Portfolio/ Work Outlook 2020 & interesting reads (8th Jan)

Wishing fellow investors, friends and readers a HAPPY NEW YEAR 2020!

A few readers have started to gently remind me that I'm late for my blog post update! 😅 Would firstly like to thank all of you for your continued support and concern since I started investing in February 2018. Time flies, 2 years have passed in a blink of an eye.

tl;dr (Too long, didn't read) Summary:
1. Busy Dec Period: Taking a toll but Fruitful - 
Work, studies and relationship commitments have taken up considerable time.

2. Portfolio update: Outlook for next 2-3 years -
Investment portfolio is likely to take a backseat. Currently, I am gearing up for wedding/HDB. If you have any pro-tips regarding couple finance/ saving for HDB/Wedding, please do leave a comment/drop me an email! 😊

3. Work update: Performance for the year/ Career building - 
Career is at a stage it can go either way. I need to secure a promotion before the current boss moves on to his next post (2 years target, 4 years max). Overall secured a good performance this year and will have chance for further exposure.

4. Interesting reads and thoughts of KC
- Sing vs. Singh
- LV's success and why we should aim to go over to business side on a company as an employee.
- Sugar baby: Would you be one?

1. Busy Dec Period: Taking a toll but Fruitful

Work:
Indeed, December has been a crazy month with my work as I saw a ramp up of work activities due to my department trying to spend the allocated funds for projects.

Gatherings/Paktor (dating):
Christmas and New Year was also a great time to get together with friends whom I have not seen for some time to catch up as well as to spend time with our loved ones. I would like to thank my loved ones for being my pillar of strength and support. You know who you are! ❤️ And so, one colleague and a long time University buddy both invited me to their HDB. Co-incidentally, both are in Sengkang. And so, it kickstarted a HDB conversation between my partner and I. One thing I learnt was that renovations could be cheap(er) and your house turns out more unique/ customised if you do not go to the interior designer.

Night Classes:
My night classes are starting to take its toll on my body with packed classes in the evenings on most Mondays, Wednesdays and Fridays. I have to somehow last till end of March. Short term pain for Long term gain. Press on!!

2. Portfolio update: Outlook for next 2-3 years

My Priorities have changed: for the next 2-3 years, from being a single person to starting preparations for marriage. As a result, my portfolio savings goals is likely to take a hit. Something has got to give way so I will have to be more prudent in my daily spending to maximise my savings over this period.

This also means that I will have minimal capital to deploy and will have to be more prudent in screening my counters. First and foremost, the bottleneck would be savings and the main constraint is the limited amount of salary I have. It is either I spend less, save more or I increase my salary somehow.

I am also on the lookout for BTO but I am quite inexperienced in this aspect: if you have any opinion and good advice regarding HDB/BTO, feel free to drop a comment below or drop me an email. I would really appreciate it!

On my portfolio side, there is some speculation that AIMS Apac Reit would be in for a M&A: https://www.investingnote.com/posts/1778469. Meanwhile I would keep calm and collect my dividends.

Portfolio as of Jan 2020

	Stock name	Code	Entry price	Shares	Price	% Allocation	Type
1	FCOT	ND8U	1.4674	1000	1467.37	3.61	Base
2	FLT	BUOU	1.0712	2500	2677.88	6.60	Base
3	Singtel	Z74	3.3182	1000	3318.16	8.17	Base
4	APTT	S7OU	0.1631	10000	1631.4	4.02	Base
5	Vicom	V01	6.0340	500	3016.99	7.43	Base
6	SSB	Just for reference	1.0000	2000	2002	4.93	Base
7
8	Aims	O5RU	1.3800	3000	4152.48	10.23	Base
9	Cash				$22,333.06*	55.01	Cash
				Total Amount	$40,599.34	100.00

- Portfolio value is $42,318.06 at end of 2019.
- *$20,000 earmarked for wedding/housing fund. (expect my portfolio to take a hit)

Short Term Goal 2-3 years
Wedding/Housing Fund Target: (approx. $800 per month min.)

