8 years of investing and tracking

For as long as I have invested, the benchmark I compared my portfolio to, was SPDR STI ETF, as I only invest in companies that are listed on the Singapore exchange.

I started tracking the portfolio like how any fund manager would, using the NAV method, which suits me more, as capital flowing in and out, will not have an impact on the returns of the portfolio.

Many individuals would prefer the XIRR method, as it takes into consideration – capital injected, dividends reinvested etc. It is more suitable for an overall tracking of an individual finance situation, while NAV is solely based on the manger investment capabilities.

The SPDR STI ETF is flawed as many seasoned investors would have realised by now.

It is heavily weighted on the finance sectors. Just DBS, UOB & OCBC, Singapore 3 largest banks, we are already close to 50% of the whole ETF weightage, add real estate and we are close to 70% of the whole ETF.

This 2 sectors belongs to the “old economy” sector which many new investors has more or less shunned. But yet SPDR ETF continue to be quite powerful, despite it’s most obvious flaw.

Out of my 8 years, my portfolio outperformed STI ETF for 5 years, and underperformed it for 3 years.

With any kind of investment tracking or comparing, the start and end point matters very much.

At the start of 2015, STI ETF was selling at about $3.4, higher than end of 2022, at $3.31. Your capital gains would be pretty limited, even if you have used dollar-cost averaging, and injected money at the start of subsequent years. most of your gains would have come from the dividends instead. If you invested in STI ETF only in 2016, at a start price of $2.95 or in 2021 at a start price of $2.895, your gains would be much higher over a shorter period of time.

While research has shown that lump sum investing yields better returns than dollar cost averaging, you would need a strong stomach to sail through all the temptations and self doubt.

I did a spreadsheet calculation, based on the scenario if I have injected the same amount of capital at the same timing that I did for my own portfolio, into STI ETF instead and reinvested all my dividends collected back into STI ETF, my CAGR for these 8 years would be 2.48% vs my value investing portfolio returns of 8.65%.

At 2.48% CAGR for 8 years, it would not have attracted any new generation investors who have been wowed by the speculative returns of crypto or the IT stocks in these few years with all the free money flowing everywhere until the feds started tightening the monies supply to tame inflation.

The recent fixed deposits, ssbs, T-bills seems like a better choice than the STI ETF, maybe some would consider CPF better than STI ETF.

But yet despite all the bashing, STI is one of the best performing country index among the world in 2022, it’s returns at 7.61%!

Very very few investors can beat STI ETF returns this year.

Onwards to my own investing idealogy
I personally feel that a value investing based portfolio is a pretty defensive portfolio, at -14% in 2018, it does not certainly seems so. But because the cheap gets cheaper, as long as the fundamentals of the stock remain intact, I am always more than happy to continue averaging down, sometimes I can be wrong, but there is a fall back on value(Ncav), and it is ok to cut loss at -10 to -20% when the fundamental changed.

While for growth stocks, we are sometimes buying on the euphoria and optimism of the crowd, as seems in recent years.

Telsa reached an all time high above US$400 13 months back, and it is now at about US$123, at -65% for 2022, it is still extremely expensive, what is the fall back on value of it? And at US$123, it is much cheaper than when you got in at US$200, US$300 or even US$400, so what is stopping you on averaging down all the way? The perception of it has changed.

The timeless quote never fails.

In the short run, the market is a voting machine but in the long run, it is a weighing machine.

Benjamin Graham

Emotional based investing is heavily reliant on faith and the stomach to weather through good times and bad times. But yet because of its reactive nature, emotional based investors often buy high and sell low. A herd based mentality is perhaps one of the worst traits an investor can have.

In my best year, 2017 with 37.69% returns, I was holding on to 10 stocks, with only 1 stock in red, which was Tye soon. Sunright gave me a 167.67% returns, while PNE, LHT & Multi-chem gave me 30+%, I sold Tiong Seng for 72% returns that year.

My investing was for long term, however with close to 10 years in the stock market, I find my investing outlook getting more short term, and I have to constantly remind myself, why did I brought this stock and why am I selling it?

My strategy to sum it up, is the cigar butt investing approach. In small Singapore, most of our value stocks are penny stocks, stocks that very few will touch, and the liquidity in SGX is quite bad for all these penny stocks. When your purchase order reaches 5 digit figure, it can be quite hard to fill up your order, which is very limiting, and frustrating at times.

