Recent thoughts and goals

I have been reflecting lately on the different goals I have set out a few years ago after receiving a sudden awakening on financial independence back in 2017. Here are some updates, thoughts and future targets.

Initial Goals

I remember vividly the first few dividends income received which was in single or double digits and compared to what the online OG financial bloggers whom were willing to share their updates on their journey, what was ideal seemed so far. But having trudged on (at a very slow pace), whatever small targets I set internally has been achieved. The taste of victory is definitely sweet in this aspect.

Total portfolio value has crossed the target of $350k, dividends income above $20k while still being able to experience the things I consider as LIFE (ie, new countries, hiking journeys, tea, delicious food). I have to say, with the FI mindset, these are all done with cost-consciousness in mind, to prepare for the day where RE comes in and costs must be controlled.

This is the year I am intending to purchase a house and I am thankful that while portfolio value can still be maintained (barring any catastrophic collapse of the financial markets), I am able to set aside a sizable amount for initial cash outlay for the house. 

Sudden Inspiration on Lofty Goals

As someone whom enjoys a passive approach to investing, there is always this internal struggle to chase after capital and dividend growth concurrently. At this stage, dividend beats growth in my mental model when it comes to evaluating how well I have done, as it acts like a passive income that provides steady cashflow to reduce anxiety for the daily necessities life. 

Hence, this is a lofty goal.

By 2030,

- Portfolio value = $1 million

- Dividends = $50k

Recent Thoughts

I will be the first to admit I am usually more pessimistic on the future outlook and hence a financial buffer is a non-negotiable. Though there has been recent laughs with my colleagues whom are asking why I am not willing to take cab rides, subscribe to more subscription plans, buy more things, stay in expensive hotels, etc (in short, to spend more as it seems like an insignificant amount compared my income). Internally, I am always fearful of being made redundant at work and struggling thereafter to get back a similar comfortable income.

Still, it is clear, I will prioritize being prudent above splurging just because I can afford it. I look forward to the days where I can take public transport during non-working hours to visit the various local coffee shops that are famous for a particular dish. 

And with the Lofty Goals, it seems scary, just like how I felt a few years back when I had to envision how 2025 will look like. But as the saying goes, it is better to reach for the stars while and fall on the skies than not setting any at all. 

A new goal is welcome at this stage as I felt I have been stagnant in making financial targets (after hitting them last year). The only constant thing that is always on my mind is how to add more to dividend stocks. It has to be balanced with portfolio value moving forward.

It will be another surprise in life and growth stage, as now I will have to think of how to monetize my house, other side businesses?

We shall see. 

Cheers to all reading this blog and hope you are all reaching your own targets.

New Kopi Target

 With lower trading cost for both SG and US market, here is a new target. 

2024: Trading P/L = 30% of vacation expenses

Mid 2024 Update

Note taking productivity

Used to have Evernote (and I really loved the platform and features it provided for free, until the changes in policy for non-paid users). Being a self-proclaimed minimalist, I avoid subscriptions as much as possible. With that, I tried other options (Notion, Dropbox Paper, WPS document) but it was short lived.

Recently, I found another one called Obsidian. It is FREE, albeit having to store the notes on the local machine instead of on a cloud. But the cool thing is since the written notes are stored in Markdown format, it has 3 advantages. Firstly, helps me to train in using it. Secondly, it can be ported onto an online repository/folder and we are still able to launch the vault to read from those platform. Thirdly, there are many helpful plugins to elevate the experience for something that is free to make it feel premium.

Book reading

I have been very ill disciplined in reading books. But one recently stood out. Sooley, by John Grisham. It's a story about a South Sudan boy's journey into America with dreams to play in the NBA. I have always been amazed by how the author uses simple words and still captivates the reader. It brought back memories when I read A Painted House (another excellent book) as well.

Trading

Brokerage cost optimization. Use,

Vickers 

• For long term stock purchase to be stored in CDP. Approximately $14

FSMOne 

• For selling from CDP (hardly use it). Approximately $13

Moomoo

• For short term trading. Approximately $5-8 in total

IBKR

• For US market

With Moomoo, I have recently done a short trade and happy with the profit (with minimal effort) and am looking to utilize this method to earn some kopi money.

2023 Update

Time flies, and the last update here was a year ago. 

Dividends

Managed to hit the 5 figure amount for current YTD dividends received and projected to average hit $1k each month. 

It is worrying that there are uncertainties at the global scale that has sent recent share prices plunging. It is important to apply the long term view instead of activating the instant panic mood and hopefully better days will come back soon.

New aim: $1.5k each month (which is very close to the next target - $20k). Let's see when it can happen, given there will likely be a drop in dividends next year as interest rates stay high and eats into company's profits.

New Financial Habit

Will be topping up CPF for the first time this year end to reduce tax as it has reached a stage whereby the amount is getting bothersome. 

New Market

Started venturing into US market in 2nd half of this year after being enticed by the decent run up of the market on a whole. Thesis for this is that these giants will still be around in the next foreseeable decade with no let up on their market dominance. 

Memorable Experience YTD

Stepped into Chiang Mai and instantly loved the vibe of the place. It was so good that I made the trip two times there in a short span of 5 months. It is a peaceful and lovely city with lots of nature that slows time down.

Goals Achieved

1. Yolo-ed and booked a trip next year to UK. Well within the goal set by year 2025

2. 12k dividends this year instead of by 2025

Hope everyone out there has a good last 2 months for year 2023!

2022 Update

Dividends Update

The year has flashed past so quickly and soon we will enter the last quarter of the year.

On financial goals matter, I have restarted my initial dividend play to increase the passive income. It is certainly enticing to see the amount grow. An encouraging note is that the projected total amount for 2022 will cross the 6k mark, which translates into an average of 500 per month. A mini milestone to cross!

This amount is far off the goal set a couple of years back in the 'Goals by end of 2022' (10k). There is still a good 4 months. Most likely, I will miss this goal, but on the bright side I am making stock purchases and expanding the portfolio with the goal in mind to cross the 12k mark by end of next year. 

Fingers crossed, I will hit it within the next 6 months depending on the market conditions!

Current thoughts

Once the 1k per month goal is achieved (depending on how soon it is,) I have every intention to start saving up for a house purchase when I reach my mid 30s.

