Net Worth Update Feb 2025

     

My net worth in Feb 2025 remains fairly stable at S$1.82 million after CPF contributions, dividends and savings from salary.

Net Worth Breakdown:

Safe Heavens (63%)

CPF (36%): As the foundation of my retirement savings, my CPF accounts has been boosted by more than $20k of interests credited on the 1 Jan 2025. I have shared the 8 key changes to CPF earlier.

Cash and war chest (17%): Liquid reserves strategically stashed in fixed deposits and Fullerton cash funds, earning around 3% p.a. This financial cushion provides me with a peace of mind and security for unexpected expenses or investment opportunities.

Bonds (10%): A balanced portfolio of low-risk Singapore Savings Bonds and Astrea Bond ensures stability. I have maxed out my SSB individual limit of $200k in Aug 2024, just before the interest rates declined.

Retirement Savings (15%)

SRS (11%): This tax-deferred savings account provides an additional layer of retirement savings. I plan to start contributing to the annual individual limit of $15.3k soon. My SRS funds are invested in $30k of SSB and 6 local stocks - Comfortdelgro, DBS, OCBC, Keppel DC Reit, Keppel Reit and Wilmar. 

Insurance (4%): Prudential whole life insurance plan and other savings plans which in total, could provide me with 6-digit lump sum payout after my retirement.

Equities (22%)

Stocks and Reits (22%): A property-oriented portfolio of stocks and Reits, focuses on long-term dividend income and stability. This segment of financial assets is riskier, more volatile and sensitive to interest rates but offers me the opportunity to indirectly own diversified portfolios of industrial, retail and commercial properties locally, and around the world for consistent passive income.

The Pursuit of FIRE

The true value of net worth numbers lies in the peace of mind they provide. The focus on building passive income streams and growing my overall net worth is not solely about retiring early. It is about creating options in life to possibly regain time, location and financial freedom.  It is about having the peace of mind to pursue passions, spend time to enjoy living life, and navigate life's uncertainties without financial stress.  This journey is about building a foundation of security that empowers me to make choices based on what truly matters.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and after careful consideration of risks and potential rewards.

Thanks for reading.

With love and peace, 

Qiongster

Added Money Tree with 6.5% p.a. forward yield to SRS Ultra Long-Term Portfolio

Today, the share price of DBS (SGX:D05) surged by more than $1 or 2% after announcement of $2.52 billion Q4 24 earnings, record high full year profit of $11.29 billion, $0.60 quarterly dividend per share and $0.15 quarterly capital return for next 3 years.

I pounced on the fear of missing out motivation to nibble some more DBS shares using idle SRS funds.

There it goes.

Ideally, I would prefer to add DBS at below $40 however it is very challenging to time the market. 

Even at $46, DBS has a forward yield of more than 6.5% assuming annual dividend of $3 (inclusive of 4 quarters of $0.6 dividends and $0.15 capital return) and based on less than 60% payout ratio. Hence it is very attractive relative to S-Reits which pay at least 90% of their income to achieve more than 5% yield. 

Recently, DBS has also bought back its own shares at around $43 - $44 as part of its $3 Billion share buyback programme. Hence, I feel that at $45-46, DBS is still not expensive but still below its intrinsic value of $50 - $60 based on future cashflows and earnings.

I am focused on making the idle funds in my SRS work harder as they were recycled from the sale of ST Engineering in my SRS portfolio.

It is crucial that long-term investors like us always remain calm, unwavered and focused on our investment objectives.

While the share prices of local banks and US tech stocks may remain volatile, we have nothing to fear if we are in the game for the long haul. 

I shall continue to monitor and shall not hesitate to add more local bank shares for alignment with my investment objectives in the future.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and after careful consideration of risks and potential rewards.

Thanks for reading.

With love and peace, 

Qiongster

Exploring the Diverse Landscape of FIRE

Financial Independence, Retire Early (FIRE). It's a catchy acronym, a tantalizing dream, and a lifestyle that's captured the imaginations of countless individuals seeking freedom from the traditional 9-to-5 grind. But FIRE isn't a one-size-fits-all approach.  Just like snowflakes, no two FIRE journeys are exactly alike.  This article dives into the diverse landscape of FIRE, exploring the different flavors and helping you discover which might be the best fit for your aspirations.

