Globalisation

A simple Singaporean's perspective...

We used to compete with our sisters or brothers for mom's attention. We used to compete with our fellow classmates for the top positions in class ranking, school rankings. We compete in work place for promotions. We compete for the best airport, the best airline, the busiest port... . Singaporeans are used to competitions. Life was simple. Somehow, we live to compete.

Things started to change. In school, we started to hear parents complaining foreign talents grabbing the top positions. Lower value adding jobs began to disappear, and reappear in countries like India, China, Vietnam etc. Higher value added jobs remain, but transformed into a MNC, multi-national community. Then, the definition for lower or higher value adding keeps shifting. Yesterday's high value can be today's low value, and the job disappear as well. Welcome to the era of globalisation.

Scholars, economists, ministers, world leaders might go to great length to describe and define globalisation, but to the man in the street, Jalan Singapura, globalisation means transformation from job security and life long career to job securing and life long learning.

In fact, this is nothing new. Humans, civilised and sophisticated, can be self governed by moral values and religious teachings. They are also subjected to countless rules of law. Mother nature scratches her head and just made ONE simple rule for all living organisms on this planet - the fittest shall survive.

Hence to survive, we found ourselves constantly struggling to keep ahead; constantly upgrading ourselves; constantly maintaining our relevance to this world, just to define our existence. However, we seemed to abuse this constant struggle to survive and got carried away. One moment we hear, "I'll be happy if I can become the manager" or "I'll be happy if I can earn $10,000 a month", the next moment, on achieving the goal, we hear "I want to be GM, or "I want $20K"... Somehow, people don't like to enjoy the fruit of the labour, they prefer to enjoy the labour. No wonder Singaporean's ranking in satisfaction with life index was so low. We found ourselves in the competition trap.

We started out in the workplace being young and inexpensive, staying competitive aren't difficult. When you are old and expensive, fighting to define your existence becomes an uphill task. Can we get out of this competition trap, another variant of the rat race? Of course we can. There may be more ways, but I found two worth considering, starting a business or investing¹. Weighing the returns, risk and consequences of failing, it seems more feasible to invest than to start a business.

Starting a business requires an opportunity cost of quitting a salaried job. Success in business means unbounded returns and successful stories on newspapers or documentaries of exclusive interviews. Unsuccessful business ventures means bankruptcy and ... filling up a job application form, checking the box "Have you been or are you under any financial situation/embarrassment i.e.... an undischarged bankrupt..." Investing on other hand, does not require one to quit the job. Success in investment means financial freedom and passive income. Unsuccessful investment just means "get back to work". In fact, the fruits of cautious, non-speculative investment takes time (years) to form and ripen.

In conclusion, we are at our most competitive state when we are young. We are inexpensive, we have the passion, the energy, the brain juice, the ideas and to compete aggressively in this dog eat dog world. Our value generating per dollar is high. But when we are old, in our 40's, we are expensive.We can no longer sustain the level of passion, ideas etc. Our value generating per dollar deteriorates rapidly. Fortunately by then, our investment should be mature enough to bear fruits. We can exit gracefully from this rat race and let the young take our place.

---

1. Investing here differs from gambling. An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative. (Quoted from the Intelligent Investor, Benjamin Graham). Investing treated as such becomes a self-driven savings plan whose risk can be significantly mitigated by adequate margin of safety and diversification.

---

Image sources (from the top):
Figure 1: Big fish eat small fish (http://www.snweb.com/gb/gnd/2003/0224/w0224003.htm)
Figure 2: Rat race (http://risingtide.org.uk/book/print/97)
Figure 3: Dog eat dog world (http://www.fotosearch.com/BCD121/gpfb11/)