Capitaland China Trust: Another largest investment?

I have always liked industrial S-REITs.

Long time readers would remember blogs like this:

Office REITs versus Industrial REITs.

Industrial REITs having much higher distribution yields made the decision to invest heavily in them easier too.

We will always need all kinds of warehouses and with e-commerce being so entrenched, they are even more in demand.

Business parks fit a niche demand for where office space in the CBD is considered too expensive.

Together with all other types of industrial buildings, they are pretty difficult to disrupt as a class.

In fact, they are more likely to be disrupters or friends of disrupters than victims of disruption.

Of course, on hindsight, we also see how resilient industrial S-REITs can be in a pandemic setting.

I have the following in my portfolio:

1. AIMS APAC REIT

2. Sabana REIT

3. Frasers Logistics Trust

4. Capitaland China Trust

Yes, it is a bit strange to see Capitaland China Trust in this list because it was Capitaland Retail China Trust before.

Of course, although it has dropped the word "retail" from its name, it still has shopping centers in its portfolio.

It is more of a hybrid now.

Source: Presentation 26 April 2022

I have been adding to Capitaland China Trust at around $1.10 a unit.

I don't think that the lockdowns in China can go on forever.

So, the pessimism will lift at some point.

The initial plan was to have the investment similar in size to my investment in Frasers Logistics Trust which is one of my larger smaller investments.

However, I am now thinking of making my investment in Capitaland China Trust similar in size to my investment in Sabana REIT which is one of my largest investments albeit the smallest in the club.

Maybe, I am feeling a little sorry for Sabana REIT being all alone in the lowest bracket in my list of largest investments.

Capitaland China Trust is trading at a big discount to NAV.

Its NAV is about $1.50 a unit.

Capitaland China Trust also offers a relatively high distribution yield.

If a DPU of 9c continues to be paid, at $1.10 a unit, that is a distribution yield of almost 8.2% which sufficiently compensates for any negative vibes Mr. Market might have.

Yes, I think that we will look back at this episode in history as just negative vibes.

It is like how Mr. Market was feeling very negative about Sabana REIT when ESR REIT made the low ball takeover offer.

It was because of that episode that I was able to accumulate aggressively at around 35 cents a share which brought my investment in Sabana REIT back into my list of largest investments at the end of 2020.

The distribution yield for that investment based on my cost is almost 9%.

Pulling another rabbit out of the hat with Capitaland China Trust, perhaps?

Your guess is as good as mine, of course.

Recently published:
AIMS APAC REIT: Gearing too high?

Related posts:
1. Reallocate as interest rate rises.

2. Sabana REIT to the rescue.

Is Nio the new Tesla? Buy or don't buy?

This is not something you would expect to read here in ASSI.

AK is known for investing for income.

AK doesn't invest in innovation and tech.

AK is boring.

Hey, AK put some money in Chinese tech and even Bitcoin recently.

OK, ok, it is true that my exposure to Chinese tech and Bitcoin is tiny relative to the size of my portfolio.

Oh, the shame!

Sadness.

Anyway, I have been looking at Nio recently after reading news of its pending secondary listing in Singapore earlier this month.

I know a little bit about EVs and their production now.

I also know that Nio has a horrible balance sheet.

Nio is still burning cash.

It looks like a terrible business to invest in.

However, that's what Tesla was doing in its infancy, burning cash.

Tesla was burning cash and on the verge of bankruptcy when trying to get the Model 3 right.

From what I now know, Tesla struggled for years before turning profitable.

Although I have done some research, I am sure I have only scratched the surface.

This is very similar to how much or, more accurately, how little I know about Chinese tech and Bitcoin.

Not knowing a lot but enough knowledge to get me to put some money to work.

What about Nio?

There are so many things which I have found out.

However, two points stick out for me:

1. Nio is still burning cash but we have Tesla's experience to quite possibly show Nio the way to the future.

2. The Chinese government also seems to have put its weight behind their EV companies which is very OP (which means "overpowered" in gaming lingo) and Tesla did not have this.

