Author: Growing your tree of prosperity

Everything I do with my finances is based on my own readings and self-study. I never had a mentor or a Sifu when it came to money. In similar vein, I seldom attend financial talks unless I have to give a talk myself and get to listen to other speakers on that day. Very recently, one of my ex-NS buddies contacted me after reading about commentary at Channel News Asia and as it turns out, he now works with the Institute of Financial Literacy so he sent me an invite for a free lunch. During that event, I was...

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...

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...

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...

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....

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...