Spendthrift youth?

I came to know of a story regarding a female private university student who had spent 11k of her parent's money from the start of the semester to now. The semester should be about 4 months, starting from the beginning of the year. It's really incredible because at 11k for 4 months, it's about $2,750 per month of expenses. And she hasn't even started earning her keep yet! This is not the first time I've heard of spendthrift students, but this must be one of the highest maintenance kid that I've heard of.




According to a friend of hers, I came to know that it's because she had taken taxi to and fro everyday. Since she had lived a fair distance from the university, she had to spend around $60 per day on cabs on average. This means that in a span of 4 months, she'll have chalked up 7.2k worth of transportation fees alone. With this amount, it'll be better getting a car rather than taking public transport. I guess the rest of the 3.8k must have been spent on other stuff. It's really amazing to me that a young lady can really spend so much money in 1 month. 2.7k per month can be the typical salary of a worker in Singapore.




This is not the end. There's another story of a student from an elite school in Singapore overhearing that his friend is asking for 3k pocket money from his parents so that he won't have to keep pestering from them again and again. To ask for 3k per month for a student is really something, especially compared to my own pocket money. My pocket money in secondary school per month (estimated, because it had been a really long time) is around $80, rising to around $120 in junior college and finally $200 in university. That sum of money includes everything that I need to buy for that month, like transportation, food/drinks, books, misc fees for school etc. It is all inclusive. It had been roughly 10 to 15 years since I had left school, so had the pocket money rose up by almost 100 times? Had the price of food and entertainment and books rose up by 100 times too? I doubt so.

Perhaps this is the kind of parenthood that a double income household can give to their kids. Instead of giving time to their kids, they had to work and perhaps money is used as a compensation to their kids for that lost time spent together. This is so wrong.




It doesn't really matter if the parents can afford to give these extravagant sum of money to their kids. This is really about sending the wrong signal to their children about money. I wonder how many of these kids will be able to sustain the lifestyle that they must be enjoying right now during their schooling years. Once a high maintenance lifestyle is established, it's going to be very hard to live a more frugal kind of living. What if they can't earn that kind of money to sustain this kind of standard of living? It's just a ticking time bomb for these impressionable youths.




If this is the kind of behaviour that the youths are doing even before they start work, I want no part in this. I hope that they do not wake up one day in a rude shock that they are deeply in debts for their excessive wants. In the end, I also hope that their parents would not be the ultimate ones to suffer because of the actions of their kids. Seems like we're living in a very different world now, so may this be a wake up call for all parents!



*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

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Hyflux preference shares Part 3

It seems like hyflux preference shares issue is getting a lot of attention lately. Besides splashing nearly a whole page on the local newspaper, it is also widely commented in internet forums and blogs. To see how immense the interest in the hyflux preference share is, one only have to look at the explosive increase in viewership after I've posted the two articles on my opinion regarding this fund raising exercise.

This is not the only indicator of the immense interest in the preference shares. Here's a few more:


1. The owner of finance.sg had his site banned by adsense (the appeal is still pending), likely because of the huge spike in traffic after AK and me posted our opinions on the preference shares.



2. The placement for the preference shares is so hot that the bookrunner, DBS, had received orders almost seven times the planned number of shares (i.e. S$200 million offer size). As a result, the offer is prematurely closed since the maximum number of allotment for placement cannot exceed $200 million.



3.  Since the placement is oversubscribed by 7 times, the allotment for the placement is roughly 14% (1/7 = 14.28%). This is in line with what I've read in the forum for those who had been allocated their placement shares. It range from 10% to 15% roughly, based on a small sample of people who had mentioned their allotment percentages.




I was quite shocked by the strong demand for the preference shares, frankly. It goes to show that there are a lot of money floating around waiting to be deployed. Is that another indication that the bull run will carry on? But one thing for sure, the offer for the retail tranche of the preference shares would be pretty hot. Perhaps you can only get the minimum of 1 lot unless you really put in a lot of capital. Most likely it will be more oversubscribed than the placement shares, because those who did not get enough from the placement would likely try their luck in balloting for the retail tranche. Of course, you have to add in a huge number of those who would stag this preference share to get a quick buck.



If it's oversubscribed by 7 times, you probably need to put in 70k to get 10k (100 shares) of the preference shares. If it's oversubscribed by 10 times, you probably need 100k to get 10k worth of it. You can do the math yourself. But know that there is only 2 million shares to go around for everyone, so maybe some might not get any at all. Judging by the huge response of the placement, it seems like many would likely try their hands on the balloting to sell on the first day.



It'll definitely be interesting to see how the opening of the Hyflux preference shares be like on 26th April. Would hyflux bring big bucks for the holders? haha :)

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Hyflux preference shares Part 2

Here's part 2 of the Hyflux preference shares commentary. In part 1, I've talked about the technical details of the offer, so now we can concentrate on whether it is a good buy, which is the ultimate question.  Let's take a look at the preference shares offered by the banks here:

Most of them are ranged between 4 to 6% pa. Hyflux is issuing theirs at 6% and subsequently stepped up to 8% pa if they did not redeem by April 2018. But the company issuing these preference shares are banks, which are ranked above normal companies in my opinion, so naturally Hyflux will have to offer a higher yield to account for their more risky circumstances. Banks are financial institutions that are integral to a country and they must not be allowed to fail, especially in Singapore's case, lest the public's confidence in the financial system be wavered. Can the same be said for Hyflux? No matter how good the terms of the preference shares are, if the underlying company that issued it sinks, all the high yield offered are moot. I can't tell what I'm going to eat for lunch later, so I don't have the predictive powers to determine if Hyflux is still going to be around in a few years time to give me my dividend.



