IREIT Global: 214 for 1000 rights issue.

Earlier in April, IREIT Global announced that they were looking at acquiring 27 of Decathlon's assets in France.

In reply to readers' comments, I said that it wasn't a fantastic deal but it wasn't a bad deal either as IREIT Global's relatively high distribution yield makes it harder for them to make yield accretive acquisitions.

The deal comes with a relatively long lease to a blue chip sporting goods company and that makes it more appealing with stability being the name of the game.

Lovely pun, that.

I also said that in today's very low interest rate environment, we are probably being well compensated for any risk that comes with the deal.

I would think of the rights issue as an invitation to invest in more properties in Europe which are leased to a big corporate tenant for a 7+% rental yield.

So, it should be interesting to anyone looking to increase their passive income in the form of rental income.

In April, after the intention to acquire those 27 assets was made known, I said that a rights issue was almost certain to take place.

I prefer a rights issue to a private placement because I most certainly would not get invited to participate in private placements.

I also made a guess that a rights issue would probably be relatively small and that it could be a 1 for 5 or 1 for 4 issue.

Well, a rights issue was announced yesterday.

A 214 for 1000 rights issue means it is closer to 1 for 5 than 1 for 4.

Priced at 59.5 cents per rights unit, it is a fairly good price especially when compared to the private placement price of 61.55 cents per rights unit.

The private placement being offered at a higher price although relatively small in size helps to keep the rights issue smallish.

IREIT Global's gearing level is conservative in comparison to many other S-REITs and using more debt to fund the purchase in a low interest rate environment is probably an interesting idea.

However, IREIT Global's manager might be keeping some powder dry by staying more cautious.

Whatever the case may be, I rather fancy being a landlord to Decathlon, given the numbers.

So, I will be taking part in the rights issue, taking up my entitlement and also applying for excess rights when the time comes.

This will make IREIT Global the largest investment in my portfolio.

If you are interested in my replies to comments from readers back in April, please see the blog: HERE.

See rights issue announcement: HERE.

You might also be interested in this blog:
REITs and rights issues: Dilutive or not?

Use CPF savings for homes and investments?

This blog is in reply to a reader's comment: HERE.

Hi Tonny,

Apologies for the tardy reply. 

Didn't check my blog for a couple of days. 

Been spending my time sailing in another world. ;p

We are likely to stay in a low interest rate environment for some time to come. 

So, using our CPF OA money which generates 2.5% risk free return every year to fund the purchase of homes is rather silly.

Of course, for some people, there really isn't any other choice but for those of us who have a choice, if we have idle cash, using that to fund the purchase of homes makes better sense.

If we do not have idle cash but have assets which can be liquidated to generate cash, I would liquidate assets which are not generating an income first if I am thinking of raising cash that way.

Income generating assets should not be liquidated first especially very good income generating assets like investments made in the local banks at rock bottom prices during the crisis.

Of course, the CPF is risk free and volatility free while our investments are not so.

Still, our local banks are well capitalised and well run. 

They are probably the next best thing to the CPF. 

If we have paid rock bottom prices for their stocks, they are probably generating very attractive return on investment for us.

What is more important to us? 

Having something that is risk free and volatility free that generates a decent return like the CPF? 

Or having the next best thing for higher returns like investing in our local banks? 

I don't know what gives you peace of mind. 

You decide. :)

Since I am on the subject, recently, we have been bombarded with advertisements to use our CPF OA money to invest in properties. 

I always say that no one cares more about our money than we do.

Who are these people telling us it is OK to use our CPF OA money to invest in properties if we do not have cash and that owning multiple properties is not something only the rich can do?

These people have vested interest in making us part with our money.

We buy a property through them, they make money.

If the property does not do well later on and if we have to sell, they make money too.

They have nothing to risk and everything to gain.

Don't bite off more than we can chew because some do choke and some choke to death.

Related posts:
1. Buy 2nd property and pay ABSD?

2. Disastrous investments in property market.

3. $500,000 stuck in property investment.

