Choosing quality over quantity

As I get older and hopefully more mature, I realised that if I have to choose between quantity and quality, I'll go for quality these days. It's not always like that. There was a time that I thought more is good. For example, having more of a cheaper share is better than having less of a better one. Or eating more lousy food in buffet is better than eating less but higher quality ones. There are many many such examples where I can quote you that lets you see how I chose quantity over quality. Hopefully I will reduce such nonsense from now on.


Specifically, here are the areas that I would need to rewire my thinking regarding the choice of quantity vs quality:



1. I've always had a target to read 1 book a week. Initially that target was set so that I can read more. I remember the times when I was reading maybe less than 5 books in a year - that was not okay for me. I wanted to change that, so I set up a target of 52 books per year, since 5 yrs ago. While I understand why I set the target back then, I think the reason for such a goal no longer exists. I don't think I need to force myself to do such a target anymore.


As such, I want to read less and enjoy more. Instead of reading 52 books per year, how about reading 12 good books in a year?



2. Trading 20 ideas in the stock market can be further reduced to trading 10 good ideas in a year. Slowly but surely, I'm getting more patience about the kind of setup I want to see before entering a position. I am no longer looking at the market as fervently as, say 2 yrs ago. When there's nothing to do, do nothing. That doesn't mean that you totally ignore the market - it simply means you wait for the right time and right situation before doing anything. If I miss it, so be it. I realised that there are many ways to make money, but unfortunately, going through the stock market is not my way. That's an important realisation. With that thinking, I not longer try to showoff my skills (not that I have any) or trying to hit certain targets. There are other ways that I can earn my money and fulfill my other goals at the same time. I would focus my time and energy on that instead.

3. Playing 15 so-so computer games is something that I simply cannot afford to. If I want to fulfill my gaming needs (yes, there is such a thing in me), I would rather play 1-2 good game. Again, it's a conscious choice of quality over quantity. I will have to reduce the amount of games that I buy online over steam.



4. A few good friends is better than 30 so-so friends?


The whole point of quality over quantity is really also to reduce the clutter in your life. With less stuff and stuff that you really really want, you can increase your satisfaction and happiness while not cluttering and filling your life energy with all sorts of rubbish. Life works best if it's simple but not simpler. Perhaps when one gets older, you'll realise that time is about the only asset that is decreasing whether you use it sensible or not. Not money.

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Hill Harper's "The Wealth Cure"

If you're looking for prescribed, step by step ways to kick start a healthy relationship with money and wealth, then Hill Harper's "The Weath Cure" is not your type of book. Initially when I read the book, I found it rather strange because of the way the book is structured. There are 5 big parts to the book, which each part having a couple of smaller chapters that is related to the parts. But here's the thing - I don't see the relation at all. Perhaps I had been to used to seeing other financial related books that are usually more straightfoward. I'm not saying it's a bad thing, it's just different. 

Halfway through reading the book, I realised that this is a chicken-soup-for-the-soul kind of book. Each of the smaller chapters are actually stories written in the point of view of the author himself. I thought it's a very refreshing way of looking at financial related stuff. The chapters are not written in the typically sermon like way, "You must do this..." or "you should do that...". Instead, the chapters are really just reflections of things that had happened to the author as he lives his life. Like chicken soup for the soul, this book can be re-read again and again. Depending on your situation at different points of your life, I'm sure you'll get different perspective from the stories. Same story, different life stage, different interpretation and meaning. That's why this book is a keeper - it's not something that you should just read and never pick it up again. 

I don't like all the stories, to be honest. Some of them are inspiring, some are just puzzling. The inspiring ones touch on the key points of important ideas without giving you too much details. Thankfully, there is a bibliography at the end of the book for readers who wish to dig more into the subject matter. This makes the book an easy read, without all the (boring) details and leaving the motivation to find out more solely on the reader. The puzzling stories are those that I think shouldn't have a place in the book. It's either because I do not have the life experience to appreciate the reflections that ought to follow after each story, or I simply don't see the point of the story. Fortunately, such puzzling stories that leaves you duh and speechless are few and far between.

If you've read about other financial related books, you'll find familiar concepts and principles. How many new ones are there? But that's not the point. What I liked about the book is that the same old concepts are put into fresh new perspectives - the author's perspectives - and that makes this book an interesting read. I don't really know the author as a celebrity (sorry, but I don't watch the CSI : NY at all) and you can't really tell from the style that the author writes. The author writes in a very down to earth, honest manner, which is kind of endearing especially if you know his background as a celebrity. He certainly doesn't seem like those financial wreckball kind of celebrities that the mass media loves to publicize. 

Would I recommend this book? Yes, if you're just starting out on changing your relationship with money and trying to find out more about wealth. If you're looking for more detailed answers, this book isn't your cup of tea. Nevertheless, it's still a good and enjoyable read to see how different people interprets age old principles in their own way. I'll say it reads like a blog, haha! 

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Positive mindset vs possibility mindset

I was reading this book by Dr. Robert Anthony "How to make the impossible possible", when I discovered that the author actually differentiate between positive mindset and possibility mindset . We know the usual positive thinking - if we think positive, then the outcome can also be positive. This is opposed to thinking negatively about a situation. But I've always wondered about the limitations of having a positive mindset and the book addresses exactly that problem.



I thought that if I think hard enough, will things really happen? For example, if I 'will' a book to move, will it really do so, even if I'm ultra positive about it? To the majority who don't have special powers, I guess the book is going to stay there. So there is a limitations to how much positive thinking can do to us. It's like if you never study hard for your exams, no matter how positive you are about it, you probably wouldn't do very well in it, unless you're a genius. You can ever call such a person naive, or overconfident. Positive thinking can make a person in denial of the actual situation.



Now what is possibility thinking? That is when you think that things are possible in the first place. For example, if you think that the book is going to move, having a possibility mindset means that you know that the book is not going to move on its own (though it's possible to move it), so you're going to move your butt and move it yourself. Or if you know that sitting for a test without studying isn't going to work but it's within the realm of possibility to pass and even to ace it if you just start working hard on it. Having a possibility mindset essentially entails that things are possible, if you are willing to do it. This mindset takes into account of reality and places power in your hands, because only you alone can change an impossible situation and make it possible.



It's a subtle difference but it makes all the difference to me. So actually, when I referred to having a positive mindset in the past, I'm really talking about having a possibility mindset - an attitude in life that views that things are possible if you are willing to take actions to do it. I'm not saying that having a positive mindset is not good - it's just not good enough. A possibility mindset allows you to think that something that you deem impossible is possible in the first place, and then forces you to address on how to achieve it.



Here's more examples:

So are you ready to take on the world? Haha :)

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Am I certified to trade?

As I logged into my poems account, I saw this screen asking me to do a test. I think it's the new ruling that is going to take effect on 1st Jan 2012. If you do not satisfy certain criteria, you'll be asked to take a test to determine whether you know what you are doing. If you fail, you won't be able to buy (though you can sell your existing holdings, from what I read from the site). I don't know who the ruling is trying to protect - the advisors or the consumers. Anyway, it seems that I do not have to take the test since I had made more than 6 trades with regards to shares. I can't do CFD or unit trust myself though, until I take the test, that is.

Anyway, I would like to take the test and see if I 'know' my stuff or not. It'll be interesting, haha!

