How Much Money Is Enough? feat. Julian Ng | EZ On The Money #1

Note: The Ezra Zaid Project is proudly produced by a crack team of audiophiles and the best way to enjoy it is to listen to it. This allows for greater nuance and emphasis that sometimes may not translate as well to the written transcripts that are available to download for each episode. It would be best to cross-check the corresponding audio, before quoting us in print.

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Hey there, Ezra here.

So, here’s something I hope will be the start of a longer and wide-ranging discussion... and it’s a conversation about money. 

In a few short years, I’ll be hitting that 40 milestone. And for most of my life, I’ve just somehow found it hard to know where to start with personal finance — questions like am I saving enough, did I invest well and everything else in between. The problems surrounding budgeting and managing finances are pretty common but talking about it frankly and openly, isn’t. 

So, without being too discouraged about it, this is my attempt at taking charge of my own situation: to maybe alleviate some of the anxiety that’s attached to it, that weight and burden that many people — people you and I know — face every day.

So to kick things off I’m speaking to Julian Ng: he’s a friend and former colleague of mine from our time in radio. But beyond that, for some 2 decades, he’s been in the investment banking and fund management industries with the likes of CIMB, J.P. Morgan and Public Mutual. Currently, he serves as co-founder and chief advisor of Akru — that’s Malaysia’s first homegrown robo-advisor company.

And so without further ado, on The Ezra Zaid Project, here is Julian Ng.

(music)

EZRA

Hey, Julian, thanks for being on the show with me. How are you doing? 

JULIAN NG

I'm very good, Ezra, thank you for inviting me, I guess it was...It's been a while since we caught up with each other, so I'm very happy to be speaking with you.

EZRA

So, folks who are listening in, Julian Ng used to be my colleague at BFM, the business station. Ironically, we would not actually cross paths very often because I'd be part of the evening crew. And Julian was tasked with the unenviable job of being in the office in the morning at some time, like five o'clock, six o'clock in the morning - was that right? 

JULIAN NG

Yeah, I sort of did the graveyard shift. It's a totally different time zone. When I left work Ezra, you were  probably just waking up. 

EZRA 

(laughs) 

This was probably the case. And so Julian, it's great to reconnect with you, albeit virtually. And one of the reasons why I wanted to get you on the program was, as you know, I've started this podcast called the Ezra Zaid  project. And the premise of it, at least for me, was to throw myself into specific projects that I've always wanted to do. And this includes some of my creative stuff, but also some of the more tangible things in my life. And one of the things that I wanted to speak to you about was actually to begin this conversation about resetting, or reconfiguring my relationship with money. And I thought you'd be the best person to speak to about this, given your background in investment banking, and you've gone through sort of quite a journey on being involved in and understanding the nuance of finance and wealth management. So, I thought this would be a perfect place to start the conversation. And  what I wanted to do, Julian, if you don't mind, is - I'm always curious about how people think, or began to think about money. 

So I'll give you sort of a reference point on my end, where growing up, I would read, you know, Archie comic books  [where] you know, Archie or Jughead would be selling lemonade, right and they would be working at the chocolate shop, and they'd have these part time jobs. And I was growing up [and] going, can I do that? Is that a meaningful way to earn money[?] So then I start[ed] doing things like recycling, you know, Coca Cola cans, and, I tried doing chores for my mom, and my mom would give me a little bit of money. But then I always wanted to know more. But I did get the sense that around me around my friends, people had different relationships with these kind[s] of tasks. They were like, ‘I don't need to do those tasks, because my parents give me an allowance.’ Or, I had other friends who [were like,] ‘I do more than that, because my parents are [in] the different income bracket and we need all the help that we can get.’ 

So, it's always fascinated me to think about how people began their relationship with money. And [it’s] one of the key figures in my life and [I’m] trying to understand that. And I'm wondering if it's the same for you, or maybe other of our listeners - I feel that that relationship almost begins in your initial surroundings, and most likely [within] your family. And family plays a huge important part in, in distilling habits and [the] best or not necessarily great practices. So just to throw it to you, Julian, do you have any earliest memories of how you sort of began thinking about money and wealth, and seeing how that might have changed over the course of your life? 

