Spending for Yesterday

This is my spending for yesterday:

Breakfast = $2.90
Groceries = $3.40
Lunch (skipped)
Dinner = $150
Household items = $250

Realised that I have been spending quite a bit on food.

Investments and Dividends for November

Made quite a few investments this month.  Bought into a few stocks/REITs:

• 50,000 shares of Thakral
• 10,000 shares of LMIR
• 20,000 shares of Saizen

Dividends/passive income for November was quite okay.  Roughly $250.  Most of it were contributed by Gamco Global Gold and Natural Trust (GGN) and Armour Residential REIT (ARR). ARR is a mortgage REIT.  Both stock prices hve declined quite a fair bit but I will like to think that my strategy is one where I will diversify a bit into other stocks rather than focusing on just these two stocks.

I also bought some shares of the Coca Cola Company (KO).  

Spending for Today

I read a book about real estate investing and it suggested keeping a budget for one month so that one is aware where all your money is going to.  I don't really live by a budget and I will like to think that I spend my money quite carefully.  But having tracked my daily expenditure for this month, I am quite surprised at what I have discovered.  Will probably share a little of my findings when I am comfortable.

Anyway, here is today's spending:

Breakfast (at home) = Nil
Coffee = $2.20
Lunch = $54.00
Dessert+Coffee = $10
Present/Gift = $23
Dinner (at home) = Nil

Reader's Query

A reader read one of my postings and asked whether he could buy some of the stocks that were listed in that posting.

The short answer to his query is "No".

Let me share why I might from time to time share what is on my watchlist or what I have already bought into my portfolio.  It is basically to let readers know what stocks I own and what stocks I am watching so that they know I have vested interest when I am talking about those stocks.  In a sense, I am also trying to get some feedback and thoughts from readers on why they think certain stocks may or may not be good investments.

Spending for Today

Let's take a look at my spending today.

Breakfast = $3.20
Lunch = $4.75
Coffee = $1.50
Dinner (at Home)
Dessert + Tea = $11.60

Total spending for the day is slightly over $20.  Of course, I did not include transportation costs.  But a quick look suggests that all my expenditure went into food.

Ascott REIT - Presentation by CEO Tay Boon Hwee

CEO Tay Boon Hwee of Ascott REIT gives a presentation and gives a good detailed explanation of Ascott REIT's business and how it differs from a hotel and a normal condominium.  Here are the few points that were made during the video:

• Sponsor of Ascott REIT is Ascott Limited.  Ascott Ltd is o world's largest serviced residences owner and operator.
• 7260 units across 24 cities in 12 countries in Asia Pacific and Europe
• Operates under the brands of The Ascott Residence, Citadines and Somerset Residence
• $2.9bil portfolio
• Major shareholder is Capitaland which owns 49% of Ascott REIT

What is a serviced residence?

A hybrid between hotel and apartment.  Provides the comforts of an apartment and essential services one will expect to see at a hotel. like laundry, daily housekeeping and limited F&B services.  

Key differences  lies in the lease structure.  Hotels cater for short term stay ranging from one day to one or two weeks.  Target audience is also the leisure market and the corporate market. Apartment for rents on the otherhand are typically rented out for at least one year.  Serviced residence thus are able to capitalise on the gap, focusing on the long stay segment,  looking at between stays of 1 month to 1 year stay.  The focus is also on the corporate market and not the leisure market.

Ascott REIT's weighted average length of stay is 4 to 5 months.  This provides stability to the REIT.  It is also less affected by the seasonal demands one would expect arising from tourists.

Serviced residences also only cater 1-2 F&B facilities to the guests and not to the public.  They also do not include banquet halls or function room.

Serviced residence comprises studio apartments, 1/2/3 bedroom.  This can be from 30 sqm to even 100 over sqm.  All apartment units come with fully equipped kitchen facilities.

Hotel staff to room ratio is around 1:1

Serviced Residence staff to room ration is around 0.3~0.5: 1

Sources of Income for Ascott

Broadly classified into 3 categories.

Firstly, properties under management contract.  Ascott REIT enters into a management contract with the operator (Ascott) to maange and operate the property on its behalf. A property management fee is paid in return to Ascott. which is tied to gross revenue and gross operating profit.  18 of its properties (mainly located in Asia Pacific) are under this arrangement.

Secondly, are properties on master leases.  Ascott REIT enters into a master lease agreement with the lesse regardless of the performance of the property.  A fixed rental income is given and this provides stability.  This is mainly in Europe (France & Germany), Philippines and Singapore.

Thirdly, are properties on management contract with minimum income.  Similar to the first category except that a minimum income is guaranteed.

[Disclaimer:  Writer owns shares in Ascott REIT]

Three Great Ideas to Spend Your Annual Bonus

It did not seem too long ago that I was writing about what I should do with my annual bonus.  Most people will be getting their annual bonus in December and I thought that it will be timely to look at a few great ideas on how to spend one's annual bonus.

1.  Insurance

Most people are under-insured.  But one should also be careful not to be over-insured or to be overpaying for insurance.  Some time back, I wrote about one of the cheaper if not cheapest insurance plan in town.  It is NTUC's i-term insurance.  I don't work for NTUC so I can't vouch for this plan.  Neither do I own this insurance plan.  But looking at the rates, it definitely looks like one of the cheaper insurance options around.

Another cheap insurance plan one could consider (if you are a national serviceman or woman) is the SAF Group Term Insurance plan.  Just recently, Aviva has increased the maximum coverage from $600,000 to $1million.  Another thing I like about this group term plan is that it gives rebates.  I am currently covered under this plan and am considering whether to increase my coverage.

I also wrote about whether one is ready to take charge of one's healthcare costs and you might want to consider reading it especially if you are a Singaporean.

Of course, before you dive in and go out shopping for an insurance policy, I must caveat that everyone has to do their due diligence.  In fact, during one of the polls conducted on this blog,  the poll results indicated that many people considered insurance products as toxic investments.  Of course, there is nothing scientific in the way I conducted the poll and it is just the opinion of readers.  I also recommend the following articles on insurance:

• Can You Trust Your Financial Planner?
• Surrendering Insurance Policies?
• AIA Insurance Agent Scam
• Beware of this Insurance Agent

2.  Invest

Of course, besides saving up your annual bonus, one could also chose to invest it in instruments that could potentially give you a higher return than the interests rates offered by banks (can someone remind me again what is the interest rates banks are offering again?) 

Most readers should know that I invest mainly for income with capital gains as a secondary goal.  To understand a little more about income investing, I would refer you to some of the previous articles that I have written:

• High Dividend Yield Stocks
• Real Estate Investment Trusts (REITs)
• Canadian Royalty Trusts (Canroys) - do note that this article was written before the tax changes kicked in.
• Rental Property
• Investing in Bonds

For myself, I am looking at a few stocks that pay good dividends.  On my current watchlist are Sabana REIT, Saizen REIT, Ascott REIT, Far East Hospitality Trust, Lippo Malls Indonesian Retail Trust, SingTel, Capitaland, United Engineers.

3.  Pay off Your Debts

This is self-explanatory.  If you have credit card debt, you should be paying that off before even thinking of investing.  The interest rates on any outstanding credit card bills is just too high to justify you not paying off that debt first.  

For others, you might want to consider making pre-payments or full redemptions of other outstanding loans (e.g. auto loan, mortgages).