Tag: t_othRisk

a bpost on FIRE-in-SGP

Posted on by tiger40490

https://blog.seedly.sg/fire-financial-independence-retire-early-in-singapore/ is a 2019 blogpost by a co-founder of seedly.sg. I don’t plan to spend too much time on it — not a major publication like the BizTimes article. Note both are written for the same target age group.

— age 45~50 — the ideal early-retirement age for most Singaporeans. In my early 30’s I had a very high Fuller wealth
— 50/30/20 — monthly income: 50% spent; 30% saved; 20% invested. An aggressive yet realistic plan
— YOLO (You Only Live Once) — a very common counter argument. I feel the author is in the same age group and presumably in sync with the debate.
— Earn/Save/Invest — you need to excel at 2 of 3 i.e. doing better than average.

 

curBurnRate ^ t_savingHabit ^ t_creep

Posted on by tiger40490

burn rate /control/ and saving habit are closely related. The differences can be subtle. In everyday English, “saving/saver” can mean both spend-control and reserve-building.

  • curBurnRate — more about day-to-day control and discipline, including the prevention of unnecessary spend
  • t_savingHabit tag — more about long term benefit of consistent saving habit
  • t_creep tag — more about smaller lifestyle spends. I want t_creep to be more strict, with a more specific meaning

 

[19]ffree discussions with2friends: @end@c++US

Posted on by tiger40490

Before I left U.S. in 2019, I had separate email discussions with SY and JL. To my surprise, they each replied (14 Aug 2019 and 28 Aug 2019).  Their brief answers are truthful, revealing and worth reading.

Without going into details of those discussions, I feel basically alone with respect to my ffree “state of mind”, as described in another blogpost, financial freedom=state@mind.

When living with family, I foresee a decline in this state of mind….

What would grandpa say?

PFF compare 2 families: per-capita%household

Posted on by tiger40490

Q1: For meaningful cashflow (income and expenses) comparison between households, should we use per-household or per-capita?
A: Most economists, policy makers, marketing teams,,, prefer per-household. For a household size up to 5, I agree the per-household metric is better. I think this yardstick is invalid if a special household has “unusual” size.

Level of (resource) provision is determined by per-household (not capita) cash flow. Most of the “provisions” are shared within a household — shelter/utilities, car, nutrition, healthcare, vacations, gadgets+toys, parenting as a “benefit”

Q2: why do I bother with this theoretical question?
A: for example, see PAP’s tilt towards the vulnerable #per-capita

Other examples:

 

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)

$1k NNIA=more meaningful2ME than others

Posted on by tiger40490

Be it SGD 1k for a Singapore family, or USD 1k for a U.S. family, this amount of nonwork income ..

  • is not exciting for my cohort. U.S. cohort’s family burn rate is like 9k.
  • is far from enough to someone without passive income , because this amount is way below burn rate
  • but is a significant addition when my passive income is already close to family burn rate.

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.

 

retirement income replace-rate: not useful2me

Posted on by tiger40490

replacementRate := income After you retire / income Before[1] you retire

[1] before means … the final year, perhaps part-time job salary  + nonwork income

https://www.dbs.com.sg/personal/articles/retirement-planning/let-time-be-your-friend-when-planning-for-retirement  says The OECD average is 63% (and presumably insufficient for many retirees, according to the marketing brainwash).

I find this percentage too high to be realistic. My salary before retirement would be 150k in today’s USD. My income after I retire would be much lower than that, but so is my burn rate.

Therefore, I find this percentage highly misleading and questionable. Therefore, I don’t want to spend too much time /dwelling/ on it. On the other hand, This concept/notion is well-defined and may become more prevalent via my (evolving) selective listening.  Therefore, it might be useful to have a view.

Instead of this replacement rate, I have many blogposts more relevant to my situation.

[13] ideas@retirement planning

Posted on by tiger40490

Let’s not spend a lot of time on this blog post, but Look how much my retirement plan has improved

  1. * annuity — cpf-life
  2. * rental properties
  3. * medishield

—- 2013 email —-
Disclaimer — I’m not seriously retirement-planning. Just random thoughts. The [1][2].. items are my retirement ideas.

I feel many people rely on their home as retirement, but you can’t easily get cash out of the house. So it doesn’t really generate cash needed in retirement. It’s rather important to ensure the home can be rented out to generate supplementary income [1].The better the location, the more likely. It would be idea if you can get a 2nd, perhaps small home to rent out.

Another common thing people do is full time investing (gambling). I’m not sure at all. I’d rather leave my money with the professional fund managers. I’m more in favour of high-dividend investments.

If I have the time and good health, and needs money, I’m more in favour of working into old age[2]. Some professions are easier to find work – such as hourly work. Teaching is one field to offer work into old age.

Medical insurance [3] is quite important, esp. for catastrophic, or chronic.

Annuity [4] is a relevant option to me.

%%cohort r more keen@windfall !!income

Posted on by tiger40490

I’m clearly more proud of my high-income investments. My peers generally feel “6% a year passive income over 10 years … only 60% profit over 10 years… Too low too slow.”

I asked only a few peer investors. I can only assume that most of my friends in my cohort are not debt-free. I feel most of them are not only dreaming but aiming at a 200k->$500k-1M windfall, over 5-10Y. My wife might be one of them.

Q: So how much risk capital are they committing for that target windfall? 100k? 200k?

Q: is that level of return realistic? I guess only tech stocks and BTC can deliver 30%/Y compound return, usually low growth, low growth … short bursts of high growth.

I don’t want to overthink this question, since it affects only them, not me.

Q: Did I ever aim at that target and how did I decide to stop?
A: perhaps I was never so ambitious so hungry for windfall, after I become an investor.