Using Systems to Dominate Learning (And Anything Else)

The MIT Challenge

Recently read a guest post by blogger Scott Young, who stunned the world by doing the impossible. Scott completed MIT’s notoriously difficult Computer Science curriculum, which usually takes bright MIT students four years to finish, in one year. Watch the TED talk on his MIT Challenge here:

To do this, Scott adopted a carefully constructed learning system that let him compress the concepts of a 4-year education into a short span of time. This wasn’t simply a matter of cramming for exams. Scott not only passed all the exams but also completed all the programming projects, which require a deep understanding of the material. How did he do it?

First, he watched all the lectures online to get a birds-eye view of the material. By watching the video lectures at 1.5x-2x the normal speed, he managed to go through a semester’s worth of lectures in a couple of days.

Next, he spent a lot more time developing insight and drawing connections. He’d first take a piece of paper and write the concept that he was trying to understand at the top. He then wrote out his own explanation, as if he was teaching it to someone else. When he came to a gap in his knowledge, he’d go back to the textbook or find it online. In this way, he systematically filled in all the knowledge gaps until he had a deep, complete, understanding of the material.

Third, he went through practice problems with the solution key in hand. He’d check his work question-by-question, getting immediate feedback for every question he did. Compared to other students who might have to wait weeks before they got back their graded assignments, Scott’s system gave him a tight feedback loop which dramatically improved his effectiveness.

As Scott wrote in a guest post describing his journey: “…the method you use to learn matters a lot. Deeper levels of processing and spaced repetition can, in some cases, double your efficiency (emphasis mine). Indeed, the research in deliberate practice shows us that without the right method, learning can plateau forever.”

In short, Scott wasn’t studying harder; he was using a system to study smarter.

The Power Of Systems

Scott’s MIT Challenge forms the premise of the book I’m currently working on: That adopting the right systems can help you to achieve much, much more than the average individual.

You can use systems to create a desirable habit, deliver happiness to people, get fitter, be more productive, negotiate better.. pretty much anything you want to achieve in life.

Most people don’t know how to improve their own lives because they rely solely on “trying harder”. How many of us make New Years resolutions to go to the gym more often, only to fail miserably before February comes around? How many of us resolve to be more productive at work, but end up online shopping and Facebook stalking before lunchtime? And how many of us resolve to saving and investing more this year, only to have all our extra cash wiped out by a year-end vacation?

Instead of trying harder, applying systems is infinitely more effective. Here’s why:

1. Systems remove the need for “willpower”

The trouble with willpower is that it’s easy to lose steam. We burn out. John Tierney, coauthor of Willpower: Rediscovering the Greatest Human Strength, describes willpower as a finite resource that runs out just as easily as a fuel in your car tank. Systems, on the other hand, take control away from you. They force you onto a certain path so that you don’t have to use willpower. It sounds counterintuitive, but we’re more likely to be successful at something when we are willing to hand over control to a system.

2. Systems are much simpler to follow 

If you’re trying to lose weight, think about the barrage of information out there on weight management. Hundreds of articles and blogs give handy “tips” and nuggets of advice, but they’re often conflicting and confusing. A system, on the other hand, is based on rules. Step 1, 2, 3. Go to a personal trainer and he’ll tell you exactly what you need to eat, how to exercise, and all that jazz. You don’t have to think – all you need to do is stick to the system, and you’ll succeed.

3. Systems are smarter

Think about Scott Young’s system for accelerated learning. It’s a simple formula, but it’ll save you a lot of time and effort when it comes to studying. Think about how much easier it is to set up a GIRO standing instruction that automatically helps you to save every month, instead of putting in time and effort to “save harder”. Finding the right system can help you to do things a lot more efficiently and effectively than most people.

Viewing the world from a systems perspective

Systems are effective, more so than many of us realize. That’s the premise of this blog, as well as the upcoming book. So far, I’ve showed you how to use systems to improve your savings and investments, find the right types of insurance, and spend more efficiently on the things you love. The book will delve a little more deeply into the psychology of saving, spending and investing, and will describe more detail on the systems that will help you tackle your personal finances.

