$$$ KPO and CZM $$$

Sunday, January 21, 2018

Salary - You Are Your Best Investment

It is official now! KPO has been promoted and is no longer the smallest fry in the team. lol. The best part of the promotion is not the change in title but the salary increment that comes with it. I was given an increment of more than 20%! Always thought that I would never see such increment unless I change a company.

With this, we have unlocked a few achievements in life:
1. Beating the CPF Ordinary Wage Ceiling ($6,000) - Going forward, we get to keep more cash!
2. CZM and I can no longer BTO for HDB - Income Ceiling ($12,000) - Fortunately, we have successfully applied for one a few years back :)
3. My salary has increased by > 50% as compared to my first drawn salary
4. CZM's salary has increased by > 100% as compared to her first drawn salary

I have a spreadsheet to project our salary increment and track the actual increment which I will be sharing with the readers :) Based on our starting salary and an assumption yearly increment of 5% (I thought this is conservative but CZM thinks otherwise), it would have taken me 9 years and CZM 17 years to reach our current salary.

Ministry of Manpower (MOM) published a summary table on Singapore Median Gross Monthly Income From Work (Including Employer CPF Contributions) of Full-Time Employed Residents. For the year of 2016, it is at $4,056 including the employer CPF. I will be using the 2016 median income as an example in the spreadsheet, excluding the employer CPF portion ($3,467) because who does that! Imagine people negotiating with HR for a higher salary with X% increment based on their current salary including the previous employer CPF contribution. lol.

The cells highlighted in yellow are for you to input manually, everything else is formula linked. The spreadsheet projects your yearly salary based on an assumption of 5% increment. The "Salary Projection" projects based on your first drawn annual salary while the "Revised Projection" projects based on the latest "Actual Salary" specified by you. As you can see, it would have taken this imaginary person 6 years (31-25) to reach his current salary (27-25).

What is the purpose of doing this?

In my opinion, there will never be enough money and there will always be others that are poorer/richer than you. On the other hand, time is limited, we all have the same number of seconds, minutes and hours in a day. When you work, you are actually selling away your precious time to the company/employer. Why not sell it to the highest bidder? One has to take ownership of your own career/time because you are your best investment in life. I have friends/colleagues that complain about their increment (1/2% - losing out to inflation) and bonus and yet year on year they continue to stay in the same company. If your company is not compensating you "fairly" (performance review can be pretty subjective/dark), maybe it is time to look externally? Having said that, I do see people that are less motivated or should I say different priorities in life. Regardless, my advice is to work hard, bump your salary and invest for financial freedom so that you can stop selling your time one day...

You can get the google spreadsheet here - $$$ Salary Projection $$$

On a side note, CZM has taken full control of the Instagram account where she will be posting lots of food and their prices! I doubt she will be blogging anything in the near future. lol.

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Sunday, January 14, 2018


We made our 1st purchase for the year! We purchased 6,000 units of ThaiBev (Thai Beverage) last week (9th January 2018) at $0.92. At the point of writing this article, the price is currently at $0.935. Yay!

The latest news on the acquisition of Vietnam’s top brewer Sabeco sent its share price falling from a high of $0.975 on 15th December 2017 to as low as $0.90 on 26th December 2017 which is totally understandable. It is an expensive price to pay for an effective stake of only 26.3%. Vietnam Beverage Co Ltd won the bid for 53.58% of Sabeco which will be funded 100% by ThaiBev although they only own 49% of Vietnam Beverage indirectly through Beer Co. (53.58% x 49% ~ 26.3%). The method of financing has yet to be confirmed but it will definitely increase its liability significantly.

Honestly, I think this is a bad deal too but this is probably the only/best way for ThaiBev to proceed with the acquisition. Sabeco is sort of "backed" by the government (The government had set a minimum sale price of 320,000 dong or $14.1 per share for Sabeco, formally known as Saigon Beer Alcohol Beverage Corp - Thai beer magnate extends SE Asia push with $4.8 billion Sabeco deal) and there is no way it will be owned externally with foreign ownership capped at 49%, hence the weird structuring.

If we were to look at the bigger picture, the acquisition is in line with its "Vision 2020" strategic roadmap to create greater value and deliver more sustainable returns to shareholders. This is extracted from ThaiBev's 2017 Annual ReportTo support and sustain ThaiBev’s growth, we plan to diversify our revenue streams, increasing revenue contribution from non-alcoholic beverages and the sale of products outside of Thailand.

Based on the 2017 Annual Report, ThaiBev is trading at a PE of 16.36 at $0.935 - EPS of 1.37 Thai Baht ~ 0.05716 SGD which is pretty reasonable. Its NAV is 5.13 Thai Baht ~ 0.214041803 SGD and this translate to a PB of 4.37 (not so relevant/important). I will not go too much into the numbers as the 2016 numbers are reported based on a 9 months period hence it is difficult to compare its year-on-year performance accurately. However, a rough estimate on the 2016 numbers (numbers / 3 x 4) seems to indicate that ThaiBev did better in 2017!

Screenshot from 4-traders
Out of the 708 companies listed in SGX, ThaiBev is ranked lucky 8th in terms of market capitalization (around $23 billion). It is so large that it owns 28.4% of Frasers Centrepoint Ltd, 28.5% of F&N and 79.7% of Oishi Group currently (Sabeco soon).

Screenshot from ThaiBev website
Most importantly, ThaiBev has a dividend policy of distributing more than 50% of net profits after deduction of all specified reserve, subject to investments plan and as the Board of Directors deems appropriate and they have been meeting it very comfortably (dividend payout ratio between 50% to 80%) for the last 10 years with increasing dividends! People still need to drink during a financial crisis, maybe drink even more. lol.

We see the recent weakness in share price as an opportunity to accumulate some. Will the share price drop below $0.90? Maybe/maybe not. Will the share price be more than $0.92 by 2020? Most certainly! $2.020? Hahahahaha (laughing at my own foolishness).

Would you be interested in reading about our last purchase for the year of 2017? APAC Realty

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Friday, January 12, 2018

StashAway Referral Link for Our Readers

A couple of readers have actually contacted me and ask for our StashAway referral link because we have motivated them to start investing. Unfortunately, I have been rejecting/turning down their nice offers because sharing our referral link would reveal our real identities and we prefer to keep them hidden as compared to saving a few dollars in fees.

I contacted StashAway and they were kind enough to entertain me. So I am proud to announce that we have a referral link for our readers! You no longer have to go around asking friends/colleagues for one (my suggestion when I turned them down).

Signing up through our referral link (you will need to click on the green button "Get up to $10K Managed for Free" to signup) will provide you the exact same offer as any other referral - SGD $10,000 free management for 6 months.

What do we get in return? Nothing :) This is a referral page specially created for our readers and is not linked to our actual StashAway account so we will not be enjoying the benefit of the referral programme. Honestly, that is unfortunate but the purpose of the blog is not for us to get referrals and minimize the fees. It is to motivate others to start investing, have goals in life and work towards them and most importantly, lead a happy life with their other half. We are glad to see some of that happening.

Here you go: KPO and CZM Referral Link

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