Tag: t_w1r2

## BestCountry@@ objectively proud@your local living condition

Posted on by tiger40490

 

A teenager is often told that her country (or city) is one of the best to live in the world. In reality, for every country, its nationals have some advantages and disadvantages, but some of the cited advantages are made up by the media or propaganda. They include things like better weather, wider food choices, police presence, strong military force, diversity in population, young population, rich culture/history. Today I want to focus on the factors widely agreed among the rich countries. By these standards, the Scandinavian nations, Japan, Australia .. probably come on top.

Q: how relevant is this blogpost to where2retire?
A: I think most if not all of the factors relevant to a teenager are relevant to a retiree, too, fundamentally.

  • [i=infrastructure]
  • [f=financial]
  • — half ranked by noteworthiness. The obvious ones are ranked lower. I avoid high-level, vague items
  • inclusive workplaces and schools .. relatively free of discrimination [prejudice]
  • [f] low national debt burden .. lower taxes going to debt servicing
  • security in food, water, energy supply
  • efficient legal system .. accessible [affordable] to the public
  • weather .. not extreme or disastrous like heat waves, hurricanes, flooding
  • [i] flood control .. esp. in tropical locations
  • [i] clean streets .. with some landscaping
  • .. adequate green spaces .. esp. relevant in cities
  • walkable, bike-friendly … not car-first !
  • plenty of exercise facilities .. swimming, stadium, jogging paths…
  • [i] electricity and internet connectivity .. reliable (weather proof), fast, affordable,
  • [i] public transport .. reliable, extensive (re Bayonne), frequent, cost-efficient [affordable]. Grandma often points out the MRT lifts
  • [f] stable currency, inflation
  • [f] low GST, low property tax, low utility bills
  • [i] accessibility for those in need
  • universal and inclusive education for 9+ years. Special needs education, leaving no one behind.
  • [i] pollution control .. air, water, noise
  • [i] public healthcare .. accessible, affordable
  • [i] congestion control .. often comes with high /tariff/ on gas or car ownership
  • street safety .. crime rate,
  • PPP-adjusted median household income after tax?

— More importantly, here are examples of Not “widely agreed” advantages. Many of them are based on FOMO[F] or exclub[e]

  • [e] home to world-class universities/companies? Perhaps parents would envy another country with many world-class colleges… But look at European nations, Japan,
  • [F] a country with pockets of tech innovation? But the locals (as compared to foreign talents) may not be able to benefit. Perhaps young citizens would lament their country’s relatively backward technology but.. Hey, technology is a race! Inevitably, only a small number of national can be leaders. Many developed (and widely envied) nations are technology adopters rather than innovators, in most technology domains.
  • [F] infrastructure .. Perhaps many (including outside observers) would not feel lucky/enviable about limited infrastructure esp. if less connected… But I think some remote island states (NZ, Japan) can be quite prosperous and comfortable. On the other hand, healthcare infrastructure (including sanitation) is a key livelihood feature.
  • natural resources? Look at Japan, Korea, Macau,
  • population density .. there are advantages to dense or sparse locations
  • athletic ranking .. (adjusted by population)

—  Q (related): What nationality is enviable esp. in terms of healthy longevity?

Whenever we compare different passports and identify the handful of lucky nationalities, each of us tends to focus on a specific aspect. There are a wide range of factors. Here I want to explore in and around an important area i.e. healthy longevity.

If a nationality is associated with 1) longevity and 2) “adequate” livelihood, then it would be a subject of envy by most standards.

 

Y Sg home buyers max out mtg quantum: greedy #LIR floor

Posted on by tiger40490

See also

Delphia of OC is a mortgage specialist. She shared her personal observation that majority of Singapore borrowers (probably including non-PRs) would max out their borrowing capacity i.e. loan quantum.

One of the most important limits is TDSR. (For HDB units, another important limit is MSR.) No more than 55% (was 60) of income (including CPF) is allowed to be used for instalment. 55% of total income spent on debt servicing?!  Sounds like dangerous (cashflow) low ground.

