56 years old with $1,000,000

I have posted about the allocation of my funds for when I start working and for now, I  have set a limit of $448 per month to investing. Since I would most likely be saving it before putting them in to the stock markets at the right time, I have used an annual percentage yield of about 8%.

Below I have used the number application on a Mac and inputted numbers of my saving rate, current savings I have right now and to have an annual percentage yield of 8%. A saving goal of 1 million is inputted to see how long I would take to achieve that.

The diagram above of course do not put into account of increasing input or reduction of cash input. It will approximately take me 34 years to get to $100 0000 with a monthly contribution of $448 at an annual percentage yield of 8%. So I am 22 this year, adding another 34 years would make me 56 years old.To me, that's amazing.

Coming from an average income family and a single parent family money has always been an issue. For example, my brother has been accepted into a prestigious university in London however my mum does not have the capabilities to send him there and can only rely on a scholarship which he hasn't yet gotten. Another simpler example would be that she most likely would need to work a few more years even after retirement age. Being able to envision the 1 million and have it as an attainable goal really spurs me on because I want to be able to contribute to my family and improve the standard of life for my mum like letting her travel and have good food.

With increasing contributions over the years for example the first year I contribute $448 followed by $558 the next year. This should help reduce the number of years needed. To be honest, I do have a fear of investing a huge portion of money into the stock market. For example, I hope to achieve a passive income of $40 000 per year hence I would need approximately $500 000 invested at a yield of 8%.

Having half a million invested in the stock market is scary for me, right now I have a small sum of money invested and I am young hence I am not that paranoid about the money invested. I believe many people have been advocating diversification of funds to reduce the risk which will reduce the paranoia that I think I will feel. So my next post will be on how to reduce investment stress! Do look out for it 😉 Goodbye 2017! It's been a good run.

Year-End Review of portfolio

This is my first year end portfolio review as I only started investing this year. So total counters for 2017 came to 7 and most were bought in the second half of the year meaning that I missed out on dividends and so dividends for this year quite low.

As of 30th December 2017,

Current costs for stocks/shares is at $5741.81, current value is at $5975.80 meaning a P/L of $234.03.

Total Dividends collected this year is $87.61.

Using StocksCafe, my time weighted returns is at 19.38% for 2017 compared to a -2.33% in 2016 hence bringing my overall to a time weighted return of 16.59%.

The time weighted returns for my portfolio is not bad to me but comparing it to ES3, it does lose out and mainly during to my returns in 2016.

For my dividends which I am looking forward to in 2018 has been projected by StocksCafe to be $336.88, giving me an average of about $30.63 which can be used to cover my phone bills as I am currently using the SIM only plan with Singtel at $20/month. Haha, it is a really good feeling knowing that your investments can cover certain portion of your monthly spending and I think for me that is the greatest driving force for me to save and invest for the long term.

Overall, I am quite pleased with my current holdings and hope to increase them in 2018 if I have sufficient capital. If not, I would slowly build up my cash holding and add more stocks into my watchlist before making any decisions. Do give feedback or any tips to me 😆

Reflection of 2017

Another year is coming to an end and I don’t usually write reflections but reading the various reflections from various financial bloggers have inspired me to do a reflection too. I think it’s also good to have a reflection done because during your 20s, every year really builds up a lot for you in terms of career, family and other aspects.

Today is the last working day of 2017 although many are on leave but being an intern means having to be in the office. 2017 has been a huge year for me. From beginning to invest and getting an internship, I have learned many things and that learning is a constant journey. During this year, I have also started blogging more frequently and to pen down my transactions and personal experiences. I hope for 2018 to be exciting and for me to have more initiative to learn new things.

 

1. Started investing

This year I started getting into investing. Previously, in end December 2016 I started a regular savings plan (RSP) with POSB saver and I got to say that was my best investment so far as I managed to purchase Nikko AM STI ETF at $2.80 onwards which right now has allowed my portfolio to have gain quite a lot.


Next, around May 2017 I created a CDP account and a DBS Vickers Upfront Account mainly because of the lower transaction fees that I can get. So my first trade was SGX and I managed to snag it at a price of $7.22 (without transaction fees) which to me was pretty okay.


I have been saving money in a bank account before 2016 hence I became a little addicted after purchasing my first stock and I went on to purchase a few other counters. So I ended 2017 with 7 counters namely STI ETF, Nikko AM STI ETF, SGX, First Reit, Amara, Tai Sin Electric and Design Studio. Of course, going into the new year, I will be looking out for stocks to snag at a low/reasonable price and also with a certain level of dividend payout. I hope to of course increase my financial literacy level and understand more about fundamental analysis.


2. Manage to secure an internship

During my holidays this semester, I managed to get an internship as a human resource (HR) intern. The degree that I’m studying is in psychology and it allows me to also get into HR and I would like to widen my exposure hence getting an internship in a company as a HR intern has allowed to know the workshops and necessities of being in HR.


