How much cash am I holding?

I have been asked this question in various forms by various people over the years.

"How much cash are you holding now?"

However, like how I have always sidestepped questions regarding my net worth and the size of my investment portfolio, I have habitually sidestepped the question.

I have published a blog post in the past to explain why.

See:

My investment philosophy or my investment portfolio?

So, this blog post is going to be the first time since I started blogging in 2009 where I share some specific numbers.

Why the change of heart?

This is because of what someone told me not too long ago.

It would help readers have some kind of yardstick for themselves in their decision making process.

I am always mindful of the fact that all our circumstances are different.

So, there is nothing sacrosanct about what I am about to reveal.

We do what our circumstances allow.

Of course, we could push ourselves to do more and we should but how much to push, that depends on our threshold for pain.

1. War Chest

I have said again and again that is it important to have a war chest.

When opportunity knocks, we want to have the resources to take advantage of the opportunity.

For me, such an opportunity usually takes the form of market pessimism.

Like Buffett said before, be greedy when others are fearful.

It is harder to do well when everyone is feeling optimistic and chasing prices higher.

Then, how much should we have in our war chest?

I get asked this so often.

There really is no magic number or percentage.

It depends on Mr. Market.

When Mr. Market is feeling optimistic, my war chest continues to grow in size.

When Mr. Market feels pessimistic, my war chest could be totally empty.

During the Global Financial Crisis, I emptied my war chest and I have blogged about this before.

What about now?

At the moment, I have about $200K in my war chest.

As I do not have a lavish lifestyle and because my passive income exceeds my expenses, this sum is likely to grow.

The money is stored stored in my T-bill ladder.

See:

So, how to grow our war chest? 

Basically, just spend less than we make, either actively or passively.

Want to grow it faster?

Become a better saver.

2. Emergency Fund

Of course, when we talk about cash on hand, we have to talk about emergency fund.

How much do I have in my emergency fund now?

About $250K.

This amount has stayed the same for a while now.

It gets adjusted upwards from time to time to account for inflation and other changes in life.

An emergency fund is important because if all else fails, we have near money we can rely on.

The last time I made an adjustment to my emergency fund was when I decided that I needed $48,000 a year myself and I should give my parents $48,000 a year too, directly or indirectly.

That's a total of about $100,000 in expenses.

I like to keep an emergency fund that would cover at least 24 months of expenses.

So, I have overcompensated. 

The good thing is that I have a good size safety net and I wouldn't have to tinker with it for many years to come.

See:
Passive income and updating my budget.

At this point, I must say that it is important to build a meaningful emergency fund first before ever investing any money in risk assets which includes stocks and properties.

I made a related video on this topic:

Of course, while building an emergency fund, our war chest would go hungry but only in the meantime.

If you are wondering how large your emergency fund should be, you might want to eavesdrop on AK here:

How large should an emergency fund be?

Where do I store my emergency fund?

In fixed deposits.

This is because fixed deposits pay higher interest and they are easier to break than T-bills.

At the moment, $100K of my emergency fund is in the UOB ONE Account because that is really near money and makes 5% p.a.

Of course, come 1 May, I would have to try and bump this number up to $150K as UOB ONE would be cutting the maximum interest rate to 4% p.a. on the first $150K.

3. Float

What is a float.

Well, it is just money floating in my savings accounts which I can use on a daily basis.

I try to have about $20,000 floating at any one time.

This is not because I need all the money on a daily basis but really because I am just mental.

There is no rational reason for this apart from the fact that I feel safe having at least this much which I can use to pay anyone or for anything while leaving my emergency fund intact.

Any excess money, I should be using to strengthen my T-bill ladder.

However, by now, it is obvious that AK cares more about having peace of mind and feeling comfortable than maximizing returns.

Like I always say, I am fine being approximately right.

What I want to avoid is being absolutely wrong.

My float is currently closer to $50,000 than $20,000.

Bad AK! Bad AK!

4. CPF

I know some will remind me about my CPF savings which is, of course, pretty substantial.

See:
$1.1m in CPF savings.

