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!

Advertisements

Travel For Lower Cost Than Low-Cost

Read a great article by Christopher Elliot today, titled Ridiculous or Not? Low-Cost Airlines That Cost More. It gave the example of how Southwest, one of the most popular low-cost airlines in America, sometimes has higher fares than full service carriers like US Airways. It gets away with this because it labels itself as a “low-cost” airline, so people generally make assumptions that it’s cheaper than the rest and don’t bother doing their research.

The lesson here is that we should always do our research, and never make assumptions. Full-service carriers regularly do promotions that can make themselves cheaper, or just slightly more expensive, than low-cost carriers. Some tips to get a cheaper fare:

1. Sign up for an airline / travel agent’s newsletter to get wind of new promotions

2. Travel during traditional lull periods – avoid peak seasons like summer or Christmas holidays

3. Research carriers that don’t have a strong presence in the country you’re flying from – they’re more likely to drop their fares to grab hold of more passengers since they don’t have a home ground advantage.

4. Book your ticket in advance. Seats go on sale as early as a year in advance, and that’s one of the cheapest times to buy. Prices generally climb when you get closer to the departure date.

5. Check the news for any big carriers operating into a country for the first time. It’s likely that the other carriers will drop their fares because of the increased competition.

Don’t Save For Retirement

It is close to midnight on December 29, 1972, and Eastern Air Lines Flight 401 is making its final approach to Miami International Airport. 163 passengers are onboard, most hoping to enjoy their new year in sunny Miami.

As it approaches the airport, the landing wheels are lowered and locked into position. At this point, the captain notices something amiss: the green light linked to the landing wheels has failed to light up. This could mean one of two things: Either the wheels have failed to lock into position, or the light is faulty. The pilots report the situation to Air Traffic Control, who orders the plane to circle back and try their descent again.

At this point, the pilot and co-pilot fixate on the light. They take it out of its fitting, blow on it to remove dust, and try to jam it back. Their conversation goes back and forth as they try to figure out what the fault is. They become so fixated on the light, that they fail to notice the 300-pound gorilla in their midst.

The gorilla, in this case, is the fact that their autopilot is disengaged and that they are rapidly losing altitude. They don’t notice that they are dropping rapidly because it is a moonless night and they can’t see the horizon. The altitude warning alarm rings through the cockpit and the altitude meter is dropping crazily, though neither pilot notices. They are too fixated on the light. Only when the aircraft is 7 seconds to impact, do the pilots realize that something is very wrong. They take evasive action, but it’s too late. The plane crashes, killing 101 people.

Crash investigators later found that the wheels had indeed locked into place – it was the light that was faulty. “The crash occurred due to the failure of a $12 piece of kit,” one journalist pointed out. However, the true cause of the crash was deeper than that – it was the pilots’ fixation on one particular problem, which blinded them from the true danger they were in.*

*story taken from Bounce by Matthew Syed

What other gorillas are you failing to see in your life?

Like the pilots who were overfocused on the green landing gear light, most people are fixated on one goal when it comes to personal finance: retirement. They believe that in order to retire, they need to hoard as much cash as possible, starting now. But they fail to realize the huge gorilla charging towards their bank accounts: inflation.

Two posts ago, I wrote about how inflation would slowly but surely destroy the buying power of your savings. If you’re young, letting your cash sit in your bank account (or in your fixed deposits / CPF / mattress) is like putting it in a nest of termites: it’ll eventually get eaten up.

So here’s my advice when it comes to inflation: Don’t save for retirement.

Say what?

Hear me out for a second. If you’re young and wild and free, there are other, more important things you should be focusing your attention on. Instead of saving up for “retirement” and getting a lot less bang for your buck, there are three more useful things you should be directing your money towards:

1.Save for assets

The best way to tackle the inflation gorilla is to put your money into assets that will grow faster than inflation: Stocks and real estate. Stocks are the most accessible because they don’t require a huge cash outlay, they’re easy to understand, and if you live in Singapore, they’re tax-free. Woot woot! Real estate is pretty nifty too, if you can afford the huge downpayment (or if you can’t afford the huge downpayment, you can also look into REITs – more on that later).

The biggest bonus of all is that if you plough your cash into assets that exceed inflation, you will, in fact, be prepping yourself for retirement.

2. Save for life chapters

Here, I’m talking about big, life chapters that you were planning on spending on regardless of what happens. I’m talking about your wedding, your first house, and your daughter’s upcoming college fees. If any of these are going to be happening within the next 10 years, then you should be saving up for them. Don’t act as if you didn’t know they were coming: If you know you’ll be getting married in 3 years, you should be saving up for your hypothetical $30,000 banquet and $15,000 ring… now.

A caveat: I’m not talking about cars, or vacations, or that new washing machine, that you “know” you’re going to spend on anyway. I’m talking about the big, necessary, life chapters here, people.

3. Save for emergencies

Sh*t happens. You’ll need cash to deal with it. If something bad happens, (like losing your job) the last thing you want is to be dipping into your investments to pay for your meals. If you don’t have an emergency fund of 3 months of income parked in an easily accessible bank account, then you should totally start saving up for one now.

In short…

Don’t bother saving for retirement – inflation will render your efforts futile. Other than cash set aside for emergencies and stuff you’re going to spend on within the next 10 years, everything else should be directed towards assets – Assets that keep pace with inflation. If an insurance agent / banker tries to sell you a fancy schmancy 50-year savings plan, run as fast as you can.

