Monday, December 23, 2019

Income & Expenses For Year 2019 - My Expenses Has Almost Tripled From 2015 to 2019

In just 1 weeks time, 2019 will come to an end and we will welcome a new year 2020. I have still been tracking my income and expenses on a monthly basis so I thought its good to do a self check on my financial health as the year comes to an end.

Over the years, my expenses have gone up as I decided to relax the tight budget which I used to keep back in 2015. In 2016, I wrote a post titled "The day I stopped tracking my daily expenses". Of course after that decision, my expenses started to go up and has almost tripled from 2015 to 2019.

Here's an overview of my expenses for the last 5 years:

In case you're wondering, in 2019, my expenses came up to be almost $23,000. I'm not sure if mine is considered high or low expenses in Singapore but to me this expense is still a manageable one. No matter what expenses we have, the most important thing is we do not spend more than we earn and still have savings for the future. For me, the higher expenses is a result of a conscious decision to spend more.

Does spending more money makes me happier? I think it actually does. I've felt less restrictive towards spending money than how I was 5 years back. I would eat out at restaurants more often, buy gifts for people more generously and go for more overseas trips etc. I managed to go Japan this year which is a place I've always wanted to go. Even though the cost is not low for a Japan trip, but still it was worth every cent.

However, due to my savings habit which I had since young, it was a struggle for me to increase my expenses initially. I was sort of constantly worried if I would be ok if I spend more but always at the end of the year when I do my financial health check, I would still have quite a substantial sum of savings. I always remind myself every year that its ok to spend a bit more to remind myself to live life to the fullest.

Having more income helps in this journey of increasing expenses while still accumulating savings for financial independence. I would honestly say I have worked harder this year than any other year after I changed jobs and taking on more projects and responsibilities in order to get better work performance which leads to higher pay and promotion. Unfortunately, it has lead to some health issues such as insomnia and migraine headaches which I had to see a neurologist recently and be on daily medication to control it for the time being.

Here's an overview of my income, other income and expenses:

Basic income comes from my full time job which I am currently in my third job now which I switched to back in Oct 2018. This has lead to higher basic income year after year. Other income has naturally dropped due to lesser time for this category because of the busyness of my full time job. Nevertheless, combined income has increase year after year due to higher basic income. I am still able to save more than half of my combined income as a result of this strategy.

I am still trying to increase my basic and other income as I feel there is still much room to grow. For basic income, I am targeting a promotion which hopefully I am able to get in 2020. This will bump up my basic income by a substantial percentage else the normal increment will be around 3%-4% only. For other income category, I'm planning to increase my investments in stocks further. It is not easy to spot good stocks which are at a good price to invest in at current market conditions. Hope 2020 will present some opportunities for investment.

Moving forward in 2020, I expect expenses to go up further as I prepare for my big day in year 2020. My new house will come in 2020 also. Its going to be a busy year ahead. I realised I did not make any new year resolutions in 2018 for year 2019 but well, I think life still went relatively well for the year.

Hope your year went well too and may a better year come for all of us in 2020. Merry Christmas and Happy new year to everyone!

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Sunday, December 15, 2019

6D5N Cruise on Royal Caribbean Quantum of the seas - Part 1

The year 2019 is coming to an end. I managed to go for another cruise holiday this time with Royal Caribbean's Quantum class ship, Quantum of the Seas. It is the first time this ship is home ported in Singapore until April 2020 next year and the ship will be here for another season probably starting end 2020 again. Previously, Royal Caribbean has its older fleet of ship in Singapore such as Voyager of the seas or Mariner of the seas.

Last year, I went for a shorter cruise trip on-board Genting Dream cruise and it was a really relaxing and good trip. You can read my previous post on my Genting Dream's cruise here. I liked the trip so much that this year I decided to go again with my family for a longer cruise trip on a different ship. Royal Caribbean cruise is more catered to those who like western offerings as the food, shows and activities are more towards western choices. Genting dream on the other hand is more catered to Asians. The 6D5N trip covers Port Klang (KL), Penang and Phuket. I will review the ship on all aspects in this post.

Day 1 - Embarkation day

On day 1, the ship was due to depart Marina Bay Cruise Centre at 5pm but we could get on the ship as early as 10am. I did all the check in online and my appointment was  scheduled at 10:30am. I reached the cruise terminal slightly before 10:30am and went straight to the departure gate.

