Wednesday, July 25, 2018

The Lean Years are Here

Cows from Vox Europe. Salad Days are Coming.

It’s near the end of an academic year, and we recently had a Unit Meeting. There were a lot of announcements: people moving away to new opportunities, people coming in or getting promoted, a new boss, etc. These are big changes, but the thing that had a big effect was when the Second-In-Command gave his work load projections not just for the coming term or year but for the next few years. 

The SIC hands out the work assignments. He tries his best to give everyone their fair share, but this time, he said that there were a lot of things that are out of his reach. For one, the course that is usually shared with other units is now much more sought after—even departments who don’t usually want them now fight for them. “That’s how you know the lean years are here,” he said. Then he gave us this chart looking at enrollment and course demand spread over 3++ years. 

The effect of the K-12 transition in education is now going to be felt fully. Sure, we had these two years where a sizeable bulk of our workload was from Senior High. This first batch is now moving on to higher education, but there won’t be enough of them for the next few years. Which means that this coming year onwards, from a work load of 12 units, we are only expecting half, or 6 units. “That’s optimistic,” said one unit head. “Realistically, expect just 3 units.” 

Twelve units is enough for a decent, not lavish living. It’s half of a two-person household if you have a spouse and kid/s. For a single person, twelve units is decent enough—if you don’t Grab and go out for meals all the time. It’s why I decided I could let go of that other place of employment. Six units is pushing it—that would put us barely past minimum wage. I don’t pay rent, but I have bills. My transportation is relatively minimal. I guess I can work on a side hustle. (Whoever said that we could have a decent living for Php10k is nuts.) I know the Unit is trying to keep everyone employed, and that means spreading the work so that all of us could have work. We get paid by the hour. If we go from 12 hours to 3 hours, how will that even cover the basics like bills, transportation and food. 

Our unit is relatively large by comparison, since we handle a lot of Everyone-Is-Required courses. Lets say there’s ~25 Part Time People and ~9 Full Timers. Full Timers are expected to carry a full load, and they are the priority. What’s left will be what’s divided between the Part Timers. Even if you gave all the PTs just a course each, that still means 25 classes are required to keep the population intact. For this reason, we are being encouraged to apply for grants and other things. In the almost sure scenario that we won’t be getting a decent amount of work. That could be manageable for a year. But 3 years? How could we survive? 

Hoping for rain. But not the torrential Ondoy kind. 

Later that week, finally had some time to catch up with workmates. Something we rarely do now. But since all of us were there, we had dinner. Of course, the topic was the Lean Years. Just a couple of days before that, my cube mate and I were talking about Life Plans. Are we going for advanced degrees? What kind and where? Or are we going to explore Other Things not related to Education. 

Then this was announced. It seemed like all the signs are pointing to getting out of here. I don’t know yet what the next step will be. But it seems like there’s a high probability that a lot of us won’t be sticking around for long. 

Saturday, July 21, 2018

5 Ways People are Dumb with Money

Found this interesting digital series from PBS called Two Cents, a series devoted to money matters for millennials and Gen Z. (I'm technically a Xennial or a Gen1 millennial, but who cares?) Anyway, Two Cents has this episode about how there’s this expectation that people would be rational about spending hard earned money. But the thing is, humans can’t quite remove their emotions in the decision making process of spending money. Economist Richard Thaler received the Nobel Prize for Economics for looking at all these totally fallible ways humans are about what should be a totally rational thing. In short, economics is not only about numbers, but about the very human ways decisions are made and how being a mistake prone human needs "nudges" in the right direction in order to modify behavior as well. In short, it's where Psychology and Economics meet. 

The good thing is that these money mistakes are predictable so we could actually avoid them. Here’s some of them: 

Endowment Effect 
The endowment effect is our tendency to assign bigger values to things we already own. Like if we dug up rare single edition Pokemon cards, and discovered that they go for $3k on E-bay, the rational thing to do would be to sell it. Until we decide to hold onto it. Then we see it being sold elsewhere for that amount and decide, eh, that’s just too expensive for a toy. 

There’s a Facebook page online for the place I work for. You could sell your stuff on it. For the longest time, a kid has posted the complete series of a certain manga. Most people would sell their stuff less than the original cover price, but this poster insists on maintaining the pristine, brand new price for a set of books that’s already several years old. It’s not that even rare. But one has to admit that the item is quite niche and only a few people would be interested in it. 

Sunk cost fallacy 
Like if you went to a movie that’s really bad and feel like walking out, but you stay so you can get your money’s worth. The episode also talks about membership clubs (think S&R or Landers) that charge an annual fee and you get perks in exchange. People will buy stuff they don’t need because they want to get their money’s worth. 

Sometimes I’m like this with lunch. My break is still within reasonable lunch hours, but usually all the good food would be gone, and only slim pickings remain. One time, all that was left was some stir fried okra (I don’t know what it’s called really) and then egg and cheese omelet. I felt so sad but also hungry, and only have a short break in between so I gotta eat. I ate the omelet, and I feel bad for wasting food (and money), but I just could’t bring myself to eat that okra and dumped it in the trash. Wala na, ayaw na, couldn’t finish na. Sunk cost na. 

Transaction Utility 
This amount of pleasure or pain that we get from feeling we paid less or more. In short: are we getting a bargain or a rip-off? It’s often totally disconnected from the happiness that you get from the thing itself. 

This is how malls sucker us with their never ending sales. You see that big red banner announcing “Sale! 70% off!” We buy it because it seems like there’s a markdown from the original sticker price. So we buy things, and more things that we don’t even need and all because we think we’re getting a discount. Instead, it might be more useful to see it as spending 70% more than 0 if you don’t buy that stuff unless you really need it. 

