This week is a good week.
Some dividends showed up in my bank account and it was running dry after I overspent during the 5 days between my last exam paper and the start of summer term. I set aside all my family expenses during the early parts of a three month dividend cycle. What remains in my bank account is a bare minimum I have to pay for my personal entertainment, food and transport.
I have spent over 30 months without a pay check and managed to do this without touching my capital and living entirely on dividend pay-checks. My family has no earned income. In the process, I have also paid 30 months of my mortgages and my entire school fees.
No other society can make it so easy for someone to able this with only 15 years of working life in IT.
But I'm also not a romantic about our society.
The low income and non-existent dividend taxes I needed to build up my portfolio is almost unique to Singapore. The price we pay is that there is no welfare. Every negative externality like cars and alcohol are taxed aggressively. The primary stance towards a person who is seeking help is for them to engage in self-help. Compared to Socialist Europe and all those countries Singaporeans flee to, we can be harsh indeed.
It becomes disturbing that there are now calls for Singapore to become less transactional, to be less kiasu, and to be less optimised with our policies thinking that it would make our society better.
What do 'Social Democrats' and liberal brownshirts want to achieve when what they truly desire is to tax everyone to pay off a smaller proportion of the population which might consist of some needy fellow citizens, but would in reality consist of mostly citizens who are trying to game the system.
If they succeed, I expect the investment community to be the first to suffer.
Liberals in attempting to get rid of the "no free lunch" approach in Singapore will, in the process, eliminate the "cheap lunches" we've had for the past 50 years.
Let me illustrate with an example of unemployment insurance, a hot by-election topic which, ironically, would have benefitted me greatly when I transitioned into law school.
We can actually create a very rough estimate of the cost of unemployment insurance to the tax-payer. Suppose there are about 3.5m citizens drawing $3770 as median income. Suppose this policy will increase the number of folks leaving work to about 5% of our population every year. If each instance of unemployment will result in a total pay-off of about 6 months of salary in total, the price tag to the tax-payer will be close to $4b, about half of our personal income tax collections in 2014. And this does not include the cost of hiring social workers to administer this payment.
The income tax of everyone working here must increase by 50% to cover the price tag of this unemployment insurance !
Now suppose you create this insurance yourself as a median income salaried worker, all you need to do is to save about $23,000. If you can save $500 of your earned income every month, 4 years of work will secure a contingency plan for your unemployment, not to mention a small investment income stream if you were to keep working.
Of course, my solution cannot cover the weakest members of our society. I wrote this article to illustrate to everyone is that there is a communal solution or an individual solution to every problem.
I've done my small part and have overclocked my community service hours in 2015 to help one disadvantaged family by giving math tuition to their two kids. It remains my most cherished memory in SMU. I see more pro bono hours ahead when I return to the workforce in 2017.
I propose that liberals do the same so that they can assist and gain exposure to the weakest members of our society using their own personal time and resources instead of harping on why Singapore is such a cold, transactional society.
Wednesday, April 27, 2016
Sunday, April 24, 2016
Why IT engineers are similar to cleaners in Singapore ?
Do not let the title distract you from the central message which I will bring to you today - There is no better time for a A level graduate to go for an engineering degree with the recent reforms announced by the government.
Before I get to that, I will first answer the question as to why IT engineers and cleaners have quite a bit in common. If you read the article in Labourbeat by MP Zainal Sapari, one of the key reasons cleaners did not enjoy an increment for a decade was due to outsourcing. Outsourcing was then led by the government which made the decision to hire cleaning services from private sector providers. This cut-throat competition forced these private sector providers to make "suicide bids", bids which forced unskilled and uneducated workers to take on work at a lower price. This was the primary reason why cleaners enjoyed a lower standard of living over the years.
At least IT Engineers were in a similar situation for the past decade. Outsourcing and a liberal foreign talent policy basically meant that engineering work could be done at lower and lower prices. Outsourcing MNCs eventually tried to sell their services also at cut-throat prices but if you really examine the kind of labour they deploy in IT departments of most of their customers, it was mainly staffed by engineers with the barest qualifications. An NCC diploma can be assigned a senior systems engineering role and then deployed to support a statutory board. If you fire him a decade ago for his attitude problem, he resurfaces under another statutory board with another MNC because no one wants to do tech support. The net effect is that engineers don't get no respect because we are support staff and people who meet us just spit on us when systems are down.
But engineers are not unskilled labor. We can fight back. We just reinvent ourselves as bankers and investors. During the boom town years in banking, a Masters in Engineering can easily stop doing engineering work and get a starting pay at $5,000 in a bank.
Singapore is now facing the consequences of this mistreatment of technical talent. Trains are breaking down and startups cannot find the skilled programming workforce to create the apps which can change the world. Worse, the oil and finance sectors are not doing too well these days.
Which brings us to the new policy of paying engineering talent $4,000 a month for fresh graduates.
I think this is a powerful game changer for the whole industry. Given that our GDP growth is struggling to reach 2% a year going forward, a 20% increase in engineering salaries can be seen as 10 years of progress. Kudos to the government for doing something significant for a change to preserve technical talent in Singapore !
A promising engineering student now has a $4,000 baseline to look forward to upon graduation. SMEs who cannot pay top dollar for engineers now has to work with the polytechnics to provide apprenticeships to build a talent pool for themselves. The Silicon Valley startups are unaffected because engineers cost about $120,000/yr in the US and Singapore remains fairly competitive in this arena.
Now is the perfect time to do engineering and computer science.
But here's some more advice :
a) Time to beat the Budget Babe ! Better save at least $30,000 a year from your excess income.
My friend Budget Babe became viral because she claims to save $20,000 a year. A fresh engineering graduate with a $3,600 take home pay with a 1-2 month bonus should target a $30,000 savings in his first year of work. The great thing about engineering as a career is that its unpretentious and your career progress will not be impeded if you do not dress well or spend lavishly. Just carry on living like a final year university student.
b) Your second degree can be something that does not depreciate so quickly.
Moving forward, I actually think that engineers have a bright future for at least a decade. But with $30,000 savings a year, it only takes 2-3 years to save enough to consider an advanced degree like the MBA, MPA or JD which provide alternative career paths. But that's only if engineering stops being fun by then.
Even better, you can continue with the CPA or CFA without really quitting your day job.
Domain skills can be used to complement your technical skills. The difference is that now you can actually afford it at a younger age.
c) In the worse case, you can just treat your engineering career as bonded slavery for 10 years by learning how to invest well.
I won't go as far to say that engineering work is slavery but some of you might be unfortunate enough to be doing government procurement. In that case, saving $30,000 for ten years can still net you a portfolio of at least $300,000. This will produce $2,000 a month at 8%.
You can then look at different options later. If you remain single at age 35, there are many career options available to you in the private sector or other countries. Good news is that under this government guarantee, you can limit your bondage to 10 years which is great compared to engineers in my generation !
But I think a true technical professional should just say no to a career in government procurement. Trust me on this one !!!
d) You are still likely to be "betrayed" within 15 years.
Betrayal is a very strong word but when that happens, I doubt Singaporeans will become angry with the government for systematically eliminating your technical jobs when you reach your 40s. Both oil and gas, law and finance had its heyday with smart guys getting high salaries by joining these sectors. If anything our government is likely to be overly compassionate compared to the private sector.
No career path will survive prosperity for too long.
Establishing Singapore as a Smart City will take about 10-15 years of effort and engineers will experience rising standards of living compared to other professions. As in the past, the cost structure to sustain this hierarchy of technical talent will become too high and when you reach 40-something years old, the young 20-somethings then will want to know why you are so special and why are you put in this pedestal. You will become a burden to the tax-payer who will consider you a "jiak liao bee".
This is the ultimate advice, if you want to see how society will treat you when you hit your 40s. Just look at how society treats the 40 year olds now. But hopefully, you would have done something to reinvent yourself before the government reinvents Singapore decades down the road.
In summary, while my generation of engineers would probably not be able to benefit from this development, Millenials now have a pretty solid reason to study engineering or computer science. Imagine a career where you get to play with all sorts of toys, hang out with other geeks, dress badly, and still take home $3,600 a month on your first year. If the work does not suit you, the higher starting salaries effective nets you an option for a career change within 3 years.
I can see definitely see the smart geeks moving back from Law and Medicine now.
See, this is an optimistic post !
Before I get to that, I will first answer the question as to why IT engineers and cleaners have quite a bit in common. If you read the article in Labourbeat by MP Zainal Sapari, one of the key reasons cleaners did not enjoy an increment for a decade was due to outsourcing. Outsourcing was then led by the government which made the decision to hire cleaning services from private sector providers. This cut-throat competition forced these private sector providers to make "suicide bids", bids which forced unskilled and uneducated workers to take on work at a lower price. This was the primary reason why cleaners enjoyed a lower standard of living over the years.
At least IT Engineers were in a similar situation for the past decade. Outsourcing and a liberal foreign talent policy basically meant that engineering work could be done at lower and lower prices. Outsourcing MNCs eventually tried to sell their services also at cut-throat prices but if you really examine the kind of labour they deploy in IT departments of most of their customers, it was mainly staffed by engineers with the barest qualifications. An NCC diploma can be assigned a senior systems engineering role and then deployed to support a statutory board. If you fire him a decade ago for his attitude problem, he resurfaces under another statutory board with another MNC because no one wants to do tech support. The net effect is that engineers don't get no respect because we are support staff and people who meet us just spit on us when systems are down.
But engineers are not unskilled labor. We can fight back. We just reinvent ourselves as bankers and investors. During the boom town years in banking, a Masters in Engineering can easily stop doing engineering work and get a starting pay at $5,000 in a bank.
Singapore is now facing the consequences of this mistreatment of technical talent. Trains are breaking down and startups cannot find the skilled programming workforce to create the apps which can change the world. Worse, the oil and finance sectors are not doing too well these days.
Which brings us to the new policy of paying engineering talent $4,000 a month for fresh graduates.
I think this is a powerful game changer for the whole industry. Given that our GDP growth is struggling to reach 2% a year going forward, a 20% increase in engineering salaries can be seen as 10 years of progress. Kudos to the government for doing something significant for a change to preserve technical talent in Singapore !
A promising engineering student now has a $4,000 baseline to look forward to upon graduation. SMEs who cannot pay top dollar for engineers now has to work with the polytechnics to provide apprenticeships to build a talent pool for themselves. The Silicon Valley startups are unaffected because engineers cost about $120,000/yr in the US and Singapore remains fairly competitive in this arena.
Now is the perfect time to do engineering and computer science.
But here's some more advice :
a) Time to beat the Budget Babe ! Better save at least $30,000 a year from your excess income.
My friend Budget Babe became viral because she claims to save $20,000 a year. A fresh engineering graduate with a $3,600 take home pay with a 1-2 month bonus should target a $30,000 savings in his first year of work. The great thing about engineering as a career is that its unpretentious and your career progress will not be impeded if you do not dress well or spend lavishly. Just carry on living like a final year university student.
b) Your second degree can be something that does not depreciate so quickly.
Moving forward, I actually think that engineers have a bright future for at least a decade. But with $30,000 savings a year, it only takes 2-3 years to save enough to consider an advanced degree like the MBA, MPA or JD which provide alternative career paths. But that's only if engineering stops being fun by then.
Even better, you can continue with the CPA or CFA without really quitting your day job.
Domain skills can be used to complement your technical skills. The difference is that now you can actually afford it at a younger age.
c) In the worse case, you can just treat your engineering career as bonded slavery for 10 years by learning how to invest well.
I won't go as far to say that engineering work is slavery but some of you might be unfortunate enough to be doing government procurement. In that case, saving $30,000 for ten years can still net you a portfolio of at least $300,000. This will produce $2,000 a month at 8%.
You can then look at different options later. If you remain single at age 35, there are many career options available to you in the private sector or other countries. Good news is that under this government guarantee, you can limit your bondage to 10 years which is great compared to engineers in my generation !
But I think a true technical professional should just say no to a career in government procurement. Trust me on this one !!!
d) You are still likely to be "betrayed" within 15 years.
Betrayal is a very strong word but when that happens, I doubt Singaporeans will become angry with the government for systematically eliminating your technical jobs when you reach your 40s. Both oil and gas, law and finance had its heyday with smart guys getting high salaries by joining these sectors. If anything our government is likely to be overly compassionate compared to the private sector.
No career path will survive prosperity for too long.
Establishing Singapore as a Smart City will take about 10-15 years of effort and engineers will experience rising standards of living compared to other professions. As in the past, the cost structure to sustain this hierarchy of technical talent will become too high and when you reach 40-something years old, the young 20-somethings then will want to know why you are so special and why are you put in this pedestal. You will become a burden to the tax-payer who will consider you a "jiak liao bee".
This is the ultimate advice, if you want to see how society will treat you when you hit your 40s. Just look at how society treats the 40 year olds now. But hopefully, you would have done something to reinvent yourself before the government reinvents Singapore decades down the road.
In summary, while my generation of engineers would probably not be able to benefit from this development, Millenials now have a pretty solid reason to study engineering or computer science. Imagine a career where you get to play with all sorts of toys, hang out with other geeks, dress badly, and still take home $3,600 a month on your first year. If the work does not suit you, the higher starting salaries effective nets you an option for a career change within 3 years.
I can see definitely see the smart geeks moving back from Law and Medicine now.
See, this is an optimistic post !
Thursday, April 21, 2016
Introducing BigScribe and the Crowdfunding e-book.
As a single personal finance author and blogger, my capabilities are limited.
However, as a coalition of financial bloggers in Singapore, our potential is limitless.
A few of us financial bloggers have pooled our expertise, effort, and a small amount of capital together to form BigScribe Pte Ltd. The aim is to create products of higher quality for the Singapore investing public and find modest means of revenue through advertising.
Our next product is on crowdfunding which has taken the financial world by storm. Through crowdfunding platforms, regular investors can invest small amounts of money money to SMEs which can have very attractive returns of up to 30%p.a.
But there is no free lunch in Singapore.
Local banks may avoid providing loans to risky small businesses for valid reasons. To ensure that investors do not get burnt too badly from a default event, we've prepared a guide on how to participate in this financial revolution.
This e-book is free, you may download it by clicking the link below :
However, as a coalition of financial bloggers in Singapore, our potential is limitless.
A few of us financial bloggers have pooled our expertise, effort, and a small amount of capital together to form BigScribe Pte Ltd. The aim is to create products of higher quality for the Singapore investing public and find modest means of revenue through advertising.
Our next product is on crowdfunding which has taken the financial world by storm. Through crowdfunding platforms, regular investors can invest small amounts of money money to SMEs which can have very attractive returns of up to 30%p.a.
But there is no free lunch in Singapore.
Local banks may avoid providing loans to risky small businesses for valid reasons. To ensure that investors do not get burnt too badly from a default event, we've prepared a guide on how to participate in this financial revolution.
This e-book is free, you may download it by clicking the link below :
Tuesday, April 19, 2016
Exams are over ! Quick update !
Just a quick update.
a) Exams are over
I am glad that my most intense semester is over. It should be smooth sailing towards my graduation in 2017.
b) Secured 6 weeks worth of internships
I was actually interviewing with law firms while preparing for the exams, while there still some anxiety as I have yet to obtain a Training Contract, at least I can say that I have met my graduation requirements. I will be spending the next few days hunting for work after graduation.
c) Financial markets recovery is still intact
While I am less optimistic about the Singapore economy, the markets are doing ok. Will have a more detailed update in a few days time.
d) Readings
It might be mind boggling to some but I actually finished reading the Path. This is a page turner and I finished it in two days while preparing for my Equity and Trust exams. This is a fascinating exploration of Chinese philosophy which has become the third most popular course in the Harvard campus.
The authors took a lot of pain to distill Chinese philosophy into its essence and made it relevant for millenials and knowledge workers. Of course, to make it happen, certain aspects of Confucianism and Taoism would be ignored.
I wish I could explain personal finance that well.
e) Recreation
The problem with me is that summer term starts next week and I will be back having nine hour lectures a week. This makes recreation a serious priority until Sunday.