You start to see things differently once you look at life from a systems perspective. Large challenges suddenly don’t seem so daunting anymore, and possibilities start to open up.  Are there any problems that you’re currently stumped by, but could possibly be solved by applying a system? I’d love to hear from you, even if you haven’t found a solution yet. Leave a comment, or send me an email at

Cheers 🙂


The New Psychology of Spending Money

So last weekend, I met up with a friend who’s kind of a huge foodie, like she wouldn’t think twice about dropping 200 bucks for a meal at a restaurant. She’s really fussy about her food, which I can never understand because I pretty much eat anything. Except papayas, they’re gross.

Anyways, this friend was thinking about checking out this flashy new Michelin Star restaurant that just opened. She was excitedly telling me about her plans, but abruptly stopped herself and said, “But you probably wouldn’t approve.”

I was a little taken aback. Why wouldn’t I approve? “Because you’re all about saving money and personal finance,” she retorted.

And then it struck me: Most people believe that “personal finance” and “spending money” are polar opposites. This couldn’t be further from the truth – I’ll tell you exactly why following a personal finance system means you can spend on what you love (and no, you don’t have to wait till you’re all white-haired and wrinkly).

The Toilet Paper Thief vs The Guy Who Spends On What He Loves

Let’s compare 2 friends – we’ll call them Mike and Paul. Mike is your typical frugal saver. He doesn’t have a personal finance system but he tries his best to save more. He cooks ramen at home to save money. He takes the bus instead of the subway so he can cut 10 cents per day on his trip to the office. He wears the same pair of jeans every time he goes out. When he goes travelling, he steals the toilet paper and soap from the hostels. He picks up 5-cent coins from the ground.

Paul doesn’t scrimp as much as Mike does. In fact, he spends on what he loves. Paul manages to do this because he has a kickass personal finance system: He’s automatically saving and investing pre-determined amounts every month. He’s automated his credit card and phone bills so he never has to worry about missing a payment. He’s set aside “Big Play” money for parties and vacations.

Once all that is done, Paul has a few hundred dollars left over each month which he can spend on the things he loves, no matter how much they cost: Clothes, meals, drinks, massages – in short, everything that makes it awesome to be young.

Paul doesn’t break a sweat if his cash runs out before the end of the month. He simply stays home, cooks, and reads a free book to pass the weekend. In a couple of days, he’ll receive his next monthly salary, automatically save/invest/pay off his bills, and with the amount of money left over, continue spending on the things he loves.

Who do you think leads a richer life?

Old Psychology vs New Psychology

Most people assume that just because I write about saving and investing, I’m one of those crotchey old personal finance dudes, hobbling around with a gin and tonic in one hand, nagging people to stop spending money. That’s the old psychology of spending money, the one that most clueless people mistakenly follow.

There’s a new psychology of spending money: If you’re faithfully following a personal finance system, you’re allowed to spend on anything you want with the money left over.

In the past 2 months, I’ve had a $325 dinner, went on a $3,505 vacation, bought a new Amazon Kindle, and last night, I paid as much as $14 for a beer (that last one was totally not worth it). I did all of the above absolutely guilt-free, because I’ve built, and followed, a personal finance system that takes care of my saving, investing and payments.

There’s a key difference between the following two statements:

Crotchy Personal Finance Dudes (like Mike): “I will never ever spend on a $200 dinner”

People who read (like Paul): “I’ll totally spend on a $200 dinner, as long as I can afford it after I’ve saved and invested.”

Which person would you rather be?

PS: Leave a comment or send me an email ( on how you feel about spending money. What do you spend on and why? What is the one biggest thing you struggle with when it comes to spending? What would you like to learn from my blog to help you overcome it?

How To Get Rid of That Bulge In Your Pants

Yes… it’s a big one. And I confess that I walk around with it all day.

Honestly, if we could all just get rid of cash and pay with credit cards, like in this Visa ad, my wallet – and that bulge in my pants – could get a lot smaller (Insert snide comment about my manhood here). I have a love affair with credit cards – they’re compact, sexy, help you to rack up rebates, and build your credit score – which could save you tens of thousands of dollars if you ever take out a mortgage. Some people are irrationally scared of them (“them credit cards are the devil!”) only because they don’t understand how to deal with them. That’s stupid. Credit cards can totally work for you if you have a system that integrates them into your life.

