National Day is over so it's time to address some of the absurdities which I have raised in the previous article on the Singapore Dream.
One way to deal with the absurdities is to take a risk.
Sometimes absurdities arise because of the way we approach risk. Take for instance, in the field of investments. If you want higher returns, you have a to buy equities and take on some market and credit risk. If your investment fails, it will take you further from your goal of financial independence. Financial bloggers always support the idea of investing in equities over time horizons. This way, the efforts have a much better chance of bearing fruit although you will end up owning horrible companies being run by occasional crooks.
I recently took an academic risk and signed up for International Moots. It's not a subject I am familiar with from my work experience and previous degrees and a lot of young hotshots are taking the subject in the hopes of representing the University. From a risk-return perspective, this move is not particularly rational because it takes up a lot of a student's time. But the subject has coaches from the private sector and the folks who speak get a moment of 1-1 coaching which is hard to get in a University environment. Of course, representing the University can look really good on a student's resume.
This the essence in dealing with absurdity #4.
In the local education system, we stick to something that we are familiar with so that we will get a better grade on it but the tradeoff is that we learn less because we are not exploring new territory and developing new and unique capabilities. My personal experience is that grading by the curve creates this kind of effect on students. I think students make a fundamental mistake when they see their education as a portfolio of bonds which give steady but guaranteed returns, there is no room for innovation. At a broader level, rewards systems in a meritocracy run by similar principles. Reporters are only good to a sportsman only after he has achieved a significant result. No points are given for effort.
In a system where rewards commensurate only with results, one possibility is to take small and steady bets on games of high volatility. An Olympian who gets gold for Singapore becomes an instant millionaire and gets an entry into the history books. This is an amazing result.
This is the essence of my foray into cryptocurrency mining. Some contracts have very low rates of return but I have targeted currencies with a high volatility to take advantage of the currency highs which happen throughout the life of the contract. Some bets starts to take on the character of a call option - something which may expire worthless but may also result in extraordinary returns.
Therefore, the to crack some of the absurdities of the Singapore Dream, not everything you do has to be ultra-stable and involve the well-trodden paths of other Singaporeans. One way of winning the Game of life is to have a broad general approach to minimise your risks in major areas of your life ( like a basic job ), but allocate a certain amount of time to take small amounts of risks which would mostly return nothing much, but has the odd probability of outstanding returns.
Due to my International Moots schedule, this blog will slow down it's updates until early September.
Unless something sensational happens, see you next month !
Friday, August 12, 2016
Monday, August 08, 2016
Conformity, Pokemon Go, and Skepticism.
For the past 2 days, I've joined the ranks of the Pokemon Go zombies.
It started out as a way to bond with my daughter who is not very attached to me. With Pokemon Go, she was more willing to go on a walk with me to catch random virtual pets. I found myself levelling up and catching Pokemon with the intention of at least, showing my daughter what fighting a Gym is like.
While I was not hooked ( I am obsessed with other things right now like IoT and Blockchains. ), here are some insights on this new craze.
a) It amazing how people get polarised into people who like Pokemon Go and haters with room in-between.
I consider myself someone in-between. I am a casual gamer who use the app to bond with my kid. It's interesting that Facebook has become polarised so easily. At one end of the spectrum are the crazy fanboys who share every achievement and screenshot. At the other end are nay-sayers.
Its interesting that one faction can call the other zombies when they themselves have their own anti-Pokemon interest group.
b) Pokemon craze will die out very quickly but Augmented Reality is here to stay.
Pokemon Go will be forgotten in about half a years time. There is no reason for it to be sustained given that other games like Farmville and Draw Anything petered out within months but Augmented reality is here to stay.
Expect more games with more adult teams with similar mechanics to emerge. Also expect businesses to get into this app as a form of location based advertising. A missed opportunity was an app which employs a real cryptocurrency which can really be a platform for disruption in the future. Imagine landlords giving out tiny vouchers for shoppers to move to various checkpoints in their shopping centres.
c) Investors can learn a thing or two from this phenomenon
Investors should always maintain a level of skepticism when facing new technologies. Skepticism being a middle ground between enthusiasm and cynicism. Augmented reality moving mainstream is something brewing for a long time but not all technologies have been able to get their killer apps so easily. Semantic web technology has been around longer but it is so arcane that we've yet to see a similar breakthrough. Almost all my personal time after law school is now invested in Dapps and blockchains because I see it as something as big as the emergence of the Internet itself.
d) Keep your risk positions small is still key.
When it comes to time and money, its always good to keep the risk of each position small.
When I got into crowdfunding I kept my full investment below $5,000. Now I face two possible defaulting campaigns. Now I am getting into cryptocurrencies, I am only playing with hundreds of dollars but will scale it to no more than 1% of my entire portfolio size.
e) What is a Smart City all about ?
At the end of the day, Pokemon Go and various new initiatives should not always be a positive thing about choosing to become a Smart City.
I am generally very bullish about Singapore's future, but I can imagine driverless cars killing off the livelihoods of taxi drivers, ticketing kiosks killing off cinema workers. On the whole, Singapore needs to make this mercy killing as quickly as possible so that we can move on and adapt to a new and better way of life.
This does not only mean lower-end jobs, I expect many high end knowledge work to be disrupted as well. Blockchains will destroy traditional banks and clearing houses will be a thing of the past. Even the LRIS CPF plan will have a severe impact on the fund management industry, which is why such a great idea for common folk will not see a deadline for implementation.
At the end of the day, the only means of survival is a person's ability to pick up a new skill as all industries face its forces of creative destruction.
It started out as a way to bond with my daughter who is not very attached to me. With Pokemon Go, she was more willing to go on a walk with me to catch random virtual pets. I found myself levelling up and catching Pokemon with the intention of at least, showing my daughter what fighting a Gym is like.
While I was not hooked ( I am obsessed with other things right now like IoT and Blockchains. ), here are some insights on this new craze.
a) It amazing how people get polarised into people who like Pokemon Go and haters with room in-between.
I consider myself someone in-between. I am a casual gamer who use the app to bond with my kid. It's interesting that Facebook has become polarised so easily. At one end of the spectrum are the crazy fanboys who share every achievement and screenshot. At the other end are nay-sayers.
Its interesting that one faction can call the other zombies when they themselves have their own anti-Pokemon interest group.
b) Pokemon craze will die out very quickly but Augmented Reality is here to stay.
Pokemon Go will be forgotten in about half a years time. There is no reason for it to be sustained given that other games like Farmville and Draw Anything petered out within months but Augmented reality is here to stay.
Expect more games with more adult teams with similar mechanics to emerge. Also expect businesses to get into this app as a form of location based advertising. A missed opportunity was an app which employs a real cryptocurrency which can really be a platform for disruption in the future. Imagine landlords giving out tiny vouchers for shoppers to move to various checkpoints in their shopping centres.
c) Investors can learn a thing or two from this phenomenon
Investors should always maintain a level of skepticism when facing new technologies. Skepticism being a middle ground between enthusiasm and cynicism. Augmented reality moving mainstream is something brewing for a long time but not all technologies have been able to get their killer apps so easily. Semantic web technology has been around longer but it is so arcane that we've yet to see a similar breakthrough. Almost all my personal time after law school is now invested in Dapps and blockchains because I see it as something as big as the emergence of the Internet itself.
d) Keep your risk positions small is still key.
When it comes to time and money, its always good to keep the risk of each position small.
When I got into crowdfunding I kept my full investment below $5,000. Now I face two possible defaulting campaigns. Now I am getting into cryptocurrencies, I am only playing with hundreds of dollars but will scale it to no more than 1% of my entire portfolio size.
e) What is a Smart City all about ?
At the end of the day, Pokemon Go and various new initiatives should not always be a positive thing about choosing to become a Smart City.
I am generally very bullish about Singapore's future, but I can imagine driverless cars killing off the livelihoods of taxi drivers, ticketing kiosks killing off cinema workers. On the whole, Singapore needs to make this mercy killing as quickly as possible so that we can move on and adapt to a new and better way of life.
This does not only mean lower-end jobs, I expect many high end knowledge work to be disrupted as well. Blockchains will destroy traditional banks and clearing houses will be a thing of the past. Even the LRIS CPF plan will have a severe impact on the fund management industry, which is why such a great idea for common folk will not see a deadline for implementation.
At the end of the day, the only means of survival is a person's ability to pick up a new skill as all industries face its forces of creative destruction.
Sunday, August 07, 2016
What Singapore can learn from Donald Trump ?
As a follow-up to the article on the Absurdity of the Singapore Dream and the upcoming National Day Celebrations, I would just like to talk about policies at a macro-level. I wish to extend the argument that Singapore can learn a little bit from the rise of Donald Trump.
As a disclaimer, when I say that the government can channel Donald Trump when drafting policies, I was not referring to his racists, seditious and xenophobic rants. Instead, Singapore can do something to prevent the hijack of the existing government if they figured out why Donald Trump is edging closely to Hilary Clinton today in the Presidential elections.
More importantly, Singapore is not safe from a demagogue. Roy Ngerng is an inadequately informed citizen and was prone to massage his data to make the CPF programme look bad. Even though he lost a series of lawsuits, just look at how urgently the government is reforming the CPF program today with the introduction of LRIS and escalating payments in CPF Life. Now imagine what would happen if a highly-educated Roy Ngerng like character started making sense when addressing the Singapore crowds but also was opportunistic enough to channel dissatisfaction towards foreigners and minorities.
My hypothesis is as follows : If the absurdities of living in Singapore grow to a point whereby Chinese non-degree males become dissatisfied with living here, the ground will be ripe for a revolution.
This is the reason why Donald Trump is so popular today. He tapped into a wellspring of anger from white blue-collared men who have beens sidelined by elites. In America is very wrong to call someone a nigger, but calling someone a hillbilly or a redneck is ok and considered politically correct. Right up till this year, white blue-collared men have no voice until Donald Trump step forth and started addressing their concerns.
This lies at the root of my suggestions for what our government can do.
The government needs to study Chinese non-degree men very carefully while the going is good in Singapore. The cost of this study does not need to be borne by all Singaporean tax-payers because it can be paid for by CDAC or even part of NTUC. The last time I checked, CDAC still takes $1 off my paycheck every month.
What do these folks do in their spare time ?
Are they married, do they have children ?
Do they have adequate savings ?
Do they really need to own their home ?
Do they hold permanent or contract jobs ?
What are their aspirations ?
What are their hobbies ?
What is their life satisfaction levels ?
Upon personal reflection, the only time I get to meet these folks is when I am doing my reservist but we tend to create our own cliques very carefully once we settle down in camp, so I do not have a very conclusive idea of what they want out of life.
I cannot imagine our Admin officers and Philosopher Kings having a firm grasp of the working class Chinese men either.
But I do know this :
It is a very bad mistake to think that these folks want what we want. Social science studies already show that some guys just want to plug into the virtual world and not settle down.
Singapore as a Smart City can also do this way better than other countries. Anonymized data collected by surveyors can be uploaded as a dataset and then processed by members of the public and hackers. We can even build a new business around their needs.
Of course, my suggestion is certainly not for Singapore to detract from the excellent work already done on minorities. When I was a government officer, there was indeed some evidence that this has always been quite big in the policy maker's minds.
As a disclaimer, when I say that the government can channel Donald Trump when drafting policies, I was not referring to his racists, seditious and xenophobic rants. Instead, Singapore can do something to prevent the hijack of the existing government if they figured out why Donald Trump is edging closely to Hilary Clinton today in the Presidential elections.
More importantly, Singapore is not safe from a demagogue. Roy Ngerng is an inadequately informed citizen and was prone to massage his data to make the CPF programme look bad. Even though he lost a series of lawsuits, just look at how urgently the government is reforming the CPF program today with the introduction of LRIS and escalating payments in CPF Life. Now imagine what would happen if a highly-educated Roy Ngerng like character started making sense when addressing the Singapore crowds but also was opportunistic enough to channel dissatisfaction towards foreigners and minorities.
My hypothesis is as follows : If the absurdities of living in Singapore grow to a point whereby Chinese non-degree males become dissatisfied with living here, the ground will be ripe for a revolution.
This is the reason why Donald Trump is so popular today. He tapped into a wellspring of anger from white blue-collared men who have beens sidelined by elites. In America is very wrong to call someone a nigger, but calling someone a hillbilly or a redneck is ok and considered politically correct. Right up till this year, white blue-collared men have no voice until Donald Trump step forth and started addressing their concerns.
This lies at the root of my suggestions for what our government can do.
The government needs to study Chinese non-degree men very carefully while the going is good in Singapore. The cost of this study does not need to be borne by all Singaporean tax-payers because it can be paid for by CDAC or even part of NTUC. The last time I checked, CDAC still takes $1 off my paycheck every month.
What do these folks do in their spare time ?
Are they married, do they have children ?
Do they have adequate savings ?
Do they really need to own their home ?
Do they hold permanent or contract jobs ?
What are their aspirations ?
What are their hobbies ?
What is their life satisfaction levels ?
Upon personal reflection, the only time I get to meet these folks is when I am doing my reservist but we tend to create our own cliques very carefully once we settle down in camp, so I do not have a very conclusive idea of what they want out of life.
I cannot imagine our Admin officers and Philosopher Kings having a firm grasp of the working class Chinese men either.
But I do know this :
It is a very bad mistake to think that these folks want what we want. Social science studies already show that some guys just want to plug into the virtual world and not settle down.
