Thursday, August 30, 2018

33rd Birthday Post - Officially 2 Years To Countdown

It's been a tradition for me to journal my birthday every year to see where I am coming up short at so I can plan on something to patch up if necessary.

This year is no different and the first thing when I woke up this morning, I was greeted by a lovely birthday kiss cheek from my wife and 2 kids and I quickly realized how much I've grown up to where I am today.

The past years of the edition can be found here:

32nd Birthday Edition - A Year of Milestones

30th Birthday - Officially The Big 3 Is Here

29th Birthday Edition - What's The Next Target?

28th Birthday Edition - What's The Next Target?

27th Birthday Edition - First Edition

I took leave from work today so I really enjoyed the morning when I wake up, strolled to the dining table, ate breakfast with my younger boy and just sniffing around what's the real morning aura smells like.

That's when I also took the time to ponder on where I am in terms of the financial independence journey to see what I can come up with on something that falls short.

It's officially 2 years to the countdown to the Grand 35 years old, a goal right from the start of this blog which I had set for myself some 8 years ago. If we count them by days, that's officially 730 days countdown to the wire. I am really excited to see the days getting closer as we prepared and are ready for this very eventful day to come ahead.


Since this is technically a finance blog, the first proper thing to have a quick check is on the finances part.

Last year was a huge milestone as I hit both the $500k and $600k mark as market goes rampant but that means it's going to be a difficult year to replicate such achievement.

At the very same day today of last year, my portfolio managed to end up at the front range of $600k and today a year later I am looking at the tail range of the $600k, which means not much improvement at all this year. Most of the increases are still due to capital injection as my returns are still struggling this year as the Singapore market goes really weak, hence nothing to contribute about.

Still, I am pretty confident that I'll hit $700k by next few months which means I can start to think about the next milestone ahead. The portfolio needs to churn out returns in order to have it boost up to $1m in 2 years time, which is my long term target.

Based on a quick envelope method, that would mean I need $40k/year of capital injection and 15% of returns each year until 2020.

The capital injection would be a lot easier to achieve (assuming I still have a job until then) since there would be dividends and also savings from the job I'm working at.

The returns are another story though and I'll have to think of something to get those kind of returns. The Singapore market has been in rather poor territory so far and it doesn't make things easier.

Birthday Celebration

Now that the technical part is over, here comes the more fun parts.

We had an appointment schedule in the morning to the embassy to renew my older son's passport after which we ended up at Japan Town's at Wisma Atria (courtesy of Starhill Global Reit) to have a simple lunch ramen, which tastes incredibly delicious to my surprise.

Then, we went over to the takashimaya to grab a small cake which we celebrated at home.

It was simple yet blissful feeling to have my family celebrating it with me.

Ohana Familia

The birthday event is probably a good excuse to do more of things like that, and in time to come will hopefully make this a permanent event every single day.

Thanks for reading.

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Saturday, August 25, 2018

How Much Budget Do We Allocate For The Weekends?

It’s been a while since the last time I wrote something about personal finance so I think it’s an appropriate time to revisit.

The budgeting concept has been very strictly enforced in my wife and I practice as we know the inportance of keeping things tight within the household budget.

The idea is to review each of the category at appropriate intervals regularly and instill a habit to follow them throughout. By the time we get to the stage of financial independence, we hope to be master of our own spending pattern.

This week topic is on the spending budget that our household allocate for the weekends.

In our household of 4, including the two children, we strive to keep a budget spending of $200 for the weekends, which means a hundred each for the Saturday and Sunday.

Our patterns for the weekend usually revolves around these activities most of the time:


We start off with the transport.

We do not own a car as we believe our spending will shoot up considerably and possibly delay our path to early financial independence.

In the past, this was a straightforward choice when we have Uber or Grab offering massive discounts that enable us to only spend a few bucks hailing them. Nowdays, there are much lesser discounts and the fares are pretty much comparable to taxis which can add up the spending in this category if used pretty often.

As much as possible, we are trying to cut down on this category because we believe this is the least importance of activity that can add value to our day. As much as possible, we rely nowadays on public transportation such as bus and train which kept our transportation spending to the minimal. This includes places both near and far for as long as they are within the accessible areas (less than 3 transfers).

