Have fun as the whole family improve on financial literacy!

Some people get invited to be beta testers for really cool online games like Diablo III but AK was invited to be a beta tester for a board game! Yes, a board game! Just nice for low tech AK. Roll dice, move a counter, get money, buy stocks, buy properties etc. Sounds like something that would appeal to AK, right? Exactly!

AK also provided feedback on how the game could be improved and when he was invited to play the game again, the kinks were ironed out. The game in AK's opinion is good enough for him to put a little testimonial on the box. In case you are wondering, no, AK was not paid to do all these. Then why did AK do it? I did it because I thought it was fun.

However, the fact that I was the only beta tester not in his 20s was not fun. Old brain in its mid 40s had to try to keep up with much younger brains. Not easy. Oh, I wasn't the winner in the game. ASSI's resident guest blogger, Matthew Seah, won. Brilliant fellow (and really good dice throws too).

Anyway, what is this game?

Fine looking game and proudly Made in Singapore!

This is taken from the official media release by its creators:

ASSET FINESSE™ (AF) is for anyone who hopes to gain a deeper understanding of Singapore’s economy and endeavors to learn more about the world of finance in a fun and interactive manner.

Singapore has adopted unique policies, enabling her to thrive even as a country with limiting circumstances. Through the AF board game, players will be introduced to common Assets in Singapore and the various characteristics of each Asset. Assets under the AF boardgame include Stocks, Bonds, CPF, Properties, Unit Trusts, Insurance and Businesses.

This game also seeks to equip players with investment pointers that can potentially prevent him or her from falling prey to investment scams and find out what constitute illegal practices in Singapore. 

Players can learn basic accounting treatments and will grasp the importance of insurance when making sound financial decisions. In addition, the game will simulate market behaviours and various financial calamities. This serves to shape the mental model of players before they attempt to deal with real-life challenges that arise from the unpredictable nature of economic cycles.

The main objective is for the player to be financially free by accumulating a level of net assets, while fulfilling certain conditions. Ultimately, it aims to evoke a desire in participants to attain financial freedom.

Recommended for ages 13 and up, this could definitely be a fun family game. Remember I said something about making financial freedom a family affair before? This could be a fun way to get everyone in the right frame of mind.

The game usually retails at $118 per set. You can get this cheaper if you use the discount code "AK71". How much cheaper? You get a 10% discount. Aiyoh, so little? I also say.

Want more discount? Easy, scan a student card and email your order to:

onestop@diverselearning.com.sg

If you do this, you will get a 30% discount! Student card more powerful than AK's face.

What is in it for AK? Every set that is sold, he gets an OCK curry puff. Really, I am telling the truth. Don't believe me, when ordering the game, ask the vendor.

Anyway, for those who are more cautious and unwilling to jump into a purchase right away, you might want to try out the game by joining a competition and you might win Apple products and I don't mean those growing on trees. Oh, you know har?

Date: Saturday, 21^stMarch 2015

Time: 0930 to 2000 hrs

Venue: Great Eastern Centre for Excellence, Raffles Place

Registration Fee: $10 per participant

They will also provide a mass training session. So, everyone will be on a level playing field.

A mass training session will also be conducted for all participants one week prior to the actual event day. The details are as follow:

Date: Saturday, 14th March 2015

Time: 0900 to 1200 hrs (Secondary School Category)

          1400 to 1700 hrs (Tertiary/Open Category)

Sign up now by clicking on the link below:

http://goo.gl/forms/11Y2VlllER​

Registration deadline: 12 March 2015, 2359 hrs.

For more updates and details, visit 

https://www.facebook.com/joinNCF​ 
or 
http://ntu-iic.org/ncf/​.

Hope you have fun. I know I did.

Oh, I hope you win that Macbook Air too!

Related post:
Financial freedom is a family affair.

Listen to AK and create your own Dividend Machines.

By now, some of you would have heard an interview I gave quite recently on the topic of Income Investing. I didn't share the interview in my blog earlier because I thought I didn't do such a good job, on hindsight, and I kind of let slip my thoughts on my FB wall.

Well, for many of us, it is very often like this, isn't it? "Aiyoh, I could have done better."

So, who requested for an interview? They are my friends from The Fifth Person and those of you who attended InvestX Congress middle of last year might remember them. I also mention them every so often in my blog. They are good people who are bent on providing quality education at very reasonable prices.

The interview I gave ties in with the latest program by The Fifth Person on Income Investing and, just now, they asked if I would like to be an affiliate to promote the program?

I am too lazy to conduct a course on investing for income and here is a low cost option for anyone who might be interested to learn and need some guidance. So, why not? Of course, I would be happy to promote their program.

So, if you are interested in more structured learning about Income Investing, you might want to consider what is being offered by The Fifth Person. See if you agree with me that it is value for money. I think you will be pleasantly surprised because I was. 

