Financial Freedom

Overview for January 2012

The first month of 2012 is over. January has been pretty uneventful for me except for quite a few large ticket items that I have spent on. Passive income and dividends were $0 but I am expecting a bumper crop in the month of February since that will be when all the dividends from my REITs will most probably come in.

Expenditure wise, I have probably burnt some holes in my pocket from some large ticket items:

Car Servicing. Sent my car for servicing and maintenance during the weekend. It was long overdue and so, since I was free, decided that it will be a good time to spruce the car up a bit. The costs added up quite a fair bit - over $560++. That was for a 36 point check (normal servicing, don't ask me what the checks were), changing a new battery, change of transmission oil and new wipers to go along with it.

Term Insurance. Just made annual payment of S$347.50 for my wife's coverage. Necessary expenditure but expensive nonetheless.

Investments wise:

Invested in First REIT mainly for dividend income. First REIT is listed on the Singapore stock exchange and holds hospitals and nursing homes in various countries. It gives a quarterly distribution of around 1.9 cents per unit.
Invested in Gamco Global Gold &Natural Resource Trust (GGN) - provides US$14 monthly dividends. Yet to receive the first batch of dividends for January since it usually takes some time before the cheque is posted. Expecting this to come in for the month of Feb 2012.

Blogging wise:

Started an ad campaign and have spent close to US$100 on advertisements and promotional costs for this site.
Also exploring new ways to generate content (either by hiring a freelance writer or through other means).

Best Steak in Singapore?

Just ate at Astons today and felt that I had just eaten one of the best steaks in Singapore. Okay, I am pretty certain that there are better steaks around but this has to be the cheapest, most affordable and tastiest steak that I have eaten.

For those of you who know Astons, it is an unassuming Western restaurant that supposedly started out in a hawker(?) or foodcourt(?) somewhere in Singapore. It slowly expanded and has several restaurants in Singapore. It is a little like the Botak Jones stalls except that it is much better.

Ordering the Steak

I don't usually order steak when I eat from western food stalls in food courts or hawker centers. The quality overall has been quite bad - at least based from my experience. Many of the steaks are from dubious cuts and are either overcooked, tough or tasteless.

However, I decided to try the steak at Astons today. They are after all quite well-known for their steaks (well, at least if I remember the food reviews correctly). The last few occasions, I actually ate the burger so was thinking whether today was the day that I ought to jump out of my "comfort" zone.

I ordered a prime ribeye for $13.90. The two side orders I chose were the coleslaw and onion rings. Service was prompt and the dishes were ready in under 15 mins.

My Verdict

Loved the steak. It was tender and cooked to perfection. Other than the mushroom sauce which they seem to drizzle on everything (including their burgers), everything was perfect. The onion rings were nice and crispy, the coleslaw was "oh so delicious"... In fact, I wolfed down both the side orders before finishing the steak.

Will definitely eat it again if I visit Astons! Yum yum!

Saving for Retirement at 30

It’s starting to become the dream of more and more people, to be able to retire just after you leave your 20’s. So saving for retirement at 30 is sort of the new thing, the thing that many young professionals strive for and something that can be in the back of people’s mind when they choose their occupation. The better job, the more money, and the earlier they can retire.

In a fluctuating world economy you have to take several things in to consideration if you’re seriously thinking about going in to retirement when you’re in your early 30’s. First of all, you need to look at how much money you can make in a month and in a year from your occupation. After that, the amount you can spare for an investment portfolio.

Let’s face it, unless you get a job that pays 8-10 thousand US Dollars every month you won’t have enough to get by for the next 50 years when you turn 30. So the best way of increasing your money if you have a steady job is by getting an investment portfolio. Invest your money in stocks, bare bonds, commodities, oil, gold and silver, and currency to get the best rate of return on your money.

Saving up for retirement at 30 with the help of an investment portfolio isn’t the easiest thing if you haven’t got
an idea how these things work. Then what you can do is get an investment adviser that can give you the best advice on where to invest your money for the best return.

We said previously that the money has to last for 50 years, and that’s true. The average life of a human is around 80 years, so if you’re looking at retiring at 30 you have to save up enough money for the coming 50 years. Now during your 20’s it is all about building your capital, that means a higher risk on your investments and putting more money in to markets that can have a large pay off.

When you decide to retire you will be thinking about keeping your capital, so making safe investments where you will have a much lower pay off rate but much more stability.

The next thing to do is to choose where you’d like to retire to. The most common and cheapest places would be the Philippines, Thailand and even Singapore. South East Asia is becoming a more and more popular destination for Asians looking to retire early. Find out basic costs such as, average rent per month, health care, food, transportation and all the other things that you will spend money on in a month. When you find a reasonable estimate of what you need to get on well every month it’s time to start doing a bit of math.

Take your average monthly spending and multiply by 12. That’ll give you your annual spending. Take your annual spending and multiply with 50 and you get an estimate of what you’ll need to get by for the next 50 years. So for example in Thailand you might need 50 000 Baths per month, 600 000 Bath in one year and 30 000 000 Bath for the next 50 years. A way to save on your monthly cost is to purchase a house or apartment when you move over but that would mean you’d have to increase what you need before you actually move.

[This article is a guest post by a writer in Philippines. Read more about retirement planning]

First REIT and Ascott REIT Declare Dividends

First REIT just declared distribution/dividends of 1.93 cents per share. A quick look at First REIT's dividend history gives me some sort of confidence to enter this REIT again. I had previously sold off my entire shareholdings in it but have recently entered into it again buying 10 lots of it recently. Since the distribution is paid quarterly, it looks like I will be receiving a small bonus every 3 months. Not too bad for some passive income. Based on my 10,000 shares, I figure that I will be receiving around $193 for Feb 2012.

Ascott REIT had also declared their semi annual dividends of slightly over 4 cents per share. I currently hold 15 lots in Ascott REIT so that should also provide me with a neat sum of around $600 for Feb 2012.

I am also still waiting for my dividends from Gamco Global Gold Trust (GGN). This is a monthly dividend stock and though the dividend is paid on 24 Jan, I figure that I will only receive the cheque in late Jan or early Feb.

Investing in Real Estate

Real estate is usually one of the most expensive purchases that a person ever makes. The cost of real estate has risen significantly worldwide over the last decade until the economic problems came to life. Even now that housing prices have stabilized, they are still much higher than at the start of the last decade.

This can make it difficult for people to buy or invest in real estate, but it is great for anyone who bought before the prices started to rise. As any loans on the property are paid off over time, the cost of living there will be limited to any taxes and repair bills.

Advantages of Real Estate

As well as providing you with somewhere to live, or work, real estate can really work as an investment. If you own housing, you can rent it out to bring in a nice amount of money every month to supplement your salary. You will have to pay out for any repairs, and bad tenants can do a lot of damage, but many landlords have an agency that takes care of all that for you. Another advantage of property is the high cost of it. It might cost you a lot of money to buy, but you can usually sell it for a profit. Many landlords accumulate a portfolio of property that they use as a retirement fund, and sell it off when it is time to retire.

Disadvantages

Real estate is really expensive, and it can be difficult to borrow the money you need to buy a property. This can make it very difficult to start investing in real estate, although treating it like a business and presenting a solid plan to your bank may help if you want an investment property. A lot of people also end up asset rich and cash poor.

Choosing Real Estate

The hard part is choosing which real estate to invest in. Your intended use of the property will determine which is suitable. A house for your family might be a completely different choice to a property intended for rental to the holiday market in a resort area for example.

If you have the necessary skills, then you can make a lot of money by buying properties that need renovating and performing the necessary repairs. Your skills will enable you to perform the repairs quickly and cheaply and you can turn around real estate like this for a profit within a short space of time.

Building and maintenance skills are also useful if you want to be a landlord. By doing the repairs yourself it will save on the costs of paying for skilled craftsmen. It will also save money if you can manage the real estate yourself and deal with the tenants, but many people prefer to use an agency to do that.

Real estate can be a great property investment that can make a great profit, but can lead to large losses. Anyone considering property as an investment needs to research the market properly and invest in the right property in the best location they can afford.

[This is a guest post]

How Much of Salary to Save

Based on a recent online survey, it was found that 2 out of 3 Singapore workers were saving no more than 20 per cent of their monthly salary. How much salary do I save?

I figured that I am currently saving about 30% of my monthly salary. This goes into savings plans, bank deposits or stock investments. This is probably possible for me because I have kept my "wants" to the bare minimal. Apart from the occasional dining at restaurants, I probably do not spend much on anything else. No gadgets, clothes or whatever. So most of my expenditure is really going into my needs and paying for the bare essentials.

Based on my rough calculations, I also figure that I am possibly able to save as much as 50% of my salary if I really want to. But that will really mean cutting back on many of the "luxury" items that I can afford. Saving comes really easy to me as I am pretty much of a saver rather than a spender. I do not see the need to have or own the latest toys and gizmos. Being frugal is perhaps part of me =) And that is perhaps why I have written posts like:

As many people have always advised, it really is not about how much you save. The most important thing is to get into the habit of saving. Try to build up an emergency fund and also set up a disciplined savings plan for retirement. Thereafter, it should get quite easy as you discover more and more ways to save money. Like they say, the first step is always the hardest.

What Should I Do With My Ang Baos?

Recently, I asked readers for their views on what should I do with my annual bonus. This was really triggered by reading the newspapers and learning that most Singaporeans actually intend to spend their annual bonuses instead of saving it.

Since the Lunar New Year is upon us, I am sure many readers are still in the privileged group (i.e. unmarried) and are still entitled to collect red packets (or what we commonly call as Ang Baos in Mandarin). Again, I post the same question: What will you do with the money in your red packet?

Or for those of you who are no longer entitled to collect red packets, what do you wish that the receivers of your red packets will use the money for?

At the same time, I will like to wish all readers a Happy Lunar New Year!