Don't Call it a Comeback, I've been here for years

This month i turn 35.

Thats an interesting age. Young enough to view the world going forward with excitement but old enough to know that the path will be not be easy. At this age, i have seen a friend die. I have had my wife hold my hand as my father passed and i have held hers as she said goodbye to hers. At the same time, i have seen my two beautiful daughters grow, my elegant angel and my fiery princess.

I have had successful years and hard years. I have had mornings where motivations are low and then perfect days. I have learnt to dream and to realise and to let go. I know never to make policy statements. I know support as i have the strongest, my iron rose. I have fought and compromised.SO many lessons and the most important, i know what it is to be adored and to adore.

2009 was the year of insecurity and it struck me very personally and i forgot these lessons. I heard but did not listen. I laughed but quietly.

Then i held a candle as my godson was baptised and touched his forehead with a cross. I celebrated Christmas the way it was - surrounded by laughter and noise and with family away from our lives and in holiday. I returned to this home but not home and the New Year was here with friends and family and a perfect night. I was recharged.

2010 will be an extremely hard year. In Korea this year marks the turn of a 60yr cycle, and they refer to this year as the White Tiger and its an auspicious year. I feel it and i believe it will be a great year. I start every year with a motto and this is my 2010 motto - "Don't call it a comeback, i've been here for years".

All my experiences, good and bad has brought me to this very point - this excitement to face 2010 and to overcome every obstacle. Bring it on as i am recharged, on fire and motivated. This ain't no Comeback, i've been here for years.

d.

_______

happiness sometimes does not come with money or fame but sometimes with just the quiet nobility of knowing you have led a good life. - Peyton Sawyer Scott

My haircut

Recently a friend of mine was thanking me for a book I had given him called the Millionaire Mind. This book was written by a Stanford professor who was researching the habits of the rich, the truly rich. He first started looking at affluent neighbourhoods, the neighbourhoods with the lawyers, doctors and bankers with their designer homes and fancy cars. His findings surprised him as most of these households had amazing income levels but in terms of net wealth ie assets net of liabilities, these households did not rank high.

He decided to widen his search and what he found astounded him. In middle class neighbourhoods, he found modest income earners with huge net wealth. In most of his research, he found the number of millionaire's per neighbourhood predominantly higher in middle class neighbourhoods. He had found the basis of his book.

He continued working on his research focusing now on the habits of those modest income earners who were truly rich and comparing those habits against the high income earners who he found sorely lacking in wealth.

Now I was pleased that my friend was enjoying the book and more importantly he was relating to the stories in the book just as I had. But then my friend went on to say, you are not really following the tenets of the book. Now this surprised me and I asked him why? He raised his eyebrow and eyes widening as he normally does when he thinks he is about to say something witty, he replied, your haircut.

Of course he was referring to my 75 ringgit haircut where I get a scalp massage, shampoo and a stylist cut. And he was spot on. In that book that was the sin of the high income earners where they spent as much as they earn.

So yesterday I went for a 35 haircut and let me be honest I absolutely hated it. The cut was poor and I left dissatisfied. As I spent last night thinking about this (and everytime I saw my reflection), I realised I liked my 75 haircut experience and now I was left with this problem - how to reconcile my desire to be financially free while enjoying these luxury comforts.

This has always been my goal. I believe financial planning is not about delayed gratification but immediate gratification knowing and secure that your long term financial goals are being met each day. If I ever write a book that's the byline Immediate Gratification with financial planning.

The trick to this is to define your major goals. For me is to have sgd300k for each of my kids when they hit 18 for university fees, having buffers built up to cover my daughters' current and future school fees, having adequate insurance for my family to maintain their current standard of living and lastly retirement income for my wife and me when we hit 45.

Four major goals and every month we get closer to completing all four. Post that, we enjoy our time and certain luxury comforts. I believe my friend also gets this.

So here's to 75 haircuts and a Tiffany ring and snowflake pendant. Nice!!!!

d.


