Stock market correction, Facebook and #SGUnited!

Happy Good Friday!

Happy public holiday!

Happy long weekend!

Of course, with the partial lockdown Singapore is in now, it really doesn't make any difference to many, if not most, people here.

It definitely does not make any difference to AK since my life is one super duper long weekend.

What?

Cannot call it a lockdown?

Must say "circuit breaker"?

OK, whatever floats your boat.

Anyway, I wasn't thinking of blogging this weekend.

Having too much fun in Neverwinter, you know.

However, I got two comments in my blog from readers and the blogging bug bit me.






First comment was about me "betting (on) another correction."

Alamak.

When did I bet there will be another correction?

I have shared my strategy a few times in recent weeks and it has always been to wait for the dust to settle.

The latest update was just a few days ago on 7 April 2020:
Buying DBS, OCBC, UOB and cheering for IREIT Global.

Readers who have been following my blog for a long time will know that I do not believe in being overly pessimistic or overly optimistic.

I believe in being pragmatic.

That's also why I always say we should stay invested but have a war chest (or two) ready and not be too extreme.

"On one end, there are people who are almost 100% in cash. I think they are doing a Chicken Little.

"On the other end, there are people who don't like to see money sitting in their bank accounts. They imagine the money is rotting away."

Source:
Sit with all that cash and do nothing?

I should not try to predict what Mr. Market will do.

However, I can certainly prepare.

What I do very much depends on what Mr. Market does.

If you have yet to read what my plan is or if you cannot remember what it is, you might want to read my last update which was the blog before this one.






Anyway, on to another reader's comment.

It is about Facebook.

More specifically, it is about my Facebook account.

Many readers will remember that Facebook did a terrible thing to AK about a year ago.

So hurtful.

If you cannot remember, read this blog:

Financially free and Facebook free!

Well, apparently, things are back to normal now.

The reader said:

"Just to let you know that your Facebook is back to normal now.

"We can see your post and everything."

OK.

Hmm.

That's nice.

What does that mean?

Facebook realised their mistake?

I don't know the reason behind their change of heart.






Anyway, I did not try to log in to my Facebook account after reading the comment.

I just didn't feel any urge to do so.

After being Facebook free for slightly more than a year, I don't miss it.

Not even a tiny bit.

If this had happened a couple of months after I became Facebook free, I would probably have gone back to using Facebook.

However, to be honest, I rather like being Facebook free now.

OK, like I said, I did not log in to Facebook to verify if Facebook restored the links to my blog both in my page as well as on my wall.

I am just blogging based on what I was told.

Readers who are not Facebook free like I am could have a look see, if you like.

Maybe, try posting a link to this blog on your Facebook page or wall and see if the link works.






It is the 4th day of the "circuit breaker" here in Singapore.

Although I know there will be irresponsible people who do not follow the rules, it still upsets me to see them.

I saw a few of them just yesterday when I went out to the nearby supermarket to buy eggs and to take away my dinner at the "kopitiam".

For example, I saw a young couple and their two children at the playground playing before they went into the supermarket.

Alamak, understand the rules or not?

They even cordoned off the playground and you still bring your children there?

What kind of message you sending to your children?

Grow up to be irresponsible like daddy and mommy?

Go supermarket must whole family go, is it?

Husband goes to supermarket and wife stays at home with the children, can or not?

Or if the wife has a louder voice, then husband stays at home with the children lah.

Use your brain!

Really lor.

Suka suka like that?

KNS!

Makes my blood boil.

Be socially responsible and hope that this "circuit breaker" will not be extended beyond a month, can or not?

We are #SGUnited.





Related post:
Largest REIT investments updated.

Coronavirus in Singapore means no milk and cheese for AK.

AK enjoys visits to the supermarkets.

See this blog, for example:

My food bill grew but my weight reduced.

Having meals at home is one way to keep cost of living low in Singapore.

It seems that more Singaporeans are latching on to this idea of having meals at home now.

However, it is probably not to save money.

Yesterday, AK went to the supermarket to get some milk and cheese.

Guess what happened?

OMG!

Never before.

It was madness.

The lines snaked all the way into unimaginable places of the supermarket for lines to form.

Now, since we are supposed to avoid crowded places, I decided that waiting in line for possibly an hour or more was probably not a good idea.

People have gone mad in Singapore.

Mad with fear of the Wuhan coronavirus.

Is the situation so deadly now?



This is taken from Ministry of Health.

We are at DORSCON Orange.

