More funds came in as yield hits 3.78% p.a.

The latest 6 months T-bill auction saw a cut-off yield of 3.78% p.a. 

Pretty decent although it dipped slightly from 3.8% p.a. we saw in the auction before this. 

Better than the 3.4% p.a. offer from CIMB for a 6 months fixed deposit. 

So, good enough for me. 

Around 96% of non-competitive applications, total S$2.5 billion, were allotted in the latest auction.

Fortunately, I applied for the T-bill not only with funds that came back from a matured T-bill, I topped up with fresh funds. 

So, I got to strengthen my T-bill ladder nonetheless. 

Money from the partial sale of my investment in Sabana REIT is in. 

The plan is to deploy the funds when there is a pull-back in the stock prices of our local banks. 

I will park the money in upcoming T-bills for the time being. 

Just AK talking to himself, as usual. 

If AK can do it, so can you!

Related post:
Sabana REIT: Internalization pains.

Updated plan as yield plunged on 6 months T-bill!

It could be a sign of things to come.

Cut-off yield in the latest 6 months T-bill auction was 3.54% p.a.

That is a huge decline from 3.7% p.a. seen in the prior auction.

100% of my non-competitive bid was filled.

3.54% p.a. is still decent but it is similar to what I am able to get from 6 months fixed deposits now.

I have a few fixed deposits maturing this month and I will be renewing them at 3.55% p.a. interest rate for a 6 months tenure with CIMB.

I have talked to myself about when to dismantle the T-bill ladder.

The plan is to dismantle the ladder when Mr. Market goes into a depression.

However, if the cut-off yield becomes significantly lower than what I could get from 6 months fixed deposits, then, I could dismantle the ladder too.

Place fixed deposits instead of buying T-bills.

Still laddering but with fixed deposits instead.

As for CPF OA money, I would simply leave the money undeployed if cut-off yield goes under 3.5% p.a. which is where I would place my competitive bids.

This is why I said it makes sense to transfer the funds from CPF IA to CPF OA when I did.

It is for in case I am unsuccessful in getting T-bills at the cut-off yield which is meaningful to me.

Where are things going?

So, it seems that T-bill cut-off yield is trending lower.

This is probably in response to dovish statements from the Fed and also the ECB on possible interest rate cuts this year.

Just have to roll with the punches and adapt.

If AK can roll, so can you!

Recently published:
1. $700K coming back!
2. DBS and CPF miracle!

DBS and CPF miracle! Happiness!

I don't usually blog at night but this is so exciting that I just have to talk to myself.

Yesterday, I talked about my 1 year T-bill which I purchased with CPF OA money maturing.

This was the available balance in my CPF IA then:

I also said that I transferred the funds from CPF IA back to CPF OA upon seeing the money credited at 5pm.

This was my CPF OA balance yesterday:

DBS online portal said it would take up to 3 business days for the transfer to be done.

That would mean losing another month of CPF OA interest if the money went back to the CPF OA in February.

It is what it is, I guess.

However, I decided to check my CPF account just now just to see if a miracle took place.

Well, a miracle did happen!

The money is back in my CPF OA which means I would not lose another month of CPF OA interest!

My faith in DBS bank is restored!

Yes, I know.

AK is so shallow.

Bad AK! Bad AK!

I am so happy now.

Losing an extra month of CPF OA interest is a big deal in this instance because the sum is so big.

We are looking at about $1,400 of interest income.

Huat ah!

If AK can be shallow, so can you!

Reference:
CPF account recovery: Thoughts and plan!

My plan after 3.45% p.a. 1 year T-bill.

Massive disappointment.

Many felt that when the cut-off yield came in at 3.45% for the latest 1 year T-bill auction.

I somehow got the dates messed up and I couldn't take part in the auction.

Regular readers might remember that I bought a 1 year T-bill about a year ago using CPF-OA money.

That cut-off yield was 3.87% p.a. and would mature on 30 January 2024.

So, it would not have matured in time for the recent 1 year T-bill auction.

Somehow, I kept thinking that it would.

Anyway, no loss there.

3.45% p.a.

I would not have gotten the T-bill even if the money came back in time.

I would have placed a competitive bid of 3.5% p.a.

That is minimally acceptable to me when using CPF OA money to buy T-bills.

