Investing in the stock market makes you a gambler!

A friend told me that he found it hard to explain to his parents that investing in the stock market was not gambling. 

They were always telling him to stop gambling in the stock market. 

To that, I said that his parents were right. 

He was shocked.

Why did I say that?

Well, all of us have our own perceptions and, to us, our perception is reality. 

Remember the story about the frog and the fish which shared a pond? 

When the frog told the fish that there was a different world outside the pond, the fish didn't believe the frog.

So, I told my friend that his folks were probably not able to understand concepts they had never heard of in their lives unless we put across the ideas in a way that they could relate to in everyday life.




I came up with this:

Try telling them that many rich people got rich through having successful businesses. 

I think they can understand this. 

Just give them some local examples which they are familiar with. Breadtalk and Old Chang Kee, perhaps.

So, if they want to be rich, they could start businesses too and hope to succeed. 

However, it is probably very risky and most of us do not have the capital, the know how or even the inclination to start our own businesses.




Of course, they could always be partners in a business venture and hope that the managing partners are capable enough to succeed and honest enough to share the fruits later on.

Now, at this point, tell them that the stock market is filled with businesses which they can become "partners" in. 

They just have to pick the right businesses. 

Right businesses? 

Yes, the ones with capable and honest management who are likely to succeed and share the fruits with them.




Well, my friend talked to his parents again and told me that although his parents are still sceptical about the stock market, they agreed that what he is doing seems less dicey compared to gambling. 

Of course, there is more to investing than what has been said but it is a start and my friend is happy enough.

If you find yourself in the same boat as my friend, you might want to give this approach a try. 

It could work for you too.

Related post:
Wealth creation in the stock market.

June holidays go where? Bangkok?

Some of us book holidays way in advance to get better prices. Well, if you did not do this and if you are thinking of an impromptu trip this month, you can still get very good deals!

4D3N Free & Easy Stay at FX Furama Makkasan Hotel, Bangkok - Includes Return Flight + 2-Way Airport Transfer. $168.00.

3D2N Free & Easy Stay at 5-Star Amari Watergate – Includes 2-Way Air Ticket by Tiger Airways + 2-Way Airport Transfer . S$ 277.00

Go on a trip with your family and enjoy Bangkok! Where to find such good deals?

Follow this link to enjoy: Discounts!

Related post:
Value for money holiday ideas!

AK71 bought healthy lunch!

Yes, I didn't just have a healthy lunch, I "bought" a healthy lunch.

For those who say I am not helping the economy by bringing my own food to work everyday, today, I did a good thing for the economy! I bought lunch from the canteen!

Brown rice with a big piece of tofu and lots of green chilli.

Brown rice is a good source of vitamin B. It is high in fibre and has low glycaemic index.  Tofu is a good source of protein without the cholesterol. Green chilli is good because it is, er, free!

Cost: $2.20

Related post:
Having an extra $1,200 a year!

Polish your own car and save money.

For those of us who drive, it is quite common to see those kiosks in car parks which offer to wash and polish our cars for $40 or so. Then, if we become "members", we get a member price ($28?) and this would involve signing up for a "package" which requires us to pay in advance for a few sessions.

I have always wanted to try these and approached one kiosk a couple of weeks ago. The old uncle manning the kiosk put me off with his attitude. Business was very good, I guess.

Anyway, after almost 3 years, the bonnet of my red colour car was looking washed out. Seriously, it puzzles me why the bonnet was the only part of the car that looked like it was dying. The rest of the car, after a good wash, would still look pretty good.

Yesterday, when I went shopping with my sister, I decided to buy a bottle of car polish. I didn't want those heavy wax type which I have used before for my previous cars. Those really worked up a sweat. I saw on TV that they have those spray on ones. Spray, spread and buff. Looks easy. Cost: S$12.00 only.

I went home, washed the bonnet and proceeded to spray, spread and buff. Since it was the first polish in almost 3 years, I did it twice over and when I was done, I was perspiring. Good work out!

The car looks better now although not showroom condition.

