Monday, September 1, 2014

Even Singer Jason Mraz plans for early retirement before 40

Known for one of his famous single, "I'm Yours" which broke records chart for the consecutive 76 weeks, Jason Mraz is ready for early retirement before he reaches the age of 40.

Now, at the age of 37, he has one more album left on his contract with Atlantic records and then he plans to cool off his hectic lifestyle.

During the interview, he mentioned that he is ready for a break and the daily grinds he has been doing feels like a corporate job at times. His plan after he "retires" is to do more gardening, surfing, having a kid and donating some money he has generated from his album all these years towards a good cause. For this, he has started a campaign #RetiredAt40.

Fans of Jason Mraz will feel surprised by the news, and that's including myself. We all thought that he loved music, singing and songwriting and he probably is. Then why did he choose to retire from doing something he likes in the first place. Doesn't that defies... gravity?

The answer is probably he wanted OPTIONS

Yes, it is true that he probably has music in his blood but at his age he probably sees something which he thinks is worth doing more than simply churning out good music. At any case, he can always still come back to music anytime he wants with his talents.

That goes back to where we are in our daily lives. Some of us love our jobs and some of us don't. Many people think that finding a job that one likes is the holy answer to life. But does that warrant you not to plan for any financial planning for retirement?

Take myself for example - I am vested quite heavily in Reits in my portfolio and I am working at a Reits company right now, so it appears to be a good match. But if I have to be honest, it's probably 90% chores and 10% fun for me and it's probably the same for most people out there. I still do my job efficiently as my role needed me to, but to think that I will have to do this until retirement age is like being handcuffed in prison until the day I see light.

I wanted TIME and OPTIONS and this is precisely why financial planning becomes critical not just for anybody but everybody. Proper planning gives you time to adjust to your priority in life as you age at your own discretion without having the society to dictate the direction. I want to be able to take control of my life and not let anyone dictate them. It's not just about the money, it's about more than anything in life.


Saturday, August 30, 2014

29th Birthday Edition Post - What's the next target?

I turned 29 years old today and this is third edition of the birthday post. As a customary edition of this posting, I usually start by evaluating how I did in the past one year against the projection target set. Then   will post on something lighter on this birthday edition.

It's glad to know that I am doing relatively well on what I deemed as a very stretched target set at the beginning. My current portfolio for Aug 14 stands at $277,695, which is 13% higher than the original target of $245,920.

Some readers have asked me how I managed to put in $60,000 capital a year. This is really just a stretched target that I have set for myself. I doubt I will be able to do that unless the bonus or other income coming in are really strong for the year. With a kid now on the boat, it is even harder to inject that much capital monthly into the portfolio. The savings rate has also dropped significantly since.

But hey, so far so good so no complaint from me. The next target for next year will be the big one as I hit the glamorous age of 30 years old and we'll see how the portfolio goes. The market conditions will play a big part to succeed that.

Projection Target
YearYearStarting CapitalCumulative Annual Capital Injection Dividends on Starting CapitalTotal Yearly Dividend PayoutMonthly Passive Income
 *Above excel spreadsheet was extracted from

So, on a more relaxing note, I brought my family to Marina Bay Sands where we planned to eat the Pizzeria Mozza. It was tightly packed so we went to the neighbour to eat the DB Bistro.

It was a heavy spending for the meals. The four of us, and my baby (he didn't eat anything of course) consumed a total of $350 worth of food. It was quite pricey and the food was too westernized for my liking. I preferred a chinese meal where it might suit the overall taste of the recipient better. In any case, it was a good meal, a good gathering with the family, and it was my first birthday celebration together with my son :)

No present this year but no worries. I am probably too old to get mad for not getting any present anyway.

So that is it. I dream today and wake up tomorrow and when I do so, I live to look forward for the next 365 days to my big 30th birthday. Until then, I wish everyone healthy and happy.

                                          "Dream as if you'll live forever. Live as if you'll die today"


Friday, August 29, 2014

Mapletree Greater Commercial China Trust - Issuance of $75M Bond

Mapletree Greater Commercial China Trust has been granted provisional condition for their issuance of a $75 Million Bond on the 28th Aug and here are the terms and conditions:

- Issue Amount: $75 Million
- Maturity Date: 8 September 2021
- Coupon: 3.2%
- Issue Price: At Par Value
- Payment Date: Yearly on the 8th September

What does this mean for the Trust?

If we take a look at the issuance amount, it's really negligible and almost certainly they will not be used for any acquisition project for such an amount.

