Retiree regrets selling his flat to help son buy a condo.

Dear AK,

By chance, I got to know some people who are investors and they told me about you. I enjoy reading your blog but I decided to write to you when I read the blog post, How to have children and a comfortable retirement?





I am a 65 year old retiree. I was a school teacher for all my life until I retired. I am a widower and I have a son who is working in the sales line.

I had a HDB 3 room flat but I sold it a few years ago to help my son buy his matrimonial home, a condominium when he said the flat was too small for us to stay together as a family. I now live with my son and his wife.






Apart from what I have in my CPF, I don't have much savings. I don't get any money from my son as he is struggling financially and his wife who is from China is not well educated and cannot speak English well. She says she is not able to find a job but I think it is because she doesn't want to wait at tables or wash dishes.

The times when I talked to my son about selling his car or convincing his wife to find a job were unpleasant. I now avoid talking about money matters with him and I feel his wife is very cold towards me. It does not feel like home. I spend my days outside and only come home to sleep.






I sold my flat and gave the money to my son because I didn't want to stay alone but I regret my decision to sell my flat and to stay with him and his wife.

I want to share a message with all parents that although we should love our children and try to give them the best but, like you said, we should be pragmatic and not deprive ourselves of a comfortable retirement.

I wish someone had told me this earlier but I am not sure if I would have listened.

Sincerely,
Uncle R




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There are quite a few things I can say in response to Uncle R's situation but I shan't rub salt into his wound. Sometimes, we just need a listening ear.

I hope Uncle R will focus on activities that make his golden years meaningful and happy. I hope he will let go of regret and disappointment.

For what it is worth, I suggested that Uncle R read this blog post:
A simple concept to better mental health.





Related post:
I am not suggesting depriving children of necessities. I am suggesting not depriving ourselves of a comfortable retirement! 
- AK in How to have children and a comfortable retirement?

Matthew answers questions on STI ETF (Part 2).

Thank You and Matthew Seah for the help! Appreciate it  I still have a few more questions to ask regarding STI ETFs which would require Matthew's or your help.  

SPDR STI: 

1) Matthew mentioned that "It is wrong to say that they paid $12M when they had $5M in cash. What you see as cash is only a snap shot “at 30 June 2015”. What has been paid out is cash they had previously from dividends collected over the six months prior, less management fees. " Based on this, am i right to say that net income would be a better gauge to determine whether the fund is paying dividends more than it can afford?

2) There is a significant increase in liabilities in 2013 due to purchases awaiting settlements. What purchases did they make? And how did they manage to pay off such a large amount by 2014? 

3) There is a change in source of credit rating in 2015. And the rating as a result improved from B*- to AA-. Did they change the rating source in order to improve their credit rating? Is this a source of concern?

Nikko AM STI:

1) Why is there suddenly an amount due to shareholder in 2015 under payable? 

2) The tracking error provided by nikko am is on a 3year annualised basis while for spdr, it is based on rolling 1year tracking error. Is it fair to compare this 2 tracking error directly? Is it sufficient to just look at the current tracking error in the fact sheet or should i look for past years tracking error of both ETFs? Where can i find past years tracking error of both ETFs? It wasn't in the annual report.

General: 

1) Would my returns be better if i chose to start DCA under a RSP plan when the index is cheaper as compared to when the index is higher?

Thank you and looking forward to your reply! 

From Matthew Seah:

SPDR STI 1) yes
2) The only liabilities the fund has is payables. Payables come mainly in the form of cash due to the brokerage at T+3. Since STI ETF is a cash ETF, they would have sufficient cash before purchasing the STI components.
3) you can review the credit ratings at http://investors.statestreet.com/CustomPage/Index?KeyGenPage=302726

Nikko AM STI ETF
1) Distribution payable is the cumulative dividends, less fees collected to be distributed to shareholders on a semi annual basis.
Are special dividends from any STI components? Is there a change in dividend yield when there is a switch of a STI component?
2) I am not sure where to find tracking error. But you can calculate by yourself.using excel and historical data for STI, SPDR and Nikko AM ETFs. The tracking error is generally very low and is not much of a concern.

General
1)http://singaporeanstocksinvestor.blogspot.sg/2013/08/tea-with-matthew-seah-dollar-cost.html
read the comments as well for the Nikko AM STI ETF simulator
one ETF starts before the great financial crisis, the other starts near the bottom



Related post:
Matthew answers questions on SPDR STI ETF.