This is because the breakeven is 3.33% p.a.

This covers the possibility of losing 8 months of CPF OA interest and not just 7 months.

So, at 3.5%, I am only getting 0.17% more than what CPF OA would pay me.

This means that for $100,000, it is a $170 difference.

For $670,000, which is the amount from my last 1 year T-bill with CPF OA money, the difference would have been about $1,140.

Nothing to write home about but still something.

Of course, getting 3.87% the last time, the difference was more significant.

Anything lower than 3.5% p.a., I would just leave the money in the CPF-OA.

Not enough meat for me to be interested.

So, what am I doing with the CPF OA money coming back?

I will try for 6 months T-bill, bidding competitively at 3.5% p.a.

If I don't get it, no big deal.

If AK can talk to himself, so can you.

Reference:
CPF account got hacked!

Reducing risk and volatility on portfolio level.

I have picked up Yu Gi Oh again!

Found that I could play it for free online.

It was something I played but only for a bit and I enjoyed the anime.

I didn't have a deck of my own as it was too expensive to build one.

I had to use a friend's deck.

It was so long ago.

Old brain.

So rusty.

It is a strategy game that really tests my ageing brain which is a good thing.

Helps to slow the onset of dementia, maybe.

Anyway, like I said in a previous blog post, I have been contemplating just buying T-bills and bonds from now on.

Of course, if the yields decline, I could always go back to making contributions to my CPF account.

Regular readers know that I treat my CPF savings as an investment grade bond component of my portfolio which pays reasonably attractive coupons.

This way, I would continue to grow the risk free component of my investment portfolio.

I must realize and embrace the fact that I don't really have to take on more risk anymore although I could still buy more stocks if Mr. Market goes into another severe depression.

Like I said several times before, that would be the time to dismantle my T-bill ladder.

Doing this, buying T-bills and bonds in the meantime, price volatility on the portfolio level would reduce over time.

The last T-bill auction saw a cut-off yield of 3.74% p.a.

Until the Fed reduce interest rate, I am expecting similar cut-off yields for the time being.

I have put in a non-competitive bid for the upcoming auction happening on this Thursday, 18th of January.

That's all for this update.

If AK can talk to himself, so can you!

Related post:
SSB, T-bills, banks and plan.

CPF savings, SSBs & T-bills in January 2024.

Last year, I published a blog post with a very eye catching title regarding my CPF savings.

"More than $1.1m in CPF savings!"

Well, this time, it is a whimper, in comparison, at less than half a million dollars. ;p

So, how much exactly?

Here is my CPF pie chart at the end of 2023:

Some readers might say that for the first time in a long time, my CPF savings look "normal." ;p

CPF OA savings less than CPF SA savings.

For people who use most of their CPF OA savings to fund a flat purchase, this is probably normal.

Of course, regular readers of my blog would know that most of the money in my CPF OA went to buying T-bills.

Two T-bills.

A one year T-bill is maturing end of this month.

A six months T-bill is maturing in the middle of March.

So, the money will come back.

I will transfer the money from the CPF IA to the CPF OA when it happens.

Then, if yields stay relatively high, I would probably buy T-bills again.

Of course, with CPF funds, I do competitive bidding.

3.5% p.a. is a reasonably sensible bid to place.

I produced a video on this topic before too and, in case some are interested, here it is:

Hope the video is helpful.

Of course, another reason why my CPF savings did not grow as quickly as before was because I did not do voluntary contributions last year.

The money earmarked for that went to buying Singapore Savings Bonds instead which offered higher than 3% p.a. in 10 year average yield.

For those who didn't know this, here is the link to the blog post:

"SSB: Mission accomplished."

I won't be doing voluntary contributions to my CPF account this year in 2024 either.

Why?

I front loaded the "contributions" last year, buying more Singapore Savings Bonds later in the year.

See this blog post:

"SSB: Missions update!"

All as well.

The latest Singapore Savings Bond is offering only 2.81% p.a. in 10 years average yield.

So, that is an easy skip for me.

In any case, I am in no hurry to buy more Singapore Savings Bonds since whatever I want to buy to replace voluntary contributions to my CPF account in 2024 was filled last year.

If the yield remains low for the rest of the year, I will go back to doing voluntary contributions to my CPF account in 2025.

Easy.

Till the next blog post, mask up and stay safe!

