Is it too late to invest in Bitcoin?

Is it too late to invest in Bitcoin?

Happy Birthday!! On 12 Jan 2009, Nakamoto sent 10 bitcoin to Hal Finney. This became the first “transaction” in bitcoin history. 12 years later, prices of Bitcoin exploded to reach USD$40K (on 9 Jan 2021). What a journey! Such exponential increase in prices tend to spike interest among the retail investors on their wealth management journey. If you reading this, welcome to the club.

In this article, I will write about my understanding of bitcoin, where we are at the moment and also answer an important question in your mind.

Is it too late to invest in bitcoin?

Is it too late to invest in Bitcoin?

Is it too late to invest in Bitcoin? Source: Logo vector created by starline

Disclaimer: I don’t claim to be an expert in Bitcoin. All views represent my own. I would love to engage in a healthy discussion of bitcoin in the comments section below.


Context Of Bitcoin: Currency Of Trust

Bitcoin was born slightly after the full swing of the banking crisis. What started as a subprime mortgage crisis eventually created a domino effect that crippled the ENTIRE world financial system. You can imagine the distrust in the financial industry at that time.

The original Satoshi Nakamoto white paper states: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

Financial institutions now have new and stricter regulations to comply. At the same, another school of thought arose. Skip the financial institution altogether. It is what it meant by disruption. Imagine a world where you can make financial transactions without going to a bank. This loosely translates to a more efficient and cheaper financial services.


This is where Bitcoin was born.

Bitcoin is positioned to be the “currency of the future”. This boils down to back to the fundamental of money which is trust. The US Dollar has been positioned to be the global currency because it is widely accepted and “trusted” (consider why you won’t want to hold Zimbabwe’s currency). 61% of all foreign bank reserves are denominated in U.S. dollars, and nearly 40% of the world’s debt is in dollars. On the dollar bill, you will see this world called legal tender which means that it is acknowledged by the laws as a mechanism to settle a private or public debt or in order to meet a fiscal responsibility which includes paying taxes, abiding by contracts, and finally damages or fines.

Bitcoin is making waves as it becoming more “widely accepted” (I will discuss more about this later). It is also “trustable” as it is backed by blockchain technology. To put loosely, blockchain technology is used to share valuable data in a secure, tamperproof way. That’s because blockchains store data using sophisticated math and innovative software rules that are extremely difficult for attackers to manipulate. At this moment of writing, Bitcoin is not legal tender yet but is deal with as property or goods.

For a deeper understanding of cryptocurrency, blockchain technology and bitcoin, here is a good article by PwC.


Can it ever be used as money?

In the economic literature, something can only be used as money when it has these 3 functions. A medium of exchange, a measure of value and a store in value. Perhaps the heavily debated issue is if Bitcoin if it has a store in value.

Is there a store in value?

Bitcoin Price Volatility

Bitcoin Price Volatility

Consider this graph on the volatility of bitcoin over the past year and also past 10 years. The prices of bitcoin was never in any sense stable (which is what makes it exciting). Prices volatility have been north of 20%. A store in value is defined as something that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. Whether you are a bull or bear for bitcoin, I think we can agree that there is no predictability for the value of the coin in the near future.

Is it being used as a medium of exchange?

While Bitcoin transactions has been increasing over the years as it slowly become more “widely accepted”, we are unsure how much of it is being translated into real goods and services. According to newbtc, only 33% of bitcoin transactions are being used to purchases goods.

Bitcoin Transaction Trend

Bitcoin Transaction Trend

That being said, I believe that there will be more transactions in future. My question is IF my Bitcoin is appreciating at such an insane level, why would you ever use it to buy something? Taking a note back into May 22, 2010, now known as Bitcoin Pizza Day, Laszlo Hanyecz agreed to pay 10,000 Bitcoins (USD$400,000,000 or USD$400million today) for two Papa John’s pizzas for USD$25. Who in the right mind would want to use Bitcoin to buy anything? Imagine something that you bought at $25 then would now be USD$400million. There would be an extreme incentive to keep money or HODL (someone that keeps cryptocurrency rather than selling them).

Will more people start to use Bitcoin?

It is written that there is an “increasing adoption” of Bitcoin. I have my doubts as shown by this Bloomberg article. About 2% of the anonymous ownership accounts that can be tracked on the cryptocurrency’s blockchain control 95% of the digital asset. Due to the finite nature of Bitcoin, an increasing adoption have to mean that the number 2% should start to go up. I believe there are some whales that are currently holding the bulk of Bitcoin for it to be used meaningfully as money.

