A Path to Forever Financial Freedom

Author:   |   Latest post: Sun, 14 Oct 2018, 08:57 PM


What People Misunderstood About My Combo Savings Strategy

Author:   |  Publish date: Sun, 14 Oct 2018, 08:57 PM   |  >> Read article in Blog website

When my recent article got published on Yahoo Money Matters (Link Here if you are interested), there were many attacks remarks on the comments section and also on the social media and hardwarezone forum in particular to the way I save on things.

They think that by being able to get to where I am today, I must have scrimped on things so badly in order to amass such a high percentage of savings even though I am the sole breadwinner of the family and our family have two young children.

At least 50% of the crowd thinks the maths doesn't add up, or they must think I live a misery life that I am missing out on most of the "fun" things in life.

The other 50% of the crowd thinks I must have a high income equivalent to a scholar working for the government.

Everywhere on the comments was an assault.

Almost none was complimentary or at least try to believe that it is true.

That is where I know that we here in the financial blogosphere are the minority outlier who believes things can happen for a reason.

There are many people who I felt had misunderstood when I say that we have to be aware on the things that we buy in order to accumulate more savings at our end.

Savers folks like us do not scrimp on non-discretionary items that we have to spend on.

We spend by being smart about buying them and looking for every value that we can buy.

For instance, I have two young kids at home who obviously need the most important things in their lives right now - Diapers and Milk Powders.

That doesn't mean we do away without them by depriving them of these things but rather we try to source for these items that have the same quality yet cheaper alternative.

In my earlier years for instance, I would buy them over at our neighbourhood country whenever we visited JB on the weekends when we had our short trip travel. With a strong SGD equivalent when  converted to Ringgit, the price that we pay for these items would have halved the amount that we pay in Singapore for the same imported items.

We did the same whenever we had the chance for our frequent travel to Bangkok.

Over the past few months where we did not travel anywhere, we would purchase them through Redmart, an online grocery shopping portal which takes the inconvenience out of the way for us for bulky items like rice, oil, tissue roll paper, diapers, etc.

To add spice to the convenience deal, we also sprung up a few combo savings strategy which resulted in very decent savings at the end of the day.

1.) The first is through logging in to Shopback, a great e-commerce online shopping platform that partners with so many merchants that you literally have to use them.

p.s: if you are a first time user, you can sign up using the link here and immediately redeem yourself a $5 reward start.

$230.89 - That is the amount of cash rebates I get in recent months through my routine mandatory item purchases
2.) Once I logged into my Shopback, I will activate the rebate to get into Redmart and does my routine shopping option. 

I usually choose bulky items such as rice (they have a great japanese rice at affordable price which I highly recommend), oil and diapers which I am too lazy to carry outside since we are car-less people.

Redmart often has a promo-tie with Citibank credit card which you are entitled to around 8.8% off your spend ($12 off with minimum $135 spend). Again, I buy mostly items that can last a few months ahead so I just store and add them up accordingly.

CITIUP12 - My favorite code
3.) In addition to the above, by being smart about using the right credit card and in the above case Citibank card, I'll get an additional 8% cashback that goes back into my citicard (see tie-up link above).

4.) Last but not least, Redmart also has a partnership tie-up with Live-Up where it gives you further perks benefits by just signing up an account with them. They currently have a free 60 days trial with a free 2 months Netflix if you sign up an account with them, after which you'd be charged $28.80/year.

But just look at the savings I have over the past month with them, it's easily over $50 and I have redeemed my initial charges with them.

My Combo Savings Strategy

My final purchase would look something like this:

I purchased something that's worth around $135 (you will get around the same amount if you purchase them at your usual grocery stores) and get the below combo savings deducted:

$135 x [1% (through Shopback for existing Redmart customer) + 8.8% (Citi promo tie-up on almost every Cyber-Tuesday) + 8% (additional Citi cashback reward) + 5% (Live-up) = $30.78

This translates to a savings of about 22.8% for almost every time I purchased via Redmart over the past few months.

My Combo Savings Strategy
Final Thoughts

At the end of the day, savings is about being smart about buying things.

The first being able whether to segregate between discretionary vs non-discretionary items.

And the second to the extent of being able to extract the most value out of the things that you buy.

That's how I get my relatively high savings rate even until today, we save what we need to save and not what most people misunderstood by being stingy on things.

I hope that gives some clarification about things.

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calvintaneng Good sharing.



