Fire and forget...the past will haunt you one day

I knew about Chartered semi conductors's delisting procedure since last year, when it was splashed across the newspaper. I did not think much of it until this week, where I learned that my parents actually had 1 lot of it bought @ 14? Why the question mark? It's because they did not know how much they had bought it since it was so long ago.

Since Sept 09, they had a lot of corporate activities. First a 27 rights for every 10 shares held. Then immediately after the rights, a share consolidation where every 10 shares will be reduced to 1 share. I just know that after all the activities, the initial 1000 shares turned into 300 shares (I do not know how come, but since my parent's can't be bothered, I'm also not bothered. Anyway, too late to do anything now). Finally, there is a cash offer to delist it at $2.66 per share.

The key point here is that an investment of $14k turned into $800. It's just plain negligence if you asked me.

The lessons are:

1. The market is not your mother. She is not here to give you milk but is here to milk you if you're not capable of it.

2. If you do not have any interest in stocks and shares nor is capable of updating yourself with market/business news, then it's better not to be greedy over the potential higher gains of having an equity position. It's wiser to be fearful over the potential losses of having an equity position.

3. Do not trust others to do the job for you. Others might not have the same purpose as you in investing. It's infinitely better to be in a position to make your own decision when the time calls for it.

4. Buy and forget is just plain stupid. You can quote people saying that the market will trend upwards. Yes, but did they also mention they are talking about market index, where the bad companies are weeded out and replaced by better companies constantly? If you're buying individual companies, you better buy and watch constantly, lest the pot of honey is stolen right under your very nose.



I always find the idea of Winnie the pooh dipping his paws into a pot of honey very fascinating. I wonder whose honey Winnie the BEAR had stolen it from. The bees? Imagine the bees cursing and swearing at this giant bear stealing their hard earned honey.

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Consolidation period in my life

The market mirrors life.

Recently, I felt a consolidation in my life. What do I mean by that? In market terms, it means that the prices fluctuate around a range while the fight between the bulls and bears continue. Whilst the two forces are fighting, the prices reflect the impasse created, so it neither moves up decisively, or down.

In my life, consolidation just means that I spend a lot of time waiting. Calls go unanswered, sms takes a very long time to reply, a lot of last minute cancellations and last minute re-scheduling. All these are very frustrating to me, because it adds up to the work that I have to do yet it doesn't give me any satisfaction nor monetary rewards. In fact, if I don't do these work, I might be paid even less because unlike most people, if I don't do work, I don't get paid. I hate such periods of consolidation - it's always an exercise in futility.
I remembered a long time ago when I was in a spate of bad luck and was also in depression. I spend quite a long time in the library. It was a quiet place and it's very conducive for me to meditate and reflect upon life and well, basically read myself out of the depression. It was there that I chanced upon a bookmark that basically lifted me out of the blues. It's one of those magnetic strips folded in half, so that when both magnetic strips sandwich a page, it is secured and serves as a bookmark. I found it inside a book whose title I had long forgotten. Out of so many shelves of books in the library, I had to find one with the bookmark with such a meaningful inscription on it.

The inscription on the bookmark reads, "Good courage breaks bad luck".

Time just froze when I read that. I knew life would not be the same again after this. These five words mean a lot to me and I always remember them when I'm feeling down. By not giving up and fighting harder, there's only one way to go after the consolidation period is over - up.

I still carry the bookmark whenever I go.

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Disability income

I thought I know all about the disadvantages of being a full time tutor. Till yesterday that is. I had been toying with the idea of getting a disability income protection plan to cover some loopholes in my armor. Basically, the plan is to cover the scenario when I'm disabled (partially or totally) and I'm unable to carry on with my job. The plan will pay me a monthly benefit, after a deferred period of 3 months or 6 months, for a period of years.

Thus, the premium for such a policy is a function of

1) Monthly benefit, if you hit the definition
2) Deferred period before you can start getting the monthly benefit
3) The period of time that they will give you the monthly benefit
4) Age, male/female, smoker/non-smoker

There's still one more factor in this, which is the raison de entre for this post.

5) Occupation

The actual premium paid just by changing the occupation is so ridiculous that I might consider substitute products instead of this policy. Let me share some numbers:

For a 3k monthly benefit, with 3 months deferred period, 33 yrs old non-smoking male, payment period of 22 yrs until the age of 55,

My premium as a private tutor is $1.2k per year.
My premium as an admin assistant is $350 per year
My premium as an actor is nil - I can't be covered.
My premium as a teacher is $500 per year
My premium as an accountant is $300 per year.

Hello? 1.2k per year can probably get me a whole life of 50k sum assured. Or maybe a 400k term plan. Why am I paying 2-3 times more than others because of my job? I seriously overlooked the fact that your occupation is so important.

This also means that if you already have a disability income policy, you better be careful when you changed your job. The premiums vary so much as a function of the occupation.

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Reality check

I'm going to get a resale flat soon. Let's work out some details and see if I need to quicken my savings or I've enough.

Supposing I am getting a 4 room hdb. The going rate now is 400k, which includes like 30k COV. Let's put it as 450k market rate with COV of 50k. Since I'm a first time applicant and I'm going to find a flat that is near my parents, there will be a grant of 40k, which is deposited to the CPF so that I can use it to pay for deposit or the down payment . I've to pay a 10% down payment of the resale price or the value of the price, whichever is lower. So 10% of the value (450k - 50k COV = 400k value) is 40k. Of this 40k, 20k can be paid using combined CPF or cash, in whatever combination since I'm taking hdb loan. I'll pay all using CPF in that case. I still need to pay some nonsense like options and what fees...just put it as $7k. I also need to pay the housing agent commission of 1%, which is $4.5k.

To put it clearly,

Value of flat = 400k
COV = 50k
Total amt of CPF + grant of 40k = 60k (combined cpf is only 20k, so plus 40k grant is 60k)
Down payment using CPF = 40k
Nonsense fees (cash) = 7k
Housing agent commission (cash) = 4.5k




Then there is the stamp duty to worry about. Based on the selling price or the market value, whichever is higher, the first 180k is $1 per $100. The next 180k is $2 per $100 and thereafter is $3 per $100. Since I assume the selling price is 450k,

First 180k = $1800
Next 180k = $3600
Last 90k = $2700

Total = $8,100 in cash or using CPF.Thankfully this can be paid with grants or CPF. What the hell am I paying stamp duty for?

Let's tally up the figures:

Amt of cpf that is going to be wiped out
= Stamp duty + down payment
= 8,100 + 40,000
= $48,100

Amt of cash needed
= Cov + nonsense fee + commission for agent
= 50k + 7k + 4.5k
= $61,500

This is frightening. Did I calculate something wrongly? I've already saved 50k last year. I wanted to save 45k this year only, but it looks like I'll have to go all out again. 'Looks' like? I think I'm already going all out!!

Wedding preparation:
Package - 3.5k
Rings - 4k
Dinner - 17k
Total: 30k

Renovation + furniture:
Total :50k

Estimated sum = 60k + 30k + 50 k = 140k!


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Pat helped me put up this. Million thanks to him. I better stick to my figures rather than HDB. $1.4 k per month burden to shoulder. $1.4k... Nobody is going to take pity on me, hence I will have to make it alone. THAT alone is reason enough for me to succeed.




I still want to maintain my savings of 50k a year, say 4.5k per month. Let's do a quick calculation:

On a per month basis,
Personal expenses: 2.5k
Housing payment: 1.4k
Savings: 4.5k
Expenses from living away from parents: 2k

Total = $11,000.

Hey ho, let's go!

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Ideally, it's better to be practical

When I was young and idealistic, I wanted to follow my passion. I believed that if one follows passion, he will do very well in his area of interest and thus the money will be the 'side-effect', the toppings on an ice-cream. However, as I grew older, I realised this is not to be.

Many people are trapped in doing the things that they do not like. However sucky that prospect of dragging yourself to work, the job does pay for the bills and the comforts that money can bring. Yet others are trapped in doing things that they loved and are deeply passionate about, but the reality is that these jobs do not bring back enough to feed himself and his noble ambitions. What good is passion when you know that the moment you stop working, you will quickly run out of the favours that money can buy you.

'Tis sad, isn't it? A childhood ideal turned awry and sour like leftover milk. I will give two real life examples to show the trappings of being realistic and being idealistic:


1. I've the fortune to teach a national golfer. When given the chance to turn pro, she declined firmly even though she is good in it and obviously passionate about it. I did not ask her about her decision yet somehow, from the conversations that we had, I had an inkling. It's just not practical to be a professional golfer in Singapore, thus it's better to cut the losses and move on to the 'real' business of earning a living.

It saddens me to hear of such cases. But is it not wise to do so now, rather than much later? I have no answers.


2. He went to Wharton to study an MBA, taking a loan equivalent to that of a HDB flat. Upon returning, the debts are all paid within a year. However, all is not well. The fiery ambitions to be a high flying banker had all but evaporated, leaving a certification and an experience of a lifetime to show for. He switched career because he realised that this is not what he wanted, and is now trying to earn a living as an in-house trader. 12k per month (perhaps with a few months worth of bonuses) is the opportunity cost of following passion.

As for now, I heard he's doing so-so in his career. I wonder if he'll regret his decisions. No matter how shitty it is, I'll bite my teeth and shoulder the burden for at least 5 yrs. After that, I would have earned the right to do what I wanted to do. I know, it's easy for me to say because I'm not the one who had to endure the many impossibilities at work. If I'm truly in his shoes, would I have done as he did?

I've no answers too.



I do, however, have a way to deal with the romantic allure of following passion and the cold hard practicality of following money.

If you're not passionate about an area that can bring you enough monetary rewards, then forget passion. Dread the work but work hard nevertheless. The grinding will come to an end if you save a portion of what you earn and put them into trustworthy and safe investments. No bad things will carry on indefinitely and with this passive income stream, you can really do what you are meant to do. Thus, go and follow your passions as it is the right of every person to do so. And without guilt.

If you're passionate about something that can bring you money, then good for you because you must be one of the lucky few that can marry the wishes of the heart and the wallet. For you, I have no advice. You will enjoy the bountiful things that money can buy yet your work feels like no work.

Most fortuitous, I say.

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Saving money during NSF days

It's good to talk to people. When you do, you learn more about the broader world and you'll realise perhaps your own problem is not so unique and is small compared to others. Everyone has a story to tell. After reflecting upon them and consolidating them, I'm all ready to blog about it.

This time, I heard about this young chap who is still in national service. The spending habit is quite horrendous actually, because he admitted that he spends around 90% of his pay. I don't know what's the NSF pay these days, perhaps $600? That's quite a good amount, if one plans something about it. The excuse for not saving now is that the pay is too little, so there's no point in saving small amounts like $50 or so.

