How does games helps in my journey of achieving my first pot of gold? - Financial Gamification

 Hi Everyone!

In today's post I am going to share how financial gamification helps in my journey to achieve my first pot of gold when I was still young and just graduated from school!

The ONE PHRASE that all the new investors should know before you invest

Hi Everyone,

In this post, I am going to share one phrase that all the new investors (applicable to experienced investors as well) should take note of before investing in stock market.

My Review on StashAway - After using it for 7 months

 Hi Everyone,

 I have been using StashAway, a Robo-investment platform as part of my portfolio. I have used it for 7 months and here is my review!

Here is my referral code if you are interested to kick start your journey in StashAway, using my referral code, you can enjoy 6 months of fee wavier (for the first $10,000 that you put in)

My referral code : StashAway.sg/referrals/kenlongyeab7

February Portfolio Update

Hi everyone,

After roughly one month of investing, below is my current holding

Fu Yu - 22000 shares
HRnetGroup - 6100 shares
EC world reit - 10000 shares
Ascendas Reit - 60 shares

These are my 4 defenders of course Ascendas is pretty small in terms of weight age, but I m waiting for it to go down before I add more

So as of today my total portfolio value is $16,733.30. I m slowly moving towards my goal of $20,000 this year.

With me luck

Portfolio update part 1 (year 2020)

Hi everyone!

Today I am going to share the update of my current portfolio.

Currently I am focusing on 3 shares so that I can concentrate better and also focus more time on my day job.

The 3 shares that I have (I have shared before) are:

Fu Yu: 20000 shares (current price at 0.285)
Hrnetgroup: 6100 shares (current price at 0.605)
Ascendas Reits: 1160 shares (current price at $3.10)

 I have added an additional 2100 shares of hrnetgroup at the price of $0.60 which I think is a good price to add on more. Hopefully hrnetgroup will be able to rise again to it's ipo pricr, while collecting dividends of around 4.8%

Ascendas Reit, nothing much on this, it steadily going up and I am glad to have a positive capital gain on this. I will just put it in cold storage mainly to collect dividends than capital gain.

Fu Yu, my hero of the year, got 4 digit unrealize gain from Fu Yu, without the adding of dividends collected. DBS and RHB gave a TP price of $0.35 and $0.29 respectively together with UOB Kay Hian given the TP of $0.295.

Personally I felt that Fu Yu is a good company to hold and collect dividend as it's fundamental is quite good (strong cash flow with no debt)

Hopefully this year Fu Yu can work it way up for it revenue and profit, hopefully we can see Fu Yu at $1 range again?

So with that said, my current portfolio now is around $12.9k. not too shabby but still got a lot of room to growth. Hopefully this year I can hit minimum $20k in my shares portfolio or can hit $25k is a bonus.

So let's see how it goes!

End of 2019, Moving to 2020

Hi Everyone,

Hope you have a great year for 2019, it is definitely for me as this year quite a number of things happen to me especially my job change, new colleagues and new challenge. Also this year is the year that I start building up my portfolio.

So below is my portfolio

Fu Yu - 20000 shares
Ascendas Reit - 1160 shares
HRNet Group - 4000 shares
SSB - 10000 unites ($1 each)

Total portfolio value: $20,775
Dividends collected this year: $405.83


Dividends not that fantastic but it is still growing and hopefully my portfolio can hit $35,000 next year, with the dividend yield of 5% ($1750)

Of course, there is still CPF portion, the interest is going to come by early Jan 2020. Will be wondering how much i will get.

So with this, I will end my blog!!

See ya!

Nearing the end of 2019, so what is my goal for next year?

It's already November 2019, two more month before the start of year 2020. This year was an eventful year for me as I just changed my job and lots of new challenges are laid down infront of me to go through.

Things have settled down for me and now it's time for me to plan my savings and investment journey!

This year spend quite a lot on treatment for my family, so my savings has been quite stagnant for this year, not much growth. Hopefully next year will be a good year but let's see how it goes.

So my financial updates

My assets are still the same, whereby I live in my condo that I bought two years ago and I have checked the latest price in srx, the value went up by $100k, which is a good sum but didn't have the intention to sell my unit yet.

