Changes to portfolio in January 2023.

I might or might not make this a regular feature and that is to talk to myself what I did to my portfolio (if there should be any activity) in the preceding month.

I guess I will just do it whenever I feel the inclination to do so just like with so many things I do in my retirement.

In middle of January, a fellow blogger asked me:

"ComfortDelgro has fallen quite a bit. I have been slowly accumulating over a period of time. So, are you?"

In reply, I said:

"I don't know if you read in the blog that I reduced my investment in ComfortDelgro in 4Q 2022 or you missed it but it is a smaller investment for me now. 

"When its stock price bounced up to test resistance, I lightened my position. 

"Technically, its stock price looks like it could go lower and I am watching $1.15 at this point. 

"The main reason why I was not as aggressive in reducing my investment in ComfortDelgro compared to Centurion Corp. is its relatively strong balance sheet."

True to my word, I went and increased my investment in ComfortDelgro at $1.15 later on.

Suddenly, I am reminded of some people who went on a diet to lose weight but gave up and gained back all the weight they lost.

Alamak.

Not like that lah.

The increase in size although pretty significant, percentage wise, was on a much smaller investment than it was a year ago.

So, didn't gain back all the weight lah.

Technically, ComfortDelgro's stock price is still in a downtrend but it could be in a bottoming process now.

The moving averages are still in decline.

Could ComfortDelgro's stock retest its low of $1.13?

If it does and if I see a positive divergence which means lower price but higher lows in the momentum oscillators, I would probably buy some.

Will be looking out for a double bottom too.

Fundamentals look to be stabilizing and although I am not expecting an increase, this year's dividends should still be meaningful.

Other than ComfortDelgro, I added more T-bills to my portfolio.

I used cash to get both the 4.2% p.a. and 4.0% p.a. 6 months T-bills in January.

A YouTube video from AK:

I also used most of my CPF-OA money to get the 3.87% p.a. 1 year T-bill in the same month.

Although I would not be including the income from the 1 year T-bill in my quarterly passive income report, I thought I should just make a mention for the sake of completeness. 

I will account for the income from the 1 year T-bill as interest income in my CPF account and rightly so as the money has been credited into my CPF-OA where it will still be making 2.5% p.a.

I know I said I am looking forward to being lazier as an investor in 2023.

Well, there are 11 months left to be lazy.

There is hope!

Another YouTube video from AK: 

Recently published:

Bank and REITs dividend machines? T-bills, SSB and CPF?

References:
1. My CPF account hacked?
2. Largest investments updated.
3. 4Q 2022 passive income.

Banks & REITs Dividend Machines? T-bills, SSBs & CPF?

If you have been following my blogs, you might remember that I have been buying T-bills and Singapore Savings Bonds. 

The plan is to continue maintaining a meaningful fixed income component in my investment portfolio.

Of course, if you have been following my blogs for even only a couple of years, you would know that I have been maxing out voluntary contributions to my CPF account. 

This is because I treat the CPF as an investment grade sovereign bond.

However, for most of us, fixed income alone is not enough if we want to achieve financial freedom.

If I had parked my money only in fixed income, I would not have been able to achieve financial freedom.

I definitely would not have been able to retire before I turned 45 almost 7 years ago.

So, what to do?

We should invest for even higher returns. 

We should also be investing in equities for income.

A big investing theme in my blog for many years now has been to invest in DBS and OCBC, with UOB being added during the pandemic bear market.

I have also mostly been successful investing in some REITs like AIMS APAC REIT, for example.

For most of us, investing in equities is one of the least demanding methods to generate passive income as it has a relatively low barrier to entry.

With smallish sums of money, we can invest in bona fide income generating assets and businesses. 

These are businesses which have the ability and will to share the fruits of their labor with investors.

Investing for income is not sexy and doesn't send my heart racing which is not a bad thing if you have a weak heart like mine.

The bulk of my returns from the stock market is in the form of dividends and I blogged about receiving $2 million in passive income over the last 13 years.