Singapore as a Smart City can also do this way better than other countries. Anonymized data collected by surveyors can be uploaded as a dataset and then processed by members of the public and hackers. We can even build a new business around their needs.
Of course, my suggestion is certainly not for Singapore to detract from the excellent work already done on minorities. When I was a government officer, there was indeed some evidence that this has always been quite big in the policy maker's minds.
Thursday, August 04, 2016
Personal Update
Just a short personal update :
a) Completed my internships
I have completed 6 week of internships first with a Criminal Legal Aid Scheme then subsequently with a legal department of a technology consulting firm.
While it's probably safer not to discuss the work I did during my internships, I would say that seeing the law in action is a much welcome personal development. As I've spent 30 months without a pay check, it would interesting to note that the transition into employment has not as smooth as I thought.
My schedules are all fairly lenient work schedules where I can return home on the dot. It took about 3-4 weeks for my body to get back to a 6 hour sleep cycle and I even fell sick for a few days.
Things only started improving after I cut down drastically on carbohydrate intake, then I was able sleep and wale up without the use of an alarm. Another way to make the work experience better is to combine coffee intake with one cup of green tea. This way, you can be alert without becoming too edgy and nervous.
b) Financial Markets
There has been no developments in the market until a few days ago when the CPF board is making fairly substantial enhancements to broadening the investment options of fellow citizens via LRIS and allowing CPF Life to have payouts which appreciate with time, I will leave the work of explaining to the bloggers who have spoken on the issue.
The major themes of the local market is that it is largely bullish after Brexit, but there are some looking risks in the horizon for us yield investors. Industrial REITs will face some downward pressure with a looming oversupply and retail looks quite dismal. I spent some time roaming around Marina Square and Suntec on weekdays and it seems quite bad to be a landlord in orchard road these days. Perhaps with rents trending down, we can see some new ideas emerge.
Another team is the dissolution of Swiber. I think Swiber is just a the beginning for O&G stocks. Fortunately, I don't have these counters in my portfolio.
c) Books
The most exciting book I've read recently is Sarong Party Girls. Otherwise, I have been reading aggressively on Blockchains and Smart Contracts. I've gotten quite into Blockchain technology with my aim of becoming an expert over the upcoming semester, I'm in the middle of going through the literature but expect to do some hardware hacking and mining contract purchase over the next 3 months.
This is a very exciting time for me as I've found something which touches on my IT, Finance and legal background. It's something I hope I don't screw up on over the next few months. Nevertheless expect me to write a lot more about my foray in Blockchains over the next few months.
d) Back to school tonight
As I have chosen to take on the super challenging International Moots module, I actually go back to school tonight and may even spent the whole day back in University tomorrow to read up on public international law. This will form the main part of my struggle over the next 2 months : taking a completely alien area of law of Public International Law and privately nurturing an obsession with cryptocurrencies and smart contracts.
Interestingly, I was given an invitation to attend a business lecture next week which is unrelated to my current legal course. I will be hobnobbing with the top academic authorities on blockchains.
Hopefully by this weekend, I would have something more interesting for everyone.
Friday, July 29, 2016
What does Trump, Brexit and NUS Freshman Orientation have in common ?
Wow ! The last article broke a major record with more than 1500 hits within the first 24 hours. I will need some time to follow up on that topic as we head towards National Day.
This weekend's article is about Trump, Brexit and NUS.
What do they have in common ?
What the events have in common is that all three events are animated by the same force : Tribalism.
A lot of investors and political commentators do not really understand Trump and Brexit voters. To help illustrate my case, here is a personal story.
When I was a government officer, we held a software competition for secondary schools and some tertiary institutions and I was sent to be one of the judges to determine who should win the contest. The entries have all been stripped of student names and participating schools so that judges can make a decision as to who should win.
After choosing 3 entries for the winning teams, I was asked whether I could change my selection. Apparently, all the three entries me and my fellow judges chose turned out to be from the same elite school. I held my ground saying that my decision was final and that meritocracy has to prevail. It was not apparent during judging that all three entries came from the same school.
After the announcement of the results, some ITE lecturers came to speak to me. They explained how difficult it was to motivate the ITE students and it was miracle that they could even create software using this tool called MIT App Inventor. I agreed with their stand but I said that unless the competition organizers created special awards for the best ITE and polytechnic team, I would have to do my part and award the prizes to that ONE school which won all three prizes. The lecturers were disappointed with my response and said that they would want to review whether they would participate in such competitions in the future.
How does this story relate to Trump and Brexit ?
The Trump and Brexit supporters are not irrational idiots as the mainstream press has portrayed them to be. In fact, collectively, they are doing what any logical player would behave.
Once you lock a group of people out of game and they have no chance to win no matter what they do, they will find some way to stop participating in the political process. Push them too far and they will find ways to destroy that system because a lot of volatility will give them a chance to be ahead of the pack.
Chaos becomes their only ladder.
Brexit and Trump gave these voters a political voice. For the first time, someone is fighting for their rights and way of life. White men who do not have degrees still have a sense of pride. The American South has a strong culture of honor. They want to work to earn a living to support their families and will not be happy living on handouts. When members of a majority ethnic race are sidelined this way, the reaction can be felt in the polls because these people are not minorities. Tribalism pulled the UK out of the EU !
Tribalism as an animating force also influences NUS Freshmen orientation culture except that the roots of this may not economic in nature.
I was an NUS undergrad once, we came in fresh from NS and I also felt anger being a year older than some girls and Malaysians in Raffles Hall and yet being made to greet them as seniors. Imagine all that sexual tension felt by NUS males, but the feeling of impotence as they have no decent jobs, no sign of a bright future ahead, and no financial security. 20 years ago, there was a story about this ex-Commando who, after being talked down by Malaysian men and women a year younger than him, eventually lost it and challenged fellow hostelites to a fist fight. I never figured out how the story ended but in the end, all Singaporean NS men in Raffles Hall were given pre-orientation counselling and told that they could walk away anytime. As for me, I walked away after 1 week.
In no way am I condoning the activities in NUS, but the roots of a lot of ills in this world comes from male insecurity. A lot of swaggering and posturing from NUS male undergrads comes from personal helplessness and insecurity. I would call this pathetic but I was also pathetic myself when I was younger. I think this leads to the over-sexualized activities because it's all about compensation for their flaccid masculinity.
I'm just going to end by giving advice to that creepy undergrad who asked a girl for sex over Whatsapp. The reason I do this is because I could have been that guy if I were in my 20s lah.
I think undergraduate males do not really know their true value in the dating market. If you are in your 20s, you are a NINJA. No Income, no jobs/assets. If you are engaged in your studies and build your resume, you can play a late game of attrition against your female "opponent".
Your assets will only appreciate in time. Her beauty fades. This is not a fair game.
Don't surrender to your insecurity. You will be able attain some status in Singapore with your degree if you diligently apply yourself and then you will be ahead of 75% of the rest of the male population. Hold back.
When women hit their 30s, they will be much more kinder to you and you can potentially win this game.
In fact, right now I'm going through this phase of life seeing all my old friends get married after their 40s.
All their wives are young and hot.
Congratulations ! As we say after a board game session - Good game !
This weekend's article is about Trump, Brexit and NUS.
What do they have in common ?
What the events have in common is that all three events are animated by the same force : Tribalism.
A lot of investors and political commentators do not really understand Trump and Brexit voters. To help illustrate my case, here is a personal story.
When I was a government officer, we held a software competition for secondary schools and some tertiary institutions and I was sent to be one of the judges to determine who should win the contest. The entries have all been stripped of student names and participating schools so that judges can make a decision as to who should win.
After choosing 3 entries for the winning teams, I was asked whether I could change my selection. Apparently, all the three entries me and my fellow judges chose turned out to be from the same elite school. I held my ground saying that my decision was final and that meritocracy has to prevail. It was not apparent during judging that all three entries came from the same school.
After the announcement of the results, some ITE lecturers came to speak to me. They explained how difficult it was to motivate the ITE students and it was miracle that they could even create software using this tool called MIT App Inventor. I agreed with their stand but I said that unless the competition organizers created special awards for the best ITE and polytechnic team, I would have to do my part and award the prizes to that ONE school which won all three prizes. The lecturers were disappointed with my response and said that they would want to review whether they would participate in such competitions in the future.
How does this story relate to Trump and Brexit ?
The Trump and Brexit supporters are not irrational idiots as the mainstream press has portrayed them to be. In fact, collectively, they are doing what any logical player would behave.
Once you lock a group of people out of game and they have no chance to win no matter what they do, they will find some way to stop participating in the political process. Push them too far and they will find ways to destroy that system because a lot of volatility will give them a chance to be ahead of the pack.
Chaos becomes their only ladder.
Brexit and Trump gave these voters a political voice. For the first time, someone is fighting for their rights and way of life. White men who do not have degrees still have a sense of pride. The American South has a strong culture of honor. They want to work to earn a living to support their families and will not be happy living on handouts. When members of a majority ethnic race are sidelined this way, the reaction can be felt in the polls because these people are not minorities. Tribalism pulled the UK out of the EU !
Tribalism as an animating force also influences NUS Freshmen orientation culture except that the roots of this may not economic in nature.
I was an NUS undergrad once, we came in fresh from NS and I also felt anger being a year older than some girls and Malaysians in Raffles Hall and yet being made to greet them as seniors. Imagine all that sexual tension felt by NUS males, but the feeling of impotence as they have no decent jobs, no sign of a bright future ahead, and no financial security. 20 years ago, there was a story about this ex-Commando who, after being talked down by Malaysian men and women a year younger than him, eventually lost it and challenged fellow hostelites to a fist fight. I never figured out how the story ended but in the end, all Singaporean NS men in Raffles Hall were given pre-orientation counselling and told that they could walk away anytime. As for me, I walked away after 1 week.
In no way am I condoning the activities in NUS, but the roots of a lot of ills in this world comes from male insecurity. A lot of swaggering and posturing from NUS male undergrads comes from personal helplessness and insecurity. I would call this pathetic but I was also pathetic myself when I was younger. I think this leads to the over-sexualized activities because it's all about compensation for their flaccid masculinity.
I'm just going to end by giving advice to that creepy undergrad who asked a girl for sex over Whatsapp. The reason I do this is because I could have been that guy if I were in my 20s lah.
I think undergraduate males do not really know their true value in the dating market. If you are in your 20s, you are a NINJA. No Income, no jobs/assets. If you are engaged in your studies and build your resume, you can play a late game of attrition against your female "opponent".
Your assets will only appreciate in time. Her beauty fades. This is not a fair game.
Don't surrender to your insecurity. You will be able attain some status in Singapore with your degree if you diligently apply yourself and then you will be ahead of 75% of the rest of the male population. Hold back.
When women hit their 30s, they will be much more kinder to you and you can potentially win this game.
In fact, right now I'm going through this phase of life seeing all my old friends get married after their 40s.
All their wives are young and hot.
Congratulations ! As we say after a board game session - Good game !
Tuesday, July 26, 2016
The Absurdity of the Singapore Dream
As National Day is around the corner, I just want to share one or two points about the absurdity of the Singapore Dream or what most Singaporeans accept as the right way of living.
My objective is not to demoralize you but to get the you to begin thinking about your life.
Here are some of my points :
1. There is an increasing evidence that living in the right district can get you into a better primary school and put you on better footing that everyone else. Rich folks already stay along Bukit Timah Road. Some parents become poor just to buy a home in those areas.
2. If you accept my argument that an education qualification is largely driven by signalling, then the only reason why you are making more money than your peers is not your skill but the branding of your university. You realise that your qualification gives you your higher income at the expense of others.
3. In 21 years, a medical degree at its current inflation rate can cost up till $480,000. It would be naive to not to believe that the cost will not be borne to the patients. Some folks want their children to make a lot of money as doctors and lawyers but complain about legal and medical fees.
4. You may want to pick up a university elective which teaches you something interesting but in the interests of grades, you stick to what you already know so that you will not blow your GPA. Its safer to learn new things on Coursera than SMU even though SMU cost me $70,000 and Coursera is free. ( I speak from personal experience )
5. At work you focus on experiential goods like travel, but the reason you need travel is because you are so stressed out by work. You become financial independent so that you can travel more. After becoming financial independent, you have no more work stress, so there is no need to travel anymore.
6. The CPF feels more like a tax than a source of security in your 20s. It gets better in your forties, but by then your OA is gone because of that HDB flat.
7. Also you can buy gold with your CPF-IS which does not yield anything, a crappy ILP with high management fees and commissions, but not a high-yielding counter like Asia Pay TV (This is not investment advice ).
8. You keep getting asked to be innovative and take one risks in your career, but because of home loans you need to manage, you cannot but choose the more secure path. If you are single, you can take risks, but Singaporean women will not take a risk on you.
9. You can become obsolete in your field even while you are being employed in it because its too expensive to invest in your training. You use your personal time to study, but you risk underperformance at work because you cannot use personal time for work.
10. Herbivores withdraw from the marriage market. Women react by being more open to Tinder relationships to meet the fewer men left in the market. Successful men get enough sex from Tinder and see no need to get married.
11. You buy a car so that you have greater speed. In practice, your friends who take public transport are more punctual than you because you need time to find parking.
12. Some children are security at old age. But they are also the cause of old age.
13. You lament about your life and want your kids to succeed where you have not. You then put them in a study regime which robs them of a childhood.
14. You are rich when you are old. But all the assets are tied to your home, which depreciates over whatever is left of 99 years. Government asks you to reverse mortgage it after you spent an entire life trying to own it fully. And you think you own your house and declare it an asset.
