Friday, July 22, 2022

Me & My Money

 

Me&MyMoney
The CPF Warrior

Senior Principal Engineer, JJ, loves his engineering job and he intends to work until age 65 and beyond. 

His hobby is to write financial blogs, documenting how he builds a well-diversified retirement portfolio and all the good tricks at any topics dealing with monies, ranging from credit cards, Singapore Airlines flights, living cost in Singapore, etc.

Married to an architect, who participated the built of the Marina Bay Sands Casino, his wife also climbed the corporate ladder further to Temasek and recently was head hunted to a well-known property developer. They have a 10 years-old boy, whom JJ had groomed at the age of 3 in Mathematics, especially. He also pen-downed his teaching experience at his special blog, “Conquering the Singapore Education System”, showcase only the unique challenging math modeling questions. He loves to teach as he was a teaching assistant of Circuit Electric Analysis while he continued his graduate studies in electrical engineering in Michigan, U.S.A. Not only he collected four full semesters (Fall and Winter semesters x 2) stipends of US$4,800 each semester, through teaching in the university, the 2 years graduate school tuition fees were waived too, Teaching Assistantship. He also conducted private tuition class on campus, charging US$10 per hour, per student, with a tuition class average of 10 students at one time. The students were mainly from Middle East rich countries. He graduated with a 5 digits USD figures in his saving account and landed a job in Singapore with a Swiss German company specialized in microscopy as a development engineer. This is the company where he equipped himself with all the precision engineering skills and he had the opportunity to station at Mannheim, Germany for one year, responsible for high-end confocal laser scanning microscopy (CLSM), a new product transfer from Germany to Singapore, whereby the customer at A*Star research center will pay a million US dollars just for one laser scanning microscope. During one-year attachment in Germany, not only his basic salaries in Singapore was untouched, but he was also rewarded a daily oversea allowance of S$85 a day in Germany. That helped him to save up the first gold bucket very quickly as a fresh graduate.

Fast forwarded 7 years later, he landed at another Swiss German DNA company specializing in PCR technology (that was now widely used during the COVID19 era) and he embarked a honeymoon career as he realized one must always work as a customer and not a supplier. He went to Penang regularly (49x trips to be exact) to oversee the production at the contract manufacturing site to ensure the product quality was met (imagine working at Apple and oversee the Foxconn iPhone production line). It was an enjoyable career journey as he had a capable team at Penang.

Life is not always a bed of roses. He was retrenched 7 years later, on the BREXIT day. There was a massive spin off in Switzerland. He was rewarded a good retrenchment package, 9 months salaries and he landed another new career at bio-technology life science American company after 2 months of rest, with a 30% pay increment and 2 months bonus more than the previous company. He faithfully works as a R&D engineer until today (the only R&D personnel in Singapore whereby the hundreds odd of R&D team members are stationed in India, China, and Chicago).

Who says engineering work is not sexy in Singapore? He intends to stay for another 23 years in the same company.

Q What’s in your portfolio?

A I invested in equities that are listed in Singapore, Malaysia, Hong Kong and U.S.A. by using cash account, CPF OA account and SRS account through POEMS platform. I had invested a good S$600K sum in equities for long haul, mainly in rock solid blue chips and REITS. I have one fully paid 4-room resale HDB unit at Toh Guan, currently rented out (rental yield: 11.2%), one 4-bedrooms condominium unit at District 5 for self-stay. I have 2x private properties at Johor, one FREEHOLD 3-bedrooms unit at Gerbang Nusajaya (currently rented out at 4% yield) and one 2 bedrooms unit, 129 years leasehold condominium, at Sunway Iskandar (currently rented out at 3.4% yield). I also rented out my premium car park lot at Sunway Iskandar for RM100 per month as my unit is the second highest unit at 35th floor. Amazing, stunning view up there.

Q What are your immediate investment plans?

A I will not buy any Singapore property now as I do not want to pay the hefty ABSD charges of 25%. Surely not. Probably, the next Singapore property purchase will be 14 years later when my son graduates and I can start buying a new home for him and he will need to pay “monthly mortgage” to me instead of the bank. That would be a nice, win-win situation. 

As we all witness the market correction at USA and China, I personally think it is a great opportunity to start accumulating solid blue chips counters, just to name a few: Amazon, Microsoft, Tencent, Alibaba and index ETF such as SPY (SPDR S&P 500 ETF) and QQQ (Invesco QQQ Trust). I am still buying in different phases. 

Q How did you get interested in investing?

A I got inspired by Dr. Y C Chan (Yan Chong) on real estate rental income. That’s why for my first resale HDB unit, my tenants were paying my mortgage loan faithfully for years. I stayed in for free.

In addition, AK (ASSI) inspired me on CPF, SRS and Singapore stocks selection. Hence, I max out my FRS in CPF SA account quickly at age 37 together with my wife. AK inspired me to secure the safety net (CPF) strongly and me and my wife have S$1.134 million in CPF balance (Regrossed Balance) at the age of 42. Net cash position currently is S$850,000. From now onwards, we will see our CPF balance jump S$100,000 each year (or S$100,000 jump in each account every 2 years). Our CPF contribution are on autopilot now. The key is to stay employed.

