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Early Retirement SG

France or US?

31/8/2020

1 Comment

 
Ok, so regular reader Kuriko asked a question.
If I were to choose between France and US, which would I prefer and why?

The thing is, the question isn't so simple. 
Cos France or US, isn't like Singapore.
In Singapore, there is only one Singapore. 
The lifestyle in Tampines is pretty much the same as Jurong.

However, in France or the US, or any big countries, there are many different faces of France, or different faces of the US. 

I've heard stories of other parts of France, like Toulouse, Lyon, Normandy, etc. People have told me that the lifestyle there is very different from Paris. Less crowded, people are nicer, slower pace of life, etc. 
Same as in the US, San Frans, New York, Los Angeles, etc, more homeless, more social issues, more expensive, more people, so people rush around more, etc...

So to answer the question, at best I can only answer, Paris vs Houston. 
Cos these are the only 2 cities I've lived in, in the respective countries. 

Also, I can only comment about my existing standard of living when I was in Paris or Houston. 
I can't talk about being richer or poorer in the respective cities. 
I'll also remove dumpster diving which really helped me reduce the cost of food in Paris, although I didn't need to do it to save money, it was still a fun thing to do. 
I'll also remove the coupon-ing which we're doing now in Houston, were we get really good deals on food, groceries, etc... sometimes we will even make money on purchases after stacking the coupons. 
(I'll probably do a post on that soon.)

It's really hard to compare both these cities fairly cos Paris is an old city, with old buildings and architecture, and that is part of the charms of Paris.
And Houston is a growing metropolitan city, where new apartments are being built as more people move to Houston to work.

Our lifestyle in Paris and Houston are both considered quite good. 
In both places, we live in probably some of the more expensive areas.
Safety is a concern so we stay in the better neighbourhoods.
Also, we chose to stay pretty near where she works. 
So rent is higher than what the average resident would find reasonable in the 2 cities. 
They are both comparable premium areas, but in Houston, the space is 2-3 times bigger. Slightly smaller than the size of our 4-room HDB. 
A bigger place, it makes a difference. It's like money, after a certain size, the additional size doesn't make much difference, but at the start, any small increase makes a difference. 
Also, apartment is significantly newer as compared to Paris. Actually we are currently staying in a new apartment which was built maybe 1.5 years ago and we are the first resident in the current unit we rent. 

In Paris, I had to walk up 3 flights of stairs to get to a small platform (around 5 metre square space) with 3 doors, one of them was my apartment and the other 2 are my neighbours. 
Everything is small. Bathroom, bed room, living room, kitchen. No amenities.
Imagine living in an old Chinatown shophouse in SG. You walk up a flight of stairs, it's old and they sub-divide the 2nd floor into multiple units to rent it out to many families. 

My current apartment in Houston is like a hotel, with long corridors lined with doors.
Everything is around double the size as what I had in Paris. There are amenities which we hardly use. Swimming pool, lounge areas, BBQ areas with a gas BBQ pit, etc. It's probably comparable to a serviced apartment in SG.
Everything is air-conditioned, reception area, corridors, etc. Just imagine a hotel but instead of rooms, it's apartments without housekeeping. 

Oh, and Paris doesn't have any air-conditioning. It's not normal for homes to have air-conditioning cos it's mainly cold in Paris. Only a couple of months are hot in Paris, BUT, when it's hot, it's really really hot.
The heat in summer was terrible. Maybe it's the direction my apartment was facing, but it was terrible. Even with the fan on, there were days that I was walking around stark naked in the apartment. 
And yet, Paris is miserably cold most of the year. My mood was pretty low in Paris due to the cold for the bulk of my time in Paris.  

In Houston, the climate is pretty much... home. When I first reached Houston, people were warning me about how humid the climate was going to be and how hot it was during summer. I wasn't concerned cos... well... Singaporean... how hot or humid could anywhere else be right?
And yep... the climate in Houston is pretty much home. 
Summer is almost ending, and we've not had to turn on the air-conditioning at all. We just have a fan and it's good enough for us in the apartment. Could also be due to the facing of the apartment. 
Some days, when we go out, it's really hot outside. The temperature could just be around SG temperatures, but the heat feels a lot worse, cos there's a lot less trees. So even though it's 35 degrees outside, it feels a whole lot worse than it felt in SG. But still bearable for me. 
Strangely, the car doesn't get as hot in Houston after an hour in the sun compared to SG though. You know, when we go shopping in SG and park in the sun for an hour, we don't even want to get in the car, and we open the doors and blast air-con for a while before we are ok to get in the car? Well in Houston, I've never really felt the need to do that. The car is hot, but still bearable. I can just get in the car and carry on. It's still hot, but ok. 

After I experienced Paris, I told myself that I would never complain about hot weather ever again. Cos I really cannot handle the cold. It just kills my mood/morale, everything. I wake up miserable. I just feel miserable most of the time.
There are also cold days in Houston, but pretty much 10 degrees, so a jacket should be good enough for winter months. So maybe my mood will get worse soon in the coming months. 

Transport in Houston is mainly by car. 
I pay US$360 per month to lease the car, US$180 per month for insurance (insurance is more expensive cos it's a new car), petrol is around US$40 per month at least, depending on what I do or where I travel. Parking is free almost everywhere in the Houston area. 
In Paris, my wife gets a monthly train pass for €75 or so, forgot the amount. She gets unlimited travel via most of the metro system. I didn't go out enough so I buy my tickets per trip, which is €1.90 each trip. Which is quite expensive. 

In Houston, a car is a need. It's highly inconvenient to travel by public transport. An old reliable car could be purchased for around US$7k or so. 
Driving conditions are pretty ok. Slightly better than in SG. Drivers are quite nice, not all, but they are a nicer than SG drivers. Roads are wide, parking is easy to find, fuel is cheap.
Paris is the entire opposite. It's convenient to travel by public transport. Unless there's a strike, which happens yearly... It's not particularly expensive with the monthly pass. 
Driving is terrible. Significantly worse than SG. Roads are small, drivers are impatient. Imagine driving through Shenton way area with half the number of lanes in the roads. 