However, to be honest, investing for income can be risky too if we do not know what to avoid.

If we want to be successful as an investor for income, just staying near the shore, we might not catch enough fish to make it.

If we venture farther out to sea in search of bigger schools of fish, we might get hit by a gigantic wave in the form of Eagle Hospitality Trust, for example.

(If you want to read more on how I avoided the landmine that was Eagle Hospitality Trust, a quick search will find you those blogs I published.)

So, how like that?

Our chances of success will be better if we are well schooled (pun intended) to navigate open water.

We can do some self study (and I have a book list in my blog's right sidebar titled "Food for thought") if that is the way we choose to go.

For those who prefer structured guidance, however, there are always courses which can do the job of educating us.

I was the first blogger to ever endorse Dividend Machines and I have attended the classes too.

If we are interested in having structured guidance, don't drag our feet as Dividend Machines is only available once a year.

Miss this and we would have to wait another year.

For many years now, Dividend Machines is the only investment course I promote in my blog as I feel it is truly value for money.

Dividend Machines will not cost us an arm and a leg but don't take my word for it.

Find out more for yourself:

Dividend Machines 2023

Hop to financial freedom in the Year of the Rabbit!

If AK can do it, so can you!

OCBC and IREIT Global: Missed the boat?

This blog is in response to a reader who asked if he has missed the boat for OCBC and IREIT Global?

It feels like it has been some time since I had a blog like this.

Very rare.

If you like such blogs, hope you enjoy this one.

AK says to reader:

OCBC's chart shows a strong upward momentum in the MACD but the MFI shows that it is borderline overbought. 

Testing resistance now at $13 and if it fails to break resistance, the immediate support is at $12.50 which is provided by a rising 50 days moving average. 

A stronger support is the longer term 200 days exponential moving average which is now at $12.15 but as it is still rising, at this point, this support price will move higher over time. 

OCBC's chart.

Likewise, IREIT Global's chart shows a strong upward momentum in the MACD but the MFI has dipped and is no longer in overbought territory which gives it a bit more room to move higher with less resistance. 

Unlike OCBC, however, IREIT Global's 200 days moving average is still declining but very slightly so which means it is unlikely to be a strong support although this is where IREIT Global's price is currently sitting.

In a relatively buoyant market, to be fair, even a weak support is more likely to hold.

If this support breaks, then, the rising 50 days moving average should provide the next support which, at this point, is at 52 cents.

As this support is rising, it is likely to be relatively strong even though it is a shorter term moving average.

It is also interesting to note that the 50 days moving average formed a golden cross, a bullish crossover with the flattening 100 days moving average in the middle of January. 

IREIT Global's chart.

In summary, both OCBC and IREIT Global's charts show that they have emerged from their multi months bottoming process and they are unlikely to retest their October 2022 lows anytime soon. 

As usual, remember that technical analysis is about probability and not certainty. 

More importantly, mental AK is just talking to himself, as usual.

Recently published:
1. Bankruptcies & property auctions...

2. Fed's 0.25% hike, stocks & bonds.

3. Have $10K? Save or invest?

Bankruptcies and property auctions rising. Rule of 15 ten years later. Are those who ignored the rule paying the price?

"Bankruptcy petitions are on the rise amid interest rate hikes, growing inflationary pressures and the expiry of pandemic support measures for borrowers, notes real estate consultancy Knight Frank."

Source: 

The Business Times, 31 Jan 2023.

I first blogged about the Rule of 15 in 2013.

That was 10 years ago.

Scary how quickly time flies.

It was something that generated plenty of discussion.

Most readers were curious.

Many agreed while some, mostly property agents trying to sell properties including those trying to sell properties in Iskandar Johor, disagreed.

Some who disagreed were even pretty belligerent and said I was spouting nonsense, which, to be fair, I do from time to time.

Sadness.

From that blog, a few more were published.

Since it has been so many years, readers new and old might ask what is the Rule of 15?