It will be a bonus to be able to increase the dividends payout amount (depending on how much buffer I have in saving that capital)

Assumptions

Cost of house: 500k

Down payment: 15% which is equal to 75k

Targeted amount to save for purchase: 50k cash (with remaining from CPF to settle the peripheral fees)

Any extra cash beyond this will be channeled into increasing the dividends!

Final closing

Unless there is a special bull run towards the end of the year such that the investment portfolio value goes up, there is every chance I will not hit the 300k mark. A huge part of this reason is that I have been making the effort to prioritize experiences in life ever since the covid restrictions started to loosen up.

At this stage, I am certainly enjoying this liberal lifestyle and certainly have had more adventures! It will likely not stop, especially with visiting the surrounding countries around.

So for budgeting next year, I will make adjustments for the overall final amount targeted for end of the year.

Tempting

Private or HDB?

Recently the idea of purchasing a private property came across my mind. Took the chance to read up and understand the various considerations and websites available to view house prices. 

It is really tempting to pay for the down payment and begin to think I could enjoy the facilities (pool, gym, balcony). Over time, I weighed the pros and cons of the decision and it is slightly tilted to the side of going for a HDB with the aim of keeping costs and loan premiums low. 

It is daunting (at least to me) to have to take up a loan and be stuck with it for the next 20-30 years, with so much uncertainty on what lies ahead even in 3-5 years time. I guess the mind has not been conditioned to think of accepting debt as I have been building up a sizable saving (not alot, but important thing is I am making progress to build a safety buffer for any mishaps).

Therefore, a HDB is less risky and in terms of valuation, it is way more attractive per square feet. 

Will there be a regret as I continue to wait until the right age to finally purchase the home at a more expensive price in the future?

On Finances Goal by end of 2022

I have been tracking and setting up a goal offline on the total net worth (cash + investment portfolio). There is a high chance of hitting the 300K mark and I have set it as a goal.

It is another milestone and something I could not even fathom since the beginnings this journey of personal finance and reading up all the finance blogs with bloggers having 6-7 figure portfolios. 

Fingers crossed on being able to increase the take home pay as my experience grows to build a bigger retirement nest egg :)

Hope everyone out there will have a smooth journey in the remaining months as well!

Reversal of fortunes

7th October 2021. 

It is official. 

Newcastle united has finally changed owners and exciting times lie ahead :)

Updates in life

The transition into a role as a worker with experience is something new. No more are we allowed to have the luxury of asking many questions that might appear as if we lack knowledge, but we are now judged on being able to give accurate answers to the queries posed to us as subject matter experts. The burden gets heavier as the solutions that we have to come up with needs to have that extra longevity (ie, it is not just about solving the issue at this instant moment, but effort has to be catered to think how the impact will be in 5 years time, 10 years time, etc).

It is exciting yet burdensome at the same time. Exciting because it is a new phase of growth, burdensome because of the fear that always lingers.. 'what if I screw this up?' I guess it is a by-product of our education system, whereby we are thought to give perfect 10 year series answers. Any deviation or slight mistakes will make one feel so inadequate as a person.

Part of my jobscope now entails making presentations to the seniors/manager who will critic/give opinions on the solution design. I have been spending a considerable amount of time thinking about how to make the presentation effective, so that the stakeholders can understand it and hopefully agree on it in the short amount of time we have.

Lots of effort are needed to simplify the design as well as think and justify the reason for having that development in place.

It has been a stretch. 

On finances

Crossed the milestone set for year 2022 in terms of savings. A small step :)

Twist

A new learning point. 

People come and go, colleagues change, bosses change, company direction change, so we must always embrace it.

Had a great working relationship with a few colleagues, people whom I know are the real ones working and also did a good job too. Responsible and capable. 

Being a newbie in the company, I had the chance to work with them. We formed a pretty good camaraderie. But sadly, they left. 

New management comes in, the ones who have a reputation of being incapable, but very good at selling themselves, cajoles up to them. 

These people get the opportunity to work again, until the management learns about their true form, and by then it will be too late. They will just leave and say that the situation is hopeless, while the incapable ones get another chance to dupe the new incoming boss. 

The whole cycle repeats. 

This was so different from school. We could have all kind of destructive behaviour, skip class, talk back, disobey, skive. But at the end of the day, everyone was judged by the results. Nothing else mattered. Being the class president but having lousy results is as good as failing. The grades on the final report card made all the talking about who had the ability to go further in learning.

But, the working world is a complete opposite. As long as one develops decent PR skills, their quality of work output does not matter. 

Onto FI I charge, so that I can keep these idiots out of my life for good.

2019 Annual Reflection

Three Questions

1. What went well this year?

2. What didn't go so well this year?

3. What am I working towards?

1. What Went Well This Year? 

Work Experience. Had the opportunity to work for a short stint in Philippines for a project. Well, perhaps the overall experience wasn't that ideal, given how the perception towards getting  things done is a little different there. It is way more lax than in SG and this is something I have started learning, and hopefully will not get addicted to this feel! 

With this, I grew my skillsets, and seriously, this is getting more fun. There is a drive to learn more and increase my knowledge. 

In the grand scheme of things, with regards to the question of our existence on earth, I guess there is just an innate curiosity since young to understand things and for that reason I studied engineering in university. Give us any issue, and we will figure a way to solve it and make it work, and understand what is happening. Something I learnt discovered more about myself this year, which will add to my identity and help me navigate through the working world in the years to come. 

Books. Read almost the same amount of books as last year, and this is an area that still excites me. There are way too many books that have broaden my understanding of this world. Since I have recently read through some books on N.Korea, I guess I would conclude that it is one of those books that really impacted me this year. The country used to be something of an enigma, yes, we hear of it being a totalitarian state and joke about the ridiculous advertisements the internal media releases to enhance the supreme leader's position in the eyes of the citizens.

