Author: Lazy Singaporean

The question that everyone avoids – how much do I need so that I can retire?

The question everyone avoids Most people want to retire. Even more want to retire early. But, not many know they can retire. Like running a race, the most important thing to know is where is the endpoint, and how long more you have before reaching the endpoint. Two ways of calculating the retirement sum There are basically two ways of calculating your retirement sum. The first is the savings method. In this method, you basically set aside a sum of money, and withdraw it till it depletes. The rule of thumb is to plan for age 100, whereby your...

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Time management hacks – How I study one semester’s worth of lectures using one day

Time management hacks When my friends take five days to study for one subject, I take one day instead. This gives me 4 days free. With this 4 days, I can do other things. I read, and write, and dabble into something interesting. I don’t compromise on the quality too. Even though I spent eighty percent less time, my results are always the same, if not better, than my peers. If I can consistently spend less time, and do more, there must be a systematic way I plan my time. A virtuous cycle Because I spend less time on...

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Harnessing solar energy to reduce utility bills

Solar energy in sunny Singapore Just that day, I happened to be on the topic of utility bills in Singapore. I stay in a HDB flat and my utility bills are around $150 every month. I was curious, and wanted to use an investment philosophy to deal with utility bills. Buying an asset and receiving dividends I went online to research, and solar energy came up as a viable solution. Basically, you will harness free energy from the sun, and then power your own electrical appliances. This way, the money saved becomes like a dividend that keeps paying forever....

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Portfolio update for the Singaporean 3-fund portfolio

Brexit did nothing to my portfolio Even though there was much sensation about the Brexit earlier this month, I was not at all concerned about my Singaporean 3-fund portfolio. Out of curiosity, I went to take a look at it. 7.95% That’s the half-year return on my portfolio having started it in February this year. There was still some dividends coming from the International Equities portion which will push the returns to more than 8%. All for doing nothing That’s right. No stock picking, no following of news, and absolutely no loss of sleep at...

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An alternative to Standard Chartered new brokerage fees

Talk of the town The buzz term today is the new brokerage fees imposed by Standard Chartered bank for online trading. Standard Chartered used to be the saviour for retail investors, charging 0.20% brokerage fee for any trade for the Singapore market, without any minimum commission. A $1,000 purchase only costs me around $2 in commission. Comparing it to other brokerages, I would have needed to pay at least $25, which is the minimum commission. But, the music has stopped right now. As of 1st August 2016, all new trades will be subject to a $10 minimum commission (unless...

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Equity component of the Singaporean 3-fund portfolio – SPDR STI ETF and Vanguard FTSE All-World UCITS ETF

The Singaporean 3-fund portfolio is the Singapore version of the Boglehead 3-fund portfolio which is suitable for US citizens. The Boglehead 3-fund portfolio comprises of three components: – Vanguard Total Stock ETF (home equity; the name is misleading but it comprises only US stocks) – Vanguard Total World Stock ETF (global equity) – Vanguard Total Bond Market ETF (home bond; similarly, this is made up of only US bonds) The Singaporean 3-fund portfolio will be a replication, and thus be: – Nikko AM Singapore STI ETF (home equity) – Vanguard FTSE All-World UCITS ETF (global equity) – ABF Singapore...

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The REAL Mathematics behind Early Retirement

My brain was feeling a little itchy for some Math yesterday. Math was my best subject in school, and my favourite subject when I tutor. So, I decided to try out to calculate and derive the formula for Early Retirement. After using this website (link), and MMM post (link) on how Early Retirement is only determined by the Savings Rate, I decided to try to derive the formula that calculates the number of years for retirement. This will be expressed in terms of savings rate, real rate of investment return, and withdrawal rate. Warning If you absolutely hate Mathematics...