Most of the money in my CPF account will become cash when I turn 55 in another couple of years.

That would be when my CPF account becomes a savings account because I would be able to withdraw the money whenever I want.

I can see my war chest becoming much larger because of this.

Of course, I could also continue to treat my CPF savings as the bond component of my portfolio which can be used to invest in other risk free and volatility free instruments like T-bills.

Thus, the bond component of my investment portfolio would remain intact.

I will decide what to do when the time comes.

OK, I am feeling a bit breathless now.

Time to stop talking to myself.

So, how much cash am I holding?

If AK can do it, so can you!

Invest in Alibaba or Tesla?

Someone asked me recently would I consider investing in Alibaba or Tesla now that their stock prices are much lower.

Of course, for long time readers of my blog, it is probably easy to guess my answer. 

Singapore has sufficient opportunities for me and investing in Singapore suits my purpose.

I am also at an age where I am less interested in excitement and more interested in stability. 

Yes, AK is a young senior, as coined by PM Lee.

Still, from time to time, the mind forgets the body's age.

So, I bought into Hang Seng Tech ETF a few years ago and I blogged about it too. 

I was quite clear that I was trading the ETF since the ETF did not pay a dividend. 

After a few rounds of trading, my current smallish position is at such a low price that I am OK with holding on to it as a speculative position. 

Of course, by holding on to the ETF, I have an exposure to Alibaba too. 

To be quite honest, if I must choose, I would invest in Alibaba and not Tesla.

From a valuation perspective, well, conventional valuation perspective, Alibaba is fairly valued and some might even say it is undervalued.

It is pretty easy to make a case to invest in Alibaba now if not for policy risk in China.

As for Tesla, I blogged about it before a year ago when its stock price plunged 10% to $163 per share in a day.

At the time, Tesla was trading at a PE ratio of some 45x even after the price plunge.

To me, it wasn't mouth watering but it was eye watering.

I said back then that if Tesla was the growth company people said it was, then, perhaps a 45x PE ratio was acceptable.

However, at a PE ratio of 45x, Tesla would have to grow its earnings at 45% a year to have a PEG ratio of 1x which would make it fairly valued.

To be fair, looking at industry peers, a PEG ratio of 1.5x might be more reasonable which meant that Tesla should grow at 30% a year to make a PE ratio of 45x acceptable.

Was Tesla growing its earnings at 30% a year? No.

At the time, I said a more reasonable price for the stock would be around $80 a share.

With its stock price at $147 now which is much lower than where it was a year ago, Mr Market could be slowly waking up to the reality.

Alibaba might have to face policy risk but Tesla has personality risk amongst many other risks.

Personality risk?

The erratic and hubristic Elon Musk.

I remember someone asking him about BYD a few years ago in an interview and if he was concerned with the competition.

Elon sniggered and said, "Have you seen their cars?"

Well, see who is laughing now?

If AK can laugh to himself, so can you.

Related post:
Tesla's results and valuation.

Socks or stocks, buy when they are marked down. Food too.

I used to blog about my meals in the early days of blogging.

Haven't been doing it for many years.

Anyway, I love fish fingers.

Specifically, Captain Birds Eye fish fingers.

I would buy the jumbo pack of 30 fingers whenever they are marked down.

Recently, I bought 2 packs as they were going for less than $17 a pack at NTUC Fairprice.

I have shared photos of how I would eat fish fingers in the community tab of my YouTube channel before and I thought I would share some photos here in my blog this time.

Most people would fry fish fingers but I bake them.

I would put them in a glass dish and put them in a microwave oven at 800 watts for 3 to 4 minutes.

Then, I would drench them in extra virgin olive oil (EVOO) and rice vinegar or apple cider vinegar.

This is followed by a powdering of ground cumin seeds, ginger, black pepper and turmeric.

These have various health benefits, especially for older folks.

This is what it looks like:

After consuming the fish fingers, instead of washing the glass dish right away, I would crack an egg and scramble it in the dish.

This is not to waste residual EVOO and the rest of the good stuff.

