$$$ KPO and CZM $$$: October 2018

Tuesday, October 23, 2018

Expenses - September 2018

Our expenses are probably going to get higher and higher over the next few months due to our wedding (made lots of final payment on October) + our honeymoon trip to the United States. You can read about our wedding expenses here - Our Wedding Expenses is Within Our Budget! In addition, we are already thinking of buying these things in the US (KPO - GoPro HERO 7 Black and CZM - Dyson Airwrap) besides whatever "cheap" branded things we can find in the outlet malls >.<"

Current Profile: 28 years old male planning to get married this year and is still living with his parents


You can read more about how we manage our finances here. Removing our shared expenses which come out of our mutual fund (KPO Expense Fund), my expenses for September would be $4,430.51 - ($2,837.53 / 2) = $3,011.75.

Wedding
Banquet - We started making monthly installment payments to the hotel in order to avoid the lump sum pain.

GDL - I blogged about this previously. We were wondering how much Pin Jin/Dowry CZM's parents will take, turns out it was really within CZM's expectation. lol. Besides the red packets, other expenses came from 2 bottles of red wine, oranges, etc.

Grooming - I bought a box of contact lens ($56) while CZM bought a pair of earrings ($30).

Others - We bought lots of random stuff that all adds up eventually.

Photography - These were the shipping costs incurred from using Photobook. It was supposed to be cheap until we realized that you cannot ship them in 1 order. Having said that, it is still slightly cheaper than the others.

Vacation
Book some accommodations for our US trip and the transport cost was incurred from a cab ride back home from the airport after our New Zealand trip.

Parents
I previously blogged about my promotion and increment - Salary - You Are Your Best Investment and it was only effective from February so I gave my parents more allowance as well.

Gift
This is the price I have to pay for putting our wedding day on CZM's birthday. I customized and ordered a 3 tier birthday cake on our wedding day <3

Insurance
This is a fixed monthly cost for the basic coverage - term life and hospitalization.

Food
My food expenses are exceptionally low because I stay with my parents! Most of it is incurred when I am out with CZM.

Treat
Treated family and colleagues to food/drinks.

Transportation
I would always pay for CZM's cab ride home during night time since I am too lazy to send her home. That was one of our agreement. lol. EZ Link expenses were much higher this month which was probably due to the wedding preparation, hence we have been commuting a lot more apart from work.

Public transportation seems a lot lower because of 2 reasons:
1. I am no longer using EZ Link Auto-Reload. Account-Based Ticketing (ABT) is a much better choice as you pay what you use instead of triggering top up where the money is stored in the EZ Link card. The best part is miles can be earned too (using UOB PRVI Mastercard)!
2. $0.50 Discount for commuters who enter stations before 7.45am on weekdays.

Me
The $69.97 is the installment for Surface Pro which I got about 2 years back.

Gambling
Bought ToTo, the fastest way to fulfill our millionaire dream

Others 
It was a 50 cents donation when I met a friend doing flag day fundraising for animals - CAS Animals' Day Out 2018. To be honest, I had no idea which organization it was until I did some research while writing this article. Now that I know, shall share about it here - CAS (Causes For Animalsis an animal welfare charity set up to support the needs of local animal welfare in Singapore.

Summary
January 2018 - $2,256.43
February 2018 - $1,759.01
March 2018 - $5,049.79
April 2018 - $1,572.54
May 2018 - $1,863.74
June 2018 - $2,282.07
July 2018 - $2,197.94
August 2018 - $2,130.01
September 2018 - $3,011.75

Total expenses for 2018: $22,123.28
Average expenses per month for 2018: $2,458.14

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Saturday, October 20, 2018

Juggar - P2P Lending and Share Financing Platform

Disclaimer: This is our first sponsored article :)

Edmond Tan, one of the Co-Founder at Juggar reached out to us when Juggar did a soft launch a few weeks ago. After a few emails to and fro, I thought that this was pretty interesting and agreed to write an article on it.

What is Juggar?


Juggar is a P2P lending platform for share financing platform. If you are familiar with the other P2P lending platforms available in Singapore, names such as MoolahSense and Funding Societies would come to mind where you will be the "debtor", lending your money to various companies. However, with Juggar, you can actually become the "borrower" and use the money to invest in SGX shares using margin/leverage. In another word, Juggar is a combination of P2P lending + CFD trading.

