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Takingstock @

I work in accounting and do balance sheets, budgets and cashflow @ work. In my free time, I apply what I learn in school and work to my personal finance and have learned quite a bit over the past 12 years. I feel I have reached a point where it would be really good to share some of the lessons I paid my tuition fees (ie lost $$), so that others could learn and benefit without paying those fees. =) I really think this would be a good way for me to contribute to society and hopefully help a few folks to get through in life. I will be penning some of my thoughts and knowledge at the blog below.

Takingstock @

About

I work in accounting and do balance sheets, budgets and cashflow @ work. In my free time, I apply what I learn in school and work to my personal finance and have learned quite a bit over the past 12 years. I feel I have reached a point where it would be really good to share some of the lessons I paid my tuition fees (ie lost $$), so that others could learn and benefit without paying those fees. =) I really think this would be a good way for me to contribute to society and hopefully help a few folks to get through in life. I will be penning some of my thoughts and knowledge at the blog below.

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Takingstock @

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  • Questions (8)
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SeedlyTV S2E07

Giveaways

[GIVEAWAY] What are your favorite ways to save or multiply your savings and why?
Takingstock @
Takingstock @
Level 6. Master
Updated 5d ago
I am one of the 月光族, my cash float is usually less than 500 before my pay day. I only use OCBC 360 as my main "treasury account", and have fixed transfers each month towards different pools 1) SSBs - not a lot here but I like stashing reserves here, because I still have a tendency to "overspend" when I see money in my accounts. I sort of do a mini DCA on SSBs so I buy more when the yield is more than 2% and less when the yield is less than 2%. But this only happens once or twice per year. 2) regular savings plan - I use bcip to buy few stocks monthly. 3) transfer from my saving goals to cpf top up and srs. 4) when I can't do cpf top up anymore (probably 2022), I plan to use that budget to pay off the cpf amounts borrowed for property purchase. Really want to clear off this loan before I turn 55. After the heavy spending on items 1-4, I end up 月光族. That's why I have only two bank accounts... A lot of the cash savings are spent elsewhere...
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Lifestyle

Personal Finance 101

General

What is your key principle to keeping your personal finances in check and why?
Takingstock @
Takingstock @
Level 6. Master
Answered 5d ago
Most important rule is cash outflow <= cash inflows, then do budgets and try to keep within them. Use automated bank transfers and giro deductions for additional discipline and takes temptation away from the process. Because the amounts I can spend for each purpose is already determined in my budgets, I make my processes simpler because I only can spend within the budgets. When overspending happens, I actually have to figure out ways to save or cut some other spend to fill the gap / overspending. Eg I had to cut a few beers and eat more cheaply for two weeks to carve out money to pay angpow for a wedding that I didn't budget for.
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REITs

Investments

Property

Stocks Discussion

If good REITs give rights issues, does it dilute the quality of the REIT?
Takingstock @
Takingstock @
Level 6. Master
Answered on 01 May 2020
Right issues are not necessarily bad. The key thing to note is the purpose, and whether they say it is yield accreditive (generates more income per share after issue) or yield dilution (reduces income per share after issue). So yield accreditive = good Dilution = bad Generally good reits leave room in their debts / gearing and do not issue rights so often unless there is bargains to be found and they want to raise a lot of money quickly to fund the purchase. I have taken advantage of rights issue of several reits in 2018 / 2019 to acquire more shares in the reits then I were to from the market.
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COVID-19

Property

Hii all, If the landlord is not willing to pass on the rental rebate, who can i look for help?
Takingstock @
Takingstock @
Level 6. Master
Answered on 01 May 2020
I assume you are referring to the property tax rebate in the Solidarity budget... The property tax rebate is GIVEN ONLY TO NON-RESIDENTIAL PROPERTIES , so basically malls, office buildings, factories, warehouses, etc. So if you are referring to Residential - there is no rebate given to the landlord, if he gives you one, it is out of his goodwill. Non-residential / commercial: There was supposed to be legislation to have the rebate passed down to tenants as the property tax rebate is likely to offset a month or two of rentals. Just wait for it.
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Career

Education

Savings

Lifestyle

Is taking a Full time masters degree viable now?
Takingstock @
Takingstock @
Level 6. Master
Updated on 30 Apr 2020
If your family is not dependent on you making money to help make ends meet, and you have the money to pay for the course or able to finance rather cheaply, it is a good option. But note there is no guarantee that we may exit the recession by the time you are done with the masters either. A few articles I read suggest that the economic situation of your graduation and go out to work year has a large impact on your salary over your entire working life. It has some truth in it.... Eg if you start working in a recession year, chances are the pay range is limited or suppressed, and the types of job opportunities may also not look impressive, so when you try to get the next job, people look at your last pay, experience and set the new salary package based on that. In that sense, over your life, the pay of the first job sort of sets an anchor on which future pay is determined. Nonetheless if you need to start work to help pay bills or feed the family, you might not have this kind of luxury to choose. Also, one guideline I came across is your current student loan / debt + future student loans should not be more than the full year salary of your starting pay.... So if you think your first job would pay 60k a year, then total student debt should not exceed 60k (you could find options like work part-time to pay off some of the tuition fees off). I think the only probable exception to this rule is if you become a doctor or dentist, but even then, it shouldn't deviate too much.
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Loans

