Reflection of 2017

Today is the last day of 2017. Like previous years, I will grow reflective and think what I've done in the past year. I usually begin by asking questions to myself (and everyone) whether the year 2017 is a good year or not, and how anyone would grade this year out of 10. This year, I imagine having a conversation with myself, sort of an interview between me and myself.

Interviewer: I
Myself: M

I: I'd like to ask you this question. How would you grade this year 2017 out of a scale of 10? Can you share how and why you grade yourself this score?

M: This year is a fantastic 10 out of 10 for me. My usual categories are Finance, Mind, Body and Spirit.

Financially I did better than expected. I didn't do as much work because I had a child earlier this year, so I had to forgo some work scheduling so that I can be more present for my kid. But the lack of income is made up by other sources of income, so I ended up the year with nearly 70k of savings, when I only expected 30 to 40k. I was pleasantly surprised by that. I also managed to accumulate 240k, which means I can activate my plan to invest it at 5% pa to get a dividend income of $1k per month.

On the Mind part, I only managed to read 11 books instead of the usual 52 books a year. This is because the time I usually spent reading is now spent watching Netflix instead because I have only so much energy to spare throughout the day. I expect myself to start reading when things are more stabilised, but it doesn't seem like anytime soon. I did however read a few great books and I still take with me the lessons right now.

On the Body part, this is a total flop. No exercises, no more strict diet, no more pullups and pushups. No excuses for me.

On the Spirit side, I stopped meditating, but even after more than a year of stopping, I still think I got the positive effects of practising both mindfulness and meditating. There's nothing new on this front for me in 2017, just more of the usual stuff.


I: Hmm, from what you've described, it seems that 2017 is not such a good year isn't it? Why did you say it's 10 out of 10? Are you delusional?

M: Haha! Perhaps I am delusional. But there are people scoring 100% on every front yet they are also unhappy, so how do you make sense of it all? I think happiness is not just tied to these categories. More importantly, happiness is a state of mind, and this year 2017 is a joyous year for me. The birth of my son overshadows all the little things I had not achieved. My son is healthy and well, my mum who is recovering from cancer is also doing very very well and I am generally healthy. There's a lot of bad things that might had happened, but it didn't, so I am thankful and grateful for it. I make it a point to make every year a better year than the year before, and so far it had been true.

I: Alright, I see. So where do you see yourself at the end of 2018? 

M: My big plan had been established a few years ago and I'm still following it. More of the usual, like saving 50k (or more) per year, and reading more often instead of watching Netflix. I don't think I still have the energy to exercise, but we'll see what we can do on that front. I want 2018 to be better than 2017 too.


I: What are your major challenges that you've encountered in 2017 this year?

M: It's getting used to a new regime and schedule after taking on a new identity - that of a involved father. I've seen a lot of tuition kids who fathers are absent and I am not going to let that happen to me, hence the conscious decision to be present to my kid. This means that there's a lot of personal time and work time that is sacrificed. I take it gladly.

The other thing is how not to not just survive but also to thrive in my caretaking of my son. I don't want to just feed and change the diapers, but also to build a relationship and really want to spend time with my son. I'm still learning to do well, but there's still room for improvement. At least he called me papa before anyone else and I'm secretly happy and glad that I must have done the right thing.


I: You said that this year you read less than your usual 52 books a year. How do you feel about that?

M: I think after a few months into the year 2017, I already had an inkling that I am not going to hit that figure, so I took it in my stride. I started taking down notes instead of just reading, so instead of going for breadth, I went for depth. I am practically studying the things I was reading this year, so it is very refreshing for me. I took a long break from reading and I felt better of it. I had been reading intensely ever since I started that habit in 2007, so a break after 10 yrs seem appropriate. It's a liberating feeling to be honest. I always felt that I had to continue reading and reading, because I had a target to meet. That was like being disciplined and goal oriented. I'm still learning to take things easy.


