FCF positive! $1 billion cash pile! Higher dividends?

For readers who who are not subscribed to my YouTube channel or who simply prefer reading blogs to watching videos, this the transcript of another recent video I produced.

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All investments are good investments at the right price.

I like to ask myself this question whenever one of my investments is suffering a paper loss.

"If I was not already invested in this at a higher price, would I buy at the price now?"

If the answer is "yes", then, I could possibly add to my position in the investment.

If the answer is "no", then, I could either hold or sell.

To hold, there must be some redeeming qualities like a strong balance sheet, the ability and the will to pay dividends consistently.

To sell, it could mean that I think the business has weak numbers, would lose money, stop paying me and maybe even struggle to stay afloat.

To be sure, I could also sell some if I must raise cash for another investment which I think could be more rewarding.



For some time now, ComfortDelGro has been getting "BUY" calls from many experts, citing the cheap valuations.

Although ComfortDelgro isn't what it used to be, no thanks to senselessly destructive competition brought on by money burning GRAB, it is trading at a level which is really inexpensive now.

In a recent video, I said that ComfortDelGro was not a basket case and that it still has a place in a diversified portfolio of investments for income.

I elaborated on this in a blog which shared the transcript through my reply to a viewer's question.

Please find link to the blog below.

For people who are more concerned about the future of the business, there are many analyses available but all of them have this one thing in common.

All of them say that ComfortDelGro will see numbers continue to improve.

Here, I will share some points in an analysis by RHB research.



Expect earnings to improve in second half of 2023 "amidst reductions in taxi rental rebates and benefits from the annual indexation of overseas bus contracts."

"Public transport earnings seem to have bottomed, and improvement should be seen in overseas operations during second half of 2023 amidst indexation of higher operating costs in the UK.

"Singapore should continue to see improvement in ridership in rail.

"Reduction in Singapore taxi rental rebate from 15% to 10% and the scope to increase commission rates for taxi bookings.

ComfortDelGro charges only 5% versus 20% charged by GRAB.

I keep saying that ComfortDelGro is still a profitable business unlike money burning GRAB.

In Q1 2023, ComfortDelGro generated free cash flow of almost $90 million.

This brings its cash balance to more than $1 billion.

It is in a net cash position of $715 million.



"Even with our estimate of its CAPEX reaching pre-pandemic levels by 2025, we expect it to continue building on its current strong net cash position."

This supports what I said in my recent video on ComfortDelGro.

That to invest in ComfortDelGro is to invest in a business that is generating a lot of cash while keeping a very strong balance sheet.

It has also shown its ability and will to pay dividends through good and bad times.

RHB research estimates a normalized dividend yield of 4.5% to 5.5% based on a 65% payout ratio.

During "Evening with AK and friends 2023", I mentioned that I sold half of my investment in 

ComfortDelGro at $1.35 a share and bought back some at $1.15 a share last year.

$1.15 a share was a fairly good price.

There is much market pessimism surrounding ComfortDelGro now and according to RHB research, it is trading at minus 1 deviation compared to its historical average which reflects this.

A mean reversion could eventually happen.



ComfortDelGro has shown its willingness to reward shareholders whenever it felt it had more funds than it needed to hold.

With a growing cash pile, we could expect higher dividends too.

Having said this, I remind myself that investing in ComfortDelGro is not to invest for growth.

If we are looking for growth, we should look elsewhere.

If AK can talk to himself, so can you!

Related post: 
ComfortDelGro Q1 profit plunged!

Cannot 4X money with MUST but what about a 70% growth?

This is the transcript of my most recent video on Manulife US REIT and how we could possibly grow our money 70% if we should invest in the REIT?

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In one of my recent YouTube videos, I talked about an analysis which suggested the possibility to grow your money 4 times by investing in Manulife US Real Estate Investment Trust.

However, I said that the real estate investment trust would probably have to do an equity fund raising exercise which would make that claim untenable.

Today, I read another analysis but by DBS Research House this time.

In the report, DBS said that with gearing at 49.5%, just a little below the 50% limit by the Monetary Authority of Singapore, the need and urgency for a capital injection becomes more apparent.

I like to remind myself that the 50% limit was allowed because of the pandemic.

Could we see the limit going back to 45% regardless, since the stresses caused by the pandemic are eventually going away?

