Understand the US debt ceiling

The debt ceiling, also known as the statutory debt limit, is the maximum amount of debt that the United States government is authorized to borrow. The debt ceiling is set by Congress and is separate from the budget process. The government can only borrow money up to the limit set by the debt ceiling.

When the government reaches the debt ceiling, it can no longer borrow money and must either raise the debt ceiling or take other actions to reduce its spending. This can include cutting government programs, reducing spending on entitlements, or increasing taxes.

In recent years, the debt ceiling has become a contentious issue in the United States. In 2011, a dispute over raising the debt ceiling led to a downgrade of the US credit rating and a stock market sell-off. In 2013, another debate over raising the debt ceiling led to a government shutdown.

In 2017, the U.S. Congress suspended the debt ceiling until 2021. That means, until that date, the government has the authority to borrow as much as needed to fund its operations, without a need to raise the debt ceiling.

When the debt ceiling is reached, the U.S. Treasury can use "extraordinary measures" to continue borrowing for a limited period of time. These measures include suspending investments in certain government retirement funds and delaying the issuance of new debt to state and local governments.

However, if the debt ceiling is not raised or the government does not take other actions to reduce spending, the government would be unable to pay its bills, which could lead to a default on its debt obligations and have significant economic consequences.

The debt ceiling is a complex and controversial issue with important implications for the U.S. economy and government finances. It is important for policymakers to consider the long-term implications of raising the debt ceiling and take steps to address the underlying drivers of the national debt.

In conclusion, the debt ceiling is a limit set by the Congress on the amount of debt the US government can borrow. When the government reaches the debt ceiling, it must either raise the limit or take other actions to reduce spending. The issue of raising the debt ceiling has been a contentious one in recent years, as some argue it allows the government to spend recklessly, while others argue it is necessary to fund important programs and services. The debt ceiling has significant economic consequences, and policymakers must consider the long-term implications of raising it and address the underlying drivers of the national debt.

Investment Types and Risk

Investment refers to the act of allocating resources, usually money, with the expectation of generating an income or profit. There are various types of investments, including but not limited to stocks, bonds, real estate, and mutual funds.

One of the most common investments is in the stock market. When an individual or institution buys a stock, they are effectively buying a small piece of ownership in a publicly traded company. The value of the stock is determined by the performance of the company and the overall performance of the stock market. If the company performs well and the market is strong, the stock will increase in value and the investor can sell it at a profit. However, if the company performs poorly or the market is weak, the stock may decrease in value and the investor may lose money.

Another popular investment is in real estate. This can take the form of buying a property to rent out for income, or buying a property with the expectation that its value will increase over time. Real estate investing can be a great way to generate passive income and build wealth over time. However, it also comes with its own set of risks, such as fluctuations in the housing market, property repairs and maintenance, and the potential for default on loans.

Bonds are another type of investment. When an investor buys a bond, they are effectively loaning money to a government or corporation. The bond issuer is then obligated to pay interest to the bondholder and return the principal amount of the loan at maturity. Bonds are considered to be a less risky investment than stocks, but they also typically have a lower potential for return.

Mutual funds are a type of investment that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, and other securities. This allows individual investors to gain exposure to a variety of different assets with a smaller amount of capital. Mutual funds are managed by professional fund managers who make decisions about which securities to buy and sell.

When making investment decisions, it is important to consider one's risk tolerance and investment goals. It is generally recommended to have a diverse portfolio of investments to spread risk and maximize potential returns. It is also important to have a long-term perspective and to not make impulsive decisions based on short-term market fluctuations.

Investing can be a great way to build wealth and secure financial freedom. However, it is important to do your own research, be realistic about potential returns, and not invest more than you can afford to lose. It's also important to consider the time horizon of the investment and the tax implications of the investment in your country.

Overall, investment is a way to put your money to work for you and create long-term financial growth. It requires careful research and planning, as well as a willingness to take on some level of risk. With the right approach, investment can be a powerful tool for achieving financial goals.

