Letter To Shareholders (10) - Performance Review 2018Q2

Economy Commentary
Market slip further into correction terriority - falling from its peak of 3600+ points in mid May to its current 3200+ points, mostly on fear of trade war between China and America. Yes, we are on the brink of war. Year to date, STI is down about 2%.

Locally, we can see a how a seemingly defensive and government link business - Hyflux, can be brought down by immense debts and losses.


Performance Review Highlights
Our portfolio suffered an almost $10K decline in 1 single quarter, despite a much less severe correction compared to 2015. It proves how much our portfolio have grown - 3 times bigger than 3 years ago. After meeting our warchest goal in 2017, we have been dedicating all future incomes to investments. 

YTD, we underperformed the STI (chunking up 8% losses), mostly due to the continued decline in Telco industry (our biggest holding) and to a lesser extend, REITs and Property. Thanks to the dividends collected over the years, we are still in the green.

We took up 3 big positions this quarter - Netlink Trust, Kimly and adding further into Singtel. We paid out $1500 in dividends in Q2, the highest Q2 payout since inception. At this rate, we should have no issue hitting 5 digits passive income for the year.

Operating Highlights - Income
Q2 income is at all time high, mostly from higher salary (increment and benefits) and passive income. Compare to 2015, our salary have increased almost 30% and our passive income have grown almost 75%! 

Operating Highlights - Expenses
Expenses were horrendously high due to much higher than expected costs during the April vacation, costing nearly $3000 alone in total. It really went beyond my budget.

For recurring expenses, aside from some personal products and a pair of new office shoes (old one was 3 years old and think starting to grow mould), everything else were quite minimal (in line with other years)

Acquisitions

3 big positions taken up this term:

Netlink NBN Trust - This will further beef up our dividend portfolio as we believe this defensive monopoly that will form the backbone of Smart Nation in the next 20 years. We expect earnings and dpu to be minimally around 4.5c (5.5% yield), and in optimal case up to 6% yield on cost. Unless the price drops drastically (which is highly unlikely), we will freeze it for pure income.

Kimly - Defensive consumer staple with strong cash flow and organic growth prospects. This is more of a capital-gain and opportune play.

Singtel - We did not expect the support at $3.3 to give way, but it did. We accumulate yet again at 5.6% commited yield. We first brought into this company at 4.5% yield, so there is no reason why we would not at this price. 

Outlook

With the recent acquisitions, we have almost depleted all our working capital. Barring a greater market correction (STI to 3000points), we likely would not dip into our warchest. Our plan is to invest as we re-accumulate our working capital through monthly cash inflow. Instead of buying new stuff, we will actively look for opportunities to do some capital recycling in the next quarter.

Some stocks on our watchlist include:

STI ES3 (3.2), ST Engineering (3.2), Capitaland (2.8), Sembcorp Ind (2.5 or 75% of book value), Mapletree Commercial Trust (1.55), Singtel (3), Raffles Medical Group (0.9).

Quarterly Results Review - 2018Q1

M1
The results were just as I expected as mobile service revenue and profit increased slightly for the first time in a long time, signialling that earnings indeed bottomed in the last quarter. Of course, this is until TPG enters the battlefield.

At worst I forsee another 5-10% drop in earnings. EPS is 14.c in Y2017 - Assuming the worst case drop and EPS of 12.8c, an 80% payout ratio is 10.3c DPU which at $1.74 still gives a 5.9% yield. Assuming a steady DPU of 11c, we are hoping it would yield 6.3%. They have lot of initiatives such as waste management, SG bikes, corporate segment growth which we hope would eventually replace the declining mobile revenue. A secondary factor is confidence boost by several like-minded investors.'

As before, they are branching into other areas like malware detection solutions, nationwide IOT, smart sensors, "intelligent" waste management system, cloud offering of digital startups. Whether they will take off remains to be seen.

For now, my preference would be to take a small "swing" position to slowly recoup the losses, targetting to sell a portion above $1.9 (less than 6% yield) and buy should it come down to a reasonable price.