So the conversation goes on and he was asked whether he would save if he starts earning a more healthier pay check - like $2000 or $3000? He said yes, maybe. Upon probing further, the 'maybe' is because he might be buying a car or a motorbike upon reaching that amount. In other words, if you're not saving when you're earning peanuts, you also won't save when you're earning big bucks. What will change when you earn more? Nothing, if you don't change yourself.

Is this representative of the younger generations? I've a feeling it is. Good for the economy, bad for themselves.


I came from the days when national service had to be done in 2.5 years. I remembered that the maximum pay I got was around $360, and that's when I'm a few months away from ORD. I did not take pocket money from my parents upon entering army, it's not right. In fact, I even give them money. As for the exact amount, my memory fails me - I think it's either $50 to $100. I spent little myself because when you book out on sat afternoon and had to book in on Sunday night, the last thing I want to do is to go out. I also don't have a habit of going to the canteen. So maybe I spend like $100 a month? I only allow myself to spend part of my 'bonuses' like IPPT and marksmen award. The rest I saved it.

Let's tally the figures:

Pay: $360
Parents: $100
Own expenses: $100

Amount saved: $160 each month
Over 2.5 yrs = $4800

A little goes a long way, my friends. If you are not going to save a part of your income, not matter how tiny, you're not going to cultivate that habit of saving more when your income grows bigger.

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Dr Elder's "Trading for a Living" Seminar

I went for Dr Elder's seminar yesterday. It was a very early Sunday morning and I zombied my way there around 830am for the course, which is to last until 5pm.

I had read most of his books and had initially thought that paying to hear him talk about what I had known is just a complete waste of time. But I am glad that I went afterall, because there are little details that had to be spoken to, rather than read, in order to really understand. I should have known that, having worked in my line for so long. If everyone just reads from the textbook, then what is my value? It's the interaction between the audience and the speaker that makes all the difference. The subtle cue, the uncomfortable shifts, the sparkle in the eyes - all these and more will tell the speaker a message, whether to talk more about this, or say less of that. A textbook does none of this.

What I like about the seminar:

1. It's a good refresher course for me. The seminar made me want to review a few concepts again by re-reading the books. I'll do some again this year. I think some books I just have to re-read every single year.

2. He shared a few books with us (which I dutifully copied the title and author). I love people who share their book list. Show me the books that a person reads (or not read) and I can tell you what kind of person he is.

3. There is this indicator about impulse system, which cannot be found in chart nexus. I've re-read countless times but I just cannot remember. All he did is to flash it once and now it's stuck. Great :)

4. He shared how he kept his records. I was totally impressed. I will do something about my own records too. If after the seminar, nothing is changed, then I would have wasted both time and money on this seminar.

5. The interesting thing is that if you replace the word 'trading' by 'living', the advice given are equally applicable. There are certain universal truths about life that can be found in other seemingly unrelated fields.

6. These are actually points not pertaining to the seminar but are equally important, so I'll consolidate them into one. At the end of the day, I might not remember everything in the seminar, but I certainly will remember the experience.

a. Great company. I went with a couple of cbox friends, met someone I knew from investideas too. All in all, it's like going to a concert together with friends.

b. Did I mention we had a beer break during lunch...fantastic

c. The whole idea of sitting in a lecture room with many others is so nostalgic.


What I don't like about the seminar:

1. The price of the seminar is almost the price of all his books. If you don't know anything about the man, I would suggest go buy all his books. It's better value for money.

2. It's a touch and go session, which is only natural, given the time allowance for the seminar. Actually the more useful session would be how he is going to do a live trading session on a market day and observe how he does his magic. I can't attend that, unfortunately.

3. He sped through most of the stuff before lunch, so he gave us two options - first is to have a beer party and chit chat, second is to look at examples of charts. The person in charge didn't even ask for a democratic show of hands who is going for option 1 or 2 and decided 'of course' we'll go for option 2. Boo, he has no life at all.

It'll be much more fun to go for the beer party.

4. I'm not sure this is a bad point. The books which they are selling at a discount at the seminar are not that cheap. It's cheaper to go to berkshire business books and buy from them. Free delivery too, given the price of the books. But of course, there's no autograph by the man himself. I don't think I need his autograph at all. This is not a bad point because I'm glad I didn't buy at the seminar.


Here's something interesting. I'm sitting right at the front row, so I get to observe him really closely throughout the seminar. That was a particular part where he mentioned his first book, Trading for a Living, is probably his best selling book. I noticed that he used his right hand to scratch his left ear, just momentarily, while he saying that line. He didn't scratch it after that.

I leave it to your interpretation :)

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Builders and destroyers

I'm always a big fan of this site : Wulffmorgenthaler. The humor is not slapstick but it slowly grows on you. I like the site's style of tragicomedy.

A few days ago, I came upon this strip from the same site, which I've cut and paste liberally. It looked like this:




How apt, isn't it? I always believed that in this world, there are two types of people - builders and destroyers. Builders have the harder life of starting things from scratch, so that other people can enjoy the fruits of their labor. Destroyers are those people who enjoy the fruits grown by others. But these are just extreme stereotypes - most people fall in between these.

