Portfolio Review (March 2023)

Review of my Portfolio (31/03/2023)

Total unrealized loss: -7.9%

YTD performance: +15.2%

Added in March

Goal 1: ( $ 21,648.09 / $66,186)⚔️

Growth Portfolio: XLY, META

Dividend Portfolio: Allianz income & growth, OV8, O39

Portfolio Weightage

Dividend Recieved

Goal 2: ($2,255.55 / $11,000)❤️

Dividend recieved in March: $1,344.52

Opinions

As 31/03/2023

• US Regional banks crisis caused $SPY to finally plunge to ~$390... 迟来的夏天. 😆
• Personally, i dont invest in US banks, because all banks are cyclical and highly leveraged in nature. Thus if you going to invest in banks, always buy the biggest and most reputable banks.
• This event seems to also affect the 3 local banks? 🤔 All dropped, fear? 🤔🤷 ♂️
• Not exactly cheap, but i added some OCBC because is more affordable for me. If the other 2 banks fall more then i will buy.
• i mainly invested in SG banks because they are more conservative compared to US banks and they pay an attractive, tax-free dividend so even they go through cycles i still continue to get paid. 😄
• For cyclical stocks, is best to buy when there is a crisis, else is not worth just for the sake of dividend and there is no crisis yet.

• $SPY ended March with A very strong rally. Whenever, the price shoot up like that is never good.
• I think it will come back down in April to ~$390 again, then i will buy again.
• Nonetheless, the overall trend is still up and yes, i am still bullish.

Increasing income and Earning Money

More questionable advices.😆

• To increase your active income, it will definitely required more time and effort, there is no free money or shortcut.
• While you can increase your income through investing in cash generating assets like dividend stocks and rental from real estate but you will need a huge capital to generate a meaningful amount.
• By invest $736 per month consistently, you may achieve $1 million in 30 years. Which is equivanlent to $400k with 3% inflaton adjusted today. Have you even been DCA-ing the past few months or cripple by the fear of recession?
• The truth is investing is not a magic pill to become rich or achieving financial independent if you do not earn much.
• There is a limit how much you can save. There is a minimum expense for survival, the closer you get to that amount the more miserable your life will be.
• The FIRE community focus on frugal/minimalistic lifestyle, sacrificing, saving and investing, that is why most of us won’t achieve FIRE. The most important part of the equation is often left out, increase your income.
• The fastest way to build up wealth, while maintain certain lifestyle without feeling terrible of your life, is still through increasing your active income.

• When we talk about active income, the first thing that come to our mind is to have a good career.
• The common career advice is to align your career goal with your financial goal. Develop skills and relevant experience, choose a career path that you will like with a high earning potential in the future.
• In reality, our profession had already been pre-determined according to our course in our tertiary education, so you need to be very clear what you going to do in the future 🤷 ♂️.
• Unfortunately , most of us are lost during this time, not sure what to choose. Those with a bad academic results, dont even have a choice.
• For different Industry, your starting salary can be very different and that serve as a benchmark for future salary increment when job hopping.
• Of course, you definitely have the ability to switch your career path to an unrelated industry but you have to either take a pay-cut or go back to school, waste time & money.
• Career switch is expensive especially when you had already been working for some time.

• If you want to follow your passion, can you keep up with the rising cost? If you want to switch because of higher salary, can you handle the stress? If you cant persevere after switching then you will (waste time + money) x2

• Inorder to increase your salary, you have to go for courses for upskilling (FOMO education) and become more valuable, is a misconception.
• It will definitely add some value to the organisation, but most of the time the value, $$$, may not be transfer to the employee.
• But one thing is guaranteed, you will be rewarded with more work 😆.
• However, if you have a real action plan to monetize the skills, then go for the course, it will be a good investment.
• We will not be able to learn everything in the world, we just need to learn things that have real impact in our life.
• Courses cost money & time and these are always a limited resource. Nothing is too late but is it worth it?
• The truth is you do not need to be the most skillful person to earn good money. Else the richest people will be all the trainers and lecturers.
• And there is a saying:

• Following a general advise will usually lead to an average lifestyle, because the media is always an echo chamber.
• The facts are most professional advisors around us who give investment advices have never really make their fortune through their investment or those who give career advices didnt really walk the path that we had walked or buisness consultant, who is just an employee, never really started a buisness before...🤯
• The best person to give the advise is the person who was in a position similar to you previosly but had already achieve what you are after.

• The people we hang out with are usually the same level as ourself, thus we need to be self driven to explore and expand our network. i.e. dont fall for fake guru that charge you thousands of dollar.

• I do acknowledge, the traditional education, getting a bachleor degree or a professional certification is valuable, especially in Singapore.
• Because when everybody have it and you dont have, you will lose out. Employers love to compare.
• Experience is more important, but without a proper certification, you dont even have a chance to enter the industry you want and the employer will have an excuse not to promote you.
• The value for a degree/professional certification is determined by the market, but for skills...🤔 is depend on your boss's perception and it can be subjective.
• So at least go for a bachelor degree, just not to lose out.

• The future is always an unknown so I always focus on maximizing my earning NOW.
• Every effort should be adequately compensated, that is my belief. Some people are satisfied with just getting a pat on the back but i prefer cold hard cash.😆
• Job hopping can be an easier path to increase your salary, but if your salary is already at market rate then it will be very difficult.
• In my opinon, the simplest & fastest way to double the income is just to have a side hustles.
• It is more effective to earn an extra $1k per month by taking up another job than waiting for an salary increment and playing politic game.

