Have $10K? What to do? Invest or save?

I blog about the importance of having an emergency fund from time to time.

More importantly, we should have an adequate emergency fund.

However, there is another fund that I don't blog about as often.

The last time I blogged about it could have been many years ago.

So, unless you have been following my blogs for many years, you might not have heard of it.

I called it "convenience cash."

I like to keep cash at home which is able to cover around two months worth of routine expenses.

This is because in case I am unable to withdraw cash from my bank accounts for an extended period of time for some reason, I have some cash on hand.

Of course, things have changed a lot in the last 10 years and, especially in the last 2, so many things have gone digital.

So, is there still a need to keep so much "convenience cash?"

Now, I suppose I have to say I still do it really because I am mental.

Anyway, the amount of "convenience cash" I have at home, without me knowing, has grown to be quite a sizeable amount.

See my "convenience cash" in 2014:

Convenience cash.
 

I don't like going to the banks, if I can help it.

So, all the birthday and CNY red packets I received from family members and also money people paid me whenever I helped them buy stuff just got stashed in a drawer.

Today, I opened that said drawer to "deposit" my CNY red packets and I just thought of taking a tally.

OMG!

I have more than $10K in cash stashed away.

With interest rates so high now, I could possibly get $400 in interest payment if I were to place the money in a 1 year fixed deposit which pays 4% p.a.

$400 can sustain my lifestyle for a week easily!

I know OCBC is offering 4.08% p.a. for 8 months FD but they need a minimum of $20K placement.

Not enough.

CIMB only needs a minimum of $10K for their FD promotion.

So, I checked CIMB for the latest rates, being the first day of a new month.

OMG!

CIMB's promo rates have reduced drastically!

6 months FD now pays 3.7% p.a. instead of 4% p.a.

12 months FD now pays 3.5% p.a. instead of 4.2% p.a.

Sadness.

How like that?

What is a retiree like me to do?

I decided to "tikam" 6 months T-bill instead.

Hope to get a cut-off yield of at least 3.9% p.a.

Will try $5K for the T-bill closing today and another $5K for the T-bill closing on the 15th.

If you are new to my blog and wondering if you should do the same, please take note that I am doing this because I already have a significant exposure to equities.

Don't anyhow follow social media influencers.

(Hint, hint, nudge, nudge, wink, wink.)

See:

My largest investments (4Q 2022.)

I have always said that having a meaningful exposure to fixed income is a good idea because it reduces risk and volatility in our portfolio.

However, fixed income paid relatively poorly until recently.

Fortunately, in Singapore, we have the CPF which, to me, is akin to fixed income and it offers reasonably attractive interest rates. 

So, the CPF was my preferred tool to maintain a meaningful exposure to bonds until recently.

This year is the first year I am not making voluntary contributions to my CPF account.

Money went to Singapore Savings Bonds in 4Q 2022 as they pay better than the CPF and do the same thing the CPF does for me.

See:

SSB or CPF? No brainer?

Oh dear, I am beginning to ramble.

This is supposed to be a quick blog about my money counting adventure at home and what I plan to do with the money.

Yes, AK is an adventurer and not only in Neverwinter and Teyvat!

Anyway, I should stop.

If you want to know what I think we should do before we start investing our money, I have many related blogs on the matter.

You might want to start with this blog:

Graduating soon? First steps.

If you are more advanced, read these blogs:

Investing peace of mind.

Buy bonds but which ones?

Gambatte!

My latest YouTube video on CPF:

No T-bills next month. New AA REIT video.

I shared in my last blog that my plan was to keep buying 6 months T-bills every month with cash on hand till April this year.

Why April?

That's when the T-bills I bought in October last year mature.

Then, I would just recycle money from each maturing T-bill into new ones.

Another perpetual passive income generator for me or so I thought?

Well, there is a change of plan.

Yes, it seems like the plan to buy T-bills in February has been sunk.

How come like that?

To put it simply, I have run out of money.

Yes, doesn't sound too auspicious to say something like this during Chinese New Year but it is the truth.

In my most recent blog, I shared the promotion code for DBS 5 months 3.9% p.a. fixed deposit.

Minimum $20K deposit.

The promotion code just popped when I logged into the DBS phone app.

As an earlier promotion expired very quickly before, I was very fast to share the latest promotion code.

I hope it works for everyone.

I took advantage of the promotion too, of course.