If AK can do it, so can you!

List for 2024! CPF BHS. T-bills. 2023 passive income.

Happy new year!

Brand new month and brand new year!

I have been busy the entire month of December and now I have to plan my January.

I have so much to do in different worlds.

Neverwinter, World of Warships and Black Desert Online.

12 to 14 hours of time spent in virtual worlds.

Of course, I must not forget things I must do in the real world too.

January looks like it is going to be another busy month too.

Oh dear.

I wish I had 25 hours a day instead of 24.

Maybe, 26 or 27 hours would be better.

Yeah, bad AK!

So many things to do in my retirement and so little time.

Anyway, as I am growing forgetful in my old age, this blog will quickly outline the stuff I am going to do when it comes to money matters.

1. Top up my CPF MA to the new BHS.

The new BHS is $71,500 in 2024.

This is up from $68,500 in 2023.

Interest earned in my CPF MA will flow into my CPF OA since my CPF SA has already hit the FRS.

So, I will be able to do a $3,000 top up to my CPF MA this month in January.

I will do it earlier than later just in case I forget later.

2. Blog about my updated CPF balance.

My CPF balance will look very "weak" in 2024.

I published a blog last year where I reacted in "horror" that my CPF account was "hacked!"

The bulk of my CPF OA money is in a 1 year T-bill with a cut-off yield of 3.87% p.a. which is why my CPF OA balance is much lower.

That T-bill is maturing at the end of the month.

So, the money is coming back.

I must remember to transfer the money back into my CPF-OA.

3. 6 months T-bills.

I got both 6 months T-bills offered in the month of December 2023.

The cut-off yields were 3.74% p.a. and 3.73% p.a.

Not too bad.

The plan is to maintain my T-bill ladder in 2024.

The yields are still relatively attractive to me.

So, I have already made a non-competitive bid for the auction taking place on 4th January 2024.

If Mr. Market should go into a depression in 2024, it would be time to dismantle the ladder.

4. 2023 full year passive income.

I have been so busy in December that I have not been keeping up with things on the investment front.

I will have to spend some time looking at numbers to account for my passive income in 2023.

I am expecting a weaker Q4 2023 since UOB and OCBC pay dividends only twice a year in May and August.

Year on year, passive income could come in weaker as the REITs I hold are generating less income for me too.

There will be some income generated by T-bills in the portfolio but that won't move the needle much, I suspect.

Hmm.

I think that is all when it comes to money matters and blogging.

Lots of other stuff I have to do but I shan't clutter this blog post.

OK, maybe just this one thing.

I shared this screen-shot of the port of Velia in Black Desert Online in my YouTube community tab on Boxing Day.

You can see my ship docked in the extreme right of the picture.

I am working on upgrading it be like the taller and larger ship with the black sails in the center of the picture.

Work in progress and I should be able to get it in a few more days.

Makes me happy thinking about it.

Will be happier once it is done!

That is all for now.

Look out for upcoming blog posts on my CPF savings and 2023 passive income update.

I will be back!

If AK can talk to himself, so can you!

SSB, T-bills, DBS and UOB. Plan for December. Easy.

This is probably going to my final blog post for 2023.

Planning on taking it easy for the rest of the month when it comes to social media.

Have been a little too active in the last few months on YouTube.

Now, going to spend more quality time with myself.

Being able to play three games everyday on my new gaming laptop makes me very happy.

That is what retirement is about.

It is about being happy.

A few things to talk about.

1. T-bills and SSB.

The Singapore Savings Bond being offered this month is offering a stunning 3.07% p.a. 10 year average yield.

Stunning for the wrong reason since last month's offer gave an attractive 3.4% p.a. 10 year average yield.

I think I will give this one a miss.

Am I veering away from my plan to keep buying Singapore Savings Bond as long as the yield is above 3% p.a. or not?

Well, the plan was to replace CPF Voluntary Contributions with Singapore Savings Bonds.

I have already done it with money meant for the CPF in 2023 and 2024.

2025 is work in progress and there is really no hurry.

In the meantime,  I will continue to strengthen my T-bill ladder.

The last T-bill auction had a cut-off yield of 3.8% p.a.

Hopefully, it stays there for the auctions happening this month too.

2. DBS and UOB.

I still want to increase my investment in the local banks.