Personally, I believe the original intent of it being used as money is now being shaken.


Bitcoin As An Investment Speculation

While I believe the original intent of Bitcoin have not been carried out, you cannot not deny that the people have been making money on it. Whether Bitcoin should be invested depends on who you are asking or who you are.

Futuristic Individual – Yes. We will be using cryptocurrency in future.

Value Investor – No. Because there is no value creation in Bitcoin (No revenue/cashflow/earnings).

Technical Analysis Trader – Buy at signal. Sell at signal.

Bullish Retail Investor – Hell Yeh. Huat ah!

Bearish Retail investor – Run for the hills! Let me tell you a story of the Tulip bubble.

Personally, I believe that there is room to speculate on this. With no foreseeable future usage (in my own humble/limited capacity), I feel that it is a strange asset class but an attractive tradable instrument.


Final Thoughts By Wealthdojo

There are still many things shroud in mystery. Who is Satoshi Nakamoto? Who are the 2% who is holding Bitcoin’s wealth? Are they the Russians, Chinese or terrorist? We will never know (at least for now).

With Bitcoin entering into the financial system, they have became part of the system they have set out to replace. The disruptor seemed to have become absorbed into the legacy system. The banks will live another day.

All views represent my own. I would love to engage in a healthy discussion of bitcoin in the comments section below.


For those of you who want to kick start your Wealth Management journey in 2021, why not consider joining my telegram channel?

Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.


The Year of Impact 2020 What did it teach us

The Year of Impact 2020: What did it teach us?

2020 has been an exciting year. Words like “WFH”, “Zoom”, “COVID19”, “Essential workers” that made no sense in 2019 has became buzz words. Everyone has been affected. I believe it will be good to look at this year and see what we can learn from this (this is what I have learnt in 2019). I have invited the best financial bloggers in Singapore to share about what kind of impact 2020 has on them. Let us know in the comments if this resonates with you.

The Year of Impact 2020 What did it teach us

The Year of Impact 2020 What did it teach us?


#1: Wealthdojo says… “Life Goes On”

On 7 April 2020, the Singapore Government announced the implementation of the circuit breaker. It wasn’t pretty. It caused a huge uproar in my company. The financial services industry is one that we need to meet people face to face. My colleagues were worried that our consultancy business will be affected. Almost all of us are anxious to know how we can conduct our business when we cannot meet our clients or prospects. How can we help our clients claim for their critical illness bills if we cannot go out to get their original receipts? Will this be the end of financial services?

In one week, all these questions were resolved. Though, it felt like ages.

In one week, I changed my business processes. I have conducted business meeting with my clients and prospects over zoom. I quickly adjusted to the new norm while learning new skills. I have also helped my clients transit into the new norm with a special message for them.

Life Goes On.

Those that didn’t adapt into the new norm were left irrelevant quickly. We shouldn’t be complacent thinking that things will remain the same. Business trips fell almost 100%, there is huge transition into E-Commerce, we are primarily working from home. I believe many things will change over the years. 2020 just accelerated many changes.

Keep Relevant. Life Goes On. 

For those of you who are new, check me out at 6 Levels Wealth Karate.


#2: Frugal Youth Invest says… “Slow down pace of life”

If not the circuit breaker, we would have continued to focus on our work or self and overlooked our closed ones. Circuit Breaker has forced us to slow down our pace of life, spend quality time while fighting the pandemic together. 2020 has taught me the importance of work life balance and how we can fall back on our closed one for support, something that we have always overlooked because of our busy schedule.

Check Weiming out at Frugal Youth Invest.


#3 Life Finance says… “Plus ça change, plus c’est la même chose

The more things change, the more they stay the same.

The year started on a high note – stocks kept soaring to new heights, brushing aside the snippets of bad news which popped up every now and then. And then everything went belly-up – markets crashed, economies faltered, and oil prices slumped. In response, interest rates were cut to zero, but still nothing could stop the bleeding. In the chaos, financial pundits opined that the world had changed irreversibly, and buy-and-hold was a fool’s mantra. Instead, they proclaimed, now was the time for selling first to buy back lower when the true crash came, buying alternative investments instead of stocks, day-trade and be nimble. Sell options. Anything but staid and boring buy-and-hold, or even buy-on-the-dips. Fast forward almost a year later, stocks, markets and economies are emerging from the rubble, and the old school buy-and-hold and buy-on-the-dip investors have seen their investments recover, and maybe come out a little ahead, while half the pundits have vanished.

