Sunday, March 31, 2019

That's It! I'm Going To Teach You How To Become Millionaire By Earning 50% Returns Annually Consistently Every Year

I've been keeping it inside my (war)-chest for a long time now.

And finally I've got to just let the cat all out of the bag today.

Retiring in Singapore demands a high level of both savings and income and this needs to be at least in the 8 digits figure. If you are short of that, you better get your way around working until retirement before thinking about the time you can do with retirement.

I mean just look at the Me & My Money Series sections over the past few weeks and you get the idea.

Folks are aiming high to become a multi-millionaire and they are stretching themselves by getting there earlier and faster.

Investing in equities has been one of the most riskiest, silliest and slowest decision an investor could ever make. I mean think about it this way. You put a large sum of capital in companies that you don't get to make decisions and then get returns that are mediocre. Sure, there are more savvy investors who has their money on multi-baggers like Tencent or Best World, but the capital they put on those multi-baggers are questionable. It's probably not as big exposure as they get with their overall returns.

Folks have been debating the past week over the SIA bonds which pay a mediocre return of 3.03%. I think folks like Financial Horse and D&S covered well in their research but as investors you should just give a read about it and then forget about putting your money in it. The return is simply too low for you to become the next millionaire on the door.

The Singapore Savings Bond (SSB) has an even lower return instrument, so we should not even get there to waste time talking about it.

Ever since I decide to take a break from my work, an article which I wrote here in detail, I've been thinking how to come up with the shortest option for investors to get to where you want to be.

And after a few weeks of racking my brain, I finally came up with materials that will promise you at least 50% annualized returns, consistently year after year.

What you get is what you see, high returns with low risk, and there's money back guarantee that will yield you zero loss should you start losing your capital overnight.

My sign-up course is $28,888 but I'm going to slash it for early bird registration to $8,888. This comes with my money back guarantee program.

I'd be teaching you ways to spot multi-baggers early and invest with confidence so you can take the largest cut to your advantage as an investor.

This is something that is unique and no one offers such program in the market currently at the moment.

Thinking of retiring early at your prime age with at least $20m in liquidity? Look no more elsewhere and start registering in the link below:

Forget about the financial blogger folks at BIGScribe who always advocate you to save, save and save.

FIRE-ing is your choice. Make it count.

And to everyone who reads it until here, hope you have a good April Fool's Day :)

For last year's April Fool's article, please find the link here if you have nothing to do during your working hours but still like to get paid.

Thanks for reading.

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Wednesday, March 27, 2019

Bukit Sembawang Estates Limited - Would You Buy When They Are Trading At Such A Steep Discount?

Bukit Sembawang Estates Limited (B61.SI) is a property holding company that is listed on the Singapore Exchange.

Bukit Sembawang started it's humble beginning as a rubber company back in 1911 before transitioned into a property developer in the 1950s.

In 1968, Bukit Sembawang was incorporated in Singapore as a public listed company focusing on property development and investment.

Bukit Sembawang is one of the pioneers company we have in Singapore and over the years they have built more than 4000 homes across different locations in Singapore.

"Homes for every generation" - is their main slogan of the company.

Cooling Measures

Like any other property developer, Bukit Sembawang is very much subject to regulatory rules and the various cooling measures the government has introduced in the past few years from 2009 to 2018 in order to relieve the heating market.

You can see that despite the various cooling measures that were being introduced, the overall trend line of the non-landed private residential continued to increase in the earlier years where the market continued to be heated.

It was not until in 2013 when the TDSR was introduced that the market continued to slow down as it becomes increasingly difficult to qualify and buy a second housing property if you still have an existing loan with your bank on your current property.

The property market slowed down during the interim before they resume their upward trend from 2017 onwards.

Source: SRX Property

Source: SRX Property
The most recently announced increase in Buyer's stamp duty in 2018 also impacted Bukit Sembawang which they had to pay a one-off $31.8m in Q318 for their outstanding units in Paterson.

They were recently granted written approval to convert the 86 units in Paterson Collection into 112 units of service apartments and in Q318 have reclassified the asset from development properties into PPE so that they are no longer subject to the extension premiums under the QC ruling.


Despite the various cooling measures introduced over the years, you can see that they are able to maintain the level of margins, with only a slight dip between 2014 and 2016.

This shows how resilient the market is, especially in relation to the higher luxury segment.

They didn't have any other SG&A costs apart from their own staff and management, so their business is pretty much how much they can sell their properties for.

