There was this article in Yahoo provided by iFAST on some of the things twenty somethings can do to make themselves financially more prepared for the future. It summarises the article with these 5 things that it says young people should do.
•Save at least six months of your monthly salary in an emergency fund
•Put aside at least 10% of your income towards goals that you want to achieve
•Start budgeting and sticking to your plan.
•Use credit cards responsibly (pay off your balance before the due date)
•Acquire a hospitalisation plan, critical illness cov¬erage and death coverage
Out of this 5 goals, I have already done 4.
The only one that I have not done is the part about budgeting and sticking to my plan. Seriously, who in this world still uses a budget? I really cannot find the discipline to do any budgeting. I just make sure that I do not spend too much money.
Anyone of you able to do all the 5 things listed here?
This blog is about financial freedom and serves to inform, educate and entertain the public on all personal finance matters. The author of this blog has been blogging for 5 over years. He was also a guest blogger at CPF's IMSavvy site (now AreYouReady site). This blog is visited by many unique readers from various countries every month. Do bookmark this blog and leave your comments.
Evening at Anchorpoint
I was out in the evening with my family at Anchorpoint.
Anchorpoint is part of Frasers Centrepoint Malls.
I must say that over the years, Anchorpoint has been renovated quite well. Compared to around 10 years back, there are a lot more shops and the crowd is spilling over from IKEA.
The only gripe I have against it is the carparking. The carpark is simply too small and it was completely full today when I tried to enter. Ended up having to park at IKEA instead.
Anyway, I was at the bookshop and noticed that there was this woman at the cashier and she looked like she was REALLY bored and in a real bad mood. Her whole face was like a sour prune and she looked really tired.
She reminded me of the saying "Making a dying instead of making a living".
People were out in full force enjoying their Sunday. But here was a poor woman in her thirties, working her butt off to pay her bills. She sure did not look happy working on a Sunday evening and it looked like she was really tired from the standing.
I hope that she manages to get some rest even after she knocks off work today.
It is important to earn money but it is equally important to know how to spend money and enjoy life.
After all, a recent survey showed that people who brought home an income of $5000 per month reported themselves as being more happy. However, in the same article found in Straits Times titled "What price happiness?", those earning less than $2000 per month were enjoying life the most.
Some thing to think about? Are you truly enjoying life? Is making a living becoming an excuse for you not to enjoy life?
Anchorpoint is part of Frasers Centrepoint Malls.
I must say that over the years, Anchorpoint has been renovated quite well. Compared to around 10 years back, there are a lot more shops and the crowd is spilling over from IKEA.
The only gripe I have against it is the carparking. The carpark is simply too small and it was completely full today when I tried to enter. Ended up having to park at IKEA instead.
Anyway, I was at the bookshop and noticed that there was this woman at the cashier and she looked like she was REALLY bored and in a real bad mood. Her whole face was like a sour prune and she looked really tired.
She reminded me of the saying "Making a dying instead of making a living".
People were out in full force enjoying their Sunday. But here was a poor woman in her thirties, working her butt off to pay her bills. She sure did not look happy working on a Sunday evening and it looked like she was really tired from the standing.
I hope that she manages to get some rest even after she knocks off work today.
It is important to earn money but it is equally important to know how to spend money and enjoy life.
After all, a recent survey showed that people who brought home an income of $5000 per month reported themselves as being more happy. However, in the same article found in Straits Times titled "What price happiness?", those earning less than $2000 per month were enjoying life the most.
Some thing to think about? Are you truly enjoying life? Is making a living becoming an excuse for you not to enjoy life?
3 Bubbles to Watch Out For in 2010
Future bubbles are getting more and more difficult to predict. At least it seems so.
The Federal Reserve in the United States even with their huge regulatory arm and research departments could not forsee the bubble that resulted in the Global Financial Crisis of 2008.
Alan Greenspan and Ben Bernake constantly downplayed the risk of the subprime bubble that eventually led to a full blown global financial crisis. It seems from this scenario that central banks might not be effective as a central agency to forecast risks and bubbles that are likely to form. Even if they are successful, certain events might still crop up along the way which are totally unexpected and not forecasted by these public servants.
A bubble forms when there is over enthusiasm and an appetite for risk that is not commensurate with returns.
As we move into 2010, bubbles are likely to form again. Here are a few bubbles that I can think of which might bring about the next market correction or "crisis".