The idea is simple - If we have to take taxis to places then our allocation of the budget will be lesser for the other activities.


We used to allocate the heaviest onto this category in the past but since we have kids we pushed down a lot on this. This is because restaurants charged diners for their ambience (though does not look evident) and with two kids who can’t keep still, it’s mostly just a waste of money dining in a restaurant with a normal standard quality of food and rushing.

Nowadays, we mostly settled down on food courts or value for money restaurants such as Saizeria, a few Zhir Char places and a few Ramen places which offer really solid and cheap quality food. Best, most of these places either dont charge us service charge or gst or both.

Again, the idea is if we spend our allocation on this then we’ll have to keep others down to meet the budget.


Both my wife and I don’t do that much shopping.

My wife bought most of her stuff at Taobao while I had my last replenishment in our BKK trip a couple years ago. We are really not that interested to purchase any sort of shopping for clothes and shoes and bags and were mostly only doing eye window shopping.

Most of the time, our shopping revolves around things that we bought for the kids, either new hats or shoes or new exercise books for the kids to draw upon. Reading books are mostly frequented by borrowing from the national library so that’s another tick off the box.

Indoor Playground / Zoo / Animal Farm / Sentosa

Every once in a while, we try to mix things up by booking activites that would excite the kids.

This includes going to indoor playground or other outside activities such as the aquarium or animal farm to get them to interact with the animals and the other kids.

These activites can add up to be very pricey especially considering we are two children with three adults for entrance fees (we usually bring over our helper along).


Events include birthday or anniversary actvities that are infrequent in nature but keep a very important part as part of our memory so we want to treasure it.

Once in a while, we have our parents coming over to town and we have to bring them to proper places to dine (not food courts!). Once this happens, our budget for the weekends are usually busted so we can forget about allocating them to the other activities. Still, we just need to plan things well and keep them in rotation so things don’t fall apart.

Final Thoughts

This is just a quick summary of how our household are managing and allocating our budget for the weekend.

The goal is not to minimize the budget just by staying at home and let weekends pass on its own but rather through proper planning we want to make it a habit to be cost mindful yet at the same time maximize the value of the $200 we have for the two-day weekend.

What about you readers? How would you try to allocate your spending to the fullest yet be most cost mindful?

Thanks for reading.

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Tuesday, August 21, 2018

Recent Action - Sasseur Reit

I managed to squeeze in another purchase this month by accumulating a new Reit in my portfolio, with the addition of Sasseur Reit which I purchased for $0.705 today.

The idea bends well with the objective of the portfolio, which is to go in the direction of more to the yield over time.

Sasseur Reit announced their 2nd quarter results two weeks ago and had recently gone ex-dividend, so I was glad that I was able to get them today.

Total portfolio sales for the announced period from 28 Mar to 30 Jun 2018 was 8.8% ahead of the IPO projection.

This resulted in rental income from the Entrusted Management Agreements (EMA) that are 3% higher than the forecast while this lifted DPU to be also 4.6% higher.

The outperformance in all of the 4 outlets was expected from the IPO projection, given the way they structure the financial engineering deal with the EMA.

Unlike other conventional Reits like CMT or Starhill which typically focuses on rental income growth and rental reversion as measures of operating performance, the sales growth derived from the outlet malls would be a closer proxy of its portfolio performance. The EMA rental income comprises of both fixed component which has a natural 3% inflationary step up and a variable component pegged to sales.

If you still recall the prospectus, the EMA effectively acts as an income support over the next two financial years (FY18 and FY19) to protect the downside while the sponsor works on providing management expertise to run the outlets on master leases model. The hope is then that the sales variable portion and growth will eventually takes over after the 2 years, the income support will get lifted away and the Reits can run on a sustainable basis. Based on their first quarterly results, it does look promising.

The risk will still be there though without the income support but there's probably enough time to monitor and evaluate closer to the deal before the 2 years income support is up.

Meanwhile, it's 8.4% yield at this price over the next 2 years to enjoy first.

Thanks for reading.

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Saturday, August 18, 2018

"Aug 18" - SG Transactions & Portfolio Update"

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Frasers Logistic Trust
Starhill Reit
Far East Hospitality Trust

CFD Leverage @ 3.2%

Net Gearing: 0.018x

Net Total


August was a very good month for the portfolio.

While there was ongoing market turbulent from the stock market that causes the market to move sideways, long term investors should take stride that businesses operate as per normal and continue to perform.

This was also a month where many of the companies dish out interim dividends so that's another solid capital injection into the portfolio as and when I've got the capital to do so. Keeping it as cash is such a waste in my opinion when the market doesn't look overvalued at the moment and yield curve is not yet at their inverted critical point hence opportunities will still be there.

On the health side, it wasn't so good from my side.

I fell ill for more than a week due to cold and flu which further aggravated due to infection and I had to be observed by the A&E. Then, I had a migraine headache for a few days and had to lie low for a couple more days. I can feel the health deteriorating as I age these few years so it is also something I have to watch out more.

Portfolio Updates

For this month updates, I had injected a bit more capital to accumulate more Vicom before it goes ex-dividend which further substantiate my position in Vicom in first place. In today's market where volatility is prevalent, Vicom provided me with both yield, growth and comfort as quality equity bond alike in nature.

I had also added more Singtel when it comes crashing down again to my comfort level after they announce their quarterly result which we all know it's going to be rather muted. I've also had the opportunity to add them using my leverage account which I had blogged earlier here. I've made the leverage purposefully to be very conservative in nature so they serve a keep check purpose on the emotional part. It'll be one of my main tools coming into the next recession.

You can view all the transactions here.

Project Transportation (Cost-Saving)

I initiated this project transportation (cost-saving) in an attempt to reduce our reliance on Grab and taxis since last month.

It has been a very successful project as our family embarked on more public transportation almost everywhere we go to despite some bits of complaints from the children that they had to walk a bit more these days.

In my opinion, the public transportation here is still so much convenient and it wasn't a hassle at all to bring the kids out in public transport and we can save the taxi's money for every other thing else.

Net Worth Portfolio

The portfolio has increased from the previous month of $673,590 to $685,720 this month (+1.76% month on month; +10.6% year on year).

This is also the seventh time in eight months that the portfolio has broken a new all time high! Again!

This is very comforting knowing that the market has pretty much moved sideways this year and we can still survive on this kind of market volatility.

I know that if we keep doing this over the next couple of years, we'd be able to meet our objectives.

Family Portfolio

This is to update the part of the family's portfolio which I helped to manage together with mine, albeit separately.

The goal is to have dividends reinvested over time and watch the portfolio grow as they compound it over a longer number of years.

1.) Wife's Portfolio

Mrs. B is aggressively growing her portfolio!

Apart from adding her own separate gold portfolio which she manage separately, she has injected quite a bit from her monthly contribution which I added 300 shares for Ho Bee Land for her.

I also still owe her around $750 ($500 capital injection + $250 dividends) which I will allocate over the next week into her portfolio. To be updated again.  

Bought 1,000 share of Sasseur Reit (on 21st Aug).

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Sasseur Reit
Ho Bee Land
Total SGD

2.) Baby B1.0 Portfolio (Age: 4 years and 4 months)

I still owe about $200 worth of dividends which I will also allocate next week when I have the opportunity to do so.

Otherwise, not much changes from the current one.
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Total SGD

3.) Baby B2.0 Portfolio (Age: 1 year and 7 months)

I still owe about $150 worth of dividends which I will also allocate next week when I have the opportunity to do so.

Otherwise, not much changes from the current one.

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Total SGD

4.) Mum's Portfolio

I still owe about $150 worth of dividends which I will also allocate next week when I have the opportunity to do so.

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Total SGD

Final Thoughts

Some of you might know that I will be taking on a new job starting next month which unfortunately limits the likes of open sharing to the portfolio as I will have to declare my buying and selling to the compliance team.

At this point, I do not know how hassle it may take to do that and this I will have to only know when I am inside and have settled down quite a bit more.

As a result of this, this will probably be my last sharing on the open transactions and portfolio as I will try to keep this quiet, private and low profile until I know what happens next.

