tag:blogger.com,1999:blog-32766881084563915592024-03-17T02:52:26.346+08:00SG Young InvestmentA journey into the world of finance and investments.
Learning how to manage money to achieve financial freedom.
Making Finance simple in a complicated worldSGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.comBlogger524125tag:blogger.com,1999:blog-3276688108456391559.post-42934311759762450792022-12-11T21:15:00.000+08:002022-12-11T21:15:06.347+08:00Do I Still Believe In Financial Freedom?In my younger days when I started this blog almost 10 years ago, I believed a lot in financial freedom and had the passion to live this out in my life through saving and investing. I was in my mid 20s back then. In 10 years, I've grown older and no longer too young anymore. Somehow, my views towards money have changed as I progress in life and I no longer focus so much on planning my finances anymore. The weird thing is I still believe a lot in financial planning but there is a fear in me that the plans don't work out. Life gets more stressful as I grow older and its no longer as simple as what I thought it would be. <div><br /></div><div><b><span style="font-size: large;">The different struggles for different income groups</span></b></div><div><br /></div><div><b><u>$2K-$3K income</u></b></div><div>Having conversions with my others makes matter worse. I've seen people struggling with finances. For those who have low income of $2K+ to $3K+, they are mostly living from paycheck to paycheck. If you're single and young its ok but those at my age or older are mostly married or have kids. Many of them are waiting for their pay to come in each month and some even have to rely on government subsidies to survive. Some have to take loan just to survive the month. </div><div><br /></div><div><b><u>$3K-$5K income</u></b></div><div>This is an income group where many middle class workers are in. $3K is probably too low but the median is around $4K-$5K to be sufficient. Singapore's median gross monthly income from work is $5,070 in 2022. This includes employer CPF contributions so the actual monthly income should be lower at about $4106. The take home pay is then $3285. For average (mean) gross monthly income, it is higher at $5832 (including employer CPF). Excluding employer CPF will be around $4732 and take home pay is $3779. If its only a single income supporting a household with 1 kid, this is barely enough. From my conversations with my peers, I've seen people who are earning $4K plus and still struggling with their finances. While most months they will have enough to live by, some month they will have to tighten their belts when they need a sum of money to replace faulty home appliances etc. Another thing to note is that the median and mean gross monthly income already includes commissions and bonuses so the actual basic gross income will be lower. </div><div><br /></div><div><b><u>$5K-$8K income</u></b></div><div>This is probably quite a big range and can make a difference between someone earning $5K vs someone earning $8K which is much more comfortable. However, I do notice a trend where people who earn more will generally spend more also either they buy a car, go for more overseas trip, upgrade to private property, eat out at restaurants more and generally have higher standards of lifestyle. This group of people will still think that money is not enough to maintain their standard of living and worry about retirement if they need to upkeep this lifestyle. </div><div><br /></div><div><b><u>$8K and above income</u></b></div><div>Those who earn above $8000 are in the top 20% of earners in Singapore based on the <a href="https://stats.mom.gov.sg/Pages/IncomeTimeSeries.aspx" target="_blank">statistics from MOM</a>. I know of a few peers in this category and they are fairly comfortable in life. However, because of current economic uncertainty, the fear of retrenchment for this group of people can be scary as they would probably be in higher management position and if they were to get retrenched, they will be worried if they cannot find a job easily as there are lesser higher management jobs available as compared to a middle management position. </div><div><br /></div><div><b><span style="font-size: large;">Do You Struggle in your finances?</span></b></div><div><br /></div><div>At every stage of life, we have something to worry about. I get depressed once in awhile when I compare myself to others and in Singapore, it seems like we can never earn enough. When we thought that we are comfortable, someone else seems to have a better life and somehow, the stress of keeping up strikes again. Someone would have a better house, better car, living a seemingly better life. While competition can be healthy sometimes to push ourselves to be better, its what makes us unhappy in life.</div><div>Do I still believe in financial freedom? I think its getting harder with the desired Singapore lifestyle and inflation going up. The struggles are real as a Singaporean. </div><div><br /></div><div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com3tag:blogger.com,1999:blog-3276688108456391559.post-15591265688078987582022-09-21T17:00:00.001+08:002022-09-21T17:00:00.219+08:00Picking Growth Stocks With Investor-One Portfolio<p>Growth stocks are good additions to our portfolio to boost our investment returns over the long term. Most of the stocks in our portfolio will be average or even loss making but there may be 1 or 2 super growth stocks in our portfolio which boost our returns significantly. </p><p>An example of a growth stock is Netflix which grew by 145x if you invested in 2003. $10,000 invested in 2003 would be worth $1.45 Million now. Its a long 19 years but still the returns are exceptional at average of 763% annually. Another growth stock, Tesla grew by 146x in 10 years from 2012 to 2022. $10,000 invested in 2012 would be worth $1.46 Million now. While these growth stocks would have given our wealth a significant boost, the issue is always how do we pick winning growth stocks?</p><p>For Singapore market, there are also growth stocks. An example is iFast which grew 8x in just 2 years from 2020 to 2022. $10,000 invested in 2020 would have grown to $80,000 in just 2 years. The price of iFast have since retreated down but the returns are still about 4x-5x. </p><p>Investor-One, a website by ShareInvestor, has a <a href="https://www.investor-one.com/portfolio#/" target="_blank">portfolio feature</a> where their research team manage a portfolio of stocks which are focused on growth. They select stocks based on a a set of fixed financial parameters as seen below:</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-3xX0BRjtuMkNDafBMxbdfRG4AEqJ8z1EC3gETU3Kyg-WHbaP07FrCxiHXco73YiXHKx57DU1zj7meS2OSus_SNgyM_aesYjzctarVMm7f3EdrROk4_EUA0-j9TE2u-yeqRfMCbprqqeYDTpod7AfJYJHDvUvAxPy-dPMWo-7Pqx6WPhbKFXIQOMaIw/s1233/investor%20one%20portfolio.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="255" data-original-width="1233" height="132" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-3xX0BRjtuMkNDafBMxbdfRG4AEqJ8z1EC3gETU3Kyg-WHbaP07FrCxiHXco73YiXHKx57DU1zj7meS2OSus_SNgyM_aesYjzctarVMm7f3EdrROk4_EUA0-j9TE2u-yeqRfMCbprqqeYDTpod7AfJYJHDvUvAxPy-dPMWo-7Pqx6WPhbKFXIQOMaIw/w640-h132/investor%20one%20portfolio.jpg" width="640" /></a></div><br /><p>These financial metrics seems reasonable to find undervalued companies which are not big market cap and with strong financial standings. Most of the companies which grew tremendously over the years had small market cap back then and they slowly grew to become big market cap companies such as Netflix. </p><p>On the <a href="https://www.investor-one.com/portfolio#/" target="_blank">Investor-One portfolio page</a>, you will be able to find stocks which are in their portfolio and their recent buys for this portfolio. This portfolio is managed by ShareInvestor's Investor-One team. You will be able to see their portfolio returns too. For each stock buy, the team has also put up notes to explain the rationale of buying the stock. One example of a buy for HRnetGroup is seen below:</p><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsB9LOEfqpiey13wktq39MCvNpo4ID71z74l5EzyXN0IO6fYe_aqhaZuEykpItbdQqyUb4bn9D2wmvtMOizuTz-lRAW-tZRlV49bztuS8cJkr_YgXBUpTwBDnHHxIi2gJn13Occ1g26Lt-SJj19d3jAuLJXQwULDesOEm5BccaI-NkUPJ1SVkmRoL1zw/s1353/investor%20one%20portfolio%202.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="739" data-original-width="1353" height="350" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsB9LOEfqpiey13wktq39MCvNpo4ID71z74l5EzyXN0IO6fYe_aqhaZuEykpItbdQqyUb4bn9D2wmvtMOizuTz-lRAW-tZRlV49bztuS8cJkr_YgXBUpTwBDnHHxIi2gJn13Occ1g26Lt-SJj19d3jAuLJXQwULDesOEm5BccaI-NkUPJ1SVkmRoL1zw/w640-h350/investor%20one%20portfolio%202.jpg" width="640" /></a></div>In the Investor-One portfolio, there are 7 stocks now. Some of the stocks are making money while some are in the red. This is part and parcel of investment and our view should always be for the long term and hope that the winners are more than the losers in the long run. I've learnt over the years that we can never be 100% correct for investments but some financial metrics will guide us to choose the right stocks. Buying companies which are overvalued is a sure way to lose money so its important to refer to some financial ratios such as Price to Earnings (PE) and Price to Book (PB) when choosing stocks to buy. While financial ratios may not be a full-proof way to make money, it does provide some guidance for us not to buy overvalued companies. <div><br /></div><div>When the market is red hot, it is best to stay out of it so knowing how to use financial ratios to evaluate our investments will stop us from being too greedy. While the stock market is not red hot now, the Singapore property market seems to be with many buyers rushing to buy private properties as new launches for condos get sold out in a matter of days. Even HDB prices are skyrocketing with more and more above </div><div>S$1 Million HDB being sold and buyers willing to fork out cash over valuation of $200K for a HDB which was sold for S$1.2 Million dollars just recently. Paying cash over valuation of 20% is like buying a stock 20% higher than it's PB. <br /><p></p><p>You can check out <a href="https://www.investor-one.com/portfolio#/" target="_blank">Investor-One portfolio page</a> which will be updated when there are new purchases and you'll be able to see how the portfolio performs over the years based on the above financial parameters. <br /> </p><p><i>This post is sponsored by ShareInvestor but all views are of my own</i></p></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-59278257916005025882022-08-28T21:54:00.000+08:002022-08-28T21:54:03.988+08:00The Ultimate Financial Independence Visualisation Tool<p>There's a saying that goes like this "If you fail to plan, you plan to fail". However, most of the time, you may be lost as to how to start your own financial planning to achieve financial independence (FI)? How do I even know how much income, expenses or investment return I must have in order to achieve FI? When is the age where I can finally say to my boss "I Quit"? </p><p>These are all relevant concerns which is why I created a financial independence visualisation tool which I use for my own financial planning also. I've made it easy to use so you can just input your age, income, current savings, expenses, target dividend yield, bonus, salary increment and emergency fund and the tool will calculate it all out for you. </p><p>Here's a screenshot of how the tool looks like in excel:</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlT2oycc1U-0DZhciZCqFYC9CKh2p-mSO3tNYemXtrce61R7qiJAeCOC3DY16wZBV8ZnUq00ew7fJooP2DFYBXW6rl70ihRmcDapo7UP5YjfZV60lFtWW7_U_N5SfIpxLM2fB6hktdYnWVB21KCZMeVsIVcMulLRTL_-pejeq-5TE04rJXEAbFdpDgCw/s1881/FI%20visualisation%20tool.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="723" data-original-width="1881" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlT2oycc1U-0DZhciZCqFYC9CKh2p-mSO3tNYemXtrce61R7qiJAeCOC3DY16wZBV8ZnUq00ew7fJooP2DFYBXW6rl70ihRmcDapo7UP5YjfZV60lFtWW7_U_N5SfIpxLM2fB6hktdYnWVB21KCZMeVsIVcMulLRTL_-pejeq-5TE04rJXEAbFdpDgCw/w640-h246/FI%20visualisation%20tool.jpg" width="640" /></a></div><div><br /></div><p></p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjymH3MsmWfxpspX9Z1bPZVGsi2FC7TiBSAydo9P4pvRJLYjGfjlkSRTG7nPuV6u0pbgy3urM54ZalCsqWjvrDnuyYhUP8NhEvqpLl3Dfim5LkBdQGi1EFbo0HYoovY-RUuZfDKRJZT1y7ZlqZs4YCCB9SQ4ddHY9T2b76jF3buFtd_PQJhi2anQsH91w/s1915/FI%20visualisation%20tool%202.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="745" data-original-width="1915" height="248" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjymH3MsmWfxpspX9Z1bPZVGsi2FC7TiBSAydo9P4pvRJLYjGfjlkSRTG7nPuV6u0pbgy3urM54ZalCsqWjvrDnuyYhUP8NhEvqpLl3Dfim5LkBdQGi1EFbo0HYoovY-RUuZfDKRJZT1y7ZlqZs4YCCB9SQ4ddHY9T2b76jF3buFtd_PQJhi2anQsH91w/w640-h248/FI%20visualisation%20tool%202.jpg" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><br /></div>I'm giving this tool for free for download so do read all the way to the end for the link to download the tool. <p></p>Visualisation is powerful where it can let us see where we are currently and where we will be in the future. With visualisation, we can adjust our parameters and achieve what we want for FI. This is like seeing light at the end of the tunnel instead of being blinded by darkness if we cannot visualise where we are going.<div><br /></div><div>For example, if you're thinking of achieving FI when you are in your 40s, how do you do it and does your current financial situation allows you to do it? By putting in your details in the spreadsheet, you will be able to see if the dividends you receive will exceed expenses by what age? </div><div><br /></div><div>Using the visualisation tool, a person at current age 30 with the below details will have his dividends exceed expenses at age 62 only:</div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVkspAWb4cPjk_XZKqI0S4IqOSczpdL_gtBrwmesxgzMaWf5x2nvWMTTo_sjOn-riZxZCngEDEoj-CWu7wSypRemiJ13xUIIIaljGClSyPisJWMktdrN_CE9tm5FHaL5RgbjN9JQsI-lEUWqwUACZy0AkFHYTXmjkPC00KRg7Vf3e0P-Gq1KmI5pqJuA/s612/FI%20visualisation%20tool%203.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="408" data-original-width="612" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVkspAWb4cPjk_XZKqI0S4IqOSczpdL_gtBrwmesxgzMaWf5x2nvWMTTo_sjOn-riZxZCngEDEoj-CWu7wSypRemiJ13xUIIIaljGClSyPisJWMktdrN_CE9tm5FHaL5RgbjN9JQsI-lEUWqwUACZy0AkFHYTXmjkPC00KRg7Vf3e0P-Gq1KmI5pqJuA/w400-h266/FI%20visualisation%20tool%203.jpg" width="400" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiNsciZ4uhcYGU2dLxCNC_F1ioi9gZrStg-J4J6GYjC58kCdibNbd5iCAzVGcxyyacaoveMDqQfvuFhCfmjtDZMoZm8EAFOky3ZND7Ae64tAkxBy8SSaypGAZiz7GIJ96tpTeNF_CdxPpHC-3KphSAR6t4J6QNAoMzB3jAJ5C29WdL_fQVxuKkfGruWg/s615/FI%20visualisation%20tool%204.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="250" data-original-width="615" height="260" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiNsciZ4uhcYGU2dLxCNC_F1ioi9gZrStg-J4J6GYjC58kCdibNbd5iCAzVGcxyyacaoveMDqQfvuFhCfmjtDZMoZm8EAFOky3ZND7Ae64tAkxBy8SSaypGAZiz7GIJ96tpTeNF_CdxPpHC-3KphSAR6t4J6QNAoMzB3jAJ5C29WdL_fQVxuKkfGruWg/w640-h260/FI%20visualisation%20tool%204.jpg" width="640" /></a></div><div><br /></div><br /><div>For networth, this is how it will grow for the same person:</div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgraCR76VHQZLLdcGJgTuZuuuhD9hgr9VJ5Fx_EHeQL3arQDPtVvtL1kmqnxWIiKNbHRQ32allQC3gVXYZWey-dTIjee1EBzV7CKj2neohz2Tx1G72JY53L8Iw8k3wP8Z1PEOFX8Z-16VicMx5TlLFSGiilhc9RpkbgQNamFM3e042gsxtOthlomZ3pKQ/s573/FI%20visualisation%20tool%205.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="500" data-original-width="573" height="349" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgraCR76VHQZLLdcGJgTuZuuuhD9hgr9VJ5Fx_EHeQL3arQDPtVvtL1kmqnxWIiKNbHRQ32allQC3gVXYZWey-dTIjee1EBzV7CKj2neohz2Tx1G72JY53L8Iw8k3wP8Z1PEOFX8Z-16VicMx5TlLFSGiilhc9RpkbgQNamFM3e042gsxtOthlomZ3pKQ/w400-h349/FI%20visualisation%20tool%205.jpg" width="400" /></a></div><br /><div>To recap, for this person, his dividends received will exceed his expenses only at the age of 62 with a networth of almost $2.2 million. This is considering he only had a $2500 monthly expenses in his 30s. Dividends he will receive annually is $91,627 while his expenses will be $90,128. That's an expenses of average $7500 per month which has increased about 2.6x in 32 years just based on an inflation rate of 3%. That's the impact of inflation it has on our lives so we must factor this in our financial planning. We will definitely need more money in the future as cost of living continues to go up.</div><div><br /></div><div>We assume the person above consistently invests 85% of his networth at 5% investment return and he will have $2.2 million at age 62. What if this same person does not invest at all? How much will he have when he's 62? The answer is $1.1 million, half of what he would have. This is the power of compound interest through investing. In the visualisation tool, it assumes that dividends received are reinvested back so it still acts like compound interest overtime. </div><div><br /></div><div>The tool may not be perfect but it would be the closest to what we can have to visualise our financial future. Feel free to try it and adjust the parameters and formulas to suit your needs if you feel its not too accurate for you. </div><div><br /></div><div>You can download the tool <a href="https://dl.orangedox.com/GhAlvvkxAR93HW6kNd" target="_blank">here</a> and try it for free now. </div><div><br /></div><div>Hope this helps in your financial planning!</div><div><br /></div><div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-29002828555678123322022-08-26T23:29:00.004+08:002022-08-26T23:29:57.752+08:00Work can be frustrating and that's why the need for financial independence<p>Recently, I've been feeling frustrated with work and it's really bad for health. Getting blamed for mistakes, getting scolded and being thrown lots of workload are part and parcel of the working life. Sometimes, missing deadlines is not entirely controllable as there are many factors which can happen and having to go through multiple approvals and stakeholders can delay the whole process. Not everyone is cooperative and in the end most people will protect themselves first. I've worked in 3 companies now and all have its good and bad points. The verdict is whichever company you join, there are bound to be unhappy times and times of frustration and stress. At the end of the day, most people are just working for money to put food on the table and pay the bills. </p><p>Sometimes I wonder is it because I take work too seriously and get affected when I make mistakes. I blame myself a lot and keep repeating in my mind why did I even allow it to happen. While on the other hand I also see people who are nonchalant about their work attitude and can get away doing little work by acting blur. These people survive the longest in the company. </p><p>Nevertheless, this is why it's important to achieve financial independence because you are able to be in control of your happiness and health by calling it quits when it becomes unbearable. There are more young people who are in fact doing this now where there's a term called the great resignation where many resign without a job. Many people are also suffering health problems and burn out as we progress as a nation. Unfortunately, the push for productivity may end up causing many to suffer considerable side effects on their health. </p><p>Will we end up like Japan where their citizens can work non stop and even to the extend of death by working? I think as society progresses, it gets increasingly difficult especially for Singapore where we have no natural resources. We can only depend on ourselves in order not to work to our deaths. I've already seen some colleagues who passed away while they were still employed by the company due to certain illness. They didn't get to retire at all. </p><p>While I still cannot call it quits when work gets frustrating, I hope one day I can finally say I do not have to work for money and really do the work which I enjoy and not having to be frustrated and still suck it up. </p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com4tag:blogger.com,1999:blog-3276688108456391559.post-24926319477621115842022-08-21T00:14:00.004+08:002022-08-21T08:46:35.640+08:00Financial Independence, Retire Early (FIRE) Movement<p>CNA came out with an article on Financial Independence, Retire Early (FIRE) and the writer really captured the gist of what financial independence is about. In fact, this is the first time I've seen such a good article from main stream media talking about financial independence. You can read the article <a href="https://www.channelnewsasia.com/singapore/fire-movement-financial-independence-retire-early-2881076" target="_blank">here</a>. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguiyWMwGwrQ_D5sW9iVwzfRtCjvnNarxFd0InhjznIZZxKJFHRks6_idG3D6lIxyALm7XxU2ZB1O6E9NRLC4uTOir9ZPwBdRMhZjm9OClVZVg0WqxkCQIHnd2-t-rLDHAu1fQHs5Yce2b6ARAlMyZgvisK4s83sIOdop7ZfN5MOvlvLCeOCADp57U1vw/s1127/FIRE.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="673" data-original-width="1127" height="382" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguiyWMwGwrQ_D5sW9iVwzfRtCjvnNarxFd0InhjznIZZxKJFHRks6_idG3D6lIxyALm7XxU2ZB1O6E9NRLC4uTOir9ZPwBdRMhZjm9OClVZVg0WqxkCQIHnd2-t-rLDHAu1fQHs5Yce2b6ARAlMyZgvisK4s83sIOdop7ZfN5MOvlvLCeOCADp57U1vw/w640-h382/FIRE.jpg" width="640" /></a></div><div class="separator" style="clear: both; text-align: center;"><i><span style="font-size: x-small;">Image adapted from https://teenfinancialfreedom.com/</span></i></div><p><b><span style="font-size: large;">Financial advice from main stream media?</span></b></p><p>In the past, most financial advice from main stream media often comes from financial advisors or experts but are often not so relatable to the people on the street. Most advice will tell you to save certain amount and draw down that amount when you retire. For example, a typical advice will ask you how much you need per month during retirement (eg $5000) then you'll need to save $xx amount so that it can last you for xx number of years. If you save up $1 Million dollars, $5000 per month during retirement will only last you 16 years ($1 Million divided by $60,000/year). If you retire at 65, this $1 Million will last you till you're 81. </p><p>With articles on FIRE coming out from main stream media like CNA, it goes to show the younger generation of journalist have been brought up differently and are exposed to other forms of financial advice other than from experts alone. This is encouraging as more young people are taking charge of their own finances and are finally seeing the light to the real financial independence. </p><p><b><span style="font-size: large;">Financial Independence, Retire Early (FIRE) movement</span></b></p><p>The Financial Independence, Retire Early (FIRE) movement is different. This started to get more popular through the financial blogging community where a group of us were so called obsessed with saving enough to retire early. I was one of them back then when I started this blog in 2013. Its been 9 years of blogging journey and more than 10 years of pursuing financial independence for me. I was impacted by other bloggers who have been blogging for a few years and in fact, most of them have already achieved financial independence by the time I read their blog. A few of them were in their 40s and have accumulated millions and put their money to work over many years to achieve the financial independence they were able to enjoy. Although I don't write as much now, I'm still quite active in managing my own finances and still putting my money to work through investing. I've not given up on this journey and in fact I'm glad I started it early. </p><p>Achieving financial independence is defined as "the status of having enough income or wealth sufficient to pay one's living expenses for the rest of one's life without having to be employed or dependent on others." This definition I extracted it from Wikipedia. It accurately describes what FI is all about. The income to pay one's living expenses is often from dividends from stocks, rental from property, annuity plans (eg CPF life) etc. The key is this income must be passive. This is the method which I subscribe to as compared to traditional advise of asking you to save and then draw down your savings during old age. Drawing down your savings is also a form of retirement plan but you'll soon realise that many people face the problem of not enough money in their old age and have to go back to the workforce again even when they are in their 70s. Remember, $1 Million dollars can only last you 16 years if you draw down $5000 per month. That's not a lot of years to be honest for retirement. </p><p><b><span style="font-size: large;">Is it possible to retire early?</span></b></p><p>The FIRE movement has financial independence but also has retire early in its description. If you want to retire early, having the plan to draw down your savings when you retire is a definite failure. It won't work at all because your numbers of years to live will be quite long. For example if you retire at 50 and live till the age of 80, that's 30 years of life! If you spend $5000 per month for 30 years, that's a total sum of $1.8 Million dollars! Don't forget, inflation will still continue to happen for that 30 years and even at 3% inflation, $5000 will only be worth $2500 in 24 years. This is because at 3% inflation, your same plate of chicken rice at $4 will probably cost $8 in 24 years. If you think this is unlikely, look at how much the same plate of chicken rice was about 20 years ago? The answer is $2 and it has doubled to $4 now in 20 years or probably lesser as what we've experienced. </p><p><b>If you have passive income in the from of dividends or rental income, that income will increase over the years.</b> Why is this so? Think about it, rental income has definitely increased over the years. I found from HDB website that the rental rates of a typical 4 room flat is about $2000-$2400 in 2022 while the rental rates was $1300-$1500 back in 2007 which is 15 years ago. This is a 50%-60% which is about 3%-4% increase per year which just nice covers inflation. </p><p><b>If you have passive income from dividends, the income also will increase over the years.</b> That's if you pick the right stocks with growing dividends or what we call distribution per unit (DPU). Let's take a look at one dividend stock in Singapore which is Frasers Centrepoint trust. Its dividend in 2007 was only 0.066 cents per share and in 2021, its dividend is 0.12 cents. That's a whopping 82% increase over 14 years which is an increase of about 5.8% per year. That's even higher than the rental income growth from a HDB property. Although there's a significant drop in DPU in 2020, it has mostly recovered back and is on track to grow even more beyond 2022. Not only that, FCT share price has also increased from 1.29 during its IPO in 2007 to 2.32 now which is a 80% increase. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEic4JttSkRrkmgTwWgXnxZqD84dAkGlmubcloxz8INbOwWL6LoRToKs57nuBOwn8mFSEWJXkSvXlsJc4PpCwnPdXbtd6n5J8w6LGdlluz6FGE_ZlffS9ejpRsLpPQHlLy48jRD0IEp8LqYZIFu6RkcJm2mpqWM3xs1JO6QL9kvxsPhSLHT-zgIXLdz2gw/s451/FCT%20dividend%20history.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="370" data-original-width="451" height="526" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEic4JttSkRrkmgTwWgXnxZqD84dAkGlmubcloxz8INbOwWL6LoRToKs57nuBOwn8mFSEWJXkSvXlsJc4PpCwnPdXbtd6n5J8w6LGdlluz6FGE_ZlffS9ejpRsLpPQHlLy48jRD0IEp8LqYZIFu6RkcJm2mpqWM3xs1JO6QL9kvxsPhSLHT-zgIXLdz2gw/w640-h526/FCT%20dividend%20history.jpg" width="640" /></a></div><br /><p><b><span style="font-size: large;">Is extreme savings needed to achieve FIRE?</span></b></p><p>Now comes the question, how do we achieve FIRE? Do we need to embark on a campaign of extreme savings to achieve what we want? In 2014, I wrote an article on <a href="https://sgyounginvestment.blogspot.com/2014/10/why-extreme-savings-is-more-powerful.html" target="_blank">"Why extreme savings is more powerful than investing"</a>. I was much focused on saving as much as possible back then and would scrimp and save even on food and drinks. I was brought up in an environment where money was hard to earn and saving as much money for rainy days is important. As I grow older, I begin to realise the importance of balancing saving vs spending. Its about setting a plan on not too much savings as well as not too much spending but still being able to achieve your financial goals. As I continue to invest my money and my dividends from stocks continue to grow, I'm able to spend more and still can achieve financial independence around the age of 47 which is 12 years from now. That's the goal I set for myself. This is the balance I seek where I don't achieve FI that early but don't have to scrimp and save every dollar I have. </p><p>I've also seen some people embark on Barista FIRE where instead of having enough passive income to support your lifestyle, you have the passive income to cover your basic needs and work part time to cover the rest. This can be called a semi retirement where you retire from full time job and work part time doing the things you like. </p><p><b><span style="font-size: large;">Enjoy the journey</span></b></p><p><span>A financial independence journey is often a long one so its important to enjoy the journey along the way. There are certainly some sacrifices to be made to save enough but its important to also balance and enjoy sometimes. </span></p><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-39684647226423294962022-08-04T17:00:00.001+08:002022-08-04T17:00:00.231+08:00INVEST Fair 2022 - Investing in this Borderless Era<p>With physical events coming back after COVID, INVEST Fair 2022 by ShareInvestor is also back with their physical event on 27 August 2022 at Suntec Exhibition Hall 404. It is good to have such physical events where we can immerse ourselves with all the knowledge we can get and concentrate on what the speakers have to say. It is still quite different from virtual talks where we often get distracted at home. </p><p>I enjoy physical seminars as I really can concentrate and focus my attention for that few hours when I'm there. I've tried attending virtual seminars and it is definitely not the same experience. INVEST Fair is one of the few events which I like to attend and another of my favourite is the REITs Symposium. Both have good speakers which I can learn from even at this stage of investing for more than 10 years now. </p><p>This is the 15th year that INVEST Fair has been held. I remembered I attended my first INVEST Fair back when I first started investing in my early 20s probably 12 years ago. Looking back, INVEST Fair was fairly new back then. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://notice.shareinvestor.com/email/2022_IFSG/Materials/SGYoungInvestment-300x250.gif" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="250" data-original-width="300" height="333" src="https://notice.shareinvestor.com/email/2022_IFSG/Materials/SGYoungInvestment-300x250.gif" width="400" /></a></div><br /><p><br /></p><p><span style="font-size: large;"><b>Highlights of INVEST Fair 2022</b></span></p><p>For this year, INVEST Fair will focus on 3 special features:</p><p></p><ol style="text-align: left;"><li>Public Listed Companies Engagement</li><li>Insights from industry veterans</li><li>Different investing strategies</li></ol><div><b><u>Property Investing</u></b></div><div>There are many topics to choose from ranging from macroeconomics to investing and trading. There is even a talk on property where the head of research of Knight Frank Singapore will share about the wealth report and luxury homes in Singapore. With property prices at sky high prices now, will property prices continue to rise? In the area of luxury homes, will we see more of such properties due to the rise in high net worth individuals? It is interesting to note that the number of global Ultra High Net Worth Individuals grew by 9.3% in 2021, up from 2.4% in 2020 and Singapore is predicted to witness a 268% growth in its Ultra High Net Worth Individuals (UHNWIs) population to around 6,000 individuals by 2026.</div><div><br /></div><div><b><u>Stocks Investing</u></b></div><div>In the area of investing, its not been an easy time for most investors as stock prices come down and investors are seeing losses in their investment portfolio. Topics such as "Picking Winning Shares For All Economic Conditions" by David Kuo, Co-Founder of The Smart Investor will be interesting for investors who want to know how to navigate the impact of rising inflation and interest rates on our investments. During the past many years, we've enjoyed falling interest rates and surging government spend where this propelled property and bond prices alike. That was the era of "free" or easy money where we had multiple rounds of quantitative easing (QE) which is essentially the printing of more money and low interest rates enabled ordinary people to borrow more money. The head of research of Phillip Securities research will share on "Investing in inflationary times" where he will focus on the macro framework for investors to pivot to. </div><div><br /></div><div>There will also be a panel discussion on "Investing in Uncertain Times" where this would be interesting to know from experts on how to invest under the current economic conditions. There are many other topics on stocks investing which you can check out on INVEST Fair 2022 website <a href="https://rebrand.ly/SGYoungInv" target="_blank">here</a>. </div><div><br /></div><div><b><u>Stocks/Options Trading</u></b></div><div>Finally, there are also topics on options trading where the Chief Investment Officer of Tiger Brokers Singapore will share on "Options Investment Strategy".</div><div><br /></div><div><div>Shanison Lin, Founder & CEO of InvestingNote will also share on the topic of "Level Up Your Experience in Trading" where we can learn some trading tips from him if you're a trader or interested to learn about trading. </div></div><div><br /></div><div><b><span style="font-size: large;">Register for Free for INVEST Fair 2022</span></b></div><div>The list of speakers and topics are still in the progress of finalization and there will be more added closer to date. This event is free for all to attend and you may register <a href="https://rebrand.ly/SGYoungInv" target="_blank">here</a> on their website. </div><div><br /></div><div>Event details:</div><div><div>27 Aug 2022 9am to 6pm</div><div>Suntec Exhibition Hall 404</div></div><p></p><p><i>This post is sponsored by ShareInvestor but all views are of my own</i></p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-35686533282706272742022-07-29T08:24:00.001+08:002022-07-29T08:24:55.414+08:00Beware of investing in bonds during rising interest rates environment?<p>Bond yields have increased significantly the past few months as central banks all over the world are raising interest rates. Banks are now offering fixed deposit rates at more than 2% again and another attractive investment which people see are bonds where the yield has increased significantly. The SGS bonds, which are issued by the Singapore government has yields of close to <b>3%</b> for its 2, 5, 10, 20 and 30 years bond. This is 3x more than then average of 1% just 1 year ago. </p><p>Looking at the chart below of a 5 and 10 year SGS bond, we can see that the yield has increased significantly from 2020 to now which corresponds to the increase in interest rates around the world. Is this a good time to invest into bonds now? </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyNd6LHRgAZHmqcBNeU3ySSLkO2qwUwKMbjpzRCaLgxtqa6yJ6RQtHYVYH8ljRSHuvSb6JTZXwW52FKuCGG_y0KWNprojkIHa5KoZfWvkM_PoIdYGGhCN-gqmvpk4y5p1cUwvoUwqTCB5jL9GNHLAw1eHo14MarHKJTJ4hNZFKPIg79XXKGfmjtxa0Sw/s881/bod%20yield%20trend%202020-2022.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="525" data-original-width="881" height="382" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyNd6LHRgAZHmqcBNeU3ySSLkO2qwUwKMbjpzRCaLgxtqa6yJ6RQtHYVYH8ljRSHuvSb6JTZXwW52FKuCGG_y0KWNprojkIHa5KoZfWvkM_PoIdYGGhCN-gqmvpk4y5p1cUwvoUwqTCB5jL9GNHLAw1eHo14MarHKJTJ4hNZFKPIg79XXKGfmjtxa0Sw/w640-h382/bod%20yield%20trend%202020-2022.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><i>5 and 10 year SGS Bond Yield 2019-2022</i></td></tr></tbody></table><p>Unfortunately, bonds can be the worse to invest during rising interest rates environment. When you invest into a bond, the yield (coupon) you get is fixed. For example if you invest in a bond with yield of 3% now, this 3% will be given to you regardless if interest rates continue to increase later. The most scary thing is when interest rates continue to increase later, bond prices will drop where you will see a loss in your investment portfolio. When bond yield increases, bond prices will drop as it is inversely correlated. This is evident as seen in the chart below where interest rates rose from 2020 to 2022 while bond prices started to drop from 2020 onwards. </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIFzi0bG-4Y3kz7-_VpSmtSMB00bHYftLYkQ-LBl3KzzrYGUYrKv83Nqie_u2jh_T9sS4hFtE7vArUBwlb04Ddi0iZDuAoPKzppXx6HhHlEQGOmYloP8g_48K5HNxfdQws7V275r6YBz_ZZMFb3YsAfPQLGrrfBprC0GR7zp4GE97XVzGhyUPITNFCpQ/s920/bond%20price%20trend%202020-2022.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="576" data-original-width="920" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiIFzi0bG-4Y3kz7-_VpSmtSMB00bHYftLYkQ-LBl3KzzrYGUYrKv83Nqie_u2jh_T9sS4hFtE7vArUBwlb04Ddi0iZDuAoPKzppXx6HhHlEQGOmYloP8g_48K5HNxfdQws7V275r6YBz_ZZMFb3YsAfPQLGrrfBprC0GR7zp4GE97XVzGhyUPITNFCpQ/w640-h400/bond%20price%20trend%202020-2022.jpg" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><i>5 and 10 year SGS bond price 2019-2022</i></td></tr></tbody></table><p>If you're planning to sell your bond in the short term, it wouldn't be advisable to invest in bonds now as the US is expected to increase interest rates even more for the rest of this year as what the Fed has announced recently. The Fed just raised another 75 basis points on 28 Jul 22 and has announced that another unusually large hike may come in September 22. This will cause bond yield to go up even more and bond prices to come down significantly. </p><p>If you're planning to hold the bond for long term and are buying 5, 10, 20 or 30 years bonds, then it may be a good choice as you get to lock in higher interest rates now and by the time you redeem the bond more than 5 years later, bond prices may have even risen significantly due to interest rates are low again 5 years later. That being said, nobody will be able to predict how long interest rates will stay high or when interest rates will come down. </p><p>Bond prices are trading at below 100 now which is lower than its face value and may represent an opportunity for the long term. Once interest rates stabilise and start to fall again, bond prices will go back up to 100 or even above 100 and at that time, investors who bought the bond below its face value will continue to enjoy the locked in high interest rate plus the capital gains from the bond price increase. This is if you're buying a long term bond and willing to hold on to the bond till its value goes back to par. </p><p>Rising interest rates present quite a lot of opportunities for savers who have cash on hand to invest in high yielding safe assets. If we know how to take advantage of the opportunities which is presented to us, we will end up better in life in the future. </p><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com2tag:blogger.com,1999:blog-3276688108456391559.post-61510644681747397862022-07-14T08:07:00.006+08:002022-07-14T08:07:41.639+08:00Is a Recession Coming? <p>Just as we thought all is well after COVID and economies around the world start to recover, we are hearing the word recession now. Is this really happening just as we went thorough 2 years of COVID where recession just happened?