Jack Ma's 5 Best Quotes On Life, Business and Relationship

Jack Ma’s 5 Best Quotes On Life, Business and Relationship

It is amazing how a man’s destiny can be changed in one year. Jack Ma, more famously known as the Founder of Alibaba (BABA) has disappeared from the public eye around the time when Ant Group was unable to list on the US stock exchange. China stocks are not having a good year ever since the CCP started to have impose regulations on various sectors. There might be times where you might think dollar cost averaging is not working on Chinese stocks.

That being said, Jack Ma has spoken wisdom on life, business and relationship. I have compiled Top 5 quotes which I particularly enjoy.

Hope that Chinese stocks turn around soon.

Jack Ma's 5 Best Quotes On Life, Business and Relationship

Jack Ma’s 5 Best Quotes On Life, Business and Relationship (Photo Source)

#1: On the path to success, you will notice the successful ones are not whiners, nor do they complain often.

After thinking for a long time, I personally felt that this should be the first one on the list (or on any list). If you ask someone what are the ingredients of success, you might get answers like family background, intelligence, the amount of money they have, the school they come from or being hardworking.

I believe that one point stands above all of those listed above. I’m not undermining any of them but without this one point, the rest might fall short.

The Right Positive Attitude.

In my industry and in the previous companies that I worked for, I noticed a similar pattern. The top performers are usually silent (of course they will be loud performers too) and they do what they are suppose to do diligently. Most of them look at the bright side and are often grateful for what they receive or accomplish in their work. Don’t be mistaken though. They do complaint (they are not saints). After releasing the negative energy, they will pick themselves up again and continue preserving in what they do. In time, most of them find success.

Observe the “more successful” colleagues that you have. Are they like what I have described? Do you want to be like that too?

 

#2: You need the right people, not the best people.

I was inspired by this book called Good To Great by Jim Collins. Jim Collins put together 5 years of research to explain how a company can grow from good to great. In one of the chapter, Jim Collins writes about “getting the right people on the bus“. He didn’t say the best people, but the right people.

The right people or team will figure out how to drive the bus to the direction they want. I believe that everyone gives out a different kind of energy and it is your job (as a leader) to manage that energy. In the world, there are really smart people/best people out there. But if they won’t be able to have the right resonance with the team, they are not right at all. The bus might be driven in a different direction or be broken down entirely.

The right culture takes time to build up and seconds to be broken down. You might have friends who “overstayed” in a role because they enjoyed their colleagues company too much. You probably might have heard of friends who quit their jobs immediately because of a bad manager.

The book Good To Great will give a different dimension in explaining this.

 

#3: When people think too highly of you, you have the responsibility to calm down and be yourself.

One word can summarise this entire sentence: Ego. This comes as a bad joke because I felt that ego might have gotten better of Jack in the last few years.

As we become more successful and people start looking up to you, I believe it is important to remember our roots and how we get there. I have met people who got successful very quickly and (very quickly as well) became arrogant. I like this quote from Will Smith: Money and success don’t change who we are; they merely amplify what is already there. People will see how you treat people and that is an indication on who you are as a person whether successful or not.

The price of ego could be a heavy one and it is up to us to have humility whether successful or not.

What kind of person do you want to be?

 

#4: When doing sales, the first people who will trust you will be strangers. Friends will be shielding against you, fair weather friends will distance from you. Family will look down upon you. The day you finally succeeded, paying the bills for every get-together dinner, entertainment, you will realised: everyone else is present except strangers.

I don’t blame them. As Walter Bradford Cannon once said fight or flight is a physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival. A sale may seem like a harmful attack to their wallets (whether or not the product/service is useful for them or not). Any and every exposure to a sale person might seem daunting for some.

I know of some friends who put down everything to start a business. It isn’t as glamorous as it seems. Behind the nice Facebook post lies hard work, sweat and tears (not exaggerating). There are also countless heart aches that they (myself inclusive) have experienced in the course of running a business.

  • Working well beyond 9am to 5pm. Some quit their jobs and suddenly they are working 24/7
  • Some might face discouragement from family or their close ones. Some very hurtful sentences include “You have a degree, why do you want to do this?”, “Why don’t you find a proper job?”, “Why are you not setting aside time for the family, is money that important?”, “Why are you not working hard enough (when things are not going well), do you know we have a family to support?”, “I can get this cheaper from Taobao”, “I can do this myself by reading up” etc

Yet, the day you succeeded in the world eyes. Suddenly, the applause comes in. Comments like “I knew you could do it all this time”. I heard this first hand from a friend who successful sold away his business for millions of dollar. However, I would have to say it is not easy. It is hard to suddenly trust someone to buy something straight away. It is even harder to refer them to someone that you know. But for those of you who did, a big thank you.

