Ethical investing

Do you have a problem investing in companies that does things that you normally don't do in real life?


I give an example here. I am invested in HSBC - the world's local bank - for a pretty long time. That was way back in 2007 when I just started this blog. Back then, the financial crisis had not happened yet and in the span of almost 8 years, a lot had changed. The whole landscape of the global financial markets had been changed and now you heard not only of companies bankrupting but also countries!


Back in June, I saw news of HSBC laying off 50,000 people globally to cut their annual cost. If you're seeing this through the eyes of an investor, you should be happy. And indeed, the stock price went up briefly following the release of this news. We're talking about cutting annual cost by up to $5 billion annually, so of course this brings the company a better set of numbers and a healthier overall ratios.

But if you're the employees working there? Seen through the eyes of the employees, there's only one word to describe this feeling - 'sian'. This isn't the first bank doing such head count cuts. I believe a few global banks, including Standard chartered, also did the same to adjust to the global changes that is sweeping across the financial landscape.


So the question is, is it fair for the top honchos to decide on the direction of the company, reaping the possible rewards of their actions and yet the risk is taken by the grunts of the company? Even if the decision turns out to be a bad one and the top honchos have to resign, they do so with a huge bonus, a golden handshake and possible another good career for them in the next MNC. How would you feel about this? It's not just this laying off that pisses me off but it's also the numerous charges laid upon them on money laundering and also other shady business that investment banks do.


Does ethics matter to you when you're doing investing?


I thought about this question long ago when I first started dabbling into the market. Back then, my stance was that we don't always know what the company is doing but what we can do is to reap the profits or dividends and do what we think is right with that money. But slowly, I'm wondering if that's the right decision. These days, I don't mind paying more for a local startup cafe just to support their business and what that represents, instead of some heartless MNC with dubious morals.


Does investing in a vice business troubles you? Does it make you sleepless at night? I've since reduced my allocation in HSBC by half but still hold a portion of it in my portofolio.

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Do you have more than 1 alarm in your mobile phone?

My student didn't turn up for lessons recently. It's a group session so the lessons went on as usual for the rest. A while later, he texted me, apologised and said that his alarm didn't ring and that's the first time in his life that it happened.


It happened for me as well. Usually about once a year, I'll have screw-ups in my gadgets. I usually set alarms in my phone to wake me up in the morning. Two, in fact, and they are all on snooze. In the past, I like to switch off my phone entirely. Some models allow the alarm function to wake up the phone and automatically switch the phone on by itself so that the alarm can ring (not all models though). So, what happened was that my phone didn't wake up and I couldn't wake for my morning lessons.

It really didn't matter how many alarms you set in one phone. If the alarm in that phone didn't ring for any reasons, it's highly likely that the rest of the alarms in the same phone wouldn't ring as well. So having more alarms in a single phone didn't eliminate the risk of the phone not waking you up. All it did is to reduce the risk of you switching off any alarms by snooze it off without you consciously waking up.


So the trick I came up with is to have another physical alarm, and in conjunction with the alarms in the phone. The event that the alarm going off in both devices are independent and hence I reduced my risk of not waking up on time. And for important events or very early lessons, I always set two alarms in two different devices.


That's just like diversification in different asset class, isn't it?

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My thoughts on Pre/Post Financial Independence schedule

I read B's post on pre and post financial independence (FI) schedule here. In it, he put in his planned timetable for pre and post FI. He also encouraged everyone to try it and have a little fun imagining what it'll be like upon reaching FI.


I thought about it. I'm not reaching FI anytime soon, though I'm sure I'll certainly reach it one day. I'm a full time private tutor. People thought that this means I'll have a lot of freedom in my time, plus the fact that I'll have a few months of holidays during June and Dec period when students are generally having their holidays. The truth cannot be further from this. Weekends are burnt and holidays are spent preparing students to handle one major exams after another. The whole mantra is that if you're free, I'm not going to be free. If you've just finished work and going to a nice restaurant to eat, I'm the server who takes your order and serves you your steak. In other words, I work when others are not and vice versa.


