The 2012 Cheerfulegg Review

Credit: http://www.flickr.com/photos/joka2000/80198350/sizes/m/in/photostream/All the blogs in the world are reviewing 2012 at the moment. In summary, the world didn’t end, Obama got re-elected, the Euro crisis didn’t blow up, and most importantly, Singapore saw a record number of sex scandals. And they said Singaporeans don’t have enough sex.

So I thought it’d be a good time to do a little personal review of my own. I got this idea off Chris Guillebeau’s framework on annual reviews, which he cites as probably the best decision he’s made in terms of working towards multiple goals simultaneously (He’s probably one of the most successful bloggers around, so there’s definitely something going on there).

So this post is the first of a 2-part series on annual reviews. In this post, I’ll review 2012 and what it meant for cheerfulegg.com and for parts of my own life. I’m basing it off Chris’ methodology, and if you haven’t done a 2012 review of your own yet, I highly recommend that you give it a try.

It involves answering 2 questions:

  1. What went well this year?
  2. What didn’t go so well this year?

Yeah, I know it sounds like one of those corny-ass “After-Action Reviews” that your company is so fond of doing – I thought it was pretty lame when I first read it too. But after spending an entire day reflecting on it, I got pretty surprised by the results.

So – enough preamble.  Let’s get started.

What went well this year?

(Please don’t take this section as a bragfest. I try to be as objective and transparent as possible in any reflection and including both the good and bad stuff)

*I grew and developed cheerfulegg.com to a level that I’m pretty happy with for its one-year existence. It’s probably one of my proudest accomplishments of 2012. An idea of what this blog has managed to achieve in the past year:

  1. 71 new posts, to grand total of 77 posts since it started in Dec 2011.
  2. A post that got featured on WordPress’s Freshly Pressed section, generating a record 16,000+ views for that month, and 220+ WordPress followers.
  3. A brand new “cheerfulegg.com” domain name
  4. A cheerfulegg VIP list, which grew to 85 subscribers within a couple of months
  5. Being accepted on blog aggregators theFinance.sg and PaperBlog.com

* I developed, followed, and refined a personal finance system. Writing a book about it really helped because it forced me to solidify the ideas. It isn’t perfect yet, but it’s at a point where I’m about 80-90% satisfied. Will be sharing more of it in some publications that I’m working on.

  1. I apologize if some of you were confused by my previous posts about multiple saving and spending accounts, sometimes with different names and purposes, etc.  It was all part of a process of trying it out and making improvements to make the final version simpler and more effective for everyone. Sometimes I just had to write about it here in order to crystalize the idea.

* I successfully achieved my saving and investing goals, entirely thanks to a system of automation I set up to take care of everything.

* I introduced fixed income and Singapore asset classes into my portfolio, adding a further level of diversification. Contemplating if I should add gold in the coming year (Its historical real returns aren’t the best, but it might be a good diversifier. Check out this blog for more details. I’m still thinking about it though).

*The markets have also been pretty kind to my portfolio this year, which was really encouraging for my first full calendar year in sticking with a passive, indexed-based investment style, which has worked out pretty well thus far.

 What didn’t go so well this year?

* I severely underestimated the effort required to write a book. After spending the best part of August – November writing for three nights a week, I had a 82-page first draft, which was about 60% of my planned book. And I hated it.

It’s not terrible, but it certainly fell short of the vision I had for it as something fresh, engaging and different from the other “how to get your personal finances in order” books.  I’m still going to finish writing it, but I’m now humbled by the effort and the dedication a project like this requires. In the meantime, I’m headed back to the drawing board and I’m only going to ship it to you once I’m satisfied with it.

* I attempted to start some freelancing projects, which pretty much fell through because I couldn’t find an idea that suited me, or that I had enough time for.

* I got fatter this year. Fareals. A combination a dropping metabolic rate, a new job rotation that required me to sit at my desk for longer hours, and my focus on cheerfulegg.com and the book resulted in some serious weight gain. An exercise plan for 2013 is definitely in order. I also definitely didn’t sleep as much as I would have liked.