That promotion got me curious and I decided to check UOB and OCBC for fixed deposit promotions too.

OMG!

OCBC is offering 4.08% p.a. for an 8 months fixed deposit!

Minimum $20K deposit.

This is only for OCBC 360 account holders.

What to do?

I couldn't resist it.

With this latest fixed deposit placement, I don't have much cash on hand left.

So, no T-bills next month in February for me.

This is probably not a bad thing as the yield for T-bills has been on the decline.

To be fair, 3.87% p.a. for a one year T-bill isn't terrible if we are using CPF-OA money.

However, if we are using cash, fixed deposits with higher interest rates are better options.

I said in my last blog that I was aware that CIMB offers 4% p.a. for a 6 months fixed deposit.

However, I only consider DBS, OCBC and UOB to be as relatively risk free as T-bills.

Having said this, I do have many fixed deposits with CIMB but I am not too comfortable with placing many more.

Just talking to myself, as usual, of course.

Remember, AK is mental.

Huat ah!

Reference:
CPF-OA in T-bill. DBS 3.9% p.a. 5 months FD promo code.
New YouTube video on AA REIT:

F.I.R.E. children, my mom and CNY secret.

I don't know if this qualifies as a Chinese New Year tradition. 

The elders in the extended family would almost always ask the younger ones who are still single when are they getting married?

Those who are married would be smiling smugly until the elders look at them and ask when are they having children? 

Or if they have children, when are they having another one?

It seems that the elders are always stuck in a time warp when getting married means becoming a grown up and having children is a form of filial piety.

Well, specifically, having sons is a form of filial piety.

AK had to suffer such a "tradition" too for many years but not so much in recent years.

How come like that?

Why like that?

I also don't know why or I didn't know why until this year.

For many years now, I have been very thankful that I could peacefully enjoy the yummy pineapple tarts baked by my sister.

Very harmonious which meant eating even more.

Alamak.

Always eat too many pineapple tarts and almond cookies during Chinese New Year.

Anyway, I digress.

So, how did this harmonious situation come about?

What is the secret?

AK found out in this year's Chinese New Year chatter.

Mom: 
Must take care of our health lah. Old already.

Relative:
Ya lah. Cannot suka suka eat this, eat that.

Mom:
Later stay hospital long long like second uncle a few years ago. Did you visit?

Relative:
I visited and you know he asked me if my ah boy was married? When I told him my ah boy wants to stay single, he told me I very good life. Got many stories like that.

Mom:
Aiyoh. Then, the stories I heard must be true lah. When I saw him, he told me he gained a daughter in law but lost a son. Worth or not? Not worth lah.

Relative:
This means you also very good life!

The chat was in Mandarin and, somehow, translated into English, it isn't as punchy but you get the idea.

My dad who was sitting next to me on the sofa, like me, heard everything, and when I looked at him meaningfully, he nodded his head emphatically.

I got to blow my own trumpet then.

That was the best thing this Chinese New Year.

Correction, that was the next best thing. 

The best thing was the tub of pineapple tarts my sister made!

I have many blogs on the topics of financial freedom and passive income. 

I also have quite a number of blogs on children and how we should not think of them as assets.

Assets should generate wealth for us or at least they should have some value (preferably growing) which could be unlocked at a later date.

I don't think children should even be treated as depreciating assets like cars.

Why am I saying this?

Well, there is no guarantee that children will become assets but they are guaranteed to be wealth destructive at least for the first twenty to twenty five years of their lives.

At least this is usually the case in more modern parts of the world which are highly civilized like Singapore.

So, I have suggested before to think of having children as having a hobby.

A hobby brings us joy but does not generate wealth, in theory anyway.

For those who really must think of their children as investments, the best thing to do is probably to think of children as a speculative component of our investment portfolio.

As with all speculative components in investments, we should make sure they are relatively small in size.

So, if children grew up to become passive income generators, it is a bonus.

If they did not, then, it is a component we can afford to write off as we would have sized our speculative positions appropriately.

Our investment portfolio should be robust without having to rely on the speculative components within.

We should not include our children as possible future passive income generators in our plan for F.I.R.E.

As usual, AK is just talking to himself.

If you were eavesdropping, I hope it was good entertainment.

Huat ah!

References:
1. Have children and a comfortable retirement.
2. Children and 钱最重要的!

F.I.R.E. lean or shaky? AK still worried? Confession.