Practical Guide to Ang Bao or Red Packets

Ang bao, also known as red envelopes, is a traditional practice that is commonly observed during Chinese New Year and other special occasions in many cultures. The practice involves giving a red envelope that contains money as a symbol of good luck and fortune for the upcoming year. The money inside the red envelope is believed to bring blessings and prosperity for the recipient.

During Chinese New Year, it is a common practice for adults to give red envelopes to children, or for older people to give red envelopes to younger people. The practice is also observed during weddings, where guests are expected to give red envelopes as a form of gift for the newlyweds. This tradition is still widely practiced in Singapore and other parts of Asia today.

The practice of giving red envelopes is rooted in Chinese culture and tradition. The color red is considered auspicious and is believed to ward off evil spirits and bring good luck. The money inside the red envelope is also believed to bring blessings and prosperity for the recipient. This is why it is common for red envelopes to be given during special occasions such as Chinese New Year and weddings.

The amount of money to be given in an ang bao can vary depending on personal preference and the relationship with the recipient. It is generally believed that the money inside the red envelope should be in denominations of an even number, as odd numbers are associated with funerals. Some people may choose to give amounts such as $8, $88, or $888, as the number 8 is considered lucky in Chinese culture because it sounds similar to the word for "prosper" or "wealth." The amount can range from a small token of $2-$5 to larger sums such as $50-$100.

In Singapore, it is common for the ang bao rate to be $50 - $100 for weddings. However, it can range from $20 - $500 or more. Some people may choose to give an amount based on multiples of $18, $28, $38 or $88, as these numbers are considered auspicious in Chinese culture. The ang bao rate is not set in stone, and the most important thing is to give what you can afford.

It is important to note that the practice of giving ang bao is not limited to Chinese culture. Many other cultures also have their own versions of red envelopes and gift-giving traditions. For example, in Vietnam, it is common to give red envelopes filled with money during Tet, the Vietnamese New Year. In Korea, it is common to give cash in a white envelope during weddings or other special occasions.

In conclusion, the practice of giving ang bao is a tradition that has been passed down through generations in many cultures. It is a symbol of good luck and fortune, and is a way to pass on blessings and prosperity to the recipient. It is a practice that is still widely observed today, and is a way to continue to keep the tradition alive. While the amount given in an ang bao may vary depending on personal preference, the most important thing is the thought and sentiment behind it.

Luxury - Gulfstream V

The Gulfstream V is more than just a jet, it's a symbol of success and luxury. This long-range, large-cabin, ultra-long-range business jet produced by Gulfstream Aerospace is the ride of choice for the who's who of the business world. From tech moguls to media tycoons, the Gulfstream V is the ultimate status symbol for the elite.

The spacious cabin of the Gulfstream V can comfortably accommodate up to 19 passengers, and it's equipped with all the bells and whistles one could want. From comfortable seating, a full galley, and a private lavatory to advanced technology such as high-speed internet, satellite communications, and an entertainment system, the Gulfstream V leaves no stone unturned in providing the ultimate flying experience.

Powering this beauty are two Rolls-Royce BR700-710A2-20 engines, ensuring exceptional performance and reliability. The aircraft also boasts advanced navigation and avionics systems, including a full-color weather radar, a traffic collision avoidance system, and a head-up display.

But what truly sets the Gulfstream V apart is its incredible range capabilities. With a range of up to 6,500 nautical miles, it can fly nonstop from New York to Tokyo or London to Sydney, making it a favorite among the jet-setting business elite. It's no surprise that the likes of Mark Zuckerberg, Bill Gates, and Oprah Winfrey are among the proud owners of this coveted jet.

Safety is also a top priority for the Gulfstream V, equipped with features such as an emergency descent system, a ground proximity warning system, and a traffic collision avoidance system.

The Gulfstream V is more than just a mode of transportation; it's a statement of success and luxury. From the boardroom to the runway, the Gulfstream V is the ultimate symbol of success for the elite.

