looking back

I stopped blogging in 2013 and I accidentally chanced upon my own blog today. One of my post in 2011 was "Too Young to retire at 39?"

too young-to-retire-at-39

So what are the diff today?

In 2011
1. wonder what to put down as my occupation
2. application new credit card rejected
3.  skeptical look from people when I told them I was retired
4. wake up anytime I want


Present Day 2018 (7 years after retirement)
1. my occupation is Retired and I don't care what other people think
2. application for new credit card still rejected 😖
3. less or no more skeptical look. Maybe I look much older now when I stopped dying my greying hair
4. wake up at six plus for chauffeur duty for my schooling kids

Did I get bore with my retirement life? Hell no!

I also had a bucket list in 2011

bucket/dream list

Things changed and looking back, my current list is quite different now. In fact, I don't even have a bucket list and I am just happy to enjoy the simple joy of life.

For those curious about my financial investment, my investment portfolio has changed slightly

1.  switching from corporate bond to Managed bond funds (lesson learned when hit by Swiber and Ezion bond defaults)
2. investing more on private equities funds
3. more exposure to USD investment (lesson learned that SG can be screwed by China if our politicians don't know how to play world political game correctly)

A few good business opportunities came knocking on my door but I decided that life is short and I had enough to ensure my kids and future grand kids will enjoy our current life style.

Cheers

What I Did With My Wealth For 2012

2012 was a year that was very tough to lose money in the equity market. I was happy that my portfolio gained in value but was sad that I did not benefit much from the mini bull market as I cut lost on about 50% of my equities in October 2011. I expected a further slide of about 20% to 30% in equity for the year 2012 but at the end of 2012 the STI was in fact up by more than 20%! Equity was my worst investment bet although I did make some money selling a large chunk of my remaining equities.

As I was still cautious about the equity market, I further reduced my exposure to about 3.5% of my investment portfolio. I sold most of my Reits and dividend stocks and increased my purchase of SGD denominated Corporate bonds. Below are some of my new addition:

1. Aspial Corp, 5.0%, 3 yrs
2. Aspial Corp, 4.5%, 2yrs
3. Swiber, 5.8%, 1yr
4. Ezra Holding 5.0%, 3yrs
5. Maybank Perp 6.0% (secondary market)
6. ABN Amro 4.7%, 5 yrs (secondary market)
7. NOL 5.0%, 5yrs
8. Genting Perp, 5.13%
9. Wing Tai Properties, 4.25%, 10yrs
10. Cambridge MTN, 4.75%, 3 yrs
11. Olam Perp, 7%

At the end 2011, my monthly passive income was about SGD40K per month and some of the contributions were from Reits and dividend stocks which average about 6% to 7% dividend yield. However, when I switched from equites to bonds, the average yield for the switch caused a drop to slightly less than 5% for the same fund. So am I going to achieve my passive income target of SGD50K per month? I decided to increase my leverage and bought more bonds. The cost of leverage was about 0.91% to 0.93% p.a. for short term loan and I earned a spread of about 4%. In 2012, I am using banks' money to make more money! However, a world of caution just in case someone read my blog and decided to leverage blindly as well. My leverage level is about 25% and I have intention to increase it 30% this year. Most my assets are can be leveraged up to at least 60% but I am capping it at maximum 30%. A the end of 2012, my passive income did cross the SGD50k mark and I am glad to achieve what I had targeted for the year 2012. The value of my portfolio increased about 8% (not including properties appreciation) which I believed was below market average.

Most analysts and private banks predicted a bull market for 2013. These are the same people that predicted a slum for 2012 equity market. I have lost all confidence in their prediction and I have no ideal where to park my excess fund (cash flow from dividends, maturing bonds and leveraging). My ammunition in case of a significant market correction will be my 5% increase in leverage. I may use it or maybe not.

For those who are curious about my monthly household expense, it is about SGD15 to SGD20K per month and about $2.5K is actually insurance (also a saving). Beside some big ticket items like buying new cars every 3 to 4 years, I reinvest the all the saving. My financial target for 2013 is relatively easy: maintain my passive income of SGD50K per months and resist from buying more big ticket items.        

My Asset and Investment Portfolio

Note: I have taken out Loan as part of my investment portfolio to avoid any confusion. Life insurance is the cash value and not the insured amount.
      

What I did with my new found wealth (2011)

2011 was a tough year for my investment portfolio. The stock market was hit by the Tsunami in the first quarter and the Euro Zone problem in the second half of the year. At the start of the year, my fixed income was yielding more than 20K per month and I decided to venture more into equities to diversify my portfolio.

