A good wife worries about retirement adequacy.

A recent conversation with a reader:

Reader says...

I have been a silent reader mostly for several years now. 

And i am ashamed to say that i now feel like i have not learned well from your blog, and am caught in this situation where i just do not know if i should bite the loss of almost 15k, or just continue with the plan i bought from my FA. 

Hence, I am writing to hear your advice.




I am 34 years old and my other half is 36... purchased a Retire Happy plan last year. 

My husband purchased it mainly because of me.

I was doing a review of this plan and chanced upon your words of wisdom on this Retire Happy. 

And then i realised that i might as well have topped up my own CPF account.




What should i do now?

Even though its my hubby's money, it is foolish to continue with a plan that is not value for money.

If i terminate the plan now, I will lose about 15k, which is damn a lot of money. 

If i don't, there is no guarantee that my hubby will save. 






After i have explored the CPF option, we are shocked to know how good it is but my husband still says he won't be maxing out his CPF as he doesn't have enough cash.

The most sensible and logical thing would be for my hubby to max out his CPF with the monies he is using for my plan and use it to provide for our retirement, but honestly, money is truly emotive and i don't know if he can.

What should i do, AK? I feel like a foolish wife now.

Would be eternally grateful for a response.

AK says...

I am only talking to myself in my blog. 

If you overheard me talking to myself, you have to decide if I make sense. ;)

I think you know what you want to do.

Does it make sense to continue sending money to where it is not treated best?




I understand that things are not as straightforward in your case because you are trying to force your husband to save money. 

Frankly, however, what is to stop him from not making regular payment towards Retire Happy?

I feel that if he is committed enough to pay regularly now, you should trust him.




Instead of paying Retire Happy, ask him to pay you and you manage the money. 

You could take the money, do MS Top Up to his CPF-SA and not keep it for yourself to show that you are doing this for him and the family. :)

To be quite honest, we cannot be sure of anything in life. It is all about trust. 

There is no guarantee that things will always go our way. 





We just have to do what we feel will give us peace of mind.

It depends on what we believe in.

I believe in having a risk free and volatility free portion in my investment portfolio. 

I believe in having an annuity that pays me not for only 20 years but for life. 

I am lucky to be a CPF member and I am maxing out the benefits of my membership.






Related posts:
1. Retire Happy.
2. How many $29K do we have?
3. How to upsize $100K to $225K?

Selling a car or a flat yourself.

Things change and that is one of the few constants in life.

Some changes hardly matter but some changes affect our lives in a big way. 

Changes could also be catastrophic. 

Remember the Dodo.

What is this leading to?




A few months ago, I sold my car without going through a middle man. 

Cars of the same make, model and age at pre-owned car centers were going for upwards of $50K at that time. 

I was offered $40K to $45K by different resellers then.

I decided to find a new owner for my old car myself. 

It was a relatively short search as a friend was looking to replace his much older car then. 




We had a win-win situation with the middle man removed.

It did mean, however, that we had to visit LTA in Sin Ming, queue up for more than an hour to do the transfer of ownership but that was just a minor inconvenience.

If you are thinking of selling your car, you might want to do it yourself. 

It is quite easy:
http://www.oneshift.com/used-car-buying-guide/718/how-to-sell-your-car-directly-to-a-buyer



Now, if selling your car without having a middle man is a good idea, what about selling your flat without engaging a property agent?

Well, it seems that many people are also selling their flats without the help of a property agent:

"According to figures from HDB, the number of resale flat buyers and sellers who have gone the DIY way rose to 24 per cent in 2015, from 11 per cent in 2010. 

"So far this year, 23 per cent of resale transactions carried out from January to May were completed without a property agent."
Source: CNA





It is probably an understatement to say that real estate in Singapore is expensive. 

Real estate is very expensive. 

A commission of 1% or 2% (as in the case of a HDB flat) is a big deal. 

I remember selling my home a few years ago and having to pay a 5 figure sum to the property agent. 

That is a fair bit of money.

If we can save a bit of money, why not?

If we can save a lot of money, what are we waiting for?




So, how easy is it to do it yourself?

I went to the eCitizen website and found out how easy it actually is:
https://www.ecitizen.gov.sg/Topics/Pages/Selling-your-HDB-flat-A-step-by-step-guide.aspx

"We were surprised because we thought it would be quite complicated. 

"The officer at HDB (Housing and Development Board) was also very helpful to go through the paperwork with us." 
Source: CNA






For a seller who is willing to spend some time to do some work, considering the huge amount of money saved, it is worth it.

“Especially with the emergence of social media, people get connected much easily compared to 10 years ago. 

