Category: Uncategorized

Woah, what a show today!

Everybody was waiting for the 1st US presidential debate to kick off and more than 84 million tuned in, even more if you consider those outside the US like myself.

Gloves were taken off but this was not as ferocious as I had wanted it to be. Trump seemed to have toned down a bit, trying hard not to self-praise too much, to say how great he is. Clinton was a bit apprehensive, not certain of what unpredictable behaviour her opponent will exhibit – no holds barred or measured caution?

As per most opinion polls in the first 12 hours after the debate, most have called this a Clinton win and I do agree. Clinton correctly outed Trump’s phoney “bait and switch” tactics and seriously damaged his credibility. How could someone who does not reveal his tax returns, hardly pays any tax by gaming the system, be qualified to champion tax reform?

The birther argument was a classic. Trump was simply trying to worm his way out of a deeper hole when confronted with statements that he continues to question Obama’s US birth even right up to last year. He insisted that he did the country a favour by forcing the birth certificate to be published and just refused to accept blame. How can you even picture him as the most powerful person in the US now?

A friend did suggest that maybe Trump is taking all the blows now as it is only the first debate, to get them out of the way. He is probably saving all the goodies and dirt on Clinton for the next 2 debates.

Global equity markets actually went up after the debate when it seems that Clinton had an upper hand. Americans, we are trying to send you a message. D’ya get it?

 

 

Conventional wisdom dictates that to plan for retirement here, you will need at least SGD 1 million in reserve funds. You then target to spend 4% of it per year and this will last you for another 25 years. Assuming that you retire at 55, then you will run out of money at 80. We all know that average lifespan is now longer and as we age, medical costs will go up and there will be emergencies that could drain one’s resources really fast.

Given that interest rates are so low now, even negative, savers are being punished. What do we do then?

If you attend retirement seminars and read related books, one often mentioned term is to make your funds work for you. There is the concept of passive income. As you grow older, one should try to build up a steady stream of income which does not require you to lift a finger.

The first most popular option for passive income is to have an investment property with monthly rental income. The gross yield should be at least 3 to 5% p.a. At the start, you may have also taken a housing loan against this investment. If yes, one should target to pay off the outstanding amount by the time you retire. For now, if you net off the monthly loan payments against the rental income, you should aim for at least a positive return on investment. Do also note that rental income is taxable and has to be included in your overall annual fiscal year tax assessment. There is also the monthly maintenance fee expense as an outflow that has to be taken into consideration too.

Another favoured option for passive income would be to invest in dividend-paying instruments. Classic examples would be to invest in government bonds, so call risk-free assets. Given the current nature of NIRP/ZIRP policies of central banks, this option now yields peanuts.

We could also look at good companies that pay regular dividends. These should be blue chips stocks with a sound track record of steady to increasing revenues. A big red flag will be those that continue to maintain or increase dividend payments even as their incomes are declining. Australian banks??

There is another alternative that is gaining much interest which combines all of the above. Real Estate Investment Trust (REIT) is a popular instrument. In S’pore, they are fairly well established and normally yield between 5 to 9% p.a. You can easily view a summary of them in websites like http://reitdata.com which also provides their asset type, NAV, gearing and current yields. Note that REITs do own real asset properties and are required to be managed by 3rd party trustees. By law, 90% of their net income (mainly rental income) has to be distributed to shareholders on a quarterly or semi-annual basis. REITs are also currently only allowed a maximum leverage/gearing ratio of 45% (Debt to Total Asset).

Main advantages for REIT investors : Affordability, liquidity/price transparency, tax-exempt, diversification and access to professional asset managers. Do note that like a stock, you could also suffer a capital loss on your investment. Also, the impact of online shopping on malls is still an evolving discussion that may hurt REITs in the long run.

Personally, I use technical charts of historical data to determine the levels which I would be comfortable to enter into any REITs before I place my buy orders. As there are now 40+ of them, you can easily diversify and target those you prefer (eg. retail, industrial, office, hospitality or residential, and by geographical locations). Anyone with a small amount of funds can participate as the unit prices are not high. Currently, I get a few thousand dollars every quarter from REITs, knowing that I have invested in some of the most popular malls in the country which are fully owned by these companies.

