Key Highlights & Notes From CEO
"Work Hard Now, So We Don't Have To Work Hard All Our Lives"
"When you save for the future, you actually allow yourself to live in the moment.
Most people get this completely backwards. They live in the moment, which kills their ability to save for the future (aka YOLO). My plan is to flip that script. By sacrificing a few years when I'm younger, I am building a financial foundation that will last a lifetime."
This year marks the 3rd into the new job and it could be a good time to move on. We broke some significant financial milestone this time:
Financial Milestone (2019)
1. Passive income enough to cover all basic recurring expenses
2. CPF Met the Full Retirement Sum of 2019
1. Total net asset value grew 21% despite topping up $7000 to CPF-SA
2. Annual saving rate of 78.9% (80.8% in 2018, 80.5% in 2017, 78.2% in 2016)
3. Safety passive income now cover 65% of our recurring expenses
4. Portfolio market value grew 20% (inclusive of capital injection and gains)
5. Portfolio XIRR for 2019 at 14.23%
6. By Pay-Date, distributed over $8300 worth of dividends ($7800 in 2018, $4900 in 2017)
-------------------------------------------------------------------------------------------------------------------------
Income Statement (2019)
Total income was merely 2% higher due to the huge bonus cuts.
Passive income growth was only 7% after selling M1 and Capitamall, and most new dividend stocks were brought later in the year. We also suffered from saving account interest cuts among the various banks.
Expenses were about $3000 higher with the signicant ones being:
1. Higher income taxes
2. Genting Dream Cruise vacation in Feb
3. Taiwan trip in Apr
4. Takeover of all insurance policies
6. Birthday angbao to parents (Same as last year)
5. Samsung Galaxy Note 10
Balance Sheet (2019)
Survival Burn Rate = Recurring expenses needed for essential survival
LEAN FI Rate = All expenses needed to maintain our current lifestyle
FI Rate = Lifestyle with built-in buffer that we want to achieve in Financial Independence
While the red-line grew significantly, yellow and green line remained flat thanks to much higher discretionary spending.
Our goal remain the same - to exceed 25 years for the yellow line by year 2021.
Recurring Expenses Breakdown
Categorical expenditures remained pretty much the same as every year. Top expenditures were the essentials - food, travel (transport) and utilities (internet and phone).
1. Lottery spending was around $250 (Almost $100 lesser than 2018). Won 1 single Group 6 of $10.
2. I ate fast food 60 times (64 in 2018, 70 in 2017, 81 in 2016), counting only lunch, dinner, supper. Managed to meet my goal (right on the mark!) of cutting down fast food. I think this is as far as I can go for now.
3. I brought 48 (22 in 2018, 11 in 2017, 31 in 2016) cups of Bubble Tea this year, much more than previous years. This is due to... influences from BBT loving colleague. Haha.
4. I brought 17 cups of Cafe drinks (4 last year), similar to reasons above.
5. Visited restaurants 37 times (32 in 2018, 20 in 2017). My most expensive single trip restaurant is $37.
6. Only 5 KTV (10 in 2018) sessions for the entire 2019! (Excluding JB trips)
-------------------------------------------------------------------------------------------------------------------------
An exceptional year where we beat the index handily.
This year, we injected almost $40,000 into the stock market (STI, Sembcorp Industries, Eagle, F&N, Capitmall Trust and Accordia Golf Trust).
| Year | Portfolio | ES3 |
|---|---|---|
| 2014 | -2.94% | 7.00% |
| 2015 | -8.17% | -10.95% |
| 2016 | 11.97% | 2.69% |
| 2017 | 22.00% | 20.68% |
| 2018 | -10.40% | -7.43% |
| 2019 | 14.01% | 8.78% |
Excluding the STI, we have a healthy and diversified portfolio of 12 holdings (up from 11 last year and 10 in 2017).
Review of 2018 Goals
Missed our goal of hitting $10,000 dividends due to the insane market rally (no chance to buy the good REITs at all!)
Outlook For 2020
We will continue our core strategy of building up a divesified income portfolio backed by index foundation. We are more than 10 year into the bull-run and the music got to stop one day.
Once again, our ammunition have replenished entirely after December, and would fatten even more in March. Hopefully we have opportunities to deploy them before the dividends season come in Q2.
We will be bring forward last year goal to exceed $10,000 worth of dividends - hopefully we get some Great Singapore Sale.
There is a good chance of a income source switch which would definitely have impact on revenue. For now, we would let nature take its course.
Long Term Goals
Our long term roadmap remains the same - And this year marks the year we intend to diversify into more global markets. Although I am personally confident in Singapore, I still could not risk placing all our money in 1 basket. What if we experience a lost decade like Japan?
- Open Interactive Brokers Account (Start with DCA and within 2 years grow it to more than $100K USD when we can enjoy $10 platform fee waiver)
- Indexing World ETF via IWDA + EIMI (Can it drop below $50?). Both ETFs automatically reinvest dividends (i.e accumulating units).
- Indexing for China via Heng Seng Index (HK 2800). China growth in the next 20 years should be immense.
- Local portfolio reached substantial size to start lending shares for extra income
5 Year Masterplan:
Year 2020: Start diversifying into global markets.
Year 2021: Reach "25 Years Expense" Networth.
Year 2022: Eligibility to buy HDB.
Year 2023: Passive income completely cover all-expenses. Save 100% of salary annually.
Year 2025: Financial Independence.
No comments:
Post a Comment