Saving from

1. Taxes. 20% or more
2. From trouble of earning it.
3. From paying extra as Christians pay 10% tithes and Muslims pay 5% zakat
So a Dollar saved is better than a Dollar earned.

Great guys like Warren Buffet won't spend more than US$5 for breakfast by eating burgers. He also buy and drove a 2nd hand car.

Ikea Boss Igvar Kamprad took bus to work, eat at Ikea canteen and buy only 2nd hand clothes

Yet both are in top 10 billionaires

So learn to save and invest early. Compounding interest is the 8th wonder in the world


14/10/2018 22:52

What Would You Do For 10% Raise In Salary?

Author:   |  Publish date: Fri, 5 Oct 2018, 09:31 PM   |  >> Read article in Blog website

I stumbled upon this article (Link Here) which they gathered about 1,200 Americans people to survey what would these people give up in order to get a 10% immediate raise in their salary. 

The question is of course, hypothetical in nature and by no means reflects an opinion which we might personally have it ourselves but I thought it's still an interesting exercise to ponder about just for fun. 

To add some spice to this, I've picked up a few questions which I thought was interesting to have, and I have added my own opinions on the questions. 

You can let me know your own thoughts in the comments below. 

Working Related

1.) 55.9% would work an extra 10 hours per week for life 

B: To be frank, an extra 10 hours per week isn't exactly a lot because it translates into about 2 hours per day which technically means you are working for about 10 hours in total. This is probably the reason why most would go for it given that they are probably already doing that. For me, I wouldn't vote for this because I am literally buying an extra time with money, which I am already deprived of for most of the day. Working an extra time means lesser time to do other activities that we love and this is not in line with the financial independence concept that I pursue. Of course, if you are already doing the work that you love, then this just adds a spice dimension to it and I don't see why not. 

2.) 50.4% would work one day every weekend for the next year 

B: This is not much different from the question above given that you are essentially buying time for money with the only exception that you only have to do it for a year and that's it (compared to the above where you have to work for life). Literally speaking, the majority of these people who have voted yes for this could have find a weekend job and work for it. It doesn't make sense for them to wait for the reality to kick in. Personally for my case, I wouldn't vote for this as well because weekends are my treasure days where the family could be together doing common activities. 

3.) 15.27% would give up all of their paid vacation days for the next five years 

B: Generally speaking, we have about 14-18 paid leave in a calendar year so from a mathematical point of view, the monetary benefits seem to favour the give up. Plus, this is only for the next 5 years so essentially you can resume back your paid leave after that. Again, personally for me, I wouldn't go for it because I usually utilized my paid leave for quite a few activities that I am working on and they are priceless to me. 

Social Related

4.) 53.55% would give up all social media accounts (facebook, Instagram, twitter) for the next five years 

B: Wow, this is a hard one for me! I know that social media accounts are generally tabloids that are filled with the latest gossips in town or newsfeed of your friends happening but to be without them for the next five years is still too much to accommodate for me. No as well on this one. P.S: It'll be interesting though to see how others might vote on this one. 

5.) 88.61% would give up watching Game of Thrones for life 

B: I'm game for this one. I am not a big fan of GOT personally and would readily give up for an extra 10% increase in my pay. Give it to me right now! 

6.) 43.86% would give up exercise for the next five years 

B: I need my exercise after sitting in the office for almost half of the day, especially on a weekend. No for me. 

7.) 73.42% would give up all alcoholic beverages for the next five years 

B: I think I can do with this one, though five years without alcohol does seem a bit odd weird taste in my mouth. My mouth will get itchy but it is something I can do without. 

Others Related

8.) 34.98% would give up the right to vote in all elections for life 

B: This is getting more to the political side. This is a bit of a hard one as well but I'd favour a yes on this one for the sake of that 10%! Do it before I change my mind! 

9.) 12.2% would break up with their partner or significant other 

B: I seriously don't understand this. Why would anyone be willing to break up with their significant other for only a mere 10% increase in your pay? Surely your other significant half is worth more than 10% of your entire salary! Wake up please! 

Final Thoughts

Even though this is just a fun exercise, we can deduce what are the factors that are important to us in life. 

Most of the easy yes or no comes from the fact that we are already not valuing that, for example in my case above I have not watched a single episode of the GOT but what if someone who are a big fan of GOT would reply? It's always harder when you have to weigh the sacrifice that you are already doing for something that you need. 

