Archives for posts with tag: Singapore

It’s not much but I’m proud to say that it works and I made it from scratch (with a lot of dependencies and googling)


Finally, I got down to creating a page for the Straits Times Index’s PE10. Right now, it’s very simple. it just displays the latest month’s PE10 as well as the historical average and median values.

I’ve picked up coding for some years now but my progress was and still is, slow. However, it looks like I learned enough python and javascript to create a page where I can share the STI’s PE10. The page will be updated monthly.

What I did is really hacky because:

  1. I have to manually key in the STI closing price and PE.
  2. Run a python script locally to process the latest entry, calculate the PE10 and output to a json file.
  3. Upload the json file to the server for the page to retrieve the data, do some calculations for the average & median, and display it.

At some point, I hope to add a chart to the page so you can track how the PE10 has changed over the years and the subsequent capital gains based on a certain year’s PE10 ratio.

You can check out the page here or from the list of resources on my blog.

If you have any tips on how I can improve the page, please let me know in the comments below.


For most Singaporeans, we’ve been told all our life that if we study hard and get into university, we’ll be set for life. We’ll be able to get a decent salary, afford a decent house and after 30 years of work, we’ll be able to retire with enough savings to fund the remainder of our days.

It looks like some graduates can’t even get off the starting blocks.

Reality Bites

A recent Business Times article highlighted the plight of recent graduates who can’t find full-time employment and the chance that a large portion of them will end up being underemployed.


some graphs go a long way. Source: Business Times Singapore

From the article, it seems that the picture is quite bad for graduates in certain areas like humanities and certain science courses, as well as the graduates from private degrees and external degree programmes (e.g. SIM, MDIS, Kaplan etc.).

One of the graduates interviewed basically fit this profile:

Meet Raymond Eng, 27

Over the past two years, Raymond has sent out about 300 applications, but has yet to find suitable full-time permanent employment. He graduated with a Banking and Finance degree from SIM-UOL in 2016, and has since been working on internships and contract jobs. His first internship out of university paid S$1,500 per month. According to Raymond, the market has an oversupply of graduates, and the influx of foreigners might have depressed wages.

The problem with his profile is what it doesn’t say.

He sent out 300 applications but how many calls did he get? I’m guessing that he got very few because he’s one of those that graduated with a GPA that barely made it and his resume shows very little else. If asked in an interview about he spends his free time, he probably answers “Netflix.” The fact that he had an internship which didn’t lead to a more permanent position is also telling.

Once again, all of the above is conjecture but it could easily be true.

Black Swan My Ass

I’m actually surprised that people didn’t see this problem with graduates coming.

Later on in the article, it quotes NTUC Assistant Secretary-General Zainal Sapari:

Of the 1,626 survey respondents, 70, or 4.3 per cent, had fallen into severe underemployment, earning less than S$2,000 per month, despite working full-time.

“These are the ‘graduate poor’ and it is a black swan in our labour landscape,” says Mr Zainal.

First of all, a black swan is an unknown unknown whose presence is felt only when you first see/experience it. By that definition, underemployment among graduates is NOT a black swan.

Second, haven’t there always been stories like that Ph.D. driving a taxi, or how graduate managers in their 40s get retrenched and end up in lower-paying jobs? If so, this phenomenon has always been there and it hardly qualifies as a black swan.

Ok, with that out of the way, I’m not surprised that the survey, while of a small sample, shows that there are graduates that are underemployed. With the increase in the number of universities in recent years, it’s no surprise that we have more graduates in the workforce. With a higher proportion of graduates, it’s no surprise that you’ll find more graduates either working in jobs that they didn’t really need a degree for or having difficulty finding a job that they want.

While some of the numbers could be due to business cycle fluctuations, we should have seen this coming. After all, this trend has been seen in Japan and Taiwan for some years now. Some years back, I already heard from a friend of a friend who’s Taiwanese that starting salaries for graduates could be around US$700 per month. For years now, there has also been the trend where Japanese graduates end up being employed solely in part-time jobs. These graduates are mostly from second or even third tier universities who might have been better off just going to a vocational school.

It’s a classic demand and supply problem — more university graduates equal cheaper university graduates.

Declining in Quality of Graduates

I graduated from university a while ago but even when I was in school, I wondered how certain people were admitted. I’m hardly the smartest person in the room but even then, there were some people who were struggling to understand the most basic of concepts. And this is NUS Economics’ students we’re talking about.

