The May 2024 tranche of Singapore Savings Bonds (SSB) has an average yield of 3.06% over 10 years.
The first 6 years yield a flat 2.99% per annum; 7th year yields 3.03% p.a, 8th year yields 3.2% p.a. and 9th, 10th years yield 3.27% p.a.
The May 2024 tranche of Singapore Savings Bonds (SSB) has an average yield of 3.06% over 10 years.
The first 6 years yield a flat 2.99% per annum; 7th year yields 3.03% p.a, 8th year yields 3.2% p.a. and 9th, 10th years yield 3.27% p.a.
I FOMOed at the last chance to buy DBS (SGX:D05) to qualify for 1-10 bonus share which will XB on 22 Apr 2024.
Hence I decided to add some more shares as its share price corrected today.
There it goes. My order is filled at $35.61.
My last nibble was in Feb 2024 at $32.38
My initial purchase was in June 2023 at $30.80.
This addition will bring my holdings to 910 shares, positioning for 91 free shares and 1,001 shares in total after ex-bonus.
Technically I am averaging up because I added shares at a much higher price compared to previous purchases.
Considering the 1-10 bonus share offering, the effective cost per share is only $32.37. This is because, remember that on the ex-bonus (XB day), DBS share price will likely fall by around 10% to reflect the issuance in bonus shares amidst no change in its market capitalisation.
Theroretically, there is no big difference if we buy DBS shares now or after XD day. Of course, if we buy before 22 Apr, we will be entitled to "free" bonus shares which are actually "losses" incurred from the fall in DBS share price on or after XD day.
DBS is the world's best bank and currently yields more than 6.5% despite at more than 50% above book value of $23.
Ideally I would like to get DBS at below $30 per share closer to its book value. However my fingers are itchy and getting impatient, coupled with the difficulty in timing the market, and the strong temptation in qualifying for "free" bonus shares spurred me to pull the trigger.
In addition, assuming DBS is able to maintain at least $2.16 annual dividend for the infinite future, it will take less than 18 years to recover back the invested capital and break even.
I believe DBS is the most enticing candidate to compete with all the top quality Reits in SGX and will be a great addition to our income portfolios for the long-term by providing consistent and stable passive income.
DBS has a great track record of rewarding shareholders consistently and steadily with growing dividends and capital gains over the past decades. It shall continue to thrive regardless of different financial environments clouded by noises and uncertainties. Even if interest rates fall, DBS will be boosted by higher volume of cheap monies lending by institutions and retail customers.
Should the share price of DBS plummet below $31 in the future, I shall add more shares to increase investment in this world's best bank.
My net worth rises 2.3% to S$1.625m after collection of bonuses, salary and the recovery of some Reits in my investment portfolio.
My CPF surpasses $600k milestone and constitutes the bulk 37% of my net worth. Full retirement sum (FRS) is achieved in 2022.
Cash and war chest form 17% of my wealth. My cash is locked up in bank fixed deposits yielding more than 3% p.a., and stashed away in Fullerton cash funds under custody of Moomoo and Tiger Broker yielding more than 3.5% p.a. with interest paid daily.
My bonds consist of Singapore Savings Bonds ($140k) and Astrea 7A PE bond ($9k) which are low-risk bonds contributing to 9% of my wealth. I plan to subscribe the May 24 tranche of SSB with average yield of 3.06% using war chest funds.
CPF, cash and war chest, and bonds amount to 63% of my net worth as relatively safe assets.
SRS account accounts for just 8% of my wealth. I have already completed the $15.3k contribution limit for 2024.
Currently, 23% of my net worth is in stocks and Reits. This, combined with the local holdings in SRS, brings my exposure to riskier assets up to 31%.
Tracking net worth is not about the numbers. It is about seeing where our past financial decisions lead us to. This update is a reminder that progress on this financial journey, however big or small, is worth celebrating. It fuels the fire and motivation to keep grinding towards the financial freedom goal. The journey continues and I am excited to see what the future holds. Stay tuned!
Thank you for reading.
I am glad to share a financial achievement - my CPF savings recently surpassed the $600,000 mark! This is a significant milestone as it highlights years of grinding, toil and saving, leveraging the CPF system and prioritising retirement planning.
Today, I want to share my personal journey to this milestone, offering insights and tips that might help you on your own path to CPF success.
Planting the Seeds of Saving Early
Financial literacy was not a prominent theme in my childhood. However, my parents instilled in me the value of hard work and responsible spending. This naturally translated into a cautious approach towards money when I started working odd jobs in my teenage years and earned CPF contributions. While my peers might have prioritized the latest gadgets or trendy clothes, I opted to channel a significant portion of my salary into my CPF account. Looking back, this initial focus on saving was the foundation upon which my CPF balance grew.
Understanding the Power of CPF:
Singapore's Central Provident Fund (CPF) system is often misunderstood. It is not just a mandatory deduction from your salary; it is a powerful tool designed to secure your financial well-being in retirement. Early on, I familiarised myself with the different CPF accounts (Ordinary Account, Special Account, MediSave Account) and how they functioned. This knowledge empowered me to make informed decisions about my contributions and withdrawals.
