Category: day2day

##[17] frugal indulgence #din`

Posted on by tiger40490

By “indulgence” I mean things not absolutely necessary for work, study or well-being. Creature comfort.

Depriving yourself of all indulgence is harsh/punishing , unfair/unjustified, and unsustainable.

Q: is there a (cognitive) conflict and tension between ctbz and frugal indulgence?
A: not sure. Frugal indulgence is supposed to be guarded by my ctbz habit, so frugal indulgence should not create guilt or degenerate into lifestyle creep

Frugal indulgence are personal. (In contrast, luxuries are more universal, like nice clothing/gadgets, spacious and new home/hotel …) Look into your heart. Each of us need to identify those nice little luxuries with the highest pleasure and enjoyment for “ourselves”. For me:

  • [Feb 2023] Saizeriya: $4.90 fancy dessert.. small but not frugal indulgence. Not worthwhile
  • [Christmas 2022] $35 log cake
  • [S] coffee shop 杂菜饭 (mixed vegie rice)
  • exercise or yoga classes
  • free: jogging in big park
  • [S] free: stadium. In contrast, activeSG swimming pools and gyms are low-cost
  • movies — luxury
  • [S] taxi to bring family to east coast
  • [S] free: Pasir Ris resort next to the beach
  • free: beach
  • dining with old friends
  • tech books, even though ebooks are widespread nowadays.
  • [big ticket] frequent flights to see my immediate family
  • WPCH
  • [S=SG specific]

For grandma

  • swimming pool

— family dining out .. up to $15/pax .. not really “frugal” but it has become a conscious joint decision of me and wife. We spend this extra money and time to have a “good time” for the family, hopefully something fancy and memorable. You can call it a small luxury, but always in a family context.

##pff: 9-punch card@lifetime

Posted on by tiger40490

See also

  1. G5 personal winn`Bets :long-term impact@ livelihood[def2]

Warren Buffett once said each fresh grad worker gets a /metaphorical/ punch card with 20 punches on it i.e. 20 important financial decisions for their life. He said you can get very “wealthy”[B]  if you get at least 4 or 5 right decisions “over time“. At my age, I have made more than half of my 20 punches. If we count only investment decisions, then most of mine are rEstate decisions. In this bpost, I used to include a few non-financial decisions having huge financial impacts, but later relocated them to (A).

  1. — half ranked by time
  2. [5] Blk 177 .. good location and timing
  3. Beijing property .. good timing and locaiton
  4. UChicago .. “investment”, giving me insider insight guiding my decision for my college fund.
  5. BGC/Cambodia rEstate
  6. [5=G5 top punches with outsized financial impacts]

Some less specific, less decisive decisions:

[B] I would say Fuller wealthy. In contrast, the traditional “net asset wealthy” is not really enviable. If your burn rate is similar to your exclub peers, then you can hit USD 2M net asset and still struggle under heavy financial burden, on the cash flow low ground.

[22]G2 costs: middle-class immigrant]SG

Posted on by tiger40490

— The trigger .. In Oct 2022, I overheard a pantry conversation when a Filipino finIT said half his income goes to school fees and a quarter goes to accommodation. Later I double-checked with another immigrant colleague (From Shanghai). She said that was not exaggerated and not uncommon. Obviously, we were careful to avoid naming a (typical, presumed) salary figure.

Now I agree that school fees and accommodation are the top 2 costs to a higher middle-class immigrant in SG. How can an immigrant cope?

  • sugg: rent HDB … practical for me and some colleagues, but seems impractical for majority of my immigrant colleagues.
  • sugg: stay in outskirt, not prime locations. I think many of my immigrant peers do that already.
  • sugg: if no slots in public schools, then go for the least expensive private school. Lowest price tag was $2k/M as of 2015/2016
  • .. Luckily, my kids are good enough to cope with public schools.

— Medical cost … Luckily, my employers provides good health benefits for entire family, but
* what if you have a grandparent staying with you, like Umesh? They are not covered and they tend to incur high cost
* what if your employer provides only partial coverage?

— brbr and savings rate .. My Filipino colleague implied a brbr barely above 1.1. Saving rate would be very low, as Lancy pointed out.

— How about my immigrant friends in the U.S.?

disposable consumables can b cheaper even4long-term #shaver

Posted on by tiger40490

Compared the two options below.

I think the manufacturing cost is 100 times different but durability is not 100 times different.

— SGD 10+ Naitonal battery-powered shaver can last a year

— cheapest disposable 10-pack for SGD 1.05. Each shaver can last about 1->2-3 weeks. (I shave about 100 times a year.) So 25 disposables/Y i.e. below $3/Y

Tip: tooth brush can double its durability.

Durability declines more gradually, whereas the electric shaver would stop working completely.

Also, easy to carry.

Light weight. No battery.

I often need one in office (lasting 2->3-5 months)

 

 

food cost≅20% of monthly burn rate #Zeng

Posted on by tiger40490

Hi Zeng Sheng,

Thanks for the tips on

团购. My wife actually does use grocery 团购 once a while. I don’t think it saves us a lot.

Today I want to explain why nutrition accounts for about 20% of monthly burn rate.

( In Consumer Price Index, mortgage payment and investment amounts are excluded. So the total monthly burn rate in CPI calculation could be lower than the total monthly outlay in your calculation. )

I think my nutrition expenses is $800-1000 a month including

  • about $100/M restaurant dining. Every time I bring my son out, he would pick some Japanese restaurant. Typically $20-$30 each visit.
  • supermarket + wet market — perhaps $150 a week. My wife’s Supermarket spend adds up to around $400-500. I spend at least $10 each trip, more than 6 times a month.
  • desserts and drinks (excluding purchases in restaurants + supermarkets). Sometimes $10 in a day. For example, after every exercise trip with my kids, we would reward ourselves with these sweet indulgences.

disqualified by exclub[def] despite comfortable Brbr+FullerWealth

Posted on by tiger40490

update :

exclub concept brushes aside health, family harmony, career longevity, brbr, healthcare provision, citizenship,

Therefore, exclub is an incredibly narrow indicator of achievement or satisfaction.

In ffree^FOMO #9K/M and strugglfamilies earnS$7k #Julius, and again in this blogpost, I continue to put myself into the shoes of a 9K/M family.

With 9k salary, some exclusive “clubs” would reject my family members — financially disqualified to enroll.

These clubs include immigration (Singapore included), branded educational institutes, investment deals, cars etc.

In a similar way, when other kids (wives) can afford something nice like vacation deals, but I have to say “That’s unnecessary lifestyle creep we can’t afford”, it feels just like disqualified.

A slippery slope ! Even though we did qualify for many “exclusive clubs” like uchicago, SG citizenship, there is always an even more exclusive club. The billionaire-under-40 club would make most of us feeling disqualified and bitter, iFF we choose to feel bitter.

— paradox of China techie

I will try to give a concrete, specific description.

A 30 year old tech worker in Beijing (or Shanghai) may considers himself unsuccessful because a “decent” home typically costs RMB 5 million to USD 1 million, and his USD 60k salary (月薪 3万五) is insufficient. Basically, he is disqualified for the Beijing home-owner club.

If instead he chooses renting, then his salary could provide him a comfortable high Brbr (buffer) and a comfortable life. Consider

  • My parents together earn up to RMB 20k/M. They only need up to RMB 一个月几千块.
  • My uncles in Tianjin each earn below 10k/M in pension.

affordable workout classes: xpSelf^rmSelf

Posted on by tiger40490

Workout classes … is One of the greatest illustrations of the framework defined in rmSelf^xpSelf .

Q1: As of today, do I feel tougher working out by myself compared to a class?

— Q: is this creep? .. (not splurge) Yes according to the evaluative rmSelf’s, but I need to honor the xpSelf.

If I were to answer Q1 during every class, I would give a positive answer 80% of the time. In summary, I do feel good whenever I was in a class.

So there is some minor conflict between the evaluative rmSelf vs the xpSelf. There are other factors at play, though they would make this blogpost more suitable for the open blog.