Excluding the house and loan, 75% of our net worth is invested in the stocks portfolio, and 25% is emergency cash. So diversification is crucial, my ideal stocks counter would be about 20, with each counter occupying 3 to 10% of the portfolio, these numbers allows me to sleep well at night. In 2017, Sunright & Multi-chem was occupying 20% each in the portfolio.

Very few can really invest money that they can afford to lose, for me it is money that we do not really need for the short term. And everyone invest for a purpose, my main purpose is for retirement, and if possible, early retirement.

To be self sufficient in our silver years in terms of money, so that my children will not be the sandwich generation like our generation. You will still need love, care and concern when you are old, and it would be nice for someone to follow you to all the hospital appts and follow up, but they do not need to foot the bills.

Short term, it gives me stability for my family, knowing that we are cashflow positive years after years, our money buffer getting stronger.

We continue to inject money into the stock portfolio, year after year, sacrificing a bit of the short term wants and nice to have, for long term needs. It is extremely hard to be a single income family nowadays, but if there is a will, there is a way. In life we lose some, and we gain some. Investing is my forte, and it is part of my life planning.

Till then.

P.S. The crypto portfolio is down by 90%, talk about value investing!

Cash is king – A new era

2022 – A year to remember

• High Inflation
• High savings interest rates
• High loan interest rates
• Sharp increase in property/rental prices

A year of high inflation
Inflation percentage are no longer just a number or a line in the chart, you can really feel it, we are spending 20 to 30% more in food, daily expenses.

With the increase of GST from 7 to 8% starting from next year, some people feel that buying this year can be cheaper and the savings can be significant, however temporary(permanent) increase in prices due to the war, energy shortage, has make some purchases a lot more expensive this year.

While it is hard to predict whether prices will go down in the near future, we do note that it is easy to be penny wise and pound foolish just to avoid the 1% increase in GST without taking into consideration the price of the same product before all the temporary increase in price.

As a family, we have to make adjustments here and there to reduce the daily expenses.

Is there a reduction in the quality of life, when you seek for cheaper alternatives? Yes and No.

This year, after many years of unsuccessful calories counting, I have turn to increasing protein and reducing carbohydrates(carbs).

Carbs is a cheaper form of calories if not cheapest. Singaporean hawker food are high in carbs and sodium, you get full fast on the carbs. Proteins are more expensive, but yet there are ways to manage your meal cost, and still achieving a good amount of protein.

My lifestyle is more sedentary, and I try to keep to the upper limit of 0.8g protein/kg for someone that is not exercising a lot and not into muscle building.

After observing how much I am spending on breakfast per meal which was about $4 on average, I went on to use this budget to maximise the amount of protein i can get for breakfast, while carbs continue to be the main bulk of lunch and dinner, one meal at a time.

I got really cheap 1kg Chile salmon pack from Shopee, i eat a small slice(80 to 100g) each meal and it cost about $2 per slice, then I went on to add edamame from NTUC for a bit of green and more protein, 1 hard boiled egg, eggs are the cheapest and easiest source of protein when you are starting out.

It costs about $3 to $4 per meal depending if i add other foods into my breakfast, and there you have it, a good amount of protein to kickstart the day while keeping to the meal budget of $4, cooking by yourself of course, once you outsource the cooking to others, you are paying for the manpower, rental and energy costs which can easily triple your price to pay.

Reducing carbs and sodium is really important and a good way to fight the 3 highs, however it would definitely increase your food cost, so proceed with some planning and you will be fine.

MSG seems to be a healthier option as compared to normal salt, backed with science, however MSG has a bad reputation over the years, and it would be hard to change that perception.

You can try low sodium salt first for a 30% reduction in daily intake, eating out would means exceeding your daily sodium intake almost every time, fish soup has really high sodium content if you finish that soup too.

High savings interest rates
Singapore Fixed deposit rates were at 0.xx% to 1.xx% from 2002 till late 2022, spanning two decades. It almost seems like high savings interest rates were a thing of the past, something that was once upon a time.

In Singapore, because of our small size, we will always be a taker. In 2001, post Dot-Com Bust and 9/11, USA federal funds rate dropped from 6% to 1.75% and since then, rates has remained extremely low.

