Tag: t_w1r6

##pff protection: powerless against SOME swans[def]

Posted on by tiger40490

Q: Why do you think Singapore among many small countries keep building their national reserve, if the reserve are powerless against so many disasters?
Q: Why does the global insurance industry has grown over centuries, with ever wider coverage, and many policies lasting 50-100 years?
Q: Why do credit unions (and banks) even exist if long-term saving and lending is actually based on shaky ground?
Same Answer: The reality is , the world will not end in 100 years, so the consistent savers do build up /formidable/ resources.

We tend to exaggerate the likelihood of various headline disasters, and then reach un-calibrated, quick, sweeping conclusions that “financial protections are often close to useless”. Such protections including

  1. gold,
  2. insurance plans
  3. government health insurance
  4. bank deposits in a resilient currency

Financial protections can be more reliable than other protections like levees, military protection, self-defense…. See also reliable shield: burnRate^wellness habits. There are rather few disasters that financial protection can’t help at all.

  1. political upheavals [looting, revolutions] that seize assets of private families. This happened to my father’s family and my mother’s family, but I won’t say financial protections were completely useless. It also happened in Cambodia (Grandpa pointed out) and perhaps Eastern Europe. I discussed this with grandpa. He said this will not happen again in China.
    • rare: armed conflicts — somewhere in your country is still “manageable”, but if it hits your city, then I hope money can buy you some travel tickets or weapons. Such things never happen out of the blue, so you have years to prepare.
    • Defining feature: anarchy including government-sanctioned anarchy
  2. hospital overrun — at national level can still be manageable, but if your city hits hospital capacity and somehow you can’t seek treatment in another city, then money can’t help. I think this happened in Wuhan, Span, Italy, NYC. Thanks to lessons from covid19, this is less likely to happen.
  3. ==== For below items , financial reserve can provide partial /relief/ or at least buy some precious time
  4. stock market boom and bust, wiping out a big chunk of your wealth. One of the most frequent disasters.
  5. government financial reform hurts my cohort. I am confident that in well-managed systems like SG or U.S. we would be given sufficient advance notice/warning.
  6. burglary .. nowadays most people keep bulk of assets offsite.
  7. — For the items below, the threats appear to be approaching from a distance. The financial cushions you built can buy you some time + some real benefits relative to the unprotected larger population.
  8. rare: high inflation more than 50% a year
  9. severe currency devaluation short of hyper inflation .. imported inflation
  10. very rare: famine — hitting somewhere in your country is still “manageable”, but if famine hits your city then money can’t help. Luckily such things always develop over decades , never suddenly like a pandemic, so your money can help you prepare. Other rare natural disasters include earth-quake, tsunami, but they affect fewer people.
  11. population aging leading to ever more people drawing from (rather than contributing to) a dwindling pool
  12. peak oil
  13. global warming and sea level rise; climate change and desertification.
    • Note sudden global-scale natural disasters including cosmic collisions happen only in sci-fi.
  14. global protein shortage but short of famine

— “Black swan” the concept .. Most writers use this term for _financial_ events. By strict definition, black swan events are so rare and unpredictable that assessing the probability will be guesswork and not based on data.

Is it simply better to put aside this theory? Well, one can study the pattern of past black-swan events and try to learn something, but I don’t know how useful that is, given that predicting similar events are by definition nearly impossible. I find it fun to read history. It doesn’t always offer any actionable insights though.

SG economy has experienced many large shocks. (These shocks could be considered white swans.) I feel the PAP leaders understand the vulnerability inherent in this system. They try to turn the vulnerability into agility.

 

SG CPI-inflation: 30Y xp, basket composition

Posted on by tiger40490

% of burn rate … excludes tax payment, P in P+I

Is it better to spin off to a new bpost [[30Y xp@SG inflation]]?

k_deflation

For long-term burn rate management, inflation (along with medical) is one of the top 5 concerns. Long-term (30Y) prediction of inflation is unreliable. 3k/M burn rate doubling over 20Y is an unreliable prediction.

If we exclude flights, enrichment, bx, rental cost, then the crbr (couple retirement burn rate) is showing very low inflation. Indeed, each individual’s concept of “basket of goods” can vary greatly, just as each person’s retirement burn rate. (The last observation was echoed by Officer Teo at Bishan CPF service center.) My own burn rate record-keeping is more reliable and relevant data source than official inflation, though I can derive insight from official “basket of goods” including housing, private car, enrichment.