The Classic: Lean FIRE

Lean FIRE is often the starting point for many. It emphasizes aggressive saving and a minimalist lifestyle to achieve financial independence with a smaller nest egg. Think tiny houses, budget travel, and a focus on experiences over material possessions.  Lean FIRE requires discipline and a willingness to embrace frugality, but it offers the quickest path to early retirement.  It's perfect for those comfortable with a simpler lifestyle and prioritizing freedom above all else.

The Comfortable: Regular FIRE

Regular FIRE strikes a balance between frugality and comfort.  It involves saving a substantial portion of your income, but allows for more flexibility and spending on things you enjoy.  Retirees can maintain a comfortable lifestyle, perhaps with a slightly larger home, occasional vacations, and more leeway in their budget.  Regular FIRE offers a less restrictive path than Lean FIRE while still enabling early retirement.

The Luxurious: Fat FIRE

Fat FIRE is for those who want to maintain or even upgrade their pre-retirement lifestyle in early retirement.  It requires a significantly larger nest egg and a high savings rate, allowing for luxurious travel, upscale dining, and other indulgences.  Fat FIRE provides the greatest level of financial security and freedom to pursue passions without financial constraints.  However, it also requires a longer accumulation phase and a higher income potential.

The Flexible: Barista FIRE

Barista FIRE offers a hybrid approach.  Retirees leave their traditional careers but take on part-time or flexible work that covers their basic expenses and health insurance.  This allows them to tap into their savings at a slower rate, making their nest egg last longer and providing a buffer against unexpected expenses.  Barista FIRE provides a sense of purpose and structure while still offering significant freedom and flexibility.

The Independent: Coast FIRE

Coast FIRE focuses on reaching a point where your existing investments are projected to grow enough to reach your FIRE number by your desired retirement age, without requiring any further contributions.  Once you've "coasted," you can relax your savings rate and focus on other goals.  While you might not retire immediately, you have the peace of mind knowing you're on track.  Coast FIRE provides flexibility and allows you to prioritize other life goals without the pressure of aggressive saving.

Beyond the Labels:

It's important to remember that these are just general categories.  Your FIRE journey might be a blend of different approaches, evolving as your priorities and circumstances change.  Perhaps you start with Lean FIRE and transition to Regular FIRE as your income grows.  Or maybe you pursue Coast FIRE while exploring different career paths.

Finding Your FIRE:

The key to a successful FIRE journey is to define what financial independence means to you.  Consider your desired lifestyle, your risk tolerance, and your long-term goals.  Research different strategies, talk to financial advisors, and create a personalized plan that aligns with your unique circumstances.  Don't be afraid to adapt and adjust your plan along the way.

FIRE is a marathon, not a sprint.  By understanding the different types of FIRE and taking a personalized approach, you can pave your own path to financial freedom and live a life on your own terms.  So, which flavor of FIRE resonates with you?

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster

Portfolio Update January 2025

A month has passed in the new year and today is already 1 Feb 2025.

Here is an update of my investment portfolios.

My SGX Income Portfolio value inches up to $387k from $377k. S-Reits and property stocks in the Portfolio remain sluggish as the Federal Reserve has indicated a more conservative approach for 2025, projecting only 2 rate cuts instead of the previously anticipated 4. Current high interest rate environment is expected to prolong and erode the bottom line and distributions of S-Reits while allowing local banks to stay resilient by sustaining high net interest margins and the market possesses great anticipation of higher dividends while we await their next round of results announcement.

My US/HK Growth Portfolio tanks to US$14.7k from US$21.3k mainly due to my exposure to NVIDIA through selling put options. Thanks to Deepseek's recent breakthough, shockwaves are sent through the US tech sector, causing significant volatility in US tech stocks, particularly NVIDIA. Selling put options involves giving someone the right to sell you shares of a stock at a specific price by a certain date. In exchange, you receive a premium. If the stock price stays above that price, you keep the premium. However, if the price falls below that price, you may be obligated to buy the shares, potentially at a loss. Unfortunately, NVIDIA's stock price experienced a sharp decline this week. This resulted in significant losses on my sold put options, as I was obligated to buy shares at a price higher than the current market value. This setback is a reminder of the risks involved in options trading. While selling put options can generate income, it can also lead to substantial losses if the stock price moves against you. Despite this setback, I remain confident in my long-term investment strategy. I believe that NVIDIA has the potential to rebound in the future, and I'm planning to take assignment of the NVIDIA shares or keep rolling over the options to delay the expiry date. This experience has reinforced the importance of diversification and risk management in investing. While I'm disappointed with the recent performance, I'm committed to learning from this experience and continuing to grow my portfolio over the long term.

