Monday, December 31, 2018

A very long reflection of 2018

My baby just fell asleep, so I had to myself an hour or so to reflect on the year 2018. I started off by looking at the diary app that I had been conscientiously writing every night before I go to sleep. Here's a few highlights monthly:

Jan: Went Bangkok for a trip with my wife, but not with son. Left him with my mum back in Singapore, and happily so! We're so tired and we need to take care of ourselves. Looking back, we're so...noob being parents, haha! Perhaps the new year 2019 will see me bringing him along. Already done up his passport.

Feb: Looking back, I realised I was too reliant on my mum to take care of the baby. When she wasn't around, I was complaining how hard it was to manage the whole day. These days, I can take care of everything and more, alone, with nary a complain. I've improved a lot over the months.

Mar: Met up with a bunch of bloggers at Canton Paradise. Some of them I met only once a year, so it's great to catch up with them.

Apr: My son fell sick, and all hell broke loose. As mentioned, I'm not a very good parent. Not skillful enough at doing the task and also just generally tired. There are so many posts talking about how tired I am taking care of the kid. Too many. Oh, and my son started walking in 4-5 steps. Milestone achieved.

May: Mum had a fall while crossing the road, and fractured her wrist. Had to send her to the nearest emergency department. Could have been worse. Looking back, I think this is the catalyst that made us truly take care the care of our son from my mum. Without her fall, we could still be relying on her and not learning the care-taking part fast enough. It's true - everything that happens, happens for the best. My son also fell sick, a major one.

Jun: My air conditioner is spoilt. In bloody hot june. In the end I had to change the compressor. My son started to develop a mind of his own and insist on doing things his own way. Can't control him against his will (as easily) as before now. I see that as a good sign, not a bad one. I'm also starting to act like the disciplinarian of the family, which is quite startling to me. I thought my wife is the one. And we had discussed about it before! We all got a plan until we got punched in the face. Also met up with another group of Investingnote friends (let's call it that) at Singpost center.

July: After eating some prawns, I had rashes all over me. Thankfully it subsided and no further action required. Started learning python programming by reading the text myself. Brought my son out to the airport - the first time ever. It was such a pleasant experience that we ended up going there almost every week. If you see a couple chasing after a cute botak kid, that's likely me. Oh, and I went there today too. Son called me 'papa'. Not the first time, but the clearest I've ever heard from him. My heart melted at that instant. Started test driving my current car too. COE must have dropped enough to make me test drive new cars.

Aug: Son had diarrhea while we're out going to the doc for his vaccination. On a day that I decided not to bring any diapers because it had been fine all along and it's a short trip. I learnt my lesson very well. I ALWAYS bring along diapers now. Bought a new laptop for my wife. Son started climbing flights of stairs on his own. Back then, he was managed maybe 1 floor. Now, he is doing 3 floors of stairs, and doing it repeatedly up and down for 6 to 8 times. That is progress.

Sept: Went ahead and booked a new car. Met up with my long-lost primary school friends. Even my teacher is there. The entire block of my HDB flat had a blackout, which lasted for a few hours. Sold my old car to a dealer. A bit sad to see it go, but I knew it was a right choice.

Oct: Collected the new car. The smell of a new car is ...over-rated. Started going to the library more often as my work starts winding down. I'm still trying to hit my 30 books a year target. Majority of work is done.

Nov: Went omakase dinner at Teppei sushi. Wasn't up to my expectations though. Been going out a lot with my son. I realised I'm very proficient at taking care of him now. Going to send my kid to a childcare centre in 2019.

Dec: Met up with a group of friends for steamboat dinner. Had a lot of fun, though most of them are strangers. Had a very quiet Christmas and a very quiet new year's eve. Just the way I like it. I also deleted facebook and messenger app from my handphone. No more of it.

If not for the diary, I would have forgotten most of these stuff. Looking back the year by browsing through all the daily entries is really a very good exercise to be grateful for what had happened and also to have faith that whatever is happening now, is happening for the best.

Since I'm a self employed, I also noted that my working hours had reduced by about 12%, leading to a corresponding drop in income by about 12% too. I don't really care about that as long as my savings goals are reached (it is). The time that I didn't spend working, I spend it all on my family. I think with the new responsibility as an involved daddy, it's inevitable that I will reduce my working hours. I had to. There's always a cost to everything, of course, but I think as long as my savings goals are achieved, anything more is just a bonus. I'm okay with the reduced working hours and income. 2019 might be a better year for me, as my order book had been more or less filled up to a comfortable level. We shall see.

