Finished one round of my Bond Ladder

I blogged about creating a bond ladder last year Aug: 

https://financeopti.blogspot.com/2023/08/creating-bond-ladder.html

As of May 2024, I just finished one round of my 'bond ladder'.

It is mixed with fixed deposits in Stashaway for the first 2 months of Jun and Jul 2023:

For the next 4 months of Aug, Sep, Oct, and Nov 2023, I subscribed to 6-month TBills:

Here are the stats:

Total profits = $1,104.35

Average profits per month = $184

Average interest rate = 3.70%

Here are my learnings:

• While this is meant to be passive income, it took more effort than I initially thought. Firstly the issue dates are not on a fixed day of every month, you have to check the Issuance Calendar from the MAS website. Next, you have to put a task in your calendar so that you won't forget to subscribe

• Subscribing is a breeze now with online applications. I use OCBC, where you can use cash or CPFIS to subscribe

• No idea how to determine the rate for 'Competitive' bids, so I simply apply for 'Non-Competitive' bids

• Applications are closed on holidays, so if the Auction date is T and you try to subscribe on T-1 which is a holiday, you are already too late and have to wait 2 weeks plus for the next round. This means your cash sits idle in this period, so plan properly

All in, it was easy money, just take time. 

Financial Fine-tuning: Unlocking My Deposit Account Efficiency

There was a good article earlier this month comparing the different interest rates among the banks in Singapore:

https://www.straitstimes.com/business/some-banks-in-singapore-not-cutting-interest-rates-on-flagship-savings-accounts-amid-us-rate-cut-delay

 

I did a recalculation of the interest I will get for different banks.

Prior to Jan 2024, the highest interest I will get is from Maribank, Trust, and GXS. So my accounts were set up correctly:

Starting Jan 2024, I received a monthly salary, so I am now eligible for salary credit interest. Based on that, the highest interest I can get is from OCBC360. However, it is too bad I cannot get their OCBC365 credit card - I canceled it when they started charging me an annual fee and now when I re-apply, they reject me. 😔

The bank account that now gives me the highest interest is OCBC360:

With this, I will have to start moving my army again and position them in the right places. 

Have you looked at your bank accounts yet? There may be pockets of optimization you can do like this. After all, this is pulling money from thin air, with a small effort like the above. 😃 

Portfolio Returns for May 2024 - Slight Turbulence and All-Time Highs

I felt it would be good to track the returns regularly since the returns will fluctuate from time to time depending on the stock market.

Here are the movements for this month:

What was interesting this month was the correction in SP500. After dropping from 5264 to 4953 from 28 Mar to 19 Apr (3 weeks, a drop of ~6%), it is back on its upward path. Hence the upward tick on my SPY fund. Other than that my crypto portfolio saw a spike! More on that below. 

For the Robo-Advisors, most reached all-time highs. Syfe Reit saw a recovery from its all-time low. 😛

Additionally, I think it will be interesting to see the breakdown of my portfolios in percentages (above). There is a component 'X' which I do not want to disclose for now. The concentration of 'X' over the last month has dropped from 19.6% to now 15.8% but is still too high. 

Market events over the last month:

• The wars in the Middle East and Ukraine see no signs of subsiding. Judges at the top United Nations Court ordered Israel to immediately halt its assault on the Southern Gaza city of Rafah, amidst accusations of genocide. Even within Israel itself, there are protests against Netanyahu's government. If even his own people don't support him, I wonder what is the point of this war exactly? Once again, we see how the madness of a single person with power can cause chaos in the world. 

https://www.reuters.com/world/world-court-rule-request-halt-israels-rafah-offensive-2024-05-24/

https://www.aljazeera.com/news/2024/4/6/thousands-of-israelis-protest-against-government-urging-captive-deal

• Bitcoin halving is done as of 20 Apr 2024. After that there is a drop in prices, followed by a slight increase. 

Where will it go from here, I quote from Motley Fool below. We will only know if it increases 400% in Apr 2025, 1 year from now. 

https://www.fool.com/investing/2024/05/24/heres-how-the-bitcoin-halving-is-playing-out/

Historically, in the year following a halving, Bitcoin has risen by more than 400% and reached new all-time highs. While Bitcoin has already achieved a new all-time high, the effects of this halving, combined with increased demand from recently approved spot Bitcoin ETFs, could exert significant pressure on its supply in the long term.