They are likely to be used for repayment purpose with their debt expiry profile looking like this:

  • 2014: -
  • 2015: $534 Millions (29%)
  • 2016: $666 Millions (36%)
  • 2017: $646 Millions (35%)
What this means is that with this issuance of debt, their costs of debts will increase marginally from 2% to 2.05% and gearing ratio will increase marginally from 38% to 39%.

I think with potential interest rate coming up within next year, we will see a lot of management action in other reits as well trying to either refinance their debts or secure as low interest debts as soon as they can.

Cache for example, has one of the highest debt expiry due for next year FY2015 at 60% and we can almost certainly see their costs of debts increasing and will affect the bottomline when that comes.

Wednesday, August 27, 2014

Treating Dividend Income as your Bonus

Bonuses are a very subtle object when it comes to performance management. And it is very strange to see that because as the name suggests, they are basically .... "bonus". So if your employer gives it to you, thank you and take it and if they do not, employees should not grumble too much.

You see, we, as employees get paid by sacrificing our human labor and time in return for a salary. So you do 40 hours a week and multiply this by 4 and they give you your monthly salary at the end of the month. Fair. If your employers refuse to pay you for this, you can rightfully get angry and feel unjustified.

Bonuses are a totally different thing. These days, they are being almost packaged as a whole remuneration but they are meant to be discretionary. Employees are much happier when they receive their bonuses because it feels like you do not have to work for it but yet are rewarded pretty nicely - which is almost like the case for dividend we will see later.

As an employee, there are 3 types of bonuses that I am currently getting.

1.) Annual Wage Supplement (AWS)

This is also known as the 13th month salary.

For AWS, employees generally receive the same amount as their last drawn salaries, regardless of position, tenure or performance rating. This type of bonus really has no effect on performance because it's the type of bonus which is customary at the same time every year at almost all companies we have here. Employees tend to expect it and there's no reason to work harder or smarter or put in extra hours to get it.

In fact, there are people who argue that this isn't considered a bonus. It is rightfully theirs to begin with.

For instance, February is usually the only month that you get paid "correctly" as they had a full blown 4 weeks to that month. In other months, there are usually 30 or 31 days depending on the type of months. So employees argue that they are being underpaid in other months. If we add those days up throughout the year, then we will get 29 days as being "underpaid" using this theory.

Jan - 3 days
Mar - 3 days
Apr - 2 days
May - 3 days
Jun - 2 days
Jul - 3 days
Aug - 3 days
Sep - 2 days
Oct - 3 days
Nov - 2 days
Dec - 3 days

Total = 29 days

2.) Performance Bonus

The second type is the discretionary performance bonus which usually links the two matrix together - company's performance and individual performance.

Usually, people will get very excited when the company's announces their performance bonus matrix to the staff. As these incentives are strongly tied up to how much the employees alone and as a whole contributes to the bottomline of the company, they really want to see strong figures coming out from this.

Again, another expectations that can come down really bad especially that it's difficult to control both the two matrices.

3.) Dividend Bonus

This is my favorite type of "bonus" amongst all the three mentioned above.

As a business owner having an equity stake in the company, I do receive these dividend income regularly as part of their quarterly or half-yearly distribution out of their earnings to reward shareholders. Instead of having my own limited time and effort working hard to achieve the above performance bonus we talked about, this is having other people time and effort working hard for your business so that you will be rewarded as a business owner. In other words, you have money working hard for you, not the other way round.

I currently draw around $17,000 per annum for my dividend bonuses from my portfolio and this translates directly to around 2.8 months of my current salary. The best thing to this is it gives me almost consistently increasing payout every year, even if I do not add anymore capital to it or better still even if I had completely stopped from working full-time.

So there it is - 3 types of bonuses for me and perhaps there might be more for other people. But take a look closely and decide for yourself which one that will give you sustainable payout throughout your life. 

Do you really want, for the rest of your life, attempting to justify your employers the bonuses that you deserved to get for the hard physical 9-6 work that you put in every single day or would you rather have these bonuses coming in even while you are enjoying your holidays on the other island of the Caribbean.

You decide.

Friday, August 22, 2014

"Aug 14" - SG Transactions & Portfolio Update"

No. of Lots
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
FraserCenter Point Trust
SembCorp Ind
Ascott Reit
Mapletree Greater China Commercial Trust
China Merchant Pacific
FraserCommercial Trust
ST Engineering
First Reit
Ascendas Hosp. Trust
Second Chance
Stamford Land

Total SGD


It almost seems like infinity since I last updated the previous month portfolio update (Jul 14 Portfolio Update) as I've started my new role in the new company and it was a tough first month to endure to be honest. Henceforth, the income that was invested for this month investment was memorable and reminded me once again how not easy it is that money came along. There are definitely much tougher jobs out there so I should really look on the brighter side. The rat finally gets his meal.

