Review 2018

Been almost a year since i last blogged, been, last post being 2017 and financially, my last update was at 2016 review.

My portfolio was a huge $2,130 at 31 December 2016 and I had committed to set aside $300 a month on investments.

Almost 2 years on, how have i progressed with my savings?

As at year end, my portfolio is at $14,510, which is not bad! considering i started at $2,130 in 2016. Honestly though i added most of my positions in the last 2 months when the prices of the equities started coming down. My cash holdings is around 2k as of now, and going to add more as i get my paycheck.

Point is, i managed to set aside more than my aim of $300 a month (otherwise, i would only have $7,200 by now + equity gains/losses)

Did not specifically track dividend income from the counters, but given the (huge) size of the portfolio, it is likely to be immaterial.

In any case, because i am using Standard Chartered online trading platform, all dividends would be automatically credited into my securities trading settlement account for reinvestment.

Shall continue to set aside my own savings and periodically use it to build up my ETF position, because currently that's mostly all (as above) i am holding onto now.

Long long way to FIRE.

Income Review 2016

Not many streams of income left in 2016 that will bring me into 2017, having liquidate most of my positions to purchase a second home.

Passive income:

As can be seen... my passive income dropped from 2016 as compared to previous years. Liquidated most of my assets to get another house which i am currently staying in. So it will be like a fresh start in 2017 when i try to build up my portfolio again to get income from dividends. Meanwhile, also hoping that the rental from my HDB will add a much needed boost to my passive stream.

Been holding cash a bit the past few years to buy another house, I guess that's why my dividends income wasn't that significant anyway.

Also only managed to get 1 month of rental out of my flat, and i net the agent's commission off. My US apartment continues to generate income, although there seems to be en-bloc interest in that. Let's see if i am forced to sell out, which is not ideal as i kind of like the regular USD income stream.


Portfolio as at 31 December 2016:
A grand total of $2,130. Now that I do not expect to use huge amounts of cash anymore in the near future, I am more comfortable in placing more into equities. Although the current amount i am placing now is still $300 a month. I should be looking to increase the amount in 2017. Waiting for my expenses situation to stabilize further, and to build up a bigger financial buffer too.

Expenses Review 2016

That time of the year when i look back at my expenses in 2016... and see how much better or worst did i fare financially...

I really only started tracking my expenses in 2015 when i got YNAB, and my first year expenses were recorded in 2015 expenses review.

It was pretty interesting to see where my money went to. I guess it would be even more interesting (for me that is) to see where i stack compared to last year.

Car Expenses: $31,687.88 (2015: $33,198.99)
Pretty consistent here. The slight disparity was because I did without a car for slightly under a month where i sold off my fancy ride to get a more down-to-earth vehicle. I expect the expenses in this category to drop in 2017.

Fixed Expenses: $17,792.31 (2015: $14,234.21)
This category is getting higher, and boils down to me increasing my insurance cover as described in here. Also taxation is higher (if i recall, there is a 1-off relief previous year) due to slightly higher income. An area which i can manage better, with SRS, topping up with CPF perhaps. I have been putting this off because I kept some cash on hand to fund my home. Now that that is out of the way, I can look to reducing some income tax expenses.

Monthly Bills: $2,322.48 (2015: $2,943.24)
Phone bills, gym membership. Slightly lower this year, as I managed to get reimbursement for my gym fees late last year as part of corporate benefit. Also my phone bills gets transferred to my 'family account' as part of a total package from Singtel. So likely i will drop this category in 2017.

Daily Expenses: $7,566.51 (2015: $9,081.47)
Total family expenses goes here (food, entertainment etc). Went down due to a conscious effort to cook more at home. Although in the grand scheme of things - it didn't look like it helped much. Maybe savings of $100 a month.

Holidays: $2,839.81 (2015: $8,239.05)
Too busy to take a break - a good thing for the wallet!

Personal Expenses: $6,538.75 (2015: $6,175.5)
Somewhat similar to last year. Was higher this year because i cabbed everywhere when I was without a car. Surprising to me though - because I thought I DID try to watch my spending on other areas like office meals and social entertainment expenses.

Bringing me to a total of $68,747.74 (2015: $73,872.46)
So, after a year of belt tightening, I cut my expenses down by $5,000 p.a. Which is about $600 a month.

Total essential expenses would be $43,897.57 [$31,897.57+$12,000 family expenses] (2005: $42,140.98)

And the daily maintenance expenses would be $3,500. Approximately same as last year as well. Having said that though, I still need to factor in the mortgage of my new house. So in reality, the figure per month is higher.

