Thinking about retirement planning at 16???

I'll leave out the link to the news source to spare the embarrassment to that young financial planner who said he starting thinking of retirement planning at 16... That's not the intention of this post.

Of course he is talking his own book.

But that's not the way to sell financial planning...


I'll do something different this time. Instead of my usual poking, I'll put on my snake-oil skin back on and do something positive for you young snake-oil wannebes out there.



Financial planning is a vehicle; not a goal

When asked what you want to be when you grew up, hands up how many said you want to be financial planners? Insurance or property agents anyone?

No right?

You are in this line now for one reason and that reason only - to make lots of money!

Not entrepreneurial enough to start your own business, and studies not good enough to get yourself headhunted before you graduate, how else to make big money in double quick time?

Can you see the difference between what you want and how to get there?

Now you know why I cringe each time I hear some snake-oil sell retirement or financial planning as a goal... How newbie can you get?



Holes in our hearts

We all have holes in our hearts. That's euphemism for desires, wants, longings, cravings; etc.

Two ways to fill these holes:

a) To achieve

b) To escape

I was going to give examples but thought otherwise. You fill in the blanks yourself.

Just observe yourself, your peers, your parents, your relatives. See if you can spot who is living to achieve, who is living to escape.

Tip: Don't add value judgements; just observe.


Once you have unlocked this hole, your clients will practically "sell" themselves the products and services you are peddling.

Don't believe?

You and I both know child insurance is the dumbest insurance out there, but once you found a person with a childhood of "lack", they will convince themselves to provide for their children what they couldn't have when they were young...

Just the other day, I read one of the potential Finance Minister to be in a neighbouring country was found out to have "bought" his Phd from a degree mill. Same for some of the CEOs from our listed companies over here. Make a wild guess what's the hole in their hearts?

Our job as snake-oil is not to sell, but help others fill the holes in their hearts.

You think how scam artists work?



Be Jedi or Sith

However, I must caution if stay in this profession long enough, there will come a day where you can't look at your own reflection in the mirror...

Most will chose to be Jedi and do the "Robin Hood" thing. Like selling ILPs (Investment linked policies) to the rich and strong, while selling to the poor and weak term life insurance policies.

If not how to make a living?

Then there are those who have no qualms selling ILPs and other inappropriate products to the poor and weak. And the blackest of these Siths even do their snake oil thing inside places of worship...

"Jesus entered the temple courts and drove out all who were buying and selling there. He overturned the tables of the money changers and the benches of those selling doves."

Something for believers to think about.

What's the point of achieving your own financial freedom and then fxxx-up the end game by ending at the wrong side eternity?

Karma is a bitch!

Like my past never existed...

After making a comment at Frugal Daddy's blog, I all of sudden had a realisation.

If someone were to challenge me and verify my past, I would have a hard time proving my past existed!

My Hua Yi Primary School at Margaret Drive is gone.

So is my Gan Eng Seng School at Anson Road. Yes, its now relocated to Tiong Bahru, but when I visited it 2 years back to ask for a back copy of my 1983 yearbook, they don't have.

It felt like I never studied there... Lucky I still got my report book. Do our schools keep a record of their past students?

I also did some night classes at Stamford College. I think its a hotel now?

My first job was at Metro Orchard; its now replaced by DFS.

I also worked at Robinsons Centrepoint. Now replaced by Metro. The irony!

With IKEA, I had a wonderful time at the old grey and concrete Cable car tower. Now it's completely changed with blue glass and modernity!

My 1.5 years during National Service was at 9 RITC Taman Jurong Camp. Yup, gone again. Are there plans to relocate Nee Soon camp to make way for condos and HDB flats one day? If that day happens, there goes the final vestige of my NS... 

My current place at Tanglin Halt will be en-bloc and demolished in 5 years' time.... (Not that I am complaining!)

Glad the HDB blocks at Stirling Road where I grew up are still standing tall.

My maternal grandma's resting place at Mount Vernon is being "en-bloc" too.   

Now I finally understood why my mom felt lost when she goes to town once in a blue moon.

Hey yah ha!

We don't need to relocate or emigrate.