Change is the real constant in life, many would say.

Back in June 2020, I published a blog on how worried I was. 

Why was I worried?

Dividends from my investments during the COVID-19 pandemic reduced pretty significantly.

The central banks were also lowering interest rates again in order to keep their economies alive. 

That meant even lower interest income for my fixed deposits.

It was a double whammy. 

Without an earned income, the double whammy was pretty impactful for me.

Fortunately, being a worrier, I built buffers before retiring early so many years ago.

I had an emergency fund which I was prepared to dip into if things got even worse in the same way our country dipped into our reserves during the pandemic.

It is imperative to hold a buffer against possible crises.

Our country has reserves and we should have emergency funds.

Readers who have been following my blogs for some time know what I say about regular folks like us keeping our needs simple and our wants few if we want to achieve financial freedom earlier.

It means to live well below our means.

There are people who then retire early once their passive income is able to cover their basic necessities in life with very little or no room for error.

They call it lean F.I.R.E.

I think it should be called shaky F.I.R.E.

OK, maybe I am just mental but I like to have buffers in case things go wrong.

If I didn't have buffers, with reduced dividends and interest income during the COVID-19 pandemic, I might have had to look for a job in a very difficult environment.

Just thinking of the possibility is giving me an anxiety attack.

Yes, PTSD moment right there.

What is the opposite of lean F.I.R.E. then?

Fat F.I.R.E. sounds unhealthy but maybe that is what it is.

While lean F.I.R.E. is about having just enough passive income to cover basic necessities in life, I suppose fat F.I.R.E. means being able to afford some luxuries as well.

There is a limit to how tight lean F.I.R.E. can be while the sky is the limit for fat F.I.R.E.

If I am a very sensible person, I would live like I am on lean or shaky F.I.R.E. when I have already achieved fat F.I.R.E.

This is because we don't know what we don't know.

However, I am not very sensible, so, I live in a shoebox condominium and I own a car, both of which are so expensive in Singapore.

Hence, when things took a turn for the worse like what happened during the COVID-19 pandemic, I worried as I also wished to provide my parents with greater financial support.

Don't be like AK.

Be sensible, very sensible.

Anyway, two and a half years later, how have things changed?

Things have changed a lot.

I have made changes to my investment portfolio in the last two and a half years.

The aim was to have a more resilient investment portfolio.

Passive income received from my investment portfolio has grown significantly, year on year.

Inflation has shot up and it has remained elevated.

Interest rates have increased rapidly as central banks try to tame inflation.

Cost of living crisis has become a trending topic for some time now.

However, this development is good for the financially prudent people who have been living well below their means.

Inflation affects them too but not by very much as they are used to keeping their needs simple and their wants few.

Higher interest rate is good for them too as they have ample savings in the form of a meaningful emergency fund and also a float.

Interest income is not a negligible sum anymore.

I see my interest income increasing many folds. 

In fact, the percentage increase is very much higher when compared to the increase in dividends and distributions received from my investment portfolio, year on year.

So, is AK worried no more?

I shared in a recent blog that we could see a recession this year and with inflation staying high, we could see stagflation.

So, people like AK might be quite comfortable now but don't be complacent.

Give ourselves a little treat from time to time but don't overdo the "revenge spending."

Remember, swans are not always white in color.

It is safer to stay worried!

Wishing all readers good health and abundant wealth in an energetic Year of the Rabbit!

Essential reading:

Survivability and opportunity...
Recently published:
Using CPF-OA for 4% T-bills...

References:
1. Worried as dividends and interest income reduced.
2. Largest investments updated (4Q 2022.)
3. Full year 2022 passive income.

4Q 2022 passive income: More resilient portfolio.

AK did not get to be lazy in 4Q 2022 as reallocation of resources continued in the quarter.

2022 has turned out to be quite a demanding year.

In equities, I reduced exposure to a plethora of stocks to raise funds to increase exposure to the local banking sector.

This is consistent with what I shared in a blog published in the middle of October.

See:

DBS, OCBC and UOB at 40% of portfolio.

The banks are in a good place to enjoy a strong tailwind provided by rising interest rates.

Even in a recession, the banks should continue to bring home the bacon as they are well capitalized and should have no problem paying dividends.

Nothing was sacrosanct in the reallocation exercise and several very small positions in my portfolio were closed down while some larger positions were reduced in size.