Cost of eating out... well I would say for both cities, eating out is considered expensive.
Cos I'm used to SG prices. 
I find Paris more expensive cos I feel I'm getting less for the price I pay. 
Depending on where I go, €17 might get me a pasta with bread and some dessert.
Whereas US$17 would get us enough to feed both of us. But to the locals, that's the normal quantity that they eat. And the meal would probably consist of some meat and stuff, so I consider the value to be better in Houston than what I get in Paris. 
There's also more Asian food options in Houston, Korean places, Chinese places, etc, and they are more reasonably priced than in Paris. 

But for both places, we hardly eat out cos I find it pretty pricey in SG prices. Cos I still convert to SGD.
Which then leads me to cooking at home. 
Cooking at home is significantly cheaper in Houston. There's no comparison. Cooking at home in Houston is even cheaper than in SG. 

Then there's the homeless...
In Paris, they are everywhere. Cos we travel on foot and public transport, we notice them a lot. They are found in almost every street corner. It's very obvious.
In Houston, it's not so obvious. Cos everything is far. We get into our cars and drive past everything. 
There are homeless, we do see them around. But it's not as obvious in Houston and we don't get the opportunity to interact with them much. 

Same as for crime. Cos we're out in the streets more, we have to be more aware of our surroundings in Paris. 
Not saying that Houston is entirely safe, but there's less chances of encounter depending on where we go and most of the time we drive. 
In Paris, we must walk, we must take the subway, we must squeeze with people, etc. 
But in Houston there are guns... so... 
Anyway in both cities, we avoid going out when it gets dark. Just not worth the risk. 

And then of course there's language. 
It's probably unfair to compare Paris and Houston based on this... Cos the language barrier changes the game entirely. I can't do anything in Paris. I can't call the telco companies, can't converse with the vendors at the market, can't ask questions when I have issues with the train pass, etc...
All these issues disappear when I'm in Houston. I can do anything without being limited by language. 
There's a certain freedom that comes with being fluent in the language. 

And I suppose that also gets worse with the Parisian attitude. 
Cos I don't particularly feel as out of place in Japan or Thailand. Where there's also a language barrier, but the people aren't as grouchy as the folks in Paris. 
Or maybe I'm just reading the Parisian attitude incorrectly cos I don't understand the language. I don't know really.
In Houston, I feel the people are generally more fun, and it's also easy to chat with people so that's always fun. 

As for medical care and health insurance, I'm not familiar enough with either cities to compare anything. Although I would guess that the healthcare in Houston would be more expensive than in Paris. 

So as you read this, I'm sure you already know the answer. 
Unfortunately, I find Paris has really little redeeming qualities from my point of view. 
That's not to say Paris is a terrible city. It's just that my lifestyle, way of living, things I'm interested in, etc... it's just not aligned with Paris. 

The main things I appreciate about Paris was...
1) I feel the food I get is quality stuff. Even though I got most of my food from the discarded areas. It's still good stuff. I ate a lot healthier when I was in Paris. 
2) Paris is a walk-able city. I like walking. I could walk to the supermarket, take strolls to the park, places of interest, etc. I could walk to see the Arc de Triomphe, walk along the Champs-Élysées, cos we stayed a walking distance from the area. Houston is big, there are parks, but I'll have to drive there, or drive to the mall to take a walk. 

The thing I realized as I was typing this post is that everything is relative. 
I compare prices by converting them to SGD. So I come to a conclusion of what's more expensive vs what I'm used to. 
Or traffic, or living space, or lifestyle, income level, etc...
​Even my own personal mentality, beliefs come into play. I don't think about politics cos I don't really care about it. As long as I can live my own life with a place to stay, affordable transport and food, that's ok. 
Like Sharon Au stayed in Paris for a long time, I'm sure she must have seen some charm of Paris to stay there for so long. 

But for me, if I don't go back to SG, I can see myself staying in Houston for long term. 
I really cannot bear to think about staying in Paris for long term. 

Top reasons for the decision. 
1 & 2) Climate and Language (I don't know which is ranked 1 or 2)
3) Overall lifestyle (Living space, car, food options), we live quite simply, but our income level can get more in Houston than in Paris. 

Other things... friends and family... absent in both situations. This makes a lot of difference if it's taken into consideration. 

Safety... I feel safe enough in both cities, but I won't try to push my luck by going out when it gets dark. 

Politics... All countries have issues with politics. But generally, I feel that after people get above a certain financial situation, politics doesn't affect them much. 

Entertainment/Travel opportunities, is not particularly important to me. We can always fly or travel when we need to. 

So when I compare Houston & Singapore... I get...
Climate, language, overall lifestyle...
PLUS safety, friends & family...
and that's why I want to go home. 



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Now That You're Here, What Are Your Plans?

28/8/2020

4 Comments

 
I didn't realize this much until recently. 

Somehow, I get asked this question in various forms.
"Now that you're here (in the US), what are your plans?"
"Work on getting your Green Card/Citizenship."
"Do you intend to stay for the long term?"


The idea that people come to the US to seek a better life. 
And probably many people have come here for exactly such an objective. 
And so people tend to think, "Well, now that you're here, what are your plans?"
Kind with the idea that, "Ok you're lucky enough to make your way here, so it's time to find a way to stay for long term."

Of course I don't tell them that I have no interest to stay in the US. 
So I just say we haven't planned yet, my wife is on a contract so we've only come to make some money and go back to SG. 

There really isn't anything for me in the US. I've no love for it. 
Now, that's not to say that US is a bad country. Relative to many other countries, it's a country of great opportunity. And many people have come here to seek a better life and have successfully done so. 