Yet, as I read through the real stories, there was indeed a heavy heart whereby the people suffered so much and yet the state literally ignored them and continued to feed them lies while they still led lavish lives. It is simply EVIL. There was wide spread hunger in the 1990s after their communist allies (Russia and China) decided to open up their economies and move towards a more capitalistic system. As a result, they did not want to supply goods at a lost to N.Korea, and this resulted in a lack of food. What did the regime come up with to solve this issue? They simply came up with a campaign to get the people to eat meals twice a day instead of thrice, and even stating that their 'God' is with them in this aspect. WOW, and just for the record, during that period, food was still almost entirely cut off and people had to resort to eating grass and rats, etc. Hopefully, in this lifetime, we might see a revolution so that the oppressed and defenceless can move on to have better lives. There is an argument that the current young generation grew up in the period where they saw their parents suffered, hence any of their memories are all of dark times. Also, there is increasingly more external media that is passed into the country due to the 'Dark Market' system that the citizens had to come up with as the regime failed to provide for their basic needs. With their knowledge of the real world, there could be more dissent and there might just be a change. We await eagerly with anticipation. 

Another quick shoutout to 'Talking to Strangers' by Malcom Gladwell. It argues that we as humans tend to default to truth, which means we believe at face value what the other party states, as well as always failing to see the context of why the words were spoken at that time.

Last shoutout is for 'Everything is F*cked'. The author argues that for the longest time in history, Religion reigned supreme because there simply was no alternatives. In the late 1900s, Science started to gain traction, and we could explain with certainty why things worked the way they worked. And with that, there is a shift in how more and more people are moving away from religion at this current age. Not saying which is right or wrong, just an interesting observation on the trend of human beings over the years. 

Tea. This year was the year I officially started buying tea leaves and preparing them on my own. The catalyst for this was when I saw the locals in China preparing tea this way, instead of using powder, which we are more used to in SG. My current favourite is the Feng Huang Dan Cong series, in particular Ba Xian. This tea has a smooth and nice floral fragrance balance with a subtle malty taste. It is an uplifting tea, so much so that I make it a point to end the day with tea. Of course, with this there is also a series of arguments on why tea is good for health. I have made it a point to visit tea mountains, in particular Wuyi Mountain (Famous for Da Hong Pao, Rou Gui) and Phoenix Mountain (Famous for Feng Huang Dan Cong). Both are in Guangdong Region, which is also known as 'Nan Fang' (Southern area), where most of our ancestors in South East Asia came from. I guess we are slowly returning to our roots?

The only bad side to this is that in the pursuit of this new hobby, I have spent quite frivolously to experience new tastes. Hopefully, it will die down over the years, as I learn to settle on a few select tea that makes me happy.  

Finance. As I step into the new year, one exciting thing to share is that I have managed to half the amount for fixed costs for HP & Internet bills. Thanks to the price war by the various incumbents in the Telco scene, we consumers have benefited. I am on the ZeroOne mobile plan and pay $8 per month for 3GB of 4G speed data, and the remaining at 128kbps. This means that there is NEVER a time where I will 'overshoot' on my data usage, with the only downside being that the 128kbps speed is decent enough for the user to receive SMS, Email, etc. But at times, it will be a struggle to reply. It is ok, since my last usage is also around 3GB per month. I make it a point to discipline myself not to be addicted to data usage and cut down on social media. So without the data, I typically use my phone to read ebooks and lookup simple stuff on the internet. The icing on the cake is that this line can be used both in Msia and SG, which means I do not need to pay extra when I cross over to JB! Even more savings and convenience :)

I have also hit my portfolio goals I set out this year. The market has been good to us so far, as there is a short run up in portfolio value to wards the end of the year. But the flip side is that opportunities to add will be rare. I look forward to deploying more in funds in uncertain times. 

2. What Didn't Go Well This Year? 

People. Well, this is more of coming across people at workplace, with attitudes I detest. I guess I will be meeting more of such people in the coming years. Must learn to detect such bullshit people, who only care about playing politics. I know I will not be affected by such people, given how I will fight back. But still, they are 'eating' and 'exploiting' people who do not dare to voice out and claim all the credit themselves. I want less of such people in my life. 

On a side note, had an interview recently on an opportunity. I am not desperate to leave, just that my CV was passed to the person who was looking to add people with experience in their project. Towards the end, the interviewer asked if I had any question to ask. I did not state much. I am not sure if this will affect my chances, given how I am not the kind who likes to exaggerate things. I like to think of myself as a stable contributor, someone whom you will only know well once you work with me. I do not train myself to come up with ways to impress the boss right from the start. So such people, usually tend to not get noticed, as those with bigger mouths will shout right from the start. The only bright side which will give me a chance is that a feedback from the person whom my CV was passed to was that he liked my character. It is a shock to me too, as I only worked very briefly with him (probably about 1-2 months), and given he was always busy with other things, our interaction was minimal. I was a junior then and someone of no importance, yet he could remember me. 

I guess the phrase goes 好人有好抱 is true if this chance comes through even though I was unsure of how I fared in the interview. 

3. What Am I Working Towards? 

Work experience. Again, another overseas stint. And if I were to continue staying in the current company, I might start to move company to fight for a higher pay after one more project to solidify my knowledge. 

New Trips. Will make it a point to travel next year, though still havent think of any. The best would be the opportunity to travel because of a work trip. I guess I tired out towards the end of this year and would want a quiet end to the year. While people would be busy going for trips this period, I am happy to stay in SG to sit back and relax. Work trips this year contributed to the fatigue, especially when I had to sit on airplanes that were not SQ. They are generally more uncomfortable.

There is a high chance Ipoh and KL would be on the list next year. Ipoh for their mountains and KL has a particular tea shop that I bought online from. When you have tasted fine tea, it is hard to go back to below average stuff. Haha

Portfolio Goals. This will forever be the main topic of my postings on the blog. I have set new goals, and basically shifted the goal upwards for next year. This means that amount will be a challenge, and if things are not working out for the first half of the year, I will be more aggressive to hit my goals in the second half. End next year with dividends of $500/month.

Hope readers would have a great end to the year, and also that you have hit your intended goals this year!

Merry Christmas and Happy New Year!

What stories do we tell ourselves?

So I'm on to the next book in my sudden thirst for stories related to the N.Korea regime (such sadistic inhumane practices I would say).

It is titled 'In Order To Live - A North Korean Girl's Journey to Freedom', which you can find in most bookstores among their bestsellers list. I came across a quote, that disrupted my train of thought for the past couple of days, as it lingered on my mind and started to do some soul searching.