My SRS Ultra Long-Term Portfolio value increases to $195k from $192k mainly due to the strengthening of Keppel DC Reit and OCBC share prices.

Portfolio Actions

1. Sold 3 put options of Nvidia with strike prices $120, $135 and $145 and expiry 16 May, 7 Feb and 14 Feb respectively.

Portfolio Dividends

1. Received $544,50 of dividends from SSB on 2 Jan.

2. Received $147.50 of dividends from SSB in SRS on 2 Jan.

SGX Income Portfolio

Portfolio Value = $378k

US/HK Growth Portfolio

Moomoo

-US$400

Tiger Broker

US$13.7k

Syfe Trade

US$1.4k

Portfolio Value = US$14.7k

SRS Ultra Long-Term Portfolio

Portfolio Value = S$195k

Disclaimer: This article is for informational purposes only and does not constitute financial advice. It's crucial to conduct your own research or consult with a qualified financial advisor before making any investment decisions.

Thanks for reading.

With love and peace, 

Qiongster

CPF Retirement Account Top Up can be Great Ang Baos

 

Happy Lunar New Year!

I topped up $3k into my mum's CPF Retirement Account today.

The transaction and RA account balance are updated instantly in my mum CPF statement.

In my CPF Retirement dashboard, my tax relief is also reflected instantly.

Let me share 5 great reasons why CPF Retirement Account top up can be great ang baos.

1. Tax Relief

For personal financial objective, we could enjoy tax relief of up to $8k per calendar year for topping up our parent's CPF Retirement Account under the Retirement Sum Top Up (RSTU) scheme.

Assuming a tax bracket at 11%, a relief of $8k will save $880 of individual income taxes in cash, which is a rather big Ang Bao to ourselves.

The tax relief is also applicable to family members such as parents-in-law, grandparents, grandparents-in-law, siblings and spouse.

2. Compounding growth at 4%

CPF Retirement Account yields at least 4% and up to 6% for senior folks risk-free and guaranteed by the Singapore Government. Monies growing at compounded rate of at least 4% will double in 20 years hence, by leaving cash in CPF RA account, they will grow much faster than inflation rate to preserve and uphold its real value.

For CPF members aged 55 and above, an extra 2% of interest is paid on the first $30k of their combined balances (capped at $20k for OA), an an extra 1% for the next $30k.

3. CPF Life

In order to qualify for CPF Life, one need to have at least $60k in their CPF retirement savings before reaching 65 years old. We could help our parents to boost their CPF retirement savings to qualify for CPF Life if they do not have active income and CPF contributions.

CPF Life offers payouts perpetually for life. If one's CPF RA does not have $60k before reaching 65 years old, then he or her will only rely on Retirement Savings scheme to draw down their CPF savings till it is depleted.

If our parent is already enrolled in and receiving monthly payouts from CPF Life, any subsequent new inflows to the RA will automatically be used to increase the CPF Life premium so as to achieve higher monthly payouts for life.

4. Matched Retirement Savings Scheme

Under the Matched Retirement Savings Scheme (MRSS), the Government will match every dollar of cash top-ups made to the Retirement Account of eligible members up to a annual cap of $2,000, which can amount to $20,000 over an eligible member's lifetime. To be eligible, the person has to be aged 55 and above, has a CPF RA of less than the current Basic Retirement Sum of $106,500, has average monthly income of less than $4k, live in a property with annual value less than $21k and not owning more than one property.

By topping up at least $2,000 to a qualified family member's CPF RA account, we can milk $2,000 of free money from the Government.

However, do note that from 1 January 2025, cash top-ups that attract the MRSS grant will not be eligible for tax relief.

5. CPF is like golden ATM for senior citizens

For senior folks close to reaching the 55 year old and 65 year old milestones of being able to touch their CPF monies, their CPF accounts are like golden ATM that offer high interest rates for "withdrawable" cash with the click of a button. This is unlike younger folks who could only stare at their CPF balances as numbers. Hence, the concepts of 1M65 and CPF life annuity payouts are indeed beneficial and practical to folks who could really live long beyond 50s or 60s and on the brink of drawing down cash from their CPF balances. People who lived past 50 years old and could achieve Full Retirement Sum (FRS) should try to pump more monies into their CPF accounts, by all means, in order to reap the risk-free guaranteed returns on their monies.

CPF members above 55 year old can withdraw excess savings in Ordinary account above the FRS. CPF members can also withdraw up to 20% of their Retirement Account savings in a lump sum anytime from age 65 onwards.