Q Describe your investing strategy.

A I am a value investor. I sometimes DCA (dollar cost averaging) if the price tumbles too quickly while the fundamental never changes.

I don’t do contra and I don’t short. I also don’t do option trading.

I now focus on big cap blue chips counters too, e.g., local banks, Mapletree REITS, Singtel, as well as oversea stocks, DoorDash, Roblox, Beyond Meat, Airbnb, JD Logistics, WuXi Bio, Genting, etc.

I don’t mind to exposure myself into cryptocurrency with a small sum, of course, if Bitcoin ever breaks US15,000 level but I do not know which platform is now safe to buy and hold as there are so many crypto platforms in deep trouble. Gemini can be a safe one?

Q What else in your financial plan?

A I don’t have term insurance. I don’t have personal accidental plan too.

I am fully aware of the experts saying, “buy term insurance, invest the rest”. I will consider term insurance one day, maybe, if the need arises.

Nevertheless, I have investment linked plan, endowment plan and whole life insurance plan.

My investment linked plan is from AIA, 100% into Acorns of Asia fund that is doing well, and I expect to surrender the plan around age 65 during the bull market, not bear market.

Endowment plan is HSBC Target Saver, it will be expired 5 years from now. It will give me pretty much a stable value of S$65,0000. That is meant for my kid tertiary education fee.

Whole Life insurance plan is TOKIO Marine Legacy plan. It will be fully paid 4 years later. I plan to keep this plan for my son (to claim my death benefit) although I also have an option to surrender it at age 65 with a value of S$350,000.

I also have complete H&S Prudential plan that covers all my hospital bill. I have never claimed any benefits from this plan thus far and I count that as a blessing. 3 of us have the complete H&S plan.

Q How are you planning for retirement?

A I will work until age 65. I love my job if all circumstances stay the same throughout (e.g., the workload and the job function).

I love to teach. I can conduct Math and Science tuition to the primary school kids or do a volunteer job at NKF as I know the technology/business well. I can do part time real estate agent too, not to mention to travel even more often besides the usual two vacations a year during the school holidays.

CPF LIFE, SRS and HDB rental income will probably be my retirement income. Based on 3.5% annual increment in FRS, my FRS sum will be S$300,800 and that will yield S$2,406 monthly payout. SRS spanning for 10 years withdrawal, will give me another S$6,000 a month and HDB rental income of S$3,000 at least will be good for now. Last but not least, my childhood red packet monies in Malaysia ASNB product, ASM 2 Wawasan, will be a good sum of RM450,000 (~= S$140K+) when I turn age 65. It was purchased when I was age 17 with total sum of RM37,000. I probably need to plan to withdraw/ surrender the plan at age 65 too as it will be difficult for Singaporean (my son) to inherit. I will not convert the Ringgit to SGD as I can spend in Malaysia whenever I cross over to Johor or back to my hometown at Sarawak occasionally.

Q Home is now …

A 4 bedrooms condominium at District 5 (Clementi).

My unit is facing the 50m lap pool where I swim 10 laps almost every day if the weather allows. It is going to be my retirement home. I like the neighborhood here a lot.

Q I drive …

A 2020 Honda Civic 1.5 Turbo, with CAT B COE S$41,510. It is a fun car to drive, and I like it.

Worst and best bets

Q What has been your biggest investing mistake?

A I cut loss in year 2018, S$40,000 loss, in a small cap company. The company changed the name couple of times, maybe 5 times. The chairman is staying at the penthouse of The Sail. It was a stock referred by my ex-colleague and we are still friends.

Q And your best investment?         

A It got to be our BLK 286A, 5-room flat at Toh Guan. We bought in late year 2007 and sold in early year 2009. ROI was 390% and IRR was 273% (within 2 years). MOP back then was 1 year.

Sunday, July 3, 2022

CPF Annual Report 2021 (1.134M42 Regrossed Balances)

CPF Annual Report 2021 had just been released!

Benchmark our CPF balances with the national data with the "All CPF Members" table.

CPF_AnnualReport2021_Part1.pdf

CPF_AnnualReport2021_Part2.pdf

With regrossed balance definition, we have a combined S$1.134million dollars in CPF. : ) That sounds better.

Anyway, net cash balance in CPF account is S$849,000 instead. 

The key is to stay employed. 



The regrossed balance includes the monies you have spent on investment / housing loan / education, etc. .

I personally think that is the right way of calculating as that shows your ability to draw cash into the CPF account (be it yourself or from the employer contribution).

Nevertheless, it excludes how well your stocks/ Endowus performance in the CPF OA account as they only count the amount you throw in.

That says, if your stocks/ Endowus perform well above 2.5% given by the CPF OA, you will expect much larger sum the moment you sell and return back to CPF OA!

 Vice versa.

We have achieved 1.134M42 and now target at 4M65. 

JK Holdings: CPF Regrossed Balances benchmark & CPF Balance Projection (Achieved 1M41 & Target 4M65) (jkfund.blogspot.com)

Updated on October 15th, 2022: