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Gen Y Speaks: At 20, I ran a business with six-figure revenue. Here’s what I learned. (TODAY online)

I love how they’ve run a story on a local entrepreneur who’s candid enough to share her experiences. It’s also a nice story because the writer no longer runs her own business which is a nice contrast to the perspective that entrepreneurs must be married to their businesses forever and ever.

It’s like what I tell my students in economics class – opportunity cost tells us that if you want to start your own business, do it while you’re young because the opportunity cost of doing so is low.

That aside, one day I must rant about how we’re trying to promote and teach entrepreneurship in school. It’s my view that while the skills to be an entrepreneur can be taught, what ultimately makes entrepreneurs is their social and familial environment.

You can’t go out and run a business if putting food on the table is a concern.

3 property statements that don’t hold water (Property Soul)

To be honest, at some point in time, I believed in some of these statement myself.

I kind of learned that statement 1 and 2 didn’t always hold water when I saw my parents’ investment property become a liability instead of an asset.

Statement 3 is the most interesting one for me because I never really thought that hard about the backgrounds of the Asian families whose riches are so closely linked to property.

The other thing I like to point out about those who believe in Statement 3 is that property developers make their money building and SELLING property and not buying it as the common man does.

In short, it’s a different ball game.

Extreme Concentration of Global Wealth (The Big Picture)

Nice infographic.

And a sobering thought that the average Singapore should easily be in the top 10% in terms of wealth if you have a fully-paid up HDB flat and/or meet the retirement sum in your CPF.

Unfortunately for the pro-government types, people can’t eat bricks and their CPF statements.

The Earnings Mirage: Why Corporate Profits are Overstated and What It Means for Investors (OSAM)

Heard about this from this episode of the “Animal Spirits” podcast. I haven’t gotten through it but looks like a worthwhile read.

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Family Inc: Viewing Your Career as Investments (Investment Moats)

I think Kyith at Investment Moats is going through some sort of career transition and chanced upon this book. There is a nice bit at the front part of his post on the importance of human capital.

I written about it before (here and here) but it’s interesting to see how prevalent it is that people don’t consider their human capital as part of their net worth.

This is especially true when it comes to asset allocation. I know far too many people whose incomes don’t vary much and where the threat of redundancy is low with respect to economic cycles (think civil servants, doctors, etc.) and most of their wealth comprises spare cash in the bank or they lock up themselves up in some sort of low-yielding endowments.

On the other hand, it’s the very people whose incomes and jobs vary with economic cycles (think property agents, bankers, traders, business people etc.) that load up on risk assets with leverage to boot.

If there was anything that I learned some the CFA level 3 syllabus, if was this – that if your human capital is bond-like, you can weigh your financial portfolio more towards equities and vice-versa if your human capital tends to be more equity-like.

The Thing That’s Probably Blowing a Hole in Your Budget (A Wealth of Common Sense)

Ben Carlson has a great post on how a car is probably the worst of the three big forms of debt for the average American since a car is a depreciating asset while a mortgage and a study loan, arguably, helps you purchase an asset that increases your net worth.

A wise colleague told me the other day that he read on the papers that owning a car in Singapore is one of the major differences between comfortable retirement and a barely-there retirement for the average Singaporean.

Cars are darn expensive in Singapore and the COE only lasts 10 years. Also, public transportation is relatively affordable. So, yeah, I agree.

Double feature since there are on the same issue. NYT link via The Big Picture and the other sent by a friend.

It’s crazy to see how long and how low interest rates can go. But as I replied to my friend, it’s also this sort of environment that leads to asset bubbles as easy credit means that money has to find a place to be invested no matter how ridiculous the premise.

Initially, I thought that we were at the end of the cycle with all the new tech IPOs but it looks like the powers that be hope that this will continue for some time yet.

The other positive thing that this environment has going for it is that valuations, in general, are not at extremes, the masses aren’t making the easy money, and we don’t have the inflation necessary to force the hand of the central banks.

So perhaps, this party could go on for some time.

Late on this and no post last week because there’s been some changes on the household front. Keeping a kitten is no easy task but she’s been a gem so far.

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Wife in S’pore praises her husband for becoming a private hire driver because it is noble (

While the article may extol the virtues of a young person being a Grab driver, anyone thinking of going down the same path should note that for a relatively younger and better educated person, this would translate into higher costs in the long run as there is a lack of a career path in this industry as economist Walter Theseira pointed out.

