Tea with TheMinimalist: How I Made 300%+ Returns (US$1,930) On One Trade In Less Than 24 Hours (Part 1).

After a long break, here is another guest blog by a regular reader, TheMinimalist:

How I Made 300%+ Returns (US$1,930) On One Trade In Less Than 24 Hours (Part 1)

 

I was scrolling through Facebook on Sunday morning when I saw AK sharing an article I wrote in 2014 (http://singaporeanstocksinvestor.blogspot.sg/2014/09/tea-with-theminimalist-financial.html). Curiously, one of the readers remarked on how I am doing now.

 

To the reader (Raymond Ng), rest assured I am doing fine. Due to some personal life issues (Nope, it’s not infidelity. This writer is actually still single ^^), I decided to take some time off to work on myself.

 

Ah…but let’s cut to the chase shall we. How in the world did I make 300%+ ROI in less than one day?

 

I know what you are thinking. “Bullshit. Impossible. Must be using AK’s platform to sell his super discounted *$8,888* trading course.” 

 

Nah. I have far better things to do in life. Really. Don’t believe me? By the way, here’s a screenshot of my trade:

 

 

Here’s what the above screenshot means. I opened a trade on ULTA on 10^th March, 3:16am for $640 and closed my trade on 11^th March, 2:07am for $2,570 for a total profit of $1,930 (302% ROI).

 

You must be asking “Why am I so nice to share ah. The Minimalist must have some hidden agenda.” And yeah, I certainly do. Before I bare my soul to you, let me ask you this “How much $$$ are you making on your investment portfolio? +7%? +20%? +100%? Oh my god, it’s negative! Oops!” The second question is “Are you taking responsibility for your investment results?” Refer: http://singaporeanstocksinvestor.blogspot.sg/2016/02/reader-is-disappointed-and-ak-tries-to.html?showComment=1456064964691#c1110078454901096323

 

You see. We win, we (think we) are geniuses. We lose, must be AK’s fault. No wonder AK is blogging less these days. Tsk tsk!

 

I look at my investment results. I am not happy. What did I do? I decided to pick up a skill set (options trading) to boost my investment returns. And I am reaping the benefits today. J

 

My message is this “Be responsible. Stop blaming others for your failures. Stop envying others’ successes. Analyse why you failed. Then change. Success is just a few steps away.”

 

If I were intending to sell you my super discounted *$8,888* trading course, I would have stopped here. If I want to be an ego-manic and brag about my trading results, I would simply post it on Facebook and feel exponentially good about myself with each like. Sad huh. We both know plenty of people in our lives that do this.

 

But you know I am not like that. I am a nice guy. J

 

Before I start talking to myself and share with you my trading “secrets”, I have to be upfront and tell you that such a result is atypical. This means that the opportunity to generate >100% ROI in less than one day comes by once in a blue moon. Like once every two months if you are lucky.

 

In addition, such a trade is extremely risky. It means that instead of making 300% returns, I could have easily suffered a 100% loss.

 

The trade that I made is based on a trading strategy called “Earnings Play” and there are four parameters that I use to shortlist and identify such stocks.    

 

The detailing of my trading strategy will be revealed in Part 2 of this article. J

 

P.S Ah, disappointed? Tell you what, if this article can garner more than 88 likes on Facebook, I’ll be more than happy to pen out my trading strategy in Part 2 of this article and share it in like 8 days time? Come on, at least you are not paying $8,888!    

 

Tea with TheMinimalist: Selecting a good financial advisor.

I am happy to publish another guest blog by TheMinimalist and this time the focus is on how to select a good financial advisor:

In this guest blog, I want to talk about a topic that is close to the hearts of many readers here which is picking a good financial adviser to work with. 

Why is it important? The reason is that the majority of us are clueless when it comes to managing our money. That’s why we read blogs like ASSI, which, in my opinion, is one of the best places to start in educating ourselves on the topic of personal finance.

Seek to establish a lifetime relationship with your FAs.

It is unfortunate but from my regular interaction with financial advisers (FAs) in Singapore,  I notice that most of them have no freaking idea about financial planning. I notice that they like to forge transactional relationships with their clients. What this means is that they approach their prospects, present their sales script, address any possible objections and then close the prospects. Rinse and repeat.

I find this a very worrying situation in Singapore. 

Firstly, financial planning is all about systems and processes, NOT products. For example, how can one set up a disciplined system to save at least 10% of one’s income each month? The answer can be found in my previous guest blog. 80% of the financial advisers will not even bother to go through this with you. Why? They don’t earn a single cent, duh! (Take note that most FAs in Singapore are still commission-based, a terrible system if you ask me.)

Secondly, financial planning extends far beyond selling insurance products. An obvious area to bring up here is investment planning. I am seriously surprised by how most of the FAs are lacking in investing knowledge. Ask 80% them about fundamental/technical analysis and they simply give you a blank look. For those new to AK’s blog, fundamental analysis (FA) and technical analysis (TA) are the main due diligence processes before making an investment decision. FA tells you what to buy while TA tells you when to buy/sell off your investments. 