</p><p>Recession just happened during COVID where jobs were lost which led to unemployment going up. Singapore's GDP growth rate became negative in the period of March to June 2020. We would remember that many people lost their jobs, salaries were cut and it was a painful period. Fast forward 2 years later, we are seeing another phenomenon. Inflation went up a lot due to supply chain shocks caused by the Russian Ukraine war. In fact, US inflation rose to 9.1% in June 2022 which is the highest increase in 40 years since the 1980s. </p><p>Inflation is a tricky situation to deal with. With prices increasing, wages need to keep up if not in the long run, the people in the country will suffer with real wage growth stagnating. Real wage growth is the increase in wages minus inflation growth. If the increase in wages is 3% and inflation is also 3%, then real wage growth is 0%. In essence, our wage did not go up at all considering inflation is the same increase. This is true because if our wages don't keep up with inflation, we will feel the impact of the rising cost of living and will be unhappy. </p><p>As workers expect higher wage growth, companies will feel the cost pressure as they also increase the salary of their workers to keep up with market competition. You can see that in Singapore, the public service is leading by example by adjusting salaries to keep up with inflation. Private companies will also start to adjust their salaries so that they can attract and retain talents. As companies face the cost pressure of workers salaries increase, they will adjust the price of their goods and this in turn will affect consumers in the form of higher prices of goods we buy or consume. Coupled with increased prices all over the world due to the Ukraine war etc, we have a situation of huge inflation growth we see now and may even go higher in the next couple of months. </p><p>Now, governments all over the world know this is not sustainable so they will come in and use their monetary policy tools to stabilise the situation. Most countries have an interest rate policy where they increase interest rates to combat high inflation. By increasing interest rates, it becomes harder for individuals and companies to borrow and thus reduce consumption and demand as a whole. This slows down growth and if not done properly, will trigger a recession event where companies start to retrench staff. We have seen this happening in many prominent companies such as Shopee, Tesla and even Google is slowing hiring. Many tech companies such as Shopee rely on investors funds and debt to fund their operations as they are primarily loss making and in expansion mode. With interest rates so high, it doesn't make sense to borrow so much now and thus they are slowing down their operations and keeping cost low. </p><p>We might see a recession coming and jobs might be loss again. If interest rates keep rising and shows no sign of slowing down, we might be hit even harder as borrowers default on their loans if they are unable to pay the higher amount of installment due to higher interest rates. Good news is for the general public who do not have too much loans, we should see prices coming down thereafter. Let's see how the situation evolves as we live in unprecedented times now. </p><p><br /></p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com6tag:blogger.com,1999:blog-3276688108456391559.post-46538979528611380192022-05-16T22:38:00.000+08:002022-05-16T22:38:02.218+08:00How Will Our Lives Be Impacted In The Face Of Rising Interest RatesThere has been lots of new stuff happening since my last blog post back in December 2021. A few months back, Singapore started opening up and relaxing measures for COVID-19. It seems life is mostly back to normal now. While we were just starting to enjoy this good news after 2 years of abnormal life during covid, new things start unfolding which is starting to impact our lives and may impact us even further. <div><br /></div><div>Firstly, the Ukraine-Russian war started. This caused oil prices to skyrocket impacting petrol prices immediately. If you own a car, the impact is felt with petrol prices at more than $3 a litre. Ukraine is one of the largest exporter of many items such as wheat and seed oil like sunflower oil. This impacted daily living also as what we are beginning to experience. Edible oil prices have increased which even cause hawkers to have no choice but to increase their prices for the food they sell. I personally have experienced food prices increasing by 70 cents to $1 for every plate of food. Groceries items in the supermarket have increased as well. Indonesia also recently banned all exports of palm oil which skyrocketed the global palm oil price. Palm oil is used for food manufacturing and it is in close to 50% of the packaged products we find in supermarkets, everything from pizza, doughnuts and chocolate, to deodorant, shampoo, toothpaste and lipstick. We should see prices continue to increase in the months ahead. </div><div><br /></div><div>Secondly, because of the risk of high inflation due to higher prices, central banks all around the world are increasing their interest rates to slow down inflation. This is to prevent prices from going too high and making the economy unstable and at risk of a recession. Singapore do not have an interest rate policy so we are a taker of interest rate and will be affected by this by a great extent. Already, we are seeing interest rates for mortgage loans going up from as low as 1% 1 to 2 years ago to 1.3%-1.5% now for floating rate. For fixed rates, it has increased even more to 1.80% for a 5 years fixed rate from DBS. This shows that banks are forecasting that interest rates will continue to increase so they are not keen to price fixed rates loans at low rates anymore. </div><div><br /></div><div>Interest rates increase will affect not just home loans but everything in life. The sky high property prices will definitely fall as loans become more expensive and less affordable. Businesses will incur more cost on their loans because of high interest rates so they may pass on the increase cost to consumers. In rising interest rate environment, essentially those who have debt are losers while savers will benefit. We should see higher interest rates for bank accounts soon. You might have noticed that banks are starting to launch higher interest fixed deposit accounts and Singapore Savings Bond is also at an all time high of average 2.53% for a 10 year period. The 1st year interest given for SSB for the May launch is 1.43%, 2nd year will go up to 2.41%, 3rd year at 2.68% and 4th year onwards will be 2.71%. This is the highest SSB rate I've seen in a long time. </div><div><br /></div><div>Lastly, with risk free rates like fixed deposit accounts and SSB giving such high interest, investments such as in stocks and Reits become less attractive. You can get 2.5% risk free on SSB while Reits yields about 5% so the difference is only 2.5% but Reits have higher risk so naturally Reits prices start to fall as well. For growth stocks, it also drops as the risk is even higher and with higher interest rates, these businesses which rely on loans to expand their business will face some cost pressures and may slow down their expansion plans which caused their stock prices to drop even more. Nevertheless, stock prices will drop to a certain extend only and its the best time now to pick up some good companies as the stock prices drop. We should see Reits prices coming down and investors will pick them up again when they start to yield more than 6% which better justify the risk to return. </div><div><br /></div><div>Those who have bonds in their portfolio (not SSB) will see bond prices coming down as interest rates increase. So, if your portfolio has both bonds and stocks, you will likely see your portfolio drop even further as both bonds and stock prices drop in correlation to rising interest rates. It is still an unknown how much more interest rates will increase so we have to wait and see. </div><div><br /></div><div>If you have mortgage loans on 3m SIBOR, the rate as of 9 May has already increased to 1.11% as compared to 0.43% in Jan this year. This is already a 0.7% increase in just 5 months. If your loan is on the new SORA benchmark, interest rate has increased from 0.14% in Jan 22 to 0.89% as of 13 May 22. A 25 years tenure, 500K loan, with 1% rise in interest rates will increase your monthly mortgage payable by $235/month. If its a 1 million loan, it doubles. </div><div><br /></div><div>Don't belittle the things that are happening around the world now. All of us will be affected one way of another. We should relook at our financials and adjust accordingly so that we will not end up in deep trouble later. </div><div><br /></div><div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-27246053789923367172021-12-31T22:24:00.003+08:002021-12-31T22:24:50.917+08:00Reflections for year 2021<p>2021 has come to an end. The year flew by in an instant as there were quite a few major changes to my life. I got married earlier this year in Jan and moved to a new house in Oct. This was in the midst of a busy work schedule as I continued to work in a public hospital in Singapore. There were a few waves of COVID-19 infections and everytime there's a new wave, the hospital scrambles with everything its got to support the country in need. Every employee plays their part in this fight against COVID-19 no matter if they are doctors, nurses, allied health professionals or admin workers. </p><p>I've learnt a lot through the experiences I've had this year. I learnt that life is fragile, I've seen deaths. I've seen how people come together to help each other when in crisis. These are the experiences I get from my work which can be emotionally draining sometimes but it helps me grow stronger. </p><p>I've not written a blog post for quite a while now while I was busy settling my reno and moving to a new home. Its a transition in life and one thats well worth it to spend with someone I love. In a relationship, we learn to care for each other and not just think for ourselves. I'm not perfect but I'm learning as time goes by. </p><p>On finances, I'm still doing relatively well. Despite spending on wedding and reno, I still manage to have extra savings after deducting all my monthly expenses. I got a promotion in Jan and continued to get good bonuses while working in the healthcare sector. All these helps grow my wealth. </p><p>On investment, my portfolio continues to grow with more stocks being bought as COVID-19 continues to put a dampen on the stock market. However, total returns (calculated by XIRR) is only 3.54% for the whole year for me. This is largely due to a write off in a total loss in Hyflux, which has collapsed totally without any compensation. I'm lucky in a sense that despite the loss, my other stocks gains manage to cover the losses and still eek out some gains. Moving forward, my portfolio will continue to focus on building dividends and continue to sustain a 5 figure dividend annually. </p><p>How has your year been so far? If its not so good, have faith that year 2022 will be better. If this year has been good for you, I sincerely hope that year 2022 will be even better for you. One last hope I have is that COVID-19 will be gone from our lives soon so that we may live normally again. Our world has changed because of it while we adjust to new ways of living. But as all things goes, it will one day come to an end and all will be good again. </p><p>Stay safe and have a good year ahead everyone. Happy new year 2022!</p><p><br /></p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-88427790577481994402021-10-12T22:56:00.002+08:002021-10-12T22:56:11.424+08:00Why Do I Keep Worrying About Having Not Enough Money?<p>The fear is real... the worry of having not enough money is causing me sleepless nights sometimes. Is this normal I ask myself? I have savings, I have a stable job and earn a decent fixed monthly salary. I have enough to live my life and still having savings every month. But there is one thing I am constantly worried about, and that is having not enough for retirement. </p><p>No matter how much I budget and plan and forecast, there is still a lingering worry in me even though I try to assure myself as much as possible that its all ok. There is one reason I identified, the reason is the future is so unpredictable that there is no way to actually predict what will happen. Even if I plan all the way, the outcome may still be not what I want it to be. </p><p>Life throws in all kinds of nonsense at you along the way. I'm lucky not to have met too much nonsense thus far but I've seen nonsense being thrown at people and depletes all their savings instantly due to high medical bills and long term healthcare cost. </p><p>There are many Singaporeans who do not have to worry about money. We can see it on social media channels Youtube, Facebook, Instagram, Tiktok. Many people have the means to renovate their house nicely, buy a car, buy a luxurious condo, stay in 5 star hotels and eat good food all day. Some are spending beyond their means, some do not plan for the future but there are some who really have too much money to spend because they earn extremely a lot too. </p><p>For me, spending money was a taboo all my life. Yes its hard to spend money because we always didn't have much anyway. When its my turn to spend money, I buy nice furniture for my house, eat good food, spend on luxurious staycations because I can afford it but guilt sets in. Its a funny feeling of enjoying but at the same time fear. </p><p>Psychologically, I would think I need a breakthrough. Its like when you first started investing and you are brought on an emotional ride of thrill when the market goes up and fear when market goes down. Its not easy to overcome but as years goes by, you get better at it. </p><p>I'm not sure if anyone has the same thoughts and experience as me but if you do, I would encourage you to keep going when it gets tough. The light is always at the end of the tunnel. Worry is a normal process and it should spur us to achieve more in life. </p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com18tag:blogger.com,1999:blog-3276688108456391559.post-34575711926438432812021-08-19T17:00:00.001+08:002021-08-19T17:00:00.310+08:00Shifting mindset from extreme saving to increasing income and investing<p>Saving money was my mantra all along in this financial journey. In my younger days when I started this blog, I wrote various articles about the importance of saving money for financial freedom and even wrote about why extreme savings is more important than investing. As I grow older pass my 30s and approaching my mid 30s, I realised my mindset have to shift away from just saving money. I am no longer just a young chap who is single, no commitments and my parents are getting older. I realised I have more responsibilities and I need to earn more money to survive life. </p><p>Another part of me is tired of the frugal life. I have been questioning myself what's the point of saving so much money and in the end not being able to enjoy the finest things of life. </p><p>Don't get me wrong. Saving money is still important if you're young. In fact, that's the only time we have to save a significant sum of money because as we grow older, we have more commitments and will definitely not be able to accumulate high savings rate anymore. </p><p>Nevertheless, after saving money for the past 10 years, I've decided to shift my mindset to increasing income and investing to grow my money. This is a more sustainable way to live at this stage of my life. </p><p>Increasing income is somewhat more difficult than saving money alone. I've been trying to increase my income for the past few years too and definitely its hard work. To get that promotion, I rack my brains to do many projects that will shine and devise a plan to let my bosses see my effort. I suffered burn out as a result of that even though I got what I wanted. Along with that, I still continue mortgage consultancy work, blogging and investing. Late at night, I'm still reading financial reports to plan what other stocks to invest in. </p><p>I realised I'm not alone in this journey to earn more income. I know of people who have side business on top of their full time job and people who trade the US markets till the wee hours of 4am and wake up at 7am the next day for work. This is the sacrifice to take to increase income. </p><p>I would think I have a comfortable income now to live my daily life but if I were to spend all my income to live this comfortable life, I would not have enough for retirement. Increasing income and investing is thus important to live a comfortable life now and still have enough for retirement. </p><p>I have my own financial spreadsheet which forecast how much one would have in xx number of years. The below forecast assumes a person with $300K savings, earns an income of about $5000 per month, spends about $3000 per month and invest with returns of 5% annually.</p><p>This is how the chart looks like if one does not invest the money. It'll take 22 years just to save up $1 million.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyWsgy7YqbSd_O30pWSRIjsdkZ9pQbVP23MzFz-NLJ8gENrfV4oZshlhoNbAZUAWFvG_7WfALNvTgNtuM0Cg8e1CtfJiqHFVxeJosQQegUCi_uOyTD5v4xkKNMryKUKIV8AvPJmV4ldqBM/s481/networth+without+investing.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="289" data-original-width="481" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyWsgy7YqbSd_O30pWSRIjsdkZ9pQbVP23MzFz-NLJ8gENrfV4oZshlhoNbAZUAWFvG_7WfALNvTgNtuM0Cg8e1CtfJiqHFVxeJosQQegUCi_uOyTD5v4xkKNMryKUKIV8AvPJmV4ldqBM/w640-h384/networth+without+investing.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><p>This is how the chart looks like if the money is invested with a 5% yearly investment return. It now takes just 15 years to save up $1 million. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFZ4jv6x7JpVGjM5gzNJKwWCqMM6VeQKK3RrLhamU_G9I7Pkyidzwrc6rnDmqpSHeZ8YZXUkuRK6QeowEzU0M8rYE2UshnjOIRMNSWRII4UdUG-DU_dKyY19yuxW8IwdFYFhoaRnMXaeEI/s545/networth+with+investing.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="289" data-original-width="545" height="340" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFZ4jv6x7JpVGjM5gzNJKwWCqMM6VeQKK3RrLhamU_G9I7Pkyidzwrc6rnDmqpSHeZ8YZXUkuRK6QeowEzU0M8rYE2UshnjOIRMNSWRII4UdUG-DU_dKyY19yuxW8IwdFYFhoaRnMXaeEI/w640-h340/networth+with+investing.png" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><br /><p>Now, when I combine the 2 charts, here's what you see. The difference is more noticeable as the years go by due to the power of compound interest. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNVrxxOKFODJU2-7c533isC9-jYfZfr2T4Ps5MQW1qyE9QAQy0ATMjVVGbqQUawxGcuo8DgGYkbM1_khyphenhyphenBcxELUzY62rzHAGHKmjqm9uxXQNe0tiSGY-rPjIFEf5SuTdhhLUaevQ8uUgYV/s481/networth.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="289" data-original-width="481" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNVrxxOKFODJU2-7c533isC9-jYfZfr2T4Ps5MQW1qyE9QAQy0ATMjVVGbqQUawxGcuo8DgGYkbM1_khyphenhyphenBcxELUzY62rzHAGHKmjqm9uxXQNe0tiSGY-rPjIFEf5SuTdhhLUaevQ8uUgYV/w640-h384/networth.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><p>I can't emphasize the importance of investing your money but in order for investment to be a significant part of our financial plan, we need to have a substantial sum of savings first (300K for the example above). </p><p>Saving money then becomes not so important once we reach this stage, which is somewhat the stage which I'm in now. Its time for me to shift my mindset but its never easy after saving money for so long and growing up in an environment where I was taught to be thrifty all my life. </p><p>The next steps is to continue increasing my income and be patient with my investments, not giving in to greed which can wipe out any savings I can have in an instant. There are people who indeed lose millions of dollars in the stock market. </p><p>Nevertheless, life is never a smooth sailing one. Having a sum of money and more income will enable us to be more prepared for rainy days such as a financial crisis and also if the needs arise (eg for family healthcare needs). While in this midst of struggle, I should remind myself to enjoy life a little and not be so hard on myself. This is how I should live my life forward. </p><p>Its been awhile since I blogged but definitely I've not forgotten the existence of this blog. I hope all of you are doing well in life and thank you for your support if you've read till the end here. Till the next article we meet again. </p><p><br /></p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com2tag:blogger.com,1999:blog-3276688108456391559.post-44892763445413766022021-08-11T21:10:00.000+08:002021-08-11T21:10:02.193+08:00INVEST Fair 2021 - Growth story to invest in for the next 10 years<p>INVEST Fair is back in 2021. I first attended INVEST Fair many years back when I just started investing. I remembered they held the fairs at Suntec city convention hall and MBS and I've went for all before. As a young investor, it was eye opening to hear all the talks as it opened me up to the world of investing. Due to the pandemic, they are not able to hold a live event this year. However, they are back with their first virtual INVEST Fair from 21 to 22 Aug 2021. The 2-days event will bring about discussions and exchanging of ideas on 6 upcoming investment trends in the next 10 years.