In recent years, SUSS (formerly SIM) has created more chances for people who otherwise wouldn’t have made it to university to get a degree. The average Singaporean becoming more affluent has also helped their offspring get a general degree from places like Australia that are very happy to accept foreign students who are veritable cash cows.

I’m not saying that there aren’t intelligent people studying in those places but on average, any HR gatekeeper is going to expect that they have a better chance with an average NUS/NTU/SMU student than an average SUSS/SIM student.

What’s bad about it is not where they’re studying but it’s that they’ve fallen for the lie that as long as they get that piece of paper, their life is set. Maybe that, or that they want to postpone being an adult a little longer and everyone knows that part of going to university is postponing adulthood.

What The Smart Ones Do

I have many former students who’ve studied or are studying at SUSS/SIM and the smart ones know that getting the degree is just a formality.

In other words, they aren’t betting on that piece of paper to do jack for them.

What they’ve done in their spare time is create businesses or work in part-time jobs to pick up skills that could lead to full-time employment. I know of one who started her mobile barista business while juggling her studies and the business seems fairly successful.

The other smart thing to do is to keep helping organise activities outside of class. Organising events typically require students to raise funds, approach businesses for sponsorship as well as invite VIPs to your event. These are all valuable skills that you could have picked up from a school, outside of the classroom. It’s also likely that you get less rejection as a student from a university and who knows, it may be through organising one of these things that you meet someone who can offer you an opportunity.

If you do what I’ve just described, it’s highly likely that you won’t find yourself in the same situation as this guy:

When Chris Lim, 26, graduated with a Bachelor of Business Management degree in December 2016, he didn’t expect that it would take him 10 months to land his first full-time job. After all, the Singapore Management University (SMU) graduate was “aggressively applying” and had sent out 70 applications in less than a year, only to be called back for less than 10 interviews.

He explains the Catch-22 he found himself in: some companies required at least one to two years of work experience for sales and marketing roles which, coming just out of university he did not have, and further, “they don’t teach you how to be a salesperson in school”.

This guy’s story sounds pretty much like the other guy.

He should have his school’s career counsellor look at his 70 applications and tell him what’s wrong with them. Furthermore, as I mentioned, sales and marketing skills could have been picked up from outside the classroom. The fact that he didn’t even think of this shows how passive this guy is. If that’s the case, would you want to hire him as to do sales for you?


The Minister of Education and his Ministry is right to shift the focus to skills in recent years. Unfortunately, not many parents think the same way. If you think a degree is your route to success, I’m sorry to say that you may need to rethink your strategy.

That strategy may have worked in the past but it’s no longer going to work in the future. The last time it worked is probably for my generation of graduates where we made up only about 30% of the labour force. As things go, the degree may become a minimum requirement for most jobs but it will not guarantee a job or success at one.

If you’re a young person, focus on picking up skills that play up your strengths and make you stand out from your peers. This is especially important if you can’t study and you’re going to end up with a degree from a second-tier school with a GPA that is a joke. The last thing someone wants to see is that you did badly in school because you were sitting around watching Netflix all day. If you did badly because you were going about running a business that brought you $2,000-3,000 of revenue a month, at least that’s excusable.

I can safely say that almost everyone reading this blog would like to reach financial independence and retire early if they could. In recent years, this has caused many people to jump on the Financial Independence Retire Early (FIRE) bandwagon. There are also plenty of people who have probably given up on retirement.

Recently, I saw a post on Investment Moats on the exact same topic. The question was one that most people probably have — Can I afford to retire on $X of net worth?

The problem with such questions is that everyone’s situation is pretty unique. Not all people are married, not all people have kids, not all people have to the same number of kids, and not all people want the same lifestyle. This is why financial advisors still have their place in this day and age because some judgement is needed to assess a person’s financial circumstances.

At the same time, I thought that if there’s a benchmark or a guidepost for people, that would be a goal that people can work towards. I saw a fantastic post on Reddit that used average household expenditures to determine financial independence.

So I thought, ok, why not use data from the Department of Statistics Singapore to determine the average expenditure per person and the net worth needed to generate that annual expenditure.

I found data that separates average household expenditure by residential property type and what I did was to take the average household expenditure, divide it by the average number of people in a household and multiply it by 12 to annualise it. Then I took that expenditure number and multiplied it by 33.3 and 25 respectively to show what net worth you need to achieve FI if you’re an average person.

