Buying time: trading your retirement income for income and lifestyle in your retirement years/ Daryl Diamond

My takeaway from this book: (1) start thinking and planning for one’s retirement BEFORE the retirement years, (2) best to plan as early as possible; time is an asset, (3) it’s also never too late to plan; knowing is better than not, (4) plan not only for how money is needed for the retirement years but also other factors like one’s purpose, emotional, social, security, health and shelter needs; Maslow’s Hierarchy of Needs, plans to pass on assets to survivors, (5) calculate the effect of taxes/ tax brackets and tax breaks on income stream.

Has a Canadian-focus, e.g. Tax and pension policies. Some tax and retirement schemes don’t seem to have the equivalent in Singapore. But general principles would be equally applicable to most readers.

I also shudder at the amount of taxes Canadians have to pay (40+ percent at the highest bracket; 15% considered relatively low. Ouch).

Much of the taxes seem to before social safety nets and also state pensions (e.g. Old Age Security and the Canadian Pension Plan were two schemes mentioned). But not everyone is eligible, and even then the high taxes represent a high opportunity cost for those who are disciplined enough about financial management in one’s income productive years. Made me realize our CPF scheme may be a better scheme, as it’s savings – compulsory and state-dictated but one’s asset nonetheless. Taxes, on the other hand, are immediate expenses and loss in potential investment gains for those who are willing to invest.

That it’s more that just answering “how much do you need each month upon retiring”, but also asking questions about needs relating to:
- love
- Purpose/ fulfillment
- recreation
- security
- health
- accommodation
Author calls these “time hub” factors that are not measured but subjectively defined. Applying these subjective measures will help quantify the financial requirements pre and post retirement.

Chapter 1. “… the number one financial annoyance for retirees is the tax they pay on income.”
Explains the objective of “layering” financial streams to obtain desired income levels and still keeping “net income” low to reduce taxation on income. Suggests strategies like leveraging on dividend income, tax deferments, income splitting or other financial schemes for seniors. The point (for the rest of us) is to know and apply the available financial tools, exemptions or schemes.

Section 2 – suggests consolidating assets with one advisor or institution, rather than diversified, for efficiency and less paperwork for beneficiary (have to admit overall it does go against what I’ve learned but it is food for thought).

Also talks about Regular Retirement Savings Plan, which seems similar in concept to the Supplementary Retirement Scheme in Singapore.

Chpt 2 – the structured plan: “your retirement assets cannot stop working when you do”. They must be invested to last 25 to 35 years (after retirement). Have to also endure inflation and taxes for two or three decades after retirement.

Talks about an idea called “systematic withdrawal plan” (SWP), the reverse of a regular savings plan (RSP) for unit trusts. Author suggests some criteria for funds that are to be treated as SWP, e.g funds that show growth potential like equity or balanced funds, tax-free switches. In a RSP, you buy up units, which fluctuate in price, with a regular amount of investment and benefit from dollar-cost averaging. In a SWP, you regularly sell units to get a regular income/ withdrawal stream. The author suggests the benefit is that markets tend to rise over time, so the depletion in units may be less over time also. Though there are risks like inflation (eroding the present value) and coinciding with a depressed market with depreciated price. I also think there are the associated transaction costs (like platform fees) to consider. But an idea nonetheless.

Mentions a “joint life annuity” and joint “last to die” insurance contract, where the annuity will keep paying as long as one of the two beneficiaries are alive. Maybe this would be a new product in Singapore in future years?

“Purpose of your capital” section includes advice on how to reduce financial risks in various financial instruments (btw, book has one of the clearest explanation, that I’ve come across, how bonds work). In summary, I read it as diversifying in terms of funds/ asset types (e.g. drawing on cash reserves rather than depleting mutual fund values during already depressed markets, rebalancing, start early and not trying to time the market.

Advocates the use of a written financial plan, stating objectives, risk tolerances, preferred asset mix etc.

Advices that financial planning is also done with one’s parents.

Chapter 4, on health-risk management. To consider aspects like cost of long term care (and options), power-of-attorney.

Chpt 5, on wealth transfer. Offers questions to be considered. E.g.
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Coach Wooden: The seven principles that changed his life and will change yours/ Pat Williams

Seven “creeds”

Be true to yourself.
Make each day your masterpiece (be the best that you can be)
Help others.
Drink deeply from good books
Make friendship a fine art
Build a shelter against a rainy day by the life you lead
Give thanks for your blessings and pray for guidance everyday

***

Be the best that you can be. Not necessarily better than someone else. Maximize one’s own potential. Don’t worry about the rest.

