A Path to Forever Financial Freedom

Author:   |   Latest post: Wed, 21 Aug 2019, 5:20 PM


Why I Would Not Consider Ireit Global At Their Current Valuation

Author:   |  Publish date: Wed, 21 Aug 2019, 5:20 PM   |  >> Read article in Blog website

Ireit Global is a Reit I used to own in the past due to the strong profiling of their freehold assets in Germany, high dividend yield, low borrowing costs and long WALE with concentrated blue chip tenant profile.

You would think that Germany is a strong powerhouse in Europe and they are too big to fail, so everything else equal, it's something which is probably too good to be true, especially since they debuted and listed back in 2014.

I bought them in the past in the range of 63 to 66 cents when most people were skeptical about the relatively new manager at that time and managed to sell them when they were at around 73 cents. The main reason I sold was because Tikehau Capital came in and they kept harping about a possible inorganic growth through acquisitions in their investors presentation slides, which is pretty imminent at that time that they were going to do a rights issue since their gearing was in the 40% range back then.

Since then, 5 years after the listing, there's not much acquisition stories that are developing and revolving around.

Most of the assets remained as what they were during the IPO, there were a few assets that appreciate in value which resulted in the lower gearing today (~36%) while dividend yield remained in range.

Costs of borrowings did went down further from 2% to 1.5% due to the drastic state of the European economy and we just wonder if we will start seeing more defaults or downsizing of their blue chip tenants. It's probably one of the danger of concentration activities and you can see why retail investors keep harping into that as one of the potential risks.

Earlier this year, City Reit Management, a fund subsidiary of blue chip property giant City Development (CDL), came in to purchase a 50% stake in the Manager. CDL did that as part of their growth plans to secure a more recurring income platform through fund management activities.

You wonder why Tikehau wants to allow that since they are big enough players in Europe themselves who are able to grow their AUM if they want to do that.

And we're all waiting for Tikehau to make it happen since they took over back in 2016 and kept harping about growing, but albeit no news so far. Surely, if they want to do that, they can easily find a good property with sufficient passing rent yield and appropriate capital structure to make the acquisitions DPU accretive, so am not sure what's the further wait.

The arrivals of more than one stake in the manager with majority vote for decision making brings about more uncertainties because the plans could be skewed to one side.

CDL, in particular, was familiar with Europe but specializes more in hotel management and not commercial or logistics and Tikehau might be the big brother familiar with it. If so, one might wonder what sort of value does CDL brings to the table. At the worst scenario possible, they might be pressuring Tikehau to make the deal to grow the AUM, this especially if they are only interested in extracting management fees out of the AUM.

I'm still unsure if Ireit Global at this valuation brings anything to the table for investors, especially with so much uncertainties questioning both the European economy and the management's direction of where the Reit is going to go. This has definitely been a lost 5 years opportunities for Ireit Global themselves to grow their assets and they might be in for a rougher ride when the global economy goes back into recession or slower growth over the next couple of years.

At this valuation, I certainly don't find it attractive enough to put my money on it.

At the best, this probably gives you the current 7.7% yield returns per annum which you might get, but you shouldn't expect too much from it, especially if you are gunning for double digit returns. At the worst, you might get into the perfect storm of a declining European economy which will increase the probability of a default or downsizing activity in tenants, a rights issue, and a wasted warchest opportunities.

Surely if you find the current profile attractive, you would similarly found their past profile attractive as well.

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Guest Post - Lessons Learnt From My Temporary Retirement

Author:   |  Publish date: Wed, 21 Aug 2019, 12:33 PM   |  >> Read article in Blog website

The following article is a guest post contributed by Simon from Financial Expert.

Simon is someone I met on the social media and have chatted with him a few times.

We have similar goals in mind with regards to the concept of financial independence and it is probably the reason why we quickly clicked when we talk to one another.

This is his story about how he achieved financial independence at the age of 29 and the lessons he is sharing with us on his temporary retirement.

Emotions were running high when I returned to my apartment on the last Friday of May this year. I had given my farewells to work colleagues and had left the office after working there for ten years.