CapitaCommercial Trust
Headline figure was quite misleading as DPU drop 10+% due to the enlarged units base. Otherwise, DPU would have increased 7.6%.

Good results (DPU up 8.66%, 6% higher) but the stock price have shot through the sky. I really should have grit my teeth and sell when it was at more than $2. It is really unstainable considering the yield at that price is below 5%.

I believe it would be more fairly valued at $1.65 for a 5.5% yield, or at best $1.8 for 5% yield. The market are pricing in lot of growth from their AEI and Asia Square acquisition.


CapitaMall Trust
Slight increase in DPU to 2.78c for 1Q, and seems to be on track on meeting the 11c target. Yield remains at 5.4% yield at ~$2.0x. 

Announced divestment of Sembawang Shopping Centre which consist of only ~1% of CMT asset, but the surprise was selling it for ~$248m when the independent valuation is only half of that. Forumers who attended AGM mentioned CMT are conservative on their valuation, which seems to be good news if this sale hold any truth.


Starhill Global Trust
Starhill results slightly worse than I expected with DPU dropping by 7.6% (thought max would drop by 5%). Not sure how big a role the renovations played but a 7+% shopper traffic drop at Wisma seems bad. Hopefully DPU will stabalize in 2H with AEI completion in Australia.


Frasers Centrepoint Trust
In summary a good set of results led by Northpoint City.
 DPU of 3.10 cents, up 2.0% year-on-year (2Q17 DPU: 3.04 cents)
 Gross Revenue of $48.6 million, up 6.3% year-on-year
 Net Property Income of $34.8 million, up 6.9% year-on-year
 NAV per Unit of $2.03 as at 31 March 2018 (31 Dec 2017: $2.02)
 Gearing level at 29.2% as at 31 March 2018 (31 Dec 2017: 29.4%)

Frasers Property
Results swell this quarter to make up for the huge hit last quarter. Recurring income maintained at around 70%.

Frasers Centrepoint Limited renamed. Its share price has been on a downtrend since hitting $2.25.

Current NAV fell 4c to $2.42, and I expect dividends to be maintained at 8.6c a year (roughly 60% oapyout ratio). I am really treating this as an ETF and not reading much into the details. might add on more should it come to $1.7 (30% discount to NAV, 5% yield).


Far East Hospitality Trust
Finally we see glimpse of recovery after many consecutive quarters of DPU fall - it rises 1% to 0.94c. 

With contribution from Oasis Hotel Downtown (acquired on 2nd April) and recovery in the industry, better times and DPU should be ahead. Slight drag from Service Residences.

At 67c, this is one of the REIT which haven't run up significantly in price. I might consider adding if there are no better deals and it drops a bit more (to say around 63c).

Expect total DPU of 4c, which gives a yield of around 6%.


Sembcorp Industries
Almost all analysts are predicting $3.5 to as high as $4.4 target prices, but I still see no major turning point in the results. Yield at current price is a pathetic 2% and I am really reluctant to average down on this (I can get better yield from my banks).

Good points? The IPO in India is the major catalyst, and it is trading at relatively big discount to NAV of $3.6. If it falls to $2.70 I might do an average down.


Netlink Trust
Higher than IPO forcasted DPU of 3.24c declared. At $0.81, forecasted yield is around 5.7%

I have built a substantial position in this, and this will form a decent pillar in my dividend income.

Link to DBS Report

Singtel
Management finally committed to a dividend guidance of 17.5c, although I have never doubted Singtel ability to maintain it. This is definitely meant to assure investors in face of earning pressure (profits -18% in Q4). Payout ratio is at the highest at 81%.

At $3.40, Singtel currently trades at 10x EV/EBITDA (minus -2SD from historical mean), below its five year historical mean of 12x. It is also supported by a attractive yield of 5.1%. P/E is close to 10!

I would definitely add on more if I weren't already so heavily vested in it. I think I will fire one more bullet should it falls to $3.3, and reserve 1 final bullet for $3.

