Eyes On Retirement

I stayed in my parent's rental property for too long. It was near the office, hence everything was so convenient, walking distance in fact.  I stayed for 7 years, and I missed out on 7 years of extra dividend income. Lets take a very conservative rental of $3600.  Over that period, it was $4k+, subtracting expenses, yields $3600 a month.  Subtracting the amount I would have to pay to rent somewhere cheaper, say $1800/month.  I would pocket $1800/month, or $21.6k/year. Investing that spare cash into a safe dividend stock of 4%, would yield $176k over 7 years! I would still be getting around $6.4k of dividends every year.  It pays off to live frugally early on.  Singapore's MRT system has many apartments/condos integrated or nearby. I could've easily picked a place further out, close to a MRT station or with good bus connectivity to the office.   I was a spoiled kid.  I now live at the far end of Singapore, and it's definitely still ma...

I recently re-balanced the family's insurance schemes. I remember just when i was just starting out, my cousin once told me to buy only Term + Critical illness insurance. I didn't listen and bought an investment linked plan from one of my friends (he played the friend card, which is annoying). They guarantee you 3% returns or something similar, along with coverage. I bought the Manulink Flexi plan on Nov 1 2008, and had it for 89 months (7years, 5months). Monthly premium was $206.59. Total Premium paid was $18386.51. I remember getting back only around 11k when i surrendered this policy. Basically I paid $7386.51 in total for term + critical insurance coverage for the 7+ years, about 1k per year. Looking back, i did not require such coverage as i didn't have any dependents. Lets see the figures comparing what i would've otherwise gotten, had i invested in a stable dividend stock/reit, since the premise is that this policy is not necessary. I'm looking at a t...

Over the past few days, we've seen Creative shares (SGX: C76) rocket from $1 to $9+, and drop back down to $7+.  To those employees of Creative, better sell now while you can. To those who managed to catch this crazy 8x increase, congratulations! Being in my 30's, my investment strategy is to accumulate excellent companies and below average prices.  The reason why Creative's shares have appreciated so much is due to the introduction of their "Super X-Fi" technology, details can be found  at their website here.  In short, they claim users who attach their dongle to any pair of existing headphones can   experience a full surround sound. MSRP at USD150.  On their operating profit,  Creative in the 2Q ended December posted a net loss of US$4.2 million, narrowing from its US$6.5 million loss a year ago.  Seems to me they are betting the house on the success of this SXFi technology and the share punters seem to follow suit.  ...

The day I received my first paycheck was memorable.  At 23, I remember feeling I was financially independent, and I didn't need to spend my parents money anymore.  So I spent about 80% of my salary for the first 3 years, enjoying food, drinks, partying, whatever the Singapore food scene and nightlife had to offer.  A 20% savings rate is alright, but looking back I could've gotten by with 50%. That would have given me an extra 30% boost in savable cash, to use for blue chip dividend investments. Below is a simple expense/savings chart, of someone who commutes to work regularly, and does not pay rent (lives at home, but contributes to utilities). The difference is very glaring.  If both scenarios invest in the same 4% bond or dividend stock at the end of Year 3, the results after 12 years with interest reinvested is as follows. About $28k of extra interest gained, due to a high savings rate in the first 3 years. Enough said.