==== CPI basket. https://www.singstat.gov.sg/find-data/search-by-theme/economy/prices-and-price-indices/related-info/faq-on-cpi shows the percentage weights for an average Singaporean family, which contrasts my percentages (in color):

  • 25% housing + utilities .. (excluding telco) SG CPI uses imputed rent, so this weight is comparable to mine (30%). From here on, I need to include a phantom $2k imputed rent into my monthly burn rate. Also 25% weight in U.S. CPI
  • 21% nutrition
  • 17% transport … (including flights) more like 10% due to absence of car
  • 8% recreation + culture …. probably including tourism, dining
  • 6.5% education .. more like 15-20% in my basket
  • 6.5% medical .. (including bx, excl wellness) $176/M more like 4% of my 5k/M. Was 10% in my basket during Q3sg.
  • 5% household_durables … (unfamiliar category) includes semi-consumption or big-ticket items like furniture, electronics
  • 5% misc
  • 4% comms .. includes phones and monthly bills. $200/5k = 4%
  • 2% clothing

Warning: CPI excludes non-consumption expenditures such as loan repayments, purchases of houses, income taxes,,,

Q: which category is currently my biggest category, beside housing?
A: nutrition, utilities (MRT, energy, telecom…)

==== Q: Did individuals’ basket price double over 30Y?
Raymond said “less than doubled over 30Y”. Raymond pointed that actually some items became cheaper, often thanks to Chinese improvement in quality. (See also https://tanbinvest.dreamhosters.com/wp-admin/post.php?post=549&action=edit)  Raymond also felt housing inflation is too high due to government. I think he mostly referred to BTO prices.

Zeng Sheng said “maybe 60% increase” since he arrived in 1998 (22 years ago).

Pauline Teo’s book basically says “yes”, using 3% compound inflation rate. The Jan 2021 DBS seminar also used 3% compound inflation over 20 years. The Singapore CPI inflation rate shows average around 2%/Y, according to my google search in 2020.  BeReadyWithCPF microsite also used 2% inflation to forecast retirement cash flow.

— in 1994 I started living on my own, spending perhaps $500/M excluding rent. When I first met XiaoAn I think he guessed “probably below $1500 including rent” and I said yes. Assuming my 2001 burn rate was $1k/M excluding rent,

Q: would I be able to live alone today at the same burn rate?
A: Yes I’m confident. Look at my c++US phase excluding rent + airfare.

— Q: has price doubled over 30Y from 1991 to 2021?

  • shirt, pants, shoes – i feel didn’t double
  • pouch — doubled.. was probably $2-$3
  • cinema .. didn’t double. Alternatives include home movie
  • backpacks — didn’t double, due to cheap imports from China
  • doctor consultation – didn’t double, due to OPEC-style price control
  • —- nutrition
  • cheapest coffeeshop meal – didn’t double. $3~5, based on … 10 observations. My recall is rather imprecise and unreliable, often mixing cooffeeshop and foodcourt prices.
  • foodcourt .. comparable foodcourt meals costs $5~6. If I compare the price figures displayed in food court, then apparently doubled, but most of those stalls I “never” try. Probably in 1991 they were already pricier than mixed vegie rice.
  • bread – didn’t double
  • milk – didn’t double
  • Burger – didn’t double
  • Ice Kachang (and other deserts) – more than doubled. Used to be $0.60. I feel this is classic luxury item. I should simply avoid it.
  • —- housing-related
  • HDB rental – I was paying $300 in 1995 to 2005. Now should be more than double.
  • electricity tarrif before GST: 16.7c/kWh as of 2005. Not doubled.
  • —- transport:
  • MRT fare – roughly doubled. In contrast, NYC subway has increased from USD2/trip (2007) to $2.75 now.
  • bus fare — nearly doubled. Was 50c
  • air ticket – didn’t double. Actually lower if you include Budget airlines.
  • Taxi meter fare nearly doubled, but Grab is a bargain

https://tablebuilder.singstat.gov.sg/table/TS/M212951 shows about 69 specific items (of the CPI basket, mostly nutrition). It plots the price change over 12 years.

What items are in the hard_basket?

— over 30Y, some things became …. cheaper !? See also globalization reducing minimum cost@acceptableFood

  • laptops, budget smartphones, routers
  • broadband
  • mobile plans. If you look hard, you can find some “products” that are cheaper than before.
  • bicycles esp. foldable
  • haircut — $5 in 1991
  • fan
  • stationery
  • white sugar, beer, … according to singstat

PFF habits: learn from SG gov

Posted on by tiger40490

SG gov is not Buddhist in nature (successE and successZ). This PAP gov is keen to maintain a world class standard of living .. FOLB. High burn rate.

