Tag: t_origContent

These posts could move into either bold or critical, but it would take too much time.
We can also keep this tag with a distinct meaning. It highlights and /chronicles/ my analytical and creative effort, even if not so worthwhile. I want to honor myself as I deserve it.

prevalence@poverty: U.S.imt Sg

Posted on by tiger40490

With a vague title, this blogpost may eventually merge with a blogpost with a less vague title.

Why I care about poverty in my chosen country? It is subtle… Inequality, social unrest, financial strength of the government…

Q: why is poverty less widespread among Singapore nationals (Citizens + PRs) than U.S. and other countries?

— Reason: very high home ownership
— Reason: (my personal observation) price levels are generally lower than U.S., except raw foods
Inflation for basic necessities (not discretionary consumption) is, for decades, managed by a nanny state. Not managed in U.S. and many countries.

U.S. price levels can be very low, mostly due to efficient companies operating in free market. Government has much less control.

— Reason: SG government probably has a (not perfect but) functional system to keep track of every needy family including broken families. Arguably the most valuable feature of the “system” is adequate manpower. The system is not perfect but is far more effective than other countries in case-management to keep each needy family from falling behind.

In the U.S. the church and charity organizations play this role at a smaller scale. The case load is much higher per 1000 families, so they can’t cope.

— Reason: less freedom to bring yourself into poverty.
Many [1] people fall into poverty due to self-management (including self-discipline). They must want to be successful before a system can help them avoid/escape poverty. Singapore government leaves less room for “wrong moves” including falling off the train.

Strict control on gambling, debt, alcohol, drugs. Education system is compulsory, stressful and competitive. Savings are compulsory. The problem kids are identified early and put through years of tough programs. The systems push them to work harder, make the best of themselves and not rely on the system.

I have heard of many Singaporeans speaking of “hard to survive in Singapore” and “easier life in western countries”. Some (not all) of them don’t want to be very successful and would rather have an easy (lazy) life. Some of them would spend and gamble their way into poverty.

If you just want to be poor and become a problem to the Singapore system, then you have to work hard to remain poor. As long as you are on their radar, they will come and push you to work harder.

— Reason (minor): The government has numerous training programs to up-skill the unskilled Singaporeans.

[1] In every country, some percentage of the poor actually want to be successful i.e. work hard, but are stuck. The most valuable help IMO is training.

[22]elastic: hard basket

Posted on by tiger40490

 

See also

At the 2022 inflation peak, across the countries I know, most of the high inflations actually hit (minor categories or) “elastic” categories [i.e. easily replaced by cheaper alternatives] like food, entertainment, travel. In contrast, A small “hard basket” determines the amount of purchasing power loss , or the shrinking of my dollars (saved or earned) during bad inflation.

This is an Aha insight. The CPI figures and inflation economics are misleading or inapplicable until we uncover this insight. Based on the  economics concept of Substitute, this insight is a a fundamental observation, laying a cornerstone for my blogs on CPIx-inflation, burn rate, livelihood, FullerWealth, freedom, exclub, successC/successE, recreations, wellbeing[Kahneman], stresses of modern life..

Inelastic demand (def) .. might be an abstract descriptor. It refers to the limited drop in demand for a good when its price goes up. In the hard basket, consumers still need (“demand”) the same items at the same quantity, even when prices rise.

Q: in SG/U.S. given that many substitute goods come in myriads of price levels, which specific items in my “basket” are the hardest hit by high inflation … 刚性需求 ?

  1. — half-ranked by hardness
  2. fruits, raw veg, raw meat/fish, starch
  3. non-elective medical/dental care .. esp. polyclinic and TCM
  4. (US) health insurance
  5. school fees
  6. utilities .. [telecom, heating,].. To cope, I would eat out, stay outside home longer, take shower at office/swimming
  7. public transport .. To cope, I would avoid taxi, prefer bicycle, live close to connectivity hubs (U.S. or SG)
  8. rent .. To cope, definitely relocate to remote, smaller, old houses. RV is popular among older Americans.. [[nomadland]]
  9. college .. To cope, delay enrollment or choose less expensive colleges.
  10. — disqualified items
  11. most foods .. There are many price levels, so I could always opt for “less hiked varieties”

Q: within this hard basket, which items are the biggest in terms of dollar amount?