I've seen parents who are on the left, shown in the picture. These parents give their kids a good head start in life, so that they can see further by standing on the shoulders of giants that came before them. Good for the kids, bad for the parents, financially. I will strive to be this kind of parents, though not entirely so. I'm willing to take the shit needed to put the kids in a good head start, but they must also be willing to take shit themselves. There is value in doing shit work - and thus the kid have to learn the lessons themselves.

I've also seen parents who are on the right. My limited life experience tells me that there are more such parents than those on the left. I'll share one example here.

J has a elder sister, so her parents have two kids in total. Since the elder sister already married 'out', while J is still single, she is 'more' responsible for taking care of her parents' financial needs. (I quote certain words because I can never agree to them!!) J's dad stopped work as soon as the youngest child, J, started work after her graduation in a local university. They do not have much savings, much less insurance, and they demand a good amount of pocket money from her kids. Since J's elder sister has a family, J, being single, has to shoulder a heavier burden. This is quite unfair isn't it? J cannot save up for herself because she has to support two irresponsible parents (sorry, but I simply cannot find a better term), and she don't even dare to get married because the financial burden is just too much for her to handle.

When I saw the comic strip above, I immediately thought of J's situation.

It's one thing not to take care of yourself, but another if you are a liability to others, especially your own kids. It's extremely frustrating to cover 3 generations of people and take care of their needs. Which are the 3 generations?

1. Cover your parents' needs
2. Cover yourself and your spouse's retirement needs
3. Cover your kids' needs

Money is a limited resource, so which one is the priority? Most likely for me, it's 2, 1, then 3, in that particular order of importance. What to do, I'm a builder. Thus I'll have to work harder in my time for others to enjoy.

Just bring a bottle of wine next time I whine.

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Choose the right marriage partner

** "BIAS" is a special feature in my blog where I get to say whatever I want with scant regards for your feelings. I'm not politically correct in this feature, so go ahead, judge me."



I was flipping through one of Napoleon Hill's books when I saw that one of the pointers to achieve success is to find the right partner. How true! It is important to get the right partner to achieve success, otherwise the journey to success will be made extraordinary difficult. I share with you two true stories of people who seemingly found the wrong partner.


1. A pHd research scholar thought he found a perfect partner. Her partner works in a financial institution, from a well to do family too. They got married last year. However, shortly after marriage, the wife got retrenched. The funny thing is that while the work stops, the spending continues. In fact, she spent even more money - perhaps to fill the void where pride once occupied. She also did not try to look for a job, thinking that her husband would take care of her. Thus, the poor husband will slog at work just to give her a fat allowance to spend. In some months, he had to cut the allowance given to his parents. That's not all, he had to ask money from his parents to tide over certain months.

Recently, the wife asked the husband to give her access to his accounts. A big fight between the guy's family and her wife soon erupted. Who won?

The wife.

Comments: It's hard for a guy to concentrate on work when there is no peace in the family. Haven't they sort out their finances before they got married? If they had talked about certain issues before marriage, this sort of thing wouldn't have happened. Yes, there would be a big fight before marriage - but if all is sorted out there, things would be much smoother in the future.

Some people go through the dating process without doing actual fact finding work - they just enjoy. I can't remember who said this (KK or bro8888) - Open both eyes before marriage, close one eye after marriage. How true.




2. An engineer turned teacher as a mid career switch, drawing a pay of maybe 4k, goes around nightspots for fun. Things got way out of hand when a lady she met got pregnant. That lady is not a local. That guy then went on to marry this lady, thus exacerbating his financial situation.

a. She cannot work here and speaks no Chinese or English, thus it must be a single income family. One would query how the guy can even converse with her and what about the baby? This is Singapore - without the proper introduction into the languages we're going to use in the education system when the baby is young, the baby is going to have a very very sad teenage years.

b. She gave birth to a kid last year. The guy's mum is not happy with her at all because she didn't care much about the baby. In the end, the guy had to shift out, got a 5 room flat and is now paying his ass off.

c. He owns a car for a long long time already, but the loan is still >5 yrs? Why? He keep changing cars every now and then, thus digging and digging deeper into his grave. It's amazing how, by changing cars constantly, you can drive several new cars but none of them are truly yours. Just amazing.

d. Every 2 weeks or so, there'll be a big fight and the wife would carry the baby and go missing for a few days. WTH?

Comments: I wouldn't look for a wife in a nightspot, enough said. Classic case of a trader turned investor because the price went down lower than entry price. I hope his situation can turn for the better.

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SGX chart

For my own reference. Been a while since I posted any charts, so let's kick start this. Seems like a good buy at this circled level. Yield should be 4.3% at that price, pretty reasonable.

A bit heavy for trading though. If I do buy, it'll be another batch to lower down my price. Crystal ball is not working very well and is a bit cloudy. Wait for it to clear up first, then look at weekly to decide.

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10 points on Japanese reits

Confession - I seldom cut and paste entire article from elsewhere just to have an article. But I really thought this is a good piece on Japanese reits. This article came from this site, which I liberally copied and pasted into this article. I give full credit to the author and shame on me for copying it here. Whatever lah.

This is purely for my own reference.

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Japanese real estate prices have had a terrible time over the past two decades. In fact, the market experienced a run where property prices fell for sixteen years in a row despite the government trying desperately to reverse the trend and get people to invest.

Now in many countries, real estate booms have created millionaires in a very short space of time. Some of these local booms have run out of steam – others, like Japan, could be on the very verge of starting a staggering up-trend.