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The joys of working from home

As I was starting work in my new flat, I realized that there's a few things that I liked about this arrangement. As I was slacking now after my student left, I realized how fortunate I am to be able to finish work and still be at home. I cherish this feeling and felt an immediate sense of satisfaction. On reflection, I think that working home allows me to :



a. Multitask things with regards to my personal and work life. For example, I could be in between doing household chores and having tuition at the same time. Of course I don't do it while teaching, but I do it during the lull moments like when the student is doing work. These kind of stuff are important to me as a time saver because in the past, I had to work outside and come home and settle my personal stuff. In the future, I would even be cooking lunch/dinner while working. That is something that most people would not be able to experience.

b. Since I'm at home, I can start using some stuff that are useful teaching aids. For example, during today's lessons, I was showing a student about how sounds waves though invisible can actually be felt. My desktop and my big subwoofer is just in the room, so I popped over and asked her to bring a piece of paper to place is near the subwoofer while I played a sound with a good beat to it. The paper became vibrating and I began linking that to the lessons itself. I think such interactive learning cannot be done in the student's place, because I cannot possibly carry all my stuff with me when I travel. Since I'm now stationary and fixed in one location, I can truly add another dimension to the lessons.



c. I feel more energised because usually it's the travelling and walking that tires me out. With that out of the picture, I can have more time of my own and that alone is priceless. I can free up the travelling time in between locations (usually takes up to 1-2 hr per day for a fully booked day). I can nap, I can settle my household stuff, I can prepare lessons, I can play games....infinite combinations with one single result - it's making me a very very satisfied and happy man. I wonder why I didn't do this sooner!



The answer to the question whether the expensive resale and expensive renovation is worth it or not, should be obvious to me by now. A resounding yes. It's one of the best thing that can happen to me in 2011.

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Cbox outing @ Beng Hiang

Bullythebear had a lunch outing on Sat 26th Nov 2011. It had been quite some time where we had a gathering with the guys/gals from the cbox community. Anyway, thanks to Neophyte who initiated it and passed the baton over to me to handle the rest of the logistic. Not to forget sfry who sponsored the lunch though we had never met. It was always the kindness that we experienced from strangers that we will always remember deep in our hearts. Had a great time that day from 'our' restaurant Beng Hiang at Amoy street.


Here's all the dishes, in chronological order. Sorry for the first dish, I forgot to take pictures until we're deep into the dish, haha!

Are you expecting to see people's faces here? Nah, I'm too smart for this. Anyway, it's a unwritten rule that no pictures of faces are taken during the outing. Interesting to see how the faces match up to the online personality, haha!

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Starting a new friendship with an old friend

Today I went to Sitex (the computer exhibition at expo) with a new friend. Rather, he was an old 'new' friend because I've known him for many years but perhaps this time round, I really treated him like a friend. Kind of sad, but I'll always say it's better this way then never. You will never know the unintended consequences when you sow a seed into the universe. In my case, the seed is me getting a flat, renovating it and eventually moving out of my current home into it to live another sort of life. The known consequences are the drain into my financial resources, and of course the time and effort needed to ready the flat into a livable and homely place for me to start a family. The unintended consequence of this seed is that I started to know a friend all over again. Unintended is not necessarily bad, it's just...something that is not known in advance until the event happens. This new friendship that I started is, by no means, bad, of course.

This is my new Xerox printer that I got from Sitex 2011

So we went around Expo getting the things that I needed to get the new flat ready for my move-in. Firstly, I needed to get a broadband connection so that I can access the internet at the new flat. Since during computer fair, there's usually a good discount or extra freebies for new sign ups, I wanted to go there early to queue (if necessary) in order to get the good value plans that I wanted. Eventually, when we reached there, there wasn't such a promotion for the plan that I was looking for, so I didn't even queue for it. But for the few days before Sitex even started, my friend and I began discussing different possible set ups in my new flat. He is used to (and still is) tinkering around with his computer, ever since he got one maybe like 25-30 yrs ago and had been an avid computer hobbyist ever since then.



After getting my printer, we went over for lunch at Lerk thai there, where I treated him to thai food. It was a rather strange feeling because I can't remember having lunch with him in a restaurant for ages (maybe never, sad-ctually). We never really have a close relationship and I would so like to begin one right now. What better time than now, because we're never going to get any younger and more energetic than we are today. With that thought in mind, I also went to book a tour with him and his wife, even though I hated those guided tours and much prefer to go free-and-easy. In guided tours, you are more like having a work schedule with a fixed agenda every day, rushing from one tourist hot spot to the next, snapping this photo and that, buying the must-eat snacks and visiting the must-visit localities. It doesn't feel like a holiday at all; it feels like work.



But for them, I'll do it. It been a while since I went to a tour with them. The first time was a trip to Genting Highlands when I was 15. The next was a trip to HK when I was in my early twenties. This up and coming trip would be the third. Three pathetic trips in over three decades of us knowing each other. I think I can and should do more.



After all, they are my parents and I am their son.


(Thanks smol and ak for their blog posts so that I was suddenly 'jolted' to spend more time with my parents. My parents are still younger and I'm younger still, so there's a good many years to begin a fresh new relationship with my parents - to know them as friends.)

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My reshuffled priority in life

I realized as I sat in my new home, that setting up a home is financially draining yet at the same time is very satisfying. As the furniture slowly trickles in and your house transforms into your home, with all the little imperfections that you will come to appreciate and all the weird corners that you can stand on to view the home that nobody knows but you, an immense sense of fulfillment fills me up. A place that you can truly call your own is such a powerful feeling to have. I think the feeling would be multiplied many times if the next month is the last month that I have to pay the mortgage loans.



Is it worth so much money? I think, so far, it's a resounding yes. Except for a few parts that I think could be further improved (I realized quite early in this renovation game that there's no such thing as a perfect design - there's always this little corner that you can do better on and that little space that you regretted doing...ah, the perfect vision of hindsight), I'm overall satisfied with how the whole thing transforms an old dilapidated resale flat to the present renovated and modern look.



I'm sorry if readers coming in to the blog to read some financial stuff about making money in the stock market have to endure reading me talk about housing and renovation. It's just that such things are taking a bigger part of my interests now. I've little patience for the market these days and I loathe to spend so much time on it. Interesting how life turns out eh? haha!

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The last few ticks of my to-do lists

Finally finished the bulk of my work year! The rest of my work schedule are just some 'stragglers' from the graduating batch and maybe a few students for the preparation in the next academic year. I always said that I've never worked so hard before in the previous years, but I've to say that again this year too. Now that the bulk of it is over, I can finish settling some issues in my personal life.



1. Need to settle my housing once and for all and get ready to move in. This housing project had been dragging on for ages, perhaps starting around June/July and lasted until now. I really have no time to put my energy and effort into it, but no excuses now. I'm hoping to move in towards the end of the month. I've still got a few things to settle, mainly just the buying of the things I'll need to use when I shift over to the new premise and setting up some infrastructure to start a classroom. Sounds like fun :)



2. Catch up on my social life. Life of a tutor is pretty much like the life of a bus driver, or any service oriented staff. Ask yourself the next time you're shopping on a weekend or on a public holiday. Who's the one driving the bus? Who's the one serving you food in the restaurant? Who's the one serving you when you are buying stuff in the shopping mall? Well, the nature of my work is such that I'm busiest when others are not and vice versa. As such, I missed out on a lot of social occasions that I need to go but couldn't. It's time to play catch-up on those. Sorry people, if you've not been hearing from me, you'll do so soon :)



3. Shares? Market? Don't know if there's anything that needs to be done in this area because my cash is mostly drained out from the various bombs that hit me in this year and the last. I'll need to boost up my cash reserves first, so it'll take some time. I've already upped my savings target for this year to 55k (though it's no big deal because this year, I didn't take into account the money that I've to pay for the mortgage of the home loan). Still, I'm proud of the fact that I can keep a cool financial head despite all the turmoil happening around my life. I can handle the storm as they come. Next year I'm not sure if I can maintain my 50k savings (this time round, it'll be 50k after mortgage payment....gasp, a big big target), though I'll do my best to do it. Already did some back of the envelope calculation on how to get an income of 10 (actual target is 12k, but it'll take some time to achieve that). All I'm left to do is to execute it. No buts, no ifs.



