My goals for 2022

Just like everyone, New Year Resolution is something that I have done every year. Unlike most people, I want to write it down and therefore have something to look back by the end of the year. This post will do just that, looking back  to 2021 and plan the next moves in 2022.

Tl; dr;

  • In 2021, I have done:
    • Purchased a property.
    • Left my position in Adslot Ltd. and work full time for myself.
    • Purchased the first watch by myself.
  • In 2022, I plan to:
    • Able to run 10km in 50 minutes (military standard);
    • Able to meditate for an hour;
    • Purchase a watch from James Bond movie; and
    • Travel to a new place.

Looking into the past

January, the name originated from Janus, the god of doors in Roman Mythology. He has 2 faces, one looking into the past, another into the future. And now is the best time to look back on what did I do in 2021.

At the beginning of the year, I found a good opportunity to add a small property into my portfolio, and I took the chance. It is supposed to be a positive cashflow position for me, which is much needed when I decided to quit my highly paid full time position. Overall, it was a great experience and taught me many things about legal and financial matters as I bought it under a family trust, and everything is different in there.

In August 2021, I decided to leave my position as a senior fullstack developer and joined Digital Envision full time. It was a hard but well-planned decision. We had it planned out since the beginning of the year and get it done. I went from a 6-figure salary down to minimum wage salary and it was not easy to do.

Lastly, I purchased the first watch for myself. I haven’t bought any watches before, and it felt ecstatic. And the watch holds a purposeful significance to me, it reminds me about that every time I wear it.

Envision the future

Physical exercise is what I am lacking in the past years. In 2021, I started to go and have myself checked out physically, but there is still a lot to be improved. I have always want to be in the military, and in a way, if I can train like them, I will feel like I achieved that goal. Getting fit is a good thing to have. I believe that it will prepare me for future scenarios. It’s always good to be ready, for what to come.

And of course mental exercise is also important. Given my current position, that is more crucial than ever. I am constantly under pressure and guarding my mind against the negatives is mandatory. I have started to meditate since last year, and can be in a session of about 20 minutes. I think with frequent practice, I can increase the time and feel better each day.

Gotta have more watches

As a novice watch enthusiast, I decided to collect the watches that are on the wrist of James Bond. It will be a hard collection to complete, but there is no rush in it. I like purchasing watches with stories behind it, unlike some other people who wear watches to show how rich they are.

I am looking for a Gruen Precision cal 510 17J Starburst. It is quite rare to find something that still comes with the original paperwork. But I will keep looking and, who knows, maybe one of my readers will help me with it.

Gruen Precision cal 510
Source: ebay.com

Travel to a new place

It is always a good idea to travel and see different things. I believe that epiphanies are often come when we travel. In the business world, a single light bulb moment could make me millions. And also discovering different scenes, cuisines and cultures are great too. I myself have not been to a lot of provinces in Vietnam. And I would like to do so in 2022.

What about career goals?

Since I am working for myself now, the career goals are now with the company goals. We have already planned out what needs to be done and KPIs for the company. Therefore I do not need to include them in my personal goals. I think personal growth is pertinent to this blog post.

Summary

Well it’s a short post, but a lot to be done. By the end of 2022 I will look back and see what have I accomplished. I have high hopes that I can do all the things listed above, and will update my blog on each milestone achieved.

“You should set goals beyond your reach so you always have something to live for.” — Ted Turner

By Tuan Nguyen

What does chess teach me?

For most people, chess is associated with old dudes sitting and looking at a wooden board for hours on end. It is a very time and brain consuming activity, and unfortunately not a lot of people can sit and think for a long time. Chess is my favourite boardgame by nature, and I’d like to keep a note on a few things that I learned from it.

Tl; dr;

Chess teaches me a lot about principles of life and also, death.

  • Every pieces have their own role.
  • If you get to the end, you can be whatever you want to be.
  • It helps me practice thinking about multiple scenarios at once.
  • Sometimes sacrifices are required for the greater good.

Every chess pieces are important.

All chess pieces play their own role in the game. Not a single pawn or piece is useless. The player is the one who put them into useless situations. You can win games with just a pawn, and can lose games with queen advantage.

The thing I get out from is, we cannot do everything, be everywhere, and satisfy everyone. We can only do what we want to do, be where we want to be, and make only the people we care about happy. I guess it is kind of similar to not giving a f**k about matters that I don’t really care about. Flipping the thought, would that mean criminals, cancer patients, homeless people, etc. are actually playing a valid role in the game of life? There is no good without bad, no happiness without sadness, no yin without yang. Should we just need to accept that bad things are bound to happen, how we respond to them defines how we can win the game?

The end is always good.

pawn looking into the mirror with queen reflection
Source: chess.com

There’s an old saying, “Everything will be fine in the end. If it’s not fine, it’s not the end.” As you know, when a pawn go to first rank or eighth rank, it can be promoted into a more important piece. Therefore it transforms from a seemingly useless chess piece to a more powerful and more important piece.