Subconsciously, I try to follow a few “habits”[1] from the SG government in terms of long-term financial planning. Here is a list of those habits.

  • high savings rate — during each term the government squirrels away some amount for rainy days or long-term investment. I do the same. Across developed countries, many families have insufficient savings rate… 20% is rare, even among some ethnic Chinese families.
  • .. (the other side of the same coin) “spend within your means” — 量入而出. In my burn rate criteria of “80% of LMHI [local median household income]“, I leave 20% buffer.. for savings/investment. This is somewhat comparable to the “squirrel away”. Other national governments do not have this discipline. They often spend more than their revenue … unsustainable.
  • .. U.S. has poorer public healthcare, social support for the needy or elderly (see prevalence@poverty: SG ilt U.S.)
  • high contingency reserve aka “rainy day reserve” … see seprate section below.
  • high current income from investment — SG gov investment income from past-reserve contributes S$17b (3.3% of GDP) to the national budget, a big red packet
  • low debt-burden — I hate interest cost as part of my monthly burn rate. SG government borrows only for investment that generates higher return than the interest cost. See public debt: SG^US
  • ^^ The above are the top 3 factors of the cashflow high ground
  • diversify across sectors — Admittedly, I’m over-concentrated in properties esp. in Asia. I did try growing mutual fund allocation, but disappointed.
    • I feel my peers tend to focus on single-country residential property or U.S. stocks.
    • Given our small balance sheet, none of us is well-diversified.
  • unique abilities to generate income via gov-linked firms that have to stay lean and competitive. Similarly I have a unique dev-till-70 plan, based on wellness.
  • low tax compared to all other rich countries, to reduce the burden on the current generation. I manage my family burn rate similarly.
  • stay relevant to the new global cash-cow sectors — reinvent itself

[1] I won’t say “strategies” or “principles”

In this blogpost, I will focus on my strengths relative to my peers.

— The covid19 budgets — decisive deployment of rainy day reserves. I could consider spending my annual leaves to support my kids’ studies and grandparents.

https://www.straitstimes.com/singapore/politics/budget-2022-6b-draw-on-past-reserves-to-pay-for-covid-19-public-health-expenditure revealed —

In FY2020, the Government had said it would draw up to $52 billion to pay for measures but it now expects to use $31.9 billion for that financial year. In FY2021, the Government had planned to draw $11 billion to pay for the Covid-19 Resilience Package, but now expects to draw just $5 billion for that financial year. Reasons include

  • stronger-than-expected rebound.. loan loss provisions were not used
  • reduced expenditure of $10 billion earmarked for the Covid-19 Resilience Package
  • ministries not needing to spend as much because of projects being delayed by Covid-19
  • extra revenue from one-off revenue upsides, including from vehicle quota premiums and stamp duties

[21]to sis:G3specific goals@invest`more

Posted on by tiger40490

See also best Spends@100k windfall but I want to maintain two distinct blogposts.

Hi my dear sister,

Re your “vague” question of what exactly I want to achieve with my investment effort, I have a longer answer now, hopefully not so vague 😉

Indeed I still spend several weeks each quarter on investment research/review/decisions. I adjust my views (more often than my portfolio) rather actively.

In [[irrational exuberance]]  Shiller imagined holders of stocks growing into paper millionaires. One of them out there will feel the itch to cash out and improve current living standard. If I were one of them , how do I want to “live more like a millionaire“?

Even though I feel almost “job done” (i.e. I can retire to a thrifty retirement), there’s still some cash flow anxiety beneath the surface.

1) First goal I want to achieve with my investment is relief from that anxiety. Comparatively, I’m on a very comfortable cash flow “high ground”, so my anxiety is less than other people’s.

I will say there’s a risk that we could fall sick, suffer an investment loss or take other strategic missteps. Investment incomes (hopefully diversified and without a 10-year wait) provide the cushion I need.

I can see the ERE author doesn’t have this goal in https://www.getrichslowly.org/early-retirement-extreme/

See precarious pillar/levee/shield #MLP

1b) a related (vague) goal .. reduce my dependency on the WSC harbor as the base_camp for my family livelihood. Best achieved with higher NNIA.

2) The Second (specific) goal I want to achieve with my investment is relief from long commutes, which is a common pain in NY/NJ area. Most people seem to put up with long commutes but I hate it. With more investment income, I can afford to live closer to office, or take lower-paying jobs closer to home.