- iPhone post

My watch stories

Recently i was talking to my brother in law about watches and it made me think about the watches i have and more importantly the stories behind each watch.

Tag Monza - the watch that started it all

When i was 15 (or 17), at one of dad's dinners, there was this sharply dressed young guy that came and he had presence. I saw his watch and it was a tag (those days i did not know what tag was). He told me he was 28 and he looked successful. I told myself on that night that i would buy a Tag before i was 30. At 27, i had my first successful year at work and i realised i had found my career path as a fixed income trader. I bought this watch then and it will always be special for me.

Rolex Oysterdate Perpetual -

This one is heritage. My grandmother bot this watch for my grandfather for MYR162 or 167 in 1962 or 1967 (i get mixed up on the 62 and 67). My dad told me about this watch that was just sitting at home as it was not working. I saw the watch and knew that it had to be fixed. I asked my dad for that watch and i spent the 2k to fix it. Recently i was in Korea and walked into a vintage watch shop and found the listed price at USD3500. If you price that, that is a 40 yr investment with a 9% return. Truly amazing.

Maurice Lacroix 3 time zone GMT with alarm -

I remember going for a cortina sale and I saw a Baume & Mercier watch that had 3 time zones and an alarm. It had a grey face and was classic. It was 6k (from retail price 10k). I remember the guy telling me that it had a GP movement and that GP had stopped supplying the movement a few years back. I knew the watch had collectibility but i just could not pay the 6k. I wish i did coz that watch spoke to me. So awhile later, walking in BSC, i do my normal run thru at the watch shop there and that guy Leong shows me a Maurice Lacroix watch with a white face and its the exact face - 3 time zone GMT with alarm, except thats a white face. It was 10k. Every month for a year i went there and saw that watch. The next year i bought that watch. I wished there was a reason for the purchase but there was none. I just saved to get it as it spoke to me as well. Most of the websites list the sale price at USd4500, thats more than 40% what i paid.

Sinn U1 -

I bot this when we covered Ilyana's uni fees. I was targetting MYR450k (currently have upped this to SGD300k now) at that time for 3yrs uni fees in UK and with EPF and all, we succeeded. I was proud and needed to mark that success and i bot the Sinn. The best watch i have for the money i paid. This was the start of buying watches to mark points of financial success. I have seen listed prices from GBP1000 to USD1600. About 25% higher than what i paid.

Vulcain Diver Cricket Alarm -

This is my worst buy to date. I liked how the watch looked and the cricket alarm was interesting but now the face has a scratch and i hardly wear the watch and the time keeping was poor. I got this watch in Singapore when we knew that we had a buffer account up to 6mths our expenses in Singapore. In 2008, i moved this target to 1yr and in 2009 to 2yrs (am still working on that target).

Tag Monaco Gulf Ltd edition -

This is my favourite watch now for two reasons 1) i did not buy it (Yaso got it) and 2) it marks 15yrs of us being together and 10yrs of being married. Its a great watch and its fun to look at.

The new one -

i have narrowed down that the next watch i get is a Rolex DeepSea Dweller. I like the look and its slighlty more unique than a submariner. This one i am going to get only when we have covered Sahana's uni fees of at least SGD300k. We have been working hard for this and if you see me with this watch then you will know the reason.

The song i wish i could sing

Somebody by DM

I want somebody to share
Share the rest of my life
Share my innermost thoughts
Know my intimate details
Someone who'll stand by my side
And give me support
And in return
She'll get my support
She will listen to me
When I want to speak
About the world we live in
And life in general
Though my views may be wrong
They may even be perverted
She'll hear me out
And won't easily be converted
To my way of thinking
In fact she'll often disagree
But at the end of it all
She will understand me
Aaaahhhhh....