JULIAN NG

Yeah, I think I agree with you when you say that different families would have a different relationship with money. And for me, I would say that we didn't come from a very...I didn't come from a very moneyed background. I remember in my childhood, that there was this undertone of anxiousness about money, you know, even though my parents protected me from thinking about that too often. But I was very aware of things, even as a young boy, that money just didn't fall from the sky. And also, I would say that as I grew up, there were different aspects and different nuances about how my relationship with money grew. Because on the one hand, you know, to me was something that was important, and on the other hand, it gave me that desire, you know, to buy stuff. 

(laughing) 

I'm sure this exists with everybody, right? Like we- 

EZRA 

(laughs) 

For sure.

JULIAN NG 

-we want to be in nice surroundings and have  [our] own nice stuff. But also it gave you the idea of freedom, right? The freedom to do what you want to do. And I remember that, from a very young age, I was quite worried about education. Because we needed as with a lot of families today, as well, you need a lot of money to further your education overseas. So at that point in time, this was something that was at the back of my mind constantly. And I must say that I was very lucky to have a sponsor, a benefactor who put me through education in the UK, who paid for everything, and to him, I owe my life. Right? And, and other people helped out as well, my uncles and aunties and of course, my parents, who were very much helping me out to...you know, the typical Chinese family: just to make sure that one of their own gets that degree, that paper and you know, that photo hanging in the living room, with your graduation garb, in the background, you know, that that's typical of a lot of families, I think. 

EZRA

And it also, I guess, paints even more vividly, the notion that it takes an entire village, and to really chip in on this sort of financial aspect, so that one individual gets to fulfill their dreams and their potential. And you mentioned this undertone of anxiousness, right? 

JULIAN NG

Yes.

EZRA

And I felt a version of that, and I can't account whether we we came from similar backgrounds, or not, but what I could relate to was an undertone of anxiousness, because one of the key contrasts that I noticed was that once I started figuring out my family history a little bit, I guess, both of my mom and my dad side? Like, you know, my mom's side, my grandpa, my maternal grandparents, were educators who came from Perak in Kuala Kangsar. And, you know, they went through some really hard times,and really had to sort of grit through education, and opportunities, and scholarships to essentially be teachers, which was a huge step up compared to their parents, right? And I'm looking at my paternal grandparents, and they were from Kelantan and it was really - they were working as farmers and doing sort of odd jobs and stuff. And it was only when I realized the contrast of, within one generation, something changed. Something changed, in the opportunities given to my mom and dad, that gave me this feeling of financial security. But I didn't feel like it was mine. I didn't feel like I owned it, and that I wasn't quite sure where my place was. And that was the source of my anxiety in that, am I able to replicate what I've seen before me, and these key figures-well, key family figures in my life? And I was wondering, what was the basis of your anxiousness? Because it sounds familiar. 

JULIAN NG

Yeah, I think that for you, it sounds like it was a very early-for lack of a better word-of political awareness for you. I had a little bit of that as I approached my teens.  But in the earlier years, you know, it was just worry in its purity. Maybe it wasn't so direct, but in the background, it was just a worry about, hey, where, you know, will we be in trouble? Will we be on the streets if we run out of money, that kind of thing, right? And also, I think that in those days, my family, we had - my parents had four children. So as you can imagine, this would be a financial burden. 

EZRA 

Sure.

JULIAN NG

Which is why family planning is so important now, and which is why demographically, families are getting smaller and smaller. And it is a statistical fact that if you - the smaller your family, or if you have no children, the better off financially you would be. And that is at odds with our, should we say, natural disposition, to have children, to have family, right? So I think when you ask the question of whether you deserve it, I think very much so. Because I would say that your parents worked very hard, and you're at a point where you have to consider - you're at a crossroads, you have to consider the trajectory of not only a career, but what you want to do in your life. I think everybody goes through that at some point in time. And you would come to that, you know, I went through that. And to answer your question, of the kind of consciousness that I had about money, it started with that little nagging worry at the back of my head. And then as I went into my teens, it started developing into a real worry, an existential worry about education. And after that, it was very funny, you know, after I graduated, and came back from the UK. I guess I started demanding things. I started thinking that I was entitled to things just because I held a piece of paper.

EZRA

Right.