There are still chance that I will still share but it will be likely be more realistic in the quarterly or semi-annual timeline rather than what I am doing now, which is to share it on a monthly basis. But all of this might change after I find out more when I am settled inside.

My strategy will not change dramatically though as I continue to go for early financial independence and dividend investing focused over the next 2 years or so and until then I'll blog about company results, thought and any other thing else apart from revealing my own portfolio.

Thanks for reading.

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Wednesday, August 8, 2018

Upping Your Game Level - With Margin Financing and CFD

In the spirit of supporting my good friend's Chris in his next upcoming talk on achieving financial independence with Reits, I have decided to do a blogpost on it which I've been wanting to do it but have very little time and interests in the past to do it.

If you still have not registered for Chris talk, you can register it here.

Margin Financing or CFD

In layman terms, margin financing or CFD simply means leveraging by borrowing money to build your portfolio in the hope that you will reap greater rewards.

There's a few margin financing services out there you can find. 

Maybank is one of them with the better ones, offering at 2.88% for Reits and some other Grade A stocks that they define, at a maximum of 3.5x leverage level on the amount of cash pledged.

For me, I have an account opened for CFD with Cityindex the past couple of years, which currently offers at 3.2% and able to leverage a maximum of 10x (trust me, you won't want/need this much leverage).

Typically, most margin calls will happen at < 140% based on the margin ratio of the total value of your shares worth divided by the amount of loan that you are undertaking.

In this post, we'll try to find the sweet spot by going through a few examples.

Example 1 - Purchase Singtel @ $3.20 with 2.5x leverage @ 3.2% financing

Let's assume you find Singtel price today at $3.20 very enticing but yet you have only $10,000 worth of cash to utilize.

With the cash you have, you are only able to purchase a total of 3,100 Singtel shares. Assuming they maintained their current dividend payout at $0.175/share, your annual dividend received would have been at $542.

Now, if you decide to venture a bit of a risk and go for 2.5x leverage on the amount of cash pledged, that will enable you to leverage up to $25,000 as loan, you would be able to purchase worth of 10,900 Singtel shares. Assuming they maintained the current dividend payout of $0.175/share, your annual dividend received would have been at $1,907. After netting off the interest paid (3.2% x $25,000) of $800, you would still receive a net dividend amount of $1,107, which is almost double the amount if you did not do any form of leveraging.

This is assuming price stays constant throughout.

Small Correction Scenario

Let's give a bit of variation to make the case interesting.

Let's assume there is a small correction in the market and the share price of Singtel drops from $3.20 to $3.00, a drop of about 6.5%.

If you are buying on full cash, then it'll just be a temporary paper loss for you, unless you decide to cash out. If you think Singtel is worth higher than what the market perceives, then all you need to do is to hold on and wait for the rebound to take place.

However, if you are buying this on the margin scenario above, then your value of Singtel is now worth $32,700.

Since $32,700 / $25,000 = 131%, which is less than the <140% margin ratio, you would get a margin call to top up the difference back.

This is usually when investors are screwed, because they are either caught by surprise, do not have extra cash, or forced to sell off their holdings at the loss (no more paper loss at this point).

Example 2 - Purchase Singtel @ $3.20 with 1.5x leverage @ 3.2% financing

What happen if we lower down the leverage to 1.5x in this example.

This means, using $10,000 as pledged, we borrow a further $15,000 to purchase at 3.2% interest.

This would enable us to purchase 7,800 Singtel shares worth at $3.20.

Should a small correction happens and Singtel price drops to $3.00, your shares are now worth $23,400 and your margin ratio would be $23,400 / $15,000 = 1.56, giving you a nice cushion of buffer to allow rebounds to happen.

In this scenario, your Singtel share price would need to fall below $2.69 before you get your margin call and the need for top up.

Recession Scenario

In a recession type of scenario, it is likely that we will see Singtel breaks below $2.69 and thus you are likely to also face a margin call, which happens a lot during a major crisis in the past.

Using the GFC as a benchmark, we have seen Singtel drops as low as $1.99, which would mean your margin ratio would have been at $15,522 / $15,000 = 103%.

Example 3 - Purchase Singtel @ $3.20 with 0.8x leverage @ 3.2% financing

This is if you want to play very freaking safe but yet die die still wants to leverage on your capital.