Optimizing Contributions:
Beyond the mandatory contributions, I explored ways to maximize my CPF savings. Here are some strategies that proved beneficial:
Living Within Your Means:
Building a substantial CPF balance isn't just about maximizing contributions; it's also about living within your means. I tracked my expenses diligently, creating a budget that allowed me to save comfortably while still enjoying life's experiences. Avoiding unnecessary debt and impulse purchases played a crucial role in freeing up funds for CPF contributions.
The Role of Time and Compounding:
Remember, the magic of CPF lies in the power of compounding interest. Starting early and making consistent contributions allows your savings to grow exponentially over time. Even small contributions made regularly can accumulate into a significant sum over decades.
Beyond the Numbers: A Balanced Approach
While reaching a $600,000 CPF balance is a source of pride, it's important to remember that retirement planning goes beyond just numbers. Here are some additional factors to consider:
Sharing the Knowledge:
Reaching a $600,000 CPF balance isn't a solo achievement. I've benefited from guidance from financial advisors, online resources from the CPF Board, and conversations with friends and family. If you're looking to embark on your own CPF saving journey, here are some resources to get you started:
The Journey Continues
Reaching $600,000 is a significant milestone, but it is not the finish line. I plan to continue contributing to my CPF account and explore further ways to optimize my retirement savings. Remember, CPF planning is a lifelong process. By constantly reviewing your goals, adapting your strategies, and leveraging the available resources, you too can secure a comfortable and financially secure retirement.
Let us not forget, the road to CPF success is paved with individual circumstances and priorities.
Thank you for reading.
Time flies. The first quarter of 2024 has come to an end for me to update my investment portfolios.
My SGX Income Portfolio value rises to $347k from $340k.
My US/HK Growth Portfolio value inches up to US$17.7k.
My SRS Ultra Long-Term Portfolio value increases to $159k from $147k mainly due to my contributions and capital appreciation of OCBC.
The US stock markets have attained fresh record highs amidst uncertainties over interest rates, ongoing wars and diminishing fears of global recession. US 10-year and 30-year government yields have rebounded slightly and the Federal Reserve is expected to hold interest rates high for the short-term before cutting up to 3 times this year.
Despite being clouded by uncertainties, immense noises and fears, it is crucial that long-term investors like us always remain calm, unwavered and focused on our investment objectives. Stick to our own plan and continue deploying our financial resources into high quality income-producing instruments such as government-backed risk-free bonds, property assets, or strong growth businesses tactfully according to our own risk appetite.
This is a month when I am reaping fruits of my investment labour of planting and sowing seeds in the past as many Reits paid off their dividends.
Portfolio Actions
Portfolio Dividends
1. Received $138 of dividends from Savings Bonds on 1 Mar in SRS.
2. Received $429.55 of dividends from Savings Bonds on 1 Mar.
3. Received $744.10 of dividends from Capitaland Ascendas Reit on 6 Mar.
4. Received $504.84 of dividends from Mapletree Industrial Trust on 7 Mar.
5. Received $149.60 of dividends from Parkway Life Reit on 7 Mar in SRS.
6. Received $346.56 of dividends from Keppel DC Reit on 11 Mar in SRS.
7. Received $330 of dividends from MPACT on 14 Mar in SRS.
8. Received $300.17 of dividends from Keppel Reit on 15 Mar in SRS.
9. Received $463.26 of dividends as 303 shares from Mapletree Log Trust on 20 Mar.
10. Received $299.10 of dividends from IREIT on 21 Mar.
11 Received $819 of dividends from Aims Apac Reit on 22 Mar.
12. Received $164.52 of dividends from Capitaland China Trust as 203 shares on 28 Mar.
13. Received $981 of dividends from CICT as 506 shares on 28 Mar.
SGX Income Portfolio
Portfolio Value = $340k
Moomoo
Tiger Broker
Syfe Trade
SRS Ultra Long-Term Portfolio
Portfolio Value = S$159k
The Apr 2024 tranche of Singapore Savings Bonds (SSB) has an average yield of 3.04% over 10 years.
The first 6 years yield a flat 2.95% per annum; 7th year yields 3.04% p.a, 8th year yields 3.19% p.a. and 9th, 10th years yield 3.28% p.a.
The first quarter of 2024 is on the brink of ending.
While I am grateful to be a wage slave having collected 3 months of salary from work, I am actually not happy because active income is derived from trading time for money, seeing bosses' faces, dealing with crappy work portfolios and worse of all, taking a toil on my mind, soul and body and being taxable.
Real joy emanates from passive income streaming into our bank accounts automatically from doing nothing, other than owning a tiny piece of income-producing cake such as properties, businesses, REITs or stocks.
S$1.587m
My net worth stagnates at S$1.587m as my Reits-heavy investment portfolios took a beating due to market expectation of prolonged high interest rate environment.
CPF still forms the bulk 37% of my net worth. I have already achieved full retirement sum (FRS) in CPF SA.
