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!

What Is A Good Investment Plan (Part Two - Goals)

Hi Everyone,

This post is the continuation of the "What Is a Good Investment Plan" - Part One - Financial Needs. 

Question on what Is A Good Investment Plan?

Recently (After I posted the part one on what is a good investment plan), I have received emails on asking that why a good investment plan requires us to know the financial needs, goals, liability and etc. rather than finding a high returns in both capital and dividends, isn't that the most important thing? 

Of course, high capital gain and dividends will certainly be welcome by me (who wouldn't want to earn more right?), however,  the "Give and Take" analogy still exist in investment plan. Whatever the investment plan can give you (interest, dividends and capital gain) there is always something that you will need to give in return (time, money, energy and etc. depending what kind of investment plan are you taking)

For example, if you purchase a saving plan, you will need to take into consideration of the monthly payment, the duration whereby you are unable to touch the money, the consequences of breaking the contract and etc. So understanding the "Give and Take" analogy, you will have to asked yourself, whether is this a good investment plan for you. Thus, you will have to study your own financial capabilities, liabilities, everyday needs and what is you goal that you would want to achieve.

Certainly, different people will have different ways to measure what is a good investment plan. Some might include the rate of return (the higher the better, ignoring the risk involved) and etc.

So without further ado, lets continue with the part 2 of "What Is A Good Investment Plan"!

What Is A Good Investment Plan - Part 2 - Goals

Having a goal for investment planning is important because it can help you decide whether what kind of investment plan that you can go for. For example, your plan is to be able to save up enough money for your child's university fees in 20 years time. So certainly, you will have to look for some saving plans so that you can contribute a sum of money to the plan so that you will have sufficient money for your child's school fees. 

Another example is that, you want to have a passive income per month so with that passive income it can help to offset your monthly bills or even offset your monthly expenses without risking much of your capital. For this, you will have to do shares investment, bank interest like OCBC 360, UOB ONE or BOC SmartSaver account for high interest and etc. 

So as you can see, there are many ways of creating an investment plan. However, a good investment plan requires you to really understand what you want to achieve so that you can have a better idea on which plan to go for.

Setting Your Goal

Setting goals isn't as easy as you think as you might think that we just write down whatever we hope to achieve and that will be the goal for me. This is a true statement however, if you set your goal too far, you will lose sight of it and naturally forget about it. 

So the trick to set your goals is to split them into different milestone or different terms. For example:

The picture above shows a short term goal / one year milestone of my personal goal, this will push me harder to reach this milestone before moving on to the next one. So let's compare with this goal setting:

I hope to generate $80,000 per year with my passive income with 2 private properties so that I can retire comfortably. 

If you compare these two, the second one will take years to achieve, if you are just a normal salary worker in Singapore. so naturally, you will either become too aggressive which resulted in loss of money or you naturally forgot about the goal you have set for yourself because it is too far away from your current status.

So setting your goal into different milestone will be an idea way of monitoring your progress and enables you to have the push to reach your goal!

So with this, you will be able to know what type of investment plan you should be aiming for and to further decide which investment plan you should go for, the other two factors will need to come into play which is the financial capability (current savings and income) and liability (loans, debt and etc.)

What Is A Good Investment Plan (Part One - Financial Needs)

Hi Everyone,

Before we move into this topic, it is essential for the readers to know that I am not a certified financial consultant or adviser, just a normal financial blogger who is sharing my own experience when it comes to financial savings and planning. So do not 100% follow my view on this matter and it is always better to do your own research. 

Okay, now let's come to my view on what is a good investment plan. Before we dwell into this topic lets first understand what is an investment plan

Definition on Investment Plan: 

The placing of funds into the proper investment vehicles based on the investor's future goals, time horizon, and priorities. This also takes into account the safety of the investments as well as liquidity and level of return. Ideally, proper investment planning will allow the investor's funds to produce financial rewards over time.

Source: http://www.investorwords.com/11657/investment_planning.html

With this definition, so what is a good investment plan? Personally, I believe that a good investment plan is a plan which can address your financial needs and goals that are within your financial capability and liability. Once you can address the 4 components above, you will be able to start planning for your investment plan. 

Financial Needs

So let's start with financial needs, for financial needs, this is where your monthly expenses, come along. You will need to set a side some of your monthly budget in order to maintain your currently lifestyle.

Budget/Expenses

So with a typical point of view, it will be something like what I have for myself as shown in the picture below, whereby I keep track of my monthly expenses. This will be my initial budget for my financial needs. 

So after getting your budget, which is the first step, you will have to follow it through for a few months in order to ensure that this budget can fit into your lifestyle. So while you are working on your expenses, there are somethings that you can take note of which is the area that you can reduce your expenses without sacrificing your lifestyle needs. 

Reducing Expenses without Affecting Your Lifestyle

Many people will asked, how do we cut down our expenses without affecting our lifestyle? Certainly, there are many ways that you can do it, by firstly cutting down those monthly recurring expenses. Let's take an example of the following expenses

Mobile Plan: $62.90 - 3GB data per month

Netflix subscription - $16.98 - Premium Plan

Internet Subscription - $59.90 - 1GB Fiber plan

Gym Membership - $128 per month

So, the above expenses are the common things that we use and pay for in our current life, so we can start off by reducing the expenses for each individual item. 