Microwave at 450 watts for 90 seconds and voila:

I usually enjoy some baked almonds with 80% to 90% dark chocolate as a dessert.

It might be an apple or an orange too.

That's one meal down.

I am enjoying my retirement and keeping things simple makes it even more enjoyable, especially when I am able to buy my favorite food when they are marked down in prices.

If AK can do it, so can you!

What happened to $384 in 2015?

Almost 9 years ago, I blogged about how I saved $384 on solar powered lights for my planter.

Then, quite unexpectedly, someone asked me on YouTube how were those lights doing?

Well, they are still working!

I took a photo of them last night and here it is:

I used to blog about saving money very frequently back in those days.

These days, I am taking it easy.

I am less tight fisted with money now.

However, this does not mean that I am frivolous with money.

I would still wonder if something is worth buying, if it is value for money?

Hard to unlearn some things.

However, if it isn't an amount that would break the piggy bank, like a few dollars, I would just close an eye.

Anyway, if you are new to my blog, this was the blog post back in 2015:
Saving $384 on solar powered lights is $384 earned!

I remember reading an article about Jim Rogers persuading his wife not to buy a new sofa in his younger days and to invest the money instead.

They later bought a new sofa with money made from the money they didn't spend on a new sofa earlier.

Interesting!

If AK can do it, so can you!

Some stocks do nothing for us!

I shared a photo of one my favorite ships in World of Warships in a video yesterday. 

Bismark is a ship I enjoy a lot and I have had many hours of fun playing it. 

There are some ships I have which are really beautiful to look at. 

Unfortunately, that is the only thing I find them good for. 

They are not fun to play, for various reasons. :( 

It is just like investing in stocks. 

Some stocks, we might think they are undervalued and good to invest in. 

However, they do nothing for us in terms of dividends. 

They don't even give us peace of mind. 

One starting with the letter "T" comes to mind. 

Bad AK! Bad AK! ;p 

The names of the "only nice to look at" ships below, for those who are wondering: 

Cherbourg, a French cruiser.

Gneisenau, a German battleship.

Loyang, a Chinese destroyer.

Try World of Warships on the Asian server. 

I am having a lot of fun and have not spent a single cent. Use my referral link and both of us will get some freebies in game. https://wows.asia/steam/Uther_Kaze 

We can both F.I.R.E. at some enemy warships!

Videos on DBS, OCBC and UOB.

I have been somewhat busy in real life lately.

So, I have not been producing much content.

However, I did manage to make a few videos recently.

For those who do not follow me on YouTube, here they are:

------ ------ ------ ------ Just AK talking to himself, of course. ;) 

To view all my videos and also to subscribe, visit: AK71SG 

1Q 2024 passive income: Wilmar, REITs and banks.

Time flies and it is time for another quarterly update.

Before I start on the update proper, I just want to say a few words about Wilmar International.

I received a few comments from readers on Wilmar and they asked if I had any updates on the business.

Some would like to know whether it is a good time to add to our investment in Wilmar.

Wilmar remains deeply undervalued and my past analyses are still valid.

Value is easy to see but where stock prices would go is much harder.

In terms of valuation, buying Wilmar today is inexpensive.

However, cheap could get cheaper and since I already have a significant investment in Wilmar, I do not feel any urgency to buy more.

I am simply waiting and if the stock price hits $3 a share, I would buy more.

That is an important support level and it is also where insiders typically add to their positions.

Undervalued could stay undervalued for a long time.

So, I like that Wilmar pays meaningful dividends while waiting for value to be unlocked.

Now, I will talk to myself about passive income received in 1Q 2024.

Like I have said before, 1Q and 4Q of the year are always weak in passive income generation as most businesses pay dividends in 2Q and 3Q of the year.

 

1Q 2024 is no exception.

It is even weaker this year because I received lower income from my investments in REITs which is not unexpected.

I did not take part in the rights issue to strengthen the balance sheet of AA REIT.

IREIT Global generated lower income as they their property in Darmstadt is still mostly vacant.

Sabana REIT generated lower income as they retained 10% of distributable income to cover costs of manager internalization. 

