Frasers Centrepoint Trust | NPI dipped 3% while DPU is maintained, largely due to Northpoint AEI. Northpoint will be complete in the later part of this year, and in my opinion its integration with Northpoint City will bring FCT to new heights. Average rental revision at 4.1% which is impressive when you compare it to other REITs which are either incurring negative revision or flattish revision. A slight concern to me is the 3.5% dip in shoppers traffic. We have to observe to see if this forms a trend. |
Super Group | Divestment completed at $1.30 per share. |
Sembcorp Industries | Profit goes up slightly thanks to land sales from Urban Development, but this is one off. Marine continue to suffer and Utilities was unexpectedly bad, particular the overseas segment. Big news is new CEO plans to take 6 months for a strategic revamp of its operations. |
M1 | Profit continue to suffer (6th consecutive quarter) another 14%, with the usual culprits such as falling international call. 1Q EPS at 3.9c, down from 4.5c. M1 is sacrificing average revenue per user (ARPU) in exchange for maintaining/slightly increasing subscribers. Losing faith with its management as they won't commit on dividend/profit guideline, sticking with "80% Payout". FY 2015 DPU: 15.3c, EPS: 19c FY 2016 DPU: 12.9c, EPS: 16.1c Worst case, I am expecting 15c EPS and 12c DPU. At $2, it will be 6% yield. Stock price is heavily influenced by the ongoing "shareholder review". |
Capital Commercial Trust | Once again defy all expectations with 10% higher DPU despite the office rental headwinds. Main catalyst now is the redevelopment of Golden Shoe Complex. The price has run up a fair bit now, and I think it's now fairly valued at around $1.6. |
Accordia Golf Trust | Unexpectedly bad results, with current DPU dropping over 14% to 4.71 yen for the whole year. Annual dividend (SGD) dropped 9% from 6.63c to 6.04c This is attributed to higher snowfall in Feb. Remains at a steep discount to book value of 0.91 and supported mainly by its yield. |
ST Engineering | NA. Crazy run up in prices! |
Singtel | Showed resilliant results (net profit up 2%) when its peers are down in doldrums (both M1 and Starhub down 30 %). Nothing much to say except I'm confident. Looking forward to Netlink IPO later this year. |
Frasers Centrepoint Ltd | Really surprising results with net profits up 90% due to profit recognition from Suzhou, China and Singapore. FCL currently has about 46%, 33%, 9% and 7% assets in Singapore, Australia, China and Europe respective - and they are looking to increase investments in overseas assets for long term growth. It's a good diversification from SG for me. 70% of the assets and 50% of net profits are from recurring sources (i.e REITs), which provides a good "baseline" of dividends. Despite the relatively high level of debt, I am quite confident in its management. Dividends has been maintained at 8.6c for the past 3 years (5.8% yield at $1.495, very high for a property developer). |
Capitaland Mall Trust | Not much comments as position is extremely small. Rental revision is almost flat. Expect DPU to be stable around 11c until the return of Funan Mall in 2019. |
Straits Times Index | NA |
Thursday, May 25, 2017
Quarterly Results Review - 2017Q1
Saturday, May 20, 2017
ZZ Financial Education Series 1 - No One Care About Your Money Except Yourself
If you ask the butcher if you should have meat or veg today, what would he say?
If you ask the salesgirl if the shoes look good on you, what would she say?
If you ask the insurance agent if you are sufficiently covered, what would he say?
If you ask the property agent is it better to invest in stocks or property, what would he say?
If you ask the broker if it is a good time to buy stocks now, what would he say?
If you ask the barber if you need a haircut, what would he say?
...
DON'T ASK STUPID QUESTIONS LAH!
A property agent agent job is to sell house, not to take care of your finances.
An insurance agent job is to sell insurance & earn commission, not to take care of your finances.
---------------------------------------------------------------------------------
In the first post of this series, I'm going to debunk why you should never grow your money with insurance companies, banks, managed funds, etc...
It's actually VERY SIMPLE.
Just ask yourself: Why are they wasting their time to help you manage your money? You think really got people so free? Why do you think there's always random strangers at the MRT stations offering to help you "earn more money"?
