Can’t believe it’s already June! The weather has been so hot and humid with occasional sudden drastic changes from sunny to rainy in the same day. My older boy started falling sick and this spread to my younger boy before reaching my wife, helper and I. Which means more sleepless nights and cranky days for all of us. We are trying to break the vicious cycle but it’s difficult to manage what kind of viral and bacterial infections my older boy picks up from the childcare. Usually the source of our problems so we just have to wait for his immunity to level up before we can address it.
Anyway, I finally have a window to blog on a Sun and it’s going to be an update on what I have been doing financially. Recently, I was able to change my salary crediting to the UOB One bank account and started directing more of my family expenses to the UOB One credit card. Got to say, I have no idea how they are offering such relatively high interest rates and cash rebate rates on the UOB One bank account and credit card respectively. Not sure how long it would last but I have just been working towards building up my UOB One bank account balance to S$100,000. Which is the maximum amount to qualify for the tiered highest interest rate.
My UOB One bank account balance should reach S$100,000 by the end of the month. And I would consider my liquid cash buffer as officially in place and sufficient. It was a totally different story 6 months ago when my cash levels were running very low due to a combination of bad financial decisions and outcomes. Maybe because my family was transitioning to life with 2 kids but I have never felt this vulnerable to negative news like recession & retrenchment fears and unexpected drawdowns. I’m going to remember this experience because it has changed my approach to investments.
I used to be more impatient in deploying my cash and chasing the market to generate a higher return. It felt like I had to do something with my money or I will be left behind. This worked well during the Covid crisis because central banks cut interest rates and turned on the liquidity taps. Got burnt terribly during the Tech and Crypto meltdown crisis along with central banks raising interest rates to combat high inflation. It was just 2 years apart but the profits I made in the 1st event turned into losses in the 2nd event by applying the same investment approach without considering how the environment has changed.
So what am I doing about it now? Just going with the flow. Base interest rate on the UOB One bank account is 3.85% for the first $30,000 and it goes up from there with more deposits. Latest 6-Month T-Bills cut-off yield is 3.84%. Ok then, I will keep stacking cash. I know local Bank Stocks and REITs offer higher yields. If I only want to chase dividends, this would probably be a decent time to start taking positions in them. Maybe I got scared and became more afraid & fearful. Maybe I learnt my lesson and became more experienced & cautious. 2 sides of a coin depending on how you look at it. Only time will tell whether I did the right thing.
For now, my automated Monthly Investment Plans are still increasing my exposure to equities via local and foreign ETFs. Not planning to adjust their investment levels until a significant event happens. Actually, I’m not planning on making any significant investments until a major event happens. Is it because I want to market time? Doesn’t time in the market beat market timing? Actually, for me, I realised over time that I don’t have the temperament and skillset to invest well enough to live off it. No matter how much I practice it. Because there are too few major stress events in my lifespan to test whether my approach really works. I never get the same black swan event twice.
The factors involved and responses by people (whether government, central banks, founders, etc) always cause the environment to be different each time. Sure, greed is always the source of the problem. But it manifests in so many ways that I can’t tell whether it’s because my approach is wrong or because the reactions are not what I expected. And even if I wanted to change my approach, it will take years to properly change my mindset and settle into a comfortable state. By then, who knows what can happen? Probably why they say it takes decades to become a decent (not even good) investor. And that’s if you stick at it, practise and not give up when you get knocked out. Or even have the capital, time and energy to restart?
You know what was my best financial move in the past few years ever since my 1st kid was born? It was moving jobs and increasing my salary income. As long as I keep my job and maintain this increment along with the bonus, in just the next few years, it would outdo any investment efforts I have made in the past decade and a half. My wife landed such a job earlier than me and her salary income is the reason why we could still recover despite my massive investment failures. Perhaps the focus really should be on maximising human capital first (in a job followed by starting a business). Maximising investment capital can come later and in fact, more naturally, when you have learnt to utilise yourself efficiently and effectively. Besides, the more you don’t need something, the easier it comes your way because you are not stressing and thinking about when you will get it. Now, this is something worth working towards for me.