Don’t get too fixated on the wrong things. Just because personal finance “experts” tell you that you should be saving for retirement, doesn’t mean that you should be blindly stuffing cash into a bank account. Keep an eye out for the inflation gorilla in your midst, and take action to deal with it.

PS: the topic for this post came from a friend who replied to my previous post on spending money. To everyone reading this, keep the comments coming! They totally give me the inspiration for future blog posts.

As a young person, what do you think about the 3 ways you should be putting your money towards, instead of saving for retirement? Leave a comment, or drop me an email at cheerfulegg@gmail.com. Hope to hear from you soon 🙂

How I Save Hundreds of Dollars a Year On Books

Fun fact: It takes TWICE the amount of time for me to commute within Singapore from Yio Chu Kang to Changi (25km away) compared to someone commuting from New Jersey to Manhattan (67 km away). I know, it really defies the laws of Physics.

Anyways, I love the fact that it takes me 1.5 hours to get to work in the mornings because it gives me a long, uninterrupted stretch to read. Other than doing the gungnam style in the middle of a crowded subway and embarrassing my friends, reading is one of my favorite hobbies in the world. And it’s way better than playing angry birds or watching Korean dramas.

Another fun fact: Reading can make you rich. The average person reads one book a year, while the average millionaire reads two books a week (Though their reading lists probably consist of titles other than Harry Potter).

The only problem with reading? Physical, paper books are crazy expensive, especially in Singapore where book prices are marked up to ludicrous levels. Libraries help to get around this issue, but popular books are usually almost always loaned out, and it’s a pain to refer back to them once you’ve returned them. When I first started work, I used to go to Borders to browse through entire books over the course of several months. I know, I know, Borders is bankrupt because of people like me.

 E-Readers for Voracious Readers on a Budget

And then I discovered the Amazon Kindle. I wasn’t the first to jump on the Kindle bandwagon – I had my reservations about e-readers too – but buying a Kindle two years ago pretty much changed my life. Since then, I’ve quadrupled my reading from 1 book every 2 months to 2 books a month, spending an average of less than $8 on each of them.

Price

My Kindle has saved me hundreds of dollars on reading. Ebooks are way cheaper to produce than physical books – there are no printing, distribution and storage costs, so cost savings are passed on to consumers.

I did the math: A Kindle device costs between $69 – $139 USD, depending on which version you get. In 2 years, I’ve downloaded 49 books for an average price of $8. Assuming that I bought those same physical books for $25 retail at a bookstore (pretty conservative considering some books can go up to $50-$70), that works out to savings of $833 over 2 years. Amazon also regularly promotes good-quality books for free (yes, free!!) or for a nominal price like $0.99.

 Convenience

The Kindle weighs lighter than a paperback, and is even smaller in size. This, in addition to being helluva sexy, has the advantage of allowing you to bring your books everywhere.

The only time I really get to read is when I commute, so I like having my books with me all the time. This also allows me to devour a book bit by bit in those annoying pockets of time when I’m traveling short distances, like a 10-min bus ride.

Common Objections to Getting an E-Reader:

“But I really like the ‘feel’ of a real book”

Okay you’re not buying a G-string here, why are you feeling up your book for, you perv? E-Readers are more like real books than you think – they use a technology called E-Ink, which looks and reads just like real paper and doesn’t hurt your eyes when you read.

Besides, the “feel” of a book is overrated – After reading a Kindle for 2 years, I can honestly say that I don’t even miss physical books anymore. And is the enjoyment of turning a page really worth $400 a year?

“But I already have an iPad”

Zomg. Every time I hear someone say that, I feel like running into an Apple store, stripping myself naked and yelling, “YOU CAN’T COMPARE AN IPAD TO A KINDLE!!!!” The two devices are made for very different purposes: the iPad is made for media – videos, internet, games, and pictures, while the Kindle is made for reading. Period. You try reading the entire Lord of the Rings trilogy on an iPad with a backlit screen and tell me if you don’t go blind in the process.

So how do I get one?

If you’re in anywhere in the world besides Singapore most countries, getting a Kindle and downloading books from amazon.com should be pretty straightforward.

If you live in Singapore, getting and using a Kindle is a little more complicated, but it can be done. Jeffery’s blog provides excellent instructions on how Singaporean users can obtain one and download books (scroll down to the section on “How to get a Kindle in Singapore”)

Also, you could totally go with other e-readers besides the Kindle (Eg Barnes and Nobles’ Nook is a good choice), but I just picked Amazon because it has the best selection by far.

Happy Reading! 🙂

Taking A Break

In case you’re wondering, I haven’t disappeared off the face of this earth yet – I’m just on vacation on the West Coast of USA, and I didn’t have time to blog this before I left.

In the past 9 days, I’ve covered LA, Vegas, the Grand Canyon and Monterey; and I’m now on the final leg of my trip in San Francisco. Pretty much loving the Californian weather, the long drives, and the FOOD right now.

Will be back to my usual blogging routine in early September – In the meantime, here are a couple of interesting reads I’ve come across in the past couple of weeks:

1. The Big Lie About Engagement Rings – anyone thinking about proposing / getting proposed to should read this.

2. The Disciplined Pursuit of Less from the Harvard Business Review. Great article describing how we should be decluttering our lives – not just in the usual time-wasters, but also saying no to some terrific opportunities if we don’t absolutely want/need them. Kind of ties into my recent Revenge of the Ping post too.

3. How To Do Presentations That Don’t Induce Suicide – awesome presentation about… how to do a presentation

Till next week! 🙂