Tag: t_exclub

Anthony.Lin rentalProp hearsay story #divStock

Posted on by tiger40490

 

Around 2011, I met my PWM ex-colleague A.Lin in Midtown a few times. He told me he had about 5 rental properties in Brooklyn [6]. What I remember he said is now mixed with what I imagine he said…

  • I think he said he bought fixer-upper[1] properties and “worked my butt off”[2] to make them usable again — FHR improvement.
  • I think he said his parents ( in-law? ) helped in some big way, perhaps renovation or rental mgmt[3].
  • I estimated that his[4] gross[5] rental income could be 10k/M but he didn’t confirm.
  • I have no clue about his mtg and haircut [pTax, maintenance, vacancy]

This is one of my biggest moments of FOLB on my path as an investor. He became one of the role models at the back of my mind. However, as I told HF.Sun, we outsiders don’t know some of the key facts of each deal, and should not assume its value.

[1] Risk: judgment risk. In this game, High return seems to entail high judgment risk.

[2] sacrifice. No pain no gain? But such sacrifice may not be worthwhile. I feel my HDB rental yield of 4% is not so high, but my effort is much lower. My Blk 177 realized rental yield was above 6%.

[3] Risk: legal risk, as Edward experienced.

[4] the rental income, the asset ownership ,,, is not 100% his. In contrast, I did all of my rEstate investment single-handedly, without family help.

[5] Q: what is his GRY and NRY assuming no mortgage on any property. I tend to assume GRY close to 10%. NRY is around half, up to 5%.

[6] Risk: concentration risk. Brooklyn is where he lived and knows well. In comparison, my overseas rental properties are more risky and higher costs.

— enviable ptf? How about div stock ptf?

Q: which portfolio is more enviable — AA) $1.5M cash deployed in 4~7 rental units with 50% loan + 7% NRY + leg work, BB) $700k in div stocks, no loan no legwork, 7% DYOC, diversified over 70+ stocks
A: most people would envy AA

Q: which one is more risky? AA due to legwork, delinquent tenant, LIR

Shiller: live more like millionaires #Sgp economy

Posted on by tiger40490

On [[irrational exuberance]] P139 Shiller gave an illustration — Suppose most owners of some rising stocks are becoming multi millionaires on paper, but their current living standard is anything but. At some point, some owner would want to sell her shares to start living a little more like a multimillionaire. It’s only rational — we buy-n-hold investment assets not for the sake of holding, but to improve our existence on earth.

(On a related note, Rong.Zhu said, You don’t want to pass on with too much unspent money, but somehow I don’t worry about that… )

  • For my wife, “living like …” means better home — newer, higher floor, even if it means lower investment return.
  • For Deepak CM, “living like ..” means seeking then living the better life as immigrants. Perhaps it also means “spend freely without calculating, without economizing.”
  • For (half not all) my NY cohort, “living like ..” means Ivy league and school-district home (usually big sqft). In this sense, they are not forced to sacrifice for it. Instead, they willingly sacrifice other things for this important priority.
  • For me, the answer is in
    1. my answer to sis: G3 specific goals@investment effort
    2. best Spends@100k windfall

— Assuming Shiller’s stock keeps rising …
Q2: would you prefer AA) to grow your paper net worth by holding the appreciating stock, or BB) (cash-out) sacrifice that growth for a better current life (… Life is short)?
Note that AA satisfies the FOMO, exclub desire.

Market risk is a huge risk we have hitherto ignored, also the (arguably) biggest difference between a millionaire vs paper millionaire. Without market risk, this stock would present an arbitrage.

— Q1: what if Singtel stocks make most Singapore citizens paper millionaires (or half-millionaires)? Singaporean’s average wealth level would leapfrog to top of the league table. So what?
( Q1b: what if Nokia stock makes most Finnish citizens paper millionaires? )

A: In such a case I think Singapore rEstate would appreciate further, making our lives somewhat poorer just like in Hongkong. If Singaporeans must reside and consume/spend [2] only in Singapore and if without foreign labor[1], then they would find that many services become expensive although imported goods would remain affordable. That would be drive force for more automation, more self-service, but many retirees really prefer human service.