Sounds familiar? But that’s not about 2020. That’s the story of 2008.

Check Life Finance out at LifeFinance.


#4: Rachel says… “Struggles happen in your life for a reason”

2020 taught me that I can get through anything. Whenever you’re struggling, it can seem like the struggle will never end. But struggles happen in your life for a reason. They teach you how to be resilient and maintain faith in yourself to get through it. I’m grateful for the tough times that 2020 has brought into my life because I’ve learned a lot about myself in the process.

Check Rachel out at heyitsrachel.


#5: Jocelyn says… “Regain some work life balance”

2020 will probably go down in memory as the year of upheavals and change. I count myself among the lucky ones to have been able to keep my job and health during this trying year. I picked up a new craft during circuit breaker out of interest and a desire to fill my time. That has grown into an online business selling handmade crochet items! It is not easy to juggle a full time job with a side business selling time-intensive handmade items but it has been incredibly fulfilling 🙂
On the investing side of things, I made a good call to pivot away from our local shores in search of better growth opportunities. Cloudflare, Alibaba and Tencent are some of my frontrunners of the year. Looking ahead to 2021, I hope to regain some work life balance and continue growing my portfolio!

Check Jocelyn out at Financial Freedom by 40


#6 Marc says… “Focus & Prioritising”

For many, 2020 has been the age of information overload & massive overwhelm. While it’s great that many of us have been making full use of the time in lockdown to learn, upgrade and upskill ourselves, many of us have been caught up with watching too many programs, participating in too many workshops and learning from too many online courses. Because of that, lots of us are stuck, paralysed, and have not progressed as much as we would like. And so, I realised that instead of just absorbing new information into our lives, taking action, aka “implementation”, plays a huge part if we want to grow too. As our time and attention is limited, this also means Focus & Prioritising is extremely important too – and if not, we will just be trying to sign up for every webinar or Facebook Live and just hopping from 1 topic to another (potentially wasting thousands of dollars & countless hours of our precious time & money in the process.

Check Marc out at Master Implementers.


#7 The Moss Piglet says… “Reflect and to identify the mistakes you have made”

2020 is the year I learnt to appreciate everything I have.

This has been a long year. I am convinced that 2020 had more than 12 months. The first quarter was going great for me. Projects were moving smoothly, stocks that I bought were going up. Those months are now a distant memory and it sure feels like they happened in a different year.

Then Covid-19 hit and it all became a blur. First off, I hope that everyone that was directly affected by the virus is doing okay. I found myself having more time to spend with my wife and 1 year old kid, this I truly appreciate. I also found out that it was near impossible to work at home while taking care of your restless child. Others were not so fortunate, my poor workers were locked up in their dormitory rooms for 4 months. Each of them were so afraid of getting tested positive of the virus. From them I learnt to appreciate what I have and the importance of extending your care and concern for others’ well-being.

It is an important time to reflect and to identify the mistakes you have made. After every storm comes a rainbow. I am sure that there will be a lot of opportunities post Covid-19 and we must prepare ourselves to capitalise on that.

On a final note, I would like to wish all Wealthdojo readers a brand new 2021 with happiness and good health. Cheers.

Check YeeSiang out at The Moss Piglet.


Final Thoughts By Wealthdojo

Wishing you guys the best! It is less than 30 days before 2021. It is a time to reflect on what happened in the previous months and see what we can learn from this year. Don’t let it go to waste!

Write down your reflection in the comments below! I look forward to see your comments.

Special thanks to Weiming, LF, Rachel, Jocelyn, Marc and Yeesiang for your contributions and wishing you a great 2021 ahead!


Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

5 Ways Tony Hsieh Changed The World Quote

5 Ways Tony Hsieh Changed The World

This post is dedicated to Tony Hsieh. He died on 27 Nov in a house fire. He is well known to be the CEO of Zappos which was later sold to Amazon for USD$1.2Billion. In his years, he made many impact to the world and these are the some I’m personally thankful for.