There were people every where and it was quite a chaos but everything still went rather in order as they have lots of staff at the cruise terminal to direct the crowd. I was supposed to check in my luggage but somehow missed the luggage drop of point and ended up having to drag my luggage along all the way up the ship. Check in was rather fast, they just needed our set sail pass and passport and used their ipad to scan on our documents and off we go. They lead us to the waiting area where everyone is separated by colors to wait for our turn to board the ship. I waited about 1 hour then we were directed to board the ship.

Our room was not ready at 11:30am when we boarded the ship. It was only ready at 1pm so we went to Windjammer market place, which is a buffet area for lunch. There were plenty of seats at that time. Crowds started to come in after 12pm. The food offerings were good and food is always available as they refill it very fast when its left about 20%.

Balcony Stateroom

After lunch, we went to our room. For this cruise, I booked a balcony stateroom. The room was relatively big and it looks totally new and clean. They cleaned the room twice every day so it always looked fresh when we came back to our rooms. 

View from the balcony

Time to explore the ship

There are plenty of things to do on the ship. Quantum class ships are the 3rd largest fleet among Royal Caribbean's many ships. Quantum of the seas can fit a maximum of 4,905 passengers and is 348 meters in length compared to 3,840 passengers and 311 meters for Voyager of the seas. However, the ship doesn't feel really big as compared to the Genting Dream which I went to. 

Quantum of the seas just completed a multi million dollar refurbishment in Nov 2019 so everything in the ship looks very new and clean. The ship has a technology theme and the design inside is sleek and elegant, giving it the luxurious feel. 

Outdoor running track

Outdoor pool area

The North Star

Outdoor lounge area

Solarium pool

Bumper cars on a ship
Fine dining dinner on the ship every night

The dinner setting on this ship is fine dining every night. It consist of appetizers, entrees and desserts.  For Quantum of the Seas, instead of the usual Royal Caribbean main dining room, this ship has 4 dining rooms with the same restaurant. You can choose either traditional dining where you will be assigned 2 timeslots either 5:30pm or 8:30pm for dinner or the MyTime dining where you can reserve your own dining timeslot from 6:30pm to 9pm. I went for MyTime dining and booked my dinner timings on cruise planner 1 month before. I see long queues outside for those who did not make reservations so its advisable to book all your dining in advance. Here's the menu for the first night:

The menu changes every night which is a good thing. Food is good with occasional misses as sometimes the meat is too dry and hard. 80% of the time the food is great. Service is exceptional in the dining rooms and the waiters are friendly and try to make you feel at home. They try to assign you to the same waiters/waitress every night so you get personalised service. For my family, we were assigned the same waiters most of the time and they could remember us. 

Bay Scallop Gratin

Slow Roasted Prime Rib

Classic Fish & Chips

Hazelnut Chocolate Cake

Key Lime Pie

Apple Blossom A La Mode

Pear & Blueberry Cobbler
The food was exceptionally good for the first day. Everything we ordered was cooked to perfection. 

Day 2 - Port Klang, Kuala Lumpur Malaysia

On day 2, we reached Port Klang. It was a distance away from KL so we did not get off the ship but enjoyed the facilities on the ship itself. Buffet breakfast is provided everyday at Windjammer marketplace or Solarium Bistro. You can also opt for breakfast in the main dining room, order room service where continental breakfast is complimentary or go to Cafe@Two70 for small bites. 

The most relaxing place on Quantum of the Seas is the Solarium. It is an adult only pool area with hot tubs, a terrace pool and good views of the sea. It was quiet on day 2 morning when I went there as probably not many people know of the existence of this place yet. Solarium was open to suite guests only when the ship was sailing out of China. Its good that they decided to open to everyone when the ship came to Singapore. 

Starwater Show

In the evening, we went to watch the starwater show just before dinner at Jamie's Italian which is a specialty restaurant on the ship by celebrity chef Jamie Oliver. Starwater show has to be booked because there are limited seats available. I booked 2 days before my cruise date on the cruise planner to secure my slots. 

Starwater show is the anchor show on Quantum of the Seas so its a must watch if you're on this cruise. Its more of a technology show with robotic screens, great visuals, combined with singing and aerobics. However, I couldn't really appreciate the show as there is not much story line to the whole production. Genting Dream's voyage of a lovers dream production was much better in comparison.

