Womanizing - things to avoid to preserve your wealth

This post is about women and money. It is written from the perspective of a man and is not relevant to women readers.

I do not want to approach this topic of womanizing as a moralist because I am not qualified to do so. I cannot guarantee to behave like a gentleman should a stunning temptress throws herself freely onto my lap. Rather, I would like to approach this topic from the financial angle.

Womanizing is extremely costly to a married man. Depending on the laws of the country, the woman who sues for divorce can grab half the man's assets plus a chunk of his future income as alimony. The richer the man, the more expensive it is. This is the price you pay to your wife for womanizing.

Even if the wife does not discover your philandering, you still have to pay for the most expensive pets a man can ever keep - mistresses. Mistresses cost much more than a car in Singapore. It is easy to give in to them. It is sad fact of life that men spend more on their mistresses than on their wives. They are more willing to buy expensive jeweleries to please their mistresses than their wives. This is unfair to the wife who made sacrifices to the family for bringing up the children and taking care of the old folks. This is irrational to the pocketbook because if the jewelry had been spent on the wife, it could at least be pawned when the family falls into hardship.

The expensive pets can quickly turn into even more expensive pests when the man tries to disown them. Men, especially men of status, are subjected to blackmail from their mistresses when they fall out. This can be a bottomless pit for your pocket.

The cost of womanizing drops exponentially for bachelors. For men who suffers from sex addiction, it is much cheaper to indulge themselves as swinging bachelors than as cheating husbands. Tigerwoods who reportedly has a sex addiction problem has to pay USD750 million to settle his divorce. For that price, he can hire a high-class prostitute every night to indulge his wildest sexual fantasies till the day his machinery wears off.

When a bachelor womanizes, he might even be respected among his circle of men friends for his conquests. When a married man womanizes, he will be condemned universally. It is a pity so many prominent public figures who could have gone on to do more social good have been destroyed by such scandals.

While the cost of womanizing for bachelors is lower, it is nevertheless an expensive lifestyle to maintain and should be discouraged. The optimal financial scenario for your romance life is to marry the first woman you kiss. Money spent on girlfriends who do not become your wife offers zero returns. If you change girlfriends several times, you have to write off a substantial sum of money spent on useless relationships. It can be worse than useless as former lovers can become sworn enemies if the fall-out is not handled properly. Having too many girlfriends before marriage can be an emotional baggage for the marriage. I would not advise my sister to marry a man with a history of womanizing. Few fathers would want such a man for their daughters unless they are betting on a lucrative divorce settlements.

The most money-saving outcome is to have your first girlfriend become your wife. However, it is better not to marry at all than to marry the wrong one because of the huge cost of getting it wrong.

When my son grows up and seeks advice on such matters, this is what I would tell him;

Take your relationships seriously. Enter into one only if the woman is of marriage material. After marriage, keep your eyes to your wife exclusively. Roving eyes for a married man are simply not affordable, even for the rich.

As a father, I hope to set a living example for my son to follow. One should not womanize out of love for the wife and money. Should one womanize, one runs the risk of losing both wife and money. What happiness is there left?

Smoking - Things to avoid to preserve your wealth

I have never smoked a single cigarette in my life ever. The purpose of this post is not to talk down to smokers like a parent lecturing his child on why smoking is bad for you. I am not qualified to do that. On an intellectual level, which smoker does not know smoking kills and is harmful to the family? I would like to list down the reasons why I avoid cigarettes the way I avoid the casino with a ten-foot pole.

- Smoking is particularly injurious to your pocket in Singapore.  

Like cars, Singapore is one of the most expensive place to buy cigarettes. Cigarette prices range between SGD8 to SGD15. I am not aware of other countries which sell cigarettes more expensive than Singapore. Smoking is a very expensive indulgence in Singapore.

- Easy target to be picked on by government to raise tax revenue

Smokers are the easiest target group to be picked on by the government to raise tax revenue. It is politically acceptable because most people are non-smokers and they are more than happy to see cigarette prices go up to discourage smokers from polluting the air. To appease the smoker, the government can offer the political viable reason that it is raising the levy for the good of the smokers themselves to stop them from harming themselves and their family.

All governments love to implement policies that can make money off the people while at the same time be seen as doing something good for the people.

Governments need not fear tax revenue from cigarettes will drop drastically due to price increases. In economist terms, cigarettes are price inelastic. This means that demand for cigarettes will hardly change despite price increases. Any product of an addictive nature enjoy the price-inelastic characteristic. A wonderful business will sell products with this kind of characteristic.

- More expensive insurance premium

Smokers have to pay more expensive premiums for their health insurance policies to compensate the insurer for the increased health risk they are undertaking. Smokers can lie to the insurer but they face the risk of being denied claims later. It is not worth the risk. Why risk buying an umbrella that cannot open when it starts raining?

- Increased risk of higher medical bill

Doctors can be highly damaging to your pocket. Unexpected medical problems is a commonly cited reason for middle-class families to slip into poverty. Smokers put themselves and their families (if they are breadwinners) at higher risk of slipping into poverty house.

In Singapore, the poor complains that it is better for them to die than to fall sick. While doctors can save you from a heart attack, their bills can send you another round of heart attack. Smoking brings you one step closer to the doctor. A cigarette a day ensures the doctor's pay (at the smoker's expense).