4. Don't do silly things and retire smart.

5. This condo investment has been a drag.

CPF Full or Enhanced Retirement Sum for AK?

It has been a while since I blogged.

So, I decided to share this reply to a reader's comment as a blog since it is a little more substantial. 

If you are interested in the reader's comment, you can read the comment: HERE. 

Hi Staerfeldt, 

I am glad that my blog has been inspirational. :D 

The CPF has definitely been gaining popularity compared to the reception it used to get in my early days as a blogger. 

The very low interest rate environment in recent years probably made it even more popular. :) 

It is important to remember what is the primary purpose of the CPF which is to help fund our retirement. 

So, we should not use our CPF savings in a careless manner in so many ways just because we are allowed to. 

Many who invested with their CPF savings would have been better off just leaving the money in their CPF accounts. 

The CPF is really designed to help the masses and not the rich amongst us: 

Unfair FRS and ERS' CPF LIFE payouts? 

CPF LIFE is an annuity that pays for life. 

So, ERS is a pretty good way of ensuring we get more monthly pocket money in our old age. 

However, this only really pays off if we live a very long life. 

Beyond the first $60K in CPF savings, the RA pays 4% per annum just like the SA. 

So, it really isn't a big loss if we choose to have FRS instead of ERS, leaving some money in the SA untouched which gives us options on withdrawal too. 

Personally, I think the FRS is good enough as I like to keep my options open. 

Of course, I could change my mind later on. :) 

You might be interested in this blog from 2015: 

Choose your own CPF adventure! 

References:
1. CPF can be our best friend. 

2. How to grow our CPF savings? 

3. 4 ways to boost our CPF savings.

4. A cornerstone in retirement funding.

From CPFB:

What are the Basic Retirement Sum (BRS), Full Retirement Sum (FRS) and Enhanced Retirement Sum (ERS)?

1Q 2021 passive income: Sabana and IREIT to the rescue.

It has been a few weeks since my last blog and I hope everyone is doing well.

I have not done anything to my portfolio in 1Q 2021 apart from adding a bit more to my investment in Sabana REIT in early January.

Of course, from my blog title, you would be able to tell that my decision to significantly increase my investment in Sabana REIT late last year and early this year turned out pretty well.

Total dividends received in 1Q 2021 was some 48% higher compared to 1Q 2020 and my bigger investment in Sabana REIT is one reason for this.

The biggest contributor to the increase in dividends in dollar terms, year on year, is IREIT Global, as I took part in the rights issue and even bought more after the rights issue.

Total passive income from my investments in 1Q 2021:

$36,551.14

Reference: 1Q 2020 passive income.

This will help to pick up some slack which I am expecting in 2Q 2021.

2Q 2020 saw a strong passive income number of $57,395.95 but that included distributions from two big investments in my portfolio: 

Centurion Corporation

and 

Accordia Golf Trust.

Reference: 2Q 2020 passive income.

Of course, Accordia Golf Trust is no more while Centurion Corporation has suspended dividends.

Although I have increased my investments in DBS, OCBC and UOB, they are still paying lower dividends for the time being.

Expecting decent enough dividends but nothing very impressive.

ST Engineering, VICOM and Wilmar should help to bring home much of the bacon in 2Q 2021 while ComfortDelgro might take a bit more time to recover.

Time will tell.

I will just wait to see how things turn out and probably share my 2Q 2021 numbers in early July.

At the moment, I am somewhat optimistic that my portfolio should be able to generate at least $120,000 in passive income this year.

Reference: Dividends and interest income reduced.

I cannot be absolutely sure since the COVID-19 pandemic is still very much alive.

So, although vaccines are available now and a global vaccination drive is underway, we should remain cautious.

Things should get better from here if we are more cautious and we should see some semblance of the old normal returning in another couple of years if nothing goes wrong.

The fear is complacency and, worse, a mutation of the virus which the vaccines are ineffective against.

Having said this, if you can, register for vaccination and get people around you to do the same.

Till the next blog, stay safe and keep all of us safe.

COVID-19 Vaccination.

Related post:
4Q 2020 passive income.

Dividends and retirement in three virtual worlds.

