CPF savings grew almost $200K in 3 years!

I don't know if you would agree with me but I think the CPF Board has improved by leaps and bounds when it comes to communicating with CPF members.

I especially like the graphics they have produced to make things easier to understand.

Important or interesting information is clear at a glance when graphics are used well.





While waiting for the updated pie chart to be ready (see past pie charts: here), I will share this bar graph:

It is so easy to see how my CPF savings grew almost $200K in 3 years from end-2014 to end-2017!

The total amount was slightly more than $600K at the end of 2014.

By the end of 2017, it was almost $800K!





The CPF is about the government helping us to help ourselves.

For most of us, this is as close to State welfare as we can ever get in Singapore.

The government offers help.

Let us not foolishly reject it.

For those of us who play the MMORPG "Neverwinter" and have explored Sharandar, this should sound familiar.

Bad AK! Bad AK!





The growth of my CPF savings is really stunning when we remind ourselves that a big chunk of that growth is made up of contributions from the government.

Interest received in 2015:
$20,106.27

Interest received in 2016:
$21,641.52

How much was the interest income for my CPF savings in 2017?






See related post:
Helping to fund my retirement.

My CPF money forms a cornerstone in my retirement funding strategy.

Risk free and volatility free, it helps to give me peace of mind.

Confession and what AK thinks of retirement.

AK said...
"I have left behind the prescriptive world of responsibility and routine which demanded that I made regular and meaningful contributions to the establishment and clients (in ever more difficult conditions)."
(See related post at the end of this blog.)

Reader says...
I see things quite differently. I never felt the world demanded anything from me.





It’s more like what I wanted from the world. And now that I have most of what I want , I do feel a moral need to give back to this world. 

Ranging from being a good son (which you agree) to a good father/husband/friend but also to help other less lucky humans whom I do not know.

As for structure, disciplined people usually remain rather disciplined even in retirement. 

I find myself disciplined in exercise and the way i run portfolio. I am sure you are extremely disciplined on your portfolio thinking and actions too.





Structure and routine is not a bad thing even in retirement. I spoke to quite a few retirees and all speak of having some loose routine and structure. Of course no need to be siao on like during wealth forming days.

Anyway thanks for sharing. I believe each of us have different philosophies and happy that you have found your own balance! 

Was it always so stable or did you take a few years? I took about 3-4 years since retirement to reach this stage of thinking

AK says...
Ultimately, for me, financial freedom is but a stepping stone to a life of freedom.

I guess this is why I can identify with Charlie Munger when he said he wanted to be rich because he desperately craved freedom.

As I have always known what I want, it was easy to slip into retirement when it finally happened.

Mentally, I have always been prepared for it.






There are things which I have always wanted to do or to spend more time doing.

So, I am also prepared for a busy retirement.

I keep saying that I am busier in retirement than I was before.

However, I am happier because I am doing things I want to do which includes being charitable to the needy and this is something I have blogged about many times before.





Unlike you, I don't feel a strong moral obligation to give back to society but I am quite happy to contribute because I can and because I want to.

The only strong moral obligation I feel I have is to my parents.

OK, yes, you are right about having some degree of discipline and loose structure in retirement.

In my case, probably very little to the extent that I don't feel it is there. 　

Definitely not "siao on" which I probably was a little when I was a young working adult.





To be honest, I do not feel that I am a very good investor.

A fellow blogger told me before that he thinks I am financially very comfortable because I am better at personal finance matters than most people, all else being equal.

I agree with him.

Financial prudence is the foundation of wealth building and preservation.

For people who make a lot of money, if they have a modest lifestyle and save most of their money, in a relatively benign inflationary environment, they don't really need to do much else to have a comfortable retirement.






As an investor, I have an approach that is pretty forgiving if I were to make mistakes.

I also don't aim to beat any benchmark.

Again, it is all "agar agar".

Enough of KPIs at work.

I tell myself that as long as I don't do anything ridiculously stupid, given time, I should do well enough.

If I am right more often than I am wrong, given time, I should do well enough.

So, I have to be very clear what is an investment and what is a speculation.

Having said this, I do allow myself to speculate but I keep speculations relatively small.





Apologies but AK is very long winded.

Finally, to me, structure and routine are not bad nor good things in retirement.

Some people have a greater need for them and some don't.

