The biggest bombshell this quarter was the unexpected amendment to Citibank Maxigain, which took me by surprise. It was a huge blow to my safe passive income as it dropped from "0.8% of SIBOR + 1.2% Bonus" to "0.5% of SIBOR + 0.6% Bonus".
It is atrocious that they dare sent a letter saying all other "features" of Maxigain account remains unchanged. Yes, all the negatives you mean, like "not being able to withdraw".
I should have seen this coming (though I did not expect such a big change so quickly after the last). I threw the chance to enter SSB when it was at near 2% for 1 year interest and can only regret now, haha... the rate has since plummet to 1.5+% for 1 year and 1.7+% for 10 years.
Nonetheless, closing this account (on 2nd Dec 2019) meant freeing up a huge stash of ammuntion that has nowhere to go. With DBS Multiplier max-ed out and CIMB Fastsaver giving only 1%+... it was a huge headache.
After much deliberation on available options:
1. SSB at 1.5+%, pro-rated interest and withdrawable anytime.
2. CIMB Fixed Deposit at 1.7% for 3 months.
3. Stashaway Simple at 1.9% (projected).
I finally settled on 2 remedial action.
It is atrocious that they dare sent a letter saying all other "features" of Maxigain account remains unchanged. Yes, all the negatives you mean, like "not being able to withdraw".
I should have seen this coming (though I did not expect such a big change so quickly after the last). I threw the chance to enter SSB when it was at near 2% for 1 year interest and can only regret now, haha... the rate has since plummet to 1.5+% for 1 year and 1.7+% for 10 years.
Nonetheless, closing this account (on 2nd Dec 2019) meant freeing up a huge stash of ammuntion that has nowhere to go. With DBS Multiplier max-ed out and CIMB Fastsaver giving only 1%+... it was a huge headache.
After much deliberation on available options:
1. SSB at 1.5+%, pro-rated interest and withdrawable anytime.
2. CIMB Fixed Deposit at 1.7% for 3 months.
3. Stashaway Simple at 1.9% (projected).
I finally settled on 2 remedial action.
Yes, I finally did it.
This is something I have been contemplating for the past few years but never had the courage to do. Even up till the point of pressing "transfer", I still have this "sinking" feeling that I am transferring $7000 that I would never see again in my life... Still, logic won over the heart in the end. A huge reason for this is I am single and do not have someone to leave a legacy for in the future. Otherwise, it would be a much easier choice (i.e if i have a kid I would definitely top up).
For the past few years, I had Maxigain which gave me near 2.5% interest, almost as good as CPF-OA. It was a huge 'deterrence' for not making top-ups. Now, a combination of factors made me pulled the trigger.
1. The yield between the "public" risk-free rate and CPF has widened much more.
2. There is a limit cap on those with better interest.
3. Stock market (especially REITs) at all-time high and compressed yields.
4. Accumulated decades of emergency funds and my passive income can now cover all basic expenses. This means much less chance I need to tap on the cash.
5. Basically met FRS, which means I can withdraw the money at age 55.
6. Might as well earn some tax-relief.
Anyway, the topping-up experience was much smoother than I expected - near instanteous and the contribution appear on my statement immediately! Cool!
*Tip: Top up near the end of the month as CPF interest is calculated based on the lowest balance of the month. It means you get to earn interest elsewhere for that 20+ more days.
Action 2 - Hacking DBS Multipler Using Insurance
Coupling the "1st year 35% discount" promotion and "Insurance only recognized for the 1st year" clause makes advancing to the next tier a no brainer.
The way I see it, I am paying $7+ per month in order to get higher interest for an extra $50K.
Assuming a very conservative 1% higher interst, that is $500 more per year which is $40+ per month. Deducitng $7+, I am still gaining $33 more income per month. And that is "at the very least".
In good months where I can clock the highest tier, it can amount to about $100 more! Which means, 1 good month and I would have more than pay off the entire year of insurance cost.
Yum yum!
(Note: This was written before DBS Multiplier announced change from Feb 2020. We will have to see how to mitigate the impact)
Performance Review Highlights / Acquisitions & Developments
Many actions this month: Averaged down on EHT, brought F&N, Capitamall Trust and Accordia Golf Trust (gambling on its acquistion deal)
Overall, our portfolio recovered strongly (nearly $10K from capital gains alone) thanks largely to Singtel and various REITs.
Total dividends for Q4 stand at $1100, slightly lower than last year's $1200.
Salary and total income took a big hit due to the much reduced bonus (essentially 1 month lesser). I think many did not expect it to be this bad.
We earned some $500+ side income from multiple sales on Carousell (as part of my journey towards Minimalism), birthday gifts and long service award.
Operating Highlights - Expenses
1-time expenses were higher thanks to higher income tax and Samsung Galaxy Note 10 (purchased on the last day of the year!) to finally replace my S7 which I have used for 3 years!
Regular expenses are in-line, but is definitely inching towards the higher side now. I forsee this trend to continue as I continue to indulge in Starbucks, Tiger Sugar, Boost Juice and generally nicer food ($10 to $15 for lunch) more frequently.
Outlook
More to come in the annual report.Side note: Layers Senpai has a really good series summarizing 1 of the best investing book : Little Book of Value Investing
