Sunday, September 27, 2020

Why Are High Income Earners Struggling Too With Wealth?

An interesting article from TODAY (Link Here) shows why for the majority of people, even a highly paid career such as a pilot - they continue to struggle and face the crunch to survive when these are considered high-income earners.

The article interviews a random selection of 12 pilots, and while the sample number is considered relatively small, it gives a good indication of how numbers crunching and dire the situation is for these pilots during the pandemic.

High-Income Earners = Higher Wealth?

Many of us would think that high-income earners have a better correlation to wealth

After all, if you earn $10,000 as opposed to say $2,000, you should be much better off technically when it comes to your savings rate.... right!?

Most People Would Think Linearly That Nothing Can Go Wrong

As it turns out, this isn't necessarily the case.

From the article, one of the pilots is earning an income excess of $14,000 (including allowance) yet still struggles when the company had to force a company-wide pay cut to $6,000. Another pilot being interviewed has also admitted to being cash-strapped as his total compensations suffered a major cut down from the earlier of $23,000 to $13,000. We would think that is still a lot by most standard but when he has an obligation to pay $19,000 in his expenses the whole story is completely different.

It was easy for most of us (the bottom ladders) to assume that with that sort of income earned per month, it would have been a breeze to survive the winter. After all, basic housing, medical and food supplies don't take up that much of a pile.

But life has a way of making fun of us when we least expect.

As some of us earn more money, the potential of our savings increases. But we ended up with so many social junks that our expenses start to increase. Most people ended up with a lesser or equal number of savings rates or worst fare poorer than before.

High compensation including allowances and variable bonuses are often deceptive in nature.

They make us feel rich because we think that's where we should belong.

Welcome to the Life of Social Junk

At first, we started off with an upgrade coffee lifestyle venturing into the likes of Starbucks or Coffee Bean.

Then, we started upgrading our cars, homes, vacations, and many more of our other social lifestyle.

Earning high salaries have a way of filtrating us into a lifestyle that systematically drains each and every single drop of us, through spending more with the convenience of free x-month installments and debts.

You see your friends getting the latest gadget up on the market - Buy.

You look at your co-peers sending their kids to many different tuitions - Follow.

You look at that nice view from the top of your dream apartment - Buy.

You check your debt borrowings and it allows you to upgrade your car - Do it.

These are the kind of life we ended up today because we are filled with material possessions with little or no meaning to it. 

We are simply chasing the better after the next best, only to find out there are infinitely better things to chase.

What If Those Pilots Act Differently?

Some people like me, especially if you linger around longer in the finance community, would always think cynically.

At first, I don't think it's healthy to always exhibit this sort of thinking, but it usually helps mentally and the amount of work you put in at the other extreme when the world gone bad has tremendously helped to turn the situation around.

For instance, I am always skeptical about how long I can survive in the corporate world. 

I have always assumed that bad nasty people leads the corporate world and at anytime at their discretion they are going to eat me up.

Because of this mentality, I've gone into the other side of always trying to look after myself first. 

I saved hard. I saved for the rainy days. I saved preparing for winter moments like today.

And I invest for the future.

Increase Other Income, Think Cynically

Will these pilots end up in a better position than today had they saved more in good times in preparation for the rainy days? Perhaps so.

While it is difficult due to the nature of their roles having to fly in and out and keeping up with their fellow peers, I believe they can do that to a certain extent.

Most pilots also probably do not qualify for basic housing subsidy given their high household income so they are likely to live in a private condo. Nevertheless, they should still have enough buffer to save for their rainy days given their high level of income and allowances.

Perhaps, the journalist should have come up with a "What Would You Do Differently?" type of questions that would intrigued the readers from the lessons learnt.

Thanks for reading.

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Sunday, September 20, 2020

Sep 2020 - Portfolio & Transaction Updates



No. of Shares

Market Price (SGD)

Total Value (SGD) based on market price

Allocation %
























Lendlease Reit







Tencent (HK)














Alibaba (HK)







Yuexiu Trans. (HK)





















Jardine C&C







Bank of China (HK)







GA Pack (HK)







Apple (US)







Ho Bee Land









































This month, I was stomped over-busy for work so apology for the slight delay in the updates.

There were not many movement and updates this month so I'll quickly run over the portfolio to see the latest movement I have.

There were 3 new additions and 2 divestments that left the portfolio per my updates from the previous month.