What does DORSCON stand for?


Disease Outbreak Response System Condition.


DORSCON Orange isn't all that dire as the situation is contained.

Prime Minister Lee Hsien Loong urged calm, saying Singapore had "ample supplies" and there was no need for people to stock up with items such as instant noodles or toilet paper.

"Fear can do more harm than the virus itself," he said in a statement.

Source: Reuters.





While it is understandable that the current situation is causing concern, please do not panic.

Please do not go crazy hoarding essentials.

Please do not deprive AK of milk and cheese.
------------------------
(Added at 7.45PM)

I just saw a video on shopping in a supermarket in Wuhan and would like to share it here in ASSI:







This video was shared on YouTube yesterday.

Things are pretty grim but life goes on.

Wuhan is the epicenter of the current coronavirus crisis.

If Wuhan can stay calm, so can we!
-------------------------------
PM Lee Hsien Loong's remarks on the Novel Coronavirus (nCoV) Situation in Singapore on 8 February 2020:





Related posts:
1. Wuhan coronavirus and our REIT investments.
2. Wuhan coronavirus is war and are we ready?

SG BONUS for all Singaporeans.

I received an SMS earlier today to say that I am getting a $200 red packet.

Wow! There is such a thing as a free lunch, after all!

Actually, $200 could probably buy me lunch 50 times over!

What am I talking about?

SG BONUS, of course.

Eligible Singaporeans will get a minimum of $100.

How much we get depends on our income in 2016 (YA 2017).

See the table here:

All eligible Singaporeans will be paid by end of this year.

Now, if only income in 2017 (YA 2018) was used instead, then, I would get $100 more and could include some ice cream for lunch.

I was still doing some part time work in 2016.

A short video on Budget 2018:

If you are a Singaporean and have yet to receive notification, you can use your SingPass to check online as to how much you will be getting.

Check with your SingPass: 

HERE. 

Unhappy with CPF and angry with AK. (Alamak! Why you so like that?)

Whenever I blog about the CPF, I must be prepared for some debate and it happened again last night.

I always welcome debates as long as they are civil and constructive.

Please don't be rude.

Don't tell people to get a rope and hang themselves, for example.

I am so sorry to have caused the reader so much angst. :(

Since following my blog upsets him, I will do him a big favor by blocking him.

I don't usually block or ban readers from my FB page.

If I did it to you, you must have been pretty bad.

Don't follow my blog.

Don't worry. Be happy. :D





I am glad to share an example of a civil debate with another reader here.

Reader says... 
Our CPF removes choice. 

One may suddenly need money for some valid reason eg temporary retrenchment but one will not be allowed to take out even a small sum to meet daily needs. 

Malaysia's EPF and Singapore's CPF have some good aspects. 

EPF is like a bank which allows withdrawal of money when needed but the same bank tells CPF subscriber that no money can be released whatever the need however urgent.

Would you put your hard earned cash in such a bank for it to dole out paltry sums now and then saying its looking after your money for old age?

While CPF is good , it needs a little flexibility in disbursement of funds which after all belong to the subscriber.

What use are better returns when one cannot enjoy them at will and perhaps will only be given to your nominee on your demise?






AK says...

In reply to: "Would you put your hard earned cash in such a bank for it to dole out paltry sums now and then saying its looking after your money for old age?"

Such a comparison is misleading.

I think we have to be clear what the CPF is. 

CPF isn't a bank although we can use it like one when we turn 55 if we have the FRS in the CPF-RA then.

For people who do not even have the FRS (or BRS) in their CPF accounts and wish to draw upon their CPF savings whenever they have a financial bottleneck, they need to do serious financial planning pronto.

Also, CPF LIFE is not a bank that doles out a paltry sum.

The comparison is again misleading.

Once your savings in a bank runs out, you are out but not with the CPF LIFE which pays you for life.





In reply to: "What use are better returns when one cannot enjoy them at will and perhaps will only be given to your nominee on your demise?"

It is precisely this type of thinking that leads to "Return Our CPF" rallies in Hong Lim Park.

Many people who supported the rallies had very little savings and yet they wanted to utilise their CPF (retirement) savings "to send children to study overseas", "to go on a holiday", "to go on a pilgrimage" etc.

The higher interest rates in our CPF-RA is to help us better fund our retirement and not to be depleted at a whim which is what many would do if given a choice.





See the latest comments in the following blogs:
1. Retirement funding assurance for average investors.
2. When to get a private annuity.
3. Food inflation in Singapore and Malaysia.
4. We do better at managing our savings than CPF does.