• The time spend will be almost the same as doing OT and taking up more responsibilities in your full time job, where stress level will increase but a pay rise is not a guaranteed.

• There are only two way to earn money, (1) be part of someone else buisness or (2) create your own buisness.
• The first way, being part of someone else buisness, eg. private hire driver, delivery rider, private tutor through agency or any part time jobs.... is the fastest way to start, no need to think too much.
• These jobs usually required little to no skills, often labelled as dead-end jobs and is not ideal for a long term career, but it doesnt mean you cant earn good money from it.
• There will always be a consistent income, if you put in consistent effort, but have little or no income increment, this is just the nature of these jobs.

• 不管黑猫白猫，会招财的就是好猫😆, thus it still have a place in my overall plan. 🤑

• The second way, you may either go by the product route or service route.
• The service route usually is a less capital intensive way to start and have little to no overhead.
• Generally, you have to figure out other people needs and what you can do, eg tutor, photographer, make-up artist, aircon servicing, moving services, Ecommerce...
• You will need to understand your strength and weakness, in order to pick a service that suit your personality & capabilities.
• You dont necessarily have to love it, but you must be able to do it.

• Doing that, you are now a freelancer, not yet a buisness owner. Money is good, but it can be better.

• The differences between a freelancer and a buisness owner is Leverage.
• Sometime there will be too much job for you to handle or cilent request something you do not know how to do or simply feel burnout dont feel like doing.
• As a freelancer, you can never say "No", else there will be no next time, especially to corporate cilents, need to build a regular customer base.
• You will need to know who in your network is able to do the tasks and leverage on their skill and time.
• Thus is important to build your network, not only customers but also other freelancers.
• If you want to earn more money, you must also let others earn money (你要赚更多的钱，必须也让别人赚钱).
• The hires are not your employee thus there is no fixed salary to pay, you only pay when there is an assignment.
• This is a risk-free buisness model, which i used, for my small buisness.
• Many buisness go bust because they have to pay rents and salary, despite no income.
• It works both way, sometime i am also been leveraged on, the good thing is i do not have to constantly look for customers.

• Always create a win-win situation, to establish long term partnership and have good customer relationship. Everybody earn money, everybody happy.

• When you work for a company, you will never be paid more than your manager and your worth is determine by the company. 工字不出头.
• The company will try to pay you as little as possible, because the lesser they pay you the more they have for themself.
• When come to increasing profits for a buisness, keeping salaries low is a frequently use strategy.
• There is always a conflict of interest between employer wanting to maximize buisness profit and you earning your financial freedom.
• However, having your own buisness, the only limiting to your income is yourself.
• You do not need to quit your job to start a buisness. Keeping your job while starting a buisness at the side minimized financial risks and allow to make long term buisness decisions that help to build a solid foundation.

Income Trend

• It is a common sense that with more income sources, the amount of income will increase.
• However, the nature of income is different.
• For the full time job, it is usually a diminishing returns curve, you put in 6 hours or 8 hours or 12 hours your salary is still the same.
• For dead end job, the more time you put in, the more income you have. if you put less time , then less income. It is a linear relationship.
• For buisness income, at the initial you will have to put in more time but the income is insignificant, but due to the leverage effect it will grow at a much faster rate.

Simple Illustrations

• Assumption:

(1) The company provide an annual inflation adjusted increment of 3%

(2) Each promotion have an increment of 15%

(3) Started with a median salary of $3500 at 29 years old.

• Three person worked in the same company with same starting pay.
• Person A got a best career path, because he done everything perfectly and is recognised by the management. Achieved ~$7k+ @ 44 years old which is eqivalent to a manager role in some industry.
• Person B had also work very hard, but there is only 1 manager position in every department. Promoted twice in his career (assistant manager).
• Person C had only been promoted once (senior executive) but he has a side income of just $1.5k/mth or $18k/year. Assuming no growth in side income.

• Person C will have the highest take home pay at the much eariler stage than the other two colleagues despite career stagnation.
• Due to the time value of money, Person C will likely to have the highest networth in the future, simply because he has more money to compound over a longer timeline, if he invested wisely.

Conclusions

• Having a side hustles is the key to increase your total income if you are an average salaried worker.
• Because the amount that you earn is directly link to the amount of output rather than the salary ceiling.
• You need to be skilled, but not necessarily highly skilled, to earn good money.
• The key is to be honest with yourself, if you really suck at certain thing just accept the fact, have the courage to get out of your comfort zone and be patience.
• Always look for options, take the easiest path, doing things that matches your strength and avoid your weakness.

• Because there is always more obstacles and stressful to go against the flow, the probability of success is higher if you focus on your strength.

• A clear indication that you are heading in the right direction of escaping the rat race is when you progressively become less reliance of your full time income, aka you are able to save 90 to 100% of your FT salary. Next, less dependent on your side income. Finally, fully depend on your investment.
• In my opinon, financial independent should be a progressive process and it dont happen overnight. There are transitory phases.
• I dont advocate quiting your job, but what i support is to build a diversified sources of income stream and earn more money.
• Usually the only thing that separate the life you have and life you want is just money. The sooner you earn that money, the sooner you can have the life you want.

Previous Review

https://seedly.sg/opinions/portfolio-review-february-2023/