"That’s why many home owners are now able to find home seekers by themselves or vice versa...”
Source: CNA

Selling your car or flat?

I think it is worth exploring the option of doing it yourself.

Related posts:
1. Fixed rates, SIBOR, FHR18...?
2. Affordability and value for money.

The AK passive income strategy after making $1m.

It has been a fortnight since I announced that I was taking a break from blogging. Time flies.

Does this blog post signify the end of my break?

No lah. I am still on a break. AK is lazy.

This is just a short note to say AK is lazy but still alive. (Wink, wink.)






The first thing I want to do is to share a very thoughtful message from a reader. 

I could tell that it is from the heart and not just lip service:

Thank you for the empathy and well wishes. I truly appreciate it and will (try to) take good care of myself.

After all, why have passive income if we don't spend more time doing the things we want to do?






I should be working because I want to and not because I have to. 

Right or not?

Warren Buffett said this about the importance of having passive income before:

"If you don't find a way to make money while you sleep, you will work until you die."




There is no way in the world lazy AK wants to work till he dies.

Hmmm... OK. How does this sound? 

I have been enjoying myself watching K-drama, spending time pottering around in my planter, tending to my aquariums, eating right (most of the time) and exercising (but not as frequently as a few months ago). 

My shrimp tank.

Yes, economically not very productive. 

Terrible!

Bad AK! Bad AK!

What? Investments?

I haven't done anything, really.

For a while, I was loading up mostly on DBS but since my last blog post, I have kept the status quo in my world of investments.

Easy thing to do, doing nothing, you think? 

With the help of anti-itch cream on itchy fingers, maybe so.






For me, it might be easier to do nothing than most because I have an anti-itch cream called "ample dividends".

Not just "dividends" but "ample dividends". 

Well, I think it is ample to someone like me, anyway.

I have such a cream because most of my investment portfolio built over the years is made up of investments for income. 






Unlikely to give me a heart attack, these investments generate regular and meaningful income for me. 

Enough to cover my routine expenses and more, they allow me to go about my business of being lazy with less worry.

What? Being lazy is not a business? 

OK, you win.




So, does AK really have no plan at all when it comes to investments?

Well, I honestly feel that I don't have to do anything to grow my passive income further.

Of course, I cannot buy a Richard Mille watch or a Ferrari car at the drop of a hat (Why would I want to do that, anyway?) but I am financially quite comfortable now, I feel.

homer123 wrote:

I am not at all surprised that Sporean are highly interested in passive income.. One of the most popular blog with more than 12 million pageview by AK71 aka ASSI claimed he has collected more than 1 million dollar in passive income in less 10 years.. more than the average income typical Sporean can make from their salary! 


http://singaporeanstocksinvestor.blo...ollars-by.html

sAVaGEmP5:
I hope u are not here advertising or spamming blog post ? 
Such a lousy written article that taught me nothing new, u dare to post here. Let me see the Lambo, richard mille or the MBS penthouse then consider real pls.
Source: HWZ.

However, if I want to grow my passive income further, it should not be growth at any price which is a mistake many people make, including moi. 

It should be growth at the right price. 






Now, what is the right price? 

Uh oh, that sounds like quite a bit of work, doesn't it?

An easy way to get around having to do more work is to buy on a dip or a correction in prices. 

All else remaining equal, there will be greater safety buying on the back of a 10% or 15% decline in prices. 

Right or not?






I don't know. 

I anyhow talk to myself.

If prices don't decline, it is OK for me too. 

I will just accumulate more cash in the meantime. 

Remember what Charlie said? 

There are worse things to do than to sit on plenty of cash.




Finally, I plan to max out the CPF Annual Contribution Limit in the next 10 years (till I turn 55) by doing more Voluntary Contribution as I no longer have significant Mandatory Contribution.

This will ensure that the risk free and volatility free investment grade bond component in my portfolio stays at a meaningful percentage.

With a focus on passive income generation, mine is a strategy that gives me peace of mind and it makes me happy.





Related posts:
1. Made $1m investing for income.
2. Revisiting a simple strategy.
3. Instant gratification of yield.
4. AAA rated sovereign bond.
5. Having peace of mind.

Investing for income is a journey I do not regret.

Conversation #1

AK:
If you enjoy writing, you will enjoy blogging. It is really that simple. :)

People who start blogging because they think they can make money will (mostly) give up after a while... ;p


Reader:
Money will be the least consideration.




AK:
But it is time consuming... So, you have to think about that especially when you have many comments and also emails to reply to over time...

A good way for me to kill time ;p


Reader:
lol
in a way, u enjoy it?

