Saturday, January 28, 2012

The importance of Investment Discipline and Dividend-paying shares

For some reasons, we humans like the adrenaline rush feeling running through our veins when it comes to entertainment, partying or investing. I went to the casino with a friend at the Marina Bay Sands (MBS) this afternoon, only to find those people who are at the table emotionless...or rather motionless. There were a mix of youngsters (in their 20s) - including myself and the Ah-peks & Aunties (in their 50 to 60s) and one thing in common of what all of them did after the dealer swept all their money away in the previous game was to put their money to a "hole" all over again...and this process repeats for 365 days a year 7 days a week and 24 hours a day.

P.s: I placed a bet at the Roulette table and lost S$100 after 5 rounds. Afterall, I am human too :)

When it comes to investing in the stock market, many times we involve our emotional feelings especially when it comes to periods of bull-run. We ended up buying high and selling low. In order to avoid these types of irrational choices that we made, we have to develop an Investment Policy, Mission and Statement of our own. A written policy like checking your goals in mind or writing a blog like this will help you stay discplined. It will also keep your emotions in check.

Another way to keep your emotional feelings in check is to stay away from the game and by that I mean staying invested in dividend paying shares. Dividend stocks are often not respected by people and they don't usually get the attention they need. If the majority of your portfolio are dividend paying shares, chances are you don't monitor the stock market daily - which makes it one of the major advantage of investing in dividend paying shares. Some of the other advantages of dividend paying shares are:

1.) Dividend Reinvestment Plan (DRIPS) - Don't hesitate to learn about the power of compounding. By compunding your dividends, you will be surprised how much your net worth will total over the long term. Your cash flow will eventually be so great through compounding effect to the point you will be financially free. This is very different from non-dividend paying stocks which you can earn money only by selling the stock.

2.) Sleeping Generating Money Machine - It gives you money even if you are sleeping at night, during the day or even when you have not woken up at 11am in the morning :)

3.) Good safe investment - Historically dividend paying shares have been good safe investments for tough times since most investors turn to investing in them to avoid having their portfolio hammered.

In short, we work hard, work smart and work in a discipline manner. Set a realistic goal and stay disciplined. You will be rewarded.

When a man tells you that he got rich through hard work, ask him: 'Whose?'" - Don Marquis

Thursday, January 26, 2012

Extra Income - How important is it??

In the past, having diverse sources of incomes gives people a backup to fall upon. However, in recent times, people are beginning to realize the importance of extra income as a means to realize your dream and goals earlier. Is it really important? Will it help you to achieve your financial goals earlier?

Recently, I have been earning extra income from attending surveys and interviews. While this may be seen as a one-off event, the payout at times are not bad at all. In the past 4 months, I have attended 3 interview surveys with different companies advertising different products. The questions they asked were fascinating at times and the process throughout the whole survey was full of interaction.. And of course the reward was not bad at all!!! :)

As T. Harv Eker said previously in his seminar: "NEVER REJECT MONEY!!!". It taught us the importance of every single cent earned and saved and converting it to residual passive income. Respect money and it will respect you back.

P.s: On my way to meet the survey interviewer today, I saw a coin on the floor and to my surprise, the kid who walked beside me kicked the coin away and it fell into the drain. I suppose that tells you how kids behave and respect money these days.

Wednesday, January 25, 2012

Happy CNY STI Bull Run

First of all, I would like to wish everyone a Happy Dragon New Year as we heads into a turbulent 2012 cautiously.

STI has run up an incredible 10% bull run since the beginning of the year and volume has been going up. With the STI almost touching the 3000 mark soon enough (if bull continues for the next couple of days), experienced vestors must have patient to wait for the right moment to enter long. As previous experience has proven, when there is a bull run, not only big money are entering, but also the various source of money from the neighbours who wants to ride in the bull run.

As always, look out for opportunities ahead and wait for the right moment. But as history always repeat, people never learn their lesson and will still buy on impulse again.

Wednesday, January 18, 2012

CapitalMall Trust - 2011 Results

Good bluechip REITS to monitor.

CapitaMall Trust Management Limited (CMTML), the manager of CapitaMall Trust (CMT), is pleased to announce that CMT has achieved net property income (NPI) of S$418.2 million for the period 1 January to 31 December 2011 (FY2011). This is 4.8% higher than the NPI for Full Year 2010 (FY2010). Distribution per unit (DPU) for FY2011 was 9.371 cents, compared to FY2010 DPU of 9.24 cents. The better performance in FY2011 compared with FY2010 was mainly due to contributions from Clarke Quay and Iluma which were acquired on 1 July 2010 and 1 April 2011 respectively, as well as rental increases from new leases and renewal of existing leases.

On 29 February 2012, Unitholders can expect to receive their distribution of 1.281 cents per unit for the period 10 November to 31 December 2011. An advanced distribution of 1.022 cents per unit for the period 1 October to 9 November 2011 has already been paid to Unitholders on 6 January 2012. The combined distribution of 2.30 cents per unit for Fourth Quarter 2011 (4Q 2011) implies a distribution yield of 5.22% based on CMT’s closing price of S$1.75 per unit on 17 January 2012. The Books Closure Date is on 30 January 2012.

Mr James Koh Cher Siang, Chairman of CMTML, said, “We are happy to report that CMT ended FY2011 strongly with improved operational performance. We renewed 503 leases with a positive rental reversion of 6.4% and achieved a 6.3% year-on-year increase in tenant sales in our malls. The improved performance was underpinned by Singapore’s low unemployment rate, healthy domestic consumption and record-breaking visitor arrivals. Although the outlook for the global economy in 2012 is less certain and may affect consumer sentiment, CMT is well-positioned to ride out any downturn with our portfolio of well-located necessity shopping malls whose businesses have proven their resilience over time and economic cycles.”
Mr Simon Ho, CEO of CMTML, said, “Despite the current economic outlook, we are confident that CMT’s scale, strong retailer network and knowledge of tenant sales will stand us in good stead. In addition, leases due for renewal in 2012 were executed in 2009 in the throes of the global financial crisis at a relatively low rental reversion of 2.3%. Our ongoing asset enhancements such as those for JCube, Iluma and The Atrium@Orchard are expected to come to fruition and boost our rental income this year and in 2013. Besides commencing our asset enhancement works for Clarke Quay in the second quarter of 2012, we also intend to focus on executing our first greenfield development project, Westgate, located in Jurong, the largest Regional Centre in Singapore. Construction for the project commenced on 12 January 2012. We are targeting to complete and open the mall by end-2013.”

Is Saving an important aspect in your life???

Why do some people feel it is important to save money and why do some people feel otherwise? Have you known anyone who might fell into these two categories? According to a yahoo article today, 2 out of 3 Singaporean admitted to saving less than 20% of their monthly income. While there are many who have contributed to household costs and living, I am sure there are many as well who splurge their money on things like upgrading cars, branded clothing and most commonly....Vacation.

For most people, they enjoy first and suffer later. They bought things and gadgets that look appealing to them at first sight, but lose value soon after. Having said that, I know of a friend who is trying to save money by eating cup noodle regularly for his meal. While this may help him to save costs in the short term, his health would be damage in the long run.

After all, Savings, isn't about depriving yourself, but figuring out what you are wasting your money on. Treat yourself well but with discipline, and wealth will come to you in the long run.

Tuesday, January 17, 2012

5 Signs you may be trapped in a dead-end job

First of all, I would like to tribute this article to Kevin, a blogger from Canada whom I admired very much. In this blog entry however, I would like to make it my own, the Singaporean style.

Here are five signs you may be caught in a dead-end job:

1.) You take full advantage of the "8" hours you are working.

You come 30 mins late to work - "Ughh, its just 30 minutes, everyone does it"
You then went for an early lunch - "Ughh, we have to be early!! otherwise, the seats would be taken up"
You then came back late after lunch - "Ughh, the lunch is making me so sleepy and I don't have mood to work"
You then went home on the dot - "Ughh, we are not paid to do OT. Let's go home early to catch the bus/mrt"

2.) You count the hours, minutes and sometimes even seconds while working

At every moment, you would start to look at the time shown in your desktop/laptop. You become disinterested with the work/project you are working on and you are waiting for the magical 11.30 (early lunch) and 5.30 (knock off time).