15. You read Angela Duckworth to work on your resilience and grit. You work really hard to increase your capacity for suffering. You suffer discomfort because it hones your resilience to take on more discomfort and suffering. This is so that you will enjoy the future more.
The points I raised is not a gripe. Some of the points come from personal experience and I would do it all over again if I were given a chance to relive my life again.
We still live in one of the best societies in the world.
But these points raises existential questions about the meaning of life and the Singaporean Dream.
Should we always go for the best schools, best jobs, good marriage and kids ? Why does society work so hard to misunderstand you when you try an alternative ?
Questioning the Dream too much is also not the best answer because it can lead to nihilism and can make you a cynic. That is not the objective of this article.
If there is no true purpose in life, then why even bother ?
I welcome readers to add to these points which I have raised.
My objective is not to demoralize you but to get the you to begin thinking about your life.
Here are some of my points :
1. There is an increasing evidence that living in the right district can get you into a better primary school and put you on better footing that everyone else. Rich folks already stay along Bukit Timah Road. Some parents become poor just to buy a home in those areas.
2. If you accept my argument that an education qualification is largely driven by signalling, then the only reason why you are making more money than your peers is not your skill but the branding of your university. You realise that your qualification gives you your higher income at the expense of others.
3. In 21 years, a medical degree at its current inflation rate can cost up till $480,000. It would be naive to not to believe that the cost will not be borne to the patients. Some folks want their children to make a lot of money as doctors and lawyers but complain about legal and medical fees.
4. You may want to pick up a university elective which teaches you something interesting but in the interests of grades, you stick to what you already know so that you will not blow your GPA. Its safer to learn new things on Coursera than SMU even though SMU cost me $70,000 and Coursera is free. ( I speak from personal experience )
5. At work you focus on experiential goods like travel, but the reason you need travel is because you are so stressed out by work. You become financial independent so that you can travel more. After becoming financial independent, you have no more work stress, so there is no need to travel anymore.
6. The CPF feels more like a tax than a source of security in your 20s. It gets better in your forties, but by then your OA is gone because of that HDB flat.
7. Also you can buy gold with your CPF-IS which does not yield anything, a crappy ILP with high management fees and commissions, but not a high-yielding counter like Asia Pay TV (This is not investment advice ).
8. You keep getting asked to be innovative and take one risks in your career, but because of home loans you need to manage, you cannot but choose the more secure path. If you are single, you can take risks, but Singaporean women will not take a risk on you.
9. You can become obsolete in your field even while you are being employed in it because its too expensive to invest in your training. You use your personal time to study, but you risk underperformance at work because you cannot use personal time for work.
10. Herbivores withdraw from the marriage market. Women react by being more open to Tinder relationships to meet the fewer men left in the market. Successful men get enough sex from Tinder and see no need to get married.
11. You buy a car so that you have greater speed. In practice, your friends who take public transport are more punctual than you because you need time to find parking.
12. Some children are security at old age. But they are also the cause of old age.
13. You lament about your life and want your kids to succeed where you have not. You then put them in a study regime which robs them of a childhood.
14. You are rich when you are old. But all the assets are tied to your home, which depreciates over whatever is left of 99 years. Government asks you to reverse mortgage it after you spent an entire life trying to own it fully. And you think you own your house and declare it an asset.
15. You read Angela Duckworth to work on your resilience and grit. You work really hard to increase your capacity for suffering. You suffer discomfort because it hones your resilience to take on more discomfort and suffering. This is so that you will enjoy the future more.
The points I raised is not a gripe. Some of the points come from personal experience and I would do it all over again if I were given a chance to relive my life again.
We still live in one of the best societies in the world.
But these points raises existential questions about the meaning of life and the Singaporean Dream.
Should we always go for the best schools, best jobs, good marriage and kids ? Why does society work so hard to misunderstand you when you try an alternative ?
Questioning the Dream too much is also not the best answer because it can lead to nihilism and can make you a cynic. That is not the objective of this article.
If there is no true purpose in life, then why even bother ?
I welcome readers to add to these points which I have raised.
Sunday, July 24, 2016
Lessons from Sarong Party Girls.
When I first read about the book Sarong Party Girls by Cheryl Tan Lu-Lien, I stopped everything I was doing, bought the e-book from Amazon and completed it within 4 days. It is truly Singaporean with almost every sentence written in Singlish and talks about the like of an SPG and the things she and her friends would like to do on weekends. I thoroughly recommend this fine book for readers of my blog.
Reading the book while thinking about the revelations from the social sciences about herbivores, got me thinking about how everything should fit together to form some sort of a business framework, and as it turns out, there is something out interesting when you put everything together.
Behold the Tree of Prosperity SPG 2 x 2 Matrix !
One axes of the matrix is based on gender. The other axes is based on esteem, which is broader than the notion of self-esteem in psychology but also incorporates the esteem granted to the archetype by society in general. ( A legal scholar will note that this concept of esteem is determined objectively and subjectively. )
If you build on this table, you will end up with four cells with implications on lifestyle design and strategy :
a) Herbivore
A herbivore is a man with low esteem. He has retreated from the dating and mating universe and exists purely to play computer games. In the novel, this cell would have been the Ah Beng, but Ah Bengs are a cultural relic of the past and Singaporeans are almost always English-speaking these days. The previous article mentions lifestyle design of herbivores and their special ability is to use short-term contracts to sustain a gamers lifestyle while living with their parents. This life is workable and paradoxically results in high personal satisfaction.
I am actually in the borderline herbivore quadrant. Although I am married, Coursera is favourite my MMORPG.
b) Sarong Party Girl
In Cheryl's novel, the SPG is played by the protagonist Jazeline and her buddies Imo and Fann. SPG's are women who sort of know that they won't really hack it with the local male market as most guys like myself are really looking for wife and mothers. In a similar way, they employ a form of retreat by hunting for white husbands. As demonstrated in the novel, while you might not have much respect for Jazeline, Jazeline does not have much respect for women who marry local men either.
The SPG lifestyle design is challenging because of their low income and high expenses. They typically hitch onto the Flower princes to be able to afford to club aggressively because otherwise savings would be impossible given their materialism. This is a difficult lifestyle because they can only remain fresh for this long and has to complete against Japanese and Chinese talents.
c) Flower Princes
High esteem men are flower princes. They are high income alpha males living it up in clubs and drive big European cars.
Flower Princes feature prominently in the novel ( Louis, Kim Meng ) and, personally, give us men a bad name, Flower princes are often family men who have enough money and expense accounts to entertain a low of people during the weekends. As males are not really built for monogamy, the riches guys can afford to live polygamous lives while it is legal to do so. This means paying for SPGs to sustain their clubbing lifestyle.
It's hard to sustain a flower prince life in Singapore because a lot of money is required to sustain this. Flower princes have the capital to sock something for retirement because the music is going to stop one day and many will end up crawling back to their families upon retrenchment. I hope they read the financial blogs on what to do when that happens.
d) Good Mare
My entire life was spent being rejected by Good Mares but I still love them for it.
There was only Good Mare featured in the novel ( Sharon ). Women who spend their lives in the better schools like CHIJ and St. Nicholas. As adults they have high tea at Goodwood Hotel. The highest form of Good Mare does not use material goods to distinguish themselves from others, they employ the most subtle brands to signal to their own kind.
Good Mare have only one financial strategy, Marry a guy who comes from RI or ACS ( In my opinion, its way better than a white guy here ).
The rest will take care of itself.
The power of the 2x2 matrix is that it gives a thinker the power to immediately stereotype and categorise a situation or a person.
The uses of such a model are infinite and may include :
Where do you see yourself in this matrix ?
Perhaps you really want to marry a Good Mare, how do you distinguish a Good Mare from an SPG ?
Do you see yourself as a Flower Prince but is actually a deluded Herbivore ?
You are a Flower Prince subsidizing SPGs every weekend in a club, are they hanging around because you grant them access to white men ?
A good fiction writer will have a field day creating new stories with these archetypes.
Reading the book while thinking about the revelations from the social sciences about herbivores, got me thinking about how everything should fit together to form some sort of a business framework, and as it turns out, there is something out interesting when you put everything together.
Behold the Tree of Prosperity SPG 2 x 2 Matrix !
One axes of the matrix is based on gender. The other axes is based on esteem, which is broader than the notion of self-esteem in psychology but also incorporates the esteem granted to the archetype by society in general. ( A legal scholar will note that this concept of esteem is determined objectively and subjectively. )
If you build on this table, you will end up with four cells with implications on lifestyle design and strategy :
a) Herbivore
A herbivore is a man with low esteem. He has retreated from the dating and mating universe and exists purely to play computer games. In the novel, this cell would have been the Ah Beng, but Ah Bengs are a cultural relic of the past and Singaporeans are almost always English-speaking these days. The previous article mentions lifestyle design of herbivores and their special ability is to use short-term contracts to sustain a gamers lifestyle while living with their parents. This life is workable and paradoxically results in high personal satisfaction.
I am actually in the borderline herbivore quadrant. Although I am married, Coursera is favourite my MMORPG.
b) Sarong Party Girl
In Cheryl's novel, the SPG is played by the protagonist Jazeline and her buddies Imo and Fann. SPG's are women who sort of know that they won't really hack it with the local male market as most guys like myself are really looking for wife and mothers. In a similar way, they employ a form of retreat by hunting for white husbands. As demonstrated in the novel, while you might not have much respect for Jazeline, Jazeline does not have much respect for women who marry local men either.
The SPG lifestyle design is challenging because of their low income and high expenses. They typically hitch onto the Flower princes to be able to afford to club aggressively because otherwise savings would be impossible given their materialism. This is a difficult lifestyle because they can only remain fresh for this long and has to complete against Japanese and Chinese talents.
c) Flower Princes
High esteem men are flower princes. They are high income alpha males living it up in clubs and drive big European cars.
Flower Princes feature prominently in the novel ( Louis, Kim Meng ) and, personally, give us men a bad name, Flower princes are often family men who have enough money and expense accounts to entertain a low of people during the weekends. As males are not really built for monogamy, the riches guys can afford to live polygamous lives while it is legal to do so. This means paying for SPGs to sustain their clubbing lifestyle.
It's hard to sustain a flower prince life in Singapore because a lot of money is required to sustain this. Flower princes have the capital to sock something for retirement because the music is going to stop one day and many will end up crawling back to their families upon retrenchment. I hope they read the financial blogs on what to do when that happens.
d) Good Mare
My entire life was spent being rejected by Good Mares but I still love them for it.
There was only Good Mare featured in the novel ( Sharon ). Women who spend their lives in the better schools like CHIJ and St. Nicholas. As adults they have high tea at Goodwood Hotel. The highest form of Good Mare does not use material goods to distinguish themselves from others, they employ the most subtle brands to signal to their own kind.
Good Mare have only one financial strategy, Marry a guy who comes from RI or ACS ( In my opinion, its way better than a white guy here ).
The rest will take care of itself.
The power of the 2x2 matrix is that it gives a thinker the power to immediately stereotype and categorise a situation or a person.
The uses of such a model are infinite and may include :
Where do you see yourself in this matrix ?
Perhaps you really want to marry a Good Mare, how do you distinguish a Good Mare from an SPG ?
Do you see yourself as a Flower Prince but is actually a deluded Herbivore ?
You are a Flower Prince subsidizing SPGs every weekend in a club, are they hanging around because you grant them access to white men ?
A good fiction writer will have a field day creating new stories with these archetypes.
Tuesday, July 19, 2016
The Herbivore's Guide to Lifestyle Design
Social science is full of surprises.
While we do know that there are men who give up on relationships and withdraw from society (also known as herbivores in Japan), up till recently we are not too sure on how they spend their time and whether they are satisfied with their personal lives.
This is why the findings of Erik Hurst are potentially earth-shattering.
Imagine being told that it's ok to forego the academic rat race and join the workforce as a non-degree holder and face a rapidly changing economy where unemployment is happening with greater frequency.
Just make sure that you avoid unhappiness by simply refusing to start a family and enjoy yourself by playing around 12-30 hours of computer games every week instead.
The idea that this is a feasible lifestyle that results in high personal satisfaction is not an easy fact for society to swallow.
Nevertheless, it is interesting to see how this pans out numerically.
a) Baseline Herbivore expenses
While a herbivore is gainfully employed, his expenses are similar to ordinary working single men who live with their parents, if he needs $150 for transport, $500 for food and $200 to support parents, on a starting Poly graduate's pay of $2,000 is decent if you only have to pay for broadband and a continuous stream of games from Steam.
Let us also make a presumption that an unemployed herbivore can sustain himself on $600 if their parents can look after themselves.
b) Savings through-out sporadic unemployment
Where there is no real need to plan for future expenses, a person can save only to cover situations of occasional unemployment. Imagine a baseline situation where a person can save $300 when employed but would only need $600 a month to live on when unemployed, then this person can sustain 1 month of unemployment for every 2 months of work.
Herbivore lifestyle design equation -> 2 months work = 1 months play
With a simple back of the envelope calculations, we can design a lifestyle for the herbivore male which is distinctively different from what we are conditioned by in Singapore. Herbivores don't have to participate in the vicious rat race which men must go through. In fact, by giving up women and family completely, they earn some semblance of radical independence which men normally cannot get.
This person can seek short term contract jobs to earn about $2,000 to $3,000 a month. Every 6 month contract earned can earn at least 3 month holiday where the person can stay at home and play computer games continuously and engage in personal hobbies.
