More reasons to invest in DBS, OCBC and UOB.

For readers who prefer reading, this is the transcript of a video I produced yesterday sharing more reasons why I am staying invested in Singapore banks?

During "Evening with AK and friends 2023" which happened last Wednesday on 10 May, I said I was staying invested in Singapore banks and would look to buy more on any significant weakness in their stock prices.

This is because Singapore banks still remain very profitable businesses despite challenges.

In several blogs and videos which I produced, I said that Net Interest Margins for DBS, OCBC and UOB likely peaked in Q1 2023.

Funding cost has finally caught up which will squeeze the said margin.

However, the banks will still benefit from the expanded net interest margin on a full-year basis.

For example, OCBC said in their Q1 2023 report that they expect Net Interest Margin to average 2.2% for the whole year.

This is higher than 1.55% for Q1 2022 last year.

DBS, OCBC and UOB have the ability to reward shareholders with higher dividends and they have also shown a willingness to do so.

As an investor for income, this makes me happy.

With dividend yields of 5% to 6% at a payout ratio of around 50%, Singapore banks provide investors with peace of mind.

Why would I invest in a healthcare REIT that has a distribution yield of less than 4%, especially when I remind myself that it has to distribute all or almost all of its operating income to achieve that?

Even as Singapore banks have demonstrated impressive growth, they have also remained cautious.

It is good to see that they admit they don't know what they don't know.

Loan to deposit ratios for all three banks are pretty low with DBS at 79%, UOB at 83% and OCBC at 79%.

Loan to deposit ratio is used to assess a bank's liquidity position by comparing total loans to total deposits.

Singapore banks will continue to grow their non-interest income, which is never a bad thing, of course.

This is especially when net interest margin growth will plateau.

In this aspect, UOB is likely to show the strongest growth.

This is thanks to their opportunistic acquisition of Citibank's retail business in 4 south east Asian countries.

In fact, UOB saw a 457% year on year growth in non-interest income in Q1 2023.

When we compare this to the 35% growth registered by DBS, we can see why there is good reason to be more bullish about UOB.

Singapore banks are also very well run and very efficient.

Their low cost to income ratio supports this observation.

DBS and OCBC both have ratios of below 40%. DBS at 38.1% while OCBC at 37.1%. UOB has its ratio at 40.9%.

This low cost to income ratio is possible in part due to the pre-emptive move by the banks to digitize early and to do it well.

It has reduced operating cost in no small way.

Singapore banks continue to report high return on equity. 

DBS has a ROE of 18.6%. OCBC has a ROE of 14.9%. UOB has a ROE of 14.7%.

Return on equity is a measure of how well a business uses equity or the money contributed by its shareholders plus its retained profits to produce income.

This is a reason why DBS has always traded at a high premium compared to OCBC and UOB. DBS has always shown that it has a greater ability to produce income.

This would appeal to investors who prefer a stronger growth angle which is probably the case for most institutional investors.

So, are you staying invested in Singapore banks?

If AK can do it, so can you!

I must remind myself of the most important investment idea from "Evening with AK and friends 2023." HERE.

4X your money with MUST! Curious AK takes another look.

For readers who prefer reading to watching videos, this is the transcript of a video I produced recently.

From time to time, I come across videos which claims to 10x your money.

Usually, they are pretty speculative at best, and in most cases, they are simply scams.

However, sometimes, we could get a gem or two.

Although keeping an open mind is a good idea generally, but it is only a good idea if we do not give up our own thinking process at the same time.

We want to stay critical and not outsource the thinking process.

Bloggers, Youtubers and even experts at research houses are as human as you and me.

Anyway, you did not come here to get lectured by AK.

You want to know what is this four-bagger investment?

Don't need to skip to the end of the video because you will know in a few seconds.

I have produced several videos and published a number of blogs on US commercial properties real estate investment trusts.

My view has been to avoid the entire sector as there is too much going on which could sink the ship.