I haven't been blogging much and this is just a blog to touch base as I probably won't be blogging until end of the month or early next month.

A reader left me a comment recently on how he is still working on his F.I.R.E. (i.e. financial independence retire early) and trying to figure out what he should do after activating it as he doesn't want to stay at home.

I don't think there is anything wrong with staying at home if all the stuff we want to do in retirement is to be done at home which, of course, pretty much describes my situation.

To be quite honest, I find myself not having enough time to do all the stuff I want to do in retirement and I am now spending most of my waking hours in three different worlds, not counting the real world.

I am trying hard to be disciplined and not let my life as an explorer of virtual worlds disrupt my life in the real world.

In recent months, I have been rather successful as I even managed to get 20 to 30 minutes of physical exercise done on daily basis.

Those who share my interest in adventuring in MMORPGs might be interested to know that Black Desert Online is now free to download using Steam and this offer which ends on 10th March is to celebrate their 5th Anniversary.

I have seen many videos of Black Desert Online and have always wanted to try it but didn't want to pay for it.

So, this is just perfect!

This is a short video on Black Desert Online in 2021:

I doubt very much I will be spending any money on Black Desert Online as I have not spent any money on Neverwinter and Guild Wars 2 either.

I have blogged about Neverwinter and Guild Wars 2 before and I have spent the most time in Neverwinter as it was the first free to play MMORPG I picked up and also fell in love with.

What?

Four years and more in Neverwinter with thousands of hours clocked and I have not spent any money on the game?

That is correct and my wizard is pretty much end game ready too.

With Guild Wars 2 and now Black Desert Online, I am just taking my time to explore the worlds which are really very beautiful.

Not rushing anywhere.

Lots to see and lots to do.

This is a short video of Neverwinter's latest module launched last month:

Now, dragging myself back into the real world, I checked on dividends for January and February 2021.

The thing that caught my attention was the much higher income distribution from Sabana REIT.

I increased my investment in the REIT significantly not too long ago and I blogged about it too.

This has proven to be very rewarding.

The income distribution from Ascott REIT-BT, not surprisingly, reduced drastically as COVID-19 is still disproportionally hurting some parts of the economy which includes the hospitality sector.

The decision to significantly reduce my investment in Ascott REIT-BT which was at one time one of my largest investments when I did was a fortunate one.

This month in March, I am expecting more dividends from my investments and my larger investment in IREIT Global is going to be very rewarding.

Having said this, there are businesses in my investment portfolio which will take more time to recover from the ravages of the pandemic and have suspended or reduced dividends.

I can only hope that, having deployed most of my war chest into what I think are more resilient businesses in the second half of last year, my passive income would at least hit $120,000 this year.

Why $120,000?

$120,000 a year is what I need in order to help support my parents, meet my own expenses and to do maximum voluntary contribution to my CPF account.

To be honest, I feel it is a pretty low bar to clear but we don't know what we don't know.

Anyway, I have gone on longer than I had planned to do.

Until the next blog, stay safe and keep all of us safe!

#SGTogetherBetterTomorrow

Remember to collect your free high tech mask:

Related posts:
1. AA REIT, IREIT Global and Ascott REIT-BT.

2. 3 local banks, 3 REITs and SIA.

3. Worried as dividends and interest income reduced.

4. 1M50 CPF millionaire in 2021.

5. 4Q 2020 passive income.

How to achieve F.I.R.E. like AK? Learn to invest for income.

Back in 2018, when I announced that I was taking a long break from public appearances, I said it would last, maybe, two or three years.

Well, it is now 2021 but with the COVID-19 situation still wreaking havoc globally and Singapore's Phase 3 of reopening lasting at least a year, it seems that I am being given another year or two off.

Good news for lazy AK who decided long ago that he didn't want to work till the day he dies!

Back in 2018, when I made that announcement, I said to readers that F.I.R.E. which stands for "Financial Independence, Retire Early" isn't just a dream.

However, unless we are very lucky in life, we need to plan for F.I.R.E. to happen.

