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CPF account is recovering almost $700K. Thoughts.
Tuesday, January 30, 2024Posted by AK71 at 9:35 AM 14 comments
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CPF,
money management
F.I.R.E. Always have a Plan B! Better and cheaper!
Thursday, November 16, 2023I always say try not to be married to our jobs.
Spent money and will spend more time.
Posted by AK71 at 12:28 PM 12 comments
Labels:
ASSI,
money management
High yields to stay? T-bills paid 3.73% to 4.2% p.a. so far.
Tuesday, August 29, 2023
The next 6 months T-bill's auction is happening this Thursday.
So, if we are building or maintaining a T-bill ladder, don't forget to put in a bid.
I will be putting in a non-competitive bid again.
No reason to agonize over how much to bid for in a competitive bid when chances are any cut-off yield is likely to be higher than offers from the banks for a 6 months fixed deposit for now.
I just produced a video on a 3.6% per annum offer for a fixed deposit but that is for a 9 months tenure.
This is the link to the video for readers who do not follow me on YouTube:
Locking in 3.6% per annum for the next 9 months.
Cut-off yields for 6 months T-bill so far have stayed above 3.7% per annum.
However, it seems to be declining.
In January, we saw a 4.2% cut-off yield.
This month, we saw 3.73% which was the lowest cut-off yield this year.
Like I said in a podcast, interest rates are higher now but they are unlikely to stay high forever.
As investors for income, I did not get to where I am by relying on fixed income to grow my wealth.
However, I am not going to reject relatively attractive risk free and volatility free returns while they stick around.
If AK can do it, so can you!
Posted by AK71 at 8:39 AM 6 comments
Labels:
bonds,
investment,
money management
68% expects downturn! CPF POFMA! Distressed REITs!
Tuesday, August 22, 2023I have three things to say.
Posted by AK71 at 9:28 AM 18 comments
Labels:
CPF,
investment,
money management,
REITs,
Singapore
Lean F.I.R.E. and Barista F.I.R.E. World of Warships!
Wednesday, August 9, 2023
During my recent podcast with The Fifth Person, Adam asked me if I knew about F.I.R.E.
I told him I only learned about F.I.R.E. after I did it!
And there are so many versions of F.I.R.E. since the time I found out about it.
Of course, if you have been reading my blog regularly, you would have read my piece on Lean F.I.R.E. which I published not too long ago.
I didn't think it was a good idea.
Basically, it meant having only enough financially to fund a very simple early retirement lifestyle.
Lean F.I.R.E. leaves little or no room for error.
Without any buffer, if we should have a situation where inflation increases rapidly and stays persistently high, we could be forced to rejoin the labor force, and when we are much older too.
Of course, if we depend on some passive income to fund our Lean F.I.R.E. plan, we would have to depend on the reliability of such passive income too.
Rejoin the labor force when we are older because we have no choice but to do it?
Not a pleasant thought.
Being a worrier, I cannot live like that and would probably not be able to sleep at night.
I remember some people saying I could have retired earlier.
Why did I wait till I was 45 years old?
For one thing, my plan was always to retire at 45.
OCD.
Another thing, I was worried I might not have enough, and having more money is always better.
Yes, I was building a buffer.
Some might even say I was building a buffer for my buffer.
Or was it a buffer for a buffer that's for another buffer?
Whatever we might call it, it's all good.
During the COVID-19 pandemic, we had an acid test for all F.I.R.E. practitioners.
Not everyone could stay retired as we saw some rejoining the workforce.
I think they would have been mostly people who practiced Lean F.I.R.E.
Anyway, this is just my view.
I am not demonizing Lean F.I.R.E. or anything.
I just feel strongly that if we are planning for Lean F.I.R.E., we must be aware of the potential pitfalls.
Then, I recently read about "Barista F.I.R.E."
That name conjured for me a Bohemian image.
Quite an attractive image, to be honest.
I found out that Barista F.I.R.E. basically meant semi-retirement, or at least that is what people my age would call it.
We would continue to be in the workforce but we would be working part time in Barista F.I.R.E.
So, this means we have more time to do the stuff we like.
For people who are tired of working full time, this is certainly an option.
A viable one too.
For people who want to be a full time gamer like AK, of course, this is not an option.
OK, I know.
Bad AK! Bad AK!
Talking about games, this is my latest warship, the Tier 9 Roon, which is a German cruiser.
In my blog dated 28 July, I shared a photo of my warship then which was a Tier 6 German cruiser.
This being a public holiday, if you should be interested in a free to play video game, try World of Warships on the Asian server.
I am having a lot of fun and have not spent a single cent.
Use my referral link and both of us will get some freebies in game.
We can both F.I.R.E. at some enemy warships!
World of Warships. (AK's referral link.)
On a serious note, I think that Barista F.I.R.E. seems like a safer choice compared to Lean F.I.R.E. for people who wish to retire earlier with less money.
Barista F.I.R.E. means never leaving the workforce which means staying connected and probably more employable.
In more difficult times, people who have left the workforce for some time might find it hard to find a job, especially when they are much older, and their skill sets might no longer be as relevant.
So, Barista F.I.R.E. allows more room for error.
There are many ways to crunch the numbers for Barista F.I.R.E.
If I were to do it, I would estimate how much I might need for 40 years if I would like to retire by age 45.
This is because the average lifespan for males in Singapore is 85 years old.
Of course, I am being very cautious here because I would invest for income and not just have the money sitting in a savings account to be drawn down.
However, in an extremely unthinkable situation where passive income froze, then, I would have to draw on my savings.
Then, after estimating how much I might need for 40 years, I would need to estimate how much my part time job would pay me in those 40 years.
Subtract that expected income from the expected expenses for 40 years and I would know how much money I must have by age 45 before I could execute Barista F.I.R.E.
Of course, if we factor in the expected passive income from our investments, then, the amount of money required before we could enjoy Barista F.I.R.E. would be reduced.
Anything to add?
I will say that for Barista F.I.R.E. to be quite comfortable and worry-free, we should still keep an emergency fund.
We must be ready for the possibility of not only our passive income slowing to a trickle or drying up completely (if we have been wise enough to invest in some income generating assets,) we must also be ready for the possibility of losing our part-time job.
Peace of mind is priceless.
Don't just say it.
Make sure we have done enough to truly have peace of mind.
Neither Lean F.I.R.E. nor Barista F.I.R.E. is for me.
They are watered down versions of the original concept of F.I.R.E. but they could be what some people want.
Quite possibly, some people might even need them.
Have to be fair.
To be sure, I am not judging anyone for choosing these forms of F.I.R.E.
It is never my way or the highway.
As usual, I am just talking to myself.
If AK can talk to himself, so can you!
Happy National Day!
Visit AK's YouTube Community page:
https://www.youtube.com/@A.Singaporean.Stocks.Investor./community
References:
1. Retirement drawdown strategy.
2. Avoid Lean F.I.R.E. and struggling with higher costs.
Posted by AK71 at 7:40 AM 10 comments
Labels:
money management,
passive income
Are all Singaporeans rich? Be richer in 3 years!
Saturday, July 15, 2023
While watching some YouTube videos regarding the economy, a video titled "Are All Singaporeans Rich?" popped up in the right sidebar.
I am usually not interested in videos like this but since I blogged about Singaporeans being obsessed with salaries not too long ago, I decided to give it a go.
Fortunately, the video had timestamps which allowed me to watch the segments I was more interested in.
It is interesting to see that the people interviewed in the streets of Singapore mostly agreed that everything was expensive in Singapore.
Most of them had earned income of $5K a month or more.
Personally, I think I can be quite comfortable with a salary of $5K a month today.
Apart from cars and private housing, I don't think Singapore is expensive.
Why do many Singaporeans think that a salary of $5K a month is insufficient?
Watching the video produced so many "Alamak, AK!" moments.
Someone said he would buy lattes regularly, paying $8 a cup!
Then, there is pubbing on weekends and taking taxis!