It doesn't take a genius to figure out - because they get a cut in the process. Commissions, management fees, you named it. If they don't earn anything, you think people got so much free time to waste on a stranger?
Always remember: Their purpose is to earn from you.
This immediately puts their interest and your interest in conflict.
Supposed there are 2 equal investment products, would they recommend you the one that cost less or more fee? If they take more percentage in fee, that means less returns for you. So are they working in your interest, or their interest?
It's nothing personal - it's just business.
It's just how the world of capitalism works.
Have you ever wonder why no insurance agents/financial consultant would ever recommend you to buy Singapore Saving Bonds (risk free 2%), or to buy term insurance (they get almost no commission), or putting your money in CPF?
Imagine how dumb that is.
It's like the meat-seller telling you "Don't eat meat already. You are overweight."
It's like housing agent telling you "Prices are high now you should wait."
It's like the shop uncle telling you "This item if cheaper if you get it from next door."
See the point?
I'm not saying what they recommend doesn't make sense. I'm saying 99.99% of the time (unless you have a saint for a financial consultant), what they recommend isn't optimal. Agents got to eat, you know?
It is inevitable that they will skew their recommendations towards higher commissioned products; Products that have much better alternatives. The same products that you can purchase elsewhere.
Suppose you want to buy Bread + Peanut Butter. You can:
1. Head to your local mart and buy them individually for $2 and $3.
2. Have your agent packed it in a hamper as 1 item, and sell it to you for $10.
This is investment-linked policies for you.
This is bank structured deposits for you.
This is managed funds for you.
They packaged everyday, simple financial products and sell you at a steep premium.
You still want to buy from them?
Up to you lor.
---------------------------------------------------------------------------------
To add on, these people aren't necessary more savvy than you in the first place.
Every now and then you see news of agents themselves getting scammed.
What these agents know are how to sell to you, not how to make good investments.
Those agents (sometimes fresh graduates) often know nothing more about investments than you.
So two points:
1. Their financial interests are in conflict with yours
2. They are not much better than you in investments in the first place
Don't believe? You will soon as we get further in this series.
It is like paying an ignorant person a commission to help you "grow" your money. You lose in 2 ways - You make lesser than you would have, and they get to take a cut of your capital with it.
So why are there still so many people who let people managed their money?
Mostly because they don't want to take responsibility for it. They are scare of losing when they make their own investments. They prefer someone else losing it for them, and thus having someone to blame for it.
---------------------------------------------------------------------------------
In Summary:
1. No one care more about your finances except yourself.
If you ask the salesgirl if the shoes look good on you, what would she say?
If you ask the insurance agent if you are sufficiently covered, what would he say?
If you ask the property agent is it better to invest in stocks or property, what would he say?
If you ask the broker if it is a good time to buy stocks now, what would he say?
If you ask the barber if you need a haircut, what would he say?
...
DON'T ASK STUPID QUESTIONS LAH!
A property agent agent job is to sell house, not to take care of your finances.
An insurance agent job is to sell insurance & earn commission, not to take care of your finances.
---------------------------------------------------------------------------------
In the first post of this series, I'm going to debunk why you should never grow your money with insurance companies, banks, managed funds, etc...
It's actually VERY SIMPLE.
Just ask yourself: Why are they wasting their time to help you manage your money? You think really got people so free? Why do you think there's always random strangers at the MRT stations offering to help you "earn more money"?
It doesn't take a genius to figure out - because they get a cut in the process. Commissions, management fees, you named it. If they don't earn anything, you think people got so much free time to waste on a stranger?
Always remember: Their purpose is to earn from you.
This immediately puts their interest and your interest in conflict.
Supposed there are 2 equal investment products, would they recommend you the one that cost less or more fee? If they take more percentage in fee, that means less returns for you. So are they working in your interest, or their interest?
It's nothing personal - it's just business.
It's just how the world of capitalism works.
Have you ever wonder why no insurance agents/financial consultant would ever recommend you to buy Singapore Saving Bonds (risk free 2%), or to buy term insurance (they get almost no commission), or putting your money in CPF?
