Tag: t_w1r1

every SGD dollar=backed by hard asset #ownership

Posted on by tiger40490

 

As of 2020, the total currency in circulation was S$57 billion.[6] This figure was 29 billion in 2012. All issued Singapore currency in circulation (notes and coins) are fully backed by external assets in its Currency_Fund to maintain public confidence. Such external assets consists of all or any of the following:[9] (a) gold; (b) foreign exchange in the form of time deposits; Treasury Bills; (c) securities of (or guaranteed by) foreign governments or international financial institutions; (d) equities; (e) corporate bonds; (f) futures; (g) other asset.

As at 31 March 2017, MAS’s assets (S$395 billion) were more than seven times larger than the assets of the Currency_Fund (S$55 billion).

Official Foreign Reserves (mas.gov.sg) shows similar history levels for end of 2017. By the way, the end-2019 level was below end-2018, possibly due to covid19 preparation

As part of the MAS total assets, Singapore’s foreign reserves officially stood at over US$288.2 billion, as of July 2022 according to the MAS.[11] This is confirmed by the monthly query result on MAS Monthly Statistical Bulletin – IV.7 Official Foreign Reserves

2022 Q1 gold.org/IMF data shows similar numbers:

  • SG total reserve [sum of the below] = USD 434.4 billion
  • SG FX reserve = USD 424.8 billion
  • SG gold reserve = 153.74 tonne = USD 9.6 billion, or 2.2% of total reserve

MAS assets including OFR+gold add up to S$580b as of Feb 2022, but excludes assets managed by GIC and Temasek. All of them are owned by the the SG gov, operated by the PAP administration. See “oil money” below. Comprable to the Nobel memorial fund, or the Harvard endowment fund, it is not owned by any SG citizen. The private money held by SG citizens would add up to a separate amount. In contrast, the assets in CPF is 100% owned by individual citizens (simplest case), not owned by SG gov; the assets of IBM is 100% owned by shareholders. One shareholder could be Intel, another could be SG MAS.

Each (portion) of the SGD 29b was created exclusively by MAS, either physically or (presumably) electronically. Electronically means deposite into a bank account. Every physical note has a serial number. Either physical or electronic, a new SGD 1 represents a kind of “claim” on the $55b CurrencyFund.

— owernship of CPF money

Backgrounder: In general, every amount has an owner. (A central bank and a government is also a kind of owner.) MLP managed 40b but each dollar has a known owner. When Intel invests $100m free cash, that 100m is “owned” by Intel, but Intel stocks are owned by millions of investors including institutional investors. Ownership is complicated by holding companies and investment trusts.

1. CPF money belongs to individual Singaporeans, and not government’s money. This ownership difference must be understood first. If $200m CPF money (including my money) is managed by GIC, then this $200m is not “government’s money”. See MOF | Is our CPF money safe? Can the Government pay all its debt obligations?

2. CPF money is invested with a fund manager — GIC. GIC also invests “government’s money.” The dual mandate of GIC is extremely confusing until you understand the ownership. Similar to GIC,

  • GSAM, was managing client’s money, employee’s money and Goldman’s house money.
  • MLP was managing client’s money and founder Izzy’s family money

— oil money .. when oil appreciates, many gulf countries became richer. Basically, the central banks and treasuries became richer with a bigger OFR.

Q: Who have the ultimate ownership of the oil assets (+ the derived cash)? Some say the king, some say the citizens, but I would say “not so simple”. The government is the proper owner, as stipulated in the constitution.

 

Risk_Capital [def]

Posted on by tiger40490

https://www.fool.com/investing/general/2015/08/20/what-is-risk-capital.aspx says “It refers to funds that are invested in high-risk, high-reward investments…. Risk capital is money that, if lost completely, would not have an overly harmful impact on you financially. It’s money you can afford to lose.” Exactly what I told my sister.

Investing (he didn’t write “investment”), at its core, is about accepting a certain amount of risk to achieve a reward.

Some people can’t (won’t bother to) articulate and formulate their risk appetite, risk sensitivity, risk profile and risk attitude as carefully as I did in my blog.  For them, it may be useful to decide on the amount of risk capital. It’s a concrete amount of money.

In fact, every investor need to decide for herself an amount of risk capital. There’s nothing wrong with a zero risk capital. My wife once had a zero risk capital.