[1] In reality, Singapore relies heavily on foreign construction workers, foreign maids, service sector foreign workers (from SEAsia + China) to control labor cost. See SG reliance@low-wage foreign workers: maintain cost+competitive
[2] In reality, Singaporeans really like to spend their wealth overseas.

## BestCountry@@ objectively proud@your local living condition

Posted on by tiger40490

 

A teenager is often told that her country (or city) is one of the best to live in the world. In reality, for every country, its nationals have some advantages and disadvantages, but some of the cited advantages are made up by the media or propaganda. They include things like better weather, wider food choices, police presence, strong military force, diversity in population, young population, rich culture/history. Today I want to focus on the factors widely agreed among the rich countries. By these standards, the Scandinavian nations, Japan, Australia .. probably come on top.

Q: how relevant is this blogpost to where2retire?
A: I think most if not all of the factors relevant to a teenager are relevant to a retiree, too, fundamentally.

  • [i=infrastructure]
  • [f=financial]
  • — half ranked by noteworthiness. The obvious ones are ranked lower. I avoid high-level, vague items
  • inclusive workplaces and schools .. relatively free of discrimination [prejudice]
  • [f] low national debt burden .. lower taxes going to debt servicing
  • security in food, water, energy supply
  • efficient legal system .. accessible [affordable] to the public
  • weather .. not extreme or disastrous like heat waves, hurricanes, flooding
  • [i] flood control .. esp. in tropical locations
  • [i] clean streets .. with some landscaping
  • .. adequate green spaces .. esp. relevant in cities
  • walkable, bike-friendly … not car-first !
  • plenty of exercise facilities .. swimming, stadium, jogging paths…
  • [i] electricity and internet connectivity .. reliable (weather proof), fast, affordable,
  • [i] public transport .. reliable, extensive (re Bayonne), frequent, cost-efficient [affordable]. Grandma often points out the MRT lifts
  • [f] stable currency, inflation
  • [f] low GST, low property tax, low utility bills
  • [i] accessibility for those in need
  • universal and inclusive education for 9+ years. Special needs education, leaving no one behind.
  • [i] pollution control .. air, water, noise
  • [i] public healthcare .. accessible, affordable
  • [i] congestion control .. often comes with high /tariff/ on gas or car ownership
  • street safety .. crime rate,
  • PPP-adjusted median household income after tax?

— More importantly, here are examples of Not “widely agreed” advantages. Many of them are based on FOMO[F] or exclub[e]

  • [e] home to world-class universities/companies? Perhaps parents would envy another country with many world-class colleges… But look at European nations, Japan,
  • [F] a country with pockets of tech innovation? But the locals (as compared to foreign talents) may not be able to benefit. Perhaps young citizens would lament their country’s relatively backward technology but.. Hey, technology is a race! Inevitably, only a small number of national can be leaders. Many developed (and widely envied) nations are technology adopters rather than innovators, in most technology domains.
  • [F] infrastructure .. Perhaps many (including outside observers) would not feel lucky/enviable about limited infrastructure esp. if less connected… But I think some remote island states (NZ, Japan) can be quite prosperous and comfortable. On the other hand, healthcare infrastructure (including sanitation) is a key livelihood feature.
  • natural resources? Look at Japan, Korea, Macau,
  • population density .. there are advantages to dense or sparse locations
  • athletic ranking .. (adjusted by population)

—  Q (related): What nationality is enviable esp. in terms of healthy longevity?

Whenever we compare different passports and identify the handful of lucky nationalities, each of us tends to focus on a specific aspect. There are a wide range of factors. Here I want to explore in and around an important area i.e. healthy longevity.

If a nationality is associated with 1) longevity and 2) “adequate” livelihood, then it would be a subject of envy by most standards.

 

me^SgFolks hav`DCC rEstate #debt

Posted on by tiger40490

See also %%riskTolerance: which countries feel OK

DCC[developed commonwealth countries] refers to UK/Aus/NZ/SG

I often feel inferior and second-class about my overseas rEstate portfolio, but it is vague and possibly irrational. Let’s pit my portfolio against theirs.

Paradoxically, in a closer look, mktRisk/NRY/appreciationPotential are not the key yardstick, in the presence of currency hazard .. legwork .. credit risk… economic derailers

Legal cost is much lower than rich countries, though legal process is often less efficient.

