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Ever tried to make money doing this?
It's an oversupplied, cut throat, lottery ticket style market.
If you were stripped of everything...
- Thread starter dmgkgkgh12
- Start date
Ever tried to make money doing this?
It's an oversupplied, cut throat, lottery ticket style market.
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True perhaps... but I suggest Rumpy was also saying this was legitimate way to obtain a job keeper allowance.
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Yes and it keeps people from going nuts at home, and develops skills.
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If you want to take that route, I'd suggest learning great engineering practices while creating something of value. Not necessarily a game.
If you have containerisation experience (Docker, K8S) along with Cloud (AWS/Azure/GCP), you're worth $1000/day, give or take 20%. Even start it at $500/day for the first year or two.
Steep learning curve, but that's the path I'd take over game development.
tech/a
No Ordinary Duck
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No won’t make him eligible
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One would have to already have a business in operation or be currently employed for 12 months to get that support. If people ( like Sdajii or others) already had a business in operation they would be eligible.
Interestingly enough I was thinking a few weeks back when the Job Keeper and small business support opportunities were outlined that many small operators could be much better off for a few months.
A husband and wife team with say a son/daughter doing part time work in the business would be eligible for $2250 a week. Anyone heard/seen of such examples ?
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I
In a case I know well, mine, with my payments coming from consulting overseas, and no income since January 2020 due to travel bans in Asia, then here, with only a few dollars from late invoices for work done last year being the only income in calendar 2020, I can not claim a $ and will close the company;
This is due to the fact the ATO only consider GST income...
So in a nutshell, any export focused business is screwed, but they were not exempting either me or my company from taxes in the last 20y...
Based on the latest information I have, i will have to shut my company, there are too many fixed costs in term of insurances, liability, registrations,sites and others fixed costs to carry on an empty shell and there is no end in the near future to this de facto blocus
One would have to already have a business in operation or be currently employed for 12 months to get that support. If people ( like Sdajii or others) already had a business in operation they would be eligible.
Interestingly enough I was thinking a few weeks back when the Job Keeper and small business support opportunities were outlined that many small operators could be much better off for a few months.
A husband and wife team with say a son/daughter doing part time work in the business would be eligible for $2250 a week. Anyone heard/seen of such examples ?
In a case I know well, mine, with my payments coming from consulting overseas, and no income since January 2020 due to travel bans in Asia, then here, with only a few dollars from late invoices for work done last year being the only income in calendar 2020, I can not claim a $ and will close the company;
This is due to the fact the ATO only consider GST income...
So in a nutshell, any export focused business is screwed, but they were not exempting either me or my company from taxes in the last 20y...
Based on the latest information I have, i will have to shut my company, there are too many fixed costs in term of insurances, liability, registrations,sites and others fixed costs to carry on an empty shell and there is no end in the near future to this de facto blocus
Payments haven't been made yet for job keeper.One would have to already have a business in operation or be currently employed for 12 months to get that support. If people ( like Sdajii or others) already had a business in operation they would be eligible.
Interestingly enough I was thinking a few weeks back when the Job Keeper and small business support opportunities were outlined that many small operators could be much better off for a few months.
A husband and wife team with say a son/daughter doing part time work in the business would be eligible for $2250 a week. Anyone heard/seen of such examples ?
For many it won't help, but it's better then nothing.
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Yes I guess it is a lot better than those in Spain and Italy will get.
Sdajii
Sdaji
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Yes, I am. I'm Australian born, Australian citizen, and in Australia. I haven't lived here for a long time. I'm sure that I'm entitled to government assistance, and I swallowed my pride and applied for it and was rejected (they were able to access records that said a few years ago I had plenty of money and fat stock portfolio). I did go in and explain that I had a colourful few years and had spent a fair bit of money on extensive travels etc, and invested the rest into a business overseas which was wiped out just before hitting the market and I was now trapped here with no chance of recovering it, and had arrived without anything but a toothbrush, phone, passport and a few changes of summer clothes. They fairly quickly saw I was genuine and said they'd do their absolute best to help, but I've heard nothing since. I'll go in tomorrow morning in person and see what I can do, which at best will probably be to get an update of 'the system is overwhelmed with people in desperate situations, sorry, we'll get to you as soon as possible, some time between 6 days and 6 months from now, good luck'.