Currently, I get a few thousand dollars every quarter from REITs, knowing that I have invested in some of the most popular malls in the country which are fully owned by these companies. Over time, I intend to move more of my funds into REITs to provide a steady passive income for me in my twilight years.

Below are a few links which you may read more about REITs :

http://www.moneysense.gov.sg/Understanding-Financial-Products/Investments/Types-of-Investments/Real-Estate-Investment-Trusts.aspx

http://www.giraffevalue.com/reits-singapore/

 

 

While we were kids in the 1970s, one of our favourite weekly shows  was the Ultraman series.  Without fail every Wednesday at 6.30 pm sharp, someone will shout “Ultraman!!!” at our housing estate and all the kids would rush home immediately. The lucky ones would have colour TVs while the rest have to make do with black and white TVs.

This was a made in Japan science fiction drama of a guy dressed in spandex fighting another actor in a monster suit. The plot seemed to be the same every week. The Science Patrol team protects Earth, a monster suddenly appears, team member turns into superhero and attacks monster. Monster has the upper hand and kicks Ultraman’s butt initially. Ultraman’s heart beam weakens, flies towards the sun to recharge his solar energy and then uses his super-duper ray (formed by crossing his hands) to obliterate said monster. Happy ending every week.

Boy, we really lapped it up as kids. My favourite was Ultraman 7 in his cool red suit. This was the highlight of the week when we had no internet and TV programming was at its absolute basic stage.  Saturday night was 3 hours of badminton at the court below our block till the lights automatically switch off at 10 pm, followed by a nice cold drink. We had to constantly find things to entertain ourselves. Life was so simple then.

 

Looking back at all the jobs I have had since I started working, some of the memorable ones were those that I did while I was still in school.

While in high school, my sister managed to get me part-time work during my school holidays. It was at the company she was working at that time and they needed temp staff to wrap gift hampers for the year-end holiday season. It was supposed to last for 2 weeks but in our naive youthful enthusiasm, our productivity was more than the requested demand. Hence we were fired after one week.

Other jobs I had during school days included being a swimming pool towel attendant and a private tutor. I had even wanted to work at McDonald’s when I was very young but they did not have an outlet near my town then – I even wrote a letter and typed it out to request that they open one near me…

Over my profession career of 26 years after graduation, I was only in a total of 5 different job roles. The longest was for 11 years and the shortest, a year. Times have changed and job hopping is pretty common nowadays for the younger generation. 

The Millennials (those born after 1980) would argue that there are no iron rice bowl careers anymore. They strive to do something new all the time and may opt to switch jobs every 18 months because they know that new jobs are constantly being created. They have to evolve and reinvent themselves regularly in order to stay relevant. http://wp.me/p7tPYp-5U The world is their stage and competition is now global, without boundaries. 

Based on how fast the job market is changing in the last few years, I don’t disagree with this point. Most jobs we had taken for granted in the past 30 years may soon disappear as they are disrupted by technology. We live in a brave new world indeed.

 

 

I attended a full day Corporate Treasury event today. It was their annual Treasury Forum. As a member, I wanted to get an insight of the latest Treasury happenings.

There were 4 themes for the day and the first one was on regulations. It seems that the amount of new regulations that banks have to face nowadays as a consequence of the 2008 GFC has made it very difficult for companies to obtain funding liquidity while the cost of doing business rises, even as interest rates hit rock bottom. In particular, the implementation of Basel 3 in the coming years will cause banks to restrict market making and par down drastically on risk taking. No one knows for certain how the banks would evolve from here.

Next, a panel discussed about the current market situation, where NIRP (Negative Interest Rate Policy) had wrecked havoc on all asset classes. We only know for certain that there will be more uncertainty ahead. Volatility seems to be higher as the markets get even more tensed but yet the VIX volatility index remains low…

The next topic was a perennial favourite. Is Fintech a revolution or evolution? Generally, everyone agreed that it is going to drastically change the way we are doing business with banks as all old and inefficient processes are eradicated. Instant transfer of funds using BlockChain is an example of the possibilities ahead.