I want somebody who cares
For me passionately
With every thought
With every breath
Someone who'll help me see things
In a different light
All the things I detest
I will almost like
I don't want to be tied
To anyone's strings
I'm carefully trying to steer clear of
Those things
But when I'm asleep
I want somebody
Who will put their arms around me
And kiss me tenderly
Though things like this
Make me sick
In a case like this
I'll get away with it
And in a place like this
I'll get away with it
Aaaahhhhh....

Financial freedom is Essential

From June 2007 i have been on the financial roller coaster. We moved to Singapore and that first year, juggling two households in Malaysia and Singapore took the toll on our finances. Then as we adjusted, we grew in comfort and i was doing well in my bank. Then my bank gets bought over in the largest merger deal in the world.

We were given assurances that all was well within the combined entities and then by June 2008, things started to get shaky with the trigger being the subprime mortgage market in the US. That was the start of this blog and my first entries spoke about this trigger.

Later that year we had Lehman go bankrupt and the world got real scary. Soon after my bank received govt aid and again we were given assurances that all will be well. My wife and i quickly applied for our PRs fearing that if i lost my job, we would have to pull the kids out of school. For those of you who know me, you will know that i plan for the big picture. And i reward myself everytime my wife and i achieve a major milestone - like having Ilyana's university fees covered or the kids school fees or having buffers in place.

That September 2008, i realised that all my planning did not take one big factor into account - a depression like scenario where unemployment could hit more than 20%. Now people all say that would never have happened but i saw it. I saw trade just shut down between countries and banks freeze all lending and the worst we saw was in Sep 08 to Mar 09. If the govts of the world did not step up and open their gates to stimulus and bail outs, we would have definitely seen a global depression.

I believe that a depression at this time will not happen but a slowing global economy and a shrinking banking system might.

With all this i reassesed our finances and i realised that for me having 6mths buffer was not enough as if i lost my job, there would be no guarantee of a replacement job. So from Sep 08, my wife and i have been on a mission to make sure we dont feel as insecure as we did then.

So all this makes me think about how valuable financial planning is. Let me make it clear, my goal one day is to start a firm back in Malaysia and the goal of that firm is to teach financial freedom. I dont believe in delayed gratification ie i dont believe in working 30yrs to enjoy the remaining 30. Financial freedom to me is the ability to know that my future is being addressed while i enjoy the present. Planning for the future, enjoying the now.

The trick to this is to define your major goals. For me my goals are 1) to have Uni fees covered for both my daughters when they turn 18, 2) to have their school fees covered, 3) to have a 2yr buffer account, 4) to have enough insurance to ensure that my family is taken care off and 5) retirement capital. Thats it just five goals.

I track how i am doing on each of this 5 goals every day. Now as long as i see progression in this 5 goals, i know that its ok to spend money and enjoy life as well. Coz i know the big picture is being taken care of.

Everytime i achive a goal, i buy myself a new watch to remind me of what my wife and i have accomplished.

I may write more on this topic as we go on as i truly believe that Financial Planning is essential to feel secure and happy. Its what i strive for and i wish you the best if you are on similiar journeys as me.

d.

1h 15m 12s

DEV KUMAR M 1052 Elite Men Msi 10 K 1:15:12

http://www.borneomarathon.com/home/pix/Elite_Men_10K_result.pdf

1 hour 15 minutes and 12 seconds.

Thats the time i took to complete my 10km run in KK. I was hoping to do it under 1h 10m but am very happy for my first time. Initially if you have read my earlier posts on how i started on this journey you will know that the goal is a half marathon 21km by Dec 2009. I have to be honest, my body was really tired after the 10km and at this stage i am hesitant to try a 21km.

Since the run almost two weeks ago, i have been on holiday and have not been training. I even put on 1.5kg with the euphoria of completing the run. It was an achievement for me especially in late february when i started, i could barely complete 1km.

Will be starting work and also training again on monday. I would like to say i am ready for the 21km which is still a goal but time to first show that i can train regularly to hit 10km.

One thing is for sure i will definitely be running again.

