2020 Net Worth

Let me start by wishing everyone a Happy New Year! 2020 has been an incredible year for us and manage to achieve/do most of what we had planned to do. You can take a look at last year update here - 2019 Net Worth. We took 1 month off from work and did a RTW trip to Mexico, Peru, Bolivia, Brazil, and Switzerland in February before COVID got really bad/serious. Unfortunately, travelling to Hokkaido and Scandinavia/Northern Europe with our family did not happen. I got my promotion and change job after a few months resulting in a double bump in salary. Recession sort of happened but our portfolio still manages to hit more than half a million with a V-shaped recovery. The best thing that happened to us is the addition to our family - Baby Ong!

I do not think leisure travel is going to resume anytime soon and with a baby, we are definitely not planning to travel, hence no grand travel plan although we have about half a million miles now @_@" As a parent, our mentality has changed, it is no longer about ourselves and it's always about the baby. Anyway, this is what we hope to achieve for year 2021:

1. Baby Ong grows up healthily since health is wealth!

2. We are still on track to a 1 million portfolio by age 34. It is currently at 613k without leverage and 669k with leverage and the target for this year is 720k without leverage. 

3. Given the low interest environment, we are looking to increase the use of leverage "safely" and hopefully be able to accelerate the growth of our portfolio. I first blogged/explored the possibility of using it in 2018 (Leverage - A Double-Edged Sword) but only took the plunge and used it last year and it has been working well for us so far. Shall blog about it separately next time.

Our net worth update is an annual event but I blogged about it a few months back when we reached a milestone - 1 Million Combined Net Worth By Age 30.

Let me introduce the concept of net worth and its importance once again for the new readers.

Net worth can be calculated by taking all the assets and subtracting away all the debts/liabilities. This is the classic comic where everyone is actually poorer than the beggar who has a net worth of $2.73. Your friends/colleagues may be living in a huge condominium, driving some fancy car but it could all be financed by debts. There is absolutely nothing wrong with that as long as their income allows so but anything can happen! Do not be the The "Poor" Pilot With Multiple Properties. You can refer to the following article on the importance of net worth by InvestmentMoats - Don’t Track Your Expenses or Budget First. Plot Your Net Worth Instead. 

Cash
This is all the money we have in our savings accounts. Regular readers will know we are investing aggressively that we hardly keep/hold onto cash. No emergency fund as well which I do not recommend since it is personal finance 101. We felt that there's no need for it at the moment, will probably work start saving when we get older.

Our Cash: ~ $22,000

CPF
Every month, I will try to show CZM her net worth in order to motivate her to work harder towards financial freedom. However, she would always say I inflate her net worth because I included CPF. lol. I am sure some of you may have the same mentality but like I always tell her, CPF is our money and should be included as our retirement planning.

Our CPF: ~ $322,000 (OA + SA + MA)

Investment

I have yet to blog about our portfolio performance and although we outperformed STI for this year, the portfolio underperformed when compared against SPY and IWDA. Having said that, the return through the use of leverage is not being captured and should be higher. Anyway, our overall time-weighted return is 5.82% and XIRR is 5.33%.

If you are interested in the smart portfolio tracker (StocksCafe) which I am using as shown above, sign up using my link for a longer trial period :) Refer to our Referrals page for more information.

Majority of our portfolio are tracked using StocksCafe except for Endowus which is about 12k and we have about 56k of leverage/debt.

Our Investment: ~$613,000

Property

I believe that property should be included in the computation of net worth. If one excludes the value of the property, the money (cash/CPF) you use to pay for the loan/mortgage will be no different as disappearing into the thin air or throwing it into the sea. Hence, I will be valuing the property based on the total payment (interest + renovation cost) till date. This ensures that our money will not "disappear" and act as a floor/minimum amount (total payment + remaining loan + markup/profit) to sell in the future.

I can imagine people selling their house at market value + markup, thinking that they made money from the sale but it is totally possible that market price + markup < total payment + remaining loan. Does this make sense or is it too confusing? lol.

