My Full Year Financial Report for Year 2012

Happy new year to all of you and here are my full year financial report for 2012 (Jan 12 to Dec 12).

My passive incomes:

The above table shows the total for each of my passive incomes collected from Jan 12 to Dec 12. For my passive incomes, I have managed to collect a total of $20225 for the whole year, which is about $1685 per month. If include the realised gain from selling some of my shares, the total extra incomes for this year will be $23345, which is about $1945 per month. Please note that I did not include unrealised profit of $7400 from shares in the table.

My Monthly Expenses:

The above table shows my total monthly expenses. There are no changes since the beginning of the year. I am still following my old rule to keep my expenses as low as possible by not spending money on the things that I will not need.

My debt:
As for my only outstanding debt from my housing loan, it has reduced from $14000 to $0.

Conclusion:
This year is quite a fruitful year for me though I did not able to achieve one of my New Year resolutions of having a passive income of $2200 by end of 2012. I give myself a "B+" grade for this year performance.

Auto-accumulation of my retirement fund

As mentioned in my last post, I have accumulated enough money in my CPF account to pay off my housing loan.  This means that from next year onwards, my monthly CPF contribution will be in accumulation mode for my retirement fund.

Based on my age, 21% of my monthly wages will go to my OA account and 7% will go to my Special account. This means that as long as I am still working, 28% of my monthly wages will be automatically saved in my CPF account. And also, there are interests given in CPF account, which can create a compounding effect to grow my retirement money.

How much debt do I have? (Dec 12)

In Sep 12, I had calculated my total debt which is totally from the mortgage loan of my flat to be $3K. The calculation is based on using the outstanding housing loan amount minus away my total family CPF OA amount.

Today my total debt has finally become $0. Hooray!!!

How much debt do I have? (Sep 12)

In Jun 12, I had calculated my total debt which is totally from the mortgage loan of my flat to be $8K. The calculation is based on using the outstanding housing loan amount minus away my total family CPF OA amount.

Today I have recalculated my total debt again, and it has reduced by another $5k. In my post on "What I hope to achieve in 20 years?", I mentioned that I wanted to reduce my total debt to $0 within the next five years, Based on my conservative estimation, it can be achieve by the end of this year.

"Lifelong Freedom in Singapore" Blog is 3 year old!!!

Wow time really flies; "Lifelong freedom in Singapore" blog has already turned 3 year old! Thank to all who have been following my blogs and have commented on my posts. I would like to apologize that recently I am not able do any posting due to my work and family commitment.

What have I achieved for the past one year?
I am managed to gain $20000 in term of pure passive incomes. In additional, there is a realised capital gain of $11500 after selling some of my shares. This adds up to $31500 extra income for the past one year.

My current total unrealised capital gains or losses have amounted to $7160. But since I am looking more on wealth creation, having unrealised capital gains or losses are not as important as having pure passive income.

What do I hope to achieve for the next year?
Well, I hope to increase the earning from my pure passive incomes by $3000 per year or $250 per month for next year. It may be quite tough, but I will try to achieve it. I also hope that all of you can continue to support my blog and I will be continue to post more articles on my journey towards financial freedom.

My Passive Income (Month of Jul 12)

Total Passive Income(Cash): $1703
Target: $3000
Achievement: 56.7%
For passive income 1, 2 and 3 there is no changes.

My Half Year Financial Report for Year 2012

Half of Year 2012 is over, and now it is time to generate my mid-year financial report for 2012 (Jan 12 to Jun 12)

My Passive Incomes:

The above table shows the total for each of my passive incomes collected from Jan 12 to Jun 12. For my passive incomes, I have managed to collect a total of $8435. If include the realised gain of $3120 from selling some of my shares, the total extra incomes for the first half of year 2012 will be $11555, which is about $1925 per month.

My Monthly Expenses:

The above table shows my total monthly expenses. There are not many changes since the beginning of the year. I am still following my old rule to keep my expenses as low as possible by not spending money on the things that I will not need.

My debt:

As for my only outstanding debt from my housing loan, it has reduced from $14000 (Jan 12) to $8000 (Jun 12).

My Passive Income (Month of Jun 12)

Total Passive Income(Cash): $1703
Target: $3000
Achievement: 56.7%
For passive income 1, 2 and 3 there is no changes.

