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How to retire early in Hong Kong

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  1. #21

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    you will find the link to the audiofile in the article below

    Inflation and the Fall of the Roman Empire » Human Action

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  2. #22

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    Quote Originally Posted by Morrison:
    you will find the link to the audiofile in the article below

    Inflation and the Fall of the Roman Empire » Human Action
    Much obliged, Morrison.

    The issues raised during the Q&A at the end of Prof Peden's talk were particularly enlightening with people drawing parallels between the Romans' uses and abuses of inflation and the ways in which our own governments (particularly the US at present) are devaluing their currencies in an effort to further their own objectives at the expense of their citizenry.

    All of which ties back to Prof Peden's statement at the outset, namely, that monetary policy serves the interests of the rulers, not the people. As it was in Rome, so now it appears also for us.

    Thanks for an evening well spent.
    Last edited by John Doe Jr; 23-11-2010 at 09:58 PM.

  3. #23

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    Thank you very much for this informative and constructive forum post....I am adding many of these books to my required reading. I am a financial novice and have most of my life worked for the 'man'.

    The only contribution I can make is that I have read many of Kiyosaki's books and find them at best make you think about money however are simplistic and less than realistic. I also have read a blog about him calling him out as a fraud.


  4. #24

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    Quote Originally Posted by MSY:
    Thank you very much for this informative and constructive forum post....I am adding many of these books to my required reading. I am a financial novice and have most of my life worked for the 'man'.

    The only contribution I can make is that I have read many of Kiyosaki's books and find them at best make you think about money however are simplistic and less than realistic. I also have read a blog about him calling him out as a fraud.
    For me, one really important take-away from Robert Kiyosaki's books is preparing yourself to be bold with your finances.

    Trying to keep safe and secure by working for the 'man' is a popular reaction when nothing else in the world seems safe. A number of comments on this thread have hinted at a general discomfort with uncertainty in the future (sometimes well in the future).

    But this could be an excuse for inaction, which in turn leads to regret and disappointment.

    I can't blame anyone for being scared when the world is being shaken to its foundations, just as it was towards the end of 2008 during the global financial crisis.

    Yet it was in November of 2008 that my wife and I placed virtually all our net worth into the stock market (and in just 4 different companies, just to make things extra scary! I think we might have taken the idea of 'focus investing' a little too far ...).

    Did we have sleepless nights? Did we cry when the market plummeted lower in March 2009? Did we feel hopelessly stupid when we sold out of one company (because of negative rumours) only to see those shares increase more than 6 times within 6 months? You know you don't need to ask.

    We were petrified by the realisation that we could spend millions of dollars just with a few clicks of the "buy" button on our on-line trading account. And we could lose those same millions if we chose the wrong investment vehicles, which may have merely appeared attractive because of dodgy financial records we had no way of really knowing were dodgy.

    But we believed we were heading down the right path, however messily and stupidly we were doing it. And our knowledge and self-belief grew.

    The returns we've enjoyed since then have bounced around a lot, and even today we can't guarantee our investments won't fall back occasionally. But we have learned enough (and have sufficient belief in the principles guiding our decisions) to be confident that we will be better off in the next 5, 10 and 20 years because of decisions we made 2 years ago and continue to make today.

    The books I mentioned in a previous post instilled in us the necessary belief in what we were doing regardless of the cruel and uncertain winds that blew all around us and which still give us chills from time to time.

    It's this ability to push past our fears and stick to our rational analysis and disciplined approach to investing which we've learned from the masters of investing.

    We're still noobs in many respects, but we're eagerly gaining experience. Each day we have "aha!" moments when we understand why the masters do or don't do certain things. It's a wonderful learning opportunity.

    Just so you don't get the wrong impression, we've also lost or forgone millions of dollars in profits along the way. But we accept this as the tuition fee for learning this trade - and try not to be so impatient or careless next time.

    There will be defining moments in your time in Hong Kong as well, and many of these will arise because you did something different and most likely with a good deal of courage.

    There will be many reasons why you shouldn't act, and lots of people (some of whom may not want you to achieve more than them) will try to convince you not to try. They'll point to political uncertainties and scams in the financial world, as well as to your own inadequacies. It will be up to you to deal with these using what you know, and by not relying too much on how you feel.

    Lastly, let me get practical and suggest that Hong Kong real estate could be an area for you to start thinking about. Not that individual shares on the stock market might not be just as good, if you'd prefer to go that route (why not do both?).

    As you may know, the Hong Kong Government announced a major policy change last Friday which is already sending apartment prices in some areas way down - up to 10% down just this week already!

    Is it scary? Yes. Are there going to be lots of incredible investment opportunities? Yes.

    The one wrinkle is that the Government's policy has (quite intentionally) made flipping properties virtually impossible. Which means one of the fastest ways of building up your capital base using real estate no longer exists.

