CPF can be our best friend in our golden years. (CPF is a bond, an annuity and a savings account.)

In a blog published in February 2019, I said that even if I were to stop doing voluntary contributions to my CPF account then, I would have approximately $1.5 million in CPF savings when I hit 65 years of age.

If you are a new reader or if you don't remember, read the following blog.

See:
$1.5m in CPF savings by doing nothing henceforth.

Why did Albert Einstein call the power of compound interest the "8th wonder of the world?"

You tell me.







In a more recent blog, I revealed that I was doubling the amount of financial support for my parents.

I also said that I would like to continue making voluntary contributions to my CPF account, maxing out the annual contribution limit, till at least age 55, barring unforeseen circumstances.

Crossing fingers as that means another seven years of maximum voluntary contributions.

I said I might want to enjoy life a bit more and stop doing voluntary contributions to my CPF account after I have accomplished that.

Regular readers know that I have been trying to be more easy going when it comes to spending money on myself.

This is a big behavioral shift for me and something I have had some success in but, to be honest, it is something I am still working on.

See:
How much passive income is enough?







Well, nothing is set in stone, of course.

After I turn 55, there is still the possibility that I would continue to make voluntary contributions to my CPF account yearly as long as I am able to, everything else remaining equal!

Eeeeeeks!

What has happened to AK?

Mental condition got worse!

Well, some readers might remember this blog from mid 2017.

See:
CPF members above 55 should use it as a savings account!







See why I should continue to make voluntary contributions to my CPF account after I turn 55 as long as I am able to?

So, does this mean I will go nuts saving money in my old age?

Well, notice that I said I "should" and not I "must" continue to make voluntary contributions?

Also, these voluntary contributions might or might not be up to the annual contribution limit.

I did not say I would not be making withdrawals from my CPF account then either.

Post age 55, I am going to cut myself some slack.

Post age 55, I would play by ear instead of making yearly voluntary contribution to my CPF account a strict requirement.





Ah, AK's mental condition is not as bad as some might fear it seems.

Hurrah!

Of course, I don't know if my mental condition would worsen as I age.

Ahem.

Anyway, if interest rates remain what they are now, after age 55, it is probably a good thing to remind myself to think of the CPF as a savings account with higher interest rate.

The CPF is not just an investment grade bond and an annuity.

What, you don't know that is how the CPF provides us with some financial security?

See:
This guy has $800K in CPF savings.






People tell me I am worrying too much and I have an inkling that they are right.

This is especially when I have a relatively big safety net in the form of CPF savings.

We should take full advantage of our CPF membership.

That is the smart thing to do.

Yes, we want to retire smart.

Remember this blog?

See:
Don't do silly things and we can retire smart too.







CPF can be our best friend in our golden years if we nurture the friendship.

Now, that is the honest truth.


Believe in yourself.

Believe that you can do it too.

Believe that it is so and you will have the strength of a thousand men!

If AK can do it, so can you!








Recently published:
Voluntary contribution to CPF MA in 2020.

You might be interested in this:
Insure against longevity risk but not like this.

Smart money exiting US hospitality sector?

This is a blog to share some food for thought regarding the US hospitality sector.

It is going to be partly about what I picked up from someone who seems to be in the know.

It might or might not explain in part why there were two IPOs of US hospitality assets in Singapore earlier this year.

As usual, remember that it is just me talking to myself here in ASSI.

Of course, don't take everything in ASSI as the Gospel truth.

It is just my perspective most of the time.





The US hospitality sector has grown robustly for a decade but incumbents are facing increasing number of challenges and stronger ones too.

So, it is not surprising that some incumbents are letting go of their assets to lock in capital gains.

It could be that rather than deal with the challenges themselves, they are passing the risks to other investors when showing off a past robust growth trajectory is still enough to attract buyers.

It could also be the case that some of the challenges are insurmountable such as the possible ending of the hospitality expansion cycle.






Some pertinent points which I picked up:

1. Very real rising operating costs and, increasingly, operators are under a lot of pressure to keep a lid on expenses.

2. The expansion cycle in the US hospitality sector could very well be coming to an end after 10 years of consecutive growth.

3. Since the Global Financial Crisis, there is a strong sense of financial insecurity and US consumers are given to eliminating vacations altogether in a recession as was seen in the last recession as half of US households spent nothing on vacations then.

Any entity holding US hospitality assets who is thinking of going asset light would be very happy to have a REIT as a captive buyer at this point when discretion could be the better part of valor.







On hindsight, the lukewarm response to Eagle Hospitality Trust's IPO might have been a sign of things to come.

Especially so when the IPO launched with a lowered offer price of 78 cents a unit probably after a less encouraging book building exercise.

A lowered offer price was necessary to give a higher projected distribution yield to make the IPO more attractive to investors.

"In EHT's IPO, no applications were received for about 60 per cent or 26.6 million stapled securities out of the 44.9 million available to the Singapore public for subscription, at the close of the public offer on May 22. 

"The subscription rate for the public offer is therefore 0.4 times."

Source: 
The Straits Times.

An IPO in which the public offer was only 0.4x subscribed?

Eagle Hospitality Trust probably made IPO history in Singapore.

Memorable but not in a good way.






Eagle Hospitality Trust's DPU is partially shielded by Master Leases where fixed rents make up 66% of the Trust's total rent.

Of course, we have to remember that Master Leases are only as strong as the lessee.

Questioning the financial strength of the lessee is probably a prudent thing to do.

Master Leases also have the possible effects of inflating asset valuations and masking the real ability of an asset to generate income.

Without the fixed rents provided by Master Leases, ARA Hospitality Trust's DPU performance could possibly be a clearer indication of what things are probably like on the ground.

ARA Hospitality Trust's DPU missed forecast by a wide margin in the face of challenging conditions in the US hospitality sector and not due to any major internal issues.

"ARA H-Trust On Wednesday separately reported DPS of 1.77 US cents for its third quarter, 11.5 per cent lower than the 2.01 US cents figure forecasted in its IPO (initial public offering) prospectus.

"This comes after overall supply growth outpaced demand growth in the upscale select-service segment for the first three quarters of fiscal 2019, it said."

Source:
The Business Times.





Are these reasons enough to explain the seemingly irrational and repeated insider selling even at a huge discount of more than 40% from the IPO price and in large chunks?

Maybe but probably not.

Of course, we are referring to insiders of Eagle Hospitality Trust, specifically those who sold some hotel assets to be injected into the Trust.

Money should go to where it is treated best and smart money probably know where to go.

Eagle Hospitality Trust could be a good investment for income but just not good enough for the insiders who reduced their stakes aggressively.

Is this an optimistic statement about what has happened at this point in time?

Probably but maybe not.







I am ending the blog with a couple of video clips.

The first one is about hotels in the USA.

Titled "Selling Hotels 2020", the video clip has some interesting insights.

"The buyer pool for value add properties is a lot deeper than the buyers that are looking for stabilized income properties." 






The second video clip is just for fun and laughter.

Ho ho ho!

Alamak, how come like that?

Support SPH a bit lah. ;p








Related post:
His plight and my philosophy.

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IREIT Global is going to Spain!