My mind raced between all the new potential uses of my time, and the loose ends I might have accidentally left at work. Like Britain attempting to leave the EU, it was certainly a challenge to untangle ten years of projects and responsibilities. 

By the end of the evening, my mind had calmed and I was able to focus on the key headline that frame that day - I had retired at the age of 29! 

Well... for now, at least. I enjoy my work and intend to return to it after a long summer and some travelling in autumn. 

In this post, I would like to share some insights from my experiences from the first three months, as my lifestyle now resembles early retirement.

Nothing Lasts Forever

They say that nothing lasts forever, and this certainly applies to a retirement lifestyle. In a dream retirement scenario, we might picture ourselves enjoying a new hobby, or attending a one-off event that we've never had the opportunity to attend. 

What I've discovered is how shallow that image can be. It is fairer to label it a retirement 'snapshot' rather than a vision of what retirement is like to live through. Real retirement is an evolving beast that doesn't hold still. 

Despite being only three months into my break, I'm spending my days in a very different way to my first month. 

The takeaway here is that I appreciate that having an idyllic picture in mind might provide some motivation. But as you actually begin to approach retirement, you should begin planning for a much deeper, and fleshed-out lifestyle that will continue to enrich you over the longer term.

Routine Is Everything

In education, teachers run schools with military precision. 

At work, our managers monitor the amount of time we spend sitting down in the cubicle.

In retirement, by contrast, all of this structure falls away. 

While we may have shown great discipline to wake up early and be a punctual employee, this doesn't mean we can call upon such discipline when all incentives are stripped out. 

I encourage you to reflect on this. 

As a thought experiment, consider the following: How do your habits change at the weekend when none of the usual pressures exists? Do you still wake early and make the most of your day, or do you lie-in and waste many hours in bed? If you lie-in at a weekend, what exactly prevents you from waking at 10am every day of your retirement? 

I have found that establishing a formal wake-up time for each day has helped enormously to instil a sense of purpose and structure to my day. 

In fact, I consistently wake up much earlier now than I did at work. By 9am each morning, I have usually achieved something that gives me a sense of accomplishment, such as a gym workout and a cooked breakfast. I feel proud when I consider that I wouldn't have even arrived at the office by 8:30am under my old routine.

Socializing Requires More Proactivity & Creativity

When you are successful in retiring early, you will have beaten most of your peers to the goal. 

While you now have unlimited spare time - your friends' jobs still chain them to a desk or a work shift pattern. Therefore your opportunities may still be constricted by the demands of work, indirectly, because of your circle of friends in the society. 

One solution to avoid this problem is to be more creative with the time you have. 

As I live in a city, I saw an opportunity in the often-wasted lunch break. After spending the morning preparing an elaborate dish, I invite over friends to join me for a quick, home-cooked lunch. We get the chance to catch-up and at the same time, enrich their working day and give them a true break from their work. 

You could say this shares the benefits of retirement with those who haven't quite made it there yet!

It Takes Time To Orientate To A Time-Rich, Money-Poor Mindset

Three months into my break, I still found myself making decisions with the assumption that time is still a very scarce resource. 

The most dramatic example of this was choosing how to sell my car recently. As a worker, I had never considered selling my car privately. 

I did not want to spend the precious few free hours of my week performing the necessary duties. These include hosting viewers, haggling on price with time-wasters and nervously taking the passenger seat during test drives. 

Therefore, when I began the process of selling my car this month, I automatically began requesting quotes from car-buying services and dealerships, who all offered prices in the region of £21,000 - £23,000. 

Within this mindset, I thought I was chasing a great deal by twisting the arm of a buyer to add another £500 to their offer. 

However, when I researched more widely, I saw that other sellers had listed similar vehicles on Auto Trader for £30,000. This caused a total rethink of my strategy. The decision became hinged on the following question: "Is the amount of time I would need to spend to sell my car privately (e.g. 50 hours) worth £7,000? £140 per hour?" 


Getting to early retirement is a long journey filled with many lessons learnt, but getting to adjust to early retirement lifestyle is in itself a huge lessons to be learnt.

At the end of the day, life is filled with so much learning journey that we just have to try, adjust and see if it shaped us for the better.

About the Author: Simon is a contributor to Financial Expert where he writes about topics such as How To Invest In Property

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Recent Action - Vicom Ltd

Author:   |  Publish date: Fri, 16 Aug 2019, 12:19 PM   |  >> Read article in Blog website

In my previous post on "How Do You Prepare A Growing Warchest", I mentioned about how we can accumulate our warchest through a variety of ways.

One of the ways to do them is through the accumulation of defensive stocks which tend to be more resilient during period of uncertainties.

I was fortunate to have a few of these defensive resilient companies in my portfolio, which include the likes of Vicom, Starhill Reit and Netlink Trust when I started the year, each of them taking up a very large position in the portfolio.

I began to unwind each of them slowly, as I look to build up more warchest in anticipation of events like what we have today, with the divestment of Starhill Reit back in May at a (relatively so-so on hindsight) price of 75 cents and divestment of Netlink Trust back in Jun at a (relatively so-so on hindsight) price of 88 cents.

On hindsight, these are not peak-call divestment since both are still trading at this range today which technically means I lose out on their recent dividends payout, but overall it was still a good contribution to the returns of the portfolio and balancing the overall asset allocation of things.

This week, I began to unwind my positions in Vicom slowly, as the turbulent in the stock market especially HK situation means that I am looking to allocate my money in those sectors that were impacted and I think from a risk-reward angle there could be opportunities to put some money to it.

Vicom is an illiquid stock with not much transactions during the normal trading volume so I'll have to slowly sell them by batches but also watch out for the trading fees that are incurred to make sure I don't incur them unnecessarily.

I sold 500 shares at $7.15 (didn't get the full allocation I wanted) on the 8th Aug prior to our national public holiday, and further this week at a higher price that ranges from $7.14 to $7.19.

Vicom also went ex-dividend on the 16th Aug for a payout of 14.11 cents, but surprisingly the share price was very resilient this morning so I took the chance to further divest them at a range of $7.11 to $7.15. In pre-xd form, this means I am selling them at a range of $7.25 to $7.29.

Incredible! It seems like folks are buying into safe haven and wants to keep these defensive assets ahead of the turmoil.

In all fairness, I think valuation is fair at this price and the next 2 quarters result will be good so unless you wanted to re-allocate your cash for another purchase, it might be a good time holding on to it.

I started with 31,300 shares and as of noon closing today, ended with 8,500 shares left.

With these divestment, I am about 85% in cash after my reduced networth due to recent situation that happened back home. 

I am looking hard to allocate some of these cash into some companies which I have targeted, some of which includes HK Land, JMH, HRNet Group, Sembcorp Industries, banks and some others. You can see these companies have been beaten up quite badly in recent weeks for a reason but there could be potential opportunities as well.

I have already initiated a first batch position in HK Land a couple of days back so I am looking to see if I can get it lower than what they are trading today before building up my position further.

It is always easy to hear people say that they are waiting for prices to go lower but when it comes they either didn't take up a position or build up a position that are too small that it is negligible to the portfolio at best. There's always a risk when we build up a position that has yet to reach the trough but it also comes at a reward if your thesis proves to be right over the longer term.

Meantime, I guess patience is the key here when we have volatilities coming back from both our local and the US market but I guess from the sentiments many of the retail investors are happy to see some opportunities.

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How Do You Prepare A Growing Warchest?

Author:   |  Publish date: Wed, 14 Aug 2019, 10:21 PM   |  >> Read article in Blog website

Every three to four years, we revisit the topic issue on the importance to keep a warchest in our portfolio. This comes always on the back of something that is brewing, like the Eurozone crisis in 2011, the oil and China crisis in 2016 and the Trade War and HK protests in 2019.

As the name itself implied, having sufficient warchest in your portfolio means you are keeping a sum of money that is ready when you are needed to go to war. 

The thing is this, we always take things granted in our lives, especially when everything are looking good and the sky is shining clear and bright.