Although putting money in Nio now is probably more speculation than investment, these two points gave me a nudge.

Do not underestimate the will and ability of the Chinese government. 

This is something I have heard often enough.

Going by the global narrative, EVs will most likely continue to replace ICE vehicles too.

Don't fight the trend.

It is obvious for some time now that EVs are going to be a big part of our future but AK is myopic and could not see it until recently.

Very cham like that.

Still, even myopic AK can see why some call Nio the Tesla of China because they make very beautiful cars.

Nio isn't a copy of Tesla.

Nio strikes me as being very innovative.

A problem with EVs is that some countries like Singapore do not have enough charging stations and Nio solves this problem with battery swapping stations.

Battery swapping also takes less than 5 mins while getting an EV fully charged could take an hour or more.

It is such a simple idea but also absolutely mind blowing.

Very impressive.

Source: Nio.

Will Nio succeed as a business?

My bowling ball put on its crystal ball costume and told me that Nio would most likely succeed.

Nio has been ramping up production and deliveries.

It might still be early days but it is probably a matter of time before Nio turns profitable.

In the meantime, they just have to continue to ramp up production and deliveries while narrowing their losses.

Indeed, they have been narrowing their losses.

Anyway, now that I have become a Nio shareholder, am I less boring of an investor?

Chinese tech, Bitcoin and now Nio.

I don't recognize me anymore.

Alamak.

You blur?

I also blur.

Technically, Nio's share price has been down trending.

However, I see a positive divergence with the MACD.

This could indicate that selling pressure is weakening.

If the share price has not bottomed, a bottoming process has possibly started.

Nio could be put in the same boat as my foray into Chinese tech.

We could be seeing a bottoming process but it could be some time before we can call a bottom.

So, I remind myself to eat crusty bread with ink slowly.

Just like my investment in Chinese tech, I am limiting my exposure to Nio to 1% of my portfolio for a start.

An eventual cap at 2% or 3% of my portfolio which is what I have in mind for Bitcoin as well might be a good idea as, to be honest, Nio is still pretty speculative as an investment.

Even though Nio's share price has declined significantly from its peak which was a ridiculous price of US$67, at a price of US$17 or now US$16 a share, we are still assuming that Nio will eventually grow its profits relatively quickly when it does become profitable.

It is only prudent not to throw in everything including the kitchen sink.

With my initial investment in Nio at only about 0.3% of my portfolio, I have just gotten a foot in the door.

Throwing money at Nio is very likely more proof that AK is mental and that his condition is getting worse.

Don't play play and anyhow follow.

------------------------

Just when I was about to publish this blog, I found out that Nio will be included in the Hang Seng Tech Index on 13 June.

So, Nio will be rubbing shoulders with BYD, Xpeng and Li Auto, the other big Chinese EV companies in the index.

This means that I will have exposure to Nio through my position in Lion-OCBC Securities Hang Seng Tech ETF too.

This simplifies things for me. 

Now, I can abandon my plan to add to my position in Nio as I much prefer adding to my position in the ETF instead. 

Won't have to deal with concentration risk when Nio is still loss making. 

I have, therefore, added to my investment in the ETF again which brings it closer to 1% of my portfolio and partly because things are looking less negative chart wise to me.

So, has this Nio blog been a total waste of time then?

Oh, well, at least it got me to do more research on EV companies.

Still, I could have spent the time gaming instead. 

Tragic.

On the subject of gaming, updates to Genshin Impact have been slow due to the COVID-19 situation in China and Neverwinter has been slow to roll out their new module too.

This explains why I have been blogging more frequently but this is about to be fixed.

Genshin Impact is getting up to speed with new versions announced for end of May and also the middle of July.

Neverwinter is launching their new module, Dragonslayer, middle of June.

So, don't be surprised if I disappear from real life for a while.

Good luck and have fun!