There are a lot of threats on the way for a pawn to reach its final destination. Promotion is a reward for that journey. And the best thing about it is, when the opportunity for a pawn to head towards the end, every other pieces will support that pawn, and every other pieces from the other side will try to stop it. We just need to recognize and take the opportunity with a strong determination, other people will help us get to where we want to go.

Thinking in multiple scenarios.

Playing chess, or any games that require strategic and tactical thinking, will train the players to think about multiple possible scenarios. This translates well in life and in business. Whenever I deal with a client, I can think of a few different ways that they can react to my proposals, and prepare the response in advance. I tend to do the same in life, and it is quite hard for me to be surprised by something, since I have already thought about the scenarios before hand, either during drift off, dreams, or day dreaming.

It’s a good thing in business. But in life, sometimes I have to fake being surprised. And to me that just feels weird. Maybe I’ll get better at that in the future.

Sacrifices are required sometimes.

thanos meme with text
Source: me.me

It’s hard to talk about chess without mentioning sacrifices. If you sacrificed and won, it’s the best feeling ever. If it doesn’t work out, you will be blaming yourself for the stupidity. The thing about sacrifice is, you can’t take back what you have given up. Therefore we need to be very careful when deciding to remove an important piece of our lives, whether it is an asset, or a person. However, in real life, at least you have a chance to get back what you surrendered before.

For example, I give up my free time, my high figure salary, to build up the company that I own. I accept the low salary amount, barely enough for me to live, with the expectation that my company will grow bigger and bigger. And so far it has been growing exponentially. I feel happy and grateful for that, and ready to forgo more things as needed to see it grow.

Summary

Above are just 4 of the lessons that I learned while playing chess. There are a lot more that I realized when playing but I’d like to keep them to myself for now, as some of them are quite controversial. Maybe in the future I will note it down, when I deem appropriate.

“There are tough players and nice guys, and I’m a tough player.” ― Bobby Fischer

By Tuan Nguyen

Digital Envision Logo

What I learned after 3 years doing business – part 3

Continue from Part 2, let’s talk about the last 2 lessons that I learned over 3 years of managing a business; talk less, listen more; and a new world of opportunities.

Tl; dr;

  • Talk less and listen more.
  • Access to a whole new world of possibilities.

Interactions with other people

I have always been a quiet person, which I find it a lot easier when I realized this approach actually works. People tend to complain about their issues, brag about their achievements, and talk about their plans. All of these can be converted into opportunities. All I need to do is to ask the right questions to keep them talking. Looking back, most of my meetings will consist of about 80% of other people talking about their businesses and their issues. At the end of the conversations, I know more about them than they do about me, but that 20% of me talking is embedded in their mind, and I make sure that they remember me and my services through talking about how my services can help them.

Credentials are often overrated. I find that when dealing with a person, they care a lot less about what achievement you have, and more about how you can help them solving their problems. So I don’t even bother telling them about my companies size, how much clients have we served, etc. I listen to their issues first, and if I can help them with Digital Envision‘s services, I will align the discussion that way. If they query about the credentials, then I briefly talk about that, but it never is the start of my conversation.

Negotiation skills are something that I have been working on in the last few months. I practice methods in Never Split the Difference book, which is suitable to my style of interactions. So far it has been helping me securing a few contracts, so I will continue on practicing the methods. There is one sentence in the book that I like the most: “Negotiation is an art to make other people have your way.” I guess once you really understand this quote, then you will be an effective negotiator.

Opportunities

There are things that will never be available to non-business owners, simply because we don’t even know about it. One example, everyone uses American Express cards. Some even use multiple credit cards, which we call them card churning, which is a method to rack up bonus points, often flight points, to be able to claim for free flight travels. The major down side of credit cards is they cannot be used to pay invoices with bank transfer payment method.

Well, not really. Amex allows business owners to access something called Access Line, which allows us to pay our employee salary, our invoices, and even our tax returns with Amex account. And we can rack up the points with these payments. Through card churning, you need to apply to multiple credit cards, damage your credit scores to get a few hundred thousands points. For us as business owners, we just need to pay everything with our credit account and the points are quickly stacking up. (We’re not there yet) Imagine we spend like 100k each month as employee salary, and with 1 Qantas point per dollar spent, it’s already 100k Qantas points per month. That’s like a free ticket back to Vietnam every single month.

Apart from exclusive services, I also have access to certain conversations that contain information before it was reveal to the public. I know about how Federal government rolled out their COVID-normal plans probably 2-3 months before it took place. And that privilege really helped us realign our business to fit the direction from the government.

Summary

2 words to sum up the lessons: Quiet and Opportunity.

It has been a life-changing experience for me over the past 3 years. Lots of lesson learned, and there are still numerous things out there waiting for me to know about them. Life has never been more exciting for me.