The first addition is Starhill Reit, which I managed to add a considerable amount of 50,000 shares at $0.435 a few weeks ago as retail malls continue to suffer brutal damage from the lack of tourism coming in. Having gone a few times to Ngee Ann City and Wisma Atria myself, I can definitely see where that other crowd is missing. Having said that, the locals' crowd is starting to pick up and I definitely see a more robust crowd as compared to the early stage of Phase 2. 

At the current valuation, I feel that Starhill presents a good entry opportunity with i.) P/BV at 0.54, ii.) Some amounts of funds retention in Q4, iii.) long lease WALE and iv.) ongoing AEI on Starhill Gallery completing in phases, which provides an upside lift.

This month, I have also started to add banks, and in my case OCBC amongst the three other banks. I do not have any particular banks that I wanted so much but given that UOB is in the South East Asian sector focus (and I already have Jardine C&C covering those areas), I wanted to avoid that repeatedly. Given STI is currently at major support and OCBC makes up 10% of the whole STI components, it's sort of taking a chance at the STI ETF equivalent. 

I don't expect banks to outperform in the short run so this feels a bit more mid to longer-term as options on other sectors start to run out for me.

The other counters which I added was an HK listed Toll-road company called Yuexiu Transport. I was alerted to this company from a friend after discussing and having liked the recent profile of acquisition plus recovery from China, I decided to put some money in it. I was skeptical earlier about the short lease of a typical toll play but over the years, the management looks to be very active in recycling older assets and buying new ones at a higher irr. Given the recent 1H result loss given many of the breaks during the first half of the year, I am confident that 2H will post a very strong rebound back to normalization.

On the divestment side, I have sold off my hospitality play for CDLHT and Carnival at about 10-15% gainhoping to buy back later if the share price comes down. Having still quite a bit of play in the recovery sectors, I wanted to be a bit more agile in the turn in terms of churning out and pocketing the gains. I may buy them back if they would come down to my target again.

Networth Updates

The portfolio has continued to slowly climb back up from the previous month of $218,470 to $230,660 this month.

A couple of sectors in the tech and retail REITs pushed up the portfolio while Wilmar dropped quite considerably from the previous month due to a shareholder's sell-off.

With three months to go, it seems like it's going to get difficult to meet the revised target of $250k by year-end, but we'll see if any surprises spring in the next couple of months.

Cheers and stay safe everyone.

Thanks for reading.

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Thursday, September 17, 2020

Where Do You See Yourself In 5, 10 or 20 Years Down The Road?

"Where Do You See Yourself In 5, 10 or 20 Years Down The Road?" 

This is a favourite question that is often posed to a candidate during an interview process.

But do you ask that about your own personal life?

Frankly, not many people have thought of it deep enough to make a serious call on a decision they make today.

Looking at the situation today, COVID-19 has inflicted incalculable social, economic, and structural damage to the country and its citizens.

With most segments of the society struggling with the impact on the economy resulting in job losses, pay cuts, and retrenchment, COVID-19 has clearly exacerbated the situation for the lower-income group with the government requiring to step in to provide income and job support.

According to the study, almost half of the low-income earners (those earning $2,999 & below) experienced a drop in salary during the pandemic. Out of this population, another half of the group saw their income decline by more than 50%.

Take a look at appendix 3 appended below, for instance, 42% of the population who has experienced a decline in their income has less than one month of personal savings while another 22% has only between one to three months of cash flow to tide them through.

This is clearly well below the recommended 6 months of emergency funds that most financial planners would advise.

What lessons can we learn from COVID-19 that can enable us to make better informed financial decisions in the future? How do we impose a back-up plan to prepare ourselves sufficiently for future recessions? These are some hard yet realistic questions that we have to ask ourselves.

Thankfully, with the enhancement of digital innovation such as the NAV Planner, an individual can now project their finances simply and effectively.

Appendix 1

Appendix 2

Appendix 3

Map Your Money

DBS has launched Map Your Money, a new feature in NAV Planner on DBS and POSB digibank.

This new feature allows users to have a holistic view of their overall net worth and cashflow projection through the interactive dashboard. It allows users to plan to see how much they have spent and how much income and savings are required to sustain the same kind of lifestyle, not just for months but also years ahead.

In the event of having to face an unprecedented crisis like today - which results in a likely scenario of pay cuts or retrenchment - the user can navigate the planner to see which expenses are discretionary in nature and can be cut back. The planner would also show how many months of cash flow is needed to survive comfortably.

Users may also set a few short and long term goals to look forward to.

For instance, setting aside $3,000 for a winter trip to Seoul next year can be considered a short term goal while longer-term goals can include things such as setting aside university fees for kids' education.

