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You must be wondering where Mr. IPO has gone to ... Is he busy catching Pokemons and neglecting this retirement blog?!?

Well... I have been living in a suitcase for the last few months, round the world for work and not for catching Mr. Mime unfortunately... And this is likely to continue for the foreseeable future... Sigh 

The Pokemon eggs is probably an apt picture. It symbolize the state of our IPO market, it symbolize how the bond markets here has "crashed", thereby affecting some of the prices of my bond holdings, it also symbolize that I should be busy "executing" my retirement plan instead (which I am guilty as charged of not doing anything). 

Being all the road all the time is really not conducive for retirement planning and plus the fact that my new set up requires me to seek approval for every single buy and sell decisions is seriously bothering me. I am still figuring out how to execute my retirement plans given the various constraints (including minimum holding period) !

While I am still keen to build up my dividends / income generating portfolio, I am probably more cautious now as the local economy is not doing well. Having more cash on hand is probably not a bad thing (excuses for not doing anything I guess). 

Anyway, I am back, picking up the paces and getting my momentum back to the market, yearning for the day where I can freely buy and sell shares again...

Perhaps I should look at the REIT ETF instead... 

Happy "exeggcuting" your retirement plans ! 

SRS Portfolio as of 31 May 2016

The last 3 months had been very hectic. My life is upside down is probably an understatement as i put through relentless hours of work (including many weekends) to make sure my deal closes. Anyway i will likely be moving on after the deal closes...need a break to blog. lol. 

My last update was for the month ending 31 March 2016 and below are the "actions" in May. 

Corporate Actions for April / May 2016
  • Received dividend distribution of $1,500 from UMS 
  • Sold my Jumbo at 52 cents and missed the remaining run up to 60c (ouch)

Passive Income Update

I first blogged about Moolahsense here on 8 May 2016. As of 15 June 2016, I have received about $312 interest to-date. Let's see if this is sustainable when i do the next update. So far so good.

I also committed some money to a new PE bond issued by Temasek through a bank. This is a interesting concept which is rather innovative and bondsupermart has written two articles on them and the two parts are linked here: Part I and Part II. Interesting to note that Bondsupermart actually allows you to indicate your interest here. Assuming i get some allocation, then my passive income will grow to approximately $35,000 per year. While it is still some way off my target of $120,000 per year, it is definitely inching closer as i create the bond ladder i blogged about here step-by-step.

Happy bonding till we next "meet". 

Moolahsense - growth of fintech companies

I have been tracking the fintech scene in P2P lending since early last year with a view to invest as an angel investor. 

You can find an interesting article here about P2P lending with a more detailed "Money of the Future" report here

Examples of P2P lending companies in Singapore include:
  1. Capital Match
  2. Funding Societies 
  3. Moolahsense
  4. Fundedhere (for accredited investors only)


I think Moolahsense became more "legit" and the "de-facto" leader this year after it reported a tie up with DBS Bank. The fact that a listed company has raised funds through the platform also helped boost its profile. I enclosed the news announcement below:

There has been a lot of brickbat about Epicentre "borrowing" money at 13.5% through crowdfunding but if you bother to look through the actual effective interest rate paid, it is around 7.5% (based on my recollection and yes, I am one of the lenders). You weigh that against the administrative hassle and the time you need to deal with banks and the opportunities are lost. In fact, banks are probably known as people who will lend you an umbrella when you don't need one. 

Why Crowdfunding?

Crowdfunding meets an unique niche within the banking ecosystem with great potential to disrupt the financial ecosystem. This threat is real and it can be disruptive. We already see it happening in United States, Europe and China.

For the entrepreneurs, borrowing from the crowd is probably better than maxing out the credit cards. The interest is definitely more palatable than borrowing from "loansharks", legal or otherwise. These are firms which are too small for our local banks who find them a hassle. 

Through P2P lending, I hope to help some of these entrepreneurs successful.  

For the investors, crowdfunding helps lower the risk as you only lend out small amount of money in return for a higher yield. The yield has to commensurate the risk you take. What investors need is a platform who is reliable in making due diligence on the companies and entrepreneurs who are not crooks. 

It is also important P2P platform will not "run away" with investors money as what happened in China recently. 

My Moolah account

Being the ever "high risk high return" investor who is open to new ideas, I tried out the Moolahsense account this year with a $20,000 initial funding. Have yet to make any "interest" yet as I just started recently. I will blog about my "P2P journey" here over time. If there is a default, I will also let you know. Lol. 