So far, I’ve blogged about the essential credit card ingredients:
1. Set up automatic payments
2. Use cashback/rebate cards as much as possible
3. Limit your number of cards to 2 – 4

Today, I’m gonna talk about how to put all of ’em together into a system, so you never ever have to worry about credit card admin ever again.

The sexiest credit card system you’ll ever use

1. Decide on the single most important reward you’d like to get out of your credit card, and pick a card that offers it. We’ll call this your SEXY IMPORTANT CARD (SIC). They could be anything, but you have to pick just one:

  • Cashback – My personal fave, so I don’t have to figure out how to spend my points before they expire, and it’s like getting a discount for everything I buy.
  • Airline Miles – if you travel a lot
  • Random dining/shopping rewards

2. Channel 80-90% of your spending towards your SIC to maximize the rewards that are the most important to you. Literally try to spend everything on this card: wining and dining, shopping, toothpaste, major purchases and gifts, and Oompa-Loompa slaves.

3. Pick 1-3 other cards which will allow you to enjoy any exclusive credit card benefits not covered by your SIC. We’ll call these your AWESOME BENEFIT CARDS (ABCs):

    • 1 Visa and 1 MasterCard should work just fine for most people – I advocate having at least one of each because they’re the most general purpose and widely used, and you can take advantage of Visa-only or Mastercard-only promos if you come across them
    • I hardly ever charge anything to my ABCs. I keep them strictly to enjoy any exclusive card benefits that my SIC isn’t eligible for.
    • Don’t fall into the trap of opening too many new ABCs – read my post on limiting your number of cards.

4. Keep your ABCs active by directing a small, regular, recurring charge to each of them.

    • This could be as tiny as a monthly $5 magazine subscription. I have 2 ABCs –  I direct my $20/month phone bill to my Visa and my $100/month transport charge to my MasterCard.
    • The main idea is to keep your ABCs active – this lets the card companies know that you’re alive, which makes it easier for you to negotiate for fee waivers and credit limit raises when you need them.
    • More importantly, it builds your credit history – a long repayment history on these cards (even if it’s just $5 every month) will help to boost your credit score, as long as you pay them off on time every month.

5. Arrange for automatic payments for your SIC and your ABCs so you never miss a payment.

That’s it! This system will concentrate your spending on your SIC, accumulating rewards where it matters most to you. Your ABCs will give you the flexibility to enjoy whatever benefits that come your way which isn’t covered by your SIC. And automatic payments will ensure that you don’t have to deal with all the damn admin that comes along with paying those bills. (The only bit of admin that you do have to do is to check your monthly statements to ensure that there aren’t any suspicious charges like HOOKERS on it. But that shouldn’t take you more than 5 minutes every month)

Sexy and you know it

Credit cards are getting more general purpose these days. Visa has a wave and go option. If you’re Singaporean, some cards double up as an EZ-Link card (to my overseas friends – what we use to ride our subways/buses). We might eventually not have to use cash in the future, and be like this guy: 

In the meantime, try my system out, and let me know if it helps you out. 🙂

Treat A Friend To Lunch

I’ll let you in on a little secret: Being happy doesn’t depend on how much you earn, but how you spend your money. 

We’ve all heard that money doesn’t buy happiness – Multiple studies have shown that beyond a certain (surprisingly low) income, happiness very little to do with how much you have. Yet, we spend all this energy worrying about how we’re going to buy that ridiculously expensive house, that car, that iPad, and all the bling bling in the world – only to find that when we’re finally able to afford them, they’re not gonna make us a whole lot happier. Kind of stupid, isn’t it?

The trouble with possessions is that we get used to them. Really quickly. How many of you look at your iPhone and marvel at its technological wonders and go “Wow! I really don’t need another gadget for the rest of my life! Love AAPL ❤ ❤ <3”. Nope. Instead, we aimlessly flick through our apps, lock and unlock our home screens, and complain about the shitty battery life that can’t even last you till lunchtime. Retail therapy doesn’t work – and the rest of your possessions aren’t going to make you consistently happy either.