In retirement, we shouldn't have to worry and  we should be free to choose whatever makes us happy. :)

Related post:
Financial freedom or freedom in retirement?

Financial freedom or freedom in retirement.

AK is a very responsible person and is a good role model.

I get the feeling that some people think that way.

Well, I don't think so.

I am sharing something from my FB wall here and you are welcome to eavesdrop.






AK says...
I am enjoying life now and doing stuff that I didn't have enough time to do before.

I was disciplined and thoughtful so that I can be less disciplined and thoughtful as I enjoy an early retirement.

Don't ask:

"When you have to stop working, can you afford to?"

Ask instead:

"If you want to stop working, can you afford to?

Reader says...
That make sense and was my motivation and is my justification nowadays. 

But to probe more if you are ok to share, what criteria is used to decide how you spend your time on stuff you like?

Eg for me, there are issues of still contributing, being useful, example for kids etc.






AK says...
I don't have a framework. 

I just do what I fancy doing each day.

MMORPG, gardening, aquarium keeping, family, friends, blog related activities, reading, watching documentaries, anime, K-drama, doing some physical exercises etc.

There isn't any routine per se. 





More of this one day and more of that another day?

Maybe, even doing mostly one thing some days?

If I want to, yes.

I am like a cook in a Chinese zhi char (cooked food) store, agak agak (estimate) the amount of this and that in the cooking.

Nothing exact.

Everything is by feel.

Happy (and yummy enough to eat) can already lah.








I have left behind the prescriptive world of responsibility and routine which demanded that I made regular and meaningful contributions to the establishment and clients (in ever more difficult conditions).

Not only do I not want to ever go back, I don't want a retirement life that even remotely feels like that.

AK the escapist!

AK doesn't want to be reminded of work.

AK is lazy but he really has good reason to be.





OK, if I had to take care of kids (or old folks), I can imagine that my life would partially, more or less, be run according to their needs and there could be a routine of sorts imposed on me.

I don't know about kids but the time will come when I would have to take care of the old folks at home.

It is something that is probably inevitable.

It is a responsibility that I accept.








Other than that, for now, free from chains, I am enjoying a life that is anything but structured.

Financial freedom is not the same as freedom in retirement.

In retirement, even in doing the things I enjoy, there isn't any structure per se.

This really is freedom.





Yes, AK is so utterly irresponsible!

AK is a bad role model!

Bad AK! Bad AK!

Related post:
Average income workers can be rich.

Views on CPF, insurance and investments changed after eavesdropping on AK. (Don't be "jelly". Make others "jelly".)

Reader #1 says...

I have been following your blog since Aug2015 and benefit greatly from it.

As an employee with salary below average, I couldn't have much to invest.

However I value the awareness that you created among your followers.

I am started to be more responsible to my own financial management and learnt a little bit about investment.

I believe many of them out there too.

I feeling grateful to "meet" you through text.





I want to say thank you again on this very first day of the year because I am still continuing benefit from your blog.

My view towards CPF, Insurance, stocks have changed.

In year 2017, I invested in shares and topping up my SA.

Although all are in very minimal but at least it’s a sign of improvement to me.

Thank you very much for what u have shared in your blog. We learn a lot from you.

Thank you. Wishing you another good year.

May you and your family Stay healthy and happy always. :)

Reader #2 says...

I was fortunate to find your blog few months ago, and have been reading your blog/FB posting almost daily since then.

Just want to take this opportunity to Thank you and appreciate my gratitude to you for sharing your financial wisdom with us.

I have really learned a lot from you, and as your loyal 徒弟, I have put those in real actions. E.g redeemed my home loan, cancelled my ILP, did my CPF VC, opened SRS account, and did my MA top up today.

I was reluctant investing in share in the past.

After I learn the idea of investing for income from your blog and read books you recommended in the blog, I finally decided to open a trading account.





Did my first trade and bought Comfort delgro last month, also nibble on Singtel and ST Eng.

Have the rest of my war chest loaded, patiently waiting a correction in new year and buy more when Mr Market is in distress.

I have started learning the basic FA and TA now, still have a lot things to learn, will keep reading your blog and learn from the experience.

So, do continue to talk to yourself often in the new year, the more the merrier, hehehe.

Wish you have a fabulous new year, good health and of course more passive income, huat ah !!!





AK says...