As contract jobs are the new norm where jobs are rapidly getting automated, and I expect demand for contract labour to exceed supply even in the face of rapid automation of jobs.
What if Herbivore's learn to invest ?
While I doubt a person who makes a choice like this would even find it worthwhile to seek for rents in the market but at 8% returns, a portfolio size of $90,000 can support a herbivore lifestyle. For some, this may come in he form of a an accidental windfall or inheritance.
Hard Truths about life for Singaporean Males
There is, indeed, a blue pill and a red pill.
Now I could imagine that my son having grown up in the future, after years of rejection from the System and fickle women, would seriously consider this form of withdrawal as an alternative to the kind of responsible family life that Singaporeans males were conditioned to accept.
Once you remove the moral arguments based on duty and filial piety, you will realise that there are actually no logical impediments to accept the choice of turning herbivore if you believe that your aim in life is simply just to be happy.
By that time, all I can do as a disappointed dad would be to grab him by collar and tell him that he's like this because no one has accepted him for who he, I am disappointed at the low standards he has set in his life and he needs to try harder.
While we do know that there are men who give up on relationships and withdraw from society (also known as herbivores in Japan), up till recently we are not too sure on how they spend their time and whether they are satisfied with their personal lives.
This is why the findings of Erik Hurst are potentially earth-shattering.
Imagine being told that it's ok to forego the academic rat race and join the workforce as a non-degree holder and face a rapidly changing economy where unemployment is happening with greater frequency.
Just make sure that you avoid unhappiness by simply refusing to start a family and enjoy yourself by playing around 12-30 hours of computer games every week instead.
The idea that this is a feasible lifestyle that results in high personal satisfaction is not an easy fact for society to swallow.
Nevertheless, it is interesting to see how this pans out numerically.
a) Baseline Herbivore expenses
While a herbivore is gainfully employed, his expenses are similar to ordinary working single men who live with their parents, if he needs $150 for transport, $500 for food and $200 to support parents, on a starting Poly graduate's pay of $2,000 is decent if you only have to pay for broadband and a continuous stream of games from Steam.
Let us also make a presumption that an unemployed herbivore can sustain himself on $600 if their parents can look after themselves.
b) Savings through-out sporadic unemployment
Where there is no real need to plan for future expenses, a person can save only to cover situations of occasional unemployment. Imagine a baseline situation where a person can save $300 when employed but would only need $600 a month to live on when unemployed, then this person can sustain 1 month of unemployment for every 2 months of work.
Herbivore lifestyle design equation -> 2 months work = 1 months play
With a simple back of the envelope calculations, we can design a lifestyle for the herbivore male which is distinctively different from what we are conditioned by in Singapore. Herbivores don't have to participate in the vicious rat race which men must go through. In fact, by giving up women and family completely, they earn some semblance of radical independence which men normally cannot get.
This person can seek short term contract jobs to earn about $2,000 to $3,000 a month. Every 6 month contract earned can earn at least 3 month holiday where the person can stay at home and play computer games continuously and engage in personal hobbies.
As contract jobs are the new norm where jobs are rapidly getting automated, and I expect demand for contract labour to exceed supply even in the face of rapid automation of jobs.
What if Herbivore's learn to invest ?
While I doubt a person who makes a choice like this would even find it worthwhile to seek for rents in the market but at 8% returns, a portfolio size of $90,000 can support a herbivore lifestyle. For some, this may come in he form of a an accidental windfall or inheritance.
Hard Truths about life for Singaporean Males
There is, indeed, a blue pill and a red pill.
Now I could imagine that my son having grown up in the future, after years of rejection from the System and fickle women, would seriously consider this form of withdrawal as an alternative to the kind of responsible family life that Singaporeans males were conditioned to accept.
Once you remove the moral arguments based on duty and filial piety, you will realise that there are actually no logical impediments to accept the choice of turning herbivore if you believe that your aim in life is simply just to be happy.
By that time, all I can do as a disappointed dad would be to grab him by collar and tell him that he's like this because no one has accepted him for who he, I am disappointed at the low standards he has set in his life and he needs to try harder.
Sunday, July 17, 2016
The Power of Constraints and the Focus as a personal asset.
This is going to be a personal update.
I've spent the past 4 weeks doing my internships and I've been personally struggling with a normal workday after more than 30 months without regular employment. When I held my previous job, I would get flu once every one or two months. After I stopped work, I fell ill only once last year in October. I fell ill again 3 weeks into my internship.
I was also not as productive as I was during my professional years. I could study about 3-4 hours after leaving the office. These days, I have to struggle to get along with 6.5 hours of sleep every day.
The first insight for this article came along after a game session yesterday. My character was constrained in an extraordinary way which most players would not ordinarily experience. Rather than complain, I tried to stick it out to see what would happen and I was able to develop a refreshing method of dealing with adversity thrown at me. As these constraints are likely to remain even in the next session, I researched and accidentally stumbled into a new tactic for a different game.
I think that this is useful lesson in real life.
a) Constraints can be a good thing.
High-level TRPGs are slower and less fun than low-level games because players have too many options and there are many ways to reach a resolution in a game session, if you try to optimise too much, the game bogs down. Having a constraints limits you to just a few non-resource-intense options to keep the game fast and refreshing.
Similarly in real life, there is too much obsession with options when sometimes simply constraining some of them may help you make better life decisions. A discussion with a few high gifted but non-noteworthy individuals found that the reason why they have mediocre outcomes in life is because their heads are full of ideas and while executing one good idea, they keep getting interrupted with better ones.
b) Focus needs to be invested well.
The other thing which happened to me this that I spent 36 hours of life watching this really gripping and super-addictive Chinese Wuxia drama called Nirvana in Fire. My friend was raving about it months ago and I ignored it until this drama got mentioned in 1843, the lifestyle magazine of the Economist. Since when does a Chinese drama get mentioned by the super-savvy editors of that magazine ?
The 36 hours one a week took a heavy toll on me, I was planning my talk at the same time and I was unable to really have much time after work. I was shocked that I was so relieved when it was all over. Finally, I can finish up my readings on public international law for my next semester.
Your focus and attention is an important asset class which needs to be invested meticulously.
A little bit of leisure is fine, Game of Thrones Season 6 is just one hour a week for 12 weeks. The opportunity cost is small. 36 hours is about 3 non-fiction books for me.
While we are in the topic of time, focus and attention as an investible asset, some research from the University of Chicago, has raised some disturbing findings on the use of time. When investigating unemployed males with non-degree qualifications, something which I think Singapore policymakers should be more obsessed about, it was discovered that they engaged in 12 - 30 hours of computer game-play and scored high in contentment and life satisfaction. It was the married individuals in this demographic which expressed the most dissatisfaction with life.
This can potentially lead to perhaps one of the most controversial lifestyle advice for Singaporean males who lack a degree qualification and are concerned about future prospects :
Get used to staying single and play computer games, if you lose your job, you will still have a relatively high satisfaction with your lifestyle. The road to unhappiness lies with getting married.
Can't imagine any government being happy with advice given out like this.
I've spent the past 4 weeks doing my internships and I've been personally struggling with a normal workday after more than 30 months without regular employment. When I held my previous job, I would get flu once every one or two months. After I stopped work, I fell ill only once last year in October. I fell ill again 3 weeks into my internship.
I was also not as productive as I was during my professional years. I could study about 3-4 hours after leaving the office. These days, I have to struggle to get along with 6.5 hours of sleep every day.
The first insight for this article came along after a game session yesterday. My character was constrained in an extraordinary way which most players would not ordinarily experience. Rather than complain, I tried to stick it out to see what would happen and I was able to develop a refreshing method of dealing with adversity thrown at me. As these constraints are likely to remain even in the next session, I researched and accidentally stumbled into a new tactic for a different game.
I think that this is useful lesson in real life.
a) Constraints can be a good thing.
High-level TRPGs are slower and less fun than low-level games because players have too many options and there are many ways to reach a resolution in a game session, if you try to optimise too much, the game bogs down. Having a constraints limits you to just a few non-resource-intense options to keep the game fast and refreshing.
Similarly in real life, there is too much obsession with options when sometimes simply constraining some of them may help you make better life decisions. A discussion with a few high gifted but non-noteworthy individuals found that the reason why they have mediocre outcomes in life is because their heads are full of ideas and while executing one good idea, they keep getting interrupted with better ones.
b) Focus needs to be invested well.
The other thing which happened to me this that I spent 36 hours of life watching this really gripping and super-addictive Chinese Wuxia drama called Nirvana in Fire. My friend was raving about it months ago and I ignored it until this drama got mentioned in 1843, the lifestyle magazine of the Economist. Since when does a Chinese drama get mentioned by the super-savvy editors of that magazine ?
The 36 hours one a week took a heavy toll on me, I was planning my talk at the same time and I was unable to really have much time after work. I was shocked that I was so relieved when it was all over. Finally, I can finish up my readings on public international law for my next semester.
Your focus and attention is an important asset class which needs to be invested meticulously.
A little bit of leisure is fine, Game of Thrones Season 6 is just one hour a week for 12 weeks. The opportunity cost is small. 36 hours is about 3 non-fiction books for me.
While we are in the topic of time, focus and attention as an investible asset, some research from the University of Chicago, has raised some disturbing findings on the use of time. When investigating unemployed males with non-degree qualifications, something which I think Singapore policymakers should be more obsessed about, it was discovered that they engaged in 12 - 30 hours of computer game-play and scored high in contentment and life satisfaction. It was the married individuals in this demographic which expressed the most dissatisfaction with life.
This can potentially lead to perhaps one of the most controversial lifestyle advice for Singaporean males who lack a degree qualification and are concerned about future prospects :
Get used to staying single and play computer games, if you lose your job, you will still have a relatively high satisfaction with your lifestyle. The road to unhappiness lies with getting married.
Can't imagine any government being happy with advice given out like this.
Thursday, July 14, 2016
My talk on Funding your child's University Education at the Lifelong Learning Library.
It's been a tiring day !
Today's event attendance was great and I noticed that some folks are far too young to actually be parents but I think we had a very fruitful session exchanging ideas with each other.
When I started planning the presentation months ago I wanted to spread an unconventional message on the how to determine the value of a paper qualification along with the ways and means to come up with the financial resources to pay for one. One key objective would be to shed light on private university degrees and try to explain why salaries of these graduates are low compared to local degree holders.
Along the way, I was able to blend in some ideas from economists along with some statistics to get parents to start thinking about the opportunity costs of paying such a large amount of money to tuition teachers and enrichment seminars and think about how large this money stash can get if it was invested in the stock market instead. This forms the heart of my dangerous idea : Money paid to tutors and enrichment schools could have been used to pay off dividends starting from the day your child graduates from a polytechnic.
I had expected the audience to be hostile and to give me a hard time, but everyone was agreeable and gracious today.
Thank you for your attendance.
A copy of the slides can be downloaded from the link below :
Link to the PDF.
I hope to get more speaking gigs into the future. This is akin to getting Toastmasters training without paying for membership dues.
I am interested in doing some research and talking about how couples should manage their finances together. If you have a venue and want a free speaker, do let me know on this blog.
Today's event attendance was great and I noticed that some folks are far too young to actually be parents but I think we had a very fruitful session exchanging ideas with each other.
When I started planning the presentation months ago I wanted to spread an unconventional message on the how to determine the value of a paper qualification along with the ways and means to come up with the financial resources to pay for one. One key objective would be to shed light on private university degrees and try to explain why salaries of these graduates are low compared to local degree holders.
Along the way, I was able to blend in some ideas from economists along with some statistics to get parents to start thinking about the opportunity costs of paying such a large amount of money to tuition teachers and enrichment seminars and think about how large this money stash can get if it was invested in the stock market instead. This forms the heart of my dangerous idea : Money paid to tutors and enrichment schools could have been used to pay off dividends starting from the day your child graduates from a polytechnic.
I had expected the audience to be hostile and to give me a hard time, but everyone was agreeable and gracious today.
Thank you for your attendance.
A copy of the slides can be downloaded from the link below :
Link to the PDF.
I hope to get more speaking gigs into the future. This is akin to getting Toastmasters training without paying for membership dues.
I am interested in doing some research and talking about how couples should manage their finances together. If you have a venue and want a free speaker, do let me know on this blog.
Wednesday, July 13, 2016
Don't forget my talk on funding your child's university education tomorrow !!!
One of my concerns is that no one will attend my talk tomorrow as it is a weekday afternoon after all so here's another reminder :
The time would be from 12.30pm - 1.30pm.
The venue is as follows :
The LLiBrary
Lifelong Learning Institute
11 Eunos Road 8
#03–02 (via Lobby B)
Singapore 408601
For tomorrow's talk, I would like it to be as refreshing, politically incorrect and lively as the articles on this blog and have planned something which probably was never presented to parents before. We will be talking informally about the relatively low salaries of private university graduates, apprenticeship schemes and MOOCs.
I've planned at least one controversial discussion on private university education and would like to invite guests to consider whether it would be better invest the private tuition fees into the stock markets instead.
Hope to catch you guys there !
The time would be from 12.30pm - 1.30pm.
The venue is as follows :
The LLiBrary
Lifelong Learning Institute
11 Eunos Road 8
#03–02 (via Lobby B)
Singapore 408601
For tomorrow's talk, I would like it to be as refreshing, politically incorrect and lively as the articles on this blog and have planned something which probably was never presented to parents before. We will be talking informally about the relatively low salaries of private university graduates, apprenticeship schemes and MOOCs.