As a borrower, there is the possibility of paying interest as low as 2% with 30% collateral. I thought this is pretty attractive because as a SCB Priority customer, we were given a fixed rate of 1.6% + 1-month SIBOR (in total, the interest rate we got would be ~3.1%) after pledging 70% collaterals - Leverage - A Double-Edged Sword. In addition, Juggar will provide the loan at a rate of 2.5% (claimed to be the lowest in the market by Juggar) while waiting for the loan to be funded by a lender.

Being a Lender


Being a lender is pretty straightforward, you go to the "Marketplace" and select a loan which you will like to lend to based on the various information such as loan amount, interest rate and maturity date. Do take note that the interest rate stated is on an annual basis and not on the loan tenure.

Being a Borrower


There are currently 40 stocks available for the borrower to buy.


As an example, if I would like to buy 1,000 units of DBS at $24.82. Under normal circumstances, I would need ~$25k cash to do that.


However, with Juggar, I would only need ~$7.5k including the trading commission. Do take note that the loan and fees are only paid at the end when the position is closed. Assuming if the price of DBS increase to $26.00 within the trade tenure, my profit would have been 13.33% [(26 - 24.82) * 1000 - 83.66 * 2] / (7529.66 + 123.38 + 8.57) as compared to 4.07% [(26 - 24.82) * 1000 - 83.66 * 2] / (24,903.66) without using any margin. The losses would also be magnified accordingly. That is why it is a double-edged sword. If you are not familiar with margin trading, I suggest that you read up more first.

Below are some of the questions I asked and Edmond's response:

KPO: When would you be expecting the MAS license to be granted? Technically, Juggar can't go live without one right?

Edmond: Our legal structure do not require us to apply for the MAS CMS license although we have to work with some limitations with our current legal structure. This structure is created in conjunction with our legal consultants and have been acknowledge by NUS Enterprise, SMU IIE and Spring Singapore.

KPO: Let's say if Juggar goes bankrupt/face liquidation, how would it work for both the lenders and borrowers?

Edmond: We maintain a separate account for cash and shares that is not commingled with Juggar's operations. Under the legal documents, it is also stated that we have to maintain a record for each lender and borrowers and their funds/shares is not an asset of Juggar and cannot be pledged for any other purposes.

KPO: At the start, I was told to select to be a borrower or lender. Does this mean after I selected the borrower, I will not be able to lend? In addition, I cannot find the option to change it.

Edmond: Yes, as part of our legal structure, user can only be either a borrower or lender. The change of role form a borrower to lender has to be done by us manually as we need to ensure there is no open positions.

KPO: Let's say if a borrower is unable to top up the difference and you guys had to force sell the shares before the loan period ends. Would the lender still be getting back the full amount? Will it be returned after the position is closed/force sell or would it be reloan to other borrowers until the initial loan period ends?

Edmond: If we force sell the shares, the principal, interest and early prepayment interest will be paid back to the lender. We trigger the force sell at 130% margin ratio (Market value of the shares is 30% more than the Principal of the loan). we do not lend the money out again to other borrowers.KPO: If that is the case, it seems to be pretty safe for a lender to lend out their money. Under what scenario (if any) would a lender lose his capital?

Edmond: Lender will start losing their capital if in a very short time span (1 day) the share price drop by more than 30% and we did not have enough time to sell off the shares. 1 instance will be that something happen to the company after market close and the next day the market open,the price is down by more than 30%. We ran numbers on STI component stocks, this hadn't happen in the last 20 years.

KPO: What happens if I selected a 90 day period and decided to sell it on the 70th day? Do I pay interest for the 90 days or it will be automatically computed accordingly?

Edmond: You will pay 10% of the interest for the unused period. So for instance the interest for the remaining 20 days is $100, you will pay the lender a penalty of $10 that’s all.
KPO: For a borrower, once the loan tenure ends, I supposed the position will be auto-closed? How would the price be determined then? Or is there a way to extend the loan?

Edmond: Juggar will at its discretion sell the shares at the market price between 4.30pm - 5pm at the day the loan matures.