I like shopping End of Season sales. You do get a lot of bargains, lalo na for work clothes. But I make it a point to scout the things I want before the sales so that I know what the “regular” prices are. Then when the sales start and I still need it, or want something, I can check if it’s really going for a lower price. 

It’s also useful when you know the cycle of when these sales happen. Last year, my laptop broke down after 7 years. Sulit na. But I still waited for a sale and used my tablet in the meantime. When school was about to start, there’s an Education related sale. But the store was only giving out a 5% discount for the cash amount + freebies. The store has changed their cash sale policy na raw. The last time I bought a computer it was 10% for buying in cash.* I really needed the computer by then, and I still got a discount of 5%. Then two months later, my friend buys a computer. I’ve told her about the cash discount. Lo and behold the cash discount was back to 10%, and there was some freebies, too. You gotta believe I felt real bad because she paid much lower than I did. Oh well. Basta I hope the computer lasts just as long para sulit ang money. 

Mental Accounting
There’s also mental accounting, or separating money into imaginary categories in your mind. It’s useful when we think of it in terms of setting a budget. We invent categories like fun, free, expected or serious money. It violates the rule that money is “fungible,” i.e., totally interchangeable. A hundred pesos is still one hundred pesos however way you got it. Lets say you got Php1k on a raffle, should you use it to buy Php1k of shoes, eat out at a fancy place, go travel? But we shouldn’t think of it as free money. How would you spend the 1k if you worked for it? But most of us will just spend it, since we didn’t work for it anyway—it’s free! 

I know the episode listed 5 things, but for the life of me, I could only count 4. Or maybe I didn’t watch properly. But really, it was informational for me to see how mostly, it’s a battle between being rational about things or being emotional. Sometimes we know the right thing to do, but the heart still wins. Mahirap mag-abdicate ng emotion—specially if it has something to do with family. 

*When work mates noted my new laptop and asked how much it was, I didn’t say that I bought it in cash. Since I have always heard people (even our boss then) used credit cards and paid for the purchase in installments. Everyone was like, nobody has money for that. So I felt a bit ashamed and just said that the overtime check we recently got plus savings were what I used to buy the computer. But now I know better. 

Wednesday, July 11, 2018

Full Time Trading

Rafael Roces, 24, full time stock trader

Entrepreneur has this interesting article about a young full time trader who spoke at Investagram's Inspire PH event. 

While most people envision traders and brokers as mostly middle aged men, Rafael Roces (known by his Investa handle scraffycoco) is 24, started trading while still in college in 2016.

He was studying to become a doctor, taking the NMAT and all, but he thought he could become a better trader rather than a doctor. In his first year of trading, he was down 40% using his father's money. So what he did was to study and establish a system. The eight week trading course at Caylum Institute costs Php100k, but like all sorts of learning, one needs to invest time, money and practice.  He's now also studying to become a licensed broker, and is now affiliated with a securities company. By December of last year, was managing a 7-digit portfolio. 

It's really inspiring to read about a young person learning about money and investments as early as being in college. He's also lucky that he has the opportunity to focus on deep learning. I suppose if one really is interested in being good at something, you put everything you have in it. 

Monday, July 9, 2018

The Rising Cost of Health Care

Mmmmmeds. Yami. (Excuse the naked duvet.) 

I haven't really blogged in a while, and mostly it's because I seem to have won the lottery of assorted health issues these last few months. 

The major one isn't covered by the health card my place of work is affiliated with. So it means I have to shell out for consultations and the meds I've been taking since February are on a rising scale. Basically my TRAIN money plans got funneled into medicine expenses so there goes that plan.  Will talk about this in another post, and will mainly talk about the health card for a bit since it's that time of the year that the contract with the health care provided is renewed. 

Since I'm a part timer, I have to pay for my own health card, but the institution gathers all these PTs and strikes a deal with the main provider to sort of have us ride on in their deal for employees and full timers. 

I joined the health care provider in 2016-2017, so this will be the third year. Here's the cost for the 3 years since: 

2016-2017: Php1,701.28/month (Maximum Benefit Limit: Php150k)
2017-2018: Php1,871.52/month
2018-2019: Php2,059.68/month 

I'm not sure if the Maximum Benefit Limit has risen or if it's still pegged at Php150k per year. I noticed that since I started, there's been a 10% mark up each time. 

To assure that part timers will pay for the whole year's medical costs, instead of a monthly deduction, the whole year's cost is deducted for six (6) successive pay checks. So you work for the entire term and pay for your health card that whole term. Which means that you get less money but hey, at least that's one less concern. 

In my first year of joining, I don't think I even used the card. Maybe went to the clinic a couple of times, but nothing major. 

This year though, I do feel that I needed the card, but my health concern wasn't covered. But this past month, I've gone for check ups almost weekly. 

I needed emergency dental work done in early June. Check up was covered. But the procedure I needed wasn't included. So pay for the professional fee and the materials needed. I was only too glad that the dentist could do something about it that same day. Otherwise, I couldn't have gone to work if I were missing some front teeth. Lesson here: folks, be careful when you bite into food. Otherwise, you'll be needing a new set of teeth. 

Then I had a weird ear infection that needed antibiotics, and then an ENT doctor who scared me that I might need to have an incision made. He said I would need to ready my PhilHealth stuff. "Ask the HR," he said. Which I haven't done. I prayed so hard that the antibiotics and the topical antibacterial would work because I really don't want to go to the hospital because of something on my ear. But really, since prescription meds aren't covered either, I had to fork over some serious coin. 

Am I glad that I have to use the health card? No. 
Am I glad I have the health card? Yes. 

All in all, it's like a series of unfortunate medical events. Hello and bye, emergency fund. But still, I am thankful that I had that stash and could do something about my situation. Otherwise, as they say, nganga.