Category Archives for Investment

Simple tips for investors in bear markets

According to experts, the bull run is almost over. While there are mixed reviews on whether we are heading into bear market territory, what we know for sure is that the markets are very volatile right now.

For most investors, their portfolio is most likely in the red. My investment portfolio with Autowealth is down by close to 4%. It’s not as bad as the rest of many investors because my portfolio consists of a diversified portfolio of ETFs and I continue to average down every month.

I’m no investment expert so I’m not going to tell you what are the stocks to sell and what are the stocks to buy.

What I’m going to tell you (or think of this as a reminder if you have heard them before) in this article are common sense investment advice that everyone should follow.

Don’t panic and sell everything

“Running back to town and tell everyone the sky is falling when an acorn drops and hit you on the head while sleeping under a tree, was such a silly thing to do.” I’m sure that’s what Chicken Little would say now that he is 14 years older (the movie was out in 2005).

All you need to do is to look up and realise that the sky isn’t falling.

Stay calm and clear your head before you make any investment decision.

Believe in your investment strategy

Everyone has their own unique profile and circumstances. That’s why we create our own investment strategy that works for us.

In my case, I plan to retire by 50 so I have another 14 years of investment runway and a strong savings rate to my advantage. I can afford to have an aggressive asset allocation and wait for the market to recover. On the flip side, my lack of knowledge in investing techniques also means that I have to keep my investments simple and easy to understand.

I believe that what I’m doing is right so I am going to stay on course.

If you are feeling stressed about the market downturn, I advise you to look back at your investment strategy and decide if it’s still relevant. If it is, stay on course. If it isn’t, time to spend some time to update it.

And if you don’t have an investment strategy, this is the perfect time to create one.

Don’t try to time the market

Unless you have the time to do tons of research and attempt to predict future market price movements and have a huge cash stashed away to afford to make mistakes, I don’t recommend trying to time the market.

As the saying goes, time in the market is better than timing the market.

Markets are unpredictable so it would be wiser to spread your risk by diversifying your investments in a longer term strategy.

So what are you going to do?

If you’re the nervous Nellie who checks the prices of your investment portfolio every day to chart the prices, you might want to consider not looking at them for a while.

When the going gets tough, remember the long game.

You have a long term investment strategy and I trust that you will do well if you stick to it.

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Looking back at 2018 and my plans for 2019

2018 has been a good year for me, both financially and career-wise.

On the career front, the new company I joined in late 2017 treats me well and the team is pretty awesome. The work I do there have been meaningful and fulfilling. The monthly income derived from this work is more than sufficient for my monthly expenses and save a decent amount of money for retirement.

On the personal finance side of things, being a disciplined saver paid off for the year. After completing the purchase of my overseas property in Cambodia, I channeled the same amount that I used to save for the property into my investments through Autowealth’s robo-advisor platform and started building my diversified investment portfolio of international ETFs.

Achieving a net savings rate of 63.32%

Compared to last year’s net savings rate of 59.84%, this year’s net savings rate grew to 63.32%. It’s an improvement, but still lower than the net savings rate in 2015 and 2016.

But to be fair, most of my monthly net savings rates are hovering above 70% except December as I splurged on a 2-week backpacking trip in Eastern Europe.

Examining expenses incurred in 2018

When I track my expenses, I would typically split them into 3 broad categories – necessary expenses, discretionary expenses and excess expenses.

Necessary expenses consist of spendings on ‘needs’ on food, transportation, insurance, etc. while discretionary expenses comprises of expenses on ‘wants’ like travel, entertainment, shopping, etc. I maintain a category called excess expenses to document seasonal and celebratory expenses during Chinese New Year, weddings, etc.

In 2018, necessary expenses accounted for close to 40% while discretionary expenses took a big slice of the pie at 54.8% and excess expenses only accounts for 5.3%.

Almost half of my discretionary expenses (47%) was spent on shopping. There’s definitely a lot of fats to trim on that in 2019.

My annual expenses for 2018 ended at $37,042.12 which was higher than expected having taken 3 overseas holiday and making one too many purchases this year.

