How to Add Value in Conversations Using the AAA Technique

First off I will say that I am an introvert. I love writing reports and analysing data, but I am not good at communicating with people. I am the sort of person who feels comfortable in front of a computer, not in a meeting.

But I believe strongly in self-improvement, and lately I’ve been trying to fix this weakness, and I have invented the AAA technique, which involves, during conversations, the following:

  • – ask
  • – attack
  • – advocate.

Whenever you are in a conversation, you need to understand it fully, so you need to ask questions. When people talk about something, I run through the following five Ws (and one H):

  • – what
  • – when
  • – where
  • – why
  • – who
  • – how.

For example, taking a simple example, suppose you are a teenager stocking shelves at a grocery store and there has recently been many instances of theft in the store. At a meeting, someone proposes that more surveillance cameras be installed. Rather than just passively listen, run through the questions in your head.

  • – What is he proposing?
  • – When does he plan to get these cameras and install them in the store?
  • – Where does he plan to get these cameras from? Who is the supplier?
  • – Why does he want these cameras installed? Why would he want to install cameras rather than, say, hire security guards?
  • – Who will install these cameras? Who will ensure these cameras are working?
  • – How will these cameras work?

While running through these questions in your head, if there is no obvious answer to the question, then speak up. These Ws are helping you understand proposals better by prompting questions.

The second part of conversation involves attacking ideas. This is important, I think, because ideas need to be stress tested to ensure they are good, and having critical people attacking an idea helps to ensure bad ideas don’t slip through. I have learned in my career over time that being a yes man who passively accepts ideas doesn’t really add any value. People have ideas all the time and they expect you to help them craft the idea by being critical. Attacking half-baked ideas adds value by making the idea better. You identify flaws with the idea, allowing you to focus on solutions to address these flaws.

Attacking doesn’t necessarily mean you must be aggressive and mean. When you attack, you should still be civil and polite. You simply cannot accept an idea straight away. You must be skeptical. You must attempt to find flaws in the idea and politely bring these flaws up.

Going back to the grocery store example, a fellow worker has proposed installation of surveillance cameras in response to recent instances of theft or shoplifting. You should run through your head any flaws in the idea.

  • – How much will these cameras cost? What about ongoing maintenance costs? Do we have enough money? Are there cheaper alternatives?
  • – Are there any privacy laws we may be breaching if we install cameras? What if we capture customers’ private information, e.g. if they open their wallet and we photograph their credit card details? How long can be legally keep the footage before we need to destroy the videos?
  • – What are other grocery stores like us doing? Do they have surveillance cameras? How do they deal with shoplifting?

Finally, advocacy involves trying to push and persuade others to accept your views of how things should be. Especially if there are major flaws in ideas, you need to come to the table with an idea of your own. You cannot just attack an idea and offer no solutions of your own You need to have views on how the world should be run. If you’re going to criticize someone’s proposal to install surveillance cameras, what is your idea?

Why Save Money If You Love Your Job?

Many people tell me that they love their job, so they don’t want to save up any money. They are happy to spend everything they earn.

When I started working, I noticed that many people had this attitude. They said they loved working and they envisaged themselves working for the rest of their lives. With this carefree attitude, they took on mortgages, got married, and had multiple children. They assumed that their salary would be there forever, so they behaved as if this were the case.

Then the organization I worked for announced that, due to the 2009 global financial crisis, there would be job cuts. A spill and fill was performed and about 40% of people lost their jobs, and many of the people who lost jobs had huge mortgage debts and multiple children.

I don’t know what happened to everyone who got fired. Many of them were old, which makes it less likely for them to find another job. Some were able to get other jobs, but they mainly just grabbed onto whatever they could find because they were desperate for some income to feed their children and pay for whatever obligations they had.

I remember when I started working. I was enthusiastic and passionate. I had just finished university and was entering the workforce for the first time. I thought I would work forever as well.

After the restructure, I realized then that even thought I started off loving my job, the downturn in the economy forced management to fire people, and the working environment became toxic as a result.

Things change, and you must be prepared for change.

Your circumstances today will not necessarily apply tomorrow. The only constant is change.

This is why having money saved up is important. If you have enough money saved up, you can live off your investments forever and never need to worry about working. This is why you must live off dividends.

It was after this painful incident that I realized that I needed to save up and invest. About six years later, I am still working at this organization, and the horrors of the past have been forgotten, and people are once again telling me that everything is fine, the economy is great, that I should get a mortgage, buy a sports car, etc.

But I know from experience that things can change quickly.

This is why you must save money. You must be prepared for change.

Google vs Friends – Will Technology Destroy Human Interaction?