Cash and war chest constitute 16% of my wealth. My cash is being stashed away in bank fixed deposits yielding more than 3% p.a., in Fullerton cash funds under custody of Moomoo and Tiger Broker, and in Money Market Funds held by Phillips Capital yielding more than 3.5% p.a. with interest paid daily.
My bonds consist of Singapore Savings Bonds ($140k) and Astrea 7A PE bond ($9k) which are low-risk bonds contributing to 10% of my wealth.
CPF, cash and war chest, and bonds amount to 63% of my net worth as relatively safe assets.
In recent weeks, I have completed the $15.3k annual contribution limit to my SRS account which forms 8% of my wealth. I plan to subscribe to the coming Apr 24 tranche of SSB with average yield of 3.04% using my SRS idle funds.
Currently, 23% of my net worth is in stocks and Reits. This, combined with the local holdings in SRS, brings my exposure to riskier assets up to 31%. For the sake of diversification and reducing portfolio risk, I am happy to increase exposure to risk-free SSB in my SRS portfolio.
I resolve to remain steadfast on the track towards financial freedom, remaining disciplined and focused. I will not let the noises and distractions influence my decisions. As Warren Buffett said, 'Be fearful when others are greedy, and be greedy when others are fearful.' By staying content with my long-term plan, I won't be swayed by emotional decisions.
Thank you for reading.
I have completed the annual contribution of $15,300 to my Supplementary Retirement Scheme (SRS) account today.
This feat is achieved before end of 1Q 2024 and now I can focus on building up war chest and long-term investment for the rest of the year.
The main benefit of SRS is to save taxes aka cash outlay to the taxman next year.
Another benefit is to build up a cannot-touch ultra-long term portfolio using SRS funds.
There are also other options of endowment or insurance plans, annuity plans, bonds, funds or robo-advisor investment portfolios that we could invest with SRS funds.
However, SRS savings may not be for everyone because of the long lock-down period. We can only withdraw up to $40k from SRS tax-free for 10 years from the first penalty-free withdrawal, upon reaching the statutory retirement age (63 w.e.f 1 Jul 2022). There is a penalty incurred for withdrawing funds from SRS prior to retirement age, on top of being slapped with tax on the withdrawn amount.
I believe SRS will be beneficial for people who are earning income qualifying at least in the 7% tax bracket.
I have already contributed $8.4k to SRS earlier.
This is a quick update of my investment portfolios for this short month of February.
My SGX Income Portfolio value rises to $340k from $328k mainly due to capital injection for scooping up MPACT, CLCT and nibbling of DBS.
My US/HK Growth Portfolio value stagnates at US$17k.
My SRS Ultra Long-Term Portfolio value increases to $147k from $139k mainly due to my contribution of around $7.5k to SRS.
The US stock markets have attained fresh record highs before recent retracement, amidst uncertainties over interest rates, ongoing wars and diminishing fears of global recession. US 10-year and 30-year government yields have rebounded slightly and the Federal Reserve is expected to hold interest rates high for the short-term before cutting up to 6 times this year.
Despite being clouded by uncertainties, immense noises and fears, it is crucial that long-term investors like us always remain calm, unwavered and focused on our investment objectives. Stick to our own plan and continue deploying our financial resources into high quality income-producing instruments such as government-backed risk-free bonds, property assets, or strong growth businesses tactfully according to our own risk appetite.
I have gone on a shopping spree as I strongly believe in taking strides towards financial freedom by building up my passive income streams.
I have started contributing to my SRS account and has added more OCBC to my SRS portfolio. I have no plan to add US/HK stocks.
Portfolio Actions
Portfolio Dividends
1. Received $128.70 of dividends from Savings Bonds on 1 Feb.
2. Received $93.30 of dividends from Suntec Reit on 28 Feb.
3. Received $309.50 of dividends from Capitaland Ascott Trust on 29 Feb.
SGX Income Portfolio
Portfolio Value = $340k
Moomoo
Tiger Broker
Syfe Trade
SRS Ultra Long-Term Portfolio
Portfolio Value = S$147k
I believe MPACT is still a high quality income producing Reit which is able to pay dividend consistently above 6% for the next few years or even decade.
Today's high interest rate environment will not last forever. The FED will most likely start to reduce interest rates later this year to avoid any onset of economic recession and interest rates will taper to around 2% next year. Lower interest rates will certainly benefit Reits such as MPACT by reducing financial costs and improving net property income for more distributions as dividends to investors like us.
Even though MPACT will continue to suffer in terms of price weakness and volatility in the short-term, I am optimistic that in the long run, its share price will recover above $1.60 and slowly climb towards its NAV of $1.80.
The share price of OCBC (SGX: O39) has corrected from the recent peak of $13.45 to $12.90 today, after announcing its 2023 full year results.
OCBC has attained 12% increase in Q4 profit to $1.62 billion and 27% increase in 2023 profit to $7.02 billion. A slightly higher dividend of $0.42, compared to interim dividend of $0.40, is announced and payable on 21 May, maintaining a dividend payout ratio of 50%. However, the results have fallen short of expectations, disappointing the market.