Saturday, 23 March 2019

An Ode to Life

Morning folks. How's life treating you?

Life is weird isn't it. We're here for a short time with no discernible purpose and many of us spend most of our time in a state of unease, anxiety and unhappiness.

Why is our species prone to such negativity and has it always been this way?

Who knows eh?

Evolutionary Biologists like Richard Dawkins tell us Homo-Sapiens have been roaming the Earth for around 100,000 years.

Seems like a long time right?

Well, the figure pales into insignificance when we we consider how other forms of human walked the deserts and savannas millions of years before.

Dawkins asks us to think about a piano keyboard's length representing human existence. If we consider where Homo-Sapiens sit on this keyboard, we'd have to go all the way to the right and a small sliver of the very last key.

It's a humbling thought, isn't it?

Us, humans, existing for such a short time, historically speaking, and yet here we are rulers of the Earth and masters of the food chain!

Here we are unraveling the human genome and experimenting with DMT to edge ever closer to revealing the meaning of existence!

My goodness, we've come a long way as a species since we start our journey. It's a cool thought, isn't it?

I want you to imagine Dawkin's keyboard again if you will, and this time focus on the amount of space between humans first appearing on the scene and then us Homo-Sapiens taking over. Imagine the amount of time. Imagine how long a century takes to pass and then think of time in terms of millennia. Add to that millions of years and your head begins to fizz.

What the hell were we doing for all that time?

As the vast majority of this period is what's known as 'pre-history' meaning it's before writing and art, we'll simply never know how us humans whiled away our days. What can infer though is that we hunted and gathered and moved around. We would have been fit and healthy. Our diets would have consisted mainly of nuts, fruits, berries and plants with the occasional bit of meat.  We would have been focused on the here and now and cared little about the future.

With this heightened momentary awareness, I wonder if ancient man was happier than today's man.

Today's man with his property and portfolio. Today' man with his self-development and exercise regimes. Today's man with his cars and gadgets. All of these come at a cost, not only financially but also socially. Today's man must exchange his finite time in exchange for money which he uses to buy products and services that promise to make him happier and more fulfilled.

The question is do these products and services do the business? Do they make us live happier lives?

I think the jury is out of this one, folks.

Pre-historic man would have had lots more free time to sit around breathing in fresh air and admiring the view. If we forget about the small matter of defending his family from the ravages of wild animals, his life seems pretty sweet: Get up a dawn, amble into the forest, collect some berries for breakfast and then hang out with the family.

Today's man, in contrast, wakes up worrying about his unfinished project, fights his way through rush hour traffic, arrives at the office to face people he doesn't like, works like a mad man for 10 hours and returns home shattered while the evening invades the avenue (cheers JJ).

I hope you'll excuse my crass oversimplifications, but for the sake of my blog post I hope you'll look the other way.

So, do I have a point after all this rambling? Do I have a golden nugget of wisdom to leave you with so you can continue your day enriched and energized? Probably not.

However... I want us all ponder upon how incredibly lucky we all are to be alive. Think about the odds of being alive in the first place, think about the statistical probability of being born on planet Earth. Think about all the living species of animals and here we are as conscious beings philosophizing about metaphysics! It's crazy, isn't it?

Once we learn to appreciate how incredibly unlikely a conscious existence is then we can enjoy life more. Minor irritations will simply melt away when we look to the sky, breathe deeply and meditate on the chances of being here in the first place.

So, folks, at some point today, I want you all to do just that. Walk outside to a quiet place and think about how amazing, unusual and short life is. Spend time with those you love and tell them they are special. We are all special. We are all freaks of existence, so let's enjoy ourselves while we can and make the world a more positive and fun place to be.


Saturday, 16 March 2019

The Crash is Coming | What should you do?

The fog and the monster are on the way

There's been so much chat about the forthcoming financial meltdown it made me think of the fog and the sea monster in Ray Bradbury's The Fog Horn'.

Out there in the cold water, far from land, we waited every night for the coming of the fog, and it came, and we oiled the brass machinery and lit the fog light up in the stone tower. Feeling like two birds in the grey sky, McDunn and I sent the light touching out, red, then white, then red again, to eye the lonely ships. And if they did not see our light, then there was always our Voice, the great deep cry of our Fog Horn shuddering through the rags of mist to startle the gulls away like decks of scattered cards and make the waves turn high and foam. 