I: How do you feel about being a father?

M: That is one of the best thing that happened to me. I didn't know I am capable of giving love to another person, not even to my wife. I didn't know that I can be melted just by a flash of a smile and with tiny fingers wrapped around mine. I thought I won't be able to handle taking care of babies too. But I believe I handled it pretty well. I think my relationship with my wife also improved tremendously. We always think to ourselves, whether it'll be better being younger parents. But I think the answer is no. We're more ready now than before, and if we have our child before we're ready, we will be much more anxious and subjected to peer pressure. This is the best time for us.


I: Alright, we know you're a good father, but besides the baby, what's the scariest thing you've done in 2017?

M: It must have been the public speaking gig I had at DBS NAV. I had to prepare some presentation slides on powerpoint, and the last time I did that was back in my university days when I had to present to a panel of lecturers who are grading my thesis. It had been decades since I last did any sort of such speaking. That was some scary shit, but I think I managed to pull it off. It's definitely the scariest and the most stressful thing that happened to me in 2017. Even way above seeing my wife giving birth naturally to my son, for sure. I'm not the one in pain and I'm not scared of blood lol


I: Last question for you. If there's one thing in 2017 that you would like to repeat in 2018, what would that be?

M: I'm quite torn by this question. There's the bullishness of the stock market that propelled by networth quite a bit. Do I want to repeat that? I think not. It might feel good, but I'm about 45%+ in cash, and I would like to have some chance to utilise that at some good point in 2018, haha! I think I'll go for great health for everyone that I love. I want that to repeat again in 2018 and I will be so thankful and blessed by it.

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30 things that I realised in 2017

1.You don’t know how tired you can get until you are a parent. It gives me a new perspective and now see my own parents in a different light.

2.If you don’t want to complain about work, have a kid. You will also see work in a different light because you can finally be ‘in-control’ of your life. You might even volunteer for OT.

3.Babies are manipulative little creatures. They flash a smile, and you suddenly forgot you haven’t slept well for the past year, clearing their shit and feeding them in the wee hours of the day, and still want to continue doing so.

4.People can say what they want, but it’s the doing that differentiates them from the rest of those dreamers. Follow what they do, not what they say.

5.Haven’t been reading much this year, but I’m surprised how much clarity it gives to my mind. I’ve been reading too much for the past few years!

6.If you eat more carbs, you will want to eat more carbs to fill you. Vice versa.

7.The fastest way to see if you are too idealistic is to be in the thick of things. Your idealism will get destroyed quickly by the practicalities of life.

8.If life is a RPG (role playing game) where I can get to allocate points to stats, I’ll maximise charisma. I think that’s what my boy did.

9.My boy is well on track to save 100k by age 20. He has 18k in his possessions now, inclusive of a big fat contribution from the govt. Boasting rights for him in the future.

10.Learning the different roads and how to drive from one place to another is like learning a language. If your family do not have a car when you are a child, you can learn to drive in your adulthood, but you will never be able to know how to go from A to B without a GPS.

11.I spent nearly 4 months preparing milk from formula the wrong way, until I had a chance encounter seeing how my wife did the proper way. I suck. Or maybe the lesson here is that there are many ways to succeed.

12.Being a old father, I wondered if I will have more energy to catch up with my son if I had him when I’m much younger. The conclusion is that I will have more energy, but I will be less self-assured, more jittery, will do more comparison with peers and have less priority to my kid than now. I think it’s a good trade off.

13.Having a kid doesn’t cement the relationship between couples. It amplifies it. If you have a good relationship with your spouse, you’re going to have an even better one after having a kid. If it’s weak to begin with, it’ll go even weaker.

14.I think I’m a patient person. Having a kid will test that limit to the max.

15.I see less and less grandparents having the skillset to take care of their grandkids. It might not even be the skillsets, but also the inclination to want to do so. Grandparents these days prefer to travel and/or work. I wonder if I’ll be a good nurturing grandfather too.

