Passive income gone! Not growing portfolio!

Today, we cast our votes for the next President of Singapore.

However, my mind was somewhere else and it has been somewhere else for a few days now.

I have been thinking about some money issues.

Regular readers know that I am a worrier.

I used to worry a lot about the possibility of growing old and destitute.

Although my situation has improved over the years, I could not help but continue to worry.

Black swans do exist, after all.

So, over the years, even as my situation improved, I kept trying to grow my passive income.

To be fair, in recent years, I have become much more laid back.

I became less tight fisted with money.

Over the last 10 years, I increasingly spent more money on myself.

Over the last 10 years, I gave my parents more and more financial support.

I did these as I continued to invest more money in businesses which would generate income for me.

I have also been consistently socking away some money in the CPF and, more recently, T-bills and SSBs.

Of course, I did this in the last 8 years while lacking an earned income.

In recent years, I have been publishing blogs on how much passive income I needed yearly to do all the things I wanted to do.

I have always found writing to be helpful in crystalizing my thoughts.

It is also useful if I ever need to remind myself of why I did things the way I did.

Blogging allows anyone who might be interested to eavesdrop to do so, and it could generate meaningful discussions.

In my most recent blog on the topic, I said I needed on a yearly basis:

1. $48,000 for myself.

2. $48,000 for parental support.

3. $38,000 for CPF VC.

Of course, that $38,000 has been diverted into SSBs this year.

With a passive income of $206,000 last year as a guide, I would have an excess of $72,000 each year, all else being equal.

The plan was to continue investing for income with this sum of money yearly.

This would grow my passive income.

Then, why did I say my passive income is all gone in the title of this blog?

Well, the plan has changed.

1. I have decided to increase financial support for my parents again.

My parents are even older than Ng Kok Song or Tan Kin Lian.

No matter how optimistic I am, my parents probably have only 10 to 20 years left to live.

I want them to be able to enjoy their retirement without having to worry about money.

I will give them much larger red packets on their birthdays, Father's Day and Mother's Day.

I will continue to help by paying for some large recurring expenses.

2. I have decided to increase my annual gifts to my siblings.

This will be in the form of larger red packets on their birthdays.

I make more money than my siblings even though I am retired and they are working.

If I can help them to prepare for a financially secure retirement, why not?

3. I am not a Christian but I like the spirit of giving.

So, I will be giving red packets to my family on Christmas.

I started doing this last year, but I will increase the amount of money significantly in the red packets from this year on.

In the spirit of giving, I will also make larger donations to the list of charities I have been supporting.

There are many unfortunate people in this world.

Although we cannot possibly help all of them, if we can help some of them, why not?

It is about doing what we can to make the world a better place.

4. Passive income all gone!

These are the reasons for the title of this blog.

OK, probably not all my passive income is gone but it will be mostly gone.

Consumed.

So, you can imagine that I won't have very much passive income left to increase the size of my investment portfolio meaningfully henceforth.

Having said this, I will continue to making VC to my CPF account or buy SSBs yearly.

This will not change as I believe having some risk free and volatility free investments for income is simply being prudent.

So, how do I feel now that I have decided on all these?

I feel good.

Really good.

It is like a lightbulb switching on in my mind.

In a recent blog, I said early retiree AK still needed $136,000 yearly.

Would I be growing richer or poorer?

That provided the seed for this blog post.

We only need so much money in life and the rest is for showing off.

Reference:
F.I.R.E. AK still needs $136,000 annually.

High yields to stay? T-bills paid 3.73% to 4.2% p.a. so far.

The next 6 months T-bill's auction is happening this Thursday.

So, if we are building or maintaining a T-bill ladder, don't forget to put in a bid.

I will be putting in a non-competitive bid again.

No reason to agonize over how much to bid for in a competitive bid when chances are any cut-off yield is likely to be higher than offers from the banks for a 6 months fixed deposit for now.

I just produced a video on a 3.6% per annum offer for a fixed deposit but that is for a 9 months tenure.

This is the link to the video for readers who do not follow me on YouTube:

Locking in 3.6% per annum for the next 9 months.

Cut-off yields for 6 months T-bill so far have stayed above 3.7% per annum.

However, it seems to be declining.

In January, we saw a 4.2% cut-off yield.

This month, we saw 3.73% which was the lowest cut-off yield this year.

Like I said in a podcast, interest rates are higher now but they are unlikely to stay high forever.

As investors for income, I did not get to where I am by relying on fixed income to grow my wealth.

However, I am not going to reject relatively attractive risk free and volatility free returns while they stick around.

If AK can do it, so can you!