back down.

Looking back, I think that was dumb, I was pretty sure if she was hotter, I would have pretended to be interested in MLM just to get a date, but what I did was clearly cynical, not skeptical. I crossed the line.

The last article got some people into thinking about reading a whole new set of books which demonstrate how skepticism is ideally carried out against new ideas.

A good friend  then told me on FB that this may not be enough, he wanted something actionable on a much smaller scale. And after all, developing a healthy approach to a new idea takes years ( And many opportunities to date women ) to refine.

I'm just going to share three quick suggestions on how to approach a new idea. They are not a collectively exhaustive list of what you need to go through, but generally it should be helpful at the street level.

a) What's in it for the person if you accept this idea ?

The first filter is to ask, what's in it for the person who is selling the idea to you.

Everyone who was into real estate or selling housing loans was selling the idea that real estate is a sure winner in good times and bad. Why ? Because if you buy the idea, they have the possibility of earning commissions.

Contrast that with a dividends investor.

I get asked all the time which REITs are good. I can't just answer "Sabana" for it's current high yields, there's the complicated issue of expiring master leases and that horrible manuever in Chai Chee. A contextual discussion on Sabana would take investment bloggers hours.

So instead, I very reluctantly tell people that perhaps the best approach to avoid idiosyncratic risk is to simply buy up all REITs which would yield about 6.5%.

Would I make any money if these guys succeed. Hell no ! They might just go NLB to borrow my books.

But I might get cursed here if they lose money so expect my advice to be sound but reluctantly given.

b) Is the idea falsifiable ? ( impossible to disprove, tautological )

The second filter gets rid of all that detritus that common well-meaning folks will throw at you, as these are issues of faith and not science.

Take for instance the Law of Attraction, which has generated a whole new legion of fucking idiots who believe in wishful thinking.

The Law of Attraction is not falsifiable. But morons who believe in it will asset that if what you dream about comes true, the law works. If the law does not work, you do not have enough faith to make the law work for you. The believer will not accept the idea that the Law is simply not true. It is as if I can dream my way to a training contract in a law firm or a beef steak in my pockets.

Compare that with the assertion that global stock equity can defeat inflation. There is enough data in Bloomberg to show that this might not even hold true in some market conditions. You can prove this assertion wrong, but you will find out that at a horizon of over 20 years, the odds of beating inflation goes up by quite a bit.   

c) Is the evidence credible ?

The third filter is that on balance of probabilities, the idea is believable based on the evidence given. You just need to assess the credibility of the evidence.

In this case, I can be a little elitist, I would peg an assertion by The Economist more accurate than a left-winged website like The Salon ( which I do read just to experience how stupid liberals and a progressives are.  )

This is important as a last filter as even I was misled by self-help books which claimed that a Harvard study confirmed that business students who had personal goals were richer than those who did not - this study was entirely bogus ! It spawned a truckload of literature based on a big lie ( SMART goals anyone ?).

And, no,  Einstein did not talk about making fishes climb trees either.

This also means that you have to pidgeon-hole some of your friends because they tend to draw evidence from the sources that they like.

I have developed a strong suspicion of lawyers or law students who are making an assertion  even if they have a strong body of evidence to support their views. I know they are just advocating a position, and that it's not too difficult to dig out evidence to to suggest the contrary. Lawyers are aces at evidence.

As a consequence of this, I do not trust my classmates on legal matters and reasoning but I do trust them if they bring up insights from their first degrees.

Anyway, in summary, if you do not really know how to develop your skeptic muscles, just ask yourself three questions :

a) Does the context imply that someone will benefit from you believing in this idea ?
b) Is there a way to falsify the idea by referring to research or just waiting for some results to appear ?
c) Is the evidence credible ?

Masterclass in Skepticism.

I noticed that a large number of readers or folks who are interested in passive income or personal finance are also very susceptible to messages from self-help gurus. Some folks I have spoken to have shared personal stories of putting money into the wrong Internet Marketing programs or have been roped into MLM at a certain stage in their lives, others have paid possibly thousands attending some seminar on forex trading or real estate flipping. The older ones even went to bucket shops.

Readers and other financial bloggers have this problem :

How do we tell the difference between someone who genuinely have something to teach you about financial success versus someone who is just trying to become a financial success at your expense ?

If we were to go really deep into technical differences between a real investment specialist and a financial bullshitter, we'd probably end up with covering the entire CFA syllabus and do note that in the early 2000s, asset-backed securities and CDOs were covered in great detail in the exams at level 2 as no one could foresee that they would play such a big role the Great Recession.

The answer to resolving this problem is to develop a healthy does of skepticism. But skepticism is merely the ability not to take something at face value and critically think about what the other party is trying to tell you accounting for information asymmetries and the context of the engagement. Mastering skepticism is also quite challenging, you may need to complete a liberal arts degree to tell bullshit from the real McCoy. Be too skeptical, and you run into the problem of cynicism, where even good ideas and investments are discarded in the name of prudence.

Before I actually get into the Masterclass, I'm just going to share with everyone why Skepticism is so important.

Start with this idea : We bloggers are experts in engineering diseases of the mind !

Ideas are like viruses, sometimes an idea comes around and its not designed so much to harm you, but to make you more susceptible to other ideas. This is what I would term the immuno-deficiency of the mind. Some ideas are AIDS viruses, it opens your mind to other ideas like MLM, Pyramid marketing, land banking, internet marketing and ILPs. As an example, a book by Robert Kiyosaki would hardly harm the reader and generally have the positive effect of motivating him, but it subliminally prepares the reader for a life engaged in MLM as it keeps harping about building businesses and helping other people -themes which keep getting repeated in MLM seminars. Similarly, I can imagine self-help guru espousing the concept of "saying yes to everything" which inspired a hilarious Jim Carrey movie some years ago. Which is why I really hate stupid websites like Elite Daily and MindBodyGreen.

I think I have developed a vaccine against the immuno-deficiency of the mind.

Here are three books which, if read and processed, leads to the development of healthy skepticism.

a) The first book SHAM, exposes the key issues and flaws with the self-help movement. It is easy to read and immensely entertaining. Almost all your favourite self-help gurus are put to the torch in this book.



b) The second book is Bright-sided by Barbara Ehrenreich which replaces your Pollyannish positive thinking with a dose of gritty realism.



As  a side-note, I advise you to always read this book with the works of Martin Seligman who is the father of Positive psychology. I do not find that both author's ideas are mutually exclusive.

c) The third book, which I recently read, is a true classic. Oliver Burkeman hates self-help so much, he practically read the entire body of knowledge of self-help to expose it for his readers and highlights what works and what doesn't. It's hard to imagine a person who now knows more about self-help than Oliver Burkeman.



I think Oliver Burkeman is more than qualified to start a CSHA or a Charter of Self-Help Analyst accreditation body. Life Coaching is pretty good money in the US.

d) Google "John T Reed". John T Reed was an early crusader who set up a website to debunk and expose the real-estate gurus who were his competitors, his points are well thought out and his website contains a lot of dirt on your favorite self-help guru. 

A savvy reader would notice that I did not include the ancient philosophers of Skepticism like Pyrrho or Sextus Empiricuswho comes up when you wiki skepticism. The four resources mentioned actually demonstrate how to take down and process key ideas which plague our modern world and form examples on how to skeptical about new ideas.

In the process of reading them, you will also find that they all qualify as great self-help books on their own.

Perhaps in a future book, I will make Skepticism a key skill before we even consider the basic skills required to attain financial independence.

Some thoughts on parenting on Father's Day.

Thought I'd share some thoughts on parenting.

Giving parenting advice is inherently dangerous for us bloggers because we wouldn't really know what to expect from our kids in the future. Even the children of ministers and top lawyers end up being sidelined by the education system and fathers typically end up paying to send them overseas for a "paper thosai" qualification.

I count myself lucky that my 4-year-old daughter, Clio, is a normal and healthy kid. Other than trying to issue her own currency 2 weeks ago after my mum pretended that she has no money left and trying to mimic Donald Trump's hilarious speech, Clio has not really demonstrated any real talent yet. The only thing she inherited from me so far is that she likes to sing and tries to mimic pop lyrics as she is unable to read yet.

Statistically, I believe that Clio, like most Singaporeans in her generation, will struggle with getting a seat in a local university.

I don't know very much on parenting, I have read many books on child development but I do not conscientiously apply the principles I pick up from those books. One thing I don't do is to stop my mum every-time she says that Clio is smart or pan-lai ( even though me and my wife do not do this on a regular basis as its bad for her intellectual development ).

The insight I wish today on Father's Day is the concept of capital transfer to future generations.

Parents transfer wealth in two ways which I believe should be equivalent to each other if proper planning takes place.

a) Transfer of Financial Capital

Transfer for capital assets happen upon death or on special events. Money and financial securities changes hands from parents to children when parent's die or feel that children are ready to take over some of the assets. This is dominant form of wealth transfer which presents a lot of problems ( or lucrative fees for lawyers ). Asian children are sometimes not ready to take on this amount of wealth and have a strong propensity to spend it all away.