Note: Don't spoil the surprise by scrolling quickly all the way to the bottom of the page after clicking on the link provided below. I think some of you will do it anyway. So, never mind lah. You happy can already.

Dividend Machines by The Fifth Person

Do the right things and the right things will have a higher chance of happening for you!

Remember, if AK can do it, so can you!

Are you thinking of selling or buying a condominium?

I received two emails from readers, one about selling a condominium and one about buying a condominium. Put them together and it could generate some interesting thoughts. Have a read and maybe you will have a comment to share with us.

Hi AK,

I have been following your blog for about a year now, really enjoy reading all your posts, be it on financial related topics or simply what you had for dinner! I'm glad that you blog quite frequently so there are new posts most of the time. :)

This is my first time writing to you,  sparked off by your latest post on a reader's question on 99 year lh vs freehold properties. I have had this same question at the back of my head for some time now but never really bothered to do much about it. In my case, I own a 99 yr lease hold property ( a 2+1 BR condo) which i'm currently living in. As i bought this property sometime back, the current prices are still higher than my purchase price. However, I have been wondering if there is a need to sell this place to buy a freehold property to live in and when would it be the right time to do this? My property TOP in 2010 so it has been 5 years, i suppose its not considered old at this point. Though my preference is to stay at this current place for its location (not near mrt, just relatively convenient for me to get to work), avoid the hassle which comes with shifting, as well as the high property prices, my worry is not being able to sell the place easily in another 5 years time. Should i be looking to sell this place before it gets too old?

What would your advice be for me?

Thanks,

K

AK says:

Hi K,

Welcome to my blog. :)

If you like your home and have never thought of monetising it, then, just stay put. For me, I am never emotionally attached to where I stay. So, it is relatively easy for me to let go. ;)

You place received its TOP in 2010 but you have to remember that its 99 years lease started its countdown from the date the land was acquired by the developer, not from the date the project received its TOP. So, if it took 3 to 4 years to construct, almost 10 years of the lease are gone.

If look at your home just as another asset which you think could make money for you and I think it might be the case since you worry about not being able to sell it easily a few years later, then, I think you might want to start marketing your condo now. Oversupply situation is going to get much worse. I am sure you know.

Having said this, make sure you have somewhere to move to after selling your condo. In my case, I still had my rooms in my parents' place. If you have to rent a place, then, it might not make a lot of sense.

Best wishes,
AK

Hi AK,

I know your position regarding property as an investment, having followed your posts these 2-3 years.

One recurring thought but have had trouble articulating is this: the current soft property market is really largely a result of government intervention. If the ABSD and TDSR were not in place, what would your guess be for the property market today?

I would think that those crazy heady days of people lining up at showrooms (and also, people asking people to queue there) would continue. Which then leads me to think that we would really be in (big) bubble territory. Now, with upcoming oversupply of flats and condos, and a rising SIBOR, it would really make sense to hold out and probably buy an apartment in 2015/2016.

I'm single, 35, and currently living with my folks. At this time, my inclination is buying a HDB resale flat. I'm not sure if it's still worth it to buy a condo and wait for capital appreciation.

Care to share your thoughts with me please?

Cheers,

M

AK says:

Hi M,

If not for the cooling measures the government put in place, I am very sure that prices of real estate in Singapore would have shot through the roof, pardon the pun. However, to be fair, prices have come down due to the ramp up in supply of both public and private housing too.

I am inclined to believe that prices will decline much more before stabilising and it will be many years before prices start moving up again. When will prices bottom? Although we estimated quite accurately when prices would start declining, it is much harder to say when they might bottom.

Something which we might be able to use as a gauge is the ABSD. The day the government removes the ABSD, then, it could be a signal that prices have bottomed. Just an idea. ;)

Best wishes,
AK

Related posts:
1. When to buy (and sell) a private residential property?
2. Disastrous investments in the property market.

Frasers Centrepoint's Perpetual Bonds.

A reader sent me a note in FB today, asking me what I thought of this:

FRASERS Centrepoint on Monday is selling Singapore dollar perpetual bonds, the first perpetual deal in 2015. A term sheet seen said that the SGD subordinated Perp NC 5 has an initial price guidance in the low 5 per cent. NC 5 means that the perpetual bonds will not be recalled before year 5.

Source: The Business Times.

Well, I would generally avoid long term bonds especially since I believe that interest rates are more likely to go up than not from here on. With perpetual bonds, there isn't any maturity date. So, they are more long term than long term bonds. There isn't a date when the bond matures and when the principal is returned to the bond holder. Having a maturity date when the principal is returned to the bond holder is a feature that makes bonds safer.

Reader:
What do you think about this, as compared to CPF minimum sum?

So, can we compare this with the CPF which locks up some of our money for a very long time? The expected coupon of 5% is similar to what is being paid on our funds in the CPF-SA, isn't it?