A quick first glance at their free cash flow yield and it might put you at interest because of its high fcf yield at play.

You can see that their spending on capex has been rather low in recent years so almost everything that they are earning from their operative cashflow goes back to their cash line.

However, that is not a true reflective way of looking at this.

The capex portion involves any spending on their PPE, which if you see its low it means for a long time they didn't spend on buying any land bank. This could be a problem once their projects ran out some day.

However, what we didn't see here (but will see later below) is that they've been spending on enblocs on development properties which falls under the category of Operating Cashflow.

They have been quite generous with their payout in recent years, paying a high payout ratio and total dividends of 33 cents for the last 3 years (4 cents final and 29 cents special).

This is most likely due to a lack of growth opportunities in the market and so they are returning back cash to the shareholders. This should not be seen as recurring so you should not expect year on year getting the 33 cents deal.

Still, I think this is a good practice, at least we know they are not hoarding the cash pile unnecessarily.

33 cents of dividends will require them $85m, so at 40% net margins this require them to sell around $212m worth of gross sales.

In 2018 you start seeing them paring down the payout, this is because they started bidding the projects on Katong Park Towers and Makeway View, which they were awarded.

The winning tender bid wasn't cheap but I am guessing they smell opportunity for them in the market again.

This is a developer company that is known for not using leverage to buy their properties and have zero borrowings in their books.

And it's quite rare these days because we always associate property with leverage and it makes sense to use some borrowings because of the deal size and also a way to boost the ROE (given a low ROA rate on development properties).

But I guess Bukit Sembawang didn't see it as necessary.

However, in 2019, they started using borrowings, primarily because they won two tender enbloc deals for Katong Park Towers for $345m and Makeway Views for $168 and didn't have their cashflow turn fast enough as they have some accrued contract receivables on hand so they went on the borrowings to tide it down in the interim.

Investment properties are very minimal in their books and over the years there is some depreciation costs being run down so the premium spread between the current fair value and what they have on their books currently is around $17m, which translates to about 6.5 cents they can add to the NAV if they revalued or sell.


IFRS 15 is a reporting framework that is made effective from 1 January 2018 which companies are required to adopt to recognize their revenue. 

Although broadly it seems like they are just changing the timing of the revenue and costs, IFRS 15 shifts revenue recognition to a control model. 

Under this framework, Bukit Sembawang still recognizes revenue from sale of development properties and land cost of the sold units using the percentage of completion method. 

But the construction costs incurred for the sold units are no longer recognized using the percentage of completion method. Instead, the costs are recognized as and when they are incurred to the extent of the units sold. 

What this difference makes is that if the market gets heated, and most of the units are sold and cost incurred are ahead of the completion, then that will get reflected first in the book. If the units are sold only after the housing is completed, then it will not make a difference to how they were being reported in the past.


When we talk about buying in relation to the valuations on a property company, we never fail to bring up how much its share price is trading in relation to their RNAV.

The NAV stated in their annual report is not a true reflection of their asset value as most of the development costs and lands are not revalued to the market.

Buying a company less than what they are worth for has been touted for years as one of the key to value investing but we all know that all developers today in the market are trading at a steep discount to their RNAV so there are no more competitive advantage in trying to get a developer company at a discount.

Maybank came up with this guide of what they think their RNAV is which I thought is a good indicators for reference.

For instance, when they bought Makeway View for $168m in Mar 2018 at around $1,600 psf in the Newton district area, they are assuming that they can build up a higher number of units with newer buildings in the next 4-5 years. Tearing down the current place takes 2 years and rebuilding it again will take another 2 years. In terms of costs, tearing down and construction costs will probably add another $400 to $500 psf easily so that means in order to sell at a margins they are currently selling, they would have priced it at around $2,600 psf in 4 to 5 years time.

This means the RNAV they are putting up is for some distance in the future and it doesn't make sense to place that value at today's current situation. It might skew the way investors look at things when they use the Price to RNAV when they buy today.

The same goes for other development like Katong Park Towers which they placed at $2,200 psf assumptions.

Final Thoughts

There are a few things here that we need to watch out.

First, the RNAV is most likely a value that is more realistic some time in the future so using it as an indicator to buy today is theoretically incorrect because they are not being discounted back to today's present value.

The RNAV at today's present value is likely to be lower.

Second, the nature of the property market is such that it is very regulatory and macro sensitive event, so it can change the perspective of the true value of the assets very quickly in the RNAV's calculation.