Asset Prices vs Real Prices - A personal view

For a long while i have refrained from writing my views about the economy and market conditions. Firstly, work picked up or more importantly i picked up. I focused on what was within my control and i was striving as many were slowing. It felt good. Secondly, it was so much more fun and meaningful to write about things that was important to me.

Let me stress, Work is not Life and its good to understand that. I am still driven and still feel a need to accomplish and influence at my chosen field but i understand that my main accomplishment is my family.

So why now do i feel the need to write again on market conditions?

In one word - Caution. And as i have been asked " Is this rally real?"

I have found the hope that people are feeling is reassuring and right. BUT, it is wrong to believe that all is well. Market conditions are far from well and we need to clearly define a line between asset prices and real prices. I am no economist and its not my goal to be perfectly accurate but to understand this difference in how it relates to me and to you.

Asset prices = the prices of the stocks (equity) we own, the property that we own, the cash that we have in FD (cash). For simplicity lets say Asset Prices (AP) = Equity (E) + Property (P) +
Cash (C). In short , we could relate asset prices to our Wealth. If the E we own appreciates, we are wealthier and that applies to P as well. And if we are accumulating C at a faster rate than we spend, we are also getting wealthier. So lets say AP = Wealth and is the right hand column in a table and needs a left hand column to balance it.

I view the left column as Real Prices = the prices (earnings) we charge for our goods and services net of the prices (cost) we pay for goods and services. IN simple terms Real Prices (RP) = Salary (S) - Cost (C).

So the conditions we have is 1) RP growing and AP growing, 2) RP growing and AP shrinking, 3) RP shrinking and AP growing and 4) RP shrinking and AP shrinking. The key is to understand where we are in this four conditions.

Personally, the condition i would like to be in is 2. When i know that my RP is growing and AP is shrinking, this to me is the perfect time to invest and maybe finally buy our place in Singapore. For now though, i am certain AP is growing but am uncertain about my RP. In short, i have no confidence that my S will grow faster than my C. Cost of food is rising as well as energy prices which will increase my C but will my salary (S) grow as fast. This is i am not certain.

Please forgive the maths as i do see myself as a math geek but the point i am making is that asset prices cannot grow without real prices growing. This to me is my main reason i am still negative and continue to maintain a huge 2 year buffer in cash as i feel that in general markets and individuals are in stage 3, where RP is shrinking but AP is growing. This to me is not sustainable.

So how do you know which stage you are in coz it is wrong to assume that everyone is in the same stage. So here are the questions you should be asking?

1) if you in shipping, have you seen shipping rates rise
2) if you are a lawyer, have you seen your billings rise
3) if you are in business, are you seeing your business grow
4) if you renting, is your rent increasing
5) is your grocery bills rising

Basically, look to your personal lives and make an assessment whether 1) your salary/earning are increasing and if so 2) is it rising faster than your cost of living and 3) are you seeing your business improve.

If the 3 assessments above give you the impression than your RP is rising, then you are a lucky person indeed. AND if AP is low or falling, you have the perfect opportunity to invest. IF AP is rising and you are invested or own a property, you get to ride it with no worries. You should sell only when you feel your RP is turning down.

If you are like me and the assessment makes you feel that RP is falling or you are uncertain, then caution is probably advised. I am not advocating you sell your investments especially property BUT i do advocate having caution and having buffers in place to protect you from unnecessary losses and grief. My family now has 2yrs buffer in place. Some view this as overly cautious but i have seen what its like to fear losing your job and doubting your ability to maintain your quality of life. To me 2yrs buffer lets me sleep comfortably knowing that we can withstand most knocks.

The above is not negative. I apologise if it comes off as such. I am actually very hopeful and i now have a clear plan of action to manage come what may. The buffers protect me from risk to the downside. Prices rising now (especially as i would like to buy a place in singapore) when i feel RP is uncertain or falling, makes me cautious and uncertain to buy. BUT, i am waiting and am truly hopeful that we will see RP rise and when it does i will be BUYING.

d.