All of us have different circumstances and all of us have different ability to improve our financial health.

If we diligently do whatever we are able to do in order to have a more secure financial future, it is always better than doing nothing.

I realised that many Singaporeans might not have the funds to invest with even if they want to.





This was a big reason why I decided to blog about the CPF as much as I did in recent years, sharing my own story.

Making full use of the CPF will give us a measure of financial security in our golden years.

If sharing my story has helped regular working people to take action towards achieving greater financial security, then, the time and effort I have put into this blog is all worthwhile.

The ultimate goal is financial freedom but we have to start taking baby steps even as we think big.




Don't be "jin jelly".

Make others "jin jelly".

OK, I know.

Bad AK! Bad AK!




Read also:
AK apologizes to everyone who "jin jelly".
Related post:
A cornerstone in retirement funding.

AK apologizes to everyone who "jin jelly".

Reader said...
I didnt stalk u hor... hahaha but cannot get out of sight of u lah.. !! 

ASSI is everywhere

These bunch of kids only dare to envy, don't dare to take actions.








And shared this screen shot:

"Save hard till the extent of being a miser. 

"Then can start a blog blog abt yr wealth, take screemshot n post here let everyone envy.

"Tiagong it's ASSI."







Alamak!

Why like that?

Talking to myself, my intention is to inspire myself to take steps towards financial freedom.

Definitely, I am not out to make anyone "jin jelly" (HWZ lingo for "jealous").

I apologize if I have made anyone "jin jelly".





Honestly, very cham like that.

No wonder I sneezing like mad.

Read also:
Helping to fund my retirement.

Related post:
HWZ says AK "self-victimize himself".

Government helping to fund my retirement.

AK is a lazy fellow but AK likes to eat fruits.

When he goes to the orchard to pluck fruits from fruit trees, he would pluck those low hanging fruits first.

They require the least amount of effort and they also pose the least amount of risk.





When all the low hanging fruits have been plucked, then, he has no choice but to start climbing up the trees to reach fruits higher up.

Climbing trees, there is always a risk of falling.

The higher he climbs, the harder the fall.

Risky business.

Low hanging fruits for the win!

Thank goodness for low hanging fruits, he says.

At the end of 2017, the low hanging fruits harvest was pretty good:

OA interest: 
$11,958.68

SA interest: 
$9,464.79


MA interest: 
$2,063.23






Total interest received:

S$ 23,486.70

I have shared my story many times before and by spinning it differently this time, I hope it is still an interesting one.

Related posts:
1. A lot of money in my CPF.
2. Upsizing our CPF savings.

1st voluntary contribution to CPF account in 2018.

AK has become a bit more IT savvy and he now contributes to his CPF account using internet banking at home.

OK, you are right. 

I admit. 

AK has become even lazier in his retirement and will try not to leave home, if possible.





Bad AK! Bad AK!

How to do it? 

Er... You mean how to contribute to CPF account using internet banking or how to become even lazier?

Who threw a shoe at me?

Who? Who?

See related post #1 at the end of this blog.





Anyway, I just did my first online voluntary contribution to my CPF account in 2018!

This was to my CPF-MA which, of course, earns 4% interest a year.

For those of us who are still gainfully employed and paying income tax, contributions to our own CPF-MA will also enjoy income tax relief.

For people under 55 years of age who have already maxed out their CPF-SA (i.e. hit the Full Retirement Sum) and for people who are 55 or older, no top up to the CPF-SA is allowed.

However, we can still contribute to our CPF-MA if it has yet to hit the Basic Healthcare Sum (BHS).







The BHS is $54,500.00 in 2018.

Contributing to our CPF-MA if it has yet to hit the Basic Healthcare Sum (BHS) is a good way to earn 4% interest a year.

Of course, in the process, this helps us to enjoy "free" H&S insurance too.

See related post #2 at the end of this blog.





Last year, I said doing a contribution to our CPF-MA at the start of the year would get us an $88 "ang bao" from the government.


For those who still have mandatory contributions to their CPF accounts and hit the BHS in 2017, with the higher BHS in 2018, they can make a voluntary contribution of $2,500 to their CPF-MA now.

This means that they will get a $100 "ang bao" from the government!





What about AK?

See for yourself:

My CPF-MA is lower than the BHS for 2017 because there was a deduction made to pay for my H&S insurance plan last year.