I can't play a very intense game like XCOM 2 until next week and will probably be installing Mortal Kombat X into my PC for some fun. I would also be completing Gundam Iron Blooded orphans over the weekend.
I will be talking about the reforms to Engineering salaries in my next post...
Today is my daughter's birthday and I should focus on celebrations instead.
a) Exams are over
I am glad that my most intense semester is over. It should be smooth sailing towards my graduation in 2017.
b) Secured 6 weeks worth of internships
I was actually interviewing with law firms while preparing for the exams, while there still some anxiety as I have yet to obtain a Training Contract, at least I can say that I have met my graduation requirements. I will be spending the next few days hunting for work after graduation.
c) Financial markets recovery is still intact
While I am less optimistic about the Singapore economy, the markets are doing ok. Will have a more detailed update in a few days time.
d) Readings
It might be mind boggling to some but I actually finished reading the Path. This is a page turner and I finished it in two days while preparing for my Equity and Trust exams. This is a fascinating exploration of Chinese philosophy which has become the third most popular course in the Harvard campus.
The authors took a lot of pain to distill Chinese philosophy into its essence and made it relevant for millenials and knowledge workers. Of course, to make it happen, certain aspects of Confucianism and Taoism would be ignored.
I wish I could explain personal finance that well.
e) Recreation
The problem with me is that summer term starts next week and I will be back having nine hour lectures a week. This makes recreation a serious priority until Sunday.
I can't play a very intense game like XCOM 2 until next week and will probably be installing Mortal Kombat X into my PC for some fun. I would also be completing Gundam Iron Blooded orphans over the weekend.
I will be talking about the reforms to Engineering salaries in my next post...
Today is my daughter's birthday and I should focus on celebrations instead.
Saturday, March 26, 2016
Personal update and short break from blogging.
Here's a personal update from me just before I begin exam preparations.
a) Financial markets
I think my financial situation is much better than a couple of months ago. Markets have recovered a bit, but may dip downwards over the short term. The end of March would see a round of dividends coming in which would be applied to my next three months of living expenses, with all the medical emergencies behind me, I should be able to park some money back into the markets.
But the better news for folks with home mortgages is that SIBOR is flat. My belief is that the Fed would not raise interest rates as much as what the pundits would like. China remains the biggest risk for investors.
Of interesting note is that the financial media is starting to talk about this thing called Smart Beta ETFs which have yet to appear on the local scene, maybe I will get to talk about it in further detail after my exams.
Another piece of good news is that Singapore just launched two equity crowdfunding portals. Unfortunately, I do not qualify as an accredited investor yet so perhaps one reason to get back to the workforce would be to work towards that second million in investment assets. My position is that its high time regulators stop protecting retail investors and allow perhaps us to invest $50,000 into an equity crowdfunding platform - some investing is emotional and aspirational and some folks just wanna own a tiny slice of an aquarium. ( Even I wanna own a game-shop one day but don't want to hang out with smelly Magic Players. )
I do hope to do one more research paper on this topic.
b) Law School
I was very lucky to clinched one internship for the holidays so I was at least able to fend off some anxiety over graduation requirements but my studies this semester is a huge mess as the subjects I've taken are perhaps one of the hardest in the JD program (Equity and Trusts is giving me a headache).
So I started preparing for examinations early and have been spending some time mugging in the library. This is perhaps the lowest point of my JD experience with nothing working out for me so far.
If I survive this episode, things will start looking up for me.
c) Books
Beyond the usual periodicals like The Economist, I am stuck in the middle of Humans are Underrated by Geoff Colvin. So far, I am not really convinced that it has any useful insights. Books have been talking about creativity, empathy and design for decades but sky rocketing salaries are still reserved for software engineers in the US and the hardcore professions elsewhere. At best, books of this genre can convince me that all professionals would need to develop soft skills to thrive.
But then why are 40-50 year olds with experience and soft-skills driving Uber taxis instead of keeping their jobs in the corporate world?
d) Hobbies
I just watched Batman v Superman and almost wanted to put in a full posting about taste. Critics panned the movie, but many of my friends found it entertaining. There were some unnecessary slo-mo scenes but overall I had a good time and the movie did not seem boring at all. I really look forward to the Justice League movie now.
Growing Your Tree of Prosperity remains my best-selling and most embarrassing product on this blog. It was not edited because I let the publisher convince me that it was not necessary and some money could be saved. Some folks slammed my poor grammar ten years ago. But book sales remain high and more importantly, folks are accumulating $100,000 on the advice from the book. My other works never made the best-seller lists despite solid editing and more sophisticated advice. Maybe the poor grammar allowed me to click with fellow Singaporeans.
Perhaps I am not a beautiful "English Literature person" who insist that every movie must be a rarefied experience with a fabulous plot ( I am the kind of guy who enjoyed The Mermaid and White Chicks ). I carefully cultivate my indifference to good taste in wine, movies or fiction because when you juggle law, an investment portfolio and keeping up with technology, you need to enjoy any crap that is being shown in the cinemas with the limited time you have.
Of course, "numerical people" often have to endure being labelled with bad taste by people who are more sensitive to aesthetics.
This is not the fight we should be striving to win.
Perhaps in between mugging sessions I can catch the Brothers Grimsby.
Catch you guys in about 3-4 weeks when the exams are over.
a) Financial markets
I think my financial situation is much better than a couple of months ago. Markets have recovered a bit, but may dip downwards over the short term. The end of March would see a round of dividends coming in which would be applied to my next three months of living expenses, with all the medical emergencies behind me, I should be able to park some money back into the markets.
But the better news for folks with home mortgages is that SIBOR is flat. My belief is that the Fed would not raise interest rates as much as what the pundits would like. China remains the biggest risk for investors.
Of interesting note is that the financial media is starting to talk about this thing called Smart Beta ETFs which have yet to appear on the local scene, maybe I will get to talk about it in further detail after my exams.
Another piece of good news is that Singapore just launched two equity crowdfunding portals. Unfortunately, I do not qualify as an accredited investor yet so perhaps one reason to get back to the workforce would be to work towards that second million in investment assets. My position is that its high time regulators stop protecting retail investors and allow perhaps us to invest $50,000 into an equity crowdfunding platform - some investing is emotional and aspirational and some folks just wanna own a tiny slice of an aquarium. ( Even I wanna own a game-shop one day but don't want to hang out with smelly Magic Players. )
I do hope to do one more research paper on this topic.
b) Law School
I was very lucky to clinched one internship for the holidays so I was at least able to fend off some anxiety over graduation requirements but my studies this semester is a huge mess as the subjects I've taken are perhaps one of the hardest in the JD program (Equity and Trusts is giving me a headache).
So I started preparing for examinations early and have been spending some time mugging in the library. This is perhaps the lowest point of my JD experience with nothing working out for me so far.
If I survive this episode, things will start looking up for me.
c) Books
Beyond the usual periodicals like The Economist, I am stuck in the middle of Humans are Underrated by Geoff Colvin. So far, I am not really convinced that it has any useful insights. Books have been talking about creativity, empathy and design for decades but sky rocketing salaries are still reserved for software engineers in the US and the hardcore professions elsewhere. At best, books of this genre can convince me that all professionals would need to develop soft skills to thrive.
But then why are 40-50 year olds with experience and soft-skills driving Uber taxis instead of keeping their jobs in the corporate world?
d) Hobbies
I just watched Batman v Superman and almost wanted to put in a full posting about taste. Critics panned the movie, but many of my friends found it entertaining. There were some unnecessary slo-mo scenes but overall I had a good time and the movie did not seem boring at all. I really look forward to the Justice League movie now.
Growing Your Tree of Prosperity remains my best-selling and most embarrassing product on this blog. It was not edited because I let the publisher convince me that it was not necessary and some money could be saved. Some folks slammed my poor grammar ten years ago. But book sales remain high and more importantly, folks are accumulating $100,000 on the advice from the book. My other works never made the best-seller lists despite solid editing and more sophisticated advice. Maybe the poor grammar allowed me to click with fellow Singaporeans.
Perhaps I am not a beautiful "English Literature person" who insist that every movie must be a rarefied experience with a fabulous plot ( I am the kind of guy who enjoyed The Mermaid and White Chicks ). I carefully cultivate my indifference to good taste in wine, movies or fiction because when you juggle law, an investment portfolio and keeping up with technology, you need to enjoy any crap that is being shown in the cinemas with the limited time you have.
Of course, "numerical people" often have to endure being labelled with bad taste by people who are more sensitive to aesthetics.
This is not the fight we should be striving to win.
Perhaps in between mugging sessions I can catch the Brothers Grimsby.
Catch you guys in about 3-4 weeks when the exams are over.
Wednesday, March 23, 2016
How to think about a basic income in Singapore.
Some societies are starting to think about implementing a basic income. A basic income is a form of unconditional welfare that gives everyone a basic salary to live regardless of whether he has a job or not.
This idea is attractive to both sides of the political spectrum. The left obviously want some more ways to narrow the rich-poor gap. The political right thinks that it is a form of welfare which does not require a lot of social workers so it keeps the government lean and mean - everyone gets a small wage so long as he is alive and kicking.
Singaporeans are probably not at the stage to consider a full basic income because it would rob Singaporeans of the will to go out and do some solid work for the country. But done at a very small scale, a fixed amount of funds going into every citizen's spending account every month may possibly incentivise someone to take bigger entrepreneurial risks. It also provides home-makers a small allowance. It would certainly benefit the folks in my age bracket who is facing structural unemployment.
Suppose we start at a very reasonable $100 a week or $400 a month for all citizens. There are 3.27M Singapore citizens here, so the price tag will be $15.7B a year. To put a perspective on how much that is, the value is twice that of the Pioneer Generation Package. For the entire FY2014, personal taxes collected is equal to only $8.9b with GST collections being about $10.2b ( From here ). As part of this mental exercise, everyone must be willing to double their income taxes and GST to put $400 into every citizen's pocket every month. Of course, in this exercise I did not cover changes to corporate taxes because the whole point is to get Singaporeans to become more entrepreneurial.
This arithmetic exercise can result in different conclusions. Some readers will interpret this as the Singapore government being able to afford a $400 basic income - just increase personal, GST and corporate taxes. Others will argue that it's not worth levying so much taxes on the middle class so that everyone can get a pittance every month, it is more effective to use the money to improve the transport or education system which has a better impact on citizens.
Of course, you can roll your own basic income. To generate $4,800 of income a year, you would just need $60,000 invested at 8% yields or $70,000 at slightly less than 7%.
But perhaps subtle change will allow all Singaporeans to attain this without levying a cost on tax-payers.
There is still no such thing as a SG-REIT ETF. It's such a simple idea that I'm sure some folks have thought about doing this.
If SGX can approve a simple product which is a fund consisting of equal-weighted REITs listed in the Singapore stock exchange, everyone will have access to a highly diversified real-estate portfolio which currently yields 7.3%. Singaporeans don't have to be very sophisticated to get their basic income of $400, they just need to accumulate $70,000 and have an account with a local broker.
But I can imagine why this would be a nightmare scenario for professional fund managers.
This idea is attractive to both sides of the political spectrum. The left obviously want some more ways to narrow the rich-poor gap. The political right thinks that it is a form of welfare which does not require a lot of social workers so it keeps the government lean and mean - everyone gets a small wage so long as he is alive and kicking.
Singaporeans are probably not at the stage to consider a full basic income because it would rob Singaporeans of the will to go out and do some solid work for the country. But done at a very small scale, a fixed amount of funds going into every citizen's spending account every month may possibly incentivise someone to take bigger entrepreneurial risks. It also provides home-makers a small allowance. It would certainly benefit the folks in my age bracket who is facing structural unemployment.
Suppose we start at a very reasonable $100 a week or $400 a month for all citizens. There are 3.27M Singapore citizens here, so the price tag will be $15.7B a year. To put a perspective on how much that is, the value is twice that of the Pioneer Generation Package. For the entire FY2014, personal taxes collected is equal to only $8.9b with GST collections being about $10.2b ( From here ). As part of this mental exercise, everyone must be willing to double their income taxes and GST to put $400 into every citizen's pocket every month. Of course, in this exercise I did not cover changes to corporate taxes because the whole point is to get Singaporeans to become more entrepreneurial.
This arithmetic exercise can result in different conclusions. Some readers will interpret this as the Singapore government being able to afford a $400 basic income - just increase personal, GST and corporate taxes. Others will argue that it's not worth levying so much taxes on the middle class so that everyone can get a pittance every month, it is more effective to use the money to improve the transport or education system which has a better impact on citizens.
Of course, you can roll your own basic income. To generate $4,800 of income a year, you would just need $60,000 invested at 8% yields or $70,000 at slightly less than 7%.
But perhaps subtle change will allow all Singaporeans to attain this without levying a cost on tax-payers.
There is still no such thing as a SG-REIT ETF. It's such a simple idea that I'm sure some folks have thought about doing this.
If SGX can approve a simple product which is a fund consisting of equal-weighted REITs listed in the Singapore stock exchange, everyone will have access to a highly diversified real-estate portfolio which currently yields 7.3%. Singaporeans don't have to be very sophisticated to get their basic income of $400, they just need to accumulate $70,000 and have an account with a local broker.
But I can imagine why this would be a nightmare scenario for professional fund managers.
Sunday, March 20, 2016
Harshness against unemployed manager is unwarranted.
The Year of the Monkey continues to bring a hodge podge of surprises to me. Markets are apparently up.
But this article should have been up two days ago as it has been a fairly demoralising week. I botched a group presentation and I spent most of my time looking for an internship to no avail.
Which is why amidst the rejections I am getting, I am quite sympathetic to Mr. Chua GC as featured in the Straits Times but was sadly subject to some brickbats from some corners of social media.
a) Mr Chua is not addicted to an expensive lifestyle.
Some parts of social media accuse Mr Chua of being unable to downgrade his lifestyle. I beg to differ. While his family was quite high earning in the past, hitting about $14,000 a month, he currently lives on his wife's income and can even save $1,000 for his family. That's actually less than my personal expenses. My fixed allowances to my parents and wife plus my mortgage, telco, property taxes and conservancy fees is about $5,500.
b) He's trying hard to sell himself.
Just because he acknowledges the awkwardness of trying to sell himself on any job does not mean that he is not doing that. It's awkward for me too. As I'm gunning for internships right now, companies try to interview you remotely as it is logistically too much to interview so many law undergrads. I had my first attempt and was surprised by how difficult it is because you can't assess the interviewer's body language.
Amazingly I used to chair meetings on conference calls but never really felt much stress in the past. It's always awkward to sell something.
c) He did not save enough when times were good
One brickbat which I have to concede is that Mr Chua did not save enough when times were good. This is a teachable moment for all knowledge workers in their 30s who think that everything is fine. Had he saved an income portfolio, at his age, it would easily be equal to his wife's income and his family would still do fairly well on $12,000 a month.
If you examine this case carefully, I might even guess that Mr Chua did save by pre-paying his mortgage as, otherwise, it would be difficult to even save that $1,000 every month in his current situation.
If someone is stuck in their 40s and suddenly jobless, the number of things which can be done can be quite limited. I have some suggestions but perhaps some readers can provide more solutions :
a) Avoid trying to invest your money in such times.
Markets have a tendency to betray you when you need them the most. The worse thing an unemployed PMET could do is to play with forex instruments. The best way to invest in dividend stocks was to do so a few years ago to build it up before you become unemployed.
Rushing into investing thinking that its a panacea is a bad idea. Using your home as collateral to get a loan to invest is an even worse solution than unemployment.
b) Go for a low-barrier to entry job
The most obvious option is to become an Uber Driver. I'm waiting to have some folks tell me that they can really make $5,000 a month.
Other people will become insurance and real estate agents but bad economic conditions would also make these options untenable.
c) Look for a franchise business.
I guess the best way out is to use some of your savings to get into a franchise business. FLA conducts an exhibition every year which I have been going for quite a while but haven't got the guts to risk my own capital so far. Just make sure you avoid the MLM scams out there.
