Category Archives: Around the Watercooler

Passive Income Part Five – Trading

This is the fifth and penultimate post on investing for passive income. Now that you know all about investing, costs, risk, and have opened an account, it.s now time to go live: trading.

Trading – Finding a Stock’s Ticker

Each stock or ETF (exchange traded fund) has a unique ticker that identifies it. A ticker is a three letter combination. In a previous post, it was suggested a portfolio could be built out of two ETFs: one holding a basket of stocks and one holding a basket of bonds. The bond ETF is Vanguard.s Canada Aggregate Bond Index ETF. If you click the link, it takes you to Vanguard.s site and you can see that the three letter combination which identifies it is called VAB. The stock ETF is BMO.s S&P/TSX Capped Composite ETF. Clicking the link takes you to the Bank of Montreal.s site which identifies the stock.s ticker as ZCN. Remember VAB and ZCN.

Trading – Placing the Buy Order

We.re almost at your first trade! Log in to you account. You should see in one of the sidebar items the option to place orders. In TDDI it looks like this and you want to select ‘Stocks’ under ‘Order Entry’:

TDDI Sidebar

In Questrade you simply search for a stock by punching it.s three letter ticker into the little box. I.ve added .to to the end of vab to let Questrade know that vab trades on the Toronto exchange. Once the search is complete, there.s the option to ‘buy’ with the green button on the bottom:

Questrade Search

The next step is to place the order. With TDDI after you select ‘Stocks’ below ‘Order Entry’, the following menu pops up:

TDDI Order Entry

In ‘Action’, select ‘Buy’. In quantity, enter in how many shares you want. Put the ticker symbol ZCN into the ‘Symbol’ field and select ‘Canada’ as the market. Unlike Questrade, you don.t enter in the .to after the ticker. Hit ‘Get Quote’ and it will give you the quote for what the bid and the ask prices are. The bid is what the market will give you if you sell. The ask is what the market will sell to you for if you.re buying. The spread is the difference between the bid and ask prices and represents the compensation the market makers get to provide liquidity. Here.s how it looks once everything.s filled in:

TDDI Order Entry Filled Out

Notice under ‘Price’ that the order is set up as a buy order with a ‘Limit Price’. Always use limit prices when placing orders. A limit order instructs the brokerage that this is the maximum you are willing to pay. I usually set the limit price at the ask price. So, in this example, the ask price is $20.11 (which says the market will sell to you at $20.11) and I.ve set the limit (the maximum I.m willing to pay) at $20.11. If you do a market order (i.e. no limit), the order has a very small chance of filling above the current ask price (i.e. you pay more than you expect).

25 shares at $20.11 is going to cost $502.75. Make sure you.ve got the funds. Oh, and TDDI will charge you $9.99 to execute the trade so you need available $512.74. Because trades cost money, generally, on TDDI I.ll wait until there.s $2000 or so before I do a trade. Other people wait till they have 4 or even 10k to do a trade. It.s a matter of personal preference but you want to minimize your expenses.

Double check everything and then hit ‘Buy’. There you go, that.s trading on TDDI! It seems like a lot of steps but it.s an easy process.

Turning now to the trading sequence for Questrade. If you hit ‘Buy’ on the little green button once you.ve found your stock, a menu pops up:

Questrade Filled In Order Entry

This time we.re using VAB. Since the ask is at $25.56, we.re going to place a limit order at the ask price of $25.63. Quantity is 100 so this trade will cost you $2563.00. Trading ETFs is free on Questrade (this is one of the reasons why it.s nice to have a Questrade account). But they do ding you a little bit to ‘remove liquidity’. The charge is 0.0035 cents per share. So this trade will cost you a whopping 35 cents! So make sure you have $2563.35 in your account. Review everything and then hit ‘Send Order’. In half a second, it will send confirmation that your order has been routed and that.s it.s filled. That.s it! Isn.t trading easy as 1-2-3?

Next up will be a final post with some investment FAQs and my investment philosophy. Until next time, I.m Edwin Wong and writing this blog has been a happy diversion from writing the final chapter in the endless saga of Doing Melpomene’s Work.

Passive Income Part Four – Accounts

Back by popular demand!–here.s Part Four and accounts are the next item on the table. But since I can.t remember the topics in parts one to three, it might be a good idea for a refresher before starting! Here.s the road we took: Part One covered why investing is handy and what to expect. Part Two focussed on costs, costs, and costs. Part Three introduced the idea of risk and how an easy to construct portfolio with a bond and an equity component could be tailor fit to suit an investor.s risk profile. Next up are the different types of accounts.

Accounts: TFSA, RRSP (or RSP), and Non-Registered

There.s three different types of accounts. Think of accounts as empty baskets or shopping carts into which you can put your investments. Just as baskets or carts have different qualities (they can be made of metal or wood; some you carry and others have wheels, etc.,) the three different types of accounts have different attributes from a tax perspective:

TFSAs (Tax Free Savings Accounts) are accounts where you can put your after-tax income. Your investments grow tax free inside the account, hence it.s name. When money is taken out of the account, it is not declared as income and you are not taxed.

RRSPs or RSPs (Registered Retirement Savings Plans) are accounts where you can put your pre-tax income (pre-tax since when you file taxes in March the CRA sends you back whatever taxes you paid on the amount that was contributed to the RSP). Your investments grow tax free inside the account. When the money is taken out, it is declared as income and you are taxed.

Think of TFSAs and RSPs are mirror images of one another. If the tax bracket in your working and retirement years doesn.t change, they are the same in terms of the savings because in the TFSA you are taxed on the money before you put it in (therefore you put in less) but you are not taxed when you take it out. In the RSP, you aren.t taxed on the money before you put it in (therefore you have more to put in) but you are taxed when you take it out.

Non-Registered accounts are simply investment accounts held outside tax shelters such as TFSAs and RRSPs. You put your after-tax income into these accounts. Growth in investments in non-registered accounts are classified as dividends or capital gains and are taxed, but at preferential rates. Some basic record keeping is necessary to work out gains and losses when doing taxes. Although there are more tax considerations and record keeping with non-registered accounts, they are incredibly flexible.

If you.re starting out, the best option is either a TFSA or a RSP. They.re tax shelters and there.s less record keeping involved. If you expect to be making the same or more income during retirement (it happens, believe it or not), go with a TFSA. If you.re not sure, start out with a TFSA. TFSAs are simpler in terms of taking money in and out. If you.re certain you.re going to be making quite a bit less during retirement, consider starting off with a RSP: this way when you put your money into the RSP, you get a lot of your taxes back (because you.re in a high tax bracket) but when you.re withdrawing from your RSP, you.ll be taxed minimally (because you.re in a low tax bracket).

Yes, I know, investing is a workout because it forces you to think about the future! As Yogi Berra once said, ‘Predictions are hard, especially when they concern the future’!

If you.re not sure what to do, start out with a TFSA and you.ll do just fine.

