One more step in organizing my personal finances. I closed my UOB savings account and consolidated it with my UOB One Account to earn higher interest rates.
Why did i open up the savings account in the first place?
(1) I have the concept of 'paying myself first'. Instead of the formula. 'Income - Expenses = Savings', i try to adhere to the formula of 'Income - Savings = Expenses'. Having that separate account allowed me to transfer money from 1 bank account to the savings, so that i wouldn't touch it.
(2) I'm also quite compartmentalized. So if i designate 1 account for savings/investments, it feels much more neater to me from an accounting perspective. Dividends from investments goes into that account, and EPS to the various brokerage accounts i have are also directed into it.
Why did i have it closed now?
(1) I don't really need it now. All i actually needed was a way to keep and budget the money away, even if it's in a single bank account. As you may know, i use YNAB, and YNAB allowed me to budget my savings/investment money (as well as other expenses categories) so i wouldn't accidentally used it.
(2) The savings account i have generates next to nothing in terms of interest. By consolidating the money into a higher yielding bank account, the money is 'working' harder in generating extra returns.
It really is quite troublesome, changing bank accounts. Sending hard copy forms for the closure and linkage forms for, and changing bank account for the CDP direct crediting services.
I went through the process once for changing GIRO for my recurring bills, and thankfully, this process is much easier and less troublesome.
Happy to take one more baby steps to organizing my finances. Organised my credit card to get more rebates, and now bank accounts for higher interest.
More steps to come!
If you have any ideas, please do share with me :)
Saturday, January 30, 2016
Saturday, January 23, 2016
Save more for a rainy day
Had a lot of uncertainty as my company was finalizing the corporate strategy over the last few months, and it was finalized a few days back.
The result? A retrenchment exercise a few days earlier. It's my first experience of seeing colleagues just disappearing from office. A call from a conference room, a chat with the line manager and HR, and off you go. Sounds cold and harsh but that's the way it is. Office appears colder and quieter in the aftermath.
Supposedly the package offered is reasonable. Not very sure, as the 'chopped' workers did not return to their desk to speak with us after the conversation with HR.
Had a couple of thoughts going through that day.
(1) Wonder how those foreigners on employment pass cope - without a job, they need to leave the country in a month's time.
(2) Grateful that I wasn't on the redundant list
(3) If i was made redundant, how long would i need to get another job in these economic climate?
Guess it was at thought (3) that it really strikes home that you really need to have a buffer of emergency cash in case an unfortunate incident happens (even though there's a redundancy package). Also, multiple source of income is crucial. We should not be overly reliant on 1 source of income, or an employer, and having adequate reserves is most important.
Ultimately, my wealth is my business. No one cares about my personal finances more than myself.
The result? A retrenchment exercise a few days earlier. It's my first experience of seeing colleagues just disappearing from office. A call from a conference room, a chat with the line manager and HR, and off you go. Sounds cold and harsh but that's the way it is. Office appears colder and quieter in the aftermath.
Supposedly the package offered is reasonable. Not very sure, as the 'chopped' workers did not return to their desk to speak with us after the conversation with HR.
Had a couple of thoughts going through that day.
(1) Wonder how those foreigners on employment pass cope - without a job, they need to leave the country in a month's time.
(2) Grateful that I wasn't on the redundant list
(3) If i was made redundant, how long would i need to get another job in these economic climate?
Guess it was at thought (3) that it really strikes home that you really need to have a buffer of emergency cash in case an unfortunate incident happens (even though there's a redundancy package). Also, multiple source of income is crucial. We should not be overly reliant on 1 source of income, or an employer, and having adequate reserves is most important.
Ultimately, my wealth is my business. No one cares about my personal finances more than myself.
Sunday, January 17, 2016
Who let the bears out?
With the market tumbling at the start of 2016, it is well within possibility that we are entering the bear phase of the market. While the bulls take a long time incoming, bears appearance tend to be swift and decisive. Within half a year, the market has dropped by around 800 points from 2015 to now.
Feelings:
This is my second bear, if i recall correctly. The first time was around 2008 (that was when i worked for just a couple of years maybe), and the STI dropped to 1800 levels. My portfolio went down quite a bit in terms of %, but then given that my base was probably low then, the quantum impact wasn't that much. I continued to DCA in then, and reaped the benefits a couple of years later.
Now my portfolio base is slightly higher, and the loss is definitely larger. While i believe that market goes in cycles, and what goes down must come up (and vice versa), I do have 2 defined set of feelings:
(1) I think one cannot help but feel a bit nervous looking at your networth disappearing day by day.