“The quieter you become, the more you are able to hear.” – Ram Dass

By Tuan Nguyen

Digital Envision Logo

What I learned after 3 years doing business – part 2

Continuing from Part 1, in this post I will discuss on another 2 massive lessons that I learned, managing people and work-life balance.

Tl; dr;

  • Managing people is getting more and more complicated as the team grows.
  • There is no such thing as work-life balance for the owners (or at least myself).

Managing people

When there were only 2 of us, life was simple.

Then we added an admin, and a developer. It was something that we needed to get used to.

And then, everything changed, now we have 18 in Indonesia, and 3 in Australia. Now things like company values, company cultures, etc. are something that we need to create and effectively communicate to our employees.

I read a lot about these topics, trying to figure out how other companies do it and grow to over 100 employees. I like Simon Sinek’s way of thinking, I adopted some of that principles into the company. We put employee benefit first before our clients, believing that they will deliver better results and in turn, the clients benefit from it. A lot more was spent into creating an enjoyable working environment than we spend on marketing, which is basically just our time at this point. We have not seen a persuasive way to spend our budget on marketing effectively (yet). So far we managed to keep our staff happy and productive. But that does not mean we don’t have people resign or get fired from the company.

So far we had about 6-7 people who left DE. Most of them resigned because of various reasons. I only had to fire one person due to his performance. And it was a devastating experience. Before the day, I had to find a friend and had a drink with her, which I don’t normally do, to prepare for that. Firing people is not easy, the first time you do it, it was hard.

We can’t get to over 20 staff without doing A LOT of interviews. I started to be able to feel what other people don’t talk about. Sometimes I see the desperations in their eyes, the lack of food, the distress in trying to find another job, etc.. And it was hard to turn them down because their skills are not good enough for us. We have to put our company before all else, otherwise it is a crime against our current employees. And that means we have to be cruel sometimes. The other day I interviewed someone who is in my dad’s age, and it is hard to put him into the declined status, his skills are not what we looked for, but still, his eyes showed me the misery of life.

interview count
As of today we have completed nearly 600 interviews

Looking back, my business partner and I have sacrificed quite a lot for the company. Over 3 years, it was and still is our top priority from morning till night. We do everything to nurture it. In a way, I understand more about being a parent, and I am ready to sacrifice a lot more to see it grows.

Work-life balance

As an employee, all we want is having 8 hours of work, 8 hours of rest and 8 hours of entertainment. And that’s how the whole revolution started and now we have Labor’s day to memorize that.

I am here to tell you that once you become a business owner, you can forget about that. Maybe later on, once you have someone run it for you, but I’m not there yet, so this is what I noted down for myself in the future.

Over 3 years, my schedule has been 16 hours of work and (maybe) 8 hours of rest. And it is necessary, we had to plan the next catch ups, who to meet next, creating processes for staff to follow, etc. There are a lot of work that come with having employees as well as keeping the leads coming in. Mental breakdowns are expected. And I sometimes feel overwhelmed with all of these. I am scared, but I can still push on. Most people will not understand this, and I don’t bother telling them.

Lockdowns have been really good for me. I don’t need any excuse to go out on weekends, no planned dinners and other social conventions. Over 18 months, I have been able to focus on growing Digital Envision, and it will be better next month, next year and beyond. While most people complain, I kept my mouth shut, and keep pushing through all barriers.

Summary

2 words to summarize the above lessons: empathy and sacrifice.

I learned how to read people when they need something from me, and it is not pleasant most of the time. I get used to it, but still it stings everytime.

When you’re working to provide for your kids, you would do anything to keep them happy. I have the same feeling when it comes to Digital Envision. There is no compromise to that, and it makes me happy.

In the Final part I will talk about how I interact with other business people and the opportunities that I captured.

“Nothing is miserable unless you think it so; and on the other hand, nothing brings happiness unless you are content with it.” ― Boethius, The Consolation of Philosophy

By Tuan Nguyen

Digital Envision Logo

What I learned after 3 years doing business – part 1

People say that over 50% businesses fail after 2 years, and over 90% fails after 5 years. Given that Digital Envision Pty. Ltd. has been running for over 3 years, it’s time to look back and reflect on the lessons learned.

Tl; dr;

  • Start from scratch is a lot heavier than purchase existing businesses.
  • Building contacts and networks takes time, A LOT of time.

How did we start?

The journey begins in September, 2019. A friend of mine worked for a clinic and the IT company who supported the clinic went out of business. She asked me whether I knew another IT company. Coincidentally, I was planning to participate in an event called Startup Insider, which was a Shark Tank – like event. “Right now I don’t know, but give me a week and I’ll send you the details of an IT company.” – I told my friend.