Recently published:

1. AIMS APAC REIT: Gearing level.

2. Investment in OCBC is larger now.

Related posts:

1. Eat crusty bread with ink slowly.

2. Invest in Chinese tech.

3. Buy Bitcoin.

For those who are interested in Nio's SGX filings, see: SGX Filings by NIO.

AIMS APAC REIT: Is gearing level too high?

I have decided to publish my reply in response to a reader's comment that AA REIT's gearing level is at 51% as a blog.

This is because I have received similar comments in recent months.

Having my response published as a blog will make it easier for me to point readers who leave me similar comments in the future to a ready response.

My reply:

Hi patrol, 

I don't know which piece of research that is but AA REIT's latest published gearing level dated 27 April was 37.5%. 

If you are referring to the perpetuals which AA REIT has on the balance sheet, there was a discussion in the comments section here in ASSI a few months ago in February. 

You might be interested to read those comments in this blog: 

AA REIT to buy Woolworths' HQ. 

Having said this, with interest rate rising, if AA REIT were to raise funds to strengthen its balance sheet, it isn't a bad idea. 

Unlike IREIT Global which retains 10% of its distributable income, AA REIT distributes 100% of its distributable income to investors. 

This is a reason why IREIT Global's balance sheet is so strong. 

In another conversation in the comments section, I said that if AA REIT were to take a leaf from IREIT Global's book and retained 10% of its distributable income, it might not be a bad idea too. 

I said a lot more in those comments like why I was reducing my investment in Centurion Corp. but didn't see a reason to do so for AA REIT yet. 

You might want to read those comments which you will find in this blog: 

Reallocate as interest rate rises. 

You might also be interested in this blog: 

AA REIT or IREIT Global?

Investment in OCBC is larger now.

During the pandemic induced bear market, as the dust was settling, within a few weeks, I made a relatively large investment in UOB. 

The plan was to get my investments in DBS, OCBC and UOB to be on equal footing with each other.

Mr. Market's severe bout of depression provided the perfect opportunity to execute the plan.

See:

Buying DBS, OCBC and UOB.

and

Three local banks, 3 REITs...

Quite simply, the plan was about diversification.

That decision turned out very nicely as UOB went on to buy Citibank's assets in a few Asian countries. 

That move is expected to give a boost to UOB's future earnings and could lead to a more favorable view of the local lender.

More importantly, it could also mean higher dividends in future.

This week, I decided to have a stronger focus on value and increased my investment in OCBC.

The size of this increase is around 10%.

Doesn't sound like a lot but given the size of my investment in OCBC, it is pretty sizeable to me in dollar terms.

OCBC offers better value for money when compared to DBS and UOB, in my opinion.

Amongst the local lenders, OCBC is trading at the smallest premium to book value.

OCBC also offers the highest dividend yield and this is made more attractive by the fact that it isn't the one with the highest payout ratio either.

With the recent purchase, OCBC has become my largest investment in the banking sector.

OCBC should continue to bring home the bacon and with a larger investment, I am looking forward to larger servings in the future.

If Mr. Market should offer me lower prices, all else being equal, I would most probably be adding to my investment in OCBC again.

I don't know exactly why OCBC's valuation is cheaper than DBS or UOBs'.

However, if I were to hazard a guess, I would say it is probably because of OCBC's exposure to China.

People are generally very wary of China and investments in China in general.

It has been going on for a while now.

Alibaba, anyone?

China accounts for about 25% of OCBC's loans.

See:

Source: OCBC

Alamak!

How like that?

Has Mr. Market priced in a Chinese risk premium?

If we believe that China is going the way of the Dodo, then, maybe, we should avoid investing in OCBC for now.

If we believe that the negativity towards China and, to a smaller degree, OCBC is overdone, then, we want to stay invested.

Having said this, objectively, I will continue to look out for opportunities to increase my investments in all three local banks as I believe they will continue to shine.

In fact, with interest rate rising, unless we see a deep and long lasting recession, all three local lenders should shine even brighter.