“We tell ourselves stories in order to live.”
- Joan Didion

It can be interpreted in many ways, however, I would like to focus on the aspect of stories or excuses we tell ourselves whenever we face obstacles. We shall concentrate on the world of Finance, since it is something that is very close to my heart.

When the topic of investing comes to our mind, we tend to come up with stories that say (and by stories I mean that there are much more content than just the one written here, I like to keep things simple, but we know that behind every conclusion/sentence is actually a series of thoughts that led to it)
- 'It is too risky'
- 'It is too difficult'
- 'So and so lost alot, I better not touch it in case...'
- 'So and so did trading and made alot of money overnight, it seems so easy, I will try too'

There are countless stories that we entertain ourselves with when the topic is mentioned. The question is
- Are we aware of these inhibiting thoughts? Or reckless thoughts that we will subsequently use to justify the risky practices? Like leveraging, etc

Our world is made comfortable by us coming up with stories to feed our brain on the decision we made. But many a times, we might fail to see the topic from another person's perspective. It will be great if we can strive to see and sieve out the thoughts of successful people in that field.

Just a quick word on the part of trading and making lots of money. I had a former colleague who mentioned that his uni schoolmate, who received a scholarship, and hence a relatively large sum of money, threw it into crypto. Made money at first, but eventually lost it all back and even that sum of money. All these happened in less than a year I reckoned. I am amazed at people who can lose such a large amount (in my opinion, as every cent counts).

So reminder of the day is that we must always be aware of the stories we tell ourselves in order to justify that decision made so that we can 'close the chapter' and continue to live. It is not just enough to be aware of it but also find ways to see if it needs any refinement. It can be applied to any area of thought.

This quote will forever remain one of my favourite and something that I will constantly ponder on from time to time. Such is its impact.

Is Saving 100k Really That Important?

While on the path FI, many would definitely stumble onto the quote by Warren Buffett that saving the first 100k is the most difficult. Is it true? Is 100k really a big deal? Many would argue that it is almost impossible to do so, and continue living the kind of life whereby they still choose to live in the moment. I want to point out here that I too live in the moment and not all people who are on the path to FI live the hermit kind of life and scrimp on every single life experience.

I shall do a reverse engineering on my path towards this first 100k, and the events that happened along the way.

How it started

I came out from University, clueless of what the working world had to offer. And like many impressionable young adults, was swayed by the seemingly easy money that one was promised in the insurance line. The managers whom tried to lure me in enticed me by describing how they were bringing in a high income each month and that it was easy for me to do so too. So I naively joined. And what a lesson that decision turned out to be. 

Having no concept of  proper finance, I was plunged into the world of Savings plan, ILP, Whole Life Plan, Term and countless other products. We were all thought to think that savings plans were the greatest products there was on earth. Being curious, I went to read up on ILP and found out from many online reviews that it was not a good product, and so I was hesitant to sell it. But my managers always told me it is a great product and bla bla bla. Over the months I delved deeper into the technical aspects of the contract, by reading the entire product feature and contract on my own (I can bet you majority of the insurance agents out there do not even do such a thing, they just depend on sales tactic of either overturning your doubts about the plan, or distracting you with some other story.). I found out about the high charges as compared to other plans and still many high flying agents were so proud of recommending the product, at the end of the day. It was just for their own pocket.

Lesson 1: Majority of the agents only care about the commission they make off you, so if you find one that really puts your needs and interest above the money they could earn, congrats.

More Discoveries

I kept thinking of the question, 'What exactly is insurance?' and at the end of the day, read up and finally concluded that the origins of Insurance was based on a simple exchange. The risk of a huge financial catastrophe was handed over to the insurer by the concept of risk pooling. And that led me to the second realization, that Term plans were the most cost effective in doing so. But the insurance industry, driven by the need to for ever increasing profits, came up with multiple financial products that were driven by money but deceitfully wrapped on the outside by the concept of Protection (think ILPs, Whole life plan, Savings plan). What is worse than a lie? A half-truth. It still contains the essence of a lie. Let that sink in for a moment.

Lesson 2: Term plans are the most cost effective plans, and the most original and pure form of Insurance coverage 

Final Straw

My concept of Financial Planning was slowing evolving, and as I looked at those successful ones around me, I realized they were mainly selling for their own selfish reasons rather than putting the customer at first. One last major lesson was when I was sitting in a class that was teaching about the investment products the company had to offer, I asked the trainer on how one does portfolio re-balancing. It fueled in me the desire to find out more and that was where I stumbled onto bloggers who were so ever willing to share their knowledge and their thoughts, FOR FREE.. I learned about ETFs being one of the safer products to start in our journey of the real investment world. After learning about it's low cost, I brought this question to one of the top producers, whom in my opinion, stood out from majority because he was always able to convince people to purchase insurance from a technical point of view. Running through every single sentence of the contract, down to actuarial calculation for the product. I had so much respect for him, until the following exchange took place.

Magpie: So senior, I read that ETFs have way lower costs than our company's investment funds (and when I mean low, here is the comparison STI ETF: 0.3%, Company Funds: typically 1.5%, with some reaching 3-5%). Isn't it a good product? Shouldn't we be recommending it to our clients so that they can save more? 

Senior: (Obviously haven't really read up on ETF, since he was making so much money in recommending expensive funds to his clients). Oh wow, ETFs seem good, but so are the Company's funds. I will recommend the client to buy both, but that is only if they ask. 

I was aghast by that reply. Clearly he was just interested in money. 

Lesson 3: I will never let such a person manage my finance. And if I were to do financial planning, it will only be to purchase a Hospitalization plan, a Term plan and I rather put my money into ETFs than into a savings plan 

**Another insight I gained from this industry. They call themselves financial planners/consultant but clearly something is wrong with their planning. Many of the top producers are trapped by their own purchasing of insurance products, since the company gives them incentives from time to time. But in the process, they become slaves to their own purchases. Many need to find ways to finance their insurance premiums that ran up to a few thousand dollars each month. That alone adds another layer of complexity into how they approach potential clients. It's like a drug addition, over time the most hardcore drug addicts ignore any form of dignity they once had in life just to fulfill their own needs.