Year	Year Start Value	Target Value	Actual Value
2020	$20,000	$29,600
2021	$29,600	$39,200
2022	$39,200	$48,800

Projections (since inception):

Road to Financial Independence
PROJECTION					ACTUAL FIGURES
Year	Age	Portfolio Projected 2%/yr	Current capital injection Rate/yr	Estimated Dividend 3%	Actual Portfolio at end of yr	Actual Capital Injection/yr	Actual Dividends
2018	31	$12,000.00	$12,000.00	$360.00	$15,941.59	$16,928.40	513.25
2019	32	$24,600.00	$12,000.00	$738.00	$42,318.06	$23,670.94	$890.54
2020	33	$37,830.00	$12,000.00	$1,134.90	$22,318.06 (Till Date) (-$20,000 for Wedding/HDB fund)	- (Till Date)	-  (Till Date)

Long term portfolio goals would stay as per the table under the Portfolio Update page. It remains to be seen how much I would be affected with the goals shift. 

3. Work update: Performance for the year/ Career building

My job transition has stabilised and it is time to think about improving my current skillset so that I can hopefully move up to the next level in my career.

I have been incredibly lucky to secure a pay raise and severance (previously retrenched) as well as a chance to travel abroad for business for exposure in my new employment.

Added responsibilities beyond current job scope (can be a double-edged sword):
The positive here is that my current boss thinks that I am performing well and turning out good results as compared to a few colleagues who are in a similar level to my role despite only being in my role for half a year. Consequently, I will have a chance to prove myself as I take on added work (tasks for the next level job) outside of the core responsibilities of my current role as well as more opportunities to gain exposure and experience.

The drawback is that I will definitely have less time for monitoring that market (which is probably fine since I will have less capital to deploy). And also, past experience at my old company where I was retrenched has taught me that things can change very fast, especially if my boss were to be changed by the management or re-located to elsewhere in the company.

I might lose favour and get stuck so I am under some pressure to push and secure for the promotion fast within 2 years. If I do not manage to secure this by end of 4 years, it would mean that I have got stuck because by then my current boss is likely to move on to his next post.

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4. Interesting reads and thoughts of KC (8/1/2020)

#1: Sing vs. Singh: Singaporeans vs. PRs?

Read More: https://www.todayonline.com/singapore/chan-chun-sing-and-pritam-singh-spar-parliament-over-data-distribution-new-jobs-among

Read More: https://www.todayonline.com/commentary/singapores-economic-growth-and-job-creation-have-benefited-citizens-more-foreigners

*Disclaimer: This is just my opinion and based on anecdotal experiences. I am not siding any political party, but more concerned about Singaporean's future and my own future as a Singaporean.

One of the major talking points that have caught my attention was this Sing vs. Singh showdown in parliament where our opposition is questioning and pressing our ruling party to inform us of the exact breakdown of Singaporeans and PRs in what is defined as "local PMETs"

This is a tough and a cold hard truth Singaporeans may have to face: Are Singaporeans these days so strawberry that we have to rely on policies to guarantee we get ahead in this supposedly meritocratic system?

But, if we go down such a path, it is dangerous because in the private sector, work quality counts. And in some cases, the work quality I have seen from some of my Singaporean colleagues really make it hard to justify putting them ahead of FTs in my various stints at a few MNCs. Many of the FTs I have worked with in MNCs have good exposure, turn out better work quality, better work attitude and are far more humble and open to learn than Singaporean colleagues.

I really feel that the government should release the statistics and let us draw our own conclusions. If we are failing, we need to know and we need a knock on our heads, fast.

#2: The Story behind Louis Vuitton

  

In my previous blog post, I shared this video (a documentary on LV's success I watched on my flight back):

Firstly, I gained a good understanding of branding and business models of a successful business that I find is commonly found in other businesses as well. Successful businesses often are able to charge premium for their products, create a good and loyal customer experience and while earning a high margin. From an investing point of view, a 40% margin would mean a highly profitable business.