Lacking mandatory contributions from being economically inactive means that I would be able to make a bigger voluntary contribution to my CPF-MA.

So, my ang bao from the government is going to be more than $100!

How much more?

You calculate yourself hor.

Happy New Year!




Related post:
1. Online contribution to CPF.
2. Free H&S insurance in Singapore.

FY2017 passive income from non-REITs (Part 4).

If you have not read the 3 earlier parts, read them HERE (PART 1), HERE (PART 2) and HERE (PART 3).

Although most of my investments have an emphasis on income, regular readers know that I also have some money in investments which would hopefully give me a mix of income and growth. 

Such investments, some bigger and some smaller, as a whole, form a smaller proportion of my portfolio compared to my investments for income.

This is consistent with the capital allocation pyramid which I have shared many times before.

Keeping this in mind, I added to my investment in Wilmar at under $3.10 a share as Mr. Market turned pessimistic in 4Q 2017.

Buying at a discount to NAV and at a price 10% lower than what Archer Daniels Midland Co paid to increase their stake more than a year ago seems like a good idea to me.

Wilmar is a growth story and I believe that value is still being created.

More valuable than it was in the past, undervalued now, we could see Wilmar's value being unlocked in 2019 if the plan to list in China succeeds.

See related post at the end of this blog for my simple analysis on Wilmar's value.

Wilmar definitely demands quite a bit of patience from investors and with a dividend yield of about 2%, it isn't anything to shout about but it is nice that I am getting some pocket money while I wait.






In the same vein as my investment thesis for Guocoland earlier in the year, I decided to put some money in Ho Bee Land towards the end of 4Q 2017.

After a run up in its share price, I waited for a retreat to a long term support which is the rising 200 days moving average (200d MA) before nibbling.

From a fundamental perspective, with a NAV per share of $4.55, my purchase was at a 47% discount to NAV which is pretty attractive to me.

Of course, there is no point in buying at a large discount to NAV if the investment just sits in our portfolio and looks pretty.






It is only a worthwhile investment if value is unlocked or if it generates an income for us.

Ho Bee Land's major shareholder owns more than 70% of the company but this, in itself, is no guarantee that value would be unlocked. So, it is important to be paid while I wait. 

Looking at the numbers, I feel that Ho Bee Land would be quite comfortable with a higher DPS but to avoid disappointment, I am going with an assumption of a rather undemanding 5c annual DPS.

Although I am quite comfortable with my entry price, I am not crazy about it and I would probably be accumulating only if Mr. Market decides to give me a better offer.







After all that has been said, I am expecting 2018 to be a year of reduced passive income as a result of having a greater proportion of investments with lower dividend yields in my portfolio.

That story to be told next year.

To conclude this final blog of 2017, FY 2017 distributions received from non-REITs:

S$ 481,902.09










So, it all works out to be approximately S$40,158.00 a month.

Without the huge distribution from Croesus Retail Trust, everything else being equal, off the top of my head, I estimate a big decline of more than 80% in my passive income from non-REITs in 2018.

Here is wishing everyone a happy, healthy and prosperous 2018!





Related post:
Accumulating Wilmar.

FY2017 passive income from non-REITs (Part 3).

If you have not read the 2 earlier parts, read them HERE (PART 1) and HERE (PART 2).

To continue from Part 2, in my blog on SingTel earlier in the year, I said that in my retirement, missing a regular earned income, I should be less adventurous and that I should seek greater stability when it comes to passive income generation.

In other words, I should be less speculative and should not leave too much to chance.






Consistent with this desire for a higher level of stability, I decided to reduce my investment in Accordia Golf Trust (AGT) in 4Q 2017 by more than half and to again increase my investment in SingTel.

I will say that this was not a very easy decision emotionally because, overall, with all the dividends received and with some capital gain to boot, AGT has been a pretty good investment for me.

Hesitating for a moment, I had to remind myself that to be consistent with my aim for greater stability in passive income generation, it was a sensible thing to do.






I know there are people who say to avoid AGT at all cost but regular readers know that I like to think that all investments are good at the right price.

This also brings to mind what Warren Buffett said before:

I don't always do a good job of this but with AGT, maybe, I did.

So, you see, ComfortDelgro was not the only stock which I found attractively priced in 4Q 2017 as I also built a larger investment in SingTel.