Lessons from Atomic Habits

"Atomic Habits" is a well-written and well-researched book that provides practical and actionable advice for building and maintaining good habits. The author, James Clear, presents the concepts in an easy-to-understand and relatable way. The book is filled with real-life examples and case studies that illustrate the principles outlined in the book.

One of the book's strengths is its emphasis on the power of small, incremental changes in achieving big results. Clear argues that small, atomic habits are more manageable and less daunting than big, sweeping changes. By focusing on small habits, readers can gradually improve their lives without feeling overwhelmed.

The book also provides a comprehensive system for building and maintaining good habits. Clear lays out a four-step process for creating new habits and breaking old ones: cue, craving, response, and reward. This system is easy to understand and provides a clear roadmap for readers to follow.

Clear also offers practical tips and strategies for making habits more attractive, such as using rewards and making habits easy to start. This is a key point, as it's easier to stick to habits when they are enjoyable or rewarding, and that makes the book more actionable

One of the book's limitations is that it doesn't delve deeply into the psychological and neuroscience behind habits. While the book provides a lot of practical advice, it doesn't delve into the underlying science of why habits form and how they can be changed.

In conclusion, "Atomic Habits" is a valuable resource for anyone looking to build and maintain good habits. The book is well-written, easy to understand, and provides a comprehensive system for creating and breaking habits. While it doesn't delve deeply into the science behind habits, it offers a lot of practical advice and strategies for making changes in your life.

Lessons from Richest Man in Babylon

"The Richest Man in Babylon" is a collection of short stories written by George S. Clason. The stories are set in ancient Babylon and are told in a parable-like format. They are designed to teach readers about the principles of personal finance and wealth-building. The titular character, Arkad, is considered to be the richest man in Babylon and is held up as a model of financial success.

One of the key messages in "The Richest Man in Babylon" is the importance of saving and investing. Arkad learned early in his life that "a part of all he earned was his to keep." He saved one-tenth of his earnings and invested it wisely, allowing his wealth to grow over time. This message is still relevant today, as many people struggle with saving and investing for the future. By setting aside a portion of their income and investing it wisely, people can build wealth over time and achieve financial freedom.

Another important principle in "The Richest Man in Babylon" is the importance of living below one's means. Arkad was able to accumulate wealth because he lived a simple and frugal lifestyle. He avoided unnecessary expenses and focused on building his wealth, rather than spending it on frivolous things. This is an important lesson for people today, as the culture of consumerism often leads to people spending beyond their means and getting into debt. By living below one's means, people can save more money and invest it for the future.

The book also emphasizes the importance of education when it comes to money and finance. Arkad was not born into wealth, but he was able to acquire it through hard work and learning about money and investing. He sought out the advice of wise men who had already achieved financial success and applied their wisdom to his own life. This is a valuable message for readers, as many people are not taught about personal finance in school. By seeking out knowledge and taking the time to learn about money and investing, people can empower themselves to achieve financial success.

Finally, the book encourages readers to take action towards achieving their financial goals. Arkad did not just sit around and wish for wealth, he took action and worked hard to achieve it. The book encourages readers to set financial goals and take the necessary steps to reach them. This includes creating a budget, saving and investing money, and seeking out education and advice from those who have already achieved financial success.

In conclusion, "The Richest Man in Babylon" is a timeless classic that teaches valuable lessons about personal finance and wealth-building. The book's messages of saving, investing, living below one's means, and education are just as relevant today as they were when the book was first written. By following the principles outlined in the book, readers can empower themselves to achieve financial success and build the life they desire.

Singapore Savings Bond - November 2022

Applied for another 10k of Singapore Savings Bond.  The 3.47% yield was just too tempting to ignore.  What other instrument can give this yield over 10 years?  

Most other products like fixed deposit probably cannot compare with the yield and liquidity of the SSB.

Assuming one has 200k in SSB, you can expect around 6-7k in interest income every year based on a yield of 3-3.5%.

That is a reasonable sum for passive income paid out twice yearly.  And it is CAPITAL GUARANTEED.