Investment Moats

Your Initial High Savings Rate May Not Let You Be Financially Independent On-Time Due to Lifestyle Creep

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There is this befuddling lifestyle creep math that didn’t hit me until I saw the math.

It is one of those things that if I pose this to you as a question, you would probably know the answer. But I would not have bet that everyone knows the magnitude of the impact.

Nick Magguilli at Of Dollars and Data helped another guy deconstruct the effect of lifestyle creep on your retirement timeline.

We have always been warned that we should be more aware of how we spend our money and not succumb to lifestyle creep if we wish to achieve our financial goals.

To put it simply, if you get a $1,000 salary increase, you have more financial bandwidth. I could choose to alleviate the stress in my life by hiring a maid instead of doing some stuff myself.

That is a kind of lifestyle creep. Necessary for some people but it is also an indicator that your quality of life is going up.

The First FI Math Trap: Assuming The Nature of Our Expenses Do Not Change Throughout Life

For a lot of us thinking about the amount that we need for financial independence or retirement, we would calculate how much of our expenses we are currently spending.

With that amount, say $50,000 a year, you can then work out how much you need to accumulate to so that you can retire in the future.

The issue for many of us is that like it or not, our expenses drift upwards.

So your $50,000 a year expense may become $70,000 a year when you are closer to that retirement goal.

But because you now need $70,000 a year, the sum you need now will need to be larger than the original sum.

What is the solution to this?

Not really a solution but this means that you would have to consistently evaluate how much you spend and what is the corresponding retirement sum.

You may have to routinely update the expense requirement and the amount you need for retirement.

A better way would be to envision your retirement lifestyle and then go through each expense line item to figure out how much you need to spend.

That would be more accurate but we also do not know our future self that well until much later in life (Read the end of history illusion and your retirement). So all this points to the need to routinely re-evaluate how much we need.

The Second FI Math Trap: If you Save More, Lifestyle Creep Will Still be a Drag on Your Financial Independence Schedule

In both their work, the most befuddling thing was that if you save more, you got to be more careful about lifestyle creep, if you wish to retire at the same timeline.

Suppose your expenses are $50,000 a year and based on the 4% withdrawal rate, you would need to accumulate $1,250,000. Let us assume that your current savings rate (out of your net income from work how much you have after spending your money) is 50% of your salary. That will make you a $100,000 a year earner.

The Retirement Grid
How many years it will take for you to be financially independent, based on your savings rate and investment rate of return

Based on my FI table above, at 50% savings rate, you would probably need around 15 to 17 years.

We all get increments at work and another decision point is how much we choose to spend that.

Nick and Nat’s numbers show that if you continue to save only 50% of your salary (it is weird to say a 50% savings rate is only), you would push back your point of retirement by a lot more.

If I were to summarize the math:

  1. Your expenses go up, and so you would need a larger amount of wealth (this is the first FI Math trap)
  2. Our ultimate goal is to ensure that we retire around the same time
  3. If you start off young, a large part of your salary will be earned in the future, and that means your spending rate is going up as well
  4. But because our original FI timeline is much shorter than traditional retirement…
  5. Our current savings rate cannot allow us to save a much larger amount for this expanded expense in the same duration

Nick and NAT reach a rule of thumb that if you save 75% of your increment, you can still keep close to your original timeline.

This means that if you get a $1,000 a month increment, put $750 away into investments and spend the other $250.

It Does Not Mean Those With Lower Savings Rate are Let Off the Hook

What about those with lower savings rate? Does that mean they are better off?

In Nick’s article, the guy with the 10% savings rate can save at the same savings rate and the impact to his retirement is “minimal”.

It is minimal because in terms of data science, if you push your retirement from 49 years later to 59 years later, that is just 20% more.

However, I do not think a lot of you would like either 49 years or 59 years.

Unless you find a job or industry that you see yourself in for the rest of your life, aim to pursue Slow-FI, this would not be an ideal outcome.