I've planned at least one controversial discussion on private university education and would like to invite guests to consider whether it would be better invest the private tuition fees into the stock markets instead.
Hope to catch you guys there !
Sunday, July 10, 2016
World War III : CPF Edition
Today's article is a little incoherent.
I was ill throughout the weekend and wanted to share some insights into the most divisive issue between financial bloggers, which is the tension between transferring CPF into the CPF-SA versus keeping the funds within CPF-OA and investing part of it into the stock market.
Unfortunately I was unable to really come up with a simple illustration which can adequately explains why bloggers disagree on this issue. The best thing I can say is that if you support the transfer into CPF-SA, you would fall into the left triangle in the diagram shown above. If you support the CPF-IS route, then you would fall into the right triangle. Depending on how you internally view the efficient frontier represented by the curve I drew, one triangle may be bigger than another which can lead to a contention between experts because we all hold different views on what the market is like in our heads.
This is why I suggest throwing away financial knowledge and ask ourselves whether we like the idea of eating the government, or we prefer to eat the financial markets. I would not think that one answer is better than the other.
I would just to address one point raised by the CPF-IS camp about whether they are confident of markets returning 8% every year on average in Singapore.
This is also an area of contention.
If you look at the historical returns of equity an asset class, it does indeed have a record of giving out 8-9% with a standard deviation of 20%. However, market growth will always be function of GDP growth and we are looking at a pretty slow rate of growth in Singapore moving forward for the next decade. If we apply the rule of thumb suggested by Nate Silver in the book The Signal and the Noise, a more conservative picture emerges as he suggests that market growth will taper to GDP + 2%. This means that going forward, even a 6% return for owning equities would be considered optimistic in Singapore.
But I do know that I do not belong to either camp.
I transferred my CPF-OA to CPF-SA and maxed it out early in my life before I even started studying the financial markets. Subsequently, I was able to buy my EC with both me and my wife's CPF and even have invested substantially in CPF-IS. My reserves in CPF-OA can still last me another 4 years before I need to top up my OA with my dividends.
Tuesday, July 05, 2016
Jiak Cheng Hu - Manage your CPF by "Eating the Government"
The CPF board invited some financial bloggers to have a session and I was able to gate-crash the event because a few "more prominent" bloggers were not able to show up for the event. As it turns out, the event was informative and it was a great learning experience for all of us. I felt that the CPF folks very very candid and gave us a realistic picture on how the program is viewed by the general public.
In this article, I would like to put my own spin into the CPF and show that there is definitely room for more improvement.
Firstly, people need to understand that the CPF program would always attract more negativity than positivity. Any program which forces a citizen to set aside money for retirement and housing is not going to be welcome by the people who think that they have the right to spend their own hard-earned money.
Secondly, the CPF program does not really know what is it's true mission should be. On one hand, it is supposed to be retirement fund. On the other hand, it is also money set aside for housing and medical expenses. These two objectives are often at cross-purposes with each other. For example, A HDB loan mandates that the borrower exhaust his entire OA account so as to minimize its size.
I don't believe that the CPF is created for retirement planning or home ownership.
To me, the CPF program is a program to hold every citizen's money on ransom such that when they screw up their own lives, they have to dig into their own financial resources to pay for medical and home ownership expenses rather than dig into the money the government needs to run its daily businesses and maintain our infrastructure. CPF is, thus, protection money.
Protection money meant to protect the more responsible citizens from the less responsible ones.
A lack of clarity as to the CPF's role prevents financial bloggers from being able to agree with each on how to manage CPF funds and to what extent should it be employed for buying housing.
So instead of prescribing what is the right way to manage your CPF, I will share a philosophy which in my opinion, would be a better guiding principle on retirement planning.
I call this the "Eat the Government" philosophy. ( Jiak Cheng Hu in Hokkien )
When you decide to "Eat the Government", your objective is not to maximise your utility when it comes to social security but to extract the largest amount of funds from the Government without regard for your personal consequences.
This means three things :
(a) Extracting the largest returns from the government as much as possible before reaching 55.
(b) Trying to get the most money out of the CPF when you reach 55 years of age.
(c) Maximising the amount your children will get from the CPF Board after you die.
Applying this philosophy will result in three moves :
a) Transfer as much of your OA to your SA as possible.
Getting 4% risk-free is quite amazing. Personally, I think it's better than getting 8% from equity if your horizon is longer than 20 years.
The government pays 2.5% for the CPF-OA risk-free. Transferring the funds to CPF-SA gives you 4% but limits your flexibility as funds can no longer be used for housing. If you "Eat the Government", then you should maximise your transfer to SA so as to extract 4% from the government as much as possible.
I was able to max out my CPF-SA before I hit 32 years of age. This exacts a heavy toll on the CPF board who has to pay me $4,000 - $8,000 into my SA every year since my early thirties.
b) Invest your full 35% of CPF-OA
This is less intuitive.
When you invest 35% your CPF-OA, the government is not giving you interest on that money you pump into the stock-markets so, on first inspection, it goes against the idea of "Eat the Government". But investing your money into REITs and high yielding counters can yield over 6% which then flows back into the OA account allowing it to grow at a faster clip. In my case, I have already maxed out my CPF-SA, so I put in the remaining 35% of the CPF-OA into a portfolio which returns about 5-6% dividends. It allows me to grow the CPF faster and "Eat the government" by moving those funds out of reach of their investment managers and directly into investments of my choice.
[ One alternative school of thought is to keep the funds in OA and invest 35% of it into the markets rather than move it to SA. But I am biased towards SA as it is a guaranteed 4%. ]
c) Choose the Basic Plan instead of the Standard Plan for CPF Life.
If you know that you will die early, always opt for the Basic plan. If you will live to ripe old age of 120, then the Standard plan would be more worthwhile. But, unfortunately, we do not have an idea how long we will live.
If you are single and have no kids, the Standard Plan works because you will have no need for your money after you die. However, if you have kids and do not absolutely hate them, the Basic plan provides a smaller pay-out but leaves behind a larger residue after you pass on leaving more money for your children. So while you do not get to Eat the Government, you children would.
[ Note : I expect the actuaries who designed CPF Life would reduce the longevity risk transferred per unit price of the annuity to earn CPF Board reasonable profits, so you should always be mathematically well-off when you reduce your exposure to these annuities instruments.
Put another way, if you adopt the Standard plan, you may need to live significantly beyond the average life expectancy to break even against the Basic Plan.
Do note that this is my own speculation and I welcome officials to disprove my hypothesis. ]
In summary, in spite of its schizophrenic nature, the CPF programme is still fundamentally a good thing because it prevents Singaporeans from hurting ourselves. However, as it stands, simple questions like whether CPF should be used for housing will not achieve any consensus even amongst financial experts who may be evenly divided as to whether the CPF is meant for retirement or housing.
Perhaps a better approach is to design a series of moves as part of deeper personal philosophy, acknowledge your personal biases, and then stick to the plan as part of your lifestyle design.
In this article, I would like to put my own spin into the CPF and show that there is definitely room for more improvement.
Firstly, people need to understand that the CPF program would always attract more negativity than positivity. Any program which forces a citizen to set aside money for retirement and housing is not going to be welcome by the people who think that they have the right to spend their own hard-earned money.
Secondly, the CPF program does not really know what is it's true mission should be. On one hand, it is supposed to be retirement fund. On the other hand, it is also money set aside for housing and medical expenses. These two objectives are often at cross-purposes with each other. For example, A HDB loan mandates that the borrower exhaust his entire OA account so as to minimize its size.
I don't believe that the CPF is created for retirement planning or home ownership.
To me, the CPF program is a program to hold every citizen's money on ransom such that when they screw up their own lives, they have to dig into their own financial resources to pay for medical and home ownership expenses rather than dig into the money the government needs to run its daily businesses and maintain our infrastructure. CPF is, thus, protection money.
Protection money meant to protect the more responsible citizens from the less responsible ones.
A lack of clarity as to the CPF's role prevents financial bloggers from being able to agree with each on how to manage CPF funds and to what extent should it be employed for buying housing.
So instead of prescribing what is the right way to manage your CPF, I will share a philosophy which in my opinion, would be a better guiding principle on retirement planning.
I call this the "Eat the Government" philosophy. ( Jiak Cheng Hu in Hokkien )
When you decide to "Eat the Government", your objective is not to maximise your utility when it comes to social security but to extract the largest amount of funds from the Government without regard for your personal consequences.
This means three things :
(a) Extracting the largest returns from the government as much as possible before reaching 55.
(b) Trying to get the most money out of the CPF when you reach 55 years of age.
(c) Maximising the amount your children will get from the CPF Board after you die.
Applying this philosophy will result in three moves :
a) Transfer as much of your OA to your SA as possible.
Getting 4% risk-free is quite amazing. Personally, I think it's better than getting 8% from equity if your horizon is longer than 20 years.
The government pays 2.5% for the CPF-OA risk-free. Transferring the funds to CPF-SA gives you 4% but limits your flexibility as funds can no longer be used for housing. If you "Eat the Government", then you should maximise your transfer to SA so as to extract 4% from the government as much as possible.
I was able to max out my CPF-SA before I hit 32 years of age. This exacts a heavy toll on the CPF board who has to pay me $4,000 - $8,000 into my SA every year since my early thirties.
b) Invest your full 35% of CPF-OA
This is less intuitive.
When you invest 35% your CPF-OA, the government is not giving you interest on that money you pump into the stock-markets so, on first inspection, it goes against the idea of "Eat the Government". But investing your money into REITs and high yielding counters can yield over 6% which then flows back into the OA account allowing it to grow at a faster clip. In my case, I have already maxed out my CPF-SA, so I put in the remaining 35% of the CPF-OA into a portfolio which returns about 5-6% dividends. It allows me to grow the CPF faster and "Eat the government" by moving those funds out of reach of their investment managers and directly into investments of my choice.
[ One alternative school of thought is to keep the funds in OA and invest 35% of it into the markets rather than move it to SA. But I am biased towards SA as it is a guaranteed 4%. ]
c) Choose the Basic Plan instead of the Standard Plan for CPF Life.
If you know that you will die early, always opt for the Basic plan. If you will live to ripe old age of 120, then the Standard plan would be more worthwhile. But, unfortunately, we do not have an idea how long we will live.
If you are single and have no kids, the Standard Plan works because you will have no need for your money after you die. However, if you have kids and do not absolutely hate them, the Basic plan provides a smaller pay-out but leaves behind a larger residue after you pass on leaving more money for your children. So while you do not get to Eat the Government, you children would.
[ Note : I expect the actuaries who designed CPF Life would reduce the longevity risk transferred per unit price of the annuity to earn CPF Board reasonable profits, so you should always be mathematically well-off when you reduce your exposure to these annuities instruments.
Put another way, if you adopt the Standard plan, you may need to live significantly beyond the average life expectancy to break even against the Basic Plan.
Do note that this is my own speculation and I welcome officials to disprove my hypothesis. ]
In summary, in spite of its schizophrenic nature, the CPF programme is still fundamentally a good thing because it prevents Singaporeans from hurting ourselves. However, as it stands, simple questions like whether CPF should be used for housing will not achieve any consensus even amongst financial experts who may be evenly divided as to whether the CPF is meant for retirement or housing.
Perhaps a better approach is to design a series of moves as part of deeper personal philosophy, acknowledge your personal biases, and then stick to the plan as part of your lifestyle design.
Friday, July 01, 2016
The Nature of Success
One challenge of modern living is that we do not really know for sure
whether we have really succeeded in life. To many people, this is a difficult
philosophical question with no concrete answer.
The Happiness
Equation: Want Nothing + Do Anything = Have Everything by Neil
Pasricha offered a pretty novel model of success which I have attempted to
extend in this article.
Neil proposes three dimensions of success in his book :
a) Measurable success
One dimension of success is that it has to be measurable. Accumulating
$1,000,000 is measurable. So is making partner in a consulting firm. Measurable
success has a certain degree of visibility and is, generally, what modern
societies like Singapore cherish the most.
b) Social success
The second dimension of success is social in nature. It means that
people respect you because of certain deeds you performed. If friends and
acquaintances consider you a successful person, you would have attained this
dimension of success.
c) Private success
The last dimension of success is personal in nature. This means a degree
of personal satisfaction and self-respect. You have private success if you feel
that you have succeeded internally.
The book proposes that it is often very rare to succeed in all three
dimensions, more often you can, at best, attain 2 out of 3 dimensions of
success.
I took the liberty of extending the model to consider what happens when
one dimension is absent.
a) Absence of private success - The
Super Manager
The successful executive or manager embodies the lack of private success.
You have measurable results and the admiration of others but you are constantly
trying to do better and end up living an anxious and neurotic lifestyle.
b) Absence of measurable success - The
Hipster
Someone who creates a critically acclaimed piece of art is said to lack
measurable success. Your peers and critics laud your creation and you have an
internal feeling of satisfaction for creating this work but the art-work may
not result in a measurable pay-off and does not result in tangible benefits for
society.
c) Absence of social success - The
Rentier
The greatest insight for me is that rentiers or financially independent
folks who do not do useful work are deemed not to be respectable by their peers
and thus lack social success.
It answers a nagging problem I have when I spoke to some younger female
SMU classmates and half-jokingly asked whether they would marry a guy who have
have a cash stream but does not seem to do anything useful as part of work. I
was very surprised at such a huge negative reaction even though I
disclaimed that such a person will not be a financial burden to them.