I haven't lived in Melbourne for nearly 10 years but it is my hometown and I still have some friends and business contacts here. Networking is very difficult in these conditions and face to face meetings are almost impossible, but I've been contacting some old associates and getting some ideas together, and with any luck I'll bounce back. As long as I have a mat to sleep on and somewhere quiet to sleep (this has been my biggest challenge), something to eat, a laptop, internet connection (this was a huge problem but hopefully is sorted out now) and an able body (I really don't want to lose my health now!!!), I think I'll be okay.
tech/a
No Ordinary Duck
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You past history has nothing to do with COVID benefits available to you.
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Sdajii
Sdaji
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Wow, three questions with very big answers! Forgive me in advance for what will be a long reply, and this is somewhat more personal than I'd usually discuss on a forum. First thing I did was to start a rather unconventional argicultural business, breeding rats. Yes, that sounds a bit crazy, but it was actually a reasonably good business, I'd guess that after expenses I was making about $80 per hour of my time; far more than anyone else in the business I know of, because I was good at making the whole process extremely efficient, meaning I used less feed, space, materials and most importantly time than anyone else, meaning I could sell quality you couldn't beat at prices only one competitor could beat, and he had unreliable supply. When starting that venture I had no money so built the required infrastructure primarily from materials I literally scavenged from the local tip. It took a fair bit of time but that's something I had plenty of. I was able to set that up in an unused building on a property owned by the parents of my new girlfriend, (she and her family for some reason saw something in me despite the fact I was penniless) I took the first job I was able to get (this was in 2008, so finding work was more difficult than at any time other than right now and did take some time), which was in an office, I utterly hated it but I was very capable and they paid me reasonably well. Making money from the business and my job, either of which would have been enough to get by on, I started saving and immediately began trading on the stock market, the timing was perfect with the GFC recovery happening right at that time. Once I was making enough money from the stocks and the business I quit my job, but fairly soon after was offered a new job in a medical research laboratory (something which did interest me, was related to my qualifications and paid better). Along the way during this episode of my life I also picked up freelance work such as writing articles for magazines, wildlife photography, part time editorial and proofreading work for a publishing company, and a few other bits and pieces here and there. As you can probably guess, after a year or so of pickup all sorts of work I was extremely busy, often working 80-100 hours per week and making good money for just about all the hours I was doing. Actually, my main motivation for making money the focus of my life during those years was my girlfriend, who while we were both broke and unemployed, said she wanted us to buy a house. I agreed, but she became very upset when I said we would either need to get a mortgage or spend time renting. She said she just wanted us to buy a house without needing to rent or borrow. I said that was impossible, she was so upset. About two years later I had enough money to buy a house outright and she was still sitting around playing computer games. I might have bought her a house but when I said I had enough to do it, she didn't say "Wow, you're a genius, that's amazing, no one else could have done that! We went from nothing to being able to buy a house in less than 10% of the time most people take to pay off a mortgage, I'm so proud of you, you've worked so hard, just incredible!", she said "See? My idea was much better than your long term mortgage plan!". She really was a lovely girl, heart of gold, but not too good a grasp on maths or money. I did leave give her a good chunk of money and paid off all her university debts when I left, and hope she is doing well now.
...the story of how I went from having something to nothing, well, that's a much longer story, but skipping details, I got ripped off by a now ex friend in a business deal, had a bad and expensive time with my next girlfriend, ended up spending about 3 years travelling abroad and enjoying myself (which you might understand I very much felt inclined to do after the previous 6 or so fairly intense years which included a lot of hard work and/or dealing with difficult people in unpleasant ways), then spent a further 3 years of blood, sweat and tears as well as all my money setting up a business which would have started generating a lot of income mid this year (I came so close and it looked like being closer to best case scenario than worst. If the pandemic had come 18 months later I'd actually have been financially quite comfortable, even 6 months later I'd have been doing okay). Fortunately I didn't go into debt setting up as many people do, so I was able to walk away with nothing rather than less than nothing.