Conclusion

I always thought that there are two approaches to saving:

  1. You start off with a high base savings, be more frugal, then you spend your expenses
  2. You start off with a low base savings, but make sure that your expenses do not expand at an alarming rate

Both are OK.

The important thing is to be intentional about how you deploy your monthly cash inflow. Don’t be a financial zombie.

What is very myopic for me was the magnitude of lifestyle creeps on your future financial goal. We tend to be quite fixated on a magic number we derive some years ago.

We can take this moment to re-compute what would be a revised amount of wealth needed.

If the last time you did it was with your financial planner, then maybe it is time to make an appointment.

However, if you are apprehensive that you would be upsold something from your current adviser because you felt that you trust him or her less, then it is time to do it yourself or find another adviser that is more conflict-free.

Lastly, what was presented in the two articles are very rigid math.

In reality, most of you would not spend and save in a straight-line. But now that you realize that if your best earning years are in the future, you got to keep your spending in check with your values and not keep mindlessly expanding it.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

I break down my resources according to these topics:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for the first meeting to understand how it works

Using CPF OA for Your Home Downpayment: You Should Use as Little As Possible

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If you have a sum of money in your CPF Ordinary Account (OA), is it better to pay a greater down-payment or to take a larger loan and delay repaying your CPF Ordinary Account?

A reader of mine asked me this question and my answer to him is that based on my past research (you can read Should we repay more of our 2.6% HDB loan to save 0.1%?) it should be better to drag out the loan.

I think the general idea is that if you have more lump-sum in your CPF OA as early as possible, it allows your CPF OA to compound over time. But there are a lot of things I cannot explain why this is the case.

The question today is more clear cut because instead of choosing to consistently repay $XXX a month more towards your mortgage, we are deciding whether or not to contribute more money to downpayment or not to.

I can tell you the answer is that it is mathematically better to take a larger mortgage loan versus making a greater downpayment.

Now, let us look at why this is so.

The Opportunity Costs of Using or Not Using More of Your CPF OA to Pay for Your Home.

This the problem brought in front of me:

  1. You can take a $400,000 home loan at 1.3% a year in interest rate, and have $200,000 in your CPF OA earning 2.5% a year currently
  2. You can reduce your home loan to $200,000 but you would have zero in your CPF OA

The pivot amount would be the $200,000 that you have in your CPF OA. In the past, CPF would force you to use all your OA to downpay for the home. What I understand is that this is no longer the case.

The way for you to think about is: What is the max loan that you could take?

Then, how much is in my CPF OA and how much do I want to keep in my OA.

If you choose to take a larger mortgage:

  1. You would pay more interest over 25/30 years. In theory, the interest that you pay is not fixed. At the start of your loan, you will pay more interest (due to the size of your loan). As your loan becomes smaller the interest is reduced.
  2. You would have money in your CPF OA to compound at 2.5% a year.

If you look at this math, intuitive this is a no-contest. We should do this since you would earn in excess of 1.2% if we take 2.5% minus 1.3%.

If you make a larger downpayment:

  1. You pay less interest over 25/30 years
  2. You will missed out on the 2.5% a year compounding in your CPF OA

So there is a 2.5% a year opportunity cost and your “return” is saving money on the 1.3% a year interest payment.

Net-net you will lose out on 1.2%.

We should always choose taking a large mortgage loan in this case. However, what if interest rate is closer to 2.5%?

What if you are taking a 2.6% a year mortgage loan? Let us see whether we can explore this.

Before we move on, do take note that the decision point is on the amount in your CPF OA that you need to make decision on, not the entire home loan.

Comparing the “Returns” Profile Between the Two Mortgage Financial Decisions

What we can do is to compare the internal rate of return for the two decisions.

Whoever has the higher internal rate of return is mathematically the better decision.

The internal rate of return (XIRR) needs to be computed between two streams of cash flow.

The XIRR, in very layman speak, is the “compounded interest rate per year” that you can earn based on this decision that you take. If we have an XIRR of 2%, you can interpret that this irregular stream of cash inflows and outflows will generate 2% a year compounded.

With this XIRR you can compare to other investments. For example, compare this to putting your money in an endowment plan earning an XIRR of 2.5%.

