An Epiphany From First Class

First Class

One of the best perks of my job is that I get to pretend to be a rich person.

Well, not all the time of course. Like I definitely did not feel rich these past 2 weeks: Staying late in the office, eating at my desk, slaving over Excel sheets till I started dreaming of VLOOKUP commands, and feeling absolutely miserable.

So I got really happy when I got to take a break from it all to fly First Class to Beijing for a work trip. I sipped a glass of champagne, slid down into the overly spacious fine-grained leather seat, and stared out into the setting sun. “I could get used to this life.” I thought, as the flight attendant poured me another glass of champagne.

Being Rich – Gangnam Style

Fast forward to two days later, I was back in Singapore and pretending to be rich again. This time, I was at the Turf Club, entertaining 20 clients who were rich enough to fly First and Business Class on a regular basis and splurge copious amounts of money betting on horses.

I got talking to one of our guests. She was elegant, Irish, and wore a lovely dress with a tasteful set of pearls. Her husband was a Managing Director in an MNC. I could tell she was actually rich (ie: not one of those executives who gain elite status on their company’s money), because she ordered a Coke instead of alcohol. Classy.

We were watching the horses being led out to the track, when she lamented, “I would love to be rich enough to own one of those horses and not have to work so I could train them every day!”

I stared at her as if Justin Bieber had just crawled out of her nostrils. I thought to myself, “Lady – You get to savor the champagne-filled heaven that is First Class every couple of weeks! And you think that you’re not rich enough???

The Law of Relativity

And then it struck me: Being rich is RELATIVE.

That is, relative to who you compare yourself to. When I was a penniless college student, I used to get jealous of alumni who had real jobs and were earning thousands of dollars a month. Now that I was one of them and wallowing in my Excel-induced state of misery, I found myself getting jealous of people who were earning tens of thousands of dollars a month and flying First Class on a regular basis. But they in turn were feeling jealous of other people whom they thought were richer than them. It was mind-boggling, but it made sense.

The truth is, being rich is just a state of mind.

It really doesn’t matter how much money you make or how big your bank account is. I’m not saying that we should all just be happy in poverty – everyone should strive towards a life where they’re not worrying about making ends meet. But it’s a waste of time and energy to feel jealous of someone else’s (perceived) material fortunes.

Instead, I challenge you to start feeling rich right now. Think about how lucky you are to have higher education when there are millions of people who don’t even make it to high school. Think about how great it feels to have the security of a regular job, three meals a day, and a bed to sleep in while others are struggling to make ends meet.

I know it sounds corny, but we often don’t notice how rich we really are.

First Class

Yesterday, I took my family out to lunch. The restaurant was half-empty, served cheap Chinese food, and there were no leather seats with mahogany trimmings or unlimited quantities of champagne.

But the food was tasty, the company was excellent, and my dad was gleeful as hell because the opposition party had just won the Punggol East by-election. I leaned back, patted my Chinese food-filled tummy, and savored how wonderful life was.

So who needs to pretend to be rich? I don’t. 🙂

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Passive Investing: The Movie

Credit: http://www.flickr.com/photos/cheriejphotos/7158114527/sizes/m/in/photostream/It’s only 2 weeks into 2013 and I’m already swamped! These few weeks are absolutely packed for me, with work guzzling most of my brain fuel, and an upcoming work trip to Beijing. I’m also sticking with my 2013 goal schedule, as well as finding time to work on a free ebook (woot!) that will be making its way here soon, I promise!

So whenever life hits me with a gazillion things to do, I usually take things a little slower, kick back and do something chill like watch a movie. But because I’m a huge financial nerd, I get my kicks watching stuff like Passive Investing – an awesome 54-minute video on passive investing (duh) and why it rocks.

While there’re tons of books and articles written on the subject, I believe that this is the first time someone has made an entire documentary on it. The PF community has already been excitedly sharing it for a month or so now (yeah, I know, I’m a little late in the game.. my bad).

It features some of the biggest, badass (in a good way) names in the index investing industry, such as John Bogle, Kenneth French, William Sharpe, Burton Malkiel, and Rick Ferri. The production is pretty high quality, and there are summaries at the end of each chapter in case you get too distracted by the super strong British-newscaster accent.

So grab some popcorn, snuggle down on the couch, and enjoy 🙂

A caveat: While I agree with most of the concepts presented, I don’t fully agree with everything in the film. One of my biggest bugbears is their assertion that the Capital Asset Pricing Model (CAPM) is the “mathematical foundation of passive investing.” I won’t go into a snooty academic diatribe about the the flaws of CAPM here, but it suffices to say that you don’t need CAPM to hold in order to show that passive investing is still the best way to invest for most people.

Other than that though, the film is excellent. I also love how they display all the logos of actively managed funds throughout the film, subtly dissing the crap out of them without actually naming any names. It’s a little more subtle than my usual practice of pointing and loudly jeering at fund management ads displayed on the subway, causing people around me to move slowly away from me and whisper under their breath. I can only assume that they must be talking about how wise I am.

If you’re looking to learn a little bit more about passive investing but aren’t inclined to read a book, you could totally start here. It could be the most profitable 54 minutes you’ve ever spent. 🙂

Image credit: cheriej

How To Make Everyone Jealous of How Awesome You Are

Credit: http://www.flickr.com/photos/viccastelo/2582562265/sizes/m/in/photostream/So here’s the thing – I hate running in January. Nope, it’s got nothing to do with the weather – Singapore has only one climate all-year round: Hot and sweaty. Like the title of a porn movie. And it’s not because I don’t like exercising in general.