Here’s my contention: I think you can be a helluva happy right now. At this very moment. WIth the income you’re earning. How? Pick up your phone and arrange to meet someone this weekend. For brunch, for dinner, for drinks, for a museum, for a picnic, for a concert. Oh, and offer to pay.

What?! But personal finance is all about saving money, is it not? How the hell am I supposed to save money when I’m friggin PAYING for people all the time? Die, you freeloading leeches, die!!! Just stop for a second and think for a bit here – what are you saving all that money for? I don’t know about you, but I only want two things out of being rich: security and happiness. I’m pretty confident that your financial security’s pretty easy to take care of with a basic savings and investment plan, that I’ve ranted about here previously. (In fact, this article writes that you can pretty much live a super happy and comfortable retirement by by investing $1,1,65 per month at 8% p.a for 35 years. Or, if you’re married with a spouse earning $50k per year, that amount drops to just $303 per month).

So security is taken care of, and with the amount of money left over, you just have to address the “happiness” part of it. And according to Laura Vanderkam, author of the upcoming book “All the Money In the World”:

“Planned pleasant experiences give you a triple happiness whammy. You anticipate them beforehand – and as any kid waiting for Christmas knows, anticipation is often as pleasurable as the experience itself. You live through your adventures, and then you savor the memory afterwards. Eating is, of course, one of the most pleasurable things people do. In one study in which women reported how happy they were at different points of the day, eating ranked just below sex.” (from this Yahoo Finance article)

The point is, experiences count. And if you want to be happy, then spend as much as you can on experiences. I don’t really spend a lot of money on stuff. I think I own like 4 shirts and 2 pairs of jeans that I pretty much wear over and over. I don’t own an iPad or a car (and I don’t see the need to own either within the next few years). I spend pretty much all of my guilt-free spending account money on dance classes, vacations, drinks with friends, and lately, exploring yummy restaurants throughout Singapore with amazing company 🙂 Last Tuesday, I had a bowl of steaming hot pho noodles with beef balls, got treated to a Ben & Jerry’s waffle with TWO SCOOPS of ice cream (zomg life win), and then sweated it out at a helluva fun dance class. I came home at midnight, and collapsed into bed with a huge smile on my face. And that, my friends, is happiness 🙂

Why Personal Finance Is Like Brushing Your Teeth

This is the situation most people live by: They get their paycheck every month, and feel RIDICULOUSLY RICH for that day. They’ll hit the bars and order like 10 rounds, yelling “IT’S PAYDAY, BITCHES!!!” Then they wake up the next day, nurse their hangovers, and get on with life. They pay off their credit card bill when it comes in the mail, and go “What the hell – I spent THAT MUCH last month? Oh well. Shrug.” And then a friend’s birthday comes along, so they spend some money on dinner. And later on in the month, their phone bill comes, so they pay that off… and before they know it, it’s the end of the month. They catch sight of their balance while making an ATM withdrawal, and go “Crap, I spent THAT MUCH last month?! Oh well. Shrug.”

Most people have no freakin’ idea where their money goes every month. They live in an endless cycle of receiving a paycheck, spending, getting horrified at how much they spent, and shrugging in resignation. And the cycle repeats again the following month. It’s a modified version of the phrase “living paycheck to paycheck” – when you have absolutely no control over what happens to your money, never mind about trying to save and invest. Even if they do decide to save, it just involves checking their balance at the end of the month and going “oh awesome! I still have like $500 left over from my paycheck. I’ll save that.” (Not realizing that the following month, they go for a vacation and spend that $500 they just saved) Sound familiar?

Most people know they should be saving and investing, but very few people go out there and actually do it. Why is that? I think the number one reason is because it involves a huge amount of effort and willpower. It’s a helluva lot of effort to actively try to spend less, to consciously take money and save it, and to plan for investments. Personally, I hate effort. To me, personal finance is like brushing your teeth. It’s necessary, but I don’t really want to spend a lot of effort trying to remember to do it, or how to optimize my toothbrushes and toothpaste. It’s gotta be automatic, it’s gotta be routine, and even better, I’d like a robot to do it for me so that I don’t have to deal with it.

