Portfolio Update - Jan 2017

Happy Chinese New Year!!

Hope everyone got big ang bao!

January has always been a good month because lots of company will be declaring dividends! Total dividends is $761.25 (based on XD Date) contributed by First REIT, CMT, Soilbuild REIT and Ascott REIT. You can refer to the exact breakdown here.

I have also added 2 new stocks - Ascott REIT and Raffles Medical which brings our investment to $184k! Another $15k and we will be able to become SCB priority customer with no minimum commission! I had to sell off some CNAV stocks that are illiquid/with extremely low volume before SCB implemented thier new commission structure last year.

The reason why I buy those stocks? I prefer REIT that are undervalued (PB < 1, price < NAV, etc.) because I can collect dividend while waiting for them to hit NAV. An example is Saizen REIT which gave me about 50% return when they got bought over last year! As for Raffles Medical, I just wanted to diversify slightly and was looking at healthcare stocks.

On a side note, CZM is very lazy. She seems to have lost interest already. I guess there will be a lot more posts on money than food. Lol.

When can I be a Millionaire?

Have you ever wonder how long it will take for you to become a millionaire??? I do.

I feel that it is important to have a goal/target in mind even when it comes to managing your finances and investment journey. Hence, I came out with this google spreadsheet that forecast when you will become a millionaire!

There are a few assumptions being made:
1. Salary increment
2. Percentage of your salary invested
3. Investment return (Capital Gain % + Dividend %)
4. Dividend return (*** Dividend are not reinvested)
5. Inflation rate

Question 1:
Person A (a fresh graduate) has a salary of $3,300 (median salary according to ST) decides to invest 30% of his salary. He is hoping that his salary will increase at 5% yearly and his investment will provide him 7% return (2% capital gain + 5% dividend). How long will it take for A to become a millionaire?

Answer: 24 YEARS!!

Question 2:
Assuming A now decides to invest 50% instead of 30%, how long will A take?

Answer: 19 YEARS!

Question 3:
Similar assumption as Q1, A and B (couple) decides to work towards their millionaire goal together, how long will they take?

Answer: 17 YEARS!

I will stop here, you guys get the idea. Moral of the story, faster find a girlfriend/partner to work towards that goal! lol.

These are the rough estimate of the number of years needed:
- 5% salary increment
- 7% investment return

No matter how far fetched it may seem, it is definitely possible. Some will reach there faster than others but we will eventually become one! There are many unknowns down the road but having a rough idea of how long the journey will take is definitely better than having none.

The spreadsheet will be updated whenever you enter your latest annual salary/invested amount for that year and re-forecast based on those assumptions. Hence, it is pretty dynamic. Do give it a try and play around with those numbers!

Google Spreadsheet: Investment Forecast

2016 Expenses Review

I spent some time to compile my expenses for 2016 (CZM does not track hers). To my horror, I spent $38,757.44?!?!

Vacation	$8,832.68
Wedding	$7,800.00
Parents	$7,653.00
Me	$3,517.79
Food	$2,729.01
Gift	$2,539.04
Transportation	$1,307.47
Insurance	$1,208.46
Clothes	$942.08
Treat	$716.90
Credit Card	$715.12
Health	$286.51
Entertainment	$195.94
Other	$177.50
Gambling	$135.94
Grand Total	$38,757.44

The trip to London-Iceland-Paris really burn a big hole in my/our pocket. Let me remove those 1 time expense (e.g. Wedding Ring) and expenses incurred from KPO Expense Fund such as Vacation, some winter clothes, etc.

Parents	$7,653.00
Me	$3,517.79
Food	$2,729.01
Gift	$2,539.04
Transportation	$1,307.47
Insurance	$1,208.46
Treat	$716.90
Credit Card	$715.12
Clothes	$286.76
Health	$286.51
Entertainment	$195.94
Other	$177.50
Gambling	$135.94
Grand Total	$21,469.44

Even $21,469.44 is ridiculously high! I went on to look at the breakdown of each category except from "Parents" and "Me". I am giving my parents a monthly allowance and paying for some of their insurance. I bought DJI Phantom Advanced 3 for myself hoping that I would be able to capture the special moment in Iceland + some other miscellaneous costs such as installment plan for my laptop, haircut, etc.

Food	$2,729.01
Beverages	$329.57
Breakfast	$37.40
Dessert	$58.88
Dinner	$782.58
Drinks	$6.00
Lunch	$1,486.40
Others	$6.90
(blank)	$21.28

Food looks high but if you were to take $2,729.01 divided by 365 days. It is only an average of $7.50.

Gift	$2,539.04
Ang Bao	$100.00
Colleague	$50.00
Darling	$978.17
Donation	$2.00
Family	$928.06
Friend	$4.00
Wedding	$378.00
(blank)	$98.81

The major expenses are coming from CZM and family.

Transportation	$1,307.47
Cab	$450.74
Darling Cab	$79.06
EZ Link	$775.55
Ferry	$2.12

Looks like I have been cabbing quite a bit.

Insurance	$1,208.46
Early Cancer Care - 150k	$195.00
Hospitalisation	$642.56
MediShield Life	$78.90
Term - 1 Million	$292.00

Insurance probably going to increase since I got Term and Early Cancer Care around October.

Based on the above analysis, I came up with a target for 2017 and I shall review this 1 year later.