Tuesday, April 29, 2014

Invest in yourself first before investing in stocks

I'm not in favor of young people getting into investments in general. It's so prevalent now that it's almost fashionable to say that you're into stocks when you're at a young age. What business do people who are still studying have in the stock market? None, in my opinion. They should focus on what they should be doing, which is studying. To me, there's a time for everything. I'm quite sure I'll get flamed for this post, haha! This is not what most people would like to hear. What?! It's bull market now and you ask me not to invest?!

For most people, the bulk of the capital to even begin investing comes from paid work. If you don't even have a proper salary yet, you shouldn't even begin investing. Focus on getting a proper salary first. If your salary isn't high, then invest in yourself and get yourself to the next banding of pay scale. If your salary is low, no matter how much you scrimp and save, you're always on the 1st gear and can't really accelerate your path towards financial freedom. Saving 100% of $10 is not going to beat saving 10% of $1000, so your limiting factor to reaching financial freedom is not your investment power but your salary. You'll find that spending time and effort to increase your base salary will work more wonders and than relying on investments,unless you're exceptional. But everyone thinks they are exceptional and not average... I think it's much easier to increase your salary by $100 per month than to increase your passive income by $100 per month.

After you raised your base salary to as high as it can get, then look towards saving a greater part of your salary. This first tranche of money is going to work hard to bring in future streams of money, so make sure that you can save. If you can't save a significant portion of your salary, then maybe you should concentrate on improving yours savings percentage first before you think about investments. Get the basics right and build up the base for your investments to work. Also work on reducing your expenses. Increasing your savings is really just one simple equation : increase your income and/or reduce your expenses. By increasing both your income and reducing your expenses, you will be able to save exponentially.

Once you've done all this and set aside some money for emergency funds, bought some insurance and budget aside some cash for near future spending like marriage, housing and renovation, then we can start to talk about investing. In summary, before you start investing, maybe you should invest in yourself and work hard to see if you can increase your salary first. That is more likely to be safer and surer than any investment you make in the stock market.

Friday, April 25, 2014

Re-framing the savings problem

Sometimes, to convince people, you have to re-frame the problem to fit into domains that motivate that person rather than motivate you. I saw a lot of bloggers posting ways to save money, which is all well and good as an individual, but shouldn't work too well if they are a couple. I know that as a fact because months can be spent before I buy a single article of clothing, but for my wife, money can be spent on a variety of things before the month is up. It's just different motivation system. I feel motivated spending on savings, but others might be more motivated spending on things or things that promote relationship building, like an afternoon tea in a hotel with a group of friends, or shopping trips with her friends etc.

Nothing wrong with that. It's only something wrong when you try to convince the other party that they should save money in ways that don't really motivate them. Financial bloggers (some, anyway) are really one kind of weirdos who don't mind whipping out their hand phones after every transaction to jot down their expenses and finding joy tabulating their spreadsheet every month end. But not everybody strives to be like that, nor should they. And who is to say which way of living is the better one? Delayed gratification for the future or enjoying immediate rewards by sacrificing tomorrow?

Here's a few ways to re-frame some problems encountered by couples. It will appear unapologetically stereotypical, but that's because it's based on my subjective experience as a guy. Specifically, a weirdo financial blogger guy.

Toast set. in Singapore can range from anything between $2 to $6.

1. Boy wants to save money by insisting on toast sets in a kopitiam. Girl wants to try an atas breakset set in a restaurant that sells basically the same thing but easily cost ten times the normal kopitiam's price.

Instead of persuading by means of saving money, re-frame the problem by saying that it saves calories by sharing the atas breakfast set instead of ordering one each, essentially halving the price. This is a good compromise to satisfy both the girl's need to spend money on relationship building activity, as well as the boy's need to save up.

2. Girl switches the air con, printer, fan and the lights on, even when not around. Boy tries to tell the girl not to do so because it wastes money and jacks up the electrical bills.

