Delaying gratification and getting stuff we want for free.

What does the word "resist" mean?

I have mentioned delaying gratification and the pluses of doing so. Well, you know, here and there.

This is taken from a longer email by a reader:

"My girlfriend saves money so that she can go travelling. I tried suggesting we should save money to invests for passive income but she argues that now if we don't travel now, in the future we wont have time and money after being married and have kids."





Alamak! Domestic squabble alert!

I actually said:

"I don't know how to answer your question regarding your disagreement with your girlfriend. The coldest thing I could say is to find a partner who shares your goals and beliefs. Yikes. You really have to sort this out yourself."


I am terrible, I know.

Bad AK! Bad AK!

I like sharing the story about how Jim Rogers convinced his first wife when they were newly weds not to use her savings to buy a sofa she liked. 

They could still use their old sofa. 

They later got the sofa for "free", using money generated by her savings which he invested. 

Nice!

Wouldn't it be better if we were able to use money generated by our investments to pay for stuff we want (overseas holidays included) instead of using money we had saved from our earned income?





I have also shared my own story about how dividends from my investment in ST Engineering paid for my annual holidays to Japan for a few years in a row. 

I remember telling my dad this when we were on the bus to the airport at the end of a holiday in Osaka. 

He smiled indulgently. I didn't think he believed me then.

Anyway, the sooner we realise the benefit of delaying gratification and the sooner we start investing for a more secure future, the better.





Do you believe me?

Related posts:
1. Two questions which help build wealth.
2. The mystical art of wealth accumulation.
"
Cookie Monster learns a lesson.

Perennial's 3 year 4.65% bond: Good enough to buy?

A fellow blogger compared the 4.65% coupon offered with what we could get if we were to park our money in the Singapore Savings Bond (which is risk free) for 10 years.

Holding the SSB for 10 years would get us a yield of about 2.8% p.a. I have left a comment that, to be accurate, we should compare the coupon with what we could get in the SSB for 3 years.

Of course, the bonds are not strictly comparable since the SSB is really AAA rated as the borrower is the Singapore Government while PREH does not have a rating.

The question, then, is whether the coupon offered by PREH's bond compensates us for the risk we have been asked to assume as money lenders.

Perhaps, it would be better to compare this with another corporate bond. If we were to compare this offer with another corporate bond, we could compare this with the 7 years bond issued by Frasers Centrepoint Limited (FCL) earlier this year.

FCL's bond has a coupon of 3.65%. This offer by PREH is for a much shorter 3 years and has a coupon of 4.65%. If FCL were to shorten the holding period from 7 to 3 years, their coupon would probably have been much lower.

I have received several messages from readers asking if I think this bond by PREH is a good buy. Regular readers know that I won't answer such a question with a "yes" or "no".

I will say that a 4.65% coupon for a much shorter 3 years compared to FCL's 7 year bond which has a lower 3.65% coupon helps to compensate for the risk which I identified in an earlier blog post regarding PREH.

Related post:
1. FCL's 7 year 3.65% bond.
2. PREH: A nibble?
3. Singapore Savings Bond: Good or not?

The public offer will open for subscription at 9am on Tuesday and will close at 9am on Oct 21.