16.I am paying my tv watching debt with interest now, catching up years of not watching. From less than 3 hours a year of tv, to about 3 hours a day now. You can be so tired you just want to vegetate in front of the tv to celebrate the official ending of the day when my baby finally fall asleep.

17.It’s hard to isolate my kid from viewing the screen. They are digital natives, and it will be wrong to stop them from using it. I guess the key here is self-control and how to have the discipline to regulate desires internally. Work in progress.

18.I really hate students who lie. Usually they will fire me, or I will fire them. I dislike spending half my time trying to decipher whether what they say is real or not, rather than spending the time tutoring them.

19.There’s a huge stereotype that fathers can’t be caretakers. It rivals the one question that I keep getting asked – does being a tutor mean that I don’t have to pay tax? But can I really blame them? From my work, 99% of the time, fathers are absent. Out of 14 years of my tutoring work, I can only recall less than 5 instances where the dad is involved.

20.The returns of the stock market does not contribute much to my networth right now. I have to keep reminding myself that when I think I’m spending far too much energy and time on it. The focus right now must be on my active income and career.

21.I can be stingy on myself, but generally I don’t think I am on others. If I am, let me know lol

22.2017 is officially the year of the cryptocurrency. People left right and centre are just talking about it all the time.

23.Being a self-employed working at home rocks! The benefits of it is slowly materialising. I see my family all the time and don’t have to ‘go out’ to work.

24.I’ve started writing a diary entry every day for the past 8 months. I realised when I’m tired, I talk about events without emotions, basically in chronological order. When I’m not so tired, I talk more about my feelings and other people’s feelings. It could be an insight to my personality.

25.What’s the difference between love and like? If you like a flower, you will pluck it off the ground and keep it. If you love a flower, you will water it everyday and keep it healthy.

26.Having a baby allowed me to see the evolution of needs. As we grow, the needs of the baby increases and gets more complex. That’s the winding up part. I think at a certain point in life, we should do a winding down process too, where we scale down our needs and simplify things.

27.I’m at the age where I don’t get invited to wedding or even baby showers anymore. Morbidly, I’m waiting for notification to attend funeral wakes and such. It’s interesting to observe such trends among my age group peers. Is it all unhappiness down the road from now?

28.As I get older, I’m getting a lot more frugal on my time. Negative influences are generally out of my life and I actively censor and avoid, especially when I can do nothing to change them. Positive influences I’ll actively seek them out. I cannot stand being a driftwood floating in the open sea, drifting aimlessly in any direction.

29.2017 is the year where my relationship with my mum had never been stronger. It’s all possible because she comes over to help me out with the baby almost everyday. From her love and care of my son, I think back to the days when she took care of me in the same loving and caring ways too. It had come full circle.

30.Don’t let me avoid challenges. Give me the strength to overcome them and the courage to face future challenges.

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Planning your end game after FF

There is a reddit share about a person in the US who had already reached financial independence without being married and having kids, but had a lot of other non-financial issues to deal with. For example, he talked about how to let his close family and friends know about his new found status, yet he does not want to lie about it. He has issues with being honest with them without being taken advantage or being probed at. There is also the existential issue about what else he is going to do with his life. This arises mainly because he does not have a routine to follow, and days can become weeks and weeks become months. Before he knows it, years would have passed with him wandering around aimlessly. He obviously does not want this.

For those who are aiming for financial freedom (FF), it's important to read the bad side of it. He laid it all out in his reddit post. The journey towards financial freedom is such a long and arduous one, and I think we forgot to think about the end-game. What are we going to do after we have reached it? It's a good idea to start thinking about these issues earlier rather than latter, because it's important to realise that while money solves a lot of problems, it does not solve issues like what is the meaning of life. My friend Christopher, who had reached FF himself, blogged about this here. He had a good word for this issue, calling it existential independence. It's like a twin set of booster rockets - you cannot be truly free if you have only one rocket of financial freedom blasting away. You need the other rocket of existential independence to bring you out of the earth's gravitational pull to be truly free.