While technology hasn’t caught up in the area of oral hygiene, it’s entirely possible to have a robot take care of your personal finance. How? By creating a financial system that automatically does everything for you with no effort on your part. While I’ve previously blogged about how to automate your finances, I thought I’d give an overview on how everything works together to help you see what I’m trying to say. Check out this spiffy little diagram I created while chilling at McDonald’s this morning (Yeah, some people eat nuggets, some people check out girls, and I create awesome nerdy diagrams).


It looks really complicated, but it really isn’t. I’ll talk you through it. Let’s start with the orange box in the middle. My POSB account (for most people, this would be your checking or current account) acts as a central postman. It receives money from my salary and any other income, and then automatically shovels it into 3 categories: savings, investments, and expenses. Money doesn’t stay in my POSB account for very long – it gets quickly allocated into where I want it to go, so that I don’t even have to think about how much I should save, how much I should invest, how much I need to pay my bills, etc. Almost everything you see here is automatic – the only part that isn’t is my daily expenses, because I can’t regularly transfer money to my favorite chicken rice hawker stall. (Would be awesome if I could though)

Otherwise, my POSB “central postman” does all this for me:

  1. Savings: It adds money to my long-term savings account for retirement and my short-term savings account for guilty pleasures. My CPF (sort of like a 401(k) for Americans) gets automatic contributions direct from my salary, as well as my employer’s additional 15% contribution. (Which is sort of like free money – so awesome!)
  2. Investments: It wires funds into my brokerage account (you can use a variety of brokerages, but I use Standard Chartered for its low fees – more on this later) to invest in ETFs.
  3. Expenses: My bills are automatically paid off when they’re due, so I never incur late payment charges.

That’s it! That’s my entire financial infrastructure, and it saves me countless hours of paying bills, allocating money to save, deciding how much to invest, etc. If you haven’t set up something like this, I recommend that you get started today, even if it’s just setting up one automatic bill payment. You’ll be amazed and how much time and effort this saves you. Setting the whole thing up will literally take you no longer than one afternoon, and you will never have to worry about any of this stuff anymore. And then you can start focusing on the awesome things in life. Try it 🙂

(Hat tip to Ramit Sethi for coming up with this idea – I know, lots of what I do here is totally inspired by him)

How to Automate Your Finances

I don’t know about you, but I hate dealing with the stupid administrative things in life. You know what I’m talking about: Like topping up your EZ-Link card (for non-Singaporeans – it’s this card Singaporeans use to ride the subway / bus), paying off your bills, insurance premiums, etc etc etc. Seriously, nobody gets up in the morning and goes “Oh yay! I’m totally gonna pay my phone bill today! Woot woot!”

Why personal administration sucks ass

Each individual task doesn’t really take up that much time and effort, but add them together and it’s a helluva pain in the ass. Think about it – say you receive your credit card bill on Monday, and you want to pay it off at the AXS kiosk on Tuesday, but the line is way too long so you put it off till Wednesday, and then you realize that you have to top up your EZ-Link card, which you do, making you late for work anyway. And on Wednesday night you receive your phone bill, so now you have to remember to pay that off, but after paying off your credit card bill you get really busy so you forget about the phone bill, so the phone company sends you a reminder letter to pay last month’s bill…

Add insurance premiums, magazine subscriptions, gym memberships, charity donations, investment contributions, savings contributions…. and you get a freakin’ pain in the ass. What’s even worse – forgetting to pay off last month’s balance on your credit card will cause your credit card company to charge you interest. They could also lower your credit score and either make it harder for you to get a loan or increase the interest on your mortgage, potentially costing you thousands of dollars over your lifetime. Not fun.

Relying on “willpower” to remember to do all these annoying administrative tasks just doesn’t work. Your life is only going to get busier. Besides, having all these items on your to-do list just breaks your flow – you may be working on an important career-changing presentation, or starting up a side business, or raising a family – you don’t wanna have to deal with crap that just distracts you from the really important things in life.

Automating your admin

The key to this is to create a system – a system that automatically takes care of actually doing all this stuff for you, yet allows for you to go in and check that you aren’t making any regular contributions to the Nigerian royal family. And you can set it up in a couple of hours. If you’re Singaporean, here’s how to automate your:

Bills: Set up a GIRO arrangement for your credit card and phone bills. Once it’s set up, the system goes into your bank account once a month and then pays off your bills in full, which means that you never have to worry about late payments. All you have to do is make sure that you’ve got enough money in your bank account (I personally keep about a month’s salary in my account, which provides enough buffer for any potentially huge credit card bills).

