Tuesday 29 June 2021

Size Matters. Really!


When we hear that Norwegian billionaire has set aside USD $60 million into Bitcoins, what will be your reaction if you are crypto fan boys and girls?

But calmer folks may realise that this Bitcoin bet is just 1% of his net worth at USD $5 billion.

I mean Bitcoin can go to zero and its just a paper cut. 


Let's use SGD $100K as your opportunity fund since I see quite a few youths have goals of accumulating $100K before age 30.

And let's be generous by assuming you bought Bitcoins at USD $10,000.  

If you followed the Norwegian billionaire's risk management for your own position size, you would have invested SGD 1K in Bitcoins.

If Bitcoins hit USD $100K, it will be a 10 bagger! In percentages sexy! But in money...

Even if Bitcoins moonshot into a 100 bagger by hitting USD $1 million dollar selling price, will SGD $100K change your current lifestyle?

Good to have, but no right?

To make serious money in Bitcoins, you'll need to go full YOLO and all-in your SGD $100K opportunity fund right?

No diversification, no hedging. Its a show hand high conviction bet!

When people say the rich get richer, I think this is what they are implying.  

Context is important.

Now we swing to the opposite end of the pendulum.

Those people who cry O$P$ at Hong Lim Park to get their CPF out, make a guess. Would their CPF savings be a big part or tiny part of their total LIQUID net worth?

Must add this LIQUID adjective as most Singaporeans are not "poor" if we count the property we live in. I mean any HDB 3 room flat would be worth more than the current CPF Full Retirement Sum (FRS).

But asset rich cannot pay our bills or put food on the table if we have no savings outside of CPF...

Now contrast the above O$P$ crowd to those CPF fan boys and girls who can't wait to put more money into CPF, and to squeeze blood from stone for that extra 1.5% by abusing optimizing transfer from this CPF account to that account...

I mean is it worth it if your CPF is below the FRS sum? 

Would it not be more likely these CPF fan boys and girls are old fogeys mature adults who have made most of their money OUTSIDE of CPF?

The "rich" get "richer" for CPF? 

How's that for an inconvenient truth?

Nothing spells this truth out more than CPF Life.

I mean anyone who can count will know the "default" CPF Life payout plan "sucks". 

But if you desperately need that few extra dollars every month, you got no choice... The "default" plan it is.

For those of us who don't have to depend on CPF Life, we can afford to chose the other 2 plans that offer a better risk/reward trade. (Sorry, occupation hazard) 

I mean all 3 CPF Life plans are the "same" if we live to age 90 and beyond. 

However, if we go "up lorry" early, its ironic its those who have "no choice" are the ones who are subsidizing those who got options...

For those who want to further abuse optimize CPF Life payouts even more, delay our CPF Life payouts till age 70 and we can squeeze more blood from stone!

Hey! Let's all be CPF vampires!

The rich get richer...

Which is another way of saying, "Size matters!"

Friday 25 June 2021

Paying $1.3 million for 50 year lease?


Hee hee. 

Queenstown Stirling Road got quite a few of these HDB landed terrace houses too:

HDB terraced house in Whampoa sells for record $1.268 million

I grew up amongst them. 

There were a lot more in the old days along Stirling Road and near my former Hua Yi primary school at Margaret Drive. 

I can still recall there were unhappiness when they were enbloc by big daddy decades ago....

Most of us HDB flat dwellers would be ecstatic when kenna enbloc, but now you can appreciate if you were a former owner of these "rare" HDB landed terrace houses, how mad you must be feeling then!

Someone's loss is another person's gain.

The "lucky" owners of the current HDB terrace houses must thank big daddy for making their "rare" properties even "rarer"! 

Its 2 bites of the cherry!

First bite - Blur blur buy direct from SIT or HDB.

2nd bite - Eh? We are untouched? Heng ah!  (One of the rare examples where not chosen for enbloc is good, better, best!)

Would you pay $1.3 million (I not into precision in 3 decimal places) for a property with 50 year lease?

Straight off the bat I can see 2 groups of buyers that would be attracted to such properties. Never mind even if the lease is below 50 years.

1.  The private landed property empty nest downgraders.

Those couples in their 60 or 70s, retired, children overseas or they have their own private properties.

Sell their semi-D for $5 million and downgrade to HDB landed terrace. 

Smaller place, easier to upkeep and cheaper to maintain. HDB conservancy charge only $55 per month for that Whampoa landed terrace house!

If used to landed, another landed is "easier" transition than highrise condo or HDB. 

I mean "downgrading" is already "sad", don't have to make it "sadder" than it has to be...

Not afraid 50 years later the value of their landed HDB terrace goes to zero?


Children got their own private properties. (You know something has gone wrong if your children is eyeing your property)

Sold semi-D for $5 million. (You are not asset rich; cash poor)

Land owners think differently from peasants.

$1.3 million divide by 50 years divide by 12 months = $2,200 per month.

Average rent for HDB 5 room flat in Whampoa is around $2,800 per month.

This Whampoa terrace house is 210 sqm; average HDB 5 room flat is 110 sqm.