(OK, as a ComfortDelgro shareholder, I think taking taxis is a good idea. Please continue.)
Then, some talk about fine dining and how expensive wine is in Singapore!
Hey, we have choices.
If we overpay for coffee and if we choose to take taxis instead of buses and trains, of course, it would lead to a higher cost of living.
If we choose to get our nutrition in fancy restaurants, definitely, it would be costlier.
Such a lifestyle in any country would be more expensive than more humble alternatives in the same country.
Am I right to say that?
So easy to blame others for bad results even when it was our choices that led to those results.
Don't say Singapore is expensive when we make expensive choices.
Wake up.
A lady said that she had to work harder to earn more money.
I don't think that is a bad thing per se.
If she worked harder and put some of the money to work in order to generate passive income, her financial health can only improve over time.
If we do the right things, we don't have to worry too much about our financial future.
If I were 30 years old today and drew a salary of $5K a month, if I were truly prudent, I could probably save 50% of that money each month.
If I were to invest $2K per month in good income generating businesses, with a dividend yield of say 4% to 5%, I would be able to generate a few thousand dollars per year in passive income by the end of the third year.
Yes, it would take only 3 years to see meaningful results!
Over time, if we make more money, we could put more money to work if we stay financially prudent.
I remind myself that it is not how much money we make but how much money we save that will tell us if we are growing richer.
Then, be a pragmatic and patient investor for income and we can only become richer.
Not all Singaporeans are rich but all Singaporeans can be richer.
If AK can do it, so can you!
Related posts:
1. Why obsess with salaries?
2. Passive income as much as earned income?
Posted by AK71 at 9:48 PM 16 comments
Labels:
money management,
passive income,
Singapore
F.I.R.E. AK still needs $136K p.a. Growing richer or poorer?
Sunday, June 18, 2023
This blog is just a bit longer than the video because I had a bit of problem with the voice recording.
----------------------
However, for people like me who have aged parents and for those who have children, if we want to retire early, it is financially more demanding.
Of course, regular readers know that I will not be making any voluntary contribution to my CPF account in 2023 and 2024.
Yes, the COVID-19 pandemic changed the way I look at many things, including investments.
I don't think I would ever need to draw on my CPF savings.
Posted by AK71 at 2:48 PM 17 comments
Labels:
money,
money management,
passive income,
wealth
UPDATES. Time and money. Rights issues and parents.
Tuesday, June 13, 2023
First update is on the subject of "time".
In recent weeks, I settled into a routine of producing videos and then publishing the transcripts here.
Both the video and the blog would be released within minutes of each other.
I kept doing that because I had an inkling that most people who "eavesdrop" on AK don't really enjoy eavesdropping.
They really enjoy reading AK's diaries.
Tsk, tsk.
Terrible.
Anyway, looking at the viewership and readership numbers, it is quite apparent.
As I am a hobbyist YouTuber just like I am a hobbyist blogger, this isn't a tragedy.
In fact, it could be a blessing in disguise.
Although I still enjoy making YouTube videos as a hobby and I have produced videos almost daily for more than a year, I might do it less often as it is more time consuming.
So, in future, there might be more blogs like this where there would not be a corresponding video.
I need more than 24 hours a day to do all the things I want to do in retirement!
I really have quite a bit of catching up to do in the online games I am still playing, for example.
Second update is on the subject of "money".
Some readers might know that my retiree parents are invested in AIMS APAC REIT and IREIT Global too.
Apart from their CPF and SRS savings, the two old folks have rental income from a shoe box apartment and dividends from some stocks.
As I am paying the property tax and maintenance of their rental property, they are able to enjoy the rental income in full.
Being retirees, they are living off passive income as they should.
However, total passive income they get in a year is only about half of what their total yearly income was before they retired a few years ago.
I remind myself of the following.
If not for us children, for sure, they would have been able to save a lot more money for their retirement.
There is also the fact that their CPF and SRS savings would be depleted in their mid 80s which is only another few years from now.
