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DBS: 43% jump in earnings! Be a millionaire!

Wednesday, May 3, 2023

In a video I produced recently, I made some points on why Warren Buffett and Charlie Munger are not investing in banks now.

Then, in a video I produced in response to record earnings reported by DBS, I also made note of a few points.

For the benefit of readers who do not follow my YouTube channel, here are the videos.






This is the transcript of another video I produced recently.

Again, this is for the benefit of people who do not follow me on YouTube or prefer reading to listening.

Do you know that millionaires' effective income tax rate might actually be lower? 

This is true in the USA and it is also true in Singapore. 

Remember how much income tax I had to pay? 

Regular long time readers might remember. 

Yes, nothing. 

I didn't have to pay any income tax. 

This is because my passive income does not attract any income tax. 

No one would have guessed that I am a millionaire just by looking at me. 

Contrary to popularized images of millionaires, actually, most millionaires are very low key people who avoid ostentatious behavior. 




Most millionaires are people who live within their means, budget and spend wisely. 

They are mostly focused on ensuring their financial independence first. 

These are habits that take discipline, but ones we can all adopt to begin growing wealth. 

If these facts prove anything, it's that every one of us can strive to become a millionaire. 

And many of us can become millionaires. 

From 2012 to 2022, the number of millionaires in Singapore grew 40% to 240,100. 

This is according to a list published by investment migration company, Henley and Partners, together with global wealth intelligence firm, New World Wealth. 

In the World's Wealthiest Cities report, Singapore is now in the fifth spot. 

Millionaires are high net worth individuals with investable wealth of one million US dollars or more. 

So, it excludes the value of our home. 




Don't be envious of millionaires. 

Unless severely disadvantaged, all of us can be millionaires. 

There are many millionaires in our HDB estates and they lead simple lives. 

We might not know much about them because they are not very talkative. 

They are not crazy like AK who talks to himself regularly. 

Millionaires in our HDB estates are more common than you might think. 

People who have above average income would often tell me that it is difficult to build wealth in Singapore. 

However, if they were to examine their lifestyles, they might be surprised at how much money they could actually save if they were to make thriftier consumption choices. 

From experience, I know it is possible to build wealth more rapidly in Singapore simply by avoiding extravagance and excesses. 

Some readers who decided to make changes to their consumption choices with an eye on wealth building wrote to me, happy with their progress. 

Get the whole family in on the project and the success rate would be even higher. 




Remember, it is always the toughest in the beginning but if we are determined and disciplined, we can become wealthier. 

For most of us, the road to becoming a millionaire will have to start with baby steps. 

"The Millionaire Next Door" is a book which is a must read for many people. 

In fact, I would go as far as to say that the majority of the population should read it. 

So, do you want to be a millionaire? 

If AK can do it, so can you! 

Related posts: 



18 comments:

Henry said...

Hi AK, I had forgot about the book. I had read it twice some years ago. Borrowed from National Library. It ls an inspiring book to know so many commoners became millionaires because they do the right thing, frugal and invest. If they can do it, so can AK, and then so can I. Lol.

AK71 said...

Hi Henry,

I would definitely recommend any person not born with a silver spoon in his mouth to read the book.

Fair warning though.

Following my methods might make the person a peasant millionaire which is what some people call me. (TmT)

Siew Mun said...

I am staying in a HDB and will continue to do so. I plan to stay in senior apt offered by HDB when I am nearer to 80 years old. The hand-out perks of staying in HDB are fantastic.

AK71 said...

Hi Siew Mun,

I am considering the option of HDB Community Care Apartment too.

I think I will do it once I turn 65 years old.

Only 13 years to go. ;p

S A said...

What do you think of wilmar recent drastic price drop? Are u still buying?

AK71 said...

Hi S A,

If I wasn't invested in Wilmar International yet and have been waiting, I would buy some now.

However, as I would be adding to what is already a rather substantial investment, I am waiting for a possible gap which formed in October last year to be filled.

That would be at around $3.60.

Just some quick and dirty technical analysis.

Might not happen. ;p

Henry said...

Agree with you AK. The title of this article probably should change to How to be a millionaire if you are not born with a silver spoon, rather than DBS. I almost skip this article because of that.

garudadri said...

Dear AK
You have been tirelessly and selflessly espousing several ways to motivate people to create and preserve wealth
My salute to you
However, most folks in any part of the world for that matter are “not programmed” to be financially aware leave alone financially savvy!
This is either innate or sometimes, more often not, learnt after getting burnt
Delayed gratification, prioritization and prudence are more reflective of the person’s innate make up- am afraid , it is not easy to change
Most of the SG millionaires are millionaires “by accident” with majority of their assets being locked in property
To be honest, net worth calculated need not exclude property. The equity held minus mortgage pending, is definitely ok to be considered in net worth calculation
The other point is that there is no point in having a high net worth without a cash flow matching their expenses
Both these aspects are equally important and that is where your philosophy of dividend and dividend growth investing triumphs over time as the magic of compounding works in our favor
Warm regards
Garudadri

AK71 said...

Hi Henry,

Coming up with a suitable title is always a struggle when I try to mesh two blog ideas in a single blog. (TmT)

This blog should have been two instead of one. :)

Moral of the story is don't skip any of my blogs. ;p

AK71 said...

Hi Garudadri,

I like the way you put it.

"Most of the SG millionaires are millionaires “by accident” with majority of their assets being locked in property."

Truth is brutal at times.

It comes as no surprise that many are asset rich but cash poor.

As for being financially aware, it is true that many only learn after falling hard.

Pain is still the best teacher, perhaps.

Truth hurts.

Pun intended. ;p

SgFire said...

Hi Ak

Are there further growth in banks share price from here assuming there are no major crisis ahead of us?

AK71 said...

Hi SgFire,

Ah, you are asking about stock price which unlike value requires some crystal ball gazing.

We can only speculate and your guess is as good as mine.

What I can say is that during a time when Mr. Market was feeling exuberant, our local banks saw their stock prices trading at almost 2x their book values.

I think we are still some ways off but I have no idea when that might happen again.

I touched on this point in a YouTube video I produced on DBS.
When would I sell some and when would I buy more?

SgFire said...

Hi AK

Buy at 30 and sell at 36 . Roger...

AK71 said...

Hi SgFire,

Don't give me stress hor.

I where got say sell at 36?

Bu yao hai wo. -.-"

SgFire said...

I ask chatgpt. He say one

AK71 said...

Hi SgFire,

AK is safe then. ;p

Chatgpt is the real G.O.A.T.

Definitely the greatest social influencer now! :D

SgFire said...

Hi Ak

Wilmar recent result seems to have soften by a bit.

Would the dividend be still sustainable ?
Dont understand the complex commodity market.

AK71 said...

Hi SgFire,

Complex for you, complex for me also. ;p

I leave the complexity to the management which has over the years proven to be competent.

They have also shown that they are willing to share the fruits of their labor with shareholders.

Having said this, Wilmar has always been conservative when it comes to paying dividends.

It is always a relatively small fraction of their earnings.

I will let the management do their work and hope they continue to pay me for doing nothing. ;p

Reference:
Wilmar: Record dividend!


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