Happy CNY everyone! I had a half day today in the office and left the office at about 1pm. Went out with my wife to have lunch and do some shopping before heading over to my parent’s place for reunion dinner. We even had one of our cousins from Malaysia join us this year because she is working in Singapore until later in the year when she heads back for university studies. The reunion dinner is my favourite part of CNY. That’s when we gather with our respective families to have a proper sit-down dinner to chat and catch up. Let’s not forget the snacks as well!

Anyway, I figured I should write this post before things get busy this long weekend. What with the visiting of relatives and meeting up with friends. I don’t think I will be making any investment purchases next Tues on the last day of Jan 2017 and right after coming back from the CNY break. Probably won’t be in the mood to do anything that day. Here goes our investment transactions for Jan 2017.

Automated Investing

Maybank Kim Eng Monthly Investment Plan

• Buy 32 units of SPDR STI ETF (ES3 on SGX) at S$3.04 per unit on 9 Jan 2017
• Transaction cost of S$1

POSB Invest-Saver

• Buy 32 units of Nikko AM STI ETF (G3B on SGX) at S$3.08 per unit on 13 Jan 2017
• Transaction cost of S$1

OCBC Blue Chip Investment Plan

• Buy 484 units of Nikko AM STI ETF (G3B on SGX) at S$3.09 per unit on 23 Jan 2017
• Transaction cost of S$5

POSB Invest-Saver

• Buy 87 units of ABF SG Bond ETF (A35 on SGX) at S$1.135 per unit on 25 Jan 2017
• Transaction cost of S$0.50

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

Manual Investing

Nil for Jan 2017.

I have been receiving a number of interesting questions from readers that I reckon might be useful to provide my responses in this post. Just as a way to share my views.

1. Why are you not writing about practical tips on how to earn more money?

There’s plenty of online material that can address this question. Those articles and blog posts are better researched and discusses the practical steps you can take to increase your income. I have tried to write about this topic before but scratched the post because it was starting to become generic with no real input from me. The result might have been better if I was more specific. Let’s give it a try here and see whether you think it works. By the way, this is all coming form our personal experiences.

Don’t be afraid to try new things and change your environment. My wife and I stayed on to work in Australia after graduating despite most of our peers returning to Singapore (New thing example 1). We didn’t want the first few years of our working life to be in an intense, high stress & pressure working environment. We spent 2 years working in Melbourne and picked up job skills at our own pace. We moved to Sydney to work for another 2 years to challenge ourselves despite settling into a comfortable routine in Melbourne (Change your environment example 1). This is where we matured the most in our time spent overseas.

Trust yourself to make it or make the mistake. When we wanted to return to Singapore to work and live, most people we spoke to thought it was a bad idea. Some thought we won’t be able to survive working in Singapore after spending such a long time studying, working and living in Australia. They were almost right (Make the mistake example 1). We really struggled in our first year back in Singapore. Work was stressful, colleagues were more demanding and meaner, weather was bad, not much to do over the weekends etc. We actually considered returning to Australia since things weren’t working out. But day by day, life got better as we adjusted. Nothing inspirational here. Just took us a long time to get used to it. (Somewhat make it example 1).

One of these days, I might write about our work experiences in the accounting and banking industries. Maybe it might help in giving you an idea of what’s the work environment, people and pay like. But don’t forget that it’s really your attitude and actions that determine your long term career path. Which is why most of the advice you find on earning more money has to do with changing what & how you think, feel and do. Easier said than done.

2. Why are your expenses so high and have you tried to lower your spending?

Ah, one of the main reasons why I don’t write about how to save more money. It’s something we are not good at. But having and chasing for the decent pay at our jobs actually contributed to our high spending. I will explain to you the fundamental problem with us of earning more money from having a higher salary income. As you work hard and smart like you were advised to, your position and salary rises. But your stress level also increases along with the higher expectations of you. Resting at home no longer works as a stress reliever because you need something to take your mind off work.

You try to manage the stress levels by exercising, going out more, just doing something or anything, and find that you start to have less personal time and rest. Funny how things work. The modern world has also become a never-ending competition of whose life is better. You try to screen out and not pay attention to what and how other people are doing. Difficult to do when everything is happening in your face and you can read about everything else online. So you spend on things, experiences to have fun, relax and feel better while pushing yourself hard for the next pay rise. This happened to us last year and just look at our spending numbers for 2016.

We are trying to break this damaging relationship between having a higher salary income and higher spending. If you are one of those people that can achieve a high salary income and keep your expenses low, that would be a fantastic position to be in. We are still working on balancing our priorities and managing the aforementioned self-destructive cycle. Wish us luck!

New self-hosted WordPress blog, domain and direction

If you haven’t noticed, this blog has been moved from Blogger to a self-hosted WordPress platform. After about a year of writing and wanting to continue with this personal interest & hobby of mine, I decided to spend some money on it. Have my own domain name and improve the design of the blog. I went with HostGator as my web host, Genesis Framework and Child Theme for the WordPress blog. There’s plenty of online material that guided me through the entire process of setting up the self-hosted WordPress blog and shifting my posts across from Blogger.