Here are the numbers:

Avg. Monthly Expenditure (by household type)* FI AMOUNT (PER PAX) 3% FI AMOUNT (PER PAX) 4%
TOTAL** 4724  $         566,880  $         429,455
HDB 3831  $         459,720  $         348,273
CONDO 8000  $         960,000  $         727,273
LANDED 10409  $      1,249,080  $         946,273

The nice thing about this table is that it determines what net worth you need relative to the average kind of living standard you want. For example, if you want to live like a person in an average HDB household that spends $3,831 per month, you would need a net worth of between $348,273-459,720 if your withdrawal rate is 4% or 3% respectively.

Please be aware that the table above shows us the average net worth needed per person. If you are the sole breadwinner in your household of two, then you need to multiply those net worth numbers by two.

Of course, doing so makes it seem more challenging and you might question if you’ll ever be able to retire but keep in mind that the average household expenditure need NOT be your expenditure. You can always spend much less than the average person. Life is not a game about trying to see whether you can buy more things than the next person.

This simple exercise should help give you a target to work towards but take not that it’s not scientific in that the numbers are absolute. Rather, they should serve as a guide and adjustments should be made to cater to your own situation.



*The data is from the 2012/2013 Monthly Household Expenditure survey. To bring it up to today’s numbers, you would have to factor in the inflation rate for the last few years. Do not that inflation rates tend to be different for different income groups so use the right rate.

**The ‘TOTAL’ group includes households whose residences are not part of the other three categories. e.g. Non-residential shophouses etc.

books on bookshelves

Photo by Mikes Photos on


Last week, Minister for Education, Ong Ye Kung, spoke in parliament about the current education landscape. TODAY newspaper (which is doing a fantastic job btw) published an excerpt of the speech he made in parliament.

In the excerpt, Minister Ong addresses what he sees are two paradoxes in the education system — meritocracy and inequality.

You can go over to the link above to read the excerpt but there are two things he brings up in his speech that I want to comment on.

PSLE: The sacred cow that still can’t be killed

On the PSLE, he says:

Another common suggestion that was raised is to scrap the PSLE, one of the sacred cows.

I will admit that PSLE is far from a perfect system and it does add stress, a lot of stress sometimes, to some parents and students, and the Minister too.

But it happens also to be the most meritocratic, and probably the most fair of all imperfect systems.

If we scrap it, whatever we replace it with to decide on secondary school postings, I think is likely to be worse.

He then mentions that in Switzerland, students are assigned to secondary schools near their home and that 7% of students, presumably at their parents’ behest,  attend private schools which are the domain of the affluent.

I’m not sure why the Swiss model is necessarily worse than ours.

Assuming the public schools are of a high enough standard, what’s so bad about having most students attend a school near their homes?

As I see it, some positives would be:

  1. Kids don’t have to worry about a high-stakes exam before they are 12.
  2. Less time spent travelling to school equals more time for other things.
  3. Having more friends that also live in their community.

In the longer term, educated Singaporeans, especially those with experience living abroad, might think of staying in Singapore instead of leaving for greener pastures. I personally know of many people, all graduates, who have left or are seriously considering leaving Singapore for the sake of their kids.

I think the difference in the percentage of students attending private school between Switzerland and Hong Kong that Minister Ong cites is also more a reflection of the public’s perception of the public school system rather than an argument that scrapping PSLE will lead to the rich getting richer. Anyway, MOE should not worry about this as the current mantra is that “every school is a good school”.


Class Size: Smaller is not necessarily better for grades. Yes, but so what?

Minister Ong cites two studies, one done in Hong Kong and another done in Israel. I quote the bit on the Hong Kong study for readability:

Why then is MOE cautious on the issue of class size? Because how it is implemented makes all the difference. Let me cite you the results of a few studies to illustrate this.

They are done in overseas context, but nevertheless these are scientific studies and we should take note of the results.

In 2009, Hong Kong did a Study on Small Class Teaching in Primary School.

It put about 700 classes through an experiment over three years, varying their class sizes along the way.

The study found that however they vary the class sizes, there were no significant differences on performances compared to the territory-wide averages.

What Hong Kong did find was that where an experimental school or class did significantly better, it was because the principal was more experienced, took an active role in developing the curriculum, developing the teachers, and involved parents in the education.

