Saturday, 31 December 2011

Time of reflection for 2011

2011 is coming to a close, I reviewed at my overall portfolio today and see a sea of red. Against the STI index loss of 17% for the year, on my cash portfolio, I am sitting at a loss of 23%, on my cpf portfolio, I am in the red at 13% for 2011. I am sure some or most of the people are sitting in the loss for 2011 if they had purchased any stock anytime in first half of 2011. Thanks to our very "welfare" and "highly leveraged" friends in Europe and USA, the market went through a bad slide with concerns on Europe debt crisis and USA high unemployment rate. I do not have a forecast of how markets will turn out in 2012, but I believe that we should always continue to be positive and look out for opportunities. In fact during the correction this year, I managed to pick up more stocks and try to average down. With dividends in mind, I continued to load up on more reits. (sounds like I am consoling myself..)

Over the year, I became slightly better in financial knowledge as I read more books and also learnt more over the Internet. I began to be interested in reading financial statements of companies which I am investing in. Income statement, balance sheet and cash flow statement are something that does not interest me one year ago, now, I read them with magnifying glasses. Ironically, this does not help me in making more money this year, but I am pretty sure getting the fundamentals right for companies is very important over the long term.

My foray into having a trading portfolio proved to be a disaster and a wake up call. Having made some money during the recovery from 2009 to 2010, I got stuck in them this year and ended up selling some at a loss. The reason was lack of research, lack of understanding the way market is moving and lack of time. After this , I decided to stick to just holding for long term and stop being a smart ass.

Below is my current portfolio.

StockNet QtyLastUnrealized P/L
CDL HTrust@50001.545-2761.06
Starhill Gbl230000.565-965.8

After some very useful advice from create8888, I did my own budgeting for 2012 and was shocked to see the amount of $$$ needed. The total bill needed to spend came out to more than 42,000SGD. This is a reality check. Having made good commissions over the last years in my day job, I foresee uncertain times during 2012 as everyone is predicting a slowdown. I cannot live the way and pretend to think I will still earn that kind of income for 2012. I realised that I need to buck up in my career and other areas where I can increase my income. I feel very guilty over this year as I had spent unnecessarily buying branded bags, belts and wallets, giving excuses like quality over years of amortisation can justify them. Comparing with my wife, I seemed to be more materialistic, which is bad, I needed to control over "wants" and "needs". For 2012, I will stop buying any branded goods and in fact had put aside only 500$ for clothing budget for 2012. Also, I had stopped to renew any facial package as this is really not a need anymore. Frugal will be my favourite word for 2012. And I am thankful for my wife for she is really setting a good example when it comes to spending and I appreciate the value in that now. :)
Lastly, I see the light to have more cash in bank. Currently, I have not much of liabilities, but my cash is not sufficient. My priority is to save, save and save.

After slacking for the past few years, I am beginning to get fat and lazy, this is bad. I have very good bosses and I have enjoyed alot of freedom in my day job. Getting too much of it, I am starting to feel I lost the fire over the passion of my job, I need to be more hungry, more aggressive and really work harder to show results. With my baby boy being part of my family soon, I need to set a good example, I cannot be seen like a slacker to him right? With the news of reorganisation soon, everything is unpredictable, but I believe if I can show value to my company, there is nothing much to worry. My long term aim is to show more results in my sales job, climb the ladder and get a big fat retrenchment package when I am 55. :)
. Time shall be well spent in 2012 and I will focus on clients who know what they want.

Lastly, 2012 will be the year I will aim to be the better man, better husband and good father.

Happy new year!

Friday, 30 December 2011

Updated Insurance coverage for 2011.

Met up my insurance planner today, purpose was to get my wife more comprehensive insurance coverage.

For this year, I decided to purchase a disability income protection policy, accidental policy and upgraded my hospitalisation and surgery policy. The reason on me doing so is to ensure my wife and my future son will be able to get a sum of payout should anything happen to me (touch wood), or should my earning ability be crippled due to any condition, we will stick get a monthly income. I feel that being a father, it is my responsibility to make sure that their needs are well taken care of and ensure I do not become a burden to them should the unfortunate happens. My overall premiums per year has increase to 1,603$SGD but I am sure this will leave me a peace of mind and allow me to focus on other objectives.

In addition to getting a disability income plan and accidental plan, I took up a limited life policy plan to act as savings and additional protection, and also with this policy, I can reduce the premium on the disability income plan.

I found the service of the GE life planner very professional. She provided me alot of information on the policies I am buying and is very patient with my repeated questions.
Should anybody be keen to have her contact, please feel free to drop me a message.

