Thursday, June 30, 2016

Recent Action - Fraser Centerpoint Trust (FCT)

In my previous post, I wrote an article about how the market has been surging since the Brexit event takes place. It is indeed very surprising to me as with anybody why this is happening. This could very well be the start of a secular bull run continuing their rally since 2013.

During this period, I've divested a few rounds of FCT since I'm uncomfortable with the run-up. First, I divested my earlier stake of 7,000 shares at $1.985, and then today I divested another 8,000 shares at $2.11 and another 10,000 shares at $2.12. As of writing, I have NIL shares in FCT at the moment.

By divesting these shares, this is a part of my strategy to protect both my capital and profits and the proceeds would go to my savings which would be deployed upon available opportunity. Since Mr. Market is irrational in nature, the best way to take advantage of it is to exploit their weaknesses and be greedy when fearful, be fearful when greedy.

FCT management is aiming for a 9% increase in the rental reversion IRR for Northpoint once they completed their AEI. It's a positive shot for the long term though we are likely to see NPI compression for the next 3 quarters ahead.

The occupancy for Q2 would look to be at the lowest during the whole AEI, so we are likely to see a poorer earnings and a lower DPU in the short term. NPI is expected to reduce by about $1m in Q2 year on year so the impact should be minimal but given how they've been increasing every year, this should have a knee jerk reaction to investors who are short term minded. If that happens, that's probably a good entry time to load onto it more.

The NAV is currently at $1.91 which makes current share price valuation at a P/NAV of 1.12x which I think is slightly overvalued given the short to mid term headwinds. On the longer term, this should benefit from the integration of Woodland and Yishun integrated hub and I should be looking to re-enter closer to the NAV.

Tuesday, June 28, 2016

Resurgent Run For Reits Companies

The past two days have resulted in quite an amazing activity in particular the resurgent run for Reits as the odds for a rising rate for this year were slashed virtually to zero as a result of further uncertainty due to Brexit. There were even news that the Fed could launch another quantitative easing (QE4) on the back of all these uncertainties.

What has resulted from the news is a flight to safety to Reits as a potential safe haven for investors. It is interesting because the traditional safe haven used to be the gold and treasury bond but demand have been so rampant that investors are running to Reits as an alternative.

If you recall a few years back, the run was somewhat similar to what happened back then in 2013 when Reits were running high to such an amazing level that the spread between the yield it offered vs the treasury yield were compressed to the lowest. That was a sign that prudent investors should take profits off the table, regardless of whatever happens afterwards because it was simply unsustainable.

The run this time has a lot of room to run if we were to witness something similar to 2013 and given that the alternatives are poor and economic driven in nature, it appears that Reits are a safety net which investors are comfortable with.

Having said that, my approach has always been more towards taking off profits when I see there are opportunities to do so. I will definitely miss to sell at the highest but divesting them also means passing on the risk to the next person who thinks it's prudent to do so at this time. I could be dead wrong at the end of the day and miss those gains other people are enjoying but at least this prudent approach has served me very well over the past few years since I started investing.

I have taken profits off the table for FCT partially over the past couple of days at $1.985 and will continue to divest the other Reits that have been either fair or over valued at this time. You can be sure I will divest more as they continue to give me the opportunity to do so over the next couple of days.

Be fearful when others are greedy. This is herd investing at the very best.

Thursday, June 23, 2016

Brexit Unfolds - What Should Investors Do Next?

23rd June is a memorable day for the Britain as they chose to vote for independence from the EU nation. The Brexit event unfolds and gain momentum from the early morning trade where we see a lot of volatility movement across the stock market globally.

Almost all the sectors were hit by the unexpected reaction this morning and opportunities started to look open once again. My own portfolio were not spared as it dropped $15K from this morning losses. What should we as retail investors do then in such instance?

I think the worst thing an investor can do at this point is to panic sell their holdings given what is happening in the market. As investors, we should prudently review our position to see if there will be any such impact from the exposure of such events and then take prudent decision accordingly. Investors should in general take this even as an opportunity to add solid companies at a cheaper valuation, if any rather than panic sell.