My stock/bond investment
Fu Yu - current value $4500
ISDN - Current value $2400
SSB - current value $10000 - from joint account

Cash savings
Personal account - $650 (for my daily expenses)
Joint account - $21000 (only my money but handle by my wife)

CPF
OA - $4000 - use for housing installment
SA - $32000
MA- $29000


So if I am measuring only my own money, not joint account, my total will be $11,500 and my joint account saving is currently at $31,000

Not bad I must say but have to save more and invest more! I will be getting around $3000 after I get my AWS for investing, have yet to consider which stock to invest with this $3,000.

Starting next year Jan, I will update my passive income every month so as to arrive for all the readers to walk this path to $150k again!

I also have another goal which is to hit $200,000 in a bank account (joint account) before I hit 35 years old. So that we can become a privilege member of the bank account (have yet to consider which account to focus on yet but we will see, still got 4 more years to go!)

So wait till for my next post in the month of Jan 2020, I will be reporting my interest for my cpf account !

Cya!

I am going to clone myself to work towards my financial freedom

Hi everyone,

If you have seen the header, yes you are right. I am going to clone myself to work towards my financial freedom. Am I going to create a machine or create a medicine yo do that? No.

In fact many of us has try to clone ourselves to work towards financial freedom which is to investing and collecting dividends.

Cloning is just another way of saying that. So now you might want to leave the post as this post is nothing more than just a passive income post. If you are those who are able to achieve financial freedom, then yes this post is not much for you. However, those who have difficulty in saving money or investment, please take a look at this post as it might help you in the future

Why I say I am cloning myself? Simple, by investing or saving, you are like investing in yourself. However, many people might not think that saving and investing is enough which is why they tend to overspend on luxury goods and services to treat yourself better as a reward.

Yes that is a valid investment as well. But in order to achieve financial freedom fast, you must not think of it this way. Try to think that you are raising your another self to work for you. By raising your another self, you would need to spend time and money on him before he can go work and earn money for you.

Same concept as how you raise your kid. So treat this clone as your child, your child will need lots of expenses like diaper, milk, clothing and etc. So give all these to your clone via money and saving. Actually we already have a clone called CPF. This clone will help you when you are at your retire age by giving you a monthly allowance to you for spending when you are old.

So technically one clone is already there for you so now you can make yourself another clone to work for you if you wish to retire early.

This is a rushed post but just want to share with all that by using another way you can make yourself save more and invest more.

Hope you like this post!

Experience in Owning a Private Property

Hi Everyone!

In today's blog I will be talking about my personal experience in Owning a Private property

Owning a property in Singapore is expensive but it is necessary be it a HDB or private property because you will need a home to stay in. So come at times you will be facing a decision when it comes to purchase a property.

I have been through lots of question from my family, friends and online commenters that why I go for private property instead of HDB. Certainly HDB will be better for the start because it is cheaper and have tons of grants that you can apply for. Of course the resale value might be higher if you manage to BTO a superb location.

So why? The reason is because my wife already had a condo before we got married. So with this, it leads us to three options, HDB resale, private property resale and private property launch.

For first option, if we go for HDB resale, we will not be able to get any grant due to possession of private property and we have to dispose the private property within 6 months after purchase. During that time we are unsure whether if we can sell away the property and it will be a gamble as the market is not that good at that point of time. So we skip this option.

Second option, we tried to research and find out the possible price for a resale condo, but the price are quite steep during the time when we first searching for private property. The reason is because we will need to fork out around 24% (including lawyer fee and other miscellaneous fees) in order to make the purchase. At that point of time I don't have that huge amount of savings yet.

Then we go for the third option, purchase a private property at sales launch (meaning brand new condo). We though it will be cheaper like high Park residence but in actual fact, it wasn't that case. It was very expensive and the psf was way too high. Don't really justify our money so we look around and wait for bukot batok condo launch. And yes, finally it launch but the price was also way too high. At that time we are still aiming for 600+ square feet condo as it still within our budget but sad to say we didn't get to purchase it cause it is due to balloting. Totally no luck.

So we look around for both sales launch and resale and finally have found somewhere but and cheap but of course if you have these two, you will need to sacrifice one parameter which is the location. So we bought that place and pay the necessary for the purchase.

Understand that many would think that this is it! The payment is done and everything will go well. Well that is not true. Must plan well before you purchase property especially private property. Cause other than the common monthly installments that you have to pay (similar to HDB), you will need to pay maintenance fee as well. That will amount to around $250 to $500 per month, depending on which condo you stay. Also the maintenance fee also depending on the size of your unit. For example, the maintenance fee for 1 bedroom will be lower than the maintenance fee for 3 bedroom within the same project.