Accordia Golf Trust
Yield has gone down to 6% from the 7.5% I estimated when I first invested in this counter (roughly same price). Full year DPU is now just 3.85c, down from 6.04c last year. NAV stands at 90c.

It was hurt really badly by membership deposit in 1H and I doubt it will ever go back up to 78 high again. Utilization rates also plummet in Jan to Mar.

Management continue to iterate Japan's economy recovery, hopefully it prorpogates down to this counter. I will seriously consider selling it if the price rebounds or fundamentals continue to weaken (it has weaken for 3 quarters).


Watchlist / Potential 

M1 - Will sell this at $1.8+ to reduce exposure to Telco sector.

Singtel - Extremely attractive at committed 5.2% yield. Below $3.3.

Raffles Medical Group - Closer to $1. High P/E but long term growth story. China is make or break.

Comfort Delgro - $1.9 and below would be extremely tempting but boat is gone.

SGX - Closer to $7. India exchange saga impact unknown.

ThaiBev - A lot hinges on their Vision 2020. Debt is crazy after the acquisition spree. Results were bad as expected consumer recovery did not happen. Currently at 17.5 P/E, -1sd below 5 year average. 70c maybe?

Mapletree Comm Trust - Closer to $1.5, camping at 6% yield. NAV is $1.37.

ST Engineering - Would likely bite at 5% yield (closer to $3)

[Obsolete]

Capitaland - Look closer to $3.3 or below.

Mapletree Greater China Trust - $1.1 or when it retract to more than 7% yield.

Mapletree Logistic Trust - Despite >10% retracement still pretty expensive. If it comes closer to book value, say $1.1.

China Primary School Kid Knows FIRE

When a kid knows more about FIRE than you...

 It took me nearly 25 years, and this kid has it all figured out during elementary school.

"I don't expect to be able to escape from the trials of reincarnation, but at least I can escape from the repetitive mechanical loop of life."

 

He may have put it very crudely in words - 发财.

But what this boy want is not money, but freedom in life, to get rid of the hollowness of life.

He might not know what it is yet, but what he has described is truly FIRE.

Is FIRE an unaccepted idea in Singapore?

I briefly shared the concept of FIRE with a couple of friends lately and while they did not openly denounce it, I can feel them almost sneering at that idea/me. Sadly, FIRE still have a big social stigma in Singapore. I have written about it before, but this time I am actually experiencing it for myself.

I feel you will either come off as trying to show off, having people think you earn a lot, or being totally unrealistic. FIRE is just too foreign to most Singaporeans - retirement is already impossible, and you're think about doing it much early?!

Just look at the amount of diss netizens rain on ASSI, 3Fs and other financial bloggers on the same path or have already achieved the dream. People that can do just do it, people that can't complain. Well, not that I need their approval.

Like this author experience, I think it's an "Asian Culture" problem. FIRE is seen as something "wihout ambition" and failure to contribute to society.

I see friends that are earning much much more than me (talking about near 5 digits) "struggling" to meet payments for all sorts of luxuries - new cars, mature estate HDBs with expensive renovations. Nothing wrong, just different priorities in life.

In fact, FIRE isn't a loftly or noble goal either. In fact, I think FIRE is largely a selfish goal, a goal to serve yourself.

Also, a modern society probably cannot sustain one where everyone else is working towards FIRE and minimialism. In a way, the FIREers are depending on the consumerism behaviour of the masses to survive.

Anyway, what's my ideal age to reach FIRE? I am of the same opinion as the Financial Sumari.

Letter To Shareholders (10) - Performance Review 2018Q1

Economy Commentary
Finally we saw a glimpse of the bear in February. Volatility is returning and hopefully we will get some chances to deploy our funds. There were a couple of days when the DOW fell more than 1000 points, but it quickly rebounded. STI hasn't even retract 10% and this is definitely nowhere near major sale-terriority yet.

Macro wise - we have the threat of US-Sino trade war brewing, de-nuclearization of North Korea, more incoming interest hikes and who knows what else the crazy president is going to do.