Perhaps, it is during this time that we should remind one another of the virtue of patience. Kiplinger called this the general rule to remind investors to never allow yourself to be bullied and tricked by your own emotions into buying something that “cannot wait”. The fact is most things can wait and there isn’t the last train that is going down the track. Even if you had found a compelling situation where the company proves to be in a great position to buy, do pace out your funds accordingly such that you would still have the funds to take advantage of them should things get uglier from here.

Buying at the bottom or selling at the high is near impossible task for most investors out there. The hard truth is most of the buying and selling activities would range from within the standard deviation and it can be quite hurtful to see your stock goes up higher when you have sold or lower when you have bought. Even the best fundamental stocks out there could succumb to market decision when the economy gets rough and market will misprice itself. This is why pacing your fund allocations and activities is an important factor that every retail investors should consider. 

For an opportunity loss it may seem difficult to endure, a permanent loss of capital is harder to absorb. Investors need to be reminded again that it takes a higher return to make a profit once the stock has dropped.

Now our mental is ready to be tested. Are you ready?

Wednesday, June 22, 2016

Living A Minimalist Lifestyle

Someone shared a video about how a Japanese man lived a minimalist lifestyle which appeared in my FB feeds this morning which I find it interesting. In the interview, he mentioned about having only 3 shirts, 4 pants and 4 pair of socks in his drawer and that is more than sufficient for him to live by.

As a cynical human being in this century, we've relieved the scene of wasteful spending too many times. The activities that we live in were typical of the general consensus approved by society: Study hard, get good grades, climb the corporate ladder, earn more money, borrow higher mortgage loans, spend more on luxury and repeated items and fill the drawer and graveyard with even more things.

I used to engage in this sort of "normal" activities in the past having been exposed to the true color of society until in the recent years where more reading and blogging on personal zen of finance taught me otherwise. My own personal journey towards minimalism has never been more far stretched than before. The possessions of things I own right now are far satisfying than anything I've ever had before in the past.

Today, I had only 5 working shirts, 2 pants and 1 pair of shoes for work. I also had a limited number of t-shirts which I bought during my last visit to BKK which is worth THB100 (about $3) each. I have a couple of more decent shirts and tuxedo for important events such as wedding, interview or party events but that almost conclude what I have in my wardrobe. I do not own a car nor do I own any expensive hardware items other than my laptops which I am using it frequently to write my blog and surf the net. 

My goal is to go for an asset light strategy as much as I can, so I feel lighter on the go. The ability to remove the incessant desire that idolizes consumerism has allowed me to roam more into spaces I've never been into. It allowed me to pursue a greater opportunity in my passion to do things that I love to do - to spend quality time with family and to travel and experience the world we live in without boundaries of consumerism.

Reducing the number of things that we possess is not the true goal of minimalism. It is after all, a delusion that a person can only have a certain number of items in order to be happy. Minimalism is about adding more colorful things in your life. Less is more. Pursue on the greater things in life. Gratitude. Passion. Contentment. Generosity. Togetherness. These are the real additions we should have in our lives.

Saturday, June 18, 2016

"Jun 16" - SG Transactions & Portfolio Update"‏

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Ho Bee Land
Fraser Centerpoint Trust
China Merchant Pacific
IReit Global
ST Engineering
CapitaCommercial Trust
HK Land*
Ascott Reit
Keppel DC Reit
Nam Lee Metals
First Reit
Total SGD

Just a quick update on the Jun portfolio as there isn't a lot of activities going on.

I managed to divest OCBC partially when the share price hits $8.92 last week before it plunges down quite a bit to where they are today. My rationale for doing so is because the valuation seems rich enough at around 1.1x P/BV which warrants justification for taking off those profits. Banks are never going to be in the portfolio for the long term because of its exposure to the direct economy in nature so it will be a trading position for now. 

