Tag: T_misstep

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##[19]ffree derailers rated #resilience

Posted on by tiger40490

See also

To have any chance of lasting value, this blogpost need a _scope_ and must not become /indiscriminate/. In this personal finance blog, I won’t say too much about livelihood risks. Now let us shift our focus to ffree derailers.

This bpost is at least “w1r10”.

— intro .. Insurance and emigration companies put out subtle marketing messages portraying their “products” as the main protections in a person’s life, but that’s 喧宾夺主

  • 1) health and 2) cash flow are the twin primary livelihood risks in our lives.
  • Family stability (and harmony) .. is the third risk factor, a distant third in some traditional families, perhaps decades ago.
  • PIP, (kids’) grades … are two big derailers in some lives.

In contrast, some of the adversities listed below are outlier (black swan or missteps?) events i.e. highly unlikely. They are nevertheless worth knowing. If you don’t pay attention, they are more likely to hit you.

— ffree derailers .. All of these adversities demand financial resources and can drain my reserve. In some of them, a single misjudgment/misstep on my part could threaten to weaken or break a pillar beneath my lifelong foundation..

  • [v = too vague.. Can be more specific]
  • [3 := Pr(hit in my lifetime) ≈ 10^-3 =0.001 (three leading zeros). This numerical estimate depends critically on the qualifying criteria. Many criteria below are vague 🙁 and does not deserve this numerical estimate]
  • [0 := Pr(hit in my lifetime) >> 10%]
  • [$ or $$ = level of livelihood/financial impact. Within a given item like injury, there are many levels of financial impact. Here we try to give a (highly imprecise) estimate of the upper limit. No $$$ please]
  • [F = the later we hit the derailer, the Fwd Hazard Rate improves i.e. less impact ]
  • — half ranked by severity, and logically grouped .. Heaviest derailers sinking down (No precise composite sort key please.)
  • [5 $] natural disaster hitting my properties esp. BGC [criteria: $100k cost]
  • [5 $$v]Misstep: juvenile delinquency… before age 18 [criteria: criminal record]
  • [3 $$] Misstep: criminal offense …… often due to 一念之差 (misstep) [eg trespass, Genn’s fraud?] [aa]
  • ..[F] The later it hits in my career, the less financial impact it would have on my remaining career 🙂
  • ..[4 $$] Misstep: Immigration offense -> GC implication? I think you won’t get a chance to explain or appeal. Luckily I can always work in Singapore. This can only happen when you are in U.S. before receiving GC. Staying in SG, you reduce Pr(hit).
  • [3F $] minor misstep: personal trading breaches contributing to job instability .. In the grand scheme of things, this disaster is much smaller than criminal offense or immigration offense
  • [1F $$] minor swan:/oversized/ loss …. (100k) on property investments. I have already hit 10k losses.
  • —- accidents + illness, where medBx is crucial
  • [3 $] misstep: driving mistake injuring SomeoneElse….. need liability insurance [criteria: financial liability. A much lower (severity) criteria than above]
  • [2 $$] misstep or swan: injury (partly) due to driving mistake ….. [criteria: hospitalization within my family, in my lifetime]
  • .. Can I minimize driving? I guess I need heavy practice to improve, before I reduce driving !
  • [3v] minor swan: kids’ injury …….. before age 18 [criteria? how serious? Let’s be vague]
  • [1] misstep/swan: bike accidents …. or personal accidents. [criteria? hospitalization within my family, in my lifetime] Handicap is rare but more likely at an older age.
  • [3 $$v] swan: major medical …….. what if a family member needs a lot of acute medical help but not hospitalized and not due to aging? Very vague:( [criteria: 200k out of pocket]
  • [0 v]  swan: minor medical ……. kids’ health, wife’s health, my health.. [criteria? out-of-pocket 20->40-50k cumulative cost for a given condition, in my lifetime] These minor health issues are multiple times more likely than accidents of equivalent severity.
  • ^^^^^
  • [0 $] issue like sis’s where father had to put in all his savings for rescue 
  • [2 $] Misstep: drug addiction …….. [criteria? need professional including medical intervention by age 30 ]. More widespread than juvenile delinquency or minor medical!
  • [F $$$] disastrous Misstep: divorce …. high probability + huge impact. The later it hits in my life, the less financial impact.
  • [0F] salary instability …………. remains the #1 derailer, even though (paradoxically)  ffree is defined for zero dependency on salary. [Criteria: drop by half and half again before 70.]
    • age discrimination, churn/evolution
    • PIP? Usually doesn’t lead to salary instability if you are in-demand.

