19 January 2014

Five Rules of Wealth Accumulation

Is there more to life than money? Of course there is, but money is still important. For society, money (or currency) provides a medium for exchange that eliminates the need for barter and therefore avoids the inefficiencies of barter. For the individual, money gives you the means to buy essentials for life, that is, food, clothing, and shelter. Of course, if you have enough money to provide you with food, clothing, and shelter for the rest of your life, money is a luxury rather than a necessity. Regardless, below are important rules for accumulating wealth. Although some of these rules may be repeated in other posts, I think if an idea is important, it needs to be repeated.

1. Pay yourself first, automatically

I was made aware of this piece of advice from the book The Automatic Millionaire. The basic idea is that, rather than spending your income and investing what remains, it is better to invest a fixed amount as soon as you receive your pay and then spending whatever remains.

There are two ways to achieve this. One involves simply talking to someone in HR to put a specific amount from your pay into a separate savings account or fund. If you are a salaried worker who received a fixed amount every fortnight, another way to pay yourself first involves having two different bank accounts. You set your bank accounts up so that your pay goes into one bank account and then automatically, a few days after, a fixed amount goes into another bank account. You carry around a card for access to only the bank account you use for spending.

Regardless of the details on how you achieve this, you are fundamentally trying to make saving automatic. Life throws things at you. You don't want to have to think too much or bother with transferring money here and there in order to reach your savings goals. By making savings automatic, you don't have to do anything other than keeping yourself employed.

How much do you save? That is going to be different for different people, but I suggest that you start with an amount that is challenging and sticking to it. When I started working full-time out of university, I was only earning $40,000 a year before tax ($1538 a fortnight), and I automatically saved $1000 per fortnight simply because it was a nice-looking number. After a few years, I increased this to $1300 per fortnight.

2. Diversify

"Divide your investments among many places, for you do not know what risks might lie ahead."
~Ecclesiastes 11:2 NLT
It's one thing to automatically save your money but it's another thing entirely to make sure your money is safe. Personal finance experts often tell people to minimise risk by researching and doing your due diligence, but investments can be incredibly complex. Warren Buffet, the world's greatest investor, advises people to only invest in what you know. However, I believe that even if you think you know an investment, you may not. For example, if you buy shares in a company, you may know the business model, the products being sold, and so forth, but will you know every decision the managers make or what strategies they have to make the company profitable. You cannot possibly know all the conversations that go on behind closed door among the directors and executives. The problem of asymmetric information that exists between investors and managers is to an extent fixed with financial reporting and accountancy but there are limits to the accuracy and usefulness of this information.

In my opinion, when choosing investments, it is wise to research your investments but don't be afraid to go with your gut and, most importantly, regardless of what your gut says, you must diversify. In other words, do not keep your money in one place. Spread it across different types of investments in different financial institutions.

Diversification is hard work. It's not easy opening multiple funds or accounts in multiple financial institutions. The paperwork can get overwhelming and during tax time it can be difficult to account for the different tax treatments that different investments require (if this is the case be sure to use a qualified accounting at tax time). However, diversification is important, and if you have any doubts about this, do some research into Bernard Madoff. No matter what your research tells you, no matter what your gut tells you, and no matter what the financial statements say, all investments have risk, and the only way to mitigate risk is to diversify.

3. Invest for income

Whenever I invest, I like to invest in assets that produce income. The main appeal of these investments come from the idea that I can have money automatically dropped into my bank account without me doing any work at all. We all have expenses. We need to eat, buy clothes, and put a roof over our heads. If the income from your investments can cover the cost of these necessities, you do not need to work ever in your life and you may find that you enjoy your work a lot more because the pressure is off. You can take risks and be yourself rather than kowtowing to your manager. If your employer won't pay you, your investments will.

Positive cashflow is freedom and negative cashflow is slavery. It's as simple as that.

Of course, when investing for income, don't forget to diversify because high-income investments are risky. The higher the yield from an investment, the riskier it is. Some companies have high yields because their prices are going down because investors foresee future problems. Sometimes dividends are paid not from earning but from borrowings, which puts into question the sustainability of these dividends. You should invest for income but also remember to diversify.

4. Avoid debt, obligations, or commitment as much as possible

"The rich rule over the poor, and the borrower is slave to the lender."

