Saturday, January 16, 2021

Net Worth Update Jan 2021

After surpassing SGD 1 million in Dec 2020, my net worth continues its resurgence and increases by $35k to $1.048m. This is after the latest Jan 2021 salary, CPF contributions for Dec 2020, strong growth in the value of Reits in my portfolio and more than $12k of interests for 2020 credited to my CPF accounts. 

My CPF has surpassed $400k after the latest contributions and $5k Special account top up under RSTU.

My stock portfolio value in CDP has surpassed $250k and stands at $253k as at time of writing.

I prefer to adopt a laid-back approach to manage my financial health in 2021. I will reap the low hanging fruits first by topping up my own CPF SA, parent's CPF RA to enjoy the 4% interest rates and tax reliefs of $14k. Next, I will top up my own SRS account with $15.3k.

In the meantime, I am waiting to collect the dividends from my investment portfolios in CDP and SRS, build up my war chest and hunt for new investment targets. Any dip or correction will be decent opportunity to add shares. I believe this bull run is just a beginning of a new economic wave for at least 5 to 8 years. I may be wrong but I am always prepared that the stock market will tank anytime and will not be surprised if it corrects more than 30% again due to fears about new waves of lockdowns caused by this health pandemic. Nonetheless, I will stay invested and adopt a passive approach in the coming months.

Thanks for reading. Huat Ah!

With Love & Peace,
Qiongster

Tuesday, January 12, 2021

First Top Up to CPF SA in 2021

It is slowly becoming a routine for me to top up my CPF Special Account under the Retirement Sum Top-Up Scheme (RSTU).

Under RSTU, the main benefits are to earn the risk free 4% interests from CPF SA and to enjoy tax reliefs for up to $7k.

I have topped up $5k today.


I will need to top up $2000 more in Feb 2021 to complete the $7000 CPF SA top up. After which I will start to top up my Supplementary Retirement Scheme (SRS) account.

I will be in a low cash position for at least 1st Quarter of 2021 before I can start building up my war chest to hunt for the next investment target. But since there are not many buying opportunities now and with the results reporting season looming for the Reits, I will just sit back and enjoy the numerous Ang Baos trickling in after the Chinese New Year when the Reits in my portfolio start to pay dividends.

Thanks for reading. Huat Ah!

With Love & Peace,
Qiongster

Friday, January 08, 2021

How I become a millionaire before 35

My net worth surpassed SGD 1 million in Dec 2020 letting me achieve the sacred milestone of being a millionaire before the age of 35. Having one million dollars worth of assets indeed gives a psychological effect on my mind to convince myself that I am now, no longer as poor as I used to be. 

My lifestyle remains the same and there is no celebration or whatsoever. I still live a ragged life sitting half-naked in boxers on my couch watching Youtube videos at home. I continue to eat $2.50 cai png (mixed vegetables rice) or porridge for lunch and $2 McChicken for dinner. 

As I reflect on the pain and sacrifices of my life path before attaining my first million, I would like to take the opportunity to share my humble journey in this blog.

1. Being debt free

Since young, I do not like to owe money or things to other people. Neither do I like people to owe me things or money. In primary school, I never borrowed a single cent from anybody. But there are classmates who always like to borrow 50 cents $1 from me and never return. 

The first time I borrowed money was to take CPF tuition loan from my father's CPF account for my university studies. Feeling uncomfortable over the compounding accrued interest of 2.5%, I quickly repaid all $26k, inclusive of accrued interest, within 9 months of working after graduation. Since then, I have not taken any loan or debts beside short-term liabilities from credit card bills, which I paid promptly every month without fail. 

I have not yet bought any large item such as car or property in life. Although I would love to own a car and have saved up $100k to buy a car at the age of 27, I was swayed by my inner conscience into putting the car fund into buying businesses and income-producing assets such as Reits instead of a depreciating metal piece. On the tradeoff between convenience (time) against money, I decided to choose the latter.

