Tag: t_intro44

##[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.

feel` richer^inferior @unchang`income #smartphone

Posted on by tiger40490

Inflation, recession, covid restrictions, rental income decline, health decline due to aging
.. are some of the common “stressors” that have not become my stressors, because they affect many people around me more seriously.

Q: What’s special about long commute? Why do I suffer so much while others don’t?
A: 49 out of 50 of my peers can tolerate it better than I can, just as in an economy seat on a long flight.

k_deflation

Past title: covid19 recession: feel`richer@unchanged income

During the covid19 recession, roughly half the Singapore nationals [1][2] experienced job loss or partial loss of income. This made my family feel richer than before the pandemic — a paradox because in theory, without income growth we feel richer only during deflation (price fall). Now I think this theory is inconsistent with how people actually feel — People feel richer when they rise relative to perceived peers, regardless of inflation/deflation, or income rise/fall

Therefore, my sense of rich/inferior is mostly driven by peer comparison or FOMO , although livelihood and Fuller wealth is driven by cost level vs (work+nonwork) income level

[1] I will not focus exclusively on the middle class.
[2] Pandemic-proof sectors like tech, healthcare … employ lots of foreigners

— case: real estate inflation: am poorer even though my rental cost increased minimally
— case: globalization reducing min cost@basicHealthy Food but only a small percentage of the people I know actually say they feel richer thanks to globalization.
Jolt: So deflation doesn’t make us feel richer, for most of us, most of the time.

The paradox of smartphone .. Even though globalization leads to concrete, verifiable life-enhancing deflation [in basic food, clothing, bicycle, toy, basic electronics etc], the ordinary person would feel impoverished if she only has a school-supplied (or pre-owned) old or slow smartphone! Even if this phone is actually faster than a new phone, she may still feel impoverished because it looks outdated ! Vanity?

So peer comparison rather than this “deflation” is the real determinant of perceived poverty. By a certain age like 45 or 65, we don’t care so much about exclub or FOMO, and we can afford to ignore the smartphones (and other fancy, new stuff) that our cohort have.
I think this is a form of mellowing up, a form of let-go.

— (shocking) example: when I receive a modest bonus (like SGD 10k), I feel inferior and poor iFF I know my coworkers get bigger bonuses. In theory, a $10k handout ought to make us feel richer.

— example: in a WallSt bank, all contractors were forced to take 2-week furloughs at year end, but luckily I was spared. Nevertheless, I was unable to work on Christmas and New Year holidays, and lost billing, but I felt richer in comparison to other contractors.

landscaping,run-down buildings: street cleanliness #Bushwick

Posted on by tiger40490

I now feel private (sometimes public) landscaping is a Top-2 (possibly #1) part of our sense of street cleanliness. If we are asked to rank 5 locations in terms of “street cleanliness” then this factor probably dominates.

When you walk on a street with nice landscaping, you would not litter. People behave according to the physical environment including the subtle signs. The landscaping sends a subtle signal of decency, order, civilization and wealth. Only the rich families can afford landscaping.

Eg: I visited Scarsdale and Hastings-on-Hudson only once, but the street landscaping left a lasting impression.

Eg: I visited different parts of Bayonne. Some homes along Ave E have run-down landscaping, or no lawn at all. However, two adjacent blocks can have very different levels of landscaping. The homes near the county park and near Parkside Lane have nice landscaping. The lawn probably contributes to lot size and higher pTax.

If you don’t want to pay the premium on a big home with big lawn, then just avoid those wealthy districts. Buy row houses or condos. They probably have smaller lot size, lower pTax and still come with some green space.

— run-down buildings also affect our sense of street cleanliness
Bushwick apartments for rent — In 2010 or 2011, I was choosing a new room for myself without family. I visited one unit by the elevated metro rail. The Chinese lady owner reassured me that her double-layer glass window was sound-proof, but I found the building, the street so dilapidated… a livelihood hazard. If I were to take a picture of the place, it would look gloomy , grim and greyish dark. That’s my memory of it, probably not the reality. My repulsion became a livelihood concern, a bigger concern than long commute !

The worst run-down buildings are almost always in NYC near the run-down subways. They are the physical representation of ghetto. Outside NYC, I feel Newark and Journal square also have very old run-down buildings.

passive^active: job, investment..