(2) A bit of regret that if i held on to my warchest a bit longer and went in at a later date, i would have been a much better investor.
However, that is speaking with the benefit of hindsight which is always 20/20. Even though i feel nervous looking at my portfolio, i am comforted with my portfolio mix, which is heavily weighted with the STI ETF. When the market recovers (which it definitely will eventually), the STI ETF will recover along with it. The rest of my portfolio of individual companies may or may not bear out, but so far, i am pretty comfortable with the fundamentals.
Game plan:
With prices at a low, the challenge for me is to obtain more funds to invest in the market. My mistake was being too greedy when the market dropped significantly the first time. I went in too much at the initial drop and didn't leave enough warchest at the subsequent drops. I did not anticipate that the market would drop like it did.
The next time it did, i would develop a better plan, and go in at a pre-determined % tranche of my warchest. The only thing i can do is to DCA in with my monthly salary now.
Stay calm, invest on and reap the benefits eventually.
Friday, January 8, 2016
Passive Income Review 2015
Finally received all the information i needed to do a review of the passive income for 2015.
Currently i have 3 streams of income, and hopefully i can eventually grow it to a stage where it can support my daily expenses. Currently the target is $4,000, a figure which i derived from my average expenditures tracked in 2015.
See Expenses Review 2015
(1) Options Strategy
This is a bad year for my options-strategy due primarily to the huge market fluctuation in July/August 2015. 1 bad trade nearly wiped off my whole year's profit. In actual fact though, i would not have suffered such a hit if i have done set a cut-loss when the swing is more than 10%. However, i did not expect the swing to be of such magnitude, and i closed off the position at a huge loss. To be honest, i think i panicked a little with this options trade. The lesson learn would be for me to have better risk management.
Even though the money i put in here for options trading is my 'play money', i still do feel heart pain to the loss suffered. I think the concept of loss aversion is very true here. I hope to do better utilizing options for passive income in 2016. Compared to 2014's passive income, 2015 is a disaster.
(2) Dividends
Dividend income for 2015 almost doubled from 2014 as the market tumbled a little in the later part of 2015. I took the opportunity to load up a little on STI ETF. That contributed to the increase in dividends from 2nd half 2015 onwards. In 2015, i'm looking forward to a full year's contribution from dividend income from those new positions entered, and hopefully as more funds come in, i can take advantage of the further weakening of equities prices in 2015.
On a whole, while dividends doubled, the total amount is still quite minuscule, just 2.1k for the whole year. Definitely need to build this up.
(3) Rental
Slight improvement from last year. Although this is relatively stable. The major contribution to the improvement comes mainly from the strengthening of USD over SGD. For a same amount of USD rental income, i get more SGD (not that i actually FX it back to SGD for me to use)
What i did with the income is using the income generated from this rental to add to the investment monies i hold with my wife. Hopefully, it can grow again to a substantial amount.
Summary:
Total passive income for 2015 is $7,008, which works out to be $584 per month. A far cry from the target of $4,000.
I guess that's why i need this blog - to serve as a tracker and to motivate myself to keep up the journey to work towards financial independence.
Currently i have 3 streams of income, and hopefully i can eventually grow it to a stage where it can support my daily expenses. Currently the target is $4,000, a figure which i derived from my average expenditures tracked in 2015.
See Expenses Review 2015
(1) Options Strategy
This is a bad year for my options-strategy due primarily to the huge market fluctuation in July/August 2015. 1 bad trade nearly wiped off my whole year's profit. In actual fact though, i would not have suffered such a hit if i have done set a cut-loss when the swing is more than 10%. However, i did not expect the swing to be of such magnitude, and i closed off the position at a huge loss. To be honest, i think i panicked a little with this options trade. The lesson learn would be for me to have better risk management.
Even though the money i put in here for options trading is my 'play money', i still do feel heart pain to the loss suffered. I think the concept of loss aversion is very true here. I hope to do better utilizing options for passive income in 2016. Compared to 2014's passive income, 2015 is a disaster.
(2) Dividends
Dividend income for 2015 almost doubled from 2014 as the market tumbled a little in the later part of 2015. I took the opportunity to load up a little on STI ETF. That contributed to the increase in dividends from 2nd half 2015 onwards. In 2015, i'm looking forward to a full year's contribution from dividend income from those new positions entered, and hopefully as more funds come in, i can take advantage of the further weakening of equities prices in 2015.
On a whole, while dividends doubled, the total amount is still quite minuscule, just 2.1k for the whole year. Definitely need to build this up.
