"How to tell if you are rich" by Alexander Green.

I would like to share an article titled "How to tell if you are rich" which was published 4 days after my blog post titled "If we are not rich, don't act rich!"

Although the writer used the USA as a backdrop, providing some numbers to show what households in the top 20%, 10%, 5% and 1% in the USA make and have, the ideas on wealth building are universal.

If we own a car like this, we are rich, aren't we?

Alexander Green is the name of the writer and I like his style!

If our households are amongst the top earners in the country, do we run the risk of being "demonized by those who view hard work and risk-taking as a matter of good genes and good fortune"?

If our households are amongst those with high net worth, do we run the risk of being "frowned upon by redistributionists who resent folks that live beneath their means, save regularly and handle their financial affairs prudently"?

Instead of complaining about how we are not rich when others are, try to be rich!





See if what Alexander wrote sounds familiar:

How do you get rich if you aren’t currently?

The basic formula is pretty simple: 

1. Maximize your income (by upgrading your education or job skills). 

2. Minimize your outgo (by living beneath your means). 

3. Religiously save the difference. 

4. And follow proven investment principles.





Most millionaires – folks with liquid assets of one million dollars or more – are not big spenders. Quite the opposite, in fact.

...the most productive accumulators of wealth spend far less than they can afford...

The wanna-be’s, on the other hand, are merely “aspirational.” ..... Their problem, in essence, is that they’re trying to look rich. This prevents them from ever becoming rich.





I like how Alexander ended his article: "If you want to be rich, you have to stop acting rich… and start living like a real millionaire."

Read complete article by Alexander here:
How to tell if you are rich.

Related posts:
1. If we are not rich, don't act rich!
2. The very first step to becoming richer.
3. Retiring a millionaire is not a dream!

First REIT: DPU of 0.7c.

First REIT issued 30,900,000 new units last November at 95c each to help pay for a couple of acquisitions in Indonesia. An advance distribution of 1.02c was paid for the period 1 Oct to 25 Nov.

The DPU of 0.7c announced is for the period 26 Nov to 31 Dec.

The management expressed confidence that contributions from the two new properties would boost the REIT's net property income in 2013. The full impact would be felt from 1Q 2013 which means that we would be able to tell in the next quarterly report if DPU would see a substantial increase.

When I blogged about the private placement in November, I was concerned that we would see a reduction in DPU, post placement, using the pro forma numbers provided by the management then.

Now, it seems that, apart from the maiden contributions from its two recent acquisitions in Indonesia, the REIT enjoyed higher rental income from its existing properties in Indonesia, Singapore and South Korea as well.

If I were to do a quick back of the envelope calculation using the latest DPU of 0.7c as a guide, I would say we could actually see a quarterly DPU of as much as 1.75c in 2013. This would mean an annual DPU of 7c.

Therefore, my fear of a reduction in DPU due to the dilutive effects of the earlier mentioned private placement has been allayed or so it would seem.

Interest cover ratio: 12x

Gearing level: 27.1%

With the management steadfast in its vision for a S$1 billion portfolio over time, although the REIT's balance sheet is strong, we could see more fund raising in future.

With unit price well above NAV/unit, it has become cheaper for the REIT to raise funds by issuing new units now. So, future private placements or rights issues cannot be ruled out.

See presentation slides: here.

Related post:
First REIT: 30,900,000 new units.