dont get TRAPPED in the mid game

https://www.youtube.com/watch?v=q0J4tHegdx8

demi zhuang's video on her switching from VOO to CSPX

when i saw her first video in 2022 about investing into VOO through syfe, i thot to myself

"thats stupid. shes going to change to CSPX eventually"

and ofc, i am right

i notice this in a lot of things

maybe you notice this too?

people focusing and investing a lot on the best optimization for the mid game, but not realizing that in the end game, there is little overlap in their earlier investments that can be useful to their end game 

i noticed this with demi and her suboptimal way of long term investing into the S&P500

i notice this with money honey sg and many others maximizing credit card rewards

i notice this with 1m65 planning retirement in malaysia

i notice this with nomad capitalist and his 5 houses in 3rd world countries

the solulu to all their delulu is simply more money

but truthfully, it is about having a realistic and accurate vision of where one's "end game" is at

if demi's portfolio was $300,000 instead of $3,000, the natural answer to this larger size straight from the start is already CSPX, never VOO

if money honey sg is spending $50,000 a month instead of $5k a month, his optimizations goes out the window. sorry, but nobody rich enough is checking MCCs before making their daily purchases

if mr loo had 50m instead of 5m (idk, im guessing), he 100% will not be thinking about trying to make living in malaysia work

if nomad capitalist mr handerson had 200m instead of 20m (idk, im guessing), he would not even be thinking about having cheap studios in third world countries

im just making the factual observation that if they had more money, their fondness of their old solutions will seem silly, even to themselves

think about it this way

if you waste a ton of resources pimping out your beginner gear and they cap out at mid game

and along the way you acquire better gear that are more efficient and scales much better into the end game (higher ceiling)

you'll end up in the end game with not enough resources for your end game, because you overinvested in the mid game into gear that are meaningless in the end game

you think ultra rich people care about maximizing $1K credit card for 4mpd on 4 different credit cards? you think they care about saving a few dollars on a discount brokerage? you think they want to have a vacation home in malaysia or bogota columbia? lol

these are all mid game traps that are completely meaningless in the end game

i think one of the most obvious financial mid game traps is ILP coping followed by property portfolios

the most obvious social mid game trap is luxury bags / watches

actually the biggest mid game trap that is completely cleared with more money, is the lack of desire to have children

there is a weak case to be made that such mid game traps are actually necessary stepping stones, and i wont argue strongly against that. i would just advise to invest the bare minimum amount to make those stepping stones work for you, so you can step on them and keep moving upwards and onwards to where you actually really want to be

even better if you can make highly flexible / low commitment investments into these mid game things that you know can be recycled or reused in the end game without bricking resources into dead ends

demi switching to cspx now before her portfolio gets too big is a good example of this. at the end of the day, how much worse was it that she was in VOO instead of CSPX? probably not much at all. good example of a low-cost to upgrade from a capped mid game strategy to a limitless end game strategy

btw some of my mental labels

early game - schooling years

mid game - early career

end game - retirement / working for fun

i think what could be helpful is to be honest with yourself about what you want your end game to look like, and then efficiently plan how to use your resources (time and money) to tide over mid game content, until you unlock end game pieces, and then you can start giga investing into those since they never have any downside of being over invested in

i cannot tell you what your end game will look like, as it is a personal thing

but i can point out the mistakes that many people make and why many people cannot thrive in the end game

no one is perfect, and i also wasted a lot of resources into stupid things that dont matter anymore

but whats done is done

we move on

renting is paying off your landlords mortgage? lmao

https://www.youtube.com/watch?v=tQt6ZhCd4Sk

i just watched this honey money sg video where he say that

not sure to laugh or cry

this is what i mean when i say that the level of sg finfluenzas are so low quality

ofc easy for him to say since he has a hdb bto

hdbs have the best yield wrt current market price

and btos are severely underpriced due to govt subsidies

if you rent a hdb then ya he is quite right

he lucked into being half right that in sg it is indeed good to build up home equity (if hdb) since most people are so bad at all other types of investing (low opportunity cost) and govt subsidies guarantees that hdb btos are practically no-loss investments

but that is a unique case of hdbs

there are plenty of private properties that even after being rented, are still cashflow negative for the landlord once you consider all the expenses

also, most people incorrectly value their own labor in the administration of such properties as $0/hr

in fact, for high end properties, renters are getting subsidized by landlords to help cover most (not all) of their property investment costs