Of course the good point is that you have all the facilities free (except booking of function room and etc. That you might need to pay a small fee. But still better than renting a place outside as renting a place outside for function event can cost a bomb. So overall still worth it.

That's all for the post of you need me to clarify or share some more information about .do let me know

Personal Finance - Summary of 2018

Hi Everyone!

This year is indeed a fruitful year for me as the reader might know, i have made a huge purchase last year November 2017 and start living at my own house in Feb 2018 (right before Chinese New Year, after renovation).

So technically speaking, I have $0 saving (excluding CPF SA and MA) as I have put down all my savings in the home purchase, renovation and furniture. Also, going through $0 savings and no portfolio is like a huge miss of opportunity to earn passive income through dividends but the purchase is worth it.

If you didnt read my history post, I made a private property purchase (2 bedroom condo). I will write down the experience in owning a condo in my very next post so that those who had intention to make a condo purchase, can take my experience into consideration if you keen to purchase.

Born in 1988, which means that I am 30 years old this year! 30 years old with $0 savings in February is like lagging too much behind from my peers and you the readers who have started your retirement journey be it saving in bank, Singapore Saving Bond or even shares.

Okay, here's the thing, after 10 months of savings below is my rough result of my saving for this past 10 months

Cash portion
Personal Cash/Saving: $4000
Saving from joint account (I am the contributor only) in bank account: $20000
SSB: $10000
Shares: $5,350+($1990 - reserved for investment) - $7300

Total: ~$41300

CPF Portion
OA - $5300
SA - $27800
MA - $32200

Total: ~$65000

Well based on my goal in my personal goal page, I did not do quite well as I did not met some of the target like opening kids account and etc. Of course, the kids account I will do it when we are going for kids, should be around 1 or 2 years!

Just to share, I have been moving my OA to SA in order to gain more interest. Also my SA interest hits $1000!! Which is a good thing as now i can safely say that my future SA interest will be more than $1000. So how much have i been transferring? I have transferred around $6000 from OA to SA. Not a lot but for me i am trying to maintain my OA at around a certain level to pay for my housing loan.

Passive income, I will not cover for this year as it is not a complete year for me since i am still building my wealth from scratch and did not invest or getting passive income in the full year, so will start the calculation in 2019.

However, based on my goal, I have not met the passive income portion of hitting $800 for the year 2018. Next year it will be different, I have update my goals in my personal goal page and for those who are in the process of accumulating wealth (aiming for $100K challenge) do drop me a note on your blog so that we can keep track of each other. Challenge is always fun right?

So my goal is to hit $100K in cash portion (includes, cash, shares, FD, bonds and etc.) and hit CPF of $100K as well (should not be an issue though)

See you guys in the next post (experience of owning a private property)

Personal portfolio update

Hi everyone,

Yes I am rather inactive in my blog as I am seeking for a new job and job hunting is really tough. Am I jobless? Certainly not. I am still working at my current company just that I am seeking for a change in environment and industry to proof my experience to be relavent and at the same time to expose myself into different environment for valuable experience.

Okay! Back to the topic. My personal portfolio, yes I do mention in my previous post that I am starting from 0 and now I have near to $7,500 in my portfolio. Well it's not much but I am still growing. So below is my humble portfolio

Singtel - 700 shares (dividend - blue Chip)
Netlink Trust - 1000 shares (dividend)
ESR reit - 6100 shares ( dividend)
Geo Enegry Res - 7000 shares (growth)

Total value:$7400

Expected dividend yield for next year would be around 6% so
Expected dividend for next year would be around $440 per year for next year 2019. Though is just a small amount but I am working hard at it to push it further to at least $500 dividend next year with my bonus coming in. Shall see how it goes and see if I can reach my target for this coming year

See you guys next time!

From hero to zero but hero will rise again

Hello everyone!

From hero to zero, three years ago I started my saving journey for my wedding and purchasing my very first property and today I have accomplished these goals that I have set for myself. I am really happy living together with my Wife (but not ready for hold Ren yet as we are working towards our financial goal first before having our first kid)

You might be wondering why hero to zero? The reason is very simple, previously I have set my 150k goal which has the sole purpose of purchasing my first property and for my wedding. Now, all these are accomplished so it will also mean that my saving have gone down from high to nearly nothing. Yes, you might say that it is too risky to deplete all your savings just to purchase property, should have waited for one year or so before purchasing so that you will have some emergency fund. Truly agree, but I still go ahead and purchase since I want to have my own nest and also children in the near future, so decided to purchase it

So now I am Low level hero, what now? In life there is no shortcut, so deal with it, start from scratch, both my cpf and my cash savings are similar to fresh grad (maybe I win them through my SA account and MA account).

