Monthly Net-Worth Update - May 2020

Dear Readers,

Thank you for coming here.

It is the end of May. How time flies!

It is the 4th month for which I have zero income. Life goes on though. Hope things improve soon.

Below is the summary.

Net-Worth increase from last month: 0.4K SGD

We had a few major insurance bills this month and that offsets our gain in the stock market and my wife's salary.

Investment: 0.66% annualized return, incl. dividend 

We are in the positive again. Both World and China market is doing pretty well this month.

We did not have any capital injection this month.

Till the next time!

The best way to "Let Go"

Dear Readers,

Thank you for coming here.

I am sure many of us have read from somewhere, watched from somewhere and heard from somewhere that we should "let go" things, so that we can focus on the most important ones.

We have also met people who are achieved and at the same time relaxed, who seem to have everything under control. When asked, they tell you to let go and focus.

The problem is how and what to "Let Go".

To the extent of my understanding, there are two ways:

1. Pro-active: Really understand who we are and what we want. Then "Letting Go" will be

natural, because the action is essentially a choice.

2. Re-active: Wait for the required "changes" in our life and "Letting Go" will again be "natural". When those changes happen, we will, more often than not, be forced to let go certain things. That is probably not what we would want and probably we will experience discomfort or even pain, but the choice will seem and feel "natural" when we cannot afford not to let go, and in the end, it could be good for us too.

Either way, certain things are "Let Go" and our lives are shaped.

However, the first option seems obviously better. There, we focus on what matters to us and make the best use of our talents. There, we take the straight path and minimize the waste of our time and efforts. There, we experience less disruptions and are likely to reach higher mountains.

What if some of us cannot go for the first option?

That is me!

Sometimes, I hate myself for not being able to find out what I really am and want still yet.

Just to share a bit of my experience.

When I was on my previous job and had a lot of time to kill, I spent a lot of time trying to get the "unnecessary" details right, such as to transfer money one day before the Giro deduction, and to track the exact details of my stock transactions.

To me, that was important, because I believe I was doing everything I could to get my life under control and maximize the benefits. Even then, I knew I was spending too much time for the benefits, but I did not change or "Let Go".

Until the changes came to me.

I resigned from my job to go for a "better" one, which was retracted two weeks before my start date. After it became obvious that I could no longer stay at my previous company and it would be hard to find a comparable job outside, the "Let Go" happened so naturally that I did not even notice it.

I knew I could wait for a few more days to make the transfer. I knew I could be more accurate on the numbers. But I just was too lazy to do that. And sometimes, I even skipped it entirely.

Now, my life has returned to the new normal and still I do not want to get into the old habit again. Even if I try to force myself to, the voice against it would be so strong. I know I can spend the time in a better way. Sometimes, that better way is to do nothing at all.

Now, I am pretty confident that I have let go all those details. However, if not for those changes, I cannot imagine I would voluntarily let go.

These are just the details, "unnecessary" ones which I had knew. Still, I needed the "changes" to force me to let go.

Imagine much bigger things. Check out this one below:

1) Should I let go my desire to get a successful career and wealth to avoid the stress and the potential failure?

Or

2) Should I let go my desire for a comfortable life to try to get successful and rich, for me and my beloved family?

I should say "Yes" to 1) if I can be sure that I just want a normal life.

- I earn enough to support my family, but wont be able to help my sons much when they grow up

- I will have a lot of free time to do things I like and can afford or simply do nothing

- I will not have the opportunity to experience extra-ordinary food or views and so on

- etc etc

The problem? I cannot be sure.

Then I should say "Yes" to 2) if I can be sure that I am determined to embrace all the challenges along the way and go all out to pursue career advancement and wealth.

- I get a CXO level position and earn a big fat paycheck to provide a very good life for me and my family

- I will have connections that can help my sons when they grow up

- I will not have the time to enjoy myself or being with my family

- etc etc

The problem? I cannot be sure either (only about the part with the "challenges" of course).

So what now?

