How to Kick Ass This Christmas

Credit: http://www.flickr.com/photos/gimmeahug/4209857179/sizes/m/in/photostream/There’s a scene in Jurassic Park (which is my all-time favorite movie btw, sooo awesome) where the owner of the park, John Hammond, gives a tour of the velociraptor pen to a bunch of visitors. You don’t actually get to see the raptors – they’re hidden by thick foliage – but you do see a poor cow, strapped to a harness, slowly being lowered into the pen.

And then you see the thick foliage shaking vigorously, and hear the distressed cries of the dying cow over the unearthly shrieks of the raptors and watch the horrified looks of the visitors, and then… silence. The harness is extracted from the pen and you realize that it’s reduced to tattered little pieces of cloth.

Jurassic Mall

That’s kind of like what the mall was like yesterday. I went down to Raffles City to meet a friend for dinner, and for a moment I thought I was in the wrong place because it literally looked like feeding time at Jurassic Park. First, the place looked like it got hit by a meteor. There was stuff everywhere, and hordes of panicked crowds running around. Ryan from MoneySmart tells us that this is actually a devious psychological tactic to get us to buy more. (“Messy” is usually associated with “cheap”, even though the actual price will probably be your first-born child)

Then there were all these macho dudes all wandering into jewelry and bag shops looking slightly dazed, trying to figure out what to get for their girlfriends. One by one, they were picked off by sly-looking salespeople circling them like sharks before convincing them to buy another overpriced bag/necklace/diamond ring.

And there were the ubiquitous Christmas carols like, everywhere. Now don’t get me wrong – I love carols – but it gets really trying when you hear a pseudo-jazz band butcher Jingle Bell Rock for the 273rd time. Nobody else seemed to mind because they were too busy climbing over each other to claw their way to the sale rack at Robinson’s. They made the Jurassic Park velociraptors look like a bunch of fluffy little bunnies.

Have Yourself a Merry Overconsumerist Christmas

Christmas used to be awesome, dude. It used to be so full of anticipation and magic and laughter and joy. But those damn malls crept into the place where they store the Christmas love and decided to destroy the crap out of it. They taught us that we don’t need love and joy during Christmas; what we need is an iPad so we can play Angry Birds on a wide screen at home instead of spending time with our families.

The problem, as blogger Johnny B Truant points out, is that Christmas has become about forced consumerism, where we kid each other into buying things that none of us would normally bother to get for ourselves. Like I shower all year round with a $10 bottle of shower gel, I don’t actually need that $70 Body Shop gift pack consisting of Shea Shower Cream, Body Scrub and Beautifying Oil, topped off with an Ultra Fine Lily (what the heck is an “Ultra Fine Lily” anyway?).

And then I’ve got to reciprocate and risk my life battling the Jungles of Orchard Road to get you an ugly tie that you will probably never wear, except maybe at your funeral.

The Best Things In Life Are Free

But dude, I hear you say, it’s the thought that counts.

But as Truant mentions in the same blogpost, if it’s the thought that’s so important, why do we have to spend a whole bunch of money to buy stuff? That isn’t thinking, it’s buying.

The stuff that I love most comes really cheap, or absolutely free. Like lunch with good company (we can split the bill). Or watching old movies in bed. Or playing Taboo while drinking cheap beer and eating Red Rock Deli chips. Or a chillaxed Saturday morning run. Or a $4 iPhone case. Or helping to repost or retweet my blogposts if you’ve found them useful. 🙂

Love from friends and family, comfort food, and the satisfaction of knowing I’ve helped you out in some tiny way. That’s really all I need, and it wouldn’t change even if I had a million bucks.

How to Celebrate Christmas, FaReals

1. Let’s forget the malls and the stores this year, and the obligatory Secret Santa game where everyone gets weird generic gifts. Instead, use the money and throw your family/friends an awesome dinner party, a potluck, or a games night (copious amounts of alcohol optional, but definitely recommended).

2. Do something that you’ve never done before. My girlfriend couldn’t think of anything she wanted this year, so I’m offering to cook her dinner (which is a helluva big deal to me because I never cook. Hey, stop judging, I gotta start somewhere.)

Okay that’s just the basic – I’m sure some of you are already awesome like that. But if you really want to step it up this year…

1. Talk to your friends and family, or send out an email or a Facebook post. Tell them not to give you any gifts, but instead donate they money they would have spent to a cause you support like Project: Flight. (Started by fellow Penn alum Albert Pak!)

2. Do something awesome and make it fun. Today, I heard about a kid who spent $600 bucks buying ice cream for foreign workers in Singapore who might be spending Christmas away from their families. And how awesome is it to be Ice Cream-Giving Santa Dude for a day?

