Singaporean Talks Money: January 2023

Sunday 29 January 2023

Excited and a little worried for 2023 | How I am investing going forward

It’s been a confusing period for me as the markets fall and my net worth dropped like nobody’s business but on certain days, we see some form of recovery. I started investing in 2017 and it’s been an exciting 5 years of investing and experiencing many first and especially so now with high inflation, high interest rates and unknown future. Most importantly, companies trying to cut costs and operating expenses which in turn has resulted in layoffs in certain industries.

I am going to be having some rough goals for 2023 but it’s really not going to be a hard rule to follow it. Also, won’t be putting out numbers as I think I should keep it for myself to see but of course, I will be recording and tracking my quarterly updates as always. For 2023, I am hoping to making investing more of a hands-off approach for me. Automating everything and just checking back once in a few months will be good for 2023 and keeping up with the macro-environment. So for a hands-off approach for me will involve an index ETF and REITs ETF so just those 2 will be the main investment vehicle for me 2023, the rest would most likely be minute amounts.

Inflation and why it is just the beginning

It is my first time seeing inflation in levels like these although historically, it has happened before as I have been living in times when globalisation has happened and trade was encouraged among many nations as it brought many benefits to all parties. Many things were affordable as free trade was promoted. Previously, China has and still currently is the factory of the world and with cheap labour as well as mass production, almost everything and anything can be made in huge numbers and fast.

Recently however, you would have notice that many companies are trying to divert out of China as they realised how reliance on one country for supplies can turn sour if relations turn bad. This is seen particularly obvious when Russia and Ukraine are at war and with EU and USA providing aid to Ukraine, natural gas and oil to EU has been badly hit. Especially so to Germany as they import a huge proportion of natural gas from Russia.

Right now, Germany is scrambling to find other sources to supply them with it. We can also see USA implementing the CHIPS act, we all now know the importance of semiconductors as 2020 and 2021 saw how the supply chains affect semiconductors and their impact to our everyday items like refridgerator, television, microwave and many more. This made many items more expensive as chips were not able to be produced or delivered in time and lesser supply means higher prices. Even Taiwan has become so prized due to having TSMC (world's largest dedicated independent (pure-play) semiconductor foundry).

The CHIP act block Chinese firms that are trying to develop advanced chips from accessing non-Chinese factories that rely on U.S. technology to manufacture their products, and deprive those firms of expertise by barring American citizens and companies from assisting them. - The Atlantic

Getting out or staying put in China

It’s not easy getting fully out of China production as the manpower and machinery make it still profitable to make items there. But many companies are partly moving out certain segments to diversify the production site in case of anything. Apple is moving certain production out of China to Vietnam and India. Relations is also one of the factors why companies are diversifying out of China although production will not be completely out of China, Southeast Asia is benefiting from this.

China is still a very much attractive place as they have been the factory of the world for some time and no one can match up to them yet. They now are able to harness tech together with production to produce very good results. Even though the pandemic measures have been extreme but they have recently opened up and with the volume of transaction done in China due to the sheer size of the population, it’s not a market to be ignored.

No more globalisation and free trade = high prices?

If China isn’t making the items anymore, then whoever is making it might not be able to match the same prices considering they would need to train workers and wages are generally higher. Vietnam and India does seem to gain more in this sense as factories slowly move in there. The world is a lot more exciting as we saw how China opening up and when some countries set some extra measures for China citizens, China said that they would retaliate which we can already see.

How I am investing in 2023

Index ETFs is the way for me now. We do see crypto recovering slightly though not yet back to ATH which I think will take some time. But we are still early in the year so anything can still happen. I think we are seeing some kind of recovery currently and I have to admit that I have itchy fingers to buy more individual stocks mainly Tesla but I know my portfolio allocation is a little out of place. I will still continue to make the bulk of my funds to purchase index ETFs till a certain proportion before I consider adding any individual shares.

Entering another new year just makes me feel how fast time passes, I am sure 2023 will pass in the blink of an eye but excited for what’s to come and I do have an overseas trip planned for the early part of 2023 so looking forward to that!

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Saturday 21 January 2023

Investing for the long term | Why long term investing is the way to go

Entering the New Year (2023) and with Lunar New Year (Rabbit) just around the corner, it is good to remind myself of what investing looks like and why I started. Compounding interest was one of the first things I came across when I was reading up on investing. It gave me insights on why starting young was the best way ahead. In the long term (10-20 years) based on past results although not guaranteed did show that investing in index ETFs in the long run produced more positive results.