With my main focus on building up my passive income, I decided to buy into REITS listed in Singapore. Some of the REITS and equities that I accumulated are as follow:

REITS
1. Areits
2. Ascott Residence Trust
3. Mapletree Ind Trust
4. Cache Logistic Trust
5. Mapletree Log Trust
6. CDL Hospitality Trust
7. Suntec Reits
8. K-Green
9. Mapletree Commercial Trust

Dividend Stock
1. Singpost
2. Sats Airport

When the Tsunami struck in March, my equities portfolio suffered a lost of about 300K and I was wondering if my equities investment strategy was a mistake. Luckily, I stood my ground and the stock market fully recovered by end April. Gaining more confident in my stocks choice, I began accumulating even more equities. This wrong sense of confidence cost me dearly when the stock market dipped in August. The period from August to October was the most painful period of my life. I had never lost so much money in my life and it really hurt. I applied the same strategy of not cutting lost until October.

In October, I attended a market outlook seminar organized by one of my bankers and they were predicting a further slide of about 20% to 30% by the end of the first quarter in 2012. At that time, I had researched intensively on the Euro zone problems and arrived at the same conclusion that the Greek will eventually default. Thus I sold more than 50% of my equities on strength in late October. I was relieved when the market dipped again as predicted in the last quarter.

Still nursing my wounds, I decided to focus more into bonds again. By the end of December 2011, I had added the following bonds to my fixed income portfolio:

1. Guccoland, 3yrs, 4%
2. Cheung Kond Bond, perpetual, 5.13%
3. Banyan Tree, 3 yrs, 5.5%
4. Ascott Reits MTN, 4 yrs, 3.8%
5. DBS Pref Share, Perpetual, 4.7% (secondary market)
6. GLP Perpetual, 5.5%

When the year came to a end, I was more at peace with my investment portfolio. I decided to count my loses for the year 2011. At the end of the year, I was back to square one. I broke even! How is this possible? My equities portfolio was about 12% in the red. When I counted all my dividends from the fixed incomes and equities, I was able to break even with a tiny little profit!

At the end of 2011, I think I understood the meaning of diversification. My whole portfolio consist of properties, equities and fixed incomes. 2011 was a lousy year for equities but my fixed income and properties did quite well and more than make up my lost in equities. My average passive income for 2011 was more than 40K per month.

Portfolio: 2011

In 2012, I hope to achieve a passive income of 50K per month.

The Letter That Was Never Sent

Nobody in the company knew that my last day was on the 1st of November 2011. When the news was released to all the staffs, many were shocked that the company founders left so abruptly. I did not prepared any farewell speech but I did prepared a farewell email that was supposed to be sent shortly after the announcement. However, for some reason, this email was never sent. As time passes, I find less reason to send out this email. Below was my email to all my ex-employees that was never sent:



Hi Everyone from XX Hydraulic

I would like to express my pleasure to have the opportunity to work with all of you. Some of you like SP Ng, Eric, Louis, Tay, Ah Huat and Ah Hin were with us since the first day XX Hydraulic was incorporated in 09.09.1999. As you all know, 1st Nov 2011 is our last day with GXXXX and I would like to bid everyone a farewell and hope all the best in your future endeavor.  

I am sure that some of you are very curious why we leave GXXXX and what is our future plan.  Working with GXXXX for the past 3-1/2 years, I begin to understand the difference between privately owned business and corporate world. In a private business, the owner takes ownership of the risks in all business decisions while corporate managers follows the collective business decisions decided by the upper management. What work best in each entities does not not matter to the corporate as conformity is valued by the upper management. Entrepreneur by nature, I was unable to fit in well into he corporate environment. I stood out like a sore thump. 

I realized this fact in 2009 after BXXX left and different managements come and go. I would like to specially mention BXXXX because I truly admired someone who was willing to fight the corporate and let us managed the company the entrepreneur way. His faith in us was proven right when XX Hydraulic's sales grew by 20% in 2008. This was considered a formidable task as that was the year we saw the financial melt down when Leman Brother collapsed. In fact, the GXXXX's CEO gave special mention about our achievement in his annual report briefing at GXXXX HQ in Colorado even though XX Hydraulic is just a little red dot in GXXXX. This would not be possible without all of you working together as a team.   

Tired fighting with the GXXXX management, I decided to 'fade' away in Nov 2010. That was the time I told KM that I am willing to hand over the management of XX Hydraulic to someone else. At that point in time, no one knows that I had decided to leave GXXXX when our financial obligation to GXXXX was over. I know that I had been telling all that I was happy with GXXXX and I am not leaving. I am sorry to those whom I lied about my future with GXXXX. I was just telling a white lie so that the transition would be smoother and less disruption to XX Hydraulic's operation. 

The person that I recommended is JXXX and some of you might question the wisdom of my choice. To tell you the truth, I have no idea what is the quality of JXXX's leadership but I do know his character. I know that JXXX is someone that will not fire someone just because he doesn't like your face or attitude. In my own opinion, all the staff at  XX Hydraulic will be better off with a Asian manager rather than a Caucasian. A Asian manager will have a better understanding of our culture and more tolerant towards all at XX Hydraulic who are used to our traditional style of management. By the way, I still think our style of management is still the best for us XX Hydraulic. This is my personal opinion and not everyone will agree with me. If there is any advice that I would give to the management in GXXXX, it would be The Ant Story that I have attached. Never loose sight of the all the people who truly contributes to the success of XX Hydraulic!  