  • factor: brbr, creep
  • factor: healthy longevity
  • factor: unhealthy dependency, resilience

— Q: how does personal training compare? The xpSelf would feel less rather than more comfortable, and the cost is much higher, offending the rmSelf.

So the best workout class is a large, low-cost class.

##annual burn rate: exclusion standardize #

Posted on by tiger40490

 

When an amount like tax is marked “E”, it means the amount is excluded as burn rate.
When an amount like 1.9k to wife is marked “I”, the amount is included as burn rate.

                  Exclusion/Inclusion table
tax mtgP mtgI 1.9k}wife $x}wifeFSM ⬐ For what purpose?
E E I I E FullerWealth #long term
E e or i I E E core brbr #short term
i[2] i[2] I I E brbrX #short term. 12k/M presentation to wife++

Among the various goals, the priority is

  • AA: accurate burn rate recon
  • BB: brbr estimate over take-home base salary. Brbr is an informal, workman’s tool (like C++), not an economist’s tool, not sound, consistent, vigorous, not even logical. Not designed for longitudinal or peer-comparison.
  • BB1: core burn rate ..
  • BB2: brbrX .. burn rate near-horizon forecast to share with family members, ex-classmates or advisors
  • .. [2] My “presentation” includes tax and mtg-P as special outlays. In contrast, brbr and FullerWealth excludes tax and mtg-P
  • BB3: FullerWealth forecasting .. requires precision.
  • CC1: burn rate trend analysis, comparing to past years
  • CC2: burn rate fair comparison with peers .. comparison with official CPI basket composition (economics theory)

As of 2022, here’s my exclusion/inclusion criteria primarily for BB:

  1. [x=should be “excluded” for CC, using the spreadsheet technique]
  2. BB2/BB3 to exclude IRAS installment or prepayment. (Prepayment actually complicates BB1, though it helps cash flow mgmt.)
  3. loans .. see separate section. Complicated.
  4. BB to include major medical
  5. BB to include [x] college fees
  6. BB to include annual insurance premiums
  7. (all purposes) include amount transferred to wife and spent, about $2k/M
  8. .. How about any amount wife spent out of her savings? Invisible and excluded for AA/BB/CC, but this amount is low in most months.
  9. .. [x] How about any amount transferred to wife’s FSM account, not spent (like bonus sharing)? excluded for AA/BB/CC
— Mtg P+I .. Similarly to PRP, if the annual P+I payment is 88% principal repayment and 12% interest “on average over a given period“, then only the 12% would be included as expenses. The remaining is treated as investment but why bother? Well, treating P+I as burn rate would inflate my burn rate.

This ratio changes over time, so your burn rate trend line can be skewed. (Is that a problem? Well, IRAS payment is a similar problem.)

mtg-P is non-discretionary investment, excluded for AA/CC1/BB1/BB3. For BB2, see note [2]. Mtg-p is like buying an investment property by monthly instalment

— How about mtg /paydown/PRP/? More like a discretionary investment outlay, excluded for all.

If I put $10k salary into an annuity (FLI2), it increases my net asset. Same effect if I use the same to pay down a debt. If the debt is a car loan or student loan, then the paydown amount might be considered burn i.e. expenses, but I never take such loans. My debt is always investment.

— How about RBBT loans? Accrued int is usually small. Monthly P+I is considered investment, and excluded.. simplicity.
Further, the monthly int payable (eg $111 payable to bank on a $100k principal) was expected to come back like any investment, in an amount above $111. In fact, the DIR is higher than LIR so deposit interst on $100k exceeds $111.

— Income (not property) tax deduction
Sugg: If a monthly deduction is $2500, then record it as a negative income or “payroll deduction” like withholding or CPF contribution, so my monthly income is reduced by this amount.

This new practice would improve quality and usefulness of the burn rate in my recon s/s.

What about lump-sum prepayment? I would say same treatment.

— CC: As a consequence, even with a stable family size, annual burn rate would fluctuate year to year due to these items

Nevertheless, I want to follow a consistent definition of burn rate, to support 20Y trend analysis. Covid case trend becomes meaningless when a new counting method is adopted, the entire data set has to be retrospectively adjusted to follow the same methodology.