...and on to your third question... honestly, I'm not quite sure just yet. Despite having had quite a colourful life which has included a generous share of painful lows, the last month has probably been the most challenging of my life. I spent my 21st birthday sleeping in the broken down car which was my home at the time, I lived day to day not knowing where I'd get my next meal or when I'd next be able to shower. Often I went hungry, and honestly, that period of my life was so much better than the nightmare I've had over the last month, which hasn't really had me in a position to strategically plan businesses etc, especially since I'm still in limbo in terms of where I'm going to live. I'm trapped in Melbourne and never planned to be here in the cold months of the year ever again, let alone consider living here. I may be able to return to Asia and salvage the situation (I'd lose at least two years even if I was able to return tomorrow, but it really was a good business model and I'd still like to do it if possible) or I may be stuck here long enough to necessitate setting something up in Australia. As you might guess I have business ideas from time to time and did sometimes think of things I'd like to do it I was living in Australia, but none of them are at all possible in a lockdown scenario, other than setting up the rat business again, which I'd probably do if I had a place to do it in. That one doesn't require much capital to set up (I literally did it last time with materials I scavenged for free, and a few hundred dollars to fill in the gaps, and setting up a second time would simply be to follow the business model I already worked out) but it takes a fair bit of time and most importantly, a stable, appropriate location to do it in. I would only make that a part time thing, but 20 hours per week on that would allow me approximately a full time wage, with enough free time to either set up either a main business or a full time job while treading water working on another business idea. If things were normal I'd be able to think of plenty of viable business ideas, but in these circumstances I'd actually need some time to think about it even if you gave me a million dollars and said I could use it to start a business. I am currently considering some options which generally I'd either not consider or would just think of as silly side ventures, but in these circumstances I have to consider options I generally wouldn't (even to the point where I recently literally stooped to applying for the dole!). I personally wouldn't ever have a conventional business like a cafe or retail store. I'd prefer to do something unusual which will either bring in a fortune or crash spectacularly. Having said that, while I still have no aversion to risk, I will never again put myself in a position where all my eggs are in one basket. As unlikely as it is that a black swan may come and destroy everything you own, your whole way of life and the future you've worked so hard for, my first hand experience confirms the extremely unlikely can happen, and if it will hurt you that much you don't want to leave yourself open to it.
For me personally, clawing my way back up will probably involve capitalising on some of my personal strengths, experience and contacts which wouldn't necessarily apply to anyone else. I think Value Collector gave an excellent basic idea of how most people would best be able to deal with the current situation - get the best source of income you can, live as cheaply as you can (and I can tell you with utmost sincerity that the vast majority of Australians have no concept of how much more cheaply they could be living while still being more comfortable than most people in this world), and investing their savings into something sensible. I will only have similarly spectacular results as before if I again put in extremely hard yards, working both hard and smart, while simultaneously being frugal, or alternatively if I'm extraordinarily lucky.
Well done if you read the whole post!
Sdajii
Sdaji
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Thank you. I won't pretend I haven't been very close to breaking point recently, but I think I've turned the corner in terms with coping with and accepting the loss, psychologically dealing with the bad situation I'm in, and managing to adopt the more positive attitude I had been hoping would come out of me. With any luck I'll be able to get some form of income soon which will allow me to improve my physical living situation which should allow a snowball of positive change.
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dealing with the ATO is a nightmare, the ATO did a mistake entering one entry in a personal tax form: switching 2 numbers
: it took me 7 months to have it rectified, 12h of: phone calls x5, 1 return trip to the city and in person meeting, letters, mygov connections and new tax submissions and ultimately involving my accountant to use their special ATO link to get back $900;
Please note there was not even a dispute as to the actual error or any tricky legal ruling situation,
And as far as I can see i got no interest on that amount
Good luck...
: it took me 7 months to have it rectified, 12h of: phone calls x5, 1 return trip to the city and in person meeting, letters, mygov connections and new tax submissions and ultimately involving my accountant to use their special ATO link to get back $900;
Please note there was not even a dispute as to the actual error or any tricky legal ruling situation,
And as far as I can see i got no interest on that amount
Good luck...
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On the CV19 aid ...
The assets test is suspended for benifits.
Any past experience with centrelink ... is irrelevant.
I just checked on the terms for the aid.
If you need help .... Apply.
If your business is gone or in suspended animation .... or bankrupt ask for help.
Apply.
Go online ...
Whilst I do not take any joy in the current CV19 ... the response here in Australia has been decent as one could expect across all levels top to bottom,
DO not despair ... it may be hard in times of shock. Just apply ... if you need help ... get it ... govt clearly is not Fckin about in its offers. Whilst it may NOT save your business and that sadly is part of CV19 and the likely post CV19 landscape that maybe some things will be done differently. Business will not spring back magically. Not like say Trump is touting.
Sadly and looking at Singapore and various other second wave events, hopefully, Australia can get really on top of CV19 and possibly fluke its near eradication. Near being the operative word.
If your in travel or person to person contact, even a restaurant, times change and what used to seat 150 likely is 50 ... rents must change accordingly as will staff and many other things.
All I would say is ask for help ... financial is via centrelink . Medical and if there are mental issues, which is understandable when your life appears to vanish, doctor and speak to someone. Having had close friends do the unthinkable, one wish I had is that they asked. Even their closest were not aware of the battle they were waging. There is no shame in asking for help whether it be financial or other especially at times like this.
None and if any suggest there is, well ... F them. Job keeper may be better than the unemployment benifits ... at $200- more a week. Both for you and your staff, even if your not sure whether you come back. Rent assistance I note is also on top of the govt offer. Added is being able to take 10k out of super this year and another 10k post 1st July 2020.
There is even at the worst of times hope. Not delusional stuff like Trump sending an untested USA back to work, but meat and potatoes stuff ... its not going to make most whole again financially and for some, maybe they go broke. It is no big deal, having helped others on that journey, its needed at times to wipe the slate clean and start again. At times like this, exceptional ones, negotiation works rather than bankruptcy. Explaining to creditors where you are, bust ... if thats the case ... and getting them to release you. You release say the other side, if your renting ... some may not do this, which is fine but in writing and show your trying. It makes if needed the bankruptcy petition easier at federal court. banks same thing, they will try to get their money back, but when presented with a person of limited means and assets near zero, negotiate and state clearly and honestly your situation.
Do not let them or others bleed you dry. A debt you cant service and have no hope of paying off, you set it out, what you can do, what you cant do, what your prepared to do if possible. Taking a 2 year bankruptcy to wipe it all clear is preferable to having a bank credit card debt accruing at 20% or similar from others under default rates of the loans.
Financial counselor if you need it, centrelink has the people but suspect they are swamped.
Hence my own advice, on what to do, clarify your position and find out what the creditors views and expectations are. If they are no good, go into writing and keep records as it may be a surprise in Federal court that you have pleaded and been open and reasonable to creditors, totally honest .... I cannot stress how important that is, if your not, well ... the book will be thrown at you, but possibly and likely the Bankruptcy court will be swamped in coming months, but if you have been willing and honest and trying the length of bankruptcy could be altered a lot lower.
Unknown ... but Hope is there.
Ask for help ... financial ... medical ... mental ... it is after all only money.
Be kind to yourself and others. Hard to do in times of stress. Its often not your fault. Fault and blame not worthy of your time and mind. Harder to do of course when your mind is going 100 miles an hour. It will pass.
The assets test is suspended for benifits.
Any past experience with centrelink ... is irrelevant.
I just checked on the terms for the aid.
If you need help .... Apply.
If your business is gone or in suspended animation .... or bankrupt ask for help.
Apply.
Go online ...
Whilst I do not take any joy in the current CV19 ... the response here in Australia has been decent as one could expect across all levels top to bottom,
DO not despair ... it may be hard in times of shock. Just apply ... if you need help ... get it ... govt clearly is not Fckin about in its offers. Whilst it may NOT save your business and that sadly is part of CV19 and the likely post CV19 landscape that maybe some things will be done differently. Business will not spring back magically. Not like say Trump is touting.
Sadly and looking at Singapore and various other second wave events, hopefully, Australia can get really on top of CV19 and possibly fluke its near eradication. Near being the operative word.
If your in travel or person to person contact, even a restaurant, times change and what used to seat 150 likely is 50 ... rents must change accordingly as will staff and many other things.
All I would say is ask for help ... financial is via centrelink . Medical and if there are mental issues, which is understandable when your life appears to vanish, doctor and speak to someone. Having had close friends do the unthinkable, one wish I had is that they asked. Even their closest were not aware of the battle they were waging. There is no shame in asking for help whether it be financial or other especially at times like this.
None and if any suggest there is, well ... F them. Job keeper may be better than the unemployment benifits ... at $200- more a week. Both for you and your staff, even if your not sure whether you come back. Rent assistance I note is also on top of the govt offer. Added is being able to take 10k out of super this year and another 10k post 1st July 2020.
