Highlights

A Path to Forever Financial Freedom

Author:   |   Latest post: Wed, 15 Jan 2020, 2:23 PM

 

The Misconception About Financial Independence

Author:   |  Publish date: Wed, 15 Jan 2020, 2:23 PM


I've made mistakes in the past talking about the concept of financial independence to people who weren't ready to accept them.

It's incredibly frustrating talking to these group of people who seem to surround it with not only negative connotation that they are not accepting but also refuse to listen to views that other people have.

Since then, I've not openly brought up talking on this subject to anyone I've hardly known unless there's some indication that they are open to listening about different viewpoints.

In the past weeks, I've gone for interviews and met up with people who've questioned my motives when they did a background check and found my articles online preaching and advocating about financial independence and the article that highlights my goal to "retire" at the age of 35.

As much as I can explain to them the whole idea and intention within a short timespan that I have, they simply dismissed the notion and questioned on my long term commitment. After all, most companies would like to have employees that are loyal and remain with the company for as long as the company requires them to be. 

You see, there's nothing wrong being sceptical about this whole thing. There is also nothing wrong with companies wanting their prospective employees to remain and commit with them for a longer term.

What I think needs clarifications is how some people tends to perceive them, perhaps unconsciously or maybe there's misconception about certain things that they heard on the streets that they didn't like. In this article, I hope I could address and explain some of these misconceptions.




You Are Being Lazy

This is the most misconception that people have for those who doesn't understand.

Everyone knows that to reach the state of financial independence, you need a crazy amount of hard work, grit and perseverance before being able to reach the ultimate state that you desire.

The misconception about being lazy is the wrong portray that people have in their minds about sitting by the couch or beach all day doing nothing once you have achieved all your financial goals in life.

And we know that this is hardly true (we'll, technically you can if you choose to do that but hardly anyone I've met has done that).

Most people who've actually achieved the real thing actually goes on to do greater things in life such as spending their time building things and giving back to society and that determination and ambition and the traits of hard work and perseverance continue to play a big role in the activities that they do.

You Are Being Monetary-Focused

The only thing financial bloggers care about is things that are monetary related and focused.

In fact, the opposite is true.

Sure, most of us talk about numbers in our blogs - how we derive certain percentage of compounding interests or how much emergency savings should we hold - things that generally borings and frightens the people but that is not all that we are offering.

This whole thing is larger than monetary benefits alone.

What we are trying to achieve is a sense of optimization of how we should live our lives to the fullest it can be, starting from planning the basic foundation of our needs right, protecting our loved ones with sufficient health coverage, ensuring we have the right investments that can fight off against inflation, finding jobs that we think are aligned with our goal and ambition, doing things that we are good at and many more.

You Are Being Impossible

I can understand why most people are sceptical about this whole idea because I did the same too when I first started.

Most people don't believe that it is actually possible for them to achieve some sort of financial independence at some stage in their working lives even in an expensive first world nation like Singapore where we have one of the highest cost of living in the world.

The social retirement and healthcare security has actually been designed to meet the rising needs against healthcare and lifestyle inflation that we have to cope in our aging days so it is something that has been well taken care of by the government.

To do one step better, there is a need to spend some time understanding the relationship between higher savings and higher returns rate and the number of years you have on compounding. Even if you are not able to match your peers who are earning or saving higher rate than you are at the moment, it is always good to give it your best shot and results will always show that you are glad taking this rather than not.

Thanks for reading.

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The CPF Context Shows Exactly Why We Remain a Backward Society

Author:   |  Publish date: Sun, 5 Jan 2020, 9:53 AM


This week alone, I've probably seen more than 50 cases of individuals taunting off their CPF publicly on various online portals and forums that appears on my message feeds, without bothering to explain the rationale of why they did so.

I'm sure the scene was meant to be inspiring but taken out of context on a larger picture, it seems a tad sad to mention because it shows once again why are a society of competing in the first place.

Being competitive was one of the main traits that has been engrained in many of the Singaporeans' mindset. That has kept most people going for more each time in a hungry world where we want to simply be better than our neighbour at all other expense.