Referral
If you were to use our referral, you will be given a credit of $100 which will only be credited into the account after your first trade. To do that, simply email charlotte@juggar.co with the referral code "KPOCZM" and do keep us (kpooooooooooo@gmail.com) in the cc as well :) For every successful signup and upon your first trade, we will be paid $50.

Term and Conditions for $100 Juggar Credit:
1. The user has to have a minimum trade size of $1,000 excluding any brokerage fees across 1 or more trades
2. The user has to have a total holding period of 21 business days across 1 or more trades. The holding period for different trades with a trade size of at least $1,000 can be added together to make up the 21 business days.
3. The $100 will be credited into your account after the completion of the first trade and user can withdraw the $100 credit 3 months after this money has been credited to the account
Juggar: https://www.juggar.co/
LinkedIn: Edmond Tan

Do like any of the following for the latest update/post!
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Thursday, October 18, 2018

StashAway - September 2018

I blogged about StashAway Withholding Tax Reimbursement for FY 2017, compiled the total dividends and fees and concluded that the portfolio is pretty sustainable (dividends > fees) without injecting more funds.

In hindsight, CZM's decision to stick with the current P28 portfolio seems to be the better move as compared to a 100% equity (highest risk) portfolio as the stocks market went into another round of correction in the last 2 weeks.

1. ACCOUNT SUMMARY (as of the last day of the month)


Based on the statement (30 September 2018), we gain $310.18.


As of 18 October 2018, the total return has been reduced to just $39.27. In fact, it was negative a few days ago. We lost -$264.43 from investment returns with a huge currency impact of  $303.70. Not good! In our last monthly update, I said that I would have preferred the USD to be weaker because we will be going to the US for our honeymoon. Weaker USD meant that we can convert the same SGD for more USD to invest too.

SGD time-weighted returns: 0.7%
USD time-weighted returns: -4.7%

2. PORTFOLIO DETAILS 


3. TRANSACTIONS


SGD $990.00 converted to USD $723.01 (USD $722.64 last month)
Exchange Rate:  1.3693 (1.3700 last month)

4. FEE CALCULATIONS


The fee stated is based on the monthly-average assets SGD $11,674.30 x 0.8% / 365 days * 30 days = $7.68

StashAway VS STI ETF
Since there is no way to compare the performances among the robo-advisors, I came out with a spreadsheet to track our StashAway portfolio performance (General Investing - Risk Level 28) against that of STI ETF which I will be updating on a monthly basis. For simplicity, I shall assume that one can either invest in Nikko STI ETF using POSB Invest-Saver or invest in Nikko STI ETF/SPDR STI ETF using SCB Priority Online Trading (no minimum commission). These would be the opportunity costs while we continue to invest in StashAway.

Apart from the absolute P&L, we should also look at the Reward-to-Risk Ratio where risk/volatility is taken into account. For more information, do read StashAway Clarifications - Reward-to-Risk Ratio. StashAway has the highest ratio of 1.25 which is significantly higher than the other 2 STI ETFs (< 0.4). Let me quote Freddy Lim (Co-Founder & Chief Investment Officer of StashAway), "for every dollar of risk taken, StashAway P28 is producing 1.25 times the return".


This month commentary: All the investments regardless of the platform or underlying ETF are in red/losing money. StashAway is considered to be outperforming the STI ETFs as it is not losing as much. Assuming a capital of $1,000, losing $500 is equivalent to a 50% loss but to earn back that $500 (back to $1,000) requires a gain of 100%. The example may not be intuitive to some but a conservative portfolio will limit the losses and protect your capital.

Going forward it will be even more interesting when the commissions/fees incurred by StashAway exceed that of POSB Invest-Saver. This will be a battle between cheaper/lesser fees and asset allocation/diversification...

I believe there is a need to redo/regenerate the volatility used to compute the Reward-to-Risk Ratio. Do take it with a pinch of salt for now. I have been compiling some data in order to do so :) 

Which is the best? Only time will tell :)

This is the link to our spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF which I have also added to Our Portfolio page.