  1. rent
  2. public transport
  3. utilities

Q: within this hard basket, which 2 items are the “hardest”[least elastic] ?
A: see the half-ranking

— Q: within this hard basket, which 2 items (tend to) experience the fastest inflation?

  1. rent
  2. gasoline?
  3. basic healthy nutrition.. See the singstat data in SG CPI-inflation: 30Y xp, basket composition

To varying levels of effectiveness, governments could slow down inflation in public-education/public-transport/public-utility/public-healthcare costs

 

##def2 [creep]=semi-conscious small luxury spend

Posted on by tiger40490
  • eg: movies
  • eg: taxi
  • eg: simple gadgets
  • eg: simple shoes, dresses
  • eg: toys

When we feel [1] we have more disposable income, we tend to loosen up a bit and spend here and there for a bit of comfort and indulgence. In general, I feel it’s best to be more conscious (ctbz) when spending money, though “conscious” may run against “buy-without-oth”

  1. suggestion: avoid credit card or NETS. They are too unconscious.
  2. Suggestion: expense tracking
  3. Suggestion: enforceable budget

[1] Note we often fail to recognize the tax-like expenses. We do notice them after we stop paying our mortgage or school fees.

— On vacations (sometimes even at home) my family sometimes question me “Why are we so careful spending money?”

People want “freedom” to spend. Similarly, people want freedom to eat whatever they want, and the freedom not to exercise or brush teeth, the freedom to sleep any time they want and get up only when they want to. All of these freedoms are detrimental to the body, not to mention the mind.

careful ≈ conscious ≠ frugal. I do spend quite a bit on education, reunion flights, piano courses, wpress hosting, multiple laptops, books, … Not so frugal, but conscious spending, not mindless spending.

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.

 

Why ibanks “support” bccy

Posted on by tiger40490

I-bank’s advertised business model is client facilitation. I-banks may hold an inventory of popular bccy, and may also accept service fee payment in bccy. In such a scenario, the ibank would trade bccy for its own position, even though they claim to trade bccy only for hedging.

In other words, ibanks are dealers rather than pure-play brokers of bccy.

Prop trading is a secret business model of i-banks, and may trade bccy actively.

Cambodia 20Y trend: OBOR

Posted on by tiger40490

Even in 2016, China was already the leading infrastructure investor in the country. Long history of bigBrother/smallBrother brotherhood. Chinese companies have too much capacity and need to expand to SEAsia. These companies include exporters, real estate, casino, manufacturing, and retail shops targetting expat Chinese. They probably see Cambodia like a poor cousin of Guizhou. That was my impression of Cambodia even before OBOR.

After reading a a bit of political analysis of OBOR, I feel Cambodia has probably stronger dependency on China than other Asian countries.

* Cambodia government has probably the longest political alliance with China, which was tested repeatedly after the US-Vietnam war, and during international sanctions. Among the ASEAN countries, China often views Cambodia as its natural confidant and uses Cambodia to sway regional policy decisions.
* Cambodia is one of the least developed SEAsian nations and need infrastructure (OBOR) more than other nations.

As long as Chinese investments (OBOR etc) keep flowing, I think the Cambodia economy would grow at the current fast pace. Real estate sector is esp. sensitive to Chinese hot money. In a way, I am long OBOR -and- long Sino-Cambodia brotherhood. You can say I have placed big bets.

https://www.orfonline.org/research/china-relationship-asean-explainer/ says

One of the ASEAN countries closest to China is Cambodia, often accused of kowtowing to China. Its economic, military, educational and cultural relations with China are robust. It has deep penetration of BRI projects. It downplays the South China Sea issue within ASEAN forums. In many ways, Cambodia represents the dilemmas of a small insecure nation with an authoritarian regime in need of the backing of a great power to survive.