Apart from OCBC and UOB, I could not resist increasing the size of my investment in IREIT Global as the fundamentals remain sound and the REIT's unit price hit what I felt to be distressed levels.

It would be impossible to buy any asset owned by IREIT Global at about 40% discount to valuation but we could if we bought some of IREIT Global from mid 3Q to 4Q 2022.

To be fair, that 40% discount to valuation could reduce somewhat as the REIT is going to take some time to backfill the space at Darmstadt vacated by Deutsche Telekom.

The valuation of that particular property could come under pressure, therefore.

However, if we are investing in properties for the longer term and we should be, it isn't a tragedy that it might take some time to see results as the space will be leased out eventually.

IREIT Global has the most defensive financials I can find amongst the REITs which I own while offering a distribution yield of around 8%.

With the accumulation of IREIT Global in 4Q 2022, it is my largest investment in the S-REIT universe today.

See:
IREIT Global: Short term pain.

I also added to my investment in Wilmar International as the business became more profitable in spite of a challenging environment.

In the worst case scenario where we see stagflation, I have an inkling that Wilmar International could outperform as the world faces a food crisis.

I nibbled at LION-OCBC Hang Seng Tech ETF as it overshot the low formed on 15 March 2022 but like I said in an earlier blog, it would likely be the last time I added to my position in the ETF as I am not too keen on trading regularly in order to make money.

Too lazy.

I did subsequently reduce exposure when the unit price rebounded in November. 

I reduced exposure again in early December as the ETF's unit price rose to test resistance provided by the descending 200 days moving average which was approximately at 71c:

See:
Hang Seng tech ETF: BUY or SELL?

Those couple of trades produced a capital gain of around 23% and reminded me of why I spent so much time trading the stock market many years ago.

Some readers might remember that I shared in my blog as well as during one or two "Evening with AK and friends" that I made around half a million dollars in my adventures as a stock trader many years ago.

Trading stocks could be financially more rewarding than investing for income but it requires more activity and some knowledge of technical analysis.

I have decided to become more laid back in recent years to spend time on other things in life.

Anyway, the average price for my remaining position in the ETF is probably low enough to make Chinese tech stocks look cheap even to value investors.

A simple reversion to mean would result in a capital gain for me.

I do not need to see euphoria and the ridiculously high valuations when the market was sloshing with almost free money in order to have a good result here.

However, it is a tiny position in my portfolio and it would not move the needle much.

In bonds, I have put money earmarked for contribution to my CPF account into Singapore Savings Bonds (SSBs) while money from maturing fixed deposits went into Singapore Treasury Bills as yields of these government bonds reached levels which I found to be more attractive.

Blogs on SSBs and Singapore Treasury Bills:
1. SSB 2.44x oversubscribed (27 Oct.)
2. 4.19% yield on T-bill!(28 Oct.)
3. 3.47% 10 yr average yield! (1 Nov.)
4. 3.47% p.a. fully allotted (28 Nov.)
5. 4.4% yield on T-bill!(9 Dec.)
6. 4.28% 6 mths T-bill. (21 Dec.)
7. SSB: Mission accomplished.

The changes made in 4Q 2022 to my investment portfolio is consistent with what I have said many times before and that is not to be overly optimistic nor overly pessimistic but to stay pragmatic.

Having a percentage of my portfolio in fixed income like SSBs and Treasury Bills now while staying invested in equities which I feel will likely outperform fixed income (including my CPF savings) in the longer term should result in a more resilient investment portfolio.

If I feel that equities would outperform in the longer term, why am I still putting money in fixed income?

It is about having peace of mind as an investor.

Fixed income instruments are important for investors who cannot afford or at least feel that they cannot afford to be too adventurous as fixed income helps in reducing the volatility in our portfolio.

Not everyone is able to stomach greater volatility, whether it is due to a lack of financial ability or  mental strength to do so.

Now that yields are reasonably attractive, they also help to reduce the cost of insurance that is the opportunity cost of not getting possibly higher returns.

There were times when I was very adventurous as an investor and I was fortunate to be well rewarded many times but I also suffered losses sometime.

The emotional roller coaster that came with being more adventurous wasn't a lot of fun either.

Anxiety and depression are only interesting topics to psychiatrists.

See:
1. Peace of mind as an investor.