How to Open an Account

So you.ve decided to open up a TFSA. Very good! How do you do this? Well, there.s a couple of options. What you want is a ‘Self-directed TFSA’ account. Self-directed means that you.re in control: you.re not going through a financial advisor (who will offer value added services by directing you to their high cost products). Self-directed is the way to go

The big 5 banks all have brokerage divisions:

1. TD.s brokerage is called TDDI (TD Direct Investing)

2. RBC.s is called RBC Direct Investing

3. Scotia has Scotia iTRADE

4. BMO has BMO Investorline

5. CIBC calls theirs CIBC Investor.s Edge

It might make sense to have the self-directed TFSA with the same institution where you do your banking. You can link it with your chequing account and make deposits or withdrawals quickly and easily. The other option which give you lower cost trades is to go with an independent brokerage such as Questrade. They have lower commissions. To fund the account, you use the bill pay feature at your bank and select Questrade as a payee. You pay them as you would a hydro or a phone bill. When you set up the account, you send Questrade a void cheque so that when you do withdrawals, Questrade will do an electronic funds transfer directly into your bank chequings account. Easy. I have investment accounts at TDDI (because I bank there) and Questrade (to take advantage of low commissions).

Most of the banks allow you to do the application online. Questrade has a handy online application as well: for the ID and void cheque portions, you simply upload photos. It.ll take a few hours to get things set up.

If you.re wondering whether to go with one of the big 5 banks or an independent brokerage, I.d suggest Questrade because of their low fees. It.s easy to set up the account online and it.s easy to use bill pay on your regular bank account to fund it. Withdrawals with electronic funds transfers are also a piece of cake.

So there you have it! Accounts demystified! I think we.ll do two more instalments of the ‘Passive Income’ series before returning to regularly scheduled programming. A primer on how to buy and sell once the account is opened is coming your way. And for the final instalment, maybe a brief FAQ with some words on how my investment philosophy came to be what it is today.

Until next time I.m Edwin Wong and it.s through the passive income stream that I.m able to be Doing Melpomene’s Work. And assiduous readers who have been reading are well on their way as well!

Passive Income Part Three – Risk

Passive Income Part Two – Costs ended on a cliffhanger: it addressed why costs are important, but did not get to how costs can be controlled. It.s actually easy: find low cost investment vehicles. To find the right low cost investment vehicles and put them together in a portfolio, an understanding of risk is useful.

What is Risk?

Some say risk is a four letter word. Others say it is the danger of loss. To some risk is that more things can happen than will happen. An economist will say the technical definition which is that risk is the portfolio’s standard deviation. Standard deviation quantifies the variance in annual profits and losses. Economists like it because it can be expressed as a number and being a number, can fit into their equations. It.s hard to quantify ‘shit happens’! The economists’ definition, however, is at odds with how the word is commonly used to express ‘danger of loss’. A portfolio whose returns varies from -1% to -2% each year by their reckoning is less risky than a portfolio whose returns varies between +5 to + 15% each year because the variance in the returns of the first portfolio is smaller. According to the common usage, the first portfolio is clearly ‘riskier’ because it is losing money each year!

For today, however, risk is your tolerance to loss and gain. The more risk tolerant you are, the greater chance you are willing to stomach big losses so that in other years you will have big gains. The less risk tolerant you are, the more you prefer small gains in good years so that losses in bad years are also smaller. This principle works because risk is related to return: the more risk you are willing to take on, the greater your return should be because you are exposed to greater danger. Think of different occupations. A linesman (those guys who connect power lines carrying tens of thousands of volts) makes more money than, say, a deli attendant at a supermarket. That.s because the most dangerous thing in the supermarket is the meat cutter or an irate customer. The linesman takes on more risk and should be compensated for taking risk. It.s the same in the stock market.

So decide whether you.re low risk, medium risk, or high risk investor. There.s actually no way to really figure out until you.re invested (and feel the thrill of making money and the dejection of losing money) so just go ahead and decide. Remember what you decide as we.ll come back to it in a second. Here.s some images to help assiduous readers make their selection.

If you require helmet, reflective gear, and lights to feel safe riding a bike, consider yourself low risk:

Bike Safety Nerd – Low Risk

If you will go for the piece of cheese provided you have safety apparatus, consider yourself medium risk:

Safety Mouse – Medium Risk

If you do vehicle repairs A-Team style, consider yourself high risk:

Road Repair – High Risk

Classes of Investments

There.s two major classes of investments: stocks and bonds. With stocks, you are a shareholder in the company. You are a part owner, in other words. With bonds, you lend your money to a company. They will pay you back what you lent them plus a little something extra for your trouble. The nice thing with stocks and bonds is that they.re uncorrelated. That is to say, they do not move in tandem. If one.s going up, the other.s going down. Or if one.s going up, the other.s treading water or not going up quite as much.

Now guess which is riskier? If you guessed stocks, then you.d be right. They also return more than bonds (most of the time). But they are also more volatile. That.s why you also need bonds in your portfolio. Think of them as a ballast. When the storm.s brewing and you.re battening down the hatches, bonds are your best friend, not that diamond mine in Botswana.

Now, since there are two classes of investments and when one zigs the other zags, it seems a good idea to have bits of both in the investment portfolio. Stocks are the engines that drive the portfolio.s growth during good years and bonds are the ballast that help you through the storm. How do we figure out how much of each?

Do you remember what type of investor you are from the previous section? If you.re the safety cyclist, a good starting point is a portfolio of 60% stocks and 40% bonds. If you.re the hungry mouse who will go for the cheese after putting on the necessary safety gear, a good starting point is 70% stocks and 30% bonds. If you.ll trust a 2×4 to hold up your truck while doing repairs underneath it, then a good starting point is 80% stocks and 20% bonds.

Wasn.t that easy?

Investment Vehicles

Which bonds and which stocks to I buy? That.s easy: buy them all! There are these investment products out there called exchange-traded funds or ETFs. They.re exchange-traded because they trade on the TSX (the stock market). They.re funds because they.re baskets of many individual holdings which together represent the total market. For bonds, I.d recommend Vanguard Canadian Aggregate Bond Index ETF. It has a MER (management expense ratio) of 0.19%. For something that holds around 600 different issues of bonds, it.s dirt cheap. Of it.s 600 or so issues, about three-quarters of its holdings are backed by the Canadian government (federal, provincial, and municipal) or government related entities. The remaining one-quarter are issued by companies, mainly investment grade banks and insurance companies.

For stocks, I.d recommend BMO Capped Composite Index ETF. It has a MER (management expense ratio) of roughly 0.1%. I say roughly because they just lowered it and their site frustratingly publishes the ‘Maximum Annual Management Fee’ (which is slightly less than the MER which includes trading costs and other things). I wish everyone would just publish the MER to make comparisons easier. This ETF holds around 230 of the largest companies in Canada: Royal Bank, Manulife, CNR, Valeant Pharmaceuticals, Blackberry, you name it, it.s in there.

In the following blogs I.ll discuss how to buy the bond ETF and the stock ETF. Once you.re set up, it.s a few keystrokes and clicks of the mouse. It.s that easy.