this applies to even more properties after the recent hike to property tax for non owner occupied aka investment units

such properties rely exclusively on capital gains for the landlords to eventually make money when they realize gains and sell, all while alternating between bleeding cash or breaking even until that happens

you might think that doesnt make sense and why would landlords speculate on capital gains rather than rely on the "stable" rental income of their investment property, but hello my friend, the china and south korea property market are even worse that sg with gross yields under 2%

after taxes and expenses? big fat negative

thats what i mean when i say, rentors are being subsidized

gross yields mean nothing, just like entreprenuers talking revenue numbers

only uneducated fools are impressed

tell me the net profit or gtfo

and just like that, that is what is important when purely considering the financial aspect of rent vs buy

but even beyond the financial reasons, there are good non-financial reasons to NOT rent, like stable environment (esp for families) and renovating for specific living space

there are also good reasons to always rent, even if it costs a lot more, like career and lifestyle flexibility

you cant really put a firm price on such things, but surely they are valuable to some people, and worth it to them to pay more, if they had to

hearing people say stupid things like "renting is bad" really makes me sick

him thinking that renting is a waste of money goes to show how basic and low level his understanding of finance is, clearly not a holistic approach

its funny to me that i am a harsh critic especially when i see so much of my younger self thinking in him

anyway money honey like to say "supercharge" this and supercharge that

but the simple answer to why your NW will "supercharge" as it gets bigger is simple

your expenses do not scale with NW, but lifestyle desires, so fixed expenses as a % of NW becomes smaller relative to your asset base due to continued savings and bigger absolute returns from that larger base

the 100,000 number of "supercharging" is not a magical threshold

if your NW is $95K or $120K, it will still feel about the same

he also said something i very strongly disagree with

higher NW can participate in better investment opportunities because you have higher quantum? 

bull shit

give MH SG a $100M dummy portfolio and he can go access all his different super special higher quantum investment opportunities while i put 100% into s&p 500 and watch me outperform from day 1 to infinity

honey money really is not joking when he says his content is not financial advice but rather financial entertainment

i am team cashback as a mile-llionaire

i saw the podcast with milelion and sethisfy

disclaimer: i have millions of miles

yes, millions

plural

you can slowly work backwards to calculate what has been my credit card spending

i actually disagree with milelion and think that sethisfy is logically correct, but logistically wrong with his argument

btw i love milelion and i am a faithful reader

seth's solution of "multiplayer" using partner and family members to sign up for additional cards to increase your cashback cap is so.... low-class LOL and probably against T&C and intended use, but the biggest drawback is that the cashback amount is always capped and so low

(read my post about being limitless https://guailanking.blogspot.com/2024/02/reject-unnatural-embrace-limitless.html )

miles card have a higher spending cap since there are so many miles cards that you can overflow your various spending into, to constantly hit 4 mpd

is managing the point validity and redemption chunks of miles across various banks and cards (some points dont pool) really that much easier than the typically more restrictive spending categories for cashback? i think, slightly only

i do not use 4mpd cards, because i am too lazy to care about tracking my spending

small brain problem, but it is okay, i compensate by just being rich

milelion's only good point is that life is short, so you should enjoy it. to fly biz class is a novel experience, and if it within your means, should be something you try at least once, and i agree

seth also argees, and i think his point that if after that, biz class is your new baseline, then it is indeed setting yourself up for unhappiness and financial failure through lifestyle inflation

(LOL at them calling budget babe middle class babe instead)

if you know that after flying biz class, you will never want to fly economy again, is that not admission that after your first biz class flight, you have now permanently upsized your cost of travel? 

the most important point that was not conveyed well is that cashback is cash that can be used for anything and it is typically upfront

while miles are restricted to travel flights, subject to potential expiry and devaluation, and NOT EVERYONE LIKES TO TRAVEL

personally, i am team cashback

but because i travel so often and i was going to buy biz class tickets with cash anyway, i might as well use miles to drastically lower my cost of flying

possible future follow up post about my thinking about miles in future blog

for people not into traveling, you are probably better off with cashback

tracking spending categories and limits and merchant mcc and all that nonsense is WORK to me

if you dont mind doing WORK in exchange for money (miles), then you should go ahead and optimize

if you prefer not to care so much and live life with less stress, simple high cap / uncapped cashback cards

examples are dcs 2% up to 10k or any of the general spend 1.4-1.6mpd cash or straight 1.5/1.6% cashback cards