Keep Your Powder Dry

Wednesday, Aug 21 2019 05:28 PM

Keep your powder dry.

Survivalists and military strategists will recognise this pithy maxim, thought to be said by Oliver Cromwell when he was addressing his troops for an invasion of Ireland (The full version is “Trust in God and keep your powder dry”).

The saying means to be prepared to take action, if necessary. This is common sense, a form of insurance, what we call ‘contingency planning’. Nobody knows what the future holds. In any complex situation, you come up with a plan to manage the resources under your control. But what can you do about the things you don’t know (‘known unknowns’ and ‘unknown unknowns’)?

Our motivation for this sombre message? Hong Kong (HK). The more-than-two-month-long protests in HK are a reminder of how quickly things can go wrong, even in rich, stable, generally well-governed economies.

A comparison with Singapore (SG) is instructive. Both HK and SG are small highly-developed city-states, are financial hubs, maintain low corporate-tax environments, have majority Chinese populations, and were British colonies.

Let’s start with some relevant statistics:




Population (million)



Land Area (km2)



Population Density (no of people per km2)



GDP per Capita (US$)



Now look at this screenshot from

The most dramatic differences are in the ‘Price Per Square Meter’ figures: HK is 1.64 times SG (city centre) and 2.04 times SG (outside city centre). The reason for these big differences: high demand and low supply of housing, according to CNBC.

The roots of the current protests in HK are many, but some of the long-standing ones — especially for young people without their own residential property — are the gruelling work hours, tiny homes, and some of the highest housing prices and rents in the world.

What the high cost of housing and the protests in HK are going to do is accelerate the influx of professionals, investors, and businesses into sister-state SG, the most obvious and natural alternative to HK. SG would naturally have been on the radar for anyone who understood the importance of a backup plan.

The name of the game is insurance — you always get an insurance policy, whether in life, work, or business. You forget Plan B to your detriment. Technology has simplified life but accelerated change and increased uncertainty. Things can go downhill very, very quickly.

The idiom “Hope for the best and prepare for the worst”, with its roots in several ancient philosophies, is still very much true today. A Chinese proverb goes “Better be a thousand times careful than once dead.” “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails”, said William Arthur Ward, a motivational speaker and author.

In the modern world, having a Plan B means legacy planning, diversification of assets / investments (especially gold, silver, cryptos), not putting all your eggs into one basket, offshore private vaults, etc, all according to your needs, wants and circumstances. In simple terms: you always plan with the future in mind; hold your money in different forms and in several jurisdictions; and ensure each location is secure yet accessible.

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  1. Country comparison Singapore vs Hong Kong | CountryEconomy,
  2. Cost of Living Comparison between Hong Kong and Singapore | Numbeo,
  3. Most Expensive Homes: Singapore vs Cities Around the World | Value Champion,
  4. Here’s why Hong Kong housing is so expensive | CNBC,
  5. Tiny Apartments and Punishing Work Hours: The Economic Roots of Hong Kong’s Protests | The New York Times,


Copyright © Vault@268 Pte Ltd   Author: Vinay Kumar Rai