* I made a conscious decision to give up dance, at least for now, even though it was my entire life just 2 years back. I’ve been pursuing it as a passion for 12 years now, but I really  want to pursue new adventures with this blog and the book. With a full-time day job, it’s pretty much impossible to commit to writing AND dance at the same time after office hours. Still though, I get that twinge of longing whenever I watch YouTube videos.

 Possible goals for next year

I’ll talk more about these after I’ve finalized my plans for 2013, but 2 things that are definitely in the works are:

* Going back to the drawing board to redefine the book, interviewing people to really understand them and coming up with fresh, new ideas. Check out my room wall at the moment:

Ideation

* I now know that this is going be an ongoing process, and it might take several months or more than a year before I see some results. However, this isn’t going to stop me from shipping some stuff out for everyone who’s been waiting patiently for it.

* In the interim, I’m working on pushing out 2 mini-products in 2013 – which are a lot less complex, but still pretty damn awesome. Stay tuned for those 🙂

Happy 2013 everyone!

The Ultimate Guide on What To Do With Your Year-End Bonus

Credit: http://www.flickr.com/photos/muppethouse/341714428/sizes/m/in/photostream/So last week, I had surgery to remove TWO of my wisdom teeth – one on each side. Now, if you’ve ever had your wisdom teeth extracted, you’ll know that the operation is relatively painless, but the aftermath hurts like a b****. Seriously. Try stuffing 2 golf balls in your mouth and you’ll get an idea of what it’s like. Owtch.

On the bright side, it left me with a surprisingly long SEVEN-DAY medical leave from work (Though I spent the first half of it writhing in pain). Pain or no pain, a weeklong break from work is awesome. I caught up on my sleep, reorganized my room, and watched like 20 episodes of Modern Family (which is awesome btw, go watch it).

How to Handle Unexpected (Nice) Surprises

A weeklong break from work is a nice surprise, and so is the other great institution of a regular job: the year-end bonus (or “13-month bonus” as it’s commonly known in Singapore).

It feels pretty damn awesome to receive a year-end bonus, even though it’s not really a true “bonus” per se. So what are you going to do with your year-end bonus this year? Here are 5 possible options:

1. Spend it – What most consumer sheep will do. “Ooh extra money! Time to buy an iPad/massage chair/goat NOMNOMNOMNOM” (coupled with crazed look in their eyes)

2. Save it – What most people will do with the remainder after they’ve purchased said iPad/massage chair/goat. Be sure to take your shopping home in a cab – the possibility of upcoming bus fare increases might leave you with a remainder of maybe $4.70.

3. Sock it into a tax-sheltered SRS account – What very few people will do but could save you hundreds of dollars in taxes next year, depending on your tax rate.

4. Invest it – What old uncles will do (also with crazed looks in their eyes)

5. All of the above – what I think you should do.

Credit: http://www.flickr.com/photos/nicubunuphotos/5296305774/sizes/m/in/photostream/This is what your bonus will look like if SMRT increases its bus fares

The All Of The Above Option

There’s really no reason why you should limit yourself to one or two choices with your year-end bonus. Instead, see your bonus as a way to give a boost to everything that will improve your life. Here’s how I’m allocating my year-end bonus this year:

1. Spend 10% of it on whatever I want – In true L’Oreal wisdom: “Because I’m worth it.”

2. Save 45% of it by adding it to the house downpayment fund

3. Sock 45% of it into my SRS account. Ta-dahhh: instant tax savings!

4. Invest the amount in the SRS account in a portfolio of sensible index ETFs

The great thing about this formula is that it lets me resist the temptation of overspending, meets my dual objectives of saving and investing, AND it saves me money on taxes next year to boot. Awesomesauce.

Do It Now

Most people get really ambitious when it comes to planning their time and money. We plan to use our time to get through our to-do lists, and we plan to save and invest our money.

But our plans inadvertently break down once time and money unexpectedly fall into our laps. Instead, we’ll spend our medical leave watching Modern Family, and squander our year-end bonuses on iPads which will probably become obsolete in 6-9 months.

Don’t make the same mistake as the other consumer sheep. Make a decision on the percentage of your bonus that you’re going to spend/save/invest. Then transfer the amounts to the relevant accounts immediately. If you’re reading this outside, set a reminder to do this once you get home. And if you’re home, do it now. If you put this off till later, you’ll run the risk of it disappearing mysteriously. Seriously. Do it now.