Anyway, the cost of our HDB + the payment made so far is ~514k and the current outstanding loan is 364k.

Our Property: ~$150,000

Total

Our Net Worth: ~$1,107,000

Here you go! Our net worth pie chart, it looks pretty yummy to me :) 

We have also clocked >1,000,000 page views! Thank you very much to all our readers!

Alright, I digress too much. Are you tracking your net worth?

You might be interested in these blog posts too:
- 2017 Net Worth: ~$510,000
- 2018 Net Worth: ~$640,000
- 2019 Net Worth: ~$886,000

- 2020 Net Worth: ~$1,107,000

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
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.)

1 Million Combined Net Worth By Age 30

We have achieved another one of our goals - $1,000,000 net worth by age 30! We ended 2019 with a net worth of ~$886,000 and was hoping to achieve the goal this year. When covid happened and the stock market crashed in March, I told CZM that it's not happening this year since the majority of our wealth is in the market. Surprise surprise, the market has recovered even before the pandemic is over (technically the vaccine isn't out yet, the economy is still bad and we still can't travel).

Let me introduce the concept of net worth and its importance once again for the new readers.

Net worth can be calculated by taking all the assets and subtracting away all the debts/liabilities. This is the classic comic where everyone is actually poorer than the beggar who has a net worth of $2.73. Your friends/colleagues may be living in a huge condominium, driving some fancy car but it could all be financed by debts. There is absolutely nothing wrong with that as long as their income allows so but anything can happen! Do not be the The "Poor" Pilot With Multiple Properties. You can refer to the following article on the importance of net worth by InvestmentMoats - Don’t Track Your Expenses or Budget First. Plot Your Net Worth Instead. 

In our previous net worth update, I simply share the numbers but since this is a special occasion, shall share some screenshot too :)

Cash
This is all the money we have in our savings accounts.

KPO DBS Accounts

CZM DBS Accounts

I have blogged about how we used the Multiplier as our main savings account and the use of a joint account to achieve higher interest previously. The last/latest article can be found here - DBS Multiplier Upcoming Changes. 

KPO UOB Account

The UOB account was created when we refinance our HDB housing loan/mortgage to UOB. I usually keep this around $1k to avoid the fall below fee and it just went below $1k after the giro deduction for my credit card bills. I also have multiple SCB accounts that have $0 balance (no fall below fee for priority customer) which I will show later for a different reason.

Regular readers will know we are investing aggressively that we hardly keep/hold onto cash. No emergency fund as well which I do not recommend since it is personal finance 101. We felt that there's no need for it at the moment, will probably work start saving when we get older.

Our Cash: ~$16,000

CPF
Every month, I will try to show CZM her net worth in order to motivate her to work harder towards financial freedom. However, she would always say I inflate her net worth because I included CPF. lol. I am sure some of you may have the same mentality but like I always tell her, CPF is our money and should be included as part of our retirement planning.

KPO CPF

CZM CPF

At the start of our career and before we got our BTO, we transferred everything in OA to SA to take advantage of the higher interest in SA. However, the plan now is to leave more money in OA to act as a buffer for our mortgage. As of now, we can become jobless for ~3.6 years without worrying about the mortgage. Another reason why I stopped transferring to SA is for tax optimization purposes. The option to top up SA up to $7k yearly will disappear once FRS is met. You can how I reduce our taxes by performing Voluntary Contribution (VC) to CPF Medisave and RSTU (Retirement Sum Topping-Up to SA).

Our CPF: ~$308,000 (OA + SA + MA) 

Investment

Our portfolio has grown to >$600,000 (another record high!) after the news of the vaccine came out and since our last update (Portfolio - October 2020 - $567,374).

All our investments are tracked using StocksCafe (including StashAway and Syfe) except for the Endowus portfolio.

Hence, our total portfolio is ~$625,000 currently (including leverage).