I am sure I still have plenty of polish left in the bottle. Should last a few more years.

So, if you are thinking of giving your car a polish, maybe you could try doing it yourself this weekend. Save money and get a good workout at the same time.

Used car dealers in Singapore: Any recommendations?

I have a very good friend who is thinking of buying a used car. For some reason, he thinks that I would know something about buying used cars. I think it is because I am such a frugal person.

Unfortunately, when it comes to cars, my preference has always been to buy new. I know. I am terrible in this department.

Anyway, this is a call for help. Please share any recommendations or warnings which you might have about used car dealers here in Singapore.

I guess this could also be a resource for readers who might be looking to buy a used car in the near future too. So, although it has nothing to do with investments and with being financially prudent, here goes my cry: HELP!

一百万 : $1,000,000!

Since I am in the mood, here is another Hokkien song. This one has English subtitles:



"I will buy a car, a house, a shop to collect rent, lead a carefree life, walking the dog!"

Related post:
Be happy!

欢喜就好 - Be happy! (UPDATED.)

This is a song I have always enjoyed.

Apologies to readers who do not understand Hokkien or could not read Chinese.






To those who understand, I hope this brightens up your day. :)

On any issue, there will always be different opinions out there.

On any policy, some will say it is good and some will say it is bad.

It is important to remember that opinions are not facts. 





We would do well to search out the facts and not be swayed by opinions.

AK anyhow talking to himself as usual.

Be happy!





Related posts:
1. A simple concept.
2. Happiness in 2012.

Where did I go wrong? Reply from AK71.

Hi JB,

Thanks for taking the time to write everything in such great detail. I will have to tell you that I am not qualified to give advice or guidance. I can only share my opinions.

Regarding "high could go higher" and "cut loss", these are things we hear people who trade the market using TA might say. They are not wrong but if we choose to learn the techniques of any school, we must learn them well.

I am not well versed in this school but I know that what the school teaches has worked for many people. Just have to follow the rules. For one thing, a stop loss is probably activated when prices fall 10% and not 50%. So, I guess you maybe didn't have enough practice and you didn't master the techniques. Perhaps, you did not have the discipline to follow the methods taught by this school.

As for China Taisun, it is easy to simply generalise S-Chips as untrustworthy and to avoid them at all cost. Indeed, that is the easiest approach to S-Chips. If we cannot trust what they show us in their books, then, how do we do any FA on them?

However, I am not saying that all S-Chips are bad and I have invested in some as well with good results. What I have done that is crucial in my S-Chip investments is that I limit their size. Combined, they are never bigger than 10% of my entire portfolio.

FA is important but it is also equally important not to put all our eggs in one basket. Things could go wrong even in the best companies. Even blue chip companies are not invincible. Think Chartered Semicon. I believe that if your exposure to China Taisun had been smaller, it might have been less traumatising for you.

You might actually have thought of the things I have shared here. Nothing mystical. Just a bit of common sense. :)

All of us are made differently. Some of us have the temperament to be traders and some to be investors. So, we must know ourselves.

As for FA, learn from an expert. Go to my blog's right sidebar and you will find a section labelled "Food for Thought". There are many good options but you might want to zoom in on "5 rules for successful stock investing" for starters. :)

Read JB's letter to me: here.

Related posts:
1. What should I do? A letter from a 64 year old retiree.
2. 5 rules for successful stock investing.

Where did I go wrong? A letter from a reader.

Hi AK,

This is JB here. I hope I am not too much to ask for your guidance and pointers. In terms of TA and FA , I am far from you and hope you can 'unknot' some of the questions I have in my mind for the last few years.
 

A little background of my stock investment journey.

 

 

I started off as an ignorant stock investor or so call punters in 2006 with some motivation from a friend that Mr market  is like Fortune God who gave out money every other days. In hindsight , it was the crazy euphoric market then. Subsequently, I attended a course that taught us about trend is your friend and when stock break resistance is a good sign. Buy high, sell higher. And when market drop, must cut loss. Again, I only cut after the stock has plunged like 50%. :(

 

 

Of course, this whole episode ended sadly with losses that pain me till today.