My personal philosophy is teach my kids to manage their wealth properly. Not just in terms of learning how to save, but they also need to play with the capital markets early in life.

b) Transfer of Human Capital

The second form of transfer is the transfer of human capital. The parent makes a wealth deduction to increase the human capital of their children.

This is a huge industry in Singapore. Parents can spend thousands a month to give their kids tuition. The best tutors can be a as rich as hedge fund managers.

On a very disturbing note, there are now camps to prepare children to get into the Gifted education program. I read brochures threatening parents that if their kids are really gifted and nothing is being done to give them special training, they would get bored and would lose interest in their studies.

The first important insight is to recognise what tuition and these gifted boot-camps are, a means of transforming financial capital into your kid's human capital.

c) Balancing financial and human capital transfer is the killer app of parenting.

With the realisation that everything is just a form of capital transfer, parents should be able to move more tactically when making decisions to develop their kids.

Suppose you spend $2,000 a month on tuition and boot-camps, and you believe that if you do this from age 3 until the age of 18, you would be able to push your child into a university program. It is helpful to ask yourself whether you can invest this same $2,000 in a portfolio to generate passive income for your kid such that when he graduates from a polytechnic, the passive income and his salary would be higher than his starting pay as a fresh graduate.

As it turns out that compounded at 7%, paying $2000 for 15 years ends up with a pretty large portfolio of $650,000.

Your kid can get enough capital to build a start-up with that amount of cash.

d) Why I lean towards financial capital transfer.

It can be argued that being somewhat against tuition, I am less kiasu than other parents, but I want to argue that I am actually more kiasu.

When your kids enter an expensive Montessori program or attend an expensive play-school, is there documented evidence that these children go on to university programs after accounting for social economic factors and other variables ? Instead, if a parent were to invest a bit of his own time, he can teach his kids to use Khan Academy and Coursera to pick up skills based on the child's own personal interest.

The statistical evidence for the return of a portfolio of equities, however, is easily accessible over the web. With a time horizon of 15 to 20 years, the odds of a portfolio beating inflation is definitely higher than the odds of your kids getting into law or medical school in NUS.  

Of course, to be able to balance the extent of human and capital transfer, you will need to be intimately familiar with the strengths and weaknesses of your child and make decisions accordingly. I believe that tuition should be targeted at the crucial subjects your kid is hopeless at but must pass to get into a good tertiary institution (Like EL1), or at subjects where your kid is so good at, a slight nudge from a trained coach can get your kid into the Olympiads.

It is entirely possible that your kid would not make it academically but can succeed as an entrepreneur instead and would appreciate financial capital instead.



 

Time as an asset class.

Initially the title of my blog post today was supposed to be about RGS and billionaires, but fortunately (or unfortunately),  a series of events has allowed me to interrupt my article planning for something which is more useful to readers. ( Although I think many readers want to know what I think about the assortative mating between RGS and Billionaires as well... )

Two events serve as a catalyst for this post.

Just today, I had a great honour of having breakfast with a reader John Smith, we spoke about many things but one idea stood-out and I felt that it is useful to share that with readers today.

The second incident concerns blogger 15WW. 15WW has written an excellent post about an old JC alumni gathering which went horribly wrong. You can read all about it here.

The essence of the problem is this : 15WW was sharing about his family's approach to life and his very successful JC classmates ( who would be considered assholes in my book ) hinted that by downshifting one's lifestyle is tantamount to lacking ambition and I felt that 15WW's feeling were hurt after he did some thinking about the words exchanged on his JC gathering.

My stand has always been clear about other financial bloggers. 15WW remains, financially, one of the most successful bloggers out there who has accumulated a mind-boggling huge portfolio for someone his age. The idea that he or his wife lacks ambition is ludicrous and a should be a cautionary tale on JC reunions more than about financial independence. After reading the post, I was thanking my lucky stars that  a secondary school or JC class reunion for me would be very tame as most of my peers are doing IT work.

The insight on this problem coincidentally came from friendly breakfast I had with John Smith (which clearly shows that bloggers do learn a lot  from readers).

John Smith was commenting to me about the nature of jobs like that the in public service. His insight is that the stability and predictability of jobs in the civil service can be source of allowing someone to take on bigger risks and innovate in other areas of his life. 

I think John is onto something really important when he shared this insight with me.

A steady job in a company which takes up a reasonable amount of one's time is not the lack of ambition but a pretty prudent life strategy. A civil servant with a steady track record has a job which looks very much like an investment bond. Moshe Milevsky, author of Are you a Stock or a Bond ?would say that this allows him to take on more equity investments and even use some leverage in his financial portfolio. Vicki Robin, author of Your Money Or Your Life would also argue that this person is optimising the exchange of his life energy with money.

This is a buildup into a more interesting idea that Time is an important asset class which I had been harping about but could not develop the idea further in my writings. As of now we do not have the tools to manage Time like a portfolio yet. Certain life philosophies like Getting Things Done might allow one to succeed at the tactical asset allocation level, like how to save time when going through email using the GTD system to prioritise work, but there is no formal discipline on allocating your time around careers which maximise the exchange of time for money at the broader level.

So one things for sure, not all jobs are created equally.

Some office jobs end on time and you are assured of reasonable amount of leisure time per week. Other jobs may exhibit time volatility in spite of low contact hours at work : An IT engineer on call may be lounging at home, but he cannot plan his leisure time as he may be interrupted to resolve a server outage. It also makes it hard for the same engineer to sign up for investment seminars in the evening.

I would probably need more time to come up with the framework to show folks how time can be managed at a strategic portfolio level which would probably require that I think about the arcane statistics of various careers choices. For example, what is the standard deviation of the duration a litigator spends in the office ? Datasets such as these would start to become available once devices like Fitbits are used to track employees in the office. Ideally, employees should be compensated for absolute time spent in office as well as variability.

So in conclusion, I would say that the doctor who snubbed 15WW is pretty sad idiot who was fixated with the idea that ambition is the optimising of career capital, as downgrading to being a GP is being less innovative or useful to society, that is a very limiting belief.

I would even argue that 15WW has even more ambition as he is trying to optimise his financial capital as well as his human capital / temporal capital assets.

Conflating 15WW's financial independence as a lack of ambition is likely a accumulated problem of Singapore's singular obsession with only one dimension of success. It is sad that a doctor, someone who should know better, can adopt such a parochial stance on success.

Sharon Au's faux pas warrants a relook into SAP education.

I had wanted to blog about this earlier, but I really had to give myself a break so I went off to Kuala Lumpur on a carnal food fest. After I got back to Singapore, my lecturer started spamming readings for the second half of summer term, so I spent the last 3 days mugging up 2 weeks worth of e-commerce lectures.

So let's talk about something non-financial for a change.

When I heard that Sharon Au made some remarks which made some ethnic minorities uncomfortable during the opening of the SEA games, I googled her educational background because I felt that the education system was probably more guilty for the incident than Sharon herself. After all, Sharon can be said to be acting a comedian, and Sharon's infraction was no more culpable than a Russell Peters in a stand-up comedy show.

I have confidence that ethnic minorities in Singapore are magnanimous people and they have already moved on from the incident, however, I can't help but feel that this incident can be a good catalyst for policy makers to relook SAP education in Singapore because, after all, Sharon Au spent 6 years in SAP schools and very Chinese-inclined colleges, she may not even be aware that what she has done is even offensive to others.

SAP school are not a good way to educate ethnic Chinese students, why the does the government need to isolate a group of ethnic Chinese students for 6 or more years, then apply the 'elite' label to them just because they take CL1 as a subject ? If American whites were to come together and then start harping about how they are elite and special, you wouldn't end up with SAP schools, you'd end up with something like the KKK, no one wants to be associated with them.

In Singapore, history is littered with similar infractions in the past where some insensitive was said about ethnic minorities, I leave it to the readers to google the incidents involving Seng Han Thong and Choo Wee Kiang and then make a value judgement as to why reforms to SAP education are an urgent priority now if we want to push our multi-ethnic society forward.

Here are the reforms I propose :

a) End the isolation of SAP students.

Have the standard Express stream program for all Singaporeans regardless of race but have classes for 4 days a week. Reserve one day for training in electives. CL1 should be an option but we should have more flexibility for what students can do with their time. There can be an Institute for English Literature for folks who want to get deeper into the English language. There can be an Advanced Science Institute as well.

b) Remove the elitist label for student who take CL1.  

With China being a burgeoning market, it would be insane not to promote the Chinese language. CL1 should be open to all students who get an A* for CL2, even students who are weak in other subjects. SAP schools should be retooled as Chinese Institutes where CL1 students gather over weekends to learn Higher Chinese.

This allows specialization in Chinese and eliminates the downside of isolation.

c) Scholarships can incentivise students to take CL1.

To encourage more students to pick up CL1 over other specialisations, perhaps scholarships can be used to entice students to pick this elective.  There should be more opportunities to get subsidised travel to Shanghai.

Student may be able to choose between Higher Chinese or Higher Mathematics but he may choose higher Chinese because it has more travel opportunities and scholarships.

d) Create institutes to promote the Singapore's business agenda without isolating ethnic Chinese students.