JULIAN NG

And I started spending in a crazy way, you know, I used one credit card to pay for another, and just busted my cards, and I literally was spending beyond my means. And that, I would say, sort of molded me in[to] how I thought about money in my later years. You know,  decades later, I realized that, you know, this  behavior - If everybody did what I did, and I'm sure that a lot of people did what I did many times...It's not sustainable, right? And I think that, looking back right now, with the knowledge that I have, it's all about sustainability. And it's all about growth, it's all about what is enough, you know, my idol. You know, my awareness with money came from passive investing. And we can discuss passive investing later. But really, the subtext of passive investing is the unsustainability of growth at all costs, right? If you want to grow yourself to become a billionaire, not everyone can be a billionaire. And you would have to go through a lot of stress to achieve that. Even [becoming] a multimillionaire, you would have to go through a lot of stress to achieve that. So the awareness that comes from money is the realization that actually, perhaps you don't need a lot of money to be happy. You know, you need some money, but actually, you might not need as much money as you think, to be happy. 

EZRA

That's interesting, because, you know, we're going to talk a little bit more about passive investing and what that means to you, and I guess, your understanding of philosophy towards, you know, personal finance and wealth. But one of the things that you mentioned earlier, about that unsustainable way of spending money. It's fascinating, because in those years, I guess for me, it must have been my 20s - it felt like an unaccountable way in which I was doing so because everything was topsy turvy, right? You would earn a particular amount, but you'd spend double that amount. And there were almost no rules. And the rules that I was gathering from was saying, ‘Oh, if my friend is doing it that way, I guess it must be okay.’ Like, that type of education didn't enter my sphere, either from friends or family members, or even sort of books, because it felt like such a difficult area to navigate for something that was so personal. And so therefore, I thought, well, I guess it doesn't apply to me. But as I'm getting older now, I do realize that there are ways to actually cover and customize what actually works for you. And it just requires the right type of support, knowledge, guidance, and the ability to replicate what's working. And so, would you be able to share with me, you know, one of the key moments in which that turn or that pivot happened for you where you said, ‘Okay, I've got to change my behavior now. What do I do? And who can I learn this from?’ Was there that moment for you?

JULIAN NG

Yeah, I think at one point in my time, I literally decided to quit overnight, in my job as a fund manager. I am not sure if that's what you went through to get to where you are right now. But at that point, I think something clicked because there was [a] conflict of purpose in my career, you know? I thought that what I did was unsustainable. The bottom line, in a nutshell, you know, crudely speaking, the job of fund manager, I think is something is...well, I wouldn't say this for all fund managers, but I think for most of the fund managers, their job is to basically pick stocks that are winner[s]. Right? And statistically speaking, it's very hard to, all of the time, find stocks, that would, on average, give you a winning proposition. And this you can prove, statistically, you know. So, given that understanding, I was asking myself, what am I doing here? Because if statistically, if the stats are against me, then am I working my ass off for something that is so unachievable?

EZRA 

I used to... I used to actually have this wonderful imagination, that there is so much of this money and wealth in the world, but I'm only deserving of (indicates) so much. Because maybe that might have been limited to my imagination or my skill set. But I was under this very conservative perspective [of], ‘I'll just take what I can get, because I'm not sure of what my value or what my worth is, and what and how I could change that.’ And so how was I going to change that? You go back to the regular sources: friends and family who are making investments in property. Some of your more intelligent and advanced tech friends are investing in Bitcoin, and you'd love to get in on the trend. But you don't know how. There's all of these, sort of -- wide variety of options. But yet, I do feel that what, perhaps, is missing, is a conversation with myself saying, ‘Well, you don't need to do everything. You just need to do some of the things, really, really well that works for you. And that you can actually understand: the worst feeling that one can make is putting into an investment that they don't understand. And I feel so much of my young adult life, in relationship to money, has been pushed towards that, because everybody tells you that's what you should do. And did you have something similar to that? And how did you overcome that? 

JULIAN NG 

Yeah, I think the short answer to that is definitely yes. I guess if you're looking for it, definitely, you would come across people giving you a lot of unsolicited advice, right? And you gotta figure out whether those advice would be right or wrong. But you know, I'm curious Ezra, because this is something I want to find out from you, and it is something that is quite important. And I hope that you forgive me if it's a little bit too sensitive, but you essentially come from, can I say a political - quite a background of political awareness. And your father is, of course, a towering political figure. You know, there is a political dimension, a policy dimension to this, in the sense that people expect the economy and, by extension, their government to provide, apart from, you know, that  this is the trickle down effects, right, what people are telling you to buy, whether you should buy this stock or that stock or have this or that property strategy, or even cryptocurrency. But even before that, we are directly and indirectly reliant on governments around the world to provide the correct policy so that we can make a living. So I'm just wondering from your side, whether that also crept into your awareness, that, ‘I hope that the future is bright for me that I would have a job to make a living?’