If saving money is not the motivation, then re-frame the problem to one of saving the earth. Appeal to the humanitarian and Captain planet's side of her. Imagine another tree is chopped down, another degree in temperature rose up, all because you didn't switch off the appliances when not in use.

Let our powers combine!

Well, you get the drift. Don't take this as a problem actually. These are, well, incidents, that makes life all the more interesting. It'll be quite dull if everyone thinks the same thing, isn't it?

Monday, April 21, 2014

MR loh!

I've recently finished the last leg of my national service, the much coveted MR (Mindef Reserve) parade. It has been a very long journey - 13 yrs to be exact - since I was enlisted as a recruit when I was just 18. Some of the people whom I've met when I was 18 was still with me when I went MR. Frightening thought, isn't it? How many 18 yrs do you have? I knew these people for half of my life! What's the feeling of MR? Is it like achieving financial independence or sending the last cheque to HDB because you're finally done with your housing loans?

It's a mix of feelings, actually. There's a tinge of sadness because I don't really mind reservist, especially when you get to enjoy a different pace of life. There's a certain simplicity in army life that I quite like, though I would never sign on as a career soldier because I don't think I'm suitable. There's also a feeling of accomplishment that I've finished this portion of life as a Singaporean male. This is something that not all the people can get to live through. I know how some people hated all things army, but it's still a sort of experience, isn't it? I'm glad I got to experience army life as a Singaporean male.

My unit is special - MR parade at marina floating platform

There's a few things that I'm grateful for in my 13 yrs of service to the nation:

1. Due to some changes in my unit that I'm posted to, I got to experience different sort of management under different commanding officers. I've been though one that is very pro micromanagement and information only flows one direction - from top to down. This is the unit that I've been with since NSF (national service full time) days and I don't really like them. Very rigid. Disciplined? Yes, but only when we need to show it when there are people around. I had a feeling that I always need to pretend that I'm busy so that I won't be 'arrowed' to do some nonsense work because I've finished my work faster than the rest.

Thankfully a small group of my friends got posted out when the former unit was disbanded. The management of this new unit is more hands off, preferring to let individual small groups take over command, while they follow a general orders from higher ups. Is it disciplined? Less so, but there's a great advantage to empowering people from bottoms up. The people in this unit is much more motivated. You see people volunteering to do shit jobs so that the majority can move on in their program schedule. You see people doing extra and giving feedback so that the unit can improve in future events. You even get unit pride so that you don't 'lose face' when doing unit's capability assessment test. Basically, I got a culture shock when I went in because nowhere in my army life had I seen such camaraderie and esprit de corp. This unit went on to get the best NS unit ever in Armour formation, and I'm proud to say that I'm one of their members.

There's life lessons to be learnt from this two opposing views from two different management teams, don't you think?

2. I'm extremely thankful that I have a group of friends that I've known for 18 yrs. When you knew someone that long, you no longer need any pretense. There's no need to talk about the weather and other trivial stuff because these kind of small talk had long gone stale in the first few years of knowing them. These are the people that I've gone through thick and thin with, both in terms of their waistline and also the kind of challenges faced when in service. You knew them so well that you know what they are going to do in the morning when they wake up (brush teeth first or change uniform first?), and who are the ones that will snore and the ones you can always count on for some chocolates or biscuits when you're outfield during exercise. They are perhaps the only group of people who have seen me in various state of undress. If I've not known them for 18 yrs, it would have been creepy. Very creepy.

They are the group of people that you would fight for. Never mind the lofty ideals of serving the nation - that's just pure propaganda. When you're deep in shit, you don't think about serving the nation. You think about not letting your buddies down.

It's great to know these guys.

3. I'm glad that I've been through NS. It's really an eye opening experience that I wish all people can get to experience. But you need to keep an open mind, otherwise everything that doesn't fit your 'normal' experiences will make you unhappy. Angry, even. My philosophy in life is to get as much experience as possible, and not necessarily the good ones only. Just as you need rain and sunshine to make a rainbow, you also need good and bad experience to enjoy life's rainbows. If you go through life like that, then everything is like an achievement waiting to be unlocked in the game of life.