Now, I’m not disputing the findings of the study but rather, I want to provide some perspective on interpreting the findings.

In my line of work, the classes I teach have increased by around 25% in size* from roughly 20 students to 25 students per class since I first joined. This is despite the decrease in the number of students enrolled in the school.

In short, the school has been getting more out of each teacher as the total number of hours we teach per week has remained the same but we have more students in each class.

The first thing that happens with more students per class is that the load for marking will increase. The second thing is that the administrative load increases — maybe it’s extra counselling you have to do because you have to chase students to complete a survey or there’s an extra counselling session to be arranged because a student is falling behind in school. Therefore, reduced class sizes will reduce the number of administrative tasks that each teacher has to do.

Which brings me to the next point.

Even if a smaller class size has no effect on achievement, it has an impact on other things. Achievement is usually measured in terms of a student’s grades. What if smaller class sizes lead to a closer bond between teacher and student? Better sanity for teachers? Less staff turnover?

Aren’t those other things important as well?

Maybe I’m being salty because they increased the parking charges but being too focused on the relationship between class size and students’ grades is probably a problem of measuring the wrong thing. Besides, isn’t Minister Ong’s own aim to de-emphasise academic achievements? In that case, why not measure class size against other things like staff and student welfare?

Unless the message is that those things don’t count.


Let me know what you guys also think in the comments below.


*The class size is much smaller than what primary or secondary school teachers have to deal with and you may say that we had it good to begin with but I bring up this point to show what teachers have to deal with when classes get larger in size.


Markets have been hit. Are you worried?


So, in February I wrote this:

I’m not out of the markets because I believe timing it is a futile exercise but I moved more money to cash/bonds as valuations got higher. In fact, I stopped buying anything after Feb last year.

This week, no thanks to the government increasing the Additional Buyer Stamp Duty (ABSD) on the sale of property, the markets fell roughly 2% on Friday alone. The STI is now down some 268 points or roughly 8% from the start of the year. From the highs of 3,577 reached in April, the market is now down 11.7% which puts us firmly in correction territory.

As mentioned in my February post, I stopped buying into the markets since February of 2017 as things were getting expensive and I basically enjoyed the ride up. I also started trimming some positions towards the end of 2017 as markets climbed. Selling UMS at what was nearly the peak for it netted some accounts a nice profit.

In case, you’re thinking that I made out nicely, I haven’t.

A couple of stupid decisions, like not selling Venture at its peak (I actually placed the order to sell it at $28 but it didn’t get filled) and not selling Starhub at all (this could be one for the history books) meant that my portfolio has been hammered somewhat. Not knowing when to sell has been one of my weak points and still continues to haunt me.

However, what I’m much better at is knowing when to buy. Thankfully, I’m (relatively) young and therefore being a net buyer is still the right way to go. By all the measures that I’m tracking (e.g. CAPE for the STI, difference between PE10 yields and the 10 year government bond, and some trend indicators), it appears that a buying opportunity is starting to appear.

A word of caution. Things are NOT dirt cheap based on valuations. We have seen cheaper valuations in late ’08-09 as well as ’16-early ’17. What many people don’t realise is that the market was much cheaper in early ’17 compared to mid ’10-’11 despite them being roughly at the same levels. This is because earnings had risen from 2011 to 2017 while prices barely rose.

This is the mistake that my senior colleague made. He was anchored on the price of the market and therefore, a level of 3,000 looked expensive to him in early 2017. This caused him to basically miss out on the upswing in markets in 2017.

If you think things are going to be as bad as they were in 2009, then based on current normalised earnings, the STI should bottom out somewhere around the 2,700 level. Expecting the STI to hit 1,500 as it did in the depths of the Global Financial Crisis is expecting the market to be hit CAPEs of 6x! That’s probably even lower than levels during the Asian Financial Crisis.


What do you all think? Let me know in the comments below.

In part 1, I detailed the most important takeaways from ‘The Intelligent Investor‘ (although in my haste, I left out the idea of Margin of Safety). In this part, I want to show you the parallels between the act of buying the book and investing.

This is essentially the second reason why I asked my younger brother to buy the book. I wanted to see what his thought and action process was like.

Reason 2: Buying stocks from a value perspective is pretty much like buying anything else


#1: Hardcover or Softcover?