From young, we are constantly being challenged to race ahead of others from grades to the number of tuitions to the type of holiday destinations that we go.

The benchmark for success for many people is their peers and neighbours and this out of tune illustrations will prove why it is a damaging bridge to the society.



Take this 3 cases below for instance.

Surely, your first reaction is they must have done pretty well over the years to have accumulated a sizeable amount of CPF balances. Assuming a maximum contribution of $2,220 per month based on your employment, you will minimally need to be working between 3.5 to 4 years based on your profile.

But that's about all the story it tells.

A person who posted these balances without explaining the rationale and information such as history of utilizing the CPF or whether the person has bought a house or have children will then be meaningless because the context can vary a lot.

For instance, what is the rationale of case 1 and 2 for having so much in their Special Account? Were they single at the time they made the transfer from OA to SA? Were they someone who were not planning to get married, purchase a house or have children? Or were they someone who has just cleared off all their outstanding home loans and now making a switch to accelerate their FRS retirement needs.

What if this person from Case 1 with a lower CPF balance but is younger and owns multiple assets and higher equities outside?

To have someone who writes that they are earning a free $5k, $7k, $10k or $25k interests from the government that are "risk-free" without explaining the context just irked me off because it doesn't add any sort of value to the public reading it for the first time other than the intention to show off.

Most of these stories are then taken out of context from the general public who brings about the wrong awareness of what CPF  truly has to offer.

From one of the reader that I've talked to recently, I also get a feeling that the CPF 4% interests narratives on the Special Account has also been overly emphasized and taken out of context from people who were following their peers blindly and were actually unsure of what they were really doing with their lives and having the things that they want or not.

The chase for higher returns and what every of their random online peers are doing push them into making some of these decisions that they might feel is not the best at their stages of lives.





Case: CPF 1

Case: CPF 2

Case: CPF 3

To be on the fair side, I think there's a good reasonable amount of people who actually bothers to explain the rationale of each allocation that they put inside the maths of computing their CPF balances on the path to eventual FRS needs.

And this is what we need especially when trying to reach out to a larger audience beyond someone who is already savvy in the personal finance space.

But judging by the amount of one liner post in the past 1 week shows exactly why the Singapore finance community remains a backward society despite the many recent successes of a growing community.

It forms a tribe and a new embryo of circle where people motivates one another through competing against one another and wanting to be better than peers of X age by Y amount.

In fact, there's hardly anyone who has actually benchmark against oneself over how that person has done differently over the years and what sort of circumstances led to that decision.

Instead, the focus has been competing for the highest absolute amount of CPF accounts balance with the most amount of top-ups competing against the benchmark of peers.

This is a first world problem and in another form of cannibal competing.

Thanks for reading.




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2019 Xirr Performance & Other Reviews

Author:   |  Publish date: Mon, 30 Dec 2019, 4:25 PM


As we entered the final phase of the end of the 2019 year, it's time to do a review of how the year went for us and what lessons can we learnt from this year.

Career

From a career's perspective, things are looking rather decent with not much progress from the very last I changed job which means things are not taking a big scale as much as I had expected. Still, it was an interesting year because this is the year I've changed industry and met variety of people in the industry which I would have never met had I remained in my earlier role.

The good thing about the change is it also allows me to look at a different lense on a totally new perspective on start up, unicorn companies and VCs and this will come in a lot handy when analysing the Nasdaq companies for me in the future.

Health

Health on a personal front was excellent this year.

I started eating healthier intake of food such as kale and strawberry for breakfast and less on sugar intake in particular.

I also had time to instil more discipline on exercise and had my children followed me as well.

Because of this, the number of times I fell sick during the year was much lesser compared to the past and this will be a good foundation to continue in the 2020 ahead.

Cashflow

This is one aspect which we deliberately made it a bit of struggle.

Cash flow was a lot tighter this year than the previous year as we had invested most of the cash for our hard cash down-payment for our new house and also made some payment for the hospital bills we incurred.

Because of this, there is very little cashflow that is available for stock investment and hence my focus will be on generating more capital again in the next few years to come through my job.