EZRA

Well, I think one of the key areas in which something sort of stuck in my memory was my father was born and raised in Kelantan. And Kelantan, in the 50s and 60s, to a certain extent now, it wasn't sort of the economic powerhouse of the country by any stretch of the imagination. And one of the memories I have is the five ringgit that my grandfather had given to my father at the train station was just not enough. And he, because of his grades and because of the opportunity to apply for scholarships and [to] be eligible [for] that because of government policies of wanting to encourage more Malay folks to to excel and propel - he was one of those beneficiaries. And it's really fascinating because, had he not gotten that leg up and taken the most of those opportunities to continue to study law, [he would not have] continued to develop a private practice that [would] be successful. He shares that memory with me because it reminds me how quickly things have changed. And so my awareness and anxiety comes to this point of, ’That just only happened a generation ago.’ And if I don't get my act together, who's to say? Despite the successes of my family, and my mother and my father, and what they've provided me [and] my siblings, who's to say that with a lack of foresight, and some really bad decisions, that I wouldn't just reverse all of the progress that was made by my family? And that anxiety has driven my work ethic, and has driven my motivations towards wanting to get better at what I do in terms of my professional career. But also, in terms of my financial situation, because there is this notion of, perhaps, my family has done well for them. But does that really relate to me? And I can't just be dependent on what they've done. Because I have my own, I guess, maybe pride, I guess I have my own notions of what it is that I can build for myself, based on what I can bring to the table. 

JULIAN NG

Yeah, so I think it's so nuanced and so complex, what we are talking about here, because it's just beyond, you know, how can I invest properly, right? It is beyond that, it's really going into other realms, like whether we are having the correct economic policy or not. And this is very dangerous, right? If people believe that they can only make it in life based on their ability to play the stock market, I think that is a terrible narrative to live by. In fact, I blame, you know, having been from the financial media, right? I blame a lot of this on the financial media as well, because it seems to ferment this idea that you can actually play the stock market and have a good life after that, right? It's just one step away from the advertisements that you see on your Facebook timeline, selling the idea of, you know, let's let's learn how to invest, like from a financial guru. I think financial media has to be responsible about what kind of editorial that they're reporting on. Because there is-

EZRA 

Julian, just so that, you know, for folks who might not be familiar, what would you say, has been the dominant narrative or story that's been fed to the masses about, ’Here's what you can do to change your life.’ Like, what is the dominant narrative that's been put out there for the past, I don't know, 10, 20 years or so? 

JULIAN NG

So if you...this  doesn't just happen here, right? It's very glamorous to look at CNBC and Bloomberg, TV. And when we come to Malaysia, you pick up the most popular financial newspaper, or you listen to the most famous business radio here, over here, right? They’re telling you that you should pay attention to the minute movements in stock prices in asset prices, as if that would make the difference in your life. I think this is very important for people to realize that when you pick up the newspaper, I mean, we don't have physical paper anymore, but what is, in essence, the front page of the newspaper, and it’s saying to you that the stock market has hit a new high - That probably is pretty far removed from your own fortunes, you know, of, whether you will make it in life. You know, that it might be indirectly [related] to whether you will do well or not, but I think for a lot of people it is very far removed. So the point I'm trying to make is that you really don't have to learn how to play the stock market, you really don't have to care about whether Telekom Malaysia, or Sime Darby goes up by two cents or goes down by seven cents. I mean, that that would not make one iota of difference in your life, right? You really have got to go out there, get a job, or start something so that you get a decent income to put food on the table. And if we're lucky, and I guess many of us are, we get to more than put food on a table and fulfill some of those aspirations, you know, and as aspirational stuff [goes], we get to self actualize. There is that other dimension;it shouldn't be down to you being able to gamble in the stock market to put food on the table. It's kind of like a poker table, you know, Ezra, I mean, poker, to me, is not gambling, right? You can play poker for free online, you just need to download the Zynga app and you go into the poker table. And it's kind of like saying to yourself, I'm going to be the best here, I'm going to be the top player here, and I'm going to take everyone's money. And it's not so easy, because you're on the table: you're just going to be governed by statistics, right. 