StashAway Referral Link for Our Readers
Here you go: KPO and CZM Referral Link

You might be interested in previous months update too:
StashAway - January 2018
StashAway - February 2018
StashAway - March 2018
StashAway - April 2018
StashAway - May 2018
StashAway - June 2018
StashAway - July 2018
StashAway - August 2018 + An Unpleasant Experience

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

StashAway Withholding Tax Reimbursement FY 2017

2 weeks back, I received an email from StashAway titled "You've received a dividend withholding tax reimbursement" but have yet to look into it until a few days ago. Chances are you (StashAway users) would have received it as well.


This was a pleasant surprise because we had long accepted it as one of the cost to invest in the US and were not expecting to get the withholding tax back.


Interestingly, it was stated in one of the FAQs that the taxes can be claimed back and is done by the broker (in this case, StashAway's broker is Saxo). Not sure if this is unique to Saxo or is done by all the other brokers in Singapore. Do leave a comment if you have more information on this :)


Anyway, I realized that only 3 out of the 8 ETFs (TLT, TIP, and CWB) had withholding tax reimbursed so I dropped their support an email for more information. The response I got was roughly similar to what was stated on the above FAQs with slightly more details and a link to a PDF that states the ETFs that qualify for reimbursement:

For the withholding tax (WHT) reimbursement, we do not receive dividend reimbursement for all ETFs but only those that qualify under the QII (Qualified Interest Income) rule.

Only some of the dividend WHT from US domiciled funds (e.g. US government bonds) can be claimed back. As such, we did not receive any dividend reimbursement for XLK and XLY.

For further illustration, you may like to view the Dec 2017 iShares report on QII ETFs. Some examples of QII ETFs that StashAway invests in are 20+ Year Treasury Bond (TLT) and 10-20 Year Treasury Bond (TLH).

Our broker, Saxo, applies for the tax reimbursement on our behalf with the relevant tax authorities and we may not get all of the dividend WHT back. Just to share, the reclaiming of WHT will be done once a year, and we will notify you via email if you have any claimable WHT, which would be redistributed to your portfolio and automatically reinvested. 
- Kathleen


I also took this chance to compile the total dividends we received for the financial year 2017 including the withholding tax reimbursement which comes up to USD $14.64. On the other hand, the total fees charged by StashAway adds up to SGD $7.49 which seems pretty sustainable (dividends > fees). Ideally, the portfolio should grow in the future even without the injection of fresh funds and if the fees > dividends, that would mean that the fees would eventually eat into the capital.

A "Dividends" tab has been added to the spreadsheet - KPO & CZM StashAway Portfolio VS STI ETF but I have yet to update the numbers using the latest statement. Shall get it done over the weekend!

StashAway Referral Link for Our Readers
Here you go: KPO and CZM Referral Link

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)

Saturday, October 13, 2018

Portfolio - September 2018

This update is way overdue! We were too busy with our wedding (I probably sound like a broken recorder) and didn't really had the mood to do any other thing. Now that it is over, I am back in action :) In total, we spent about $6.5k on our wedding which was within our budget. You can read this article for more information on the breakdown of our expenses - Our Wedding Expenses is Within Our Budget!


On 11th Oct 2018 (last Thursday), the market went all red and our portfolio lost $9k in a day! If we were to include the losses before 11th, it would easily add up to > $10k. Compare that to our wedding expenses, I would say the money spent on our wedding was well spent! With all the money sitting in the bank from the wedding banquet, I cannot help but bought a few stocks (averaging down Accordia Golf Trust, OUE and Thai Beverage) on that day too.

Our portfolio decrease by 1.19% to $354,522 - $3,948.29 of capital withdrawal and $1,213.04 of capital loss. The one in blue is the StashAway portfolio, green is SGX and the total is in black.


If you prefer to look at numbers, this is the raw data used to generate the above bar graph. These numbers are as of the last day of the month.


SOLD
- OUE Commercial REITs (8,000 units) @ $0.605

I blogged about it here - OUE Commercial REIT Rights Issue - Very Very Very Bad Deal. While writing this article, it just suddenly occurred to me that I should not have sold all of them! In the past, I learnt how owning the rights only does not allow one to apply in excess - Mistake on Rights Issue - CapitaLand Commercial Trust. Hence, I should have sold 7,900 units fo shares and keep the 100 units. Once I have been given 83 rights, I should proceed to exercise them and applied in excess! That would have been the best of both worlds (preserving my capital and entering at a lower entry) which is something I always wanted to test out. Having said that, I can do that (buying and selling just 100 units) because I do not have any minimum commission. Oh well, it is too late now, shall give this a try next time.

