Dividends and Interest Income for May 2016

This is just a rough estimate of dividends and interest credited to my bank account for this month:

Dividends = $1252
Interest = $197

Total = $1449

How Much To Save Per Month

How much should one save every month? Well, this is really a difficult question to answer. And it is difficult to give a straight answer because it can be quantified in absolute dollar amounts (say, $500 per month) or it can be stated as a percentage of one's salary (say, 20% of household income).

Well of course, one will always hear that you should save 10% of your income. However, I personally think that amount is way too low. It probably is correct when you are first starting out to work and have a low starting base salary (say $2,500). After paying for rent and stuff, it is unlikely that you will have much to spare. So 10% (or $250 per month) is probably a reasonable starting point. But it shouldn't stay that way for long. You probably need to start saving more.

After all (and as a very simple illustration) , if you only have 40 years of working life (let's assume you work from age 25 to 65) and spend 20 years in retirement, common sense or simple mathematics will tell you that you are working for 40 years to support 60 years of living expenses. That means you should only be spending 2/3 (two-thirds) of your income in the first 40 years so that you have 1/3 (one-third) of it left for the remaining 20 years of your life. I am really making many assumptions and simplifying the entire financial planning process so it is really best if you work out for yourself what is a realistic amount. On that basis, saving 33% of your income is probably the way to be safe.

Does this amount sound alarmingly high? Well, yes it is. Life expectancy has gone up and the cost of living has also been creeping up slowly but surely.

Another way to come to a figure is to work out your desired retirement income (or monthly expenses you expect to incur once retired) If you just assume an average expenditure for a married couple of $5000 per month for 20 years, that alone will sum up to $1.2 million dollars in savings that are necessary. That is quite a large sum of money without catering for any buffers. If the couple has a combined household income of $120,000 per annum, it will take them 10 solid years of saving 100% of their salaries just to set aside $1.2 million.

So how much should one save every month? Definitely a lot more than 10% of your salary if you intend to be financially stable and secure. In fact, it might be better to err on the side of caution and save more while you are young rather than to wait till retirement and realise that you have to cut down on your expenditure just to stretch your retirement dollars.

Baby Steps to Financial Peace

Most Singaporeans will probably not have heard of Dave Ramsey before. But anyway, Dave Ramsey is America's trusted voice on money matters. He also has something written on 7 Baby Steps to Financial Peace. The 7 steps are simple enough to follow and are listed as follows:

1. $1000 for emergency fund
2. Pay off all debts less the house
3. 3 to 6 months of expenses in savings
4. Invest 15% of household income for retirement
5. College funds for children
6. Pay off home loan early
7. Build wealth and Give

The steps seem simple enough to follow and should be a useful guide for most people. 

I guess not many people take financial planning seriously.

Take this comment by sigdiamond2000 on financial stability for example. It is extremely hilarious. 

Dividends and Interest Income for April 2016

Received a grand total of estimated $158 for dividends and $151 in interest income for April 2016.

Dividends came from one of my REIT holdings and the interest income came largely from my bank accounts which is yielding an okay interest rate. At the moment, I am largely relying on the OCBC 360 account (roughly 2.2% for first 60,000 and 1% for incremental increase) and their Bonus Savings account (0.8%). I also have the UOB account but have found it difficult to the credit card minimum spend requirement on that account.

It is March

The year has passed real quick and now almost three months have passed. And you sort of lose concept of time since each day is spent the same in what is almost repetitive. Each week is non-differentiable from the other. You lose track of time and friends. People fade in and out of your life and it is totally out of your control. But I know this year will be a good year alright. And everything will be okay and the family will be alright. But one can never be too certain. Never in my life have I been so busy and yet so isolated and drained.

I spent the Sunday reading some Hemingway and it made me realise how long I have not had time to read. And this was a good reading session because I managed to finish the book. But this was only my second book that I had read in the year. And it is already March. Anyway, I got started on a new book right after I finished one book today and this brought me a great sense of satisfaction.