This goal is so close to heart that it popped out  as soon as I wrote down your question.  After a while, I found a more important, less realistic goal about work stress (work-life balance). I would want to find an easy job (less lucrative) with plenty of free time, where I am free to put in 50% of effort to do a good enough job, without risk of PIP.  I said “unrealistic” because my current level of wealth is insufficient to support it. At a more realistic level, I do feel less pressure to earn more, since 2019 in my chats with GregR. See also my blogpost on all_the_way despite low pay

3) another specific goal .. to support my stay-home wife, so that she can nurture the kids till high school. Many well-off families have a stay-home mother.

9) A distant goal I want to achieve with my investment is extra reserve to support optional big ticket items such as college. I don’t need an even bigger home, but my wife has persuaded me to consider a bigger home. Vacations are unnecessary to my simple life, but my wife would appreciate them.

Fundamentally, by age 40 I had completed all my big-ticket goals — 1) home ownership 2) retirement 3) medical contingency reserve 4) an optional, reasonable amount set aside to help pay college (discussed shortly)

When I look around at my age group, where is the Biggest difference in cash flow pressure, the difference between high ground vs low ground? Luxury branded education. As I said, most of my peers (Chinese professionals in finance or technology) set a target to save more than a million dollars for top school-district housing and top colleges. These are luxury items, not suitable for lower-middle class like me, with only a single income and two kids. To them I say NoThanks.

Now, Many of them consider the school-district home purchase (USD 700k+) an investment, but the monthly cost is heavy, including mortgage, pTax and maintenance, adding up to 4k to 6k every month. When I first considered this burden, this monthly commitment, I had to literally take a deep breath.

Why do I keep talking and thinking about my peers making their decisions? Because they represent a huge peer pressure on me and my wife. The “NoThanks” is easy to say once or twice, but consistency requires mellowness. I have to work hard to keep saying NoThanks. Paradoxically, this NoThanks is a major underlying motivation behind my investment effort.

Overall, I’m comfortable in terms of cash-flow, but in terms of income, we are really lower-middle class . No shame no regret.

— In Sep 2021 AshS asked me a similar question “Your growing net asset is just a number on a screen that you check every year. Why is that number important to you?”

  • I named nonwork income, esp. after retirement. I allocate most of my spare money into income-generators
  • I said that at the moment I wasn’t worried about having too much money to spend in later life. I think it reflects an underlying insecurity in livelihood[3], perhaps not about (anticipated) job loss but about non-financial disasters that financial resource would be needed just to reduce the impact. 100% complete protection is usually unattainable.
  • .. How about legacy for my offspring? I told AshS “not my plan” but any leftovers I can surely leave to them.

[3] Even the best managed companies and countries , with the widest moat, have the same insecurity.

— compare to younger peers like Kun.h
My friend K.Hu’s 2020 email is quite in-depth. Similar to my first goal, I can see that he still works hard for long-term family livelihood. ( I guess AshS is more carefree, due to the bachelor’s life. )

Compared to them, I’m older and more mellow, less ambitious in terms of Brbr, FOLB/exclub, career growth… Instead, wellness, lifestyle adjustment, healthcare, choice of home country, retirement planning …. are more important as I grow older. Therefore, livelihood is a slightly smaller driver.

FOLB/exclub/kiasu … At my age, I have less to prove, less to aim for in terms of moving higher…

Cashflow is a factor (sometimes a major factor) in each “dimension” above. However, cashflow should not dominate every dimension.

##[22]realistic Macro economic risks2threaten ffree

Posted on by tiger40490

This analysis takes effort. Here’s a modest start. I think without in-depth and comprehensive analysis, my bare-bones ffree is built on shaky ground and naive. My passive income and low burn rate is not a boundless umbrella capable of keeping out all /hazards/ —

  • asset country risk — what if Cambodia or Philippines gets into trouble and property market collapses? Capital control?
  • local market risk — (SnD) say BGC market, or BKK1 shop units
  • credit risk —
    • My rental income is “guaranteed” by developers. If rental market sinks and a developer fails, then my unit is still in usable condition, but I would lose the bulk of my rental income and need to earn the same amount (a few thousand only:) as salary.
      • Therefore, it pays to reduce over-concentration on one developer.
  • Currency risks — suppose I’m retired in Singapore, and PHP or USD weakens. Luckily, my SGD rental income is in SGD.
  • inflation risk — Singapore is hopefully well-managed. Lucky my overseas/local rental incomes rise with inflation
  • other SG country risk — what if the economy declines? What if rental demand declines? I feel U.S. rental demand is more robust than in SG.