In 1 week, my business partner and I created everything from nothing. We registered the business name, created the profile website, created a brochure representing our services, basically everything needed to present to the clinic. And we got that contract the week after. It was simply just maintaining and further developing a few WordPress websites, nothing too special. However, part of me was surprised of how fast one can build up a company just like that. All we needed was the will to do.

So we got our first client, how did we get our second one? This was difficult for both of us, but we managed to get 2 more small projects from the first client as well as the employer of my business partner. However, both of us were just working on this company part time, there was no commitment and therefore the sales became rarer and rarer. And because of a misunderstanding from within the company, my business partner got fired and we faced the first opportunity of having him doing full time for DE.

Everything changed.

He started doing full time for DE. I introduced him to BNI and we decided to join under web development category. We started the most difficult time of our company, survival. BNI has been really important for our growth, my business partner spent a lot of time making connections and joined meetings with business owners in BNI. I did a lot less networking than him due to working full time for Adslot still. I was in charge of all technical aspects and around this time we had our first staff, a general admin and a developer.

That was a lot of work for 2 amateurs trying to start a small business. Looking back on that, it was good that we started from scratch. We now understand what needs to be done to build the business from ground up. However, next time, we will look around first and try to buy an established business instead of growing from scratch.

Growing business networks

Like I said before, BNI has been a key factor for our growth. However, it took us a year and a half to finally see the fruits. Through the first and second lockdown in Melbourne, everything froze and we managed to get most of the grants, which were tremendously helpful. We had barely enough to pay our employees, while continuing to conduct meetings with more and more people within BNI networks.

After a while, we made some people think of us whenever their clients said they needed a website or a mobile application. And it all started to explode, especially in the first half of 2021. Before that, we had doubts on whether this actually works. We had a hard time discussing on whether we needed to extend BNI membership because we didn’t see anything fruitful at that time. But we persevered on that chosen path. Since then, we joined 2 more business networks, one being Victorian Chamber of Commerce, where we had the opportunity to meet with the politicians and listen to their plans ahead; another one is Club of United Business, which we found extremely helpful on our path of building a better business.

Zoom networking meeting
Me at the top left corner in a meeting from Victorian Chamber of Commerce

After talking to people who referred us business, I realized that it is crucial to keep in touch with the key referral partners, as they need to remember us first thing when they hear anyone talking about needing our services. If they don’t remember us at that time, most likely other company took our place in their mind. This aligns well with one of BNI’s principle: be visible. And we will continue to be visible in all of our networking events, by participating in the conversations, people will remember you and your services.

Summary

If someone asks me to sum up my experience on the above lessons, I have 2 words only: decisive and persevere. We saw an opportunity, we took the leap of faith. Business partner and I all agree that I have a lot of patience when it comes to business matters. And so far, it worked out for us.

In Part 2 I will discuss 2 more lessons about people management and work-life balance.

“Be decisive. A wrong decision is generally less disastrous than indecision.” – Bernhard Langer

By Tuan Nguyen

Is it bad to move to a new place?

Recently I moved to another apartment, and I just want to note down what I went through and whether it is a reasonable choice for me.

Tl; dr;

It was a great choice. Both in financial and mental aspects.

  • Financially: saving on rent per week, and it is actually a lot.
  • Mentally: soft reset on life, and re-evaluate the items in my possessions.

Financial numbers

Since I am more attracted to numbers, this is normally the first point of view that I consider.

With the rent price going down across Melbourne CBD, I did some research and decided that I currently pay a bit more than what the market has to offer. Therefore I decided that it is time to do something.

What did I do first? Well, I asked the current landlord to drop the rent down. They didn’t go down to the level I expected, and they were going to sell the apartment anyway, so I realized that I need to find what I want elswhere. I sent my 1-month notice to the property manager and started to find another apartment. It is necessary for me to do so since now I have a deadline to adhere to.

It is easy to find something good in the CBD with the budget of $300/week. You wouldn’t imagine the view and the convenience some of these apartments offer in this price range. However, that is not my budget. My budget is a modest $250/week.

I have a hypothesis that some landlord would be motivated to drop their pricing a bit more in this weather, especially in the lockdown period. Yes, I gave notice just before Melbourne went into the 5th lockdown. And I have 30 days to play with that idea. I cannot inspect the apartment physically, only through images and videos. And I need to put in a lot of offers to confirm the hypothesis.

The steps I took are as follows:

  • I spent a few hours in the first weekend, shortlisting the apartments that are in my range and around $50 above. So anything less than $300/week is considered.
  • Prioritize the ones that I would like to live in, with good view, good natural lights and preferably unfurnished.
  • Contact all the property managers asking for the videos if it was not available, and normal conversational questions to keep them engaged. Also tell them that I need to move by that date.
  • Wait a week and then apply to all those apartments, with the rent offers scale back 10-20%, e.g. $300 -> $250, $250 -> $210, etc.
  • Keep monitoring the market and add new listings into the shortlist if they satisfy the criteria.