Specialty dining at Jamie's Italian

After the show, we went to Jamie's Italian for dinner. It cost USD $40 per person to dine here on top of the cruise price which we already paid. The restaurant setting is casual with an Italian feel. 

Entrance to the restaurant

Inside the restaurant

Here's the menu of the restaurant and we could order anything we wanted with no limits:

For starters, we ordered the baked chestnut mushroom and the famous cured meat plank. The baked chestnut mushroom is really good with juicy mushrooms topped with mozzarella cheese and a crispy bread. It was quite a big portion, good for sharing. The cured meat plank was good too. I liked how the meat was seasoned and it tasted really fresh. Quite a unique dish which I have never tried before in this kind of presentation. 

Baked Chestnut Mushroom

Cured Meat Plank
For mains, we ordered 2 pastas, one pork and one lamb chops. 

The first starter is the famous prawn linguine. All their pasta are handmade fresh everyday so its guaranteed freshness. The prawns in this dish was very fresh too. The sauce was quite unique with some spiciness in it. I really liked their pasta. The springiness was really good and its different from the pastas I ate before at any other places.  
The famous prawn linguine

The next pasta is the truffle tagliatelle. Similarly, the pasta is really fresh and the sauce was good as well with good amount of truffle and cheese in it. If you like cream based pastas, this is the dish to try.

Truffle Tagliatelle
The next main we ordered is the slow roasted porchetta. This is a pork belly stuffed with garlic, chili and herbs. Its quite a unique dish and the pork belly was good if you liked some fattiness of it. However, the skin was too hard and it was impossible to cut it even with a knife so it was difficult to chew as well. Other than that, the pork belly is really juicy and tasted good!
Slow Roasted Porchetta
 The next main was the lamb chops. It tasted good just like other lamb chops I've ate before outside.
Lamb Chops
Overall, the dining at Jamie's Italian is good. If you were to choose to dine there, I would recommend going for the pastas as its really good as compared to the other dishes. Too bad my stomach couldn't fill in more if not I would have ordered more pastas to try. 

Lastly, its desserts. We ordered everything on the menu and it came on a plank. Presentation looked really good. Some of it were too sweet for me though. 

After dinner, there was another show to watch called sequins & feathers. This is a glitz and glamour musical and its quite worth to watch. 

That's the end of day 2. Will continue the rest of the days in part 2 of the post. 

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Sunday, December 8, 2019

Be The Last Sandwich Generation

There's a video which I came across from NTUC income that spoke about the many struggles we face especially those who need to start their own family and still have to provide for their parents. These people are the sandwich generation.

Here's the video:

Financial planning in a way is not just for ourselves but also for the good of our next generation. If we do not want to burden our next generation, the wise choice will be to plan properly for our finances. 

Unfortunately, life in Singapore will definitely get costlier over the years. Our next generation will be struggling for their own finances so we should not burden them with our retirement needs. As a working adult in Singapore where I am now planning to settle down, the financial planning part is indeed not easy as there are lots of cost to plan for. I'm fortunate that I started planning much earlier so I don't have to worry too much now nor do I need to take any loan for wedding or renovation needs. But for those who did not execute this well and take up lots of unnecessary loans, it will take a strain on their finances as well as the finances of their next generation. 

If you have kids now or planning to have kids, you may want to start planning for your finances early and make prudent financial decisions so that you will be the last sandwich generation. 

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Monday, November 4, 2019

Netlink NBN Trust - A Strong & Stable Investment

Netlink NBN Trust has gotten the attention of investors lately but I think its still early in its developments. I'm personally invested in this stock which I believed will do well in the next 2-3 years. They also just reported their financial results for Q2 and 1H FY2020 where we saw revenue and profit after tax increased by 5.3% and 17% respectively.

Background of Netlink NBN Trust

Netlink NBN Trust is not your typical limelight stock like REITs which owns properties where we can see the physical infrastructure. Netlink's infrastructure is hidden mostly underground where they are in the fibre business making money from every residential fibre connections, non residential fibre connections and non building access points (NBAP).

Fibre is an important aspect in our world today. I was once a telecommunication engineer and I saw the growth of the fibre business to a huge extent when 4G was deployed. In today's context where we need to transmit large data through telecommunication networks, the fibre business will definitely keep growing. When 5G comes, this growth will explode and that is where I think Netlink NBN Trust will benefit greatly.