Also, as I will be unofficially graduating next year end so an internship will also help boost up my resume hopefully. To be honest, even though I am graduating soon and entering the workforce I am still very unclear as to what I want to do. I do feel lost and am just riding the waves that come along. So I do hope to have a clearer goal of my future in 2018 if not, I will still be search for the route.


3. Progressed to the next semester for my studies

This sounds really ridiculous and lame but I really am pleased that I managed to progress to the next semester and with quite satisfactory results. This is because the modules that I took the previous semester was really technical and mostly essay questions were tested hence at one point of time, I felt really stressed out and even thought I would repeat the module/semester because this module also has the highest failing rate. The lecturer also consistently reminded us that the passing rate was low and we all had to start early.


Well, I can only blame myself for not starting earlier with the revisions that’s why I faced immerse stress before my final examinations. Hopefully, next semester would be a better one where I will start earlier ( I always say that but you know how it ends up, haha)


Overall, 2017 has been a year of growth for me and my family has been well and healthy so I am exceptionally grateful for that. I personally feel that it is very important to give thanks and be appreciative to be able to appreciate the little things in life. I have learned that I should not take things around me for granted and that everyone and everything that has happened has a learning point for me. Going forward into 2018, I hope to brush up on my communication skills as I am rather shy and require time before I dare to speak my mind to people. Other than that, 2017 has been a wonderful and amazing year especially since I started investing.


Here's wishing everyone a HAPPY NEW YEAR AND WELL WISHES FOR THE UPCOMING YEAR!! LET'S ALL HUAT IN 2018👏👏👏😁

Singapore Savings Bond

I came across Singapore Savings Bonds when reading through a few financial blogs like ASSI, investforyourself and Seedly and they mentioned about some benefits of the SSBs. I read through the posts by them and found SSBs to be a good parking place for extra cash.

Being a cautious investment who looks for investment with low risks and hopefully mid returns, SSBs seem like a pretty good investment with returns. I realized it is a pretty good balance/diversification to my stocks portfolio.

Besides being a good diversification to my portfolio, my mum is reaching retirement age soon and I have recently reviewed her assets/cash and realized that all these years she has been keeping her money in the bank. I felt that it was pretty wasted as her cash was not put to good use and really the yield was mostly sad. Well, what’s done been done so I told her about the SSBs being a better alternative to the bank account, it was pretty tough getting her to trust me but I’m glad and now she has placed some of her savings into SSBs.

I hope that more people can find out about this because I find it a really good investment option for people who are afraid to invest in stocks but don’t want their money to earn only a low interest in the bank. The SSBs is really a good place to park your extra cash at.

1. Singapore Saving Bonds

So assuming a person decides to put $20 000 into SSBs and let's assume it's for SBJan2018. The interest rates for SBJan2018 is showed below. Using the interest calculator provided by SSB, we can see that the total interest earned when held to maturity of 10 years would be $4328. We can also see that the interest payout increases each year.

2. Fixed Deposit

On the other hand, assuming another person has $20 000 and places it in a fixed deposit with 1.15% interest per annum. We will assume they place it for 10 years. The total interest earned would be $2422.75 for 10 years with $20 000.

SSB is a better choice in that the interest is compounded and hence interest payout gets higher every year. SSBs also provide better liquidity where a month of notice is needed to get back your cash, no lockup period is enforced. Do note that $2 is required when you place your money in SSBs and when you want to take it out earlier it is another $2.

How to save money?

1. Prepare lunch at home

Early this year, I started cooking my lunches and pack them to school. They usually consist of chicken and rice or a sandwich. I found I saved pretty much as my school's canteen food is not subsidized and can cost anything from $4 onwards. So by purchasing chicken from the supermarket, rice and eggs, my lunch amount can be reduced to an amount of around 1.50-2.00 per meal.

2. Selling things on Carousell and use the money as supplement to expenditure

 

 I did doubt before I started using Carousell on whether or not people would actually be willing to purchase my used or old items. However, after I put my first two items, a toy and a comic book which got snag up within a few days, I was intrigued that there was a community who was interested in getting items at a lower prices event though they are used or old.

After I have managed to sell items off Carousell, I would use that money (not a huge amount) to either help supplement my daily expenses or to get something I need.

3. Compare item prices before making purchases

I have experienced this so many times where I bought something and after which I found something cheaper from another place. Online purchases right now has made things so competitive and there will always be a cheaper alternative. But it matters when time plays a part. Online purchases can take up to few weeks and when what you want to purchase is in a rush then definitely getting the item fast would be your priority.

4. Getting hand-me-downs from family members

The hardest part of this is the asking part but since most of my cousins are into online shopping and frequently need space in their closet. I would ask them if they have any clothes that they can pass down to me. Of course, the clothes need to be of good condition and presentable.