But for me, I feel that I have a better life in SG. 
No doubt, SG has it's issues, for me, I think it's manageable. As in, I'm ok with those issues. I just have to work around it. Maybe I'm just used to handling those issues. 
Whereas in the US, I don't want to have to handle the issues here. 

I don't feel safe going out at night, I don't feel safe driving around in certain areas. 
There are shooting on a daily basis. There is racism on a regular basis. 
People get shot during road rage incidents.
Police regularly discriminate against Blacks. 

These are the things I take for granted in SG. Safety. 

Are things super expensive in SG? Yes. 
Does the Government have issues? Probably yes. 
Do I feel that much of the SG population are like sheep? Yes...
BUT, I am safe in SG. And that's all that matters for me. 

For me, US has nothing to keep me here. 

So I find this perspective very new. 
Cos when I talk to people, they think it's such a great opportunity that I'm already here.
It's like their parents, who could have come from China or Philippines or Vietnam or Mexico, they went through so much difficulty to get themselves to the US to eke out a better life for their future generations. So it's normal for people to want to stay. 
They expect people who come to the US to want to stay, to grow roots and not want to leave. 

And yet... for me... no thanks. 
Singapore is still home. 

Now of course, I'm saying this from a position of privilege. 
We all have different options, where we start from, what we feel would be better for our future, etc... 
For me, SG is great for my purposes. 
US is also great for some others, just probably not for me. 



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Using All My Money Before I Die

19/8/2020

6 Comments

 
I've heard this before. A couple of my friends believe in it. 
Money not spent isn't mine/yours. 
I don't have kids. Probably won't have kids. So I wouldn't need/want to leave the money for anyone. 
For folks who have kids, they know what they will do with money left over. 

Whereas for folks with no kids, the idea is typically to spend it all. Hopefully spend ALL on the day they die so that the money is not "wasted".
Of course this sounds logical. The idea to spend ALL or almost all their money before they die. 
Cos if you/I don't spend the money, means we wasted our lives earning it. If we leave $100k behind, means we spent days, months of our time earning an excess $100k which we did not utilize.

For me, I don't believe in this. I don't believe it's necessary to spend all my money before I die to have "used" it all. 
The thing is, for me, I'm already using my money on a constant basis. 
We currently have... $XYZ. 
We only spend $4k per month or less depending on which country we are in. 
BUT for me, I am already "spending" the remaining $XYZ 
Cos I'm buying security. Money in the bank isn't just money in the bank. 
For me, I consider myself already using it. Cos money buys me a sense of security. The more I have, the more secure I will feel. When I'm 30+, I'll need more to feel secure.
When I'm 50, I'll need a different number. 
When I'm 80+, I'll need a different number to feel secure. Never know, I may need more than I really need just to feel secure, cos I'm not young anymore, and I won't be able to find work if money runs out. 

Don't underestimate the feelings of insecurity. 
Many people don't retire cos of the feeling of insecurity, not real financial insecurity. Even after they have a lot of money. 

Money isn't just about spending it for the tangible things that money can buy. Goods and services. 
Having money gives me options. That's another intangible good. 
Gives me peace of mind, even if I'm 90 years old I'd still want to have a good portfolio. 
Cos who knows if I'll live til 110? We're all going to live for longer as healthcare and medical advances get better. I won't want the chance that I run out of money just cos I expected to die at 85. 
If I spend most of my money by 85, then when I'm 86, I realize I'm not dead, but now I'm broke. And that's gonna suck. 

So for me, the idea of spending, or attempting to spend all/most my money before I die doesn't roll with me. 
I can understand trying to spend a large chunk of my assets. But aiming to get to a significantly low level, leaving me feeling financially insecure? Nah I doubt that's a good idea. 
The idea only works if one knows the exact date that they will die. So that they can plan around it. 

Like I always say, "Better to have and not need, than to need and not have."



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Why LKY Probably Isn't As Great As What You Think

14/8/2020

0 Comments

 
First things first. I'd like to say that I have immense respect for LKY and what he has done to make Singapore what it is currently. 
The Singapore dollar is strong, the economy is strong, the system is working (for now), the infrastructure is good, healthcare, technology, many many things. 
A lot of things are better in Singapore, than in France or the US or in many other places in the world. 
Singapore with the leadership of LKY and the PAP, has grown to become one of the most modern countries in the world. 

That... is history. 

That was 50 years ago. Where LKY's style of leadership was still accepted by people. 
He was a strong father figure. Strong, focused and bulldozed his way to develop Singapore. 
He knew better than anyone else. And he did. 
Now. I accept and appreciate a strong father figure like that and that style of leadership. 
I was brought up by someone like that. Firm, focused, disciplined. "I know better, so shut up and listen"

However, I highly doubt that this style of politics or leadership will fly with the current generation. 
This current environment/generation appreciates discussion. Everyone has a view, and want to be heard, even though they might know nothing about the topic. When I was younger, experts were heard, people without the education for a subject or experience in the subject didn't get to talk. 
People should earn their badges before being able to voice their views. Else you waste a lot of time discussing things and trying to "educate" these so called "experts" to bring them up to speed with reality. Not to mention spreading of false ideas due to such people spreading ideas which were formulated from incomplete knowledge. 

Nowadays, every Tom Dick Harry has a view. Social media has helped to propagate nonsense and lifted up people who are influencers. They might not have any expertise, but they are influential cos that's how the social media world works. 
So we have a whole range of new "views" and political mentalities from all kinds of people. Some smart, some not, mostly not, etc... 

So the thing is, IF we put LKY as a young chap into Singapore politics NOW, and make him run a campaign, I wonder how he would fare. He might be able to get elected as an MP, but will he be able to rally the other MPs and become the next Prime Minister? 
Would they accept him and his style of "I know better"?

I do wonder. 
Cos I highly doubt that his style would suit the current political environment.
Would he be able to lead Singapore into the next phase? From 2020 til 2050? Seriously, I doubt it. 
Not cos he's weak, or any less intelligent, but rather cos the new age of people will likely not be as receptive of his leadership style. 