When times are good, we don't treasure them hard enough and often it gets overlooked with something which may seem more urgent to us. However, when things go sour, or when we lose it, we wish we could have put on more efforts into building that relationship and moments.

The same theory applies to warchest. We seem to belittle them when things are positive but need them most when things are dire but are often too late to realize. 

Today, we'll talk about how we can prepare a growing warchest and how as investors we can maximise our warchest allocations without losing alternate returns that we can garner if we put them on a positive market. 

I'll also share about how I typically accumulate warchest using my style and we can discuss the pros and cons of each method.

Accumulation Through Salary

This is probably the most common method which most people are already using one way or another at some point. 

The idea of this accumulation of warchest is basically through the leftover savings from the monthly salary (less expenses) that you get from your job. For instance, if you are earning $5k/month and have an expense of $4k/month, you are able to plough in the $1k leftover as warchest. Basically, the more you can grow your income, or reduce your expenses, everything else constant, the more you are able to accumulate your growing warchest.

At some point, as you grow and climb the office ladder over time, the more savings you will have to accumulate for your warchest. 

Accumulation Through Dividends

Recently, a reader emailed me on this question he has about dividend reinvestment and how it affects compounding. 

In theory, the impact on compounding is strongest when you have money rolled on after money on an infinite period at every intervals. What this means is if you have a dividend that is coming on the 8th Aug for instance, you should allocate those dividends almost immediately without wasting any time. This is almost similar to the DRIP method where you get to reinvest your dividends back into the company you are vested in. 

In theory, that is not what I usually do. 

When I receive an incoming dividend, it will usually go to my account and form as part of my warchest, which I would then choose to allocate depending on opportunities availability. I don't usually almost invest them back, unless we are in an attractive down market that I wanted to get in as soon as possible. 

Accumulation Through Defensive Assets (Bonds/Gold) 

Most people usually think of warchest as cash but this is something which I think is quite interesting to explore. 

The idea of keeping your warchest in the form of bonds or gold is something which is quite interesting to explore because of their inverse relationship nature to equities, which means they are likely to outperform when equities go south and vice versa. Even if they don't fully have that correlation in nature, they still are a good hedging to the portfolio.

These assets may or may not make up for the "lost" returns cash does when you are holding them for longer period.

Accumulation Through Defensive Equities

This method is one which I used it most often especially during the build up towards more dividend investing in the early stage.

Through defensive nature of stocks such as Vicom, NetLink Trust, Keppel DC, Plife Reit for instance, you are essentially buying yourself a predictable earning and cash flow that you know you will be getting quarters after quarters.

As the economy goes weaker, these defensive stocks are the last to fall and can act as warchest balancing depending on when you want to cash them out.

The idea of holding onto them as an alternate warchest instead of equity is that you get your dividend and capital gain during a bull market, something which cash cannot give you.

Using my case for instance, I've began unloading my position for Vicom slowly this week to switch to a higher risk reward company such as HK Land for instance. This will continue until I feel the risk reward tilts to the other side. 

Optimal Allocation of Warchest

Everyone is looking for that perfect formula on the optimal allocation of how much warchest they should be keeping in their portfolio. 

These people look and google around for answers through some random blogs like this and hope to find a straight answer that tells them 70/30 or 80/20 is the most optimal allocation. 

The truth is that many are asking the wrong questions in the first place. 

Keeping a warchest is a function of how much initial returns you are willing to sacrifice in order to recoup it back at a later stage. 

Keeping a warchest is a function of how confident you are in today's market macro environment and how good you are as a capital allocator. 

Keeping a warchest is a function of how well prepared and how much knowledge you have on yourself. 

And these are the things that no one can tell you except yourself, just because you are supposed to know yourself better than anybody else. 

Some folks thrive on having 50% warchest at all times. Some thrive on having just minimally 20% and they use them when they see opportunities. Some thrive on having no warchest at all times in the market. 

Final Thoughts

There are so many different school of thoughts to the topics on warchest that you can never get an universal answer.