It's really patience and consistency to invest that I need as I only started investing a few years ago, as you know I previously invested in individual stocks and I am now focusing on index ETFs so we shall see in 10 and 20 years how it all turns out. Below are some of the pros of long term investing and different assets that you can buy for the long term.

Investing for the long term is a strategy that involves putting money into financial assets with the goal of generating returns over an extended period of time, typically several years or more. This approach can be a effective way to grow wealth and achieve financial goals, but it also involves some level of risk and requires patience and discipline.

In this article, we will discuss the benefits of long-term investing, the different types of assets that can be included in a long-term investment portfolio, and some tips for successful long-term investing.

Benefits of Long-Term Investing

There are several advantages to investing for the long term:

Compound interest: One of the most powerful benefits of long-term investing is the ability to earn compound interest. This means that not only do you earn returns on your initial investment, but you also earn returns on the returns you have already earned. This can significantly increase the growth of your investment over time.
Time to ride out market fluctuations: Another advantage of long-term investing is that it gives you time to ride out market fluctuations. Markets can be volatile in the short term, but over the long term, they tend to trend upwards. By investing for the long term, you can avoid the temptation to sell when the market is down and instead hold on to your investments until they recover.
Potential for higher returns: Long-term investing can also offer the potential for higher returns compared to short-term investing. While there is always a level of risk involved in investing, the longer you hold an investment, the more time it has to grow and potentially generate higher returns.

Types of Assets for Long-Term Investing

There are a variety of assets that can be included in a long-term investment portfolio, including:

Stocks: Stocks represent ownership in a company and can be a good choice for long-term investors. While the value of individual stocks can fluctuate in the short term, the stock market as a whole has historically trended upwards over the long term.
Bonds: Bonds are debt securities issued by governments or corporations. They can provide a steady stream of income in the form of interest payments and can be a good choice for investors who want a lower level of risk.
Mutual funds: Mutual funds are investment vehicles that pool together the money of multiple investors and use it to buy a diversified portfolio of stocks, bonds, or other securities. Mutual funds can be a good choice for long-term investors who want professional management and diversification.
Real estate: Real estate can be a good long-term investment, as it has the potential to appreciate in value over time. Investing in real estate can involve purchasing rental properties or investing in real estate investment trusts (REITs), which are companies that own and operate income-generating real estate assets.

Tips for Successful Long-Term Investing

Here are some tips to help you succeed with long-term investing:

Start early: The earlier you start investing, the more time you have to benefit from compound interest and ride out market fluctuations.
Diversify your portfolio: Diversifying your portfolio means including a mix of different assets in your investment portfolio. This can help reduce risk by spreading it across different types of assets, sectors, and regions.
Be patient: Long-term investing requires patience and discipline. It’s important to resist the temptation to sell when the market is down and instead hold on to your investments for the long term.
Review and rebalance your portfolio: It’s a good idea to review and rebalance

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Wednesday 11 January 2023

End of year checklist | Updates on life and how I plan to be in 2023

I think it’s always good to look back and see how much you have grown in the year. Not just in terms of finances although this is mainly a finance blog but both emotionally, mentally and physically. Of course, most of this might be financials but there is also nothing much to write about finances this year as I believe most of my goals would not have been hit as I set goals for a value to hit and not how much I should have invested.

Physical Health

So I would say this year hasn’t been great for my health and mental state. Health in that I think working from home doesn’t really work great for me as I have become too used to staying at home that I am now pretty lazy. I have been trying to incorporate exercising to my daily routine but laziness affects it. I did however, start some strength training with a resistance band and hoping to do more cardio in 2023. Other than that, no huge health scares.

Mental Health

I would say I don’t think a lot about bad things but I do worry about the future and often at times about things that I cannot control. Also, seeing how everyone is advancing in life some times do make me worry if I am even keeping up to standard or progressing well in life.

Beginning of 2022 was pretty tough as I had a lot of thoughts about my future but towards the end of 2022, I have loosen up and to be honest, as long as I am happy in the present, I don’t think I need to worry so much. Learning to take things one step at a time has helped me and I think being in the present in 2023 will benefit me. Being grateful for the things I have and appreciating life at it’s present is something I would do more in 2023.

Financial Health

Not looking at the portfolio value, I would say that 2022 has been a pretty good year actually. I managed to learn so much about investing, market cycles and how to handle my emotions in a market downturn. Also, I would say this year would be the year where I contributed the most to my portfolio although losses are also high this year considering crypto crashes and the market downturn. But I don’t regret anything as I have learned so much and am definitely much more confident in how I am positioning my portfolio for the future.