Some might wonder if we could find a gem or two with blood in the streets.

This is all good and well in less treacherous circumstances.

However, what the sector is facing could be a tsunami of blood, and this could turn deadly even for those who are in the streets looking for gems.

In a report from CIMB research house, they said that they have a target price of 55 cents a unit for Manulife US REIT.

That was an eye-popping target price as Manulife US REIT trades at 14 cents a unit now.

If CIMB is right in their projection, then, Manulife US REIT is a four-bagger stock in the making.

Anyone wants to take a chance?

In their latest results, the real estate investment trust reported a lower occupancy of 86%. Businesses which are renewing their leases are downsizing or right-sizing.

Physical occupancy which is a more important measure and a forward indicator of things to come is only at a bit more than 30%.

This means that almost 70% of their buildings are not occupied although they are leased out at the moment.

To me, what is the biggest issue with Manulife US REIT is the gearing ratio of 49.5%.

The manager was growing the real estate investment trust in what I would say was an irresponsibly aggressive way.

Of course, they still got paid their fees.

Now, without borrowing another single dime, that gearing ratio could breach 50% as their assets could see valuations decline.

This is why I keep emphasizing that we want to invest in entities with strong balance sheets. 

This is especially when we have a treacherous mix of weaker economic outlook and much higher interest rates.

Manulife US REIT still has almost 20% of leases expiring by end of next year, with about half of the expiries happening for the rest of this year.

I don't know how CIMB researchers came up with a target price of 55 cents a unit for the real estate investment trust.

I say this because it is most likely that Manulife US REIT would have to do fundraising and with gearing nearly at 50%, the only option is an equity fund raising exercise.

With their current depressed unit price, it would probably have to be a very dilutive private placement plus preferential offer.

So, investors have to be prepared to cough up more money.

This makes a target price of 55 cents simply untenable.

I get the feeling that the manager of the real estate investment trust is looking a Mirae as a lifeboat now. 

And other investors might want to do the same and look for their own lifeboats.

Like I said in my blogs and videos on Eagle Hospitality Trust, insiders can sell for many reasons. 

However, when insiders decide to bail out when things are looking bad, it is probably because things are really in a bad shape.

Of course, we can choose to take a bet that things could turn out well but with so many pieces of the jigsaw puzzle in place, we can tell that the odds are not very good.

Fortune favors the brave as Matt Damon said in his ad.

What about AK?

AK is not brave and has no fortune.

AK talks to himself.

No one cares more about our money than we do.

Don't ask barbers if we need a haircut.

We don't have to make back our money the same way we lost it.

Don't throw good money after the bad.

If AK can talk to himself, so can you!

虎口拔牙.

That one, AK dare not do. 

You dare to do?

Reference:
1. Buying US office REITs in 2023.
2. Fortnight of banking crisis. Lessons.

$1.60 target price for AA REIT. Really? Why so good?

I make investment decisions based on my own analyses.

However, as a retail investor, I am cognizant of the fact that my analyses are usually incomplete.

I have compared the exercise to a game of jigsaw puzzle.

As long as I have the crucial pieces of the jigsaw puzzle in place, I should be able to make a decision.

I have been blogging and making videos about AIMS APAC real estate investment trust.

It has been one of my better investments for income which has also appreciated in value over the years.

Unlike some other investments which gave me worries from time to time, and a few investments even gave me near heart attacks, AIMS APAC REIT has given me peace of mind.

(Before I go on, if your eyes are feeling tired and you would rather listen to AK talking to himself, you can listen to the video which I have embedded below instead.)

When I remember that I have been invested in the real estate investment trust since the Global Financial Crisis, that is a very long track record.

AIMS APAC REIT has paid me consistently, through good times and bad times.

Still, there could be things I don't know about the real estate investment trust.

So, when I chance upon analyses done by experts, I would read them to see if I might find some missing pieces of the jigsaw puzzle.