Recently published:
SBS Transit and ComfortDelgro.
Related post:
Reallocate as interest rate rises.

SBS Transit and ComfortDelgro.

Towards the end of April, I revealed that I added SBS Transit to my portfolio and I also added to my investment in ComfortDelgro.

I said I would talk a bit more about these in my next quarterly report.

I was just being a lazy fellow, as usual.

Well, I decided that I should talk about it sooner than later because I am a nice person too. ;)

I should not leave a story half told (for too long.)

So, why did I do what I did?

SBS Transit is, of course, mostly owned by ComfortDelgro and in the business of public transportation minus the taxis (and airplanes.)

As I expect ComfortDelgro to do better post pandemic, all else being equal, a major contributor to this improvement should come from SBS Transit as ridership numbers on buses and trains improve.

So, becoming a shareholder of SBS Transit while its stock price languishes at close to pandemic level seems like a fairly good idea.

Fundamentally, SBS Transit is a profitable business with a relatively strong balance sheet too.

Then, if we look at EV/EBITDA, like ComfortDelgro's, SBS Transit's valuation is relatively cheap.

Having said this, I am not going to build a large position in SBS Transit as I already have a relatively large investment in ComfortDelgro.

I am more interested in increasing my investment in ComfortDelgro and I did so again earlier this month when the price of its common stock dipped below $1.40 a share. 

I thought Mr. Market was offering me a bargain given ComfortDelgro's improving prospects.

Although the pandemic revealed a major weakness in the business of public transportation and not being overly optimistic about the improving situation is probably a good idea, neither should we be overly pessimistic.

This is especially the case as we learn to live with COVID-19.

ComfortDelgro, unlike SIA or GRAB, has a relatively strong balance sheet.

ComfortDelgro is also profitable and not burning cash like SIA or GRAB.

What about dividends?

Ahem.

If we compare the free cash flow generating abilities of ComfortDelgro, SIA and GRAB, it is very clear which one is the winner.

Dividends from my investment in SBS Transit should be enough to pay for my mobile phone's subscription every year and still leave enough money to buy a few dozen bars of dark chocolate.

ComfortDelgro should better reward shareholders as earnings improve and with my larger investment, I would be a happy beneficiary in this case.

Of course, remember, this is just mental AK talking to himself again.

Recently published:
Rising interest rate and home loans.

Related post:
Quick update...

Source: The EDGE

Rising interest rate and home loans.

This blog is in reply to a comment from a reader.

I blogged about home loans before: 

Fixed rates, SIBOR, FHR18 or HDB housing loan? 

That was about 6 years ago but I think some bits are still worth reading. 

My gut feeling is that mortgage rates will rise faster than the SSB's 10 year average coupon. 

Even the fixed deposit rates are rising rather quickly now as banks have started competing for deposits. 

Banks are trying to lock savers in with higher rates now because they think interest rates will go even higher in future. 

My mom went to renew her fixed deposit a few weeks ago and was pleasantly surprised to be offered 1.1% for 1 year. 

This was because my aunt did her renewal a month before and she was offered 0.8% at the same bank. 

Another bank offered my mom 1.5% per annum but it was a 2 years fixed deposit. 

For a 3 years fixed deposit, they offered her 1.9%. 

That's too long and we are not compensated enough when interest rates are expected to rise rapidly in the next couple of years.

I told my mom to just go with the 1 year fixed deposit because interest rate would probably continue rising rapidly. 

We could soon see 2% interest rate offered for a 1 year fixed deposit.

In fact, it could even go higher if inflation stays stubbornly high and the Fed has no choice but to continue raising interest rate to a point where it is higher than the inflation rate. 

After all, the most effective way of bringing down inflation if past experience is anything to go by is to have interest rate higher than what inflation is and inflation is at about 8% in the USA now. 

We can say that inflation is lower in Singapore but, unfortunately, when it comes to interest rate, Singapore is a price taker because we do not control the interest rate in our country. 