I've not reached FF and I'm still on my way. But I've seen enough people who had already FF to know there are only a few end games after reaching FF. I list them out here:

1. Meaningful work
2. Religion
3. Travel
4. Family

Let's talk about them in more detail below. I will also share what my own end game is after reaching FF. I know it's still far away, but some of these stuff needs time to 'compound', just like your financial assets. You can't just tap on it on the day you needed it and expect it to start running on its own. Like all things, you need time and effort for your 'investment' to work out at the time you needed them most.


1. Meaningful work

Work that is meaningful, as opposed to work that pays the bill. I think there could be some misunderstanding about what happens after reaching FF. You might take a long holiday, being relieved that you are finally freed of work, only to come back to some sort of work again to resolve some of the issues that only purposeful work can help. FF is not about not having to work ever again. It merely gives you the option not to work for money again. It's very different.

I am most likely pursuing this path. I'm a tutor and I blessed to be one of the few people who loved his job so much to do it for free. The good thing about my job is that I can scale it down easily; I just need to work lesser and take in fewer students, or choose to work on 3 days. Flexi-work arrangement is not for everyone, nor for any industry. If your boss refuse such arrangement, what can you do? Also, the work that pays for the bill might not be the work that is meaningful for you. If the work that you are doing on your way to FF doesn't give you satisfaction beyond the paycheck, then you should look for other sort of meaningful work. Even mentoring younger people can be said to be meaningful work. The best way to find out if it's meaningful is to ask yourself if you are willing to do the work for free over extended periods of time.

2. Religion

When I say religion, I really mean spiritual work. I know some people, after reaching FF, start to get a lot more involved with their own respective religious groups. Born again Christians or born again Buddhist. Volunteering with these religious groups can be nice intersection between meaningful work and religion, since it satisfies both at the same time. It need not have to be any religion too. Practicing mindfulness and meditating also gives the same kind of spiritual purpose in your life.

I'm more of the mindfulness and meditating kind. I'm already reading up and practicing on such stuff in my own journey towards being FF. Some friends started on this religious route when they reached their mid life crisis towards mid 30s and 40s, and the continuation of this involvement allows them a very smooth transition when they finally become FF.


3. Travel

This is the route for a lot of singles. Take a backpack and they start travelling all around the world. Bitten by the travel bug, they are out of town almost every other quarter. The planning of the trip, the logistics arrangement, the research and packing all constitute a sort of project management work for them. It's a very structured project, where you know the start and the end point and it's highly repeatable.

Not for me though. I'm not a travel bug, and I can stay at home for prolonged periods of time as long as I have my creature comfort.


4. Family

I did not mention friends, because friends can come and go. But friends can be like family too, providing a very strong support for your mental health. If you have children, this can be a project that last for decades. As a new parent, it's never ending work. When your children starts having children of their own, it's like your shares started to give you bonus shares. But it might not be everyone's cup of tea, and I totally understand that. Those who are married and have kids are generally okay with their end game after reaching FF. I have limited examples of this type though, because it's so hard to be FF when you have kids.

In the end, what this feels like to me is similar to playing a game with your own selection of game difficulty. If you choose easy (or easier), your game play involves not having family and kids and reaching FF. But you might have an existential crisis much later on after FF. You ultimately choose an easy (or easier) game play but a much more difficult end game. If you choose hard (or harder), your game play involves juggling family time and work, having less resources towards the goal of FF and finally reaching FF. But you have a much easier end game after FF. This game of life is really well balanced lol

There are some other options that I can think of. These are people I've read but not actually encountered. One type is the health fanatics that chose to focus on health or health related activities. They become like addicted to marathons or body building. Then there are the Bilbo Baggins type, who wanted to write books to perhaps reach a certain sort of immortality with their works, so that their books can be their legacy when their mortal body passes on. Again, I've never met them before. 


