In conversation with AK 2019 (Part 1).

As I cannot post stuff in Facebook anymore, periodically, I will share some of the more interesting conversations I have from time to time with readers as blogs in ASSI instead.

If you don't know what I am talking about, you must have missed my last blog post.

See:
Financially free and Facebook free.

Seriously?

Reader #1 says...
I have a friend, she is reaching 55 this year, she is wondering if she should go for enhanced CPF life.
May you share your thoughts? Thank you


AK says...
If your friend is not a savvy investor, having a larger monthly payout from CPF LIFE is a good choice. 🙂


Related post:
FRS and ERS CPF LIFE payouts.

Reader #2 says...
I done some market study with frens in telco n IT biz as well.

I got a feeling singtel will recover sooner than we expected.

Pricing has stabilised at the moment for them in india n oz

I was told to avoid the starhub totally because this coy doesnt has any more drivers fwrd

Airtel ceo has also said that recovery in 2020.

The ambani case of being used by ericcson will see anil coy to be bot over by his brother mukesh jio reliance soon.

Therefore it will reduced another big player in india.

Ak can u write something abt ocbc?
After recent result?
My feel is coy is too giam siap w dividends

AK says...
I still like SingTel.
Nothing to say about OCBC really except that I agree they are giam siap... 😛

Related post:
FY 2018 passive income.






Reader #3 says...
Sell part of ComfortDelgro & buy Soilbuild lor.
R u still holding on to your Soilbuild?

AK says...
No Soilbuild liao.
I blogged about this before.

Related post:
Was Soilbuild REIT shabby?





Reader #4 says...
I had to saved, scrimp and also "avoid" big weddings haha

AK says...
Many people I know, including readers of ASSI, earn more money than I did (as a worker).

It is easier for them to achieve financial freedom (than for many average workers).

Just have to keep our needs simple and our wants few (for a start). 🙂

Related post:
More passive income than richer folks.

Financially free and Facebook free!

Reader says:
hi ak. did something happen to your Facebook page?
only can see posts from 2018 haha

AK says...
I also dunno why but FB removed all links to my blog 😞

Reader says...
shucks haha. I guess they getting alot of flak for various things
even the assi page ah. which is so odd

AK says...
I will just stop using FB to update readers, I guess.
No loss to me. 
I guess it will inconvenience readers though. 😞






A message from Facebook.

"This post goes against our Community Standards, so no one else can see it."

Facebook has removed ALL the links to my blog.

So, I won't be able to update readers using Facebook anymore.

Readers who have been following me using Facebook will just have to check my blog from time to time for updates.

There are, of course, also other means to follow my blog.

Check my blog's left side bar.

AK is financially free and now he is also Facebook free!

Income tax payable in 2019?

Readers know that I have been spending a lot of time in Neverwinter and it will continue to be so as Neverwinter is launching Mod 16 a few weeks from now.

Mod 16 is Neverwinter's largest Mod (or expansion) in its 5+ years history and it is going to bring big changes to the game.

I will be spending a lot more time farming and preparing for the new Mod.

So, a longer period of absence from my blog and FB page or wall could be expected in the near future.

After this blog post, it could be quite a while before there is another one.

Please don't be worried if you do not hear from me for several weeks in a row.







Anyway, regular readers know that one of the things I try to do is to inspire.

I do this because I believe that even for average working people, our financial health can be and should be better.

The catalyst for this blog post is this:

Yes, it is that time of the year again and I am being reminded again how I am not making any financial contribution towards nation building.

Really?

Bad AK! Bad AK!

I was looking through my past blogs on the topic of income tax and I think I did not blog about this last year.

The last blog I had on the topic of "income tax" was in 2017, it seems.








I remember when I was a young working adult, a senior told me that I should be happy if I was paying more income tax because that meant that I was earning more money.

Higher income meant paying more income tax.

It seemed to make sense. 

At the same time I asked why should it make sense?

I didn't ask the senior that, of course.

Even then, I talked to myself.

Yes, I was and still am mental.






Anyway, for some time now, being unemployed or, more accurately, economically inactive, I have no income and therefore I do not have to pay income tax, right?

Well, not totally.

I am economically inactive but that doesn't mean I don't have any income.

Without any income and not being born with a spoon made of some precious metal in my mouth, I wouldn't last very long being economically inactive.

See:
AK's 2018 income.






Spend our time working for money and pay income tax?

Make more money and pay more income tax?

OR

Spend our time not working for money and don't have to pay income tax?

Make more money and pay less income tax?

For me, it is a no brainer.








Remember, it is not impossible.

If we want it bad enough, we will make it happen.

Believe me. 

Believe in yourself.