We do not need to end with just promoting the learning of Chinese language, institutes which cover India and Indonesia can provide Singaporeans opportunities to learn Hindi and Bahasa Indonesia to tap into the growth of emerging markets.

In conclusion, Chinese chauvinism is a hidden disease of Singapore society. You can argue that minorities like ethnic Indians and Malays have to live with it, but do not forget that English-speaking Chinese like myself and Peranakans are victims too !

I have been told over and over again that my inability to memorise proverbs is affront to my Cantonese ancestors.

I hope that in time, we can forgive and forget about Sharon Au, but we should keep telling policy makers that the root of Chinese Chauvinism have grown deep into the SAP program, and there are ways to promote racial harmony without sacrificing language proficiency.

Why Kim Jong-Un would approve of my insurance planning ?

I spend about $120 a month on AVIVA SAF group term life insurance which gives me about $1,000,000 of protection, this is the only insurance I have. Everything else is taken care by my passive income flow. This is the essence of buy term and invest the rest.

Today, I received a letter telling me that I have just received a $570 rebate. I have received this amount last year which has effectively reduced my insurance expenses by a further 40%.

Why is my insurance so cost effective ?

Simple.

I refuse to have an agent.

No one can advice me better than myself.

Compared to a commission-hungry advisor, I think that I can do better because there is no conflict of interest. If i am willing to pour my personal time into the study of money and investments, my own advice would be worth many times that of an agent as no cook would willingly poison his food when he is cooking for himself.

So a central part of my philosophy is that it's better to advise myself wrongly than to rely on someone else who gives me good advice.

This is not an easy philosophy to adopt in this modern world. I have spent 5 years combing through almost every single certification on investing. Worse, I have extended this philosophy into legal advice - no one can advise me legally better than myself, even if I do have to seek help from another legal expert, I would at least know how to use him.

This is not an easy road to walk. For one, you need to very curious and enjoy an academic life.

One other country which adopts this approach is North Korea. North Korea's philosophy of self-sufficiency is know as "Juche". I remind myself that if I misapply this philosophy, my family can starve like North Koreans during a drought.

As much as I would wish to, I have not extended this to seeking medical advice, unless my daughter gets into medical school.

If you are a financial planner, agent or a private banker, it might be tempting to write nasty stuff on this blog to question my approach.

First of all, I actually welcome interaction from insurance professionals, especially if it is hostile.

Second of all, you need to reflect upon the lack of trust in members of your profession. Having a code of ethics will not get anyone anywhere. Policy makers are doing the right thing with DIY portals but the next step is to eliminate sales commissions on your industry and toughen up penalties for fraud.

Third of all, my strategy got me out of the rat race at age 39 - I was an IT guy for 14 years, not some banker, lawyer or doctor. You need to propose something better for your clients before you second guess my approach. But we all know, that between you and your client, you are more likely to reach financial independence first.

So what can the industry do ?

The industry needs to disrupt itself aggressively and come to the realization that consumers are getting smarter. When an agent churns his client's account, consumers will know that the reason is not dishonesty, but the incentives built around the sales of particularly high-expense products.

Agents will have to abandon commissions and accept that the fixed fee is the way to move forward which leads to the next problem - Asians don't like to pay for advice.

Tough luck ! If there is low perceived value in your advice, you obviously need to up your game.

Perhaps paying customers can be allowed to attend seminars where my fellow bloggers would conduct, who knows ?

Mad Max shows us how the Singaporean Dream can become a Singaporean Nightmare.

I think by now most readers would have watched this face-melting action movie so it's time to write an article on this action flick.

Why is Mad Max a teachable moment for the investor capitalist ?

The reason is this....

...If you follow my advice, work hard, save a large chunk of your earnings and learn the arts of investment well, you would be just like Immortan Joe, the villain of the movie !

I just can't relate to the two heroes of the movie. Instead, I found myself cheering for Immortan Joe, a self-made leader who carved a new society in his own image.

If you really think about it, what has Immortan Joe done wrong ?

He found a way to pump water up from the ground, quietly built a garden to raise crops, and built a loyal corp of war boys who obviously loved him like their own dad. Yes, he has a harem because he worked so hard to accumulate his assets but he's eminently human about it - there was this one scene where he would rather crash his vehicle than to hurt his unborn child. He also demonstrated much angst and sadness when one of his wives died.

If one character represents everything this blog and it's fan base stands for, it's Immortan Joe.

So why should all of you eager beaver capitalists need to watch Mad Max ?

Because Mad Max is about what kind of folks who will eventually lead to your downfall and the destruction of your Singaporean Dream.

Let's start with Imperator Furiosa.

The true protagonist of Mad Max is a woman who rose up the ranks to hold the title of Imperator, which clearly goes to show how much Immortan Jow respects women of ability.

The equivalent of the Imperators in our society today are the Latte Liberals in Singapore today - armed to the teeth with liberal arts degrees, living in their expensive district 10 condominiums and drinking Civet Cat-Shit coffee while lamenting about the state of income inequality in societies today. Of course, to these liberals, it's not enough to be the right hand of Immortan Joe, Imperator Furiosa has her perverse vision of a egalitarian society represented by an evergreen land where all mothers reside in. Interestingly, such lands do not exist anymore and has been destroyed by the so-called Vuvalini crones ages ago.

In short, liberals lead you to a utopian society which cannot be sustained.

What about Mad Max ?

Mad Max's equivalent in Singapore is what I term the Mediocre Middle-class. MMs are family men like me, actually enjoying the asset inflation created by the government and giving their kids a world class education. But unlike most of the middle-class, MMs desire more than what life gives them. There is this sense that society robbed them in the past. Maybe the education system short-changed them, maybe they have a tyrannical boss, but the bottom line is that the fault must lie with the government and the capitalist if they are mediocre and can't afford the best Patek Phillipe watches or drive the awesomest BMW cars.

MMs also want equality, they hate the financial independence of the capitalists, thinking that that they will have a New Zealand lifestyle. In a sense they are as Mad as Mad Max because at the end of the day, they are too rich and well-to-do to be given welfare. A more distributive society actually hurts them more as they end up paying more taxes to fund these welfare schemes that they want so much.

But in the movie, Mad Max played into Furiosa's plans fairly well. He is but a base thug and henchman to Furiosa, working for a deluded elite who has stolen from the capitalist and wants to lead everyone to desolate and barren land.

Watch the movie and take a good look at Singapore.

Is is not true that the liberal elites are often joined by the dissatisfied middle class in Singapore politics ?

The lesson for us capitalists is to figure out how not to end up like Immortan Joe, some of us are innovative, worked hard to build up our assets, but this can be easily lost when someone like Furiosa and Mad Max gangs up to steal and misappropriate your property then kill you and your entire family.

The question of how Immortan Joe could have done better will not be discussed today.

What is important is that now you know who are the Imperator Furiosas and Mad Maxes in your midsts today.

Let them win, and your Singaporean Dream will become a Nightmare.

<< In case you are wondering, this is a satirical piece written with a hint of irony. >>

What kind of prata does your job resemble ?

The Thosai article has attracted quite a lot of attention so I'd thought I'd follow up with a similar article about career management. This framework is inspired by Robert Reich's The Work of Nations has been explained before in my previous books but I have updated my ideas to include some new insights from Law School.

a) Mechanical jobs resemble Roti Kosong

I think by now, people agree that many jobs are dead end jobs in Singapore. If you are manufacturing worker who performs mechanical work, you are probably already jobless in this country. Even in China, automation is rapidly changing the modern factory  why hire a villager when a robot can do the task with greater precision and will not commit suicide or engage in industrial action.

It's not just production operators who need to be afraid, I would consider legal work which fills templates equally at risk as this work can be fronted locally but outsourced to India. This is the same for stock brokers who just enter enter orders and send out house research mechanically every week.

If you career resembles Roti Kosong, be prepared to go hungry quite soon. How many people can be full after eating just one Roti kosong. In fact, you need to eat two pratas to be minimally satiated.

Better hold two jobs if you are stuck doing mechanical work.

b) Service jobs resemble Ice Cream Prata

Some jobs cannot be outsourced and are a safe haven from outsourcing. Taxi drivers, sales representatives and hair dressers belong to this category.

Service jobs are relatively secure but the problem lies in disappearing mechanical jobs forcing the bulk of citizens to fight for service oriented employment. This keeps a lid on salaries. In the 90s, my haircuts at Sri Dewa at Coronation Plaza was $8. These days my haircuts cost me $5 in the Woodlands heartlands. Malaysian staff relocate to Singapore to help Singaporeans with affordable haircuts.

Ice-Cream Prata looks sweet just like service staff and can be filling, but after a while you get hungry for meat and want some proteins in your diet.

c) Symbolic Manipulation jobs are like Murtabak

Highest paying jobs invariably require very solid symbolic manipulation skills. The ability to use personal knowledge to produce insight and advice to solve very complicated problems.

Software engineers in Silicon Valley command $100,000 premiums. SMU's recent information on law students show 97% employment rate and a starting pay of $5,500 - Although I advice my classmates not to be too cocky - the restriction of a few universities play a big role in this.