A breakdown of LV's cost in a bag is as the picture above.

The people who actually make the bag only earn the pie from 10% of the price of the bag. The sales person earns from the 50% pie, while the company takes in 40% profit. I find this a sobering thought now that I am in a business related function, having come from a technical background within my industry. Folks in the business side have far more chances for advancements while the manufacturing folks are often kept there (don't fix what isn't spoilt) as production managers in the manufacturing departments often try to keep things status quo.

I used to envision a career in Technical, but in most companies, Sales teams often have a louder voice and are the decision makers in the company. This is true for my current and previous company. Even if you make the world's best bag, it would be nothing if nobody knew about it and none of it gets sold.

Where would we want to be in a company? Think again.

I could be misguided by my own experiences but I would definitely want to leverage on my technical experience to try to gravitate towards sales/marketing functions and customer facing roles as I can already feel a considerable difference being employed on the business side.

#3: Sugar baby: Would you be one?

At this point... just want to put out the supposed "benefits" of sugar dating the lady got:

- HP laptop
- Pandora custom made necklace
- Hotel stays and private yacht trips
- Iphone
- ~ $3,000 SGD allowance
- Support daily expenses, pay for student loans

I'm rather speechless with this one. But I do think she is rather brave to be truthful about this. I think she has a day job that earns around $3,000 as well so I guess this gives her the ability to sustain the kind of lifestyle or dating she wants. I just can't help but wonder if this is an exploitation disguised as 'dating'.

Read More: https://www.businessinsider.sg/sugar-baby-relationship-sugar-daddy-what-its-like-2019-8/?r=US&IR=T

What do you think?

K.C.

If you like this post, you might like our facebook page as well. I'm also on Investing Note.

Related topics:
1. About K.C. What is my story?
2. My 3Cs to money/investing
3. Why you need to set aside money for savings first
4. Interview process cycle: How to increase your interview rates
5. My 2018 Year end review
6. I'm retrenched: 3 things to think about

7. Why I refuse to spend >15-30 minutes budgeting each month

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 

Couple Money Expectations: How do you and your spouse/partner match up?

Recently, KC went from singlehood into a new relationship and realised that my spending started to rise inevitably because of the dating phase and frequency of dates. (Maybe that's why I also have not blogged in a month due to less time! 😆) Maybe it was that I felt the need to impress my date. Maybe we ended up trying to use money to impress one another, showering each other with gifts, meals and etc.

Then, into the 3rd month of dating, she said: "Dear, when we go out to eat, can we don't eat too ex(pensive) food? I need to cut down my budget on spending."

In my heart I went "YESSSSS AHHHHHHH". A girlfriend/wife who know how to save money for you will make you rich 😆. I guess we have been trying to "calibrate" a baseline for spending and we found out we were both overspending compared to when we were single. Money perspective is actually a crucial topic given that more than 36% of divorce cases in the US is due to financial reasons (other leading causes being conflict, infidelity, commitment issues)

In our traditional Chinese culture, there is something called "三观" (3 Major perspectives towards life) and there is something called "三观不合”. (Incompatibility on 3 major perspectives) What are these 3 major perspectives?

三观 3 Major Perspectives

1. 人生观 (Outlook Towards Life): 人生观是人这辈子应该怎么活

How should we live our lives, what is the aim and attitudes we hold? How should one conduct their own personal lives such that life is meaningful? What are the things you and your spouse appreciate in life and what are you guys pursuing? What is the moral compass you live your life by? If you are your spouse's expectations towards life is too different, it inevitably affects communication because you will not be able to understand some of the decisions your spouse make and much less support them. A couple without an outlook that involves one another and see each other in their future is bound to fail.

