Finance Smiths

Having the right people around you

03.05.2017 by Finance Smiths //

I just realised my past few posts have been about our investment transactions, dividend income and interest income for the month of Feb 2017. I decided against writing a net worth post this time round since I just about had enough of reporting on another financial status update for the month of Feb 2017. Might be a good idea to space them out and mix them up with other types of posts so I don’t bore myself.

Anyway, this post was inspired by my experience at two different gatherings over the last few weekends. Let’s give them more content by providing a summary of what happened at these gatherings.

Gathering 1 with Group A friends

Caught up on details of our personal life
Updated each other on where we were working at and where our partners were working at as well
Discussed salary ranges in different industries
Shared investment progress and utilisation of cash approach
Talked about the type of cars we were driving if applicable and COE price trends
Compared where we were staying at and the purchase prices of our properties (including a debate about where the residential property market is headed)
Whether we are planning to have kids soon

Gathering 2 with Group B friends

Shared our recent travel experiences and the things we did (including funny anecdotes of stupid things and screw-ups that happened on the trips)
Discussion on the various types of meats, red and white wines we brought back to Singapore
Debated the pros and cons of moving to another country or back to Australia (including the impact on kids)
Talked about casual and fine dining restaurants in Singapore and overseas we can visit and celebrate special occasions in
Concerns and worries about work, lifestyle, how to and what to invest in Singapore

Group A was made up of SG friends who studied, worked and lived in SG only. Group B was made up of SG and non-SG friends who studied, worked and lived overseas and in SG. This is not going to be one of those posts that slam the SG versus non-SG nationality and experience. We know both groups of friends well but hang out with the second group more often.

As we get older, we notice that our groups of good friends start to shrink. We interact more with friends that we have more shared/common values, beliefs, experiences, interests and directions headed in. Human nature I guess. After all, we are constantly changing and evolving, which means that our circles of friends will also alter over time.

When we hang out with Group A, life in Singapore feels like a competition. Our performance is compared to others and evaluated on a number of perceived benchmarks. It’s easy to feel stressed and behind in our career and life when hanging out with this group. Nobody talks much about the mistakes they make for fear of being judged. If you are asking why we continue to met up with this group, it’s because we have been friends for a long time and enjoy each other’s company despite the negative drawbacks at times. Besides, we can actually discuss and share our personal finance & investment strategies and performances in detail with this group. We probably pick up and learn the most useful & practical tips here. Talk about expanding our knowledge base.

Group B is a lot more fun to hang out with and we laugh & talk about everything non-serious in life. This is where we have barbeques, wine and home-cooked dinner sessions etc. Life in Singapore feels like we are back in Australia again. Whereby our jobs and salaries, investment assets we own, properties we live in and cars we drive are used less as a gauge of who and what we are. But sometimes, we feel like we can never broach serious life topics with this group about financial and non-financial stuff that matter to us. Which can result in certain important issues never being addressed.

I reckon having both groups of friends are essential to leading a more balanced, fulfilled and successful life. After all, you can always come up with a smaller Group C of friends that have attributes of both Group A and B. Actually, we are already starting to form a group like this and we hope to remain lifelong friends wherever we are.

Investment transactions for Feb 2017

03.02.2017 by Finance Smiths //

I’m going to first address the updates to the OCBC 360 bank account from 1 Apr 2017. As bank profits fall, one of the ways they can reduce expenses is by lowering the interest payments on the high interest bank accounts. This can be done easily by adjusting the interest rate tiers downwards that are earned on the various requirements to be met with one month’s notice and especially after they have captured the customer market share. After all, individual customers are less likely to switch bank accounts the longer they hold on to them or have existing relationships with the specific banks.

As a bank employee, I can assure you that protecting bank profits come first and protecting customer interests come second. Which is why it was always a matter of time before the interest rate tiers on high interest bank accounts are reduced or the requirements to earn them become more stringent. Hence, the importance of being willing to shop around for better deals when these negative changes become unreasonable. This is the impact to us from the updates to the OCBC 360 bank account from 1 Apr 2017:

I will have to increase the balance in my OCBC 360 bank account to S$70,000 from S$60,000 to maximise the bonus interest earned. I can redirect the required S$10,000 from my Stan Chart or CIMB bank account. But I don’t like increasing my cash holdings with any one particular bank just to get to a worse outcome of earning less interest income than before.
No change to salary crediting bonus interest of 1.2%p.a.
Reduction of both the payment of 3 bills online/GIRO bonus interest and OCBC credit card spend of at least S$500 bonus interest from 0.5%p.a. to 0.3%p.a.
Monthly interest earned from OCBC 360 bank account will decrease from S$110 to S$105 i.e. by S$5 with the above changes.