DBS

Education

How can I pay off a DBS student loan quickly? What's the best way to go about doing this?
Takingstock @
Takingstock @
Level 6. Master
Answered on 30 Apr 2020
I would assume your loan interest is less than 8% per year... If the documents tell you the effective interest rate, use that as a guide instead. Effective interest rate = interest they described + all other fees involved whether they call it admin or processing fee. If your situation, I would advise you to just pay off the loan, and target as fast as possible within the best of your ability. Stretching the loan (and just paying interest) is not worth it. If I assume the rate you are charged is 4.5%, on 6500, the annual interest is 292.50. Then at 500 paid per month, you might actually clear this in 14 months or so. That's not too bad. If you change your perspective, paying off the loan is the same as giving you a return of the interest rate, and 4.5% is not bad (considering there is no risk at all). 4.5% is better than cpf sa rate! If you take the 500 monthly to invest, you will incur fees, and given the current situation is not exactly good, you might not make a good return enough to offset the fees you paid + interest.
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Savings

Lifestyle

COVID-19

How much cash are you keeping to recession-proof yourself?
Takingstock @
Takingstock @
Level 6. Master
Updated on 31 Mar 2020
If you have six months of expenses covered, then I think one can worry less about needing to increase it. Personally I use a sinking fund system (plan A) , and I also have my cpf OA ready to pay off 18 mths of home loan payments (plan B) if shit happens. I also took out 2.5k to buy the April SSB issue, as part of my long term plan to stash emergency money away from the bank as a plan C. Recession will be tough but take small gradual steps. Its a lot more difficult to stash up funds in bad times (rather than good), and if you incorporate SSBs as part of the emergency stash, you will accumulate bonds that pay better interest too (good times are when interest rates actually go up). My approach is somewhat FED / government like, during good times - unwind the QE and build reserves, during bad times, its time to relax on the reserve build up and spend a bit to stimulate the economy (not to mention things are generally on offer now). Think of it like the face mask situation. You stockpile in good times (when it's not so in demand), and when a pandemic happens, you are not so scared to let it run down. Trying to buy face mask now will only be more expensive amongst the hoarding.
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COVID-19

Career

My probation is extended till latest May as I'm not performing well (nor do I actually like the job scope) The thing is, due to Covid-19, it will be hard to find employment. What should I do?
Takingstock @
Takingstock @
Level 6. Master
Answered on 31 Mar 2020
Stick it out until you have the new job offer signed in writing. Chances of getting a new job (and not getting cut shortly after) is very low. Even if you get a job, chances are it will be temporary or contract.
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COVID-19

Investments

Stocks Discussion

Savings

Seeing how markets have plunged, should I hold back on investing now and focus more on savings? But I often also hear about the buy-low sell high concept. Any advice?
Takingstock @
Takingstock @
Level 6. Master
Updated on 26 Mar 2020
>> Price is what you pay, value is what you get. >> Buy low sell high is more towards trading, buy low to get a higher dividend yield is investing. What I have learnt in the past years is that focusing on price for gains... Is more of trading, and tends more often than not to lead to investing mistakes, the worst from your own emotions. >> For lack of a better example, you have 17k. You managed to buy 1000 shares of stock xxxx at 16.97, +/- fees, your cost is 17 per share. If xxxx maintains dividend of 1.32 per year for the next 20 years, and doesn't collapse from the recession, you have received 20 x 1.32 = 26.4 per share in dividends, at a dividend yield of 7.76%, ignoring the possible dividend increases or cuts, price fluctuations or potential unrealized gain. If you understand this example, the future price is only an illusion. You are exchanging 17 dollars for a future stream of 26.4 over 20 years and the possible sell price then. It took me a few months to master this concept, and a longer time to forget what the world was trying to teach me for 30+ years. note: this is not a buy / sell call for stock xxxx, only an example
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REITs

Dividends

Investments

What is the difference between distribution yield and dividend yield? Or are they basically the same thing?
Takingstock @
Takingstock @
Level 6. Master
Updated on 26 Mar 2020
Distribution yield should be = total dividends paid out / total distributable income. Dividend yield simply = dividend per share / price per share. Example: Reit X has total distributable income / cash flow of $1 per share (this is the amount of real cash profits earned by reit after expenses / tax and excluding non-cash items like property valuation gains). Reit X pays 90 cents per share in dividends, and so the distribution yield should be 90%. The price of Reit X is $18, therefore dividend yield = 0.9 / 18 = 5% Conceptually distribution yield would be similar to dividend payout ratio where the income part used as denominator can include non-cash items like depreciation and valuation gains. It's a measure of how much of its real cash profits being returned to shareholders. Reits have to distribute 90% of their profits to qualify for the preferential tax treatment. Business trusts (ef accordia golf Trust) can decide the distribution yield / payout ratio based on their need for capital expenditure or working capital. If the business trust is loss making or opting to spend most of the cash profits into capex, your distribution yield can be rather low. Dividend yield instead is kind of like a measure of the real cash returns you get from buying the reit (not including trading gain / loss). If you try to view the reit like a bond, and based on cash flows, dividend yield gives you an idea whether it is more worth to buy this reit compared to other instruments like ssb / fixed deposit. - eg reit x has dividend yield of 5%, so you get back 5 cents per year per dollar invested, ssb 10 year average yield is 1.6% for April issue, so I will on average get back 1.6 cents per year per dollar invested. >> A more layman example: Ben's monthly take home income is 2000. After deducting the amount he pays his study loan, daily expenses, travel and shopping, Ben has gross savings = 500, and give his mum 50 to buy things to eat. His mum spent 200k to bring him up until he is of working age and don't need to support. To her, Ben's distribution yield = 50 / 500 = 10%; her monthly dividend yield = 50 / 200k = 0.025%. Hope it helps.
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