Basically, the "Rule of 15" says that if we could buy a home at a price that is 15 times (or less) the annual rent a similar property would fetch in the area, it makes more sense to buy than to rent.

I felt that the simple "rule" could be used as a guide to help in decision making not just in buying and renting properties but also in selling if we happen to own properties.

I still feel the same today.

Anyway, if you are new to my blog or if you need to refresh your memory, this is the link to the blog which has examples too:

To rent or to buy: Rule of 15.

You could also tune in to a video AK produced on the Rule of 15 if you prefer to listen than to read:

At the time, I said that the low interest rate environment which, of course, persisted more or less till early last year, made the very much lower rental yields acceptable to investors.

Now that interest rates have risen or normalized, if we have purchased a property with the help of a bank loan, we would have a heavier debt burden and would have to demand a higher rental yield from the property.

Property value could, however, reduce if the property we own is unable to command a higher asking rent which is highly possible in a weaker economy.

Doctor Evil getting a haircut in Iskandar, Johor?

Paying more every month to service the loan and seeing the value of the property reducing which might or might not lead to lenders knocking on our door?

Double whammy?

So stressful.

It would be even more stressful if we took on huge loans or many loans and leveraged to the hilt.

Interest rates rising seems to have led to the tide receding and we could begin to see who are the people who were swimming naked.

So embarrassing.

Very cham like that.

Remember this blog in which I said we could grow richer if we didn't think of three things?

Don't think and grow rich.

I also shared a story about what happened to someone I knew:

From rich to broke.

Of course, as usual, AK is just talking to himself.

Is my blog for entertainment or education?

I blur.

You decide.

Related posts:
1. Rule of 15 revisited (2017.)
2. Cash flow is more important.
3. Buying property in Iskandar Johor?

My take on Fed's 0.25% rate increase, stocks and bonds.

So, the Fed has increased interest rate by 0.25% and Mr. Market likes it.

Tech stocks are higher and even Bitcoin is higher. 

It is not surprising as these are assets which thrive on lower credit cost.

Wait.

Did you say lower credit cost?

But the Fed is not lowering interest rate.

They are still increasing interest rate.

Less steeply, for sure, but still an increase.

Well, you know what they say about Mr. Market being forward looking by 6 months to 9 months?

It could be that Mr. Market thinks that the Fed will reduce interest rates towards the end of the year.

Alamak.

How like that?

Throw all our money including the kitchen sink into tech stocks and Bitcoin now?

Well, I am sure some will do that.

I remind myself that joining Mr. Market's exuberance party could end badly and for those who were bitten before, they would probably be rather shy now.

Anecdotal evidence shows plenty of interest in  quality fixed income.

If we can get around 4% p.a. yield from risk free and volatility free bonds and fixed deposits, as investors for income, there is really no reason to put  money in tech stocks which pay little or no dividends.

Apple is a tech stock that is all about growth but I wonder if it can continue growing as much as it grew in the past and what is its dividend yield even at the current price? 

1%?

What about Tesla? 

You mean the company run by the arguably manic Elon Musk who sold billions of dollars of its stock to buy Twitter which he then went on to steer towards the verge of bankruptcy?

Elon Musk threw Tesla's common shareholders under the bus was what AK said to himself.

I am not telling anyone not to buy stocks of Apple or Tesla.

I am just reminding myself why I am not a fan.

Having said this, just like my take on Hang Seng Tech ETF, I think these tech stocks are probably pretty good for trading.

So, for anyone who has the inclination, they could make a bit of money trading these stocks as volatility is the friend of a skillful trader.

The more important word here is "skillful" and not "trader."

(Hint, hint, nudge, nudge, wink, wink.)

Having said this, I have to confess that a slowing down of the Fed's rate increase is a good thing for my "tech-less" investment portfolio too.

Why?

It is good for the REITs, of course.

So, REITs are the same as tech stocks lah, some readers might think.

Well, same same but different.

REITs generate income and share income with their investors.

