3 months update

So, crypto is at all time low for the past 1 year. Most L1 coins are at a loss of 50 to 70%, and most alt coins are at a bigger loss.

While i do not have any Luna or UST in the portfolio, the portfolio is still down -73%.

Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.

Sir John Templeton

On hindsight, 2021 was the year of crypto euphoria. Terra(Luna) surged close to 12000% in 2021, from less than a dollar in Jan 2021 to $8x in Dec 2021. $100 invested became $12,000. Many became crypto millionaires, and many others followed in, but how could Luna do another 12000% at a marketcap of $30B at the end of 2021. At its highest peak in 2022, there was another 50% to be made, if you had bought at end of 2021, not a bad ride indeed for followers.

I went in, at the euphoria stage towards the end of 2021, not wanting to miss all these speculative gains that others have made, even though there was no way to calculate the values of what I was buying.

If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.

Warren Buffett

For Crypto, it is a zero sum game. Zero-sum is a situation in game theory in which one person’s gain is equivalent to another’s loss, so the net change in wealth or benefit is zero.

For people who came in late 2021, we became the exit for many who were sitting on huge paper gains, and not too greedy to overstay. It is always never wrong to take profits, you could be earlier, later, but profits are profits, just more or less. To buy when others are selling and hold it for quite some time, and to sell when the market is in euphoria mood.

I still believe in what I believe in, Blockchain tech and cryptos are here to stay for good, it is like the dot-com bubble, most IT companies will be gone at the end, but the really good ones will remain. A lot of the Alt coins are doomed to fail, as there are no good reasons to buy and hold, while your holdings are diluted as more coins are minted out from thin air. Project profits are kept to the team, while shareholders get nothing, only hoping for the next buyer to come and buy at a higher price while getting some attractive staking yields, which cannot withstand the falling prices in a crypto winter.

Like domino blocks, when one realised that the price cannot go up anymore, and there is no more foolish takers, the only way is down, and a fast fall it will be.

Human greed is always within us, and there will always be another ponzi scheme major investment opportunity. it will be harder for people to trust alt coins like they do in 2021, where every coins or tokens just boom. Many of us will have a good laugh many years later at how worthless NFTs are, yet once upon a time, we were happy to paid 4 to 5 digit figures for them, because there are others out there willing to pay us more to have that worthless NFT. For every ponzi scheme, there are money to be made, especially for people who entered early and do not overstay. The key here is, did you entered knowingly or did you followed others in?

Crypto to me is still highly speculative, and i put in a small amount to speculate.

My investment philosophy is, no stock/crypto investments that i made should make me lose any sleep over it, if i do, then either it is not suitable for me, or i allocated too much into that single investment. Once in a while, i will do some silly investment decisions, but it is always small enough, and i do not get overly attached to it.

My Retirement portfolio (100% invested in SG stocks) is at 2%, while STI ETF is at 4.1%, under performing by 2%, not too bad, as I was under performing more than 10% at STI ETF’s peak in 2022 few months back.

Going into crypto has make me more self conscious of my investing temperament, I would made decisions that I will never do in stocks, and also made all kinds of silly mistakes.

It has been a steep learning curve, and I have simplified it to a bare minimum, I continue to look forward to the long term future of the crypto sphere, and hopefully I will make some right decisions in the future, to hold on to the gems of cryptocurrencies for many years to come.

JB durian season has started, and I am looking forward to having some value for money MSWs, one of my pricey guilty pleasure in life.

Till then.

Crypto updates

Another 3 weeks has passed since my last crypto post, 3 weeks seems to be the sweet spot for me.

First, I have sold my kucoin tokens and did not took part in any IEO, as i feel that buying it’s native token just for participating in IEOs, which is itself, few and far between, is not really a good decision, especially when i preferred FTX exchange more than the others. The creation of Kucoin account was because of Cakedefi, which i have stopped using too. So far, it turns out to be a good decision, as I have deployed it for some farming with good returns.

I am now almost 99.9% invested in the Avalanche network, getting some good returns on farming and participating in some IDO through Avalaunch.

My losses has narrowed down from -35% to -7%, which is pretty impressive in 3 weeks, it was positive for a short while when Avax went up to $9x last week, but the returns are tied solely to the price of Avax. Avax goes up, i go up, Avax goes down, i go down too. I am happy collecting interest in good farms, while the price goes up and down.

Next, this post is more about my review of Avalaunch, the main launchpad for Avax network.

This is one of the launchpad with no tier system, highly recommended for people who are just starting their journey into IDO, as long as you stake XAVA, you will be able to participate in every of their IDO.

Let’s look at the ATH(all time high) ROI of all their past IDOs, it is pretty impressive.

I came in at Islander, so i did not get to experience the crazy ROI of Crabada and Platypus, which went over 100x.

So far has it been profitable for me? Yes and no, while the All Time High ROI paints a rosy picture, but all is not that rosy, when you really participated in it.

First, Allocation size.
Heroes Chained: 0.07AVAX / 55.68XAVA = $5.65/$482= 1.2% allocation

Heroes of NFT: 0.17AVAX / 80.07 XAVA = $14.22/$504= 2.8% allocation

Defiato: 0.1AVAX / 80.2 XAVA = $8.74/$473 =1.8% allocation

At about 2% average allocation size based on my amount staked, assuming a 10x ROI per project, which is 20% profit based on my staking amount, i would need to participate in 5 projects to get a 1x of my staking amount, which is still good right?

Next transaction fees, the main killer.

Heroes Chained fees, 66.7% down for participating fees due to small size allocation.
Heroes of NFT fees, 5.2% down for participating fees due to small size allocation.
Defiato fees, 18.9% down for participating fees due to small size allocation.

To be fair, there are triple transactions going on for this transaction fees.

  1. Refund of 1 AVAX previously paid for registration
  2. The main allocation fees
  3. Compound of any Earned XAVA into staked XAVA.

But wait, this is not the only transaction required for the IDO.

Heroes Chained vesting unlocked.

The small allocation size is already in the negative due to the transaction fees, the multiple unlock will continue to add up the losses, for the remaining 13.34%, everytime i unlock, i should be looking at a lost, as the transaction cost may be more than $0.79. Though the price increase of Hec will make up for it. Hec is up 7.5x from it’s IDO price.

I hope I have presented my side of the story clear enough to show that, there are many aspects to the implementation of a good launchpad, and many hidden aspects that will affect your returns.

Islander IDO was given free to all stakers, which must be good right? On and off there are free airdrops too for the leftovers. But if you look closely to the value claimed, most of the time, the transaction fees are not worth it, which is sad indeed. This is something beyond anyone control, and more thinking are needed for all these implemantations.

Last but not least, one of the most important point I wish to highlight is the registration fees of 1 AVAX. When you registered and claimed your tokens, the 1 AVAX will be refunded together. So, after you have registered for your first IDO with Avalaunch and paid the 1 AVAX, you are excited and looking forward to your first launch, at Singapore timing, the claiming starts at 2300 local time, you have 15 hrs to do the claiming, which is reasonable. As long as you do it before 1400 the next day, you are good. But then you had a busy morning, you woke up and forgot about it, then the usual morning rush, during lunch break at 1200/1300, you had this lingering thought that you have something important to do, but you just can’t remember, nevermind, lunch first. During the second half of the day, you suddenly remembered, and you logged in to Avalaunch, you missed the deadline for the claiming. Next time then, unlucky me. Yes, unlucky you! The 1 AVAX is non-refundable if you do not claim during the staking round!

It is in the T&C when you register for the launch, and there was no fraud involved, many companies do that, many launchpad do that too. But i feel that this is a bad practice, no right no wrong.