This is another reason why we want to invest in real estate investment trusts with stronger balance sheets.

The proposed sale to Mirae which would result in the creation of almost 10% more in new units to help recapitalize the real estate investment trust would dilute the current shareholders' interests.

Still, it is unlikely to be enough.

More unlikely still is the possibility to 4 times our money.



To be sure, Mirae is doing this deal not because it is altruistic.

It isn't a charitable organization.

It is acquiring a stake in the real estate investment trust and the REIT manager because it thinks it will make money from this deal.

It will heavily dilute current investors' interests.

It is also buying the REIT manager at what DBS research house estimates to be 6 times PE ratio which sounds like a pretty good deal.

If it plays its cards right, Mirae should be able to recover its investments in just a few years.

Post acquisition, DBS Research estimates Manulife US REIT should see gearing level reduce to 42.8%, all else being equal.

In economics, we always like to say this.

All else being equal.

That phrase encompasses everything else that could change the picture.

In this case, the gearing level could change because the value of the properties held by Manulife US REIT could see significant declines.

I remind myself that the average physical occupancy in many of its properties is under 40%.

This suggests more tenants downsizing their space requirements when their leases eventually expire.



DBS research is cognizant of this as they said, "gearing may be stretched if capital values continue to fall again by end of 2023."

"This may turn out to be true, depending on how the current turmoil pans out with the US commercial real estate space."

So, we could see things worsen as soon as end of 2023.

Due to this, DBS research also says that while a gearing level of 42.8% which is below 45% which is what Monetary Authority of Singapore allows if interest cover ratio is below 2.5x, this is still not a comfortable level for investors.

"As such, we take a step further to evaluate if a rights issue should be considered to bring the gearing level a notch lower."

"With new equity capital raised to bring gearing to a more palatable level of 40%, we believe this will provide sufficient flexibility to defend against further asset declines in the future, which will need an assumed further 20% decline in asset values to bring gearing back to 50%."



Taking all this into consideration, DBS research revised their target price lower to 24 cents a unit.

If we go with this projection, we might not be able to 4 times our money, but we could see it grow some 70%.

However, if we want to try our luck here, be prepared for a rights issue which I have said many times before is to be expected.

It is almost like Hobson's choice.

Not too hard to understand.

If AK can talk to himself, so can you!

Related post:
4X your money with MUST!

Surprise! Passive income I received from T-bills. Reminders! "Buy and forget" assets! Why am I building my cash pile?

For readers who prefer reading, here is the transcript of a video I made recently on "buy and forget" assets, how important T-bills are in my strategy and why it isn't a bad idea to have more cash and cash equivalents?

There were a couple of mistakes I made in the video which I have corrected for this blog.

Not all that important but my OCD wouldn't let me get away with it.

"Old Change Kee" corrected to "Old Chang Kee".

"Q1 2023" corrected to "Q2 2023".

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I mentioned in a few blogs in the past that I would sometimes check my savings account and get a pleasant "surprise."

The "surprises" are dividends from investments that I have not done anything to for so long that I almost forget I have them.

You know what they say about buying and forgetting?

Some people would look down on people like that.

However, for me, it has not always been a bad thing.

These are stocks which are usually free of cost for me but are still generating income.

During "Evening with AK and friends 2023", I mentioned Old Chang Kee and Hock Lian Seng as two of such investments for me.

They are not the only two either but I cannot recall the others now.

I will remember when I see their dividends come in, I am sure.

My memory is getting quite terrible.

Anyway, why am I talking to myself about this?

Well, quite recently, there is a new addition to these "surprises".

T-bills.

As my 6 months T-bill ladder is complete, I have money coming back to me every 2 weeks.

However, as it is a relatively recent development, I am still not used to it.

This is especially when the amount is relatively big compared to "dividends" received from investments I sometimes forget I have.

Of course, I also have to remind myself that I am not receiving money that I can spend here.

It is a return of my capital.

I have quite a bit of money coming in this month as the month of May is usually a good month for dividends.

Mixed together with this is money coming back from T-bills bought in October and November last year.

Already bought some 6 months T-bills in the last round of auction which saw a cut-off yield of 3.78% p.a.

Will be putting in a non-competitive bid for the upcoming 6 months T-bill auction next week.