3.) You spend time looking at other sites such as Facebook, Lim&Tan, SGX or yahoonews

You would "Refresh" your page to look at your latest news feed on your friends. At other times when time permits, you would upload your latest photos which you have stored in your camera for a few months.

You would also at times look at the latest stock market, especially when volatility is high and monitor those numbers during your working hours. You would then discuss news with your friends who sat nearby.

4.) Your manager gives you bad appraisal when you think you have done better.

You feel unappreciated for the work that you have done. Your manager did not give you credit for the things you have done for him/her and give you a bad appraisal.

"On-target" appraisal = "I don't want you to go but if you do go I don't give a shit anyway"

5.) You have the responsibilites of a senior but receives a junior pay

You feel that you are worth more than your current salary. You compare your salary with your other friends working in other sectors. You then compare your bonuses and annual increment...and this automatically becomes a common topic to talk about annually.

Take your time and evaluate yourself. If you really feel that your worth is unjustified, make the effort to look for one that rewards you. If you on the other hand who are lazy, then motivate yourself to make yourself worth the salary that people are paying you.

Saturday, January 14, 2012

Dividend Shares - in the form of a "Birthday Present"

Have you wondered at times having cracked your brains out for several nights and hours on what gift to buy for your family (i.e parents/siblings) birthday present?

While it might seem quite noticeably that we spent our everyday lives together, at times it gets quite tricky when choosing a birthday present. For example, I remembered giving my mum a make-up set for her birthday 3-4 years ago or giving my sister a branded pouch for her birthday gift in the past. While I do understand that they appreciate my thoughts and they claim that they "like" the product, sometimes the gift that we bought may be deemed as "useless" and much of the times we saw them lying in one corner collecting dusts over the years.

I understand that at this point you must be thinking: "IT IS THE THOUGHT THAT COUNTS, NOT THE GIFT ITSELF". While I agree with the intention of this sentence, however when it comes to dollar and monetary sense, wouldn't it better if you could choose the gift that you really want? After all, as a family, we are very close to one another and we can dispense with the extreme formality.

It is at this point that I thought of investing dividend shares for members in my family as their birthday gift. Starting this year and onwards, I will buy them 1 lot of dividend share (which of course I think is value at that point in time) for each of their respective birthday period and give them the "dividend payout" which will last them for infinity. With all fairness and humility, I probably will still keep those shares as mine, though i intend to keep forever and don't intend to sell anyway.

You may also discount it as a mere 1 lot of share. But if you take into account 10,20 years of birthday celebration and which you will celebrate anyway one way or another, that will be MASSIVELY A LOT until now. So starting early is immensely important. After all, which birthday presents you bought in the past are true value now? Ask yourself this: Do you even still remember what presents you bought for your brother 3 years ago?

In summary, here are the advantages of investing in dividend shares as a form of your family's birthday present:

1.) Promotes the value of saving and passed down the habit to your siblings/children, etc.

2.) Dividends (in most cases) payout will last you to infinity.

3.) Accumulating the "gift" from these companies. For example, if your child is 10 years old and you have been buying diligently for every of his birthday (assuming you bought SPH), you would have 10 lots of SPH shares by now which will give your child a payout of nearly $2000 annually....and for INFINITY.

4.) As and when you really need the money, you can sell the shares and re-invest in better dividend shares.

P.s: I celebrated my mum's birthday (13 January 2012) by buying her 1 lot of ST Engineering share for her. My intention is to transfer the dividend payout to her bank account everytime and every year i receive it and before I know it, its another birthday year which i will repeat and accumulate my "gift" for her. Of course, on top of all this, i do treat her to a nice simple lunch at Marina Keppel as well :p

Friday, January 13, 2012

Change of Hands - Money

During dinner today, my sister posed a question to me regarding the flow of money and the change of hands between money.

Let's assuming in this world we have $X amount of money printed and available. When money changes hands (for e.g Supplier sells meat to Supermarket which in turn sells it to restaurant which in turn sells the same to consumers), does this mean that the amount of money in this world remains as $X? In this simple scenario, money changes hands and nothing is lost (i.e the amount of money in this world remains $X). The question is, if money only changes hands, why are we now facing with a lot of money uncertainty such as debt crisis for example. If Europe has no money, does this mean interchangeably that the money actually "flows" to other nations or other people?