Luckily in addition to the (SG/SEA) rental incomes I have diversification of incomes in the form of stock dividends.

See also the ffree derailers. In contrast, today’s blogpost is macro-level.

— Macro risks often affect thousands or even millions of people. I would not feel so bad. With BGC, FX risk affects tends of thousand of investors. With khm, country risk affects thousands of investors

With my Brazil HY/PE, credit risk not macro risk was the problem, affecting dozens of investors.

— another factor: For my bare-bones ffree set-up, One of the biggest uncertainties is predictability of (in/out) cash-flow.

Every investment has uncertainties aka risks. Experienced investors often categorize dozens of known risks into a handful of categories. The grouping is mostly conceptual and arbitrary.

As Wallace Xu said, rental prop mgmt probably needs the owner to stay local and learn the legwork. This should reduce (not eliminate) the cashflow risk.

Q: Singapore government did a scenario planning exercise. Shall I do the same?

On the other hand, there is a common “non-believer” tendency to cast doubt over any long-horizon cash-flow analysis. Even after we compile and analyze all the “hazards”, the non-believers still say that there are big “unknown hazards”. Some people even worry about the credit risk in insurance policies.

Well, I did live without a salary for 3 years.

There’s reason to believe that compared to other governments, Singapore government will continue to be more caring, more attentive, more resourceful, more frugal.

##[19]ffree derailers rated #resilience

Posted on by tiger40490

See also

To have any chance of lasting value, this blogpost need a _scope_ and must not become /indiscriminate/. In this personal finance blog, I won’t say too much about livelihood risks. Now let us shift our focus to ffree derailers.

This bpost is at least “w1r10”.

— intro .. Insurance and emigration companies put out subtle marketing messages portraying their “products” as the main protections in a person’s life, but that’s 喧宾夺主

  • 1) health and 2) cash flow are the twin primary livelihood risks in our lives.
  • Family stability (and harmony) .. is the third risk factor, a distant third in some traditional families, perhaps decades ago.
  • PIP, (kids’) grades … are two big derailers in some lives.

In contrast, some of the adversities listed below are outlier (black swan or missteps?) events i.e. highly unlikely. They are nevertheless worth knowing. If you don’t pay attention, they are more likely to hit you.

— ffree derailers .. All of these adversities demand financial resources and can drain my reserve. In some of them, a single misjudgment/misstep on my part could threaten to weaken or break a pillar beneath my lifelong foundation..

  • [v = too vague.. Can be more specific]
  • [3 := Pr(hit in my lifetime) ≈ 10^-3 =0.001 (three leading zeros). This numerical estimate depends critically on the qualifying criteria. Many criteria below are vague 🙁 and does not deserve this numerical estimate]
  • [0 := Pr(hit in my lifetime) >> 10%]
  • [$ or $$ = level of livelihood/financial impact. Within a given item like injury, there are many levels of financial impact. Here we try to give a (highly imprecise) estimate of the upper limit. No $$$ please]
  • [F = the later we hit the derailer, the Fwd Hazard Rate improves i.e. less impact ]
  • — half ranked by severity, and logically grouped .. Heaviest derailers sinking down (No precise composite sort key please.)
  • [5 $] natural disaster hitting my properties esp. BGC [criteria: $100k cost]
  • [5 $$v]Misstep: juvenile delinquency… before age 18 [criteria: criminal record]
  • [3 $$] Misstep: criminal offense …… often due to 一念之差 (misstep) [eg trespass, Genn’s fraud?] [aa]
  • ..[F] The later it hits in my career, the less financial impact it would have on my remaining career 🙂
  • ..[4 $$] Misstep: Immigration offense -> GC implication? I think you won’t get a chance to explain or appeal. Luckily I can always work in Singapore. This can only happen when you are in U.S. before receiving GC. Staying in SG, you reduce Pr(hit).
  • [3F $] minor misstep: personal trading breaches contributing to job instability .. In the grand scheme of things, this disaster is much smaller than criminal offense or immigration offense
  • [1F $$] minor swan:/oversized/ loss …. (100k) on property investments. I have already hit 10k losses.
  • —- accidents + illness, where medBx is crucial
  • [3 $] misstep: driving mistake injuring SomeoneElse….. need liability insurance [criteria: financial liability. A much lower (severity) criteria than above]
  • [2 $$] misstep or swan: injury (partly) due to driving mistake ….. [criteria: hospitalization within my family, in my lifetime]
  • .. Can I minimize driving? I guess I need heavy practice to improve, before I reduce driving !
  • [3v] minor swan: kids’ injury …….. before age 18 [criteria? how serious? Let’s be vague]
  • [1] misstep/swan: bike accidents …. or personal accidents. [criteria? hospitalization within my family, in my lifetime] Handicap is rare but more likely at an older age.
  • [3 $$v] swan: major medical …….. what if a family member needs a lot of acute medical help but not hospitalized and not due to aging? Very vague:( [criteria: 200k out of pocket]
  • [0 v]  swan: minor medical ……. kids’ health, wife’s health, my health.. [criteria? out-of-pocket 20->40-50k cumulative cost for a given condition, in my lifetime] These minor health issues are multiple times more likely than accidents of equivalent severity.
  • ^^^^^
  • [0 $] issue like sis’s where father had to put in all his savings for rescue 
  • [2 $] Misstep: drug addiction …….. [criteria? need professional including medical intervention by age 30 ]. More widespread than juvenile delinquency or minor medical!
  • [F $$$] disastrous Misstep: divorce …. high probability + huge impact. The later it hits in my life, the less financial impact.
  • [0F] salary instability …………. remains the #1 derailer, even though (paradoxically)  ffree is defined for zero dependency on salary. [Criteria: drop by half and half again before 70.]
    • age discrimination, churn/evolution
    • PIP? Usually doesn’t lead to salary instability if you are in-demand.