I would have thought that people who preferred preference shares are those who do not want to worry so much about the ups and downs of the market, since if they had bought it at par value, the shares would also be redeemed back at par value too, so the fluctuations of the price in between does not matter to them. In the meantime, they just have to collect the dividends and live their own life. Would they care to look closely at how the underlying company is doing from time to time? I would think not, because such investors should want a fuss free kind of passive income. Would hyflux offer such a safe, fuss-free haven, being the underlying company issuing the preference shares? I do not know, but I would bet my money on the banks anytime if I truly want a fuss-free kind of investment instrument. Besides, I do have a preference share by HSBC bought below par value, at a rate of 6.4% pa (but denominated in USD). I do not even care about what the price of the shares, which is exactly what I like about preference shares. If any preference shares that I bought do not give me this kind of feeling, I would avoid.



The dividend yield for Hyflux is around 2.5-3% pa. Do you wonder why it is low? Hyflux is a growth company, hence the need for cash necessarily reduces the amount given as dividend. They must obviously think that they can give you a better returns for the cash than you could. The good thing about putting your money into the ordinary shares of Hyflux is that you can participate in the upside of the company's growth. If the earnings of the company grew, the price will also rise (eventually). The bad thing is that if all these scenario didn't come to fruition, you'll end up with a possible loss. On the other hand, buying the preference shares limit the upside in terms of price appreciation. Preference shares do not move too much upwards, though it can certainly plunge downwards. Just take a look at the preference shares of the various banks during the financial crisis. The downside for preference shares is limited though, unless the underlying company fails catastrophically, because the lower the share price, the higher the yield will be. There will come a point in time where the yield is so attractive that buyers will step in to stop the downslide. If you buy at par value and hold it until redemption, there will be no capital loss at all.



My point 4 in this post on preference shares still sums up my decision on this one. I would look at it only when the price goes below the par value. I think you can still make money out of this (in fact, I think it might be a good stag). Given that you can even use up to 35% of your investible savings in CPF (the balance in CPF ordinary account plus the net amount withdrawn for education and investment) to apply for this and get a yield higher than what the CPF rates can give you, it might be worthwhile to invest some money into it.



So there, the odds are laid out in front of you. Go ahead and decide what to do with your money.



*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

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Hyflux preference shares Part 1

Hyflux recently announced plans to offer a 6% cumulative, non-convertible, non-voting, perpetual preference shares to raise funds. The purpose of this fund raising exercise is not known (or I've not read closely enough in the prospectus here). Regardless, let's see if this is worth looking into. First of all, let's take a look at the terms of the offer.



Preference shares is a type of hybrid between bond and equity (in fact, closer to bond than equity). The holder of this instrument will be entitled to dividend at 6% pa, payable semi-annually on 25th April and 25th October every year. Since this preference share is also perpetual, which means that unlike a bond, there is no maturity period for which the issuer will redeem back the bond. However, there is an option for the issuer to redeem back the preference shares on or after 25th April 2018. Take note that this is a right solely to be considered by Hyflux, not an obligation. If they chose not to redeem it back on or after 2018, then they will step up the dividend rate from 6% pa to 8% pa. If they chose to redeem it back, they will buy it back from you at par value. I will explain what's par value shortly.



Interestingly, this is one of the few cumulative preference shares I've seen. The bulk of the ones I've seen are non-cumulative. Cumulative means that in the event that dividend is not given for 25th April and/or 25th October, the payments are accumulated and paid on the next payment date. In other words, the payment are cumulative. However, dividends are not guaranteed. From what I understand from preference shares of banks, if dividends are given to ordinary share holders, preference shares must also be given theirs. This makes it almost as good as guaranteeing the dividend if the track record of dividend given by the company is anything to go by.

What's par value? In this case, it is the issue price of the preference share at S$100 per share. This preference share will be listed and traded on the main board of SGX from 26th April 2011 onwards. Since you bought it at $100 per share and it is traded thereafter, the price of the share will go up and down according to factors like interest rates, macro-societal factors and just basically, market sentiments. This means that the price can go above $100 or below $100. But on 25th April 2018, should Hyflux choose to redeem back the preference share (again, it's a right, not an obligation to do so), they will buy it back from you at $100 per share, regardless of what the share price of the preference share is at that point in time.



Those who had bought the share at $100 and held it till Hyflux redeemed it back in 2018 will realise no capital gain at all, since it is redeemed back at par value (which is $100) too. However, they get to keep the 6% pa for the period they are holding the share till 2018. For those who bought at a price of more than $100 after listing, they will make a capital loss (hopefully the dividends collected will more than cover up that loss). Finally, those who had bought at a price below the par value of $100, they will make both a capital gain as well as all the dividend collected till redemption. Should Hyflux chose not to redeem back in 2018, they will step up the dividend rate to 8% pa, instead of the usual 6% pa. You can treat this as their 'punishment' for not buying back the shares from you.



The offer for the preference share is up to S$200 million in total value (i.e. 2 million shares are offered) to the public, with an option to upsize the offer to $400 million if there is unsatisfied demand under the reserve and/or placement offer. You can expect it to be quite illiquid and characterised by huge gaps between buy and sell bids after listing, judging from the daily quotes of preference shares offered by other companies. After listing, the shares are traded in board lots of 10 shares, so buying or selling 1 lot of preference shares will be around the range of $1000 in value. As a sidenote, there is no voting rights attached to the preference shares, so holders are not entitled to attend or vote at AGM.



If you choose to buy it,you have to act fast. The public offer will open at 9 am on 14th April 2011 and close at 12 noon on 20th April 2011. The process is through ATM like all other IPOs, so you will have to pay a small fee of a few dollars for the application. Other than that, there is no brokerage charge if you apply through ATM. For the balloting through ATM, you need to put in a minimum of 100 preference shares (i.e. S$10,000 in total at $100 per share) and subsequent integral multiples of 10. In other words, the minimum you can apply for is 100 shares, followed by 110 shares, 120 and so on. You cannot apply 101 shares or 102 shares.