There is even at the worst of times hope. Not delusional stuff like Trump sending an untested USA back to work, but meat and potatoes stuff ... its not going to make most whole again financially and for some, maybe they go broke. It is no big deal, having helped others on that journey, its needed at times to wipe the slate clean and start again. At times like this, exceptional ones, negotiation works rather than bankruptcy. Explaining to creditors where you are, bust ... if thats the case ... and getting them to release you. You release say the other side, if your renting ... some may not do this, which is fine but in writing and show your trying. It makes if needed the bankruptcy petition easier at federal court. banks same thing, they will try to get their money back, but when presented with a person of limited means and assets near zero, negotiate and state clearly and honestly your situation.
Do not let them or others bleed you dry. A debt you cant service and have no hope of paying off, you set it out, what you can do, what you cant do, what your prepared to do if possible. Taking a 2 year bankruptcy to wipe it all clear is preferable to having a bank credit card debt accruing at 20% or similar from others under default rates of the loans.
Financial counselor if you need it, centrelink has the people but suspect they are swamped.
Hence my own advice, on what to do, clarify your position and find out what the creditors views and expectations are. If they are no good, go into writing and keep records as it may be a surprise in Federal court that you have pleaded and been open and reasonable to creditors, totally honest .... I cannot stress how important that is, if your not, well ... the book will be thrown at you, but possibly and likely the Bankruptcy court will be swamped in coming months, but if you have been willing and honest and trying the length of bankruptcy could be altered a lot lower.
Unknown ... but Hope is there.
Ask for help ... financial ... medical ... mental ... it is after all only money.
Be kind to yourself and others. Hard to do in times of stress. Its often not your fault. Fault and blame not worthy of your time and mind. Harder to do of course when your mind is going 100 miles an hour. It will pass.
tech/a
No Ordinary Duck
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i initially wasn't sure about posting in this thread, even with (i would hope) some anonymity, since answering this question with full context does need delving into some personal stuff as the question asks "what would you do". but seeing as Sdajii has already done so (which was a very interesting read), i thought i might as well too, as mine is a bit of a contrast.
to be totally honest, if that sort of scenario became reality, i may well end up contemplating suicide.
to explain why, i have to go into a bit about my background. i'm Australian born Chinese, so unsurprisingly i got tiger parented as a kid, "failure" was not an option and was treated with disdain. basically anything short of top 1% (no typo there, that is top ONE percent) in the HSC was considered a "failure". there were no beatings or any kind of physical abuse, my punishment for not excelling at school was, in true tiger parent fashion, a total ban on recreational activities and hanging out with my mates until my scores got back to an acceptable level.
i didn't see it this way at the time, but now that i'm older i've grown to appreciate that they do this because they want their kids to have better lives, and the only route they know to get there is the traditional study hard, get a good job etc, so that is what they force onto their kids. it's a well known phenomenon that happens in America as well. i'm hardly unique in this regard, my Asian schoolmates all had to go thru pretty much the same thing. some of them got off easy though, their families were fine with a mere top 5% result!
an unfortunate aspect of how we get brought up is that your self esteem tends to become tightly and irrevocably linked to your wealth. to lose your wealth (or to not have much to begin with) is a source of extreme shame, you get shunned and looked down upon as a "failure", sometimes even by your own family, and almost certainly by your more distant relatives. hard to change that way of thinking once you're an adult, what shapes you as a child tends to stick with you for a long time. that's why i suspect that a total loss of wealth would be a disaster of suicidal proportions for me.
another issue with that sort of regimented upbringing (study, study and study some more, forget about other activities, you need top marks or you'll never get anywhere in life), is that i never developed any sort of entrepreneurial skill. fostering a mentality where you second guess everything you do and are constantly plagued by fear of failure is simply no good for entrepreneurism.
my net worth (i became a self made millionaire at 32, i'm 40 now) was built on a fusion of the stereotypical tiger parent teachings (excel at school, find a high paying professional job) and the teachings of the FIRE movement (save at least 50% of your income, start investing early in life, keep investing regularly), though of course it wasn't widely known as FIRE back then. only a small fraction of that would be from trading, i would not rate my trading skill as being particularly good at all. i had to do it the slow reliable way, which takes years. if i lost it all overnight due to some mysterious catastrophe, i don't think i could build it back up quickly again via entrepreneurial activities, or via trading for that matter.