For readers who have been following my blogs on the topic of providing financial support for my parents, this probably throws more light on why I have significantly increased the quantum in recent years.
Since I do not expect my own expenses to grow significantly in future, I am ready to provide even more financial support to my parents if required.
This is so that they would not have to make too many changes to their lifestyle in retirement or compromise on their standard of living in their old age.
Alamak!
This is supposed to be a quick update and I just went rambling off.
A thousand apologies!
Back to AIMS APAC REIT and IREIT Global.
I have decided to help my parents pay for their rights units.
Of course, consistent with what I have said before, I will keep an eye on the current unit prices as well.
Mr. Market seems to be feeling rather pessimistic and if I should be offered prices which are much lower, I would buy from the open market.
In such an instance, I would be leaving the sponsors of the REITs to pick up my rights entitlement in the form of excess rights for them instead.
In fact, I have overnight BUY orders to buy more units in AIMS APAC REIT at $1.16 a unit and IREIT Global at $0.42 a unit as, technically, these look like strong supports to me.
To be honest, it would be a pleasant surprise if my orders are filled but I know never to say never.
Of course, helping my parents to increase their investments in the REITs this way would mean that I would have less money to add to investments in my own portfolio.
However, trying to make more money for myself really hasn't been a priority for me for quite a while now.
Why do I say this?
Is having more money no longer important to me?
Am I OK with growing poorer over time?
Hmm.
I really don't want this to be a long blog.
So, I might blog about this topic a bit more later in the week.
Let me end this update here for now.
If AK can talk to himself, so can you!
Related post:Do we give our parents enough money?
Posted by AK71 at 9:15 PM 17 comments
Labels:
AIMS-AMP Capital Industrial REIT,
ASSI,
blog,
IREIT,
money management
Fixed income update. 3.78% p.a. 6 months T-bill. SSB?
Friday, May 12, 2023
The latest 6 months T-bill auction gave us a cut-off yield of 3.78% p.a. which was decent enough.
Some crazy kiasu people put in very low competitive bids which drove down the cut-off yield.
This is evident when we look at what the average yield was.
Why would anyone place a bid of below 3.26% p.a. is beyond my comprehension?
Even if we were to place a 6 months fixed deposit with OCBC using CPF OA money, we would get 3.3% p.a.
This is why I say many people are selfish and this is actually worse because it harms themselves and others at the same time with a lower cut-off yield for everybody being the result.
Simply inane.
I am not doing any shameless promotion for OCBC because it is my largest investment but take a look at their promotional interest rates: HERE.
Anyway, by now, we shouldn't be surprised anymore.
I am just happy that the cut-off yield is still much higher than what DBS, OCBC and UOB would offer for 6 months fixed deposit at this point.
This is because I am just rolling money from maturing T-bills into new ones by now.
Yes, my T-bill ladder is complete and it is another source of meaningful passive income for me.
Is this going to continue?
To be sure, I do not have a crystal ball.
However, for various reasons, inflation is likely to be sticky which means interest rates will probably stay higher for longer.
The front end of the yield curve is still elevated even as the Fed has signaled a pause in rate hikes.
I know there is talk of a Fed pivot by end of the year and it could well happen but worrying about whether it will happen or not does nothing to generate income for me.
I would rather make hay while the sun shines.
Anyway, my expectation is for 6 months T-bills to remain relatively rewarding in the near future, taking into consideration that it is risk free and volatility free just like the CPF.
This helps to grow the base of my pyramid which I mentioned again recently during "Evening with AK and friends."
As for Singapore Savings Bond, like I shared last month in a blog, my mission for the year was already accomplished.
Fortunately, that was the case too as the 10 year average yield has declined significantly in this month's offer.
A much lower 2.81% p.a. 10 year average yield doesn't cut it for me.
Better off just doing voluntary contribution to my CPF account.
Not doing shameless advertising for DBS because it is one of my largest investments but if you have a shorter duration of two years in mind, a 2 year endowment plan offering guaranteed 3.92% p.a. by DBS is a not a bad idea.