Just don't do anything illegal or unethical to achieve our goals.







Want to pay less income tax or not pay any income tax at all while having income?

See the related post at the end of this blog and also follow the hyperlinks to more related posts.

If AK can do it, so can you!




Related post:
Income tax payable (2017).

Passive income made by passive income? Yes!

This blog material is taken from a reply I recently gave a young reader who is doubtful that a comfortable retirement is achievable in Singapore for the average worker.

The reader also wonders why AK seems to be pretty calm about losses in investments while he is likely to get rather depressed.

AK says...
If we are right more often than we are wrong, we should do well enough and I think I have been lucky that way.

After so many years as an investor, I am more forgiving towards myself and try not to dwell too much on losses because no matter how good an investor we are, it is bound to happen.

What helps to give me peace of mind is investing for income.

Investing for income, I am less bothered by daily price fluctuations.





You might be interested in the blog where I said we could save 100% of our take home pay if we do the right thing.

See:
Save 100% of your take home pay!

Invest for income and we will get "free money" (i.e. passive income).

Why spend the money we earn from working when we can spend "free money"?

I am even more forgiving towards myself these days because I am now in a situation where the "free money" I have is from the "free money" made by the money I earned years ago.

Now, give that a moment to sink in and, maybe, a light bulb would turn on above your head.





Yes, for some time now, my passive income is made by the passive income made by my earned income.

What is better than passive income?

Passive income made by our passive income!






If we do the right things, it is definitely possible to retire more comfortably in Singapore.

If AK can do it, so can you!

Related post:
To achieve financial freedom, most of us have to create Dividend Machines.

Investing for income to financial freedom. (Dividend Machines creation in 2019.)

When I blogged about my decision to take a long break from public appearances, I also said that I would continue blogging but less frequently.

I know that I am a social media influencer and I have readers who appreciate my blog.

One reader then said:

"Most so called social media influencers I read about pitch/sell products.

"I would say you are some kind of pseudo (not psycho!) influencer who don't sell products (except 'Neverwinter') who talks about how to live your life prudently and be financially free 😉"

That is true.

I hardly sell anything in my blog.





If I find something is good, even if I am not paid to do so, I simply blog about it.

This is the case with "Neverwinter".

This is also definitely the case with the CPF system.

Of course, regular readers know that I am spending a lot more time in "Neverwinter" these days as it is something I enjoy.

They also know I wish for everyone to achieve financial freedom and that all of us will eventually work because we want to and not because we have to.




This is because I truly feel that having to exchange our precious time for money, working because we have no choice but to do so is depressing.

Wage slavery is a terrible thing.

Regular readers know that an important thing that I did which freed me from the shackles of wage slavery is investing for income.

What is investing for income?

Invest in income producing assets and we will enjoy passive income or, as Buffett says, "make money while we sleep".

Remember my earlier blog?

Special dividend from VICOM and financial freedom.

Of course, this is only one of my investments.





If you are new to investing for income, you should attend Dividend Machines.

Although many bloggers are promoting Dividend Machines now, I was the first to do so when it was introduced many years ago.

After so many years, I still believe that the course provides value for money especially if you are relatively new to the world of income investing.

.........

Who are the trainers?

Readers who have attended "Evening with AK and friends" will be familiar with both Victor and Rusmin.

Brilliant investors and good people.

They believe in keeping education very affordable.

So, you don't have to pay an arm and a leg to attend Dividend Machines.

Or else, AK would not be promoting it.

Want to learn how to invest in REITs and non-REITs for income?

If your answer is "yes", sign up for 2019's Dividend Machines: HERE.

Limited places available, as usual.

Unlike "Neverwinter" or CPF, this is a paid advertorial but, quite frankly, I would have promoted Dividend Machines anyway even if I were not paid to do so because I believe it is 100% worth promoting.

To achieve financial freedom, most of us have to create Dividend Machines. 

If AK can do it, so can you!


Sign up: HERE.

Special dividend from VICOM and financial freedom.

I just received a letter from LTA that my car is due for an inspection.

Wow!

Has it really been three years?

Time really flies.

This is something older people feel more keenly than the younger ones.





The younger ones think that they still have time to plan for retirement and they are probably right.

However, if they think that they can kick the can down the road, this could result in them regretting when they are older.

Many older people do regret not planning earlier for retirement.

Time and tide wait for no man. 

Before we know it, we are 55 years old.





We have but one life to live.

Take ownership.

Don't blame the system.

Don't blame fate.

Don't blame anyone else.

We should only blame ourselves if we cannot retire well in Singapore.





Anyway, when I was making payment to have my car inspected in VICOM, I noticed that the price has gone up but I was quite ZEN about it.

Why?