I topped up my mum's CPF RA account with cash instead of giving cash, in order to maximise the value of money. For the $3k topped up today, I can enjoy $330 of tax savings myself, let my mum earn at least $120 of CPF interests for 2025 despite not being able to qualify form MRSS. This $450 of "earnings" from $3k gives a whopping ROI of 15% in a year.

Furthermore, there is compounding effect from future years' interests and being eligible to receive higher CPF Life monthly income payouts for life. Overall, I feel that it is a decent financial move. However, cash is king and it may be more financially rewarding if we were to deploy our cash in investments which yield greater returns.

In conclusion, topping up CPF accounts using cash is an individual decision depending on a myriad of factors and may only suit some of us and not everyone. One should always exercise our own due diligence to make the best decision for our own financial matters.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and after careful consideration of risks and potential rewards.

Thanks for reading. Stay focused and remain steadfast as always!

With love & peace, 

Qiongster

Topped Up CPF MA

   

I just topped up $1k into my CPF Medisave Account (MA) today. 

An early Ang Bao to myself from left hand to right hand.

My CPF MA balance now stands at $73,703.73, $1,796.27 away from the Basic Healthcare Sum (BHS) of $75.5k for 2025.

As my idle cash are stashed away in money market funds yielding more than 3% daily interest and being staked for selling cash secured put options, I plan to wait for the next CPF contributions from employment in Feb 25, before topping up my CPF MA to BHS using free money from dividends.

The key benefits of voluntary CPF MA top up are to enjoy tax relief as well as earning 4% p.a interest.

As I have already attained Full Retirement Sum in my CPF Special Account, I could no longer make Retirement Sum Top Up. This is the best effort I can make with CPF.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and after careful consideration of risks and potential rewards.

Thank you for reading.

With love & peace, 

Qiongster

Net Worth Update Jan 2025 | SGD 1.81m Record

    

This is my first net worth update of year 2025.

Due to the boost from CPF interests, dividends and a change in accounting my SRS account to reflect the market value instead of cost, my net worth reaches a record high of S$1.83 million.

Net Worth Breakdown:

Safe Heavens (63%)

CPF (36%): As the foundation of my retirement savings, my CPF accounts has been boosted by more than $20k of interests credited on the 1 Jan 2025. I have shared the 8 key changes to CPF earlier.

Cash and war chest (17%): Liquid reserves strategically stashed in fixed deposits and Fullerton cash funds, earning around 3% p.a. This financial cushion provides me with a peace of mind and security for unexpected expenses or investment opportunities.

Bonds (10%): A balanced portfolio of low-risk Singapore Savings Bonds and Astrea Bond ensures stability. I have maxed out my SSB individual limit of $200k in Aug 2024, just before the interest rates declined.

Retirement Savings (15%)

SRS (11%): This tax-deferred savings account allows me to set aside an additional layer of retirement savings. Annual individual limit of $15.3k is maxed out. My SRS funds are currently deployed into $30k of SSB and 6 local stocks - Comfortdelgro, DBS, OCBC, Keppel DC Reit, Keppel Reit and Wilmar. From this year onwards, I decided to reflect the market value of my SRS account at $192k instead of $132k cost value, thereby boosting my net worth.

Insurance (4%): Prudential whole life insurance plan and other savings plans which in total, could provide me with 6-digit lump sum payout after my retirement.

Equities (22%)

Stocks and Reits (22%): A carefully curated portfolio of stocks and Reits, focuses on dividend income and long-term growth. This segment of financial assets is riskier and more volatile but offers the potential for consistent passive income and returns.

Net Worth is More than just Numbers

While the net worth numbers are encouraging, the true value lies in the journey. It has been a journey of patience, discipline, and a relentless pursuit of financial freedom. Starting off a poor kid born into this world with nothing, I have learned to survive, live frugally, learn, save, invest, navigate market volatility, embrace uncertainty, and make informed financial decisions.

The Art of Financial Wellness

Financial success is not solely about accumulating wealth; it is about achieving a state of financial wellness. I realised that true wealth encompasses more than just building net worth. It is about having the freedom to pursue your passions, enjoying quality life, and contributing back to the society and world.

As I move forward, I strive to balance financial growth with personal fulfillment. By setting realistic goals, making informed choices, and staying mindful of my spending, I hope to inspire others to embark on their own financial journeys.

Remember, the journey of a thousand miles begins with a single step. Start small, dream big, and never stop learning.

Thank you for reading!

With love & peace,

Qiongster