2. 价值观 (Value system): 价值观是人这辈子什么才是最珍贵的

What is of value to you (in terms of people relationships, possessions, character values)? Monetary perspectives fall straight into this category. Why is money such a good yardstick to find out where our true loyalties and our vices are? This is because we often use money to exchange for something we feel is valuable in life. If you are your spouse differ alot on money, the things you two value will be very different and this inevitably leads to differences down the road. The other things we consider in this may be relationships with other people (and therefore we spend time and effort on them). 

3. 世界观 (Worldview): 一个人对整个世界的根本看法

An understanding of the intricate relationship of how we fit into a larger world and how the world came to be. Often, it can mean philosophical, religious, fundamental, existential ideas that are imparted to us and influence us depending on what cultures and upbringing we have been exposed to. 

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It is okay to not match 100% with your spouse. 

To me, money perspective, importance of Family and personal character (good temperament), and personal values are extremely important. However, it is unrealistic to expect that we are 100% match with our spouse. The best scenario we can have is someone who fits most of our own personal values without triggering any dealbreakers. (e.g. one dealbreaker is I cannot stand someone with bad temper who would scold their own parents unreasonably. Can I expect him/her to scold my parents in future? Another example could be a mismatch in money perspectives. I might be only looking to spend within means but he/she wants to spend and get the best out there, even if it might stretch finances)

What do we do if we are incompatible?

What do we do if we are supposedly incompatible? Instead of focusing on differences, FOCUS ON COMMON GROUND. Find out how each other think and appreciate where they are coming from instead of always insisting our own way. Communication is key in coming to a common ground and compromise sometimes.

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How do you and your spouse manage your finances? Are there any major differences in how you approach money? How did you resolve them?

Given the high cost of living and starting a family in Singapore, this is a topic we have to face sooner rather than later.

Until Next Time,

K.C.

If you like this post, you might like our facebook page as well. I'm also on Investing Note.

Related topics:
1. About K.C. What is my story?
2. My 3Cs to money/investing
3. Why you need to set aside money for savings first
4. Interview process cycle: How to increase your interview rates
5. My 2018 Year end review
6. I'm retrenched: 3 things to think about

7. Why I refuse to spend >15-30 minutes budgeting each month

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 

Invited by NTUC to a Retirement Adequacy/CPF Group Discussion

Update 1/9/2019:

- It's now my 1.5 months in my new company and everything is stabilising so I have time to blog again!
- I am now keeping net cash and not adding more positions at the moment but focusing on savings.

KC have had some feedback that he is quite "Lor-so" (Slang "Long-winded") and it is difficult to read for some readers. Going forward, KC will definitely try go as to point as possible and to explore telling visual stories through short comics or picture. Sorry this will still be a long article.

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TL;DR Summary

1. Many Singaporeans probably do not have enough to retire. Whose responsibility is it?
2. Retirement age and Re-employment age is increased as with CPF contributions for older workers to help to bridge that gap.
3. The possible "backfires" to the policy changes: Unwilling employers and unwilling employees. How will the government convince them otherwise? We won't know the effects till years later.
4. CPF's liberalisation over the years have allowed Singaporeans to enjoy some benefits at the cost of our retirement. (This has to be managed carefully)
5. Stay away from money detriment habits!
6. Personally, I feel that we ought to take ownership of our own financial plans, and not expect the handout from the government. Learn about the systems in place and how they can benefit us.

Hereby, I would like to ask and encourage fellow readers to contribute your comments/complaints/feedback/suggestions to the discussions. Who knows? Someone who has a say in policy making might be reading. (We hope)

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Recently, because of this blog "30yearoldinvestor", I had the chance to take part in a small focus group organised by the NTUC on the topic of "CPF, retirement and re-employment ages". (Special thanks to J from NTUC for inviting me).

I will just talk to myself about my own opinions. I think the talk essentially was trying to answer a question:

How much does a Singaporean need to retire adequately? (Consequently, is the Govt and CPF doing enough?)
Note: This post represent solely my own opinions and are not affiliated to any organisations. Yea, it is NOT a sponsored post.