The CashFlow projection chart is split into 2 stages:

i.) Before Retirement - Accumulating Wealth
ii.) After Retirement - Drawing down wealth

The colored bars indicate the income stream which includes salary, rental income, dividend, CPF payout, and SRS payout. NAV Planner even takes into account all the complex CPF rules so your forecast is as accurate as possible.

The black line indicates the current expense today and the projected future spending after retirement.

The line turns red if there is a gap between the red line and the bars, indicating a shortfall that you have to bridge to get back on track.

Let's look at the 3 different scenarios below:

Scenario 1:

Let's make the following assumption under scenario 1:
  • Current Age: 35
  • Retirement Age: 65
  • Life Expectancy: 90 Years
  • Monthly Cashflow Income at age 35: $14,800 (includes salary, rental, dividend, interest)
  • Monthly Cashflow Expense at age 35: $10,000 (includes home loan, groceries, transportation, and all other expenses)
  • Monthly Cashflow Expense at age 65 (retirement): $3,000
Scenario 1 is a conservative figure where I decide to continue working until the retirement age of 65, where my working income will then start to taper off, and only rental and dividend income remain. The current monthly cashflow income at the current age is $14,800 which includes salary, rental, and dividends. The current monthly cashflow expense at current is at approximately $10,000 which includes the big chunk of home mortgages and kids' activities and expenses. By the time I turned 65, I am expecting the monthly expense to drop to $3,000.

Based on the Map Your Money analysis, it looks like financial freedom is on track based on the retirement schedule I've provided. I can take a huge breath of relief knowing that my financial planning is doing well.

Scenario 1

Scenario 2:

Let's make a little tweak on the assumption under scenario 2:
  • Current Age: 35
  • Retirement Age: 40
  • Life Expectancy: 90 Years
  • Monthly Cashflow Income at age 35: $14,800 (includes salary, rental, dividend, interest)
  • Monthly Cashflow Expense at age 35: $10,000 (includes home loan, groceries, transportation, and all other expenses)
  • Monthly Cashflow Expense at age 40 (retirement): $3,000
Now, let's assume in scenario 2 that I would like to get a bit more adventurous by retiring earlier at the age of 40 instead of 65 years old. 

I would like to retire earlier so that I can spend a bit more time with my children.

I wasn't sure though if this is a good move and if my cashflow could last till 90.

Oh well, Surprise, Surprise!!!

Based on the Map Your Money analysis, it looks like scenario 2 still fits well with my retirement plan and schedule. It means that I have the green light if I choose to do so.

Scenario 2

Scenario 3:

Now, let's make a step more aggressive on the assumption under scenario 3:
  • Current Age: 35
  • Retirement Age: 40
  • Life Expectancy: 90 Years
  • Monthly Cashflow Income at age 35: $14,800 (includes salary, rental, dividend, interest)
  • Monthly Cashflow Expense at age 35: $10,000 (includes home loan, groceries, transportation, and all other expenses)
  • Monthly Cashflow Expense at age 40 (retirement): $6,000
In this scenario, I have assumed that not only do I want to retire at the age of 40, but also doubled my expense from $3,000 to $6,000 after I retire. Perhaps, I wanted to enjoy life a little bit more by staying at a 6-star hotel and travel more after I retire.

Based on the analysis, it seems like my dream looks a little distant from my current profile. It appears that my cashflow would not be able to last me until 90 years old.


Your goal tomorrow is the hard work and effort of what you put in today.

The "Map Your Money" function in the DBS Planner is a simple yet effective tool to help users visualize their current and future situation and make the required changes to financial planning at any point in time. 

For young individuals who are working employees, the tool can help to project how much savings they need to accumulate before meeting the recommended emergency funds or before hitting important milestones such as marriage or buying their first home.

For individuals who are nearing retirement, they can utilize the tool to see if the funds can last them long enough, and if it can withstand the stress of times during an outbreak like today. For example, in the event they lost their job due to retrenchment, they also could utilize the tool to see how long their funds would last them.

What I like most about the NAV Planner is that it is flexible enough to make adjustments and changes based on our circumstances and goals in life, and it is not static. Because of this, I am able to make smarter decisions in my financial planning and enjoy the fruits of my labor in the later years to come.

To find out more about DBS NAV, click here! Otherwise, you can go straight to planning - simply log in to your DBS/POSB digibank and click on the 'Plan' tab.

If you need more help assembling your retirement plan, you can refer to the DBS' "DIY Manual" on retirement here.