Even opinion pieces can be interesting.

In a report dated 8 May, DBS research published a higher target price of $1.60 per unit for AIMS APAC REIT.

The target price is quite a bit higher than what AIMS APAC REIT is trading at.

Apparently, the researcher at DBS was surprised that the real estate investment trust delivered a better performance than what they were forecasting.

The very strong positive rental reversions of 18.5% and record high portfolio occupancy of 98% were the reasons given for why the real estate investment trust outperformed the researcher's expectations by as much as 15%.

It doesn't stop there.

DBS research house thinks there could be more upside because of two reasons.

1. Weighted average lease expiry or WALE of 1.4 years for the logistics and warehouse segment is the shortest in AIMS APAC REIT's portfolio.

Usually, we want a longer WALE for stability.

However, as the passing rent of $1.22 per square foot for this segment is below the current market rate of $1.40 to $1.80 per square foot, the shorter WALE is a positive for AIMS APAC REIT.

We can expect the strong rental reversions for logistics facilities to continue.

2. AIMS APAC REIT plans on growing organically through more Asset Enhancement Initiatives and redevelopment opportunities.

I have been blogging about the potential for AIMS APAC REIT to maximize land use of many assets in their portfolio which have underutilized plot ratios.

So, this is not something I didn't already know.

Anyway, the higher target price by DBS took into account not only past performance but also expected future performance.

As for the possible downside, AIMS APAC REIT has a high proportion of loans or around 88% hedged to fixed rate.

They also do not have any refinancing requirement until November 2024 when a $100 million MTN will be due.

Will AIMS APAC REIT trade at $1.60 a unit in the future?

It is definitely possible as it has done so in the past and it could do so again.

However, that's not how I would approach the real estate investment trust as a possible investment.

Why not?

I am mostly an investor for income and I care more about whether I will be receiving regular meaningful income from an investment.

If the market price of that investment should go up, it is a bonus.

If it doesn't go up, as long as it keeps generating income from me and doesn't make me worry, I am happy enough to stay invested.

If AK can do it, so can you!

Recently published:
Most important investment idea?

Reference:
Why AA REIT?

Most important investment idea from "Evening with AK."

Producing my latest video on Singapore banks made me think about questions from a few readers during "Evening with AK and friends 2023."

Although they were different questions, I could thread them together as they had something in common.

This could be the most important investment idea participants could take away with them that evening.

Someone asked me if I already had a very large position in a good investment, would I add more to it or look for other investments?

I said I would rather stick with an investment that was doing well and was likely to continue doing well than to go look for another investment which I was unfamiliar with.

I likened it to having a good wife who took good care of me and cooked for me everyday.

In such a situation, why would I go look for a mistress who might not know how to cook and I might have to cook for her instead?

Why look in far off places for gems when we could find them in our own backyard?

There were members of the audience who asked if they should invest in US REITs and a couple of healthcare REITs listed in Singapore.

I could have answered those questions using the same analogy.

We don't want to diversify just because we think diversifying is a good idea. 

As Peter Lynch once said, we could end up "diworsifying".

We are likely to find it easier to make better decisions and far less likely to make mistakes when we compare a potential investment with a good investment we already have in our portfolio.

See the "wife and mistress" analogy?

Of course, as an investor, we could be polygamous, so to speak.

A member of the audience asked me what should he do with investments suffering paper losses?

He further told me that they were not paying dividends and could end up asking for more money from their investors.

That sounded like a nightmare that's worse than Tesla or Alibaba. It sounded like GRAB.

Sometimes, we must simply bite the bullet, accept that we made a bad decision and get a divorce.

Sometimes, to be fair, it was not a bad decision to begin with but things changed for the worse over time.

A divorce could be costly but it isn't the end of the world.

Pick up the pieces and life goes on.

Then, a member of the audience asked why did I put money in Lion OCBC HS Tech ETF since it did not pay a dividend?