Third, the nature of their business is also very project based, which means they would have to fight and tender for potential land banks (which is scarce these days) or enbloc deals from their fellow competitors.

We talk a lot as investors how difficult it is to time the market but the nature of the business for Bukit Sembawang itself is timing the market.

If they wait on the sidelines for the best available deals they may ended up being priced away from what they are doing and they may run out of projects to deal with at some point.

The recurring acquisitions on projects they have to time and tender is a hard one to get it right in the face of uncertainties and competitions.

On the good side, the management are all very experienced folks in this industry and they know the environment much better than we do. So if you put your money down you are hoping the management will continue their good work and don't make drastic mistakes.

They have also shown that they are willing to return excess cash back to shareholders if they don't need them so that's a good sign that they are not hoarding the cash unnecessarily.

Overall, I think given the nature of the business, it's easier to be on the sidelines and watch the cashflow and then enter when you think they are likely to dish out good special dividends.

For a longer term play, the risk of holding is still imminent given the uncertainties in the sector out there.

Thanks for reading.

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Saturday, March 23, 2019

Is Genting Singapore Ltd (G13.SI) Worth A Buy At This Point?

Genting Singapore Ltd (G13.SI) is a company that is publicly listed on the Main Board of the Singapore Exchange Securities Trading Limited on 12th December 2005 and has been a constituent of the FTSE Straits Times Index, a.k.a blue chip status ever since.

Their core business involves gaming and integrated resort development across Singapore, Australia, Malaysia, Philippines and United Kingdom.

One of their flagship includes our very own major icon in Singapore - The Resorts World Sentosa (RWS) which is one of the largest integrated destination resorts in Asia and boasts world class attractions such as the casino, hotel resort, Universal Studios, S.E.A Aquarium, Adventure Cove Park and many more attractions.

RWS has been named “Best Integrated Resort” since 2011 for eight consecutive years at the TTG Travel Awards which recognises the best of Asia-Pacific’s travel industry.

Rewinding back the Winning History Bid of "RWS"

On 10th Oct 2006, Genting International and Star Cruise Ltd consortium submitted a S$5.2 billion bid for the RWS integrated resort, which was successfully awarded to them.

The commencement of the operations only started in 2010, so there are 4 years work in progress between 2006 and 2010 where they had to incur large amount of capex each year.

This was after their unsuccessful bid made to the Marina Bay integrated resorts in 2005, which was subsequently awarded to Marina Bay Sands and operated by LVS today.


Casino, like most other industries, faces a cyclical demand as well, which can be due to competition, location, tourist arrival and regulatory requirement. 

For instance, the casino regulation in Singapore requires locals and SPRs to pay a levy before being allowed to enter. This means most of the demand will come in from external and tourists arrivals will have an impact on the revenue.

The key market is obviously the Chinese. They've got the volume and the money to spend.

For the past decade, their revenue has ranged from between the $2.5b to $3.2b range while its gross margin has stabled at about an average of 40%.

The exception is during 2015, where there were a drop in the VIP demand in 2015 and some issues with the collectibles which pushes the gross margin to its record low.

They came up with some credit extension strategy in a boost to pull demand for the VIP segment back and you can see volume coming back up from 2017 onwards. AR Collectibles have increased and they have taken the risk to let loose their credits more than previously. The key is to watch the bad debts but we can only check once the Annual Report is out.

VIP market share is up 47% in FY18, from 37% in FY17 and VIP volumes grew 21% with a better win rate of 3.03% in FY18 vs 2.93% in FY17. That is the small amount of win-rate the casino needs on a large amount of volume coming in.

Out of the $2.5b in revenue, VIP Gross Gaming Revenue (GGR) contributed $1b, up 24.9% from $827m in previous year. You can see how important this segment is to Genting.

Finance costs has a correlation with the debts they have (more on it below) so you can see as they tried to pare down the debts the financing costs will drop accordingly.

The company demonstrates a strong cash flow generating ability due to its short working capital requirement and nature of services they offer.

They spent a very low amount of maintenance capex each year, visibly very low on property related because the depreciation is almost double the capex amount in each year, so most of it should be related to small renovation or aei maintenance.

FCF Above $1b in the last 4 years

You can see the past 4 years the fcf has actually exceeded $1b per year.