The nominal rate is around 15.05% but the effective is only 8-10%. I will roll over the P+I into new projects and see if the money will compound over time. 

You can watch me from the side and see my "experience" first hand but please don't participate if you have low risk tolerance and definitely don't treat it as an endorsement from me either. It's more for me to share my journey with you. 

What to consider if I want to try out P2P lending?

Well these are the things to consider if i want to try out peer lending :

• it's money that I can afford to lose if any of the companies go bust. Keep to a cap on each loan and spread to many "loans" to get a diversification effect

• invest only in industries which you like or are comfortable with  

• invest in lenders whom you believe will repay you. Most of the lenders are required to provide personal guarantee to the loans they borrow from you. The more guarantors there are, the more "assurance" you have. While lenders who defaulted may not go to jail, it can still be a painful thing for most. 

Happy moolahing. ^_^

SRS Portfolio as of 31 March 2016

March seemed to be an "active" month for both SRS portfolio for my wife and I.

Corporate Actions for March 2016
  • Sold my position in DBS Bank for a profit of around $3,500
  • Made a stupid mistake to "chase" Jumbo and bought at the highest price of 48.5 cents ^_^ 
  • Contributed $15,300 to both SRS accounts. In case you are not aware, the limit was raised this year. You can read more from IRAS website here.
  • A late entry was a $492 distribution from Keppel DC REIT which i didn't update early.
Including the 2016 contributions, the invested capital for our SRS accounts stands at $189,975. Including the unrealised mark to market values of UMS Holdings and Jumbo, the fair value as of 1 April 2016 is around $208,570.

Passive Income Update

This section is purely our investments made for passive income. It does not include the gains or losses from trading. My target is to hit $120,000 per year at retirement using the bond ladder i blog about here. That will hopefully create a monthly income of around $10,000 which we can use to travel round the world. I promise to blog more about my world travelling plans here when i retire next time)

Mrs IPO applied for the Aspial Bonds which i had a write up here. Since she applied for it, i gave it a miss so that on a combined basis, we are not overly exposed to a single counter. Believe it or not, it was her first "virgin" application. Although the interest income goes to her, i will view it as part of the passive income that i am creating for the family. Hopefully, she will get more interested in investing and spend less time on bags and shoes. :-P

I was also allocated 25,000 shares in the placement tranche of Croesus Retail Trust at 75 cents each. The trust is currently yielding more than 10% but i have to say they used a lot of leverage to get that 10% yield. I will hold it for now since i got it at a really nice price.

Based on our stocks and bond investments, the current projected interest income is around $11,600 per year. Still a long way from our target and most of the income coming in April and October. 

Till next time and best wishes for your personal pursuit for financial freedom.

SRS Portfolio as of 29 Feb 2016

It has been a while since i last updated my Starfish SRS portfolio. My last update was on 30 Sep 2015 last year.

One of the reasons why i stopped updating was because DBS stopped sending me the monthly statement but that is frankly a lousy excuse. The other reason was that I am pretty inactive in my SRS accounts and there had been no change in my holdings till February this year. (nothing to buy from Singapore market during this period anyway).  

I will try to make it easier for readers to follow going forward and hopefully i can be more discipline myself in doing more for this two accounts (me and wifey) through trading and investing.

Let's take a quick recap on my cost and holdings 

Invested Capital as of 31 Dec 2015

Fair Value of Holdings as of 31 Dec 2015

Corporate Actions for Feb 2016
  • Sold 10,000 shares of Capitamall Trust at $2.10
  • Received $288 as dividend from Capitamall Trust
  • Trade Singapore Post and received profit of $1,187 (regretted selling too early)
  • Received dividends of $375 from Singapore Post
  • Bought 2,500 shares of DBS at $13.75 (part of my rebalancing in selling UOB)

It was quite funny. My total value actually went up from $134,918 to $144,180 from 1 Jan 2016 to 4 March 2016 (increase of 6.86%)

Wifey's SRS account

Wifey's SRS account didn't fare as well probably due to a few mistakes i made. Let's quickly summarize.

Fair Value of Holdings as of 31 Dec 2015

Corporate Actions for Jan/Feb 2016
  • Received $200 dividend from UOB
  • Received $492 distributions from Keppel DC REIT (updated subsequently to this post)
  • Sold 15,000 shares of Keppel DC REIT at $1.045
  • Sold 1,000 shares of UOB at $16.95 (when the $17 support broke).
The cut loss of UOB turned out to be a very bad move. The share rebounded immediately and it is $1,500 "profit" gone as of yesterday!