REITs don't care about growth at any cost, especially not burning money in an effort to grow.

(Looking at GRAB and SEA sideways.)

Having said this, REITs can deal with higher interest rates as long as they are not sky high.

Younger readers might think that the current interest rates are sky high but they are really not that high.

I think interest rates have normalized which isn't a bad thing as money should not be free or almost free anyway.

Cheap money encourages reckless behavior.

More people would benefit from having a greater degree of financial prudence and a higher interest rate is like the cane that stands ready to whack bad actors.

Oh, no, I am rambling again.

Let me wrap this up.

I remind myself to stay grounded.

Higher interest rate is a good tailwind for our local lenders which is good for me.

Slowing interest rate hike is good news for REITs which is good for me.

Interest rate is not being reduced but remains high which is a reminder to stay financially prudent.

Higher interest rate is good for savers and if we are prudent, we are saving money which means higher interest income (which is good for me.)

Yes, the current environment rewards the financially prudent better than before.

It isn't all doom and gloom.

I recently produced a YouTube video on this:

Now, I will try to learn from Mr. Market a bit. 

If I try looking forward, if the Fed should stop increasing interest rate after another one or two hikes of 0.25%, I think we could see yields fall.

This is because Mr. Market might rush in to secure the highest possible yield and with greater demand, bond prices go up and yield goes down.

In such an instance, I might resume voluntary contributions to my CPF account which pays an average of 3% p.a. in my case.

This month's Singapore Savings Bond's 10 year average yield is 2.9% p.a. which is a no go for me.

Wondering why this blog sounds a bit off?

It is because I had a nightmare, woke up very early and couldn't get back to sleep.

Still sleepy but I have to go to the hospital later for a check up.

OK, enough talking to myself.

Have a good day!

Recently published:
Have $10K? Invest or save?

Reference:
Largest investments updated.

Have $10K? What to do? Invest or save?

I blog about the importance of having an emergency fund from time to time.

More importantly, we should have an adequate emergency fund.

However, there is another fund that I don't blog about as often.

The last time I blogged about it could have been many years ago.

So, unless you have been following my blogs for many years, you might not have heard of it.

I called it "convenience cash."

I like to keep cash at home which is able to cover around two months worth of routine expenses.

This is because in case I am unable to withdraw cash from my bank accounts for an extended period of time for some reason, I have some cash on hand.

Of course, things have changed a lot in the last 10 years and, especially in the last 2, so many things have gone digital.

So, is there still a need to keep so much "convenience cash?"

Now, I suppose I have to say I still do it really because I am mental.

Anyway, the amount of "convenience cash" I have at home, without me knowing, has grown to be quite a sizeable amount.

See my "convenience cash" in 2014:

Convenience cash.
 

I don't like going to the banks, if I can help it.

So, all the birthday and CNY red packets I received from family members and also money people paid me whenever I helped them buy stuff just got stashed in a drawer.

Today, I opened that said drawer to "deposit" my CNY red packets and I just thought of taking a tally.

OMG!

I have more than $10K in cash stashed away.

With interest rates so high now, I could possibly get $400 in interest payment if I were to place the money in a 1 year fixed deposit which pays 4% p.a.

$400 can sustain my lifestyle for a week easily!

I know OCBC is offering 4.08% p.a. for 8 months FD but they need a minimum of $20K placement.

Not enough.

CIMB only needs a minimum of $10K for their FD promotion.

So, I checked CIMB for the latest rates, being the first day of a new month.

OMG!

CIMB's promo rates have reduced drastically!

6 months FD now pays 3.7% p.a. instead of 4% p.a.

12 months FD now pays 3.5% p.a. instead of 4.2% p.a.

Sadness.

How like that?

What is a retiree like me to do?

I decided to "tikam" 6 months T-bill instead.

Hope to get a cut-off yield of at least 3.9% p.a.

Will try $5K for the T-bill closing today and another $5K for the T-bill closing on the 15th.