• SP500 suffered a drop of 6% in 3 weeks from end-Mar to mid-Apr. From Investopedia's definition of 'technical correction', this does not translate to a technical correction, since the drop of 6% is less than the >10% and <20% required. Will there be a 'real' correction later on? I think for sure, but no idea when it will happen. 

https://www.investopedia.com/terms/t/technical_correction.asp

• Straits Times Index got a boost this month from news of sweeping measures to rescue the flailing Chinese property market. Specifically, Beijing removed the floor on mortgage rates and encouraged local governments to acquire homes to convert into affordable housing. Let's see if this will lift my Capitaland China Trust 😅

https://www.straitstimes.com/business/companies-markets/sti-rises-03-after-china-unveils-property-stimulus 

• Inflation Data (May 13th week): Higher-than-expected inflation reports (consumer and producer price index) raised concerns about the Federal Reserve needing to keep interest rates high. This caused a stock market decline, snapping a winning streak.

Wrapping up my Eleventh Month of Financial Independence

I just finished my eleventh month of FI (Financial Independence) in Apr 2024.

Below is what I ate and did for fun, and a record of my expenses.

Eating

Kampong Nasi Goreng

Fun

Harvested Chinese Mustard

Harvested Spinach

Harvested Bayam

Sun-facing side of Spinach before it was harvested

Health

I got some comments that with old age, unexpected medicine bills will occur e.g. knee replacement and so on. To minimize these probabilities, I am going to start exercising more while still in my early 40s. 

On alternate days I will do the 2 sets of exercises below:

Set A:

• 1min dead hang
• 1 min plank
  
• 25 secs side planks
  
• 10 leg raise
  
• 10 knee raise
  
• 10 leg raise
  
• 10 knee raise
  
• 5 side and leg raise
• L hang till drop

Set B:

• stretching
• 10 tricep pushups
• 10 diamond pushups
• 10 spider pushups
• 10 ab pushups
• 10 simple leg lifts on each side
• 10 compact leg lifts
• 10 shoulder lifts on each side

Additionally, I used to only exercise jog once a week on Wed. Now I jog on both Wed and Sat morning. I also go swimming around once a week probably Friday or Sunday.

After starting these exercises, I feel fitter and my right knee pain is not as pain as before. My tummy is also not as big as before 😀😁

I plan to keep going for 6 months and note the difference.

Expenses

In terms of expenses, I busted some budgets this month but still manageable. 

 

Eating Out Target: $650

Eating Out Actual: $529.58

Household Target: $600

Household Actual: $168.08

Travel Target: $100

Travel Actual: $10.60

Entertainment Target: $50

Entertainment Actual: $118.45 (rock climbing package for me and my 2 kids)

Personal Target: $250

Personal Actual: $118.74

Onwards to the next month of FI! 

Dividends for Apr 2024 - Towards 5k a month

Here are my dividends for Apr 2024:

So I collected $1,075.55 in dividends for this month.

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

Here are my monthly dividends over the last 6 years:

It seems Apr is typically a 'low' month for dividends.

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

Interestingly, in 3 years, I have already surpassed my total yearly dividends in 2021. And it is only Apr!

I plan to first receive $2500, then finally $5000 in dividends every month on average.

Additionally, I share the interest I received from the various banks for the deposits in this month:

So I collected $469.69 in interest payments this month.

Onwards!  

Is STI really the Super Terrible Index? My returns after investing 10 years

The Straits Times Index has been labeled as the Super Terrible Index. 

This is because of the lost decade in the STI.  

In particular, if you look at the chart below, the STI has not broken the all-time high of 3,906 since 2007.

In fact, it has been almost flat since the recovery from the Great Recession of 2008. 

I have started DCA into the STI ETF since 2014:

There are good days and bad days:

You can see the stock market crash of 2020 brought about my biggest returns:

Once I hit my target of 100k in 2022, I stopped the DCA:

Along the way, I have collected $17,721.62 in dividends.

So how much returns has that netted me?

Without dividends included, I achieved a CAGR of 1.7%. With dividends included, my CAGR increases to 4.4%. This CAGR is computed using the FV() formula in Google Sheets. 

Is this good? Well, at least it beat CPF returns of 2.5% in OA and 4% in SA. Does it beat SP500? Definitely not. But I have another SP500 fund to capture the returns from this sector. I plan to continue holding this STI ETF fund because as the saying goes, don't put all your eggs in one basket.  Since I have achieved FI, I intend to engage in more defensive plays. Diversification is important. In the meantime, I will continue to enjoy my dividends from this STI ETF fund!

I would also like to share the below:

Why did you invest in STI ETF?

It started with reading a Motley Fool Singapore article around 2012 that STI compounded annual returns are around 8%. Hence I invested.

What did you use to invest in STI ETF?

OCBC Blue-Chip Investment Plan. I think this is one of the best dollar-cost averaging schemes out there. Fully automated, so emotions will not come into play. 

Do the returns above take into account fees?

Yes, the above returns take into account fees. In the BCIP scheme, you designate a fixed amount to deduct every month, say 1400. From there, the fees ($5) are deducted and the remaining amount is invested. CAGR is computed using 1400, so the CAGR takes into account fees. 

I collected a lot of quotes about STI returns and will share them in another article.