Do you know someone who is running a business or a practice? Lend them a helping hand. Here are some from I know run great business and I would like to extend to them a helping hand.

Disclaimer: I do not get any referral fees for promoting them. I personally feel that their products and services are great.

Platter With Love: Luxurious Handcrafted Artisanal Gourmet Platters with a Social Mission

OlaBakes: Sweets Made Fresh

Oriental Remedies Group: Bilingual TCM Physicians You Can Trust – #FeelBetterFaster with TCM x Technology

 

#5: Buying Life Insurance cannot change your life; instead it prevents your lifestyle from being changed. After tolling for decades, an illness can wipe out an entire family’s saving by medical bills incurred.

You will not turn bankrupt because of buying insurance but you will cause your loved ones to turn bankrupt if you don’t.

There are certain things we want to happen and certain things we don’t want to happen. In the 21st century, humanity is facing one of the greatest war ever: the war against critical illness. Mortality has improved over the years because of medical innovation. At the very same time, the cost of medical provision has also increase. What seems to be like a death sentence decades ago can now be cured.. but you need money to have access to that treatment.

After chatting with past critical illness survivors, I realised that concern of falling ill runs deeper than just the cost. At the end, affording the treatment is the start. Recovering from the illness is the end game. Give yourself a chance to win this game by having the adequate insurance.

 

Final Thoughts

Let’s all thrive in our lives, business and relationships.

Stay Safe.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

We are forced to be investors whether we like it or not

We are “forced” to be investors whether we like it or not

We are forced to be investors whether we like it or not Low Interest Rate

We are forced to be investors whether we like it or not: Low Interest Rate Singapore 25 Years

This one chart explains it all. It was just a “few years” back when my parents told me that it is important to save money in the bank. Saving money in the bank does have many tangible benefits. Firstly, it creates a pool of emergency funds for a peace of mind. Secondly, it gives you a lump of money to prepare for any opportunities. Thirdly, if you don’t do anything, the banks will give you up to 7% interest per annum (Dec 1980). That sounds good to me!

Fast forward to 2021, the bank is giving on average around 0.05% and it seems to be getting lower. The low interest rate environment has changed many areas of finance. Firstly, it has already affected the insurance companies’ participating plans. Secondly and more importantly, it has lead to the erosion of money.

This means that the money you have now, will be worth less in future. For every $10,000 you have in your bank, the real value of your $10,000 will be halved ~$5,454.84 in 30 years if you continue to keep money in bank. (assuming 2% inflation rate)

You can say that we are in a generation that is “forced” to invest or suffer the erosion of money value with time.

We are forced to be investors whether we like it or not Value Erosion

What It Means For You?

Whether you are in your 20s who might be working for the next 40 years (damn) or in your 50s who might be retiring for the next 30 years, we are all exposed to the same erosion. As a retiree, it is important to understand that your savings value will go down in quantity and value. As a working adult, it is important to understand that your hard earned money is worth less down the road.

There is only one obvious thing to do. Either you keep pace with inflation (endowment plans/selected bond funds/etc does a decent job for this) or you have beat inflation. If you want to beat inflation, you will most possibly be expose to other asset classes which might have higher volatility and risk. It is crucial to know your risk profile here before you proceed.  You might be not suitable for certain asset classes and it is important to talk to professional to assess this.

The Chase For Higher Yield

There are only 2 ways to do this. Either you do it yourself or let others do it for you.

Do it yourself: This is an active role. It involves many things such as knowing what asset classes to buy, what assets in the asset classes to choose from, the pros and cons associated into each assets, the co-relationship between each assets, the duration of investment, the investment thesis and when to exit. This list is not exhaustive.

There is a very strong emphasis here on the level of financial knowledge which might take years to acquire. (All this time, still spending most of your waking hour working on the job). It is a longer process but definitely rewardable.

Do it for you: This is a semi passive role. There is still a personal responsibility to know what you are investing in. Otherwise, you are completely at mercy of the provider. In Do It For You, usually a portfolio is readily available. There will be an explanation on the investment thesis and if you subscribe to the investment thesis, you can consider taking up the Do It For You.