Imagine how dumb that is.
It's like the meat-seller telling you "Don't eat meat already. You are overweight."
It's like housing agent telling you "Prices are high now you should wait."
It's like the shop uncle telling you "This item if cheaper if you get it from next door."
See the point?
I'm not saying what they recommend doesn't make sense. I'm saying 99.99% of the time (unless you have a saint for a financial consultant), what they recommend isn't optimal. Agents got to eat, you know?
It is inevitable that they will skew their recommendations towards higher commissioned products; Products that have much better alternatives. The same products that you can purchase elsewhere.
Suppose you want to buy Bread + Peanut Butter. You can:
1. Head to your local mart and buy them individually for $2 and $3.
2. Have your agent packed it in a hamper as 1 item, and sell it to you for $10.
This is investment-linked policies for you.
This is bank structured deposits for you.
This is managed funds for you.
They packaged everyday, simple financial products and sell you at a steep premium.
You still want to buy from them?
Up to you lor.
---------------------------------------------------------------------------------
To add on, these people aren't necessary more savvy than you in the first place.
Every now and then you see news of agents themselves getting scammed.
What these agents know are how to sell to you, not how to make good investments.
Those agents (sometimes fresh graduates) often know nothing more about investments than you.
So two points:
1. Their financial interests are in conflict with yours
2. They are not much better than you in investments in the first place
Don't believe? You will soon as we get further in this series.
It is like paying an ignorant person a commission to help you "grow" your money. You lose in 2 ways - You make lesser than you would have, and they get to take a cut of your capital with it.
So why are there still so many people who let people managed their money?
Mostly because they don't want to take responsibility for it. They are scare of losing when they make their own investments. They prefer someone else losing it for them, and thus having someone to blame for it.
---------------------------------------------------------------------------------
In Summary:
1. No one care more about your finances except yourself.
2. You lose in multiple ways when you get someone to manage your money.
3. Financial ignorance will cost you much more over your lifetime than a few years of salary will.
Sunday, April 2, 2017
Letter To Shareholders (6) - Performance Review 2017Q1
Performance Highlights
The market went on a crazy bull run since the start of the year with STI exploding 300 points. Rising tides lift all boats and our portfolio leapfrogged 9.5% into positive territory after 2 years.
Looking back, we can only regret not pumping more capital into the market during the downturn, even though we are intrigued with the crazy run-up in US.
On a positive note, we paid out dividends of over $1000 (base on pay-date), highest ever for Q1 since inception.
Operating Highlights
As forecasted, income for the quarter were almost 40% lower than the same period last year. This was mainly due to:
- Absence of bonus in January and March.
- No Chinese New Year winnings (compared to Feb last year)
Earnings is expected to catch up in the following 3 quarters.
Expenses were about 16% higher compared to last year, but inline with 2 year average. This was mainly due to:
- Gambling losses during the CNY period (charged in January).
- Wedding events in February.
- Mayday Concert and board game purchase in March.
Acquisitions & Divestments
The market run-up means less opportunities, although we managed to nibble a tiny bit of CapitalMall Trust due to partial fulfillment. Lesson learnt: Do not be afraid to just buy at market value if we strongly believe in the purchase. In this case, we missed a substantial run up due to wanting to save $50.
Super Group was finally privatized and we let go of our holdings at a overall loss of 25%. A lesson for blindly buying at high prices and not having the conviction to average down after the shares plummet 50%. Thankfully, this is the smallest holding in our portfolio and the damage is minimal.
Bank Accounts
The unexpected bad news was yet another downgrade of OCBC360 account. Fortunately, we have maxed out our Maxigain counter (our plan 1 year ago finally bearing fruit) at 1.2% bonus interest. With rising US interest rates, SIBOR rate is also expected to trend up.
Considering these changes, our cash account rankings are as follow:
1. Citibank Maxigain: 0.55+% for the first month, ~1.75+% subsequently. Withdrawal conditions.
2. OCBC 360: 1.55%, 1.85% on certain months.
3. CIMB Fastsaver: 1% unconditional.
We are saddened by the change and have explored other options, but have not find any with a definitive advantage over OCBC360. This is because we are unable to the meet the $500 spending in most months which most other banks require.