While the federal funds rate of USA were above 2% between 2004 to 2008, reaching a high of 5.25% in June 2006, the rates adjustment somehow did not make it to Singapore savings account, our savings interest rates continue to be extremely low at 0.2x% for that period.

Property loan interest rates went up though, up to 5.xx% in 2006 peak, not on the saving rates though.

Low interest rates favour people who take loans, people who are willing to take advantage of the low interest rates, to use other people money, to enrich their own purse.

In general, people who are risk taker, stands a higher chance of getting rich, this will always be the case, especially so during the low lending interest rates era.

In that era, people were punished by putting money in the bank, their money values slowly eroding by the yearly inflation rates.

In the 1990s, having an emergency fund of $10,000 was considered good, but in 2022, an emergency fund of $100,000 seems more logical for the middle income class.

However everything changed from the year 2022. Singapore has a risk free savings rates from 2.5% to 5%. Yes, it is our CPF system, provided you are ok with locking up your money till at least 65 years old. (Year of Birth from 1958 onwards)

So with SSBs, T-bills & Fixed deposit interest rates and bank account savings rates exceeding our CPF rates for the first time in recent decades, we find ourselves with much more options.

Will there be a shift in the mentality of people previously looking at voluntary top up to CPF, to reduce taxes?

High loan interest rates – Sharp increase in property/rental prices
Every country has its unique situation. In Singapore, properties loan interest rates is now at 3.xx% as compared to 1.xx% at the start of 2022.

Property investors and landlords are expected to be paying a higher monthly instalments, however with Covid disruptions and WFH arrangements, the demand is higher than supply at the moment, and the higher interest is passed on to the buyers and tenants.

Singapore rental prices are at all time high, be it HDB or private properties. For people who missed the boat of being a property owner in year 2022, you are looking at paying easily 10 to 20% more for the same property that you have been looking at, it just seems harder for younger generation to be a homeowner sooner.

I owned, and lived in, a HDB, and have no wish to invest in a second property, or to take any loan other than the default HDB loan.

So I did not benefitted in a low interest rates environment except to see the properties prices soaring higher and higher when I was young and looking to start a family back then.

HDB loan interest rates is 2.6%, and it has been so for the longest time I can remember.

And for as long as it remains the same, a high interest rates environment would benefit me more.

I paid $400+k for my BTO back then, the next buyer who is interested in my unit will now need to pay more than $1M for the exact same unit, their monthly installment 3 times of mine, I hope their combined salary is 3 times of ours too, to be able to afford it, and indirectly they are paying for my retirement too.

But next comes the dilemma, I would also be paying very high price for my next home, so this musical chairs have to go on and on, and as long as the music does not stop, we will all have to dance.

I benefited directly from this high property prices game, I got in at a good time, got a good sized flat at a good location. As long as properties prices remain high, everyone that has a property is contented, happy for people with 2 or more properties, unhappy for the one without property yet.

When it is their turn to buy their first home, they are paying for the previous owner’s retirement, while also working hard for their own retirement, a rising tide raise all boats, but when the lending interest rates increase fast and furious coupled with retrenchment and recession, you will realise there is quite a number of people swimming naked.

You cannot really fault them, because there is no choice but to swim, to own a property in this country that we called home and are willing to defend for.

Cash is king – a new era

As a low risk taker, the high savings interest rates environment is better for me. Suddenly, I am looking at an interest rates of 4% for my emergency fund parked in the bank account, like OCBC 360 & UOB One Acc. That 4% can cover all my fixed monthly bills with surplus to cover for the daily groceries, with me doing nothing special to my money.

Suddenly inflation seems much easier to manage, low interest rates punished low risk takers, and drives up prices everywhere, you see more money flowing through everywhere, the properties market, the stock market with increasing PE ratio for the same kind of business.

The high interest is not game-changing, however it is a 1 to 2 months of bonus for people who have a solid emergency fund/ cash holdings.

I am looking to pay $0 for my S&CC, Electrical and water bills, my telco bills, and some of my insurance next year.

We are progressing well from a dual income family to a single income family, with a strong stock portfolio for our retirement and yearly big expenses. The returns from the children portfolio are paying for their enrichment classes, which i enjoy a drink while waiting for them.