2023 would definitely be a year of learning as well as many things that are happening in 2022 will continue whether it’s interest rate hikes, layoffs and inflation considering the shift in many production lines. Job security is the one thing I am most concern about as I am in an industry that have seen significant layoffs and the outlook is not positive at the moment.

Of course, my main purpose is to make sure I am able to grow my portfolio throughout this tough and difficult period. However, if need to, I will stop contributing if I lose my job as news of Amazon laying off 18,000 personnels in their corporate functions.

Conclusion

Overall, I am not making any new year resolutions, life has been tough the past few years with the pandemic so just living life in the present as the world opens up. Health is definitely the number 1 on the list as nothing can really go on without good health. Taking it easy in 2023 as my 2022 was busy and hectic both in work and financial especially during the crypto boom where I had so much fun. Looking forward to 2023!

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Sunday 8 January 2023

Using ChatGPT to give a summary of books | "Rich Dad Poor Dad"

Really lazy first Sunday of 2023 so a ChatGPT generated article to start the year. Continuing from my previous article on ChatGPT, I realised that ChatGPT can also provide summaries of books and if you are thinking whether you want to pick that book up, you can actually get a summary before deciding on getting it. Depending on how you ask the question, you can get different information.

I am sure "Rich Dad Poor Dad" is always a recommended book whenever someone wants to improve their financial situation. "Rich Dad Poor Dad" has started many people’s journey on accumulating assets instead of liabilities and so a summary of it is great. So below is really all from ChatGPT, in other news, I saw that some schools will ban ChatGPT in their computers.

Summary of "Rich Dad Poor Dad"

"Rich Dad Poor Dad" is a personal finance book written by Robert Kiyosaki. Robert Kiyosaki is an American businessman, investor, and author. He is best known for his personal finance book "Rich Dad Poor Dad," which has sold millions of copies worldwide and has been translated into multiple languages. Kiyosaki has also written several other books on personal finance and investing, and he is a popular speaker and commentator on financial issues.

The book also covers the importance of financial education and the difference between "good" and "bad" debt. Kiyosaki's ideas are based on his own experiences, including his relationships with his "rich dad" (a friend of his father's who was financially successful) and his "poor dad" (his biological father, who was educated but struggled financially). Overall, the book encourages readers to take control of their financial lives and make smart decisions about their money.

Robert Kiyosaki is an American businessman, investor, and author. He is best known for his personal finance book "Rich Dad Poor Dad," which has sold millions of copies worldwide and has been translated into multiple languages. Kiyosaki has also written several other books on personal finance and investing, and he is a popular speaker and commentator on financial issues.

In addition to his writing and speaking career, Kiyosaki is an entrepreneur and investor, and he has started and run several businesses. He is also a proponent of financial education and has been vocal about the importance of teaching financial literacy to young people. It advocates for financial literacy and teaches readers how to build wealth through investing in assets, rather than just focusing on earning a high income.

Main Points of “Rich Dad, Poor Dad”

Some of the main points of "Rich Dad Poor Dad" are:

The importance of financial literacy: Kiyosaki argues that traditional schools do not adequately teach students how to manage their money, and that financial literacy is essential for building wealth.
The difference between "good" and "bad" debt: Kiyosaki advises readers to avoid "bad" debt, such as credit card debt or consumer loans, and to instead focus on taking on "good" debt, such as loans used to invest in assets that generate income.
The importance of building wealth through investing in assets: Kiyosaki advocates for building wealth by investing in assets that generate income, such as rental properties or businesses, rather than just focusing on earning a high income.
The need to take control of your financial life: Kiyosaki encourages readers to take responsibility for their financial futures and to make informed decisions about their money.
The role of mindset in financial success: Kiyosaki argues that a person's mindset and beliefs about money play a significant role in their financial success, and he encourages readers to adopt a mindset of abundance and possibility.

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Pages

Sunday 29 January 2023

Excited and a little worried for 2023 | How I am investing going forward

Inflation and why it is just the beginning

Getting out or staying put in China

No more globalisation and free trade = high prices?

How I am investing in 2023

Saturday 21 January 2023

Investing for the long term | Why long term investing is the way to go

Wednesday 11 January 2023

End of year checklist | Updates on life and how I plan to be in 2023

Physical Health

Mental Health

Financial Health

Conclusion

Sunday 8 January 2023

Using ChatGPT to give a summary of books | "Rich Dad Poor Dad"

Summary of "Rich Dad Poor Dad"

Main Points of “Rich Dad, Poor Dad”