Now, there are various ways to think about the difference but let’s take a look at the first factor that comes to mind — price.

Hardcover books are more expensive than softcover books although the first print comes out earlier than the softcover. In the past, I used to automatically buy the softcover version of the book since I figured that I was getting the same content for a cheaper price.

As the years have passed, I’ve come to realise that hardcover version of the book lasts much longer than the softcopy version of the book. Sadly, my own copy of ‘The Intelligent Investor’ is an example of this.

For things that you genuinely treasure, it never makes sense to consider only the price of the stock. In investing, the parallel to this would be buying stocks just by looking at price. Some people who buy stocks actually think that a stock that costs $10 is a more expensive stock that cost $1.*

The other parallel is to remember that sometimes, cheap stuff is cheap for a reason. Just like the book, a stock that sells for pennies (aptly called “penny stocks”) could reflect the actual fundamentals of the company.

#2: Borrowing before buying

Although I recommended that my brother buy the book, one other thing he could have done is go to the library to borrow the book first. You may say that he trusted me, as his brother and someone who knows a thing or two about the markets and therefore didn’t have to check the book out first.

However, borrowing the book is a smart thing to do if you want to know whether it’s worth spending your money on. In investing, this is akin to fundamental analysis where a would-be investor investigates the earnings, assets and cashflows of the firm in order to know what price to pay for the stock.

This could also be a good step before you decide whether it’s worth buying the hardcopy or just the softcopy, or whether the book is even worth buying at all.


In short, most people know exactly what to do when they buy a product. They check out the reviews, they compare the specifications between one product and another and they also compare where they can buy the good for the best price as well as other factors like delivery and any warranties from the manufacturer.

It’s strange that many people don’t do this when it comes to investing. They don’t compare the returns from one investment to another, whether those investments are guaranteed or the guarantee is merely a probability. They buy high for fear of missing out and sell low for fear of losing everything. Swayed by fluctuations in price, they hold investments for ever shorter periods of time.

It’s just weird.

Investment should be like buying anything else. Thinking of it as such will make you a better investor.



In case you’re wondering, paying $1 or $10 for a stock doesn’t matter. What matters is how much you pay relative to the earnings per share.

grayscale photography of man praying on sidewalk with food in front

Photo by sergio omassi on


It’s been some time since I wrote about inequality and how the poor in Singapore have fewer options. Since then, there’s been a slew of commentary and in-depth articles on this topic (for example, see here for a piece from the ST).

I’m not sure why there’s been so attention on this topic lately but I’m glad that this topic is in the limelight. In fact, the Straits Times (ST) article that I shared above mentions three cases and how in each of those cases, the poor have terrible options that could either (a) hinder social mobility or (b) mean that they’re always living life on the edge and one unfortunate incident could push them over.

What Many Singaporeans (Still) Think About The Poor

For me, the gem is in the comments and discussions on the reddit page discussing the article and there are some people who still don’t get it that the poor face terrible odds when it comes to making it out of poverty.

The commentators who say that being poor is a result of terrible choices and that the poor should know better are typical of the government’s thinking that welfare is a dirty word and will lead to a crutch mentality*.

To be fair, the government has softened its stance in recent years (probably as a result of GE 2011) but structurally, welfare tends to be on a case-by-case basis as the government has this thing about appearing prudent.**

You can tell that the government still thinks welfare across the board is a dirty word because they like to mention that certain ministers came from humble backgrounds and despite that, they’ve succeeded. In recent years, the same goes for students who have done relatively well, or passed, national exams despite odds like less-than-average family backgrounds or illnesses.

Using Isolated Stories As Shing Examples of Self-Reliance Doesn’t Help

The problem with using isolated examples is that it gives a distorted view of how big a handicap being poor is. I’m not a privy to such data but I sure hope someone that’s doing the research is looking into it. We need the data and if the data shows that majority of poor people lead less healthy and/or have less chance at social mobility for them or their children, then we can call the bluff on the government’s use of isolated examples. Otherwise, the government can call the bluff on the activists, academics and critics calling for more help for the disadvantaged.

For me, I was quite convinced because I heard the economic argument by Nick Hanauer (see here for a later version of his talk). Think of it. How much stuff can rich people buy? Rich people may have wealth and incomes that are thousands of times that of poor people but they certainly don’t buy thousands of stuff more than a poor person. You don’t see a rich person with a thousand times more T-shirts than a poor person, do you? And Mr Hanauer was talking about the middle class. So what more the poor?