This is a non personal finance post. However, I believe we can learn from the actions and the values that he had. Here are 5 ways Tony Hsieh changed the world.

5 Ways Tony Hsieh Changed The World Quote

5 Ways Tony Hsieh Changed The World Quote


The Fore-Runner For E-Commerce

People would have agreed that Alibaba, Lazada, Shopee or even Amazon to be the success icon for e-commerce. To put things into perspective, Amazon started in 1994, Alibaba started in 1999 but only found success years later. Zappos started in 1999 and found resounding success by doing something that people thought was crazy then.

They sold shoes online and offered free 60-day shipping AND returns policy. In 2003, Zappos decided to give customers 365 days to return the shoes, as long as they were in “like new” condition and in the original box.

In 1999, this was a crazy idea. It was a time people bought shoes from stores because people could actually try them to see if it fits. Mind you, there was barely any online shopping and a lot of distrust buying things online. Many people also thought that the return policy would kill their financials as it was expensive then.

Fast forward 20 years later, you can buy almost anything online and return policies are a norm. They were certainly way ahead of their time. Do you have an idea that people thing is crazy?


The Focus on Customer Service

In an era in which we demand cheaper and better products, Tony focused on customer service. Many businesses become so focused on the product or service that they end up forgetting the most important factor that ensure their business prosper: their customer. Tony did not.

In 2004, Zappos’ customer loyalty team embarked their 24 hours a day, seven days a week, 365 days a year shift. In a world where customer service is a cost center, Zappos employed 25% of their staffs (2004) as customer services. There are no scripts and no time limits on phone calls. It was just a full time job making sure their customers were happy.

Fast forward 20 years later, your business’s reviews online can make or break your reputation. Just look at how Lemonade is focusing on customer satisfaction now. Have you gave a good review to someone recently? Maybe you can do so for me =)


Quirky Corporate Culture

After Amazon bought Zappos over, the employees in Zappos was afraid that the corporate culture in Zappos would change. Amazon was known to have an intense corporate structure as compared to Zappos experimental, fun and quirky culture.

Tony maintained the culture and Amazon has been keeping a hand-off approach for Zappos.

In the famous CEO statement, Tony titled his speech “Zappos And Amazon Sitting In A Tree” and assured the culture will remain the same or better. It is one of the best CEO statement I have ever read. In it, he reassured that his employees will still have a job and the leaders will continue running the company. Please have a read.

Personally, I related to this strongly. I’m working in the Financial Services Industry where our performance are measured with sales. It is not a secret that the company I work for is profit driven (just like most companies). However, I’m blessed to be in a District (aka sales team) where we measure success differently. As a result, the culture of the district is one that focuses on delivering the best value to our clients in terms of strategic planning and also claim experiences. I’m very thankful as I don’t think it will be easy to find a company that is accepting of a culture like ours. It is much easier to focus on my client needs in such a very supportive culture. Does your company have a supporting culture?



When asked what was his greatest achievement, he mentioned:

“The relationships and friendships. We focus a lot on company culture, so these are not just co-worker relationships but true friendships, where people choose to hang out with each other after work or go on trips together. [That also applies to] the relationships with our vendors and other business partners.”

In an age where we are more connected digitally but disconnected physically and emotionally, his focus on relationship struck a chord in my heart. I have friends (whom I don’t hang out much anymore) who were constantly on their phones, checking their emails/Facebook notification/ Instagram notification during the time we were having lunch/dinner. Connecting with them was a struggle as they will be distracted every 3 seconds looking at their phone. The relationship that we have now are conveyed through a “like” on Facebook and it disturbs me greatly. I do treasure the Facetime I have with people now.

Tony’s focus on relationship (you can have the same with wealth) inspires me and I hope that it will be my greatest achievement in my life too. When was the last time you sat down with someone and look into him/her in the eye and talk?



5 Ways Tony Hsieh Changed The World Delivering Happiness

5 Ways Tony Hsieh Changed The World Delivering Happiness

One buzzword for the younger generation would be “Happiness”. Although his book is on business lessons, it is applicable to many life lessons. One of my favourite is “Go with your heart”. This statement is easy to say but not easy to practice. Sometimes, it would mean breaking expectations that has been subconsciously imposed on us.

