*Official* Shiny Things club - Part 2

[Maeda_Toshiie]

https://www.marketwatch.com/story/y...ink-you-can-retire-early-with-kids-2019-09-17

 

[jellyboy]

https://www.marketwatch.com/story/y...ink-you-can-retire-early-with-kids-2019-09-17

... i feel like punching the writer

Sent from Samsung SM-G955F using GAGT

 

[limster]

https://www.marketwatch.com/story/y...ink-you-can-retire-early-with-kids-2019-09-17

Our already onerous $1,620 a month health care premiums jumped to $1,765 a month after our son was born. I don’t know about you, but spending over $21,000 a year for health care premiums alone when none of us regularly need medical help seems kind of absurd.

wow, thats a lot for healthcare. maybe they have to subsidise those that overconsume medical services... oxycontin prescriptions are paid for by health insurance in US?

 

[Shiny Things]

https://www.marketwatch.com/story/y...ink-you-can-retire-early-with-kids-2019-09-17

... i feel like punching the writer

Sent from Samsung SM-G955F using GAGT

Oh mate I'm right there with you. This guy is obnoxious:

1) He's making "$200,000 a year" off investment assets. The dude is a multi-millionaire! He's gotta be worth about five million dollars, he has nothing to complain about.

2) He owns a house in San Francisco - a "relatively humble" 3-br 2000-sqft house, which probably means it's worth about three million.

3) He thinks he's somehow entitled to live in literally the most expensive city in America, if not the world, and he still thinks he shouldn't have to work. Everyone else in the world understands that they have to make a tradeoff between income and location.

This guy's a goddamn charlatan. Either get a job or move somewhere cheaper, it's not hard!

(Entirely separately, there's a few things in the article that make me think he's not a nice person! He blames San Francisco's lottery-schooling policy on "social engineering", which sounds like a code for something IF YOU GET WHAT I MEAN.)

 

[BBCWatcher]

Oh mate I'm right there with you. This guy is obnoxious....

I think it's about the clicks and the advertising. The New York Times is by now infamous for its "I can't get by on our US$400K/year income" stories, too. Advertisers like the higher income/wealth eyeballs.

I appreciate that practically everyone has financial stability fears, but if you're well within the top 1% you really ought to consider yourself fortunate as a baseline.

1) He's making "$200,000 a year" off investment assets. The dude is a multi-millionaire! He's gotta be worth about five million dollars, he has nothing to complain about.

Probably, unless he's a successful, professional gambler. There are a very few.

2) He owns a house in San Francisco - a "relatively humble" 3-br 2000-sqft house, which probably means it's worth about three million.

Yes, US$3 million or more.

3) He thinks he's somehow entitled to live in literally the most expensive city in America, if not the world, and he still thinks he shouldn't have to work.

Well, California is weird, mostly in a good way. Some parts often seem full of people who don't appear to be working much or at all. That can warp one's perspective. San Francisco has a very different vibe than, for example, Chicago.

Everyone else in the world understands that they have to make a tradeoff between income and location.

A few people don't have to make that tradeoff, and many of those few people happen to live in (parts of) California. And in Singapore for that matter.

Either get a job or move somewhere cheaper, it's not hard!

No, it's not. There are many fabulous places to live that aren't San Francisco, although that is a fabulous place to live, too.

What do you think the odds are that this author is spending some of his precious time fighting efforts to build more housing, including especially high-rise and mid-rise apartments (and without parking requirements), in San Francisco and nearby?

 

[Investnewbie82]

Hi, I've taken up STs approach for nearly a year. I generally agree with the approach but don't really treat it as the one and only bible. Just some observations as an "early" investor.

Long term investing has this inherent issue of not being able to check if we are on the right track. We continue to DCA every month being told its the right approach when we look back after 20 years. Even if it's wrong, there's no way to tell until 20 years later ? Even then, we will probably be told it's not long term enough, continue to hold another 10 years.

Similarly for value investing, when value investing is not doing well, they will say just wait, the runway is not long enough yet, the time will come. But we have to wonder with so many Buffett followers these days, is that game plan obsolete? And there's no way to tell cos it's always not long term enough.

Growth investing has the advantage of having some clearer(?) short-term targets. "When the price falls 8% you sell, take some profit when up 25%" etc.. But as they say, timing the market is hard etc.

For noob investors like me, we end up "diversifying" into the above, buying some of each while doing some indexing. Wonder if the experts here have any comments or advice/experience om how you overcome these thinking traps.