Posted on by tiger40490

Instability, uncertainty is a fundamental part of my life. They may be part of your life but some people’s lives have rather low instability.

For me, it seems a good practice to embrace instability.

However, some stressors like PIP are too toxic for my “system” to manage, so I may have to avoid them.

Notes:

  • [1] my passive investments are not “safe” as comparable to insurance, time deposits etc
  • [2] startup has high risk of firm failure, but my calibre could be good enough.
  • [3] I started with mutual funds and had very poor returns. Then I had some alternative investments
  • [4] BGC, HDB…
HFT tech firm, startup ibank job contractor
#passive		 active invest #rental,stock passive invest[3] remote rental prop [4] khm shops
overall rating #9 ? #2 #1 #3 #6 #2 #1
income unsure 200k+ 170-190k 150-220k unsure unsure up to SGD2k/M up to USD1500
stability of income risk@kickout [2] worse than contract good poor reliability poor reliability poorer than khm good for now [1]
expectation@me worst ? bad best much worse than passive zero zero zero
stress like PIP stigma worst ? bad best worse than passive zero low zero

 

BurnRate=only half %%stressor profile

Posted on by tiger40490

Once upon a time, I had a hope that, for most men and women, nonwork income would relieve bulk of the pressure of this modern life, perhaps thanks to globalization reduc`min cost@basicHealthy Food.

This hope was based on a universal observation — cash flow is the primary source of pressure in modern life. FIRE discussions reinforce this common notion. I think it is only slightly exaggerated, like by 0.1%

See 3stressors PIP^FOMO^burnRate. Family harmony, wellness … can become more serious stressors than cash flow.

In my case, My non-work income is rising slowly but steadily to “close the gap” with burn rate, thanks to the contribution of other burn-rate relieves such as shield plans, stable inflation and currency, well-managed healthcare cost, robust rental demand, high-payout CPF-life,,,) This rise has given me a precious lens that’s rare among my peers. Through this lens I find peer comparison as a chronic, pervasive source of pressure. You can call it exclub or keeping up with the Joneses.

Now in my 40’s I feel burn rate is (slightly more than) half the “stressor profile” in me and my peers ! HaiFeng is not a best case study as I don’t know him well. Consider fellow techies like Raymond — if I had a consistent $6k nonwork income + zero salary, I would still feel low-income (not impoverished), mostly due to peer comparison and FOMO.

(Note non-work income does cushion the impact of PIP and job loss… Fairly effective ! See covid19$$handout reflect`Realistic burn rate)

Advice — Better accept a simpler lifestyle than the so-called “peers” lifestyle:

  • without vacations to Europe, Japan
  • smaller home, in an average school district. Remember Ms Cheng in Bayonne.
  • small cars
  • without latest smartphones
  • fewer yoga classes

Look ! The tunnel vision of FOMO doesn’t pay enough attention to a few fundamental factors such as

  1. lifetime income, in addition to peak income
  2. wellness, long-term vitality
  3. family harmony
  4. career longevity
  5. long-term peace of mind, deep and sustained sense of security and protection (by some God, a government etc)

[20]ffree^FOMO #9K/M #Gary/Yin

Posted on by tiger40490

See also my blogpost on

After talking to Gary.Guo, I realized that I could be ffree but not free from peerComp pain — when I notice so-called “peers” earning a lot higher, and their families enjoying those things I used to dismiss as unnecessary… I would feel FOMO/FOLB i.e. left behind in the slow track. I think Henry.Yin also said that RMB 500k salary felt too low for an unmarried tech worker. I would hear similar sentiments if I talk to more people.

On one hand, minimum acceptable food[1] cost is dropping globally, and I have way more than enough income to survive. On the other hand I feel lousy seeing some so-called “peers” earning 20 times more than that minimum, and twice my salary. Each of them seems to complain about cost of living.

[1] see globalization reducing minimum cost@acceptableFood

FOMO … The tendency to feel envious, and the tendency to compare to our neighbors are … basic human tendencies. Even a child would experience that. However, it takes a rational mind (wisdom) to control the tendency. Other people’s envy is the damper of my bare-bones ffree.

If we don’t compare to the (wrong) peer group we CAN actually feel pretty comfortable and carefree, basking in a glowing self-esteem.