I planned very early on in life as a salaried worker to achieve financial freedom and to retire by age 45.

With a lot of work and bit of luck, I managed to do this a few months before I turned 45 almost 5 years ago.

I have blogged about this many times before and regular readers know that my approach to achieving F.I.R.E. is a holistic one.

The good news is this holistic approach to F.I.R.E. is accessible to most of us in Singapore.

Most of us are able to achieve financial freedom in Singapore as long as we are willing to work diligently towards it.

I know many have heard this before but if AK can do it, so can you!

If you want to achieve F.I.R.E. the way AK did, then, you have to embrace investing for income.

If you are new to investing for income or have been looking to do some structured learning, I have more good news for you.

The only investment course that AK promotes every year is "Dividend Machines" conducted by The Fifth Person.

"Dividend Machines" not only provides you with all the knowledge and guidance you need as an investor for income, it is also very affordable.

Go ahead and take a look before you decide if you should sign up for 2021's intake.

Follow AK's referral link here: 

Dividend Machines 2021 

If you like what you see, sign up fast or you would have to wait another year for the next intake.

Don't just dream of passive income, really make money while you sleep with Dividend Machines.

May the Year of the Ox be a bullish one for you!

Should we invest in AIMS APAC REIT in 2021?

Readers left me a few comments on AIMS APAC REIT (formerly AIMS AMP Capital Industrial REIT) recently and I decided to do a quick blog on one of my largest investments. 

Let us start with my reply to the latest comment: 

"I get palpitations when people ask me if something is safe to invest in. ;p 

"The one place where I would say our money is safe is the CPF which is risk free and volatility free. 

"Having said that, I have been invested in AA REIT for more than 10 years and it has been good to me. 

"You might want to read this and my other blogs on AA REIT for an idea: 

AIMS AMP Capital Industrial REIT: An opinion. 

"OK, maybe, this one too: 

AIMS AMP Capital Industrial REIT and free money for AK."


I should have said this earlier but if you are interesed, read Egg's comment in the comments section of this blog: HERE. 

I also posted a couple of replies to another reader's comments on AIMS APAC REIT in another blog. 

See the comments section here for Blur Sotong's comments and my replies: 

Largest REIT investments updated. 

For anyone interested in investing in REITs, maybe, read this too: 

Is investing in REITs right for you? 

Oh, if you are wondering where I got the inspiration for the title of this blog:

Neverwinter for the win!

Sneaky AK!

Bad AK! Bad AK! 

Hopefully, 2021 will be a better year than 2020.

Till the next blog, everybody stay safe!

Wilmar was $7.11 a share and DBS, OCBC and UOB?

This blog is in response to questions by readers, csky and linus.

On Wilmar, DBS, OCBC and UOB:

That price target of $5 for Wilmar which I suggested in November 2019 is outdated as Wilmar's chart pattern was damaged by the price action inflicted by the COVID-19 pandemic.

The chart has morphed since then.

For readers who don't know what we are talking about, see:

Wilmar: Target reacquired.

Wilmar's chart is showing very strong upward momentum right now.

RSI, a momentum oscillator, shows that Wilmar is overbought right now but it could stay overbought for some time.

This is because there isn't any negative divergence in the MACD which is another momentum oscillator.

As the stock price moves higher, the MACD moves higher and this positive momentum suggests price could go higher.

Compared to this, the charts of the three local banks show negative divergence.

Their higher highs in stock prices have been accompanied by lower highs in the MACD.

Softness in the local banks' stock prices is to be expected.

We could see them retreating to test immediate supports.

However, Wilmar's stock price looks like it could go higher.

How much higher?

I don't really do this anymore but I will stick my neck out this time.

You probably remember this blog from 2017:

Accumulating Wilmar on price weakness.

In that blog post, I noted that when Mr. Market was feeling very bullish about Wilmar's prospects (like now), Wilmar's stock traded at a huge premium to its NAV.

It was a really huge premium.

Today, Wilmar's NAV is significantly higher than it was in 2010.

Based on this observation, it is probably not irrational to think that Wilmar's stock price could go higher than $7.11 we saw so many years ago in January 2010.

