We just filed our Year of Assessment (YA) 2017 income tax returns for the year 1 Jan 2016 to 31 Dec 2016. Total tax payable for the both of us came up to about S$11,000. Again, we have chosen to pay our income taxes over the next year by 12 interest-free monthly instalments. We prefer not to have a big cashflow drain of a one-time deduction and prefer the more manageable and smaller monthly cashflow impact using the instalments.
If you haven’t noticed by now, I have updated the Portfolio, Net Worth, Passive Income and Expense pages of the blog. They are less cluttered and the layouts are cleaner. Although less data is being shown, you will see that a more accurate picture of our personal finances has been presented if you look closely enough. These changes stem from the recent significant amendments I have made to our Google Sheet financial spreadsheets. Essentially, I removed the excessive data analytics and information I was capturing so it becomes simpler to read, understand and update going forward.
Anyway, I will take this opportunity to go through the changes I have made to the relevant pages of the blog as part of the Mar 2017 Net Worth Update. I don’t remember doing a Net Worth Update post for Feb 2017 so it’s good timing. Hope you find it useful!
SGXCafe Portfolio: Mar 2017 – S$131,150
I have shared our SG portfolio from SGXCafe consisting of Singapore equities (ETFs & stocks) and bonds listed on the SGX. It shows our SG portfolio in such detail that there’s no point in me adding on to it. And you can always click into the links provided to find out more about our SG portfolio on SGXCafe. I also considered tracking the month to month movements but doubt it will be useful if the information is already captured in the Net Worth figure.
Foreign ETF Portfolio: Mar 2017 – S$26,044
The Foreign ETF Portfolio snippet is from Google Sheet. It doesn’t show the exact Vanguard ETF holdings but breaks them down by type:
- Global Equity
- Europe Equity
- Emerging Markets Equity
- Developed Asia Pacific Equity
- US Equity
- Global Bond
The value hasn’t changed much this year since I have been refraining from buying the Vanguard ETFs due to the run-up in global equity markets. It would be useful if I can implement a Dollar Cost Averaging (DCA) strategy to the Foreign ETF Portfolio as well. But the transaction costs and foreign currency consideration make it difficult to implement. This is something the robo-advisory portfolio can address when the service is available in the future.
Net Worth: Mar 2017 – S$200,840
Actual numbers are being shown for the first time. I was getting tired of maintaining 2 sets of accounts on Google Sheet to avoid revealing too much financial information on the blog. And I figured I might as well reduce the line items, keep it high level and keep 1 set of actual accounts only. I’m guessing this revised breakdown explains a lot of the inconsistencies that were showing up previously.
Anyway, I decided to remove any portion of the market value of our apartment in Singapore from the net worth calculation. The longer I track our financial progress, the more I became convinced that home equity is doing nothing but inflating our asset values. As long as the apartment is for home ownership and not rental (i.e. does not produce rental income), its market value will be excluded from our net worth. However, I will probably include the market value of an apartment that produces rental income in our net worth since it is an asset I can actually sell to realise the value. Just haven’t bought such an apartment yet.
Passive income and expense
Dividend income is expected to decrease and interest income is expected to increase in the short term. While we gradually restructure our investment portfolios to hold more ETFs by slowly re-investing the proceeds of individual stocks we sold recently. Our savings rate is rising and the cash savings are being used for monthly investments and retained as cash positions in our asset portfolio.
Why hold 45% of our asset portfolio as cash?
The most important thing about having more cash than necessary when investing is that it pays the bills and keeps you from having to sell your investment portfolio during times of retrenchment, personal or family medical emergency etc. Especially when bad times like these coincide with a market downturn and bear market.
The next most important thing about having a high level of cash is what it can offer you. And I’m not referring to the opportunity to buy even more financial assets such as equities and bonds or real assets such as property. It actually allows you to be more patient and take less investing risks over time. It also gives you more breathing space to make mistakes and improve on your cash deployment & investing strategy with less adverse consequences. In short, you are less likely to crash and burn everything you have i.e. you get to insert coin and try again.