i also lucked out big time at the start of my investment journey. i scraped together about $2K by age 15, most of it from prizemoney awarded by those state/national maths/science competitions we all did in school (because of all that forced study, i got crazy good at those, ranking in the prizemoney bracket almost every time). i threw most of those winnings into the CSL IPO... for all my resentment towards those insane academic expectations, i have to give my parents credit there - subscribing to that IPO was their suggestion. and now that i know how CSL turned out, i am "sort of" grateful for the forced studying after all, as that CSL position - which i still have today - is essentially the fruit of my academic mastery as a teenager. but if i had to build up my net worth from nothing a second time, it would be foolish to count on doing that again - finding the next CSL is rather hard!
my trading style (mostly selling cash covered puts and covered calls, sometimes with a div strip in between) needs a lot of capital, as collateral for the short gamma and for stripping divs. with just $5K of trading capital, that sort of trading is virtually impossible. i don't think i'm all that good at the long gamma trading style, so if left with just $5K i probably wouldn't consider it.
i guess the first thing i'd have to do is look for someone to help talk me down from the precipice of the proverbial cliff. forget about the financial side, just focus on getting the psychological side sorted out first. try to break my childhood "programming" and sever this unhelpful mental connection between net worth and self worth. i've been trying to get rid of it my whole adult life, i think i have made some progress but some of it is still there. probably need that gone before being able to properly rebuild.
the original post describes a scenario where your trading capital/net worth suddenly vanishes. it doesn't say anything about job loss. so assuming that i get to keep my current job (between the super low Singapore tax rates and the depreciating AUD, i'm clearing around $200K AUD equivalent), i'd fall back on that to rebuild.
immediately strip back lifestyle and go full on minimalist mode. go back to doing the flatmates thing that we all do as a "rite of passage" when we're young adults, go back to eating beans and rice, whatever's necessary, chop down living expenses like mad. i probably fall into the "Fat FIRE" school of the movement these days, with living expenses at ~$100K/year. but i grew up poor, so i'd like to think i'd be fully capable of dropping to $20-30K if i had to, i am quite familiar with the notion of doing without from my childhood years. hard to say for sure though, as i've been reasonably well off for a few years, maybe i've gotten too used to this lifestyle now.
assuming that the near total loss of net worth described in the original post was a factor of some mysterious personal disaster, rather than caused by a total meltdown of markets, and also assuming that i am in fact able to take a scythe to my living expenses, i'd do no investing/trading for the first couple of months, focus on my day job, save up ~$30K (= ~$27K SGD).
use DCIs (dual currency investments) to try and get that $27K SGD converted to AUD at spot and pocket an elevated interest rate in the process (typically 1 week AUD/SGD DCI struck at spot pays around 10-25% annualised, though it fluctuates wildly based on the FX derivatives market. was well above 25% in the early days of this current crisis).
keep doing that until one of them gets exercised and converted to AUD, repatriate it home, refill my account with the CHESS broker and start dollar cost averaging into index ETFs again. if my current portfolio was wiped out, i probably wouldn't include direct ASX holdings as part of the buy & hold component of the rebuilt portfolio, and of course there is no more buying CSL for 76 cents a share the second time around. i'd probably go for a 10K/10K/10K split between VAS (or A200)/IVV/VEU.
alternatively if spot is close to the DCI strike at expiry, and the DCI rates being offered at spot are at or around the upper bound of that range, i'd probably roll the DCI instead and keep bouncing back and forth between AUD and SGD while those conditions last. 0.5% a week is pretty good when you don't really care which of the two currencies you take delivery of.
work another couple months, save another $30K. repeat the DCI - repatriate tactic, refill my IB account and fire up the short gamma option trading again. would have to think carefully on this component though, as i may well be in terrible shape emotionally due to the loss, and you don't want to be doing active trading in that state of mind.