1. Gold Bubble. Gold has been increasing in price for the past few years. It seems that a gold bubble is likely especially since investors are so positive about the prospects of gold. The US dollar is indeed falling but that ought not to justify the performance of gold. A gold bubble in the making?
2. China Bubble. We have all heard it for so many years. Everyone is so positive over the economic outlook of China. They have achieved double digit growth and their yuan is undervalued. Could there be something lurking under this China growth engine to pull the entire world economy down? Shoddy accounting practices...dubious growth figures...over optimism..you bet!
3. Commodities bubble. We have heard that the price of garlic is going up in China. In 2008, commodities were also hot. Jim Rogers has been championing the rise of commodities. Oil prices have also been going up. Is this the next bubble in the making if investors continue to be so optimistic about commodities.
Bubbles will continue to be a permanent feature in the stock market. Where there is asymmetric information and money earning opportunities that seem unlimited, bubbles will always form. It is impossible for anyone to forecast or predict when or what the next bubble will look like. We can however be aware that bubbles do form and when valuations depart from the normal logic or state of things, we can be certain that something is about to burst.
There is no harm in investing during a bubble. Just make sure you stay nimble and get out before the bubble bursts!
The Federal Reserve in the United States even with their huge regulatory arm and research departments could not forsee the bubble that resulted in the Global Financial Crisis of 2008.
Alan Greenspan and Ben Bernake constantly downplayed the risk of the subprime bubble that eventually led to a full blown global financial crisis. It seems from this scenario that central banks might not be effective as a central agency to forecast risks and bubbles that are likely to form. Even if they are successful, certain events might still crop up along the way which are totally unexpected and not forecasted by these public servants.
A bubble forms when there is over enthusiasm and an appetite for risk that is not commensurate with returns.
As we move into 2010, bubbles are likely to form again. Here are a few bubbles that I can think of which might bring about the next market correction or "crisis".
1. Gold Bubble. Gold has been increasing in price for the past few years. It seems that a gold bubble is likely especially since investors are so positive about the prospects of gold. The US dollar is indeed falling but that ought not to justify the performance of gold. A gold bubble in the making?
2. China Bubble. We have all heard it for so many years. Everyone is so positive over the economic outlook of China. They have achieved double digit growth and their yuan is undervalued. Could there be something lurking under this China growth engine to pull the entire world economy down? Shoddy accounting practices...dubious growth figures...over optimism..you bet!
3. Commodities bubble. We have heard that the price of garlic is going up in China. In 2008, commodities were also hot. Jim Rogers has been championing the rise of commodities. Oil prices have also been going up. Is this the next bubble in the making if investors continue to be so optimistic about commodities.
Bubbles will continue to be a permanent feature in the stock market. Where there is asymmetric information and money earning opportunities that seem unlimited, bubbles will always form. It is impossible for anyone to forecast or predict when or what the next bubble will look like. We can however be aware that bubbles do form and when valuations depart from the normal logic or state of things, we can be certain that something is about to burst.
There is no harm in investing during a bubble. Just make sure you stay nimble and get out before the bubble bursts!
Singaporeans Keen To Invest Again
It seems like Singaporeans are pretty keen to invest again.
Everybody is now back in the stock market and even the uncles and aunties are shouting BUY BUY BUY! (okay, maybe in another month or two)
Is there cause for panic?
The markets have recovered very well in the recent rally and while there seems to be room for more upside, investors will not be able to get the gains like 2009.
We need to be very SELECTIVE in our stock picking for 2010 in order to make money.
Remember: When everyone is BUYING, it is the best time to SELL. Whenever people are SELLING (2008 and 2009), it is the best time to BUY.
STI is hitting its new 52 week highs and I am quite positive that the market will at least trend up further for this coming quarter.
One must however watch his basket closely as 2010 could prove to be another year which will give us BIG surprises.
The eurozone has unemployment figures that are simply staggering (around 10%) and close to 20% in Spain.
Of course, unemployment rate usually lags behind when an economy starts to recover. But only time will tell.
I hope to write on some potential bubbles that can hit us for the year 2010. Maybe when I find the time to do so =)
Now I am just watching my basket closely and liquidating when the price is right.
Everybody is now back in the stock market and even the uncles and aunties are shouting BUY BUY BUY! (okay, maybe in another month or two)
Is there cause for panic?
The markets have recovered very well in the recent rally and while there seems to be room for more upside, investors will not be able to get the gains like 2009.