The reason that investors are safer to break into the Japanese real estate market via REIT’s is that they are a safer and more convenient form of Japanese property investment for profits. Non Japanese investors directly looking to invest in Japanese real estate would face significant hurdles presented by law, logistical difficulties in viewing properties and linguistic challenges in communication. Instead REITs are fairly liquid investments that enable a non Japanese investor to own a stake in Japanese real estate including commercial and residential property, industrial structures, shopping complexes and hotels.


The argument in favour of stepping into Japanese REITs are as follows:

1. The Japanese real estate market has performed awfully over the past 15 years. This is a classic example of a market that has fallen to lows and now reversing as property prices have recently began to buck this downward trend.

2. Interest rates in Japan are extremely low, and the Japanese public are fairly cash rich compared to their debt ridden counterparts in UK and USA. Usually, low interest rates causes an eventual boom in house prices as people generally buy property when they can afford to service the debt.

3. The Japanese government has been trying to kick-start Japanese real estate for some time. They have kept mortgage rates extremely low. In fact, longer term mortgages in Japan can be fixed at about 2% to 3%. Astoundingly, Japan real estate prices continued it’s downward spiral even as the government slashed short term interest rates to 0% (a level which it kept for six years). Such was the level of mistrust by the Japanese towards real estate as an investment.

4. Real Estate Investment Trusts are potentially better than stocks because the companies that operate them are entitled to specific tax benefits, and according to law REITs must give investors their earnings. In fact, Japanese REITs are exempt from corporation taxes as long as they pay out over 90% of their profits to shareholders in the form of dividends.

5. If (as many experts predict) the yen strengthens against the US dollar, it could prove useful as a good hedge.

6. Japanese REITs often payout yields of 3% to 4% - a good return given the potential capital gains expected over the next decade.

7. According to general statistics, not only has the price of Japanese real estate started to rise, but it is thought that there has been an 80% increase in the number of investors looking to purchase real estate with the expectation of future profits.

While Japanese REITs are becoming fairly established, and there has already been some appreciation from them it could be just the beginning of a very long story if we really are seeing the beginning of an upturn in the Japanese real estate market.




What about the drawbacks of Japanese REITs? Here are some of the factors that you should keep in mind before stepping in:

1. While it’s generally thought that the incredibly depressing bear market in the Japanese real estate market has now turned, there is always a certain element of risk and unpredictability in any investment. You can never call the top or bottom of any market.

2. As more global investors and funds understand the potential of the Japanese real estate scene there will be an increase in the number of REITs and foreign investment into Japanese property. This could inflate the price of the REIT market in general and the investor should keep in mind the amount paid for the REIT share against the net value of cash & properties per share. Do not get sucked into paying too high a premium.

3. Any future interest rate rises imposed by the Japanese government could have a negative effect on the value of REITs.

All in all, the underlying potential of owning Japanese REITs is exciting because if, as expected, the Japanese real estate market does go on a bull run over the next decade, holders of these REITs will benefit significantly from their ownership.

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Unstable income stream from tutoring

I've got more things to share regarding my career. Frankly, it's personal ranting too for the pent up frustrations. This post is about the instability of the income stream. For those of you who is used to getting a fixed pay, well, this will be something you won't be used to. I'm going to show you something rather personal. I was debating with myself whether to put it, but heck lah. I'll just remove some numbers and some lines.




You can see my income from tuition, starting from 2003 to present. From a look, you can observe that the income per month varies widely - from a low in November-January to a peak in August-October.

November to January is a lull period. Exams are over and the students are overseas for holidays. Perhaps you're also going on a holiday yourself too. Usually I'll give myself a break and really shake leg for a few months to recuperate for the next year. January is also the Chinese new year period, so a lot of cancellations and delays will be met. In the past, I hate this period of time because parents will nag at me for staying at home for the entire day for some days of the month. It feels like I'm not working.

These days, I can't wait for my lull period. What a big change in attitude.




August-October is the peak month because this period is the crucial preparation period for several major exams. I'll have absolutely no life during this period. 'Tis the life of a tutor - you wait to rush and you rush to wait.

How to remedy this? Get a variety of students from different levels to even out your peak periods. Imagine if you take all 20 sec 4 students who are taking O'lvls. I can assure you that you'll eat grass from November to January.

Having an unstable income stream also means that when you are earning more, don't be trigger happy and spend your money all away. This is meant to even out your bad months, so keep saving up. The idea that, in this line of work, there are very good months and very bad months is extremely crucial, so I cannot stress enough of it. Do not eat all your fruits when there's a good harvest this year; next year there might be a drought.

Is a stable income so much to be desired? My standard reply for questions on the unstable income of a full time tutor is this - I'll rather have a unstable and high (average) income than a stable but low fixed income. I don't see how stable it is when your pay and your longevity in the job is determined by others.


(Grey commented that the life of a tutor and a professional trader is quite the same. I couldn't agree more, though I must add that the success rate of being a tutor is much higher than that of pro trader. There are no bad professional traders because they will be out of the game in no time. In contrast, there are plenty of bad tutors out there. I welcome them with open arms ('tis my honest opinion with no bad intent) - without bad ones to compare, the good ones cannot shine through. I'm sure Grey, you'll agree with me.)

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The other side of being a tutor

Seems like quite a few folks here are interested to become a full time tutor. Having been in this line for close to 7 yrs, I think I'll have something worthy to contribute to them, so I shall.