Over the years, I made silly mistakes like getting a ILP with my CPF OA that does not help me in any way, moreover the funds performance had not been doing very well for a number of years, but this time round, I am sure what I am getting.

Below table is a updated summary of all my insurance policies:

Plan TypeDeath/TPD   $'000 M.I         $'000  Acc      $'000  Disability Income per month  Medicalannual/ lifetime limits  Premium (S$) 
Term $                     46      $       36.00
Trad Life $                     25      $       29.25
ILP Life $                     80  $            150     $     250.00
Trad Life $                     20   $3,750  $     543.00
Acc   $           100    $      152.50
Disability Income   $3,750  $     908.65
Endowment $                     20  $             20     $          111.11
ILP $                      15      $      10,000
Hospital     $500k/   unlimited  $     206.56
Hospital     $200k/$1M  $     287.25
  $                  206  $            170  $           100  $           7,500  As above  $  6,818.28

Saturday, 24 December 2011

Mistakes on my route to achieving positive personal finance

This year, I bought a total of 5 books, mainly financial knowledge books that teaches you on personal finance and investment. The books are Rich Dad Poor Dad, Guide to Investing by Robert T. Kiyosaki, Mastering your personal finance by Dennis Ng, Secrets of Self-Made Millionairs by Adam Khoo and Make your money work for you by Keon Chee & Ben Fok.
Reading those books inspires and motivates me, at the same time, it makes me reflects on the mistakes I had been making throughout my time to while I am trying to improve my personal finance skills and investments portfolio.

First Mistake:
Saving too little. Since 2007 when I started investing in stock markets. I had never keep any spare cash in my bank. For me, every bonuses, commissions or extra money, I will invest them into the markets. It never occurred to me to keep spare cash for emergency purposes, medical , insurance purposes or just in case needs. The recommended advice is to keep 3-6 months of your monthly income to cover ad-hoc needs. This cash will be also useful to cover expenses should one gets laid off. Or also, this money is also useful when stock markets go through correction. Or some people refer to this money as opportunity funds.
Part of the reason for me keeping all cash in stock was partly to stay in market to enjoy the dividends, also I was too over confident of the market situation. I was perhaps too positive over the market where I believe I could easily cash out from stock market should I need emergency cash.
Unfortunately or should I say fortunately, an incident occurred to me back in July where I needed to use cash to make payment, having to realised the lack of or limited cash inside your bank account, I had to sell off some of my CDLH trust shares to get cash, ironically, the gains I made from the dividends were wiped out the very moment I cash out but luckily, my paper losses were limited to single digit percentage.  But my total losses mounted up to 1KSGD. It was a painful lesson.
This lesson and from repeated readings of the financial books made me wake up. I decided to instill force savings and keep spare cash. I force to pay myself 600SGD into another separate bank account start of every Monthly, all investment income goes into the bank account too as well as all part time property income.
Currently I am now at only 2 months savings. But with part time property income coming in soon, I should be at 3.5 months savings.
With my baby boy delivering in Jan 2012, I will need to use up a substantial amount for baby hospitalisation expenses, confinement expenses as well as others.
It will be a journey back to achieving my target of 4 months of safety spare cash. But with the many corrections in the stock market, having spare cash is also useful to pick up bargain stocks.

Mistake # 2
Not reinvesting dividend back into market. I had not been practising the slow way to wealth by power of compounding. I realised that the reason was I was spending my dividends away on expenses. It is a hard reality that I need to cut down on my own spending. With the burden to give both parents allowances, the need to support my pregnant wife and to clear my bills, I need to cut down on spending and save more. Moreover, I should not touch my dividends.
I look back at myself for challenging friends on the need to buy expensive continental cars when they had not even started their financial goals, maybe I need to reflect on myself first before I can give my opinions to them ..
Moving on, I had reinvested my Q3 Suntec reit dividend by buying 1 lot of Suntec share at 1.075SGD. I might not know if there will be any major correction next year, but one thing I will need to follow is to use the way of compounding to maximise my gains over the coming years.
Happy compounding.

Sunday, 18 December 2011

2012 Targets

It is the time of the year to relook a at your own achievements for the past one year and set new targets for 2012.
2011 was a quiet period in terms of active investment as I did not do much short term trading. I had spent alot of time reading on books, attending seminars and reading on blogs. I am really amazed on the quality of financial bloggers we have here in Singapore and kudos to them for a job well done.

Achievements for 2011.
My total passive income (cash) from stocks (reits) is 4600SGD for 2011. It is still far away from being able to stop working actively with this income, but then again, it had come in handy for me when it came to expenses.
I had started my own blog on finance/investment.
I started to track and monitor all expenses.
I started to save 600$ monthly by paying myself first.