Are you done?

Okay, now you can go reward yourself with a couple of episodes of Modern Family. 😉

Why I Love Making Fun of Credit Card Marketeers

So once I started working in the big wide corporate world, I’ve been getting a lot of calls from credit card telemarketeers. And since it’ll be a couple of months before Singapore establishes its own Do-Not-Call registry, I figured I might as well have fun with these unwelcome calls when I get them:

Marketeer: Good morning sir, how are you today? Would you be interested to know about this new credit card that we’re launching?

Me: Good morning! Could you tell me what the meaning of life is?

Marketeer: …. I’m sorry sir?

Me: I think the meaning of life is INSTANT NOODLES!!! LOVELY GOLDEN STRANDS OF COMFORT FOOD COOKED IN 3 MINUTES – GIVE ME SOME OF THAT MSG GOODNESS AHHHHH!!!!

Marketeer: ;

The reason why we absolutely freakin hate these marketing calls is because we don’t need another damn credit card. Most of us cant keep track of all of ’em as it is. Also, if you’re a dude, your wallet is probably already so fat with all sorts of crap that taking it out of your jeans pocket is like a freaking arm workout.

Previously, I blogged about setting up a system to pay your bills so you can optimize your credit score, and using cashback credit cards so you don’t have to spend 2 hours each month figuring out what to do with all your points. You’ve taken the brainwork out of most of the process, but now there’s a remaining fundamental question: how many credit card(s) should you own?

Too many choices

A cursory search on Google reveals that there are 105 credit cards you could use in Singapore. And that’s for our tiny li’ll population of 5 million people. My overseas friends reading this are probably faced with an even more mind boggling array of choices. And it doesn’t help that these damn marketing folks keep pushing new ones to us all the time.

There’s actually no right number of credit cards that you should have, but if I had to cough up a number, most people would probably do very well with just 2 – 4 cards. If you’re lazy and hate keeping track of your cards like me, you should be minimizing the number of credit cards you own. Why?

Why you should limit the number of credit cards you have

1. It helps you to take advantage of all the benefits they offer: I own three credit cards and I already have trouble remembering which places offer benefits for my cards. Most people would think that limiting the number of credit cards you own would limit your choices, but the opposite is often true – the more choices you’re faced with, the less likely you are to act on them. It’s counterintuitive, but limiting the number of cards you own makes it easier to stay on top of what you’re eligible for, making it more likely for you to realize your credit card benefits.

Also, concentrating all your spending on just one or two cards reaps way better rewards than spreading them out across many cards. Which customer do you think a card company is going to reward more – someone who spends $1,000 consistently every month on it, or someone who randomly spends $37.40 on it once in awhile?

2. It helps you to optimize your credit score: Credit Bureau Singapore tells us that if you don’t have a good repayment history, opening more lines of credit could actually hurt your credit score. Also, your credit rep is built though building a long track record of credit history – you’re better off using just a couple of credit cards for a long period than opening a whole bunch of new ones.

3. There’s a whole lot less admin to do: The more cards you have, the more admin you have to do. Anyone who’s ever had a pile of unopened bills, statements and brochures pile up on your desk will know what I’m talking about. Keep things simple – eliminate the administrative fat, and you’ll have a way better quality of life without that annoying niggling feeling at the back of your mind that you have to clear that growing pile of paper at some point.

4. You spend less: The concept of less cards = less temptation is easy to understand, but having less cards also makes it easier for you to circumvent one of the most insidious tricks credit card companies use to squeeze money off you: the annual fee. These fees are easily waived, but you actually have to spot them in your statement and call the credit card company before they’d actually waive it. And limiting the number of statements every month helps you to quickly spot those sneaky bastards from secretly charging your card when your fee is due (almost happened to me before!).

So to recap, you now know the essential ingredients to set up a sexy, low-maintenance credit card system to build your credit rep and puts you on the path toward living a rich life:

1. Set up automatic payments

2. Use cashback/rebate cards as much as possible, and

3. Limit the number of cards you own

I’ll be blogging next about how to put all of these together – stay tuned! 🙂