Well, the fact that I ate some nice steak (a mixture of wagyu, ribeye and striploin) and downed it with some Riesling that had been sitting in my fridge for some time made it an even better Sunday. Not to mention the bread dipped in olive oil and basalmic vinegar. All prepared by me in double quick time for dinner as it was raining today and the roads were all wet and busy from where I had gone in the late afternoon to run some errand.

Financially, all is well. I have enough to live by and the family is happy and healthy. So there is really nothing more that I should be asking for. Some dividends from one of my reit counters was good. I don't know where the stock market is headed to right now and I simply couldn't care less. I wish I cared more and made a little more effort but this is not the time and there are still other things to worry about first. All I need right now is time and space. Time to read my books and be happy. For that is all that I want to do right now.

How many weeks in a year? (And why some people get 13th month bonuses)

Well, a simple question that many people have is how many weeks are there in a year. The simple answer is there are 52 weeks in a year.

Of course, we are not trying to be exact here since we know 52 multiplied by 7 only gives you 364 days instead of 365 days.

But is there a way to remember that there are 52 weeks quickly? Well, let me teach you a way that I remember this fact.

See, in the past, people were paid daily or weekly wages and so their monthly salary was based on 4 weeks. However, being paid in this manner means you only get paid for 48 weeks of work in one year. That means you have been shortchanged by one entire month of work (or 4 weeks of work) where you are not paid. And that is where the 13th month bonus kicks in. Of course, many companies do not give out such bonuses anymore but this idea is still prevalent in places like the civil service.

So through this little nugget, you can see that a quick way to remember is that 48 weeks plus the 13th month (4 weeks) equals to 52 weeks.

So there you have it. If anyone ever asks you again how many weeks are there in a year, you can work out the answer to 52 weeks!

Goodbye 2015, Hello 2016!

So 2015 has come and gone in almost a blink of an eye. And right now, 2016 is already upon us even as I am writing this post in a comfy cafe sipping on my ice-cold coffee and reflecting on what 2015 has meant to me.

2015 was probably a year of both ups and downs. There are definitely many things to be thankful about. Some of these include good health, advancement in career (and pay), seeing new places, enjoying new experiences, and having a great family (nevermind the occasional quarrels and fights). Indeed, I consider myself blessed. And I am still learning the art of contentment even though it still eludes me from time to time. So 2015 has really been a lot more positives than there has been negatives.

Investment-wise, 2015 probably has not been that good. A couple of my investments are losing money still and this is probably where I ought to spend more time and reflect to learn from my various mistakes. One of these mistakes is probably the blind pursuit of yield in some of my investments and that has proved detrimental since the risk was priced in but all I saw was the high yield. The lesson learnt is not to chase yield blindly especially when picking dividend stocks.

Nevertheless, despite my mediocre stock-picking skills and woeful market timing, I have seen my household networth surpass the $1 million mark. Of course this does not put me anywhere the high networth category since that is still way short of the USD$1 million in investible assets. But I know that goal should be achievable (God-willing).

Some thoughts on this is that my networth is largely tied to property so that is something to be mindful of. Also, most of this is probably not due to my efforts. Besides being a good saver and having a relatively okay salary, the rest probably boils down to being born in the correct family, having opportunities that jumped at me, etc. In fact, after much consideration (and as tempted as I am), I don't think there is any practical advice that I can offer anyone to assure them of reaching this milestone the way I did.

The negatives of 2015 probably boils down again to career decisions that need to be made and what awaits me for the future. I don't think I can say that I jump out of bed each day looking forward to the day. There are some changes that I yearn for in life (e.g. more free time and space, traveling, new experiences, etc) and I know these issues will probably need some confronting in the near future especially since I foresee a busy year ahead at work.

2016 is probably going to be a challenging year ahead. Probably not financially but emotionally. But I trust that God will see me through it.