From all apartments I applied (probably around 40-50 of them), I have 2 offers accepted by the landlords. Both apartments dropped their rent from $300 -> $250 per week. Now I have the ability to choose. And I ended up choosing the one that I think suits me better. The hypothesis was proven right.

Now is the fun part, how much do I save, considering all the cost I needed to spend?

Above is the moving cost as well as my previous rent.

  • I hired a removalist company to move all my stuff, and only need to pack them up.
  • I hired a cleaner company to thoroughly clean the old apartment.
  • There is a small setup fee for the internet at the new apartment.
  • I pay for 6-months mail redirection from Australia Post to ensure that my mails are not missing. I do have a few bills that are still going through the mails.

The meaning of the above table is, I need to live in the new apartment for 10.63 weeks (around 2.5 months) to recoup all the moving costs, and anything after that is basically what I can save from the moving exercise. Not to mention that I will free up some money that was stuck in the bond for the previous apartment.

Mental aspect

Lots of people are afraid of the thought of moving houses. And it is for good reasons. People like to settle down, whether it is their parents and friends told them to, or they believe in having a stable base and then they can take off in their career. Asking someone and you will get a reason why they don’t want to move, or trying to find a place to stay for a very long time.

I believe that I am always home. I don’t need a physical place to remind me of that. That can change once I have my own family, but by that time, I will be in a much better place comparing to where I’m at now. However, we are living in the present, and I feel quite good about the decision to move. It is like hitting a reset button in life, moving to a new place, but not so strange that I feel lost, and I spend time to look through all the luggages I brought with me until now.

It’s a good exercise to audit all items that are in my possession every once in a while. I found that I could throw away a few unused items, restock medicine cabinet, and re-evaluate wardrobes.

I also did a small experiments on my friends, I selectively told certain people that I was going to move and see how they react throughout the period. So far, only my family keep up with what I have been doing regarding the move, the rest don’t care enough to ask. Which is quite interesting. I shall note this down for future references.

Summary

Overall, the move went smoothly. I could have bargained for removalist and cleaner services. But given the tight timeline I ended up going with what I have, knowing that after a year I will be in a better place anyway. And who knows what will happen after a year, I may move again.

“Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.” – Barack Obama

By Tuan Nguyen

New normal – are we fked? – Part 3

Last 2 blogs are about my observations, and this one will be about my assumptions and actions to deal with this “new normal”

Tl; dr;

Assumptions

  • The pandemic is here to stay, maybe downgrade to a seasonal flu.
  • People will be working remotely more.
  • There will be financial/economic consequences after we get out of the pandemic status.

Actions

  • (Try to) ignore the news that is not related to my goal(s).
  • Keep a consistent daily schedule.
  • Research and prepare for future real estate investments.
  • Improve Digital Envision and VA For Everyone businesses.

Assumption – COVID-19 is here to stay

cat with cute eyes

Since September 2020, when we just got out of the longest lockdown in Melbourne, I started to expect that the pandemic will not be gone any time soon. We have made great progress on vaccinations, but as long as there are still a significant population who are not immune, we still face the chance of mutation and therefore, outbreaks. Not to mention people are irrational and there is always a thirst for physical connections. Which is why I was not surprised when there were other lockdowns and outbreaks afterwards, as they are all expected in my mind.

With that being said, we are living in the best time in history. All previous pandemic experienced a lot more cases and a lot more death. Black Death plague in the 1300s, it killed over 30% of Europe’s populations. Spanish Flu in the 1900s, which infected 500 millions people and 100 millions people died. We should be grateful that we are in a much better place now.

Assumption – Working remote will be more common

work from home meme

With social distancing rules applied, offices cannot put as many people like they could before. There is a chance that some of the workforce will be working remotely as a norm. This will change a lot in the professional services industries. I am still unsure if blue-collar industries will be affected or not.

I have been working from home since March 2020 and my personal experience is that sometimes I get distracted of certain issues in the house, therefore reducing my performance. Moreover, the line between work and life fades when I work from home. Long term it may lead to work-life unbalance, which is not what anyone wants.

Therefore my thought is that we will come back to the office part-time instead of full-time. How many days? I don’t know. People are still trying to figure out the balance.

Assumption – There will be an economy consequences

frog meme

Since the government has to publish a lot of fiscal as well as monetary policies to support businesses as well as citizens during this time. There will be a time when we need to pay back what we spend today. Will it come any time soon? I don’t know. For now everyone is happy because their asset values are climbing up day by day, week by week. Who cares about the downturn, right?

I am no economist, and surely everyone has their own judgement about the future. I only want to ensure that my future is somewhat predictable in financial term.

Action – focus on what matters

yoda on focus teachings

We have too much distractions today. Our attention has become a currency that every business out there try to buy. This is why advertising businesses are so successful. They broker those deals.

We all know that to be good at something, we need to spend a lot of attention to it. Therefore, I decided to block out all news and information that are not relevant to my goals and my interests. This started when we started going into lockdown last year (March 2020).