When you travel via train, everyone is on their smartphones. Everyone is connected and sedated by technology. You see it everywhere you go. Everyone is addicted to the internet.

At first, I thought this is would be a problem because people would be engrossed by what they see on the internet that they would ignore human interaction.

Over time, I have realized that the reason why so many people are investing their attention into the internet rather than in other people is simply because the internet is better than people.

Think about it. We have finite attention. We cannot look at everything, so we need to be selective about what we see. We all have different tastes and preferences. Because we have finite attention, we need to focus on what gives us the most happiness. Quite simply, the internet is better at giving us what we want compared to people. When I go to YouTube, I can bring up videos instantly that fit my interests, such as finance, dividend investing, veganism, and technology, but if I were to have coffee or dinner with a friend, they will probably have other interests.

Even if you do manage to find a friend who you can talk to who shares the same interest as you, the problem is that people can change. One minute you’re happy with them and then suddenly they become really negative people who complain about everything, and so then you need to spend less time with them because that negativity may adversely affect you. However, social situations are not as easy as the internet. On the internet, say, on the YouTube app, if there is a video you don’t like, there is a “not interested” button that you can press. YouTube then reconfigures the videos it recommends based on its best estimate of your interests.

If there is a video on the YouTube app you don’t like, select “not interested” and YouTube will show you fewer videos like these.

If there is someone on YouTube who makes videos that you don’t like, you can easily unsubscribe or block them. Doing something similar in a social situation is tricky, especially if these are work colleagues or family. The internet gives you what you want and it quickly adjusts if it makes a mistake. You have the power.

Socializing with people is also expensive. It differs everywhere you go, but lunch will cost you about A$15 (US$12) per person and dinner will cost you about A$25 (US$19) per person. The internet is much cheaper, practically free.

Basically, the internet, thanks mainly to innovate tech firms like Google (and even Facebook), know what you want better than your friends, and they are able to give you what you want or what you may need more efficiently than your friends can.

In this competitive capitalist world, there is a fight for our attention, and friends have competed with technology and they are starting to lose. Humans simply don’t know how to serve other humans as well as technology does.

My Views on Google Pixel, Google Home, and Google Daydream

Google recently announced it would unveil a series of new hardware devices. For those who are unaware of what has happened, Google unveiled two new smartphones called the Google Pixel and Google Pixel XL. They also unveiled Google Home, which, based on videos, seems like a device that looks like a lava lamp that you put in your house and talk to. Then there is Google Daydream VR, which is a virtual reality headset to rival e.g. Oculus, HTC Vive, etc.

Google Pixel smartphones

While these products are not out yet, all in all, I must say that I am very underwhelmed. The Google Pixel phones are quite bland, boring, and expensive, and it’s disappointing that Google is discontinuing their Nexus program.

I currently have a Google Nexus 5 (2013), which was a brilliant phone back in 2013 because it contained high-end specifications for only A$400 (US$300). However, just looking at the JB Hi Fi website, it is clear that Pixel phones in Australia will cost more than A$1000 (US$760).


Being used to paying A$400 for a flagship phone to all of a sudden paying over A$1000 is going to get some getting used to for Nexus fans.

Of course, the Google Pixel phones will be well equipped. Supposedly the Google Pixel phone has the best camera in the world. They will also be equipped with the latest Qualcomm Snapdragon 821 processor as well as 4 GB of RAM, which should make it quite fast. Whether it will be faster than the current fastest phone on the market (the Galaxy Note 7) is yet to be determined. Nevertheless, the Snapdragon 821 is the latest and greater mobile processor from Qualcomm, and based on my history of buying smartphones, Qualcomm make excellent processors, so I’m confident the Pixel phones will be fast.

But this is not what worried me. My old Nexus 5 (2013) still uses an old Snapdragon 800 processor and is still quite fast, more than enough for my needs. Speed on a smartphone is not that important unless you play lots of games, and if you’re playing lots of games, why play it on a smartphone? You’re better of getting something that is actually meant for playing games, such as a proper gaming computer or a Playstation 4.

Of course, a feature that I love about the Nexus 5 (2013) is that it has wireless charging. Unfortunately, the Nexus 5P (2016) and even the Google Pixel phones do not have wireless charging anymore, which is a huge bummer because I have set up wireless charging pads all over my work and home, and I don’t want to go back to plugging wires into my phone. Interestingly, the only brand that has wireless charging now is Samsung.

Another unfortunate fact about the Pixel phone is that it is not waterproof and it does not have expandable storage. If you’re going to pay big money for a phone, you want it to have features that match with expensive phones, and currently the only brands that have both waterproofing and expandable storage on their flagship phones are Sony and Samsung.