I choose to say "Yes" to 2). I will continue to say "Yes" to 2) until it feels "nature" to say "Yes" to 1).

Why? Because I want to have options when I am still not sure.

Choosing 1) will shut my doors to 2), while choosing 2) keeps me the option to go to 1). If you are insecure like me, you would also think about the possibility that choosing 1) will not get me 1), but somewhere worse because the world is filled with uncertainties.

This is of course not ideal, but to me, that is the best choice before I get completely sure about what I want.

And I believe this is also the best choice for most of us who are not entirely sure about who we are and what we want yet.

Before I formally recommend this option to you, however, I do want to sound the alarm about its potential drawback: this could keep you from really finding out who you are and what you want, because options make it feel less "drastic".

As always, decide for yourself.

Till next time!

How much money do you "Really" need to be completely "Financially Free"? Have you "Really" thought about it?

Dear Readers,

Thank you for coming here.

If we are asked how much money we need to be completely "Financially Free", I am sure many will say "a huge amount", like millions or billions or even an infinite amount. At least that was my answer until not long ago.

And that was a problem. That showed that I had not really thought about it and only had a very vague idea: I need a looooot of money.

What really got me into thinking about it was an article I read. That was an interesting article, in which the author split the population into 10 classes in China context. When describing the class with annual income 5-50 million RMB, the author stated (not exact words):

- Luxury was not an issue at all. Let's say you spend 10K RMB a day and that is only 3M a year. Do not think spending 10K every day is easy. Think about it, 10K, every day, pure consumption.

That clicked with me. It is not easy to spend 10K RMB or 2K SGD every day on pure consumption.

I recall my days as a consultant in the prestige firm. When I was serving a client in Toronto, my daily average spend was about 600-700CAD, aka 600-700SGD.

- Hotel: ~400CAD a day

- Meal: ~150CAD a day

- Transport: ~100CAD a day

This represents the highest daily average for me and that is only 30% of 2K SGD.

So there is actually an earning amount, exceeding which we will be free to enjoy "Luxury".

But what would be that "Amount"?

For me, I think 1K per day is enough for me. Of course, I need to consider my wife and kids. I think 2K should be enough. That would be equivalent to ~600K SGD a year. Double that, 1.2M sounds good to me.

For you, I can think of two ways to derive the "Amount".

1) Estimate a daily "hard to spend all" amount and basically do it in a similar way above

2) Look at your dreams. List them out, estimate the cost of each one, and sum it up. This will give you a lump sum amount you will need to fulfill your dreams. Divide that into each year, and add the "normal" annual spend, and then you will have the annual amount you need. Double that and there is your "Amount"

I am sure there are more ways to do this. But the logic behind is interesting: Once you are rich beyond a certain point or earn more than a certain figure, it would be hard to spend all your money.

Maybe that point seems far away. Stay at it and try our best. We will be there.

Till next time!

Ready!

Dear readers,

Thank you for coming here.

Thanks to the holidays, I have rested for 3.5 days. And now I finally feel I am ready to go back to the fight again.

The past 2.5 weeks have been tough with the project with challenging clients and team. Towards the end of the last week, right before the holidays, I felt burnt out.

Luckily, we turned around the project.

We made the hard decision to stop the project if the client's direction continued to shift after every meeting. Apparently, that spoke loud to the client.

The clients stopped asking for the moon and started to talk sense, and the teams could finally sit down and focus on what needed to be done realistically. We have made some progress during last week itself.

Even though the journey forward will still be tough, at least we know what we should do and how we can measure ourselves. Simply put, we feel we can add value now.

The other challenge is that I cannot be on-site like the rest of the team. So I have to accept that I will not be able to get the latest information from the client directly and will not be able to interact with clients as well as the rest of the team.

Therefore, I think I need to be mindful not to add communication cost to the team, which means I need to lay back sometimes and refrain from asking for information from the team all the time. How to lay back and at the same time still be actively contributing to the project is a huge challenge for me. I have not figured out a good way except for planning everything two steps ahead. That was also part of the reason for feeling burnt out last week. 