All politics is local, including Cambodia’s.

 

3pillars@%%PFF plann#health

Posted on by tiger40490

Long-horizon Financial planning, either pre-retirement or retirement planning, is all about uncertainties. These Uncertainties get foggier the further out you plan ahead. Some people give up in frustration, but I spend lots of mental energy mapping out the key drivers and identify the stable, predictable factors.

It’s important but tough to look beyond the medium-term challenges such as job security, college funding, ,,

At the core (and the base) of my long-horizon financial planning, here are the three beams:

  1. burn rate (incl. medical) in SG context. Actually SG feels fairly stable.
    • for my financial planning, day-to-day burn rate control is more important than monthly saving rate
  2. passive income — diversified, well-hedged
  3. healthy and in-demand — requires long term planning

for me, CpfLife beats SSA

Posted on by tiger40490

Look at the citizen’s confidence level in cpfLife vs SSA

One specific reason I won’t give up Singapore citizenship is CPF, something comparable to Social Security. At age 55 I will have put aside a nest egg (perhaps 200-400k) and use it to buy an annuity plan backed by the Singapore government. It will pay out as long as I live.

In contrast, SSA doesn’t give me the confidence that they would be able to keep up with payment. With CPF, my money is never spent on someone else but SSA uses part of my money to pay low-income, disabled and other families who take more payout than they contribute. That’s the basic principle of welfare state.

— depletion of SSA reserve .. Even worse, every calendar year, the SSA pays out more than it receives. in contrast, my CPF money is always mine so it won’t pay out more than I contribute, until we consider “pooled interests”. Known as CPFLife, it is exactly like a regular annuity plan from any insurer, so the risk of “running out of money” is widely known to be small, otherwise the insurer would increase the premium and reduce the payout for new customers.

Social Security’s retirement benefits trust fund is projected to deplete reserves in 2033, leaving it reliant on current-year tax receipts covering 79% of scheduled benefits.

— other features of SSA
The Social Security tax applied to both employees and employers is 6.2% of an employee’s paycheck — or 12.4% in total. (Self-employed individuals pay the entire 12.4% themselves.)

When you contribute to Social Security, the money doesn’t go to a specific fund allocated to you: Workers are paying into a system that pays for _current_ retirees’ (not your) benefits. For every dollar you pay in, 85 cents goes towards the Social Security trust fund.

The other 15 cents goes to a separate fund that pays benefits to people with disabilities and their families. In Singapore, separate systems exists such as risk-pooling CareShield.

Unlike CPF, Payroll tax contributions are not reserved for future payouts to the particular taxpayer. In other words, the payroll taxes you contribute to the Social Security system aren’t set aside to pay your benefits when you become eligible. They fund payouts for current beneficiaries or are saved into the reserves i.e. the trust fund.

Tax .. social security is a “tax on the rich” while cpf is a compulsory savings scheme.

— health benefits
As to hospitalization insurance, IMHO the CPF-backed medisave/medishield is generally superior to the medicaid/medicare system. My main argument is again about pooling. The CPF medisave account is completely segregated by account. The shield plans are like hospitalization insurance from private insurers, but subsidized heavily by government. There’s no concern that poor families would “take” the money I contributed to a pool. In the medicare system, the rich and healthy tax payers contribute more to the pool than they withdraw, while the poor and sick members contribute less than they withdraw, according to my friend Sudhir (Mummaneni). Sudhir said even more significantly, some percentage of the population is so sick that they use up a high portion of the medicare pool.

See https://www.theatlantic.com/business/archive/2012/01/5-of-americans-made-up-50-of-us-health-care-spending/251402/ and google “chronically ill medicare”. According to U.S. Department of Health and Human Services

  • In 2008 and 2009, 5% of Americans were responsible for nearly half of the country’s medical spending.
  • In 2009, the top 1% of patients accounted for 21.8% of expenditures.
  • the healthiest 50% of population used only 3% of total cost

Q: Is this disportionate distribution normal pattern across all insurance companies? Note U.S. system is based primarily on private insurance. I guess similar stats exist in private[1] hospitalization insurance schemes thanks to the defining feature of the insurance model.