~Proverbs 22:7
Debt is slavery. Try to stay out of debt as much as possible. Debt occurs when you borrow money from someone and have an obligation to pay back at a later date. The problem lies in the uncertainty of the future. Can you know for sure that you will earn the money to pay the money back?

But I will go so far as to say that it is not just debt you should avoid but all future obligations or commitment. This means, for example, avoiding phone plans that obligate you to pay a fixed amount (say $60 per month for 24 months) and getting a cheap but good phone and using a pre-paid SIM card.

Don't get a car loan. Save up money and pay cash for a second-hand car. Some people think a new car must be more reliable and that, when you buy a second-hand car, you are buying someone else's problems. Before you buy a second-hand car, you can easily get it independently checked for defects. Buying second-hand means you avoid the massive depreciation associated with new cars. When you drive a new $30,000 car from the dealer, automatically about $5,000 in value is wiped away. If you buy a $7,000 second-hand car, there will still be depreciation, but not as much.

You should also be extremely careful with intimate relationships with others as this creates commitment or obligation. One of the weirdest observations I have made is how society labels men who are cautious with commitment as "commitment phobes" who need to "man up" quickly. They talk about commitment phobia as if it were negative. If anyone tries to manshame me by labelling me a "commitment phobe" I will simply tell them that yes I am cautious about signing up to something that would bind me and that I am proud of it. If a car salesman tried to sell you a Ferrari and wanted you to go on a car loan and you hesitate, that is commitment phobia. You're expressing reluctance to commit to a long-term arrangement. It is a prudent thing to look before you leap. 

If you sign a marriage contract, you are entering into a serious commitment of your time and cash and there are extreme risks associated. Everyone needs intimacy but too many people rush into securing themselves what they believe is an infinite supply of intimacy without fully considering cost and risk. As a man, how I handle this issue involves treating female intimacy as a product that you buy. You pay a female money in the form of gifts, dinner, lunch, and events and in return she provides you with the intimacy, and you can alter how much you spend on her depending on the quantity and quality of the intimacy she supplies. Do not have the mindset that your girlfriend is the monopoly supplier of female intimacy because otherwise she will charge monopoly prices. Always have the attitude that whatever your girlfriend is supplying, you can get it somewhere else, and this will keep prices competitive.

Of course, there are some obligations you cannot avoid, for example, you need to eat, so you are obligated to spend money to buy food to eat in order to keep yourself alive (unless you grow your own food, but then you are obligated to harvest that food). There are also those necessities that you just must have that only come in contracts that involve future payments, e.g. broadband internet, private health insurance, utility bills, rent, and so forth.

5. Play the pauper

Once I have a fixed amount of my pay automatically invested in multiple investments, I don't keep track of how much money I have saved up. Many people track their net worth every month and proudly boast about it to the world. I don't because I know that I already have enough money saved up to fly off to Asia and retire if I need to. If I save up more than what I need to save up, why do I need to bother keeping track of how much I have? Being ignorant of my wealth helps because, if someone asks me how much money I have, I can, with all honesty, tell them I have no idea. It is genuine and plausible ignorance.

Why is it important to be ignorant of your wealth and be very vague about how much money you have? One word: theft. If other people think you're a pauper, they will leave you alone. If other people think you are rich, you have a target on your back. People will come up with all sorts of manipulations and cons to get to your money. This is especially true of people who are close to you, for example, relatives, parents, children, and spouses.

I would even go so far as to say that you should both conceal your wealth and also play the pauper. In other words, pretend to be poor. This goes against human instinct. Normally people purchase status symbols in order to show off wealth, but I do the opposite because the pride I would get from showing off wealth is nothing compared to the fear and anxiety I get from thinking about theft. This means you should dress modestly (but nearly, not like a bum) and avoid prestigious brand-name products. Constantly talking about how little money you have because of rising costs and try to convince others that you don't earn much money.

By playing the ignorant pauper, you avoid yourself a lot of heartache. Gone are the begging relatives or friends who want to borrow money off you or get you to invest in their coffee shop venture. People will leave you alone and theft risk is greatly reduced.