So what do you all think? Is the financial future as bleak for us all as it is for McDunn and his compadre, or is there simply too much paranoia self-replicating and reinforcing itself via social media algorithms?

Who the heck knows eh?

Ray Dalio, thought the next big crash was imminent here:

But recently, he has revised his prediction, lowering his odds of a US recession before the 2020 US presidential election to 35%:

Ray Dalio is a man who knows his stuff. You don't search too far on Youtube before you come across his historical analysis of the global economy. I like the man. His talks straight and despite his intellectual prowess, breaks down complex economics ideas for stupid people just like me.

We needs more public intellectuals like Dalio, ones who cut through the waffle and make investing and economics more accessible from people without a Masters degree in the field.

One thing is for sure, the US is ten years into a bull market that simply won't go on for much longer. Thus, it's just a matter of 'when' not 'if' the crash will come.

So, folks, we better get ourselves strapped in for a bumpy ride. The fog and the monster are on their way.

'Out there in the cold water, far from land, we waited every night for the coming of the fog, and it came.'

What does all this mean? Should we freak out, sell all our stocks, stock pile canned food and barricade ourselves in a safe room until the fog clears?

As a divided investor, I say no.

As divided investors, we have to put things into perspective. Yes, the fog is coming, we know this. But, most probably, when it comes, the majority of our defensive blue chips/REITs will continue to distribute their dividend harvests regardless.

So, instead of getting all ghoulish and twitchy, us divided investors should instead see the forthcoming fog and the monster as a natural byproduct of the evolution of the market. It's a bad flu that's long over due and one that will clear the system of unwanted and unneeded bacteria. Once banished, the financial system will be stronger and better for it.

Thus, you dividend investors out there should not be loosing your hair when you see the slow death march of the fog on the horizon... no no.

We have to belt up, hold on tight, be emotionally strong and repeat like a mantra...

'Everything is fine. I will not sell. This is normal. Let's scoop up come bargains.'

'Everything is fine. I will not sell. This is normal. Let's scoop up come bargains.'

Say is with me guys...

'Everything is fine. I will not sell. This is normal. Let's scoop up come bargains.'

'Everything is fine. I will not sell. This is normal. Let's scoop up come bargains.'

Breath deeply in between each sentence. Luxuriate in the moment. Everything is going to be just grand in the long run.

In Ray Bradbury's story, the fog and monster do indeed some and destroy in the lighthouse McDunn and his coworker live in. Their world is decimated. So, too, will the markets be in the not too distant future. However, in times like this we must let history be our teacher; we must let rationality rule over impulse; fear must not be let lose to run amok and people must think with clear precision.

The monster is on the way.

'We waited a moment. And then I began to hear it. First a great vacuumed sucking of air, and then the lament, the bewilderment, the loneliness of the great monster, folded over upon us, above us, so that the sickening reek of its body filled the air, a stone's thickness away from our cellar. The monster gasped and cried. The tower was gone. The light was gone. The thing that had called it across a million years was gone. And the monster was opening its mouth and sending out great sounds.'  

But both the fog and the beast will leave as quickly as they come. OK, we'll need to rebuild somewhat, just like the lighthouse needed to be rebuilt in the story. But, have not fear people, we will rise again.

'There was nothing to see. The ocean was calm, the sky blue. The only thing was a great algaic stink from the green matter that covered the fallen tower stones and the shore rocks. Flies buzzed about. The ocean washed empty on the shore.'

And, perhaps, we, too, can be a little more careful building our portfolios next time we're nearing the end of a bull market. Maybe we, too, like McDunn become a little more defensive in nature.

'The next year they built a new lighthouse, but by that time I had a job in the little town and a wife and a good small warm house that glowed yellow on autumn nights, the doors locked, the chimney puffing smoke. As for McDunn. he was master of the new lighthouse, built to his own specifications, out of steel-reinforced concrete. "Just in case," he said.'

So, there we have it folks. This is the end of another ramble. I hope you enjoyed it as much as I enjoyed typing it. For, as I've said before, writing this posted on Sunday mornings is a form of therapy for me. Up at dawn, with the multicolored sky outside and the sound of morning birds going about their business, I sip coffee and think. It's a reflective way to start the day. Now, with the post complete, I can march into the unknown with the confidence of an artist, knowing that I have contributed something of worth before breakfast.