The different length in red and blue per project shows the number of deposit forfeited. For 500 people that forgotten about it, or decided not to proceed, that is 500 AVAX, at a price of 80, that is $40,000 USD.

After 4 projects and counting, my profit is not even close to 1 AVAX, maybe not even 0.1 AVAX, due to my small portion, or am I at a loss? One forgotten claim, and you will be in the red for a long time.

To conclude, if you are interested in trying Avalaunch, here is a really useful sample size created by the community. To really maximise the ROI of each project, ideally you should be looking at least 250-500 staked XAVA, that will be about USD$1600 to $3200.

While there are no tiers requirements, you still need to have a certain amount of capital staked to maximise the ROI.

I am still thankful to Avalaunch for letting me experienced a seamless IDO process without any tier structure, while there are many improvements to be desired, this platform is clearly not suitable for my limited capital.

Maybe I overstayed, but i am looking forward to Lost Worlds IDO in March, which is a project that features the MBS in Singapore. With all my locked up portion and the 15 days cooldown after each IDO, April then?

Crypto experience

About 3 weeks has passed since my last post on crypto. The pace of crypto has been really fast and furious, there are so many activities going on, so many ICO/IDO/IEO waiting to be listed, so many people and companies getting into the game to earn some really good money, and many investors tapping into this worldwide 24/7 MLM willingly.

I tried my hands on different blockchain networks, different launchpads with my limited capital.

My results, mediocre.

Most launchpads implement a tier system, with a minimum of few thousand dollars entry barrier, so I went around looking for those with no tier system, or those with lower capital requirements, in the hundreds if possible. The allocation amount are often pathetic at best, ranging from 1% to 5% of your staking amount, not really profitable, but fun. The whole crypto world is designed to be fun, which can be tricky when linked to investment, as investment should not be emotionally driven. You have website like Binance based Pancakeswap, Velas based Wagyuswap, and many many more cute websites.

I created many wallets for different network, signed up with different exchanges, based on the coins that I want to purchase and transfer. There are lots of inefficiencies and thus a lot of problem solving along the way, which can be frustrating yet challenging at times.

Some of my experiences and recommendation for people who are looking to try crypto.

I like Gemini for the local FAST SGD deposit, which you can only buy BTC or Ethereum. From there I will utilise the 10 free withdrawal to transfer my holdings to other exchanges or my wallets. Coins/tokens sold are limited as compared to other exchanges, but for people looking into the Terra ecosystem, Gemini is good with its sales of Luna and UST, with free withdrawals. For direct SGD purchase, instead of converting to USD first, we are looking at about 1% loss due to the spread/bid price offered which the currency conversion rates are factored into, so we are paying a bit more for fast capital deployment. You can plan ahead and convert to USD first at your preferred platform or exchange, but sometimes the crypto world just moved too fast. Gemini App has a very simple interface, and i always used it to check the overall market price of major cryptos.

I like FTX for their free withdrawals for almost any coins/token offered on their platform, for ERC-20 coins, you will need to go through their FTX app. Downsides, you need to create 2 accounts one for FTX Pro, one for FTX app. My undeployed crypto and stable coins are parked inside the FTX App for 8% APR with no lock in period.

I have accounts with Kucoin and Crypto.com exchange too, i do not like Kucoin withdrawal fees, it can be high for people who just started out, with low capital, but i am now holding quite an amount of KCS, Kucoin native token, and look forward to participating in their next IEO. I have not been using Crypto.com exchange for quite some time as i try to simplify my process.

I used Metamask Wallet extension + Chrome browser for most of my crypto journey, and i do enjoy seeing the iconic Fox, so far so good, it support multiple networks, which make it slightly easier for me, so I do not have to go create a new wallet whenever I want to try a new network, despite that, I have a wallet for Terra, one for Solana (Phantom) and one for Velas, Velas web wallet is really bad in my opinion, you have to enter the 24 seed phrase each time you log in, and it hangs for a little while everytime. I stopped investing in Terra and Velas, and will also stop Solana after i cash out my IDO proceeds after the locked in period.

Too much inefficiencies, after i spread myself thin over different networks, so I have cut back and tried to simplify my crypto investments.

I have avoided Ethereum for my whole journey due to high gas fees, which is ironic, because most of what I invested in, are linked one way or another to it.

The two main network which i am invested in are BNB(Pancakeswap) and Avalanche(Avalaunch, PenguinFinance), they are mainly for IDOs, with staking function while i wait for the next IDO.

The whole crypto portfolio is at 35% losses, partially due to the overall market fall, and mainly due to my paper hands.

I locked in some cryptos with Celsius, locking in the HODL50 and ADA40 promo, on the same day with few hours difference, as I spent time to buy some ADA and transferring it in. When the rewards unlocked for HODL50, i was eager to transfer out my deposit and rewards for HODL50, while ADA40 was still locked. So after my transfer, and when i checked back, my rewards for ADA40 was canceled, as i did not read the T&C carefully, if your total holdings amount dropped below the recorded amount which you locked in ADA40, you will not be entitled to the rewards, so with my paper hands, i missed the rewards for ADA40 by mere hours after 30 days of locking in. This is just one of the many paper hands scenarios i encountered in my crypto journey, paying the school fees here and there.

In stock investing, I practiced bottom-up value investing, and I screened my own stocks, without listening to all the noise and any recommendations, it is 100% independent, and my fees per trade is at 0.1712% with no minimum fees as I invest through DBS Treasures. Yet in Crypto, it is often the alternative, which really resonate with the term Metaverse, we can all have another identity, which can be totally different from who we are in real life, an alt character. I used the NAV method to calculate my stock returns, which is more accurate to calculate my efficiency as an investment manger, without taking into consideration of capital injection or withdrawal. But in crypto, I just keep track of the total profit or losses against all capital invested. And the crypto portfolio is down 35%.

I continue to believe that more money will flow in than out into the whole crypto market, and a lot of new investors will be paying for the early investors. While the whole crypto market started with a decentralised idea, it has now evolve into a more centralised idea, there are some companies controlling the big money, creating launchpad/ exchange, allocating themselves tokens/coins at very cheap price, then selling them to the public at higher prices, pumping them higher and higher, most projects basically create coins/tokens out of thin air, get people to participate in their IDO, collecting investors’ stable coins in exchange of the IDO coins/tokens, which most of the time, has no actual value, except to stake in their own ecosystem for more of these fictitious coins/tokens.

I took part in, what I feel is a scam/ rug and pull, or at best a soft rug, we never know until the team run away and become uncontactable. I am still in the midst of it. And the amazing thing about it is, if everything goes well, i would be looking at a profit, despite making a bad decision and not doing my due diligence. Other decent IDO/ICO, you will only get a tiny portion of the total token offered, depending on how much you staked. But this particular one that I am in, I chose to deposit 300 USDC, and i got all 300 USDC converted into their token, 20% was unlocked at TGE, which i sold immediately for a profit, and the remaining 80% will be unlocked 1 month later, no prize given for guessing what i am going to do with the remaining 80%, it will be an immediate sell. And i might be looking at a good profit, for making a silly decision. Is this the new tactic, to participate willingly in rug and pull, preferably soft rug, and get out while the others are still immersed in their greed? I would be looking at some really good profits for my silliness. But yet, this is what is happening in crypto everyday, lots of scams here and there, lots of alt-coins/ shit coins created with no actual value, Head, the scam team wins. Tail the scam team wins too, it is either they run away with the money raised in their IDO, or they continue to see how long before people exposed them, and sell all the allocated tokens they had at the highest peak, on top of the money raised.