One potential problem with looking poor is that people who think they are richer than you may put you down. Class warfare is as old as human history. It will never go away, and if someone thinks he or she is richer than you then it is likely they will ridicule you. You can fix this problem by not looking too poor. You can also fix this problem by trying to ignore the bully. If that is not possible, my strategy is to act like a psycho mobster. When someone ridicules you, simply shout back at them and make vague allusions to your connections with organized crime. Constantly read true crime fiction and constantly talk about death and killing and murder. Your friends should become wary and scared of you over time and will be fearful of provoking you. You need to be careful that you act psycho only and that you don't actually kill someone or even threaten to kill someone, as these acts are likely illegal. I only go crazy this when it is clear that someone is a snob and continues to ridicule me and I cannot ignore them or distance myself from them easily.

12 January 2014

Specsavers Extrathin vs Ultrathin lenses

A word of warning about Specsavers. I went in to a Specsavers and told them that I had extras cover with a private health fund and so I heard rumours that I could be able to get glasses with nothing to pay out of pocket because the health fund would pay for everything. The salesperson there told me that this is true but only for standard lenses. If I wanted thin lenses then I would need to pay some money out of pocket. There are different grades of thinness according to the Specsavers phamplet (above). I told told to get the "super thin and light" but I asked further about whether there was much different between "super thin and light" and "extra thin and light." The salesperson showed me samples of the two and based on me touching and feeling them, there wasn't much difference at all, so I opted for the cheaper option. In hindsight I probably could have opted for the $60 "thinner aspheric lenses." Next time I get glasses from Specsavers I will ask about whether I can touch and feel the "thinner aspheric lenses" to see if they are too heavy or not.

Bottom line is, the salesperson may try to upsell you to get you to spend more. Keep asking to touch and feel samples of the cheaper options to see if there really is any noticeable difference. If not, opt for the cheaper option. If you push the price down enough, you may be in a position where the health fund covers everything and you will not be out of pocket at all (or by much).

Also be aware that in order for you to be better off with a health fund, the premiums you pay need to be less than the amount you take out of the health fund. You should do an annual review of cashflow to see whether or not you are better off with the health fund or not.

New Year's Resolution 2014: 100 Minutes of Exercise per Week

A month or so ago, I told everyone that, as a New Year's resolution for 2014, I would join a gym. Then I told myself that I would get heavier dumbbells so I can workout at home. I realised that if I wanted to be fit, I needed to define a goal and measure my progress. So here it is: 100 minutes per week. Why one hundred? It's a nice number, and many experts recommend exercising three times a week, each time for 30 minutes, so that comes to about 90 minutes, rounded up to 100 minutes. The exercise can be any exercise, but my focus will be on weights because I would like to develop more muscles. As they say, a bad measure is better than no measure, so I will stick with this and see how it goes. My plan is to track how I am tracking with my goal in a spreadsheet in Google Docs and to report on my progress every month.

11 January 2014

Lessons in Gender Roles in Genesis 3

I've been reading Genesis 3:17-19, which talks about Adam and Eve eating the apple and being punished by God. Eve did not listen to God and ate the apple anyway. God punishes her by making childbirth painful. The lesson here is that women are to be meek and to submit to authority. Eve then gives the apple to Adam and persuades him to eat it. Adam obeys Eve and eats the apple. God punishes Adam by making him work for food all the time. It is the man's duty to work in order to eat. Adam is punished for obeying his wife. Instead of being a man and leading the woman, he instead allows Eve to lead him.

To Adam he said, “Because you listened to your wife and ate fruit from the tree about which I commanded you, ‘You must not eat from it,’ “Cursed is the ground because of you; through painful toil you will eat food from it all the days of your life. It will produce thorns and thistles for you, and you will eat the plants of the field. By the sweat of your brow you will eat your food until you return to the ground, since from it you were taken; for dust you are and to dust you will return.”

10 January 2014

Overcoming Shyness when Speaking

I noticed something about myself when I was speaking to the optician today. I am nervous, I don't make eye contact, I stutter here and there, and I am very polite. I say thank you all the time. This may be something I need to correct because too much politeness may signal weakness, and when you signal weakness to others, you will be exploited.

From now on, when talking to others, I will focus on taking my time to speak and not modifying my tone. I will just speak plainly and directly. When speaking plainly and directly, I will need to think about what I am talking about. Many people criticize me for taking too long to think when responding. If this happens again, I should respond by saying that how long I take to respond is my choice and that they should not try to force me to alter how long I take to respond to someone. I will invite them to try to force me if they wish, but there will be consequences.