[aa] For the minor offenses, hopefully I get a chance to defend myself in front of employers, but sometimes the background check could immediately get you  disqualified without a chance to explain. Sounds scary, but Pr(hit) is below 10^-5.

The big list demonstrates that the most likely missteps/swans are less severe whereas the most severe missteps/swans are rare. 

There are other /uninsurable/ disasters to derail my ffree “dream”. How much more money would you need for those? 10M? Forget it! Below are some of my practical “defenses”. “Resilience” is my favorite word here rather than “protection” which sounds more lazy, passive and more reliant on external protection.

There is some overlap with random list@protections and other lists, but the below list is focused on resilience against disasters, and more about cashflow.

  • #1 resilience strategy — career longevity=Bedrock@ %%fledgling ffree
    • Better keep learning and keep applying your skills. If you retire for a while then forced by a disaster to /unretire/ (i.e. come out of retirement and rejoin the workforce), you will hit an uphill worse than the uphill facing those loyal employees
  • resilience strategy — invest in the “Singapore_hedge” to hedge the risks of rejection_by_US_job_market
  • resilience strategy — buy time, slow down and blunt the impact of the disaster. Some situations would improve gradually as my family adjusts to the situation
  • resilience strategy — bx? continue to spend some time on review
  • resilience strategy — diversify “productive” investments generating regular income + increase contingency reserve
  • resilience strategy — identify retirement destinations with reliable, low-cost health care such as MYS

exp-recon s/sheet: goals,priorities

Posted on by tiger40490

 

Tcost (and mental energy required) is formidable, but long-term Value is also very high , as explained in long-term roti@burn-rate trac . Therefore, I hope to reduce the tcost while maintaining the “value” —

  • Leave the unexplained amount as “PersonalExp”. In contrast, “ATM}” amount can be easily computed from 104 account. Note these two amounts overlap to some extent but are not identical.
  • .. sugg: move the non-electronic spending items to a category “PersonalExp”
  • — tcost tips:
  • sugg: incremental update, to spread out the tcost
  • Sugg: earmark 2 focus hours to reach Completion. Then 2 more hours of optional fine tuning can be put off to a less busy time.
  • — generic tips for Excel
  • Tip: ctrl-backtick to toggle between show-formula vs show-result
  • tip: categorization: use grouping tables + background color + text effect
  • — generic tips for online banking
  • DBS + MB ccard balance — look at available balance without OTP

In terms of approximation, I guess the two big areas are personalExp (see above) and NTUC card-spend. Luckily NTUC sums are easy to track electronically. Therefore, we have a promising solution !

  1. — disambiguation
  2. exp-tracking … is the overall goal and objective. There are many practical methods to achieve it.
  3. exp-recon .. is the method and monthly process. I devised it by trial-n-error.

— estimates .. For all the estimates [including total banknote spend], the goal should ideally be a verifiable number. Otherwise, it’s a phantom target.