4. Got to catch up on my reading. My perennial target of 52 books per year is still not hit yet. Not many days left to the end of 2011, so I better buck up on my reading. Left a few more chapters before I can do the review that I've promised on a book that I'm currently reading. Oh, need to finish up some drawings that I did too. I hate to leave work uncompleted - that'll always be a nagging feeling that makes me uneasy.



Probably will start blogging more often from now on. Can't leave my readers wondering what's happening right? haha!

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Adult quitting

When kids quit, they just stomp their feet and leave the game. The quitting is physical and mental at the same time. When we're adults, we can no longer quit physically because we either need the job or we can't afford to sour the relationship. So adults quit mentally. They would just stay in droning mode and do what is just needed in order not to quit physically, but their mind had already been switched off. They would do what is needed just to get the job (barely) done, but don't expect too much out of it.



I wonder how many people had adult-quitted at least some aspects of their lives? Perhaps most likely it's their jobs that they had quitted mentally. It's not necessarily a bad thing actually. When you can't find a job that fulfills you but you still needed to pay the bills that comes at the end of the month, you just have to suck it up and play adult quitting, until the next better thing sails along. Actually, I kind of think that the next better thing won't sail along...you sort of have to sail towards them incrementally. But that's another story altogether.



But adult quitting harms you spiritually. It is like a leech that sucks your energy, making you harder and harder to wake up in the morning just to do the job that you hate to do. You get less and less motivated and eventually this sort of quitting can affect other aspects of your life too. It's ultimately an energy sucking vampire. May I never be in such a situation in my life.

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Tech hack for android

I'm so glad I found the ultimate technological hack for android phones. Some of you may be aware that amazon had this new amazon app store, supposedly to cater for their new kindle fire tablet so that people can shop for apps through their site. They have this wonderful way to promote their amazon app store by giving free apps on a daily basis. Here's a list of full apps (not the lite version) that had been given away. I came to know of this when I was about to buy a fully paid version of officesuite pro, after trying it for a couple of weeks. I really need to access my spreadsheet on my phone effortlessly, so I thought getting a paid app is great for this specific purpose.

Unfortunately, the free apps is only applicable for US, not for other countries including Singapore. I searched around and came to know of a way to get around it. It can be found here. I tried it and it works perfectly. Great! So now I had a way to get my paid full version of officesuite just by doing a little sleuth work. Saved me $18.89 sgd :)

(On a sidenote, it's interesting to see how your thoughts can turn into reality. I've been thinking whether to get a paid app for my android phone for weeks, searching around for the best kind of office software for my uses. It happened that I was again looking around for such applications when I had an intense desire to just buy the app for 18.89 SGD. But I've no idea how I got into amazon apps in the first place (it's through one of the youtube links, bizarrely) and I happened to see a limited time offer for a free officesuite pro app, which is only limited for today only. Serendipity? Coincidence?)  

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Investing in your life goals

It's important to align your energy to fulfill your life goals. That's the only way to lead a purposeful and fulfilling life, isn't it? Why do you want to work so hard to buy things that you don't care to impress people whom you don't like? Once you recognize that doing certain things are not aligned to your life goals, then stop and prioritize your resources. Resources, like time and money (especially time), are limited, so we really have to think hard on where to expend it to achieve the maximum happiness and satisfaction.



People usually gawk when I told them how much I've spent on my housing. It starts from my parents, to my in-laws (I think they haven't yet know the extent of my renovation costs) and to my friends. But there's nothing that really satisfy me than to see a very homely property that I can call my own. In my vision of it, it'll be a place where many happy moments will be spent and where I'll start my family. It'll also be the place where I'll work and no longer have to travel around to earn my income. Many interesting conversations and laughter will be held at the living room when I invite my friends over for a simple meal. How is this not worth the money? I only lament that I didn't start early enough to enjoy it sooner. But life is seldom Utopian, timing is rarely perfect. We can only do what we can to make the best out of what life throws at us.

I guess I spent nearly 150k all in, which is nearly three years worth of my savings. That's what I call a substantial investment in my life goals. With it, I can utilize it for holding social gatherings, be independent and have a place that I call my own, work and possibly increase my career to the next level and lastly start my own family - all under one roof.



When is the last time you invested heavily in your dreams?

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Winter is coming

I'm seldom stressed about my financial situation because I don't really spend a lot and I save a major portion of my income. However, recently I've been trying to think out of my financial situation. Without giving specifics, I think I might have spent too heavily on both the COV of my resale and the renovation part. The COV of the resale cost me 40k and I don't even know what I'm paying for. At least for the renovation, I can see something tangible. COV? It's just an excess value above whatever valuation they come up with. It's something that I can do without. But this is Singapore - to get a flat fast in a matured estate, that is the price to pay.



The renovation bit is finally closed. Works out to be around 77k. Wah, jaws dropped... The bad thing about getting resale is that the condition of the flat is not that good. Hacking and planing the walls flat itself cost a few xxxx. I really really hope it's worth it after spending a big fortune on my house. If all things go well from next year onwards, I will be staying at home to work and making the best out of the money spent on the renovation. With such a big capital sunk into the home office, I've burnt my bridges. There's no turning back. I'll have to make it!



There's a couple of household appliances and furniture that still needed to be sourced out before the flat is livable. The major items include fridge, oven, dining table and a dining table for the study room (which is used for my work), sofa, a few tables (bedside table, coffee table, desktop for work), some lamps, a few fans, bowls and plates, cutlery, washing machin , cleaning equipment like broom, vacuum cleaner, mop etc. Did I put in TV and dvd player? No, I purposely left it out because that's going to be the last thing I'm going to need right now. That can wait...I'll have to do a few important things first in the proper sequence, so that my income stream can settle the cashout flow.



By end of this month, the bulk of my income stream would have run dry for this year. Hopefully my savings are enough to last me through the winter months as well as to settle whatever is necessary for the furniture and appliance part. I might need another 5k to tide me over, so perhaps I'll have to increase my saving target to 55k for this year. Just another 5k more to tide me through this extraordinary month, though 10k would seriously be nicer. If I can't hit that amount, I'll have to take off whatever bullets I have reserved for investments out. That would leave me with no emergency cash, though I still have quite a bit of holdings in equities that would serve as the emergency of the emergency. I don't think I'll come down to that though, unless I didn't stagger my purchases for the furniture wisely.


4Q plan:


1. Save up another 5-10k to bulk up my cash reserves before the winter month.

2. Work harder through the winter month instead of taking break. That would generate a low but still helpful cashflow in the winter months.

3. Stagger purchases of bulk items. More use of 0% credit installment, perhaps over 1 yr to ease out the cashflow bottleneck.


Wanted to put (4) Rely on help from family and (5) Buy cheaper and low quality furniture. No, I'll not do that. In life, one has to learn how to be independent, because ultimately, it's the way we can outgrow ourselves. It's also for the best because I'll be debt free - not those financial kind but the relationship kind. It's important for me to stand straight and walk tall among my family, so I'll best rely on my own. What about (5)? I'm thankful my journey learning the ins and outs of investing/trading taught me this very important lesson. Rather than buy cheap and low quality counters, it's better to be patient and wait for high quality counters to become affordable. Price shouldn't be the concern here - it should always be the quality. Get the best that money can buy so that time and energy would not be wasted hunting for new, cheaper ones again.