So why do we choose to engage in the unnecessary comparison? In this question, I’m confronting the paradox of my adulthood. In pursuit of a more rational perception, I have a chance to find and restore some balance in my world view. I feel Theordore Rubin’s books shed some light. He introduced some good descriptors.

This is a confusing, subtle topic, with multiple layers. One of the analytical techniques is a list of questions.

Q: How much monthly (passive) income is enough ? Note Annual income is not very granular.
A: Philip Che said $5k would be comfortable for a family of 4. Wife said 4-5k for my family of 4, as discussed in SG: bare-bones ffree=realistic #WBank^wife^Che^3k

In the Chinese middle class family burn rate the single biggest poisonous element is top schools. Top schools entail humongous housing cost [1] + college funding. This single element has the (destructive) power to transform a carefree life into a stressful, miserable life.

Q: What did grandpa say when I said my son would go to an average American school while other immigrant Chinese families mostly live in top school districts?

Q: What would the early-retirement-extreme author say?

[1] actually you may be able to rent in a top school district.

— Q: With my low burn rate of, say, 3-5k, what if my wife earns 3k and I earn 6k from work like the Teo family? In theory my carefree easy life would be sustainable but would I really find Peace?

Main street tech jobs pay about SGD 5k.

A: I think most people in that situation would probably feel below-average in salary, and unsatisfied. Those without kids or not yet over the peak would feel /wasted/ at that salary.

With 9k salary, some exclusive “clubs” would reject my family members.

— See also the blogpost on khmer villagers and similar cultures in SEA, Latin America, and some Buddhist cultures — more satisfied, less striving.

SG condo price level #Susan.Lee

Posted on by tiger40490

Hi Susan,

Just to share my “biases” against the widespread and deep-rooted investor confidence in SG private properties.

Many realtors believe that over long term (10Y+ is my horizon), Singapore property prices will continue climbing. I am not sure.

Hongkong may or may not be a valid reference, but that’s the only comparable location. The supply/demand profile is different in each region and in each era:

  • Chinese tier-one property markets (Shanghai, Beijing, and possibly Shenzhen) have evolved under its own political, economic, demographic environment, so I don’t feel Chinese cities are reliable references.
  • Europe, Australia, North American, Japanese cities are also unreliable references if you ask me, because I am convinced that the (mainland and overseas) Chinese mentality — preference for buying over renting.. betting on windfall appreciation and ignoring rental income..– is one of the biggest demand-side factor that can’t be overstated.
  • Europe, North America, Australia, and Japan have a much longer history of prosperity

Over the last 30 years, the Chinese property investors have not seen a real bust as in Japan. https://asia.nikkei.com/Business/Markets/Property/Tokyo-property-prices-near-bubble-era-levels shows a 30-year property market recovery that’s still incomplete.

I would imagine that because of this positive collective memory, Chinese investors can’t intuitively assess “over-valuation” and “bubble”. This is such an important point in my reasoning that I will attempt to give a few analogs:

  • Until I saw, as a pupil, a magnet pushing another magnet without touching, I couldn’t imagine such a phenomenon. This is a natural science example. Rest are social science examples.
  • For centuries, people can’t imagine any country’s population could shrink permanently so we couldn’t imagine such a shrink. Now we are seeing it in some developed countries. Permanent? Let’s watch.
  • U.S. investors have watched the U.S. stock market recovering from every collapse very swiftly, without fail, so U.S. investors can’t imagine a prolonged “trough” like the ones in Japan, Europe and China.
  • Singapore property price history is similar to U.S. stock prices — over the last 30 years it has always rebounded after every correction, so the market watchers can’t imagine a Japanese-style long trough.

I’m slightly different from other Chinese investors —
1. I feel I don’t need a huge windfall profit — most realtors talk about 500k+ realized profits.
2. I value current rental income more than windfall appreciation
3. I wish to diversify geographically, like spreading over China, U.S., SEA

“Slightly” is my honest self-assessment. I’m 60% same as other Chinese investors in terms of my drivers — greed, fear, analysis, observations, information source, the people I listen to…

I really want to be more independent, marching to the beat of my own drum, but I can’t really tell myself to shut out the outside influence. I need a selective filter … tough balance.

