Tag: t_rmXp

make every dollar work hard4u@@ #SBH

Posted on by tiger40490

See also priorities in stock trading

It is Perfectionist and unrealistic to make every dollar work hard for us. Many experienced investors (few are wise investors and even fewer are real “experts”) stay invested, having very small amount of idle/unproductive/unemployed cash, like 12x monthly expenses. See https://tanbinvest.dreamhosters.com/24728/12x-monthly-expenses/

For decades, I have lots of USD or SGD sitting in bank accounts earning below 0.5% pa. asset%allocation: imprecise snapshot=best shows my cash allocation at around 15%, much higher than equities. Used to be 50%. I have long accepted low return in exchange for “excess liquidity“.

I didn’t complain. I usually complain only when I lose capital or lose liquidity (as defined in liquidity[def]: how I gauge illiquid products) .

* memorable eg: I remember the professional analysis of AllianzIncomeProtector. The annualized return turned out to be very poor. (I think cpfLife may also show a low annualized return, despite the high DYOC.) I probably don’t mind that low return. However, I do mind the horrible liquidity[1].

* memorable eg: Buffett’s IBM “mistake” shows an embarrassing but positive return on this IBM investment. Not spectacular but no disaster either.

I think these are some of the key reasons I don’t see myself as an “aggressive investor”. So not every dollar (sometimes not even half the dollars) in my possession is working hard. When my cash “productivity rate” did hit 90% (i.e. 90% of my spare cash deployed into /productive/ assets), I sometimes had my fingers burned:

  • In 2021 I deployed all my spare cash to FSM bond funds. About 80k is currently stuck.
  • I had a 150k position in the supposedly safe Allianz HY fund. Stuck for years. I lost liquidity and lost capital, but in terms of e2etr [end-to-end total return], probably up to 1 to 5% loss only.
  • I only invested about 40k with Jill, in contrast to 6-figure commitment of other investors. We lost capital.

— If I carry a 250k mtg at 2.5 ppa, but have 250k idle cash, then I would feel the pressure to make the idle cash more productive.

— Jolt: SBH in HDB.. why I can easily save 100k but won’t spend 100k on a new HDB? I wanted the 100k to be more productive, working harder to generate returns.

After Susan’s discussion, I feel 100k invested in a SlightlyBetterHome is different from “excess liquidity” mentioned above. This 100k will be non-productive for decades 🙁 In fact, part of it is cost (reno/fees), rather than investments. The rmSelf tends to neglect the xpSelf.

  • Investments are the focus of the evaluative rmSelf;
  • Those costs were incurred to provide experienced wellbeing of the xpSelf.

retire too late2enjoy golden years@@ #JL.Yuan

Posted on by tiger40490

A friend wrote “I’ve heard of some examples in which people were unable to enjoy their late lives due to unexpected things.” Here’s my reply to him —

I’m curious what examples you have. There are examples of health conditions or grandchildren responsibilities, but..

1st) I want to address a realistic scenario — my kids get into financial trouble or career low-point including job loss. This kind of thing actually happened in my extended family, before the parents retired.

Q: In that situation, am I lucky or unlucky to be still working full time, as a /septuagenarian/?
A: Depending on the situation, I would say “Lucky to be employed”. One reason to feel unlucky is “OMG my dream of carefree retirement after age 75 is now destroyed. Now I have to work a few more years to help my son/daughter”. Well, in that situation, I do NOT think I would feel that way.

2nd) there is a risk that some government financial reform kicks in, which hurts the late-retirees like my father and me. I am confident that in well-managed systems like U.S. or Singapore, the super-old workers would be given sufficient advance notice/warning so I would have a viable option to reschedule and bring forward my retirement start date. This option would let me mitigate any penalty brought about by the impending reform.

2b) The flip side of this risk — economic or fiscal deterioration leading to inflation or currency devaluation. Black swan or white swan hitting my retirement nest egg. A very real risk to the early retiree. In conrast, the late retirees would worry much less about inflation. Nobody can have a watertight protection providing complete insulation from external shocks.

2c) beside external shocks, there are also missteps that could wipe out large portions of your retirement nest egg.

See career longevity= Bedrock@ %%fledgling ffree

Q: In that situation, am I lucky or unlucky to be still employed full time, as a septuagenarian?3rd) example is an unwanted request to help with grandchildren. My kids actually received help from four grandparents until all four quit due to health.

A: perhaps Unlucky .. “Now I have wasted my opportunity to enjoy peaceful retirement with my wife for the last 5 years. Now I have to help with my grandchildren until I’m too old. So I won’t get any opportunity whatsoever !”

I would balance 1) grandchildren care 2) work 3) leisure. Stressful balancing act? I hope not. My work and the grandchildren are not job duties _imposed_ on me. I think that in reality, grandparents do have the option to say No but I won’t say No for no reason. If my health or my job doesn’t permit, then I would say No. That’s what happened in my family.

4th) reason .. health is the most common “example in which people were unable to enjoy their late lives”. My wife does plan to retire in her 60s and pursue some unknown retirement things. For me, I thought long and hard.

What I enjoy doing in my late life, if I’m healthy, is mostly about work, light-duty but productive work with some job responsibilities, some deliverables, some real users. Stress is inevitable, but after my 60s I would want only light, positive stress. If the unwanted type of stress is too much then I would change job or retire.

Therefore, for me “unable to enjoy late life due to health” == “forced to retire when I still want to work”.

This is NOT a regretful outcome due to poor planning.

Therefore, the “example” of health is not a reason for me to retire earlier. (More like a reason to stay healthy enough to keep working.) Specifically,

  • If my health declines in my 70’s during my late-career and I can’t go out and enjoy retirement, I am sure I won’t have major regrets. There’s very little desire in me to leave my work and enjoy a 6M long vacation. I know what I enjoy, but I am even more confident about what I do NOT enjoy, like sightseeing year and year!
  • If my health declines during my 60’s, then my late-retirement plan needs adjustment. There’s no “regret” per se since I would end up retiring around standard retirement age.

In conclusion, in my prognosis there are very few examples that would sway me away from my long-standing plan of late retirement. I believe in my plan but I keep an open mind, ready to adjust my plan.

— rmSelf ^ xpSelf.. This letter I sent to a friend was all about the rmSelf making judgements for the xpSelf.  The rmSelf does care about the xpSelf [hedonimeter]

2ADL→$5k/M provid`Decades@ decent living has in-depth discussion of living with chronic conditions.

doses@delight #lifestyle升

Posted on by tiger40490

These doses of delights can improve my mood and xpSelf’s wellbeing, although they mean nothing to the rmSelf. A few factors:

  • low amount is fine .. much lower than bonus, or investment windfalls
  • high frequency of delight

— eg: monthly interests iFF substantial
— eg: stock dividends paid out (not DRIP)
counter-example: many mufu dividends come from NAV liquidation…. not a dose of delight.

— counter-example: MB cashback.. not so delightful because I don’t see the itemized cashback
DBS multiplier is better. Monthly cashback as MB, but the algorithm is much simpler.

— eg: linkpoint .. happens at higher frequency (more delightful) than MB ccard cash back, which shows up only once a month.

— eg: tiny lifestyle 升

satiation income_level=USD 75k #Newport,SunsetWay

Posted on by tiger40490

See also self-evaluation of life: CSASS

[[Thinking fast and slow ]] includes a whole chapter dedicated “experienced wellbeing”, including a very brief contrast against CSASS. P397 hypothesized that beyond the satiation level of income, you can buy more expensive (pleasurable) experiences, but you are likely to lose some abilities to enjoy the pleasures of a simple life.

Warning — “satiation level” is only in terms of experienced wellbeing [xpSelf, not rmSelf], and doesn’t even imply hard limits on long-term satisfaction, life chances, success (as defined in 4 ways).  This satiation is really about “savoring the moment“.

Kahneman reported that based on 450,000 (450k) responses from thousands of Americans, beyond the satiation level of $75k/Y household income (as of 2011, in high-cost US locations), experienced wellbeing (NOT the CSASS evaluation by the rmSelf) no longer increases. “The average increase of experienced well-being associated with incomes beyond that level was precisely zero.”

(Note in 2011 I happened to live in the U.S.)

This research is relatively new content in a book of well-researched contents. In a 2022 BBC radio program [[money, money, money: Value]], a Yale professor referenced some similar research.

— moving to Newport .. When we moved to Newport, something strange happened to our experienced well-being. My wife probably felt less well off than before, because every other young mother in the neighborhood was better off in terms of education, English, earning capacity, perhaps dressing. Newport feels young, cosmopolitan, and smells affluent. Perhaps she felt not belonging there. I remember visiting my ex-schoolmate HY.Cai in Newport…

There’s another “reason”. The “more expensive experience” refers to the affluent location including clean streets + landscaping (see other blogpost). This enhanced our experienced wellbeing. But I guess we also lost some abilities to enjoy some simple pleasures of life, like cooking, going to a small neighborhood park.

— Similar experience: PandanValley vs SunsetWay/Clementi .. I remember my first visits to SunsetWay (more intense at Clementi).

At SunsetWay, a typical HDB estate, I was able to enjoy some simple pleasures of life like

  • more variety of hawker food, compared to PandanValley
  • cheaper goods in provisions shops, compared to PandanValley
  • much shorter walk to public transport, compared to PandanValley, and easier to reach MRT or Clementi town

— rural HDB estates.. locations unpopular with the affluent. Places like CCK, Yishun, Woodlands further out from MRT. Or perhaps older estates in TPY-Bishan-AMK.