I asked her why the “majority” has such a motivation. Delphia said many want to maximize their investment i.e. grabbing the biggest property they can afford. OnePearlBank might be one example.

— interest rate sensitivity

Delphia herself felt buying at the current price level doesn’t sound like smart “investment“. However, such a strategy was considered a leveraged investment at a very low borrowing cost, though interest can skyrocket.

These “investors” believe that if they wait long enough, their leveraged investment would appreciate — sure-win.

When a lender calculates monthly instalment, a key input is the interest rate. A max-out borrower would want a rock-bottom rate like 0.1 ppa to minimize the projected instalment, but MAS uses 4 ppa known as the medium-term interest rate floor.

Wallace Xu said something similar about American home buyers… they are highly sensitive to rate hike.

— my preference for (net) current income and against windfall

I never like to bet against rate hike. I always maintain a war chest to wipe out my loans whenever LIR breaks my threshold. My own “exposure limit” is lower than MSR limit.

When you focus on current income, you will naturally become more careful with LIR cost.

BDYK + fwd hazard rate #BGC/MIH

Posted on by tiger40490

For each overseas rEstate project, there are a few miletones, each with serious hazards/risks

  1. project completion .. Hazards can cause lengthy delays (BGC [1]). Some unreliable developer can disappear (RitzG5). MIH is a good example [2]
    • vicinity development can take decades. Until that vague “milestone”, your building might be the only decent building in the area. No jobs, no parks, no retail, no “buzz“
  2. renovation completion .. furnishing, fixing problems. Some units are “completed” but unusable.
  3. land title registered .. Risks? legal risks
  4. mtg approved .. Risks? poor mtg rate or no banks
  5. finding a local agent and negotating the terms .. hazard? Some locations have no agent at all.
  6. first tenant signed.. hazards? May not find anyone at all for years. Perhaps oversupply in the location. Perhaps the location doesn’t have the buzz of Uptown.
  7. Milesstone-9: 1Y probation completed with the agent .. Risks? Many owner-agent relationships don’t work out.
  8. ^^ One of these milestones may appear to be too trivial to be a milestone, but I have seen investors getting stuck at each of these things, always due to some serious hazard.

FHR [forward hazard rate] := the aggregate amount (count and magnitude) of potential derailers [swans, missteps] per year. Usually we ignore the per-year part [4]. In the beginning we face the highest hazard rate i.e. many things could fall on us or derail our train.  At each milestone, our total (forward) hazard rate improves, as uncertianties become well-known and familiar risks.

BDYK [Better the Devil You Know] is a key observation/experience in FHR.

[1] For example, the BGC asset has survived many hazards and is now a much safer asset than it was in 2015, therefore worth a BDYK-adjusted SGD 300k, even if we ignore (or don’t know) the market value changes.

[2] MIH — When I first paid down payment, FHR was huge and off-putting (show stopper to many investors) largely due to credit risk of an unknown developer. After completion, the biggest hazard was removed, and the asset is now worth a BDYK-adjusted USD 200k.

[4] When do we actually use per-year yardstick? In the stable phase. FHR in the per-year sense captures the amount of headaches, stress, derailers (of my bubble)

Does FHR ever worsen? Only in rare swan events like covid19. This exception proves the norm that FHR always improves until Milestone-9 or somewhere nearby.

— paradox of rEstate concentration risk
If you buy in 9 countries you are bound to hate one of them, often due to hazards. It’s then logical to exit that country and increase concentration in the best of those 9 countries.

On a less macro level, once you are familiar with a given country or developer, FHR would be better than X years ago (when you were unfamiliar). It’s now logical to increase concentration with (eg) MIH.

This “logical” allocation ought to be balanced with the (equally logical) need for diversification.

Look at U.S. or China rEstate investors. Most of them stay in home country. Zero diversification by country.

— positive cash flow -> self-sustainable i.e. the highest level of success.