Capitaland China Trust generated lower income as China struggles even as the RMB weakens.

1Q 2024 passive income came in at $39,142.25

This is some 5.4% lower than the $41,364.36 received a year ago. 

In terms of absolute dollars, it is a reduction of $2,222.11 or $740.70 per month.

I think I will live. ;p

Before I forget, I should also say that I expect to receive less passive income a year from now, all else being equal, as I sold a significant portion of my investment in Sabana REIT recently.

Since Sabana REIT pays half yearly, my passive income 6 months from now should also be impacted but higher dividends from my investments in DBS, UOB and OCBC should provide a cushion.

Although passive income in 1Q 2024 came in lower, I am still quite comfortable.

I was worried during the pandemic because dividends and interest income reduced and pretty drastically too.

Regular readers know that I have a big emergency fund but if the pandemic lasted much longer, even that could get depleted.

Savers are fortunate that interest rates are higher now which means we are receiving meaningful interest income.

This isn't something I have blogged about before because for most of my blogging years, interest rates were too low to make any meaningful contribution.

These days, I receive interest income of approximately $20,000 a year.

This is not accounted for in my quarterly update.

I thought this is worth a mention because a higher interest rate environment isn't all that bad.

Charlie Munger said before that it takes character to sit on money and do nothing.

There are worse situations to be in.

So, what am I doing as my cash position grows.

I will just wait for the next investment opportunity.

If AK can do it, so can you!

DBS, OCBC and UOB stock prices hitting all time highs!

Stock prices of DBS, OCBC and UOB have been rocketing higher!

How do I feel?

I have mixed feelings, really.

I would like to add to my investments in all three banks but not as their stock prices make new highs.

What am I doing?

Just waiting.

I will simply do nothing and collect dividends.

Filling up my war chest and taking things easy.

Money in my war chest will go to buying more 6 months T-bills in the meantime.

I expect the T-bill cut-off yield tomorrow to be around 3.8% p.a.

This is a pretty decent return for something that is risk free and volatility free.

I don't see any need to take on price risk especially when stock prices are going higher.

Uncle Warren Buffett said before that we should avoid doing this:

"Buying a stock merely because you think it’s going to increase in price."

For my current investment in DBS, OCBC and UOB, my favorite holding period is forever.

Of course, if we are trading, then, we might sell some if we think prices are going back down.

More from dear Uncle Warren Buffett.

"Time is the friend of the wonderful company, the enemy of the mediocre."

"Only buy something you’d be perfectly happy to hold if the market shuts down for ten years."

This, perhaps, explains why I sold some of my investments in the past and increased my investment heavily in DBS, OCBC and UOB in recent years.

If AK can talk to himself, so can you!

Related post:
A simple strategy.

More funds came in as yield hits 3.78% p.a.

The latest 6 months T-bill auction saw a cut-off yield of 3.78% p.a. 

Pretty decent although it dipped slightly from 3.8% p.a. we saw in the auction before this. 

Better than the 3.4% p.a. offer from CIMB for a 6 months fixed deposit. 

So, good enough for me. 

Around 96% of non-competitive applications, total S$2.5 billion, were allotted in the latest auction.

Fortunately, I applied for the T-bill not only with funds that came back from a matured T-bill, I topped up with fresh funds. 

So, I got to strengthen my T-bill ladder nonetheless. 

Money from the partial sale of my investment in Sabana REIT is in. 

The plan is to deploy the funds when there is a pull-back in the stock prices of our local banks. 

I will park the money in upcoming T-bills for the time being. 

Just AK talking to himself, as usual. 

If AK can do it, so can you!

Related post:
Sabana REIT: Internalization pains.

Sabana REIT: Internalization pains.

When Sabana REIT's unit holders voted for the internalization of the REIT's manager, some readers asked me what I thought of it.

For the record, I didn't vote for the internalization.

I sat on the fence.

From past experience with Croesus Retail Trust, I guessed that internalizing the manager would be a costly exercise.

I said as much here in reply to readers' comments.