For those who like a surer bet, you can try calling your DBS Vicks online broker (since the sole book runner is DBS) to ask for a placement, but will be subjected to brokerage charges at a percentage of the total value. The difference between balloting using ATM and placement through your broker is that in the former, you do not pay any brokerage fees and thus are not guaranteed to get the shares, while the latter you'll have to pay a fee and will be guaranteed an amount given to you by the broker.



I'll discuss about the ultimate question - whether it is a good buy or not - in the next post. This is getting very lengthy as it is now. In the meantime, you can read about other posts I've blogged in the past regarding preference shares:


Preference shares part 1

Preference shares part 2

Preference shares part 3

Preference shares part 4



*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

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The difficulties of investing

The most difficult part of investing is the fact that repeating the same thing in different times will end up with different results. That is both frustrating and difficulty to correct. Imagine you are trying to learn how to ride a bicycle. You do an action and immediately you can see the results, hence the learning cycle is reduced. You practically learn how to cycle by trial and error alone. But in investing, the duration that transpired between the action and the results could be a few years apart. If you invest in this company, it's only after a period of time, ranging from a few months to a few years, before you can see the fruits of the action that you sowed. This makes correcting for error in methodology extremely difficult and makes the learning curve steep and treacherous. Do you really want to invest in a company and realizing that it is a dud after a few years, thinking throughout the entire holding period that you need time for the fruits to mature?

The learning curve to ride a bicycle is shorter because of the immediate feedback

This reminds me of an example. Some of the schools that my students are studying in do not have the habit of giving back the test results back to the students. In doing so, the students are deprived of a chance to learn from their mistakes. In other words, they can be doing a thousand tests and still not learn what is right or wrong since they have no feedback mechanism that can enlighten them otherwise. Likewise, investing now and knowing the results after a prolonged period of time can make the learning curve in investing necessarily steep and long. In investing, it helps to be a good student of history, because while circumstances vary, the human emotions that interplay between buyer and seller stays constant. All the panicky market crashes and euphoric bubbles are there for all of us to see, but not all will look at it to learn.




Throughout the whole market cycle, there are times when its profitable to trade, time to invest and a time to gun for yield. I think the key question is when to do which method, in order to get the best out of the current market conditions. In this aspect, I think Anthony Bolton's approach of doing different things at different times is very enlightening. I find his approach well balanced and not siding with either extremes of doing only trading or only investing. You can read more about him in his book "Investing against the tide". That being said, to really learn this, it'll take several market cycles of bull and bear before one can confidently say that one can do it well. To do this well, you have to learn different methods of playing the market and to know the right time to do each method. Difficult?

I quite like this book - it gives a very balanced view of investing vs trading

I offer an alternative that may prove tempting instead of learning how to juggle so many things in one market cycle. You can be a specialist, focusing all your attention to one single trick. You read up, you research, you practice all the time for that one single trick. If the conditions are not right, you wait as patiently as a fisherman with your calm facade suppressing the eagerness to hook a fish. Once the right conditions appear, you strike out using all the training that you've been prepared for. The hardest part of this alternative is to sit on the sideline waiting to do your single powerful trick and waiting patiently in the meantime. It is not easy doing nothing and believing that it will help you get more out of the market.




Then know this, it is even harder doing nothing when people all around you are shouting for action and making profits from the market, while you are doing nothing and believing that the right conditions for your trick is not here yet. Who ever says investing is easy?



*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

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I'm a big girl now, mummy

I came across this wonderful poem while reading this book by Virginia Ironside, titled "The Virginia Monologues", which I'll share in this post. I picked the book up in the library yesterday when my class got cancelled in the evening. I love moments like this - a sudden god-send gift to relax. Since it's too late to arrange a dinner with my wife, I just went to the library to see if any books can find me (I realised that we never find books. Books find their readers). The book just screams out to me when I was ambling through the shelves without any particular aim in mind. This book is about growing old and why it's great to grow old. When is the last time you've seen a book like this, extolling the virtues of getting old?



The old age theme seems to catch up on me recently. Just over the last weekend, I was at Suntec city when they had a convention suitably named "Active aging". In that convention, you see all sorts of interesting stuff, from will writings, general insurance, cooking classes, HDB's studio apartment with a twist for greying population, line dancing, games (including kinec) and many more. There's even a section where you can try on this very fun thing called kangaroo jumps. Imagine a roller blade with the wheels, mounted onto two crescent shaped arcs, forming a spring of some sort. You just wear it and start jumping! I saw a lot of seniors wearing it and start bouncing around. Since I was there for some time (I tried it and wifey even bought a pair), I've never seen one who failed to balance. Coupled with the huge 25% discount, I think the product flew off the shelves.

You wear, you jump - the aptly named "Kangaroo Jumps"

Have you ever felt this way too? Suddenly, it seems that everywhere you turn, things or events of similar theme just happens to you. For me this time, it seems to be the elderly theme. I went to the convention without intending to do so, and I borrowed a book on aging without planning to do so.


Here's the poems I am talking about. It's from the book and I find it very meaningful. Enjoy.

I'm a big girl now, mummy,

I can walk, holding on to a chair.

and I can feed myself with a spoon

and I can say 'Moo'.

I'm a big girl now, mummy,

I can go to school

and I can cross the road all by myself.

I'm a big girl now, mummy,

And I can come back home at whatever time I like,

You're bloody lucky I come home at all!

I'm a big girl now, mummy,

I sit on committees

and boss other people around

and lay down the rules about what you give my

children to eat if I let them

stay with you.

I'm a big girl now, mummy,

And I can face death calmly.

And then we will meet again.

Mummy.