and finally the next 2 months pay goes into SREITs, maybe some other SGX listings. long term buy & hold. SREITs were yielding 4-6% before the current crisis but they had gone on a huge run up in the preceding 18 months or so, prior to that they were yielding around 6-9%. no point assessing projected yields now with so much uncertainty about. residents don't pay tax on capital gains or dividends here, so i'd make use of that to help rebuild. even if i moved back home i'd still want to retain a good chunk of investments in SGD, the long term trend is SGD appreciation (which is very pronounced vs AUD) and it's a very stable economic environment here, sometimes referred to as the "Switzerland of Asia".
i'd keep rotating between those 2 or 3 components (index ETF / options trading - maybe / SGX) every 2 months and build up that way. going to be a long hard slog to rebuild the slow reliable way all over again, but it's the only way i know. constant depression over the massive loss would no doubt be my companion along every step of it, at least until i made my first million all over again. after reaching that, things might improve from an emotional standpoint, and probably returns will follow once i get into a better frame of mind for trading.
but if i've misinterpreted the question, and it's asking "what would you do if you time travelled back to when you started investing" as opposed to "what would you do right now, in 2020, if all your current assets were magically stripped away overnight" as i took it to mean, then my answer's pretty simple: buy CSL again at 76 cents!!!
to be totally honest, if that sort of scenario became reality, i may well end up contemplating suicide.
to explain why, i have to go into a bit about my background. i'm Australian born Chinese, so unsurprisingly i got tiger parented as a kid, "failure" was not an option and was treated with disdain. basically anything short of top 1% (no typo there, that is top ONE percent) in the HSC was considered a "failure". there were no beatings or any kind of physical abuse, my punishment for not excelling at school was, in true tiger parent fashion, a total ban on recreational activities and hanging out with my mates until my scores got back to an acceptable level.
i didn't see it this way at the time, but now that i'm older i've grown to appreciate that they do this because they want their kids to have better lives, and the only route they know to get there is the traditional study hard, get a good job etc, so that is what they force onto their kids. it's a well known phenomenon that happens in America as well. i'm hardly unique in this regard, my Asian schoolmates all had to go thru pretty much the same thing. some of them got off easy though, their families were fine with a mere top 5% result!
an unfortunate aspect of how we get brought up is that your self esteem tends to become tightly and irrevocably linked to your wealth. to lose your wealth (or to not have much to begin with) is a source of extreme shame, you get shunned and looked down upon as a "failure", sometimes even by your own family, and almost certainly by your more distant relatives. hard to change that way of thinking once you're an adult, what shapes you as a child tends to stick with you for a long time. that's why i suspect that a total loss of wealth would be a disaster of suicidal proportions for me.
another issue with that sort of regimented upbringing (study, study and study some more, forget about other activities, you need top marks or you'll never get anywhere in life), is that i never developed any sort of entrepreneurial skill. fostering a mentality where you second guess everything you do and are constantly plagued by fear of failure is simply no good for entrepreneurism.
my net worth (i became a self made millionaire at 32, i'm 40 now) was built on a fusion of the stereotypical tiger parent teachings (excel at school, find a high paying professional job) and the teachings of the FIRE movement (save at least 50% of your income, start investing early in life, keep investing regularly), though of course it wasn't widely known as FIRE back then. only a small fraction of that would be from trading, i would not rate my trading skill as being particularly good at all. i had to do it the slow reliable way, which takes years. if i lost it all overnight due to some mysterious catastrophe, i don't think i could build it back up quickly again via entrepreneurial activities, or via trading for that matter.
i also lucked out big time at the start of my investment journey. i scraped together about $2K by age 15, most of it from prizemoney awarded by those state/national maths/science competitions we all did in school (because of all that forced study, i got crazy good at those, ranking in the prizemoney bracket almost every time). i threw most of those winnings into the CSL IPO... for all my resentment towards those insane academic expectations, i have to give my parents credit there - subscribing to that IPO was their suggestion. and now that i know how CSL turned out, i am "sort of" grateful for the forced studying after all, as that CSL position - which i still have today - is essentially the fruit of my academic mastery as a teenager. but if i had to build up my net worth from nothing a second time, it would be foolish to count on doing that again - finding the next CSL is rather hard!
my trading style (mostly selling cash covered puts and covered calls, sometimes with a div strip in between) needs a lot of capital, as collateral for the short gamma and for stripping divs. with just $5K of trading capital, that sort of trading is virtually impossible. i don't think i'm all that good at the long gamma trading style, so if left with just $5K i probably wouldn't consider it.