For now, our immediate action is to reduce reliance on CIMB Fastsaver and direct more into our stock holdings to meet this year dividends goal. Any long term reserves will go straight into Maxigain, and OCBC360 will store our bullets.
We applied for the SCB Unlimited Cashback card with 1.5% rebate, which we believe present the best value for us at the moment. We will be closing the Bank of China account.
Financial Strength
DBS Vickers is currently having a major promotion with reduced commissions (0.12% with min $10, down from 0.18%) until June.
In other news, Budget 2017 announced tax rebate of 20% up to $500 this year, which would result in slightly lower tax expenses.
Our financial strength is at an all time high with more than 5 years of emergency funds and 10 years of warchest.
Outlook
Our immediate priority is to deploy cash as soon as reasonable opportunities come along before the strong dividend months of May and August arrive. Hopefully we can see some market corrections soon.
Barring unexpected circumstances, we expect higher dividends for the next 3 quarters.
The market went on a crazy bull run since the start of the year with STI exploding 300 points. Rising tides lift all boats and our portfolio leapfrogged 9.5% into positive territory after 2 years.
Looking back, we can only regret not pumping more capital into the market during the downturn, even though we are intrigued with the crazy run-up in US.
On a positive note, we paid out dividends of over $1000 (base on pay-date), highest ever for Q1 since inception.
Operating Highlights
As forecasted, income for the quarter were almost 40% lower than the same period last year. This was mainly due to:
- Absence of bonus in January and March.
- No Chinese New Year winnings (compared to Feb last year)
Earnings is expected to catch up in the following 3 quarters.
- Gambling losses during the CNY period (charged in January).
- Wedding events in February.
- Mayday Concert and board game purchase in March.
The market run-up means less opportunities, although we managed to nibble a tiny bit of CapitalMall Trust due to partial fulfillment. Lesson learnt: Do not be afraid to just buy at market value if we strongly believe in the purchase. In this case, we missed a substantial run up due to wanting to save $50.
Super Group was finally privatized and we let go of our holdings at a overall loss of 25%. A lesson for blindly buying at high prices and not having the conviction to average down after the shares plummet 50%. Thankfully, this is the smallest holding in our portfolio and the damage is minimal.
Bank Accounts
The unexpected bad news was yet another downgrade of OCBC360 account. Fortunately, we have maxed out our Maxigain counter (our plan 1 year ago finally bearing fruit) at 1.2% bonus interest. With rising US interest rates, SIBOR rate is also expected to trend up.
Considering these changes, our cash account rankings are as follow:
1. Citibank Maxigain: 0.55+% for the first month, ~1.75+% subsequently. Withdrawal conditions.
2. OCBC 360: 1.55%, 1.85% on certain months.
3. CIMB Fastsaver: 1% unconditional.
We are saddened by the change and have explored other options, but have not find any with a definitive advantage over OCBC360. This is because we are unable to the meet the $500 spending in most months which most other banks require.
For now, our immediate action is to reduce reliance on CIMB Fastsaver and direct more into our stock holdings to meet this year dividends goal. Any long term reserves will go straight into Maxigain, and OCBC360 will store our bullets.
We applied for the SCB Unlimited Cashback card with 1.5% rebate, which we believe present the best value for us at the moment. We will be closing the Bank of China account.
Financial Strength
DBS Vickers is currently having a major promotion with reduced commissions (0.12% with min $10, down from 0.18%) until June.
In other news, Budget 2017 announced tax rebate of 20% up to $500 this year, which would result in slightly lower tax expenses.
Our financial strength is at an all time high with more than 5 years of emergency funds and 10 years of warchest.
Outlook
Our immediate priority is to deploy cash as soon as reasonable opportunities come along before the strong dividend months of May and August arrive. Hopefully we can see some market corrections soon.
Barring unexpected circumstances, we expect higher dividends for the next 3 quarters.
Sunday, March 5, 2017
Every Singaporean Life?