It’s not difficult to be financially literate so long as you are willing to put in the time and effort to pick it up.

Now, what do I consider is the million dollar question to put to your prospective financial adviser? Here’s the answer:

“Could you show me your financial plan?”

Huh? That’s it! Not education level? Not net worth? Not personality? Those are important questions but they are NOT the most important one.  Here, let me explain why.

Majority of Singaporeans do not have a written financial plan!

A financial plan (or financial blueprint) is the best piece of evidence to reflect the competency of a FA. Logically, you engage a FA to manage your finances for the long-term. If the FA cannot even plan out his own finances, how in the freaking world will you ever expect him or her to be capable of advising you on your finances? 

To give another example, you will not ask a designer to renovate your new house based on some arbitrary designs right? You will show designers the blueprint of your house, tell them what you would like installed in the living room, study room etc. You will talk through the plans with them; confirm that you are satisfied with everything first before starting renovations.

I previously mentioned that the FA industry is under-developed due to the commission-based system. This is mainly because the interests of the FA and the client can never be aligned. The FAs are focused on closing sales, selling high-premium products that can generate the highest % of commissions for themselves. Budgeting with the clients? Er...

Am I recommending a fee-based system then? My short answer is yes but this is not the best solution. This is because fee-based planning in Singapore is very expensive. A typical financial plan with a professional financial planner can cost upwards of S$4,000. (AK: Wow!)

What is the best system then? In my opinion, it is self-education through experts but I’ll leave this discussion for another day.

Since I like my blogs to be practical, here are some actionable items for you:

1. Find out what a financial plan is. Talk to a professional planner. If you can’t afford to engage one at the moment, do not worry. I’ll discuss constructing a DIY financial plan for yourself in future guest blogs.
2. If you are meeting financial advisers now or in the future, ask them to show you their financial plan. If they can’t produce one, please think TWICE about engaging them for their services. He or she is a financial salesperson, NOT a professional planner.

P.S If you have found my guest posts useful; please feel free to share it among your friends via FB or e-mail. J

Note from AK: 
I think I shall have to t-loan from SMOL his instant noodles cooking pot on behalf of TheMinimalist. Works quite well as a helmet.

Read other guest blogs by TheMinimalist: here.

Tea with TheMinimalist: If Personal Finance and Investing were a religion, what would be your denomination?

The Minimalist, a mysterious and wise man, has contributed another guest blog to ASSI. I hope you enjoy reading it as much as I have:

Over a podcast interview with AK71, he shared that “Investing is a religion”. I can relate to his statement on so many levels. Firstly, there are so many different denominations like value investing founded by Benjamin Graham and David Dodd or permanent portfolio by Harry Browne. Secondly, you cannot “force” someone to adopt an investing style that they are not comfortable with. For example, my best friend is a conservative investor and is satisfied with investment returns that match the inflation rate (3% to 5%). People like my best friend would be best suited for the Permanent Portfolio.

With so many religions in the world, which one is the best for me?

During my university days, I went through a “quarter-life crisis” and was very lost with what I wanted to do in life. Upon the advice of some friends, I decided to turn to religion. As I started reading different religious texts (such as The Bible; Dhammapada; Dao De Jing), attending services, I realise that these religions share common truth. I will share two points that have benefitted me the most. The first one is to engage in meaningful and purposeful work. The second is to love and serve people.

For readers who are new to personal finance and wish to take charge of their finances, where is the best place to start? In my humble opinion, the Bible of personal finance is “The Richest Man in Babylon”.

In this book, it states the 7 universal principles of personal finance. When you secure a copy of this book, read it once, read it twice and commit the principles to heart. More importantly, PRACTISE it. Success only comes by taking actions, NOT by reading. (I have never come across a book that is titled “Read and Grow Rich”) 

After reading the bible of personal finance, feel free to research the different styles of investing and adopt one that you are comfortable with. One of the best ways to shorten the learning curve is to be a mentee to someone who has successfully applied those principles. (Maybe, AK71 can start a mentorship program and start with coaching his mentees to eat oatmeal for breakfast, lunch and dinner. Cheap, healthy and nutritious!) 

Breakfast of champions'.

A word of caution.

Make sure you are learning from the RIGHT people. I am sure many of you have read of religious leaders in Singapore who have fallen into the money/power trap. Or finance trainers who promise infinite riches by paying $X,XXX to attend their courses.

The end goal of personal finance/investing should be financial freedom where our assets generate sufficient passive income to cover our expenses. The means should justify the ends. If your mentor makes his money through insider trading (illegal), excessive leverage (dangerous) or guess-work (lazy), you might want to reconsider learning from this person.

To end off this blog post, I feel that there is no religion that is “superior” or “right”. Everyone should make a well-informed decision on the faith that he or she is comfortable with. Do not convert yourself to a certain faith just because your wife/husband/best friend/teacher is of that faith (I am a deist for those who are curious about my faith). Similarly, there is no personal finance philosophy or investing style that rules supreme over all others. If you are uncomfortable eating oatmeal for breakfast, lunch and dinner, then don’t do it! (Right, AK71?)