This means for every 5 years of operations, they can actually buy up one RWS resort. The ROI is crazy and you can start to see why casino operations are so lucrative to all bidders. They'd rather bid higher and win it than play safer but not win it.

It's a lucrative business with high capex upfront but low maintenance later, and based on my friend in the industry it's not too difficult to get the license renewed once they've won the earlier bid.

FCF Yield is at 8.3% currently based on the share price of $1.03.

Over the past few years, the management has rewarded investors well by increasing the dividends payout from 1 cents in 2014 to 1.5 cents in 2015 then 3 cents in 2016 and 3.5 cents from 2017 onwards.

They can well afford to pay out more and I foresee them increasing the payout once the results of the Japan bid is over and there are more certainty of the situation. 

In terms of the balance sheet, they have never looked better and healthier than they were since they started listing publicly.

Cash has ramped up to more than $4b while debt is close to $1b now, which translates to a net cash of about $3.3b.

Company back in net cash territory in 2015

They have also redeemed the perpetual bonds which they issued in 2012 and was redeemed back in 2016 for an amount of $2.3b. I have included the perpetual bonds to be more conservative in the calculation even though they are treated as an equity.

Future Growth Story

The future growth story of Genting lies upon their expansion into the Japan market and the successful bidding for the Japan casino integrated resorts, which are expected to be in three potential areas of Yokohama, Osaka and Hokkaido.

That's essentially where most of the Chinese are and also is in closer proximity to the Korean peninsula.

So far, they have also clarified and there are also no rules from their government to ban locals from entering the casino, unlike the Koreans and in Singapore, where locals are banned from entering and has to pay a hefty levy just to enter.

With the recent bid up, Genting has beefed up its subsidiary, headcount and opened offices in various parts of Japan to get ready for the bidding which the RFQ is expected to be in the second half of FY19. The award is most likely be announced in FY20.

When Is The Best Time To Enter?

The valuations is attractive now so entering now won't be an extremely disastrous call.

It gives investors a dividend of about 3.5% while waiting for the big growth story to happen.

So we draw up a few options available.

If they are successfully awarded, we can expect the share price to price in the good news and the share price should move up quite a bit from here. Perhaps getting in right after the news to ride the trend up is one option.

If awarded, I do not expect dividends to be increased for the next 4 years as they will ramp up productions of capex which can range in the same level of $5b they won the bid for the RWS Singapore.

Free cash flow growth should materialize as a longer term play once the new integrated resorts are ready and then dividends should increase accordingly.

This is the thesis for a long term play.

If they are not awarded, we can expect market to punish the share price and the fcf yield might ramp up closer to 10% (fcf yield is at 8.3% right now). With such strong balance sheet and fcf, it is likely they will then use the excess to increase the dividends payout and yield. 

This is my preferred and better scenario, for someone who's sitting on the fence.

4 years is a long time until the resort is fully operational. Until then, who knows we might face a recession and everything might get affected.

The best scenario for investors is still a thesis play where Genting gets awarded, the company goes back into net debt position because of capex and opex, recessions set in which pushes share price down, FCF yield ramp up to above 10%, and then potentially 4 years later the forward FCF yield goes up to a potential 15%.

Thanks for reading.

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Wednesday, March 20, 2019

Mar 19 - Portfolio & Networth Update

No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
Starhill Reit
Netlink Trust
First Reit
Manulife Reit
Hobee Land


Earnings season is finally over so we are back to this muted season where the share price is just gyrating along with the overall trend of the market.

I've made a few changes to the portfolio with the objective to get a higher yield and a lower risk or one of the combination of the two.

The portfolio is constructed to capture both defensive profiles and stability of the cashflow, as dividends remain an integral part of my life now, especially given my "loss of income" in the next few months.

So first things first on the divestments. 

I've divested two of my Reits - Fraser Logistics Trust and Far East Hospitality Trust, both yielding 6.2% and 6% respectively which I feel valuations have stretched based on their historical perspectives. 

I've blogged previously on FLT divestment (Link Here) which you can find here and I feel it'll be a good holding in the long run, I just need some retracement back to the valuations where I can load them back.

The same goes for Far East Hospitality Trust where the yield is now back to 6% and with a gearing near 40%, there might be chances to load this lower. Operationally it has done well and should continue the trend in the next quarter so chances are forward yield should be higher than 6% but FEHT has a history of trending between the 60s and 67s so we'll see if I can get it back near 60s at some time in the future.

To replace the loss of income from these 2 divestment, I went to add Netlink Trust at 80 cents using the proceeds from the divestment.