But I am not a gambler, I know I have to learn so i went back to books to learn. After reading numerous books, and looking at charts, I realised there were so much to learn about Mr Market than just the 2 day course. The course is just a tip of the ice berg. (felt so cheated)

Nevertheless, I learnt about FA and TA. First to use FA to choose the company to invest , then use TA to enter. That started part 2 of my stock investment journey in 2009. Looking back, I guess most stocks you buy then can make money if hold till today.

 

 

But sometime in nov2010, instead of diversifying into a few blue stocks, I thought if I can do some due diligence in FA, I can channel all funds and buy a good stock that is cheaper and hold. After some research then, I found this company China Taisan.

 

 

FA China Taisan in Nov 2010:

1) Continuous growth for the last 3years. with QoQ 10-25%. EPS also grow. P/E4 or less ,  dividend 2%

2) Textile industry start to rebound with asian games in guangzhou in the pipeline

3) Just had TDR listings , alot of cash

4) Managment buy in and company share buy back.

5) broker AM fraser indicated TP25cents

6) Singapore adviser to management- DR Felix Ong (who was the boss of Enporis )

 

 

I bought alot at 0.195 and continue to average down to 0.17 till the scandal for China Gaoxian happened. It affected the general sentiments.

Attended AGM meeting in April2011. They assured us company will be profitable for the year amid unforseen circumstances.

 

But the share got shot down further until i got to admit defeat that perhaps I have spotted the wrong one. Hence, I sold off at 0.10. I have loss money and my confidence too.

 

 

Even until today, given the same circumstances, I always ask myself what would  I do differently? Or are there some areas I need to improve myself.

 

From the checklists that I have mentioned above, Ak, are you able to help me identify where I go wrong?

 

 

Your insights are greatly appreciated.

Thank you.

Await your reply.

Warm regards,

JB

The next blog post will be my reply to JB: read it here.

Be cautious while climbing the S-REIT tree.

In the last few years, I have stayed positive on S-REITs and reaped the benefits. In a blog post just a few months ago, I said that I was no longer as positive about S-REITs but I had not turned negative on them either. 

Instead, I was quite simply cautious about S-REITs as investments for income. See: Never lose money in real estate or REITs?

To recapt, at that time, AIMS AMP Capital Industrial REIT was trading at $1.46 a unit and Sabana REIT was trading at $1.12 a unit. Fundamentally, if nothing has changed in the businesses of these REITs from then to now, if I was cautious then, I would still be cautious now. 

This is why I have not added to my long positions even as prices retreated from the highs of $1.88 for AIMS AMP Capital Industrial REIT and $1.385 for Sabana REIT.

I am still invested in the REITs because I would be hard pressed to find alternative investments that would give me the returns that they do. This reflects my thinking that in the shorter run, these REITs are still good investments for income.

However, there is no doubt in my mind that, just as the REITs enjoyed the good fortune of the real estate sector in recent years, they will also suffer the downturn that is sure to come. So, to add to my already sizeable investments in these REITs is not a good idea.

I revealed in my year end report for 2012 that I had started moving resources away from REITs into what I felt are undervalued stocks. I think regular readers know which few stocks I have been blogging about. 

Moving house is never fun and the transition I am making is also not fun because it means giving up on something that is more immediately satisfying (i.e. certain distribution income) for something that is less so (i.e. possible capital gains).

Nonetheless, this has been my plan for many months now and I am staying the course. While I do this, the dependable and regular income from S-REITs is a constant source of comfort. This income, however, cannot be relied upon indefinitely as the still benign conditions are showing signs of change.

Having said this, in the last few trading sessions, as the unit prices of S-REITs declined rapidly and in large magnitudes, short sellers had a ball of a time. Shorts will have to be covered and the decline in unit prices will come to a halt and rebounds are to be expected. 

So, it could provide trading opportunities for long only investors.