However, if successfully executed, it would result in significant cost savings and greater alignment of interests.

The exercise was smooth sailing in the case of Croesus Retail Trust although it was pretty costly.

That was partially because the REIT's sponsor suggested the internalization themselves.

It was not a demand made by activist investors.

It was suggested partly to unlock value and to address the persistent underperformance of the Trust's unit price.

Later on, Croesus Retail Trust was sold to an institutional investor at a premium to valuation.

I had mixed feelings about the sale.

I lost a reliable passive income generator but I did enjoy an attractive return.

Whether the internalization of the manager played a part or not in the sale of Croesus Retail Trust to the institutional investor is anyone's guess.

Anyway, looking at Sabana REIT, from what has transpired so far and at the recent EGM, it is obvious to me that we are not seeing another Croesus Retail Trust here.

To me, the entire process in Sabana REIT's instance seems to be far more challenging.

It is going to take way longer and cost way more than expected.

Regular readers know that I increased my investment in Sabana REIT significantly in late 2020 and early 2021 after the lowball offer to buy the REIT was rejected.

Sabana REIT was and still is pretty undervalued.

However, I don't like investing in businesses which keep me guessing.

Peace of mind is priceless.

My investment in Sabana REIT has paid me attractive dividends in the last few years.

However, with so much uncertainty now, I have decided to reduce my investment in the REIT significantly while I am still in the money.

Taking back my capital, I will have a stronger war chest to take advantage of other investment opportunities.

So, with this decision, Sabana REIT is no longer one of my largest investments.

I still retain a legacy position from donkey years ago which is free of cost.

OCBC ups dividend by 5%! $7 billion net profit!

OCBC has declared a dividend of 42 cents per share, up from 40c a year ago.

This represents a 5% increase which makes me happy.

Full year dividend per share is, therefore, 84c.

This is an increase of some 21% from a year ago.

Payout ratio is about 53% of net profit.

The stellar results of 2023 was driven mainly by higher net interest margins across all its markets.

Net profit was in excess of $7 billion, up 27% from a year ago.

I like that OCBC has continued to drive costs lower with a lower cost to income ratio of 38.7%.

For people who are worried about OCBC's exposure to China, I have said before that they anticipated the problems early on like DBS and limited their exposure to the troubled property sector.

Their NPL ratio is at a very manageable 1.0%.

OCBC, like DBS and UOB, is well capitalized and well managed.

Even as net interest margins come under pressure, OCBC is expected to perform relatively well and should continue to pay attractive dividends.

This is especially when the current 53% payout is pretty undemanding.

In terms of valuation, OCBC is similar to UOB in that it trades at 1.1x book value, has a PE ratio of around 8x but it has a more attractive dividend yield of some 6.2%.

The last time I bought more of OCBC's common stock was in the middle of last year at between $12 to $12.30 a share.

In a recent YouTube video I produced, I said that immediate support has moved higher to $12.60 a share.

This has likely moved higher again to $12.90 a share which is where we find the rising 50 days moving average.

As OCBC is already my largest investment, I am in no hurry to add to my position.

If I have yet to initiate a position, I would buy some on a possible pullback in stock price to under $13 a share.

Just to get a foot in the door and not throwing in everything including the kitchen sink.

If AK can do it, so can you!

Investing for income more difficult as CPF SA goes away?

Recently, I blogged about how the CPF SA would vanish once we turn 55 from 2025.

This was, of course, announced during Budget 2024.

Many people have thought of using the CPF SA as one of the ways to generate passive income in retirement.

That is now out the window.

We would be left with the CPF RA which we can choose to top up to the ERS which is going to be 4x the BRS instead of 3x the BRS.

We would still have the OA but that attracts only 2.5% p.a. and not 4.0% p.a.

That 1.5% p.a. difference is a big deal for some people.

Imagine a $200,000 sum would see a difference of $3,000 which could cover a month's worth of expenses for some retirees.

So, how are we going to make up for the shortfall?

For as long as I have been blogging and longer than that, if I were to consider my pre-blogging days, I have said that CPF is a cornerstone in our retirement funding strategy.

