Breaking Free: I have achieved FINANCIAL INDEPENDENCE 3.0!

I have achieved the FI 3.0 target I set for myself. Let me share my journey to get to this point:

I achieved FI (Financial Independence) 2.0 in Jun 2021.

I have been aiming for FI 3.0 since Dec 2021 (see this post: http://financeopti.blogspot.com/2021/12/revisiting-my-fi-fi30.html).

Firstly, a recap of what is FI 3.0. It has a few buffers baked in:

• CPF is not included in the Starting Balance - this is the first buffer
• The withdrawal rate is reduced from 4% to 3% - this is the second buffer
• Certain expenses are assumed to last till perpetuity, even if it may not be the case. An example is children's class fees. 

Below is the amount I have accumulated up to now:

Which is more than the 'Required Savings' necessary for FI:

In other words, I have achieved FI 3.0!!

I have started this journey ever since I completed my graduate studies. Roughly, it took me 11 years to get to this point. 

I just want to share some practices that helped me get to this point:

• I own only 1 property - my HDB flat, which is my matrimonial home
• No car
• I use freebies whenever possible - my watch is free, my shoes are free, and my bag and jacket are given free from my previous companies
• For 2 years, I took MRT to work at unearthly hours (exit station before 7.45am) to spend $0 on transport
• Side hustles - I took up side hustles including food delivery, paid surveys, writing 2 blogs (one technical blog and one FI blog)
• I do repayments to my mortgage loan regularly - now my loan has only ~$950 remaining
• I invest regularly - in stocks and bond
• Whenever I get upset at work, I keep in mind I have a bigger goal in my life - to achieve FI and I endured it to get to this point

In hindsight, some points above actually didn't help much on my FI journey (paid surveys paid peanuts for example), but they helped build the discipline and the conviction I needed to achieve FI. No regrets.

What's next for me? Well, I plan to take a sabbatical (minimum 9 months) from my present company.

Here are some of my reasons for taking a sabbatical:

• Be able to sleep better at night - e.g. for the past week I can't get to sleep until after midnight, or very often I wake up 2-3am, think about work, and then am not able to get back to sleep
• I burst the income ceiling for BTO long ago - by taking a sabbatical, I will draw no CPF, which will qualify me for our dream 5-room BTO
• Issues at work - unsupportive and unhelpful colleagues that only care about themselves, not enough support from bosses, too many whiners and complainers at work thus creating a toxic environment, etc. Typical work gripes I guess
• Real-life test of my FI expenses - all my expense calculations to date are based on when I am still working full-time. Will my expenses stay the same after I stop working full-time? Only by stopping full-time work will I know for sure
• Find time to work on my technical blog
• Find time to create more quality articles for my FI blog (yes, this blog)
• Find time to spend more quality time with my kids e.g. if my kid is sick, he can stay at home instead of going to my parent's place, or I can avoid a scenario whereby I have to juggle taking care of him and working at the same time
• Find time to do some self-study
• Find time to rest more - I got too many comments from colleagues and family that I look tired over the past few years. I want to do something about it by finding time to get proper rest and doing something that I am truly passionate about
• Find time to start exercising more regularly instead of just once a week - need to take care of my health. Now in my 40s, health issues are starting to pop up: eyesight not good, catch bugs easily, knee pain, etc. 
• Find time to have the freedom to travel a bit further to get a good lunch instead of eating the same stuff around my neighborhood because I have to get back to work 
• Find time to do volunteer work and help the community - I find this to be meaningful
• Find time to be closer to nature - will like to go for regular nature walks and not have to take leave to do so
• Find time to do some administrative things - writing my will, fixing my laptop, and changing to a cheaper phone plan are some of them
• Find time to launch my startup. Yes! I have many ideas! Now that I am FI, coupled with my work experience over the past few years, there is no better time to start!

Do you have any questions for me? Ask below!

Maximizing Your Retirement Pot: How to Top Up Your CPF

So CPF changed the layout of their website again, which probably left some users confused.

In this article, I will show a step-by-step guide to topping up your CPF Special Account (SA).

On the CPF website https://www.cpf.gov.sg/, first log in using your Singpass.