2. When to worry? What to do?

Having said this, I am also partial to fixed deposits which offer relatively high interest rates as I continue to maintain a meaningful cash position which is mostly my emergency fund and float.

This cash position has helped to keep me sane during bad times and it still does.

What about the opportunity cost of not being invested?

Ahem.

Do you believe in insurance?

I do.

I know that some people don't.

The cost of insurance is worth it, in my opinion.

See:
4% p.a. 6 months fixed deposit.

What about my war chest?

There isn't much left in my war chest as the funds have been substantially deployed.

Well, regular readers would have an inkling that there wasn't much in my war chest to begin with as I lack an earned income and consume most of my passive income.

See:
Inflation, passive income and budget.

Sadness.

Even the government takes pity on me and gives me money every year.

Anyway, enough of self pity.

So, how much passive income did my portfolio generate in 4Q 2022?

S$ 25,331.81

It is a relatively small sum compared to passive income in 3Q 2022.

However, to put things in perspective, 4Q 2021's passive income was:

S$ 21,283.82

So, year on year, 4Q 2022's passive income came in 19% higher.

Looks more impressive percentage wise but I get it that the dollar value increase is smaller compared to 3Q 2022 which saw a smaller percentage increase at less than 10% improvement, year on year.

4Q 2022 passive income includes income received from 6 months Treasury Bills which I started buying only in October.

This new passive income component is a relatively small trickle but every little bit helps.

My passive income for the whole of 2022 is:

S$205,999.73

This is almost 20% higher when compared with S$171,854.30 generated in 2021.

Average passive income per month in 2022 was about:

S$17,166 per month.

Can't really complain.

I am contented.

Now, I ask an important question.

What is 2023 going to be like?

It is more likely than not that recession is coming to many parts of the world even as we get used to the idea that higher inflation is going to stay with us for some time to come.

So, with inflation high and economic growth evaporating thanks in part to rapidly rising interest rates, we could also see stagflation.

Therefore, I would be quite happy if my passive income in 2023 is similar to 2022, give or take a few percentage points. 

Not going to raise the bar as I could be disappointed.

What else am I telling myself?

As an investor for income, I cannot dictate how much my companies should pay me but I can certainly tell myself how to spend my money.

What to do?

Will have to tighten my belt.

Buckle up for a bumpy ride.

Don't throw caution to the wind.

Hold on tight to our emergency funds for dear life!

See:
50% do not have enough savings!

I continue to remind myself that fixed income investments are more attractive than before. 

Having a meaningful percentage of risk free and volatility free T-bills and SSBs in my portfolio is not a bad idea.

The CPF might not be as sexy a "fixed income" instrument but it isn't wrong to keep thinking of it as an investment grade bond with a significant annuity angle.

The CPF still works as a risk free and volatility free investment grade sovereign bond which helps to provide a greater degree of certainty when it comes to retirement funding.

These fixed income options help to form the large base of my investment pyramid.

See:
Motivations and methods in investing.

I also remind myself the importance of staying invested in bona fide income generating businesses which generate meaningful and sustainable income for us.

Getting rich slowly isn't as sexy as getting rich quickly but like I said before, the journey to financial freedom is not a race: HERE.

In summary, for regular folks, don't be too adventurous as having strong and reliable cashflow is important. 

To be clear, it has always been important but with heightened rising costs in so many forms and much greater economic uncertainty, it is probably more important than ever.

Focusing on our portfolio's ability to generate income and not our portfolio's market value (now or in the future) might not be a bad idea.

Remember, I prefaced these highlighted paragraphs with the words "for regular folks."

If you are a very rich or "jin satki" person, it might not apply to you.

If you are not very rich or "jin satki" but act like you are, good luck to you.

Very rich people can take a few hard knocks and still survive.

For example, they could lose a few hundred thousand dollars or more in Tesla or Alibaba but still stay rich.

Those who are not very rich might find themselves in financial distress especially if they had borrowed money to do the same.

Peace of mind is priceless.

2023 is likely to be a relatively difficult year for most regular folks.

Stiff upper lip and stay the course.

As long as we are moving in the right direction, we should make incremental improvement and move towards financial freedom. 

Discipline and patience will be rewarded.

All in good time.

Happy New Year.

References:

Growing passive income: Equities, CPF and bonds.

3Q 2022 passive income: Stunned!

4Q 2021 passive income: Don't lose hope!

Park emergency fund in fixed deposits or SSBs?