Like I said, I don’t have all the answers and I think most people in Singapore don’t either. What I’m aware of is the issues are not as simple as “self-reliance” or “to try harder” and I think many people need a paradigm shift from that idea. I’m glad that the mainstream media and the academics finally have time in the sun on this topic.


Let me know what you think in the comments below.


* The irony is that these same people are probably the sort that expects the government to do something for every single situation. MRT breakdown? LTA’s not doing their job. Floods? PUB’s not doing their job. Kid failing in school? Teacher’s not doing their job. And as for the crutch mentality, guess what? We’re already heavily dependent on the government to provide housing.

** The irony of this is that our Ministry of Defence gets the lion’s share of the budget each year and no one questions the prudence of military spending because there’s always the boogeyman that someone is out to get us if we appear weak. I guess MINDEF can thank Mahathir for making a comeback. This argument holds more water now that there’s a different government up north.

boy wearing green crew neck shirt jumping from black stone on seashore

Stock photo of many happy children. Should you really have so many children if you cannot afford it? [Photo by ajay bhargav GUDURU on]

Is having children a blessing?
Is having more children always better than having less?

What if you have so many children that you depend a lot on the state to help raise your children? Should only those who can afford it have as many children as they like while those who can’t afford it be restricted to a certain number?

Those are questions that I don’t think anyone can agree on because these choices are deeply personal and yet, they can impact society at large.

Many children on a low income

Recently, Channel NewsAsia (CNA) ran a profile of the Heng family that has a total of nine members — Dad, Mom, and 7 kids from as old as 16 to as young as 3. As the article highlighted, the Dad only brings home less than S$3,000 a month while their monthly expenses come up to around S$3,000.

Because of this, the Heng family has barely enough for monthly necessities. Luxuries come from the generosity of friends and their church while they also have to apply for welfare payments to help with some of the expenses. The biggest cost seems to be non-monetary as the kids don’t seem to have much personal space and both the Dad and Mom seem drained from having to manage such a huge family.

I think it’s safe to say that to most people, they have no idea why this family would choose to have so many kids in the first place. And the Heng family is precisely the argument many people make for why the government should not provide complete welfare for citizens.

The argument goes something like this: if you provide citizens with enough for survival, they’ll take it for granted and make stupid choices like spending any surplus money they have on things like cigarettes, alcohol or other unnecessary things. Having hardworking taxpayers foot the bill for people like this is something that we should not support.

And the Heng family is not such a bad example, to begin with.

The Dad is working, albeit in a job that pays little. Presumably, this is commensurate with the skills he has so it’s not like he has a choice of being paid more. The Mom has to stop working because, otherwise, who’s going to take care of all the kids?

The Heng family is already a much more exemplary family that another family who was also receiving welfare, and yet had found the resources to pay for cigarettes and cable TV (see here).

How most people think about this

Reading profiles like these, I can understand why some people think this way. The average taxpayer probably thinks, “Hey, I’m working in a decent job. I get a salary and pay my taxes. On top of that, I make sure that I have enough to raise my kids and give my family a decent standard of living. Why should I be penalised by having my taxes pay for other people’s bad choices? If they chose to make bad choices, they should pay for it.”

How I think about this

Unfortunately, this is where I take a different stand. If it was the 20-year old me, I might have thought the same way as most people but right now, I tend to think of it this way:


The parents made some questionable choices but the children, if you believe children are the future, shouldn’t have to pay for those choices. This family is living on such a tight budget that I doubt they have any room for emergencies such as the Dad having to stop work due to injury or if one of the family members fall seriously ill and chalk up huge medical fees.

While those emergencies may be covered financially through welfare, we cannot deny that the emotional toll of such an emergency may impact the family. For example, if the Dad cannot work, then the Mom will have to take over the role of breadwinner and naturally, the older siblings will have to step up and take care of household matters. This will affect their studies and their shot at a decent future.

In short, Singapore’s form of targeted welfare may look good on paper but if we account for the needs of a complex system, it will not work. Vulnerable families such as the Heng family have fewer options when it comes to life. And with fewer options come worse decisions.