Also, it’s better well-known that private-hire driver earnings have come down significantly from when these companies started entering the market. They enticed more people to become full-time drivers through higher incentives at the beginning.

Add to the fact that Grab is the new taxi, I’m pretty sure many more drivers will enter the fray in the coming years as the baby boomers officially retire from the workforce. In Singapore, we never really stop working.

They should come back and ask this same lady if she’s happy with her husband being a Grab driver when he’s 50. Having said that, if you have few prospects because of a lack of academic qualifications, this is not a bad path to take.

Interest Rate Chasing in Your Savings Account (A Wealth of Common Sense)

It’s strange to me to see how some people in Singapore get excited over a 0.25-0.5% difference in interest rates. I know of people who even have spreadsheets to compare which savings accounts give the best interest rates. In recent memory, the comparison is mostly between DBS’s Multiplier account and OCBC’s 360 account.

I’m at the other extreme because for the longest time, I had a lot of cash sitting in an account that paid a paltry interest below 1% and I know that was stupid of me.

But now that I’ve moved to the DBS Multiplier account, I’m not going to fret about whether the OCBC 360 account gives me a better deal. Even if it does, it won’t be by much.

The thing about those people that get excited over 25 to 50 basis points is that they usually also miss out on the 6-7% per year because they focus so much on only savings accounts.

Will Trend-Following Continue to Disappoint? (A Wealth of Common Sense)

If you’ve read the Meb Faber white paper, trend-following works by helping you avoid the large drawdowns that hit investors who are invested all the time.

The downside is the whipsaws you get from entering and exiting positions due to false signals and the utter frustration from this in a prolonged sideways market.

We’re halfway through the year! Time really flies, doesn’t it?

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The Fecundity of Endowments (Northwood Family Office)

A paper on safe withdrawal rates for long-horizon portfolios. The paper proposes a safe, simple, and dynamic approach to the safe withdrawal rate. Totally makes sense and I can’t imagine why no one thought of this before. (h/tip to Investment Moats for this)

Go read the entire paper. It’s only 8 pages long and not very technical.

Georgetown study: ‘To succeed in America, it’s better to be born rich than smart’ (CNBC)

I can’t say that I’m surprised at this finding.

I wonder if we’ll find similar results in Singapore or will we find that our much-vaunted education system is really a social leveller?

Some Good News For Retirement Savers For Once (A Wealth of Common Sense)

Ben Carlson breaks down the findings from a Vanguard paper and notes how stark the difference is between voluntary enrolment and automatic enrolment in 401(K) plans.

Ladies and Gentlemen, this is why CPF is forced upon you.

Unfortunately, along the way, the usefulness of CPF gets diminished by letting people use it for (overpriced) housing. Those who need CPF for retirement will have spent it on housing and those don’t…well, CPF is a drag on compounding wealth.

Lots on the economic and investment front this week.

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Tesla’s Travails: Curfew for a Corporate Teenager? (Musings on Markets)

From Prof. Damodaran comes this wonderful piece on Tesla’s valuation. I don’t read it so much for the accuracy of what Tesla’s worth but more for the thought process and analysis on what Tesla’s value should be.

How Many Hours Of Work Does It Take To Buy The S&P 500? (Global Macro Monitor)

Interesting way to value the S&P 500. Essentially, the higher the ratio of the S&P 500 to the average hourly wage from work, the more richly valued the S&P 500 is as it takes more and more hours of work to buy the S&P 500.

However, the average investor probably does not earn the average weekly wage.

Institutionalized nonsense (The Grumpy Economist)

The economic perspective on why the US labelling other countries as “currency manipulators” is wrong on so many levels.

Take their analysis with a huge pinch of salt and follow their advice at your own risk.

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I’ve lamented about the sad state of financial literacy in Singapore (here, here, and here for example.) and it irks me even more that there are certain websites in Singapore that have wide appeal to retail investors even when they aren’t doing a good job of educating the wider public about financial literacy.

In fact, given some of the poor analysis that is out there on these sites, some retail investors end up with the curse of thinking that they know a lot when they actually know very little.

Much of the analysis on these sites is at best simplistic and at worst, plain wrong and misleading.

Exhibit A (Actually, the only exhibit I have)

Recently, one of these sites published a quick analysis on the results of CapitaMall Trust (CMT) and I took a quick look because I have vested interests in the REIT.