In today.s segment, I discussed risk and how knowing your risk tolerance helps you to put together a portfolio. I also recommended two investment vehicles: one for bonds and one for stocks. Notice how low their costs are: fractions of a percent. In Passive Income Part Two, the average cost of a mutual fund was flagged at 2.42%. The cost of a DIY portfolio with my two recommendation is in the neighbourhood of 0.15%. That is to say, by reading this blog, you save 94% off the posted retail price!

Stay tuned for Part Four of the Passive Income saga! Next time, the discussion will be on the burning question I.m sure all of you are asking: how do I open up an investing account? Well, that.s easy too!

Until next time, I.m Edwin Wong and investing has been how I was able to get out of the rat race to be Doing Melpomene’s Work. I hope others will be able to as well.

Passive Income Part Two – Costs

DIY Investing Keeps Costs Low

How much of an income stream can you expect from a well-balanced portfolio of investments? The industry consensus is 3-4% 3% if you.re young. 4% if you.re in your retirement years (65+). This was discussed in Passive Income Part One. The rationale is that the younger you are, the less you can draw down because you need the portfolio to weather down years. In my life, there seems to have been a stock market disaster every decade (1987 Black Monday, 1999 tech bubble, and 2008 Great Recession). It.s easier for the portfolio to bounce back from down years if it has more capital inside it. Everyone.s always worried about stock market disasters. But believe it or not to do absolutely nothing is the best course of action. More on this later. What I want to cover today is how important it is to keep costs low. The best way to keep costs low is to be a DIY investor.

…stop the presses… thank you to WordPress wizard MR for pointing out the advantages of RSS feeds from a reader.s perspective. On the sidebar there is now the all-powerful orange RSS icon. Diligent readers are encouraged to ‘Follow Us’ to receive all the latest! …now back to the regular scheduled programming …

Expenses Incurred in Non-Stock Investments

To give you an example of how important it is to keep costs low with stock market type investments, here are two examples of expenses from non-stock market investments. There.s all sort of examples I could have used, but since in Passive Income Part One I used an analogy comparing capital gains to the appreciation in the value of a house and dividends to the rental income stream, I.m going to used real estate examples.

Let.s say you own a piece of commercial real estate. It could be an office building, a restaurant, or a retail space. If you want a management company to find tenants for you, they will charge you based on the rent. Typically 3-5% of the yearly rent. So if your piece of commercial real estate generates $100,000 a year, you will pay them between $3000 – $5000 a year. Every year. It.s not just the first year the tenant signs the lease!

Okay. So with this piece of commercial real estate, you pocket $95,000 and the management company pockets $5000.

Let.s go on to the second example. Say you own some investment real estate. It doesn.t matter whether it.s a condo or a house. If you want a management company to find tenants for you, they will charge you based on rent. Typically 10% of the yearly rent. So if your house generates you $20,000 a year, you will pay them $2000 a year. Every year. It.s not just the first year they sign up the tenant.

You can see how this is really a good deal for management companies. If a management company succeeds in managing 10 residential properties, they make as much income as an owner who owns one house! The management company has put down zero capital and incurs none of the risks associated with the property (it burns down, depreciates, tenants don.t pay, and so on). On the other hand, the owner has to come up with the capital to buy the house and takes on all the risks of owning property!

Of all the real estate investors I know, they all manage their properties themselves. They keep costs low. Now, let.s return back to stock based investing.

What are the costs of investing in mutual funds or hiring a fee based advisor? A 2013 study found that the average MER (management expense ratio) of mutual funds in Canada is 2.42%:

Costs of Owning a Mutual Fund 2013

So with a $10,000 portfolio, it costs the investor $242 each year. For a $10,000 portfolio, fee based advisors charge 1% of AUM (assets under management, the scale slides down with larger portfolios). That works out to be $100 each year. At this point, most people (but not the diligent readers of this blog) would say, ‘That.s not a bad deal compared with the real estate examples where the management fees were 10% (residential) and 5% (commercial)’. There.s always a but. And here it is. But in the real estate examples, the fee came off as a percentage of the revenue or the rental stream, not the market value of the real estate holding itself. In the stock example, the fee comes off the total value of the portfolio. This makes a huge difference!

Put it this way. Do you recall the amount you can draw down from a well-balanced portfolio of stocks and bonds each year. It.s 3-4%. Let.s say you.re a young investor. You can draw down (spend) 3% each year. On a $10,000 portfolio, that.s $300 a year. If you.ve invested in mutual funds, $242 of that will go into paying management fees, leaving you $58 to spend. If you.ve invested with a fee-based advisor, $100 of that will go into paying management fees, leaving you $200 to spend.

In the residential real estate example, things look good for the management company because they only have to manage 10 houses to enjoy the same income as an owner of one house. And, in managing 10 houses, neither did they have to come up with the hard earned money to buy them nor are they exposed to any of the risks of owning houses (fire, flood, earthquake, etc.,). In the mutual fund example, the management company makes more money than the investor right off the bat ($242 vs. $58). In the fee-based advisor example, the management company enjoys the same income as an investor with a $10,000 portfolio once it manages 3 investors with $10,000 portfolios. The moral of the story is costs are critical!

DIY is the Answer

DIY is the way to control costs. It.s the same with anything. Take dining out. Dinner and a few drinks comes to $50. If I DIY, I can feed myself for a whole week for the price of one meal out.

The financial industry is a huge behemoth. Every year you hear banks have record earnings. Well, after the analysis, you can see how they.re able to enjoy record earnings each year. To me, the financial advisors at banks are first and foremost salespeople. In 2007, I offered to help my folks manage their investments. Originally, dad wanted to go stay with the financial advisors at his bank. He said how much return could he expect if I managed them. I said he could expect to spend about 4% each year and that this amount would be inflation adjusted (i.e. it would keep track of inflation). He said the bank was telling him they charged nothing for their advice and that he could draw down safely 7-10% each year. I told him that, well, that.s not possible. His response was that the bank people are experts and I was not. Well, actually what happened is that mom was getting tired of dealing with the bank people and the stress of investing was getting to her. I.m not sure, but I think it was her call to let me manage things.

At this time, a lot of my aunts and uncles trusted their money to the banks. They were spending 7-10% a year, and, on top of that, the banks were giving them free vacations each year for investing with them. If it.s too good to be true, it is too good to be true. Flash forward to 2015. My parents’ portfolios have grown. My aunts and uncles’ portfolios have been decimated. They were paying way too high fees at the banks and drawing down too much. By the time they noticed, it was too late. To me, that.s the funniest thing: you work so hard for your money and then hand it over for someone to manage without blinking an eye.

In my portfolio and my folks’ portfolios, I.ve kept costs down to not 1% and not even 0.5% but less than one-half of half a percent (~0.2%)! In the next blogs, I.ll let the cat out of the bag as to how this is possible. But to recap: in Passive Income Part One, I discussed why it.s important to invest and the things investing can and cannot do. In today.s blog, I discussed the importance of keeping an eye on costs. In Part Three, I.ll talk about how easy portfolio construction actually is.

Until next time, I.m Edwin Wong and I should be doing more of Melpomene’s work but talking about investing is too damned fun!

Bonus Quotes in Support of DIY:

‘Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway’. Warren Buffett commenting on the incongruity of taking advice from people who are less clever than you are just because they are the ‘experts’.