In this case we can compare the XIRR between both our decisions.

The first stream of cash flow is to not pay more downpayment but to take a larger mortgage. The cash flow would look like this:

  1. Year 1: Putting $200,000 in CPF OA – Outflow
  2. Year 2: Interest expense – Outflow
  3. Year 3: Interest expense – Outflow
  4. Last Year:
    • Get back your $200k principal from CPF OA – Inflow
    • Interest expense – Outflow
    • Accumulated interest earned from CPF OA over the years from the $200k in OA – Inflow

The second stream of cash flow is to contirbute more to downpayment and have less in your CPF OA:

  1. Year 1: Paying away $200,000 more to downpayment – Outflow
  2. Year 2: Interest expense that you saved by down-paying more – Inflow
  3. Year 3: Interest expense that you saved by down-paying more – Inflow
  4. Last Year:
    • Accumulating $200k in home equity after completely paying off the home – Inflow
    • Interest expense that you saved by down-paying more – Inflow
    • The opportunity cost of the accumulated interest we could earn from CPF OA over the years from the $200k in OA – Outflow

I decided to plot these two internal rates of return (XIRR) on a chart. The idea is to see how the returns change as time passes.

The return graph shows that the return profile of not paying off early is positive while making a greater downpayment is negative.

This more or less is inline with our guess.

Note: to be fair if you down pay more, at each point on the chart, you cannot get back the $200,000 principal (which I am assuming). The reality is that you would build up the equity of your home over time and only in the 300th month do you get $200,000. But let us assume here that even after 1 month, you could get back all your $200,000 equity.

The XIRR at the 300th month if you delay paying a greater down payment is 1.97%. It first dropped from 3.78% to 2.4% to 1.4% in the end of second year before going up.

This has more to do with the irregular nature of the interest payment (larger at the start and smaller at the end)

The XIRR at the 300th month if you use the $200,000 to downpay more is -6.3%. This is pretty crazy. I think the losses were that much because the opportunity was that great.

To give you an idea, after 25 years, the compound interest earned on that $200,000 was $173,000. The total interest expense paid was $35,000.

The conclusion at this point, just don’t increase the downpayment.

Would it be More Sensible to Increase Housing Loan Down Payment if Interest Rate is Higher?

This is a good question to ask.

The most obvious one will be to see if the decision changes if the interst rate is not 1.30% but higher.

Let us take a look.

Same as previous but the interst rate on mortgage is 2% a year instead
  • Don’t down pay more XIRR: 1.67%
  • Down pay more XIRR: -5.42

The results start to narrow.

When you take HDB Loan and incur an Interest Rate of 2.6%

Intuitively, at 2.6% interest, the expense is greater than the CPF OA interest of 2.5% a year.

This may tilt the scale in favor of putting more into down payment.

Same as previous but the interst rate on mortgage is 2.6% a year instead
  • Don’t down pay more XIRR: 1.41%
  • Down pay more XIRR: -4.63

Looks like it is still worth it after 25 years (300 months)!

But notice that at the start in the first six to twelve months, the XIRR return got very closed.

But even at this point, the total interest expense you will pay is $71,000 versus $173,000 in interest earned from the $200,000 in CPF OA.

Interest Rate of 4% – In Some Situation, it May Make sense to Contribute More Down Payment instead of Dragging Out the Loan

Same as previous but the interst rate on mortgage is 4% a year instead
  • Don’t down pay more XIRR: 0.79%
  • Down pay more XIRR: -2.66

Ok! Now we are starting to see the blue line overlapping the red line. This indicates that in a certain duration, it may make more sense to minimize the loans you take.

The cross over point is about 15 years or 180 months. However, if your loan is 25 years, it would still make sense to not put omre to downpay your home.

  • Total interest income: $173,000
  • Total interest expense: $114,000

The Interest Rate Which would make more downpayment more worth it: 5.8% a year

If you really want to know at what mortgage interest it will take to make the more downpayment option more attractive, you need to take it to a whopping 5.8%.