For example, there’s a MaybankCCardSupermarket sum. This is a best-effort approximation of a verifiable amount (I just don’t have time to verify.) If between EOD 30/1 to EOD 22/2 this sum is $999, then it means “All supermarket transaction between 31/1 and 22/2, charged to the Maybank ccard should add up to $999”

— snapshot frequency/interval
— paper banknote spend
— annotation on a cell
* excel comment .. highly visible:) but legwork:( + often covers up another cell 🙁
* theCellBelow as a comment box … plenty of space:) but takes up real estate 🙁
* #trailing comment .. but too long sometimes 🙁
— the recon(reconciliation) cycle

  1. compute curBal – prevBal + incoming === outgoing.
  2. classify outgoing items into
    • transfers to family members
    • investments… read the important blogpost on exclusion/inclusion criteria
    • bx
    • tax-like outlays. There’s a separate blogpost
    • otherOutlays

After that step, goal is a good-enough understanding of the otherOutlays. Here comes the recon, which often reveals that there’s $462 unexplained amount, whereas the typical unexplained/month is below $100. That’s a great opportunity to to dig deeper and identify mistake in the calc of curBalance, prevBalance or incoming. These mistakes are not uncommon. See basic principle.

The recon is as valuable as the math self-check I taught my son. Recon is more valuable than retracing the steps.

==== priorities: Given my limited t-budget, the priorities of this s/sheet are
* YY1) short-term iquid_NAV snapshot
* YY2) long-term couple NAV tracking .. not easy. Basically, the exp recon /system/ is not designed for this trendline.
* XX) burn rate recon/verification, categorization, (short-term)trending, (long-term)projection

LG2: these secondary priorities below can be computed relatively easily on the s/sheet.

  • monthly savings amount [3]
  • cumulative transfers
  • cumulative investment
  • cumulative incomes
  • non-essential outlays each month
  • short-term trend in liquid_NAV? Complicated by transfers to CPF/SRS and with eqMufu etc. During the years without these complications, the trendline would make a nice graph.

Q: focusing on YY, why is aggregate asset snapshot such a high priority? I want to spell out this “statement of principle” to share with others.
A: Fundamental principle of “absolute” burn rate accounting — start from /realized/ incomes (much easier to track) +  total asset snapshots (basically YY). From there, work out aggregate realized outgoing amount, then Explain the outgoing using high-level, recurring categories of expenses.

YY doesn’t require complicated system. /Transparency/ and simplicity can greatly enhance accuracy and reliability and are extremely valuable.

— [3] Tracking monthly savings amount .. a G10 priority. U.S. (and Sgp) pff advice is “Strive to Uphold monthly savings goals” but I don’t need such self-discipline.

The increment between successive liquid_NAV snapshots is a /nominal/ savings amount. It excludes II (monthly investment amounts). Even if I add the II, the savings amount is still highly inaccurate. In fact, tracking the actual savings amount has proved to be t-expensive and /unrewarding/ legwork with poor leverage. In contrast, exp recon decent leverage despite high tcost.

[18]ffree=state@mind #peers diff

Posted on by tiger40490

See also ffree ^ envy+FOMO

6 levels of ffree is one of the first articles describing the liberating self-knowledge that “I can retire now if I want to”. Financial independence is based on easy elementary math — Without salary from work, match up your family burn rate against your Savings + Income.

This elementary math has to be a projection over a long horizon, but over long term there are many uncertainties. We tend to overestimate our predictive power on medical, inflation, property depreciation … We tend to underestimate the amount of uncertainty/volatility,  black/white swans. See also NAV 一辈子花不完@@ 4 factors. Therefore, for me financial independence is really a state of mind. I often feel peaceful and reassured by mathematical projections based on

  • income — rental incomes + rental spread + CPF-life .. but beware of attachment
  • income — shields
  • expenses — burn rate … due to detachment
  • asset appreciations — Beijing, Cambodia, BGC, SG .. but beware of attachment

Actually for me, “financial independence” has a modified math definition — “without the pressure to work, match up … .” Due to the modification, my peace of mind has another pillar

  • I’m capable of, and will enjoy, working till my 70’s

Q: Am I too attached?

Yes to my property assets
yes to my health, which will eventually diminish
yes to my robust career prospect, which will eventually diminish

— Q: Strip away the exaggerations, the superficial, the unfounded, what are the measurable, rock solid, real differences between me and my cohort in terms of ffree ?