And here.s one by Fred Schwed Jr. asking the hard question on how much value brokers give to their clients:

Once in the dear dead days beyond recall, an out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor. He said, ‘Look, those are the bankers’ and brokers’ yachts’. ‘Where are the customers’ yachts?’ asked the naive visitor.

Passive Income Part One

Why Passive Income?

The question of passive income came up while driving along Dallas Road with talented business owner EA. We had been catching up. In the last few years, she.s been working hard to expand her startup company and now it.s taken off. In addition to graphic and web design (which she.s been doing since 2004), now her company also offers business writing consultation and creative coaching services. EA sure can write. I remember coming back to Victoria in 2007 and looking for a job with my crappy resume. She redid it and the phone started ringing right away.

While we were catching up, I mentioned that the income coming in from stocks and bonds was one of the reasons why I was able to switch over to Doing Melpomene’s Work full-time. She.d been thinking about setting up some investments to get the passive income stream started. I promised to share with her the tips I.ve picked up over years. Since investing interests me just about as much as theatre (they both revolve around risk and uncertainty), I thought I.d type out my thoughts into words on the blog. Hopefully other diligent readers will be able to benefit as well. To me, investing = empowering yourself to do what you want. If you spend money, it.s gone. If you invest money, the money works for you. The more money you have invested, the more time you have to do the things you want and love to do. It.s that simple. Sort of.

What You Can Expect (and not expect) from Investments

1. Do not expect to get rich from investments. If you want to get rich, startup your own company. Stocks and bonds are good places, however, to park your money. Bill Gates is a good example. He didn.t become the world.s richest person through stocks. He did it through starting up Microsoft. But once he had money, he put it to work in the stock market.

2. Do expect to be able to draw 3-4% income stream from your investments each year. If you.re younger, the number is closer to 3%. If you.re older, the number is closer to 4%. The reason that the drawdown ratio is less when you.re younger is because when you.re younger, your portfolio has to survive more down years. If the stock market experiences a couple of down years in a row (very likely over a long time horizon), the less you draw, the easier it recovers during the good years.

3. Do not expect big results right away. Investing is a long term thing. And it.s hard to think different about money. For every $1000 we invest, we are confronted with the opportunity cost of not being able to spend it (because it.s locked away in the investment). So we feel the pain of not having the vacation or not buying the big screen TV. So, if we can draw 3% each year from the investment, it means for each $1000, we can either have the satisfaction of $30/year every year or the satisfaction of the new big screen TV right now. The satisfaction of having the TV today seems better. I mean, really, what.s $30?–that.s a couple of cups of coffee and a Big Mac! But…

I.ve been investing for 25 years. All the consumer stuff I could have bought back then would likely be in the garbage today where it has zero, zilch, nada value. The money that I socked away still has value, and, since it has grown, has an even greater value today. So, yes, there.s an opportunity cost in investing. But think of how investing and the passive income stream can help you in the future. Future means at least 5 to 10 years from today.

A couple of years or so after I started out (over twenty years ago), I had been trying to spread the investing gospel to my friends. A lot of us were big spenders. I remember trying to talk about the merits of saving. One comment I.ll always remember. One night me and CM were chatting about how much the income stream was. When we worked it out, he said, ‘What!?! You saved all that so that you could get a squeegee each month?’. Undeterred, I stuck it out. And yes, the passive income stream produces much more than a squeegee each month now.

4. Do plan to gradually replace monthly expenses with your new passive income stream after you.ve been investing five or so years. Gradual is the key word. You.re not going to be able to replace the whole salary from the 9-5 job all at once. If you like coffee shop coffee and it costs you $50 a month, aim to save up enough to pay for all your coffees with the passive income stream (at a 3% drawdown rate you would need $20,000 invested).

5. Do realize that investing will change the way you look at money for the better. For example, if you realize that you have to invest $20,000 to be able to drink $50 of coffee shop coffee each month, you might just decide to trim expenses. Investing makes you aware of how valuable money actually is.

In fact, I don.t look at the face value of money anymore. The common way of looking at money is from the point of view of a spender. If someone had $100,000 dollars, he would likely think, ‘I.m rich, I could buy a Porsche 911 or that big yacht’. Money to average person = consumer goods. That.s the way we.ve been brought up in the consumer society. If I had $100,000 in my hand right now, I would look at it as an income stream of $3000 each year for the rest of my life. The $100,000 doesn.t really make me ‘richer’. But the $3000 income stream gives me more freedom to be doing whatever it is that I love doing. The investor.s perspective is different than the consumer perspective.

Different Things You Can Do in the Stock Market

There.s a lot of different ways to invest. You can play the stock market like a casino: go big or go home. Venture capital, micro-cap heart attack stocks. That.s not what I do. You can time the market: buy low and sell high. That.s harder than it seems. That.s not what I do. You can try your hand at momentum investing: buy the hot sector and ride it to the top! That sounds exciting but that.s not what I do. You can practise value investing: buying stocks on the fundamentals. If I were to do something besides what I.m doing, this would be it. But that.s not what I do. If you have connections, you can try insider trading. Like Gordon Gekko in the 1987 film Wall Street. But that.s not what I do, although if you gave me a sweet brickphone I just might try.

Gordon Gekko Brickphone

Well what do I do? Because the point is to create a passive income stream, I invest with income in mind. That is to say: find stocks or baskets of stocks that pay dividends. There.s two ways to make money in the stock market: capital gains or dividends. Capital gains result when the stock goes up in value. Dividends are the income that you receive because you are a part-owner of a profitable company.

A stock market is sort of like an investment property. If you buy a second house, it goes up in value, and you sell it, the proceeds from the sale is like a capital gain. If you buy a second house and you rent it, the rental income is like the dividend that a stock pays. Since I don.t really intent to sell, capital gains don.t really mean much to me. It.s like if you had a second house: would you really get it appraised every day? Or, if you.re after the income stream, would you just sit back and be content to collect the rent without worrying about daily fluctuations in your house.s price? My intent is not to sell, since I.m happy with my investments and if I were to sell, I.d just have to invest it into something else.

In this entry, I.ve discussed the benefits you can enjoy from having a passive income stream. Also, I.ve gone over some things to expect and not expect. This is no get rich quick scheme but a methodical lifelong process. Finally, I.ve touched upon my investment philosophy. Stay tuned for the next instalments where I.ll provide real life examples of how my DIY investments are set up. Costs are critical in investing and DIY is the way to go. And, believe it or not, DIY can be incredibly simple, empowering, and rewarding!

Until next time, I.m Edwin Wong, and these are some of the secrets of how I.m able to be Doing Melpomene’s Work.

Galloping Goose Magic

Magic is Actually a Collie

Well, you never know who you.ll meet and the circumstances which make it happen. With that in mind, here.s a story for all the assiduous readers out there. On the way out of town the other day, the nuts on the front fender worked themselves loose and fell off. The bike was still rideable, but the bottom part of the fender was rubbing against the tire. One of the most pleasant things about riding is a quiet ride. Not in terms of everything all quiet (which you never have) but in terms of the bike not contributing more than it should: the hum of the tires on the road and the whirl of a clean and lean drivetrain. No squeaking parts. And definitely no distraction of mudflap rubbing on the tire! While debating whether to tune it out it or turn around, the Nest Cafe appeared around the bend. It.s a new(er) cafe I.d recently seen on the Galloping Goose and had wanted to check it out. Time for a cold drink. This is how I met Magic.