Note risk capital is a form of capital, a seed to grow.

A defining experience of risk capital — In 1997, my 3rd year in college, I failed to define my risk capital cap and committed my entire family’s savings (600k?) into high-risk, leveraged commodity day trading. I now have probably .5 to 1 million risk capital invested across

— eg: E12
— eg: PE assets from Jill
— eg: overseas rental properties
— eg: SIA investment .. defines my wife’s risk capital
— when you decide the risk capital amount for yourself, you need to determine the amount and quality of a stable foundation beneath the risk capital.

Q: What’s the stable foundation for me? See mail to Joshua.

##low-cost pain relieves #counsel`@chen2mi2

Posted on by tiger40490

How about mesh router? Sounds like creep.

How about Bata sandals as a pain relief? Depends on durability.

see also

“low-cost” is subjective (No debate please.) but Indisputable value-for-money.

  1. — half-ranked by impact and value of the pain-relief
  2. eg: dhost.. relieving those countless pains on the free wordpress.com site
  3. eg: small laptop with git-blogg .. without it I couldn’t work on my active ideas. A kind of pain.
  4. eg: 2-printer lifestyle, with plenty of paper + spare cartridge
  5. eg: standing desk .. often feels very comfortable. Therefore I call it a pain relief.
  6. eg: powerline networking .. relieving pain of wifi dead zone
  7. eg: $10 LED lamp .. relieving pain of power sockets + heat from a table lamp

Items below are medium-cost pain relieves.. not really belonging to this blogpost.

  1. eg: counselling on chen2mi2?
  2. ElderShield

The rest of this blogpost are extensions of the theme.

— Sophia Cui said cars are real pain relieves even in SG. I don’t understand it, but she  has freedom to spend her own money. Not low-cost enough to be a lifestyle creep.
— I asked Umesh why his stay-home wife needs a maid, when his 67-year-old mom can help with childcare. I liked his detailed answers.  I think old habits are the biggest obstacle, if someone in his shoes really wants change (i.e. remove helper). Many families similar to his could make do without maids.

One old habit is home-cooking-as-default. His mom is possibly rather old for a change in this habit, though some grandmas do change.

I guess the #1 decision maker is likely the wife (rather than husband or mother-in-law). Without the maid, the wife would take on most of the workload. Attitude and perception is possibly the key (difference from my wife). She actually worked for a while before having first baby, and after the baby girl grew bigger. She was possibly less used to stay-home-mom lifestyle than other Indian housewives.

— creep? Lifestyle_creep is a vague concept. This blogpost provides valuable clarification using sharp examples.
Jolt: dhost is a great example. I couldn’t afford it in my younger years.
Jolt: 2-printer does sound like unnecessary luxury, but so did powerline when first deployed
(jolt: two-car family sounds like creep, but so do my multiple laptops, but this jolt doesn’t belong to this blogpost.)

Q: What specific criteria disqualify dhost as lifestyle creep?

  • criterion: total hours saved (less measurable than $cost)
  • .. total annual cost is not really a criteria per se but a crucial factor
  • criterion: In hindsight, do you see it as wasted spend or overpriced product?

my take on FIRE

Posted on by tiger40490

update: FIRE doesn’t pay enough attention to disasters…

There are countless (too many) online discussions of FIRE, largely in the U.S. context, and largely among younger bloggers (See https://www.forbes.com/advisor/retirement/the-9-fire-blogs-you-should-read/).

I find the discussions less relevant to my situation, given my limited bandwidth, but I remind myself to never dismiss inputs from young people or inputs from other cultures. Once a while, I could find relevant pointers, perhaps in car choice and college choice.

— peers influence

In the U.S. I will be surrounded by Chinese and Indian peers. They represent a negative influence on me in terms of FOMO (kiasu, consumerism).

Similarly, I think my wife felt a form of pressure living in Newport among the rich and educated white-collar young moms.

With my unconventional choices, my journey would be a lonely journey, unless I find like-minded and rational voices in the FIRE discussions. Those who write a lot (like the bloggers) tend to be fairly rational like me.