They overwhelmingly preferred the guy to have some respectable job. ( Maybe
even transfer the financial independence to them so they can become tai-tais ! )
While this model is more philosophical than empirical, one possible
insight we can learn from this model is that we can try to experience different
kinds of success throughout our lives.
At some stage of our life, we can be a busy executive and throw
ourselves into the rat-race. At some other stage of our life, we can try to
produce a great work of art/software/product and make a positive qualitative
difference to the world. And finally, we can also experience what it's also
like to be financially independent and use the numbers to sustain ourselves to
our personal satisfaction.
It's OK to be limited to two dimensions of success at any point of
time.
There exists an opportunity to be successful in different ways
throughout our lives.
Saturday, June 25, 2016
It's all about your kukujiao !
The title of this post is inspired by a recent programme in Channel New Asia, after all if your kukujiao (penis ) is talked about in mainstream media, readers will have no problem accepting this in financial blogs.
The largest thing going on in people's minds is Brexit. What it would mean for financial markets and how you should position your portfolio moving forward ? Unfortunately, even experts are lost as to what to do about this situation. For me, the only clear signal would be to convert some cash into English pounds and try to spend your Chistmas in London. Alternatively, if you have been hoarding gold all these years, selling some of that to pay for that trip to London might not be a bad idea.
But the most important lesson from Brexit is that everything happening around the world is about your kukujiao.
What has Rody Duterte, the rise of Trump and Brexit have in common ?
In my opinion, the rise of macho right-wing politics around the world is largely a reaction against devaluation of the male gender role that has been happening for the past 20 years. All of these camps channel a certain male machismo and generally very attractive to working class males.
I was having breakfast with my friend who I deemed relatively successful in life because he has a happy family and is gainfully employed in a steady iron-rice bowl job. Even he laments that one generation ago, the salary of a male Singaporean is enough to sustain one entire family on its own.
These days we have two-income families and in places like the US and the UK, boys are losing out to girls in their universities. Worse, progressive forces continue to downplay the value of men in the mass media and are pushing for alternative models of what a family is like, applying labels like "White Male Privilege" to open up jobs in places like Silicon Valley. If we push this to its logical conclusion, Western countries will have a population of angry males who are unable to catch up socially and economically to women.
Changes in gender roles, family structures and the economy is happening too fast for men. Once men are denied sexual access and a means of economic survival, it is no surprise that they will do anything to disrupt the social order.
Hence Brexit, Duterte, Putin's popularity and very possibly the election of Trump as US President.
Singapore is in a relatively good spot from the rest of the world.
Singapore still needs men in NS and we do get 10 years of useful male networking when we go back for reservist training. Singaporean males also receive possibly one of the best education systems in the world so very small gap exists between boys and girls in academic performance. The Singapore government is also slow to adjust the traditional family structure here and only recently started to slowly prod Singaporean men into redefining themselves - this is something which cannot happen overnight.
In summary, in almost all societies, what is still currently in place is a Patriarchy which is mostly led by a male of a majority ethnic group. Progressive forces, for reasons of morality and egalitarianism, have tried to topple this power but may have succeeded too quickly when Barack Obama was elected. The result is a backlash where mostly poorly educated males of the majority ethnic group would decide to vote any irrational government to preserve the social structure.
It is all about your kukijiao.
Next time you look for your answers, look between your legs
[ At least for my readership whch is 75% male ]
The largest thing going on in people's minds is Brexit. What it would mean for financial markets and how you should position your portfolio moving forward ? Unfortunately, even experts are lost as to what to do about this situation. For me, the only clear signal would be to convert some cash into English pounds and try to spend your Chistmas in London. Alternatively, if you have been hoarding gold all these years, selling some of that to pay for that trip to London might not be a bad idea.
But the most important lesson from Brexit is that everything happening around the world is about your kukujiao.
What has Rody Duterte, the rise of Trump and Brexit have in common ?
In my opinion, the rise of macho right-wing politics around the world is largely a reaction against devaluation of the male gender role that has been happening for the past 20 years. All of these camps channel a certain male machismo and generally very attractive to working class males.
I was having breakfast with my friend who I deemed relatively successful in life because he has a happy family and is gainfully employed in a steady iron-rice bowl job. Even he laments that one generation ago, the salary of a male Singaporean is enough to sustain one entire family on its own.
These days we have two-income families and in places like the US and the UK, boys are losing out to girls in their universities. Worse, progressive forces continue to downplay the value of men in the mass media and are pushing for alternative models of what a family is like, applying labels like "White Male Privilege" to open up jobs in places like Silicon Valley. If we push this to its logical conclusion, Western countries will have a population of angry males who are unable to catch up socially and economically to women.
Changes in gender roles, family structures and the economy is happening too fast for men. Once men are denied sexual access and a means of economic survival, it is no surprise that they will do anything to disrupt the social order.
Hence Brexit, Duterte, Putin's popularity and very possibly the election of Trump as US President.
Singapore is in a relatively good spot from the rest of the world.
Singapore still needs men in NS and we do get 10 years of useful male networking when we go back for reservist training. Singaporean males also receive possibly one of the best education systems in the world so very small gap exists between boys and girls in academic performance. The Singapore government is also slow to adjust the traditional family structure here and only recently started to slowly prod Singaporean men into redefining themselves - this is something which cannot happen overnight.
In summary, in almost all societies, what is still currently in place is a Patriarchy which is mostly led by a male of a majority ethnic group. Progressive forces, for reasons of morality and egalitarianism, have tried to topple this power but may have succeeded too quickly when Barack Obama was elected. The result is a backlash where mostly poorly educated males of the majority ethnic group would decide to vote any irrational government to preserve the social structure.
It is all about your kukijiao.
Next time you look for your answers, look between your legs
[ At least for my readership whch is 75% male ]
Wednesday, June 22, 2016
My next talk !!!
Looks like the good folks of NLB and WDA have already prepared the EDM for my next talk.
Tuesday, June 21, 2016
Debunking the arguments for Integrated Shield Plans.
Due to a combination of government policy-making and the marketing propaganda being spread by insurance companies, the selling of Integrated Shield Plan (ISPs) have become almost as easy as taking a lollipop away from a child.
For most people, ISPs are a no brainer. The most convincing argument to purchase a ISP is that the deduction of premiums come from the Medisave account so no cash outlay is required. This is a very difficult argument to debunk because Singaporeans have come to believe that Medisave money is not your money and you are better off using it up because it will have no impact to your personal finances.
I did some research by looking at sales brochures of some insurance firms and would like to convince the reader that the basic arguments to buy ISPs is probably unethical and it may even raise legal questions as to whether some sort of misrepresentation may even be taking place when a sale is being made ( Although the only way to confirm this is for a victim to take civil action ).
Here are some points for your consideration:
a) You are already covered by Medishield, do you really need to go beyond that ?
The most important point about ISPs is that you are buying a better ward when you get hospitalised. You need to really ask yourself whether you really need to stay in a Class A ward when you fall sick. This points to the fundamental idea that insurance is about risk transfer. You already have a means of risk transfer via Medishield, do you need to transfer the incremental risk of expensive Class A medical support ?
All Singapore citizens are being covered by Medishield which provides reasonably generous subsidies for hospital stay for class C and B2 wards. When you buy an ISP, you are typically being made to buy insurance for a stay in better wards.
At least for the brochure I examined, the examples of medical costs incurred employ Class A as an illustration which has the tendency to make the medical expenses quite frightening. Your task when looking at this example is to ask your financial adviser to make the same illustration for a class C or B2 ward before you conclude that medical costs are cripplingly expensive in Singapore.
b) Your Medisave account does not contain funny money which is out of your reach and belongs to the PAP.
You know something is wrong with an industry when some agents try to perpetuate the myth that CPF money is government money and not your money.
If they do so they are wrong. Your Medisave is money which belongs to you.
The problem is that you need to understand how CPF-MA flows into CPF-SA which flows into your hands after age 55.
When your CPF Medisave Account (CPF-MA) exceeds the contribution ceiling of $48,500 $49,800, the excess flows into your CPF-SA. This is vitally important because after age 55, you are allowed to withdraw your CPF-OA and CPF-SA if it exceeds the minimum sum of around $161k. More if you pledge the value of your HDB flat to CPF.
What this means is that if you manage your Medisave frugally and spend on only what you need,you can have a larger pot of cash in your hands when you reach 55 years of age.
c) ISP premiums may cost 150% to 200% of your Medisave premiums but it will not seem that way when the sale is made.
Another bugbear of mine is that at least in the illustration shown on some sales brochures, you might observe that the Medisave premiums are only illustrated to be only 10-20% higher than your ISP premiums.
This is due to the practice of the government giving Medishield subsidies based on your economic status. For example, at 41 years of age, my Medishield premium is officially $435. But the government subsidizes part of it, even if I am of a highest income bracket, I only pay $242 a year from my Medisave account.
At least one company I observed puts the pre-subsidy $435 side-by-side with their premium costs to trick the customer into thinking that the difference is not particularly large, when it should be $242 which should be compared against.
To figure this out, the customer must be sharp enough to ask whether the current Medishield premiums incorporate government subsidies.
We know that most ordinary folks would not do that.
d) When you get an ISP, you will literally pay the piper after age 50.
The most damning feature of some ISPs I observed is that, unlike Medishield, you start to incur a cash outlay after you reach 50 or 60 years of age. Based on that sales brochure, this cash outlay can escalate very quickly. Based on the lifespan of a Singaporean male, at age 83, you could be looking at an outlay of $1,000 to $4,000 a year. This effectively exacerbates the longevity risk you face and your monthly payouts from CPF Life may be required to pay off these premiums.
By the time you reach that age, your agent may be long retired or may even have died, you will be shouldering an additional financial burden to maintain your ISP.
In summary, we should start thinking twice about government initiatives which increases the number of accounts which we have. Specifically cordoning money into Medisave will incentivise the private sector to exploit your inherent bias for mental accounting. Parents who invest in a large Child Development Account also tend to spend freely on specialist pediatricians because the medical fees are debited from a separate pool of money designated for childcare. This makes citizens dangerously lazy about their finances.
We are entering a new age with separate spending accounts for keeping fit and getting extra training.
We should always be mindful that these accounts function as some sort of a subsidy for specific industries which are smart enough to exploit our psychological biases.
Sunday, June 19, 2016
What to think about when thinking about Billionaires.
In Singapore, the fastest and most convenient way to one-up a millionaire when you are not even one is to cite a billionaire.
A common thing to hear about these days is Jack Ma telling his son that he does not need to be a top student to succeed in life. What Jack Ma meant was that if your dad is Jack Ma, you probably will not need to top your classes.
The problem is that most of us are not fortunate enough to be Jack Ma's son.
The bigger problem is that that ordinary people do not study billionaires as a discipline.
( You may also want to read about a previous blog article I wrote about advice from Richard Li. )
So up till today, my job is half done. While I managed to establish the ridiculousness of spouting the pithy wisdom of billionaires, I was unable to come up with a better alternative that would allow us ordinary mortals to think about billionaires in an intelligent way. Fortunately, Sam Wilkins wrote a book called Wealth Secrets : How the Rich got Rich which contained a lot of historical snippets on how Billionaires made their money.
Here are some pointers on how to think about Billionaires :
a) Instead of spouting what a billionaire says, focus on what he did.
Billionaires obviously need society to accept him as he is. In such a case, it is only natural to highlight their struggles and how poor they started out. The magic is to dig into what was actually done by the business to get this far.
The problem is that this step is not enough. A lot of Singaporeans like to remind others that Bill Gates and Mark Zuckerberg dropped out of Ivy League universities. If that were a secret that a lot more drop-outs woulds be billionaires.
b) Focus on government-business interfaces.
Once you get into the rabbit hole trying to figure out how billions are being made by some very special people, having accounting expertise is not enough. Typically, billionaires will be able to sustain huge profit margins and ROIC of 30% or more for over a decade to get where they are today. This is virtually impossible in Singapore because our government will slap you with competition law provisions before you can get too far.
The first place to scrutinise is the billionaire's relationship with the governments of the day. The Ambani dynasty of Reliance in India thrived because they knew how to deal with the License raj and was able to hold onto licenses which permitted them to manufacture polyester decades ago.
c) Think about economics : Natural monopolies, economies of scale and network effects.
Billionaires became that way because they found ways of establishing natural monopolies. This was how robber barons like Rockefeller got rich. He bought rival oil companies and to gain economies of scale and then colluded with railroads to eliminate the competition. Warren Buffet was special because he did not exploit these economic ideas directly but invested in companies that did.
Economics focuses on these powerful ways of making money and it normally focuses on putting yourself in a position to have no competition.
d) Think about the law of property or intellectual property.
Another aspect of becoming wealthy is by manipulating the legal landscape of your respective country. Riches are normally made due to some lack of clarity in property or intellectual property law.
It is a mistake to think that Bill Gates was a technological visionary who dropped out of Harvard University to code software - I hope engineers can think about this and not make mistakes like this any further.
Microsoft sustained huge profit margins because MS-DOS was written at a time when the US courts was still unsure of whether software can be copyrighted and Bill Gates had a lawyer dad who was able to help his son shape the contracts which license his software out to users. A large bulk of MSFT's success was learning how to enforce their IP rights.