Chapter 5. The author’s tips on reading:
Set time aside regularly
Be discriminating (time spent reading is a cost)
Have books available for reading
Don’t just read; interact with books (actively reflect)
Have books around the home (own some books)
Set aside some vacation time for a reading sabbatical
Share one’s reading enthusiasm with others
Use what is learnt
Read widely (interesting side story of Danish engineer, Carl Kroyer, who successfully raised a ship in 1964 Kuwait by using styrofoam balls; he drew inspiration from a Walt Disney comic)
Encourage others to read, especially the young

Liquid thinking: Inspirational thinking from the world’s greatest achievers/ Damian Hughes

On the power of mind over matter, about positive thinking, of inspirational and yet down to earth quotes and excerpts of people (quite a few were British). People like Walt Disney, Andy Hardcastle, Mark Holden, Muhammad Ali.

Starting chapter:
List 5 things we love to do
List 5 things we are really good at
List one thing we consider to be essential to do in life
List 3 things we would do if we won the lottery
What do we want our obituary to say, if it were to be recited
Now write down what our purpose is

Poses specific questions for the reader, and gets reader to think of how to set goals. It occured ti me asking (oneself) the right questions is the first important step towards achieving one’s desired goals. It’s about being conscious about what we want, and who we are. And thereafter, letting (what the book calls) Recticular Activating System.

Easy read. Light and yet not unsubstantial. I liked the real-persons perspectives.

Plenty of motivational quotes.

“nothing in the world can take the place of Persistence. Talent will not; nothing is more common than an unsuccessful man with talent. Genius will not; the unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.” Calvin Coolidge, 30th US president, 1872-1933.

“people don’t fail in life, they just give up trying”.

The appeal/ John Grisham

Not so much a courtroom drama, but a novelisation of corporate America’s manipulation of the justice system.

A state jury has just awarded a massive award for damages, in a tort case involving a company whose toxic wastes have polluted a town’s water supply. The company lawyers decide to appeal, and at the same time, the billionaire behind the company decides to manipulate the Justice system by making sure to appoint a judge, who is likely to rule in his favor, to the court of appeal.

An interesting way to introduce readers, especially non-US citizens, to an aspect of the workings of the US justice system. Or specifically the state court of appeal and the negative aspects of electing, rather than appointing, judges.

In theory, as I understood it, the idea behind democratic elections for judges might have been to ensure fair and equitable appointments of the office holders (rather than appointment by favouritism). But the nature of elections in the US is that judges have to seek the support of people and groups in order to get elected (nobody will vote for someone they do not know, seen or heard of). To reach the voters, massive amounts of money has to be spent for mailers and TV ads.

In order to finance such political campaigns, donations are solicited and that’s when things start progressing down the slippery slope. The judges who are eventually elected inevitably feel compelled to make decisions that are more in favor of the views of his/ her supporters and donors. In theory, one could campaign to be impartial and unbiased, but human nature is such that donors and supporters would want someone they favor to be in office. Or to have someone whose views (on religion, sexual orientation, policies) are aligned with theirs.

I also understood better why tort cases and civil litigations may sometimes be necessary in the US system (especially when government checks and regulation is not always available to prevent gross negligence).

One take-away was that politics, religion and the legal systems should be at arm’s length.

A part of me wondered if is book was carried through more in the merits of the author’s fame rather than the writing style. The writing style tends to be “describing” rather than “telling” the story for most parts. Still, the plot was interesting enough to carry me through the entire novel.

Aftermath: Prepare for and survive apocalypse 2012/ Lawrence E. Joseph

Premise of the book may have arisen from the Mayan prophesy that the world would “realign” itself on December 21, 2012 (12/21/12), but I think the real point of the book is about mentally preparing ourselves, and subsequently considering possible actions, in view of a catastrophe on a global scale.

Part of the preparation, both mental and in action, is to be able to imagine worse-case scenarios. That’s what the book has done.

I think one shouldn’t dismiss this book off-hand, nor should one read this book thinking that all would be lost. The author tried to explain as much.

Book doesn’t delve so much into the actual Mayan prophesy. It does cover possible ways a global catastrophe could occur, e.g. Meteor strike, solar flare, long term climate change, food shortages.

Each chapter talks about these possible situations, how it may occur, and what may be the consequences on modern society if they do occur. Like how governments and people may react. That part reads almost like Speculative Fiction (not a bad thing in itself, and I think that’s the whole point of SpecFict — to imagine and present possibilities).

Apart from material preparation, the author also suggests possessing an immense will to live is also part of the critical success. This includes seeking out strong-willed fellow survivors of the aftermath. And he suggest seeking spiritual guidance in religion (quite a logical suggestion, really).

Broadly-speaking, the suggested measures include the following:
Make a family emergency plan (where to go, who to call, what to do, backup plans)
Secure basics like fresh water, food, shelter, heat, tools, power.
Weapons (suggests it’s personal choice)
Author also suggests prayers
See www.ready.gov

It’s been said that they’ve authorities were daunt off guard about September 2011 World Trade Center attack due to an inability to imagine the worse, and therefore being unprepared.