Your awesome project doesn’t even have to involve moolah – you could do something entirely silly like Improv Everywhere’s High Five Escalator. It’s not going to change the world, but at least you’ll be giving people a little sliver of happiness, which is what Christmas is really all about. 🙂

Think about it, and go DO it. Merry Christmas everyone!

Why You Should Never Be Jealous

Credit: http://www.flickr.com/photos/brennuskrux/3356833255/sizes/m/in/photostream/Hola! So sorry for being MIA for the past couple of weeks. It’s the usual November workplace crunch, and I’ve been occupied with a ton of work including, among other things, emceeing my company’s World Marketing Conference – a glitzy 2-day event attended by senior management and hundreds of overseas sales and marketing staff. Here’s what was running through my mind right before the event started:

Emcee-ing W.M.C

I’m standing in the middle of the stage, microphone clasped in my sweaty palms, bright spotlights training on me like police searchlights on a trapped prisoner. In front of me sits a sea of hundreds of business-suited men and women, murmuring in anticipation. My CEO in the front row looks expectantly at me and frowns.

I’m nervous because I’ve never emceed a formal event before, let alone one as huge of a scale as this. Backstage, I silently pray that my scripted jokes wouldn’t be met with stony silence. One screw-up, one waver in my voice, could affect my reputation for years to come. It’s like freakin’ high school all over again.

But then again, no one knows better. Just by looking at me, no one can tell that the only emceeing experience I’ve ever had is hosting my baby cousin’s birthday party. And so I get a stunning revelation:

Just fake it.

I take a deep breath, smile my biggest smile, and start talking. The delivery goes well. My colleagues congratulate me afterwards. No one could tell I was nervous as hell. One of the big bosses slaps me on my shoulder and tells me to get ready for more emceeing gigs. I may not ever be as good as a professional, but I can totally fake a performance that’s good enough.

How Do They Afford All This?

My successful attempt at faking got me thinking about how everyone goes through life wearing masks and faking something.

Whenever I hit the clubs, I can’t help but observe the dudes sitting at the VIP tables. They’d be surrounded by other rich-looking, beautiful people, as if they just stepped out of a Like A G6 music video. Just like me, they’d probably be dressed in a casual shirt and jeans, but their shirts are $400 apiece from Armani and mine are $40 from the sale rack at Uniqlo. They’d be downing champagne by the bottle, while I’d be chilling with my bottle of Tiger Beer. Once the night is over, they’d be driving home in their Porches or Maseratis, while I’d be stumbling to find a cab (or a Night Rider bus if I’m not too tipsy).

For a brief moment, I’d think to myself: “How do they afford all this?” I’d start to wonder what they do for a living, and how awesome it must be to be them.

Wealth – The Easiest Thing To Fake

And then I remind myself that I’m simply jumping to conclusions. What if they’re faking it, just like how I was faking my prowess as an emcee? After all, wealth is the easiest thing to fake. Blow a couple of months’ salary on clothes and drinks, and anyone can look like a superstar.

The truth is, I don’t know anything about them. I don’t know if they’re prudent in their spending, or if they spend every cent they earn. I don’t know if they earn thousands of dollars in passive income, or if they lie awake worrying about how they’ll keep up their lifestyles. I don’t know if they have a rock solid portfolio, or if they’re so deeply in debt that even their enormous paychecks can’t make a dent in their credit card bills.

Redirecting the Moolah

And then I remind myself about just how much I’ve been pouring into my savings and investments, month after month, without fail. No wonder I haven’t bought a new pair of jeans in 4 years – I’ve been too busy shoveling cash into index ETFs and building up a downpayment fund so I don’t have to take on too much mortgage debt.

No wonder I can’t afford to celebrate the end of the year with five bottles of champagne, because I’d much rather set aside a few hundred dollars every month for travel, funding trips like my $3,500 West Coast vacation. It’s not that I can’t afford to spend on nice clothes and drinks, I just choose to put my money towards things that I value much more: freedom and experiences.

Lots of people fake their wealth. But without looking at their audited personal financial statements, there’s really no way to tell if they’re the real deal, or if it’s just a well-polished illusion. We simply can’t make assumptions just by looking at people.

So keep that in mind the next time you watch an emcee on stage, or catch yourself getting jealous of that well-dressed dude at the VIP table. They might just be faking it. 😉

The Great Index Unit Trust Hoax

Whenever I check into a hotel, I get really fascinated by just how crazy expensive some of the items in the minibar are.

One time when I was on vacation, I felt a little hungry so I lumbered over to the minibar and pulled out a pack of cashew nuts – just the regular kind you’d find at any convenience store. Just to be safe, I checked the prices before I tore the pack open, and involuntarily yelled: “NINE DOLLARS FOR A PACK OF TWELVE NUTS?! ARE YOU OUT OF YOUR FRICKIN’ MIND???”