However, it should not be the be all and the end all.

We should learn to invest for income in addition to having the CPF as a cornerstone.

Of course, when I say "we", I am referring those of us who are not born with a spoon made of some precious metal in our mouth.

Ahem.

CPF should be the ultimate safety net for most of us in case all else should fail.

I have shared my journey as an investor in all these years of blogging and many have asked me to conduct courses.

Of course, being lazy, I have refused again and again.

However, regular readers know that there is one course I have been promoting year after year.

Yes, Dividend Machines.

Dividend Machines is a course on investing for income and it is conducted yearly by The Fifth Person.

Being the first blogger to promote Dividend Machines so many years ago, I am happy to promote the course again this year.

Learn to invest for income and be less reliant on the CPF to fund our retirement.

Learn to build our own Dividend Machines.

Learn more about Dividend Machines using this link:

DIVIDEND MACHINES 2024.

Value for money.

Or else AK would not promote it.

Dividend Machines will help beginners and seasoned investors alike.

Roar to financial freedom in the Year of the Dragon!

If AK can do it, so can you.

SRS portfolio in 2024. What did I do?

SRS was a topic I used to blog about pretty often.

I have not been blogging about it as much since I have not been making contributions in recent years.

Reason is because I no longer pay income tax.

See:
Income Tax payable?

If we are still paying income tax, contributing to our SRS account makes sense to enjoy some tax relief.

Of course, we want to put our SRS money to work or we would get a very miserable interest rate.

For many years, I used the SRS money to buy plain vanilla endowment policies.

They were savings plan with some insurance thrown in.

In fact, I still have one or two of those with NTUC Income using SRS money.

In recent months, I also used the money to buy T-bills with yields being so much higher than a couple of years ago.

Dividends paid by my investments in stocks using SRS money are used for this purpose.

Yes, I also use SRS money to buy stocks of businesses which I think make good investments for income.

I have blogged about this before and shared what kind of stocks I would buy with SRS money.

Basically, the businesses must be good income generators with strong balance sheets; nothing which is likely to do rights issues.

The very practical reason is because we must have the excess funds in our SRS account to take part in rights issues.

This can be difficult to ensure.

I shared my SRS portfolio of stocks before but that is outdated by now.

See:
Win and win again with SRS.

I had SATS in the portfolio.

Of course, regular readers would know that I sold it shortly after it announced the decision to buy WFS.

SATS just didn't have sufficient resources to do what they suggested.

They had to raise funds from shareholders.

It was something unexpected.

So, I took the opportunity to sell when there was a bounce in the stock price.

In place of SATS, there are ComfortDelgro and OCBC in my SRS investment portfolio now.

This is what the portfolio looks like now:

Based on the purchase prices, it is not difficult to guess that DBS and ST Engineering have been in the portfolio for some time now.

So, like what I did?

Paid less income tax and put the money to work to generate more tax free passive income?

We can certainly win and win again with SRS.

If AK can do it, so can you!

Reference:
How AK used his SRS money?

DBS, T-bill and CPF. Dragon shatters shield!

Hope everybody is having a great start to the Year of the Dragon!

I am enjoying myself.

Maybe, I am enjoying myself a bit too much.

Too much Chinese New Year goodies.

Sore throat!

Ouch!

My investments are mostly doing well and I am contented.

DBS is making me smile a lot more than usual, of course.

The latest 6 months T-bill had a cut-off yield of 3.66% p.a.

My application using $675K of CPF OA money is probably filled since I placed a competitive bid of 3.5% p.a. like I said I would.

This means I would get paid some $2.5K more than what the CPF OA would have paid me.

Anyway, this is the latest from Budget 2024:

1. Members who are 55 years old and older will longer have a CPF SA from 2025.

2. Money in CPF SA will be transferred to the CPF OA once the newly created RA gets filled to the FRS.

So, CPF SA shielding strategy is down the drain.

Remember, back in 2021, I blogged about how it would probably be a matter of time before CPFB did something about the loophole.