In the recent NDP rally, Our Prime Minister spoke of raising the retirement age and re-employment ages progressively from now till 2030. Firstly, I can imagine it to be quite an unpopular policy given the older folks and business owners I have spoken to. But the government seems quite positive about this so let's hope they are right. My foreigner boss actually credited our government for thinking so far ahead of time saying that usually governments only care about the next election.

Definitions (if we still do not understand what it means for us):

1. Retirement age:
Employers are not supposed to terminate us unfairly due to age below the retirement age. The minimum retirement age is 62. This will be raised to 65 by 2030.

2. Re-employment age:
While we are employed, employers must offer re-employment to eligible employees who are turning 62, up to age 67. This will also be raised to 70 by 2030.

These are enforced under the [1] RETIREMENT AND RE-EMPLOYMENT ACT (CHAPTER 274A) to protect our rights. For accuracy, please visit the site.

First of all, it will take some convincing for employers to continue to employ elderly workers (whose CPF contributions will now also be on par with the younger folks). This could translate into additional business costs for companies. Is there any incentive for business owners to align to this policy? (e.g. tax rebates etc for a % of elderly Singaporeans hired?)

Source: CNA NDR 2019: From retirement age to climate change, here are 9 things you need to know

A few older folks I have spoke to also do not want to work until so old (In their words: Wa lau, work till die meh?). Many are working not because they want to but they have to to make ends meet. There is some disparity here from the narrative that older workers want to work longer.

Another pressing concern is that as an elderly, we may get retrenched in a better job prior to 62. Therefore many will not be holding jobs that make them eligible for re-employment.

This is perhaps better illustrated by this graph taken from the Report by MOM on the [2]Labour Force in Singapore 2017:

In 2017, the number of elderly (>60) employed rose to 14% from 6.1% in 2007.
We somehow have to shift that curve towards the (rather exaggerated) brown one.

The policy changes sounds good on paper (nice in theory), but time will tell if they really pan out as we imagined. Let's hope that it is not too late by then.

Now, this is where the other tool called CPF comes in.

So, What is CPF? Can eat one?

Since CPF was started in 1955 by the British and our first self-governance's Chief Minister David Marshall [3], it has become a much different instrument for Singaporeans. Our living standards have improved, but so has our cost of living. As such, many people start to feel that CPF may not be adequate for citizen's retirement needs.

In my understanding, CPF originally was only meant for catering to the retirement needs of old and aged Singaporeans through enforced savings but has since started to cater for a range of things. (we shall not go into specifics here but just to illustrate that it has evolved with time)

4 major things we can now use CPF for:
1. Public Housing since 1968 [4]
2. Healthcare needs: Medisave started in 1984 [5]
3. Investing for higher returns in 1986 (later became CPFIS) [6]
4. Education for tertiary education (self/children) since 1989 [7]

For full list of timeline changes to CPF, refer to here.

Then and Now: I think we have already liberalised CPF's usage over the years to cover alot of things. 

I think you get the point that CPF has changed already been changed to "GiveUsBack" our money over the years so that we can use it to enjoy certain benefits such as to tend to our housing needs, education and healthcare needs. But, there is a catch. Because ultimately it is still meant for retirement, funds "borrowed" will have to be returned in some way...

So, is CPF enough for our retirement?

Going by current trends, it would be a yes/no. It depends on our own expectations and what kind of living standard one wants to sustain. I would say, it will probably be a No for me. That is why I have started my own planning ahead of time. I would think that CPF is like an additional tool I must understand and put into my own planning as well since we can't get rid of it. Might as well understand how it works and how it can benefit us.

What can the govt do to help us?

To be honest, after role-playing for about 30 minutes as the government in the discussion, I do think that it is not easy for the government to implement a one size fit all or be flexible in our arrangements to help everyone but also not to penalise someone for the mistakes of others so as to be fair (and therefore we become inflexible).