  • I record/reconcile my burn rate over decades, and have higher confidence in my forecast.
  • I have a reliable nonwork income in cpfLife and HDB rental, not counting other rental properties.
  • I often feel free to (and actually did) choose lower jobs. I don’t think many in my cohort feel that same level of freedom.
  • Based on straightforward calculations and SG public data, I have no worries about medical, retirement income, long-term inflation. I think many of my cohort are not so care-free. These are big components of long-term ffree.
  • — Here are some subjective assessments:
  • I have no plan to save up USD 300k/child for college
  • I say and feel I can stop working any time .. Statement 1
  • I say both parents can stop working indefinitely and my family can live a reasonable, comfortable life .. Statement 2.
  • I sometimes say that I have more money than I need for my lifetime .. Statement 3.
  • ^^^ My circle of a few dozen friends never say these things. Am I serious? Yes. I didn’t say what kind of family lifestyle that Statement 2/3 entail.

 

(necessity)big-tickets pre55 #boy20.5@2029

Posted on by tiger40490

Before 55, I can housing refund 150k to cpfOA. This amount will lose liquidity.

Q: … but if there’s nothing to require the $150k, then who cares? This blogpost is mostly about the necessity outlays, rather than discretionary items, that I may need before 55.

Note Any time after 55, I can withdraw everything else after committing BRS to RA.

Note on my 55th birthday in 2029, boy is aged 20.5.

Conclusion — to gain 2.5% interest I give up a few year’s liquidity. Not worth it.

— big-ticket: SG home upgrade. Can use OA not SA.
For the proposed OA->SA top up, This big-ticket is perhaps the only big-ticket.

— big-ticket: stocks or gold? Not necessity nor big-ticket items but yes I might want to invest and build up sizeable amounts.
— big-ticket: Medical cost? I think am taken care of in SG (see the blogpost on Cushions), and will be taken care of in the U.S.
— big-ticket: college funding? Discretionary item, as I don’t want to take it on as my job, _b_u_t_ the more spare cash I have, the more flexibility. More importantly, this expense happens mostly after I turn 55. At 55, my son is only 20.5

— big-ticket: U.S. property investment? Discretionary item _b_u_t_without it my rental cost is quite heavy.
So far, I have preferred Asia properties.

When I move to the U.S. I probably want to invest in properties using USD, not SGD.

 

bank::Maybank KHM #ATM

Posted on by tiger40490
  • 👎I find the compliance very strict, and also lots of small fees …
  • 🙂 chat is 27/4 including holidays
  • BKK1 branch Sok Ly’s  Contact +855 23 210 448. Namy is nice +855 77777 457 on Whatsapp.
  • Acct 15-digit
  • Passport: E3980003K as of Feb 2025
  • Mobile number used: 81120014. To update it, need to visit branch. Otherwise, can try sending email. Better keep it until I give up on U.S.
  • webank password update requires passport, acct details and smsOtp!
  • Account was opened 26 Dec 2016.

USD TD pre-mature uplift: zero interest, but “You will not lose any principal here in maybank Cambodia, Mr. Tan.”

— TT transfer to any bank for $17 if under $4k.
👎 Receiving wire transfer from overseas has a 0.10% charge. I was changed USD 85 on 5 Aug 2021 (boy turning teenager) ! I think other banks may have similar charges but why my recipients never tell me?
* perhaps those recipients are preferential banking clients
* perhaps those recipients don’t have a valid reason to transfer this cost to investors.  It could be a small cost of doing business just like courier cost.

— online banking:
SMS 81120014/90013516 needed only for fund transfer and password change (also initial registration). Token not applicable.
— withdrawal:
I felt there’s no need to do outgoing TT, because we can always withdraw USD and carry (like 20k) through airport custom.
— overseas debit card usage:

  • wrong PIN 3 times -> locked -> I was able to chat/call the 24/7 hotline to unlock it.
  • overseas Maybank (only) ATM usage is free, but such usage is enabled for 12M only. Chat/call to enable again.
  • 👎 If misplaced, then must fly in to replace.

— charges and fees

  • 👎debit card has $8/year fee. Can’t cancel by phone. Can’t waive.
  • 👎dormant account has additional $10/year

— 🙁 Dormant: 6M inactivity makes the account dormant i.e. blocked and unusable. (Maybank staff is supposed to call me but I’m not so confident.) Not possible to reactivate the account remotely, so I must fly in again. When I’m out of Cambodia, there are 4 ways to prevent the account becoming blocked i.e. dormant:

  1. use debit card to make a quarterly withdrawal
  2. online fund transfer to a friend’s account
  3. last resort — TT inward transfer into the account.