In all that we do, stay pragmatic and do not be overly optimistic or pessimistic. We want to continue loving something only if it is still worth the loving and keep in mind that money should go to where it is treated best.

With the spectre of rising interest rates as the U.S. housing market and economy recover, we should naturally be concerned about interest rates in Singapore because we know what higher interest rates will mean for REITs. 

So, even as we stay invested in S-REITs, think about how we should not throw caution to the winds.

S-REITs are no longer the low hanging fruits they once were and if we are not careful, we could end up with some pretty expensive buys and the recent price declines probably caught quite a few unwary investors. 

To expand on the analogy of low hanging fruits, we do not want to be stuck high up in a tree with no way of coming down.

Related posts:
1. Is this the start of a bear market? What to do?
2. 2012 full year passive income from S-REITs.
3. Do not love unless it is worth the loving.

Barclays tips accumulating S-REITs on dips
Friday, 31 May 2013

© 2013 - The Edge Singapore

Increasing interest rates will bring prices down to earth (Don't think and grow rich!).

UPDATED (JULY 2018):






"Interest rates are like gravity in valuations. If interest rates are nothing, values can be almost infinite. If interest rates are extremely high, that is a great gravitational pull on values and we had that in the early 1980s." Warren Buffett
-----------
I read the opening paragraphs of the following article and got rapid heart palpitations:

"Boomers lost a significant chunk of their retirement nest eggs in the recession, but it was members of Generation X who were really hit the hardest, according to a report released Thursday.

"If they don't start paying off debt and saving more, Gen Xers (those between the ages of 38 and 47) and younger Boomers (those in their late 40s to mid-50s) are on track to retire financially worse off than the generations before them..."

..




I am a Gen Xer!

Reading on, I realised the author was referring to Americans. 

Whew! That is a relief!

However, what was described in the article could happen to Singaporeans too. 

Don't be too complacent. 

Things look rosy here now but it wasn't too long ago when they weren't.





I know friends who think that Singapore's economy will continue to boom and investing in real estate here is a no brainer as prices will only continue to go up. 

Well, I am not saying that they are definitely wrong but it would be prudent for them to contemplate the possible downside.

Anyway, to grow rich, what can we learn from the American experience? 

Don't think!

Yes, don't think of 3 things. 





Constantly remind ourselves:

1. Don't think that cheap money is here to stay.

Gen Xers were also plagued by significantly higher debt levels, including mortgages, auto loans, credit card and student loan debt -- much of which was accumulated in the years leading up to the recession.





2. Don't think that the value of real estate will only go up.

And while only two-thirds of Gen Xers owned homes in 2010, those who did saw their median home equity plummet by 27% during the past three years.





3. Don't think of ever stopping to save and invest for our retirement.

By the end of the recession, Gen X held investments, retirement plans and savings with a median value of just $14,500, down from $19,382 in 2007.... Including Social Security benefits, Gen Xers are projected to have enough money in retirement to replace only half of their annual pre-retirement earnings.





In our personal finances, if we save more, invest wisely and have less debt, we cannot go very wrong.


Read full article: here.




Related posts:
1. From rich to broke?
2. Slaving to stay in a condominium.
3. To be a happy peasant.
4. Millionaire or not, plan for retirement.
5. Young working Singaporeans, you are OK! Really?

High class ice cream without the high price.

I have two big weaknesses when it comes to food: chocolates and ice cream. Put the two together and it is a killer combination as far as I am concerned!

Fairprice Express, the supermarket chain found at Esso petrol stations is running a "Buy 1 Get 1 Free" promotion for this particular ice cream:

So, as you might have guessed, I gave in to the triple temptation of chocolate, ice cream and reduced price.

The box has a cute little badge at the bottom left hand corner:

Wah! Environmentally friendly ice cream! Eat with less guilt!

The box opens like a treasure chest. Oooh, that's different:

It is a bit like a Black Forest Cake but without the cake:

After I was done, I took a closer look at the box and found that the ice cream was produced in Germany! Wow! Atas!

Price: $4.90 for two.
----------
Added on 7 August 2017:

Burp.

Hock Lian Seng: Buying on weakness.

In my last blog post on Hock Lian Seng, I said that we could see its share price moving lower and it has moved lower. 

Do I believe that this is the lowest it could go?





Well, I certainly do not know if the stock price will stop declining although I will say that it could have found support. 

We can see this if we draw a trendline connecting various lows. 

Also, the higher low in the CMF gives us a positive divergence against a declining share price.

More likely than not, there will be a host of positive catalysts for Hock Lian Seng's share price to move higher but investors must be willing to wait. 

While waiting, the company's payment of meaningful dividends to shareholders annually will provide some comfort. 

If the dividend per share should be a more conservative 1.5c, with a share price of 26c, we will have a yield of 5.77%.





The weakness in Hock Lian Seng's share price allows me to buy more with a bigger margin of safety and any further weakness will create more opportunities to accumulate.

Related post:
1. Hock Lian Seng: Dividend of 1.8c per share.
2. Hock Lian Seng: Insider buying.

Show Luo and his hair.

I am not a fan of Show Luo, nickname Xiao Zhu (Little Pig), but I was told that he is very particular about his hair. Quite the diva, apparently.

I couldn't stop laughing when I stumbled upon the following photo:

I wonder if EC House can do this for me. I want to be fashionable too.

Had a good laugh?

Whoever is responsible for this, thanks for brightening my day. :)

More blog posts to tickle you:
1. Tea with AK71: Funny!
2. Holey curry puff!
3. A short fairy tale!
4. Male cheerleader brings it on!
5. This kid can dance!

Old Chang Kee: More free curry puffs on the way!

In an interview earlier on in the year, I talked about Old Chang Kee as being a very rewarding investment for me. I also mentioned how a 5c dividend which went XD in January was a pleasant surprise.

Well, Old Chang Kee announced a final dividend of 1.5c for FY2013. This is nice although I will be receiving half of what I would usually receive in absolute amount since I divested half of my investment in the company earlier on in the year.

Amidst rather more difficult business conditions, Old Chang Kee's management has shown a high level of business savvy as they improved production efficiency, closed non-profitable outlets and revised prices last December. As of March 2013, it had a total of 76 outlets in Singapore which is 6 outlets lesser than a year ago.

Net profit improved from $4.51m to $4.98m and EPS improved from 4.75c to 4.96c. These figures are on the back of improved gross profit margin from 60.1% to 61.4%.

What is more impressive is that the $4.51m net profit for the preceding year was based on a 15 months financial year because Old Chang Kee announced a change of its financial year in August 2011.

So, if we were to assume an average net profit of $1.245m per quarter in FY2013, over 5 quarters would give us $6.225m. This means that net profit increased almost 40%, year on year. Impressive!

Business costs are expected to remain high but Old Chang Kee's management have, so far, impressed with their business savvy and with the brand deeply entrenched in Singapore, it is reasonable to expect the company to continue doing well.

At 56c a share, PER is 11.29x. Not cheap but not expensive either. I would say it is fairly valued. What am I going to do now? Wait to receive the dividend and maybe buy some curry puffs tomorrow.

Related posts:
1. Old Chang Kee: Have my curry putt and eat it too.
2. Old Chang Kee: Initiated long position at 26c.
3. Tea with AK71: An audio interview.

What should I do? A letter from a 64 year old retiree.

I am sharing an exchange I had with a reader a few days ago because I think others could possibly be interested in it:

Hi, AK71,

1.        I have been following your blog for quite some time and find your explanation and reasoning of the stock market very interesting.  Not many people are so frank like you that are willing to give an in-depth advice of the financial market.    So far, I did not pen anything in your blog to ask for your advice, as I could not express myself well in writing. 
 