Alright, I feel better now. I just got to get it out so that it clears my mind. I know what I have to do now.


"Don't let the noise of others' opinions drown out your own inner voice." ~ Steve Jobs

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4 steps to problem solving

Diagnose, Treat, Comply, Maintain.


Sometimes it's so hard to help students. I would diagnose that the reason why they are not performing well in their studies is because they do not have enough knowledge in their mind. Practicing past year papers a million times (without reflecting) just practices whatever you know, so it would be very hard to increase your knowledge base if they do not read the textbooks or attempt to memorise from the notes that I've written for them. What's the point of practicing the same stale knowledge base again and again - there's simply no attempt at all to broaden that base. Hence the treatment is given to them to read / memorise the notes but they do not comply. Even the best doctor cannot cure your disease if you do not comply with their treatment upon diagnosis.



There are times when students complied to the treatment, but they do not maintain it. It's called losing momentum. These people started sprinting from the start when they have another 5km left to run. Unless they have extraordinary stamina, they are going to stop and rest and restart again. Pacing is therefore important in order to maintain the treatment. It's not going to be very effective if they work very hard for 1 week but cannot maintain it and slack for another 3 weeks.



4 simple truths to solve problems and I'm surprised it can be used in a myriad of situations. This is just from the preface of the book by Hill Harper - "The Wealth Cure" which Victoria Taylor from id.pr kindly passed to me for a review. Will be doing that shortly once I get some free time to really immerse in the book. I haven't even started reading the actual chapters yet and I've already learnt something interesting. I think it's going to be a good read.

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Quick thoughts on strategy

Been super busy at work now, so this is just a quick post.



With the market going down, I think it's time to think of a general strategy to make the most out of it. Since I've already sold what I wanted to sell, there's nothing much more than I can do to raise cash to prepare for the ultimate bear scenario. I've limited cash as I've diverted most of it to renovation and stuff, so I'll just have to make do with what I have now.



The best thing to buy during a deep correction is not reits. No doubt that the price of reits will go down together with the general market, giving a very good and high yield. I think I've enough reits for the time being, so perhaps a smaller bite of selected reits at opportune time will be more than sufficient for generating some steady stream of income. Reits are good when the market is not moving - that is it's trending sideways. That'll be a time for it. The best thing should be the blue cheaps. Some of the major STI components will be sold heavily down and it will represent the best place to look for value. Combined with a small yield brought about by the low price, it'll be okay to hold it and waiting for the general market to recover. In fact, blue cheaps should be the first to recover rather than the mid-tier counters and reits.



As of specific counters to whack, I think it's still an early phase down. The charts will show the way. Patience is needed here.

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3/4 year reflections and planning

There's a few things that needs to be done before I can open up my classes at home and start on a brand new chapter for my career. I thought it'll be good to list it down both as a checklist for myself and also to bounce off ideas from others who knew me from this blog. Let's begin.



1. Set up the physically infrastructure for the classroom.


As it is now, I've already set up a separate room from my new old flat. That would be the place to work for the next couple of years - an home office if you will. The class room has a wall and a half full of cabinets and shelvings, so I think that's enough space to put in the stuff and I needed for my work, perhaps with extra for my personal stuff too. It'll look something like this,  but not quite, because the flooring is of a darker colour then shown in this realistic computer rendered picture from my interior designer.

It should look bright and energetic. The green colour is specifically selected as a sort of colour therapy in education. I've read up some of this pseudo science regarding colours - orange and yellow is mainly for kids, green can be for teenage students (which is the bulk of my students) and blue is for hyper active students. I think green is the right colour to choose. A tad too neon bright for me, but still good. Keeping fingers crossed.



What needs to be done are the furniture for the room. I think a group size of 4-6 is big enough because I don't think I want to have so many students in one group. It's not going to be very efficient because everyone's learning pace is different, so I got to personalize the tuition for everyone in the group. Going to be kind of difficult if the class size is too big. Let's stick with that for now and adjust on the go a few years later. I'll be checking out Sungei Kadut very soon to see if there's suitable furniture for a group of 4-6 students. Not yet decided on whether to have a big table where people around it or individual small tables. Got to think it through.



2. Revamping my website.


I've a rather neglected website for tuition purpose. Neglected because I didn't really put in much effort to either promote it or utilise it properly. That's going to change. A few things needed to be revamped:



a. Logo - that can come a bit later. Eventually going to start getting some notes/guidebooks/assessment books on my own, so a logo should be a good place to start on. That's just too many things that needed attention, so this would not be the main priority for me right now. The main focus is to get things started, and I can adjust from there onwards. I simply cannot wait for conditions to be perfect before I begin, otherwise I might never begin.



b. Getting testimonials from parents / students. Since I do my business from word-of-mouth alone, testimonials are important to me. But I haven't been pursuing them! Got to start getting written testimonials from existing and past students. Nothing fanciful, just a short paragraph detailing their experiences (both good and bad) with me. They can write their results if they want, but I'm not going to insist. I don't want to go into showing statistics on how many percentage of my students get A1. You can force a student to get A but they might hate the subject forever. Nah, it's too much of a burden to bear for their lifetime hatred for any particular subjects that I teach.



3. Namecards


In the past, I am rather fearful of getting too many students because I only have limited time to work. I don't like to disappoint people by rejecting them, so I didn't go all out to market myself. In truth, I didn't market myself at all. It's through the much appreciated support of students and parents that I manage to find students every year. Now that I've got the capacity to take in more people, it's time to go aggressive in the marketing of my business. I got to print out some name cards to distribute. A small batch of maybe 200 to begin with might be a great idea. Eventually when I've the time to design a logo or ask someone to do it for me, I'll begin a larger print. Sourcing out some quirky designs from websites online. I found something nice for SGD 100 (inclusive of shipping), so might go along with that. Perhaps I'll check out local shops too. But the problem with local shops are that their designs are pretty sucky (forgive me, I've been to a few and they disappoint). Perhaps someone might recommend me someone trusted?



4. Read up on marketing


I've no background on marketing before. But after reading Adam Khoo's book, "Secrets of Building a multi-million dollar business", I've an inkling. Probably need to read up on some of the marketing strategies and techniques. No point being a good teacher if nobody gets to know about it right?


Many many things to do in the coming few months. Firstly, I've got to settle this batch of students. Their exams are drawing nearer and nearer and the drums of war are already beating hard. After that, I'll take a short break to clear my mind for the new year ahead and begin working on all these. Lots of work to be done.


Appendix

After much research following the various comments, I confirmed the 'maximum 3 students' rule given by URA/HDB. Here's the verdict:

Ok, so be it. 3 students max at any one time. Shouldn't be a problem at all, as I do not intend to make the class size big anyway. For all other people who's following my pathway, there you go - the official statement.

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The 50k game

I've hit my target of 50k for this year 2011, and I'm ahead of schedule by a month. I remembered when I started this 'insane' savings program in 2009, I was struggling each month to hit the required amount. I had to consciously and subconsciously remind myself that I need to put in that bit more effort and to push that bit harder to put in more hours in my work to get that bit more just to hit the savings target for the month, before starting all over again for the following month. I did that until I reached the amount of 50k. It was really a struggle in the first year.