I would be quite happy to get a cut-off yield of 3.78% p.a. again or thereabout.

Basically, anything higher than the 6 months fixed deposit rates offered by DBS, OCBC or UOB would be good enough for me.

I remind myself that T-bills pay us at the beginning of the 6 months duration which means the "interest rate" is actually higher than what the cut-off yield indicates.

I also remind myself that this is not my main source of passive income and it should not be my main source of passive income.

To illustrate this, in Q2 2023 so far, I have bought three T-bills which have generated about $500 in passive income for me.

This is really pocket money compared to dividends I have received so far.

However, I never look down on pocket money especially if it flows into my pocket regularly.

Also, this is money which I didn't have before.

This is all thanks to higher interest rates.

(I am also very thankful for a strong Singapore Dollar. Even foreigners want to get Singapore T-bills.)

As an investor for income, I am a creature of comfort and I also said during "Evening with AK and friends 2023" that investing for income is very comforting.

I find T-bills more comforting now that they pay better than they did in a long time.

"The front end of the yield curve is still elevated even as the Fed has signaled a pause in rate hikes.

"I know there is talk of a Fed pivot by end of the year and it could well happen but worrying about whether it will happen or not does nothing to generate income for me.

"I would rather make hay while the sun shines.

"Anyway, my expectation is for 6 months T-bills to remain relatively rewarding in the near future, taking into consideration that it is risk free and volatility free just like the CPF."

Source: 

See related post at the end of this blog.

(My YouTube video on this topic.)

There is nothing wrong with having more cash and cash equivalents in our financial pyramid especially in an environment when cash is no longer trash.

If things should go terribly wrong like they do from time to time, with a stronger footing, we should have less to fear and greater ability to take advantage of investment opportunities.

AK is lazy and a creature of comfort.

Don't do what I do unless you meet those requirements.

Jokes aside, it is never my way or the highway.

We should all have a plan, our own plan.

If AK can do it, so can you!

Related post:

Fixed income update.

Gainfully unemployed! Government is disgusted! SMLJ! Evening with AK and friends 2023 update.

A quick update on "Evening with AK and friends 2023" before I start the blog proper.

Don't worry, it is not being postponed or cancelled.

The event will still be taking place in the evening of 10 May as promised.

In case there are readers who decided to wait closer to the date before purchasing a ticket, there are about 30 tickets left.

To everyone coming to the event, see you on 10 May!

Ticketing link in this blog:

Evening with AK and friends 2023.

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Recent headline in The Straits Times.

"Jobs will soon become a national security issue! Automation and AI will pose the biggest risk to the most sought after jobs for youth."

I so stunned like vegetable!

How like that?

More people to become displaced and jobless?

Regular reader are probably familiar with a phrase I use in my blogs rather often.

"Gainfully employed."

This phrase refers to productive members of society.

They are employed and they are rewarded with financial gains.

Then, what is the word I use for myself?

"Unemployed."

This is probably the correct description of AK to most people which is also why they are usually dumbfounded at least for a while before they make some polite noises.

On my part, I also like this phrase to describe myself because of its economy since I am too lazy to provide any explanation to anyone who might be curious enough to probe further.

Of course, our government knows the truth about AK.

"Unemployed" refers to someone who is actively looking for employment but has been unsuccessful.

AK isn't looking for employment and has not been looking for employment for almost 8 years now.

So, the government has a phrase for people like AK.

"Economically inactive."

If we are somewhat sensitive to the choice of words, we might feel that there is a little bit of negative undertone in the word "inactive."

It is like the word "lazy" but just a little better. 

"Economically lazy?"

To be honest, I rather like that.

Recently, I have been thinking of telling people that I am "gainfully unemployed."

If you think there is a perverse streak in me, you are probably correct.

Telling people I am "gainfully unemployed" should confuse some people, especially those who have been institutionalized by the hamster wheel that is employment.

"You unemployed?"

"What you gain?"

"You crazy or what?"

OK, can I choose not to answer that question?

I mean, being an IMH patient, there is a very easy way to answer that question, after all.

In my more lucid moments, I might deign to give a socially acceptable answer which might go like this.

"By being unemployed, I gain a lot of free time and the freedom to do whatever I want, answering to nobody but myself."