My investment portfolio had a time-weighted return of -7.7%, doing worse than STI's -6.6%. XIRR for 2018 is -8.4%. It's auto calculated from stocks cafe. I think it's actually worse than that, because stockscafe didn't include the suspended Hyflux perps that I had. In my own spreadsheet I had already treated it as totally gone. So be it. 2018 is a tough year for most people, and I know I'm not one of those investment greats with double digits gains, lol! My strength is not in investment, but in my active income and savings. And I'm very sure I'll still achieve some sort of financial freedom in 10-15 yrs time. That's comfort enough for me. I'm not dying to hang up tutor's boots anytime soon.

And just as I'm very well trained in my current parental role, the new year 2019 brings along new challenges as I'm going to send him to a child-care center. Starting half day first but planning to put him for longer hours. I heard the first few months will be enduring illness and also the heart breaking of leaving a child in a strange place. I'm a bit apprehensive, but I'm sure by the end of 2019, I'll be looking back in hindsight and seeing that as a wonderful decision.

I don't really do new year resolutions, believing more towards long term plans. So there's nothing 'new' that I resolve to do for the coming new year. It's the same old boring stuff:

1) Save at least 30k, preferably 50k and above
2) Read at least 30 books
3) Cultivate peace of mind and gratefulness


Attack of Takashi castle - SUCCESS!

Since 2018 is better than 2017, I'll give myself 5 stars out of 5 stars again, LOL! I know how it sounded - a bit self-congratulatory and delusional perhaps. Punch me :)

Wishing everyone great health, great relationship and great wealth in the coming new year 2019!

Saturday, December 29, 2018

2018 viewed in the eyes of the books

I set up a goal to read 52 books way back in 2007. I saw the list of all the books I've read, all typed out neatly in a Microsoft word document spanning over 11 pages in size 10 font. It was easily the best habit I've adopted and the effects are still rippling through me. It has been 12 yrs since I started this habit, and still going strong. I was a little behind my reading list last year when I only read 11 books, and that's because I just became a father, and so it took some time for me to discover my new roles and to carve out personal time for reading.

This year 2018 is so much better. I didn't shirk away from any fatherly duties but I integrated the duties together with my reading. How? I read more physical books instead of ebooks so that my son adopt a reading culture. After several months of me reading physical books, he no longer disturbs me. He sort of understands this is what I do, and hopefully, when he is able to read on his own, he will see that reading is part and parcel of our family.

I also read more books from Singaporean authors. I've no idea why I started reading more local books. Maybe as we get older, we start to think more nostalgically about the concept of home. Or maybe I finally get over the revulsion which is English literature, a much-hated subject that I took in school but I know I love deep in my soul. The subject usually uses local literature together with the usual core of Shakespeare to inject a local flavour. I hated it because I don't think I've had good passionate teachers, or maybe truthfully, I am not of the right age and of the right mind at that point in time. Nevertheless, I started devouring those from the nearby national library.

Here's the list of books read in 2018. Again, I'll pick a couple of memorable books.

Singapore, Incomplete - Cherian George
Rise of the King - R.A Salvatore
Night of the Hunter - R.A. Salvatore
Roll out the champagne, Singapore! - Catherine Lim
Timeless: A Drizzt novel - R.A Salvatore
Sayonara Singapore - Parapuram Joseph John
Factfulness - Hans Rosling
Sundays with Sumiko - Sumiko Tan
The good earth (graphic novel) - Pearl S. Buck/Nick Bertozzi
Tall Order: The Goh Chok Tong story - Shing Huei Peh
Billion dollar whale - Tom Wright / Bradley Hope
My best with honour - William Wan
Bang my car - Ann Ang
Quiet girl in a noisy world - Debbie Tung
Dying to meet you - Angjolie Mei
Personality driven portfolio - Sam Phoen
Conscious Parenting - Dr. Shefali Tsbary
Internal drive theory - Dr. Petunia Lee
Good grief! - Alan John
Raising financially savvy kids - Ernest Tan
Starting out with python - Tony Gaddis
Orange is the new black - Piper Kerman
The myth of the spoiled child - Alfie Kohn
This is how inequality looks like - Teo You Yenn
Tribe of mentors - Tim Ferriss
Skin in the game - Nassim Nicholas Taleb
Never split the difference - Chris Voss
Montessori from the start - Paula Polk Lillard/Lynn Lillard Jessen
The Undoing Project - Michael Lewis
Meditations - Marcus Aurelius
Child Development - Laura E. Berk

1) Singapore, Incomplete - Cherian George

This is my first introduction to Cherian George. I know he is a controversial figure, and I first know about him when he was denied tenure-ship in NTU. This book is about a series of essays, which are pretty friendly to read. They are not written for academics, so it's fit for consumption by everyone. The essays, sometimes like blog articles by yours truly, touches on various topics and themes that concern Singaporeans and Singapore. I thought they are very good, thought-provoking. I especially like the last essay, titled "Accidental losers". It talked about SG50 celebration in 2015, so 1990 should be the SG25 celebration right? Alas no, SG25 celebration was in 1984. Why is that a 6 yrs difference? Is history being re-written and for what purpose?

I might dig out more books from the local library penned by the same author. I like his style.

2) Internal drive theory - Dr. Petunia Lee

I've heard of this book before and only when I chanced upon it in the local library that I actually borrowed and read it. This book is useful, both professionally for me as a tutor and also as a parent. In fact, I found it so useful that I wrote a detailed summary of the entire book in order for me to revise and revisit them in leisure when I needed the lessons again in the future. I like the author's principles with regards to studying, in that she not only wants students to do well, but to do well because they themselves wanted to do so. Interwoven with the theory, there are personal examples of how she treated her own children in various case scenarios. I found that very helpful in interpreting the theory. This is like Robert Cialdini's classic Persuasion, but written for kids and specifically in the context of encouraging them to study. I'm into books that delves into the science and art of motivation, so will gladly devour anything that falls within that sphere. This is one of the special ones that I know I'll keep coming back to.

I highly recommend all parents to read this. If you're a tutor or teacher teaching primary school kids, I think this is great too.                       

3) Skin in the game - Nassim Nicholas Taleb

NNT is another of my favourite modern philosopher and author, and I'll gladly read anything by him. This book essentially gives the reader a framework to evaluate if someone has skin in the game. I like this chapter titled "Surgeons should not look like surgeons". In it, he talks about choosing a surgeon who looks like a butcher, works as a surgeon but totally doesn't look the part of a surgeon. The fact that he succeeds as one despite his appearance is an indication that he is the real McCoy. Among all his books, I find this the most friendly and accessible, with lots of everyday examples that people should be able to relate to.

If in 2019, you are going to read only one book, then let it be this.

4) Never split the difference - Chris Voss

If you've read Robert Cialdini's Persuasion and the more recent Pre-suasion, then I think you'll find Chris Voss's Never split the difference taking on the topic with a different feel. Robert Cialdini's approach is more academic and scientific, with all the controlled laboratory-based experiments. Chris Voss's approach is born from the fire of actual FBI hostage negotiation. There are no controls, no academic reports to write at the end of each negotiation - only humans lives saved or lost in the process. So he only talks about what works, based on his experience dealing with stressful high stakes negotiation in real life. This is a book that is worth re-reading because I'm very sure it doesn't sink in with the first reading.

Highly recommended to all who are interested in the science and art of motivation.

5) The Undoing project - Michael Lewis

This book has the characteristic smell of the works of Michael Lewis, the author of Liar's Poker. He talks about Daniel Kahneman and Amos Tversky and how they came to destroy the notion of human beings being rational. Like his past works, Michael Lewis starts from the very beginning and leads us to understand and empathize with these two persons, leading us to understand why they think as they do and why they write as they wrote. He expertly weaves in personal anecdotes and shows us as readers how that little incident can lead to a particular point in their lives. The two friends are like lovers, started off inseparable, but eventually becoming strained in their relationship. A very lovely read. 

I will personally read anything written by Michael Lewis.

Monday, December 10, 2018

Networth update in 2018

2018 is a rather slack year for me. I don't think I work as hard as I do in previous years in terms of work, so the time that is otherwise spent working is channeled to my family, especially my growing child. This year is also a bad year for those who invested in equities. It seems like if you put money under your pillow, you'll end up being better. Will it affect my net-worth? Let's see.

The last I wrote on my net-worth was back in 1st Dec 2017, here. I'm going to do the same below.