As I plan to purchase a property in the forseeable future, I intend to take no more than 30% loan and will aim to quickly pay off the housing loan in full using cash and/or CPF. As a millionaire, I could easily afford to buy any HDB flat below $500k in full now but given the current low interest rates for housing loans, it would be more savvy to let my monies stay invested in the stock market to generate yields of more than 5% while incurring low interest rates of below 2% from housing loan.

Being free from liabilities allows me to enjoy inner peace and sleep soundly at night. It gives me the energy and concentration to stay focused on work and other daily activities in life. It also allows me to save up interest expenses to banks and creditors, which can be channeled into investments instead.

2. Enjoy solitude

I am pretty much an introvert and do really enjoy being anti-social to skip social activities such as gatherings, parties and events. I do not like to attend birthday celebrations nor weddings either. I enjoy being at peace with myself to enjoy solitude, which is a fantastic feeling of being solo doing own things instead of feeling lonely being alone.

Since schooling time, I like to be the first to leave class and during army days, I like to be the first to book out. I want to quickly go home to enjoy my 'me' time and not waste a further second stuck in school or camp to entertain teachers or hangout with buddies or kakis.

Due to my nature, I have avoided as many social events as possible that cost money - gatherings, birthday parties, clubbing, drinking sessions, movies, sports outings, marathons, musical concerts, weddings and so on. Those are the sacrifices I made that ruin friendships and kinships as I also avoid celebrating all festive events including the likes of Chinese New Year, Christmas too. Hence I have very few close friends and relatives that I still keep in contact with.

Why do I need so much free 'me' time? I enjoy doing all the free things - watching documentaries, reality shows on Youtube, reading investment books to enrich myself, research on investment opportunities, plan travel itineraries, understanding philosophy, exercise, sleeping, embracing nature in walks, catching up on news, listen to great songs, strategize work, searching for jobs, playing mobile or PC games and so on such that I feel there is simply not enough time for myself and why would I need to spend more time to entertain people outside of my life.

3. Simple life

I am a simple guy with little needs and few wants. I feel grateful and appreciative of enjoying what I have now. The clean air, the cup of water and electricity.

"It is a great man that can treat his earthenware as if it was silver, and a man who treats his silverware as earthenware is no less great." - Seneca.

I aspire to live to work and not work to live. I eat and dress simple. I commute by public transport and walked more than 5k steps everyday.

I seldom dine in restaurants nor indulge in shopping for fanciful items which I do not really need. I ditched an iPhone 7 for a cheap android phone last year and never look back at Apple.

I embrace the ideologies of stoicism which also encourages minimalism. I have decluttered many stuffs that I do not need by selling off my old laptops, phones, electronic devices, toys and books on Carousell to create space.

“Minimalism is a tool to rid yourself of life’s excess in favor of focusing on what’s important—so you can find happiness, fulfillment, and freedom.” – The Minimalists

4. Be frugal

By living simply, I am able to be very frugal or cheapo in my lifestyle. For the past 10 years, I capped my monthly expenditure to below $1k every month. Food, transport, utilities, phone bills, insurance, groceries all in for less than $1k. Inflation does not beat me as I beat inflation. I like to experience life at poverty level and will continue to do so even though I could afford to indulge in luxuries.

I am a favourite of free monies from paid focus groups, surveys, free food from fastfood apps, free vouchers and great deals from numerous e-commerce mobile apps. I like to pay for value. Value is not about cheap or expensive. It is about getting the most bang for your buck. Paying $100 to get $500 worth of value beats paying $50 to get $10 worth of value.

I like to eat great food. I need food to live. Food to charge the energy in my body. $3 meals in hawker centres do not lose out to $300 fine dining meals in Michelin restaurants. I appreciate luxury. Luxury is not about living in posh bungalows or 5 star hotels. Luxury is about living in a healthy body able to move around in freedom to enjoy the simplicities of life in peace and tranquility. I like to sleep in comfort. Comfort is not derived from a Hastens Vividus bed in air conditioned and air purified room. Comfort can be enjoyed from sleeping beside a fan at peace without worries on earth.

I did manage to travel to a few places in Asia on budget. Taiwan for less than $500 over 10 days, Vietnam for $300 for 9 days, Bangkok for $150 over 1 week. All are achieved through being savvy and resourceful to clinch flight and hotel deals in the past. My first time travel taking a plane was an exchange programme to China was sponsored by MOE and paid fully by Edusave decades ago. Now I have been accumulating miles through charging almost all my expenses on miles credit cards and will look forward to free flights and free airport lounges in future after this health pandemic is over.

5. Get a stable income

I was advised by my mum that in order to get a stable income, one needs to select and study courses that allow one to achieve technical competency to perform roles in essential services. i.e. Engineering, Accountancy, Architecture, Computing, Nursing, Medicine. Jobs that are non-technical are easily replaceable and could be outsourced easily. Although passion and interest play a part during selection of disciplines to study and will greatly impact future career, no money no passion is a harsh reality in this capitalist society. No money no freedom. No freedom no choices. No choices no life. This is cruelty of life at its best.

This Covid-19 global health pandemic has proven that that uncanny jobs offering essential needs to mankind continue to function and are largely unaffected while glamourous jobs offering luxurious wants to mankind can be made redundant. 

Despite having an immense interest in finance and real estate, I chose to study an engineering course in university instead, with a minor in finance. It is technical, full of programming, hardware, software. I could not compete with the smart and hardworking foreign students and the studious local peers. I did not do well in university but managed to scrape through and graduate. I remembered the tough days having to camp in campus for nights to finish up projects that require lab facilities, intense coding and prototyping. Nevertheless, all these experiences still gave me a piece of paper that opened up my options to jobs in various industries from banking, semiconductors, IT, engineering.

I eventually got an IT role that pays decently. My income from day job fuels my trading in Forex, options and equities during my free time. After a few years of working, I decided to be an long-term investor by building an income portfolio. I came up with a plan to work, grind, save and pump money into investments consistently. I was fortunate to continue enjoying stable consistent income during the pandemic from being able to continue working by setting up new IT systems in the data center during the circuit breaker days in 2020 and working from home as I was a worker providing essential services.

6. Invest early

Saving up consistently from a stable income is not sufficient to let my money grow fast enough. Let time and compounding effect perform their magic on my money. Time in market bests timing the market. 

My motto is to stay invested. Having no fear and no greed. Keep investing in income producing assets and businesses. Be flexible. Identify and acknowledge mistakes early and get rid of poor performing loser stocks. Craft a plan with small actions and be disciplined to follow own plan.

I was fortunate to be able to understanding the workings of the financial markets in my teenage years and started trading stocks by dabbling real money since the age of 21. My understanding of financial markets and instruments was deepened through taking business modules on corporate finance and investment portfolio management in University to fulfill minor requirements. I was then able to greatly appreciate what I am buying with my money from the stock markets. Hence, I had a good headstart in understanding the world of finance and decided to switched from being a trader to a long-term investor after a few years of working full-time.

I am still far from my ultimate target of having a $1m investment portfolio that can generate at least $50k a year. However, with faith and discipline, I believe I can slowly and steadily build up the portfolio and achieve financial freedom before age of 40. Attaining financial freedom does not necessarily means early retirement. It merely opens up the world of choices in life, presenting the opportunity to reclaim back all time that would otherwise be traded in modern day slavery. 

Last but not least, I wish to disclaim that what I have mentioned in this article is purely just my personal sharing and by no means, rendering any advice on any actions to be taken on personal finance matters.

Thanks for reading. Stay safe and strong always. 

With Love and Peace,
Qiongster

Monday, January 04, 2021

The second passive income in 2021

After the first passive income in 2021 which comes from CPF interests, I thought I had to wait till after the results reporting season to receive my next dividends but suddenly realized that interests from Singapore Savings Bonds are credited on the first working day of the month.

