Category: Finance

Poker is a game of skill, which given some luck, might lead someone to the door of riches. Like trading, you need a mastery of fear and greed, as well as calculating different probabilities to your favor for different cards drawn and depending on how you managed risk, you could very well be on your way to infinite riches, like how Greg Merson did it in 2012, bagging home around $8 million worth of tournament earnings. Of course, stories like these are far and few, just like how successful traders are.

As i continue on this hobby of mine, i have noticed a stark similarity between poker and trading and finally understood why its so popular. Many people can blame a bad hand or bad luck when they lose, but depending on how they manage their hands, they could be successful. They can choose to turn away when the promise of “ALL IN” seems too dangerous, just like the dot com bubble during the year 2,000 and its eventual burst. Increasingly, i am starting to feel that if i cannot become a good poker player, i might not be a good trader in the future. In fact, i have already lost 25% of my initial investment. Combined that with the free bonus given, i have lost 75% of my capital. This is dangerous and i usually takes 1 hour to have a positive gain of 20% on my investment but only 1 minute to lose it all.

I will master the game of poker. For without even winning at this game of probabilities that has so few variables, how can i ever hope to conquer the bigger market that is the world’s economy. Of course, i cannot neglect my studies, relationships, health and work while learning to be more ahead of myself for someone my years.

In fact, David Einhorn, a billionaire hedge fund manager is someone whom i look up to a lot. He is a fantastic hedge fund manager cum an excellent poker player.

Today, i am going to talk about doing research before buying something that you want. I decided to talk about this because i recently just saved more than $35 for an additional ink cartridge. When i was previously buying ink cartridges, i did not bother to look for additional information and clueless about where to go, i end up purchasing an ink cartridge for $65+. The salesman was very friendly and let me feel that i have made a real bargain.  

However, this time when i need an ink cartridge, i did a careful research and discover that it only cost around $15 to $25 per piece. Luckily, i managed to find a supplier in Singapore who was willing to sell me the ink cartridge for $38. I bought 2 in the end for $70. To be honest, i saved more than $70 worth of money by just doing a bit more digging around. I am not surprised there are many more instances like this where i can save more. I have made a decision to never jump in too early and do tons of research next time before i purchases something.

Today, i am going to talk about the importance of saving. For some people, the concept of saving is not too new, for others, it can be something entirely alien to you, just like how i was before i really understand what was saving at my current age of 22. Some would say i am a little late, but i am glad now that i have started saving and stop spending.

Before i got into the notion of savings, i was spending like crazy. All my savings over the years turned into naught. I used to think i was trading meaningful and deep life experiences for money, but i could not be more wrong. Many times, i simply splurge because i felt like it. All my expenses combined accounted for loss of $30,000 – $40,000 worth of good savings. This amount includes anything that is not a necessary expense like transportation, food, water and air.

However, my circumstances have changed. I was forced to grow up faster than anyone in the shortest possible time of a few months. My priorities shifted, my reality struck me, my finances were in a mess and my life was in a mess. I went through my spendings, and took on several healthy habits that i would advise anyone to adhere by:

1. I am now saving 50% of all my income, regardless of where they come from (i have big plans for these savings when i graduate)
2. Making good progress on eliminating TAXIS as a transport option (taxis, for a period cost me hundreds per month, the stupidity of youth)
3. Saving heavily on transportation costs
4. Food expenses are also reduced after discovering that cooking might not be the cheapest form of spending on food
5. Entertainment expenses are significantly reduced, heck i haven’t drank a beer in 2 to 3 months
6. Book costs are reduced from making an extra trip down to the library
7. Using credit in a controlled and sensible manner

Some of my habits are pretty crazy. I doubt anyone with strong commitments would be able to save 50% of their income and i might reduce that amount as time goes by but for now, it is sticking. Also, i would recommend anyone who is financially sensible to get insurance. As i begin to get older, i start to believe in insurance more and more, and i believe anyone sensible enough should feel the same as me. What about you? Have you realized the importance of saving?