Locally, there is a lot to learn from the Noble Group saga. When it fell from over $1 to 60c, people were saying "there is no point selling now, it is already so cheap. It can't possibly get any cheaper." Well, cheaper did it get. After a 10-to-1 reverse stock split and more rights issue, it has since lost a further 90+% of its value. The important lesson here is not just that cheap can get cheaper, but how crucial the management are to a company, particularly for a cut-throat business. When you got selfish, incompetent and some might even say corrupted management, it is just not worth investing in the company no matter how cheap it is.

Performance Review Highlights
Our portfolio underperformed for Q1, losing 2% compared to STI which is still up 1% YTD. It was dragged down mostly by the recent REITs correction and the slight decline in Singtel (our biggest holding). At the trough, our portfolio was down as much as by $8000 from peak.

Interesting note: Our equities holding is nearly doubled from the same period last year! This is proof of how much we are pumping into investments.

In this quarter - we added Starhill Global REIT and M1 Limited, decisions we would elaborate more on below. Thanks to Singtel special dividends - we paid out over $2000 in dividends in Q1 (the largest amount of any quarter by far)!

Operating Highlights - Income
I really did not expect main income to exceed the record 2016Q1 figure, but the higher base-income plus good bonus made it about 5% higher. Financial-wise, moving on to this new job is definitely the right move. We made higher income in all the past 4 quarter - and I think the difference will be even more pronounced this year. Looking forward to the year end tally.

On top of one-time income from CNY angbaos, we made some gambling winnings ($300+) this year (compare to a loss last year). Passive income is also signifcantly higher. In local news, government announces a minor angbao to be credited later in this year.

Operating Highlights - Expenses
A lot was spent on insomnia supplements and other sleep aid "devices" . Some of them are quite ridiculous, but I am desparate now. I will try it as long as it has a sound chance of working, and I will continue to hunt for an effective cure. I also "impulse add-on buys" a couple of board games at Amazon for over $150, which are mostly bad buys looking at it now. I don't forsee the games being played much going foward, and it really goes against my minimalism philosophy. Will definitely work on curbing these buys in the future.

2018 marked the first year of giving my mum CNY angbao, and I intend to keep this "tradition" going forward. This made up the bulk of the "one-time" expense category. Interestingly, when I compare recurring expenses for the past 4 years, it is almost equal (within ~5% of each other).

New Account - DBS Multipler
One of the major decision this quarter was moving from OCBC360 to the new DBS Multipler. I will not go into specific review of the Multipler (you can read it here), but for our case, it offers a more compelling rate, especially after the repeated downgrade made to OCBC.

For OCBC 360, I get 1.55% every month, and 1.85% occassionally.
For DBS Mutlipler, I get at least 1.9% every month, often 2.2-2.3%, and perhaps even 3.5%!

A rough estimation:
OCBC: $70000 x 1.6% = $1120
DBS + CIMB: $50000 x 2.0% + ($17000 x 1.0%) = $1000 + $170 = $1170
DBS + Maxigain: $50000 x 2.0% + ($17000 x 2.0%) = $1000 + $340 = $1340

This is assuming the $3K remain in OCBC to maintain the account fall below fee. I am leaving the account open to faciliate switching back if either banks revise their terms in the future, and also it is quite an hassle to close it due to all the GIRO payments.

Other side reasons:
- I no longer have to worry about "clocking $500" to meet the spending requirement of OCBC365.
- I have heard stories of OCBC beinga adamant about not waiving annual fee if you do not meet their spending requirements. This is in preparation for that day. (coming this year October)

Overall, I estimate this shift to earn an additional $200+ of free money per year.

Acquisitions
2 big positions taken up this term:

Starhill Global REIT: We have been eyeing to buy it this below 70c. When it seems like it would never come, we finally give in to pay a higher price. Still, it should be decent value. Near 6.5% yield (could drop further in next quarter, but confident that it would stablize once the AEI completes), 0.8P/B, a decent gearing of 35% and generally good management. There are plans by the government to "rejuvenate" Orchard Road - I'll reserve my judgement on how effective it would be.

