Be a real estate owner the easy way (2).

Two years ago, I blogged about someone telling me that there was a way to own properties with very little money or no money at all. Two months ago, I updated in the comments section of that blog post that he lost quite a bit of money doing it.

Today, I came across a blog post by Gerald Tay in Propwise.sg on "No Money Down" properties. His family is in property development and he shares his views on the claims by "gurus" that people could own properties with no money down at all.

I am recommending the blog post as a must read although it is a little bit of a teaser because there is a Part 2 yet to be published.

"Would you like to discover “Secrets of how to own properties with little or no money down?” or “How to own three properties with just one property?” The “gurus” will have you cough out thousands of dollars just to attend workshops or seminars that teach questionable investment techniques, claim you can own properties with no money down, pepper you with lots of crappy motivational talk, then sell you properties at the end of the workshop saying you must take action now and can soon be millionaires upon graduation."

Read blog post by Gerald Tay in Propwise.sg:
http://www.propwise.sg/no-money-down-properties-legit-scheme-or-scam/

Money is hard to make. We must make it hard to lose.

Related post:
Be a real estate owner the easy way.

Duck 2 Tee 2 T-shirts for US$6.00 each.

I have found another value for money deal. :)

6DollarShirts.com sells high quality, silk screened T-shirts to happy customers all around the globe.

We offer hundreds of pop culture and topical designs on dozens of colors for both guys and girls. We keep overhead and prices low as consumers are looking to stretch their dollar farther.

Despite the global economic downturn, our sales have actually increased. Why? Because US$6.00 for a silk screened t-shirt is very attractive; 10 shirts for US$50.00 is irresistible!




Duck 2 Tee 2.
US$6 for a 100% cotton tee. Designed and printed in the USA.

See:
All Printed Tees $6
Yes, for real. Get 10 Tees for only US$50.00!

No longer dependent on monthly wages. (To be a happy "peasant".)

When I was in primary school, I enjoyed reading Aesop's Fables. 

One I remember is the story of the grasshopper and the ant.





The fable concerns a grasshopper that has spent the warm months singing while the ant (or ants in some versions) worked to store up food for winter. 

When that season arrives, the grasshopper finds itself dying of hunger and begs the ant for food. 

To its reply when asked that it had sung all summer, it is rebuked for its idleness and advised to dance during the winter.

The story has been used to teach the virtues of hard work and the perils of improvidence. 

Some versions state a moral at the end along the lines of "Idleness brings want", "To work today is to eat tomorrow", "Beware of winter before it comes". (Source: Wikipedia).





It is easy to be lulled into a false sense of security when everything seems to be going our way. 

We must always save and make contingency plans for when things go wrong. 

When things go wrong, they often do without much warning.

This is one way I like to approach the topic of savings and investment whenever I get to talk to anyone about the importance of financial planning. 





Unfortunately, there will always be some who say that life is short and they should enjoy it while they can. 

If things go really bad and they have no options left, they could always end their lives. 

Really, I have been given such a response before not by one person but by a few people.





In a recent study, it was found that suicide rates often spike during economic downturns, and recent studies of rates in Greece, Spain and Italy have found similar trends.

Every rise of 1% in unemployment was accompanied by an increase in suicide rate of roughly 1%. (Source: The Business Times, Nov 6, 2012.)

We should all be ants instead of grasshoppers. 

Work and plan for the future.





Related to this, I just found out that I have been labelled a person with a "peasant mentality" when it comes to wealth building. 

A peasant "is a member of a traditional class of farmers, either laborers or owners of small farms... The majority of the people in the Middle Ages were peasants." (Source: Wikipedia)

Unfortunately, I was not born with a silver spoon in my mouth. 

Well, I could have had a silver spoon in my mouth but two generations ago, that spoon went to another branch of the tree. 

So, I am definitely of the masses and I can only do what I can with my limited resources to move upwards.





For me, to move from a time when I was dependent on my monthly wages to meet my living expenses to now when I no longer have to is an achievement. 

It could be a modest one in the eyes of "noblemen" and "aristocrats" but I will be happy enough to own a fully paid apartment, a fully paid car and to be free of all debt.

So, to the people who called me a "peasant", you are probably right in your description. 





I am a "peasant" and will probably remain a peasant but I hope to be a happy "peasant".

Related post:
Wage slaves should be fearful.

Don't be a yield pig, be a hardy pig.

We have heard or read in personal finance matters that we should not be a yield pig. Indeed, promises of very high yields in instruments which we could hardly understand should be looked at with great suspicion.

This does not, however, mean that we simply brush off high yields. After all, certain S-REITs were offering very high yields at the depths of the GFC a few years ago. People who sniffed at them in disdain back then could be sniffing for a different reason now.

We have to be courageous and careful at the same time. What my driving instructor told me years ago just came back to me. In driving, we have to be 胆大心细. So, if we wished to change lanes and we were only 胆大, we might end up in an accident. If we were only 心细, we might never make the change!