Always Carry a Book with You

The Nest Cafe can be accessed right off the Galloping Goose and there.s a large selection of outdoor benches and seats on two levels. There.s also bike parking galore and an air pump with tools for basic adjustments / repairs on a work area (even with bike stand!). Lots of friendly cyclists around exchanging stories. The friendly barista recommended a cold chai latte and I sat outside at one of the parasoled tables. I carry a book most places I go and on this day in the saddlebag was Self-Publishing in Canada by Suzanne Anderson. While reading away, a table of cyclists were debating heading up to Matticks Farm on the table to the right and to the left a table of two sat down with a large collie with a well groomed coat. This was Magic and she liked to say come up and greet people. And yes, not only is the Nest Cafe bike friendly: it is also dog friendly!–there.s ‘hitching posts’ at the outdoor tables to attach the leash! What a great idea!

On my way out, one of the ladies asked me if I was in the process of self-publishing. Books are good conversation starters. It turns out L and M were good friends and that L had gone through the process. Now it.s hard to remember the whole conversation, but it.s an inspiring story. Over ten years ago, L.s husband was diagnosed with MS. It wasn.t looking good. Diligent friend M would help out by reading him novels while the patient sipped from a snifter of scotch. Things like that always catch you off guard but especially so since L.s husband was 45 at the time. L decided to self-publish a title relating her experiences. I.m sure there.s lots of folks going through caring for someone with MS that have benefitted and will benefit from reading her experiences. I haven.t looked, but I.d guess that there.s lots of books on MS but far fewer books from the perspective of coping with living with someone who has MS.

I was glad L shared her story with me. She.s moved beyond her book now (it came out over ten years ago) but I think she.s still conferencing and speaking on the subject. They also asked me about what I was working on. That was good as it gave me a chance to practise talking about the book. It.s something that I don.t really get to do that often. When I gave them my shout line: ‘You can.t be a hero unless you got something to lose’, M commented that it reminded her of something she had heard from Joseph Campbell, author of The Hero with a Thousand Faces. She had seem him lecture, I believe (I must really start taking supplements to improve my memory!). Wow! He.s a legend! I have some of his books on my shelf, perhaps I should read him next? Talking with both of them was a tremendous encouragement. That is helpful in that so often when writing I think, ‘Ugh! Why do I subject myself to this torture’. Something simple like being able to bounce some ideas off receptive folks is actually a great motivation boost.

So after chatting with for a little while as I turned to go, I said bye to L, M, and Magic. L said, ‘Would you believe it, she.s 14–a little slower but still curious and full of life!’. I didn.t put the numbers together at the time, but now thinking in retrospect, maybe she and her late husband bought Magic as a little puppy dog when he was first diagnosed with MS? Though I can.t remember the numbers, the time frame works out: it.s been over ten years since the book came out and while working on the book the question of whether her husband would see the publication was always in the air. And that would explain Magic.s name as well: after being diagnosed with MS at such an early age, they were looking for some ‘magic’ and gave their hope form by the addition of the collie dog to their family. If that.s the case, wow, that.s a beautiful story.

I.m glad L and M shared their stories with me. They had a lot of wisdom. It reminds me, there.s a bit of magic and a bit of loss in all things. It also reminds me of how wisdom comes too at a steep price. I.m glad they.re friends and that must have helped out. One thing I notice about friends in woman-woman friendships is very often they come in pairs with one who is more introverted and one who is more extroverted. But that.s another story. Remind me to tell you the story of the ‘runaways’ on the viaRail trek across Canada one day.

This time last year I was having lunch with GP.s uncle in Vancouver. He had a bit of a sore throat, acid reflux or something. I remember, he was eating slowly. But he looked great. He was saying to check out his studio sometime and have some beers. Flash forward a few months, they found out it was throat cancer. From the diagnosis, he survived I think just a few weeks. It was fast. Until next time, I.m Edwin Wong and I.m filled with a sense of wonder that I.m able to be Doing Melpomene’s Work.

Bonus Photo: TS has inspired me to tweak up my bike for longer rides. After making some mods, went for a night ride around town yesterday and saw the cruise ships in town at Ogden Point! Bonus points to diligent readers who can spot my mighty all-titanium Marinoni Sportivo chariot!–

Celebrity Solstice at Ogden Point

Economics of Live Theatre

In the last month, I.ve been to two performances. The first was a production of Macbeth put on by the Blue Bridge Theatre Repertory at the Roxy that was discussed in this blog. The second was eatingthegame put on by Hong Kong Exile at Metro Studio discussed here. Have you ever wondered about the economics of theatre? Here.s my take on the economics of live theatre based on the rate cards from the Roxy and Metro Studio.

Here.s the rate card from Metro Studio:

Metro Studio Rate Card

Let.s work it out in the most advantageous terms from the point of view of art. Or in other words, how to make the show as profitable as possible. Here.s the base price scenario for the Metro Studio:

$575 (not for profit rental rate) + technician ($98, based on minimum 4hr call) + front of house manager ($70, based on minimum 4hr call) + production manager ($120, based on minimum 4hr call) + projector rental ($40) = GRAND TOTAL $903.

Here.s the rate card from the Roxy:

Rate Card Roxy

Let.s make it out in the most advantageous terms from the view of art. Or in other words, how to make the show as profitable as possible. Here.s the base price scenario for the Roxy:

$650 (not for profit rental day rate) + concession manager ($72, based on minimum 4hr call) + technician ($88, based on minimum 4hr call) + $2,000,000 public liability insurance ($150, estimate from top of head) = $960.

So, best case scenario for a theatre troupe to stage a one day production at the Metro Studio is $903. By best case, these are only the fees incurred to the venue. The writer, director, actors, assistants, costume/set designers, makeup artists, etc., are all working for free. You say: ‘Maybe the rental rate shouldn.t be included in that figure if the Metro Studio is inviting a troupe to perform in their space’. Well, the Metro Studio wouldn.t be in business for long if they didn.t get rental revenue so that figure should stay in.

For the Roxy (which has 20% or so additional capacity), the best case scenario for a theatre troupe to stage a one day production is $960. By best case, these are only the fees incurred to the venue. The director, actors, assistants, constume/set designers, makeup artists, etc., are all working for free. You say: ‘Maybe the rental rate shouldn.t be included in that figure if the Roxy is putting on a performance in its own space’. Well, the Roxy would.t be in business for long if they didn’t. pay their property taxes, upkeep their building, pay the hydro bill, etc., In other words, the rental rate should stay in the figure.

At eatingthegame at the Metro Studio, the crowd was estimated at 50. At $20 a ticket, that.s a revenue of $1000. So, if the troupe didn.t have to travel from Vancouver and got paid absolutely nothing for the performance and the rehearsals, the show would make $97.