But degree holders should not be too happy to read this. Robert Reich wrote his book prior to the Second Machine Learning revolution. A lot of symbolic analytical work is getting replaced by artificial intelligence. The learning for symbolic analysts should never stop, a good programmer needs to develop strong domain knowledge and architecting skills to stay ahead of the curve, otherwise he can get drowned by competition.

This is why the Enhanced Diploma Programmes from our local Polytechnics is crucial to develop the consistently evolving symbolic analysts of the future.

Murtabak is ultimately rich and filling, you can vary what goes into the prata and come out with combinations of your own, results can be surprising and delicious. The problem is Murtabak is expensive and costs $7 a piece these days. Degrees cost time and money and there "paper thosai" problem I highlighted in an earlier post.

d) Convergence jobs are like Indian fusion cuisine from a 3-star Michelin Chef.

I thought I'd go beyond Robert Reich to talk about jobs which do not exist yet. There's something to be said about symbolic analytic work which spans multiple domains. Potentially a lot of innovation and great jobs await those who are schooled in multiple disciplines.

The best jobs of the future is similar to fusion cuisine. Imagine Indian prata wrapping a nice slab of Wagyu Beef and then infused with blend of chilli hot-sauces then served with a dessert derived from Lassi and molecular cuisine.

I experienced it personally in Law School, I saw a problem with regards to awarding contractual damages which top academic legal minds struggle to resolve. Contracts are based on words and absolutes. I tried to adopt the view of an options trader and found various hidden derivatives in the contracts and was able to suggest an innovative way to look at future rulings.

It's not just me, AI experts are now trying to predict which english words are likely to become extinct and making a lot of headway in English Literature. A paper was released recently on looking at Big 5 personality traits from Facebook posts.

This evolution of jobs is not entirely good news for policy makers. The biggest innovations and opportunities for job creation will come from insights from multi-disciplinary studies. This means that folks need to spend more time in school to power these new companies.

Perhaps a possibility is to adopt your career in stages and move from Murtabak to Indian Fusion Cuisine later in life when you have more capital to invest in your studies.

This is a highly advanced area of financial planning and career development which involves tactical asset allocation of your human capital. I bet no one has even invented this discipline yet.

Why hanker for a safety net or a trampoline when you can have a jet pack ?

Singapore is really lucky, we had a one in a million chance of being ruled by Lee Kuan Yew and after he passed away, we continue to come under the able administration of Tharman Shanmugaratnam.

( I'm not PAP IB, I like Low Thia Kiang's brand of constructive politics as well and actually think that WP will survive the AHPETC scandal. ) 

Lately Tharman's interview with the BBC at the Gallen Symposium has impressed almost everyone. When cornered about Singapore's unwillingness to provide safety nets, Tharman executed an awesome rhetorical manoeuvre saying that Singapore's approach is to provide a trampoline instead.

When I first heard the interview, I was stunned like a vegetable. Our politicians are only beginning to really understand the need for rhetoric in statecraft and Tharman seems so much ahead of the curve. The trampoline is a very powerful metaphor and counters the decades of use by progressives and liberals to employ the term social safety net for welfare schemes. 

Personally, I think we should paint welfare payments as a crutch rather than a safety net. A responsible government would not want its citizens in crutches but would have been considered cruel by international standards if they don't provide safety nets. 

I want to to build on the metaphor of a trampoline and propose that our government has indeed gone beyond providing a trampoline for Singaporeans. 

If you review the tax policies and how transparent we are with taxes, for the folks who learn how to invest and manage their affairs, every Singapore can have a jet-pack if they want to. This is largely from the introduction of REITs and Business trusts in Singapore. 

Over here, Corporate taxes are low and dividends are not individually taxed. No other country can produce this combination of low taxes, public services and high dividend yields. I dare to even challenge fans of Hong Kong to show me where their high dividends stocks are. 

The jet-pack looks like this :

a) If you are single, studied hard, willing to live with parents, work your butt out and save your income.

b) By taking steps to save your income every month preferably at rates higher than 50%.

c) It is possible to accumulate $300,000 of cash before age 35.

d) There is nothing stopping you from reading the blogs of my fellow financial bloggers to figure out a combination of stocks, REITs and business trusts to yield about 8% a year. 

At 8% a year, you can get an annual income of $24,000 or $2,000 a month. And if managed carefully, in perpetuity.

[[ Note that at this point 8% is achievable but considered a risky target ]]

$2,000 a month is enough to pay for all your expenses as a single person.

With the exception of countries like the UAE, no society can provide a welfare payment of $2,000 a month making this jet-pack a viable metaphor on how powerful our low tax regime is.

Which brings me to the second part of the argument about the question Tharman fielded on creativity and freedom. At least from my personal experience, even having dividend payments exceeding your monthly earned income would not necessarily lead to laziness. 

The beauty of dividends is that they are not guaranteed over the long term, your jetpack may run out of fuel. 

I am always in the lookout for more personal security for myself and my family, hence the hours spent poring over legal cases in SMU today. In time, most of us will take the time out to improve ourselves or even run a small business to produce jobs. I still have my dream of leaving a big dent in the legal industry with my programming knowledge.

In short, folks with jetpacks don't just cruise around in the skies. We earned our jetpacks the hard way and is always concerned that we'll run out of fuel. 

I also like Tharman's allusion to the folks in the Bay Area. 

Singapore's tribe of financially savvy can bring its own brand of creativity. It takes knowledge and discipline to build up a portfolio to allow one to retire and stop work. This knowledge and discipline would be useful if we can be unshackled to pursue our ambitions in ways which is not limited to the confines of a normal workplace. 

What kind of thosai does your degree resemble ?

For this weekend, I wanted to write an article on treating a degree as an investment just like a portfolio of stock and bonds. Fortunately for everyone, I was also ordering my thosai while thinking about this idea so I thought I could write an article on choosing degrees and eating thosai.

Let's start with some fundamentals.

Degrees serve two purposes :

a) Equipping you with the skills to take on the modern workplace.

Skills are a degree's secondary purpose, in spite of what a minister tells you. If degrees genuinely equip someone with actual skills, then the university ranking would not be important when considering a new hire, management consulting firms would not fixate on just the Ivy League and Oxbridge qualifications.

In practice, there is simply too much domain knowledge that needs to be absorbed on the job before you can become a useful member of your company.

So get real about degrees. You get a degree in Engineering. You do not get a degree in Engineering in General Electric.

b) Signalling to the employer that you have the intelligence and intensity to be turned into a company asset.

This is the true purpose of a degree. It signals to the employer that you have what it takes to get the job done even if the industry changes.

The degree makes you solve complicated problems you will never see in real life, write horribly convoluted essays on arcane concepts and throw  group dynamic issues at you when you form project teams. If you survive, it tells the employer that you are a very safe option as a new hire into a management associate program.

I suppose this is the hardest truth that a savvy Singaporean has to grasp.

Now we talk about Thosais, degrees can be classified based on the Thosai they resemble.

a) Professional degrees are like Thosai Masala

Professional degrees are like Thosai masala. Thosai masala costs twice as much as plain thosai but is packed with potatoes and other goodies. Thosai masala is filling and robust.

The cut-off to get into these programs are high but the investment returns are also high. Survival is based on both the skills actually developed and the degree's signalling value.

Doctors must be able to cut someone up with great proficiency. Lawyers must understand the law. Engineers risk killing thousands if the bridges they design collapses.

My advice, that you do not need to agree, is that if possible, always eat Thosai Masala. It is high skill and high signalling. It is also exclusive.

b) General degrees are like Plain Thosai

Local general degrees are like plain thosai. Plain thosai is an institution and can be paired with different kinds of sauces for great taste. General degrees equip someone will skills which depreciate slower than professional degrees so they last longer and flexibility is a valuable trait.

Degrees like Arts, Sciences and Business Administration are high in signalling but the skills are not directly required by the industry. If you analyse a job which requires a general degree, the skills requirements is normally no higher than that of a job which requires O levels. You can talk, operate email and present yourself, your skills qualify.

But things are not that simple.   You will need to understand that the degree that you are getting is more signalling than skill. You will need to write well, speak well and network like an ace.   Inevitably, HR practitioners will look at your honours classification and "provenance" to determine whether they should you, so grades will still matter.At the end of the day, such jobs pay well and continue to have their fair pick of top degree holders.

Over time, plain thosai can beat thosai masala. Plain thosai blends better with the sauces and sometimes thosai masala makes you full too quickly and you don't really enjoy your meal.

You need to signal well after graduation and then develop the domain knowledge with your general intelligence after entering your first job.

Ruthless Tip : Go for prestige. Don't try to pao kao liao in a SME. That's a decision for gimps. Wanna work for an SME, start one of your own.

c) Private qualifications are like Paper Thosai.

Fundamentally there is nothing wrong with paper thosai, but what drives me crazy is that they cost twice as much as plain thosai but it's creation is very wasteful. To make paper thosai, the cook actually scrapes some flour off to create the paper-like texture. It takes lot of effort and sad waste of money to make a paper thosai. It is also very oily.

