Retiree regrets selling his flat to help son buy a condo.

Dear AK,

By chance, I got to know some people who are investors and they told me about you. I enjoy reading your blog but I decided to write to you when I read the blog post, How to have children and a comfortable retirement?





I am a 65 year old retiree. I was a school teacher for all my life until I retired. I am a widower and I have a son who is working in the sales line.

I had a HDB 3 room flat but I sold it a few years ago to help my son buy his matrimonial home, a condominium when he said the flat was too small for us to stay together as a family. I now live with my son and his wife.






Apart from what I have in my CPF, I don't have much savings. I don't get any money from my son as he is struggling financially and his wife who is from China is not well educated and cannot speak English well. She says she is not able to find a job but I think it is because she doesn't want to wait at tables or wash dishes.

The times when I talked to my son about selling his car or convincing his wife to find a job were unpleasant. I now avoid talking about money matters with him and I feel his wife is very cold towards me. It does not feel like home. I spend my days outside and only come home to sleep.






I sold my flat and gave the money to my son because I didn't want to stay alone but I regret my decision to sell my flat and to stay with him and his wife.

I want to share a message with all parents that although we should love our children and try to give them the best but, like you said, we should be pragmatic and not deprive ourselves of a comfortable retirement.

I wish someone had told me this earlier but I am not sure if I would have listened.

Sincerely,
Uncle R




--------------------------------------------------------

There are quite a few things I can say in response to Uncle R's situation but I shan't rub salt into his wound. Sometimes, we just need a listening ear.

I hope Uncle R will focus on activities that make his golden years meaningful and happy. I hope he will let go of regret and disappointment.

For what it is worth, I suggested that Uncle R read this blog post:
A simple concept to better mental health.





Related post:
I am not suggesting depriving children of necessities. I am suggesting not depriving ourselves of a comfortable retirement! 
- AK in How to have children and a comfortable retirement?

Matthew answers questions on STI ETF (Part 2).

Thank You and Matthew Seah for the help! Appreciate it  I still have a few more questions to ask regarding STI ETFs which would require Matthew's or your help.  

SPDR STI: 

1) Matthew mentioned that "It is wrong to say that they paid $12M when they had $5M in cash. What you see as cash is only a snap shot “at 30 June 2015”. What has been paid out is cash they had previously from dividends collected over the six months prior, less management fees. " Based on this, am i right to say that net income would be a better gauge to determine whether the fund is paying dividends more than it can afford?

2) There is a significant increase in liabilities in 2013 due to purchases awaiting settlements. What purchases did they make? And how did they manage to pay off such a large amount by 2014? 

3) There is a change in source of credit rating in 2015. And the rating as a result improved from B*- to AA-. Did they change the rating source in order to improve their credit rating? Is this a source of concern?

Nikko AM STI:

1) Why is there suddenly an amount due to shareholder in 2015 under payable? 

2) The tracking error provided by nikko am is on a 3year annualised basis while for spdr, it is based on rolling 1year tracking error. Is it fair to compare this 2 tracking error directly? Is it sufficient to just look at the current tracking error in the fact sheet or should i look for past years tracking error of both ETFs? Where can i find past years tracking error of both ETFs? It wasn't in the annual report.

General: 

1) Would my returns be better if i chose to start DCA under a RSP plan when the index is cheaper as compared to when the index is higher?

Thank you and looking forward to your reply! 

From Matthew Seah:

SPDR STI 1) yes
2) The only liabilities the fund has is payables. Payables come mainly in the form of cash due to the brokerage at T+3. Since STI ETF is a cash ETF, they would have sufficient cash before purchasing the STI components.
3) you can review the credit ratings at http://investors.statestreet.com/CustomPage/Index?KeyGenPage=302726

Nikko AM STI ETF
1) Distribution payable is the cumulative dividends, less fees collected to be distributed to shareholders on a semi annual basis.
Are special dividends from any STI components? Is there a change in dividend yield when there is a switch of a STI component?
2) I am not sure where to find tracking error. But you can calculate by yourself.using excel and historical data for STI, SPDR and Nikko AM ETFs. The tracking error is generally very low and is not much of a concern.

General
1)http://singaporeanstocksinvestor.blogspot.sg/2013/08/tea-with-matthew-seah-dollar-cost.html
read the comments as well for the Nikko AM STI ETF simulator
one ETF starts before the great financial crisis, the other starts near the bottom



Related post:
Matthew answers questions on SPDR STI ETF.

Position sizing and emotional well being.

AK 

Marco Polo ... hit new Low.

Sighz. I have too much oil and gas in my portfolio. 

AK said:
"If it is causing you distress, you are probably overexposed..."

hi AK,

i didn know marco polo has so high debt . do u think marco polo will go into bankcrupt?

serious, i need your advice. if you have sold it, just let me know.

i really want to keep my remaning capital.

has losing a lot from peak 37 cent. 