A franchise is a tested business concept but profit margins are razor thin. The risk is your capital and there is definitely a probability of business failure although it is very low compared to starting your own business. Some folks are turned off by the idea of paying someone to give you a job but, heck, you are a PMET in your 40s and should be mature enough to do what works.
I think the downside is that hiring and maintaining a workforce is a nightmare so you might want a partner to split the work so that you can have some work-life balance. It always amazes me that unemployed 40-something PMETs are the last to hire their own kind once they have a business running.
For the folks of my generation, it might be useful to ask yourself how different are you from Mr Chua. For me, the difference is very slight. Mr Chua was retrenched when his company decided to shut down his plant. I was unemployed for two years because I tried to retrench myself in the fear that one day, some company would do me in anyway.
This year, there will be plenty of sob stories in the news of mid-life PMETs losing their jobs.
Better start saving while is going is good in your 30s and keep your family expenses lean.
But this article should have been up two days ago as it has been a fairly demoralising week. I botched a group presentation and I spent most of my time looking for an internship to no avail.
Which is why amidst the rejections I am getting, I am quite sympathetic to Mr. Chua GC as featured in the Straits Times but was sadly subject to some brickbats from some corners of social media.
a) Mr Chua is not addicted to an expensive lifestyle.
Some parts of social media accuse Mr Chua of being unable to downgrade his lifestyle. I beg to differ. While his family was quite high earning in the past, hitting about $14,000 a month, he currently lives on his wife's income and can even save $1,000 for his family. That's actually less than my personal expenses. My fixed allowances to my parents and wife plus my mortgage, telco, property taxes and conservancy fees is about $5,500.
b) He's trying hard to sell himself.
Just because he acknowledges the awkwardness of trying to sell himself on any job does not mean that he is not doing that. It's awkward for me too. As I'm gunning for internships right now, companies try to interview you remotely as it is logistically too much to interview so many law undergrads. I had my first attempt and was surprised by how difficult it is because you can't assess the interviewer's body language.
Amazingly I used to chair meetings on conference calls but never really felt much stress in the past. It's always awkward to sell something.
c) He did not save enough when times were good
One brickbat which I have to concede is that Mr Chua did not save enough when times were good. This is a teachable moment for all knowledge workers in their 30s who think that everything is fine. Had he saved an income portfolio, at his age, it would easily be equal to his wife's income and his family would still do fairly well on $12,000 a month.
If you examine this case carefully, I might even guess that Mr Chua did save by pre-paying his mortgage as, otherwise, it would be difficult to even save that $1,000 every month in his current situation.
If someone is stuck in their 40s and suddenly jobless, the number of things which can be done can be quite limited. I have some suggestions but perhaps some readers can provide more solutions :
a) Avoid trying to invest your money in such times.
Markets have a tendency to betray you when you need them the most. The worse thing an unemployed PMET could do is to play with forex instruments. The best way to invest in dividend stocks was to do so a few years ago to build it up before you become unemployed.
Rushing into investing thinking that its a panacea is a bad idea. Using your home as collateral to get a loan to invest is an even worse solution than unemployment.
b) Go for a low-barrier to entry job
The most obvious option is to become an Uber Driver. I'm waiting to have some folks tell me that they can really make $5,000 a month.
Other people will become insurance and real estate agents but bad economic conditions would also make these options untenable.
c) Look for a franchise business.
I guess the best way out is to use some of your savings to get into a franchise business. FLA conducts an exhibition every year which I have been going for quite a while but haven't got the guts to risk my own capital so far. Just make sure you avoid the MLM scams out there.
A franchise is a tested business concept but profit margins are razor thin. The risk is your capital and there is definitely a probability of business failure although it is very low compared to starting your own business. Some folks are turned off by the idea of paying someone to give you a job but, heck, you are a PMET in your 40s and should be mature enough to do what works.
I think the downside is that hiring and maintaining a workforce is a nightmare so you might want a partner to split the work so that you can have some work-life balance. It always amazes me that unemployed 40-something PMETs are the last to hire their own kind once they have a business running.
For the folks of my generation, it might be useful to ask yourself how different are you from Mr Chua. For me, the difference is very slight. Mr Chua was retrenched when his company decided to shut down his plant. I was unemployed for two years because I tried to retrench myself in the fear that one day, some company would do me in anyway.
This year, there will be plenty of sob stories in the news of mid-life PMETs losing their jobs.
Better start saving while is going is good in your 30s and keep your family expenses lean.
Sunday, March 13, 2016
Beware of False dichotomies when investing.
I don't have much to say this week as I spent half my weekend stuck in traffic heading towards my brother-in-law's wedding on Saturday. The other half was spent catching up on readings after missing a lecture on Saturday this week. I did squeeze in some retail therapy just now picking up some books on Kindle and a new armoured Batman action figure.My daughter asks me why I still buy toys for myself but not her uncles on her mother's side. I tell her that I'm still a kid like her.
I don't have a very heavy article today. Instead I will build on something by BigFatPurse on lifestyles of some of the top financial gurus in Cyberspace.
In this article BFP compares the different approaches between two gurus and asks the reader to choose which one they prefer. Mr.Mustache seems to be more popular among financial bloggers because of his down-to-earth background and focus on frugality. Ramit probably has more mass market appeal as he not particularly big on frugality and wants his followers to go for big wins.
I want to appeal to readers that personal finance is both an art and a science. Some elements of investing can be very precise and run off complicated analytics but often you need to draw upon your knowledge of world economy and political science when making buy and sell decisions, as such it's not profitable to see the world as a binary between two finance gurus.
When you analyse Mr. Mustache, frugality is really the art and science of keeping your expenses low. It's only half of the equation of getting money to invest into markets to generate your dividends. The other half provided by Ramit is about expanding your revenue and top-line.
Both ideas are fundamental to producing savings to be pumped into the markets. The other local finance gurus like Kyith of Investment Moats and AK71 are crucial reads as they provide some direction as to how to maximise your investment returns.
Recently, I've been contemplating a new book as I am working with WDA ( very tentative right now ) to give a talk on financing a child's university education in July and I have to update the model I proposed in Sowing the Seeds of Prosperity.
My older model revolves Earning, Saving, Investing, Protecting and Gifting your capital.
This older model may need some overhauling in that Learning has become serious enough to warrant a write-up on its own. IT innovations have started destroying the careers of knowledge workers and the literature is turning towards lifelong learning but right now there is no rigorous science behind picking up skills to survive a future where an algorithm can be written to defeat the greatest Go Champions of the world.
( It utterly fascinates me how software in the US is destroying legal careers. But that is another posting after I am done with the literature reviews. )
Some piece of management literature focus on empathy as the next big thing but books promoting right-brained creativity, emotional intelligence and design thinking have been written for the past decade and we are not seeing a lot of gains in salaries for people who focus primarily on soft skills ( Are English majors expecting a raise anytime soon ? ). Instead, most gains are made by world-class technocrats who take the time to develop some soft skills to make themselves more accessible to normal people.
With Learning as a cornerstone of my personal finance framework, I have to provide space for the best teachers ( the likes of Scott young and Cal Newport ) to be put on the same pedestal as the best investing gurus.
This means finding space for contradictory ideas to exist by creating an accommodating framework in future writings.
I don't have a very heavy article today. Instead I will build on something by BigFatPurse on lifestyles of some of the top financial gurus in Cyberspace.
In this article BFP compares the different approaches between two gurus and asks the reader to choose which one they prefer. Mr.Mustache seems to be more popular among financial bloggers because of his down-to-earth background and focus on frugality. Ramit probably has more mass market appeal as he not particularly big on frugality and wants his followers to go for big wins.
I want to appeal to readers that personal finance is both an art and a science. Some elements of investing can be very precise and run off complicated analytics but often you need to draw upon your knowledge of world economy and political science when making buy and sell decisions, as such it's not profitable to see the world as a binary between two finance gurus.
When you analyse Mr. Mustache, frugality is really the art and science of keeping your expenses low. It's only half of the equation of getting money to invest into markets to generate your dividends. The other half provided by Ramit is about expanding your revenue and top-line.
Both ideas are fundamental to producing savings to be pumped into the markets. The other local finance gurus like Kyith of Investment Moats and AK71 are crucial reads as they provide some direction as to how to maximise your investment returns.
Recently, I've been contemplating a new book as I am working with WDA ( very tentative right now ) to give a talk on financing a child's university education in July and I have to update the model I proposed in Sowing the Seeds of Prosperity.
My older model revolves Earning, Saving, Investing, Protecting and Gifting your capital.
This older model may need some overhauling in that Learning has become serious enough to warrant a write-up on its own. IT innovations have started destroying the careers of knowledge workers and the literature is turning towards lifelong learning but right now there is no rigorous science behind picking up skills to survive a future where an algorithm can be written to defeat the greatest Go Champions of the world.
( It utterly fascinates me how software in the US is destroying legal careers. But that is another posting after I am done with the literature reviews. )
Some piece of management literature focus on empathy as the next big thing but books promoting right-brained creativity, emotional intelligence and design thinking have been written for the past decade and we are not seeing a lot of gains in salaries for people who focus primarily on soft skills ( Are English majors expecting a raise anytime soon ? ). Instead, most gains are made by world-class technocrats who take the time to develop some soft skills to make themselves more accessible to normal people.
With Learning as a cornerstone of my personal finance framework, I have to provide space for the best teachers ( the likes of Scott young and Cal Newport ) to be put on the same pedestal as the best investing gurus.
This means finding space for contradictory ideas to exist by creating an accommodating framework in future writings.
Wednesday, March 09, 2016
Saizen's Defence - Results from my arbitrage attempt.
Chess and wargames have a lot in common in investing. Wargamers are familiar with ancient tactics such as Scipio's Defense. Opening chess moves are loosely classified into gambits and defences.
I attempted a nifty defense maneuver using the Saizen REITs in the face of poor market conditions a few months ago. For the technical details, you can refer to Bully the Bear's article on what he did for Saizen stock.
The strategy is to put money in a safe place with a guaranteed exit time and then exploit the market for more opportunities later. This is a good for folks with a cash reserve and want to fight off inflation.
The generalised strategy is as follows :
a) There has to be bearish market with great uncertainty over the next 6 months.
b) One stock is being taken private at a fixed date with a projected price.
c) The exit should be around 3-6 months away.
d) The gap between the current price and exit price will give you at least 5% profit.
If your cash hoard can be invested in this counter, you are in essence getting a fixed deposit yielding an annualized 10% yield with a 3-6 month tenure. Some popular finance books actually recommend leverage when you make bets like this and you can engineer a 20%-30% yielding position if you like playing with fire , but I do not recommend it because sometimes such purchase attempts fails and you can be hit with 10%-15% losses.
So I was able to put about $50,000 of family funds to lock-in this interest rate for my dad, most Saizen investors expect to have a major exit at the end of this month, with the remaining proceeds coming in before year end.
So far, I think results are mixed and we cannot conclude that it is a superior investment technique because the money has not been fully returned yet.
Just before CNY when things looked particularly bad, I created a tiny position of stocks and REITs which was centred around Mapletree Greater China Trust, I thought it was a good time because it was beaten down quite badly and my wife's portfolio can benefit from a portfolio which gave more than 8% and provided more diversification for her account.
Right now this other MCGGT portfolio is winning.
The problem with the Saizen defence is that in a bearish climate, Saizen itself never drops low enough to become a bargain while other stocks in the market became very cheap as the markets got worse.
After buying Saizen and locking down $50k, I was unable to exploit MCGGT later which was beaten down by bad news coming from China. MCGGT has already rebounded quite aggressively and I'm not sure if the returned proceeds from Saizen should be farmed into MCGGT,
But I'm quite there will be plenty of stocks being taken private this year. If you are precise with your calculations and can diversity across such opportunities, you can make a decent profit running an arbitrage desk from the comfort of your own home.
I attempted a nifty defense maneuver using the Saizen REITs in the face of poor market conditions a few months ago. For the technical details, you can refer to Bully the Bear's article on what he did for Saizen stock.
The strategy is to put money in a safe place with a guaranteed exit time and then exploit the market for more opportunities later. This is a good for folks with a cash reserve and want to fight off inflation.
The generalised strategy is as follows :
a) There has to be bearish market with great uncertainty over the next 6 months.
b) One stock is being taken private at a fixed date with a projected price.
c) The exit should be around 3-6 months away.
d) The gap between the current price and exit price will give you at least 5% profit.
If your cash hoard can be invested in this counter, you are in essence getting a fixed deposit yielding an annualized 10% yield with a 3-6 month tenure. Some popular finance books actually recommend leverage when you make bets like this and you can engineer a 20%-30% yielding position if you like playing with fire , but I do not recommend it because sometimes such purchase attempts fails and you can be hit with 10%-15% losses.
So I was able to put about $50,000 of family funds to lock-in this interest rate for my dad, most Saizen investors expect to have a major exit at the end of this month, with the remaining proceeds coming in before year end.
So far, I think results are mixed and we cannot conclude that it is a superior investment technique because the money has not been fully returned yet.
Just before CNY when things looked particularly bad, I created a tiny position of stocks and REITs which was centred around Mapletree Greater China Trust, I thought it was a good time because it was beaten down quite badly and my wife's portfolio can benefit from a portfolio which gave more than 8% and provided more diversification for her account.
Right now this other MCGGT portfolio is winning.
The problem with the Saizen defence is that in a bearish climate, Saizen itself never drops low enough to become a bargain while other stocks in the market became very cheap as the markets got worse.
After buying Saizen and locking down $50k, I was unable to exploit MCGGT later which was beaten down by bad news coming from China. MCGGT has already rebounded quite aggressively and I'm not sure if the returned proceeds from Saizen should be farmed into MCGGT,
But I'm quite there will be plenty of stocks being taken private this year. If you are precise with your calculations and can diversity across such opportunities, you can make a decent profit running an arbitrage desk from the comfort of your own home.
Sunday, March 06, 2016
Why engineers and technology professionals become road-kill at middle age.
I thought I'd write another article which is a follow-up to my previous post advising the folks who might be considering an engineering career.
In this post, I want to explain the reasons why engineers and tech professionals wind up becoming road-kill at middle age. Why is the old engineer is always the bitter one who laments about how much higher their less academically brilliant sales counterpart is earning twice their incomes when they are still grinding in data centres.
As it was recently said on social media :
Retired bankers play golf, retired engineers drive taxi.
First of all, I did work with some engineering managers in their 50s. A lot of them are stuck in their old ways having worked in major MNCs for decades and then finding out that they are retrenched when the company decides that their services are no longer required. These are pleasant people but they are stuck in the old world of mainframes when the IT department is rapidly moving into the cloud. Being retrenched workers, they are also unable to tap into their deep networks in their old companies. One case I worked with have a tendency to keep repeating themselves using old cliches and I think this turned off their younger subordinates who consider themselves better than they are.
Over in school, I was also able to experience working with people in their 20s and 30s as peers and I can empathise why some of us folks in our 40s are disliked as team workers in Law School. We can be overly directive and some of us like to repeat ourselves over and over again. A few of us are just not as good as the younger guys, our analysis can be sub-par and lacking in substance. It's something I feel bad about because law firm HR departments are going to mark us down for the actions and tendencies of some of us.
So my experience allows me to take a stab at answering the question as to why engineers end up being road-kill at middle age but not other professions.
The key insight is this :
Our schools choose engineers based on their proficiency of physics and math subjects - subjects which require constant grinding and solving new problems using 10 year series assessments. This ensures that only the most conscientious students wind up joining engineering school. Because of the rigorous content of a technical subject, there is also a bias towards introverts when assessing academic excellence.
More importantly are the kinds of students engineering faculties fail to attract - Openness to new experiences is crucial to technological work because it affects how much a professional is able to learn new programming languages and find innovative ways to solve technical problems.
So here are the results - local universities produce introverted, conscientious professionals and average or below-average openness.
This is fine for the first 15 years of an engineer's life. But due to changes in the human brain of a person in their 40s. The engineer becomes less open to new ideas and lose the ability to learn new things. Furthermore, while introverts are still very smart at middle age, they would not have built the weak networks to sustain future careers as the extroverts would have done.