Career Re-set

With those encounters shaping my worldview on financial planning, I left the industry. And at that moment, I recall I only had about $10k in the bank. It was also at this time that I learned about high yield accounts, etc. The feeling I had than was so clear, these bloggers who have accumulated $100k, $200k, a couple of million, while it was impossible to me. Even $50k seemed so far. I dream that I can one day have that kind of money, but it will likely never happen to me. The stories I read, were so distant. When I moved on to the next job and started having a fixed income, it was when I had my first high yield account, Maybank Saveup. At that moment, it seemed like the best to me, almost 3% p.a upon fulfilling 3 criteria. And that was when I had my first experience of seeing $20/$30 in interest each month, as compared to the paltry $0.50 that I was used to when my money was in POSB. I was hooked. It turned out to be so easy and such a huge difference it made to my day, that there was joy in seeing this money come in each month. That was when I also started learning about Cashback cards, and wow, 3% savings here and there on each transaction really added up over time. 

Lesson 4: High yield accounts + Cash back really gives you a good feeling each month. And it is 'Free' with minimal effort once it is set up

First Foray

It was also around this time that I began taking baby steps into investing, with finally taking the decision to start on POSB-invest saver. As I read up more, I found out that I was quite hesitant to put money into investments, given how people always said it was risky. I also read plenty on why people deployed Dollar Cost Averaging(DCA) into their investment planning, and it was so that emotions could be removed. I finally took the courage to start this, and I was glad I did it. This monthly plan removed the emotions I had, and at that time, I was comfortable with investing $100 into it. I thought of how this $100 seem like a big deal of money, but to many others, it was a comparably insignificant sum. Everyone has different perceptions, and I tried to see it from other people's perspective, on how they invested thousands of dollars into their business with no guarantees on whether they will earn it back. I took this bold step into another world. 

I soon found myself reading more about what this STI ETF was, what it consisted of, and what were the pros and cons of it. It was my first foray into understanding financial metrics that in the past, seemed unimaginable to pick up, PE ratio, Div Yield, ROE, ROI, etc. And finally came the season where dividends came in. It was so small and insignificant, I remember it being around $7. But still I thought, wow, this does not feel difficult, and my money is still sitting there. If I increase the capital, the incoming dividend will be more. Wow. This led me to reading up more on dividends, and I discovered this wonderful website called dividends.sg. It was something that I looked into quite religiously over that period, and it convinced me that dividend payout was almost guaranteed every year(of course, please do your homework as nothing is guaranteed in life), with companies having different payout dates. It solidified the idea that Dividend investing is here to stay, and I was tilting more towards this investment angle, other than trading as another way to increase money. 

Lesson 5: Start with ETF, and you need to make the plunge to give it a try. It will be the start of a whole new journey. Because you own it now, it creates a psychological need to understand what is it you own and protect it. And Dividends are the icing on the cake on this journey

Another Game-Changer

It was also around this time that I started tracking every single costs I had. I started by logging them on the iphone notepad, and going home to update an excel sheet. But it soon became a chore, and I switched over to google sheets instead, constantly improving on the template I used to update my expenses. Till this day, I would say that creating your own tracking sheet beats any app there is out there, since everyone has their way of recording and categorizing their expenses. It is very important to be using something you are comfortable with, and this made such a huge difference. I remember using a couple of apps that people recommended online, but it hardly moved past the initial excitement phase I had in the first couple of weeks of using the app. 

From tracking it on a notepad to developing a tracking sheet each month, I finally enhanced it to have an overall goal each year on what my target would be. The final product.

I set out the goal I want to achieve, the negotiable and non-negotiable targets, and every month, log into every account that contains money, and jot it down into this excel. It sure feels good seeing the goals reached, but more than that, it made me aware of how much my networth was growing, and inspired me to find ways to increase it to reach my goals. I celebrated when I hit my goals, it certainly helps. 

Lesson 6: Setting goals may sound so stupid, especially since we were forced to do it every year in school for our grades. But it makes such a huge difference when it is something you have interest in. TRY IT

Making Optimal Decisions

As a result of the above few learning points, and especially Lesson 6, I learned how to optimize my spending decisions and habits. Here are just a few

- Using Shopback instead of paying to the merchant directly

- Using Youtrip instead of paying via CC when overseas

- Never paying late fees for any bills

- Choosing to pay insurance premiums in annual mode instead of monthly

- Using Singsaver/Go Bear to sign up for Credit Cards on promotion and getting vouchers (almost effortless too)

- Learning that annual CC fees can be waived upon request

- Choosing the right broker for my stock purchase

All these small little decisions compound, and collectively they do add up to a tidy sum of money saved up. Life still goes on, celebrations take place. I do not scrimp on every single thing, but through the above platforms, I know I am getting just a tiny bit of return. It brings a smile on my face. 

Lesson 7: Your mindset and habits changes through this journey, and you learn to make better financial decisions that sets you up for the next half of your life

Conclusion

Looking back, is this 100k really important? You decide for yourself. To me, my financial worldview has been re-shaped for the better. 

It is not about the absolute figure, but the process of change that took place internally.

I thought back to when I only had 10k at the start, but now, if the 100k is fully deployed with a dividend yield of 5%, I just need 2 years, without any effort other than the initial effort of placing it into the right stocks. And my 10k doubles. It seems like it is getting easier. Don't you like that thought too?

Financial Goals Moving Forward

Hi, to whoever out there came across this profile. Hope it relates to you in small little ways on this journey to Financial Independence. There will be a few big updates to my goals, as well as a little more about my profile that led to the decisions.

1. Update on my Milestone

Seeing the following chart really brings a smile to my face.

Bought financial companies, given how SG has a reputation as the Switzerland of the East, with the banks constantly reaching out to the growing SEA region as well as India/China. Another huge factor is the dividend yield. Most stable reits have shot up like crazy! Namely

1. DBS - 5%
2. Hong Leong Finance - 5.8%
3. OCBC - 4.4% (Low considered to the rest, but will accumulate due to the weakness, with there being more upside in the LONG RUN, yes that is the game I am playing in my investing game, and not to spot short term potential winners by entering and exiting trades frequently. I want it to be so boring, and when I suddenly realize it 5 years from now, I hope to get an epiphany (WOW, you mean I endured through all that and have gotten a little result to be proud of?)