Thank you!

AK said:
"I am still holding my position in MPM.
I don't know if MPM will go bankrupt.
The possibility exists, of course."

All readers who feel the same way, please read related posts below.

Related posts:

1. MPM: My comment in another blog.

2. Cutting or holding Marco Polo Marine?

3. How to have peace of mind as an investor?

Should I buy a higher price or lower price stock?

Thanks, AK.

I was considering between singtel and singpost but decided to go for singpost cause I can buy more lots.

 

Singtel price is 3x of singpost. I was comparing buying 10 lots each. Hence singpost appeals to me more.

 

Any comments?

 

Regards,
D

Hi D,

Price is what you pay and value is what you get.

A 10c stock could be costlier than a $1 stock. ;)

I blogged about why QAF was cheaper at a higher price before, for example.

Use related posts below as food for thought.

Best wishes,
AK

Related posts:
1. $1.14 a share cheaper than 94c a share?
2. 1H 2016 income from non-REITs. (Added QAF again.)

UPDATED: "I have no career aspirations, only financial aspirations." (Scolded by wife for thinking about financial freedom.)

Reader says:

I am 31 this year. Been working for 7 years and married for 2. 

I have been feeling unhappy at work and discovering your blog a few weeks ago gave me hope. 

I want to get out of the rat race.




My wife is a career woman and we usually have very little time to spend together. 

I am feeling unhappy about this too.

I love my wife and I would like to be able to spend more time together and achieving financial freedom like you would be ideal.

So, a few nights ago, I told my wife about you and how we should do what you did. 




She said that I should try my best to build a successful career and stop thinking about not having to work. 

She said a few other things which I found hurtful.

I should not be surprised by the response. 

She is doing well in her job and I think she is more successful than I am. 

Still, being scolded hurts...

(AK left out most of the reader's email as it got very personal.)





AK says:
I know it is not easy but try not to dwell too much on your current situation or you might end up visiting IMH.

I understand what you are going through and, if it is any consolation, it wasn't easy for me too. 

Some people were derisive and talked down to me over the years.




Scrooge. Stupid. Delusional. 

These were some words that were thrown my way before.

More recently this year in early March, I shared on my FB wall that someone called me a "quack". 

I am sharing the screen capture of that FB post here:

Source:
http://www.sammyboy.com/showthread.php?225976-Reits-good%26%2365311%3B

.



JohnTan said above:

"This investment guru (i.e. AK) sounds like a quack. Is that why he goes around wearing a mask all the time? Or he's Batman?

"If this guy is as talented as you claim, he shouldn't only be earning $5-7k per month for the past twenty years. 

"He should have been promoted to some high-flying director or started his own business by now. I hope you did not lose your shirt following his advice."





AK says:
Alamak. How like that?

See how the message is that a person is only considered successful if he is a high flyer in his career or if he starts his own business?

Like it or not, such ideas are quite pervasive in our society.





There is nothing wrong with career minded people who want a successful career. 

There is nothing wrong with having an entrepreneurial spirit. 

Honestly, we need such people.

However, I don't think there is anything wrong with people who would like nothing better than to achieve financial freedom and to stop working either. 





We are all made differently.

"I wanted the independence. 
I desperately wanted it."
- Charlie Munger.


What about AK? Me? 

I borrowed a phrase from EY:

"I have no career aspirations, only financial aspirations."






You have a responsibility to yourself to be happy.


To be happy, live your dream and not someone else's.

"Not even my wife's?"

Oh, no. AK is not going there! ;p





Related post:
To retire by age 45, start with a plan.

Market timing versus buying at prices you won't sell at.

Reader says...
Hi AK,

I emailed you a few years ago about starting to invest and you advised me to build up on my knowledge and to build a war chest. 

Now, I have opened an CDP account and feel that I am ready to start on an investment journey. 







I would like to seek your opinion. 

The mantra is simple, buy low sell high. 

But do you think that the timing is right for me to buy stocks? 

Or should I wait for a better time and buy in the future?

AK says...

Alamak. I think I am one of the worst market timers in the world.

Ask what is your motivation for investing and see whether the investments fit your motivation.

Then, ask what you think they should be worth and whether the price Mr. Market is asking from you is worth paying.






Buy at prices you won't sell at and sell at prices you won't buy at.

Gambatte!

Related post:
Have a plan, your own plan.

Buying investment grade gold in Singapore?

Reader says...

Hi AK, would like to check with you on gold products.




1) What are some of the products if we we would like to use CPF to purchase gold? Is it recommended to purchase using CPF?

2) For purchase of physical gold, are there any considerations when purchasing? Understand UOB gold should be quite cost efficient if you purchase minimum weight.

3) Why is gold bullion coin is more expensive than pamp gold bar

AK says...

Read:
Why investors for income buy gold?