Here are some actionable steps to get you started on taking charge of your personal finance:

(1)    Grab a copy of the book, “The Richest Man in Babylon”

(2)    Read and memorise the seven universal principles of personal finance

(3)    Plan and write down specific steps on how you would apply each of the seven principles. For example, you want to apply the first principle “Start thy purse to fattening”. To do this, you write down “On my next payday, 16^th Oct 2014, I’ll set aside S$500 from my S$5,000 paycheck to a designated savings account with OCBC.”

If you like what I have shared in my blog post, feel free to e-mail or share with your friends on FB.

Richest Man in Babylon
Buy pre-owned with free shipping worldwide at US$6.98 a copy.
Read and learn 7 important lessons in life:
1. Pay ourselves first.
2. Live below our means.
3. Put our money to work.
4. Always have insurance.
5. Our home is a consumption item.
6. Plan early for retirement.
7. Upgrade our knowledge and skills.

Read another guest blog by The Minimalist:
Financial planning? Start with why!

Related posts:
1. Getting paid more while waiting for opportunities.

2. Motivations and methods in investing.
3. If we are not rich, don't act rich.
4. A common piece of advice on saving.
5. Do you want to be richer?

Tea with TheMinimalist: Financial planning? Start with why!

This is a guest blog by a mysterious and wise man with the codename: TheMinimalist.

Many of us reading financial blogs such as ASSI understand the importance of planning our finances. The maxims of “Spend less than you earn”, “Invest in ETFs/Index Funds” and “Protect ourselves with insurance” immediately come to mind.

We KNOW it is critical to do all the above yet we DO NOTHING about it. Why?

It wasn’t until I met a university friend that I finally got my answer.

Recently, I was looking through my FB news feed and saw that one of my university friends changed his job recently. I didn’t really talk much to him back in school but was curious about how he is doing. It has been about 3 – 4 years since I last saw him. I decided to arrange a nice dinner with him after work.

While I was waiting for him at Raffles City Starbucks, I saw a guy that somewhat resembled him but he looked “bigger” so I looked away. Then, that guy started messaging on his iPhone. “Ok, I think that’s him” and I was spot on when I received the whatsapp on my phone. “Oh wow, you look more prosperous since I last saw you huh…” I commented. “Yeah, I have gained 6-7 kg since I started work, haven’t exercised much you see…” he explained.

My Body Mass Index (BMI) is 21.7 and falls within the normal range. However, the fear of becoming a “fattie” motivated me to take steps to lead a healthier lifestyle by:

• Exercising more frequently after work
• Opting to eat fruits and nuts for my dinner
• Controlling the amount of food intake for each meal

The ongoing efforts of such a healthy lifestyle have paid dividends and I am currently feeling “lighter” and better.

So what is the lesson here?  

 

“Humans are VISUAL creatures, we ACT by EMOTIONS, not so much with reason.”

We can read millions of books on investing, read every single blog post by AK71 and, yet, NOT be motivated to do anything about our money. However, when we SEE our peers doing much better than us during the class reunion, do we not feel something stirring in our hearts? Yes, that feeling that we are not good enough and that there’s so much more we can do in our lives. 

Now, if you are currently struggling with motivations in personal finances, I think I might just have the solution for you.

Here are two simple things you can do immediately to start turning your financial life around:

1.     Find someone who is more successful than you financially (Psst…AK71). Ask him out. Buy him a nice dinner at Tim Ho Wan. Learn as much as you can from him about budgeting, investing and insurance. Most successful people will happily oblige. After all, people LOVE to talk about themselves. Fact of life. 

2.     Find someone who is doing not so well in his or her finances and ask them out for coffee. They can be knee-deep in debt, spending more than they earn, invested in “scams” etc. Your intention is neither to mock them nor to sympathise with them.  Instead, be curious and figure out what got them into such trouble in the first place. Most of the time, it’s due to bad decisions and not by circumstances.

Ask yourself and decide (out of the two) who you want to be like in 3 years' time.  

Next, take out a piece of A5 paper and write down ONE specific thing you will DO from today onwards to better manage your finances. Then DO it.

If you need some inspiration on actionable items, here are some resources you can turn to:

Achieving level one financial security for Singaporeans.

Save 100% of your take home pay! What?

If we are not rich, don't act rich! 

Every single time you find yourself faltering, think back to the two people you have just met. Who do you want to be like in three years’ time? The answer (to your future) is in your hands.

Go try it and share your experience in the comment box below or FB. I look forward to your response to my debut guest blog! J 

AK's note:
I think I have been blogging too hard lately. I might take a long trip overseas to take a break. I should be un-contactable by all modern communication devices then. So, unless courier pigeons are available, invitations to have dinner at the atas tim sum restaurant might not reach this fatty.  -.-"