That is the power of Compounding there, my friends.

With this, my projected yield next year will be close to 4k, which I calculated would cover about 80% my fixed expenses which I term as,

1. Household Telco & Internet Bills - About $150 each month
2. $75 savings plan - Most NSFs will relate to this, your first time in life earning a little bit of money and someone coming to tell you it can grow to a large amount (though now I understand it is really bullshit to me)
3. Transport - $100 each month
4. Credit Card Annual Fees - $200 (accumulate miles to see the world!)
5. $45/month sponsorship for a life in Africa - Hope his life really changes through the opportunity for education, which sometimes, we really take for granted in SG
6. Term Plan - $900 (It is really important in this journey that we take care of our downside before planning for our upside)
7. Hospitalisation rider - $250 (just Government would do, I dont need to enjoy the luxuries)

Will continue to deploy more from my warchest when the opportunity arises and hopefully the market gets weaker (sneaky thought, LOL)

2. Qualify to become DBS Treasures Client ($350k) by 35

6 years from now.

Not that I really want to be a treasures client, but this next goal is really lofty in comparison to how I thought as I grew up. No way will I think that it is possible in the past. (More on why I think so in the next point).

My first $100k, which was accumulated last year, was really miraculous in its own ways, and I am betting on more lucky breakthroughs in the next 6 years.

In the short term, it will be
- $200k by 32 years old (3 years time)

At the moment, with my salary (not considered high compared to most Singaporeans at my age), I can achieve it if I live a super frugal life, but I decided someday that life should not be that way. We must spend on decisions/experiences that one day when we grow old, we will not think back and say (I wished I gave it a try when I was younger and see how things turned out, and one big thing is on Travel. Not extravagant ones at this stage though). My project stint in China last year really opened up my eyes to the outside world, and now being in Philippines also taught me something different. The trade off for these experiences is that I will potentially earn lesser then my friends who are in the Public Sector, or pushing for jobs that are based in SG (which typically comes with acceptable bonus, comfortable position or jumping around constantly to keep getting higher pay). My company is really stingy with bonus/increments, but I still choose to stay because I get to be posted to overseas projects.

I still want to experience the outside world, and in someway, it is chaotic as compared to how SG operates, which makes me appreciate this small little island I proudly call home. I have not been in SG for the 2 consecutive years during National Day, and for the first time this year, I really felt so patriotic watching the parade via youtube, and being so emotional inside for the many good things that happened in my life on this safe island.

To achieve my goal, here is what I set out, assuming there is 0 increment and I do not get laid off in the next 6 years

1. Save $30k each year (for next 3 years, it will hit $200k)
- Helped by incoming Dividends, and at this stage, I hope that by 32, I can hit $8k in dividends
- Reason is I decided that I will continue to deploy my warchest over the years when the opportunity arises, rather then horde a huge amount of warchest, so that the power of incoming dividends increases every year.
- If the fixed expenses do not increase, the extra $3k out of the $8k can help to cover half of my monthly money spent on food alone, which will be a huge help on the road to FI
2. From 32 to 35, it will be $50k each year
- Hopefully, by now, I will have $10k dividend each year, and progressively move up to $12k, which is $1k each month on average, something that I used to dream about 1.5 years back when my dividends for that year was only 2-3 hundred. But now that I can see about $4k next year, $12k seems so much easier.
- $30k (salary) + $10k (dividends) leaves me with the extra $10k, which I will leave room for the random things that might happen to me over the years (strike TOTO? Secure a better job? I dont know)

Just for the record, this $350k is personal, in other words, if I get attached/married, etc, I still intend to have this milestone (again this requires another miracle) despite all the potential expenses. Because there are many uncertain things, and there is a likely chance the following things might happen over the next 6 years

- Pay more school fees for knowledge (intend to get Specialist diploma from NTU, with some credits available to former students)
- Get attached?
- Purchase a HDB?
- More travelling experiences?
- Something terrible happening at home?

3. More about myself and why $350k is something I never dreamed about growing up

I grew up in an orphanage, and since young, there was absolutely nothing I could call my own. The things were all shared. Even the clothes, since sometimes you will find out that another kid was wearing your clothes (dang!).

Total value of my possessions when I left the place at age 13 = Literally $0

In secondary school, junior college, I would receive monthly help for my meals, tuition, and which were enough to get by. I remember eating maggi mee most of the time, which now I really feel is unhealthy. I worked a little while waiting for my JC to begin, and used that money to custom build a PC, which is really one of my joys. And also before NS, but spending on frivolous things, or spreading it out so that I could live a little more comfortably for the next couple of months.

Total value of possessions just before NS = PC + maybe $500 in savings

In NS, with the pay, there was a little more social activities, as well as giving back through an organisation I joined. Still had no concept of saving money and seeing it grow over time, so again money would be spent at on random things, like random trips and I don't really recall there being at least $2k in savings. Life in university began and I took up more tuition jobs, however, majority of it went into the organisation too for whatever relevant reasons that were justified then. Getting a $75/month savings plan, as well as investing in a good phone at that time iPhone, it was at a period whereby iPhones generally would not lag in the long run, but Android phones would show vulnerability after a few months of using)

Total value of possession after NS/Uni = Better PC, good phone, less then $2k in savings too

Next came the working world, whereby money started coming in, though I made a huge mistake in joining the financial services industry ( i still loathe myself at times thinking back), which delayed my official entry into the working world where my skills will be properly recognized.

So in summary, it is a life with almost no possessions, while my friends will experience overseas family trips, good food during festive occasions like CNY, majority having cars at home, getting a HP earlier then me, gameboy/playsation, etc. My education of the things of this world really started late, and that was why travelling was never really part of my life (till I experienced the magic of it last year), nor was obtaining the skill of driving a car. It was a natural progression for my friends to get their driving license at at the age of 18, since they were exposed to being in one from young, which I obviously did not. Till this day, I still have not obtained a car license, only realizing how late I am to knowing that this is a very good skill, given how I still aim to have more overseas exposure over the next 2-3 years at least. Their exposure of proper family settings, etc have also given them a better headstart in this life, while I tend to find that I am more introvert, and hate social occasions, which are actually good if we want upward mobility in the working world. My friends posses the skills of small talk and I certainly am not good in it. Another thing is since I grew up with nothing, every extra thing now feels good, and it makes me so satisfied that I do not really have the hunger to go for more (being easily satisfied, which is a bad thing as my friends are always having the mindset of getting more things (like starting a business, jumping to another job)). So moving to another job is rather hard for me, unless I really become very unsatisfied with the opportunities here. Being protective of what I have now, is a boon as well as a bane

So if you manage to read through all these, you can get a better sense of why $350k is something I never imagined I would own one day, given how I am used to owning almost nothing valuable since young

At the end of the way, why set all these goals? It is simply so that my next generation will have a better life than I had

Bye for now and good luck to your own goals too!