I imagine that as doing a top up to my CPF SA which I am not allowed to do anymore.
See:
Update on saving for income.
Reminder to myself.
Why am I doing what I am doing in the fixed income space?
I want to invest in strong businesses to have peace of mind but, even more than that, I want to make sure I have a portfolio which has a stable footing as that really helps to promote peace of mind.
I always say don't do a Chicken Little.
The sky is not falling.
Don't go to extremes and have, say, 90% of our portfolio in T-bills unless we are old retirees nearing the end of our lives.
Of course, I am not saying that my way is how it should be for everybody but this works for me.
We should all have a plan, our own plan.
If AK can do it, so can you!
Recently published:
Why AA REIT?
Related post:
SSB and T-bill in April 2023.
Posted by AK71 at 8:18 AM 8 comments
Labels:
bonds,
money management,
savings
DBS: 43% jump in earnings! Be a millionaire!
Wednesday, May 3, 2023
Posted by AK71 at 8:54 AM 18 comments
Labels:
money,
money management,
tax
Why defensive investing is a good idea for most of us?
Sunday, April 30, 2023
If you have been following my blogs, you would be familiar with my reminder to myself that in the current environment, it is probably not a bad idea to be more defensive as investors.
The heightened geopolitical tensions in many parts of the world, sticky inflation, higher for longer interest rates, slowing economic growth and the prospect of economic recession in major economies make for a troubling brew.
I have also said that as a retiree investor for income, it really makes more sense for me to be more defensive and seek out capital preservation options, reducing beta or volatility in my portfolio.
When interest rates were very low, there were people who would borrow money to invest in real estate investment trusts and thought they were actually investing defensively.
Why?
An idea in defensive investing is to invest in assets which deliver stable earnings and meaningful dividends and real estate investment trusts, for the most part, looked like a good fit.
However, these investors who were borrowing money to invest in real estate investment trusts were not investing defensively.
What they were doing was actually aggressive and would fall in the same class as margin trading and options trading.
If interest rates were to rise rapidly which they did, they could find themselves in a boatload of trouble as the unit prices of real estate investment trusts fell and cost of financing rose.
What they were doing had little difference with borrowing money to invest in Alibaba's common stock.
If the price of the common stock fall below a certain price, the lenders will come knocking which was what happened to some investment "gurus."
I never want to have to deal with such a possibility which is the reason for the word "bread" in "eating crusty bread with ink slowly."
If you are new to my blog and don't understand, I will leave a link to the relevant blog below.
Now, is defensive investing only good for retirees like AK?
I would argue that defensive investing is probably a good idea in varying degrees for people who do not have deep pockets.
For regular folks who still need their earned income, capital preservation should have a place in the overall scheme of things.
For retirees and people who do not have the ability to stomach big financial losses, their investment portfolio should be more defensive than not.
The ability to stomach big financial losses will vary from person to person.
How defensive an investment portfolio should be should have an inverse relationship with the ability to stomach big financial losses, theoretically.
The more able a person is able to take big losses, the less defensive his investment portfolio could be, therefore.
However, I have often seen people who are ill able to take big financial losses adopting very aggressive investing ideas.
I think they should ask themselves if they liked the idea of living next to an active volcano.
Defensive investing is also a good idea for people who are mentally unable to take big financial losses.
Losing sleep because you lost a few thousand dollars in a recent investment?
Well, then, you might want to do more defensive investing.
How do we do defensive investing?
I will not tell anyone what to invest in but I will say this.
As long as we invest with an eye on capital preservation, minimizing the risk of financial losses, we are taking a step towards defensive investing.
Promises of astronomical growth and future returns from businesses which are burning cash do not interest defensive investors.
Thinking of becoming more defensive in your approach to investing now?
If AK can do it, so can you!
Related posts:
1. "Eat crusty bread with ink slowly."
2. Update on saving for income.
3. More in equities or fixed income?
Recently published:
Investing or speculating in properties?
Posted by AK71 at 9:09 AM 6 comments
Labels:
bonds,
debt,
investment,
money management,
REITs
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