Annual Report 2021

Presenting 2021 Annual Financial Report! 

The only growth that you should care about is your salary. The next move is to get out of the rat race.

The career growth is a fallacy to retain you as a rat and wage slave.

At the end of the day, you are the mercy of your company (restructuring), your bosses and the economy (pandemic?)

You may not understand yet, but planning your escape route is more important than planning your career."

Key Highlights & Notes

Financial Milestone (2021)

Passive income finally cover all expenses (largely due to expenses reduction), meaning we are saving 100% of salary.

Achievements (2021)
1. Liquid net asset value grew 4%
2. Total saving rate of 87% (81% in 2020, 77.4% in 2019, 80.8% in 2018, 80.5% in 2017)
4. Portfolio market value grew $130K (inclusive of capital injection and gains)
5. Portfolio XIRR for 2020 at 4.88% (14.23% in 2020, dragged down mainly by China market)
6. Yearly dividend now exceed $1000/month

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Income Statement (2021)
Total income is about 8% higher due to pay increment and better bonuses (year-end), making it our highest earning year.

Dividend income grew significantly by almost $3000, but was almost entirely offset by the massive interest rate cuts. The destruction of DBS multiplier and Singlife took away more than $2000+ worth of bank interests.

Total expenses almost $4000 lesser than 2020 and $7000 lower than 2021. 

Recurring expenses $1000 lesser than last year and $2000 lesser than 2021.

Most of the savings would come from transportation due to WFH and more eating in at home.

No exceptional one-time items this time except the usual angbao to parents.

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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), heavily skewed by working from home (an average of twice a week in office)

Random discovery time!

1. Lottery spending was about $400, and we did not win a single time...

2. I ate fast food 64 times (61 in 2020, 60 in 2019, 64 in 2018, 70 in 2017, 81 in 2016), counting only lunch, dinner, supper. Right where we want it.

3. I brought 20 cups of bubble tea, excluding using vouchers/gifts (14 in 2020, 48 in 2019, 22 in 2018, 11 in 2017, 31 in 2016)

4. I brought 12 cups of Cafe drinks (9 in 2020, 17 in 2019)

5. Visited restaurants 11 times only! (32 in 2020, 37 in 2019, 32 in 2018, 20 in 2017). Most expensive single trip restaurant was only $37.

6. 0 KTV sessions and only 2 movies! (RIP Teo Heng, Marvel + Spiderman)

7. We ordered Grab Food 4 times (excluding those free ones where we used vouch. 

8. We took only 8 Taxi/Grab trips this year. Annually, transport expenses were less than $500 (far less than $1300 in 2019) 

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Investments Breakthrough

1. First foray into the Hong Kong market in Jan 2021, grabbing up tech giants such as Tencent, Alibaba and Tech ETF. Unfortunately, our timing could not be worst off as the China crackdown is relentless and brutal, wiping off as much as 30% off our HK positions by year end. Luckily, HK is still less than 20% of our portfolio.

2. First foray into US market towards the end of the year as US head into correction territory due to FED tapering fears. We are looking at high growth ARKK innovation coy (Palantir, Fastly, Teladoc) as well as big giants which have been re-rated (Paypal, Adobe, SEA, FAANGs).

3. First foray into options in Q4, partly inspired with Adam Khoo and many month of study. In just 3 months, we made $2000 off cash secured puts (on capital $20000), making about 3% per month? This is like discovering an entirely new way to make "dividends' off growth stocks, and I forsee this being a huge supplement to our dividend strategy going forward. 

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CPF Actions

Top up $600 to both my parents, and transferred $5000 to my mum to make greater use of the additional interests.

I deliberated whether to further top up more to CPF but decided to hold back this year to keep more ammunition. considering the opportunities in the stock market.

Over the past 3 years, we have top up at a total of $15K and CPF is growing to become a very huge portion of my networth.

It is important to balance our near and future needs. Considering that:

- Age 35 onwards, SA allocation will increase

- MA has reached BHS and overflow to SA

Our SA amount is on track to hit the FRS in the next few years, retirement foundation is quite stable and I feel there is no need to further lock up ammo at this time. 

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Outlook For 2021
We made multiple breakthrough in terms of investments this year - not sure if Crypto will finally be next. Maybe if there is some kind of ETF.

I forsee myself doing a 'restructuring' of some sort to sell away the weaker holdings in my SG portfolio and allocating more into HK and US markets.