I've written extensively about the prospects of being in this business in my past post, so I won't repeat the points already mentioned. Instead, in this post, I shall try to talk about the other aspects of being a self employed, specifically as a tutor.

Here's the bad parts:

1. You don't get paid if you're not working. The relationship between time and money cannot be clearer in this line. I know exactly how much my time is worth and how much a LV bag costs me in terms of hours.


2. You don't get employer's contribution to CPF and you are not forced to contribute to your CPF, though medisave liabilities is still a must by law. This is the biggest bugbear for most people, including me (initially).


3. You don't get paid annual leave, no MC, no bonuses, no company annual dinner and basically whatever represents corporate life. You earn your own bonuses by working harder, and pay your own dinner and take your own unpaid leave.


4. No recognition in terms of corporate ladder. When I go for social gatherings, and people asked me what I do for a living, I get a blank stare after telling them. They will then try to:

a. say something about the job being very good because there's no need to pay tax (rubbish)

b. say something about the job having no cpf (not rubbish)

c. say something about the stability and ask when you are going to get a stable job

People don't know what to tell you after you've told them about your job. Is that a problem for you?


5. Parents/relatives/spouses get nag at you for not finding a stable job, especially if you're a graduate. My parents still can't come to grips with me getting this unstable job, but I think my impenetrable stone face made them give up on asking already. The stress to conform to normality will force a number of you to give up.


6. You're not going to have much of a social life because when others are busy, you're the most free. When others are free, you're the most busy.


7. You begin with a zero income, work your way to a peak income toward the end of the year, then on 1st Jan, you restart again. Again and again. Being a tutor, you always have to work as hard for your pay to be the same as your previous year pay and harder still to increase it. In other words, you're retrenched every year and you have to bounce back in the minimum period of time again.



SO what's the trade-off?


The good thing about the job is that:

1. If you're self-driven and determined, don't mind being aloof and different, able to manage your time well, this is the perfect job for you. Not much politics in this line.


2. You plan your own time. If you don't want to work today and feel like taking a break, go ahead. You're your own boss.


3. You decide how much to earn. The calculation is quite simple:

If you charge $250 per month for one student,

You earn $5k by taking 20 students (3 students a day, inclusive sat/sun)
You earn $10k by taking 40 students (6 students a day)


4. You cannot be retrenched. If you take 30 students, you need to be fired 30 times to be truly fired. There is stability in being unstable all the time.




This line is seriously not for anybody. If you don't like it, don't have the discipline, don't have time management, cannot manage your cash flow, then go and be employed. If you are not interested in mingling with young people and be patient teaching them, you'll tear your hair in every lessons you take, nevermind the money.

But if you are truly interested in this, and is as independent as a cat, then look no further - you cannot find a better job more suited for this type of personality.

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Bullythebear T-shirts!

I woke up at 430am with the moon smiling at my face.

I'd this eureka moment where I'm unable to get back to sleep until the thing that bothers me is blogged away. So here I am, typing out an article in the wee hours of Sunday. I like this period of time, because it's extremely quiet and peaceful. If not for the bloody hot weather, I'll say it's quite a good moment to reflect.

Yesterday when I'm at work, I was so bored that I doddled onto the back of my student's worksheet. My camera isn't fantastic, so it looks like this:




(I even have to brighten it up...gosh, I need my camera back)
There's so many things wrong about this picture since it's only a draft, but there's one thing right. It got me thinking how I can make a difference to people.

I've been designing T-shirts for like ages, ever since I was elected as the chairperson in my secondary school in sec 3. Banners, notice board, t-shirts, class flags, publicity materials....you name it, probably I've done it before. Even the ads above the cbox and the header are designed by yours truly. These are some of my works done in university:

This is a publicity material for a camp. Since I'm in civil engineering, I showed a picture of a truss with the caption "It's fun....trusses.". I wonder if people get my joke. Either way, this is the one that is selected for pamphlets to advertise the event.


This one below is the actual T-shirt design. I'm quite surprised to find it actually, after 9 years? My love of cats probably crystallised from there, haha :) Renatus is the theme for the camp.



The point here is that I like to design things. Financial achiever's post on how to make use of talents wisely probably set me thinking how I can do something for others. How about if I design T-shirts for bullythebear and donate the proceeds to charity? It might not be much, but together we can create a ripple that sends lots of good vibes to all :) Besides, here's the advantages of having a t-shirt:


1. We'll be the coolest people in the financial blog segment of Singapore!


2. We can do a bit of charity to help those in need!


3. We can have a common identity during our numerous meet ups!


Worthy goals? I just need a show of hands on who is willing to buy it. I really don't know the price yet. I'm thinking like $30-40 per piece? Of course, if there's more people, it'll can be cheaper and there's more room for negotiation. After covering my costs, I'll just donate the proceeds. I'm not out to make a profit on selling t-shirts.




But let's not worry about the details. Once I see a healthy response of 10-20 people, I'll start designing and you'll see if you like it. We can work out the details on payment, the charity and all the rest once the big picture is settled. I just want to test the response, so even if you say yes under the comments and back out, I'm fine. No obligations really.

Do you want to make a difference? Start the spark within you.