Somewhere further down the article, I came across this horrible section that attempts to value the REIT.

Naming and shaming them but not giving them the benefit of creating a backlink to their article

Problems with Exhibit A’s valuation

The first problem with the valuation presented above is that you cannot compare CMT’s yield to the average of 40 other REITs because not all the other REITs are retail REITs.

It’s like comparing how spicy one stew is to another. Stews can be as diverse as a tomato-based beef stew to a curry, and these can range in spice level from 1 to 10.

Western-style stews such as a chicken or beef stew will always be at the lower end of the spiciness scale (i.e. 1-3) while curries will be at the top end (8-10). So, saying a beef stew is less spicy than the average stew is kind of meaningless because you wouldn’t compare a beef stew with a curry in order to determine how spicy it is.

This is exactly the sort of cardinal sin presented in Exhibit A.

If you’ve compared retails REITs with commercial, industrial or healthcare REITs, you’ll realise that on average, their yields are vastly different as they face very different economic conditions.

It’s pretty well known that Retail REITs tend to trade at lower yields than other types of REITs so naturally, if you compare CMT with a whole basket of REITs, it’ll be perpetually undervalued as compared to the basket.

Ditto for the P/B ratio.

The other problem is that by just focusing on relative valuations, it doesn’t help if the whole REIT sector is overvalued or undervalued. In fact, a valuation should be based on the cashflows or assets held by the REIT and not just based on it’s value relative to other REITs.


I’m not sure what the solution should be when it comes to getting the wider public better educated on financial literacy. Some of the providers out there have vested interests while some of them think they are providing a service when they actually suck.

Maybe there is a role for someone to call out the bullshit that some of the services that these companies are selling.

All the Benjamins (or Yusof Ishaks if you’re Singaporean) in the world wouldn’t be any good unless you’re the only one with it

Lately, I’ve been doing some research on property investment and as a result, my Facebook and instagram feed has been flooded with sponsored ads which promise to teach you how to get rich through property investment with little to no money down.

Obviously, such ads are targeted at the mass-market investor because a common feature of such ads is how a couple with less than average household income in Singapore can afford a second property. A variant would be how “average Singaporeans” can own multiple properties with little to no cash down.

Personally, I’ve not attended any of these workshops but from what I’ve heard, the thing that they’re selling is co-owning multiple properties with numerous other owners or by leveraging up to your eyeballs (within the legal limits, of course) to afford the second mortgage.

Goodhart’s Law explains why the workshops are stupid

If you grew up in Singapore during the 90s, a popular idea at that time was that success meant having the 5Cs – Cash, Credit Card, Condo, Car, and Country Club membership.

Today, the aspirational quality of the credit card and country club membership has fallen by the wayside simple because it’s no longer difficult to obtain one.

I can’t say exactly when this happened but it has become a whole lot easier to get a credit card issued by a bank in Singapore. Although the credit limit wasn’t high, I remember getting two cards in the mail from my bank upon graduating from University. I didn’t even need to fill in an application or have a job. Ditto for the country clubs when NTUC and SAFRA* decided to get in the business and lower the barriers to entry for a membership.

These days, no one talks about getting credit cards or a country club membership because basically everyone has one. If we apply our imagination to cars, we can also conclude that once everyone has a car, it stops becoming an aspiration. After all, if everyone has a car, we would just end up with worse traffic and the rich would have then progressed to helicopters. Jakarta’s a perfect example of this.

In a twisted way, this is a version of Goodhart’s Law where the measure becomes useless when the measure itself becomes the target.

If having a car is a sign that one is rich, we would all work towards having a car to signal that we’re rich. However, that would eventually make having a car a terrible measure of wealth.

So, back to the property workshops that cater to the masses. The same logic means that if the masses could get rich through investing in property, they’ll quickly find themselves back in the middle if most people are able to invest in private property as well.

How to get ahead

Now, I have nothing about attaining material goods or getting wealthy. However, what most people need to recognise is that really wealthy people don’t buy stuff if it’s going to strain them financially.

A rich person wouldn’t own 39 properties on the maximum loan tenure in his/her own name with the solvency dependent on the rental income. If they can’t get tenants, they would still be able to pay off the mortgage and put food on the table.

Similarly, if you drive a fancy car but you have to hustle 14-16 hours a day and take on side gigs just to pay off the car loan and petrol, then owning a car isn’t exactly a sign of wealth.