It’s absolutely crazy how people are perfectly willing to pay several times the price for the EXACT SAME PRODUCT – a product that they could have gotten much cheaper elsewhere. We see this everywhere: a Nike sneaker vs a non-branded one, Tropicana orange juice vs a house brand, and beer that costs $12 in a restaurant and $2.50 in the supermarket.

A pack of nuts from the minibar might do a little damage to your wallet, but it’s nothing compared to the damage a unit trust (also known as a mutual fund for my American friends) could do to your long-term wealth.

Costs Matter

I’m not even going to discuss actively managed unit trusts with their high management costs. Nobody takes those seriously anymore – There’s more than enough research that shows that as a whole, actively managed unit trusts are a terrible choice compared to index funds.  Check out here and here.

Today, I’ll just uncover a pricing anomaly I like to call The Great Index Unit Trust Hoax, which involves 2 unit trusts being sold to Singaporean investors. Both charge exorbitant amounts to essentially help you invest in portfolios that you could have easily put together yourself… at a fraction of the cost.

To Infinity… and Beyond!

Exhibit A is the Infinity US 500 Stock Index Fund, which is supposed to help you track the return of the S&P 500. To accomplish this, it hits you with a whopping 0.98% expense ratio.  Now 0.98% may not sound like too much of a big deal, but try compounding that over 30 years and you’re talking about a difference of tens of thousands of dollars of extra cash that’s coming out of your pocket.

But hold on – there’s another, cheaper way for you to track the return of the S&P 500 on your own. You could buy an ETF from Vanguard, which gives you the EXACT SAME RETURN, while charging a mere 0.05% expense ratio. This makes the Infinity unit trust almost 20 TIMES MORE EXPENSIVE than the Vanguard ETF. Yeah, I know.

Home Sweet Home… For 4x The Price

Okay, I hear you say, so maybe that’s a problem unique to the USA.

Oh wait, it’s not.

Presenting Exhibit B, the patriotically-named unit trust MyHome Fund run by Singaporean asset management company Nikko AM. It invests in 1) an ETF tracking the Straits Times Index and 2) the ABF Singapore Bond Index Fund ETF. They’ll charge you a ridiculous expense ratio of 1.2% for all their hard work.

But wait! Did you know that you could totally log onto your online brokerage and invest in 2 ETFs which track the EXACT SAME THING for a fraction of the cost? Namely:

1. SPDR Straits Times Index ETF (SGX Ticker: ES3) – Expense ratio: 0.30%

2. ABF Singapore Bond Index Fund ETF (SGX Ticker: A35) – Management fee + trustee fee: 0.20% (I couldn’t find an exact figure for the total expense ratio on their website – those sneaky bastards – but it shouldn’t  be too far away from the sum of these 2 fees).

Total weighted expense ratio: 0.28%

Ta-daahh! You’ve constructed the exact same product, at a quarter of the cost. And that’s not taking into account sales charges, redemption charges, front-end charges, admin charges, and hire-an-attractive-banker-to-convince-you-to-part-with-your-money charges.

Do Yourself a Favor

My point here is to always, always, read the fine print. The finance industry loves to play down details like these because it means higher commissions for them – commissions that come right out of your pocket.

If you plan on investing passively, do yourself a favor and skip out on the unit trusts. You’re way better off buying the equivalent ETFs instead. Of course, there are a few disadvantages in buying ETFs (eg brokerage commissions, currency exposure, inability to invest in small amounts), but they can be easily circumvented (eg investing regularly using no-minimum commission brokers,  or in the case of the STI ETF, setting aside an amount every month until you can afford one lot). None of the disadvantages of ETFs justifies the tens of thousands of dollars you’re giving up in expenses if you invest in unit trusts.

It would be totally awesome if a reputable fund provider like Vanguard would set up an index fund in Singapore (are you reading this, John Bogle?), which would eliminate all the disadvantages in the para above, and yet charge a reasonable expense ratio that doesn’t require us to give up our first-born child.

In the meantime, stay smart and read the fine print. Save your money for those overpriced cashew nuts from the minibar. At least they’re tasty.

Help Me Pick My Title (And More)

So everyone I meet these days has been asking me how my book writing’s been going. So I’d just like to let everyone know right now that it’s been friggin’ awesome.

I blame peer pressure. It started out as a spur-of-the-moment declaration at an Awesome Anonymous meeting to write a small, simple ebook. It has since grown into plans for a full-fledged, analogy packed, complete guide that aims to change people’s lives (or at the very least, get their finances sorted out so they can focus on changing their own lives and the lives of others).

I’m so psyched that I’ve spent at least 3 nights a week working on the book for the past 3 months or so. I’ll blog more on my progress in the weeks/months to come, but first, I’ll need your help to help me decide on 3 things: The title, the subtitle, and the pitch.