Everything is highly possible, with some good old planning.

2 ways to fight the inflation in my opinion.

First, staying relevant, staying employed, your salary will always be pegged to the current economic situations.

Secondly, investing your idle money, that is if you already have your first pot of gold, if not you just have to try to build it up, before 30 years old if possible.

Till then.

Recent updates

The investment sphere has been interesting.

Our local STI ETF, has performed really well this month, from a -1.5% returns in Oct, to a +8.55% returns based on today price of $3.34, inclusive of dividends $0.051 in Feb and $0.061 in August with a starting price of $3.18 in 2nd of January 2022.

Investing in STI has been a mixed bag for me, it seems more to be timing the market, each time I invest in it, as it is hard to value an ETF, whether it is under-valued or over-valued. Everything is relative, we can compared whether it is cheaper as considered to other countries local ETF, we can also compared it’s current price to it’s previous price.

I scoped up some STI ETF in June, when I thought it was cheaper as compared to $3.4 in Feb and April respectively. I scoped some more in October when it fell to $3.0x, and STI ETF has given me an overall 8% profit in just 5 months, quite an amazing results for ETFs.

The selling can also be hard to execute, as selling it now seems to be timing the market again, while the right thing to do for ETFs is to DCA into it and hold for a prolonged period.

Nevertheless, STI ETF is a small part of the overall portfolio, and stock picking based on value(cigar butt approach) continue to form the main bulk of the portfolio.

Overall, the portfolio is doing well amongst a sea of reds everywhere, it is at 4.7% with the rise of all boats in Singapore stocks, previously it was hovering between 2 to 3%.

Speculative crypto portfolio continues to hover around -80%. The entire portfolio was parked in FTX app for that 8% interest. I withdrew it few days before FTX withdrawals was locked.

I did some shorting of FTT using Kucoin futures, it was a steep learning curve, time is really not on your side when it comes to shorting, as the funding fees eat into the liquidation price, and long candle can triggered liquidation before you even realised it. There was a profitable trade though, the last shorting of FTT though Kucoin before they removed the entire listing. My shorting journey is definitely a loss making one, but all these are very minimal amount to speculate. I still have one open shorting position on SOL PERP/USDT, after which the whole shorting funds will be gone, it is good to know that I am not suitable to be a trader.

Life is ok, the holiday is coming, more outdoor activities which can drain away my energy really fast, but for the children, at their age they just have unlimited energy, and outdoor is where they really thrive, swimming, library, playgrounds and shopping etc.

The eldest was diagnosed with myopia during the school check up, and we started her on Atropine eye drops right away via private clinic which can be quite costly. I wondered if my final degree will be different if I had Atropine during my generation, as this solution is the only scientifically proven to slow down the myopia, there are others more costly solutions, which may or may not work, another common one is the myopia control spectacles lenses, which is equally costly around $500 for the lenses itself.

The Anchor Operator Preschools(My First Skool, Sparkletots) fees are going to come down further again, which is good. But dual income seems to be the only way to go forward for Singapore, with huge emphasis placed on childcare centres rather than the kindergartens that we sent our children to. There seems to be a shortage of teachers, with 1 teacher taking a class of up to 20, and another Mother tongue teacher moving around classes to help here and there. Outdoor activities for kindergartens are almost non-existent nowadays. They are also pushing for more childcares to be STEM(Science, Technology, Engineering and Mathematics) oriented, the difference in curriculum is there. For me, it has always been clear, when we decided to go for the lowest cost preschools, and also not considering childcare.

First, we would not be a full dual income family, my time is more flexible, I will play a bigger role in the children life and education. With preschool hours ranging from 2hrs for 1st year Nursery to 4hrs for K1 & K2, what they learn in school can only form the foundation, while we as parents has to play a bigger part in their overall learning journey. Multiplication timetable is on us, not on the school.

We are very fortunate in some ways, in order for this arrangements to work.

1. A prudent investment portfolio started in the 20s focusing on minimising the downside over the long run, instead of focusing on temporary higher gains. The portfolio continues to grow bigger, providing mental and financial stability. As high inflations and lower income on my side kicks in, we can start to draw a little out from the portfolio for current expenditures, or any big purchases, while continuing to grow the portfolio for retirement purposes.
   