In the world’s culture asking us to do more, earn more, it is not easy to go with your heart. I dare say that most parents want their children to be an engineer, doctor or a managerial job that is “stable”. It took me great courage to go with my heart by venturing into the financial services industry and also the investment industry. There were many heartaches, my parents felt it was a waste for a University Graduate to be an insurance agent, , many times they asked me to find a “real” job, many times I felt like giving up. Nevertheless, in every leg of the journey where I followed my heart, I learnt more about myself. It wasn’t easy but then again life never was.

Are you following your heart? What is your heart saying?


Final Thoughts By Wealthdojo

Things are never really the end. It is the start. Because of Tony, I believe many people have believed things are possible and we are living in their version of the world that they have dreamt up.

What’s your vision of the world? Are you participating in your vision or are you letting people fill it up for you? Are you the educated poor? If today is the last day you are living, what would you be doing?

Look forward to see your comments.


Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

The Biggest Personal Finance Problem The Educated Poor Outdated Game Plan

The Biggest Personal Finance Problem: The Educated Poor

We have a problem.

We have a big problem.

We are living in a post war era. Majority of the world are living in peace. Education are not meant for the privileged rich anymore. We have access to knowledge to Universities and Google. Jobs are readily available. We are literally working at home right now. Our system being flushed with money.

According to the World Bank, the 2019 literacy rate is at 86.47% as compared to 66.91% in 1976. Back closer to home, Singapore’s literacy rate stands at 97.34%, with 88.89% of our population having enrolled in tertiary education. It is impressive how far we have become in terms of literacy.

Despite that, CareerBuilder found that 78% of U.S. workers are living paycheck to paycheck. In Singapore, we can only guess the amount of people who is living from paycheck to paycheck as we do not have a statistic on it. Based on an article by HRAsia in 2015, 14% (of Singaporeans) have no savings at all and the most surprising find was the 37% of the top-income bracket is essentially spending everything they earn.

While we are getting more educated, we might be leading into a new generation that will be known as “The Educated Poor“.

To save this generation of the Educated Poor, I have created the 6 Levels Wealth Karate to guide and help them escape misery. Are you one of them?


Are You the Educated Poor?

We assume that the more educated we are, the more successful we will be. This was in fact, the mindset that has been ingrained into us by our parents since we were young. Our parents live in a different era. My parents often told me stories of the rich having the privilege of going to school. The rest of them had to help out at home, their family’s businesses or take care of their younger siblings. Some of their siblings who are lucky to have some education went to the workforce and saw how they missed out on promotion because someone else had a “higher qualification”. Therefore, their generation are willing to sacrifice, to eat less, to work overtime to give their children the opportunity of higher education. It is to some of their greatest regret that they did not have a Degree and their greatest pride when their children got their Degrees. Hence, it is of no surprise that the current generation is more educated.

As the current generation becomes more educated, it is less of a signaling effect (You might have studied this in your Economics modules) to the employers anymore. Education is now a necessity and less of a differentiating factor.

Before this article gets too scholarly, I have observed some similarities in the Educated Poor and hope that by identifying them, you can have clarity if you are one of them. If you are, we welcome you to be enlightened.


#1: The Great Paper Chase

Much has been said about the pursue of education. If you reading this, you are probably among the 88.89% of Singaporeans who have a tertiary education. If left unplanned by your parents, it will become your first biggest expenditure after University.

With reference to another article on how to be free from the burden of university debt, I graduated in 2013 with a Bachelor (Hons) in Mathematics and Economics in Nanyang Technological University. I cut my University studies short from 4 years to 3.5 years to save on cost. In total, my degree costed $20K. My peers and I have a typical debt of between $20K to $40K after graduating. We will then spend the next 2 to 5 years to clear your University debts.

During the time when you are working, you might have anxious peers who have Masters or taking a Part-Time Masters. Some of you might be job hunting and while waiting, started a Masters to boost your resume. This is known as the great paper chase.

To remain competitive, the first instinct that the Educated Poor have is to get a higher qualification.

Don’t get me wrong. I believe in education and also believe in higher qualification IF it is necessary. For example, I will appreciate my surgeon to be academically competent.

However for most of us, we believe that having a higher qualification will lead to a higher pay. From my peer’s experience, not only the pay increase was insignificant, they are now “too over qualified academically” for their job and to add insult to injury, they are down with a heavier debt to repay in the next 5 years.

The Biggest Personal Finance Problem The Educated Poor Paper Chase

The Biggest Personal Finance Problem The Educated Poor Paper Chase (Source)

Do consider getting higher qualification if it make sense. Here are some examples (not limited to the following) when it make sense.