Because I have a shared account with my Wife and most of my savings is there however this is an individual goal that I laid for myself, I shall exclude the shared account and only focus on mine personal 私房钱, and share some of my goal by end of this year, 3 years later and 5 years later.

It been 5 months and my own personal saving/ investment has hit $7,000. Most of my cash is in shares and is in pool of red except for one so by the end of this year, I target myself to save at least $12,000 in shares and $2,000 cash. Not sure if I can hit the target but if possible I shall go for it (why set a lower target with no challenge right)

How about 3 years later? If the saving trend is stable, I shall hit $36,000 in shares and $6,000 in savings but no, shall go for a bit higher, $42,000 in shares and $8,000 saving. With $42,000 and yearly returns of dividends of 5.5%, I should be able to reinvest another $2,000.

How about 5 years later? If everything is stable, should be able to hit $60,000 in shares and $10,000 in cash. That's too little for a target, I shall aim for $80,000 shares and $10,000 cash. This will give me a rough return of investment per year of around $5,000. I won't touch the dividends portion for personal use, only for re-investment. Because that's the way for me to grow my passive income in a shortest way. With this plan, by 40 years old (10 years from now) I should be able to hit at least $180,000 in shares alone. Which gives me the yearly return of around $9,900 per year. But of course, stock market isn't simple math, there are ups and down so constantly have to re-adjust my portfolio if required.

Do you have the same goal as me? Or don't have goal yet? Can leave a comment below if wish to do the same monitoring and see if we can compete with each other to see who can reach our goal earlier. Winning or losing doesn't matter, the most important thing for this proposal of tracking each other is to motivate oneself to Ensure that you don't derail from your own goal. Is a health competition.

Thank you for reading!

Savings and Expenses Tracking

Hi everyone, it seems that my savings website is currently down due to unknown reason. Could be because it is a free platform and they decided to take it down Since the human traffic isn't that much. Well is okay, I am looking at some other expenses tracking Apps which can do the same job and if found, I will post the Apps information here and will do the same thing as what I have done previously (taking the screenshot of my updates and post it here)

If you follow my post, you should know that I have recently bought a condo and spend a Sum of money on renovation. So now basically my savings is equal to those who just start working without much savings. But well that was 4 months ago but now I have slowly build my own saving and turn back to stock market to invest in dividends shares. At the end of this month I will provide a update on my progress and do keep a look out at my goals page to see if I am able to hit any of the goal by the end of this year.

Thanks for reading!

Building my stocks portfolio

Hi everyone!

After a Long period of time, finally I have some spare cash to build my own portfolio from scratch. Previously I divested all my holdings due to purchasing of property and renovation (of course keeping sufficient emergency funds as well).

This week, I have been loading up some shares which I believe is still in fair value despite the rise in STI (from 2600 level to 3500 level) really impressive jump. Although I did missed the opportunity to make some capital gain but still no regret as I am really happy with my new home.

I am more towards building dividend portfolio rather than capital gain portfolio as I prefer to build a stable passive income through dividends. So currently I have bought some shares to start off with my portfolio. Below are the shares

1) SingTel - 300 shares
2) Netlink NBN trust - 1000 shares

Just bought a small amount as I am just getting ready to purchase and currently the market seems like going down (bear market) so will buy more if the price is right. I am still aiming for some shares like Keppel DC REITs, FCT and etc. These are some of the shares that I plan to have in my portfolio. Hopefully can get it but this year, with the best price of course!

Slow and steady wins the race, no need to rush all in. Just follow your pace and you will naturally build your own desired portfolio.

My Journey Of Purchasing My First Property [Part 2]

Hi Everyone!

This is the continuation from the "My Journey Of Purchasing My First Property [Part 1]" post, whereby I wrote about the first portion of my journey of purchasing my first property.