FSM(+Trading): y ROTI so low@@

Posted on by tiger40490

 

In terms of personal ROTI efficiency, AA) trading (+FSM) is inferior to BB) property (+HY/PE) investment process. BB is more suitable for me:

  • I only need one big due diligence. Then buy-n-forget.
  • No monitoring required. No distraction to work. Often no price updates available anyway. Unable to transact on-my-own
  • Profit/Effort ratio is 10 times higher

Let’s compare Chip’s no-load fund to trading+FSM. The latter’s ROTI is lower because

  1. daily distraction
  2. too many research sessions compared to just once for the no-load

— guideline with FSM periodic checks,

  • reduce holdings to reduce the need for periodic checks
  • aim at one check per 48 hours

current_payout^windfall_far_out

Posted on by tiger40490

https://www.richdad.com/resources/rich-dad-financial-education-blog/january-2010/wealth-is-measured-in-time says

Most people are only familiar with capital gains investing (including windfalls). In other words they are focused on trying to get rich. When you focus on investing for cash flow, you are focused on building your wealth, creating passive income that earns you money without depleting or selling the original asset.

I used to prefer a high annualized return, despite a long wait, such as Chinese properties, land banking products, forestry,,, but in my 40’s I feel I need current income to provide for education, better commute, better home, recreation, self-growth, interest, hobbies, … I have experienced a few show-down cases of current income vs far-out windfall , that shaped my perceptions and preferences.

  • eg 🙁 land-oriented investment is advocated by Alan Shi, but such a remote location has low rental demand. Low current income. In fact, automobile burn rate could be higher. I probably won’t like it.
  • eg 🙁 life insurance — zero income for an extremely long “wait”
  • eg 🙁 endowment plans such as Manulife Universal Life — zero current income + paltry return
  • eg 🙁 land banking promising a windfall? I don’t think there’s any current income.
  • eg 🙁 Allianz IncomeProtector — zero current income + delayed high income. I don’t like it because I need income now, not later.
  • xp: monthly payout — funds on FSM. Overall not impressive since most of the current income seems to come from the NAV
  • xp: Energy 12 — good guaranteed current income + some appreciation potential
  • xp (long): #4-116 — huge appreciation (Realized!) + current income (in terms of realized rental since 2005 + my rental savings). So this is the #1 biggest success story in my entire life.
  • xp (long): Beijing property — huge appreciation + zero current income for me but indirectly my parents are enjoying the rent-free benefits. This is the 2nd biggest successful story.
  • xp: BridgeRetail — high current income (Realized!) + long-term appreciation potential.
  • xp: PeakRetail — lower current income, bigger potential for windfall
  • xp: BGC — promising current income + long-term appreciation potential.
  • xp: Goldman Sachs dividends
  • xp: My 2009 Roth401k voluntary contribution was a regrettable decision. The money is now locked-up when I need it (now). When the money someday gets unlocked, I won’t need it as much as now.

I have concerns over the long wait for a “windfall” (I have never been convinced to buy any):

  1. With such a long horizon, things may not work out as planned. The more “guaranteed”, the smaller the windfall, like the /paltry returns/ of insurance products. On the other extreme, the big windfall of land banking often disappoints investors
  2. our health? Wife or I might get a condition too early and can’t really enjoy the windfall. Even if we can enjoy it at that advanced age, I don’t want to wait for that time, in poor health.
  3. my lifespan? If the windfall comes at 67, I have a few decades to enjoy it, but I would rather get the windfall 40 years before end of life.
  4. inflation? Singapore is OK so far. U.S. is less stable.

j4 ffree analysis: jobless cashflow breakdown

Posted on by tiger40490

The fundamental concept and definition of financial freedom hinges on … Fuller wealth in a zero-wage situation.

My father said I don’t need to think about sudden and unexpected job loss and the cash-flow consequences. A few close friends I consulted probably felt the same way, though German, CSDoctor and Kyle seem to accept my analysis.

Now, I don’t need to convince other people about the validity of my projections. The more due diligence I do, the more validity I see in it. That due diligence gives me increasing level of inner confidence and consequently improvement in stress profile.

At a broader level, the amount of focused brainpower I apply on burn rate analysis is probably higher than my friends apply. My analysis gave me confidence.

In reality, long term cash-flow /concern/ is arguably the most visible and most common (possibly most important) source of household stress and livelihood pressure. As such, this concern has real, tangible costs and takes its toll on our lives.

financial independence=state@mind provides an agnostic and more cautious view.