Poorer people have fewer options

Take for example this report on the exorbitant interest rates that poorer families pay for discretionary items. While it’s normal for most people to pay for items like a fridge or TV in full, poorer families don’t have this option and are forced to take up options such as hire-purchase schemes. While they may initially be able to afford these the purchase, a curveball that life throws them can easily cause the purchase to spiral into a nightmare.

Of course, this is not unique to Singapore. All over the world, poorer people have fewer options. For example, those who can’t afford college tuition take student loans to finance their college education. On paper, that sounds like a good thing — borrow money you don’t have, invest in an education so that you can get a higher paying job, pay off the loan and enjoy the returns from education.

In essence, education functions like how a business borrows to buy an asset and use the returns to the asset to pay off the loan. Unfortunately, not many people realise that not ALL businesses work out. Similarly, people with students loans can find themselves in trouble should they be unable to work and therefore be unable to repay the loans. The debt can snowball and your credit can get impaired such that it affects other areas of your life. This is especially true if the person took the loan to invest in an education that wouldn’t pay off anyway because demand for graduates in certain disciplines tends to be lower than others.

We need a broader safety net

I’m actually glad that in recent months, the conversation in Singapore has focused quite a bit on inequality in Singapore. Maybe it was Teo You Yenn’s book, or maybe it was because of the watershed general election in Malaysia that caused our own politicians to suddenly open up to the idea that inequality is a hot-button issue but no matter the cause, it’s good that people are starting to talk about it.

If we truly want to help the most disadvantaged in our community, we need to recognise that a safety net needs to be broader so that the ship doesn’t sink. Having targeted welfare is like providing patching holes in a ship’s hull. It’s more important to make sure the hull is strong rather than patch holes in the hull as and when they appear.

Of course, these are just my thoughts. Let me know what you think in the comments!


More money has been lost reaching for yield than at the point of a gun.” – Raymond DeVoe Jr.


So, I just watched this awesome documentary on Netflix called ‘The China Hustle‘ and it brings to mind some events that happened in our local stock markets some years back.

The China Hustle

The film is a documentary that follows how some investors in the U.S. got into the business of short-selling Chinese companies listed in the U.S. Basically, what they uncovered was that some Chinese companies listed on the U.S. stock exchanges were selling stories too good to be true.

The thing is that no investor can trust the financials for these companies because the numbers were all inflated in some way. What made things worse was that the investment banks, together with the auditors, bringing these companies to the market either didn’t or couldn’t do the due diligence on these firms but brought them to market anyway.

Stage two of the play saw the banks promote these stocks to clients and after having cashed out, the CEOs of the company in China, the banks who collected the fees for helping the companies list, and the brokers who sold investors the stock all made out nicely.

Stage three then saw the investors left holding on to stocks that were worth much less than they paid for them because the underlying business was then exposed as being worth many times less.

The film also interviews three investors who lost a lot of money from investing in those stocks and it’s quite painful to see retirees lose six-figure sums from what is essentially fraud.

I’m pretty sure the film also has its agenda and, therefore, takes that angle quite consistently so the thing to keep in mind is that not every Chinese company is going to turn out to be a fraud or that every banker out there is working against your best interest.

Getting educated about such things is one thing we can do to ensure that we don’t fall for schemes and scams that could ruin our lives.


S-Chips: The Singapore Version

Why did it bring to mind some things that happened in our local markets?

Well, first, the short-seller featured in the show who was purportedly the first one to expose a Chinese company is none other than Carson Block. Carson who? Block is the guy who runs Muddy Waters who basically wrote a damning piece on Olam way back in 2012. Of course, Olam turned out fine after Temasek took a stake in it and is definitely not in the same category as the Chinese companies featured in the show.

More importantly, Chinese companies listed in Singapore (called ‘S-chips’) have been a feature of our market for some years now and quite a few of them had their own accounting scandals brought to light after the Global Financial Crisis.*

There’s an anonymous account by someone who’s supposedly a former S-chip CEO that has been circulating on the internet since 2009 and it reads pretty much like the stories presented in ‘The China Hustle’. Go google and you’ll realise that it wasn’t just a problem confined to the U.S. or Singapore, the Australian and U.K. markets were similarly hit by such cases.

Of course, the China growth narrative has been played, some investors made money, and some lost big time.


People Never Learn

It’s crazy but if you’ve been investing the markets long enough, you’ll see certain patterns repeat over and over again.

One pattern is how speculators get FOMO and end up chasing the next growth story. In the early 2000s, it was tech, then housing. Then it was financials and China.

