Author: Taking Care Of My Own Business

Let’s do it – 100 solutions to reverse global warming

When I read articles about climate change it leaves me overwhelmed with the size of the problem and paralyzed into inaction. But only collective actions help. So I chose to stay engaged with my small gestures. Gestures of hope. Hope, as long as it’s not a form of denial, can be a powerful motivating force, pushing us to adopt a more future- and action-oriented mindset. There are plenty of “low-hanging fruits” to do our part. 1. Go easy on the air-conditioning (we do it despite having solar panels on the roof of our home). 2. I don’t sit in...

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Retirement Has An Image Problem

Are you yearning for retirement? But retirement has an image problem. What kind of mental picture does this word conjure up for you — sunny beaches and no longer having to set an alarm clock? Or a stressful feeling about how much longer you will need to work to afford such a lifestyle? If ever there was a word that needed to be retired, it’s retirement. Meet “Life Two” in this thought-provoking article in the Financial Times. Life Two: What we used to call ‘retirement’ I think “Life Two” is quite catchy. What do you think? And if you...

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An investment idea that returns peace of mind

How many trees are there on Earth again? There are approximately 3 TRILLION TREES IN THE WORLD. A number that looks even more impressive when it’s written out: 3,000,000,000,000. That’s about 390 trees per person. But what’s more astonishing is that we didn’t have this estimate until recently. In fact, scientists used to believe that the number of worldwide trees was a whole lot lower (something like 400 Billion). No one bothered to do the dirty work of tree counting until recently. While 3 trillion trees sound like an astronomical number, it’s almost half as much as what used...

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The rational optimist

I am sure you have encountered “the glass” before. Now, this glass is unique in the fact that scholars and non-scholars seem to wage a fierce debate over the contents of said glass. One side says that this proverbial glass is half empty and the opposition adamantly argues that the glass is, in fact, half full. The pessimists vs the optimists debate. What’s the small difference between them? An optimist thinks that this is the best of all possible worlds. A pessimist fears that this so. The Psychologist Martin Seligman found that when we shift our explanatory style from...

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You can’t see their savings. But you can …

… see what others are spending. And that is a problem. Due to our envy bias we do pay more attention to how our friends and neighbours spend compared to how they save. Well, comparing with friends might be a bit understandable. But comparing with your neighbours is rather irrational and random. You do not need to earn other people’s approval.  Who told you that this would be important in life? Why do you still do it? Social Comparison Bias Attentional Bias External validation where you put more weight on how we are seen in others’ eyes than how...

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Are you still admiring Warren Buffett’s style of investing?

Who still believes that you as an individual investor can still outperform a broad-based ETF by picking some “superior” stocks? Ok, ok. I agree, Index Funds and ETFs will never bring you alpha but they also won’t require so much attention, emotional strain or behavioral challenges. As I am convinced that investor psychology drives the majority of returns. And as I am convinced that getting rich slowly is the only sustainable way. I am convinced that the rules to grow my nest-egg are rationally quite simple: Diversify. Rebalance. Keep costs low. No one writes a book about those basic...

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Do you see Artificial Intelligence as a risk or opportunity for you personally?

I thought about that question for a while. That led me to another question. An even more fundamental one: What does it mean to be human in the age of intelligent machines? The world is constantly changing but the wetware in our brains has stayed relatively constant. If machines can compete with people in thinking, what will enable us to continue to create social and economic value? What makes us humans unique? The answer is the one thing machines will never have: “a heart.” Humans can love, we can have compassion, we can dream, we can inspire. While machines...

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Only intrinsic motivation lasts

Would you agree or not? Have you ever felt a drop in motivation to actively take care of your investments? If you are not intrinsically motivated, your default option is usually extrinsic motivation. That leaves you foraging for carrots (money, rewards, praise, power, status, prizes) proven to have just the opposite effect as intrinsic motivation. You may experience a burst of energy, but it’s not the kind of energy that promotes creativity, happiness or well-being. And, it dissipates quickly, leaving you starving for more carrots just to keep going. Unfortunately, intrinsic motivation driven by our passion is rare. Especially...

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What is the largest company by Market Capitalization right now?

Correct, Microsoft. Microsoft has gone through a massive leadership style change in February 2014 from Steve Balmer to Satya Nadella. Under Ballmer’s tenure as CEO, Microsoft’s share price stagnated despite Microsoft’s financial success at that time. His management style was rather harsh. He insisted for example on a system called “stack rating,” whereby every member of the company was judged relative to his peers. “Every current & former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft,” journalist Kurt Eichenwald wrote back in 2012. Not very empathic. Enter Satya Nadella presently widely regarded...

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What is work for you?

The centerpiece of your identity and life’s purpose? A means to get richer than your neighbor to become happy? Or actually richer than the rest of the world? Thanks to the internet “we can compare ourselves to every humblebragger from around the globe and it’s making many of us miserable because everyone’s life is perfect on the Internet and our real life is flawed. This is a game you’ll never win because the other side is always cheating.” When you spend to impress, remember that those whom you’ve impressed will not be there to bail you out when the...

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Time vs Money

How do you value time versus money? Let’s first understand a crucial difference between them: As a personal commodity, money is extremely elastic, in that you can theoretically accumulate an infinite amount of it. Time, by contrast, is intrinsically inelastic: You cannot accumulate more of it and you’ve never had any less of it. You and I, we get the same amount of minutes & hours in every day of our life. So, shouldn’t an hour be much more valuable than a dollar ? Yet we consistently behave as if the opposite were true. For example: Would you accept a...

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These are the skills to stay employable tomorrow

To grow your nest-egg you can earn more or invest more. Wherever you look there are reports on robots taking our jobs. Are you a bit scared of AI and robots yet? When my generation entered the workforce in the early 1990s we were scared too. Scared that PCs in offices and those humongous productivity gains anticipated from them would take our jobs away. Did we lose our jobs? No, we just had to stay adaptable, upgrade our skills and move on to higher value-add jobs. FACT: There is no stopping the progress. Whoever is prepared to follow progress...

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Does Indecision Bias spoil it for you too?

I had a sobering meeting with a former colleague from work. We had not met for years. But I vividly remember him making a commitment at the end of our previous coffee chat in 2016 or was it 2017 that he would start a regular savings plan into a few ETFs right away. Well, he did not do it right away. He actually did not do it at all! When I asked him why, he mumbled something like, “I used to be indecisive. Now I am not sure.” Yeah, right. I get it. Choice is hard. When faced with...

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Does Indecision Bias spoil it for you too?

I had a sobering meeting with a former colleague from work. We had not met for years. But I vividly remember him making a commitment at the end of our previous coffee chat in 2016 or was it 2017 that he would start a regular savings plan into a few ETFs right away. Well, he did not do it right away. He actually did not do it at all! When I asked him why, he mumbled something like, “I used to be indecisive. Now I am not sure.” Yeah, right. I get it. Choice is hard. When faced with...

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Are you invested in Africa?

This will have some long-term implications. Source: The Visual Capitalist As a rational optimist, I do believe that the vast majority of the 7.6 billion people in this world wake up each morning to build a better life for themselves. The younger they are the stronger that desire. This desire will fuel economic growth. Countries with younger demographics will have a higher chance of above-average economic growth. Older people simply do not consume as much as younger people (with the exception of healthcare services). Where is Singapore in all of this? Our median age is 41.7 years. https://www.population.sg/ So,...

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