The older tech professional starts become set in his ways - And you always know such an engineer if you work in a real IT environment, the guy who makes $8,000 a month looking after the AS/400 who talked about how robust and reliable the iSeries IBM servers were even they are being displaced by Linux machines. Some even claim that the cloud is marketing jargon and just a new way to market server racks in a data centre.
How can you retool this guy into Data Scientist ? How can he even learn AngularJS or NodeJS ? Graph databases ? SDKs are now being released and deprecated at a ridiculous rate.
In the past, operational IT folks fight aging by becoming process folks covering ITSM to remain relevant only to be displaced by wider changes in the ITSM software and new frameworks like DevOps.
The case within the legal and accounting profession is different. Changes in the legal world are rarely earth-shaking, any abrupt confirmation in case law has been hinted at by the House of Lords a decade ago. Ditto for accounting, because one can only imagine what earth-shaking consequences there would be if we overhaul GAAP. This is why even though accountants take on the same kind of students as the engineering faculty, you don't see so many bean counters driving taxis in their 40s.
As it stands, engineering schools are quite far behind the tech industry. This latest article by Tech In Asia hints at how far behind engineers of my generation who are currently teaching in local polytechnics are ensuring that a fresh polytechnic student graduates with obsolete skills.
The government is already doing the right thing to absorb graduate engineers. It generates baseline job guarantees and the narrow minded ones can always do government procurement at middle age. The government needs to realise that $500 in a learning account is not enough for tech professions.
The solution to this is not to just look into a student's extra curricular's record when selecting candidates for engineering programs. The system has to ensure that openness to new experiences is a criteria when hiring an engineering lecturer. I will not trust an engineering lecturer who is precise and dogmatic in his ideas, I would rather pick one who has some geeky interests like RPGs, music, cosplay, or arcade game programming because it subtly hints that he has multiple and varied interests.
At a personal level, some of my other articles already provide the general advise for engineers reaching middle-age.
Start saving, investing and networking with other because, beyond 45, it may be too late.
In this post, I want to explain the reasons why engineers and tech professionals wind up becoming road-kill at middle age. Why is the old engineer is always the bitter one who laments about how much higher their less academically brilliant sales counterpart is earning twice their incomes when they are still grinding in data centres.
As it was recently said on social media :
Retired bankers play golf, retired engineers drive taxi.
First of all, I did work with some engineering managers in their 50s. A lot of them are stuck in their old ways having worked in major MNCs for decades and then finding out that they are retrenched when the company decides that their services are no longer required. These are pleasant people but they are stuck in the old world of mainframes when the IT department is rapidly moving into the cloud. Being retrenched workers, they are also unable to tap into their deep networks in their old companies. One case I worked with have a tendency to keep repeating themselves using old cliches and I think this turned off their younger subordinates who consider themselves better than they are.
Over in school, I was also able to experience working with people in their 20s and 30s as peers and I can empathise why some of us folks in our 40s are disliked as team workers in Law School. We can be overly directive and some of us like to repeat ourselves over and over again. A few of us are just not as good as the younger guys, our analysis can be sub-par and lacking in substance. It's something I feel bad about because law firm HR departments are going to mark us down for the actions and tendencies of some of us.
So my experience allows me to take a stab at answering the question as to why engineers end up being road-kill at middle age but not other professions.
The key insight is this :
Our schools choose engineers based on their proficiency of physics and math subjects - subjects which require constant grinding and solving new problems using 10 year series assessments. This ensures that only the most conscientious students wind up joining engineering school. Because of the rigorous content of a technical subject, there is also a bias towards introverts when assessing academic excellence.
More importantly are the kinds of students engineering faculties fail to attract - Openness to new experiences is crucial to technological work because it affects how much a professional is able to learn new programming languages and find innovative ways to solve technical problems.
So here are the results - local universities produce introverted, conscientious professionals and average or below-average openness.
This is fine for the first 15 years of an engineer's life. But due to changes in the human brain of a person in their 40s. The engineer becomes less open to new ideas and lose the ability to learn new things. Furthermore, while introverts are still very smart at middle age, they would not have built the weak networks to sustain future careers as the extroverts would have done.
The older tech professional starts become set in his ways - And you always know such an engineer if you work in a real IT environment, the guy who makes $8,000 a month looking after the AS/400 who talked about how robust and reliable the iSeries IBM servers were even they are being displaced by Linux machines. Some even claim that the cloud is marketing jargon and just a new way to market server racks in a data centre.
How can you retool this guy into Data Scientist ? How can he even learn AngularJS or NodeJS ? Graph databases ? SDKs are now being released and deprecated at a ridiculous rate.
In the past, operational IT folks fight aging by becoming process folks covering ITSM to remain relevant only to be displaced by wider changes in the ITSM software and new frameworks like DevOps.
The case within the legal and accounting profession is different. Changes in the legal world are rarely earth-shaking, any abrupt confirmation in case law has been hinted at by the House of Lords a decade ago. Ditto for accounting, because one can only imagine what earth-shaking consequences there would be if we overhaul GAAP. This is why even though accountants take on the same kind of students as the engineering faculty, you don't see so many bean counters driving taxis in their 40s.
As it stands, engineering schools are quite far behind the tech industry. This latest article by Tech In Asia hints at how far behind engineers of my generation who are currently teaching in local polytechnics are ensuring that a fresh polytechnic student graduates with obsolete skills.
The government is already doing the right thing to absorb graduate engineers. It generates baseline job guarantees and the narrow minded ones can always do government procurement at middle age. The government needs to realise that $500 in a learning account is not enough for tech professions.
The solution to this is not to just look into a student's extra curricular's record when selecting candidates for engineering programs. The system has to ensure that openness to new experiences is a criteria when hiring an engineering lecturer. I will not trust an engineering lecturer who is precise and dogmatic in his ideas, I would rather pick one who has some geeky interests like RPGs, music, cosplay, or arcade game programming because it subtly hints that he has multiple and varied interests.
At a personal level, some of my other articles already provide the general advise for engineers reaching middle-age.
Start saving, investing and networking with other because, beyond 45, it may be too late.
Friday, March 04, 2016
Lessen the psychological impact of a home mortgage though asset/liability matching.
I just ended hell week. Two paper submissions this week and a team presentation has made me lose sleep over the last few days. My body still aches after having a nap and I wonder if I am actually falling sick.
Today I will talk about home mortgages and psychological strain I have been receiving from my home loan for the past two years. The current state is that I pay my home mortgage with my CPF-OA and I have enough to do this for another 4 years at the current SIBOR rate. But this is psychologically straining because I worry that at the end of the year, I am unable to save enough of my dividends to offset the drop in my CPF-OA (given that its been a year of medical emergencies for my family). The other problem is that having a REIT and high-yielding portfolio, I also experienced the double whammy of increasing mortgage rates and a decreasing income in a bad year like 2015.
( Banks probably won't let me refinance as I have no income right now. )
This could mean that my retirement is not as sustainable as I thought it would be. And my loan has over 30 years more to go !
So I thought I'd return to the roots of this blog by toying around with the idea of matching an investment asset like a different kind of equity portfolio with a liability like a home mortgage that goes beyond simply farming dividends back to pay off a mortgage loan like I am doing now. The idea of asset/liability matching is to set aside or create a satellite portfolio which can offset the psychological impact of my home mortgage.
In effect, you are buying a peace of mind when you create this portfolio.
Currently, my home mortgage is about $530,000. After paying off my mortgage regularly without earning an income for the past 2 years, I barely have about $105,000 in my CPF-OA. Most of my money is locked down in my SA account anyway but I suppose between myself and my wife, we can pony up $150,000 to immediately reduce the loan to $380,000 if I do not touch my other assets.
One answer would be to simply buy $380,000 of Singapore Savings Bonds because it currently yields a rate which is higher than my floating rate loan. But that would be problematic because floating rates can increase faster than SSB yields and I would prefer to set aside a sum which is significantly less than $380,000.
So what I have to do is to hunt for investment assets with two attributes :
a) Investment must generally increase in value when interest rates rise.
The biggest problem with Singapore is the lack of floating rate bonds. But reading a brokerage report a while ago, I know that Sheng Siong's net profit increases when interest rates increase. The other obvious choice are local banks like UOB which profit from mortgage loans.
b) Dividend yields must be higher than my floating rate.
Both Sheng Siong and UOB yield more than my current floating rate loan which is around 2.2%, so this allows me that peace of mind without needing to accumulate $380,000 with my new rookie income.
So suppose I blend a simple portfolio which yields 4.5% using UOB and Sheng Siong, I would only need a portfolio size of only to $186,000 to match dividends with interest rate payments of my mortgage.
This satellite portfolio will need to be rebalanced annually to maintain my psychological well-being.
Suppose, I start with a mortgage loan of $380,000 at 2.2% and a satellite portfolio of $186,000. After a year of work, I reduce the loan to $360,000 at a rate of , say, 2.4% and the satellite portfolio increases in value to to $190,000 and yields 4.8%. The satellite portfolio required to yield the same interest as the mortgage loan is now $180,000. I can release $10,000 back into my REITs portfolio for more income while maintaining a greater piece of mind.
For now, I can only start this project when I return to the workforce but my biggest issue is to find stocks which do increase in value when interest rates go up. Articles are very vague when they describe stocks which have this property. The ideal scenario is to find 6-8 stocks with this property.
If you are a reader and can offer some suggestions, do comment on this blog.
This may be potentially a better idea than simply paying-off a SIBOR floating rate home loan prematurely which did cross my mind last year.
Today I will talk about home mortgages and psychological strain I have been receiving from my home loan for the past two years. The current state is that I pay my home mortgage with my CPF-OA and I have enough to do this for another 4 years at the current SIBOR rate. But this is psychologically straining because I worry that at the end of the year, I am unable to save enough of my dividends to offset the drop in my CPF-OA (given that its been a year of medical emergencies for my family). The other problem is that having a REIT and high-yielding portfolio, I also experienced the double whammy of increasing mortgage rates and a decreasing income in a bad year like 2015.
( Banks probably won't let me refinance as I have no income right now. )
This could mean that my retirement is not as sustainable as I thought it would be. And my loan has over 30 years more to go !
So I thought I'd return to the roots of this blog by toying around with the idea of matching an investment asset like a different kind of equity portfolio with a liability like a home mortgage that goes beyond simply farming dividends back to pay off a mortgage loan like I am doing now. The idea of asset/liability matching is to set aside or create a satellite portfolio which can offset the psychological impact of my home mortgage.
In effect, you are buying a peace of mind when you create this portfolio.
Currently, my home mortgage is about $530,000. After paying off my mortgage regularly without earning an income for the past 2 years, I barely have about $105,000 in my CPF-OA. Most of my money is locked down in my SA account anyway but I suppose between myself and my wife, we can pony up $150,000 to immediately reduce the loan to $380,000 if I do not touch my other assets.
One answer would be to simply buy $380,000 of Singapore Savings Bonds because it currently yields a rate which is higher than my floating rate loan. But that would be problematic because floating rates can increase faster than SSB yields and I would prefer to set aside a sum which is significantly less than $380,000.
So what I have to do is to hunt for investment assets with two attributes :
a) Investment must generally increase in value when interest rates rise.
The biggest problem with Singapore is the lack of floating rate bonds. But reading a brokerage report a while ago, I know that Sheng Siong's net profit increases when interest rates increase. The other obvious choice are local banks like UOB which profit from mortgage loans.
b) Dividend yields must be higher than my floating rate.
Both Sheng Siong and UOB yield more than my current floating rate loan which is around 2.2%, so this allows me that peace of mind without needing to accumulate $380,000 with my new rookie income.
So suppose I blend a simple portfolio which yields 4.5% using UOB and Sheng Siong, I would only need a portfolio size of only to $186,000 to match dividends with interest rate payments of my mortgage.
This satellite portfolio will need to be rebalanced annually to maintain my psychological well-being.
Suppose, I start with a mortgage loan of $380,000 at 2.2% and a satellite portfolio of $186,000. After a year of work, I reduce the loan to $360,000 at a rate of , say, 2.4% and the satellite portfolio increases in value to to $190,000 and yields 4.8%. The satellite portfolio required to yield the same interest as the mortgage loan is now $180,000. I can release $10,000 back into my REITs portfolio for more income while maintaining a greater piece of mind.
For now, I can only start this project when I return to the workforce but my biggest issue is to find stocks which do increase in value when interest rates go up. Articles are very vague when they describe stocks which have this property. The ideal scenario is to find 6-8 stocks with this property.
If you are a reader and can offer some suggestions, do comment on this blog.
This may be potentially a better idea than simply paying-off a SIBOR floating rate home loan prematurely which did cross my mind last year.
Sunday, February 28, 2016
Personal Update - Meaningless Holiday just ended meaninglessly.
Ok, time for another personal update.
a) Law School
I am so demotivated right now, I should actually be vetting my research papers instead of updating this blog.
Right now, I am going through the process of hunting for internships and Training Contracts and made quite a number of number of applications, some rejections have already starting trickling in and I am still shocked at how competitive this game has become ! I am praying for an interview in March.
Rejections as a rule leave a bad taste in my mouth because, to be fair, it seldom happens to me up to this stage in my life. I guess an important part of personal growth is to have the door slam shut in your face. Perhaps 40-something year-olds may look forward to more rejections in the future in Singapore.
To add insult to injury, I just ended a one week break which really isn't really a break at all. I initially rushed through two research papers so that I could consolidate my studies during the holidays but the consolidation took up such a large part of the break, it ended up becoming more intense than a regular study week with classes. Making matters worse, by the time I finished catching up with my work, my group assignment got released.
So for my entire holidays, I caught up with friends for just a few hours and had two fairly rushed RPG sessions.
My only consolidation is that I did manage to celebrate Durandal's one month with my family.
b) Personal Finance
Is it just me or is the markets doing rather well lately ?
This past month defensive investors are really outperforming the rest of the markets with REITs and business trusts declaring fairly decent dividends. As most of my expenses on my son have been made, I was able to invest some amount I set aside for contingencies back into the markets. There is room for cautious optimism as the Fed would prefer to review their policy of raising interest rates. Where rates dip into the negative, I can expect SIBOR to ease up a a bit to give me more leeway to pump my dividends into the markets instead of pumping it into my CPF-OA to pay for my mortgages. Once floating rates exceeds fixed rates, it means local banks anticipate an easing in the medium term.
My challenge this year is to have net savings from my dividends, I really hope that I can shore up some REIT purchases as they are quite cheap right now.
c) Medical expenses and emergencies.
The year of the monkey continues to ravage this hapless Tiger.
The other event are medical expenses incurred by my mum for her treatment. In one instance, the financial advice from the hospital for a mastectomy was about $200 and I ended up paying paying over $2,200. In another instance, I was advised to set aside up to $7,000 for radiotherapy but the whole bill ended up only about $1,200. Clearly, there is something inherently meaningless when local government hospitals provide financial advise to hapless sick people in Singapore but I shall leave it to other members of the public to lodge a complaint. The first case is devastating to poorer individuals who do not have contingency funds, the second case damages investors who who will prepare the money in cash from their investment portfolio.
d) Readings
I like books with anything to do with McKinsey Consulting. I read the Pyramid Principle by Barbara Minto over a decade ago and the Mckinsey Way when I was published because the anything Mckinsey is idiot simple to read and chock full of practical advice. If McKinsey wrote a book on Poems, Sexual Positions or Baking Cakes, I would buy it for the sake of curiosity.
The McKinsey Edge by Shu Hattori is chock full of tips for knowledge workers from how to structure a set of power-point slides to asking clients intelligent questions. It is a great read.
Right now, I am in the middle of this book called Simple Rules by Donald Sull. When I am done, I might have the tools to distill an entire investment philosophy into a series of simple rules of thumb. More on that later.
Sadly, I was unable to read any fiction this holiday. If I had a chance it would be Three-Body Problem by Cixin Liu.
e) Visited Singapore's Silicon Valley.