The only 2 stocks in my CDP were from an IPO (Just Another Netlink Trust IPO Analysis) and the one time when DBS/Vickers thought I was an accredited investor and offered a private placement (Keppel DC REIT Private Placement). Probably applied too little and the banker found it suspicious. Stopped receiving all those HDB bonds/private placement emails shortly. Oh well.

The majority of our investments are with SCB in 2 different accounts and one of them is a lien account where I pledge shares in order to borrow money from the bank at a lower interest. You can read more about it here - Leverage - A Double-Edged Sword.

The account highlighted in yellow is the leverage/amount I am borrowing from the bank to invest. $15k Euro was used to invest in Cromwell European REITs. Although you see $51k, $20k were used on Singlife for 2.5% interest (ignore it since I did not include it in the cash section) and $31k were invested - Biggest Losses in a Day + Start of Leverage.

Total Leverage: ~$56,000

Our Investment: ~$569,000

Property

I believe that property should be included in the computation of net worth. If one excludes the value of the property, the money (cash/CPF) you use to pay for the loan/mortgage will be no different as disappearing into the thin air or throwing it into the sea. Hence, I will be valuing the property based on the total payment (interest + renovation cost) till date. This ensures that our money will not "disappear" and act as a floor/minimum amount (total payment + remaining loan + markup/profit) to sell in the future.

I can imagine people selling their house at market value + markup, thinking that they made money from the sale but it is totally possible that market price + markup < total payment + remaining loan. Does this make sense or is it too confusing? lol.

Property value based on total payment (including interest + renovation cost): ~$514,000

Valuing at cost + total payment is pretty conservative as the market valuation is ~$635,000!

Our Housing Loan: $365,000

Our Property: ~$149,000

Total

Our Net Worth: ~$1,042,000

The question is how to achieve something similar? Honestly, there's no get rich quick scheme. In my opinion, it always boils down to the followings:

1. Work hard to increase your salary/career/business

Unfortunately, this will always be your main source of income, not from dropshipping or owning multiple properties. I have blogged about this previously - >100% "Return" on Salary and your salary growth should not be linear especially at the early stage of your career. If you are below median income, work towards it. After that work towards getting $6k for maximum CPF contribution rate and towards the next tax bracket and so on. Work for your promotion, if there's no growth or you are getting too comfortable, change a company. The best way to differentiate yourself is to learn programming and automate some manual tasks e.g. Python to automate the boring stuff.

2. High Savings Rate

Our savings rate is around 60-70%. Ignore the last 3 months as I have not tabulated our expenses and they are after deducting those fixed expenses only (e.g. housing loan, parents' allowance, insurance, etc.). To do that, cut down on your expenses. Determine what are your needs (e.g. food) and wants (e.g. new shirt/bag). In addition, we made a decision that we will not get a car (even after Baby Ong is born).

Anyway, multiple bloggers have blogged about this previously. One of the more popular ones would be from Mr. Money Mustache - The Shockingly Simple Math Behind Early Retirement. If you are only saving 10% and leading a YOLO life, good luck to you!

3. Invest and do not time the market

We continued to invest regardless of the market movement. We have a monthly investment plan through StashAway, Syfe, and Endowus and we stick to it. If you are constantly holding on to cash waiting for the next big crash that may/may not happen, you are losing money - the opportunity cost to invest and grow your money. 

In the past, to invest/DCA, one will have to either purchase ILP or do it through a unit trust/fund sold by the banks. All these have a very high cost/expense ratio. However, with the various robo-advisors currently in the market, there is really no excuse not to invest your money when they make it so hassle-free and cost-effective. In addition, remember that you are investing for the long term, there's no need to think about selling/withdrawing them when you see a little profit. Sharing this old article again - Never Ever Buy Investment-Linked Policy (ILP). 

At the end of the day, everyone's journey towards financial freedom is different. Let's work hard towards them! Start by tracking your net worth :)

You might be interested in these blog posts too:
- 2017 Net Worth: ~$510,000
- 2018 Net Worth: ~$640,000
- 2019 Net Worth: ~$886,000

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
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.)