 

[limster]

Long term investing has this inherent issue of not being able to check if we are on the right track.

so short term investing, you are able to check if you are on the right track?

How exactly? you make one correct trade that makes money in 1 month, do you therefore assume you are on the right track and can repeat this every month all the way till retirement?

 

[Investnewbie82]

so short term investing, you are able to check if you are on the right track?

How exactly? you make one correct trade that makes money in 1 month, do you therefore assume you are on the right track and can repeat this every month all the way till retirement?

Hmm.. Not exactly short term , but like in the above scenario, we can make a series of trades. We can tell if the method works over a few years. If you overall make money after 3 years, I think you will be be likely to continue the method, if you lose money, obv you either change the approach or just give up. But at least you know it's wrong track. That's my thinking at least.

 

[FrostWurm]

Hmm.. Not exactly short term , but like in the above scenario, we can make a series of trades. We can tell if the method works over a few years. If you overall make money after 3 years, I think you will be be likely to continue the method, if you lose money, obv you either change the approach or just give up. But at least you know it's wrong track. That's my thinking at least.

Conditions are never static. The "right" method now (if there is even one) might not necessarily hold in the future.

Let's say you invested in growth stocks a few years back and made a lot of money up till now. A tech sell-off could unwind your gains and then perhaps make value a better proposition.

 

[happylcw]

I started DCA into IWDA since May.

At the same time I have a SRS account with some cash inside, my plan for SRS was to invest long term into Singapore blue chip stocks and bigger reits (Mapletree, Capital, Ascendas etc). However I cannot really find anything worth to invest at the moment since the reits have run up so high and some of the blue chips sadly have rather gloomy future (Telco, CDG, Keppel etc). Too bad I cannot buy IWDA using SRS.

Recently talked to a friend who uses fund in SRS to DCA into Lion Global Infinity Global Stock Index Fund. I read from Investment Moat blog before that this fund performed around 1% lower than the benchmark annually due to fund expense so I did not consider it. However, I find that it makes some sense if combining with SRS. Depending on individual tax bracket, normally people using SRS will hit at least 11.5% tax rate. The tax saving will more than compensate for the fund expense.

I am thinking for those who have SRS account, it seems better to use fund in SRS to buy Lion Global Infinity Global Stock Index Fund rather than use cash to buy IWDA.

Any comment?

 

[hwckhs]

Depending on individual tax bracket, normally people using SRS will hit at least 11.5% tax rate. The tax saving will more than compensate for the fund expense.

Tax saving of 11.5% is one off, but the under performance (due to higher expense ratio) is an annual rate. Any tax advantage will be defeated by the higher expense ratio eventually.

Let's make a simple calculation. You start with 1.115 (11.5% tax saving). Multiply it with 0.99 repeatedly (-1% under-performance every year). The tax advantage will be fully offset on the 11th year. From the 12th year onwards, buying IWDA with cash wins.

P/S: Thanks for bringing up this topic. I shelved the idea of using SRS due to its complexity. After some reading, I plan to make use of it to optimize my tax. I also need to read more on CPF hacks and see if it's something I need to make use of by the end of this tax year.

 

[Geeezz]

you do not need 20 yrs to find out you’re on track or not. about 5 yrs will do, if it’s not working fr 5 yrs, do you think you will still blindly dca? afterall you hv 5 yrs of “experience” in to find out what method is suitable fr u.

well unless you only blindly read one book and treat it as a god dam holy bible then what i said abv doesn’t apply to u

 

[limster]

you do not need 20 yrs to find out you’re on track or not. about 5 yrs will do, if it’s not working fr 5 yrs, do you think you will still blindly dca? afterall you hv 5 yrs of “experience” in to find out what method is suitable fr u.

well unless you only blindly read one book and treat it as a god dam holy bible then what i said abv doesn’t apply to u

if after 5 years, you discover that one method doesn't work for you, and you switch to another method, you have lost 5 years already which might mean your retirement is delayed 5 years.

And after you switch to another method, doesn't mean that method guaranteed to work, and if that method also doesn't work, then you lose another 5 years, and so on....

I use a core-satellite approach. target is for half my portfolio to be the core in ETFs, the other half stock picking. I use half my free cash flow for regular DCA, the other half of the free cash flow to either build warchest and wait for crash, or do individual stockpicks.

My retirement may not be as early as those who find the correct method and go 'all-in', but I feel my risk level is acceptable and I can sleep soundly at night. My dividend income already exceed my basic survival expenses, and working towards dividend=total expenses

 

[Geeezz]

if after 5 years, you discover that one method doesn't work for you, and you switch to another method, you have lost 5 years already which might mean your retirement is delayed 5 years.