EZRA 

And variables that are outside of your control. 

JULIAN NG

Yes, you may be able to study those variables to make yourself smarter than other people on the table. And basically, from a market viewpoint, you are trying to arbitrage away, or you're trying to prise away all those inefficiencies of other players. Like, if you know that this other player is just throwing chips onto the table, then you're gonna have a very good bet against that person, right? But that's not sustainable, because that person is going to wise up and make it harder for you to bet against that person. And if we apply this to a market situation, you know, there are many, many, many smart players, both buyers and sellers in the market that prevent you from winning all the time, right? And this is something that I feel is a problem in society, because people want to be billionaires, people want to start a startup so that they can make tons of money. But you got to realize that you're going against statistical odds, right? At every level, even if you bring that down to a more personal level - in your job, for example, in your classroom, for example, in school, right? How many people in that classroom would be at the top of the game compared to those who are not? So that is a very telling analogy as to, who does well? And who doesn't, right? If you're going to measure life in those terms. But if you're going to measure life, in terms of in that particular classroom, [and] who is happy and who is not, then I guess the view, and the outlook on life changes very drastically. 

EZRA

If I'm just going to throw in another analogy with regards to poker, it's one thing to I guess be good at your neighborhood poker game. But to think that you can bring that type of game or skill into the World Series of Poker in Las Vegas, it is unlikely that you are going to beat those odds. Would that be fair? 

JULIAN NG

Absolutely. Because those players there, are all smart players, they're there for the win, for the kill. And if you analyze the winners of the World series, you know, there isn't one consistent winner. I mean, there are a few players who stand out, maybe they're very lucky, or maybe they're skillful at it. But there is a statistical limitation as to how often you can win, you know. But imagine a person going in there saying to himself, ‘I'm just going in here, paying the fee-’ the buy in, right of 10,000 US dollars, or whatever the amount may be, ‘-just to have fun. And if I went a little bit from here, you know, I am happy.’ Imagine saying that going into the game. How that person would be chastised by the other players, you know, [like]  ‘What are you doing? You know you don't play this game to lose, right?’ And that's the problem with our economic system, I think. Because not everybody can win, right? And our economic system is really about that right now. Especially if you look at the, I guess, the American system. 

EZRA

So Julian, I'm loving what you're sharing here because this feels perfect for me. Because I have no intention of venturing into that realm. And you know, despite working for a business station for nine years, it even clouded my understanding even more so. But here's the thing: there are a lot of really smart financial folks who are comfortable, they're knowledgeable, and they know how to play that realm, which is terrific. But for the vast majority of folks who either, as a result of their income bracket or their education or their opportunities to do so, they don't play in that field. And so then the question is asked,,  ‘What else is there?’ The question is asked, ‘Well, what is there for the rest of us?’ And do you have an inkling as to what that space looks like? 

JULIAN NG

You know, talking about the financial sector, we're talking about the increasing financialization of the economy, right? The economy is used to make stuff to sell. But more and more, if you look at the composition of the economy, it's going to be made up by the activity in the financial sector. And you know how the workers, the employees, in the financial sector make their money? It's not from playing the stock market or not really from buying and selling financial assets. It's really from, from them being paid for what they do, right? You see a lot of these guys from investment banks are driving flashy cars and living in fancy homes, they didn't get that money from playing the stock market, not the primary source anyway, they got that money from their income-from their bonuses, and from doing well in their jobs. And so if we are asking an existential question about what we can do to be financially secure, and to be happy, ultimately, it's really to find something to do in our lives. And hopefully, the government provides an environment where it's easy for us to do that. And it starts right from childhood education, right up to tertiary education, right up to a sort of a buoyant, okay-economy to provide enough jobs to people. 

And that's where your activity should be focused, the high activity footprint, should not be focused on the idea of how I can play around with financial assets to make me rich, or make me secure, financially independent. And this is where passive investing comes in. Because passive investing is just giving you a packaged product. I'm just essentially saying to you that “here is a product, which sort of provides the statistical performance of the global stock markets over the last 20-30 years, it's giving you a certain level of returns per annum. And this level of return is really just having sifted out the best performance in the stock market, right, the people who are innovative, who are leaders in their fields, and who are performing and who are driving economies around the world, I'm giving you this portfolio, and if the past patterns continue into the future, then you will be able to mirror those kind of returns, right, you save a lot of time just putting your money into that kind of portfolio. And with the amount of time that you have on your hands, you can then pursue what you're passionate about, what fulfills you, or even if it doesn't fulfill you, it's going to be a mundane job, that is giving you a lot of money, you know, you can do that you can free yourself of the need to play the stock market. That's passive investing. 