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. Like in the past, I excluded the asset part of my stay-in property, but included the liabilities portion. This year I incurred new debts too, in the form of a car loan of 3 yrs. I'm also not going to include the value of my car in the assets part, but will include the liabilities part.

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

Again, 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)
3. My portion of the car loan I took this year (total remaining loan amount divided by 2)

Here goes:

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
2018: Assets: $483k, Liabilities: $191k, Networth: $291k

There's a few things I should be glad and grateful for in 2018. Firstly, despite the downturn in the stock market, my networth is still up. Of course it didn't go up as much, like the crazy almost 100k increase from 2016 to 2017, but the fact that it is still positive is good enough for me. This year is also when I paid a hefty down payment for my new car, so that is also why the asset didn't go up as much. Secondly, overall I saved about 55k this year and that surprises me. These days, I no longer consciously check how much I saved. Just perhaps a brief look every half a year or so to make sure I'm generally on the right track. Not all the savings are in cash too, because I transferred a part of it into my CPF to fulfill my self-employed contribution, and also to shore up my OA for my reserves. My work income dropped a bit, but my dividends pushed it up, so net net I'm not that far off. That is exactly what the dividends are for, and I'm thankful for stabilizing my income.

Market can go up and down, but my net worth must go up all the time. That's the philosophy that I adhere to. If not, there's nothing to show for at the end of a year of hard work.

Financially, there's more things to look forward for year 2019. It looks like my work income is going to have a boost as I have a very robust order book for the coming year. If all things go according to plan, I should be running when Jan 2019 comes, instead of strolling. There's also more expenses to come, because I'm sending my child to a child-care center next year.

Till December 2019 then!

Saturday, December 08, 2018

Nuances of financial independence

When we talk about financial independence, it suggest that we are trying to stand alone and be self sufficient. It reminds me of those doomsday preppers, where they store their own preserved food, carefully canning them to hoard a stash of years to come. Self-sufficiency is the key. And for a while, I thought that model is what I aspire to become too.

After becoming a father, I saw from first principles how relationships are formed. My boy is the catalyst to forging new relationships. He is like the fire in the forge, melting hard cold steel together. I think my neighbor's place is like a second home to him. They are a couple with an adult child that had long since flew off the nest to start a new life. Hence, they welcomed my boy with open arms each time. It started from there, then my mum starts preparing some meals for them, and before I knew it, our relationship had elevated to just mere acquaintance. As my boy runs around in his whirlwind of activity, he spreads joy all around him. Strangers sometimes step in to help him when he falls while I stand there and just observe (I don't tend to help him unless it's serious; and it's seldom serious). The entire market near my home probably knows him, and because of my boy, I share with him the joy of having new found friends. This is not something I do very well, as I tend to keep to myself. Don't we all?

Humans are not meant to be isolated. And so when we talk about financial independence, we should steer away from the idea of being self-sufficient. There is value in being dependent on others, but the key is whether you have the strength to let others be dependent on you as well. That is how new relationships are formed. You treat me a meal, next time I treat me, ad infinitum. There is something to look forward to, and the relationship is sustained through such relational transactions. If you're self-sufficient, and I'm self-sufficient, and I don't want to owe favours to you because I want to maintain self-sufficiency, then the whole thing breaks down. I know I'm in a better relationship with someone if I'm getting fuzzy with money. I'm very sensitive to money and that's how my mind works, but I don't necessarily show it. If I want to strengthen a relationship from acquaintance to friends, I will get more and more fuzzy about money. On the other hand, if I just see someone as a hi-bye acquaintance, I'll pay the exact right down to the cents. I won't want to owe them any favours because I don't want to have to expend the energy and time to return it.

No relational transactions equals no relationship.

What has this got to do with financial independence? I want to be financially free so that I can have the freedom to build deeper relationships. With whom, with what? I want to build deeper relationships with my family, but more importantly, to expand my circle of what is commonly termed 'family' so that it grows bigger and bigger to encompass more people. It is NOT based on an ideology of self sufficiency, but that of mutual dependence, and hence as a result, creating deeper relationships with people. Family shouldn't be just related by blood; it should be defined by how much blood you are willing to shed for another being, and him to you.

And now I know why I dislike the idea of 'FU' money. It is so antagonistic. It implies the breaking down of relationship with a certain degree of arrogance and anger in it too. It suggest you want to flip the table and flip someone the bird.

No, that is not what I aspire to be. Someone is looking up to me as a model, and thus I must be exemplary in conduct and manner.