We must have the courage to be a contrarian when everyone flees a genuinely rewarding proposition and the courage to say "no" to something which seems too good to be true in the absence of a logical explanation.

This blog post is a reminder to myself as well. Money is hard to make and we have to make it hard to lose.

When I was in the USA, I saw this poster and it has nothing to do with personal finance. The only thing it has in common with this blog post is the word "pig"!

“Be a hardy pig, an income-generating vegetable garden, or an essential and productive tool.”

Anyway, it intrigued me enough to go online and read more about Oxfam. What they are doing is very meaningful and I would encourage you to read more about Oxfam and why "be a pig" at: Oxfam: Working together to end poverty and injustice!

In case you are wondering, no, this is not a paid advertisement. :)

More photos of my U.S. trip here:
Travel Photos and Videos.

REITs: When to buy?

This is taken from the weekend edition of The Business Times:

Simon Rudolph, Franklin Templeton Investments' portfolio manager for global equities: "We invest in REITs when we can buy them with good yields, but most importantly, at a good discount to the NAV. Real estate has to be about total return and not just income."

"When you buy something at 30% premium to NAV, unless there is a reason it is trading at a premium, it can still go back to par."

This is something that I can identify with and it is something I have always talked about in my blog as something to look out for when deciding which S-REITs to invest in.

Off the top of my head, my investments in AIMS AMP Capital Industrial REIT and First REIT appreciated some 40 to 75% in value in the last 3 years. This is on top of annual distribution yields of 13 to 17%. Readers who have walked the walk with me the whole time could possibly verify this.

So, if we believe Simon Rudolph, does it mean that now is not the time to buy into S-REITs? Well, not the best time perhaps but, for some investors, being able to secure an annual yield of >7% is considered very attractive in the current low interest rate environment. Even a 6% yield could be considered attractive.

We could possibly see yield compression to continue in S-REITs as money continues to search for places where it is treated better. Another 10% appreciation in the unit prices of S-REITs cannot be ruled out in 2013.

A few days ago, a reader made a comment regarding Saizen REIT which is still trading at a significant discount to its NAV. This is a REIT that was unloved and ignored for a long time. It was still the case when I decided that it was terribly undervalued and bought into it. What about now?

Well, being a REIT with properties in Japan and its income in JPY, the bug bear is forex risk. The JPY has been on a decline. It has weakened against the S$ by about 10% in the last 12 months. So, this will affect its NAV and distributable income in S$ terms.

Even so, we could be looking at a NAV of 27c/unit and a DPU of 1.134c a year. A unit price of 17c means a 37% discount to NAV and a distribution yield of some 6.67%.

If we were to factor in a worst case scenario of a further 10+% decline in JPY against the S$, we could expect a NAV of 24c/unit and a DPU of 1.01c a year or a 29% discount to NAV and a distribution yield of 5.94%.

It is perhaps worth remembering that Saizen REIT owns freehold properties and that its bank loans are amortising in nature. The relatively lower distribution yield could be acceptable, therefore.

REITs, when to buy? Obviously, there were better times and there could be better times again but is leaving most or all our money in savings accounts which pay almost nothing in interest a better choice when inflation of 4% per annum is set to be the norm? You decide.

Related posts:
1. Saizen REIT: 2H FY2012.
2. REITs: Simply explained?
3. Inflation is not going away.

Tea with AK71: Manbags!

In the weekend edition of The Business Times, guess what is on the front page? It is the "Rise of the manbags and the $2,500 shoes!"

It reports that men are splurging on themselves and they "buy the bigger (Celine) bags and use them as document bags, gym bags..." Wow! I am still using whatever free bags I get.

See: My briefcase.

Prada's men's shoes range from $800 to $1,500. Not atas enough? Why not customise your shoes from a minimum of $2,500 a pair?

Yikes! My shoes usually cost $30 to $60 a pair and I wear them till the soles are worn out which usually takes 2 years or so.

The latest Bain & Company study found that men now account for 41% of the global luxury goods market, up from 35% in 1995, and in a market that is almost 3 times bigger!

I learn something new this weekend...


UP TO 70% DISCOUNT!

Related posts:
Parting with an old friend.

Wilmar: Smart money outflow is reversing?

Anyone investing in Wilmar for the longer term would be encouraged by the counter's weekly chart.

Even as share price continues its basing process which has been going on for months, Chaikin Money Flow (CMF) shows that the outflow of funds has ceased. With bearish pressure dissipated, any positive news could send share price up quite abruptly.

Bollinger bands are also constricting to a point where we could expect a violent movement in share price. So, which way? Up or down? Based on the CMF, dare I hazard a guess? I would guess "up".

This could simply be a rebound if it should happen, a rebound which could see price capped by the declining 50w MA which is currently at $4.00. Immediate resistance is at $3.20.

Related post:
Wilmar: A rebound or something more?