Life Update 2021

1. This has been a really arduous and difficult year - likely one filled with the most tribulations in my 30+ years.

2. Looking back, I really don't know what happened during the June to August period. It is as if I became a different person (would even go as far as to described myself as being possesed). I became extremely emotional, insecure, anxious, overwhelmed and worried for something that does not seems like a big deal. I became stuck on a stupid decision - to the point that I even spend a few hundred to see a psychologist. I must be crazy. Now that I have finally calm down and recollected my thoughts, I am sure that I still want to move on, but not to a place I feel no excitement for. 

3. I also got infected with Covid - yeah, it has to happened eventually seeing the direction Singapore is going. I was extremely upset because it was entirely preventable. But you know - stubborn and irresponsible people, extremely iron teeth relatives, etc... I was extremely sick during that period of time (late Nov) too. I am not sure if it is entirely due to covid or the fact that I did not pay much attention to it (thought of it as mild cold) during its inital stages, and the sore throat developed into a full blown nightmare. 

Think LV1 as normal sore throat (itch/discomfort), LV2 as pain when swallowing saliva, LV3 as your ear is painful too when swallow saliva, and LV4 as you have to muster your entire body strength in order to swallow 1 gulp saliva. I could not put it into words just how painful and miserable I was - every gulp of water and mouth of food was so agonizing, which might have delayed my recovery.

Fever lasted (on and off) for almost 6 days and I ate countless cold/flu medicine. Thankfully I got better by the 7th day. As far as I can recall, this was definitely 1 of my worst sick episodes.

4. What would have been my last high key reservist in Jun got cancelled last minute due to covid, and they called me back for a low key in Dec. Great.... 1 more year of IPPT cycle.

Alright... usual updates now:

1. Board gaming hobbies basically died off, but I did make some friends on QM, meet up and introduce some party games them.

2. FF７Remake - God it's so damn good... the childhood memories. Watched so many reactions and can't watch for the next chapter in the series.

3. Demon Slayer Season I (Episode 19) + Movie... and now onto Season 2. The animation quality of this show is insane and probably the best I've seen (considering I'm not an anime fanatic). Watched so many reactions. Zenitsu favourite character.

4. Squid Game, Spiderman No Way Home

5. Gaming wise: Started Legends of Runeterra from 2020 Dec. Backed Eiyuden Chronicles (companion game 2022, release 2023). Basically not playing much games anymore except Hearthstone and LOR. And of course QM Party.

6. I believe Insomnia issues continue to plague me, but it is not apparent due to WFH. 

The Most Difficult Period Of My Life

 The past 1.5 months has no doubt been 1 of the most difficult and arduous period of my life.

On hindsight - It's trouble I find for myself (due to gtting influenced by others around me) yes, it is a big change. But is it really that big of a deal when you see it on your life basis?

It got so bad at one point that every ticking of the clock towards the "deadline" felt dreadful and scary.

While I was in the cycle, It felt that every deicsion I made would be wrong.

Everything is a huge mistake.

You may know "logically" know what to do, but you can't overcome the "emotions".

No matter how many people opinion you ask, whether they are close friends or experts, they are not you.

They will not understand your life goals.

We share different beliefs, experiences and life goals. What is important to someone else might not be important to me at all.

There is no need to follow someone else.

It was extremely painful and agonizing experience - filled with anxiety and worries. I never knew I had like anxiety disorders until this event.

The good?

It made me grew closer to my family.

It made me slowed down and see that there are other things to life besides work. 

There are nature and there are better things to enjoy

It made me even more determined to find things to anchor myself onto after FIRE.

I have a huge buffer in my life - compared to the milions and millions who are forced to pivot during the pandemic, I am so much more lucky.

Mine is reallly a first world problem.

We are nothing but fleeting in this universe and a spark of dust compare to how vast the universe is.

No need to be too attached to things.

I need to focus on my personal life goal, not depend on others opinions to decide what I want.

Life Update 2021 - Kbeans, Comfort Zone

1 Million K-Beans

Recently, I struck one of the "Gold prize" in QM Party game and got rewarded with 1 million beans.

It brought a total change in how I play the game.

In the past, I do not really care about the beans (i.e using them on random strangers) as I see it only as an app to sing.

After 1 get 1 million beans, for some reason I became much more conscious of how I spend them.

I would evaluate "Is this event worth spending? Is this casino rate good?"

I would "work" for more beans by performing "chests robbery" or "singing in public rooms".