Well, it isn't an apple with apple comparison, actually. One is a bond backed by a business entity while the other has a built in annuity and is backed by a AAA rated sovereign bond. Definitely, they are quite different animals.

As always, whether something is good or not depends on where we stand. Generally, I think this is a good thing for Frasers Centrepoint's shareholders as the company diversify their sources of funding and a 5% coupon might appear quite cheap several years from now (and they only have to keep paying the coupon and not worry about paying the principal).

However, for the bond holders, they could find themselves holding the shorter end of the stick and it could become more apparent as time goes by.

Related posts:
1. Perpetual bonds: Good or bad?
2. Nobody cares more about our money than we do.
3. Bonds, REITs and the instant gratification of yield.

Yongnam: A bad 2014. Could 2015 be better?

When I first invested in Yongnam, it was beginning to reward shareholders by paying dividends and being the biggest outside of Japan in what they do, I decided that they probably had a competitive advantage over smaller players.

Consistent with Yongnam's new direction to invest in infrastructural projects that would generate recurring income, together with two partners, it submitted a tender for the construction and operation of an international airport in Myanmar. I rather liked this new direction.

However, when Yongnam's share price was driven up on speculation that their consortium would clinch the project in Myanmar, I divested most of my investment in the company. Price had gone up not because of some fundamental improvements. It went up based on speculative pressure. As it turned out, Yongnam et. al. was unsuccessful in clinching the project that time.

Subsequently, Yongnam suffered setbacks in its business and its stock price tumbled. I added to my reduced long position when my initial purchase price was hit. Basically, by then, my long position in Yongnam was funded by capital gains from trading its stock as well as the dividends paid by the company.

I was willing to stay invested because I felt that the setbacks were project based and should be temporary. The weaker results were not due to some destructive force which was more enduring in nature. Given time, things should improve again, I thought.

Well, instead of the improvement in results I was expecting, a bigger loss was announced months later. In a blog post in August last year, I said I would not be adding to my investment as Yongnam's attractiveness as an investment for income and growth was undermined. The stock was trading at 22c a share back then and it didn't look like it would be able to pay a dividend. As expected, no dividend was announced in its full year results.

At that time, I said that I would like to see Yongnam's order book improving and if it did not, I might have to trim my exposure. Businesses like Yongnam's need to constantly replenish their order books. As long as Yongnam has new orders, it will have earnings visibility if nothing goes wrong.

In its latest results, Yongnam announced that, as of end December 2014, its order book stood at $405 million. This is an improvement over end December 2013 which saw order book at $340 million. The improvement is a relief for shareholders.

Although Yongnam with its two partners secured the mega project in Myanmar, this still remains a wild card for now. We might remember how Yongnam's stock price rallied briefly when the announcement was made a few months ago. The rally sputtered and the stock price resumed its slide downwards.

This is probably because it remains to be seen what are the details and terms of the public-private partnership agreement with a 30 year concession for the international airport project in Myanmar. In Yongnam's recent full year statement, it is stated that discussion is still underway.

Naturally, the project will require funding and will take time to complete. The Myanmar government will get a US$700 million low interest rate loan from the Japanese government while the consortium will secure about US$520 million in loans from private lenders as well as use internal resources in the construction of the airport. The airport will take about 4 years to complete construction. This project is likely to make material contributions to Yongnam's performance once it gets off the ground.

So, taking everything into consideration plus the fact that I am already holding on to a much reduced long position in Yongnam compared to the time when I was invested in it for income and growth, I decided to increase my long position in Yongnam today after its stock took a beating and price tested an important support level I identified.

Buying in at 16.1c per share represents a 32% discount to Yongnam's NAV and it also marks my first purchase of its stock in quite a while.

Yongnam had a terrible 2014 but could 2015 and beyond be better?

See financial statement: here.

Related posts:
1. Yongnam: Investing in infrastructural development.
2. Portfolio review: Unexpectedly eventful.
3. Managing exposure in AK's investment portfolio.

Chats with readers on Japan, bonds, properties, GFC etc.

AK is an accredited kay poh and spends quite a bit of time chit chatting with readers online. When I shared with a couple of fellow bloggers and also some friends that I spend at least 3 to 4 hours online answering questions everyday even if I am not blogging, they were amazed!

Here are some recent chats:

Sent to me by Paul who is vacationing in Japan:

Paul: U come japan so often, they name a burger after u?

LOL!

Then, G thought of buying some bonds:

B had some questions on investing in real estate in Singapore:

E discovered that AK is quite good at side stepping questions:

W had questions about war chests and allocation:

P asked about averaging up or averaging down on our purchases:

I forgot to mention that I kept adding to my investment in Hock Lian Seng over the years when I thought Mr. Market offered me more attractive prices at different times.

I enjoyed all the chats. I hope you did too. ;p

Related post:
An evening with AK and friends: Photos.