Amaysim Round Up to Nearest MB

As much as possible, I try to avoid debt. This means that I buy a car outright with cash rather than get a car loan. With phones, I never go on a phone plan where there is an obligation for me to pay e.g. $60 per month. Rather, I buy a phone outright and get a pre-paid SIM card.

Although I do make some phone calls and texts, the amounts are negligible. I tend to use only mobile data, so when I shop around I look for the cheapest possible pre-paid mobile data. Currently in Australia, this seems to be Amaysim. For $100, they provide you with 10GB of data for one year. However, there is a catch.

Rather than billing customers according to kilobyte, Amaysim bills customers according to megabyte. For example, if you send an email or Facebook message, you will use about 4KB of data. Companies that charge you according to kilobyte will bill you for 4KB of data. However, Amaysim rounds this up to 1MB (about 1000KB) and charges you for that. This practice has been exposed in this Sydney Morning Herald article: Telcos take a byte out of pre-paid mobile deals.

SMH summarises the charging practices of telcos below:

Vodafone - Will charge in 1 kilobyte increments from February 13 on all pre-paid plans. Was proposing 1 megabyte increments across all plans before it about-faced.
Telstra -
Charges in 1 kilobyte increments on most pre-paid plans but does charge in 1 megabyte increments on its "Simplicity" plan.
Optus -
Charges in 1 kilobyte increments on 1 pre-paid plan and 1 megabyte increments on 2.
Virgin Mobile -
Charges in 60 kilobyte increments on all pre-paid plans.
Red Bull Mobile -
Charges in 250 kilobyte increments on all pre-paid plans.
Woolworths Mobile -
Charges in 1 megabyte increments on all pre-paid plans.
Boost -
Charges in 1 megabyte increments on all pre-paid plans.
Crazy Johns -
Charges in 10 kilobyte increments on all pre-paid plans.
Amaysim -
Charges in 1 megabyte increments on all pre-paid plans.
Kogan Mobile -
Charges in 1 megabyte increments on all pre-paid plans.

All this makes it difficult to compare among different providers because you are not comparing the same products and therefore you cannot compare by price.

Even though Amaysim rounds up to the nearest megabyte, the other providers seem to charge much more than Amaysim and even for pre-paid they charge fixed amounts per month. I will stick to Amaysim for now, paying $100 for 10GB and try to limit my data usage to 800MB per month, even though they round up.

08 January 2014

Are Dumbbells Enough?

Like many people, my main resolution for 2014 relates to strength. I want to build my strength. When I say I want to build my strength, I am referring not only to a strong mindset, that is, assertiveness and my ability to say no and to stand up for myself, but I am also referring to my physical strength. As a result, late last year, I told myself that I would join a gym. I am now having second thoughts. I've been googling, and many articles recommend that I be wary about gym contracts locking me in. I also don't know how easy it is for me to commit to going to the gym.

It's not that I don't do any workout at the moment. I currently use 5 kg dumbbells at home that I do use, and they are great in terms of convenience because I can work out at home and save on gym membership fees. But 5 kg may not be enough. The workout is starting to get easy, so perhaps the next step is to progress from the 5 kg dumbbell to the 10 kg dumbbell. My plan is to buy online to get the best price.

Are far as technique goes, there is plenty of guidance on the internet on how to use dumbbells. Some people argue that strength training is not enough, that you need to engage in cardio workout, for example, running or swimming, but my counterargument is that, if you lessen the weights, for example, if you use 2.5 kg dumbbells, and workout for a longer duration (higher reps) then you effectively get a cardio workout. It helps if your dumbbell sets vary in size or are adjustable.

Currently I do not have a bench but will see if I can use my 10 kg dumbbells without a bench. I do my workout in my bedroom where there is not much space, so it would be ideal if I can avoid using a bench. Once 10 kg dumbbells get easy, I'll consider using heavier weights.

07 January 2014

Sony Xperia Z1 Compact

I am very excited about the upcoming Sony Xperia Z1 Compact, which is has the same flagship features of the Sony Xperia Z but in a smaller body with a 4.3 inch display rather than the normal Z1's 5 inch display. Sony's phone will be crafted from aluminium and glass (compared to plastic used in Samsung phones and a combination of plastic and aluminium in the iPhone 5 and HTC One). The Sony phones are also waterproof and dustproof.