My timetable for work is easy. I work 7 days a week, with 5 days of weekday being lighter and weekends being much heavier. 4 to 6 hours of work during weekdays and 6 to 10 hours of work during weekends is very much the norm, if you want to push up your income. These days, I don't work a full Sunday too, preferring to spend my time having a proper rest before I tackle a new week refreshed again. This only happened on my 10th year for tuition work. Due to the fluctuations in my work schedule, I guess I will work about 35 to 45 hours per week on average, with 40% of my workload on weekends. That's my pre-FI schedule for work.


What will I do once I reached FI? I love my work, but I don't like the intensity of it. If I can have a full day off on a weekday, I'll be happy as a bird already. In this line, it's too much to ask for to have a break on a weekday, because there's where most students will come. You know, after earning a certain amount of dollars, the only purpose of taking in more students is not to earn that incrementally less significant amount of tuition fees, but for the purpose of helping students. It's like you're a doctor and you're just closing your clinic before a patient who is seriously ill comes in. Are you going to reject him and say that your family is waiting for you for dinner? Come again tomorrow? I know I have the ability to help them, and I'll feel bad that I didn't because of selfish reasons like wanting to enjoy my life a little more. And hence I help them.

You just can't say no, especially when you know you have the ability to change another person's life. Come back again? There might not be another 'again' for that person.

Actually I have a plan in place for slowly weaning off work. Once I've reached an investible cash/investment of about 240k, and assuming I have a yield of about 5% off it, I'll be able to get $1k per month. I will give myself a 'reward' of having a weekday off. I haven't though much beyond that, like what happens if I can get $2k per month from investment. But the idea is to have a staggered exit from working based on the ability to exchange active income from passive income. I guess once I can cover all my expenses, my workload should drop to 0, but I doubt that kind of life will suit me very well.


I will definitely work as a tutor for as long as I can help others. Perhaps I won't charge as much. Perhaps I'll give a tuition scholarship to deserving students. Perhaps I'll volunteer at different organisation in what I do best. There are so many ways to give back to society and at the same time, enrich my own life experience. I think this can only serve as an addition incentive to be financial free - the idea of not trying to escape work but to actually do those work that you couldn't afford to do when you're still eking out a living.


That idea appeals to me very much. I guesstimate I'm about 1 to 2 yrs away from reaching that milestone of a quarter million. Can't wait to see what I'll evolve to become when that happens. Maybe my life will take on a life of its own!

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The irony of being clean

My teeth are dirty, so I brushed my teeth.

My teeth are now cleaned but I dirtied my brush.

My brush is dirty, so I washed my brush,

My brush is now cleaned but I soiled my hands.

My hands are dirty, so I cleaned my hands

My hands are now cleaned but I tarnished my sink,

As I cleaned up one thing, I dirtied another

As I washed up one thing, I soiled another.

Did I clean my teeth since I dirtied my brush?

Did I clean my brush since I dirtied my hands?

Did I clean my hands since I dirtied my sink?

Maybe I'm better off by not cleaning my teeth.

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Being frugal with your time

I was discussing some stuff with the finance gang, and we came up with the idea of being frugal. You know the usual stuff about being frugal with money, but there's also another less discussed but related topic - that of being frugal with one's time.

First of all, my definition of being frugal is to be efficient and not be wasteful. The action you do must be aligned with your values. So the distinction between stingy and frugal is that - whether what you do are aligned with you values. If you like being sociable, and like hosting parties and cook outs with people, then spending money along that direction is not wasteful. It's aligned with what you want to do. But if you can't tell sage from rosemary, and don't care less about food, spending money on such things will be a waste of resources. That's not being frugal. 

Knowing that, we can equally apply this to the concept of being frugal with one's time. Do you waste time on things that don't matter to you? Do you spend a lot of time on unproductive things while doing your work? Could you have reduced or eliminate time that is wasted, and channel it to something that you truly value? That's being frugal with time. 