Related posts:
1. Crazy Rich Asians or Pragmatic Rich Asians?
2. Use CPF as a savings account.

Crazy Rich Asians or Pragmatic Rich Asians?

I know my blog has some reach beyond the shores of our tiny island nation of Singapore.

Remember how I received a not too glamorous award from a forum in China recently?

See:
Once upon a time in China, Weibo says 铁公鸡AK 还好没结婚!






I would like to share a conversation I had with a reader from Hong Kong some time ago:

Reader says...
Hope you don't mind a guy from H.K. dropping a line.

Indeed I used to stay in Singapore for a few years back 20 years ago.

As far as I know Singaporeans at that time liked luxury items, and home as well of course.

It is kind of having face, isn't it?

Glad to find AK's blog which share a different view from the majority (Forgive me, if this sounds offensive, on my poor English).

Personally I do agree with your mentality but I think You would appear a bit odd in the main stream?






AK says...
I think having face is more important in Asian societies compared to western societies.

I could be wrong but this is from my own observation and Hong Kong is probably the same as Singapore in this respect.

Me? 

I am crazy. ;p

(But not a Crazy Rich Asian hor.)







Reader says...
You are right that face matters in Asian community so does it in H.K. as well.

I am not sure if I still understand Singaporean correctly now but as far as Honkies, I think they are more pragmatic than their counterparts.

I don't say they don't care face but when it comes to money, they prefer money more than face.

People on the street don't put many luxury branded things on them.

I think they like the (saved) money better.





I did find that you guys discussed a lot on financial freedom but don't you guys have the CPF which is supposed to support the post retirement living?

Is it not adequate for the purpose or you guys just want a better than standard living, apart from the possible and unpredictable retrenchment?

Guys, here in H.K. also has a growing concern about financial freedom because our MPF, a copycat of CPF but much less effective, is just a joke.

We really need to be on our own feet after retirement.

No la, you are not crazy at all but just pragmatic and rational.






AK says...
Thank goodness we have the CPF! :)

However, not every CPF member knows how to make good use of it.

For those who know, who are able and willing to, they could have a million dollars in their CPF by the time they retire from active employment.

Enough or not?

That depends on the individual. ;)

A problem with our CPF system is that the government allows members to use their CPF savings for too many things and people forget the primary purpose of the CPF.

More and more CPF members who have used their CPF savings to pay for their homes might find out as they grow older that they might not have enough CPF savings to fund their retirement.






Is it true that Hong Kong people are more pragmatic than Singaporeans?

Do they care more about having money than having face?

I don't know but I know that housing cost is through the roof in Hong Kong and I know that unlike our CPF system, their MPF does not provide a relatively reasonable risk free return.

So, perhaps, this is why they are more worried than Singaporeans about their personal financial health.





I was once told that if we can climb the corporate ladder in Hong Kong successfully, we can do well anywhere in the world because it is that stressful.

I am very fortunate to be a Singaporean and this is one blessing I count all the time.

My fellow Singaporeans, we might not be Crazy Rich Asians but if we do the right things, we will be Pragmatic Rich Asians.

If AK can do it, so can you!






Related posts:
1. If we are not rich, don't act rich.
2. Almost 55, worried about CPF.
3. FRS by age 35 and $1M in CPF.

Could we be financially free by investing in Singapore only? (PART 2)

Reader says...
Notice that you only has local sg shares for income. Any reasons why not consider overseas shares to avoid the standard "home bias" portfolio allocation?

AK says...
Singapore has ample investment opportunities for the income investor in me.

This is partly also because I am not managing a large multi-million dollar portfolio.

I am not so rich. 😉

And it helps that I am not too greedy. 😛






Reader says...
But does it mean a lack of diversification in non sg assets?


AK says...
If you want geographical diversification, you can always put money in counters which have overseas businesses or assets. 

For a while, a big chunk of my money was actually in Japan if you remember Saizen REIT and Croesus Retail Trust, for examples. 

Even today, my portfolio has exposure to overseas investments if you look at my top investments. 😉

Reader says...
I see. First reit 🙂


AK says...
Even SingTel is not a 100% Singaporean 😉
Nor ComfortDelgro 😛


Reader says...
70% overseas singtel


AK says...
I try to keep things simple for my simple brain 😛





Related post
1. Could we be financially free by investing in Singapore only? (PART 1)

Healthy cash flow is most important.

Reader says:

Time flies and I'm glad to have taken your advise previously to do well in studies. 

I am currently reaping what I've sow for my study & career.

Good news is that i have gotten a job that pay me well compared to my first job 3 years ago; i got close to 50% pay increment!

However, my life had been quite a drama due to conflicts at home. 


So, i end up moving out, renting a room to keep myself in peace. 





With that, expenses increased and i am having difficulty sustaining it.

As i am single (28 years old) and I have to wait to reach 35years old to be eligible for a hdb bto 2 room flat (considering the waiting time for BTO or higher price of resale flat). 

I am currently thinking of getting private property (studio) which if possible, i would like to save enough downpayment before committing to own one.

i calcluated at least 3-4 years of saving to reach that goal. 

Do share with me your opinions too to handle my current situation






AK says:

Whether to buy or rent a property, especially if buying a property is going to strain your finances, the Rule of 15 helps you to stay grounded.

http://singaporeanstocksinvestor.blogspot.sg/2017/05/to-rent-or-to-buy-rule-of-15-revisited.html

Think carefully what is the financially most prudent thing to do when it comes to housing for you now.





Reader says:

That is a interesting rule to use as a guide, but does other factors affect the outcome if we factor in the inflation, demand & supply of housing and uncertainty of the house value in future?


AK says:

It is about cash flow.

How can we tell what the demand and supply situation is going to be like in future?

The Japanese didn't know they were going to suffer 2 decades of decline in housing prices.

The Americans didn't know they were going to suffer a huge crash in housing prices that wiped out 10 years worth of wealth.

If cash flow is going to be an issue, forcing ourselves into buying a private property because we fear prices are going up higher in future is silly.

Too many people have too much of their wealth stuck in their homes. 

This is why so many people in a wealthy nation like Singapore must work till the day they die.





Reader says:
I see, thats is a very good insight for me to learn. 
i trust your experience in this.

AK says:
Alamak. 

Don't trust me. 

I don't have a crystal ball. 

I cannot see what the future is going to be like.

I am just saying that we should stay prudent especially if cash flow is tight.

If you have plenty of money lying around and cash flow is not an issue, then, if you want to take a bet on property, go ahead.

Having healthy cash flow is always important.





Related posts:
1. Property market.
2. Slaving to stay in a condominium.
If to stay in a condominium, we are forced to live like paupers, the price is too high.

Shoebox apartments in Singapore need planters?

Reader:
I have been thinking of getting a shoebox apartment for a while and your blogs on tiny living resonate with me. I have been looking around and I have two options now. Both are about the same size but one of them have a planter that is about 3 meters long by 1 meter wide while the other one does not have a planter nor balcony. I know you have a planter in your apartment and wonder if you would have preferred more indoor space instead.

AK:
Welcome to tiny living! To be honest, before I bought this place, I thought planters and balconies were a waste of space, especially in a tiny apartment.

Hey, less than 500 square feet of space and almost 10% of that that is outside (and the percentage could be even higher for some other projects which is just the developers taking buyers for a ride, I feel)?

Alamak. Singapore so hot and humid. I rather switch on the AC and stay indoors, right?

Anyway, that was before I actually moved in.

After moving in, I realised just how important that outdoor space is.

From a pragmatic angle, it gives me a space to dry my laundry. I get a folding rack and place it in the planter when I need it. After use, rack gets folded flat and stored indoors. 

I could use the dryer function in my washer/dryer but that consumes a lot of electricity and it feels like evaporating money together with the moisture. Don't like that.

From a recreational angle, having some outdoor space is a good idea especially if you are at home a lot like I am. My planter gives me a place to do some gardening and to spend some time outside without leaving home especially on breezier and cooler evenings. 

I have to say that it helps that I am on a high floor and unblocked from all angles. If I could clearly look into my neighbour's home from my outdoor space, I am less likely to use the space. If we can see other people means other people can see us too.

OMG!

You have to remember what a planter in a condo means here. URA wants us to help green Singapore vertically and that is what planters are for. 

Installing some decking over the planter that makes it the same height as the floor of the indoor space is illegal. I know many do it but I don't want to do anything illegal. 

My solution?

I got these from IKEA and lay them on the floor of the planter. It probably costs 5% of what an illegal decking job would have cost too. Cheap and practical just like me. 

Bad AK! Bad AK!

Anyway, whether having a planter makes sense or not for a tiny apartment probably depends on your lifestyle. 