[aa] For the minor offenses, hopefully I get a chance to defend myself in front of employers, but sometimes the background check could immediately get you  disqualified without a chance to explain. Sounds scary, but Pr(hit) is below 10^-5.

The big list demonstrates that the most likely missteps/swans are less severe whereas the most severe missteps/swans are rare. 

There are other /uninsurable/ disasters to derail my ffree “dream”. How much more money would you need for those? 10M? Forget it! Below are some of my practical “defenses”. “Resilience” is my favorite word here rather than “protection” which sounds more lazy, passive and more reliant on external protection.

There is some overlap with random list@protections and other lists, but the below list is focused on resilience against disasters, and more about cashflow.

  • #1 resilience strategy — career longevity=Bedrock@ %%fledgling ffree
    • Better keep learning and keep applying your skills. If you retire for a while then forced by a disaster to /unretire/ (i.e. come out of retirement and rejoin the workforce), you will hit an uphill worse than the uphill facing those loyal employees
  • resilience strategy — invest in the “Singapore_hedge” to hedge the risks of rejection_by_US_job_market
  • resilience strategy — buy time, slow down and blunt the impact of the disaster. Some situations would improve gradually as my family adjusts to the situation
  • resilience strategy — bx? continue to spend some time on review
  • resilience strategy — diversify “productive” investments generating regular income + increase contingency reserve
  • resilience strategy — identify retirement destinations with reliable, low-cost health care such as MYS

next HDB: biggest financial decision #risks

Posted on by tiger40490

One of the 20 punches on my punch-card. The amount is bigger than all Blk177, #1173, Beijing home, all my Cambodia investments [1]

  • [1] However, I know the location, the legal system very well.
  • [1] However, career longevity has bigger impact on family livelihood
  • [1] However, health and family unity have even bigger impact on family livelihood.

— Biggest risks are

  1. overpaying .. (a misstep) overestimate of appreciation + yield,
  2. missing a good opportunity to satisfy wife’s needs at a reasonable price.
  3. neglecting hidden issues

— rental yield decline .. pretty much inevitable whenever we go upsize. Rental increase is slower than resale price. If this decline is a misstep, then just about any upsize would be a misstep.

— depreciation .. (short term or long-term) is a well-accepted risk. I have always accepted the risk in PAP government including SGD, cpfLife, Singtel stock… So when I imagine HDB depreciation after I buy, I basically feel “Fine. That was my own judgement, evaluation and assessment.”

— overpaying .. With #1173, I actually overpaid compared to subsequent price level. This is basically another aspect of the depreciation risk described earlier.

Q: Did I feel the pain of misstep? Not really.
A: (jolt) in 2012, I had a good change of home overall. Even though #1173 was overpaid, it was dwarfed by my Blk177 good sale.

When I eventually sell, I guess my profit could be $30k vs $100k profit of a neighbor who bought lower.

My rental yield is currently, say, 4%, vs 5% of that enviable neighbor.

preClearance +comparable missteps@job

Posted on by tiger40490

I decided to group this gz-theme blogpost with related blogposts, so as to have a single tag. Not purist, I prioritize cross-linking.

I also put a link-only blogpost in the gz blog, so as to apply the categories and tags of the gz blog.