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://rebrand.ly/IFSGSGYI" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="480" data-original-width="550" height="349" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJtlBaaR9VhSyMpbRxBe2MHBc1Wn8TgOOnbzVLAXrc7V9_9Odr6C7HtV41HttqRAir7nBC3AVV9F_lRFi58ydKBxP9yTykJ3QdIOwu5E3_hcmO7TxTsJcIolMfm27FposR_sOr6lWPAG1R/w400-h349/splash-ad.jpg" width="400" /></a></div><p><br /></p><p><b><span style="font-size: large;">Highlights from the first Virtual INVEST Fair</span></b></p><p><b><u>Live Sessions</u></b></p><p>The usual live sessions which we see at the conference halls will be brought online where you can listen at the comfort of your home. Here are the topics:</p><p></p><ul style="text-align: left;"><li>Wealth In China</li><li>Digital Transformation & Cyber Security</li><li>Gems in Small and Mid Caps</li><li>Environmental, Social and Governance (ESG)</li><li>Trends driven by Millennials</li><li>Asset & Portfolio Management</li></ul><div>I'm particularly interested in wealth in China, digital transformation & cyber security and trends driven by millennials. These topics seems to be very much forward looking to give us some ideas on what we can invest in for our portfolio growth in the next 10 years. </div><div><br /></div><div>We all know that China is fast becoming a powerful economic powerhouse. They have companies such as Alibaba, the ecommerce giant which owns Taobao and Lazada, Meituan Dianping, the king of delivery services in China, Tencent, a world-leading internet and technology company and many other up and coming companies such as from the electric vehicle space and artificial intelligence. The wealth in China topic will be of interest to you if you're looking to invest in the next growth story in China. </div><div><br /></div><div>Digital transformation is another area of growth which is definitely happening in the next decade. COVID-19 has accelerated the implementation of digital transformation for many industries and companies. Companies dealing with robotics, sensors, AI, digitisation will be the next growth story. I'm quite sure with 5G coming in the next 2-3 years for many countries, devices will be more connected and possibilities of technological growth will be limitless then. With that, cyber security becomes even more important so companies in this space will do well also moving forward. </div><div><br /></div><div>Finally, trends driven by millennials is another topic of interest. Trends have changed over the past 8 years since I started blogging. Mainstream media was popular many years ago when internet was not so easily accessible. Then came smart phone which made internet so easily accessible and mainstream media becoming not so popular while new media such as blogs, internet sites such as mothership became the alternative choice of content for millennials back then. Facebook was hugely popular and is still popular now but I can see trends shifting towards Instagram, YouTube and now the latest craze is on TikTok. TV channels were once popular but now people have shifted to watch on demand content such as Netflix and Disney+. Retail shopping was once the norm but this has shifted to online shopping now. </div><div><br /></div><div>From all these trends driven by millennials, we can already decipher some great stocks to invest in. If we had invested in Netflix 5 years ago, we would have gained a 500% return, Facebook (which own Facebook & Instagram) would have returned 300%, Alphabet (which owns YouTube) would have returned 300% and lastly SEA (which owns Shopee) would have returned 1700% all in just 5 years. I will be interested to find out what is the next big growth story based on the new trends going forward. </div><div><br /></div><div>There will be a Q&A segment for all sessions, where attendees can post questions to each</div><div>speaker/panel. Digital Transformation & Cyber Security and Trends driven by Millennials will be panel discussion moderated by the guys from Seedly while the rest will be presented by individual speakers. </div><div><br /></div><div><b><u>Virtual Booth</u></b></div><div><br /></div><div><div>ShareInvestor, along with 4 Gold Sponsors will each have a virtual booth where attendees can visit</div><div>virtually to join in the live webinars, promotions, and activities across 2 days.</div></div><div><br /></div><div><b><u>e-Goodie bag</u></b></div><div><b><u><br /></u></b></div><div>Just by registering for the fair will get you an e-goodie bag with research reports and freebies from shareinvestor's partners.</div><div><br /></div><div><div>The research report will cover topics on:</div><div><ul style="text-align: left;"><li>Top 5 Asset Management Funds and their Holdings</li><li>Investment Trend for the Next 10 years</li><li>A definitive Guide to ESG Investing</li><li>2 Undervalued small and mid caps companies for your watchlist</li></ul></div></div><div><a href="https://rebrand.ly/IFSGSGYI" target="_blank">Sign up now</a> for free to get your e-goodie bag. </div><div><br /></div><div><b><u>Lucky Draw</u></b></div><div><b><u><br /></u></b></div><div>There will even be a lucky draw consisting of 8 prizes, ranging from $88 to $388 cash. Just login on that day to stand a chance to win the lucky draw. </div><div><br /></div><div>The first virtual INVEST Fair is happening from 21 to 22 Aug 2021, 930am to 1pm. Join in for an insightful 2 days of learning at the comfort of your home. You might get some ideas to really grow your portfolio in the next decade. </div><div><br /></div><div>Register for free below:</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://rebrand.ly/IFSGSGYI" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="90" data-original-width="728" height="80" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWoOjvU3Q4_1bN2JfaDoynxFGQqhiyete0pxeWkv761eIiEYUnNAxyies6OZ0P_8xB8e9W832c3eRLYf3EGoFbp1SIKWHdw8QlURmBs02CxkLOpYXfvzYMDglKOKpgeN30hmD2kf-mbr9c/w640-h80/leaderboard.gif" width="640" /></a></div><br /><div><i style="background-color: white; color: #2a2a2a; font-family: "Times New Roman", Times, FreeSerif, serif; font-size: 17.82px;">This post is sponsored by ShareInvestor but all views are of my own</i></div><p></p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-8050034011850486292021-06-13T12:37:00.003+08:002021-06-13T12:37:25.635+08:00Is Air Travel Coming Back Soon?<p>Its been 1.5 years since COVID-19 struck us. Air travel had completely come to a halt when many countries announced border closures. Airports were left empty and airlines had to cut flights and retrenched staff as a result. </p><p>However, things seem to changed recently with higher rates of people being vaccinated. In the US, their government have started to relax measures and air travel is definitely back in the United States. Their airports are full again and flights are also full.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvP9PqKLVxMTWg4N03wZKzF9GskS1rz9SFPgZlZey1Ts2zXGhIogJpZDeLlFkQrL6jE0ayfLNcot8IqwgjOJt41hG5vVyjwvtO4Svc6Jr63cXHJcoScYIRGJnqM1ZdVEsQk1Sd0UNxWzdp/s1920/US+airport.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1080" data-original-width="1920" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvP9PqKLVxMTWg4N03wZKzF9GskS1rz9SFPgZlZey1Ts2zXGhIogJpZDeLlFkQrL6jE0ayfLNcot8IqwgjOJt41hG5vVyjwvtO4Svc6Jr63cXHJcoScYIRGJnqM1ZdVEsQk1Sd0UNxWzdp/w640-h360/US+airport.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOoERdK9ifdRDhyphenhyphenyqxoEM7cl-il7sQyD0tgO7T3t6u2s3m7fB-AXcwduFoewauTBHH1UGrlYSpEEvKt-9gJc2cvLPaa1uisBmmVSE9StanorT6mRNNQegc0SUJmd8AKq1_OQzOHp-gz5KK/s1920/US+airlines+flight.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1080" data-original-width="1920" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOoERdK9ifdRDhyphenhyphenyqxoEM7cl-il7sQyD0tgO7T3t6u2s3m7fB-AXcwduFoewauTBHH1UGrlYSpEEvKt-9gJc2cvLPaa1uisBmmVSE9StanorT6mRNNQegc0SUJmd8AKq1_OQzOHp-gz5KK/w640-h360/US+airlines+flight.jpg" width="640" /></a></div><br /><p>This is a stark contract from last year where airports are empty and flights were relatively empty too. Studies have shown that higher vaccination rates reduces COVID-19 infection rates significantly as seen in the chart below.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDYNjFCCUdolHetBQPxZE-NRkWcCJdADBZy3Md4IivCGSD9y1F7R-rOUGwkw1bCWPCjl1ubJKutIiLRmBdapfDPR5eAxsNiIkhOe-7B_l4LEgfK6sof1ZTxo4qpwuGUWjVabqCvz2gCeSE/s960/vaccination.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="468" data-original-width="960" height="312" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDYNjFCCUdolHetBQPxZE-NRkWcCJdADBZy3Md4IivCGSD9y1F7R-rOUGwkw1bCWPCjl1ubJKutIiLRmBdapfDPR5eAxsNiIkhOe-7B_l4LEgfK6sof1ZTxo4qpwuGUWjVabqCvz2gCeSE/w640-h312/vaccination.jpg" width="640" /></a></div>Minister Lawrence Wong has also said that <i>"With a higher vaccination rate, compliance with social distancing and safe management measures, regular testing, and faster and more comprehensive contact tracing, Singapore will ease restrictions and gradually restore "our normal lives, both within Singapore and at our borders", said Mr Wong, who is co-chair of the multi-ministry task force tackling Covid-19. Mr Wong said: "As we progress through these stages (of reopening), we will ease our restrictions and gradually restore our normal lives, both within Singapore and at our borders. Then we will move to phase three, and even beyond phase three, to a new normal phase of living with endemic Covid."" </i>This was reported in the Straits Times article <a href="https://www.straitstimes.com/singapore/target-for-three-in-four-to-be-fully-vaccinated-by-october-wong-0" target="_blank">here</a>. We have a chance of going into endemic mode once we achieve vaccination rates of above 75% in October, which is the target set by the government. <div><br /></div><div>Shares of US airlines such as Delta Airlines and United Airlines have went up steadily in the past 1 year. It may still have some run up over the next 1 year as air travel progressively resumes. </div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqMVizKaWlZ1crf9NrfSrAuC35aOmuaKHWEXPtw8G1vv2ueNjPXZiob6-ROrD0EXOrTTObmgOC18CyxMSMvn11OQ4WL0x31073FfDYwbIninyPsmQvHHq6fvPVMmX0419w076nIUloZnnC/s1025/United+airlines+share+price.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="649" data-original-width="1025" height="406" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjqMVizKaWlZ1crf9NrfSrAuC35aOmuaKHWEXPtw8G1vv2ueNjPXZiob6-ROrD0EXOrTTObmgOC18CyxMSMvn11OQ4WL0x31073FfDYwbIninyPsmQvHHq6fvPVMmX0419w076nIUloZnnC/w640-h406/United+airlines+share+price.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoEcC8-FqPOamSM9ErjmSjrOVFMuprZqkG3yqwhcE_-6j3dgZCEnKktXdrltjgAEyd4PALVkjJfA8v_-0D77PepJZ16se_sdyvXgVjPyt3DioQwON4AR9ta6sxI4oIwCW_qgGYN3A3giyW/s1039/Delta+airlines+share+price.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="651" data-original-width="1039" height="402" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoEcC8-FqPOamSM9ErjmSjrOVFMuprZqkG3yqwhcE_-6j3dgZCEnKktXdrltjgAEyd4PALVkjJfA8v_-0D77PepJZ16se_sdyvXgVjPyt3DioQwON4AR9ta6sxI4oIwCW_qgGYN3A3giyW/w640-h402/Delta+airlines+share+price.jpg" width="640" /></a></div><br /><div>Here's a video on the situation of US airports and its airlines where we can see clearly how packed and crowded it is currently:</div><div><br /><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/Y8ZqmTI4Iwc" title="YouTube video player" width="560"></iframe></div><div><br /></div><div>Elsewhere in Singapore and Asia, it doesn't seem that air travel is resuming soon as COVID-19 infection rates is still high in countries such as Malaysia. But, as vaccination rates pick up, more air travel bubbles will be formed in the next few months and we will see some form of air travel and tourism back in action. <br /><p>As an investor, it may probably be a good time to accumulate some travel related stocks such as Hospitality REITs. Their prices are still depressed and those who are early in the game may be able to reap some rewards in the future. We shall see how situation develops from here on. </p><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-26864217836466698732021-06-08T17:00:00.008+08:002021-06-08T17:00:00.277+08:00Identifying Buying Opportunities In The Stock Market Using Investor One Portal<p>Many investors will find it difficult to research on stocks as we often have to go to different websites just to get the required information. For myself, I often have to manually go to the company's investor relation page and search for information such as financials and key ratios to make the right decision for my investment. </p><p>With Singapore going back to phase 2 of the circuit breaker again with more COVID-19 restrictions, some stocks have went down which present buying opportunities again. Recently, I was introduced to a content portal by ShareInvestor called <a href="https://rebrand.ly/76779b" target="_blank">Investor One</a>. This is something like a one stop platform for all our investment needs. To be honest after I found this platform, I would personally use it to find all the investment information I need because its easy to use and really has all the considerations on the information which an investor would want access to. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnxsXeyatj7007wdEh32M44qrJij85qis85X3VyxjfMwB2wq5RHZde3cyZ25l84wpo7YYxqhMM_YY9aaej1GnNqSqlHvpAFMOufzwHYpytYIJLijrvEGfVzV8Y7quT8b1xJ3tDpWuaeykL/s1913/Investor+One+main+page.jpg" style="margin-left: 1em; margin-right: 1em;"><img alt="Investor One Main Page" border="0" data-original-height="919" data-original-width="1913" height="308" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhnxsXeyatj7007wdEh32M44qrJij85qis85X3VyxjfMwB2wq5RHZde3cyZ25l84wpo7YYxqhMM_YY9aaej1GnNqSqlHvpAFMOufzwHYpytYIJLijrvEGfVzV8Y7quT8b1xJ3tDpWuaeykL/w640-h308/Investor+One+main+page.jpg" title="Investor One Main Page" width="640" /></a></div><br /><p>The Investor One main page is simple and easily accessible. As you can see from the top bar, there are 5 different tabs: <span style="line-height: 115%;"><span style="font-family: inherit;"><a href="https://rebrand.ly/t1eabxi" target="_blank">Editorial</a><!--[if !supportNestedAnchors]--><a></a><!--[endif]-->, <a href="https://rebrand.ly/5spkxfb" target="_blank">Performance</a>, <a href="https://rebrand.ly/v9z69yh" target="_blank">Quick Facts</a>, <a href="https://rebrand.ly/2o3mtsu" target="_blank">Social</a> and <a href="https://rebrand.ly/b420e6" target="_blank">IPOs</a>.</span></span></p><div><!--[if !supportAnnotations]-->
<div><div class="msocomtxt" id="_com_1" language="JavaScript"><p class="MsoCommentText">These are information which are useful for investors to find stock buying opportunities or find out more about the stocks they want to invest in. </p></div></div></div><p>Let me dive briefly into what each section has which I found to be useful. </p><p>Firstly, under Editorial, it has this academy page which new investors would be able to read up on how to value stocks. From its front page, you can already see 3 solid articles on how to evaluate a REIT, common characteristics of quality growth stocks and how to understand business models. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik5KTzK2OX_611r7AoDlTjGIRnB4ljuK57O54-WE4ClnXH8pRN1TefMgJYkrpNZo82S39wAIrBUCICLuQV6Ls-ZDU4NhVnhHqBEokPiKGxWMDk5uWTj_x-J4A3kthyddpgrvEK-ID-8Yqw/s1917/Investor+One+editorial+academy+page.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="909" data-original-width="1917" height="304" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik5KTzK2OX_611r7AoDlTjGIRnB4ljuK57O54-WE4ClnXH8pRN1TefMgJYkrpNZo82S39wAIrBUCICLuQV6Ls-ZDU4NhVnhHqBEokPiKGxWMDk5uWTj_x-J4A3kthyddpgrvEK-ID-8Yqw/w640-h304/Investor+One+editorial+academy+page.jpg" width="640" /></a></div><br /><p>Secondly, they also have <a href="https://rebrand.ly/a68a98 " target="_blank">bloggers insights</a> and <a href="https://rebrand.ly/8pxpjfj " target="_blank">C-suite interviews</a> with CEOs of listed entities. These interviews are useful to know more about who the management are and the direction of the company moving forward. Hearing from the management is often important for investing as the wrong management team can often lead a company to destruction. </p><p>Thirdly, also under editorial, there is a company insights page where we can find information on companies to invest in. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWwVRFLJRwDVUIPpLKW7OKZ3EmDIAqqNckAODYZBxr7yipYHL29qaxw_ehyphenhyphenWpJVt_vO12Hz3_5GycbXAe6etBOnPSSQ0GzMmdIgka-AUgupBZuf61eMPaeGDAFd526G5jyKh77rjLw3bBU/s1917/Investor+One+editorial+company+insights.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="911" data-original-width="1917" height="304" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWwVRFLJRwDVUIPpLKW7OKZ3EmDIAqqNckAODYZBxr7yipYHL29qaxw_ehyphenhyphenWpJVt_vO12Hz3_5GycbXAe6etBOnPSSQ0GzMmdIgka-AUgupBZuf61eMPaeGDAFd526G5jyKh77rjLw3bBU/w640-h304/Investor+One+editorial+company+insights.jpg" width="640" /></a></div><br /><p>When we run out of stocks to invest in, sometimes we will use a screener to find stocks. Investor One has a <a href="https://rebrand.ly/5spkxfb" target="_blank">performance</a> page where we can screen for the top 5 stocks in various categories such as lowest price to earnings ratio, highest dividend yield, highest discount to book and highest revenue/earnings growth. These are all good metrics to screen a stock for. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_GP4m3SMGcZdHyOsND4ncIuoZ-Oz6rY-0O1uvAfZbktEdByKkWd4cA4D9qQKJ5xbwRNbbKZLT2skV5qr87tiJG33YbcUDLwBtM3feiAawUPokGX2jR4ITS0wM97UVPD3UgO6lQ6cgkUFa/s1915/Investor+One+performance+page.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="905" data-original-width="1915" height="302" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_GP4m3SMGcZdHyOsND4ncIuoZ-Oz6rY-0O1uvAfZbktEdByKkWd4cA4D9qQKJ5xbwRNbbKZLT2skV5qr87tiJG33YbcUDLwBtM3feiAawUPokGX2jR4ITS0wM97UVPD3UgO6lQ6cgkUFa/w640-h302/Investor+One+performance+page.jpg" width="640" /></a></div><br /><p>I especially like the quick facts page where I am able to key in a stock name which I want to find information on and it will display most of the information I need to evaluate a stock for investment. </p><p>For example, when I key in <a href="https://rebrand.ly/5852f6 " target="_blank">Lendlease REIT</a>, here's what the page displayed:</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7yKsX2506Ddx-tq955gJkAD0vhVDiF4NPCWxvfBvlYxr-sQ_6N3upJkUWyKgCvPH2lhxogLUrTaGIb9NqpGu5fNNU0uENXJnaqR7j3AVea2SQT7bLnh49NHBtLVgjhD07pa2f0ZY9DUvP/s1919/Investor+One+quick+facts+lendlease.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="909" data-original-width="1919" height="304" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh7yKsX2506Ddx-tq955gJkAD0vhVDiF4NPCWxvfBvlYxr-sQ_6N3upJkUWyKgCvPH2lhxogLUrTaGIb9NqpGu5fNNU0uENXJnaqR7j3AVea2SQT7bLnh49NHBtLVgjhD07pa2f0ZY9DUvP/w640-h304/Investor+One+quick+facts+lendlease.jpg" width="640" /></a></div><br /><p>In one look, I'm able to see its chart, and key ratios such as price to book and dividend yield which is what I look for when investing in REITs. With dining-in restrictions in place, shopping mall REITs prices have dropped from a high and are becoming attractive again. Lendlease has a price to book of 0.88. At the price of 0.74, it is at a discount to its book value. However, yield looks low due to the rebates given to tenants during this COVID-19 situation to help them. Yields should gradually increase as COVID-19 situation becomes better but it may take awhile as we see some swings in the market for the next few years. As Lendlease is still a relatively new REIT listed only in Oct 2019, it does not have the growth figures. </p><p>Let's look at another company, Micro-Mechanics, which is benefiting from the demand on technology growth as they are in the semiconductor industry. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZo41GWeljwFxe7VbZEgLZK3KDjjvWUAXP5FZaQcyAm-_fF_dr2eA2UoGPwSC9HOeX-fJS07Irf5W80CIj6mkTPnfapMOJiUNC4R3ScMO9dcPJijZdLJvpySG1obbIaoXOmSVMT2L6E5eC/s1920/Investor+One+quick+facts+micro+mechanics.