\n<\/p>\n
Portfolio allocation as of Mar ’23.<\/span><\/p>\n Another relatively quiet month in terms of capital deployment, with the main purchase being Digital Core Reit (“DCRU”) at $0.50. It promptly fell to $0.40 within a few days, as one of their major customers was facing refinancing concerns. I think my purchase price had a reasonable margin of safety, as DCRU was trading at around 0.6x P\/NAV at that point. Additionally, DCRU is one of the lower geared reits here, which would provide some buffer in the event that cap rates expand and valuations fall.<\/span><\/p>\n I also added a small amount to my Syfe Reit+ portfolio, which is part of my regular DCA.<\/span><\/p>\n Taking stock at the end of Q1 ’23, my overall portfolio allocation stands at 50% in Singapore, 24% in Hong Kong and 26% in the US and Developed Markets. This is roughly in line with how I envision my long term portfolio allocation to be. As for my active vs passive split, this stands at 44% active vs 56% passive – the passive component has actually gone down compared to the last time I mentioned this (62% passive in Sep ’22). I am a strong believer in passive investing, and longer term I want to increase my allocation to passive instruments.<\/span><\/p>\n As for dividends, total dividends collected for Q1 ’23 came in at around $500. I didn’t track the corresponding number in Q1 ’22, so I don’t know how much of an increase this is. But it appears to somewhat fall short of my dividend target for this year. In my previous post, I mentioned that I am on track to hit my $6k annual dividends, this is contingent on being able to deploy capital over the next 3 quarters. With last year’s bonus paid out earlier this year, I do have a considerable amount of cash on the side. However, I want to be selective in this environment, and dollar cost averaging of passive ETFs and looking for undervalued stocks remain my preferred strategies.\u00a0<\/span><\/p>\n Random musings<\/span><\/u><\/b><\/p>\n This is slightly different from the \u201cFIRE musings\u201d section It might be obvious, but I would still like to highlight Having said the above, I think the perspective I\u2019m sharing For a start, I am single and I don\u2019t have kids. These are I think it would be good to set the context for this For the purposes of this discussion, I think any inheritance I think this is most relatable, especially in the context of a couple in their 50s Example: <\/u><\/span><\/p>\n $800k HDB flat \u2013 fully paid up, possibly purchased for much Based on the above, that\u2019s a combined net worth of SGD $2 million per couple, You might look at the above numbers and say:<\/p>\n 1) That\u2019s too low, I have more! Congrats, if you have kids, and 2) That\u2019s too high. As I\u2019ve mentioned above, your priority For those of you who fall in to category (1), you can adjust We know that 20% of Singaporeans live in private condominiums This 1 in 3 could be your colleagues, your relatives, your Let\u2019s now look at the 3 examples. <\/span><\/p>\n The \u201cMass Affluent\u201d<\/span><\/u><\/p>\n The first example is a Facebook post made by someone by the https:\/\/www.facebook.com\/groups\/seedlyfinance\/posts\/2386572571634095\/<\/a><\/span><\/p>\n To summarise what Michael had shared, their family was thinking The two sections that stood out for me in the article were:<\/span><\/p>\n \u201cIf this goes well, the portfolio can give us about 8k in \u201cI have also encouraged her to save and invest since she was I won\u2019t interpret the \u201cwill not have to work a single day in By selling their condo and buying a cheaper HDB flat, they The \u201cHigh Net Worth\u201d<\/span><\/u><\/p>\n The second example was a recent Straits Times article that I
\nthat I usually include at the end of my monthly updates. I\u2019ll be discussing the
\ntopic of inheritance, which based on what I\u2019ve seen, is definitely something rather
\ntaboo among Singaporeans. <\/span><\/p>\n
\nthat if you\u2019re in your 50s or older today, and nearing retirement \/ have
\nretired, then obviously your main priority should be to ensure<\/i><\/b> your
\nown retirement adequacy<\/i><\/b> first<\/i><\/b>, before even thinking about
\nleaving an inheritance for your kids. <\/span><\/p>\n
\nwill still be controversial \u2013 perhaps some may agree with my point of view, but
\nI\u2019m sure there will be a fair share of people who disagree. At the end of the
\nday, it\u2019s your money, your call\u2026 if you\u2019ve already made up your mind that you
\nwant to spend all your money before you die (because you earned it), then by
\nall means do so!<\/span><\/p>\n
\nmainly my observations of how people perceive the utility of money and approach
\nthe topic of inheritance, by sharing a few examples that I\u2019ve come across in
\nrecent years. <\/span><\/p>\n
\ndiscussion \u2013 people tend to use the word \u201crich\u201d a little too broadly. \u201cRich\u201d
\ncan be further split into mass affluent, high net worth and ultra-high net
\nworth. The 3 examples I am sharing further below fall into each of these
\ncategories.<\/span><\/p>\n
\namount nearing or greater than SGD $1 million (including<\/i><\/b>
\nowner-occupied residential property) would be relevant \u2013 broadly, people in the
\n\u201cmass affluent\u201d category and above. The reason I include owner-occupied
\nresidential property is because we are discussing the topic of inheritance here
\n\u2013 so obviously when you pass on, the property you are occupying forms part of
\nthe inheritance. I think this probably represents the top 20% to 30% of the
\nrelevant age groups (people in their 50s and above), mainly because of the sky-high
\nproperty values in Singapore. But if you think about it, while $1 million and
\nabove appears to be a large number, it may be more common than you think \u2013
\nafter including residential property, CPF accounts, equities, cash value of
\ninsurance policies and savings.<\/span><\/p>\n
\nor 60s thinking of bequesting their wealth when they eventually pass on.<\/p>\n
\nless.