Thursday, 14 March 2019

Retiring Before 40 | A Corporate Matter

'Catch on fire and people will come for miles to see you burn' (John Wesley)

I want you to visualize the day your retire from your corporate career.

You work in a flashy office block, a place in which for decades of your life you laughed at the right jokes, held doors open for the right people and offered yourself up for sacrifice for the good of the company. 

Well, today is your retirement day and you will make the ultimate sacrifice.

Your boss has invited you to a 'Retire before 40.' ceremony, You've never heard about it and it's no where to be found in the company' personnel manual.

When the boss spoke these words on the phone, he sounded uncomfortable and odd.

Regardless, like a good corporate drone, you obey your bosses command and arrive at the agreed time. Your whole department are sitting behind their desks wearing black masks with small slits for eyes. Their mouths and noses lay hidden behind the dark cloth. They are typing, click clicking away, heads still and staring at their glaring screens.

I can see it now, you in your black suit, shoes reflecting the goodness of the day, traipsing, limply, towards the company's dark alter, a wooden pyre, set up the corner of the office. 

You feel irresistibly drawn to it as if by an invisible force.

Draped across your body, a decorative sash adorned with frivolous motivational quotes flaps noiselessly as you pass though a cold blast of air conditioning. 

'Don't stop when you are tired. Stop when you are done!'

'Expect problems and eat them for breakfast!'

Your boss used to make you stand up and chant these during 'Motivational Sessions' every week.

As you make your way down the thin blue carpet, you notice standing on either side of the sacrificial pyre Steve and Nick. 

These are the two bastards you hate the most. 

Steve has been stealing your clients for years and somehow getting away with it; while Nick tried it on with your wife in the reception area of the Candlenut during the department's 'Business with Pleasure' evening. And here they both are now banging ornate wooden drums as you approach. 

They leer disgustingly at you, their eyes flashing and ghastly. Boom, boom, boom goes their rhythm, and a deep death wheeze ushers from their dry lips as they exhale in unison. 

'Can this really be the end of my corporate life? Am I really going to lie down on the alter and strike the match?'

You reach the pyre, eardrums popping, head pounding. It towers over you menacing and imperious. You look up and at the edifice, and, tied securely, is a life-sized portrait photo of you the day you started with the company.

Innocent eyes, watery, like those of a child, peer down. A smile as wide as an Amazon confluence stretches each side of your mouth to snapping point. 

You remember the day this picture was taken. 

Your first day in the corporate battlefield, and you glowed with pride.

Fresh out of university and into the 'Real World' as your father called it.

'Work separates the men from the boys son. Get in there. Show them what you are made of and remember... always please your boss!'

Your father spoke these very words, his glasses balancing on the tip of his pink, veiny snout. He uttered them with such sincerity as if announcing some maxim that would change the course of history.

That was then and this is now. 

The drums continue their monotony and sky turns scarlet and blue outside the window. 

The air reeks of gasoline.

It is time. 

You take one last glance up at the picture of your former self, sit down on some dry kindling in between Steve and Nick and flick a match high into the air.  It seems to take an eternity to come back down, but when it lands, you are engulfed in a inferno of corporate hell fire.

This is the end of your corporate self. 

Now you may begin afresh. 

The time for living has come.

Sunday, 10 March 2019

5 Things to do NOW to Retire By 40

Retired by 40... Wouldn't it be nice?

This is a question that's been on my mind for the last decade.

Since 2009, I've been working like madman to try and make this dream become a reality.

As I've discussed at length in past posts, I arrived late on the investing scene and only began to show interest in the stock market in 2015.

Read about my story here and here and here and here and here

Since then I've injected almost a million Singaporean dollars into a dividend paying portfolio, which payed me just under $40,000 in 2018.

Read about this here and here.

Also, I've built a 5 story building (office space and 10 apartments) and bought three houses. My property portfolio generates a decent amount of passive income per month as well.

Presently, I pay a mortgage on the 5 story building and one of the houses, and my plan for 2019 is to wipe out a proportion of this.

Combined, my passive income is hefty chunk per year, but how did I do this?

You need time for one thing.

If you are doing business and making money, ten years should be almost enough to reach the retirement finishing line. Of course, this depends on your situation, but it should apply in most cases.

Once you have cash, invest aggressively in both the stock market and property and let the power of compounding take over.