Same as previous but the interst rate on mortgage is 5.8% a year instead
  • Don’t down pay more XIRR: -0.01%
  • Down pay more XIRR: 0.02
  • Total interest income: $173,000
  • Total interest expense: $173,893

Right at the start, the XIRR for the decision not to downpay more starts working against you.

However, the money in your CPF OA gradually earns more such that you reached the break even point.

What is the Logic Behind This?

I think what worked for not committing more CPF OA to downpayment is similar to why mathematically, you should do lump sum investing than dollar cost averging.

When your returns and interest expense are both certain and you do not expect any volatility, by having more money at the start allows greater compounding effect than if you invest a little by little overtime.

When you choose to contribute more to downpayment, the interest you saved is on the amount of loan left.

As time passes, the amount of loan goes down, so the interest expense saved goes down.

In contrast, your CPF OA earns interest, and as time passes, the interest earns more interest. The power of compounding is very strong.

What May I Have Omitted from my Analysis?

Whenever the math is so befuddling crazy, I start wondering if my model is incorrect.

In this case, I do have a hunch my math is wrong.

If you commit to more downpayment for your home, you also have $200,000 more equity in your home at the start.

This means that if your home value goes up, and you sell off the property, you earn more.

That earns should be factored into my XIRR but I did not.

However, that is an area that is very subjective. How much should I put as the growth rate of the property?

Do I need to do a sensitivity analysis on different property growth rate?

I think if we factor in that equity property growth, I got a sneaky feeling the point where one decision tilt over would be earlier.

This will depend on the growth rate we expect for that property.

What if we are Evaluating Cash instead of CPF OA?

You can just replace the 2.5% return with the growth rate of cash, which is rather low. But if you are an investor, you may be able to earn more than 2.5%.

Your mileage (long term return) will differ based on your sequence of equity return.

Conclusion

The first time I did that analysis of whether it is better to put in more of my income to pay off loans earlier, I got a headache thinking about it.

This time it is more simpler but I think the issue is the same. There are some opportunity costs that is pretty hard to measure.

Some readers might prefer to have a peace of mind when you pay off your loans earlier.

However, I think that you do not have to pay off the loan. As long as you have enough liquidity to last for 3 years of mortgage payments, it may be more than adequate for you to ride out a tough situation.

In the worse scenario, just take the amount that originally was meant to down pay more and pay off a large chunk of it.

Right now, this plan makes more sense because the CPF OA earns 2.5% which is almost 50% more than the interest you can get from bank loan.

The CPF OA is interesting unlike cash in that, you cannot do much with it other than accumulate for retirement, put in investment or pay off your mortgage. With rates low and if you have return options, the decision may be more clear.

If you have another perspective to this problem, do let me know in the comments.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

I break down my resources according to these topics:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for the first meeting to understand how it works

When a YOLO Lifestyle Should be Encouraged in Singapore

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The term YOLO gives older folks the worst kind of ideas about young people nowadays. (YOLO stands for You only lived once, which is a philosophy to live that time is precious and you should live every moment as if it is your last)

But then again, older folks will do a lot of YOLO things in their lives such as sleeping with someone other than their wives or husbands. That is not the most responsible thing to do, but… they still do it.

If you have someone in your age group doing that, you have less power to criticize the younger folks.

Why YOLO and F.I.R.E Can Both be Desirable Goals to Pursue in Singapore

In my boss’s seminar or webinar, he would mention that YOLO and FIRE are extreme ends of a spectrum. Being near both ends is not good. Most of us should be encouraged to be somewhere not at the tail ends.

I do agree with what he says mostly, but I think if you have someone who worked extremely hard for 10 years in a consultant job or as a mergers and acquisition investment banker, spending the next 5 years decompressing in a FIRE sense would not be irresponsible.

It would bring some sanity to your life.

What about YOLO?

Are there grounds that YOLO is a responsible pursuit?

I think there could be.

Those that YOLO values their time over money. The time you have now with people, your experiences cannot be bought back, no matter how much money you have in the future.