Come across this fascinating article about the supposed life of every Singaporean, and the author rebuttal against it.
My thoughts?
When you want 5 star hotel wedding, take 30 year loan for million dollar condo, buy big car, go annual vacation to Europe/US, change latest iphone every year, how to save for retirement?
Chinese have this saying: No so big head, don't wear so big hat. If you are a peasant (and earn a peasant income), don't try to live an elite life.
No doubt there are people truly living in poverty in Singapore (don't earn enough to even put 3 meals on table, much less save), but also got lot of cases is people die die want to buy something they can't afford (throw all their savings/take on big debts for car and house) and then claim they nothing left for retirement.
I don't deny the cost of living in Singapore is extremely high, but I think that gives us even more reason to be prudent with our earnings.
"Rich people stay rich by living like they're broke. Poor people stay poor by living like they're rich."
I can only shrug my shoulders when I see people who are lazy to even write a form to credit their salary to a higher interest account (a one time effort and gets you free money).
-----------------------------------------------------------------------------------------------------------------------
Instead of the article, I would like to propose an alternative.
The below assumes you have the privilege to pursue financial independence. Generally, this means:
- You and your dependents (family), are generally healthy and does not have long term and huge medical bills.
- Your family does not depend on you for survival, and you do not have to spend a huge portion of your income on them.
- You income is not too low (Subjective, but I would say below 2.5K)
In my opinion, most graduates from middle income family would have no problem meeting these criteria.
1. Study hard, get a good degree, earn a median income and try to have as high of a saving rate as possible, especially in your 20s (the first 5 year is crucial).
2. If applicable, clear all your debts ASAP, do not rack up credit card or any other debt, and do not waste money on useless shit. Do not take debt to go on vacation, buy liabilities and other non-income producing crap.
3. Save up emergency fund of 6 months, and put them in a high interest account. Then start saving for your warchest. Try to hit 1 year annual saving before 30s. This immediately gives you passive income of $1.2K per year (or ~$100 per month).
4. Start investing properly and correctly. Even if you are extremely conservative, you should get around 5% return over the long term.
5. Earn money -> invest -> collect dividends -> re-invest your dividends. Keep repeating this for the next 10 years.
6. If you decide to get married, have a simple wedding, simple honeymoon, buy an affordable house. Do not buy a car. If you have a child, be prepare to delay your retirement if you want to send your kid to expensive enrichment and tuition. If you really want to leave a legacy for your child, try starting a portfolio for him/her instead. He/she will have additional 20 years of compounding.
7. If you follow this diligently, by the time you're in your 40s, your investment (passive income) can easily cover more than half of your expenses (saving rate ~50%). If your saving rate is truly insane (>70%), you might even reach financial independence here. If you haven't, continue doing step 5 for the next 10 years and you would achieve the same. It's all up to your saving rate at this point.
8. As a guideline, aim to have minimum 1 year annual income of savings by 30s. 5 by 40s, 10 by 50s.
If you are willing to even put in a little effort to learn right investing, optimize your savings, and don't over indulge in luxuries, I am very sure most can achieve FIRE within 20 years. Many local bloggers have achieved it much much earlier on median income, in their 30s even. So 20 years is a really conservative estimate already.
Problem is, are people willing to put in the effort?
My thoughts?
When you want 5 star hotel wedding, take 30 year loan for million dollar condo, buy big car, go annual vacation to Europe/US, change latest iphone every year, how to save for retirement?
Chinese have this saying: No so big head, don't wear so big hat. If you are a peasant (and earn a peasant income), don't try to live an elite life.
No doubt there are people truly living in poverty in Singapore (don't earn enough to even put 3 meals on table, much less save), but also got lot of cases is people die die want to buy something they can't afford (throw all their savings/take on big debts for car and house) and then claim they nothing left for retirement.
I don't deny the cost of living in Singapore is extremely high, but I think that gives us even more reason to be prudent with our earnings.
"Rich people stay rich by living like they're broke. Poor people stay poor by living like they're rich."
I can only shrug my shoulders when I see people who are lazy to even write a form to credit their salary to a higher interest account (a one time effort and gets you free money).