I am quite sure I blogged the reasons why I did it but to thread it with the theme of this blog, I would have some fun now.

Sometimes, although investors are polygamous, we might get bored with having the same partners.

So, we go out looking for fun.

When we go out looking for fun, please remember to keep it that way.

"Milk the cow to drink the milk but don't bring the cow home."

Translated from a Chinese saying.

Don't let something which is supposed to be fun become something "ma fun" which means "troublesome" in Chinese.

I know what some might say.

"It's complicated."

How difficult is it to drink milk outside and not to bring the cow home?

In my opinion, it becomes "complicated" if the cow is brought home.

Before I get carried away, back to the ETF.

So, the ETF was something I bought for trading because its price became too enticing to ignore.

Fortunately, I made money not once, not twice but thrice doing it.

I even said in one of my blogs that it reminded me of why I did so much trading in my younger days.

So, do you see the common thread?

Something to chew on for the weekend, maybe?

Now, a nice way to end this blog is to remind myself why would I want to add to my already significant investments in Singapore banks?

I will remind myself why with my latest YouTube video.

Hope you Like the video. Hint, hint! ;p

If AK can do it, so can you!

Related post:
Hope you enjoyed "Evening with AK."
Recently published:
1. Fixed income update.
2. Why AA REIT?

Fixed income update. 3.78% p.a. 6 months T-bill. SSB?

The latest 6 months T-bill auction gave us a cut-off yield of 3.78% p.a. which was decent enough.

Some crazy kiasu people put in very low competitive bids which drove down the cut-off yield.

This is evident when we look at what the average yield was.

Why would anyone place a bid of below 3.26% p.a. is beyond my comprehension?

Even if we were to place a 6 months fixed deposit with OCBC using CPF OA money, we would get 3.3% p.a.

This is why I say many people are selfish and this is actually worse because it harms themselves and others at the same time with a lower cut-off yield for everybody being the result.

Simply inane.

I am not doing any shameless promotion for OCBC because it is my largest investment but take a look at their promotional interest rates: HERE.

Anyway, by now, we shouldn't be surprised anymore.

I am just happy that the cut-off yield is still much higher than what DBS, OCBC and UOB would offer for 6 months fixed deposit at this point.

This is because I am just rolling money from maturing T-bills into new ones by now.

Yes, my T-bill ladder is complete and it is another source of meaningful passive income for me.

Is this going to continue?

To be sure, I do not have a crystal ball.

However, for various reasons, inflation is likely to be sticky which means interest rates will probably stay higher for longer.

The front end of the yield curve is still elevated even as the Fed has signaled a pause in rate hikes.

I know there is talk of a Fed pivot by end of the year and it could well happen but worrying about whether it will happen or not does nothing to generate income for me.

I would rather make hay while the sun shines.

Anyway, my expectation is for 6 months T-bills to remain relatively rewarding in the near future, taking into consideration that it is risk free and volatility free just like the CPF.

This helps to grow the base of my pyramid which I mentioned again recently during "Evening with AK and friends."

As for Singapore Savings Bond, like I shared last month in a blog, my mission for the year was already accomplished. 

Fortunately, that was the case too as the 10 year average yield has declined significantly in this month's offer.

A much lower 2.81% p.a. 10 year average yield doesn't cut it for me.

Better off just doing voluntary contribution to my CPF account.

Not doing shameless advertising for DBS because it is one of my largest investments but if you have a shorter duration of two years in mind, a 2 year endowment plan offering guaranteed 3.92% p.a. by DBS is a not a bad idea.

I imagine that as doing a top up to my CPF SA which I am not allowed to do anymore.

See:
Update on saving for income.

Reminder to myself.

Why am I doing what I am doing in the fixed income space?

I want to invest in strong businesses to have peace of mind but, even more than that, I want to make sure I have a portfolio which has a stable footing as that really helps to promote peace of mind.

I always say don't do a Chicken Little.