For example, assuming we become flexible for example to let someone take all their CPF out as per in the past. What do we do if these people spend all their money and come back to us? Would we then have no choice but to "punish" the people who managed their own money well to take care of those that did not? It would likely be unfair. I myself wouldn't want to be taxed unfairly to pay for someone who didn't plan for their retirement. Worse, if this is a social norm.

On a side note, I think the government must really take action in educating financial literacy in schools from young. Even at current tertiary education, we could start financial literacy modules that is compulsory for everyone. It can be a module that awards credits (but not graded, just pass/fail) as an incentive for students to take up. You might also want to host talks to engage the youths in universities about policies that are going to affect them.

What can we do to help ourselves?

For me personally, I have seen first hand how Gambling destroys family. At max, I think if the ocassional TOTO draw comes to $8m, buying $10 is acceptable. For a comparison sake, my own mum is a hardcore 4D/TOTO gambler who spends $600-900 per month on it. 😓

My general take is to STAY AWAY from savings detrimental habits such as excessive smoking, drinking and gambling. My smoker friends know that they spend a lot on cigarettes ($14 x 30 x 12 =  $5,040) if we smoke one pack a day. But they cannot help it. It has become a habit. You can go on a good holiday with that, but let's save that money.

Cultivate money saving habits instead. Most people cannot invest because they do not save much at all. We all live in an age where the society tells us to enjoy life here and now, in the present. We crave instant gratification. But there is power in delayed gratification.

How many of us will really plan for ourselves if CPF decides to give back our money today?

I am in a few investing chat groups and I would like to think that I belong to the more financial savvy group of people who actively plan ahead for our finances.

We would THINK that logically everyone would SAY they would plan their own. But, experience tells me that most wont take ACTION and DO.

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In short, I do think that there are no quick fix to resolving retirement adequacy. Given a choice to depend on the government and leave it to doubt, I would rather take responsibility and ownership to ensure that I will have enough when my time comes (and incorporating CPF into that plan).


Until Next Time,

K.C.

If you like this post, you might like our facebook page as well. I'm also on Investing Note.

Related topics:
1. About K.C. What is my story?
2. My 3Cs to money/investing
3. Why you need to set aside money for savings first
4. Interview process cycle: How to increase your interview rates
5. My 2018 Year end review
6. I'm retrenched: 3 things to think about

Disclaimer: The views expressed, opinion and information in this article are strictly for informational purposes to encourage educational discussions only. It is important to conduct your own analysis before making any investment decisions based on your own personal circumstances. You should take reasonable measures such as seeking independent financial advice from professionals and/or independently research and verify the information that you find on "30 Year Old Investor" before undertaking any important investment decisions. No content on this site constitutes - or should be understood as constituting - a recommendation to enter any securities transactions or to engage in any of the investment strategies presented in our site content. We do not provide personalised recommendations or views as to whether a particular stock or investment approach is suitable to the financial needs of a specific individual. No representation or warranty expressed or implied is made as to, and no reliance shall be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained on this website. "30 Year Old Investor" shall not be liable whatsoever for loss or damages of any kind arising from the result of any use, reliance or distribution of the articles or its contents from information contained on this website. 


References:
1. RETIREMENT AND RE-EMPLOYMENT ACT (CHAPTER 274A)
2. Labour Force in Singapore 2017 (2018, January 26)
3.  S.A Lee., J. Qian (2017) The Evolving Singaporean Welfare State SOCIAL POLICY & ADMINISTRATION ISSN0144-5596 DOI: 10.1111/spol.12339 VOL. 51, NO. 6, November 2017, 916–939
4. A flat every 45 minutes. (1964, August 31). The Straits Times, p. 10. Retrieved from NewspaperSG.
5. The impeccable logic of Medisave (2015, August 9), National Day Special 2015 | A toast to an improbable nation: 1984, The Straits Times
6. Cheong, C. (2005). Saving for our retirement: 50 years of CPF. Singapore: SNP Editions, p. 152. (Call no.: RSING 368.40095957 CHE)
7. Cheong, C. (2005). Saving for our retirement: 50 years of CPF. Singapore: SNP Editions, p. 153. (Call no.: RSING 368.40095957 CHE)

I'm retrenched: 3 things to think about

When it rains, it pours. In life, we always have to be prepared for the unexpected. I was just posting about how one should have a Plan A and a Plan B for his/her career on 31st March and here I am one week later, retrenched at age 31! It took me a while to process this piece of news and let it sink in. (Note: This is not a post to garner sympathy. Don't.)