1) Process of Purchasing a property

So after we decided on the property to purchase, we got our agent to conduct the next course of action, which is negotiation. We did negotiate quite a substantial amount as the seller wants to follow the valuation price and forgo the listed price. However, we still manage to get the property a bit lower than the valuation. So after negotiation, we will need to do the following

 - Pay 5% down payment (cash only)
 - Pay 15% payment (cash + CPF)
 - 3% or 7%(depending on ABSD, ABSD only applies to buyer who purchased second property, be it HDB or private property)
 - Lawyer fees
 - Valuation fees
 - insurances (if needed)

So we paid the 5% to the buyer to exercise the OTP (option to purchase), along with the caveat. So many might asked, what's OTP and what is a caveat? An OTP, occurs when you want to exercise the purchase by making the 5% deposit. A caveat is a legal binding to both buyer and seller, especially to seller. This would means that the seller must adhere to this purchase, and cannot accept any other offers within the purchase period unless buyer backed out. Buyer does not have any effect on this caveat, just that the buyer will lose the deposit.

After which, you will need to hire a lawyer to help you to settle the legal stuff and payment stuff including signing the contract, passing the 5% down payment and inform the amount that you wish to deduct from CPF for the 15% down payment. Until then, will have to wait till 8 weeks to 12 weeks for the completion exercise to end.

So how about lawyer fees, valuation fees and stamp duty? is it counted inside the purchase price? Unfortunately, these are the addition fees that you have to pay on top of the purchase price. The lawyer fees should be around $2500 to $3500 (depending on what kind of service you expecting), of course we go for the lower one. For the valuation fee, I think is a standard fee, this will be done by the bank that you loan money from (to pay the 80% of the property).

For Stamp duty, it is 3%, the calculation is at this website (stamp duty calculator) - https://www.propertyguru.com.sg/mortgage/calculators/stamp-duty, if you have existing property then you will have to pay the ABSD.

2) Bank to loan money for purchasing property

Next step is to get a bank where you can loan money from. there are many banks in Singapore (UOB, OCBC, DBS, Maybank and etc.) Each bank will have different ways to calculate the amount to loan you. You need to submit your income statement, credit card information and etc. from there, they will calculate how much that you can get a loan from. Do note that they take into consideration of the number of credit cards you have (it doesn't matter if you didn't use - that's what I think)

So after a few assessment done by different banks, I decided to go for UOB for the housing loan, as they go by fixed deposit rate, which is quite low (which means good!).

So after which, they will bring along an insurance agent while signing the housing loan contract. Do note that you do not need to obligate to sign the housing insurance from the agent (it's optional).

So with this, I have conclude the chapter of purchasing the property. Soon, we will update about the renovation process.

CPF - Should you or should you not

Hi everyone!

Once again, the period of getting interest from cpf is here. Not everyone is excited but I am cause I am looking to every single ways to make my money working for me and getting interest/dividends are one of the ways!

So you might ask, do I even top up my cpf and if yes, how much do I top up every year? Personally I don't do any top up cause I don't have much savings to put in cpf especially I need more cash flow in the future (for my family). However, once I have extra savings, I might put some in cpf and the rest in other instruments.

Some people might asked, cpf money, you will not be able to withdraw until 55 years old. It's like can see but cannot touch, is it that worth it? Some people might see cpf as a liability as part of their salary are credited to cpf and they are unable to touch it. For me, I treat cpf as a long term saving program (especially for SA account) as it helps me to save and also earn quite a good amount of interest.

How about transferring OA to SA? Is it a good choice? Firstly, there isn't a fixed answer for this as there are pros and cons in transferring OA to SA. Let's say you are still young and want to build your family in the near future like buy a house and etc, I would suggest not to transfer your OA to SA yet until you have sufficient funds for it. The reason is because transferring from OA to SA is an irreversible move, once you transfer to SA, you won't be able to transfer it back to OA. So settle your big item first that requires your OA funds. After which, you can slowly consider how much to transfer in order to earn the attractive interest of 4% (extra 1% for the first 60k)

Will JYKL be doing the transfer? Yes, I will be doing it soon as I want to earn more interest in my cpf account by putting it more in SA cause the earlier you do, the more interest you will be able to get (compound interest effect). However do think carefully as you might need to use your OA for other stuff.

Thanks for reading!

My Journey Of Purchasing My First Property [Part 1]

Hi Everyone!

Starting from this post, I will share with you on my experience on purchasing my first property which is a 2 bedroom condo at the north area.

For this part, I will share with you on the preparation work before eyeing on the first property and also the must know stuff before you purchase a property.

1) Are you purchasing for your own stay or for investing. Many may asked why is this question so important, afterall it's still the same. Well yea, after all the property that you purchase, you can either stay or rent it out. But, when it comes to financial terms, you might be doing it wrong.