2022 is huge on crypto gaming right? But yet, it is also the worst, every game is trying to issue their own tokens, most games are really bad, it is like we are taking a big step backwards with regards to the game quality, most games are not even out yet, but they are already selling their tokens for months, with an ambitious roadmap which may or may not be achieved, but people are pouring money in, regardless of what the end result will be. That’s why I feel, long term wise, most projects, website, alt coins will all disappear, only a handful will remains, and if you feel that you are holding one of those gems, you can hold on with your dear life.

Crypto right now is about giving what the people want. It is foolish, very silly, illogical, but yet there are big money to be made.

So what do you want from Crypto? For me it is a small side income, with high risks and high gains. And perhaps when Web 3.0 comes, I won’t be too outdated from it. I was not a twitter, telegram, medium person, but now, I have to use them almost on a daily basic, which is not too bad.

I should be looking to narrow my losses by end of Feb, till then.

Looking back at 2021

A happy new year to fellow bloggers and readers.

Covid has been with us since 2019, a long 2 years and still counting.

Financially, we are progressing well, and the returns are stable.

This year, our Singapore Stock Portfolio grows by 16.7%, outperforming STI ETF’s growth of 12.79%, by 3.91%

The end of 2021 marked a milestone of 7 years. At my target of 10% per annum, I should be looking at doubling my initial capital every 7.2 years, based on the rule of 72. Looking at my NAV of 1.841, I am still quite far from 2. Perhaps that should be my goal for 2022, to achieve an NAV of 2 by the end of 2022, I would need to aim for at least 8.63%.

That is the end of my 2021 financial reporting but not the end of the post yet. I continue to invest only in Singapore market, value investing style, guided mostly by the NCAV method.

Next, I am going to talk about my journey into the rabbit hole of Cryptocurrency.

Value investing, crypto, value investing, crypto, no matter how we look at it, these two do not belong together, much less in the same sentence. How can someone that believe in value investing, believe in crypto investing?

First and foremost let me say out what I feel about crypto right now after a few months of digging into it.

My thoughts:

  1. Crypto and Blockchain technology are here to stay, but probably not the coins/token that we are buying right now, there is no value to start with and most will fall back to the value of zero, while some will get rich and some will get burnt in the process. We are very much reminded about the dot-com bubble in the 1990s, where every listed companies linked to IT get overvalued just based on their IT name or IT prospects, making people very rich, while there was no value at all. Or for people who can’t really relate to the dot-com bubble, in the recent Covid years, suddenly all sort of companies start branching out to gloves, masks, test kits, anything related to covid supplies, their stock price start flying through the roof without making a single cent from covid yet.
  2. There are a lot of money to be made in the crypto world, whether we like it or not, how absurd things are in that crypto world that we tried to push away, the returns are insane especially for the year 2021. Just for yields for your crypto deposit, no investing yet, you can get up to double digit. I learnt so much about value investing, and I work hard to screen for stocks, keep my greed in check and focus on what I think is logical and a realistic returns of 10%, the crypto world is giving easily close to 10% yield for stable coins(stable coins are coins with value pegged at $1 USD), so you have a fixed deposit that is giving so high, it changes many concepts that traditional finance has embraced so far. Where are all these yields coming from? What are the risks? How long can it last? Your guess is as good as mine. A lot of the investors whom are not good investors, suddenly they became Crypto Guru, easily doubling, tripling their capital all just in 1 year, this is never possible in traditional finance investing without any leverage.
  3. Third and last thoughts before I dive into my journey, this is what I feel is the most important and the deciding factor, for people who wish to go into crypto. I feel like Crypto is a very very big MLM scheme, one that put all the previous MLMs to shame, as this is a worldwide scheme, running 24/7, you have so much capital going into it everyday and from everywhere. It is just too big to ignore. All these yields, super high yields, what is sustaining them? It is the new capital that is pouring in every single day, and the music continue to play, please do not overstay. The new continue to pay for the old. So this is the question that i ask myself when I am thinking whether to go into crypto or not. Do I think for the year 2022, there will be a lot of money going into crypto or exiting from crypto? You can try asking yourself this question, if your answer is yes, then I think you should be able to earn money from crypto, even if you are just doing the fixed deposit at our local hodlnaut, 12% for USDT/USDC anyone? If you think there will be a lot of money flowing out of crypto, everyone is exiting, then first the yields will dry up, they will slowly revert back to what is realistically possible, more like the rates we see in the local stock market, bank etc. And that’s when the over stayer will get burnt real bad. All good things will come to an end, and for crypto, everything happens so fast and at best your view will only last for a short period of time, as it is everchanging.

Let’s talk about my journey so far. I want to be very very frank, it is greed, first and foremost. There is no where you can get such high returns, never in traditional finance investing. I put in a small amount of money, this is separated from my stock investing, At best it is considered a side income, money that i am prepared to lose it all, and money that I would take out instantly if I can double my capital. I want to be very truthful, and I hope everyone can be truthful to themselves too. This crypto gains, will not last long, so the risky mentality of go big or go home, cannot be permanent, we are reminded by some of the biggest lottery winners in history, their fate does not ends well. Money comes, money goes, but mentality are here to stay. While I am willing to take more risks in crypto, it does not applies to my stock portfolio, which target is still 10% per annum, and the money are for retirement. A lot of crypto investors got a big windfall in 2021, they talked about their losses, the situation which got away because they are not aggressive enough, because their conviction is not strong enough. In a bull crypto market, the more aggressive you are, the better your returns will be for most situation, but if you applied the same mentality to a prolonged bear market, you gains will be swiped out, and if you leveraged, your situation is going to be very bad. In crypto, we are mainly chasing after yields, there is no logic, and no calculation that can be made to calculate the value of what you are buying, the value most often than not is zero.

So, what are some of my observations so far for people who are interested in getting into crypto too.

  1. There are a lot of inefficiencies in the crypto world. You want to invest in a particular coin/token, you have to know the network it is on, buying that particular coin and transferring to that particular network is not that straightforward. I cannot tell you how many account I have created with different exchanges, and the number of wallets I have created, just to buy, transfer and hold that particular coin in my wallet. X exchange sell this coin, after purchasing when i wanted to withdraw, I realised it was only for that particular network, and it was not suitable for me, as I need it in another network to do staking or swapping.
  2. Ethereum network has very very high gas fees, gas fees are the transaction fees, so everyone is more or less avoiding transferring on the Ethereum network, but yet a lot of stuffs are build on the Ethereum network, it is all linked! Once you hold crypto in Ethereum network wallet, you would need to pay double digit figures just to get it back on the exchange to trade or sell, this is really high for someone starting out with few hundreds or thousands.
  3. You need to be a problem solver, it is a lot harder to invest in crypto than traditional finance platform, there are many ways and many website that can help you achieve what you want, ultimately, you have to choose the way that suits you or that with the lowest gas fees. Avoiding Ethereum network is important to me, but that sometimes means I have to go through many steps to get the coins/token that I want.
  4. My style~ I start with fiat deposit into my Gemini account, as I have it linked to my bank account for deposit or withdrawal in either SGD or USD, then from there we get 10 free withdrawal every month, the withdrawal fees is why we need to have account with so many different exchanges. I created one account with crypto.com just for Matic withdrawal in Polygon network, there are some swap websites that can do that, but you would need matic in your wallet first for gas fees which defeat the purpose, previously you could get free Matic from faucet to kickstart your journey, but after Polygon raise their gas fees, everything stops, i really dislike creating so many accounts just to get the coins/tokens i want, you just have to keep going and going until you find the right solution, it is very time consuming, a few days sometime before I can get the coins I want in the right place. FTX exchange is good, as their withdrawal are mostly free, except for ERC20 coins, which can be free if you download their FTX mobile and do the withdrawal from there, the exchange website and the mobile app are 2 separate accounts, it can be troublesome and frustrating for new crypto investors. When you are doing transferring or withdrawal, you have to check different exchange withdrawal fees, and whether they can transfer in that particular network you want, again there are a lot of inefficiencies. You need a Wallet for Terra(Luna), then you need a Wallet for Ethereum, I am using Metamask, it is cross platform and the one that I used most often, but it does not cover all networks, so I still need to have other wallet for other network. Swap website are useful when you need to swap coins, but do not wish to create more accounts, for different network, there are different website again! Pancakeswap for Binance, Pangolin for Avax, Uniswap, and a lot of others, i used them quite often for staking.