Time is perhaps even a more limited and more valuable resource than money. You can use time to exchange for money, but it can seldom be done the other way. It's also possible to be frugal with money but not being frugal with time. For instance, you could be travelling a long distance to get something that is sold at net 50% discount to where you usually shop (even after accounting for travelling cost). But because the journey took 2 hours to and fro, you wasted 2 hours of your life travelling to save the money. For me, my per hourly rate is pretty easy to calculate. It might or might be be worthwhile to do it, depending on your per hourly rate.


That's why when I'm younger, I would go travel to far places to shop, just to save maybe $50 dollars or something on a pair of shoes. But when I'm getting older and my time is more precious, I no longer do that. I'm not saying paying the most expensive things will result in time savings. But usually good brands have a certain quality to it that a sub $10 item will not be able to match, especially if it's something that you value.


With that insight, I realised I'm not necessary frugal with money but I'm definitely frugal with my time. I don't like to waste a drop of time doing nonsense, and I don't like to waste other people's time too. That is probably the best reason to be financially free. You stop wasting your time doing non-productive work, earning money just to spend it on things that are not aligned with your values.


Ah, that's more holistic than looking at just money, isn't it?

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Not a great tech year for me

This year isn't a great tech year for me.


First of all, my old trusty desktop broke down on me and I couldn't get it to start at all. I ended up spending about $800 upgrading the entire things. Thankfully my graphic card did work out in the end, and I probably deferred about another $200 to $300.


Then, I dropped my handphone and the screen cracked into pieces. I'm usually very careful, and the height that I dropped from isn't even high, but shit happens and I ended up having to buy another replacement. Actually I was using it all along, but then I got cut on my fingers and my wife insisted that I get a new one. Quite true, why face a broken 'mirror' everyday and be unlucky? LOL

Then this week, my trusty old thumbdrive broke down on me. I couldn't get it to work on my desktop pc, and from experience, I know that it'll get spoilt pretty soon. There's no important data inside (thankfully), and I can get it out using another computer anyway. I also have to get it sorted out and bought another one.


I could imagine in the distant past, I'll get all riled up, especially when my phone breaks down. But I was strangely calm about it this time. Is it because I saw broken red dust? I was surprised that this kind of issues didn't hit me as bad as it did in the past. Maybe that's a sign of maturity in itself.


There's always good things even in the bad, and as I reflect upon them, these are my thoughts:


1. Though my old PC cannot be restarted, I eventually get a new one without any loss in data. That, I would have to be thankful for. I was extremely pleased after spending the money on my upgraded PC because now things are so much smoother and faster. Sometimes, things would have to break down to make room for the new.


2. I've to get a new phone and since my contract is coming to an end soon, I signed up for a new plan. It came in a time where I was trying to reduce the junk and clutter in my life, so I refused to buy a fancy (and expensive) branded phone and instead went for mi 4i. It's great, cost me $49 (with the plan) and am very pleased with it. I also 'downgraded' my data plan to 1.3 Gb/month and hope to stick within that limit. I think it's important not to keep upgrading the data usage. What's in it for me? Less facebook, less surfing and absolutely no watching of video streaming when I'm not in an area with wifi. That would keep me focused on what's important in my life. I guess if it takes a broken handphone to remind me of this, so be it.


3. I'm also very grateful that I had set aside a 'play fund' for such purpose. I already knew my desktop pc is coming to an end about 2 year ago. And I planned for it, stashing some savings into it so that the spending wouldn't come as a surprise to me. It's a good idea to stash aside these kind of money and these are not even part of my emergency cash. As mentioned before, the more you know about your life, the less emergencies you have and you can actually allocate your money more efficiently these way.


PS: Wouldn't be blogging so much in the month of June. The change in schedule due to the holiday makes me extremely lethargic and sleepy. I blog often in the morning and I'm so drained at night that I don't feel like doing anything except to relax. I'm such a night person...

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