If you are new to my blog and wondering if you should do the same, please take note that I am doing this because I already have a significant exposure to equities.

Don't anyhow follow social media influencers.

(Hint, hint, nudge, nudge, wink, wink.)

See:

My largest investments (4Q 2022.)

I have always said that having a meaningful exposure to fixed income is a good idea because it reduces risk and volatility in our portfolio.

However, fixed income paid relatively poorly until recently.

Fortunately, in Singapore, we have the CPF which, to me, is akin to fixed income and it offers reasonably attractive interest rates. 

So, the CPF was my preferred tool to maintain a meaningful exposure to bonds until recently.

This year is the first year I am not making voluntary contributions to my CPF account.

Money went to Singapore Savings Bonds in 4Q 2022 as they pay better than the CPF and do the same thing the CPF does for me.

See:

SSB or CPF? No brainer?

Oh dear, I am beginning to ramble.

This is supposed to be a quick blog about my money counting adventure at home and what I plan to do with the money.

Yes, AK is an adventurer and not only in Neverwinter and Teyvat!

Anyway, I should stop.

If you want to know what I think we should do before we start investing our money, I have many related blogs on the matter.

You might want to start with this blog:

Graduating soon? First steps.

If you are more advanced, read these blogs:

Investing peace of mind.

Buy bonds but which ones?

Gambatte!

My latest YouTube video on CPF:

Lawrence Wong says CPF not enough? Work till we die?

Just a quick blog to share my latest YouTube video.

All my YouTube videos are between 1 minute to 3 minutes in length.

I try to keep the videos succinct.

Modern day society is always in a rush and short of time.

Also, many people are short of sleep.

So, it is a blessing that my YouTube videos do not require watching.

They only require listening.

You can close your eyes if they feel tired and just listen to my videos which are narrated by a British lady with a pleasant voice.

Very soothing.

There is literally no "AK talking to himself" in my YouTube channel!

Win already lor!

Have a good week!

Recently published:
My CPF account hacked?

All my YouTube videos: HERE.
To get free notifications, hit "Subscribe" in YouTube video.

My CPF account hacked? Money missing!

On 5 Jan 23, in what has become an annual activity, I shared my CPF numbers here in ASSI.

After topping up the CPF-MA, this was the picture:

As I grow older, I sleep less.

I wake up earlier and earlier in the mornings.

Most of the time, I just follow a routine in the early mornings but sometimes I do things which are not routine.

Checking my CPF account is not routine. 

Yes, despite what some people might think, AK is not obsessed with his CPF account.

At least I think I am not obsessed but I am mental.

You know what they say about crazy people?

Crazy people don't know they are crazy.

Ahem.

When I logged into my CPF account today which I do from time to time because it gives me a sense of security which helps my mental condition, I got an anxiety attack!

No peace of mind?

Why like that?

This was what I saw:

OMG!

Where did my CPF money go?

Did my CPF account get hacked?

Alamak!

Cham liao lah!

Quick, call CPF Board but they not open yet.

Too early in the day.

How like that?

Make police report first?

Then, through the morning mind fog, I recalled what happened.

Sigh.

I used CPF-OA money to apply for the 1 year T-bill.

Crazy AK, seven early eight early, scaring himself like that.

Nothing to see here.

Move along now.

Have a good Sunday!

Recently published:
No T-bills in Feb. AA REIT video.

References:

1. CPF-OA in T-bill.

2. $1.1 million in CPF.

No T-bills next month. New AA REIT video.

I shared in my last blog that my plan was to keep buying 6 months T-bills every month with cash on hand till April this year.

Why April?

That's when the T-bills I bought in October last year mature.

Then, I would just recycle money from each maturing T-bill into new ones.

Another perpetual passive income generator for me or so I thought?

Well, there is a change of plan.

Yes, it seems like the plan to buy T-bills in February has been sunk.

How come like that?

To put it simply, I have run out of money.

Yes, doesn't sound too auspicious to say something like this during Chinese New Year but it is the truth.