This is the main issue with Singaporeans and private degrees.

The Singaporean's insist that a degree equips someone with relevant skill and is the key to a better life in Singapore, so they invest more money into private degrees. Private institutions exploit our kiasuism and see us as goldmines.

Problem is that HR practitioners and MNCs continue to see degrees as a signalling mechanism, so they continue to review these private degree brands to be stacked against local universities and expensive overseas elite universities.

This is the rub,

If you invest in a private university, you need to look at your resume and ask yourself the brutal question: What am I signalling to an employer when I show the company my academic history ?

The issue is not that you now have the skills of a graduate.

The issue is whether you can be elevated above the plain thosai and thosai masalas to qualify for the competitive job.

Maybe it's time to consider label this the "Paper Thosai" problem.

If a private institution takes on anyone who can afford the fees and lack quality control, they damage the signalling value of their degree even if their graduates leave with the proper skills.

A degree without signalling value is no better than a piece of paper thosai.

Our government does not want Singaporeans to waste resources getting paper thosais in their resumes, it is unhealthy and the economy cannot have so many people spending so much time in school.

In conclusion, I think ASPIRE is the right move for our government to adopt. Think like an investor. Maybe getting a job is better than buying  a paper thosai qualification. As you will be younger, there will be more years to compound your savings. You can get into sales where your qualifications would not matter at all and may get your first million you are thirty.

P.S. The missing un-named thosai which is all skill and no signalling has not been invented in Singapore yet. It is either the apprenticeship system the government is trying to build on the German model or the idea of development bootcamps. Pray that this idea succeeds and we get a new thosai to munch on.

On IDA, fake degrees, and investing in human capital.

It looks like a previous employer of mine is unable to get itself out of the limelight. First it was Alan Ramos, then xenophobes decided to take issue with the Deputy Chairman's FT status and now there's an issue with IDA hiring folks with dubious qualifications.

As Singaporeans, we need to be fair to IDA.

Thanks to IDA, we have relatively fast internet connections, just try logging in in parts of the US if you do not believe me. As a foot soldier when the hackers attacked government websites, I was proud of the defence we made. I am also fairly pleased with some changes IDA made after I left which gave technologists and geeks a decent functional specialist track.

But this issue of fake degrees is not something alumni like myself would be proud of, but for reasons which has yet been shared on the Internet.

Follow my train of thought here :

a) Society rewards those with the greater success intelligence.

You have to agree with my assumption before I proceed.

I apologise if it sounds elitist.

I define success intelligence as a combination of intelligence, conscientiousness and intensity independent of paper qualifications. This blend of factors allows someone to draw the highest pay and reap the biggest rewards of society.

Unfortunately, companies can only reward a certain percentage of folks with the highest success intelligence.

b) Increasing local university intake cannot broaden the number of great jobs for more citizens.

There are limits to what increasing local university intake can do. If we are lucky, a new cluster of industries can form and generate fresh jobs for graduates for most graduates but otherwise, the number of great jobs remain the same, and the bar will be lifted to admit only graduates with a special honours or cum laude classification.

My first job was with Procter and Gamble, the number 1 employer in Singapore today. They conduct their own entrance exam.

c) This create a problems for Singaporeans who cannot ordinary get into a local university.

Local employers simply do not have great jobs for these Singaporeans who have mid-range success intelligence. But there are plenty of decent or good jobs.

d) Majority of citizens mistakenly associate a degree as the sole requirement to getting a great job.

Once you see another citizen obtain a great job because he went to NUS, NTU or SMU, you start to think how your life would be different had you obtained a degree.

You mistake the degree as key to getting a great job, when in fact, MNCs have only these limited jobs and are looking for the best people regardless of paper qualifications.

e) Getting an overseas or private degree will not resolve your problem.

HR departments were very willing to accept overseas or private degrees in the past when only 15% of the population can get local degrees. These days with 25% local intake for universities, HR departments have plenty of local graduates to choose from, so instead folks with private degrees get treated as non-degree holders in the 1980s with a poorer starting pay or 6 month contract offers.

f) The government wishes to prevent over-investment in education.

Diploma holders getting private or overseas degrees are a huge strain on the economy. They delay getting a decent income for a qualification which makes a little difference to their human capital.

This is an investment mistake. It is tantamount to buying a bond that defaults on its coupons.

The government launches ASPIRE to try to create better jobs for everyone regardless of paper qualifications to provide options to Singaporeans who do not make that "investment mistake".

g) This is where IDA opens a huge can of worms which can erode public trust for the whole of Government.

This explains why IDA has so much to answer for.

Singaporeans are already very upset that they have to settle for second best.

Our polytechnics have higher standards compared to many universities in emerging economies. It does not feel right that a Singaporean who plays by the rules have to contend with foreigners even with unaccredited qualifications, if anything the role of Application Consultant should have gone to a Polytechnic diploma holder with some added industrial training from ISS.

Why ?

Because IDA is a seen as part of the public service which in turn is driving for ASPIRE and wants it reduce instances of poor investment in our human capital assets.

h) The good faith argument is invalid.

The fact that an agency worker took an unaccredited degree in good faith is no defence.

Singaporeans also have good faith in our local institutions.  We want to believe that our local ITE and diploma qualifications can entitle us to local jobs as well.

i) Smart City should start acting Smart.

There is nothing stopping MOE from creating a list of degree mills and unaccredited institutions and placing it in a dataset for hackers to play around with. After all, we are very clear as to what universities our lawyers can come from before they can practice.

We pay taxes, why leave this to the private sector ?

At the moment, I think IDA has to beyond proving that Nisha took an unaccredited qualification in good faith.

What Singaporeans want to see is this:

IDA needs to prove that Nisha's original degree from the University of Mumbai which got her into the organisation in the first place, is better than a top flight computer science diploma student in our local Polytechnics.

If IDA thinks that her degree is better than our local polytechnics, it should be a public declaration so that MOE can reconsider the way we educate our diploma students.

Of course, most folks do not care about personal financial planning !

The financial blogosphere is suddenly abuzz when Cheerful Egg wrote about the indifferent attitude to personal finance.  Upon reading the article. I wanted to throw my hat into the ring as the article may become quite viral over the next few days.

I have only one real point to make.

Why is this a bad thing ?

Almost all value and yield investors know that the profits they extract come either from collecting rentals or exploiting inefficiencies of the market. The reason why we have a comfortable lifestyle without needing to report to a horrible boss or defer to a tyrant is because our investment profits provide that kind of lifestyle for us, and that we spent years honing our investment abilities to provide that level of security for our loved ones.

Of course, if we do not give a damn about the investing public, the existence of financial bloggers who share their insights for free would be paradoxical and a contradiction in terms.

So why do I care ?

It's simple.

I grew up as a geek.

Many of the rich kids in my landed estate and even my secondary school used to bully me because I was socially awkward, rode imitation BMX bikes, and played Dungeons and Dragons. I probably wasn't hip right until graduation.

The fear we geeks have is this - If society does not find a way to reward knowledge and skilled application of theories, we geeks will find our adulthood as unwelcoming as our childhood.  

My blog and the books I publish is not easy to read because I believe that knowledge is power.

Financial independence should not be bought from private bankers simply because somebody comes from a dynastic line of billionaires. I certainly know my childhood bullies will be using their wealth to gain an edge and make the rich-poor gap wider. That idea makes me absolutely furious and I need to find ways to fight back.

For financial independence, from a geek perspective, you must pay the iron price.

You pick up the arcane equations, set up your own brokerage accounts and risk your capital. In the meantime, you learn about the world around you and what kinds of loopholes exist in this universe.

If we apply this geek vision to the rest of the world, not everyone deserves finance independence.

Some deserve to max out their credit cards so that the folks who invest in the banks can have a shot at early retirement. At the end of the day, the conscientious and hardworking folks should rightfully triumph over the lazy poseurs who lack the willpower to save.

It is these folks that us pro-bono financial bloggers want to share our ideas with. For me, I don't care what rich kid snob school you come from - save 50% of your income and invest it and odds are good you'll be a free man before you hit 45. Along the way, we bloggers will provide you guidance from social sciences, the humanities to make your transition to wealth as smooth as possible.

And to the rest of the blogosphere, I have one piece of advice.

People do care - When you succeed, it generates so much cognitive dissonance that they want to know why you won the money game when they haven't.

When I got featured in the Straits Times for becoming financially independent in my thirties, you should have seen the kind of hate that was directed at me in the local message forums. Many of these guys don't even know me as person. But I know that ultimately, as a geek, I knew that I succeeded in getting under their skin by using my rigorous engineering skills in developing my personal finances.

So don't say that people do not care about financial planning.

People do care and they will hate you when you finally reach the point where you don't have to work voluntarily for anyone anymore.

So my final message to financial bloggers is this :

Be a Troll !

Misappropriate the cultural norm of your audience. Find a way to subvert their morality on what is success and happiness.

A cultural norm is that a man in his thirties and forties should be struggling under the heels of a tyrannical boss and paying mortgages.