I would actively collect more "pig heads" and fight to "snatch gold".

It was unimportant to me when I had nothing, but became valuable when I had hordes of them.

Same With Money?

I can't help but realize this is exactly how I felt about money.

Before I stepped in into the society (Uni year 4 to period after graduation), I only had a small amount of savings, but I never felt any pressure to "quickly find a job". I was just leisurely enjoying life.

Now, I have a significant amount of financial security, much more than 10 years ago. If I were to retain my current lifestyle, I will have enough to spend for decades.

And yet, I felt even more insecure about leaving a job.

Isn't more money suppose to grant me more security?

More freedom to pursue the unknown? To try different things in life?

Why do I seem even more bound to my job now?

I feel more afraid of the unknown, more afraid to take leap of faith, afraid to step to step out of my comfort zone. 

Is it because I have become too obsessed with growing my networth, that I have see incoming cashflow every month?

Is it because I have become too comfortable with everything here (familiarity, people, tasks, environment)?

Or is it simply because i have grown old and now crave security much more? :(

Comfort Zone

I experienced this same anxiety and 'fear of the unknown' when I left my first job.

Now, I am experiencing the same discomfort again (but MUCH stronger).

Perhaps because the pull factors are not as strong (same industry) as the job would be similar in nature to an extend.

People are really creatures of habit and can get really comfortable in a routine.

From the stall you buy your morning coffee from every morning, to where you sit in office, to your bosses, colleagues and things you do on a regular basis.  (even those you don't like) 

It's the hedonic threadmill at play.

The little voice in the back of your head will come up with a thousand reasons why your new endeavour will fail, is dangerous, shouldn’t be repeated, should be avoided…. the record plays on and on and YOU need to pause it.

https://www.hartsteinpsychological.com/5-reasons-to-leave-your-comfort-zone-suhadee-sue-henriquez-lcsw-act 

https://daveasprey.com/step-outside-your-comfort-zone/#:~:text=When%20in%20your%20comfort%20zone,t%20want%20anything%20to%20change.&text=Getting%20out%20of%20your%20comfort,stress%20when%20unexpected%20things%20happen

Through this process, I also realized that to make a "big decision", I definiely need an "in the moment" emotional push. Otherwise, it is easy to fall back in that comfort zone.

Once that triggering moment passes, you will return back to that "don't wanna rock the boat" state.

This can help if you want to make a big change in your life and commit to it - write it down.

Side Track: One Type of Rice Feeds Hundred Types of People

During this job hunt, I consulted lot of different people for advice.

And I realized just how big of a difference my mentality can be with others - we simply see the world through a different lens.

Just some examples:

1. They think $1000 more in pay is a huge deal are even willing to work 996 for it compare to a 965 job

2. They think a 8 x 12 job is much better than a 6 x 16 job, even if annually they pay the same, because they get a higher take home pay.

The main reason for choosing the first package should be that basic are guarantee while bonuses are not, not due to takehome pay. If we disregard this, I would take the 2nd package anytime because you actually get higher overall pay (in CPF). In fact, I even top up into my CPF (LOL. I must be crazy)

Once you reach a certain amount of income, does that 20% more really bring in an equivalent more utility in your life? To the point that it is worth it to sacrifice your work-life, your free time and maybe even your health?

That said, I must admit that my thinking are the outlier of the Singapore society.

I am not even spending 20% of my takehome pay, why do I need even more money?

Which crazy person seeks to escape the rat race and FIRE at 40? Haha... only very few friends share the same goal as me. In fact, one of them (in his late 30s) just quit to pursue his own interests.

I wished I had the courage to do the same, but I am not at the point here I have "enough for the rest of my life" yet.

别人笑我太疯癫，我笑他人看不穿 。

7 Warning Signs of A Bubble

1. When the price of the asset goes beyond it's intrinsic value (when the price goes 'parabolic' 90 degree angle instead of at a 45 degree angle on a chart). Use an 'intrinsic value calculator'.

2. People say, "This time is different!" Don't believe you're the exception. Stick to the rules.

3. When Aunts and Uncles (laymen) join the investing party (optimism is at an all time high) when they normally don't invest in the market.

4. The media sensationalises high returns and overnight millionaires.

5. Increased use of leverage (borrowing money and using margin to buy stocks) by speculators.

6. The talk of the town. Everywhere you go everyone is recommending to invest in a certain market.

7. When doubters and skeptics are disregarded.