Checked my bank account and here it is. $107 from a $10k SBJan19 GX19010T that yields an effective return of 2.45% per year. It is hard to get such yield nowadays. Anyway I am happy to receive this second passive income of the year. 

Thanks for reading. Stay safe and strong always.

With Love and Peace,
Qiongster

Sunday, January 03, 2021

Why I do not want my CPF SA to attain FRS now?

Having shared the amount of interests received from my CPF savings for 2020, some readers emailed to ask me if I have attained Full Retirement Sum (FRS) in my Special Account and asked me to share my CPF accounts breakdown.

Here it is the pie chart provided from CPF Yearly Statement of Account for 2020:


It is important to note that the limit for MediSave account in 2020 was $60k and the interests for 2020 were actually credited on 31 Dec 2020 but updated on 1 Jan 2021. Surplus above the MediSave account limit was automatically transferred to Special Account.

Here is the breakdown after the re-adjustment:

Let us focus on the topic of attaining Full Retirement Sum (FRS). The FRS for 2021 is $186k and $192k for CPF members who turn 55 of age.

Although I could transfer the amount of difference between the FRS and my SA account balance, from my OA account to SA account to attain the FRS of $186k this year, I decided not to do so for 2 reasons.

a. I may need a personal loan from my own OA account for property downpayment

As I have plans to purchase a property within the next 5 years, while not having any intention to cash out on my investments in stocks, Reits and savings bonds with average yield above 2%, I believe I may need to give myself a loan from CPF OA to help with the downpayment of my property purchase. Hence, I have stopped transferring monies from OA to SA in the last 2 years, incurring the opportunity costs of earning lesser interest rate of 2.5% in OA compared to 4% in SA. 

It is important to bear in mind that such personal loan is costly as amount of monies withdrawn from OA is subjected to accrued interest of 2.5% and this will possible eat into the profits from property resale profits in the future as proceeds from property sales will need to be credited back to CPF OA together with accrued interests.

b. I want to enjoy tax relief from Retirement Sum Top-Up Scheme of SA account for at least 3 more years

My CPF SA account has been increasing at a rate of around $27k every year inclusive of the annual $7k cash top up for tax relief under the RSTU scheme. It is important to note that as my MA hits the limit, contributions to MA overflows to SA, to achieve a greater contribution amount to SA.

Based on the FRS projection from dollarsandsense, I will have at least 2 years to enjoy tax reliefs from RSTU before attaining FRS of $203,700 in 2024. This is assuming my CPF MA hits the limit, myself staying employed with CPF SA contributions of another 2 x $20k and 2 x $7k RSTU in the next 2 years. 

Since I expect my active income from employment will continue to grow and attract higher taxes, I hope to be able to enjoy some tax reliefs for at least 2 more years. Also knowing that I will attain FRS by plan before age of 37 gives me the confidence to not do anything to tamper with my CPF accounts. After 2024, I will let the compounding effect do its natural wonders to ensure that I will attain FRS of more than $400k in 2048 or so. 

Yes. $400k is the projected FRS after 2048! This is the harsh reality from mathematics. The critics grumble and complain that CPF monies are not our own monies because of this FRS thingy. It is very hard and impossible to withdraw our CPF monies at age of 55 or 65 because we could not attain the ever growing FRS, and due to being unable to earn the ever-growing salary that keep pace with the growth rate of FRS.  

I am not going to dwell on that topic because I am convinced that we are in full control of our own financial health and destiny. We can always transfer monies from OA to SA, save up to make cash top ups or voluntary contributions to CPF accounts in order to achieve FRS early in our lives and let the compounding effect take control to help us attain the FRS when we retire.

Source: Dollarsandsense

Thanks for reading. Stay safe and strong always.

With Love and Peace,
Qiongster


Friday, January 01, 2021

The first passive income in 2021

After waking up on the first morning of Year 2021, the very first thing I did was to check my CPF account balances.

Yeah. This is in anticipation of the amount of interests that will be earned for 2020.

Even though CPF monies do not seem to be like real monies, I believe they are still illiquid monies that can be used to fund our retirement in our late lives, purchase properties, pay for education fees of children, pay medical bills.