Overall, I think it is quite surprising to me. Looks like the efforts I have put into cutting my expenses did not bear as much fruits as I thought it should. It certainly felt like I put in more effort than satisfaction I get in the return for the savings!

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.

Expenses review 2015

A year has passed when i picked up my financial game again and it is good to reflect back on what i have wanted to do in the beginning of the year: Game plan 2015

Before that, a personal reflection. I did not realise how much personal finance topics were far away from my mind until i actually sat down and decided to re-focus my energy and efforts on it. While i have always been saving and investing, it was not as disciplined and well thought out as it could have been. Dare i say, it was even quite haphazard.

When we fail to plan, we are planning to fail, and at the rate i am going, i would say i wouldn't have done very well when i reach retirement age. Granted i think i probably would not starve and sleep in streets, but definitely would be less well-off than i could be.

Back to topic. I wanted to cut expenses and increase revenue.

(1) Cutting Expenses

I have diligently used YNAB to record and track my expenses. [for some reason, i find it quite pleasurable to record every single transaction. I think it's my accounting training. I just love to balance my books to the cent] While i always have an idea of where my money went, it was good to have real solid data on what i actually spent on.

And truth to be told, the beginning months were quite tough as i tried to 'live on last month's income', which is a key concept of YNAB. I pay myself first every month when my salary is in, but using February's salary to pay entirely for March's expenses was something i wasn't ready for. After a few months of tuning my expenditure and allocation, glad to say that i have passed this 'test' set by YNAB.

So where did my money go to in 2015? The way i used YNAB is by categorizing my expenses in several buckets for analysis.

Car Expenses: $ 33,198.99
All car related expenses, includes loan, carpark, fuel, insurance and any related expenses. I would be the first to admit that the easiest way to improve my finances would be to get rid of this. Even if i take cab everyday, the savings would be hugely substantial. Something i am mulling about, but it's a lifestyle choice at the moment, and i really enjoy the convenience and experience. Lesson here (i haven't learnt it yet) is to cut this away to accelerate savings.

Fixed Expenses: $ 14,234.21
Insurance and taxes comes in here. I increased my insurance coverage for death and CI this year. This is termed as fixed expenses by me, and not much discretion could be made here from my part.

Monthly Bills: $2,943.24
These are my regular bills (phone + mobile broadband) and membership to my Taekwondo school fees and sports related expenses. A little high because i took my 2nd Dan grading in 2015, and it cost me $450 just to sit for the exam. Additionally, i had to sign up for several preparatory courses, and that cost a bit too. The monthly school (or gym if you will) also do not come cheap at $140 a month. I did rationalize my expenses here a little but cutting away the mobile broadband once the 2 years is up, although that helps only a little.

[My joint family expenses which i track in another budget (groceries, utilities, home broadband etc) comes up to about 5k in 6 months. For simplicity sake, i shall estimate it to be 1k per month. I will use this amount to add to my subsistence level of expenditure]

Daily Expenses: $9,081.47
As opposed to personal spending, these are expenses which i incur for the family, including dining out at restaurants, home maintenance fees (payment for part time maid), changing of light bulbs, family entertainment (movies night) etc.

Holidays: $8,239.05
So i took 3 trips this year, 1 week in Australia, 1 week in the UK and 2 weeks in Taipei. I was lucky that my trip to the UK was part of my work trip, so i managed to save on the airfares. Again, a luxury here which can be removed if need be. For 2016 i am actually trying to plan a trip to the states just to settle some banking stuff as well as to check out my apartment over there.

If you are interested, you can take a look here, where i share some pictures from my trip http://www.casualtaketwo.blogspot.sg/

Personal Spending: $6,175.5
Expenditure which i incur solely. Eg: Office meals, personal shopping (yes, YNAB software comes in here), entertainment expenses (unfortunately these can't be done away unless i'm a hermit), personal dining expenses and other expenses related to weddings/baby showers/birthdays etc

Total personal annual expenses: $73,872.46 [or $6,156 per month]

Quite high, i truthfully admit, and the bulk of it pertains to the car expenses. However, if i DO give up on the car, what is my subsistence level of expenses?

YNAB provides me the option to easily select those categories which i will have to incur to just 'exist', and i came up with the below amount (inclusive of family groceries/houseshold expenses).

Definitely no car and no holidays!

Total essential expenses: $42,140.98   [$30,140.98 + $12,000 [family expenses]]

Works out to about  $3,500 a month.

Gives me a solid target to aim towards for passive income. Will write about my investments in another entry.

And before i forget, wishing one and all a prosperous happy new year!