So getting ahead shouldn’t be measured by something determined by others. You shouldn’t be getting a fancy car or apartment just because others think that’s what it takes to be a successful person.

Your success needs to defined by you.
On your own terms.
At your own pace.

So please, don’t be stupid.

*NTUC is the co-operative that is the de-factor labour union in Singapore while SAFRA is basically the leisure and lifestyle arm of the Singapore Armed Forces. In short, these two organisations are about as mass-market as it gets because they represent the workers and the armed forces service staff.

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Elbow-to-Elbow in Jalan Kukoh: The Reality of Overcrowding in Singapore’s Rental Housing (RICE)

A good look at some of the poorest households in Singapore through the lens of a writer who has observed two families living in the estate. Singapore isn’t all about the stuff that you see in Crazy Rich Asians. Most of us live very different lives from what was portrayed in that movie.

However, the lives of those living in rental housing are even further removed from the experiences that the average Singaporean go through in a lifetime.

Not Efficient, But Effective (Of Dollars and Data)

Guilty as charged.

Too often, I think about efficiency rather than the likelihood of the job getting done. And ultimately, I think we want to get the job done rather than not get there at all.

For example, being fully invested in equities may get you to retirement in the shortest possible time due to the higher expected returns.

However, most people may not stick to the plan when they see huge drawdowns on their portfolio when the market crashes. This causes them to give up on investing and they end up worrying about money even after they have to stop work.

In short, maybe we need a rethink towards getting to our destination with the highest probability instead of getting to the destination in the quickest possible time.

Think effectiveness, not efficiency.

Now, before I get called up for questioning by the police, I need to say that the title of the post is a reference to a book of the same name. I’m not saying that MHA is lying. I’m just saying that in case they haven’t realised, their statistics needs more explanation and clarification.

There is a very good classic on statistics called “How to Lie With Statistics” by Darrell Huff that was written in the 1950s that every student of logic should read.

That book highlights some of the various ways that statistics, intentionally or unintentionally, can be used to muddy the waters and unfortunately, I think that’s what Minister for Home Affairs, K. Shanmugam did when he warned Singaporeans of how there are “very strong, coordinated efforts internationally as well as within Singapore“. Efforts to do what? Well, according to the mainstream media, to change Singaporeans’ perception of cannabis use.

Now, the minister may possibly be right about how the sinister forces of the western world and capitalism are trying to change Singaporeans’ perceptions of cannabis use in an attempt to expand their markets and ultimately, profits.

The MHA may also be right about the harmful effects of cannabis use. After all, this piece by Malcolm Gladwell in The New Yorker cites some of the studies done on cannabis use and it’s not all good. However, even The New Yorker story is cautious about being too definitive on the data.

The Misuse of Data

In the section on ‘Social Costs’, the article reporting on the issue cited “that the US state of Colorado, which legalised cannabis for recreational use in 2012, had reported an 8.3 per cent increase in property crimes and an 18.6 per cent increase in violent crimes from 2013 to 2016. “

I have no doubt that the statistics are true. Unfortunately, statistics can be misinterpreted and in this case, I think they have.

Why? Because I went digging around about other people’s thoughts on the issue and there are some out there that are in agreement with our minister and MHA and some of those those that oppose them.

Then, I found this report by the Colorado Department of Public Safety. The report is titled “Marijuana Legalization in Colorado: Early Findings” and was written in March 2016.

Now I haven’t read the whole thing (it’s 147 pages long over six sections) but in the executive summary, it clearly says:

It should be noted that the most fundamental challenge to interpreting data related to marijuana over time stems from unmeasured changes in human behavior concerning marijuana. Legalization may result in reports of increased use, when it may actually be a function of the decreased stigma and legal consequences regarding use rather than actual changes in use patterns.  Likewise, those reporting to poison control, emergency departments, or hospitals may feel more comfortable discussing their recent use or abuse of marijuana for purposes of treatment. The impact from reduced stigma and legal consequences makes certain trends difficult to assess and will require additional time to measure post‐ legalization. Additionally, for example, the increase in law enforcement officers who are trained in recognizing drug use, from 32 in 2006 to 288 in 2015, can increase drug detection rates apart from any changes in driver behavior.  For these reasons, these early, baseline findings should be carefully considered in light of the need to continue to collect and analyze relevant data. 