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1080" data-original-width="1920" height="360" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiZo41GWeljwFxe7VbZEgLZK3KDjjvWUAXP5FZaQcyAm-_fF_dr2eA2UoGPwSC9HOeX-fJS07Irf5W80CIj6mkTPnfapMOJiUNC4R3ScMO9dcPJijZdLJvpySG1obbIaoXOmSVMT2L6E5eC/w640-h360/Investor+One+quick+facts+micro+mechanics.jpg" width="640" /></a></div><br /><p>As we can see from above, the <a href="https://rebrand.ly/27a127 " target="_blank">growth figures of Micro-Mechanics</a> can be seen now as this stock has been listed for quite some time now. We are able to see its revenue and profit growth in one glance. We can even see other ratios of this company where you will find that it is quite fairly valued.</p><p>If you think that's all for the quick facts page, you would be surprised that there are more information such as other key ratios like return on assets or equity, total shareholder returns, links to annual reports where you can easily read up more on the company, latest news and and even a link to its investor relations (IR) page where we can easily retrieve financial reports and presentations on the stock we are looking for.</p><p>You can try out the <a href="https://www.investor-one.com/market/quick_facts" target="_blank">quick facts page</a> and find more companies you are interested in. </p><p>Perhaps, the most interesting thing is its collaboration with Investing Note where we can see what other investors like us are saying about the stocks we are looking at. Investing Note is like the Facebook of the investing world where investment ideas are discussed actively by thousands of investors on this social media platform. They even dedicated a social page to consolidate all the buzz in the Investing Note social media platform. </p><p>All in all, Investor One is a good portal which I will use moving forward. It lets me easily find stocks information which I do not have to search on multiple sites anymore. You may check out Investor One page <a href="https://www.investor-one.com/">here</a> which is free to use and no subscription needed. </p><p>You can also check out the Telegram page below:</p><div class="separator" style="clear: both; text-align: center;"><a href="https://rebrand.ly/1ed40b" imageanchor="1" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img border="0" data-original-height="90" data-original-width="728" height="80" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjP-xrm0FZvvZ-rxmcCeX3v67sI5vFf1xdcoYHELM0Scphs0b-5WTFkhpXT_U2iiiffg86xw4cYdOuZdBf9INxgE-j6sNAl80X-Rds-7WayoKALLnk2YvA1unnpo0XzVbCuXKMiE0bXBj2F/w640-h80/leaderboard.jpg" width="640" /></a></div><br /><p><br /></p><p><i>This post is sponsored by ShareInvestor but all views are of my own</i></p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-38452476814103185852021-05-26T21:03:00.000+08:002021-05-26T21:03:32.067+08:00How Much Does It Cost To Own A Car In Singapore? Buying a car in Singapore is a dream for many. The problem is cars are getting more expensive in Singapore with the cheapest new car at around $75,000 now. Recently, I've been pondering on the idea to own a car and still meet my financial targets for retirement. Can this be done? <div><br /></div><div>Its a fine line between planning for retirement and owning a car. It took me awhile to finally pend down my thoughts and perhaps finally be able to plan to own a car while still achieving my financial goals. In this post, I will list down the cost of owning a car and how it is still possible to plan for retirement. </div><div><br /></div><div>My initial financial target was that by the age of 48, I will be able to save up a million dollars in cash excluding CPF. With owning a car, the financial target will be pushed back by about 5 years to 53 years old. Doesn't sound that bad isn't it? Let's get straight to the numbers.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPjtYXtPgQ7Wc2qFLPnNH31i7QRtwL0nOqJtes9aM0L8_1m_pfkpAheWd7SsN7s3UUfUIRetCHhJe6N3K18KOEBNYy6n0ktgN39KgE7v65zy1a7MvLF-0U0jVRLDvNsB24XXx_BZzjTlK4/s1023/car+cost.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="680" data-original-width="1023" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPjtYXtPgQ7Wc2qFLPnNH31i7QRtwL0nOqJtes9aM0L8_1m_pfkpAheWd7SsN7s3UUfUIRetCHhJe6N3K18KOEBNYy6n0ktgN39KgE7v65zy1a7MvLF-0U0jVRLDvNsB24XXx_BZzjTlK4/w400-h266/car+cost.jpg" width="400" /></a></div><div><br /></div><div><b><span style="font-size: large;">Cost of car in Singapore (2021 May)</span></b></div><div><br /></div><div>The first thing is the cost of the car itself. Looking through several websites, the few lowest price cars you can get are probably the Mitsubishi Attrage at $74,000 and Honda Fit at about $75,000. These prices are inclusive of COE. If you look at other models such as Hyundai Avante, Honda Vezel or Toyota Vios, these will cost about $85,000 to $95,000. Any other higher end models will cost you close to or above $100,000 easily. </div><div><br /></div><div>If you have the cash to pay for it, then it will decrease your savings by one lump sum but you don't have to incur a monthly instalment cost. Let's say you don't have the cash and have to take a loan:</div><div><br /></div><div>Car cost: $91,000</div><div>Loan amount: $63,699 (70% max loan)</div><div>Interest rate: 2.78%</div><div>Loan term: 7 years</div><div><br /></div><div>Monthly loan installment: $906</div><div><b><br /></b></div><div>If you decide to buy a lower price car at $74,000, the monthly loan installment will then be $737.</div><div><br /></div><div><b>Monthly loan installment for car: $737-$906 per month</b></div><div><b><br /></b></div><div><b><br /></b></div><div><b><span style="font-size: large;">Road Tax</span></b></div><div><b><span style="font-size: large;"><br /></span></b></div><div><span>The next cost is the cost of road tax. For a car with 1500cc and age of car is less than 10 years, the road tax is $686 per year. If the car is 1600cc, the road tax will be $744 per year.</span></div><div><span><br /></span></div><div><span><b>Road Tax: $686-$744 per year </b></span></div><div><span><b><br /></b></span></div><div><span><b><br /></b></span></div><div><span style="font-size: large;"><b>Car Insurance</b></span></div><div><span style="font-size: large;"><b><br /></b></span></div><div>Insurance is important for a car to protect you against liability for any accidents. If you've not met any accidents before and never claimed from any car insurance and have more than 3 years of driving experience, insurance cost will be lower at $800+. It can go up to $1600 if you're a young driver with less than 3 years of experience or have claimed from car insurance before. </div><div><br /></div><div><b>Insurance cost: $800-$1600 per year </b></div><div><br /></div><div><br /></div><div><b><span style="font-size: large;">Petrol, Parking & ERP</span></b></div><div><b><span style="font-size: large;"><br /></span></b></div><div><span>The daily running cost will include petrol, parking and ERP. For HDB season parking, it is priced at $110. If you go to your parents or in laws house often, you might have to buy another family season parking at $55 x 2. Total cost of season parking will be about $220. Other miscellaneous parking cost such as when you drive out for meals or outings will probably cost another $50 per month. For petrol, let's say your car fuel efficiency is about 20km/litre and you drive about 40km/day, with average pump price at $2.40/litre, petrol cost will be about $144. For ERP, let's put it at around $40 per month. </span></div><div><span><br /></span></div><div>Petrol cost: $144</div><div>Parking: $270</div><div>ERP: $40</div><div><b>Total: $454 per month</b></div><div><b><br /></b></div><div><b><br /></b></div><div><b><span style="font-size: large;">Maintenance cost</span></b></div><div><b><span style="font-size: large;"><br /></span></b></div><div><span>The general recommendation is to send your car for servicing every 10,000km driven or every 6 months which every is early. This will set you up for a cost of about $600 per year. </span></div><div><span><br /></span></div><div><span><b>Maintenance cost: $600 per year</b></span></div><div><span><b><br /></b></span></div><div><span><b><br /></b></span></div><div><span style="font-size: large;"><b>Summary of cost to own a car in Singapore</b></span></div><div><span style="font-size: large;"><b><br /></b></span></div><div>After listing out all the different cost, we are now finally able to add it all up. </div><div><br /></div>
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<thead><tr class="tableizer-firstrow"><th></th><th>Cost per month</th></tr></thead><tbody>
<tr><td>Car Loan</td><td>$737</td></tr>
<tr><td>Road Tax</td><td>$57</td></tr>
<tr><td>Insurance</td><td>$67</td></tr>
<tr><td>Petrol, Parking & ERP</td><td>$454</td></tr>
<tr><td>Maintenance</td><td>$50</td></tr>
<tr><td><b>Total</b></td><td><b>$1,365</b></td></tr>
</tbody></table><br />If the car is paid in full without any loan, then the monthly cost for car will be about <b>$628/month</b>.<br /><div><br /></div><div><b><span style="font-size: large;">Can you afford to own a car? How does it affect your retirement planning?</span></b></div><div><b><span style="font-size: large;"><br /></span></b></div><div><span>Now, we come to the tough question of can we afford to own a car? If owning a car causes you to have little to no monthly savings from your income, then its definitely a no. If after deducting the expenses to own a car and you still have savings, then it may be a yes. Question is, how much savings you should have in order to retire in Singapore? </span></div><div><span><br /></span></div><div><span>The amount required for retirement in Singapore is always increasing. Some say its $1 million, some say its $2 million, others can afford to retire with just a few hundred thousand or some just totally give up and rely on their kids in the future to give them allowance. Let me put this forward, retirement planning is hard. I've struggled through it a lot the past few years finding a balance towards spending and planning for retirement to the extend I can be pretty stressed up. Its no wonder people do give up planning for retirement. </span></div><div><span><br /></span></div><div>To make things easier, let's set the retirement amount to be $1 million. We have the below profile of person to see if he can afford to own a car:</div><div><br /></div><div><u><b>Person A</b></u></div><div>Salary: $5000/month</div><div>Salary increment: 3% annually</div><div>Salary Bonus: 3.5 months</div><div>Monthly expenses: $2500 (without car), $3100 (with car)</div><div>Monthly expenses increase: 3% per year</div><div>Savings: $100,000</div><div>Investment returns: 5%</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje62uhzUlhlagm7jSd4ja4ROaOrw-GrADpx3-ib04yMEGTmT6tgOki_RVGBBnP3Kwe0raUMeEm35aXfgzcOnbwVsODZs9KMCYxlsC7tK_1VlLk7itBtQ3_3uxyFh17Zdv_5uDFwgEwNqMF/s773/car+cost+%25245000+salary.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="448" data-original-width="773" height="370" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje62uhzUlhlagm7jSd4ja4ROaOrw-GrADpx3-ib04yMEGTmT6tgOki_RVGBBnP3Kwe0raUMeEm35aXfgzcOnbwVsODZs9KMCYxlsC7tK_1VlLk7itBtQ3_3uxyFh17Zdv_5uDFwgEwNqMF/w640-h370/car+cost+%25245000+salary.jpg" width="640" /></a></div><br /><div class="separator" style="clear: both; text-align: center;"><br /></div><div>For person A with $5000 monthly salary and the above expenses, he still can save up $1 Million in 16 years without a car, 21 years with a car. Owning a car pushes back retirement by 5 years so it doesn't seem that bad. This is assuming the person does not buy another car after 10 years which is the end of life for cars in Singapore. </div><div><br /></div><div>Using the same parameters, if we bring down the salary to $4000 per month, this person will take 21 years to save up $1 Million without a car and 26 years with a car. Do take note the above parameters assumes the monthly expenses per household member and probably will be for a person without kids. For a couple, the expenses will be higher but if your spouse is also working and contributing to household expenses, then its still affordable. In the 2018 household expenditure survey, it was stated that Singaporeans with a family of 4 spends an average of $4906 per month. This may have included owning a car but the figures here are still quite high.</div><div><br /></div><div>If you're a single income earner supporting a family of 4, you definitely need to earn above $7000 to afford a car and still have enough for retirement. </div><div><br /></div><div>Can you afford to own a car in Singapore? Its better to work out your own financial plan before committing to buying a car. If your income is relatively high above $5000 and don't have much other commitments, you might be able own a car without affecting your future retirement plan. </div><div><br /></div><div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-37369084607828440612021-04-13T17:00:00.001+08:002021-04-13T17:00:00.495+08:00How To Achieve Your Toughest Financial Goals - $100K dividends is it achievable?<p>In the financial blogging space, many new bloggers set their financial goals as achieving their first 100K by the age of XX. This age is getting younger from 30 to 28 to even below 25. Many years back, I also set this similar goal and achieved it at the age of 28. </p><p>Something miraculous happens when we start to set goals. When you set a goal, your brain first evaluates the goal and start to plan how to reach there. Somehow or another, you'll realise if you're focused on your goals, your subconscious mind will think of new ideas and strategies to achieve it. When I was a secondary 4 student about to take my O levels, the school sent us on a motivational camp in a spur to help us achieve better results. I was from a neighborhood school (which surprisingly is no longer there now due to school merger in a short 10+ years), my results were average and often failed in many of my subjects. The worse thing is while I failed some of my subjects, I sometimes could still be the top 5 in my class. That's how bad all my classmates results were too. </p><p>I had low self confidence and didn't think I would achieve much in life, same for the friends around me who are all just happy with average results. We didn't even think if we would have a future. </p><p>During the motivational camp, the instructor asked everyone what all of us want to do for our future. He specifically went round each one of us to ask what's our ambition. One by one, each of us shared what we wanted to do. There are people who say they want to be admin staff, teachers, security officers, police officers etc.. Each one of the ambition, he challenged us to aim higher. For example, when someone says he wants to be a security officer, then he'll say why not you aim to be a security supervisor. When it was my turn, I said I just want to be a technician. He looked at me and said, "why not an engineer?" This sentenced changed the way I think. It triggered a response in my brain to think higher. Eventually, I passed all my subjects and went on to be an engineer for 6 years. I may have been just a technician if not for that challenge. </p><p>The key to success is opening up our minds to greater things. If you've watched Bling Empire on Netflix, you'll realise the 2nd generation kids, who have rich and successful parents, are also very good in earning money themselves. They have seen their parents make a lot of money and believed they too could make a lot of money themselves. On the contrary, a child from a poor family may be limited by their thinking as they see their parents struggling to make ends meets. They would think they can only make a limited amount of money in life. But, the good news is this can be changed by changing the way we think and conditioning our mind to see greater things. </p><p>Failure is not when we set too high goals and can't achieve it but it is when we set too low goals and achieve it. This phrase changed the way I think into believing greater things. Setting higher goals can really propel us to reach it even if it seems impossible. </p><p><br /></p><p><b><span style="font-size: large;">How To Set Goals To Achieve What You Want?</span></b></p><p><b>1. Think about what you want to achieve</b></p><p>This first step may seem like common sense but it is critical as this is the stage you should open up your mind and imagine the impossible. There are many advise out there which recommend setting realistic goals but this will again limit our minds. </p><p>If you want to set a goal to achieve $1 Million in your 40s, put this in your mind first and don't think about how it is impossible or how tough it is to achieve it. Just put in on paper first and start imagining the possibilities.</p><p><br /></p><p><b>2. Make your mind believe it can happen</b></p><p>When you set a goal and make your mind believe it can happen, your subconscious mind will start to think of ways to achieve it. The best way to make your mind believe it can happen is to look at other real life people who have done it before. Source from the internet those who have become millionaires at a young age and this will make your mind believe it is possible as others have done it before. </p><p><br /></p><p><b>3. Set milestones to know you are on track</b></p><p>The next crucial step is to set in between milestones so that you can review every 3-5 years to see if you are on track. Setting a goal of 1 Million by your 40s can have $100K, $300K, $500K in your 20s, 30s as milestones. For example, you can set $100K by age 28, $300K by age 33, $500K by age 38 before hitting $1 Million in your 40s. This is just an example of financial goals setting but the same principle can be applied for any other personal goals which you can to achieve. If you want to be healthier, you can set a goal to lose 10kg in 5 years and achieve 2kg in year 2, 5kg in year 3, 7kg in year 4. </p><p><br /></p><p><b>4. Make it specific to visualise how it can be achieved</b></p><p>Achieving goals now lies in the details of the specific ways to achieve it. Let's go back to the example of achieving $1 Million in your 40s. You'll need to know exactly how much income, how much you need to save and invest to actually reach this target. Without this visualisation, you will not know what to do. If you look at my <a href="https://sgyounginvestment.blogspot.com/p/my-goals.html" target="_blank">financial goals</a>, I break it down into specifics of how much income I should be earning, how much I can spend, how much I should save and how much investment returns I should be getting. </p><p>Once you write down the specifics, for example, earning $5K income, your subconscious mind will think of ways to achieve it and go along that path. In the midst of your journey, your mind will let you know which is realistic and which is not. For example, if you put an investment return of 15%, then along the way you may realise that it is not sustainable and focus on earning more income or controlling some spending instead which is more attainable. Your specific steps on how to achieve your goals will change along the way and that's ok because your end goal is still the same, just the strategy changed. </p><p><br /></p><p><b><span style="font-size: large;">Setting a goal of $100K annual dividends. Is it achievable?</span></b></p><p>I now have a dividend income target set for myself below. The dividend income goal should reach $60,000 per year, equivalent to $5000 per month when I reach the age of 50. If I continue working till my 60s, I would be able to achieve a more than $100K dividend income. Is this achievable? Yes it is as I've seen many people who have achieved it and I've also put it in a spreadsheet on how much I need to earn, how much I can spend and how much investment returns I need to get to achieve it. The dividend yield is based on 5% to achieve what I have set out below. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbo7S00LfENI7FCUZvMZVVtes7g_BU2X4rBGy7_kl8PD6eq-0HeUkh62BKAA_VHH4TtLKciex_6Qs4XNCvAilj9q7QkUab2YILm4sFpe2L3TTOxvxLBzl5D7kMln1GxZ9zz6rSQGyIR4EO/s413/dividends.