If we stay in Singapore long enough, we will find ourselves in a new country!

P.S.  Now I have a deeper understanding of the saying - no man steps into the same river twice...

Cut loss is not Stop loss

Before we start, this post is a direct answer to Sillyinvestor's Stop loss vs Cut loss post. 

It's supposed to be a comment to his question, but what he asked is the crux why so many retail traders and investors have problems making money, hence this post to do it justice.

1.  Stop orders

It's just a system platform order type to "automate" a buy or sell decision when the market moves to our predetermined entry or exit prices.

It's just a tool. Nothing more; nothing less.

Most retail traders and investors think a stop order is only an exit order - be it a stop loss (limit loss) or profit stop (protect profit).

A stop order can be an entry order too.

Let's assume STI is a stock. When STI is around 2600, you have no clue whether it will break 2500 or 2700 first.

A bull can enter a stop order to buy when STI breaks 2710; while a bear can place a stop order to sell at 2490 when the 2500 support gives way.

This way, they don't have to stare at their screens all day; especially when they have a full time job. 

No, not all full time traders are glued to their screens - those are intraday traders.

2.  Cut loss

This is an exit decision by a trader or investor to get out of a money losing position. 

Let's say the bid price is $1.00 and offer price is $1.01

This exit decision can result it the following execution order types:

a) A market order to sell on the bid at $1.00 (Get out quick!)

b) A limit order to sell at $1.01 (Trying to be cute to save on the spread)

c) A stop order to sell at $0.95 (That's your pain threshold but you don't sell immediately as you still harbour hopes for a reversal. It's a bit like the commercial where the gambler dad asks his little daughter for her piggy bank for one last try...)

3) When the reasons you bought are no longer valid

Sillyinvestor interpretation is:

"Cut loss, when fundamental has changed or your underlying assumptions made in the company has changed/ no longer valid."

You are only half right.

When fundamentals change, why does it have to be a "cut loss"?

It can be taking some money off the table (scaling out), or selling out completely at a profit too!

And sometimes, you don't need to wait till fundamentals to change.

Most readers have not understood my poke to failed traders masquerading as "value investors" - Here's a question to Value Investors.

Many know how to parrot buy when there's blood on the streets; how many practice the reverse as in selling into the euphoria?

4)  Protect your profits

All these discussions on cut loss versus stop loss is missing the point.

The main reason why most retail and amateur investors/traders don't make money is we don't protect our profits!

Think about it for a minute.

If we knew how to protect our profits, is cutting loss a problem anymore?

P.S.  Newer readers who have no clue what are the 3 Ms may want to go here:

The 3 Ms Part 2 - Money (episode 1 of 2)

What Will You Choose If You Could Go to School All Over Again?

1) Do you enjoy what you are doing now?

Why yes! I have the luxury to do what I like on weekdays - trading and investing full time in my little dungeon called home. And on weekends, I can take my day offs by working as weekend retail sales on the selling floor. Can rest my mind!

The bonus? I can let mom pamper me during the weekdays. Yup, I guess that makes me a momma's boy!

2) Is it related to what you studied in school? 

Can't say no can I? If we say the purpose of school is to teach us to read, speak, and count?

3) If you could be a student or apprentice all over again, what would you study or learn? Why?

If I had a chance to be a student all over again, I would join the school band and learn to play a musical instrument for free!

I joined the school band when I was in primary 3; I played the cornet. But I quit after one year. A decision I regretted. No, not the quitting part. I have no talent on the cornet. But I could have switched to drums or anything that does not involve "blowing".

Why? Life without music is life without soul.

I do make up for it by being a loud vocalist in my showers. The acoustics are great! Not sure my neighbours will agree though...

4) Do you have a university degree? Has it helped you in your career?

No, I'm not a graduate. I left school at 16 after my O' levels.

Can I say playing the corporate game with a handicap gave me a slight edge for I am leaner, hungrier, and cheaper?

Wait, that sounds familiar... Let's not go there. LOL!

5) What advice would you give to your 10-years-younger-self?

I'm now 49 years young going by my birth year.

A 39 young me? Hmm...