M1: We would not deny it is partly a gamble to "recoup losses", but there are several positives we are betting on. Management guided lower capex next year ($120M in 2018 vs $150M in 2017), inclusive of spectrum rights. In our view, Q4 results showed sign of bottoming, with revenue increasing, EBITDA stabalizing and increasing customer base.

At worst we forsee another 5-10% drop in earnings. EPS is 14.c in Y2017 - Assuming the worst case drop and EPS of 12.8c, an 80% payout ratio is 10.3c DPU which at $1.74 still gives a 5.9% yield. Assuming a steady DPU of 11c, we are hoping it would yield 6.3%. They have lot of initiatives such as waste management, SG bikes, corporate segment growth which we hope would eventually replace the declining mobile revenue. A secondary factor is confidence boost by several like-minded investors.

Outlook

Aside a $1000+ upcoming vocation, recurring expenses should be similar to last year.

As of now, we still have working capital for 4 more acquisitions - and our watchlist includes Comfort Delgro, Raffles Medical Group, ThaiBev, Mapletree Commercial/Logistic/Greater China Trust, ST Engineering, Netlink Trust and Singtel.

Should a major correction comes a long, we intend to build a more substantial position in STI as long-term foundation - strategy is 1 bullet from 3200 points and another for every 200 points drop.

Year In Review 2017 - Annual Financial Report

Presenting 2017 Annual Financial Report!

Key Highlights & Notes From CEO

"常将有日思无日，莫待无时想有时"

We never once took our main income as being secured or guaranteed, and the long-term future have always been on our mind. Every day, we build our portfolio bit by bit, brick by brick, for the ultimate goal of escaping the rat race in the not so distant future.

This has been a smooth-riding year as we completed 1st year in our new job, ride on the strong bull market and took a giant step towards our FIRE goal. Our financial balance sheet has never been stronger.

Our Achievements (2017)
1. Record earnings since inception - net asset value grew by 29% (33% last year).
2. Highest overall saving rate in history - 80.5% (78.2% last year).
3. Safety passive income (2x expenses) now cover 41% of our recurring expenses (28% last year).
4. Portfolio market value grew by a staggering 72% (inclusive of capital injection and gains).
5. Portfolio XIRR for 2017 is 20.44%, up from 15.6% last year.
6. By pay-date, distributed over $4300 (~$360 per month) worth of dividends ($3000 last year).

Our Balance Sheet (2017)
- More than 5 years expenses* worth of Emergency Funds
- More than 5 years expenses* worth of Warchest
- "Working capital" of 4 bullet rounds, ready to be fired in 2018
- Max out $40,000 in CPF-SA for the additional interest (5% interest for first $40K)

*Based on our highest expenditure year thus far.

Even if we were to lose our job today, I am very confident we can live a relatively comfortable life for at least the next 15 years. The problem - 15 is far from enough.

-------------------------------------------------------------------------------------------------------------------------

Comparison With Previous Year
Income was about 3.7% higher due to slightly higher active and passive income. We actually achieved a higher operating income this year despite the record breaking 2016 (a big surprise).

Expenses was 7.3% lower - with some of the significant expenses being Mayday Concert brought in Q1, a good office chair in Q2 (absence of giant loss in 2016), traditional Parent Gift in Q3 and a New Laptop in Q4.

*All figures exclude CPF and investment capital gains/losses.

-------------------------------------------------------------------------------------------------------------------------

Saving Rate For 2017
Expense were stable except for the month of August and November (you can see clearly the spike caused by our big angbao and new laptop).

For the whole year, our expense as percentage of income stood at 19.5% (21.8% in 2016, 21.4% in 2015), translating to a crazy saving rate of 80.5%! This is skewed by a relatively low expense year, so it might be some time before we see such rate again.

As a percentage of our active income, we saved 89.5% of our salary!

-------------------------------------------------------------------------------------------------------------------------

Recurring Expenses Breakdown
After recording expenses for 3 years, many things are becoming more apparant as I now have a good base to see trends and make comparisons. This year would be considered "average" as I spend somewhere between 2015 and 2016.