VICOM is paying for my inspection, after all.

I know.

Bad AK! Bad AK!





Regular readers know that I have a larger smaller investment in VICOM ($50,000 to $100,000) and receive regular dividends.

The fact that VICOM declared a final dividend of 23.17 cents and a special dividend of 8.62 cents means more passive income for me.

However, it is also good on another level as the largest shareholder of VICOM is ComfortDelgro and I have a relatively large investment in ComfortDelgro which also pays me dividends.





VICOM and ComfortDelgro together are probably bigger than my investment in AIMS AMP Capital Industrial REIT or similar in size.

They are all important passive income generators in my investment portfolio and they are pretty predictable ones too.

To all my readers on the investing for income path, keep at it because financial freedom is not a dream.

If AK can do it, so can you!

However, only Mr. Bean can do this.






Related posts:
1. Invested in ComfortDelgro.
2. Invested in VICOM.
3. Passive income all gone!

Year of the Pig!

It is my year!

Yes!

AK is a pig!

Oink! Oink!

We are very lucky that in Singapore financial freedom is not a dream for most of us.

"P" is for pig.

"P" is also for prudent, pragmatic and patient.

By being prudent, pragmatic and patient, we can achieve financial freedom and we should.

If you are new to my blog or need a refresher, read the related post at the end of this blog.







Did you say something?

What 4D to buy?

Alamak.

OK.

My 2018 CPF MA interest minus 19 cents.

See: 

CPF interest earned in 2018.

I anyhow say but you don't anyhow buy, ok?





May the Year of the Pig bring all of us good health, good cheer and good luck!

财神到!! 恭喜发财!!

HUAT AH!

Related post:
3 attributes of a wealthy peasant.
(Be prudent, pragmatic and patient.)

$1.5m in CPF savings by doing nothing henceforth.

Reader says...
"I know you think of CPF as bonds in your portfolio and you want to grow it to reduce portfolio risk and volatility but what if you are unable to do it one day? 

"Do you have back up plan?"

AK says...
"Although I feel that I should be able to continue to do Voluntary Contributions to my CPF account yearly to reach the Annual Contribution Limit, there could be a year or two or a few when I might not be able to do so.

"After all, we cannot know what might happen in future and there could be times when my passive income takes a hit or when my expenses spike for whatever reason.

"It is a situation that I would have to accept but it is not a situation that I would need a back up plan for.

"I will blog about this and you can have a read."

Why did I say it would not be a situation I would need a back up plan for?

Well, assuming that I am unable to make Voluntary Contributions to my CPF account henceforth, how much do you think I would have in my CPF account by the time I hit age 65?

Remember my CPF accounts by end of 2018?

OA:
OA:
$538,878.

SA:
$250,783.

MA:
$55,713.




To arrive at an estimate, I shall ignore the effect of the extra 1% interest on first $60K of our CPF savings as well as the additional 1% interest on the first $30K once we reach 55 years of age etc. 

So, I would approximately have the following in my CPF by age 65 if I were to stop Voluntary Contributions from this year on:

OA:
$840,465.

SA/RA:
$508,040.

MA:
$117,378.

Remember, this is surely inaccurate and only serves to give me a rough estimate.




So, total CPF savings by age 65:

$ 1,465,883.

Or almost $1.5 million and this is all by doing nothing from now on.

This is the beauty of compound interest and having a relatively large base makes it even more beautiful.




Compound interest.

He who understands it, earns it.

He who doesn't, pays it.

It might seem magical but it is really just math.




My CPF savings is my back up plan for in case things should go terribly wrong with my investments.

It has probably reached a critical mass where it can take care of itself to do the job I expect it to do.

Unable to do voluntary contributions to my CPF account henceforth?

I don't think it is a situation I would need a back up plan for.




Related post:
AK responds to HWZ on CPF savings.

This guy has 800K in his CPF. (AK responds to HWZ Forum.)

A reader pointed me to a thread in HWZ Forum which discussed about my CPF savings being more than $800K.

He wanted to clarify certain questions and comments made by some people there.

I am amazed that there are more than 10 pages of comments and I am even more amazed by some of the comments made.






There is plenty of ignorance in that thread.

There is also so much "jelly" that HWZ can start a dessert shop.

What about HWZ starting a grocery since there are plenty of grapes too but they are of the sour variety and might not sell well?

So, how like that?

Read:
Jin jelly or jin buay song my CPF?






If only people bother to find out the facts instead of reading fiction. 

Either way, we are spending time.

Want to spend time reading something useful or something useless?

If they did find out the facts, they would realise that the CPF is here to help ALL members to achieve a basic level of retirement funding adequacy.

Read:
A cornerstone in retirement funding.