— other observed missteps on the job

  • [dv] zed — One in a few hundred system alerts happened to be an important alert. I missed one. There’s a financial loss.
  • [dv] zed — My Manila young colleague had a bigger mistake
  • [v] Agilent — a Singaporean guy stormed out of the office after a heated argument with team lead
  • [v] Agilent — 2 India-nationality contractors made a mistake and then deleted the logs. Both fired.
  • [v] PWM — my technical oversight at month-end release causing some amount of commission payout to be delayed by a month
  • [v] PWM — time bomb in my ErrorMemos code
  • [v] PWM — Eric accidentally deleted a table in production
  • [v=highly visible]
  • [d=disaster in terms of (opportunity) cost]

— letter to an outside friend Zeng

This week I had a second breach of company compliance regarding personal stock trading. The first time was Q1 2020, slightly more serious, but perhaps compliance took a small part of the blame as they took too long to approve my account. On both occasions, my violation was reported (via email-cc) 5 levels up … from my manager to CTO.

The breach is about pre-clearance — For some stocks bought, I either forgot to seek approval or traded more than the approved limit. I didn’t feel like a convict. The amount this time round is below $100, but it’s a second offense. Receiving the compliance email, my recently promoted team lead called me and pointed out

  • I am taking it too lightly.
  • The compliance email briefly mentioned possible “monetary and non-monetary” disciplinary actions including bonus impact, but, as my team lead said, offenders could get fired for offenses like
  • .. sending out source code
  • .. sending out client information

I agreed with him 100% — if within 3Y my company has a cost reduction, then my compliance issues could be a perfect justification to single me out (severance not obligatory). Imagine if everyone has comparable performance and value-add, then this is an acceptable selection criterion. What a wake-up call. I will analyze it in terms of SWOT (Strength / Weakness / Opportunity / Threat).

Weakness: am not a star player, not even above average in my team. I see myself as vulnerable in a “cost reduction” situation.
.. Opportunity (minor): I can improve my value-add progressively. Even if it doesn’t really improve my vulnerability, it would build my self-esteem and reputation in the team. This kind of effort is often considered meaningless as in 内卷 (involution).

Weakness (minor): am older and slightly less in-demand on the job market, if I were forced to seek a new job, as Sachin.K was.
.. Strength: still confident about tech interviews. My skills are still relatively in-demand.
.. Strength (minor): I often forget that my degrees are well-recognized.
.. Opportunity: go back to the U.S. earlier (German.C), if the Singapore job market is unwelcoming or age-unfriendly.
.. Opportunity: convert this experience into motivation to improve IV competence

Weakness (minor): my wife has been a full-time mom. Am the sole breadwinner.
.. Strength: I have a cash reserve + low burn rate at the family level

Weakness: my trading style relies on many small trades, prone to this kind of breach. Also I don’t know any trading platform with limit check, but Rbh doesn’t.
.. Strength (minor): my trading style, on the flip side, tends to reduce amount of breach or trading loss

Threat: relying on the employer or particular managers … is always fragile and dicey 如履薄冰 — my long-standing perception of the reality. My compliance violations are minor in dollar amount and not a criminal offense, so I feel losing $10k of bonus (quite likely! Even $20k is possible.) or losing my job sounds like a gross overreaction, but those outcomes are not unthinkable because .. because the employer/manager is not caring and forgiving like our parents. On the global level, U.S. employers face fewer constraints than European employers in terms of layoff, but there are still many regulations protecting employees. (That’s why contract jobs are popular.) That’s why compliance violation provides a perfect justification for layoff without compensation. Now I come to the ultimate

Strength and Opportunity — build up self-reliance and  fortify it for the next 20Y, including interview competitiveness, wellness (stamina, stress-coping), strong family … Together they provide the ultimate protection for family livelihood. Any external support from the government, employer, charity (including friends) is valuable and “good-to-have” but not to be relied on in this case.