RTW to Peru - Sacred Valley

In my previous post (RTW to Peru - Cusco), I blogged about our first day in Peru and so much has happened since then. I guessed we were lucky to be able to travel before the COVID situation became so serious.

Not knowing how difficult or expensive it is to book a driver for a day, we pre-booked a driver for a day through Official Cusco Taxi prior to our RTW departure at USD 85. Unfortunately, we realized Uber is super accessible here and there are an abundance of tour agencies at Cusco downtown which offers a full-day tour to the Sacred Valley (Ollantaytambo, Pisac) at a significantly lower price (approximately 30 SOL per pax ~ 9 USD per pax). Damn.

Pisac Ruins Entrance 

But anyway, we started off with our driver driving us to a ticketing place located near Pisac to purchase the Cusco tourist tickets to Ollantaytambo and Pisac ruins for 70 SOL per pax ~ 20 USD per pax. He then drove us to Pisac ruins which is located high above the valley floor, approximately 1 hr from Cusco.

Somewhere in the ruins

We don't exactly what was the history behind it as we didn't hire any guide and there weren't many signs in English to explain the significance behind the artifacts. Suggest readers to read up (e.g. Exploring the History Behind the Pisac Ruins) prior to going there if you are feeling KPO like us. Lol. Anyways, it was a large compound and took us approximately 1 hour to complete the place.

Pisac Market

Next up, we headed to the Pisac market which is a vibrant place selling the local products like the typical Peru cloth, Llama figurines, and some pottery. We liked the place as the items are generally cheaper than other touristy places. To put things in perspective, we bought a magnet there which costs 4 SOL. An identical magnet sold at Machu Picchu costs 10 SOL. I also liked a drawing there which costs 450 SOL but decided not to buy it first. Unfortunately, a similar drawing of that size costs much more in other places e.g. 950 SOL at Machu Picchu.

Somewhere in the market

We spoke to one of the locals subsequently who told us that it will be recommended to visit the Pisac market every Tue, Thu, and Sun as there will be a bazaar going on, which means more to see at a cheaper price. 

Ollantaytambo Ruins with Llamas

We then proceeded on to Ollantaytambo ruins which again, we don't know what is the significance as we did not pay for a local guide. For anyone interested in hiring one, you can easily find them inside the ruins itself. We basically only know that it serves as an administrative center and a stronghold/fortress for the Inca. For more information, you can read up here -  The Only Peru Guide - Ollantaytambo Ruins. I almost died at climbing the Inca stairs and needed to rest every few steps, probably due to the high altitude. KPO, on the other hand, definitely looks like he has adapted well to the climate.

The view from the top of the ruins

Temple of the Sun

We did not manage to finish covering everything in 2 hours as the compound is way too big. After that, we headed to some housefly-ridden restaurant at Ollantaytambo to have a small bite as I was feeling too bloated from the altitude before heading back. If you are wondering why that place, every other food place there looks infested with flies. Turns out there is actually not much difference.

Although it sounded like a short trip only, the entire trip out from Cusco to Pisac and Ollantaytambo took us about 8 hours, attributed to the small lanes and slow traffic. 

We will be heading to Machu Picchu next (and with a guide this time round yay). Stay tuned!

You might be interested in these articles too:
- Our KrisFlyer Star Alliance Round The World (RTW) Trip Planning/Booking
- RTW to Mexico - Chichen Itza
- RTW to Mexico - Coba Ruins
- RTW to Mexico - Isla Mujeres
- RTW to Mexico - Tulum
- RTW to Peru - Cusco
- RTW to Peru - Sacred Valley

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
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.)

RTW to Peru - Cusco

In my previous post (RTW to Mexico - Tulum), I mentioned about our Mexico adventure. Today, we are heading to a place with one of the highest altitudes in the world - Cusco, Peru. In fact, the Cusco airport stands at nearly 3,300m and is said to be the top 20 highest airports in the world. To put things in perspective, the peak of Mount Everest has an altitude of 8,848m and Cusco is already more than a third of that.  Singapore has an altitude of 15m *facepalm*

To prevent altitude sickness from kicking in, we obtained a doctor's prescription and went to a pharmacy for altitude medicine prior to our trip. The pharmacist advised that altitude sickness usually kick in at 2,500 - 2,800m altitude. Hence, people going to places higher than that should start consuming the medicine 24 - 48hrs in advance prior to touching down. The side effect is diuretic, meaning it will cause you to want to pee more often. Oh well, still better than the symptoms of altitude sickness.