Whatever rocks your boat man. But you need to plan for it. This end game planning after reaching FF is what will determine your happiness once the financial part is taken care of. 

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Networth update in 2017

Another year is almost coming to a close. This year is yet another fantastic year for me. Every year seems to be fantastic to me, so either I'm delusional or I'm really happy with my life. I'm going for the latter haha! The last time I did my networth update is around the same time last year, back in 2nd Dec 2016 here. To clarify, this is my networth, not the networth of my household.

There are so many ways to calculate networth, but I've always done mine this way. It's essentially assets minus liabilities but how you define assets and liabilities makes all the difference. Unlike most people, I excluded the value of my property but included the debt associated with it. Took me a few years to reach from a negative value to 0. The assets part include:

1. Cash in my wallet
2. All the money in my various bank accounts
3. Cash holdings under mattress and milo tins at home
4. Money in my paypal account
5. All the money in the 3 accounts in my CPF
6. Money market fund account
7. Marked to market investment portfolios
8. Surrender cash value of whole life insurance plans

I do not include the value of my 5 room flat that I'm currently staying in, and also the value of the family car that I own.

The liabilities part include:

1. Credit card bills
2. My portion of the HDB mortgage loan (total remaining loan amount divided by 2)

A good friend, Azrael, finally legitimize the way I calculated my networth. He introduced the term Net Current Asset Value (NCAV), first coined by Benjamin Graham to valuate a company. NCAV basically means taking the current assets minus all total liabilities. Since property value of my residential property is not under current assets (I could be wrong, I'm no accountant), hence what I did to valuate my networth is similar to the conceptual definition of NCAV. I stand to be corrected of course. But seriously, it also doesn't matter. I'm still going to do it my way haha

2014: Assets: $226k, Liabilities: $220k, Networth: $6k
2015: Assets: $295k, Liabilities: $207k, Networth: $87k
2016: Assets: $351k, Liabilities: $188k, Networth: $163k
2017: Assets: $449k, Liabilities: $182k, Networth: $267k

At first glance, there seems to be a huge increase in networth. Nearly a 100k increase year to year since 2016. Liabilities did not drop that much, only dropping by 6k from 2016. Assets went up a lot, nearly 100k to 449k in 2017.

The assets increased by a lot, and I think it's mainly due to my dividends and the bullish stock market. This year, because of my kid, I definitely worked much lesser compared to previous years. My total income fell as I free up my weekend time slots to make more time to take care of my kid. Hence, initially I thought my savings will drop as a result. Surprisingly, it came in pretty strong at 72k. This amount must have been saved by the combination of more dividends, parental leave and child care leave added together. So even though I worked less actively, these streams of income played their role to cushion my fall in active income. In the future, I would expect my asset value to generate more and more cashflow for me, as I progressively spend more and more time towards my family instead of wealth building. Inevitable.

Liabilities is mainly from the amount that I owed for my HDB mortgage. I switched from HDB loan of 2.6% to a commercial loan. It's somewhere in transition yet, so I have not paid my mortgage since November. Traditionally, I would also do a lump sum partial capital repayment for my loan, but because it's in between lenders now, I would do it only in 2018 when things are settled down. That would explain why my liabilities only dropped 6k from 2016.

Networth went up nearly 100k, and I think it's mainly due to asset value increasing. This means it's mainly the bullishness of the stock market that causes my asset value to go up. I'm about 40% cash. That will be my option if and when the market allows me to buy. Not in a hurry to use it all, so let it rot.

My networth is finally way over my liabilities. This means that if I choose to, I can liquidate everything and pay off my liabilities. I wouldn't do that of course, but I can choose to do that now. I look forward to the day that my networth is twice of my liabilities, then my whole family will be relieved of one great debt.

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