How much debt do I have? (Jun 12)

 In Mar 12, I had recalculated my total debt which is totally from the mortgage loan of my flat to be $11K. The calculation is based on using the outstanding housing loan amount minus away my total family CPF OA amount.

Today I have recalculated my total debt again, and it has reduced by another $3k. In my post on "What I hope to achieve in 20 years?", I mentioned that I wanted to reduce my total debt to $0 within the next five years, Based on my conservative estimation, I think it is achievable before the end of this year.

My Passive Income (Month of May 12)

Total Passive Income(Cash): $1703
Target: $3000
Achievement: 56.7%
For passive income 1 and 2, there is no changes.
For passive income 3, there is a decrease as dividends are reduced for some of my shares
For passive income 4, it has become zero.

You only know how much your profit or loss is when you stop investing.

Investing is about putting your money in an asset class in the hope of generating return. All investments come with risk, and this risk could sometimes make you lose most or all of your invested money. As long as you are still investing, you will never know whether you are making or losing money. If you are not careful, your gain in your past investment might be lost in your next investment.

Banned from Adsense

I had been using Adsense for the past two and a half year in my blogs until I received an email last week from Google. The email said that my Adsense account is deactivated. I was told that it is due to “invalid click activity” which I don’t agree as a valid reason to ban my account as I don’t click on ads in my blogs.

After appealing unsuccessfully, I’m no longer able to earn any money from this income source at this moment. I believe it is time to move on and not to get too emotional. I see this problem as an opportunity to me to try out other advertisers. Do let me know if you are using other advertisers that work equivalently well or better than Adsense. Thank.

What is the buy price of my current stocks after incorporating all realized gain/loss and dividends?

For those who have been visiting my share investment blog might know that so far I have gotten $17580.92 worth of dividend and $ 17785 worth of realized gain. So overall, my return is $35365.92 for the last two and a half year.

Currently I am holding stocks from four different companies and in total I have paid $128100. By taking away $35365.92 which comes from my overall return, I am only paying $92734.08 ($128100 – $35365.92) for my current holdings. This is around 72.4% ($92734.08*100/$128100) of $128100.

To see what the buy prices of my current stocks are after incorporating my overall gain, I use 72.4% to multiply by all my stock buy prices. The result is shown in the table below.

I personally feel that this method of calculating the buy price will result in clearer view whether I am making money in the stock market or not.

How do I calculate the return from my share investment?

Normally I just take the absolute dollars to measure my gain and loss in my share investment as it is the most “TRUE” indicator which tells me whether I am making money or not. I am choosing to avoid popular function like XIRR to calculate annualized returns as it is just an indicator to make thing look nicer only.

Let me give an example, if you have invested for 10 years, the XIRR will just show 10 different values of return in each of the 10 years. What is the point to see these values if your true return in dollar is zero?

If your return is negative, XIRR values may only have the consoling effect telling you that some percentage of the investment money is lost in each of 10 years, but in effect you are losing much more in term of absolute percentage.

If your return is positive, XIRR values are just nice figures to show other that you are making some percentage from your investment for each of the 10 years. But how much in absolute dollar, no one will know.

My Passive Income (Month of Apr 12)

Total Passive Income(Cash): $1845
Target: $3000
Achievement: 61.5%
For passive income 1 and 2, there is no changes.
For passive income 3, there is an increase as I have bought some shares this month.
For passive income 4, there is an increase of $30.

My Family Expenses (Apr 2012)

Today I shall post an update on my monthly expenses. Recently I have upgraded my wife and my phone to iphone and have subscribed to 3G plan. So there is an increase of $30. I have reduced the amount of other expenses to $220 as I did not spend a lot for other things during the last few months. So in conclusion, my total expenses remain as $3000.

Don’t just spend on your “needs” and ignore your “wants”!

In a few of my posts, I have always mentioned the following three steps for achieving financial freedom:
Step 1: Learn how to earn money.
Step 2: Learn how to save money.
Step 3: Learn how to grow money.

In order to achieve step 2 with maximum results, one may just spend only on the “needs” and totally don’t spend on the “wants”. However by doing that, one life may be miserable and boring. It is because there is nothing to look forward to since the “needs” are not going to change much in life.