Anyway, we started taking the medicine the night before our flight to Peru. As there is no direct flight (Star Alliance) from Merida to Cusco, we had to layover at Houston first, then Lima. Lima is probably one of the more cui airports. When we touched down there at 10pm, it took almost two hours to clear the customs as there were simply too many people and too few counters. Once we crossed the customs, we see many tourists sleeping/sitting on the floors as the chairs were all occupied. Fortunately, KPO had priority pass so we managed to visit the lounge there to catch on some sleep before our next flight to Cusco at 5am. Oh yes, we also visited a sim card booth from Claro there which quoted us USD 59 for one week worth of unlimited data. And there wasn't any other plan available apart from that. Siao. So we decided to look for a sim card only when we reached Cusco.

It was a rather short flight and we touched down at Cusco at approximately 7am. As we stepped out of the plane, both of us were mentally prepared for the altitude sickness to kick in immediately such as experiencing throbbing headache. To our surprise, nothing happened! We had pre-ordered a taxi (emailed Felipe from Cusco Taxi) to fetch us from the airport to our hotel for US$8. The taxi was punctual and in fact, waited for us for some time as we needed to sort out some administrative stuff inside the airport first. 

We booked our accommodation at Hilton Garden Inn Cusco and were really glad we got that as most of the buildings appear to be pretty rundown. KPO managed to do the (BRG) best rate guarantee trick and managed to get it at a really good price of SGD 84 per night. And because we stayed for 4 nights, he can become a Gold Member through the Hilton Honors Visa Fast Track to Gold promotion (no longer available).

The moment we stepped into the hotel, we were offered coca tea by the staff, which we understand is the local way of overcoming altitude sickness. The taste is rather unique but not bad. I like it. Unfortunately, I don't think we're allowed to bring back to Singapore as it is only legal in Argentina, Bolivia, Chile, Colombia, Ecuador and Peru. This is because coca leaves contain alkaloids which are used to produce cocaine and can result in a positive drug test for cocaine >.<

Once we were done checking in, we decided to explore the town centre, which is located close to the hotel. We ate at this restaurant - Limo which serves Peru-Jap fusion cuisine with a view of the Plaza de Armas. It was by far the best food we have eaten on this trip! We ordered the chef recommended Trucha Yakimono which is basically fried salmon steak drizzled with their local sauce. The taste is very unique and almost felt like there's coca leaf taste in it too. We also ordered the local Peruvian sashimi Tiradito, Chizu Maki and ended off with their chocolate cake dessert. They are all fabulous. 

Inside the restaurant

Trucha Yakimono - grilled trout covered with some sauce

Japanese Tiradito - salmon and tuna with crispy fish skin 

Chizu Maki - crunchy prawn, avocado, flamed cream cheese and some sauce

Peruvian Cacao - Chocolate and coffee dessert

We also visited the Plaza De Armas, Cusco Cathedral and Qorikancha museum. All of them located in downtown and within walking distance. In fact, we managed to cover all of them by about 3pm and returned back to the hotel rather early to catch up on some sleep. 

Plaza De Armas

Cusco Cathedral

Qorikancha

Since we went back to the hotel pretty early, we decided to head to the restaurant to claim our welcome drinks which is a choice of either their local cocktail - Pisco Sour or lemonade.

It somehow became a proper meal/dinner when the waiter started recommending more local food such as chicharron (fried/crispy pork), alpaca meat (low/no cholesterol) and baked guinea pig. The food KPO wants to eat is almost as risky as his investment style and we ended up ordering alpaca meat.