Milestone

With a recent purchase, the goal of being able to receive dividends every month has been achieved. Here's the chart!

2018 Annual Report - Continued

2. What didn't go well this year?

Well, it is hard to pinpoint as I am generally not a negative person, yes there will be disappointments, however I do not dwell on them or take it so seriously that it affects my life. I'll try to squeeze out something over here. 

Investing. This was my first full year as a real investor, and needless to say, it did not go as I hoped. Portfolio is negative due to the recent market dips. Something for me to work on, and I am focusing on being more disciplined in looking at financial metrics, though I am also highly convinced by Nassim Taleb's idea that there are so many randomness in life. This applies to stocks too. So likely, I will just stick to ETF investing and will look to pump more capital in as the index drops further (with fingers crossed!)

I guess there is really nothing much here as I am happy with things at the moment, probably the getting a higher pay, which everyone wants. This is something I will work towards to.

3. What am I working towards to?

Work experience. I will seek out another opportunity for a posting overseas again for a project, as I have made it a mini aim of mine to experience another culture. It could be a trip back to China, which I do not mind at all. Of course, with this, I am also hoping for a pay raise, which if I am not satisfied with what the company has to offer, I will start hunting for the next jo b.

VBA/Excel. I am considered slow on this aspect, but lately I have been fascinated by the automation of things, especially through Excel, which is such an underrated software in my experience as I still see people pretty much do the same few things all over again. I've started subscribing to a channel on Youtube, Learn Spreadsheets. I have benefited alot and new ideas keep flowing in on how I can improve my existing spreadsheet after learning about the features which I was not aware of. Productivity increase, and I do hope this little investment will prove to be worthwhile in my career. Came across this VBA Tutorials, which I love so far, as the author takes you step by step to learn more and at the same time, have tutorials for you to try. VBA semi-professional by the end of the year!

Learn, Learn, Learn. Learn batch files script, learn a new course on Edx, specifically the one recommended by Four Pillar Freedom. 

Investing. Deploy more capital into the markets as it continues to drop?

Ok nothing else more.

Happy New Year to Everyone out there!

2018 Annual Reflection

*This is inspired by Four Pillar Freedom's Post - Here it is

Three Questions

1. What went well this year?

2. What didn't go so well this year?

3. What am I working towards?

What Went Well This Year? 

Work Experience. Had the opportunity of a lifetime to be part of a project in China and stayed there for close to 8 months. It opened up my eyes to the world and I spent a part of my time travelling to see the different cities with my colleagues. It left an indelible mark on me to make it a point to travel and experience the beauty this world has to offer. I realized I had such a micro view of the world in the past (yes I did travel, but was not really impacted by those trips) and all I was concentrating on while living in Singapore was to grow my savings rate (which limited me to the options I can have). 

I learnt how to YOLO a little and not be too tight arsed on how my money was spent. (Well, the compensation received played a huge part in this too). Experienced a different culture and mindset and it was is so refreshing. 

With this, I was also blessed to be in charge of a segment of the project, something that allowed me to learn about project management as well as grow my skills. At least now I can say I know something. 

Grateful for the project manager who was supportive of the things I wanted to learn, and giving me space to pick up the skills. At the same time, the seniors who were so ever willing to teach and not grumble when I approached them. This was such a dream team and a breakthrough for my career. 

Books. I set up a reading challenge through Goodreads to reach 35 books this year. Fell short of it and managed only 27 books. Still, it was great. I have subtlely (if ever there is this word) opened up my eyes to this world and it is always great to learn from others. To ever learn something about a person, read the books they write because reading is so different from listening.

Most impacted book definitely would be The Undoing Project by Michael Lewis. I realized as I read this that I have always been curious about behavioural economics/science. Or in short, why people make decisions and how they decide on why they want to make it. This book was like the Bible that opened up my eyes. It led me to read other fantastic books like Predictably Irrational, Emotional Intelligence, Influence and Never Split The Difference (all similar yet different).

I'm currently reading Robert B Cialdini's  Pre-Suasion.

For me, such books make me aware of techniques people use in their daily interactions or how they handle situations and it helps me to be aware of cognitive biasness. Oh, and it helps me in my interactions, since I am not much of a talker myself.

Finance - Investing, Savings, Tracking. 

Investing - Suffered capital losses on paper, but I'm in this for the long run. Waiting for the market to dip further with all the uncertainties before purchasing more. Yes, capital losses are not fun, but I have increased my dividends by about four times in the coming year with my capital injection. And learn from how I can execute future stock purchases. I've hit my initial goal of $50/month dividends this year, and moving on to next year, I intend to have on average $200/month.

Savings - With the blessing I had from the work opportunity, my savings account more than doubled this year. I'm hoping for more of such goodies. Coupled with the frugal mindset, so so important.

Tracking - Expenses/Investing. Have been using Google Sheets to track my spending/investment/networth growth for 2 to 3 years. Was lazy to work on it, but what was good was that I fined tuned certain parts of it from time to time when I felt the need to and had the inspiration. Over the past couple of days, I finally consolidated them into an excel (which has increased capabilities) and I am excited to continue work on this. With this, I will work on charts. Google Sheets will still be my main platform to track expenses, but detailed investment purchases and analysis will be handled by Excel form now on. I'm excited.

Continuous Learning. Am in the midst of taking a cert in Big Data Management. I realised I love systems. Though the teachings are not in-depth and coupled with my commitment to the overseas project, my learning has really been minimal. But still its good to grow the knowledge at almost free of charge with the skills future credit available. I'll continue to explore more from my Alma Mata university for my next learning journey.