Annual reviews or semi-annual reviews are important here to see how the investment is doing. Generally, it is a passive role after that.

 

Final Thoughts

Whether you choose to do it yourself or do it for you, the reality is that you have to do something. If you don’t, the retirement journey just might be a little hard.

We are forced to be investors whether we like it or not

We are forced to be investors whether we like it or not

Till then, take care!

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Why Buy Term And Invest The Rest Is Bad Advice

Why Buy Term And Invest The Rest Is Bad Advice

Why Buy Term And Invest The Rest Is Bad Advice Ferrari Joke

Why Buy Term And Invest The Rest Is Bad Advice: Ferrari Joke

Most of you might have read this joke before. Personally, I think it is easy to give a “good advice” like “stop smoking, invest the money and you will get a Ferrari in 15 years”. Realistically, is that true? I discovered that most people do not take context or circumstances into account before giving  “good advice”. This “good advice” might serve as no practical value at all if it is not applicable to the person.

In the financial world, we have many “good advice” around. In this article, I hope to debunk one “good advice”: “Buy Term And Invest The Rest”.

Speaking about advice: I’m a financial planner and here are 3 pieces of money advice no one ever wants to hear.

 

What is ‘Buy Term And Invest The Rest”?

John (imaginary figure) wants to plan for his financial journey. He read a few articles online and discovered that there are many people recommending “Buy Term And Invest The Rest”.

Buy Term: He can consider buying a Term policies for his insurance needs. A Term policy’s regular premium are generally cheaper than Whole Life Policies or an Investment Linked Policies (ILP) that serves his insurance needs (broadly speaking).

Invest The Rest: Because his regular premiums are generally cheaper, he now has more budget to invest in the stock market. He wants to invest in low cost ETFs (exchange traded funds) to reduce any fees. With low charges, this will take care of his wealth accumulation needs.

This sounds great. Personally, I think this is a great advice and a possible strategy for John to consider in his investment journey.

 

Then Why Do I Think It is “Bad Advice”?

Why Buy Term And Invest The Rest Is Bad Advice

Why Buy Term And Invest The Rest Is Bad Advice

This very simplistic advice often do more harm than good. One example that I would like to draw reference is giving advice to someone to lose weight. The secret to losing weight is very “simple”. All you need to do is just “Eat Healthy Food, Eat Less, Exercise More”. Yet, adult obesity rates in the USA (2017) is a shocking 42.4%. If people already knows this secret, then why are there still so many people who are obese?

This is because everyone’s circumstances and context is different! Duh.

Do you know that price of healthier food is around 2X of unhealthy food? For a person who is living from paycheck from paycheck, how would he/she be able to afford this new diet?

Do you know 95% of diets fail? For a person who has been on a donut diet for most of his/her life, would it be easy to follow this diet?

The conversation today is not about diet. By using the example of weight lost, I hope to be emphasize that everyone is different. This same advice could work for someone with a certain set of mindset and circumstances (maybe he is rich, having a 6 hours work week and a can-do mindset). But not for everyone.

 

So Why Is Buy Term and Invest the Rest “bad advice”?

Frankly, this advice works. But it only works with a given set of circumstances and context. You can consider this advice if you resonate with the following.

Balanced/Adventurous Risk Profile

I have the privilege of speaking to many people in my career. I have came across some partners and clients who are risk adverse in nature. They do not enjoy fluctuations in their asset prices nor do they like to see losses in their assets. Their favorite asset classes are typically fixed deposits, endowment or bonds. A stock portfolio may not be very suitable for this person’s character. Imagine if you force this individual to buy the ARK K ETF, I willing to bet that he/she will not be able to sleep well at night.

Long Holding Period

In theory, we should all be like Warren Buffett who has an “infinite” holding period. Buy term, invest the rest works ONLY if the person invest the rest and continues to invest the rest. However, this is something we don’t see practically.

A simple question to ask yourself or your friends would be this: when was the last time you sold a stock?

The average holding period of US stocks is 5.5 months. The average holding period for SGX stocks is 10 months. ETFs are slightly better. The average holding period for ETF is 6 years. If statistics shows that an average someone is only willing to hold for that short a period, then wouldn’t you be “investing the rest” temporarily? Will this help you achieve your financial goals?