SingTel is a more valuable company than it was in 2015 and paying a price similar to or lower than what I paid back then to increase my investment in the business now seems like a good deal to me.

Compared to Starhub which I have a very much smaller investment in, SingTel has a much stronger balance sheet and also more resilient earnings.





While Starhub's DPS could suffer another cut after already reducing from 20c to 16c, SingTel is probably able to sustain their current payout as they have been paying out less than 75% of their earnings as dividends.

With this in mind, when SingTel's price plunged after going XD, I bought more and would probably add to my investment if there should be another significant decline in price.

Everything else being equal, the decision to buy more SingTel rather than Starhub on price weakness really isn't a very difficult one.

Coming up next is the last blog of the year and that would complete the update on my FY2017 passive income from non-REITs.

Read Part 4: HERE.







Related posts:
1. Reduced Accordia Golf Trust.
2. SingTel analysis.

FY2017 passive income from non-REITs (Part 2).

If you have not read Part 1, read it: HERE.

To continue, as things turned out, I grew my relatively small initial investment in ComfortDelgro rather significantly.

For weeks following the time I first invested in the business, ComfortDelgro's share price did a rather placid see-saw movement.

Whenever the share price retreated to around $2.00 per share, I nibbled, as I decided after doing more research that $2.00 was a fairly good price and I believe it still is.






Then, informed by the technical analysis which I did a few months ago, I increased my investment again when its stock declined closer to $1.90 a share prior to the proposed deal with Uber to purchase a 51% stake in LCR.

There was a rebound in its share price after the announcement but in the following sessions, it drifted lower to test support found at $1.90 a share.

What to do?

Panic and sell?

No, I pounced on the opportunity to add again to my investment.

See:
ComfortDelgro's 51% stake in LCR.

In a downtrend, supports are more likely to break but, together with the fundamental analysis I did, they gave me an idea of where I might want to add to my investment.






Could the stock decline even more in price? 

I don't know if it would but it could.

In the face of massive disruption by Grab, I decided that ComfortDelgro could continue with a 10c DPS comfortably (pun intended) even without its Singapore taxi business.

In my first blog on ComfortDelgro, if you remember, I assumed what I felt was a very realistic 7c DPS and, so, anything higher than that is a bonus to me.

As long as this remains true, all else remaining equal, I would very likely add to my investment on any future price weakness which coincides with the supports which I have identified.

See technical analysis: HERE.






From an investing for income angle, I am comfortable with ComfortDelgro. 

With rather strong cash flow, the investment risk is very low although its share price could continue to experience volatility.

For income investors, it should be about getting in at a price which makes sense to us and price volatility really should not bother us unless we are investing by using money which we really shouldn't be using.

It is worth being reminded that ComfortDelgro is not just about taxis in Singapore.






Having said this, the fear that ComfortDelgro could see its stock sinking in price is not unreasonable, of course.

Someone asked if ComfortDelgro's share price has bottomed?

I would be very wary of anyone who tells me he knows the answer, either way.

Although I did a bit of technical analysis on ComfortDelgro, I do not know if the stock price has bottomed but it looks like it has at least found a floor and the momentum oscillators are supportive of this.





Everybody fears the unknown.

Now, fear can be a good thing because it stops us from acting recklessly but irrational fear might hold us back from making sensible decisions.

I always tell myself that to fear is human but it is never a good excuse for inaction.

I also remind myself that I probably would not be able to buy at the lowest possible price.

If I did, I was lucky.






In summary, as an investor and not a trader, I decided that since a sustainable and meaningful dividend from a company like ComfortDelgro was attractive for me, the rational thing for me to do was to make it a bigger investment in my portfolio.

So, I did exactly that and it helps to reduce my investment portfolio's at one time heavy reliance on S-REITs for passive income.

At lower prices, all else being equal, dividend yield would expand and make investing in ComfortDelgro for income even more compelling.

Now, you know why I am ready to buy much more if there should be more blood letting in the market.

Roll out the war chests?

That could happen.

See related posts at the end of this blog on why I decided to invest in ComfortDelgro as its share price plunged.










Some might remember why I added substantially to my investment in SingTel earlier in the year.

I will talk about this in Part 3: HERE.

Related posts:
1. Massive short interest.

2. ComfortDelgro analysis.