Q: As of 2014, when we heard of SG investors flocking to an overseas “opportunity”, how many percent of them would reach Milestone-9 of positive cashflow with a reliable local rental agent?
A: Below 30%. Possibly 20%. It’s nearly impossible to achieve positive cashflow, if you have a mortgage with P+I. (Biggest problem is P).

Many investors would ask about my appreciation margin. For them self-sustainability is not the highest level of success. I don’t care about their priorities. I don’t even know the valuation, but I’m sure it’s better than my initial. What’s important to me is carefree and positive cashflow, not windfall appreciation.

— appreciation .. I feel after you can demonstrate that your unit has a proven rental yield, you can get a higher valuation than before completion.

This is logical, but many logical predictions don’t happen. I can list many reasons.

FHR has shown a real improvement. Many of the big question marks and big clouds are cleared.

— Overseas rEstate .. is the main focus of this blogpost. Local projects are much easier for investors.
==== Fwd Hazard Rate, without the “per-year” part, is also applicable beyond pff

immigration offenses and criminal record affects a career more in the earlier stage of a longer career. The FWR depends on the “remaining lease”.

FHR affects a marriage the most soon after babies are born and improves as kids become less dependent on the continuing marriage of their parents.

few adopt my2investment criteria: Tanko+JL.Lim

Posted on by tiger40490

I told Tanko about my 2 stringent criteria to pre-qualify an investment asset. I then asked Tanko ..
Q: why so few in our cohort follow similar principles?

— 1) A (Tanko’s immediate answer): many don’t have enough free cash like 500k (Tanko’s figure).  In The affluent often favor Funds over stocks@@, I discussed 200k as a criteria.

On 5 Feb 2022, I met my HJC classmates. Joonling (JL.Lim) said that most in our cohort (Singaporean Chinese) don’t have a lot of spare cash risk_capital to invest in stocks. He singled out burn rate on car + mortgage. I guess many Singaporeans (Zeng?) in my cohort have over-sized property assets paying out very little (or negative) DYOC — i.e. non-productive assets. I see that as cashflow low_ground.

Put yourself in the shoes of a big(like 500k+) mortgage borrower .. some of you probably don’t want to invest too much into stocks. The heavy debt limits the risk appetite, risk tolerance and overall capacity to take risks. Analogy — gymnasts carrying weights?

— 2) A (Tanko): If they have 500k, many investors prefer to see their 500k staying safe in a bank account, rather than fluctuating in an investment account. I guess my wife is one, so is my dad.

Put another way, I set aside risk_capital, whereas these investors have plenty of free cash yet very little risk capital.

However, some risk takers in my cohort maintain mortgage so as to invest 200k loan money in equities. This amount would be higher-tier risk_capital.

— 3) A (I told Tanko): a fundamental reason is that dividend yield is widely seen as insignificant compared to windfall achievable with growth stocks or SP500 passive investing.

Their burn rate probably makes $1k nonwork income insignificant. See $1k nonwork income=more meaningful to ME than others. To make a difference, they probably need $4k/M or $50k/Y nonwork income. At 5% payout rate, that requires $1M invested. So many of them would not be interested in receiving 5% payout.

With a risk capital below $200k, I would say a 6% nonwork income (below $1k/M) is not exciting or life-changing given their burn rate. Therefore, they probably want to deploy it to big bets.

##when2sell stock/ETF, as recreational investor

Posted on by tiger40490

The question about when to sell a given stock is multi-faceted. In recreational investing, the PnL is so far a minor factor, because my total committed amount is small.

Note the sunk tcost of research. Wiping out a stock 100% (too drastic?) would wipe out the learning. I would rather keep 0.1 share.

Sooner or later I would feel a pressure to sell some stocks. I wonder which j4 below would emerge as the first straw to break the camel’s back.

— j4 sell: need to free up cash ..

  • wipe clean .. RSP[$300], VTI, IEMG
  • reduce to smaller fraction .. DVY[$90],  ARKK, Verizon [$60] ,
  • reduce to 1 share .. TAK, LFC, GE, SPHD/SPYD,

— j4 sell: I foresee a crash? Completely against my buy-n-forget principle.
— j4 sell: get rid of fractional shares, to improve liquidity
— j4 sell: reduce exposure to uncomfortable sectors ..
— j4 sell: when too many forgettable names (small positions) on my portfolio cause distraction and interfere with my navigation. Therefore sell-ALL to wipe out one name at a time.