2.        I would like to seek your kind advice to set up a reasonable and proper stock portfolio to earn passive income.  I am a 64 years old retiree and living on passive income from dividends from my 44 stocks in my portfolio.  Overall, I have made a capital gain of about 15 - 20% from these 44 stocks (with some profits and some losses for each stock).    I know that 44 stocks are very difficult to monitor but I do not know how to diversify them.  Each time the market drop, my heart drop too.  At this age, I cannot effort to loss much of my hard earned money, as I do not have time to wait for the market to recover again.
 

3.        I would appreciate your kind professional advice.  Thank you.

My reply:

Hi J,

I really hate to disappoint you but I am not a professional financial adviser. I would suggest that you find professionals and engage their services.

However, what would I do if I were in your shoes? This is the part where I talk to myself. Please ignore me.

First, understand my motivations! I am in my 60s and retired. I am not able to suffer another market crash for more reasons than one. I am interested in a predictable flow of passive income.

Secondly, go through my portfolio of 44 stocks. Compartmentalise the investments into those that match my motivations and those which do not.

Thirdly, keep the investments which match my motivations and think about possibly increasing exposure to these investments when prices are softer. Sell those investments which do not match my motivations at an opportune time and never look back.

Fourthly, money from divestments should go into a dedicated "war chest" to buy more stocks which match my motivations during times when Mr. Market goes into manic depression.

Throughout, I have to understand that this is the general framework that I must keep in mind but being a framework, it will overlook finer details which could influence my decision to invest or to divest in specific instances.

Best wishes,
AK

Everyone has different circumstances and motivations. There is never a universal solution to all problems. If we understand our motivations, we will know what is most appropriate for us.

Related posts:
1. A letter from a 66 year old retiree.
2. A letter from a reader in his early 20s.
3. A letter from a 24 year old fresh grad.
4. Voices, noises and choices.

City Harvest Church: A personal account.

One story I have been following is City Harvest Church's.

I am just so amazed by how so much money was accumulated and how so much money was misused. $50 million!

Just now, I was directed to a personal account shared by someone who used to be a Ministry Member of the church.

The church used peer pressure very successfully to get people to give to the building fund... from getting people to pledge and using testimonies... I remembered people giving their hearts out for the Jurong West building. Never once, were members informed that monies from the Building Fund were used to fund Sun Ho's career, and certainly not about monies being invested in Xtron or Firna.

CHC and its pastors have lost it. They have twisted and traded the gospel for another, and the astounding thing is that, they still believe they are doing the right thing.

Read the full account in Facebook: Assi AK.

Having an extra $1,200 a year!

I like plain white porridge with a bit of ikan bilis for dinner regularly. Last night, for some reason, I was not feeling hungry and, so, the porridge was stored in the fridge.

Today, I brought the porridge and ikan bilis to work. Sprinkle the ikan bilis on the porridge and voila:

For tea later, I will be having my regular oatmeal which is what I usually have for lunch. I have taken to adding soya bean milk to my oatmeal these days to get some extra protein and good taste.

Healthy and money saving meals.

If you have not tried bringing home cooked food to work, maybe you want to consider it. Depending on where you work, you could save up to $10 a day on meals! Just bringing your own food to work half the time could mean saving $100 a month on meals or $1,200 a year.

An extra $1,200 a year in your bank account? Very nice!

Related posts:
1. 7 money habits of AK71's.
2. Home made sandwich.
3. Barley and winter melon.

Asian Pay Television Trust (APTT): 201 lots.

Asian Pay Television Trust (APTT) was my first IPO application in donkey years. So, you can imagine I was somewhat excited.

When I heard that people who applied for 100 to 499 lots would get 80 lots if successful, I was even more excited! I applied for 201 lots!

Apparently, only 7 out of every 50 applicants were successful for the range of 100 to 499 lots. Chances were slim and chances were even slimmer for people who applied for 99 lots or less.

Chances improved markedly for those who applied for 500 to 999 lots. 33 out of every 50 applicants were successful and they would get 374 lots each! Wow!

This was an IPO that favoured the bigger players, it would seem. Be ready to either make a big killing tomorrow or be killed big time. I think the former is more likely.

Congratulations to all successful applicants!