The sky is not falling.

Don't go to extremes and have, say, 90% of our portfolio in T-bills unless we are old retirees nearing the end of our lives.

Of course, I am not saying that my way is how it should be for everybody but this works for me.

We should all have a plan, our own plan.

If AK can do it, so can you!

Recently published:
Why AA REIT?

Related post:
SSB and T-bill in April 2023.

Why AA REIT? Still one of my largest investments.

During "Evening with AK and friends 2023" which took place in the evening of 10 May, I said that I liked a few real estate investment trusts listed in Singapore.

I mentioned a couple of videos I produced on some possible red flags to look out for when investing in real estate investment trusts.

As for real estate investment trusts which I liked, I mentioned AIMS APAC REIT as being one of them.

AIMS APAC REIT is one of my largest investments and this has been the case for many years since the Global Financial Crisis.

I told a long story about the real estate investment trust, and I hope the audience wasn't bored by it. 

Anyway, I shared some of the reasons why I liked AIMS APAC REIT and still like it after so many years. 

George Wang, the person who led the recapitalization exercise together with AMP back in the Global Financial Crisis has a meaningful stake in the real estate investment trust. 

He is the chairman of the management team, and he said the following recently. 

“For a structure to grow tall, its foundations must be strong and sturdy. It is only through the disciplined enhancement and selection of strong foundational assets that we are able to achieve financial resilience and sustainable growth. The quality of our portfolio has underpinned our robust performance throughout the COVID-19 pandemic and this period of rapid interest rate hikes, and I am very pleased to see our FY 2023 DPU increase by 5.1%, following FY2022 DPU increase of 5.7%." 

Leaving aside the numbers which are commendable given the challenges, I really like what he said about foundations being strong and sturdy to grow.

Very down to earth. 

I really like that he did not lead the rescue of the real estate investment trust so many years ago and then left everything to the management team. 

It is evident to me that he is still active in giving directions. 

During "Evening with AK and friends", I said that I liked AIMS APAC REIT because of the way they pursue growth. 

The CEO said this recently. 

"Looking ahead, our markets remain attractive and continue to offer abundant growth opportunities despite market headwinds. We are actively reviewing opportunities within our portfolio to drive organic growth, which includes adding value through active lease management to secure higher contracted rents, to underpin our future earnings." 

The real estate investment trust still has properties with underutilized plot ratios. 

The management has a track record of successfully redeveloping such assets to grow value and income for investors. 

I am always wary of real estate investment trusts which keep buying properties, no matter the quality in order to grow and to collect fees, of course. 

It is like growth at all costs. 

Sometimes, growth can be too costly for us as investors because we are the ones who end up having to pay the price.

We have to be wary of managers who would even suggest buying properties which are only half occupied or properties with very short remaining leases of 15 years or so, for examples. 

The only people who would surely make money from such situations are the managers. 

Investors have to be more discerning on what kinds of deals to support.

Always ask if it makes sense or if we should be parking our money somewhere else?

Bear in mind the following.

Money should go to where it is treated best or even if this place is not the best place, it should be treated better here than in most other places.

Most people are incentivized by fees and there is nothing wrong with this if they made decisions which would benefit everyone. 

However, many people are selfish, and we have seen ample examples in real estate investment trusts listed in Singapore. 

I have many blogs about Sabana, VIVA and ESR, for examples, if you care to read more. 

Anyway, back to AIMS APAC REIT. 

They own a portfolio of 26 industrial properties in Singapore and three in Australia. 

I like their relatively strong balance sheet with aggregate leverage at 36.1% and a blended debt funding cost of 3.4% and a weighted average debt maturity of 3.1 years. 

About 40% of their portfolio is in the Logistics and Warehouse segment. 

This segment has been experiencing double-digit rental growth across the four quarters, with leasing demand largely driven by third party logistics providers. 