Netlink is an interesting business model in my view because the moat looks defensive with the fibre business they are targeting on the Residential and the Non-Residential and how they have forecasted demand on the expansion of the new housing estates in the next few years to come. 

The 5G network is always a black box in question and we don’t know yet if associating it with cannibalize the use of the fibre business and how much folks at home will drop fibre in favour of the 5G network. 

In terms of pricing, Netlink is being regulated by IMDA using the Regulatory Asset Base (RAB) framework, which allows NLT to recover using the following components: a.) Return of Capital (depreciation) b.) Return on Capital (Interest) and c. ) Operating expenses. 

Netlink generated about slightly less than $60m in Cash Flow From Operations each quarter, which translates to about $240m each year. Out of that, the bulk of $40m each quarter comes from the regulatory depreciation while incremental capex is between $18m to $20m. Regulatory depreciation is based upon 25 years of accelerating method for the fibre and 35 years for the ducts and manholes, though management has argued that the actual useful lives can stretch longer than that. 

In essence, from a cashflow point of view, they keep investing in the incremental capex each year, and the cashflow and dividends investors get came out of the depreciation as a return of your capital invested. While this concern may seem sound, the fact that the regulatory pricing governs the return on capital means the revenue is protected to give investors sufficient roi yield at the end of the day. 

The only worry is if the actual useful lives of the asset goes obsolete faster than the regulated depreciation or because there’s some new technology that they have to invest in the new capex, then the whole cashflow story becomes a concern. But I think this might be a longer concern story in the next 10 years or so once we get closer to that rather than now.

The other purchase I've made is in relation to First Reit. I've bought 152,000 shares at a price of $0.995.

First Reit is a tricky one because first they have the Lippo Karawaci issue due to their Meikarta project and second they have the lease coming up in 2021 on the renewal which brings about uncertainty.

The LK story seems to be a bit overblown because the Group holds sufficiently large amount of assets worldwide that it would be easy for them to either divest or use them as collateral to borrow more debt to smoothen out their cashflow.

The worry is if they'd do what they did to LMIRT by divesting the assets to them at a dilutive yield. Looking at the deal for the Lippo Mall Puri Indah, it appears they are still providing support so the yield is reasonably high enough.

Since they have raised equity rights, and will have enough cashflow to pay their obligations, I think this issue is pretty much closed for now.

The lease renewal that is up in 2021 will continue to be an overhang for now so I'll monitor the situation closer to it by then.

This will be a short term play for now, with monitoring on how the situation might turns out.

At the current price, they are yielding 8.7% which gives a fair risk reward flavor to investors.

Networth Update

The portfolio continued to do well, spurred by the defensive profiles of companies and Reits in the portfolio and also some of the divestment.

It increases from the previous month of $876,954 to $900,096 this month (+2.6% month on month; +39.7% year on year).

This is the 15th consecutive record month that the portfolio has broken a new high.

This is also the first time the portfolio has hit a high of above $900k.

From the first quarter (Q1FY19) returns review, it has so far doing better than the STI benchmark, outperforming it by about 5% in the interim.

This is partly due to the lackluster performance of the STI which has been hovering in the 3200 range since the start of the year.

How's your first quarter been so far with the market gyrating along?

Are you expecting any major bull or crash till the end of the year?

Thanks for reading.

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How Much of My Monthly Income Should Go To My Expenses, Savings and Investments?

I received an email from a reader who has just started working about a year in his corporate career and he wrote to me asking the optimal allocation he should be allocating his monthly income to his Expenses, Savings and Investments.

This is hard to answer because first I do not know him well enough to give a detailed answer and second his circumstances and priorities may differ from one person to another.

So I'll try to give my best answer as much as possible and will have to assume a few things from him. I assume he is asking me because he read my article recently and would like to know what it takes to achieve Financial Independence as early as he could possibly.

The Generic Google Answer

If he or anyone has tried to Google and look for the genericly designed common answer on the Internet, it would advocate him to save 60% on his expenses, 30% on his savings or emergency funds and 10% on his investment.

The main reason for the high percentage allocated on the expenses is because I think the writer would have assumed most people start on a low base income, probably in the range of $1.8k to $2.5k. So when you add all the expenses including insurance premium, parents allowance, transportation, utilities, food and groceries and other discretionary items such as travel, it probably adds up to that 60%.