It has finally happened.

See:
No more "shielding" of CPF SA."

It was never intended for the CPF to work that way.

It was a loophole that benefitted the financially more able while the financially less able would never be able to exploit it.

The CPF system is meant to help the masses and not the rich.

I have said this often enough and this latest move is further confirmation.

Those who are financially more able would have to find other ways to put excess funds to work.

We should pull our own weight and not rely on the government too much.

I like the idea that help is targeted and people who need it more should have more help.

Well, that's all for now.

If AK can talk to himself, so can you!

Reference:
A river called "CPF" and the horses.

Huat with DBS in Year of the Dragon!

DBS reported stellar full year 2023 results.

Net profit rose 26% to S$10.3 billion.

Return on equity improved from 15% to 18%.

2023 saw a 22% increase in total income largely due to higher net interest margin, fee income and treasury customer sales.

A final dividend of 54c was proposed and this is 6c higher than before.

2023 full year dividend at $1.92.

DBS is also proposing a bonus share issue of 1 share for every 10 shares.

Bonus shares will qualify for dividends from 1Q 2024.

Assuming DPS stays the same, this will boost dividend received by 10% in 2024!

My decision to add to my investment in DBS in November last year was fortuitous.

This makes me happy.

Mr. Market seems to like the news as well as DBS share price has gone up by 2.6% so far today.

Gong Xi Fa Cai!

Wishing all readers a Happy Chinese New Year!

Reference:
Added to position in DBS.

Updated plan as yield plunged on 6 months T-bill!

It could be a sign of things to come.

Cut-off yield in the latest 6 months T-bill auction was 3.54% p.a.

That is a huge decline from 3.7% p.a. seen in the prior auction.

100% of my non-competitive bid was filled.

3.54% p.a. is still decent but it is similar to what I am able to get from 6 months fixed deposits now.

I have a few fixed deposits maturing this month and I will be renewing them at 3.55% p.a. interest rate for a 6 months tenure with CIMB.

I have talked to myself about when to dismantle the T-bill ladder.

The plan is to dismantle the ladder when Mr. Market goes into a depression.

However, if the cut-off yield becomes significantly lower than what I could get from 6 months fixed deposits, then, I could dismantle the ladder too.

Place fixed deposits instead of buying T-bills.

Still laddering but with fixed deposits instead.

As for CPF OA money, I would simply leave the money undeployed if cut-off yield goes under 3.5% p.a. which is where I would place my competitive bids.

This is why I said it makes sense to transfer the funds from CPF IA to CPF OA when I did.

It is for in case I am unsuccessful in getting T-bills at the cut-off yield which is meaningful to me.

Where are things going?

So, it seems that T-bill cut-off yield is trending lower.

This is probably in response to dovish statements from the Fed and also the ECB on possible interest rate cuts this year.

Just have to roll with the punches and adapt.

If AK can roll, so can you!

Recently published:
1. $700K coming back!
2. DBS and CPF miracle!

DBS and CPF miracle! Happiness!

I don't usually blog at night but this is so exciting that I just have to talk to myself.

Yesterday, I talked about my 1 year T-bill which I purchased with CPF OA money maturing.

This was the available balance in my CPF IA then:

I also said that I transferred the funds from CPF IA back to CPF OA upon seeing the money credited at 5pm.

This was my CPF OA balance yesterday:

DBS online portal said it would take up to 3 business days for the transfer to be done.

That would mean losing another month of CPF OA interest if the money went back to the CPF OA in February.

It is what it is, I guess.

However, I decided to check my CPF account just now just to see if a miracle took place.

Well, a miracle did happen!

The money is back in my CPF OA which means I would not lose another month of CPF OA interest!

My faith in DBS bank is restored!

Yes, I know.

AK is so shallow.

Bad AK! Bad AK!

I am so happy now.

Losing an extra month of CPF OA interest is a big deal in this instance because the sum is so big.

We are looking at about $1,400 of interest income.

Huat ah!

If AK can be shallow, so can you!

Reference:
CPF account recovery: Thoughts and plan!