— same initial cash outlay: SGD 900<-1000k
Perhaps 2<-3 condos vs mine [Bj + SEAsia]
— 🙂 🙂 currency hazard .. See %%riskTolerance: which countries feel OK
— 🙂 🙂 debt burden. https://tanbinvest.dreamhosters.com/26043/sg-home-buyers-max-out-mtg-quantum/ shows that majority of Singapore home buyers take on the maximum debt burden, to maximize “investment”
— 🙂 cross-currency LIR[ Loan IR] hazard .. See %%riskTolerance: which countries feel OK
— 🙂 prime locations .. see Eynesbury by Resimax as an example
— 🙂 commercial not residentail
— 🙂 taxes are lower
— 🙂 local agency remuneration is lower.
— 🙂 Legal cost (lawyer fees++) is much lower than rich countries, though legal process is often less efficient.
— 🙂 If I have to travel there for sight seeing or problem resolution, total trip cost is lower.
— 👎👎 country-risk::economic .. more mature developed economies
— 👎 country-risk::legislation .. developing countries tend to impose capital control, foreign ownership restriction
≈≈ liquidity ..
👎 presumably less developed market and probably harder to sell than in UK/Aus without a loss
🙂 lower tx costs [fees] require a smaller price gain to break even
🙂 My low-quantum units presumably are affordable to more buyers, therefore easier to sell without loss

≈≈ NRY .. no clear winner..
Before covid, I can only guess UK/Aus NRY (post-tax) is about 2-5% excluding LIR, considering vacancy rate…
🙂 My Cambodia NRY is superior

==== minor factors
— 👎 country-risk::legal .. but after the initial years, FHR improves
— 🙂 geo-diversification .. no clear winner. They might be concentrated in one country, at most two

glamorous women #exclub

Posted on by tiger40490

 

My first look at the world of pretty women, like my wife.

Most glamorous women marry businessmen, not high-ranking officers, MNC managers…

Phyllis Quek?

I have noticed some glamorous women choosing a husband outside the richest elite. If she misses her “chance” during her best years, then she can consider staying single all the way. Teresa Teng was one of the first to practice these principles.

Many glamorous women in show business could , if they want to, follow Teresa and save up enough over a few years to provide a lifetime of income [1] for her entire family and even her extended family. So there’s no need to sacrifice the more important things for the sake of money. What are the more important things?

  • #1 important thing: Statistically, the wealthy man tends to receive too much temptation and attention from younger women. They get “it” without effort. In fact, they need huge effort to resist the temptations. Just ask MingLiang. To the glamorous women, Fidelity is mandatory and non-negotiable, a bedrock of the marriage and the family.
  • important thing: Statistically, the wealthy man tends to be too busy with work, and not so devoted to his family.
  • important thing: deep respect and sense of equality. The powerful, wealthy man often look at a glamorous women as an object, or a trophy, not so much as an equal partner.
  • .. When things get bad, the man is likely to trash the women as a worthless old woman.
  • .. As glamorous women age, they need dignity, which requires certain level of wealth.
  • important thing: overall honor and decency. Statistically, it’s relatively hard to find a decent wealthy man.
  • important thing: Wellness? I would say a good husband help keep every family member in good health.

So I think an ideal man for a glamorous women should first and foremost be a loyal, reliable man with proven track record of loyalty, dedicated to the family.  Romantic perhaps.  Attractive? Of course since the woman in question has too many choices and has no reason to consider a man not attractive to her.

The man’s political/economic power, fame, influence and wealth are not essential to a glamorous woman. She probably has some of that in her self. However, some women are ambitious.

Most glamorous women marry someone older, but some don’t, because an older man attracted to a young glamorous woman can easily get seduced by an even younger woman.

Emily Chang was one of the most attractive women in the world — young, bright, bold, an Asian female (and gorgeous) face in male-dominated Silicon Valley… a breath of fresh air. Then her youthful face grew old.
I feel more than 60% of the audience is male, and males are attracted by a youthful, pretty face. I guess a mainstream, competitive global media power house that’s the flagship of Bloomberg’s entire technology franchise can’t have a 40-something women as the figurehead.

How about my wife? She was a pretty girl, not a magazine cover girl. I think she chose wisely and she is lucky.

— marry “lower”

  • Lin Chi-ling
  • Teresa Teng
  • Charlie Yeung
  • Zoe Tay
  • Gigi Leung

These glamorous women each chose a man “lower” in wealth and economic power. In a way, each glamorous woman above has made enough money and doesn’t need more money. She does need respect[3] and equality in marriage. Having higher economic power provides her a safety. Once she commits to a marriage, she becomes extremely vulnerable. She would have a marriage to protect. She may have kids to protect. Statistically, marriage failure within her circle was higher than average, perhaps as high as 30%.

The power, wealth, good looks.. on the groom’s side is a hazard.

Therefore, these glamorous women were shrewd. They know their priority, their weaknesses/vulnerabilities, their liabilities (累赘).

— [3] respect .. I think respect is really precious, esp. for pretty women without professional or business capabilities. These personal capabilities provide respect + livelihood. Without those capabilities, a reputable college degree would also bestow some respect + status.

For some of these women, fitness and body shape also provide respect. In contrast, healthy longevity is not a common priority, but look at Angelina’s mastectomy decision.

For my wife, bearing 2 kids gave her a solid, irreplaceable, central position in the family.

New smartphone and nice apparel provide some basic status. There are economical but nice choices.

— [1] Fuller wealth vs exclub — Since this is posted to a blog on personal finance, I would say a key question for the glamorous woman was burn rate control. (Applicable to sports superstars and any celebrity.)

Exclub (and status, public image) is important to glamorous women (not necessarily a celebrity) simply because she draws a lot of attention.

She has to be conscious of her limited shelf life, her peak earning age, and the dangerous concept of the exclusive club, which consists of wealthy man and young glamorous women, but who is forever young?

If she aims to join and stay in the exclusive club, then her burn rate would be 10 times higher than the average family in the locality. Such a burn rate would be unsustainable given that she has no long-term earning power to match the males in the exclub.

Instead of the exclub, she can focus on Fuller wealth.

 

Fuller^ExClub: 2 indicators@wealth

Posted on by tiger40490

See also exclusive clubs: disqualified despite comfortable Brbr+FullerWealth , defining the notion of “exclusive clubs”

See also sense of rich/inferior is mostly driven by peer comparison, which pitted FOMO vs livelihood. In this blogpost, we compare two definitions of wealth:

  1. ExclusiveClub wealth — (a.k.a. net worth bracket) based on comparing with the Joneses. A club of strongmen of comparable strength to lift the same heavy weights. The standard heavy weights like “nice” homes, branded colleges, “quality” vehicles, enrichments, personal trainers, first-class vacations
  2. Fuller wealth — based on modest or efficient or conserver burn rate.
    • “Instead of heavy weights, try lifting your own body weight”. A lightweight guy can lift himself easily, as his strength relative to body weight is higher.
    • “Livelihood” is the key word

In everyday conversations, “wealth” refers to the 1st, but once a while the speaker mean Fuller wealth.
— SG vs US — I feel SG citizens are wealthier by Fuller Wealth, but NY residents are slightly wealthier by ExclusiveClub wealth. Here’s why.

Aha – For a resident in a given country, subsidized education, subsidized healthcare, subsidized home ownership, Denmark-style income security … contribute to her Fuller wealth, but none of these contribute to her ExclusiveClub wealth in the home country.
— low vs high ground — Fuller wealth determines whehter you are on cash-flow high ground or low ground.

Exclub sometimes lies. You would think every member of the club are on high ground, but some exclub members actually spend all and carry heavy debt, trapped in the earn-spend cycle.

If not under cash flow pressure, these exclub members are often under work pressure.
— inflation
Aha – local inflation (including globalization reducing min cost@basicHealthy Food ) affects your Fuller wealth but doesn’t really affect ExclusiveClub wealth. Inflation aggravates the heavy weights for every strongman. Food cost deflation simply drives ExclusiveClubs to consume fancier food.

Transport inflation is kinda unavoidable, but not food/clothing. In a high-inflation period, some very cheap choices are often available — basic-healthy. So I would say Fuller wealth erosion can be managed if you lead a frugal existence.
— How is investment impacting each definition?
I feel current income from investment is crucial for Fuller wealth.