We need to be very SELECTIVE in our stock picking for 2010 in order to make money.
Remember: When everyone is BUYING, it is the best time to SELL. Whenever people are SELLING (2008 and 2009), it is the best time to BUY.
STI is hitting its new 52 week highs and I am quite positive that the market will at least trend up further for this coming quarter.
One must however watch his basket closely as 2010 could prove to be another year which will give us BIG surprises.
The eurozone has unemployment figures that are simply staggering (around 10%) and close to 20% in Spain.
Of course, unemployment rate usually lags behind when an economy starts to recover. But only time will tell.
I hope to write on some potential bubbles that can hit us for the year 2010. Maybe when I find the time to do so =)
Now I am just watching my basket closely and liquidating when the price is right.
Updated Stock Portfolio
Here is my updated stock portfolio after selling away 17 lots of First REIT.
1. 12,000 x Ascott REIT
2. 7000 x China Aviation Oil
3. 15,000 x Innotek
4. 35,000 x Kingboard
5. 6,000 x NOL
6, 37,000 x Pac Andes
7. 1,000 x Suntec REIT
8. 11,000 x Unifood
9. 1,500 x Citigroup
1. 12,000 x Ascott REIT
2. 7000 x China Aviation Oil
3. 15,000 x Innotek
4. 35,000 x Kingboard
5. 6,000 x NOL
6, 37,000 x Pac Andes
7. 1,000 x Suntec REIT
8. 11,000 x Unifood
9. 1,500 x Citigroup
Happy & Sad - My First REIT encounter
Yesterday, I made a huge decision and sold off my entire holdings of First REIT at a price of $0.86 (17,000 shares) giving me $14,569.55 in proceeds to deploy elsewhere.
My foray into First REIT first began on 05 Jan 2007.
05 Jan 07 - Buy 2 lots @ $0.765
15 Jan 07 - Buy 5 lots @$0.765
05 Mar 08 - Buy 3 lots @ $0.725
02 Apr 08 - Buy 5 lots @ $0.70
02 Sep 08 - Buy 1 lot @$0.70
14 Oct 08 - Buy 1 lot @$0.425
I sold all on 07 Jan 2010 @$0.86.
Any feelings?
I have been happy about getting the dividends that are given every quarter. I will miss those dividends badly. Everytime, I get the dividends, it brings a smile to my face. Now those days are gone.
When I clicked on the SELL button yesterday, the feeling of earning a nice ROC of 18% also brightened my day for a while. Today, I have no more special feelings about this stock.
Through the 2 over years that I have held on to this stock, it has given me more heartache than joy. The price has always been depressed and hovered below my average buying price. Everytime I looked at the stock market, my heart sank when I noticed that First REIT kept getting cheaper and cheaper.
All in all, I would like to think that First REIT has caused my heart alot more pain than joy.
That is even after I exit this REIT with a return on capital of 18% and not to mention the 2 years of dividends that I have enjoyed.
The reason I sold was because I felt that it was trading quite close to its NAV and even though its fair value should be around $1.00, I still did not see First REIT living up to its expansion plans be it in China or the rest of asia. It has been two long years and they have only expanded into Singapore. I guess any future expansion will increase their gearing and even though that would bring their yield up, their price will be depressed because of the high gearing.
At such a time like this, I felt that it would be good to lock in some gains now.
I do not deny the possibility of re-entering this stock since it is one of my favorites.
My foray into First REIT first began on 05 Jan 2007.
05 Jan 07 - Buy 2 lots @ $0.765
15 Jan 07 - Buy 5 lots @$0.765
05 Mar 08 - Buy 3 lots @ $0.725
02 Apr 08 - Buy 5 lots @ $0.70
02 Sep 08 - Buy 1 lot @$0.70
14 Oct 08 - Buy 1 lot @$0.425
I sold all on 07 Jan 2010 @$0.86.
Any feelings?
I have been happy about getting the dividends that are given every quarter. I will miss those dividends badly. Everytime, I get the dividends, it brings a smile to my face. Now those days are gone.
When I clicked on the SELL button yesterday, the feeling of earning a nice ROC of 18% also brightened my day for a while. Today, I have no more special feelings about this stock.
Through the 2 over years that I have held on to this stock, it has given me more heartache than joy. The price has always been depressed and hovered below my average buying price. Everytime I looked at the stock market, my heart sank when I noticed that First REIT kept getting cheaper and cheaper.