-----------------------------------------------------------------------------------------------------------------------
Instead of the article, I would like to propose an alternative.
The below assumes you have the privilege to pursue financial independence. Generally, this means:
- You and your dependents (family), are generally healthy and does not have long term and huge medical bills.
- Your family does not depend on you for survival, and you do not have to spend a huge portion of your income on them.
- You income is not too low (Subjective, but I would say below 2.5K)
In my opinion, most graduates from middle income family would have no problem meeting these criteria.
1. Study hard, get a good degree, earn a median income and try to have as high of a saving rate as possible, especially in your 20s (the first 5 year is crucial).
2. If applicable, clear all your debts ASAP, do not rack up credit card or any other debt, and do not waste money on useless shit. Do not take debt to go on vacation, buy liabilities and other non-income producing crap.
3. Save up emergency fund of 6 months, and put them in a high interest account. Then start saving for your warchest. Try to hit 1 year annual saving before 30s. This immediately gives you passive income of $1.2K per year (or ~$100 per month).
4. Start investing properly and correctly. Even if you are extremely conservative, you should get around 5% return over the long term.
5. Earn money -> invest -> collect dividends -> re-invest your dividends. Keep repeating this for the next 10 years.
6. If you decide to get married, have a simple wedding, simple honeymoon, buy an affordable house. Do not buy a car. If you have a child, be prepare to delay your retirement if you want to send your kid to expensive enrichment and tuition. If you really want to leave a legacy for your child, try starting a portfolio for him/her instead. He/she will have additional 20 years of compounding.
7. If you follow this diligently, by the time you're in your 40s, your investment (passive income) can easily cover more than half of your expenses (saving rate ~50%). If your saving rate is truly insane (>70%), you might even reach financial independence here. If you haven't, continue doing step 5 for the next 10 years and you would achieve the same. It's all up to your saving rate at this point.
8. As a guideline, aim to have minimum 1 year annual income of savings by 30s. 5 by 40s, 10 by 50s.
If you are willing to even put in a little effort to learn right investing, optimize your savings, and don't over indulge in luxuries, I am very sure most can achieve FIRE within 20 years. Many local bloggers have achieved it much much earlier on median income, in their 30s even. So 20 years is a really conservative estimate already.
Problem is, are people willing to put in the effort?
Wednesday, March 1, 2017
Quarterly Results Review - 2016Q4
| Frasers Centrepoint Trust | DPU is maintained despite the fall in revenue due to corresponding fall in expenses. Northpoint revenue down 25% dude to ongoing AEI. Slight increase in debt due to acquisition of Yishun 10 retail podium. Occupancy is stable at its 2 jewels, but show signs of decreasing at the smaller malls - especially Bedok Point. It 's amazing they are still getting positive rental revision (+6.9%) in the current retail climate, proving just how resilient their malls are. NAV is $1.93 and I expect full year DPU of 11.7c. At current price, yield is 5.9%. |
| Super Group | Awaiting takeover at $1.3. Expected to cash out in April. |
| Sembcorp Industries | Full year dividend has fallen to 8c, a far cry from the >16c when I first got vested. Utilities is stable and net profit would be up 4% excluding one-time items. Marine is finally back in (slight) black after taking huge write-downs last year. This is really one of the better quarterly results in a long time. Full year EPS is 19.9 (I expected 19c worst case) and DPS is 8c (I expected 10c). Their payout ratio dropped from ~50% to 40%, signifying they are preserving cash. Management guided a challenging 2017, but I believe the worst is over for Sembcorp. |
| M1 | Profits for the year fell 16.1% mainly due to lower international call, roaming (even I cancelled this) and increased depreciation of 4G network assets. Only saving grace is their fibre, postpaid and prepaid customers are still growing. This comes at a cost of ARPU as they really "offer gao gao". Even I switched to M1 Fibre. Full Year DPU is 12.9 cents (down from 15.3), and EPS is 16.1 (down from 19.0). Yield at price of $2 is 6.45%. Management guided challenging environment, and growth in other "business areas" (IOT, data analytics) as they always do. I might consider averaging down if it comes down to 7% yield. |