Anyway, without waffling on for too much longer here are my 5 things to do NOW to retire by 40:

1. Earn and save like a demon

You need to save a large chuck of your wages if you are an employee and the same goes if you own our own business.

I recommend the latter of these if you want to retire by 40.

Owning your own business gives you the potential to earn a ton more cash which you can use to generate passive income.

This is what I did and it has worked out nicely.

That said, you need to be super focused and sacrifice many things.

Being your own boss requires you to be disciplined and fearless.

If you can, the financial rewards will come.

So, start generating income streams as young as possible and save, save, save.

2. Determine the purpose of your passive income

Set yourself goals for what your passive income is going to pay for in a given month.

Perhaps you start out by setting the goal that your passive income will be enough to cover your food bills for each month. Then, once you have accomplished this, it could be your car expenditure.

Build things up brick by brick and before you know it, you'll be on the way to retiring by 40.

I set myself the goal of paying for the mortgage of my 5 story building with passive income.

I have now achieved this.

3. Be accountable

Make sure you save X amount of money and then invest it in Y. Be clear with what you want to achieve.

I write down my goals and stick them on my fridge.

This reminds me every morning of what needs to be done.

Visual reminders are powerful ways to motivate.

Every time my stock portfolio generates $5,000 in passive income I reinvest.

4. Don't take money out

Many people nibble away at their stock portfolios, selling counters to pay for XYZ.

Avoid this type of action.

If you want to retire my 40 you need to let the power of compounding take effect over time. Thus, selling stocks weakens your position.

Of course, there are situations when selling a stock is necessary, but just don't make it a habit.

5. Determine which type of passive income is for you

Let's get one thing straight. You are not going to be able to retire by 40 if you don't take any risk.

The higher the risk, the higher the return.

This is not to say you dump all your cash into penny stocks. Far from it.

At the moment, my stock portfolio is about 60% in REITs and about 40'% in dividend paying blue chips.

This is risky I admit. But, that said, I'm in the game for the long run and don't plan on selling when the going gets tough.

In fact, I will continue to reinvest my dividends no matter what happens in the market.

For me property, blue chip stocks and REITs are how I generate my passive income.

Passive income allows you to do the following:

1. Travel
2. Read
3. Exercise
4. Write
5. Spend time with friends and family
6. Volunteer
7. Live longer
8. Drink until 2am on a Monday
9. Look and feel better
10. Listen to podcasts

So, the above are my 5 things to do to retire by 40.

I hope you have enjoyed reading this post and I wish you all the best.

Saturday, 2 March 2019

Retiring early and taking advice from Arthur Schopenhauer? Really?

As regular readers to my blog will know, I like to look at investing through a literary/philosophical lens from time to time.

This is because I would much rather read a novel by Charles Dickens or Joseph Conrad than analyze a company's annual report. 

Sorry, folks. 

I know there are many of your in the Singapore Investment Bloggers   community who love nothing more than whiling away your free time with a copy Singtel's quarterly results, sipping on a hot latte. 

If this floats your boat, then fair play to you. 

It just doesn't do it for me.

So, why do you write a Singapore focused finance blog, I hear you ask?

This is a good question with an easy answer.

I write posts for this blog every Sunday morning for two reasons.

Firstly, if I don't write in connection to my portfolio, I am doomed to forget about it.

I need to type 500+ words every week to keep my mind in the stock investing zone otherwise I simply won't bother week to week. 

Given the choice of picking up a quality piece of fiction or reading the Motley Fool (no offense guys) I would choose the former every time, unless I'm searching for general information about a stock.

This is a question of psychology I suppose, and a strange one at that.

With a hefty portfolio of shares should I take not take more care of my garden? 

Should I not be tending, pruning, watering, hosing, forking, troweling and shearing?

Should I not be fretting, dwelling, flustering, freaking, bothering, troubling and agitating?

Ask the experts, and you get mixed messages:

Some say, keep a close eye on your portfolio and pounce on bargains when the time is right. 

Others say dollar cost average over a long period of time and reap the rewards.

The fact is no one has a clue how to beat the market, so I feel it's best to reel in the ego and admit you are powerless in the face of unpredictability.

Of course, there will always be an 'expert' who 'knows' but really if you sat down late at night with this person, beer in hand, and asked them the secret to their financial clairvoyance, they would take an anxious, twitchy swig of their bottle and sign deeply. 