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="283" data-original-width="413" height="274" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbo7S00LfENI7FCUZvMZVVtes7g_BU2X4rBGy7_kl8PD6eq-0HeUkh62BKAA_VHH4TtLKciex_6Qs4XNCvAilj9q7QkUab2YILm4sFpe2L3TTOxvxLBzl5D7kMln1GxZ9zz6rSQGyIR4EO/w400-h274/dividends.jpg" width="400" /></a></div><div><br /></div>Anything is possible as long as we set the goal to achieve it. It may be a long journey and many people will give up halfway. The one who persevere till the end will reap the rewards of achieving that goal. <div><br /><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-27688159595339309382021-03-02T17:00:00.074+08:002021-03-02T17:00:00.348+08:00Building a 5 figure dividend portfolio<p>7 years ago when I started this blog, I wrote about the start of my financial journey towards financial freedom. Being consistent is not easy, painstakingly building up my net worth and investing in boring stocks throughout the years. The financial goals I set for myself in my financial goals page were met surprisingly even without me actively tracking it. As I approach age 33 this year, I am thankful for all the knowledge I've learnt through other blogs, friends and learning while writing too. </p><p>Back in 2013, I was inspired by financial bloggers who manage to have 5 and 6 figure dividends from stocks annually. While most people just save enough money for retirement in their old age and start to draw down their savings during their retirement years which can probably last about 10-20 years only, this group of bloggers were able to retire earlier with 6 figure ($100K+) annual dividend income which can last for a lifetime. I thought this was a good method to journey towards financial freedom. It is easy to visualise and plan for the future with dividend income method. After 7 years, I managed to finally achieve a 5 figure dividend portfolio from stocks although this is still many years away from the financial freedom target. </p><p>While this 5 figure dividend income may seem like its a lot for many people, it is actually just a basic requirement for financial planning. Moving forward, I expect most of my savings to come from dividend income as expenses will take up almost all of my monthly net take home pay. I can imagine people who do not invest will have problems reaching their retirement goals in the future as inflation continues to kick in and cost of daily living goes up even higher.</p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-f3_qJ3k0BHxApyOX5LNY9zW-koS1J1X3n8btyrIOuQYuled9i-TbNcOHliq3wzKvZrQnG-j8D5eU_XBTTlEJCEPfxhTDkic3OpoUvndVWHfU5pJyJos91z37mQSS1vA0mhfLJkeF6PPr/s721/dividends.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="500" data-original-width="721" height="444" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-f3_qJ3k0BHxApyOX5LNY9zW-koS1J1X3n8btyrIOuQYuled9i-TbNcOHliq3wzKvZrQnG-j8D5eU_XBTTlEJCEPfxhTDkic3OpoUvndVWHfU5pJyJos91z37mQSS1vA0mhfLJkeF6PPr/w640-h444/dividends.jpg" width="640" /></a></div><p>My dividend income from stocks is projected to surpass $10K for the year 2021. This is done base on conservative estimates as most stocks have cut dividends starting from 2020. The dividends may come in higher if economic recovery happens this year and beyond. Let me share how is it possible to build a 5 figure dividend portfolio.</p><p><br /></p><p><span style="font-size: large;"><b>Build up your investment capital</b></span></p><p>When we first started out investing in stocks, the dividends from stocks will definitely be low. On a conservative basis, most investors should aim for around 5-6% dividend yield for your portfolio. Higher yield doesn't mean its always good as there is risk investing in high yield stocks too. </p><p>With 5-6% dividend yield, a $100K portfolio will give you $5000-$6000 in dividends annually. To build up a 5 figure dividend portfolio, you need $200K and more. It is therefore important to set goals to build up a sizeable investment capital when you first start your financial freedom journey. This can be done through finding ways to increase your income, saving up more and investing in growth stocks to compound your money. </p><p>At the start, my dividends from stocks was only $1K+. It steadily increased to $2K, $3K, $4K before hitting more than $10K. Dividends from stocks can only go up with more investment capital. This is why it is important to focus on building up a sizeable investment capital for dividend investing. </p><p><br /></p><p><span style="font-size: large;"><b>Invest in good dividend stocks</b></span></p><p>After you have a sizeable investment capital, you can look to invest in good dividend stocks. Take note that a dividend portfolio is built up over the years and not when you have a lot of money then you start to invest in stocks. The reason is that when you have the money, stocks may be at high valuations and thus dividend yields may be lower too. It is important to invest consistently to build up our dividend portfolio as stocks valuations become depressed. </p><p>Most investors looking to build a dividend portfolio will invest in REITs or business trusts. The more common ones are shopping malls, commercial offices and industrial buildings. REITs need to payout at least 90% of the rental they collect from tenants to shareholders. A good dividend stock should be able to grow distribution per unit (DPU) consistently. For REITs, they can do so through asset enhancement initiatives (AEI) or DPU accreditive acquisitions. REITs also grow their DPU is their rental reversion is positive. This means they are able to increase the rent charged to their tenants when renewal comes. REITs which have properties at good locations are able to command higher rents over the years. </p><p>Besides REITs, we can also invest in other stocks too. Some big companies do pay good dividends too with growth potential also. Stocks such as Comfort Delgro and Jardine Cycle & Carriage are currently trading at low prices due to the COVID-19 pandemic. Comfort Delgro has dividend yield of 6.5% whil Jardine C&C has dividend yield of 5.5% based on their 2019 dividend payout. If we believe that their stock price and dividend will recover back to 2019 levels after the COVID-19 pandemic, then these are good opportunities to accumulate such stocks to have both good dividend yields and capital gains as well. </p><p><br /></p><p><span style="font-size: large;"><b>Manage risks by diversifying</b></span></p><p>Some investors may not believe in diversifying into multiple stocks to manage risks for a dividend portfolio. For me, I would think this is important as without diversification, the dividend portfolio may be destroyed in future. </p><p>There are some dividend stocks like Eagle Hospitality Trust and Lippo Mall Trust which had their value depressed to point of no return. These stocks were trading at impressive yields of 8-10% at a point in time. But their stock value decreased by more than 50%-80% which negated all the dividends collected for many years. Eagle Hospitality Trust was even halted. If we had heavily invested into the wrong dividend stocks, the dividend portfolio would be destroyed. </p><p>We would want our dividend portfolio to be as stable and as sustainable as possible for the longest time possible. Ultimately, the dividend portfolio is suppose to supplement our income for financial independence and the end goal is to achieve financial freedom living on a substantial 5-6 figure dividend income for the rest of our life. </p><p><br /></p><p><span style="font-size: large;"><b>Final words - Don't just focus on dividend investing only</b></span></p><p>While dividend investing is a slow and steady way to build wealth with about 5-6% yields, we should not focus on dividend investing only when we are younger and do not have a sizeable investment capital. We should also include a mixture of growth stocks in our portfolio to compound our money faster. With a combination of dividend and growth stocks, we should be able to aim for 8% or more investment returns on a sustainable basis. This will enable us to build wealth faster through investing. </p><p>I have done many projection before and have proven that without investing, it is very hard for many of us to build wealth enough for retirement unless we earn an extremely high income of more than $10K per month and save enough of it. Investing is an important part of wealth building and so is increasing our income. With an extremely low income, it is also hard to accumulate enough for retirement even if we are very good in investing. We need to have a balance of both.</p><p>If you're looking to build a sustainable investment portfolio, patience is key and staying invested in the market will enable us to build wealth and compound it over the years. In this way, we will definitely have enough for retirement and even more for financial freedom. The journey towards financial freedom continues.... </p><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com13tag:blogger.com,1999:blog-3276688108456391559.post-184110598730136492021-02-02T21:15:00.001+08:002021-02-02T22:17:06.020+08:00Is The Market At Euphoria Stage Now?<p>The stock market is going through some crazy ride in the past few weeks. I'm seeing lots of new investors entering the market to make as much money as they can for fear of losing out. When I look through Facebook, I can see some friends who have not invested before coming into the markets and showing how much money they have made through stock trading. Just yesterday, the Straits Times reported a NUS undergraduate who accumulated $100,000 gains through the hot stock, GameStop, by investing only $20,000. These are signs that the market is going through a Euphoria stage.</p><p>With social media and the internet, information spreads very fast where people will follow news and get into the market without researching much into a company's fundamentals. This was seen from GameStop where the stock price rose from about $18 at the end of December 2020 to $347 at the peak in Jan 2021, all these >1000% returns in a short span of less than a month. However, as with any markets, what goes up will definitely come down when there is no fundamentals for it. There are already people who tried to invest in GameStop at $300+ and got burnt when the price now is only $100+. </p><p>In market psychology, this is known as Euphoria which is the riskiest time to invest in. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeTjUvYUT__9CEIXkjd82HuDigp_1JLDHzvsvlN7-Oe6-9TxFLs2ph9RSm79lbGiFy_jmTynPMji2p3dnHgm83dZmditaNsv4eWnLYcB5JDgujw3TLT0By_aSJFpnNnu3HdCnHlk9Xqt8d/s1226/investor-sentiment-during-market-cycles.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1029" data-original-width="1226" height="538" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeTjUvYUT__9CEIXkjd82HuDigp_1JLDHzvsvlN7-Oe6-9TxFLs2ph9RSm79lbGiFy_jmTynPMji2p3dnHgm83dZmditaNsv4eWnLYcB5JDgujw3TLT0By_aSJFpnNnu3HdCnHlk9Xqt8d/w640-h538/investor-sentiment-during-market-cycles.png" width="640" /></a></div><br /><p>The stock market is often deceiving and any profits can be gone in an instant. Paper gains will forever be on paper only unless we sell the stock and lock in the gains. Seeing the excitement in the market growing stronger, I've began to take profits on the stocks I have and lock in the gains. I believe there will be some retracement soon but the general market sentiment will still be up as we recover from the COVID-19 pandemic. This may take awhile though so while we await the recovery, there will still be opportunities to invest in good stocks.</p><p>In the span of less than a year, we have seen some stocks recovering back to their pre-covid levels for the STI. Those who have invested at the low would have gained around 30% returns. While this investment returns is nothing as compared to the 1000% made in some Euphoria stocks, we are at least assured that what we are investing in has fundamental value for the long term. </p><p>In times of market mania, we should remind ourselves that what matters is long term investment returns as opposed to fast money from short term gains. While it is tempting to join in the excitement and get fast money, we should limit our exposure for speculative investing to money which we can afford to lose. It is ok to join in the fun but remember this fun can burn anyone if they're not careful. </p>This market mania will certainly end one day. When the time comes, we will be happy we did not throw in our life savings and lose it all to speculative investing. <div><br /><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com2tag:blogger.com,1999:blog-3276688108456391559.post-55857386248705101912021-01-17T17:42:00.001+08:002021-01-17T21:56:49.892+08:00My Experience Planning A Wedding During COVID-19I breathe a sigh of relief that I could hold my wedding during the COVID-19 pandemic. So many things happened in the past 1 year which troubled and worried me so much. Firstly, our wedding had to be postponed from July 20 to Jan 21. It was the hardest decision I've ever made. We didn't even know when to postpone our wedding to as we're not fortune tellers and do not have a crystal ball to see what is going to happen for this pandemic. <div><br /></div><div>Making the decision to postpone the wedding was coupled with the mad rush to contact all the vendors to check on the availability of dates. I had the fear that many couples are also postponing so it will be hard to get any dates in 2021. We contacted about 5 vendors we had engaged and luckily all were able to accommodate our new date in 2021. </div><div><br /></div><div>With postponement, cost increase is also a factor and the fear of any of the wedding vendors going bust and thus losing our deposits. I have paid a few thousand dollars in deposits to several vendors already including the bridal shop where I had sign up a package for the gowns, suits, actual day photography. Thankfully, non of our vendors went bust by the time we held our wedding. </div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8JmKoyylL6z0uJOeuosEPUdewyusWxCK3vX9rVT_OYEsv1yRcFlL3KqDZfG6AEW_F_PK6HIqedjq1okiWN8e0gL7ZHurpY6SOgxpfOFm0b8rGA4tyB4krkXutCu1BViVKvYufvCA0Qr4Y/s269/married.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="187" data-original-width="269" height="278" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8JmKoyylL6z0uJOeuosEPUdewyusWxCK3vX9rVT_OYEsv1yRcFlL3KqDZfG6AEW_F_PK6HIqedjq1okiWN8e0gL7ZHurpY6SOgxpfOFm0b8rGA4tyB4krkXutCu1BViVKvYufvCA0Qr4Y/w400-h278/married.jpg" width="400" /></a></div><br /><div><br /></div><div><b><span style="font-size: large;">Experience with Hotel venue</span></b></div><div>COVID-19 has affected the hospitality business in a huge way. For hotels, they do not have any tourists coming to stay and events were also not allowed to be held. For weddings, the number of attendees was limited to 50 initially then increased to a max of 100 now. </div><div><br /></div><div>We chose Hilton Singapore as our wedding venue 3 years back. This became the best decision we ever made. We were served by the wedding sales executive at the point of signing the contract and paying the deposit. Few months before our wedding, the sales executive went on maternity and we were than served by the sales manager. We postponed our wedding to 2021 and never heard from the sales executive nor the manager anymore from then on. I guessed they were either laid off or transferred to other roles. Blessings in disguise, we were now served by the sales director, Anthony, who provided us the best service we could ever ask for. </div><div><br /></div><div>We heard of many hotels starting to increase price or cut the perks as the number of tables were reduced. Many people decided to cancel their banquet but could not get back their deposits at all. Some had their 1 night stay in the bridal suite cancelled, others had their price per table increased by 20% or the wine and beer perks taken away. Hilton did not increase our price per table or take away our perks. Instead, we got more perks and experienced the most flexibility in table arrangement which we could ever ask for. Due to social distancing, the number of pax per table could only be a max of 8. Hilton used our per table price which we signed up back then and divided by 10 to derive the per head cost. They then allowed us to be flexible in assigning any number of guests per table and only charge us base on per head. So, I had some tables with 5 guests, some with 6, 7 or 8. They even went the extra mile to not charge for toddlers as long as we tell them not to serve food for them. This could not have happened in the past as most hotels will charge by per table of 10 persons regardless of how many guests were seated on each table that day. </div><div><br /></div><div>Besides being flexible with the table arrangement, the sales director often calls me to assure me and update me on any changes to government regulations. We wanted an additional night before the day of the wedding so that my wife could do the make up at the hotel itself on the actual day and were prepared to pay for the extra room night. To my surprise, Hilton offered the additional room without any charge. It was initially using the day use room which we have in our package for the additional 1 night but the sales director once again thought for us and mentioned it will be difficult to move our things from the day use room to the bridal suite so he initiated to let us have the additional night on the day before at the bridal suite instead. This made it so much better for us on the actual day as we had many items in the room. If we had to move the items from one room to the other, it would not have been a good experience. </div><div><br /></div><div>We had a live band package which we signed up for and this was converted to virtual live band instead due to government regulations of no live performance for weddings. Hilton initiated to help us contact our virtual live band vendor to test the connection just in case it doesn't work. On the actual day, our banquet manager Hasan and sales director Anthony were there to ensure everything is ok. They took care of our solemniser to ensure he has a space to park at L1 VIP lot so that he can arrive on time and contacted my sister in law to pick up my parents in law when they arrive. I'm not sure if this is the practice for most hotels in Singapore when it comes to service excellence but I really felt like a VIP on that day. I felt that Hilton has way exceeded my expectation on service standards and would like to express my appreciation for all that they have done for us in the midst of having our wedding during COVID-19.