For someone that is doing value investing, going into crypto, goes against what I stand for in investing, there must be a value, I go through financial reports, calculate their net current asset value, their profits, their cash vs debt etc, just to get an understanding of their value. In crypto, there is a lot of feel good mentality, chasing after yields, and just getting into any ICO, IDO, IEO, IDE, and cashing out immediately after the locking period, flipping a few times of your capital, irregardless of what the actual product is all about. It is all about decentralising. There is beauty in it, I must admit, with no power and high social status, one can never have the opportunity to invest in such high gains projects, when you are dealing with big corporations or government, the word is proven. It does not matters whether you think you are good or not, or whether you are good or not, the criteria is proven, if you are an angel investor, you are proven to have the resources or the capabilities, regardless of whether you are a good investor or not. In crypto all this does not matters. It is decentralised

I am late into the game as usual, as I am always skeptical. While I just got into crypto, this year is about NFTs, games, and the virtual world properties, crypto currencies is already hard for me, again what is the value of all these currencies that I am purchasing? And now everyone is going crazy on all the stuffs that I really feel is worthless. Maybe I will change my mind on them few months later, I do not mind being late at all.

Right now, please excuse me as I get ready to register for my first crypto IDE. Hopefully I will have something good to talk about for my next post in the near future.

Happy 2022!

I spent $500,000 on my child after calculation – Taxi Uncle

This post was inspired by my wife conversation with a Taxi driver.

Taxi Uncle was good in financial planning, and he reckons that he spent about $500,000 per child, and he has two children, he solemnly declared himself a millionaire, by total income earned in his lifetime.

A 6 digit sum expenses per child, is the magic number that most parents will come out with.

First & Foremost: Education.

Many parents feel that this is the number one biggest expenses that they will be spending on their child/children, and it is often their greatest worry.

But i beg to differ.

I am a strong advocate of ending the sandwich generation in our generation.

Just a quick calculation of education cost from my point of view. Purely education cost without allowance money, money given to grandparents, etc.

Childcare consists of 2 aspects, and should not be calculated as solely education cost alone.
1. The school taking care of the child, while the parents are not by their side. (Afternoon nap, showering, etc)
2. Education aspect.

This post’s point of view is more from the lower/middle low income family’s pov.

With enchanced kifas kicking in, and a cash gift of $3000 in CDA account, the first 4 years of pre-schooling(not childcare) is almost 100% covered for basic pre school without any childcare. And any expenses after the first $3000 is automatically discounted by 50% with the 1 for 1 government matching.

Scenario (Not childcare): At $6000 below for total household income, you will be paying a max of $60 per month for sparkletots Nursey to Kindergarten. (Without enhanced kifas, it used to be about $170 per month)

There are annual registration fees, annual material cost & uniform cost ($20 per set).

The cost would be about $3500 in total for the first 4 years of schooling for your child.

Pre school 4 years $60 x 48 months= $2880. (free for first $3000, CDA cash gift if not used for other purposes. )
Primary school 6 years $6.5 x 72 months = $468
Secondary school 4/5 years $15 x 48/60 months = $720/ $900
JC 2 years $19.50 x 24 months = $468
Poly 3 years $1000 x 6 terms = $6000-$7000 est. (excluding some higher paying courses)
Nitec 2 years $500 x 4 terms = $2000
Higher Nitec 3 years $650 x 6 terms = $3900
University 3 to 4 years average = $40,000 (excluding higher paying courses)

Allowance money should not be included in education costs, as irregardless of education or not, we need money everyday for daily expenses.

As you can see, if you decided to go for the bare minimum road for your children’s education, you would be spending a low 4 digit figures for your children’s education right up to their N, O levels.

As they go into higher education, learning a skill that will make them more attractive for general employment, it will start to rocket into the 5 digit figures, other than university, you would be looking at $1x,xxx max, that is for basic Singapore education.

My first choice for my children, is for them to pay for their own higher education. I believe it gives them a good investment perspective. Although alternative arrangements can be worked out, if their life went the unexpected way. Always ready for financial haywire.

As responsible parents, i do not wish for my children to give up on their education due to financial issues, i will set aside the money and let them decide if they would want to go into their first investment jouney with me. I will explain to them, on why i would prefer them to pay with the help of a tuition loan, and setting aside roughly 1/3 of their monthly salary to repay the loan. For $30,000 loan at about 5%, he/she will be paying about $900 per month for 3 years, roughly $3000 interest fees and processing fees paid.

I will teach them investing for a lump sum of $30,000 with the same timeframe of 3 years, the time needed for them to complete their university degree. And compare their total returns vs the $3000 interest to be paid to bank. This is their lightbulb moment, whatever they can comprehend from this comparison.

A lot of parents dread tuition loan due to the interest , and over commit to education insurance/investment scheme, with heavy lock in period and low returns, only canceling after years later and making a lost, my parents included. But i see it as an investment opportunity if you have that $30k ready and taking up the tuition loan instead, the first pot of gold.

After you have worked out the numbers, education costs and fees does not seems so far fetched anymore, it is not daunting when you face the numbers head to head.

My other thoughts on why i prefer them to pay for their own higher education fees, is also due to the question on whether higher education is worth it or not?

If they go out to work after their N/O levels, they will be getting a pay of $1,xxx, with chances of hitting $2,xxx, if they put in some OT, their choices of work would be lesser, as compared to one who possessed a cert of higher education and worked in relavant field.

After paying few thousand dollars of school fees and graduating with a poly/Nitec certificate, they would be looking at a range of $2000-$3000, slightly lower for Nitec, with the certificate paying for itself after a year of working.

And for university loan of $30,000 and a repayment duration of 3 years for 1/3 of their salary, the university cert would have paid for itself by 3 years time, with the knowledge and expertise sticking with you for the rest of your life. not to mention the higher starting pay of $3,000 to $4,000, as compared to diploma, nitec or N/O levels.

Different parents have different aspirations for their child/children. For me, i would like them to have more options for choosing but respect their decision, and to have the financial ability to send them for classes that interest them. Tuition are out for me at the moment, and i highly doubt that i will wish to send them for tuition in the future, unless they requested for it themselves.

The biggest expenses should be the daily F&B expenses and their allowance money. This is definetely a 6 digit figure sum, however it is still within the range of $100,000 to $200,000.

On average, 3 meals a day per child is about $10, excluding recess, which belong to the allowance category. At $300 per month multiply by 25 years, that would bring us to $90,000. During the infant years, $300 is also around there, when you include this and that.