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Daring to dream big

After a night of chatting with AK, who is truly inspirational, thoughts began to come to me until I can formulate a 10 yr plan. This plan occurred to me while I was on my way to work this morning. As a 'big-picture' kind of plan, it must be simple enough for me to be able to work out the sums with just a handphone or mentally, and also simple enough to be able to explain it to someone without that person going 'duh'.

Let me share with you:

The goal of the plan is to be able to stop working when I wish to, that is to reach financial freedom. Since my average monthly expenses is around 2.5k, let's put a good passive income as 3k per month. I thought of 2 plans.

Plan A:

Since I need to get 3k per month, the sum goes like this:

3 k per month x 12 months = 36k per year

If I'm able to invest at 10% yield, I'll need 360k of capital base in order to get 36k of income stream. So the question is how to get that 360k capital base. For simplicity, let's round to 400k. Let's ignore all the complicating compounding and keep it simple. If I'm able to save 50k per year, I'll need 8 yrs of savings to reach that capital base.

10%?? Too much? Let's put it at 8% - which means I need 450k and that will take 9 years. Let's put it as 10 yrs savings at 50k per year.

Summary:

By saving 50k per year for 10 yrs, I'll be able to have a capital base of 500k. Investing this sum at a rate of 7% will get me the required passive income. The good thing about this is that after 10 yrs, I'm 42 years old. This sum of passive income will be a good platform to start building up more passive income. Am I going to stop work at 42? Definitely not - and to hell if I'm going to work as hard as I am now.

However, I was thinking about the feasibility of this plan, knowing how much I worked my ass off to get 50k in 2009. I think moving forward, I should be able to get more by working less. The thought alone makes me rub my hands in glee :) I'm aiming to hit 100k savings in a year, then my 10 yrs plan becomes 5 yrs plan, wahahaha!

The other good thing is that the capital base is not touched at all, so this amount can be used to draw down in case of emergencies, or passed down to future generation.




Plan B:

This is more of a capital drawdown method. I'm 32, and if I stop work at 55, I've another 23 years of working life. If I leave hotel earth at age 85, I've another 30 yrs to live after retirement. Supposing that I need 3k a month after retirement in passive income stream, then I need:

3k/mth x 12 mth/yr x 30 yrs = 1.08 million

Since I've only 23 years of working life, I need to save 47k per year to make up 1.08 million at the end of the period. Let's make it 50k per year. I'm taking the stance of no investment at all, just hard core savings.

Hey, I'm a millionaire (just 23 yrs too early!). Okay, I digress.

How to save 50k per year? I just proved that I can do it, so if necessary, I can repeat this for 23 yrs, albeit by working less. If I save 100k per year, I can half the time needed, making it 12 years.

Summary:

Save 50k a year for 23 years, or save 100k a year for 12 years and I'll be a millionaire. After which, I'll draw down the money till it goes to 0. That's silly right? But the thought that savings alone can achieve this is amazing.



Life being the way it is, means that I'll probably have to employ both methods to achieve my aim. Need some passive for retirement and draw down some from capital base. But that's the fun part, which I'm not so worried. Regardless of the plans laid out, the only part for me to do now is to earn more and save more. The ultimate challenge is to save 100k per year, and to do it consistently for at least 10 yrs, regardless of potential milestones like kids, marriage, housing, medical problems and all the curveballs that life throws at you from time to time.

To put it very simply, the goals are as follows:


1. Save 400k first in 10 years time.

2. Make sure I have 1 million by age 55.

The method of achieving that depends on the situation years down the road. A general idea should suffice for now and the plan should become clearer as time passes. Own time own target, carry on!

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Blogging for a living

Adsense sucks big time.

Yes, you heard it from me alright, loud and clear. Adsense ads are just pure nonsense. First of all, I don't even look at it. I mean who will click on it knowing that most of the ads are rubbish, lead generator kind of site. It dilutes the impact of your blog and seriously, I really think the money sucks. How much can you make from it? If someone made big money from adsense, do let me know in the comments.

If you're serious in monetizing your blog, set up a dedicated ad site, design your ad for others and ask for bids. This way, you get to:

1. Select the people you want to work with, not some behind-the-curtains shady people who provide ads by the keywords of your latest post.

2. Spruce up your site with the ads that you designed, with the colour scheme and right wording to match the overall 'feel' of the blog - the satisfaction is immense.

3. Price the ads yourself - it's your blog, your call, your price, your negotiation.

Nuffnang is different though. I always find their ads quite relevant to the local context (being a Singapore/M'sia venture) and it's definitely more attractive. They give me good money for doing something that I like - blogging. I don't blog because I want to make this a passive source of income. Seriously, unless you're a chio bu or a yan dao guy, it's hard to be a star blogger. I didn't say it's impossible, I'm just saying it's improbable.

So, if you're blogging for a living, may I gently ask you to forget about it? It's an uphill battle. It's certainly not as passive as it sounds like, so might as well go and make bigger buck from your active income.

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Contra trading

Recently I told someone that I contra off a position. That person seemed very shock that I do such risky things. Maybe that person had read many newspaper reports of students contra-ing and making big gains and eventually bigger losses.

Contra need not be risky. I put it in my newbie's faq a long long time ago about the topic on contra. Basically contra means doing a round trip of buy and sell before T+3. This means that you can buy a stock without putting in any money, then proceed to sell it off by the settlement date of T+3, thereby profiting from the proceeds.