Assuming you have $10,000 cash pledged as capital, and wants to borrow $8,000 as your loan, you would have 5,700 Singtel shares worth at $3.20.

Should GFC comes and your Singtel shares drop to $1.99, your shares are now worth $11,343 and your margin ratio are now worth 141%.

To me, this is the safe level, the same concept on how your Durex condom sells based on the probability level.

Of course, with 0.8x leverage, your reward is very much reduced too.

Pre-requisite Criteria

There's a few pre-requisite criteria you should have before you even want to venture into this sort of area.

First, you need to be selectively good in your stock picking.

If you suck in your selection of stocks in your current all cash portfolio, then likely is your suckness level will get multiplied in the leverage tool. If you suck in stocks selection, you'll lose out either way in your today's portfolio or in your leverage portfolio.

Second, you still need to ascertain a buy with some level of margin of safety.

The above example we used earlier is buying Singtel at the current today closing price of $3.20. If you had bought Singtel at a much higher price (say $3.90) using leverage, then likely not even 0.8x leverage will give you enough comfort.

If you use the 0.8x leverage method during the peak of the financial crisis, then likely your safety level is even higher than the Durex condom promise they can give you.

Third, my criteria is to buy companies that pays out at least 3.2% worth of dividend yield to minimally covers the interest track I am paying. This ties back to the type of stock I am interested in and also the valuation level based on the second point.

Last but not least, the mental needs to work together with you.

There'll be lots of shit stirred from the news and your friends and you just need to work out the maths to ensure this works out to your advantage.

After all, we are all leveraging already when we bought our home purchase right?

Thanks for reading.

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Dividend Income Updates - Q3 FY2018

I am writing this dividend update in an attempt to compile my quarterly dividend performance for the year.

The theme for this year dividend income updates will be based on my understanding of the advantage of dividend investing and that is to compound dividends for as early as we can, for as long as we live.

Time is our friend for this very same purpose.

While some may argue that dividend is not everything there is to investing, as they can be easily trumped by other factors such as the larger capital loss, dividend has played a very important part in an investor's return over the long run and therefore should not be neglected.

Kyith, in his latest article, summed up quite nicely on how the flexibility and buffer of your dividend income will help you get towards the final designated financial independence. The common consensus argument I often hear is what happens if there are recessions and the companies you own cut their dividends, won't then investors be caught off-guard with the lesser amount of dividends received?

The answer to that is quite simple.

If you are worried about cases like that, it simply means you didn't know your strategy or companies well enough to make that decision. And if that is the reason why you decide to keep a lot of warchest therein, then by the time you figured it out, you would have lost a lot of opportunity costs on the dividends you would have been receiving if you stay invested. Still, if that is what kept you mentally safe, then it’s also not wrong to do what you are comfortable with.

Therefore, my answer to that is, if the valuation of the company is good to buy and you have ascertained some margin of safety embedded inside your justification to buy, and it fits into the strategy you are going for, then just keep on buying, and keep getting that dividends every quarterly/semi-annually/annually.

We can't control the other parts we cannot control so don't bother too much about it.

Without further ado, here are the 3rd Quarter Dividend Income that the portfolio will be receiving:

CountersAmount (S$)Ex-DatePayable Date
Vicom3,809.00 13-Aug24-Aug
M13,900.00 7-Aug17-Aug
Fraser Logistics Trust1,272.00 16-May7-Aug
Singtel3,959.00 26-Jul13-Aug
Far East Hospitality Trust1,010.00 6-Aug14-Sep
Starhill Reit1,090.00 2-Aug29-Aug
Total 15,040.00

After tabulating the dividends for all my companies, the 3rd quarter dividend income came up to $15,040.

The annual dividend income so far covers 0.7x of the day to day expenses our household is incurring at the moment.

Together with the past dividends received, the portfolio has now accumulated $116,443 worth of dividends and I hope this number will keep on increasing over the next few quarters and years so it will one day become an integral part of my sustained income to live off my day to day expenses.

The tree that you are standing down under today for the shade is there today because someone once planted a seed 10 years ago.

Thanks for reading.

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