EZRA 

So Julian, I think, you know, one of the key things here, and we'll probably get into this [in] future episodes, but just because you are a proponent of passive investing. And so, for folks who may not be familiar, there's active investing-and you know, I'm probably gonna butcher the definition here-but it's basically what you mentioned, it's playing the stocks  and doing all sorts of day-to-day transactions that sort of really moves the needle with a risk-reward ratio that is probably outside the comfort zone of most folks, but it's a big sector within the financial industry. Would that be a fair definition? 

JULIAN NG

Yep. And to help you understand more, I'm going to give you other examples in which you are just a passive taker of something that's already out there, right? I mean, I love eating chocolate cake, but I'm not going to tell myself to go out there and get the ingredients on how to make chocolate cake because I can buy from the best cake makers out there in the world, right? I mean, I just need to go to ‘Jaslyn Cakes’ or something in Bangsar or Mont Kiara. And she makes fantastic cakes, right? Or, if you're driving a car, you're not going to build a car yourself-that's activeness-but you're just going to buy your favorite car off the market-from an investment analogy viewpoint. If you're a high-risk, high-return profile, you may buy that Ferrari if you have enough money, but if you just want to get from point A to point B, then you would buy a Proton or Honda Civic or Toyota or even get a ‘Grab’, right? That's why the sharing economy today holds so much promise. Because it takes away activity from you, right? You don't even have to drive your car today. ‘Grab’ gets you from point A to point B. There are so many propositions in the transportation value chain, there is even like ‘SOCAR’ and let's say travel, right? I mean, it's amazing the kinds of business model[s], like transportation as a service that they come up for you. You can take a grab, you can have a short term rental, or you can go on a subscription basis to drive a car that you like driving. So people have packaged that for you to give you a level of passivity in one area so that you can be more active in other areas. And for some activities, [it] is actually essential that you're just a passive observer. For example, surgery, you definitely don't want to DIY your own surgery, right? Or flying a plane, you definitely just want to be a passive bystander-

EZRA

Right?

(laughs) 

JULIAN NG

-services that you purchase. 

EZRA

So Julian, I guess, what you're talking about here is that when it comes to the way in which we view or approach passive investing, it doesn't just pertain to the dollars and cents, it actually pertains to other facets of your life. And I think what I'm hearing from you-and correct me if I'm wrong-that an alternative way to look at it, or a more meaningful way to look at it, is having this balance between money, what that is and what that value is, and how to sort of reconcile that and recalibrate that with the needs of your life and perhaps your family. So is that what we're trying to get to; where it becomes cohesive to all of those aspects to each other? 

JULIAN NG

Yeah, absolutely. I think so. Absolutely. I think we've come back one full circle, right, we are going back to asking, what do we really want out of life? What do we want to do, right? And I think that we are also living in a time and epoch where we are kind of lucky. I wouldn't say that this hasn't happened before. But technology is opening up a lot of things to us,  things that we couldn't have done before. And now, more and more, we can do it right now, like high quality education. We talked about my anxieties earlier about education, right now, you can go on to one of those massive online open courses, and you can get actual certification for next to nothing. So we are living in a time, which is both scary and exciting I would say, because of technology. But with the question of “what do I do with money?” We've come back one full circle. Right now we are going back to the point where we are asking ourselves, what do you want to do? You know, what do we want out of life, because [the] money thing is done. You know, the products are doing that for you. And it's very efficient, it's very cheap. 

EZRA

And maybe it's just the product of our times that the opportunities to customize that approach is more available now than it has ever been? More complicated now than it's ever been. And I think there is this clock that is on the back of our heads. That one is about what that balance looks like, especially with traditional notions of what retirement needs, right. Used to be for my parents generation for them to work for the majority of their life, and then begin retirement. But my parents are still working. And it makes me wonder, how challenging is it in these times to still strike this balance that you and I are both championing for. But is it truly attainable? 