I have also received a scrip of 134 shares which I have kept it for now. The divestment has pushed my holdings in OCBC from the top to the bottom for Jun.

I managed to redirect the proceeds to buying UOL at $5.42 which I had blogged here in more detail. I remain convinced that this will be a good prospective returns sometime in the future which will bring me double digit returns, which has always been a target for any purchase.

Last but not least, I also managed to redirect the rest of the proceeds to buying FCT which I blogged here not long ago. FCT remains part of my long term portfolio and I can't be more than happy to get them at a cheaper valuation than I did a month or two ago. I can be sure that I will add on more of the company should the share price goes down further in the short term.

The portfolio continues to outperform the market by increasing from the previous month of $420,834 to $426,343 this month (+1.3% month on month; +42.1% year on year). In the midst of the market volatility, some of the companies in the portfolio remain strong due to their fundamentals.

Also, I've started to input my transactions into the sgxcafe platform yesterday which would directly compute my returns for this year. As of today, the XIRR YTD return for the portfolio is at 12.2% while the benchmark for STI has returned -3.9% this year. Even though it's trending downwards, I am generally pleased with how the portfolio has performed.

In terms of dividends, it will be a dry month until August where most of the companies are once again dishing out dividends after they announced their quarterly results shortly.

The cash portion remains low at 7% though I am awaiting for the CMP offer to go unconditional to finalize pretty soon. Once that happens, the cash portion would bump up to around 18%.

The Brexit event continues to headline the market and we are 4 days away from what could possibly be a game changer to the market in the short term.

How about you? How has the month of Jun does for you?

Friday, June 17, 2016

Recent Action - Fraser Centerpoint Trust (FCT)

This will be a quick update on some of the recent actions.

A few Reits took a beating towards the end of the closing market today and I took the opportunity to add to my existing position by adding 7,000 shares of FCT at a price of $1.93 (5,000 shares) and $1.91 (2,000 shares). The share price closed a few bids lower thereafter.

I had previously added/written a few articles on the company below this year:

My objective in accumulating this Reit is pretty simple.

The Reit owns a few suburban shopping malls which in my opinion provides a clear catalyst to move forward in the short to mid term. Both the Woodland Regional Hub and Yishun Integrated Hub are part of the near term catalyst which will spur the development forward in years to come.

Woodland Regional Hub

Yishun Integrated Transport Hub

FCT is slated to face an operating rental pressure from the AEI of their Northpoint malls as occupancy dipped in the short term so this might push the share price lower. Should that happens, I'll be almost certain to add to my position further.

The other risks would be pertaining to the further rate hike which will increase borrowing costs for all companies with debts. This has become almost like a broken recorded repeated over and over again.

In the meantime, I'll be waiting for their next quarterly results with great anticipation.

*Vested with 25,000 shares of FCT and in accumulation mode

Thursday, June 16, 2016

Recent Action - UOL

Today, I made a new entry addition to my portfolio by adding 6,000 shares of UOL at a price of $5.42

This is a company which I have been interested for quite some time but never really had the chance to add on in recent times. The recent weakness has provided the opportunity for me to do so. 

Company Background

To give a little bit of their background for those who are not familiar with the company, UOL Group Limited is a property company with over 50 years of track record in their industry. Like any conglomerate, the company is operating in many different segment, namely property development, commercial and retail investment, hotel operations, management services, and other investments. 

The company is owned by popular leader Wee Cho Yaw, who also owned UOB and another property company UIC. There’s a lot of interesting story going back to 2013 when they streamlined their operations by privatizing Pac Pacific for their hotel operations while UIC, who was owned by UOL 40%, has also privatized its crown jewel commercial properties in Singland. 

Financial Information

The below information is an extract summary of their financials over the last 10 years.

A quick glance on the important metrics - revenue, earnings and book value over the past 10 years and you can see a pretty obvious uptrend where the management has done a pretty good job at growing the company to where they are today. Meanwhile, the company has underwent a few headwinds as the economy went through a volatile period, including the GFC and Euro Crisis we had in 2008 and 2011 respectively. 