Now, I don’t know why, but people get really nervous whenever I recommend setting up GIRO for their accounts. They’re incredibly frightened that some random dude is going to clone your credit card and charge like $5000 bucks on hookers or something.  Let me assure you: this will not happen to you if you check yo’ statement every month! Honestly, it’s not as hard as it sounds. Every month, I get a paper statement about 2 weeks before my bill is due (If you prefer, you can also arrange for an SMS/email notification from most companies, which will also link you to your online statement). I’ll glance through the statement and make sure there’s no entry with the word “HOOKERS” and a charge for $5,000 on it. If everything’s fine, I don’t have to do anything further, and my system automatically pays off my bill for me.

If there is a weird expense that you didn’t incur, then you have 2 weeks to report it to your credit card/phone company. Well-known secret: your credit card company is even more nervous than you are when it comes to these potentially fraudulent charges. Once you call them up and notify them, they’ll reimburse you and launch a full-ass investigation, just to get their money back. There are some credit card companies that are so nervous, that even if you use the credit card overseas, they’ll jump in and cancel the card right away unless you notify them beforehand that you’re going to be using your card abroad. So I’m pretty sure that even if some scammer did try to buy drugs with a clone of my card, it’ll be taken care of as long as I check my monthly statement. Besides, how often has that happened to you anyway?

This system works the same way for any other recurring expenses you might have: insurance premiums, magazine subscriptions, gym memberships, etc. In fact, most companies would LOVE to offer you the option of automatic payments, because that means that they never have to chase you for payments. And while you should review this list regularly to make sure that you’re not paying for things that you don’t need, this system automatically takes care of all the admin for any necessary expenses.

EZ-Link cards: Set up automatic top-ups with EZ-Reload every time your card value goes below zero. This can be done through GIRO or through your credit card, and EZ-Link charges like $0.25 for each top-up. My card gets automatically topped up twice a month, incurring me a grand total of $0.50 for the convenience. And believe me, $0.50 a month is a freakin’ negligible amount to pay for never having to glance at your balance, never having to line up at those infernal top-up machines, and automatically tracking your transport expenses through your credit card bill.

Savings and Investment: I’ve blogged at length about how you can set up automatic savings to both your guilt-free spending account (for holidays, weddings, etc) and your long-term savings account. But you can also automate your investments: First, decide how much of your salary you would like to invest. Next, arrange to automatically transfer that amount to your investment account every month. This can be set up through internet banking within a couple of minutes.

Your investment account works in 2 ways: it can either invest directly in unit trusts (mutual funds if you’re American) or index funds, or it can accumulate a certain amount before you go in a couple of times a year to invest the funds in various ETFs (more details on that in another post!) Either way, the result is clear: you will be regularly investing a portion of your salary, without fail, with no effort on your part whatsoever.

Putting it all together

All this can be a little overwhelming, so I’ll give an example from how I automate my own finances. I get paid on the 21st of every month, when my salary gets credited into my POSB current account. On the 22nd, my system goes in and deposits a portion of my salary into my long-term savings account, another portion into my investment account, and a third portion into my guilt-free spending account (this is one example of the “Pay Yourself First” principle). A week later, my credit card and phone statement arrives and I check it to make sure there are no fraudulent charges. If everything’s fine, my bills get automatically paid off around the 10th of the following month. All this while, I’ll be enjoying Singapore’s mega awesome public transportation system, with my system watching my EZ-Link balance for me and taking care of the top-ups whenever they are needed.

Notice that everything here is beautifully automatic. My involvement is limited to simply checking my statements to make sure nothing’s amiss, which literally takes up 5 minutes a month – probably faster than how long it takes for most people to pay their bills at the good ol’ AXS machine. With all the annoying administrative crap out of the way, you can actually focus on the good and important things in life – like being awesome.

Credit: I got this idea from Ramit Sethi, the author of I Will Teach You To Be Rich. Check out his post for a great overview and more details on automating your finances.