I have called a "Safety Time Out" on buying counters as my immediate priorities have been changed, albeit unwillingly. I too, once thought it won't happen to me. At least not so early in my working career but here I am. Unfortunately, due to company restructuring, they have decided to close my whole department and shift operations elsewhere.

Immediate objectives:

• To secure a new employment (there is a bit of buffer time to do so)
• To minimise spending and stay afloat on my current emergency funds.
• To halt further purchase of stocks/Reits until I am employed again.
  (Those already bought will remain for now in portfolio)

Following my own set of advice I wrote on 31st March, my immediate thoughts are:

For circumstances like retrenchment, one can practically:

- Cut down on unnecessary expenses. e.g subscriptions

My subscription plans are already at their minimum after a review 2 years ago. The only thing I can cut further would be my mobile plan expiring late this year or early next year. I would likely switch to data only plan which are in the $20-30 range and not purchase new phone + combo plan. 

- Start thinking of Plan A: Building a career advancement (so you are not easily replaceable)

Tell tale signs were already there and the danger of my industry is that it is quite niche, meaning it is hard to find similar jobs if things go south. I needed to think of a Plan B that would allow me to be more employable.

- Start thinking of a Plan B: In case you are retrenched.

The plan was to start on getting certification in Safety. This will take me a year. I forsaw that there would be changes in my company, and those were communicated to take place in 2020. Unfortunately, it came prematurely.

- Downgrade lifestyle if possible (but not burning another side of candle)
I am currently good on this. Food wise, I won't be saving much except choosing cheaper options.

- Keep an emergency fund of at least 6-9 months of living expenses in the bank

I am good to go for this. Have ample to stay afloat for now. I will still have some income coming in.

As some readers would know, K.C. is in the oil and gas sector. This is a sector that has been ravaged badly from the oil crisis in recent years and certain areas have not recovered. There are also intense competition for business.

A globalised workforce:
In a 2016 article by CNA, they interviewed a few people who lost their jobs and were under 30. My opinion is that depending on the sector you are in, the Singapore market has already been like this for some time and a globalised workforce means that the rice bowl that you and I have now are ever so easily replaceable. Your job could be here, but gone tomorrow.

Bank executive James Ng* was retrenched this May when his job at an American bank got offshored to a cheaper country. The 26-year-old had been processing credit card applications at the bank for three years when he was laid off.
“I wasn’t too surprised (by the retrenchment) because my job scope was being reduced as the workload increased for the team in the offshored country,” he said, adding that his last duties at the bank consisted of training colleagues in the Philippines to do his job.

“The younger ones got retrenched first, in my case. This is because the seniors are the ones who contribute to revenue,” said Desmond Kok*, 28, who was retrenched by National Oilwell Varco in May.
At the time, the mechanical engineering graduate from National University of Singapore (NUS) was less than halfway into his four-year trainee programme with the US oil and gas firm.

Anyone can take our place anytime if our employers decide to shift operations elsewhere. Companies may also regularly use "restructuring" to get rid of redundancy. Many MNCs may also shift operations elsewhere.

At the end of the day, the job market isn't as safe as we think it is and we would be well right not to take things for granted or be complacent with what we have.

1. It is not your fault (but don't play the victim)
Sure, it feels sucks to be retrenched. But as we can see from the above scenarios, usually it is not our fault that we have been retrenched. Many of us might suddenly feel a sense of loss of direction because we have pinned all our hopes and life around our work.