  • Your qualification is necessary for your career advancement
  • You can only attain the skill set from the Masters
  • It fits your long term goal
  • Networking in your industry

The mindset of an Educated Poor is to “remain competitive” by getting a higher qualification. However, they may suffer the debt consequence IF the qualification does not open the doors for them.


#2: The Great Material Chase

Money can buy many things. Our minds are programmed to keep wanting something new, something better, something different. Rachel did a guest post for me that talked about 3 Money Beliefs That Will Destroy Your Life. Let me quote for you my favourite phrase she used. 

It’s funny, though, because our happiness actually comes from the absence of wanting. When we’ve gotten that new [insert material thing here], for a moment we don’t want anything else. But once our mind gets bored, it looks for something else to focus on…

This is just one reason why we want to buy something.

However, I believe this stems deeper. You may have experienced buying something on impulse, used it once or twice and then allowed it to collect dust after that. You are not alone in this. I have many random objects in my house which I bought because I thought it looked cool. It has been sitting on my table coolly after that. Actually, you are really not alone, the whole world is together with you on this. In May 2020, consumer debts hits new record of $14.3 trillion. People are buying things on credit!

The Biggest Personal Finance Problem The Educated Poor Material Chase

The Biggest Personal Finance Problem The Educated Poor Material Chase

People buy things based on emotional needs or wants, and then justify their purchase logically.

A common observation I have noticed is that some people connect their self worth to the things they have. This lead to great material chase. I once known a lady who spent $6,000 on a Channel Boy to show the world (her friends and colleagues) that she is doing well in life. The Channel Boy was bought on credit. She racked up a total more than $10,000 worth of credit card debts, was only servicing the minimum amount every month with her cashflow maxed out. When I found that that Channel Boy had a good resale value, I suggested selling the Channel Boy to improve her financial situation.

“What if her colleagues looked down on me because I’m using an xxx bag? Everyone in office is using a Channel or an LV”.

While I hear her point of view, the response shocked me.

PS: The Channel Boy was just the tip of the iceberg.

I’m observing a world where purchases are made because of the emotional need of significance. We have money. Men buy luxury watches and continental cars (maybe Tesla?) to feel powerful. Women buy branded handbags and expensive wallets to feel important. While the items can be different, you are in a world where buying/owning something makes you feel special. Perhaps, that is the thing that is missing in our generation. In the generation of the Educated Poor, we don’t feel special. We feel like a gear in life. We wake up, we go to school, we graduate, we get a job, we buy a house, we have children, we retire and then we die.

To fill up that void, the Educated Poor embarked on the Great Material Chase.


#3: The Outdated Financial Game Plan

Last but not least, the Educated Poor is playing an outdated financial game plan. We are following the game plan of the previous generation. The previous generation ingrained their success game plan into us without know that the game has been changed.

The Biggest Personal Finance Problem The Educated Poor Outdated Game Plan

The Biggest Personal Finance Problem The Educated Poor Outdated Game Plan

Plenty of people in the world are still running on the outdated game plan on the left. This situation has been made worse as the Educated Poor are less likely to seek professional advice (in the context of making investment decisions). It is likely that the Educated Poor will continue to continue running the existing game plan.

A brunch of friends who achieved financially freedom used the updated game plan on the right. The one thing you can do differently is to get educated financially early. You have to be willing to invest in yourself with knowledge and also the right partners/mentors. You will then be less likely to be affected by the Great Paper Chase and the Great Material Chase as you will then have clarity on your game plan towards financial freedom.

Are you following the game plan on the left?


Final thoughts by Wealthdojo

I have created the 6 Levels Wealth Karate to give the Educated Poor a fighting chance in this life.

With the Great Paper Chase, The Great Material Chase and also an Outdated Financial Game Plan, they become stuck financially and unable to achieve the results they desire in life even though they may be very hardworking.

If this article resonates with you, if it makes your uncomfortable, it is okay. Although 2020 is ending, your life has just began. Take this opportunity to change. I wish you all the best. Do comment below your thoughts. I would love to hear from you.


Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.

Value Investing Is Dead Or Maybe Not

Value Investing Is Dead Or Maybe Not

Is Value Investing Dead?