Next navigate to 'Tools and services' - 'Forms and e-applications', as below:

Next under 'Save more with CPF', click 'Apply online':

Useless page below, simply click the checkbox and 'Start':

Choose the option to top-up, for me I chose 'Cash top-up via eNETS':

Next, you are directed to another useless page, but make sure the selection is correct as below:

Another bunch of stuff to read, click the checkbox and 'Start' (again!):

Fill up the boxes below, and once done click 'Next':

Check what you entered is correct, then click the checkbox and 'Next':

Select your bank and top-up via eNETs:

For me, the flow ended at my bank's website. Wish it will send me back to CPF to complete the flow:

Thats it! Totally convoluted flow, wish CPF gets a proper UX team!

Silicon Valley Bank Collapse: Your Questions Answered

In this post, I try to understand the collapse of the Silicon Valley Bank, since this is a historical event. Answers are generated by Bing with minimal editing on my part. 

What caused the Silicon Valley Bank to collapse?

SVB failed on March 10, 2023, after a bank run and a capital crisis. It was taken over by federal regulators. It was the largest bank failure since 2008.

What is a bank run?

A bank run is when many customers withdraw their money from a bank at the same time because they fear that the bank might fail. This can make the bank insolvent and unable to pay back its depositors. 

How did the rise in interest rates cause depositors to withdraw their money?

SVB was vulnerable to a rise in interest rates because it had invested heavily in tech stocks and bonds that lose value when rates go up. When the Federal Reserve announced a rate hike on March 9, 2023, investors panicked and sold off SVB shares, causing its stock price to plummet. This triggered a loss of confidence among depositors who rushed to withdraw their money before the bank ran out of cash. 

Why did SVB make a massive loss of US$1.8 billion on its investments?

SVB made a massive loss of US$1.8 billion on its investments because it had to sell a large portion of its bond portfolio at a lower price than it bought them. This was because SVB needed to raise cash quickly to meet the demands of depositors who were withdrawing their money. The bond prices had fallen due to higher interest rates. 

Why do bond prices fall when interest rates rise?

Bond prices fall when interest rates rise because bonds pay a fixed amount of interest that becomes less attractive when new bonds offer higher interest rates. This lowers the demand for existing bonds and reduces their market value. 

What is the impact of the SVB collapse on other companies?

The impact of the SVB collapse on other companies is still uncertain, but some possible effects are:

• Some Chinese firms that have business ties with SVB said they have seen limited impact so far, but some analysts warned about global risks
• Some Israeli tech companies that relied on SVB for funding and banking services may face difficulties or losses
• Some U.S. tech stocks and bonds may lose value as investors lose confidence in the sector

What are the companies that deposited the most money in SVB?

The exact list of companies that deposited the most money in SVB is not publicly available, but some of them are:

• Roku, which said it has nearly $500 million with SVB
• Roblox, which said it has about $300 million with SVB
• Nazara Technologies, which said its two subsidiaries hold cash worth $8.7 million in SVB

These companies are among the 90% of SVB's depositors who have more than $250,000 with SVB and are not fully insured by the FDIC.

Without access to their deposits, these companies are unable to pay their employees!

What are the banks that experienced a bank run in the 2008 financial crisis?

One of the banks that experienced a bank run in the 2008 financial crisis was Washington Mutual, which collapsed in September 2008 and was acquired by JPMorgan Chase. Another bank that faced a bank run was Northern Rock in the UK, which was nationalized by the British government in February 2008. 

However, the most recent bank failure is Silicon Valley Bank. This is the largest failure of a financial institution since Washington Mutual more than a decade ago.

References

https://www.businesstimes.com.sg/companies-markets/how-bank-run-closed-svb-and-where-could-lead

Dividends for Feb 2023

 Here are my dividends for Feb 2023:

So I collected $722.25 in dividends for Feb 2023. 

In case you are wondering, some stocks are repeated because I have 2 brokerage accounts. 

Here are my monthly dividends over the last 5 years:

Here are the dividends I collected every year until the current day:

Let me know if anything else you want to know about my dividends?

Onwards!

State of the S&P500 and STI

 I took a look at the charts today.

Typically, I do not follow technical analysis religiously, but thought I will just take a look and make a note.

S&P500 broke out of the long-term downtrend around 24 Jan 2023, which bodes well. But now the S&P500 dropped after a short bull run. From the charts, it looks like it will continue dropping to 3870 to 3890 area before a rebound. 