For some reason, this feels very much like when I had started my first job as a fresh grad some 10-12 years ago, except the difference now we have two homes on hand.

Stock Performance

Stock performance was a little lackluster this year especially in the 2H of the year after I sold off my Vicom and NetLink Trust stakes in Aug.

The first half of the year was exceptionally great as my biggest position Vicom gained 19.2% when I sold all of them at an average price of $7.15. Had I hold it until today, I would have been able to make more as Vicom is currently at $7.77 but it is incredibly difficult to predict.

Since then, the proceeds have gone to other investments that I made in DBS (short), Starhub (short), HK Land, all of which has not really took off in the 2H.

Because of this, the return this year has slightly dipped during the 2H of the year, though still outperform the larger market at 17.4%, as compared to 8.9% for the STI ETF. 

Against, the US market though, it has underperformed with all 3 major indexes gaining more than 20% in 2019.




The next few years is likely to be a rebuilding process for me again and I am certainly hoping that market dips along the way would look to enhance that process faster.

I am also likely to engage the global companies more, especially tech companies in the US, given my current competencies in these areas have widen than before so it will be interesting to have them more diversified into my portfolio wealth building.

Here's wishing every readers of this blog a Merry Xmas and a happy new year 2020 ahead!

Thanks for reading.

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Willcraft - Your Online Estate Planning Platform

Author:   |  Publish date: Sat, 28 Dec 2019, 6:52 PM


Wills are not something that is often discussed enough within many of the family members because it usually involves talking about death, which is a taboo topic to bring up in the first place. As a result, many families choose to delay because it just doesn't seem too necessary to bring up at this point in time.

But as we learnt from many of the past cases, death can at times comes in an untimely manner and least expected hence it is important to look at them objectively rather than avoiding it totally like a plaque.

Since death is something that will come to us naturally some day or another, we should plan for it, the earlier the better, especially once we start having a family of our own.

Conversations With My Wife

Being a financial writer, I am naturally drawn to anything that is related to financial planning and this includes the likes of having sufficient insurance coverage for the family members as well as estate planning.

Ever since we started having children of our own, we've began planning for the longer term. At the very top of our agenda it includes the immediate needs for the costs of their education, sufficient hospitalization coverage for their health needs as well as a list of all our assets and estates so we know ahead of the plans what to do in the case of an emergency. This especially comes in handy given one of the important lessons I learnt particularly from my Dad's situation.

As a parent, if you do not have a will, the welfare of your child may be quite uncertain and confusing based on the distribution act. Based on the accordance of the Intestate Succession Act, the distribution of the assets will be based on 50% to one of the surviving spouse, and the other 50% to the children in equal portions.

If your children is under the age of 21, then it is advisable to appoint a guardian to act on the children's behalf until they turn 21 under the Guardianship of Infants Act. The assets will continue to be held in the trust.

Having a will directing on some of these instructions just makes things easier to follow both for the guardians and the child.

If you do not have a will, then the process before the distribution takes place, which is called the probate, will take generally between 6 to 9 months.

Why Willcraft?

Willcraft is an online drafting platform that allows you to make a quick, convenient and hassle-free will down only in a few minutes.



Unlike some law firms which charge based on number of hours or clauses, Willcraft's pricing packages come in 3 tiered, depending on the comprehensiveness and complexity of your will needs.

The most essential package is the one with $49 package, which includes 1-to-1 executor to beneficiary.

If you have a bigger families, for example with children, then it is advisable to you take the basic package which costs slightly higher at $99. This includes 1-to-2 executor to beneficiaries and it includes a couple more detailed situations such as how to specifically handle your funeral instructions and procedures.

The Premium package is for more complex situations where you have more than 1 executor and up to unlimited beneficiaries to cater your will situation to.

Once you have submitted your will instructions online, you will have the option as to whether you'd like to engage a lawyer to witness your will instructions that you have effected in the contents.

Willcraft has two lawyer firm partners that they are working closely together with that you can choose or you can simply choose to do away with the witness if you are comfortable with what it offers.

In Singapore, you do not strictly require a lawyer to write a will. However, it is best to engage a wills lawyer if your requirements are complex so they may be able to explain certain aspects of your will content to make it clearer.