i guess the first thing i'd have to do is look for someone to help talk me down from the precipice of the proverbial cliff. forget about the financial side, just focus on getting the psychological side sorted out first. try to break my childhood "programming" and sever this unhelpful mental connection between net worth and self worth. i've been trying to get rid of it my whole adult life, i think i have made some progress but some of it is still there. probably need that gone before being able to properly rebuild.
the original post describes a scenario where your trading capital/net worth suddenly vanishes. it doesn't say anything about job loss. so assuming that i get to keep my current job (between the super low Singapore tax rates and the depreciating AUD, i'm clearing around $200K AUD equivalent), i'd fall back on that to rebuild.
immediately strip back lifestyle and go full on minimalist mode. go back to doing the flatmates thing that we all do as a "rite of passage" when we're young adults, go back to eating beans and rice, whatever's necessary, chop down living expenses like mad. i probably fall into the "Fat FIRE" school of the movement these days, with living expenses at ~$100K/year. but i grew up poor, so i'd like to think i'd be fully capable of dropping to $20-30K if i had to, i am quite familiar with the notion of doing without from my childhood years. hard to say for sure though, as i've been reasonably well off for a few years, maybe i've gotten too used to this lifestyle now.
assuming that the near total loss of net worth described in the original post was a factor of some mysterious personal disaster, rather than caused by a total meltdown of markets, and also assuming that i am in fact able to take a scythe to my living expenses, i'd do no investing/trading for the first couple of months, focus on my day job, save up ~$30K (= ~$27K SGD).
use DCIs (dual currency investments) to try and get that $27K SGD converted to AUD at spot and pocket an elevated interest rate in the process (typically 1 week AUD/SGD DCI struck at spot pays around 10-25% annualised, though it fluctuates wildly based on the FX derivatives market. was well above 25% in the early days of this current crisis).
keep doing that until one of them gets exercised and converted to AUD, repatriate it home, refill my account with the CHESS broker and start dollar cost averaging into index ETFs again. if my current portfolio was wiped out, i probably wouldn't include direct ASX holdings as part of the buy & hold component of the rebuilt portfolio, and of course there is no more buying CSL for 76 cents a share the second time around. i'd probably go for a 10K/10K/10K split between VAS (or A200)/IVV/VEU.
alternatively if spot is close to the DCI strike at expiry, and the DCI rates being offered at spot are at or around the upper bound of that range, i'd probably roll the DCI instead and keep bouncing back and forth between AUD and SGD while those conditions last. 0.5% a week is pretty good when you don't really care which of the two currencies you take delivery of.
work another couple months, save another $30K. repeat the DCI - repatriate tactic, refill my IB account and fire up the short gamma option trading again. would have to think carefully on this component though, as i may well be in terrible shape emotionally due to the loss, and you don't want to be doing active trading in that state of mind.
and finally the next 2 months pay goes into SREITs, maybe some other SGX listings. long term buy & hold. SREITs were yielding 4-6% before the current crisis but they had gone on a huge run up in the preceding 18 months or so, prior to that they were yielding around 6-9%. no point assessing projected yields now with so much uncertainty about. residents don't pay tax on capital gains or dividends here, so i'd make use of that to help rebuild. even if i moved back home i'd still want to retain a good chunk of investments in SGD, the long term trend is SGD appreciation (which is very pronounced vs AUD) and it's a very stable economic environment here, sometimes referred to as the "Switzerland of Asia".
i'd keep rotating between those 2 or 3 components (index ETF / options trading - maybe / SGX) every 2 months and build up that way. going to be a long hard slog to rebuild the slow reliable way all over again, but it's the only way i know. constant depression over the massive loss would no doubt be my companion along every step of it, at least until i made my first million all over again. after reaching that, things might improve from an emotional standpoint, and probably returns will follow once i get into a better frame of mind for trading.
but if i've misinterpreted the question, and it's asking "what would you do if you time travelled back to when you started investing" as opposed to "what would you do right now, in 2020, if all your current assets were magically stripped away overnight" as i took it to mean, then my answer's pretty simple: buy CSL again at 76 cents!!!
Thanks for sharing Sharkman. SREITS do look appealing. There's number a blogs covering SREITS and Singapore market, are you following any? Which SREITS would be considered blue-chip to withstand recession fallout? What are your views of Singapore banks long-term?