The value dropped from $38,631 to $37,010 as of 4 March 2016 (drop of 4.2%)! Better buck up. hahaha.

I am holding all cash in this account today.

Next Steps

I have decided to take a more pragmatic approach towards investing in these two accounts. I am not so fixated on creating "dividend income" anymore but would rather look at growing the total value of these two portfolios till i can withdraw the cash in these accounts. I am currently behind schedule as the value are compounding only at between 3-4% since i started (worse than the special accounts) hahaha.

Sigh! i would need to scale up my own performance! ^_^

Let's check back again later this year.

Creating a Bond Ladder

I spent the last few weeks finishing a book bought during Christmas. (I skip some irrelevant chapters in between and focus on the gist of the book). 

Considering my workload, this is actually quite an "achievement" and I didn't have to travel for work in Feb helped tremendously.  

Bond Ladder

I will assume you know what a bond is. I have blog about a few retail bonds that IPOed last year. You can read about them here

I am not sure if you had heard of a bond ladder but basically what it means is that you buy a series of bond papers at regular intervals and hold them till maturity

Each bond pays you interest twice a year (typically) and the principal amount at maturity. Assuming you repeat that process every month, you will create a portfolio that gives you a stable and predictable cash flows similar to that of a paycheck. If you have no use of those interest, you can reinvest them into bonds to enjoy the magic of compounding (similar to your CPF accounts). 

Unlike dividends, the interest and principal repayment is an obligation by the company to repay. As such, cash flow is predictable as long as the issuer is solvent and able to repay and your capital is returned at maturity.

Why can't the man in the street create a bond ladder?

The key issue in Singapore is the capital outlay as the bond market here is not fully developed. 

Each bond typically requires $200,000 a certificate and are not offered to the man in the street! I can't afford $200,000 each time! 

The regulations are finally changing!

You will be heartened to know that regulations is changing here. MAS is (after much lobbying from others) trying to make it easier for corporates here to issue bonds to retail investors. You can read the MAS consultation paper here.

Setting distribution costs aside, it is currently legally more onerous to issue corporate bonds to retail investors than to accredited investors but this is likely to change soon.

Regulators should have incentives in place to encourage issuers to issue bonds to retail investors like you and me.

In the next 10 months, I definitely hope to see more blue chip and reputable corporates issuing retail bonds in more palatable bite sizes (say in tranches of $2,000). With current technology, I don't see why the bite size can't be even lower.

With smaller bite sizes, it will also be easier to create a more customized bond ladder and allows you to mix and match issuers of different quality and interest rates to diversify against over concentration.  
Credit standing of issuers are important

The book which I was reading encouraged only investment grade bonds. That means the bond ratings by S&P, Moody's and Fitch are at BBB or better (A, AA and AAA). 

Buying a bond issues by credit worthy companies ensure very low risk of loss on the original capital and let you sleep soundly at night. 

How much do you need each month?

Each person has different values and life styles. Do you like to travel? Do you wine and dine a lot? Do you have family to take care of? Do you want to donate to charity? 

I have recreated a simple bond ladder for you. This is how it would like once we can invest in bite size amount and you manage to create a portfolio of $600,000. In a steady state condition, it would look like this:

If you refer to the table above, a final capital size of $600,000 yielding 4% will generate a monthly income of $2,116 in a steady state. If your lifestyle warrants a higher capital amount, then you should adjust accordingly and invest more. This monthly income can of course be supplemented by your other passive income sources like stocks and properties.

Can i create a bond ladder today?

You can if you have a large capital to start with. You can call you broker for a list of bonds traded. Please see an example of bonds traded in Singapore here which i get from my broker. 

As i mentioned above, it will cost you around $200,000 to $250,000 for most of them. Most secondary bonds are traded Over-the-Counter. (I haven't bought any bonds from the OTC market yet).

My first bond purchased was made in October last year where i bought Perennial Real Estate Bonds. You can read the write up here. I have yet to receive the first interest amount.It will come in April this year! 

Get ready for it

The further development of the retail bond market is good news for you and me. We can start to create our passive income in smaller amounts but i would recommend going for the blue chip names for a start even though the yield is lower but you would want to sleep soundly at night.

That is it for today. I will blog more about my activities in SRS in another post.

Happy Bonding.