JULIAN NG

Yeah, absolutely. Absolutely. I think it really brings all those lines of thinking into focus. I don't know, I think it's both a threat or an opportunity. And I think that you can find your own level of comfort as to what you want out of life. I mean, this might sound very technical, but I did some calculations, and let's say a person can be satisfied with a standard of living of, let's say, 3,000 [ringgit] a month. I'm sure that many people out there would have a more aspirational lifestyle, or, what I say, a more expensive lifestyle and perhaps they would only be satisfied with a living [cost] of, let’s say, 10,000 ringgit a month. And that’s fine, that’s up to you to see how you can fund that kind of lifestyle through the work that you do. But if a person was satisfied with 3,000 ringgit a month, as a kind of inflation-adjusted lifestyle into the future for the rest of their life. Actually you don’t, in the scheme of things, need to accumulate a lot of money to achieve that; that 3,000 ringgit a month for the rest of your life. Having said this, I’m cognizant of the fact that it’s a struggle for a lot of people. But when you actually look the numbers [up], it shouldn’t be something that is impossible to achieve. That number comes down to maybe, depending on your age, a figure of let’s say, half a million ringgit in financial assets. It’s both difficult and easy to achieve half a million. It really depends on where you are. But I’m just saying that it’s not 10 million ringgit or 50 billion ringgit or something like that.

(laughs)

Right? It’s something that’s achievable.

EZRA

And that’s the thing right? If people don’t have a marker in their life that says, “that is achievable”. And for a lot of folks, you always want to encourage them to say “that is really reasonably achievable”. But yet that doubt, because maybe though a lack of awareness or education, they almost rule themselves out immediately. And so then they stick to their existing practices without actually venturing out further.

JULIAN NG

So there are other challenges that are being thrown in right? So yeah, you might say “3,000 is a very basic living because I want to send my kids to private school, overseas, boarding school in London, and I want to eat in a 5-star restaurant once a week, then that might complicate the numbers a little bit more. But even if you throw that in, even if you double that to 6,000 ringgit or 10,000 ringgit a month, that number doesn’t quite approach. That magic number of assets that you need to accumulate, doesn’t quite approach, let’s say, 10 million bucks. So if you have that anxiety in your mind, “Wow, I need to accumulate 10 million bucks before I have a comfortable life,” that is really down to your, I guess, this might sound a little new-age-y, it is down to the contemplation about what you really want out of your life, you need to make adjustments, you need to be able to say to yourself, I don’t need to drive that Ferrari, or I don’t need to buy that particular handbag. I don’t need to buy that stuff. Maybe 3,000-

EZRA

But at the same time, if you wanted to buy that, there are means for you to do so, in a manageable and sustainable way. It’s not binary in that sense what you’re describing. 

JULIAN NG

Absolutely. It’s not a case that I have to go to the poker table, and be the winner of that particular table. Which is a more impossible task... to do. 

EZRA

So, I’m gonna wrap this up Julian, ‘cause I think we’ve come around relatively full circle on where I wanted this conversation to be, which is, again, about you helping me solve my life’s problems obviously. 

(Julian chuckles)

So, just a couple final two questions. What is the best or most worthwhile investment you’ve ever made. And I guess not necessarily a capital investment, it could be your time, or your money, or energy. Something that really gave you a high-return on investment, but towards your life. Does anything of that sort come to mind?

JULIAN NG

Well, I mean, it would be something that is very technical for me, you know, I read John Bogle - [and] through BFM, I actually had a chance to interview John Bogle, about one or two years before he passed away. And that would come as close as possible to me being a fanboy, of anything.

EZRA

And who is John Bogle, and why were you drawn to him and his ideas?

