Sunday 29 April 2018

Retiring Early and comfortably?- What is FIRE?

Over the course of last week, I came across many other experienced financial bloggers who wrote about this term FIRE. I have not yet came across this acronym and was a little confused as to what it implies. Some of the articles that I read were by InvestmentMoats, BULLy the BEAR and Minimalist in the city. After reading through their post, I could get a rough meaning of what FIRE stands for.

What is FIRE?

FIRE stands for financial independence, retire early meaning that you have achieved financial independence and can retire early as you are financially independent. After reading up a bit more on it, I realized that FIRE is essentially what most people would want or are aiming for. I have to admit  that when I saw this term, I was very interested in it too. Being able to retire early? Wow, I am in! Haha, even though I have not even started work.

Why do people want to achieve FIRE?

Achieving FIRE would firstly definitely provide you with more time to do things and I think this is what most people are thinking about when they think of retiring early because work takes up so much of our time that we are unable to do things that we want.

Another point on why people would want to achieve FIRE is that they feel that being able to retire early and have financial independence then there would definitely be less stress and worry. For example, work deadlines or upcoming mortgages but does it really allow less stress?

There are always reasons why people would want to retire early. But the grass always looks greener on the other side. I have relatives like my uncle who tells me he will never retire and would wok till he no longer can while there people like my mum who can't wait to retire but I know that my mum could be lost or feel bored as she doesn't really have a support group yet for example friends who have retired.Or maybe she would join one after she retires. We all have different reasons but I believe that only ourselves would know what fits us.

How to achieve FIRE?

How can you achieve FIRE then? The number one rule of to achieving FIRE is to grow your income and keep your expenses low. The main point here is definitely your savings rate as it will determine when you can retire. A higher savings rate would bring your retirement age earlier while a lower saving rate would mean a later retirement age. I guess then investing can be a pro or con in this case. If you are able to have a high saving rate and you invest as well with a good growth rate then you can significantly reduce the number of years required. On the other hand, if you invest but lose money instead then it's not going to bring your retirement age any closer to you right now.

Are we really able to do so?

Many people of course would doubt themselves if they are even able to do so. I think that you never know until you try it out. Of course, the first few years might be tough as the saving rate might not be very significant however I believe that after you have maintain a significant amount of savings, there are definitely benefits you can reap from it. I am glad to have come into contact with this term and realized that there are a huge load of things still out there for me to find out. I am definitely going to get started after my exams which will be ended on the week after next. In the meantime, I will be studying and cramping all the information into my pea-sized brain. Wish me good luck!

Sunday 22 April 2018

Investing cautiously through STI ETF?

I came across an article on the INVEST section of The Sunday Times issued on Apr 15, 2018 that wrote about a simple strategy proposed by Warren Buffett and that simple strategy is called dollar-cost averaging. The articles starts by writing that many of the conversations that the author Sean Cheng had with investors over the past few years has been about worries about a stock market crash coming soon.

 However, it has been shown instead that over the past few years, no major crash occurred and instead, the stock market has performed quite strongly. He then brought in the strategy of dollar-cost averaging by mentioning that it is impossible to time the market. I like that he had three different charts in the article. Each chart showed a different situations of the stock market, declining, U-shaped and a rising market. He then showed a comparison of dollars-cost averaging (DCA) and lump-sum strategy during the different situations of the stock market.

Taken from The Sunday Times. Apr 15, 2018

The charts showing a declining market and U-shaped market showed that a DCA method was better for these 2 situations while a lump sum strategy would be better for the rising market. The lump sum method is better in rising market situations and usually over the long term, the stock market would usually look like chart C due to increasing demand for goods and services. Fluctuations occur over the short term and if you would like emotional stability, a DCA strategy is a good option as you are able to invest more when prices are lower.

After reading this article, I find it good read in explaining the options available. However, there are still factors that are involved that can affect your eventual P&L. First, the lump sum strategy really depends on when you enter the market. Entering at an approximate low would most definitely be best however, entering at a high would put you in a spot. The lump sum strategy is very dependent on the time and price you enter. Next, a DCA strategy has it's pros but also cons. One disadvantage is that you would incur more commission charge. This can be a huge disadvantage over the long run. Well, both DCA and lump sum strategy has both it advantages and disadvantages, it has been and will always be a debate topic as each has it's own benefits. It really depends on the individual itself who is investing. So, which do you prefer? Or are you adopting another strategy?

Saturday 14 April 2018

Reflection over my time in University

It is almost the time of graduation for Universities and by now, a proportion of students should have already gotten a job offer while the rest are still on the look out for one. My graduation will be next year as I have one more semester to go before I graduate.

My friend graduated last year and she has been working for a year so far. Her friend who graduated the same time as her last year studying business has told her that it is not easy finding a job. She graduated from a private university similar as me and first took up an internship position instead of a full-time job as she wanted to do marketing. However during her internship, there were office politics involving her and it was really draining for her.

After that internship, she was offered a full-time job by another company however at a pay that was lower than her expectations. She decided to decline the offer and instead get another internship position. So right now, she is still an intern learning the ropes of marketing. The job market isn't really looking rosy right now and I have seen people struggle to get a job after graduation particularly from private uni. So if you are still an undergraduate like me or have just started university or not yet started, I do have a few regrets or hoped that I had done better/earlier during my past 2 years in university.

1. Do more internships

I realized this a little too late into my studies as I only took up an internship during my final year. Even though I have one more semester to go and can afford to take on one more internship, it will be difficult due to me going overseas for two weeks making it a short internship that I can take up approximately 2 months. Most companies usually have a minimum requirement of 3 months and some up to 6 months. So I might not be able to get an internship due to my commitment period being too short.