"Most countries, including the United States and China, adopt an interest rate policy where central banks raise or cut interest rates. 

"Singapore is the only major economy in the world to use the exchange rate, guiding the Singdollar higher or lower. 

"MAS says the exchange rate is the best tool for a small, open economy like Singapore" 

Source: The Straits Times. 

Still, no one can be sure what the longer term picture is going to be but in the shorter term, there will be pain and most of us should be prepared to tighten our belts. 

I remember when I paid off my last home loan, my mortgage rate was 5.1%.

Yes, young people might find that rather surreal but it wasn't a bad dream.

It was real.

Interest rates are going higher but no one knows for sure how much higher.

Still, if we are not overleveraged, all else being equal, we should do better than most.

See: 

Do not make difficult times more difficult.

Recently published:

Lucky to have Singapore Savings Bonds.

Related posts:
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2. Buying a home for first timers.

Lucky to have Singapore Savings Bonds.

Stock market is crashing.

Bond market is crashing.

Crypto market is crashing.

Suddenly, everyone is rushing for the exits and looking for safe harbors to park their money.

So, quickly now, withdraw all our money and stack them up at home (and pray that there are no termites.)

Alamak, I believe in keeping some cash at home for convenience but this is too much lah.

Of course, jokes aside, all of us know about the risk free and volatility free CPF we lucky Singaporeans have.

What about risk free and volatility free Singapore Savings Bonds or SSBs?

Well, long time readers of my blog might remember that I blogged about SSBs donkey years ago.

However, I hardly talk about them compared to how much I talk about the CPF.

I am blogging about the SSB now because many readers left comments about the SSBs in my blog and even my YouTube channel in recent days.

Whether something is good for us or not will depend on what we need and how well it fits that need.

The SSB is designed as another way for risk averse people to save money (up to a maximum of $200K at any one time) for the medium term.

We can tell this is the case because to get the maximum coupon, we have to hold the SSB for the full 10 years.

If our motivation is not to save money for the medium term, then, we have to accept the possibility of receiving smaller coupons if we should make premature redemptions.

The SSB is also safe because there is no penalty for premature redemption although there is a waiting time before we can get our money back.

So, it isn't the nearest of money which means it isn't the best way to store our emergency fund.

An easy solution is to park only a portion of our emergency fund in a SSB if we really want to use it that way.

This might not work if someone has a relatively small emergency fund in which case I think leaving the money in a fixed deposit might be a better idea.

I blogged about this way back in 2015 and if you are interested in what I said back then, read:

Singapore Savings Bonds: Good?

Now, having said this, with interest rates rising, if the SSB should offer an average coupon of 4% eventually, it might be a no brainer to park some money in SSBs for the full 10 years as it would mimic the CPF-SA.

It really is not easy to get a consistent 4% risk free and volatility free return especially in a strong currency like the Singapore Dollar.

It is utter mayhem in some markets and things could get worse before they get better.

Who knows?

Things could even get worse for longer if we get stagflation.

Still, as long as we are financially prudent, have a large enough emergency fund and are invested in bona fide income producing assets so that we receive passive income to cover a good portion of our expenses, we should do better than most. 

The aim is to be always prepared for winters.

I do not doubt that other than those who are super rich, most of us would have to make adjustments in the event of a longer winter even so.

Be pragmatic.

If AK can do it, so can you!

Recently published:

1. Buy Bitcoin at long term support.
2. Reallocate as interest rate rises...

Relevant video from AK's YouTube channel:

Buying Bitcoin at long term support.

On 5 May 22, I published a blog on why I was looking to add Bitcoin to my portfolio.

The plan was to have gold, silver and Bitcoin form 4% to 5% of my portfolio as insurance against fiat currencies.

This decision was made after plenty of thinking and research.

Of course, there are plenty of cryptocurrencies available but I am only interested in Bitcoin because of the "Bitcoin is digital gold" line of thought.

I have no interest in the "Buy cryptos to get rich quick" line of thought which has a strong speculative flavor to it.