Took half a day off to visit Block 79 and the government's efforts to promote start-ups seems to be ramping up to a whole new level. I spoke to a founder and met some ex-colleagues.
I am still digesting some of the news I received during my visit .On one hand the government seems to going all in into the start-up space with tax-payer money. On the other, I got news that a really prominent accelerator is no longer in that business.
On balance, I don't buy the idea of having a Singapore start-up although I would seriously consider starting one in my lifetime. Singapore needs to have the Google and Facebooks set up shop for me to change my mind.
But the free coffee at Blk 79 is good.
a) Law School
I am so demotivated right now, I should actually be vetting my research papers instead of updating this blog.
Right now, I am going through the process of hunting for internships and Training Contracts and made quite a number of number of applications, some rejections have already starting trickling in and I am still shocked at how competitive this game has become ! I am praying for an interview in March.
Rejections as a rule leave a bad taste in my mouth because, to be fair, it seldom happens to me up to this stage in my life. I guess an important part of personal growth is to have the door slam shut in your face. Perhaps 40-something year-olds may look forward to more rejections in the future in Singapore.
To add insult to injury, I just ended a one week break which really isn't really a break at all. I initially rushed through two research papers so that I could consolidate my studies during the holidays but the consolidation took up such a large part of the break, it ended up becoming more intense than a regular study week with classes. Making matters worse, by the time I finished catching up with my work, my group assignment got released.
So for my entire holidays, I caught up with friends for just a few hours and had two fairly rushed RPG sessions.
My only consolidation is that I did manage to celebrate Durandal's one month with my family.
b) Personal Finance
Is it just me or is the markets doing rather well lately ?
This past month defensive investors are really outperforming the rest of the markets with REITs and business trusts declaring fairly decent dividends. As most of my expenses on my son have been made, I was able to invest some amount I set aside for contingencies back into the markets. There is room for cautious optimism as the Fed would prefer to review their policy of raising interest rates. Where rates dip into the negative, I can expect SIBOR to ease up a a bit to give me more leeway to pump my dividends into the markets instead of pumping it into my CPF-OA to pay for my mortgages. Once floating rates exceeds fixed rates, it means local banks anticipate an easing in the medium term.
My challenge this year is to have net savings from my dividends, I really hope that I can shore up some REIT purchases as they are quite cheap right now.
c) Medical expenses and emergencies.
The year of the monkey continues to ravage this hapless Tiger.
The other event are medical expenses incurred by my mum for her treatment. In one instance, the financial advice from the hospital for a mastectomy was about $200 and I ended up paying paying over $2,200. In another instance, I was advised to set aside up to $7,000 for radiotherapy but the whole bill ended up only about $1,200. Clearly, there is something inherently meaningless when local government hospitals provide financial advise to hapless sick people in Singapore but I shall leave it to other members of the public to lodge a complaint. The first case is devastating to poorer individuals who do not have contingency funds, the second case damages investors who who will prepare the money in cash from their investment portfolio.
d) Readings
I like books with anything to do with McKinsey Consulting. I read the Pyramid Principle by Barbara Minto over a decade ago and the Mckinsey Way when I was published because the anything Mckinsey is idiot simple to read and chock full of practical advice. If McKinsey wrote a book on Poems, Sexual Positions or Baking Cakes, I would buy it for the sake of curiosity.
The McKinsey Edge by Shu Hattori is chock full of tips for knowledge workers from how to structure a set of power-point slides to asking clients intelligent questions. It is a great read.
Right now, I am in the middle of this book called Simple Rules by Donald Sull. When I am done, I might have the tools to distill an entire investment philosophy into a series of simple rules of thumb. More on that later.
Sadly, I was unable to read any fiction this holiday. If I had a chance it would be Three-Body Problem by Cixin Liu.
e) Visited Singapore's Silicon Valley.
Took half a day off to visit Block 79 and the government's efforts to promote start-ups seems to be ramping up to a whole new level. I spoke to a founder and met some ex-colleagues.
I am still digesting some of the news I received during my visit .On one hand the government seems to going all in into the start-up space with tax-payer money. On the other, I got news that a really prominent accelerator is no longer in that business.
On balance, I don't buy the idea of having a Singapore start-up although I would seriously consider starting one in my lifetime. Singapore needs to have the Google and Facebooks set up shop for me to change my mind.
But the free coffee at Blk 79 is good.
Tuesday, February 23, 2016
Before you jump into the Engineering bandwagon...
Readers might think that I have very reason to be cynical.
Graduating in 1999 with an engineering degree would have been great if not for the actions by the Government to welcoming foreign engineers into our economy which kept all engineers on a low salary scale. As a consequence of that, Engineering departments in local universities became dumping grounds with better engineering students aspiring to succeed as bankers instead of joining the technology field.
The SMRT breakdowns are a symptom of at least a decade of prioritising services over operations.
The government timing to refocus on engineering could not be better. And I should be upset as I'm already in Law School and the new SIM university would be soon in place to create a steady supply of community lawyers possibly making me the worse market timer for my human capital in the financial blogosphere.
Should I be bitter ?
Nah... Just because I'm in Law School does not make me less of a Technologist. If anything, I am completing my education to become a domain expert. Once I get an idea of how legal practice work, I would be able to tap on my friends to see if a solution to legal partner's problems can be resolved with IT automation. There is'nt too many Lawyer/Engineers so LegalTech will stay a blue ocean field in Singapore for quite a while.
Nevertheless, I think PM Lee's drive to make engineering relevant again is credible.
First, the government is willing to create a thousand baseline jobs to give the average engineering graduate a steady vocation upon graduation. This way they don't have to resort to selling insurance, MLM or real estate to have a decent income. Second, the government is rolling out the red carpet to incite the big boys like Facebook and Google to hire the best engineering students. So the really brilliant guys are covered.
I would have been more excited if Singapore would put in place more substantial measures to resolve the Changalore problem but the government has to tread carefully in order not to drive investments away so I don't see this moving beyond empty rhetoric in the medium term.
Here's some advice for the young undergrad who has chosen to major in Engineering.
a) Your degree depreciates really quickly. Start planning for an advanced degree immediately.
You hit to hit hard and fast when you join the job market. Your skills would devalue within 3-4 years due to the paradigm shifts taking place in the software industry. What matters are the fundamental skills you pick up in university like Statistics, Technical Writing, Law, Management and Accounting. Focusing on Micro-electronics and Digital Signal Processing will ruin you as your industry disappears along with jobs which require this expertise. For me, the best investment I made in NUS Engineering school was joining the Toastmasters club, it remains useful to me in Law School when I moot against my classmates. ( At least I have fewer time-fillers when making my submissions. )
On day one of your first job, you need to start plotting for an MBA, MAF, MPA,CFA or like me, the JD. Your skill with numbers should not be underestimated and the higher engineering salaries help in planning for the financing of your advanced degree.
b) Expect your income to look like an inverse parabolic curve so investing is crucial for personal success.
Your salary will rise for the first ten years, stagnate for the next 5, and probably decline after that. If you are not an investment banker, lawyer or doctor, your salary will not escalate every year and experience matters less in an industry which changes so abruptly. Chance are you need to be able to save more and invest to maintain your salary momentum.
Fortunately, you have a higher starting pay and no real expectation to dress well or spend like a lawyer. You need to save and invest that difference. Preferably, you need to start generating passive income to cover for the days where you have to go back to school or start a small business.
c) You need to be global. And it's not just being able to work with foreign colleagues.
This is something I personally struggle with. Ideally, an engineer needs to be very mobile and must find work in any part of world which is willing to pay for his expertise. Silicon Valley respects technical professionals and pay up to $120,000 for some technical skills.
The next generation needs to completely master the art of geo-arbitrage. Work for an American firm, pay taxes under the Middle East, Invest for yields in Singapore and spend in Indian Rupees.
d) Never forget that it is not in Singapore's interest for engineers to become too rich.
The most important lesson is something I learnt a little too late.
Some professions exact a heavy toll on society if they are paid too well. Paying nurses and allied health professionals too well would make healthcare unaffordable. Paying criminal and family lawyers too richly would deny access to justice for lower income groups.
Same goes for engineers. The government can control the tap and bring in more engineers from lower income nations to keep costs low for businesses if hiring good engineers become too prohibitive. They did this in 90s and the 2000s. Engineers are particularly vulnerable because businesses need them to survive and they are too tame to protest when policies change.
That is the most important consideration if you decide on a Technical career. You need to quickly exploit your higher salaries and numerical expertise to carve a more certain future for yourself. The Facebooks and Googles of today will rapidly become the HPs and Yahoos of tomorrow.
This means not locking yourself down to a sector or industry. And this also means not locking yourself down to a country or region.
Look after yourself and enjoy the fine toys you get to play with in Engineering school !
Graduating in 1999 with an engineering degree would have been great if not for the actions by the Government to welcoming foreign engineers into our economy which kept all engineers on a low salary scale. As a consequence of that, Engineering departments in local universities became dumping grounds with better engineering students aspiring to succeed as bankers instead of joining the technology field.
The SMRT breakdowns are a symptom of at least a decade of prioritising services over operations.
The government timing to refocus on engineering could not be better. And I should be upset as I'm already in Law School and the new SIM university would be soon in place to create a steady supply of community lawyers possibly making me the worse market timer for my human capital in the financial blogosphere.
Should I be bitter ?
Nah... Just because I'm in Law School does not make me less of a Technologist. If anything, I am completing my education to become a domain expert. Once I get an idea of how legal practice work, I would be able to tap on my friends to see if a solution to legal partner's problems can be resolved with IT automation. There is'nt too many Lawyer/Engineers so LegalTech will stay a blue ocean field in Singapore for quite a while.
Nevertheless, I think PM Lee's drive to make engineering relevant again is credible.
First, the government is willing to create a thousand baseline jobs to give the average engineering graduate a steady vocation upon graduation. This way they don't have to resort to selling insurance, MLM or real estate to have a decent income. Second, the government is rolling out the red carpet to incite the big boys like Facebook and Google to hire the best engineering students. So the really brilliant guys are covered.
I would have been more excited if Singapore would put in place more substantial measures to resolve the Changalore problem but the government has to tread carefully in order not to drive investments away so I don't see this moving beyond empty rhetoric in the medium term.
Here's some advice for the young undergrad who has chosen to major in Engineering.
a) Your degree depreciates really quickly. Start planning for an advanced degree immediately.
You hit to hit hard and fast when you join the job market. Your skills would devalue within 3-4 years due to the paradigm shifts taking place in the software industry. What matters are the fundamental skills you pick up in university like Statistics, Technical Writing, Law, Management and Accounting. Focusing on Micro-electronics and Digital Signal Processing will ruin you as your industry disappears along with jobs which require this expertise. For me, the best investment I made in NUS Engineering school was joining the Toastmasters club, it remains useful to me in Law School when I moot against my classmates. ( At least I have fewer time-fillers when making my submissions. )
On day one of your first job, you need to start plotting for an MBA, MAF, MPA,CFA or like me, the JD. Your skill with numbers should not be underestimated and the higher engineering salaries help in planning for the financing of your advanced degree.
b) Expect your income to look like an inverse parabolic curve so investing is crucial for personal success.
Your salary will rise for the first ten years, stagnate for the next 5, and probably decline after that. If you are not an investment banker, lawyer or doctor, your salary will not escalate every year and experience matters less in an industry which changes so abruptly. Chance are you need to be able to save more and invest to maintain your salary momentum.
Fortunately, you have a higher starting pay and no real expectation to dress well or spend like a lawyer. You need to save and invest that difference. Preferably, you need to start generating passive income to cover for the days where you have to go back to school or start a small business.
c) You need to be global. And it's not just being able to work with foreign colleagues.
This is something I personally struggle with. Ideally, an engineer needs to be very mobile and must find work in any part of world which is willing to pay for his expertise. Silicon Valley respects technical professionals and pay up to $120,000 for some technical skills.
The next generation needs to completely master the art of geo-arbitrage. Work for an American firm, pay taxes under the Middle East, Invest for yields in Singapore and spend in Indian Rupees.
d) Never forget that it is not in Singapore's interest for engineers to become too rich.
The most important lesson is something I learnt a little too late.
Some professions exact a heavy toll on society if they are paid too well. Paying nurses and allied health professionals too well would make healthcare unaffordable. Paying criminal and family lawyers too richly would deny access to justice for lower income groups.
Same goes for engineers. The government can control the tap and bring in more engineers from lower income nations to keep costs low for businesses if hiring good engineers become too prohibitive. They did this in 90s and the 2000s. Engineers are particularly vulnerable because businesses need them to survive and they are too tame to protest when policies change.
That is the most important consideration if you decide on a Technical career. You need to quickly exploit your higher salaries and numerical expertise to carve a more certain future for yourself. The Facebooks and Googles of today will rapidly become the HPs and Yahoos of tomorrow.
This means not locking yourself down to a sector or industry. And this also means not locking yourself down to a country or region.
Look after yourself and enjoy the fine toys you get to play with in Engineering school !
Wednesday, February 17, 2016
Not a good day to be part of the JD programme.
I had to stop studying to write this article because my class was greeted with shock one day to find out that one of our classmates has been given a two month jail sentence for hacking into a Professor's account and deleting our property law examination scripts.
My script was one of those deleted. You can reference the newspaper article here.
As we speak, journalists are trying to contact my classmates to ask about this JD programme and I wanted to steal a march from the mainstream media to write an article clarifying some aspects of the JD experience.
Me and my classmates are TWICE victims. One is that our scripts were deleted. The other is that our investment into JD programme is now under media scrutiny.
( Not to mention that NUS might be laughing all the way to the bank )
a) Is the JD programme a pressure cooker ?
Yes. Like all good things in life, you pay an Iron Price to be here.
What was missing in the newspaper article is that qualifying for a Law degree is not enough for you to practice law in Singapore. You need to meet a minimum grade of 3.0 GPA. Georgy barely made that cut and it was that my speculation is that the fear that he would not be allowed to practice which led to him to execute that dumb move of deleting all our scripts.
This minimum grade is not easy to attain as it is an average B grade which is the equivalent of 70% and in spite of the general competitiveness of the program, some fail to qualify to take the bar exams.
Many of my fellow classmates have paid $70,000 of the program so you can imagine the expensive consequences of not doing well in school. This does not account for the 3 years of lost income and opportunity costs.
Furthermore, unlike most LLB guys, we have to complete the law core modules in 3 years so we do not have the luxury of making too many mistakes with our time management in school.
Another difference with NUS is that our seminar performance is graded. We have to interact with our lecturers by being prepared. There is no time to go through the basics and we have to delve into the case holding to survive the discussion. I might argue that no teaching takes place because we have to be fully acquainted with the basics even before class begins. When my son was born, I missed only two lectures and was back in class the next day because it would have hurt my grades.
We also do 50 hours of community service on top of a compressed program. Most of us exceed that quota. When my daughter was hospitalized with acute bronchitis, I carried on my duties in Family Court. When the supervisor asked me why I even bothered to show up, I replied that SMU's reputation was at stake and we've been planning for the President's visit for a while so I had to make that choice.
b) The JD selection process.
Social media has started attacking the JD selection process. I challenge social media to improve it.
I doubt the selection process can be challenged, beyond an application which scrutinizes our grades. Shortlisted candidates have to write an essay. After which we have an interview where two interviewees interview at the same time so it's conducted like a duel. I even heard a very credible story of an interview candidate crying after being hammered in that round.
Some of my amazing classmates are into their fourth degrees, there is even a schoolmate who lectures in SMU at the same time. Some rejected seats at Oxbridge to be here.
If there is any criticism, I would only consider that JD candidates should requires 2 years of working experience because its designed to complement LLBs rather than compete with them. ( My classmates are likely to disagree with this point.)
( After some sleuthing, my classmates confirmed that Georgy himself graduated from Columbia with an LLM in 2011 so there is an Ivy League connection to all this. Link )
c) Foreigners in the JD program
Xenophobes are attacking SMU's openness to foreign students because Georgy is Russian. That is very unfair to my foreign classmates who work hard and bring a lot of civil law perspectives into the class.