Disclaimer: This is a collaboration with DBS on the navigation of NAV Planner and the features it can help users to achieve greater retirement planning. I loved this feature so much that I project a lot of scenarios on my own. All scenarios projected above are based on my own pure experience using the feature.

Thanks for reading.

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Wednesday, September 16, 2020

The Singapore Market Still Provides Immense Value To Investors

Patience is one of the key traits in investing.

But we hardly see them after the resurgence of tech investing these days.

Patient investing does not necessarily mean you have to hold the shares in your portfolio for the long term or infinity period. 

I get a sense that many people are misinterpreting this as they thought the longer the hold the better the returns will be. Not every investment will fall under this natural cycle, as they are many factors, both internal and external that would affect this. For example, companies in the oil & gas or property cycle are likely to be cyclical and regulatory in nature so the underlying fundamentals will shift with the circumstance.

STI Component

The STI Index has not been doing "particularly well" if we compare where they are today versus where they are 5,10 or 13 years ago.

This hypothesis is likely to change as the situation for the Covid-19 gets better over time. For instance, if the STI managed to recover back to 3,000 over the next year, it might suddenly look not so bad, as investors who put in money during the 2016 or 2020 would have reaped the benefits of their investments. 

The same hypothesis applies to every investment in every market.

If you managed to put the bulk of your money in Tesla in the first half of the year and ride the noises, you'd be sitting on a pretty nice gain even as they are undergoing a little correction now. However, if you purchased and FOMO buy at the peak on the 31st Aug, you'd like to be hitting yourself over it. It'll probably take a while before Tesla will reach your break-even price.

For sake of reference, the Nasdaq and most of the tech companies peaked during the dotcom period on the 10th March 2000 at 5,132. By the time the bubble bursts a year later, Nasdaq was at 1,100 by October 2002.

Companies like Amazon lost 90% of its value and it took 15 years for investors who bought at the peak to breakeven.

I'm not saying it will happen this time around too but there is always the risk of such a possibility happening in massive liquidity pumped the market like what we are seeing today.

Tesla's Performance (

You might think and ask what about say the performance of banks since the STI component is heavily geared towards a bank play, it would make sense to consider banks' performance throughout the different markets.

Turns out that almost everyone is struggling thereabout.

If we take a look at the YTD performance, banks are minimally 20% down. It doesn't matter if you are owning banks in Singapore, Hongkong, China, or the US market. This is mainly due to the fact that banks are the barometer of the economy and most banks are being asked to cap some sort of profits, dividends, or share buyback in their respective market.

This means banks are currently in an overhang situation and becomes a recovery play in the short term when things clear up. Meanwhile, banks are still raking money in through lending and wealth management even though NIM is mostly down and the reduced payout will only make their balance sheet stronger for the eventual recovery.

DBS vs BAC vs BOC (

DBS vs BAC vs BOC (

Can Investors Still Find Value In The Singapore Market?

My answer to that is a resounding Yes!

There are still gems across the Singapore market that are providing good short-term, mid-term, and long-term strategy to investors.

Obviously, not all the gems have to be part of the STI index, so you'd have to look a little harder outside and consider the alternatives.

A good example of short to mid-term recovery value is a company like Comfortdelgro, a public transport and railway local company which I wrote not too long ago back in Jul (article link here). It is important for an investor to consider such a company as a recovery play and not a long term compounded growth because the two metrics and thesis are completely different and hence the strategy has to be considered differently.

If you are looking at a longer play theme in the local market, there are still companies that are revolutionary in nature such as IFast or Micro-Mechanics. Both companies are riding the revolutionary trend of digital innovation. IFast, for example, has consistently grown its AUA since IPO and are gearing up for a potential digital banking licence in Singapore. 

Both have also done very well in the last 1 year - while STI is returning negative -23%, the strategy combined for IFast & Micro-Mechanics are returning 142.7%. 

Strategy (IFast & Micro-Mechanics) vs STI ETF (

Final Thoughts

There are many investors, friends and bloggers in the community who've been investing in the local Singapore market and still make it past financial independence and become very wealthy today.

The key is to find the right segments and the right companies to invest.

While this year the economy has been plagued by Covid-19, most of the outperforming segments are in the technology space and this might be the hot sectors that everyone wants to get into now that it is getting crowded.

But the time will come when recovery sectors and companies in the muds will outperform, and that takes patience to unravel. Meanwhile, I'll stay to my strategy by pumping a heavy amount of capital into some of the unloved names and hope it will bear fruits sooner than later.

Thanks for reading.

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