Although the camera is supposedly great on the Pixel, I personally don’t take too many photos, and I am not too concerned about camera quality. If I go on a holiday, I will wear my Narrative Clip 2, which means I don’t need to bother with taking photos while on holidays. I find going on holidays just to take photos quite strange and fake. I remember going to Asia some years ago and I was taking photos of an ancient temple because I wanted to create memories of my trip. But then I realized that there was no need to take these photos because, a simple Google image search can bring up thousands of these types of photos. Furthermore, if you take photos of other people, they behave differently. They pose and act fake. Many people don’t like to have their photos taken. This is why it’s better to just get a wearable camera to take photos automatically or, once technology advances enough, hopefully drone will fly around and take photos for us.

Another downside of the Google Pixel phones is that they actually look a little bit like iPhones, especially the bottom part. Many people say this is good because the Apple symbols is a status symbol that people want to show off to others, but I am certainly not a fan of Apple products. There seems to be no reason to buy them given that they lack features. You are able to get more features for the price if you buy other smartphones, so buying an Apple iPhone therefore just seems stupid. If someone were to use an iPhone and saw the the Apple symbol on their phones, I would actually judge them very unfavorably because they are likely superficial people who only look at brands and don’t actually do any research. People need to keep this in mind if they’re buying a status symbol because they may give off the opposite signal that they intended to give off.

Google Home

Google Home seems even weirder because I just cannot imagine talking to a device. There’s nothing wrong with it. In fact, I often talk to my phone to set reminders while I’m out and about, when it’s usually when I’m alone because talking to your phone just seems like a weird thing to do, and I’d feel quite a bit of shame doing it in a room filled with people. It’s not just the weirdness of talking to a phone but there is also a privacy issue as well. Do you really want other people to know what kind of searches you’re going? Suppose you’re doing a search for cures to erectile dysfunction or testosterone boosters.

Google Home looks like it’s taking the same concept and applying it to the home. In the home, especially if you live alone, there is less shame.

The video above of Google Home being demoed in a home looks like a scene from a dystopian movie.

Google Daydream VR

Google Daydream VR actually looks like a device that I may actually buy. Firstly, it’s really cheap coming in at US$79 (A$104). The big value add that Daydream provides, I think, is that you can use it while lying down in bed.

At work, you’re on your computer all day looking at a screen. When you’re on the train to an from work, you’re reading something on your phone. When you’re at home, you’re watching your TV. With many of these devices, especially laptops and smartphones, there are major posture issues. When using your smartphone, you’re hunched over.

Google Daydream VR, I think, will allow you to lie down on your bed and watch, say, Netflix or YouTube. Furthermore, because you wrap it around your eyes, you are not distracted by what is happening around you. Furthermore, there is privacy because other people around you don’t know what you are looking at.


Property vs Margin Loan vs Internally Geared Funds

I have mentioned in a previous post that I don’t like to buy a house. Instead, from experience, I find that it’s best to invest in ETFs. The reason is because ETFs give you flexibility to invest in what you want. If you buy a house as an investment, you are leveraging into one house, and although the general property market may behave one way it’s very hard to know how your house will perform individually. For example, the house price indexes from the Australian Bureau of Statistics averages out results for a number of different houses. If, say, you have a house in Sydney and Sydney house prices went up 5% this does not mean your house specifically went up 5% but that houses in general in Sydney went up 5%.

Furthermore, if you buy a house to live in, you have nothing but debt (unless you buy a house outright without a mortgage, but this is rare). You have a mortgage that you must pay monthly and any benefit from the investment is in the form of capital gains, which you cannot access until you sell the house. You cannot see capital gains, and you cannot access capital gains. Capital gains are invisible and, if there is suddenly a recession, all your capital gain that may have taken you decades to accumulate may disappear in a matter of weeks or months.

Capital gains do not provide the same sort of comfort that cold hard cash income provides. If you have a house, this problem can easily be fixed if you turn your house into an investment property and rent it out, but even if you had an investment property, the performance of an investment property just doesn’t compare to ETFs, in my opinion. Unless you really know how to pick good property, residential property in general has low yields, and after you pay property management fees, taxes, house repair and maintenance, etc, you don’t end up with much, especially not when compared to ETFs that have been engineered to seek out and pay high dividends.

Property is not a good investment. From my experience with residential property, once you buy a property, suddenly everyone wants money from you and everyone sends in their bills. Once you buy property, you need to pay bank fees, mortgage interest, lawyer fees (for conveyancing), real estate agent commissions, taxes (stamp duty and land tax), and property manager fees. Once something goes wrong in your house (e.g. the shower breaks) you need to get a repairman in to fix it, and he send you a bill as well.

Investing in high-dividend paying ETFs is completely different. You use an online broker (e.g. CommSec) to buy ETFs listed on a stock exchange, and then you sit back and watch money flow into your bank account. That’s it.

What about leverage?

One of the benefits of property is leverage. Because you borrow money from the bank, you have more assets exposed to the market, which means potentially higher gains. However, leverage works both ways. If the asset price does not go up enough to compensate you for the interest expense, you will lose money, and when you are leveraged, you will lose a lot of money.

That being said, leverage is a legitimate strategy if you want to accept higher risk to get higher returns. You are effectively moving up the efficient frontier.

Leverage is easy to achieve using ETFs. There are two options: (1) invest in leveraged ETF (e.g. the Betashares Gear Australian Equity Fund (ASX: GEAR)) or (2) apply for a margin loan to borrow money from the bank to buy stocks or ETFs.

Based on the modelling I have done, all these options (property, margin loan, and leveraged ETFs) have somewhat similar returns, so it doesn’t matter which you do so long as you feel comfortable with the risk you are taking. However, that being said, I think that out of these three choices, property is the worst because once you sign up to borrow money from the bank, you have a monthly mortgage that you must pay. You basically have a noose around your neck. If you don’t pay it, the bank will sell your house, and you will incur substantial transaction costs. When you have a margin loan, many people will try to scare you about the dreaded so-called “margin call” but this I think is overblown. The bank will only step in to induce a margin call when your debt levels are high relative to the value of your assets (they look at your loan-to-value ratio or LVR). They do this because, if you have a high LVR, the risk you are taking is too high, and the bank will get worried that the size of your debt will be too high relative to the size of your assets, which means you may owe the bank money that you may not pay. As part of their risk management, banks will monitor your LVR and intervene to lower your LVR if you raise it too much. This applies not only with stocks but also with property.

Banks will intervene to lower your LVR if you have not been paying your mortgage. If you miss a mortgage payment or two, the bank may allow it because your LVR will not be too high, but if it goes on for too long and your debt levels start to rise too much, the bank will intervene to sell your property. Therefore, regardless of whether you have a property or a margin loan, the bank will still intervene if the LVR is too high. So long as you keep watch of your LVR and make sure it is not too high, you will be fine.

When managing your LVR, the problem with property is that you have zero control over your portfolio. Once you buy your house, there’s littel you can do to affect the volatility of the asset. You have zero control. However, if you own a portfolio of shares or ETFs, you can control how much volatility there is in the portfolio by buying specific listed assets. Managing volatility is important to managing your LVR because volatility affects the value of the portfolio, which of course impacts the denominator in the LVR. If you use a margin loan to leverage, say, into the Chinese stock market (e.g. the iShares China Large-Cap ETF (ASX: IZZ)) then the risk you face (and therefore the probability of a margin call) will be much higher than if, say, you invest in stable assets such as global infrastructure (e.g. via the AMP Capital Global Infrastructure Securities Fund (ASX: GLIN)).

There is a much easier way of leveraging that involves zero risk of a margin call, and this is by investing in internally geared funds. With internally geared funds, you don’t borrow. Rather, you take your money and invest it in the fund. The fund manager collects your money (as well as money from other investors) and uses this to borrow money from the bank in order to invest in stocks. Because debt is handled by the fund manager (rather than you yourself), you don’t owe anyone anything ever. Betashares currently offer two listed internally geared ETFs: GEAR, which leverages into Australian stocks; and GGUS, which leverages into US stocks.

According to the Betashares website, the fund is “‘internally geared’, meaning all gearing obligations are met by the Fund, such that there are no possibilities of margin calls for investors.”

Gearing via an internally geared ETF, in my opinion, is the optimal strategy unless you want to borrow money yourself so you can claim the interest expense as a tax deduction. However, that being said, if you borrow money yourself, because you are only one man (or woman), you will typically pay between 4 to 6 per cent at current rates, but if you invest in a leveraged ETF, the fund manager is responsible for borrowing, and the fund manager has access to low institutional interest rates (supposedly around 3%) thanks to its buying power. You are therefore able to gain even greater leverage with internally leveraged ETFs.


I used to be very much against gearing because I strongly believe that debt is slavery, but now I accept that gearing can be a legitimate strategy so long as you have robust downside protection. I believe that no matter what you do (when investing and in life in general), it’s good to take risk because more risk provides greater return, but risk must be managed. It is okay to take risk so long as you have a safety net or a fallback plan if everything goes wrong.