  • CARA? 90% BUY
  • SWBI? still recommended BUY
  • TCPC? excellent DYOC
  • TXMD? 100% BUY
  • Unit? 7% DYOC

— possibly overbought , considering the low CDY.

  • BGC 1%
  • CARA 0%
  • GE[$100] 0.3%
  • GM [$150] below 1%
  • Ford[$30] 0.5% … keep
  • HTA[$100] 4% .. keep

However, most of these names were recommended BUY and often well-known brands, bought in four figures by “other investors”. In hindsight, I should have stood back.

==== How to choose which name to sell
— criteria: Not a DYOC cash cow .. I won’t give up
— criteria: Not a (for wipe-out) household brand like Macy’s or Baba
— criteria: not a “recommended BUY”
— criteria: hopefully not in a growth sector like bio-science
— criteria: Not a prized, cherished triple-jumper (i.e. more than 200% price gain) like APHA TROX IVZ RWT OGI

  • It has almost an equal chance of further appreciation as other stocks.
  • I want to keep it as justification for MOETF system
  • Also, the price increment provides a buffer against a down turn. The protection (does grow with the increment) is defined as the ratio of increment/currentPrice. For example a 90% protection means my position would go underwater iFF the price hits 90% loss i.e. my current return is 900%.

##[22]wise consumer: hallmarks

Posted on by tiger40490

— showcase of HallmarkA: why avoid branded colleges
If a branded top-quality middle school costs $20k/Y over 2Y, then many would be able to afford it, but could the brand give the parents esteem for decades?

In contrast, a branded college does make the parents proud for decades, and makes the graduate stand out in over-crowded dating markets, but look at the price tag. If the 70k/Y price tag is clearly /affordable/ to you, then you won’t need to be a “wise consumer”. For most families, however, 300k over 4Y is too high, so these families need to assess the benefit/cost.

Those with insider info often realize the benefit is not so high.

— (hallmarkA) At a fancy restaurant you taste something very nice (and expensive) . Later you find out it is similar to a cheap supermarket item that you have never tried.

The fancy restaurant version is subtly different (therefore expensive) but to the first time taster, the supermarket version is equally delicious. Even if company pays, I would still prefer the cheaper version.

— (hallmarkI) mass market .. How relevant (to me) are mass market statistics? Many mass market surveys are increasingly irrelevant to me, as they reflect ordinary people’s
* commute conditions
* work hours
* reported work stress, burn-out
* workout, nutrition, BMI
* savings, retirement plann, mtg, rental burden

These so-called “mass market profiles” are increasingly different from my profile. Therefore my buying priorities are different, too. Am in an exclub defined by myself, not based on FOMO.

— (hallmarkI) exclub/miswanting..

Property agents, car salesmen, college admission offices, luxury product sales/marketing teams … make huge efforts to impress on us the differences between the haves vs the the have-nots.

Some of them in their unspoken hint are careful to position you, the prospective buyer, as above average in the local market but somewhere below average among “my clients”. They like to describe their existing clients as filthy rich, indirectly setting role models for the rest of us.

That’s a form of mental manipulation and brainwash. However rich you are, there are always some “existing clients” who are better off! Exclub.

Now in my late 40s it’s becoming increasingly clear that those “haves” have acquired a lot of white elephants. For example,

  • car is not an asset.
  • wines, fancy electronics are not always good for their children’s wellbeing
  • branded college is not necessary, but a conducive environment is.

— Two hallmarks of a wise consumer

  1. hallmarkI (vague): knowing what things are truly important to yourself.
  2. hallmarkA: knowing what unpopular/unconventional Alternatives are Actually Acceptable to yourself

Some examples that help explain the hallmarks

  • [AI] eg: free books
  • [A] eg: refuse to buy sports merchandize. Use simple substitutes instead.
  • [AI] eg: avoid branded sports shoes. Try the low-cost shoes and trust your own feeling of comfort
  • [A] eg: slightly dented fruits

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.