Here are my first passive income streams in 2021:

OA Interest: $4,307.01

SA Interest: $5,909.75

MA Interest: $2,376.17

In total, I received this amount of interests from my CPF savings:

$12,592.93

This is a 17.9% increase from $10,679.05 which I received in 2020.


On a side note, I noticed that the interests earned from Medisave account can easily cover the premiums for Careshield life ($165 for me) and Medishield life. In a way, it is possible to enjoy free insurance by using passive income from CPF savings to cover the insurance premiums. This can be helped if we bother to top up our own medisave account and strive to hit the maximum limits of $60k in 2020 or $63k in 2021 to let the 4% interest rate do its work. 

I am certainly pleased with this sum of passive income as it certainly boost my net worth on the first day of a new year.

Let's charge towards freedom. Huat ah!!

Thanks for reading. Stay safe and strong always.

With Love and Peace,
Qiongster

Thursday, December 31, 2020

Portfolio Update Dec 2020

What a finale to an epic 2020!

My portfolio value increases $20k to surpass $240k after capital injections of around $13k and buoyed by strong recovery of retail Reits in Dec 2020. I am glad and satisfied to be given the opportunities to continue building and strengthen my portfolio in 2020. Not only has the portfolio value grows, I managed to initiate new positions in quality Reits and bank such as Mapletree Industrial Trust, Mapletree Logistics Trust, Frasers Centrepoint Trust and UOB in 2020. This portfolio provides a strong foundation for me to continue building up my passive income in pursuit of financial freedom. 

Portfolio Actions

1. Gotten 2,000 shares of Ascendas Reit at preferential offering price of $2.96

2. Added 600 shares of Mapletree Logistics Trust at $1.92

3. Added 2,000 shares of Mapletree Industrial Trust at $2.83

Portfolio Dividends

1. Received $109.50 from a $10k Singapore Savings Bond on 1 Dec

2. Received $92.10 of dividends from Mapletree Industrial Trust on 1 Dec

3. Received $67.57 of dividends from Frasers Centrepoint Trust on 4 Dec

4. Received $53.56 of dividends from Mapletree Logistics Trust on 4 Dec

5. Received $126.50 of dividends from Netlink Trust on 4 Dec

6. Received $459.20 of dividends from Ascendas Reit on 11 Dec

7. Received $610.20 of dividends from Frasers Logistics & Commercial Trust on 17 Dec

8. Received $640.00 of dividends from Aims Apac Reit on 18 Dec

9. Received $100.67 of dividends from Mapletree Nac Trust into SRS on 28 Dec

      Portfolio Value $243K


My ultra long-term SRS portfolio value increases $7k to $81k. Comfortdelgro and Keppel Reit are on their way to recovery while the rest are fairly stable and in consolidation phase. All counters in this portfolio are likely to do well in the long future but if the Covid situation triggers another round of lockdown and economic stagnancy, then things will get worse before the overall situation improves. 

    Portfolio Value $81K


My war chest stands at a meagre $1.8k which means that I will not have sufficient ammunition to invest more in the near future. First quarter results reporting are looming and I am expecting some dividends to boost my war chest in Feb 2021.

My investment strategy for 2021 will be to adopt a more passive and laid-back approach. Firstly, to conserve and pump monies into CPF Special Account and SRS in 1Q 2021, then build up war chest and capitalise on any retracement or correction opportunities from 2Q to 4Q 2021, while collecting dividends, adding slowly to investments instead of gobbling because the stock market is no longer as undervalued as in 2020.

At the same time personally, it is important to invest in my own skillsets by picking up technical skills such as cloud computing, programming and enriching my mind and soul with knowledge from books and Youtube videos.

On this last day of 2020, it is time to put the darkest days of 2020 behind us, focus on the present and embrace the future! 2021 will be a better year for investors and mankind!

Thanks for reading. Stay Strong and Happy New Year to all!

With love & peace,
Qiongster