At Macbeth at the Roxy, the crowd was estimated at 70. At an average of $35 a ticket (including student / senior discounts & flex passes), that.s a revenue of $2450. So, if the troupe got paid absolutely nothing for the performance and rehearsals, the show would make $1490.

eatingthegame was a one show deal at the Metro. The economics are ouch. Good thing it is a one man show.

Macbeth went on for 14 performances. $1490 * 14 is $20,860. The bad thing is you have to split that number between 10+ actors, choreographers, director, set designers, and so on. Let.s say to make a Macbeth happen, four weeks of labour for 20 people are necessary. That.s a very optimistic estimate. That.s 3200 man hours. Let.s say of that $20,860 profit, $5000 goes to materials: props, setting, costumes, and so on. That leaves $15,860. $15,860 divided by 3200 man hours equals a wage of $4.96 per hour. Ouch. No wonder in the economics of theatre there are sponsors but not investors.

I.m Edwin Wong and my heart goes out to all the brothers and sisters out there Doing Melpomene’s Work because from the economics, it looks like it.s a tough go.

Angela Hewitt Piano Masterclass

Victorians got a treat this morning: from 10 to noon, renonwned international superstar Angela Hewitt donated her time to host a piano masterclass at Christ Church Cathedral. Proceeds from the masterclass and the weekend concert go to the Godfrey Hewitt Memorial Scholarship Fund to encourage and develop organ players. Four lucky students got some expert advice in front of a crowd of 340 or so. Here.s the menu:

Some observations on the pieces. Chronological from Baroque (Bach) to Classical (Beethoven) to Romantic (Schumann) to maybe a counter-Romanticism (Brahms, but this piece is musically more forward than backwards looking with its undulating melodies). Musically, a span of two hundred years from early 1700s to late 1800s. Composer wise we have the three Bs with Schumann thrown in.

It was a lot more packed than I had thought, so I ended up sitting five or six rows further back than I like. You can sort of get a sense of where I am in this shot. Hewitt.s just wrapping things up here after the last student:

About ten rows back (with another 15′ space between the piano and the first row) and the balance between the direct sound and the reverberations tilts towards the latter. At this distance, you can also notice a slight delay from when they strike the keys to when the sound gets to you. Quite a bloom with the sound. Having played the instrument, I prefer the sound closer up with less reverberation. The piano is one of those instruments that just sounds so different depending on how far away you sit. It.d be interesting to ask performers if they change how they play depending on the size of the venue. The impression I got today was that in a large venue, you could probably use a lot less pedal because the reverberations will blend things together all on their own.

Some thoughts on the concert. What fun! The masterclass was in many ways more thrilling than going to a professional concert. You have four young students playing their hearts out, taking chances. That they aren.t used to the piano adds to the thrill and hazard. Some of them may have never played before so many people at such a cavernous venue. You can tell this was the case because Hewitt was exhorting them to ‘make sure the sound makes it right to the back door, the one way back there!’. It.s true: you have at your disposal not a spinet, not an upright, not a 5′ grand but a 9′ grand–make it sing! Even though the students are obviously less polished than a professional recital, there was never a dull moment in this fun filled two hours.

How the masterclass works is that each student get half an hour of the limelight. They play a ten to fifteen minute selection and the rest of the time Hewitt comments on what she.d like to hear, often jumping herself onto the piano to demonstrate. Her comments included, ‘I want to hear more depth in the sound, you know, I always think of a picture of Brahms over the keyboard like this [makes gesture] and you know, he was a very corpulent man so the sound must be just as corpulent’. Well, that idea of Brahms’ music being corpulent I think is now stuck in my mind forever, it hits the nail right on the head. Another time, she insists that the student ‘play with authority’ saying ‘think of Furtwangler conducting: that is how you move your hands over the keyboard’. Wow! Brilliant image. What an effective teacher!

Hewitt may be doing Terpsichore’s work today, but her tips can benefit those doing Melpomene’s work or really anytime anyone is engaged in performance. Which is all the time. Public speaking, making presentations, even communicating. Her pedagogy is: get the idea straight in your head. Think about it some. The idea can be a musical phrase. Or an emotion. It.s not good enough playing the notes. Think: ‘what do you want to say?’. Only when you have figured this out can you make the fingers play. Now, to get the idea out, sing along and sing out loud. As the students played or as she herself played, she would sing out loud: a crescendo would be sung and spoken out loud as ‘crescendo!’ and sforzandos would be ‘SFORZANDO NOW!’. And all the while gesticulating about. Now, not everything is transferable to other arts and disciplines. But some things are. Here they are dear readers: 1) figure out what you want to say, 2) after figuring out what to say, use whatever techniques you can muster to bring it out (singing, dancing, etc.,): it must COME ALIVE, 3) don.t be timid or shy: belt it out. Belting it out doesn.t just mean loud (though it can). Belting it out means playing with inner conviction. It must be your own interpretation and you must be proud of it, 4) you are in performance, not playing before yourself: make sure to captivate the audience! One of the students had a really introspective touch which actually I thought was very interesting: focus on the decay of the notes, soft and delicate grace. But Hewitt was right: you could lose the audience with this sort of approach. Save the introspective playing for late nights in the drawing room.

One thing that I also picked up on that I would like to share with you, diligent reader, is the art of criticism. What do you think would have the greatest impact, be the most constructive? Let.s say there.s a weak passage in the student.s playing. Would you say: ‘It.s falling apart’. Or would you say: ‘I want you to play more robustly’. Or if the emotion is lacking, would you say, ‘There.s no emotion’. Or would you say, ‘I need you to express yourself here’. I.d venture if you tell someone what you want rather than telling than how they.re lacking, you.d get better results. It.s really the same thing though, but psychologically by coming at it in terms of what you want, you.re approaching it from a more positive angle. This is something I can learn from Hewitt so I.m thankful for this lesson.

Another thing these concerts and plays are good for is just to practise the art of communicating with strangers. Small talk. Ever since I left work, I feel like I.ve been holed up a lot, just in my own company (which I don.t mind). But if you.re talking to yourself a lot of the time, you lose the art of communicating with others. Which is not a good thing. Back at Bayside Mechanical, I.d be on the phone a good deal of the day, or if not on the phone on emails or meeting people at site meeting and so on. And of course you.re also interacting with everyone in the office as well. There was lots of personal interactions. I.ve been trying to initiate ‘small talk’ with random people at these events. What I.ve learned is that as you walk by people, you have about a one or two second window to start the conversation. Once the window is past, it.s awkward to go back to start the conversation. But when the window is open, it.s easy. As for what to say, there are two approaches: ask something or convey something. I find that when I ask something (for example, ‘How did you enjoy the concert?’) what usually happens is a weird look and an awkward start to the conversation. But I find if I convey something (for example, ‘I really enjoyed the concert’) the other person pauses, smiles and responds and you can usually keep the conversation going. I think usually when people walk around, you glance up at them and no conversation starts. At best, a smile. But if at the second people exchange glances, you ask them something that initiates small talk, you catch them off guard. They.re flat footed because its sort of unexpected. But if you convey something, it.s also unexpected, but more natural in that you.ve already announced your position (ie ‘I really enjoyed that’).