All in all, I would like to think that First REIT has caused my heart alot more pain than joy.
That is even after I exit this REIT with a return on capital of 18% and not to mention the 2 years of dividends that I have enjoyed.
The reason I sold was because I felt that it was trading quite close to its NAV and even though its fair value should be around $1.00, I still did not see First REIT living up to its expansion plans be it in China or the rest of asia. It has been two long years and they have only expanded into Singapore. I guess any future expansion will increase their gearing and even though that would bring their yield up, their price will be depressed because of the high gearing.
At such a time like this, I felt that it would be good to lock in some gains now.
I do not deny the possibility of re-entering this stock since it is one of my favorites.
First REIT Insider Trades & Valuation
Looking at First REIT insider trades, here are my observations:
1. Director Tan Key Poo has been selling in 2009. He has been buying First REIT over the years but in September 2009, his holdings dropped from 947,000 shares to 462,000 shares. Of course, nothing can be determined from this as he could be merely selling to buy himself a new house or car. His average sell price is around $0.68 to $0.69
Now looking at valuation, there are a few ways REITs can be valued.
Firstly is looking at their Net Asset Value. First REIT has a NAV of $0.9255. It is currently trading at $0.86 representing a price/NAV of 0.929. This is still a discount to its NAV but I do not believe that First REIT has ever been valued above it NAV. This could be likely due to its operations which are mainly located in Indonesia.
Secondly, is their dividend yield which is currently 8.802%. Compared to Parkway life REIT which is in a similar industry whose yield is only 5.84%
Thirdly, is based on FFO or Funds From Operation which I guess is their net property income since there does not seem to be any depreciation costs factored in. Looking at their total comprehensive income after tax and their Distributable amount, I cannot understand how their distributable amount to unitholders can be higher than their comprehensive income after tax. Someone care to enlighten me?
Debts and Projects
Based on gearing, it has a relatively low gearing of 15.6% compared to PLife REIT of 23.2%. First REIT has also no refinancing obligations till 2012.
Based on its project pipelines, it is seeking to do improvements to the Adam Road Hospital and Lentor Residences. Its Tech-link healthcare logistics and distribution centre project is also in the pipeline.
This is totally mind boggling. First REIT based on my initial analysis seems to be undervalued based on NAV, pays out a high yield, and has an extremely low gearing. Why is it trading at such a low price? Is there something that I do not understand?
Can the main reason why it is valued as such be due to the fact that a large portion of its asset is located in Indonesia?
Read Related Articles:
1. Dumping One REIT for Another
1. Director Tan Key Poo has been selling in 2009. He has been buying First REIT over the years but in September 2009, his holdings dropped from 947,000 shares to 462,000 shares. Of course, nothing can be determined from this as he could be merely selling to buy himself a new house or car. His average sell price is around $0.68 to $0.69
Now looking at valuation, there are a few ways REITs can be valued.
Firstly is looking at their Net Asset Value. First REIT has a NAV of $0.9255. It is currently trading at $0.86 representing a price/NAV of 0.929. This is still a discount to its NAV but I do not believe that First REIT has ever been valued above it NAV. This could be likely due to its operations which are mainly located in Indonesia.
Secondly, is their dividend yield which is currently 8.802%. Compared to Parkway life REIT which is in a similar industry whose yield is only 5.84%
Thirdly, is based on FFO or Funds From Operation which I guess is their net property income since there does not seem to be any depreciation costs factored in. Looking at their total comprehensive income after tax and their Distributable amount, I cannot understand how their distributable amount to unitholders can be higher than their comprehensive income after tax. Someone care to enlighten me?
Debts and Projects
Based on gearing, it has a relatively low gearing of 15.6% compared to PLife REIT of 23.2%. First REIT has also no refinancing obligations till 2012.
Based on its project pipelines, it is seeking to do improvements to the Adam Road Hospital and Lentor Residences. Its Tech-link healthcare logistics and distribution centre project is also in the pipeline.
This is totally mind boggling. First REIT based on my initial analysis seems to be undervalued based on NAV, pays out a high yield, and has an extremely low gearing. Why is it trading at such a low price? Is there something that I do not understand?
Can the main reason why it is valued as such be due to the fact that a large portion of its asset is located in Indonesia?
Read Related Articles:
1. Dumping One REIT for Another
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