To prevent myself from leading to such a boring life, I always cater a sum of money each year to be spent on my “want”. By allocating a fix sum of money will prevent me from overspending. This sum of money can be used for holiday trips, buying gadgets and gift for my love ones.

My advice is to all is never be a miser. Money that is not spent is not yours and will have no meaning to your life.

Learning about private property investment

As I have written in one of my old posts, keep learning and expanding your financial knowledge is an important part in achieving financial freedom. This year, I will start to learn more on private property investment as I might be investing in one if there is a great opportunity in the future.

Private property investment, in my opinion, is more complex than shares investment as it involves many things like location, housing loan interest rate, maintenance cost, stamp fee, property tax, rental yield, tenure and commission etc.

I will start off to learn searching the internet for more information and also try to find some books on private property investment. If you have any recommended websites or books, please let me know. Thank in advance.

My Passive Income (Month of Mar 12)

Total Passive Income(Cash): $1792
Target: $3000
Achievement: 59.7%
For passive income 1 and 2, there is no changes.
For passive income 3, there is an increase as I have bought some shares this month.
For passive income 4, there is no changes.

Decision on what to do with excess CPF OA savings.

In my recent post, I had listed four options on what to do with the excess CPF OA savings after clearing off the housing loan. All the four options have their own advantages and disadvantages. After thinking about it for about two weeks, I decided to choose option 1 first and keep option 4 open for the future.

The reason why I choose option 1 first is because part of the OA savings can be used to buy selected shares whereas SA savings cannot. By increasing the savings in the OA account, I am ready to use this saving for investment either in shares or property for the next economy down turn.

Spending a lot of money for the past one year

My family had decided not to go for a holiday last year as there were many natural disasters (flood, earthquake etc) that had occurred in many places.

With this extra "budgeted holiday money" ($10k), I have bought the following things or services:
1) Netbook $650 (Aug 2011)
2) XBox 360 with kinect $500 (Oct 2011)
3) Epi-Lasik Treatment $4000 (Dec 2011)
4) 50" Full HD Plasma TV $1150 (Feb 2012)
5) MacBook Pro 13" $2000 (Mar 2012)

Total: $8300

My next purchase: 2 x iPhone 4S plus battery cases (April 12).

Please note that I am not a super saver to the extent that I will save every dollars and cents. Money that is budgeted to be spent, I will spend it without any hesitation.

What to do with the excess CPF OA savings after clearing off the housing loan?

As I will be having enough OA savings to pay off my housing loan this year, it is now a good time to think of what to do with the monthly excess OA savings. I have listed down four options and will spend some time to think which the best option is to take to aid my retirement planning. Feel free to comment on my following options.

Option 1: Do nothing with the monthly excess OA savings.
Leave the excess OA savings untouched to earn interest (currently at 2.5%).

Option 2: Transfer half the monthly excess OA savings from to SA.
Transfer half of the monthly excess OA savings to SA to earn interest (currently at 4%). Leave half of the monthly excess OA savings untouched to earn interest (currently at 2.5%).

Option 3: Transfer all the monthly excess OA savings to SA.
Transfer all the monthly excess OA savings to SA to earn interest (currently at 4%).

Option 4: Invest on a private property.
Buy a private property and use the monthly excess OA savings to pay for the monthly mortgage loan.

How much debt do I have? (Mar 12)

In Dec 11, I had recalculated my total debt which is totally from the mortgage loan of my flat to be $14K. The calculation is based on using the outstanding housing loan amount minus away my total family CPF OA amount.

Today I have recalculated my total debt again, and it has reduced by another $3k. In my post on "What I hope to achieve in 20 years?", I mentioned that I wanted to reduce my total debt to $0 within the next five years, Based on my conservative estimation, I think it is achievable before the end of this year.

My Passive Income (Month of Feb 12)

Total Passive Income(Cash): $1757
Target: $3000
Achievement: 58.5%
For passive income 1 and 2, there is no changes.
For passive income 3, there is an increase as I have made some transactions in my investment portfolio.
For passive income 4, there is a decrease of $5.

Buy and rent out private property to get passive income?

Recently my wife and I have been exploring the possibilities of buying a private as an investment to increase our passive income. Well it turns out one will need to have strong holding power and huge initial capital to do that.