2. My Mother-in-law to help us with the kids, she is a big part of our children upbringing, and help us on a daily basis with the kids school arrangement. We lived near my in-law. and our current home was applied under the BTO Married Child Priority Scheme (MCPS) some years back. (Parenting is still on us, we are seeing a trend that some dual income parents are relying more on the grandparents to teach instead, hard decision in life with regards to bread and butter issues.)
   
3. Planning and more planning, to make all these happened, there are many weak links in this family chain, like the fragility of life. A deteoriation in health, mental or physical for anyone, would cost the whole chain to collapse, so we continue to create safety nets, like insurance (Hospitalisation + Term (CI)), the possibility of cashing out the current HDB in the worst case scenario, and being prudent in managing expenses, with budgeting.
   

For our emergency funds, we are parking it at OCBC 360, which gives us 4.65% for the first $100,000 following the new interest hike. The max monthly interest is highly attractive at about $390, which help us to offset all the household bills, like electricity water, s&cc, internet, mobile, just have to ensure the $500 minimal increment every month to avoid missing the 1.5%, while spending $500 on the cc is easily achievable for a family expenditures.

This year is the year of inflation, you can really see the price increment everywhere and it is very very obvious. So we use OCBC 360 to mitigate the bills, we used Shopee with its generous cashback and free shipping(try thursday for small items) to mitigate our daily expenses, we made some conscious effort to substitute the meal plans.

Our children love the Udon & Chawanmushi at Ichiban boshi, The Udon is about $13, and the Chawanmushi at $3 for the take away. We decided to try to cook our own Udon. First we got the frozen Udon from Ichiban itself, it is $4.50 for 5, so it is 90cents per Udon, then we got the dashi from Daiso, at $2.14 you can make many portion of dashi soup base, which is also used for the chawanmushi, dual usage.

In the end, the home cooked Udon and Chawanmushi(Protein) cost us about $10 per meal for the whole family as compared to $20 just for the children(1 udon+ 1 extra frozen udon + 2 chawanmushi). I am biased, ours taste better.

In hard times, we work harder for the savings, so that the savings can work harder for us too, though prudent investment.

June 2022

There is lot of fear in the stock market, crypto market, perhaps employment market too with some news of layoff and retrenchment. So it is the right time to buy stocks, or crypto if you believe in that particular token or coin. Everywhere, there are huge discount if the story remains intact. But yet, people often do the opposite, going in high and selling low to escape from further lows.

In the stock market where I am rational, I am looking to purchase more of the stocks that I owned, if the price falls below my purchase price, as long as the story remains intact, or the price of the stock trading below the NCAV price, and the dividends remains. Singaporean are yield hungry, when the dividends yield falls, most investors cash out irregardless of whether the story of the company remains intact, like banks when the Singapore government capped bank dividends at 60% of their previous declared dividends, local bank stocks price came crashing down about 20 to 30% in early 2020, only to recover back towards end 2020 and went on to new highs from then on. There were of course uncertainty due to Covid, and this analysis is on hindsight where we studied the history, and the chart of the stock. But it really shows one important thing that I have observed in my years of investing in Singapore stock market, Singaporean are very focused on dividends yields. Our REITs’ yields are well known around the world.

The stock portfolio is at +3%, and has a good cash percentage at 30% ready to deploy, while the remaining 70% in stocks has to work extra hard due to the high cash position.

Buying and selling of stocks are quite balanced, buying are focused on stocks trading below NCAV, while selling stocks at their new highs to lock in some profits in this period of high volatility.

Some stocks that i sold:

Multi-chem
I have held Multi-chem since 2016 where i purchased them around $0.5, it was one of the stocks which I could categorised into the Magic sixes group, named by Peter Cundill. It is one of my all time best winner, and because the story was still intact, i averaged up a few times, and it is now at its all time high close to $2.00. I have sold a big position of it, and a small amount remains in the portfolio, happy to take some profits off the table, and also continue to enjoyed it’s good dividends.

Advancer Global
A simple NCAV case, with no dividends declared in FY 2019 when i purchased it in July 2020, maybe that is the biggest reason why its price went below NCAV level, and then dividends resumed, up to 8% yield based on my purchased price, its price went up, and I got out at the good 100% profit.