For this month, I have added 2 lots of Sembcorp Industries on recent price weakness heading southwards at $5.08. To me, the fundamentals of the company is still as solid as ever and the recent price weakness seems to be an entry opportunity. The utilities segment might have seen some tough growth in the Singapore sector but their overseas sector should be contributing and outpacing the local sector soon enough. The marines segment are doing fine in line with previous year so it is something that I am personally satisfied of. The urbanization is something that will be a dark horse for the next future years to come as this segment is becoming increasingly strong and optimistic.

The recent 5 cents interim dividend from Sembcorp seems to be a little surprising, considering that they don't usually gives this out at this stage. I think the reason why they do this is perhaps they've been repurchasing lesser share buyback at this stage as compared to the previous year. Based on the graphs below, it appears that year on year (annualized for FY2014) they have approximately the same amount of profits and CAPEX and it is only because of the lesser repurchase done this year that they have included the interim.

Based on the recent price weakness, it appears that the earnings multiple has become somewhat attractive to me at just around 10.14x. If you check out the earnings multiple based on the past 52 weeks, it seems to have hit the lowest at this stage. So I'll take that for now.

I have also decided to trim half of my investment in Second Chance this month as there are lesser directions on what the company is intending to do for the next 12 months or so. The latest news coming out from them was instead of selling all their properties units they decided to trim a third of those. I'm not sure if there are any near term catalyst for this stock to be honest as price seems to move almost sideways peak at $0.46. I'll have to hold the rest of the few lots and see where they go from here.

The portfolio now stands at 14 stocks and I may be looking to trim off one or two more which I have identified as potential weaknesses.

There are no changes to my Child Portfolio for this month as lao bei didn't receive any angbao money for him since. Well, I'm sure he is fine with it :D

There are a couple of stocks that I'm keeping a close look on e.g SIAEng STEng so maybe there will be a chance to add them for next month.

Until then, please stay safe and vigilant and look out for potential noise that might present good opportunities ;)

Thursday, August 21, 2014

Why replicating another person's portfolio can be dangerous?

All of us wants to earn good returns in the stock market.

While some retail investors do their diligent fundamental analysis about the company they are invested in, some others are simply taking the short cut by replicating other's portfolio - usually the person they admire.

A quick look at the hardwarezone forum and/or facebook and you can see many people either asking for advice or simply just replicating the portfolio for almost every stock they are invested in without having any justification for doing so.

For those of you who are guilty of doing so, note that doing this can be inherently dangerous for you.

1.) You are not aware of the average price the person bought the stocks. For example, I own 6 lots of Vicom in my portfolio and so can you, but if we are buying at a vastly different price, then you might be taking a much lower margin of safety (if there is any in the first place) should price heads south.

2.) You might be underestimating the different strategy between the party you are replicating and yourself. One might be inclined to go for growth stocks and highly cyclical stocks while another might be going for a slower pace dividend style of investing. The same strategy might not fits both parties.

3.) You might not aware of the portfolio allocation of the party you are replicating. Usually, financial bloggers would list down only their equity holdings in their blog and leave out the rest (e.g CPF, Cash, Gold, Bonds, Property) unknown. While he has some cash holdings and hedging at hands, you might not have one to mitigate your risks.

It is too easy and tempting to look at someone you really admire and photocopy the same portfolio as what he did. Nevertheless, the outcome is always going to be different. The risk and returns you undertake by doing that will be much more dangerous than what it really is.

Anyone you know that are doing that? Pls share your thoughts.

Saturday, August 16, 2014

Job Vacancy - Accountant and Portfolio Analyst

This is going to be a very unusual post that you do not often see in my blog.

Frequent readers of my blog would know that I am currently working in one of the Reits company listed in Singapore and since I've been in the company, I've been covering a number of roles including the two mentioned roles above.

In this regard, I am here to look if there are anyone with the right criteria and skillset who would be keen to explore more on the Reits industry to apply for the roles. I do not have the specific JD at the moment, but for those who are genuinely interested and have the right skillset, I can forward your resume right to the hiring manager to arrange for an interview. In any case, both positions require approximately 3-5 years of relevant experience and accounting/finance background and the candidates must have the passion to learn about the Reits industry.

For those who are interested, you may leave me your email in the comments section and I will get back to you so that you can send over your JD.

* I do not wish to disclose the name of the company over here so if you are genuinely interested and qualified, we can discuss more in our email exchanges.