$500k CPF accounts at retirement age (combined; FRS + Medisave)
$400k investment portfolio (combined)
$200k cash value of insurance policies (combined)
$100k liquid cash \/ fixed deposits (combined)<\/span><\/p>\n
\nor SGD $1 million per person. Obviously, some of that would be drawn down
\n(spent) during the retirement period, but even if the eventual \u201ctotal net
\nworth\u201d is halved, and given that people usually have 1 or 2 kids these days \u2013
\nthat\u2019s still a sizeable sum of inheritance.<\/p>\n
\nyou believe in the idea of inheritance, then they are lucky.<\/span><\/p>\n
\nshould be to work towards your own retirement adequacy first<\/i><\/b>. <\/span><\/p>\n
\nthe above numbers in the above example, based on your personal circumstances. I
\nthink when people think of \u201cinheritance\u201d, probably the complex cases of the top
\n1% comes to mind \u2013 infighting among siblings for a larger share of the pie, long
\ndrawn-out lawsuits and so on. \u00a0<\/span>My point
\nhere is that the groups of people in the category of having SGD $1 million net
\nworth, including owner occupied residential property, is actually more common
\nthan you might think. And people who fall into these groups should give
\ninheritance some serious thought as well. <\/span><\/p>\n
\nand landed properties, and the average price of an OCR condominium probably
\ngoes for around SGD $1.5 million today. Additionally, with the top end of HDB
\nflats transacting for anywhere from $1 million to $1.5 million\u2026 I would think
\nthese form a sizable group of Singaporeans, perhaps closer to 1 in 3 of the relevant
\nage groups. <\/span><\/p>\n
\nparents, or even yourself, who will be dealing with the \u201cgood\u201d dilemma of
\nhaving to decide how to pass down the inheritance.<\/span><\/p>\n
\nname of Michael Chong, on the Seedly Facebook group. I saved this post when I
\nread it a few years ago, because I felt that the story represented what is
\npossible for a significant number of people in the mass affluent category. <\/span><\/p>\n
\nof selling their condominium and moving to a 4-room flat. Using the proceeds
\nfrom the sale, together with their existing investment holdings, they will
\nlikely have around SGD 2.5m combined as a couple. Based on his projected
\nreturns of 4% a year, will yield around SGD 100k\/year or about $8k\/month.
\nPresumably, this passive income will be enough to sustain their family
\nexpenses. Additionally, he mentioned that he will still get CPF Life payouts
\nwhen they turn 65, potentially bringing the passive income to 10-12k\/month for their
\nfamily of 4.<\/span><\/p>\n
\npassive income monthly, with some capital gain. My dream is to pass this on to
\nmy children and grandchildren one day. Maybe my grandchildren will not have to
\nwork a single day in their life, and can follow their passion.\u201d<\/span><\/p>\n
\n18, so she has about 6 years of experience. I have also taught my children
\nfinancial responsibility, so they are very thrifty too.\u201d<\/span><\/p>\n
\ntheir life\u201d too literally, but rather, I think the idea of allowing his
\nchildren or grandchildren to freely follow their passion sounds like a great
\nlife to live. I also think the part about imparting frugality and managing money
\nis paramount, especially in the context of succession planning.<\/span><\/p>\n
\ncould use the proceeds, plus their current investment holdings, to create a
\nperpetual cash flow generating machine for themselves, their children and even
\ntheir grandchildren. Simply amazing.<\/span><\/p>\n
\nread. Mr Yong is the CEO of a marine engineering firm. <\/span><\/p>\n