— defenses (financial++)? Largely missing from FIRE discussions, various defenses (cushions, buffers, shields) form the bulk of my planning. The rest of my planning covers popular, mainstream topics like savings rate, nonwork income, brbr,,, These topics does relate to my defenses but my focus on defenses is not shared by the FIRE discussions.

The bedrock of my defenses, the bedrock of my financial planning is career longevity — FIR-End@life.

— parenting cost — is seldom discussed. An elephant in the room.
— withdrawal rate — is present in CPF-life, not in my current FIRE planning.
— Social security — is less reliable than CPF
— Malaysia — (and China) is a viable option for my wife and me, if our long-term planning turns out less successful than anticipated.
— homesteading is most popular in the U.S. but not every early retiree likes it
— healthcare — is country-specific. The U.S. discussions (not a lot) is largely irrelevant.
Beside the long-term costs and the major hospitalization costs, every outpatient medical cost can add up a lot

–Inflation — is a key risk missing in some FIRE discussions.

Gold can offer effective protection, but is seldom discussed. I think the FIRE guys may dislike the carry cost

U.S. inflation is higher than Sg.

— stocks — is a prominent feature of the FIRE discussions. I think many of my U.S. friends also rely largely on stock portfolio. Most of them rely on index ETF.

Worth learning.

— alpha males: MMM, Jacob (ERE) and the leading FIRE bloggers are all alpha males with

  • health
  • intelligence, talent
  • education, wide-ranging practical knowledge mostly self-acquired
  • mental and physical energy, endurance
  • formidable intellectual resource to compensate for whatever financial resources they have accumulated.

In contrast, the regular guy has much less capacity to pull it off.

MYS ^ outskirt@SG

Posted on by tiger40490

Background 1; I used to focus on d2stadium, d2lib. Now only d2mrt is important. In my older days, even d2mrt would lose its significance to me. Remote parts of SG might be best. See also remote HDB locations.

Background 2: In my retirement planning, My default crbr is SGD 3k. Housing is a $0 net cost, assuming I live in Toa Payoh.

Sugg A: If I choose to live in a remote outskirt of SG (Choa Chu Kang, Yishun, Sengkang,,,), then housing can become a net profit domain, due to lease spread. Suppose this figure is 10% better than the default.

Sugg B: Malaysia retirement is a natural extension of outskirt SG. It should produce even better crbr and brbr, more than 10% better than default. Malaysia retirement remains an important backup option. If feasible, then it is likely to reduce my crbr (couple retirement burn rate) by 20%, partly due to rent, food and transport. In another blogpost, I estimated nutrition as 50% of crbr.

Remember, during retirement, brbr still matters esp if I descend to cash flow low ground.

expensive cars breed unhealthy over-usage #driveway

Posted on by tiger40490

k_X_car_dependency

Quality of life is correlated with more walking/cycling, less driving. FIRE bloggers frequently advocate living close to work and minimize car usage.

Owning an expensive car makes you want to drive it more, and walk less .. lower quality of life.

In G3top articles@car-free liv`]U.S.#w1r2, the American author said

With that beast sitting in my driveway, I often felt this anxious need to go out and do something: run errands, pick up groceries, etc. etc. I was like a child with a pair of scissors in my hands: you just want to use it. Once it was gone, I kind of felt lighter. I no longer felt the pressure to get out of the house and do something simply because the car was sitting there. I have thus consolidated my trips.

xp: I feel the same about my foot massager, my back massager, my puch-bag, my spectacles … The more you have spent in terms of money and time, the heavier this pressure. The more expensive your car is, the worse you would feel leaving it underutilized in the garage 95% of the time. Rental car is expensive but worth considering.

  • The fancy electronics in the car could become outdated and worth-less after 5 years.
  • some replacement parts may become hard to find when they reach end of life defined by the manufacturer.
  • Prolonged disuse can cause slow damage to some mechanical parts.

 

stats@U.S.renter households #covid19++

Posted on by tiger40490

See also home ownership rate

https://www.bbc.co.uk/sounds/play/w3csz8mz is a BBC short program, consistent with the statistics from other sources. If accurate, then these pictures make a backdrop for my family to be seen as /affluent/ immigrants when we arrive in the U.S.