It’s annoying but not enough to make me switch from my OCBC 360 bank account to another high interest bank account. After all, we already have 2 UOB One bank accounts earning the maximum bonus interest. Plus I like the OCBC 365 credit card since the higher cash rebates on dining, groceries and online spending suit our lifestyle. In conclusion, we probably won’t make any changes for now but I will be monitoring this situation closely.

Time to get back on track about the regular monthly post on investment transactions made for the month of Feb 2017. Nothing eventful happened other than me watching our portfolio value rise from the run-up in the global and local stock markets. This hurts our automated investing buying prices of the ETFs, which were higher than the previous month. A good reminder that we will be net buyers of equities for as long as we remain employed and will benefit more from downward trends in stock markets. Nothing to be happy or rejoice about with the recent bull run.

Automated Investing

Maybank Kim Eng Monthly Investment Plan

Buy 31 units of SPDR STI ETF (ES3 on SGX) at S$3.07 per unit on 8 Feb 2017
Transaction cost of S$1

POSB Invest-Saver

Buy 31 units of Nikko AM STI ETF (G3B on SGX) at S$3.14 per unit on 14 Feb 2017
Transaction cost of S$1

OCBC Blue Chip Investment Plan

Buy 470 units of Nikko AM STI ETF (G3B on SGX) at S$3.18 per unit on 22 Feb 2017
Transaction cost of S$5

POSB Invest-Saver

Buy 86 units of ABF SG Bond ETF (A35 on SGX) at S$1.148 per unit on 27 Feb 2017
Transaction cost of S$0.50

Total invested amount in ETFs of about S$1,800 using Automated Investing for Feb 2017. All of which goes into growing my wife’s ETF portfolio.

Manual Investing

Nil for Feb 2017.

Dividend income for Feb 2017

03.01.2017 by Finance Smiths //

I was reviewing the Dividends section of my SGXCafe portfolio and was happy to see the dividends to be collected these few months from various stocks and ETFs. They are more than the amounts I collected the same time last year and I’m pleased with the progress we have made. Slow and steady but definitely on an upwards trend. Let’s have a look at the dividends we received in Feb 2017.

SGX

SPDR STI ETF (ES3): S$281
Parkway Life REIT (C2PU): S$24
CapitaCommercial Trust (C61U): S$155

Dividend income for Feb 2017: S$460

Last year in Feb 2016, our dividend income was S$431. Which means there has been an increase of about 6.73%. Not bad considering we have only increased our position in the SPDR STI ETF (ES3) via manual purchases and automatic investments (Maybank Kim Eng Monthly Investment Plan).

It’s the end of the month and I will be updating our portfolio, net worth and expense figures on the blog soon. This has become a monthly exercise for me and I quite enjoy the routine, especially when the values have increased from the previous month. In any case, it’s always useful to monitor and track your progress in these areas regularly, whether for the better or for the worst. It would give you a good idea of where you are headed and whether adjustments or changes to your investing strategy, work & lifestyle will need to be made.

Anyway, I have been thinking about some of the topics that I can write about. And one that has surfaced recently in relation to the empowerment of women is due to a number of posts from our local bloggers:

It’s about The Future Is Female Conference taking place on Sat 8 Apr 2017, which is organised by the The New Savvy and supported by the Singapore Exchange (SGX). You can refer to the conference website and blog posts above for more details.

I am always supportive of efforts to encourage the empowerment of women. But I must admit that I’m not a big fan of conferences. The ticket price for The Future Is Female Conference is quite high at about S$200 even after applying the promotion code. The 45 mins timeslot for each session of a wide range of topics is tight and I doubt you can get much depth of discussion. The list of speakers is long, impressive and features successful male & female executives, professionals, entrepreneurs etc.

Which makes you wonder how much time does each of them get to speak and draw on their unique experiences. Unless you apply a panel discussion format, which might cause the conference to become a networking session. The conference is targeted at women that find it challenging to manage their personal finances and investments or have no idea where to even start. I actually find the agenda items & topics to be relevant & useful but I struggle to understand how the speakers and their backgrounds fit into them. These speakers are likely to have high levels of personal motivation and drive to get to where they currently are. Even more so if they have experienced tough failures along the way. Would the conference attendees relate to them? Especially when chances are the conference attendees will likely come from a variety of backgrounds with different experiences. Sadly, I would never know.

I believe strongly in the empowerment of women and I’m disappointed to be locked out of such conversations that would have offered valuable insights into how women think and approach their personal finances, investments, careers, businesses and families. Things that I could have learnt and improved on as I continue to find ways to support my wife in her life, career & endeavours in this increasingly hostile world. Plus I might need even more help when we set up a family in the future. I have recommended this conference to my wife and her female colleagues & friends but the level of interest is low. After all, why would they pay S$200 to attend a full-day conference on a precious weekend to learn about things they can read online with people they might never meet again. More importantly, how can I successfully recommend a product from a provider that doesn’t seem to welcome me as a customer?