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The posts that never made it

The title is a little misleading. In this blog post, I will put in some posts that I canned away before it is even published. The reasons will be stated besides each canned blog posts too, so that you can agree or disagree with them, haha! As mentioned in previous postings, it's hard to keep up with new posts every now and then, so the only approach I found viable is to have ideas jotted down, as they come along. So, when I'm walking along the streets and an idea hit me, I'll whip out my handphone and type in the rough idea of what I'm going to blog in a notepad application found in my handphone. This way, I'll keep track of the new ideas and if I can flesh it out, I'll blog about it.



Anyway, here goes:

1. The 5 most expensive things I've bought

I almost immediately brushed off this blog post after I've keyed into my handphone. It doesn't excite me nor do I want to dig out my records to see what I've got and the costs of each of them. The initial idea of this post is to veer towards the direction of having a lifestyle that do not require high maintenance or surrounded by branded goods. I think the comments that follows will be quite interesting to see though.

Killed ideas

2. Relative tragedy

This is right after the Japan earthquake/tsunami in March 2011. I've wanted to blog about how our personal troubles can be diminished (or enlarged) by comparing how others fare. I had this inspiration because as I was travelling, I've heard people complaining about all sorts of things. It could be that the bus is late, their school work is mounting up, tests are coming and so on. In light of the disaster happening in Japan, somehow I feel that their personal tragedies seem minute. I wanted to talk about this comical contrasts but decided against it. I do not have enough worthy examples and do not want to gloat over others' problems like that, hence I canned this post.

3. How do you know you've been converted as a soldier after ICT

This post is inspired by a chatting session with my bunk mates during my very recent in camp training (aka reservist). I've been away for around one month, so it's enough to convert the civilian in me to a soldier. Some of the things I've brainstormed include using IC to scan for food in restaurants, wearing a cap when under the sun, the ability to sleep anyway, the ability to sit anyway and so on. It'll be a light hearted post but the lameness of it deterred me. Not everyone is as enthusiastic about ICT as me, haha!

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Mid action review - Cache Logistic Trust

I've blogged about the charts on Cache a few weeks ago. Here's a mid action review.

Weekly

I bought it at 0.915 many weeks ago. Since then, the weekly bullish divergence has come to fruition. I'll be mapping out the exit strategy now. 0.955 - 0.960 is quite a resistance to clear. After that, 0.98 and eventually 1.00 is the level to go. Since it's a weekly divergence, maybe I'll wait till 0.98 and see how it proceeds. 0.955-0.60 gives me a ROC of 3% there abouts only...nothing fantastic but well, if there's money to be taken off the table before it slides out of my reach, I'll take it first.



Daily

The daily still looks pretty good. I love this kind of setup to enter any position. A clear cut bullish divergence on both weekly and daily, and the chart breaking the downtrend, retested downtrend line and bounce off. Now, after breaking downtrend, it might go trendless and trade sideways to consolidate first before moving up (or down), or it can move up from here. I don't know which, but it seems like the latter, judging from the series of higher highs and higher lows. Not sure if the 200ema will pose a resistance to the upward movement (there's not enough history to tell).



I guess from daily, the big fat resistance cloud is from 0.955 to 0.965. Clear that, we're off to 0.98 and eventually to the end Jan peak of 1.00. As a sidenote, there's a lot of reports on Cache, citing target price around the region of 1.30 if I remember correctly. So bullish? haha

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A giant living in a small world

In this horrid times, I feel like a giant roaming around in Singapore. When I go to a typical food court to have my meals, I just cannot be filled by one portion size anymore. More frequently, I'll have to order double portions or eat a light snack immediately after my main meal to ward off those growling hunger pangs. Even the drinks that I ordered seem to conspire against me, because the cups are so filled with ice that I can probably finish the entire drink in one single gulp.




When I'm at home, I'm likewise reminded of my gigantic size too. The rooms seem so much smaller than the ones I had lived in my parent's home. I remembered that we can put a round dining table right in the kitchen of my 4 room flat, and still have plenty of room to put a bar counter. There's also space for a few people to help out in the kitchen. I must had grown so much bigger now, because the kitchen these days can barely hold a proper dining table. From what I estimated, I can probably squeeze in two stools and a tiny table if I wish to sacrifice the walking space leading to the kitchen.  Dwarfish properties seem to be accompanied by gigantic prices these fell times.

Big body, small seats... familiar situation?

I'm sure some of these things are just part of the effects of inflation. While the price of the goods sold might remain the same, the quantity will have to be reduced so that the profit margin can remain as before. What can be worse is the situation I encountered when I ate a certain famous curry puff. The price of the curry puffs had not only gone up, the amount of filling inside the puffs had been reduced too, so the effects of inflation cuts you twice as much. You've to buy more at a dearer price because getting one doesn't fill you as much as before. No wonder I feel like a giant these days!

Big appetite, small portion....familiar?

However, part of my giant-ness is also due to the fact that progressively more things are packed into a smaller packaging. Capitalism? Efficiency? Consider the sardine-packed crowd in the MRT train. I feel like a giant squeezing into a tin can, hurling me at great speed to dump me to my destination. What about the buses? The seats are having lesser leg room until it is decided that perhaps they'll do with less seats and more standing room instead. Clothes? Thankfully I'm not a lady, but it seems that more women have to fit into progressively smaller sizes. Perhaps there's no more L size sold in departmental shops anymore, except during sales where all the odd sizes make their rare appearance. Men are also wearing tighter bottoms, literally named 'skinny jeans', as a fashion statement (I remembered fondly the times where baggy clothes are in...I really believe that if you stay with the same style, eventually fashion will catch up with you once again). Hand phones are getting smaller, music playing devices are getting smaller, laptops are getting smaller, your office cubicle is getting smaller, cars are getting smaller....




Is it any wonder that your money is getting smaller too?