OCBC is already a very large position.

So, the idea now is to grow my positions in DBS and UOB.

For me, the stock prices to add would be between $30 to $30.50 for DBS and closer to $26 for UOB.

3. Taking it easy.

I have been thinking of taking it easy when it comes to investing for some time.

However, after a recent recording with The Fifth Person, I have been thinking about it even more.

The decision to retire early was a big step for me.

I was always a worrier and I still am a worrier.

Still, I convinced myself that I had sufficient financial resources to retire early.

Then, in retirement, I began to question if I really did have enough.

I continued to invest for income and increase my passive income in retirement.

In recent years, I have been telling myself to take it easy and that I have enough financial resources not to have to worry.

I have had some success but something Adam said during the recording hit home.

So, I could simply just buy more Singapore Savings Bonds and T-bills from now on and still be quite comfortable.

Risk free and volatility free.

Don't have to do anything else.

This would be another phase in my life, if I should do this.

To be honest, I rather like it.

Anyway, that's all the talking to myself for now.

If AK can talk to himself, so can you!

Merry Christmas and Happy New Year!

Added to position in DBS. T-bill 3.8% p.a. cut-off yield.

Just a quick update on what I have done in recent days to my investment portfolio.

For anyone who is following me on YouTube, it is no secret that I have been looking to add to my investment in DBS.

I identified the immediate support to be at $32.00, and if that should break, then, $31.80 would be next.

I added to my position at closer to $31.80 a share but it is just a nibble.

I see longer term support for DBS at between $30.00 to $30.50 a share.

So, that is where I would like to buy more.

DBS continues to impress me with its much higher ROE of 18% to 20% when compared to UOB and OCBC which have ROE of around 14%.

So, I feel that this justifies DBS trading at a higher price to book.

There is also the fact that DBS pays dividends quarterly and as a retiree who lives off his passive income, this is also attractive to me.

Next topic is T-bills.

The auction happened yesterday and the cut-off yield was 3.8% p.a.

I estimated it to be 3.88% p.a. but 3.8% p.a. is good enough to make me happy.

What also makes me happy is that non-competitive bids were fully allotted.

T-bill ladder is intact!

Next auction is happening on 7 December.

So, nothing earth shattering happened, really.

Just sticking to my plan.

Always have a plan, your own plan.

If AK can do it, so can you!

3.75% p.a. cut-off yield for T-bill. Disappointing.

The results for the 6 months T-bill auction came out at 5pm or so.

I made a short video on this soon after.

In a nutshell, I was disappointed.

I did make a video a few days ago saying that we could see 3.88% p.a. based on the daily SGS prices and yields published by the MAS.

Of course, I didn't expect an exact match but 3.75% is even lower than the auction that took place one month ago.

That gave 3.87% p.a.

The last time it was lower was 2 months ago in September at 3.73% p.a.

Anyway, as I was using cash, I just placed a non-competitive bid.

This is so that I would get at least some of my application filled if there was a high level of interest.

Well, only 95% were allotted.

This means that if we had applied for $20K, we would get a refund of $1K.

To be fair, a cut-off yield of 3.75% p.a. is not bad.

It is still more than what most 6 months fixed deposits would pay, and if we consider the fact that the interest is paid at the start of the duration, it is actually more than 3.75% p.a.

So, disappointed I may be but not too much so.

Think positive!

Better for my mental health!

As for people using CPF-OA money, I always say to do competitive bidding because we do not want to be a victim of the unthinkable.

I have said in the past that a sensible competitive bid would be one that would not cause us to lose out on interest income in the end.

So, using CPF-OA money, the break-even is about 3.33% p.a. and since we should be aiming for more than breakeven, a competitive bid of 3.5% p.a. makes sense.

(3.33% p.a. takes into consideration the possibility of losing 8 months of CPF-OA interest.)

To be honest, unless the amount is significant, the difference in interest income is not going to be very meaningful.

I think this is not hard to understand.

So, I wouldn't be too worried if the amount of  CPF-OA money involved is, say, less than $50K.

So, until the next T-bill auction, it is back to my games.

If AK can do it, so can you!

SSB missions update! Redemptions! SSB I forgot I had!

I don't usually look at my CDP statement these days because I really dislike looking at it online. 

So uncomfortable.