The last two years? It’s definitely been tech. People have been so open to putting money into technology (think crypto) that hasn’t any demonstratable proof of profitability. The venture capital space also seems to have no problems raising money and even in the publicly-traded space, which is usually where private investors find an exit for their holdings, investors have been quite happy to pay PE ratios of a few hundred for stocks like Amazon and Netflix.

When you see news like how Jeff Bezos is the richest person in the world and how Mark Zuckerberg is poised to overtake Warren Buffett in the richest people in the world standings, you know that’s where money has been flowing to.

I’m not saying that these businesses are not legitimate or that you’ll lose money investing in these companies. I’m also not saying that the stock prices of these companies are going to fall tomorrow.

What I’m saying is that when most people get too optimistic about something, that’s when I’d be careful about it.


*If you’re interested, Cynical Investor has a whole collection of posts on the troubles that S-chips have had in the past.




Photo by Pixabay on

In 2013, I wrote this piece ($100,000 before 30) that highlighted an article written in The Straits Times on how realistic it is for someone in Singapore to amass $100,000 before turning 30.

More than a few people in Singapore have already proven that $100,000 by 30 is more than possible (for example, see here). What I thought I’d explore is the possibility of that same person reaching $1,000,000 by 60.

Why 60? Because that’s slightly before the official retirement age in most countries. In fact, the official retirement age is probably going to be 67 or 70 for someone in my generation. However, most people feel that they don’t have enough money to retire on even after working for a lifetime.

I want to show that’s not true.

Of course, a million dollars will not be the same in 30 years as it is today but I think for many people, a million dollars is still a sum that seems unachievable even after a lifetime of work. We’ll also look at the scenario where purchasing power is retained.

Anyway, I want to look at the possibility of a 60-year-old obtaining $1,000,000 because  $1,000,000 for a 60-year-old is kind of the same mental block that $100,000 might be for a 30-year-old.

Starting assumptions

Using the numbers from the “$100,000 by 30” article, I’m assuming the following:

Starting sum at age 30: $122,919
Savings per year: $22,805
Years to compound: 30

The article assumed that the hypothetical person saves 50% of his/her income. For the sake of easy calculation and to be conservative, I’m going to assume that the amount of savings will not change. i.e. the hypothetical person continues to save only $22,805 per year from age 30-60.

Scenario 1: $1,000,000 by 60

Using a trusty financial calculator, I found that with the above assumptions, one only needs a rate of 1.24% p.a. to reach a million dollars by the age of 60.

1.24% per annum for the next 30 years.

Let that sink in. That is a seriously low bar to cross. As I write this, the 30-year Singapore government bond has a 2.88% yield. Assuming rates don’t change much, the latest issue of the Singapore Savings Bonds which everyone loves will also get you there if you keep your money in it for 10 years and repeat the process another two times.

Scenario 2: Retaining purchasing power

Of course, those worried about losing purchasing power to inflation will point out that $1,000,000 today is not the same as $1,000,000 thirty years later. Well, historically speaking, inflation has been roughly 2.5-3% per year. This means that our 1.24% p.a. needs to be something more like 3.74 – 4.24% p.a.

Scenario 3: Becoming an actual ‘millionaire’

In order to retain the purchasing power of a millionaire today, that rate of return needs to be higher. Assuming an inflation rate of 2.5% p.a., $1,000,000 today will be equivalent to about $2,097,567.58 in 30 years. In order to become the equivalent of a millionaire in 30 years time, our $100,000 by 30 person will need a rate of return of 5.12% p.a.

Keep Calm and Continue the Process

Of course, scenarios 2 and 3 are the goals we should be aiming for and that’s not going to be achieved with government bonds but neither is it an unrealistic rate of return. The $100,000 by 30 article assumed investing in a 60/40 stock/bond portfolio which should easily give us 5% p.a. It may not get you to scenario 3 but it won’t be far off.

My point is, for many people, being a millionaire seems like a pipe dream. It isn’t. Not in both nominal or real terms.

If you’re one of those that already hit $100,000 by 30, this post of mine is to provide some comfort to keep doing what you’ve been doing. What you’ve been doing is right, and you’ll be just fine. In fact, if you can bump up the savings rate or get higher returns, you can get there is fewer years.

Now, if you can’t even amass $100,000 before 30, then what are you waiting for?