On Friendship/Relationships. I've made the decision to cut off certain relationships. This was a huge part of my life for the past 10 years, but I've never really felt like I fitted in. They are very nice people with great heart. I'm happy now that I do not have to provide 'fake smiles and small talks'. Don't know if I will regret this, but at least I'm so much happier now.

Newcastle United. Nothing exciting about the team under mike ashley's management. Benitez is doing an excellent job stabilizing the team. The only highlight here would be the sight of a real Magpie when I was climbing a part of the great wall in Tianjin. So happy that day.

Cheap Thrill: Will enjoy Business Class flight back to SG on 30th with company footing the bill. Enjoy life without paying for it.

Lastly, to anyone who is reading this out there, feel free to approach me for any thing you might want to know about China.

I'll leave the other 2 questions for another day.

Ciao.

So far away..

Have been away for long, and do I even miss writing these posts? Probably not. I guess this is the litmus test as to whether I will end up becoming a blogger. Truth is I love reading, and specifically financial blogs. But I find it such a hassle to write, or think of things to write about. What brought me back here today was simply because I was explaining how insurance works to him and he told me I should be working on my blog to share the stuff. But frankly, to be honest, most of the knowledge I learnt was from reading so many other financial blogs. So I shall attempt to keep it going.

Best blog of the moment for me? Definitely Early Retirement SG. I love how he analyzes so many simple issues in life, and to be honest, I find myself nodding ahead to the many things he wrote. I hope to be able to write like him!

One happy thing was the sharing of Singsaver to my friends, and I am glad they took my advice to get free vouchers while signing up for credit cards!

Things have changed though, started a side business, hope it works!

Lastly, its a quote I gotta write. Read from a lovely book.

"They say find a purpose in your life and live it. But sometimes, it is only after you have lived that you recognize your life had a purpose, and likely one you never had in mind. And now that I had fulfilled mine, I felt aimless and adrift."

Something to ponder on

Some thoughts on Investing

Most of us as retail investors go through this process, to be a "pro" we spend all our time either perfecting our Technical Analysis skills (reading of chart patterns as people believe they can predict these movements based on past results) or Fundamental Analysis (reading of financial reports and being able to see the potential strength/weakness or growth/decline).

Some spend their whole life thinking that Financial Analyst are god-send and follow their advice religiously.

Some gets sucked into the rumors that were spread and jump in without making their own judgement.

Some buy and do not even know what they are doing (i recently heard a story where a person bought a single lot of a stock and was so proud that she owned a stock, but didnt even factor in brokerage fee, and a host of other things)

And we all think we are pros in our own ways doing these things

BUT here's the big question:

Do CEO of companies look at fundamental or technical analysis or go around listening to rumors just to run heir company? Its a good question because if they do, then all the more we should improve on those skills. However, I believe they do not look into those when running their company, but rather think of ways to grow their share price/profits/revenue/etc..

So, this leaves us with the dilemma, if they do not do what the retail investors do, why then are we doing those things? Are we looking at the wrong thing?

And just a last thought on listening to rumors/analyzing big investor movements when we make investing decisions. Many times we read reports of this or that big investor selling their share and we think that we should follow suit.

However, here's the thought: There are many reasons for selling, but only one reason for buying (and that is for the price to go up). The big investor could have sold due to

- re-balancing of portfolio
- have cash for other opportunities
- to purchase a home?
- for unforseen things in live
- to bring family on a super duper expensive holiday

But when we buy, we are only hoping for 1 thing, and that is the price will hopefully go up.

Best Savings Account?

So this is my journey on maximizing my returns on my bank account. It led me to days of research here and there and finally I decided on Maybank Save Up Programme. Most people would be very familiar with OCBC 360 or UOB One, since they are more highly advertised. They started as great accounts with fantastic returns after fulfilling the criterias, HOWEVER, they re-adjusted their interest returns and it does not look attractive anymore.

Exactly how good is MayBank Save Up? It allows one to have an effective rate of up to 3% on the first $60,000 after the person fulfills 3 out of any 9 services stated. At first glance, it seems like it is hard to fulfill the conditions, since most of us of just started working are not really going to get any housing loan of at least $200,000, nor education loan of $100,000 nor a unit trust of $300 each month (DUE TO HIGH FEES).

However, I was attracted to the $300 Monthly Giro Bill Payment service and wanted to see how I could get the best out of this. This "additional" criteria was something that would put off someone who's first priority is to save up and not have extra spending. This is in contrast to it's competitors, who just requires the person to credit salary and spend $500 on their credit card.

So Magpie cracked his head and tried counting the monthly expenses that could contribute to the $300 Giro Deduction, at the same time not having to spend extra on Credit Card. Ideas came forth, such as making voluntary contribution to CPF through Giro, however he was disappointed to find out it was not recognized as a valid Giro Deduction. He went one step further since he has a current POSB Invest-Saver and checked with the bank if they could actually deduct from the Maybank account instead of the POSB account. Again, it was a straight no.

Magpie never gives up when it comes to good deals. He was already looking into Maybank Kim Eng's Monthly Investment Plan(MIP) and was wondering if he could actually open an account and use the Maybank account to have a Giro Deduction for the MIP. The first few email exchange with Kim Eng did not seem favorable, and it seemed like it would not work. Hence, Magpie would actually face the possibility of having to actually increase spending.

He tried for one last time, this time by walking into the bank and speaking to the banker. The banker was stunned by such a request and casually mentioned that very few people know of such a thing (The MIP). However, the banker did not have answers to the question of whether the Giro Deduction could be used for the MIP, since there was a small fine print in the conditions stated that payments to Maybank would not count.

They started contacting their product team and Magpie was shocked that they needed so long to confirm such a query. It took close to a week before they got back. And the answer was YES it is a valid arrangement.

What a FANTASTIC news! So here you go, this is what I feel is the current best savings returns for someone who just started work and is receiving a modest pay, and trying to save up as much. With the following criteria,

- Credit Salary of at least $2,000
- Spend $500 on Credit Card
- $300 per month Giro Deduction

the person NEED NOT increase spending just to hit the $300 per month Giro Deduction, however the extra amount needed to achieve the criteria for the highest savings rate possible could actually be channeled into the MIP which gives higher returns over time.