Allowance is

Primary school $2 x 10 months x 6 years = $5,400 (Not given on holiday yet, as they are mostly at home.)
Secondary school $7 x 12 months x 4/5 years = $10,080-$12600 (Allowance given on holiday period for them to go out.)
Nitec/Poly/Jc $10 x 12 months x 2/3 years = $7,200 – $10,800

University $15 x 12 months x 3/4 years = $16,200 – $21,600

Total range for allowance money = $22,680 – $50,400

The allowance money doubled, when the education years are maxed out.

If I add all the expenses up, I am looking at about $150,000 per child, excluding university fees. For allowance money, I am giving slightly higher than what is necessary, I would like to observe how they are managing their money and their expenses/ savings rates.

If I aggressively reduce, I might be looking at about $100,000 per child, or if i add up all the miscellaneous, it will be about $200,000 per child until they start working. At $20k seed capital, at an investment rate of 10%, the money would double every 7 years, at the age of 21, I am looking at a good portfolio value of $160,000, with draw out every now and then to cover all the annual expenses, we would still be looking at a high 5 digit figures, which can be further deployed for their future life expedition, or added into the family portfolio for daily expenses or retirement.

Having children is our decision, and we do not expect them to pay back in any way. Realising their fullest potential for their first 10 to 20 years is our mission, and this no doubt require a good amount of money.

While we would have save a lot more without having children, and save all the headache, stress, tantrums, frustration & compromising. The joy of having children when you look back, is priceless.

At just $20,000 and a good, logical & sensible long term investing approach, the family finance is in good hands.

So have you set aside some money for your child?

Having children & Sandwich Generation

I am a father of 3 kids, and I am also part of the sandwich generation*.

*A generation of people, typically in their thirties or forties, responsible both for bringing up their own children and for the financial care of their ageing parents.

This post is inspired by the multiple CNA articles touching on married couple remaining childless recently, and other house-husband articles and facebook posts along the way.

First of all, my stand if it is important to the readers, i believe in respecting others decision and being non judgmental. To the people who do not wish to get married, it is their choice. To the people who do not wish to have children, it is their choice. I do not think that we need to change them, to impose the burden of the whole society on a certain group of individuals. We should be helping those who wish to get married, who wish to have children, who face certain hurdles to get there.

Childcare/Infant care is the 21st century solution to maintaining a local strong workforce, in increasing dual income families, for people who need that dual income, or for people who wish to have children and have career ambitions & advancement.

The cost of Childcare/ Infant care has decreased drastically for low to middle income family who stick to ECDA ANCHOR OPERATOR SCHEME (AOP)​​, i blogged about my experience previously. It is mainly the combination of CDA $1 to $1 matching and enhanced Kifas introduced last year. My expenses per child went from a low 3 digit figures to 2 digit figures, this is partially also due to my family size of 5 which allow my family income to be calculated on per capita income (PCI) basis, and also my very low income. Childcare under the Anchor Operator Scheme (AOP) is capped at $720, with CDA 1 for 1 and working mother subsidy, this can go to a middle/low 3 digit figure for low to middle income families.

I have heard stories previously of mother going out to work, and using most of their income, if not all of their income to pay for the infant care and childcare fees, that was few years back. If you do the basic calculation, the number stands true for low income working mother. And when your expenses is so high, you will go into a vicious cycle if anything happens along the way. Now with all the subsidies, it is much more possible to earn and save along the way, without compromising the kids education. This is one big aspect which the government has done well, balancing a strong workforce which is vital for Singapore survival, yet reducing one of the biggest expenses in the early years of family creation. This is beneficial for parents, who has no issues with putting their children in school, and has more ambitious career aspirations.

I think the signal is strong, if you want to work, the government will help you as a whole. But having children is a very personal decision. It is one big responsibility, lifetime. Is the environment cohesive? Is our housing suitable to raise big families?

No individual should bear the whole burden of the society, as it is too heavy to bear. As politician, aging and shrinking population will always be the bread and butter issue, they will encourage more couples to have children and if possible at optimum child bearing years too.

As a father of 3, i think it is tough having children, you will be sacrificing a lot of your personal time, aspirations, freedom and sanity. You can throw alone time out of the window if you are the stay home one. And as you experience the terrible 2, horrible 3 and incorrigible 4, you start to question yourself, am I a bad parent etc.

I do not think one can ever be prepared enough to be parent or good parent. If i consolidate all my bad parenting behavior, i think i can publish a book called “How not to raise your child.” At my best, i advocate good and positive parenting, and tell my children how much i love them everyday, words that i never heard from my parents, as they belongs to the traditional era of parents, which i deemed it the freestyle parenting – 放养式. We just present parental love differently. My parents was not really involved in my education, as they are not well versed in english, they were the forsaken generation when Singapore govt changed the education system from mother tongue to english, it was for the greater good, but suddenly one whole generation find themselves suddenly not good enough for many jobs. They did not have lower IQ than we do, but with that environment, they did not have much choices, as majority of them too experienced the freestyle parenting. Every generation will have their limitations.

I grew up in a Chinese speaking environment, most of the chinese in neighbourhood school spoke mother tongue when interacting with each other. As you can see/read, my english is really bad. If you take away 1 or half a mark for every grammatical mistake that i made in my blogging, all of my articles would be below the passing marks. Yet the content that I wish to bring across is still there, it does not mean that my knowledge is in anyway inferior to people with really good english grades, but yet my english results continue to pull me back in life, i wish that Singapore english would be graded differently from Cambridge or Oxford, as we are a bilingual country, would a person who is talented in a field that require higher grades of english be held back, just because of the balancing between 2 languages. Yet like the mandatory 2 years National Service, the males are held back in their life, career and family planning for those that wish to. It is for the greater good of the society, understandable, but full of sorrow at the same time. Sorry i digress again, it happened for all my posts. Too much ranting.

Sandwich Generation
You cannot choose whether you want to be part of the sandwich generation or not. Your parents will be making the decision, unless you choose not to have children to avoid being the sandwich generation, with the sheer determination to let it end with you. But i do not encourage that thought, if you wish to have children, please do not let the sandwich generation burden be in the way.

I am lucky to have siblings to share the financial liability, what i have contributed so far, is quite minimal at the moment, so i cannot comment much on it yet.

But I am determined to stop it at my generation, to be financially responsible for my own life, my retirement and my healthcare costs. What is the point of being educated, if you cannot use all the knowledge gained to take control of your life, many of our uneducated parents did not have the choice, but we do. If you can afford a car and choose not to, save the money and invest logically, you will have quite a sum of money for your retirement, get that hospitalisation insurance if you have not, it is the single most important insurance ever. Have dependant? Get a term/life insurance, do not commit too much. Read up, ask around, visit as many financial blogs as you can, get the whole feel of the financial blogsphere.

I do it, so my children will not need to be the sandwich generation. They can have their own aspirations, their own life plans, they will not be held back financially. When i am old and frail, their company will be all I need to know that I have lived well.

My greatest forte is creating value, unlocking value. I earn very little, yet I learn how to invest, I produce reasonable and sustainable returns, and plow them back to the portfolio, I ensure that the family finance is well taken care of. Even if I am not working, I continue to generate income for the family, a strong financial safety net is the most basic foundation block to a family, you cannot really prepare yourself to be good parents, but you can start creating a strong financial position, so when life throw you lemons, your savings will be the flask, your investment returns will be the sugar, the actions the you do to build wealth will be the shaking, insurance will be the mat, in case you drop it, it might spill but it will not crack. There you have it, lemonade. It is sweet, sour and slightly bitter at the same time, just like life. Only when you acknowledge that it will be sour, it will be bitter, then can you really taste the sweetness of life.