Where do money goes in the end?

Wednesday, January 11, 2012

Getting out of the "Rat Race" - Does it apply for everyone?

Getting out of the "Rat race" - can be defined as pulling out of a race where everyone competes for the one ultimate position. Truely enough, no one says that getting IN into the "Rat race" is a bad thing. In fact, most of us have been through in the rat race and rightly so it builds up our knowledge, determination, stamina and the ability to find an ultimate solution to end the race.

I came across an ex-classmate of mine a couple of days ago. I remembered him as a smart person who receives good grades in his report every single time. We went to a nearby coffee shop (not Starbucks cause simply of the obvious price tag) and chat a lot to catch up the missing times. In the midst of our conversation, I asked him what is he currently doing and whether he ever thought of getting out of the rat race one day. To my surprise, he told me that he never planned ever and don't plan to get out of the rat race. On the fair side, he did enjoy his work as an accountant even though his salary is comparable to mine (in the mid class range). But surely I thought to myself, even if someone loves his job dearly, surely planning to get out of the rat race will cross his mind? No he said.

This comes to me wondering. We know there are a lot of people in this world who probably wish they could get out of the rat race. But have we ever wonder those people who actually "enjoy" the race? What is in their mind and what is their ultimate goals then? To climb up the corporate ladder and if successful then what? and if failure then what?

Property vs Equity Investment

If you only have money for one investment and enough for either, would you choose to venture into property or equity investment? This is one interesting question as property is deemed to be a rich man's investing game while most people could invest in equity for a small amount of money.

I currently owned a property in Indonesia (see picture below). Unlike property in Singapore where you may receive a net passive income every month after paying off the loans and interest from the bank, the interest in banks in Indonesia is very high (as much as 7.5% in my case). Having said that, the capital appreciation for the property I bought has since rocket northwards and it doesnt seem like stopping anytime soon.

Many people said to me that if i bought a property in Singapore, you are owning "a piece in the air" - assuming that it is a condominium, while for the very same price, you could easily get a couple of hard piece of land on the ground.

What do you guys think?

Working for Love vs Money

I was talking to my family the other day when we went to Keppel Marina. The view was fantastic and the atmosphere was relaxing. How i wish I could be there everyday looking at the sea while enjoying the brisk.

Then I began to ask them an interesting question, which left some or many in dilemma at times:

"Assuming a 10 year horizon at least and if you have to choose one, would you rather choose a job which you don't like but pays you $5000/month or a job that you like but pays you $1000/month".

I received different answers as i began to ask people around me and the thoughts that they have. Now let me ask you the second follow up question:

"Now let me tweak the question a little bit. Assuming a same 10 year horizon at least, would you rather choose a job which you don't like but pays you $5000/month or a job that you like but pays you $4000/month"

Would your answer remain the same?? :P

Definitely something to think about ^^.

Saturday, January 7, 2012

2012 A New Year = A New Resolution

As we come into the first week of the new 2012 year, we usually goes in fast pace at least until March (for some reason the days from Jan to March seems to go past very quickly). As I begin my journey into the 3Fs, I hope to create the same motivation and discpline as the other shifus who I have much admired.

For a new 2012 resolution, I hope to be able to complete the following by end of December 2012:

1.) To continue saving 85-90% of my working income as I approaches the S$5,000 level mark increment.

GOAL: To save and venture into opportunities in equity and property investment.

2.) To maintain a discipline approach to equity investing and look for dividend income stream. At this moment, I will be focusing merely on the Singapore stocks for now as I predict there will be heavy currency wars in 2012 which involves the EURO and USD clashing, hence skipping the HK, US and UK market for the time being.

GOAL: Look for steady income stream

3.) Keeping a healthy diet and balanced workout to maintain a healthy lifestyle.

GOAL: By exercising more regularly during the days and weekends and to eat more fruits and vegetables

4.) To spend and enjoy more time with my family and girlfriend
GOAL: To be a better and more caring son and boyfriend.

5.) A successful start of the "Back to the School" path for my Master of Business Administration (MBA) programme at the Singapore Management University (SMU)

GOAL: I've been dreading going back to school for quite a while now. But i do hope to make a mark and gain some surprise from this journey.