</div><div><br /></div><div><br /></div><div><b><span style="font-size: large;">Experience with virtual live band</span></b></div><div>Many wedding banquets have live bands nowadays to make it more lively. Me and my wife signed up a package for live band with Musical Touch more than a year back. Unfortunately, due to COVID-19, live band was not allowed but virtual live band was proposed for us. So, our vendor actually rented a studio and had the live band livestreamed to our wedding venue. I was initially skeptical of whether such arrangements would work as there are many considerations such as whether it will be as engaging, whether the sound quality will be good and whether the internet connection will be stable etc. To my surprise, everything went well that day. The virtual live band had good sound, it sounded like they were there on that day. There was no lagging or cut in internet connection also. </div><div><br /></div><div>We initially signed up for a 2 piece band only with emcee service. The singer was supposed to double up as the emcee for our wedding. However, as the singer could no longer be here at the venue, the vendor had to arrange for a separate emcee to come down. There were additional cost due to this arrangement. We were initially not too happy about this as who would like to fork out additional money when its not what you wanted but Musical Touch patiently explained to us the reasons. We had several exchanges before we came to the decision to fork out the extra cost to continue with the virtual live band and emcee service. This vendor was sincere and really provided good services on that day. They even had an additional coordinator came down that day to ensure the coordination for the march in songs and accepted songs dedication as per normal. I would definitely recommend Musical Touch for anyone who wants a virtual live band for your wedding during this COVID-19 pandemic. </div><div><br /></div><div><b><span style="font-size: large;">Cost of wedding</span></b></div><div><span>A wedding is often the first money bomb in our lifetime. I wrote an article 6 years back in 2014 on how much money is needed to get married and start a family in Singapore. Here is the article: <a href="https://sgyounginvestment.blogspot.com/2014/03/how-much-money-is-needed-to-get-married.html">https://sgyounginvestment.blogspot.com/2014/03/how-much-money-is-needed-to-get-married.html</a></span></div><div><span><br /></span></div><div><span>The cost of wedding I calculated back then was: </span></div><div><span><br /></span></div><div><span><b>Cost of wedding after collecting Ang Baos: $19,000-$26,000. </b></span></div><div><span><b><br /></b></span></div><div><span>This cost included honeymoon which we couldn't go for due to COVID-19. If we add in a honeymoon cost of $5K-$10K, the cost I would have spent for wedding is in the range of $13K-$18K after deducting the ang baos collected. Yes it does cost 5 figure to get married in Singapore but I think all these cost are worthwhile to spend for your once in a lifetime occasion. I could also afford this amount as I've saved up significantly over the years since I wrote the above article and am fully prepared for the cost needed. It would not be advisable for anyone to take a loan for a wedding if you do not have the savings for it. </span></div><div><span><br /></span></div><div><span>All in all, we did not regret having our wedding at a 5 star hotel with all the good services which we needed to make the day better. We were happy, our guests were full of praise for the food and service and were happy too. This will definitely be something memorable when I look back in the future. </span></div><div><span><br /></span></div><div><span><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div></div></span></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com4tag:blogger.com,1999:blog-3276688108456391559.post-52952017969907514102020-12-23T18:00:00.001+08:002020-12-23T18:00:02.399+08:00End of year 2020 - My Reflection On This COVID yearJust like that, 2020 is coming to an end. This year proved itself to be a year of surprises. This definitely isn't a normal year which we would go through as the whole world practically descended into crisis. Luckily for us in Singapore, the disease outbreak is mostly under control and we've not seen multiple waves as compared to other countries. Nevertheless, we have transitioned into a new norm of living with social distancing, wearing of mask and limitation on gatherings still in place probably for another year ahead.<div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWutoruvuBE6-I5-92oEcNwLZc7KyLX8Ic9mZ_pRHXnobQkIZsVimZiEBfZ7ld_y9OuNb43X_lJQhkK-gd98mn-qXCEfM6UL38ogY9ZBy1RdasfKgtBlNBrcQ6ADCTeWMZoZwbvqDhJfl9/s1024/reflections.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="683" data-original-width="1024" height="426" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWutoruvuBE6-I5-92oEcNwLZc7KyLX8Ic9mZ_pRHXnobQkIZsVimZiEBfZ7ld_y9OuNb43X_lJQhkK-gd98mn-qXCEfM6UL38ogY9ZBy1RdasfKgtBlNBrcQ6ADCTeWMZoZwbvqDhJfl9/w640-h426/reflections.jpg" width="640" /></a></div><br /><div><br /><div><br /></div><div><b><span style="font-size: large;">What I learnt in year 2020</span></b></div><div><b><span style="font-size: large;"><br /></span></b></div><div><span>2020 would be a year I will never forget. For both my personal and working life, I had to make tough decisions which was not easy. I was suppose to get married this year with almost everything all planned out. Me and my fiancee made the decision to postpone our wedding 3 months before our big day. Luckily we did that else we wouldn't be able to hold a wedding during the circuit breaker anyway. </span></div><div><span><br /></span></div><div><span>For my working life, this is the year which I pushed myself so much that I didn't take a single annual leave at all. This is the first time in my 10 years of working life that I didn't take any leave. Working in healthcare supporting COVID operations in the frontline is never easy. There were several times which I felt totally burn out and wanted to give up but I pushed myself to continue. It was mentally and physically exhausting. I'm glad that the situation is much better now. Looking back, I learnt how much I could actually push myself. I realised how much more I could do, pushing myself to the limits. Of course, this could not be achieved without the support of my fiancee, family, friends, colleagues and even the whole nation coming together as one. During a crisis, work becomes very different. We had SOPs to follow but also had to make critical decisions when situation changes. Policy changes becomes a weekly affair too where we had to adjust to changes almost every other day. </span></div><div><span><br /></span></div><div><span>The good thing about working in healthcare is I didn't have to worry about whether my salary or bonus will be cut. My salary remained intact and bonus was not cut. Because of this, I took the risk to invest more of my savings when the stock market dropped drastically. The ride was really wild as stocks continued to drop every time I bought a new stock. There were times I doubted myself whether am I doing the right thing as I see losses accumulating. Facing a tough personal life, I had moments of depression where I couldn't sleep well at night which was worsen by the losses from my investments.</span></div><div><span><br /></span></div><div><span>Fortunately, the stock market has recovered and my portfolio went back up higher than the beginning of this year. All the losses have reversed and turned into profits. I believe this is only the beginning of the recovery and there is still much room for stocks to run up. </span></div><div><span><br /></span></div><div><span style="font-size: large;"><b>Income and expenditure update</b></span></div><div><span style="font-size: large;"><b><br /></b></span></div><div>For the year 2020, my income from employment continues to grow. Total income grew 13.8% as compared to year 2019. Other income drop slightly as I had lesser time for income generating outside of work and also dividends from stocks were mostly cut this year due to the economic uncertainty. Expenses also dropped as I did not travel this year and also partly because of the circuit breaker and work which I did not go out for any social gatherings for a few months. </div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKBTsl3IK2g7SvrMyCuuSNb4v8uFXWDjWu_6vjCy-tXnme9YXkC_rVY9ZQ6778EWX-ibKAHQfJ_XQbzmYn_Fn8-DCljTiW-K7Uix8a9vJIEcjfuNiQCDMlyFbdmeMUl_LR5Tv-geQX9Mab/s715/income+and+expense+2020.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="500" data-original-width="715" height="448" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKBTsl3IK2g7SvrMyCuuSNb4v8uFXWDjWu_6vjCy-tXnme9YXkC_rVY9ZQ6778EWX-ibKAHQfJ_XQbzmYn_Fn8-DCljTiW-K7Uix8a9vJIEcjfuNiQCDMlyFbdmeMUl_LR5Tv-geQX9Mab/w640-h448/income+and+expense+2020.jpg" width="640" /></a></div><br /><div><span style="font-size: large;"><b>Stock Investment Performance</b></span></div><div><span style="font-size: large;"><b><br /></b></span></div><div>For investing, I kept to my believe that the best time to invest is when there is a crisis. I've been waiting for such a time like this for the longest time ever since I started investing more than 10 years ago. There were some small crisis during the 10 years but this is one of the crisis which I've never encountered before. </div><div><br /></div><div>As you can see from the blue line representing my stock portfolio value, it has increased by more than 2 fold as I injected more capital every time the stocks drop lower. As the red line (representing portfolio time weighted returns) dropped, I put in more money and thus my portfolio value still went up even though stocks drop a lot. I have seen wide swings in my portfolio to the tune of $50K just this year alone. Not an easy journey I must say but this has made me a better investor to be able to control my emotions better. I learnt not to panic sell stocks during such times and really need to patience to ride it through.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWZ0WBaNz-f4Q_3Opy8Ac70VfE9w0Ef3QifmnmDiFl5Xzr-te0_6TTZPNdHEHB6w6ZfZ0oceeLqSrtv93FKeU4CIDvln6x_pdwy73uaU7vf8273cXwm1vIZvETMpGCCLE1GgoBiW2wx223/s1895/stock+performance.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="837" data-original-width="1895" height="282" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWZ0WBaNz-f4Q_3Opy8Ac70VfE9w0Ef3QifmnmDiFl5Xzr-te0_6TTZPNdHEHB6w6ZfZ0oceeLqSrtv93FKeU4CIDvln6x_pdwy73uaU7vf8273cXwm1vIZvETMpGCCLE1GgoBiW2wx223/w640-h282/stock+performance.png" width="640" /></a></div><br /><div>With the support from other financial blogger friends, all of us got excited and invested more as stocks drop. This proved to be the right thing to do when stocks are on a great discount to their valuation. Nevertheless, it is still hard to know which company will survive at that point in time. I had stocks like SATS and hospitality Reits which were the hardest hit. Stocks like these have also recovered back to the price which I bought them at. The whole wait took about 6-9 months for it to turn around. At that point in time when I invested in these companies, the outlook was bleek and future was unknown. There was even fear whether the companies would survive. Looking back, there was definitely risk involved. It may still be risky now as borders have largely remained close and tourism is almost non existent. </div><div><br /></div><div><b><span style="font-size: large;">What's in it for us in 2021?</span></b></div><div><b><span style="font-size: large;"><br /></span></b></div><div><span>While the stock market has recovered and a vaccine is underway to control the outbreak, there is still uncertainty over the impact this outbreak will bring to the economy. There might be permanent shift in certain industries due to disruptions and accelerating of technological advancements. </span></div><div><span><br /></span></div><div><span>Will travel resume in 2021? I certainly hope so as the urge to have a good break and exploring new places keeps coming back. It might take awhile for normal travel to resume though as the start of borders reopening will certainly face with some hiccups and also travelling cost will definitely be much higher initially due to pent up demand. </span></div><div><span><br /></span></div><div><span>Nevertheless, holiday season is here and its short working week for the rest of the year till 2021. Here's wishing all readers a Merry Christmas and Happy New Year. Have a joyous celebration with your friends and family members but do remember to stay safe too! </span></div><div><span><br /></span></div><div><span><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div></div></span></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-68265012052754588852020-09-22T17:30:00.005+08:002020-09-23T08:46:28.827+08:00Taking A HDB Loan - Should I Wipe Out My CPF OA?<p>Starting from August 2018, we do not need to wipe out our CPF OA anymore when taking a HDB loan. Now, we can have the flexibility to leave up to $20,000 in our CPF OA when we take a HDB loan. For a couple, this means a total of $40,000 in their CPF OA ($20,000 each). </p><p>The question now will be should we wipe out our CPF OA or leave $20,000 in our account? Leaving $20,000 in our CPF OA means taking up a higher mortgage loan and paying more loan instalment and interest per month. This may not be a bad thing. Let's look into detail on this. </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9YyvEYkrNXflZaKWYrHuTsTpWfrWJs2IIArB3urqZ_QeEt-1dPLQh5BXoy8kRPrtZF_lAWtoBoqj7GUXh_KMuX9xFWSeJC9gX7pt7HwJ0izZ3gTaYDuE9M2n_MnC5Gew7IU4AGQ6nXA8s/s1001/hdb.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1001" data-original-width="1000" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9YyvEYkrNXflZaKWYrHuTsTpWfrWJs2IIArB3urqZ_QeEt-1dPLQh5BXoy8kRPrtZF_lAWtoBoqj7GUXh_KMuX9xFWSeJC9gX7pt7HwJ0izZ3gTaYDuE9M2n_MnC5Gew7IU4AGQ6nXA8s/w320-h320/hdb.jpg" width="320" /></a></div><h2 style="text-align: left;"><span style="font-family: arial; font-size: x-large;">Setting out the scenario</span></h2><div>Let's assume the following scenario for a couple who has bought a house and looking to take HDB loan:</div><div><ol style="text-align: left;"><li>Bought a house at $400,000</li><li>Has $100,000 each in CPF OA</li><li>Wants to take HDB loan at 2.6%</li></ol><div>Now, this couple wants to consider whether to leave $20,000 each in their OA or wipe out totally to pay lesser monthly instalment? </div><div><br /></div><div>If they wipe out their CPF OA and take a loan of $200,000 for 25 years, their monthly loan instalment will be $908/month. </div></div><div><br /></div><div>If they leave $20,000 in their CPF OA each (total of $40,000) and take a loan of $240,000 for 25 years, their monthly loan instalment will be $1,089/month. </div><div><br /></div><div>Looking at the above, most couple will choose to go for the lesser monthly loan instalment right? It seems like a logical choice but unfortunately logic does not always prevail. </div><div><br /></div><h2 style="text-align: left;"><span style="font-family: arial; font-size: x-large;">Interest gained for $20,000 left in CPF OA </span></h2><div>The decision now is whether to leave $20,000 in CPF OA. First, we must know how much interest we would have gained if we leave it in CPF OA. Here's a table to summarize:</div><div style="text-align: left;"><br /></div>
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<thead><tr class="tableizer-firstrow"><th></th><th>$20,000 @ 2.5%</th></tr></thead><tbody>
<tr><td>15 years</td><td> $9,088 </td></tr>
<tr><td>20 years</td><td> $12,957 </td></tr>
<tr><td>25 years</td><td> $17,341 </td></tr>
</tbody></table><br /><div>The above is the interest we would have gained for leaving $20,000 in CPF OA for 15, 20 and 25 years at 2.5% interest. Doesn't look a lot but let's move on to how much more interest we would have paid if we take up a bigger home loan if we have not wiped out our CPF OA. </div><div><i><br /></i></div><div><i>*Do note that CPF OA is actually giving 3.5% interest for the first $20,000 so the amount should be larger.</i></div><div><i><br /></i></div><h2 style="text-align: left;"><span style="font-family: arial; font-size: x-large;">Interest paid on $240,000 vs $200,000 home loan</span></h2><div>In order to know whether it is good to leave $20,000 in our CPF OA accounts, let's take a look at the interest we would have paid on a $240,000 vs a $200,000 home loan. </div><div style="text-align: center;"><br /></div>
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<thead><tr class="tableizer-firstrow"><th></th><th>25 years</th><th>20 years</th><th>15 years</th></tr></thead><tbody>
<tr><td>$200,000 </td><td>$72,121 </td><td>$68,711 </td><td>$59,081 </td></tr>
<tr><td>$240,000 </td><td>$86,618 </td><td>$82,497 </td><td>$70,921 </td></tr>
</tbody></table><br /><div>The above shows the cumulative interest paid for a $200K vs $240K home loan for 25, 20 and 15 years at 2.6% interest rate. Now, let's calculate how much more interest we would have paid on a $240,000 home loan should a couple not leave $20,000 in each of their CPF OA. </div><div><br /></div>
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<thead><tr class="tableizer-firstrow"><th></th><th>25 years</th><th>20 years</th><th>15 years</th></tr></thead><tbody>
<tr><td>Additional interest on $240K vs $200K loan</td><td>$14,497 </td><td>$13,787 </td><td>$11,840 </td></tr>
</tbody></table><br /><div>Now, the additional interest paid on that additional $40,000 loan doesn't seem like a lot. Will the interest gained on the $20,000 each in a couple's CPF OA be more than the above interest paid?</div><div><br /></div><div>Let's bring the numbers together. </div><div><br /></div><h2 style="text-align: left;"><span style="font-family: arial; font-size: x-large;">Taking HDB Loan - Should I Wipe Out My CPF OA?</span></h2><div>Now, with all the calculations, will we see higher interest gained for leaving the $20,000 in our CPF OA? The answer is yes. Let's look at the table below. </div><div><br /></div><div><br /></div>
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<thead><tr class="tableizer-firstrow"><th></th><th>25 years</th><th>20 years</th><th>15 years</th></tr></thead><tbody>
<tr><td>Additional interest on $240K vs $200K loan</td><td>$14,497 </td><td>$13,787 </td><td>$11,840 </td></tr>
<tr><td>Interest gained in CPF OA ($20,000 each for couple)</td><td> $34,681 </td><td> $25,915 </td><td> $18,177 </td></tr>
<tr><td> </td><td> </td><td> </td><td> </td></tr>
<tr><td><span style="color: red;">Net Interest gained for leaving $20K in CPF OA</span></td><td><span style="color: red;"> $20,184 </span></td><td><span style="color: red;"> $12,128 </span></td><td><span style="color: red;"> $6,337 </span></td></tr>
</tbody></table><br />While the net interest gained is more for the above, we still have to consider the higher mortgage paid per month for taking a $240,000 loan vs a $200,000 loan. The difference in monthly instalment is $1089-$908=$181 per month for 25 years mortgage. This sum will be left in our CPF OA earning 3.5% interest which can be quite significant. <div><br /></div><div>Apart from the interest point of view, leaving $20K in our CPF OA can be used as emergency fund just in case when we lose our job later. If we do not have leftover in our CPF OA, then we will have to pay our housing loan in cash at that time which makes it worse for our financial circumstances during that tough period. <br /><div><br /></div><div>CPF OA monies can be invested as well for sums more than $20K. Leaving $20K in oir OA will enable us to invest the accumulated sums thereafter (above $20K) and may earn more interest higher than 2.5%. However, as with all investments there are always risks involved. </div><div><br /></div><div>Deciding on whether to wipe out our CPF OA is not an easy decision. It depends on what we really want. Nevertheless, this gives us the flexibility to choose based on our risk appetite.</div><div><div><br /></div><div><br /></div><div><br /></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com14tag:blogger.com,1999:blog-3276688108456391559.post-6117578090289782452020-08-24T17:30:00.001+08:002020-08-24T17:30:06.786+08:00Life and Investing In the Midst of A Recession<p>News of what was to come came in early January 2020. Working in healthcare, I first heard of the then Wuhan virus in early Jan. Infectious disease experts in Singapore were already starting to monitor the developments in China very early on and preparing for what was to come. We didn't have the mood to celebrate Chinese New Year and the worrying part is when people around the world travel to different parts of the world during the CNY holidays causing the virus to spread.</p><p>In the midst of CNY, I was busy preparing slides for manpower planning for COVID-19 support. I had to work till midnight for several days. The CNY holidays were totally disrupted for me. The preparation work continued for the rest of the 15 days of CNY and DORSCON was raised to orange in Singapore even before the 15 days CNY was over. I remembered some of my colleagues had arranged reunion dinner with their family on that faithful night but all plans were disrupted. </p><p>The virus was officially named 2019-nCOV in February and then changed to COVID-19 thereafter. The events happened very quickly and caught many by surprise. It sent shock waves to the stock market and every stock went into free fall mode. Many people, including me started to deploy our warchest to buy some stocks at good bargain thinking this virus will pass by in just a few months. The only comparison we had was the SARS virus back in 2003 and the world got out of it in just a few months. </p><p>Little did I know that COVID-19 would cause such massive damage to the economy as compared to SARS. Fast forward 7 months into COVID-19, we are still far from over from this crisis. Retrenchments are intensifying and pay cuts become a common occurence. Our borders are still mostly closed even though there's some good news now that our borders are starting to reopen to revive the tourism, hospitality and aviation sector. This sector contributes about 5% to Singapore's GDP which is somewhat significant. Furthermore, there are repercussions if there are no tourists in Singapore. Tourists contributes significantly when they spend in our country. Without them, many businesses suffer a drop in income and many had to close down as what we have seen. Singapore's domestic market is still too small to sustain our economy for the long run. </p><p><br /></p><p><b><span style="font-size: x-large;">Is this still the best time for investing?