More importantly, foreign students are important because they bring different values to an academic program. From what I experience in all the degree programmes I was in, Singaporeans dial up the competitive factor by being unreasonably kiasu. My foreign pals are a welcome addition because they see their role in a different light and don't see their journey as one with better GPAs and starting salaries.
Only small fraction of JD students are foreigners, I suggest xenophobes go apply pressure to other parts of Singapore like Changalore. The JD programme is a far cry from the liberal introduction of foreign engineers into the Singapore economy which has kept salaries down for over a decade.
d) Some minor IT points.
We are slowing figuring out what Georgy did to hack into the system, I was curious as to whether he employed a VPN to cover his tracks, if so, I would like to know how he was caught.. We are thankful that he deleted the scripts rather than making changes to the scripts because he may have been able to escape undetected.
The typical remedy to this incident like this is to adjust the security policy to prevent the USB ports from being used for all schoool PCs. I cannot imagine how much this would inconvenience the staff in SMU. I even imagine an OTP system for lecturers found in University tender in the medium term.
Anyway, I welcome any JD student or alumni to supplement this article. If you are NUS and want to revel in schadenfreude, you are also welcome to post because some of the negative feedback on JD graduates have also been very illuminating.
My script was one of those deleted. You can reference the newspaper article here.
As we speak, journalists are trying to contact my classmates to ask about this JD programme and I wanted to steal a march from the mainstream media to write an article clarifying some aspects of the JD experience.
Me and my classmates are TWICE victims. One is that our scripts were deleted. The other is that our investment into JD programme is now under media scrutiny.
( Not to mention that NUS might be laughing all the way to the bank )
a) Is the JD programme a pressure cooker ?
Yes. Like all good things in life, you pay an Iron Price to be here.
What was missing in the newspaper article is that qualifying for a Law degree is not enough for you to practice law in Singapore. You need to meet a minimum grade of 3.0 GPA. Georgy barely made that cut and it was that my speculation is that the fear that he would not be allowed to practice which led to him to execute that dumb move of deleting all our scripts.
This minimum grade is not easy to attain as it is an average B grade which is the equivalent of 70% and in spite of the general competitiveness of the program, some fail to qualify to take the bar exams.
Many of my fellow classmates have paid $70,000 of the program so you can imagine the expensive consequences of not doing well in school. This does not account for the 3 years of lost income and opportunity costs.
Furthermore, unlike most LLB guys, we have to complete the law core modules in 3 years so we do not have the luxury of making too many mistakes with our time management in school.
Another difference with NUS is that our seminar performance is graded. We have to interact with our lecturers by being prepared. There is no time to go through the basics and we have to delve into the case holding to survive the discussion. I might argue that no teaching takes place because we have to be fully acquainted with the basics even before class begins. When my son was born, I missed only two lectures and was back in class the next day because it would have hurt my grades.
We also do 50 hours of community service on top of a compressed program. Most of us exceed that quota. When my daughter was hospitalized with acute bronchitis, I carried on my duties in Family Court. When the supervisor asked me why I even bothered to show up, I replied that SMU's reputation was at stake and we've been planning for the President's visit for a while so I had to make that choice.
b) The JD selection process.
Social media has started attacking the JD selection process. I challenge social media to improve it.
I doubt the selection process can be challenged, beyond an application which scrutinizes our grades. Shortlisted candidates have to write an essay. After which we have an interview where two interviewees interview at the same time so it's conducted like a duel. I even heard a very credible story of an interview candidate crying after being hammered in that round.
Some of my amazing classmates are into their fourth degrees, there is even a schoolmate who lectures in SMU at the same time. Some rejected seats at Oxbridge to be here.
If there is any criticism, I would only consider that JD candidates should requires 2 years of working experience because its designed to complement LLBs rather than compete with them. ( My classmates are likely to disagree with this point.)
( After some sleuthing, my classmates confirmed that Georgy himself graduated from Columbia with an LLM in 2011 so there is an Ivy League connection to all this. Link )
c) Foreigners in the JD program
Xenophobes are attacking SMU's openness to foreign students because Georgy is Russian. That is very unfair to my foreign classmates who work hard and bring a lot of civil law perspectives into the class.
More importantly, foreign students are important because they bring different values to an academic program. From what I experience in all the degree programmes I was in, Singaporeans dial up the competitive factor by being unreasonably kiasu. My foreign pals are a welcome addition because they see their role in a different light and don't see their journey as one with better GPAs and starting salaries.
Only small fraction of JD students are foreigners, I suggest xenophobes go apply pressure to other parts of Singapore like Changalore. The JD programme is a far cry from the liberal introduction of foreign engineers into the Singapore economy which has kept salaries down for over a decade.
d) Some minor IT points.
We are slowing figuring out what Georgy did to hack into the system, I was curious as to whether he employed a VPN to cover his tracks, if so, I would like to know how he was caught.. We are thankful that he deleted the scripts rather than making changes to the scripts because he may have been able to escape undetected.
The typical remedy to this incident like this is to adjust the security policy to prevent the USB ports from being used for all schoool PCs. I cannot imagine how much this would inconvenience the staff in SMU. I even imagine an OTP system for lecturers found in University tender in the medium term.
Anyway, I welcome any JD student or alumni to supplement this article. If you are NUS and want to revel in schadenfreude, you are also welcome to post because some of the negative feedback on JD graduates have also been very illuminating.
Sunday, February 14, 2016
Valentine's Day Post - Singlehood is the new Venereal Disease ! Huzzah !
When I was single, I used to say that children are the most common venereal disease in this world. Now that I am a father of two kids, it is now a convenient time to declare that single-hood is the newest and most virulent venereal disease in this world.
Something is different about VD in 2016.
At the personal level, I can no longer celebrate Valentine's with my wife, she is still under confinement so instead I will buy a cake, some snacks, and celebrate with my in-laws which consists of about three couples and five kids. The focus of Valentine's Day is actually on my kids - Clio already has declared her wish for chocolate cake. There is also, of course, the issue of money and inflated prices of roses and general lovey-dovey stuff today which does not make economic sense to go out today.
At the broader level, I am seeing a change in the focus of business on VD. The most touted movie right now is a chick flick called How to be Single and not one which celebrates marriage ( like 50 Shades of Grey ). Otherwise, I am seeing a ramp-up in business activities to get singles to celebrate their status. I don't see any reason why singles need to be depressed on this day at all.
Actually it makes sense for local businesses to pivot from couples to singles. Couples these days are quite driven to settle down and have kids, most of the more highly educated ones actively plan for the future so it may not make so much sense to overspend on one special day.
Singles however, have all that freedom to do whatever they want.
Of course, this year is interesting because we may be seeing the effect of the rise of hook-up culture and the Dating Apocalypse brought about by hook-up apps like Tinder which backs my thesis that Singlehood is the new VD. Tinder gives guys (or fuckboys) a means to tap into a weak, localised networks for hook-ups by demand. And networks have an amazing ability to spread because now we effectively have some sort of peer-to-peer network which provides hook-ups on demand.
The effect is that the most eligible guys have an app which can ensure that they always get their fix. This raises the premium on single-hood relative to marriage. So the demand for marriage drops with single-hood as a more viable substitute. While people still get married and start families, the numbers will be reduced as rational guys take on Tinder and find a serious relationship later after they tire of hook-ups.
The net effect is universally bad for women who are serious about family and relationships. The pool of eligible men will dry up creating longer waits for a women to find a spouse and time is going to be an issue because men are still quite visual and expect their spouses to remain visually appealing.
Another interesting issue is the rise of match-making apps and whether they can turn the tide by using the same networks to help facilitate more marriages and family formation.
But somehow, I am pessimistic about the prospect of these dating apps.
Imagine a Tinder as a Stock Exchange where there's plenty of liquidity and trade. Your match-making app is like a sluggish OTC market with very low liquidity and a brokerage fee. Worse, when a match occurs in a match-making app, both market players disappears completely. I expect men to have both apps on their smartphones and will be very choosy while using a match-making app because Tinder will always be there to suggest alternatives.
Right now, the jury is out on how apps like Tinder will affect our local dating scene but the pivot of local businesses towards singles might be the first symptoms of a Tinder-fuelled singlehood becoming a better lifestyle choice.
Ironically, perhaps the only way to break the network effect of a hook-up app is via an actual disease like that spread by the Zika virus.
For family men, we will get to observe and have some popcorn to eat, but we will have to educate and direct our kids when they grow up if we do want them to settle down and start families on their own.
Something is different about VD in 2016.
At the personal level, I can no longer celebrate Valentine's with my wife, she is still under confinement so instead I will buy a cake, some snacks, and celebrate with my in-laws which consists of about three couples and five kids. The focus of Valentine's Day is actually on my kids - Clio already has declared her wish for chocolate cake. There is also, of course, the issue of money and inflated prices of roses and general lovey-dovey stuff today which does not make economic sense to go out today.
At the broader level, I am seeing a change in the focus of business on VD. The most touted movie right now is a chick flick called How to be Single and not one which celebrates marriage ( like 50 Shades of Grey ). Otherwise, I am seeing a ramp-up in business activities to get singles to celebrate their status. I don't see any reason why singles need to be depressed on this day at all.
Actually it makes sense for local businesses to pivot from couples to singles. Couples these days are quite driven to settle down and have kids, most of the more highly educated ones actively plan for the future so it may not make so much sense to overspend on one special day.
Singles however, have all that freedom to do whatever they want.
Of course, this year is interesting because we may be seeing the effect of the rise of hook-up culture and the Dating Apocalypse brought about by hook-up apps like Tinder which backs my thesis that Singlehood is the new VD. Tinder gives guys (or fuckboys) a means to tap into a weak, localised networks for hook-ups by demand. And networks have an amazing ability to spread because now we effectively have some sort of peer-to-peer network which provides hook-ups on demand.
The effect is that the most eligible guys have an app which can ensure that they always get their fix. This raises the premium on single-hood relative to marriage. So the demand for marriage drops with single-hood as a more viable substitute. While people still get married and start families, the numbers will be reduced as rational guys take on Tinder and find a serious relationship later after they tire of hook-ups.
The net effect is universally bad for women who are serious about family and relationships. The pool of eligible men will dry up creating longer waits for a women to find a spouse and time is going to be an issue because men are still quite visual and expect their spouses to remain visually appealing.
Another interesting issue is the rise of match-making apps and whether they can turn the tide by using the same networks to help facilitate more marriages and family formation.
But somehow, I am pessimistic about the prospect of these dating apps.
Imagine a Tinder as a Stock Exchange where there's plenty of liquidity and trade. Your match-making app is like a sluggish OTC market with very low liquidity and a brokerage fee. Worse, when a match occurs in a match-making app, both market players disappears completely. I expect men to have both apps on their smartphones and will be very choosy while using a match-making app because Tinder will always be there to suggest alternatives.
Right now, the jury is out on how apps like Tinder will affect our local dating scene but the pivot of local businesses towards singles might be the first symptoms of a Tinder-fuelled singlehood becoming a better lifestyle choice.
Ironically, perhaps the only way to break the network effect of a hook-up app is via an actual disease like that spread by the Zika virus.
For family men, we will get to observe and have some popcorn to eat, but we will have to educate and direct our kids when they grow up if we do want them to settle down and start families on their own.
Saturday, February 13, 2016
Microagressions - The breakfast of champions !
This is a very special Chinese New Year for me.
For the first time, Millenials have come together to crowdsource the micro-aggressions that were thrown their way for this New Year. I think this is a very useful dataset which should excite any armchair social scientist like myself.
You can access it here.
I want to assert that micro-aggressions are the breakfast of champions !
Micro-aggressions encapsulate all the dreams and nightmares of Ethnic Chinese families in Singapore. Once you create a taxonomy around these micro-aggressions, you will be able to find the Singapore Dream and the Singaporean Nightmare hidden within it.
Some readers may remember that I have written about a model called Colonel Blotto some time ago where I theorised that living in a competitive society is committing your time and energy into various "battlefields". These "battlefield"s can be about getting workplace promotions, improving your social economic status, playing board games competitively or starting blissful families.
My thesis is that in a CNY gathering, you are in a game of Colonel Blotto against peers of your generation. Lose a battlefield to a cousin and their parents will toss a micro-aggression at your parents. The stakes in this game is your personal self-esteem and the pride of your folks.
My model then predicts that those with very little attention, focus, energy and resources can have a winning strategy by dabbling in many obscure hobbies. They can easily find niche that nobody else really cares about to occupy and become the master of his "battlefield" or domain. Doing this reinforces a person's self-esteem and gives him some way to one-up another person in another social situation.
There is an inherent problem with this strategy of finding an unoccupied battlefield - We still live in pragmatic Singapore that does'nt give a shit that you are the global expert on furry BDSM fiction. In Singapore, only a few "battlefields" matter and the CNY power plays give us a hint as to what these battlefields might be.
Based on my casual observation this is what matters :
a) Education
" You study at University of Buffalo ah. What kind of degree ? Bovine insemination izzit ?"
Many micro-aggressions are centred around education.
Professional courses like Law, Finance, Engineering, Medicine and Accounting trump general degrees. Ivy League and Oxbridge universities trump local universities which in turn trump private universities. I think Polytechnics so far have largely reached parity with JCs, but ITEs are still ranked below them. And the old discrimination against the Normal Stream still stands as it is ranked below the Express Stream which is now ranked below IP.
b) Career choices
" Whaaa your boyfriend is in the design industry ah ? I'm sure he is a leng zhai and a nice person. "
It looks slightly better here with some shade thrown at media and fine arts career tracks. The emphasis seems to be a lot of humble-bragging rather than throwing shade. And once again, only a select few careers are worthy of respect in a Chinese family.
It always goes back to Law and Medicine.
c) Conspicuous consumption
"Welcome to humble home.Please excuse my small car." * Gestures to the Maserati parked at the front porch of his bungalow *
Kate Spade has a good run during the 2011 elections. I sort of predicted that LV's will fall out of style as I think secretaries and personal assistants have started buying them so they are no longer aspirational. Perhaps the Hermes Birkin should be fully weaponised this year.
d) Starting a Family
"No girlfriend ah. You've got a Tinder account ? Swipe to the right. So simple ! "
NB : I actually did that to tease a cousin ! But I did it before CNY.
This never changes and is so common, singles are not even showing up at CNY events because they don't want to be fingered as latent homosexuals. Married folks without kids are barren and invited to go for artificial insemination ( I was childless for quite a few years after marriage and understand the pressure ).
e) National Service
" See my son so dark and ugly because of jungle training. He just book out from OCS !"
This is something new to me. I've never felt that National Service would ever be weaponised in Chinese New Year because officers serve a longer tenure. I was also never inflicted with micro-aggressions over my lowly Corporal rank. Some uncles who were cooks bragged about feeding sock-water Milo to their officers.
This is interesting because NS has been enhanced so much that people are now prouder of becoming an officer. Can't be all that bad for nation building.
Conclusion
How you deal with micro-aggressions will affect your own personal life outcomes.
As on only child, I have less of a personal choice because my parents have no other source of pride and have to stake their esteem on my personal success. But I am quite happy going through the laundry list of power plays and slowly ensuring that my ego will not be dented by the more common ones relatives tend to inflict on the younger guys. So I certainly played by the rules and made sure things looked good on paper.
For the others there is always the option to run.
At the end of the day, the game may be futile. I know that for Chinese families in general, retrenchment, infertility, dyslexia, autism, people coming out of the closet, divorce and criminal convictions will make the winners of one generation losers of another. This is normal.
So even if I do well, my children may undo the good work I did to look good in front of my relatives.
The wonders of a traditional Chinese family is this - If my kids screw up, everyone will make me account for the micro-aggressions I myself have inflicted in the past. So I put quite a large premium on raising my kids well.
But more importantly :
风水轮流转
We all revert to the mean.
Therefore, micro-aggressions should be wielded judiciously every year.
For the first time, Millenials have come together to crowdsource the micro-aggressions that were thrown their way for this New Year. I think this is a very useful dataset which should excite any armchair social scientist like myself.
You can access it here.
I want to assert that micro-aggressions are the breakfast of champions !