It is always good to reduce our expenditure (of course not to an extreme) but to lower it so we can use the spare cash to generate more income which in future can be used to cover our expenditure. Hence, a lower expenditure would allow us to cover our expenditure at a lower cost of investment. A cycle that can bring us forward in the journey towards financial freedom! Cheers!

Personal Experience - Christmas Gifts

A gift is always good to receive but tough to give. My group of friends have the habit of having a secret Santa session annually. The first year we started with $20 and $30 the next with the amount snowballing to around $50 this year.

Yup, we go through the headache of getting gifts for each other every year but I have to say it’s exciting and does help us to bond together after weeks or even months of not meeting. We also do realize how fast we are all ageing (haha) every time we have a full attendance for our Christmas party by discussing what we are currently doing and the conversations always goes back to school memories together.

Anyway, back to the main point of how much are you willing to spend on a gift? I think a good gift is when you put yourself in the shoes of the other person and think about what he/she wants. I have received gifts that were so hastily bought that you know that the person haven't put much thought into the gift. How do you make sure that you are getting gifts suited for the right person?

1. Time is of the essence

It's never bad to start early. You can actually make use of the extra time to find presents and be able to consider if that really is the most suitable gift for that person. Also, you are able to avoid the crowd that are rushing to get presents at the last minute. Getting gifts during the last minute would just make you get things that are most accessible or something that has a 'beautiful' price/packaging.

2. Spend some time thinking about the person and what he/she has said recently

I think this point is really important. Many people don't bother thinking what the person really wants or maybe its too difficult therefore that explains all too well why chocolates are one of the hot favorite as a Christmas gift. Because who wouldn't like chocolates. But it really is no surprise when the gift is opened and a box of chocolates are received. One example is that I have seen my internship supervisor drink tea every single day. So maybe I can strike up a conversation with her asking about it and getting to know her favorite kind or if not surprise her with a kind of different blend of tea.

3. Is a gift really needed?

Sometimes a gift might not be the best in every case. If you really cannot think of a gift for someone, why not write a short thank you or appreciative card. In this advancing world of ours, it definitely would be nice to receive a handwritten card filled with warmth and heartfelt thanks. I have actually given my mum Christmas cards every year and she keeps them well in a file. To her, me being appreciative of what she has done for me is a really big Christmas gift to her. Of course I do supplement the card with a gift but to her, that handwritten card is worth more than anything else because whatever that I am too shy to tell her face to face, I write it down on the card.

4. Thoughtfulness 

Even though we always want to give good gifts to people and hope they love it. But we do have to be thoughtful and be appreciative during this festive season. Christmas is the season of giving and besides giving, we might also receive hence to show thoughtfulness is also equally important. 

Here's wishing everyone an early Christmas and happy gift selecting for the people whom you love and appreciate:)
 

Transaction - Design Studio (SGX:D11)

I recently did a purchase on Design Studio (D11) at a price of $0.535. So why did I do it? I have to say that the main reason is due to the dividends (very attractive) and also because I believe it is a rather good company fundamentally.

Some background about Design Studio Group before I talk more about why I did a purchase. Design studio first started as a company that manufactures joinery products basically joining wood pieces to create a complex item. They slowly advanced to design living spaces while maintaining the joinery manufacturing.

They now have 3 main core business segment firstly being residential property projects, hospitality projects and retail and commercial projects. Their businesses are generally in Singapore and a substantially amount of earnings are from Singapore as well.

The good:

1. High and consistent dividend payout

Design Studio has managed to provide a good and consistent dividend payout from 2013 to date. 

2. No long-term debt

So this brings me to my second point, Design Studio does not have any long term debts hence I believe that they will be able to provide consistent and substantial dividends. 

The not so good:

1. Lower Earnings

Their main earnings are from Singapore and in FY 2016 as seen from the chairman's statement, Singapore earnings declined 14.1% or 20.0 million. Judging from the Chairman's Statement for FY 2016, business appears to be challenging due to the economy and estate-cooling measures. Meaning that the residential core would not perform as well whereas the hospitality core would perform better due to tourism.

Overall, I believe that design studio can add value to my portfolio and I believe that it can sustain it's business over time as it expands into China.

Future plan for allocation of earnings

When I started getting involved and interested in investing. I planned ahead in that if I were to start work, how much would I allocate each month and what growth rate am I aiming for the funds allocated for investing.

I have heard of the popular 50-30-20 allocation where 50% is for expenses, 20% for investments and savings (Financial goals) and 30% for wants and needs. I can tweak it a little to allocate it as such 50%=expenses, 30%=savings and 20%=investments. Its a simple and easy allocation plan to follow however I think I'll have to go more in-depth for example, money for my mother and also a more precise breakdown for the expenses portion.