In my second yr 2010, it was much easier. Perhaps it was due to the fact that I had done it before, hence I know the mechanics and means to achieve the same thing. The first year was the hardest because it taught me a few good lessons regarding sustainability of my effort and the importance of planning ahead to restrict the number of graduating students (those taking O'lvls and A'lvls) I had in a year. I realised that I can push myself up to a certain limit before I start to get annoyed because of a lack of proper rest and simply just a lack of off-time from work. In the first year, I geared up to the max because I wasn't certain I could keep to my target (I intend to hit my target, no matter what). The result? Periods of moodiness and mild depression. I learnt from my lessons and applied to year 2 - 2010. I didn't push myself to the limit and it was the year that I first started taking planned breaks from work. There are times that I hit my monthly savings target in that year, so as a reward for myself, I took a day off or cancelled my classes. I realised this little break off work makes me more happy than the amount of money that it can bring me, should I chose to work. The subtle change in how I value my time makes a very important change in my life. This journey is a life long journey, hence I mustn't burn out prematurely.

The second important lesson I learnt in yr 2 - 2010 - is that of having a quota for the number of graduating students I have for any particular year. The main reason is that these days, the exams start in the afternoon, so by the time the students come back home from school, it's nearly evening time. There's simply not enough time for me to go around and help those needed ones (most students I took are not the As students, so most of them needed some last minute psycho-ing and just some general revision before exams to sooth their nerves). I'll feel guilty for not being able to be there when they needed my help and encouragement most, especially when I know I can make a difference. The other reason is that by maximizing the number of graduating students, the following year I'll have less recurring students, hence there could be a drastic drop in income. Remember that towards the end of each year, I'll be 'retrenched' and I'll have to work hard to enjoy the same salary that I had the year before. I'm trying to remove this sort of limitations by having group lessons in the future, which would satisfy both my financial need to earn money and my desire to reach out to as many people as I can handle. That would be a great way to solve this problem.

Going forward, yr 3 - 2011 - is the most relaxing year to save my 50k. Coming from me, 'relaxing' had to be taken with a pinch of salt. I still had to work 7 days a week, I still have to work when I don't want to work and I still have to teach students that I don't want to teach. So what's the difference? The mindset changes everything. It's just plain ol' good savings habits that I developed over the years. I'm so used to saving this amount of money that I don't have to track my savings so conscientiously. Years of tracking my expenses and income made me so aware of my peak income months and peak expense months (usually those months where I had to pay off lump sum items for the year, like insurance) that I don't have to track it so carefully. I know if I do this amount of work, I can 'agar agar' save this amount of money. Hence without caring whether I had hit my savings target for this month and that, it actually relieves the pressure off me, thus making it much more relaxing this year. It's like a dance routine that  I had been practicing for 3 yrs.  Even blind folded,  I can feel the beat of the music internally and my well rehearsed muscle memory moves my body rhythmically with the melody. It's a dance that I can do again and again and again.

But no, this is not how it should be done. I die in peace and become alive in war. It's time to move on to new grounds and break new limits. As such, the new target of 100k couldn't have come at a better timing. Oh I do have a lot of motivation to save that amount. It's like a game to me., a dance if you will.  I play my savings game hard and I play it seriously, because I know that if I succeed, the rewards are not the amount of money that I can use, it's the satisfaction and the comfort of knowing that I can do what is seemingly impossible. I might not be able to do it by next year, but who knows until I've tried.

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Reduction in interest for banks

It would seem that the banks to not want our money at all, because they had reduced the interest rates across the board. The majority of my cash is found in posb and standard chartered bank account, hence I only showed these two. For readers with other bank accounts, you might want to check out. I think it's quite uniform across the board.

POSB

Effective date: 14th October 2011

SCB

Effective date: 1st Sep 2011

Does it make a difference to you? It doesn't make much difference to me, since I don't have the bulk of my networth in cash. Used to have a lot more cash of course, but had been paying for my renovation and furnishing. The bulk of my cash used to be in MMF, which at last count, gives an annualised rate of around 0.42% to 0.46% (depending on how you count it). However, with the recent drop in interest across the board for both savings and fixed deposit accounts, I think the returns for MMF will also drop further. 

That goes to show that one needs to know about investment these days. You simply CANNOT survive on fixed deposit or worse - savings account. You've got to dirty your hands in the market because the consequence of not doing so can be quite dire.

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Credit card management

Recently, I've been spending big amount of money - swiping here and there, signing here and there. It's all because of the renovation work being done in my resale flat, so there's a lot of one off expenses that I need to settle during this period of time. While the main contract work is paid by cheque (it'll be excellent if they would accept credit, haha), the rest of the fixtures and furnishings are paid for separately by credit or cash. Hence I need to do some background work on which card to utilize in order to maximize the cash rebates or other benefits dished out by the various cards that I have.



It's interesting how not too long ago, I had been complaining that the credit card companies are biased against self employed people like me. But I realised that after you've proved yourself capable of bearing debts, they will be more likely to give you credit. That's the way banks do their business I suppose - giving more credit to people who are already in debt, haha! Anyway, I've the POSB everyday card, SCB's Manhattan card that I've recently received, Citi rewards visa and Citi dividend card and lastly, though not a credit card, SCB's Xtra saver debit card. The main card I'm using is POSB everyday card. I've even tied my ez-link card to it to enjoy the 'cheat code' so that I can save time and get paid  for doing automatic ez-reloading feature.



Usually, because of the low frequency of my spending patterns, I don't bother with the rebates. What's 0.3% or 0.5% if I'm spending like $50? It doesn't really add up much. I don't have a home yet and neither do I drive, so the rebates that really matter (those 5% on groceries and 15% on petrol) do not matter to me. However, since I'm going to be spending perhaps 4 digit figure per swipe of the card for furnishings and furniture, I've to do some credit card management.



Here's a list of the major benefits of each card that I own. I didn't put in the Citi rewards visa because I'm primarily concerned with getting cash benefits instead of points. I also didn't include many finer detail that doesn't concern me at present, specifically like groceries and petrol rebates.

Beary ge recommended me the SCB's Manhattan card, which I've applied and received and maxed out my benefits. It used to be much better, but the last change to the benefit structure removed some of the goodness. Nevertheless, still one of the best cash rebate cards around. Since the cashback cap is $200 per quarter, that means a maximum spending of $4,000 will get you there. I've already maxed that out with a recent purchase of some fixtures, so I won't be using that card anytime soon. I think the Manhattan card is excellent for purchase of big ticket items. You can even do some tricks to get $200 per quarter by doing some advanced payment of certain things. There are blogs that teaches you to do that, just search around.



The one that I'm using as my main credit card - POSB everyday card, is good for purchases of items from Watsons and carrefour, both of which I'm not a big fan of. Thus, the only benefit is the 0.3% rebate under the category of 'all else'. 0.3% rebate means for every $1000, you get $3. This is not going to be a big deal if you spend less than $1k, which is why I don't even bother to find out the various rebates offered by the different credit cards initially. But for the everyday card, it doesn't come with a cap for the rebates, neither do you have to wait for 3 month before the rebate money is sent to you. The cash rebate will be credited to you once you spent the money. Whether I get the rebate now or 3 months later is not a big concern to me though.



I think that I'm under utilizing my Citi dividend card. I realised (today) that they offer a 2% rebate on all restaurants. Not sure if I'm reading this wrongly, but 2% rebate is much better than the 0.3% rebate that I use to pay for restaurants bills using the everyday card. A restaurant bill of say $60 for 2 person will get a rebate of $1.20 using the citi dividend card, whereas it's only $0.18 using everyday card. And that's not including the more places where there's a discount using the citi bank credit cards in the first place. Knowing this, I'm definitely going to swipe the dividend card when dining next time. There's a cap of $800 per year for the cash rebates though and a minimum of $50 per quarter before you can cash the money out.