So, as I was walking around after the show making small talk, two thing that emerged from the conversations: how wonderful Hewitt is and how we shall certainly be seeing more of Keaton Ollech, the young musician that played the Schumann piece with such poise. We are seeing the birth of a star. And that.s something you don.t get to see when you go to the professional concerts. I certainly agree. Right from the first note, you could feel the star power. But it.s hard to qualify just what it is. He just made it sound easy.

A big thank you to Christ Church Cathedral for the wonderful venue, Hewitt for the masterclass, and a round of applause for the four musicians: Laura Altenmueller, Elizabeth Clarke, Keaton Ollech, and Frances Armstrong. Until next time, I am Edwin Wong and I am Learning Melpomene’s Work by listening to Terpsichore in action! What a wonderful venue too, here.a parting shot. Just look at that Gothic rib vaulting! It.s beauty almost makes me lose sight of how all those bricks overhead probably aren.t a good idea on the San Andreas fault!

Christ Church Cathedral

Rules for Renegades by Comaford-Lynch

This book was sitting at the library in a little display on the second floor. There was a bunch of business and investing type books that the librarian must have assembled for display. During a writing break, the green and black cover caught my eye as well as the longish subtitle: Rules for Renegades: How to Make More Money, Rock Your Career, and Revel in Your Individuality. Wow, what more could you ask for than to make mega money, rock the career, and revel in individuality! And, it stood out being written by a woman as well, Christine Comaford-Lynch (the last name is as long as the subtitle!). Most of the other titles were by guys. Either they did not catch my fancy (Derek Foster.s titles, no thanks) or I had read them before (When Genius Failed, great book on the explosion called LTMC that resulted when you mix together nobel prize winners and 100:1 leverage). Well, flipping through it, it looked like it was a collection of stories from Comaford-Lynch.s experiences that allowed her to, well, make money, rock the career, and revel in individuality! I wasn.t looking for a self-help type book, but Rules for Renegades is also set up like a juicy tell all tale with stories of dating Bill Gates and Larry Ellison thrown in for fun. I decided to read it.

As diligent readers have come to expect, here.s an image of the title:

As well as the blurb from the back:

From high school drop-out, to monk, to multimillionaire, Christine has lived the Rules for Regnegades.

Wow, you don.t say?

You want a fabulous career. You want to succeed without sacrificing your personal life. Your path is different than mine, but I’m guessing we have things in common. I wrote this book for you. Signed, Christine Comaford-Lynch.

She wrote this for me? Awww, how kind!

Already from the back blurb you can see where Comaford-Lynch is coming from. The first thing I notice is a self-promotional bias. But that.s sort of offset because she.s put herself in the customer.s shoes,ie she.s self-promotional to gain your trust so that she can help you. So the self-promotion isn.t based on vanity but a desire to do something for others. Very clever. It strikes me that too often we don.t mention the advantages of our actions for their recipients. It takes a special mindset to be able to see the transaction from the other party.s perspective. And when one is able to convey to the other party that we are ‘thinking as if we are in his shoes’, there.s an opportunity to win trust, even during periods of intense negotiations.

Rules for Renegades is a business book–or really a collection of business anecdotes. But there.s something she shares with writers as well. And I want to share it with fellow writers because it.s so true:

An honest self-assessment based on answers to the questions above will help you determine if it’s time to be a quick-change artist. One of my friends, Walter, is a talented and prolific writer. He often moans about the publishing industry, about how it feels closed to newcomers, how first-time authors have such a slim chance of getting published. I asked him how he saw the industry and his position in it. He said, he sees the publishing industry as this enormous mansion, with manicured grounds. He’s not even working in the garden–he’s a farmhand way out on the South 40. The impressive entrance is barely visible from his distant field. As an indentured servant, he’ll never even get near the publishing mansion.

I blurted out, ‘But everything’s an illusion–so why not pick one that’s empowering?’. Walter asked how I, also new to the publishing scene, saw it. I said that to me the publishing world is a complex software system, and I am a talented hacker. Every day I make more progress navigating the system and getting closer to understanding how it works. It’s a cool adventure, and I know I’ll figure it out. Walter was silent for a moment, then said, ‘Wow. No wonder you have a terrific agent and a book deal’. He took this to heart. Walter is changing his self-image and illusions of the publishing world, an dI know one day soon he’ll sell his first novel.

‘Everything.s an illusion–so why not pick one that’s empowering’. That.s pretty good advice because it.s easy to lose confidence along the way. Just look at my recent blogs: in quite a few of them, the issues of a writer.s self-doubt crops up. Again and again. And the message from this book and the recently read Buffet Speaks is that self-doubt is a negative quality that successful people just don.t seem to have. ‘I.ve never doubted myself’, says Buffett (or something similar). What struck Comaford-Lynch about Bill Gates when they hit it off was his complete lack of self-doubt–he would frequently express surprise when she pointed out the risks: ‘What do you mean it.s risky?–of course it.s going to work. And work PERFECTLY’. If this point of view can be put into an aphorism, it.d go something like this: better to aim for the stars and miss than shoot for the gutter and hit.

There are those without self-doubt: Gates, Buffett, and probably Elon Musk. They are the world changing industrialists. There are those with too much self-doubt. A lot of writers fall into this category. Did you know the brilliant theorist Bakhtin used his manuscripts to roll cigarettes, such a low estimation he had of his writings (and no doubt being penniless). And then there are those in between. Perhaps yours truly falls into this category. Here.s my campfire story.

Back in the early 2000s, I was thinking about free will, fate, consciousness, and things like that. These are the things I like to think about. They are the sort of thing you can ponder while looking into the expanse of the sky at night. I was also reading Homer.s Iliad. The Iliad asks questions such as: is Achilles’ free although his death foretold, how ‘fated’ is it for Troy to fall, and so on. The idea occurred that fate and free will are not necessarily antithetical concepts. At least in literature. It could be conceptualized as a chess endgame. Endgames have certain properties which make them interesting. Players are free to move their pieces. But to a knowledgeable observe, the ending is already predetermined: either White or Black will win and this is known during an endgame scenario. In the endgame scenario, you could, therefore, see a harmony between fixed fate and free will working simultaneously. I wrote the article and sent it off to academic journals. I even mapped the final confrontation between Achilles and Hector (including the surprise twist when Hector realizes Deiphobus isn.t really there and Athene has duped him) onto a chess endgame. To do so involved going through hundreds of endgame scenarios to find an endgame where Black thinks he.s going to win by a power play in which he takes White.s queen. But by taking the queen, Black actually seals his own defeat.