The rest of the 30% goes to Savings, which the goal is to build up emergency funds of up to 6 months worth of expenses. The idea to having an emergency fund is to cater to events that are unforeseeable and will have to prepare for it. For example, you might get terminated from your job because the company is reducing manpower and you might ended up having to survive a few months without an income. 

The last 10% goes to Investment, which is supposedly money that helps you grow your wealth so you can start allocating more to other division of your life jar.

My Personal Take

In my opinion, you've got to make your money works hard in all aspects regardless of whether they are being allocated to your Expenses, Savings or Investment.

If they are being allocated mostly to discretionary expenses for instance, make sure that is because you wanted to create a lasting memory with your friends or families. If you want to use the money to buy a bag, make sure that it gives you the happiness you are seeking for.

For money that is being allocated to emergency funds, make sure you find the best avenue to park your funds so they are liquid and earn some returns for you meanwhile. A good example for this would be SSB, or a high quality corporate bonds. Do not assume because they are for emergency funds you can leave them there lying around without work to do.

For investment, make sure you go for good quality companies that can grow and multiple your money positively. There are many instances where investors put their hard earned money in companies that make them suffer losses. 

Obviously with the least percentage being allocated to the investment pot, your wealth won't grow and compound as fast as there are other expenses bomb that tied you down.

My personal take is that since the reader is young and I assume he doesn't has any financial commitment yet at this point (financial commitments will only grow as he proceeds to his 30s later on), he should be trying to increase his investment pot as much as possible and make it a priority at his young age.

Sure, there are risks of not having sufficient emergency funds at this point, but given his lesser commitment because of his young age, I feel that tying down too much on his emergency funds could be slowing him down. But its a matter of balancing between the defensive and offensive and only he knows best what his objective is and what's his character is like.

Having one too much over another will not do him any good so he has to choose what's best for him.

I advocate a 40% expenses, 5% savings and 55% investments but thats because my objective is to be financially independent before the age of 35, so I have to take on bigger head and tail risks.

On chronological order, my priority was to increase my income base, tighten my basic expenses and needs and grow my investment pot, and this can differ from person to person. 

If the reader is a prudent character by nature and has a different objective than mine then he will not fit into what I did. 

And that is fine too because we are in a life of marathon and building our wealth is just one aspect, there are other priorities such as health and memories which can create a more lasting impact in our lives. 

I hope this helps the reader think about some perspectives on how he can allocate his funds accordingly to what suits him best. 

Monday, March 18, 2019

Starhill Reit - New Master Tenancy Agreements & Asset Enhancement Initiatives For Starhill Gallery

Starhill Reit announces two news today which I have earlier anticipated after management hinted at the need for an AEI on their Malaysia properties.

The first is the renewal of the Master Tenancy Agreements for both the Malaysian properties - Starhill Gallery and Lot 10 Property.

The 2 properties were acquired in 2010 and were leased for 9 years to master tenant, Katagreen Development Sdn Bhd, an indirect wholly-owned subsidiary of YTL Corporation Berhad, which is the sponsor for Starhill Reit.

The tenancy agreement expire is in 2019 this year.

The new master tenancy agreement includes a long tenures of 19.5 years for the Starhill Gallery and 9 years for the Lot 10 Property, with a rental step-ups every 3 years from the 4th year till lease expiry.

This represents an annual weighted average increase of about 1.5% per annum if we spread it across.

The new WALE will improve from 5.7 years and 4.2 years respectively to 9.8 years and 6.4 years.

This will provide the much needed stability over the next course of years to come.

The above agreement is contingent upon the Asset Enhancement Initiatives (AEI) works required to be done on their Starhill Gallery, which includes conversion of integrated development on their retail and hotel concept of the upper three floors to develop it into hotel rooms.

The AEI works will take approximately 2 years to complete at an approximate costs of RM 175m (SGD 58m) and will be borne by Starhill Reit.

This is not a very big amount spread across the 2 years and Starhill is funding this via debt, which will increase their gearing post AEI works from 35.5% to 36.7%.

I was initially worried about the loss of income during the AEI but turns out the management will bear the disruption during this period via a rental income support and partial payment in management units.

The rent rebates will be given 6 months per year during the AEI period to mitigate the disruption, which works out to be around RM 26m per annum. Management has cited that rent rebates will continue to be given should there be delay in AEI works beyond the 2 years.

Pro-forma pre and post AEI works DPU, including taking the new master agreement is expected to remain at 4.55 cents, so the IRR looks to be offsetting one another with the lease agreement.