Joshua Sheats of Radical Personal Finance has this philosophy that you should live a financially independent life before you have the money to be financially independent.

I think this is close to what I would term a responsible form of YOLO.

The sound way to live life is to live one where whether you have money or not, you go through life in a comfortable, satisfied manner.

You would spend on what your family really value. Both your wife and yourself pursue careers that are progressive, pays enough for your efforts, and challenges both of you enough.

When you have excess money, you would allocate them to the areas in life that you value the most. This could be your children, one or two hobbies, family vacations, donation to charity or your faith.

You can let me know if that is a fantasy, but I think if you are able to find such careers, which gives you a balance between work and family, you might be living that financially independent life before you have the money for financial independence.

A Responsible Evolution of YOLO is called Slow-FI in Singapore

There is another name for this kind of lifestyle. Some people called this Slow-FI.

Slow-FI is described as when someone utilizes the incremental financial freedom they gain along the journey to financial independence to live happier and healthier lives, do better work, and build strong relationships.

A slow-fi couple pursues financial independence but they may wish to retire at traditional retirement age or even later. The key for them is to enjoy the journey as much as the destination.

Some of us chiong all the way to get to a position where our wealth enables us to be financially independent. When we get there, we have no idea what is that ideal life we wish to live.

So I can see the appeal of enjoying the process while you are pursuing financial independence.

And I think Slow-FI is more sustainable for the spirit because, if your money does not build-up, you are already winning by living a good life!

There are many who criticize the F.I.R.E movement because no matter what they do, they cannot see themselves earning $200,000 in combined annual income and having a 50-70% savings rate.

It can get pretty dejecting if you realize that there is this F.I.R.E concept, know the formula to get there, try to execute that formula, and realize after some years of grinding, you are nowhere near.

The best advise that I can give you is to

  1. Work harder, climb higher, so that your wages go up
  2. Learn to live an intentional good life today

Sooner or later, we have to do #2. So maybe we should do it today than wait for when we have the money.

Slow-FI/YOLO in Singapore have 2 Main Problems That you need to take Note Of

The biggest problem with YOLO/Slow-FI is that

  1. People don’t do it in a responsible manner
  2. There are not much safety nets

I think the first one is a bigger problem.

How do you know the life you are living is a sound, responsible, intentional life? Who would you consult if you do not know the way you are living is… closer to more sound or unsound?

People criticise you because they think you are doing reckless, irresponsible things. The issue is that when you are young, you don’t think other people understand the situation you are in, or that you are afraid they will talk you out of it.

Most of us tend to overrate our decision making capabilities.

There are a few solutions to this:

  1. Get better at thinking about these decisions that you have to make. Learn to use what Daniel Kahneman calls System 2 or the slower mode of thought. Learn to look at your decisions as a spectrum of outcomes instead of black and white.
  2. Have a counsel of maybe 3 or 5 friends, mentors who you trust that can you know won’t be just “Yes” friends. They won’t be the type who would always be supportive of what you are doing or always be skeptical about things you do. It would be good that they make up of friends in your circumstances, mentors who are older and have seen more stuff, and since this is a money blog, preferably someone who has a sound financial brain.

The irresponsible YOLO are really the folks who consistently use System 1 modes of thought.

The second problem, the lack of safety net comes up because one of the constant in life is uncertainty.

If you valued time much more over money, and you spend almost every cent that you make, things can turned out OK if there are no hiccups.

But if there are some big hiccups, then you might not have the financial buffers then you might be in some big trouble. Am I being too extreme here? Personally, I do not think so.

During this period, many people are finding out that you can be living your life intentionally and yet overnight, you don’t have projects coming in, your whole industry has collapsed. Even if you would like to hustle, you cannot hustle!

However, I would like to caveat that if you really attained that level of responsible slow-FI life, you would not be in such a situation:

  1. Your conscientiousness to deliver good work have allowed you to earn a good income, and even if after you spend on living a good life, you would have adequate surpluses
  2. As you are good at your work, and people know you do good work, are quite OK to work with, you stand a higher chance to be re-employed again

In other words, YOLO does not mean irresponsible living.