Employers nowadays really look for experience and skills. Even though education is still a critical criteria, a good portfolio of working experience can boost your value. Start-ups are popular nowadays and to work at a start-up would usually require someone to be able to do a large work scope hence not just paper knowledge is sufficient, having the right mindset and skills are also needed.

2. Brush up on your public speaking or interview skills

This is one that I have actually been struggling with since young. When I was young, I used to think that being hardworking would allow me to be recognized and acknowledged, however as I grew up, I realized that being able to present your views or even to rebut people is seen as being more capable. I have seen and can attest to this so many times during my presentations.

 In the real world, what really matters is how you present yourself, extroverts tend to be associated with being more confident and hence more capable compared to introverts. Hence, the way you express yourself can determine impressions people have of you.

3. Have a financial plan or goal

Something that I really hoped I started early was about investing. As I had a gap year from 2015 after poly and was interested in investing but it was not till 2017 that I really started reading up and created a CDP account. But I am really glad that I started in 2017 because I am aware of my financial status and have goals set for my future in which the magic of compound interest.

This is because my friend whom I mentioned above started working full-time since September last year has started getting sick of working and she cannot imagine herself working till maybe 50s or 60s. She hates her work as it drains too much energy out from her due to her OT-ing till late at night. She hopes to be able to spend more time with her parents as she is an only child however, as she is an only child, she need to earn money in order for both her parents to be able to retire in the coming years.

She currently has no plan on what to do with her money except to place them in a bank and wait from every month's pay to get in to accumulate. If she maybe had plan on what she like to achieve over the next 10 or 20 years in terms of her finances then maybe she would be as worried as she is now.

Overall, I feel that your time spent in University can be very enriching as you start to discover more about your interest and how you can prep yourself to face the world  when you start working. Don't be shy to start because YOLO! HAHA, A university education is just the beginning and a long journey is ahead for you even after you graduate. 

Saturday 7 April 2018

2018 General Investment Plan - Watchlist of Stocks

For 2018, I hope to have an investment plan and goal to move towards and to be able to have more capital injection to boost up my portfolio. Right now, every month I am building up my cash with approximately $300.

So far, 2018 has been a very exciting and turbulent year for the stock markets. From the correction of the stock markets to the trade war between US and China and then Facebook's controversy, they have all contributed in one or more ways to how people reacted to the stock markets. For now, I am looking at a few counters and also STI ETF in my watchlist, observing them to see if it is a good time to get in.

In 2018 (even though 3 months have already passed HAHA) I hope to read up more on FA and know more on how to analyze stocks.

My current watchlist 

- CapitaMall Trust
- SPH Reit
- Parkway Life Reit
- Japan food

For CapitaMall Trust, awhile ago prices were at $1.95/share and I did not go ahead to purchase it at that price. Now, it has gone up to around $2.07/share.

DBS and OCBC are bank stocks and I want to own some share as they are cyclical stocks that will usually experience cycles of highs and lows.

SPH Reit actually has been in my watch-list for quite a long period of time, since last year because I like the 2 properties that they hold namely Clementi Mall and Paragon. Clementi Mall is near SIM and I have gone there a couple of times. It is crowded as many residential properties are around there. Also, the mall is located so near the MRT making it easily accessible.

Paragon on the other hand is a more upscale shopping center located at Orchard and I like that the upper floors operate as a medical center. I have gone there once for a checkup and I do like how they cater it as a medical center with shopping available at the lower floors.

Net Income and Dividends per Share for SPHREIT
The dividends per share has maintained even though the 1st quarter earnings have taken a decline for 2018. They have a 100% occupancy rate which is good in terms of rental revenue.

Portfolio overview for SPH REIT
Parkway REIT is also another REIT that I would like to go into as it is a healthcare REIT meaning that it specialises in renting out spaces for medical or healthcare facilities. I am currently holding First REIT which is my current most profitable stock so I would like to add Parkway REIT if the price is good. I like healthcare REITs as I feel that healthcare services tend to have leases that run longer or that they will stay long at a place as medical equipment and patients would be difficult to transport.

Last but not least, I would want to really add on more STI ETF as I have mentioned in my previous post. Most of the stocks in my watch-list are REITs and banks at the moment and I would like to also diversify and find stocks from other industries too. Will be looking out in the next few weeks but currently still quite busy in school so we shall see how it all goes.

Sunday 1 April 2018

Singapore's Housing Future: Co-living?

I have just completed my assignments and quizzes for the past few weeks and I do have one more assignment and exams before my holidays. But I am glad and a little more relaxed right now. Today, I just saw this video, didn't get to read the article as it is a premium article (ahem, meaning that I got to pay to access it) but the video was kinda enough to let me know the main gist of what they were writing about. I also found another article that describes co-living in Singapore and is about the same company mentioned in the video. The link is here

 So, the video is about millennial co-renting a unit where each person would have their own bathroom while the kitchen, living room and toilets are shared spaces. It was also mentioned in the video that about 5% of the clients renting from the companies are Singaporeans so currently there are still a larger proportion of foreigners who are using this compared to Singaporeans.

When I saw this video coupled with a few other things that I have observed from, I can start feeling Singapore's constraints on our land space. I feel like Singapore is slowly becoming like Hong Kong in terms of our properties.

I stay pretty close to the MRT station, walk-able distance and there were some undeveloped land around there however, over the years, I have realized that all the land have been scooped up by private developers and converted to condominiums. The amount of HDB flats being build to close proximity to MRT stations have significantly reduced for my area. Of course, I do hope to have a property to call truly my own in the years to come. Well, our government have set leases to make sure that they would have land to redeveloped over the years. The future is always uncertain so let's just work hard and see how things go! Wishing all a Happy Easter Day!