Overall, what investors get is a slightly higher gearing, a newer asset building and renovation and a longer lease expiry profile. 

I was initially expecting a better IRR return with a slightly lesser WALE but in all I think it works out better in our favor for longer term investors.

At the current share price of 70 cents, this works out to be 6.5% yield.

Thanks for reading.

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Mini-Retirement [Series 2]: How My Friends / Colleagues / Families React To My Decision To Take A Break

Apologies for some of the late replies for those who messaged me last week as I just got back from our family holiday trip at Hoi An late hours last night and I am still recovering today from the late night flight.

After my decision to take a temporary break away from a corporate work rat race which includes my submission for a resignation last week, I received mixed overwhelming responses from friends, colleagues and acquaintances.

Most of the responses were congratulatory messages, which resembles how rewarding this journey has turned into and a good respiratory break is well deserved after a long decade of hard slogging and saving. I think the general consensus would agree that life isn't just about getting on top one after another without having a pause about where the direction of life is going to move towards to.

As one of the quotes in the Sun Tzu Art of War advocates, the strategy may be to retreat a few steps back in order to move bigger steps ahead. That way, it gives a clearer picture onto how we want to steer our life's direction and I think it was necessary.

There were also some people who were envious of the situation.

My first immediate thought was that I hope it gives them a good motivation for them to continue carrying out and executing their plans because if they do it is a matter of time before they get to their own stages of financial independence. They should never take this as the wrong smell of envy because that's not the whole intention and neither would it benefit them in any way if they choose to think it that way.

There were also some friends who've started messaging me to discuss on a potential business collaboration in the future.

I'm humbled by the approach because like I said the whole intention of this break is to explore so I'll try to keep my mindset open to any potential good working collaboration.

For my family members, apart from my wife who knows about this, we have not really told anybody about this including our parents as we wanted to keep this a low profile information and we wanted for them to learn about this as naturally as they can.

There are two reasons for this.

First, our parents still exhibit the traditional mindset where for one to be productive, a person needs to be physically going to office in the morning and coming back home in the evening. I think this is normal because a fixed stable income is most important to the family.

Being a digital nomad typing in the computer all day without any instructions, deadlines or bosses just won't work and convince them yet.

Second, they are probably unaware of our financial situation as well as we are and we also don't want to get into the details exactly with them because we wanted to maintain a certain level of privacy.

Hence, the key here is to let time shows that we can survive these 6 months period and still doing on just fine.

So thank you once again for all the blessings that we've received from friends and colleagues and we hope to put this to a good use and update our progress further as we go and experience what's out there in the real world.

Thanks for reading.

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Monday, March 11, 2019

Mini-Retirement [Series 1]: Taking The First Leap On Sabbatical

I took a deep breath, straightened my chest, walked up to my boss and asked if he could spare me a few minutes. 

“I promise it won’t take long” I said to him as he nodded agreeing to my request. 

We couldn’t find an empty meeting rooms as we walked past a few of them and finally we had to settle down at one open empty area. 

We sat down and braced ourselves for the discussion. 

I started off by thanking him for giving me the opportunity to work in a company as one of the best bank in the world. 

However, I felt a disconnect from working at the role I am currently in, perhaps due to the nature of the tasks and hence I would like to take a break and explore other opportunities outside. 

I didn’t elaborate to him what these other opportunities outside meant because I didn’t see the need to explain the details, though in my mind I had some ideas that I am in the midst of exploring (I am not ready to reveal right now but hopefully in due time). 

My boss tried to talk me out of it but my decision was already made. 

He accepted my resignation. 

Since I have no jobs waiting for me (since my intention is to explore something outside the corporate work), we agreed that I would only leave after my replacement is onboard and after I hand over my task to the new person. 

That would roughly be over the next 2 to 3 months. 

I have no issues with that. 

If you have read my recent prelude series of articles written in the past few weeks, you would have probably guessed that I am up to something. 

I’ve made several important decisions in my life but this probably ranks as one of the top few important up there. 

Scary, bold but a necessary one at this point of my life, in my opinion. 

Yes, I’m officially taking a sabbatical from my work, with an indefinite timeline to return to corporate work. 

After working for 11 years straight in the corporate world of this rat race cycle, I decided that there needs to be a path out of this eight hour day (minimally), five days a week work cycle. 