[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

 

me^SgFolks hav`DCC rEstate #debt

Posted on by tiger40490

See also %%riskTolerance: which countries feel OK

DCC[developed commonwealth countries] refers to UK/Aus/NZ/SG

I often feel inferior and second-class about my overseas rEstate portfolio, but it is vague and possibly irrational. Let’s pit my portfolio against theirs.

Paradoxically, in a closer look, mktRisk/NRY/appreciationPotential are not the key yardstick, in the presence of currency hazard .. legwork .. credit risk… economic derailers

Legal cost is much lower than rich countries, though legal process is often less efficient.

— same initial cash outlay: SGD 900<-1000k
Perhaps 2<-3 condos vs mine [Bj + SEAsia]
— 🙂 🙂 currency hazard .. See %%riskTolerance: which countries feel OK
— 🙂 🙂 debt burden. https://tanbinvest.dreamhosters.com/26043/sg-home-buyers-max-out-mtg-quantum/ shows that majority of Singapore home buyers take on the maximum debt burden, to maximize “investment”
— 🙂 cross-currency LIR[ Loan IR] hazard .. See %%riskTolerance: which countries feel OK
— 🙂 prime locations .. see Eynesbury by Resimax as an example
— 🙂 commercial not residentail
— 🙂 taxes are lower
— 🙂 local agency remuneration is lower.
— 🙂 Legal cost (lawyer fees++) is much lower than rich countries, though legal process is often less efficient.
— 🙂 If I have to travel there for sight seeing or problem resolution, total trip cost is lower.
— 👎👎 country-risk::economic .. more mature developed economies
— 👎 country-risk::legislation .. developing countries tend to impose capital control, foreign ownership restriction
≈≈ liquidity ..
👎 presumably less developed market and probably harder to sell than in UK/Aus without a loss
🙂 lower tx costs [fees] require a smaller price gain to break even
🙂 My low-quantum units presumably are affordable to more buyers, therefore easier to sell without loss

≈≈ NRY .. no clear winner..
Before covid, I can only guess UK/Aus NRY (post-tax) is about 2-5% excluding LIR, considering vacancy rate…
🙂 My Cambodia NRY is superior

==== minor factors
— 👎 country-risk::legal .. but after the initial years, FHR improves
— 🙂 geo-diversification .. no clear winner. They might be concentrated in one country, at most two

##[22]to theRich^Poor, extra$$means… #quality

Posted on by tiger40490

Q: what extra wealth/income means to the rich vs the poor?

(There is a difference between wealth and income, to be discusssed.) This blogpost is about “extra” wealth or income, beyond what we need right now.

— To the affluent, extra income means

  1. Premium education for their children and grandchildren
  2. Better housing in terms of size, location, renovation, insects,,,, [SBH]
  3. Premium nutrition
  4. working mom staying home to take care of kids
  5. More importantly, extra wealth means higher capacity to cope with a variety of non-trivial missteps (or swan events) such as
  6. * legal complexities
  7. * juvenile deliquency
  8. * addiction treatment .. Nams
  9. * minor accidents
  10. * loss of valuable belongings, including at home

I feel it’s more important to set aside slack resources for these mistakes, rather than paying for  “higher quality” .  Only a small subset of “quality” solutions are meaningful to me, such as
* local agents for my overseas rental property
* hospital offering better care
* safer car

— To the poor, (wealth is smaller and transient) extra income means

  • Food security
  • Basic healthcare
  • buffer against rising inflation
  • long term saving or retirement saving? Forget it.

— To me after my barebones ffree, extra income like NNIA means .. (the more specific the better)

  1. Shorter commute
  2. Less stressful job or more enjoyable job, perhaps at lower pay
  3. more time with grandparents
  4. Workout classes, but see the blogposts on dependency
  5. premium healthcare but only when needed like in old age