To a large extent, most people would agree that keeping a sum of warchest is necessary in order to take advantage of the situation but the optimal allocation would have to depend if you are a good allocator yourself.

In this regard, it is better that we know our style from a holistic approach prior to knowing how much warchest that we need.

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Personal Update in July!

Author:   |  Publish date: Mon, 29 Jul 2019, 10:56 AM   |  >> Read article in Blog website

As I am writing this post, it has been a month since I last gave an update about my situation in the previous post which wasn't so pleasant and I must admit it has been one of the more challenging periods in my life that I have to death with. 

On the usual routine year, I would be doing my half yearly review during this period to check how I was performing on my interim review. Not this time round though.

But first, I'd like to express my gratitude to everyone who has left me a message in my previous post as well as those who dropped me a private email concerning my current situation. I am truly appreciative of all the help that was rendered to me, especially those who offered me referrals for job as well as referrals for renting out the room. 

OK let's get right to it one by one. 

Hospital Bills & Conditions

What was thought to be an isolation case of an ischemic stroke developed into something more. He developed an infection in his lungs and was diagnosed Klebsiella Pneumonia, a bacteria CRE that is present in his blood. The doctors had to give him multiple antibiotics for that. 

Just when we thought the worst was over, his right leg developed a deep vein thrombosis (DVT) , which is essentially a blood clot surrounding legs that cannot move. Apparently, this can happen to a lot of people even if they are healthy if they are in a prolonged case of sitting down or long flights. 

The DVT is dangerous because it can travel to the lungs which can develop a pulmonary embolism, which happened to my dad. His breathing was visibly more difficult, his pulse rate is higher and his oxygen levels was down. The doctor had to install an Ivc filter to prevent the blood clot from travelling to the lungs. The Ivc filter, under the Prudential early stage crisis, was one of the early criteria to claim for a pulmonary embolism. 

As the doctor was treating the DVT with blood thinners, something else happened. The blood thinners can cause the brain area to bleed especially for patients who are still recovering from stroke and it is what happened to my dad. There was some haemorrhage seen through the X-Ray and the doctors had to reverse engineer the blood thinners quickly in order not to allow the blood and swelling to worsen. 

We were starting to get really worried over the situation and also financially because prolonged staying in the hospital wasn't an option. 

My Dad was finally discharged after spending 23 days in the hospital, 16 days in ICU and 7 days in General Ward. 

The hospital bills, including doctors consultation and medicine came up to about $110,000.

Together with the everything else including the International SOS, post physiotherapists, medicines and other things, it adds up close to about $150,000.

My dad had a basic prudential insurance which he bought back in Indonesia and I think we'd be able to claim only the basic minimum. 

If there's one thing that I regretted, especially being a financial blogger, is that I should have settled their insurances long time ago. I had that done for my immediate family for wife and children but failed to consider the fact that my parents is my issue as well. The price to pay is $150k burnt in my pocket. 

Having said that, if my Dad can slowly recover from all this, I think this is almost a life changing lessons for all of us and nothing is more worthy than seeing him healthy again. 

Taking Interim Care of My Dad's Business

My Dad runs a business back in Jakarta which was independent from what I did so for most of the time, I didn't exactly know the details of what he's up to. 

Given the current situation, there's a need to step in to take care of the day to day operations and payments. 

After studying it for several weeks, together with my Mum, we learnt that it is in the midst of having a cash flow issues. 

The business is not a mess, it is just messy. 

It takes time to reshape and change the business model and it is exactly what I am going to do, if it were up to me. 

I ploughed in $350k to help run the daily needs of the cash flow and we are in the midst of changing the business model so that it will be more cash flow generative in the future. 

This will also be my interim job while waiting for my Dad to recover. 


In my previous post, I mentioned that I was hoping to rent out one room in order to help with the cash flow. 

There were a few inquiries and visits but most lamented the room wasn't big enough and/or they didn't like staying with a landlord under the same roof. 

So I opened up the possibility for more options. 

I asked my agents to put up the property for sale and also for leases.

If a sale happens, our plan was then to downgrade to a resale hdb given that we are now both Singaporeans and we could take advantage of that. This option gives the best scenario in terms of stretching the cash flows to the best use. 