Micro-aggressions encapsulate all the dreams and nightmares of Ethnic Chinese families in Singapore. Once you create a taxonomy around these micro-aggressions, you will be able to find the Singapore Dream and the Singaporean Nightmare hidden within it.
Some readers may remember that I have written about a model called Colonel Blotto some time ago where I theorised that living in a competitive society is committing your time and energy into various "battlefields". These "battlefield"s can be about getting workplace promotions, improving your social economic status, playing board games competitively or starting blissful families.
My thesis is that in a CNY gathering, you are in a game of Colonel Blotto against peers of your generation. Lose a battlefield to a cousin and their parents will toss a micro-aggression at your parents. The stakes in this game is your personal self-esteem and the pride of your folks.
My model then predicts that those with very little attention, focus, energy and resources can have a winning strategy by dabbling in many obscure hobbies. They can easily find niche that nobody else really cares about to occupy and become the master of his "battlefield" or domain. Doing this reinforces a person's self-esteem and gives him some way to one-up another person in another social situation.
There is an inherent problem with this strategy of finding an unoccupied battlefield - We still live in pragmatic Singapore that does'nt give a shit that you are the global expert on furry BDSM fiction. In Singapore, only a few "battlefields" matter and the CNY power plays give us a hint as to what these battlefields might be.
Based on my casual observation this is what matters :
a) Education
" You study at University of Buffalo ah. What kind of degree ? Bovine insemination izzit ?"
Many micro-aggressions are centred around education.
Professional courses like Law, Finance, Engineering, Medicine and Accounting trump general degrees. Ivy League and Oxbridge universities trump local universities which in turn trump private universities. I think Polytechnics so far have largely reached parity with JCs, but ITEs are still ranked below them. And the old discrimination against the Normal Stream still stands as it is ranked below the Express Stream which is now ranked below IP.
b) Career choices
" Whaaa your boyfriend is in the design industry ah ? I'm sure he is a leng zhai and a nice person. "
It looks slightly better here with some shade thrown at media and fine arts career tracks. The emphasis seems to be a lot of humble-bragging rather than throwing shade. And once again, only a select few careers are worthy of respect in a Chinese family.
It always goes back to Law and Medicine.
c) Conspicuous consumption
"Welcome to humble home.Please excuse my small car." * Gestures to the Maserati parked at the front porch of his bungalow *
Kate Spade has a good run during the 2011 elections. I sort of predicted that LV's will fall out of style as I think secretaries and personal assistants have started buying them so they are no longer aspirational. Perhaps the Hermes Birkin should be fully weaponised this year.
d) Starting a Family
"No girlfriend ah. You've got a Tinder account ? Swipe to the right. So simple ! "
NB : I actually did that to tease a cousin ! But I did it before CNY.
This never changes and is so common, singles are not even showing up at CNY events because they don't want to be fingered as latent homosexuals. Married folks without kids are barren and invited to go for artificial insemination ( I was childless for quite a few years after marriage and understand the pressure ).
e) National Service
" See my son so dark and ugly because of jungle training. He just book out from OCS !"
This is something new to me. I've never felt that National Service would ever be weaponised in Chinese New Year because officers serve a longer tenure. I was also never inflicted with micro-aggressions over my lowly Corporal rank. Some uncles who were cooks bragged about feeding sock-water Milo to their officers.
This is interesting because NS has been enhanced so much that people are now prouder of becoming an officer. Can't be all that bad for nation building.
Conclusion
How you deal with micro-aggressions will affect your own personal life outcomes.
As on only child, I have less of a personal choice because my parents have no other source of pride and have to stake their esteem on my personal success. But I am quite happy going through the laundry list of power plays and slowly ensuring that my ego will not be dented by the more common ones relatives tend to inflict on the younger guys. So I certainly played by the rules and made sure things looked good on paper.
For the others there is always the option to run.
At the end of the day, the game may be futile. I know that for Chinese families in general, retrenchment, infertility, dyslexia, autism, people coming out of the closet, divorce and criminal convictions will make the winners of one generation losers of another. This is normal.
So even if I do well, my children may undo the good work I did to look good in front of my relatives.
The wonders of a traditional Chinese family is this - If my kids screw up, everyone will make me account for the micro-aggressions I myself have inflicted in the past. So I put quite a large premium on raising my kids well.
But more importantly :
风水轮流转
We all revert to the mean.
Therefore, micro-aggressions should be wielded judiciously every year.
Monday, February 08, 2016
Year of the Monkey - Unbent, unbowed and unbroken...
First off, a Happy Lunar New Year to all the readers of this blog.
Regulars might know that the previous year of the Goat had been a bitter-sweet experience. My mother was diagnosed with breast cancer but I was also blessed with the birth of my son. I was hyper alert during the last few days of the year of the Goat because somehow I felt vulnerable after everything which happened to my family. A consequence of that was I pre-poned work on my research paper in anticipation that troubles would not allow me to finish them in March.
Turns out the paranoia was justified.
Just this afternoon, my dad fell down and had a nasty gash above his right eye and I spent about 7 hours at A&E at Khoo Teck Puat. My dad is ok now and resting at home, but I only finished my reunion dinner at about 10.30pm. It is actually fortunate that my wife was also not present today as she is confined at my in-law's place with my two kids. So, technically I had reunion dinner alone at the Subway when I had a sandwich waiting for the doctor's report.
The Year of the Goat would have been on balance good for Tigers. But it did not turn out as optimistic as I had thought. The year of the Monkey is supposed to be bad, but I guess it's something which would unfold over the next few months.
Nevertheless, it's great to survive a tough year and move on.
I am grateful for what I have.
Strange that this year is the one which I anticipate the least awkward questioning from all the relatives.
When I was single, people asked me when will I get a girlfriend.
When I got a girlfriend, people asked me when I will get married.
After I got married, people wanted to know when I would have kids.
After I had my daughter, people wanted to know whether I should try for a son.
Now I have a son and a daughter, the only question is whether I will get a job but I think I would not get so many questions in that area as I am quite public about my retirement and I have three semesters left of school.
Actually, I am not out of the woods because relatives react to life situations, I would have to endure questions about my HBA1C readings this year.
The truth about me is that I wrote off the Western notion of happiness quite a while ago. The Western notion of happiness is about following your passion. You find it on Facebook with the smiling faces of the folks who wanted to dodge the bullet and decided to travel somewhere else to avoid the inquisition from relatives. Western psychology has all the answers - buy experiential goods instead of material goods. Fake a smile to feel good inside. Hang out with folks who are relatively less wealthy than you are and you will be happy.
The Eastern notion is not an easy pill to swallow. Xing4 Fu2 or 幸福 is happiness in the Eastern context and beyond the individual's control. Your relative's conception of 幸福is the formation of the nuclear family with at lease one son and one daughter, they get to declare whether you are 幸福 or not. 幸福is also beyond the reach of a "selfish single".
I guess I am fortunate to be an only child. There is no sibling out there to carry out the proper duties of a son so I don't get to dodge the bullet. Over the years, I ticked every single box to make it less embarrassing to face relatives during the Lunar New Year.
But this year, at age 41, there is a slight change to the rules of the game.
This year, I get to ask the embarassing questions.
But I will be kind and use my newfound powers judicially...
恭喜发财 ! 万事如意 !
Regulars might know that the previous year of the Goat had been a bitter-sweet experience. My mother was diagnosed with breast cancer but I was also blessed with the birth of my son. I was hyper alert during the last few days of the year of the Goat because somehow I felt vulnerable after everything which happened to my family. A consequence of that was I pre-poned work on my research paper in anticipation that troubles would not allow me to finish them in March.
Turns out the paranoia was justified.
Just this afternoon, my dad fell down and had a nasty gash above his right eye and I spent about 7 hours at A&E at Khoo Teck Puat. My dad is ok now and resting at home, but I only finished my reunion dinner at about 10.30pm. It is actually fortunate that my wife was also not present today as she is confined at my in-law's place with my two kids. So, technically I had reunion dinner alone at the Subway when I had a sandwich waiting for the doctor's report.
The Year of the Goat would have been on balance good for Tigers. But it did not turn out as optimistic as I had thought. The year of the Monkey is supposed to be bad, but I guess it's something which would unfold over the next few months.
Nevertheless, it's great to survive a tough year and move on.
I am grateful for what I have.
Strange that this year is the one which I anticipate the least awkward questioning from all the relatives.
When I was single, people asked me when will I get a girlfriend.
When I got a girlfriend, people asked me when I will get married.
After I got married, people wanted to know when I would have kids.
After I had my daughter, people wanted to know whether I should try for a son.
Now I have a son and a daughter, the only question is whether I will get a job but I think I would not get so many questions in that area as I am quite public about my retirement and I have three semesters left of school.
Actually, I am not out of the woods because relatives react to life situations, I would have to endure questions about my HBA1C readings this year.
The truth about me is that I wrote off the Western notion of happiness quite a while ago. The Western notion of happiness is about following your passion. You find it on Facebook with the smiling faces of the folks who wanted to dodge the bullet and decided to travel somewhere else to avoid the inquisition from relatives. Western psychology has all the answers - buy experiential goods instead of material goods. Fake a smile to feel good inside. Hang out with folks who are relatively less wealthy than you are and you will be happy.
The Eastern notion is not an easy pill to swallow. Xing4 Fu2 or 幸福 is happiness in the Eastern context and beyond the individual's control. Your relative's conception of 幸福is the formation of the nuclear family with at lease one son and one daughter, they get to declare whether you are 幸福 or not. 幸福is also beyond the reach of a "selfish single".
I guess I am fortunate to be an only child. There is no sibling out there to carry out the proper duties of a son so I don't get to dodge the bullet. Over the years, I ticked every single box to make it less embarrassing to face relatives during the Lunar New Year.
But this year, at age 41, there is a slight change to the rules of the game.
This year, I get to ask the embarassing questions.
But I will be kind and use my newfound powers judicially...
恭喜发财 ! 万事如意 !
Friday, February 05, 2016
#1 Peak Prosperity - The Poverty Simulation angle.
Sometimes, getting an article for this blog is so easy it is as if the Gods conspire to help you with your next posting.
This week, news started to spread about Singapore Island Country Club members conducting a poverty simulation for their members. Of course the news attracted a fair share of brickbats and I'm not going to go about making things worse.
My stand is that a poverty simulation is good thing even though there might be a better way to go about doing it.
It can be argued that my life as a law student is some sort of poverty simulation, I have to feed my growing family without touching my investment capital for a minimum of 3 years without rejoining the workforce. After three years, I will review my portfolio to figure out whether my financial independence is for real. If it is not real, then my retirement would have to end and I would have to accumulate more capital for the next stress test. (Likely a passive income of $10k/month with no more mortgage, so it would be a tough target to meet.)
Poverty simulation is only a symptom of Singapore's problem and not the root cause.
The root cause is the decline in social porousness of Singapore society. The rich is losing touch with the rest of Singapore society.
The section on Edinburgh in the book Geography of Genius tries to explain the rise of the Scottish intellectuals like David Hume. Scotland's intellectuals are particularly interesting to me because they are known to be quite scrappy and like to find practical applications to their theories so they appeal to my engineering nature. One section I find particularly relevant to Singapore is that the city of Edinburgh which spawned the development of medical and intellectual advancements had great social porousness during its peak of its intellectual prowess. Particularly interesting is that social spaces were areas where a blacksmith and intellectual can trade and argue at as equals.
I would argue that social porousness was present when Singapore first gained independence. We lived in the same kampongs, students in top schools had very few economic advantages over ordinary students. Some ministers had degrees and some, like S Rajaratnam, don't. By contrast, the modern education system in Singapore focuses more on sorting individuals based on intellectual capacity and then confining them to different silos so that they can learn at their own pace. SAP education makes it worse by some form of government-approved racial segregation. One bright spark is National Service where people of different castes and strata could get together to fight as a unit.
From the lens of social porousness, it would be hard to fault the poverty simulators. You spend your youth ensconced in your parent's Maseratis and having all your wishes fulfilled by domestic help. It alienates you from the common man, but you remain human, so you fear falling from grace.
Why not simulate poverty first to cope with your fear and anxiety?
Let's not judge poverty simulators too harshly.
Instead, we can consider turning Poverty into a CCA in our middle-class infested secondary schools.
A Poverty Society can be fun and enriching.
Kids from upper class elite schools learn about the rich-poor gap, the GINI index and then have poverty camps to simulate perhaps a life in the HDB heartlands or a pocket money of working class families. They can have field camps to neighborhood secondary schools and maybe role-play a perfect for a day. For fun and recreation, they can role-play the Beggar Sect from Chinese Wuxia drama.
Done correctly, the rich can be shamed or guilt-tripped into wanting to create decent jobs for fellow Singaporeans.
This week, news started to spread about Singapore Island Country Club members conducting a poverty simulation for their members. Of course the news attracted a fair share of brickbats and I'm not going to go about making things worse.
My stand is that a poverty simulation is good thing even though there might be a better way to go about doing it.
It can be argued that my life as a law student is some sort of poverty simulation, I have to feed my growing family without touching my investment capital for a minimum of 3 years without rejoining the workforce. After three years, I will review my portfolio to figure out whether my financial independence is for real. If it is not real, then my retirement would have to end and I would have to accumulate more capital for the next stress test. (Likely a passive income of $10k/month with no more mortgage, so it would be a tough target to meet.)
Poverty simulation is only a symptom of Singapore's problem and not the root cause.
The root cause is the decline in social porousness of Singapore society. The rich is losing touch with the rest of Singapore society.
The section on Edinburgh in the book Geography of Genius tries to explain the rise of the Scottish intellectuals like David Hume. Scotland's intellectuals are particularly interesting to me because they are known to be quite scrappy and like to find practical applications to their theories so they appeal to my engineering nature. One section I find particularly relevant to Singapore is that the city of Edinburgh which spawned the development of medical and intellectual advancements had great social porousness during its peak of its intellectual prowess. Particularly interesting is that social spaces were areas where a blacksmith and intellectual can trade and argue at as equals.
I would argue that social porousness was present when Singapore first gained independence. We lived in the same kampongs, students in top schools had very few economic advantages over ordinary students. Some ministers had degrees and some, like S Rajaratnam, don't. By contrast, the modern education system in Singapore focuses more on sorting individuals based on intellectual capacity and then confining them to different silos so that they can learn at their own pace. SAP education makes it worse by some form of government-approved racial segregation. One bright spark is National Service where people of different castes and strata could get together to fight as a unit.
From the lens of social porousness, it would be hard to fault the poverty simulators. You spend your youth ensconced in your parent's Maseratis and having all your wishes fulfilled by domestic help. It alienates you from the common man, but you remain human, so you fear falling from grace.
Why not simulate poverty first to cope with your fear and anxiety?
Let's not judge poverty simulators too harshly.
Instead, we can consider turning Poverty into a CCA in our middle-class infested secondary schools.
A Poverty Society can be fun and enriching.
Kids from upper class elite schools learn about the rich-poor gap, the GINI index and then have poverty camps to simulate perhaps a life in the HDB heartlands or a pocket money of working class families. They can have field camps to neighborhood secondary schools and maybe role-play a perfect for a day. For fun and recreation, they can role-play the Beggar Sect from Chinese Wuxia drama.
Done correctly, the rich can be shamed or guilt-tripped into wanting to create decent jobs for fellow Singaporeans.
Monday, February 01, 2016
[Prologue] Peak Prosperity : How do we know that Singapore is in decline ?
I've got less than an hour before my lectures begin so this is going to be a short post.
Right now I am in the process of researching the concept which has the working title of "Peak Prosperity" which sounds so interesting, it may warrant a new book from me in the future.
In my previous books, I would pull out bad news and events from thin air to conclude that the Singapore Dream is being threatened by external forces. This time round, I hope to be more methodical so I would have to read more deeply before forming my conclusions. The biggest problem right now is that technology is displacing jobs faster than we can retrain but this problem affects the whole world and we are actually better equipped than most countries to deal with this problem.