Why do I say that? Because we need to know that the property that you stay in might not be an asset (which I think it's true). The reason is because the property that you stay in, is most likely a liability because you will need to pay for the possible expenses as well as you will need a place to stay so you can't really sell that property unless you downgrade. In other words, do think of it as paying for your rent to stay.

So, why is there a difference in deciding whether to stay or rent? Not sure if you thought of it this way but personally i will have different criteria for purchasing property for own stay and investing. For me buying for own stay, I will look out for bigger space, psf not so expensive and then considering location and amenities. If I am looking for investing, I will go for location first before the size of the property.

The reason why I think this way is because having a bigger space is crucial for me and my Wife is because we will be expecting to have children in few years time thus we would need bigger space so that it won't be so cramp. So bigger space is very important to me if I am living in it. On the other hand, for investing, location, location and location. Without that you might/will not be able to get a good rental yield.

To sum up for Point one, my criteria for purchasing my property is size, mid to Low price and monthly installment is affordable.

2) New property or resale?

Of course new property will definitely be better as everything is brand new and not much renovation is required, new is good for me:) so we start our property hunting 2 years back( from 2015 till 2017). Initially we wanted to check the property market and what are the layout of the condos (including the various design amenities and etc) to understand the condo facilities and the cost as well.

Due to the lack of fundings we were not able to purchase any property back then even when highpark residence was launch at the very affordable price (so no choice have to skip that)

Up till this year where I have hit my target of 160k and more, which enable me to start looking for property with the intent to purchase. Back in 2016, my Wife and I already looking out for condo at Bukit Batok (le quest) which initially we thought that it will be affordable after all not much amenities around that area and it's not near mrt. Which makes us thought that the psf will be lower like around 1k psf. But we turn out to be wrong because the indicative price for 2 bedroom is around $1158 and when the actual sales it went up to $1200++. So which means a 2 bedroom with the size of 598sf would cost around $800k++.

The size is small and psf is high which isn't what we looking for. Of course we still went through the balloting process and we didn't purchase it. We were devastated during that moment but we didn't give up, instead of looking at the new property, we change our direction to look for resale property, those that Just completed 2, 3 years ago.

We spotted quite a number of units in the north east area like Punggol, Sengkang and etc. But the location is too far from our workplace. So although the price is attractive but the Travelling time really not worth it unless we change job. So our search continues until we found the one with 850 sf with the psf below 1k and is quite near to our workplace. The price is around the same as le quest 2 bedroom but the size is bigger, bigger by 252sf. To me it's totally worth it.

So this is my part one of my sharing, do look out for part two as I will share with you regarding the finances of purchasing a property.

Thank you :)

Short interview with seedly regarding managing financial experience

Hi all,

Recently I have received an email from seedly and conducted an interview with them asking about my experience in managing my own finances. I always believe that sharing experience with others is a good way of learning as the more I share, the more I am aware on my own experiences impacting other people. This, learning what are the improvement that I can made.

Not just be alone, there are other financial bloggers that were invited for this interview by asking them to share their experience, portfolio and advice to those who start out their financial journey.

Below is the link to the write-up and do visit seedly for more financial related articles!

https://blog.seedly.sg/investment-blogger-shares-best-financial-advice-investment-portfolio-jykl-saving-investment-blog/

Thank you and see you next time

Finally Got My New Home

Hi All,

As mentioned on my blog title, I finally bought my new home! Although it nearly clear all my funds but to me it is a big step for me! Like mentioned before, I am unable to purchase HDB, so before anyone asked, I have bought a resale condo (850 square feet).

This is a happy moment for me but also a mountain of debts coming for me as well since I am taking 30 years loan. With this, I have finally settle one of my goal which I kept mentioned in my blog since last year and the goal I had for myself (the green bar on the right), has been clear and will be updating the target bar soon for my portfolio.

So when will I be continuing my financial portfolio? should be early next year and will start my ball rolling again. Finally for a few months later, I can resume my portfolio and go forward to my passive income.

So this post will end here, and I will explain more on my purchase of property process in the next post so that you will have a better idea on what to expect when purchasing a private property.

So see you next time!

It’s not just Amazon’s fault

Retail stocks have been annihilated recently, despite the economy eking out growth. The fundamentals of the retail business look horrible: Sales are stagnating and profitability is getting worse with every passing quarter.