And after you switch to another method, doesn't mean that method guaranteed to work, and if that method also doesn't work, then you lose another 5 years, and so on....

I use a core-satellite approach. target is for half my portfolio to be the core in ETFs, the other half stock picking. I use half my free cash flow for regular DCA, the other half of the free cash flow to either build warchest and wait for crash, or do individual stockpicks.

My retirement may not be as early as those who find the correct method and go 'all-in', but I feel my risk level is acceptable and I can sleep soundly at night. My dividend income already exceed my basic survival expenses, and working towards dividend=total expenses

i do not mean to say switch to a whole new method

 

[FrostWurm]

you do not need 20 yrs to find out you’re on track or not. about 5 yrs will do, if it’s not working fr 5 yrs, do you think you will still blindly dca? afterall you hv 5 yrs of “experience” in to find out what method is suitable fr u.

If your 5 years ended in 2008 you will feel like ****.

If your 5 years ended in 2017 you will feel like the smartest guy on earth.

Based on the above I can conclude that the second outcome and therefore method is better

 

[chickenessence]

Hi Shiny Thing,
Thanks for the reply.
But my limited knowledge just can't figure this out.
So let's say if one averaged USD-SGD for currency conversion to buy IWDA, 1 week later it become 1.000, How does the shares/IWDA changes offset this? (just example for discussion)

Obviously the concern is if USD-SGD drop in value..
No alternative to IWDA ETF which is in GBP?

Anyone can share their thoughts on this?

 

[ftpofmpo]

Anyone can share their thoughts on this?

your holdings are the shares, not the hard currency; gbp, usd are just what is used when you trade them; it doesn't matter; iwda can be traded in other currencies beside gbp

 

[Shiny Things]

I think it's about the clicks and the advertising. The New York Times is by now infamous for its "I can't get by on our US$400K/year income" stories, too. Advertisers like the higher income/wealth eyeballs.

Hate-clicks! SO MANY hate-clicks!

Probably, unless he's a successful, professional gambler. There are a very few.

Lol, he was an I-banker in the go-go 2000s. He just had to show up and bank his paychecks.

Yes, US$3 million or more.

Oh mate. I just went through the process of buying a house in the Bay Area (Peninsula, if you're wondering; the food here is bloody fantastic, sorry Singapore you've got competition). Don't remind me how bonkers the market is. 30-year fixed mortgages on a three handle are sensational though!

A few people don't have to make that tradeoff, and many of those few people happen to live in (parts of) California. And in Singapore for that matter.

Don't get me started on Atherton. Or Woodside. Or Hillsborough, which incidentally is a lovely bike route if you don't mind dodging Porsche Cayennes by the dozen.

What do you think the odds are that this author is spending some of his precious time fighting efforts to build more housing, including especially high-rise and mid-rise apartments (and without parking requirements), in San Francisco and nearby?

I absolutely guarantee you he's the worst kind of NIMBY. You've nailed it.

Long term investing has this inherent issue of not being able to check if we are on the right track. We continue to DCA every month being told its the right approach when we look back after 20 years.

You can at least be confident that you won't be wrong with this approach. Punting it all on pets.com, say, has a pretty high risk of being wrong; but tracking the market means you'll do as well as the rest of the economy does.

However, I find that it makes some sense if combining with SRS. Depending on individual tax bracket, normally people using SRS will hit at least 11.5% tax rate. The tax saving will more than compensate for the fund expense.

Er, what? The tax saving for an SRS investment applies no matter what you buy. Those Infinity Global funds are terrible; if you actually want US exposure, you can do a lot better.

Hi Shiny Thing,
Thanks for the reply.
But my limited knowledge just can't figure this out.
So let's say if one averaged USD-SGD for currency conversion to buy IWDA, 1 week later it become 1.000, How does the shares/IWDA changes offset this? (just example for discussion)

Sure. If the USD tanks, then the value of the shares within IWDA will increase in USD terms. If the US dollar drops by 10%, the value of the shares within IWDA will increase by 10%.

And really, even if a weakening currency did matter, would you really want to bet on the sterling right now? That's the

 

[assiak71]

Whats the long term return of equities nowadays? 7-8% in USD?

 

[happylcw]

Er, what? The tax saving for an SRS investment applies no matter what you buy. Those Infinity Global funds are terrible; if you actually want US exposure, you can do a lot better.

Hi Shiny, we cannot buy IWDA using SRS. Could you recommend the better way to get US exposure with SRS? Thank you.