What to include in a Will?

Here are the lists of what to include in your will:

1.) A list of all your assets. 
2.) A list of all your liabilities.
3.) The beneficiaries (who to give the assets to) and guardians (if the beneficiaries are under the legal age) and how much each will receive.
4.) The executors (to carry out your will).
5.) A revocation clause to revoke any and all previous wills.
6.) A residuary clause that distributes any remainder of your estate according to your wishes.
7.) Funeral instructions.

Is CPF covered under your will?

The answer is no.

You must make a CPF nomination if you want your CPF savings to be distributed according to your wishes upon your passing.

Otherwise, your CPF savings will be transferred to the Public Trustee's Office and distributed according to the Intestate Succession Act.

Disclaimer: This is a sponsored post by Willcraft and you should seek all legal advice from a professional before making a decision.


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8D7N Shanghai Trip - Costs & Itineraries

Author:   |  Publish date: Wed, 25 Dec 2019, 10:14 AM


We spent about a week for this year end trip to Shanghai which we spent on en route leading to Christmas day.

It was a nice spot between not overly long distance trip and also where the budget allows so we have chosen Shanghai as our ideal destination for this year.

We had so much fun exploring the city in a pretty unfashionable way that it feels a lot like an adventure. The goal here is to explore like the local so we went to places which a lot of locals went to.

We walked a lot using our Google maps through the vpn channel which I thought was pretty reliable.

Since this is a personal finance blog, I'd do a recap of how much we spent on each category in general so we know how much to cater and budget the next time we travel.

This is a trip for 5 pax, which includes two young children and we also brought our maid to tag along with us for the trip.

Flight Ticket = SGD 340 (with 200,000 miles) 

Flight tickets are usually the main costs of the bulk here so we wanted to make sure we spent as least as possible on this category so we could have a bigger budget for the other categories.

We've been a milers for a number of years now and we wanted to take opportunity to redeem the miles since it was a peak season during Christmas which means price tickets are rocket sky high during these periods.

We managed to use our krisflyer miles for a return SQ economy saver ticket which we have accumulated and it costs us a total of 200,000 miles (40,000 miles x 5 pax).

The tax and other clearance took up another SGD 340 (SGD 76 x 3 adults + SGD 52 x 2 children).

Accommodation = SGD 62.33

Accommodation is another category we wanted to spend as little as possible as we'd be out exploring for much of the day.

Still, we wanted to find a place which is comfortable to sleep, near the public transport and plenty of amenities around.

After searching for a while, I was also able to secure a value stay deal for 7 nights stay which came up to $62.33 in total for all of us, after including the discount deals.

If we were to book a hotel, we would have to book for 2 rooms which can add up quite a bit.


The Airbnb we booked had an excellent reviews and a very nice host which we constantly kept in contact via we chat.

The place was located within the vicinity of mrt Station (Xiuyuan Road), which is very near the airport and Disneyland. This is almost similar to the Tampines equivalent of Singapore.

If this is your first time, do try out my link Here and you'll get instant credits immediately for your booking. You can also PM me in case you are interested to book a similar listing for your future trips.


Transportation = SGD 160

We took the mrt and walk a lot for the most part of our trip here.

The mrt fare was pretty cheap here at about 5Yuan/pax.

We took the taxi on several occasions during our trip when the kids were done walking and KO-ed but it didn't add up massively over at the end.

Overall, we spent at approximately less than SGD 160 for all our modes of transportation.

Food & Beverages = SGD 750

This is one segment which we had a low tolerance on and decide to go for all out spending on this category.

For breakfast, we mostly had bread and some fruits like strawberry and tomato which we bought at a shop near our home.

For lunch, we mostly settle for some random noodle stalls when we go out. The only time lunch was over the budget was when we had to go to places like Disneyland which they charge crazy premium on their food and beverages.

For dinner, we mostly had dinner at restaurants near our home which charged in general at about less than 200Yuan.

We also had to stop for numerous counts of coffee and hot chocolate everyday without fail.