Last but not least, I do not think that anyone is qualified to advise you whether you should have children or not, it is very personal, between you and your spouse or you alone. All I can do is to share my experiences and you see if it makes sense to you and your life planning. If you are thinking of having more than you can cope, then maybe you can discuss with your wallet, or the people who will be helping you, if they are ok with helping, is their health still going strong. It really takes a village to raise a child nowadays. Home based learning coupled with Work from home has further strengthen this thinking, for lower primary home based learning, the parent became the teacher, while the teacher became the facilitator. The nation is stretching itself to deal with the pandemic, the parents are stretching themselves balancing their rice bowl, the children’s well being, and whatever sanity there is left at the end of the day. Every generation has their own problems.

If you are planning to have a child soon, i wish you the very best. Godspeed.

Blogging

As my blog becomes a deserted island, I wonder why did I, again and again want to blog.

It always start with an urge to communicate my thoughts through words on any topic that interested me. Most topics are linked to finance anyway, from the money that flows through each and every one of us, investing that allows many people an alternative to life other than working till death do us apart. To the working culture, the politics around the world, to our everyday purchases, the house that we live in, the future of our ourselves, our children, our family, its linked to finance, it always has.

I take a long time for one post, often deleting and typing, deleting and typing, doing some research online for figures and references. And time is something that i can never have enough of, with 3 kids in the family. I have cut back on my career and income, to manage the kids schedule, and i prefer not to have a helper, i have always been a diy person, but big thanks to my in law, the children’s grandma, who played a big part in helping us to manage during the weekdays. It is what i called the divisive tactics, so there wont be middle child syndrome, or any other bad childhood upbringing associated with big family, but as the years passed, the health and energy level takes a big drain, often hitting new lows, and never recovering to the previous highs.

As a self-employed, i am blessed with the flexibility to cut down on work, while for employees, it is not as simple as changing from full time to part time, all I have to accept is the lower income range, i mean really low, lower than what I am earning from investments.

So i am extremely thankful to the younger me, for having a passion in investing, for willing to read a lot of books, for my career i self learned after NS, for investing i self learned from the library. Post tertiary education has not really played a big part in my career or in my life, late bloomer it must be.

I am more of a logical person, that’s why i chose value investing, there must be a value that i can count on, be it NCAV, NAV or PE, PSR.

To a logical person, it’s hard to see directly at the current state of world with eyes wide open.

You see leaders of the world that people used to look up to, bickering worse than children, bullying tactics, killing under the pretense for the greater good of mankind . If someone of the lowest integrity can become the great leaders of the world, it’s hard to teach your children to be kind, to be nice, to be good citizen and good people. When they are going to be working under the people whom you have worked hard your whole life to teach your children not to be. But yet we all persevere to teach our children to be kind, to do the right things, while it is always the innocent that get hurts, the world still need the majority to be kind, even if it is the silent majority.

No matter how many times i go round and round all these problems, the answer is always to be in charge of your life, to have enough money, so you can have more options in life, you can choose to walk away from deals that require you to kowtow, from jobs that go against what you stand for, and all the problems that can be solved by money.

As you can see from what I mentioned about my career and income, i am in the journey of “Coast FIRE”, with 3 young kids, it can be quite unimaginable for most of you. But i need very little, and i spend very little, and i always plan ahead.

Achieving FIRE too young, does not lead to happiness, it create a void in your life, then you start asking what is the meaning of life? Why am I still not happy despite living the dream life that most wanted? In life, you need to have a purpose, it can be love, it can be doing something for the greater good. It is ok if the purpose is temporary and you switch from one to the other, as one day you will realise that there is no purpose that is so strong that can last you a lifetime everyday 24/7, not even marriage or children. You can try to con yourself if it helps.

Right now the family portfolio is getting bigger, which is a good sign, we are able to draw out more to cover more of everyday expenditure if we want, but we are still quite young and able, so every year we take out money to cover the big items, while the bills, loan, etc are from our income, and if we have extra savings for the year, we will put it in too. We are on track for early retirement if possible, or FIRE, or (just do not want to work) whatever you call it. Positive cashflow, savings and investing has given us a good chance in life to pursue a different path from our parents and people who are in the rat race.

2020

It’s the start of the new year 2021, and most financial bloggers are putting up their report card for the year 2020, as the CFO of the family, it is my duty too, to consolidate and conclude for the year.

Let’s look at how the portfolio has grown over the years.

This year the portfolio grew by 9.53%, while STI ETF dropped 8.46% including dividends. The CAGR of the portfolio stands at 6.73% over 6 years.

2018 was a bad year for the portfolio, with a -14% performance, and the portfolio’s NAV has not recovered to End 2017 value of 1.59 yet. If i am a fund manger whose performance fees is based on a high water mark, i would have worked for free for 3 years by now, if i do not have new clients coming in, in the year of 2019 and 2020. Nevertheless, we inject new capital each year, so the portfolio absolute value is still growing steadily.

This year will be a milestone year, as the portfolio officially enters its 7th year, by the rule of 72, at 10% targeted returns, i will be doubling my starting capital at the end of 2021, or to be precise at 7.2 years. I will need to grow the portfolio at 30% this year to have an NAV of $2.00, however i won’t be doing anything different, value investing is still a very bottom up approach, on an individual company basic.

I am still invested in Singapore market only, while there are many opportunities outside Singapore, very exciting too, my target of 10% can be achieved in Singapore given the portfolio size. It’s me who is the problem, not the market.

A few thoughts i would like to share my views on:

  1. Conviction
  2. Stock Market
  3. Gold

Conviction

This year was a very important year for my investing conviction, a lot of the theories was put into use, and i have failed in one that i felt was very important.

” … to be fearful when others are greedy, and greedy when others are fearful.”

Warren Buffet

If the conviction was strong, and the discipline to follow your conviction was high, this year would be a good year to buy more and sell less, anyone who had done so, would be looking at sizeable gains this year. I did the opposite of selling more and only buying after i realised that it was not a good time to be selling, i also tried to time the market, as it swings steadily up and down in a tight range on a weekly basic, or so i thought, clocking in small gains and missing out on long term gains.

I was caught with my pants down, which reemphasize the important of cash level in the portfolio, i was a little lazy in the screening of stocks in the year of 2018 and 2019, so i told myself i wanted to work hard in 2020, i did much more screening, and was looking at financial reports of interested companies that fulfilled my criteria, so there were a few good companies that i wished to buy at the start of 2020, when the news of covid got serious, the cash portion of the portfolio was close to 0%, so while it was a good time to buy stocks from March onwards, i was selling stocks to raise cash, which was quite silly, if my conviction is strong, i would have injected more money into the portfolio. As a value investor, our cash holdings can be high at times, which will pull down the overall performance of the whole portfolio, sometimes this cash portion can also save the portfolio from dropping too much, if i was fully invested in 2018, it would not had been just -14%, it will be much worse.

Stock Market

It has been said many times that the stock market is forward looking, and the price is very seldom a true representation of the current economy or company value, most often, the price of the stock market/ companies swing to and fro, briefly touching its intrinsic value every now and then. A trader trade short term based on the flow, the trend, the graph line, RSI, moving average etc. The quant invest based on it’s algorithm. The dividend investor relies heavily on the dividends yield, while the growth investor looks for how much the companies can grow than its current value, the macro investor more on the whole wide economy trends and what is the next new innovation and disruption, while the value investor more on the asset values of the company. These investors make up the stock market, along side many others type of investors and big fund management corporation. The stock market is often a tussle between many groups at one time, depending on the monetary powers on each side, and the liquidity present in the whole market & economy.

On hindsight, the US market new highs is pushed by the extremely low interest rates, and flush liquidity in the market right now. It is almost as if covid has not happened, and the world is in a very good shape, which i think even people on the main street can see that it is not so. The greed level seems to be high right now, with many earning good money from the stock market, and many others who have missed the rise, following right in the footsteps, so 2021 will continue to rise?

If everyone want to continue dancing, the music has to go on, but as people start getting tired, and wish to go home, there will be lesser people in the ballroom, and at a certain point, the music will stop.

There will be displeasure from people who want to dance a little more, but has a hunch that the music will soon stop.

There will be disbelief from the people who heard from all the fantastic reviews from people around them, that there is a 24/7 ballroom which plays good music, they sold some stuffs for money, they set aside budget to make this long trip, and truth beholds, the music was great, the people are great, but suddenly after 3 songs, the ballroom electricity was shut down, no music, no ventilation, no lights.

The people living around the ballroom, knows something was brewing, there were noise issues, traffics issues, legal issues, this situation can’t go on forever, but yet people are still flocking into town, creating good income for the people in town who offer services, food and accomodation for the visitors.

Soon, people start moving into this town, where job opportunities are abundant. A new eco system was created, with the ballroom in the center of the new economy.

What happened when the ballroom closed? What happened before the ballroom closed, with a few privileged people knowing the news before it closed? What happened to the people that came last?

I have no doubt, that there will always be another ballroom to replace the previous one, there are people whose livelihood depends on the existence of the ballroom, but if you do not, it is always prudent to wait. Opportunities lost do not results in losses.

Gold

I do not have much interest in investing gold, as much as i do not have much interest in investing properties. But i think they are one of the best way to fight inflation with very minimum effort needed in the research/ reading phase. Many older folks got their fingers burnt in the stock market, following the hot stocks, or that mentality that government linked stocks will never failed. But the gold jewelry they purchased many years back, even taking into account the jewelry design fees, they are still looking at a very good profit.

For properties, you get good returns, because of leverage, the value does not fluctuate as much as the stock market, and inflation include properties prices too.

Gold has been compared with bitcoins as alternative investment, however gold has practical usage in the world, but bitcoins does not have any practical usage yet, at best an ideology. You will find some gold in most families, but rarely bitcoins, so it is still a bit far fetched comparing bitcoins to gold. Long term wise, it can be very good at fighting against inflation, especially in country which is very unstable, whose fiat currency are at a big risk.

It is getting easier to invest in gold, whether it is physical gold, or gold etf etc. There are still some hurdles, and more expensive fees as compared to the stock market.

I think gold is more of an insurance rather than an investment, you do not need to claim from insurance most of the time, but just that few crucial claims can benefit you for life. I have strong faith in the SGD, much more than USD, although if USD fails, most currencies will go down with it. In my generation, it is quite hard to fathom SGD and the Singapore Govt failing in its monetary role.

The Singapore government is like a value investor, very cautious and stingy at times. This is very important to a small country with no natural resources, the covid year was one of the rare times, that the government is giving a lot of money to the citizens, USA is like someone with high income power, top 1% income tier, with high spending habits with no savings, a spendthrift, spending all the income and getting into debt to fund that lavish lifestyle. We wouldn’t teach our children to spend all their monthly income, and wait for next month to come, so why should a country do so, unless it is to stay in power, and who benefit most from it?

I got a hole in my backyard, the hole gets bigger as the months passed by, i got some stuffs to fill up the hole, but the hole gets even bigger from all the weight of the stuff. Should i get the hole check, instead of dumping stuffs to cover the hole, if the hole requires extensive repair works and quite a long timeframe, which will affects me, my house and all my neigbours, are we willing to bear with it? Or we would just cover it as the experts has said, in my lifetime it shouldnt be a problem. You can move house if you want to, as the repair cost can be quite high. Luckily i still have a choice to move, but what if i do not have a choice?

Perhaps the most important book i have ever read in my financial journey.

The Richest Man In Babylon.

I have read a lot of books when I was starting my investment journey, big big thanks to the neighborhood library, where wisdom of all sorts, in different genre can be found in written form.

From REITS investing in the local section, value investing, growth investing, trading, reading annual reports, financial reports, how to look for fraud, books that focus specifically on ROE, PSR, P/B, P/E etc and many many more. I cannot emphasize enough that reading is a very big part of investing, in all stages, and even if you are already a veteran in investing, you still have to keep on reading, the annual reports, financial reports of companies that you have invested in.

But first of all, before we start on our investing journey, we have to learn how to manage our money.

We do know that we need to save our money from a very young age, the rich will teach their offspring the importance of money and how to preserve their wealth, while the poor will also teach their offspring the importance of money through their own experience and plight. Parents will teach their children to save money for a rainy day, regardless of their own education level, their own savings rates, or their uncontrollable expenses.

The question is how much, how early, and what differences will it make?

Does saving 10% your whole life from all the money you have collected make a big difference and allow you to pursue the life you want at an earlier stage?

No, a person who have not saved a single cent in his youth, but 50% in his prime earning years, and invest his money wisely and steadily will have a lot more towards the end.

So does it mean we do not have to save since young?

No again, if you do not learn how to mange small amount of money and manage it well, how do you think you will cope with big amount of money?

Some good example which I always like to bring up, are the NBA players and the big lottery winners. The NBA players are extremely talent in their own crafts, and the sports are well liked across many countries, many basketball players around the world have given their whole life to basketball and their achievements can’t even match up to the second tier standard in America , and the lottery winners are some of the luckiest people in the world, until the money started to control them.

Starting young and starting small, might not play a very big part in terms of the amount of money, but never underestimate, the amount of understanding you will amassed along the way in understanding yourself and the investing environment which you wish to be in. You can go into trading, and learn about the importance of stop loss, or your character can be more suitable for a balanced portfolio, which you dabble in bonds, precious metals and stocks. You could perhaps be more interest in emerging markets than your local market, or in the US market, where the P/E ratio can go into the thousands for companies that the whole world has high hope in. Or the dividends focused/ REITS group which is more interested in the amount of money they are getting out from their portfolio each year, or every month. Perhaps a contrarian, a value investors, or solely property investor.

It is always about understanding yourself, your temperament, starting with small amount of money, making mistakes along the way, and slowly picking yourself up, and finally finding a steady path to your investment journey, there are many roads that leads to Rome, some faster but riskier, some slower but steadier.

In the end, it is about reaching your destination, regardless of how far or near, how slow of fast, if you take into consideration, the amount of people not reaching the end destination. To reach, you would have already won over the mass majority.

Lets bring us back to money mangement, the important rules we can take a leaf from The Richest Man In Babylon.

7 golden rules.

1. Start thy purse to fattening – For each ten coins i put in my lean purse, to spend but nine.

In today context – Pay yourself first. Do not save what you have left, but save first then spend. Normally in your prime earning years, the expenses are often the greatest too, as it coincides with getting married and having a child or children. For the singles, some of the biggest expenses in life like getting that car, or investment property, being filial piety and contributing more to your parents allowance, going for your yearly holidays. There will always be something to buy, which bring us to our next rules, but before that, pay yourself first.

2. Control thy expenditures – Budget then thy necessary expenses. Touch not the one- tenth that is fattening thy purse. Let this be thy great desire that is being fulfilled. Keep working with thy budget, keep adjusting it to help thee.

There are many good points in the second rule, and for anyone that is interested, you can purchase the e-book online, or visit your local library.
In today context, this is perhaps one of the hardest rule in all the seven rules, yet we do have to be responsible to our money, to tell ourselves that we should control the money, and not let the money control us. For most if not all job, we are trading time for money, for top athletes, soccer players, basketballers, most retire in their 30s, while they are past their prime for that particular sports, their life have just entered into their prime. With reducing income, can they reduce their expenses proportionally too? Or their expenses will increase with higher upkeep to their image, and ego?