When something gains traction and greater mainstream acceptance, often, we see variants of it spawning as everyone tries to get a piece of the action.

It is no different in the crypto space and very recently, the crypto space had their version of Blumont/Asiasons crash.

Seeing is believing:

Luna has crashed.

Crash is probably an understatement as this Luna crash puts the craters on the Moon to shame.

Many who placed heavy bets on Luna lost everything.

Terrible.

What about Bitcoin?

Well, it is crashing too but not in such a dramatic fashion.

I only got my little toe in the Bitcoin door a couple of weeks ago.

Why not a foot? 

I initiated a very small position because I saw a bear flag in the chart.

The suggestion was that price could go a bit higher and then it could swing lower and I would accumulate only at a lower price.

So, with the price crashing now, when would I be buying more Bitcoin?

Using simple moving averages to throw some light on that matter, the 200 days moving average seems like the one to watch.

Chart dated 12 May 22.

This 200 days moving average is still rising and approaching US$22,000.

Just quick and dirty technical analysis.

Of course, technical analysis shows where the supports and resistance are but it doesn't tell us if they would be tested.

Will just have to wait and see.

Recently published:
Reallocate as interest rate rises...

Related post:
Gold, silver and Bitcoin.

Reallocate as interest rate rises in a slowing economy.

Interest rate is rising.

PM Lee recently warned of a possible recession in the quarters ahead.

Put rising interest rate and a slowing economy together, we get a rather gloomy picture.

The evil which is inflation is preferred to the evil which is deflation.

Although inflation is the lesser evil, it isn't as benign when it is heightened which is what we are seeing now in the world.

We can reduce inflationary pressure either by increasing supply of goods and services which are in demand or tempering demand for such goods and services.

As it is difficult to increase supply right away, central banks are trying to tame inflation by increasing interest rate in an effort to reduce demand.

Increasing interest rate increases the cost of debt.

Credit is the lifeblood of commerce and most businesses are leveraged to some degree.

If the economy is healthy, businesses can pass on the higher cost of doing business to their customers and higher finance expense that comes from higher interest rates are naturally a part of such cost.

However, it becomes more difficult for many businesses to pass on such higher costs to customers if the economy is suffering from malaise.

Heightened inflation, rapidly increasing interest rates and low economic growth is not a good mix.

In such a situation, even very strong companies will not be spared a slowdown as most entities would be less ready to part with their money.

Already, we see some big name MNCs both in the old and new economies warning of very difficult quarters ahead.

Only the fittest will survive but even they might not emerge unscathed from such a toxic cocktail.

As an investor for income, I believe that businesses which are able and willing to pay a meaningful dividend should be favored.

To make sure that dividends are sustainable, these businesses should also provide necessary goods and services and have stronger balance sheets.

They too will take a few punches during hard times but they should be able to roll with the punches.

I think staying invested is still the way to go but, like I said, I should mostly be invested in businesses which are able and willing to pay dividends even during hard times.

So, with this in mind, I have taken a hard look at my largest investments since they impact the performance of my portfolio the most.

The strategy to increase my investments in DBS, OCBC and UOB during the COVID-19 induced bear market has turned out well and sticking with this strategy makes sense to me especially with interest rate rising.

I am also interested in increasing my investments in ComfortDelgro and CLCT on weakness as they seemed to have lagged in price recovery while their businesses look more attractive to me in recent times but for different reasons.

I am leaning more towards ComfortDelgro which has a stronger balance sheet and also because looking at the numbers which have improved, there is a fairly good chance that future dividends will be higher and could even go back to pre-pandemic levels.

CLCT's plan is to increase the proportion of new economy assets in their portfolio and I foresee more fund raising in the future.

So, I will increase my investment in CLCT slowly and not bulk up in a hurry.

REITs are required to pay out at least 90% of their operating cash flow to investors to enjoy tax benefits and this is a source of comfort to me.