ADL-bx: GEL+Aviva #wife

Posted on by tiger40490

Best CareShield Life Supplements: Should You Upsize Your CareShield Life With Aviva, Great Eastern or NTUC Income? (seedly.sg) is detailed.

== GEL 9858 9752 Johnathan Tan, Policy #6004647642 (ElderShield category in AXS, )
— GEL documents .. can log in with singpass. The “GEL account” needs to be maintained but not needed for auth. When you log in (singpass), you can click on the “health” circle to see the Careshield policy
— independent plans.. https://www.greateasternlife.com/sg/en/personal-insurance/our-products/health-insurance/great-careshield.html shows that (for me)

Score = the number of ADL’s identified by the assessor.

  • when I score 1 ADL, then I get $2.5k/m, from GEL
  • when I score 2 ADL, then I get $5k/m from GEL + $Y from Aviva
  • .. $Y is $5000/m after 6 years, but $4600 for the first 6 years.
  • when I score 3 ADL, then I get $612++ form CSL + $5k from GEL + $5k from MyCarePlus

Premium is also “independent” as in probability theory. CSL premium by CPF doesn’t use up the $600/Y quota.

For wife, relying on her existing $1000/M MyCarePlus, then

* if she hits 1 ADL, no payout
* if she hits 2 ADL, Aviva will pay some amount $X
* if she hits 3 ADL, then on top of $612++ from CSL, Aviva will pay some amount $X
My  prediction: $X is $1000/M after 6 years, but $600 (i.e. 1000-400) for the first 6 years.  In this prediction, total payout is still very competitive (superior?) to the GEL case.
— J4 high payout (5k/m), based on imagination not evidence. I feel I would need lots of unknown “resources” and “support” at least during the initial years of Adjustment.
  • training
  • treatment
  • aids
  • things to keep me engaged i.e. meaningfully busy

Even with hospital bills covered by shield plans, my family would take on a heavy burden. We would need a full time caretaker. Each family member may need to change their personal plans to take care of me. Therefore, I would say compared to hospitalization, long-term care is heavier on family members and more disruptive.

Premium represents a $200/M burn rate (excl medisave) .. a bit too high in my involuntary non-working phase. Risk of over-protection. Sizing should be done based on needs.. as we aren’t affluent.

Even though I am very healthy now, I feel this health is so /precious/…

Beware the risk of overestimating the probability of hit and probability of payout.

— Having $5k/M income would provide a motivation to live longer. (In additional, cpfLife is another $2k/month for every month I’m alive). See living for decades with a condition[disability++]

— level non-guaranteed premium: I guess there are three types of schemes in terms of year-on-year changes. MyCarePlus and GEL plan are Type 2

  1. Type 1: fixed at $4000 forever
  2. Type 2: level premium, but non-guaranteed, subject to change by Aviva, based on future claim experience. If there are too many claims by other MyCare members, Aviva would need to collect more premium from other members (like me) to avoid running a loss.
  3. Type 3: non-level premium — jumps higher every few years.

wiseInvestor[def]: RPR profile #zqbx^xx #w1r2

Posted on by tiger40490

Interns can hit more profits, perhaps by trading cryptos or hot tech stocks…

pain (as opposed to risk and reward) also includes anger.

As I grow older, I am more aware of my pains in investment.
10% loss generates more pains in me than 10% gain can generate happiness.
No pain no gain. I still have 40Y+ to live, so I need to take on some risky assets such as SP500, or Sgp rEstate

k_investor_selfEval

See also

Too broad to be useful? Will focus on my idea of wise investor [mellowing up], which is mostly about 1) breakaway from convention wisdom, or wrong priorities [i] … and 2) risk profile self-discovery.

In addition, 3) Pain is also center stage of becoming “wise”, but behind the scene and less talked about. Various psychological pains [including stressors] are part and parcel of investing.  Those pains need to be  managed. Unexpected, unmanageable pain can be classified as One special risk.

[i]A wise investor understands that her own priorities [Risk/Pain/Return profile] are subtly unique and invariably different from the stereotypical investors. Therefore, a lot of “other investors’ priorities” are the wrong priorities for her. see also

— risk: over-commitment of personal time… A wise investor recognizes the risk of regrettable ROTI, even with the firewall intact
— risk: infatuated investors .. wise investors understand this tendency in herself
— risk: liquidity risk .. often requires large allocation to low-return assets. See make every dollar work hard4us @@
— other risks not specific to the “wise investor”:

  • long-term inflation risk .. See my Nov 2021 mail to Edmund
  • personal legal risk .. A wise investor would not lose sight of this risk.