I do see "one-time"expenses rising over time as I intend to give more to my parents every year. Recurring expenses should be stable at around 60 to 70% of total expenses.

Overall categorical expenditures are identical with last year - except that I spent much less on personal and entertainment this year. Top categories are the essentials - food, travel (transport) and utilities (internet and phone).

Random discovery time!

1. My lottery spending (Toto, 4D, Big Sweep) this year is $300, about $25 per month. I strucked Group 5 once and Group 6 a couple of times, earning back $80. There goes $200+ donation to Singapore Pools.

2. I ate fast food 68 times this year (counting lunch, dinner, supper)! I set a goal of 60 last year which I didn't meet, but it's still an improvement over 81 times last year.

3. I brought only 11 cups of Bubble Tea (i.e Koi, Gong Cha) this entire year, which costs me only $34 in total (Praised the $2 Liho promotions!). This was much better than 31 last year.

4. I brought 15 cups of Cafe drinks (i.e Starbucks, Coffee Bean) this year, totaling $63. Accounting the treats from others, it should be around 21 like last year.

5. I visited a restaurant only 20 times this year with each trip averaging $14.80. The low costs was largely due to subsidies like the NS50 vouchers.

6. I wenting singing in Singapore only 4 times this year (down from 8), each trip averaging $16.50. Anyone want go sing? :(

7. I spend approximately $1000 every year (average of past 3 years) on topping up EZ Link Card. That's around $90 per month.

8. I earned over $400 from MINDEF this year (10 ICT Sessions and IPPT-Pass)! I am strongly motivated not to go for IPT again, which unfortunately (fortunately) means $200 lesser next year.

-------------------------------------------------------------------------------------------------------------------------

Passive Income VS Recurring Expenses
This section strips out the "noise" and highlight only the recurring portion of expenses against passive income.

Year 2017, passive income is now sufficient to cover 82% of my recurring expenses (56% in 2016). Adding in the "double safety margin" criteria, it can cover 41% of my expenses. Once again, this is skewed by the low expense year.

-------------------------------------------------------------------------------------------------------------------------

Portfolio Performance
Glad to know that our time-weighted returns have beat the index every year except in 2014 when we first dipped into investing. I also think we achieved this on comparable volatility to the STI.

Year	Portfolio	ES3
2014	-2.94%	7.00%
2015	-8.12%	-10.64%
2016	11.92%	2.73%
2017	22.00%	21.11%
Overall	21.76%	18.95%

Monthly Volatility (*in 2014, we only had 2 stocks)

Year	Portfolio	ES3
2014	15.79%	2.68%
2015	3.65%	3.41%
2016	3.60%	4.03%
2017	1.77%	2.46%
Overall	7.49%	3.24%

Based on model statistics, our portfolio have a beta of 0.63 (average correlation with STI), with "Value At Risk" of 7.5% and "Expected Shortfall" of 9.6%. This means that in 99% of the cases, we would not suffer more than 7.5% loss in a month. In the 1% case, we can expect to lose 9.6%.

In terms of acquisitions, we added CapitaMall Trust, Far East Hospitality Trust, Singtel as well as a small stake in Netlink Business Trust. A majority of our returns this year came from the recovery of multiple REITS, especially CCT which continue to run despite the rights issue. The major loss came from the privataization of Super Group, which locked in 25% (about $1800) loss.

Our major holdings currently are Singtel (23%), the Capitaland REITs and the Frasers Family. Excluding the STI, we have a healthy and diversified portfolio of 10 holdings (up from 8 last year).

Compared with last year, we have grown the size of our portfolio by a staggering 72%!

-------------------------------------------------------------------------------------------------------------------------


Review of 2017 Goals
We fell short of the $5000 dividends/STI goal due to the bull market, and stop pursuing the Robo-investment strategy in consideration of the high management fees.

Outlook For 2018 
2018 strategy remain pretty much the same as before - continue to build a strong and diversified income portfolio. This time round, the markets are much higher than before and we have to be extra caution in case the black swan arrives.