Your surplus and wealth may not mean you could stop work, but for most, you could build up enough financial buffers to get you back on your feet.

If your philosophy is that time cannot be bought back with money, then the way to go is to really find the job you are good at and like to do, be really good at it so that you earn very well.

But I would caution that it is better that good life that you live not climb as fast as your income. If your annual expenses reaches a terminal state, whatever that you have left can be effectively channel to investments to build a longer runway to financial sustainability.

Totally non-related: Yohei Aoki could not connect with his job. So he moved into an abandoned school high up in the mountain area of Japan. He lived in the school alone, spending his time brewing coffee and playing music. The whole surrounding is very picturesque.

Personally, it will creep me out living in such a large, abandon compound on top of the mountain.

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

I break down my resources according to these topics:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for the first meeting to understand how it works

Is This the Most Important Presidential Election Ever?

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Since election season may be upon us, I thought this is a pretty good share.

During this time, we tend to start seeing financial commentators or bloggers trying to show their authority by explaining how the election will turn out and what are the good stocks that will benefit from this.

Then they will pitch you their masterclass courses.

Sometimes, I wonder how much a change in president matters. Based on some of the things that I read about the influence of the presidential election may not be so much. This is because the decision making that would shape policy is not down to one man but also his or her interaction with the senate and congress.

One of my favorites writer Morgan Housel shared something interesting in an interview that he did on a Financial Independence podcast.

Morgan was asked whether the presidential election matters in investing and if it does, to what extent.

Morgan tells the story that in 2010, he has the opportunity to hear a great banking lobbyist talk.

This person have been involved with presidential elections for the past 30 years.

The banking lobbyist made a statement that in every election that he has been involved in, people said that this is the most important election ever. He made a joke that at some point, some of these election stop becoming the most important election ever.

Morgan reflected that he is not immune to this. Back in 2016, he truly felt that the election was the most important one. And today, it feels like this upcoming 2020 election is going to be the most important one.

There is a tendency for the incumbent party to threaten that if the other party wins, the country’s economy will collapse.

Overtime, this have been shown to be not very accurate.

Franklin Roosevelt, the 32nd President of the United States by and large is viewed as one of the most successful presidents of the United States. But back in 1932, his appointment was so controversial.

Many people really thought that his appointment would usher in fascism and communism into the country.

There is also a long tradition of investors saying if this political party wins, by these stocks. These folks tend to have the worst track record of any tradition.

When George. W. Bush won in 2000, there is a very rational narrative that the government will de-regulate the banks, so the smart thing to do is buy the banks. They are also going to do a tax-cut that should benefit the airline stocks.

If you fast forward to 2008, the financial crisis have resulted in the banks and airline stocks going almost bankrupt.

When Barack Obama was elected in 2008, a common narrative was to buy the solar companies because there is going to be a big push for green energy. Within years, most of the solar companies went almost bankrupt.

We all remember that when Donald Trump won, there was a general consensus that this would be terrible for the stock market and the economy.

It is very easy to look back and see all these events turning out to be the exact opposite.

People tend to give the president or the political party on each side more credit, or more blame than they deserve.

The general idea is that, in the list of variables that matter to the performance of the stock market, the president may be so far down the list then we imagine.

Each of us have strong political beliefs but the sound way may be not to let that belief dictate our money management too much.

Morgan explains that if you like your portfolio today in September, you should also be comfortable with this portfolio in November.

By and large, the outcome of this election will matter less to the performance. (If it does affect the performance, it is likely we are looking at it through the short term lens or that we are inferring the wrong things.)

Do Like Me on Facebook. I share some tidbits that is not on the blog post there often. You can also choose to subscribe to my content via email below.

I break down my resources according to these topics:

  1. Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
  2. Active Investing – For the active stock investors. My deeper thoughts from my stock investing experience
  3. Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
  4. Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
  5. Free Stock Portfolio Tracking Google Sheets that many love
  6. Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
  7. Providend – Where I work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for the first meeting to understand how it works