The Straits Times Index is a bit harder to call:

It recently broke through the resistance level at 3302. Also, there is a bearish crossover of the 10 and 50 day simple moving average. Room for further fall, before a rebound. 

Only time will tell, let's see. 

Spotted ANOTHER Misconception about FIRE

 Recently there is another comic published by TWS which really resonated with me:

https://www.facebook.com/2250666538582187/posts/pfbid0J56M6pCuB6jsGUBpkdXnKvX8E5PoALfhbAuK1fYoLyfvrPsePpR1EZ87DUC23dz7l/?mibextid=cr9u03

It started off well with the couple celebrating their valentine's day:

However, things started to go wrong when the girl gifts the guy an expensive gift and he does not agree:

I have no issues with the comic itself, it is simply pointing out a difference in opinion. To each his own, as they say. It is up to the individual whether he/she wants to pursue FIRE or not. 

However, I have issues with the comment given below, where an individual uploaded this in her comment:

I believe what the individual wanted to say is: "No point saving up so much money now and not spending it, by the time you realize it, you will be on your deathbed and have no more opportunity to spend it".

How wrong this is!

The whole point of FIRE is that you can retire BEFORE you hit your deathbed. Imagine! If you can retire at age 45, how much time you will have to enjoy life! 

If it were up to me, I will insert another pic in between the 3rd and the 4th in the above illustration to show the character enjoying her life because of FIRE, BEFORE hitting the deathbed. 

Taking Stock of my FI 3.0 Journey

I achieved FI (Financial Independence) 2.0 in Jun 2021.

I have been aiming for FI 3.0 since Dec 2021 (see this post: http://financeopti.blogspot.com/2021/12/revisiting-my-fi-fi30.html).

As per usual during this period of the year, now is the time to take stock of my FI 3.0 journey and see how I stand. 

Firstly, a recap of what is FI 3.0. It has a few buffers baked in:

• CPF is not included in the Starting Balance - this is the first buffer
• Withdrawal rate is reduced from 4% to 3% - this is the second buffer
• Certain expenses are assumed to last till perpetuity, even if it may not be the case. An example is childrens' pocket money. 

This is where I am now:

Based on my tracking of daily expenses in 2022, I also made a few adjustments:

• Personal spending is increased from $50 to $100 a month
• Travel spending is increased from $50 to $100 a month
• Eating out spending is increased from $600 to $650 a month
• I have also increased the spending for CNY Ang Bao based on previous experience

With the above considerations, I re-calculated my FI, and found that I will need 1.5 million to achieve FI 3.0. I have 0.62 more months to go to achieve FI 3.0:

I'm excited! Have to be really careful with my spending and money now! It is close!

Dividends for Jan 2023

 Here are my dividends for Jan 2023:

So I collected $2644.74 in dividends for Jan 2023. 

In case you are wondering, some stocks are repeated because I have 2 brokerage accounts. 

Here are my monthly dividends over the last 5 years:

Here are the dividends I collected every year until the current day:

Let me know if anything else you want to know about my dividends?

Onwards!

Robo-Revolution: A head-to-head comparison of the top Roboadvisors

To better understand the differences among the Roboadvisors, I decided to looker deeper at their investment strategies. 

Where available, I attach screenshots of where this information is available in the mobile/web app.

So I use 3 Roboadvisors:

• Endowus - General Wealth Accumulation 80-20
• Syfe Stockpile
• Stashaway General Investing

Equity-Bond Allocation

Endowus - General Wealth Accumulation 80-20

Syfe Stockpile

Stashaway General Investing - It does not have equity-cash breakdown readily available.

Here are the pie charts of the equity-cash breakdown:

Asset Allocations

Endowus - General Wealth Accumulation 80-20

Syfe Stockpile

Stashaway General Investing - this provides the nicest visualization here. 

Here's all the Roboadvisors in one chart:

Interestingly, Syfe Stockpile has more US equities than International equities but it is the other way around for Stashaway. 

Geographical Allocations

Endowus General Wealth Accumulation 80-20

Syfe Stockpile - no readily available info or visualization

Stashway General Investing

Here are the pie charts of the geographical allocation breakdown:

Seems all 3 are concentrated in North America, Asia and Europe, in this order. 

If you are interested to try out these roboadvisors, feel free to use my referral codes below:

Endowus:   HDOJH

Syfe:           SRPSL4GWK