Author: Taking Care Of My Own Business

ME Pte. Ltd.

Warning – very egotistical post ahead with nothing new, but stuff you knew already. The other day Rolf Suey dropped a fitting comment to my post  “Is having more money important to make you happier? Let’s put it into perspective” He quipped “after you are flush with cash, u want even higher authority so that u want to be become a president!” My response was “Yeah, president of my ME Pte. Ltd.” Why did I write that? Paradigm shift: In this information age our most valuable asset is our earning ability.  Lifelong learning is compulsory to stay employable.  We...

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Is having more money important to make you happier? Let’s put it into perspective

Would knowing that you are among the TOP 1% earners in the world make you happy? How much does one need to earn to be among the TOP 1% of the world? US$ 34,000 or about S$ 45,000 per year. Only so little? Yes! Don’t you feel much happier already?  After all, often it only depends on the perspective on life you take to feel grateful and happy! Still have doubts that this could be true? Source: World Bank economist Branko Milanovic “The Haves and the Have-Nots” (2010).  Ok, that is a bit old data.  But I reckon the...

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Three of the hardest words in the world to say …

I don’t know. The human refusal to say “I don’t know” has huge consequences, for example, not getting good returns from your investments in the stock market, because there is a strong correlation between knowledge and humility.  As such, the best investors are those who realize how little they know. Don’t be one of those people who spend 10 minutes on Google studying, for example, monetary policy and then think they have it all figured out, while people with Ph.D.s and decades of experience throw up their hands in frustration.  Because the more you study economics, the more you realize how little you know about it. Billionaire investor Ray Dalio...

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Greed or need?

A few days back I wrote about “Am I saving enough?” Thank you for all your comments.  I am just afraid that those people with their benchmark savings ratios are not really representative of the regular guys. Could it be that those who do save much less right now did not dare to comment at all? And would you consider those with more than 50% savings as “greedy for retirement”? The harsh truth is that the most important drivers in the growth of your assets are how much you save and – above all else – time.  And saving requires...

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Am I saving enough?

Quick question: Would it be easier for you to save 20% of your monthly income, or to live on 80% of your monthly income? In case you answered, “Save 20%,”  you are just average (sorry for being so blunt) and might be suffering from the Loss Aversion Bias. In case you answered, “Live on 80%,” you belong to the vast majority of people who took part in that survey. In case you answered, “Neither,” it is time for you to crack your head and find ways to save more for retirement. In case you answered, “Hold on, both options are exactly the same,” you are...

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The Backfire Effect

We all have a preferential set of intuitions, feelings, and ideas. Less poetically characterized by the term “bias”. These little quirks in our thinking pose a challenge to our ability to weigh evidence accurately to arrive at truth.  Bias is that fat thumb that experience puts on the scale. Bias is an intuition – a sensitivity, a receptiveness – that acts as a lens or filter on all our perceptions. As it happens we have at our disposal an immeasurable assortment of biases, and their combination in each of us is as unique as a fingerprint.  These biases mediate...

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Who is weird?

The other day I met some new people.  After exchanging the usual conversational stuff we got to the big question: “What do you do?’ I described in vivid pictures how I have been taking care of my own business, my early ‘retirement’ from corporate duty and my goal to finance all my expenses from dividends and capital appreciation of my investment and trading portfolios. I got that look from them that said “you are weird”.  Their message was clearly heard even though there were no words uttered accompanying their looks (they were so polite).  They – however – quickly...

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The Well-Travelled Road Bias

Nowadays I am a bit more on the road visiting prospects to share with them those benefits my value-add-products could deliver to their operations.  As such I come across this common experience for motorists more frequently: I am driving somewhere new and I am running a tad late. As I drive down unfamiliar roads it seems that everything is conspiring against me: other cars, the road-layout, the traffic lights and even suicidal scooters on their physics-defying machines. I know it’s only a few more kilometers, but it seems to be taking forever.  Too lo-o-o-ng.  Way too lo-o-o-o-o-ng. What’s going...

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8 Truths I do like to remind myself of

Busy schedules and weekly routines have a tendency to put my brain on autopilot and I lose sight of the important things in life. Some of life’s essential truths need repeating.  So, I’d better write them down: MY SELF-WORTH MUST COME FROM WITHIN When our sense of pleasure and satisfaction are derived from comparing ourselves to others, we are no longer the master of our own destiny.  When we feel good about something that we’ve done, we must not allow anyone’s opinions to take that away from us.  Make myself feel proud. While it’s impossible to turn off my...

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It happened again – Self-enhancing transmission bias

I caught myself again yesterday.  I was having coffee with an ex-colleague of mine.  Back from the phase in my life when I was doing my ‘corporate duty’.  I do like to occasionally check in with my ex-colleagues to see whether the corporate life has improved since I had left three years ago.  And it … But I am digressing. Anyway, my colleague asked me how my life as an investor (and occasional trader) is going.  Absentmindedly I shared some of my successful trades.  And that was it! I only shared my wins and did not mention any of...

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How I learned about the stock markets – going way back in time

The other day I was reminiscing about two epiphanies that influenced my choices in life. So back in those days I wanted to be independent.  And I figured the best means to independence is money.  Not for the sake of being rich.  I don’t have to be rich but, rather, independent. During my juvenile-delinquency-days back in Germany there was a prominent stock market guru who influenced my first steps into the stock markets. His name was André Kostolany. Anybody heard of this chap before?  I guess he is not so well known in the English speaking world as most...

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How I learned to mind my own business

Some of my loyal readers – ok, make that two – asked me at what age I started to mind my own business and to actively take care of my own business. Here is how it all started: Well, that’s not really how it happened. This is what happened: I experienced two epiphanies in my early stages of my professional life. The first one occurred in my mid twenties. My boss, who I looked up to because of his strong job dedication, disclosed to me that he got retrenched.  His position was ‘made redundant’.  I could see the huge...

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Why ETFs are a good tool to slaughter some of our biases

Being biased brings with it that we don’t think like we think we think.  We make illogical decisions. Passive index fund investing via a Regular Savings Plan or Dollar-Cost-Averaging is logically right, right? But emotionally and in terms of common sense, it often feels wrong. I do believe it’s worth remembering now and then just how strange it actually is.  I get this feeling particularly when trying to persuade others to the cause during the recent market downturn. Perhaps it’s also worth feeling just a smidgen of pride at circumventing your human emotions and apparent common sense to make...

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How much does money matter to you?

There is no denying the fact that our lives are determined by our unconscious beliefs about money. So what do you really believe when it comes to money? I am convinced that discovering and exploring your general attitude towards money is an essential step in improving your financial health. And to help all of us in that challenging self-awareness process the profession of psychologists comes to our rescue.  They are experts in creating simple tests which provide deep answers.  Ok, I am a tiny bit sarcastic here.  Nevertheless taking those tests is always a helpful step towards  self-awareness. I...

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The Ostrich Effect

I initially wanted to put off writing about this fallacy, but I cannot avoid it. Psychologists use this term to describe the decision to ignore dangerous or negative information by “burying” one’s head in the sand—like an ostrich—and hoping it would disappear. The ostrich effect is one of the most ominous of fallacies, since it is the belief that things can be kept static by inaction. But making errors about the inside of our head does not change what is inside it. Everything is in motion.  Change is the law.  Stability and consistency are illusions.  When we want things to stay the same, we will...

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