I hate running in January because there are way Too. Many. People.

Every time January 1st  rolls around, the track I usually frequent actually looks like a porn movie: filled with panting, sweaty people doing laps.

Most of these folks got up on January 1st and decided that they would change their lives just because the earth completed another orbit around the sun.

But like clockwork, the track gets pretty damn empty by the third week of January, leaving behind the same bunch of regulars. It’s like all the people who so spiritedly decided 2 weeks ago that they were “Gonna get a six pack!!!” suddenly got together and decided to go on strike. (Oh wait, it’s illegal to go on strike in Singapore…)

Resolutions are stupid.

Lots of people got up on the first day of 2013, got hit by a bolt of inspiration, and wrote down a bunch of resolutions: Get fitter, get richer, get promoted, be a better husband… etc etc.

Don’t get me wrong, I think it’s great that people want to improve themselves. I blog all year round about living a rich life, and part of that rich life involves us being happier, healthier, and more productive.

But the sad truth is, very few people who make resolutions actually manage to keep them. That’s how gyms make money: they sell year-long gym memberships to people who make resolutions to “get fitter”, and then never actually show up after January.

Why are we so bad at keeping our resolutions?

Because resolutions are simply codewords for “wishes”. We envision this ideal, perfect person that we’d like to be, and believe that if we could only visualize it hard enough, we’d become that person. But wishes never got anyone anywhere.

Goals, not resolutions

Screw resolutions. Very few people actually benefit from them anyway.

Instead, let’s talk about something way more effective; something which I hinted at in part 1 of this series on annual reviews. Let’s talk about goals.

Okay, I know, “goals, not resolutions” sounds like some management B.S they teach you at MBA programs. But hear me out for a second here. Here’s the difference between a resolution and a goal:

Resolution: Get fitter

Goal: Run at least 2.4km every Wednesday, do at least 100 crunches on Monday, Wednesday and Friday, and swim at least 40 laps on Saturday morning from 9-11 am. Track progress on weekly basis.

See the difference? A resolution is a wish. “I wish I was fitter.”

A goal is targeted, specific, and measurable. You either ran 2.4km or you didn’t. You either did 100 crunches or you didn’t. (nope, 99.5 doesn’t count either).

Goals hold you PERSONALLY responsible if you don’t complete them.

Resolution: Find a new programming job.

Goal: Get certified in C++ programming, schedule networking meetings with employees in software companies, source for 2 recommendations, apply to 2 jobs a month

It’s true that completing your goal may still mean that you don’t find another job. But who do you think is more likely to get hired: the guy who systematically works through his job hunt and networking checklist, or the guy who sits around thinking that he “should” start sending out resumes?

Most people don’t set goals for themselves. They prefer resolutions. Resolutions are easy, and resolutions won’t hold you accountable. But sadly, resolutions won’t help you move towards a rich life either.

But goals will.

How to set some kick-ass goals for 2013

Okay, let’s figure out how to set some awesome goals for 2013. I got this idea off Chris Gulliebeau’s blogpost on annual reviews, which I highly recommend to anyone who’s serious about doing anything awesome this year. You can read about his framework here, and download his goal-setting template here.

Essentially, good goals have 3 essential characteristics

  1. They focus on a specific behavior or action, not an outcome – So “focus more at work” isn’t a goal, but “sleep at least 7 hours a day” is.
  2. They have a deadline – I usually set a specific date (usually the end of a quarter) for mine
  3. They’re measurable – great goals have metrics that you can define and review regularly to determine if you’re succeeding.

So if you’ve already made the mistake of setting up some resolutions for yourself, do yourself a favor and turn them into goals instead. You’ll be more likely to complete them.

You can follow Chris’ framework on how to set your own goals, but in a nutshell, the steps are:

1. Define a few categories to split your goals into.

My categories this year are: Cheerfulegg, Health, Personal Finance, Career, Relationships, Spirituality and Learning. Some people, like Paula from Afford Anything find that having a long list of categories may cause them to lose focus. If that’s you, then feel free to limit it to just 2-3 categories. But I’ve personally found that it’s best to set goals for all aspects of life – striving towards one area while sacrificing the others has made me miserable in the past, so I’ve learnt that balance is usually the best formula.

2. While thinking of each category, think about 3-5 measurable goals for each.

For example, some of my goals under Cheerfulegg are:

  1. Create a free mini-product for loyal readers
  2. Convert cheerfulegg.com into a self-hosted domain
  3. Write book proposal and source for publishers

 3. Come up with a set of sub-actions 

This doesn’t have to be extremely detailed. For example, under the goal of “write a book proposal” I might include “ideate, organize, write first draft, share for feedback, edit, write second draft, etc”

4. Set a deadline for the completion of the project.

This should be a specific date. If you’re not sure, pick the end of a particular month.

 5. Finally, pick a set of metrics that you can use to track your progress.

For example, I might pick something like “number of pages written” or “number of peer reviews”

Dominate Your Goals In 2013

That’s it! If you think that this sounds like a helluva lot of work, well, it is. It took me a couple of days of reflection before I could come up with a list I was happy with, but it was definitely worth the effort.

Writing everything down will give you a clarity and focus that will be crucial to completing your goals, especially in the face of temptation. And hopefully, with a bit of luck, perseverance, and hard work, you’d be dominating your goals and kicking some ass in 2013. Good luck!

Image credit: kidgrifter