| Capital Commercial Trust | Surprising Q4 results with a 10% increase in DPU due to full acquisition of CapitaGreen, resulting in full year DPU of 9.08c. Management expects slight negative rental revision in the future, but this is already well known. 80% fixed interest debts with AEI of Golden Shoe as its main growth catalyst going forward. At $1.57, this is yielding 5.8%. Holding for the long term. |
| Accordia Golf Trust | DPU fell from 2.16 to 2.09 (3.2% lower) due to slightly lower revenue ("warmer winters") and higher expenses. While they claim it's due to weather, profits does seem to be gradually trending down. I have to observe this for a few more months but thankfully, the yield is consider high. Price to book is 0.68 (book value: 0.93). I'm expecting yearly dividend of 4.8c which yields around 6.8% at current price of $0.7. This is a fall from the 7.4% expectation previously. |
| ST Engineering | Much better than expected results with a surprisingly strong Q4. I am looking to get back if the chance arises. |
| Singtel | Showed resilliant results (net profit up 2%) when its peers are down in doldrums (both M1 and Starhub down 30 %). Nothing much to say except I'm confident. Looking forward to Netlink IPO later this year. |
| Frasers Centrepoint Ltd | Really surprising results with net profits up 90% due to profit recognition from Suzhou, China and Singapore. FCL currently has about 46%, 33%, 9% and 7% assets in Singapore, Australia, China and Europe respective - and they are looking to increase investments in overseas assets for long term growth. It's a good diversification from SG for me. 70% of the assets and 50% of net profits are from recurring sources (i.e REITs), which provides a good "baseline" of dividends. Despite the relatively high level of debt, I am quite confident in its management. Dividends has been maintained at 8.6c for the past 3 years (5.8% yield at $1.495, very high for a property developer). |
| Straits Times Index | Distributions actually went up to 53c! This was a huge surprise given the drop to 42c previously. |
Tuesday, February 14, 2017
End The Comparison Game
I just want to jot down this awesome article from 4th Pillar, a financial blog I've been following because it resonates so much with me.
If you're chasing after Financial Freedom to impress others, you've got it all wrong.
Contrary to popular belief, FF is never about comparing. Maybe when we were younger, we tend to believe that.
We buy the latest iPhones and gadgets not so much because we use the features, but because of the "emotional reward" of "impressing others". The same for buying a bigger car, a bigger house, a luxurious vacation to post online, etc...
As you grow older, you'll realized the cruel/fortunate fact - No one cares.
No one is keep tab on what phone you're using, what car you're driving, how much you're making, etc... No one has the effort to do that. No one except yourself.
"Making purchases for the sake of impressing others is a never-ending process. There will always be someone who has a bigger, better, shinier new consumer item than you and the only way to compete with them is to buy, buy, buy.
There is no one to impress. There is no one to compete with."
This might be the secret towards not just financial freedom, but true freedom.
If you're chasing after Financial Freedom to impress others, you've got it all wrong.
Contrary to popular belief, FF is never about comparing. Maybe when we were younger, we tend to believe that.
We buy the latest iPhones and gadgets not so much because we use the features, but because of the "emotional reward" of "impressing others". The same for buying a bigger car, a bigger house, a luxurious vacation to post online, etc...
As you grow older, you'll realized the cruel/fortunate fact - No one cares.
No one is keep tab on what phone you're using, what car you're driving, how much you're making, etc... No one has the effort to do that. No one except yourself.
"Making purchases for the sake of impressing others is a never-ending process. There will always be someone who has a bigger, better, shinier new consumer item than you and the only way to compete with them is to buy, buy, buy.
There is no one to impress. There is no one to compete with."
This might be the secret towards not just financial freedom, but true freedom.
Thursday, February 9, 2017
Financial Literacy - Chinese New Year Conversations
Over the CNY, I've had conversations with some relatives about the importance of saving for the future and on the topic of insurance.