The management has also shaped the direction of the company towards moving into a recurring income play than a pure developer. This is a similar traits which I’ve seen being done to other developers like HK Land and Hobee, both of which I am vested in. 

In 2015, the recurring income play from their commercial, retail and hotel operations made up 82% of the underlying earnings. Based on the underlying earnings of $411.6 million in FY15, this came up to $337 million or an earning per share (eps) of 42 cents / share. In terms of valuation, this would translate to a PE of 12.9x based on recurring income alone. 

The Return on Equity has been declining in recent years but that’s mostly because the company has been reducing their gearing. The latest gearing ratio in FY2015 is 0.27, which is comparatively low against other developers. The company has completed a new acquisition for the UK property at High Holborn recently, which provides an NPI yield in excess of 5%, so I’m expecting both the gearing and ROE to increase in 2016.

Why Buy UOL?

1.) Recurring Income Strategy

As mentioned above, the recurring income alone will be sufficient to pay out dividends to shareholders and retained the rest for repaying loans and other working capital purpose.

The company is moving into this direction as they have recently completed the UK commercial building so recurring income play should increase accordingly.

2.) Historical Cost Basis - Hotel Operations

The hotel operations assets were held at cost in the book and not being revalued. 

Independent valuers are expecting the assets under management to grow by $800 million should they decide to revalue. This translates to about 95 cents / share which can be further added to their book value should they decide to revalue them.

3.) Deep Discount to RNAV

The latest book value after the Q1 FY2016 results were at $9.95. Combining with the above point, the RNAV is expected to be at around $10.90. My entry price at $5.42 represents right about 50% based on their RNAV, which I think is pretty decent.

In terms of historical data, the current discount also represents a -2.2 SD from the average mean. It is a heavily discounted company which is unloved by investors at the moment.

4.) Taking Privatization of UIC

The management has a long term plan of streamlining all their operations under one listed company.

They had previously taken Pan Pacific private in 2013, followed by UIC's privatization of Singapore Land not long after.

UOL has been buying UIC's stake from 2013 onwards and has today increased their stake to 44.57%. Together with GKW, they have now hold a combined stake of around 88% in UIC. Effectively, they just need around 2% more before an unconditional offer GO would come in for UIC.

Privatization of UIC would ensure that the company gets to consolidate their balance sheet under one review and they will own a full stake in the crown jewel of their commercial properties.

5.) Novena - Next Cinderella Story

UOL owns quite a bit of properties in Novena area where United Square and Novena Square are under them - both retail and office.

Royal Square is slated to be completed in 2017, which will further boosts Novena as a hub for medical tourism. This will help ensure the rental and asset value of the properties in Novena are kept competitive and rising over time.

You can read the article here.

6.) Blue-Chip Company

Getting the company into one of the 30 blue-chip in the STI constituent is not an easy task. If you had asked them 10 years ago, they would be nowhere near the market cap they are now to be able to get into the top 30.

Not that it does matter too much being a blue chip, still being one of the top 30 will get more public scrutiny, analyst attention and move with the overall index when that matters.


1.) Management Execution

The company pays out a fraction of the earnings as dividends and retained a large part of it.

By retaining a large part of the earnings, it is imperative that we have a capable management to run the company so they are able to utilize the money to a better use to grow the company.

Based on their 10 year records, you can see that the management has well apt for running the business in an efficient manner and grow every single segment of it.

2.) Development, Commercial & Retail, Hotel Weakness

Every single segment of their business is under operating pressure as weak economy kicks in. This has been largely reflected in the share price and explains why they are trading so cheap right now.

Even so, the company needs to be careful of competition and supply awareness so they can remain solvent and top of the situation when the up cycle comes back.

Final Thoughts

Property play is always going to be tricky. They are an unloved sectors neglected for many years and they do not pay dividends well. My goal is to get it low enough such that a small increase would result in double digit returns for me. I think that could be done with this company.

I'm hoping I'm right of course.

