Dispute over HDB flat inheritance. Alamak! Why like that?

I have blogged about how we should not think of children as money trees before.

See:
What is our attitude towards children?

I have also blogged about how children should not treat parents as their ATMs before.

See:
My parents are my ATM.

When it comes to money issues, even family members can become enemies.

These topics are so sensitive and views are so diverse that whenever I blog about them, I am likely to get some negative feedback.

Some readers even told me they had to stop reading my blogs for a while to recover from my blunt and, what they thought, unpalatable views.

This is why the Chinese people say:

谈钱伤感情

When we talk about money, it hurts feelings. 

Hard truth.

When I read about someone who was the eldest amongst three children complaining online about how he was not in his parents' will, it was somewhat poignant. 

This is because I am also the eldest with two younger siblings in my family.

Apparently, being the eldest child, he gave his parents the most financial support. 

He felt unloved and hurt that they had excluded him from their will.

What's in the will?

A HDB flat and nothing else.

His parents told him that he already had a flat of his own while his younger siblings didn't.

He went on to lament that he didn't ask to be the first born child and that, perhaps, he should have been more selfish.

Perhaps, he should have given his parents less financial support and put more money towards preparing for his own retirement instead.

I have said before that we work towards financial freedom because we want to have options.

We want to have the freedom to choose what we want to do with our time without having to worry about money.

Unfortunately, there are things in life which we have to live with.

All we can do is to make the best of the situation.

Sometimes, life just throws lemons at us.

I have said before that we have to be a bit cynical in life and being calculative is not a bad thing per se.

However, when it comes to my parents, this does not apply.

When I think about providing for my parents so that they don't have to worry about money in their old age, I do not think of possible future returns.

Children being nice to their parents so that they could get into their parents' good books all in the hope of receiving financial inheritance?

I have seen it in Chinese drama.

It was just drama, I thought.

Who thinks that way in real life?

Well, now, from time to time, I am reminded that some people actually do.

What my parents choose to do with their assets is their business.

I might have opinions which I would share with them but the final decision is theirs.

In fact, in a recent conversation with my mom, I told her to will everything to my two younger siblings.

She asked me why I didn't want her money?

I think she might have felt surprised and, maybe, even a bit offended.

I told her I didn't need her money and that she should give it to whoever might need it more in the family.

In fact, I told her she should try to spend more money on herself first.

Why shouldn't she?

It isn't a bad way to think.

Or is it?

For sure, I am not in the complainant's shoes.

I just felt the blogging bug bit me when I read the story because we are both the eldest of three children and we both provide the most financial support to our parents.

The complainant is going to feel miserable if he does not snap out of this feeling that he should be rewarded financially (eventually) for what he is doing for his parents.

If his parents were to find out, they would feel miserable too.

At the end of the day, if he is not hurting for money, it is just money.

I always say that if a problem can be solved with money, it really isn't a problem if we have the money.

There are more important things in life than money.

“Resentment is like drinking poison and waiting for the other person to die.” Carrie Fisher.

References:
1. Worried as dividends reduced.
2. Inflation and my budget.
3. To better mental health.

T-bills 3.98% p.a. yield and March strategy.

This blog is a continuation of my blog published last night titled:

March dividends & SSB 3.15% p.a.

The latest 6 months T-bill auction's numbers are in.

Cut-off yield: 3.98% p.a.

In a recent blog, I said that the US$ has strengthened against the S$ and yields have also moved higher on the front end of the curve.

My expectation was for a higher cut-off yield for the 6 months T-bill and the auction did not disappoint.

I applied for the T-bill, putting in a non-competitive bid with some SRS money raised from the sale of my investment in SATS in early February. 

That was fully allotted.

I also put in a competitive bid with some CPF-OA money. 

Why a competitive bid in that instance? 

I did not want to tempt Murphy's Law with a non-competitive bid when the CPF-OA pays 2.5% p.a. risk free.

My bid yield was very close to 4% p.a. and, fortunately, my competitive bid was also fully allotted.

3.98% p.a. is only a bit higher than the 3.88% p.a. offered by OCBC's FD promotion using CPF-OA funds. 

(That offer by OCBC ended on the 28th of February and their new offer of 3.55% p.a. for a 5 months tenure looks relatively unattractive.)

If we take into consideration that the "interest earned" is paid by T-bills at the beginning of the duration and not at the end, however, then, the cut-off yield for this T-bill looks more attractive. 

The "effective interest rate" actually exceeds 4% p.a. and it is closer to 4.05% p.a. which, at face value, is even better than what the CPF-SA is paying.

We should also remember that the "interest earned" stays in the CPF-OA where it will continue to generate passive income for me at 2.5% p.a. for the T-bill's 6 months duration.

So, what's not to like? 

To me, using CPF-OA money, it really is win and win again with this T-bill!

The T-bill will mature on 5 Sep 23 and I have made a note on my calendar so that I will remember to transfer the funds from my CPF-IA back into my CPF-OA when that happens. 

This is so as not to lose interest income which would be paid by the CPF for the month of October.

There are two more 6 months T-bills on offer this month in March with auctions happening on the 16th and 30th.

The plan for me is to place non-competitive bids in both auctions with money in my SRS account.

Apart from applying with SRS money which I earmarked earlier, I could also apply with some of the dividends coming in this month which I have estimated in the blog before this one as possibly being under $40,000.

With yields at the front end of the curve still rising, it is quite possible to see cut-off yields exceeding 4% p.a. in the two upcoming auctions.

A greater exposure to 6 months T-bills using cash on hand would slightly strengthen my portfolio's passive income generation in the month of March.

Getting more T-bills also means staying consistent in my plan to maintain a meaningful exposure to fixed income.

It is probably a good idea to remember that fair weather doesn't last forever and that throwing some defensives into our portfolio isn't a terrible idea.

It is not just about making hay while the sun shines but also about stashing a good portion of that hay away.

This higher exposure to fixed income will generate more passive income in a risk free manner while reducing volatility in my investment portfolio. 

Risk free and volatility free, T-bills fit the bill to a t.

I do very much enjoy a good pun.

Anyway, as interest rates are likely to remain higher for longer, this strategy is probably going to help my portfolio bring home the bacon for some time to come.

As an aside, you might want to eavesdrop on Warren Buffett and Charlie Munger in this video before continuing to eavesdrop on AK:

We would very likely appreciate having a meaningful exposure to fixed income a lot more if the world continues to grapple with sticky inflation and more than a handful of economies around the world sink into recession.

Singapore is a very open economy and we would probably take some collateral damage in such a scenario.

If such a scenario should materialize, having a meaningful exposure to fixed income is not only comforting but we could then redeploy the funds which were previously locked up in a gradual manner. 

This is if we have laddered into T-bills and fixed deposits which, of course, is what I have been doing. 

Source: MAS.

Using a laddering strategy, we ensure that the maturities of T-bills and fixed deposits are staggered.

If you think that this strategy allows us to have access to investible funds at multiple points in time over the next 12 months, you are right.

Long time regular readers have overheard me talking to myself many times before and would be familiar with what is coming.

Don't be overly pessimistic.

Don't be overly optimistic.

Be pragmatic which means staying invested in genuine income generating assets while preparing for when Mr. Market goes into a depression.

Yes, when and not if.

"There are worse situations than drowning in cash and sitting, sitting, sitting," Charlie Munger.

Charlie Munger said that, not me.

Just talking to myself, as usual.

Reference:
Largest investments updated.

P.S. We cannot always be right and you might want to eavesdrop on Charlie Munger in this video: