Fortunekitty Mid Year Update
It has been half a year since I started this blog, and would be an opportune time to see my progress so far.
This first half a year has been marked by many changes. The first few months of the year saw me adjusting to married life, which has seen increased family commitments, and more coordination. More importantly, on the financial end, two major changes happened:
1. I switched jobs in June, from a practicing lawyer to in-house legal counsel. While I am confident this is a good move for my career, I had to take a not insignificant pay cut for the move, and it is unlikely that my pay will increase at the same rate as when I was in practice. It now becomes even more important that I manage my personal finances better and try to optimize my money so the pay cut does not feel as significant.
2. We collected the keys to our HDB flat in June as well. We made a tough decision to pay up the remaining down payment in cash rather than use our CPF reserves (which we will be using for our monthly instalments). Considering that we would not only lose out on CPF's good interest rate, but must also pay it back later on, this is probably better in the long run. We also preferred to take the hit to our savings now since we (hopefully) have decent earning power in the near future and need a smaller cash pile, and by using CPF to pay the instalments it leaves our monthly income "intact" to rebuild our savings. Together with the furniture shopping for our flat, I expect to see my savings quite heavily stretched for the rest of the year, and my aim would be to rebuild it as soon as possible.
Hopefully the second half of the year would be more stable. Once the home renovation is completed, I can do more to build up my finances.
SAVINGS/EXPENSES
I am still far from my target savings amounts I would like to see in the bank, so I set myself an expenditure goal of $1500 a month ($50 a day). This includes all personal expenses including pre payments like insurance, but excludes expenses paid jointly with the wife such as home renovation and our car upkeep.
This has been very useful in helping me cultivate a very strict cost cutting mindset, which I always felt I lacked. I now think twice before each expense on whether I really need it, or how I can get the same benefit for slightly less. I've also realized how much and how quickly I have been spending in the past. No wonder it felt like it was so hard to build up a pool of savings.
Adjusting has been hard though. Counting each dollar (2% of my daily allowance!) adds some stress to the day. I no longer feel as carefree and even my usual daily kopi is something I start to consider if I can live without. Also, as I made some other payments for insurance etc which are intended to cover a longer period, my accounts constantly show a negative. I have to be more conscious over my weekend/social spending as well.
INVESTMENTS
I have built up a small investment portfolio since starting this blog and currently hold the following:
STI ETF - 900 shares
Keppel Corp - 400 shares
Soilbuild Biz Space Reit - 4400 units
Ascott Residence Trust - 3400 units
Frasers Logistics Trust - 3500 units
Capitaland Commercial Trust - 2000 units
With my limited liquidity, I have only been taking up small positions so far. Currently with the market being rather high, I am taking the time to wait it out and build up my war chest, while also cursing myself for not having started this earlier and taking advantage of the weak market last year (better late than never I guess).
Looking at the confident market now, I will try to sit tight for the rest of the year and build some reserves for the next weak market, where hopefully I can increase the positions I have taken, especially on the STI ETF.
On the radar I am also tracking the following:
1. Netlink Trust IPO (and any other IPOs that come up)
2. Capitaland Mall Trust (to get some exposure to the retail reit market)
3. Buying a S&P 500 ETF when the market is weak again
4. Buying a small position in cryptocurrencies
More importantly, I should focus on building up my knowledge in assessing companies. I always make an effort to keep up with the daily news and financial blogs etc, but the amount of information tends to be overwhelming and does not stick. Instead, I will be changing strategy to focus on just a few pieces of content each day, but give each more thought and analysis to draw lessons from it rather than unprocessed information.
To keep track of my existing investments better, I will also try to spend time each month to go through their announcements/activity, mainly to ensure that the company's direction is still in line with the reasons I invested in them.