Finally, there was the sharing of a survey done on the current landscape of corporate treasuries. This session provided all participants with an update on what the majority are doing, in areas like compliance and process enhancements.

Overall, it was an informative day where treasurers could network with like-minded people in the same industry and to obtain some insights into the current market situation.

 

I was invited to attend an interesting lunch event today. The theme was “Pay It Forward” and it was organized by my old uni and sponsored by one of the old boys.

It featured 2 guests and the event’s message really touched everyone. It was a live example of paying it forward at work, over the course of almost 40 years. One of the guests was the granddaughter of a rich philanthropist (Tan Chin Tuan – TCT) who passed away 11 years ago. Her grandfather started a charity foundation in the 1970s which benefited the second guest speaker, turning his life around.

From being a boy who could only afford a boiled potato for lunch in school every day, the second speaker is now the CEO of a large company. This was thanks to the 2 bursaries he had received. He spoke of the personal attention TCT gave to the foundation, insisting on having lunches with the bursary recipients and even remembering the Christmas card given by one of the boys. Being a successful businessman now, he stressed that it is his time to do his part. He has been actively participating in the uni’s bursary activities and wanted to spread the Pay It Forward message.

Overall, the event turned out much better than I had anticipated. The message was clear and it resonants with everyone, whether you are young or old. It is the thought that counts, whatever the amount. Those of us who have been blessed, whether by one’s own effort or through the help of others, should always be unselfish about giving back to society. It does not necessarily have to be in monetary terms.

 

 

 

  

 

Over the weekend, I finally laid my hands on the new iPhone 7 Plus. It replaces my iPhone 6 which served my well for the last 2 years but seems to be showing problems (battery and Bluetooth issues).

I came across an interesting article recently on why Samsung’s Note 7 launch had become a disaster. All smartphone makers needed to constantly deploy cutting-edge technology in order to have an edge over Apple. The problem with this strategy : higher battery capacity is required and there is not enough time to fully test the new tech yet. Meanwhile, Apple has total control over its manufacturing process and they are able to fully ensure 100% compatibility of all components. By adopting new technology later (eg. OLED and iris recognition), they can harvest the best of well-proven platforms that had stabilised. Samsung’s Note 7 rush to be ahead had compromised on this process. Just like if you want to buy a DIY PC, combining the parts yourself is a risk that some components may not work well once you put the system together. One would rather buy a PC from, say Lenovo, as they would have tested them millions of times before mass manufacturing starts.

On the subject of taking photos, I realised that my trusty Canon S120 camera’s photos were getting more inferior to the ones taken by the newer iPhones. Up to now, I was still using a separate video and camera to film our vacations.

My iPhone 7 plus now will technically be able to do all that in a more superior way and also make phone calls, besides doing a dozen of other things more efficiently. Instead of thinking of upgrading to a new camera, an iPhone 7 will do just fine for me, thank you.

http://www.newyorker.com/business/currency/with-the-iphone-7-apple-changed-the-camera-industry-forever

 

 

Believe it or not, I stumbled across this interesting video recently and am amazed at the uncanniness of this episode to the current Presidential elections.

Trump already had ambitions to run for president way back in 2011. He skipped the 2012 elections to primed himself for 2016. I am quite sure that he was surprised that he had gotten so far this year, as all the Republican nominees were such pussies and pushovers versus his take no prisoners style.

All the 8 wannabe comedians in this comedy roast were giving it to him, thrashing him for his egotistical character. “When the Donald and wife are making love, they will both be picturing the same person in their minds – Donald.” Trump was probably testing the waters in 2011. He had just appeared on SNL (Saturday Night Live) to mock himself and claims that the proceeds for this roast were for charity. Everyone in the audience was having a good time and no one was taking this seriously, especially about him standing for presidential elections.

Live is stranger than fiction and lo and behold, in 2016, Trump is now on top of the world, in a do or die winner takes all fight with Clinton. He has been training himself for all his 70 years to have bare knuckle fights with his opponents. His skin is so thick that a Tomahawk missile probably cannot penetrate.

Can’t wait for the first presidential debate on 26 Sep…

 

https://www.youtube.com/watch?v=MDKxiF2n1G4