AK:
Not as much as I used to... quite honestly




Reader:
becoming more of a chore?

AK:
i used to blog about anything i want
i happy i blog
these days, i self censor
also many readers... comments and emails...
i try to reply all...







Reader:
these days, even govt agency reads yr blog lol

AK:
when some commercial outfits write to me... offer to increase my readership, I told them "no, thank you"
i not doing this as a biz
i dun need
ya.... govt read also... say wrong stuff, go to chia thye poh old place... cham... scary
OK... i go take a nap liao

CONVERSATION #2

About: Scolded by wife...

I am thinking about taking a break from blogging and all its related activities.

So, don't be too concerned if you do not hear from me as regularly as before for the next few weeks (or months).




In the meantime, remember that as long as you are doing the right things, you are probably moving in the right direction.


If you believe in investing for income for a better future, it is important to believe in yourself first. 

Believe that you can do it and you will.





Believe that this is a journey worth going on, stay the course and you will surely be rewarded. 

Gambatte!


Related posts:
1. Make $1m by investing for income.
2. AK trying to be most popular blogger?

Jobless and still paying $30,000 a year for insurance.

Hi AK,
 

I happen to come across your post and decide to email you for some advice.

 

I am 41 and currently jobless as was retrenched. The only jobs available if I am willing to do is probably Security guard, Taxi driver etc. I am jobless for more than a year!

 

Good news is I have about 200k my CPF OA and and 203k in my SA. If based on your compound theory and I leave the money till I reach 65 in CPF, I think my retirement is still ok. I have no debts.

 

But the bad news is those life insurance premiums which I took them up during my work years is a big bulk of my expenses. It is about 30k annual premiums in total.

I have thoroughly look thru all the policies and if I were to surrender them, that will be a big losses and also ceasing all my coverage. Also my health is not good now so it is not possible to get insurance companies to underwrite at good terms in future.

 

I have about 200k worth of liquid savings, no investments. If I don’t do anything now, it will be depleted in few years’ time. Do you think I should wait for a good opportunity then put the bulk of my 200k savings inside the stockmarket or I should start now to invest into some products that offer yield now?

 

Mr Undecided
 

Hi Mr. Undecided,

No one can really tell you with certainty if it is the best time to invest in stocks now or if you should wait.

Unless your employment situation improves, having more cash on you now is probably prudent.

I do not know what your poor health situation is like now but paying $30,000 a year for life insurance sounds like you might be paying too much.

The fear of losing money in the form of premium paid in the past holds people hostage. Their cash flow now and in the future suffers because of this mental trap.

Why continue to overpay for years to come just because we fear losing money we overpaid before?

You should consider how you might be able to lower the premium while enjoying the right amount of coverage (as you could also be over insured). No one cares more about our money than we do.

Your ample CPF savings is a relief and being debt free, if you could control your expenses well over the next 14 years and find a job within the next 2 or 3 years, your $200K in liquid savings should give you peace of mind. :)

Best wishes,
AK

Related posts:
1. A cornerstone in retirement funding.
2. Term Life Insurance: Why and how?
3. The instant gratification of yield.

How to make a million dollars by investing for income? (UPDATED)

In place of 2 blog posts, one on my passive income from S-REITs and another one on my passive income from non-REITs for the first 9 months of 2016, I decided to write only one blog post but without all the usual numbers.

OK, I know, AK is lazy.

Bad AK! Bad AK!

Well, I get asked whether it is possible for regular folks like you and me to make a million dollars through investing in the stock market many times before. 

Could we make one million dollars from the stock market?

The future is closer than you think.




Of course, not surprisingly, many also asked me if it is possible to achieve this specifically through investing for income which is the mainstay of my investment strategy.

Honestly, I think that for the average person it is not easy to make a million dollars through investing in the stock market alone, be it by investing for income or some other methods.

OK, you can stop reading now.

Still reading?

Well, it is not impossible but it is not easy.




Although I have been trading and investing in the stock market for about 20 years, I only started to keep more accurate records from 2008 when I had more time and also the inclination to do so.

Of course, regular readers could put 2 and 2 together because I only started blogging in 2009 when I said I did that out of boredom and curiosity that Christmas Eve.

Aiyoh, AK is so long winded. 

Get to the point lah!

So, did AK make $1 million by investing for income?

I grew this from a seed.

From 2008 till now, without taking into consideration the bumper distribution from Saizen REIT in 1Q 2016, total dividends and distributions received from my investments in the stock market crossed $1 million this month.

Yes, I have made $1 million by investing for income.

Some people might say that I must have had a lot of money to begin with. 

After all, if we had $10 million, we could make $1 million in dividends in a couple of years with a 5% dividend yield.




Unfortunately, I wasn't born with a silver spoon in my mouth. 

It might have been stainless steel which was not bad but it wasn't some precious metal. 

Regular readers might remember I shared how my family moved from a 1 room HDB flat to a 3 room HDB flat and then to a 5 room HDB flat before moving to a condo (which happened about 17 years ago). 

I am from quite a regular sandwiched class Singaporean family.

Some stuff I have in my kitchen.

Sandwiched class or not, we need capital to invest with and, at one time, for many years, I gave myself only $300 of spending money each month and saved the rest. 

Over the years, I invested regularly for income and, of course, a familiar story by now is how I started investing in ST Engineering when it was trading at $1.55 a share donkey years ago when I was a young working adult. 

$1,550 for one lot (1,000 shares then). 

It was a big deal for me in those days. 

I didn't stop at one lot, of course, as I added to my investment when I could.




Over the years, my life improved but I was mostly frugal even when I made more money. 

I remember how a friend scolded me when I saw a SWATCH that I liked but decided not to buy it.  

"What is wrong with you? You make so much money! Just buy lah!"

I bought the watch to avoid further scolding. Silly AK did that. 

I gave the watch away a few years ago.

Alamak. I am digressing again. 






Growing old and nostalgic lah. 

Lucky not suffering from Alzheimer's yet. 

Knock on wood.

Anyway, you get the idea. 

I made more money over the years but I remained pretty frugal.

I worked hard, holding 3 jobs at one time, working 7 days a week for a few years, saved quite a bit of money and mostly invested for income. 


I didn't keep a precise record but over the years, doing what I did, I suppose it must have amounted to something. 




Dividends grew and my savings grew. 

Amount of money invested also grew. 

Dividends grew again and so on. 

It was a virtuous cycle.


Through many market crashes, AK learned that we must always have a war chest ready. 

During the Global Financial Crisis, Mr. Market offered a truckload of opportunities to make a lot of money and I emptied my war chest. 

Of course, the story did not stop there.

Enjoying the view because I can.

Receiving more dividends since the Global Financial Crisis, I had more funds to invest with for income which I did and the cycle continues till today. 

As I do this, I am mindful to sock away some money in my war chest because I don't know when we might see another stock market crash like the last one. 

After all, it was having a war chest ready that gave my efforts a leg up in the past.

Alamak. AK is so wordy.


人老话多.

And I used to laugh at my parents.




So, do you want my formula in a sentence?

Make more money, save more money, invest for income, have a war-chest ready and be patient.

Aiyoh. How to remember?

See if this helps you to remember:

Money
Saved
Is
Waiting
Patiently

Mnemonics. 





What I have today took many years to achieve. 

So, yes, be patient.

There will be days when you feel down and, even, defeated. 

There will be days when you feel like throwing in the towel and giving up.

On those days, tell yourself:

"If AK can make a million dollars by investing for income, so can I."

It is not easy but it is not impossible.





When we invest, focus more on the income that is going to be generated in future by an investment and less on where the price is going to be in future as the latter is speculation.

If we have the right focus as investors for income, we will be less concerned with prices but more concerned with value.

If we have the right focus as investors for income, we will buy income generating assets at prices which make sense to us.

If we have the right focus as investors for income, all else being equal, we will not chase rising prices nor will we fear falling prices.

Stay grounded as investors for income and we will be amply rewarded over time.






Related posts:
1. Is AK a rags to riches story?
2. Secret to AK's success as an investor.
3. The millionaire next door.

A mind boggling 12 million and growing.

The word "million" has a magical feel to it. This is probably why having a million dollars is more often than not a milestone for many people.

A million is magical.

Six million is more magical.

What about twelve million?

Some might remember that it took almost 5 years for ASSI to receive a total of 6 million page views in October 2014.

However, from then to now, in less than 2 years, that number doubled to hit 12 million:

That means my blog agar agar received more than 3 million page views a year or 250,000 page views a month in the last 2 years!


OMG!

I so stunned like vegetable!


Related post:
ASSI reaches 6 million.

Grew more daring and lost more than $100,000.

Reader:
Good afternoon AK.

I remembered vividly the first stock I bought in 2009, Golden Agriculture. I bought 20 lots at 41cents and sold them away at 47cents. I made a profit of more than 1k and I was delighted.

Subsequently, I bought/sold a lot more other counters which also gave me profit. I did contra trading too.

I was basically following my *husband blindly in buying and selling penny stocks which were recommended by him or his friends.