The thing is... Singapore isn't what it was 50 years ago. The country has developed, the country has changed, the people have changed, the world has changed, views, knowledge, styles, everything has changed. 

LKY... he was great, in the right time and place.
And I suppose that's what's important. 
There's no point talking about the timeline that didn't happen. An alternate universe where things might have been different. 
Cos the reality is, he was born in the right place at the right time and he provided a service very much needed to Singapore. 
And Singapore is all the more better because of him. 



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A Poor Experience With SQ

13/8/2020

7 Comments

 
I've been pretty tired recently looking at both US and SG stock market so I haven't had much concentration to post these days. 

Anyway...

I've been looking at SQ shares recently. Just curious how their business works out in the future. 
But something happened also recently which made me doubt their recovery and growth. 

My wife has a couple of high membership statuses for hotel and airlines. 
Cos we've been flying around past few years. 

Membership statuses are very important for hotels and airlines to retain their repeat customers.
Cos... You see, if we have a high membership for XYZ hotel, we get free upgrades to bigger rooms. 
So, why would I even bother to stay at AAA hotel where I get no free upgrade? End up I will pay for a small room, whereas at XYZ hotel group, I can pay for a regular room but get a bigger room. 

There's small perks for airlines as well. Like free airport lounge, more baggage space, small perks, there's usually no free upgrade of seats. 

So membership programs are very important for hotels and airlines cos it locks in customers. Once I get a high level at XYZ, I'll unlikely ever stay at AAA group cos... what's the point? 

Hotels and airlines also know this. 
So if I have a high status at XYZ hotel, I send a screenshot of my status to AAA hotel, I can ask them to match the status to an equivalent high level. 
This helps the hotel chain, cos... well, now I will give AAA hotel chain a chance right? 
Else I'll just keep staying at XYZ hotel chains all the time. Won't even give AAA a chance to steal the business. 
So most of the time, when my wife sends a request for a status match, she gets it. Cos... no significant loss to the hotel chain or airline chain. If after a year we don't stay/fly enough with whatever company, they will just remove our status. 

Recently, my wife has been sending out status match requests again. Cos... why not right? 
Now's a good time, cos hotels and airlines are facing reduced demand and they should want to get frequent fliers to try out their hotel chains or airlines. 

So my wife sent a request to SQ, Singapore Airlines. 
She requested for a Gold status, cos that's what we have on Air France.
Rejected. 
She requested again for Silver status.
Rejected again....
WHAT?!

So when I heard about it... I'm like... HUH... 
Ok so that's how SQ works. Now, I'm not complaining. Cos, no love lost. There are plenty of airlines to fly on. We hardly fly on SQ anyway cos it's not value for money regardless of status level. 
However, this incident made me think about how SQ is running their business. 
During this period, I would think that ANY hotel or airline would want to attract new customers. 
Giving a status match to a frequent flier during this period, gives the hotel or airline a chance that the frequent flier will try out their services in future when things start to normalize. 

I mean... the market for travel and hospitality is SH!T now. I would have thought any of them would want to try to get more prospective clients when things get better. 
It's not like my wife doesn't have any frequent flier status and just wants to get a status with no evidence that she flies frequently. And yet SQ didn't want to give her even a Silver status. 

And so I wonder about SQ and their customer service and their future in flying. 
Cos such incidences are telling about a business and how they appreciate their customers. 

I can understand if they want to be a "premium" brand and not want to give status match on normal days when business is good. But HELLO??? This is hardly the time for this I think. Especially for SQ (More on this below).

Another incident which I read about, was that when COVID started out, many airlines were offering free date changes and refunds via flight vouchers. 
Whereas SQ was significantly behind the curve when it came to this. Many customers had to kick up a big fuss before SQ was willing to be more accommodating. 

This abysmal level of service compared with maybe something like what Emirates does, where they provide insurance for fliers who get infected with COVID while on their flights. 
I mean... this is what will make customers want to fly with you AND continue to fly with you. 

The thing about SQ and Singapore is that... SQ flies only OUT of Singapore. 
For almost ALL other countries, there is domestic travel. And that's still alive. 
In US, the airlines are flying quite regularly. Same for France and other countries. 
BUT, in Singapore, SQ can only fly OUT of Singapore. There is NO domestic travel. And that's tough for any airlines. Cos there's almost no revenue stream. 
So for SQ, it's gonna be tough. Within the US, there's no restriction on flying cos it's within the same country. 
For Singapore, countries can deny flights to and from Singapore, or Singapore can deny flights to and from other countries. So SQ is heavily impacted by such policies. 
Whereas for domestic flights, there are less of such restrictions. 

Anyway... just wanted to share my personal experience and some thoughts on my/our experience with SQ. 
Reminds me of a post I did last time. 
Spending goodwill, where the future generation spends the goodwill earned by the previous generation. 



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7 Comments

What Do You Do When The Fire Alarm Sounds?

7/8/2020

3 Comments

 
Yesterday night, 12:30am, the fire alarm sounded. 
I had difficulty sleeping and was awake when the alarm sounded. 

So like a typical Singaporean, I just lay in my bed and just expected it to be just a false alarm. 
I mean... That's what usually happens at shopping centers and other places right?
We hear the fire alarm, then we hear an announcement "The fire alarm has sounded, we are investigating the situation."
So I lay in my bed for around 3 minutes, expecting to hear some announcement. Some of the staff stay in the apartment complex so I was pretty sure someone would be looking into this. 

3 minutes later, I decided to get up to check out the situation. I opened the main door and heard some noises. No one around the corridors. I thought, "Ok, probably someone else who got up and also investigating what's happening." 

The alarm was still ringing. 

Then I opened my window blinds. No bright lights, no smoke, etc. Nothing out of the ordinary.
BUT... I saw groups of people walking down the stairs. 
WOAH!!! Not just one or two people. A steady stream of people were evacuating the apartment complex. 
So I asked my wife to get up to evacuate as well. 