I did not really like it due to its unique flavor (similar yet somewhat different from mutton) and the thought of how cute they are. KPO finds them alright but not fascinating, definitely not ordering it again...

Will be visiting Sacred Valley, Pisac market and Ollantaytambo ruins tomorrow. Update you guys soon!

Our Google Timeline

You might be interested in these articles too:
- Our KrisFlyer Star Alliance Round The World (RTW) Trip Planning/Booking
- RTW to Mexico - Chichen Itza
- RTW to Mexico - Coba Ruins
- RTW to Mexico - Isla Mujeres
- RTW to Mexico - Tulum
- RTW to Peru - Cusco

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
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.)

RTW to Mexico - Tulum

Our fourth day in Mexico is planned for exploring the archaeological site of Tulum.

We checked out our hotel at Kavia first thing in the morning and drove slightly less than 2 hours to Tulum. We paid MXN 100 for the parking and MXN 80 per pax for the entrance ticket.

There was a poster at the ticketing counter which states "no change will be given". KPO exclaimed that it is such a smelly idea to earn more money. Lol. But surprisingly, the staff ended up giving us our change. Maybe that poster is to deter people from giving huge denominations.

Tulum is an interesting site located on a cliff leading to the beach. We realised that it was vastly different from Chichen Itza and Coba in that it was a lot more tourist friendly. It provides signs which explained the history in English, thereby eliminating the need for guides. The archaeological site had lots of iguanas roaming freely and they don't seem to be afraid of people. The tourists also don't seem to be afraid of them strangely, except for us. We even saw one ang moh who attempted to touch it, and the iguana hissed back at her. Talk about dumb blonde!

Next, we visited the Santa Fe Tulum which is a beach located on the left of the exit of the site. We were surprised at how soft the sand was. It really felt like white cool baby powder on the feet! We were attracted to how blue the water was and walked towards it. As we approached the shoreline, a guy came up and asked if we would like to join the snorkelling tour, all for MXN 200 per pax. We were shocked as the snorkelling tour was charging at MXN 600 right at the car park area where we parked the car! I was very tempted to join, but KPO is afraid of fishes and we have a very long journey back to the airport today (approximately 250km drive). Hence we have to give it a miss. Hopefully, we can try snorkelling another time. 

Mexico is full of cenote which is a natural pit, or sinkhole, resulting from the collapse of limestone bedrock that exposes groundwater underneath. We came across this article - The Best Cenotes in Tulum and decided to visit Calavera Cenote. It costs 100 MXN per pax to enter the compound and a few minutes of walk before reaching the cenote. It was not too crowded, just a small cenote being surrounded by a few ang mohs diving/scuba diving.  We could see some tiny black fishes swimming in the cenote (remember KPO is afraid of fishes), and were concerned with the cleanliness of the water, so we decided against swimming there. Just took some photos and left. #typicalsingaporean

We are now on our way to the same airport hotel as we first started out in Mexico. Will be staying there for one night as we have an early flight to catch tomorrow. I definitely enjoy my stay here as the locals are so friendly and helpful despite the language barrier and it definitely didn't make me feel unsafe, unlike in Paris. The drivers here have good etiquette too. They will take initiative to move to the slower lane or even road shoulder to give way to the fast moving cars. The only downside is I haven't quite get used to the food here. Missing bak chor mee much. 

Will be touching down at Peru in our next stop. Can't wait to see Machu Picchu but also nervous about the effects of altitude sickness (touchwood). Keep you guys updated!

Total damage:
Tulum parking - 100 MXN
Tulum tickets - 160 MXN (80 MXN each)
Calavera Cenote tickets - 200 MXN (100 MXN each)
Some private road toll - 185 MXN

Our Google Timeline

You might be interested in these articles too:
- Our KrisFlyer Star Alliance Round The World (RTW) Trip Planning/Booking
- RTW to Mexico - Chichen Itza
- RTW to Mexico - Coba Ruins
- RTW to Mexico - Isla Mujeres
- RTW to Mexico - Tulum
- RTW to Peru - Cusco

Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
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.)