Finance Smiths

This is going to be a non personal finance post and I’m hoping it doesn’t end up being a rant. But we are starting to lose it with SMRT and we are not even taking the North-South Line, which seems to be taking the brunt of the delays and breakdowns. We take the East-West Line in to work every weekday morning from the East side of Singapore into the city.

We used to drive in to work a few years ago since it was easy to carpool with my mother-in-law and brother-in-law. All of us were working in the city and my mother-in-law had season carparking. However, the road traffic on a weekday morning is terrible and it makes for a difficult drive. And we got to a point where my father-in-law, who is retired from full-time work, had to drive all of us in since we were too tired from work to navigate the heavy traffic.

This worked up to the point until the work schedules of my mother-in-law and brother-in-law started differing from ours significantly. Since it was taking up too much time and effort to coordinate (not economical as well to drive the car into the city twice), my wife and I decided to start taking the train in to work. We have tried taking the bus in to work on weekday mornings before. It may be the cheapest option but takes up the most time because the bus route doesn’t get us into the city directly. And the bus has to go through even worse road traffic conditions because of its route. We also tried taking taxi/Uber/Grab in to work on weekday mornings too. The fares are higher due to increased demand and can rise even further when there are train delays and breakdowns.

Which leaves us with SMRT. What should have been a cost-effective and fast means of transport to get us into the city. We have to admit that we were shocked with the state of SMRT when we first returned to Singapore in 2014. The overcrowding, train delays and breakdowns contributed to our decision to drive into the city. The last time we worked in Singapore before 2014 was as interns in 2008. It was a different world back then when SMRT used to be a lot more reliable and trains were less crowed with few delays and breakdowns.

With this new signalling system installed, SMRT seems to have reached a new low. When testing the new signalling system during peak hours, it causes signalling faults instead of reducing the interval time between trains like it’s supposed to do. The fact that a new system breaks down almost every time you test it goes to show how many fundamental problems it has. And it doesn’t seem to be improving, which worries us even more.

We are fine to be used as guinea pigs if we can see the new signalling system stabilising but this is not the case. This is what it’s like for us every weekday morning. We check the SMRT Twitter feed to see if there is a major train delay or breakdown before we take the bus and make our way to the train station. After all, the SMRT Twitter feed doesn’t announce minor train delays, which can be just as problematic when you are trying to be on time for a 9am meeting.

Even if there is no major train delay or breakdown, as we take the escalator up to the platform, we hope SMRT has got their act together that day. Sometimes, we hear announcements on train delays due to signalling faults. These don’t show up on the SMRT Twitter feed but we know we are screwed the moment we see long queues at the platform doors. We wait in line and look at the train interval times. Anything above 3 mins means we will be in this mess for a while. Yup, it’s 4 mins, sometimes 5 min, which explains a lot. We can look forward to missing trains and squeezing ourselves onboard to be packed like sardines in a small space.

We watch all our time and effort waking up earlier in the morning and taking the bus to the train station evaporate as we miss a few trains. People on the trains don’t like to squeeze to the centre and people waiting for the trains don’t like to squeeze onboard. We don’t blame them. Nobody likes to start their morning in such a manner. But we have no choice if we don’t want to be late for work. So we push ourselves into the trains and sometimes tick off the people that are already packed so tightly against each other.

That’s how we start our morning, the most important part of the day. What kind of mood do you expect us to be in for the rest of the day? And you wonder why Singaporeans are always so pissed off. As we stand in the trains with people’s arms, hands with phones and bags jammed up against our bodies and faces, we start to feel our patience wear thin. Then we start to feel our anger grow. We feel stuck in every way since there’s no viable alternative mode of transport we can take into the city without causing even more inconveniences or paying more money.

SMRT platform staff is telling us loudly (people with their faces pressed against the door that can hear them the most) to move in to the centre. We see posters of SMRT technical staff smiling and working hard asking for us to be patient with them while the trains continue to have delays and breakdowns. Lastly, we remember our Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan complaining about the media over-reporting on train delays and breakdowns. And his assurances that the system should stabilise over time despite having no technical or engineering breakdown. A person with a million dollar annual salary and who probably doesn’t take the train in to work telling us to believe in him.

By the time we get to Raffles Place mrt station, we have anger management issues and feel like punching someone in the face. But it all goes away when we get to work because we have to deal with more important problems and keep our jobs. When the evening comes around, we have lost hope in SMRT and expect the trains to be delayed and breakdown. We feel fortunate and thankful that our train is on time. We even have space to stand in the center and talk to each other about our day. We start wondering whether SMRT is conditioning us for this new environment with their recent change in operating model to “You are lucky if we are on time”. Well done SMRT!

I had an interesting conversation with a friend recently over a lunch gathering during the weekend. It was about all the effort required to manage the multiple high interest bank accounts and associated cash rebate credit cards. Whether it was worth the time monitoring the bank account balances and credit card spending to ensure we maximise the interest earned and cash rebates received.

She gave a good argument on how you should be spending that time and effort more efficiently e.g. trading to earn higher investment income, deriving side hustle income, etc. A case of not seeing the forest for the trees. Which makes sense when you think about the situation she is in. Both her husband and her work while their kids are still young and it takes up so much of their time bringing them up well. This leaves them with a limited attention span to focus on what’s important financially.

And it’s not these high interest bank accounts and cash rebate credit cards that have limited upside since there’s a cap on how much you can earn from them. Let’s not forget she is a decent trader with a track record of earning investment income consistently and has good business ideas that she plans to execute on soon. So their approach is to have 2 banks account and 2 credit cards in total between the husband and her, easy to monitor and manage. As a comparison, we have 10 bank accounts and 10 credit cards in total between my wife and I.

I must admit that I have never thought about the opportunity cost of managing so many bank accounts and credit cards. It just didn’t occur to me that simplification could be a possible way to approach this. However, our personal circumstances are different since we have no kids, no trading ability to generate investment income and no business ideas to execute on. By now, the process of monitoring the bank account balances and credit card spending has become so natural that we just execute the actions without thinking. This is taking into account the initial time and effort needed to set up the entire personal banking system.

That was the argument I floated across to her. In terms of time and effort, the initial setup costs are high but the ongoing maintenance costs are low. Doesn’t she want to optimise her idle spending, emergency and investment cash funds? Another good answer from her. She doesn’t keep excessive spending, emergency and investment cash funds like us since they are usually deployed in the markets for higher returns. She only holds sufficient levels as insurance against job loss but doesn’t see the need to hold beyond that since both of them are still working and drawing high salary income. My wife and I always have a tendency to keep large cash balances in bank accounts. Call it peace of mind, sense of security. But it makes us feel safe. Though it’s not efficient from an investing perspective.

I enjoyed having that conversation very much. It’s not often I get to debate on various financial approaches. The point is not about who’s right and wrong. Everyone has a different strategy. Yes, over time, some may prove more effective than others. But it’s more important to find out what works for you personally. I probably should start attending more talks and seminars to meet like-minded people. The good thing for my wife and I is that we have a close circle of friends that are older than us with kids and more life experience. We are the youngest in that group and continue to learn as much as possible from them.