*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

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The unequal race

I saw this picture that just strikes out at me, urging me insistently that I put it up on my blog. Here it is:

In the picture, it clearly shows the difference between those from a wealthy family background and those from a poorer background. Even though the physical starting line is the same, the race can never be fair simply because the financial starting line will never be the same. Considering the two person running the race. They had started work at the same age and time, so their physical start line is the same. But the person in the foreground had to run the race carrying the burdens of their parents while the one in the background is 'pushed' ahead effortlessly by their Mercedes driving parents.


Unlike a photograph, everything in a hand drawn cartoon strip is done with deliberation and purpose. Every little detail bespeaks something that the cartoonist is trying to portray, from the fact that the two person have different body weight (one is more massive than the other) to the graduate hard-top hat and the harness that is strapped to the guy in the foreground.


Perhaps this is where meritocracy fails us all. Success is so often portrayed as the result of meritocracy, where the standing of one's position in society is based on one's individual efforts or merits. But how can this be fair if all of us begin with different starting lines in the first place? The flip side of meritocracy is also the sad perception that if you've done your best but you still didn't make it in life, it's your own fault because in a meritocratic society, this is what we're saying - individual efforts produce individual success. If you don't succeed, you're either dumb or stupid, so shut-up and accept your lowly lot in life.


This is totally unacceptable. Totally. I really hope that the elites do not have this kind of condescending view point on those who did not quite make it in life, especially in comparison to them. My knuckles whitened in anger when I think of this.

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Have you done your taxes?

As I was doing my e-filing of tax (the deadline is on the 2nd week of April), I was pleasantly surprised by two changes. A picture, or in this case a table, represents a thousand words:

You can see that the % for each tier had been reduced for tax assessment year 2012. I noticed that there's more breakdown of the tax bracket between 40k to 160k too. The result would be less tax for everyone, but more so for the lower income bracket percentage-wise. This year, I paid lower taxes than the year before. Firstly, I earned less than the previous year. This is most likely due to the many interruptions that the wedding had forced upon me. The wedding I had last year coincided with my peak season, so the drop in income is understandable. The second reason is that there's this 20% 'ah-gong' discount to the tax returns. I'm not complaining, haha :)



The other pleasant addition is that at the end of the filing exercise, they actually gave me a estimated sum of how much my tax returns will be. I had always wondered about the amount since I had started paying tax, so this new addition is very welcomed by me. No more guessing and making my own spreadsheet to guesstimate the amount of tax due anymore.



I've no problems paying taxes. I think the more taxes I pay, the better. Singapore already had one of the lowest tax rates in the world. The tax is used for 'nation building', as the tax assessment form that they sent you yearly reminds you everytime, so I think it is for a good cause. Anyway, the more I earn, the more they tax, but the tax amount will never be more than the amount that I earn. I think it's fair as I'm enjoying the good stuff about being in Singapore. Tax away then :)

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Just do it

What is it with humans? We crave for the comforts and security of routine but get frustrated and bored by the very same things that we do again and again. We want to experience adventure yet fear the road that lies ahead. We want to be do the same thing that we did yesterday yet we get bored by them in the end. I've talked to people who complained about their lot in life. For every suggestion that I offered, but they shot me back with 10 reasons why it can't be done. It left me thinking that perhaps they do not want to solve their problems at all, but is contented to have bragging rights to others about their pitiful and sad circumstances.



I am guilty of such negativity too. But I fight against it. In fact, I fight against the very nature of complaining to others about my own problems. I believe that everyone has their own problems to solve, and probably they only have enough energy to just bear it through. A good friend might want to share your problems by hearing you out, but to what end? At the end of the day, and all that is to be said is vented out, you are still the person to clear up the mess. The person who unties the bell still has to be the same person who tied it in the first place, to translate from a chinese saying.



I will also not wallow in self pity. In my deepest depression a few years ago, I know the spiritual harm that this does to me. Every thing in the universe seems to conspire against you when you indulge in self pity. I use the word 'indulge' because like wine, you get intoxicated in the inebriety of it all. Work, surprisingly, is the one that compels me to leave my sorrow self out of my home. From my deepest depression, I learnt a few things about my character. I wish I didn't had to go through it but having experienced it, I am quite certain I would not be in it again. I remember vividly how difficult it is to cold-turkey myself against all the pessimism that my mind constructed and how hard it is to dig myself out of the hole of self pity. I am all the stronger because of it.

With your shield in hand and your sword ready, brace yourself for the good fight ahead!

I believe that in order to succeed, a person must overcome your own limiting characteristics. If I have to change my quiet nature in order to succeed, I would do that. Likewise, if the ability to take hardship and be disciplined is limiting my path towards success, I would have to train myself to be disciplined and to endure hardships. Many many would complain about their own specific set of circumstances that leaves them unable to compete on an equal basis with those who, because of their birthright and family relationships, are more well to do. Life is never fair, and the sooner you come to terms with it, the faster you can get past the different starting line of this race and try to catch up with those who had already started running. Be-Do-Have instead of Have-Do-Be.



The whole point of this article is to psych myself up for the trials and challenges that lie so clearly ahead of me. The chess pieces are almost in place. If I can also motivate you in the process, then this article would have done it's job for the two of us.

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The 4 priorities

I believe that when we start working and start having a decent income stream, we shouldn't start investing straight away with that money. I think that certain foundation needs to be built first before we should think about growing our wealth. These following points, in my opinion, are listed in order of priority. I'll start with the first point with the greatest priority, followed by the last with the least priority:

1. Savings

This is the start of everything. Unless your family provides you with a huge sum of money to begin with, you'll have to work your way up. The savings is needed to build up a cash coffer for the many milestone events (like marriage, housing etc) that will likely occur in the near future. For those salaried worker, I think it's easy to set aside a portion of your monthly salary into another account, and then spend the remaining. This 'pay-yourself-first' strategy is reputed to be the best strategy rather than to spend and save whatever is remaining. For self employed tutors like me, I normally set aside cash as and when they come. My cash flow is not predictable, hence I work on a yearly savings target which is further broken down in monthly target. I'll continue transferring money (as it comes along) to a separate account until it hits that monthly savings target.