Activities & Entertainment = SGD 470

We had these main itineraries scheduled during our trip:

Disneyland Shanghai

We had a lot of expectations for this latest Disney Park and it didn't disappoint.

There were a lot of new themes which we didn't previously encountered during our trip to HK Disneyland, some of them like Marvels, Tron and Star Wars which we saw and like.

We also went strategically during a weekday so the crowd was still within expectation (most rides were within 20 minutes). We even had the chance to meet Captain America, Thor, Dr Strange and Mickey and had the chance to chat up with them!

We bought the tickets at Klook for SGD 171 during the 12.12 sale which we were further entitled to the 12% discounts. Kids below the requirement heights are free so my younger son goes in for free.




Shanghai Wild Animal Park

Ticket costs us at Y110 for each pax and again the youngest one gets in for free.

The park was extremely huge and it was a very nice stroll at the park with one exhibition rather a distance from one another.

Plenty of the enclosures were also in close distance where we were able to feed food to the animals like the lion, tiger and elephants.

This is probably the best wild Park I've ever been out of all the zoo and wild parks visited in the past.





Peppa Pig World Play

This is a theme park for the younger children out of a franchise from the popular UK Peppa Pig theme.

This indoor playground was located at LCM mall which is rather on the North side so we went up to explore and it was a good adventure.

The playground and mall itself was huge and they have some entertaining shops to roam around.

Tickets for all of us add up to about Yuan 530, which is about SGD 100.



Mini Mars

This was another popular indoor playground for the kids which is one of the largest in the city.

It is also located at Jing An Sports Center, which is a 10 min walk from the West Nanjing Road and is 2 storey high with multi-facet themes.

We incurred about Y530 or SGD100 for tickets for all of us.



Gifts & Others = SGD 170

On the other categories, we bought a pokemon theme bed sheet for our new home and also a few toys for the kids for their Xmas presents.

Overall

Our total spending in terms of cash outflow was around SGD 1,952.33 for this trip, which is just below the $2k mark we expected.

This was pretty much due to the relatively cheap accommodation deal we've got as well as using the miles for our trip which we didn't have to incur a high spending on this category.

It was a good trip for everyone at the end and one which we really enjoyed for a year end wind down before the new year starts.

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Dec 19 - Portfolio & Networth Update

Author:   |  Publish date: Mon, 9 Dec 2019, 6:43 PM



No.  Counters No. of Shares Market Price (SGD) Total Value (SGD) based on market price Allocation %
1. Straco        100,000        0.675         67,500.00
66.00%
2. Ho Bee Land                300         2.38              714.00
1.00%
3. Warchest            34,000.00
33.00%
Total       102,214.00
100.00%




To think that we have finally reached the end of the year is such incredible moment, given how fast time flies in a moment that we've never think of.

This month, I've only managed to add Straco into the portfolio which I blogged earlier last week here. I have not decided if I will hold this company for mid to longer term since this will very much depends on their longer term development but I am optimistic that the current valuation of the company is attractive enough for a justified entry.

In addition, we will also be looking forward to the Time Capsule as well as the Chao Yuan Ge redevelopment in FY2020 so we are likely to be looking at a stronger Operating Cashflow amidst lower Free Cash Flow due to higher Capex for next year.

The company has been aggressive enough for share buybacks in the past recent days/weeks in the range of 67 to 67.5 cents.

From a personal portfolio view, current cash level is at around 33%, which I am keeping it dry for any further compelling opportunities.

I am taking it quite comfortably, chilling a little bit whilst there are no real bargains in the market.

I am also casting a wider view at the market and industry outside my circle of competence, some of these analysis I will put out in my blog when the articles are ready. Some of these companies are tech and Saas companies which I have never glanced at them in the past but do so much more often these days due to the nature of my work.

From a rental perspective, I've managed to secure a tenant at a pretty decent yield for the next 6 months so we're likely to delay our plans to move into our new place until the 2H of 2020. Again, we are likely to build this move up slowly until we really have to move in before the primary one commencement.

I'm heading for a holiday break in the week leading to Christmas so I'm likely to wrap things up sometime next week to see how my 2019 goes.


Thanks for reading.


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