Our work defines us. When people ask us who we are, we often start by introducing what we do (in our line of work). This sense of identity is now lost.

Take a day or two to process what has just happened but please, do not take your emotions out on yourself or the loved ones around you. We might feel bad about our situation but don't go into self-pity mode or go into a victimised mode. This phase won't last (because eventually we would wake up to our senses and then find a job again). However, if you had acted out badly in the fit of the moment, it might have done some irreparable damage to you and those around you.

We are always finding something to blame and account for why this happened. We could blame others or even ourselves. But, it being a business decision, it is neither discriminate or indiscriminate. Once you have recovered from the shock, just got to move on and look ahead.

Keep your emotions in check. But go easy on yourself and others. 😇 Be more positive.

For me, I'm pretty chill about my situation. However, I would be lying if I said it didn't affect me. To be honest, there are many implications: such as affecting my saving/investing goals or plans to getting married. 

2. Where are you now and where headed from here?
In Sun Tzu, The Art of War, Sun Tzu said: “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”. He also says “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

Only fight a battle you know you will win (where you have the right tools, right resources). We can only do that by knowing where we are and where we are going from here. The immediate goal is to secure employment. The main enemy is not knowing our own value, and what is available in the job market out there. Discuss with your family/ spouse on possible methods to cope. Chances are if you had done planning beforehand and also included this possibility you would now be sitting on some emergency funds. It is not time to hit the panic button, yet.

I wrote an old piece on getting more interview hit rates and it has got to do with understanding what the employers want and giving them what they want (provided we have the relevant skills and not cheating):
https://30yearoldinvestor.blogspot.com/2018/11/interview-process-cycle-how-to-increase.html

I am well aware of my capabilities at the moment and aware of the market. The idea is not to start making excuses for yourself but after the dust has settled, quickly access where we are in our careers. Know what options are available to take and if need be we need to tailor or resumes/cover letters to "win the war". 

We should also narrow down certain goals:
- is it just to secure a position? (can we stomach a pay cut?)
- could it be a chance to upsell instead with relevant experience?
- what industries and jobs are we building into? Are we also changing industry altogether?

3. Take action! Set daily achievable goals.
Break it down into small little daily targets so it is not overwhelming. The task of securing a job immediately puts a lot of stress on ourselves but we can break that down into smaller, easier actionable steps that would lead us to it.

To secure a Job we need to go for interviews.
To land interviews, we need to send out resumes and CVs.
To send out resumes and CVs we need to be smart about it and edit/ tailor it to suit the job descriptions.

Working backwards,

To secure 1 job offer, it may take 10 to secure 1 (10% success rate)
To get a job out of 10 interviews (10% success rate), 20 interviews (5% success rate)
To secure 1 interview might take alot of CVs sent. Every 5 CV sent (20% success rate),
10 CV (10% success rate)

Idea is this: If we do not send out enough CVs, there won't be interviews. If we don't go to enough interviews, we can't possibly hope to land a job.

I think by now, it is clear that sending a few well-tailored quality CV or resume is better than mass spamming a generic one. Assuming we do 1-2 quality one per day for a month, we would have sent out at least 30 applications. Some industry might be smaller and have lesser openings, that is fine.  

I will keep to one quality CV per day. Until I exhaust the possible openings I can apply to. Its a numbers game.

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If you are retrenched and happen to read this, know that you are not alone. This is only a passing phase of life. It won't be fatal, unless we let it fester and rot. 

Edit (30/6/2019): I have since secured employment. Find out how I did it at https://30yearoldinvestor.blogspot.com/2019/06/retrenchment-and-25-pay-increase-that-i.html

Until Next Time, 

K.C.

If you like this post, you might like our facebook page as well. I'm also on Investing Note.

Related topics:
1. About K.C. What is my story?
2. My 3Cs to money/investing
3. Why you need to set aside money for savings first
4. Interview process cycle: How to increase your interview rates
5. My 2018 Year end review

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