SG FI Dad Portfolio Dividends 3Q2020 Review

‘Wake me up when September ends’.

We are into the last quarter of 2020. And what better time than to review the dividend earnings. Despite the volatility and fear in the market now, we have continued with our DCA tactic and adding to our positions through our Share Builder Account and StashAway. The exposure to US markets through StashAway has been good and we intend to rebalance our portfolio slightly at the end of the year or the coming year to factor in for more growth potential. 

Thus far, we have received around $850 in dividends with three months more in 2020. The projected dividends that we will be receiving has since been revised up to $1100 from $700 as we have continued increasing our portfolio size.

This year really has been eventful, in both the good and bad sense. Covid-19 has put forward a new normal in our daily lives. I hope everyone is adjusting well and staying safe!

I use Stocks.Cafe to track my dividends and portfolio. If any of you are interested to try it out, you can check out my link here!

Share with me your thoughts and comments on having a dividend income stream!

SG FI Dad, out.

StashAway Report Aug 2020

 A little late this time in updating our StashAway holdings. We are already halfway through September?! Time really passes quickly. Little bun is going to be six months really soon and we will be starting her on solids gradually. Almost got into a car accident recently. Thankfully only I was in the car and there was no real damage, just some curb rash and maybe a visit to the workshop to ensure wheel alignment is still okay. 

Okay, enough rambling. Onto the numbers. 

I have been using StashAway since 2017 but the contribution has been on and off then. More recently, we have made it a critical component of our portfolio as it provides us exposure to the overseas market. We have 5 portfolios across 2 accounts as we like to set different goals with different timelines.

Statements as of 31 Aug:

Our total investment is $9,671.19. Our total gains for the month is $84.52. 

Have attached some graphs depicting our portfolios' performance. Pleased to see how everything has recovered. Hopefully our portfolio remains resilient even in the face of all this volatility and uncertainty. 

If you are interested in getting started with StashAway, you can check out my link here to sign up. We both get up to $10,000 SGD managed for free for 6 months. Win-win!

Share with me your thoughts and comments on if you have robo-advisors as part of your portfolio! Stay safe everyone!

SG FI Dad, out.

Thoughts about the 1M65 concept

 1M65 stands for One Million by Age 65. It is a unique strategy popularised by Mr Loo Cheng Chuan. You may refer here for a breakdown of his strategy and thoughts on retirement planning.

Recently, I had the time to watch a Webcast that Mr Loo hosted and it was eye-opening. Both the Mrs and I knew that CPF will eventually form the foundation of our retirement portfolio. Something that is virtually risk-free and backed by the Singapore Government, what's there not to like??? He went on to list a few misconceptions that may cause people to not want to have their money in CPF.

Nonetheless, the Mrs and I are definitely looking to execute the 1M65 strategy as part of our retirement plans which essentially means that by 65, each of us should reach a minimum of $500k in our account. I would say there are probably short term, medium term and long term goals for us.

Short term goals for each of us (< 5 years)

Attain a total of $130k in our Special and Medisave Account by age 34.

Mr Loo said that the combined sum used to have a ceiling of $130k back in his day. However, with a time horizon of more than 25 years, compound interest will have a significant effect in increasing this sum substantially. We will be looking to transfer a sum (either monthly or lump sum at the end of the year) from our Ordinary Account to our Special Account.

Medium term goals for each of us (between 5 to 10 years)

With the foundation of this strategy achieved, our next move will probably be two-pronged. Firstly, we will probably look into initiating a small position using our CPF monies into a S&P Index fund or a similar ETF. At this point, we are looking at a maximum of 10% of our CPF funds to mitigate for any drawdown or volatility risks. Second, we will try to reduce/pay off our mortgage principal yearly to reduce the accrued interest payable to CPF should we decide to sell off our place in the future. On that note, Mr Loo did mention that he does not encourage people to buy private properties whether it is for staying or investment. Rental yields in Singapore have been on the downtrend especially so after Covid-19 hit us. But we will see what the future holds. I think I will be contented just staying in my HDB for now. heh.

Long term goals for each of us (>10 years)

Adjust CPFIS and close position if necessary. Based on my calculations, we should be able to hit 1M65 in our combined accounts by age 45 barring any other black swan events or you know, if life decides that we need more hurdles. Really from 10 years onwards, we hope to be cruising and be contented that our earlier sacrifices have paid off.

Share with me your thoughts on the 1M65 strategy and CPF!

SG FI Dad, out.

Planning Our Retirement

'If you fail to plan, you plan to fail.'

Retirement planning has been one of those things that people tend to put off thinking that time is on their side. Honestly, when I started working a few years ago, I thought and behaved like that as well. Thankfully, the mindset change has occurred pretty quickly and my wife and I are now working hard towards ensuring that our retirement is planned for.

What is more worrying is an article published here that showed most Singaporeans are falling behind on their retirement plans. This has serious consequences such as lower quality of life as well as higher dependence and financial burden on your family members/relatives.

When it came to us looking into planning our retirement, time appeared to be on our side. We are in our late 20s, so we are looking at a time horizon of 30-35 years in the workforce. Our goal was to ensure that we are able to fund our child through university while maintaining a moderate lifestyle after retiring. Various sources of income have been considered such as dividends from our investment portfolio, maturity of our endowment and savings plans and income from CPF in the future. We estimate that our current annual expenses is between 30k-40k. We will examine this more thoroughly at the end of the year to gain better resolution and update our plan accordingly.

Our plan is somewhat taken after the Lean FIRE/FIRE movement, without the Retire Early portion. Having discussed, we both see ourselves working till we are at least in our 50s if our job continue to provide us with a sense of fulfillment. So we are looking towards a portfolio size of 20-25x our annual expenses. On the upper band, we are looking at a minimum portfolio size of ONE MILLION. Honestly, I think this is achievable and will not take the entire 35 years to achieve. But this will be the bare minimum that we will be targeting. Somewhat like a road to ONE MILLION goal. With 1M, the save withdrawal rate of 4% (either through divestment or dividends) will also cover our annual expenses while maintaining the size of the portfolio.

As of now, we are almost done saving with our emergency funds and will look towards bolstering our investment portfolio in the next two  years substantially. We consider ourselves fortunate as we are currently staying with our parents and do not have much liabilities to our name.

The takeaway from this post is to plan your future. Because no one else will. And no one owes you a living. If you're married or have a partner, it is important to be on the same page and get their buy-in so that you can embark on this journey together. After setting your goals and laying out the plans to get there, execute with focus and in time, you will reap the rewards.

Share with me your thoughts on retirement planning!

SG FI Dad, out.