Rejection after rejection. And since the refereeing process is anonymous, some mean rejections as well. ‘Don.t bother wasting our time’, ‘Give your head a shake’, and so on. Just poisonous. There must be some disgruntled academics out there. But anyway, I believed in myself. I don.t know how, but I thought the article deserved to be published. It was a simple workaround to a long standing debate. To go back to Rules for Renegades, I put on the illusion that I had something to offer. I was a hacker who would game the system. Eventually, that.s what I did. I noticed that the editor of Antichthon at the time, HT, also served as president of a national chess federation. I sent the manuscript to him. I got back a reply, ‘It needs some work but I like it. Make x,y,z revisions and we.ll go from there. And by the say, I enjoyed the chess analogy’. Bingo!!! ‘The Harmony of Fixed Fate and Free Will in the Iliad‘ came out in volume 36 (2002) of Antichthon: Journal of the Australian Society for Classical Studies.

The moral of the story? Oft-times nothing profits more than self-esteem grounded on just and right. Do something well, and believe in yourself. Instead of creating a mental structure biased to your limitations, create a mental structure biased for success. Instead of being burdened by the system, game the system to make the most of your chances. Carry on soldier, tomorrow.s another day.

To close out, Rules for Renegades offers a viable psychological strategy for success. Even if you.re already successful and there.s no shadows of self-doubt clouding the sun of your ambition, read it for the colourful anecdotes: the stories of Gates’ mom running his life with sticky notes posted all over his furnishings, how Ellison tried to show off to his date this new thing called the ‘internet’ and how it crashed… So, dear read, until next time, I am Edwin Wong and I am revelling in my individuality by Doing Melpomene.s Work. May you also make more money, rock your career, and revel in individuality! *mental note* in some future blog I should talk about the cult of individuality these days as opposed to looking at things from a communal perspective.

The Food Chain: Art, Society, Rousseau and Bonfires

I was hungry today and thinking about food. This got me to thinking about the food chain. It.s a hierarchy of who eats what and who eats who. So, things like plants are at the bottom. They get eaten. On the next level are the things that eat plants. Like rabbits. Then there are the things that eat the things that eat plants. Predators. Next up are the predators who are eaten by other predators. And on the top of the food chain, there.s those things who eat but don.t get eaten. The king of the jungle. An ecosystem can support a lot of plants and quite a few rabbits. As you move up the food chain, there are fewer and fewer specimens. That.s because so much production is required to sustain them. A visual analogy of the food chain would be a triangle. At the base is all the lush vegetation. And at the top is the lion king. So these are my thoughts on food. Since the other thing I think about is art, the question dawned on me: how much is required to support the writer-artist? Or for that matter, anyone involved in the arts: composers, musicians, painters, sculptors, and so on.

Writers require a lot of free time. Time to let the mind wander. So they.re not engaged in other productive activities. Well, Verdi was an exception. He was actually more a farmer than opera composer. But I think he alternated and was not doing both at the same time. In my own situation, I think about how many books I.ve read in order to produce one book. I.ve probably read thousands. So far I.ve produced one journal article and am working on the first book. The time spent reading a thousand books could have been diverted to many other useful tasks. In my former career in construction, let.s say in any given year I would work on a couple of seniors care facilities, a couple of restaurants, and a couple of condo buildings. For the sake of argument, let.s say a couple of hundred seniors have a new place to live and are happy, a couple of thousand diners enjoy delicious meals and are happy, and a hundred people move into their new homes and are happy. Not to mention all the happy real estate agents, hospitality staff, nurses, and other people who are happy to be working at these places. That.s a lot of happy folks! And then you would multiply this by the number of years I.m working.

But then I retired from work to pursue the dream of writing this book on theatre. To me, it.s important. But realistically, how many people are going to enjoy the book? To be sure, not as many people as the number of people who are living in their care homes, eating out, and buying new condos. And truth be told, the number could be an order of magnitude less. By moving up the food chain (moving up the food chain is defined as lowering the production:consumption ration) could it be that society loses out?

I.m reminded of Rousseau.s First Discourse on the Moral Effects of the Arts and Science:

Take Egypt, the first school of mankind, that ancient country, famous for its fertility under a brazen sky; the spot from which Sesostris once set out to conquer the world. Egypt became the mother of philosophy and the fine arts; soon she was conquered by Cambyses, and then successively by the Greeks, the Romans, the Arabs, and finally the Turks.

Take Greece, once peopled by heroes, who twice vanquished Asia. Letters, as yet in their infancy, had not corrupted the disposition of its inhabitants; but the progress of the sciences soon produced a dissoluteness of manners, and the imposition of the Macedonian yoke: from which time Greece, always learned, always voluptuous and always a slave, has experienced amid all its revolutions no more than a change of masters. Not all the eloquence of Demosthenes could breathe life into a body which luxury and the arts had once enervated.

It was not till the days of Ennius and Terence that Rome, founded by a shepherd, and made illustrious by peasants, began to degenerate. But after the appearance of an Ovid, a Catullus, a Martial, and the rest of those numerous obscene authors, whose very names are enough to put modesty to the blush, Rome, once the shrine of virtue, became the theatre of vice, a scorn among the nations, and an object of derision even to barbarians. Thus the capital of the world at length submitted to the yoke of slavery it had imposed on others, and the very day of its fall was the eve of that on which it conferred on one of its citizens the title of Arbiter of Good Taste.

What shall I say of that metropolis of the Eastern Empire, which, by its situation, seemed destined to be the capital of the world; that refuge of the arts and sciences, when they were banished from the rest of Europe, more perhaps by wisdom than barbarism? The most profligate debaucheries, the most abandoned villainies, the most atrocious crimes, plots, murders and assassinations form the warp and woof of the history of Constantinople. Such is the pure source from which have flowed to us the floods of knowledge on which the present age so prides itself.

Wow, art is bad!–look what happened to Egypt, Greece, Rome, and Constantinople! They were productive societies full of industry until the artists came along and ruined it all! I.m not sure I agree with the view of Demosthenes’ eloquence being a factor that could save Greece (I always have an impression he.s a bum) but other than that, Rousseau.s argument is interesting. Years later, the Florentine monk Savonarola years later would argue the same in bonfires of the vanities where priceless works of arts, cosmetics, books, and any other items of luxury would be gathered together and incinerated in the name of the common weal. I wonder: was Florence made a stronger place? And how would this be measured? Intuitively, I felt like I was more productive to society (but less satisfied personally) working in construction than being a writer. But how is this measured? By the heat of the fires?

I don.t have a way of measuring productivity, but Joyce did. At least Joyce did in Stoppard.s play: ‘And what did you do in the Great War, Mr. Joyce?’. ‘I wrote Ulysses. What did you do?’. Joyce.s response essentially turns the question back on its head. Dang, Joyce is one self-confident artist!

The Joyce quote never ceases to amaze me and it captures very much the power of positive thinking. I feel from talking to those around me that hey, it.s unusual to have hung up the gloves at the age of 39. Maybe I should be slaving away, doing some more. More buildings, more boots on the ground, going after more contracts, putting the shovel into the ground. But what would you do? If you had a choice, and you loved to be Doing Melpomene.s Work, would you do it at the risk of being less productive to society? I feel I.ve made the right choice. Some days, like today, I wonder though. Moments of weakness perhaps. Because until next time, I will be Doing Melpomene.s Work. Hopefully putting some more fire into my work and not more of my work into the fire!

Doing Melpomene's Work

Writing on the Greatest Show on Earth