Luckily, my manager is following up very closely on this project as well. So with him on-site, I guess I can relax a bit for now, until I need to take over again. 


For this experience, my takeaway is two-fold.

1. Being able to make hard decisions is important and it yields respect

To the team, giving up a project that we spent weeks' hard work winning was not easy; to the firm, giving up a few million in revenue was not easy, especially in the current situation.

However, once that decision was made and communicated, the situation turned around instantaneously.

Maybe that earned us trust from the client: a team who is willing to leave money on the table because they do not think they can add value for their clients must be trust-worthy.

Maybe that earned us respect from the client: a team who will say no to their clients even though that means losing business deserves respect.

Maybe that simply made the client realize they needed us more than we needed them.
 

The outcome this time was that the client changed behavior and we got ourselves a proper project.

Though I doubt it will play out like this every time, making hard decisions is both important and necessary for leaders.

2. There is so much to improve on

I have been quite proud of my endurance and adaptability. I slowly realized either I was wrong all along or my endurance and adaptability started to deteriorate.

2.5 weeks or less was what it took me to start feeling burnt out. I always thought I could hold on for much longer.

If the aspect I have been proud of is not even good enough, let alone the other many aspects. The only way is to keep fighting and improving.

Today I worked for about 2 hours and spent another 2 hours clearing miscellany items that have been on my to-do list. So far, I feel ok. I feel I am ready to get back in the fight!



Till next time!

Monthly Net-Worth Update - Apr 2020

Dear Readers,

Thank you for coming here.

It is end of Apr, well beginning of May~. Actually, I updated my Net-Worth tracking sheet on 28th Apr. However, due to the tight schedule of the project I am currently on, I am only writing this post today. Apologies for the delay!

So lets get started. Again, below numbers are as of Apr 28th.

Net-Worth increase from last month: 21K SGD

The increase is due to stock market rebound in Apr and my wife's salary.

Compared to the drop (-56K) last month, we are still on our way to recovery.

Investment: -0.78% annualized return, incl. dividend 

Compared to last month (-3.76%), it is an improvement.

I emptied 2/3 of my limited war chest quickly during the beginning of the downturn, far from the bottom. I became very cautious about the remaining war chest. So when the bottom actually came, I was thinking maybe it would drop further. So I still have 1/3 of my war chest.

So I guess the strategy in the downturn is to set a target price and go all in after the target price is met. Again, the baseline should be DCA. If the average buying price is lower than DCA, I think one should be satisfied. I consider it the benefit we get by not entirely staying "Passive".

Of course, it is much harder done than said. I knew not to time the market from the very beginning of my investment journey, yet I am still trying to do it. And the benefit vs the time and emotional investment? Not sure...

I do not know what will happen next. With the ease of isolation measures, maybe the stock market will continue to recover. Maybe the fundamentals that can support this kind of market level are long gone and we will have another crash.

Whatever happens, life goes on. If you are in your early 30s or younger, I doubt this downturn will have any material impact to the overall financial success of your life. So relax and enjoy!

In the end, I would like to ask for a favor from my readers: can you recommend a good way to DCA? By good, I mean cheap and simple. I will choose what to DCA into and transfer money in just before the DCA date. And the platform or tool will DCA for me.

I knew the "Regular savings plan" staff from the banks, but they are too expensive to me. The robo-advisor is still too expensive and I am not sure about their selection of portfolio. What I am looking for is essentially IB+the DCA functionality, with the same rate. Haha, maybe that does not exist.

The reason why I am asking is as below:

• I more and more inclined to go all "Passive" with DCA to further reduce my time and emotional investment and to eliminate the opportunity for me to try to time the market all together
  
• I started feeling it a drag manually updating our Net-Worth tracking sheet. In my post "Basics 02: The tracker tool I built and am using", introducing the tracker, I actually said I kind of enjoyed updating it. I did. But with the new work, free time is much harder to find and updating the tracker has lost its attractiveness.

Thank you!

Wish us all all the best! Till the next time.