    Even so, some people are going to make small (and others large) fortunes in this new market environment by doing things differently from everyone else. They will very likely be scared and feel hopelessly uncertain at times, but they will be driven by knowledge and self-belief instilled during previous struggles. It will be a great learning experience, even for the experts (since no one has seen exactly this kind of policy intervention before).

    Assuming real estate could be your thing, how might you begin to position yourself in this market today so you can retire early?

    Disclaimer: I'm not offering anyone financial advice and you shouldn't rely on anything I say here. I get no benefit whether you succeed or fail financially, though I really hope you succeed and am more than happy to assist you (anonymously) in any way I can in this forum. I am not Robert Kiyosaki.
    Last edited by John Doe Jr; 24-11-2010 at 09:58 AM.
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  5. #25

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    Good morning John- I had a busy day yesterday but here I am back on track.

    Thanks for sharing these insights with us.

    "It's this ability to push past our fears and stick to our rational analysis and disciplined approach to investing which we've learned from the masters of investing"

    That's exactly it. I have a Buffett quote on me desk that puts it like this:
    " What you need is emotional stability" And I feel for most THAT is the real challenge.
    The quote continues with:
    " You have to be able to think independently"
    I may remark that this ability is hard to acquire, at least when it comes to finance.
    This "ability" requires knowledge & experience ( preferably financial losses experienced )
    followed by
    " And when you have come to a conclusion you have to really not care what others say"
    Especially not care what the girls say or anyone else who makes more than you !!!
    In this regard, I vividly remember the analogy given in "The Intelligent Investor"
    Imagine a distance from point A to point B.
    You can get there at a speed of 100 miles/an hour or by driving at a lower speed.
    What matters is that you a.get there and b. get there safely.

    Getting back to your post above "..... financial records we had no way of really knowing were dodgy."
    My approach is I look less at financial reports but to check corporate governance instead.
    i.e. has the company a long track record of creating shareholder value?
    Thus I quite like Buffett's statement that goes something like this:" dividend payments are a tangible proof of earnings".

    Speaking of our readings, I also have developed an interest in the history of money and currencies.
    I have come across a book called "When Washington Shut Down Wall Street by William L. Silber"
    He describes how America evolved as financial superpower, substituting Britain, and providing a new global currency.
    The book also strives your interest in anticipating the unpredictable, I mean these days who would think of the possibility that Wall Street might stay closed ?
    Most people have already forgotten the 4 days closure after 9/11/

    Apart from the money related books do you have any other interesting findings?
    In the other thread about retirement hobbies I have already mentioned
    "Light on yoga by B.K.S. Iyengar "
    and
    " Widening the circle of love" by the Dalai Lama"

    A little easier introduction into Buddhism is this book
    "Ruling Your World by Sakyong Mipham"

    All these books have helped me tremendously to grow as a person and spiritually.
    To enjoy money, but also to leave it behind, at least mentally


  6. #26

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    I really should start a retiring in Hong Kong forum .. in preparation for my retirement in 5 years.


  7. #27

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    Original Post Deleted
    Thanks. I would add share buybacks to it. Though Buffett did not mention but the same principle applies, you need cash.

  8. #28

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    You can see discounting already in estates like Taikoo Shing, which is a particularly liquid estate and where you'd expect to see early movement. The volumes may not be great at present, but it's interesting to see and think about what is likely to happen next.

    It's possibly a bit like watching early returns on election night in one of the world's established democracies. Early vote counts can indicate a major swing to or against a sitting member, or they might just be red herrings. But the longer one watches and the more experience and on-the-ground information one has to draw on, the better predictive ability one seems to have.

    To be clear, I did not suggest that anyone invest in Hong Kong real estate at this time. I am certainly not doing so. I purposely used the words "position yourself" to signal that this is a time to start preparing for action, whether or not that time comes sooner or later will be your call - as will the type of action you take.

    I do believe this is a major turning point in the market, and for that reason there will be good opportunities ahead. I can't tell now what they will be, but I believe some could be very significant for those willing to make the most of them. That's why I'm starting to get ready and firing up my imagination.

    As to other real estate markets, I am really not familiar with them and prefer to focus on what I know here in Hong Kong. Given your broader experience investing in overseas and Mainland cities, I'm more than happy to defer to your assessment in these areas.

    As I have ready access to the Chinese media and commentators through my associates, I'm often able to spot issues at about the same time as other keen local observers and investors. While that's no guarantee of success or the source of always incredible insights, it puts me ahead of a large portion of the population who maintain just a casual interest. That's an advantage I like having.

    And then there are the tax and other issues we've discussed at length before, which combined with how fast this market changes, make Hong Kong an attractive place to invest for me (even - or especially - in difficult and confusing times).

    All this is just personal opinion based on my experience and outlook, and that may explain many of any differences between us (which I don't believe are that many, anyway).
    Last edited by John Doe Jr; 24-11-2010 at 11:34 AM.
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  9. #29

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    Quote Originally Posted by Morrison:
    Good morning John- I had a busy day yesterday but here I am back on track.