This brings about the next question: how much to save? I guess the answer to save as much as you can do it without feeling shortchanged in life. I think minimally, if you're earning 3k and above, you should be able to save at least 20% of your take home. If you can't hit 20%, you either have to find more ways to reduce your expenditure or to find more ways to earn more. As a guideline, I keep a savings percentage of around 60-80% of my cash intake.

2. Insurance

Insurance is to protect your savings. I'm not going to dive into the thorny whole life vs term fight here, but the first and most minimum protection should be a hospitalisation and surgery plan. Some might recommend using the cheap medisave plan and not a private shield plan. I leave it to interested parties to find out the advantages and disadvantages of each.  Personally, I have a private shield plan covering me to the the best ward available, complete with rider to cover the co-insurance / deductible portion. I think a disability income plan is the next important one to have, followed by the standard bread and butter life coverage with critical illness component. The permutations for the same coverage is infinite, so there's a lot of room for customisation according to everyone's needs and wishes.


I believe that it's good advice to think a few years ahead before you commit to any long term plan. I've heard stories of people committing to a very expensive plan but because it takes such a hefty toll on one's cashflow, the plan is surrendered often with a loss. I think if in doubt, do not buy first. Just seek professional advice.


I think unless you're super interested in the industry, insurance coverage is something that you want to have
without having too many headaches. Sort this out as soon as possible so that you can have a peace of mind.

3. Set aside money for emergencies

Life is often unpredictable and most of these events that popped up usually requires money. I think the standard recommendation is to have 6 months of your average monthly expenditure (including the cash component of housing loans) in the form of cash or cash equivalent (meaning the cash is put into assets that can be easily converted back into cash) ready for such emergencies. I think that the 6 months guideline is based on the premise that if you lose your job, you might need to look for 6 months before you can find one and starting earning the money to pay the bills. By having a buffer, you can sleep a little more soundly at night. Actually, I would put in 6 months of salary to have an even greater buffer, but that's just me.


This money is not to be used for investment purposes that is hard to liquefy when in need. I think the ideal place to put such a sum is in savings account, fixed deposit or money market funds (MMF). Personally, I had mine split into my investment of stocks and another portion in savings account and MMF. I don't mean that as an advice for everyone. I guess my job is slightly different because I am not in the mercy of just a single employer so my emergency coffer can be a little less liquid than the typical salaried worker.

4. Investment

I think everyone must be able to invest in some way or another. It's really very very hard to reach financial freedom by just working for someone because that is basically exchanging your time with money. To reach financial freedom by just savings alone isn't going to be easy and I think probably you'll run out of time. There willcome a time when you are older and less energetic and can no longer fetch such a good price for your time. This is where your passive income comes in. Ideally, the passive income should grow to such an extend that it can rival your active income. But where does the capital from your passive income comes from? Active work of course.


Everyone must dabble in some investing instruments, be it bonds, stocks or property. This is akin to taking a quick ride on a car along one's financial freedom route. If not, the slow march along the road would probably be too slow and you'll run out of time before you can reach your destination.


I think in investing, the capital idea is not to lose your capital. You may make less returns but as long as you don't lose catastrophically, you'll be alright as time would weave its compounding magic for you. This doesn't mean that because you have a lot of time on your side, you can take more risk. I think it's good advice that as long as you don't lose money, making any returns is a bonus. Remember, this is the extra boost that will propel you faster towards your destination. The main workhorse for that journey is still your active income, which will provide you with the first tranche of capital needed to grow more capital.



*This article is contributed to IM$avvy financial portal, which is managed by Central Provident Fund Board and supported by MoneySense. This site has a noble aim of promoting financial literacy to the general population.

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Clearing the clutter in your life

I hate clutter in my life. It can exist physically or emotionally. Physical clutter includes the mountain of nonsense gathered over the past months (some are years) and stacks of paid and unpaid bills on the desktop. Even my computer desktop is cluttered with pdf and word document files that are archived off to read in the future. Games shortcut that I'll never have time to complete, movies link that I'm supposed to follow up in the near future. As personal experience had shown, I never read stuff that are to be archived for the future. There are just too much information clutter present in this digital world to halt at a mere piece of information right now. Emotional clutter are just people or events that just sit there and drain your energy. You might find working for this particular person very distasteful but for whatever reasons, you still persevere. This kind of things just saps your energy and emotional reserves that at the end of the week, you feel physically and mentally drained. Emotional vampires, I call them.




After enduring these clutter for one year (I looked at the oldest set of bills - it's dated April 2010), I knew I had to clear them before I can 'free' myself. Hence, I spent the whole afternoon clearing up all the clutter that had accumulated in the past year. Bills that had been paid are thrown away. Slips of bank statements are archived neatly in a file and notices of insurance updates are slotted in the correct place. My whole desktop looks much neater now. I realised that there the tidiness of my desktop can never be perfect - it exists between a balance of chaotic and neat order. Whether it's neat or messy doesn't affect the ease in which I can find my stuff. However, if it's messy, I'll feel flustered and caged, as if I'm working and living in a heap of rubbish. I hate that feeling.

Like the Daywalker, I'll strive to cut up all my emotional vampires and physical clutter

I always clear my clutter before I embark on something big in my life. In this case, I need to clear up my life to prepare myself for the more hectic work life ahead. In the next few months until the wintry months, I doubt I'll have the time or the energy to clear my my desk. It can only be messier. I guess that indicates that I'm actually working on my desk, haha!



As for emotional clutter, I try to stay clear of people who do not value my time. It can be students (really, some of them are real emotional vampires) or just people whom I do not want to meet. I'm glad this year, I do not have a lot of emotional vampires sucking off my energy. It's most fortunate that my job allows me certain flexibility to select the people I want to work with. I'm really getting more selective these days because I realise the dangers of dragging yourself to work just to face off with these vampires.