Now subvert that.

Become financial independent yourself.

Be no one's slave.

Next, you challenge their very notions of hard work and offer them a means to be exactly like you.

Rich is karma neutral.

The whole world will have no choice but to listen to what you have to say.

Getai Ethnica : Beware of the Hipster Agenda !

I tried to let my hair down yesterday after a round of giving tuition to my girls, so I let my friend suggest that I go Chinatown to an event known as Getai Ethnica at this carpark. I normally find such events boring, as I am more interested in ideas, money, lifehacking and current affairs but the prospect of $10 for 4 live bands and beer is irresistible to me so I decided to go have a look.

The crowd was very cozy, these guys would definitely fall under the category of hipsters. The bands are local and unheard of and they play their own brand of music which is not mainstream at all ( But you guys should check out Hubba Bubba, their sings are self-written but fairly radio-friendly).

The highlight of the evening was that I was very surprised to find 3 of my classmates at the event to which I remarked to my friend that isn't it ironic that I have more friends than him there.

Anyway, the point I want to make is that I think Getai Ethnica is dangerous to frugal people.

My expenses turned out as follows :

a) Entrance fee : $10
b) Eating the stuff hipsters eat like Soft-shelled crab mantou burger : $25
c) They don't have my favourite gin and 7-up but they have this hipster equivalent called #88 which tastes exactly like Gin and 7-Up but more deck at a ridiculous $15

The total damage for my short episode was $50 !

But in their defence, if I did not go home, I would have watched a hipster movie called Moonlight in Malaya and heard four local bands live.

Anyway, in spite of the $50 spent, I think I enjoyed myself overall. Getai Ethnica answers a lot of questions which suits and businessmen struggle with, which is how to market to millenials. There is a certain subversive appeal in the guerilla marketing and the use of carparks with great views in an ethnic area in Singapore. I still think it's a sad waste that the carpark was not sublet to more stalls which sell hipster goods. I certainly would have paid $3 for handful of kacang puteh to accompany the movie.

On an unrelated note, I would like to talk about music. This week's The Economist talked about the efforts of data scientists to work on various songs and using this statistical approach know as principal component analysis, scientists narrowed down three major revolutions in music :

a) The first is during the time of the Beatles is the 60s which heralded the arrival of rock and roll.
b) The second if New Wave in the 1980s. This explains why people still get Rick rolled.
c) The last is in 1991 when hip-hop was unleashed.

I was trying to understand why there is apparently no generation between my classmates and myself. I kinda like Miley Cyrus, Taylor Swift, Daft Punk even more than Phil Collins, which my generation loves, but I just can't hack the Teresa Teng and Abba crap which my parents love.

Perhaps the answer lies in the fact that, based on statistical analysis, music has not really changed since 1991. There is little difference between the K-POP hits by Son Dambi and Lee Hyori and the music I liked when I was an undergrad.

Happiness is a Strategy !

I thought I share some of my thoughts with reader John Smith on my views on happiness as he has commented that I seem happy even though I have a fairly busy schedule.

a) Positive Psychology guides Happiness

For a start, I think I have gone beyond subjective notions and feelings towards happiness, Folks bandy about terms like YOLO and "I just wanna be happy." don't seem to just cut it on the happiness front for me. The same goes for the food and travel photographers who are really good at creating this impression of a happy and carefree life on FB.

Instead, I view happiness  in a relatively cold, calculated manner as someone who manages a finance portfolio. Based on Martin Seligman's ideas on positive positive psychology, our happiness is divided into five parts.

Pleasure - The same kind of happiness hipsters tend to inflict on us.
Engagement - Flow addressing challenging and interesting problems at work.
Relationships - The quality of your relationships.
Meaning - How aware one is of one's role in this world.
Accomplishments - Meeting actual goals and getting things society cares about.

If I can employ this framework, I might be able to shed some light into why I seem happy to a reader.

b) My life is not all that pleasurable.

I would fail in the first measure. I don't derive much pleasure left from consumption. These days, I try to collect games which give me a sense of nostalgia. I have managed to bring in Up Front by Avalon Hill, which is a card based war game based on Squad Leader.

If you understand the Bookcase war games played by grognards in the 80s, it is virtually impossible to find someone who is willing to play these games with you today. Rulebooks are harder to read than legal cases and many games are computerized. I mainly buy games to place them in  a cabinet to conjure memories of my childhood days going Leisure Craft are Orchard Point. I have a nice collection of old school D&D books but my group plays the newer 5th Edition system.

As such, I don't really travel or eat great food. At my state of attending summer lectures in SMU, being able to got to KL to spend my money ringgit is awesome enough but I'm fully booked for all my courses.

Of course my troubles and pain arising from law school deserves another article this holidays. It was certainly not pleasurable engaging in the Machiavellian games of group formation and getting hit with guilt trips and complains from various parties.

c) I am fully engaged at law school and life.

Things rapidly improve once pleasure gets written off. Law school means full engagement in legal problem not just from tutorials but also from news events and ideas. Law school gives me the ability to appreciate the deeper game played by Amos Yee's counsel so it's interesting to see the arguments being played out in courts.

Flow comes from solving problems, taking exams, scheming group formation for the next semester, projecting the work load from the combination of classmates and managing the risk within a semester.

d) My relationships are stable.

Stable relationships are good. Nothing amuses me more then reading about "basic bitches" who eat Eggs Benedict and then engaged in relationships which become "complicated". As for me, my daughter is becoming more interactive and is starting to take an interest in my toys and computer games.

As I don't work, I have a fair amount of interaction with my family which I think many working men would envy.

e) I am in the process of finding my life more meaningful

I think this area is where I benefit most compared to other Singaporeans,

Financial independence is not easy for most people. Turning financial independence into something which adds meaning into your life is even harder because I did spend 6 months in a retired zombied state. My JD program is like a liberal arts program for mid career hires, a lot of encounters and concerns actually make you rethink about how you fit into the world at large and the resolution of these dilemmas is done at a safe zone.

I think that in this sense, my community service to help two girls with their E maths gives me the deepest sense of meaning and personal satisfaction, although it is not as saintly as I would position to the readers. Of late, I've been noticing the hypocrisy of these so-called liberals and progressives. If there is a genuine need to help others, volunteering of one's time and money is eminently doable. Why misappropriate the hard earned money from other taxpayers?

f) I continue to be a slave to my accomplishments

Of all the areas of happiness, my largest allocation is in the area of accomplishments. It is the largest source of frustration in my life right now, your financial independence can't really insulate you from that feeling of wanting to sink to the ground when your lecturer believes that your essay is full of shit. To compound my misery, I have been signing up for moots where I will likely argue and get my ass kicked by kids half my age.

I try to think of what I am trying to do relative to middle aged men of my age because if I peg it to my really smart and motivated classmates, depression is going to set in pretty quickly. These kids might kick my ass, but next time some asshole talks me down with well-meaning but pedestrian advice on "Living life with Passion" or "Just try to be Happy", I have know the technique to ruin their day.

With Martin Seligman's framework, I welcome readers to employ this framework to audit their own personal lives and determine whether they are smugly satisfied with their personal outcomes.

It should be noted that a certain component of happiness is genetic and not influenced by actions or your environment. It is entirely valid to argue that my general extraversion and openness to new experience makes it easier for me to happy but my very obvious disagreeableness might detract from it.

A Modern Interpretation of "The Best is Yet To Be"

I am sorry if I'm a little bit late to the game as the fracas on ACS donations took place while I was preparing for my exams.

But first, a little background on myself.

I got fairly average grades for my PSLE but a 255 t-score could have landed me in most schools of my choice along Bukit Timah road so like most kids grew up in upper-middle class landed estates, I had a choice of getting into ACS.

And ACS was a natural choice. I was virtually monolingual, grew up with Ang Moh and Peranakan pals who studied in International schools, and I was a geek who's sole religion involved worshipping Cthulhu, Demogorgon and Asmodeus from my Dungeons and Dragons game manuals.

But two things led me to choose Swiss Cottage, a poorer but humbler school next door, instead.

The first was the ACS donation drive, which I really didn't want to be part of. The second were the church sessions, which was against my religion of Dungeons and Dragons. Between Gary Gygax and Jesus, I can only profess to one faith.

But as I got older, I began to regret some choices I made when I was 13 ( And unlike Gen-Y kids,  we Gen-X kids did choose our schools and professions without consulting our parents ). After all, you only begin to appreciate the accumulated wealth and power of the ACS Alumni as a full working adult.

I do sometimes ask myself how rich and wealthy I would be if I chose the school next door.

In one alternative universe, choosing ACS would have given me different values on spending and consumerism. Depending on which clique I joined, I could have become a materialistic creature of conspicuous comsumption, this blog would have been about luxury watches like Vacheron or Patek Phillipe instead.

In another universe, I could have kept my frugal values and employed the alumni to get into the best jobs in banking and finance. This blog would have articles on my latest frugal purchase using the dividends derived from my dividends - a luxury yacht.

Unlike the Flash in the DC Universe, we cannot create Flash Point moments and ask ourselves how would things turn out if we made a different choice. But we can channel focus our minds to create new insights, like Batman.