"You know what, I haven't a clue really"   

They may even break down in tears and reveal to you how their career is built our of false promises and nebulous hunches, preying on the cashed up credulous masses.

Who knows? Weirder things have happened, haven't they?

Anyway, I'm not writing today to put down those in financial services, for we all have to make our daily bread (just some people make it more honestly than others)

Arthur Schopenauer, the 19th Century German philosopher is famous for being the most pessimistic thinker in history.

His aphoristic work is full of amazing insights on life that have made a big difference on how I see the world.

Above all, his sees humans as driven by a continual dissatisfied will, continually seeking satisfaction.

This he explains in his seminal work 'The World as Will and Representation'. 

For Schopenhauer, human desire is futile, illogical, directionless, and, by extension, so was all human action in the world.

He talked about life as being like a mosaic:

"The scenes of our life resemble pictures in rough mosaic; they are ineffective from close up, and have to be viewed from a distance if they are to seem beautiful. That is why to attain something desired is to discover how vain it is; and why, though we live all our lives in expectation of better things , we often at the same time, long regretfully for what is past."

He goes on...

"The present, on the other hand, is regarded as something quite temporary and serving only as the road to our goal. That is why most men discover when they look back on their life that they have the whole time been living ad interim, and are surprised to see that which they let go by so unregarded and unenjoyed was precisely their life, was precisely that in expectation of which they lived."

It good stuff, isn't it? It's imbibed with eastern ideas, particularly Buddhist ideas of which the man was one of Europe's leading experts at the time. 

So how does this tie into investing?

Well, as I read many people's blogs about FIRE and the like Schopenhauer's ideas about life come flooding into my brain.

Many people seems to be forgoing enjoying themselves in the present in favor of an imagined future.

Thus, it seems people are forever 'becoming' something else. If this is the case. what are they doing now?

Isn't 'being' more important than 'becoming'?

This is why I refuse to micro-manage my portfolio for some future that might never come. Having said that, I, too, am guilty of 'becoming' as I have a portfolio of dividend paying and growth stocks, which will, hopefully, make my life easier in an imagined future.

However, what makes my approach different is that I spend as little time as possible fretting over the details.

I would much rather spend the NOW immersed in great literature or non-fiction rather than doing technical analysis or whatever.

Now, I don't want anyone out there to think I'm saying doing these things is a waste of time, I'm not. 

It's just not for me, and the purpose of a blog should be to excavate your own feelings about the world and your place within it.

I just don't want to get to the end of my life and look back and think I could have used my time more effectively when I had the chance.

For me, FIRE, and all the pressure and pain that goes with it can be minimized by a more passive long term dividend paying strategy. 

Who knows when we reach retirement we might be bored and crave the world of work. 

Who knows? Life is strange.

As Schopenhauer said:

"As things are, we take no pleasure in existence except when striving after something - in which case distance and difficulties make our goal look like it would satisfy us (an illusion when we reach it)"

He goes on to say:

"...pleasure itself consists in a continual striving and ceases as soon as its goal is reached. Whenever er are not involved in one or other of these things but directed back to existence itself we are overtaken by its worthlessness and vanity and this is the sensation called boredom."

It's scary to think that we could sacrifice so much now and then when we reach financial freedom feel restless and disinterested. 

So, what's the way out then? This is the big question.

According to Schopenhauer happiness is pretty much impossible, and the future... forget about it. It's a figment of our imagination, a dreamlike state.

As a way out, Schopenhauer recommends withdrawing from society and becoming something like a meditating hermit living in a cave high on a mountain top.

If this sounds too extreme for you, you're not alone. 

What I propose so we can all live a less anxiety driven life is this:

How about people become more aware of being happy in the here and now, eat well, exercise, meditate, listen to good music, talk to good people, write, listen, drink, invest for long term and be thankful for how wonderful life really is.

Let's stop micro-managing and micro-trading and give ourselves a chance to breathe in the sweetness of the moment. 

Retirement will come whether we fret about or not. Let's be prepared, but not kill ourselves trying.

One last word from Schopenhauer on life:

"Yet what a difference there is between our beginning and end! We begin in the madness of carnal desire and the transport of voluptuousness, we end in the dissolution of all our parts and the musty stench of corpses."

Food for thought people. Enjoy life while you have it.

How does that sound?