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This is a well written guest blog by FunShine who is another good example of prudence in personal finance and discipline in investing for income:
Diary of an Investor
1. Ever since I have become more open with my portfolio, you get different friends asking or commenting on me for different things.
2. There are those that are surprised as some always thought that I am poor as I worked in social services for the past 11 years. I openly shared that my first job, the pay was only 1.6k after CPF. Plus I do not drive and live a frugal and prudent life other than my toy collecting hobby and my MTG hobby.
3. There is another group that asked how did you do it? I just say when my salary increase, I still live like how I will live based on my first job's pay. I invest and save the difference from my first job pay and last pay cheque.
4. My first job has taught me a lot on financial education and to always save for a rainy day. My first job is almost the same as those officers you see working in SSO that helps the poor and needy in SG.
5. There will be another group that will ask what to buy. To this group I say, go do your homework. And tell them I lost 30k by asking this kind of question.
6. Another group will come borrow money. To this group I say, I myself have good debt and I borrow money too at 2.5% to 4% interest backed by my asserts on loan to those that lend me money. What I do is take the money and invest it and generate a higher return. In the event if I fail, they can keep the assert I "pawn" to them which is more expensive then the money I borrow from them.
7. So if they ask again and still do not get it, I say can I charge you an interest of 5% if I lend you money? They understand and leave.
8. Of cos, there are my friends that is going through real hardship. I normally lend them up to $500 to help them tide through. There is a very firm and fixed pay date. No interest charge. If they go missing on me, I will just write off the $500 and be thankful that $500 can see the true colour of my friend that have questionable integrity. I am thankful as I will save lots of hours in my life with this friend since I will never see them again. So far I have lend more than 20 plus times and all the money has been returned.
9. Then you have another group. The friends that ask you to invest in them. My question is, is your "company" able to generate 5% to 20% ROI per year or on a long run? If no, it's better I place my money in the stock market or Oil/Gold/Silver ETF.
10. If they still pressed on, they will be bombarded by a tons of question from me:
A) Your current cash flow and Capex
B) Why are you raising funds
C) Future potential
D) SWOT
E) ROI in the next 5 years, 12 years
F) Succession planning
A) Your current cash flow and Capex
B) Why are you raising funds
C) Future potential
D) SWOT
E) ROI in the next 5 years, 12 years
F) Succession planning
11. So far no one has passed this stage. I give to charities but I must know that is money well spend.
12. My this year's tax for my 10 months of work is only going to be $88. So you can probably work backward to think how much I give or put in SA or SRS if you bother to calculate.
13. Portfolio with the recent stocks bound up has been good. I am now just 40k short of being a priority banking customer, two months ago when the "sky was falling" and I got numerous messages on what to do, I was short of 50k. Normally I will just tell the "Sky is falling" group, why do you invest and why do you buy this company in the first place? If nothing change, just ignore the noise.
14. However, I will be selling 1/3 of my stocks in Mid April. As have a feeling that cash on hand will be good to take advantage of the upcoming opportunities.
15. My war chest consisting of OA-SA and SRS is still untouched. Market has not dropped to the point where I felt the need to open them. Will rather have good debt at 2.5% to 4% to buy them, then to tap on my war chest.
16. Preparing my heart now for quiet time. Just want to do a bit of sharing. Hope that what I share will help you in considering to live a prudent life and give more to others in need.
17. We need to be good stewards in all aspect of our lives. Thanks for reading.
Bloggy Award
2 comments:
On point #15: "My war chest consisting of OA-SA and SRS is still untouched. Market has not dropped to the point where I felt the need to open them.".
Won't it be wasteful for SRS funds to be idling over the years since the interest rate is insignificant? It would be useful to buy ETFs such as ES3 or A35.
i can almost guess your broker. lol
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