I came up with these after going through the results from the recent survey, but I would love to hear your thoughts. Do they stand out for you and make you want to read more? Do they sound as scammy as “How to Get Rich By Becoming Wealthy Making Big Money in Real Estate”? If you saw the title in a bookstore, would you pick it up and/or buy it?

I’ve been blogging free financial advice for close to a year now, and I hope that I’ve helped you out at least a tiny bit in your personal finances. So I’d be super duper grateful if you could take 5 minutes to help me out too. 🙂

This is really important to me, so be brutally honest. Let me know if this is awesome, or if you have a totally different idea on how I should approach this. Leave a comment, or you can email me at cheerfulegg@gmail.com.

Ok, Let’s do this:

The Title

I’d like the title to be something eye-catching and different from the other sleazy investment books out there. I couldn’t really think of a better title other than the subcaption of my blog: Hatch a Rich Life. The word “hatch” is meant to speak to people who’re just starting out in their personal finances, while “rich life” is the eventual goal.

The Subtitle

I’ve got three options for the stuff that’s supposed to go with the main title. I.e:

Hatch a Rich Life: _____;________

Deciding on the subtitle might help if you take a look at the pitch first to get an idea of what the book is about (scroll down). And yes, I know that I use the word “sexy” and “awesome” a lot. I just wanted to convey that the book is targeted at an audience who’s a little cooler than crabby 50-year old men who spend all their time quibbling about “call options” and “stock warrants”. Not that I have anything against 50-year old men..

Subtitle 1. Build A Simple, Sexy, Self-Run Personal Finance System in 5 Weeks

Subtitle 2. A Personal Finance System For Young Sexy Singaporeans

Subtitle 3. A Simple, Sexy, Self-Run Personal Finance System for Young Singaporeans

Pitch

Think of this as what you’d read on the inside flap of the book. I’ll be using this to tell people what the book is about, and why it’ll be awesome for them.

Imagine waking up on a sunny Saturday morning to find that your robot slaves have been working hard for you while you slept. They’ve built up your savings account, paid off your credit card bills, saved you money in taxes, and invested your money into your early retirement portfolio, all without you lifting a finger. With your system taking care of all that boring “financey” stuff, you can now focus on taking over the world, cooking breakfast for mum and dad or… going back to sleep. Life is good.

Forget arbitrary financial advice and random stock tips. Hatch a Rich Life is a 5-week program to master your money and turn your financial life into a system – a simple, low-maintenance system that will put you way ahead of your friends on the path to a rich life.

I’ll cover the surprising truth on why most young Singaporeans are getting poorer every day. I’ll reveal exactly what you should save for and the most effective way to do it. You’ll discover the freedom of spending on the things you love without feeling guilty. You’ll learn how to dominate Wall Street professionals when it comes to investing. And finally, you’ll learn how to integrate everything into a set of autopilot systems that won’t take more than 15 minutes a year to maintain – leaving you time to focus on living an awesome, rich, life.

That’s It For Now!

Okay, that’s pretty much it for now. Again, please be brutally honest and let me know if this is something that speaks to you. Is this what you’d like to read about? Leave me a comment / email me. I’d love to hear from you 🙂

The First Mention of My Top-Secret Project

So I might as well be upfront about it right now: I’m writing a personal finance guide for young Singaporeans.

I honestly have no idea on how it’s gonna turn out, or how long it’s gonna take to write. But the pre-research I’ve done for the past couple of weeks from various interviews has given me some very positive results, so I’m super psyched about this project!

Before I go any further, I’d like to really understand what’s important to my potential readers. So if you’re a young Singaporean (21-35 years old) with a full-time job, or if you’re about to start working, I’d love to hear from you via this really short survey. It should take you less than 5 minutes to complete, but it would help me tremendously.

A Bonus for Your Efforts

Now, I know that most surveys are annoying to fill. So to show my appreciation, I’m creating a free gift that might be useful to you. Remember how I’m always preaching about opening a Long-Term Savings account? You’ll want this account to have as high of an interest rate as possible – because that’s where the bulk of your savings will go.

The trouble is, it can be a pain in the ass to find a bank with the right interest rate. Most banks tack on so many conditions to their accounts that it can be really hard to compare them. So… I created a Singapore Savings Account Cheatsheet that compares the interest rates and summarizes the conditions, so you don’t have to do the legwork yourself. This itself could be worth more than a hundred bucks – If you have $25,000 in savings, even a small 0.5% increase in your interest rate could mean a difference of $125 a year.

I’ll email the cheatsheet to you in a couple of days if you submit your email address and sign up for my private list in the survey.

Also, it would be supermegaawesome if you could share this survey with 3 of your friends – It’ll really help me to get better insights, which will in turn help me to write a better book for you.
Here’s the link to the survey again: http://www.surveymonkey.com/s/T9BTPYS. Thanks in advance! 🙂