Value Investing Is Dead Or Maybe Not

Value Investing Is Dead Or Maybe Not: Warren Buffett (Photo From Market Watch)

In the 6 Levels Wealth Karate, I talked about the importance of creating a superfund income. We do this via investment. Right now, there is a fierce debate on whether value investing is dead. To all value investors, we know that price is an important component of value. That’s why we’re called value investors. I challenged The Moss Piglet on his investment thought process and we want to share with you if value investing is dead or not.

In one of his recent blog post, he opined that it is time to update our approach to value investing for a changing world. In this article, he would elaborate more on his view of this new paradigm of value investing.


Brief History of Value Investing

The father of value investing was Benjamin ­Graham. He gave birth to this term roughly 100 years ago. During that time, the Dow Jones industrial average comprises of only industrial companies like Anaconda Copper and National Lead. Consumer marketing was still in its infancy. The closest thing to a consumer products company was probably General Motors.

Attracted to the upside of equities, Graham set about trying to figure out a predictable, systematic way to make money in stocks. He turned to corporate financial statements to look for answers. Graham saw that while stock prices fluctuate in the short run, a company’s tangible assets had a solid, precise value. By calculating value and then comparing it with price, Graham found he could make sense of markets. Thus was born the book “Security Analysis” and, with it, value investing. With his focus on liquidation value, Graham tended to buy boring, beaten-down businesses (Sidenote: I’m looking at this hidden gem at this moment in time). This was also known as cigar butt investing.

Value Investing Is Dead Or Maybe Not Benjamin Graham

Value Investing Is Dead Or Maybe Not Benjamin Graham (Photo from Quotiepie)

Then came a young man from Omaha who studied under Graham at Columbia. This man was none other than Warren Buffet. Surveying the economy of the mid-1950s, Warren Buffet saw that it was very different from the one Graham had encountered when he was young.

The Dow Jones Industrial Average now contained companies like Procter & Gamble, Sears, and General Foods. These companies were fundamentally different from an industrial company: The primary driver of their business had little to do with hard assets. Rather, the value had to do with the company’s brands and the loyalty and familiarity that comes along with it. The emotional ties to products like Budweiser and Jell-O allowed businesses to charge a premium for their goods.

At the same time, the rise of national television enabled strong brands with deep pockets to flood the television networks to reinforce a culture of homogeneity. This setup a vicious cycle for dominant brands like Coca Cola and Nike as they went from strength to strength while lesser brands slowly withered away. With that, Buffet was more willing to apply a more qualitative assessment of companies than Graham.


Defining Value Investing

At its roots, value investing is simply a framework for investing that involves buying stocks for less than their underlying value (Side read: Is Ant Group Overvalued?). As Warren Buffet says,

“Price is what you pay, value is what you get.”

The definition of value investing varies widely even among value investors. Damodaran has an interesting take on defining value investing where he classifies value investors into four groups. This depends largely on their approach of finding value stocks.


Passive Value Investing

Also known as the buy and hold strategy, investors screen for companies using criteria that they believe will lead to value stocks. Once they bought the stocks, their patience will pay off as “the market is a voting machine in the short run and a weighing machine in the long run”. We see screens ranging from “low P/B” and “low P/E” and “Quick Ratio” to more qualitative screens like good management and the use of Piotroski F-score and Benenish M-score. (One application is picking up quality companies during COVID19)

Contrarian Value Investing

In contrarian value investing, you focus on companies that have seen steep drops in stock prices. Investors believe that markets tend to overreact to news and that corrections will occur eg. Uranium trade and tanker trade.

Activist Value Investing

This style is a lot like contrarian investing, except the target companies are cheap companies where the investor believe that value can be unlocked through management action. Some examples of potential management actions that can create value include spinning off subsidiaries, share buyback, dividends etc. After acquiring a large portion of the company, the activist investor will often publicly lobby the Board of Directors to adopt their proposed changes to unlock value. The whole process can take a long time and activist investors need to be patient and persistent.


Valuation Challenge of an “Asset-Light” Economy

Warren Buffet’s ideal businesses were generally capital-intensive industries such as insurance and railroads, or they produced a widely advertised consumer products. However, it is becoming increasingly clear that we are now looking at a new breed of asset-light compounding machines with huge network effects.