Sony Xperia Z - 10 Months After

I've had the Sony Xperia Z for about ten months now, so it's time I give an update on this phone.

First I'll start with the good points. I still think the Xperia Z is a beautiful phone with a unique design. It is a phone that I feel good carrying around because of its beauty. It is slim and lightweight, meaning that it fits in the pocket and doesn't bulge out. Even though viewing angles are not as great compared to other phones, the full HD display coupled with Sony's proprietary Mobile Bravia Engine produces excellent, vivid pictures, especially on colourful images of landscapes. Often I would take a picture of amazing scenery, send it to my friends, and they'd be amazed at how much better the same image looked on the Xperia Z.

Another good point about the Xperia Z is its speed. Even though, when it came out, it used the slightly older Snapdragon S4 Pro chip rather than the Snapdragon 600 found in the Galaxy S4, the phone seems to not be bogged down too much and feels smooth and snappy. It's not really the speed of the CPU that I am concerned about. Rather, I prefer consistency. The Xperia Z is consistently good whereas, for example, the Nexus 7 (2012 edition), which uses the Tegra 3 chip, has moments when it is fast, moments when it is slow, and moments when it is frozen.

Onto the bad points, and there are a few now that I've had time to play around with phone for ten months.


The main issue I have with this phone is the camera. It is a 13MP camera that takes decent phones. It suffers in low light, but all smartphone camera suffer in low light, so that's not a major issue. My main issue is that the Sony camera app takes too long to load. When I talk around, see something I want to take a phone of, I take out the Xperia Z and swipe left from the lockscreen to go to the camera. The phone takes on average about five seconds to fully activate the camera. Phones that have fast cameras include the Nexus 5 and the iPhone 5S. Fast access to the camera is a necessity.

Another issue I have with the camera relates to dust particles. After using the Xperia Z for a while, I have noticed dust particles on the lens. The dust is inside the lens, so I cannot wipe the lens with a cloth to fix it. A Google search reveals that the Xperia Z dust particle issue is not a one-off, but a systematic issue with the phone itself.


The battery life on the Xperia Z is too short. They have definitely fixed this on the Xperia Z1 by providing 3000 mAh, but the 2300 mAh on the Xperia Z is not enough. Even with power saving features, this phone often runs out of energy in the afternoon. I tend to use phones more than the average person, so perhaps the 2300 mAh is not good enough for me. For the person who using the phone occasionally, the battery capacity is fine.

Warning about Queenstown Hill

I was attracted to the fact that this activity was free and would provide me with exercise. My girlfriend seemed excited by the fact that this activity is rated as the number one attraction on TripAdvisor for Queenstown.

My girlfriend was completely unprepared for this. She wore a cardigan and took along a handbag with all sorts of things in there. It is highly recommended that you don't bring too much as too much weight can be difficult to carry all the way up the hill. Bring a water bottle and a small camera or smartphone along. Many reviews on TripAdvisor confused Queenstown Hill with the one that carries the Gondola and incorrectly said that there is a cafe or restaurant at the top. There is nothing. No restaurant or cafe, not even a toilet or water fountain. You need to make sure that you empty your bladder and fill up a water bottle before you start trekking. Dress lightly but wear reasonable walking shoes, e.g, sneakers, runners, or hiking shoes.

Canterbury Museum

When visiting Christchurch, New Zealand I was sure to visit the Botanical Gardens there. However, when I got back to the hotel, I browsed TripAdvisor and noticed that I had missed Canterbury Museum, which is situation right next to the Botanical Gardens. On the day we needed to return the rental car before heading to the airport, my girlfriend and I had some time to burn, so we took the opportunity to visit the museum.

The museum is free. What is on exhibit is quite varied, from Maori culture to street art and even Asian art. Just about everything was there, and it took me about two hours to get through everything. All in all, it was interesting, and a great way to kill off some time.

05 January 2014

Pier 19, Queenstown

Eggs Benedict and Big Breakfast at Pier 19, Queenstown, New Zealand. 

Sitting outside gives a great view of the beautiful blue-green New Zealand waters. The smog from the nearby boats can be a problem. 

The bread used can be a little dry and hard, so an Eggs Benedict, which uses muffin rather than bread slices, is preferable.