Wow!

Applause please.

That sounds very learned, if I do say so myself.

OK, end of blog.

Oh, you didn't know what SMLJ in the blog title stands for?

SMLJ = Stupidly Motley Local Jokes.

Oh, you thought you knew what SMLJ stood for but now you are confused?

What?

Your friend from China told you something else?

SMLJ = shen me la jiao?

Wow, chili so hot!

Alamak!

Don't be confused about this!

If AK can do it, so can you!

Government is disgusted with AK:
Income tax payable in 2019.

Related post:
Stop saying I am a "retiree."

Recently published:
Passive income as much as earned income.

Reminder to myself:
1. Recession could hit Singapore!
2. DBS, OCBC & UOB: Tailwind +1!

Passive income as much as earned income? Get rich slow!

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.

When I started work in my mid 20s as a young graduate, my pay was $3000 a month. 

In my 30s, my pay was around $5000 a month. 

Now, if your question is whether someone who makes the median salary in Singapore can retire early, you just have to look at me. 

Apparently, the median salary of people from age 30 to 54 in Singapore is between $5000 to almost $6000 per month, according to the Ministry of Manpower. 

Then, there is CPF contribution by employers which is not included in this figure. 

If that is included, then, monthly income is actually higher. 

Putting aside the topic of CPF which is another topic I blog extensively about, is it possible to do anything with a salary of $5000 to $6000 a month over 25 years to ensure retirement funding adequacy? 

I have many blogs on how average income workers can become rich. 

Why do many average income workers find becoming rich impossible? 

Do you believe me if I were to say it is not because they make an average income? 

The truth is many of them find this impossible because they can afford so many things in life and would buy them once they can afford to. 

This is why they cannot afford to stop working. 

Spend all the money we make and we will always be poor. 

Borrow money to fund our lifestyle, we will be poorer than poor. 

Then, for average income workers, how to become rich? 

Take for example making $5000 a month and taking home $4000 after CPF deduction. 

Do you believe me that at some point in time we could actually be saving all that $4000 every month? 

This is even if our take home pay did not increase in the future. 

Start by religiously saving 50% of our take home pay. 

That would be $2000 every month. 

If we were to invest for income and if we were to get an average of 5% dividend yield per year, we should be paid approximately $1200 in dividends in the first year. 

That is like paying ourselves a bonus of $1200! 

Imagine reinvesting the dividend in addition to $2000 a month from our take home pay, it would be like saving $2100 each month instead of only $2000. 

At some point, we would be saving and investing $4000 each month.

All this because we started saving $2000 each month and investing for income. 

Like in Economics class, this example is unrealistic because we have to hold everything else constant. 

However, like in Economics class, this little exercise demonstrates how it is possible to create sufficient passive income to replace our earned income. 

The strategy needs discipline and patience to see results. 

"Someone is sitting in the shade today because someone planted a tree a long time ago." 

- Warren Buffett 

All of us have to work with what we have been given although there should be no stopping us from trying to change our circumstances for the better if we want to, unless we are severely disadvantaged. 

I actually believe that we would have a hard time finding people who save half of their take home pay consistently for even a few years. 

However, take this as an inspiration. 

If AK can do it, so can you!

Related post:

Don't depend on wages!

Update on my plan to save for income. Money I forgot I had. DBS SavvyEndowment11 and 3.92% p.a. guaranteed.

This is a quick update on my plan to save for income published in a blog at the beginning of April.

Back then, I said that I should be able to set aside $10,000 to apply for Singapore Savings Bond this month.

However, I have increased that figure to $22,000.

This is because a 5 months fixed deposit placed with DBS matured and I forgot I had it.

So, with more money at my disposal, I have decided to apply for $22,000 instead of $10,000.

Why $22,000?

If I should be successful in getting a full allotment, together with the $16,000 in Singapore Savings Bonds allotted in March, I would have hit $38,000.

$38,000 is the amount I had planned on setting aside for voluntary contribution to my CPF account in January 2024.

See:
CPF or SSB? No brainer?

I also made a non-competitive bid for the T-bill  auction closing on 25 April with $15,000 instead of $5,000.

Apparently, I had mistakenly thought that I had a T-bill maturing on 24 April when it matured on 18 April.

So, instead of completing soon, my T-bill ladder is actually complete.

See:
Ladder completing soon.

Finally, with some excess cash on hand, I decided to put some money in an endowment plan suggested by DBS Digibank.

This is a 2 years endowment plan that pays a guaranteed 3.92% per annum.

This is almost as good as the CPF Special Account's 4% per annum.

Endowment plans are really savings plans with a tiny life insurance component thrown in.

I just think of this as a pseudo top up to my CPF Special Account which I am not allowed to do anymore, of course.

The product is "SavvyEndowment11" and it is available to anyone with a DBS Digibank account.

Minimum amount required is $5,000.

The application process is very easy and fast.

This is not an advertorial but here is the link for anyone who might be interested in saving money: 

DBS SavvyEndowment11.

"A spokesperson for Hong Leong Finance said that rates for fixed deposits have generally dropped slightly in the past two months. 

"Singapore Overnight Rate Average (SORA) remains relatively high and inflationary risk will take time to ease. 

"At the back of an uncertain economic outlook, rates are likely to soften later in the year. 

"A Maybank spokesperson highlighted the impact of US Federal Reserve interest rate hikes on interest rates in Singapore. 

"As Singapore dollar interest rates have a positive correlation to the US dollar, we can expect that if inflationary pressures recede, interest rates should soften if there is a recession risk."
Source: CNA.

So, for anyone with a fixed income component in their investment portfolio, it is probably not a bad idea to lock in higher interest rates now, if possible.

Recently published:
1. More in equities or fixed income?
2. Tesla's results and valuation.

Reference:
Saving for income.

More in equities or fixed income? Update on my health.

This started out as a reply to a reader's comment but it got pretty long.

I also feel that there are things which many people might want to eavesdrop on.

So, the reply is here as a blog.

Hi yuhui,

I like your phrase "super bloomers" more than "late bloomers."

Before I continue, I want to caution you about having only one meal a day which is the most extreme form of intermittent fasting.

I tried that for a few months last year and lost so much weight that my mom got worried. 

She told me I looked like Chew Chor Meng who was quite ill.

When I met Kenji and Victor, my friends from The Fifth Person, about 6 months ago, they were shocked by how thin I was.

Anyway, I have since gone back to having at least 2 meals a day, eating within a window of 6 to 8 hours each day.

So, I am still doing intermittent fasting but a less extreme form.

I have recovered from being borderline underweight, putting on 5 kgs in the last few months.

Anyway, please be cautious because it is very hard to get sufficient nutrition for a regular person by having only one meal a day.

As for what I have done in the stock market, I did nothing in April.

In January, I bought back some stock of ComfortDelgro.

In February, I sold my investment in SATS.

In March, I bought some stock of OCBC.

I have been mostly focused on increasing exposure to fixed income in the last few months.

The question is whether someone who doesn't have as much exposure to equities should be deploying more funds into equities or fixed income at this point?

To help with the decision making process, look at the prevailing risk free rates.

Please bear in mind that this is only one of many possible considerations and it is just a starting point.

If we have an investment horizon of 10 years, an idea could be to compare the 10 year average yield of the Singapore Savings Bond with the estimated returns from investing in a business.

The risk free rate is around 3% per annum.

So, if we were to invest in a business which is not risk free, we would demand a higher return.

Investing in Singapore's banks is not risk free but they are relatively safe compared to Centurion Corporation, for example.

Therefore, a sustainable 5% dividend yield from the banks would be more acceptable than a 5% dividend yield from Centurion Corporation which has a much weaker balance sheet and less robust asset quality.

A 5% dividend yield from ComfortDelgro is acceptable because they have a very strong balance sheet and, therefore, should be relatively safe.

A 5% distribution yield from a REIT which is highly geared is, in my opinion, undesirable, because a REIT distributes at least 90% of its income to investors.

If by distributing 90% of its income to investors, a REIT is only able to eke out a 5% distribution yield, to me, it is not an attractive investment, especially in today's high interest rate environment.

If I must invest in REITs, for a start, I would look for those with relatively low gearing, a high interest cover ratio and a distribution yield of 7% or more in order to be competitive.

The final mix of equities and fixed income we have in our portfolio will depend on what we believe is right for us.

We can only hope to be approximately right and by using some common sense, we should be able to avoid being absolutely wrong.

"What we do is not beyond anyone else’s competence." - Warren Buffett

This isn't an exact science.

If AK can do it, so can you!

Update on Evening with AK and friends 2023:

A few tickets left. Ticketing: HERE.

References:
1. Retirement adequacy for late bloomers.
2. Saving for income: SSB and T-bill.
3. Building investment in OCBC.
4. 1Q 2023 passive income.

Recession could hit Singapore. Do what Buffett and AK say?

Warren Buffett famously said to investors the following.

"Don't worry about economic predictions."

In his opinion, 

"... it really doesn't make any difference in what I do today in terms of buying stocks or buying businesses what those numbers tell me. 

"They're interesting, but they're not guides to me. 

"If we buy a business, we're going to hold it forever. 

"So we're going to have good years, bad years, in between years, maybe a disastrous year some year."

Now, this perspective is very interesting and also instructive.

It should be interesting to all investors.

However, it is only instructive to certain investors.

Who are these certain investors?

Investors whose circumstances are similar to Warren Buffett's, of course.

Not everyone has money gushing in regularly and, definitely, not everyone has more money than they would ever need.

We do not have the resources that Warren Buffett and Charlie Munger have.

When we read such opinions, therefore, we have to think of our own circumstances.

For most of us, paying attention to the early signs of where the economy might be headed is not a bad idea.

In a YouTube video I recently produced, I said that the Monetary Authority of Singapore is worried about the economy and if they are worried, we should be worried too.

Singapore's economy is slowing down fast and it is likely to get worse as many major economies seem to be heading for a recession.

So, the Monetary Authority of Singapore has decided to put fighting inflation on the back burner and not to tighten in a move that is expected to help support the economy.

Most people still need their earned income and they should worry about possible retrenchment.

Indeed, massive layoffs started in the tech sector and if a recession hits, other sectors would most likely also be impacted.

Only iron rice bowls will be safe.

What to do?

If we do not have an emergency fund, we should really start one.

If we have an emergency fund already, do a review and see if it is still adequate.

Even if we have passive income, we should have an emergency fund because passive income could dry up.

Whenever I recall how my interest income and dividends reduced during the COVID 19 pandemic, I get PTSD.

If we are fully invested in equities, we might want to start building a war chest.

If we already have a war chest but it is somewhat empty like mine, try to fill it up.

There are so many things that could go wrong in the next few months.

Geopolitics in many places could worsen.

The banking crisis really isn't over yet and, in a recent interview, Warren Buffett said so too.

Depositors will not lose money but investors will lose money because they made bad investments.

I am very "kiasu" but, given the uncertainties, I am more "kiasi."

I tell myself that I want to do a better job of preserving capital and having more cash really isn't a bad thing.

This is especially when the front end of the yield curve stays elevated.

A risk free return of 3.65% to 3.85% p.a. with zero volatility is very decent.

It isn't a bad idea to be more defensive, especially if it gives me peace of mind.

I said this to a reader in the comments section recently:

"Being substantially invested in equities already, I am more likely to regret not having resources in a bear market than not having invested more to benefit from a bull market, if it should happen."

At this point, it is important to remind anyone who is eavesdropping on me that all of us have different circumstances.

So, just like how we shouldn't accept what Warren Buffett says as being instructive for everybody, we should not accept what AK says unquestioningly as well.

We are also wired differently and will have our own beliefs.

Do the right things and the right things will happen for us.

If AK can do it, so can you!

Recently published:
T-bill ladder completing.
References:
1. Fixed income strategy.
2. Survivability and opportunity.

Final T-bill using fresh funds. Ladder completing soon.

3.75% p.a.

That's the cut-off yield for the latest 6 months T-bill auction.

I said in an earlier blog that a cut-off yield of between 3.65% to 3.85% p.a. would still be relatively attractive.

Plus the fact that the "interest" is paid at the beginning of the tenure, if we are able to hold till maturity, 6 months T-bills offer better returns than 6 months fixed deposits placed with DBS, OCBC or UOB now.

I will go ahead with the plan to apply for the next 6 months T-bill which will have its auction on 26 April when it is available.

That will be the final T-bill I will apply for using fresh funds.

Why?

My T-bill ladder would be completed by then.