I do acknowledge that there is a combination of factors that contribute to the short holding period. One example is cheap transactional cost. This seemingly good benefit actually destroyed wealth all around the world. In the past, transaction costs to trade was relatively higher that people are more willing to do it only when necessary. Because of the cheap transactional cost now, people are entering and exiting the market as if they are buying groceries in the market. Where did the long term investing go?

But my favourite is the “fear of market crash”. From 2008 until 2020, there have been thousands if not millions of articles/youtubers/gurus world wide calling for market crashes every single year. This keeps people from “investing the rest” into the stock market because they are afraid the market will crash every other month (read this again). Missing the five best days when you’re otherwise fully invested drops your overall return by 35%! Missing the best 10 days will more than halve your long-term returns. Research has again shown that not fully invested will have disastrous effects in the long run. Are you really investing in the long run?

Strong Emotional Stability (in the market)

Investing in the market is not easy. It does not matter if it is a passive strategy or an active one. Imagine if you open your brokerage account one day to see your robo-investing strategy lost 20% of your capital, will you feel afraid and fear that it will continue to drop?

I know there are some who will feel excited. However, I doubt this will apply to the general population.

Investment/Financial Planning Knowledge

When you buy term and invest the rest, there is a strong assumption that you know very specifically the kind of coverage you want and the structure for your insurance needs. At the same time, it also suggests that you know enough about stocks or ETFs to invest appropriately for the long run.

I do acknowledge that there are indeed talented individuals out there that really can do it. They don’t spend hours, they spend decades of their lives to master their financial planning.

Are you spending enough time to acquire these knowledge?

So What Is A Better Advice?

An advice is only good when an individual is able to act upon it in his unique circumstances and context. The best advice are often discovered through brainstorming, asking and answering good questions and also working with someone who is good at doing that.

Just like the best companies in the world hire the best minds in their strategy department, you should also “hire” the best minds to help you in your financial journey.

“Buy term and invest the rest” is a great strategy. However, it only works for a very specific group of individuals. You may or may not be suitable for this strategy. Remember, everyone is different.

 

Final Thoughts

I believe it is more important to focus on your priorities and your financial needs instead. It would be wise to rethink if these heavily blogged strategies (buy term and invest the rest) can serve you in your financial needs in your unique circumstances and context.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Participating Funds Singapore Moving Forward

Participating Funds Singapore Moving Forward

Insurance companies will be showing lowered illustrated rates after 1st July 2021. Although there is no real impact because the rates are illustrated after all, you might be wondering why is this happening? I think the most important question that you have will be this.

“Will this affect my returns in the years to come?”

Participating Funds Insurance Singapore 2020

Participating Funds Insurance Singapore 2020. Source: Business Times.

 

What is a Participating Fund?

To understand your returns better, you first need to understand what is a participating fund. You can take a look at LIA: Guide to Participating Fund. I will be summarizing some of the points in the guide.

Participating policies (such as endowment, life, retirement) are life insurance policies which provide both guaranteed and non-guaranteed benefits. The aim of a participating policy is to provide stable medium to long-term returns through the combination of guaranteed benefits and non-guaranteed bonuses. Participating funds can invest in a range of assets, including equities, in search of potentially higher returns.

This means that the participating fund need not be conservative. Equity positions in the 5 companies (as shown above) is around 30% of the entire fund. However, we need to note that insurer need to provide a guaranteed benefits.

 

The Search For Guaranteed Benefits

To back the guaranteed returns of participating policies, insurers typically invest around 70% with bonds (Side note: investing in bonds does not mean that having guaranteed returns). In the persistent low interest environment (plus the RBC2), it becomes an problem for insurers. I believe (this is my guess) that insurance companies might offer newer plans with lower guaranteed benefits in future.

Participating Funds Singapore Moving Forward

Participating Funds Singapore Moving Forward

 

Will It Affect My Overall Returns

That being said, I believe the overall returns for participating funds will improve. This is because insurers has already shown trends to shift more of the assets into equity (read my last article on the data).

However, this would mean that we need to be understand returns on a participating policy may also be volatile in future.

 

Final Thoughts

I do not think that having a lower guaranteed benefit is necessarily bad. This is because when the participating policy has a lower guaranteed benefit, it means it only needs a lower proportion of assets goes into bonds. This will free up some capital to invest in other assets such as equity. This investment mix might provide greater potential/returns for long term investment.

As mentioned above, we need to be understand returns on a participating policy may also be volatile in future. You should be instead focus on your financial needs and whether these plans (participating or not) can serve you in your financial planning.