( Yes ! It blew my mind when I read about this. )
There are certainly more way to think about making money in the billions but most of us are still stuck at the level of thinking about leverage, motivation, using other people's money and dropping out of school. While my current framework is not perfect, it is definitely better than what folks currently have.
Before I end, I'd just like to share what Sam Wilkins said anecdotally based on his research on billionaires :
a) Billionaires are almost exclusively numbers people with an odd fascination for mathematics, which led me wondering whether Singapore's policy educational policy on mathematics is the reason why the concentration of millionaires is so high here.
b) Billionaires seldom see money as a means to get something to be enjoyed, they see wealth accumulation as a game for its own ends.
c) Billionaires are brutal and always had a history of getting rid of their business partners once the business begins to prosper.
Maybe before someone would start throwing off micro-aggressions in the name of Jack Ma or Richard Li, you might to ask yourself whether you have these traits before you spout your mouth off.
A common thing to hear about these days is Jack Ma telling his son that he does not need to be a top student to succeed in life. What Jack Ma meant was that if your dad is Jack Ma, you probably will not need to top your classes.
The problem is that most of us are not fortunate enough to be Jack Ma's son.
The bigger problem is that that ordinary people do not study billionaires as a discipline.
( You may also want to read about a previous blog article I wrote about advice from Richard Li. )
So up till today, my job is half done. While I managed to establish the ridiculousness of spouting the pithy wisdom of billionaires, I was unable to come up with a better alternative that would allow us ordinary mortals to think about billionaires in an intelligent way. Fortunately, Sam Wilkins wrote a book called Wealth Secrets : How the Rich got Rich which contained a lot of historical snippets on how Billionaires made their money.
Here are some pointers on how to think about Billionaires :
a) Instead of spouting what a billionaire says, focus on what he did.
Billionaires obviously need society to accept him as he is. In such a case, it is only natural to highlight their struggles and how poor they started out. The magic is to dig into what was actually done by the business to get this far.
The problem is that this step is not enough. A lot of Singaporeans like to remind others that Bill Gates and Mark Zuckerberg dropped out of Ivy League universities. If that were a secret that a lot more drop-outs woulds be billionaires.
b) Focus on government-business interfaces.
Once you get into the rabbit hole trying to figure out how billions are being made by some very special people, having accounting expertise is not enough. Typically, billionaires will be able to sustain huge profit margins and ROIC of 30% or more for over a decade to get where they are today. This is virtually impossible in Singapore because our government will slap you with competition law provisions before you can get too far.
The first place to scrutinise is the billionaire's relationship with the governments of the day. The Ambani dynasty of Reliance in India thrived because they knew how to deal with the License raj and was able to hold onto licenses which permitted them to manufacture polyester decades ago.
c) Think about economics : Natural monopolies, economies of scale and network effects.
Billionaires became that way because they found ways of establishing natural monopolies. This was how robber barons like Rockefeller got rich. He bought rival oil companies and to gain economies of scale and then colluded with railroads to eliminate the competition. Warren Buffet was special because he did not exploit these economic ideas directly but invested in companies that did.
Economics focuses on these powerful ways of making money and it normally focuses on putting yourself in a position to have no competition.
d) Think about the law of property or intellectual property.
Another aspect of becoming wealthy is by manipulating the legal landscape of your respective country. Riches are normally made due to some lack of clarity in property or intellectual property law.
It is a mistake to think that Bill Gates was a technological visionary who dropped out of Harvard University to code software - I hope engineers can think about this and not make mistakes like this any further.
Microsoft sustained huge profit margins because MS-DOS was written at a time when the US courts was still unsure of whether software can be copyrighted and Bill Gates had a lawyer dad who was able to help his son shape the contracts which license his software out to users. A large bulk of MSFT's success was learning how to enforce their IP rights.
( Yes ! It blew my mind when I read about this. )
There are certainly more way to think about making money in the billions but most of us are still stuck at the level of thinking about leverage, motivation, using other people's money and dropping out of school. While my current framework is not perfect, it is definitely better than what folks currently have.
Before I end, I'd just like to share what Sam Wilkins said anecdotally based on his research on billionaires :
a) Billionaires are almost exclusively numbers people with an odd fascination for mathematics, which led me wondering whether Singapore's policy educational policy on mathematics is the reason why the concentration of millionaires is so high here.
b) Billionaires seldom see money as a means to get something to be enjoyed, they see wealth accumulation as a game for its own ends.
c) Billionaires are brutal and always had a history of getting rid of their business partners once the business begins to prosper.
Maybe before someone would start throwing off micro-aggressions in the name of Jack Ma or Richard Li, you might to ask yourself whether you have these traits before you spout your mouth off.
Wednesday, June 15, 2016
How to lead a life without a Financial Advisor.
It has been a relatively tough week for me this week because I have just started my internship. I have to acclimatise myself again to a 6-hour sleep cycle. One perk of being a student was that I get plenty of sleep although the readings takes up almost all of your waking hours.
I'm going to go light on myself this week. I just want to build up on Budget Babe's post that a lifestyle blogger has complained about the substandard advice she has gotten from an insurance agent.
I never had a financial advisor. Generally, I'm not a very big fan of commissioned based advice because I can read and pick things up on my own. There are too many bullshit bingo advisors on financial and health matters. If you do not want to receive bullshit dieting advice from an overweight trainer, you should never get help from a financial advisor who needs to make a sale to earn a living.
Not listening to an advisor is, by itself, a cheap form of insurance - I insure myself from crappy financial advice. As a result - I gained the ability to live on my investments decades earlier than many of my peers.
Here are some pointers on how to get that financial advisor out of your life forever :
a) You will need to spend more time thinking about insurance when you do not have a financial advisor.
At a bare minimum, you need to think about three components of risk transfer if you refuse to have an advisor : Mortality risk, Longevity Risk and Hospitalisation risk.
For mortality risk, I have an upsized SAF Group Life insurance from AVIVA which insures me for $1,000,000. I bought this during my NS days and it costs be $120 a month. This month I am expecting $500 of rebates from them, so on most years, I pay slightly less than $1,000 of premiums. Try finding a whole life plan that can do that.
For longevity risk, I have a maxed out CPF-SA account which, as of now, is still higher than the CPF minimum sum. At age 68, CPF board will give me a decent income for life via CPF Life which can potentially supplement my income at old age. This covers the scenario of me living too long. In the US, this is an product sold by an insurance firm called an annuity.
For hospitalisation risk, I have Medishield. Everyone needs to know that all Singaporeans have a decent Medishield plan which works provided that you stick with a Class B2 ward. The insurance industry spreads a lot of fear constructing scary scenarios on what expenses you would incur if you get an illness like cancer. Examine them closer and you will find that most of such examples assumes a stay in the Class A wards which denies you access to government subsidies. I have yet to meet an agent who can explain to me what benefits their H&S plan has over Medishield if I stay in a Class B2 ward and show me a comparison for insurance premiums escalation after 40 years of age.
b) You must save much more if you wish to fire your financial advisor.
The lynch-pin to living life without a financial advisor is that you need to save and invest aggressively. I don't want to repeat myself here again but a cash-flow from a income portfolio will insure against everything else.
Here are some risks which no insurance agent can transfer away :
Maybe you want to go to a spa after weeks of exam preparation. Your portfolio insures you from post-exam stress.
Maybe your wife wants an expensive watch. Your portfolio insures you from spousal wrath.
Maybe you want to go to KL to buy Uniqlo T-Shirts at SGD $6.70, your portfolio insures you from paying for that Aeroline trip.
More importantly, my portfolio pays me every quarter. Compare that to someone who has a battery of insurance policies. Every year-end these guys have to use their hard earned bonuses to pay off their premiums. What kind of life is that?
c) You need to live conservatively.
Insurance is about risk transfer. If you keep everything to bare minimum and really don't to deal with a dishonest salesman, you are in essence absorbing the risk yourself. You might be vulnerable until your portfolio becomes $300k to $500k in size.
This is the most important lesson. You just cannot afford to be YOLO if you want to deny an insurance company your premiums :
I'm going to go light on myself this week. I just want to build up on Budget Babe's post that a lifestyle blogger has complained about the substandard advice she has gotten from an insurance agent.
I never had a financial advisor. Generally, I'm not a very big fan of commissioned based advice because I can read and pick things up on my own. There are too many bullshit bingo advisors on financial and health matters. If you do not want to receive bullshit dieting advice from an overweight trainer, you should never get help from a financial advisor who needs to make a sale to earn a living.
Not listening to an advisor is, by itself, a cheap form of insurance - I insure myself from crappy financial advice. As a result - I gained the ability to live on my investments decades earlier than many of my peers.
Here are some pointers on how to get that financial advisor out of your life forever :
a) You will need to spend more time thinking about insurance when you do not have a financial advisor.
At a bare minimum, you need to think about three components of risk transfer if you refuse to have an advisor : Mortality risk, Longevity Risk and Hospitalisation risk.
For mortality risk, I have an upsized SAF Group Life insurance from AVIVA which insures me for $1,000,000. I bought this during my NS days and it costs be $120 a month. This month I am expecting $500 of rebates from them, so on most years, I pay slightly less than $1,000 of premiums. Try finding a whole life plan that can do that.
For longevity risk, I have a maxed out CPF-SA account which, as of now, is still higher than the CPF minimum sum. At age 68, CPF board will give me a decent income for life via CPF Life which can potentially supplement my income at old age. This covers the scenario of me living too long. In the US, this is an product sold by an insurance firm called an annuity.
For hospitalisation risk, I have Medishield. Everyone needs to know that all Singaporeans have a decent Medishield plan which works provided that you stick with a Class B2 ward. The insurance industry spreads a lot of fear constructing scary scenarios on what expenses you would incur if you get an illness like cancer. Examine them closer and you will find that most of such examples assumes a stay in the Class A wards which denies you access to government subsidies. I have yet to meet an agent who can explain to me what benefits their H&S plan has over Medishield if I stay in a Class B2 ward and show me a comparison for insurance premiums escalation after 40 years of age.
b) You must save much more if you wish to fire your financial advisor.
The lynch-pin to living life without a financial advisor is that you need to save and invest aggressively. I don't want to repeat myself here again but a cash-flow from a income portfolio will insure against everything else.
Here are some risks which no insurance agent can transfer away :
Maybe you want to go to a spa after weeks of exam preparation. Your portfolio insures you from post-exam stress.
Maybe your wife wants an expensive watch. Your portfolio insures you from spousal wrath.
Maybe you want to go to KL to buy Uniqlo T-Shirts at SGD $6.70, your portfolio insures you from paying for that Aeroline trip.
More importantly, my portfolio pays me every quarter. Compare that to someone who has a battery of insurance policies. Every year-end these guys have to use their hard earned bonuses to pay off their premiums. What kind of life is that?
c) You need to live conservatively.
Insurance is about risk transfer. If you keep everything to bare minimum and really don't to deal with a dishonest salesman, you are in essence absorbing the risk yourself. You might be vulnerable until your portfolio becomes $300k to $500k in size.
This is the most important lesson. You just cannot afford to be YOLO if you want to deny an insurance company your premiums :
- Don't go into dangerous places with dark alleys and end up getting robbed.
- Don't travel without a companion.
- Have a reasonable diet and active lifestyle.
- Cut away smoking and alcohol.
If you have the discipline to consider my alternative plan, the odds will be greatly in your favour.
You are in essence taking the commissions you would have given to the advisor as well as the fund managers and invested it in your own future financial security.
Friday, June 10, 2016
Personal Finance Lessons from eating KL Murtabak
I have just ended my second trip to Malaysia and will embark on my third trip tonight.
Just wanted to share a really delicious picture of KL Lamb Murtabak with all of you readers to remind you that 1 SGD is almost 3 MYR as we speak and going into Malaysia to enjoy some fruits of currency arbitrage might not be a bad idea at this time of the year.
( Just do it with more sensitivity as Malaysians do consider most Singaporeans arrogant and proud. )
But more importantly, if you ever visit Malaysia over the holidays you need to reflect upon the life that you have chosen in Singapore.
Mutton Murtabak in Singapore costs around 7 SGD. It is relatively large compared to the one in Malaysia and is accompanied by cucumber dipped in tomato ketchup. The above murtabak is hardly considered cheap for the locals, it costs about 9 MYR or 3 SGD but the picture speaks for itself. ( My rule of thumb is that Malaysians generally earn the same wages as Singaporeans but denominated in their own currencies. )
With labor and rental costs a fraction of that in Singapore, the Indian Muslim cook in KL can put in a lot of personal love and care into the making of mutton murtabak, You can have a very thin crust that is packed to the brim with mutton and egg ingredients. It's circular shape is also unique and more troublesome to make than the ones you find in Singapore. To me, the most special treat would be the pickled onions, which adds a tangy twist to this traditional Indian meal.
Some of my relatives working in Singapore see our country like a high-pressured sweat shop. They like earning Singapore salaries but see our country as boring and sterile. The moment they earn enough money, they will be heading home. Singapore is a place which lacks emotions and sentimentality ( Unless you are talking about anger which we have in spades. ).
There are now 5,000 Singaporean families who have chosen to live in Johor instead of in Singapore. To me, Malaysia is not an easy place to live in because of security concerns. When I was in KL, I was almost hurt by a yellow zebra crossing because we are cluelessly stupid Singaporeans and have no idea that zebra crossing mean nothing in KL. Funny thing is that no one will get killed because traffic is so slow there. I also personally witnessed a decent hotel at Jalan Ampang with no inclined ramp, and saw a middle-aged man push some goods on a trolley down a flight of stairs. You can only appreciate the care taken by your authorities at home only after you witnessed the system in other parts of the world.