    Thanks for sharing these insights with us.

    "It's this ability to push past our fears and stick to our rational analysis and disciplined approach to investing which we've learned from the masters of investing"

    That's exactly it. I have a Buffett quote on me desk that puts it like this:
    " What you need is emotional stability" And I feel for most THAT is the real challenge.
    The quote continues with:
    " You have to be able to think independently"
    I may remark that this ability is hard to acquire, at least when it comes to finance.
    This "ability" requires knowledge & experience ( preferably financial losses experienced )
    followed by
    " And when you have come to a conclusion you have to really not care what others say"
    Especially not care what the girls say or anyone else who makes more than you !!!
    In this regard, I vividly remember the analogy given in "The Intelligent Investor"
    Imagine a distance from point A to point B.
    You can get there at a speed of 100 miles/an hour or by driving at a lower speed.
    What matters is that you a.get there and b. get there safely.

    Getting back to your post above "..... financial records we had no way of really knowing were dodgy."
    My approach is I look less at financial reports but to check corporate governance instead.
    i.e. has the company a long track record of creating shareholder value?
    Thus I quite like Buffett's statement that goes something like this:" dividend payments are a tangible proof of earnings".

    Speaking of our readings, I also have developed an interest in the history of money and currencies.
    I have come across a book called "When Washington Shut Down Wall Street by William L. Silber"
    He describes how America evolved as financial superpower, substituting Britain, and providing a new global currency.
    The book also strives your interest in anticipating the unpredictable, I mean these days who would think of the possibility that Wall Street might stay closed ?
    Most people have already forgotten the 4 days closure after 9/11/

    Apart from the money related books do you have any other interesting findings?
    In the other thread about retirement hobbies I have already mentioned
    "Light on yoga by B.K.S. Iyengar "
    and
    " Widening the circle of love" by the Dalai Lama"

    A little easier introduction into Buddhism is this book
    "Ruling Your World by Sakyong Mipham"

    All these books have helped me tremendously to grow as a person and spiritually.
    To enjoy money, but also to leave it behind, at least mentally
    I also enjoyed reading Niall Ferguson's Ascent of Money, but not nearly as much as his book The House of Rothschild (Vol 2). If you haven't read the Ascent of Money (or even if you have), the PBS TV series presented by Ferguson is informative and entertaining.

    Both books helped fill a gaping hole in my financial knowledge left by too narrow an educational focus which began in high school and became extreme during my university days when I studied only those things needed to pass the final exams! If only I could rewind the clock ...

    Emotional control is the hardest thing for me. I now don't watch share prices much, and will try to go weeks without doing so. I do keep a close eye on public statements and scuttlebutt about the companies I invest in, however. I almost became an emotional wreck watching share prices minute by minute during the day!

    My aim now is to perfect the art of "sit on your ass investing' as recommended by Charlie Munger, while at the same time keeping a very close eye on what my investments are doing - particularly what management is doing regarding fund raising and future business plans.

    I fully agree with the governance issue. As Buffett has said he only deals with people he likes and ideally only invests in businesses run by people (he means "men") whom he'd be happy to have as sons-in-law. That's a pretty tough test to satisfy!

    Regarding the "Point A to Point B" story, it reminds me of the other famous quote that "to finish first, first you have to finish."

    On the issue of "leaving it all behind", this is to my mind the biggest of all challenges. It is similar to ensuring your life is not so dependent on your investments that when they tank, so do you.

    Finding an independent source of fulfilment and security is the ideal, while working on investments like any other business. Still wrestling with this one, but hopefully will emerge victorious well before the final trumpet sounds ...
    Last edited by John Doe Jr; 24-11-2010 at 12:19 PM.

  10. #30

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    To The Brit- I can relate to your preference for dividends, it is cash in your hands.

    However, dividends are subject to withholding tax stipulated by the country
    in which the company is incorporated. If there is no double taxation agreement
    it can be as much as 30%.
    There is no withholding tax on capital gains, so buyback would help me more
    in the current tax environment when referring to US companies which almost always carry a 30% withholding tax on dividends.

    Companies can either void shares OR keep them on stock and reissue later - but with a good corporate governance in place they don't do that. So this closes my argumentative circle.

    To John-"... while at the same time keeping a very close eye on what my investments are doing - particularly what management is doing regarding fund raising and future business plans."

    Well, that's still quite some (home)work to do.
    I just conceive investment parameters, then I email the few chosen, and if I get satisfactory answers I do invest, that's it.
    I don't care anymore what they do as I am 99% certain they will do the right thing, bring in business and distribute the profits to shareholders, as they have always done.
    If I don't get an answer or answers are superficial,well, that is a great sign, too.
    It shows the company does not have a good corporate gov. in place as it does not seem to care about current or about potential investors.
    So I can focus on the really good ones instead.

    Remember,Bufette said " as an investor you own the company, you have the right to ask tough questions and demand the management to be fired"
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