==== based on https://www.aspeninstitute.org/blog-posts/the-covid-19-eviction-crisis-an-estimated-30-40-million-people-in-america-are-at-risk/ in Aug 2020
( For a Singapore perspective, https://www.mnd.gov.sg/newsroom/parliament-matters/q-as/view/written-answer-by-ministry-of-national-development-on-households-living-in-hdb-rental-flats has some Singapore stats. Due to my bias, I tend to perceive it as more accurate than the U.S. stats. )

.. an estimated 30–40 million people in America (presumably beyond citizens) could be at risk of eviction in the next several months. Many property owners, who lack the credit or financial ability to cover rental payment arrears, will struggle to pay their mortgages and pTaxes and maintain properties. The COVID-19 housing crisis has sharply increased the risk of foreclosure and bankruptcy, especially among small property owners.

Multiple studies have quantified the effect of COVID-19-related job loss and economic hardship on renters’ ability to pay rent during the pandemic. While methodologies differ, these analyses converge on a dire prediction: If conditions do not change, 29-43% of renter households could be at risk of eviction by the end of 2020.

30% of renters (in some unknown survey) indicate that they have borrowed cash or obtained a loan to make rental payments. Tenants are increasingly using credit cards to pay the rent.

Personally, I find these percentages too high to be realistic.

— rental unit stats
As of 2020, “mom and pop” landlords own 22.7 million out of 48.5 million rental units in the U.S. housing market. In addition, I think there exist additional “rentable” units out there, but not put on the rental market, perhaps because owner doesn’t like to deal with tenants.

As of 2020, 44% of single-family rental units have a mortgage or some similar debt. Percentage go up when you go beyond SFH. 65% of properties with 2 to 4 units and 61% of properties with 5 to 19 units have a mortgage.

https://www.huduser.gov/portal/pdredge/pdr-edge-frm-asst-sec-061118.html has lots of details.

— renter population stats
2020 Apr: NMHC and the National Apartment Association informed Congress in April that “more than 25 percent of the households that rent in the US may need help making payments” because of COVID-19 rental hardship, translating to nearly 11 million households and 25 million people.

More precisely, in 2020 there are 100.8 million people in 43.8 million “renter households”.

1 in 3 Americans (probably including foreigners) live as renters, according to https://www.nmhc.org/research-insight/quick-facts-figures/quick-facts-resident-demographics/renters-and-owners/

14 million, or 30% of, renter households include children. I think most renter households desire to buy their home when they have children. Many of these 14 million households are unable or unwilling to.

In Singapore, About 52,000 households currently live in HDB rental flats under government schemes.

— rental burden among total household expenses, even before covid19

 

##SG medical inflation: Cushions #JL.Yuan

Posted on by tiger40490

See also latency无底洞 for an example of medical inflation as CPIx inflation.

— My multiple layers of financial protection against medical costs.

  • first layer — employee health insurance. Most Singapore employers cover major hospitalization + some outpatient
  • [u] 2nd layer — shield plans for hospitalization. My own shield plan has SGD 400k/year max payout, with some minor limitations. It costs me about SGD 2k to protect my entire family.

Main complaint from Zeng Sheng — annual deductible in shield plans. This was introduced by government to /deter/ mindless overconsumption of medical resources. For example,

– unnecessary tests is a common waste in Singapore and U.S., contributing to medical cost inflation.
– hospital ward have discharge criteria to stop insured patients overstaying

Both of these layers are reimbursement-based. Additionally, I also have a small insurance paying a small lump sum without needing a receipt:

  • [u] 3rd layer — early critical illness, covering cancers, heart + 30 other major diseases.

In my case, the two perceived likely killers are heart disease and cancer (but based on questionable evidence)

  • [u] 4th layer  — if I’m incapacitated (aging or chronically ill) and can’t live my daily life by myself, then I need full time outpatient nursing care — cost is not covered by hospitalization plans, so I bought an eldercare supplement that pays $5k/M
  • [u] 5th and last layer — any other hospitalization cost is payable using CPF Medisave account, either my own, my wife’s or my children’s. In contrast, the U.S. Medicare system doesn’t offer a personal pool of fund… too much /legwork/ before you get covered.
  • ZengSheng suggested PA insurance, but too complicated in my experience.