I had experienced first-hand myself and seen some of my co-workers working in these soul-draining corporations until their 60’s and 70’s because they trusted the system we were all taught to believe in.  
At the end of their lives, what they get is a sequence accumulation of their unhappy experiences, lesser lifestyle choices, more debts and binges of complaints about how their lives are wasted. 

Knowing that, I wanted to at least give myself a chance to explore alternative options. 

Even if it turns out to be a "failure" at the end, I have at least tried and given it a shot in my life. 

This is the whole intention I had since this blog was started a decade ago – to be accountable for our own actions through the articles we write and I had to account to myself (and readers) for having skin in the game. 

The reasons why I am titling this as ‘Mini-Retirement” instead of “Retirement” are two folds. 

First, this is not a traditional retirement that many people think I will be shaking leg, couch-surfing or binge Netflix watching all day long. I am expecting to do a lot of work all many fronts – from exploring personal commitment to work to family to health to self-improvement. 

These are free roaming opportunities period I have given myself a chance to explore things I’ve been wanting to accomplish but never had the chances to do in the past. 

I am prioritizing things based on the scale of what I think as important so if I think exercise is something I’ve been lacking the time to do in the past, I wanted to use this opportunity to devote more time to it now. The same goes for my own self-improvement (for instance public speaking and communication skills, etc). 

Second, I am not na├»ve enough to think this might work out. 

I am giving myself a 6 months grace period until the end of the year to see how things progress from here. If it doesn’t work out as well as we expect or if there’s a sudden plunge in our financial conditions (though highly unlikely because we’ve done the sums!), then the decision would most likely be for me to return back to the corporate work. 

The key here is having that availability of options at the end of the day to choose to return should there be a need to, though I can understand it might be difficult to re-enter the same workforce at the same level and pay. 

So that’s the latest updates I have for now. 

I know it may sound a bit sudden, but this is a decision me and my wife have discussed and agreed and this is something we have been pondering for quite a while now. 

At some point we just have to give it a go. 

P.S: I’d be creating an exclusive page-tab on this “Mini-Retirement” articles with links here so it’s easier to navigate the articles in chronological order.

In the next few series, I would be sharing about how my families/friends/readers react to this news, how we would be funding our expenses day to day, how we intend to grow our portfolio in the next few months, the progress of my work in this “free-roaming” period, our travel explorations outside our comfort zones and many more to come. 

I'm excited to explore where this tunnel would leads us to.

Thanks for reading.

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I Had To Change My Domain Name to

Just a quick update on my new domain website, which I had to forcefully update after 10 years of using blogspot.

The new link is now:

It all started when I was recently constantly attacked by a group of spammers for my existing blogspot domain that would disallow me to post content on several social media sites such as facebook.

Blogging at blogspot has never failed to give me major problems in the past. It was only until recently when I started receiving quite a lot of bots spams on my comment pages daily which prompts social media such as facebook to regard it as violations to its community standards. 

Thanks to JR for spotting this too

To get a new domain name, I proceeded to head over to to select my preferred available domain link and ended up settling for 3foreverfinancialfreedom on a .com. 

I’ve read somewhere that .com domains are superior to others such as .org or .info but has no experience to discuss in details myself. 

Once I bought over the domain link, which costs me about $20/year, I had to register and set up in my existing blogspot. 

Here’s the step by step guide which I did: 

Step 1 - login to your BlogSpot dashboard, and head over to Settings > Basics and you will see an option which says Publishing >Blog address > + Setup a 3rd party URL for your blog.

Step 2 – Next, you need to add the domain name that you have purchased with a www prefix, and after adding the domain name, it will give two CNAME records which we will be needing in the next step.

Note: Once you have added the domain name and saved, you will see an error saying “We have not been able to verify your authority to this domain. Error 12..” and you will get the CNAME record that you need to configure.

Step 3 - Once you have these CNAME details, you will need to logon to your GoDaddy Dashboard -> Manage DNS, and input to link the 2 CNAME.

Step 4 – The first CNAME is a default which everyone is using, while the second CNAME is unique to each individual.

Key the 2 CNAME into the following fields:

Step 5 - You will also need to add the 4 IP Address into your GoDaddy DNS which is standard.

Do note to choose your record type as A when selecting.

Step 6 - Once all the updates are done, go back to your blogspot dashboard and click on "save" changes. By now, you should be able to save successfully.

Google will take care of the redirection portion, so all previous articles and links will also be redirected.

Thanks for reading.

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