A reader asked if it is better to put our emergency funds in Singapore Dollar fixed deposits or in Singapore Savings Bonds?

Read the very thoughtful comment from the reader: HERE.

This is my reply:

For the longest time, I favored fixed deposits over Singapore Savings Bonds for my emergency fund.

This is largely because I am able to get my hands on the money immediately upon breaking a fixed deposit. 

On the other hand, as you have rightly pointed out, we have to wait for a month before we can get our money in the case of Singapore Savings Bonds if we were to make early redemptions. 

In an emergency, I probably need the money in a hurry. 

Waiting a month before I could get the money might be a luxury I could not afford. 

Even now, I am using the Singapore Savings Bond only as an alternative for money which I had planned to make voluntary contributions to my CPF account with. 

10 years is relatively long term and mimics what the CPF does for me and at least for people who are 45 years old or older.

Why do I say this?

From an interest income perspective, the Singapore Savings Bond makes more sense now than voluntary contribution to our CPF accounts.

CPF or Singapore Savings Bonds? It is a no brainer!

In using fixed deposits to store my emergency fund, I make sure that each fixed deposit is relatively small with sums of between $10K to $25K each. 

This is because if I were to break a smaller fixed deposit, I would lose less interest income compared to breaking a larger fixed deposit. 

It is a reason why fixed deposit promotions like the recent one from UOB which requires a minimum sum of $50K in fresh funds to qualify are not viable for my emergency fund. 

This is only my belief, of course, which applies to my own circumstances and, maybe, eccentricities.

The following blog is probably most relevant to this discussion and you might want to read it if you have not done so before: 

Singapore Savings Bond: Good or not? 

Here are more references: 

1. A special chest for emergency fund 

2. Why fixed deposits over structured deposits?

Happy emergency fund building!

Recently published:
SSBs, T-bills, Fed up!

4% p.a. 6 months fixed deposit! T-bill please give way.

One week ago, I blogged about the 6 months T-bill with a yield of 3.9% p.a.

I said that I was disappointed.

However, I was not massively disappointed as 3.9% was still higher than the promotional fixed deposit rates from DBS, UOB and OCBC for a 6 months tenor.

Today, I woke up to a 4% p.a. promotional fixed deposit interest rate for a 6 months tenor!

Granted that it is not from DBS, UOB or OCBC but from CIMB but it is still exciting for me since I have a relationship with CIMB and can place fixed deposits easily using the phone app without having to visit the bank.

Yes, I don't particularly enjoy visiting banks.

Some readers might remember that I said I was leaning towards fixed deposits as long as their promotional interest rates remained relatively high after the last T-bill auction.

Well, 4% p.a. for a 6 months tenor fixed deposit has really done this for me.

Same interest rate as the CPF-SA albeit short term with reinvestment risk as is the case with all fixed deposits (and also T-bills) is good enough for me.

Still remember how the queue lasted for hours all for a 2.6% p.a. promotional fixed deposit interest rate on a 12 months tenor at UOB in September?

Tsk tsk.

Singaporeans so kiasu.

AK is not like that.

AK is very cool.

You believe me or not?

So, Mr. T-bill, please give way to 4% p.a. 6 months fixed deposit.

Thank you very much.

Oh, for those who joined the queue in September for 2.6% p.a. 12 months fixed deposit, CIMB offers 4.2% p.a. for the same tenor now, in case you are interested.

Cheong ah!

Recently published:
1. Half don't have enough savings.
2. SSB: Fully allotted.
Related post:
6 months T-bill auction. My view.

Almost half don't have enough savings for an emergency.

The Straits Times has an article titled "Close to half of Singaporeans don't have enough savings to tide through an emergency."

Although I know that there are people who do not believe in having an emergency fund and although I know that many do not have an emergency fund or a big enough emergency fund, this is still pretty mind boggling.

If the article is true, one in two Singaporeans are at risk of crashing hard financially in an emergency.

I know there are some "investment gurus" who tell people that there is no need for an emergency fund and that we can always borrow money from the banks.

I think these "gurus" are simply evil.

They shouldn't going around peddling such dangerous ideas which might work for them but not for ordinary people.

They should know that everyone's circumstances are different or maybe they know but they simply don't care.

Why do I say that?

Banks are fair weather friends.

Banks would lend money to people who already have money.