It was a slow process (about 2 weeks) to get to this stage as I was busy with work and personal commitments, hence the lack of new posts. But I’m happy to finally start writing again!  It also gave me time to think about the direction I want to head in with the blog for this year. In 2016, I was almost always writing from the perspective of my wife and I taking into account our personal circumstances. Not the best way to draw or even help readers since they might not identify with our situation. But people still bothered to read my posts and follow what I had to say.

Now that I have a more long-term perspective on this blog, I intend to improve my writing style so that readers can actually benefit from the content. It should take into account a wider range of circumstances, drawing from our current & past experiences, what we should have done, and from the experiences of others. It should also touch on more topics and I’m hoping these efforts translate into longer & better structured posts. But I know I have to change as well and to be able to do it – I should be more open to collaborations, communicate with readers & other bloggers and attend more events. You will notice I am terrible at replying emails & comments last year but I’m aiming to get better at it this year.

It’s one of the main reasons I changed the blog name from The Finance Smith to Finance Smiths. A reminder that I’m no longer writing for myself and I should consider others that are taking the time to read these posts. It’s the only way forward for the blog to become more sustainable, interesting and with the ability to evolve over a long period of time. This is my personal goal for the blog in 2017 and I shall evaluate my performance in this area at the end of the year. I can already see the challenges ahead with our ever increasing work and personal commitments but I will try hard to work towards and achieve it.

My wife’s ETF portfolio

As my first step, I know I haven’t been clear about the ETF portfolio that is being built for my wife. I have mentioned before that a ETF portfolio suits an investor that prefers to automate his/her monthly investments with minimal manual purchases, has a wide range of savings available each month to invest (from a little to a lot), does not like to do regular research in relation to equity & bond markets or monitor the financial news often.

My wife is like that in many ways and it’s not a bad thing. The important thing is to build an investment portfolio with an approach that suits her. Besides, it’s not that my wife is not interested in making money and what it can do for her, it’s just that she is not as interested in investing. This is why I have always believed my wife makes for the ideal ETF investor. Consistency in application, does not like switching investment approaches, no temptation to buy individual stocks, ever growing portfolio from the cash injections and minimal monitoring.

It’s probably not surprising but I have readers that are interested in the constituents of this ETF portfolio, how it’s being built, the rate it’s growing and the dividends received. I have to admit that even though my portfolio includes ETFs, it’s overweight on individual stocks and the ETFs overlap with each other. However, we were able to apply a simpler, clearer and more disciplined approach to my wife’s ETF portfolio. I guess it’s time to provide more specifics and a better context to what I’m talking about. As such, I have included a snapshot of my wife’s ETF portfolio in the Portfolio page of the blog.

ETF Portfolio Makeup

These are the constituents of the portfolio and the number of units, total market value, proportion and type are also tracked in the snapshot:

• Nikko AM STI ETF (G3B on SGX) – Automatic monthly purchase via POSB Invest Saver and OCBC Blue Chip Investment Plan
• SPDR STI ETF (ES3 on SGX) – Manual purchase via Stan Chart Online Trading Platform
• Phillip SGX APAC REIT ETF S$ (BYJ on SGX) – Manual purchase via Stan Chart Online Trading Platform
• Vanguard FTSE All-World High Dividend Yield UCITS ETF (VHYD on LSE) – Manual purchase via Stan Chart Online Trading Platform
• ABF Singapore Bond Index Fund (A35 on SGX) – Automatic monthly purchase via POSB Invest Saver

Although my wife’s ETF portfolio is cleaner and better organised than mine, there continues to be overlaps in the holdings of the ETFs. The most obvious one is between Nikko AM STI ETF and SPDR STI ETF. Main reason for this duplication of the Singapore Equity ETFs is due to the application of Dollar Cost Averaging (DCA) on the Nikko AM STI ETF and Value Cost Averaging (VCA) on the SPDR STI ETF. I have explained the differences between DCA and VCA on this blog before. Essentially, VCA has more of a market timing element to it as the monthly investment amounts can differ (greater when markets are going down and lesser when markets are going up).

There is minimal overlap in the holdings between these Singapore Equity ETFs, Phillip SGX APAC REIT ETF S$ and Vanguard FTSE All-World High Dividend Yield UCITS ETF. The less overlaps in the holdings of the ETFs, the better the risk diversification and the more diverse the markets distribution of your portfolio. Of course, this depends on the ETFs you have selected for your portfolio, the amount of automatic & manual purchases you intend to make and the investing platform you use. When robo-advisors such as Smartly become more prevalent in Singapore, you will find that all of the considerations above and the investing approach can change. In any case, we should be setting up a robo-advisor ETF portfolio for my wife when it’s available in case you are wondering why her portfolio is smaller compared to mine. We are still waiting for Smartly to launch and expect my wife’s portfolio to grow significantly after that.

I considered including the purchases (number of units and prices), average costs, dividends and profit & loss information as separate columns in the ETF portfolio snapshot. However, I decided against it since I am already posting about our monthly purchases and dividends received for the relevant ETFs and individual stocks. No point cluttering the blog Portfolio page with so much information and it’s more important that I’m tracking them on Google Sheets and SGXCafe instead. As a side note for future posts, I might explore how to select, build and track an ETF portfolio in Singapore in more detail so you can refer to these actionable steps for assistance.