For now, I am planning to allocate my funds this way however, after much thought, I realised that the 50-30-20% allocation of funds is better in a sense. This is because if I split my expenses too specifically, for example as seen above and in that month my travel/transport expenses burst, my funds will be too tight to allow any adjustment. This is due to fluctuations that happen every month hence if i do allocate funds too tightly, the fluctuations can cause stress or inappropriate usage of funds.

In this way, I will have $1120 to work with for my expenses like food, transport and allowances for my mum. I have set a low starting salary given the economy outlook and because my degree is from a private university hence explaining why I would most likely be starting with a lower than average starting pay. I do plan to continue to give tuition during the weekends after I have started work like maybe 2 sessions per week to supplement my expenses. We shall see what the future holds and hopefully I'll update again when I have started work.

With my investment of $448 per month and at a modest growth rate of 5% per annum, I would have $83,814.75 after 10 years. This is again a really simple calculation with a fixed amount used. Everything is in a 'in progress' state and I hope to definitely find out more and improve on it.

Screenshot from http://www.calculator.net/investment-calculator.html

Image from http://thenotepasser.com/blog/2014/1/7/50-30-20-budget

Personal Experience - Internship

I just started my internship recently as a HR intern and I have started experiencing Monday blues and Friday happiness. Haha, Mondays really do feel like a drag.

1. Work environment

The internship is with an SME company hence workload and responsibilities are much higher as the number of employees are lower in numbers and I must admit that in the beginning I did want to quit as I felt that I could not handle it. Millennials? but i held on and must say I am learning a lot.

The first week was tough. Went in clueless and they had so many things going on. Every morning I dragged myself out of bed and tried to be positive. I finally understood why my mum used to sigh and complain to me that she didn't want to go for work. Those times were her stressful periods

2. Supervisors

When I got in, there were 2 supervisors for me to report to. One was the boss of the other but both would assign tasks to us. Our department was working in a way different from the rest as the 2 supervisors came into the company at the same time around mid 2017 hence they both were relatively new and needed an extra hand.

Not that I was comparing our department to the others but having 2 supervisors was tough. Each had their own working styles and each handled different projects. It's really when I realized the difference of having one or two person to report to was huge.

3. Colleagues

To be honest, this is the best part so far. As the company relies heavily on interns, I found a few other interns whom I could really talk to and were comfortable with.
Even though they are mostly from polytechnic, I have to say that we really got on well.

4. What I learned so far

Working world is really different from studying. When I was a kid, my mum asked me if I wanted to study or work. I remembered telling her that I would very much want to start work immediately instead of studying. But right now....after experiencing the work life, I realized how happy and worry-free study life is. The irony though, haha that my decisions change so fast.

I learn so much more from work than school and I do realise that being smart really isnt everything. I have seen people who work so hard but not getting their credit due whereas someone who is able to communicate well can get praised for work that is slip shot. 

I will be doing another update during the end of Jan when my internship ends and to be honest I am getting quite used to things but still learning and weekends are sooo precious. Tomorrow's gonna be a Friday so I am in a happy mood now 😃😄😄

Personal Experience - Income as a student

I started earning my own keep during my time in polytechnic due to working experiences accumulated during the break from O levels to poly studies. It felt good not having to ask my mum for pocket money and in a way made me feel that I can lessen the load on my mum. So these are some of the few jobs that I did over time.

1. Fast food cook

 This my first job that I apply and got after my O levels. I was a cook at Long John Silver and was paid $4/hour.

Really tough for me as I worked as a cook and burned myself a few times. I was also required to filter the oil which I thought was rather dangerous.

2. Waitress

This is usually the first part-time that most Singapore students get exposed to. I first started working part-time in a cafe due to the cafe 'fever' where most people spend their weekends with lattes and breakfast platters. With a starting pay of $7/hour, I was pretty pleased and worked during the weekends.

I was lucky to work in a relatively small cafe which was self-service so I only needed to serve and wash the dishes. This was where I start learning to not be so shy and to speak up more.

3. Events (Cashiers & Promoters)

Events was a good platform for me to earn cash within a short period of time. I worked in expo events and also as a promoter for events which can last anywhere from a few days to weeks.

4. Tutoring

 This is how I am currently earning my keep. $20/hour and I teach around 4 sessions per week. Really good platform as I realized that you can keep up with the current syllabus and also because I love interacting with children. Over the past year of tutoring, I realized that the amount of stress that children experienced right now is way more compared to my time.

Investment - Dec 2017 update

Recently added Tai Sin Electric at 0.420, the price then dropped to 0.400 within the next few days.

Portfolio right now at a four-figure sum, hoping to increase it to a five-figure sum by end of next year.

Looking to increase dividends received too. Hence, I'll be targeting companies that have a high payout ration and are sustainable too.

Hoping to buy in more during December.