If a lease happens, then we'd probably move to rent at somewhere further and cheaper, while waiting for the possibility of a sale (together with tenancy). Cash flow would still improve in the interim. 

In the end, we managed to secure a 3 years lease with a Myanmar family tenant so we'd be moving out to our new place sometime in early Aug. It's also something that packed our schedule in the past few weeks given that we had to dispose furnitures, find a contractor for some bits of renovation, find a mover and so on. 


In my previous post, I also mentioned that I am back on the look out for a new job.

This is quite ironic given that I had only chosen to do a sabbatical a few months ago and the plan wasn't to go back to another corporate so fast but life takes a turn so quickly that I had to make adjustment to it at this juncture because of the need to navigate the cash flow. 

I went for 3 interviews - one at a French beauty MNC, one at Ntuc social enterprise and one at a tech start-up company. 

I managed to secure the position at the tech start-up which will commence early September. 

Being a start-up, the company is small and the hierarchy is lean. There's the Ceo, then there's me who leads the Finance, then everyone else is a computer engineer. 

The start up environment is totally different and there'll be plenty of hands on things which needed intervention from ourselves, unlike MNCs where you can easily delegate your things to your staff. 


I've not been monitoring the market as much as I did in the past because my schedule was packed up right to the neck but I did have a glance every now and then.

The stock market was much indifferent as they were in the past few months as the market is still showing plenty of buoyant activities which means we don't really have grapes hanging on the floors yet.

I'm still holding on to my Vicom position of 31,300 shares but other than that there isn't really anything compelling that I wanted to add to right now.


So there is it you can see how crazy busy I was in the past month. 

From having to take care of my Dad in hospital (and now at home), I also had to take care of his business in the interim (traveling back and forth), I had to deal with moving house, and also starting a new job next month.

Chances are my blogging time will have to take a step back while I continue to sort out these things and hopefully when things are much clearer, I'll have more time to blog again.

Alternatively, another dark horse scenario is if we manage to sell our current property and moved into a resale hdb, it would give our cash flow a very big boost and that would virtually almost solve all the financial issues at hand that we've got.

Until then, thanks again for all the reader's support! 
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Some Quick Updates!

Author:   |  Publish date: Sat, 29 Jun 2019, 7:42 PM   |  >> Read article in Blog website

I thought I'll provide some quick updates on my situation in case anyone thinks I've gone missing.

The past week has been one of the most stressful case as my Dad was down with an ischemic stroke on the left side of the brain which paralyses him on his right arm, leg and the ability to speak.

We were on our usual routine one morning when suddenly he was down with a stroke. We panicked and called the ambulance to send him to the nearest hospital before transferring him to Singapore the day after via an International SOS plane to transfer him to Dr. Timothy Lee at Gleneagles. He is one of the most sough renowned brain and neurological doctor we were recommended.

Over the next 7 days he was in ICU, and whilst his condition is stable now, there is plenty of post therapy and changes in the living conditions that was necessary to adjust.

If that is not the only stress, the costs of the medical fees were another one to give plenty of headaches.

The International SOS costs us close to SGD20k while the hospital bill should come somewhere in the 6 digits. He has an insurance back in Jakarta which wasn't adequate to cover the high medical costs in Singapore hence I will have to bear that costs right from the pocket (the "difference").

With this unexpected situations, there is an immediate change in my plan to take a sabbatical too.

I am in the look out for an immediate role (please refer me if you have any roles in your company that are available) and have begun searching for one intensively.

I am also planning to rent out one room in the place we are currently staying in so if there's anyone that needs a room, I'm more than happy if you could recommend it to me.

Within the next few months, what this means is that the priority would change drastically so I will definitely spend lesser time on blogging and even likely lesser time on prospecting companies to invest. Chances are I will update the blog from time to time but am still unsure yet if I should take a sabbatical time away from it.

I guess that's all the updates I have from now. Its going to be a long battle both mentally and physically so I have to keep my powder mental strength dry during this period. 
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