So we walked down the stairs, bumped into a couple of other people who were getting out of the building as well. And we just basically got out of the building and hung out at an open area just outside of the building. 

Some people got into their cars and drove down the multi story car park and parked in a big open air space. 

After a couple of minutes, the security patrol from the nearby shopping center arrived to check out the situation. 
(There's a shopping center nearby and they have security patrol 24 hours a day.)
A flashing fire engine appeared. 
Seriously... It was a big, bright fire engine with the lights flashing. 

We continued to hang outside for maybe 20 minutes or so. Then the fire engine started backing out of the driveway. And so we concluded that there was nothing really wrong and everyone just went back to their apartments. 

So what lessons did I learn from this incident? 
Well... things are different in US and in SG. 
Are we too complacent in SG? 
Fires occur regularly in the US. So the people will naturally just evacuate to be safe. 
Chances are, the fire alarm is linked to the fire department. So the fire engine just came once the alarm sounded. 

Whereas I think in SG, we will tend to wait for further instruction before doing anything. Maybe even in shopping centers the management needs to call the 995 before a fire engine is sent. 
Which I think is a bad habit. Never know... even the instruction to wait by an "authority" might be the wrong instruction. 
Remember what happen in the Sewol incident? Teachers, who were supposed to know better, told the kids to go back to their rooms, which resulted in many of the students getting trapped and drowning in their rooms. 

After we got back to our rooms, we wondered... Maybe the folks who evacuated with their cars might be on to something. Maybe they had an emergency kit in their cars already and they just need to drive out and they would have resources, clothes, food, water, etc. 
However, of course driving down might take longer than just running down the stairs. 

We did note that we were definitely inadequately prepared for the situation. 
We should at least have a bag ready to grab with money, our passports, and maybe a set of clothes already packed. Which is worth preparing. 
Cos IF there's any real emergency, we'll need to have money and our passports with us. Then maybe we need to stay at a hotel for a couple of days, we need some clothes to change. Before we are able to go out and buy new clothes and such. 

So even though the fire alarm was a false alarm, probably some malfunction, it made me think about how to react to such a situation. 
Cos I think in SG, I really take it for granted. I probably wouldn't have evacuated the place and waited for further notice if I didn't see other people evacuating as well. 

And for me, that was very risky. I need to be better prepared next time. 


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3 Comments

Running Retirement Like a Business

6/8/2020

0 Comments

 
I was thinking... 
Retirement planning is kinda like running a business.

First you start the planning and thinking about it. 
Do the calculation, market research, ask around for more info, etc...

Some people don't plan and just chiong... go in blindly... 
Sometimes, the people who chiong succeed, sometimes they don't. Never know really. Sometimes even those who plan fail as well. 

Then, need to find money to start it out. 
Which is usually your savings, you know, like excess money after your personal expenses. 

Then the execution and growth of the business. 
Save, invest, borrow money to invest, leverage, diversify. 
Year on year, you want to keep growing the business. 
You need to manage this "business", what strategy you want to take, how you want to grow, etc.

Must make sure the business is profitable, grows, and is cashflow positive. 
Well, some people might be cashflow negative when they buy a property. They rent it out, but the rental isn't enough to pay the mortgage so they have to input even more capital. 
Some people also do that for their business, they have confidence that their business will grow, but just needs to input more capital at the start. 

Then as you grow older, maybe you want to chill on the business. 
So you don't grow the business as much and just keep the existing business and just enjoy the cashflow. 
At this point probably won't want to input anymore capital. The business probably should be able to run by itself now. 
Or maybe you want to leave the business to your kids so you keep growing the business and teach your kid how to take over the assets when you leave it to them. 
Even if you have a large retirement sum, you may want to be able to hand it over to your kids and have them grow it for their kids in future as well. 

The thing about it is...
This planning for retirement "business"... needs to be work out. I mean... well some people don't plan for it and just scrape by... I suppose that works as well. Some people think that having kids is "retirement planning" in itself. 
But if one wants to live fairly comfortably in their later years, I suppose embarking on this "business" is pretty much necessary. 
The earlier they start on this "business" the more they can grow their business without injecting too much of their own capital.

A comfortable retirement is probably one of the more important things to plan for in life. 
A typical person would retire around 60-85... Or something along those lines. 
around 20-30 years of unemployment depending on how long one lives and the date he/she decides to leave full time employment. 
It's a good 30+% of ones' life. Not short. 
I think really too little people put enough thought into it and delay planning for it until much later in life.



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Defending Your Position (Part 2)

5/8/2020

19 Comments

 
Some time back, I wrote a post on Defending your position. 

The idea is, I feel that after a certain point, it becomes important to defend the position instead of keep pushing for more returns. 

Now, different people have different takes on how to manage finances and there's no one size fits all. 
Some people can retire on less, some people can sleep with great volatility, some people... some people... whatever... 
Financial planning or retirement planning is different for everyone. 
And everyone will have to decide for themselves what is suitable for themselves. 

Some people have been able to make good income on short term trading/investing.
Some people like to buy and hold for long periods. 
Some people rebalance regularly. 
Some people invest in dividend stocks/REITs... 
Different people, different styles. 

FIRE, or the idea of early retirement has only picked up in the last 10-20 years. 
It wasn't so prevalent in our parents generation. 
How many who are planning FIRE, have been through multiple boom and bust cycles?
How many have sat on 40-50% losses for extended periods of time with poor economic environment?
I don't think there are many people who have been through this. 
FIRE people are usually folks who are under 40 years old. 
And probably someone who has lived through decades of boom and busts need to be at least 60 years old. 

It's easy to look back and say, it's worked for the past 50 years. It must work the same way now. 
And yet, when you are 60 years old, living in the situation, holding on to 50% losses, for 2 years... are you sure you will still have that faith / confidence?
The latest generation of investors, got a quick rebound in the past 6 months and it's easy to pat themselves on the back and say "Well done, SEE I told you to just hold and it will recover."

Many of these young FIRE proponents are still working with a regular income. 
The mentality of someone with a regular income, with youth on their hands, grants one a certain level of confidence that they have time on their hands. And they do. 
They have income and time on their hands. Many of them aim for FIRE, most still have at least 5 years before they execute, IF they even execute. Cos I know there are many who wanted to FIRE, but eventually just continued to work to pad up their AUM. 

BUT... The thing is... let's look at it from the perspective of a 65 year old retiree. 
He may have a $1 million portfolio. He may already have been retired for 10 years. 
So he doesn't have a career which he could return to. 
And now, the question becomes... Would it be prudent for him to invest his whole $1 million in stocks and/or bonds?
Both stocks and bonds gets smashed in bad times. It's not like what is learnt in finance. Bonds just gets smashed less. 
If this retiree gets hit by a 40% loss. That's $400k. Leaving him with only $600k. 
Still a good amount but I'm pretty sure he would have a lot less confidence about his retirement. 
Don't forget, this guy has ZERO income. 

Then we compare this with a young FIRE proponent. 
Maybe he's 35 years old. He may have $250,000 AUM. He may be earning $60k per annum 
A 40% drop for this guy would be $100k. He doesn't feel it. Cos he's still working. He still uses his working income to fund his lifestyle. 

The feeling of security is very different for someone with a working income. 
They have options. They have the option to delay retirement. They have the option to keep working and "wait" for their investments to recover. 

So the thing is, we have to realize/understand that the mentality, financial situation, sense of security, etc for someone at 35 years old, talking about FIRE and long term passive investing, is very different from someone who's at 65 years old, retired for 10 years and been exposed to numerous boom and bust cycles of which, they also know that some downturns last much longer than what happened in the past 6 months. 

Will markets recover? YES. Most likely they will. 
HOWEVER, when you're 65 years old, retired, without a job, you really don't want to be potentially sitting on 40% losses for years. IF it takes years for his investments to recover. 

Which is why, I believe that it would be prudent, or suitable for some folks to look into defending their position. The "cost" of a loss, is more "expensive" than the potential benefit of a gain. 
For the retiree to increase his portfolio by 50% from $1 million to $1.5 million, isn't really attractive when he has to consider 40% losses. 

A young FIRE just starting out or halfway through his plans, can still easily talk about holding on to his mortgage of under 2.5% interest and using the excess liquidity to invest in the markets for the long term. 
Whereas a retiree might find that too risky due to his circumstances. 

It would probably be more prudent for the retiree to have fully paid off his mortgage and live on his $1 million. Trying to earn more at this point in life just might not be worth the risk anymore. 
At that age, I would think a retiree would want to just live out his life and enjoy himself and not bother about too much volatility in his portfolio. 

Why do I talk about this? 
Well, cos "been there, done that". 

When I was younger and working, I would think about... all these things. 
Don't pay off mortgage early, hold on to less than 2.5% interest rate. Invest the rest. Theoretically, that's correct. 
Don't put money into CPF, cos it's easy to beat 2.5% or even 4%. 
It still IS easy to beat those returns. 
HOWEVER... now that I haven't worked for around 4-5 years, the mental state is different. 
There's NO NEED to take more risks. Capital preservation is probably more important to me than the idea of making more returns. 
There is REAL concern of losing capital. Making more returns at this point in my life wouldn't impact my lifestyle much, whereas I would really feel a significant drop in my AUM, in terms of mental security. 
For example, the idea of buying into the S&P 500 at near it's all time high is really not attractive to me, considering the current state of the global economy. 

As I/we grow older, our circumstances change. Mentality changes. How we perceive risks change. 
For me, I just want my life to remain somewhat stable. 
When I return to Singapore, I want to continue staying in a fair sized HDB, have food to eat, clothes to wear, don't need to be concerned about my finances. 
I really don't want to think about a big drop in my assets. 

So yea... I'm not saying don't invest. I, myself, am also looking at various investments. 
But for me, stability of the companies are more important than their potential returns. 
I rather buy undervalued (in my opinion) shares and aim for their recovery during this period, as compared to buying a growth company and hoping that they continue growing through this downturn. Although growth companies may show greater returns in the long run. 

And so, as our circumstances change, I think it's important to look at defending our position as compared to just looking at returns and always staying invested. 
Holding cash, itself, is a strategy, when one doesn't have confidence in what is going to happen next.

Think about it in terms of soccer. The team you support has already scored 2 goals and are in the lead 2-0, it makes sense to just defend and waste time and hold on to the lead until the match is over. 
IF there is a chance, ie, the opposing team makes a mistake and there is an opportunity to score another goal, then make use of that opportunity. Else, is there really a need to open up the defenses and try to score a 3rd goal?  



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Second Thoughts on Long Term Investing

4/8/2020

6 Comments

 
Recently, I've been having second thoughts on long term investing. 

My friend asked me, is long term investing really good? 
And I thought it was an idiot proof answer... Wasn't the answer just a simple... Yes?

So... curious me, went to look back at some data...

So I went to look at a couple of stocks and indexes. 
I'll give some estimated rounded numbers so that it's easier to read...
Just over the past 25 years. 

I typically benchmark returns to double every 10 years. So for a 20 year investment, returns should be 4x. 

========================

NASDAQ... The NASDAQ is currently around 10,000 points. 
If you bought the NASDAQ in 1995, it was around 1,000 points. You return now would be 10x after 25 years. So it's easy to say. "WOW long term investment works."

However... 

If you bought the NASDAQ in 2000, at the height of the dotcom era, it was around 5,000 points. You return now would be 2x. Which is considered low after a 20 year time frame. BUT the NASDAQ didn't recover to 5,000 points until year 2015. Between 2000 and 2015, 15 years with nothing to show for it. 