Mobile Plan: $62.90 - 3GB data per month - Change to another Telco, with the same data per month for $42 per month - $20.90 reduction

Netflix subscription - $16.98 - Premium Plan - Change to standard plan for $13.98 per month if you do not have HD TV - $3 reduction

Internet Subscription - $59.90 - 1GB Fiber plan - Change to another Telco with 1GPS for $39 per month (If you only use it to watch video and surf net, not necessary to get such an expensive plan) - $20.90 reduction

Gym Membership - $128 per month - If you are not a frequent Gym goer, can consider using pay per usage community gym which is around $3 per entry. ($3*30 = $90 - provided you go to gym every day) - $38 reduction or subscribe to cheaper gym plan

If you take a look at the reduction, and you still maintain your current lifestyle, with this slight modification, it can help you to save around $80 per month. Although it looks little but every single bit counts.

Finalized Monthly Expenses

After adjusting your monthly expenses, you will have your tentative budget for your financial needs. Do it for a few months and you can see that you can save more money and cut down your monthly expenses without affecting your lifestyle. This will be your financial needs for per month basis. 

So with this, you are one quarter towards the start of planning for your investment plan.

Price of Retirement

Hi Everyone,

Today I have come across an interesting blog which talks about the price of retirement. Price of Retirement. Understand that there are many blog are talking about how much money or should I say how much passive income should we go for before we can retire comfortably. 

Retirement can be very costly because when you officially declare yourself as a retiree, not only that your source of income will be gone but also you will have ample of time thinking of what to do. I understand that many people will not think the latter as a problem. Really, why should I complain if I can slack at home watch TV, wake up late and go for a good breakfast while others are rushing for work.

So each of us has a price for our retirement, so what is mine? and what is yours? 

Mine is basically very simple, I would need 2.5 times the amount that I intent to spend per year, in other words, if I spend around 1.1k per month, plus my family expenses around 1.5k per month and house installment 2k per month (if I manage to purchase condo), so I will need at least 4.6k and we round up to 5k per month. 2.5 times for me will be around 12.5k per month, so per year is around 150k. That is quite a lot!

So how much do I really need to generate such a huge amount of income?

If lets say my dividend yield is around 4.5% then I would need around 3.334mil to reach my retirement price!

If lets say my dividend yield is around 5% then I would need around 3 mil to reach my retirement price!

If lets say my dividend yield is around 5.5% then I would need around 2.728 mil to reach my retirement price!

Now I am 28 years old, so lets say I work for 22 years. So 22 years from now I should at least have 3 mil, so each year I would need to save around $150,000.... I must be dreaming, $150K is not a small sum to save per year. My yearly income didn't even reach 6 digit!

But as I say, this is a progressive goal, $150k might seems to be a huge figure, but if I start to earn a small passive income now, it will certainly make a difference! 

As I am going to get married soon, so I will most probably start from 0, after my wedding and down payment for my 2 bedroom condo next year. I will be getting allowance from my wife instead when I get married so that she can monitor the finance for the family. I will probably guide her on where to save and which instrument is better for getting good yield with low risk.

As for me, I will go for shares with the little savings from my allowance and dividends from my shares. 

I assume myself getting around $900 per month (for travel and food during weekday and weekend), and I think I will save around $350 per month. With that amount, I will set myself to purchase STI EFT every half a year so that I can gain stable dividends from 29 years old onward. So If this works lets do a calculation

For 20 years, with compound interest, I will be able to achieve $115K, when I reach 49 years old. Not bad from my portion and the main account with my wife, would have been much much more than what I have! Probably 15 to 20 times more than mine when I am 49 years old. So with a little bit more push, we will be able to attain financial freedom if we let it roll for 5 to 6 more years. 

So, this is my retirement price, what about yours?

Conservative or Aggressive

Hi Everyone,

I am been looking through my portfolio management tools by DrWealth (If anyone still does not know what is DrWealth, do check out my previous post http://jyklmoneyblog.blogspot.sg/2015/03/drwealth.html), the analysis that I have gotten is pretty unhealthy in the sense that I have more cash flows than the amount that I have invested in shares. 

As you can see the graph above, that is my overall portfolio that I have currently. more than 70% of my portfolio are cash and only less than 30% of my portfolio are in investment. Certainly, this has indicate that my portfolio health is rather unhealthy but the reason why I have so much cash is because of OCBC 360. Because with OCBC 360, it gives me 3.05% returns every year, which is pretty good as compare to other banks. The risk of this is much much much lower than investing in shares. 

Although 3.05% wont be able to beat the inflation rate but for me, I am quite a conservative person. So I prefer this strategy first until OCBC 360 remove this promotion. After that, then I will focus more in investing in stocks and open other bank account to gain more interest.

Personally, my investment fund wont exceed 45% of my total portfolio because I am a super conservative person and I am still new to shares and investment, it will be wise for me not to go all out if not I will get myself burned!

So how about you? Are you an aggressive or conservative type of investor?

Invested in AIMSAMP Capital and Cambridge Industrial Trust

Hi Everyone,

I have invested in these two industrial REITs which is mainly focusing in Singapore. 

7 lots for Cambridge Industrial Trust and 5 lots of AIMSAMP Capital REITs. Well, it seems like I am moving towards on focusing on REITs and my last REITs that I am aiming is First REITs because of it future growth that I am interested in (Healthcare!). 

I will get this REITs either by today or tomorrow and it's no rush because I am waiting to get down a bit more before making my purchase. 

Of course many people will ask me to avoid REITs due to the upcoming increase in interest rate but I still believe that based on their portfolio, these REITs will still be able to do well, if not maintain a bit stable (I presume). 

Because the market is unpredictable, thus, I do not really focus too much on a single stock, which is why I only purchase a small amount on each REITs to test water to see which REITs will do well for this year 2015.

Personally, I believe that First REITs and SoilBuild will do well, of course the rest of the other three REITs will do okay as well. After purchasing First REITs, telco will be next as Singapore telco already caught my attention in purchasing them :)

Do note that my updated shares will be listed at the right column of this blog.