Onward and upward with net worth

After my net worth became positive in Oct 2016, it continues to to grow year on year, just falling short of my target by a little due to the bear market for the past few months.

For those interested, my net worth consists of all my assets including my CPF accounts but I chose to exclude the value of my HDB flat since it’s for own stay. However, I chose to include my mortgage loan as part of my liabilities.

My plans for 2019

I’m not a big fan of new year resolutions. Instead, I prefer to look through the past year to see what’s working and whats not.

For the things that are working for me, I believe in putting in effort and discipline to maintain and improve on these things. As for bad habits and activities that aren’t helping me, I want to allocate time to change them.

Then I would think about mid to long term goals that I want to achieve and insert some incremental milestones into 2019 that will help me reach these goals in the long run.

Here are 2 mid to long term milestones that I’m tweaking my 2019 budget planning in to achieve.

  1. Accumulate the Full Retirement Sum amount in my CPF Special Account with cash top ups by the age of 41 to let it compound and accumulate till age 55.
  2. Work to 43 to accumulate sufficient money in my CPF Ordinary account to be able to compound interests yearly to service the remaining monthly mortgage payments for my HDB flat.

Goal 1: Increase my health and fitness activities

I have not been cycling as much in 2018 compared to the past few years so I intend to get back on my road bike and cycle more often. My target is to achieve a total of 3,000 kilometres in 2019.

Goal 2: Remain focused on lifelong learning

My lifelong learning goal in 2018 was to learn about Data Science. To study Data Science, I signed up for a 12-month subscription on with the objective of completing the 22 courses in their Data Scientist Track.

Sadly, I’ve only completed 17 out of the 22 courses so I will have to catch up and complete the remaining 5 courses in early 2019. Once that is done, I plan to complement my Data Science knowledge by upgrading my coding skills to build better websites and mobile applications for the rest of 2019.

Goal 3: Continue to work on my net savings rate

I ended 2018 with a 63.32% net savings rate. In 2019, I will strive for a 70% net savings rate by reducing some of the discretionary expenses like shopping.

Goal 4: Stay invested throughout the bear market

While some of the folks in the personal finance community choose to hold more cash and start investing when the stock market starts to show signs of recovery.

I’m no investment guru and that’s why you don’t see any stock picking recommendation in my blog. Neither will I be able to predict when the stock market will recover.

Therefore, I choose to stay invested in this bear market and continue to make dollar-cost averaging investments monthly through Autowealth, my preferred robo advisor in 2019 while the stock market continues to fluctuate.

Goal 5: Top up CPF Special Account for next 5 years

To achieve the first key milestone of accumulating Full Retirement Sum in my CPF Special Account by the age of 41, I intend to make monthly cash top ups of $995 each month for the next 5 years.

Based on my calculations, this should be able to help me achieve this milestone in 5 years’ time.

What are your plans for 2019?

Benjamin Franklin supposedly once said, “If you fail to plan, you are planning to fail.” Sir Winston Churchill is credited with another saying: “Those who fail to learn from the past are doomed to repeat it.”

What changes do you intend to make in 2019 to improve your personal finances?

I’d love to hear about your plans. Please share them in the comments section below.

Photo by rawpixel on Unsplash

Getting rental income from my rental property in Cambodia

For new readers, I bought a SOHO property at The Bridge, Cambodia and I saved diligently each month in order to pay for the purchase.

After making my final payment for my SOHO apartment, I signed the tenancy lease agreement to officially allow the property developer manage the leasing of my apartment for the next 3 years. In the clause, included a free 3-month rental period for the property developer to renovate and secure a tenant for my apartment.

Last week, I finally received my first quarterly rental payment from the property developer. Woohoo!

Here’s the breakdown of the charges involved in this rental property:

  • Withholding tax: US$161.03 (10% of my rental income for the quarter)
  • Sinking fund: US$180
  • Fixed admin fees: US$50
  • Remitting bank charges: US$18 (property developer’s bank) + US$22.28 (my bank)
  • Total charges: US$431.31

After deducting the above charges, my quarterly rental works out to $1187.

That works out to around 4.42% rental yield for this property.

That’s pretty average but given that my focus for this investment is on the potential capital appreciation, let’s see what happens in the next few years.