Lastly, the debit card from SCB's xtra savers account. This is really a wonderful cash rebate card. Depending on the amount of money you have inside the account, you'll have different strata for cash rebates. I'm going to top up my money inside the account to go beyond 50k to enjoy the 3% rebates. There's a monthly cashback limit of $300, so if I have 50k or above inside the account, the maximum I can spend inside there is $10,000. That's a tall task in a normal month, but these few months are not normal at all.



So this is the plan for the purchase of the fixtures and furnishings. For the first $4k spending, I will max out the quarterly cashback for the SCB's Manhattan card to $200. Then for the next $10k spending, it'll be using the Xtra saver debit card, subject to a cashback rebate of $300 per month. If I do not have enough cash to pay straight, I'll use Citi dividend card to get a 0.5% rebate on any amount spend (up to a cap of 160k - amount that is way out of my spending budget). Alternatively, as long as there's a 6k and above balance in the xtra savers account, I should use the xtra savers debit card to get 2% rebate on any spending, up to 15k a month because of the monthly cap of $300. Of course, one would have to know exactly how much had been spent on which card - information that is easily available since I tracked my expenses closely on a per transaction basis.



On more normal months where I do not have such huge expenses, I would probably be using more of the citi dividend card for restaurants instead of everyday card now. If I do not require credit and I have more than 50k in my xtra savers account, I'll use the xtra saver debit card. I doubt in a normal month, I can spend enough to hit the monthly cap or the quarterly cap anyway, haha!



Let me go transfer money into my xtra savers account to reach 50k now.

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You have nothing to lose but your chains

I was just chatting with a few others in the cbox yesterday when I was reminded of how important it is to recognise and acknowledge one's self limiting beliefs. Recognising and acknowledging that it's a problem is probably the first step towards doing something (as opposed to just talking) about the problem. After all, if you do not see that there is a problem, you won't spend an iota of brain power to solve it. In other words, after much talking, it's back to square one if you don't think that it's a problem.



I immediately thought of the times when I first started out as a full time private tutor. You cannot believe how many nay-sayers there are that told me I should be getting a proper job. My parents are also saying that I should be getting a full time job until they sort of gave up a few years ago. External factors aside, I think the most important thing about this whole episode is how I handle my self limiting beliefs that hinders my earning power. Here's a list of them and how I managed to break every one of them:



1. I cannot charge more than $22 per hour because some person whom I trusted told me that the going rate is $22/hr. I justified to myself that I'm paid this low because I was a 'newbie' and I wasn't experienced, even though I'm a graduate with a good class honors.



This anchoring effect took me several years to 'correct'. I realised that I was justifying my low pay not because I wasn't experienced or whatever, it's simply because I am not confident enough to charge a high rate. That is stopping me from getting a higher pay even though I was working a lot of hours. I remembered that I was trying to find out how many students I had to take in order to get 5k per month. At 22/hr, I needed  114 students, or 16 two-hour lessons per day, which is impossible. I back calculated to find out what's my maximum income (based on my many self imposed restrictions on working hours) - it's around 2.7k per month. Not exactly a very good amount these days.



This woke me up from the 'dream'. I immediately took action to correct this and never looked back since. With the higher per hour rate, I eliminated a lot of other problems (no payment of fees, disciplinary problems, very low motivation students, low referral rates...) that comes together with the low pay.

2. I cannot work during dinner time because students need to have dinner. I need to have dinner too, so I don't work during normal dinner time. I cannot work late at night because students need to sleep early to prepare for school the next day and I can't get public transport back to my home. Night is also 'rest' time for normal working people, so I don't work after dinner time. I don't work on weekends too because I needed a break.



SO MANY restrictions on myself, all SELF IMPOSED. Because of my need to eat dinner at the proper time and to have a weekend like a proper working adult, I was depriving myself of working hours. Coupled with the low pay, I wasn't basically just part timing this thing instead of doing it full time. What do I do during the non-working hours? Doing lessons plans and preparing for work - things that do not pay me but I deemed important in order to justify my tuition fees, however meager that amount is at that time. As mentioned, it took several years to correct that problem. I simply wasn't out to earn a living. It is like I'm trying to learn how to swim by trying to read a lot about swimming. In fact, I was doing anything BUT teaching. The moment I realised that these is a major problem and that these are just excuses, I leap frogged my earnings multiple times. It isn't that I'm selling my soul or passion for money - no! In a poor man's mind, it's either this or that. You can either have passion or you can have money, but not both. In a rich man's mind, you're always thinking how to be rich and passionate about your job. In fact, the more passionate about your job, the more money you can make AND the more money you get out of your job, the more passionate you are about it (up to a certain limit of course, but I wasn't anywhere near that limit back then).




3. I cannot take too many students because during exams period, when they needed help, I won't be able to spare the time needed to help them. 


In civil engineering, I learnt about queuing theory. In a queue, there is always someone waiting. If you're waiting for a bus, that's because the transport authorities think that it's more worthwhile for passengers to wait for a bus, instead of having many more buses waiting for passengers to arrive. If you're waiting in a long queue to buy a product, it's because the company thinks that it's more worthwhile for the consumers to wait to buy their products, rather than having more products in store waiting for consumers to come buy them. There's always someone waiting!


AND I happen to be on the wrong side of the queue back then! I was waiting for students to come to me. I was at their beckon because I was having so much free time and not enough income, so once they gave me their timing for the lessons, I'll just say yes. That gives me low bargaining power. These days, I'm packed to the brim with students, so the tables are turned and the students are waiting for a free slot to meet me instead. Again, I'm surprised how many other seemingly non-related problems I eliminated by switching the queuing party. Once the students realised that I'm more busy, they started not to waste my time - they get more motivated to do whatever stuff and ask me the really important things during lessons (because they might not get to see me as and when they are free). People think that a busy tutor must be a good one (not a bad assumption but not necessarily true) and I get more referrals. Students quality gets better since I not only handle the really unmotivated students but I get highly motivated ones. I get more satisfaction from teaching motivated students and I get paid more. Everybody wins.



It's so surprising how a bottle neck problem, once identified and rectified, can solve several other problems downstream. Likewise, it's important to know that one or two major limiting beliefs are causing ALL your other problems. It can be stopping you from a breakthrough in your career, a happy marriage life, a good income and on and on. So, instead of spending energy coming up with one thousand and one reasons why you CANNOT make something happen, just think of ONE good way HOW to make something happen.  This is much more useful and practical since you're the only person who can dig yourself out of the shit hole that you've found yourself in.

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Divestment of Cache

Not too long ago, I divested Cache Logistic. I thought my entry and exit are pretty well done, so I clipped an image of the chart showing the day and price that I got in and out to remind myself of the finer detail of this wonderful trade. An excellent entry should be complemented by an equally excellent exit.

Entry date: 16th March

Bullish divergence on MACD on daily chart with the price breaking the downtrend line. I absolutely love this kind of set up and will most likely trade whenever I see such patterns. I also like the sharp spike in FI, which signifies a capitulation of sorts. This is not true when FI spikes up instead.. Somehow the chartnexus chart incorporated the dividend into the chart, so the lowest point of the chart is 0.882, which is my entry point after taking into the dividends received till to date. Entry on the lowest price of a white candle. Fortune must have looked this way when I bought it.


Exit date: 1st Sept

A big A is generated, perhaps will be followed by a B and eventually a C. It's good to reduce positions when it's in phase B. If not, might have to ride it all the way back down below the price of A. I saw a significant top around 4th Aug, with a price of 0.98, so thought it might be a good idea to sell off at that level. It happens to hit that level and I got out of my position. Exit on the highest point of the day's range. Doubly lucky!


Will look forward to getting back this counter.

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My new handphone!