1) I believe the opportunity cost for using our CPF savings to buy gold is rather high.

I will not give up the risk free returns to speculate on gold.




2) I buy gold bullions from UOB.

The Kilobar is probably the most value for money, weight for weight.

However, it isn't practicable for most of us and not very practical.

My choice is the 1 oz bullion.




3) Bullion coins of same weight from different mints can differ in prices but UOB sell them at the same price.

It doesn't matter coins or bars.

If we are buying as an insurance, it is sensible to simply go for best value.



Related post:
Singapore Precious Metals Exchange.

CPF OA to SA transfer or MS Top Up to SA?

Reader:
"I would like to make transfer from OA to SA so I did a check with CPF. Assuming that I reach the full retirement sum at age 55, they mentioned that I cannot withdraw cash top up to SA and its accrued interest but I am allowed to withdraw the OA to SA funds transfer and its accrued interest. I am confused however. My initial understanding is if my combined sum in OA and SA exceeds the full retirement sum, I am allowed to withdraw the access funds. If that is the case, whether it is cash top to SA or OA transfer to SA, should not make any difference. If you could clarify on this issue, I will be greatly grateful. Thank you."

AK:
"MS Top Up is a cash top up meant to help us with funding our retirement. It is an additional input and not part of the of the annual contribution limit (mandatory + volutary).The OA to SA transfer is money that is already in your CPF account.

"The OA money is from mandatory contributions and voluntary contributions (if any). These are made within the annual contribution limit and not in addition to the limit.The CPF is meant to help every member with retirement adequacy.

"Whether we choose to do OA to SA transfer or MS Top Up will depend on our circumstances. Whatever those circumstances might be, the MS (or the FRS) will go to our CPF-RA at age 55 and cannot be withdrawn (unless we choose the BRS by pledging a property) until age 65 at the earliest in the form of an annuity (i.e. CPF Life).

"Unless our CPF savings are made up entirely of cash through MS Top Ups to the SA, it is unlikely that we won't have a more meaningful lump sum withdrawal at age 55 if we should exceed the prevailing MS (FRS) significantly by then."

Related post:
1. Almost 55 and worried about CPF.
2. Did CPF Top Ups but denied lump sum payment.

Investing for income to help support a small family.

Hi AK,

I'm a 34 years old on a stable job earning enough to support a small family. I have a sum of around 50k to 70k set aside purely for investment for passive income.

Although the sum is not a lot but I'm looking at buying blue chips (im looking at singpost and starhub) and REIT (I'm looking at Aims and Cambridge industrial trust).

Its my 1st time investing and im a very lazy person and I don't want to be bothered about or worry about whether the stock will crash or not with minimal montoring.

May I have your opinion on whether the 4 stocks mentioned above serve my purpose of minimal monitoring?

Regards,
D

Hi D,

They are all good investments for income. Well, they have been so for me (except for Singpost which I do not have) ;)

Minimal monitoring but still must monitor. ;p

I am ready to buy more in the event of a stock market crash, all else being equal. :)

Best wishes,
AK

Passive income will be useful in helping D pay some bills regularly at home.

"That is what passive income is for at the most basic level, to help pay some of our bills." 
Source:   http://singaporeanstocksinvestor.blogspot.sg/2015/06/thank-you-for-investing-in-income-for.html

Related post:
AK anyhow picks 5 stocks for income investors.

What BREXIT means for my money?

Many are worried about BREXIT and what it could do to an already anemic global economy. Many are also worried about the high level of liquidity in the system becoming more elevated and how ineffective it is in addressing the global economic malaise.

• Reader:
  

  
  

  
  

  Notice that you have been accumulating stocks. Do you think that in the current climate the prices are distorted? The sentiment and the stock price seem to diverge. Also there is no optimism and extreme pessimism. But there are some heighten risk. Eg. Long term bonds seem to be over valued, EU seem weaker with the BREXIT and may trigger the rest of countries to exit euro, euro banks having high NPL, and current monetary policy seem ineffective.
  
• Are you only nibbling? Or buying in big quantities? Mind if you share how the allocation of cash in this climate i.e. Your warchest. Small, moderate or large amount of cash allocation?
• 
  
• 

  11:23am
  

  Assi AK
  

  
  

  
  

  There is ample liquidity in the system. With BREXIT, there will probably continue to be more liquidity. Money needs to go somewhere.

  
  

  Global economic growth is anemic and the fundamentals are not fantastic. However, money still needs to go somewhere.

  
  

  There are relatively inexpensive offers in Singapore's stock market. Despite the negative news, I believe that DBS is now a bargain and at the current price, OCBC is also looking interesting.

  Nibble or gobble? Still nibbling.
• 
  

What I am more concerned about is where my money should go for it to be treated better. 

Money needs to go somewhere and the next stock market rally here will most likely be a liquidity driven one.

Related post:
BREXIT and AK the investor.