Unlike the 1980s where most corporate investments were in tangible (physical) assets, we now have companies which value originates in intellectual property such as invention, knowledge and software. Yet all these asset light companies are harder to value because intangible assets are difficult to estimate. Technological change is very rapid and the risk of disruption is higher than the more traditional industries with predictable revenue, cash flow and earnings.

Value Investing Is Dead Or Maybe Not Digital Transformation

Value Investing Is Dead Or Maybe Not Digital Transformation (Photo From Brain Solis)

Modern accounting also failed to reflect the real values of intangible assets on the balance sheet, hence rendering the book value valuation (P/B Ratio) useless. A research paper from NYU Busines School titled “Explaining the Recent Failure of Value Investing”  goes into much further details on this topic.

Today’s valuation problem is in fact more challenging because the proportion of assets that are intangible and immeasurable is even larger.


We present to you: Value Investing 3.0

The high level concept of value investing is always useful, to buy with a margin of safety, at a discount of intrinsic value. However, the application method is going to change, especially in this easy money environment. In the past companies would have to wait for profits before expanding business by reinvesting the profits. Now, the company doesn’t need to do that anymore. Eg. Tesla can issue new shares to raise capital for building new factories in Germany and China. Never in the history of capitalism has no much wealth been created using so little capital.

The good news is, even in an economy transformed by technology, many principles of value investing still apply. 

1) Always look for businesses with a clear-cut competitive advantage. These companies should also look to build and maintain market share. Eg. Amazon has a stranglehold on e-commerce, Google owns search. Value investors have to think about how a company will be able to earn outsize profits over the next generation.

2) Traditional value investors view margin of safety as a “discount” to their intrinsic value, where you price in the risk of investment mistakes. For me, the margin of safety now lies not in the tangible assets but rather in the sustainability of the business itself. I still prefer to find cash producing businesses in strong financial condition selling at undemanding valuations. Of course, with these margin of safety criteria, I will most probably be looking at large, diversified and mature tech companies.

3) If Value Investing 2.0 is about consumer brands like Coca Cola operating with economies of scale, Value Investing 3.0 stocks relies on the network effect. A company will become more valuable as more people uses its products and services. Examples are Match Group (MTCH) and Google (GOOGL), where their users tend to come back for more. Match Group owns a portfolio of dating website and apps, which grew large due through significant network effects. Google gained an early edge due to its superior search algorithm and now “google it” became a verb meaning to do an online search.

Value Investing Is Dead Or Maybe Not Network Effect

Value Investing Is Dead Or Maybe Not Network Effect



Value investing is affected by the complexities of evaluating companies in the new asset-light and knowledge economy. Relying too much on historical data would lead investors to focus too much on companies whose peak growth has come and gone. What worked in the past often does not necessarily work in the future. Investors should not only consider Value Investing 3.0 prospectively but also to give some thought to the vulnerability of Value Investing 2.0 companies (RIP Robinsons).

However, the essence of value investing philosophy has not changed – merely the environment. From the 1930s to the 1960s, value investing was centered around cigar butt stocks. Over the next 50 years, it shifted toward consumer brands, economies of scale and capital-intensive commodity businesses. Now the best value investing opportunities can be found in asset-light compounders with huge network effects.

I would like to end this post with a quote from a book, The Intelligent Investor:

“The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.”  – Benjamin Graham


Author Bio

The Moss Piglet is a financial blogger who enjoys expressing his findings and opinions about the financial markets. He is always on the hunt for irrationally beaten-down stocks as well as lesser known companies that are of value. Follow his investing journey at


Final thoughts by Wealthdojo

Times may change. But the investing principles will remain the same. Whether if is value investing 2.0, 3.0 or even investing using an investment linked policy, please treat your investment seriously. My wish is for everyone to invest wisely. If you have not started investing, there are basically 2 ways to do so.

  • Do it Yourself (DIY) – Learn about investing successfully and invest on your own.
  • Do For You (DFY) – Get someone who can invest successfully to invest on your behalf

We wish you good fortune for the rest of 2020. It is not too late to start.


Join my Telegram Channel for a tip a day! In Wealthdojo, we dedicate a small amount of time daily for learning new things. Continuous learning is one of the greatest secrets of success.

For those of you who want to turbocharge your journey, contact me at I would like to hear from you what your experiences are currently and from there, we develop a plan specially catered just for your journey.

We wish you all the best! Stay Safe and Take Care!

Chengkok, Sensei of Wealthdojo.