JULIAN NG

So, let me tell you this alright, because this is important, although a little bit on a technical side. John Bogle is believed to be the father of inventing the index funds. It might have existed before he came around, but he really was the one who, even to the extent of threatening his own career actually pushed the idea of index funds. And index funds is the vehicle, is the collective investment scheme which would allow passive investing to take place. And he did this in the 70s. I guess today, a version of that would be exchange traded funds, ETF’s. And the difference between ETFs and index [funds] is just very simply, that an ETF would be listed on the stock market, and index fund [is] not listed. But John Bogle essentially, effectively put his life to launch index funds, so many decades ago and today as a result of that, we have Vanguard the company, which is one of the biggest fund managers in the world, managing trillions of dollars in assets. And they are one of the premier passive investing offerers that are out there, [it] allows you to invest passively. And the start-up that I set up a crew, we are using ETFs to offer these things to people as well, along with other robo-advisors. Your leading robo-advisor would probably use a passive vehicle to do that. But if you look at the life of John Bogle, he also lives out his principles because here is a man who lived his life according to what he believed in, who launched a product that is very useful to the world. And Vanguard itself has got a very interesting structure, in a sense that a lot of their buyers into the funds at the same time, shareholders. We don’t need to get into the technicalities of it but I would say perhaps Vanguard is one of those companies where it implemented an early idea of sharing-economy company. Because that is what enabled them to provide all these investment vehicles extremely cheaply. I mean, you’re talking about a fraction of what you’re being charged today in Malaysia with the traditional [passive] vehicles in Malaysia. So that book really changed my life, my thinking, not only about financial products but about life itself. 

EZRA

So, the book’s called, ‘The Little Book of Common Sense Investing’ by John Bogle is that right?

JULIAN NG

That’s right, that’s right. Yeah.

EZRA

Finally Julian, because given what we’ve spoken about today, and I’ve put my cards on the table, so to speak, about what I would like to do. Because I’m 37, touching 40 in a few years. And I do feel that whilst I’m ahead in life on certain things, I’m certainly behind on certain things, and this includes my financial knowledge when it comes to personal finance, money management and I would like to get better at that. What are two-three things that I and maybe other listeners can walk away from this conversation and something for us to think about as we end this conversation. 

JULIAN NG

So, I would think that we’re going back to basics and there is actually no highfalutin financial ideas here. Really at the very basic level, it’s what people have been doing for a very long time. Which is really to consider when they’re at the crossroads of life, like yourself, to consider what they wanna do, whether they can make a decent income out of that, and hopefully, they can, out of the correct economic policy. Or out of their own hard work, they can make a decent income out of that. And after making that income, to not live beyond your means. And if you have something aspirational in your life, which is, you don’t have to be ashamed about that. If you want that thing, just go for it. Just make sure that you plan for it and today, the products that are available for you to plan your financial life, you’re spoiled for choices today. I mean at the risk of self-promotion, I would say, go into robo-advisor and the robo-advisor would lay it out for you, would do the math for you, tell you how much you need to save in order to achieve, financially what you want to spend on sometime down the road. 

EZRA

Julian, this was terrific, I appreciate your time, and I suspect this might not be the last conversation that we’re gonna be having. And I’d love to delve deeper into some of these issues and areas and as we go into these areas, I will probably be waving the white flag asking you to explain certain things and definitions so I look forward to those conversations how fascinating and awkward it would be for me. I’m really looking forward to it and thank you so much for your time. 

JULIAN NG

Ezra, thank you so much for having me, and definitely I’m very enthusiastic about further conversations with you because I think you’re [in] such [an] exciting point in your journey, and I want to be able to be in a position to do what little I can in having these conversations. You know, I really thank you for inviting me. 

That was Julian Ng. He’s based here in Kuala Lumpur, where he serves as co-founder of Akru, Malaysia’s first homegrown robo-advisor. To find out how you can start investing, head over to akrunow.com — that’s spelt A-K-R-U-now.com.

Check out the show notes which includes transcripts and supporting links. You’ll also find the interview Julian mentions where he spoke to John Bogle, founder of the Vanguard Group. 

If you found this episode useful, I’d love to hear more from you: tell us what keeps you up at night about personal finance. You can email us your thoughts and suggestions to hello@ezrazaid.com 

CREDITS

The Ezra Zaid Project is made by me, Ezra Zaid. I host, produce and edit the show. 

Our team includes Asper Goh, Ting Yen Min, Sabrina Yusof, Rahmah Pauzi, Melati Kamaruddin and Chun Saw. 

This episode was mixed and mastered by Meelz. 

Our theme music is by Breakmaster Cylinder featuring Rakin Suflan.

Follow us on social media: our handle is @projectezrazaid and you can find us on Instagram, Twitter and Facebook. Listen to previous episodes on ezrazaid.com or subscribe to us on Spotify, Apple Podcasts or however way you listen to podcasts. And until next time, stay safe and we’ll see you soon.