Our ammunition have replenished entirely after December, and we intend to deploy them before the dividends season come in Q2. The major goal next year would be $6000 worth of dividends ($500/month!) - it's tough and we really need to see some great singapore sales to achieve this. SGXCafe projection currently is around $5300.

Next year main revenue would depend largely on whether our contract gets renew in Q4. If so, income should be slightly higher.

Given that we have replaced our phone in 2016 and brought a new laptop in 2017, we do not forsee any major expenses. There is a slight possibility (5%) of wanting to upgrade our PC if it completely breaks. There are plans currently to travel to nearby region in Q1, but it is not anything too lavish.

All in all, I expect next year expenses to be around +10% (mostly from increased angbao for parents) compare to this year. Let's see.

Long Term Goals
With 3 years of cashflow records, we can finally map a high level financial roadmap for the next 10 years. These are very rough estimates (guidelines), but I think they are something to look forward to:

By 2020, passive income should be able to pretty much cover all recurring expenses. By ~2022, we should be able to save 100% of our salary every month.

In Year 2022, we would also become eligible to buy a HDB flat - it will be a huge decision that we have to make when the time comes.

Before 2025, we should reach our "safety passive income" goal of covering our recurring expenses twice over.

All these are assuming that current circumstances remain unchanged (no marriage, no unexpected emergencies, catastrophic economic crisis, etc).

Letter To Shareholders (9) - Performance Review 2017Q4

Performance Highlights
The stock market continue its relentless ascend - The DOW is at all time high and cryptocurrency is all the craze nowadays. You know we are in a bubble when even uncles and students are trading cryptos. Humans never learn, do they?

“Bitcoin has no underlying rate of return,” said Bogle, 88, who started the first index fund in 1976. “You know bonds have an interest coupon, stocks have earnings and dividends, gold has nothing. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it.” - Jack Bogle

Our portfolio underperformed this time, growing only 4.2% compared to 5.7% of the index. This is largely due to the lack of banks in our holdings. (greatly regret not buying OCBC/DBS last year). Nevertheless, we were able to ride on the growth of our REITs.

In the final quarter, we paid out about $600 in dividends (base on pay-date, hence excluding the massive injection from Singtel). We also became friends of SGXCafe in order to more accurately track our performance - look out for more statistics in our annual report!

Operating Highlights - Income
Overall income for the quarter was more than 50% higher compare to same period last year, making up for the 40% drop in Q1. Salary-wise, 2017Q4 was roughly equal to 2016Q1 due to shift in bonus period.

Aside from the bonus, income this quarter was pushed up by many factors:
- Passing with incentive for IPPT
- Birthday red packets from family
- Side "job" allowance
- Passive income a record for Q4.

Operating Highlights - Expenses
Our big purchase this quarter was a Lenovo laptop, which we brought after much consideration. This is our first laptop purchase after nearly 10 years (last brought in 2008 for University). It has better specs (8th Gen i5) compared to the Microsoft Surface and come in at a much lower price (with Pen, Keyboard all inclusive). Overall, we think it is a good value deal that would make our life at work easier.

Otherwise, regular expense is 20% lesser than last year. We did not spend much except for a couple of clothing/shoes brought mostly during 11-11 sales.

Acquisitions
We subscribed to CCT rights and add on to Singtel again on its continued weakness. Interestingly, we also brought Singtel during the same period last year.

We continue to believe that Singtel is currently at an attractive price and would buy more if we were not already heavily vested in it. Largest company in Singapore, 20 years dividend track record, mere 60+% payout ratio and a stable 4.8% yield.

Topping Up CPF
We seriously evaluated the possiblity of topping up our CPF to reduce tax - more specifically medisave. This is something we have been contemplating since 2014. The critical factor once again came down to our long term goal - do we want to retire after 55? Or earlier?

If your decision is to retire after 55, there is no doubt that topping up CPF is extremely attractive. In fact, we would advocate pumping as much as you can so that you can hit FRS by early 30s.

In the end, we still conclude that topping up contradict too much with our FIRE goal.

Outlook
More details to come in our Annual Report.