Having said this, there is nothing wrong with taking profit.

So, selling some to lock in some gains is probably not a bad idea.

Trading around a core position?

Sounds familiar.

Buy more, sell some or hold?

You decide.

I anyhow talking to myself only hor.

3 local banks, 3 REITs and SIA.

This blog is actually the second reply to a reader, csky, who is interested in knowing how much have I invested in DBS, OCBC and UOB, amongst other things? 

I decided to publish this as a blog as there are probably other readers who might be interested in this. 

The question started with why didn't I channel funds I used to increase my investment in IREIT Global into Sabana REIT instead? 

In reply, I said: 

"There isn't any brilliant reason behind this. 

"It is simply timing. 

"I like what Sabana REIT's activist investors are doing but I was not sure if they would be able to block the proposed merger. 

"I only added to my investment in Sabana REIT in early December when the proposed merger was scuttled. 

"The purchase of more IREIT units at between 58c to 62c a unit happened in October and November."

I ended that reply with just one sentence on the size of my investment in the 3 local banks as a whole. 

It might have confused csky and here is my second reply to his follow up comment: 

Just to be doubly sure you got the right message, it is the combined value of my investment in the 3 banks which is bigger than the combined value of my investment in AA REIT and IREIT Global. 

As to the stuff I read to stay up to date, The EDGE is a weekly read for me and The Business Times can be interesting too.

I try to keep things simple during this crisis, avoiding speculation as much as I can, as there really isn't much clarity as to how long the COVID-19 pandemic and its deleterious effects might last. 

Although we have some vaccines ready for use now, we also have new variants of the COVID-19 virus and more countries are imposing lockdowns again.

To be safe, my strategy in 2021 will probably stay the same as my strategy in 2020.

Doing so might mean to err on the side of caution, of course. 

I mostly look at what businesses have and what they can deliver now even during a pandemic rather than what they might be able to deliver after we emerge from the pandemic. 

This made me avoid investing in SIA even as its stock price plunged, for example. 

I might be missing out on some extraordinary gains now and in the future but, like I always say, peace of mind is priceless. 

As for trying to stay up to date while actively gaming, Neverwinter's latest module is launching next month which will mean less time for blogging.  

References: 

1. 4Q 2020 Passive Income. 

2. Buying DBS, OCBC, UOB and IREIT Global.

Parents' CPF, voluntary refund to CPF and don't do silly things.

This blog was inspired by a comment from a reader.

Read SnOOpy168's comment: HERE.

Over the weekend, when I was spending time with my parents, I talked to them about their CPF savings and how they should try to put more into their RA and not leave money in their OA.

They will get bigger monthly payouts and enjoy 4% interest instead of 2.5% too.

My mom kept saying the OA money is going to us children when she passes on.

I had to keep telling her that we don't need the money. 

She and dad should not worry about us children.

I told her that if I were eyeing my parents' CPF savings as inheritance, I would be a sorry excuse for a human being.

I am not going to rehash and will do the easy (i.e. lazy) thing and share some of my old blogs here:

1. Boost elderly parents' CPF-RA or CPF-MA?

2. Improving my father's retirement adequacy.

3. CPF to help our retirement but what about our parents'?

On to the next topic which I told another reader I would touch on in my blog reply to SnOOpy168.

People don't realize what a big opportunity cost there is (i.e. the accrued interest) in the use of their CPF savings for everything they can use it for.

This is partially the government's fault for over liberalizing the rules on CPF usage.

It has also given the fake news mills plenty to scare people with.

This is a good example of the anxiety some feel about their CPF savings and the deficit caused by accrued interest for OA savings used:

Unemployed, almost 55 and worried about retirement.

In another blog, I shared that for those of us who are more conservative and who are financially able to, we could consider returning the money we used from our CPF-OA savings in the purchase of our homes to stop the accrued interest from growing:

How to stop accrued interest we owe from growing?

Not all of us are savvy investors and if statistics released by the CPFB is to be believed, most CPF members who invested with their CPF savings lost money.

