Plans for 2025. Hoarding cash for a crash?

It has been almost a month since my last blog post.

I am serious about becoming more laid back and being less active in social media.

The garden which I used to enjoy taking strolls in has become a minefield.

What to say?

What not to say?

How to say what I want to say?

Talking to myself has never been more stressful.

I have enough stress to deal with in my life.

Don't want to have to deal with more stress especially when I am not being paid to do so.

Yeah, at least we are paid to deal with stress at work, right?

I believe that many local financial influencers will have to be licensed and regulated because they are being paid for promoting financial products and services constantly.

From an interview conducted by CNA, I believe that it was one of the tests set out by MAS.

In case you are you interested, here is the video by CNA:  

Not the best interviewer nor interviewee but just focus on the substance, I guess.

I think the blogger they interviewed is probably one of those who would have to be licensed and regulated as her content is heavily monetized.

Well, since she and other financial influencers like her make money constantly from doing what they do in social media, they shouldn't mind being licensed and regulated.

As for me, I rather not have to deal with the hassle.

So, I will restrict the frequency of sharing and also the things which I do share in my blog and YouTube channel.

For example, in this blog, I am also going to talk to myself about why I am hoarding cash.

2024, just like 2023, has been kind to me when it comes to my investment portfolio.

Well, there are still a couple of weeks left to 2024 but I guess I can close my books for the year early.

Unlike 2023, I have not put any money to work in equities in 2024.

Most of the passive income I received in 2024 has been put to work in SSBs and T-bills.

I also made a smallish voluntary contribution of $8,000 to my CPF account.

CPF money for me will become cash in another 2 years from now.

Well, the money in the CPF OA, anyway.

Being paid an average of 3.0% p.a. risk free and volatility free is not bad.

So, my cash position has grown in 2024 and looks set to grow in 2025 too.

It will grow even more in 2026 when I have access to my CPF OA money.

In the meantime, I get paid reasonably well for holding more cash.

The UOB ONE Account has been good to me.

Fixed deposits in CIMB have been decent in generating some interest income too.

Just to be sure, these are not investments and I do not include them in my quarterly passive income updates which are about passive income generated by my investment portfolio.

6 months T-bills are still paying 3.0% p.a. or so.

Singapore Savings Bonds I bought in the middle of this year had 10 years average yields of 3.2 to 3.3% p.a. or so.

I am already substantially invested in the stock market and do not feel any urgency to put more money to work there.

Does this mean that I feel that the stock market is going to crash soon?

I know that some financial influencers like to make predictions as to where stock prices are going but like I always say, we cannot predict but we can most certainly prepare.

So, people can think of what I am doing as preparing for a stock market crash.

I just don't know when it is going to happen.

Of course, I also say never to be overly optimistic nor overly pessimistic.

It is important to stay invested in bona fide income generating assets and be paid while we wait.

Someone who kept saying that the common stocks of Singapore banks were very overvalued in the last 12 to 18 months and said he would wait for a crash before buying might want to do a rethink.

The fact that I have been hoarding cash does not mean that I think the stocks were very overvalued.

In fact, I have been quite consistent in saying that if we were not invested yet, we could buy some.

However, it is certainly harder to say that now.

When we look at PE ratios, it is mind boggling how the multiples have expanded for so many companies.

Earnings really have to come in much stronger in 2025 to justify these multiples.

For DBS, OCBC and UOB, their PE ratios have also risen pretty significantly.

They are now around 11x to 12x which is slightly higher than the 5 year average.

If we had a working crystal ball and if we could tell for sure if the earnings would grow enough to ensure these numbers are justifiable, then, we could buy more now.

Since I only have a bowling ball that thinks it is a crystal ball, I would rather err on the side of caution.

This is why I said earlier that my cash position is likely to grow in 2025 as well, all else being equal.

Well, it would probably grow more slowly as I am going to have higher expenses in 2025 with more money set aside for parental support.

That is another topic for maybe another day.

This is probably the last blog post before the year ends and maybe even before "Evening with AK and friends 2025" takes place on 15 January 2025.

If you are interested in the event, there are a few tickets still available and I blogged about it last month: HERE.https://singaporeanstocksinvestor.blogspot.com/2024/11/dbs-ocbc-and-uob-evening-with-ak-2025.html?m=1

Merry Christmas and Happy New Year!

Quarterly updates, expenses and social media.

For those of you who follow me in my YouTube channel, you would know that something unfortunate happened recently to my father.

So, I expect to have less time for social media.

I have also been told that I would have to be prepared for another $20,000 or so in annual medical expenses for my father.

This revelation came after I had a talk with my mother regarding her medical insurance coverage.

I decided that she should not downgrade her medical insurance coverage as we really don't know if we might be hit by large hospitalization bills in future.

This covers her preference for Class A ward if she should be hospitalized.

I have calculated that if she should be blessed with a long life, her coverage, including a rider, would amount to $20,000 per year from age 99.

Now, it is about half of that but it will increase every 2 years till age 100.

I will be paying for her.

I did an update last year on my expenses about how I need at least $136,000 a year.

Now that I must set aside another $30,000 per year, increasing to $40,000 per year over time, I would need at least $166,000 to $176,000 a year in passive income to cover everything.

I won't have as much surplus money to invest with.

Well, I haven't been doing much investing in recent months apart from parking more money in T-bills.

So, no big deal, I guess.

Then, we also have the recent speech by Alvin Tan in Parliament on financial influencers in Singapore.

They must be licensed and regulated.

See: The Straits Times.

That got me thinking.

Together with all the things which have happened recently in my life, I really don't need more stuff to worry about.

Blogging and, now, YouTube video making, are hobbies to me.

Hobbies must be enjoyable and not make me worry.

I thought of giving up these hobbies but I still enjoy them.

I also like interacting with most of my readers and viewers as I think most of them are nice people and they also understand that I am not giving financial advice.

Unfortunately, doing what I do, it is too easy for my content to be misconstrued.

Like I have said many times before, I am not running a blog or YouTube channel as a business.

If I do them for a living, then, I would not mind the hassle of being licensed and regulated.

At this stage of my life, I just want to have more fun and have less to worry about.

So, what am I going to do?

For my own sanity, I have decided to have a compromise.

I will continue to blog and make YouTube videos but only on a quarterly basis.

This would be for the usual quarterly portfolio updates where I talk about what I have done to my investment portfolio and how it has performed.

This should be pretty safe from being misconstrued as financial advice.

Depending on how things go, this could morph into a bi-monthly or monthly update but that is up in the air for now.

Going to be rather unlikely, I feel.

Why?

With all the additional expenses I am saddling myself with, I doubt there would be much happening on the investment front as I have less surplus cash to invest with.

A bit overwhelming?

No one expected these developments but things happen.

I am sure there are many people who will continue blogging and making YouTube videos in this space.

Money is an important topic, after all.

So, with many more content creators in this space than there were when I started this blog 15 years ago, I am sure my leaving isn't a big deal.

I will end this blog by saying that we should always remember what Warren Buffett said before.

"Never ask barbers if we need a haircut."

Also remember that no one cares more about our money than we do.

If AK can do it, so can you!

Related post:

F.I.R.E. AK still needs $136K yearly.