In FY2024, 21.4% of leases are due for renewal, of which 90.6% are from the Logistics and Warehouse segment and this presents strong positive rental reversion potential. 

They also completed the conversion of a multi-tenanted lease to a master-lease arrangement for 23 Tai Seng Drive in FY2023. 

Following an asset enhancement initiative or AEI which cost $1.6 million, the property is fully leased to Racks Central, a data center operator, for an average lease term of seven years. 

It also lifted the valuation of the property by 32.0% from $29.4 million to $38.8 million on 31 March 2023. 

I really like their strategy of organic growth to create value. 

The manager is also evaluating several potential asset enhancement initiatives and redevelopment projects. 

Upon completion, these properties are projected to deliver a stabilized net property income yield of between 7.0% to 8.0%. 

AIMS APAC REIT has been and still is one of my largest investments. 

I believe that the real estate investment trust will continue to bring home the bacon. 

Leadership provided by George Wang who has skin in the game, a capable management team, a relatively strong balance sheet and a shareholder friendly strategy to grow value are just a few reasons to like AIMS APAC REIT. 

Whether you should have AIMS APAC REIT in your portfolio depends on what you are looking for. 

Remember that AK has been invested in AIMS APAC REIT for donkey years starting from the time when each unit was only 17 cents before 5 to 1 share consolidation took place a little later. 

You want to ask if there are better investments than REITs now in an environment where money is significantly costlier.

Having said this, well run REITs which offer a reasonably attractive distribution yield will always have a place in any income investor's portfolio. 

If AK can do it, so can you!

P.S. After "Evening with AK and friends 2023" ended, I had a few more thoughts to share. I published a blog in the wee hours of the morning. See:

Hope you enjoyed "Evening with AK and friends."

References:
1. Why AK invests in REITs?
2. How to invest in REITs?
3. AA REIT's media release.

Hope you enjoyed "Evening with AK and friends."

"Evening with AK and friends 2023" was successfully held and I want to put down my thoughts on paper while I still have them. 

I think it was evident at the event that my memory really wasn't very good. 

I feel that it isn't what it used to be. 

Used to be able to remember things easily and rattle off precise numbers too.

Not so anymore.

Hope dementia does not come too early for me.

Crossing fingers.

Here are a few things I want to say.

1. Thank you!

I want to register my heartfelt thanks to my friend, Kenji, for organizing the event.

It would not have happened if he did not offer to organize it because AK was too lazy.

Kenji is always very concerned that I don't go out enough and that I don't socialize enough.

I am blessed to have a handful of good friends like him who I must admit I don't make enough time for.

Don't need many friends.

Only need a few good friends.

2. Thank you again!

I also want to thank the two young men seated in the front row. 

They took on the role of photographers as readers asked for photos with AK.

Thank you plenty plenty.

3. If AK can do it, so can you!

To people who got the little souvenir from AK, I hope it helps you to remember that what AK has achieved is not impossible for regular folks.

If AK can do it, so can you!

4. No photo because I forgot.

I forgot to pass my camera to Kenji to take photos.

So, no photo of the event to share in this blog.

Sadness.

5. Epic chit chat Q&A!

"Evening with AK and friends" has always been an epic chit chat session driven by Q&A.

Hope that I have answered all your questions satisfactorily.

Please bear in mind the following.

For sure, I do not have all the answers and I am as fallible as any other person.

6. Technical Analysis.

Someone asked me about technical analysis.

Here are a few books I would recommend.

See:
Recommended books for FA and TA.

7. Remember the pyramid!

I shared this in many blogs and one was in a blog about Wilmar.

"S" at the tip of the pyramid stands for "speculative" position and we should always keep this small.

See:
Wilmar: Target reacquired.

8. Remember the Rule of 15.

It really shows who were the people swimming naked.

I mentioned Anita Yuen and her husband at the event and it's all in this blog.

See: 
Rule of 15 revisited.

9. Gold is for insurance.

Precious metals are not investments.

Why get them?

See:
Why investors for income buy gold?

10. Totally honest.

Many things I shared at the event, I would never publish here in my blog for various reasons.

I wasn't joking when I asked you not to do any video or audio recording.

Even if what I said or the answers I gave might be jarring at times, I held nothing back and gave my all.

11. REITs handout.

I think there were a few readers who wanted the handout on REITs but didn't get it.

I published the handout in a few blogs before and I found one published in 2022.

If you are interested, you should be able to save it in your phone.

Just a list of pointers and nothing mind blowing.

See: 
How to invest in REITs?

12. Very touched.

According to Kenji, 280 people turned up.

An overwhelming number stayed till the end.

If the PA system didn't tell us that it was time to go, we might have stayed longer.

To all who came, thank you for showing me that talking to myself for more than 10 years has been helpful not only to myself.

I hope you found that the evening with AK was time well spent.

Until the next time, remember not too be overly optimistic nor pessimistic.

Always stay pragmatic.

Nobody cares more about our money than we do.

Don't ask barbers if we need a haircut!

If AK can do it, so can you!

OCBC reports stellar Q1 2023 results! +1

Well, two big things happening today.

One bigger than the other.

The bigger one is OCBC reporting Q1 2023 results.

I just produced a video for this.

For readers who are not subscribed to my YouTube channel, here is the video.

Fantastic response from OCBC after getting downgraded by both JP Morgan and CIMB.

I also produced videos for these.

The smaller thing happening today is "Evening with AK and friends."

To everyone who has bought tickets, remember to have an early dinner.

If no time for early dinner, at least bring a snack like a Gardenia bun or Old Chang Kee curry puff which you can eat outside the lecture hall during breaks.

Why must be Gardenia or Old Chang Kee brands of snacks?

No other food allowed?

You know, I know.

If you still don't know, ask me this evening.

Anyway, I will try to remember to have a 10 mins break after every 50 mins of talking.

So, you can go to the washroom or have a snack.

Come prepared with questions and we will have an epic chit chat session as always.

Hard to believe but it has been almost 5 years since the last time we did this.

See:
Financial freedom and a long break from public appearances.

See you this evening!

Gainfully unemployed! Government is disgusted! SMLJ! Evening with AK and friends 2023 update.

A quick update on "Evening with AK and friends 2023" before I start the blog proper.

Don't worry, it is not being postponed or cancelled.

The event will still be taking place in the evening of 10 May as promised.

In case there are readers who decided to wait closer to the date before purchasing a ticket, there are about 30 tickets left.

To everyone coming to the event, see you on 10 May!

Ticketing link in this blog:

Evening with AK and friends 2023.

-------

Recent headline in The Straits Times.

"Jobs will soon become a national security issue! Automation and AI will pose the biggest risk to the most sought after jobs for youth."

I so stunned like vegetable!

How like that?

More people to become displaced and jobless?

Regular reader are probably familiar with a phrase I use in my blogs rather often.

"Gainfully employed."

This phrase refers to productive members of society.

They are employed and they are rewarded with financial gains.

Then, what is the word I use for myself?

"Unemployed."

This is probably the correct description of AK to most people which is also why they are usually dumbfounded at least for a while before they make some polite noises.

On my part, I also like this phrase to describe myself because of its economy since I am too lazy to provide any explanation to anyone who might be curious enough to probe further.

Of course, our government knows the truth about AK.

"Unemployed" refers to someone who is actively looking for employment but has been unsuccessful.

AK isn't looking for employment and has not been looking for employment for almost 8 years now.

So, the government has a phrase for people like AK.

"Economically inactive."

If we are somewhat sensitive to the choice of words, we might feel that there is a little bit of negative undertone in the word "inactive."

It is like the word "lazy" but just a little better. 

"Economically lazy?"

To be honest, I rather like that.

Recently, I have been thinking of telling people that I am "gainfully unemployed."