— pain: stressors in eq-investing has a small section on “wise investor”. A wise investor would notice her internal stress sensitivities and work on stress prevention/reduction/protection.

Disambiguation : in this blogpost, “risk” refers mostly to financial risks; mental/health risk is classified as psychological pain.
— pain: firewall .. handles multiple risks and pains that I won’t list.
— pain: missing the boat on some high-growth assets
pain: FOLB by the cohort
— pain: setbacks .. (various types) A wise investor accepts them as facts of life in investing. She could choose to avoid certain assets forever [FXO, commodity futures..] Like R.Xia, she could decide to stand back and watch certain hot assets after losing money. No right or wrong.
— expected return .. if (a big if) and when all risks are understood and under effective monitoring, then the target return is a simpler question.

To reduce risks and pains, for some wise investors (or older investors), risk_capital could be a very small allocation. The smaller this allocation, the less pain/risk. My HY/PE is one example. Therefore, expected return is largely determined by the personal pain/risk profile.

Non-risk capital would go into low-return liquid assets including contingency_reserve. Some wise investors would find the low return painful.

jolt: It’s no shame to allocate 90% to low-return liquid assets.

I want to be an aggressive wise investor, with growing equity portfolio and rEstate portfolio.

jolt: equity portfolio doesn’t have to beat SP500. A wise investor won’t insist on that as a priority.

hot assets .. require a lot of wisdom and cool-headed detachment. Missing the boat is quite common and acceptable.

Q: Is zqbx [working towards higher returns] or passive acceptance of low returns a quality of some wise investors? 
Jolt: A: yes to passive acceptance. Investing is not personal improvement, not a noble cause, so I don’t associate it with zqbx.  However, I don’t like “lazy” investing. Some due diligence, some PP learning (separate section in this blogpost), some personal growth is part of being a wise investor. It requires effort, focus and dedication, but not zqbx.

— learning .. is a valuable bonus, not always necessary and not always possible.
Jolt: A wise investor may invest in 9 different “things” and learn nothing in depth from half or all of them. Note the different types of learning
— xpSelf has joys from learning and at moments of “short-term”[ii] profits like doses@delight. A wise investor recognizes that. By definition, a wise investor is 100% judged by the rmSelf.. These joys may not be significant to the evaluative rmSelf are are mostly forgotten.

[ii]In contrast, “long-term” profits by definition are very few, and much harder to achieve. For example, I had many joys with Jill’s HY/PE, and FXO, but mostly forgotten. The long-term result seems to be  a negative return.
— what experts to trust .. lots of theories make sense but are not really practical. Some academic theories have limited validity — most eq investing theories use U.S. stocks only, with a few (to a few hundred) thousand data points only. They don’t even recognize regime change.

— small number of experiences.. I told Caroline of  Propnex that most rEstate investors are not wise because we can’t try too many times, esp. compared to stock investors. After one or a few tries, we are experienced, but not necessarily wise.

Buffett said each person has a punchcard and 20 punches to make, and a few good punches would be enough!

==== some patterns of my bad bets. (I keep this section here as relevant.)

  • tx costs.. see https://tanbinvest.dreamhosters.com/18406/3episodes-of-non-recreational-trading/
  • non-positive DYOC .. see https://tanbinvest.dreamhosters.com/18406/3episodes-of-non-recreational-trading/
  • HY/PE poor transparency or regulation .. But German PE, Dr Soo’s first, E12 .. didn’t fail.

See also ## key variables in my bad/good bets
— eg sReit .. good transparency, highly regulated.
The blue-chip sReits have good bid/ask spread
— eg bccy .. bad bid/ask spread and fees; zero DYOC; poor regulation
— eg (neutral experience) US HY mufu .. real net DYOC was 1-3% considering fees and NAV erosion

affordable workout classes: xpSelf^rmSelf

Posted on by tiger40490

Workout classes … is One of the greatest illustrations of the framework defined in rmSelf^xpSelf .

Q1: As of today, do I feel tougher working out by myself compared to a class?

— Q: is this creep? .. (not splurge) Yes according to the evaluative rmSelf’s, but I need to honor the xpSelf.

If I were to answer Q1 during every class, I would give a positive answer 80% of the time. In summary, I do feel good whenever I was in a class.

So there is some minor conflict between the evaluative rmSelf vs the xpSelf. There are other factors at play, though they would make this blogpost more suitable for the open blog.

  • factor: brbr, creep
  • factor: healthy longevity
  • factor: unhealthy dependency, resilience

— Q: how does personal training compare? The xpSelf would feel less rather than more comfortable, and the cost is much higher, offending the rmSelf.

So the best workout class is a large, low-cost class.