If you bought the NASDAQ in 2002, after the dotcom burst, it was around 1,300 points. You return now would be 7.7x. 
Which is not too bad for 18 years. 


If you bought the NASDAQ in 2008, the peak period before the Great Financial Crisis, it was around 2,400 points. You return now would be 4x. Also quite good return for 12 years. 
Note, at 2,400 points in year 2008, the index is STILL BELOW the dotcom era. 


If you bought the NASDAQ in 2009, after the GFC, it was around 1,500 points. You return now would be 6.6x.
Even if you bought in 2002 after the dotcom, you are only up around 20% at this point after 7 years. 


If you bought the NASDAQ in 2015, it was around 5,000 points. You return now would be 2x. That's quite good cos it's only been 5 years. 

So what do I notice? Well... hindsight is always perfect. 
Currently, the NASDAQ is at the all time high around 10k points. 
It's easy to say, just invest long term and all will be good. 
That's only if you are immortal. 
At every period of time, there is someone who is just starting investing, there's someone retiring, or trying to grow their assets. Everyone is at different phases of their investing life. 
If we look back and are in year 2001, just after the dotcom bubble, do you think people would be convinced that long term investing is good? The NASDAQ stayed depressed for many years after the dotcom bubble burst. 
It's easy to be living at the peak of the index and looking back to say that long term investing has worked for them. 

========================
​
If we look at the S&P 500, the situation is slightly different but similar. 

S&P 500... The S&P 500 is currently around 3,300 points. 
If you bought the S&P 500 in 1995, it was around 500 points. You return now would be 6.6x. Which is quite fair for a 25 year period. 

However... 

If you bought the S&P 500 in 2000, at the height of the dotcom era, it was around 1,400 points. You return now would be 2.3x. Which is considered low after a 20 year time frame. The S&P 500 didn't recover to 1,400 points until year 2007. Which was the next peak, cos after 2007 was the GFC.
So dotcom peak to GFC peak, there was barely any return.


If you bought the S&P 500 in 2002, after the dotcom burst, it was around 800 points. You return now would be 4.1x. 
Which is not too bad for 18 years. 


If you bought the S&P 500 in 2008, the peak period before the Great Financial Crisis, it was around 1,500 points. You return now would be 2.2x. Barely double after 12 years. 
Note, at 1,500 points in year 2008, the index is around the same level as the dotcom era. 


If you bought the S&P 500 in 2009, after the GFC, it was around 800 points. You return now would be 4.1x.
Even if you bought in 2002 after the dotcom, you are having no returns.
I'm not using the lowest point after the GFC cos nobody picks the bottom and picks the top. So maybe someone bought it at 600 points or 700 points or 800 points. Thing is, between 2002 and 2009, there's just a 20% return or less.  


If you bought the S&P 500 in 2013, 5 years after the GFC, it was around 1,500 points. The S&P just recovered to the high before the GFC. You return now would be 4.1x. That's quite good cos it's only been 7 years. 

So once again, what do I notice. 
Well... hindsight is always perfect. 

Currently, the S&P is at 3,300 points near it's all time high.
Again, it's easy to say, just invest long term and all will be good. 
See, just in a few months, the market has recovered most of it's losses. 

It's easy to be living at the peak of the index and looking back to say that long term investing has worked for them. 

========================

If you look at the Nikkei, it's even worse. 
The Nikkei peaked in 1989 at around 38,000 points.
It's now 22,000 points. 30 years and it's still under. 
Of course, the Nikkei has gone through ups and downs between 1989 and 2020. 
Thing is... long term investment doesn't always work out. 

Now, I'm not saying that long term investing is bad. 
It is probably still a very good idea. 
What I want to say, is... 
Everything depends on perspective. 
When did you buy? What did you buy? Are you retiring soon? Do you need the money on sudden notice?
Markets go up and down. It's not always at the peak. it may stay depressed for many years.
Yes. Most likely the next peak will be higher than the previous peak. Even if it's not, the next next peak will be higher. But maybe someone cannot wait til the next next peak. Maybe they will be retiring soon. 

Humans are not companies. 
Humans have a life cycle. They have goals and milestones that they hit in life. 
Whereas for a company, they have decades, or centuries. They can invest for 50 years, 100 years, 200 years. Yes, markets will likely be higher in 200 years time. But humans don't have the luxury of time. We have things to do. Lives to lead. 

So the realization is that... the investment strategy very very important. 
Buying at the high or near high is an extremely bad idea. 
If you buy early and you buy cheap. Then it's great. Long term investment is always good. 
But if you buy during the peak, or near the peak. It might take very long to make back the investment. 

Even if you do not try to time the market and invest regularly, you will have similar effects. The gains or losses will not be so high, cos you will average the purchase price. 
You will not do as badly as someone who bought at the peak. 
You will not do as well as someone who bought at the bottom. 
It will just be average. You won't face as much of the up, you also won't face as much of the down.

But... Eventually, you will face a period of downturn and returns could just be maybe 50% over a 10 year period.
People like to look at returns when prices are at the peak. 
And yet, I doubt that's realistic. Markets go up and down through someone's investment life time. 
The question is, how much is this person above water and how long do they stay above water?
Do they ever go underwater? And how long do they stay underwater?

During the past 20 years... yes long term passive investing has worked. 
And if we look at the past 60 years, yes, long term investing has worked. 

But, the real question should be, WILL IT WORK FOR YOU?

Will it work for you WHEN you retire?
Are you sure it will continue to work? Cos, WHEN you want or need the money is one of the most important things in such a plan. 

Imagine getting into retirement age after the dotcom burst. Your investments would be crushed. 
It would remain low for at least another 5 years. 
Not all market downturns recover as fast as this recent one. 
This person would likely have continued to work until the market recovers. 

So the thing is, blindly following long term passive investing is... questionable. 
It's still probably a good idea. 
But it really needs more thought. Like when you need the money, how long the investment horizon is, is the Government doing a good job, is the country continuing to develop and grow, etc... 