I have set below targets/goals to be achieve in 2012 and will look forward to fulfilling and exceeding them.

1. Achieve annual passive income of 6000SGD
2. Reinvest all divendends back into stock market
3. Minimize expenditures for "wants"
4. Buy a new HDB flat/property
5. Be a good father

Also, I had set aside my long term mission statement:

1. Pay up loan for first property in 10 years.
2. Get additional property for rental income

2012 is going to be a exciting year as I will embrace fatherhood. I plan to blog on the expenses incurred for a baby and offer some value added solutions on how to minimize cost.
Merry Xmas!!

Monday, 14 November 2011

Girlfriends = Liability, Good Wife = Financial Freedom, Bad Wife = bye bye $

This is a topic which co-relates to financial freedom, at least that is what I thought so. Many would had thought saving, investing , passive incomes and slogging all your life will make you RICH, but little do they know that marrying the wrong person and staying single too long can make you BROKE!

Imagine yourself being single, young and with earning power. But with the unrealistic expectations and high demands of a life partner, you keep looking for potential soulmates. It is to my assumption that the average guy will have at least 2-3 girlfriends before they settle down, some of them, might even have more than 10. Which I would not be surprised at all.

Dating takes, time,effort and MONEY, whoever thinks that true love can be found without money, they are still living in the stone ages. In Singapore materialistic society, woman prefers their man to have high earning power. So it is important to know what you want before you go into a relationship.
But if a choosy person keeps looking for the perfect woman, he will tend to change many girlfriends. It also pays if the person is not looking for commitment.

When a guy gets attached to a girl and they have a steady relationship for 2 years. But later, they realised that they are not meant for each other, and thus decide to move on. This could easily cost the guy a few grand! And not taking the fact that time is wasted! I have seen friends who buy diamond rings, spend heavy on gifts, holidays and food. The cost usually gets higher during the initial courtship. Just think about it, if the guy goes through 3 more of such failed relationship, the cost becomes a liablity.

Knowing how your partner view money is essential. If your partner can spend money easily on materialistic products, it is a sign of red alert. My advise is when you meet somebody that wants branded bags very often, diamonds and other demands, you better be prepared to break your wallet or if you can , run!

The worst kind of relationship is when the guy gets involved with money minded woman. I have seen married guy that needs to send money monthly to his wife family overseas! (not to mention the country).

It is painful to get married with the wrong woman, in Singapore law, the odds are always against the men when it comes to divorce compensations. People had lost their homes, savings and time. This cost easily mounts to 500KSGD.

Only when you are ready, you should start looking. But if you decide to make your time worth by finding and being with the right woman at the right time, settling down with her will ensure financial stability and financial freedom eventually.

Sunday, 30 October 2011

Q3 updates

I have been trying to accumlate shares during this volatile period and I am glad that I did not go back into the temptation of trading even though it is the best period to do so.
I just heard from my friend he lost money by trading genting and noble shares recently, I advised him to hold if he can trade short term, if not, the risks are not worth it.
As I will be starting a family soon, I decide to invest through the boring and effective way through compounding.
Below are the updates from two of my major holdings and its dividend time again!:

Suntec Reit
NAV: 1.786
Cashflow: 66,299 (millions)
P/E: 9.65
EPS: 2.799
Gearing: 38.5%
Interest coverage ration: 4.0
Property yield: 0.689%

Starhill Reit
Cashflow: 100,432
P/E: 7.79
EPS: -0.14
Gearing: 30.1%
Interest coverage ration: 4.1
Property yield: 1.28%

It is dividend time again, I will plan to invest those dividends back into the shares :)

Thursday, 13 October 2011

38 year old colleague of mine.

I had a email conversation with a colleague of mine today, he is currently based overseas and is fours years my senior (38 years).
What struck me most was his dreadful financial situation now and the fact he is married and will be having a child soon. His wife is currently not working.
He is currently living in a rented apartment, has no savings after paying his bills and is still paying off his credit card interests/bills.
After analysis from our conversation, I came to understand how he ended up this way;
1. Lack of Saving
2. No control of Spending ( Spend money emotionally )
3. No investment
4. No financial knowledge
5. Did not pay his credit card bills in full
6. Job hopper
7. No aim to earn more money

Above points are a reality and he has to start to save to get his finances in-order.
The only positive point was that he had managed to spent on hospitalization insurance and this had helped him to offset alot of hospital bills when he had a health situation recently.
I had asked him to purchase a property instead using a bank loan and he is currently talking to his bankers.
He has to start to save now inorder to get things started.
It might not be easy, but he has to start somewhere...