[1] cpf medishield is similar, but public.

43R: focus@location,clean,warm !!size

Posted on by tiger40490

We as landlord want to provide a reasonable level of comfort inside the rooms and a clean bathroom, and don’t need to care about kitchens, stairs, living room, window, door, yard, balcony etc. Those areas are often run down and barely functional:

  • Flushing Ave — the least comfortable living space in my experience, even inside the rooms. The size of the living room didn’t really help relieve the discomfort.
  • Winnie’s place .. 423 Hart
  • 40 Wayne
  • 43 Rockledge
  • 4119 Fort Hamilton

It’s not uncommon to see tenants accepting a mobile partition (not a real wall) in a living room in Newport or JSQ.

If the location is safe, and not too far from transport, then I think most low-end tenants would be willing to pay for a clean, warm room, regardless of size. If we as landlord invest on renovating the interior to provide comfortable space, then we can charge a rental close to the market rate.

(1-NRY/NGRY) := haircut #JC~50%

Posted on by tiger40490

http://www.yourinvestmentpropertymag.com.au/mistakes/the-truth-about-rental-yields-148067.aspx has pointers on GRY, NRY (net RY), mortgage, vacancy cost etc but not NGRY. For me,

  • I will use purchase price + purchase transaction cost, not current value (I don’t know it) as the basis for GRY and NRY
  • mortgage cost is not in my NRY as rate is floating and the outstanding amount is unknown.
  • For NRY, I will estimate vacancy, pTaxes, maintenance, commission, non-payment. To compare with overseas rent income, I would need to consider income tax
    • Repair cost can be minimized if I’m in the city to manage it myself. In contrast, if I’m overseas and I promise to reimburse them they are likely to go for the more expensive repair option.
    • I had one tenant demanding a one-month rental waiver.

Advertised rental yield is usually NGRY (notional GRY, defined in another blogpost).

The “GRY – NRY” haircut amount varies greatly. I feel U.S. has inferior haircut. Below is a concrete example in Jersey City, where haircut can be half without considering income tax or mortgage.

In contrast,  my Peak Retail guaranteed 5.5% NRY after-tax ≅≅≅ pretax 12->13-16% NGRY. It becomes 14% once we factor in intangible costs like legwork + distraction to work + mental stress dealing with tenant issues.

Bridge/Peak has no capital gain tax, very low pTax, 14% income tax on rental, already paid by lessee.

— Overall, for residental rental yield haircut, U.S. haircut is higher than SEA due to

  • higher professional fees
  • wood and older : more repairs
  • taxes — restate + income

— 1st case study: CYW’s 400k 2FH in Jersey City

https://docs.google.com/spreadsheets/d/18fABeXl3vMKuakPV3mcM8MRpzbvh5yar6KIRmmc5J3A/edit#gid=1744686908 shows 3 scenarios including Bayonne and 43R (43 Rockledge), but let’s focus on a 400k 2FH in Jersey City

  • nominal income = $3400 * 12M i.e. 10.2% NGRY
  • vacancy 10% — can be reduced by finding long-term tenants at a discount.
  • 10k pTax 2.5% of 400k
  • handyman repairs 6% of  gross rental. See rental property wear-n-tear #index
  • major repairs 2k, assuming an old house
  • assuming $0 local management fee
  • assuming $0 mtg
  • assuming $0 litigation cost
  • —-result—-
  • $22272 assessable rental income, to be taxed just as salary.
  • pretax NRY = 5.57%

— 2nd case study — Dilip said if his white plains house generates GRY = X then 1/3 of X is mortgage payment and another 1/3 is pTax, so the haircut is about 60-70%,

  • assuming no vacancy
  • assuming no repairs
  • assuming no local management fee
  • assuming no litigation

— 3rd eg: See the real example in 389 Washington St #Newport

— BGC case study: BGC rental yield: local^foreign tenants shows SGD 6k/Y realistic rental income vs SGD 12k promised.