(3) Rental
Slight improvement from last year. Although this is relatively stable. The major contribution to the improvement comes mainly from the strengthening of USD over SGD. For a same amount of USD rental income, i get more SGD (not that i actually FX it back to SGD for me to use)
What i did with the income is using the income generated from this rental to add to the investment monies i hold with my wife. Hopefully, it can grow again to a substantial amount.
Summary:
Total passive income for 2015 is $7,008, which works out to be $584 per month. A far cry from the target of $4,000.
I guess that's why i need this blog - to serve as a tracker and to motivate myself to keep up the journey to work towards financial independence.
Tuesday, January 5, 2016
Before you know it....
Went running over the weekend and decided to give it a go at the pull-up bar. My NS status is that i am 'excused' for pull-ups so never needed to complete that for IPPT since i fractured my wrist many years back.
Since then i got a bit rounder at the waist, and was a 'zero-fighter' for some time. However, since focusing a little bit more on my health last year in 2015, I had been doing adhering to the habit of doing 20 diamond push-ups every morning before work.
Lo and behold! At the pull-up bar, i managed to do 5 and believe that i can do a few more if i wanted to.
I think there's an inflection point in everything we do. I can't do a pull-up for the longest time ever, and when i DID managed to do 1 pull-up, i managed to do 5 at the same time. To me that is a breakthrough point. The lesson for me is things in life is not linear.... we may be stagnant for a while, but once the breakthrough has been made, growth can be exponential.
0 to 1 pull-up is difficult, but 1 to 5 pull-ups is comparatively easier.
I believe it is the same as my financial journey... while i have not made my pot of gold, the 2nd and 3rd pot of gold will come easier once the first pot has been made. It could be the magic of compounding, could be greater access to other investments, but yea, looking forward.
Note to self to carry on saving/investing in the year 2016 for that pot of gold at the end of the rainbow! One step at a time.
Since then i got a bit rounder at the waist, and was a 'zero-fighter' for some time. However, since focusing a little bit more on my health last year in 2015, I had been doing adhering to the habit of doing 20 diamond push-ups every morning before work.
Lo and behold! At the pull-up bar, i managed to do 5 and believe that i can do a few more if i wanted to.
I think there's an inflection point in everything we do. I can't do a pull-up for the longest time ever, and when i DID managed to do 1 pull-up, i managed to do 5 at the same time. To me that is a breakthrough point. The lesson for me is things in life is not linear.... we may be stagnant for a while, but once the breakthrough has been made, growth can be exponential.
0 to 1 pull-up is difficult, but 1 to 5 pull-ups is comparatively easier.
I believe it is the same as my financial journey... while i have not made my pot of gold, the 2nd and 3rd pot of gold will come easier once the first pot has been made. It could be the magic of compounding, could be greater access to other investments, but yea, looking forward.
Note to self to carry on saving/investing in the year 2016 for that pot of gold at the end of the rainbow! One step at a time.
Friday, January 1, 2016
Financial Resolution 2016
As with all new years, resolutions are always made. I set out to cut expenses and increase revenue last year, and i shall have similar goals this year. However, i will be more specific this time round.
As they say, targets should be a little of a stretch, so i shall try to streeetch it a little.
(1) Save $12,000 in 2016 for myself. I didn't managed to achieve this in 2015, and i shall aim to accomplish this. This amount shall be invested when good opportunities arises. That is $1,000 a month, and hopefully if i do get SOME bonus and tightening of my belt in some ways, i should be able to achieve this.
(2) Continue to build up buffer in each of my expenditure category in YNAB.
(3) Increase my annual passive income by $500 by the end of 2016. Have deployed some of my savings a.k.a war-chest in Q3 of 2015 when the markets took a tumble. Hopefully the full year contribution of the deployed cash (and additional returns from deployed savings into investments) would be able to come into play and help me achieve this increase.
Have you made any goals?
As they say, targets should be a little of a stretch, so i shall try to streeetch it a little.
(1) Save $12,000 in 2016 for myself. I didn't managed to achieve this in 2015, and i shall aim to accomplish this. This amount shall be invested when good opportunities arises. That is $1,000 a month, and hopefully if i do get SOME bonus and tightening of my belt in some ways, i should be able to achieve this.
(2) Continue to build up buffer in each of my expenditure category in YNAB.
(3) Increase my annual passive income by $500 by the end of 2016. Have deployed some of my savings a.k.a war-chest in Q3 of 2015 when the markets took a tumble. Hopefully the full year contribution of the deployed cash (and additional returns from deployed savings into investments) would be able to come into play and help me achieve this increase.
Have you made any goals?
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