*he is a penny stock chaser till today, hence I always tell him he is contributing money to our government through SGX

As time went by, I became more daring in buying without preparing or having the money to pay when the trades were due for payment.

Not knowing even about basic TA, hence very often, I bought at the peak and got stuck. Greed is another reason as over the years, I should have a chance to sell away some of the stocks but I didn't.

To date, I have lost more than 100k and still holding on to a few stocks with losses that are too great to cut. (losses of more than 85%!)

ICI

AK:
Hi ICI,

There are many schools out there. I invest primarily for income. So, I have my own style.

We have to find out over time what works for us, what we are most comfortable with. Psychology is important too.

I will say don't be in a hurry to plonk money in the stock market. Learn as much as you can first.

Best wishes,
AK

一步一步來







If we wish to trade more than invest, we should pick up TA. See related post #3 below for some recommended books.

Now, do you remember what AK likes to do? Yes, AK likes to eat bread with ink slowly.

Related posts:
1. How to make recovering from losses easier?
2. Risks and rewards: Learn FA and TA.
3. Recommended books for FA and TA.

Reader upset with insurance agent who is always too busy.

Hi AK

I like to share my experience with NTUC Income recently.

Some years ago I bought a Term Policy from them and it expired last month. I had been unemployed for some time, I decided that I should not take up a new policy to supersede the expire one.

However I encountered some difficulty. They sent me repeated demand for payment. The way they put it is payment is due for my policy as if the policy is still inforce although I informed them officially that I like to let the policy expire without taking up a new one. I felt that they were playing with words but I stood my ground that the policy has expired last month and I do not want to buy a new one.

Then they try the subtle approach that I will lose the benefit and I cannot reinstate it later....blah blah. They did not even bother to ask me why I did not want to take up a new Term policy or understand my circumstances in all those exchanges. 

It means they are basically only interested in my $$ and not my well being. The agent is truly hopeless. The fact is my premium will increase from $440 to about $1,100 per year for a $200K coverage if I took it up. Its a very very steep increase that I cant justify.

I had been paying by cheque yearly for this policy for many years but uses my wife's Giro to pay for my Income Shield. So I get the impression they try using that loop hole when I refused to issue cheque to start a new policy. The last request came informing me that payment will be deducted through Giro and asked me to ensure that there is sufficient fund in there . 

WTF..., since when did I use that Giro account to pay for this policy??? This is on top of the fact that I had written to them officially that I will let policy expire without taking up a new one. I told my wife to monitor her Giro account just in case...

This incident left me to wonder why the company has become like that. It used to be a very customer oriented one when Tan Kin Liang was CEO. He was one who solved problems, not create another problem for customers. That was the reason I had 8 policies with them previously. Now I am left with 3. Really piss off by this incident...

You can publish this for awareness but please remove my name if you do.

Best Regards
H

-----------------

Hi H,

I would be upset if I were you too. I believe that having a good agent is important. If the agent is only after money, then, something like this could well happen. :(

Best wishes,
AK

Source: MOH.

Yea. Its so difficult to get to talk to her over the last 5  years when I need advise. I seldom call her but because I have so many policies, periodic enquries should be expected by any agent, especially when near maturity or renewal.

Text her during office hours, no reply for days. (I was already very considerate). No choice had to call her then but when she finally text back (always refuse to answer call), its always "I am in a course", "I am in meeting" or "I am overseas" during office hour. Try again after office hour. Her text reply:  "I am having dinner with family", "I am with a client" or "I am on overseas vacation". When I asked her when is the best time we can talk, no reply or tell me can call hotline. Seems that this aunty's bottomline is don't disturb her and call Income myself.

Its the ultimate experience I ever have with an agent. Thats why I cut down from 8 to 3 policies currently when they matured or when I recovered my capital.

Recently i was contemplating whether to downgrade from the highest tier in IncomeShield or remove the costly Rider to save some money because I had been unemployed. I had a few options in mind and needed some advise. This is the last episode that trigger my anger when she still refuse to meet or talk to me over the phone after I sent her a long text to let her know I need advise. I wonder what would happen when the day I become sick or hospitalise and need to make claims?

Sorry to bore you with a long reply. Any advise from you is welcome AK.

----------------

Hi H,

Sounds like you need to get yourself a new agent. This aunty agent is a bad hat.

Although you don't need term life anymore, you still need H&S but it depends on what you are comfortable with. If you are quite happy staying in class C or B2 wards, you only need Medishield Life. :)

Best wishes,
AK

Related posts:
1. Customer service of two insurance companies.
2. Selecting a good financial adviser.
3. Medishield Life and free medical insurance.