I realized that if there was something really, really bad, I would know it from my friend and business circle. So I don’t need to read the news to know about it first hand. People have the need to share disastrous news anyway. We had a tiny earthquake a few days ago for like 20 seconds and the whole social media is already flooded with it for a few days. As a result, I unfollowed all news site, drop my email subscriptions to minimum, and only check social media during my breaks throughout the day.

This frees up time for me to do things that I deem more important to me. I started to spend more time cooking, do some exercising (not much but I keep it consistent), improving important relationships and working on my business. I also started to research the spirituality topic and find it very useful to keep me stay in my track. Through my spiritual journey, I feel at peace with Death, when the time comes, I will welcome it and walk along side with Death like an old friend. But I know that I can still contribute to Life, so I have a strong faith that until I cease to prove my usefulness, I’m not going anywhere. This helps me stay calm during life and death situations.

Action – research

During this time, I read a lot of books related to real estate investments and do researches on them. All to prepare for the case when there is an economy down turn. My patience is somewhat higher than average, so I believe that I will be able to wait for a good deal to strike.

Researching is not an easy thing to do. I need to keep an open mind, as well as managing my risk level to figure out which assets can be comfortable for me to hold long term. To me, anything that is less than 5 years is considered short term, 5-15 years are medium term, and longer than 15 years are long term holding. Obviously I would like most of my assets in the 15+ years. Therefore a thorough research is required before I jump into a new investment deal.

Action – work on my business

Lately I decided to quit a high paying job to fully work on my business, which is a big decision because now I only get paid for half of what I used to get. However I get to work for myself, and it is really a different world to me. I worked 2 jobs for the last 2 years and it was time to eliminate one thing in life and fully focus on the other one.

The businesses are flourishing, in both Digital Envision and VA For Everyone. I believe as a business we can hit 20 staff by the end of the year, probably more. We are still small but our growth has been great in the last Financial year. And there is a different world when it comes to business finance. I am looking forward to taking advantage of it. This financial way will help me purchase more and more real estate assets in the future. And who knows, I may dabble in other investment assets as well.

Summary

I believe that everyone must have a plan for the future. Sadly most of us walking around with no idea about tomorrow. Is it the lack of education? Is it just human nature? I don’t know. But the fact is that we are irrational creatures, and logical thinking is basically unnatural to us. It takes a lot of courage to actually follow the plan we set out for a better future.

“Try not to become a man of success. Rather become a man of value.” ― Albert Einstein

By Tuan Nguyen

New normal – are we fked? – Part 2

Let’s talk about what I see in other people when we are all put into an unexpected situation.

Tl; dr;

Most people I know have negative thoughts about the future. They all have different ways to deal with the pandemic.

  • Some withdraw into their self-built containers where they just wait for the storm to pass.
  • Others break the rule repetitively to go where they want, do what they want, and justify it as freedom of choice.
  • Some others pursue new habits, hobbies.
  • Only a tiny portion of people that I know, who can and commit to take advantage of the circumstances.

The hibernators

Source: libraryvisit.org

As the name that I just made up suggested, this type of people will create a safe haven for themselves and stay there until everything is over. And as long as they are comfortable, staying out of troubles and other issues that are happening, it’s all good right?

I am lucky enough to surround myself with friends who have stable jobs and income. They are generally did great in university, being respected in their fields, and therefore secured jobs and in some cases, career. It is understandable that when the whole pandemic happened, and if they are not being affected by the economy, then defensive cocoon is definitely an appropriate choice to go. (Defensive cocoon is a term in chess where you just put all the pieces next to your king to weather the enemy’s attacks).

It is quite easy to spot these people, especially with limitation in travels and reason to go out. Some behaviours include:

  • Being lazy to go out (within the rules), and if going out, they are the ones who look at the time first in the group.
  • Avoid drastic changes, even if they know it’s right for them. Changes can be relationships, jobs, place to live, etc.
  • Often use the phrase: “Once we get out of this…” Every exciting things are pushed into the future, leaving all other things in the present.

I think it is a perfectly reasonable way to deal with the crisis. However, there are little contributions from these people to other people, or to the humankind as a whole. But at the end, they may survive, and that is important.

The rule-breakers

Let’s put aside the anti-vax and anti-mask people, since they generally fall into this category. In this section, I only want to talk about those who break the rules in a more subtle way, but still think they are in the right.

One thing to note is that I have done breaking the rules as well. This is only what I observe from myself and from other people. Most common things that we do is that despite curfews and restrictions, we find every ways to get out of the house, even though it’s not deemed necessary. And we tell ourselves things such as:

  • I can’t stay at home, I’m an outgoing person.
  • It’s only a few hours.
  • I just want to have some fresh air, I didn’t come into contact with anyone.
  • I have work permits, they can’t fine me. (my all time favourite, also apply people who has permits to do charity works)
  • I have freedom and rights, noone can restrain me.