I miss the paper statements so much.

Yes, I know the argument for going green but I am not sure that going from chopping down trees to guzzling energy in data centers is a good trade or not?

After all, we can replant trees but unless we are using renewable energy, data centers are big polluters, if we think about it.

1. SSBs

Anyway, I had to check my CDP statement just to be sure that my paper records are accurate for Singapore Savings Bonds.

As it turns out, there was a Singapore Savings Bond which I thought of buying but wasn't sure if I could.

I blogged about it but it wasn't very clear.

See:
SSB 3.06% p.a. 10 years average yield.

Well, I could not find any trace of this in my CDP statement.

Blessing in disguise, maybe.

After all, this month's offer is for 3.4% p.a. 10 years average yield.

2. SSB redemption.

I am redeeming SBMAY23 which I did buy.

That offered a 3.07% p.a. 10 years average yield.

That was bought to partially replace CPF voluntary contributions in 2024.

See:
Saving for income 3.07% p.a.

Will use the funds to apply for SSB this month.

But the funds will only come back to me next month!

How like that?

I will have to use money in my war chest first and the returning funds will go back to my war chest next month.

Like I said in the previous blog post, AK can juggle money.

3. Forgotten SSB!

While going down the list of investments in my CDP statement online, I found an SSB that I forgot I had!

This was bought in 2018!

OMG!

10 year average yield of less than 3% p.a.

Alamak!

OK, I am redeeming that too.

The funds will go to my war chest next month.

More money for T-bills, maybe.

4. SSB mission for 2023.

Anyway, this is a blog post to remind myself of what I have done and what I am doing in the SSB space.

Mission accomplished in replacing VC to CPF with SSBs in 2023.

See:
SSB mission accomplished.

5. SSB mission for 2024.

For VC to CPF in 2024, I am (re)applying for SSB this month with funds from the redemption of SBMAY23.

Together with another SSB purchased in March, this will (re)complete the mission for 2024.

See:
SSB March 2023 3.15% p.a.

I thought of redeeming the SSB bought in March too but I have a feeling that the SSB this month is going to be oversubscribed as well.

So, I could end up being only partially allocated if I applied for a larger amount.

Anyway, my war chest doesn't like being depleted even if only temporary.

With yields at the long end of the curve rising, like I said in an earlier blog, there is no hurry to lock in higher yields.

Famous last words? Maybe.

6. SSB mission for 2025.

If I get what I apply for this month, it would be $15K of SSBs in total for the year 2025.

Since this is a mission for 2025, I have plenty of time to complete it.

Crossing fingers that 10 year average yields for SSBs will remain relatively high.

See:

SSB 3.16% p.a.

SSB 3.32% p.a.

SSB 3.4% p.a. (and 6 months T-bill ladder.)

If AK can buy SSBs, so can you!

SSB 3.4% p.a. and 6 months T-bill ladder.

At the beginning of October, I had this to say:

"Although I am sticking to my strategy of growing the investment grade bond component of my investment portfolio, there might no longer be a hurry to lock in higher yields for the longer term now."

I said that because we could see yields staying higher for longer.

So, I have been nibbling at Singapore Savings Bonds in the past 2 months.

This month's offer by MAS is 3.4% p.a. in 10 year average yield which is a tad higher than 3.32% p.a. we saw last month.

I will be nibbling again.

How much is that exactly?

Only $5K.

That qualifies as a nibble for me.

Q4 and Q1 are going to be leaner for me in terms of passive income I receive from my investments.

So, I will have to be more careful with money.

As for T-bills, I will continue to maintain the ladder from the next auction.

I won't be strengthening the ladder for a while as I set aside some funds for the purchase of SSBs.

Someone actually suggested that I rejoin the workforce so that I wouldn't have to do such juggling act when it comes to money.

OMG!

PTSD!

If AK can juggle money, so can you!

References:

1. SSB 3.32% p.a. Higher for longer.

2. Increasing bond exposure.

My plan for CPF as SSB 3.32% p.a. oversubscribed.

I blogged about my interest in buying some Singapore Savings Bond which offered 3.32% p.a. in 10 year average yield.

It seems that many more people have the same idea.

The results are out.

The SSB was oversubscribed.

Fortunately, for smaller applications like mine, we had 100% of our applications filled.