So, the book I am reading is The Geography of Genius by Eric Wiener which may shed light on societies which reach its peak in the past and then declined with the times. My progress is quite slow and have covered only Athens and Hangzhou so far but on casual observation, city states reach their peak when they are the most open minded. Athens accepted foreign traders and had a great marketplace and only began its downward spiral when its citizens began to closed their minds to new ideas. Hangzhou was also the kind of place where people were encouraged to experiment and synthesise new ideas - Su Dongpo was a poet and an engineer.
Similarly Singapore is thinking twice about its foreign talent policy, I guess to prevent a decline, Singapore would need to continue to admit talented individuals but at a pace which is acceptable by the electorate. I think the government may need to, once again, pursue an unpopular FT policy once our transport woes are resolved.
But this research continues because I have to figure out what metrics can be used as a leading indicator to predict a decline in Singapore.
Right now I have no hints on which numbers to look at.
Any feedback or suggestions are welcome.
Right now I am in the process of researching the concept which has the working title of "Peak Prosperity" which sounds so interesting, it may warrant a new book from me in the future.
In my previous books, I would pull out bad news and events from thin air to conclude that the Singapore Dream is being threatened by external forces. This time round, I hope to be more methodical so I would have to read more deeply before forming my conclusions. The biggest problem right now is that technology is displacing jobs faster than we can retrain but this problem affects the whole world and we are actually better equipped than most countries to deal with this problem.
So, the book I am reading is The Geography of Genius by Eric Wiener which may shed light on societies which reach its peak in the past and then declined with the times. My progress is quite slow and have covered only Athens and Hangzhou so far but on casual observation, city states reach their peak when they are the most open minded. Athens accepted foreign traders and had a great marketplace and only began its downward spiral when its citizens began to closed their minds to new ideas. Hangzhou was also the kind of place where people were encouraged to experiment and synthesise new ideas - Su Dongpo was a poet and an engineer.
Similarly Singapore is thinking twice about its foreign talent policy, I guess to prevent a decline, Singapore would need to continue to admit talented individuals but at a pace which is acceptable by the electorate. I think the government may need to, once again, pursue an unpopular FT policy once our transport woes are resolved.
But this research continues because I have to figure out what metrics can be used as a leading indicator to predict a decline in Singapore.
Right now I have no hints on which numbers to look at.
Any feedback or suggestions are welcome.
Wednesday, January 27, 2016
Thoughts on being a father a second time.
Last night, my son Durendal Ng Mun Khoi, was born. It was a happy day for me and my missus and right now, mother and son are doing well.
There is some excitement over why I chose such a strange name for my son. Durendal from what I gathered from the web is also a card in some collectible card game. If it is spelled Durandal, it's the name of a kind of bomb which is used to penetrate airport runways. So on first inspection, it's quite a ferocious name.
For our case, Durendal is named after a holy sword wielded by an Ancient Frankish knight called Roland who served as one of the paladins under Charlemagne, the first Holy Roman Emperor and the founder of Carolingian empire in Western Europe. If you play a lot of RPGs, this is the origin of the Paladin class.
But more importantly, embedded in my son's name is the french verb "durer" which is "to endure" or "to last".
Most fathers can write about their hopes and dreams of their newborn son and how optimistic they are about the future. I have decided to take the opposite stance and share with readers the doubts I have about Singapore society that Durendal and his elder sister Clio ( who is named after the Muse of History ) would have to navigate in the future.
Naturally as a father, I will do everything in my power to help them thrive, but I doubt that the world that Durendal and Clio will live in would be better than ours.
The future of Singapore may not be lived by its citizens, it may have to be endured.
a) Children always revert to the mean through generations
Without even seeing my kids in school, I can sort of predict my children's IQ.
If a solid lawyer-doctor couple with 150 IQ each. Their kid's average IQ would not be 150 but 125 - The mean of father and mother's IQ then averaged against 100. That's why you may hear of ministers being somewhat disappointed with their progeny. It's actually built into our genetic code. Things always revert to the mean. Without even taking an IQ test, parents are better off assuming that their children are average and start planning for it.
And as it turns out, thing don't look bright for average Singaporeans.
b) Average is Over - Actually being average downright sucks !
I used to write about the three kinds of work following the ideas developed by Robert Reich over 10 years ago. Manufacturing, Service-oriented and Symbolic analytical work. Things will shift even more dramatically against manufacturing in the future. And services jobs are being automated even faster - we are not even sure if taxi drivers would even exist in 20 years time with driverless cars being tested right now. Worse, symbolic analysts are losing their jobs at a rapid rate because of huge paradigm shifts and the rise of artificial intelligence. Server support administrators used to be able to support 16 machines per head count with solid pay. These days, thousands of clustered virtual machines can run a business conglomerate in a cloud.
As of now, the sexiest jobs go to those who manipulate machines to manipulate symbols. Being a strong programmer is not enough, you need solid statistical skills and enough domain knowledge to solve business problems in your industry. Look at what Fintech is doing to our banks. It's only a matter of time that someone comes up with some sort of Lawtech to disrupt the legal industry ( and if no one does, I am going to just do it myself. )
Perhaps only 1% of the human population can do the work required to manipulate these machines because they require so much logical and mathematical proficiency. After that, in order to succeed in solving a useful problem they must also achieve mastery in a business domain. Then you have to manage the different specialists at both ends, programmers and salesmen to accomplish your vision.
The average Singaporean cannot do this.
c) Educational pathway for the average Singaporean is still inadequate.
Average generally means someone who cannot qualify for a non-local degree. The 50th percentile would need to settle for a Polytechnic diploma. The good news is that while I was in charge of data.gov.sg, I was aware that the Government was already investing $1000 more a year on the Poly student compared to his or her JC counterparts. The question is whether the investment is bearing fruit for the Nation ?
From this very brutal but logical posting from Limpeh, the pathway for Poly graduates is not world class yet. Paying for a private degree will signal to gatekeeper that you are not good enough for a decent job and it costs a bomb compared to a local degree. But what Limpeh hints at is much darker. If a parent pays for private degree, the kid would go through it and thinking that they are superstars in their own degree programs, which really isn't as competitive as the course administrators claims to be, graduate with a sense of entitlement.
There are a lot of admirers for the German apprenticeship system. But the German economy has a network of Mittelstands or family-owned world-beating SMEs who can give craftsman a decent career.
We don't. We just have SMEs who want to stick their hands out and ask for government help to bring more foreign workers who can tolerate being underpaid and abused.
d) We are a yardstick society
Regardless of the well-meaning words of our politicians, Singapore has always been a yardstick society.
But it's not the government's fault.
If women continue to see men as a pillar for financial support, then the yardstick will always be about income and wealth. The men who are likely to start families with the most good looking women would always be the pilot, lawyer, doctor or accountant. Economic growth in Shanghai was rapid because Shanghainese women do not care whether you are short, tall, ugly or handsome. To get Shanghainese women to say yes, give her an apartment. Even now China is expecting more than 5% growth in a horrific year.
The solution is not to get rid of the yardstick but finding space for different yardsticks.
And we did try that too ! Resulting in the DSA program which led to RI being shamed even though they remain an elite Tier 1 institution.
In Conclusion - What does it mean for baby Durendal ?
It means daddy may not bring you into a better world which was promised to daddy when he himself was born in.
We will not know whether you will become the sword of your father's ambition, but you must endure.
There is a genuine possibility of Peak Singapore - a point of prosperity which heralds a golden period for us and then it's downwards all the way. Problem is that we may have reached Peak Singapore 2 years ago.
But as of now these are the plans for my kids :
a) I spare my kids form enrichment classes except perhaps swimming and cycling. Kids need to play to develop their imagination. I had Dungeons and Dragons which defined a huge portion of my life.
b) Tuition money is invested into a portfolio to be compounded and released until they start working. My kids need to enjoy learning to have hope of becoming the top 1% of knowledge workers. Tuition may not be best approach unless they reason with me that they need it but they need to learn independently. I will be personally very hands-on in this area as I expect to cover the Science and Arts subjects with ease by then.
c) If they cannot get into the JC track, they are expected to start work unless a local university admits them. If they are not academically inclined, why force them ? If my plan works, my kids would be able to tap into any online course material to pick up the skills they need.
d) They will all learn to manage money. Money management is where average folks have a great advantage over the sophisticated intellectuals. This is where there is plenty of evidence that active managers underperform passive ETFs.
Saturday, January 23, 2016
Personal Update : Two years have passed since my last paycheck !
It's time for a another update.
It's been two years since I had a pay-check, if this were a disaster recovery exercise, I would say that it has been rather successful so far as I still did not draw upon my capital.
a) My son is not here yet.
At the personal level, I am waiting for the birth of my son. It can happen any day now. Right now I am more afraid than my wife who seems to be quite calm.
b) Financial markets
For all the doom and gloom, the markets did not faze me at all.Maybe I have more urgent priorities balancing school work with families.
Results wise, like most of you I continued to lose money since the new year. However, as my portfolio is defensive in nature with a beta around 0.5, I tend to lose about half of what the STI would lose. I will recover a bit every three months when dividends get issued but I can only farm back about $2000 a month this year as I should be focused on my family expenses. As my savings are humble as a student, I would be putting it to reinforce some of my heavily beaten down small cap dividend positions.
But this is a great time to have a job and savings !
The STI ETF is yielding a big fat 4.2% and trading around a P/E of 12, so stock selection is not really required to get a good price from the markets. It might be time to start hankering for a SG-REIT index ETF, at a time like this passively holding such an index fund would lock in about 7% yields, not bad at all if you are planning for retirement,
Yes, the main thesis is doom and gloom and this would have to run its course.
But are things that bad ?
Chinese manufacturing may be contracting but China might counteract it with a growing services sector. A lot of consolidation may stem from corrupt officials curtailing their spending. The economy may well become even less corrupt and the Chinese economy might become cleaner and more transparent over the long term.
Oil prices are low and oil firms are suffering. Sure, this is bad for oil firms, but households can now have more income for other things after spending less on gasoline and petrol. I imagine a GDP surge in some economies which are dependent on oil. I can also imagine companies making quite a bit on the re-opening of the Iranian economy.
Singapore real estate is heavily regulated. Prices will hit a low but the government can remove some cooling measures and things may rebound after that. Real estate prices are something that's never out of the government's control. Nevertheless, if you are betting on real estate going up indefinitely, you might be wrong over the long term as SIBOR is not going your way at all. ( I bought an EC. I was betting on price gap narrowing between my EC and private condos around the area over a period of 10 years which is different kind of gamble. )
At this stage, I don't think things will be as bad as painted in the media. My bet is that markets may be down slightly, up slightly or up by a lot. But markets are unlikely to be down by a lot in 2016. One upside is the TPP although the consensus is that SG would not benefit from it that much at first.
As in all bear markets, there are market neurotics who say that the sky is falling, these are the buggers who have no business buying any stocks. There are also non-investors who are spreading gloom because they have no skin in the game abetting the neurotics to further depths of despair.
My job is to stay calm, keep in touch with the news and continue collecting my dividends and use my new found legal skills as a fall back plan. Markets will recover eventually and it's good to come up with a plan to exploit that after all the neurotics have fled and their homes have been foreclosed.
c) School - Finally started to look for an internship / training contract !
I've been procrastinating in this area. I spent my first year clearing my community service requirements and the last holiday was spent worrying over my mum's health problems. But I can't procrastinate anymore as I fear that my grades would drop to a point where I would not be welcome in the better firms in Singapore.
There is also the shadow of ageism lurking in the corner as I know of seniors my age who have not scored a TC yet. So today, I seem to be the only Year 2 in a Legal Career fair for students to find training contracts and internships. I left my resume with some firms and one fairly large firm is already showing interest in my profile. I'm crossing my fingers that I can get a TC by this semester.
Anyway, this semester seems more ridiculous than the last one, some of us get out of lecture rooms visibly confused. There is now no attempt to systematize or build a framework around the course material anymore. We are at the deep end. Everything is a just a stream of consciousness, not unlike the last two David Bowie music videos....
d) Books I an reading
I am actually going to stop my Economist and Edge subscriptions to clear my backlog of books. I am reading a very amazing book by Cal Newport called Deep Work.This books has interesting insights which fundamentally change some of the ideas in my own line of books.
This will be discussed in another posting soon enough...
It's been two years since I had a pay-check, if this were a disaster recovery exercise, I would say that it has been rather successful so far as I still did not draw upon my capital.
a) My son is not here yet.
At the personal level, I am waiting for the birth of my son. It can happen any day now. Right now I am more afraid than my wife who seems to be quite calm.
b) Financial markets
For all the doom and gloom, the markets did not faze me at all.Maybe I have more urgent priorities balancing school work with families.
Results wise, like most of you I continued to lose money since the new year. However, as my portfolio is defensive in nature with a beta around 0.5, I tend to lose about half of what the STI would lose. I will recover a bit every three months when dividends get issued but I can only farm back about $2000 a month this year as I should be focused on my family expenses. As my savings are humble as a student, I would be putting it to reinforce some of my heavily beaten down small cap dividend positions.
But this is a great time to have a job and savings !
The STI ETF is yielding a big fat 4.2% and trading around a P/E of 12, so stock selection is not really required to get a good price from the markets. It might be time to start hankering for a SG-REIT index ETF, at a time like this passively holding such an index fund would lock in about 7% yields, not bad at all if you are planning for retirement,
Yes, the main thesis is doom and gloom and this would have to run its course.
But are things that bad ?
Chinese manufacturing may be contracting but China might counteract it with a growing services sector. A lot of consolidation may stem from corrupt officials curtailing their spending. The economy may well become even less corrupt and the Chinese economy might become cleaner and more transparent over the long term.
Oil prices are low and oil firms are suffering. Sure, this is bad for oil firms, but households can now have more income for other things after spending less on gasoline and petrol. I imagine a GDP surge in some economies which are dependent on oil. I can also imagine companies making quite a bit on the re-opening of the Iranian economy.
Singapore real estate is heavily regulated. Prices will hit a low but the government can remove some cooling measures and things may rebound after that. Real estate prices are something that's never out of the government's control. Nevertheless, if you are betting on real estate going up indefinitely, you might be wrong over the long term as SIBOR is not going your way at all. ( I bought an EC. I was betting on price gap narrowing between my EC and private condos around the area over a period of 10 years which is different kind of gamble. )
At this stage, I don't think things will be as bad as painted in the media. My bet is that markets may be down slightly, up slightly or up by a lot. But markets are unlikely to be down by a lot in 2016. One upside is the TPP although the consensus is that SG would not benefit from it that much at first.
As in all bear markets, there are market neurotics who say that the sky is falling, these are the buggers who have no business buying any stocks. There are also non-investors who are spreading gloom because they have no skin in the game abetting the neurotics to further depths of despair.
My job is to stay calm, keep in touch with the news and continue collecting my dividends and use my new found legal skills as a fall back plan. Markets will recover eventually and it's good to come up with a plan to exploit that after all the neurotics have fled and their homes have been foreclosed.
c) School - Finally started to look for an internship / training contract !
I've been procrastinating in this area. I spent my first year clearing my community service requirements and the last holiday was spent worrying over my mum's health problems. But I can't procrastinate anymore as I fear that my grades would drop to a point where I would not be welcome in the better firms in Singapore.
There is also the shadow of ageism lurking in the corner as I know of seniors my age who have not scored a TC yet. So today, I seem to be the only Year 2 in a Legal Career fair for students to find training contracts and internships. I left my resume with some firms and one fairly large firm is already showing interest in my profile. I'm crossing my fingers that I can get a TC by this semester.
Anyway, this semester seems more ridiculous than the last one, some of us get out of lecture rooms visibly confused. There is now no attempt to systematize or build a framework around the course material anymore. We are at the deep end. Everything is a just a stream of consciousness, not unlike the last two David Bowie music videos....
d) Books I an reading
I am actually going to stop my Economist and Edge subscriptions to clear my backlog of books. I am reading a very amazing book by Cal Newport called Deep Work.This books has interesting insights which fundamentally change some of the ideas in my own line of books.
This will be discussed in another posting soon enough...
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