Monday, 24 October 2016

ETF Updates

I'm back from my 2 week holiday to Italy in Europe! My wife and I have been there before during the second year winter break of our undergraduate study. Even with a limited budget as students, we had a great time in Italy then and figured we would enjoy it even more now with our increased budget as working adults.

We were right! Nicer accommodation, food and travel options do make a difference. Anyway, we are happy to be back in Singapore and are still recovering from jet lag. Will also need to get ready for our first day back at work this week and readjust to the daily routine.
I updated the Google Sheet and SGXCafe portfolios for the automatic Oct 2016 purchases so far:

  • SPDR Straits Times Index ETF (ES3) - Maybank Kim Eng Monthly Investment Plan (S$400)
  • Nikko AM Singapore STI ETF (G3B) - POSB Invest-Saver (S$400)

The SPDR Gold Shares (O87) automatic purchase under the Maybank Kim Eng Monthly Investment Plan did not happen because I only allocated S$100 to it. Which is not enough to purchase even 1 share as I found out from the broker. Not sure why I didn't think of this before. Increased it to S$200 and I'm hoping at least 1 share gets purchased every month from Nov 2016 onwards.

While I was away, the Philip SGX APAC Dividend Leaders REIT ETF S$ (BYJ) was listed and started trading last week. I'm not going to analyse the pros and cons of this REIT ETF as there is plenty of online material on that by the other finance bloggers and websites.

After making my own assessment, I reckon it makes for a decent addition to our ETF portfolio. I have considered including a REIT ETF before to increase the dividend yield of our ETF portfolio but couldn't find a suitable one so far.

The BYJ has some level of diversification into different types of REITs and Asia-Pacific countries but with a substantial exposure to the retail sector and Australia. It's not ideal as I would have preferred a more even spread across the various sectors and to other developed countries. But it works for now and I have added about S$1,200 of the BYJ to our ETF portfolio.

There will be an automatic Oct 2016 purchase of ABF Singapore Bond Index Fund (A35) under the POSB Invest-Saver (S$100) tomorrow and I will update the Google Sheet and SGXCafe portfolios then as well.

Wednesday, 5 October 2016

Sep 2016 Net Worth Update

I didn't post an Aug 2016 Financial Update last month. Besides, you can refer to the figures that I update regularly on the Net Worth, Asset Portfolio, Passive Income and Spending Multiple & Savings Rate blog pages as a reference. I have also included the numerical and percentage changes from month to month for easier tracking of our progress.

Nevertheless, I have decided to do a Sep 2016 Net Worth Update. Before I go into the details on our financial progress from Aug 2016, I'm going to write about other related topics first. Just to make it interesting to have some of my current thoughts and views in this post.

Would we ever pursue self-employment?

I have been debating this issue with my wife and we are coming to the conclusion that we probably won't do it unless we are forced into it. We are relatively young and still have decent job prospects and earning capabilities. We might as well make the most of our careers for now by expanding our professional & social network and gaining more work experience & skill sets. Besides, we have limited self-employment options at this stage.

Given the way things are going, technological advancements, outsourcing and structural changes to the economy & industries might put us out of work in the next decade or less. Even if we are willing to move countries to pursue jobs, it would only delay the inevitable by another decade at most. Or we will just decide to stop work early from getting burnt out, tired and disillusioned.

Which is why our approach is to keep going in our full-time jobs while we still can and keep a look out for self-employment options at the same time. And we will have to develop the required skills, experience and contacts on the side to prepare for them.

This works out financially for us since our salary income can continue to drive our savings and investments forward the longer we remain in the workforce. Our self-employment options increase the less we rely on them to fund our living expenses.

What about the value of time?

I honestly don't know what we will do even if we become financially independent, pursue early retirement and stop work now. I know it's a stupid thing to say because I'm sure there are many ways to occupy my time each day other than going to work.

Maybe we can travel more frequently, spend more time with family and friends, exercise more etc. But we can do that now even with full-time work since our jobs are not as demanding with reasonable hours. It's just a matter of motivating ourselves to be more effective and efficient at managing our time.

It's not that we like working. We just enjoy the daily interaction and engagement we get from going into work and dealing with colleagues and bosses. The positive and negative experiences help to improve us professionally and personally. That's how my wife & I have grown up and matured over the years since graduating. Self-development is one of the main reasons for our relationship to keep evolving so we will always be adapting and changing to stay together.

Our time is already well-spent by having all these influences in our lives. Unless we can find something else that offers an equivalent level of interaction and engagement, our time doesn't become better spent from not working. Essentially, time doesn't become more or less valuable from whether we have full-time jobs but from the choices we make each day. Maybe this might change when we have kids and we no longer consider the utility of time from our perspectives but from theirs as well.

Anyway, that's enough of a non-financial update and I should get back to the net worth figures. I should also mention that this is probably my last post for a while as I will be leaving for a 2 week holiday to Europe soon. And I will be busy settling in to my new job when I get back. Which translates to less time for blogging.
Net Worth - S$145,808 (+ S$14,946 and + 11.42%)

There are small increases in our ETF and Share Portfolios even though equity markets stayed relatively flat. These are due to POSB Invest-Saver contributions to Nikko AM Singapore STI ETF (G3B) and ABF Singapore Bond Index Fund (A35) as well as averaging down on some oil & gas stocks.

The Maybank Monthly Investment Plan for SPDR Straits Times Index ETF (ES3) and SPDR Gold Shares (O87) have been set up for this month onwards. This should accelerate the rate of increase in our ETF Portfolio going forward.

The increases in our Other Portfolio and Cash on hand came from cash injections and savings. Same for the increase in our Central Provident Fund (CPF) balances and decrease in our mortgage liability. These should be regular as long as we stay employed with no major expenses or investments made during the month.

There was a big drop in dividend income as the reporting season is over and should remain low until the end of the year. Interest income is increasing slightly from cash build up and corporate bond coupons. Good to know the annual spending multiple has risen too.

A few of the blog figures are proxies of actual numbers

I have been getting questions and comments that the math on my blog doesn't seem right. I'm going to address this issue now and say that you are correct. This blog is meant to be a public and personal space to chart our financial freedom journey. Take away whatever you reckon is applicable and relevant but understand that I have already revealed quite a bit of personal and financial information.

The only way I could have done that is by cloaking myself in anonymity. I have tried not to abuse it but admit that I have sometimes been too straightforward and inconsiderate in my opinions, views and comments. Besides, some of our family and good friends are already aware of the existence of this blog. As much as I trust them, I will never reveal all of our personal and financial information on this blog.

But I will try to summarise the explanations for some of the inconsistencies in the math:
  • We don't include all of our savings, investments and retirement monies in Australia in our calculations. These are our lifeline funds for starting a new life in Australia if things don't work out in Singapore. Far more important than expense and emergency funds and too critical to be disclosed publicly.
  • Our actual salary income is higher than the average figure we are showing now and that's how we have enough cash for both savings and investments every month.
  • We have only included 50% of the value of our apartment (real property) and excluded some of our CPF balances in our net worth calculation.

Although most of the figures on the blog are accurate, a few of them are proxies of the actual numbers. This helps to protect our personal and financial information by maintaining a certain level of secrecy and anonymity. I'm signing off on this note for now but will be back eventually. Looking forward to writing my next post then!