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Bonds component of the Singaporean 3-fund portfolio – ABF Singapore Bond Index Fund

The Singaporean 3-fund portfolio is the Singapore version of the Boglehead 3-fund portfolio which is suitable for US citizens. The Boglehead 3-fund portfolio comprises of three components: – Vanguard Total Stock ETF (home equity; the name is misleading but it comprises only US stocks) – Vanguard Total World Stock ETF (global equity) – Vanguard Total Bond Market ETF (home bond; similarly, this is made up of only US bonds) The Singaporean 3-fund portfolio will be a replication, and thus be: – Nikko AM Singapore STI ETF (home equity) – Vanguard FTSE All-World UCITS ETF (global equity) – ABF Singapore...

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The case for index investing – a parable

Taken from John Bogle’s book, The Little Book of Common Sense Investing. Once upon a time A wealthy family named the Gotrocks, grown over the generations to include thousands of brothers, sisters, aunts, uncles, and cousins, owned 100 percent of every stock in the United States. Each year, they reaped the rewards of investing: all the earnings growth that those thousands of corporations generated and all the dividends that they distributed. Each family member grew wealthier at the same pace, and all was harmonious. Their investment had compounded over the decades, creating enormous wealth, because the Gotrocks family was...

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Is the STI a good index?

I had previously written a post that 30 stocks is definitely not enough for diversification: here. However, many investors are currently putting money into the Straits Times Index (STI) fund regularly. As you may know, the STI is a basket of 30 stocks. The STI is actually not passively managed as there are reviews to choose the basket of stocks. In 2015 last year, there were changes to the index. Olam, Jardine Matheson, and Jardine Strategic Holdings paved away for UOL, Yangzijiang, and SATS. STI is an actively managed index I could not find out who is the review board...

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Is the STI a good index?

I had previously written a post that 30 stocks is definitely not enough for diversification: here. However, many investors are currently putting money into the Straits Times Index (STI) fund regularly. As you may know, the STI is a basket of 30 stocks. The STI is actually not passively managed as there are reviews to choose the basket of stocks. In 2015 last year, there were changes to the index. Olam, Jardine Matheson, and Jardine Strategic Holdings paved away for UOL, Yangzijiang, and SATS. STI is an actively managed index I could not find out who is the review...

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Investing a windfall

Was browsing the Bogleheads forum today and had a look at a thread “Investing a windfall”. I clicked on the link because I felt that it was useful to know what to do in the case of year end bonuses or performance bonuses. Investing a windfall The thread starter was already a seasoned investor and she dollar averages her monthly salary into a 60/40 portfolio. However, this time, she received a large windfall, and she is not sure whether to invest it in a lump sum, or to do dollar cost averaging. I think she probably asked this question...

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Do you rebalance?

Many advocate keeping a portfolio of bonds and stocks, and rebalancing them regularly. While reading the Four Pillars of Investing, I discovered a very good example of diversification and rebalancing. I will replicate it here. Playing the long game (Chapter 14) In order to understand rebalancing, let’s consider a model consisting of two risky assets; call them A and B. In a given year, each asset is capable of having only two returns: a gain of 30% or a loss of 10%, each with a probability of 50%. You can simulate the return for each simply by flipping a...

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The Gordon dividend growth model

Gordon dividend growth model part 1 The dividend growth model is one of the earliest, if not the earliest, ways of valuing a stock. I might do a post on the derivation of this formula, but I shall skip that for now. This is the formula: Market price (P) = d / (r – g) D is the current dividends or last dividends declared by the company. It is in dollar terms. R is the expected return that you are aiming for when you purchase the stock. I assume a 7% for illustrative purpose. Lastly, g is the dividend...

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Everyone investor should read this

Although this post is fully prose, please read it before you start investing. After reading it, you will be smarter than 95% of all investors. However, it is also my (albeit selfish) hope that after reading this, you should have no more need to want to read stock analysis and wanting to pick stocks. Let’s start. Liabilities and equities When we invest, we are either investing into debt or equity. The accounting equation sums it up: Assets = liabilities + equity What this means is that whenever a company buys or owns something (an asset), it has to be...

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