They would have been better off leaving their money in their CPF accounts.

I would go for low hanging fruits first and CPF is a low hanging fruit and provides an unbeatable level of certainty.

1.  How to turn $60K into $332K?

2. An unbeatable level of certainty in wealth building.

I also shared the story of my CPF-OA because so many readers are incredulous when they see the figures and I did it also to stop the fake news mills from spinning fantasy stories about me:

How did AK amass so much money in his CPF-OA?

If we have plenty of cash sloshing around, we should invest with our cash first instead of our CPF-OA savings which earns a risk free 2.5% interest per annum which is very good especially in a low interest rate environment.

I like to think of my CPF savings as the risk free and volatility free AAA investment grade bond component of my portfolio and would like to end this segment by sharing this blog:

Don't do silly things and we can retire smart too.

I used to blog as much as I did because I really enjoyed it and probably too much.

After all, I did start the blog back in 2009 out of curiosity and boredom.

If by doing something we enjoy, we are able to do good, it is win win.

I still enjoy blogging but not as much as before.

So, blog I will but I cannot say if I will be as regular.

Related post:
Leaving a legacy and AK stops blogging.

1M50 CPF millionaire in 2021!

Ever since the CPFB introduced a colorful pie chart of our CPF savings a few years ago, I would look forward to mine every year like a teenager would wait in line for a cup of bubble tea.

Do you know that bubble tea is wealth and health destruction incarnate?

Expensive carbohydrate and sugar.

Expensive empty calories.

Oops, I digress.

So, what does my CPF pie look like?

It looks different from previous years.

I shouldn't say "it" because this year we get more than one pie.

I prefer the old pie because it looked cheerful with bright colors.

These new ones look really dull.

Anyway, I will just show the first pie:

Are you disappointed?

Oh, you are but not with the colors of the pie but with the numbers?

Right, where is the one million dollars AK hinted at in the blog title?

Well, this is where AK got tricky.

Some of you might have guessed it.

Voluntary contribution of $37,740 this month to my CPF account means I have more than one million dollars in CPF savings now!

Maybe, AK is an overgrown hobbit. 

"Stupid hobbitses, tricksy hobbitses."

Gollum reads Donald Trump's tweets:

Yes, I know.

Bad AK! Bad AK!

My CPF savings in January 2021:

Total:

$1,012,703.70

Hurrah!

We know of 1M65 which is to have one million dollars in CPF savings by age 65.

We might also have heard of people who have accumulated one million dollars in CPF savings before age 65 and now AK is one of them.

AK is 50 this year.

So, AK is a 1M50 CPF millionaire!

Technically, AK is a 1M49 CPF millionaire as he is a year end baby but 1M50 looks more wholesome.

So, 1M50 it is.

Anyway, 49 or 50, eh, who cares?

Indeed, I would argue that it doesn't really matter if it is 1M50, 1M55, 1M60 or 1M65.

I said before that the journey to financial freedom is not a race and as long as we achieve financial freedom, we win.

See:
Journey to financial freedom is not a race.

The same spirit should be applied to growing our CPF savings as just like the quest to achieve financial freedom, each of us could go at a different speed because each of us have our own circumstances to deal with.

Think of it as a rewarding journey that should provide some pleasure along the way.

No pressure, just pleasure.

As long as we are doing the right things as much as we can, we should give ourselves a pat on the back.

Growing my CPF savings over the years has been very satisfying and although I can only see the pie now, I will get to eat it one day.

Growing old is definitely not all doom and gloom if we are well prepared and we should help the CPF to help ourselves.

If we have not done so, start now.

Stay the course and, over time, we will see results.

Remember, compound interest might seem like magic but it really is simple math.

We don't have to be talented like Harry Potter to make it work for us.

If AK can do it, so can you!

AK says one hor. ;)

Related posts:

1. Retirement adequacy.

2. VC to CPF in January.

3. 2019 CPF savings in a pie.

Recently published:

1. 4Q 2020 passive income.

2. Interest income from CPF in 2020.

Reference:
Saving $1m through CPF, The Straits Times.