In my most recent blog, I shared the promotion code for DBS 5 months 3.9% p.a. fixed deposit.

Minimum $20K deposit.

The promotion code just popped when I logged into the DBS phone app.

As an earlier promotion expired very quickly before, I was very fast to share the latest promotion code.

I hope it works for everyone.

I took advantage of the promotion too, of course.

That promotion got me curious and I decided to check UOB and OCBC for fixed deposit promotions too.

OMG!

OCBC is offering 4.08% p.a. for an 8 months fixed deposit!

Minimum $20K deposit.

This is only for OCBC 360 account holders.

What to do?

I couldn't resist it.

With this latest fixed deposit placement, I don't have much cash on hand left.

So, no T-bills next month in February for me.

This is probably not a bad thing as the yield for T-bills has been on the decline.

To be fair, 3.87% p.a. for a one year T-bill isn't terrible if we are using CPF-OA money.

However, if we are using cash, fixed deposits with higher interest rates are better options.

I said in my last blog that I was aware that CIMB offers 4% p.a. for a 6 months fixed deposit.

However, I only consider DBS, OCBC and UOB to be as relatively risk free as T-bills.

Having said this, I do have many fixed deposits with CIMB but I am not too comfortable with placing many more.

Just talking to myself, as usual, of course.

Remember, AK is mental.

Huat ah!

Reference:
CPF-OA in T-bill. DBS 3.9% p.a. 5 months FD promo code.
New YouTube video on AA REIT:

CPF-OA in T-bill university. DBS FD Promo Code 3.9% p.a.

Long time regular readers of my blog might remember that I like saying the government is working hard to help partially fund our retirement.

If we want the government to work even harder for us, make sure we hit the prevailing Full Retirement Sum (FRS) in the CPF-SA and also the Basic Healthcare Sum (BHS) in the CPF-MA as soon as possible.

The magic of compounding is even more magical given a larger base and longer time for it to work.

The CPF-SA and CPF-MA enjoy a floor rate of 4% per annum which, even in today's environment of higher interest rates, is still very attractive.

The CPF-OA, of course, has a floor rate of "only" 2.5% p.a. which until a few months ago was also very attractive.

Money in the CPF-OA was also working hard but only not as hard as money in the CPF-SA or CPF-MA.

It is like working for a company that has a chain of stores and being sent to a store which is still profitable but has the least amount of business in the chain.

Alamak.

What is AK saying?

Spouting nonsense again.

Dementia.

Cham liao.

Anyway, I applied for the 1 year T-bill with CPF-OA money last week and I have been feeling apprehensive ever since.

AK is mental, I know.

Finally, the auction results are out.

Cut-off yield is 3.87% p.a.

Source: MAS

This is just a bit lower than the 4% p.a. I had assumed in an earlier blog in my calculations. 

It is very slightly lower than 3.9% p.a. which was what I thought would be good enough as that would be pretty close to 4% p.a. which is the floor rate of the CPF-SA and CPF-MA.

For a principal sum of $200K, the difference between 4% p.a. and 3.87% p.a. in terms of interest earned (or not earned) is $260.

What about twice or thrice that amount like I mentioned in my earlier blog on the subject?

The difference would be $520 and $780, respectively.

I think most would agree that it is not a tragedy. 

A cut-off yield of 3.87% p.a. is not bad especially when we are being paid the "coupon" immediately instead of having to wait 12 months for it.

OK, the feeling of apprehension has evaporated.

I can rest easy again.

So, it seems that a vast majority of my CPF-OA money is leaving home for the first time ever.

Like a proud parent sending off his children to a prestigious overseas university, I know my CPF-OA money will return stronger after spending 1 year in T-bill university.

Next up is a 6 months T-bill with its auction on 2nd February and I will be using cash on hand to make the application.

As long as yield hovers at around the current level, I am going to keep buying T-bills. 

Hopefully, I will have the resources to do so every two weeks.

If things don't go awry, I would like to keep doing this until April when money from the first T-bill I bought in October last year returns.