Wednesday, June 15, 2016

Are Your Portfolio Ready From A Brexit Event?

We are 8 days away from one of the most anticipated event in the history of the United Kingdom. 

The referendum will take place on 23rd Jun where people will go to a vote to decide whether Britain should remain or leave the European Union, which will bring about great repercussions to the global economy. 

One of the great repercussions would be towards the deregulation of the free trade zone economy amongst the EU Nation. Apparently, there are many companies that set up their presence in London in order to get an access to a closer economy towards the rest of the EU. Should the Brexit events take place, it will place a huge negative question mark on where they will go from here and trade presence will suffer in the short term. The exit and weakening GDP growth repercussions will have a massive blow to the global economy and every nation who has a trading partner relationship with the Britain. 

In the midst of all these uncertainties, we can also see the GBP slides down against many other currencies on fear that the unthinkable might happen. 

Some of the polls that have been conducted in recent week have suggested a close fight amongst the two parties, with those who are voting for a Brexit gaining momentum as we come closer to the D day. Popular bookmakers like Betfair and William Hill have also similarly cut short their odds from 8/1 (12.5%) on opening day to 7/4 (36%) on events Brexit would take place. In other words, they would still be expecting Bremain to happen with 2/3 probability while Brexit takes the other 1/3 probability. 

UOB has came up with a few lists of companies locally which has quite a bit of their portfolio exposed to the UK. I have two (Ascott and Ho Bee) out of the seven mentioned, so naturally I'll take an interested view on how these event is going to play out because this will have a fundamental impact to the company I'm holding.

Other than the 7 companies mentioned, I can remember a couple more like Lum Chang and UOL on top of my head which has exposure to the UK market as well.

My take is this will play out to be a non-event. On the day itself, the swing voters are likely to vote for the favorites because in a big event like this, the probability usually tends to favor the certainty.

I will probably have a couple of small bets trading the market on this based on my prediction that this will become a non-event but we'll have to see how it pans out closer.

Saturday, June 11, 2016

The Bond Market Is Borrowing Happiness From Tomorrow

In a frenzy fueled by Central Bank stimulus on worries about slowing economy, many of the benchmark treasury yield across the globe have went to record low while some have even delved into negative territory.

When an economy is slowing and faltering, it is common practice that the Central Bank exercises monetary policy to cut interest rates. The objective is to make saving less attractive and for people and companies to spend more, henceforth boosting the economy in process. The problem starts to surface when the economy isn't growing as fast as they would like but money is being forced to stuck in increasing asset bubbles territory.

The negative territory in Japan and Swiss in particular is particularly fascinating to me because it clearly indicates that demand and supply is not balanced. What the negative yield is telling us is to go out there and invest in riskier assets because if you are going to keep your money in safe haven government bonds or deposit, then you will need to pay for it. The "premium" above the face value one pays for a zero coupon cash flow is a perceived likelihood of higher return of invested capital. Apparently, there's a lot of demand for it. 

Just take a look at the picture below of how it has pans out over the years.

Bill Gross mentioned in his interview yesterday that the multi-Trillion of negative rate bonds is a bubble which will explode big one day. Given how these nations are expanding their monetary policies aggressively, we can only assume that the financial system has become even more leveraged than it was in 2007 at the beginning of the last GFC crisis.

These floating bonds, including some junk bonds, are mostly time-bombs which have been misallocated and all it takes is one fine event to create a domino effect on default cases on these companies or countries. These seem to suggest that history will repeat itself once again, as it always is.

Friday, June 10, 2016

Are You Valuing Your Companies Over Ambitiously?

There are many ways on how to value a company using the different methodology school of thoughts. 

I had previously wrote an article about two of the methodology which you can view over here. One of the valuation methodology, Discounted Cash Flow (DCF) is one of the most commonly used across investors for many reasons.

The recent monetary policy of heavy quantitative easing done across the globe seems to suggest that we are on a decade long of low interest rate where it allows stimulation of funds chasing around after riskier assets, such as equity and housing. 