Sounds good right? It's hard enough to get into a counter before it moves up, let alone restrict it to a time limit of 3 days. This foolish game will be made even more deadly if you buy more than what you can afford. For example, if you own $5000 but you bought $10,000 worth of shares with the hope of contra-ing within the next 3 days, you better be a very sharp trader. Otherwise, you have to sell $5000 worth of shares because you can only afford half of what you bought.

Usually contra players are also breakout traders. The explosive moves associated with breakouts is suitable for the very tight time limit for contra trading. Please don't try this if you're not up to it - it's a quick way to lose your pants. How do I know? I've contra-ed HSI warrants before, to the tune of 20-30 lots each time. I won't do it again, it's too stressful and exciting for me now. But I've NEVER bought something with money that I did not have. If I've 5k in my account, I would buy at most 5k worth of shares, never more.

So is contra risky? Yes of course. But for my recent trade, I happened to buy and sell something within 3 days. I didn't plan to sell it in that short period of time and most importantly, I've the means to hold it longer than the contra period.

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How spending less results in saving less

I noticed a real significant change in me.

Since the start of the year, I'd been having a real shift in how I view money. It's very very stark to me because I realised how much I've shortchanged my life till now. In the past, I was quite focused on the amount of money that I had in my bank. Somehow that meant security to me - so perhaps that's why I kept hoarding money and trying all I could to increase security.

It took me a long long time to change that view. The proverbial straw that broke the camel's back must be the reservist stint that I had recently in Jan this year. After I came out of it, I felt very enlightened. It could be the change of environment that made caused this shift in me, but nevertheless, I came out feeling very happy.

In the past, I used to care more about expenses. I would do all I can to reduce it. These days, I care more about increasing my earnings. I would gladly spend money for the following reasons:


1. It makes me happy

2. It goes towards furthering my goals and purpose

3. It saves me time

4. It fosters relationships and forms new experiences


I starting spending more money and feeling all the more happier because of it. My mindset used to be that I have limited money so every money spent must be scrutinized carefully. If it's not a need, delay it. Wait a few years or a few months then decide again. I missed a few opportunities because of this mindset (the guitar that i wanted is no longer sold; a memorable figurine that I wanted is gone too). I reflected and think about the whole host of opportunities that could have gone if I keep on doing this and realised that this is not the way to go ahead in life. My life must not end with me in regret.

Cheapskate mentality MUST be removed in order to go further in life. I do not want to save a penny to lose a dollar. In fact, I want to spend a penny now so that I can earn many times in the future.

The most interesting thing is this: Even though I spend more money, making myself and the people around me more happy, I actually save more too. It's amazing how the universe works. Freeing myself from the limited money mentality frees me to earn even more. Perhaps it's because I feel happier and that translates into more productive work and on and on. Seriously, I don't care how and why it works.

All this will not happen without valuing your time well. Know the value of your time and you will stop doing a lot of nonsense things and move aggressively into things that you value most. We all come into this world with an unknown expiration date - so make the best use out of it.

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Poetic interpretation of capital allocation

I'm reading a queer book on poems - Christopher Matthew's "Now we are Sixty (And a bit)". This particular one is especially striking to me:

Timothy wakes up at twenty to three-
Nips to the bathroom, has a quick pee.
Coughs, yawn, feels a bit queer-
Goes to the kitchen: thinks 'Why am I here?"

I think it pays to write down the reason for wanting to get a stock, lest you forget. Humans have short term memory. A little encouragement, a little discouragement, a dash of good mood, a pinch of unhappiness makes one forget the reason for wanting to get into a counter. The worst kind of mixed up is when you wanted to do trading but when the price turns against you, you start to adopt an investing mindset.




I think what KK says is right, have an x,y,z mindset. Split up your capital, put some into yield, some into growth and some into speculation. The devil lies in the details - how many % to put into x, y and z? Well, it depends on the type of person you are. Investing is very much an extended self and thus the philosophy of one's investment strategies must fit into how a person behaves and thinks.


PS. My blog article title is cool right? Hahaa! Nassim Taleb really got a hold on me - I folllowed his style so that the article cannot be so easily derived from the title of the post itself :)

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The curse of Sisyphus

After watching the movie Percy Jackson and the Lightning Thief, I was inspired to relate another greek mythology to modern life, specifically with relations to the market. I've blogged about Odysseus and the siren's song previously and had much fun doing so :)

It was said that there was a king named Sisyphus who was cursed in Tartarus (a place darker and worse than Hades) by Zeus. The nature of his crime is immaterial here but suffice to say, it is a punishment for Sisyphus's hubristic beliefs, for this punishment is a grave one. He is tasked to roll a bounder up a hill but always, just before the boulder reaches the top, it will roll back down again and Sisyphus would be forced to repeat the task again and again for eternity. Essentially, it's a task doomed to fail - a punishment meted out for an eternity in frustration.




Have you ever had a stock that you ride up all the way above its 52 week's high and ride it down all the way down below your buy price?

I had plenty of such Sisyphean tasks but one of them stand out strongly. I had swiber back in 2007 at 1.29, 10 lots. Here and there I added and traded some positions. But essentially, I was there when it reached its $3.84 peak in 07. I was there too when it reached its trough at $0.23 in 09. Why didn't I sell when I've a triple bagger? Hubris - I supposed. The arrogance of thinking that I know what I was doing and the greed of wanting more.

I'm sure everyone had this kind of experience before. It's okay to be wrong, but it's not okay to stay wrong. I'm determined not to let this kind of things happen to me again.

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