Tanko: strategic missteps #home upgrade

Posted on by tiger40490 rendered_on [ Thu, 6 Mar 2025 ] 15:55 UTC

See also

Most SG wealth management programs require SGD 200k, so I will use this sum as a starting point.  In my mental picture, many investors start with 200k risk capital (typically in their 30’s [1]) and slowly build up to 500k. Along the way, we all make gains and mistakes.

I guess many (90%?) of us become too aggressive too confident too complacent and take on too much risks, almost like gamblers (rather than prudent investors), and hit over-sized losses.

I feel I have been less unlucky so far, but how long can my luck last? I remind myself that my SEA properties may get into trouble.

[1] When I paid $180k for my first HDB, Tanko and ML.J were both surprised. Also, the 2020 OC survey found 2/3 of Singaporeans has savings insufficient for 6M. But this side question is a distraction on the current blogpost.

— Tanko on huge mistakes .. When I described wq.l’s low burn rate with 5 kids, and my $4k/M carefree life, Tanko felt that cash flow can *become* a stressor for himself and esp. for his brothers with modest-incomes, even though they both seem to be as frugal as Tanko. Tanko said they really need to be careful and avoid huge mistakes. I feel it’s very likely (more than many think) to commit huge mistakes due to strategic miscalculation (like a military mis-judgement).

Q1: what big mistakes have I experienced or seen in my family?
A: 1997 trading loss
A: Majestic Village
A: sister’s high personal debt
A: lawsuits like https://1330152open.wordpress.com/wp-admin/post.php?post=15308&action=edit&classic-editor and sister’s ccard debt

Q2: any potential, hidden, missed pitfalls on my path ahead of behind ?

  • buy a luxury car (like 100k), which has no investment value and purely a consumption asset
  • How about my UChicago MSFM investment?
  • buy a luxury residence with low rental yield and high maintenance cost including pTax
  • career change of no-return. I think many techies become managers, unable to come back to hands-on jobs due to age, churn, IV-moat etc. This item is not directly relevant to net-asset, but career longevity is the real bedrock of my ffree, security of family livelihood

— free cash .. is breeding ground for strategic missteps. When you receive a windfall cash payout (inheritance, or selling a website like getrichslowly.org), the free cash is an example. But there are more common examples like bonus…

Many investment advisors start by asking how much free cash you have.

cash -> OA -> SA “top-up” actually prevents Singaporeans from wasting their hard-earned savings on wrong investments, including top schools and luxury private properties.

— pattern: big mistakes are often related to unreasonable desires

  • eg: if you have a 3k/m burn rate, but buy a 2M luxury residence (as in HK, Beijing or SG), it wipes out 50Y Fuller wealth in one go. This one mistake can sink you into low ground, and end your peaceful ezlife.
  • eg: a branded college would cost 300k. Two kids would cost USD 600k or about 20Y Fuller wealth.
  • eg: a school district home also costs a lot more than a regular home by $300k, but the extra $300k is often seen as investment.
  • eg: if you start taking drugs it could ruin your life
  • eg: if a married person starts having affairs, it could ruin a peaceful life, though many stories seem to present it as non-consequential.