The above are the layers of protections for major medical. In addition, there are also low-cost outpatient options:

  1. [u] TCM (Traditional Chinese Medical) doctors are available everywhere in Singapore, and cheaper than GP doctors. My dad used them frequently in Singapore and China. So did I in NY, but only in Chinatown. When I retire in Singapore I will rely on TCM for many types of minor or chronic conditions.
  2. [u] Singapore polyclinics are subsidized community hospitals catering to low-income citizens. If and when I retired in Singapore, I will rely on polyclinics a lot more. In recent years, they charged me $6.80 per visit. This is not a charity. Doctors are fully certified, often graduates from NUS medical school.

[u = limited reliability, affordability or availability in the U.S. system]

— U.S. vs Singapore
Compared to the tiny red dot Singapore, U.S. is a more resourceful, rich and advanced country with economic of scale. Yet, paradoxically U.S. residents have reasons to worry about the long-term reliability of their healthcare “cushions”.

I think the U.S. (public+private) healthcare is unsustainable, fragile and afflicted with excessive waste and inefficiency. See why U.S.medical cost higher

SGX n Sgp_fin_sector

Posted on by tiger40490

k_hongkong

When people compare two financial centers, they would compare the two currencies (and capital control);;; the two AUMs [1];;;; the two financial sectors’ workforces;;;; the two work visa policies;;; the two regulators (and stable, progressive legal frameworks);;;; the two tax regimes [for institutions, investors and employees];;;;; the two English proficiency standards;;;; and the two cities’ financial (beyond stock-) exchanges. By these standards, Shanghai is lagging behind as a _global_ financial center. In Singapore’s case, Sg stock exchange has been losing market share, losing “customers” [IPO companies, retail investors,,,], but things are not as disastrous as perceived —

  • SGX is more than the (sleepy) stock exchange… SGX is profitable mostly from derivative business including commodities.
  • Singapore is doing fine as a financial hub, esp. a PWM center, albeit with a sleepy local stock market.
  • Switzerland is a PMW financial center, without big financial exchanges. I think Singapore has chosen a similar direction.
  • Therefore, the persistent criticism on SGX relative to HKEX is being challenged and rebuffed in the Bloomberg article below.

As to the eq business, SGX is playing the hedgehog, presumably resigned to a shrinking market share, and tightened “quality control”, in a bid to strengthen its reputation as home to conservative, traditional, proven (some say Sunset industry), safer stocks. Such stocks are “suitable” for local investors + some private banking clients. I guess many institutional investors globally like the defensive dividend stocks on SGX.

I think a nearby regional bourse may boast far more listings (than the Sgp bourse), but often mixed quality, including many small, less proven stocks that may not qualify for the major exchanges. Analog — my dad authored many quality academic books, but far less than other authors of low-quality books.

[1] aggregate AUM across all financial companies of a city is an indicator of aggregate profit, tax revenue, and fund mgmt job market. More broadly, AUM (smart_money) is also an indicator of the financial stability of the country. Temasek^MAS_OFR^GIC shows about SGD 5T AUM. Note Smart_money is different from hot_money. Smart_money is legally free to leave but there are financial consequences so most investors “stay here” long term.

—  based on a 2019 Bloomberg article (https://www.bloomberg.com/news/features/2019-02-11/the-incredible-shrinking-singapore-stock-market)

As of 2021, Singapore was ranked #2 most competitive (not largest) wealth management center — ahead of Hong Kong and second only to Switzerland globally.

One reason why total listing is lower on SGX than other exchanges? SGX doesn’t “refrain from delisting zombie companies just to keep its numbers up”. A smaller pool of companies limits the choices investors have, even as the fund management industry continues to grow. A lot of private bank money is now in Singapore, and they actually like the core, somewhat boring, defensive stocks.

SGX main board’s backbone consists of safe, steady stocks favored not for their growth prospects but for their dividends.

Q: Are SGX stocks showing better total return than other regions, measured in SGD?
A: yes, better than all regions (except U.S.), mostly due to dividend
A: measured in USD, I think picture would be even stronger

Having a sleepy stock market (SGX) does little to burnish Singapore’s reputation as a financial hub, according to one practitioner.

A Maybank economist and a SGX officer both cite SGX’s strengths as:

  • an established REIT market;
  • notably high valuations for medical-services companies;
  • a good track record in listing consumer stocks
  • about half of the companies listed on SGX are foreign
  • institutional money trusts the Singapore market

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