Look out! Mid-life crisis ahead! As if this isn't enough...There's male menopause too!

流浪到淡水 - We played the cards we were dealt to the best of our abilities!

A song dedication to temperament, myself, and all our brethren and sisters who were not exactly dealt with a good set of cards...

But hey! I would like to think we had more fun!

Especially the detours... Opps! I meant excursions. Wink.

Without the weight of expectations on our shoulders, our footsteps are lighter.

Cheers!




P.S.  To those of you just starting out, I was there. I know. 

If you don't like to climb mountains, don't have to follow others.

Rowing down the river is just as fun!

Find your own niche.

It takes time.

It took me at age 30 to find a diamond hole for a diamond peg like myself. That ended my gypsy life of constant job hopping. (For new readers, take a look at My Story tab at the top.)
 I was lucky.

It may take a lifetime for you.

The game only ends when we fold our cards.

Living is too interesting. Hang on as long as we can!

加油！

How many know how to spend well?

Frugality is a virtue.

Nothing to debate here.

I would call myself relatively frugal.

I think.

Maybe.

Eh... I hope so?

As we celebrate frugality in our community, I felt the art of spending money has gotten a bad rep, and unjustly so.

Look, frugality is more about will power and discipline. You don't need mastery, craftsmanship or competence to do it.

Would anyone pay $3,000 to attend a seminar or course on how to be frugal? If you do, you have other problems to worry about... namely the IQ part.

OK, if you don't have will power or self discipline, that's another story. Maybe some coaching sessions with a psychologist would help?

Foreplay done.

Now to the main event - spending!

Spend our way to financial freedom

Hands up anyone who had or seen the below experiences:

1)  Skimp and save money here and there for many years only to see them blown away by one untimely purchase of your property or equity investment.

2)  Skip meals to save money and then develop stomach ulcers. Or buy cheap shoes only to suffer back or foot injuries.

3)  Avoid social gathering at "atas" coffee shops because you rather freeload on your office's 3-in-1 coffee. Why pay when you can get coffee for free?

And you do silly math like if I save $6 per day by avoiding "atas" coffee, and multiply by 365 days and times 20 years, you feel "shiok" thinking of the "big" sum of money you would have saved!!! In 20 years time!? How's that for living in the future? (There must be a medical term for this kind of sickness)

Without the social glue in making people connections, you scratch your head as your peers start to move up the corporate ladder without you. You blame it on favouritism or nepotism. 

Some would call it networking.

In short, have we not found ourselves in situations where we suddenly get the epiphany that we have been penny wise but pound foolish?

None more so than in our journey towards financial freedom right?

In this journey, we would have discovered we are quite lousy at spending money.

We are forever envious of those who have a knack of spending money at the "right" time.

Spending money to get rich is not easy right?

It requires mastery of our craft - be it investing or trading. Very meritocratic. Those with competence and those with less will be poles apart in performance. Unless Lady Luck messes with us!

Self discipline helps here - especially in money management. But no amount of will power will make a difference - you can't chant "If I think I can, I can" your way to financial freedom. Or?

And what's the biggest irony of all?

We need to SPEND quite a lot of money to achieve financial freedom!

Less analysing; more investing (Stolen with pride from the fisherman CW)

The butterfly has written an excellent piece to illustrate the above concept.

I am a different person now.  

Yup. That's how you know whether you have gotten better at spending. Wink.

Only know how to earn; don't know how to spend

I met up with Andy from TACOMOB for brunch yesterday, and he mentioned the above phrase that I must steal with pride!

(My mind starts to veer into another direction) 

You know how we Singaporeans were brainwashed since young that to earn more, we must study hard and work hard?

OK, maybe NOT parents who are land owners. They won't do that to their children since that's not how they got to be land owners in the first place...

Look around.

Observe the land owners and shepherds that you have come into contact with.

There's a common red thread linking all of them isn't it?

They all know HOW to spend money well!   

P.S.   Something to think about on this wonderful day. See? Once STI broke 2700, its now above 2800 in just 2 days. OK, still early days as STI must close above 2800 for the week for this countertrend rally to have legs.