My thought on this is, it is somewhat selfish to justify going against the rules to satisfy oneself the “need” to go out. The 3rd and 4th lockdown in Melbourne happened partly because of the one unlucky person who did exactly that.

So, if you don’t want to break rules, or get tired doing so, what else could you do?

The hobbyists

“I am experimenting something new”, “I just started on the thing that I’ve always wanted.”, “I plan to do this and that”. These are the typical sentences that I hear my friends say every now and then in the last 18 months. And it is quite exciting and beneficial to start a new hobby or a new business idea. But I have some concerns when certain signals appear. Considering this scenario: a person who has never touched anything musical, suddenly announced that they want to start on not one, but two different musical instruments. Or a person who has never started a business, and then plans to start 2 different businesses within a span of 6 months. Something doesn’t add up here.

My hypothesis is that these people are just looking for something, anything, to distract them from the real issues. Most common ones are binge-watching movies and TV-series, but I purposely exclude them from this category. I only want to look at people who start something new during this time. The truth is that to build an actual hobby or a business, you need to focus on doing just that one thing. Juggling multiple things at once will either exhaust you, or you will end up with nothing done, because everything is half-baked.

This is me speaking from experience, I used to do a lot of different things in my free time, all at once, e.g. building electrical circuits, playing guitar, playing piano, rubik speed-solving, etc. And let me tell you, I ended up knowing a little of everything, but nothing to be proud of. I would rather do one thing and be an expert in it.

From the observation, it seems like these people does not have any goal in life. They simply live and go with the flow. “You Only Live Once” mentality. People with goals behave differently. They are focused on one thing at a time and do not stray from it. This is why those people are quite boring to talk to sometimes. As all they know is that one thing and you will end up listening to the same thing all the time when you talk to them. But those people are the ones that actually make things happen and change the world around them.

The world changers

These are the ones that I admire the most. They believe that it doesn’t matter what is happening out there, how they respond to it is the only thing that matters. They happily adapt to the new circumstances, and even thrive from it. They rarely listen to news, but they know everything related to the topics that interest them. World changers believe in helping people get what they want, and in turn, they receive what they deserve.

I happen to be a part of a small group of people who strive to be the best at what they do. We all have our own goal written down and carried with us all the time. It’s the compass that guide us when we feel lost. The written text prevents us from doing anything that does not contribute to achieving that goal. I pretty much have the text in front of me all the time when I’m working. And when I’m walking outside, the tiny piece of paper is felt in my pocket as a constant reminder.

It’s not that hard to spot these kind of people. They can always recite their goal in a 1-2 sentences without even thinking. The best thing is that I always have a feeling when I talk to different people, whether they are focused on their goal or not. Sadly I have not encounter anyone outside the group who is determined to get to their destination, by any means necessary. But maybe one day I will.

Summary

People have different ways to respond to the change in circumstances. Above are just 4 different ones that I observed. Without a doubt, I want to be one of the world changers, because if I only live once, why not lead a life that affects as many people as I can in a positive way.

In Part 3, I note down a summary of what have I done in the last 18 months that contribute to my goal, and how I ignore almost all news that are non-related to my goal.

“Clarity and simplicity are the antidotes to complexity and uncertainty.” – General George Casey

By Tuan Nguyen

New normal – are we fked? – Part 1

Just my thoughts on the “new normal” that has been talked about in both social media as well as government official announcements. What I observed other people’s behaviour after a year and a half under COVID-19 influence, and how did I respond to the same circumstance.

Tl; dr;

I think we are heading towards a cliff as a whole. Big explosions are expected to go off at anytime. However, it depends on what can I do if and when they happen.

I choose to hold close to my investment assets, and not selling anything as of now. Holding as much cash as I can in the offset accounts, while looking for more investment opportunities. I will only expand my portfolio if I find something that fits my calculations and risk tolerance.

The economy

Did you ever look back 2 years ago, when a 2-litre bottle of milk is $2.00? Now, it is $2.40. Same brand, same bottle. What happened? Did inflation go up so much that we did not even notice? Other food products have gone up too, maybe not 20% in the case of milk, but surely, 10% is the norm. While people are looking, researching on stocks, real estates, cryptocurrencies, other aspects of our lives are also going up at a high pace. And nobody bats an eye.

So why did it happen? According to investopedia, there are 3 forces that may affect the inflation rate of a certain product. Cost-pushing, Demand-pull, and Expansionary Fiscal Policy.