On investments, the old generations (especially those who were burnt before) are still full of distrust and fear. They told me to "never invest in stocks and bonds because it's dangerous". Even when I tell them about Singapore Saving Bonds (SSB), which are guaranteed by the Government, they tell me "Bonds are just dangerous. It might collapsed."
I really don't know want to laugh or cry. They even believe their insurance policies are safer than SSB.
I don't know how to explain to them that if the SSB does default, your insurance companies would have long gone bankrupt and your entire bank savings and Singapore Currency (SGD) will be worthless.
They still equate "investing" to "gambling" - trying to time the market, buy penny stocks, etc... They had a look of disbelief when I tell them I almost never sell my stocks - even after they have gone up a lot.
What? Buy and hold forever? What kind of sorcery is this?
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Fueled by the lack of internet/financial education in their days, and of course gospels spread by insurance companies and agents, this led to the older generation becoming overly dependent on insurance.
This belief is so deeply entrenched (根深蒂固) that they believe insurance is the safest and best form of saving. They can pour their entire life savings (and retirement hope) into life plans, endowment plans, etc...
They are extremely skeptical of other form of investments. In fact, just the word "investment" turn them away. I think it's no longer possible to convinced these people otherwise.
I'm not saying insurance is not important, but it just isn't an optimal way of saving.
You use a hammer to hit a nail, and you use an axe to chop a tree. There's an appropriate tool for a job. And Insurance is a protection tool, not a wealth accumulation tool.
You need to diversify your wealth - For protection, for emergency, for capital expenditures, for wealth growth, across a wide variety of assets. I doubt their 20 year-old fresh graduates sons and daughters doing insurance know all these (90% of these "financial consultants" are equally clueless, the remaining 10% just want to sell insurance for their own commissions).
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In the end, I know I'm just grumbling to myself here. It's hard to convinced them.
Argue further and you will be seen as rude, or they will give you the "I eat salt more than you eat rice, what do you know" look.
Anyway...
This is really "inspiring me" to write a beginner series to consolidate the main points on financial literacy.
On investments, the old generations (especially those who were burnt before) are still full of distrust and fear. They told me to "never invest in stocks and bonds because it's dangerous". Even when I tell them about Singapore Saving Bonds (SSB), which are guaranteed by the Government, they tell me "Bonds are just dangerous. It might collapsed."
I really don't know want to laugh or cry. They even believe their insurance policies are safer than SSB.
I don't know how to explain to them that if the SSB does default, your insurance companies would have long gone bankrupt and your entire bank savings and Singapore Currency (SGD) will be worthless.
They still equate "investing" to "gambling" - trying to time the market, buy penny stocks, etc... They had a look of disbelief when I tell them I almost never sell my stocks - even after they have gone up a lot.
What? Buy and hold forever? What kind of sorcery is this?
-------------------------------------------------------------------------------------------------------------------------
Fueled by the lack of internet/financial education in their days, and of course gospels spread by insurance companies and agents, this led to the older generation becoming overly dependent on insurance.
This belief is so deeply entrenched (根深蒂固) that they believe insurance is the safest and best form of saving. They can pour their entire life savings (and retirement hope) into life plans, endowment plans, etc...
They are extremely skeptical of other form of investments. In fact, just the word "investment" turn them away. I think it's no longer possible to convinced these people otherwise.
I'm not saying insurance is not important, but it just isn't an optimal way of saving.
You use a hammer to hit a nail, and you use an axe to chop a tree. There's an appropriate tool for a job. And Insurance is a protection tool, not a wealth accumulation tool.
You need to diversify your wealth - For protection, for emergency, for capital expenditures, for wealth growth, across a wide variety of assets. I doubt their 20 year-old fresh graduates sons and daughters doing insurance know all these (90% of these "financial consultants" are equally clueless, the remaining 10% just want to sell insurance for their own commissions).
-------------------------------------------------------------------------------------------------------------------------
In the end, I know I'm just grumbling to myself here. It's hard to convinced them.
Argue further and you will be seen as rude, or they will give you the "I eat salt more than you eat rice, what do you know" look.
Anyway...
This is really "inspiring me" to write a beginner series to consolidate the main points on financial literacy.
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