Related post:
Asian Pay Television Trust: IPO

Sex for grades case: Guilty!

On so many occasions, I was simply amazed by how shameless some people are. Take the instance of Tey Tsun Hang, the disgraced NUS law professor. To any reasonable person, what Tey did was quite obviously wrong but instead of showing some shame and admitting his guilt, he insisted that he was innocent which resulted in a trial spanning 5 months.

For someone who knows the law but chose to break it, there can be no leniency. He should be given the maximum sentence of five years in jail and the maximum fine of S$100,000 on each charge, especially when he has shown no remorse.

Read: Sex for grades case.

SPH: A REIT investment.

It was almost a year ago when I mentioned in a blog post that investing in SPH could be better than investing in a retail S-REIT. Then, in March this year, news that SPH could establish a REIT sent its share price rocketing. Yesterday, more details were released and we could see a SPH sponsored REIT by July 2013.

From what is available in the news, SPH will hold 70% of the REIT. This is good news for the future REIT unit holders because a sponsor with a big share of units is more likely to have its interests aligned with those of smaller unit holders.

So, how will SPH shareholders benefit from this? The most obvious benefit is a special dividend of 18c per share, post IPO. A longer lasting benefit is ownership of an SPH with an even stronger balance sheet with NAV increasing and net gearing reducing, both significantly.

In terms of income, post IPO, SPH will receive a 70% share of income distributions from the proposed REIT and will also collect a fee as the manager of the REIT.

For me, as a shareholder, apart from doing nothing and collecting dividends which is pretty much what I have been doing for so many years, I will also look at possibly making an application at the IPO of the REIT.

I like the assets (i.e. Paragon and Clementi Mall). I like the sponsor. I like how the sponsor will retain a 70% stake in the REIT. Next, I will need to know the estimated distribution yield and gearing. If they compare favourably to established retail S-REITs, then, I will be making a beeline for the nearest ATM.

The last I checked, the distribution yield of established retail S-REITs ranges from 4.5% for CMT to 5.2% for FraserCT. Gearing ranges from 30.5% for Starhill Global to 40.9% for Mapletree Commercial.

So, if SPH REIT were to offer a distribution yield closer to 6% and with a gearing closer to 30%, Mr. Market should respond more favourably.

It seems that boring SPH has become a more exciting investment.

Related post:
SPH: Better investment than retail S-REITs.

The mystical art of wealth accumulation!

The wall next to my desk doesn't need a fresh coat of paint because it is pasted over with notes, cards and newspaper cuttings! 

Someone told me that if everyone was like me, the wallpaper companies would go out of business.




Today, I took down some of the "wallpaper" and I found a newspaper article I cut out in the year 2003. 

It was about ST Engineering, a company which I have been a shareholder of for more than 10 years by now.

Here is the article in question:

Today, ST Engineering's stock trades at $4.17 a share and it has been paying out dividends annually without fail since I first became a shareholder. 

I cannot remember how much exactly from year to year but, off the top of my head, an average of 15c annually in dividend per share cannot be too wrong.

This is one investment I have fond memories of and not only because the dividends it paid funded my annual holidays in Japan and Korea for many years in a row.

In case you are wondering, yes, I am still holding on to those shares I bought at $1.55 a piece more than 10 years ago.




What would have happened if I had decided to spend all that money all those years ago on a brand new luxury watch instead of investing in ST Engineering? 

Isn't there something to be said about delaying gratifications and investing for income?

Many times, people are sceptical about what I have achieved. 

Well, they can be sceptical all they want but once they are determined to make an improvement to their personal finances, once they try out some of the ideas I have blogged about, they will see for themselves that the magic that AK has, they have it in them too. 

Suddenly, it isn't so mystical after all.




Remember that AK has done it and you can do it too!

Related posts:
1. The very first step to becoming richer.
2. Do not love unless it is worth the loving.
3. Why a wealthy nation cannot afford to retire?
4. 7 steps to passive income from the stock market.
5. Create more passive income with limited capital.