Hmm, come to think of it, perhaps there's a third kind of clutter - financial clutter. These are financial stuff that sits there and drain your money, while cluttering up your financial life with things that you can't understand. I've a few clutter in my stock portfolio, perhaps it's time to cut up all these and lead a renewed life. Is your life full of clutter that needs to be cleared up too?

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Nikkei crashing

Japan had the greatest earthquake in its history, of magnitude 8.9. This triggered a tsunami that devastated the eastern and mostly northern part of Japan island. Due to the specter of possible nuclear meltdown over the nuclear power stations situated in Japan and consequently damaged during the natural calamity, Nikkei crashed very badly. The first day it crashed around 6% and today it crashed another 10%. That's a very bad crash, bringing Nikkei below 10k mark to around 8.6k.


This is a historical moment in the financial world, so I'll snap a shot of the crash of Nikkei. Horrific really.

Stock market do not take kindly to uncertainty. Due to the tsunami and earthquake combo causing widespread damage, which is immediately followed by the overhanging of the possible nuclear meltdown, there is panic selling in Japan that spreads globally too.


Makes me wonder whether the time to buy and hold for long term is truly over, given the more and more frequent black swan events happening around the globe in recent years. However, it is not my place to comment on this. I just know what I have to do. Sell some and buy some. There's nothing to be emotional about your losses. Just take it stoically and be thankful that what we lost is just money. There are others out there who might have lost their entire home and even the lives of their loved ones.

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Somebody by Depeche Mode

The Japan earthquake cum tsunami is very heartwrenching. Is it only when disaster strikes that we think more deeply on what is more important in our lives? I guess so, because all I want to do right now is to hug my wife and say that I love her.


I was listening to our march in song a moment ago. It's called Somebody by Depeche Mode. A very old song but one that speaks volume of our relationship. I didn't mention this in my wedding but this means more than the official wedding vows that we exchanged. This is our wedding vows, presented in the melancholic melody of that song, sung in the meaningful lyrics by Martin Gore.

Here's the lyrics:


I want somebody to share
Share the rest of my life
Share my innermost thoughts
Know my intimate details

Someone who'll stand by my side
And give me support
And in return
She'll get my support

She will listen to me
When I want to speak
About the world we live in
And life in general

Though my views may be wrong
They may even be perverted
She'll hear me out
And won't easily be converted

To my way of thinking
In fact she'll often disagree
But at the end of it all
She will understand me

I want somebody who cares
For me passionately
With every thought and
With every breath

Someone who'll help me see things
In a different light
All the things I detest
I will almost like

I don't want to be tied
To anyone's strings
I'm carefully trying to steer clear of
Those things

But when I'm asleep
I want somebody
Who will put their arms around me
And kiss me tenderly

Though things like this
Make me sick
In a case like this
I'll get away with it

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Cache Logistic trust

Cache logistic trust


Weekly

Daily

Company pays dividend per quarterly, with annualized DPU at 0.077. At price of 0.925, dividend yield is 8.3 % pa. Gearing is 23.7% based on last FY results. Sounds like a good trade...perhaps within the week. But the profit margin isn't that fantastic. Selling near 0.95 to 0.96 yields only around 3% ROC...not that fantastic. Even if the weekly divergence plays out and I sell at 0.97, it'll be around 5% - that might be worth something. As such, I'll not pay too much attention to the daily...I'll wait for the weekly to show some signs before I commit.


Interesting to see how it'll play out though. If conditions are right, this could be one of my favourite set up for a mid term trade. The yield is seductive though...

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Collected thoughts

I was quite out of touch of the whole world, having spent most of my week out in the jungle having no access to internet and newspaper. Even my starhub reception out there is intermittent at best, so I can't even call out or sms if I want to. Anyway, nothing much changes with or without me - the world revolves on its own in my presence or not.



Some random thoughts:


1. I noticed that I had many pens in my pencil case. I was trying to clear out some non-working pens and was testing out the ink of the pens, so I was scribbling on a rough paper and writing some random stuff. I didn't really think about what to write and was really letting my thoughts flow out without inhibitions. Was pleasantly surprised by what I wrote, so thought that I'll share it here:

"There are only so many things you can do in your life before your flame dies off and leaves a trail of smoke marking your existence. But fear not, and be sad not - it's the journey and the quality that counts, not the quantity and the length of the journey. A mayfly living for a day might have more purpose than someone who lives through 100 yrs of purposeless and driven less existence."

"There are so many things I wish to accomplish in my life but do I have the time to do so? Nay. I can only prioritize and choose the one that gives me the most satisfaction according to my goals and my needs. Who is to say that my wishes and aspirations, though not lofty and almighty, are any less significant than yours?"

I seem to have written about mayfly before. Doing a little search on my blog confirmed my suspicions. There is something interesting about mayfly to me. Somehow their 30 mins to 1 day of life (depending on their exact species) makes me think what the mayfly are thinking about. Is their life fruitful? Is their life too short? Would they wish to have a longer life? Interesting thing to ponder.



2. I was reading the newspaper today and saw that people are complaining about a certain Kelly Ong - a commentator for starcraft battles - and her incomprehensible accent. I listened to it here and found that it was alright. I listened to her comments for 2-3 clips to have a broad view of her accent. It didn't sound fake nor was it too fast, as the comments mentioned. Those who commented on her accent are mainly from the west. Perhaps it's time for them to accommodate to other country's accent instead of always assuming that other people have to follow theirs. The world is bigger than the country you're living in, so grow up please.



3. I realised that I didn't miss the stock market. The market goes up and down and I might have missed the opportunity to get some cheap buys but am I worried about it? No...the opportunity will come again. If it's mine, it'll be so, so that's no point fretting about it. Perhaps not looking at the stock market so often will do wonders to my mental well being and probably nothing much will change in my portfolio, even if I watch it like a hawk. So why do I still insist on watching it so closely? Habit? Obsession? Boredom?