This SSB partially replaces planned voluntary contributions to my CPF account in 2024, the year I turn 54 years of age.

If this continues, it looks like I won't be making further voluntary contributions to my CPF account.

The plan was, of course, to continue making voluntary contributions till I turn 55.

With interest rates being so low for so long, the plan was to continue making voluntary contributions to my CPF account even after I turn 55.

The idea was to use the CPF as a high interest rate savings account beyond age 55.

However, with interest rates likely to stay higher for longer now, that plan has become less attractive.

Some might even say the plan is now obsolete.

I could get higher interest rates simply by putting money in fixed deposits, for example.

The only drawback of the SSB is that it does not compound interest earned.

Still, at my age, with the resources that I have and the kind of financial obligations that I have, I think that is almost a non-issue.

This is just me talking to myself, of course.

We have to do what makes sense for us.

If AK can do it, so can you!

T-bill's 3.87% p.a. cut-off yield and only 79% allotted.

After the 4.07% p.a. cut-off yield in the prior T-bill auction, I was looking forward to a possibly higher cut-off yield for this auction.

Unfortunately, the possibility of a much higher cut-off yield attracted many low-ballers, and that crushed all hopes of a higher yield.

If we look at the average yield for this auction and the auction that took place on 28 Sep, it is quite clear what happened.

This auction's average yield is 3.37% p.a.

28 Sep's average yield was 3.51% p.a.

There were people bidding much lower than 3.37% p.a. to secure the T-bills in this auction.

As low as 2.37% p.a.

That is just asinine.

That is even lower than what the CPF-OA pays!

The amount of interest in this auction shot through the roof as only 79% of non-competitive bids were allotted.

I hope the low-ballers are happy now that everyone ends up with a lower cut-off yield.

Reference:
4.07% p.a. T-bill.

Increasing bond exposure on higher yields.

In my last blog post, I shared how much passive income I received in the first 9 months of 2023.

My investment portfolio is still bringing home the bacon.

However, there is more variety to the bacon now.

Why do I say this?

Over the years, I have been very consistent in saying that I want to maintain a meaningful percentage of investment grade bond in my portfolio.

For a long time, I said that I treat my CPF savings as the investment grade bond component of my portfolio.

Risk free and volatility free, there really isn't a better option for a person like me.

I have a blog post titled "Unless we are very rich, CPF is all we need" to share my perspective on the matter.

This is the link to that blog post: HERE.

Of course, I share my CPF numbers at the start of every year, showing how much interest income is paid to me.

This interest income is not included in my quarterly passive income update.

Why?

The CPF interest generated is not immediately available for withdrawal to be used in any way we like.

We will be allowed to withdraw any CPF savings in excess of the Full Retirement Sum and the Basic Healthcare Sum when we turn 55 and not earlier.

My quarterly passive income report has always been about income generated by my investments in the stock market.

This year, however, my investment portfolio also includes bonds.

In the last one year or so, with bond yields much higher, I have also been buying Singapore Savings Bonds and T-bills.

So, my quarterly passive income report this year has another flavor.

A sprinkling of fixed income.

With bonds being much more rewarding now than 1 year ago, I am going to continue strengthening my T-bill ladder and, hence, enlarge the bond component of my portfolio.

I am a lazy fellow and would always go for low hanging fruits first.

Taking advantage of the CPF-SA and the CPF-MA was an easy decision so many years ago.

Taking advantage of the higher bond yields now is another easy decision for me.

To be sure, the coupons received from bonds will not make an earth shattering difference to me even as they nudge my quarterly passive income a little higher.

However, if we focus on this difference, we are missing the point.

What's the point then?

This is risk free and volatility free.

There is assurance that we will get paid during good and bad times.

This is very comforting to me.

Having such a component in my investment portfolio helps to smooth out rough patches which are bound to appear from time to time.

All else being equal, I will continue to increase exposure to this asset class in 2024.

If AK can do it, so can you!

SSB 3.32% p.a.: Higher for longer!

When I blogged about last month's SSB which offered 3.16% p.a. 10 year average yield, I said I would probably be buying some.

And I did.

Just a modest sum of money as I was "borrowing" the money from 2025.

It was money which I would otherwise have earmarked for voluntary contribution to my CPF account in 2025.

2025 would be the year I turn 54 years of age.