  • Cost-pushing: with the restrictions in travelling as well as worsened relationships with foreign countries, we are not importing as many materials in the last 2 years. As a result, a lot of subsequent products are going up due to the lack of materials. We can see it in the increment of new property builds.
  • Demand-pull: this probably can be observed the most when there are disconcerting news, like the first lockdown in Melbourne last year. People flocks to purchase food, and not surprisingly, toilet papers. We did have some people hoarding them and resell with a higher price. And sadly some people bought the items.
  • Expansionary Fiscal Policy: I strongly believe this is the cause of all food prices going up. With various supports coming from the government, suddenly there is more money in people’s pocket, and they can afford more. Corporations are probably the best people to take advantage of this fact, and they raise the price, just a little. I don’t blame them, if I were in their shoes, I would probably do exactly the same.

However, our economy has not been thriving at all. Lots of money going into people’s hand end up in properties. Let’s consider 2 streams, one is purchasing established properties, the other is purchasing new builds.

  • Established properties: this purchase, in my opinions, does not contribute to the productivity of the whole economy. It’s just moving money, or mostly credits in this instance, from one bank to another. And because the price of properties has been rising, there is more and more credits being created every time properties change hands. Which may lead to the breaking point where people realize that there are just too much debt to pay, and we have a time bomb waiting to explode.
  • New builds: contribute a temporary boost of productivity and jobs, due to the fact that someone has to build the property. However it is not sustainable. Some people will argue that we can keep building houses, but we only have like 30 millions population. Who are you building these properties for? Unless the government has a better migration policies, and hoping that people will flock into Australia, we might not end up where we think.
Source: ABS

Since when are we borrowing to buy properties more than we invest into our business, and therefore the economy???

Employment

I have seen companies who wants to employ an experienced level person for 6 months, but unable to do so. They put their compensation to more than $160,000 per annum but there was no hope. At the end, they needed to source the resource from oversea.

We are facing an issue where most of our senior level employees are from migrations, and not a lot locally. This may be the reason why employment is still high, and even if it’s low, the people who got employed may not worth it. The longer our border restriction is, the companies become more desperate and they will need to either go for offshore resources, or agree to a sub-optimal local one.

I know about this because I’m running a service to help businesses finding their offshore resources. The business is called VA For Everyone. And I talked to a lot of business owners with resounding answers that are similar to what I described above.

Summary

I guess that’s long enough for a rant. The economy and the employment aspects are pretty weird and I manage to take advantage of it by providing people what they need. However if this drags out for another year, I am not sure what is going to happen.

Next part I will share my thoughts on people’s psychology from observing people in my circle.

“You see, but you do not observe” – Sherlock Holmes

By Tuan Nguyen

stock investment

My guess on CBA Share buy back

Recently I received an offer from CBA about their share buyback program. They are offering to buy back shares with the total value up to $6 billions. And I am curious of how it affects my existing holding. I took a bit of researching and come up with a guess on how the share price will change.

Tl; dr;

The share price may drop slightly (4.44%) due to the difference of share outstanding and shareholder equity, before and after the event. The drop is too small to do anything meaningful and fit my investment strategy.

What is share buy back?

A company can offer investors to buy back shares from their portfolio. This reduces the floating shares on market, and decreasing the market capitalization as the result.

In the case of CBA, they offer to buy back shares from investors with a certain discounted price, as specified in the booklet. I am sure there are cases where people need to relinquish the share that they are holding, but it is not easy to dump a few hundred millions worth of share into the public market. Therefore these share buy back may be a great way to get rid of the shares without people knowing.

Assumptions

  • The Price/Book ratio is unchanged.
  • CBA successfully buys back the maximum amount of shares that worth $6 billions.
  • CBA buy back price is the market price at the time this blog is written.

The calculation

First, let us see what are the current figures of CBA. For the calculation, I need to find the following details.

  • Current share price;
  • Current share outstanding;
  • Current market capitalization; and
  • Current Book value, or Price/book ratio

Luckily, we can easily find all these information in Yahoo Finance.

At the time of writing, the information is as follows.

CBA current figures
Current CBA related figure

Note that the green values are the manual input value, while the other fields are calculated from the green field.

Next, I attempt to calculate the new share price, by following this logic.

  • After share buy back, the outstanding share will be $6 billions worth of share less.
  • CBA will spend $6 billions from its pocket to buy back these shares, which means the shareholder equity will decrease by $6 billions.
  • The new book value per share will be recalculated by dividing the new shareholder equity by the new share outstanding.
  • Recalculate the new share value by multiply the book value by the price/book ratio.

The result will look like this.

After buyback calculations
Final calculations

As we can see the expected share price is smaller than the current share price. However it is a very small amount. And therefore it is meaningless for me to do anything about it.

Summary

Off market share buy back is a good way to release capital from CBA shares. However since I don’t like selling shares, especially shares of a seemingly stable company like CBA, I will not participate in this buy back opportunity. And based on the above calculation, I feel that there is no use in doing anything related to the price drop estimations.

I will keep an eye out for the price. The buy back date is 04 October, so I expect the share price to be adjusted to the price above within days of 04 October.

Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it. – Peter Lynch

By Tuan Nguyen