Avid readers of my blog would have noticed the slower pace of posting in bullythebear. That's because of the hectic seasonal nature of my work, so it's really tiring to sit down and type out a post instead of relaxing by reading a book or stoning in front of the computer watching streaming movies. But let's talk about spending money today, haha!



I just got a new handphone not too long ago. Every two years you'll see a post on me buying a handphone, so do allow me to do a little tech review here. I've been eyeing the Samsung Galaxy S2 for quite some time before really sinking down the money to buy it. For a two year plan, you'll have to fork out 400-500 bucks to get a new one from telco. The good thing is that I waited 1 month between being ineligible to buy and actually buying it to 'think it through', so the price dropped from nearly 500 for a new year plan to $398. All the better for me, of course! I needed some time to think it through because I'm not sure if this is actually worth it. 400-500 can be the price of a tablet or even a laptop. But I figured that I really wanted a handphone that doubles up as a miniature computer so that it's portable.

Rule #1: Give yourself a waiting period before purchasing big items to cool off your impulsive desires. This will give you time to decide if you really want it or it's just a way to fill up some emotional gaps in your life.

With the price tag of around 400-500 for a handphone, it is as good as an iphone. I've mentioned in the cbox that iphone is used by commoners (go ahead and flame me!). Whenever someone whips out a smartphone on trains or buses, it's bound to be an iphone. So that really shows the popularity of apple products and their immense branding. However, I did some asking around and researching around and decided for myself that android is a better operating system for me. It helps also that most of the usable apps in android are free of charge too, even those that needs paying in the apple apps store (stark example: whatsapp $0.99 in apple store vs whatsapp FREE in android market). Nothing beats free right? The samsung phone is cheaper, faster, more spacious and has a bigger screen compared to iphone, but some people still wants an iphone, haha :)



Rule #2: The most popular choice might not be the best choice for you. If you want to follow others like lemmings down the cliff, go ahead.



The deal breaker for me is that I've earned enough money besides my normal income especially for the purpose of replacing my aging handphone. I was doing some trading on iphones earlier this year and earned around 1k for my effort. I've blogged about this in the past - if I want to buy an item for 1k, I'll earn extra 2k besides my usual income so as to 'grow' bigger than my problem and act as an incentive to save even more. It reinforces the 'growing bigger' and 'spending within your means by growing your means' concepts, which I think is another way to look at things for me.



Rule #3: Before you plonk down your cash to buy the latest gadgets for yourself, earn two dollars for every dollar that you're going to spend on that gadget. This will reinforce the concept that you have to grow bigger than your problem and also to live within your means, not by saving more, but by earning more.


I'll write some reviews for the apps that I've downloaded from the android apps store that works for me. Stay tuned for these apps review!

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Cash flow management I

We all heard how important managing cash flow is. In business, if cash flow management is not up to par, it'll lead to bankruptcy even though the company has a strong balance sheet and income statement. Cash flow is the life blood of business, and so it is also the life blood of individuals. It is really just about tracking each drop of cash that comes in and out of your bank account so that you know where the cash flows to at the end of each month or each accounting period that you decide.

How to begin, one may ask. I think the very first thing you need to do is to begin tracking the cash that flows out of your pocket every day for a month. If you can have the discipline to do so for around 4 months, you'll get a good picture of what your baseline expenses are. Baseline expenses are what you have to spend on things that are necessary, like food, housing loans, pocket money for kids and parents, bills and so on. Those are the fixed expenses, as opposed to discretionary spending like the occasional gadgets, a new tv or a holiday trip. Discretionary spending are, well, discretionary, so they are variable by nature. It doesn't occur every month, or at least, they shouldn't.

If you sum up your variable, discretionary expenses with the fixed, baseline expenses, you'll get the total expenses for that particular month. It sounds easy, but it requires a lot of discipline to actually track and record every transactions you make. Try it, and see if you can last a week. I think everyone can have the discipline to do this, it's just whether you are properly motivated or not. If you don't see the point of doing so, then you won't be motivated to do it. As for me, I've been tracking my expenses of 3-4 year now. I started off wanting to do it for 1 month only, but it gets kind of fun knowing exactly where my cash flows to at the end of the month, so I carried on doing so. Now, I can tell you a very good estimate of how much I spend per month.

It's as simple as to begin tracking down your transactions

That figure is one of the aims of tracking your expenses. If you know how much you earn per month, and you know how much you spend per month, you can tell if you have positive or negative cashflow. Positive cashflow occurs when you take in more money than when you spend them i.e. cash inflow is greater than cash outflow. Negative cashflow, on the other hand, occurs when you spend more money than what you take in i.e. cash outflow is greater than cash inflow. It is obviously better to have more months in a year where you have positive cashflow.

The only way in which you can have a positive cashflow is to spend less than what you earn monthly. There are no two ways about this. Assuming that you have positive cashflow, so where do the difference between the cash inflow and cash outflow go to? It becomes your savings! It is only when you are disciplined enough to control your expenses below your earnings that you are able to save up every month from your take home pay. If your expenses is 50% of your earnings, then you will save 50% every month. If you spend 80% of your earnings, then you will save only 20% every month. What you do not spend is yours to keep, so try to keep at least 10% of your monthly take home income. If you manage to do that, for every $1 that you earn, 10 cts will be yours to keep!

It's important to have a healthy saving habit. This cash is important to kick start a lot of programs that are beneficial to you downstream. Without this stream of cash that comes upstream, you will have to work forever just so that you can live each month paycheck to paycheck. The good thing about savings is that you can use this to do 3 important things: Emergency funds, Insurance and Investment. The first, emergency funds, are used to deal with immediate life changes like retrenchment, medical fees (the initial cash component that is not paid immediately by insurance) or a punctured tire. The second, insurance, is meant for protection against the loss of life, limb, health conditions and the ability to carry on making an income that generates the cash inflow in the first place. The last, investment, is meant to grow your savings into a bigger sum so that you can achieve the financial goals of your life.

So try it! Begin a new and financially healthy life by good proper cashflow management!

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No eye deer

The very recent market weakness shows how true your steadiness is, in the face of potential losses. There are many newbie market participants who started this journey after the horrible financial crisis and had never seen the market crashing 5% every other day, plummeting the so called defensive stocks like blue chips and high yield dividend counters into smithereens. Well, if you had never witness your portfolio blown away by perhaps 50% or more, if you've not seen the value of your stocks decreasing day by day until to to the point of giving up, whatever fancy theories about holding long term and buying when ABC counter is at X level (where X is usually way below current price) is just bullshit. Merely untested action plans for a bear market that is planned for in the bull market.



There are also people who seems that they are not prepared for a protracted bear market. Seriously, unless you have the unlimited bullets cheat code, you should never fire until you run dry. A typical correction on an uptrend will last perhaps only 1 day or so, but a protracted bear market (where the normal movement is down and punctuated by short upwards correction in price) can last for many months. You certainly do not want to fire at a horde of enemies, emptying your clip, thinking that the worse is over when the next wave of enemies come rushing at you. Bam bam bam, click... The hardest thing is therefore to decide whether a 'crash' in the prices is really just a correction or the beginning of a bear market. You can look at the charts to tell you, but ultimately, when it comes to action, you'll have to employ smart money management. The oft mentioned rules apply - don't put in too much in one counter, always have some cash at hand (even if it is eroded by inflation), fire sparingly...blah blah blah. I'm sure there are plenty of books / blog articles out there that will expand this topic further for your reading pleasure.