4. My broker asked me if I wanted to do a placement for Hutch's IPO. It's denominated in USD and pays dividend in HKD, around 4-6% (I really can't remember). I am left wondering why such a hot IPO will have placements for me, a retail investor. I don't like it to be denominated in USD and paid in HKD. The fact that I was asked about the placement makes me think twice about it. Am I going to subscribe? IPO is a funny business - if you can subscribe to it easily, it's not going to be a good one; if you can't subscribe enough of it, it's going to be a good one. Screwed if you do and screwed if you don't.



5. A spunky newbie in the market asked my wife if she does Forex trading. The student, a guy, said that his friend is going to teach him how to trade it profitably with just $500. Can it be done? I suppose so, but it's not going to be easy. Let's hope that person don't lose more than the $500 that he intends to put in. Somethings in life, you can only learn from mistakes that you commit on your own even though preferably it's better to learn from other people's mistakes. Let him be aware of the risk and rewards of doing forex trading, and let him be the one who smiles at his profits and grimace at his losses.

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Comfort items

I am going outfield next week, so this week I'm going to do some shopping to bring some comfort items to make my life in the jungle for the next few days more bearably. For those who are not in the know, going outfield means that you can't bath for around 3 to 4 days. You can't brush your teeth. You can't shave. You can't shampoo your hair. You can't change your clothes. And you freaking wear your socks that are soaked in sweat and dried up and soaked in sweat again and again for the whole duration of the exercise.



Disgusting cannot even begin to describe that feeling. It's like you know you're going to do something painful and the pain of waiting for it to come makes the thing even more painful. I'm sure when it actually starts, it'll pass on quickly. SO, I am going to do some shopping during the weekends to make my life much more bearable.



I listed out the items that I needed in order to make it easier for me to do the shopping:


1. Baby wipes - those alcohol laden tissue which can clean you up and make you feel extremely refreshed. This is ultra important.


2. Insect repellent - self explanatory. It's going to be hot and stinky and if there's insect bites, especially mosquito bites, I'll be very very pissed off.


I tried to come up with something else that can make my life even more comfortable and realised that there isn't anything else. Life can be very very simple. Just two items can make my life so much more bearable. I'm actually hard pressed to find anything else, which is very interesting to me. I wonder how I'll feel when I'm finally finished with my in camp stint. What other observation would I make of myself?

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Life in green

If I've said this before, I'm sorry, but this is really what I feel. I like going to reservist. Some say it's a waste of time, others lament the amount of work waiting for them when they return back to their office. For me, it's precisely because in the army, I do not have to be responsible for my time that I find it so refreshing. How does that make sense? I'm usually a very time conscious person who fills my time to the brim with not much not much wastage. Time is accountable to me, because I have precious little to waste it. I know my exact per hour rate (due to the nature of my work), hence I always end up with a tinge of guilt whenever I'm not working as hard as I could be.




That's very stressful, isn't it? Pushing yourself to limits all the time. That's why I go for my batam trips. There's essentially nothing to do but to sleep, watch tv and read books. It's a leisurely pace in life that I so crave for. Because my usual life is so full of responsibilities and discipline, I find that reservist is a very refreshing and a desperately needed change in pace. When someone orders me to do this, I'll just do it. There's no thinking involved in my part because it is supposed to be done by those superior in rank to me. In fact, I'll do it very happily because there's a bunch of good ol' army buddies whom I've known since I was 18, 19 years old, all doing it together with me. It's a mix of nostalgia combined with a heady mix of brotherhood that I find comforting. We can all bitch about our life (or army life) and perhaps the most serious decision of the day is whether the lunch is good or bad. Reservist not only gives me a chance to rest my body but more importantly, it gives me an opportunity to rest mentally and to reflect and indulge in some soul searching.




I always come out feeling more ready to go and more refreshed than any holidays after reservist. Maybe during holidays, I still have to be with my spouse. Don't get me wrong, I'm not saying I don't enjoy her company, but separation makes the heart grow fonder. I think a healthy separation from the company of each other can do wonders for our relationship. During my reservist term, she'll be going out and spending time with her friends, or even herself. I think it's the 'me' time that is important. With so many distractions in the civilian world, it's hardly justifiable to have 'me' time anymore. I'll end up spending time with myself in the night when everyone else is asleep. This keeps pushing my sleep time later and later and making me more tired and tired until the whole sleep cycle is restarted with a bout of reservist in every year. This is important to me.

In my experience, this picture shows two extremes reaction. One of utmost disgust, another of thoughtful reminiscence

No doubt I'll be earning less in my reservist period compared to working, I think it's still very worth it. It's compulsory anyway, so I don't really have a choice, which is good. Sometimes I think having little choice is better than a lot of choices, because the former makes you think really hard about each choice available to you, rather than making snap decisions and move on to the next one with the latter. In army, this lack of choice is even more stark, because you're simply ordered to do things. I know how this sounds - it's a pitiful attempt at justifying mental laziness and rejecting any semblance of responsibilities to one's own life. But hear me out, a life where one has to make decisions on your own is a very tiring life (satisfying no doubt but still tiring). I feel no shame in wanting a period of time where I do not have to be responsible at all. Those who are happily employed might not be able to understand what I'm saying here, because you've no idea how much initiative I've to take just to have the same pay back every year.




But I digress...I'm not bitching about my work life here and enjoying the much needed break during my reservist term. I'll be gone for a month (since last Fri) and there might not be any new posts. You certainly won't see me in the cbox. This is a delayed post made on a fine Sunday afternoon, and by the time you read this, I'm already well inside my army camp, possibly doing some mindless task or bitching about the sluggish pace of life while wearing green without really meaning it.

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