</span></b></p><p>Nevertheless, I still think this is the best time for investing. Many investors in the past have said that they will take advantage and find opportunity to invest when a crisis happens. I too was looking forward to a crisis so that I can invest more. When the crisis really comes, it was easy deploying cash into stocks at the start but as the crisis drags on and your portfolio continues to see losses, we also start to doubt our investment thesis whether is it correct or should we even be investing now. I had self doubts too investing in this crisis. Almost all companies have cut dividends. The more than 10% dividend yield we see for some companies when the stock price drop becomes less than 5% now after they cut dividends. Its almost like everything is going against you. </p><p>The good thing now is the companies I invested in, so far non have collapsed in the midst of the crisis. This is especially important as some companies will surely not make it and file for bankruptcy. Big names like Muji, GNC, Hertz have filed for bankruptcy in the US. Recently, Genting HK which owns Dream Cruise and Zouk Singapore also defaulted on its loans. Car sharing firm Smove in Singapore also collapsed. In times like this, it is really important to invest in strong companies with good balance sheet to ensure they can ride out the storm. </p><p>This storm may take some time to pass. Perhaps another 6 months to 1 year from what I read so far. For Singapore, we should be looking at a vaccine nearer to the end of 2021 which is still quite some time from now. For now, we still have to get use to living this different life we have since the start of 2020. I am still accumulating stocks which are at depressed prices now. I still believe in REITs which I had accumulated more of Frasers Centrepoint Trust, Capitaland Mall Trust and Lendlease REIT to larger positions. I have also invested more on hospitality REITs such as CDL Htrust even though the hospitality sector may still take some time to recover. However, the REITs that own hotels are still surviving with profits as they cater for visitors on SHN and foreign workers. I believe once COVID-19 is under control, people will start travelling again. There is definitely pent up demand for travel again.</p><p>I also bought more Netlink Trust as they continue to generate dividends and appear unscathed from the crisis. For recovery plays, I bought in Comfortdelgro at $1.35 as I feel they should be the first to recover and the stock price is really attractive. I also invested in banks such as OCBC and DBS to ride on the banking giants at attractive prices. Lastly, I also made my first investment in US stock in Alphabet Inc which is the Google company we know. </p><p>Nevertheless, my portfolio is still down 15% YTD while the STI is down almost 20%. This is definitely not a good year for investment and who knows how long this will continue on. Reference to the past during the 2008 global financial crisis, the stock market took about 7 months to 1 year to bottom out and recovered furiously thereafter to reach another peak in 1-2 years. I feel the stock market has already bottomed out and bad news are already priced in, not withstanding another shock to the world again. There may still be another slight dip but it should not be as bad as what we have went through thus far. </p><p>Therefore, I do feel this is the best time to accumulate good companies in the next few months. We are so far about 5-6 months from the stock market drop and if history do repeat itself, then it should take another 5-6 months to see recovery. Remember, the stock market is always 6 months to 1 year ahead of the economy. So, the market can be recovering when retrenchments are intensifying and at the peak. This is the nature of investing. </p><p>Life has not been an easy one for many of us this year and it may get worse before it gets better. Nevertheless, when we get out of this crisis, we will become better and life will be back as normal again. As with all other crisis, nothing will be permanent. Those who look for opportunities during a crisis will become better and emerge stronger. Its up to us to take action now in all aspects of our life. </p>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com2tag:blogger.com,1999:blog-3276688108456391559.post-44065558818760266972020-07-06T19:40:00.000+08:002020-07-06T19:40:06.400+08:00Forget About Investments - Look At The Looming Economic Crisis2020 has became the toughest year to live in human history. Virtually everything has changed from the way we work, to the way we shop and the way we could travel. Investing will become the toughest as we brace for a longer depression happening in the economy which means stock prices could take very long to recover. <div><br /></div><div>I was looking at Singapore's GDP forecast by MTI and things don't look rosy at all. Many of you may have lost your job or have your pay cut and bonuses cut too. Those working in hospitality related sectors such as hotels, attractions and those doing events or in the entertainment industry will be affected the most. Singapore's unemployment numbers have not moved up much due to the many temporarily jobs created by the government. This has enabled people to continue earning some money even though their salary may not be as high as what they would have got before they were retrenched. </div><div><br /></div><div>In times like this, if you're working in an industry which is at risk of retrenchment now, its better to prepare your emergency fund for the possibility of a retrenchment later. This will definitely help you to tide thorough when it really happens. We do not want to make the mistake of investing all our savings in the stock market and end up having to sell at a loss when we lose our jobs. I believe the worse is yet to come and companies have not felt the full impact of the crisis yet due to government supporting wages through the jobs support scheme. This is unsustainable and it will be unwise for the government to keep using taxpayers money to fund wages for the long term. We have already drawn $52 Billion from our past reserves and used a total of $92.9 Billion for all the 4 budgets combined. This is at about 20% of our GDP in 2019. </div><div><font size="6"><b><br /></b></font></div><div><b><font size="5">Breakdown of Singapore's GDP</font></b></div><div><br /></div><div>If we breakdown Singapore's GDP, we will know which are the areas affected and why MTI forecasted a contraction of -7% to -4% for 2020. </div><div><br /></div><div>A contraction in GDP means the aggregate value of the goods and services produced within the economic territory of Singapore is decreasing. This means lesser revenue for the businesses which may lead to retrenchments as companies tighten their belts to protect their bottom line. </div><div><br /></div><div>Statistics of Singapore has a very good info-graphics as shown below showing the breakdown of GDP. 70% of Singapore's GDP comes from services producing industries such as wholesale & retail trade, finance & insurance and business services etc. </div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4FC22tALsuJOdedVehlPv5tpH6bJd2YFeBpds-N_GpHk8EzMXFKUJX8LjckxgDPNUk5m5Er4iP0_H0IWc7uAxfoasR0cnMgdSBf08blLeOGeszVJoEOzcUkcSYlSkcJcC-EYCbFH-lVmf/s743/singapore%2527s+nominal+gdp.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="637" data-original-width="743" height="536" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4FC22tALsuJOdedVehlPv5tpH6bJd2YFeBpds-N_GpHk8EzMXFKUJX8LjckxgDPNUk5m5Er4iP0_H0IWc7uAxfoasR0cnMgdSBf08blLeOGeszVJoEOzcUkcSYlSkcJcC-EYCbFH-lVmf/w625-h536/singapore%2527s+nominal+gdp.jpg" width="625" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><i><font size="1">Adapted from: <a href="https://www.singstat.gov.sg/modules/infographics/-/media/Files/visualising_data/infographics/Economy/singapore-economy25062020.pdf">https://www.singstat.gov.sg/modules/infographics/-/media/Files/visualising_data/infographics/Economy/singapore-economy25062020.pdf</a></font></i></td></tr></tbody></table><div><br /></div><div>According to MTI report <a href="https://www.singstat.gov.sg/-/media/files/news/gdp1q2020.pdf#:~:text=26%20May%202020.,to%20%2D4.0%20per%20cent%E2%80%9D.&text=The%20Singapore%20economy%20contracted%20by,growth%20in%20the%20previous%20quarter.">here</a>, the worst contraction in 1Q 2020 came from the accomodation & food services sector with a 23.8% year on year and 69.9% quarter on quarter contraction. Luckily, this sector only makes up 2.1% of our GDP. This sector includes hotels and also food services providers such as caterers and restaurants. </div><div><br /></div><div>The next sector which contracted the most is the transportation and storage sector. It contracted 8.1% year on year and 29.9% quarter on quarter. This sector includes air, land and sea transportation. Air travel shrunk drastically due to the closed borders and restrictions on international visitors. Sea and land transport also contracted due to lesser demand for sea cargo handled and reduced domestic demand for public transportation. </div><div><br /></div><div>Wholesale and retail trade also contracted by 5.8% year on year and 18.1% quarter on quarter. This sector includes motor vehicle sales, watches and jewelry and also apparel and footwear etc. Amidst all the contraction, we still see some expansion in some sectors such as manufacturing, finance & insurance and information & communication. </div><div><br /></div><div><b><font size="5">Which sector will have more retrenchments?</font></b></div><div><br /></div><div>By looking at the breakdown of the GDP above, we might be able to get some hints on which sector will have more retrenchments moving forward. The accommodation and food services sector made up only 2.1% of GDP while tourism contributes about 4.2% of Singapore's GDP. If borders continue to be closed to tourists, Singapore's economy will still survive. Thus, this sector may see more retrenchments if tourists are still not allowed to come to Singapore. It is difficult for the hotels to survive if they continue to keep their staff with them. </div><div><br /></div><div>Wholesale and retail trade may also continue to face some headwinds due to reduced domestic demand as most people work from home during the weekdays and also reduced tourism spending in areas such as Orchard road. Businesses in the CBD area will definitely be more affected as compared to shops in the heartlands. </div><div><br /></div><div>We have not touched on the "other services industries" which also is the most affected in this COVID-19 crisis. This includes the arts, entertainment & recreation segment such as concerts, events etc. Events are still not allowed in Singapore but good news is entertainment is slowly allowed to reopen such as cinemas and attractions. For corporate events, it will definitely take some time before it is allowed again so those businesses which provide event services to corporations will surely retrench many of its staff. </div><div>It is election week for the whole of next week and we await to see the election results if Singaporeans will lean more to the government side or the opposition side. Nevertheless, life still goes on and we should always be prepared for such a crisis like this by having an emergency fund for rainy days. This is what I have always been advocating for and maybe through this crisis, the importance of financial planning will emerge out at the top again. </div><div><br /></div><div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div></div></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com0tag:blogger.com,1999:blog-3276688108456391559.post-87875683885593717342020-06-08T17:30:00.003+08:002020-06-08T17:30:01.298+08:00Lendlease Global Commercial REIT - An undervalued Retail & Commercial REIT investmentIn just 3 months since the great sell down of the stock market, stocks have started to rally with most REITs going up more than 20% from their lows. The big names like Capitaland Mall Trust, Capitaland Commercial Trust, Suntec REIT and Frasers Centrepoint Trust have all went up. My returns from these REITs now ranges from 10% to close to 40%. Yes, I bought quite a few REITs when Singapore was still in lockdown and all the malls were closed. It wasn't an easy decision to make since the economic situation is still quite bad out there but with such attractive valuations, I couldn't resist to put my money to work. <div><br /></div><div>With all the rally, I believe there are still opportunities to invest as the situation out there is still dynamic and STI index has not covered back to Pre-COVID-19 days. In this post, I will focus on Lendlease Global Commercial REIT. This is a new REIT which just IPO last year Oct at $0.88 and they only have 2 properties in their portfolio, one in Singapore and one in Italy. I applied for the IPO back then but did not get it. On hindsight, I was lucky not to have got it last year as I can invest in it at much lower price now. Let's start the bargain hunting. </div><div><br /></div><div>Lendlease REIT has 1 property in Singapore focusing on retail. This is non other than the popular 313@somerset which we are familiar with. 313@somerset contributes 2/3 of the NPI to Lendlease REIT. In Italy, they have a commercial property called Sky Complex, Milan. Let's take a look at the stock chart to see where the stock is at now.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtgE6ismlsj0Mxls0CKdXSJM0GrPkZo_tZ41dRQ3XjS6yXwwdWl5qLLxjnJCl31wcniIUj96cP9etAWcZXC4P96HE2TB7_6jb8tkBFVoT_6srRUvLAEC3WhOk6JSlzoalyfNtb8l2Zsqtm/s1683/Lendlease.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="803" data-original-width="1683" height="306" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjtgE6ismlsj0Mxls0CKdXSJM0GrPkZo_tZ41dRQ3XjS6yXwwdWl5qLLxjnJCl31wcniIUj96cP9etAWcZXC4P96HE2TB7_6jb8tkBFVoT_6srRUvLAEC3WhOk6JSlzoalyfNtb8l2Zsqtm/w640-h306/Lendlease.jpg" width="640" /></a></div><div><br /></div><div>As you can see, Lendlease IPO at about $0.88 and traded at about $0.90 consistently for the next few months. When the COVID-19 situation got worse, it went down in a straight line just as what happened to the other stocks as well. The price of the stock went down as much as 50% at the lows which was extremely attractive. It was trading at a discount to NAV of more than 50% at that point in time. </div><div><br /></div><div>Many investors seem to realise this and started to scoop up shares of Lendlease REIT at the low. This is like buying a property at prime land at Orchard road just above Somerset MRT at 50% of the price. The normalised dividend yield would have also been more than 10% at the low. </div><div><br /></div><div>The question is, will Lendlease REIT survive this crisis? Let us look into the REIT in detail.</div><div><br /></div><h3 style="text-align: left;"><b>Tenants at its properties</b></h3><div>Majority of the leases for its tenants at 313@somerset have been renewed for FY2020 except for 5% due for renewal in FY2021. For Sky complex, Milan, its on long term leases till 2032. All in all, this will prevent a scenario where tenants demand lower rental due to COVID-19 when their renewal is up. Based on its 3Q financial results update on 5th May 2020, Lendlease still has a occupancy of 99.8% at its properties. </div><div><br /></div><div>Most of the leases will expire only in 9.9 years time which is a long time before the next renewal. This is because for Sky Complex, Milan, the leases are very long at average 12 years. For 313 @somerset, the WALE is 1.8-1.9 years. </div><div><br /></div><h3 style="text-align: left;"><b>Healthy Balance Sheet</b></h3><div>A healthy balance sheet is the most important when investing in times like this. Their gearing ratio is at 35.9% as at 31 March 2020. They still have ample room to increase their debt if needed. One thing that strikes out is their low borrowing cost at 0.86% which is much lower than any local REITs listed on SGX. This gives them an interest cover ratio of 11.2x which is a clear winner comparing to other retail REITs!</div><div><br /></div><div>If we look deeper into their debt profile, we can see why they can get such low interest on their borrowing cost. Most of their loans are on Euro term loan at 0.58% p.a. Their average weighted debt maturity is at 3.3 years so there is no refinancing till FY2023. This would alleviate any concerns of them not being able to refinance their loans in times of the COVID-19 crisis now.</div><div><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXJrQ30mJ83KwpBjKGiOoUWqXPijOlWqZVd2DsKUwOTQcauKhPrgFECid4wHv42fiA_b1NzqXT0rdobF8Wwt3eSBVQmwsFCa1OnT9WBQyjb3BKreVAa-Vt-e0067r4WNtCCRVs-14niRQ7/s727/lendlease+debt.jpg" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="500" data-original-width="727" height="275" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiXJrQ30mJ83KwpBjKGiOoUWqXPijOlWqZVd2DsKUwOTQcauKhPrgFECid4wHv42fiA_b1NzqXT0rdobF8Wwt3eSBVQmwsFCa1OnT9WBQyjb3BKreVAa-Vt-e0067r4WNtCCRVs-14niRQ7/w400-h275/lendlease+debt.jpg" width="400" /></a></div><h3 style="text-align: left;"><b>Valuation</b></h3><div>Lendlease REIT has an NAV of $0.82. At current price of $0.715, it is still trading at a slight discount to its NAV. Normalising the DPU of 1.28 cents per quarter, we will get a DPU of 5.12 cents. This gives us a decent dividend yield of about 7%. </div><div><br /></div><div>On capitalization rate, 313@somerset has a cap rate of 4.5% which is comparable to properties such as Plaza Singapura in retail REITs like CMT. For Sky Complex, Milan, the cap rate is 5.75% which is normal for overseas office properties. The cap rate is the rate of return that an investment property will generate based on its current market value. It is calculated by taking the Net Property Income (NPI) dividend by the current market value of the property. </div><div><br /></div><h3 style="text-align: left;">Conclusion</h3><div>With all the factors above, I believe Lendlease REIT will survive this crisis. The retail space should be the first to recover after phase 2 of the circuit breaker where we are allowed to dine in again at restaurants and more retail shops to be allowed to open. </div><div><br /></div><div>However, we must always understand that in times like this, stock prices can always go lower and we should only invest money which we can afford to lose and not use it for at least the next 1 year. Who knows a second wave of infection may come and Singapore goes into a lock down again. This should send stock prices diving down again. </div><div><br /></div><div>Nevertheless, I have invested into Lendlease REIT at lower prices than the current price and would accumulate if there are opportunities to buy on dips. With all the rally going on, a pull back should happen soon and that would be the time to accumulate. </div><div><br /></div><div><div class="separator" style="background-color: white; clear: both; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">Enjoyed my articles? </span></i></div><div style="background-color: white; color: #2a2a2a; font-family: "times new roman", times, freeserif, serif; font-size: 17.82px;"><span class="postpara" style="font-family: "times new roman", times, freeserif, serif;"></span><br /><div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;">You can <a href="http://eepurl.com/bPELfL" style="color: #6699cc; text-decoration-line: none;" target="_blank">Subscribe to SG Young Investment by Email</a></span></i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"> </i></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;">or follow me on my </i><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><a href="https://www.facebook.com/pages/SG-Young-Investment/1377656955799663" style="color: #6699cc; text-decoration-line: none;" target="_blank">Facebook page</a> and get notified about new posts.</span></i></div></div><div><i style="color: #333333; font-family: arial, tahoma, helvetica, freesans, sans-serif; font-size: 15px; line-height: 20px;"><span style="color: blue;"><br /></span></i></div></div></div><div><br /></div>SGYIhttp://www.blogger.com/profile/09445517891969740960noreply@blogger.com2