Holding power is very important as one might not be able to find a suitable tenant for a period of time. And to make thing worst one may just lost his or her job during that time. So one must have enough money as back up.

Initial capital is also very important so as it determines how much one will pay for the month instalment. The lesser the loan quantum, the less one will pay for the monthly installment.

Let me give a scenario of buying a new two bedders condo unit for investment at $750,000, with $200,000 as down payment. By using 2% interest rate for the housing loan with a loan term of 25 years, one will need to pay about $2330 per month .

Let's assume that the maintenance fee is $350 per month, utility bill is $200 per month, property tax is about $100 per month (or $1200 annually), and miscellaneous internal repair (aircon serving, changing tap and light bulb) is about $50 per month. All these will add up to around $700.

So in order to rent out this condo for passive income, one must find a tenant that is willing to pay more than $3030. Anything lower will become a liability to the owner. For someone who wants to get 5% rental yield on the initial down payment of $200,000 , he or she must rent out around $3900 to achieve that. The question is whether is it easy to find such tenant to pay that amount?

Relaxation

Relaxation is important in our lives as we may get really tiring and stressful due to our job and family responsibilities. There are many ways to relax oneself like shopping, eating in restaurant, going for spa and travelling. These ways of relaxation may be costly at the long run.

As for me, relaxation is just being as close to the nature as possible. I like to go to places where I can see the cloud, the tree and the sea, able to feel the wind blowing and listen to the bird chirping. The best place for all these is the beach and very often I will bring my family to East Coast Park.

Well, do let me know if you have other form of low cost of relaxation.

Bought Panasonic 50" Plasma TV

Since about two years ago, I have been targeting to buy a 50" TV. I have waited for the price to drop drastically and finally I have bought a Full HD 50" plasma TV (Model THP50U30S) @ $1088 from Harvey Norman last week.

Basically it is just a simple TV without any smart features or 3D function. The reason why I go for plasma TV instead of LED TV is because of the colour and brightness. In my opinion, the colour look more natural and less bright in plasma TV as compared to LED TV.

I feel that it is quite a good deal as I was told by the sales person that the price will go up after the promotion period. The price indeed goes back to $1299 when I do a check yesterday.

My Passive Income (Month of Jan 12)

Recently I had posted in this blog that I will only track my cash passive income portion and leave out my CPF portion. So I have to adjust my total passive income target to $3000 based on my last expenses update in order to gain my financial freedom.

Total Passive Income(Cash): $1702
Target: $3000
Achievement: 56.8%
For passive income 1, there is an increase of $30.
For passive income 2, there is an increase of $30
For passive income 3 and 4, there are no changes.

Happy Dragon Lunar New Year to Everyone!!!

Wishing all my blog readers a happy Lunar New Year. And enjoying yourself with your family members and friends in this holiday.

Breaking through my looking glass

For those who have been following my blog will know that I had undergone Lasik treatment during Dec 11. Recently my vision has almost recovered and I am glad that I have obtained my vision freedom again after twenty plus years.

The total cost of my Lasik treatment is adding up to almost $4000 (including post-consultation sessions and eye drops). Though it may be expensive, but to me it is definitely worth it. It is because I no longer need to find my spectacle every morning when I wake up. No more constraint by spectacle viewing area. No more cleaning of fingerprints and dust on my spectacle. And also no more uncomfortable contact lenses that stick on my corneas.

Well this “glassless feeling” is great and I believe it is one of my best lifelong investments that I have ever made in my life.

My Family Expenses (Jan 2012)

Today I shall post an update on my monthly expenses. I have decided to take out my housing loan portion as my total family CPF (OA) is going to catch up with it. For my utility (power/water/gas) bill, it has gone up by $50. I also increase my other unknown expenses from $100 to $250.

So in conclusion, my total expense now is $3000.

My New Year's Resolutions For 2012

Happy New Year to all my readers. I hope that all of you had enjoyed this holiday session with your family and friends.

Today is a time to forget all my last year achievements and to start afresh with new goals for this New Year. For this year, I only have two goals. Firstly I hope to achieve a passive income of $2200 by Dec 12. And secondly I hope to reduce my net debt for housing loan from $14000 to $0. I also will be actively looking for other source of passive income so as to achieve financial freedom.

Last but not least, thank for those who have been following my blogs. And also always stay motivated in achieving your financial goals.