And finally, something about my future. There are many people, relatives and friends asking what is my future after XX Hydraulic? To be frank, I have a hard time answering this even though I have thought about it many times over. To prepare for this event, I have started my financial planning even before we decided to sell XX Hydraulic. Life has been very good to us and I am very lucking not to have encountered any life changing failure. I have decided to take a step back and enjoy the simple joys of life that we have neglected with our busy schedule of life. I do not have any 'big plan' for at least two years due to the trade exclusion clause that I have signed with GXXXX. I will chill out for at least a year or two before deciding what kind of business I would like to start again. Maybe I will truly retire.

Once again, thank you for your past support and may happiness be with you.

Best Regards

YJ72

Reaching Forty Finally

Today, I am finally in my forties using the lunar calendar. I would like take this opportunity to wish all my friends and relatives a prosperous and healthy year of the dragon.

Huat Ah!

Starting Your Own Business (part 1)

I had been approached my some budding entrepreneurs to invest in their business ideas. Most idea lack substance or sustainability and do not appeal to me. All investors have their own key factors that trigger their interest and I would like to share my point of view on starting a business. My view is very simplistic but it work for me:

Identify the business (Part 1)

- Select a business that is not too competitive or common. E.g. starting a hardware shop would have a better chance of success than a handphone shop in the neighbourhood centre. Everyone is familiar with HP but not many know about hardware tools and equipments. In short, if it is too easy or simple, others would have done it.

- Select a trade that you will be better than others. E.g. those in the the hardware trade do not attract top talents. If you above average, you already have an edge. (no insult meant to those in hardware trade) 

- Select a trade that you have specialize knowledge. If you don't have it, learn it by working in a similar business to gain in-depth knowledge. 

- Select a business that produces millionaires. E.g. most hardware bosses own private properties and drives a Bimmer , Mercedes or even Lambo. This eliminate the business sustainability and market size analysis. If the business tow kay can get rich, so can you.

- Select a business that you can sustain with your fund. Do not be greedy and become a wholesaler even before you start off with a small retail outlet. Expansion will be easier when you have gained more experience and have more fund.

The above are my views for those that seek advice from me on starting a business. Most are surprise that I do not encourage them to prepare for text book style detail business plan. All business are different and more so in a different country with different culture. The real business world is very different from the text book environment and we need to be smart enough to see it and make changes accordingly. To succeed, you need to know yourself which is covered in my future installment.  

Know Yourself (Part 2)

Business Profit and Cost (Part 3)

Books For Aspiring Entrepreneurs

Throughout my life, I never like reading book of any kind. The only type of book that I read was text book so that I can get through Singapore education system. However, there are two books that caught my attention.

Who Moved My Cheese?

When I started the 'new' family business, my brother and I were the executive directors and my father was the 'adviser'. As our business grew each year, I had to deal with more employees and managed everybody problems, needs and expectations. I was stressed out minding everyone business and making sure that the business ran smoothly.

Through one of my friend's recommendation, I bought the book 'Who Moved My Cheese?'. You may ask why this book as I am the one moving the cheeses around in the company. To make a business successful, we need to understand that the most important asset is the people. Without happy and committed employees, the company will not be successful. This book actually provided me some insights on the change in life and work that affect everyone and the reactions to these changes. A good management need to understand and empathize what the employees go through so that the best possible decisions can be made.    


Rich Dad Poor Dad

When I was in my late twenties, I was given a book titled 'Rich Dad Poor Dad' by one of my father's business partner, Mr G. Since it was given by someone that I have respect for, I forced myself to read it and hoped to understand the significant of his gift. I never really finished the book but I gathered that Mr G wanted me to understand that being a entrepreneur is one of the means to gain financial freedom.

It is not difficult for me to understand this concept as my father was a entrepreneur. However, I did not really believed that my father achieved financial freedom just by owning a profitable business. I believe that to achieve financial freedom, we need to convert our asset class back to cash or equivalent so that we can make money work for us and not us working like crazy for the money. Being a entrepreneur need full time commitment and time is very precious to us. We had significant business asset but very little time to enjoy the fruits of our labour. Thus, financial freedom is truly achieved when we have broken free from the 'Rat Race' of the entrepreneur.

The opportunity came when a foreign company expressed interest in acquiring our business. Without much hesitation, I sized the opportunity and convinced my brother and father to sell the business. Selling the business does guarantee financial as we still need to learn how to make the money work for us. I am still learning today and I believe it will be a life long journey.

    
Note:
I understand that many have read these two books but everyone form different opinions and react differently. As for me, I decided that if I am in a dilemma, I will apply the Buddhism concept of Karma to assist in my decision making process that may affect the life of others. I am not a religious person but it helps me to have a peaceful mind