Friday, May 21, 2010

Reality check 2

This is more of a personal reminder not to over invest in the market. There's a lot of uses for my cash these days and the problem becomes a little bit more thorny when the market is showing more value these days, after crashing and crashing when the Olympian Gods turned their backs on the troubled Greece. Better do a little back-of-the-envelope calculation to ensure that I have sufficient cash for immediate use.

Here's a quick breakdown:

1. Housing - 110k

This gets a little bit more troublesome since I entertained the idea of getting a 5 room flat. This is different when I started writing about some details with regards to the amount of cash I needed. Just based on 4 room with a price tag of 400k, I need around 60k cash. If I get a 5 rm, which cost around 500k, I think I need to raise that amount to 110k cash.

2. Wedding - 32k

A few things are set in stone. I already got the suffer rings and the package, and paid for a deposit for the hotel. What's left are some miscellaneous and the rest of the banquet. For worst case, I do not assume that I can get back anything after the banquet. I know I know, I'm sick.

Suffer rings + Package + deposit = 9k
Miscellaneous = 5k
Hotel banquet = 18k

Maybe I should dangle a carrot in front of me while carrying my burden...

Drum roll please....... Ladies and gentlemen, I need 140k by end of the year. Hmm, based on what I have now and my savings target by end of the year, most likely I will be able to hit 85% of the target without any help from the market. THAT is quite reassuring. This means that I can tap maybe 10k of my reserves to average down some holdings, but when the market rebounds, I'll have to take an equivalent amount or more of my capital out. In other words, USE SPARINGLY.

Okay, by next yr, I would need to renovate and furniturised my new home. Based on the estimate I did in the previous post, I would need 50k. But that's another 365 days more to go - I'll just walk ahead by putting one foot ahead of the next. The situation might change drastically by the end of the year, so no point planning so far ahead.


JW said...

The "problems" of being self-employed... little or no CPF...

Forced savings does help at times; you don't even realise it's missing.

la papillion said...

Hi JW,

CPF is a form of forced savings. I'm doing it myself anyway. The problem is that I do not have the employer's contribution part and the interest that comes with it.

However, if getting that part means that I've to subject myself to their whims and wishes, I'll not miss it. I want to believe that I can make up for that 'lost' salary and much more by being self-employed.

I hope I do not regret when I'm much older.

JW said...

Hi LP,

there's no need to subject to their whims and wishes. It depends on choosing the right company, although it's easier said than done.

CreateWealth8888 said...

Better be realistic when you are just an employee. Staying employed is a JOB (Just Obey Boss). It is either you are a HORSE, COW or PIG in your company.

That is the reality of corporate life and only fews can escape from becoming COWS. Never be fooled by your job security as an employee.

beary said...

That's a staggering amount by any means. Glad to know you can almost hit 85% by your own means.

I guess I am luckier in the sense I do not have to spend so much on my housing with your COV that you have to pay.

But yes, after reading your post, it is back to the drawing block for me since the reality of spending a substantial sum on renovation has not sunk in on me yet.

la papillion said...

Beary bro,

It's okay one lah. Most of my friends borrow money for renovation, and pay back within 2-3 yrs. Renovation can also wait since yours is more or less done up already. Whatever you do, just don't do it in batches. Renovation is extremely disruptive to your peace at home, so I would rather save up one shot to do everything rather than do living room first, wait, then do bedroom etc.. You end up doing much more work.

Huat ah :)

PanzerGrenadier said...


From my own experience, renovation need not be too fancy as one tires of one's home no matter how nice in a few years' time.

So long as it is clean and clutter-free, it will be a nice place to relax in.

Be well and prosper.

la papillion said...

Hi PG,

Nah, not gng for fancy stuff. Just decent will do :) I'm just factoring a safety margin in case the reno goes out of budget, which I cannot allow that to happen. So I rather plan it to be more expensive than it really is.

nocturnal stallion said...

Hi LP.

Regarding: Suffer ring

"I think when you're buying jewelry for the woman you love, financial considerations probably shouldn't enter into it." -Charles T. Munger

Best wishes for your wedding.

la papillion said...

Hi noc stallion,

I'm just kidding when I'm mentioning suffering :) I bought the best that I can afford for a wedding band, and we're having so much fun wearing it even before our wedding day - it's fantastic :)

The interesting thing is that both me and hers are of the same size - so we took turns to get to wear the diamond studded ring :)

JK Holdings said...

which area you are looking for a HDB ? have you bought one ?

Well, I can give you some advice on that...

I just bought mine last year June at Toh Guan area...

I can share more on renovation as I have done twice, one in year 2007, and one in year 2010... with the same interior design...

la papillion said...

Hi JK Fund,

I'm looking at around the east side..bedok, tampines there :)

Thanks for sharing with me :)