Exclub tends to focus on net worth.
— Earn/Save/Invest — Fuller wealth doesn’t emphasize Earn. Exclub demands lavish spending and trashes the saving habit.

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.

livelihood n Maslow’s hierarchy@needs #w1r2

Posted on by tiger40490

See also

  • maximizing potency is a focus study (blogpost) using the Maslow pyramid as a framework. It provides concrete examples of Esteem, Self-Actualization etc.

This diagram from wikipedia is a better diagram than the pyramid. In poverty (left end), physiological and safety needs dominate. Sometime in our adolescence, belongingness [ social inclusion/acceptance, exclub/FOLB …] tend to dominate, when the lower needs go “underground”. Fairly soon, esteem_needs become dominant. This phase often lasts indefinitely and is seldom , if ever, overtaken by self-actualization needs for most individuals.

— livelihood .. as defined in my blogposts are mostly about 1) safety 2) belongingness, love (family). Esteem_needs are not strictly livelihood. If you draw a vertical line somewhere in the graph, you may notice a ranking in terms of “needs intensity”. Unlike the pyramid, the higher needs are more intense.

  • yellow above lime[safety] above orange[esteem] and green[physiological] … is the “standard” hierarchy of livelihood needs in rich cities like SG, U.S. or perhaps the upper middle class in some Chinese cities.
  • yellow above orange[esteem] above lime[safety] above green[physiological] .. the hierarchy of livelihood needs for my peers

— safety needs in my observation .. include retirement inflation, medical inflation, clean air, sanitized safe housing,,,, as described in livelihood[def2] x-class #S.Liu . As such, it is usually above (i.e. more important more intense) than esteem_needs

My T_defense tag collects many non-trivial reflections of safety concerns.

— esteem_needs .. Maslow noted two versions of esteem_needs. The “lower” version of esteem is the need for respect from others, and may include a need for status, recognition, prestige, and attention. The “higher” version of esteem is the need for self-respect, and can include a need for strength, competence, mastery, self-confidence, independence, and freedom.

— Q: when middle-class immigrant parents work so hard to send their kids to a branded college, how does Maslow theory explain it?
Esteem_need is One element .. like a badge of honor. It satisfies the (lower and higher) esteem_needs of parents more than the grown child.

My fundamental belief — a luxury college education only slightly enhances the grown child’s capacity to meet her own livelihood needs. However, many parents overrate that education-as-enhancement , like it would transform the child into a higher human being… a major misperception. I think many of these parents feel their own socioeconomic status is not in the upper class (上层社会 exclub) but a branded college education would raise their offspring into upper class.

I had first-hand experience (3 years!) in an expensive college. I know my fellow graduates are not fundamentally higher than lesser-known college graduates. A good high school would provide a more conducive environment during the formative years, but by age 18, most kids already know what they want, and won’t be highly influenced by the local culture of the university. A branded university does help the graduate get into good companies.

— Self-actualization .. left a vague impression on me even though I once read it extensively in my school (college?) days. I even photocopied the relevant chapters of his book. This need is elusive and ivory-tower.

 

rarity@ (liquid)millionaires #FullerWealth

Posted on by tiger40490

Q: how many millionaires are there per 100 people in your country?

  • — A historical review
  • Before I came to SG, I always felt a CNY-millionaire was like one in a few hundred in China.
  • After I came to SG, I felt a SGD-millionaire was very different from ordinary people.
  • In the U.S. media, “millionaire” still refers to the super-rich, presumably because despite high income, most Americans are poor savers.

I think SG is a rich population of relatively “even distribution”, giving rise to more millionaires (per 1000 population) than other cities including NY, HK etc.

All the discussions so far include home value as part of NAV. By this definition (i.e. NAV definition 1), many paper-millionaires are cash poor and paper-rich, with huge portions of personal wealth locked up in illiquid assets. Retirement account[Annuity…] is another illiquid asset class.

Compare FullerWealth definition. Those paper millionaires by Definition1 are often very poor by FullerWealth.

NAV Definition 2: NAV excluding your primary residence, including all retirement accounts that belong to you.
NAV Definition 3: NAV excluding your primary residence, including _only_ retirement accounts that you can use within 3Y.

In SG (and other cities), Definition 2 could cut the millionaire count by half or more.

The millionaire renter family is an interesting case. They often own investment properties.