It's also interesting to see if we change the question to maybe a higher amount, say for instance a million dollars instead of a mere 10% increase, would any of your answer have changed then.

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$750K - Third Milestone Target Reached!!!

Author:   |  Publish date: Sat, 29 Sep 2018, 07:49 PM   |  >> Read article in Blog website

As part of a larger picture to keep track of my financial independence journey, I had planted a few checkpoint to stop and check if I needed to amend any of my strategy and also to give myself a pat on the back for the small achievement each time a milestone is completed.

This is the third installment of a four-series milestone and it is so important that I think it deserves a post on its own.

Rewind Back The History

For those who are reading or following the blog for the first time, you may learn from reading the past articles appended in the archives that this blog is a chronicle journey of an ordinary person who is looking to achieve financial independence at the age of 35 and I have given myself a 10 year timeline to do that from when I started working at the age of 23 (but only "woke up" after 1-2 years of working).

When I first started working, I was not immediately enlightened by this whole idea of financial independence. Having my salary at the end of the month means getting wasted on all sort of gadgets and the latest trends in town that my bank account would quickly diminish from 4 digits to a 2 digits by the end of the month. I was so eagerly waiting for the next paycheck to arrive but I thought at that time this was a common practice among the colleagues who were practically almost doing the same. I wasn't really sure if I should be deviating from that practice.

One day, I was somewhat enlightened by my ridiculous spending and saving pattern, with little to no investment that I started this blog to start afresh of keeping tabs on my spending, saving and investment. The "Cashflow" Quadrant by Robert Kiyosaki was my first inspiration book while there are many bloggers I was inspired that had also contributed well to where I am today.

Over time, I managed to do rather well in all the three aspects of climbing the corporate ladder, maintaining a ridiculously high savings return and getting a very decent return on my investment.

In April 2014, I managed to reach my first milestone target of $250k which I am extremely proud of. It took me 6 years since the start of working to achieve this result. You can view my thoughts on achieving that back then here.

Since then, I had my first parenting where my first son was born and I also upgraded myself to studying a part-time MBA so I thought expenses were going to balloon up and it would derail my journey to the next milestone.

Thankfully, while expenses have creeped up, the bull market also means that I was getting decent return on my investment and hence I was able to continue to push the networth up further and it took me about 3 years to reach the next milestone.

In March 2017, I managed to reach my second milestone target of $500k. You can view my thoughts on achieving this second milestone back then here.

I knew things were going to get even harder, given that our second child was born during the year and that means expenses have to doubled.

$750k Milestone Reached

Fast forward to this week, I am glad that my equity portfolio had managed to hit the third milestone of $750k worth based on its latest market value.

From the last milestone to today, it has taken me about 1 year and 7 months to reach the third milestone.

The recent M1 (top 2 position) takeover saga means the portfolio has bumped up by about $40k during the pre and post takeover news, and gave a nice boost to hit the third milestone.

This was an anomaly one-off which I was not expecting it would come that soon after the failed takeover bid 2 years ago. I guess I was darn lucky with it.

There was also collateral positive impact for my other position in Singtel (top 4 position) because of this news.

Together with some of the equity portfolio for my wife and 2 children, the portfolio has now hit north of $800k and has an FI Ratio of about 0.82x.

P.S: I will be combining the portfolio for the household since I no longer publish them every month here and it is easier to do reconciliation.

What's Next? The Final Milestone

The next milestone is probably the biggest one as it embarks the last piece of puzzle towards the path to the financial independence.

I don't think I am naive enough to think that this will be a smooth ride from here on.

Already with expenses running up and the bull market seemed like it is on its last leg, the portfolio could well take a hit down before it resumes the trend up. For sure, it will be a bumpy ride from here and I am keeping a cautious stance on the outlook and strength of the portfolio.

If the market is kind enough and give me the same returns as they have done in all previous years, I might try to achieve the last important milestone 2 years from today, which will coincides with my 35th birthday.

The strategy will not be anything different. It is to focus on the savings first and then decent investment return. I have probably peaked my human capital and will not be able to contribute to the increment much further from here.

Let's see if that will materialize.

I am crossing my finger and still hoping the answer to that is a yes.

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First Month of My New Work

Author:   |  Publish date: Fri, 28 Sep 2018, 08:57 PM   |  >> Read article in Blog website

This is a continuation of a follow up post which I blogged earlier in the month (See here). 