My Eureka moment is this :

The founders of ACS are geniuses who are centuries ahead of their time !

"The Best is Yet To Be" encapsulates the wisdom from modern economic thinking which would not even have been contemplated 2 years ago.

It puts everything Singapore elite schools do in the modern context.

Now follow my logic :

a) Everyone who goes to a school like ACS is concerned about how to preserve wealth over the generations. No matter what you seem to do, wealth inevitably fades after 3 generations. This is a primary problem of nepotistic succession.

b) Enter  a school which has a policy of enforcing or at least applying a lot of peer pressure to make students seek donations. The rich families will just write a cheque so would be unfazed by the requirement. The poorer families will do exactly what I did - find a school of similar standards and go somewhere else. Every school is a good school. Some good schools do not ask for donations.

c) The school which enforces donations eventually concentrates the richest scions of the dynastic families which builds close collegiate ties with each other. Bonds are built over rugby games and swimming competitions.

d) Now enter modern economic theory.

e) Thomas Piketty hypothesizes that (r > g). Investment returns trump return on human capital over time. Wealth inequality can only increase over time if Piketty is right. So dynastic families already have accumulated wealth and will use it to gain access to the better schools.

f) ACS becomes unstoppable. Rich families stick to it's brand and alumni, inadvertedly concentrating investment wealth to generate more income inequality between the haves and the have nots.

g) Ministry of Education makes it worse. If every school is a good school, then only the alumni will make a difference and distinguish the good schools from bad.

<< Reality stops here. What follows is my prediction on what will happen next >>

h) Soon, the smartest kids who figured out what I did start enrolling into the schools with the richest Alumni. The advantages of a wealthy alumni outweighs the hassle of donations.

i) Which is exactly what the dynastic families want. Superior intelligence in their descendants to perpetuate their wealth further.

j) Assortative mating will start to take place which has already widened the income gap further in countries like the US and the UK. ACS marries MGS. RI marries RGS.

k) Everything comes full circle. Unification of mind and wealth. Wealth can perpetuate for generations if it is powered by intelligence and conscientiousness. And the most intelligent and conscientious will be smart to enroll in a school with the richest alumni.

This is why "The Best is Yet to Be", the founders foresaw the events which would happen up till today and built a capitalistic superpower on this small island.

And the signs are already there...

Economic indicators with Singapore's wealth gap support this idea of mine.

In other parts of the Internet, some female bloggers would only date ACS boys.

I don't think I lost the game of life because I did not choose ACS. I do have great friends amongst them who are noble, generous and would never support widening income inequality.

But this is a valid concern about future generations of Singaporeans.

I hope my daughter will not be too late for the game. I can't choose my daughter but I can certainly choose my son-in-law.

No prizes for guessing which school gets first choice.

What can we learn from Albert, Bernard and Cheryl ?

By now, most readers would have heard of the maths problem which went viral two weeks ago.

You can access the information about the original problem here.

This blog article is not about the mathematics behind the problem but about the behaviours of the folks who attempted to tackle the problem on social media which I think can teach us a thing or two about failure and living lives of mediocrity.

I'd like to address two behaviours in this article :

a) The behaviour of blaming the folks who set the question.

The first behaviour is that some folks get bitter when they fail to get the correct answer to the problem. The question has been set by the folks who run the Math's Olympiad and its original purpose is to test the logic of a 16 year old competition participant. Although the question was designed with an answer in mind, some folks came up with a fairly credible second answer and then proceeded to start a campaign blaming the question setter for introducing ambiguities into the question.

b) The behaviour of rallying others to be indifferent to questions of logic as they have no significance in practical life. 

The other group of folks are those who needed to get into a discussion just to highlight how pointless the question is in daily life. This behaviour is baffling to me as it would be a lot more economical to simply ignore the entire discussion thread, but no, these crusaders of practical living are proud of their failure to provide the answer to the problem. They want more people to do the same because this question does not reflect the daily challenges of real living.

Both groups of people miss the point behind Mathematics.

I think the Spirit of Mathematics is about curiosity and the willingness to confront complicated problems. You might not get a problem right the first time round, but if you examine how answer is arrived at, you get access to a heuristic, a procedure for solving all similar problems. Knowing the heuristic allows you to crack the problem in seconds instead of hours. This heuristic can be then be applied to other problems you face at work or in your relationships.

Complex numbers which involves the mathematics of imaginary numbers is almost worthless when you study it at your 'A' levels. But in engineering school, it is used in the modelling of alternating currents which powers all our homes.

Regression mathematics does not amount to very much, until you realise that psychologists have found a strong correlation between conscientiousness, health and stable marriages so you might want to look out for a conscientious person to be your life partner.

And don't even get me started on retirement planning. Logic and mathematics is the first step to financial planning.

What do you need to cut out of your budget so that you can you can invest it in a portfolio which would maximise the probability of you becoming a millionaire before you reach your 40s ? These problems are way more complex than just finding out when Cheryl's birthday is.

I'm going to go out on a limb and present a hypothesis to the readers.

The folks who blame the question setters are the same kind of folks who cannot take ownership for their own problems. When they fail, a lot of folks are going to be blamed for their own personal disasters.

As for the 'practical' folks who think that the problem is irrelevant will fall prey easily to get rich quick schemes. Expect them to use a TA when positioning their portfolios.

 

Survived another round of exams...

Yipppeeeee ! I just finished my last paper yesterday...

The sad thing is that my summer term starts next Monday so I have about 4 days to take it easy and then the intensive reading assignments start all over again. I have signed up for two summer terms, which mean about 9 hours of seminars for 8 consecutive weeks.

There is some perverse logic to spending as much time having active lessons every week during the holiday season. The most important reason is that I save more money when am actively engaged in school, I just have to pay for bus rides and eat at the cheap hipster cafe that gives SMU students a discount.  School then throws legal problems at me to solve which I thoroughly enjoy so I will not find have to pay for any other distraction to keep my mind occupied.

Anyway, I have many things to talk about over the next few days so here's a quick update.

a) Markets seem too good to be true.

I have no idea why the STI index has punched through the 3500 mark. There seems to be no resolution to the Russia-Ukraine war. There is a fair chance of a Greek default and China is facing slower growth. Even more illogical to me is that my REITs are doing well when supply is inching up for industrial properties. Maybe it's the low oil prices behind the optimism.

I have not been buying any more counters and have been carefully socking my dividends away to pay for my final instalment of my school fees, with some luck, I would be able to sock away all my planned 2015 expenses in a separate account before end-June. This means that I can start accumulating wealth again in September. I just hope that the market will not be above 3600 by then.

Finance-wise, so far so good, I'm still in a better financial position today than my last day of paid employment. This is my insurance against workplace agism when I finally graduate from SMU.

b) Not reading very much. Reading The Economist just takes up all my reading time. 

I finally took the plunge to take up a long-term subscription on the Economist and it is replacing the usual non-fiction readings I normally have for the holiday season.

The Economist is now a fairly credible source of ideas for me these days. My legal training now allows me to absorb the material with a new pair of cognitive lenses. My finance training has always made reading the Schumpeter and Free Exchange section with ease and my engineering background makes the Science sections a breeze to digest.

My readings have, thus,  slowed down dramatically.

I am only reading one book right now, The Rich by John Kampfner, a history book which documents how rich folks accumulate their wealth across the centuries. After this, I'm going to read The Grace of Kings by Ken Liu, kinda like a Game of Thrones in fantasy China.

c) Not gaming much either

Summer term is not a good time to game as my schedule is packed. Instead, I'm just taking it slow and indulging in a bit of nostalgia. I am slowly getting into vintage games and managed to get myself a copy of Up Front, an Avalon Hill wargame of squad level combat.

I also managed to order a battered copy of Squad Leader from the same company.

These games are not playable because you can easily write a piece of software incorporating game rules these days.

On the RPG I am getting pretty hyped up on the Fantasy AGE system by Green Ronin games. I am also fairly excited by the work to reinvent the Pathfinder RPG through the Pathfinder Unchained book. While I do not play these systems, they will influence I am doing to create some house rules for D&D5E campaigns.

d) My community service work

I have been working with my girls on their maths for close to two months. I think this deserves it's own blog article at a later time.

Anyway, this is what's been happening to me.

There'll be more articles over the weekend.

Passing of a Giant...

I am writing this article from SMU Labs as I'm in a middle of hell week where I would need to make two group presentations this week.  Ordinarily, there would not be a blog update until I am done with all my work.

But today is a very sad day and I think a blog post dedicated to Lee Kuan Yew would be appropriate. 

I did not start out as a huge fan of our government policies. In Young PAP BBS, you can find traces of me complaining about the foreign talent policies about a decade ago, but as I got older and started building my portfolio, it became blindingly obvious that Singapore does reward hard work, frugality, study and astute planning. Income taxes have been slowly displaced by GST and we can experience a high standard of living if we can make do with not owning a car. 

As with all dividend income investors who find that they can stop work in their late-30 ( And there's not much of folks like me around in Singapore right now ), we owe a great debt to the policies which makes all this possible. Single digit income taxes and no expropriation of capital gains by the government goes a long way towards a prosperous investor class.  If I were an American, I think I would still be paying off my student loans from my first degree, much less paying off my JD with my investment income and enjoying my second lease of life as a student. 

I think of late,  a lot of anti-LKY people are speculating whether it is time to loosen up after his death. I do not know what kind of Singapore they ultimately want. I think that no matter how they articulate their desires, ultimately their fondest wish is to be on top of everybody else in this society over the long term. But in the short term, they want to enjoy the welfare which our ancestors worked hard for after independence. 

I think LKY's death should lead us to think twice about the value of reforms and change. After all, the hardcore pragmatism which took us here got us from third world to first world status. 

Singapore needs to take this opportunity to go back to good old fashioned values of hard work, savings and self-reliance. 

Not hand-outs or welfare misappropriated from tax payers. 

Update : Chinese New Year is over !

It has been two Chinese New Year holidays since I have left the workforce.

Here's a quick update and some thoughts about life  in general.

a) Starting community service tomorrow.

As a JD student, SMU mandates 30 hours of service to the community service which must be done in order to graduate with a law degree. The Sikh Welfare Council has very kindly given me two students to provide tuition for the rest of 2015.

So beginning tomorrow, I will be teaching E Maths to these two students, I look forward to making friends with this family and would like see myself as a life coach rather than a maths tutor.

This is the first time I'm doing some serious good in my life. At the back of my mind, I keep telling myself that complete acts of altruism are rare. I should do a good job for myself - if my students succeed, it's a great way for me to re-skill myself as a tutor while studying just in case things don't really work out after 3 years.

b) My classmates just upped their human capital over 2 weeks of mid-term holidays.

When school reopened this week, everyone looked a bit despondent but I felt that they shouldn't be. Immediately after announcing the budget, the Government gave all my classmates a big bonus by restricting the list of universities with recognized law degrees by 8. Many argued that the impact to my batch would be minimal as students currently studying in those Universities would not be impacted.

On the whole, I think it bodes well for my classmates as firms begin to form rational expectations about a crunch in lawyer supply in the future and ramp up hiring for the present. But this is just the amateur economist in me talking.

c) Consolidated my portfolio for the new year.

On the financial front, I have finally decided to break my portfolio down into three parts so that it can be managed separately. Currently my 31-counter portfolio breakdown is Equity/REITS/Business Trusts at a ratio of 30%/40%/30%.

My overall yields last year did not meet expectations as it ended at about 7.2% but it's still a decent figure which paid my mortgages, school fees and family expenses. This year, I'm ramping up my yields to my desired 8%. I think the weaker SGD may help in this regard.

Overall portfolio went up about 3%  in spite of minimal reinvestment of my dividends.

d) Why I feel like I am GIC or Temasek. 

I'd just like to share one final thought about the politics of employing reserves to create an inclusive society.

Just like Temasek or GIC, I struggle with my finances in spite of the margin of safety that I have built for myself. If I were to employ half of my capital gains since I left the workforce, I would not have to struggle with kopitiam yong tao fu everyday because my hefty law school fees would be resolved at the snap of my finger. It also does not help that I have recently installed Carousell on my Android phone and have been hunting for vintage RPGs and Avalon Hill War games.

I think fiscal prudence and frugality is an important part of Singapore's pioneering spirit which made us what we are today. Spending should not be a trivial case of opening the floodgates and then justifying to oneself that we can afford something or whether its sustainable over the long term.

There is value in thinking that money that is not spent can provide as much utility as money which was used to make lives better over the short term. With high reserves, currency raiders would think twice before attacking our economy. In the event of huge recession like that in 2009, permission from the President can be sought to unlock the reserves to help us recover faster.

Wealth is confidence, you don't need to spend it for it to make you feel good.

As such, while Tharman remains my favorite minister. I don't agree with the shift to the left even though we can afford it and it's sustainable because we've always been conservatively fiscally.

We should simply continue to be frugal and not allow that entitlement mentality to creep into this nation that we've been building for the past 50 years.

The problem with skills-based education.

One of the more populist changes made to the education is skills-based education.

Skills-based education is a very attractive idea. If a person is skilled or qualified enough to do the job, he should be entitled to it. The middle class, middle income voter is more likely to support it if it subtly promises to overhaul the perceived unhappiness about the education system or 'meritocracy'.

One idea which is repeatedly flashed on my FB feed is the idea that our best students are exam smart, lack emotional intelligence and practical skills. Our top students are just simply sponges who rely on memory to get ahead of the curve.

I don't think a skills-based education and associated ideas can resolve the problems of the middle class. If you are in your late thirties or early forties like me and harbor fantasies that you are a unique snowflake with awesome technical skills but is constantly brought low by the education system and the elites, you probably need to take a good look at your own life-choices before casting blame at the government or the policy makers.

That being said, here are some brutal hard truths which some readers might find hard to swallow.

a) An education system not only has to train citizens, it also has to sort citizens based on conscientiousness and general intelligence, traits which are useful in nation building.

The first hard truth is that even if someone is skilled enough to do something that pays well, the fact that many people with the minimal skill-set are available just means that some folks with the skills cannot be matched with the job. The employer can choose an employee with better communication skills and is more conscientious ( with higher paper qualifications ) to pick up the job.

The case in IT is simple, there are many systems engineers who have the NCC Diploma and can run a script or administer a server. The one who gets to become a senior systems engineer can track his servers on spreadsheet without being told  and can communicate well with the customer.

The hard truth is that another role of the education system has to sort citizens based on their conscientiousness and general intelligence independent of actual technical skills. This sorting mechanism has been refined over the years to target individuals who 'deserve' the highest paying jobs in society.

Bad news for most folks is that this sorting mechanism is actually improving, exams are getting so hard that you need to be a pretty talented person to balance school with CCA activities. Just look at the PSLE maths questions these days, I bet even teachers need guidance on how to solve them.  

b) A skills based education does not mean that rote learning is defunct. 

When I was managing operations in SGX, I had an incident that the counter M41 was down, When discussing the incident, I was able to explain to the customer that some folks cannot buy or sell the MIIF counter. The SGX staff were impressed that I did not need to refer to the ISIN file to know what a stock counter refers to, but they are not aware that I am a dividends investor who know my codes due to time I spent monitoring my portfolio.

As someone back in the education system studying to become a lawyer, there is a misconception that we rely a lot on memorizing the code of laws to do our work. Nothing can be further from the truth,

The objective of professional mastery ( and I should be qualified to say this as I am trained to be an engineer, investment analyst and now trying to be a lawyer ) is met by creating a knowledge framework. This requires the ability to sort information and engineer some form of hierarchy to store them in a logical manner to assist in problem solving and recall.

In software engineering, it can be understanding data structures in a framework of classes and knowing how instantiate the right object to solve a engineering problem. The solution requires an assembly of the database, business logic layer and a presentation layer. No solution is workable without consideration for user friendliness and ergonomics.

In finance, various asset classes can be commonly described by statistical properties like the mean, variance, skew and kurtosis. These assets are then assembled into portfolios, which ultimately are aligned with a person's life goals.

In law, offer, acceptance, consideration and intention to create legal relations form the contract, which are vitiated by factors like mistake, misrepresentation, illegality and duress which are then broken down into further sub-categories. Chunking up from contracts is the notion that some promises need to be enforced by society.

Regardless of what field we are in, general intelligence picks up  the concept, generates the hierarchical trees in the form of Mind-maps and then commits the resultant chunks into memory.

Learning cannot be distanced from rote learning. But with a high general intelligence you can chunk your knowledge into components that make rote learning possible and effortless.

c) Even if skills-based education is properly implemented, it would not resolve a person's unhappiness with the system. 

I think this is the most brutal part of my essay.

I'm starting to see patterns in some of my anti-government friends and their own frustrations that would lead them to do horrible things like curse an old man on his hospital bed and spread news about his death even when it has not been confirmed by the press. Worse, they delight on seeing the son get diagnosed with cancer. My dad has a stroke about 3 years ago, even if I disagree with PM Lee's policies I should be human enough to acknowledge his pain at the prospect of losing his dad.

Back to my philistine friends, the change they want is neither fairness nor equality. The change they want is something that will put them on top. On top means big flashy cars, branded watches and effortless living ( via wining Toto ! ).

With ASPIRE and a skills-based education system, what would happen is that ITEs, Polys and JCs will be given more or less equal standing within 20 years, all of which would provide a reasonable chance of getting into a university. The effect is that the pool of talent in the top 20% of the cohort will then redistribute themselves evenly between the three institutions. The top 25% will continue into University and still take on the best paying jobs the market.

But regardless of how the education change, hierarchies remain the same.

Some stigmatization would end, but the corporate will develop new forms of discrimination. In the future, companies in Singapore may refuse to hire Australian graduates or local graduates with no honors classification.

In conclusion no government, PAP, WP, SFP or NSP can put my Phillistine friends on top of hierarchy.

Hope you've enjoyed this brutal essay.

Gong Xi Fa Cai !