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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.
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