https://www.forbes.com/sites/davidrae/2018/10/10/move-in-retirement presents 8 practical questions to help you decide Whether to relocate when you retire.
Q2 is about staying close to loved ones
Q3: Rent or buy home after you relocate?
Q4 is about healthcare
Q5 is about pastimes and recreations
Q6 is about friends…. Kinda less important for me.
Q7: what’s wrong with where I call home now?
I think with the exception of U.S. retirees the stereotypical retail investors would consider stock-picking only for growth, not passive income. To them, a stock is either high return or nothing.
They ask me “If not attracted by quick profit or windfall profit, then why stock-picking? Why not some other assets?” They hear about dividend investors’ stories, and value-investing stories, but most of them decide to focus on high growth stocks.
Kun.H said “dividend is a secondary attraction/motivation.” The main reason to consider any stock is invariably capital appreciation, hopefully a windfall. Kun is more intellectual and more analytical than other retail investors. His comments are articulate. I think his views represent many intelligent, well-read investor.
Tianjue said many investors have a reasonable, human desire beyond stable, dependable dividend. I guess it’s a higher desire for … windfall profit! I guess it’s similar to higher desires like lottery, bigger home, top college,,,,, These higher desires drive up hot asset valuation to unreasonable levels.
Because these desires are based mostly on emotion, they can become irrational. Compare to Value investing.
Consider investing $500 into 25 growth stocks. To support firewall and buy-n-forget, I would need to limit each position to below $20. Beware of the risk of temptation.
update:
My USD balance is now dropping to the minimum, so I can switch to using SGD. Stop div stock picking?
The trigger .. my mail to Aaron.Lee and Claris. I have failed to grow my MOETF risk capital from 10k to 20k during 2021.
Q: Now my trading frequency is lower, so how can I speed up the incremental pace.
— sugg: pick from divKing^divChamp ^divAristocrat .. I want to maintain my bias for div stock. Maintain 80:20 allocation to div vs low-div stocks.
On 2 Oct, 2017, a BBC Why-factor program on “How to live small” had one final expert commenting on the (long-term) benefit of bigger home vs shorter commute. If you can’t afford a big home close to your workplace, you can choose one of..
His research measures the short and long term effect on people’s well-being. In the long term, the long commute is far more detrimental than smaller living space.
The /uplift/ is short-lived when we moved to a bigger home, but the benefits of shorter commute last much much longer.
Hongkong and Japan residents live comfortable, satisfied lives with (way) below 100 sqm of living space for a family of 4. On the other hand, NY commuters readily cope with 1Hr+ door-to-door commutes. I think folks who grow up in NY(or Japan) learn from (majority of) other people to accept long commute (or tiny homes). Some individuals in NY(or Japan) would struggle against the commute (or home size). These voices might dominate the internet, so each person has to decide for herself “priorities” and “tolerance”.
People (as in affluent Hongkong and Japan) can get used to living in smaller space, but it’s much harder [2] adapting to long commute, according to the researcher. They said over 20Y you will still hate the long commute the same as on Day 1. I see and feel that long commute eats into family time, rest time, study time, exercise time, hobby time, outing time…
Our adaptability to smaller living space is much higher than our adaptability to longer commute.
[2] remember Rahul and see my bposts.
— [[Thinking, fast and slow]] says something similar. Before a big purchase (a car or house) we hit the Focusing Illusion and exaggerate the lifetime boost to our experienced well-being (xpSelf). However, a few years after the purchase, we seldom think of it. Our U-index ( or hedonimeter ) would show that long-term “boost” is rare.
In contrast, a shorter commute would improve our U-index for decades, because the commute continues to be a “focus” every morning and every evening. It draws attention everyday.
— eg: Shuisheng’s mansion .. (Serangoon Garden) requires a car (or more) as commute pain relief, but how about parking, ERP? If he has to park at office then that’s another huge $cost.
His 8 family members would all need a car to go anywhere, since there’s no amenities within walking distance.
Therefore, I think the best commute in Singapore is “living close to public transit”.
— Felicia cautioned me .. HDB rental demand from foreigners could fluctuate in the long run. In the U.S. rental market, half the tenants are local Americans. Singapore rental market is more dependent on foreigners (high home ownership rate), so she sees more risk in my HDB rental model.
Why hold on so tight even after relocation to U.S.?
* low maintenance
* valuation volatility managed by PAP
When I explained to her why I won’t sell my HDB even while I’m settled in the U.S., I realized my deep bias and sky-high confidence in the PAP and SG economy. Over the long term, my confidence would be put to the test. Compared to China, U.S. and SEAsia, I still feel far more confident about SG HDB property. This is a heavy bias, not based on enough data. Once I live through and understand U.S. rental property risks, I might conclude that SG rental market is low maintenance but low yield and not-so-stable.
— Sheng.Zeng’s views:
Main topics of the Felicia discussion: HDB purchase; eqMufu
— diversify .. I told Felicia I’m well-diversified but my concentration in property is too high to be comfortable.
Bonds .. only bond mufu. Bonds are a reliable, popular, useful asset class to consider. Remember the K.Hu discussion?
China .. not a lot of geographical allocation except the Beijing property. I think eqMufu is a reasonable idea.
— Felicia thinks net rental yield of 3-4% is not very high. eqMufu can beat that. In U.S. market I favor MOETF. In SG, without converting my excess SGD, I may need to be more serious about more eqMufu.
With caution against “100% into eqMufu” she pointed out that DIVA has generated 10% annualized return since inception. This is the fund manager’s claim, not her claim, she said. She’s personally very confident about DIVA, based on trec. I believe since inception, probably 3 years out of every 10 had negative returns.
Over the next 50 years, I believe SP500 would outperform most eqMufu including DIVA.
See also increase spendor risk dywith2much unused cash #ZhuRong
Rahul pointed out that his grandpa is 95 and doesn’t want to spend on anything including renovation of his home. Presumably, he enjoys a simple lifestyle? I agree that this grandpa might pass away with quite some money, but that amount is not really significant even if given to a single heir. I feel the only meaningful way to use that money is helping out an offspring that’s financially struggling.
I also agree with Rahul that it’s better to spend most of the money on himself to “ease his life” as Rahul puts it.
Rahul is not advocating lavish squandering. I singled out overseas vacation as unworthy squandering.
Q1: how would I increase my spending on myself (not kids or wife) before it’s “too late”?
Q2: i don’t know what “too late” means to me
— Letter to Melvin Artes —
This is a summary of my thoughts. Recently I figured out U.S. cost level significantly higher than Singapore, in several categories. In quiet reflection, I often feel U.S. lifestyle offers many fancy, modern features (even more than SG), plus some countryside charms.. (Do I even care?) but at the cost of —
You introduced to me an interesting perspective — start from the top rather than bottom [1] and decide on an annual budget. Well, basically for roughly the same quality of life, my Singapore budget was about SGD 5k (USD 4k), whereas U.S. budget would be USD 8k excluding rent+mtg. In both cases I exclude mortgage payments and income tax but include pTax.
The $4k difference is largely due to the top 3 items above.
[1] Now in 2021, I have a growing suspicion about the top-down approach. It basically means “If my cohort (in the same income bracket) spend 80% of income then I will also spend that amount.” That is classic lifestyle creep and spending-by-peer-comparison. Following this top-down, I would spend on useless things like multiple luxury cars, luxury vacations. I suspect Deepak’s “seeking better life” leads to the same top-down approach.
I do have my American dream about opportunities, but with our combined income (low contribution from wife), the $3500 difference is non-trivial. My monthly savings will be halved because of this $3500 excess outlay. I had better ask myself “What’s more important — opportunities or monthly expenses?”
You mentioned the various government benefits that my taxes pay towards, but will I enjoy any of these benefits?
This is a complex question, so I need to put away the secondary factors and focus on the core issues important to my family. I have not done a thorough analysis, but my tentative conclusion is —
“For a given quality of life for my family (we don’t need cars or top schools) U.S. cost level is close to twice Singapore level, whereas our combined after-tax income level is roughly equal.”
We can have a separate chat about schools. My wife actually worries about guns so she doesn’t want any U.S. school, not even the top schools. I believe most U.S. schools are OK in terms of safety, so drugs and guns and bullies are present in every school but most schools are reasonably safe.
If I determine that 70% of U.S. schools have an unacceptable safety standard, then I may have to conclude this entire country is unsuitable for us. When I talk to the non-Asian friends the unanimous answer is a clear No. So I don’t worry about it.
— Q: Median household pretax income is 70k, so how do these typical families cope with those big items?
First, some statistical clarification. Households include many singular households. The median income among families with kids is different, possibly higher. Let’s assume 90k pretax. After tax would be 6k/M. My 2017 after-tax was around 6k/M.
Q: Those Asian parents who emphasize school districts, what would they say about a student whose parents moves home frequently?
Will they say the student will suffer? They may say it’s something to avoid.
In reality, the student may like it.
I spoke to one American manager. He said in his school years his family moved many times. Presumably, not all top schools. He actually did well in those schools.
I too moved schools and did well.
The strain + pain I feel due to SDXQ
I complained about peer pressure. It’s real. I can imagine that “most” [1] of my Chinese and Indian peers live in top school districts and send their kids to good schools there. I feel poor as a parent if my kids don’t go to some school in a good school district, whereas the kids of my peers do.
Paradoxically, if my kids can’t compete in a top school and transfer to a regular school in a good school district, I won’t feel the guilt. That particular guilt is about providing enough for my kids — Real peer pressure. Then Deepak raised Point #1 why don’t you care about the serious peer advice that you should not live away from family? Strangely, I have a robust defense against the “family separation” accusation and peer pressure. But why am I defenseless against the “school district” peer pressure? Because deep in my psyche, I still believe a decent school is a probably necessity for my kids.
If the regular U.S. schools are as lousy as I feared in my subconscious, then my kids can stay in Singapore schools.
When I feel the unwanted pressure to buy a school district house, I immediately blame the peer pressure but actually the key is my mentality.
[1] https://tanbinvest.dreamhosters.com/2017/07/14/shades-of-grey-peers-owning-sd/