BOUGHT
- Lion-Philip S-REIT ETF (1,000 units) @ $0.98

We bought 1,000 units of Lion-Philip S-REIT ETF as part of our new strategy - New Singapore Budget, New REIT Strategy!

Dividends
The total dividends collected this month is $100.00. The breakdown is as follows:

CompanySymbolExDateSharesTotal
OUE LtdLJ313-Sep-1810,000$100.00

Total dividends collected for 2018: $10,997.38
Average dividends per month for 2018: $1,221.93

StashAway


Capital: $12,000
Current: $11,845.18 (IRR: -2.9%)

Do like any of the following for the latest update/post!
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)

Wednesday, October 10, 2018

Our Wedding Expenses is Within Our Budget!

Hello everyone! It has been a while and our wedding is finally over! Both of us have been upgraded from S to M (not Small to Medium but Single to Married) <-- that's what our JP (Justice of the Peace/solemnizer), Mr. Mike Tam Chee Wah said. The ceremony was entertaining and he was able to alternate between both languages (English and Mandarin) comfortably. We certainly made the right decision to engage him as our JP. One of my brothers was so impressed with him and tried to book him for next year but he was already booked. Do try to book/reserve him in advance!

Our wedding was exceptionally smooth thanks to all our brothers and sisters! CZM was also kind enough to spare me from those torturing gatecrash games and I only had to give a red packet + signed my life/money away to CZM (those contract where my money is hers while her money is still hers, do household chores, etc.). Unfortunately, everything happened so quickly on that day that we barely had time to interact/catch up much with our guests and both of us were feeling slightly unwell (headache, flu and no appetite). However, when it was time to count the ang bao (red packet) money, both of us miraculously "recovered". lol.

I might have blogged about this previously that we did not want to hold a wedding banquet initially but after sounding our parents out, we decided to go ahead with it. After all, we believe that a relationship is not just about us but our family too. Our plan was to keep everything small and simple so we had an initial budget of about $10,000 to $20,000 and I am proud to say we were lucky enough to keep it way below our budget!

Total Expenses: $29,858.63
Total Income: $23,406.00

Overall: -$6,452.63

Expenses


This is a breakdown of the top 10 expenses which accounts for 95.94% of the total expenses. If you think that we spent too much on a specific category/shop and should/could be cut for yours, look no further. Having said that, the full breakdown can be seen at the end of the article. We definitely took a lot more Grab/Comfort than usual because we were rushing/got tired from the preparation.



For those that prefer to look at pie chart instead of numbers.

Income


If we look at the cost of the banquet ($17,878.63) vs the ang bao we received ($23,406.00), we actually made a profit of $5,527.37. I guess this is what people meant when they say they managed to "cover back"? Realistically speaking, I think there is only an extremely slim chance of making a profit from the wedding after including all the relevant expenses and one really should not have such an expectation.

From the above breakdown, it is obvious that most of the money came from my relatives. How it works for us is when CZM's parents requested for X number of tables for their relatives, all those ang baos will go directly to them and it is theirs to keep.

My parents gave us $2,000 for Jin Cha (tea ceremony) and my 3 grandmothers gave us $1,700 in total for the banquet ang bao. These are outliers that really helped a lot. On average, our friends and colleagues gave more than enough for us to cover the cost of the banquet (~$102 per pax) too.

The one takeaway is even if you are not planning to hold a wedding banquet, the tea ceremony is a must! Hahahaha. The tea ceremony would cost you almost nothing (except for the tea set, tea + your mouth/voice) and you get lots of ang baos + some gold.

We were trying to value/include those gold into our income but most of the gold (5/8) that we received did not have any receipt with them. The overall damage would have went down further if we were to add the value of those gold in.

Hope you enjoy our wedding expenses and income breakdown!


Do like any of the following for the latest update/post!
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3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)