Saturday 23 April 2016

小胖's Money Management Tip #1

Since July 2015, 小胖's salary is automatically deposited into his OCBC 360 Savings Account, where he advocates 50% of his take-home salary into his spending account.



This 50% which he advocates into his spending account monthly are split into the following:
a) Parents' allowances: $370
b) Phone bills: $70
c) Transport: $100 (小胖 is too poor to afford a car...)
d) Remaining: ~$500 is used for food, daily expenses and dating funds

Funds in his OCBC 360 Savings Account now becomes part of his warchest for better opportunities in the market. In order to "preserve" the funds in this account, he does not apply for an ATM card, and tries to fulfil the required terms in order to maximise the interest returns on his savings.

The required terms as follows:
a) Crediting of his salary of at least $2000 [1.2%]
b) Pay any 3 bills online OR via GIRO [0.5%]
c) Spend a min. of $500 on any OCBC Credit Card [0.5%]
d) Insure or invest via OCBC platforms [0.5%]
e) Incremental Balances [additional 1%]

小胖 is only able to fulfil a, b and e. Using this as an example, if he has $10,000 in his account (and his incremental balance is $1,000), he is able to amass ~$15.69 monthly from his savings (inclusive of 0.05% base interest).

Find out more about the OCBC 360 Savings Account here!

Wednesday 20 April 2016

How did 小胖 get started in investing?

小胖 (Xiao-Pang) is a full-time employee, and part-time degree student at UniSIM. Born in 1991, he kick-started his investing journey in August 2012, when his dad encouraged him to invest in the stock market to achieve a possible higher returns than what the banks are offering on his savings account.

A sucker for dividends, he chose to invest mostly in what he knows best - Real Estate Investment Trusts (REITs). REITs are mandated to distribute at least 90% of its profits to its shareholders in order to enjoy tax transparency, which is why 小胖 loves investing in REITs!

The first stock he bought, Keppel REIT (K71U), which he still holds till today, has given him approximately 6% dividend yield annually! 


小胖 do not have a large amount of cash to begin investing with, while he is building up his warchest awaiting for the next market crash (oops!). At the same time, he needs a large sum of money to prepare for his wedding which is happening in a few months time! Therefore, he is watching the market at the sidelines, and is considering whether to re-balance his portfolio in order to free up some cash for his wedding preparations! 

Currently, 小胖 has a portfolio allocation of 93% in stocks (of which 76% are allocated in REITs and Property Trusts), and 7% in bonds. He is waiting for some better retail bonds and opportunities out there to re-balance his portfolio! 

I hope to share 小胖's investing journey in this blog, and to achieve 小胖's long-term goal of achieving financial freedom by 45 years old!