Sunright
NCAV case, got in around 2016 at about 20 cents, did not managed to sell at its 2018 high of $1. Average up along the way, sold some at a loss after its price started going down, overall still a slight profit.

Cosmosteel
NCAV, Benefited from aggressive company share buyback, got in end of 2019 at around 0.09, with good dividends yield of around 5%, company started share buyback in 2022, highest price sold back to company was 0.163, while collecting good dividends.

Ban Leong
NCAV, purchased in 2018, IT products distributor company benefited from Covid lockdown, and WFH, with good dividend yields, managed to sell most of Ban Leong stocks at very good profits, might have more upside, but happy to take profits off the table.

This year to me, is more about taking profits off the table and buying stocks at discounted price when everyone is selling.

The concept of NCAV investing, or value investing is not new, you can pick up a few books in the library and be on your way to investing, however, the investor temperament and personality determines whether it will be suitable for you or not, I believe that value investing is one of the easiest bottom up approach to understand based on my personality, yet I agreed that many are not suitable for it. It does not have that kind of adrenaline pump that few are looking for, that trading mentality, on which stock next to buy, that herd mentality that most adopts listening and waiting for others to validate your decision, value investing to me is lonely, it is boring, it is independent, you are not right or wrong because other people says so, but because your data show otherwise.

Value investing is unglamorous. Showing people my scoresheet, is more like telling people, i went to the market, and the veggies were on discount, the frozen meats are so much cheaper than the fresh ones, and they all taste similar, it is always how cheap it is, how much i save etc. It is often refer to as the cigar butt approach investing, there might be some few good puffs left, but that is it. Telling people you invest in Telsa, or you dabble in crypto would impressed more people that telling them a local penny stock company, that most have never heard of. At last year high, Telsa was trading close to 30x of their PSR, or 45x their p/b, but no one think it was high until it came down and people realised how unrealistic it had been on hindsight. People would talk about the success stories of Amazon, facebook, apple etc that they all too traded at extremely high psr and p/b at well.

Company falling into the NCAV category normally has their own issues, some major, some minor, some due to its cyclical cycle. And very few will go on to be very successful again, and so I agree that most of the times, there are only some good puffs left. 90% of companies in NCAV are pretty bad in terms of assets and profitability, a lot of S-chips in NCAV, which I avoid at all costs, because there are no accountability to local investors if things go wrong. But yet there are money to be made in that few puffs, and some company can become very successful again, it is good to hold when their stories remains intact, you would get a few multi bagger along the way.

Gone are the days where people would only invest in profitable companies, and partake in the company profits. Because not all of us can be good business owner, we put our savings into other people companies through the stock market, to let other people grow our money. Now people are more interested in the stories and their presenters.

I started eating durians last week, and prices are quite affordable as compared to off peak season. Before the durian season starts, there will be articles and news, talking about the bad weather, the demand and supply issues, and why durians will be more expensive etc, then when you look at the price of the durian in local stalls, they are still the same. This is really like investing, ignoring the bells and whistles, because no one can really predict the future. Being a value investor means I am skeptical and wary about what people tell me, i see with my own eyes, and make my own judgement, whether it is true or not, and sometimes, my eyes can be mislead too. But most of the time, by thinking first after we have seen, and pausing first before we speak, you will do better than majority out there.

To read unbiased news seems to be near impossible nowadays, as every news has their own agenda, it is more like feeding news, because over time, our defense will go down, and we will choose to accept whatever is given.

Boiling frog

The boiling frog is an apologue describing a frog being slowly boiled alive. The premise is that if a frog is put suddenly into boiling water, it will jump out, but if the frog is put in tepid water which is then brought to a boil slowly, it will not perceive the danger and will be cooked to death. – Wikipedia

News mentioned, durians will be more expensive, durians will be more expensive, durians will be more expensive. Ok, I will be anticipating more expensive durians, thus I will increase my budget and bring more cash on hand. Subconsciously, we are influenced. If durian prices are the same, you can buy more with my increased budget, good for you, but actually you do spend more on durians without realising it and thought you got a good deal.

Too many fine example of news feeding, just to capture our attention to a particular subject, some of the methods very blunt and direct, once or twice, we will complain to the people around us, “So obvious!”, but over time we forgot about it and accept it.

I think not reading news and social media can be more beneficial in terms of value investing and a happier life.

Back to the mundane life then.

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.