This is because the first 6 months T-bill I applied for in October last year will be maturing on the 24th this month.

I will use the returning funds from that maturing T-bill to apply for the first T-bill in May.

Every two weeks from the 24th of this month, I would be recycling returning funds from maturing T-bills.

Therefore, no fresh funds would be required for T-bill applications from then on.

Well, at least that is the plan for now.

As long as the front end of the yield curve stays elevated, this should generate some pocket money for me.

Always nice to have more pocket money.

Since I would not be injecting fresh funds into T-bills, the passive income generated by my investments for the rest of the year will go into my war chest after deductions are made for expenses.

I am in no hurry to increase exposure to equities.

This is largely because I am already substantially invested.

I also don't want to be caught in a situation where Mr. Market goes into a depression and I lack the resources to buy stocks from him on the cheap.

So, do I feel like this because I can see a recession is on the horizon?

Alamak!

If you think like this, you need help.

OK, at least I am not the only one who is mental here.

No, I am simply doing what I have always done.

What might that be?

"Eat crusty bread with ink slowly."

Constructing a T-bill ladder helps to fulfill the "I" in "ink" which stands for "income."

Buying Singapore Savings Bond when the 10 year average yield is above 3% p.a. really helps to fulfill the "c" in "crusty" which stands for "CPF."

The "w" in "with" stands for "war chest" and I need to fill up mine.

If you are new to my blog and feel a little lost with my taste in food, I will hyperlink the relevant blog post below.

I think it is quite tasty.

If AK can do it, so can you!

Updated on 14 April 23 with a new video on the latest from MAS:

Recently published:
Lean F.I.R.E. since 2014!

Reference:
Eat crusty bread with ink slowly.

Related post:
Saving for income.

Why do we obsess with salaries? Why compare?

This is the first time I am doing this.

It is the transcript of a YouTube video I made recently. 

People who prefer reading might like this.

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Regular long-time followers of my blog know that I have become very reclusive in my retirement.

There are many reasons why this is so. 

One reason is because I retired relatively early in a society where it is not the norm. 

This leads to some awkward moments for me even with members of the extended family. 

Like most Singaporeans I know, they like to ask the following question. 

"What do you do?" 

I would feel like telling them that I am a NEET. 

However, I am sure they wouldn't know what that is. 

So, I just tell them I am jobless. 

OMG! Someone only in his early fifties and jobless? 

Next question. 

"How long have you been jobless?" 

About 7 years. 

OMG! He has been jobless since his mid-forties! 

Oh, in case you don't know, NEET stands for Not in Employment, Education or Training. 

Basically, it just means I am a non-productive member of society. 

Of course, even if I should be gainfully employed, they are not shy to ask the next question. 

I am sure you know what it is. 

"How much do you make?" 

The Singaporean obsession with salaries. 

I still remember the time when a reader told me he found my blog through a forum which discussed salaries in Singapore. 

I was so stunned like vegetable! 

I have had to suffer comparisons with my cousins in my years growing up. 

"You know your cousin so and so?" 

"You know he got full marks for his tests?" 

Of course, I am talking about school days. 

These days, the only tests I take are blood tests. 

Anyway, one day, I got so fed up that I told my mother to stop comparing me with others! 

I am sure the comparing continues but if I don't hear about it, it doesn't affect me. 

Unfortunately, at family gatherings, it is hard not to hear such things. 

A friend told me recently that my passive income puts me on par with the top decile of household income in Singapore. 

I didn't know this. 

I worry about inflation, and I worry about whether I would have sufficient passive income. 

Of course, I have always been a worrier, and I don't think I would ever stop worrying. 

Anyway, I found out that the top 10% of households in Singapore had an average monthly income of $13,626 in 2021. 

So, my friend is right. 

OMG! Am I the one comparing now? 

You know what they say? 

Misery loves company. 

Miserable people are comforted knowing they are not alone. 

So, I should not be too reclusive. 

I should not shun company. 

I just have to be in the right company.

(While I am at it, do you know what is the 2022 average monthly income of the top 10% of households in Singapore? 

If you have the numbers, please let me know in the comment section.)

Related posts, maybe:
1. Chinese New Year secret.

2. AK should be ashamed!

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1. Bankrupt before 30.

2. 1Q 2023 passive income.