Now, I see this month's SSB offering 3.32% p.a.

What am I doing?

I will be buying again, I suppose.

Again, it would be a modest sum of money.

Although I am sticking to my strategy of growing the investment grade bond component of my investment portfolio, there might no longer be a hurry to lock in higher yields for the longer term now.

I recently produced two YouTube videos on the likelihood of interest rates staying higher for longer.

This is the current day narrative and it seems to have gained traction.

This is probably why the last T-bill auction surprised us with a cut-off yield of 4.07% p.a. too.

Much higher than many expected.

If you have not watched the YouTube videos yet, here are the links:

1. This could be BAD! Why look at bond yields?

2. Reason why it could be a lot WORSE!

The yield curve is still very inverted with the shorter durations being more rewarding.

So, strengthening my T-bill ladder would be more rewarding.

Still, reinvestment risk exists with the T-bill ladder.

I tell myself not to complicate things and simply stick to my plan.

1. Maintain and strengthen T-bill ladder for another source of recurring income.

2. T-bill ladder can be dismantled gradually to buy stocks during a recession.

3. Buy SSBs with money meant for VCs to the CPF as long as SSBs' 10 year average yield is higher than 3% p.a.

There is no way I am going to make all the money in the world.

If AK can talk to himself, so can you!

4.08% FD replaced by 4.07% T-bill! Huat ah!

The latest 6 months T-bill gives us a cut-off yield of 4.07% p.a.

Yes, AK stunned like vegetable!

I was expecting 3.75% p.a. thereabouts!

Pleasantly surprised!

The narrative that interest rates will stay higher for longer might be true, after all.

Don't know how much longer this situation is going to last but I will just make hay while the Sun shines.

To be sure, I am also doing this while waiting for Mr. Market to go into a depression.

It is bound to happen.

So, it is not going to be if Mr. Market goes into a depression but when Mr. Market goes into a depression.

I want to be prepared when that happens.

It could happen next year or the year after that or it could happen before this year ends.

There are so many different opinions from so many experts that I have decided to stop listening a long time ago.

All I know is that if I am prepared, I will do OK.

With my OCBC fixed deposits which paid 4.08% p.a. maturing this month and next month, I am rolling most of the funds into new fixed deposits with with CIMB.

Not as high as 4.08% p.a. but higher than the 2.7% p.a. offered by OCBC.

I am using a portion of the funds to strengthen my T-bill ladder too which will pay me every 2 weeks.

Fortunately, I did that for the recent T-bill auction too.

My non-competitve bids were fully allotted!

4.07% p.a.

AK is giddy with joy!

Always ready, surely, it is good to be paid while I wait.

If AK can do it, so can you!

Money keeps flowing into my pockets.

Following my last three blog posts, I checked three accounts today.

My bank account.

My SRS account.

My CPF account.

Why?

To see how much pocket money I am getting from the recent T-bill auction, the one that took place on 14 September.

People sometimes look down on small sums of money, especially in today's environment of high inflation.

"Walao! $2 only you also calculate!"

$2 is also money.

Small sums of money add up to big sums of money.

Being careful with small sums of money can only help in our journey towards financial freedom.

Don't kick a pup because when the pup grows up, it will come back to bite you.

OK, this is true for regular folks like AK.

For "jin satki" people or high-flyers who make hundreds of thousands or millions of dollars per year, please stop reading.

You have come to the wrong blog.

Still here?

OK, shocking numbers up next.

Anyway, here is the breakdown:

$186 from $10,000 cash.

$148.80 from $8,000 SRS money

$216.16 more in interest income from $52,000 CPF OA money.

So, $186 goes into my current day pocket. 

$148.80 goes into my pocket which can only be unzipped 10 years later from age 62.

$216.16 goes into my pocket which can only be unzipped 3 years later from age 55.

Shocking, right?

Some people might be wondering why "rich" AK bought so little T-bills.

AK is just a regular guy and not "rich".

Why some people don't believe me?

Sigh.

T-bills are risk free and volatility free.

Not a bad way to make sure I have more pocket money now and in the future.

However, I am very aware of re-investment risk as high interest rates might not be around for long.

I will continue to wait for better opportunities to invest for dividend income.

While waiting, there is nothing wrong with getting relatively attractive risk free returns.

If AK can do it, so can you!