3. Make thy gold multiply – Behold, from my humble earnings I had begotten a hoard of golden slaves, each laboring and earning more gold. As they labored for me, so their children also labored and their children’s children until great was the income from their combined efforts.

Some people are better at managing money, some are better at investing, while some are better at earnings, and some lucky few who are good at multiple aspects if not all. No matter what, there is a common goal, to multiply our savings(idle money) Before we start to invest, please set aside an emergency fund, as it is hard to predict the short term fluctuation of any investing environment, or to predict that black swam event like covid19, that seems to be happening more frequently ,a black swam event is not that uncommon after all.

Investing is a personal journey, you can seek help, go to classes, or stand on the shoulders of giants, but ultimately you are solely responsible for the rise and fall of your investment values, not the someone who told you about one particular stock that is sure bound to rise, or that hot hot stock where all the people you know have put in some money and are enjoying the first wave of a rising tide brought on by the rising liquidity that is flooding the market.

Before you invest, what is the definition of the stock market to you? How do investors earn money from the market, and what do business owners have to gain from listing in the stock market, understanding these fundamental issues will make you understand your path, whether you are more attracted into dividends investing; one of the best way to partake in the business profits, or that cash rich, yearly increasing book value company that refuse to return back any money in the company to shareholders, waiting for years for other shareholders to push up its price, and only after you have sold your holdings after losing all hope in the company to realise its value, then it’s stock price rises dramatically after that. There are many reasons why a stock price will rise or fall, many reasons worse than the others, and on hindsight, the vision is often perfect, but not when you are prodding forward.

We have come to the end of this lengthy and wordiness post, there are 4 more rules to this series, which I think are slightly less important to the first 3 rules but if you wish I highly recommend you to borrow or purchase the book for a good old reading, you will not be disappointed.

If you mastered the first 3 rules, I think you are set for a relatively successful investing journey, yet the first 3 rules are often the hardest due to individual temperament. For money management and that a-ha book, the financial camp are often divided into two major camps, one of which is The Richest Man In Babylon & Rich Dad, Poor Dad by Robert Kiyosaki, with most preferring the latter, both are great books, which will set a strong foundation in your financial literacy journey.

Last but not least, i would like to add in some personal words which I feel strongly for.

Savings is more of within, while spending is more shown externally. In life, almost everywhere we are more judged by our spending powers, countries are listed by their spending powers. And it is true, by how spending and powers comes together naturally to form a phrase, spending do give us powers, and make us feel in power, it is a very very fine and delicate process, one misstep and we are lured into this false sense of power, which vanish into the thin air when our money are gone. The whole world is chasing after money not you. Take good care of your money, and be in control of it. It is easier for others to judge you by the clothes you wear, the car you drive, and the house you stay in, and very seldom will people know how much you have in savings unless you wish to reveal so. Spending is essential to the economy and savings is essential to your personal well being, it is a delicate balance with no right or wrong. Remember there are many paths that lead to Rome, and it is not how fast you reach it, but whether you will reach it. In the meantime, do enjoy the journey and not be penny wise and pound foolish. It is perfectly fine to buy the things that you fancy from time to time, but always spend within your means.

Stock portfolio finally back in the green amidst the year of Covid

Previously, i had to manually remember dates for the release of company financial reports, and most of the time i do missed it, but with the SGX mobile app, after adding stocks into my favourite list, and pressing the alarm button on the top right, i am able to get very timely notifications and it has been hassle free since then.

This week, many companies which i have invested, have released their financial results, i would say it is a mixture of good and bad results.

The commentary section at the last of the financial report is one of the most important aspect that every investors should look out for other than the figures. And covid19 is mentioned in most if not all of the listed companies.

This is a very important period for investors, as we are able to see firsthand how the covid 19 has financially impacted the listed companies.

Before the covid striked, the portfolio at it’s best this year was about +5% in Jan/feb, and at it’s worst about -18% in April/May.

This is my first time experiencing a black swam event, and i think as a value investor, i made some bad decisions, by selling some of my stocks at the lowest.

Here are some of my thoughts back then, the stock market was getting more and more expensive, there were very minimal good value stocks, and thus i was looking at some of the more conservative growth stocks, for value stocks, most companies are the kind where they are largely unheard of, at least for me, while the big names very seldom appeared in the value stocks screening, so at the first quarter of this year, i purchased some big names whose price was beaten down, like Great Eastern, brought at about $22 and sold at $17.70, hong leong finance brought at $2.65 and sold at $2.2, terrible timing to sell back then when everyone was very pessimistic.

And i have since constantly reminded myself to be greedy when most people are fearful and fearful when most are greedy. It was a good opportunity to know myself better, and the kind of conviction which i had, or believe i had.

As a value investor, i am skeptical of many things, and the stock market always seems like it is overly optimistic, or a wild swing into overly pessimistic mood, the rapid sell down and the rapid rise back of the US markets is a strange sight to behold.

As a value investor, buying is the easier part, while selling is the hardest, the portfolio reached an all time high NAV of $1.585 in end of 2017, since inception in start of 2015, with a CAGR of 16.72%, Sunright exploded that year, and contributed to most of the portfolio gains, then Sunright slumped down back to the recent low of $0.375, i did’t sell anything when it was on it’s way up, and also not on it’s way down, it contributed greatly again to 2018 portfolio returns this time negatively, the worst results of all time at -14% for that whole year. Sunright continued to be the third largest holding of the portfolio, after cash portion and Multi-chem. i have sold off a little bit this year to re balance the portfolio.

Next on to Multi-chem, the whole portfolio is in green at 0.87% gain despite of all the mistakes that i made this year, after it rises an amazing 75% since the start of 2020 including dividends given. I purchased it in 2016 in the range of $0.475 to $0.555, and it is the largest holding of my portfolio.

There were a lot of mistakes made in the selling part this year, and a little bit of trading in and out of the market when the prices rise or fall drastically in a short period of time, and it did not ended up well, selling stocks for a small profit and watching it rise and rise. All in all, the selling made in this year has been bad, but the buying was good, a lot of stocks purchased this year in the first/second quarter has risen well.

There is still 4 more months to go before 2020 ends, and a lot of things can happened in a short period of time, the portfolio will most likely go back to the red again, i am aiming for a 5% to -5% range, and the whole stock market can tank again, though Singapore stock market has not recovered yet and is now around -17.5%. It is a good time to invest in the STI ETF at $2.594 with a timeframe of 5 years and beyond.

The stock market is a voting machine in the short term, but it will always revert back to a weighting machine in the long term, company by company. It can be kind of silly trying to justify and interpreting everyday market movement, why this stock went up, why this stock went down, there will always be a reason for it, if you cast your net as wide as possible, and getting people to speak the reason that you want, for recognition, fame or fortune.

“But as long as the music is playing, you’ve got to get up and dance.” Especially so when your job and income depend on the daily movement of the stock market.

But for the retail investor, we are reminded by the sage of Omaha. “The stock market is a no-called-strike game. You don’t have to swing at everything – you can wait for your pitch.”

Avoid things that you do not know, avoid the hype, understand yourself, find out what kind of investor you are and stick to your circle of competence.

Stay safe, and hope everyone avoid over leveraging, and also do not put your eggs in one basket.

“A rising tide floats all boats….. only when the tide goes out do you discover who’s been swimming naked.”