Bargain or what?

For those who are paying rent for their homes, or commercial properties for your business, how nice for the next 50 years, no landlord will come knocking on your door to increase the rent!!!

Now that's control!


2.  Those who aspire to be their own nano REIT manager

You have a successful career. 

Current property you staying is fully paid.

Your CPF has exceeded 1M65 long ago.  

You are in your early 50s.

You are planning for your retirement in your 60s.

Not working completely does not appeal to you. You were never into FIRE anyways.

Be your own boss after retirement by starting a business? 

No, you not gonna lie to yourself. If you were an entrepreneur, you would started your own business in your youth! 

Leaving money in CPF and depending on big daddy to take care of you sounds distasteful too. 

Those who are successful in their careers are shepherds; not sheep.

Being a nano REIT manager yourself is quite doable you say to yourself.

Buy this Whampoa terrace house by getting funds OUT of CPF before they are locked-up.

2 critical success factors:

a)  You are confident to rent out this Whampoa terrace house for more than $2,200 per month to make it an yield accretive investment. 

b)  The rental you get is more than what CPF can offer you.

If not, why bother?

Its not passive. Got to deal with tenants from hell... 

And then its not "bao jiak" as you can have months, even years where you can't rent out your property...

But hey! That's why its better!

Got something to do and keep our minds active after we retire!!!

First 10 years could be boring. No leverage since you paid in full with CPF. Still debt free. 

But once the collected rentals over the years are enough for the 20% down payment for a 2nd investment/rental property, you are now on your way to adding another property to your nano REIT!

Wash, rinse, and repeat.

If not, why do REIT investors pay management fees to REIT managers for? 

A property expiring "worthless" once its lease is up is never a problem. 

Provided you know how to milk the yield accretive cash flows to fund your next yield accretive purchase. 


Careful hor! Now leverage as in debt is employed. 

Then again, you now in your 60s and retired. FULL TIME active investing versus part-time or passive investing. Which is less risky?

Plus you have a DECADE of "trust but verify", toe in the water experience as your own nano REIT manager. 

Oh boy, you have a ton of your own "crash got sound" stories to share!

If you had depended on a real estate agent in your 50s, he/she would have sold you on buying 2 or 3 rental properties with your $1.3 million CPF!!!

See the difference?



Wednesday 23 June 2021

Dogs and Singaporeans?



Compared to this article: Cleanliness in Hawker Centres, my previous post Leaders and Followers has become a lot like softcore porn...

I poke with gloves on.

I mean sometimes when we criticize Mainland Chinese for spitting, littering, or even defecating on our streets, we may have to take a step back to see if its isn't a case of "50 steps laughing at 100 steps"...


Friday 18 June 2021

Never Lie To Yourself


Thursday 10 June 2021

Leaders and Followers


This happened a few years back.

I was having my fast food fix one afternoon, and a group of secondary school boys of five had just finished their meals.

Four of them just stood up and started walking off.

Only one student stayed back and started clearing the trays. 

Two other students saw what their friend did, started walking back to help him clear up the trays. 

Their expressions like how we walked out of our homes and forget our masks, "Shit I forgot!"

The other two students who walk out without clearing their trays, looked back and gave the three a look of disdain and continued walking out. 

Then the funny (or sad) part occurred.

One of the two students who went back to help clear their trays, decided to join the other two students who walked out when he saw they didn't come back to help out.

I can see the vacillations on his face.

Instinctively, he knew what's the "right thing" to do.

If not he would have continued walking out like the other two boys. 

I guess the need to "fit-in" with the other two boys has triumphed in the end. He quickly ran after the two who left. 

I just sat there sipping my coke as I watched those two boys who stayed behind, cleared all the trays - their own and their friends' ones. 

This happens a lot in our lives, doesn't it?




Saturday 5 June 2021

Italian Artist Sells "Invisible" Sculpture For £12,000!?


I kid you not!

Italian Artist Sells "Invisible Sculpture

Its a sign of the times, isn't it?

Is this the Emperor's clothes?

Would you dare to call it out as bullshit?

Or would you be afraid others may mock you for not understanding "Art"....

Willing buyer; willing seller.

All we need is a good storyteller (promoter).

And someone to swallow hook, line, and sinker.

Don't laugh.

Saw the news last night there's this urban myth spreading around drinking coconut water will lessen the side effects of Wuhan virus vaccinations...

If you uneducated got excuse. 

Even the Chinese medicine sinseh has to come out to say there's no scientific evidence for it.

But if you...

Ever wonder what's you edge in investing/trading?

Well, there's your clue!

Tuesday 1 June 2021

The Parable of Talents and Minas

Non-people of the Cross, if you had not heard of these 2 parables, you may want to google and check them out.

Quite interesting. 

Especially if you've always wanted to know, "Why must invest huh? Isn't savings enough?"

But no worries. 

Since you have no skin in the game, there's no pressure!

However, if you are people of the Cross, save your explanations and excuses with the guy upstairs.

That's between you and him. 

Good luck!

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