When market is highly volatile, you're start seeing a lot of talking heads coming out to talk about the market. Some will no doubt tell you that the worst is over while others will say that they had sold out all their positions and are waiting for STI to reach XYZ. I remember clearly during the great bear of 2008, there are some people in the cbox that mentioned that he had sold out all his positions and is waiting for STI to reach 2000. Eventually when the level broke, he began waiting for STI to reach 1800...then 1600...then 1400...then 1200. I'm not sure if he succeeded in waiting until it reaches there (I think the lowest is around 1450) and bought while the market clears the pivot point and turns around decisively. The point is that there are always people on both sides of the camp - that's why there is a market in the first place. There'll always be people more bullish and more bearish even if the same facts are presented to both. This is where, you, as the sole manager of your own money, will have to decide what to do. While the market is in the recovery phase currently, do your action plan and know what you would do if the market reaches this and that. Know what stocks you're going to get and at what price. Know how much capital you're going to spend at which junction. If you have a plan, you won't freeze like a deer looking at the headlights of an incoming car. In the market, making no decision is a decision. You're just simply passing the opportunity to make a decision back to the market to decide for you.



Is the worst over for now? We're certainly not doing those 3-4% movement per day now but I'm not that optimistic. I'll defer buying because 'the sale worth waiting for' could be coming. Anyway, I've already bought some counters back at great prices in the last round. If anything, I'm actually looking to sell some positions. But don't believe me, I'm just the talking head that I mentioned earlier on.

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Stressed

Lately I'm not in a very good mood. I think I'm in quite a stressful part of my life as a lot of things are happening at the same time. Stress is when you are caught in a situation where you are not familiar with, yet you have to perform it as perfectly as possible because the consequence matters. So how do I extricate myself out from this stressful position?



1. Familiarize yourself with the situation

Practice will help to familiarize yourself with the new situation. However, it's not that we can practice and practice. Sometimes the important things in life, you can only do it once and once only. There's no second chance or third chances either because the consequences are hard to bear with or simply that there are no more occurrences.

2. Don't aim for perfection

If you do not aim for 100%, the stress level would be reduced but not eliminated. That should help a great deal in certain situation. I think for a perfectionist, anything less than perfect is unacceptable. I would say that I used to be a perfectionist, but it's such a miserable to be one and it's miserable to be near one, and so, I have to change. Try my best and let god do the rest, I always say.



3. Make light of the consequence

Perhaps the consequence isn't that bad, if you think more in depth about it. Okay, maybe not in depth, but philosophically about it. Life has many forks and just because the pathway you chose is blocked doesn't mean you can't get back to the same path through another lane. I think understanding that most decisions are small and insignificant towards the really important things in life would help to alleviate that stress.


I'll try to remember that 'stressed' spelt backwards is 'desserts'.

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Kena whacked by bears

Changed a new header to reflect our current situation now. Don't they say that we have to change according to the times? Haha! Well, the times are so bad, with the market eerily mimicking the great financial crisis in 2008. Perhaps I should change the blog title too haha!

This is called kena whacked by bear

But why am I not unhappy? If you take the circumstances that we are at now, where everyone is losing money because their portfolio is being sold down without care, then I should be very sad indeed. But I'm not. If you look at the things that you have right now - like good health, like a paying job, like your loved ones, like a cup of afternoon tea with kaya toast - the loss in your portfolio might not look so bad. I'll link up this post that I had in the past because I thought it's relevant once again - "How my world came tumbling down".

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Home mortgage insurance

Not a lot of people talk about home mortgage insurance, so maybe I should start the ball rolling. This kind of protection is good if you have a mortgage for a property and you want to insure against the risk that you will strike the big three - critical illness (CI), death, total permanent disability (TPD) - while you are still paying the mortgage loan for the property. If it strikes you, then you don't have to pay for the proportion of the mortgage loan that you are covered by the home mortgage insurance. For example, if you opt to cover 50% of the total mortgage loan only under the insurance plan, then when you are struck by the big three, your part of the payment of the mortgage loan will be paid for by the insurance company. If you opt to cover 100% of the total mortgage loan, then the property will be paid fully. Another thing about home mortgage insurance plan is that it is a decreasing term plan. Decreasing means that the amount covered will decrease yearly, which is good because you paid up the mortgage every month so the amount of loan outstanding will also decrease. This should cause the premiums to be cheaper than say a level term. Term plan means that it will stop coverage by a certain age, usually 65 yrs or until the duration of the loan.

Since I bought a resale flat by HDB, they offered me their own brand of home mortgage insurance called the home protection scheme (HPS) offered by CPF. I ran into some problems during the health checkup phase (they sent me a letter saying that because my sum assured was too large, I'll have to go for health checkup) so I wasn't covered by the HPS eventually, though they told me I can re-apply again after 6 months with a report on my health status. That was when I began to check on private home mortgage insurance plans offered by insurance companies.

I found out some interesting observations by making some comparison between the quotations offered and the standard HPS plan. To make it transparent, I was comparing Prudential's PruMortgage against HPS for a 30 yr loan period, 100% coverage of mortgage loan. Here's what I found out:

1. I found out that HPS is more expensive than that by PruMortage. The premium for HPS is 27.1% more expensive compared to prudential. The absolute amount we're talking about is a few hundred dollars (<$200) per year.

2. To make a fairer comparison, I multiplied the premium of both plans by the number of years that you have to pay the premium i.e HPS is 27 yrs and prudential is 30 yrs. I found out that the total premiums paid for HPS is still more expensive than that offered by prudential. It's more expensive than prudential by 14.4%. The absolute amount works out to be 4 digit figure (in my case, it's less than 3k). I just realised that for prudential, there is no need to pay the premiums for the last three years of coverage. This is similar (but not the same) as HPS, which states that the last 10% of the yrs of coverage, you do not have to pay premiums. This means that for shorter mortgage duration (<30 yrs), the total amount of premiums paid for prudential should be lower than that of HPS. For 30 yrs loan period, there is no need to pay premiums for the last 3 yrs of coverage for both HPS and prudential.

I liberally took this from another blog : I hate to plan - http://www.ihatetoplan.com/

3. Actually, the difference in premiums isn't that much after considering the total premiums paid for both plans (for mine, it's less than 5k difference). But is the coverage similar too? A resolute no. For prudential, you can get a crisis waiver that is somewhat like a CI rider on top of the basic plans. The premiums are waived if the conditions for CI are met. This means that all the big 3 strikes are covered. What about the HPS? They only cover TPD and death. 

4. When the conditions for claims are met, the HPS do not give cash at all. It is paid directly to HDB and you will not touch the claim amount at all. For prudential's plan, you are paid in cash if the conditions for claim are met. This means that the options becomes more varied because you can treat the prudential plan like a normal term plan that insures against your health and death risk, besides insuring against the risk that you're unable to pay for the mortgage loan. I might choose to carry on this plan even after I've finished my mortgage and treat this as a normal term plan. Have to find out if this is possible.

5. The premiums for HPS is paid through CPF, so there is no cash outlay at all. However, the premiums for prudential's plan is paid through cash. I've no CPF contribution at all, so it doesn't really matter to me which payment mode is better. But I do suppose that this could be an important consideration, especially to those who have tight cash flow. If you can pay through CPF, that is one less thing to pay out of your pocket. I believe this could be the ultimate deal breaker to choose between HPS and other private home mortgage insurance plans.

Now, who would have thought that CPF's HPS would be more expensive than private home mortgage insurance plans? I certainly didn't think so. Do take note that I'm not a financial advisor nor do I pretend to be so. Without insulting my readers who are all discerning adults, I wish to lay down my disclaimer. The whole of this article are based on my possibly wrong interpretation of facts and analysis, so if you are interested, do find out more from someone certified and qualified.

*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

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