The end of working hours today means I managed to complete the first full month cycle at my new work environment.

My body clock has started to adjust to the earlier timing I had to wake up in this new role, which means literally I get to wake up earlier than everyone else in the family.

I set up my alarm clock alarmingly weird at 6.26am in the morning and put them far away from my bed, so I could drag my body to turn off the alarm, had a quick stretch for a light exercise for about 4 minutes then took a shower for the next 10 minutes. After that, I will head to the dining table for breakfast. By now, my two kids would have woken up as well (one for school and the younger one I guess has the same body clock adjustment as me?). 

I gave them both a light kiss cheek to greet a brand new day in the morning, which my younger son took the opportunity to "kacau" me by requesting to climb to the dining table to feed me breakfast (he loves doing that!). That's the only opportunity quality time I get to spend with him during the weekday mostly because he was preparing for bed by the time I headed home at around 8 at night. 

The MRT was about 10 minutes away from my place. When walking to the station, I almost see the same group of people on the street, as if I was repeating the same day over and over again. The routines were getting a bit weird for me.

Days quickly started to blend in together, as Monday quickly rolled to Tuesday, then mid-week, then Thursday and then the happy Friday. 

Weekends were a look forward to, mainly because I get to plan proper activities with my family.

In terms of work, the real work is beginning to start to surface.

I am still grasping most of the concept for the work and it'll take time as days go by.

I am a quick learner by nature so I am not worried about falling behind but at times I do hope there are people I can turn to when I have questions. It just feels so difficult getting that connection at the moment.

I am still getting used to the structure in the organization. 

In this organization, I am a small potato in the much larger organization (compared in the past where I had much more authority in a smaller organization). 

There are both pros and cons and I had mixed reviews on this so will not elaborate further in this post. 

The nature of the work was nothing new and they are neither interesting or fascinating.

They are typical accounting work, and folks who are in this line know how much chore it can be at times.

If not because of the very little time I get to see my family during the weekday, I might contemplate just positioning myself there but I can see very little motivation to go by in the role. This is common among the team, and everyone has that same feeling throughout.

The good thing having completed the first month of work means I received my first salary of the month, which was satisfying at its own rights. It's also nice to see the pay higher than my last drawn pay so I can budget and allocate to savings and investment further.

So far, that's the only motivation and goal I have right now and I'll review them again throughout in running.

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M1 - Potential GO Dejavu ?

Author:   |  Publish date: Wed, 26 Sep 2018, 08:39 PM   |  >> Read article in Blog website

By now, you would have probably heard the news buzzing around surrounding the potential buyout for M1 takeover with two of its largest shareholder Keppel T&T which owns 19.3% and SPH which owns 13.5% dealing with a potential buyer on the cards. 

There's not much details on the news that have been shared and I can understand why investors are eager to follow up on the story given that this feels like dejavu all over again. In early last year, the 3 big shareholders, namely Axiata, Keppel T&T and SPH went through a similar strategy review when the shares were trading back then around $2.15. Unfortunately, the deal seems to be off and from the way I read the deal, it seems that Axiata has not agreed to the selling while the latter two has preference over divesting their non-core assets. 

In a similar statement made by Axiata yesterday (original script below), it appears that Keppel and SPH decide to proceed ahead with the review given that a successful deal with the two would mean that the acquirer would own a shareholding of above 30%, which would trigger a mandatory GO deal. 

Axiata's Original Statement Issuance (25th Sep 2018) 

Axiata Group Bhd ("Axiata" or "the Group") refers to the announcements made today by Keppel Corporation Ltd (KCL) and Singapore Press Holdings Ltd (SPH) to the Singapore Exchange on their joint consideration of a possible transaction involving M1 Limited ("M1"). 

Axiata had on 17 March 2017 and 18 July 2017 previously announced publicly that it was undertaking a strategic review of its stake in M1 jointly with KCL and SPH. Post the said strategic review, Axiata has deliberated with both companies where we made our position clear regarding any corporate action. 

The announcements today by KCL and SPH, as we understand it, may reflect developments from the 2017 strategic review and post discussion, which now has resulted in Axiata not being an active participant in the new corporate exercise. 

Axiata will consider all appropriate and viable options that will enhance our own shareholders' value depending on the official proposal to be made by KCL and SPH. 

What is the term of a mandatory GO in Singapore? 

The threshold for triggering a mandatory GO for a listed company in Singapore is when a person acquires shares resulting in him or his parties owning 30% or more of the listed company's voting rights. 

The offer price to the rest of the shareholder must be at least the highest price paid by the acquirer during the offer period or if after the offer period, then the acquirer must increase the offer price to the price paid by the acquirer. 

The minimum acceptance condition must be approved by at least 75% of the rest of the shareholders based on their voting shares. This is the reason why Axiata plays such an important role here because it owns 28.7% of M1 and my understanding is the deal could be off if Axiata backed off from the strategic review once again. This is the problem when you have so many different parties as part of your big shareholders. 

For M1 to continue to remain listed on the market, it must at least retain 10% or more of their voting shares to be held by the public. 

What does it means for you (investors)? 

This could go down to be quite tricky for minority shareholders. 

It appears that to me Keppel T&T is interested to buy up the stakes of SPH and they would make a GO for the rest of the shareholders.

Either that scenario will happen or Keppel and SPH are trying to divest their shares in M1 as they have previously said they wanted to focus on their core areas. For Axiata however, the shareholding in M1 seems to be key to them given it gives them recurring income as part of the associates and from the reports I read, it appears that they are valuing M1 at the valuation of $2/share in their books.

Hence, I believe this is a key critical price for the deal should it go through. 

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Labels: M1
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Investing Action Is Minimal Activity

Author:   |  Publish date: Tue, 25 Sep 2018, 09:03 PM   |  >> Read article in Blog website

One of the important traits of a successful investor is being able to gather information and do sufficient research on the company he is eyeing for, wait patiently on the sideline and execute when value emerges from that opportunity. 

For many successful investors, investing action is a minimal activity. 

They would spend hundreds of hours gathering information and researching into the company, scuttlebutting the management, and then spend the next hundreds of days or weeks doing nothing just to wait for that one (or if you are lucky more than one) golden opportunity. 

There are some retail investors have mistakenly assumed that one golden opportunity as a time when the economy undergoes a patch during recession, and so they waited patiently in cash for that one low hanging fruits opportunity in a lifetime, but that strategy can be costly if they are mistimed. 

For the many others, it is usually the other way round. 

These people are usually easily influenced and intrigued by the constant noise coming from the social media, especially when they see how their friends who have little knowledge about investment, made double or tripled their money and get to spend on luxury watches and holidays. This is why Warren Buffett in his recent interview was so confident in saying that history of the human greed will come as nature and repeat itself once again. 

Instead of spending more efforts on the researching part, many people would rather jump on the bandwagon of the hottest stock on the Twitter trend and hopefully they would wish for more people like them to push the price up. For some who managed to exit timely at an appropriate timing, this would translate into a handsome profit earned over a mere couple of days or weeks. Immediately, this would elevate their confidence higher into going for their next hunting ground. 

The problem with this approach is that many clueless retail investors would be victim of that "successful" hunt as you need to be a few among the many to have executed timely, both on the buy and the sell. It won't be easy for many retail investors because they are hoping to ride on the luck of a few others but for many they ended up losing majority of their savings. 

At the end of the day, many ended up poorer than their initial capital outlay and they gave up investing totally. 

If we analysed the whole situation, it seems like the mistakes were done upon spending too little time upfront on the research but spending too much time on the investing action and jumping on the latest bandwagon hoping for a quick profit. 

If you happen to belong to this type of category, there are a few things you can try: 

First, accept that investing is a long term activity which would allow businesses to flourish over time as they grow. 

What this means is you should only look for companies that have sufficient moats and ensure the company's objectives to grow are aligned with yours. 

This also means that as investors, you should also give the management time to grow the businesses and enhance your value as a shareholder by returning parts of their profits to you in the form of dividends. 

Second, buy companies with sufficient margin of safety intact to the business. 

This is especially important for companies which are cyclical in nature and businesses would typically fluctuate between the peak and trough, and investors would always be "attracted" to such companies when they are only at the peak of the cycle. 

For growth companies, the margin of safety can come in the form of more conservative growth projected into the future so it will not look overly ambitious. 

Third, if you need some psychological peace of mind, do take a look at the share price of strong moats companies on a multi-decade basis to convince yourself that businesses that grow over time also reward shareholders in terms of capital appreciation. 

Investing action is a minimal activity but the work put behind the research will determine a clear winner.

The art of doing nothing is also the art of devising a process to be a winner. 

It's best to put our efforts on the right activity.

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