( In cases of systemic disasters, government support is the bedrock, such as pandemic, inflation … See ##fin protection: powerless against SOME blackSwans )

Since our last meet-up, my life has been too peaceful too comfortable, not sustainable. With a false sense of security, I have assumed I would stay in this company for 3Y-5Y. /Alas/, easy life always comes to an abrupt end. We always notice some worrying weaknesses, find new stressors, new threats… An easy life without challenges would be unrealistic and unhealthy, almost wasted (Burn/Rot). I have lived in a dream for a year, and this is a small but rude awakening.. 一盆冷水浇醒.

stock-trading: G3 concerns

Posted on by tiger40490

stock-trading: G4 concerns

  • — the high-level concerns
  • #22 distraction/firewall .. when I want to focus on localSys, coding drill etc
    • babysitt .. some stock positions have become crying babies
    • Robinhood proved very distractive. It once became substance addiction similar to the wrong-time temptation
    • Sugg — Avoid distraction due to frequent trading. Favor buy-n-hold.
    • buy_n_forget is more in-depth
  • #33 aggregate DYOC ..  3% would be unimpressive. However, it’s irrational/unfair to look at aggregate — better to look at the income ptf
  • #44 ROTI .. (see section below) too much time spent but total dollar amount is not worthwhile. Need to invest more to justify the effort
  • #11 paper loss .. when I need to access the cash. I think this is #1 concern for other investors but not me.
    • Diversification — R.Xia pointed out that if you buy many dividend stocks and some fail, then one of them might soar high enough to compensate for the other unrealized losses.
  • #1 compliance .. No one has 100% job security. (No driver has 0% fatality risk.). Compliance breaches (esp. repeated) would aggravate my job insecurity.
    • Not catastrophizing. Risk is real.
    • #11 concern: bonus cut .. $10k cut would not be a surprise. The dollar amount is likely bigger than the “paper loss” item below.
  • #8 Rbh: investor safety

— ROTI:
For a few years I spent tons of hours on FSM cherry-picking, but underwhelming ROTI, perhaps due to annual fees eroding the return.

== compliance
Q1: what’s my chance of surviving 2021? 90%
Q2: what’s my chance of surviving 2022? 70%
But the above answers are too rosy and short-sighted. A black swan event like compliance breach could cut the Q2 answer to 50%

I told a counsellor that job security depends on 1) company/industry profitability 2) Larry’s perception of me[5]. In a perfect storm of cost-cutting + my poor performance, then repeated compliance breaches would aggravate my job insecurity.

[5] With other managers (trigger-happy, like deMunk), firm performance would be a secondary factor.

— bird crashing a Boeing747″..  There are countless small hazards (bird) or small errors like 3dangerous habits #cross`street@bike or disobeying a PATH police, but why do they have such severe consequences? No idea. Anyway, below are some protective shields for the compliance risk. (Note there are several similar lists like ##[19]random ffree-derailers #resilience and random list@protections):

  • better performance, improved reputation with manager
  • #9 government-provided social safety net.. some people really lean on it and bet on it. I would say someday I may, too. No shame.
  • #7 brbr, Fuller wealth
  • #5 resilient family
  • #3/6 career longevity .. I rank this shield very high at this age, but what about age 52?
  • #1 wellness

Tanko: strategic missteps #home upgrade

Posted on by tiger40490

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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.

t_swan^t_misstep ^ffreeLimitation ^macroRisk #defense

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k_marro_risk

t_swan and t_misstep tags are mutually exclusive 🙂

  • t_swan .. (a.k.a. externalDisaster) are external, something happening to us
  • t_misstep .. are self-inflicted disasters
  • t_ffreeLimitation .. more broad in scope, so I try to reduce its overlap with t_swan or t_misstep

t_macroRisk is a sister to t_creditRisk and t_mktRisk. It refers to systemic risks beyond mkt risk or credit risk
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Note   t_defense is often a concurrent tag.