In general, the objective of the easing of monetary policy and reduction of the banks' reserved rate is to allow banks to lend more money to companies so they are able to fund the loan at cheaper rate and expand to grow at a faster rate than if there were no easing on the policy.

These popular monetary easing policy has resulted in a euphoria spike in interests for both the investors and media pundit and it has helped to push the share price of many stock markets to its high despite the problems ahead. Just take a look at where the US market is heading today and you will understand my point.

As a result of such phenomenon, this usually poses a problem to investors when they are trying to simulate DCF and project earnings or cash flow across the next 5 years or more. 

One. The discount factor would be affected because as interest rate gradually rises, the proportion that is financed by debt would increase as the cost of debt becomes more expensive. This means that the discount rate would have to increase over time and using a standard discount rate across can be deceptive to an investor at best, especially if this is extrapolated over longer number of years.

Second. The growth (g) factor would also need to be adjusted conservatively downwards with everything else equal once the policy is back to normal. What this means is if you are expecting to project a company to grow at 10% during periods of easy monetary policy, then you should expect earnings growth to be lower once things are back to the normal. By standardizing the growth over the next 10 years and extrapolating them over time, it will create a false sense of guide and misguide the fair value perception for the investor. 

The quantitative easing will come to an end sooner or later. The US is already showing signs that the Fed will be raising interest rate hike by a couple of percentage point this year. When they do, investors will need to be mentally prepared because this will have an impact on the valuation of the company, especially if you aggressively value your company at the beginning.

Wednesday, June 8, 2016

Mid-Year Goals Review

If I didn't see my HR sending me emails reminding us to complete our mid-year appraisals at work, I wouldn't have noticed that we are already mid year through 2016. It seemed that it was just yesterday that we began the new year but now here we are, today.

Towards the end of the year in 2015, I've made some personal goals (link here) that I want to achieve by the end of 2016 so I think it's good that I have them reviewed on this mid-year review.

1.) Individual Performance vs Market Benchmark

For this goal, I've actually had to change the way to measure from the previous year since I have now put the market benchmark as a reference for comparison. What this means is that in a given year, if the market returns a negative 20% but my own performance is a negative 19%, I would have done a 1% spread better. I've also chosen the STI to be the standard benchmark reference since all of my holdings are in SGX.

To date, the STI is about 20 points (or 0.8%) down from the start of the year while I've managed to churn out a year to date performance (based on May result) of 16.8% inclusive of dividend since the start of the year. With another 2H dividend still to come, I'm expecting to add at least another 2.5% to the performance.

STI - 2016 YTD

The outperformance is mainly due to the delisting of CMP announced in April as well as taking advantage of the recent down market we've seen in period from Feb to April. Without them, the returns would be most visibly lower.

Verdict: Pass

2.) Dividend Income of $24,000

The goal this year was to expand my cashflow in the form of dividend income from the base which means I will be more than ever looking at the yield and payout component more importantly than before. Still, these have to be fundamentally strong in order for dividends to be sustainable since the last thing I'd want would be for the company to cut or slash dividends due to poor fundamentals.

To date, I've received a total dividend income of $10,904 for the first half. From the numbers, it does certainly looks like I will miss the target once again for this year as I will only be expecting at most another $7k to add to the dividends by year end. In any case, I'll just have to see how close I can get by end of the year.

Verdict: Fail

3.) Attend at least 3 AGMs

I've smacked through this goal by a mile as I have attended 5 AGMs so far (Nam Lee, FCT, Ascott, Ireit, Kingsmen).

Kingmen's AGM

This year, I've been able to better schedule my time at work and go for these AGMs meetings so I am tremendously pleased with the way I have been able to gain better insight going into these meetings.

Verdict: Pass

4.) Better Health and Fitness

This is another goal which I have been extremely pleased with how things are going because I can visibly feel my health improving well this year after a good balance of rest and decent food intakes.

My Healthy Source of Fruits in recent times...