The REITs in my portfolio are rather conservative when it comes to debt and in the case of IREIT Global, some of their rental income is linked to the German consumer price index and higher inflation could see a greater increase in income.

In my list of largest investments, the only entity which did not pay a dividend during the last bear market was Centurion Corporation.

Amongst my largest investments, Centurion Corporation also has the weakest balance sheet apart from Wilmar International.

However, Wilmar International is in the business of food production and distribution which, in my opinion, is recession proof. 

Given their size and market dominance, they should be able to charge higher prices.

Wilmar also has good options available to unlock value for shareholders and they were paying dividends even during the pandemic.

I increased my investment in Centurion Corporation as Singapore decided to live with COVID-19.

For those who are interested in my thoughts on the matter, read:

1Q 2022 passive income.

In an environment of rapidly increasing interest rate and slowing economy, however, with a rather weak balance sheet, it could be harder for Centurion Corporation to bring home the bacon.

In my original blog on why I invested in Centurion Corporation, I crunched some numbers on how rising interest rate could impact Centurion Corporation's interest cover ratio.

For those who are interested, read:

Added Centurion Corp to portfolio.

Of course, if they are able to increase asking price per bed meaningfully to balance the increase in the cost of debt, then, they should be OK.

Although they would be able to do so easily in a healthy economy, it might not be so easy during times of economic malaise.

Wait, didn't Centurion Corporation do quite well even when the economy was unhealthy?

Yes, they did but they didn't have to deal with rapidly increasing interest rates.

I don't know everything and I might be missing a few things here.

So, I have decided to only reduce my exposure to Centurion Corporation and not go to zero.

As my total passive income held up quite well during the two years when Centurion Corporation suspended dividend payouts, I doubt reducing my investment would have any meaningful impact in terms of passive income generation which makes this decision an easier one for me.

Although Centurion Corporation still looks undervalued to me as it trades at a huge discount to NAV, to be honest, this discount could reduce as valuation of their assets could take a hit.

It would be interesting to see how the management navigates the challenges ahead and how they might unlock value for shareholders.

They are trying to sell some assets in the USA now which if successful should help in reducing leverage and unlocking value.

To this end, I believe they should ramp up their effort and sell more assets.

Like Phua Chu Kang said at the onset of the COVID-19 pandemic, "Things different already."

In the grand scheme of things, this is a relatively minor shift of resources but because I am more inactive than active as an investor for income, it might seem like a big event.

Remember, mentally unstable AK is just talking to himself, as usual.

Have a plan, your own plan.

Recently published:
Avoid this in a rising interest rate environment.

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1. Rising interest rate flashback... 

2. Largest investments 1Q 2022.

3. Investing with peace of mind.

Sell property worth $3.5 million and retire from work?

A couple both age 38 with 2 young children (ages 4 and 6) are thinking whether to sell their fully paid up investment property valued at $3.5m?

If they were to sell the said property, the wife could become a stay at home mom. 

The other option is to keep the property and continue to have dual income.

A part of the comment:

I am publishing my reply to this comment as a blog to see what others have to say since I don't have all the answers.

What do I think?

This is my reply:

"Congratulations to this couple because what they have is a first world "problem." 

"I cannot provide an answer as to which option is better because it all boils down to what is more important to the couple at this point.

"The choice is not between two evils and to determine which is the lesser evil here.

"The choice is between two outcomes which are good in their own ways. 

"Is time spent with the children in their formative years more important or is greater certainty in money making more important?

"What I do know is that kids grow up very fast.

"Growing up, I didn't get to spend much time with my parents as both of them had to work long hours.

"If our family had been financially better off, then, things might have been different.

"Taking the feelings of children into consideration in financial matters is a luxury for most families but for this family, it could be a luxury which is affordable.

"We have to ask how much is enough and I can only speak for myself." 

Recently published:
Avoid this when interest rates rise.

References: 

1. When can I quit my full time job? 

2. My family almost went bankrupt.

3. Financial freedom and not enough time.