How their business make money?

To know if Netlink Trust is a good investment, we need to first understand where they make their money from. Basically, they generate revenue from 2 primarily revenue streams:
  1. one-off installation and/or patching charges (as applicable) for each termination point (upon the initial connection) or service activation
  2. a monthly recurring connection charge
Basically, they make money through charging one off charge and also a monthly recurring charge. This means everyone with a fibre connection is renting the fibre from them by paying a monthly rental fee.

The largest part of their revenue comes from residential fibre connections. This means you and I are both contributing to Netlink's revenue as long as you have fibre at home. Netlink currently has 1.41 residential connections. The second largest of their revenue comes from non residential fibre connections. They have 46,742 non-residential connections currently.

Here's an overview of Netlink NBN Trust's revenue streams:

One thing to take note of is that the prices of fibre connections and the recurring fees are regulated by IMDA under the Regulated Asset Base (RAB) model. This is effective from Jan 2018. During the last review, IMDA has set fibre connection prices such that Netlink will make a 7% pre-tax return on its past capital investments based on the RAB model. These prices will be reviewed every 5 years so the next review will probably be in 2022.

The next growth segment

Fibre has a lot to grow as we consume more data and especially when Singapore is moving towards becoming a smart nation. Being a smart nation, large data will be transmitted everywhere which means more fibre connections will be required.

We will see more CCTV systems, weather monitoring systems, autonomous vehicles and many more such services which requires more fibre connections. This will fall under their non building access points (NBAP) which makes up only 1.9% of their revenue streams currently.

Let me get a little technical to explain why more fibre connections will be needed in the future. In wireless technology, there are various frequencies which are used to transmit data through telecommunication networks. They can operate in 900MHz, 1800MHz, 2100MHz, 2800MHz etc. The lower the frequency, the longer the distance which data can be transmitted but the bandwidth will be lower. With higher frequency, the bandwidth is greatly enhanced but the distance which data can be transmitted is much shorter.

For 3G, it mostly uses 2100MHz where data can be transmitted at quite high speed with good distance. For 2G, it mostly uses 900MHz where distance is very good but speed is very low. For 4G, 2800MHz is used where the speed is much higher but distance is short. This explains why our 2G coverage was much better as compared to 3G or even 4G. To overcome the distance problem due to using higher frequencies, Telcos have to build more mobile base stations to enhance the coverage and still provide the speed to customers. Every mobile base station will need to be connected to fibre connection points which generates more revenue for Netlink Trust.

For 5G, IMDA released a factsheet on 5G public consultation 2019 which shows what frequency 5G will operate in. The frequency spectrum identified are 3.5GHz (3500MHz), 26GHz (26000MHz) and 28GHz (28000MHz). 5G uses this technology called millimetre wave or “mmWave” bands which brings ultra high speed to us. 5G is able to support 20 times faster speed as compared to the current 4G and also has the ability to support large-scale machine-type communications which will propel Singapore into a smart nation.

Now, knowing that 5G will use much higher frequency, the distance covered will be much shorter so more mobile base stations will have to be built and these base stations will most probably be built lower to the ground on lamp posts and streets. As mentioned above, each mobile base station will need a fibre connection so we will likely see a huge increase in NBAP connections revenue for Netlink when 5G starts rolling out. This will be in the next 2-3 years.

Here's a good overview of the 5G network set up to show there will be more NBAP connections:

Adapted from:
The red antennas you see above are the possible 5G base stations which will be setup. All of these connections will require fibre connections which will benefit Netlink Trust greatly.

Q2 and 1H FY2020

Even before 5G comes, Netlink Trust is already delivering a good set of results for Q2 FY20. Residential connection increased 2% which most probably come from migration of cable users to fibre and also new residential buildings coming up in Singapore. If you've read the news, you would have saw that Starhub is stopping its cable service and migrating all their customers to fibre. This is good for Netlink Trust.

Distribution income (Dividends) increased by 3.3% QoQ with current yield of about 5.3%. Dividends is expected to be stable as they have a predictable recurring income stream. With the next growth segment coming up, I believe Netlink Trust will continue to do well. The downside will be that the government revised its pricing model downwards but that should not happen for the time being as the next review will be in 2022.

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