If you go out a lot and are hardly home, maybe, it is not as essential.

Related posts:
1. Shoebox apartment living.
2. Saving on outdoor lights.

What to do if we don't trust the CPF system?

...




I have been sharing quite a bit of stuff on Facebook regarding the CPF in recent days. 

Nothing new, really. 

They are mostly conversations with readers on stuff I have blogged about.




I shared how I grew my CPF savings and also why it is an important part of my overall retirement funding strategy. 

I have also shared my numbers to exemplify the magic of compound interest.





Of course, we know that there are people who do not believe in the CPF. 

This is nothing new.

I am constantly amused by the reasons put forth as to why we should not trust the CPF system.

People are free to trust or not to trust. 

Hey, I am not dogmatic. 

Don't believe me? 

OK, you happy can liao.

What do we do as investors when trust is lacking? 

Avoid investing any money.

For example, I no longer invest in S-chips although some of them might have fantastic looking numbers.

I used to. 




Remember China Minzhong?

I simply don't know if their numbers are bona fide.

Don't trust the CPF? 

Don't top up. 

Don't make voluntary contributions.

Simple.




Wait a minute.

How do I know if the companies which I do invest in have bona fide numbers? 

What if their books are cooked too?

Alamak. 

Stress!




Is our country financially sound? 

Is the government going to default on its obligations?

Alamak. 

Don't ask me lah. 

Stress!





Hey, do you believe in feng shui? 

The late Mr. Lee was asked why did he want his house demolished? 

AK is trying to change topic, right? 

Shhh...





What? 

You really want to know? 

These posts might interest you then:
1. Do better than the CPF?
2. Worried about retirement adequacy in the right way?

Say VES and make $35,000 selling my car?

There was the CEVS and, now, we have the VES.

Lucky for my readers, ASSI is always just ASSI.

Anyway, the CEVS stands for Carbon Emission-Based Vehicle Scheme. Basically, cars with lower carbon emission were given rebates and I benefitted from this scheme when I bought a diesel car about a year ago. It reduced the price tag of my car by more than 10% which was a big deal.

In January this year, when the government announced that they were looking into the real environmental cost of diesel cars, I expected them to disallow diesel cars eventually. It would take many years to achieve this but, in Singapore, if the government wants to do something, we better believe it will be implemented.

So, to discourage higher consumption of diesel, last month, we saw an additional tax on diesel. 10c per litre. That is a few percentage points higher in price but still about 30% cheaper than RON95 petrol. It was 40% cheaper but 30% cheaper is still a lot cheaper. Diesel cars still make more sense for the cost conscious car owner.

Negligible impact.


I was also pleasantly surprised that the government decided to reduce the special tax on diesel cars. I am paying about $1,200 in annual road tax for my diesel car whereas I was paying $700 for my petrol car, both are 1.5 litre cars. 

Apparently, I will be paying less in annual road tax in future. I guess I am lucky that taxis make up the bulk of the diesel car population in Singapore and the government has quite a few (very good) reasons not to rock the boat too much.

Zero impact.

Now, what is the VES? This is the new Vehicular Emission Scheme and will stay in effect till end of 2019. Vehicles will enjoy rebates or suffer surcharges based not only on carbon dioxide emission but nitrogen oxide and particulate emissions as well.

So, diesel cars, with their lower carbon dioxide emission which enjoyed rebates in the past will suffer surcharges. Now, this, in my opinion, will really discourage diesel car ownership. It will do what the 10c per litre increase in diesel price cannot do.

If I were to buy my diesel car under the VES, I would be looking at a price tag that is some 15% higher whereas it was 10% lower with the CEVS before!

Earth shattering impact!

10%? 15%? No big deal?

OK. Let's put it in dollar terms.

Imagine a $140,000 price tag receiving a CEVS rebate of $15,000 which brings the price down to $125,000.

Now, imagine the same car receiving a VES surcharge of $20,000 which brings the price up to $160,000!

We are looking at a $35,000 difference!

For most middle income households, that is a big deal.


I really enjoy driving my diesel car and I am lucky I paid a lot less for it too.

Now, I wonder if I can sell my car for a higher price. Yes, I know. Bad AK! Bad AK!

(Oh, I hope you enjoyed the 3 video clips too. I laughed a lot and my jaw also dropped many times. Think I need to see a doctor liao.)

Related post:
5 reasons to buy a diesel car.

References:
1. Diesel vehicle taxes.
2. Vehicular Emission Scheme.