When we are really in distress and have nothing of value, try borrowing money from the banks and see what they say.

When we really need to borrow money, we are probably scrapping the bottom of the barrel.

There is most probably nothing left but despair which is worth nothing.

These "gurus" peddling such ideas could be financially well off and could easily borrow money from the banks (but I don't see why they would since they probably make so much money from selling their courses already.)

If their students are in distress and if no one is going to lend them money, will these "gurus" step in to help?

Seriously, no one cares about our money more than we do.

We genuinely care about our financial health or at least we should care.

No one else does.

What about AK?

Does AK care?

Today's weather is quite good hor?

Things might look OK now in Singapore but there is no way of knowing how long this will last.

Things could take a turn for the worse and it could happen quite quickly.

Don't be overly optimistic.

Having an emergency fund is not being overly pessimistic.

Having an emergency fund and an adequate one is being pragmatic.

For new readers of my blog and for readers who need a refresher, read these:

1. Compared to anger and fear, shame is worse.

2. How to have peace of mind as investors?

3. How much to have in our emergency fund?

Gambatte!

Recently published:
Singapore Savings Bond: Fully allotted.

59% want to achieve F.I.R.E. and it is subversive! If AK can do it, so can you!

This is a commentary on a commentary by Keith Yap, a graduate of Economics & Development from Lee Kuan Yew School of Public Policy.

OK, that was just AK being cheeky.

AK is not learned enough to write a commentary.

AK only talks to himself.

It was a rather interesting article in CNA and anyone who is interested can read the full article titled 

"By wanting to retire early, millenials are subverting conventional ideas of work and finances": HERE.

It says most millenials want to achieve financial freedom in order to retire early.

Many millenials do not enjoy the work they do and they want to achieve F.I.R.E. so that they can choose to do what they truly enjoy without having to worry about the lack of an earned income.

The desire to achieve financial freedom also stems from a greater feeling of financial insecurity, economic malaise and the heightened inflation we are experiencing now.

It also says that adherents of F.I.R.E. aim to save 70% or more of their full-time income and that the ultimate aim is to save 25x of one's annual expenses and make 4% annual withdrawals for living expenses.

Meticulous planning, extreme frugality and common sense investing are all things which characterize the F.I.R.E. movement.

OK, at this point, long time readers might be asking:

"Alamak, is Keith writing AK's biography?"

Spooky!

See:

Save 100% of our take home pay!

However, I think that saving only 25x of our annual expenses seem a bit risky.

AK is very kiasu.

See:

To retire by 45, start with a plan.

and

Retirement drawdown strategy.

So, to the F.I.R.E. Padawan reading this blog, be kiasu a bit and build a buffer.

Seriously, you won't regret having a buffer but you might just regret not having one.

If AK didn't have a buffer, AK might be sending out job applications now.

See:

Inflation and passive income.

Before I continue, in case some think that AK might be making a mountain out of a molehill, the article in CNA cited a TODAY Youth Survey done in 2021 that found 59% of respondents between ages 18 and 35 said having enough funds to retire early is a top indicator of material success!

Wow!

That is so different from when someone told financially independent AK that he should be ashamed of himself!

Unintentionally or shamelessly giving myself a pat on the back?

You say lor.

See:

Financially free AK should be ashamed!

The article went on to say that if the prices of cars, housing and daily household goods continue to rise, millenials are likely to delay marriages, home ownership and having children.

Millenials would focus instead on securing their own financial independence.

Wow!

Good call!

AK claps for you!

See:

A happy marriage is worth waiting for.

There is a Chinese saying that goes:

先苦后甜

Bitter now, sweet later.

Work hard now and enjoy the fruits of our labor later.

See:

Three attributes of a wealthy peasant!

Some people might tell me that F.I.R.E. is not the way to live life but it is my life.

F.I.R.E. is not just something personal but it is also about being socially responsible.

People who have achieved F.I.R.E. are not a burden to the society unlike people who are "lying flat."

See: 

Lying flat is not financial freedom!

Of course, if striving towards F.I.R.E. makes us miserable, then, we might have to take a step back.

Look at what we are doing and see if we might have to cut ourselves some slack.

Anyway, I am happy to find out that so many young people are working towards F.I.R.E. in Singapore.

A big hurrah for everyone working towards F.I.R.E.

If AK can do it, so can you!

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Reference:
7 blogs on AK the investor (including secret of my success.)