- Loss of health which impact earnings

Our greatest asset, as able-bodied people, is our ability to earning a living. A failing health will take this asset away. As advertised on every cigarette pack, smoking kills and harms your health. Otherwise, why would insurer charge the extra premium?

- Harmful to pregnant women and kids

Smoking is harmful to pregnant women and raises the chance of having babies with defects. Inhalation of smoke is also bad for the brain development of growing infants/kids. If you want to depend on your children to take care of you in old age, you have to ensure they grow up in a healthy environment.

- Non-smoking bosses do not like smokers

Smokers take breaks during work to smoke. Bosses frown upon the lost productivity from smokers although most keep quiet about it. Some smokers claim smoking helps them concentrate better and aids their memory. Don't say this to your non-smoking bosses. They will probably take this as some kind of bullshit. It is hard to quantify how career prospects are affected when appraised by a non-smoking boss.

- Smokers are not welcomed by non-smokers
Non-smokers do not like smokers who smoke in front of them. They are just being polite when they say ok to a smoker who asks if it is ok to smoke. My wife has made it clear to me that she would not marry me if I were a smoker. That would be a tremendous, unmeasurable loss personally.

Smoking, like the consumption of alcohol and other harmful addictive chemicals, is like spending hard-earned money to harm myself and my family. Therefore, it is not rational to smoke.

Gambling - Things you must avoid to preserve your wealth

I hate to write a blog post using someone's misery as a starting point. However, I think the case of the Singaporean businessman who lost SGD26 million in 3 days at RWS casino can be converted into a good social cause. His predicament can serve as a useful lesson and reminder to Singaporeans on the danger of gambling. Dear Sir, your misery will not be in vain if this is of any consolation to you. I am sorry.

A businessman without proper risk management is subjected to high risk of failure when bad luck strikes. The gambler was a successful businessman who built up and grew his company over a few decades. So, he probably is armed with the proper risk management concepts. Had he applied his business training to gambling, he would not have sustained the heavy losses. This tells us something about the nature of gambling. There is something about human nature and our basic instincts that drive us to self-destruction once gambling become an addiction. An intelligent well-trained mind is no protection against this vice.

I have stepped into a casino only once and am no authority on it. Read on if you are still interested.

In all the games, the casino always has a winning edge. This is not surprising, otherwise the more visitors the casino receive, the more money it will lose. Although the odds of losing is higher for the gamblers, it does not mean that the gamblers will surely lose on every visit. However, every gambler must surely lose eventually if they play long enough with the odds against them. The mathematical law of large numbers guarantees that.

This is why the casinos intentionally set their house edge low. The purpose of the low house edge is to offer gamblers some hope of winning, thereby enticing them to play more and lose. If the house edge is too high, the gamblers will simply walk away or play less. Then, the law of large numbers cannot work its magic for the casino. You have to let the gamblers win sometimes to keep coming back. Mathematics ensures that gamblers will eventually lose with 100% certainty as long as they keep coming back.

The SGD100 tax that deters Singaporeans from visiting the casinos actually work against them once they are inside the casino. Once you pay SGD100, you will be tempted to stay longer to fully utilize that SGD100. The longer you stay, the more you play, the surer you will lose. The law of large numbers guarantees your loss.

Being a retail investor, I have given some thought to sizing one's bet. When your winnings odds are high, you bet big. When your winning odds are smaller, you bet smaller. In both cases, your winnings odds must be positive to your favor. If your winnings odds are negative against you, the optimal betting size is zero. If the odds are against you, you don't bet. In other words, you should never ever visit the casino. If you love money, please don't.

Even in the unlikely event that you make money from your casino visits, you will lose out in other ways. Your career prospects will be negatively impacted. No boss feels comfortable with an employee who likes gambling. Your boss will consider you a risk to the company if he learns of your regular visits to the casino. Will you embezzle company funds? Will you receive kickbacks from the suppliers? Even if your job has little contact with money (like my engineering job), your boss will still be worried that your performance will be affected by the distractions - distracted by the worries from the losses or distracted by the easy winnings and the greed to make even more. Either way, productivity suffers. All bosses hate that.

Some people think they can become professional gamblers and beat the casinos, drawing inspiration from the MIT card-counters. Making money in this way is possible in the short-term but not sustainable in the long-term. The casinos can simply bar you from entering once you become a consistent winner. Then, all your long hours of training become wasted. The odds of getting rewarded by working hard at your day job and doing something useful is higher than training hard to become a professional gambler.

If you have to visit the casino, set a pre-determined amount that you will lose. Once this amount is lost, leave the casino. The time to set this amount is before you enter the casino, not after. Once inside, one may be too carried away by the beautiful faces and colorful lights to make proper risk-management decisions. By following this practice, the casino becomes a place of entertainment minus the harmful social effects. At the same time, our fellow countrymen working at the casinos can keep their jobs. Treat the gambling losses as entertainment expenses. If you are lucky, you might even get paid for the entertainment.

As for myself, my personal policy is to avoid the casino totally. Some people think they are disciplined enough never to become addicted. They think they can keep their gambling trips as a source of entertainment only. It is like telling yourself I will try drugs just for the sake of experiencing new things but I will not get addicted to it. In the first place, why take the chance? Is there a meaningful gain in exchange for the risk? Hence, I do not even want to give myself a chance to get tempted by getting near to the casino. If smarter and more successful people like the SGD26m businessman have succumbed to this vice, what more for mere mortals like me?