Fortunately, there are also voices of reason in that forum and I am very happy for them.

Honestly, many rich people I know would like to park more of their money in their CPF accounts but they are not allowed to do so as the CPF is not a system created to make the rich richer.

Unfortunately, often, people who should be making use of the CPF system more in order to retire more comfortably are the ones keeping their distance.

Read:
Purpose of the CPF is to make the rich richer?






Complaining is not going to help us understand the system.

Complaining is not going to make the system work for us.

Instead, find out more about the system and see how it could possibly work to our advantage.

It is really about helping the system to help ourselves.





HWZ Forum says:

Is AK really blogging about his CPF savings to show off and because he has no life?

I blur.

I don't know why some people are laughing at my CPF savings.

Really, I blur.

However, I know I am laughing because I have my CPF savings.

The CPF will help us secure a measure of retirement funding adequacy because we will retire with

1. an investment grade bond (excess beyond prevailing Full Retirement Sum can be withdrawn at age 55)

and

2. a lifelong annuity (CPF Life) that pays us monthly from age 65.










I blog about the CPF and my journey with CPF extensively.

If anyone is willing to put in the effort to read, they will find the answers here.

Of course, I understand that it requires less effort and it is probably more thrilling to take potshots and in the dark too.

I hope for the sake of these thrill seekers that they are not throwing boomerangs at me.





Related post:
My 2018 CPF savings.

2018 CPF savings in a pie chart. (Growing CPF savings.)

There is always some risk when it comes to investing in stocks and there will always be some degree of price volatility.

Not everyone is able or willing to take risk when it comes to their money and not everyone is able to stomach price volatility well.

Some get sick from the volatility and some even die from it.

This is why we are fortunate in Singapore to have the CPF.







CPF members should take full advantage of this risk free and volatility free instrument that pays reasonably attractive coupons.

Yes, I say coupons because I look at my CPF savings as the risk free and volatility free investment grade bond component of my investment portfolio.






Having a meaningful amount of CPF savings will give most of us peace of mind as we cannot reasonably expect every year to be a good year for our investments.

In my retirement, lacking mandatory contributions to my CPF account, I have been voluntarily contributing to my CPF account and here is what it looks like at the end of 2018:

$845,373 at the end of 2018 and that was at the ripe old age of 47 too.

By age 55, more likely than not, my CPF savings will be in excess of $1 million.

To the very rich, $1 million might not be a lot of money but to the vast majority of us, I am sure it will make a meaningful difference in funding our retirement.

This is why I share my CPF story.

Unless we are handicapped in some way, I believe that if we put in enough effort, we can become CPF millionaires.






If you are a CPF member and have yet to max out the benefits of your membership (think FRS and BHS), read this blog:

CPF is all we need unless we are very rich.


Many or most Singaporeans do not realise what a good thing the CPF is.

Haven't reached the prevailing Full Retirement Sum (FRS) in your CPF account and thinking of buying a bond fund?

If you have yet to hit the Full Retirement Sum, why bother with bond funds?









Want a financially more secure retirement?

It is really as easy as ABC, er, I mean as easy as CPF.

Believe me when I say:

If AK can do it, so can you!




If you haven't listened to the song, listen, there is a hidden message.





Related posts:
1. Voluntary contribution to CPF MA (2019).
2. CPF interest earned in 2018.
3. Financial security plain and simple.

CPF interest earned in 2018.

Regular readers know that AK is lazy.

Lazy AK loves to pluck low hanging fruits as they require very little effort to pluck.

Not requiring him to climb high up into the trees to pluck, they are also relatively safe to harvest.








The name of the low hanging fruit here is "CPF".

What is the scientific name?

Too long.

Don't bother.

Told you AK is lazy.








Don't bluff.

I know you are not interested in the scientific name either.

You are more interested in knowing how much low hanging fruit did AK harvest in 2018.

Right or not?

OA interest:

$ 13,087.18








SA interest:

$ 10,198.00

MA interest:

$ 2,162.19

Total interest received:

$ 25,447.37


Thank goodness for low hanging fruits (and vegetables)!

So, do you want to pluck low hanging fruits too?

If AK can do it, so can you!





For those who are able and willing to do so, please remember to do VC to your CPF MA which will also enjoy income tax relief.

See the related post at the end of the blog.

We can do it easily online too:

See:
How to do online contribution?






If your mandatory contributions (from employment) will hit the annual CPF contribution limit ($37,740.00), you may choose to ignore the related post.

To all my readers, here is wishing everyone a

VERY HAPPY NEW YEAR!

HUAT AH!





Related post:
VC to CPF MA in 2019.
(MA limit in 2019 is $57,200.)