So for me, I think... I have second thoughts about long term passive investments. 
Rather, I would now think about, HOW can I make long term passive investing work for me.
Cos I don't think it's as simple as just buy and hold anymore. 
The long term buy and hold is a good idea, but I think there needs to be an exit strategy as well. Cos when I'm older, I may need to switch to less volatile investments cos I may need the cash in my old age.  
Regardless, there needs to be some form of market timing involved. 
I'd want to cash out at a near peak especially when I'm older and can't afford to wait for a recovery after a crash. 
​


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6 Comments

2 Important Things That You Should Never Do

3/8/2020

4 Comments

 
There's a lot of things that financial bloggers talk about. 
Save money, don't overspend, invest, stuff like that. 

Today, I want to talk about 2 other things which not many people in the financial blog-o-sphere talk about. 

1. Don't tell people you have money.

I learnt from a young age not to talk about what I have. Don't tell people you have money. 
The thing is, many people aren't prudent with their finances. 
I don't have many close friends. Usually, if they are close, they share similar values as me, so they are pretty frugal as well. 
But there are a lot of other people who aren't cautious with their spending. 

Friends, family, acquaintances. And that's troublesome. 
People have expectations when they hear/know you have money. 

Maybe they expect you to pay more when it's time to take care of your parents, or their medical bills. 
(Not saying you shouldn't take care of your parents or anything, just saying that people may have more expectations and I don't think that's fair.)
Or they may expect you to pick up the bill on a family meal. 
Or they may think, "Oh this guy so rich, why is he so cheapo on his kids' birthday party?"
Stuff like that...

So I've learnt to keep quiet about my finances. 
I'm getting by ok. That's all. I'm unemployed. I don't have money.
I would dumpster dive for food if I could. Actually I'm broke. 
I like this image that I try to create for myself. 

When people think you're broke, they try to help you out. So that works even better for me. 

And of course, the next problem that comes about when people know you have money. 
Is that they may come and try to borrow money. 
Friends, family, etc... and they may try to guilt trip you and say how bad their situation is and stuff like that. 

They'll be like "Oh come on man, you can't even spare me $200 bucks?! How about $100? Ok just $50 bucks? I'm sure you have $50 bucks..."
Happened to me. It sucks. 

2. Don't EVER lend people money.

NEVER EVER LEND PEOPLE MONEY.
You probably will lose your money and will probably lose your friend/family member as well. 

I've lent people money 2 times in my life. Both were stupid decisions which I made. I don't know why I didn't learn from the first one and lent money the second time. 

First time I lent someone S$15,000. 
After I transferred the person the money, I regretted it right away. It was a friend. 
He was doing some "investments" blah blah blah... don't want to get into the details of it. 
I felt stupid after transferring him the money. 
Cos the thing is. I lose control of the money once I send it to him. He could have bought a car and driven it around and all I can do is feel stupid. 

I eventually got my money back after the expected loan period. I got an interest on it as well. Couple of hundred bucks. So no loss there. I had to bug him to transfer the money back though. But still got it back so no love lost. But it was a stupid move. We were still friends after the incident but we grew apart as the years went by so I don't know what happened to him anymore. 
The loss of contact had nothing to do with the money. 

The thing is... it's just not worth that few hundred bucks, to lose $15k... really. 

Second time, I lent someone $4,000...
Similar situation. I would get an interest on the loan, I trusted (still trust) the person (only for certain things tho). 
But even though I trust the person, I would prefer not to lend money to him ever again. 
Same thing, I got the money back after a few weeks. Got an interest on it. 
Still felt stupid after transferring the money, cos... same thing. He could have bought some stuff and enjoyed himself with the money and just not returned it to me. 
Had to bug him for the money, and after a couple of weeks, within the loan period, he returned it to me. 
So again, no love lost, but still a stupid move. 

Just for a couple of hundred bucks, I could have lost $4,000. 

Significantly different from investments in the stock market. At least for investments, I have legal rights to buy/sell/dividends, etc.
Loans to friends and family has no rights. Paying for a lawyer is more expensive than writing off the loan. 

I've read about this a lot. People lend money... they never get it back. Didn't happen to me. I was lucky.
But it's like cigarettes... One could smoke and not get cancer... but mathematically, there's good chance to get cancer. 
Same as loans. I know I was lucky for those 2 times. Hope I won't be stupid and try a 3rd round. 

It's quite sad when I read about stories. 
People lend money cos they trust the person. Usually the lender is a nice person and wants to help out. 
But the person borrowing the money just takes it for granted. They might get over their rough period in life and they might go on trips with their family and stuff, but they never ever pay the lender back the money. 

Other stories I hear about are that the borrower just disappears. Just can't be contacted. It's just screwed up. 

So yea... Once you lend the money, you lose control of it. It's no longer in your account. It's in their account. 

So remember...

1. Don't tell people you have money.
2. Don't EVER lend people money.




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4 Comments
    This is the link to my first post... how it all started...
    ​

    Mindset changes
    throughout the years


    How I make use of my wife

    An Interesting Email

    Author

    Male, born in 1982. 
    INTP
    Graduated with a degree majoring in Banking & Finance, Financial Adviser for a period of time resulting in in-depth knowledge of insurance products and marketing techniques of the industry.

    Inspired by MMM and ERE.

    Decided to embark on a mission to retire early in Singapore, a place where such an idea is considered impossible. As I believe that life has a lot more to offer instead of just a working career. I've decided to start a blog to note down my journey to achieve this mission and help others along the way who are willing to listen and try doing things differently from everyone else.

    I have decided to remain anonymous until I finally am able to actually retire, reason being that this idea might not gel well with the company which I am working for currently and also to avoid real life flaming from people who say that such ideas are impossible and that an individual is lazy for choosing early retirement instead of contributing to society in the form of labour.

    More about me.
    ​

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