It would just be recycling returning funds from then on.

I am aware that some banks like CIMB offer 4% per annum interest rate on 6 months fixed deposits.

However, I only think of DBS, OCBC and UOB as being somewhat on par with T-bills in terms of being relatively risk free if we should have $75K or more in deposits. 

Unfortunately, our three local lenders are rather parsimonious.

What to do?

Look out for better fixed deposit promotions from our local lenders!

Currently, DBS has a 3.9% p.a. 5 months fixed deposit promotion for a minimum of $20,000 placed.

Promo code: SR5A.

I just placed mine.

Cepat!

Huat ah!

References:
1. $1.1m in CPF savings.
2. Using CPF-OA for T-bills.
Interesting read:
CPF money is not our money?

F.I.R.E. children, my mom and CNY secret.

I don't know if this qualifies as a Chinese New Year tradition. 

The elders in the extended family would almost always ask the younger ones who are still single when are they getting married?

Those who are married would be smiling smugly until the elders look at them and ask when are they having children? 

Or if they have children, when are they having another one?

It seems that the elders are always stuck in a time warp when getting married means becoming a grown up and having children is a form of filial piety.

Well, specifically, having sons is a form of filial piety.

AK had to suffer such a "tradition" too for many years but not so much in recent years.

How come like that?

Why like that?

I also don't know why or I didn't know why until this year.

For many years now, I have been very thankful that I could peacefully enjoy the yummy pineapple tarts baked by my sister.

Very harmonious which meant eating even more.

Alamak.

Always eat too many pineapple tarts and almond cookies during Chinese New Year.

Anyway, I digress.

So, how did this harmonious situation come about?

What is the secret?

AK found out in this year's Chinese New Year chatter.

Mom: 
Must take care of our health lah. Old already.

Relative:
Ya lah. Cannot suka suka eat this, eat that.

Mom:
Later stay hospital long long like second uncle a few years ago. Did you visit?

Relative:
I visited and you know he asked me if my ah boy was married? When I told him my ah boy wants to stay single, he told me I very good life. Got many stories like that.

Mom:
Aiyoh. Then, the stories I heard must be true lah. When I saw him, he told me he gained a daughter in law but lost a son. Worth or not? Not worth lah.

Relative:
This means you also very good life!

The chat was in Mandarin and, somehow, translated into English, it isn't as punchy but you get the idea.

My dad who was sitting next to me on the sofa, like me, heard everything, and when I looked at him meaningfully, he nodded his head emphatically.

I got to blow my own trumpet then.

That was the best thing this Chinese New Year.

Correction, that was the next best thing. 

The best thing was the tub of pineapple tarts my sister made!

I have many blogs on the topics of financial freedom and passive income. 

I also have quite a number of blogs on children and how we should not think of them as assets.

Assets should generate wealth for us or at least they should have some value (preferably growing) which could be unlocked at a later date.

I don't think children should even be treated as depreciating assets like cars.

Why am I saying this?

Well, there is no guarantee that children will become assets but they are guaranteed to be wealth destructive at least for the first twenty to twenty five years of their lives.

At least this is usually the case in more modern parts of the world which are highly civilized like Singapore.

So, I have suggested before to think of having children as having a hobby.

A hobby brings us joy but does not generate wealth, in theory anyway.

For those who really must think of their children as investments, the best thing to do is probably to think of children as a speculative component of our investment portfolio.

As with all speculative components in investments, we should make sure they are relatively small in size.

So, if children grew up to become passive income generators, it is a bonus.

If they did not, then, it is a component we can afford to write off as we would have sized our speculative positions appropriately.

Our investment portfolio should be robust without having to rely on the speculative components within.

We should not include our children as possible future passive income generators in our plan for F.I.R.E.

As usual, AK is just talking to himself.

If you were eavesdropping, I hope it was good entertainment.

Huat ah!

References:
1. Have children and a comfortable retirement.
2. Children and 钱最重要的!