If you think there is a perverse streak in me, you are probably correct.

Telling people I am "gainfully unemployed" should confuse some people, especially those who have been institutionalized by the hamster wheel that is employment.

"You unemployed?"

"What you gain?"

"You crazy or what?"

OK, can I choose not to answer that question?

I mean, being an IMH patient, there is a very easy way to answer that question, after all.

In my more lucid moments, I might deign to give a socially acceptable answer which might go like this.

"By being unemployed, I gain a lot of free time and the freedom to do whatever I want, answering to nobody but myself."

Wow!

Applause please.

That sounds very learned, if I do say so myself.

OK, end of blog.

Oh, you didn't know what SMLJ in the blog title stands for?

SMLJ = Stupidly Motley Local Jokes.

Oh, you thought you knew what SMLJ stood for but now you are confused?

What?

Your friend from China told you something else?

SMLJ = shen me la jiao?

Wow, chili so hot!

Alamak!

Don't be confused about this!

If AK can do it, so can you!

Government is disgusted with AK:
Income tax payable in 2019.

Related post:
Stop saying I am a "retiree."

Recently published:
Passive income as much as earned income.

Reminder to myself:
1. Recession could hit Singapore!
2. DBS, OCBC & UOB: Tailwind +1!

Passive income as much as earned income? Get rich slow!

This is the transcript of another video I produced recently.

Again, this is for the benefit of people who do not follow me on YouTube or prefer reading to listening.

When I started work in my mid 20s as a young graduate, my pay was $3000 a month. 

In my 30s, my pay was around $5000 a month. 

Now, if your question is whether someone who makes the median salary in Singapore can retire early, you just have to look at me. 

Apparently, the median salary of people from age 30 to 54 in Singapore is between $5000 to almost $6000 per month, according to the Ministry of Manpower. 

Then, there is CPF contribution by employers which is not included in this figure. 

If that is included, then, monthly income is actually higher. 

Putting aside the topic of CPF which is another topic I blog extensively about, is it possible to do anything with a salary of $5000 to $6000 a month over 25 years to ensure retirement funding adequacy? 

I have many blogs on how average income workers can become rich. 

Why do many average income workers find becoming rich impossible? 

Do you believe me if I were to say it is not because they make an average income? 

The truth is many of them find this impossible because they can afford so many things in life and would buy them once they can afford to. 

This is why they cannot afford to stop working. 

Spend all the money we make and we will always be poor. 

Borrow money to fund our lifestyle, we will be poorer than poor. 

Then, for average income workers, how to become rich? 

Take for example making $5000 a month and taking home $4000 after CPF deduction. 

Do you believe me that at some point in time we could actually be saving all that $4000 every month? 

This is even if our take home pay did not increase in the future. 

Start by religiously saving 50% of our take home pay. 

That would be $2000 every month. 

If we were to invest for income and if we were to get an average of 5% dividend yield per year, we should be paid approximately $1200 in dividends in the first year. 

That is like paying ourselves a bonus of $1200! 

Imagine reinvesting the dividend in addition to $2000 a month from our take home pay, it would be like saving $2100 each month instead of only $2000. 

At some point, we would be saving and investing $4000 each month.

All this because we started saving $2000 each month and investing for income. 

Like in Economics class, this example is unrealistic because we have to hold everything else constant. 

However, like in Economics class, this little exercise demonstrates how it is possible to create sufficient passive income to replace our earned income. 

The strategy needs discipline and patience to see results. 

"Someone is sitting in the shade today because someone planted a tree a long time ago." 

- Warren Buffett 

All of us have to work with what we have been given although there should be no stopping us from trying to change our circumstances for the better if we want to, unless we are severely disadvantaged. 

I actually believe that we would have a hard time finding people who save half of their take home pay consistently for even a few years. 

However, take this as an inspiration. 

If AK can do it, so can you!

Related post:

Don't depend on wages!