Thursday, December 30, 2021

How much do I have in stocks? | Financial Snapshot - Dec 2021

 This is a snapshot of my finances at the end of 2021.

Naturally, I do not want to disclose too many details or my net worth, the amount I have in banks, etc. so I will just share the following:

Year endingStocksBonds

Not included in the above are bank savings, insurance policies, CPF, SRS, etc. The above is just the amount of stocks and cash in my 2 stock brokerage accounts, the stocks in my BCIP, SRS, and Robo-advisor accounts, and the bonds I am holding at the moment. Since starting work in the US from Oct 2017 onwards, I also added my 401K and Wealthfront investments to the above.

Tuesday, December 14, 2021

Revisiting my FI - FI3.0

 I have been thinking quite a bit about my FI (Financial Independence) calculations. I think it is really important to get it right before one quits his/her job.

To calculate FI, I have been using the spreadsheet created by the Mad Fientist, with some modifications of my own to suit my own context. 

The most important variable in the spreadsheet is the Starting Balance  (aka 'net worth' in the spreadsheet above) which I feel is really important to get it right:

Questions that come to mind include:

  • Should it contain property?
  • Should it contain CPF?
  • Should it contain childrens' endowment funds (used for future uni fees)?
  • Should it contain bonds?
So here's what I think:

The starting balance should not contain property, because it cannot grow at the desired 8% per annum. For the same reason, the Starting Balance should also not contain CPF and children's endowment funds. The remaining payments for childrens' endowment funds should also not be included in the Starting Balance. 

For bonds, even though historically bonds do not have an 8% per annum growth rate, Starting Balance can contain bonds on the assumption that the overall portfolio (cash, bonds, stocks, robo-advisors, crypto, p2p lending) can achieve an 8% per annum growth rate.  

So we have:
Starting Balance = Total assets - Total liabilities - CPF - Childrens' endowment funds - Remaining childrens' endowment fund payments

A benefit of subtracting away CPF is that now CPF forms a buffer of sorts in the event that one runs out of money earlier than expected. CPF is my 1st buffer.

There may also be future increases in expenditure, one of which I can think of is childrens' pocket money. I have already included this in the current expenses under 'kids misc'.  Since children will not need pocket money to perpetuity, this forms another buffer. This is my 2nd buffer.

I have also reduced my withdrawal rate from 4% to 3% as recommended by articles such as this:

The reduction in withdrawal rate from 4% to 3% forms my 3rd buffer.

Since achieving FI2.0 roughly 6 months ago, I have also been a bit less strict with how I spend. This lets me understand a bit more of my actual spending when I actually retire (ie. quit my job). Needless to say, my actual spending is higher than that budgeted. For example, spending on food can go up very fast if one is not careful. So I increased my budget for a few categories:

  • household spending is increased from $300 to $600 a month
  • eating out spending is increased from $550 to $600 a month

With the above considerations, I re-calculated my FI, and found that I will need 1.4 million to achieve FI3.0. I have 3 more months to go to achieve FI3.0:

Sunday, December 5, 2021

Dividends for Nov 2021

I decided to do a monthly snapshot of the dividends I collected for the month. The aim is to grow the monthly dividends over time.

So I collected $1083.49 in dividends for Nov 2021. Not too shabby. In case you are wondering, some stocks are repeated because I have 2 brokerage accounts. 

I also compiled my monthly dividends over the last 3 years:

Finally, here are my yearly dividends over the last 3 years:

Happy to say that the yearly dividends have been increasing year over year.