Jeff Bezos and Amazon get most of the credit, but this credit is misplaced. Today, online sales represent only 8.5 percent of total retail sales. Amazon, at $80 billion in sales, accounts only for 1.5 percent of total U.S. retail sales, which at the end of 2016 were around $5.5 trillion. Though it is human nature to look for the simplest explanation, in truth, the confluence of a half-dozen unrelated developments is responsible for weak retail sales.

Our consumption needs and preferences have changed significantly. Ten years ago we spent a pittance on cellphones. Today Apple sells roughly $100 billion worth of i-goods in the U.S., and about two-thirds of those sales are iPhones. Apple’s U.S. market share is about 44 percent, thus the total smart mobile phone market in the U.S. is $150 billion a year. Add spending on smartphone accessories (cases, cables, glass protectors, etc.) and we are probably looking at $200 billion total spending a year on smartphones and accessories.

Ten years ago (before the introduction of the iPhone) smartphone sales were close to zero. Nokia was the king of dumb phones, with sales in the U.S. in 2006 of $4 billion. The total dumb cellphone handset market in the U.S. in 2006 was probably closer to $10 billion.

Consumer income has not changed much since 2006, thus over the last 10 years $190 billion in consumer spending was diverted toward mobile phones.

It gets more interesting. In 2006 a cellphone was a luxury only affordable by adults, but today 7-year-olds have iPhones. Our phone bill per household more than doubled over the last decade. Not to bore you with too many data points, but Verizon’s wireless’s revenue in 2006 was $38 billion. Fast-forward 10 years and it is $89 billion — a $51 billion increase. Verizon’s market share is about 30 percent, thus the total spending increase on wireless services is close to $150 billion.

Between phones and their services, this is $340 billion that will not be spent on T-shirts and shoes.

But we are not done. The combination of mid-single-digit health-care inflation and the proliferation of high-deductible plans has increased consumer direct health-care costs and further chipped away at our discretionary dollars. Health-care spending in the U.S. is $3.3 trillion, and just 3 percent of that figure is almost $100 billion.

Then there are soft, hard-to-quantify factors. Millennials and millennial-want-to-be generations (speaking for myself here) don’t really care about clothes as much as we may have 10 years ago. After all, our high-tech billionaires wear hoodies and flip-flops to work. Lack of fashion sense did not hinder their success, so why should the rest of us care about the dress code?

In the ’90s casual Fridays were a big deal – yippee, we could wear jeans to work! Fast-forward 20 years, and every day is casual. Suits? They are worn to job interviews or to impress old-fashioned clients. Consumer habits have slowly changed, and we now put less value on clothes (and thus spend less money on them) and more value on having the latest iThing.

All this brings us to a hard and sad reality: The U.S. is over-retailed. We simply have too many stores. Americans have four or five times more square footage per capita than other developed countries. This bloated square footage was created for a different consumer, the one who in in the ’90s and ’00s was borrowing money against her house and spending it at her local shopping mall.

Today’s post-Great Recession consumer is deleveraging, paying off her debt, spending money on new necessities such as mobile phones, and paying more for the old ones such as health care.

Yes, Amazon and online sales do matter. Ten years ago only 2.5 percent of retail sales took place online, and today that number is 8.5 percent – about a $300 billion change. Some of these online sales were captured by brick-and-mortar online sales, some by e-commerce giants like Amazon, and some by brands selling directly to consumers.

But as you can see, online sales are just one piece of a very complex retail puzzle. All the aforementioned factors combined explain why, when gasoline prices declined by almost 50 percent (gifting consumers hundreds of dollars of discretionary spending a month), retailers’ profitability and consumer spending did not flinch – those savings were more than absorbed by other expenses.

Understanding that online sales (when we say this we really mean Amazon) are not the only culprit responsible for horrible retail numbers is crucial in the analysis of retail stocks. If you are only solving “who can fight back the best against Amazon?” you are only solving for one variable in a multivariable problem: – Consumers’ habits have changed; the U.S. is over-retailed; and consumer spending is being diverted to different parts of the economy.

As value investors we are naturally attracted to hated sectors. However, we demand a much greater margin of safety from retail stocks, because estimating their future cash flows (and thus fair value) is becoming increasingly difficult. Warren Buffett has said that you want to own a business that can be run by an idiot, because one day it will be. A successful retail business in today’s world cannot be run by by an idiot. It requires Bezos-like qualities: being totally consumer-focused, taking risks, thinking long term.