Fired a real bullet from a real rifle - Achievement UNLOCKED.
Thrown a hand grenade without killing yourself - Achievement UNLOCKED.
Not having a proper shower for 14 days -Achievement UNLOCKED.
Shitted outfield? - LOCKED

It just adds on to the variety of experience that life offers. And no matter how much I complain when I'm actually in it, I'll miss those pesky mosquitoes in the jungle and peeing in the bushes, and eating combat rations. These are the things that you will remember in your life, because it's so different from routine.

The BMT recruits are marching out. We've finished out portion and are just watching the parade as a spectator. Kind of strange because this is the first I've watched it as a spectator. Usually just a participant marching.

As a great round up to the whole NSF to NS to MR experience, I've to participate in a big scale kind of MR parade where BMT (basic military training) newbie recruits are graduating to their next phase in their army life while older soldiers like us are graduating to a pure civilian life outside. Passing the honorable duty of defending the nation from one generation to another.

BMT recruits a celebrating their Passing Out Parade (POP). 12 more years to go, newbies.

Last parade of my life carrying a rifle, wearing skeleton battle order (SBO) and a beret and it had to rain. Heavily. Oh well...just take it and suck it up like a soldier.

Wednesday, April 02, 2014

How to party a chaotic good character with a lawfully neutral one?

I read an interesting article from wall street journal by Charles Murray here. In his article, he wrote that punctuality, orderliness and thriftiness are the top three personal habits that may make or break your relationship with your other half. I totally agree. Usually these 3 things are the ones that me and my wife would argue about when we first started our journey together.

We're like polar opposites, so maybe that's why we are attracted to each other. There's something magical about being with someone who is quite opposite from you - all of us will end up having our horizons and experience expanded, if you can tolerate the initial upheaval of your 'system'.

In terms of punctuality, I'm the one who lives by the clock, while she's the one who don't keep time. If we have an appointment at 10am, I'll be ready at 9am, while she's just getting ready to be 'ready' at 9am. This causes much friction while we're dating because I seem to be always waiting for her. But after a long time, I think we're used to each other's sense of time. For me, time is absolute and immovable, while for her, time can be stretched. She has come to realise the value of being prepared ahead of time because of several experiences where she is almost late for some important functions. For me, I've learned to take it easy because even if I'm early, most of the time, the other party will be late anyway. No real harm is done.

Orderliness: In short, I'm the tidy one and she's the messy one. Every day, we'll be fighting a battle of order against chaos. She'll take out stuff from the drawers and leave it lying around, while I'll be busy keeping up to put it back in. It's quite comical and hilarious sometimes. I get energy from having things in a orderly  manner; she don't. After I explained to her, she compromised by keeping certain areas tidy while I keep my eyes closed on other areas. That works very well for us.

Thriftiness: I'm the thrifty, misery one and she's the spender, generous one. She can complain about me being tight about money but when it comes to making financial decisions, I'm the one with all the facts and data at hand and will guide or take her through. I can complain about her spending a lot of money but when it comes to giving, or charity, or helping others she'll take the lead and show me how to be hospitable. I think I can certainly learn a lot from her, just as she can from me.

Being with your polar opposite doesn't always turn out in a good way. Some marriages are broken because of irreconcilable differences. I can imagine how some people cannot embrace diversity and always insists that they are right. If that's the case, then finding someone closer to yourself might be easier to handle in terms of relationship issues. My alignment is lawfully neutral while hers is chaotic good. Not the perfect match alignment wise, but very very versatile in terms of party mix. I think because we mix around so often, I'm slowly changing to chaotic neutral while she's changing to lawfully good. Not a major change but certainly perceptible.

I think the key to a good party combination, regardless of alignment or personal habits, is to be empathetic. If you can put yourself in the shoes of others, you can be with (almost) anyone. Compromising doesn't mean that you're wrong, it just means that you value the relationship more than who's right and who's wrong.