 

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.

Technical Mambo Jambo: RBC2

This section is only for those that are interested in the technical stuff.

Insurer are required to adopt RBC2 from March 2020. Monetary Authority of Singapore (MAS) expects the guaranteed cash flows from assets invested by the Par Fund to match the guaranteed insurance liabilities, i.e. the guaranteed benefits of the par policies. Insurers are required to hold higher capital requirements if that is not the case.

As we are in a persistent low interest environment, it would mean that the insurer have to hold even more bond positions to match the guaranteed benefits. Thus, reducing their ability to invest in the equity market. Thus, potentially reducing overall returns.

As a result, we might see new participating policies with lower guaranteed benefits. As explained above, it may be a good thing and a blessing in disguise.

Here is a 1 hour video to explain the mambo jumbo.

Should You Be Concerned About Dropping Illustrated Rates

Should You Be Concerned About Dropping Illustrated Rates

Should You Be Concerned About Dropping Illustrated Rates

The Life Insurance Association (LIA) on 2nd June 2021 has adjusted the illustrated rates of participating policies (per annum) downwards from higher range 4.75% to 4.25% and lower range 3.25% to 3%. This is to provide consumers a more realistic range of projected investment returns. Should you be concerned about the dropping illustrated rates?

Wait.. But first..

Please do not run to your financial advisors to buy your participating plans now. The changes are made on the ILLUSTRATED/PROJECTED returns and NOT the actual returns of your potential policy. Even if you buy a participating plan before 1st July, it does not mean that you “locked in the old rates”.

The insurance company will only give the actual returns in the years ahead. The illustrated/projected returns serves as a GUIDE on what a realistic return may look like in the future.

So Why Are The Illustrated Rates Dropping?

This is to provide a more realistic range of your policy returns. The insurer participating funds are a combination of bonds, equity and also other assets. I have put a screenshot of Prudential’s, Great Eastern’s and AIA’s Par Funds composition here. You would see that the biggest composition is fixed income and bonds.

AIA (2019) – 69.2%

GE (2019) – 66%

Prudential (2020) – 64.4%

AIA Par Fund 2019 Asset Allocation

AIA Par Fund 2019 Asset Allocation

GE Par Fund 2019 Asset Allocation

GE Par Fund 2019 Asset Allocation

Prudential Par Fund 2020 Asset Allocation

Prudential Par Fund 2020 Asset Allocation

Against the backdrop of the persistent low interest environment, we will expect that bond and fixed income asset classes to be affected negatively which is why the LIA has revise the illustrated rates downwards.

Bond Rates Dropping

Bond Rates Dropping

So What Are Insurers Doing?

It is my guess that the insurers have started to have a higher equity exposure in this persistent low interest environment. My suspicion has been confirmed after digging into the various companies Par Funds Asset Allocation.

Singapore Insurance Companies Par Funds Allocation Trends

Singapore Insurance Companies Par Funds Allocation Trends

For those that are interested, these are the source of information. (NTUC 2018, NTUC 2019, NTUC 2020)|(AIA 2017, AIA 2018, AIA 2019)|(GE 2017, GE2018, GE2019)|(PRU 2017, PRU 2018, PRU 2019, PRU 2020)|. You can see that for some companies, they started to have a higher equity position in their participating fund.

As reported on Today, AIA Singapore will “refresh and streamline” its product suite. Great Eastern is unable to share more details, but likely to have an impact on premiums for new policies. Prudential Singapore declined to comment.

Final Thoughts By Wealthdojo

This is not new. The last change in the illustrated rate was in 2013 due to low interest environment. These changes should not influence you to get a participating policy or not because the changes are only in the illustration.

You should be instead focus on your financial needs and whether these plans (participating or not) can serve you in your financial planning.

Chengkok is a licensed Financial Services Consultant since 2012. He is an Investment and Critical Illness Specialist. Wealthdojo was created in 2019 to educate and debunk “free financial advice” that was given without context.  

Feel Free To Reach Out To Share Your Thoughts.

Contact: 94316449 (Whatsapp) chengkokoh@gmail.com (Email)
Telegram: Wealthdojo [Continuous Learning Channel]
Reviews: About Me

The views and opinions expressed in this publication are those of the author and do not reflect the official policy or position of any other agency, organisation, employer or company. Assumptions made in the analysis are not reflective of the position of any entity other than the author.