The point is that even if, as per the MHA factsheet, crime rates did go up, can the cause be attributed solely to the fact that cannabis was legalised? In fact, two points raised in the executive summary of the report are:

  • Colorado’s property crime rate decreased 3%, from 2,580 (per 100,000 population) in 2009 to 2,503 in 2014.
  • Colorado’s violent crime rate decreased 6%, from 327 (per 100,000 population) in 2009 to 306 in 2014.

So in fact, property and violent crime rates were higher prior to the legalisation of cannabis. So what gives? What’s the true story?

And the answer to that should be: “We don’t know yet.”

In the case of the statistics quoted by MHA:
– Did the increase in property and violent crimes rate coincide with it being a tougher economy? After all, we know that people who are more desperate turn to crime.
– Is the increase due to a low base or outlier? If 2013 happened to be an abnormally low year for crime in Colorado, any reversion to mean would cause an increase in the rates reported.
– Were the statistics statistically significant?

In short, the point I’m making is that any statistically sound person shouldn’t be drawing conclusions based on a few reported statistics without knowing the context of the numbers or knowing the veracity of the data.

The downside of certainty

From the MHA and the Law and Home Affairs minister’s point of view, the upside of being so certain about the data is easy to guess. For one, they don’t have to amend any laws. Or look bad for being so tough on drugs only to have academic studies say that they were wrong all along.

However, as with all things, upsides come with downsides.

So what’s the downside of being so certain as the MHA and Minister Shanmugam are?

The downside is that the justice system will be forced to come down hard on those who still consume and traffic cannabis. And it could potentially result in cases like this* where people in difficult circumstances become unwilling drug mules and if not for the appeals court, an execution would have taken place.

After all, how many things that were once considered to be bad are now not? In Singapore, Men sporting long hair in the 60s was once considered taboo; Fat was once demonised; and of course, homosexuality in Singapore is still a controversial topic.**

The downside of certainty is that over time, what you were once certain about can change.

I can accept that individuals or members of a political organisation or religion have their views based on anecdotal evidence but our government and government bodies need to be held to a higher standard simply because they represent all of us. They should base their decisions on facts and certainty rather than ideology.

*I know the case in question is about an illicit drug and not cannabis but as long as cannabis remains illegal, same thing could happen right?
**Homosexual sex is illegal but our society has become increasingly tolerant of homosexual relationships.

Amazingly, I’ve left 105 reviews on Google. I either have way too much time on my hands or this is a perfect example of how small things compound over time.

I’m just joking. So, I’ve been leaving reviews on Google for a while now and I’m not sure if there’s a right way to do it or not but this is my way of leaving a review on Google and the way I’ll be doing it going forward.

The whole point of this post is just to crystalise my thoughts and remind myself that there’s a guide to leaving a review that I can always refer to.

Why leave a review?

I guess the first step is to even ask: why leave a review?

My answer to that is that it helps businesses gain more customers and a good review from a genuine customer is better than any paid advertisement.

Plus it’s free (for the company).

I never realised the value of this until I was travelling in other countries such as the UK and then I realised how much more likely I was to try a particular restaurant out if it was near me and had lots of positive reviews.

How to leave a review: Ryan’s Way

In my book, I’ll only leave a review if it’s going to be a four or five star review. I tend to be on the forgiving side and I don’t want to penalise the company unfairly if they just happen to be having a bad day.

Of course, rating systems won’t work if no one leaves a bad review but I believe that there are others out there who will be doing that job. Also, this means that I tend to avoid places that have mostly 4 or 5 star reviews but the reviews are few in number.

Also, I tend to attach a photo to my review. This photo is one that I’ve taken because photos add another dimension of clarity to the review but a stock photo would throw the authenticity of the review into question.

I would make an exception to leaving a bad review when I go to a place that has tons of four or five star reviews but I personally had an overall bad experience. In that case, I’ll leave a review that borders on the lower end because I want my review to make a difference.

However, if I leave a bad review, I’ll detail the exact experience that made it bad. For example, the food may have been less than spectacular for that price range but the service was extraordinary. In that case, I should let the reader know that the lack of stars was due to the food and not the service. That way, if management of the restaurant reads the review, they’ll know which areas they need to investigate and improve upon.’

Easy steps to a review

To summarise, I will:

  • leave (mostly) only positive reviews (4/5 stars).
  • details on where the company has gone right/wrong.
  • a genuine photo.