Author: Growing your tree of prosperity

My Commentary on Channel News Asia.

Channel News Asia contacted me last week and asked me whether I would like to write a commentary on whether increased longevity would lead to working for a longer period of time. The result is a commentary on their website that you can access here. Do note that I’m not exactly a financial consultant. I run workshops for now and I do not deal with buying or selling of any financial product. Working with Channel News Asia was a breeze. I’d just like to point out something interesting in my original submission which was edited out by Channel News...

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Making your retirement safer with a "bear trap" account.

Blog reader with the “Unkown” moniker brought up an important point about the weaknesses of using computer models to simulate the withdrawal of funds from a retirement portfolio. I cannot say that I fully understand the maths, but I think I can explain the problem  to a lay person. Most of the retirement simulations makes sense, but if you are unfortunately enough to face a nasty market crash just around a year or two after giving the middle finger to your corporate bosses, the odds of running out of money increases dramatically. Initially I thought that there was no...

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Early Retirement Scenarios

Thanks to the efforts of BIGS contributor and venture capitalist Lim Der Shing, we now have a decent simulation tool to track what happens when we start drawing out money for retirement. A link to the academic paper and tool can be found here. I’m going to share two retirement scenarios and discuss the implications of using such a tool to determine the target withdrawal rate and subsequently the portfolio size to support this retirement lifestyle. Before getting into the scenarios, I just want to highlight a possible controversy to the use of this spreadsheet. I use the real...

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The Art of the Good Life #44 : Cargo Cults

During World War II, natives living  in the islands involved in the War of the Pacific saw soldiers call upon metallic birds which flew past and dropped tin cans which contained delicious food. After the war, a cargo cult was born – natives built planes out of straw to attract these metallic birds which they hoped would drop more food on them. Some people ask me why I am so obsessed with results rather than process. The reason is that I do not wish to fall into the same category as these cargo cultists. Process is important because it’s...

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Races of Wealth Accumulation : The Dwarf, Elf and Orc

Sarah Stanley has continued the good work of her late father Thomas Stanley and updated The Millionaire Next Door into a new book The Next Millionaire Next Door and it is chock full of interesting facts about how to get rich in this current economic environment. Inspired by both her material and our recent discussion about approached towards early retirement, I thought I’d write about three type of millionaires which I categorise as three fantasy races of dwarf,elf and orc so that we can distinguish three distinct roads to riches. a) The Dwarf The largest number of millionaires are dwarves....

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How long do you need to endure when faced with a market downturn ?

Part of the work of being a trainer is that I am relatively free to pursue some research to improve on my training materials so I got back to some R programming this week. My statistical programming is rusty again and I have to get back to the basics of understanding data frames and how to put simple packages in my R Studio. And this means dealing with some stuff that professionals find trivial like manipulation of dates and processing the finance data from Yahoo Finance. Fortunately, I was able to get some useful thing done within the last...

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The Art of the Good Life #43 : The Just World Fallacy

This chapter serves to remind us that the world is amoral and that thinking that morality will win out in the end is a fallacy. The author emphasises that the world is actually unjust and that living stoically would actually result in much fewer disappointments. One recent event that made quite a number of folks angry is NTU organising a job fair that is exclusive to students with the best grades. It’s quite easy to vilify NTU and say that doing this is incongruent with the Singapore’s recent attempts to reduce the elitism in society. But just as hard...

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How to start a war in the financial blogosphere.

The major fracas going on in the financial blogosphere right now started this week when Suze Orman told the Internet why she hates the FIRE movement. You can access that interview here. This got me thinking about how a pitched battle can occur within the local financial blogosphere here. Here are my thoughts on how to spark a war in out blogosphere : a) There are industries here that should really hate the FIRE movement The Singapore FIRE movement irks people for many reasons. I can imagine that commission sales agents who sell insurance, active fund managers or even...

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The Art of the Good Life #42 : The Illusion of Changing the World

The second installation of “The Illusion of Changing the World” argues that you should not try to take yourself too seriously and put yourself on the pedestal. While inventions can be made by a specific individual, if the individual had not existed, the invention would have been made anyway because many folks in this world may be looking at the same problem. Reinforcing this idea further is that many large companies can change CEOs but company results are often quite consistent no matter who is in charge. I try not to invest based on my feelings towards a company’s...

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Where to go if you quit Singapore ?

One of the exercises in the recent workshop I ran was a simulation exercise to close off Day 1. Workshop participants are invited to form groups to imagine leaving Singapore for greener pastures. As part of the exercise, each group of students will elect a target country. Students will then try to dig out economic data on the target country, make broad estimates on how much it would cost to live in that country and estimate how large a Singapore portfolio should be to generate passive income required to retire there. They will subjectively assess which part of the...

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Personal Update – Just Crossed the Rubicon !

After the high of completing my first workshop, I was confronted with another major dilemma in my life. A company that has been interested in my job application from a year ago was finally able to offer me a job. Unfortunately, this meant taking on a contract role at more than a 30% pay cut from my last pay-check. This was a far cry from a fairly attractive offer last year but stupid old me wanted to be called to the Bar so badly, I was prepared to reject every job offer to meet my personal goal. If I...

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The Art of the Good Life #41 : The Illusion of Changing the World – The Great Men Theory

Can we really change the world ? This chapter tells us not to subscribe to the “Great Men” theory. It is very tempting to believe that India needed Gandhi to become independent. Closer to home, it is very much harder to accept that Singapore can become the economic miracle without Lee Kuan Yew. But success is larger a series of interconnected events, and so, cannot be attributed to an individual. How do we apply this to investing ? I think the first thing we need to do is to start thinking about how much we hero worship the top...

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I am a workshop trainer now. Hear me roar !

During the past 2 days, I started on my new life as a Financial Workshop Trainer. Under the guidance of Dr Wealth, I was able to craft a compelling preview and managed to have a successful first run of the Early Retirement workshop with 33 students. At a personal level, starting this journey allows me to earn equivalent to about 60% of my previous take home pay which is significant more than how much a rookie lawyer can earn on a smaller/medium sized outfit putting more than 12 hours a day in a law firm. The effort after creation...

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The Art of the Good Life #40 : Other People’s Shoes

Suppose you are doing your Reservist and you hear a story from Uncle Sam. Uncle Sam is one of the most popular specialists in the Brigade and always seems to be surrounded by men wanting to hear about his ridiculous escapades. Today Uncle Sam describes a story of his last trip to Hong Kong. In this last trip, Uncle Sam visited Temple Street and hired the services of someone who calls herself Mistress Akina (Based on 80s pop singer Akina Nakamori). After bringing her back to the hotel room, Mistress Akina first orders Uncle Sam to strip, and thereafter,...

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The Great Marriage Firewall of Singapore.

This came about because I had to tackle a conundrum with Government statistics. Earlier on, I wrote in the last article that the median income was $2,699 in 2017. Kyith Ng of Investment Moats thought that this number was a tad low and another BIGS participant found another number that said $4,232 per month. As it turns out, all the numbers are correct. $2,699 was median income of a household divided by the number of heads in a household. $4,232 is the median income of someone who contributes to the CPF. In practice what this means is that a...

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