My body also often feels aching at night after a hard day of work and carrying my son around but since I've used the koyok rub, it gets completely refreshed in the morning. In addition, I've started to take plenty of fruits too this year, in particular avocado , cantaloupe and apples.

Verdict: Pass

5.) Increase my spending on intangible relationship and learning

This is a goal which looks particularly odd especially to someone who wishes to save more by doing activities which other people are not choosing to take.

Gathering with financial bloggers - 1
Gathering of financial bloggers - 2
My upcoming holiday trip to Krabi and Centara Grand Beach Resort ^^

I've been extremely pleased with the amount of spending spent on these categories this year because it means I had lived a better life this year. So far, I've chosen to host a friend's gathering, traveling with families, foster closer ties between grandparents and grandchildren and many more. These are the sort of worthwhile money to spent on which have no regrets and I will definitely continue to put my effort in working out these deals.

Verdict: Pass

6.) At least one volunteering service

I've not yet managed to find a time to do this one.

With work on weekdays and precious family time to spend on weekends, it is getting incredibly difficult to find time suitable for doing volunteering service, which is something which I wanted to at some point.

Still, with another 2H yet to come, I hope I'll be able to work something out from this one.

Verdict: Fail

Final Thoughts

Out of the 6 goals, I've cleared 4 for now while I still have work to do to improve the other 2 goals.

Let's see what 2nd half of the year might brings us. I am already expecting to announce some good news pretty soon, but we'll see by then :)

What about you? How does your 1st half goals fare?

Friday, June 3, 2016

What People Misunderstood About Financial Independence - Part 2

Contrary to popular belief, you don't have to have a degree in economics or finance in order to achieve financial independence. There are a lot of courses out there that sells on scheme on how to get rich quickly but they might not be feasible to most people. You'll be surprised to learn that obtaining financial independence is easier than it looks but most people are not willing to spend an effort on it.

In my previous post, I wrote on a story of what I did during one of the weekends where our family went to the neighboring country to purchase some milk powders and diapers. By doing so, we are able to save as much as $50/month. As expected, there will be some people who applaud while others who scoff at what we were doing. The amount of savings amounted to about 1.7% of our monthly expenses so you can see that they are relatively immaterial. Still, every savings count at this point of wealth accumulation in our journey.

A great sage once said: "Never look down on money, not even trivial ones, unless there's money on the floor. That is one sure path to financial independence."


Today, I went to a survey conducted from a research house. The timing of the survey was after office hours, so while everyone was having a drink on a Friday night, I chose to spend my Friday evening attending the 2 hours survey, earning a reward of $150. While I can't disclose the specifics on the survey conducted, it is a pretty fun session involving psychology. We even had a 30 min yoga mind relaxing session and had to write our thoughts thereafter. That was it. These side income of $150 earned translates to about 5% of our monthly expenses.

"Expanding your earning horizon will help accelerate your accumulation towards financial independence."

Approach To Getting Richer Everyday

We often hear stories that goes like this:

Person A - Earning great income but having poor savings rate because of his high running maintenance of his various expenses.

Person B - A Saver who scrimp and thrifty on things but never really have the chance to look at earning more.

Income > Expenses = Financial Independence

Many people who are pursuing their own path to financial independence often focuses on one but not the other. Perhaps, we should be thinking about getting the best out of person A and B, i.e earning more income while reducing expenses both at the same time.

In the wealth accumulation phase, we should look for ways to allow us to earn more income, either by improving human capital to earn more salary, look for ways to earn a side income and/or investing in assets which will yield an income. On the same manner, we should look for ways to reduce our expenses, either through cutting unnecessary discretionary spending, using credit card for promotions and/or saving on items when you can buy cheaper elsewhere. Small amount goes bigger along the way. That's the reality of life.

Before we can transform our wealth from poor to rich, we've got to transform our spirit from rich to richer. The habits of doing so is itself an education. It fosters every virtue, teaches self restraint, cultivates a sense of order, trains to foresight and broadens the mind. The habits of doing so will stay with us for life and that's when we truly earned the rights to claim financial independence.