But all-in-all, Malaysia is a relaxing place at the current exchange rate, you can let your hair down, make a few tactical mistakes buying stuff and no one will fault you for it. Someone sold me a decent laptop haversack for $95 MYR and I was too tired of bargaining after a long day of travel. My travel buddy got something with a better design for half my price at this outlet called Yubiso ( Which is an amazing outlet, purportedly Japanese, which seems to me a copy of a copy of an idea which can be found in SG and HK ).
In summary, we can all choose to be global citizens, work and spend at different countries, but we have to be aware of the trade-offs.
Some places are cold, unemotional but the infrastructure works and you can accumulate private property quickly. Other places may be more chaotic and insecure, but some people will prefer its occasional glimpses of humanity in their people.
Take your pick.
Sunday, June 05, 2016
Quick Update on my life.
Just a quick update on my life...
I have spent the past few days trying to arbitrate the the SGDMYR exchange rate...
No lah...
These two weeks are the only two weeks of leisure that I have.
Beginning mid-June, I will start 6 weeks of internships and my semester will open 2 weeks earlier than my peers if I get selected for International Moots.
This means that I may not have a break until December beginning next Monday.
I will be off to KL for the next 3 days and then will enter Malaysia again before the week ends. It's a great time to convert some SGD to MYR to do some shopping.
Hopefully I will have some more insights to share on lifelong learning and the value of a university education. This is a ramp up to my talk in mid-July which is sponsored by WDA on funding a child's university education.
Catch you guys on Friday !
[ I just finished The Three Body Problem by Liu Cixin. Chinese science fiction is mind-blowingly epic and does not really apologise for the amount of physics which goes into fiction. I am mid-way along the second book entitled The Dark Forest. ]
I have spent the past few days trying to arbitrate the the SGDMYR exchange rate...
No lah...
These two weeks are the only two weeks of leisure that I have.
Beginning mid-June, I will start 6 weeks of internships and my semester will open 2 weeks earlier than my peers if I get selected for International Moots.
This means that I may not have a break until December beginning next Monday.
I will be off to KL for the next 3 days and then will enter Malaysia again before the week ends. It's a great time to convert some SGD to MYR to do some shopping.
Hopefully I will have some more insights to share on lifelong learning and the value of a university education. This is a ramp up to my talk in mid-July which is sponsored by WDA on funding a child's university education.
Catch you guys on Friday !
[ I just finished The Three Body Problem by Liu Cixin. Chinese science fiction is mind-blowingly epic and does not really apologise for the amount of physics which goes into fiction. I am mid-way along the second book entitled The Dark Forest. ]
Thursday, June 02, 2016
A different way to think about Lifelong Learning.
Just the other day, I had the privilege of meeting members of the NTUC Social Media team, we had a good, long discussion on the possible issues face by the workforce of the future. NTUC is interested in collaborating with bloggers to come up with content. As I wanted to preserve to my unique voice, I opted to blog for information instead of remuneration. I promised that if any data on the labour movement were shared with me, I would be able come up with some unique insights into work and human capital in Singapore.
This gives me the freedom to be candid with NTUC's initiatives and maintain the critical tone of my blog, which I suspect readers will enjoy more.
So this article came about because of my discussion with NTUC but it was not vetted or paid for by them.
Let's talk about lifelong learning and why we might be going about it the wrong way.
One perspective on adult education comes from a study of evolution. When biologists study species which have a tendency to survive, it is not the strongest but the most adaptive species which go on to reproduce.
If we apply this concept to lifelong learning, there are two kinds of learning - Exploratory learning and Exploitative Learning.
Exploitative learning is what most people think about when they think about adult education. An engineer studies for the CFA exams in the hopes that he can exploit his financial knowledge to get a job in the banking sector. A security guard gets accredited so that he can command a higher salary at work. I remember regular soldiers studying for the O levels at age 30 because he wants to move into the Warrant Officer track.
Exploratory learning is equally important but currently does not play a role in our vision of what lifelong learning is all about. A accountant might want to learn creative writing because he just wants to explore his creative self. An engineer studies psychology not for more income, but to develop better strategies for dealing with assholes at work.
The dominance of exploitative learning is felt when we look at the policy behind English Literature. In Singapore,even people who love English Literature cannot take the subject because it skews their grades downwards. The apologists for the subjects do not do subject any justice, repeatedly focusing on skills needed to "navigate the complexities of life" ( What the fuck does that mean anyway ? ) .
The pragmatic emphasis on exploitative learning is why there is downward spiral in the number of students studying the humanities today. And mark my words - the legal industry will face a lot of trouble in the years ahead and as the last consistently well-paying career for Arts students stop paying its high salaries, our JCs and Polys will become merely Science and Business vocational colleges. Losing the Arts would make us less anti-fragile as a nation and culture, but that will be some other article at a later time.
The crux of the lifelong learning focused on exploitative learning is this : We do make bigger investment mistakes when we choose to learn something. Industry changes may render our learning worthless at least from a human capital perspective.
After getting my battery of qualifications in Finance, I found that it was more profitable to carry on being an IT guy and investing my money. My investments in finance did not increase my human capital although it was very profitable managing my own portfolio. Same goes for my JD investment, law students are moving into an era where they may not get a training contract and even if they do, may not get retained. If I do get retained, I may be financially better off picking up my old career.
The nature of exploitative learning is that it is dependent on the industry and the economy. And business cycles are getting shorter by the day.
Exploratory learning takes place out of intellectual curiosity. Generally when we learn something out of curiosity and personal interest, returns are not the primary motivation to pick something up. The side effect of exploratory learning is that the skills stay with you and can be applied to different areas in your life. Photography can teach a person a thing or two about aesthetics, may come in helpful when decorating your home. Literature put fictional characters in strange situations which may prepare you for one in the future. Exploratory learning creates larger possibilities. It allows you to be more adaptive and maintains value regardless of the economic situation.
From a financial perspective, exploitative learning is buying a short-dated in-the-money option on your human capital. Exploratory learning is more like buying many long-dated out-of-the-money options which may suddenly become valuable in any stage of your life .
We can't ignore the exploratory side of learning. For individuals to be robust, up to date industry knowledge and technical skills need to be supplemented with skills developed via exploratory learning. This has to be chosen independently and based on personal interest. For a decade , my interest was public speaking and I made very close friends which I still hang out with today from the NUS Toastmasters. When I give talk on the radio and in public, my skills in public speaking makes a big difference in my life.
And now for the hard part which may confound policy makers.
For exploratory skills to remotely benefit the learner, we need to beyond the ra-ra motivational bullshit that is being taught in corporate companies. Motivation does not last very long if it is not accompanied with a certain level of mastery. HR department's idea is that you throwing your money into a seminar to keep employees happy, their will stay productive.
Exploratory skills requires mastery just like exploitative skills. Deliberate practice is required to be a good creative writer, photographer, historian or psychologist. In fact, the bar is even higher if you see yourself trying to monetize this in the future. So many hobbyist photographers in the market. Who will pay you a decent wage ?
In summary, my advice for the reader is as follow :
Beyond the PMP, CPA,CFA qualifications that you are currently studying for, you may want to think about what areas you would like to explore that does not directly result in a higher remuneration. It can be computational thinking, mathematics, art history or literature. Go to Coursera to see whether there are courses where you can put yourself under a rigorous program to master that subject.
For policy makers :
With the death of high legal salaries over the next few years, a strong humanities and social science education will no longer have a role to play in Kiasu Singapore. You have to preserve Arts education through free adult education. My biggest fear is that after a life spent being kiasu and chasing the dollar, Singaporeans suddenly find very little meaning in life. We develop a HIV of the mind and begin to buy anything from anyone who gives us a sense of hope. Just look at how polarized we've become in the Cultural Wars.
In such a case, it is way better for Singaporeans to find solace and consolation in the likes of Seneca, Aristotle, Kierkegaard, Lao Tze or Plato than someone like Kong Hee.
Push your universities to start putting up your best humanities lectures into Coursera and reward them for sign-up rates. For civil service recruitment, without offering to pay more, create a HR recruitment culture which is interested in candidate's enrollment in these courses. Have bosses ask about hobbies and interests.
And for goodness sake, grade the H3 contrasting subjects with a P/F grade lah.
This gives me the freedom to be candid with NTUC's initiatives and maintain the critical tone of my blog, which I suspect readers will enjoy more.
So this article came about because of my discussion with NTUC but it was not vetted or paid for by them.
Let's talk about lifelong learning and why we might be going about it the wrong way.
One perspective on adult education comes from a study of evolution. When biologists study species which have a tendency to survive, it is not the strongest but the most adaptive species which go on to reproduce.
If we apply this concept to lifelong learning, there are two kinds of learning - Exploratory learning and Exploitative Learning.
Exploitative learning is what most people think about when they think about adult education. An engineer studies for the CFA exams in the hopes that he can exploit his financial knowledge to get a job in the banking sector. A security guard gets accredited so that he can command a higher salary at work. I remember regular soldiers studying for the O levels at age 30 because he wants to move into the Warrant Officer track.
Exploratory learning is equally important but currently does not play a role in our vision of what lifelong learning is all about. A accountant might want to learn creative writing because he just wants to explore his creative self. An engineer studies psychology not for more income, but to develop better strategies for dealing with assholes at work.
The dominance of exploitative learning is felt when we look at the policy behind English Literature. In Singapore,even people who love English Literature cannot take the subject because it skews their grades downwards. The apologists for the subjects do not do subject any justice, repeatedly focusing on skills needed to "navigate the complexities of life" ( What the fuck does that mean anyway ? ) .
The pragmatic emphasis on exploitative learning is why there is downward spiral in the number of students studying the humanities today. And mark my words - the legal industry will face a lot of trouble in the years ahead and as the last consistently well-paying career for Arts students stop paying its high salaries, our JCs and Polys will become merely Science and Business vocational colleges. Losing the Arts would make us less anti-fragile as a nation and culture, but that will be some other article at a later time.
The crux of the lifelong learning focused on exploitative learning is this : We do make bigger investment mistakes when we choose to learn something. Industry changes may render our learning worthless at least from a human capital perspective.
After getting my battery of qualifications in Finance, I found that it was more profitable to carry on being an IT guy and investing my money. My investments in finance did not increase my human capital although it was very profitable managing my own portfolio. Same goes for my JD investment, law students are moving into an era where they may not get a training contract and even if they do, may not get retained. If I do get retained, I may be financially better off picking up my old career.
The nature of exploitative learning is that it is dependent on the industry and the economy. And business cycles are getting shorter by the day.
Exploratory learning takes place out of intellectual curiosity. Generally when we learn something out of curiosity and personal interest, returns are not the primary motivation to pick something up. The side effect of exploratory learning is that the skills stay with you and can be applied to different areas in your life. Photography can teach a person a thing or two about aesthetics, may come in helpful when decorating your home. Literature put fictional characters in strange situations which may prepare you for one in the future. Exploratory learning creates larger possibilities. It allows you to be more adaptive and maintains value regardless of the economic situation.
From a financial perspective, exploitative learning is buying a short-dated in-the-money option on your human capital. Exploratory learning is more like buying many long-dated out-of-the-money options which may suddenly become valuable in any stage of your life .
We can't ignore the exploratory side of learning. For individuals to be robust, up to date industry knowledge and technical skills need to be supplemented with skills developed via exploratory learning. This has to be chosen independently and based on personal interest. For a decade , my interest was public speaking and I made very close friends which I still hang out with today from the NUS Toastmasters. When I give talk on the radio and in public, my skills in public speaking makes a big difference in my life.
And now for the hard part which may confound policy makers.
For exploratory skills to remotely benefit the learner, we need to beyond the ra-ra motivational bullshit that is being taught in corporate companies. Motivation does not last very long if it is not accompanied with a certain level of mastery. HR department's idea is that you throwing your money into a seminar to keep employees happy, their will stay productive.
Exploratory skills requires mastery just like exploitative skills. Deliberate practice is required to be a good creative writer, photographer, historian or psychologist. In fact, the bar is even higher if you see yourself trying to monetize this in the future. So many hobbyist photographers in the market. Who will pay you a decent wage ?
In summary, my advice for the reader is as follow :
Beyond the PMP, CPA,CFA qualifications that you are currently studying for, you may want to think about what areas you would like to explore that does not directly result in a higher remuneration. It can be computational thinking, mathematics, art history or literature. Go to Coursera to see whether there are courses where you can put yourself under a rigorous program to master that subject.
For policy makers :
With the death of high legal salaries over the next few years, a strong humanities and social science education will no longer have a role to play in Kiasu Singapore. You have to preserve Arts education through free adult education. My biggest fear is that after a life spent being kiasu and chasing the dollar, Singaporeans suddenly find very little meaning in life. We develop a HIV of the mind and begin to buy anything from anyone who gives us a sense of hope. Just look at how polarized we've become in the Cultural Wars.
In such a case, it is way better for Singaporeans to find solace and consolation in the likes of Seneca, Aristotle, Kierkegaard, Lao Tze or Plato than someone like Kong Hee.
Push your universities to start putting up your best humanities lectures into Coursera and reward them for sign-up rates. For civil service recruitment, without offering to pay more, create a HR recruitment culture which is interested in candidate's enrollment in these courses. Have bosses ask about hobbies and interests.
And for goodness sake, grade the H3 contrasting subjects with a P/F grade lah.
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